G7 “Steals” Russian Assets in Effort to Destroy China, Save EU From Collapse
“Who’s the real target of the seizure of Russian assets? It’s not Russia,” asserts Tom Luongo, publisher of the Gold Goats ‘n Guns Newsletter. In an interview with Daniela Cambone, Luongo argues that Biden’s plan to freeze Russian assets and fund Ukraine is actually aimed at China. The message to China is clear: comply with our trade demands or risk losing your US Treasuries, he explains, noting China’s gradual divestment from these assets.
Luongo criticizes the Biden administration for not acting in America’s best interests, describing them as vandals influenced by Europe. He also highlights Singapore’s growing importance, noting its role in Chinese Yuan settlement and trade clearing since 2012. Watch the interview to learn more about Luongo’s views.
CHAPTERS:
00:00 G7 and freeze of Russian assets
7:11 US saved EU from collapsing
11:29 Destroy of financial system
14:41 World Economic Forum
17:57 CBDC for Europe
23:03 Powell
29:05 BRICS
34:07 Gold
38:00 Singapore becoming new gold hub
43:00 Importance of owning gold
TRANSCRIPT FROM VIDEO:
00:05
Hi, Daniela Cambone here for ITM Trading. And before we get to today’s segment, just a quick reminder that if you haven’t booked your free information session with one of my colleagues over at ITM Trading, I really urge you to do so. If you’re interested in building a wealth preservation strategy focused around owning physical gold and silver, you can get all the information you need via a…
00:32
free information session by booking a Calendly appointment in the description below of the video. It’s a no pressure situation, simply information and highly educational. And I urge all of you to do so. You might really want to do so after you watch today’s interview and with what the guest has to say. On that note, let’s get to it right now. Hi, this is Daniela Cambone. Welcome back to the Daniela Cambone show. We are catching up ahead of the G7.
01:01
seven, the much anticipated meeting happening in Italy this year where the US will be pushing out for a $50 billion loan to the Ukraine using frozen Russian assets. Here to talk about what the repercussions of this could be and so much more is Tom Luongo. He is the editor and publisher of Gold Goats and Guns. Why you might ask that title? Well, Tom is a former research chemist and a part-time goat.
01:31
farmer. We’re going to learn more about Tom right now. Tom, welcome to the show. I’ve been following your Twitter for quite some time and like your style. Well, my Twitter style is at best confrontational and I like to put it that the very worst version of me will show up on a daily basis. And I do attempt to try and fulfill that pledge every day.
01:59
are probably my favorite animal in the world, but I guess goats are cool too. Goats are cool. Okay, let’s get to some serious stuff here because I know you don’t mince words. So talk to me about the Biden administration basically leading a campaign to persuade leaders of the G7 nations, UK, Canada, France, Germany, Italy and Japan to sign off on this plan.
02:26
that it views as vital to giving Ukraine a shot at turning around its prospects against Russia. Now, I bring this up because I recently had Jim Rickards on, author of Currency Wars, who said, well, he says the U.S. is set to steal Russian-owned Treasury securities at the G7, which he says this theft will not only destroy the U.S. Treasury market overnight, but potentially do far more damage.
02:55
Tom, what are your thoughts on the US-led campaign here, and do you agree with Rickards? Well, I frame it a little bit more comp, in a more nuanced fashion. I don’t disagree with Jim. That, yes, if the US were to take the catastrophic move to seize Russia’s, the frozen Russian foreign exchange assets, that this would be an unprecedented event. It would change the nature of the US.
03:25
pretty much global finance. My problem with that view, and again, is that I don’t wanna let Europe off the hook here. Ursula Von der Leyen, at her acceptance speech, for lack of a better term, of winning another term as European Commission President, effectively made it abundantly clear, yes, we’re gonna take $1.7 billion from Russian foreign exchange assets.
03:53
This month and the next month, basically, they’re going to use. They’ve set up a facility to take the interest earned on the frozen assets in Europe and then use those to get to Ukraine. I’ve always viewed this and I don’t view the Biden administration as working for the, the best interests of the United States. I never have. I never will. I think there are a bunch of vandals and I think there are a bunch of vandals that work for that have their, that take their orders, frankly, from Europe. And while I know that’s a controversial view because everybody
04:21
You know, I was looking at the United States running around for lack of a better term, like Rambo without a jockstrap. Um, I don’t believe that it’s solely a US led campaign here. And I also don’t think that the Biden administration, along with Janie Allen, the treasury secretary worked for the U S. So in my view of the world, we have people at the top of the U S political establishment that are actively trying to undermine the validity of
04:48
the US at every level, politically, culturally, legally, economically, and financially. And that’s who they are. And then it makes perfect sense that if you think about why would we do this, it’s not to hurt Russia, that the, and it’s not to save Ukraine. Ukraine is losing the war. They’re not going to win the war. This money is not going to change that. What this is doing, so the, and then you ask the Quibono, you know, you ask Quibono, who benefits from this?
05:17
clearly Europe because if the United States does this, what’s our superpower? And Jim Rickards would agree with us on this, is that agree with me on this, which is that we’ve never defaulted on our debt. We’ve never, our rule of law, our corporate law, our contract law, our adherence to all these things, that’s what makes us an attractive platform for capital to come in. Well, if we destroy that, then where’s the capital gonna go? It’s gonna go somewhere else. So I viewed this whole thing as kind of Europe,
05:47
And the US both wanting to do this, but wants the other one to go first. That it’s more of a, we’re going to go, if we don’t go first, if you go first, that’d be great because then, and Europe wants to do this, but they’re only have both, they have most of the money. You know, the United States only has about $40 billion of Russia’s money. Whereas the European union has over 200 billion of the total of the, the, the frozen assets. So from my perspective, this is.
06:14
a project like everything else that I’m seeing in the markets, that this is a project to keep the European Union from collapsing because I’m seeing credit stress and I’m seeing currency stress within the European Union that are far deeper and far more likely than what’s happening in the United States. So this is where my head is on this. I don’t…
06:39
believe that Joe Biden works for the United States. I don’t believe that Barack Obama ever worked for the United States, and I believe the Biden administration is just the third Obama administration. So when you view it through that lens, that makes more sense, because I can’t see Wall Street going along with this. It’s terrible for Wall Street. It’s terrible for the banking community in the United States. It’s terrible for everybody. So it doesn’t make any sense other than as a desired effect to destroy some.
07:07
major pillar of what makes the United States the United States. Well, this is going to be a loaded question then. Who do you believe they work for? I mean, why, who are they serving? Sure. Right? Part one of my question and part two is why, how does the U.S. win by saving the EU from collapsing? Well, the first part is they work for what I like to call the DAVOS crowd, the old European
07:34
the old European banking and colonialist powers. That’s the first part of the question. The second part is it doesn’t. It actually destroys the US. The US doesn’t win from this. The US loses. There is no upside for the US here. $40 billion worth of Russian assets, trillions of dollars in trade and investment lost. There is no upside here. That’s why I can’t square that circle. It doesn’t make any sense to me that
08:03
And knowing that and then it wouldn’t hurt Russia at all. Russia’s already written the money off. So all it’s doing is making a signal to the rest of the world. Now we want to take we want to think about it. Go what’s the one step further? Who’s the real target of the seizure of Russian assets? It’s not Russia. Like I said, the Russians have already written the money off. They know they’re never getting it back. The real target is China. And there are 700 plus billion dollars worth of U.S. Treasury still that they still hold on their balance sheet.
08:33
the central
09:02
from their US treasuries that they hold. And from about a peak of 1.2 trillion, I want to think go back to like maybe 2017, 2018 to somewhere around 750 to $770 billion. I don’t remember the exact number from last month’s Treasury International Capital Report. But that to me is the big signal that I think, because someone needs a war here.
09:31
This is the part that I think a lot of people don’t want to admit to themselves, that if you have a political and geographic block like the European Union on the verge of both a sovereign debt event and a political dissolution and look at the European parliamentary elections from this weekend, if you see, if you put those two things together.
10:00
then if you want that to survive, how are you going to reassure investors that you’re not gonna lose those things? Well, you have to make everybody else around you look worse. Or if you know that the collapse is coming, how do you run a cover story for this? Martin Armstrong’s brought this point up a thousand times. It’s simply put, you start a war and then you have the Casus Belli for why we could cancel the QCIPs.
10:27
And so I think that’s what I wrote about. I wrote this up when I when I talked about this in a blog post a few weeks ago. And I said, look, the real target here is China. And and you can see the kind of the pivot in many ways of American foreign policy recently towards China, whereas Europe continues to push Ukraine, Ukraine, Ukraine, Ukraine. We have to put money, men and material into Ukraine, whereas the United States has now started to push towards China. And I think that’s the difference here. Biden’s not going.
10:56
Kiev like he’s everybody’s been going over to beijing and beijing has given them nothing And so then into this mix, you know what let’s talk about all the other things that are happening. So It gets all now it gets even more complicated in there But I think if you start looking two or three steps down the line You can see what the what the moves the for lack of a better term on the chessboard look like I’m interested to learn more help me understand why
11:27
they, Biden and company or whomever’s in power, would want the US to lose that power and status and basically destroy their entire financial landscape. Why? Because, well, they are committed globalists. They’re not, they are committed globalists. And the big push since COVID and even all of the insanity surrounding
11:56
the season one of the Trump show, the Trump’s presidency, you can see the panic on their faces. They have a long-term goal. Their long-term goal is to collapse the current central banking system into the IMF and to collapse all global government and to collapse the nation states into the UN. That’s what they want. That they’ve written hundreds of pages of unreadable white papers about this stuff. They talk about it, they believe this.
12:25
You have members of the American administration who are clearly, clearly compromised. They’re either compromised through the intelligence services or the military and or what we like to call the military industrial complex, who of course like war because they get to continue to do what they have been doing. So it’s about the destruction of borders. It’s about the destruction of the United States because the European Union cannot become
12:54
the center of Western power, if the United States, with its adherence to the rule of law, with its first and second amendments, with its constitutional republic intact in any functional form, we can’t have that. So you have to have then installed over time, people who don’t operate in the they operate in the space of systematically step by step, blow by blow, rule by rule.
13:25
undermine the validity of the United States. Meanwhile, the American people are sitting here going, what is going on here? Why is this happening? And we know why it’s happening. Why is the border open? Why is all these things? Why is Ukraine so important?
13:41
And then we start getting into, you know, age old fights between the old, the remnants of the British Empire and Russia and old British foreign policy and European colonial policy in Africa. And then the conversation becomes much, much bigger. And it feels like it feels for the I know what it feels for the outsider, like as a kind of Gish Gala fight that, you know, you’re not focusing on the particular thing. But it’s the problem is it’s such a big.
14:11
story that you almost have to explain it in all that way in order to then see the through line. And the through line is really simple. These people don’t work for the US. It’s that simple. And once you grab onto that and then look at all their behavior, it tracks. When you run the behavior, when you assume that they work for the US and then you look at their behavior, it doesn’t make any sense.
14:38
The story doesn’t make any sense. Is the world economic form at the top of that pyramid for you, or is it even above that? I think it’s a different thing. I think the WEF is kind of like the PR arm of these people. They’re kind of like the thing, get everybody together at Davos every year, and they discuss. And then we have a whole bunch of lieutenants running around and egghead academics like Klaus Schwab and the rest of them.
15:03
But the reality is that you have to come up with all of these kind of fairy tales and stories, and then they just control the narratives. And what they really do is they manipulate the flow of capital through the central banks and through foreign flows and monetary policy to create the milieu that they’re trying to gaslight you into believing is true.
15:33
So let’s take a perfect example for this. Does anybody believe that German tenures should be trading at 180 basis points less than US tenures? Germany’s inflation problems are worse, they’re deindustrializing faster than the United States. You can even make the argument that the United States is reindustrializing in a certain respect. How is this even functional? Oh, it’s only functional because it’s only rational because every month…
16:01
Janet Yellen issues more two years than 10 years, while Christine Lagarde and the Bank of England and the Swiss National Bank and all the, Christine Lagarde at the ECB shuffles money around on the deck chairs of their Titanic, and holding rates and holding the rate spreads together. From the moment that Powell raised rates the third time by 75 basis points in July of 2022, what did Lagarde do the day before?
16:29
She announced the transmission protection instruments, which I also like to call the toilet paper initiative because that’s exactly what it’s gonna turn the euro into. But she said, I’m going to manage credit spreads. And everybody at the time thought that she was talking about Germany and Italy. And I’m like, no, this is about Germany and the United States. Because if you can control the rate spread between the US, the nominal world safe haven bond asset, sovereign bond asset.
16:58
And the German bond asset, the safe haven asset for Europe, would be the German Bund. If you can control that credit spread, well, then you can manage the global perception about the health of Germany and the regulatory inevitability of the European Union. It’s all about perception. And so we’ve had nothing but that presented to us while we’re bombarded on a daily basis with the United States’s
17:28
Is descending into clown world and I don’t know I look around I don’t I I see it at the top and I see it in the headlines And I see it on twitter And I see it through policy But it’s policy that is designed for a particular outcome And you know, i’ve been following politics for an awfully long time. I’ve never seen it like this Let me ask you this though. Sure lagarde and the ecb We’re so insistent and gleeful, you know new year’s day announcing that we’re gonna soon see a digital version
17:58
of the euro. So they want central bank digital currency for the euro zone. So they need Europe to survive. They need the euro zone to survive to have this though, Tom. But they also need to default on the existing sovereign debt and replace the currency. Their goal is to do exactly what the British did a couple of times. George Soros has laid this out in multiple half readable articles about
18:25
The way out for the European Union is fiscal consolidation under the European Union, under the ECB, the dissolution of the member central banks, like the Bank of Italy and the Bundesbank and the Bank of France and all the rest of it, all together under one rubric, similar to what the United States has as part of the US’s power here, is we have a central debt issuing agency. We have the US Treasury and we have the Federal Reserve. We don’t have 27 member banks or 20 member banks all issuing euros.
18:55
and the ECB kind of playing, I don’t know, referee. And so in order for them to get that consolidation, they have to effectively default on the debt. And what Soros has made abundantly clear is that they should issue consuls exactly the way the British did a couple of times in their history, go back up on perpetual bonds, and that their goal would be to, you know,
19:24
to pay off, pay off the existing bondholders in Europe with a perpetual bond at some, you know, I don’t know, pick a coupon rate, 2%, 3%, something like that, and then issue a new currency with new debt issued from the European Council or the European Commission and or the ECB, which is exactly what they’re doing. They just had a big bond issuance yesterday. Why? To go to war with Russia. They issued sure bonds during
19:54
the aftermath of COVID, same thing. Okay, they’re starting that process. They’ve given the European Commission tax and spend authority through that program. So it’s happening in front of your eyes. This is what they’re trying to do. But at the same time, they need to collapse the US bond market at the same time in order to make their nascent bond market and their attempted bait and switch look attractive to investors. And what is Jerome Powell doing?
20:23
Yeah, that’s nice. Five and a half percent. If you want to do that, you’re doing it and you’re buying dollars at five and a half percent. And Powell steadfastly just stood there and said, no, we’re going to keep rates at five and a half percent. And the US can get away with it this time because we’re no longer tied to LIBOR. And because we’re no longer tied to LIBOR and we have our own debt indexing rate for how we handle capital internally within the United States, for the first time in our history, by the way.
20:52
We’ve never had this. The Bank of England has always controlled our monetary policy, either through trade flows in the 19th century or the Federal Reserve and LIBOR in the 20th century. We now, for the first time in the 250 year history of the United States, actually have banking independence from city of London. It’s never happened before. And by the way, LIBOR is officially ending and stops trading and people can’t use LIBOR in any way because it won’t be quoted anymore on September 30th. So…
21:21
Is it any wonder? And by the way, someone is out there running, and Libor has been running, like Six Month Libor’s been running a 30 basis point premium to SOFR all year. And guess what? That’s a carry trade that’s been being used to fund egregious amounts of US Treasury bond. One of the things that doesn’t get talked about, this is, I’ll finish this point in just a second. You’ll understand what I’m getting at here. We all make a big deal about China selling the Treasury.
21:51
US Treasuries. And that makes sense geopolitically because we’re trying to start a war with them, a trade war with them. So, okay, they have that risk they’re selling. But guess who’s buying? Does anybody look at the actual amount of US Treasuries held by foreign central banks? Has anybody actually broken the TIC report down? It’s still $8 trillion. Guess who’s buying it all? Europe. Since September of 2021, Europe has bought the Eurozone minus Switzerland, not including Switzerland.
22:20
the Eurozone and all the satellites of the Bank of England. So that would be the Bahamas, the Caymans, Bermuda, the British British Virgin Islands, whatnot, have bought almost eight hundred and fifty billion dollars worth of treasuries net net. Now, if that wouldn’t suppress the bond yields in the US, I don’t know what would. They bought almost a trillion dollars. Do you see where we’re getting at? And so while while Asia Pacific’s been selling
22:50
Europe’s been buying and the net and that net there’s actually more treasuries held in foreign central banks today than what two years ago It’s up to almost eight trillion dollars So let me ask you this before I ask you before we talk before we talk sure Powell lagarde biden In your opinion, are they aware of the real narrative? Do they know what the gig is?
23:20
Oh, yeah. Or are they just pawns in this? Because I know I think there I well, I think there they I think they’re the people like like Powell. He’s not a pawn. I think he’s I think he’s an active player in this. I think it’s him and the big banks on Wall Street. And by the way, I don’t consider any of these people like my friend. I think we have mutually I think we have mutual coincidence of wants. We both want to see the United States survive.
23:49
Okay. Right. Because we don’t want to be ruled by, in my terms, European communists, because that’s what they’re literally arguing for over in Europe. They just won’t call it that. They call it democratic socialism. Give me a break. I think that Powell and the major US banks, and early on in this whole process, I identified the ones that were on Powell’s side and the ones that were still beholden to Davos. So you could like break it down like JP Morgan, Goldman, maybe Citigroup.
24:17
were definitely on Powell’s side, right? And then you could see things like Bank of America, BOFA, Bank of New York, Mellon. I’m not sure where Wells is, because they’re a different, they’re a San Francisco bank. But they were definitely, because of their, the structure of their balance sheets and everything else, they’re definitely constantly wanting Powell to pivot. But if you listen to Jamie Dimon speak, if you listen to John Solomon over at Goldman speak and others, it was very clear that they were like, yeah, we don’t need Powell, we don’t need Powell to cut.
24:48
We just need to, and you can, now you can interpret that however you want. I chose to interpret it as this is the way we get out of this, this, this, this, this fiscal trap we’re in at the same time, Janne Allen then turns around and alters the, the issuance of us treasuries in towards the short end of the yield curve in order to keep the two 10 spread inverted as much as possible in order to make the, in order to manage the perspective, the perception that the United States is in trouble.
25:17
She thought she was going to be able to call Powell’s bluff and force him to pivot in 2023, Silicon Valley Bank, the debt ceiling crisis and all of this stuff, it didn’t work. He held his water. He raised rates during a banking crisis last year. That was your big tell. And so, I hear the week of Silicon Valley Bank and Signature Bank and all of that happening, and then the FOMC meeting in March that year, he raised a quarter point. And that forced Yellen.
25:47
Overseas to China to beg them to buy treasuries in July and all this other stuff. So You know when you go back over the history of this and you really want you know Once I had this kind of idea in my head that this is the way this worked It was work was working. I didn’t just watched everything happening and then fit it into that that thesis Remember, I mean, I’m a former chemist. So I used to do like real science, right? So you make a hypothesis and then you start testing the hypothesis against the null hypothesis and in this case my hypothesis was
26:17
What if the Fed is actually working for the US as opposed to being the global bank, central bank of the world? What if? And then I played it out and I just ran that question out in my head and then I let the data tell me what was happening and clearly that fits better than what we’ve seen. Tom, let me ask you, when you started this journey, not to digress, but when you started the journey of playing out the what ifs, what did your family and friends think? What’s happened to Tom?
26:45
No, my family and friends, my family and friends always have always thought I’m crazy. Right. So they don’t, they don’t engage with this at all. But my patrons were like, Oh my God, are you, are you serious? I’m the literally the only person for seven months, I was the only person saying this publicly. And then I started to see other people talk in similar terms. They’re the next year, year and a half. And, and, and one particular, um, she talked through it and around it a lot was Daniel D Martino booth. She was.
27:15
very clear that with her talk about how Powell wants to end the Fed put and all of this. Yes. Danielle was on target with this. And when I had her on my podcast in February of 2022, I did my best to not put words into her mouth, but allow her to kind of agree with me. And we came to a meeting of the minds that was pretty close. And I’m like, okay, thank you. Yes. Okay. You see things the way I see them. And again, it’s about the euro, it’s about collapsing the offshore dollar markets.
27:44
and having the United States get control of its monetary policy by being able to control the value of dollars and the interest rate for dollars. When previous to that, the Euro under zero bound interest rates, the Fed wasn’t setting monetary policy. The Euro dollar banks and offshore dollar banks were setting the cost of dollars. They were the ones deciding how much to lever up what the loan rates would be and everything else.
28:13
And the minute Powell went to 5.5% and drained the world of, well, quickly of like $2.5 trillion worth of base money, of liquidity, all of a sudden, all that leverage turned around. So what leverage giveth on the way up takes away twice as fast on the way down. And so now, since then, every FOMC meeting is, will Powell pivot? Right. Will Powell pivot? Please Powell pivot. Now you’ve got Elizabeth, literally looking at a Yahoo News.
28:42
article right here that says, you know, Elizabeth Warren is demanding, demanding that Powell cuts interest rates tomorrow. And Powell’s answer is going to be close the effing door.
28:56
That’s what he’s gonna do. Let’s talk. I just want to get your thoughts on the bricks. You mentioned Jamie Diamond He’s brought up the fact and sees them as a major player You know, I’ve had other people on the show discounting the role of the bricks, but we know October summit After that we could see 30 other countries added to the bricks. So they’re absolutely growing in power And I thought this was an interesting quote from Chinese foreign minister Yang Yi
29:25
who has called on the BRICS to promote peace and stand against a new Cold War and take greater responsibilities and actions in world affairs. He said this during a multilateral meeting with his counterparts in the global south. So your take, Tom, on the BRICS, I mean, do they become the new European Union or bigger?
29:55
No, I think that they’re not going to make the same mistake that Europe did, which is push for any kind of political integration. I think that ultimately with things like Enbridge and the bricks and the, you know, the ideas that are out there with the bricks currency, they’re basically, they don’t want to give up the dollar if they don’t have to. But if the US is not going to put the dollar into context. And again, I actually believe that Powell wants
30:24
out of the global reserve currency. I think he’s actively trying to drain the world of offshore dollar liability so that the US can have control over its monetary policy. I think he understands trip as a paradox and he understands that we no longer have the balance sheet room to continue to send dollars out and get goods in return. We can’t do that anymore. We have to- I thought he wants that to happen under his 10. Why would he want that legacy? Well, because it would actually, that’s the legacy that
30:53
make sure the United States doesn’t implode. The legacy is he becomes the next Paul Volcker, who actually, or it’s like the reverse Volcker, who Volcker is the one that raised interest rates to create the dollar reserve standard, okay? What Powell would be doing is raising rates here to end what’s left of the dollar reserve standard, and it’ll just allow the dollar to go back to being something close to a more regional currency that it can defend it and defend US interests at home.
31:23
There’s a lot of other, that encompasses a lot. And that’s like another two hour conversation, right? So let’s just leave it there and just understand that that’s what I think about this. And I’ve thought long and hard about it and I’ve done multiple interviews in the past on what I think about this. But as far as the bricks are concerned, I think what they want is what Zoltan Puzor has suggested. Bretton Woods III, there are commodities and they’re your problem now, as opposed to our money, your problem.
31:51
And that’s where we are. They’re going to set up a system of trade settlement that will have as its common denominator, gold, basket of commodities and currencies. Absolutely gold will be at the center of this because, and the Chinese are, and I think the Russians as well, but certainly the Chinese are using Shanghai and the arbitrage between gold prices in Shanghai versus London and Chicago to their advantage. And it’s almost like it’s as important.
32:20
important a weapon in today’s, in today’s, you know, NASA and World War III as any F-16 or Atacams or anything else that we would ever send or missile we would send or submarine. I think that the demand for physical gold in China is the means by which you can deprecate the COMEX, you can deprecate the LBMA.
32:45
You can move the center of gold trade out of and democratize it a little bit more around the world. And the demand for gold in China is real, strong and continuing. And the arbitrage that is that way. And when you look at the arbitrage between Shanghai and say London or Chicago, remember that if that doesn’t close, like you get a $30 arbitrage. That means that you, and it doesn’t close like immediately. It’s because you can’t source it in Chicago to send it to London. You can’t force it in Zurich.
33:15
this ended to, I mean, not the London to, to Shanghai. So that is your prima facie evidence that, that the gold market is, is illiquid, that the silver market is just as illiquid. And in many ways, in many other ways, I got news for you, I believe at $80 a barrel, the oil markets are going to be become illiquid, all puns intended. So, cause they’re, cause all of these things are being, are they’re, they’re all experiencing arbitrages that can’t close.
33:45
And that speaks to supply and demand mismatches. And at the end of the day, it’s all about the commodities. Is that the reason that you think China has been hoarding gold, the central bank for 18 months straight? I mean, they just put a pause on it. That’s what they tell us. Do you think that’s part of the plan? I mean, what do they want to do with this gold, Tom? Oh, it’s absolutely to everybody in the, in, you know, east of the Duhepiore River, for lack of a better term.
34:12
lack of a better dividing line is buying gold. It includes, I mean, and they’re doing so because they know that they are going to need to be able to buy commodities. They’re going to have to be able to source commodities with gold backing in some way, manner, shape or form. The Russians have been buying gold famously since 2011, and the Chinese have been as well. And I also, you know, you invoke Jim Rickards at the beginning of the conversation and I go back to when I, you know, when I was a nobody and I was listening to Jim and every podcast that he did.
34:42
that back in 2009, 2010, and he was talking about how he never believed that China’s official gold reserves number were real. And then you should always assume that China has 10, 20,000 tons of gold, some insane number. And, uh, I think the, oh, by the way, I think the same thing about the Russians. I don’t think the Russians official reserves are somewhere on 2,500 tons or anywhere close to what the Russians actually can get their hands on. Right. Well, I’ve always said that as well, Tom, there’s no one fact checking what they’re telling us. Like, no, there’s not like an outside body saying.
35:11
Yes, it’s accurate that china bought this amount or russia bought this amount or that they’ve halted buying We’re just going by what the country’s releasing right exactly and Which is a very important point to understand that Ask yourself then why why won’t they tell us what the real number is? Well, because they don’t want to upset the apple card They don’t want everybody because if you remember daniel go back To 2011 or 2010 when china first announced that they have a thousand fifty four tons of gold, right?
35:41
That was the day that central banks around the world started buying. Since then, like the Washington agreement ended, China did this. And then since then, it’s been net central bank buying year in and year out since then, to the point now where we have between 15 and 20% of annual gold’s demand is central bank buying. So now, play that forward. Why would China not tell us what the real gold holdings are? Well, because they like a low gold price as well.
36:11
Because they’re accumulating. And if you’re accumulating a stock that you’re like, you found a stock in the market, it’s like any good trader, you have a stock that you like, you don’t want the street to find out about it. If anything, you put out bad, bad news while you continue to accumulate in the background, right? Well, it’s and then at the same time at the geopolitical level and at the well, let’s talk of the G7, G8. When you look at it at that level, it’s also a bargaining tool. They can go into the negotiations and go look.
36:40
You know I have 20,000 tons of gold. I can move the price of gold to $9,000 an ounce tomorrow.
36:48
So I’m not doing that. So now let’s talk. So let’s get down the brass tacks. You’re not gonna invade Taiwan. We’re not gonna invade Taiwan. You’re not gonna do this. But let’s end all the nonsense. That card hasn’t been played, but it’s certainly been discussed behind closed doors. So, you know, there’s what we perceive as the world today and what is actually happening. You have to always read through between the lines.
37:17
in the words of what the diplomats say and you know what their actions are and their actions are very clear. It’s a bargaining chip. Why would and as a good intelligence agent like Putin is he holds on to every bit of information and only doles out what he needs to. Like Putin is very good at this and so is Xi in his own way. So, you know, they won’t they won’t release those numbers until until it’s in their best interest to do so. One more point because I know you have to run but you know.
37:47
to this point about the center of the gold gravity is shifting to that side of the world, Tom. We saw the news Singapore now set to lead the gold market. This is according to the World Gold Council. One key reason is that, as you say, gold consumption in a major emerging economies is rising and a majority of these markets are concentrated in Asia. This is a quote from Xiao Kai Fan, head of Asia Pacific and global head of central banks. So how…
38:17
Significant is this news that Singapore becoming really the new, you know, London, New York or Switzerland of that region, per se, how significant is this news? It it is. And I’m not sure it is for the reasons that I wanted to believe 10 years ago, when I was working with a broker over in Vietnam, and I was studying Southeast Asian 10, like
38:45
And not for any of the reasons I think that anybody’s thought about. City of London has very deep, deep ties to Singapore. I think that we have to be very careful when we sit down to analyze anything. When I look at the the the the the game board today. And I’ve been accused of overplaying this this angle, the British angle on this. The British have a lot of money and they have a lot of old.
39:14
They have a lot of old contacts and old relationships, certainly within India and all their former colonies and everything else. Singapore is something to watch carefully as to who exerts more control in Singapore, China or City of London in the same way as what’s happening in Hong Kong. Because every time the Chinese try to assert
39:43
more control over Hong Kong, which they have every right to because they own Hong Kong now. You’ll notice that there’s political unrest in Hong Kong.
39:54
And that’s the remnants of.
39:58
British intelligence, British foreign agents, British influence in the area. So watch Singapore carefully. I am. I’m actually more interested in Dubai as an independent gold and oil hub than I am in Singapore. I think that any announcement regarding, at this point in time, and certainly after the Indian elections from last week, anything about pumping up either India or Singapore are meant as
40:28
um, means by which to move the center of power out of London to one of its former colonies. That’s what I think. Now, I’m willing to be wrong about that, but that’s the way I’m viewing it right now. It’s a very subtle point, and I’m trying to think two or three steps ahead here. But if they’re getting kicked, if London’s getting kicked out of Hong Kong and they can’t,
40:57
And they’re losing London and in Chicago. Then what? You know, as a gold hub, then what? And they got to move it somewhere. So, and I know for a fact that China, that Singapore was the first place where there was Chinese Yuan settlement and trade settlement and, and, uh, and clearing was done through ICBC in Singapore. And it happened in like 2012. And that’s so Singapore’s been very important to China. The
41:26
Asian tiger five that would be Malaysia, Thailand, Singapore, Vietnam, and Indonesia. Sorry. Um, that you have to think of, you have to remember when China talks, talks, trade and settlement flows, um, they, and the, and the, you won the internationalization of the one they care about their exchange rate versus those five countries far more than they care about their exchange rate of the one versus the dollar. And that
41:55
that argument is always a political talking point here in the United States to gin up hatred against China and to cover perfidy and malfeasance on the part of American and Western politicians who are running around in the background doing things they shouldn’t be doing. The Chinese care about the real effective exchange rate of the yuan, the rear, which you can look up on the Fed. The Fred Graph, they publish it every month. They do it for most of the currencies.
42:25
And that tracks far more closely to the exchange rates of those five currencies than it does to the dollar. Has three years. Tom, I know you got to run, but just one final point. Sure. For the audience watching that’s new to you, I mean, obviously you have a newsletter, gold, goats, and guns, and you love gold, but I just always want the folks to take away, some education or tools they can use. How essential is it?
42:53
to own gold in these times given, I mean, everything you’ve laid out in this time that’s just flown by. I can’t believe 48 minutes just flew by like that. How essential is the gold ownership narrative? Oh, it’s incredibly important. I don’t know where gold is going to wind up, but I can tell you it’s multiples of where it is. I believe that it’s going to be a negotiated settlement between the markets.
43:22
And the central bank slash the treasury departments of the major, possibly G7 nations, but really the United States. Like if you do the math and you look at the US’s official gold reserves and you’ll look at the size of the defense balance sheet and you look at the unfunded liabilities, you can do a simple ratio calculation like Jim Sinclair did all those years ago in the 1970s, he came up with $880 an ounce. You can do that analysis, but that analysis is not.
43:51
I don’t think that that analysis is going to be relevant today. If you do that today, gold goes to something like $85,000 an ounce. It’s a silly number. I’m also, you know, I don’t have enough hand sardines and ammunition packed for that world. I think what we’ll wind up with is a shrinkage of the Fed’s balance sheet, which is why Powell desperately is trying to get the Fed’s balance sheet cut down to size as much as possible and allowing the price of gold to rise, not in a non-
44:21
Um, embarrassing way, $200 up, $100 down, $200 up, $100 down in such a way that we reach a final settlement without any kind of catastrophe. But if the, but in that’s the, that’s kind of the, what’s the, uh, that’s the soft landing and it could be $8,000 an ounce could be 10,000.
44:46
But guess who loses in that scenario? Europe, and Europe is not willing to go down without a fight. These people who think they’ve run the world for the last six to 700 years, and they continue to think that they have every right to do so, and they are willing to start another world war to maintain whatever power they can. That’s the problem. They could walk away with their castles and their hereditary lands, but they don’t want to. That’s not good enough for them. If they did, we…
45:15
This we wouldn’t be where we are today. This negotiated settlement between East and West could just happen slowly. The Chinese and the Russians have been making it abundantly clear, let’s negotiate a way out of this. And somehow the old colonial powers of the West just refused to say no to that and to agree to that. So it’s gonna have to be fought out to the bitter end. It’s gonna be fought in the financial markets, it’s gonna be fought on the ground, it’s gonna be fought in our courts and…
45:43
and our politics. It’s gonna be fun and everyone will know. I’m gonna have to bring you back. That’s a separate conversation on itself. Tom, I thoroughly enjoyed meeting you and conversing with you. And I didn’t even get to ask you about your life as a part-time goat farmer. So we definitely have to bring you back. Thank you so much. Appreciate it. Thank you, Daniela. Gold.
46:10
Goats and guns, you can read more from Tom there. And as always, sign up at danielacambone.com so you stay on top of all these awesome interviews. That’s it for me. Thanks for watching.
SOURCES:
https://tomluongo.me/
https://www.youtube.com/@ThomasLuongo/videos
https://www.youtube.com/watch?v=5no5d66Ss-g
https://www.youtube.com/watch?v=7nSR6R76PJM
https://www.youtube.com/watch?v=9wvcg0ry70U
https://www.youtube.com/watch?v=d3oc0ycW3Ng
https://finance.yahoo.com/news/brics-countries-promote-peace-stand-093000244.html
https://ticdata.treasury.gov/resource-center/data-chart-center/tic/Documents/slt_table5.html
https://www.nytimes.com/2024/06/14/world/europe/ukraine-g7-ukraine-aid-russia.html
