A massive covert movement of physical gold and silver from Europe to the US in early 2023 disrupted global commodity markets, with banks profiting from unprecedented exchange-for-physical premiums of $15-65/oz on gold and $0.30-1.15/oz on silver.
The surge in EFP premiums, the highest in over 20 years, suggests a major disruption in the physical bullion market, potentially involving the US government, with theories including tariff risks and Basel III regulations.
London, the global gold hub since WWII, and COMEX in the US are key players in the gold market, with banks traditionally profiting from tiny arbitrage spreads by shorting futures and buying physical gold.
Central banks and governments lease out gold to earn yield, raising concerns about rehypothecation and dual counting, with the US Federal Reserve, a private bank managing most global central banks, at the center of this system.
Gold remains the only asset on central bank balance sheets outside their own fiat currency, underpinning the system despite the US no longer being gold-backed since Nixon’s decision over 50 years ago.
JP Morgan, the largest silver holder, was fined $900 million for suppressing precious metals markets, highlighting the short-term manipulation by banks while long-term supply and demand ultimately determines prices.
Basel III regulations coming in summer 2023 may drive gold repatriation to US banks as a Tier 1 asset on balance sheets, potentially leading to a monetary reset with gold or Bitcoin as a new reserve standard.
Tariffs, geopolitical tensions, and economic uncertainty are driving unprecedented global gold movement, with banks potentially reducing risk by moving gold to the US in anticipation of financial turmoil.
Elon Musk and Donald Trump are positioning for future economic changes, with Musk discussing universal basic income and energy’s role in AI and Bitcoin, while Trump hints at a gold-backed economy.
Bitcoin, as digital gold, and physical gold are seen as complementary sound money alternatives in the current debt-based fiat system, with Bitcoin benefiting from Satoshi’s early distribution forcing self-custody.
Wyoming’s favorable environment for blockchain companies and crypto custody positions it as a hub for innovation and asset protection amid potential economic disruption.
A potential detox period involving volatility in equities and real estate may be necessary for a stable economic foundation, with short-term pain for asset owners but long-term benefits for the common man.
