The narrator argues that “inflation” originally meant expanding the money supply but was deliberately redefined by monetary authorities into a vague “general rise in prices” to obscure that the Federal Reserve’s money printing is the true cause, calling it state-run theft that transfers wealth to those who get new money first. He contends a true general price level cannot be objectively measured (citing Mises and Rothbard), so indexes like CPI and PCE rely on arbitrary choices, and warns that new Fed chair Kevin Worsh’s stated preference for core and trimmed-mean inflation measures is dangerous. The piece concedes Worsh is technically right that recent price spikes from the Trump-launched Iran war, the Strait of Hormuz closure, and pandemic lockdowns aren’t “inflation” in the strict sense, but argues that trimming the indexes lets the political class dismiss the real pain it causes specifically to justify creating more actual inflation.
Redefinition of inflation: Inflation once meant the act of increasing the money supply, but authorities and allied economists reframed it as a mysterious general rise in prices to avoid blaming any single group. The narrator insists money printing by or enabled by the Fed is the one true culprit, almost entirely absent from establishment discourse.
The impossibility of measuring a price level: Drawing on Mises and Rothbard, the narrator argues a general price level does not and cannot exist because prices are exchange ratios, not measures of subjective value. Building an average requires arbitrary decisions about which goods to include, how to weight them, and how to handle quality changes like an improved television at the same price.
Core and trimmed-mean measures: Core inflation strips out volatile food and energy, while a trimmed mean or median excludes the most extreme price moves on both ends, which is the approach Worsh said he prefers. The narrator frames this as a way to make reported inflation lower and more manageable for the Fed.
Supply shocks versus monetary inflation: A genuine supply shock like the Hormuz closure or COVID lockdowns raises some prices but, with a fixed money supply, forces offsetting price drops elsewhere as demand falls for complementary goods. Only manipulating the monetary unit can raise prices across the entire economy.
Real pain regardless of definition: The narrator stresses that price increases from the Iran war, lockdowns, and decades of government intervention in housing, education, energy, and healthcare are not technically inflation but cause real pain. He warns that trimming the indexes amounts to the political class declaring much of the economic pain it causes irrelevant.
Michael Howell of CrossBorder Capital argues the global liquidity cycle has peaked and is rolling over, putting his odds of a crisis near 90%, though he stresses this is a gradual inflection rather than an instant correction. His core thesis is that money is being sucked out of financial markets into a “buzzing” real economy driven by deficits, Treasury QE, and the eyewatering AI capex boom, which is good for earnings (the E) but crushes valuations (the PE) as inflation rises and yields climb across a bear-flattening curve toward a 5% long bond, all classic late-cycle signs. He contends China, not the Fed or ECB, is the real driver of gold (the People’s Bank hitting the brakes on liquidity has pulled gold down short-term), that China is using gold as collateral for the yuan and likely holds closer to 6,000 tons rather than its claimed 2,000, and that the gold-oil ratio’s persistent 20x mean reversion implies $200 oil if gold stays underpinned at $4,000-$5,000.
Liquidity cycle rolling over: Howell’s models show the global liquidity cycle peaked, with US liquidity dropping as money shifts to the real economy, the Fed injecting roughly $600 billion into money markets since late October, and the Treasury suppressing bond volatility through buybacks. He sees the glass as half empty, with cracks starting to appear in the system.
The E versus the PE: A strong economy boosts earnings, but Howell warns the PE multiple comes under pressure as liquidity drains and inflation rises, since earnings quality deteriorates in high inflation. He argues the PE is the cycle while the E is the trend, and the PE often dominates.
Bond market and the fiscal dilemma: With nominal US growth possibly 7-8% and the long bond near 5%, Howell sees upward yield pressure that’s bad news for Scott Bessent and deficit funding. The worse the fiscal situation, the more bond market pressure and the greater the financial-stability risk.
China drives gold: Howell dismisses a Western debasement trade and credits Chinese retail buyers (barred from crypto, choosing gold over stocks and real estate) plus secretive government accumulation for gold’s rise, with the Shanghai exchange now the marginal price-setter. He estimates China holds closer to 6,000 tons versus its claimed 2,000 (Fort Knox is 8,000) and uses gold as the collateral base to internationalize the yuan.
AI inflation and the gold-oil ratio: AI is unambiguously inflationary short-term given the capex scale, and Howell compares it to Global Crossing’s fiber-optic bust where cable prices fell 90%, predicting AI prices will tumble. He highlights the gold-oil ratio’s 20x long-run average and mean reversion within two to three years, arguing that with gold at $4,000-$5,000, oil could logically reach $200, while the TIPS market’s 2.6% implied 10-year inflation badly misprices the risk.
Taylor Kenney argues the real question around Trump’s call to audit Fort Knox is not whether the gold exists but why the US Treasury still values its gold at the 1973 price of $42.22 an ounce, which puts roughly 150 million ounces at about $6 billion on the books versus nearly half a trillion at spot. She contends this undervaluation is deliberate, because revaluing gold would put it back at the center of the monetary system and amount to admitting the dollar has lost almost all its purchasing power since 1973, threatening a system backed only by oil (a crumbling petrodollar) and trust. Citing the 1934 revaluation (where gold holders gained nearly 70% and dollar holders lost about 40% after Roosevelt first confiscated gold via Executive Order 6102) and Nixon’s 1971 closing of the gold window, she warns that those who position before a revaluation gain while those holding paper or paper-gold promises get wiped out, urging viewers to hold physical gold.
The Fort Knox audit and missing context: A former CIA official was arrested after investigators found over 300 government gold bars worth more than $40 million in his home, requested over time as “work expenses” no one can explain, days before Trump posted “Time to audit Fort Knox” on Truth Social. Kenny says she has a better chance of finding Bigfoot in Fort Knox than the gold, but frames that as the wrong question.
The $42.22 accounting illusion: The Treasury values every ounce of US gold at $42.22, set in 1973 and never updated, making Fort Knox worth about $6 billion on the books versus closer to half a trillion at current spot. Kenny argues leaving this asset so undervalued through crises is simple and deliberate.
Why revaluation threatens the dollar: Updating the number would put gold back at the center of the monetary system, an existential threat to a system reliant on paper confidence and backed only by oil and trust. The same institution claiming gold doesn’t matter refuses to update a number that would prove it does.
Central bank buying and historical revaluations: Every central bank holds gold and has bought the most in modern history over the past five years, which Kenny reads as positioning for what’s coming. In 1934 Roosevelt repatriated gold via Executive Order 6102 at $20.67 before revaluing it to $35, and in 1971 Nixon delinked the dollar before gold was revalued to $38 and then $42.22, with dollar holders losing roughly half their purchasing power.
Physical versus paper gold: Kenny stresses that gold ETFs and tokenized gold are fine for price exposure but carry counterparty risk, invoking how nations holding dollar claims to gold were stuck when the US defaulted on convertibility in 1971. Her bottom line is that a promise is not the real thing, so if you don’t hold it, you don’t own it, and the better question is whether you personally have physical gold.
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