And pray there are some adults in the room somewhere
The goldbugs have resurfaced to celebrate and why not? It does not appear that we have any adults in the room in Washington, DC. The new accepted norms include some bizarre twisting of definitions to claim that “state capitalism” is an acceptable form of business just because “China does it.” Yes, that China, the one with a Communist party in charge of it. Other insanity includes the eradication of coinage within the US monetary system. Excuse me one might say, but yes it is true.
The headline in Senate Bill S.1525 is the following:
This is not news, the Dr. Copper fans have been hoarding pennies for years now in anticipation of this (guilty as charged -JG), but now with the penny being eradicated officially I can assure all of you that retailers will be rounding up on hell of a lot more than they will be rounding down.
This act also featured a section however that prepares the US citizenry for a digital currency and shockingly enough, embedded inflation. Wait, how can an act that impacts the minting and usage of “coins” be reflective of inflation? Let us journey into Section 6 of this act together:
The discontinuation of coinage might sound logical to many as 90% of legal American monetary transactions are conducted digitally now anyway. But how does this influence or impact inflationary trends? Following the penny logic, let’s assume the nickel will be first up for elimination. The means that everything will have to be rounded up to the dime. So those items that were priced initially at $0.02 and rounded up to 5 cents will not be rounded up to 10 cents. Discontinue the dime and we round up to the nearest quarter. Discontinue the quarter and we round up to the nearest dollar.
Discontinue the dollar and round up to the nearest Lincoln and we’ve gone round trip from the penny to the 5 spot and we can rename Washington, DC more appropriately “Harare.”
Still putting off that gold purchase?
Perhaps reflecting on the outrageous government debt would be enough but if one reviews our history, gold and US Treasuries have played like this before. For a prime example of a currency, energy, and political disruption with major wars and embedded cumulative inflation one simply has to review the 1970’s great stagflationary period.
I hate overlaying charts like this but the demonstrative nature of the moves in parallel which illustrated the political and economic disruptions from the mid-1970’s until Volcker imposed deflation to save the US dollar is hard to ignore.
Unfortunately for everyone another group of Federal Reserve voodoo economists engaged in this behavior again after a massive overreaction to the Covid pandemic which resulted in more ZIRP and a huge inflationary surge after 2021 when the Triden (Trump/Biden) spending fest and fiscal overreach inflated the economy to unseen levels by 2022. The US 10 year Treasury was no fan of this move nor as it turns out was gold once the depths of this insanity were realized on a global basis:
The length and duration of the post 2012 consolidation in gold means that this market has a lot further to run higher and holding the $3800-$3900 price level as these pages predicted and warned in the article “Oh My Gold! (and Silver)” published on October 21, 2025 where it was stated:
EVERYTHING stated in that article is accurate now and will be proven correct, as the Fed will eventually panic in cooperation with the US Treasury and engage in further acts of yield curve control, dollar dilution, and increased global economic instability which will only add to the cumulative inflation problems and affordability issues for consumers in the US.
As these pages love to say, got gold?