What happens if the world monetary system returns to the gold standard? According to John Butler, author of The Golden Revolution, Revisited, a gold price of $50,000 is likely in this case.
“The price of $50,000 is reasonable if it has a gold standard!”
John Butler, TallyMoney Treasury Chairman and author of The Golden Revolution, Revisited, says that gold will skyrocket to $50,000 as the world transitions to a gold standard monetary system. In this context, Butler makes the following statement:
Today, the gold price is too low to allow the markets to clear. Because assets are overvalued compared to gold. By my calculations, a price of around $50,000 is reasonable if you go back to a gold-backed international monetary system.
“Gold unbalances the theoretical monetary game”
John Butler talks about the US losing its economic dominance and the world becoming multipolar. That’s why he argues that the transition to the gold standard is inevitable. Butler explains his views as follows:
Gold unbalances the theoretical monetary game for a multipolar world that is still heavily dependent on international trade. At the end of World War II, the US economy was roughly half of the entire global economy. Based on current activity, only 20%. If this trend continues, it will eventually tip the balance, whether or not the US maintains its military superiority.
Fed policy and yellow metal
cryptocoin.com As you follow, on August 26, Fed Chairman Jerome Powell gave a hawkish speech at the Jackson Hole Symposium. Thus, he stated that “pain” is needed to bring inflation down to 2%. Meanwhile, the latest data shows that US inflation was 8.5% in July.
Opinions are divided on whether the Fed will return in a tightening cycle. John Butler says Powell will reverse the rate hikes and that could benefit gold. Butler comments:
The Fed’s ‘hawk moment’ is happening right now. When he’s gone and markets are significantly reassessing that central banks are far weaker than they thought about inflation, I think gold will recover all its losses this year and indeed hit new highs.
According to Butler, Powell’s hawkish Jackson Hole speech is simply an exercise in restoring credibility. Butler says the US economy will not be able to sustain strongly if interest rates continue to rise. He adds that this “will cause the Fed to blink sooner than most people think.”
BRICS: A new reserve currency?
There are allegations that BRICS countries are developing a new reserve currency based on a basket of BRIC currencies to rival the US dollar. Butler says the claim for a new reserve currency has been a topic of rhetorical conversation for too long. However, he notes that despite this, escalating geopolitical tensions around the world could mean further progress towards the BRICS goal. Based on this, Butler makes the following statement.
It would be historic if the BRICS somehow decided to find a way to trade bilaterally and use each other’s currencies as reserves, or create a basket of their own currencies and use it as a reserve.
Also, Butler wrote in his book that BRICS countries will likely choose a ‘gold-backed currency’. Because, he says, it’s an objective reference currency that everyone will trust and accept. For this, he makes the following assessment:
The truth is, no one can mint gold and no one can create gold. It’s good to know that Mother Nature determines how much gold is available. Gold reduces the possible bad things about monetary manipulation. It also facilitates all the good things about international trade.
