24K99 News Gold News website Gold-Eagle analyst Hubert Moolman said that market confidence is shifting towards gold, not the US dollar. During the 2008 financial crisis, the currency system faced enormous challenges, and to contain the financial crisis, countries created a large amount of dollars by increasing the money supply. But he said that now it is different from 2008, this will be the end of fiat currency.

Hubert mentioned that the market can avoid the collapse of fiat currency, but the potential problem is accepting severely devalued currency. He emphasized: "It is clear that the crisis has not disappeared because the solution further devalues the currency."

"Due to the sharp decline in the speed of money supply (due to excessive debt that cannot support the level of money in the system), the system generally lacks liquidity," he continued. The increase in the money supply ultimately solved the liquidity problem, but at the cost of the currency devaluing to unprecedented levels.

By March 2020, the currency system faced a crisis again. Similarly, a large amount of dollars were created to deal with this issue.

Once again, the speed of money supply sharply declined, and once again, a significant increase in the money supply was the remedy.

He raised the question: "Is the financial system still robust, but for how long? Will the remedial measures to increase the supply of dollars produce the same effects as during the global financial crisis, or has something else happened?"

He shared charts of the US dollar and gold prices relative to the US money supply.

(Source: GoldSeek)

The chart shows the ratio of the price of gold to the adjusted monetary base of St. Louis, that is, the price of gold in US dollars divided by the St. Louis adjusted monetary base (in billions of dollars).

This ratio can be explained as a measure of the extent of currency depreciation. Point 8 on the chart is the lowest point since the establishment of the Federal Reserve, and therefore the most severe depreciation of the currency.

When this ratio rises, confidence shifts to gold rather than the US dollar. In the late 1970s to early 1980s, the ratio reached as high as 5 during a parabolic rise. It would require a substantial increase in interest rates to restore confidence in the US dollar (monetary system).

Hubert pointed out that this parabolic rise in the ratio can also be explained by bank runs in the American financial system.

During the global financial crisis, when the monetary base increased, the ratio on the chart dropped significantly to point 2. This almost returned to the level at the start of the gold bull market in 2001. It was not until December 2008 that gold prices rose enough to push the ratio higher again.

During the crisis in 2020, when the monetary base increased, this ratio also dropped significantly to point 2. Similarly, this was almost the level at the start of the gold bull market in 2015.

In the gradual rise of the ratio, from point 2 to point 6, both patterns maintained a similar shape. However, after point 6, significant deviations appeared.

During the financial crisis, the ratio failed at 0.7, unable to exceed 0.3 and 0.5, eventually hitting a historic low. The dollar depreciated to the extreme, but people still maintained confidence in the system. In other words, the gold price was still suppressed.

The crisis in 2020 took a different path from the pattern during the global financial crisis in 2024, when gold made significant breakthroughs in March. The gold price was not suppressed, and people's confidence in the dollar monetary system is rapidly collapsing.

Hubert emphasizes that breaking the gold line will confirm this trend, that is, the important shift in confidence from the dollar to gold. In a way, it feels like a run on various banks.