The Power of Gold
“You (voters & investors) have to choose between trusting to the natural stability of gold and the honesty and intelligence of members of the government. And with all due respect for these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold.”
- George Bernard Shaw
By Gregg Wall (10-11-2025)
Gold is on a tear and silver more so, as both precious metals closed out the week $4,017.79 and $50.15, respectively. Metals, Bitcoin, and some unencumbered fixed assets have enjoyed skyrocketing ascent this year, as central banks and investors have sought safe haven assets and to diversify out of fiat currency. The U.S. dollar, in particular, has lost considerable value this year, with ranges given between minus ten and minus thirteen percent. The flight out of fiat currency is a reflection on the poor management of fiscal, monetary, and tax policy, along with skyrocketing national debt. Keep in mind this is all happening, allegedly, under that mightiest of economic models: capitalism, dereg, and rabid libertarianism.
Who is responsible? In America you have to look at the steady rise of the national debt from Reagan forward, many would go back further to Nixon’s decision to pull the dollar off the gold standard… but ultimately, the catastrophic rise in the national debt gets shared between Dems, Republicans, oligarchy, and Wall St. America, however, is not alone. France has been rocked with fiscal instability, debt, and Macron has gone through five prime ministers since 2022. Macron’s recipe for bringing down France’s debt… austerity and the cutting of public services isn’t sitting well with the Left and Right political parties and certainly not the French people. Meanwhile, in Argentina, rabid, chainsaw wielding libertarian… and self-proclaimed anarcho-capitalist, President Milei… was bailed out by the Trump administration/US taxpayer this week with a cool $20 billion. Argentina, too, under libertarian management, is drowning in a sea of debt. America’s latest bailout is not only out of the kindness of Trump’s cold heart, but to prop up, you guessed it, a billionaire and fund managers (including BlackRock, Fidelity, and PIMCO). Psycho boy, Milei, has an election around the corner, after recently getting crushed, and Trump hopes the American bailout will keep this far-right failure on the throne. The fact that Argentina is the most frequent recipient of IMF bailouts must have not come to President Trump’s attention, as he shovels billions into what is likely to be a very bad bet. The terms & conditions of the bailout have not been released to the American public.
Debt, devaluation, debasement, and inflation it all generally leads to one thing: a loss of faith in a currency as a storehouse of value. Hence, the flight to quality: gold, precious metals, and even some works of art. The devaluation or debasement transpires when nation states print up money, jack up the money supply so rapidly, that the currency loses value, loses it purchasing power through abuse. Weimar Germany is a classic example, just a little over a hundred years ago. Nation-states have also, historically into the present day, devalued their currencies to give themselves an unfair trading advantage, often at the expense of their own citizens and the public’s finances (Bank of Canada immediately comes to mind as one of but many examples). Nations -- let’s use the U.S. as an example -- print up the money to pay for bailouts, corporate welfare, fund tax codes that are advantageous to the predator class (while failing to cut spending simultaneously). Therefore, the explosion in debt. Empire, genocides, and war are also the beneficiaries of monetary benders or spending like a drunken sailor. Things go well until creditors and investors demand higher interest rates, refuse to rollover debt and purchase new bonds, nation-states no longer have an appetite to fund another nation’s debt, and then the noose, the debt service load (the cost to service the debt) explodes and begins to take on a larger and larger share of the annual budget and expenditures. When nations are financing both their budget, in part, and the debt service load with debt issuance and money printing, it’s a sure sign debt is out of control. America’s deficit for the most recent fiscal year, reported this week, is a catastrophic $1.8 trillion, with a record debt service load of one trillion-plus dollars.
The term debt trap hasn’t been used much lately, but it immediately comes to mind, as Trump throws the chessboard into the air and grinds the global economy relentlessly, seemingly on a wheel of tariff madness (as Trump attempts regain America’s former economic glory and set the nation's budget in order through a regime of regressive tariff taxation). Businesses can handle a great many stresses but chronic instability, even for the hardiest of businesses with gilt-edged balance sheets, can find the President’s bouncing tariffs routine too much to plan for. The result, businesses become conservative, hire less, lay off workers to hedge on expense and a possible downturn, hold up on CAPEX, and turn to automation so as to mitigate its greatest expense, labor. The labor market tightens up, consumers have less money to spend, the economy (already in recession for the bottom 60%) stumbles. As further distractions on an affordability crisis, a depreciating U.S. dollar, and a struggling economy, America sees endless chaos: the Epstein scandal, the government shutdown, genocide & wars live streamed daily, and the President sends U.S. troops into American cities as forces of occupation. Sheer insanity. Where’s the Third Amendment when you need it? Where’s the 25thAmendment when you need it? The tariffs & Trump’s instability surrounding economic policy are inflationary, further weakening the dollar and another key factor in the flight to gold.
Since Trump has come to power, inflation continues to climb. His promises on affordability dashed. Americans are faced not only with greedflation… corporations and monopolies jacking up prices for nearly six consecutive years and inflation expected to continue into 2026… but they are also faced with Trump’s tariffs, a dollar that is losing its purchasing power, and a government that is walking away from its obligations on Medicaid and the ACA (and for those buying private health insurance, they face skyrocketing premiums). All of these things, by the way, catastrophic debt, inflation, skyrocketing health insurance premiums, the crushing of animal spirits, wild extremes in setting tariffs, predatory monopolies, oligarchy, uncertainty around hiring and trade policy, and the flight to safe haven assets are in the long run contractionary. Americans are getting crushed to pay for Trump’s Big, Beautiful Bill or what I like to call, the Billionaire Welfare Act, which is a key reason for the government shutdown. With the American government coming unglued, the dollar depreciating & devaluing, and inflation climbing higher is it any wonder that Americans with the means are diversifying into gold and precious metals? A key problem: a great many Americans live paycheck to paycheck and are lucky if they have money for groceries each month; a great many Americans don’t have savings to diversify into gold and precious metals.
The only semi-responsible party, the Federal Reserve, appears to be capitulating to Trump’s demand to lower interest rates, at the same time inflation is hanging on like it’s the 1970s and Trump’s erratic tariff policy has yet to be fully felt. This Friday, Trump in a feud with China announced 130% tariffs. By the way, low-balled interest rates (in the face of rising inflation) … you guessed it, devalues the currency, depreciates the currency relative to competing currencies, which further explains the flight to metals. The FED and the United States dollar -- once the envy of the world, with the world’s exorbitant privilege -- is no longer enviable (at least with Donald Trump at the helm). The Federal Reserve must now choose between fighting inflation, on one hand, and controlling and mitigating the nation’s debt service load, on the other hand. There’s that debt trap I wrote of earlier. See also, the one trillion-plus dollar debt service load mentioned above.
By the way, the Federal Reserve’s efforts are a really crude way to fight corporate greed and Trump’s tariff polices; but since congress is worthless, and SCOTUS appears entirely corrupt, what other choice does America have? If we had responsible stewards of the economy and government, we’d want to rein in discretionary expenditures. And the big, throbbing, open flesh wound (aka a tidal wave of red ink) within America’s CRs and omnibus spending measures is empire and war spending. Medical spending… Medicare, Medicaid, and Obamacare… could also be consolidated, along with for-profit medical care, under Medicare For All. This means, if we follow the lead of Canadian & European peer nations, U.S. healthcare could be cut in half on a per capita basis. But good luck getting our highly corrupt congress to address the blank check for empire and war spending, and their solution to medical costs is to gut Medicaid and ACA subsidies (rather than address corporate and healthcare insurer greed). That’s on the expense side of the ledger. Notice, DOGE didn’t go there, because there’s too many billionaires, multinationals, and politicians growing fat off empire, endless war, big pharma, and healthcare. On the revenue side of the ledger, it’s obvious with the billionaire class hoarding a greater and greater share of the nation’s wealth and wages (along with monopolies & utilities, who sell essential products & services) that it's time for a progressive income tax code, the scrapping of the billionaire/corporate tax code, and a substantial wealth tax.
That’s fiscal… on the monetary side, the FED can use its platform to call attention and educate the nation on the national debt. Separately, in the future, the FED could stop buying US Treasuries under QE and ultra-accommodative monetary policies, as part of its dual mandate, maximum employment and stable prices. As interest rates continue to climb, investors shun the U.S. dollar & Treasuries, and Trump continues to seize power at the Federal Reserve, it’s a relatively safe bet that the president will reach for debt monetization, QE, and a low-interest rate regime to keep the nation’s debt and debt service load manageable at the expense of fighting inflation and price stability. Yet another reason to reach for the gold and silver. As we have all seen, since 2008, ultra-accommodative monetary policies have fed financialization, M&A, monopoly formation, skyrocketing asset prices, and private equity… resulting in economic instability, corporate greed, skyrocketing inflation, extraordinary pricing power on essentials goods & services, and dollar devaluation & monetary instability (see yet again, the present flight to gold). Is there any doubt that Federal Reserve policies, along with fiscal incompetence in congress, brought America to the point it’s at today? The FED and the Treasury could also call for a moratorium on the issuance of new debt, until congress gets its act together, adopts meaningful reforms, and makes the tough budgetary decisions that printing money has allowed congress to escape. The central bank and congress, as well as any politician, could call for a new Bretton Woods, where Western nations come together and agree to write-down a certain percentage of each nation’s national debt, slowly, gradually, methodically. A debt write-down coupled with fiscal reforms and penalties for failure to adhere to fiscal reforms, along with a substantive tax on great wealth… could provide the breathing room and the reset the West so desperately needs. A structural reset on an economic model, libertarianism, that seems to need repeated bailouts should also be addressed. Let’s face reality, laissez-faire and libertarianism… letting billionaires do as they please… has been a catastrophe (As a frame of reference, the Berlin Wall fell in November of 1989, there were less than 90 American billionaires, and U.S. national debt was under $3 trillion; today, the national debt is $42 trillion, including Trump’s Wall St bailout in 2020, and there are approximately 800 to 900 billionaires). By the way, the time to enact reforms is now before a crisis surrounding the dollar hits hard.
The flight to gold is the unwelcome knock on America’s front door; the flight to gold is a vote of no confidence in POTUS Trump and his policies.
And that’s this week’s story on the flight to gold, silver, platinum, et al., and the flight away from the once proud, almighty dollar… a currency America’s predator class, Trump, & congress seem hellbent on destroying. You know. The same the folks who know everything and give lectures on the Antichrist… and tell us… anyone who dares regulate AI is the devil.
Happy Halloween.
Copyright JM Hamilton Publishing 2025
