Dan Popescu: In a Crisis You Need Gold
Tom welcomes Dan Popescu to the show. Dan is a consultant and independent investment analyst of the gold and silver markets.
Dan discusses the events leading up to the gold standards failure and why that collapse had its origins shortly after World War II. The London Gold Pool was created to maintain the price of the metal. This scheme failed after private banks in Zurich along with South Africa attacked the gold peg. As a result, from 1968 to 1971, there was a flood of central banks asking for their gold.
Today, central banks are buying gold and selling dollars. Some major corporations are also beginning to see the appeal of gold.
Dan explains the difficulty with assessing the quantities of central bank gold holdings since the market is quite opaque. Most investors don’t grasp the size of the gold market and its history. Moreover, many countries don’t disclose their actual gold holdings.
A return to the gold standard today would prevent inflation from taking away people’s purchasing power. This would benefit the world since prices would be more easily compared and become far more consistent.
He questions the idea of cryptocurrencies because we’ve already done the same thing with paper currencies by turning them into digital equivalents. Money has already been digital since the late 1960s. Technology doesn’t change the fundamental characteristics of sound money. The concept of bitcoin is interesting, particularly the notion of blockchain and cryptically packaging information. However, much of crypto today has become very casino like and much of it now depends on stable coins. As a result, Bitcoin has become marginalized, and much of the sector has become a Ponzi scheme. Crypto will survive, but it will end up being controlled and dominated by the state.
Countries without gold will be at a significant disadvantage in a return to the gold standard. He who has the gold will make the rules, which is why China, Russia, India, and Europe are buying. Today, the EU has more gold than the United States. Most likely, India has even more gold, albeit in private hands. Canada has a lot of gold in the ground but may not do much good unless it can be mined quickly.
He believes gold will reach for to six thousand before the monetary reset occurs. “Put some money into gold and pray to god that you never need it. In a crisis gold and silver are the most universal marketable item.”
Time Stamp References:
0:00 – Introduction
0:32 – Gold Standard History
8:24 – Gold Reserve Data
11:59 – Silver Uses & Crisis
14:49 – Benefits of a Gold Std.
21:30 – Cryptocurrencies
33:44 – Gold & Reset Risks
37:24 – Recent Debt Bubble
44:50 – Indicators & Inflation
56:52 – Mining Stocks Thoughts
59:22 – Wrap Up
Talking Points From This Episode
- The history of the gold standard and its inevitable return.
- Difficulty in assessing the gold markets and central bank gold holdings.
- Risks around digital currencies and why governments will dominate the space.
Dan Popescu is an independent investment analyst and studies the gold and silver market and gold’s future role in the international monetary system. He has followed, studied, traded regularly since 1970 the gold, silver, and foreign exchange markets. He has a bachelor’s degree in physics (1993) from Concordia University in Montreal, Canada, and has completed the Canadian investment management certificate (1999) of the CSI.