Rafi Farber joins The SilverTrade Insider for a MUST VIEW discussion on gold, silver, and the END GAME.
Rafi explains why the NEXT Banking Crisis Will Be the LAST, and says that ALL of the US Dollar’s Purchasing Power is Going to SLAM into Gold & Silver!
Just how high will gold and silver prices reach during the NEXT banking crisis?
Rafi provides his END GAME Targets!
Welcome to the SilverTrade Insider! I’m Dr. Jon Lindau, joining me today is Rafi Farber of The End Game Investor. Thanks for joining us today Rafi!
Let’s dive right into it with a discussion of The End Game. The End Game for the US Dollar certainly appears much closer in the wake of the Iran war. The PetroYuan is rising at the expense of the PetroDollar. But it certainly didn’t start with the Iran war.
The dollar has been in a FREE FALL against gold for the better part of 3 and a half years now since the US & Europe confiscated Russia’s Central Bank reserves.
Rafi, you’ve described the current monetary era as the “End Game” for fiat currencies. In the context of the petrodollar system-where oil has long been priced and settled in dollars-how do you define the End Game, and what specific triggers would signal we’ve crossed the point of no return?
Rafi:
The definition of the END GAME is when the US Dollar can no longer acquire any amount of physical gold, ANYWHERE!
According to Mises, all prices have to be linked back into the past. Prices aren’t just random signals. Prices signal very important information about the division of labor in society. That’s how we all function. That’s how we don’t starve to death. It’s how we know what to do. Because if we woke up and nobody knew what to do, we’d all be in a Zombie Apocalypse! It’s funny, but it’s true! Prices are extremely important things!
The dollar started as a receipt- as a certificate for a certain amount of gold. The inflation that has been collecting since the beginning of the dollar (and accelerated in 1933 and 1971) – that’s all on top of the gold base! It hasn’t replaced it.
The END GAME is when everything that is on top of the gold base- meaning the DEBT that now represents most of the currency supply – when that becomes WORTHLESS, then we go back to GOLD & SILVER DIRECTLY! There’s no other choice!
In an inflated monetary signal that we have now- with extremely suppressed interest rates for DECADES (and especially since 2008) – that makes it look like there’s a lot of demand for private credit & huge firms on Wall Street & trading algos, and all the crazy things going on in the economy. Things like OnlyFans & all this gross crap that’s bubbling up everywhere in the world- that’s ALL BECAUSE OF THE INFLATION! Once that goes away, the entire structure of production has to be reorganized.
That’s good if you’re a farmer or a mechanic or working with your hands. But if you’re a trader on Wall Street or on OnlyFans – or somewhere in between there in the economic structure, there’s going to be no demand for you! That’s going to be most people- more than HALF of society!
That’s the END GAME!
Jon:
You’ve pushed back on the mainstream petrodollar narrative, arguing that the US dollar is actually a gold derivative rather than an oil derivative. Can you walk our viewers through why that distinction matters and how it changes our understanding of what the true “end game” for dollar dominance will look like?
Rafi: It’s pretty important! If you think that the dollar is an oil derivative- if you don’t understand that GOLD IS MONEY, and the dollar is based fundamentally on gold then you might make a mistake and stack oil futures! You’re not gonna stack oil in your garage, but you’ll buy futures, ETFs, energy companies, that kind of stuff – and you’re going to be losing out. SERIOUSLY! Because the money actually is GOLD, not oil!
Look up the price of oil in gold ounces. It’s near RECORD LOWS! It went up a little bit since the Iran War. Before the Iran War, it was at all-time lows except for the Lock Down era when it was negative $35. So excluding that- for above $0, oil is at NEAR RECORD LOWS IN GOLD TERMS!
THE MONEY IS GOLD, because gold is the most liquid commodity!
Oil changes a lot in dollar terms, and it changes even more in gold terms.
The Petro Dollar system is on TOP of the Gold Derivative System- which is the Dollar!
The Petro Dollar aids the dollar’s purchasing power by spreading out demand for the DEBT THAT IS THE INFLATION OF THE DOLLAR!
The inflation of the dollar is when The Fed buys Federal debt. The dollar is a receipt for everything on The Fed’s balance sheet!
The Petro Dollar system forces The Fed’s partners to denominate in dollars – that forces everyone who buys oil from OPEC to hold balances of US Treasuries. It SPREADS OUT THE INFLATION so it’s not completely centered on the US, which would cause hyperinflation.
It’s what WILL CAUSE HYPERINFLATION when ultimately all the Treasuries that are being stacked in different accounts eventually come back to the US.
Logically it’s all going to come back to the US. The question is what’s the TRIGGER for that?
The Petro Dollar system is GOING TO COLLAPSE, & the Dollar & Gold Will Not Be Exchangeable AT ALL!
We will have to go back to GOLD AS MONEY! Not oil as money!
When the Petro Dollar is destroyed, the demand for money will be much higher than the demand for oil! You need oil for a lot of stuff, but you need money (gold) for EVERYTHING!
With money (gold) we can divide our labor. You can’t divide labor with oil!
That is what makes it money! That is what makes it gold! It could be silver, it could be copper, but oil is way down there in the ranking of liquid commodities.
Jon: Let’s bring that home. What in your viewpoint is the trigger for that, and how big of a role will the whole situation with the Strait of Hormuz and the Iran War play in that?
Rafi: The Iran War could be a catalyst, or it could be 100 other things. What I’m looking at for what is going to cause this to finally materialize is the weakest link of industries that would be affected by higher interest rates. Right now it’s Private Credit.
Private Credit is essentially the same thing as Subprime Mortgages were in 2008.
You have Wall Street Firms loaning money to these actors who are saying they’re going to roll up all these businesses, loan them money at 6%, they’ll pay it back at 8% – but then interest rates go up, they can’t pay back the loan, it defaults, and that goes down the chain.
Next thing you know a whole bunch of banks can’t open for business the next day! We saw it with Silicon Valley Bank. I don’t know what triggers this, but I know it is triggered by a Banking Crisis!
The Next Banking Crisis WILL BE THE LAST ONE!
It’s going to require $10…$15…$20 TRILLION DOLLARS of bailouts! Every series of bank bailouts has to get bigger and bigger!
There’s only one more! After that, the dollar’s going to lose so much purchasing power & it will FLOW INTO GOLD!
The dollar is the derivative. The purchasing power doesn’t disappear- it GOES SOMEWHERE! It will go INTO MONEY ITSELF! The dollar is not money, it’s credit!
Jon: Do you have a target for gold when that event happens, or will the dollar just go off the board?
Rafi: The target would be logically – assuming the gold exists on The Fed’s balance sheet- if everything else goes to ZERO, then ALL the value goes into what remains!
That’s the most extreme scenario. I’m not saying the dollar will go to zero, but it will be extremely devalued!
Take the amount that’s on the Fed’s balance sheet-which is like $6.8 Trillion, and you divide it by the amount of GOLD on the Fed’s balance sheet, which is about 235 million oz, and you come up with a number!
So if the gold is going to cover 100% of The Fed’s balance sheet- meaning the other stuff is zero- WHICH HAS HAPPENED BEFORE! It happened in 1979-1980…it actually went up to 130%!
At $872 in 1980, the value of gold on The Fed’s balance sheet covered 130% of all the other stuff that was there- all the inflation on top of it – all the debt!
So we could get there again! The dollar number on that is about $55,000- $60,000!
That target changes every time The Fed inflates again!
Almost all of the purchasing power today- all the STUFF that dollars can buy today- is going to SLAM INTO GOLD & SILVER because the debt’s going to be WORTHLESS!
Gold IS MONEY- it’s where the currency comes from!
Rafi’s TheEndGame Investor newsletter can be found at Substack!
