Many BRICS Citizens Are Already on Their Own Gold Standard

More official denials of a rumored BRICS trade settlement currency agreement were published this week. Reuters had this headline, which seems a misdirection, but see what you think. 

The article is entitled, "BRICS currency not on August summit agenda, South African official says." 

Nowhere in this article is there a mention that the BRICS with perhaps ongoing help from the Bank for International Settlements, is likely headed into a new world trade settlement order, where bilateral balance of trade between nations can and will likely occur increasingly in time without fiat US dollars as intermediary. 

Instead using their respective currencies to settle, be it through oncoming m-CBDC systems or other trade settlement agreements BRICS and BRICS associated may implement in the future.

China Daily again reported this week's news that the Indian Foreign Minister also stated there is no idea for a BRICS currency in the pipeline. Ignoring that the fact that is not what many are suggesting is in the potential BRICS sovereign trade settlement works.

The monetary precious metals spot price markets in fiat US dollar terms traded in mixed but still somewhat bullish fashion this week.

The spot silver price rallied through the week only to get capped Wednesday going into Thursday, finishing this week just below $25 oz in fiat US dollars.

The spot gold price closed slightly up above the $1960 oz bid, as it too sold off yesterday following a near $2,000 oz reaching rally late Wednesday into Thursday overnight.

The spot gold silver ratio finished just below 80 for the week.

Lots of bullion related headlines and data this week confirming a few things we knew, and a few other details we did not.

City of London based Consultancy Metals Focus admitted this week that North American silver bullion buying is still at a torrid pace akin to last year's record silver bullion investment demand. Bank failures in March 2023 the main reason for the strong silver demand start to 2023 in the United Stated specifically.

On the western European front, a change in silver coin sales tax treatment in Germany this year has helped to squash overall silver bullion demand and selling volumes. Basically any silver bullion bought in the European Union gets slapped with an additional +19% Value Added Tax and that is on top of any mint and bullion dealer premiums charged. The EU tends to trade much more heavily in gold bullion given many gold bullion products are VAT free.

Western ETF sponsors made headlines this week citing a recent pool they ran stating that Millennials are their largest gold allocating generation. 

No mention of how unsecured retail investors don't actually own any bullion or how JP Morgan is now majority in charge of looking after the world's largest supposed unsecured gold and silver ETF hoards. If you are counting on unsecured ETF gold proxies as your portfolio's safe haven, you might want to actually go read the prospectus to learn the myriad risks you pay to own.

A few months ago back in late May, China Daily reported that Generation Z is also getting bullish gold and buying more high grade jewelry and bullion bars for varying reasons.

The played out notion that young people don't buy bullion is just that, not true and a general nonsense narrative.

Onwards to the finishing topic of this week's SD Bullion Market Update.

While strategists line up their technical charts to increasingly try and make the major secular fiat US dollar bear calls of all time, it's important to remember how the majority of the world and some of the oldest civilizations handle inevitable fiat currency failures.

This past week I spent a few days in Istanbul, Turkey and I gave you my word I'd report my findings regarding their retail gold market.

A country that had its fiat Turkish lira almost at parity with the fiat US dollar in August of 2008, now near 27 to 1 in a hockey stick of local price inflation and fiat lira currency debasement over the last few years.

Maybe I should have told the kind elderly waiter at my hotel's pool, the one who lost his local Grand Bazaar business following the 2008 financial crisis. That he should not worry, because the IIF says a few years after this massive fiat lira currency debasement it will be good for the local economy net on net.

Sarcasm to the N'th degree here of course.

It is not a coincidence that in one of the world's oldest shopping malls, there are hundreds of gold shops like this one with investment grade bangles dangling in the windows. Gold kilos to one gram bullion bars are common as well, cash there seems king as fiat currency exchange portals are a dime a dozen block to block, fiat currency changers are making a mint.

Turks with means, often buy and stack physical precious metals, customarily physical gold to protect their long haul savings. This is often painfully handed down knowledge westerners will have to learn or relearn sadly in some of the hardest ways to come.

But as we covered here, North American bullion buyers are not slowing down. They sit at the epicenter of the upcoming all time fiat folly and they will only increase in their bullion buying volumes as time moves on. 

The young will inherit most of it no matter what.

That will be all for this week's SD Bullion Market Update.

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...