Sorry, one more thing. It is known, factually, that each major nation has been balancing its gold reserves to equal 4% of gdp. I think Poland is the last to equalise. Anyway, this would lead one to surmise that the gold revaluation will be a x25 move. Thereby allowing all gold / gdp balanced countries with a sub 1.0x debt to gdp ratio to clear their deficits. Everywhere (except Canada and the U.K. who have almost nothing thanks to incompetent leadership). 3k x 25 = $75,000. You say $79k through another lens. Add in the trump go big factor and the 1.20 debt to gbp in the USA and it doesn’t take much to get to $100,000 an Oz of gold. Oh what a surprise Bitcoin is there too. Oh why don’t we just link them up. July. Basel 3. Less than 4.5 months away. Silver, even at 50:1 (which won’t work for long with a massive shortage and ground reserves at 9:1 gold) but even just at 50:1 that’s $2,000 silver. That’s a x60 move. Interested in your opinion 🙏🏻
Great article but there may be an even bigger game. Trump has already given a few hints: he has said he has a plan for the national debt and he has also floated the idea of scrapping income tax (more than once). Trump's plan could well be along the lines of what is proposed by Bill Still in 1996. I have linked Bill's documentary below (which is really excellent). The first 3 hours is the history of the 'money changers' (which we should all know) but the last 30 mins deals with what we can do now. Trump may have a plan - perhaps like Kennedy's silver certificates, or Lincoln's 'Greenbacks'.
I agree 100% with the rationale of your "Go big" comment and apart from what I mentioned above, we have Bessent saying: “We’re going to monetize the asset side of the U.S. balance sheet.” Looks like they plan to go 'very big'.
Yes. I didn't yet get into that, but this is why the prior administrations would never have considered this path. Trump wants prosperity and peace and screw the financial wars with those two.
I think it will be quite a challenge for the US to get 28% of the profits from a gold revaluation if only because it is relatively easy for gold holders to hide private physical gold transactions from Uncle Sam - never mind that exchanging real money for fiat shouldn’t be a taxable event in the first place. I can also see a black market emerging for people wanting to exchange gold for fiat tax-free should the need arise.
Too few citizens in the west own Gold (less than 2%?) - inflation (through debasement) will be rife with corresponding continuation of social disruption;
2. Is the US Gold actually there (Fort Knox)?
However one views it the average citizen has been subject to gross criminality for a century in your country and 3 in my mine, mostly in ignorance as you describe. Byzantine survived a further 400 years beyond the fall of the Western Roman Empire. History infers that this was effected by a return to Real Money - how did this proceed (from a practical viewpoint)?
1) What the guy on the street (the one without any substantial gold) gets is a government no longer on the brink of insolvency. The immediate threat of services cuts or tax increases will be reduced. There will be some inflation but it will be small relative to other assets that have inflated in the recent past ... example NVIDEA. The entire equity market! Trillions of wealth have been dropped on shareholders and nobody panicked about run away inflation.
2) yes, it all hinges on that.
Not sure what you mean by gross criminality ... but you think the UK has been clean except the prior 3 years? The currency is called a pound. Is that worth a pound of silver anymore?
I think that's complicated. At the minimum there are gold holders who are flush with purchasing power and will deploy some of that. What's the quantitative reaction from that? Then there's indirect effects ... how do bond holders react. Interest rates etc. Oil prices?
Done with Kensian economics- Austrian economics is the way going forward. Are you tired of continually getting a smaller piece of the pie? I certainly am!
If DOGE really uncovers all the BS their won't need to be any taxes.
A much appreciated analysis of one potential outcome…It has been discouraging holding gold and seeing the exponential growth in bitcoin over the timeframe…hope springs eternal for precious metals though, and every time there is a power outage, I appreciate the physicality of bullion! 😁
Current ratio? I'm referring to the debt to gdp ratio .... total US Govt debt to US GDP. In my calc's I'm using NET debt as (total debt less gold value) / GDP
I doubt that it would happens for a simple reason. The US, very, very probably doesn't have any more gold left in his vaults. So, first they would have to realize an audit of the "gold". But lets guess that they have the gold and the reevaluation is done. What about the gold mines and their production?
Trump wants to be the greatest President the US ever had. Kicking the can down the road will not do that. It will piss people off and his base that are financially literate will never forgive him for not taking on the Federal Reserve.
Trump and team KNOW gold is money. To tax it then revalue it or whatever order turns him into FDR, one of the most hated Presidents in the US. It's doubtful there's 12% of the world's supply of gold in the US. Will Trump expropriate that and again become FDR?
Trust is at an all time low in the US and if you are going to bring gold back into the monetary system, call it money and then tax it, you have a credibility problem on your hands.
Not just that but if Trump doesn't close the Fed and the IRS anything he does will just be undone and papered over in the future. At that point he will be more despised for causing such a ruckus and accomplishing literally nothing but dropping the ball at the 1 inch yard line.
We're going to find out if Trump is a chump and set us all up to enrich himself or if he is truly a man of the people.
Populists are watching. Be prepared for betrayal. It had been the American way.
now i’m no economist, or financial whizzkid, but it appears to me that the fiat currency is based on trust. gold is money, but it does not grow. fiat grows, but devalues. so in fact, in the grand scheme of things it all stays the same, more or less. then i ask you : who decides wealth? 1 goldcoin is 1, 1 dollar is 1.who decides if 1 goldcoin is f.e. 1000 dollar. the market? the goverment? the central banks? what if everything collapses? what is 1 goldcoin worth then? well, we’ll have to set up a system in which that 1 goldcoin equals whatever we agree upon, aka trust. gold is money, wealth! gold is just a very shiny metal.
Error ... I mislabeled the y axis. That is net debt to GDP (as it is stated in the title).
Sorry, one more thing. It is known, factually, that each major nation has been balancing its gold reserves to equal 4% of gdp. I think Poland is the last to equalise. Anyway, this would lead one to surmise that the gold revaluation will be a x25 move. Thereby allowing all gold / gdp balanced countries with a sub 1.0x debt to gdp ratio to clear their deficits. Everywhere (except Canada and the U.K. who have almost nothing thanks to incompetent leadership). 3k x 25 = $75,000. You say $79k through another lens. Add in the trump go big factor and the 1.20 debt to gbp in the USA and it doesn’t take much to get to $100,000 an Oz of gold. Oh what a surprise Bitcoin is there too. Oh why don’t we just link them up. July. Basel 3. Less than 4.5 months away. Silver, even at 50:1 (which won’t work for long with a massive shortage and ground reserves at 9:1 gold) but even just at 50:1 that’s $2,000 silver. That’s a x60 move. Interested in your opinion 🙏🏻
Great article but there may be an even bigger game. Trump has already given a few hints: he has said he has a plan for the national debt and he has also floated the idea of scrapping income tax (more than once). Trump's plan could well be along the lines of what is proposed by Bill Still in 1996. I have linked Bill's documentary below (which is really excellent). The first 3 hours is the history of the 'money changers' (which we should all know) but the last 30 mins deals with what we can do now. Trump may have a plan - perhaps like Kennedy's silver certificates, or Lincoln's 'Greenbacks'.
https://www.youtube.com/watch?v=bm6oeRgxs0A
Thanks for the link.
I agree 100% with the rationale of your "Go big" comment and apart from what I mentioned above, we have Bessent saying: “We’re going to monetize the asset side of the U.S. balance sheet.” Looks like they plan to go 'very big'.
Thanks for this. Is the logical next iteration to include remonetized/revalued silver in the analysis? Might be even more interesting.
Great insights. Geopolitically, these numbers make Russia and China very rich..
Yes. I didn't yet get into that, but this is why the prior administrations would never have considered this path. Trump wants prosperity and peace and screw the financial wars with those two.
I think it will be quite a challenge for the US to get 28% of the profits from a gold revaluation if only because it is relatively easy for gold holders to hide private physical gold transactions from Uncle Sam - never mind that exchanging real money for fiat shouldn’t be a taxable event in the first place. I can also see a black market emerging for people wanting to exchange gold for fiat tax-free should the need arise.
Black Market - why not? Sounds good to me...
Couple of issues/questions....
1. Social Unrest will surely continue?
Too few citizens in the west own Gold (less than 2%?) - inflation (through debasement) will be rife with corresponding continuation of social disruption;
2. Is the US Gold actually there (Fort Knox)?
However one views it the average citizen has been subject to gross criminality for a century in your country and 3 in my mine, mostly in ignorance as you describe. Byzantine survived a further 400 years beyond the fall of the Western Roman Empire. History infers that this was effected by a return to Real Money - how did this proceed (from a practical viewpoint)?
[Couple of typos (no big deal)...
continue its accent = ascent
guy = buy (gold)]
1) What the guy on the street (the one without any substantial gold) gets is a government no longer on the brink of insolvency. The immediate threat of services cuts or tax increases will be reduced. There will be some inflation but it will be small relative to other assets that have inflated in the recent past ... example NVIDEA. The entire equity market! Trillions of wealth have been dropped on shareholders and nobody panicked about run away inflation.
2) yes, it all hinges on that.
Not sure what you mean by gross criminality ... but you think the UK has been clean except the prior 3 years? The currency is called a pound. Is that worth a pound of silver anymore?
I’m guessing 3 centuries 😂
You're right. I misread that.
How would inflation and the immediate purchasing power of the dollar be affected in such a scenario?
I think that's complicated. At the minimum there are gold holders who are flush with purchasing power and will deploy some of that. What's the quantitative reaction from that? Then there's indirect effects ... how do bond holders react. Interest rates etc. Oil prices?
Done with Kensian economics- Austrian economics is the way going forward. Are you tired of continually getting a smaller piece of the pie? I certainly am!
If DOGE really uncovers all the BS their won't need to be any taxes.
I wish you well..
A much appreciated analysis of one potential outcome…It has been discouraging holding gold and seeing the exponential growth in bitcoin over the timeframe…hope springs eternal for precious metals though, and every time there is a power outage, I appreciate the physicality of bullion! 😁
I don't quite get the math. Current ratio is 1.17 means 3400/2900 =1.17
If ratio is 0.5 then gold would be 6800
Current ratio? I'm referring to the debt to gdp ratio .... total US Govt debt to US GDP. In my calc's I'm using NET debt as (total debt less gold value) / GDP
Total debt less gold value ( which gold value)
it depends on the price ... as shown in the chart
Thanks….the hot-tub is ordered and the girls arrive next week with lots of MDMA
Gold holders like you will give us all a bad name!
Send an invite though ...
I doubt that it would happens for a simple reason. The US, very, very probably doesn't have any more gold left in his vaults. So, first they would have to realize an audit of the "gold". But lets guess that they have the gold and the reevaluation is done. What about the gold mines and their production?
I didn't get into that. If there isn't the stated gold, then, of course, it can't happen.
A robust audit would be a prerequisite. If we see that in the near term, that would lend credence to an upcoming oversized revaluation.
Both Paul Snr & Paul Jnr plus Elongation Musk have already proposed this I believe?
Some believe there's a lot more gold than stated!
Of course, the US could start with some shenanigan..doing as if the gold was there..
The area that is ready since a long time to revaluate the gold is the EU. Just a political decision is missing.
Nice thought !!
Will Trump revalue gold?
Trump wants to be the greatest President the US ever had. Kicking the can down the road will not do that. It will piss people off and his base that are financially literate will never forgive him for not taking on the Federal Reserve.
Trump and team KNOW gold is money. To tax it then revalue it or whatever order turns him into FDR, one of the most hated Presidents in the US. It's doubtful there's 12% of the world's supply of gold in the US. Will Trump expropriate that and again become FDR?
Trust is at an all time low in the US and if you are going to bring gold back into the monetary system, call it money and then tax it, you have a credibility problem on your hands.
Not just that but if Trump doesn't close the Fed and the IRS anything he does will just be undone and papered over in the future. At that point he will be more despised for causing such a ruckus and accomplishing literally nothing but dropping the ball at the 1 inch yard line.
We're going to find out if Trump is a chump and set us all up to enrich himself or if he is truly a man of the people.
Populists are watching. Be prepared for betrayal. It had been the American way.
now i’m no economist, or financial whizzkid, but it appears to me that the fiat currency is based on trust. gold is money, but it does not grow. fiat grows, but devalues. so in fact, in the grand scheme of things it all stays the same, more or less. then i ask you : who decides wealth? 1 goldcoin is 1, 1 dollar is 1.who decides if 1 goldcoin is f.e. 1000 dollar. the market? the goverment? the central banks? what if everything collapses? what is 1 goldcoin worth then? well, we’ll have to set up a system in which that 1 goldcoin equals whatever we agree upon, aka trust. gold is money, wealth! gold is just a very shiny metal.