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Author Topic: The "Axis Of Gold" Will Drive Gold Higher by the End of 2018  (Read 68 times)
Hydrogen
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May 27, 2018, 04:39:56 AM
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A major blind spot in U.S. strategic economic doctrine is the increasing use of physical gold by China, Russia, Iran, Turkey and others both to avoid the impact of U.S. sanctions and create an offensive counterweight to U.S. dominance of dollar payment systems.

This is the Axis of Gold.

This gold-based payments system will dilute and ultimately eliminate the impact of U.S. dollar-based sanctions.

Gold offers adversaries significant defenses against these dollar-based sanctions. Gold is physical, not digital, so it cannot be hacked or frozen. Gold is easy to transport by air to settle balance of payments or other transactions between nations.

Gold flows cannot be interdicted at SWIFT, the international payment system. Gold is fungible and non-traceable (it is an element, atomic number 79), so its origin cannot be ascertained.

We have a lot of data to support the claim that the Axis of Gold exists and is gaining strength.

We know that for example, Russia has tripled its gold reserves in the last ten years. It’s gone from about 600 tons to over 1800 tons of physical gold, and is moving very quickly towards 2,000 tons. That’s an enormous amount of gold.

China is also amassing physical gold at an astounding rate. Like Russia, it has tripled its gold reserves, officially from 1,600 tons to 1,800 tons.

But we have very good reason to believe China actually has a lot more gold than that.

China might actually own up to 4,000 tons of physical gold. We don’t know the exact number because China is highly secretive about its gold acquisitions. But that’s a reasonable estimate. China is also the world’s largest gold producer with mining output of about 450 tons per year.

Iran also has an enormous amount of gold. Iran received billions of dollars in gold from the Obama administration as bribes to join in the now discredited nuclear deal (the “JCPOA” or Joint Comprehensive Plan of Action) to limit Iran’s nuclear weapons program.

Iran has also received gold imported from Europe via Turkey, but the exact amount is unknown.

We don’t have any insight into how much it has because it’s also highly nontransparent. But in the first quarter of 2018, Iranian gold bar and coin purchases more than tripled.

Turkey is also acquiring enormous amounts of gold, which should not be surprising given Turkish president Recep Erdogan’s recent comments questioning the role of the dollar in global trade.

The Turkish central bank has almost doubled its gold holdings since last May, according to the World Gold Council. And it was the second largest buyer of gold among central banks for the first quarter of 2018.

So that’s the Axis of Gold. Again, evidence for this Axis of Gold is overwhelming.

I have contacts in the national security industry community who have, in their own roundabout way, been able to confirm that to me, so it’s very clear that’s what’s happening.

This is the type of information you don’t see in the headlines. This is very granular, but it’s all going on behind the scenes.

I’ve explored the implications in many financial war games and other meetings as I’ve described in my books.

I’m also on the Board of Advisors of the Center for Sanctions and Illicit Finance, which is the leading think tank on this subject. I meet with others who are expert in this area, including current and former government officials.

I’ve warned the Pentagon and the Treasury Department about this threat for years. But the message has yet to sink in. The U.S. is still unprepared for this coming strategic alternative to dollar dominance.

Meanwhile, U.S. trade sanctions on China, Russia and Europe are just beginning to bite. Trump’s new sanctions on Iran may be the last straw in the world’s willingness to tolerate what is perceived as U.S. bullying through the use of dollar-based sanctions.

These headwinds are illustrated in the chart below. This shows the customers for oil exported by Iran. China is Iran’s largest oil customer by a wide margin. China’s need for imported oil is huge and Iran’s need for hard currency from its oil exports is existential.



If the U.S. makes it impossible for Iran to pay or receive dollars or other hard currencies for its oil exports and machinery imports, Iran will have to resort to other payment channels. China would be willing to pay Iran in yuan, but Iran’s appetite for yuan is limited.

As mentioned above, an obvious solution is for Iran and China to settle their balance of payments accounts in gold.

Trump’s sanctions on Iran are a double-whammy.

On the one hand, they impede global trade and growth; especially in Europe where growth was already slowing down before the sanctions. On the other hand, the Axis of Gold will create enormous demand for physical gold as an alternative to dollar payments vulnerable to U.S. sanctions.

At the same time, the Axis of Gold creates huge embedded demand for gold as the Axis nations build out an alternative to the dollar payments system.

But right now gold mining output is flat, western central bank sales of gold have ceased, and acquisition of gold by the Axis is increasing.

With limited output, limited western sales, and huge eastern purchases, it’s only a matter of time before a link in the physical gold delivery chain snaps and a full-scale buying panic erupts. Then the price of gold will soar regardless of paper gold manipulations.

Meanwhile, Fed tightening combined with weak growth will push the U.S. economy to the brink of recession later this year.

That will cause the Fed to reverse course and pause in their path of rate hikes. The pause will come possibly in September, and almost certainly by December. The perception of the Fed flipping from tightening to ease will remove a major headwind to higher gold prices and create a tailwind.

Future Fed easing combined with strong demand for physical gold will result in much higher gold prices by year end. The next few months could still be a bumpy ride for gold, but late summer and fall look promising for much a push to $1,400 per ounce or higher.

Last week’s drawdown in gold prices should be seen for what it is, a temporary reversal in a new bull market. The current gold price of about $1,300 per ounce is a classic “buy-the-dips” opportunity that won’t come again soon.

But before long it may be too late for investors to benefit because the ready supply of physical gold will be gone. The time to take a position is now.

The days of dollar dominance are numbered. The process won’t happen overnight, but the signs all point in one direction.

Got gold?

https://www.zerohedge.com/news/2018-05-26/axis-gold-will-drive-gold-higher-end-2018

Here's an interesting take on things. In a way, reading this almost sounds like a parody. It reeks of those advertisements where investors with precious metals fever try to convince people the price of gold/silver/precious metals will go to the moon. Or the doomsdayish scenarios laid out by those who claim precious metals will takeover after the crash of fiat currencies. Except in this case, the people who are promoting gold are entire nations like russia, turkey, china and others who could very well be hoarding piles of gold. Perhaps they're preparing for the demise of the us dollar or seeking financial independence from the USA who they might feel is attempting to "bully" them unnecessarily.

Whatever the reality of this is, there could definitely be evidence for this with Erdogan, china and others visibly pushing for greater support and utility for precious metals. The big question may be whether these many nations who don't appear to trust the united states can themselves be trusted to manage their precious metals holdings responsibly and intelligently in a way which will guarantee economic stability for their respective countries.

We could be witnessing a buy in phase blip of precious metals here, which will turn into an upswing later on the virtue of gold having additional utility and transactional/trading volume, which could lead to higher demand.

Not certain how crypto currencies might factor in to this, if it turns out to be true. While gold may be feasible as a means of conducting transactions for entire countries, individuals typically are not as well suited to support wide scale precious metals support. If the price of gold rises sharply, its possible it will *pull* the value of bitcoin up with it as bitcoin is essentially similar to gold but also far better suited for average use by the people.

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davis196
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May 27, 2018, 11:26:14 AM
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I thought that the country with the biggest gold reserve in the world is USA.
Favorising gold transactions over US dollar transactions won`t hit the US economy nore the  value of US dollar.All the gold supporting countries want to avoid the future inflation, caused by the federal reserve money printing machine.That`s why they want to stop using USD for major transactions.

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May 27, 2018, 07:56:53 PM
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Not certain how crypto currencies might factor in to this, if it turns out to be true. While gold may be feasible as a means of conducting transactions for entire countries, individuals typically are not as well suited to support wide scale precious metals support. If the price of gold rises sharply, its possible it will *pull* the value of bitcoin up with it as bitcoin is essentially similar to gold but also far better suited for average use by the people.

Gold does seem undervalued right now. And countries are indeed expressing their support it seems like a bull market in precious metals is imminent, except it's only a matter of when it will happen.

Precious metals prices have actually been extremely quiet in most of this decade, and that to me is just another sign that that particular asset class will probably thrive soon.

However, long term, as you said, bitcoin simply seems like a more viable option for individuals to use. Gold will remain to be a dominant force in the economy, being a store of value, but it's not divisible nor convenient, thus it's hard for individuals to use as actual units to trade with. Bitcoin, as you said, is simply a better version of gold imho. And yes, BTC value could get dragged up as well when the metals bull market comes.

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May 27, 2018, 10:18:29 PM
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Gold does seem undervalued right now. And countries are indeed expressing their support it seems like a bull market in precious metals is imminent, except it's only a matter of when it will happen.Precious metals prices have actually been extremely quiet in most of this decade, and that to me is just another sign that that particular asset class will probably thrive soon.

Gold was $1660/ounce in 2013. Gold will have all time high price of $2100/ounce. -30% fall in stock markets will bring all the money to gold and silver.
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May 27, 2018, 10:32:41 PM
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Hydrogen, I generally respect what you write on bitcointalk, but I think this is a load of horse shit and I'll tell you why.

Zerohedge is a collection of basically anonymous doomsday nutjobs (obvious), and my guess is that they also represent the precious metals dealers to some extent (speculation).  Their articles sound just like all the other ones--metals are soon going to go up, because [insert fearmongering reason here].  And then gold & silver just keep going sideways for years on end.  Gold demand is always increasing in their eyes.  Same with silver.  And while that might be true, the market sure isn't reflecting it and I trust the market more so than a whacko website like Zerohedge.

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May 28, 2018, 11:36:47 PM
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Hydrogen, I generally respect what you write on bitcointalk, but I think this is a load of horse shit and I'll tell you why.

Zerohedge is a collection of basically anonymous doomsday nutjobs (obvious), and my guess is that they also represent the precious metals dealers to some extent (speculation).  Their articles sound just like all the other ones--metals are soon going to go up, because [insert fearmongering reason here].  And then gold & silver just keep going sideways for years on end.  Gold demand is always increasing in their eyes.  Same with silver.  And while that might be true, the market sure isn't reflecting it and I trust the market more so than a whacko website like Zerohedge.

You could be 100% right about this article on gold being one of those conspiracy theories that don't pan out. It reads like a parody from theonion. The main I posted it is its the closest thing to a legit article I've read for the price of precious metals increasing so of course I had to post it for the precious metals advocates in here, to give them hope.

All I can say is, I looked at my older bookmarks to check how long I've been following zerohedge. Some of their articles I favorited are from 2011 which means I've followed them for at least 7 years.

There's a chance zerohedge has a negative reputation for being one of the few financial / economic platforms offering an independent slant on things. I've seen them cover a lot of bs over the years that no one else would touch. Over time they've often proven themselves to be right while other mainstream sources have been the opposite.

Over the 7 years I've followed zerohedge, they were one of the few places that said the deficit and debt were real issues while every other mainstream source said those were irrelevent topics. Zerohedge was one of the few places which pointed out issues with social security, healthcare reform and similar topics.

That said, the quality of ZH content has declined over the past 1-3+ years. The same happened with fool.com, techdirt and other places which used to offer a more independent perspective but recently the quality of their content has decreased.

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May 29, 2018, 12:15:55 AM
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Gold does seem undervalued right now. And countries are indeed expressing their support it seems like a bull market in precious metals is imminent, except it's only a matter of when it will happen.Precious metals prices have actually been extremely quiet in most of this decade, and that to me is just another sign that that particular asset class will probably thrive soon.

Gold was $1660/ounce in 2013. Gold will have all time high price of $2100/ounce. -30% fall in stock markets will bring all the money to gold and silver.

There was a 30% fall in the stock market during the financial crisis and it didn't "bring all the money to gold and silver" so there's no basis for this conclusion and the one recent data point we have for it actually works against the conclusion. People who are bullish on gold seem to habitually over estimate what gold is going to do, and this general trend has held mostly true with Bitcoin as well. No matter how high it goes, people are convinced it will continue to put up quick 4x or 5x returns. In short, mass delusions. It's likely Bitcoin reached the moon already and nobody realized it because they were blinded by greed.
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May 29, 2018, 12:25:31 AM
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Their articles sound just like all the other ones--metals are soon going to go up, because [insert fearmongering reason here].  And then gold & silver just keep going sideways for years on end.  Gold demand is always increasing in their eyes.  Same with silver.  And while that might be true, the market sure isn't reflecting it and I trust the market more so than a whacko website like Zerohedge.

There is $10 to $90 worth of Gold is each computer/laptop. A solar panel has 20 grams Silver and  Solar farms are HUGE business worldwide.
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June 01, 2018, 10:38:13 PM
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Their articles sound just like all the other ones--metals are soon going to go up, because [insert fearmongering reason here].  And then gold & silver just keep going sideways for years on end.  Gold demand is always increasing in their eyes.  Same with silver.  And while that might be true, the market sure isn't reflecting it and I trust the market more so than a whacko website like Zerohedge.

There is $10 to $90 worth of Gold is each computer/laptop. A solar panel has 20 grams Silver and  Solar farms are HUGE business worldwide.

I remember to read some earlier post of Pharmacist  in which I felt some disdain against the investment on metals/precious metals.

Gold is not getting used in laptop and computers only but also in smartphones and TVs . The gold used in these devices is not recoverable and it make around 10%  of the total demand of gold. There is still too much scope in the expansion of the  smartphone industry so this demand will go up and remember this  amount of gold is lost (deflation). There are other industry uses of gold (like medicine, aerospace etc.) but they do not make a significant portion.

But main point is that  50% gold is used in jewelry  making and I found something that will make your mind that gold is not a very good investment.

"A hundred years ago, gold sold for just $20 per ounce. In recent years gold has traded between $1,200 and $1,900 per ounce. That’s a huge move up in nominal terms over the past century. Yet in real terms gold prices today aren’t much different from what they were when they were last quoted at $20 an ounce.

It’s not that gold has become so much more expensive. It’s that the currency in which gold prices are quoted has depreciated so much. (The U.S. dollar has lost nearly 97% of its value since the Federal Reserve was created in 1913.) "


Source: https://www.moneymetals.com/precious-metals-charts/gold-price
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July 02, 2018, 12:38:05 PM
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Their articles sound just like all the other ones--metals are soon going to go up, because [insert fearmongering reason here].  And then gold & silver just keep going sideways for years on end.  Gold demand is always increasing in their eyes.  Same with silver.  And while that might be true, the market sure isn't reflecting it and I trust the market more so than a whacko website like Zerohedge.

There is $10 to $90 worth of Gold is each computer/laptop. A solar panel has 20 grams Silver and  Solar farms are HUGE business worldwide.

I remember to read some earlier post of Pharmacist  in which I felt some disdain against the investment on metals/precious metals.

Gold is not getting used in laptop and computers only but also in smartphones and TVs . The gold used in these devices is not recoverable and it make around 10%  of the total demand of gold. There is still too much scope in the expansion of the  smartphone industry so this demand will go up and remember this  amount of gold is lost (deflation). There are other industry uses of gold (like medicine, aerospace etc.) but they do not make a significant portion.

But main point is that  50% gold is used in jewelry  making and I found something that will make your mind that gold is not a very good investment.

"A hundred years ago, gold sold for just $20 per ounce. In recent years gold has traded between $1,200 and $1,900 per ounce. That’s a huge move up in nominal terms over the past century. Yet in real terms gold prices today aren’t much different from what they were when they were last quoted at $20 an ounce.

It’s not that gold has become so much more expensive. It’s that the currency in which gold prices are quoted has depreciated so much. (The U.S. dollar has lost nearly 97% of its value since the Federal Reserve was created in 1913.) "



Source: https://www.moneymetals.com/precious-metals-charts/gold-price

Precisely, gold is a poor investment for wealth accumulation, but it's a very good store of wealth over very long periods of time (at least decades). Shorter than that, gold can be fairly volatile and the risk of loss is higher. People advocating for gold investment to "make money" don't know what they're talking about. They think a rise in gold prices over 50 years means they made money and not that inflation has pushed the price of everything equally, including gold, so that they really have no more wealth than when they started.
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July 02, 2018, 01:00:47 PM
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Gold is not getting used in laptop and computers only but also in smartphones and TVs . The gold used in these devices is not recoverable and it make around 10%  of the total demand of gold. There is still too much scope in the expansion of the  smartphone industry so this demand will go up and remember this  amount of gold is lost (deflation). There are other industry uses of gold (like medicine, aerospace etc.) but they do not make a significant portion.

There is 16 Kilos silver in a cruise missile. All the silver is lost when the missile is fired.
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July 02, 2018, 01:22:36 PM
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I thought that the country with the biggest gold reserve in the world is USA.
Favorising gold transactions over US dollar transactions won`t hit the US economy nore the  value of US dollar.All the gold supporting countries want to avoid the future inflation, caused by the federal reserve money printing machine.That`s why they want to stop using USD for major transactions.
It seems to me that the value of gold is very exaggerated. In the future, perhaps some space probe will find a planet or an asteroid of gold, and then what? There is a planet made of diamonds why can't there be a planet made of gold? It's impossible to predict. Cryptocurrency mining is controlled and it seems to me that such an asset is more suitable for the reserve currency.

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