The World is Buying Gold Because It is Beginning to Notice

No one wants to get stuck holding the Old Maid!

“All the things the gold bugs said would happen…are happening”

– Tom Dyson, Bonner Private Research

The price of gold at all-time highs, which simply means that some people are starting to pay attention to deficits and debt, to the Federal Reserve preparing for another episode of Quantitative Easing (i.e., money printing), and to other central banks moving to protect themselves from the unbacked, irredeemable US dollar.

 That makes sense.  After all, global debt is now over $300 trillion.  That’s three times global productivity.

To focus in a little more closely, the Institute of International Finance, a banking trade group, says total global debt is $324 trillion.  That is 325 percent of global output or productivity. 

That’s an unsolvable debt overhang.  It is driving a world-wide reassessment of monetary reliability.  In short, the only way all that debt can be repaid is by printing money – money that becomes ever more worthless.  So anyone holding some other money-printing country’s bonds, like U.S. Treasury bonds, fears correctly that they are going to be left holding the Old Maid.  

That’s why countries like China are dishoarding U.S. bonds.  

China is dumping dollars and adding gold reserves because it knows what has happened and what is going to happen to the dollar’s value.  Others are following suit.  It is a global currency reset.  So in the days since the Fed thought it was cutting interest rates, 10-year US Treasury rate went up, not down.  30-year US Treasury rates went up, not down. 

It’s not all interest rates.  Note that China’s gold reserves really took off in 2022, which is when the US really went full-tilt on weaponizing the dollar: “Do what we say, or we’ll freeze your dollar/US bonds so that they are unusable.”  

The US might be able to freeze US instruments to punish its international opponents, but it can’t freeze gold.

Think about that not in an international context, but in a domestic one.  The US government has all kinds of tools of financial repression that it can use in a pinch to freeze your assets.  It can stop you from taking money out of the country.  Or it can insist that a portion of your bank accounts or retirement funds must be invested in US Treasury instruments that you otherwise wouldn’t want.  It can implement new taxes on withdrawals.  

Don’t think that as a US citizen you will be protected from financial repression that is visited already on foreign nations.  Remember for example, that when President Roosevelt criminalized gold ownership by Americans and repudiated Washington’s promise to redeem paper dollars with gold, the American people were hardest hit.  Foreigners could still get gold for their dollars… for a while anyway.

Our advice is clear. Take note of what the world is discovering, that the global debt overhang is unpayable.  There will be de facto and de jure debt repudiations.

You can’t go back sixty years and make the US government fiscally responsible.  But you can take steps today to protect yourself so that you don’t get stuck with the Old Maid!

Start by speaking with a Republic Monetary gold and silver professional.