$25,000 or $50,000 or $55,000? The Big Gold Revaluation Will SHOCK the Entire World - Mario Innecco
$25,000 or $50,000 or $55,000? The Big Gold Revaluation Will SHOCK the Entire World - Mario Innecco
Money Sense: 3-18-2025
A revaluation would benefit the government by increasing the book value of its gold reserves, allowing it to expand its balance sheet, borrow more, and manage debt more effectively.
Additionally, it could incentivize increased mining production and boost gold imports. However, this move would weaken the U.S. dollar, as gold is priced in national currencies.
Mario Innecco, a senior analyst, suggests that a significant revaluation of the statutory gold price could drive market prices as high as $50,000 per ounce. However, such an extreme adjustment could devalue foreign-held U.S. assets, potentially leading to economic tensions or conflict.
Currently, the value of U.S. gold reserves accounts for only about 2% of outstanding Treasuries, a stark contrast to historical figures of approximately 17% in the 1970s and nearly 40% in the 1940s.
Tavi Costa highlights that if the gold reserves were valued at 17% of outstanding Treasuries, gold would need to reach approximately $25,000 per ounce. If the ratio returns to 40%, gold could approach $55,000 per ounce.
While these figures are not direct price targets, they illustrate the potential for a significant gold valuation shift. Innceo explains that while no official decision has been made, potential legislation could increase fiat currency supply and higher inflation, likely driving gold prices up as investors seek safety against a declining dollar.
Recent economic data shows the U.S. dollar falling to 103.6, nearing five-month lows amid concerns about slow growth and trade uncertainties. February retail sales rose only 0.2%, below the expected 0.6%, following a revised 1.2% decline in January.
In this environment, gold has struggled to gain traction, trading just below all-time highs after briefly surpassing $3,000. The outlook appears bullish as inflationary pressures and economic uncertainties drive demand for safe-haven assets.
Mario Innecco suggests that the proposed Bitcoin Strategic Reserve Bill may cover significant changes related to gold, particularly in managing gold certificates held by the Federal Reserve. There is growing speculation that such a bill could be used to facilitate broader shifts in the U.S. financial system, potentially altering the role of gold and introducing new mechanisms for valuation.
One of the most ambitious proposals comes from Senator Cynthia Lummis, who suggested that the U.S. Treasury could swap some of its gold reserves for Bitcoin.
The United States holds approximately 8,100 tons of gold in its vaults, making it one of the largest gold holders globally.
If even a tiny fraction of these reserves were sold and converted into Bitcoin, the U.S. could amass a Bitcoin reserve of around one million coins—roughly 5% of the total Bitcoin supply that will ever exist.
This idea is notable because a gold-for-bitcoin swap could be done without affecting gold's official "book value" on the Treasury’s balance sheet. The Treasury values its gold at $42.2222 per ounce, a figure set in 1973 and never updated, resulting in a valuation of about $11 billion.
This is far below the current market price of around $2,900 per ounce. Revaluing its gold holdings could significantly enhance perceived value and create financial flexibility for alternative assets like Bitcoin.
