For some, it began, oddly enough, with Elon Musk.
Back in February, Musk triggered a firestorm when he suggested — on X, of course — that AI could streamline bloated government bureaucracies.
His series of tweets was met with Molotov memes and blue-haired grannies wielding both anarchist tattoos and Fascist flags, inexplicably targeting Cybertrucks. But buried in the noise was something prescient: a warning about government waste, monetary mismanagement, and creeping fiscal panic.
One post in the thread suggested Musk and his then buddy, the president of the United States, were going to “visit the gold” in Fort Knox. This ignited widespread enthusiasm for the idea that the U.S. government could restructure its massive ongoing debt obligations by simply revaluing one of its principal assets: gold.
Today, the government’s gold holdings are officially marked at $42 per oz. But if the Treasury decided to liquidate its holdings, as the UK did in 2020, it would fetch $3,401 per ounce.
That thread continues to last Friday, August 1, 2025, when the Federal Reserve published a small but remarkable essay last week.
To be clear, the U.S. government still officially values its 261.5 million troy ounces of gold at $42.22 per ounce, a relic from the early 1970s. But what if — as Ray Dalio, Elon Musk, and even the Chinese central bank seem to believe — the U.S. is preparing for a new monetary regime? Here’s a snippet of the Fed’s conclusion:
With the Fed research paper’s release last week, for the first time in living memory, a principal economist at the Fed has openly explored the mechanics of gold revaluation. (Source: Bloomberg)
According to Musk’s new Grok model, revaluing the U.S. gold stash to today’s ~$3,380 spot price would generate an $873 billion paper windfall. That could be used to expand the Fed’s balance sheet, issue new certificates, or offset the nation’s eye-watering debt load.
We did our own calculations back in February and released these results: Elon Musk’s Coming Gold Shock Could Instantly Start a 700% Rise in the Price of Gold Over the Next 2 Years!
The billionaire founder of Bridgewater Associates, Ray Dalio, added in an interview on X yesterday: “The U.S. dollar used to be backed by gold. It’s not farfetched to think we may be headed there again… Once people lose trust in fiat, the pattern repeats: print, inflate, devalue, and return to gold.”
All the while, China has been preparing.
Chinese gold deliveries against futures contracts have doubled in the past month. The signal is clear: when the faith in fiat falters, the old gods of money — gold, silver, hard assets — tend to return.
These are some fairly sizeable developments in the gold market. But they’re mostly on the radar of a few cranks who frequent these stories on social media platforms.
Again, you can review our research on the gold price here. You’ll also find access to our recommendations on how to play any new movement in the gold market.
Markets Edge on in Twitchy August
August has long been a trapdoor month for markets.
In 2010, it was European banks. In 2011, the U.S. credit downgrade. In 2015, China’s yuan devaluation. In 2022, Powell’s hawkish turn. Last year, a poor July jobs report combined with a snap reversal in the yen carry trade triggered a sudden 1,000-point drop in the Dow.
So far this August, we’ve seen Powell under siege, inflation data in question, and a fresh wave of Trump tariffs — each enough to rattle investors even in isolation.
Yesterday, equities whipsawed after news broke of a 50% tariff on Indian imports, aimed at punishing Delhi’s ongoing purchases of Russian crude. By day’s end, the major indexes recovered slightly, but the tone of the market has clearly shifted.
Trump’s reciprocal tariff deadline — long advertised as a hard line — arrived at midnight last night. But not without drama.
In the final hours, Trump squeezed in one last round of changes: raising duties on India, surprising Japan with rates higher than expected, and teasing China with the possibility of similar action. Switzerland, hit hardest among U.S. allies, may cancel a major jet order in retaliation.
The U.S. now imposes higher tariffs on nearly all major trading partners, and confusion reigns in both Tokyo and Brussels. A Goldman Sachs note this morning warned, “The apparent lack of coordination is creating new uncertainty for multinational firms already struggling with capital costs.”
Bonner’s Bubble Math: $30 Trillion in Ghost Wealth
Bill Bonner did some interesting back-of-the-envelope calculations this morning, then extrapolated them into a forecast for the future of U.S. politics. For our purposes, we’ve added Bonner’s bubble math below. If you’re interested in his forecast, you can read the whole post here.
“In the second quarter,” he writes, “stocks partied like it was 1999… But it was the worst of them that did best. Meme stocks? Up 77%. Bitcoin-sensitive stocks? Up 112%. Unprofitable techs? Up 57%.”
Meanwhile, the economy grew by a modest 0.7%. The S&P 500 rose 27%. Bonner calls this the rise of “ghost wealth.”
Since 1971, U.S. GDP has increased 24-fold. Stocks? They’ve surged over 60 times.
That’s why Bonner warns: “More than half of the market’s current value is unsupported by real output. The total U.S. stock market cap is around $60 trillion. Look for a $30 trillion loss when the bubble finally deflates.”
Crude Hope, Trading
Oil rallied briefly yesterday on fears that India’s tariff-induced pullback from Russian crude would tighten supply. But it closed at a five-week low after Marco Rubio hinted at new sanctions coming for Russia.
Despite nearly 20% losses over two years, many energy investors remain in full bull mode, sharing memes that say: “We Remain Bullish.”
Former Saudi oil minister Ali Al-Naimi’s reminder feels timely, quoted in this morning’s Bloomberg opinion: “I’ve seen oil at under $2 a barrel and $147.” The world still needs a record number of barrels to keep its homes warm, its cars running and its data centers powered up.
Cycles cycle. Hope fades last.
Food Fight: Coke Blinks
The CDC published new numbers showing that more than 60% of American kids’ diets now consist of ultra-processed foods: burgers, pastries, soda, and pizza.
Health Secretary RFK Jr. blames seed oils and corn syrup. In a sign that the food industry is reading the political room, Coca-Cola has agreed to replace high-fructose corn syrup with cane sugar in select markets — a move reportedly endorsed by President Trump himself.
It’s a small shift, but it confirms what we already suspected: everything from your soda to your currency is becoming political. This theme was a hot topic in our new Grey Swan Trading Fraternity research forum (which is still in beta testing).
No conclusive trades arrived, but the macro theme is obvious: kids eat poorly in the U.S. The industry that produces all manner of sugary, salty processed snacks is under the newly fabricated Make America Healthy Again (MAHA) microscope.
Coca-Cola and its sister companies in the industry will have to move quickly to maintain their market share of the nation’s lunch money.
~ Addison
P.S. Our Grey Swan Live! conversation with Mark Jeftovic this morning was epic. He took us behind the scenes of the film session he did last week at our studios in Florida. We touched briefly on the Fed’s gold revaluation paper — what it means, what it signals, and how to position ahead of the curve.
But mainly in the context of “The Quickening” — the rapid pace at which change in technology is itself accelerating. And “the most terrifying bull market in history” in which we applied the economist Ludwig von Mises’ concept of the “crack-up boom” — or Katastrophenhausse (catastropic boom!) in German — today’s retail frenzy in AI stocks and the most highly concentrated capital in so few stocks on the S&P 500 the world has ever seen.
Mark reviewed the research reports that paid members of the Grey Swan Investment Fraternity will receive midweek next week as soon as Andrew affixes his seal of approval to them.
If you’re not a paying member of the fraternity, this one episode of Grey Swan Live! is well worth the “dues,” even if all you do is rebalance your portfolio according to Mark’s assessment of today’s market.
We’ll post the replay of this morning’s recording to the archives on the Grey Swan Investment Fraternity website as soon as it’s ready.
Your thoughts? Please send them here: addison@greyswanfraternity.com
