Luke Gromen — These Are The Catalysts That Could Send Gold & Silver To New Highs

1:08 100% of receipts is already spoken for — and none of it is cuttable

• "Roughly 100% of receipts today are interest and interest-like obligations": interest on the debt, entitlements (which carry an inflation-adjusting component, so they behave "like debt in a hard currency"), and veterans' benefits — up to 8% of revenues from basically zero before the 25-year forever wars.
• That is the starting position every proposed fix has to work from. "Austerity is not an option. The only form of austerity you can implement is cutting rates to near zero and financing at the front end — and that's a currency issue."

2:12 The plan: re-regulate banks into duration, then backstop them — "that's just QE"

• The stated fix is to lower the front end, let the long end rise, and re-regulate banks into buying much more long duration so it doesn't count against their capital ratios — then supply dollar swap lines so a rate rise doesn't blow them up (the Bank of America problem: long, low-yielding bonds bought during COVID, then rates rose).
• "That's just QE. It's kind of like when you cosign a loan for your kid — it ain't your kid taking out the loan, it's you. The swap lines to supply liquidity to any holder of long-term Treasuries mean the actual holder is the Treasury or the Fed."

3:02 The short end: stablecoins as a T-bill distribution channel

• Cut rates and shift issuance forward — "I think that's part of the plan, including for stablecoins. Ideally Bessent would love to issue a bunch of T-bills backed by stablecoins, or stablecoins backed by T-bills, and then cut the rates on them to basically nothing. And voila."
• "It would mechanically work, and that is a very close relative of basically direct money financing of what is now a two trillion dollar and rising deficit."

3:25 Where everyone stops: the second and third derivatives

• "This is the part where I consistently see policymakers and a lot of investors not spend enough time with the second and third derivatives." The first derivative is a problem apparently fixed; the second is inflation from money-financing the front end and bank-QE at the long end; the third is hot prints, upward pressure on the long end, and pressure to raise rates again.
• "At the end of the day it's all fine, it can all be done, it'll work. But it's basically just what they did during COVID, and it comes out in the currency. It's really good for gold. Should eventually really be good for Bitcoin. It's good for stocks. It's not good for political stability in this country."

7:08 The propaganda tell — "30 versions of the same thing"

• On why the dollar was strong in 2026: flight-to-safety flows out of the Middle East, plus "Warsh come in and be widely perceived to be a hawk, which is interesting."
• The heuristic: "anytime I see something happen and I get basically 30 versions of the same thing said about it — that's usually your first clue that someone's attempting to propagandize you. And in this case it's Warsh is a hawk."
• Behind it he sees a genuine split: "an ongoing civil war within policy circles in Washington" between Wall Street / dollar dominance / the financialized economy, and the defense and intelligence circles that realise "we can no longer make our own military without China — and therefore we need a much weaker dollar."

8:22 In a multicurrency system, gold is the reference point

• Price oil outside the dollar, price commodities outside the dollar, net settle in gold — "which China is sponsoring, Russia is helping. As that system gains traction, gold is going to increasingly be the reference point for every currency."
• The corollary that confused people this year: "gold going from 5,000 to 4,000 — that's dollar positive in a multicurrency world." Part of 2026's dollar strength was just gold's correction read backwards.

8:46 Nobody is short dollars — the flow test that decides everything

• The world has borrowed $13–14 trillion of dollar-denominated debt, "sure" — but it also holds $60 trillion of dollar assets gross, ~$20–25 trillion net, including $9.5 trillion of Treasuries. "As we've said ad nauseam, over and over and over: nobody's short dollars."
• So a dollar that gets too strong — because commodities are priced in dollars, or because a currency needs defending — produces one behaviour: "they're going to sell Treasuries. And we've seen that play out multiple times just in the first half of this year."

9:58 Bessent had the choice and chose liquidity — "they are who we thought they were"

• Japan sold Treasuries down to raise dollars to defend the yen. Given the choice between letting yields find their level and stepping up with swap lines and dollar liquidity, "what did Bessent do? He did exactly what Powell did, exactly what Yellen did. He did what they all did."
• Warsh pre-announced the same in congressional testimony: hands off "unless there's a crisis, and then I need to establish a fair price for assets" — he was talking about Treasuries. "He's saying they're going to do the same thing."

10:58 The turning point — and gold up 14% in five days

• "Last week, 10 days ago, with these interventions — I think it's a very big turning point where the perception, the propaganda that Warsh is a hawk is in the process of being thrown in the trash."
• "And it was Lucy in the football. It's easy to predict, because the fiscal math doesn't math. You can't have a strong dollar that doesn't blow up the fiscal math increasingly quickly. And it started to do it through Japan this time."

14:21 The Iranians don't have to beat the US military — just the Treasury market

• "The 10-year Treasury yield was at 3.94% when we bombed Iran on February 28th. And now it's 4.7." Every time it hit 4.4 through April, Trump backed off; "to their credit they backed up 4.6, 4.7 — but that's not a sign of strength. That's oh God, we can't defend that level without inflation picking up. We need to defend a higher level."
• Had the US struck Iran's energy infrastructure, "practically speaking the 10-year never would have gone to six. It would have gone to five and then they would have started buying 10-years one way or another. It wouldn't be explicit yield-curve control, but they would have to do something."

14:58 The war math — offense is cheaper than defense, and the Pentagon knew

• The IRGC's claim that it can produce offensive weapons faster than the enemy can produce defensive ones is "the exact same thing I heard from a well-placed US source three months ago. The US has known this the whole time" — which is what the leaked stories of Dan Caine and Pentagon generals talking Trump down were about.
• Warfare is arithmetic: the way the Allies planned the post-war monetary system by 1943 by counting German factories, bombing runs, casualties and hit effectiveness. Now the updates read "we thought we hit 90%, we only hit 30%… they still have 70% of their offensive weapons."
• The end of that chain: "we're heading toward a point where we can't defend them at all, Mr President — and once we hit that point, you will have completely destroyed the credibility of the US defense umbrella around the world."

17:51 The military is part of the Treasury bid — and that has yield implications

• A senior officer told him 20 years ago that the war colleges discuss something Wall Street doesn't: "part of the military's job is to be the muscle to threaten people into buying Treasuries" that they might not otherwise want.
• "Use that lens and overlay what we just talked about. If the defense umbrella has no ability to be an umbrella any more, because the opponent can make things faster than we can — guess what that implies for yields, for the dollar, for a lot of things."

20:19 The breaking point may already have started — soft-form YCC

• "We may have already started to see it with this whole soft-form yield-curve-control episode of the last 10 days — particularly given how markets are reacting": 10s basically back to where they were, the yen already retracing over half its intervention-driven strengthening.
• Expect fits and starts, and more propaganda. Warsh on inflation two weeks ago — "inflation basically is what I say it is" — is "the first step in propagandizing this. He knows what I just laid out. Inflation's going higher. It has to. But he'll just lie about it, which is fine. This is what happens in these situations."

21:47 Defense stimmies — and the genius of debasing together

• Within a five-day period after the NATO meeting, "we had the US, the UK, Germany, Korea and Japan all come out and say we're going to borrow more money and spend it on the military. That's basically just defense stimmies" — circular, because the US supplies the dollar liquidity that stops those bond markets forcing Treasury sales.
• "There's a real genius to it: if the US, UK, Germany, Japan and Korea all do this at the same time, then all their currencies against each other all debase against gold and against stocks and against inflation — but not against each other."
• Result: "higher inflation that is said to not be higher inflation, and a weaker dollar that will look on our screens like it's not a weaker dollar against all the fiat things. And anybody in the establishment who mentions the fact that gold is 6,000 or 7,000 bucks will be ostracized." His verdict isn't condemnation — "they're stuck, they've got to do something. If I'm in their shoes, they're doing exactly what I would do. Hey, respect. And I know what to do with that."

23:31 USD/JPY — intervention at 163–164, 159.25 now, and the rematch

• They intervened near a multi-year high of 163–164; reported sourcing says 160 triggers another. "By the way, we're at 159.25, so we're almost back to 160."
• "Nothing's changed with the underlying": the Middle East pushed Japan into a current-account deficit, oil is back over 80, and Japan is structurally short dollar oil — more imports means more dollars, which means inflation, bond-market selling and currency selling. "You just had a bunch of liquidity come in and try to push a level down artificially… I absolutely think the market's going to push back to where it was."

24:54 The real signal is the market's reaction to the second intervention

• "There has been this aura around Bessent, this aura around Warsh, that essentially they're Wall Street's guys. They're not going to do what Powell did, what Yellen did. They're practitioners, they've been in markets. They're Druckenmiller's guys, they're Soros's guys. They're going to have to do the same stuff, because the math doesn't math."
• "I'm going to be less interested in the actual event — oh, hey, they're intervening in the yen again — and much more interested to see the reaction of the markets, because I think that'll be enough where everyone will be like I got fooled again, I can't believe I bought into that nonsense. You could see equities rip, gold really rip, and I think it could be good for Bitcoin."
• The parallel he keeps returning to: "it reminds me so much of the DOGE situation. Everyone now is like oh, DOGE, how stupid was that — but do you remember when they rolled it out? Gold sold off six weeks."

30:04 The white-flag test, Jackson Hole, and China's pain tolerance

• Jackson Hole has repeatedly been "a big venue for releasing major pivot points in terms of policy, dating back to the 2010 one with Bernanke starting to lay out QE2 as a possibility" — the host's candidate catalyst for Warsh revealing dovish colours.
• The bigger diagnostic is whether the US waves the white flag before the midterms. "If we don't get the white flag, we can eliminate hubris right now" — leaving only 5D chess or a controlled president, "because strategically it's not working for the US." His base case for the war itself remains "Trump's hubris — he got taken in by how easy Venezuela was."
• China's pain tolerance is the other half: greater than anyone's except maybe the US, and "certainly greater than the Treasury market's" — demonstrated repeatedly, and without big adjustments yet. An extreme lever he's told is real: mandate that every internal-combustion passenger car in China be exchanged for an EV within four weeks. "Oil usage down another two million barrels a day. Check to you, Washington."

37:04 $100 million on mining education versus $37 billion on Iran

• On the White House hard-rock-mining push: "there's 40 years of moving away from manufacturing and mining to financialization. There's just not the bench depth there. There's not the bench at all." He has argued the education side "in numerous different podcasts" as something that needs to happen.
• The scale check: "it's encouraging to see we're spending $100 million on education over an undefined period. And that compares to $37 billion in Iran in four months. In a perfect world we spend $37 billion on education and $100 million on Iran — but that's the world we hope for, not the world as it is."

37:32 "Let's go to wartime footing like 1940" — do the arithmetic first

• 1940 meant a 25%-of-GDP fiscal deficit (today's is about 6%, so roughly 4× — $8 trillion a year), and the Fed bought basically all of it: its balance sheet grew 10× in three years, mostly at the front end, mostly cash-financed at 3/8 of a percent.
• "So you're going to have to have the Fed finance $8 trillion a year at 3/8 of a percent in the T-bill market. What do you think inflation's going to do? You're talking about 30, 40, 50% inflation for the next three, four, five years. Now, which part of the long end of the curve do you want to own? Where do mortgages trade? What happens to the entire US banking system that holds bonds as collateral?"
• Then the two clinchers everyone forgets: capital controls — "strict capital controls end the dollar's reserve status; you literally have to tell everyone in the world you can't take your money out. That's your big reset right there. It's forced." — and a 90%+ top marginal tax rate, which is what 1940 actually did. "Still want to go to wartime footing?"

39:53 Reshoring in 5–10 years is a pipe dream — 10–15 best case, probably 20

• "When you apply it to hey, we're going to reshore in 5 to 10 years — it's a freaking pipe dream. Maybe 10 to 15 best case. Probably more like 20."
• Even granting AI's leverage — an engineer with AI is like six engineers with slide rules — the constraint is physical, "and oh by the way, China's got AI too… they may not have quite as good frontier models, but they are very far ahead of us in installed base of actual production capacity."
• The consolation: a 20-year timetable "probably prevents these neocons from leading us into a stupid world war."

42:47 The Longer Telegram — China's 20-year window while the US was distracted

• "The reason China caught up to us so easily in 20 years was because we were distracted from '02 to 2020 with this nonsense in the Middle East" — the anger is at the missed metals-and-mining decades, not at America.
• "You can read something called the Longer Telegram, by a former senior official of a US ally" — the Chinese saw a unique window of opportunity. After '08 especially: "wait, you're just going to print the money for this stuff when you get in trouble? Okay" — and they went around the world with what former World Bank chief economist Carmen Reinhart called opaque lending along the Belt and Road, securing supply dirt cheap.
• The hangover framing: "you don't get to drink 16 bottles of Jack and then say okay, I'm going to go run a marathon now."

45:06 The dollar has hyperinflated against copper mines 5 through 50

• The host's number: the world needs ~50 mega copper mines in the next 20 years for AI, data centres and military equipment, and "there aren't actually 50 deposits available right now" — before permitting, financing, and the thousand people on site for 12–18 months it takes to build one.
• Gromen's translation into monetary terms: "if something's impossible, you know what the dollar value of 50 major copper mines is? It's a fugazi. It's ephemeral. The dollar has hyperinflated against the major copper mines number five through number 50 that we need. There is no amount of dollars that can get you them, because they don't exist."

46:44 How to position: bonds down 90% against gold, "at least 99% more to go"

• "There is no way they can do this AI build-out, infrastructure build-out, reshore without it being massively inflationary. The bond market has to basically go down."
• "Long-term bonds in the United States are down 90% against gold in the last 10 years. They're going to have to go down at least 99% more against gold over the next 10 to 20 years if we continue to try to reshore and build. And I think we're going to — and that's fine. You just got to load up the suckers holding the stuff and then do it."

47:59 Can the US grow out of it? Only with YCC and a currency hit

• Against the Treasury Secretary's 8% GDP talk: you'd need an AI productivity boom "but it cannot drive any layoffs in the short run — if unemployment goes up 5%, the entire levered system comes unwound. So we need a productivity boom where nobody loses their job. That's a contradiction. That's probably not going to happen."
• Even granting 8% growth: "who's going to hold bonds at four if you're growing eight nominal? I don't own bonds at four when growth's eight, bonds at two when growth's eight."
• "So yeah, they can grow out of it. They just have to do some form of yield-curve control and let the currency take the hit. You'll have nominal growth, but in gold terms you won't have any growth — it'll be austerity in gold terms, growth in dollar terms. And once you do that, that's how you can get out of it."

50:23 Bullion over miners — and the bottom is in for gold

• Asked to choose between a diversified large-cap miner portfolio and the metal: "I would prefer to own gold bullion. To the miners, I own both — it's probably an 80/20 split, maybe a 75/25 split, bullion to miners," held in physical form in private vaults at different locations, almost all in the US with a little in Switzerland.
• The reason is legislative risk, not operations: "I don't want to be wrong for the right reason. If gold's going back into the system, there are risks of nationalization of assets — we've already seen that; the United States is threatening to do it or has done it… It's a lot easier to grab gold in the ground than to go door to door asking people to take you to their private vault."
• Is the bottom in for gold this year? "Yeah, I do." Back to 5,000? "Yeah, I do think it'll get back to 5,000. They're stuck… they're going to have to intervene again. Yen, Treasuries — the math is the math."