Silver could instantly spike to $184 an ounce when this impending event moves gold.

Summary

In this video, Clive Thompson discusses the potential for silver to reach $184 per ounce due to a gold revaluation by the U.S. Treasury. He explains the massive U.S. debt problem, the role of the Treasury Secretary, and the steps that could lead to a significant revaluation of gold prices. By analyzing the Treasury's gold holdings, Clive predicts that gold could be revalued to around $15,000 per ounce, creating trillions in newly minted cash for the government. This move would likely boost the price of silver and other precious metals, providing economic stimulus without causing major inflation.

Takeaways

• 😀 The U.S. faces a massive debt issue, with a significant amount coming due in the next few years, requiring higher interest rates.
• 😀 The U.S. Treasury is considering revaluing gold as a solution to this debt crisis, which could have significant economic implications.
• 😀 Scott Bessant, the current Secretary of the Treasury, is said to be focusing on monetizing U.S. gold reserves as part of this strategy.
• 😀 The U.S. holds 261.5 million ounces of gold, valued at just $422 per ounce, a price set in 1972. This gold is significantly undervalued in today's market.
• 😀 There is speculation about the future price of gold, with figures ranging from $3,300 to $150,000 an ounce, with a popular estimate of $15,000 an ounce.
• 😀 A revaluation of gold to $15,000 per ounce could generate $3.9 trillion for the U.S. Treasury, enough to eliminate the current budget deficit and reduce government debt.
• 😀 The process of revaluing gold involves redeeming gold certificates, issuing an executive order to raise the price of gold, and selling newly valued gold to the Federal Reserve.
• 😀 The Treasury could then buy back the gold from the Federal Reserve, using the newly generated funds to reduce the national debt and avoid borrowing more money.
• 😀 If gold is revalued to $15,000 per ounce, it could have a substantial impact on the price of silver, potentially driving the price of silver to $184.50 per ounce.
• 😀 This scenario is unlikely to cause a currency collapse or massive inflation, as the revaluation of gold does not directly affect the pricing of goods and services, which are based on the dollar.

Q & A

What is the catalyst that could trigger a sharp increase in the price of silver?

The catalyst is the U.S. government's massive debt, which will require rolling over at much higher interest rates in the next few years. This situation could lead to a revaluation of gold, which would subsequently impact silver and other precious metals.

Why is the position of Secretary of the Treasury so important in the United States?

The Secretary of the Treasury is the most crucial position regarding managing U.S. finances, overseeing trillions of dollars, and making decisions on monetary and fiscal policy. It's considered far more significant than the role of the Federal Reserve Chair, Jerome Powell.

What asset on the U.S. Treasury's balance sheet is most likely to be used in the revaluation process?

The asset is 261.5 million ounces of gold, currently valued by the Treasury at the statutory price of $42.22 per ounce, set in 1972. This gold is expected to be revalued to generate revenue for the government.

How would the revaluation of gold to $15,000 per ounce benefit the U.S. Treasury?

Revaluing gold to $15,000 an ounce could generate $3.9 trillion for the Treasury, which would be enough to pay off the current year's budget deficit, create a surplus, and help repay maturing debt.

How does the gold certificate process play a role in the revaluation of gold?

The U.S. Treasury holds gold certificates, which are IOUs from the Federal Reserve. The Treasury could redeem these certificates, revalue gold, and exchange it with the Federal Reserve to generate new cash. This process allows the Treasury to acquire significant funds without having to sell physical gold.

What is the role of the Federal Reserve in this process, and how does it benefit?

The Federal Reserve plays a pivotal role by holding gold certificates on its balance sheet. The Treasury can redeem these certificates at face value, and through revaluation, the Federal Reserve essentially facilitates the creation of cash, benefiting both entities in terms of financial liquidity.

Why does the Treasury sell and repurchase gold from the Federal Reserve?

The Treasury sells newly valued gold to the Federal Reserve to generate newly printed electronic cash. Later, the Treasury buys the same gold back to ensure it retains control over the gold while eliminating the national debt in the process.

What impact would the revaluation of gold have on the price of silver and other precious metals?

The price of silver is likely to rise as a result of the gold revaluation. Silver is a smaller market compared to gold, and as people reinvest their profits from gold into silver, the price of silver could see a significant increase, possibly reaching $184.50 per ounce.

What assumptions are made when predicting the price of silver after the gold revaluation?

The assumptions include that 3% of gold holders sell their gold to the Treasury, half of the generated money is reinvested in silver, and only 10% of silver holders are willing to sell their silver. These assumptions lead to an estimated silver price of $184.50 per ounce.

Will the revaluation of gold cause inflation or a currency collapse?

It is unlikely that the revaluation of gold will cause inflation or a currency collapse. While it will generate substantial cash, it will not significantly impact retail prices since goods and services are priced in dollars, not gold. The increase in cash supply will mainly reduce the government's debt and provide economic stimulus.