Gold’s Role in America’s Financial Reset

We pick up today with Part 2 of Uncle Sam’s Ulterior Motives… or: How to erase your egregious debts by screwing over everyone else.

If you missed yesterday’s Part 1, you probably should check your inbox because it will put today’s dispatch in the proper context.

In short: There’s a new thesis running around, put forward by a Russian advisor to Vladimir Puttin, that foretells of America surreptitiously using stablecoins and gold as a way to reset America’s broken monetary system.

Doing so would allow America to save itself, but it would undermine the rest of the world…

America has already done something like this twice before (in the 1930s and 1970s), so… third time’s a charm, right?

Yesterday, I detailed how Uncle Sam might use stablecoins to erase a large chunk of America’s unsustainable $37 trillion in debt—a possibility I’ve mentioned a few times in the last several years.

Today: How to use gold to help that process along.

Right now, America’s IOUs surpass $37.5 trillion, or roughly 125% of GPD. It’s what you’d expect of a place like Argentina or Venezuela or Zimbabwe and other countries where substandard government ruined the economy through egregious borrowing.

America also holds more than 8,133 metric tons of gold. In theory.

No one knows for sure since the Federal Reserve, which oversees America’s golden hoard, has not allowed for a full audit since the 1950s, despite Congress demanding such an audit on numerous occasions. So maybe the gold really does exist… maybe it doesn’t.

But for Schlitz and giggles, we’ll pretend all the gold is real.

America carries that gold on its balance sheet at $42.22 per ounce, a price set in 1973. At that price, US gold reserves are worth about $12 billion.

Thing is, though, gold prices today are $3,800 per ounce.

Meaning the real value of America’s treasure chest is $1.1 trillion.

Big difference.

Very big.

Back when FDR confiscated gold in the 1930s, he immediately and by executive order, repriced America’s gold at $35 per ounce—a 69% increase over the then pre-existing price of $20.67.

And just like that, FDR created vast new wealth for America that stabilized a troubled dollar.

This isn’t new and novel and untried.

Lebanon, Germany, Italy, and South Africa, among others, have all done the same thing in our lifetimes.

Over the history of man, gold has forever served as the salve to cure currencies of the diseases governments inflict upon them though political ineptitude and corruption. No reason that changes now.

In modern America, Prez. DJT could very easily sign an executive order to reprice gold (I mean, it’s not like he doesn’t know how to rule by executive order; he has issued more than 200 EOs thus far in his second term).

Such a repricing isn’t some hypothetical what-if.

Treasury Secretary Scott Bessent has stated more than once that the US needs to monetize its balance sheet—meaning repricing its gold, oil, and mineral reserves—because doing so would free up cash.

Think of it like refinancing your home. Your house is carried on your personal balance sheet cost. But five or 10 years later, the real price is lower than your balance sheet cost… So, you refinance the home and you unlock all this trapped equity you can then use to buy a bass boat or holiday in St. Tropez, or whatever.

That’s what an executive order would do: free up a ton of cash that’s currently locked away inside underpriced assets on America’s balance sheet.

If DJT reprices gold to, say, $5,000 per ounce, then he unlocks an asset worth $1.4 trillion. Reprice gold to $10,000 and he can legitimately tell Americans that he has created $2.8 trillion in wealth just “by being bigly smart with the gold—no one else was this smart!” (I’m channeling my inner Trump.)

Of course, nothing is free… and Team Trump would be playing that angle, for sure.

Repricing gold would devalue the dollar, potentially dramatically, which would devalue existing debt… making it easier to pay down the debt or manage interest payments with newly inflated dollars.

The losers: dollar owners. Greenbacks in their bank accounts and wallets would collapse in terms of spending power, and would plunge relative to other, major world currencies, particularly the euro and the Swiss franc.

The winners: Uncle Sam, who unlocks vast wealth and sees the relative value of his debt decline (newly inflated dollars America pulls in from tax payments and whatnot would buy back more debt, or stretch farther in terms of debt repayments).

Gold owners win, too, since the value of the metal they’ve squirreled away soars.

Another potential loser: Gold owners, which sounds odd, given that I just claimed they’d be a winner. The stink here is that we’re talking about the US government, which, as I pointed out at the top of today’s and yesterday’s dispatch, always has ulterior motives that benefit the government while screwing the governed.

As part of a gold-price reset, Trump’s executive order could very well impose restrictions on private ownership so that America captures most of the gain—a very Trumpian/American move, for sure.

Like FDR, Trump could confiscate gold first—demanding it be turned in to local banks under penalty of imprisonment or large fines—and then reprice the metal later. That way, the government captures the vast bulk of the wealth from the repricing while private owners are screwed. (All the more reason to hold gold offshore, out of Uncle Sam’s reach… which my colleague Ted Baumann will be covering in this space tomorrow.)

Of course, the big question: Will any of this happen, El Jefe? Or are you just being paranoid and parroting Russian propaganda?

Will it happen? Who knows? But it’s certainly a possible, potential path forward for America to manage a debt load that is no longer sustainable and growing more problematic every year.

Russian propaganda? Again, who knows? But when you have high-ranking members of the Trump administration openly calling for a weaker dollar… openly stating that America needs to monetize its balance sheet… and when you have Congress suddenly excited by stablecoins (part of yesterday’s dispatch)… well, I would say the Russians are probably just reading the writing on the wall and aren’t shy about connecting the dots for anyone who wants to listen.

But I’m certainly not parroting the Russians. If anything, they’re parroting me, given that I’ve been writing about this possibility long before a Russian advisor popped off about it.

All I can say is what I always say: Buy gold. Buy bitcoin. Buy Swiss francs.

The reckoning draws closer by the day.

The whole world sees it… but too many Americans don’t.