Trading and mining expert Didier Julienne has pleaded in a forum for The World for a new monetary order that combines a basket of currencies, virtual currencies and…gold.
stands. Global trade, bank reserves, global debt, extraterritorial justice… The dollar rules the financial planet. Washington’s currency offers deep markets, stable value, liquidity, and some of the security associated with independence from the U.S. central bank. But this dollar neutrality is threatened by President Trump’s trade war policies, and the ensuing currency war is causing the currency to depreciate.
The dollar’s privilege is no longer sustainable. However, economic expansion requires a global currency, and a new monetary order will emerge from this crisis, and three successor candidates illustrate this rebirth: a basket of currencies, virtual currencies, and gold. The main quality of gold is the one the dollar has lost: independence. If some central bank replaces the dollar with gold in their reserves, it is because gold is not anyone’s debt, its interest rate does exist and is not determined by a country, but by the price difference between the spot market and the futures market..
Of course, there is no debt, but today’s gold market is deep and illiquid in the face of depressed financial markets. They will ask for gold price or gold production, or both. How much? By dividing the value of paper money and global financial products by the amount of gold hoarded, someone calculates that an ounce of gold is worth between $10,000 and $25,000, or 7 to 17 times what it is today.
Gold and the challenges of environmental transition
The range is wide, but it remains narrow in the face of the reality of other, more speculative factors associated with this upheaval. Higher prices, to better ensure market depth, stability, liquidity and financial security, will reserve gold for central banks and destroy demand for gold in the jewelry industry and private investment. In addition, environmental concerns are increasingly inhibiting the growth of mining production. For gold, environmental transitions also have an inflationary effect!
The end of the dollar, the emergence of a new metal world financial order, like every major upheaval, is something everyone is predicting, but not really wanting, for fear of losing the comfort of the dollar. If gold can serve as a temporary relay between the dollarized world order and the currency of the future, it is conceivable that this future world is still vague. A basket of currencies managed and guaranteed by a central bank, but what independence would these currencies have? A virtual currency without written operating rules or guarantees of its value stability? Bitcoin price chart proves the danger of this tool?