right hello and welcome back to campbell finance i'm your boy camel and today i want to be making the case for a five figure gold ounce um if you're not already following us on twitter please do so and of course subscribe to the channel if you haven't already so let's get into this i want to start with the technicals we've got an enormous cup and handle which i want to talk about if you don't know what cup and handle is it's a chart pattern that looks a little bit like a teacup we have this cup
base forms uh a handle period of consolidation and then a breakout which leads to higher prices this generally is a high performing pattern in fact it's ranked number three out of 39 um so this is a very high performing pattern so therefore it'll be reasonable to expect that we that this pattern does resolve to the upside um i want to point something else out the important thing to take into account here and this is this old saying this old adage of the longer the base the higher the space and what this refers to is the
longer period of time that we spend forming this base then the higher we can expect it to go and also a long base leads to a much longer and stronger move when it does finally resolve so with that said pull this gold chart up i've been i've shown this chart a few times short term i think we're still working on this breakout retest um it's in no man's land for me short term and it's friday so we'll be looking to see what happens on monday and not looking to take on any weekend risk unnecessarily but
the point i'm trying to make here is if we go to a weekly chart and i zoom out a lot what we'll notice straight away hopefully is we've got this enormous cup with handle pattern forming and it's already broken out so we could expect that this is likely going to be the start of an enormous bull market for gold it's also worth noting as i just mentioned the longer the base the higher we can expect it to go this is if you look at the date scale down the bottom this is a decade long cup
and handle it's the largest one i've ever seen um let me know if you know of a bigger one than this i'll be really interested to see it but given that this is a full decade over a decade of of basing then i think it's more than reasonable to expect to see us move well up into this region here i'm going to be pointing to a few other factors now that back this theory up um first of all i think we need to cover naked shorts um and explain what has caused why hasn't the price
gone where it should have gone sooner originally it was jewelers and goldsmiths that worked out this little trick so many many years ago jewelers and goldsmiths would be the people that had the vaults the security the ability to store gold and so what they would do is they would agree to store people's gold for them um since other people couldn't couldn't store it as safely and securely as as these uh goldsmiths could um and it was the goldsmiths that worked out a couple of hundred years ago that um no one not every single customer would
come to collect their gold at the same time so people would go to their local goldsmiths and hand over their gold and agree to store it in a in a secure vault the goldsmiths would issue a sort of paper claim on this gold and iou if you will and then the people would take this iou their paper claim home with them and be happy that their gold has been securely vaulted and looked after very quickly the goldsmiths worked out that since not everyone shows up at the same time to collect their gold they could actually
spend some of the gold and then when people came to claim their gold with their iou it didn't have to be necessarily the exact same piece of gold that they were given out of the vault um and and thus this this ability to have more claims on gold than actual gold um this sort of scam was uh was formulated um fast forward a bit to banks and bullion vaults and uh they figured out the same trick they could charge people for gold for holding gold in their bullion vaults and issue paper claims on this gold
but not actually have a one-to-one backing so more than one paper claim on the gold can exist per ounce of gold um fast forward a few years and this and this becomes standard practice now however this has gotten well out of hand and the paper to gold ratio might be as high as a hundred and nine to one meaning for every one ounce of physical gold that exists in the world there are 109 paper claims to that one ounce of gold i have here the source of this claim uh papers are gold ratio you can
see the sources usgs gold exchanges so with all that said the next thing i want to talk about is bazel three what is bazel three well basil three is a comprehensive set of reform measures in banking prudential regulation developed by the bazel committee on the banking supervision to strengthen the regulation supervision and risk management of the banking sector what did you just say camel yeah i know um why bazel three regulations are poised to shake up the gold market well really the point i'm trying to make here is that this is all to do with
a net stable funding ratio so what is a net stable funding ratio so this is a liquidity standard that the banks must follow to ensure adequate stable funding to cover their long-term assets this ratio is known as the amount of available stable funding relative to the amount of required stable funding which should be equal to at least 100 percent on an ongoing basis so as of now i believe their funding ratio they only need to hold somewhere in the region of five to ten percent um of physical gold to the to the amount of paper
claims on this gold um so this with these new implementation of bazel 3 the net stable funding ratio will require them to actually hold a much closer number of physical ounces of gold per paper claim so the point i'm actually trying to make here is that the number of claims on the gold uh currently sitting over 109 claims per hour should start to reduce and this also means that they won't be able to just short the market and put selling pressure on the market without actually owning any gold in order to suppress the price longer
term it's also worth noting that under bazel 3 under this new regime physical or allocated gold like gold bars and coins will be reclassified from a tier three asset which is the riskiest asset class to a tier one zero risk weight this puts it right alongside cash and currencies as an asset class so we are moving from a speculative asset class to a hard currency a hard form of money the it's worth noting as well the implementation of bazel three has been uh deferred to the first of january 2023. it was supposed to go live
at the first of january this year um but to be honest given that they've got so many paper claims 109 or so per ounce i'm i imagine that that's not something they can just that's not something they could just suddenly fix um so they're probably going to have to do an awful lot of heavy buying of gold and try to get this ratio back under control you can see that they are actually moving towards buying all this gold because um as of in 2021 central banks continue to buy gold um and central banks across the
world now hold more than 35 000 metric tons of gold and that's about a fifth of all the gold that's ever been mined so if the people debasing the fiat currency and the people that are in charge of this whole monetary system are buying gold um wouldn't it be smart to follow them is my argument or at least one of my arguments so in summary bazel 3 is the implementation of bazel 3 is almost certainly going to reduce the selling pressure applied to the gold market and will ensure that there's a bid underneath the physical
gold asset as the central banks continue to buy physical gold and add it to their reserves and to their balance sheets what next the u.s national debt what is it currently the u.s national debt is currently over 30 trillion um yes really 30 trillion that is a three followed by 13 zeros three six nine twelve thirteen um let that sink in for a minute that's trillion with the t so um how are they gonna service this debt well they could raise rates and you can see if you've been following the markets lately you'll know that
they have started to increase interest rates um the problem with this is the markets are too fickle the stock markets are too fickle for them to continuously raise rates as they do go through a rate a rate hiking cycle and they continue to raise interest rates something will break like the stock market for example and as stocks respond to this by crashing the fed which holds an awful lot of assets on its balance sheet those assets will depreciate and then it will trigger an issue for the fed in that the fed has a ratio that
is mandated to maintain it's not allowed to have a certain amount of debt relative to its assets so as its assets depreciate as a as a reaction to the rate rises um they will violate their mandated ratio of debt to assets and therefore they will go i have no choice but to reverse these rate rises and therefore go back to printing more money quantitative easing as they like to call it and then pump that money back into the markets in order to prop them back up so my argument here is that whilst we might see
rate rises in the short term all paths eventually lead to them having to print more money and each time they print this is exponential they they do not just print a little bit to get themselves out each time they have to print money they have to print more money than they did the time before that means that the fed can continue to inflate the debt away this is their only option to print enormous amounts of money and to inflate their debt in order to make it more serviceable and so the impact on gold is when
you have large severe amounts of inflation when you have hyperinflation possibly gold a hard currency that has a nominal inflation rate you can't just magic gold out of thin air um it does have around a two percent a year inflation rate because they are still mining it more still comes out of the ground but it is a far harder currency than uh paper currency such as the the fiat system like the dollar or the euro or the pound um and as such usually responds very well in times of high inflation it's worth noting that with
all of this said price suppression and in future inflation to come this uh this national debt clock has done some calculations and uh we see that the the dollar is a gold ratio right now based on the amount of printing that they've done and if there was no price suppression at all we should be around eighteen thousand and five hundred and ten dollars per ounce and you compare that to today's price of sub two thousand dollars and uh i think there's a an enormous opportunity here um the last point i want to make is that
russia is paving the way to a global gold standard um this has been in the in the news recently that uh russia has made a case for owning gold and nobody really noticed they've um they announced that they had backed their russian ruble um so that it was backed by gold uh in the region of i believe 5 000 rubles per gram of gold um and this is going to have an enormous impact on the fiat system um russia is happy to accept it said it's happy to accept other national currencies such as yuan lyra
or whatever else um or they would be happy to accept hard currency and that for them no longer means u.s dollars this actually means gold so the dollar ceases to be a means of payment for russia in their own words it's lost all interest for them and they even went as far as to call the greenback no better than candy rappers which it's kind of funny and it's kind of not isn't it but to be fair to them 80 of all dollars in existence were printed in the last 22 months um they've increased their monetary
supply from 4 trillion to 20 trillion 4 trillion in january 2020 to 20 trillion in october 2021 so they really are in a sense no worth no more than the than the candy rappers that the russians were referring to um if you can just create if you can just expand the monetary supply the total amount of fiat in existence from 4 trillion to 20 trillion in 22 months then how is that something that you can consider has a lot of value you can see the russian ruble here against this is the dollar against the ruble
so as this goes up the dollar is getting stronger and there the ruble is getting weaker and you can see that during the invasion of ukraine the russian invasion of ukraine the uh the ruble plummeted against the dollar and it's manifested as as this uh huge spike but since then the ruble has really recovered quite well and um this is because they have backed their ruble two golds so it now has a stable value and it has an underlying value to it as well and i believe that going forward we are going to have to
see some sort of monetary reset so there will be hyperinflation or at least severe inflation that will destroy the fiat currencies at least what they've always done in past history is once the fiat currencies have become completely worthless then they do a new system where they back their currency to gold um to give it actual value and and to harden up the currency to make it so that it has more value than just candy wrappers so i want to just recap by saying i think i have already mentioned this but you can see hopefully with
all the points i've made so far you can see that eighteen thousand dollars an ounce you know it's a long way off where we are today but from in my mind it doesn't seem unreasonable given the inflation if you they're going to continue to print and i believe they are because as i said earlier they they can only raise rates you know for a short amount of time and then they have to undo their rate raises and then they have to print even more money to try to service their debt there's no other way around
them they are completely trapped um they're not stupid mind i'm not i'm not insinuating they're stupid they know what they're doing and they are trying to deliberately destroy the fiat system and to hyperinflate everyone into poverty so that we'll have to ask them for handouts and rely on them to feed us so if you want to avoid that if you want to try to have some sort of final financial independence and some sort of fighting chance of uh of not having to count on the government handouts and the government to feed you and look after
you then uh buying physical gold is certainly one way to to try to get through this reset without without suffering as much as they want you to um so we'll end here as well uh bob luke has posted this this is 12 month candles so each candle is a year you can see it in times of severe sort of economic crisis and high inflation gold does really well and that's exactly where we are today we've just broken our cup and handle a decade-long cup and handle and uh it's now time it's not just my opinion
bob lucas is also thinking this um so i i think we're going to go a lot higher um and then i also found this such i thought was interesting i thought i'd show you this this date this this chart was created although back in 1897 and um it sort of was a predictive it was sort of a crude-ish model to try to predict market cycles and when would be a good time to make money and when would not and uh interestingly enough the rest of this year seems okay but this sort of suggests there's going
to be a lot of blood next year in 2023 and given that gold does well in times of uh in in hard times for equities and other risk asset markets um i see no reason that the stars seem to be aligning here so i just thought that was interesting anyway i hope you enjoyed today's video if you did enjoy this please uh please let us know in the comments please subscribe to the channel follow us on twitter we post to both of these places every day i'm your boy camel take care
