Full original article by Hubert Moolman on Gold-Eagle.com
“Gold is currently trading in excess of $1300 an ounce. This is well above the 1980 all-time high. However, this is an incomplete representation of what gold is trading at relative to US dollars. When you look at the gold price relative to US currency in existence (US Monetary Base), then it is close to the lowest value it has ever been.
This in itself is a major warning regarding the sustainability of the current monetary system. In other words, the monetary system is the most debased it has ever been. Furthermore, not only is the monetary system at an all-time high stress-point, but also, this comes at the worst possible time relative to other key conditions.
Together, these factors will ensure that the outcome of the current monetary distress, will be much worse than any previous ones. There were previous significant monetary stress-points in the early 1930s and 1971. Although the outcomes from those events were very bad, it did not lead to a complete loss of confidence in the system itself.
The extent of the current monetary distress, with all other things considered, is such that it will likely result in a complete loss of confidence, which could mean the end of the US dollar.
Below is a chart that shows the ratio of the gold price to the St. Louis Adjusted Monetary Base back to 1918. That is the gold price in US dollars divided by the St. Louis Adjusted Monetary Base in billions of US dollars. Therefore, the current ratio is 0.34 [$1 320 (current gold price)/ $3 873 (which represents 3,873 billions of US dollars)]:
“…In August 2015, I estimated that the US would need to have 114,771 tons of gold to back the monetary base. By some estimates, this is about 67% to 74% of all the world’s gold (above the ground). They claim to have about 8 149 tonnes, with 22,000 tonnes being the most gold reserves the US has held at any point in time. They would never be able to obtain that much gold. Furthermore, a full gold backing of the monetary base would have gold priced at around $15 000 an ounce.”
“…We could at any time reach a point A at which a major event in the gold & silver or/and bond market could happen. Any rise in the Gold/Monetary Base ratio is a step closer to that event. This will be that loss of confidence in the US dollar and US bonds. Although a few things might be attempted to prevent a complete lack of confidence (for example, an official US dollar devaluation), it will ultimately fail, due to the extent of this crisis, as well as other critical economic issues.
One of the most important issues is the fact that the Dow is near all-time highs and is about to crash. This is the first time that point 4 on the Gold/Monetary Base chart will basically coincide with a Dow top/crash.”
“…The monetary system could collapse at any time from this point. This warning should not be ignored.”
Gold and silver prices have risen sharply in the last month. This is rarely allowed by the powers that be – I suspect they have lost the ability to stop the rise/revaluation. Other signs show extreme weakness in China, in Germany, with collapse of anything major leading to a domino effect due to extreme interconnectivity. The system has never been so out of whack or so global.
I expect systemic economic collapse this year, and no elections in America, where Trump would win in a landslide if allowed to.
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