How Crypto And The Clarity Act Will Make The Metal Shine
Inside today’s Daily Journal…
Essay: It’s Go Time For Gold
The S&P risk-off signal
Seeking private-credit redemptions
Bond yields and oil prices out of sync
Chart Of The Day… Sagimet Biosciences
Today’s Mailbag
Editor’s note: Today’s guest writer is a longtime Porter & Co. friend – Garrett Goggin, who founded Golden Portfolio. Garrett will discuss how stablecoins will enable the flow of investor money into gold.
Here’s Garrett…
The next war isn’t being fought with guns and bombs.
It’s being fought in the financial markets every day, right before our eyes. The U.S. hasn’t made many friends around the world with its decision to invade Iran – what it’s done to the global energy markets will last months. But these nations are not fighting back against the U.S. on the battlefield. Instead, they are hitting America where it hurts them the most, in the wallet. The U.S. dollar is feeling the pain… and the winner from it all is gold.
Mainly driven by the petrodollar system, the dollar has been the world’s reserve currency for over 50 years. Millions of barrels of oil are traded every day – and if you want to buy or sell oil, you need greenbacks. Oil sellers recycle dollar-denominated oil sales into the petrodollar system by purchasing U.S. Treasury debt. It’s a closed-loop system. Demand for the U.S. dollar remained high, and the dollar remained the world’s reserve currency.
But now that’s over.
The U.S. petrodollar system is on the ropes, and right behind it is the dollar as the world’s reserve currency. The rest of the world no longer wants to finance the U.S. bombs that drop on their heads.
In April, major oil producer the UAE exited OPEC (Organization of the Petroleum Exporting Countries) and moved its oil trades away from the dollar and toward local currencies
Saudi Arabia has begun to accept non-U.S. dollar payments from non-U.S. countries
Iran is charging tolls (“maritime service fees”) in Chinese yuan and Bitcoin from oil tankers to pass through the Strait of Hormuz
The BRICS nations – Brazil, Russia, India, China, and South America – are developing their own digital currency to reduce dependency on the dollar
The U.S. is already $39 trillion in debt and owes over $1 trillion in interest per year. The only way out of that deep debt hole is through growth, which is simply printing more money and devaluing the dollar to make the debt easier to pay back. It’s been the same game since 1971 when U.S. President Richard Nixon took the U.S. off the gold standard.
The U.S.’s competitors in foreign trade have figured out the most efficient way to destroy America is to stop buying U.S. debt and let the U.S. collapse internally. Look at China’s U.S. Treasury holdings – they have dropped from $1.2 trillion in 2017 to about $600 billion now.
China is the U.S.’s major trade partner, and it tapped out years ago, choosing to buy gold instead. In fact, at the end of 2025, world central banks now hold more of their reserves in gold at 27% of reserves versus only 22% in U.S. Treasuries.
As our trade partners stop buying U.S. debt, the government itself will have to step in and fill the demand gap. We at Golden Portfolio expect it’s just a matter of time before the U.S. Treasury and Federal Reserve once again begin some form of quantitative easing (“QE”) – unleashing more liquidity into the system to ignite commercial lending.
To avoid interest rates from rising, the government will institute Yield Curve Control – higher rates will increase the already excessive interest cost and dig the U.S. deeper into debt. But artificially-capped rates would make U.S. bonds uninvestible. The U.S. would be the only buyer left for its own debt.
