Papua New Guinea just announced that it is taking control of a gold mine operated by gold miner Barrick Gold Corp after refusing to extend its lease. This is the start of a new trend according to the “Warren Buffet” of Commodities, Marin Katusa.
Marin expects many more countries to make forced nationalisations of gold mines in their country in order to manage their foreign exchange reserves. With the soaring US dollar exchange rate, countries need access to US dollars. However the Federal Reserve is limiting access to US dollars to only countries which agree to ally themselves to it.
Countries needing US dollars have alternative access to it via gold. People wanting to buy gold must pay for it in US dollars. And so nationalisation of the gold mines increases the US dollar reserves of these countries. If you are buying gold miners, you need to watch out!
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Update 2020-04-30 7pm (Singapore/Beijing Time):
*** IMPORTANT CLARIFICATION: ***
We talked to a few people today about nationalisation of gold mining stocks. Seems like some people only got half the story. It is not just third world countries like PNG who are going to nationalise gold miners.
It is every country that is not allied to the US and whose access to the US Dollar is restricted by the US Government/Federal Reserve.You need to watch the video by Marin Katusa at the end.
All countries which are not allied to the US will behave like PNG and start bullying gold miners in their countries. It starts by raising taxes on gold miners, forcing miners to sell their gold at depressed prices in local currency in the local market, and the last straw will be forced nationalisation.
This is so that they can sell the gold in USD to get USD currency to shore up their forex reserves.
Update 2020-05-01 02:20AM (Singapore/Beijing Time):
Gold Miners Update – Gold senior miners ETF DIVING after breaking news on the war on the gold miners. Red candle means selling off… Going forward we will need to cherry pick the miners to buy rather than use the ETF