THE VON GREYERZ PERSPECTIVE - vongreyerz.substack.com

Silver has risen far less than gold since 1971.

While we saw gold go up by 131x, silver went up more modestly at 55x.

But even with that difference, silver has held its value far better than paper money.

“Paper money has already lost 99% of its value against gold since 1971.”

We can see how fickle paper currencies can be when measured against gold. Their value depends on monetary policy and the amount of money being created, while precious metals can’t simply be printed.

What’s becoming more serious is the continued expansion of the money supply. The monetary system is reaching a point where the destruction of paper money can accelerate.

The $10,000 gold objective comes from comparing global M1 with the world’s official gold holdings and applying a 40% gold backing.

Using roughly 35,000 tons of official gold produces an implied gold price of around $10,000 an ounce.

That gives us the reference for silver. But silver has its own reasons for moving much further:

* Silver has been in deficit for seven or eight years.

* Industrial demand continues to absorb physical supply.

* Physical silver is limited.

* Paper claims on silver far exceed the amount available for delivery.

The gold-silver ratio gives us another way to look at the potential.

The ratio is around 66 today. Its historical average has been around 15, while the natural occurrence of silver relative to gold is about 19 to 1. Silver production is around ten times greater than gold production by weight.

The view here is that silver could eventually reach a ratio of 10.

If gold reaches $10,000, the calculation will be:

$10,000 ÷ 10 = $1,000 silver

The move could take months or much longer. The point is to own silver before the market reaches the levels being discussed, rather than waiting until those levels become obvious to everyone.

The $1,000 silver objective comes from two things coming together: a much higher gold price and a much lower gold-silver ratio.

For anyone looking at silver as a way to protect wealth from the continued destruction of paper money, the opportunity is to own the physical metal before that repricing happens.

KEY INSIGHTS

00:05 – 01:05 | Silver could see a dramatic rise

Paper money is losing purchasing power, while silver could see an even stronger move than gold.

01:06 – 02:24 | Why gold could reach $10,000

The $10,000 gold objective is based on global M1, a 40% gold backing and roughly 35,000 tonnes of official gold.

02:25 – 04:13 | Precious metals for wealth preservation

Gold and silver are presented as protection against inflation and the destruction of paper money.

04:14 – 05:42 | Keep wealth outside the banking system

Physical gold and silver provide direct ownership without relying on banks or conventional financial assets.

06:39 – 08:25 | Silver faces a supply deficit

Industrial demand, years of supply deficits and large outstanding futures positions could support a major move in silver.

08:26 – 09:50 | The case for $1,000 silver

With gold at $10,000 and the gold-silver ratio reaching 10, silver would reach $1,000 per ounce.

The Dutch Central Bank recently transferred 76 tons of gold from New York to London.

At the same time, European politicians are putting pressure on governments and central banks to take gold assets out of New York and bring them back to their respective countries.

The Netherlands has already made the move, while politicians in Italy and Germany are putting pressure on their governments to bring gold back to Italy and Germany.

Germany already took a large amount of gold back from New York in 2013, and there is now more pressure to take further gold back.

The issue goes beyond the location of central bank reserves. It also raises a broader question about what can happen to assets when governments take action during a crisis.

“Remember, the US has a tendency to confiscate or bail in assets and you just take the Russian assets, which were confiscated.”

That is why holding physical gold and silver in the US carries a risk that should not be ignored.

The purpose of physical gold is not simply to own an asset that may rise in value. It is to have wealth that can be accessed when the financial system or geopolitical environment becomes unstable.

If there is a crisis, you need to be able to flee to your gold.

This is where the location of your gold becomes important. It should be stored somewhere that gives you direct access and the ability to move it if circumstances change.

Singapore and Switzerland are among the safest places in the world for storing gold, with Switzerland being the preferred location. Mountain vaults provide secure storage while allowing direct access to the metal.

You should always consider:

* Where your gold and silver are stored

* Whether there is direct access to the metal

* Whether the metal can be moved if conditions change

* The government and jurisdiction under which the assets are held

Your precious metals should be somewhere you can reach it when your family needs it most and not somewhere access could be restricted during a crisis.

Direct access gives you the freedom to move your wealth if circumstances change and another country becomes safer.

KEY INSIGHTS

00:00 – 00:18 | Why the location of your gold matters

Gold should be accessible during a crisis, which makes its storage location important.

00:18 – 01:04 | European countries bring gold back

The Netherlands moved 76 tons of gold from New York to London, while Italy and Germany face pressure to bring more gold home.

01:04 – 01:21 | The risk of confiscation

The confiscation of Russian assets highlights the risks of holding assets in a foreign jurisdiction.

01:21 – 01:34 | Where to store physical gold

Singapore and Switzerland are highlighted as safe locations, with Switzerland as the preferred choice.

01:34 – 01:42 | Direct access to your gold

Gold should be directly accessible and movable if conditions change.

01:42 – 01:57 | Preserving wealth long term

Keeping gold away from government intervention can help protect wealth and provide greater flexibility.

Gold won’t be useful when these conditions are met:

* Currencies are stable

* Inflation is low

* Governments are running budget surpluses

* Borrowing is around 25% to 30% of GDP

* Countries have little debt

Fiat money will be the better choice in that case… but we all know that’s not the world today.

Most countries now have debt above 100% of GDP. Stock markets, bond markets and property have also been supported for years by low interest rates, heavy borrowing and high leverage.

Stocks are now around 250% of GDP, which is an absolute record in the measure used here.

The Buffett Indicator puts the current valuation into a longer historical context. The ratio of total publicly traded stocks to GDP is now around three times its 50-year mean.

That leaves very little room for stocks to absorb a major change in financial conditions.

Corporate and sovereign borrowers are facing the same problem.

“Bonds are a total bubble with borrowers that will never repay their money.”

Global debt is estimated at around $370 trillion, before derivatives and the shadow banking system are taken into account. The derivatives market is estimated at around $2 quadrillion.

The same forces have pushed property prices higher. Low rates, high borrowing and leverage have inflated property markets, leaving them vulnerable when financial conditions change.

The 10-year U.S. Treasury yield also shows how the long period of falling yields came to an end in 2020.

This matters because the period of easy money that supported stocks, bonds and property cannot simply continue indefinitely.

The question then becomes “What happens when those markets fall?”

Since 1971, when Nixon closed the gold window, gold has risen from $35 an ounce to around $4,470 in the figures used here. That is 127 times higher. Over the same period, the Dow has risen 57 times, before dividends.

The Dow-to-gold ratio gives a different picture of the stock market than the dollar price alone.

If conventional assets fall substantially against gold, the ratio could move back toward levels seen in earlier periods. The chart points to a potential return toward 1:1.

Gold itself has also gone through corrections. The recent correction is viewed as having ended, with the chart pointing toward much higher potential prices from here.

The point is not that gold will simply rise because its dollar price is going up.

If the dollar and other currencies lose purchasing power, the dollar price of gold can rise dramatically while the actual purchasing power of gold remains much more stable.

That is why giving one precise long-term dollar target for gold misses the main issue.

“It’s no use giving a dollar price for gold when the dollar is going down by the day.”

The same argument applies to silver. Gold has risen 131 times since 1971, while silver has risen only 55 times in the figures shown below. That leaves a large difference between the two metals.

Silver is expected to move faster than gold if the monetary and inflationary conditions described here develop.

The conclusion is therefore quite simple.

Gold is not needed when currencies are sound, inflation is contained, and governments have their finances under control.

But waiting for those conditions before owning gold could mean waiting for a world that is unlikely to return soon.

The purpose of physical gold and silver is to preserve purchasing power when the financial system is under strain. That is why they remain relevant when stocks, bonds, property, and currencies are all exposed to the same debt problem.

KEY INSIGHTS

00:00 – 01:26 | Stocks and bonds face a reckoning

Stocks at 250% of GDP and heavily indebted bond markets are seen as highly vulnerable.

01:27 – 02:14 | Property joins the list of risks

Low rates, borrowing and leverage have pushed property prices higher, with major declines expected against gold.

02:15 – 03:01 | Gold outperforms over the long term

Gold has risen 127 times since 1971, compared with 57 times for the Dow before dividends.

03:09 – 04:31 | Wars threaten energy and markets

The conflicts in Ukraine and the Middle East could keep energy prices high and put further pressure on the global economy.

04:32 – 05:35 | Gold and silver for wealth preservation

Physical gold and silver are presented as the preferred assets during an inflationary period with high debt and interest rates.

05:36 – 06:44 | Gold protects purchasing power

Gold’s rising dollar price reflects currency weakness, while its real purchasing power has remained stable over long periods.

06:45 – 08:45 | When should you not own gold?

Gold is unnecessary when currencies are stable, inflation is low, and government finances are sound. Those conditions are unlikely in the coming years.

Crude oil is around $100 a barrel today.

If the Strait of Hormuz remains closed to most shipping and the routes into and out of the Red Sea remain restricted, crude could be closer to $200 by the end of next year.

But the real impact will be on product prices.

Gasoline could rise above $7 a gallon and diesel above $9.

That would have serious consequences for the U.S. economy, particularly with more than $100 trillion of debt and a financial system that is already highly leveraged.

The first stage could be a correction in the S&P 500.

A 6% to 8% correction is expected before the traditional year-end rally, which could take the index toward 8,500.

But with recession and some of the excesses in the financial system exposed, the S&P 500 could fall toward 5,000. Base-metal prices would also decline.

That would put the U.S. economy into recession next year.

The next phase could be even more difficult.

The expectation is that the Federal Reserve will begin stimulating more aggressively in the fourth quarter of 2027. That would mark the beginning of a strong inflationary period extending into 2030–2032.

During those years, equity and base-metal prices could rise sharply. The S&P 500 could reach more than 10,000, while copper could reach $28,000.

But those figures need to be measured against the dollar.

If the DXY falls by half, an S&P 500 above 10,000 or copper at $28,000 would represent much less in 2026 dollars.

This is one reason physical gold becomes so important in the outlook.

The recommendation is to use stock-market rallies to reduce equity exposure and buy physical gold held outside the banking system.

“On every rally in the stock market, it will be prudent to liquidate and to buy physical gold.”

The period after 2030 could then bring a major crash in asset values. A monetary reset is expected during this phase, potentially involving a cryptocurrency linked to U.S. government debt.

China is moving in a different direction.

Its RMB and gold trading facilities in Hong Kong have been expanding. The expectation is that China could announce a currency backed by the gold held by its citizens and government, potentially as early as 2028.

The estimates presented put Chinese private gold holdings at around 25,000 to 27,000 tonnes, with government holdings potentially adding another 25,000 tonnes.

This leaves two very different monetary possibilities:

* A currency backed by government debt

* A currency backed by gold

For investors, the issue is ultimately purchasing power.

If oil rises toward $200, inflation accelerates, the dollar loses half its value, and financial markets eventually suffer a major correction, nominal prices will tell only part of the story.

Physical gold provides a way to hold wealth without depending on the continued strength of the dollar or the banking system.

KEY INSIGHTS

00:17 – 01:27 | Oil could reach $200 a barrel

Restricted shipping through Hormuz and the Red Sea could push crude toward $200, gasoline above $7, and diesel above $9.

01:28 – 02:56 | Recession could hit in 2027

The S&P 500 could rally toward 8,500 before falling toward 5,000 as recession exposes financial excesses.

02:57 – 03:52 | Inflation returns through 2030–2032

Fed stimulus could trigger a strong inflationary period that continues into 2030–2032.

03:53 – 04:31 | The dollar could lose half its value

The DXY could fall by 50%, changing the real value of rising equity and commodity prices.

04:32 – 05:18 | A major asset crash could follow

The period after 2030 could bring a major decline in asset values and a new monetary reset.

05:19 – 06:11 | China prepares for a gold-backed yuan

China is expanding its RMB and gold trading facilities in Hong Kong and could move toward a gold-backed currency.

06:12 – 06:35 | Physical gold becomes the protection

Physical gold held outside the banking system is presented as protection against a major decline in asset values and currency weakness.

More than a century ago, J.P. Morgan said:

“Gold is money and all else is credit.”

The dollar was once defined by the amount of gold behind it. In 1879, $1 represented 23.22 grains of gold. After the gold price was fixed at $35 an ounce in 1934, that fell to 13.714 grains.

And today? The equivalent is around 0.11 of a grain.

The pressure on currencies is now showing up elsewhere, too. Japan is a good example.

Japan depends on oil and LNG from the Gulf. Shipments from America’s strategic petroleum reserves have helped replace part of that supply, particularly for it. But those reserves are now being depleted.

Thus, Japan is facing three pressures at the same time:

* Higher energy costs

* Rising bond yields

* An enormous debt burden

The situation brings back memories of the 1970s. During the 1973–74 oil crisis, Japanese consumer price inflation eventually reached between 25% and 30%.

It has also been a major source of capital for the U.S. and other G7 economies, including the U.S. Treasury market.

If Japanese institutions begin selling foreign assets to meet funding needs at home, those investment flows could start moving in the opposite direction.

That would put more pressure on bond markets.

The 10-year U.S. Treasury yield is already moving higher after breaking out of its previous range.

Higher oil prices could add to that pressure. More expensive energy would feed into consumer prices, while higher inflation would make it harder for bond yields to come down.

And this is where the argument returns to gold.

China has spent decades preparing for a world in which the dollar plays a smaller role.

Since 1971, it has steadily built up its gold holdings, while recent measures have strengthened the connection between the Hong Kong gold market and the Shanghai Gold Exchange.

The free movement of gold between mainland China and Hong Kong would be important if China were to move toward a yuan backed by gold.

Russia could potentially take a similar path. But the G7 has far less room to return to a gold standard because doing so would require major cuts in government spending at a time when their economies are already under pressure.

That leaves the United States with two choices:

Protect the dollar and let the economy suffer OR protect the economy and let the dollar weaken.

Neither choice comes without consequences, and this brings us back to J.P. Morgan’s point.

When currencies are built on expanding credit, their value depends on confidence in the system behind them. Gold does not carry that same dependency.

KEY INSIGHTS

00:00 – 01:09 | Gold reveals the dollar’s long decline

The dollar’s gold equivalent has fallen from 23.22 grains in 1879 to around 0.11 grains today.

01:09 – 03:03 | Japan faces a new oil crisis

Depleting U.S. strategic petroleum reserves could leave Japan facing higher oil costs, a weaker currency, and rising bond yields.

03:03 – 04:18 | Japan’s debt problem could spread

Rising funding costs may force Japan to reduce its overseas investments, with potential consequences for U.S. Treasuries and other G7 bond markets.

04:19 – 05:19 | Oil could push inflation higher

Higher energy prices could feed into consumer inflation and put further pressure on bond yields.

05:19 – 06:41 | China is moving closer to gold

China is strengthening the connection between its Hong Kong and Shanghai gold markets as it prepares for a world where the yuan plays a larger role.

06:41 – 07:46 | Why the G7 cannot simply return to gold

A return to a gold standard would require major cuts in government spending at a time when economic weakness could demand more stimulus.

07:46 – 08:21 | America’s two choices

The U.S. can protect the dollar and risk the economy, or support the economy and accept further weakness in the currency.

Political and military conflicts often appear to be local events.

A ceasefire is announced → Negotiations resume → Markets react → Attention moves elsewhere.

But some conflicts have consequences that reach well beyond the battlefield. Iran War is one of them.

Rather than viewing it as an isolated dispute, it is placed within a much larger change taking place in international politics. China, Russia and several other countries are increasingly challenging a world order that has long been led by the United States.

Napoleon is often credited with saying, “Let China sleep; when she wakes, she will shake the world.” Whether or not he ever said those words, China’s growing influence has become one of the defining developments of this century.

Within that framework, the conflict involving Iran takes on greater significance.

Iran occupies a strategic position at the entrance to the Strait of Hormuz, one of the world’s busiest energy corridors. Much of the oil exported from the Gulf passes through this narrow waterway before continuing toward Europe and Asia.

The Strait of Hormuz is only one link in the chain. Oil leaving the Gulf also passes through the Bab al-Mandab Strait before reaching the Suez Canal and international markets.

Control over these routes has consequences far beyond the Middle East. Any prolonged disruption would affect energy supplies, transportation costs and industrial production, eventually feeding through to the global economy.

The outlook assumes that the conflict is far from settled.

Negotiations have continued, but there are doubts that Washington will accept the conditions outlined in the proposed Memorandum of Understanding. In this framework, the current pause is viewed as temporary rather than permanent.

That matters because prolonged conflict comes at a cost for both sides.

For the United States, one concern is the growing strain on military resources. The war has required substantial use of missiles and drones at a time when replenishing those inventories is becoming more difficult.

The pressure is not limited to defence.

Many American refineries were built to process sour crude oil from the Gulf. If emergency supplies continue to decline, the concern is not simply higher oil prices but tighter supplies of the products refined from that crude.

Diesel, jet fuel, gasoline and fertilisers all depend on those supply chains.

Recent price movements illustrate how quickly those pressures can appear. Sulphur, an important ingredient in fertilizer production, has risen sharply. European natural gas prices, heating oil and U.S. diesel have also moved higher since the conflict intensified.

The quoted price of a barrel of oil tells only part of the story. What matters just as much are the products inside that barrel and how disruptions work their way through the wider economy.

Higher energy costs would arrive at a time when the global financial system is already carrying record levels of debt.

That combination sits at the centre of the outlook.

Global debt reached approximately $368 trillion last year, covering governments, households, corporations and financial institutions. According to the figures presented, the United States accounted for around $104 trillion of that total.

The figures also point to a growing dependence on debt.

For every dollar of economic growth generated in the United States, around $4.50 of additional debt was required. For the rest of the world, the ratio was considerably lower.

Debt alone is not the concern.

Attention is also drawn to the growing use of leverage throughout the financial system. Credit spreads remain close to cycle lows, consumer loans continue to be packaged into securities, and private credit has expanded rapidly over recent years.

The comparison is not exact, but the parallels with 2008 are difficult to ignore.

Then, highly rated securities concealed risks that many investors failed to recognize until markets began to unwind. The concern today is that leverage has once again become deeply embedded throughout the financial system.

Whether those vulnerabilities result in a crisis cannot be known in advance.

The expectation presented here is that 2027 will bring recessionary conditions, prompting another round of monetary and fiscal stimulus to support economic activity.

The comparison is drawn with the years between 1978 and 1982, when inflation accelerated alongside rising interest rates. This time, monetary policy, higher energy costs and rising food prices are expected to reinforce one another, placing additional pressure on governments, businesses and consumers.

At the same time, the U.S. dollar could weaken if confidence in the existing monetary system continues to erode.

These conditions also raise questions about what comes next.

The United States may seek to strengthen its financial system through stablecoins or another digital currency linked to government debt.

China, meanwhile, continues to expand its gold and yuan infrastructure, reinforcing the role that gold could play within the international monetary system.

This brings us to gold.

THE REFUGE THAT GOLD PROVIDES

Periods like these have historically increased the importance of liquidity, purchasing power and financial security.

Within this outlook, physical gold is valued for the liquidity it can provide when needed… and for its ability to preserve purchasing power through periods of inflation and monetary instability.

Wars and financial turmoils can’t always be avoided. Preparing for them begins with holding real wealth.

KEY INSIGHTS

00:00 – 01:35 | The world order is changing

The conflict involving Iran is presented as part of a broader shift from a U.S.-led world toward a multipolar system shaped by China, Russia and other nations.

01:36 – 04:05 | Why the Strait of Hormuz matters

Control of key shipping routes could influence global oil flows, regional security and the balance of power in the Middle East.

04:06 – 06:07 | The hidden cost of the oil conflict

The greater risk may lie inside the barrel, as shortages and rising prices for refined products work their way through the global economy.

06:08 – 08:10 | A financial system built on debt

Record debt levels, growing leverage and similarities to 2008 raise questions about how resilient today’s financial system really is.

08:11 – 09:58 | Inflation and the next monetary reset

Higher energy and food prices, rising inflation and competing monetary systems could define the years ahead.

09:59 – 10:35 | Gold remains the refuge

Physical gold is presented as protection against inflation, currency weakness and financial instability.

Silver has fallen almost 50% from its historic high of $121.62 an ounce, reached in January 2026.

For many investors, that looks like the end of the rally. But corrections like this have always been part of silver’s story.

Truth is:

Silver has never moved a straight line.

Its biggest advances have almost always been interrupted by sharp corrections.

But what makes this correction different?

One measure receives particular attention: the gold-to-silver ratio. It compares the price of gold with the price of silver. When the ratio falls, that means silver is outperforming gold.

The challenge is that most investors react to price. As the saying goes,

“The majority of people love buying high and selling low.”

Assets that have fallen out of favour attract little interest, while those making headlines quickly capture everyone’s attention.

We can see that pattern in the way many people look at gold. Its performance is often judged by starting the chart in 1980, when it reached $850 an ounce, while overlooking its rise from just $35 in 1971.

Silver deserves the same perspective. Despite this year’s correction, it has still more than doubled over the past few years. Looking only at the recent pullback overlooks the much larger move that came before it.

That becomes even more relevant today.

Stocks remain near record highs. Bonds continue to struggle with inflation. Governments around the world are carrying debts that become harder to repay every year.

At the same time, central banks continue to accumulate gold, and major financial institutions are recommending much larger allocations than they were only a few years ago.

Even JPMorgan CEO Jamie Dimon has warned investors to “brace yourself” for an economic hurricane.

So, “What should investors do with the rest of their portfolio?”

Gold should still make up the majority of a precious metals holding. But with the correction reaching over 50%, silver now deserves a larger allocation than before. That’s why Egon’s advice is to buy silver with both hands.

The path is unlikely to be smooth. But if the longer-term trend unfolds as expected, today’s prices may eventually look very different.

KEY INSIGHTS

00:00 – 01:18 | Silver’s correction creates opportunity

The recent pullback has strengthened the long-term case for silver despite its well-known volatility.

01:19 – 01:57 | Silver could outperform gold

A falling gold-to-silver ratio could allow silver to rise two to three times faster than gold.

01:58 – 03:46 | Most investors buy at the wrong time

Investors often ignore precious metals when prices are low and become interested only after strong rallies.

03:47 – 04:19 | Silver’s long-term case remains intact

Investment demand, industrial demand, and market fundamentals continue to support silver.

04:20 – 05:50 | Where else can investors turn?

Growing risks in stocks, bonds, debt, and paper currencies are strengthening the case for precious metals.

05:51 – 06:34 | Gold and silver protect wealth

Physical precious metals are presented as a way to preserve purchasing power through monetary uncertainty.

06:35 – 07:32 | Gold first, silver second

Gold remains the core holding, while silver offers greater upside for investors who can tolerate its volatility.

“Every single money or currency has gone to zero in history.”

The current monetary system is heading toward the same fate.

Since the U.S. ended the dollar’s link to gold in 1971, currencies have already lost about 99% of their value against gold. The remaining decline could happen much faster than the first 99%.

Governments usually describe inflation as rising prices. But that’s the wrong way to explain it.

Inflation begins when governments borrow beyond their means, run persistent deficits, and create more money. As each unit of currency loses purchasing power, it takes more of it to buy the same goods and services.

During the 1970s, the United Kingdom experienced several years of double-digit inflation.

Between 1974 and 1979, inflation averaged 15.7% a year and reached 24.2% in 1975. It was a clear example of how quickly purchasing power can erode once governments lose control of their finances.

The same pattern has appeared repeatedly over the centuries.

One of the earliest examples was the Roman denarius.

Around 180 AD, the coin contained almost 100% silver. By about 280 AD, its silver content had fallen to almost nothing. The denarius was no longer a silver coin but one made largely from base metals.

It later happened in France during the early 1700s, in the Weimar Republic in the 1920s, in Zimbabwe, and in Yugoslavia.

The effect becomes clearer when wealth is measured in gold rather than paper currency.

A typical house in the United States cost about $6,700 in 1926, when gold traded at just over $20 an ounce. That worked out to 327 ounces of gold.

A hundred years later, a similar house costs about $514,000. In dollar terms, the price has increased sharply. In gold, however, it has fallen to about 126 ounces.

The same comparison can be made with a cow.

Looking back about 5,000 years, the amount of gold needed to buy one has generally remained between half an ounce and one ounce. Unlike paper currencies, cows cannot be manufactured. They take time to raise and represent a tangible asset.

That is why measuring wealth in currencies that lose purchasing power can give a very different picture from measuring it in gold.

“We’re going to have two devastating events hitting us in the next few years. They have already started.”

The first to get hit is the purchasing power of paper currencies.

Next are financial assets. According to Egon, decades of debt expansion and money creation have inflated stocks, bonds, and property.

One measure of those valuations is the Buffett Indicator, which compares the value of the stock market with the size of the economy.

Today, the U.S. stock market is valued at more than twice the country’s annual GDP. According to the transcript, that level is unlikely to be sustained for very long.

Another way to view the market is by measuring stocks against gold.

In 1980, the Dow Jones Index and the gold price were both around 850, giving a ratio of one to one. By 2000, that ratio had climbed to about 45 as stocks outperformed gold over the previous two decades.

Since then, gold has outperformed the Dow, bringing the ratio down to around 12 today.

If the ratio returned to one, both the Dow Jones Index and the gold price could stand at 10,000. That would represent a decline of more than 90% in the Dow when measured against gold.

Large losses become much harder to recover from.

A portfolio that loses 90% of its value requires a 900% gain simply to return to where it started. After the decline between 1929 and 1932, the Dow Jones took twenty-five years to recover its previous peak.

Neither trend guarantees a particular outcome.

But if both continue to unfold, preserving purchasing power may become increasingly important in the years ahead.

Gold and silver have been the exceptions because they cannot be printed or manufactured. For that reason, they remain central to any discussion about long-term wealth preservation.

KEY INSIGHTS

00:00 – 02:25 | Why currencies eventually lose purchasing power

Why every paper currency has eventually failed, the end of the gold standard in 1971, and why inflation begins with the decline in the value of money.

02:26 – 03:21 | The long history of currency debasement

How the Roman denarius, together with examples from France, Weimar Germany, Zimbabwe and Yugoslavia, illustrates the recurring consequences of excessive debt and money creation.

03:22 – 06:28 | Measuring wealth in gold instead of paper currency

Why houses, currencies and even cattle tell a different story when wealth is measured in gold rather than paper money.

06:29 – 08:08 | Two disasters already underway

How continued currency debasement and decades of money creation have led to rising inflation and an asset bubble across stocks, bonds and property.

08:09 – 10:55 | Measuring stocks against gold

How the Buffett Indicator and the Dow-to-Gold Ratio suggest that U.S. equities have become historically expensive relative to gold, and why the ratio could continue falling.

10:56 – 13:15 | Wealth preservation in an era of declining purchasing power

Why recovering from large investment losses can take decades, and why the discussion concludes by focusing on preserving wealth through gold and silver.

Gold has risen strongly over the past few years while technology stocks have captured most of investors’ attention.

At a glance, it appears that stocks have created the real wealth, while gold has simply kept pace with inflation.

Matthew Piepenburg argues that this conclusion depends on how wealth is measured.

Since the fourth quarter of 2021, the S&P 500 has gained roughly 60% when measured in U.S. dollars. Measure the same index in gold, however, and it has lost around 40%.

The result changes because the value of the dollar has changed. If the currency used to measure financial assets steadily loses purchasing power, returns expressed in that currency can tell a very different story from returns measured in gold.

The same question extends beyond stock markets. It also appears in the way central banks manage their reserves.

For decades, U.S. Treasuries served as the world’s primary reserve asset and the preferred form of collateral across the financial system.

Since 2014, central banks have steadily reduced their holdings of U.S. Treasuries while increasing their purchases of physical gold. The freezing of Russian reserves in 2022 accelerated that trend.

Many still hold substantial dollar reserves, but they are adding gold at a much faster pace than before.

Annual central bank buying now stands several times higher than it did before 2022, with countries such as China, Poland and Kazakhstan continuing to add to their reserves.

At the same time, foreign ownership of U.S. government debt has continued to fall.

Debt remains at the center of the story.

Global debt has continued to rise while interest rates remain far higher than they were for most of the past decade. Financing that debt has become increasingly expensive, placing growing pressure on public finances.

History suggests that governments carrying debt on this scale rarely rely on austerity or widespread defaults. More often, they respond with monetary expansion, allowing currencies to lose purchasing power over time.

That is the environment in which gold continues to attract long-term demand.

Unlike government debt, gold is no one's liability. It cannot be created through monetary policy and has served as trusted collateral across centuries of monetary change.

Short-term price movements will always attract attention, but the broader question remains the same: “As debt continues to grow, what happens to the purchasing power of the currencies used to service it?”

KEY INSIGHTS

00:00 – 03:19 | Looking beyond the gold price

Gold’s recent correction, long-term performance, and why measuring returns in gold can tell a different story than measuring them in dollars.

03:20 – 05:35 | Gold replaces paper collateral

The steady rise in central bank gold purchases and the declining role of U.S. Treasuries in global reserves.

05:36 – 06:57 | Debt changes the outlook for gold

Record government debt, the limits of higher interest rates, and the long-term effect of currency debasement.

06:58 – 08:59 | Gold’s place in the monetary system

Gold’s role as a store of purchasing power while debt and money creation continue to expand.

09:00 – 10:29 | Measuring wealth in real terms

Why gold offers a different perspective on wealth than paper currencies during periods of monetary change.

For most investors, a 25% correction in the gold price is unsettling. It’s well beyond what many would consider a normal pullback, and enough to make some wonder whether the bull market has already run its course.

But gold has never moved in a straight line. Every major bull market has included periods where prices fell sharply before recovering.

Gold rose 65% during 2025, one of its strongest annual performances in decades. Over the past five years, it has gained 128%.

Seen in that context, the recent decline looks very different.

History points in the same direction.

During the inflationary bull market of the 1970s, gold experienced five corrections of more than 20%. Between 1974 and 1976, the price fell by roughly half before going on to rise sevenfold into its 1980 peak.

Those corrections were part of the bull market, not the end of it.

Short-term price movements often reflect changing expectations around interest rates and the U.S. dollar. The recent correction has coincided with a stronger dollar and higher real interest rates, both of which have historically weighed on gold prices.

Periods of higher real rates have also appeared near major peaks in equity markets. In 2000, rising real rates coincided with the collapse of the technology bubble.

Today’s stock market is again heavily concentrated in a small number of companies, raising questions about how long current valuations can be sustained.

Meanwhile, central banks continue adding gold to their reserves.

Although a handful of countries reportedly sold gold during the Iran conflict to raise liquidity, overall central bank demand remains intact. Gold holdings now exceed their holdings of U.S. Treasuries.

The broader backdrop has changed very little.

Government debt continues to grow, inflation remains persistent, and highly indebted governments have limited room to tolerate higher borrowing costs.

One way to view that imbalance is through the relationship between U.S. gold reserves and government debt.

During the Second World War, the value of U.S. gold reserves represented about 51% of the federal debt. By 1980, that figure had fallen to around 18%.

Today, it is approximately 2.8%.

If gold represented the same share of federal debt that it did in 1980, the implied price would be roughly $26,000 per ounce. Matching the Second World War level would imply around $75,000 per ounce.

The purpose of the comparison is not to predict a future gold price.

It illustrates how rapidly debt has expanded relative to the nation’s gold reserves.

The same pattern appears when comparing gold with global equity markets.

The value of all above-ground gold currently represents about 18% of the total global stock market capitalization.

Over the past 120 years, that figure has averaged closer to 40%.

Returning to that long-term average would imply a substantially higher gold price than today’s level.

Corrections are part of every long-term bull market.

What tends to matter more is whether the forces behind that market have changed.

Debt levels continue to rise across the world’s largest economies. Inflation has proven difficult to bring back to target, and governments carrying record debt burdens have limited options if borrowing costs remain elevated.

History shows that heavily indebted governments eventually choose lower interest rates and more money creation over allowing debt servicing costs to spiral higher.

That process may support asset prices in nominal terms, but it comes at the expense of the purchasing power of paper currencies.

The recent correction has changed the price of gold.

It has done little to change the conditions that have supported it for years.

KEY INSIGHTS

00:00 – 01:31 | Putting the 25% correction into perspective

Gold’s recent pullback, long-term performance, and how previous bull markets have experienced similar corrections.

01:32 – 02:38 | Why gold corrected

A stronger dollar, higher real interest rates, stock market concentration, and continued central bank buying.

02:39 – 04:20 | Gold versus government debt

How U.S. gold reserves compare with federal debt and what previous levels of debt backing imply.

04:21 – 05:06 | Gold versus global stock markets

Gold’s share of global equity market value compared with its long-term historical average.

05:07 – 05:37 | Corrections within secular bull markets

Historical drawdowns during the 1970s and why they did not end the long-term uptrend.

05:38 – 06:23 | Debt, money printing, and fiat currencies

Why heavily indebted governments resort to monetary expansion and what that means for paper currencies.