July 21, 2025 • 24 mins
Text the ATB Team! We'd love to hear from you!
In this episode of At the Boundary, William Parker, a Business Librarian at the University of South Florida (USF) sat down with GNSI’s Strategy and Research Manager Dr. Tad Schnaufer to the newest GNSI Decision Brief, "Assessing BRICS Gold Holdings."
They discussed how BRICS nations (Brazil, Russia, India, China and South Africa) have been increasing their gold reserves in an effort to challenge Western financial systems and reduce reliance on the U.S. dollar. The conversation also explores the role of gold in a nation’s financial and economic credibility.
Some of the key topics discussed include:
- What BRICS and BRICS+ represent, and why their expansion matters geopolitically
- Why gold still matters, even when some nations have dropped the gold standard
- The potential shortcomings of fiat currencies
- The potential for BRICS nations to offer an alternative to the US dollar in the global financial structure
- How physical gold can act as a tool to circumvent sanctions
- What other metals, if any, could compete with gold as a monetary standard
- “Currency decoupling” and its effects on monetary systems
Links From the Episode:
• Assessing BRICS Gold Holdings Decision Brief
• Lessons from the Russia-Ukraine War GNSI Summit
• Axis of Resistance GNSI Research Initiative
At the Boundary from the Global and National Security Institute at the University of South Florida, features global and national security issues we’ve found to be insightful, intriguing, fascinating, maybe controversial, but overall just worth talking about.
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The mission of GNSI is to provide actionable solutions to 21st-century security challenges for decision-makers at the local, state, national and global levels. We hope you enjoy At the Boundary.
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Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Glenn Beckmann (00:12):
Glenn, Hi everybody. Welcome to this
week's at the boundary, thepodcast from the global and
national security Institute atthe University of South Florida.
I'm Glenn Beckman,communications manager at GNSI,
and your host for today's at theboundary. On the show. Today,
we're going to get a chance totake a closer look at a recently
(00:34):
published GNSI decision brief.
The author of the brief, USFbusiness librarian, William
Parker will join us to furtherdig into his analysis of the
financial holdings of BRICS. No,not the stuff you make buildings
with, but the consortium of 10countries trying to position
itself as an alternative toWestern institutions, led by
China and Russia, BRICS istrying to leverage its gold
(00:58):
holdings to compete with thedominance of the US dollar in
the global economy. And Parkerwill be joining us in a moment.
There's a new update for notesfrom Cambridge on our website.
That's the student blog beingwritten by Kyle Rudd and may
Burch, the two USF students GNSIsent to the UK to study at the
2025 International Security andIntelligence Program, which is
(01:23):
part of the Cambridge SecurityInitiative Kyle and may have hit
the ground running learning fromsome of the world's leading
academics and practitioners inthe national security and
intelligence industries. They'realso squeezing in a bit of fun
while in the UK. May evencelebrated her birthday last
week. Check out their blog onthe GNSI website. Lots of
(01:44):
updates every week. We'll have alink in the show notes. We're in
the process of finalizing ourSummit Report from GNSI Tampa
summit five, the Russia,Ukraine, war lessons for future
conflicts. Look for that soononline, and if you'd like a
refresher on the conference, youcan find all of the videos on
our YouTube channel. Speaking ofour YouTube channel, if you
(02:05):
haven't checked out Axis ofResistance, you're missing some
great insight and analysis. Axisis the research initiative
created by GNSI Research FellowDr Armon makhmudian, and takes a
deep and comprehensive look atIran's collection of loosely
aligned state and non stategroups trying to destabilize the
Middle East. We're five sessionsin, and the reaction has been
(02:29):
fantastic. Check them out. Justsearch for Axis of Resistance on
our YouTube channel. All right,let's welcome our special guest
today. He's William Parker, theauthor of a recently published
GNSI decision brief titledassessing bricks gold holdings.
Parker is a business librarianat USF and holds an MLS as well
(02:49):
as a master's degree in BusinessFinance. Joining him for the
interview will be GNSI strategyand research manager Dr tad
schnaufer.
Tad Schnaufer (03:05):
Well, Glenn, thank you for that great
introduction. And William,welcome to the podcast.
Will Parker (03:09):
Yes, thank you for having me. I appreciate the
opportunity to come here andspeak well,
Tad Schnaufer (03:13):
you know, gold's always an interesting topic, so
I think it'll be prettyinteresting to dive into that
today. So first for ouraudience, you know you wrote a
publication with us recently, adecision brief on the gold
reserve of the BRICS nations. Sofirst, perhaps we should talk
about, what are the BRICSnations, and why are they
important?
Will Parker (03:30):
So the BRICS is a group of major emerging
economies who formed with theintentions to counterbalance
Western dominance and the globaleconomic system, particularly
the United States. Dollar.
Tad Schnaufer (03:44):
Okay, excellent.
And what are the BRICS nations?
Obviously, we got Brazil,Russia, and then who else we
have in Walter,
Will Parker (03:50):
Brazil, Russia, India, China, South Africa. And
the block is currently growingand expanding. A lot of people
refer to that as BRICS plus, andthey are trying to increase
their footprint around the globeand bring in many more partners,
right, right?
Tad Schnaufer (04:10):
With those partners expanding, you know,
you took an interesting approachof looking at their gold
reserves, right? So what? Whydoes gold matter, particularly
when several nations, includingUnited States, have come off the
gold standard, going back to theUS left the gold standard in
1971 during the Nixadministration. So why is gold
Will Parker (04:26):
important today?
Yes, well, gold has historicallybeen used as a form of money. It
has very unique properties. It'snot easily created or
accumulated. It has propertiesthat make it very durable, and
all of this makes it a greatstore of value. So throughout
history, nations have relied ongold as part of their monetary
system, and um, they sometimesuse it as their base. Most often
(04:52):
use it as their monetary base.
Sometimes circulate itthroughout the economy. Now we
are in a period where you. Wehave fiat currency, and our
currency is not backed by gold.
Fiat currency's value is createdand maintained by the nation who
may default or fail, while goldwill always have intrinsic value
(05:14):
that's not dependent on acounter party. It can't lose its
value from a nation failing, oranything of that nature.
Tad Schnaufer (05:24):
So a fiat currency, then is just like the
US dollar,
Will Parker (05:28):
yes, not backed by any particular thing other than
the credibility of thegovernment,
Tad Schnaufer (05:33):
right? And then gold is a precious metal,
obviously. And there's thewhatever human assigned value to
gold? Yes, and throughouthistory, as you mentioned,
gold's been used popularly incurrency exchanges or just as a
way to demonstrate wealth. Sowhy does a country's gold desert
reserves today mean anythingdifferent than they did, you
(05:56):
know, 100 years
Will Parker (05:57):
ago? Yes, well, large gold reserves, they add
credibility to the nation'scurrency. So a lot of decisions
are made at the investor level,or from the investor's
perspective, and so since anation holds gold reserves that
can be used in times of crisisto stabilize the currency or
(06:21):
serve as collateral or loans orother types of agreements,
investors tend to favor thosetypes of economies and nations
more favorably than if they hadno other options or had no
ability to insulate themselveswith a physical asset, really
(06:42):
the
Tad Schnaufer (06:43):
larger the gold reserves, then, is more
stability in the economy, or atleast possibility for stability?
Yes, I believe so with the goldreserves of nations. Who? What
country currently has thelargest gold reserve?
Will Parker (06:54):
Well, let's see.
United States has the largestgold reserve out of all nations,
the g7 combined is the largestblock, while the total BRICS is
slightly behind, behind theUnited States in terms of the
amount held, with eachindividual brick nation being
(07:15):
less, with highest of Russia sixpoint something percent.
Tad Schnaufer (07:23):
So in your decision brief, you note that
the BRICS nations, particularlyare stockpiling gold. So is this
some sort of challenge to thewest, or how? What's it actually
doing for them?
Will Parker (07:33):
Well, in a way, it could be a challenge because it
allows people to believe thattheir financial systems are more
credible, and it gives the worldanother option with other
nations who have crediblefinancial systems, credible
(07:55):
currencies and things of thatnature. So in a way, it makes
the United States dollar notlook like the only option, as it
has been for a long time.
Tad Schnaufer (08:07):
And what's this mean in relative terms? So the
BRICS nations, whether it'sRussia or China, their gold
reserves are increasing farfaster than, say, the US or any
other countries in the West.
Will Parker (08:16):
Yes, Russia has the highest rate over 10% annual
compound annual growth rate.
China has large reserves. Secondbehind Russia, they have a
compound annual growth rate ofabout 7.7% United States has not
increased or decreased itsholdings in a long time, while
(08:40):
the g7 has slightly decreasedsince the inception of BRICS.
But at the rate that BRICScountries, particularly Russia
and China, are increasing, it isgetting closer to the amount of
gold that the United Statesreserve has, and the BRICS
combined is getting closer tothe total combined amount of
(09:03):
gold holdings that g7 has,
Tad Schnaufer (09:07):
right? And does this give them, as in Russia or
China or maybe some of the otherBRICS nations, more leverage in
negotiations or economic deals?
Will Parker (09:16):
Yes, I believe so, because the gold that they have
can be used in trade deals. Itcan be used outside of a global
monetary system that'scontrolled by nations that
compete with them. It can settlecertain types of deals, and it
(09:37):
gives autonomy and moreflexibility for them to achieve
their fiscal policy ornegotiations.
Tad Schnaufer (09:47):
Would it be possible to use these large
stockpiles to also soften theblow of Western sanctions, for
example, on Russia? Yes,
Will Parker (09:56):
for sure, because gold as a physical asset, it
doesn't. Go through the bankingsystem that, say, regular fiat
currencies go through today. Soif Russia were to be sanctioned,
they can still trade gold,because it's outside of, say,
the SWIFT system. It's outsideof any form of control that
(10:20):
other nations would be able todo, and they can trade directly
with whoever they want to tradewith, whoever is willing to
trade with them, settle in goldor use gold as collateral in
that deal.
Tad Schnaufer (10:34):
Well. And that goes to obviously, the US and
the West has sanctions on Russiaand a number of other countries,
but gold might be a way aroundit, which is an interesting
point. So what does the US needto look at for its own gold
reserve strategy? Then?
Will Parker (10:48):
Well, in my opinion, I think that the more
gold reserves, the higher goldreserves, the better off United
States would be. So as we noted,our currency isn't, or isn't
currently backed by gold. Andthroughout the time of having no
increases in our gold reserves,the currency United States
(11:10):
dollar has continued to expandin supply. And so that's a
further debasement. So as wementioned, the investor
perspective, some people thinkthat the United States dollar is
being stretched too thin, notbeing backed by anything
physical, particularly gold,which is has intrinsic value, a
(11:32):
historical transit value, and Ithink that it would be best to
continue expanding the goldreserves. So
Tad Schnaufer (11:40):
why not just keep the gold tied to the dollar to
make sure that it's a securecurrency?
Will Parker (11:46):
Well, I think in history, what we have seen is
that the governments tend toneed to make more payments for
welfare, for doing, say, warfinancing, for doing other types
of things of that nature, andwith the amount of physical gold
(12:07):
that they have present, theycan't make those payments, or
else the gold was deep bedepleted. And so what they do is
they debase the currency fromgold. So for instance, they
might if gold was a um, a fullphysical coin, they might start
diluting the amount of gold inthat coin to copper. And now
(12:28):
we're seeing actual physicalpaper, um that just has ink with
an image of, you know, createdby United States, which is
significantly, you know, lessexpensive to create, less
expensive to distribute, thanphysical gold is, and that is
(12:49):
the reason that you can'tnecessarily stay back to a
physical product like gold thatis not easy to expand, not easy
to accumulate while still tryingto achieve your goals of
welfare, of paying militariesand paying things of that nature
Tad Schnaufer (13:11):
that has to do with the country's debt, then
just increasing theexpenditures, and you just can't
keep the gold reservesincreasing enough to back the
dollar directly. Yes, for sure,and like you mentioned, the use
of precious metals in coinsobviously goes back throughout
history, but even within UScurrency before, particularly
the 1960s most coins either hadelements of silver or other
(13:33):
precious metals in them. So wasthat change away from those also
part of this decoupling awayfrom kind of precious metals,
because it wasn't just gold, itwas also silver. Was also silver
and other metals. Yes, I wouldsay so. And one of the first
times the US decoupled itscurrency was actually in the
lead up to World War Two. Isthere any? But they were able to
(13:54):
bring the debt back down, andthen re, I guess, re, establish
that currency Correct?
Will Parker (14:00):
I would have to do more research on that. I know,
particularly in conflict andwar, we see inflation, and so
that is one of the key times ofwhen a nation would want to
debase its currency and expandthe money supply so that they
can do wartime financing. So Iknow after the war is over, then
(14:26):
the goal is to reduce theinflation, to get back to
equilibrium, to get to levelsthat work for the economy. While
they aren't always going back toa physical standard, a gold
standard, or something likethat, it's not pretty much, in
my opinion, is just new levelsof some form of of money that
(14:49):
isn't at the same level as theprevious one. Is
Tad Schnaufer (14:51):
there any other, uh, precious metal or some other
resource that could replacegold? Is there anything that
has, you know, obviously silveris, like, ranked below gold,
but, you know, some. As peopletalk about other metals, is
there anything that competeswith gold?
Will Parker (15:06):
Well, there is a lot of debate on this. I
personally don't believe so. Imean, historically speaking,
gold has been the highest formof physical money, going back
1000s of years. There are othermetals that are being mined that
weren't previously mined.
There's other forms ofcommodities and other forms of
(15:29):
physical product that could be areplacement if that happens. I I
don't see it happening at themoment, but
Tad Schnaufer (15:41):
it is possible, right? So the gold is kind of
the try and true method for, forsure, the most secure, right? So
with that in mind, how do wemove forward? So we have, like,
Russia's war in Ukraine, youhave these conflicts. How's that
affecting gold reserves aroundthe world, and where are the
major and how much mining isgoing on? Are we still seeing a
(16:03):
lot of
Will Parker (16:03):
gold mines? Yes, there are countries who are very
well known for their mines.
Russia has substantial goldmines. Australia has substantial
gold mines. United States does.
China, while it doesn't havemany as much confirmed reserve
gold reserves and the ground itsoutput is tremendous compared
(16:27):
to, say, like, what Russia isproducing from their known
reserves. So I think there is amajor push for countries to to
mine their gold. Um,particularly Russia and China.
Now, there have also beenreports and discussions that a
(16:48):
lot of the gold that is beingmined in particularly Russia and
China, is kind of in the shadowsystem, where it's not being
reported on a global scale, sotheir reserves could potentially
also be larger than what'sreported and the leading
databases that track it,
Tad Schnaufer (17:06):
and could they, in a sense, flood the market,
devalue the devalue gold?
Will Parker (17:12):
I guess that is possible. We've seen it with
other types of assets, but I Ipersonally don't know why they
would do that, or if it would bepossible, or if it, you know if
it would be effective if theydid choose to do that. So
Tad Schnaufer (17:31):
the BRICS nations have created some of their own
central banking and again, todirectly compete with the US. Is
this? Is this gold reservesacross the different members of
the BRICs? Is that helpingestablish that competitive bank?
Will Parker (17:44):
I think it is yes, and it's all about investor
perspective. So the morereserves that they have, the
more credible their financialsystems will appear. And
Tad Schnaufer (17:56):
when you say investors, are you talking about
other nations or just largebusinesses like Microsoft or
something. Who do you mean byinvestor? Well, it could be
Will Parker (18:04):
populations. It could be hedge funds. It could
be major corporations, any, anytype of investor who chooses to
park their assets their theirvalue in those countries, or
chooses to use those countriesto produce their output in
Tad Schnaufer (18:23):
particular, and then also the country's
currencies, right? So whichcountries, which, which
currencies are actually trustedbased off of respective gold
reserve?
Will Parker (18:32):
Yes, it's a component of the currency's
credibility.
Tad Schnaufer (18:36):
And then, uh, lastly, do we see any major
exchanges of gold otherwise,other than the BRICS nations
increasing, are there any otherincreases or major decreases on
the world stage today?
Will Parker (18:48):
I would need to look further into that, and my
focus has been particularly onBRICS, because of their major
emerging economy status, and alot of investors are wanting to
flock to invest into thosecountries. So that's been my
particular study. I would haveto look to see if there's other
(19:09):
nations that have that kind oflevel of gold reserves and are
increasing at that rate. So Ican't necessarily answer that.
Well,
Tad Schnaufer (19:19):
what's pulling investors away from the Western
markets, which are a little bitmore stable and, you know, more
established?
Will Parker (19:26):
Well, I wouldn't say they're necessarily being
pulled to the fullest extent,but it's all about opportunity.
So emerging markets, they havepotential for growth, while,
say, like the g7 nations whowere advanced, who might have
reached peak growth, they mightnot have as much opportunity to
(19:50):
have a return on investment.
Tad Schnaufer (19:54):
So the BRICS nations are growing would be
growing faster than thetraditional, maybe the
traditional. National Westernmarkets, so there's more
opportunity there for largerreturns.
Will Parker (20:05):
I would say yes, because they have a large
population. The BRICS populationhas been reported of over um 41%
of the global population. Sothat's a huge consumer base, and
they already have 31% of theshare of the global economy in
(20:27):
terms of GDP.
Tad Schnaufer (20:29):
Okay, interesting. You know, I have to
ask before we wrap up. So whatgot you interested directly in
gold? Well,
Will Parker (20:35):
I, I'll keep going back to an investor's
perspective. I have looked intothe finances of the United
States, I see the currency base,the supply continuing to expand.
I see the national debt growing.
I see more reliance on foreignforeign loans, foreign
(20:55):
investment. And it's kind ofscary, and So gold is a very,
very safe asset tocounterbalance those types of
risk. And that's what got meinterested in gold, really,
Tad Schnaufer (21:12):
so that it's really a solution to a problem
that you see developing. I thinkso yes. So what would you say to
a US decision maker, a economicpolicy leader. What do they need
to do with gold going forward?
Let's say next 510, years,
Will Parker (21:29):
if, if it were my decision, and I would tell
somebody else making thatdecision that higher reserves
are better and they providecredibility. They can the larger
gold reserves can be used intimes of instability to
stabilize the currency, or as aloan of last resort, collateral
(21:49):
for a loan of last resort.
Tad Schnaufer (21:51):
So then why? You know, the US is obviously a very
rich nation, so why wouldn't wejust buy a bunch more gold, if
it's if it has those effects,why not just keep a massive a
larger obviously, we have alarge reserve, but why not more?
I
Will Parker (22:02):
think there's other focus and priorities. There have
been mentions of addingcryptocurrencies and to our
strategic reserve and things ofthat nature. And some people
might believe that that is areplacement for that. But if it
were me, I would stick to aphysical asset that doesn't rely
(22:23):
on power to uphold its value,that doesn't rely on counter
parties or anything of thatnature. And that's a solid
asset, a solid physical assetwith, you know, historical
perspective of maintaining itsvalue for over 1000s of years.
Tad Schnaufer (22:45):
When is any closing comments as we look, as
we look forward into thedevelopment of gold reserves
across the BRICS nations?
Will Parker (22:52):
Oh, I would just, you know, ask policy makers to
continue looking into thesubject, and to look at the
trends in the global economy,and look at the historical
events that have taken placearound gold used as wartime
financing, gold used as tostabilize the currency, and all
(23:17):
the great benefits that Gold canbe used to protect the nation
and to ensure the wealth of anation. Well, thank you so much,
William. Thank you.
Glenn Beckmann (23:32):
There you have it. A conversation between GNSI
tad schnaufer and William Parkerfrom USF and the author of a
GNSI decision brief titledassessing BRICS gold holdings.
Thanks to both of them forjoining us today. Next week, on
at the boundary, we'll beannouncing our next GNSI
Research Initiative. GNSI SeniorResearch Fellow Dr Rob Burrell
(23:56):
will lead the new initiativecalled the future of warfare,
and he'll be our guest nextweek. Rob has been a guest
previously on the podcast, andwe're really looking forward to
having him back. Thanks forlistening today. Be sure to like
and subscribe to the podcast.
We're available on all the majorplatforms, including Apple
podcasts, Spotify and Amazonmusic, and we're also available
(24:16):
on the GNSI YouTube channel,we'd appreciate a like, follow
or subscribe, wherever you mightfind us
that's going to wrap up thisepisode of at the boundary. Each
new episode will feature globaland national security issues we
(24:38):
found to be worthy of attentionand discussion. We hope you
enjoyed the show today. I'mGlenn Beckman, thanks for
joining us, and we'll see younext week at the boundary. You.
Glenn, Hi everybody. Welcome to this
week's at the boundary, thepodcast from the global and
national security Institute atthe University of South Florida.
I'm Glenn Beckman,communications manager at GNSI,
and your host for today's at theboundary. On the show. Today,
we're going to get a chance totake a closer look at a recently
(00:34):
published GNSI decision brief.
The author of the brief, USFbusiness librarian, William
Parker will join us to furtherdig into his analysis of the
financial holdings of BRICS. No,not the stuff you make buildings
with, but the consortium of 10countries trying to position
itself as an alternative toWestern institutions, led by
China and Russia, BRICS istrying to leverage its gold
(00:58):
holdings to compete with thedominance of the US dollar in
the global economy. And Parkerwill be joining us in a moment.
There's a new update for notesfrom Cambridge on our website.
That's the student blog beingwritten by Kyle Rudd and may
Burch, the two USF students GNSIsent to the UK to study at the
2025 International Security andIntelligence Program, which is
(01:23):
part of the Cambridge SecurityInitiative Kyle and may have hit
the ground running learning fromsome of the world's leading
academics and practitioners inthe national security and
intelligence industries. They'realso squeezing in a bit of fun
while in the UK. May evencelebrated her birthday last
week. Check out their blog onthe GNSI website. Lots of
(01:44):
updates every week. We'll have alink in the show notes. We're in
the process of finalizing ourSummit Report from GNSI Tampa
summit five, the Russia,Ukraine, war lessons for future
conflicts. Look for that soononline, and if you'd like a
refresher on the conference, youcan find all of the videos on
our YouTube channel. Speaking ofour YouTube channel, if you
(02:05):
haven't checked out Axis ofResistance, you're missing some
great insight and analysis. Axisis the research initiative
created by GNSI Research FellowDr Armon makhmudian, and takes a
deep and comprehensive look atIran's collection of loosely
aligned state and non stategroups trying to destabilize the
Middle East. We're five sessionsin, and the reaction has been
(02:29):
fantastic. Check them out. Justsearch for Axis of Resistance on
our YouTube channel. All right,let's welcome our special guest
today. He's William Parker, theauthor of a recently published
GNSI decision brief titledassessing bricks gold holdings.
Parker is a business librarianat USF and holds an MLS as well
(02:49):
as a master's degree in BusinessFinance. Joining him for the
interview will be GNSI strategyand research manager Dr tad
schnaufer.
Tad Schnaufer (03:05):
Well, Glenn, thank you for that great
introduction. And William,welcome to the podcast.
Will Parker (03:09):
Yes, thank you for having me. I appreciate the
opportunity to come here andspeak well,
Tad Schnaufer (03:13):
you know, gold's always an interesting topic, so
I think it'll be prettyinteresting to dive into that
today. So first for ouraudience, you know you wrote a
publication with us recently, adecision brief on the gold
reserve of the BRICS nations. Sofirst, perhaps we should talk
about, what are the BRICSnations, and why are they
important?
Will Parker (03:30):
So the BRICS is a group of major emerging
economies who formed with theintentions to counterbalance
Western dominance and the globaleconomic system, particularly
the United States. Dollar.
Tad Schnaufer (03:44):
Okay, excellent.
And what are the BRICS nations?
Obviously, we got Brazil,Russia, and then who else we
have in Walter,
Will Parker (03:50):
Brazil, Russia, India, China, South Africa. And
the block is currently growingand expanding. A lot of people
refer to that as BRICS plus, andthey are trying to increase
their footprint around the globeand bring in many more partners,
right, right?
Tad Schnaufer (04:10):
With those partners expanding, you know,
you took an interesting approachof looking at their gold
reserves, right? So what? Whydoes gold matter, particularly
when several nations, includingUnited States, have come off the
gold standard, going back to theUS left the gold standard in
1971 during the Nixadministration. So why is gold
Will Parker (04:26):
important today?
Yes, well, gold has historicallybeen used as a form of money. It
has very unique properties. It'snot easily created or
accumulated. It has propertiesthat make it very durable, and
all of this makes it a greatstore of value. So throughout
history, nations have relied ongold as part of their monetary
system, and um, they sometimesuse it as their base. Most often
(04:52):
use it as their monetary base.
Sometimes circulate itthroughout the economy. Now we
are in a period where you. Wehave fiat currency, and our
currency is not backed by gold.
Fiat currency's value is createdand maintained by the nation who
may default or fail, while goldwill always have intrinsic value
(05:14):
that's not dependent on acounter party. It can't lose its
value from a nation failing, oranything of that nature.
Tad Schnaufer (05:24):
So a fiat currency, then is just like the
US dollar,
Will Parker (05:28):
yes, not backed by any particular thing other than
the credibility of thegovernment,
Tad Schnaufer (05:33):
right? And then gold is a precious metal,
obviously. And there's thewhatever human assigned value to
gold? Yes, and throughouthistory, as you mentioned,
gold's been used popularly incurrency exchanges or just as a
way to demonstrate wealth. Sowhy does a country's gold desert
reserves today mean anythingdifferent than they did, you
(05:56):
know, 100 years
Will Parker (05:57):
ago? Yes, well, large gold reserves, they add
credibility to the nation'scurrency. So a lot of decisions
are made at the investor level,or from the investor's
perspective, and so since anation holds gold reserves that
can be used in times of crisisto stabilize the currency or
(06:21):
serve as collateral or loans orother types of agreements,
investors tend to favor thosetypes of economies and nations
more favorably than if they hadno other options or had no
ability to insulate themselveswith a physical asset, really
(06:42):
the
Tad Schnaufer (06:43):
larger the gold reserves, then, is more
stability in the economy, or atleast possibility for stability?
Yes, I believe so with the goldreserves of nations. Who? What
country currently has thelargest gold reserve?
Will Parker (06:54):
Well, let's see.
United States has the largestgold reserve out of all nations,
the g7 combined is the largestblock, while the total BRICS is
slightly behind, behind theUnited States in terms of the
amount held, with eachindividual brick nation being
(07:15):
less, with highest of Russia sixpoint something percent.
Tad Schnaufer (07:23):
So in your decision brief, you note that
the BRICS nations, particularlyare stockpiling gold. So is this
some sort of challenge to thewest, or how? What's it actually
doing for them?
Will Parker (07:33):
Well, in a way, it could be a challenge because it
allows people to believe thattheir financial systems are more
credible, and it gives the worldanother option with other
nations who have crediblefinancial systems, credible
(07:55):
currencies and things of thatnature. So in a way, it makes
the United States dollar notlook like the only option, as it
has been for a long time.
Tad Schnaufer (08:07):
And what's this mean in relative terms? So the
BRICS nations, whether it'sRussia or China, their gold
reserves are increasing farfaster than, say, the US or any
other countries in the West.
Will Parker (08:16):
Yes, Russia has the highest rate over 10% annual
compound annual growth rate.
China has large reserves. Secondbehind Russia, they have a
compound annual growth rate ofabout 7.7% United States has not
increased or decreased itsholdings in a long time, while
(08:40):
the g7 has slightly decreasedsince the inception of BRICS.
But at the rate that BRICScountries, particularly Russia
and China, are increasing, it isgetting closer to the amount of
gold that the United Statesreserve has, and the BRICS
combined is getting closer tothe total combined amount of
(09:03):
gold holdings that g7 has,
Tad Schnaufer (09:07):
right? And does this give them, as in Russia or
China or maybe some of the otherBRICS nations, more leverage in
negotiations or economic deals?
Will Parker (09:16):
Yes, I believe so, because the gold that they have
can be used in trade deals. Itcan be used outside of a global
monetary system that'scontrolled by nations that
compete with them. It can settlecertain types of deals, and it
(09:37):
gives autonomy and moreflexibility for them to achieve
their fiscal policy ornegotiations.
Tad Schnaufer (09:47):
Would it be possible to use these large
stockpiles to also soften theblow of Western sanctions, for
example, on Russia? Yes,
Will Parker (09:56):
for sure, because gold as a physical asset, it
doesn't. Go through the bankingsystem that, say, regular fiat
currencies go through today. Soif Russia were to be sanctioned,
they can still trade gold,because it's outside of, say,
the SWIFT system. It's outsideof any form of control that
(10:20):
other nations would be able todo, and they can trade directly
with whoever they want to tradewith, whoever is willing to
trade with them, settle in goldor use gold as collateral in
that deal.
Tad Schnaufer (10:34):
Well. And that goes to obviously, the US and
the West has sanctions on Russiaand a number of other countries,
but gold might be a way aroundit, which is an interesting
point. So what does the US needto look at for its own gold
reserve strategy? Then?
Will Parker (10:48):
Well, in my opinion, I think that the more
gold reserves, the higher goldreserves, the better off United
States would be. So as we noted,our currency isn't, or isn't
currently backed by gold. Andthroughout the time of having no
increases in our gold reserves,the currency United States
(11:10):
dollar has continued to expandin supply. And so that's a
further debasement. So as wementioned, the investor
perspective, some people thinkthat the United States dollar is
being stretched too thin, notbeing backed by anything
physical, particularly gold,which is has intrinsic value, a
(11:32):
historical transit value, and Ithink that it would be best to
continue expanding the goldreserves. So
Tad Schnaufer (11:40):
why not just keep the gold tied to the dollar to
make sure that it's a securecurrency?
Will Parker (11:46):
Well, I think in history, what we have seen is
that the governments tend toneed to make more payments for
welfare, for doing, say, warfinancing, for doing other types
of things of that nature, andwith the amount of physical gold
(12:07):
that they have present, theycan't make those payments, or
else the gold was deep bedepleted. And so what they do is
they debase the currency fromgold. So for instance, they
might if gold was a um, a fullphysical coin, they might start
diluting the amount of gold inthat coin to copper. And now
(12:28):
we're seeing actual physicalpaper, um that just has ink with
an image of, you know, createdby United States, which is
significantly, you know, lessexpensive to create, less
expensive to distribute, thanphysical gold is, and that is
(12:49):
the reason that you can'tnecessarily stay back to a
physical product like gold thatis not easy to expand, not easy
to accumulate while still tryingto achieve your goals of
welfare, of paying militariesand paying things of that nature
Tad Schnaufer (13:11):
that has to do with the country's debt, then
just increasing theexpenditures, and you just can't
keep the gold reservesincreasing enough to back the
dollar directly. Yes, for sure,and like you mentioned, the use
of precious metals in coinsobviously goes back throughout
history, but even within UScurrency before, particularly
the 1960s most coins either hadelements of silver or other
(13:33):
precious metals in them. So wasthat change away from those also
part of this decoupling awayfrom kind of precious metals,
because it wasn't just gold, itwas also silver. Was also silver
and other metals. Yes, I wouldsay so. And one of the first
times the US decoupled itscurrency was actually in the
lead up to World War Two. Isthere any? But they were able to
(13:54):
bring the debt back down, andthen re, I guess, re, establish
that currency Correct?
Will Parker (14:00):
I would have to do more research on that. I know,
particularly in conflict andwar, we see inflation, and so
that is one of the key times ofwhen a nation would want to
debase its currency and expandthe money supply so that they
can do wartime financing. So Iknow after the war is over, then
(14:26):
the goal is to reduce theinflation, to get back to
equilibrium, to get to levelsthat work for the economy. While
they aren't always going back toa physical standard, a gold
standard, or something likethat, it's not pretty much, in
my opinion, is just new levelsof some form of of money that
(14:49):
isn't at the same level as theprevious one. Is
Tad Schnaufer (14:51):
there any other, uh, precious metal or some other
resource that could replacegold? Is there anything that
has, you know, obviously silveris, like, ranked below gold,
but, you know, some. As peopletalk about other metals, is
there anything that competeswith gold?
Will Parker (15:06):
Well, there is a lot of debate on this. I
personally don't believe so. Imean, historically speaking,
gold has been the highest formof physical money, going back
1000s of years. There are othermetals that are being mined that
weren't previously mined.
There's other forms ofcommodities and other forms of
(15:29):
physical product that could be areplacement if that happens. I I
don't see it happening at themoment, but
Tad Schnaufer (15:41):
it is possible, right? So the gold is kind of
the try and true method for, forsure, the most secure, right? So
with that in mind, how do wemove forward? So we have, like,
Russia's war in Ukraine, youhave these conflicts. How's that
affecting gold reserves aroundthe world, and where are the
major and how much mining isgoing on? Are we still seeing a
(16:03):
lot of
Will Parker (16:03):
gold mines? Yes, there are countries who are very
well known for their mines.
Russia has substantial goldmines. Australia has substantial
gold mines. United States does.
China, while it doesn't havemany as much confirmed reserve
gold reserves and the ground itsoutput is tremendous compared
(16:27):
to, say, like, what Russia isproducing from their known
reserves. So I think there is amajor push for countries to to
mine their gold. Um,particularly Russia and China.
Now, there have also beenreports and discussions that a
(16:48):
lot of the gold that is beingmined in particularly Russia and
China, is kind of in the shadowsystem, where it's not being
reported on a global scale, sotheir reserves could potentially
also be larger than what'sreported and the leading
databases that track it,
Tad Schnaufer (17:06):
and could they, in a sense, flood the market,
devalue the devalue gold?
Will Parker (17:12):
I guess that is possible. We've seen it with
other types of assets, but I Ipersonally don't know why they
would do that, or if it would bepossible, or if it, you know if
it would be effective if theydid choose to do that. So
Tad Schnaufer (17:31):
the BRICS nations have created some of their own
central banking and again, todirectly compete with the US. Is
this? Is this gold reservesacross the different members of
the BRICs? Is that helpingestablish that competitive bank?
Will Parker (17:44):
I think it is yes, and it's all about investor
perspective. So the morereserves that they have, the
more credible their financialsystems will appear. And
Tad Schnaufer (17:56):
when you say investors, are you talking about
other nations or just largebusinesses like Microsoft or
something. Who do you mean byinvestor? Well, it could be
Will Parker (18:04):
populations. It could be hedge funds. It could
be major corporations, any, anytype of investor who chooses to
park their assets their theirvalue in those countries, or
chooses to use those countriesto produce their output in
Tad Schnaufer (18:23):
particular, and then also the country's
currencies, right? So whichcountries, which, which
currencies are actually trustedbased off of respective gold
reserve?
Will Parker (18:32):
Yes, it's a component of the currency's
credibility.
Tad Schnaufer (18:36):
And then, uh, lastly, do we see any major
exchanges of gold otherwise,other than the BRICS nations
increasing, are there any otherincreases or major decreases on
the world stage today?
Will Parker (18:48):
I would need to look further into that, and my
focus has been particularly onBRICS, because of their major
emerging economy status, and alot of investors are wanting to
flock to invest into thosecountries. So that's been my
particular study. I would haveto look to see if there's other
(19:09):
nations that have that kind oflevel of gold reserves and are
increasing at that rate. So Ican't necessarily answer that.
Well,
Tad Schnaufer (19:19):
what's pulling investors away from the Western
markets, which are a little bitmore stable and, you know, more
established?
Will Parker (19:26):
Well, I wouldn't say they're necessarily being
pulled to the fullest extent,but it's all about opportunity.
So emerging markets, they havepotential for growth, while,
say, like the g7 nations whowere advanced, who might have
reached peak growth, they mightnot have as much opportunity to
(19:50):
have a return on investment.
Tad Schnaufer (19:54):
So the BRICS nations are growing would be
growing faster than thetraditional, maybe the
traditional. National Westernmarkets, so there's more
opportunity there for largerreturns.
Will Parker (20:05):
I would say yes, because they have a large
population. The BRICS populationhas been reported of over um 41%
of the global population. Sothat's a huge consumer base, and
they already have 31% of theshare of the global economy in
(20:27):
terms of GDP.
Tad Schnaufer (20:29):
Okay, interesting. You know, I have to
ask before we wrap up. So whatgot you interested directly in
gold? Well,
Will Parker (20:35):
I, I'll keep going back to an investor's
perspective. I have looked intothe finances of the United
States, I see the currency base,the supply continuing to expand.
I see the national debt growing.
I see more reliance on foreignforeign loans, foreign
(20:55):
investment. And it's kind ofscary, and So gold is a very,
very safe asset tocounterbalance those types of
risk. And that's what got meinterested in gold, really,
Tad Schnaufer (21:12):
so that it's really a solution to a problem
that you see developing. I thinkso yes. So what would you say to
a US decision maker, a economicpolicy leader. What do they need
to do with gold going forward?
Let's say next 510, years,
Will Parker (21:29):
if, if it were my decision, and I would tell
somebody else making thatdecision that higher reserves
are better and they providecredibility. They can the larger
gold reserves can be used intimes of instability to
stabilize the currency, or as aloan of last resort, collateral
(21:49):
for a loan of last resort.
Tad Schnaufer (21:51):
So then why? You know, the US is obviously a very
rich nation, so why wouldn't wejust buy a bunch more gold, if
it's if it has those effects,why not just keep a massive a
larger obviously, we have alarge reserve, but why not more?
I
Will Parker (22:02):
think there's other focus and priorities. There have
been mentions of addingcryptocurrencies and to our
strategic reserve and things ofthat nature. And some people
might believe that that is areplacement for that. But if it
were me, I would stick to aphysical asset that doesn't rely
(22:23):
on power to uphold its value,that doesn't rely on counter
parties or anything of thatnature. And that's a solid
asset, a solid physical assetwith, you know, historical
perspective of maintaining itsvalue for over 1000s of years.
Tad Schnaufer (22:45):
When is any closing comments as we look, as
we look forward into thedevelopment of gold reserves
across the BRICS nations?
Will Parker (22:52):
Oh, I would just, you know, ask policy makers to
continue looking into thesubject, and to look at the
trends in the global economy,and look at the historical
events that have taken placearound gold used as wartime
financing, gold used as tostabilize the currency, and all
(23:17):
the great benefits that Gold canbe used to protect the nation
and to ensure the wealth of anation. Well, thank you so much,
William. Thank you.
Glenn Beckmann (23:32):
There you have it. A conversation between GNSI
tad schnaufer and William Parkerfrom USF and the author of a
GNSI decision brief titledassessing BRICS gold holdings.
Thanks to both of them forjoining us today. Next week, on
at the boundary, we'll beannouncing our next GNSI
Research Initiative. GNSI SeniorResearch Fellow Dr Rob Burrell
(23:56):
will lead the new initiativecalled the future of warfare,
and he'll be our guest nextweek. Rob has been a guest
previously on the podcast, andwe're really looking forward to
having him back. Thanks forlistening today. Be sure to like
and subscribe to the podcast.
We're available on all the majorplatforms, including Apple
podcasts, Spotify and Amazonmusic, and we're also available
(24:16):
on the GNSI YouTube channel,we'd appreciate a like, follow
or subscribe, wherever you mightfind us
that's going to wrap up thisepisode of at the boundary. Each
new episode will feature globaland national security issues we
(24:38):
found to be worthy of attentionand discussion. We hope you
enjoyed the show today. I'mGlenn Beckman, thanks for
joining us, and we'll see younext week at the boundary. You.
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