Gold Revaluation Is Coming! Luke Gromen Explains the Global Money Reset

[00:00:00]the currency weakens enough and in particular against gold, the US can can pay off its debt overnight, right? It it whatever.

[00:00:08]I don't know what the number is. It's probably 23 Well, it's a lot more than 20,000 an ounce, but some big number of per ounce of gold US can, you know, the the Treasury Secretary can instruct the Fed to revalue the gold. Boom, we pay it all off with with devalued dollars and debt holders lose and the government wins.

[00:00:24]And gold goes back to new all-time highs and now in gold terms uh I think if you have some issue, gold probably goes down a bit initially and we've seen that. And so that that I don't have a strong a conviction in that. We've already seen gold well off the highs.

[00:00:41]Um and so maybe gold goes down a little bit in that initial risk-off in the dollar-denominated equity markets.

[00:00:50]>> Luke Gromen discusses the potential impact of currency devaluation, government debt, and monetary policy on the future value of gold. He argues that in extreme financial scenarios, governments could attempt to address debt burdens through currency depreciation and a major revaluation of gold reserves. According to Gromen, gold may experience short-term volatility during market stress, but long-term monetary pressures could strengthen its role as a global asset. As investors assess rising debt levels, currency risks, and changing financial systems, gold continues to attract attention as a potential hedge against monetary instability and declining purchasing power. Now, we present the clips from Luke Gromen's interview. Subscribe now Metal Moves for daily updates on precious metals, economic trends, and wealth-building opportunities. Stay ahead of the financial shift and never miss a market-moving alert.

[00:01:49]>> the currency weakens enough and in particular against gold, the US can can pay off its debt overnight, right? It it whatever.

[00:01:57]I don't know what the number is. It's probably 20,000 Well, it's a lot more than 20,000 an ounce, but some big number of per ounce of gold US can, you know, the the Treasury Secretary can instruct the Fed to re-value the gold. Boom, we pay it all off with with de-valued dollars and debt holders lose and the government wins, right? So, that it can always be it can always be dealt with. It can always be floated. It's a political question. When do the You know, when does the sort of, you know, the preferred game plan for 40, 50 years has been slow financial repression, right?

[00:02:28]So, you know, the debt grows 8% and uh 8% CAGR since since 2008.

[00:02:36]We say inflation is three and we pay zero to 2% on the rates and we try to earn our way out of it. And that's that is the preferred way of doing it.

[00:02:45]The problem is is that was supposed You You have to have some level of austerity on the back end. If you just keep spending 8% more money every year, you're never going to catch up.

[00:02:56]Um the other problem with that is you had a finite time horizon for that because ultimately one of the great lies uh has been you know, the entitlements are not debt.

[00:03:09]And they're not technically until they come go from off balance sheet to on balance sheet. And them going on balance sheet is just a function of uh boomers turning 65. And 70 million boomers were born from '46 to '64.

[00:03:23]Stands to reason most of them are going to reach age 65. This is not a surprise.

[00:03:28]And so, they have uh and those, you know, so that that's the reason why the debt growth hasn't slowed down is because the off balance sheet liabilities came on balance sheet. Really, it's just a political question. The the preferred method is just financially repressed, but then you can do that until the politics start to get weird.

[00:03:50]And that ties back to my prior point.

[00:03:51]We're now years into the politics getting weird. If financial repression wasn't happening, Donald Trump never gets elected. If financial repression wasn't happening, Obama probably doesn't get elected. Um and if this isn't happen so, you know, Trump would I would mark as the first like, "Okay, we have a political issue that the financial repression playbook is beginning to drive political issues."

[00:04:16]That was kind of the the the starting point of that.

[00:04:19]Um And the acceleration of that are things like Charlie Kirk's assassination and uh the reaction to COVID and uh Brian Thompson's assassination and and Trump's reelection. All of these things are warning people that the slow financial repression isn't going to work.

[00:04:38]And so now the playbook appears to be as you look around the world, look at what everyone's doing.

[00:04:43]Everyone is basically doing defense spending stimmy. Americans, the Germans.

[00:04:48]The Germans are like, "Wait, so we want this in writing. You want us to build a bunch of weapons and point them at Poland, right? Point them eastward at Russia. That's We have your permission.

[00:04:57]We want that in writing." Uh the Japanese are doing it, the Brits are doing it, right? So, everyone's borrowing money they don't have and increasing defense spending meaningfully, which starts to just look like debt-fueled stimmy um of COVID. And the hope perhaps being that, "Hey, if we do it all together, no one will notice that all our currencies are dropping at the same time. So, the dollar will be stable, the pound will be stable, the yen will be stable, the euro will be stable against each other, but their bond markets will sell off, check. Inflation will pick up, check.

[00:05:31]And now you're just, you know, the basically the bet is that this will earn our way out of debt before we have to start printing money to cap bond yields.

[00:05:39]I think it's a bad bet. I think they're going to print money to cap bond yields at some point in some form. You know, that could be via regulatory action or other things.

[00:05:48]Uh but that then gets us right back to my initial point, which is ultimately is just devalue the currency. That's all.

[00:05:54]And And against what? Against gold.

[00:05:56]Yeah, I do watch it a little bit. I'm not I'm not totally uh as deep in it as I am in the gold market. And I have a small position of silver I bought probably $18 maybe I don't know 8 10 years ago. Uh I I do think silver's wildly mispriced as an industrial metal today.

[00:06:14]Um and I also think it is it is an Achilles' heel of sorts of the of the credit gold and credit silver system that does support the post-1971 dollar system. So it does have monetary elements. And when I mean credit gold, I mean the unallocated uh silver and gold derivatives that you basically when when some when when demand kicks up for something, there's two ways you can address it. And And And in particular when there's demand for gold and silver that picks up, there's two ways you can address it. You can allow the price to rise and physical to move or you can allow unallocated derivatives to expand and address that supply and let price stay still. And And generally speaking over the last 50 years, uh the latter has been how increases in demand for gold and silver have been addressed. Uh I think physical holders of silver will be rewarded over time just because again, when you when you look around at everything we're trying to do, we're trying to build redundancies to the industrial base that China has built around the world. Us, Japan, Korea.

[00:07:16]Maybe the Europeans will will really finally get their act together in certain energy stuff, too. Who knows?

[00:07:22]But point is is that all of that stuff can't get built with paper silver. It's got to get built. There's There's silver is just used in so many different places, especially as as it relates to um anything EV {slash} electric, uh you know, solar panels, etc. So uh I think physical holders of silver will be rewarded over time, but I don't know if over time is 2 months, 2 years, 2 decades. I would guess it's probably within 2 years, uh but I don't have a strong feeling on that.

[00:07:52]>> Luke Gromen explains how rising government debt, financial repression, and currency devaluation risks could reshape the future of gold and silver.

[00:08:02]He argues that policy makers may eventually rely on monetary strategies to manage unsustainable debt levels, potentially weakening fiat currencies and increasing gold's importance as a monetary asset. Gromen also highlights silver's unique position as both an industrial metal and a potential monetary hedge. With growing demand from renewable energy, technology, and supply chain expansion, he believes physical silver could benefit over time.

[00:08:31]Investors continue watching precious metals as global debt and monetary challenges intensify. Let's get back to the interview.

[00:08:39]>> I think it's it's there's uh two different sets of dynamics. So, I think there is ultimately there's there's the markets priced in dollars and there's the markets priced in gold.

[00:08:53]And if you look at the markets priced in dollars, we're at all-time highs. If you look at the markets priced in gold, we're still down about 30% from the highs of late '21 and we're still down uh like I want to say 30 or 40% from January of 2000 in the US. So, uh using gold is a way of saying how much of it is currency debasement versus how much of it's real growth, uh real real productivity.

[00:09:22]And so, with that framework, I think in on the on the equities priced in dollars, I think I think the shape of the chart is going to be roughly the same. It's going to look like the old Nike symbol on your shoes, right? Which is I think uh and the war may be the catalyst for it.

[00:09:41]China AI competitive gains may be the catalyst for it. You know, who knows what the catalyst will be for it. When you're when your when your valuations are in la-la land, which equity valuations are in the US and in a lot of places, it the catalyst doesn't really matter. There can be nothing can go wrong. Nothing is allowed to go wrong. You're not allowed to have any issues, any questions with valuations that are that that are this high on things like the Warren Buffett metric, equity market cap as a percentage GDP, etc. And so I think we're going to get, you know, something is going to be a catalyst and we're going to get sort of a Nike shape market where you get a slight drop down and I don't know what slight slight is. Maybe it's 10 15, maybe it's 20%. I I doubt it, but could be.

[00:10:23]And that will cause Treasury market disruption, dysfunction and that will be the catalyst for more dollar liquidity and that'll send us right back to the highs. And that's pretty kind of the playbook for the past you know, 5 6 7 years. Now, in gold terms, uh I think if you have an issue, gold probably goes down a bit initially and we've seen that. And so that that I don't have a strong a conviction in that. We've already seen gold well off the highs.

[00:10:54]Um and so maybe gold goes down a little bit in that initial risk-off in the dollar denominated equity markets.

[00:11:03]Uh but then ultimately gold soars and as as the decline in equity markets necessitates, you know, creates dysfunction in Treasury markets again and necessitates more dollar liquidity injected by either Fed or Treasury again. And gold goes back to new all-time highs. And so on the dollar on a dollar base, I think you get sort of the Nike shape in equities.

[00:11:28]Um and then on a but on a on a gold basis, uh I think you end up with the char you know, more of what we've seen since 2022 and since you know, 2000 really, which is uh you know, on a gold basis, uh equities, that's where the correction in equities has been and where I think it will continue. Gold has begun its return into the system as a neutral reserve asset.

[00:11:51]We're at least 12 years into that shift, at least. And you can see that. You look at global FX reserves, dollar reserves have not really moved in 12 years. Treasury Treasury bond reserves have have been flat for 12 years and gold reserves have risen meaningfully. So, central banks have been growing holdings of gold and and not growing holdings of treasuries while treasury supplies have been growing exponentially for at least 12 years. So, this is this is already 12 years underway. And I've been very clear that I think the post-1971 structure of the dollar system is ending, but the dollar's not ending and I don't think it will in my lifetime or really even my kids or grandkids, not that I even have grandkids, lifetimes. Uh it's changing. It's changing to a neutral reserve asset gold that floats in all currencies. And everybody wants this. The PBOC came out in 2009 and said we want to move to a non-credit-based uh commodity-related non-currency issued not by any single country.

[00:12:53]It's gold. Uh the I and and then they started buying gold a few years later.

[00:12:57]Uh much more aggressively. Uh and you can see declassified documents about from from US State Department that China's buying gold because they see it as a way to kill two birds with one stone and and and build their own resilience. Uh the IMF came out in 2011 said we should think about uh moving away from dollar monopoly of oil and instead move it to something like an IMF SDR and and price gold and oil in IMF SDRs, not dollars.

[00:13:28]Say what you think what you will of it.

[00:13:29]The the the Dominique Strauss-Kahn who was in charge of the IMF when that was proposed ran into a sex scandal and was removed from office 3 months later.

[00:13:38]Moving on, World Bank, former Treasury official Robert Zoellick, 2010. We need to move to a system where you have the goal or excuse me of euro, yuan or euro, yen, pound and dollar and a yuan that starts to open up its capital account and we should also use gold as a reference point for inflation expectations, growth, et cetera. And then most recently and and perhaps most importantly because we are the incumbent in control of the past system the US has been talking about Hamiltonian economics. Bessen gave a speech at the New York Economic Club 4 weeks ago. He same day posted a Wall Street Journal op-ed on the same topic that Hamiltonian economics back Trump's economic statecraft.

[00:14:29]The Hamiltonian economics theme echoes what US Trade Representative Jamison Greer said in January at Davos saying we're done with the old system. We're the United States is moving to a Hamiltonian economic system. Vance and Trump have alluded to it as well. And so the key here is that you can't do a Hamiltonian economic system with the post-1971 structure of the dollar. You just can't. Full stop. Because Hamiltonian economics is we're going to put up tariffs and we are going to implement industrial policy and when you do those things, you don't emit the dollars needed for the system to run. So the world goes to gold. That's what's That's So to me what Bessen said I mean 4 weeks ago everyone on Wall Street virtually is like Bessen is the adult in the room et cetera et cetera et cetera.

[00:15:20]Bessen is telling you we are going the gold coming back in the system. That's what he's telling us. When he says Hamiltonian economics are base are backing our Trump's economic statecraft, that's what's happening here. So, uh now, what does that imply? That implies much higher gold prices. That implies a much lower trade value of the dollar against the creditor currencies like the yuan, the yen, to a lesser extent the euro. Um And that would be a system that would lead to perhaps the greatest economic boom worldwide since uh since, you know, since the end of World War II.

[00:16:01]>> Luke Gromen explains how gold is increasingly returning as a neutral reserve asset as global financial systems undergo a major transformation.

[00:16:11]He argues that markets priced in dollars can hide currency debasement while gold-based measurements reveal deeper shifts in purchasing power. According to Gromen, central banks have been steadily increasing gold reserves while reducing reliance on traditional dollar-based assets. He believes the post-1971 monetary system is evolving rather than ending with gold potentially playing a larger role in future global finance.

[00:16:38]Investors continue watching gold, currencies, and global debt trends as this monetary transition develops. Let us know your opinion on this analysis in the comments below. If you enjoyed this video and found it valuable, make sure to subscribe and enable notifications so you never miss our latest updates on gold, silver, crypto, and global markets. Thanks for watching the Metal Moves. We'll see you in the next video.

[00:17:25]>> Mhm.