A possible shift in the monetary system
Gold is being treated more and more as a strategic asset worldwide. Central banks are piling up gold. Countries are diversifying their reserves and building parallel settlement systems - cross-border payment setups that bypass Swift, using gold to settle balances through vaults spread across many countries in the global south, expanded through the Belt and Road Initiative. Against this, why wouldn't the United States want to strengthen its own position?
The United States has the Exchange Stabilization Fund (ESF), which operates under the authority of the Treasury Secretary - described as a self-proclaimed gold bug. The law gives the Treasury the power to deal in gold and foreign exchange. My theory: the Treasury, through the ESF or other arrangements, could be using major commercial banks as go-betweens to buy gold. And institutions like Tether may be involved.
Here is the key point, maybe bigger than anything else. If gold is bought by intermediaries that keep legal ownership, those holdings would not show up as an increase in America's reported gold reserves. You could have massive private-sector accumulation while the official Treasury gold number stays flat. That could be a way to position for a future monetary realignment without telegraphing every move to the world. This would be done quietly in the shadows rather than out in the open, and the people doing it would be the last to care about public attention.
I don't claim with certainty that the government is directing these purchases. I'm confident gold is becoming far more important and that huge institutions are accumulating in huge amounts. Asked how sure I am that it's the government: with a gun to my head, I'd say absolutely it's them. We need evidence of who ultimately controls the metal and who finances the purchases before this becomes fact rather than a credible question. If America is positioning itself using gold, and the world believes a new system is coming, it's better late than never.
A fair caution: ownership, custody, and control are three different things. Large purchases and transport numbers alone can't prove government coordination or an imminent reserve-currency collapse.
The COMEX silver that walked out
The common pushback is that metal isn't leaving the COMEX. Some of it is. In February, 26 million ounces of silver were delivered to the COMEX. For the last two years, billions in gold and silver have been delivered to the COMEX each month, and much of it stays. Critics say it's just transferring back and forth on paper. I disagree, because buyers never went this far to actually take the physical bars for delivery before - they would just keep playing the paper game rather than demanding the real metal.
That same month, 39 million ounces got on trucks and left. That's 160% of what deliveries can explain - about 3 million pounds of silver, worth $4 billion at the time. Who runs logistics for that? You're talking about an armada of semi-trucks. Where is it going? Who has $4 billion to buy silver? The point: whether metal "stays" on paper means nothing. Transport figures alone can't establish who bought the metal or why, so this belongs in the category of questions worth scrutiny, not proven facts.
Tether's gold buying
Tether has become an enormous buyer of gold, with purchases measured in tens of tons, while also being a massive holder of US Treasury securities. It has opened a back door to the Justice Department to help with fraud cases. Bo Hines, formerly Trump's crypto czar, is now CEO of Tether's US dollar stablecoin division, built to comply with the Genius Act.
In the second and third quarters last year, Tether bought more gold than all the world's central banks combined, and more than China. Over the last six months of the year, the amount it bought works out to roughly one 400-ounce gold bar - about $1.7 million - every hour, 24 hours a day, 7 days a week, for six months. It has been buying more gold than anyone in the world except the central bank of Poland.
None of this proves a relationship with the ESF. It raises the question of how private institutions fit into a broader national strategy.
MOPE: managing perception
MOPE stands for Management Of Perception Economics, a term from my late friend Jim Sinclair for things that don't make sense. The idea is simple: if you can control how people perceive the economy, you can influence how they behave in it.
Our whole financial system runs on confidence - in the dollar, the banks, the stock market, and above all in the government's ability to manage its debt. That's where the problems are starting to creep in. The moment people lose that confidence, their behavior changes. During the banking crisis, people pulled money out of the banks, which forced the banks to sell assets.
So how do you keep confidence? You manage the narrative. You emphasize the good economic numbers and downplay the bad ones. You report employment numbers that are wrong and revise them two months later. You reassure people that inflation is under control and the banking system is sound - all lies. Perception can shape reality. If everyone believes a bank is safe, there's no panic. If everyone believes it will fail, they rush to withdraw, and that fear can push the failure along. Not every statistic is fabricated, but governments and central banks understand that keeping confidence alive is essential to keeping the system working.
Here's MOPE on gold. The line we're fed: knock gold down because war and an oil shock will raise inflation, so the Fed won't cut rates, and gold only rises when rates fall. War and inflation actually help gold in the end. But we've been conditioned to read higher inflation and higher rates as a sign of a strong economy overheating and roaring on all cylinders - which is nonsense. Gold responds to real yields, currencies, and risk expectations, not just interest rates.
Why rates are really rising
Rates are rising because of fiscal irresponsibility. In the fiscal year that ended in 2026, the government took in over $5.3 trillion in tax revenue but spent over $7.4 trillion.
There's an aging crisis too. You can already see the truth with your own eyes - older people are starting to go back to work at some grocery stores.
America owes more than $40 trillion in debt. Interest costs now run about 70% of what the country spends on Social Security. Annual interest of $1.1 trillion is more than military spending. There's something called the Ferguson line - a hypothetical idea that once a superpower's interest costs cross above its military spending, at some point it stops being a superpower.
The debt is already everyone's problem; most Americans don't realize they're already paying for it. Over a trillion dollars a year just services the debt. That money doesn't build roads, schools, or anything productive - it's simply the cost of money already borrowed. When government interest costs compete with essential spending, the pain eventually reaches ordinary households through higher taxes, cut services, or inflation. Social Security is projected to run out in 2032.
A household that pays one credit card with another is in a financial crisis. When Washington does the same thing - borrowing money to pay interest on money already borrowed - it's called fiscal policy, which is stupid. The difference: the government can tax, borrow, or print. None of those are painless, and eventually someone pays.
For scale: a trillion seconds ago was 31,688 years ago, back when Neanderthals walked Europe. We are adding over $2 trillion a year in deficit spending to the debt.
Letting inflation eat the debt
Trump said we're going to let inflation erode the debt. He brought in David Zeros, whose policy is called fiscal repression - keeping interest rates below inflation to eat away at the debt. That openly means destroying the purchasing power of the dollar. Inflation will erode the value of people's savings. The debt isn't only a problem for children and grandchildren; it's a problem for everyone holding dollars today.
Hold your wealth in dollars and you're holding a melting ice cube. You must own assets, period. This is how the wealthy stay wealthy - the Cantillon effect, where their assets rise. They have cash, but most of their wealth sits in assets. The lesson: do your best to hold assets rather than currency, because they're telling us they'll let inflation eat the dollar's value. A balancing point - inflation isn't guaranteed, and owning assets doesn't remove investment risk, so savers should think about diversification rather than treating cash or metals as always safe.
The Genius Act and synthetic treasury demand
The Genius Act takes effect in January. It says that when dollars move, they move on a blockchain network - instant settlement, like Venmo or Zelle. The blockchain is the highway; the stablecoins are the cars that carry the money. Those stablecoins will be backed mostly by US treasuries of 95 days' duration or less.
This creates massive synthetic demand for the front end of the yield curve. How do you keep demand for treasuries when people don't want them the way they used to? You back every dollar that moves across the world - from a pack of cigarettes to a new house - with 95-day-or-less treasuries. That pins the front end of the curve to the ground.
Some think Trump is out to get the City of London; there may be some credence to that. One thing the Federal Reserve does is control the front end of the curve, the overnight lending rate. If money movement pins that rate to the ground, you've neutered half of the Fed's dual mandate.
The interest is not transferable to the holder of the stablecoin. If I owe you $100 and send it, it won't look any different in our bank accounts, but you'll get it instantly. When I send it, a stablecoin is created and a treasury is purchased; when you receive it, the stablecoin is burned. The interest on that treasury is held by the issuer, not by the sender or receiver.
Stablecoins could become a new source of demand for short-term government debt. Reserve rules may support Treasury financing while issuers keep the interest earned on the backing assets. But stablecoin growth doesn't automatically fix America's wider fiscal imbalance or guarantee lower borrowing costs. Watch the rules, reserve disclosures, and actual issuance numbers.
Triffin's dilemma and a soft default
We keep hearing about Triffin's dilemma, which says a country can't stay the world reserve currency forever because the reserve issuer always runs a trade imbalance. Vice President Vance has said out loud that we should question whether being the reserve currency is good for us. Biden's chief economic adviser, Jared Bernstein - who was humiliated on X trying to explain how treasuries are created - wrote a report called "Dethrone King Dollar" arguing the same thing: we can't be the reserve currency anymore, and we've gutted our manufacturing base.
The mechanics: as the reserve currency, we can't supply every country with enough dollars to buy energy and transact globally through trade alone. So those countries sell their own currency on the open market to buy dollars for energy, trade, and reserves. Over time that creates a big gap between our currency and theirs. Manufacturing shifts to the cheapest currencies, which lets those countries' manufacturing earn far more at the expense of US manufacturing. That's how the US manufacturing base was gutted.
So how do you reindustrialize? One theory: let gold go much higher. That devalues the dollar - a soft default on US reserve currency status by letting the dollar depreciate. Rising gold could go hand in hand with a deliberate weakening of the dollar's global purchasing power. Still, big gold purchases alone don't prove government coordination or an imminent collapse of the reserve currency. Separate documented holdings from theories about intent.
