(Kitco News) — The Moscow Global Standard, an alternative to the London Bullion Market Association (LBMA), could end gold price manipulation and reveal the metal’s fair market value, according to Matthew Pepenberg, commercial director at Matterhorn Asset Management.
Russia is proposing its own international standards for precious metals after it was banned by the London Bullion Market Association (LBMA). The country’s finance ministry said it was “of great importance” to create a new Moscow Global Standard (MWS) “to normalize the work of the precious metals industry” and to create an alternative to LBMA.
Russia also proposes fixing precious metal prices in the national currencies of major member states or via a new monetary unit – such as the new BRICS currency proposed by Russian President Vladimir Putin.
“Putin, like everyone else, knows that the LBMA is an open joke,” Bibbenberg said. “It is a legal use of leverage to artificially suppress the price of gold.”
Piepenburg noted that LBMA banks have “thousands and thousands of short-term leverage contracts while most of the market is going long,” thus engaging in an “artificial artificial method” to suppress the price of gold.
Bippenborg spoke with Michelle McCurry, Editor-in-Chief and Lead Presenter at Kitco News.
Resetting global cash
As a monetary reset occurs, Russia may create a reserve currency backed by a basket of goods, including gold.
“Russia and the East love things like fertilizer, gold, hay and hard assets,” Bibbenberg said. “As we scrap the dollar, as the petrodollar is diluted through other exchanges and other trades, they will do the same with the gold market because it’s real, it’s a cash metal.”
On the western side of monetary policy reset, the International Monetary Fund (IMF) is supporting countries in their development of Central Bank Digital Currencies (CBDCs), which are programmable tokens issued by a country’s central bank. In February, the head of the International Monetary Fund, Kristalina Georgieva, said that central bank digital currencies are likely to be better than stablecoins and “unbacked crypto assets.”
Bippenberg claimed that the IMF will ensure that central bank digital currencies are backed by gold.
“[The IMF has] admit it to [a CBDC] He explained that in order to have any credibility, he must have some partial coverage in the real assets, i.e. physical gold. “And for them to have any kind of credibility, it would be like Chapter 13 or Chapter 11 in the West. Debt restructuring.”
Bibbenberg noted that the United States has a “debt problem,” with a debt-to-GDP ratio of 123 percent.
“The West and the United States have loved that there has been no bequest for gold since 1971, when Nixon was casting the world gold standard,” he said. “It was a way to get euphoria unfettered by the US dollar.”
Dubbing the US dollar “mouse-click money,” Pepenberg claimed that a reset in Western monetary policy would be necessary when “even the most casual investor loses faith in the central bank’s optics and forked-tongued excuses.”
While he respects the “intellectual argument behind cryptocurrencies in general, or Bitcoin and Ethereum in particular,” Piepenburg said that “Bitcoin is a speculative asset.”
“I think the standard deviation of bitcoin is 140, while the standard deviation of gold is 17,” he explained. “I think Bitcoin’s strength is also its biggest weakness, the fact that it can go up and down at the same time… that’s the nature of the asset.”
Piepenburg went on to claim that gold is a more stable store of value than Bitcoin.
“I think gold is more stable,” he explained. “She’s a better wife than the polo player Playboy, and that’s kind of Bitcoin. I might be wrong… [but] I still think gold stands out as a victorious asset regardless.”
Piepenburg is very bullish on gold, for his gold price forecast, watch the video above.
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