Cassiar Gold Corp. (TSXV: GLDC, OTCQX: CGLCF)
Revitalizing the Cassiar Gold District in British Columbia, Canada
The relationship between gold and the US dollar has been the subject of a theory referred to as the Reciprocal Gold Theory. This theory posits that gold’s value is inversely related to the strength of currency and economic confidence, acting as a mirror that reflects the stability or instability of fiat currencies. In other words, when confidence in fiat currencies weakens — due to excessive debt, inflation, or flawed monetary policies — gold’s value typically increases.
Thus, when evaluating gold as an investment, its monetary attributes cannot be overstated.
In November 2024, Michael Michaud, President and CEO of Red Pine Exploration Inc. (TSXV: RPX, OTCQB: RDEXF), provided a detailed overview of the company’s Wawa Gold Project during an interview with METALS 100, and announced a significant increase in the project’s mineral resources. Additionally, the company recently completed an 11 million CAD “bought deal” private placement. Red Pine Exploration owns 100% of the Wawa Gold Project, which has a total historic production of 120,000 ounces of gold, with the resource primarily derived from two deposits: Jubilee Shear and Minto.
While gold is certainly a monetary asset, it is not a form of currency commonly used for everyday transactions or payments by consumers because there is no such demand. Instead, gold often serves as an alternative or “Plan B” to fiat currencies, especially the US dollar. Despite being practically “useless” and generating no yield, gold remains indispensable.
Experts are widely in agreement that, given the current challenges facing the US dollar, gold’s monetary attributes will only grow stronger in the coming years and will be a substantial driver behind its rising value.
Many countries that utilize the US dollar as a reserve currency now face a paradoxical situation. These nations depend on the dollar for trade, meaning that a collapse of the dollar would not align with their short-term interests. However, at the same time, America’s deficit spending and inflationary policies are fueling global “de-dollarization.” If this predicament remains unresolved, more regions may turn to alternative reserve assets like gold, thereby further boosting gold’s safe-haven appeal.
The dollar’s challenges are not just evident in the gold market but also reflected in the surge of Bitcoin, which has been described as “digital gold.”
As Bitcoin recently surpassed the $100,000 mark, many analysts attribute the phenomenon to waning confidence in the US dollar and the Federal Reserve’s system. Like gold, Bitcoin also possesses monetary attributes but is much easier to trade thanks to the liquidity provided by digital platforms. This dynamic has even led Federal Reserve Chairman Jerome Powell to comment that Bitcoin is not a competitor to the dollar but rather to gold. Some US legislators have even proposed converting parts of the nation’s gold reserves into Bitcoin.
However, the long-term potential of gold as an investment remains undisputed.
Peter Schiff, Chief Market Strategist at Euro Pacific Asset Management, strongly criticized the proposal to shift gold reserves into Bitcoin, calling it “the greatest monetary error” and even “an act of treason.” He emphasized that gold is the ideal reserve asset because its deep markets can easily absorb any selling pressure. As for gold price projections, Schiff firmly believes gold will not drop back to $2,000 per ounce during his lifetime. Instead, he predicts that the price could double or even triple from current levels.
