Background: I’m a full-time rare coin dealer (and software engineer, which is why I’m here haha).
One of the fascinating things happening in this market is that there’s a massive disconnect between the spot price of gold ($4000), which is driven and set by massive trades and hedges on international commodities exchanges, and the supply and demand for actual physical gold - the kind that’s sold at Costco in bars or by the US mint in 1oz coins.
Since so much activity is driven by futures contracts online (without physical settlement), this disconnect means that the average consumer more or less is either holding physical gold they already have or selling physical gold they already have to cash out at these historic levels. There just aren’t a lot of regular people out there who are saying “yeah I want lots of gold at $4000/oz”.
So brick and mortar dealers are being flooded with gold in their shops these days, and the supply chain looks pretty wild - tons of that physical gold is going to refineries who are melting it down and shipping it off as physical collateral for the futures contracts - but the big buyers out there don’t actually want or need all this expensive physical gold. The price spike isn’t because all of a sudden there’s increased demand for physical gold - it’s just a financial instrument at this point that happens to have a physical counterpart.
None of this is to say there’s a problem with this - it’s just fascinating that net result of this huge spike is lots of jewelry and old coins being melted into bricks of gold that will sit quietly in secure warehouses and vaults around the world.
Here in Bangkok literally every gold shop is out of physical gold. I went and bought 80% of one shop that had some, and the rest got bought immediately by other customers. If there is sell pressure you would see Thai people line up at gold shops and dump their gold. It's one of the main investment instruments here and I don't hear of any wide spread selling.
I think whats happening is china is buying up all the physical supply in the global markets.
I highly doubt the rare coiners and Costco bars can move a market this big. This is also not a US-only thing; it's happening worldwide.
> but the big buyers out there don’t actually want or need all this expensive physical gold. The price spike isn’t because all of a sudden there’s increased demand for physical gold - it’s just a financial instrument at this point that happens to have a physical counterpart.
There's a simple counterpoint to your argument: there are places that were selling physical gold for $2000 a decade ago, that were selling it for $3000 back in 2024, and that are now selling it for $4000. I don't see any of them going out of business. Online, Apmex and dozens of others seem to be doing just fine.
So evidently, there is healthy retail demand for gold at these price points. Futures markets can get weird, but they're ultimately rooted in demand for commodities. I can't sell you futures on something that no one is willing to buy.
Oh for sure - APMEX is selling plenty of gold and they're doing great. But they buy gold too and ship it off to refiners just like any dealer. And yes there is plenty of demand for gold - but my only point is that demand right now is for Gold The Commodity (eg a hedge fund / government / etc.) who just want the financial instrument (that happens to be backed by physical bricks in a warehouse...they hope lol) as opposed to the retail buyer who wants gold the way they want Crypto or Pokemon cards.
For example, one dealer I know last month sold $5m in physical gold coins (to consumers who wants gold) but they bought $30m in physical gold coins to be shipped off and melted. They, like APMEX, make money on both sides so they're plenty happy. But a 6:1 buy:sell ratio is pretty wild.
Well gold is a healthy market and when there are opportunities for arbitrage people are happily taking them. There is not a disconnect if you can go to a physical dealer and get small margins on physical buying and selling compared to the spot price.
The cynical question then becomes: what part of the market is bearing the security costs of all that gold being shipped around as collateral? That's a transaction friction that doesn't show up in a commodities trade balance sheet.
A creative thief (or, y'know, scriptwriter) must be thinking about how to exploit that disconnect. If it's never been a better time to "own" gold, but not to "hold" gold... then surely this is also the best time to steal gold?
You pay a premium for futures. If you can't accept delivery, then you must sell before the contract settles. That's essentially the price for holding the gold.
> None of this is to say there’s a problem with this - it’s just fascinating that net result of this huge spike is lots of jewelry and old coins being melted into bricks of gold that will sit quietly in secure warehouses and vaults around the world.
Not really "around the world". There's been a huge influx of physical Gold from the rest of the world into the US this year. It kind of fucked over Switzerland, because the gold refining capacity of the world is really concentrated there. So they've been working 24/7 on the not particularly appealing business of importing gold in one size from London, re-casting it as bars of a different size, and exporting to the US.
And why is this a problem? Because this anomaly single-handedly made it look like Switzerland had a massive trade surplus with US, so they got punished for being the middle-man on the Gold exports with crushing tariffs on everything else.
> it’s just fascinating that net result of this huge spike is lots of jewelry and old coins being melted into bricks of gold that will sit quietly in secure warehouses and vaults around the world.
The next logical step in that process would then be for the price to further increase as the actual amount in circulation decreases, right? Doesn't this create a sort of vicious cycle?
Technically the gold is still in circulation, it's just in contracts on the market instead of in people's closets. If anything, this move probably increases gold market liquidity.
At any time someone could take delivery on their futures contracts and receive a shipment of the gold from the warehouses it is stored at.
Whenever the ruling class is threatened, the first thing they do is force their own people to give up their gold.
- In 217 BC, to survive the Second Punic War after Cannae, Rome passed the Lex Oppia requiring citizens to surrender gold and jewelry to the state treasury.
- In 1307, to survive debts from the Flemish War, Philip IV of France arrested the Knights Templar and seized their treasury, disrupting credit networks used by merchants and pilgrims.
- In 1536, to survive the Great Matter (his divorce) and break with Rome, Henry VIII dissolved the monasteries in order to melt down their gold and silver chalices, crosses, and shrines.
- In 1666, to survive the Second Anglo-Dutch War costs, Charles II "borrowed" gold deposits from London goldsmiths through the Stop of the Exchequer and never returned them.
- In 1797, to survive the French Revolutionary Wars, Pitt the Younger demanded "voluntary" Loyalty Loan gold contributions from British citizens, backed by threat of forced requisition.
- In 1917, to survive WWI and the October Revolution, Lenin's Decree on Gold confiscated all gold coins, bullion, and objects from "non-working classes."
- In 1933, to survive the Great Depression banking crisis, FDR signed Executive Order 6102 requiring all Americans to give up their gold.
- In 1934, to survive monetary reform, the Gold Reserve Act let the US Treasury profit $2.8 billion by revaluing confiscated gold from $20.67 to $35/oz (basically stealing 41% of the value)
- In 1959, to survive the US trade embargo, Castro's Revolutionary Government Law 851 seized all private gold holdings in Cuba, including jewelry and coins.
- In 1966, to survive foreign exchange crisis, India's Gold Control Act under Indira Gandhi banned private gold ownership above tiny amounts, forcing surrender to the state.
It's a wonder of our modern age that this classic form of expropriation is now happening through voluntary means: high paper prices drawing physical gold from millions of small holders into the vaults of institutions, without any guns, goons, or executive orders required.
Some notable examples, and likely many others exist throughout history.
Retail does not have the financial power to move any large market. The responsible parties, in either direction are institutional buyers. So your final point is worth consideration. Could it simply be diversification from US Treasuries? Or are there other geopolitical factors?
You have ommited many other occurences I know of - in Roman Republic, Venice Republic etc. Most of these republics were oligarchic in nature and charged richest citizen substantial extra tax when in need or in danger. Roof tax in Rome is one example.
Upper classes paying for unusual/emergency expenses of the state. Unthinkable now.
The only real use case for these is occasional chemistry usages.
But very very very very ignorant people still insist gold is some sort of useful store of value for the apocalypse or something.
People with large gold reserves in 1930s Germany did no better than any other Germans in an environment with failing fiat currency. Primarily because they were being put into camps and their gold was confiscated by a criminal regime.
Isn’t it just inflation. As time passes there is more fiat in circulation, which means fiat is worth less, which means you need more fiat to buy the same amount of gold.
> Isn’t it just inflation. As time passes there is more fiat in circulation, which means fiat is worth less, which means you need more fiat to buy the same amount of gold.
See also flatness of gold prices from 1982 to 2002 with an increasing money supply. An older article:
> Sure, there were periods when gold was rising in tandem with the money supply, e.g. in the 1970s and 2000s. However, the yellow metal was in a bear market during the 1980s, 1990s and since 2011, despite the rising money supply (as indicated by the orange rectangles). The price of gold has fallen since 2011 by more than one-third, while the monetary base has increased by half and the M2 supply has risen by more than 25 percent.
That’s certainly part of it (and the argument most gold bugs make as to why we should all be buying gold), but gold has gone up 133% in the last 3 years which is wayyyyy beyond inflation tracking.
It's also the weakening of the dollar. If the dollar is 10% weaker, an international gold seller now needs 10% more dollars to be willing to give you their gold -- which means the "value" in dollar terms is 10% higher.
> As time passes there is more fiat in circulation, which means fiat is worth less
This isn’t always true. For one thing, the amount of fiat in ‘circulation’ isn’t just a matter of “count up all the bills printed”, but is affected by how much leverage exists in the world and many other things.
Second, even how much a fiat dollar is worth is also a factor of how much productivity there is in the world. To understand what I mean, let’s imagine a super simple economy with only fiat dollars and wheat. Every dollar is only used to buy wheat.
Say there is $1000 in bills and 1000 pounds of wheat. Each dollar is worth 1 pound of wheat. Then, we print an extra $1000 in bills; that would be inflation, and now you can only buy 1/2 pound of wheat for a dollar. That is what people imagine when we talk about printing more money causes inflation.
But what if new technology gains means we are able to produce 4000 pounds of wheat for the same amount of work; now, each $1 can buy 2 pounds of wheat. Even though we printed more money, the economy grew even faster than we printed extra money, so we didn’t get inflation and instead prices went down.
Inflation is always (generally) about the ratio between currency production and economic output growth. You can’t just look at one side of the equation.
It seems that way to me, plus Trump's erratic tariffs behavior specifically targeting swiss imports and gold specifically was in the spotlight - the US seems likely in a gold bubble partly from that chaos.
Of course it is inflation. Has all stocks in the world and all commodities in the world and all real estate in the world increased in price? Or is it the currency that has reduced in price.
Massive inflation has reduced the value of all currencies, giving the illusion that everything has gone up in price. Well everything except for salaries that is.
Your observations are also a bullish signal for Bitcoin, as it sort of functions as a "digital gold". Cheaper to transmit, cheaper to custody, basically instantly auditable/verifiable, as a financial instrument. No need to inspect, ship and melt down to store in warehouses.
Bitcoin mostly follows the S&P 500 now. No one actually cares about the technical merits. If they did, it'd probably be worth nothing because it's worse than our current financial system in every way: slow, irreversible transactions on a public ledger.
Four things are happening (and one of them is gold) that make a terrifying situation.
Facts:
- Gold has reached all time highs
- US debt (ie T-bills) selling at all time lows
- US equities are at all time highs
- USD falling day over day, month over month, year over year
All 4 of those facts cannot remain true indefinitely. The all time high equity prices are because it requires more USD(which is decreasing in value) to purchase them. Gold is at all time highs because USD is decreasing in value, and the flight to safety leads people to gold. US debt is falling in value because no one wants to buy it. At some point, equities will give up and crash, or gold will have to crash....and I don't think it's going to be gold crashing.
The thought seems to be that prices of everything are high, because the dollar itself has lost value. Makes sense. The conclusion then being a crash. But why? If the dollar is worth less and stops devaluing so badly, we'd just expect a stop in growth rather than a crash. Or are you projecting a strengthening of the dollar rather than just stabilization?
I'm still not sure why anyone is surprised by a devaluing of the dollar -- that's literally what the monetary kooks in the current US administration are on record as wanting to cause.*
Thought process goes: (1) devalue dollar, (2a) make basic US industry more globally competitive, (2b) devalue US debt to "solve" it without having to implement
austerity, (3) stronger US industry
Given that equity nominal values (read: future profits) will grow (to balance out the decreasing fiat value), purchasing power / wealth holds something close to constant and market numbers go up (which keeps voters from becoming unruly).
The only people who really get fucked are (a) people who aren't invested in the stock market (read: poor), (b) fixed income folks (read: retirees who will be dead before it fully plays out), and (maybe c) labor (if wage growth doesn't keep pace with purchasing power loss).
It's not the worst economic-political plan, other than the fact that no one is being honest with the public about it and some idiot ALSO picked the same time to drastically decrease the domestic labor supply (by sharply decreasing immigration and mildly increasing deportations) and increase tariffs. Both of which make completely offshoring labor more attractive.
* See also why Trump has such a bug up his ass about the Fed, as this becomes a lot harder if they don't play ball. Say, by following their mandate to fight inflation...
this is not true unless you’re doing some kind of adjustment. For t bills, us03m yields were much higher 30-40 years ago.
> US equities are at all time highs
this is true
> USD falling day over day, month over month, year over year
if falling means inflation, yes in banal way. If falling means relative to other currencies, that’s the last 9 months or so. Previously the USD was quite strong
> US debt is falling in value because no one wants to buy it
this appears to be the hinge of the argument? It is not true. 10y yields have been down / flat since beginning of 2025 (i.e., price up). also tsy auctions remain well-subscribed / within historical range
A buddy of mine is retired and managing his own investments, and he's a reasonably savvy investor. He has some guys he follows and like 2.5 years ago they were all predicting the market would crash in the next 3-6 months. We have lunch every 2-3 weeks, and we've been holding their feet to the fire, "Still hasn't crashed". (Not saying it won't, it "feels" over-hot).
I just moved my son's "kid retirement plan" (giving him matching and compounding interest, he can access it at 18) into a custodial account, and put his money into a few stocks and ETFs (including PHYS, a gold ETF). So far in the last week it has gained $140 on $940 investment. I've warned him: This is fun to see these gains, but we can't expect it to always happen, we just need to protect our gains by using stops.
I also had him pick a stock that is something he likes and thinks will go somewhere. He picked Roblox. My FIL had given me the advice to take a little bit of your money, "pocket change", and invest in something you like, to keep it fun. My first investment following that advice went from $7K to $200K, so I was a big fan of that. ;-)
You should add the introduction/print of trillions of usd into the global economy during the pandemic crisis into your equation. That itself means that prices will increase as the total supply of available USD is greater and can lead to newer standards that don't make sense when not taken into consideration.
> All 4 of those facts cannot remain true indefinitely.
Why? Is it some law of nature that the USD can't itself crash. It would then be sensible investment to buy both Gold and Equities. I sometimes wonder if we are seeing the USD unfolds on the equities and commodities market before it does for food and transport.
Watching that video with a couple year's hindsight and cracks are starting to show. The rest of the world is slowly getting rid of their dollars and his points about the international stock market are no longer as valid. International indexes are beating the US market right now.
I think they have to, but I agree completely. I don't think it follows from this particular argument.
Instead I think the only argument that matters is that P/E ratios are really high even though interest rates are high and you can see that it's hard to justify the equity prices using present value of dividends and that sort of thing.
If it doesn't crash due to these factors, IMO Boomers aging and dying will crash the economy due to the outsized share of wealth they have locked up. They're going to cash it out as they incur more and more health/assisted living costs. Whatever is left will be sold immediately by their heirs to pay off debts or other forms of spending. I also have a theory that Boomer spending right now is the only thing keeping a lot of business in the black, especially higher end services, food, and tourism.
In a sense, it is not surprising. The surprising part is the apparent overall yawn from.. well, everyone. One could easily argue that the current situation is, to put it mildly, problematic. And I am not just talking fiscal, or financial, or geopolitical. It is somehow all of these and yet, due to some interesting level of crisis fatiue, most are shrugging it off. 4k seems high, but it merely reflects current perpcetions and still does not crazy. My pet theory is that.. there is no safe haven this time so money is all over the place.
edit: I am mostly in bonds with some gambles here and there, but that was my position since the begining of this year.
The fatigue is that everyone keeps telling everyone will crash and it cannot last, for a what, a decade now? But especially the last few years. And then it just doesn't happen. Crypto will crash, gold cannot last, S&P is overheated etc and yet everything I have and other people have is going straight up. It has to go down, but at least when people said in 1998 a bubble is coming and will crash, it only took 2-3 years for it to blow up. Now it just goes and goes and goes. I think that gives fatique. I am spread, including local real estate and companies, but I missed a lot of money listening to people (and my own feelings) to think we were too high. Everything has to actually crash very hard to still not make a good profit and that it won't, at least not when we don't see it coming.
I guess what's happening ever since the housing market bust is that virtually all asset classes are guaranteed to appreciate at rates that outpace inflation, a guarantee paid for largely by workers whose real wages decrease due to inflation.
You would think "that can't go on forever" but so far workers have failed to organize or support reforms that could correct it. The "hack" to maintain this in perpetuity seems to be distracting workers with get rich quick gambling schemes and culture war xenophobia.
That is fair. I think you are onto something. I did miss out on some things as well, because I played very conservatively ( and at this point I am not that willing to change much ). Still, my own house appreciated a ridiculous amount. I see other assets appreciate as well ( just not as dramatically ).. I don't know how it can stay at these levels without some major re-alignment.
I think this is overall fair/accurate in terms of crash fatigue, but crypto has crashed by 85+% multiple times in the last decade. I'm not sure that's the best proof point in this list of things that don't actually happen.
there are always people predicting the next crash. when in the bottom of a crash they are saying things will go lower.
you have to be careful about predictions in financial areas.
Remember if people are guarenteed right they would be investing money. In most cases talking about a truth will cause the market to change harming your ability to capitalize on it. Thus anyone talking is unlikely to have insight.
Gold price in 1973 was around $60, so if your thesis is that "something must happen", it might be worth asking why the same thing didn't happen when it crossed $200, $500, $1000, $2000, or $3000.
Actually things did happen in 2001 (9-11), 2008 (GFC), 2012-2015 (Eurozone crisis), 2020 (Covid) and 2022 (Russio-Nato war).
Each of these came very close for a major market depression (except 911).
The fact that none did only instilled in lots of people's brain to take an incremental bit more insurance in the form of gold (if you were to replay Covid or GFC today, what odds do you put that it won't lead to a great depression?)
Also you can argue that the gradual rise is tracking almost exactly the gradual geopolitical paradigm shift from unipolarity to multipolrity.
Gold's price is only half the story here. The other half of the story is the value of US debt and US currency(USD). When they move in opposite directions - historically - /one/ of those instruments crashes. Choosing a side and putting your money behind it is dangerous, but also lucrative.
I always wonder why gold going this high is seen as bearish to the dollar as the US currently holds 8,133.46 metric tons of gold, more than the next three top holders combined (Germany, France and Italy) and almost twice as much as China and Russia combined (although no one really knows how much China holds).
So I would be far more concerned on the impact of gold price going high on other currencies that are not backed by as much gold before worrying about the US.
The risk to the dollar is a flight to gold causing an decrease in interest of buyers purchasing treasuries, resulting in higher rates paid to buyers of this debt. To give a sense of scale the US issues something like 1-2 Trillion in new treasuries a year, which is roughly the value of all 8,133.46 tons if sold at current market price.
For example a 2% increase in rate on 1T in 30Y treasury issuance over 30 years is $600B.
I know, my point is that it is not directly backed by gold, but indirectly you can make the point there astronomical gold reserve comes into play if gold prices go insanely high.
I know little about monetary policy, so this is a genuine question. What’s the non-kooky explanation for why there was a big economic divergence between income and productivity in the U.S. that appears to have started at the same time as the U.S. ended the convertibility of dollars to gold. https://wtfhappenedin1971.com/
Readit News
One of the fascinating things happening in this market is that there’s a massive disconnect between the spot price of gold ($4000), which is driven and set by massive trades and hedges on international commodities exchanges, and the supply and demand for actual physical gold - the kind that’s sold at Costco in bars or by the US mint in 1oz coins.
Since so much activity is driven by futures contracts online (without physical settlement), this disconnect means that the average consumer more or less is either holding physical gold they already have or selling physical gold they already have to cash out at these historic levels. There just aren’t a lot of regular people out there who are saying “yeah I want lots of gold at $4000/oz”.
So brick and mortar dealers are being flooded with gold in their shops these days, and the supply chain looks pretty wild - tons of that physical gold is going to refineries who are melting it down and shipping it off as physical collateral for the futures contracts - but the big buyers out there don’t actually want or need all this expensive physical gold. The price spike isn’t because all of a sudden there’s increased demand for physical gold - it’s just a financial instrument at this point that happens to have a physical counterpart.
None of this is to say there’s a problem with this - it’s just fascinating that net result of this huge spike is lots of jewelry and old coins being melted into bricks of gold that will sit quietly in secure warehouses and vaults around the world.
I think whats happening is china is buying up all the physical supply in the global markets.
> but the big buyers out there don’t actually want or need all this expensive physical gold. The price spike isn’t because all of a sudden there’s increased demand for physical gold - it’s just a financial instrument at this point that happens to have a physical counterpart.
The reason is well understood: Central banks around the world are increasing their supply of Gold. In particular, the one in China: https://tradingeconomics.com/china/gold-reserves
And no, big buyers expect deliveries: https://www.ft.com/content/86a5fafd-603e-4ee1-9620-39b5f4465...
Amateurs:
* https://www.mint.ca/en/shop/coins/2025/lunar-year-of-the-hor...
* https://www.mint.ca/en/shop/coins/2025/heart-diamond-pure-go...
More 'pedestrian' items are available as well:
* https://www.mint.ca/en/shop/categories/gold
So evidently, there is healthy retail demand for gold at these price points. Futures markets can get weird, but they're ultimately rooted in demand for commodities. I can't sell you futures on something that no one is willing to buy.
For example, one dealer I know last month sold $5m in physical gold coins (to consumers who wants gold) but they bought $30m in physical gold coins to be shipped off and melted. They, like APMEX, make money on both sides so they're plenty happy. But a 6:1 buy:sell ratio is pretty wild.
A creative thief (or, y'know, scriptwriter) must be thinking about how to exploit that disconnect. If it's never been a better time to "own" gold, but not to "hold" gold... then surely this is also the best time to steal gold?
Not really "around the world". There's been a huge influx of physical Gold from the rest of the world into the US this year. It kind of fucked over Switzerland, because the gold refining capacity of the world is really concentrated there. So they've been working 24/7 on the not particularly appealing business of importing gold in one size from London, re-casting it as bars of a different size, and exporting to the US.
And why is this a problem? Because this anomaly single-handedly made it look like Switzerland had a massive trade surplus with US, so they got punished for being the middle-man on the Gold exports with crushing tariffs on everything else.
The next logical step in that process would then be for the price to further increase as the actual amount in circulation decreases, right? Doesn't this create a sort of vicious cycle?
At any time someone could take delivery on their futures contracts and receive a shipment of the gold from the warehouses it is stored at.
- In 217 BC, to survive the Second Punic War after Cannae, Rome passed the Lex Oppia requiring citizens to surrender gold and jewelry to the state treasury.
- In 1307, to survive debts from the Flemish War, Philip IV of France arrested the Knights Templar and seized their treasury, disrupting credit networks used by merchants and pilgrims.
- In 1536, to survive the Great Matter (his divorce) and break with Rome, Henry VIII dissolved the monasteries in order to melt down their gold and silver chalices, crosses, and shrines.
- In 1666, to survive the Second Anglo-Dutch War costs, Charles II "borrowed" gold deposits from London goldsmiths through the Stop of the Exchequer and never returned them.
- In 1797, to survive the French Revolutionary Wars, Pitt the Younger demanded "voluntary" Loyalty Loan gold contributions from British citizens, backed by threat of forced requisition.
- In 1917, to survive WWI and the October Revolution, Lenin's Decree on Gold confiscated all gold coins, bullion, and objects from "non-working classes."
- In 1933, to survive the Great Depression banking crisis, FDR signed Executive Order 6102 requiring all Americans to give up their gold.
- In 1934, to survive monetary reform, the Gold Reserve Act let the US Treasury profit $2.8 billion by revaluing confiscated gold from $20.67 to $35/oz (basically stealing 41% of the value)
- In 1959, to survive the US trade embargo, Castro's Revolutionary Government Law 851 seized all private gold holdings in Cuba, including jewelry and coins.
- In 1966, to survive foreign exchange crisis, India's Gold Control Act under Indira Gandhi banned private gold ownership above tiny amounts, forcing surrender to the state.
It's a wonder of our modern age that this classic form of expropriation is now happening through voluntary means: high paper prices drawing physical gold from millions of small holders into the vaults of institutions, without any guns, goons, or executive orders required.
Retail does not have the financial power to move any large market. The responsible parties, in either direction are institutional buyers. So your final point is worth consideration. Could it simply be diversification from US Treasuries? Or are there other geopolitical factors?
Upper classes paying for unusual/emergency expenses of the state. Unthinkable now.
Sorry, what? I don't shop at Costco because I don't really need anything in the volume they sell it at... but is this a real thing?
The only real use case for these is occasional chemistry usages.
But very very very very ignorant people still insist gold is some sort of useful store of value for the apocalypse or something.
People with large gold reserves in 1930s Germany did no better than any other Germans in an environment with failing fiat currency. Primarily because they were being put into camps and their gold was confiscated by a criminal regime.
Gold was absolutely flat between 2012 and 2022:
* https://www.apmex.com/gold-price
but USD money supply was increasing during that decade:
* https://fred.stlouisfed.org/series/M2SL
See also flatness of gold prices from 1982 to 2002 with an increasing money supply. An older article:
> Sure, there were periods when gold was rising in tandem with the money supply, e.g. in the 1970s and 2000s. However, the yellow metal was in a bear market during the 1980s, 1990s and since 2011, despite the rising money supply (as indicated by the orange rectangles). The price of gold has fallen since 2011 by more than one-third, while the monetary base has increased by half and the M2 supply has risen by more than 25 percent.
* https://www.goldpriceforecast.com/explanations/gold-money-su...
There is little correlation between the two.
This isn’t always true. For one thing, the amount of fiat in ‘circulation’ isn’t just a matter of “count up all the bills printed”, but is affected by how much leverage exists in the world and many other things.
Second, even how much a fiat dollar is worth is also a factor of how much productivity there is in the world. To understand what I mean, let’s imagine a super simple economy with only fiat dollars and wheat. Every dollar is only used to buy wheat.
Say there is $1000 in bills and 1000 pounds of wheat. Each dollar is worth 1 pound of wheat. Then, we print an extra $1000 in bills; that would be inflation, and now you can only buy 1/2 pound of wheat for a dollar. That is what people imagine when we talk about printing more money causes inflation.
But what if new technology gains means we are able to produce 4000 pounds of wheat for the same amount of work; now, each $1 can buy 2 pounds of wheat. Even though we printed more money, the economy grew even faster than we printed extra money, so we didn’t get inflation and instead prices went down.
Inflation is always (generally) about the ratio between currency production and economic output growth. You can’t just look at one side of the equation.
Massive inflation has reduced the value of all currencies, giving the illusion that everything has gone up in price. Well everything except for salaries that is.
Facts:
- Gold has reached all time highs
- US debt (ie T-bills) selling at all time lows
- US equities are at all time highs
- USD falling day over day, month over month, year over year
All 4 of those facts cannot remain true indefinitely. The all time high equity prices are because it requires more USD(which is decreasing in value) to purchase them. Gold is at all time highs because USD is decreasing in value, and the flight to safety leads people to gold. US debt is falling in value because no one wants to buy it. At some point, equities will give up and crash, or gold will have to crash....and I don't think it's going to be gold crashing.
edit: formatting
The thought seems to be that prices of everything are high, because the dollar itself has lost value. Makes sense. The conclusion then being a crash. But why? If the dollar is worth less and stops devaluing so badly, we'd just expect a stop in growth rather than a crash. Or are you projecting a strengthening of the dollar rather than just stabilization?
Thought process goes: (1) devalue dollar, (2a) make basic US industry more globally competitive, (2b) devalue US debt to "solve" it without having to implement austerity, (3) stronger US industry
Given that equity nominal values (read: future profits) will grow (to balance out the decreasing fiat value), purchasing power / wealth holds something close to constant and market numbers go up (which keeps voters from becoming unruly).
The only people who really get fucked are (a) people who aren't invested in the stock market (read: poor), (b) fixed income folks (read: retirees who will be dead before it fully plays out), and (maybe c) labor (if wage growth doesn't keep pace with purchasing power loss).
It's not the worst economic-political plan, other than the fact that no one is being honest with the public about it and some idiot ALSO picked the same time to drastically decrease the domestic labor supply (by sharply decreasing immigration and mildly increasing deportations) and increase tariffs. Both of which make completely offshoring labor more attractive.
* See also why Trump has such a bug up his ass about the Fed, as this becomes a lot harder if they don't play ball. Say, by following their mandate to fight inflation...
this is true
> US debt (ie T-bills) selling at all time lows
this is not true unless you’re doing some kind of adjustment. For t bills, us03m yields were much higher 30-40 years ago.
> US equities are at all time highs
this is true
> USD falling day over day, month over month, year over year
if falling means inflation, yes in banal way. If falling means relative to other currencies, that’s the last 9 months or so. Previously the USD was quite strong
> US debt is falling in value because no one wants to buy it
this appears to be the hinge of the argument? It is not true. 10y yields have been down / flat since beginning of 2025 (i.e., price up). also tsy auctions remain well-subscribed / within historical range
I just moved my son's "kid retirement plan" (giving him matching and compounding interest, he can access it at 18) into a custodial account, and put his money into a few stocks and ETFs (including PHYS, a gold ETF). So far in the last week it has gained $140 on $940 investment. I've warned him: This is fun to see these gains, but we can't expect it to always happen, we just need to protect our gains by using stops.
I also had him pick a stock that is something he likes and thinks will go somewhere. He picked Roblox. My FIL had given me the advice to take a little bit of your money, "pocket change", and invest in something you like, to keep it fun. My first investment following that advice went from $7K to $200K, so I was a big fan of that. ;-)
The inflation-adjusted price of equities is still near all time highs. See the Shiller PE Ratio. [0]
[0] https://www.multpl.com/shiller-pe
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Debt selling at lower market prices is equivalent to higher interest rates. Peak interest rates for US debt where around 1980, not now.
Why? Is it some law of nature that the USD can't itself crash. It would then be sensible investment to buy both Gold and Equities. I sometimes wonder if we are seeing the USD unfolds on the equities and commodities market before it does for food and transport.
[1] https://www.youtube.com/watch?v=da6hMy5sp1M
What is the root cause of all of this? BRICS has an alternative to SWIFT (not identically but functionally).
If you feel that the multipolar world is a fad, sure, gold will come down. I somehow doubt it.
Instead I think the only argument that matters is that P/E ratios are really high even though interest rates are high and you can see that it's hard to justify the equity prices using present value of dividends and that sort of thing.
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All of inflation-adjusted US spending growth has come from those in the top 20% income bracket ($175k+) and especially the top 3.3%.
So not Boomer spending, but wealthy spending. (Which overlaps but isn't completely the same thing)
[0] https://fortune.com/2025/09/17/economy-reliant-on-wealthy-co...
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edit: I am mostly in bonds with some gambles here and there, but that was my position since the begining of this year.
You would think "that can't go on forever" but so far workers have failed to organize or support reforms that could correct it. The "hack" to maintain this in perpetuity seems to be distracting workers with get rich quick gambling schemes and culture war xenophobia.
you have to be careful about predictions in financial areas.
Remember if people are guarenteed right they would be investing money. In most cases talking about a truth will cause the market to change harming your ability to capitalize on it. Thus anyone talking is unlikely to have insight.
Each of these came very close for a major market depression (except 911).
The fact that none did only instilled in lots of people's brain to take an incremental bit more insurance in the form of gold (if you were to replay Covid or GFC today, what odds do you put that it won't lead to a great depression?)
Also you can argue that the gradual rise is tracking almost exactly the gradual geopolitical paradigm shift from unipolarity to multipolrity.
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So I would be far more concerned on the impact of gold price going high on other currencies that are not backed by as much gold before worrying about the US.
For example a 2% increase in rate on 1T in 30Y treasury issuance over 30 years is $600B.