Breaking: Their Secret Plan Could 10x The Gold Price Overnight

A new report just broke the internet and it claims the Federal Reserve and the Treasury are going to team up together in a new mysterious type of accord to revalue the price of gold. I'm going to reveal exactly what's going on, why they would actually revalue gold and to what price and if I think this is actually going to happen in three simple fast steps. Step number one, let's go over the debt being completely and totally Debt unsustainable. When I mean debt, I'm talking about the U.S. government debt. So let's look at a chart from today's date going all the way back to 1970. On the left, we go from 20% up to 120. This is the debt to GDP ratio. So if the debt is just, let's say, $10 trillion and GDP is $10 trillion, then the debt-to-GDP ratio would be 100%. And this, for a lot of people, economists, is a very, very important metric. So going back to the 1970s, we're right around 40%, but due to all of this inflation, that's key, the debt-to-GDP went all the way down to call it 30% or so in 1980. But Reagan came in, whether you like him or not, He took the debt to GDP much, much higher. He spent a lot of money. So by the time we got to the 1990s, debt to GDP right under 80%. But believe it or not, in the late 1990s, we actually had a budget surplus. That's why you're seeing this line go down. But as you guys know, That didn't last very long. Then we fast forward to the GFC, where the government spent money like a drunken sailor. That takes debt to GDP straight up right around 100%. And then we have the Cervasius sickness, taking it literally off this chart, called 130%. Then it comes down due to all of that inflation we had. Right now, we're hovering right around 120%. Now, what's very important is this dotted or dashed. So most economists, talking heads, people you see on CNBC, on Fintwit, they would say that when a country's debt gets above 100%, to GDP. That's where they go into the no bueno zone. That's where this could potentially lead to a debt crisis. I'm sure you guys have heard that a lot lately, not only on YouTube, but in the mainstream media and on Fintwit. So once we get into the no bueno zone, we get to this point where we could face a sovereign debt crisis. Well, what does that actually mean? And what does that look like? Well, basically, your debt is so high and interest payments on the debt becomes such a massive burden that the bond market sees this and they're like, wait a minute. We see the writing on the wall, and you're never going to be able to pay that off. And what's going to happen is you're just going to have to issue more and more and more debt. In other words, supply of treasuries increasing. The deficits are even going to go higher. The debt to GDP over the long run inevitably has to go higher and higher and higher. Therefore, why would we buy your debt right now? Especially when the only way out of this Like we saw in the 1970s is to inflate your way out of the problem. In other words, those treasuries that you own right now in real terms would be much, much less because all those treasuries are basically are a long dated dollar with a little bit of interest. So basically you have a buyer's strike and we can see this happening right now with a There's a lot of the central banks that are dumping treasuries in favor of, well, You guessed it, gold. And then what happens, because there's no buyers, the rates on the debt go higher and higher and higher, which makes the debt burden even worse to the point where the Federal Reserve has to come in and do yield curve control, very similar to what we saw in the 1940s, where they have to buy all of the debt. They have to monetize the debt to keep those interest rates at a level where the economy can actually... But the release valve, as they say in that scenario, is the United States dollar. Because how do they buy all those treasuries to keep the interest rates low when there's no buyers? You guys know the answer to that. Money printer go brr. They've got to print mo money, mo money, mo money. It's funny. And then the value of the dollar collapses. And then what happens to the reserve status of the dollar? That is in serious jeopardy. This is what a debt crisis looks like. And this is what people refer to when they say the debt is unsustainable. This is what they want to avoid. And this new report claims that the solution to this problem is the Fed and the Treasury working together to revalue gold. So how would they actually revalue the gold? I mean, what are the mechanics behind this? It seems very, very complicated. Well, in reality, it's actually very, very easy. So you've got the treasury right here. You've got the Fed right here. Balance sheets. So we've got assets on the left, liabilities on the right. So according to this report, Besant and Warsh have this secret accord, and you have to also insert Judy Shelton. A lot of these ideas are coming from Judy, who's been a big proponent of gold for a long, long time, and kind of a gold-backed currency, and backing treasuries with gold, making them convertible. And more on that in a moment. So the Treasury, or the U.S. government, does have gold as an asset on their balance sheet. Everyone knows it's right around, call it 260 million ounces or so. And they've got that massive debt load. We've got the Treasuries here just giving you a visual representation of that $40 trillion of debt they have that goes into that equation we discussed earlier with the debt to GDP right around 120%. But right now, they're only valuing this gold around $40 an ounce, which is bizarre in and of itself. And you guys know that gold is trading right around $4,000 an ounce. So all they would have to do is give these gold certificates, I believe that's what they're calling them, gold certificates, basically a claim for this gold. They give those to the Federal Reserve. So then the claims on gold go to the asset side of the Fed's balance sheet. And in return, they put more. money in the TGA. So how much money do they put in the TGA, by the way, is the Treasury General Account? Well, that would actually depend on where they revalue the gold. Do they bring it up to the market rate, $4,000? Or do they take it to $10,000, $20,000, possibly even $50,000 an ounce Or higher. We're going to get into that in just a moment, but they deposit this money, let's say, in the TGA for those claims on the gold, and then the TGA or the treasury can go ahead and take that money and spend it to buy down the debt, and this is how you could get the debt to GDP down out of the no bueno zone into that level, which is far more sustainable under 100% debt to GDP. Step number two. Now let's go ahead and talk about the price they would use to actually revalue gold. In the last portion of step number one, we talked about kind of the process and how they would use gold to go ahead and start paying off some of the debt. And in that explanation, we just assumed they would take the value of the gold from $40 an ounce, where it is now, all the way up to the actual market price, which would make sense, at $4,000 an ounce. But in my view, if they did this, They would take it much, much higher than $4,000 an ounce. Let me show you why. Remember, one of the main objectives here for the Treasury and the Fed is to get the debt down to a level that's quote-unquote sustainable, so that would have to be under 100% debt to GDP. Okay, well, let's just look at the debt where it is right now, right around $40 trillion, looking at our FRED chart. But now let's look at nominal GDP. That is $33 trillion. You see the GDP right here at 33, and we've got the debt right around 40. That's how we're getting to 120% debt to GDP. But let's think about this. If we just revalued from 40 bucks up to 4,000, that would mean the value of the gold or those gold certificates going to the Federal Reserve would only be about a trillion dollars. And that ain't going to do nothing. That's just going to take the debt from $40 trillion down to $39 trillion. That's just a drop in the bucket. Remember, we need to get it under $33 trillion. So this is where the math gets really interesting, especially if you're a gold bug or even if you own gold right now. They would have to revalue the price to over $50 trillion. $50,000 an ounce. Why? Because if you took that gold the Treasury has, they call it 260 some odd million ounces, and you revalued it to $50,000 an ounce, then that would make the value of that gold around $13 trillion. Okay, well now those gold certificates go over to the Fed. They put $13 trillion into the TGA. And they can use that money to go ahead and pay the debt. Now it goes from, let's say, $40 trillion all the way down to $27 trillion. And when you do the math on that, it takes us to a very sustainable 81%. So the mechanics of how they would actually get that price per ounce up to $50,000 gets a little wonky and a little technical. We'll go ahead and save that for a separate video. But the bottom line... From step number two is they wouldn't revalue the gold right up to the market price because that doesn't make any sense whatsoever. In fact, they wouldn't even revalue it to $20,000 or $30,000 or $40,000. In order for this to make sense, they would have to revalue the gold to, I think, $50,000. And if you're going to take it to $50,000, I mean, why not take it to $100,000? And then you could really get the debt-to-GDP down to a level that would be much more consistent with what we saw in 1980. So now the question becomes, will they do this? And like I say on my videos all the time, there are no certainties. There are only probabilities. So I'm going to give you my opinion. As to whether or not they'll do this and when they might do it right now. Step number three. So will they revalue gold? I'm going to give you my prediction right now. And again, remember, there are no certainties, only probabilities. Before I give you my prediction, though, we have to remember that at the end of the day, it doesn't really matter what we think. It only matters what the market thinks. So there's a very easy way to determine if the market thinks that our debt is unsustainable. So what we talked about in step number one, we would see the interest rates go much, much higher. But it's not just the interest rates going higher. It's the interest rates going above where they otherwise would be. So how do you tell, how do you know where they would have been? Well, it's actually quite simple, because the long end of the curve, we'll use the 10-year treasury, tends to be very correlated with nominal GDP. And this makes sense, because nominal GDP is just simply growth and inflation, and therefore the 10-year treasury yield, for the most part, is growth and inflation expectations. So if the market was. Was saying, whoa, whoa, whoa, we got to pump the brakes here. The debt is unsustainable. You would see a disconnect between the yield. And growth and inflation. In other words, nominal GDP. Okay, cool. So what I want to do to start off is go back to the 1990s. This is a chart that I think is going to completely blow you away. So we go from 2000 all the way back to 1990. And on the left, we go from 0% up to 20%. Now, what is this? This blue line represents nominal GDP, again, growth and inflation. And the green represents the 10-year treasury yield. Now, editor, go and throw up the original chart. It's kind of like a green dashed line. So I just tried to connect the dots here for you to make it a little more digestible. Okay, so we go back to 1990 and nominal were a little over 5%. Let's say, why did we have this dip? Well, you guys know we had a recession in the early 1990s and you would expect nominal GDP to go down during a recession. And then we see interest rates kind of follow. But for the most part, they're almost tied at the hip. Now, a very important time frame here is this red line. Why is that? Because during this time frame, approximately, we actually had a surplus. Let me repeat. During this time frame, we had a budget surplus. That means that the government was collecting more money in taxes than it was actually spending. I know it's... Kind of hard for a lot of you to believe. You've got to kind of catch yourself there. Probably a lot of you might have just fainted. But this is true. So I want you to remember that. Now, during this time frame, we can say GDP and nominal GDP was right around 6%. We've got the 5% here. So you can see this blue line with the exception of the recession. Yeah, right around 6. We kind of maybe averaged it out. Okay, cool. And let's also note the 10-year treasury yield never really got below 5%. In fact, it was almost always above 5%. Why is that important? You guys are probably asking yourself right now, okay, George, I get it. Yeah, nominal GDP, 10-year treasury yield. But what on earth does this have to do with a debt crisis? Because, remember, I told you it's all about interest rates diverging from nominal GDP. So, editor, go ahead and throw up a chart, well, this exact chart, but let's extend it out to where we are today in 2026. And I want you guys to notice where we are as far as GDP, well, right around 6%. Well, it's exactly where we were for the most part here in the 1990s. But where's the 10-year treasury yield trading? It's trading under 5%. That means right now, as we speak, or as I'm filming this video, the 10-year treasury yield is trading 100 basis points less than nominal GDP. So what we can safely conclude by this is regardless of what our opinion is, regardless of what the talking heads opinion is on CNBC or the people on YouTube or the people on Fintwit. The marketplace, the actual treasury market is telling us that the debt is totally sustainable even at 120% debt to GDP. And we know this because if the market was telling us something different, I can assure you the 10-year treasury yield would not be trading below 5% with nominal GDP around 6%. So will they revalue gold? Well, nobody knows what they're going to be doing in 10 years or 20 years or 30 years. But for the foreseeable future, I don't know why they would, because the market is telling them they don't have to. In other words, the demand for treasuries or United States debt in the marketplace right now is not low. In fact, it's extremely, extremely high. You can't just look at interest rates going up. Again, you have to look at interest rates relative to growth and inflation or nominal GDP. And when we do that, we see that there is massive demand right now in the treasury markets, unbelievably, for U.S. government debt. Now, I know a lot of you write about now are saying to yourself, well, George, OK, maybe, maybe the bond market is saying that it's sustainable now. But what about in six months? Maybe everything changes and then it will be a huge problem because we have such a high debt to GDP ratio. But let's remember, we're talking about the 10 year Treasury yield. Not the 10-month treasury yield or the 10-day treasury yield. So the market is telling you that even when you look at the 10-year treasury yield, looking out that far, that it does not see the debt as a problem. But setting the question of will they aside, now let's address the question of should they? And here, I have a very, very strong opinion. My view is absolutely not. Why? Because let's remember, the problem with government spending isn't the interest rates in the bond market. The problem with government spending is the government spending. In other words, that government spending misallocates resources, it creates malinvestment, and it distorts the economy and lowers the standard of living, especially for the poor and middle class. That's not a bond market problem. Again, that's a government spending problem. Although I think Judy Shelton is great, obviously very, very smart, but let's remember that every single one of these ideas or this scheme of this accord with the Federal Reserve and the Treasury, it's all in an effort to lower debt to GDP to make it sustainable. Well, okay, if you lower debt to GDP down to 50%, what are the politicians going to do? They're going to spend more money. And that's the exact opposite of what we want them to do because that's just going to make the economy even worse. And right now, as crazy as it sounds, the only thing that is constraining the government, if there is a constraint, is the idea that the debt is actually unsustainable. So the very last thing we want to do is create an environment where the politicians sit there and say to themselves, well, we did a great job. Debt to GDP is 120%. We got it down to 50%. So my goodness gracious, we can spend like the drunken sailors we are and take it. Right back to 80%, 90%, hell, even 100%. Because when you look around the economy today and you see the homelessness crisis, you see the opioid crisis, you see the affordability crisis, none of these are caused by higher interest rates. None of these things are caused by the treasury market. Almost all of them are caused by the government's influence in the real economy, and the more money they spend, the more influence over the economy they have, or the way I like to say it, the more distortions they create, and the worse off every one of you watching this video is as a result. Now, if you want to know how to not only survive financially, but actually thrive in these insane times that we live in, I've got good news for you. I actually have a free newsletter that you can subscribe to right now. It goes out twice a week and it gives you all the macro alerts that you need to stay on top of these very important events. 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