It has topped the all-time high set in 1980, even adjusted for inflation. While it does seem high, when understand what is happening and what is likely to happen, it’s pretty clear that there is a lot more room to run.

The current bull market in gold has been largely driven by central bank purchases, not retail investors piling into ETFs. For the first time since 1996, central banks now own more gold than U.S. treasuries. Why? A variety of reasons, one of which is the fact that the U.S. is no longer seen as a reliable, stable force on the world stage, and the use of the dollar and the U.S. stranglehold on its SWIFT banking system gives the U.S. a tremendous amount of power to bring disfavored persons and nations to their knees financially. U.S. sanctions can essentially de-bank anyone by blackballing them from financial transactions, effectively causing their accumulated wealth to evaporate. That’s great if you want to bring pressure to bear on rogue states like Russia, but other nations are now waking up to see that like tariffs, this power can be abused on the whim of an unstable dictator, and accordingly we are watching the erosion of the dollar as the world’s reserve currency in real time.

In addition, the U.S. is no longer fiscally responsible in any way, shape or form. Apart from a brief period during the Clinton administration, the U.S. has run budget deficits my entire life. Many have said “Reagan proved that budget deficits don’t matter,” but that is not entirely true. What is true is that the U.S. can safely run a 2% budget deficit indefinitely, so long as its economy grows by 3% and the interest rate on the debt is manageable. The national debt grows, but the ability to service the debt grows more, and insolvency will never be a concern.

However, a “manageable” budget deficit is no longer the case. The “Big Beautiful Bill” puts the budget deficit in the 6% ballpark. Worse, tariffs are taxes that kill trade and shrink the economy. In addition, shrinking the population by deporting a significant portion of the work force also shrinks the economy, as the dollars those people once earned and spent will no longer contribute. In addition, both tariffs and deportations drive prices higher, as imported goods and labor become more expensive, causing inflation, and inflation causes lenders to demand higher interest rates to compensate for the additional risk.

So what we have now is an unsustainable budget deficit, a shrinking economy that reduces the ability to service the national debt, and the potential for rapidly rising interest rates that will make debt service much more costly, effectively teeing up what Ray Dalio calls a “Big Debt Crisis”. The 2008 financial crisis was a debt crisis, but it was on a much smaller scale than what is being set up now. A host of geopolitical forces and domestic forces coming to a head in a way that is causing great upheaval, and will get exponentially worse before things improve. The closest analog we have is the Great Depression and WWII, but I fear that this one will be even worse.

So what does this mean for gold? In 2017 I noted that gold had likely bottomed after the inflationary period following the 2008 financial crisis, and in 2019 I put a sizeable chunk of my net worth into a 2x leveraged gold ETF. In the June of 2024 I recognized that my worst concerns were likely to come true, and I added the rest of everything I had. I do not regret the move. I firmly believe that we are witnessing the end of the dollar as the world’s reserve currency, and indeed the end of the U.S. as the dominant power in the world. This will drive gold to astronomical levels. In early 2025, people were laughing at me for saying that gold will end 2025 over $4k, and now there are quite a few others that now see it. I believe that gold will likely peak somewhere in the ballpark of $10K per ounce, and perhaps higher. Moreover, it’s going to happen a lot more quickly than you might expect. Remember, Jerome Powell’s term as fed chair is up in 2026, and you can guarantee that Trump will put in a lackey. With a simping Congress and Supreme Court, Trump will puppet the fed into incredibly stupid maneuvers, destroying U.S. credibility and the dollar, causing great economic hardship. Gold is the go-to asset for such a situation.

No, the time was 6 months ago.