I have been writing for months about how I believe that the world is moving away from the fantasy of fiat money and moving towards a system that is based on hard assets. I have mentioned about the Shanghai Cooperation Organization and the BRICS countries actively moving in this direction. To me, it only makes sense that those producing actual goods should determine the price of those goods and not someone who can, with a few clicks on a computer screen, change the dynamic of an asset class.

Today, I got a little further confirmation that it is even bigger than I had anticipated.

First of all, I guess I should mention the source of this information- Dr. Harald Malmgren.

Dr. Malmgren studied at Yale and graduated summa cum Laude in 1957. He then went to Oxford and got a D.Phil. in economics. After Oxford he was appointed to The Galen Stone Chair in mathematical economics at Cornell University. He worked for the US government under John F Kennedy and LBJ. In 1969 he left to head research at the Overseas Development Council and served as an adviser to the US senate finance committee. He also later served as principal adviser to the OECD Secretary General and as a senior adviser to President Nixon on foreign economic policies. He also served as the US chief trade negotiator under Presidents Nixon and Ford. In 1975 he left the government and was appointed Woodrow Wilson Fellow at The Smithsonian Institution. Since 1977 he has been an adviser and strategist for international corporations, Banks, investment banks, and sovereign wealth funds. He has also advised finance ministers, prime ministers and a number of governments around the world. There is a lot more but this will give you the picture- This guy is the ultimate insider and if he says something we should all probably listen.  [i]

His quote which struck me “My personal network warns me that “Fed leadership” cannot say what it wants: Hard landing to reduce asset value bubbles and bring back long forgotten mark to market ideas”. This implies to me that they may be on the same wavelength as the East but can’t come out and say it or there could be a disorderly decline. I have mentioned before that this looks like a managed implosion taking place right now.

In another stunning development the Bank of England has capitulated and has resumed UNLIMITED QE to tame the instability in the debt “markets”. The ECB has already gone down this path and I can’t imagine that the US is not far behind. The reason for the sudden pivot in England- according to the Financial Times is that the spike in interest rates or the “break” in the bond “market” manifested itself in thousands of pension funds facing urgent demands from investment managers in recent days to meet margin calls. The collapse in UK government bonds led to this situation. This action is reported as “temporary” but I believe it will likely be as temporary as the closing of the gold window in 1971 that still exists today. Why? Because if they let up the same bonds will just blow up again because there is not enough demand for the massive supply.


My thesis right now is that we are in the beginning of the end of the fiat “money” system and that hard assets are going to be the answer to future solvency and prosperity.


Many people are frustrated that gold, silver and other assets are not moving as we would have anticipated. Or are they?


I have written that everything we see economically these days is an illusion. There is virtually NO PRICE DISCOVERY for ANY asset class that trades on a paper “market”. It is all manipulated with impunity for the benefit of the few.

One thing that just MIGHT enlighten a few people is just to look at what it costs to buy an ounce of gold in OTHER currencies- not just the US dollar. Remember- the US dollar has only been strong against the collapsing western currencies- up 12% vs. Euro, Up 20%+ vs Yen and up 15%+ over Pound Sterling. Against BRICS currencies the US dollar is DOWN 1.2% (September 2022)  source:Daniel Ammerman


So, what happens to gold and silver when the currency really fades- like in Zimbabwe, Venezuela, Weimar Germany, etc.?  It skyrockets.

I was actually a little surprised to see what it costs to buy an ounce of gold RIGHT NOW with a Japanese Yen (September 28, 2022 quote from Kitco.com) If you want 1 ounce of gold it will cost you GET THIS 239,423. Yen. ONE OUNCE. Silver is at 2723. Yen. This is far from a small currency and they are just a little further down the path than we are here in the USA. By the way, Rhodium- which DOESN’T trade on a paper “market” is trading at over 2 MILLION YEN FOR ONE OUNCE. OUCH!

I believe that these numbers are showing that, while the paper manipulators are suppressing the price and buying all of it they can, gold and silver are doing what they are supposed to do- HOLD VALUE as currencies collapse.

It appears to me that the writing is on the wall. Inflation will likely not be going down anytime soon because we have a supply problem- not a demand problem. More rate increases will just likely add to the misery already being experienced by those struggling to get by as prices continue higher and the expense of carrying debt gets harder also. This will likely slow the economy down, lead to FAR higher unemployment and will likely lead to FAR more “printing” to pay interest, handouts, wars, etc. This will also likely lead to a MASSIVE decrease in tax receipts that should, in turn, lead to even more “printing” to cover the increasing shortfall.

This is how virtually ALL Fiat currencies have failed over time. We are awfully close to midnight in my opinion.

Be Prepared!

Any opinions are those of Mike Savage and not necessarily of those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. The information in this report does not purport to be a complete description of securities, markets or developments referred to in this material. The information has been obtained from sources deemed to be reliable but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

Commodities are generally considered speculative because of the significant potential for investment loss. Commodities are volatile investments and should only be a small part of a diversified portfolio. There may be sharp price fluctuations even during periods when prices are overall rising.

Precious Metals, including gold, are subject to special risks including but not limited to: price may be subject to wide fluctuation, the market is relatively limited, the sources are concentrated in countries that have the potential for instability and the market is unregulated.

Diversification does not ensure gains nor protect against loss. Companies mentioned are being provided for information purposes only and is not a complete description, nor is it a recommendation. Investing involves risk regardless of strategy.