My August 21st post, Gold Is Revolution, boiled down to what I’ve been saying since I began writing publicly back in 2004: Gold is “value” (also reference 2007’s Gold: A Value Proposition).

Value in a system increasingly devoid of and psychologically removed from the concept. Value in relation to investment vehicles that have been the beneficiaries of $trillions in “money”, created out of nowhere, chasing “acceptable” (economically cyclical) assets higher and higher for decades.

Witness just one of the latest plays in the casino of the valueless, relentlessly cooking up new ideas for investors to sink their greedy teeth into:

Tokenization is “going to eat the whole global financial system” says a concept promoter in this goofy article in the mainstream financial media. Remember, the media harvest eyeballs. In some cases, really naive eyeballs. This is media S.L.O.P., slop.

That is the system we currently have, but which in my opinion is already dead and buried. It just doesn’t know it yet as the media continue burping up stories like the above. Tokenization is an unstoppable freight train. Ha ha, that’s a good one. So was the NFT joke a few years ago. Hello? Now they want to tokenize “real world assets”, whatever that means. Great pitch, sir!

I’ll tell you what is an unstoppable freight train. Gold. But Gary, it is just insurance; just a lump of value. YOU yourself said so! Ah yes, and that shows just how bad things are in the cyclical world. Both financial/economically and socially.

You want to talk “real world assets”? You can’t get any more real than stuff that is dug out of the earth’s crust that has been used by humanity as money or a monetary basis for centuries. While gold has not been official money in modern times, it remains an anchor to real monetary value in an ocean of debt notes, printed into existence as needed.

Society is coming apart and so is its old system of debt>print>spend. But legacy financial media are not equipped to discuss that, so people and concepts like the guy above will be promoted because… that’s what media do. They reinforce what is popular.

Stuff like “Tokenization” (I feel silly just writing the word) pretends to be new and enlightening if you’ll just open your mind. But it is actually old fashioned, this promotion of things beyond your normal realm of comprehension. Because YOU are small and need to be educated, while the guy with the little microphone affixed to his head is smart and he’s going to educate you, alright.

That is old fashioned stuff right there. Tech-related CEOs with little mics on their heads preaching to would-be converts from a stage, about the techno-future. But the world is upside down now. The oldest fashioned asset in history is also gaining converts because promotions like the above and the debt-backed economic system it represents are coming apart at the seams.

Gold is revolutionary because it is not about greed. It is about stability and insurance. In its past price weakness, it reflected monetary, political, social and economic confidence elsewhere. In its current strength, it’s quite the opposite. The gold price has been marked down during long phases of perceived economic prosperity and marked up during phases of perceived struggle and increasing hopelessness.

Today’s phase is becoming that second thing. Demographics vs. the expiring old system of Inflation onDemand, AKA the haves feeding at the trough of more, while the have-nots just struggle to make the ends of the inflated dollars from their cashed paychecks meet. Compliments of the Federal Reserve system.

Sure, the Boomers are going to pass on inheritance to their little trophy winners. In theory, I guess. In reality, there are also a lot of Boomers who’ve been shut out of the decades old monetary gambit that was kicked off by Greenspan, sustained by Yellen and then had its inflationary gasket blown by Powell in 2020 (as finally indicated by the bond market’s rebellion in 2022). There are millions of offspring not destined to receive a silver spoonful.

While I anticipate a continued near-term easing in yields/rally in bonds, the structure of the macro has changed and the easy long-term disinflationary signaling that allowed (gave license to) our heroes to inflate at will – benefiting the investor and legacy pension classes – is done.

“Trump to the rescue!” you say? Were he to channel the spirit of a real conservative like Ron Paul and abolish the Fed, then you’d have a societal revolution in a positive direction. What a concept, let a free market be free to render its signals, whether we like them or not during any given phase. Here’s a thought, how about tapping Ron’s son Rand on the shoulder when the Fed chair opens up? “He likes dreamin'” to paraphrase a horribly tepid song from the 1970s.

Back on planet Reality, when Trump’s newly installed Fed chief takes office and does as he’s told (drop interest rates, if a decelerating economy has not already driven them down), just wait to behold the next inflation problem. While the little disinflationary phase in play now is pleasant enough, and may or may not become an unpleasant liquidity crisis in the interim, the next big problem is inflation (again), in my opinion.

Easy Trumpers, holster your partisan weaponry. This very website and its market report were reporting all through 2024 about the Biden administration’s effort to prop the economy by (fiscally) spending the hell out of the money the Fed had created. Check the political bias and name-calling crap at the door.

If the sum of his own words on the matter are to be believed, Trump is a very different flavor of the same problem where inflation is concerned. Like, on steroids. Imagine if for the first time, the same man directing fiscal policy (government) also directing monetary policy (after he installs a pre-programmed robot as Fed chief).

Trump wants interest rates down. He demanded it during Trump 1, constantly badgering Powell even as inflation signals in the economy were rising (late 2018), and he wants it now. “He’s Always Late”, after all. This time I actually think Trump is right, in the short-term. But will the real estate developer whose empire depended on the previous – now broken – disinflationary continuum (downtrend in long-term yields) in bond market signaling ever instruct his new Fed robot to raise interest rates?

That’s a scary question, right there. Inflation doesn’t care what side of the played-out two-party system you’re on. And inflation sure does love a unified effort in its direction. Say what you will about the Fed (and I’ve written thousands of negative words about it over the years), but when it raises interest rates it does it to attempt to beat back the inflation problems that the Fed itself created.

I hope I am off base and Trump will install a Fed Chief who will act as an economist first, and political animal second. It’s just that the balance of evidence heretofore weighs against it. However, we should remain open minded and let the macro unfold. Maybe it is true that Trump/Bessent have a plan involving gold and a positive reset of America’s fortunes using that gold as the foundation of a new system.

Maybe the new Fed chief will actually be an agent toward ending the Fed. Who knows for sure? If so, it is only as yet seen in a crystal ball with a tin foil hat on my head.

If he does not end the Fed and if the new chief turns out to be a political robot, picture the new economy revving as it always has, but without a functioning regulator. Think about it.

This is the scariest stuff I’ve ever written because an inflationary Crack-Up-Boom would be on the table. It would come as part of the revolution. In the face of this, and as an aside, what do you think will become of the “Tokenization” being humped by the promoter above in such a monetary shit storm?

While the stock market may keep up nominal appearances in this scenario, its performance vs. gold would… well, let this chart once again advise. Sure, it’s just a historical analog. But when an analog plays out against macro fundamentals that imply its predictive success, it would be foolish not to respect it. The message here for the stock market is “go nowhere” nominally, and drop hard in gold terms. In other words, in “real” terms.

Assuming the economy continues to decelerate as anticipated, this time, unlike the routine inflationary operations circa 2001-2020, the coming inflationary bailout would not boost “good” asset prices, like stocks. At least not to any significant degree, as Stagflation eats at the economy and the bottom lines of companies those stocks represent.

The Fed blew the gasket in 2020 and Biden’s handlers kept grinding the fiscal gears of the jalopy right into the election. Or to use another metaphor, the the country’s inflated seed corn was consumed.

As I wrote repeatedly to subscribers last year, the Biden admin was over-stimulating for political capital into the election. But if they were to lose, Trump would be left with a pile of slop on his hands. Well, it is taking a while to become apparent, but the pile is getting deeper.

Soon will come Trump’s kick at the can, and he’s already clearly stated what he wants to do (again, with the improbable caveat of possibility that he and Bessent have plans to revalue gold for the good of the country). And folks, it ain’t disinflationary. Why again is the monetary metal flying around just below $3,900/oz. while the promoter (using him as one example among many) above fantasizes about Tokenizing the world? Well, we ain’t seen nothin’ yet. *

We discuss the long-term breakout in the Treasury yield Continuum (per the chart above) as a rebellion by the bond market. Well, the gold price is in all-out revolution against the expiring system. It is also a guide to what is ahead. All in my admittedly gold-buggish opinion, of course.

The near-vertical candles on this chart can be seen as a figurative middle finger to the old system. It represents global citizens and authorities alike piling into monetary insurance against the undoing of what was, and that finger is pointing the way to safety. I am talking big picture here because those playing gold as a near-term price play are missing the whole point (and could get their asses handed to them at any point).

* This is a big picture macro article, not a technical one. Big picture-wise, the calls for gold $10,000 are now realistic, in my opinion. Even that may one day be seen as conservative.

Wrapping Up

I am pretty tired of the bullshit in social media (robots and humans alike misleading each other at best, and hating and outright lying to each other at worst). I am tired of weirdos like the “Tokenization” guy above. I am no tout for a pretty metal that is ripped out of the ground and used for monetary stability. When gold was not favored, price-wise, as a market technician and macro-fundamentalist, I said so.

Today it is necessary. It is at once the oldest fashioned asset in the world and the newest, yet simplest concept to grasp in a failing system. Insurance as value. Its price markup is a counter-reflection of society and its expiring system.

So, “no promo!” Just reality.

My writing has been 100% consistent over the years in this regard. It’s just that now the gold price is rising again. It is probably seen by a good portion of its bullish brigade as a booming “play”. Just another play along side Mr. Tokenization, AI and whatever else the promotional machinery will put out its orifice before the system goes into its death rattle. Then the value of gold will become more important than its price.

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