GOLD | The Story of Money | DOCUMENTARY | Gold Price | Financial Assets | Financial System

[Music] whether you believe it to be the one true money or whether you think of it as nothing more than an inert lump of metal gold has been man's obsession for 6 000 years i'm grant williams and in the first part of our journey we explained the history of gold and how this strange yellow metal has captured the hearts and minds of men for thousands of years we showed you how gold mining has evolved over the centuries and demonstrated the complexities of refining and casting gold and we took you underground for a never before filmed look at the most secretive gold vault in the world we looked at the history of the gold standard and saw how a president's decision to close the gold window in 1971 profoundly changed the world around us and perhaps most importantly we showed you why gold became and remains money in the second part of our journey we'll look at the difference between eastern and western attitudes towards gold we'll explain the difference between gold etfs and the physical metal and why that makes the gold price different to the price of gold we'll ask the all-important question is the gold price manipulated and if so by whom finally we'll talk about the possible future of gold what role if any could cryptocurrencies play and is bitcoin the new gold or just another doomed alternative to the only money that stood the test of time [Music] while it's been used as money and a store of value for thousands of years man's relationship with gold goes much much deeper and its place in history extends far beyond coins bars and jewelry we begin the second and final installment of our journey with a look at some of the properties of this remarkable yellow metal gold's durability means that just about every ounce ever mined is still above ground today refined and recast many times over a ring bought today in a souk in dubai may contain traces of gold that once graced the neck of cleopatra that's just one of the many interesting facts about gold gold is among the rarest of the elements making up only three parts per billion of the earth's crust if you want to know how hard that makes gold to find picture a billion m ms and somewhere in amongst that pile there are just three made of gold gold weighs 19 times more than water and is twice as heavy as lead over 90 of the world's existing above ground gold has been mined since the california gold rush and if all the existing gold in the world was pulled into a wire five microns thick it could wrap around the world 11.2 million times throughout history man has mined 188 000 tons of gold to put that into perspective you could place all of it into two olympic sized swimming pools [Music] but it's not just bars in a vault or rings on fingers gold has many other uses in fact aside from its monetary and symbolic value gold is widely used in electronics and electrical wiring dentistry medicine radiation shielding and to color glass in fact more gold can be recovered from a ton of computers than from 17 tons of gold ore even the human body contains about 0.2 milligrams of gold which is found mostly in our blood by far the largest above-ground stock of gold resides in the secure vaults of the world's central banks in total the top 10 central banks in the world own some 23 000 tons of gold and the imf owns another 2 000 tonnes this equates to around 12 percent of all the gold ever mined throughout thousands of years of history gold's remarkable elemental properties have provided an incredibly stable store of value but those same properties have led many critics to look upon it as a boring asset which they claim in the long term offers low returns at best this viewpoint however completely misses the point of gold's place in a portfolio because perhaps counter-intuitively boredom is actually one of its most attractive qualities well critics argue that it provides boring returns because they're thinking of gold as an investment gold doesn't provide shouldn't provide any return and it's not an investment the reason gold doesn't provide any return is because it doesn't have any risk and there's no return without risk so a hundred dollar bill doesn't provide any return unless you deposit it in the bank at which point it's no longer a hundred dollar bill it's a liability of the bank and you are the creditor with the risk of the bank not paying you back and the biggest risk that it doesn't have which all financial assets have in trump's and that is uh the risk of permanent impairment in other words the risk of permanent loss of value gold price can go up it can go down but gold itself is permanent gold is a is an excellent hedge in times of rising inflation while in deflation it works pretty well but you shouldn't focus on prices then then you should really focus on uh on the purchasing power because if gold goes down 10 and stock prices go down 70 percent it's still pretty good i would say because you're just increasing you're massively increasing your purchasing power if you think about the set of circumstances that allows gold to do well they're always not always but they're often catastrophic circumstances so i would agree with you gold offers boring returns boring returns like 35 in 1971 and what twelve hundred and fifty dollars today if you think about the returns of other asset classes that don't offer up insurance give me that boredom to many people gold is simply a price on a tv screen or a computer terminal and it's often nothing more than the fluctuations in this price in both directions which are used to determine whether owning gold has been a successful investment or not but is this fixation on its price the correct way to think about gold and if not then what is people focus on the price of gold but also people focus on the price of everything this is a product of financialization people know the price of everything in the value of nothing financialization has ushered a period where markets uh price everything and so people can track prices of everything and the value they're worth by the amount of dollar units that they that they have people who are very focused on the amount of money they have should move to japan because they would have a hundred times more money because japanese yen is a hundred to one dollar so if you want to be a millionaire you can do it a lot faster there then you can do it here yes a lot of people uh invest in gold they get very upset because gold goes up or down in price and they think they bought the wrong time or they sold the wrong time of course this is the wrong way to think about it because the reason goals and money for thousands of years is because it's the most stable element and what's really happening of course is the dollar is going up and down in terms of gold not vice versa and it is true uh that you can make it lost some money in speculations fiat currencies do go up in value occasionally in fact even in the middle of the weimar hyperinflation uh the mark would have sudden huge surges higher and people who'd leveled themselves up in gold and basically short of the mark who get cleaned out and this happens today in the gold market too so so people really shouldn't focus on the gold price they should focus on preserving their capital and gold does that gold preserves your purchasing power in fact gold increases your purchasing power over time and and uh it's best not to get too cute uh when you're in a a sinking ship which is what the us dollar is right now i think unless you really understand the structure of the global gold market it's a little bit of a fool's errand to focus solely on the what the price of gold is so for example since 2013 in particular early 2013 we've seen significant flows physical flows out of the west going broadly defined east china in particular and those physical flows have not driven they actually have driven a decline in the price and since late 2013 the price has effectively gone nowhere even as physical flows have moved and so when i say if you focus solely on the price i think you're you're you lose a lot of informational value or the the full mosaic of what's actually happening most people will fixate on the gold price there's a very distinct difference between the gold price and the price of gold the price of gold refers to the cost of putting a coin or a bar in your hand it represents the cost of the physical metal itself meanwhile the gold price has become nothing more than a reference point a number by which any number of paper gold products are priced on a daily basis all around the world but what do we mean by paper gold and why is the astonishing rise of these derivative contracts potentially very very dangerous these are contracts i say paper it's really a contractual relation it takes many forms that give you exposure to the price of gold but don't give you actual gold and there are many of them so what are they a gold future on the comex the commodity exchange part of the chicago american deal exchange show a comex gold future would be paper gold a gold etf a gld is the leading one gld okay so the etf for example i'm not buying gold a lot of people think they are i'm buying a share of a stock that's traded on new york stock exchange that share of stock entitles me to basically price exposure when i sell it i'm not selling it back to the vault i'm selling it to somebody else who wants to buy it paper gold represents gold that is circulated in certificated form so one example of paper gold might be gld the uh etf uh which is a derivative really of gold the trades on the new york stock exchange it's efficient for holders because you don't have to go down to a bullion shop pick it up expose yourself to being mug being mugged and buried in the backyard it doesn't however represent physical gold and for people who are nervous about the financial system the fact that they own a derivative when what they really want is payment in fist is very difficult for them paper gold is basically the futures market i would say um there's huge volume in the in the future of futures markets and my perspective has always been um if you want to buy gold um for safety reasons um to to to to hedge against uh financial disaster or whatever you have to buy physical gold you don't want to have any counterparty you have to have the real thing if you want to speculate with it of course you can buy paper gold but it's just not the real thing the difference between owning a paper contract or claim on gold versus holding the metal itself while seemingly trivial is a hugely significant one the idea of owning a paper claim on physical gold however is viewed very differently in the west than it is in the east after countless episodes of inflation and where the debasement of fiat currencies by governments is commonplace gold is viewed very differently indeed there is a deeper cultural familiarity with gold when i give the sort of gold lecture as an example to young south asian women they laugh at me they say in our culture we have 1500 years experience with gold we have known for a much longer time than you that the government is not our friend that we need a medium of exchange that's simultaneously a store of value my suspicion is that any culture that has less rather than more social trust has a greater affinity for gold because gold traditionally has been something that obviated the need for trust the west did have for a hundred years or or so or longer a very credible governments limited government eastern governments have not had such a happy history of limited government allowing the people to to the freedom the liberty to hold money as they see fit and therefore eastern populations tend to trust their governments less and sensibly so and so i think that the the idea that gold is money uh uh never faded in the east that we did in the west because no one ever trusted uh fiat fiat currency from from those governments uh so it's a lesson that we relearned in the west um i i think fairly shortly but uh but i think that that is an important distinction it's not blanket sort of east versus west on this one because i would say that there's a there's definitely a sort of distinction there between um what i would call traditionally stable countries and traditionally unstable countries because you know i think in singapore for instance or hong kong yeah the older generations you know they they still think of gold as the ultimate form of money it's a sort of safe haven yeah um but the young don't right so they they trust their government's money that is less true um in some of the poorer poorer countries the old have never trusted their currency uh in uh um in indonesia for instance or india they've been right not to by the way and um and the young don't much either that weirdly has served them extraordinarily well relative to the developed world i think the difference between the way the gold is viewed in the east versus the way gold is viewed in the west is is probably at its core a function of history i think it's been for people in the west and people in the u.s in particular it's been a very long time since the u.s has had a problem with its currency a problem with sovereign insolvency it's a part of that's a function of uh you know this exorbitant privilege we've had since since the the gold window was closed in 1971. whereas people in the east have had much more recent familiar personal experience uh with with currency problems with currency depreciation and there's a greater degree of skepticism in the east and like i said more importantly a greater degree of real experience in having these currency depreciation from which gold protected them you know i think the other reality is in the west and i think it's a real credit to policy makers in the west financiers in the west there have been particularly again in the u.s much there's a much greater degree of ability to manage financial asset prices um you know the creation there's a there's a great declassified us document from 1974 from the u.s embassy in london saying you know the creation of a large a very large paper gold futures market would go a long way in managing the price of gold because and it would therefore reduce american demand for physical gold and you know that would be a good thing um it's right there black and white you can see it it's official u.s history uh i just attended a conference in singapore and people don't care about prices they constantly accumulate gold they regard it as as as a currency as money they don't really care about the prices yeah they just want to own gold lots of gold while in the west i think um we tend to buy very pro cyclical um normally if if you follow etf demand for example etf demand always goes up when prices go up yeah so i think it's more momentum driven on the other hand if i compare the attitude regarding gold for example in in austria where i come from or in germany i think in our sort of monetary dna there's still the hyperinflation because our grandparents they basically they lost everything while people in the united states they're still kind of traumatized from from the great depression and from deflation and i think this also kind of explains why our central banks are acting very very differently the chinese in the in in this century have been buying gold they've actually had nothing 12 years ago and today they have bought more than or as much as the annual production of gold every year and then now nobody knows how much the chinese have but they probably have 20 000 tons of gold whatever whatever the split is between central and private we don't know but they certainly have now more gold than anybody else since the first gold futures contract was launched in 1972 there's been a strong move towards paper gold in the west futures contracts and latterly an explosion of etfs have meant there are now any number of ways to own a paper claim of sorts on the ultimate physical asset without actual ownership however this idea of owning paper gold isn't restricted to individual investors over the years even central banks in the west have traded in their physical gold for paper contracts or promises this time in the form of leasing agreements to the so-called bullion banks but why do western investors prefer etfs over physical gold and how could that preference potentially come back to bite them well people prefer tfs for not just for gold i mean we see a massive shift from active management to passive management and i think one of the reasons for that is during the in the stage of financialization you know larger companies larger capitalization companies are on average are doing better than small companies because of economies of scale and because of cheaper borrowing costs and so forth which is again is anti-competitive product of financialization product of the type of system that we now credit-based system that we now have um oligarchical system that we now have and so in that type of environment you know etf are easy they're cheap and they are equities and if you think about gold specifically you have to think of the structural nature of the asset management industry where most managers have all the managers have what's called a mandate which is they have a policy that says what they can buy and what they cannot buy almost all managers have a mandate to buy equities very few managers have the mandate to buy commodities particularly physical commodities and so to buy physical commodity there has to be a whole process of uh approving it through committees and so forth whereas they can buy you know an etf which is just a stock uh any minute of the day and they don't have any issues with that etfs solve a problem that just just doesn't exist i mean you know they they they they bill it as a kind of oh it's so easy you can trade with it through your your uh charles schwab account or something like that oh yeah fair enough but you know charles schwab could easily trade if they if they if they if they weren't getting a sort of kickback of some form or other they must be in some way shape or form um from the etf providers um they could easily they could easily have us as a counterparty and we could we could trade physical gold and instead of having an etf and you know essentially an equity with an underlying relationship with god they could have physical gold right and that's not difficult to do you know it's just it's just a function of looking up on the internet spending five minutes on google and finding a firm like us filling out a few forms and you know perhaps your father's brother kind of thing it's not it's not difficult at all if you're on goal to speculate on the price then of course etf is probably fine if you if you want to own gold as a insurance or as an insurance or as a hedge uh and i don't mean financial hedge i mean a real hedge protection against uh monetary disorder against a financial system then of course owning it inside financial system doesn't make any sense so let's say in the case of gld i don't know what it is today but it's ranges in the 10 range or so so that means that for every 100 shares of gld there's actually 110 shares out there outstanding 10 of which being borrowed and sold short so there are more shares than there are actual real shares and i think that's a pro that's not a problem in the normal market but that's a problem precisely in the type of a situation when you need your gold as insurance so all of these types of risks that etfs bring which are 100 correlated to the misfortunes potential misfortunes of capital markets uh financial institutions and monetary system are precisely why you own gold so why would you want to commingle the two why would you take the risks that you're not going to get paid when the time to get paid comes because of its fascination for mankind gold has always been surrounded by conspiracy theories and stories of price suppression and manipulation that's really no surprise after all wherever you find money you inevitably find human beings trying to cheat in some way or another fake gold bars have frequently surfaced over the years with gold-plated tungsten which has an identical density to gold being the most common substitute fortunately any one of a number of very simple tests will provide a conclusive answer as to whether a particular bar is fake or not gold is unique however the most important questions about possible manipulation of the gold price concern much broader issues and occur at a much higher level well the question about manipulation is is clearly um a favored one people like to discuss this i i do think that um [Music] even a cursory glance at historical fact will lead you in a fairly clear direction i mean it it's not like this is a hidden thing i mean the london gold pool existed it was an overt way of managing the gold price in terms of its of its um price uh it's clearly in the interest of central bank to manage particularly in in the monetary system as it functions right now whether it does function not being a slightly separate point it's clearly in in their interest to to manage the risk-free rates would you influence the gold price well it said the gold is the reciprocal trust in central banks you betcha um with a cheaper gold price notwithstanding the fact that central banks are the biggest holders of gold 60 percent of their reserves are in gold would you want to suppress it you betcha the problem's too big are they doing it i don't know is the answer but money there's almost a racing certainty they probably are others however are far more confident not only as to the question of whether the gold price is manipulated but also who the culprits might be well the gold price is absolutely manipulated when i say that i'm not you know implying some deep dark conspiracy i don't think janet yellen wakes up in the morning and thinks about gold i don't think johnny yellen knows anything about gold to be honest i mean she's sort of a geeky liberal labor economist who worships the phillips curve so i don't think janet yellen is behind some conspiracy to you know suppress the price of gold but there's absolutely manipulation and i've spoken to uh several experts one is a phd statistician so it's not a phd in economics it's phd in statistics works for one of the largest hedge funds in the world he looked at a 10 year time series and he took like literally tick by tick information on the comex gold future for 10 years and he said there is no explanation for this data other than manipulation it could not possibly have happened through normal market forces in particular he noticed that at the end of the day like on the last trading tick uh on the comex the price of gold got smacked down and then at the open the next day it could kind of pop up again so he said well this is the easiest trade in the world just buy gold right after the close and sell it the next morning you know just before the open and you'll just make consistent steady profits well anyone knows anything about about markets and uh how they operate knows that you cannot make consistent steady profit this is what bernie madoff said he was doing right so he said the probability that the price naturally goes down at the close and naturally goes up the next point is zero after 10 years and this is not inference i mean this is like dna like you know you may not see the crime being committed but if you have the dna evidence you can be pretty sure who did it governments everywhere throughout history have wanted to manage it it's a critical national security you know whether you go back to the time of the romans etc value of a currency is very very important to manage particularly if uh you're a government that hasn't managed your finances all that well um and unfortunately that is over time most governments sooner or later find themselves in that position and so the manipulation is right there in the open and that it it is a creation of a of a derivative market that satisfies demand that would otherwise go to physical and that that was the goal of setting that up and that's not well understood i don't think by many market participants but as i said it's there in black and white in the historical archives when you see gold trade the way it trades when it drops you know someone sells three billion dollars worth of you know notional futures at 2am new york time um you know having been on wall street for 22 years i know for a fact that if any buy-side trader would execute an order like that on any consistent basis they'd be out of a job very very quickly you know they're they're clearly somebody not trying to get best you know best execution and and if they're not trying to get best execution what you're talking about the currency intervention basically uh and so you know who is doing that is that originally the us government had a very strong interest in managing uh the person either the perception of the dollar through gold yeah there was a you know famously in the late 1990s eddie george an official with the i believe with the bank of england in uk he famously said we looked into the abyss you know if the gold price continued to rise it would take it would have taken down one major trading house and and a number of others would have followed and so there was a you know there is a sign there that the banks at that point had gotten involved in you know gold financing that have left them short gold in a way that any real rise in gold would have you know you know led to an existential threat to to them yes i think the price of gold is manipulated and i think it's manipulated in a number of ways i mean certainly there is a a concerted pr campaign against gold by central banks for the reasons that that we've discussed you know they they it is very specifically in the status and central banker kind of interest to ensure a a weak gold price you don't want to see essentially the gold uh price de facto recreating a sort of reserve currency by by just being incredibly strong so there's a there's a constant barrage of negative publicity towards the gold uh the gold industry when it comes to specific manipulation of the gold price yeah i think that that is is probably likely to i mean i can't the problem is we can't actually tell because of the way central banks don't um you know are very very opaque with what they do with their gold holdings and particularly their gold swap positions but i think it's likely and the reason why i think it's likely is because they've been manipulating other markets for a very long period of time now historically hedge funds were not players in gold there was a few specialists but you know they're doing stocks bonds whatever well they've sort of glommed onto gold to them it's just another commodity it could be coffee beans soybeans lumber who cares it's a thing to trade well if you're if you're short gold like you've done some derivative contract with goldman sachs in your short it's easy to paint the tape i mean painting the tape just means manipulating the market through the gold futures market now the other day well recently a few weeks ago somebody sold 60 tons equivalent of paper gold now i i make the point they didn't sell 60 tons of gold they sold gold futures contracts that were equivalent to 60 tons but i can sell 60 tons of paper gold with a phone call to my broker all i need is a brokerage account they gotta put some margin like five percent uh but that it drove the price down i forget i think twenty thirty dollars an ounce in in a matter of minutes um and so uh if i'm short over here on the derivative side and i dump the gold here and the price goes down and then all of a sudden i make money over here or maybe i want to go long and i want to dry the price down and then buy at the bottom and ride it back up again so perhaps unsurprisingly hedge funds and bullying bank traders push the gold price around to try and make profits but while gold remains a strategic asset which sits at the foundation of many nations balance sheets there are players far far bigger than hedge funds who don't care about making a profit but who have much broader and far stronger motivation to suppress the price of bullion the the important question is who's doing it and why um there are and the question i ask is why is it not being investigated by the regulatory authorities by the commodity futures trading commission et cetera now one possible answer to that is that the chinese are behind it and they're outside the jurisdiction there's no way that a u.s government agency is going to investigate the activities of china in our markets china's too big their sovereign nation that would not go anywhere um there could be a million diplomatic and national security and other reasons for not messing with china in that dimension so china's my number one suspect because people go wait a second they got all this gold why would they want the price to go down well the answer is they're still buying ultimately they're going to want the price to go where it's going to go which is ten thousand dollars an ounce or higher but they don't want that now because they're still buying they're playing catch up with the united states and by the way they've bought thousands of tons which is a lot of gold but they have thousands of tons to go to equal the us in the golden gdp ratio we're either in the absolute sense to get to 8 000 tons or in the proportional sense gold to gdp either way they're still playing catch up with the united states but not every gold market veteran buys into the idea that the gold price is subject to manipulation it has to be said some of the reasons they offer as to why the idea of a state-sponsored price suppression scheme may be far-fetched are both simple to understand and hard to argue with i think that all financial markets are manipulated from time to time unlike many of my peers in the gold business i have seen upwards price manipulation when that is easier long-term manipulation requires a conspiracy of a size that i don't think is possible the idea is an example that the u.s government the trilateral commission and the international jewish conspiracy whoever they are could come together and do a decade long manipulation in gold forgets that the u.s government can't educate the kids it can't deliver the mail it lost the war on drugs it lost the war in poverty it lost the war in vietnam and lost the war in afghanistan how on earth could they organize a broad scale manipulation when they can't even manage their own campaigns most governments eventually wind up manipulating the gold price to protect their own power so certainly a possibility i i've never seen any hard evidence of that and also i would say that it is the nature of gold to underperform other assets in a credit bubble you don't need a nefarious federal reserve uh pushing it down because that's what happens naturally incredible everything else goes up in terms of gold and of course when the bubble ends it must uh things crash in terms of gold that is a natural thing and it's really what we saw over the last 40 years when i mean for example from 2000 to 2008 bill went up in nominal prices it went down in terms of oil and other commodities so in fact it did very badly uh in real terms uh when when the bubble had popped in 2008 and nine gold did fantastically well in nominal and real terms and then bernanke managed to uh blow a bigger bubble and so it's no really surprise that gold did badly during that period now it was with the fed manipulate downwards i mean it's possible but we don't need that as a theory but why would any suppression of the gold price be so important and what might happen were it to be both exposed and shut down in january 2018 a group of traders working for the big bullion banks became the latest market participants to be fined for trying to manipulate precious metals markets a patent that has been commonplace over the years but this proof of price manipulation in the gold market like many similar episodes which have gone before it had no meaningful impact on the price however any manipulation in the gold market like all price suppression schemes will ultimately come to an end at some point and when it does the potential ramifications are enormous all manipulations fail at the end of the day they all fail the 1968 london gold pool failed late 1970s u.s and imf dumped uh sorry 1700 tons of gold in the market it failed the price in 1980 was higher than ever uh late 90s we twisted uh the uk's arm got them to sell over half their gold um now they're stuck uh early 2000's it was switzerland's town we got them to sell about 2 000 tons but the problem is we have now run out of suckers to sell the gold in one day the holders of paper gold will realize that they will never get delivery because there ain't any gold to deliver against it and they will sit there with a piece of paper and whether it's comex or the bullion banks would uh you know all the people dealing with they will default and at that time there just won't be any gold available and the gold price will obviously shoot straight up and it would be very hard to buy gold one of the core lessons of history is that the market is more powerful than governments and when this bubble we're living it currently pops it doesn't matter how much they try to manipulate it gold will not be manipulated to that extent so it will break out whether they're manipulated now or not alongside conspiracy theories and stories of manipulation gold's history is filled with wonderful illustrations of how much it means to mankind the extraordinary importance placed on protecting it and the sometimes deadly lengths people will go to in order to possess it in september 1939 as the german army advanced towards britain the government decreed that every person living in the united kingdom registered their gold with the royal treasury just weeks later on the 7th of october 1939 hms emerald set sail from plymouth in great britain for halifax nova scotia the reason the hull contained millions of pounds of gold bullion bound for the usa to pay for american war materials twelve months later with the war going badly for the allies and the battle for the north atlantic at its fiercest prime minister winston churchill used emergency wartime powers to seize the gold the citizens of the uk had been forced to declare the previous year the gold was moved to the port of greenwich in scotland in secret reloaded onto hms emerald and then dispatched to canada so if the british were to be overrun by the advancing nazi forces they would still have the means to continue the fight one week later another convoy set off on the same route this time carrying 1.7 billion dollars of gold today that goal will be worth over 29 billion dollars in all almost 30 billion dollars of gold in today's money were shipped thousands of miles in treacherous seas and through a gauntlet of u-boats without a single ounce being lost it was the single greatest and perhaps most dangerous movement of wealth in history stories such as the daring evacuation of britain's gold during world war ii are well documented but alongside such historical tales there are legends surrounding missing hordes of gold that have fascinated treasure hunters since time began one such legend centers around a notorious japanese general and a hidden gold stash which today will be worth billions the legend of yamashita's gold has endured for over 70 years and to this day attracts treasure hunters from all over the world who journey to the philippines to search for billions of dollars supposedly looted from all over southeast asia by general tomiyuki yamashita the notorious tiger of malaya yamashita's army stole gold from bank vaults depositories and commercial premises as he cut a swathe through asia with the japanese government intent on using their ill-gotten gains to finance their expanding war effort the gold reached the philippines on its way to singapore from where it was to be shipped to japan but with the war in the pacific escalating and the us navy and the ascendant it became impossible to move the goal instead it was supposedly hidden somewhere deep in the philippine jungle many of those who knew the location of the hidden treasure were killed during the war and yamashita himself was executed for war crimes in february of 1946 without giving up the whereabouts of the eponymous stash in the intervening 70 years hundreds of fortune hunters have sought yamashita's gold a treasure hunter named rogelio roxas filed a lawsuit in hawaii against former philippine president ferdinand marcos who he accused of stealing the gold but even that has failed to stop adventurers applying to the national museum of the philippines for a treasure hunter's permit roxas lawsuit resulted in what was then the largest ever award made by a court 40.5 billion dollars including damages however the amount was reduced on appeal to just 13 million dollars roxas however died mysteriously on the eve of the trial and so never saw his treasure hunt come to its conclusion the lawsuit concluded that roxas found a treasure but that the treasure in question may not have been that of yamashita the technicality which has been enough to maintain a steady stream of would-be indiana joneses heading for manila the colorful history which plays such a big part in mankind's attachment to gold stands in stark contrast to the situation facing us in the present as the world's ever-increasing reliance on debt to sustain a creaking monetary system threatens to bring the financial world as we know it to its knees in episode one we looked at how the gold standard worked and more importantly perhaps how it was ended by richard nixon on august the 15th 1971 but is a return to the gold standard a possibility and if so what would a reimposition of financial discipline mean for the modern day monetary system why is this a source of contention for so many people it's a source of contention for people who like debt in other words governments banks people who like to live beyond their means so for them it's a source of contention because gold makes it impossible to borrow more than you can afford to repay whereas with fiat money you can essentially borrow without limit and then print the money to pay it back so it's bad for people who make money from producing additional money like banks fractional reserve banking bad for central banks bad for governments who like to wage wars and pay for them with you know tickets that they print in unlimited quantities but i think it's good for everybody else it's good for savers it's good for people who want to know that they can save money for retirement and that money be worth the purchasing power have the purchasing power that it had when they were setting it aside having some sort of gold standard is is very it you would have a lot of antipathy towards that because that prevents you from fighting a war anytime you want it prevents you from promising you know medicare part d anytime you want it you know all of these things that um you know keep you in washington or keep you really in any country for that matter but in in particular given how the currency system has developed over the last 30 40 years um you know it's only the u.s that has exorbitant privilege there's the way the system is structured there are other governors or breaks that exist for other countries that have not existed uh for the united states uh for a long time and i think that that ultimately is why there's such a high degree of um establishment you know antipathy towards towards uh towards the gold standard interestingly when central bankers talked with the gold standard they seem to be vaguely aware of his benefits what they say is that its costs are too high and what are those costs the costs are that the fed and the government can't manipulate the economy the idea is that under the gold standard uh you'd have terrible depressions and employment would be you know very very high levels and there's nothing government could do but and that cost too high because the government can now stabilize prices and of course this is absolutely crazy because what created the bubbles in the 19th century in the early 20th century were not was not the gulf standard it was the banking system it was a flawed bank the fraction fractional bank system by its nature blows bubbles and collapses not gonna do with gold whatsoever in fact as we've seen when they switch the world from a goal center to a dollar standard we still get bubbles and they're worse than ever were so it's the stabilization that makes the problems in fact during the great depression in the 1930s hayek wrote that it was the stabilizers in the 20s that created the problems that they didn't let the market clear they tried to keep prices too high so i it wasn't it wasn't the gold that did it the gold standard that did it it was the bank system that made all these bubbles but uh it so it's it's beyond bizarre to see ben bernanke get up and blame gold for all the problems that the bank system he was managing and now yellow manages is responsible for all these problems i don't think sufficient gold in the world in our current position to be able to support it not without a readjustment in the gold price i think someone came up with a figure of 35 000 an ounce um the argument clearly for it would be that it would force upon the regulators the official institute the central bankers in particular discipline in terms of qe i suspect that there will be some moment in time uh rebalancing i think they're using the word reset nice soft word personal word like reset that will occur in the next short few years and that something new will evolve and it might involve linking gold partly to gold or something else i think that there'll be a lot of pressure on central banks to create a new currency that is linked to something that can't be queued and created out of thin air you can't print this stuff once called a barbarous relic by john maynard keynes gold is the oldest continuous medium of exchange known to man so what a reset of some sort seagull continue to hold its position and remain the cornerstone of the modern financial system in recent years the emergence of cryptocurrencies such as bitcoin has ignited furious debate about gold's future in the monetary system with many believing that crypto currencies finally obviate the need for gold the most likely future however is not a case of when it takes all do i think that there's room as a medium of exchange for an algorithm that also obviates the need for trust is seamless and private like bitcoin absolutely do i want all of my savings stored in a unit of value whose only value is an algorithm no i as a consumer of currency want lots of currencies and i want to pick and choose the utility at different points in time in my career for different purposes with regards to my life and my family's life bitcoin and gold other competing faith systems the nice thing about cryptocurrencies is that nobody owns in the sense that it's a democratic arrangement through the distributed ledger we all own the ownership of the bloc and you can then buy parts of it bits or touch the chain in other words you can't qe it it has a discipline inherently built into the system the problem is it's not to use it's not a medium exchange and quite probably the regulator won't like it either it's challenging the position of the other cash guarantee which is cash gold of course is yet another faith system uh why is that worth 31 000 pounds who says it's worth 31 000 pounds well the answer is up against this particular number let's make it 31 000 pounds you've got hundreds of thousands of people who are looking to buy at a price just below that and people looking to sell just above that in other words you've got a huge weight of argument on both sides of the bid on the offer to give it that price and a shift of perception politics will shift the numbers of people and so the price is confirmed or authenticated by the weight of numbers of people trading it i don't think governments will introduce these things you know as a general rule so the only way i could see gold really um re-emerging in the currency system and it's the cryptocurrencies are have been fascinating for this is is is through some form of market driven reintroduction and that's what the cryptocurrencies offer right and they really do because that because now we we don't need central banks for currency clearing internationally we don't need um uh you know large massive banking banking institutions in order to settle trades we don't we just don't need that we can do it across the phone these days we can do it through cryptocurrencies and i think you know there is a much much much more efficient uh currency waiting to happen that involves yeah a cryptocurrency that sits on your phone that you can trade with anyone in the world you know at zero cost and the underlying um the underlying sort of ledger based entry is gold sitting in a vault in somewhere like singapore or somewhere like switzerland or somewhere somewhere safe where the government's not going to steal it and you know if you look at that the whole monetary system based on essentially gold in a vault essentially like the gold exchange standard i could see that emerging and i you know i'm very very very excited by what um by what cryptocurrencies offer not just the gold world but but the whole world economy as a result of this because if you see um the widespread adoption of a gold-backed cryptocurrency that is you know that people have confidence in then you're going to see an awful lot of change i think it's it's it's a fantastic development that we're seeing at the moment first of all because people are actually discussing what is money again they really care about those topics here they they they research it they're they're they're arguing they're discussing it on twitter on facebook and whatever i think that's that's that's great yeah there there should be competition of currencies and i know that with all those icos now when i heard initial coin offering for the first time i thought it's a joke yeah it sounded like ipos in back in the days and there's 95 of it is probably probably probably rubbish here and they won't be around in one or two years but i think with bitcoin um being created pretty similar to gold because of the stock to flow flow ratio with the inflation rate that is just given um i think with so much intervention in in in in the whole space i'm meeting so many brilliant young people that only see opportunities well if you go to a conference in the in the finance industry people say okay there's compliance and risk management and there's new legislation everything is just so much administrational work and when you talk to those young developers in the crypto space they're only seeing opportunities they're excited yeah there's so much innovation going on and i just love that and i think that many many industries especially the banking industry they will get disrupted um and and i think for for um for for gold i don't regard it as a competition because honestly i know many people that that understand bitcoin and they say gold is totally fine yeah charlie morris once said that um bitcoin is electronic gold something like that there's lots of similarities um so so i think basically a combination of a cryptocurrency uh and physical gold and there's lots of projects at the moment yeah this will probably be the future and i i'm really looking forward to that so in in a world that is clearly moving towards frictionless payment uh whether it's whether it's whether it's a crypto outcome or whether it's just the blockchain solution to all these cost problems delays etc and payment it does look very obvious to me that we're heading to some form of unit that everybody uses everywhere so what i think can happen if we if if people work it out properly and this clearly is not going to be the state's preferred solution but you know gold refers to its traditional role as the money of the people rather than paper being the money of the state and the corporations um and once its price is revealed in other words once people remember what gold is what its role it is what it's always been what it can be again then i think that pure mass will become uninteresting so i think that the cryptos will become basically i think they'll fold into a gold and silver transmission on the blockchain thus far cryptocurrencies have yet to be tested in the white heat of a financial crisis whereas gold is the one asset which has survived every single panic in recorded history intact in 2008 gold's price fell initially surprising many but the reality was that gold was providing liquidity in an illiquid marketplace once market stabilized and qe began in earnest gold's price soared but how can we expect gold to act in the next financial crisis so i think it's very i think it's very difficult to speculate on what is going to happen to gold and what's going to happen to um to how it's going to happen but i think what is safe to say is that gold is inversely correlated to confidence in the financial system and the fact that gold is independent from the governments from the banking system is what crea and scarce is what creates a tremendous potential uh value i don't think we're going to have another 2008. i mean we're going to have something that's different from 2008. the reason i don't think necessarily that's going to be the same is because the problem that 2008 revealed which is excessive debts and excessive leverage has essentially been kicked upstairs on the to the sovereign level and so what was a private debt crisis is likely will come back as a sovereign debt crisis which is a completely different animal with very different uh parameters so whereas a lot of people are telling me now i hear a lot of people saying well the banking system is much safer because the leverage is lower because there's less rehabilitation the answer that well that may be true but if the currency in which they measure everything is debauched is debauched or devalued and that may happen overnight in a very different way that what happened in 2008 happened we know the end game we know that all of these debts cannot be paid we know that the unfunded liabilities cannot be met in in terms of real purchasing power so then the question is how does that gets resolved well there are only a couple of ways it can get resolved is either through inflation or deflation deflation meaning defaults in the likely event that we do have some form of situations similar to that of 2008 and no matter what form that event might take gold remains one of the few ways that you can protect yourself and preserve both your wealth and purchasing power man's connection to gold is not just a financial one however history is filled with deeply personal stories that demonstrate gold's role as a store of wealth as protection from government confiscation via inflation and debasement and as an insurance policy that when called upon pays out in ways that change the lives of those who own it i know a person who grew up in vietnam whose father was a translator for the us military during vietnam war and when the u.s left vietnam they were unable to leave with the united with the u.s forces and so they were left behind and having been left behind they obviously were subjected to oppression by the communist regime it so happened that the family of 14 one of the uncles there was a dentist and he was able to accumulate over the next whatever 10-12 years a certain amount of gold so that in the late 80s this family was able to pay seven ounces of gold per person so times 14 over 100 ounces of gold to get 14 seats on a boat that left saigon in the middle of the night lost power and the next day drifted at sea for a few days and eventually was towed to the malaysian coast by the malaysian coast guard they spent two years in a camp for displaced persons they eventually made their way to singapore where the father was able to go to the u.s embassy present his credentials showed that he was a translator for the us for interpreter for the u.s forces and the whole family of 14 was given these visas to come to the united states and that's you know these people's lives were saved uh and what did it do it's you know what did it take it took seven ounces of gold per person for a family of 14. and so i think that's as good an example of gold being plan b as i can come up with a couple years ago i was at a wedding and some friends of ours i was talking with some friends of ours and they were they were russian and ukrainian and had emigrated here uh we're now american citizens and we got to talking about what happened in the 1990s in russia they described to me the woman my uh her father had been a doctor in her village in the ukraine and she said we'd had enough saved in the bank we were the richest family in the village and we had enough in the bank to buy five cars which for her apparently for that village was quite a bit and she said they they closed the banks for two weeks and when they reopened the banks we took the money out we bought groceries for one month and you know the uh her husband uh said yeah similar story i was saving up to buy a motorcycle and uh had enough save to buy a motorcycle and my dad wouldn't let me buy it closed the banks for two weeks banks opened back up i took the money out and bought a carton of cigarettes so i said to them i said so i probably don't need to explain to you i said how did gold do and they both laughed and they said anyone that had gold silver jewelry they did they did totally fine i love the story of how the french spirited their gold out of france and off to canada and various other places when the when the when the germans arrived it's a great story and they have to make a movie out of it i mean it's really good and basically what i mean they split up their gold reserves into into tiny little portions and they went off on you know mule carts and fishing boats and and they they got their nation's wealth out of the country and they did it before the advancing army i mean it was it's a it's a story of daring do and all of that sort of stuff fantastic i once heard a story about the soviet union um where gold obviously was was forbidden you could go to jail if you had physical gold but you were allowed to have wedding rings gold wedding rings and that was a smart guy and and he had like 50 wedding rings so every month or every couple of months he went to the market and had just enormous purchasing power due to his gold ring and i think this clearly shows that that you just have to own at least some gold elemental it may be but gold is also a complex and confounding subject which has fostered passionate debate since the dawn of civilization hopefully over the course of our journey we've helped you understand a little better why gold has been money to man for thousands of years the complexities that make it worth over a thousand dollars an ounce the way it's bought and sold around the world and its place at the heart of the modern day financial system our aim hasn't been to persuade or change minds but rather to explain how this lump of yellow metal became the object of so much fascination and why it remains many thousands of years after its discovery the one universally accepted money we hope we've shed some light on some of the mysteries surrounding gold and helped give you a better idea as to its role in storing and protecting wealth but when all said and done whether you or i individually believe gold to be money or not is completely irrelevant gold has stood the test of time providing a stable store of wealth to mankind for millennia and as we look to an increasingly uncertain future with fiat currencies across the globe under siege from rising debt levels it remains the only money guaranteed to [Music] survive [Music] [Music] you

Channel: Moconomy

Views: 17,314

Keywords: documentary, gold mining, gold documentary, gold standard explained, history documentary, the power of gold, gold standard, gold investment, gold, economy documentary, gold price, paper money, fiat currency, history of money, fiat money, gold asset, money system, money documentary, gold money, story of gold, history of gold, gold history, gold story, documentary money, documentary gold, the story of money, history of money documentary, the history of gold

Id: HH28Ul7yL14

Length: 60min 34sec (3634 seconds)

Published: Wed Dec 23 2020

Reddit Comments

[u/47Ag47]

Rick Rule says there is no conspiracy to suppress gold prices, but JPMorgan was fined for manipulating gold prices. Am I not understanding some nuance of the ruling against JPM?

[u/stackshiny]

There are some estimates China has LONG surpassed the U.S. 8,000 tonnes level.

Alasdair Macleod postulates China bought up around 25,000 tons between the mid 80's through the mid 2000's. Simon Hunt puts them north of 30,000 tons. Others say 35,000 tons.

No one will know, until China wants them to know.

[u/happitrigger]

Sorry, but the proof is available just in german language:

https://www.amazon.de/Geheime-Goldpolitik-Zentralbanken-Goldpreis-steuern/dp/3898798372/

This book from Dimitri Speck gives proofs of goldprice manipulations, not hearsay or maybe, Dimitri proofs it!

Good video, i'll watch it maybe full. I can hear this understating, nothing to see move on.. haha why did every central bank buy more gold since 2008 if anybody needs it?

[u/andybkk13]

Everyone should listen to Grant Williams if you are a stacker.

[u/[deleted]]

China 😨. Maybe the US Treasury exchange stabilization fund

[u/92341711Aa]

Like Rickards and Rule but they couldn’t be more wrong on previous metal price manipulation.

Maybe they know the FED & other central banks, the bullion banks, COMEX, LBMA, CFTC, CPM Group, MSM etc are just parts of the establishment apparatus in suppressing the price of gold & silver but can’t speak the truth.

[u/andybkk13]

I meant in general.

[u/brain_injured]

I’ll check it out later

[u/snowy3x3s]

I believe it has something to do with population size.....some expert analysts say China has over 30,000 tonnes. I believe that this is probably true. Of course, their pop is four times bigger than the USA......anyone?