The REAL reason gold is soaring…

Dear Reader,

Today I want to talk about GOLD…

Look at that metal go!

It has actually outperformed everything.

In the stock market the biggest winner this year has been utilities - a 25% gain, in aggregate, and technology - a 23% gain.

But gold is killing them all.

It’s up 2.5X since October of 2022.

And it’s really interesting, because in October 2022, we issued a report, Death of the Dollar…

See, we were watching China buying gold - hoarding massive amounts - and we postulated that China would use gold as a way to chip away at U.S. dollar domination.

So, it’s interesting that Morgan Stanley put a note out last week about the reasons gold is rising.

Here’s their top 3:

1. Bubble concerns - investors may be buying gold as a hedge against the risk of a speculative AI bubble in stocks.

Hmm… possible, but doubtful.

Gold didn’t do that during the dot-com era.

2. Inflation hedging - historically, gold has helped investors preserve purchasing power during periods of inflation.

For sure this is part of it. Gold is a classic inflation hedge, and the full effects of tariffs are still to be seen.

3. Dollar debasement - owning a hard asset like gold may help offset the risk of debasement/devaluing of the U.S. dollar.

We’ve talked a lot about dollar debasement here.

This thesis suggests that several factors - mounting fears over deglobalization, high U.S. debt and deficits, and threats to the Fed’s independence have shaken investor confidence in the dollar, leading to a reduction in its use globally.

Now, to their great credit, Morgan Stanley in their note says, while this thesis is compelling, it does not fully explain gold’s recent rise…

They added another factor to consider:

Increasingly, their Global Investment Committee believes gold’s rally may be linked to a global financial shift as central banks reduce their reliance on the U.S. dollar and anticipate changes in currency markets driven by stable coins and other digital assets.

These digital currencies have the potential to disrupt traditional fiat currency markets by using gold to back fiat currencies and cryptocurrencies.

Governments and entities could challenge the dominance of the U.S. dollar in global transactions.

Now, basically, they’re tiptoeing around something that Bloomberg has talked about but that Morgan Stanley must tiptoe around because they do a lot of business in China…

An article in Bloomberg on October 9th this year really gets to the heart of our thesis -

It says gold’s record rally is helping China challenge Trump and the dollar.

Beijing is seizing the opportunity to offer up an alternative to U.S. financial dominance.

So gold is really part of China’s plan.

Because if China has a lot of gold, it accomplishes two things for China -

1. If China’s promoting gold and this story that the dollar is being debased and that gold is a better alternative, just by promoting this story, they’re chipping away at the value of the U.S. dollar as central banks move to gold.


2. They could be seriously considering pegging their offshore Hong Kong dollar to gold. That would allow China, as the article states, to offer up an alternative to U.S. financial dominance as Washington cranks up the use of sanctions and alienates even longstanding trade partners.

So as we’ve been saying here at Behind the Markets the past couple years - gold’s rise is very suspicious.

It’s something I pay close attention to.

We’ve watched from the Gold Reserve newsletters out there who’s been buying the gold.

And China’s Central Bank had become the largest buyer in 2022 and 2023.

So that’s when we came out with our special report on The Death of the Dollar, which we’ve just updated.

Our thesis was that China was banking a play to replace the U.S. dollar as the world’s reserve currency using gold.

And in all the months since we issued that report, China has become and stayed the biggest buyer.

It’s unbelievable, really.

And now there’s talk they’re going to actually peg their offshore currency to the price of gold, which is very interesting.

Because if China had a currency attached to gold, do you think their currency would have a much higher likelihood of being adopted?

Of course it would!

Because we are watching in real time the great devaluation of the U.S. dollar.

If China’s currency pegs to gold, we’d see a lot of money rush out of the United States and flock to China.

This is a VERY BIG DEAL.

Now, I’m not a prophet - I’ve just studied history.

This is the history of great power competition.

When you look at England’s rise relative to the Dutch Empire and their kind of monopoly on the financial industry at the time, it really gives me insight that China would be doing this.

That’s why in our dollar protection guide, we recommend:

Step 1: Dump these investments:

The first thing to do is check your 401k, IRA and any other retirement accounts for the 16 funds on my “red flag list.”

Step 2: Buy these instead:

We recommend a number of anti-dollar hedges you can invest in today.

Step 3. Hunt for special situations:

There’s a great opportunity to make a fortune in companies well positioned for inflation and dollar devaluation.

“The Buck Stops Here,”