In Tett's weekly column we get musings about gold... but it's really a Trumpian-policy remark. Sigh.
Since gold prices in USD are ATH-ing, everyone's wondering why:
there is a third, less noticed, issue bubbling away too: some hedge fund contemporaries of Scott Bessent, the hedgie-turned-US Treasury secretary, are speculating about a revaluation of America’s gold stocks.
Interesting. Fair enough, it's been in the air around the Bitcoin Strategic Reserve for a while (how afford paying?!) #850724 #877076
- On the one hand, re-valuing gold and using the proceeds in some fiscal way, indicates that gold once more becomes relevant as a (monetary) asset globally speaking—good for gold price.
- On the other hand, re-valuing gold and using the proceeds involves in some form selling gold—bad for gold price.
Our pal Luke Gromen is quoted, though. I guess FT is looking for interesting voices nowadays...?
some market commentators, such as Luke Gromen, think the contradiction could be resolved if the Treasury tolerated, or enabled, gold to keep surging against the dollar. “Gold is likely to be a key pivot [for] the new system the Trump administration is clearly trying to engineer,” he says.
Now, Tett suggests (perhaps on Bessent's statements, I don't know), that the Treasury would repo the gold for new financing, in which case it's just a liquidity drain from the system with expanded bank balance sheets rather than direct sell pressure on gold.
um, OK?
Thus it is no surprise that gold is outperforming bitcoin right now; nor that traders are flying gold bars from London vaults to New York. Welcome to a financial Alice-in-Wonderland world where buying bullion seems almost sane.
also, this off-hand commentary on policy is pathetic. USAID is a corrupt, destructive force that should have been abolished (or at least interrupted) a long time ago; supporting it or defending it is beyond ridiculous:
if not a Congressional revolt from populist nationalists. And that hole cannot be plugged just by smashing a tiny agency like USAID (a grotesque move), or letting Elon Musk halt federal payments (also outrageous).
Very nice caption image. I'll take it.
non-paywalled here: https://archive.md/oXVD4