Stockman Warns as China Ditches Treasuries and Bets on Gold

What We’ve Been Saying About Gold and Money!

We are proud, not embarrassed, to have taken most of today’s commentary directly from someone else.  We always like it when someone with a national platform makes the same points that we have been making about gold and money.

As President Reagan’s Director of the Office of Management and Budget, David Stockman has credentials that spell “serious.” He did all he could and more to reign in the reckless gusher of red ink that has become familiar as a daily fact of Washington, DC life.

In a recent commentary, Stockman points our what we have been highlighting, that China has aggressively reduced its holdings of U.S. Treasuries while accumulating gold, thus signaling deep skepticism about America’s exploding national debt.

Stockman writes that Beijing has dumped approximately $448 billion in U.S. Treasury securities over the past five years.  Its official holdings dropped from $1.1 trillion in March 2021 to just $652 billion by March 2026. 

During the same period, China increased its official gold reserves by 19 percent, from 1,948 tons to 2,313 tons. On climbing gold prices, China’s gold holdings have skyrocketed by roughly $230 billion.

Stockman cites J.P. Morgan’s declaration— “Gold is money. Everything else is credit”—to underscore Beijing’s preference for “real money” over U.S. government paper. Even China’s communist leadership, he notes, appears to grasp this distinction more clearly than Washington’s current policymakers.

With U.S. public debt already approaching $40 trillion, Stockman warns of a projected $142 trillion increase over the next 30 years, pushing the total to $182 trillion by 2056 under optimistic Congressional Budget Office (CBO) assumptions. 

These rosy projections assume perpetual full employment, no recessions, stable low real interest rates, ironclad fiscal discipline, no new spending programs, no entitlement expansions, and no additional tax cuts.

Such assumptions, Stockman argues, are fantasy. Introducing even modest realism—periodic recessions, higher interest rates, or continued spending growth—would drive the debt toward $200 trillion or more by mid-century, nearly double current global GDP. 

With traditional buyers like the Federal Reserve and China stepping back, Stockman questions who will absorb the coming flood of new Treasuries.

The bottom line of our repeated assertions and this piece is a stark warning: America’s addiction to debt is unsustainable, and major international players are already repositioning. 

We urge you to take reasonable steps to protect yourself with gold and silver as U.S. debt becomes completely unmanageable.