“The gratification of wealth is not found in mere possession or in lavish expenditure, but in its wise application.”
– Cervantes
December 17, 2025 — JD Vance could be elected president in 2028.
Between now and then, we could see astonishing returns in gold stocks, including this month’s recommendation.
In a moment, I’ll explain how reintroducing gold into the monetary system could rebalance an imbalanced global economy.
But first, let me explain a key to Trump achieving what could effectively be a third term – a legacy.
President Trump can’t run for a third term. Vance, his vice president, will be the closest thing to it.
Vance is already winning new fans by the day. His intellectual rigor, rhetorical skills, and loyalty to Trump are driving up his poll ratings.
But Vance knows voters will expect a strong economy and a revitalized manufacturing sector. There is no time to waste in reforming the global trade and monetary system. In fact, he has known about problems with our monetary system for years.
At a March 2023 Senate hearing with Fed Chairman Jay Powell, then-Senator Vance drew a striking comparison between Appalachia’s coal economy and the U.S. dollar’s reserve currency status.
Vance argued that both function as a “resource curse.”
“My family comes from Appalachia,” Vance began. “One of the things that you hear a lot when you study the regional history of Appalachia is it is often described as possessing a resource curse.”
He explained that while coal wealth enabled consumption, it also fostered “malinvestment,” stifling productivity and innovation.
Vance then applied the same logic to the dollar’s global dominance. “Americans have enjoyed one of the greatest privileges of the international economy for the last nearly eight decades, a strong dollar that acts as the world’s reserve currency.”
A strong dollar has made imports cheaper, but “it does come at a cost to American producers,” he warned. “The reserve currency status is a massive subsidy to American consumers but a massive tax on American producers.”
Surveying a “hollowed-out industrial base,” Vance asked Powell whether the dollar’s dominance has undermined manufacturing, leaving the U.S. ill-equipped for geopolitical challenges.
“We have a lot of financial engineers and a lot of diversity consultants,” he concluded.
“We do not have a lot of people making things.”
Powell looked impressed with Vance’s big-picture question. He responded that currency policy is the Treasury Department’s job. Still, Powell must recognize that Fed policy has a powerful influence on whether the U.S. dollar is strong or weak.
The Fed could weaken the dollar if it ignores its inflation mandate and cuts interest rates while inflation is still above target. Powell is unlikely to do that.
However, consider a scenario in which Powell would rush to cut rates and weaken the dollar:
- U.S. oil production rises. Slashing regulatory burdens and opening up more federal lands to leasing could reduce our oil companies’ production costs. Lower oil prices are one of the most powerful levers to drive inflation lower.
- Elon Musk’s DOGE actions slash wasteful federal spending. Wasteful spending is inflationary. It involves paying people to stay in unproductive jobs. If too many employees are consuming more than they produce, then demand is constantly straining supply, resulting in higher inflation.
- The unemployment rate will rise as the federal workforce shrinks. There is growing evidence that federal workers and contractors are nervous about their future jobs or incomes. This could soon impact the rest of the economy via lower retail sales. If households relying on federal spending start to save more of their monthly income, inflation could fall much faster than expected.
The scenario I just described seems reasonable – even likely to arrive within months. If so, the Fed would cut rates significantly in 2025 on concerns that a recession would tip over into debt deflation.
We have a recipe for a bullish gold environment: An easier Fed, lower Treasury yields, a higher unemployment rate, and a weaker U.S. dollar.
The GDX ETF of gold stocks has blown past the S&P 500 Index, rising 20% thus far in 2025 versus a 1% for the S&P. We expect this outperformance to continue for years. We may even see a mad scramble of inflows into gold funds by mid-2025.
Another Name for A Resource Curse: Dutch Disease
Before this month’s gold recommendation, let’s unpack the “resource curse” mentioned by Vice President Vance.
Since the pandemic stimulus payments and the Biden spending bacchanalia, U.S. consumption growth accelerated above its steady uptrend. This was possible due to multi-trillion-dollar federal deficits. Even worse, DOGE discovered just how reckless and corrupt the money hose from Washington, D.C. has been for years.
This consumption drew products from foreign factories. The money to pay for these products mostly returned to the U.S. It bid up prices in stock and bond markets.
The U.S. net international investment position, now near negative $24 trillion, keeps plumbing new depths. Foreign entities own $24 trillion more of U.S. assets than U.S. entities own abroad. Cumulative trade and budget deficits got us to this point.
As the money from trade and budget deficits is reinvested into U.S. stocks, bonds, and real estate, the dollar’s exchange rate rises, increasing the cost of manufacturing locally.
The U.S. economy has become over-financialized. Financialization encourages bubbles. And bubbles have infected the U.S. with a type of “Dutch disease.”
In 1977, The Economist coined the term Dutch disease to describe the Groningen natural gas field’s impact on the local economy. It put upward pressure on the Netherlands’ pre-euro currency, the guilder.
A discontinued series from the St. Louis Fed shows that it took 3.6 guilders to buy a U.S. dollar in 1971. By 1977, it only took 2.5. That was a 44% appreciation in the guilder in six years, largely because the Dutch enjoyed plentiful gas supplies in an energy-scarce decade. Other parts of the Dutch economy – especially manufacturing – were harmed by the high exchange rate and the rise in local labor and operating costs.
Generally, Dutch disease refers to an economy being over-reliant on a commodity, harming other sectors.
How A Dollar-Centric Monetary System Keeps The Economy Imbalanced
The dollar-centric system and its bubbles may have given the U.S. economy a form of Dutch disease. This system has many rarely debated costs that go along with its benefits.
Deficit spending and stimulus inflated prices for stocks, real estate, and consumer goods. Trillions in savings remain in accounts from stimulus bills.
Without this spending, prices would be lower, a point lost on the Biden administration’s hyper-Keynesian economists, who never met a spending bill they did not cheer.
We can account for these imbalances in our investment decisions. Given the substantial foreign capital inflows of the past, plus President Trump’s desire for a weaker dollar, expect less financialization, fewer bubbles, and a rising role for gold that foreign creditors would applaud.
Best Regards,
Dan Amoss, CFA
Strategic Intelligence & Grey Swan Investment Fraternity
P.S. from Addison: Dan Amoss is a forensic accountant by training and a market bloodhound by temperament. He was early to the tech wreck, earlier still to the decay inside mortgage-backed securities, and famously short Lehman Brothers when that trade paid off 470% overnight on September 15, 2008.
For the past decade, Dan has quietly traded stocks and options alongside another name you may recognize: Jim Rickards.
This Thursday on Grey Swan Live!, Dan joins us to examine the AI boom the way he examines everything else — through financial statements, cash flows, and the uncomfortable details most investors would rather ignore.
We’ll explore where the accounting stress fractures are already forming inside today’s AI darlings, why Dan believes 2026 could prove more treacherous for individual investors than either 2000–01 or 2008–09, and what the trades he’s already placed during this boom suggest about what comes next.
This will not sound like cable television.
It will be dense. It may be unsettling. And it will be coherent — precisely the kind of conversation Grey Swan Live! was built to host.
Join us live this Thursday, December 18, at 2 p.m. ET.
If preserving capital matters to you in 2026, this one is worth your time.
If you have requests for new guests you’d like to see join us for Grey Swan Live!, or have any questions for our guests, send them here.
