Ex-Fed Governor: Gold Will Be The Single Best Investment To Own

Former Federal Reserve Governor, John Exter, once quipped, "The U.S. and world economies are on the threshold of a deflationary crash that will make the 1930s look like a boom. Gold will be the single best investment to own. Buy it now while it's still cheap."

You know what they say about broken clocks?

While perhaps only briefly, broken clocks are still accurate, twice a day.

So surprise not surprised after last week's SD Bullion Market Update that I stumbled upon another insolvency study regarding US Banks at the moment. According to this one, the situation is twice as bad as others recently pointed out.

So instead of 1 in 4, perhaps the real number is closer to 1 in 2 US Banks face potential bankruptcy bank runs.

Well, the Lord only knows, because once you start making up phony accounting rules post 2008 GFC, and claiming bags of trash are worth millions of fiat Fed Notes marked to model, well near anything can be hidden on bank balance sheets as if it were somehow valuable.

But when redemptions come bank running and the tide of liquidity fully pulls out, we then find out who was swimming naked.

When former Federal Reserve Governor, John Exter, made this inverse pyramid in the late 1960s, he did so to point out what a spillover event then would look like cascading down from some of the then worst most questionable asset classes to the base that goes nowhere and from time to time reminds people precisely why it remains the foundation of all of finance.

He starts the inverse pyramid by stating, "Anyone or anything that can't repay debt -- all insolvent thrifts (ah that is old vernacular for all insolvent banks and according to some US bank experts that's currently potentially about half of them.

I'm not even gonna bother with the silly opaque derivatives markets and fiat financialization orgy that followed from the 1980s until today in 2023. So many bubbles are going to find out what their real value is most certainly not what some have claimed on paper.

What I am going to remind you of is the hard truth, that Gold is the bedrock.

And to begin this week we were reminded of that brutal fact by the Dutch central bank itself as it published the following confidence inspiring hype video showing the work involved in moving 31% of her Official Gold Bullion reserves held within her nation's borders.

Stop me if you have ever seen a hype video made by central bankers about confidence inspiring counterparty risk debt laden assets on their books. Oh that's right, they've never done that.

And in short order the Dutch central banks will tell us to our face partly why.

"Gold is the ultimate anchor of trust. If the entire financial system collapses, you still have the gold and the gold retains its value."

At the end of the following clip the Dutch central banker will tell us frankly and partly why Official Gold Bullion matters.

But at the start of this clip we will hear with another Gold Illiterate reporter under estimate the current fiat Euro value of a central bank 400 oz gold bullion bar. He will miss it by almost half as they are currently valued around 730,000 fiat euros per 400 oz gold bullion bar. Proceed Gold illiterate reporter and gruff speaking Dutch central banker.

So there you have it, central bankers of the past and present stating the gruff case for having Official Gold Bullion. It is the ultimate system of confidence reboot monetary asset, nothing else has ever come close in crisis.

Interestingly, of the 200 metric tonnes, or 14,166 four-hundred ounce gold bars moved by armed guards, that is only 31% of the Dutch official gold reserves. Another 31% of their official gold bullion sits with the NY Federal Reserve, good luck ever getting that back. And the remaining 38% sits with no gold owning Canada and within the boils of the seemingly lawless City of London. 

All three locations are highly stupid places to keep your sovereign bedrock gold bullion assets.

Professor Richard Werner throws even more shade at the situation by stating the Dutch gold now sits on a NATO site and that the Netherlands are basically a US vassal state.

Well, we'll see when the stuff starts hitting the structural reset fan what comes of old alliances and offshore gold storage programs.

For now, with spot price dips in gold commercial banks, UBS has three takes why now is a good time to get going long gold.

The gold and silver market selloff has begun, the question is how far will it dip.

The spot silver price closed the week down at $23.79 bid just over $24 oz ask.

The spot gold price fell below its key $2000 support threshold and closed at $1978 oz bid.

The spot gold silver ratio fell a slight bit to near 83.

I can see by internal data that SD Bullion customers are increasingly and intelligently buying this spot price dip.

The question for me is how far will silver dip as I am going to sell some Silver Eagle coins and arbitrage into lower premium format silver while also going long platinum.

A technical analyst I respect thinks it is likely we might see spot silver dip toward $21 oz and I am only gambling with a small fraction of my bullion portfolio, and given the winds, I am willing to run that risk in thinking we have further to go.

On the Platinum bullion side of things, it's becoming a no-brainer to get long platinum bullion near $1000 fiat fed notes for the long haul. 

Deficits of 1 million oz in a space alien precious metal market of only like 8 million ounces means in time its value will rise.

Of course, the question of what terrible recessionary storm blows our way is the most important thing to consider at the moment.

I am convinced we are at the threshold of GFC part two. So cash in proper bank accounts will likely be handy to buy spot price dips, and so I will try and remain patient.

Billionaire stonk hodlr's apparently are not being patient and have been selling stocks in large volumes.

The Oracle of Omaha tends to nail these things ahead of time. I wonder which failing zombie bank he'll sweetheart deal into this time around.

We also have the played out debt ceiling political clown show to deal with. Hopefully by next month that rerun goes away without default. After-all, you can just type into a keyboard what amounts of still dominate global reserve fiat currency you need, for now.

For those of you who have been on this SD Bullion channel for a while you know, I like data and charts. 

Executed correctly, they foretell our future in varying ways.

This 25% red line threshold break of smoothed 6 month annualized jobless claims, it has never failed in throughout this full fiat currency era.

Who out there is naive and or delusional enough not to see the storms that are bearing down on us?

The data is damning, wake up and take action.

That is all for this week.

As always to you out there, take great care of yourselves and those you love.

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James Anderson
James Anderson
Senior Market Analyst & Content

A bullion buyer years before the 2008 Global Financial Crisis, James Anderson is a grounded precious metals researcher, content creator, and physical investment grade bullion professional. He has authored several Gold & Silver Guides and has been featured on the History Channel, Zero Hedge, Gold-Eagle, Silver Seek, Value Walk and many more. You can pick up Jame's most recent, comprehensive 200+ Page book here at SD Bullion.

Given that repressed commodity values are now near 100-year low level valuations versus large US stocks, James remains convinced investors and savers should buy and maintain a prudent physical bullion position now, before more unfunded promises debase away in the coming decades...