Beneath the Surface
Frank Holmes: What Gold Reveals About America’s Affordability Crisis
December 15, 2025 • 4 minute, 50 second read
“Gold is the single best asset to protect against monetary and other forms of instability.”
– Adrian Day
December 15, 2025 — A generation ago, a single income could support a family, buy a house and pay for a vehicle or two in the driveway.
Today, even two high earners are struggling to purchase a new home.
According to a recent report from Bankrate, a household earning $80,000 a year is now priced out of 75% of all new homes on the market. A family now needs to earn at least $113,000, and in some major metros, it’s closer to $200,000.
Meanwhile, the homeownership rate has slipped to a six-year low, with further declines expected next year. Families are being squeezed from every angle.
The point I want to make here is that the so-called affordability crisis isn’t just about the cost of homes or other assets. It’s about the cost of money.
The Dollar Has Been in a Century-Long Bear Market
Take a look at the chart below. It compares the purchasing power of the U.S. dollar since 1915 to the price of gold over the same period.
What it shows is that the greenback has lost over 95% of its purchasing power. Gold, by contrast, has exploded, especially during periods of fiscal and economic strain.
Politicians and pundits may blame greedy corporations or inefficient supply chains, but here’s the truth: when a government runs endless deficits and finances them with fiat created out of thin air, the currency itself becomes the source of the problem.
We can trace it all back to 1971 when President Nixon suspended the dollar’s convertibility into gold. As I shared with you before, that was the day the U.S. traded fiscal discipline for a floating exchange rate.
Once the tether to gold was severed, spending exploded. Government debt soared from less than 40% of GDP to well over 120% today.
In short, when money becomes untethered from reality, everything priced in dollars becomes harder to afford.
That takes us back to housing.
U.S. Housing Looks Historically Cheap… When Priced in Gold
The next chart might surprise you. It shows the ratio of the price of a median new home divided by the price of gold. Essentially, it tells you how many ounces of the precious metal it takes to buy a typical American home.
We all know that, in dollar terms, housing is expensive right now. According to the Census Bureau, the median price for a new home in August was $413,500, a nearly 5% jump from the price in July. Remember, that’s the median price, meaning half of all available homes for sale are even more expensive.
But the chart shows housing priced not in dollars but in gold, and you’ll notice three instances when the median home cost roughly 100 ounces: 1980, 2011 and 2025.
This tells me the affordability crisis isn’t necessarily being driven by runaway home prices, but by the continued weakening of the dollar as well as the cost of borrowing.
Examining housing through a gold lens exposes what the consumer price index (CPI) and political messaging hide—namely, the real culprit is the currency.
That’s why I, along with many others, consider gold to be real money. It doesn’t lie, and it doesn’t get revised by government bureaucrats. It doesn’t depend on congressional budget committees or Federal Reserve projections.
Think about that next time you hear about a housing bubble. The real bubble may be the debt-fueled system we’re using to measure value.
The Fiat Era Has Failed to Deliver Price Stability
This isn’t just an American problem, of course.
The chart below, taken from a Deutsche Bank report, shows average annual inflation for 152 countries since 1971. Not one major economy has kept inflation below 2% over the past half-century. Most countries have averaged between 4% and 10%, but some—Argentina, Brazil, Turkey—have suffered a “near-total currency collapse,” according to Coin Bureau.
This is what happens when the world shifts from gold-backed money to political money.
What Gold Is Telling Us Right Now
Once again, gold is real money, whereas fiat is temporary. In an era of record national debt, rising inflation and geopolitical uncertainty, I believe it’s prudent and rational to follow the Golden Rule: a 10% weighting in gold—half in bullion, half in high-quality gold mining stocks—rebalanced annually.
This simple strategy has helped preserve wealth across every monetary regime in history, from the Roman Empire to Bretton Woods.
President Donald Trump calls the affordability crisis a hoax. In truth, the lack of affordability is real for many families right now, but the cause isn’t homebuilders or landlords or banks. The cause is the steady erosion of fiat’s purchasing power. Gold is simply the mirror reflecting the truth.
Regards,
Frank Holmes
U.S. Global Investors & Grey Swan Investment Fraternity
P.S. from Addison: The gold bull market has as much room to run in 2026 as “affordability” has legs in politics and the AI narrative on Wall Street. The metal is up 60% year-to-date in 2025. We’re expecting a lot more to come in 2026.
On Thursday, we’ll be joined on Grey Swan Live! by our long-time friend and forensic accountant, Dan Amoss — one of the few who saw both the tech bust and the mortgage crisis early and played them in the market successfully.
Dan’s going to walk us through why 2026 could challenge investors even more than 2000–01 or 2008–09, and how to think clearly when denial is the consensus. Look for more details tomorrow. As well as a few essays this week that’ll help get us prepared for the conversation with Dan on Thursday.
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.
