Video: Emergence of the offshore dollar system and gold as a plan B for the ECB

The emergence of the eurodollar market from 1955 onwards has largely determined the further development of the international monetary and financial system. That's what political scientist Sander Boon says in a Exclusive interview with Paul Buitink for Holland Gold. It explains the negative interest rates and the almost unlimited borrowing capacity of governments. It also sheds a different light on the power of central banks in today's monetary system. They try to give the impression that they have control over interest and money supply, but that is only the case to a limited extent.

In this interview, Boon explains what the eurodollar is and how this interbank market came into being in the 1960s. The emergence and evolution of the private offshore money and capital market accelerated, making the peg between gold and the dollar unsustainable. European central banks played a crucial role in the growth of the eurodollar market. It was therefore only logical that the US government decided to abandon this link in 1971. Since then, the price of gold has risen by more than 8% per year. From $35 per troy ounce in 1971 to over $1,800 per troy ounce today.

Government bonds as collateral

Boon explains how government bonds have gradually taken over the role of gold as the foundation of our financial system. He describes how, in the 1990s, banks and shadow banks outside the United States began to provide dollar loans based on government bonds as collateral. Loans are no longer made on the basis of gold in a vault, but on the basis of government bonds as safe collateral. This not only made it possible to grow credit almost unlimitedly, it also led to ever lower interest rates. In the meantime, interest rates are even negative, causing our money system to falter more and more. Savers are seeking refuge in stocks, precious metals and cryptocurrencies.

Gold no longer seems to play a significant role in our current monetary system, but seems to be deceiving. Boon notes that when the European monetary union was founded, a possible return to gold as a monetary anchor was already taken into account. For example, the gold stocks of euro countries are at the top of the ECB's balance sheet. These gold reserves are also revalued quarterly according to the current market price.

This means that the central bank can easily absorb a collapse of the dollar and a write-down on government bonds with its gold reserves. In that scenario, the price of gold rises and with it the value of the gold stocks. The ECB can still use this trump card if an uncontrollable monetary crisis breaks out. The book From Gold to Bitcoin! will be in stores at the end of November.

Click this link or the image below to watch the full video.

Paul Buitink interview Sander Boon about the eurodollar market