Written by Bryan Lutz, Editor at Dollarcollapse.com:
Over the past twenty years, there’s been two times when gold has really taken off. During the great financial crisis (2008 – 2011), and at the beginning of 2024. In 2008, money was moved into gold as a hedge against the market crashing. There was too much bad debt in the economy. Back then, the bad debt was in real estate. Now, it is almost everywhere. Consumer credit card delinquencies are at the highest since 2008. Student loan delinquencies are also up. Mortgage delinquencies are also up. Commercial office vacancies are at their highest in the United States most urban business centers. Many zombie companies are operating entirely on debt. And the United States recently passed $37 Trillion in debt.
Debt drives the flight to gold, but with an economy so flooded in debt, why isn’t gold rising faster?
Why isn’t gold rising faster?
The answer is not simply Bitcoin, and cryptocurrencies.
Gold itself is useful. It is the oldest and most trusted store of value. Millennials, Gen Xers, and even Gen Z realize those things, but they are not concerned about the debt as much as they are concerned about the entire system. The global financial system is broken. A gold revaluation will not fix or change what younger generations have experienced.
Inflation.
Broken trust in government to keep its promises.
Growing social issues despite the promises of the inextricably linked Federal Reserve and US Treasury. Many of the younger generations see through the soldering of monetary and fiscal policies, the other half are either suspect or are done with the system altogether. Fiscal dominance need not be a new category for the US economy. The linkage between the annual federal budget and M2 supply is as clear as day. M2 rises as the government spends. And now, there is little to no “check and balance” that can seperate the two.
So younger generations do not just want to solve the debt problem. They want to solve the system.
A gold revaluation would only be one step forward. Yet, if it were on the premise that the central banking system remains then it is only one step backward into the slippery slope of the fiat abyss.
Bitcoin ETFs are Outpacing Gold ETFs
When BlackRock’s IBIT ETF was released in early 2024, money poured in…
This time, not from the younger generation, but from the boomers. Boomers and institutional money managers could now invest in Bitcoin without having to directly own Bitcoin.
Within a few months, here’s what that looked like versus Gold ETFs in March 2024:
The Bitcoin ETF market cap was over 50% the value of Gold ETFs. The speed at which money was piled into Bitcoin ETFs was in a word, the old cliche, “unprecedented.”
Now, a little over a year and a half later, Bitcoin ETFs are rivaling the market cap of gold biggest ETFs.
When you compare the flow money between Gold and Bitcoin ETFs in the last two months. Less money is flowing into gold, and more money is flowing into Bitcoin.
Why is this?
It is because although gold will play a role in whatever the next monetary system looks like, the same systems won’t be re-built, or accepted the younger generation. They’ve experienced the errors of the previous generation and they want something different.
