This sort of suggests that it might go the other direction. Usually when everybody gets on one side of the boat, boat capsizes. Yeah, exactly. [Music] Welcome back to the Gold Silver Show. I'm Mike Maloney and I've got got Alan Hibbert here with me and Allan has a a presentation he's going to hit me with. So Allan, how are you doing? I'm great, thanks Mike. Yeah, today I want to talk about the dollar and uh if it's doomed or not, right? Can anyone save it? So, uh I saw a comment recently on one of


our videos from one of our one of our viewers that said, "Outside the USA, the dollar is dying. The USA is one of the most hated nations and countries are moving away from the USD at an alarming rate." So, yeah, first of all, is that is that your uh observation as well, Mike? Well, it's really there's a mixture going on. uh this is happening but it's not actually dying uh because so many countries have so much dollar denominated debt like George Gam is fond of saying uh the dollar has all of the


apps and US bonds are used for much more than just investing in as savings they are the plumbing in the banking system there you know all of these banks if you know the euro dollar is big there's a lot dollars created outside the United States that uh we can't measure uh you know by generating charts on the Federal Reserve. They hid the Euro dollar from us quite a while ago when they um hid the old version of M3. They've replaced it by a new version of M3 which is actually just M2. And so um uh you can't like uh paste


those charts together and and get a real historic picture of the total number of dollars out there which is impossible to calculate but uh the point is even foreign banks need uh US treasuries and so you know I've been predicting the death of the global dollar standard and it is coming. I started doing it in 2009 and you can see these nails in the coffin but it's a process. It's going to take a while. Uh and yes, uh we keep on doing things. I mean I wonder over the past month uh how many more um people we


turned into enemies of the United States that they now hate us. Uh you know it's um we keep on going around the world. We're the we have become the world's bully and uh bullies typically aren't liked and it's too bad. Uh I remember uh during you know President Kennedy's uh regime how wonderful the we had come out of the World War II a lot of the world they they loved Americans. We sort of saved everybody and we're doing just the exact opposite these days. It's I think


it's disgusting and too bad. It's really a shame. But um so it's a mixed bag. I agree with it, but I don't agree with it. It's gonna it's going to take a while. So Okay. Yes. Fair enough. Well, we do see some long-term trends of a lot of countries ddollarizing. Um but to your point, they are sort of beholden to um requiring some dollars because of the legacy system, right? So, so there there's one uh article here on zero hedge, gold versus the dollar, the death of fiat in one chart. And by the way,


that one chart is not this chart. It's the chart I'm going to show next. Um, but here's what they said here is uh earlier today we we reported that the latest BFA, Bank of America fund manager survey confirmed what most people already knew, that the shoe shine boy, the kitchen sink, and the basement dwelling day trader. Not to mention everyone on Wall Street were short the dollar. So, everyone's short the dollar. In fact, according to the fund manager survey respondents, professional traders


were effectively shorting the dollar in record amounts. And that's what this chart is here. This is the uh net percentage of investors overweight or shorting the US dollar. And you can see here that they're shorting it almost as much as they were shorting it 20 years ago. Uh so, yeah, not a good look for the dollar. Yeah. Well, this sort of surprises me. I wonder, you know, 20 years ago, the everything was like at its peak. January of05, that's, you know, that was party time. That was when


the real estate bubble was uh really uh gaining some steam and and the uh stock market was getting overvalued once again. Um so um what this if everybody is short the dollar then this sort of suggests that it might go the other direction. Usually when everybody gets on one side of the boat boat cap sizes. Yeah. Exactly. Yeah. That could be. One thing I'm noticing here is is how gradual this increase is from net short to net long um over about 10 years. And then I was just sort of noticing how


quickly it went from net long to net short. It's like almost a vertical line. Like this position flipped around very quickly. Uh so yeah, just just interesting. I'm not not quite sure what to make of it. I don't want to over interpret one single chart, but it's just interesting. Yeah. Uh so there's one other chart. The the actual one chart that they that they were talking about here in the article is this. The main beneficiary of DDRization is gold. And so what we have here is the share in global reserves of


the dollar in gray going down over time and gold in red going up over time. You can see that back from 2017 the trend is pretty obvious. Yeah, I do want to point out to everybody that, you know, they should go to ggsr21.com. Uh, it's the website for the book and read chapter three. So that the first thing you look at when you look at a chart like this, you know, you see it going the dollar going from like almost 60 goes 58 and then on this side it goes down to eight. Well, no, it doesn't. You


got to know how to read charts. It's going from 58 to 44 basic. Uh and so there's something a little bit exaggerated about this where uh gold's share has gone up from 11 uh to 23.5. So um you have to now a lot of gold's share has been uh central bank purchases but it is also just the change in the price because they're not measuring this in like ounces they're measuring it in dollar units. So what percentage of of So for gold to have gone from 11% to 23% is actually pretty impressive and that


is since 2017. So um uh I think I think this is great but then again I'm invested in gold. So yeah, well more so in silver but yeah. Right. So yeah, one thing I noticed it's exactly what you said Mike is how the the scales go. So from about 58 to about you know 44 or something like that and uh if you take the the linear change here over the course of eight years if it drops let's say 12% 58 to 46 uh 44 okay 14 um 12 is going to make the math easier but it's even more significant.


So if that's if that's uh 12% in 8 years and it's actually faster than that that's 1 and a.5% per year. So in order to go to zero from let's say 45 even though it's already lower than that it would only take 30 years. 30 years if this continues at a linear pace that's long generation. Yeah. Uh I would urge people to go back and watch the video that I did about the three phases of a bull market and that we have probably entered the final phase as gold soarses uh and it should be putting in its um most of


its gains in a very short period of time. So this the the dollar portion can sort of fall off a cliff because gold skyrockets. uh you know it's it's it's a the the portion of what is left as far as bank reserves and then countries are uh trying to abandon uh the dollar as far as their currency reserves. they are worried about um the the dollar being a weapon and so um yeah that's one of the reasons for the steepening that you see once it uh crosses the um the 50 level that black line yeah it crosses that and


then it's it there's it's much steeper there yeah and so that steepness may continue so you said 30 years to go to zero 30 years if it's like linear. Yeah. One and a half% per year. 30 years. So that's that's pretty soon. That's like if you're 30 years old right now and you're having a child, by the time your child is your age, like no one has dollars anymore outside the US. That's right. Insane to think about. Yeah. So, wow. Okay. Yeah. So, there's really a


question here. Is the dollar doomed? Right. Like, can anyone save it? And I have the Treasury Secretary here, Scott Bessant, because it's sort of his job. He's really a dollar salesman uh or you know a future dollar salesman. He's trying to sell US treasuries to people all over the world. He wants them to buy those treasuries and then they have dollars essentially. So it's kind of his job to save the dollar and uh something he said recently on Twitter or X he said crypto is not a


threat to the dollar. In fact stable coins can reinforce dollar supremacy. So he sort of he was asked a question in this interview um you know is the dollar doomed and uh is crypto going to be responsible for the death of the dollar and he took the opposite viewpoint. He said crypto can actually help the dollar. So then he says digital assets are one of the most important phenomena in the world right now yet they have been ignored by national governments for far too long. This administration is


committed to establishing the United States as a hub for digital asset innovation and the Genius Act moves us one step closer to that goal. Okay. So he thinks the dollar can be saved by the Genius Act and demand for treasuries uh you know by crypto. So by by these stable coins uh so they're supposed to be backed by treasuries. So what are they stable against? US dollar. That doesn't mean they're stable. Where's the dollar going? I mean all you have to do is look at the price of gold. Flip that chart upside


down and you've basically got uh the dollar as measured by gold and uh the dollar is uh always loses value and so it's not stable. You shouldn't call them stable coins if they're stable to the dollar anyway. It's like two guys are skydiving without a parachute, right? And and they're they're changing their body position so one falls faster or slower and then they're worried that they're somehow volatile relative to each other. It's like, "No, we want to


fall at the same rate, you know, do this and slow down." You It's like you're stable relative to nothing. Like the regardless, there is a moment of impact out there in the future. Exactly. Exactly. It's ugly. It's ugly. Uh so something I want to point out about this tweet is that he's jumping around in his language. He's saying crypto, stable coins, digital assets, and these are not the same things even though many people use these words interchangeably, right? Digital assets is a pretty broad


category. Um, part of which includes cryptocurrencies, but there are other digital assets like digital art and you know, NFTTS, other tokens within cryptocurrencies are stable coins and there's also other things, you know, that that are not stable coins that are still cryptocurrencies. So anyways, what is he really saying here? He's saying crypto is not a threat to the dollar. I mean, I would kind of argue that it is, but the dollar is a threat to itself, right? All the people in charge of the


dollar and treasuries and US foreign policy, they're all a threat to the dollar. They're they're not handling it very well. Um, stable coins can reinforce dollar maybe a tiny bit. Maybe a tiny bit. Because if you force stable coin companies to buy US treasuries, okay, you've forced people, you know, under threat of violence essentially to buy your your shitcoin as it were, you know, your your dollar or your uh dollar-based treasury. Um so anyways, uh any anything you want to say on this distinction


here, Mike, before we go on to um his next tweet? Uh well, it just because he's jumping back and forth like this and so many people do, it just suggests that he doesn't know quite as much about it as uh he's claiming. Um and uh yes, it it is right. And like I said, uh stable compared to what the dollar is not stable. Um and we know that it always goes one direction. it bounces up and down against other falling currencies. Um but so yeah, let's let's just move on to the next one. Okay. Um


one thing I want to clarify here is what the Genius Act is for anyone who isn't sure. It stands for guiding and establishing national innovation for US stable coins. So uh it's basically it basically forces stable coin issuers to back their stable coins with quote unquote safe assets. I love this, right? because what's safe? Uh at a 1:1 ratio, limiting reserves to coins and currency, government money market funds, and other highly liquid assets. So essentially, if you're going to have a stable coin, you


know, if it's back to the dollar, you're going to have to have US treasuries or, you know, quote unquote highquality collateral in order to back it. So that's where the demand for treasuries is coming from. I think they're trying to regulate this. Wasn't there was a stable coin that blew up a few years ago. Yeah. Uh, and they I can't remember what the system was, but they've got uh the stable coin and then some offsetting uh coin and some something just got out of whack and the whole thing imploded


and and several billion dollars vanished instantly. Yep. And in this case, it it literally did vanish. It didn't uh you know, it wasn't a wealth transfer. It was just opening up the drain in the bottom of the bathtub. It was all gone. Poof. Exactly. So, Secretary Bessant also said, um, recent reporting projects that stable coins could grow into a $3.7 trillion market by the end of the decade. That scenario becomes more likely with the passage of the Genius Act. A and here and here's what he says.


It at first glance it sounds good and he's not necessarily wrong. It's just incomplete. Let's see what he says. A thriving stable coin ecosystem will drive demand from the private sector for US treasuries which back stable coins. Okay. True. This newfound demand could lower could lower government borrowing costs. Okay. And help rein in the national debt. Right. Okay. So, I got to stop you right there. Suspicious. How how is it going to re in the national debt? Yeah. If it lowers interest rates,


uh we're going to be paying less interest. except if it saves anything. A politician will figure out how to spend whatever it saves faster than it can save anything. So, no, it's not going to rain in the national debt. Uh the only way to do that is get rid of all the politicians. I don't know. Yeah. Yeah. Constrain their spending somehow. Um Yeah. It it also could on-ramp millions of new users across the globe to the dollar to the dollar-based digital asset economy. Okay, true. It could it could do that as


well. It's a win-winwin for everyone involved. The private sector, the treasury, and consumers. These are the fruits of smart pro- innovation legislation. Okay. I mean, like, yeah, it could. It could. It could. It could. It could. It could. But will it? I doubt it because of what you just said, Mike, is like if if politicians, you know, save in one area, they'll spend it and they'll spend double somewhere else. Yeah. So, so I I highly doubt it'll work. Also, he he omitted here the


stable coin companies themselves, right? It's not a win for the stable coin companies. If they wanted to buy treasuries, they would buy treasuries. The reason they don't have that many treasuries right now is because they don't want them. They don't want too many of them. Um, so they're forced to do something they don't want to do, it's kind of a loss for them. Um, but even if you take all of his, you know, all of his scenario as convincing and true and possible, um, which it might be, is the


demand going to be sufficient to save the dollar? I don't think so. I I don't think it's even close. And actually, someone did the calculation and presented it at a keynote speech in uh in Las Vegas at the Bitcoin conference. I was there for that. So this is Safedine Amos, author of the Bitcoin standard and the fiat standard and he in his keynote he painted a picture of the rosiest of assumptions that would be most beneficial to a scenario like this. You know, rescuing the dollar, um


shrinking the deficit, paying down the debt. And I'm not going to go into all of the numbers and assumptions. You can watch his his 13minute keynote if you like. Uh but his conclusion was basically this. In the next 10 years, in the next 10 years, by 2035, USDT, Tether, a stable coin, would reduce the US debt by at most $3.7 trillion or 5.4%. Which, whoops, which is basically nothing, barely a drop in the bucket. So, even in the rosiest of all scenarios, this has practically no effect on the massive uh debt and


deficit problem that the US government has. Yeah. Uh well agreed and uh I'm just noticing uh by 2030 five years from now uh the savings are not all look they're both 50 trillion something. It's not that much savings. It all seems to happen in just the uh last few years on that chart. Um very interesting. Yeah. So it's not going to make that much of a difference. I he's making the claim it's going to drive demand which will lower interest rates but um basically the politicians are


going to figure out how to get us deeper in debt regardless of what happens. Yeah, I think so too. Yeah. And and so if this isn't a solution, what do you do? I mean the dollar is uh you know its days are numbered. Uh what do you do? Well uh central banks they are planning to boost their gold reserves and trim dollar holdings. It's a simple strategy and you don't have to be a central bank to do it. I mean, you could eliminate the dollars in your possession and convert them into gold and voila, you're


as smart as a central bank. So, uh, geopolitical risks and worries about the status of the greenback likely to drive further demand for bullion according to a survey of central bankers. So, yeah, pretty simple. And there's one chart from this article I wanted to present. Central banks are plowing record amounts into gold. Uh and we we see here this this bar is basically a purchase when the bar is above zero and it's a sale when it's below. This is on net for each year and you can see a lot of purchases


lately record high and this this general trend is going higher. Uh absolutely. And you see how it uh really launched there with the uh Russia invades Ukraine. Um it wasn't Russia invading Ukraine. It was the US confiscating assets that were considered sovereign assets and the US uh basically caused a lot of distrust with the dollar and that's this is the central bank's reaction around the world is they're getting ready for something they don't trust the dollar anymore. Yeah, that's


exactly it. Yeah. And even if we have stable coin legislation, I mean that's not going to make foreign central banks trust the dollar all of a sudden. Right. It's it's irrelevant that things are bigger here. Yeah. So, what I want to end on our meme, gold is the ultimate safe haven. Gold is the ultimate safe haven. Gold is the ultimate safe. I don't know how many times I have to say it. And it is, you know, it's a, if you look at where it is right now, it's the uh second uh most held uh type of asset


by central banks and central banks are buying and uh so yeah, have you got gold? I want to thank you for the presentation, Ellen. That was great. Yep. Thank you, Mike. Thanks everyone for watching.