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‘Physical gold, not crypto’ is the only safe haven asset, as the U.S. dollar declines – John Kaiser

Kitco News

Gold will rise as the U.S. dollar loses its status as the world’s reserve currency, said John Kaiser, Founder of Kaiser Research Online, at the PDAC 2022 Convention in Toronto. He mentioned that China and Russia would form an Eastern axis of economic power.

“The US dollar will not be used within the China-Russia axis,” said Kaiser. “They’re going to fracture the hegemony of the US dollar. It’s not an overnight thing, it’s not black and white. It’s going to be a transitional thing. And I think that’s where the real price of gold will flourish.”

Kaiser spoke with David Lin, Anchor and Producer at Kitco News.

Autocracy, the US dollar, and gold

Kaiser said that the United States is moving towards authoritarianism, and that gold is a safe haven as political uncertainty rises.

“We see even in America, lots of people wanting to have an autocracy, a dictatorship as the foundation,” he said. “Now if this starts to happen, everything starts becoming unstable and currencies, even the US dollar, become unstable… So, the only mobile asset commodity that I think is a safe haven is physical gold. Not crypto or anything like that.”

He added that gold is “stored energy,” while crypto is an “energy liability,” since “somebody needs to consume electricity to keep all those blockchain transactions going.” He further explained that gold is an “insurance policy” for when “chaos breaks out,” but that he does not consider it a form of money.

“Cash is what you can easily deploy to buy assets that are suddenly deflating in value, whereas you have to first sell gold to get cash,” he explained. “That’s why gold is an asset class. It’s not really money.”

The U.S. dollar will lose its status

The dominant international money, the U.S. dollar, will lose its reserve currency status, said Kaiser. He explained that the center of economic and political power is shifting East, leaving the United States behind.

“The whole concept of globalization, that ran everything for the past thirty years, with the US dollar at the center, this is now coming apart,” he said. “By 2027, China’s economy will be almost as big as America’s. The convergence is happening faster than predicted… That’s why [countries are] seeking payment in these other currencies, such as the renminbi and the ruble… This is going to fracture the hegemony of the U.S. dollar.”

To find out Kaiser’s predictions for the gold price, watch the above video.

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