Economist: Gold will become the new reserve asset by 2030

US Treasuries will be eliminated as global reserves by 2030 as the US dollar reprices from “massively overvalued” levels, raising gold yields by about 3 times, said Luke Gromen, founder and president of Forest for the Trees.

The economic policies of the past 40 years are being deliberately “ignored” in the United States, which will have a huge impact on everything from US Treasuries to the dollar, Gromen said in a televised interview with Kitco News economic programs anchor Michelle McCurry. To gold.

He added, over the past few decades, the United States has tended to export Treasuries and reduced the export of everything else, and that is what is changing now.

He added, “What Janet Yellen is saying, what the US Treasury Department is saying, what National Security Advisor Jake Sullivan is saying, and what the Department of Defense is saying is that it is in the national security interest to get out of the business of exporting Treasuries and get into the export of goods.”

"But we can't do that without a much weaker dollar, and the price of gold will be the arbiter of that. We're seeing US Treasury Secretary Janet Yellen throwing 40 years of economic orthodoxy in the trash," he continued.

This shift from Yellen, whose focus is on the dollar, is significant. “This is analogous to what happened when former President Richard Nixon closed the golden window, decoupling the link between gold and the dollar,” Grumin said. In the future, “the bond market will lose... Its value is $130 trillion and its position in the markets as a reserve asset.”

Gromen explains that the dollar system is dying, with US Treasuries losing their status as the world's main reserve asset, which is why the dollar will be repriced. However, Gromen rules out replacing the US dollar, stating that it will remain the global reserve currency.

The US Treasury market has lost its share as a primary global reserve asset since 2014 because global central banks sold $400 billion worth of Treasuries and bought $600 billion worth of gold.

“Global central banks stopped buying US Treasuries ten years ago on a net basis, US debt has not stopped growing, and there is a widening gap between the supply of US Treasuries and demand from global central banks,” Gromen said.