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Russia's new gold exchange could challenge LBMA and reveal gold's 'fair' price - Matthew Piepenburg

Kitco News

(Kitco News) - The Moscow World Standard, an alternative to the London Bullion Market Association (LBMA), could end gold price manipulation and reveal the metal's fair market value, according to Matthew Piepenburg, Commercial Director at Matterhorn Asset Management.

 Russia is proposing its own international standard for precious metals after getting banned by the London Bullion Market Association (LBMA).The country's Finance Ministry said it is "critical" to create the new Moscow World Standard (MWS) to "normalize the functioning of the precious metals industry" and create an alternative to the LBMA.

Russia is also proposing to fix prices of precious metals in the national currencies of key member countries or via a new monetary unit — such as the new BRICS currency proposed by Russia's President Vladimir Putin.

"Putin knows, like everyone else knows, that the LBMA is an open joke,"aaid Piepenburg.. "It's legalized use of leverage to artificially repress the gold price."

Piepenburg referred to LBMA banks having "thousands and thousands of levered contracts short when most of the market is going long," hence engaging in an "artificial legalized way" of suppressing the gold price.

Piepenburg spoke with Michelle Makori, Editor-in-Chief and Lead Anchor at Kitco News.

Global monetary reset

As a monetary reset occurs, Russia may set up a reserve currency backed by a basket of commodities, including gold.

"Russia and the East like things like fertilizer, gold, hay, and hard assets," said Piepenburg. "As we de-dollarize, as the Petro dollar gets diluted by other exchanges and other trades, they'll do the same thing with the gold market because it is real, it is a monetary metal."

On the Western side of the monetary reset, The International Monetary Fund (IMF) is supporting countries in their development of Central Bank Digital Currencies (CBDCs), programmable tokens issued by a country's central bank. In February, IMF chair Kristalina Georgieva said that CBDCs are potentially better than stablecoins and "unbacked crypto assets."

Piepenburg claimed that the IMF would ensure that CBDCs are gold-backed.

"[The IMF has] admitted that for [a CBDC] to have any credibility, it has to have some partial coverage in real assets, meaning physical gold," he explained. "For them to have any kind of credibility, it's going to be like a Western Chapter 13 or Chapter 11. They have to restructure debt."

Piepenburg pointed to the U.S. having a "debt problem," with a debt-to-GDP ratio of 123 percent.

"The West and the U.S. have loved not having a gold chaperone since 1971, when Nixon welshed the global gold standard," he said. "It was a way to have unfettered euphoria with the U.S. dollar."

Calling the U.S. dollar "mouse-click money," Piepenburg claimed that a Western monetary reset would be necessary when "even the most average investor has lost faith in central bank optics and double-speaking fork-tongued excuses."

The Fed will 'inflate away' U.S. federal debt; 'real inflation' is in the double-digits - Matthew Piepenburg


Although he respects "the intellectual argument behind cryptos in general, or Bitcoin and Ethereum in particular," Piepenburg said that "Bitcoin is a speculative asset."

"I think Bitcoin has a standard deviation of 140, while gold has a standard deviation of 17," he explained. "I think the power of Bitcoin is also its biggest weakness, the fact that it can skyrocket and tank in the same breath… that's the nature of the asset."

Piepenburg went on to claim that gold is a more stable store of value than Bitcoin.

"Gold, I think, is a lot more stable," he explained. "It's a better spouse than the Playboy polo player, and that's kind of what Bitcoin is. I could be wrong… [but] I still think gold emerges as a victorious asset regardless."

Piepenburg is very bullish on gold, to get his gold price forecast, watch the video above.

Follow Michelle Makori on Twitter: @MichelleMakori

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.