Using Gold as a Liquidity Sink

Stijn Schmitz welcomes Matt Smith to the show. Matt Smith is Co-Author of “The Preparation” and Host of “Doug Casey’s Take” Podcast. The conversation centers on the current economic landscape, with a particular focus on gold, monetary policy, and potential global financial reset. Smith discusses the unprecedented rise in gold prices, noting it has topped $4,040 and suggesting this bull market is unique. He believes the United States and China may have an unspoken agreement to use gold as a “liquidity sink” to manage massive economic challenges, particularly the enormous $175 trillion in unfunded liabilities.

Smith argues that the current gold price surge is not just about preservation of capital, but potentially wealth creation. He points to historical comparisons, such as housing prices measured in gold terms, which have dramatically shifted over the past decades. Morgan Stanley’s recent recommendation of 20% portfolio allocation to gold underscores the metal’s growing importance. The discussion explores broader geopolitical and economic trends, including potential monetary resets and the role of critical minerals.

Smith is skeptical of traditional higher education, instead advocating for a more experiential learning approach outlined in his book “The Preparation”, which he co-authored with Doug Casey. Regarding gold and precious metals, Smith believes we are in the early stages of a significant market transformation. He sees gold as uniquely positioned to serve as a monetary reset mechanism, with potentially dramatic price increases ahead. He suggests the price could reach extraordinary levels, as part of a broader economic recalibration.

The conversation touches on various global economic dynamics, including trade wars, critical mineral strategies, and potential geopolitical shifts. Throughout, Smith maintains a pragmatic yet cautious perspective on current economic trends, emphasizing the potential for significant structural changes in the global monetary system.

Timestamps:
00:00:00 – Introduction
00:00:55 – Gold Market Trends
00:05:12 – Liquidity Sink Concept
00:10:20 – U.S./China & Brics Currency
00:11:56 – Tariffs and Tactics
00:14:00 – Stablecoins and Latin America
00:16:35 – Portfolio Gold Allocation
00:21:29 – Miners and Junior Equities
00:24:33 – Critical Minerals Investments
00:31:05 – Geopolitical Conflicts Analysis
00:37:07 – Deep Sea Mining Doubts
00:40:00 – New Book ‘The Preparation’
00:48:09 – Wrap Up

Guest Links:
Amazon Book: https://tinyurl.com/ThePrepMS
X: https://x.com/mattpheus
Substack: https://www.crisisinvesting.com/
Podcast: https://share.google/I5YdX8JrTrMWhobOM

Matt Smith is the guy that does the podcast with Doug Casey. In a past life – Founder of Royalty Exchange, a jobs portal in the late 1990’s, an ad agency, a marketing analytics business, and several niche publishing companies. I live on a ranch in Uruguay.