I'm just thinking out loud here but if Your name is Zoltan and you don't go Into fortune telling as a career I feel like you missed an opportunity So there's a new idea floating around Showing how gold could double in price And double pretty quickly I don't worry This isn't me making something up it Actually comes from a contributor for Credit Suisse so you need to know that There is a built-in bias and the concept Requires a pretty big assumption but I'm Going to run through this idea anyway Because I think it's interesting now the Contributor's name is Zoltan posar I was Familiar with his name because how many Zoltans do you know but also because He's been talking about the rising Importance of Commodities in International trade something he calls Bretton Woods three now some of this Information it can be easily found some Of it shows up as leaked documents and Some of it requires subscription so I'm Just gonna give an overview here and That does mean that my citations are a Little bit loose the actual information Is a little bit loose but the idea Itself is pretty straightforward I just Know that the these are ideas and Predictions from somebody who has no Real influence over actual policy does Not run Russia he's simply reading what He sees as the writing on the wall so
Let's start with the spr that's the Strategic petroleum reserve for the United States well it is being depleted And the question that Zoltan kicks off With is what does the U.S plan to do Next will they refill the reserve will They release more well they do a little Bit of both it all depends on prevailing Price and the plan would be to refill if Prices drop below 72 dollars per barrel Something that has not happened yet and The reserves are being depleted and will Soon hit a four decade low tapping into The reserve is being done of course to Help manage inflation among other things And if you remember OPEC plus recently Set a price target of about a hundred Dollars a barrel that's considerably Higher than the 67 to 72 dollars that The US is targeting to start refilling The Reserve so that's the opening plot It's hard to get a hold of cheap oil Right now so we're using reserves faster Than we're replenishing it so here's Where gold fits in hypothetically of Course because again it's old town he's Just not running Russian trade policy But currently Russian crude can be Imported by a country like India I'm not Just picking them out of the blue They're of course one of the big buyers Of Russian oil and until recently they Were able to buy it for about thirty Dollars a barrel then do whatever they
Do to turn it into Diesel and Export That to a country like the United States For 140 dollars a barrel and that allows India to buy cheap oil and then make a Profit exporting that diesel but the Days of the cheap oil are over and Russia's been selling crude at around 60 Dollars a barrel that just happens to be The current sanction cap that just went Into place and Russia does not want its Oil going to the U.S regardless so this Has spurred the idea that Russia would Only take payments for its oil and gold Not in rupees not in dollars so Zoltan Goes on to lay out the exchange rate Pointing out that a gram of gold equals About a barrel of oil right now so Pegging oil at a gram of gold rather Than the current sixty dollars USD sets A base and here's where a little bit of That jump comes into play if that Peg Was in place Rush could offer more oil Simply by releasing more oil for the Same price basically a buy one get one Discount and the reason that Russia Might do this would be to continue to Easily move oil while allowing India to Stay in the picture basically importing That discount oil and exporting it for Profit and that increase in oil per gram Would effectively double the value of Gold taking the spot price from eighteen Hundred dollars to thirty six hundred Dollars and if that seems like a bad
Deal for Russia we'll remember they have A significant gold position both in Terms of reserves and ongoing production Now if this sounds like just another Wild scenario of how gold could very Quickly double well I'm with you but if You look into Zoltan posar a little bit Further you'll see his thoughts on what He calls Bretton Woods three something I Mentioned at the outset of this thing The idea there is basing trade on actual Commodities and cutting out the dollar And that idea to me at least seems Feasible so even if we don't see oil Directly pegged to Gold we could see the Value of gold Rising as it's used to Settle International Trade particularly As trade routes and international Cooperation gets more complicated and Commodities like oil get more expensive So this is zoltan's idea not mine I will Drop a link to the article on Deepdive.ca let him keep his Thunder Take a look if you want to see more but Let us know in the comments what you Think about gold being used for International trade and what you think That would do to the price and then While you're in the comments be sure to Hit the like button if you found any of This interesting be sure you're Subscribed with notifications turned on If you'd like to see more on the topic And if you're still here thanks again
For watching I always appreciate your Time Take care Foreign
