5000 year duration swap, you pay US money now and we give you non-marketable electronic gold certificate zero coupon bond backed by US defense treaty. https://youtu.be/f7pMYHn-1yA?si=s6CM_vjr0LNDzF3C
Oddly enough was discussing this yesterday and yes, funding the sovereign wealth fund via a mark to market of gold held very possible. Asset price inflation likely but needs to be considered with respect to broader fiscal context. But there is no real reason to have central bank depend on some inelastic asset like gold to constrain money supply.
the latter actually was the reason why Roosevelt signed the Gold Reserve Act, ending the Gold Standard, to give the Federal Reserve more flexibility to increase money supply.
gold is not the biggest unused asset. the value of lands owned by the u.s. is greater. and the value of offshore acreage in the exclusive economic zone is even bigger than THAT. it's not clear how far bessent wants to go in monetizing the gov'ts assets.
Monetizing assets is what someone does if they think they are or are nearing bankruptcy. Not a wholesome thought at all. And it is not unlike the guy who used bankruptcy to walk away from responsibility time and time again. So color me a gold owner but its not because its a shiny metal with alternative uses. I would also suggest not leaving it in the US. With all the talk here one might forget that it was Roosevelt that confiscated gold from the public at the very low price of 20.67 dollars per ounce when held as Coinage.
Also I can’t wait till I have to pay an outrageous sum to drive through our national parks, which we already paid for. And perhaps the highest bidder will be foreign….food for thought.
I hear you, but I think it's driven by Trump's unconventional, disruptive way of thinking, not an urgent liquidity issue. The higher the gold price, the better for him, so I don't think he will pull out the rug under his plan (confiscating gold).
Btw I erred. The confiscation occurred at $20.67 and then Roosevelt re-valued
Gold to $35 so that the fed/treasury could print more to lessen the effects of the depression and be in compliance with an earlier requirement to maintain at least
40% of the currency reserve
backed by gold.
Anyhow, there are questions to ask….after seeing the full picture of Yellen’s behavior, Bessent changed his perspective? It would suggest zero capability to issue long duration debt. If true, we wobble like the mutual banks of the 1980’s. Unable to match the duration of our assets and liabilities, we increasingly become unstable at the mercy of markets, foreign creditors and ensuing volatility.
While Trump may be a disruptor, that does not mean he can levitate much forever. There is a sickness in modern America. But its one President Kennedy unintentionally identified in his speech with the quote “ask not what the country can do for you, but what you can do” We are a society of people constantly asking what can be done for us. In fact
Both parties have cosied up to this over time, granting gifts to voters. Trump is not different he is just claiming to offer them to the common person while knowing full well they can't be delivered without grave risks.
Thanks for adding. Yellen issued mostly t-bills (in 2023 alone, $2 trn) because a very large part of pandemic-QEs landed in money market funds which require short-duration assets. In a sense, the Fed sponsored pathetic budget deficits. That has changed now. Per the Treasury's most recent reports, they have issued $1.3 trn in bonds and notes, and $600bn in bills (Jan '24 - Jan '25). So some market appetite is there but uncertain how much longer and how much larger.
"The unipolar world order, built under the lead of the U.S. since the end of the Soviet Union, disintegrates". So, if Trump makes the very inflationary move that you present, continues to tax other countries through tariffs and generally pulls back from North American and international trade, will that not further increase the disintegration of world order?
I think he has made clear he is less worried about the world than the US. Hence the talk of panama, Canada, Mexico and Greenland, all in close proximity. Trump doesn't really care about the rest of the world per se, and seems focused on solving the biggest problem we have, the debt
If he is focused on the debt how is printing money and isolating the USA going to achieve that? Things may look good for a moment or two if a ton of money becomes available but for how long? It will likely further mortgage the future for young americans.
By tax other contries I would suggest it is actually taxing US consumers on goods they import. The exporting country does not pay the tax but might feel some pressure to lower prices.
I'll confess not enough knowledge to understand why exactly we still care so much about gold.
Owning a share in a company is a small piece of that company and assests while owning gold is a heavy piece of metal that has few uses. The world give gold value but could also just deide we don't care about it beyond it's industrial and cosmetic purpose.
Amazing article. Finally light bulb moment for monetizing our gold bullion and what that could mean as an inflationary impulse
5000 year duration swap, you pay US money now and we give you non-marketable electronic gold certificate zero coupon bond backed by US defense treaty. https://youtu.be/f7pMYHn-1yA?si=s6CM_vjr0LNDzF3C
Another “One Time increase in the price level is not inflation” :) just beginning to add up in the Public Mind.
Oddly enough was discussing this yesterday and yes, funding the sovereign wealth fund via a mark to market of gold held very possible. Asset price inflation likely but needs to be considered with respect to broader fiscal context. But there is no real reason to have central bank depend on some inelastic asset like gold to constrain money supply.
the latter actually was the reason why Roosevelt signed the Gold Reserve Act, ending the Gold Standard, to give the Federal Reserve more flexibility to increase money supply.
gold is not the biggest unused asset. the value of lands owned by the u.s. is greater. and the value of offshore acreage in the exclusive economic zone is even bigger than THAT. it's not clear how far bessent wants to go in monetizing the gov'ts assets.
Thanks for adding! In terms of liquidity and immediate availability though, nothing beats gold.
If Beset is serious, i think they will look at all the assets and seek ways to monetize them
Monetizing assets is what someone does if they think they are or are nearing bankruptcy. Not a wholesome thought at all. And it is not unlike the guy who used bankruptcy to walk away from responsibility time and time again. So color me a gold owner but its not because its a shiny metal with alternative uses. I would also suggest not leaving it in the US. With all the talk here one might forget that it was Roosevelt that confiscated gold from the public at the very low price of 20.67 dollars per ounce when held as Coinage.
Also I can’t wait till I have to pay an outrageous sum to drive through our national parks, which we already paid for. And perhaps the highest bidder will be foreign….food for thought.
I hear you, but I think it's driven by Trump's unconventional, disruptive way of thinking, not an urgent liquidity issue. The higher the gold price, the better for him, so I don't think he will pull out the rug under his plan (confiscating gold).
Btw I erred. The confiscation occurred at $20.67 and then Roosevelt re-valued
Gold to $35 so that the fed/treasury could print more to lessen the effects of the depression and be in compliance with an earlier requirement to maintain at least
40% of the currency reserve
backed by gold.
Anyhow, there are questions to ask….after seeing the full picture of Yellen’s behavior, Bessent changed his perspective? It would suggest zero capability to issue long duration debt. If true, we wobble like the mutual banks of the 1980’s. Unable to match the duration of our assets and liabilities, we increasingly become unstable at the mercy of markets, foreign creditors and ensuing volatility.
While Trump may be a disruptor, that does not mean he can levitate much forever. There is a sickness in modern America. But its one President Kennedy unintentionally identified in his speech with the quote “ask not what the country can do for you, but what you can do” We are a society of people constantly asking what can be done for us. In fact
Both parties have cosied up to this over time, granting gifts to voters. Trump is not different he is just claiming to offer them to the common person while knowing full well they can't be delivered without grave risks.
Thanks for adding. Yellen issued mostly t-bills (in 2023 alone, $2 trn) because a very large part of pandemic-QEs landed in money market funds which require short-duration assets. In a sense, the Fed sponsored pathetic budget deficits. That has changed now. Per the Treasury's most recent reports, they have issued $1.3 trn in bonds and notes, and $600bn in bills (Jan '24 - Jan '25). So some market appetite is there but uncertain how much longer and how much larger.
Thanks I appreciate your comment.
https://youtu.be/Bfq5kju627c?si=9Ti98Mi5k3TWeSVD
"The unipolar world order, built under the lead of the U.S. since the end of the Soviet Union, disintegrates". So, if Trump makes the very inflationary move that you present, continues to tax other countries through tariffs and generally pulls back from North American and international trade, will that not further increase the disintegration of world order?
No doubt it will. It's a reality even if many countries/ unions are still in denial.
I think he has made clear he is less worried about the world than the US. Hence the talk of panama, Canada, Mexico and Greenland, all in close proximity. Trump doesn't really care about the rest of the world per se, and seems focused on solving the biggest problem we have, the debt
If he is focused on the debt how is printing money and isolating the USA going to achieve that? Things may look good for a moment or two if a ton of money becomes available but for how long? It will likely further mortgage the future for young americans.
By tax other contries I would suggest it is actually taxing US consumers on goods they import. The exporting country does not pay the tax but might feel some pressure to lower prices.
Forgive my total ignorance on economic matters. Does that mean gold prices will keep skyrocketing?
I think, and that's my personal opinion, that gold will have a much larger role in the future.
I'll confess not enough knowledge to understand why exactly we still care so much about gold.
Owning a share in a company is a small piece of that company and assests while owning gold is a heavy piece of metal that has few uses. The world give gold value but could also just deide we don't care about it beyond it's industrial and cosmetic purpose.