Gold Can be Used to Rebalance the Global Economy Without a World War
Luke Gromen: Gold Can be Used to Rebalance the Global Economy Without a World War
Palisades Gold Radio: 5-8-2025
Tom welcomes back Luke Gromen of Forest For The Trees back to the show. The discussion delves into complex economic and geopolitical dynamics, focusing on how global powers might navigate a transition away from the dollar-based system towards a neutral reserve asset like gold.
He begins by highlighting that the current dollar-centric system is unsustainable due to high deficits and debt levels. A potential solution, he suggests, involves using gold as a neutral reserve asset, which would allow commodities to be priced in multiple currencies and facilitate trade settlements.
This shift could create a more balanced and resilient global economic framework.
Moving on to geopolitical implications, Gromen notes that the conflict in Ukraine has underscored the limitations of conventional military strategies, shifting the balance of power dynamics. He points out that countries like Russia and China are driving efforts to move away from the dollar system, which necessitates a new economic framework.
This transition is not just an economic shift but also a significant geopolitical realignment. Luke emphasizes the importance of incentives for avoiding direct military confrontation with major powers.
He explains that such conflicts are strategically unwise due to nuclear deterrence and the deep interdependence of economies. Instead, he argues that negotiating a new economic order aligns with long-term strategic interests and avoids the catastrophic consequences of war.
Drawing on historical context, Mr. Gromen observes that the post-World War II debt-based economy is nearing its limits, making it imperative to return to a more sustainable model.
He suggests that transitioning to gold as a reserve asset could reboot global economies, fostering stability and growth without resorting to conflict.
This approach not only addresses current economic challenges but also positions nations for future prosperity.
Time Stamp References:
0:00 - Introduction
0:55 - Tariffs & China's Response
5:52 - Trade Disruption & Inflation
8:26 - Inflation & Real Rates
10:35 - Bessent Put & Move Index
12:26 - Treasury Auction Thoughts
16:45 - W. Buffett Cash Reserve
22:14 - Inv. Funds and Mandates
23:53 - News Cycle/Gold Theory
31:00 - Chinese Fin. Officials
34:46 - Large U.S. Gold Imports
40:48 - Official Denial/Confirm
44:44 - Revaluing Gold Reserves
48:28 - Gold Backed Treasuries?
51:49 - Gold Pricing Cui Bono
54:17 - Oil/Dollar Scenarios
1:02:03 - Russia/Saudi & Oil Mkts.
1:03:39 - Economics & Derisk. Conflict
1:14:53 - Incentives & Ukraine
1:17:17 - End of Debt as Assets Era
1:21:30 - Wrap Up