Why gold may emerge as reset asset

​The solution, apparently, has to be gold. There might as well be thousands of neon signs lit up all over the world flashing that notion. They’ve been talking about “The Great Monetary Reset” for years. We still don’t know exactly when or how it will happen, but there are indications that it’s getting pressingly close. Just to note one – there’s the increasingly alarming rate at which the debt of the United States (along with that of other major economies) is growing. It’s now ballooning by an additional $1 trillion about every 90 days. And “ballooning” is a good word choice, because that debt balloon, the worldwide credit bubble, appears to be right on the edge of popping.

Another sign that we may be nearing the endgame for fiat currencies is the recent massive reversal in the gold-to-silver price ratio. The ratio, which had reached higher than 100-1 as recently as May of 2025, has dramatically dropped - from close to 90-1 down to around 50-1, in just the past few months.

Jim Rickards, author of Currency Wars: The Making of the Next Global Crisis, noted that the recent extreme volatility in gold and silver prices is indicative of stress in the banking industry and the underlying financial market infrastructure.

The wide disparity between the market price of silver in Shanghai versus the price in London or New York (the per ounce price in the East has recently been running $10-$20 higher than the price in the West) is an unprecedented circumstance. It can easily be interpreted as yet another indication of serious cracks appearing in the foundation of the global fiat currency system.

David Bateman, a tech entrepreneur and investor holding nearly 2% of the world’s annual silver supply, states, “Gold and silver are the only meaningful life raft…The whole world right now is a sophisticated game of musical chairs; the chairs are precious metals.”

I’m not going to guess precisely when “The Great Reset” will occur. Rather, I want to talk about why it appears evident that the reset will, in all probability, involve some sort of return to a gold standard.

The importance of gold

Economist Stephen Leeb chose to resurrect a quote from Warren Buffett’s father, Howard, who strongly believed that, “…if human liberty is to survive in America, we must win the battle to restore honest money. There is no more important challenge facing us…the restoration of your freedom to secure gold in exchange for the fruits of your labors.” And guess what? – The recent major gold investors include none other than Buffett’s Berkshire Hathaway.

Answer this question: If there isn’t going to be a return to a gold standard, then why have the central banks of nations all across the globe become huge gold buyers in just the past 3-4 years? I can’t see any reasonable explanation for that behavior other than, “They know what’s coming” (and believe that what’s coming will profit those with the largest vaults of gold). China, the ultimate play-the-long-game nation, has been amassing gold and silver since before the turn of the century. It’s now buying unrefined silver, at premium prices, directly from miners in Central and South America. Sovereign Wealth Funds, major multi-national corporations, and “the smart money” investors (like Warren Buffett) are all stocking up on precious metals and acting like they expect gold and silver prices to go substantially higher.

The U.S. dollar is taking a nose dive

Both Rick Rule and Alasdair Macleod, noteworthy economists and precious metals market analysts, say they are now seeing an accelerating pace in the devaluation of the US dollar. In a recent interview, Rule predicted that the dollar will lose 75% of its current purchasing power within the next decade. That would be quite a hit, considering the fact that the purchasing power of the world’s reserve currency has already been in freefall since the abandonment of the gold standard in 1971.

Macleod notes that China is already set up to make the yuan a gold-backed currency – it’s just a matter of when they want to flip the switch. According to Macleod, China is holding back because it doesn’t want to be seen as destroying the world’s fiat currency system, or risk triggering a worldwide recession. His theory is that China will wait until the collapse of fiat currency appears imminent - then move to roll out a gold-backed yuan under the guise of simply protecting its economy.

Why it will be gold to the rescue

Gold is in a class by itself. That’s true on not just one, but on several, levels. It is, indeed, a very unique commodity, which is precisely why it’s been valued and recognized as “real money” throughout history.

In a recent piece in his “Turbulent Times Investor” newsletter, global economist Dr. Stephen Leeb, laid out the case that, “Gold can be seen as a…brand without peer, one that will never…be overtaken by a competitor.”

First, gold is not something that is vulnerable to being overtaken or outmoded by advances in technology. Eventually, something will come along and dethrone Apple’s iPhone from its position in the marketplace – just as its iPod went the way of rental DVDs at Blockbuster. In contrast, there is no evidence that anything will ever come along to replace gold’s unique position in the world.

Second, all the world’s gold is still here. Unlike other commodities, such as oil, that are gradually being used up, pretty much every ounce of gold that has ever been mined, or will be, still exists. This also distinguishes gold from its sister metal, silver. Many industrial uses of silver use up the silver. In contrast, gold can be melted down and recast in different forms, but it’s essentially indestructible. No other major commodity has that quality of permanence.

Third, gold has always been, and remains, a scarce, finite natural resource. That scarcity is one of the principal characteristics of gold that has accorded it value throughout the centuries. It’s not something that everyone has a big, giant bag of just sitting on their living room floor.

Gold’s unique appeal

A noteworthy characteristic of gold is that it seems to be instinctively aesthetically appealing. Close to anyone’s first thought upon seeing a gold coin, a bar of gold bullion, or a piece of gold jewelry, is that it’s beautiful – beautiful simply because it’s made of gold. Gold is one of the few things in the world that seems to possess an intrinsic quality of beauty.

That quality of beauty is one reason gold commonly appears in religious contexts. Israel’s Ark of the Covenant was crafted with gold. The two colors associated with China’s New Year are gold and red – and in that context, gold symbolizes Heaven. The book of Revelation pictures Jesus wearing a gold crown upon his triumphant return to Earth.

The unique nature of gold extends down to its very atomic structure. Gold is a mystery: we know how oil is formed, but we’re clueless to explain how gold is created. Gold’s atom has an extremely small radius, with a single electron in orbit. That electron gives gold its special metallic glow.

Gold is extremely malleable. One ounce of gold could be made into a 50-mile-long wire…or a sheet of several hundred square feet. Despite all that physical flexibility, gold has barely any common industrial uses. That stands in sharp contrast to its sister, silver, which seems to have a virtually endless list of important industrial applications. That lack of practical usefulness doesn’t, however, prevent gold from being valued 10x to 100x higher than silver.

Finally, ever since the concept of money was created, gold has been recognized as real money. The original J.P. Morgan famously said, “Only gold is money. Everything else is credit.” And that, my friends, is likely the reason that central banks, sovereign wealth funds, and smart investors are loading up on gold in anticipation of “The Great Monetary Reset”.

Why gold will be the reset solution – a few parting words

Oh, by the way, if you had any remaining doubts about whether or not the paper markets in gold and silver have been manipulated, chew on this little tidbit: JP Morgan (and other major bullion banks), after engaging in yet another round of massive short selling - crashing silver prices by nearly 40% in one day – closed out its short positions at almost the exact low of that massive smackdown of silver. What are the odds on being able to pick the exact low to profitably close out your gigantic short position in a major, one-day market crash? – I’d say the odds are “slim” and “none”, and “slim” has already left town. Plus, while JPM is engaging in massive short selling in the paper market, on the COMEX exchange, it’s buying gold and silver hand over fist in the actual physical market. The current gold and silver holdings of JP Morgan rival the total holdings of the central banks of many countries.