What Will Replace the US Dollar???

It looks like the world is turning upside down when it comes to economics, investments, and yes, gold. Here in the US, when one speaks too much about gold, silver, or any other commodity, the locals quickly look at you like you are lost, or you have lost your mind, or are insane. Hi, my name is Dr. David Oualaalou. I am geopolitical consultant, a global speaker, award-winning educator, author, and a former international security analyst in Washington, D.C. This is a warning to all as the global financial system is shifting, a reality that demands your immediate attention as new investment opportunities in gold emerge now more than ever. While it may not be so popular to talk about gold, for instance, when considering investments, or even when sitting down for lunch with those in mainstream investment mentality. The question is, why? And the short answer is that gold is not popular on Wall Street. Yet it's interesting to consider that many of the biggest players in the global market have a much different view. So let me share with you a fact. It's not a given that the world will keep buying US debt at the same level regardless of American policies and the shifting geopolitical and economic order. The Russians, the Chinese, the Turks, among others, flight into gold is a sign of a bigger global shift. At the same time, consider this: according to a New World Gold Council report, demand for gold has risen by 28% in 2022, largely driven by a flight towards safer assets amid soaring inflation. At the time of this recording, gold steadied above $2,000 an ounce, holding gains from the previous session as the risk of a US default and global economic uncertainties spurred some safe haven demands for gold. Interestingly, a significant amount of this demand has come from central banks in recent months. Turkey, for example, was the biggest gold buyer in the third quarter. Followed by Uzbekistan and India. Central banks globally have accumulated gold reserves at a pace never seen since 1967, when the United States dollar was still backed by the precious metal. In the quarter ending of September 2022, demand for gold was up 28% year on year, reaching 1,180 1 ton. Keep in mind that gold is regarded as an effective inflation hedge and great investments. So the question, why are central banks stocking up on gold? Turkey was the biggest buyer of gold during the quarter, followed by Uzbekistan, which purchased about 26.13 tons, and India, 17.46 tons. Not all countries report their gold purchases regularly. So it's difficult to know how much, for example, China and Russia bought during this same period. Indian consumers habitually purchase gold jewelry ahead of the festive season every October. But that aside, the Reserve Bank of India, or RBI, bought 13 tons of gold in July and 4 tons in September, pushing its reserves to 785 tons. One reason for the RBI to embark on a gold buying spree could be an attempt to diversify assets in which its foreign exchange reserves are parked. On the other hand, there is China. China imported about $108.8 million worth of Russian gold in July 2022, a 750% increase from June to a 4,800 increase from the same month last year. Market experts believe Russia, the world's second-largest gold producer at more than 300 tons per year, is currently selling its gold to China with a discount of up to 30%. Other experts speculated that China, one of the world's top bullion buyer, may be just one of several important new destinations for Russian gold in Asia and the Middle East. And the question that looms large is, what does gold have to do with the petrodollar? You may ask. The petrodollar system and the gold standard are both monetary systems that link the value of a currency to a commodity. While the gold standard ties a currency's value directly to gold, the petrodollar system indirectly links the US dollar value to oil through its use as the primary currency for oil transactions. But here in a brief historical snapshot to put it in perspective for you: in 1971, when President Nixon finally cut the last thread between gold and the dollar, he effectively changed the US's monetary system into a fiat currency system. The dollar began to weaken because of the costly Vietnam War, growing competition from developing economies at the time to buy and sell crude oil using US dollars. The reason why Saudi Arabia agreed to such a deal was because it suffered humiliating defeat to Israel and had to rely on the US's superior military forces to help defend of their enemies, which also included Iran and Iraq. The US was in the bargaining position because their military technology was at least a generation ahead of its nearest competitor. So the petrodollar gave the US a great power and lifted the economy to a new height. It was a brilliant political and economic move by the US because it ensured growing demand for both the dollar and Treasury bonds while letting the US own the commodity for free, as oil's value is denominated in the currency that America controls and prints. During this period, no other currencies came close to taking over its possession, the dollar possession, that is, as the top currency. So the US dollar's position as the primary global reserve currency is being challenged now as countries become eager to insulate themselves from Washington's influence. For decades, the dollar has dominated the global monetary system. Currently, about 60% of foreign exchange reserves held by central banks are in US dollars, and nearly 90% of all currency transactions involve the use of the dollar. However, the dollar's reserve status began to decline in 2014 when some major global powers began to de-dollarize their business dealings. The war in Ukraine, for example, and the subsequent sanctions that it inspired have accelerated the de-dollarization process. For one, Chinese authorities were surprised by the seizure of the Russian Central Bank's foreign exchange reserves following the Ukraine, of course, conflict. In the event of a conflict between US and China, Chinese assets could also be at risk. According to Mark Odano, he is a research analyst with Black Bull Markets in Auckland, New Zealand. He argued that overall, the US dollar's share of the global market has decreased from 71% to 59% over the last two decades and could shrink even further in the near future. And you all see what's coming. For this reason, smart investors are seeking alternative to the US dollar and pouring their money into gold. As stated before, gold is at a new all-time high as more and more are stocking up on gold. Now I want to introduce you to today's sponsor for today's video, which is tied directly to the demand of pulling gold out of the ground. This company I'm talking about just IPO'd and was just listed on the NASDAQ stock exchange. The company's name is US Gold Mining Incorporated. Hearing their stock ticker is USGO. At the time of this recording, they are trading at $14.92 a share. And this comes, of course, on the heels of the dollar's decline after hitting a 5-week high earlier in expectations of more clues about upcoming policy decisions by the Federal Reserve. The latest debt ceiling showdown appears to be extraordinary as no party is in full control of Congress, and that could lead to disastrous outcome for the US economy. There are 4 potential outcome that I see coming. One, the standoff continues past the target dates. In this scenario, it's the most dire one. The US government would partially default on its debt due to political brinksmanship between the Democrats and the Republicans. In this case, the government will miss payments to retirees, veterans, military personnel, and contractors, but it will not— I mean, it would continue to make bond payments in this case. Number 2: Clean debt ceiling increase. Yeah, in this scenario, That default will be averted thanks to the Republicans giving up on their spending cut demands at the last minute. In this scenario, there will be no change to the outlook for the growth in the economy in 2023. Then we have the third option: President Biden caves in to some Republican demands. In this scenario, A US debt default will be averted because President Biden will give into some spending cut demands from Republicans. In this case, government spending cuts would go into effect this year and in 2024. This, in my opinion, will lead to raising or rising uncertainty among investors and businesses. As spending approved by one Congress could be undone by the next. And the last option, or potential option that is, is the debt ceiling suspended completely. In this scenario, Congress suspends the debt ceiling limit, creating time for extended negotiations. So if Congress kicks the can down the road for few months, into the fall of 2023, the same issue today will resurface then, and it will add the risk of potential government shutdown. This scenario, again, in my opinion, will lead to slower economic growth this year, 2023, and next year, 2024. It seems ludicrous to me that the government will default, but according— this is according to Joe Biden. The government always pays its obligations, he says. But it's not the case. The US government has defaulted several times since its founding: 1790, 1861, 1933, and 1979. One thing is sure: the damage of confidence in the US government, the banking system, confidence in the Fed, the Treasury, and the US dollar is already done regardless how this gets resolved. While this chaos develops, gold hits an all-time high globally. Gold has been the best chaos hedge for over 5,000 years. I state this disclaimer, by the way, for the record: this is a sponsored video. Do your own due diligence in researching and learning more about this company if you decide to invest. I think it is a good company, which is why I am interested in investing in it. While at it, consider this: US Gold Mining Incorporated just raised $20 million in IPO just a few weeks ago. Here's the key: the market cap for this company, USGO, is about $110 million valuation, which is basically the price of the shares times the amount of outstanding shares, minus the $20 million cash they just raised, gives them about $90 million in cash. What's called in the financial jargon enterprise value, or EV, which is basically the value of the company. So the company has a couple of projects it is working on. One of which is called Whistler Project. This Whistler Project has about 9.4 million ounces of gold, or gold equivalent, or gold resource equivalence, because it is still underground. So doing the math, if you take $90 million enterprise value and divide it by 9.4 million ounces of gold in the ground, that gives you a price of $10 per ounce of gold. Interestingly, the CEO Smith previously sold the company at $130 per ounce of gold in the ground. So you can see the difference, which is— would be worth your, your investments here. It shows there is a lot of now appetite for this company. It demonstrates the market really believes in what USGO is doing. And with $20 million at hand, the company can start to drill, bringing that gold out of the ground. And by the way, the property in Alaska where the project is hasn't been drilled since 2011. This is the big trend right now. There are companies out there are raising money and they are going back and buying old mines. You may ask, why are they buying old mines? Well, this property hasn't been drilled, as I said, since 2011. It's because the technology we have today is far better than what it was in 2011. They can get so much gold out of the ground. And just think about the generated profit when combining a new technology with a higher gold price. USGO is in a better position to extract more gold out of the ground. The economic landscape could not be better for gold, in my opinion. Gold is already above $2,000 an ounce, and what's even more important is that the Federal Reserve is projected to be hiking interest rate for the last time in this cycle. So this new IPO, which just began trading days ago, raised about $20 million from institutional investors at $10 a share. So here is some info— information about their Whistler project. 1, it has significant developed gold copper deposits with growth upside. 2, State of Alaska mining claim. 3, 105 miles northwest of Alaska's largest city of Anchorage. 4, fully permitted for exploration. And 5, State Roads to Resources program to unlock mineral potentials in Alaska Range. The company's CEO, Tim Smith, is a professional geoscientist with over 25 years of experience in mineral exploration and mining. He has a track record of discovery and mine development of major gold systems in Australia and Canada with junior, mid-tier, and major mining companies including Goldcorp and Newmont. He was previously the Vice President of Exploration at Kaminak Gold, where he led the field team to the discovery of the Coffee Gold deposits in Yukon, Canada. In case you are not familiar with Kaminak Gold Corporation, the world's largest gold company acquired it for $520 million Canadian several years ago. Personally, nothing makes me happier and comfortable than knowing the CEO was involved in realizing a buyout by the world's largest gold operator. So what are you waiting for? You can either invest in US Gold Mining Incorporated, stock ticker is USGO, today, or let this opportunity slip away as demand for gold is only going to grow moving forward. Once again, US Gold Mining Incorporated, stock ticker is USGO. Check it out. And remember, there is always risk in investments and there are no guarantees.