Gold Never Settles (But It Should)
Ron Paul

“Gold never settles.” The phrase sounds absurd – until you understand the modern financial system. In this Rio Reset exclusive, Dr. Ron Paul explains why settlement matters – and the motive behind the BRICS dedollarization plan…

Blythe Masters, former head of world's biggest bullion dealer JPMorgan's Global Commodities Group, once famously said, “Gold never settles.”

In order for this to make sense, you have to understand that, in financial jargon, "settlement" is the moment a transaction is finalized. The buyer's payment is accepted, safe in the seller's bank account, the seller has delivered, and there's no counterparty risk left. 

Now, read it again: 

"Gold never settles."

At first glance, this sounds absurd! Isn’t gold the ultimate settlement? You can't pay someone an American gold eagle for, oh, painting your house, then get buyer's remorse and reverse the transaction. There's no bank you can call to complain, no fraud hotline. In fact, gold is the only way to pay or get paid in the modern world without counterparty risk. 

Make sense?

Okay, now consider the source: Blythe Masters. Head of JPMorgan's Global Commodities Group. The inventor of the credit default swap.

Now it starts to make sense, doesn't it? I'll bet you a silver dollar Blythe Sally Jess Masters has never even seen an American gold eagle. 

How is that possible? How could the head of the world's largest bullion dealer make such an absurd claim?

A global economy built on IOUs and delay

Every day, 47-60 million ounces of gold are "traded" through the COMEX and London bullion market. Yet no gold ever moves!Nobody so much as sees a gold bar. Because, in our modern, hyper-financialized marketplace, we've replaced gold completely. These millions of ounces of gold flying around the world every day are just financial derivatives. They're contracts: commodities futures, leases and rehypothecation schemes.

That's how you can run the trading desk of the world's biggest bullion dealer without any familiarity with your product! 

When Mrs. Masters said, "Gold never settles," she was talking about the laundry list of financial derivatives that happen to have the word "gold" in their names.

And it’s not just gold. In the modern global digital economy, nothing really settles anymore – everything is deferred, refinanced, rolled over, rehypothecated or simply abstracted into a number of dollars.

How fiat currencies broke the link between money and value

Our dollar was once defined as 371.25 grains of silver, exactly the weight of a Peace Silver Dollar. Its name came from the thaler, its value from the metal it contained.

You can see the historical connection in language itself. In French and Catalan, the word for money is argent – literally, silver. In Japanese, 金 (kane) means both gold and wealth. These aren’t coincidences. They’re reminders that, for most of human history, money wasn’t a number on a screen. It was metal you could hold in your hand.

So what changed?

Simple: governments can’t control gold. But they can print promises.

The value of fiat currency depends entirely on trust – trust in future tax receipts, trust in central bank policies, trust that the next promise won’t be broken. As historian Niall Ferguson describes in his masterful book on the history of money:

“Banknotes (which originated in seventh-century China) are pieces of paper which have next to no intrinsic worth. They are simply promises to pay (hence their original Western designation as ‘promissory notes’), just like the clay tablets of ancient Babylon four millennia ago.”

First, money became a promise. Then finance followed.

Today, it’s more than just money. Pensions, Social Security, even institutional balance sheets aren’t built on assets but on assumptions. Projected returns, estimated taxes – and infinite trust. Nothing more than a heap of IOUs from the future, stacked high enough to touch the present.

Globally, we’ve abstracted everything – oil, labor, land, even time. And when Blythe Masters said “gold never settles,” she wasn’t just describing gold commodities contracts.

She was describing the entire financial system – where nothing settles, because nothing is real.

The global consequences: Exploiting the rest of the world 

Thanks to the dollar's role as global reserve currency, the U.S. sits at the heart of the world's commercial, banking and investment network. Remember, the world needs dollars for international trade. By extension, the dollar's dominance forced other nations to play follow-the-leader.

That meant turning natural resources into financial assets. Then turning those assets into contracts, and contracts into derivatives, and those derivatives into speculative debt instruments like collateralized debt obligations. This financialization wasn’t a free choice – it was the price of entry into the global system.

And that system wasn’t built to benefit everyone equally. It was built to extract. The U.S. acts as both dealer and referee. And in this game, the house always wins.

If your wealth exists entirely within the dollar system, it's no longer yours – it's subject to approval. From Russia to Iran to Venezuela, we’ve seen how easily that approval can be revoked. Reserves frozen. Access denied. Participation cancelled, entire nations barred from accessing global markets.

This kind of financial warfare is only possible because assets in the dollar system aren’t really property – they’re promises.

And the only thing easier than making a promise is breaking one.

BRICS nations are done playing this game. They're tired of IOUs, of synthetic wealth, of enforced dependency and of exchanging their resources for someone else's promises. They're opting out.

They want something different.

They want certainty. They want settlement. And that's what the Rio Reset is all about.

The Rio Reset: Rebuilding the global financial system the right way

The Rio Reset isn't BRICS announcing a new currency – as if the world even needs yet another unbacked promise to pay. They’re not out to make headlines. Instead, they’re doing something far more methodical – and far more dangerous to the dollar’s dominance.

They’ve rebuilt the global financial system from the ground up.

Custodians, payment systems, clearinghouses – all the invisible but vital plumbing that makes international trade possible. Designed to endure. A system where trade freely occurs, regardless of sanctions. That doesn’t require dollar clearance or SWIFT permission.

When the numbers don’t balance – when one country owes another for oil or food or fertilizer – they don’t settle in rupees, or rubles or bitcoin. They settle in gold. Not instantly. But finally.

Why gold? Because it's the one thing everyone can agree on when they don't quite trust one another. Remember, nations can play games with their currency value (China's notorious for it). And BRICS are not a natural alliance! Real metal. Delayed physical delivery is better than a thousand paper promises that never come due.

This isn’t innovation for innovation’s sake. It’s resilience by design.

And it leads us to the one asset that still speaks the truth.

Physical gold: The last honest asset

Gold isn’t a promise. It simply is.

Unlike fiat currencies or complex financial instruments, gold doesn’t rely on trust. There's no contract involved, no counterparty agreement. You don't even need a functioning digital infrastructure to transact in gold. Gold has no debt ceiling, no expiry date and (most importantly of all) no political allegiance.

It’s the only financial asset that settles a transaction finally. Without setting off a new round of promises. That's exactly what Bridgewater founder Ray Dalio means when he says gold is the only financial asset that isn't someone else's liability.

That’s why central banks are loading up on physical gold bullion for the last three years, setting new records for gold demand. It's not for returns, but for resilience.

In a world drowning in paper promises, gold is the only true escape hatch.

That's true for BRICS nations just as it's true for you and me.

Promises are cheap

By now, I hope you understand the phrase “Gold never settles” is both a warning and an indictment.

Don't misunderstand me, though. I'm not rooting for BRICS to pull this off. As problematic as the U.S. stewardship of the global economy has been, I really do believe China, Russia and India could make it much, much worse... Not just for us here in the U.S. but for everyone everywhere.

However, I really do understand their frustrations. The Rio Reset is a perfectly understandable response to a global economy built on foundations of paper and promises, where the rules can change from one day to the next.

If you've ever wondered why everything from gas to groceries, homes to hospital stays keeps getting more and more expensive? It's because those resources are, by definition, in limited supply. And promises are, after all, an unlimited resource. It doesn't matter how many promises the Federal Reserve or the federal government make – it won't increase the supply of food or fuel, nor will it build a home or a hospital.

BRICS have realized this, and I think it's time we take their lesson: If governments refuse to settle their accounts, individuals must take matters into their own hands.

Exchange some of those promises for honest money. True, enduring value that doesn't get devalued or disappeared by a bureaucrat's promises. Diversify your savings with real, physical gold.

Not the kind of gold that never settles – the kind that always has.

Ron Paul is a medical doctor, a retired Captain of the U.S. Air Force, an author who’s published 21 books and former twelve-term U.S. Congressman representing the state of Texas. He’s emerged as one of the leading voices challenging government’s addiction to deficit spending and the Federal Reserve’s wealth-destructive monetary policies. He works with Birch Gold Group to educate Americans about the threats to their financial futures, and how to protect themselves and their families. Outside of Birch Gold, you can find him on Facebook and X.

 

 

www.birchgold.com