Gold will rise as the US dollar loses its status as a world reserve currency, John Kaiser, founder of Kaiser Research Online, told PDAC 2022 in Toronto. He mentioned that China and Russia will form the eastern axis of economic power.
“The US dollar will not be used under the China-Russia axis,” Kaiser said. “They are going to break the hegemony of the US dollar.” It’s not an overnight thing, it’s not black and white. It will be a temporary matter. And I think that’s where the real price of gold flourishes. ”
Kaiser spoke with David Lin, Anchor, and Kitco News producer.
Autocracy, US dollar and gold
Kaiser said the United States was moving towards authoritarianism and that gold was a safe haven because political uncertainty was growing.
“Even in America, we see that a lot of people want an autocracy, a dictatorship as a basis,” he said. “Now that this starts to happen, everything will become unstable and currencies, even the US dollar, will become unstable … So the only commodity of mobile assets that I think is a safe haven is physical gold. Not a crypto or anything. ”
He added that gold is “stored energy”, while crypto is “energy responsibility” because “someone needs to consume electricity to keep all those blockchain transactions going.” He further explained that gold is an “insurance policy” in case “chaos breaks out”, but that he does not consider it a form of money.
“Cash is what you can easily use to buy assets whose value is suddenly declining, while you must first sell gold to get cash,” he explained. “That’s why gold is an asset class. It really isn’t money. ”
The US dollar will lose its status
The dominant international money, the US dollar, will lose its reserve currency status, Kaiser said. He explained that the center of economic and political power was moving east, leaving the United States behind.
“The whole concept of globalization, which has governed everything for the last thirty years, with the US dollar at its center, is now falling apart,” he said. “By 2027, the Chinese economy will be almost as big as the American. Convergence is proceeding faster than expected … Therefore [countries are] seek payment in these other currencies, such as the renminbi and the ruble… This will disrupt the hegemony of the US dollar. ”
To find out Kaiser’s gold price forecasts, watch the video above.
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