If the whispers of revaluing the US XAU/USD reserves prove true, it could be an instant boon to the people’s (currently debt-addled) asset base.
This article is written by someone who has been no fan of Trump. I spent 4 years criticizing his first term presidency (as I did Biden’s in a different way). * Whether you love him or hate him, this article simply focuses on a couple of economically important areas and policies currently being floated.
So while you’ll never see me hooting and hollering in a red hat, I note that amid the good and the bad in the rubble of Trump’s economic and societal deconstruction, there are potential positives in play. Profound potential positives to a purist economic type like me.
I realize there will be pain among innocents during the deconstruction. But my job is to call the truth as I see it or the potential truths as I see them. There is a lot of bad happening right now, but there is a lot of good too. Potentially mind-boggling [economic] good, as we may see with the benefit of hindsight a year or two from now.
If there is any truth (it’s politics and the media, after all) to the story about revaluing US gold reserves, a combination of that and the dog named DOGE chewing through the books of government agencies looking for waste would be a revolutionary improvement, in theory. **
Revaluing US Gold Reserves, Cutting Waste/Paying Down Debt
Imagine that, a heretofore consumerist, over-financialized society actually paying down debt and reestablishing its asset base, its VALUE baseline, with the aid of its gold reserves. What a concept.
Today gold’s free market price is over $2900/oz.
Pay down debt and value gold? Those are two things that I and other lunatics, err, I mean gold bugs, have advocated for decades. An old-fashioned notion in the face of the mighty debt-fueled consumer and the debt-money printing Federal Reserve system behind said consumer. Greed at any price.
Consider this new would-be era where tidal waves of government waste would be addressed (allowing debt pay-down) and the nation’s treasure of gold revalued to what the market says it should be valued at.
A Third Tier; Re-Shoring of Industry
Now add the re-shoring of industries that were sacrificed so that the financialized economy could increase the peoples’ debt while magnificently enriching the already rich and powerful through the dark art of Keynesian finance. How can any of these three things be bad? I ask you.
For decades the financialized, debt-backed US economy sacrificed its industrial base in service to the quick buck. Quick and BIG bucks raked in by Wall Street and its various outposts on the Main Streets of America (perhaps even your local financial adviser’s shop, maybe itself a tentacle of a big firm).
The financialized economy has greatly increased the divide between the haves and those who, you know, don’t have. Those going paycheck to paycheck. It is the gift that the financialized system and the Federal Reserve behind it have kept on giving (to the privileged asset owner class) at the expense of robo-trending national debt.
The Keynesian system is many years down the road and past its effective expiration date.
What thing looks like the other thing?
Gross Domestic Product is fine.
National Debt is fine too, if you are among the national minority “asset owner” class who have been exponentially enriched by the debt-leveraged Ponzi scheme that is the engine of the chart above.
What thing looks like the other thing? Thing1 is driven by Thing 2. Thing 2 is not sustainable. Hence, in the current system, Thing 1 is not sustainable either, unless major changes are made.
Major changes are being made. Let’s hope that there are more of the right ones than the wrong ones, of which to my eye there will be plenty.
* More to the point, I’ve criticized the financial system behind both presidents and both parties. But first-term Trump was a spectacle unto himself. The current Trump is something more understated, and thereby potentially more effective, IMO.
** In practice, there are a lot of moving parts, and there is a lot of resistance and legalities.