TL;DR: The price of gold dropped back today, but sprang right back as it seems intent on rising. Could it beat $50K per ounce? We think so. Meanwhile CRE is scrambling and with the home stretch of a new book and great working weather, our focus moves to Peoplenomics….
No Government. So?
The Big Stuff of national importance – like Social Security, military paychecks, and what-not, is being sort of handled.
There are, government aside, three things you need to track to see where the future is pointing. Ready?
Now let’s triangulate, shall we? Macro, micro, consumer:
Triangulation Frame
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Data Vertex — The Fed readout
Take the St. Louis Fed’s “Banking Analytics” showing a rise in CRE loan modifications as the top-down quant anchor. It’s the first derivative of stress: banks quietly re-papering loans instead of writing them off. -
Anecdotal Vertex — Stephen2
Use Stephen2’s field notes as confirmation bias or contradiction. If he’s reporting empty strip malls, rent concessions, or lenders suddenly “getting friendly,” you’ve got texture that makes the Fed line breathe. -
Behavioral Vertex — Amazon Prime Big Deal Days
Fold in consumer behavior. Heavy discount participation suggests the same deflationary pressure that’s forcing banks to “modify” rather than “foreclose.” Both are liquidity work-arounds—one at the retail counter, one in the loan book.
Synthesis (or Cause d’ Blues by year-end)
When all three points align—Fed data, local observation, and mass-market behavior—you can infer a shift from asset confidence to cash-flow triage. CRE lenders, small investors, and households are all improvising the same move: stretch payments, chase volume, postpone reality. Oh.
Repricing Gold?
OK, we are getting into the runaway part of Compounding Interest on the national debt. What would solve the problem? Reduce payments on US debt to one percent, but realize there’s a lot of “legacy debt” paper floating around so it will take a while (>5-years) for the lower rate to work through the system.
In the meantime, can the spendthrift abdicators of CONgress actually live within their obligations to “balance the budget?” You mean, like “Can the chimpanzees in the lab voluntary do self-rehab if we shovel blow into the cage?” Um…shouldn’t be hard to figure, right?
But we can pretend. (We always do…)
Been doing a lot of research on the difference between Gold and Silver versus all the other “made-up Money) [MuM] out there. Bitcoin – contrary to the Big Lie – is not a “store of wealth” because its ownership is neither 100 percent secure, nor it immune to “debt loading.” Yeah, yeah, stories aside. But I am still waiting for a (durable) answer to the question “When the mining stops, who keeps the lights on for clearing the Ledger?” Lots of “God shuffled his feet” pauses follow.
See, when comes down to it – with no mining income, the Ledger would need to raise money. Tax transactions (oops, there goes the “sell”) OR Government would have to get involved. Don’t look now, but we’re entering the hangover part of that, already.
Gold, on the other hand, is 100 percent possession. No levies on nothing. Which is how precious metals have a really long history of retained value.
“Ure a Gold Bug?”
Nope. I’m, a data-driven dude. Here’s today’s early futures data off FinViz.com:
Now, look at the H, see it?
Let me tell you a really short story. About 35-years ago, I was cleaned out in one of those “divorcing for dollars” deals. The million and several home went, savings, and here…child support on three (great) kids. Never skipped a bit.
How did I get back into seven figures of net worth? Two simple moves.
- Vow to never pay interest, but if you must, pay it off and hold everything free and clear, fee simple, and NEVER refi or HELOC or any of those other traps. Sure, you CAN pull money out – but if you do you risk “outliving your money” and you are burning any chances of the kids getting into the “generational wealth” game.
- Second move was to save money from work in media that appreciates (like rental real estate, just to the no debt goal above) OR in precious metals which “auto-adjust” to inflation.
Now, want to ask again if I am a “gold bug?” Or, do I just have a really firm grip on economic reality?
Obvious America has Lost It’s Grip
As we whine in our coffee, we think what is coming will be a Government grab. A major Crypto Con. The government will declare a New Money. Since only a fool would believe it (it’s a drunk promising to “dry out” at bedtime when out of hooch) there will be some role for gold.
No exchange fees and no one can “steal it away through levies, liens, and dilutions.
Walk with me – we’re going to roll through some numbers.
Using the current U.S. gold reserve of about 8,133.5 metric tonnes—roughly 261.5 million troy ounces—the math for a 40 percent backing of the $37.5 trillion federal debt goes like this. Forty percent of $37.5 trillion is $15 trillion. Divide that by 261.5 million ounces and you arrive at roughly $57,000 per ounce as the equilibrium price that would make gold equal to 40 percent of the national debt. Will enough people buy the balance in crypto? Depends on the drinking and spending posse on Capitol Hill, I suppose.
For perspective, a 30 percent backing would come out around $43,000 per ounce, 25 percent at $36,000, and 20 percent near $29,000. The numbers look absurd until you realize the debt pile has grown far faster than the ounces have; that’s the essence of compounding risk and why some economists whisper about a future “reset.”
$57,000 Gold? NO!
Realistically? I would think more like $20,000. Go much higher and Russia and China start having enough to “Buy the whole World.”
To grok this (so to speak) you need to remember that a “tonne” is a metric ton equal to 1,000 kilograms (about 2,204.6 pounds), while a “ton” in U.S. usage means a short ton of 2,000 pounds. That keeps the “bounce per ounce” figures sane.
Applying to Russia?
Using recent output in the 310–330 tonne range, one tonne of gold is about 32,150.75 troy ounces, so at $57,000 per ounce a tonne is roughly $1.83 billion. Multiply through:
- At 310 tonnes: about $568 billion
- At 313 tonnes: about $574 billion
- At 330 tonnes: about $605 billion
Even using only the US debt held by the public—about $30 trillion—the 40 percent coverage point still runs close to $46,000 per ounce. That assumes all official gold is unencumbered and ignores leasing, derivatives, or market supply elasticity. The simple point stands: if the dollar’s faith base were re-anchored to metal, gold would have to soar by an order of magnitude to keep up with the compounding curve.
A one-line takeaway from today’s breakfast scramble might be: if Washington ever tried to restore partial gold coverage, fair value would start around $50,000 an ounce—because that’s what it would take to make debt and metal share the same reality again.
But Washington (outside of a 10-minute elections window) manages to screw up most things it touches and we have no doubt the will over estimate their budgeting power and under estimate rates. Not like it wouldn’t be the first time.
The good news is government isn’t spending as much (while closed). The bad news is? Political hackticians will make sure the “shutdown” becomes a paid vacation for government workers who’ve been sent home.
My God, you’re generous with money you don’t have. Good for you.
Stupid old folks in the woods like us? We’re working the seeds and fencing, planning water and reloading strategies. Nothing to read here.
Or here, either: Here’s why Bitcoin price and the crypto market are going up in Uptober. Because we look for BTC to roll mid 130’s and then be halved. But, have in Ure way.
Georgenac the Carnificent!
“A fiery mouse with the speed of light, a cloud smoke, and a hearty ‘I own Silver! Away’”
Forecast: Expect a False Flag. Venezuela’s Maduro says US embassy ‘false flag’ bombing foiled in Caracas.
Forecast: California’s in the crapper: Gavin Newsom hits out at Trump after FAA warned there would be no air traffic controllers at Hollywood airport. There is no airport in Hollywood – he may be thinking (ahem) about 7 miles north, in Burbank. It’s the closest and easiest for domestic flights, long favored by entertainment industry folks. It’s how I flew in.
Did you know? Most don’t and the MSM is pimping Gruesome: Burbank Airport’s air traffic control tower can become unmanned for extended periods, such as the 4:15 p.m. to 10 p.m. window mentioned during a government shutdown, but normally, the airport adheres to a voluntary 10 p.m. to 7 a.m. curfew for most operations. This curfew is a nightly restriction that prevents aircraft from arriving or departing, indicating the tower is typically not staffed for active air traffic control during those hours. Is is possible to please more than 2 people at once in HWood anymore?
Forecast: France is Lost. Now, everyone’s seeing it – even the new guy: France’s new prime minister resigns hours after naming government, plunging France further into political chaos. Order the Redenbacher early for their Battle of Tours, II vs. Russia in the upcoming main event. After Israel pops Iran – soon too – as cued by the lack of Iran stories in the partisan MSM. They’re trying not to give anything away. Gaza has been teleported off-planet.
Forecast: Legislating from the bench won’t need ‘law’: Supreme Court hears arguments banning conversion therapy for LBGTQ+ kids. Uh…which Article gives the Courts power over gender? (Or taxing authority to spend on it???) My copy of our dear Constitution seems to be missing some parts…
Forecast: Climate change isn’t outside of millennial-slow change: Heavy snow traps hundreds of hikers on Mount Everest. Which seems to green light Trump is Reviving Large Sales of Coal From Public Lands. Like they used to say, in the once-upon a time steel industry in America (before Washington sold us out to the lowest bidders) things go better with coke (and limestone). Though that may not land outside of Pennsyltucky.
On the Ai Front
OK, this is more a Peoplenomics 2026 thing. but did you see where OpenAI has come out with a preview of an Apps SDK? (That’s a “system developer kit” for ChatGPT.)
The reason to mention is that once I finish the current book project (more on that in a sec.) the MoneyMachine coding will resume on the subscriber side.
If you’re not a subscriber, the short version is I’m (as time permits in Python) building a lite implementation of my method to implement Cycle_Decomposition_Academic_Paper_With_Math. The new CGPT Apps SDK means when it gets done, should be an easy port to something less arduous than compiled Python.
(OK, does it make any sense at all, yet? Let’s move along, then…
SJW Notes
Fan of the Equalizer series? Have a gander at this real-life reader adventure in our Comments section. The good guys do occasionally put points on the board.
ATR: World’s Most Important Invention Is?
Getting well-into writing my next book (Mind Amplifiers: On Human Use of Cognitive Prosthetics) and going through the migration of human consciousness out of living entirely “inside our heads with a plug-in for sensors.”
Somehow, along the way, this most delectable thought wandered by Monday: “You know what the most important invention in the whole History of the World is, right?”
“Easy – The Wheel…duh?”
“Nope. The hinge.”
“OK…Want to go ahead and explain that?”
“Sure. With a hinge, you can begin to build doors and walls, and even windows. That’s when humans began to split Inside from Outside. Much Bigger Deal than stupid wheels…”
I’m still thinking about it. Not sure if it belongs in the chapter “Prosthetics, Processors, and Processes” or in the Metrology of the Ontology chapter.
And you thought your Monday was tough.
Write when I get rich; I got the unhinged part covered.
Read the full article here