Basel 3 is Killing the US Dollar and Bankster Gold Price Manipulation

King Gold: How Basel 3 is setting the stage for a gold market revolution and devaluing the Fiat Curreny System.

The introduction of Basel 3 regulations marks a pivotal shift in the global financial landscape, significantly undermining the Western Alliance’s ability to manipulate the dollar price of gold.

This regulatory change is evident in the stark price discrepancies observed on June 10, 2024: gold traded at $2,313 per ounce in New York, while fetching $2,402 per ounce on the Shanghai Gold Exchange.

This steepening divergence (see chart below) factually indicates a growing trend where physical gold is increasingly drained from Western exchanges and flowing to Shanghai, reflecting a market that revalues (RVs) gold higher and places less trust in the depreciating fiat dollar.

Basel 3’s stringent rules are thus unraveling the Western grip on gold prices, ushering in a new era of financial dynamics.

The introduction of Basel 3 regulations is a significant event for global banking, impacting the way banks handle their assets, especially gold.

This article examines how these regulations will affect the gold market, the US dollar, and the long-standing manipulation of gold prices by Western financial institutions.

Overview of Basel 3 Regulations

Basel 3 is an internationally agreed-upon banking regulation designed to make banks stronger and more resilient in times of crisis.

Also Read: Basel III Update: The Real Reason for Delayed Compliance Explained

One key aspect is the change in the net stable funding ratio for gold held as a tier 1 asset on balance sheets from 50% to 85%. This change aims to reduce the reliance on short-term, unstable funding and increase the use of stable, long-term funding.

Impact on Gold and Precious Metals Trading

The new regulations require banks to engage in longer-term lending, making it more expensive to hold unallocated gold (paper gold contracts and derivatives).

This shift forces banks to reduce their leverage in paper gold, leading to a reclassification of gold holdings. As banks reduce their paper gold positions, the supply of physical gold may become more constrained, potentially driving up prices.

Consequences for the US Dollar

Basel 3’s impact on the gold market also extends to the US dollar. As banks reduce their leverage in paper gold and increase their physical holdings, while the demand for US dollars, as bank assets, are decreasing.

This shift is weakening the dollar, as its value is often tied to the global confidence in US financial markets and institutions.

The Future of Gold Price Manipulation

Basel 3 regulations aim to curb the manipulation of gold prices by Western financial institutions.

Also Read: Clarifying the Basel III Accords – History, Key Banking Changes, and Impact on Physical Gold

By reducing the leverage banks can use in gold trading, the regulations create a more transparent and fair market. This change is leading to more accurate price discovery for gold, benefiting gold’s store of value and reducing the influence of speculative trading.

The Bottom Line

Basel 3 regulations are transforming the gold market by reducing leverage and increasing the reliance on physical gold.

These changes will likely drive up gold prices, weaken the US dollar, and end the long-standing manipulation of gold prices by Western financial institutions.