Gold will probably be worth $50,000 once the monetary system returns to the gold standard – John Butler

As the world transitions to a gold standard monetary system, the price of gold will rise to $50,000 an ounce, said John Butler, head of treasury at TallyMoney and author of The Golden Revolution, Revisited.

“Today, the price of gold is too low to allow the markets to redeem, because the assets are overvalued against gold,” he said. “According to my calculations, you’re talking about something around $50,000 an ounce [reasonable] If you go back to the international monetary system backed by gold.”

Butler claimed that a transition to the gold standard was inevitable as the United States lost its economic hegemony and the world became multipolar.

He explained that “gold solves the theoretical monetary equilibrium of a multipolar world, however, highly dependent on international trade.” “At the end of World War II, the US economy represented almost half of the entire global economy. By activity today, it’s only 20 percent…If this trend just stabilizes, it will tip the balance regardless of whether the US maintains military superiority or not. .”

Butler spoke with David Lane, broadcaster and producer at Kitco News.

Federal Reserve policy and gold

On August 26, Federal Reserve Chairman Jerome Powell gave a hard-line speech at a Jackson Hole symposium, noting that bringing inflation to 2% would require “pain.”

The latest data shows that the inflation rate in the United States reached 8.5 percent in July.

Opinions are divided on whether the Fed will focus on its tightening cycle. Butler said Powell would reverse higher interest rates, which could benefit gold.

“[The Fed’s hawkish moment] Butler said. “When it’s over, and markets are fundamentally reassessing that central banks are more incapable of dealing with inflation than they thought, I think gold will recoup all of its losses this year, and really hit new highs.”

He added that Powell’s hawkish rhetoric to Jackson Hole was just a “credibility exercise”, and that “the US economy is unable to hold strong if interest rates continue to rise”, which could cause “the Fed to blink sooner than most people think.” .”

BRICS: a new reserve currency?

The BRICS countries (Brazil, Russia, India, China and South Africa) are allegedly developing a new reserve currency, based on a basket of BRICS currencies, to rival the US dollar.

Butler said that while the demand for a new reserve currency “has been a rhetorical point for far too long,” a “high degree of geopolitical tensions around the world” could mean further progress toward the BRICS goal.

“if [the BRICS] Somehow they decided to come up with a way to trade bilaterally, use each other’s currencies as reserves, or create a basket of their own currencies and use that as reserves… that would be a world historical event,” he said.

Butler wrote in his book that the BRICS nations would likely choose a “gold-backed currency of some sort” as an “objective reference currency that can be trusted and accepted by all”.

“The truth is that no one can print gold, and no one can make gold,” Butler said. “It is good to know that Mother Nature limits the amount of gold available… [Gold] It facilitates all the good things about international trade while mitigating the potential bad factors related to monetary manipulation.”

For Butler’s thoughts on Bitcoin, watch the video above

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