Own physical gold, not paper claims
If you hold gold futures, unallocated gold contracts with JP Morgan (JPM), options on gold, or ETFs, you do not own gold. You own a contract that gives price exposure. A short-term bet pays off if the price rises, but you hold no metal.
The danger shows up in a crisis. When markets crash and you most want the gold, you may not be able to convert these contracts into metal. A retail investor cannot turn an ETF into physical gold; only an authorized dealer can. Taking delivery on futures is very hard. If enough people try, exchanges can suspend deliveries. Every exchange rulebook contains a rule letting the exchange change its own rules. A board of governors can meet, raise margin requirements, or order "liquidation only" - you can unwind or roll over a position but cannot get the metal, and the exchange declares it is "not a source of supply." With allocated gold forwards, they can send a notice terminating your contract and a check for your profits, and you are out even if you wanted to stay in.
The real gold risk is finding your gold was never deliverable when everyone wants it. Buy physical gold and put it in a safe place. To sell later for dollars you need a reliable dealer, which can be hard to find.
Russia's gold survived sanctions
In 2022 Washington froze about $300 billion of Russian US Treasury securities held at Euroclear in Brussels. It never got Russia's gold. Elvira Nabiullina, head of Russia's central bank, spent from 2009 to beyond 2019 raising gold reserves from 600 tons to over 2,500 tons. At the start of the 2022 operation in Ukraine, Russia held 25% of its reserves in physical gold stored inside Russia, not at the Bank of England. Total reserves were about $600 billion, with $150 billion (25%) in gold.
After the Treasury freeze, others worldwide saw the risk: if Washington dislikes your policies, it could do the same to you. Some began buying gold. That helped push gold as high as $5,400 an ounce. The price more than doubled over the period, giving Russia more than $150 billion in mark-to-market profits on gold - almost as much as it lost on the frozen treasuries. Gold did its job: the US could not seize it, and it rose on fears the Treasury would steal Treasury securities. Jurisdiction matters when financial systems break, and counterparty risk can turn into geopolitical risk overnight.
Venezuela's gold has been stuck at the Bank of England since 2018. Could Washington ever freeze America's own gold? No.
Silver
Silver slipped below $60 today, down from about $70 earlier this year, with $60 seen as the line in the sand. Now is a good place to buy it. Silver is harder to read than gold because it is both money and store of wealth and a major industrial input. The precious-metal side can rise while a recession pulls the industrial side down. Right now both rise. The precious-metal side went sideways after the January 2026 spike but is finding traction again. Industrial demand runs through electronics, semiconductors, and catalytic converters. Hyperscalers building data centers need huge amounts of silver, so the fundamentals are solid. Silver follows gold with a lag; watch gold to judge silver. When gold gains traction, silver will not be far behind.
The debt will never be paid off - and that is the plan
The dollar is getting stronger, with the euro down from 116 to 113. The debasement-end-of-dollar story is wrong.
Publicly the government says it does not want inflation, but inflation is what makes the debt sustainable. No one will pay off the national debt. Deficits are here to stay, so debt and deficits will keep rising. The job is making that sustainable by getting the market to roll the debt over at a reasonable interest rate.
The key metric is debt to GDP, now about 125%. That is dangerously high, but we have been there before. In 1945 the ratio was about 120%. By 1980 it was 30%. Over those 35 years the debt itself tripled and the deficit tripled; what fell was the ratio, because nominal GDP grew 10 times, up 1,000%. Nominal GDP is real GDP plus inflation. From 1977 to 1981, US inflation was 50%. Much of that faster GDP growth was inflation. That is the whole key, and a strong reason to own gold.
The debt ratio can improve on paper while ordinary Americans' purchasing power quietly falls. The 1945-1980 decline leaned heavily on nominal growth and inflation, not fiscal discipline. Washington can shrink the burden of old debt while savers absorb the currency loss.
Inflation favors the debtor
Inflation is the worst thing for a creditor because the dollars repaid are worth less. The debtor loves it: you owe the same nominal dollars, now worth less - here is your trillion dollars back, good luck buying a loaf of bread. The biggest debtor in the world is the United States.
The saver needs inflation under control; the government benefits from inflating debt away. Little stops the government's interest from winning. If inflation hit 3%, the White House would celebrate. But 3% inflation cuts the dollar's value in half in about 24 years, and in half again over another 24. Across a 48-year span - a typical career from age 25 to the early 60s - 3% cuts the dollar's value by 75%. At 4% or 5%, the dollar melts like an ice cube in your hand. It does not take 10% inflation to do great damage; 3% does it over a career.
The winners own real estate, gold, silver, and other hard assets, which rise in value even as dollars buy less. The victims are people with no assets and those on fixed incomes who cannot adjust. The real threat is decades of tolerable-looking erosion, not one dramatic shock.
What will not change before the election
The election is 5 weeks out and government funding runs dry by December 11th. Washington cannot realistically change how the economy feels before people vote. The war in Iran will not be over. Prices will not come down. The war in Ukraine is getting worse for the Ukrainians; the Russians will win because their way of war is slow, methodical, and lethal. Diesel prices are unlikely to fall much.
What changes is money. Republicans have a huge money advantage and are ready to spend upwards of $1 billion across races - over $100 million in Texas on the Paxton race alone. Republicans will likely keep the Senate, partly by spending where needed. Watch the structural pressures that outlast the vote: persistent debt and China's reserve shifts.
China sells Treasuries out of dollar hunger, not strength
China's Treasury holdings are down to about $618 billion, the lowest since 2008, while central banks have added gold for 22 straight months. The US Treasury publishes the monthly TIC report, a spreadsheet showing major holders and maturities, so the drop in Chinese holdings is a fact.
That drop is widely misread as dumping treasuries and fleeing the dollar. It is the opposite. Reserves are held in securities, not currencies. China holds much of its reserves in US Treasury securities. They are denominated in dollars but are not actual dollars - you can only hold them, collect interest, and get paid at maturity. To get real dollars, you must sell the treasury.
China needs those dollars to prop up its own currency, because it does not want a cheaper yuan - it must buy many inputs to keep manufacturing running - and to support banks carrying dollar-denominated loans going bad. Selling treasuries, or letting them run off, means China wants more dollars, not fewer. It signals a global dollar shortage and Chinese weakness, not US weakness.
Japan's carry trade is the bigger fault line
Japan had been buying much of the additional US securities. Now the Japanese carry trade is unwinding, which is a far bigger problem. The trade: borrow yen at near-zero rates, swap yen for dollars, invest the dollars, and earn dollar returns of 7, 8, or 10% - much higher with leverage of 3:1 like a hedge fund or 10:1 like a real estate developer. The spread between near-zero financing and the returns is huge by itself, before any gain on the investment.
This has run for 30 years. The yen carry trade financed the world - not just US investors but Germany, investment in China, Brazil, everywhere. It has been the engine of global investment through cheap financing. Once the spread reverses, investors rush to unwind at the same time, forcing asset sales and demand for dollars. A seemingly distant Japanese policy shift can hit global portfolios fast.
