Why Gold has been allowed to run (incentive-based analysis)
Gold can satisfy the public's "store-of-value" impulse without granting a parallel, censorship-resistant payments rail.
Why Gold has been allowed to run (incentive-based analysis)
As of October 16th 2025, Gold has risen 61.52% YTD and 58.88% on the 1 year.
Gold’s market cap is $29.619T, so it is by far the largest asset by market cap in the world.
Letting gold run while containing Bitcoin fits the State’s incentives.
Gold can satisfy the public’s “store-of-value” impulse without granting a parallel, censorship-resistant payments rail; it trades in surveilled, gate-kept markets (London OTC/COMEX, custodian oligopolies).
Central banks themselves are heavy buyers, and its price can be influenced via regulated derivatives and custody choke-points.
Bitcoin, by contrast, threatens monetary sovereignty if it spreads as money.
Executive Summary
Why gold’s being allowed to run: It absorbs inflation/sovereignty angst into a non-transactional, surveilled hedge. It recapitalizes Central Bank balance sheets optically, broadens collateral in stress, and crowds out Bitcoin self-custody while programmable rails (stablecoins/CBDCs) normalize.
Regime goal: Contain BTC-as-Medium-of-Exchange in a vol-managed corridor; let gold carry the “sound money” banner.
Revaluation hopium: A dramatic $6k–$10k/oz repricing is unlikely absent crisis. It’s mostly accounting optics unless monetized, which is politically charged and inflationary.
Base macro: Financial repression (3–4% headline-style inflation), short shocks, fast patches; no prolonged crisis while consent is scarce.
Trade: Long gold on policy/credit wobble, add when Bitcoin containment tightens and CBDC/stablecoin rails get policy carrots. Keep a Bitcoin self-custody tail hedge for regime breaks.
1) Why Gold Is “Allowed to Run” (Incentive Map)
A. Controlled safety valve (store-of-value without rails)
Satisfies Store-of-Value instincts without enabling parallel payments.
Gold is heavy, slow, taxable, traceable at on/off-ramps; custody concentrated; choke-points abound (COMEX/LBMA, customs, export, windfall tax).
B. Balance-sheet optics (quiet recap)
Higher price lifts revaluation reserves for Central Banks/sovereigns marking to market (ECB-style), without explicit QE headlines.
C. Collateral optionality (plumbing)
With duration supply/term premium wobbles, a firmer gold price broadens “good collateral” narratives in cross-border finance while leaving USD rails central.
D. Narrative management
A rising gold tape lets authorities say: “sound money is tolerated”. Legitimacy bought cheaply while programmable money UX hardens.
E. Diversion/crowding-out vs Bitcoin
Gold soaks hedge demand from retail/institutions who prefer ETF/IRA-friendly exposure over key management. That’s deliberate crowding-out of Bitcoin as Medium of Exchange.
Bottom line: Gold stabilizes optics & balance sheets and siphons dissent — perfect for a regime moving to identity-bound, programmable money.
2) Revaluation: What It Really Does (Numbers & Limits)
US gold (alleged): ~261.5M oz.
Book: $42.22/oz → ~$11B.
Mark-to-$6,000/oz: ~$1.57T; $10,000/oz: ~$2.62T.
Delta is an equity/revaluation reserve — not automatic debt reduction.
Why it’s a limited debt cure
Even $10k/oz (~$2.62T) is <10% of US federal debt (~$38T). Optics improve; liabilities persist.
When it actually moves cash/debt
Monetize the gain:
Sell gold and redeem Treasuries; or
Pledge gold certificates to Fed → Treasury credited → retire debt.
That creates base money unless fully sterilized (Fed sells assets/uses RRP). Otherwise inflationary or forces offsetting tightening.
Politics
Explicit reprice = devaluation signal (winners: gold holders; losers: cash/bond holders). This is used only in crisis to justify a narrative shift.
Conclusion: Revaluation hopium = overstated. Accounting boost ≠ regime fix. Monetization is inflationary/charged; size vs debt stock is small.
3) Why Let Gold Run Now (Timing Fit)
Low Gross Consent Product (consent scarce) → avoid long recessions; prefer short shocks + fast patches.
Programmable rails (stablecoins → CBDCs) need adoption carrots; Bitcoin must be contained (paperization, regulation, Medium-of-Exchange friction).
Gold bull provides a pressure valve and legitimacy theater while the real control stack is built.
4) Signals That Gold’s “Allowed Run” Continues (Buy/Add Triggers)
Bitcoin containment escalates: wallet KYC tightening, pool policy clients, app-store Acceptable Use Policies shifts.
Stablecoin/CBDC carrots: tax credits, cashbacks, benefits via ID-bound wallets.
Collateral stress hints: term premium rising, Treasury shifts issuance to bills vs coupons (duration indigestion).
Policy verb cluster: attest, provenance, revoke, rollback in standards/RFPs (Policy Synchronization Coefficient/Legibility Pressure Index up).
Central Bank reserve behavior: steady net buying; fewer gold-leasing headlines.
Trim/hedge on:
“Gold revaluation” political trial balloons with sterilization promise (buy rumor/sell clarity), or
Aggressive global disinflation + dollar rip + MOVE>120 without crisis narrative (unlikely).
5) Disconfirmers (What Would Break This Thesis)
Coordinated hard ban on private crypto + aggressive gold export controls/windfall taxes (signals broad monetary war; volatility everywhere).
Unambiguous, sustained 2% CPI with rising real rates and clean deficit shrink — low probability in low-consent regime.
Clear Bitcoin-as-Medium of Exchange success with state acquiescence (stablecoin/CBDC pilots fail) → gold loses some crowd-out function (unlikely).
TL;DR
Function: Gold is the authorized safety valve — soaks inflation angst, recaps optics, broadens collateral, and crowds out Bitcoin-Medium-of-Exchange during programmable-money rollout.
Revaluation: Mostly accounting unless monetized (then inflationary). Size vs debt: too small to be a cure.
Macro backdrop: Financial repression (3–4% CPI), short shocks, facility patches; consent too scarce for long austerity.
Signals to buy: Bitcoin containment, CBDC carrots, duration stress, Policy Synchronization Coefficient/Legibility Pressure Index verbs, Central Banks net buying.
Structures: Core gold + call spreads; pair with state-embedded software (PLTR > MSFT > PANW).
Edge: You’re trading revealed preference — valve up, rails normalize, Bitcoin contained — not fairy tales.
My current outlook: PLTR > Bitcoin > Gold > MSFT > PANW.
None of this should be considered investment advice.