Tavi Costa is structurally bearish on the dollar, believing it’s the start of a trend driven by interest rate differentials and monetary policy urgency in the US versus other countries.
The US is paying 4-7% of GDP in interest payments, a major driver of dollar devaluation and potential future depreciation.
Gold is entering a secular bull market, potentially one of the longest in coming years, driven by monetary imbalances, lack of exploration, and overspending in the gold industry.
Emerging markets are undervalued and have cycles that can lead developed markets, especially the US, often linked to gold secular bull markets.
The rotation of commodities from gold to silver to copper and back to oil and gas is just starting, with natural gas and coal likely to resurge in the next 5 years.
Deglobalization trends, onshoring, construction needs, and reduced dependency on China will drive natural resource prices higher.
The US’s current account deficit is a major problem, being one of the largest in history, potentially requiring dollar devaluation against other fiat currencies to adjust.
Fiscal and monetary constraints in the US may lead to a 3-5 year period of economic struggles, making it challenging for investors to allocate to hard assets without leverage.
The US will likely double down on natural gas and coal in the next 5 years due to surging electricity demand driven by AI and other factors.
The private market of AI will drive construction demand, potentially becoming the biggest US development since the building of highways, requiring substantial materials.
Low housing inventory will also drive more construction, contributing to increased demand for materials and resources.
The US could revalue its gold reserves from $42.22 to $15,000 per ounce, generating $3.9 trillion in cash for the Treasury without increasing national debt.
Gold certificates held by the Federal Reserve are perpetual, zero-coupon instruments that can be swapped for new certificates at current market price, allowing the Treasury to obtain $750 billion in new cash.
The silver market is expected to surge to $100+ per ounce as people reinvest profits from selling gold at the revalued price.
The Federal Reserve is anticipated to cut rates by 0.5% in September, potentially boosting stock markets and temporarily suppressing gold prices.
July Comex gold deliveries increased to 12,000 gold bars (100 oz each), triple the previous year’s level, indicating large bets on potential gold revaluation.
Experts advise keeping “a little bit of gold at home” as protection against currency resets or hyperinflation, while maintaining a diversified portfolio.
Revaluing gold to $15,000/oz could disrupt America’s financial adversaries by making it harder to convert Treasury bonds into gold.
A gold revaluation to $15,000/oz would likely cause a slight decrease in the dollar’s value without significantly impacting retail prices or causing a currency collapse.
Unprecedented flow of physical gold out of exchanges contrasts with record-high speculation in the stock market, signaling preparation for an economic reckoning and continued de-dollarization.
Central banks bought 166 tons of gold in Q2, a 41% increase over historical averages, indicating significant accumulation by major financial institutions.
China’s insurance regulator mandates major companies allocate 1% of assets to gold, funded by selling treasury holdings, as part of a broader de-dollarization strategy.
New African currency backed by critical minerals (cobalt, lithium) aims to reduce reliance on foreign currencies, especially the US dollar, and decrease dependence on international loans.
Africa holds up to 70% of the world’s cobalt, with Zimbabwe being a top lithium producer, making these critical minerals crucial for technological development and economic growth.
The US dollar lost over 10% in value in 6 months, with Fed board member Steven Mirren advocating for a weaker dollar to de-dollarize and reshore manufacturing.
Big money is buying physical gold and silver in large quantities, with 3 million ounces of gold and 8 million ounces of silver delivered in August alone.
The “little man rule” suggests the herd always loses by following trends set by insiders with inside knowledge and courage to think independently.
Premiums on gold and silver coins are historically low, except for silver eagles, indicating accumulation by big money before potential price increases.
Powerful institutions and possibly the US government are driving gold buying trends in the US, seeking physical delivery regardless of prices.
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