Why Washington May Actually Want Gold at $20,000 | Matthew Piepenburg

Why Washington May Actually Want Gold at $20,000 | Matthew Piepenburg

The United States carries roughly 8,131 tons of gold on its books at $42.22 an ounce — a 1973 price. On the federal balance sheet, the entire national hoard is worth about $11 billion. Matthew Piepenburg of Von Greyerz argues that accounting line is about to be revisited, and not for ideological reasons. The arithmetic no longer works: • Debt to GDP at 120%, current account deficit at 6-7% • Social security, Medicare, veteran benefits and interest now consume 105% of tax receipts — with equity markets at record highs • Growth near 4%. Expenses at 7% • $1.4 trillion of Treasury auctions scheduled over the next six months, with no automatic bid behind them • The 10-year yield moved from 3.9% to 4.7% in two months; the 30-year is at its highest since the global financial crisis Treasury Secretary Scott Bessent has said the quiet part twice. In 2023, before taking office, he called continued sanctioning untenable and the dedollarisation problem undeniable. Asked this week why he would not sanction Iran outright, his answer was that he did not want to blow up the global financial system. For anyone holding a portfolio, the more useful measurement is what these years have actually returned. Priced in gold rather than dollars: • Long-dated Treasuries bought 12-15 years ago: down roughly 90% • Nasdaq 100: up 95% over five years, down 23-25% in gold • S&P 500 with dividends reinvested: down ~30% since 2022, ~50% since 2000 • Nikkei: up 150%, down 31% in gold That is the case for a revaluation. Marking the national gold position to market moves something over $1 trillion into the Treasury General Account under the Federal Reserve’s own accounting rules. At $15,000, $17,000 or $20,000 an ounce the figure passes $5 trillion — enough to monetise the long end of the curve. Piepenburg’s conclusion is that letting gold run is now in the United States’ own interest. The cost falls elsewhere. A gold price allowed to run is a dollar allowed to fall. An overnight revaluation to $20,000 would take roughly 80% off the currency, which is why he expects a slow drift rather than a single announcement. On silver: $50 is well behind the market, and Piepenburg treats the $110 highs as a future floor rather than a peak — a supply deficit above one billion ounces now running into its fifth year, and the January intervention read as a bailout of banks caught short rather than a verdict on the metal. On allocation, his reference is the Swiss standard: a minimum of 20% in physical metal, split roughly 80/20 between gold and silver. Morgan Stanley now carries a 20% figure of its own. Five years ago that number was unpublishable.