The safest asset in the world may no longer be the asset central banks trust most. In this video, Taylor breaks down the dollar’s growing gold problem — and why this may be one of the clearest warnings yet that the monetary system is changing. Questions on Protecting Your Wealth with Gold &amp; Silver? Schedule a Strategy Call Here ➡️ https://calendly.com/itmtrading/podcast or Call 866-349-3310 👋 STAY IN TOUCH WITH US ⬇️ 🟩 Schedule a Strategy Session: 866-349-3310 🟩 Email us at services@itmtrading.com 🟩 Official Homepage http://www.itmtrading.com 🟩 ITM Trading Twitter: https://twitter.com/itmtrading 🟩 Facebook: https://facebook.com/ITMTrading

The Dollar's Gold Problem Just Got Bigger

ITM Trading Podcast

# Full Transcript

**Podcast:** ITM Trading Podcast

## Transcript

For years, we've been told that U.S. Treasuries are the safest asset in the world. After all, they are the foundation of the global monetary system. Which is why what happened this week shouldn't be possible. At least, not according to the rules of the financial system that we've all lived under for the last 80 years. Because the very institutions that are supposed to trust Treasuries the most are choosing something else.

And if you've been following central bank behavior for the last few years, the clues are everywhere. Thousands of tons in physical gold purchases, falling U.S. Treasury demand, and new payment structure that cuts out the dollar completely. But now, this week, the ECB, the European Central Bank, finally confirmed what we've been reporting on for months.

For the first time in 30 years, gold has overtaken U.S. Treasuries as the largest reserve asset. Now, most people will hear this headline and assume it's just a story about gold prices. After all, gold has doubled in the last two years. But the real story is far bigger.

Because you have to ask yourself if the very institutions that are responsible for creating the currency and managing reserves are choosing gold over the asset that the entire current monetary system is based on, what do they know that we don't and what exactly are they preparing for? But to answer this question, we first have to understand why U.S. Treasuries are so dominant and what has changed. See, for the last 80 years, there wasn't a serious alternative.

The modern global financial system was built around the dollar. Countries accumulated dollars through trade, and oil was priced primarily in dollars, which created a self-reinforcing loop. The more the world used dollars, the more treasuries they held, and the more central the dollar became to the system, reinforcing the dollar as the global reserve asset.

And U.S. Treasuries not just as an asset, but as the reserve asset, which is why what's happening today is so unusual. See, on paper, there's no denying that the dollar is still dominant and that U.S. Treasuries are largely considered the largest and most liquid option available. But central banks have continued to choose gold over treasuries. So if U.S. Treasuries are so deeply embedded in the system, what exactly changed?

For years, U.S. Treasuries have been growing less attractive as a reserve asset for a number of reasons. First, being a stealth default. Now, different from an outright default where the U.S. breaks its promise and doesn't repay its debt tomorrow, a stealth default happens when the math no longer makes sense, when the debt is growing faster than the economy and questions start being asked. Say you're an investor and you have U.S. Treasuries that are yielding 2 or 3 percent. That's the interest you're getting.

But as the debt continues to grow and inflation is running at 4 or 5 percent, you might get paid back your...

The Dollar's Gold Problem Just Got Bigger

Transcript

Built for investment professionals

Every day you wait, your competitors are finding
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The Dollar's Gold Problem Just Got Bigger

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.