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gold touched an all-time high on Wednesday and then just eased off it gold is up more than 30% this year now I go Muhammad Arian has a warning about those gains he says that the rise is unusual giving the strong stock market and we should take note of this Muhammad I never thought of you as a gold bug I never thought of you as one of those people who sort of got all hot under the collar about gold but when I read your article your suggest that actually this is telling us something wider about what's happening in in in in the economy structurally yes Richard I'm not a gold bug in fact I don't own any gold unfortunately given the 30% plus gain um what's happening is that the movement in the gold price has decoupled from its economic and financial influences there is something else going on and what's going on has a geopolitical angle to it that is overwhelming the economics and the finance why should gold though because the the argument the traditional argument is that in the last Bastion of of of disaster and catastrophe you've got gold that you can sell so what is happening and I understand geopolitical risk but normally the dollar would benefit similarly at the same time we're not seeing that so what are people frightened of here so first of all who's buying the gold right it's foreign central banks foreign central banks are trying to diversify their reserves away from the dollar it is part of a broader phenomenon where we are seeing little pipes being built around the dollar at the core of the system those little pipes are not just Reserve diversification their alternative payment system their alternative Regional arrangements and they alternative institutions so led by China and some other countries you're seeing these little pipes being built and then we have the peculiar example of Russia most people thought that with massive sanctions on Russia and with Russia thrown out of the Swift dollar system the economy would collapse it hasn't CH Russia has been continuing to trade and what Russia has done it has built a system that includes four or five other countries that's clunky that's inefficient but that totally bypasses the dollar so you have all these things coming together Richard but then you take gold per se how do you access that as an as an asset class other than putting it under the bed or having Ingot or central banks who have to deposit it at at depositary institutions once you've got it what are you going to do with it so so first individual can access it there are gold ETFs that allow you um to access it just like you access um stock other stocks and bonds um what do you do with it and that was the argument remember um you had Warren Buffett saying it's a complete wasted asset if but yet its price keeps on going up and that's why I'm saying what's going on here is something to pay attention to National Security apparatus should be paying attention to it because it goes beyond just Market forces it's something that speaks to people trying to decouple from a dollar based system and that's because people have lost trust in the ability of the US to be a responsible Steward of the International System if we look at uh since I have you um pardon the phrase um if we look at the imf's we it's hardly the most exciting one this time round I mean let's you know I think we've both had more exciting moments but it does this idea that inflation uh job done no nothing to see here move further along do you buy that I do buy that we're no longer going to see the very high inflation that Peak at 9 over 9% for the global economy um but I don't buy that the inflation um monsters completely conquered if we retain 2% inflation targets which we will for a while then the so-called last mile is going to prove quite tricky and is proving quite tricky for the US in particular this is mainly a US problem you don't believe that they're going to hit 2% they do you anytime soon I mean you you you sort of are comfortable with this idea 2.3 2.4 what's a couple of bit between friends correct because I don't think you destabilize inflation expectations I think that we can live with slightly higher inflation in fact I believe and that's just a hypothesis Richard that if central banks could specify the inflation Target today they would specify two and a half to three rather than two final question now you complete the fifth on this I I'll let you do that I'm going to give you a million in value million dollars in value you can have it in crisp 100 bills or you can have it in Gold same value as of today it'll be the same value a million in gold or a million in crisp bills which will you take am I investing it why do you always have to ask the right question that makes my yes spending it if spending it I wouldn't I wouldn't have gold gold is not a currency gold is a store of value if I'm investing it I would probably have gold up to about 5% of that million and I'm happy for you to give me the million and we can experiment that's why we love having you on the program uh as they say that famous line the checks in the mail Arian I'm very grateful to you thank you
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