El Salvador's $3 Trillion Dollar Gold Claim: A New Front In The War on Gold
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Hi everyone,
You may have seen the news circulating on social media, in which El Salvador’s president Nayib Bukele recently claimed the country has potential gold reserves worth $3 trillion dollars. This story has quickly gotten a lot of attention, not least because El Salvador adopted Bitcoin as part of its national reserves a couple of years back.
A single tweet (shown above) sharing the news has been seen more than 21 million times already, and liked over 212,000 times, in less than 24 hours. Naturally the Bitcoin Bros were quick to jump on the announcement as a clear argument against owning gold as a wealth preserver. The implication? These massive reserves will greatly increase the available supply of gold, which in turn will drive down its price. Bukele himself tweeted a message to this effect.
So, what’s the truth? Is the gold price set to crash due to this monumental discovery? Judging by the number of comments explaining how 'Bitcoin fixes this' underneath the President's tweet, you’d certainly think so. All this really proves however is what a lack of understanding the 'have fun staying poor' folk possess when it comes to gold, gold mining, and also, finance in general.
For a start, claims about magical gold reserves from developing nations are nothing new. Perhaps you remember 2 years back Uganda's claim to have made a $12 Trillion Gold Discovery. A figure so high it amounted to 266 times their GDP!
So how did it turn out?
Well, spoiler alert...but Uganda remain one of poorest nations on the planet and as of yet, no further plans have been made to recover any of that claimed gold. I have seen many other similar claims over the past decade. They all have a similar narrative. I have even seen stories claiming that they will soon be mining gold on asteroids! Flat earthers, hold my beer!
My point is, this ain't my first rodeo when it comes to such narratives, so clearly El Salvador’s claim requires a great deal of scrutiny. But first, let’s just remind ourselves of why we should be dubious of any such claim to begin with, and why we should always expect it to turn out to be propaganda, until proven otherwise. Then we will move on to my analysis of what evidence exists for El Salvador’s own recent claim, then finally, discuss what the true intention behind the announcement might in fact be.
Why Mining Gold Is No Simple Feat
For those unfamiliar with the industry, gold mining is one of the most challenging and expensive endeavours a company can attempt. To begin with, you have the huge problem of simply finding the gold, and then mapping it’s geography to see if it is economically viable to extract.
This process of finding a viable reserve is a long and gruelling, with the vast majority of exploration efforts ending in failure—almost always a costly failure. For every company that manages to find gold, hundreds of others walk away empty-handed—along with the investors and speculators who backed them.
The reason for this, of course, is that gold is exceedingly rare in the Earth’s crust (see chart above) and most of the major, cost-effective discoveries have long since been made. What’s left is gold that is extremely costly to both discover and extract. Which is why most exploration projects turn into money pits for the shareholders.
Even when a company discovers gold however, the process of turning those underground reserves into profits is fraught with challenges. The gold mining industry is expensive, risky, and highly technical. Only a handful of companies, who have the most experienced management teams and operational expertise, manage to make consistent profits in precious metals mining. The initial outlay often runs into the hundreds of millions, and costs of extraction and processing are huge.
Even using the most modern technology and techniques of extraction, a poor mine will still only deliver 0.02-0.04 grams of gold per tonne of rock. Great mines might achieve 1-2g per tonne. But to even get to that stage in which a company is able to process rock, a trial of Hercules is first required. It might sound like I am exaggerating, but I really mean it. Gold mining sucks!
From the initial exploration phase to actual production, the process now takes on average 20–30 years before mining commences—furthermore—this journey requires hundreds of millions of dollars in investment, and involves considerable risk.
At any point, the project could fall through due to technical, financial, or environmental challenges. Meanwhile, operating expenses and input costs go up, the entire time. This is why mining for gold is such a terrible business! Even those who work in the industry will openly admit to that. It’s also why people spend so much time studying the industry trying to pick winners, from the many losers. It certainly isn’t for the faint hearted either for an investor, or a would-be miner.
This is why what makes a one ounce gold coin so valuable, in that it takes decades of time, effort and money—which is best understood as energy—to extract. So within a single ounce of gold there is a huge amount of stored energy and time, which are man’s two finite resources. For the mining companies, a tightrope must be walked at all times to ensure the cost of the tremendous amount of energy required to find and extract gold, doesn’t overwhelm the operation financially and render them unprofitable.
A good way to understand this is looking at a key industry metric, the All-In Sustaining Cost (AISC). This represents the break-even cost for a miner to produce a single ounce of gold. It accounts for all the expenses involved including exploration, development, extraction, and environmental cleanup. If the gold price falls below a companies AISC, they either have to reduce their costs, have the gold price go higher, or fail.
The problem for companies is that the costs only go up. Whilst the world’s largest mining companies, like Barrick Gold and Newmont, typically have the lowest AISCs thanks to economies of scale—even they are beginning to struggle. Currently, their AISCs ranges from $1,400 to $1,800 per ounce. This is up from around $1100-$1400 an ounce just a few years ago.
Clearly AISCs are rising, and fast. The cost of energy, raw materials, labor, and compliance with environmental regulations has surged in recent years. Depleting mines and fewer new discoveries add to these challenges. Take Australia, once the world’s top gold producer, for example. In the last quarter, the average AISC for Australian gold miners increased 9.5% from the previous quarter.
For smaller gold miners with less efficient operations, the rising AISCs are a huge threat, and if gold falls back to around $2000, the vast majority would go out of business. So now you know why so many mining stocks are today trading at price levels comparable to when gold was nearly $1,000 cheaper. The simple fact is their costs are skyrocketing, and so despite the rising gold price, their profitability is going down—not up.
El Salvador’s $3 Trillion Claim: A Closer Look
So now I’ve added a little bit of colour to the discussion, let’s move on to my analysis of El Salvador’s $3 trillion dollar claim. It didn’t take much digging to expose this one (pun intended). In fact, it took me about 2 minutes.
First, let’s remind ourselves what the actual claim was, and who made it? This came from the countries President who was making a speech arguing for a repeal of a mining ban that El Salvador has had in place since 2017.
It was during this speech in which he said “studies show El Salvador potentially has $3 trillion in gold alone.” He also said "God placed a gigantic treasure underneath our feet". So putting aside the discussion around the mining ban, let’s explore what underpins his claim? I looked at all the available articles and here is what I found out.
The "Study": The claim is based on an unspecified, unreleased study. According to this mysterious analysis, a yet-to-be-named tract of land supposedly contains $131 billion worth of gold.
The Math Problem: They further assert that this land represents only 4% of the total area available for mining. Using this as a basis, they extrapolate that the rest of the country’s reserves could be worth an additional $3 trillion.
The Punchline: To cap it off, the President then insinuated on X that their invisible mountains of gold will be used to flood the global market, driving down prices—though no timeline, depth, or feasibility is provided!
And that’s it. That’s the story.
Clearly it was propaganda, but I knew that before I even looked into. Could it be there was more at play than simply Bukele trying to convince the people of El Salvador to accept the removal of a mining ban? My suspicion is there was, given how the story was then used by Bukele to insinuate that they were going to flood the market and drive down the price of gold.
This attempt to detract from gold was clearly aimed at a Western audience given it was written in English rather than Spanish. So let’s just recap where we are: we have the president of El Salvador, making wild claims about mega gold reserves, a naive audience who accept this with zero scrutiny or understanding of how gold mining actually works, and then finally, a tweet used to implant the idea that the gold market will soon be flooded with new supply—which will somehow destroy its price. All of this is then propagated across social media machine, implanting the idea that gold is dead and naturally they should probably be buying bitcoin instead. Because bitcoin fixes this!
Hmm, I smell a rat.
What Is Really Going On?
First, I should point out the timing of the announcement. It came just a few days after another huge advocate of bitcoin made a similar attempt to convince the world that gold is going to be replaced by digital code. Of course, I am talking about Michael Saylor, the pied piper of the Bitcoin bros and a key asset of the U.S. deep state. As I have pointed out many times before, Saylor’s company work’s with the Department of Defence, the U.S. military, the U.S. army, the Department of Homeland Security, and NASA...to name but a few. He is also a futurist who spent much of the past decade promoting biometric digital ID’s.
So it’s fair to say his adoption of Bitcoin for his company Microstrategy was scripted and something the U.S. banking-intelligence-military complex desired. I believe the same to to be true of El Salvador, by the way. For context, El Salvador is one of many countries in Latin America which has been strongly influenced by the U.S. over the past few decades. The CIA fermented a civil war there, in fact, following which they installed numerous dictators who would allow them to come into the country and use it as a cocaine factory. If you want to know why the country had the highest homicide rate in the world, and was filled with gang members, look no further!
Former DEA agent Celerino Castillo alleged that during the 1980s Ilopango Airport in El Salvador was used by Nicaraguan Contras for drug smuggling flights with the knowledge and complicity of the CIA. These allegations were part of an investigation by the United States Department of Justice Office of the Inspector General.[1] Castillo also testified before the House Permanent Select Committee on Intelligence. Between 1996 and 1998 the Central Intelligence Agency investigated and then published a report about its alleged involvement in cocaine sales in the US. This was prompted by the journalist Gary Webb's report in the San Jose Mercury News alleging that the CIA was behind the 1980s crack epidemic. - Wikipedia
But going back to Saylor’s recent video. Click here to see what he had to say.
So essentially, he is pushing the narrative that if the U.S. buys up 25% of the Bitcoin supply—it will somehow demonetize gold as an international reserve asset—and force other nations to cowtail once more to America and their dollar. Basically Saylor represents ‘Team America’. That the bitcoin community cheer this guy on, as he pretty much tells them they’re asset is now a tool for U.S. dollar hegemony is, quite frankly, embarrassing.
Now I don’t think Saylor seriously believes what he says would actually succeed in delivering the outcomes he suggests. Given it insinuates the U.S. has the power to force a world that is buying more gold than ever before to accept this Bitcoin-Dollar—which he claims would make gold worthless. Clearly this is insane. But again, none of this is about truth, or reality, it’s about convincing you, the audience, of the underlying message. Which is to ditch gold, and buy Bitcoin instead.
That a few days after this interview we suddenly see this story out of El Salvador, again with the suggestion that gold is an inferior asset to hold given they could now “flood the market”, is no coincidence. It’s headline-grabbing statement’s like these that are being used to target the everyday man and woman on social media, in order to sow doubt in the mind’s of the everyday man and woman about gold’s future. The solution of which, of course, is then given as bitcoin.
Now whether that is correct or not is up to the individual to discern. The problem is most people have no idea what is really going on, and so will accept whatever propaganda is given to them. They have no idea about the Bitcoin-Tether-debt machine and how a rising Bitcoin price is going to be used to support U.S. debt expansion. And that the very thing they’re being encouraged to adopt (bitcoin) in order to escape the U.S. debt ponzi, is in fact now going to help perpetuate it.
This concerted effort to promote bitcoin and detract from gold clearly serves a broader geopolitical goal. Moving forwards the major buyers of US debt are not going to be other nations, it’s going to be the everyday man and woman. Unbeknownst to them of course, given they won’t be doing it by buying treasuries, they will be doing it through their bitcoin purchases—using the mechanism I have described at length in my recent work.
This isn’t just about U.S. debt expansion—it’s part of a larger, escalating global conflict. As I’ve highlighted in previous articles, nations like China and Russia, with their significant gold reserves, pose a direct challenge to the U.S.'s debt-based economic model. Every time the dollar loses value, it reduces purchasing power for those holding it, while simultaneously benefiting those who hold gold. This dynamic explains why a war on gold is not only underway but necessary for the U.S. to maintain its financial hegemony.
Yet, this is a war the U.S. is destined to lose. The rising price of gold cannot be halted as long as the relentless printing of dollars—and other fiat currencies—continues. The central banks are responding to this, as evidenced by record gold purchases even among America’s European allies. Some of which have even acknowledged, privately, an impending monetary reset.
But it’s not just central banks, its wealthy individuals also. For thousands of years, gold has served as a cornerstone of private wealth preservation by the world’s wealthiest families to safeguard their financial standing through every upheaval in history. As well as land, art, and property—all things Michael Saylor is tell YOU that you should be replaced by Bitcoin.
Their strategies are not going to change, clearly, Historically speaking they also have a 100% success rate of being on the right side of financial history when it comes to using gold and real assets to survive financial reset. So who is Saylor actually speaking to when he says these things? Or Bukele, for that matter?
It seems to me these messages are in fact designed for us and us alone. The central banks and the world’s elite, they already own plenty of real assets, including gold which clearly the next system will be based upon. So just to recap, the central banks and the world’s elite are using gold to protect themselves as well as other real assets, and meanwhile we’re being encouraged to do the opposite. To not buy gold, to avoid real assets and to instead...buy and HODL Bitcoin.
Well, they did promise us that we would own nothing, and be happy, right? For those who hold Bitcoin a good question to ask at this stage is as follows; knowing what you now know about how Bitcoin is being used to support U.S. debt, does it seem like a reliable preserver of wealth when that very system collapses? Or will it simply tether you to the sinking ship it promised to save you from?
For me, the answer is clear. It will be like a nuclear reactor going into meltdown, the rods at the heart of it will be the first things to go. This is why there’s such a strong push to convince people to “HODL” and channel their investable wealth into it. Not only does it provide further fuel for this toxic US debt-reactor, it uses our capital to achieve it. Ensuring that the younger generations especially, really will wind up “owning nothing” in the aftermath of the financial reset. This is critical, because the poverty that ensues will facilitate forced enrolment into both digital ID’s and CBDC’s, locking as many desperate people as possible into a system of total control.
Which makes complete sense to me. The stars really do align on this one, as it has always seemed obvious to me that the only way people would willingly embrace a technocratic system of control is by walking into it of their own accord. As I observe the landscape today, there appears to be just one vehicle capable of achieving that transition. While there may be opportunities for short-term profitability within this system, I suspect that once a critical mass of adoption is reached, the long-anticipated reset will be enacted.
On the other hand there are no guarantees if the system will even hold together long enough for a controlled demolition to be executed. Their growing desperation underscores a reality that the current system is no longer stable. It stands on the edge of collapse, where a single exogenous shock could trigger a cascading chain reaction, unravelling the entire structure and leading to a catastrophic global default. At this point Exter’s pyramid will come down, wiping out the value of financialized assets and assets tied to debt.
In stark contrast, gold will remain. A timeless constant—an asset not only capable of preserving its value within the current system but also primed to form the foundation of whatever monetary order emerges next. Its role in the new paradigm is not speculative, it is a historical inevitability and what we see playing out in real time as central banks scramble to increase their reserves.
Despite this, there are many agents of deception who will seek to derail our own attempts to survive the coming reset. Which is why I think you should be aware of it and whose interests it really serves to pump digital assets. Not that they cannot be used for speculation, but there is a big different between a speculation, an investment and a wealth preserver. Getting those things wrong at this stage in the game could turn out to be catastrophic in the long run. Fortunately, there is no speculation when it comes to gold.
Gold has always been the safe harbor in times of great financial upheaval, and this time will be no exception.
Enjoy my research? Worried about reset or how to invest going into it?
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Thoroughly researched & well written article.