Analyst Luke Gromen joins those expecting a sudden revaluation of gold to reliquefy governments

9:48p ET Friday, September 22, 2023

Dear Friend of GATA and Gold:

While it is a few months old, the March 22 edition of financial analyst Luke Gromen's "The Forest for the Trees" letter remains an outstanding review of, first, the use of derivatives and gold leasing by central banks to control the gold price, and, second, the growing evidence that central banks plan to use the monetary metal to replace the U.S. dollar and U.S. Treasury bonds as the primary settlement mechanism for world trade.

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Accomplishing such a change, Gromen writes, would require a much higher gold price and the elimination or drastic reduction of unallocated gold claims -- that is, gold derivatives for which there is no actual metal backing.  

Thus Gromen is inclined to expect what others have called a "big reset" of currency and asset valuations. He writes:

We could see the possibility that gold would be written up over a weekend to a much bigger number ($5,000?), and on that Sunday afternoon, before markets opened, it would be disclosed that the GLD exchange-traded fund would be cash-settled at the prior Friday close.

The massive windfall gain between the physical gold on central bank, JPMorgan, and other too-big-to-fail balance sheets at the new, revalued price and the (much lower) Friday close in the GLD ETF's price would be added to central bank and too-big-to-fail bank reserves and recapitalize the central banks and systemic TBTF banks to a significant extent (depending on price).

All this is similar to the speculation offered in recent years by the Scottish economist Peter Millar, the U.S. economists Paul Brodsky and Lee Quaintance, and the Dutch economist and fund manager Willem Middelkoop: 

https://www.gata.org/node/4843

https://www.gata.org/node/11373

https://www.amazon.com/Big-Reset-Revised-Financial-Endgame/dp/9462980276/

But Gromen updates such speculation with many supportive developments of the last year. His analysis is compelling and he has kindly given GATA permission to share it with you here:

https://www.gata.org/sites/default/files/LukeGromenFFTT-03-22-2023.pdf

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

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