In an interview recently by VRIC Media, precious metals authority Andy Schectman of Miles Franklin sheds light on the perplexing silence surrounding gold's significant price surge. Despite gold prices "creeping past all-time highs," Schectman notes the conspicuous absence of mainstream media attention, a stark contrast to previous rallies. His analysis delves into the potential reasons behind this phenomenon, suggesting a confluence of global economic shifts and strategic central bank maneuvers is at play.
Schectman, a veteran in the precious metals industry, emphasizes the unusual nature of the current gold market. "Can you imagine if two years ago the gold price had passed $3,000? I feel like the entire world would have lost its mind. But here we are, and all we're hearing is crickets from the mainstream media," he points out. This lack of public discourse, according to Schectman, could be masking significant underlying developments.
A key element of Schectman's analysis is the activity of central banks. He highlights that the U.S. has become a net importer of gold since November, with nearly 60 million ounces delivered. More significantly, he underscores the role of central banks as consistent buyers. "Who has I've been screaming since 2020 has been buying it all? The most well-informed traders in the world, the central banks," Schectman asserts. This accumulation, coupled with over 40 countries repatriating their gold reserves, signals a fundamental shift in the perception and role of gold on a global scale.
Schectman views the current focus on tariffs as a potential distraction from more critical macroeconomic trends. He argues that the countries being targeted by tariffs are often the same ones "keeping our system afloat by buying treasuries and using the dollar as a global reserve." In his view, these tariffs might be obscuring a larger movement towards a re-evaluation of gold's significance in the international financial system.
"To me, the bigger picture is the countries that are keeping our system afloat by buying treasuries and using the dollar as a global reserve... are the countries that we are attacking, so to speak, with these tariffs."
The interview touches upon the intriguing possibility of gold revaluation. Schectman mentions Judy Shelton, a former nominee to the Federal Reserve, who suggested the idea of pegging a 50-year Treasury to gold. He also notes that the head of the Dutch National Bank, members of the Bundesbank, and others have discussed the potential for gold revaluation. According to Schectman, "every $4,000 increase in the price of gold gives the Treasury General account $1 trillion free and clear," hinting at the potential benefits for nations holding substantial gold reserves.
The discussion extends to the BRICS nations' consideration of a settlement currency partly backed by gold. Schectman quotes the former president of Brazil, who stated, "We've agreed in principle to a settlement currency called the unit, 40% gold-backed deliverable upon request by central banks." This move suggests a growing inclination among major global players to anchor their financial systems, at least in part, to the stability of gold.
Schectman also highlights China's development of a digital R&B cross-border settlement system connected to numerous Asian and Middle Eastern nations. This development, he notes, enables a significant portion of global trade to bypass the SWIFT system, potentially reshaping the landscape of international payments and reducing reliance on the traditional Western-dominated financial infrastructure. The reduced payment processing times – from 3-5 days with SWIFT to just 7 seconds – underscore the efficiency and potential appeal of this alternative system.
"This development enables approximately 38% of global trade to bypass the Swift system... significantly reduced cross-border payment processing times from the typical 3 to 5 days associated with Swift to 7 seconds."
Looking beyond immediate headlines, Schectman discusses potential long-term tectonic shifts. He acknowledges the "nobility of reshoring our manufacturing" but cautions that it could come with "a good deal of pain," potentially leading to a severe economic downturn. He also points to the unsustainability of the U.S. debt trajectory, where, by 2031, 100% of tax revenue could go towards interest payments and mandatory entitlement spending.
In this context, Schectman reiterates his conviction about gold's future role. "I believe gold will be foundational to a new system. A system that will be about transparency... It'll be a marriage of blockchain and gold." He envisions a future where gold, potentially in conjunction with digital technologies, forms the bedrock of a more transparent and stable financial order.
Andy Schectman's analysis in the Vric Media interview paints a picture of a significant, yet largely unacknowledged, transformation in the global financial landscape. The consistent buying by central banks, the whispers of gold revaluation, and the emergence of alternative payment systems suggest that gold is quietly reclaiming its historical significance as a foundational asset. While mainstream attention remains elsewhere, the underlying currents indicate a potential paradigm shift with profound implications for the future of finance.