(Money Metals News Service) In this episode of the Money Metals Midweek Memo, host Mike Maharrey tackles a remarkable milestone in the gold market and a major shift in mainstream investing philosophy.
Gold has surged past $4,000 an ounce, marking an 87% rally since early 2024. Meanwhile, the long-standing 60/40 portfolio strategy—the bedrock of conventional investing—is showing cracks as even Wall Street begins to acknowledge gold’s role as a serious inflation hedge.
Maharrey uses a football analogy—the “prevent defense”—to highlight how conventional strategies often fail precisely when it matters most. Just as playing not to lose often leads to defeat on the field, investors who rely solely on outdated strategies risk being blindsided by today’s inflationary and debt-driven environment.
The Big Move: Gold Clears $4,000
Gold’s breakout above $4,000 stunned even seasoned watchers. Futures crossed the line on Tuesday, and spot hit $4,053 during the show. Since January 2024, gold has climbed 87 percent, a staggering rise fueled by fiscal instability, inflation concerns, and global safe-haven demand.
The current U.S. government shutdown adds short-term fear, but the deeper currents—massive government debt, endless spending, and fading confidence in fiat money—remain the lasting foundation for higher gold prices. A correction may come, but the long-term trend points higher.
Still Underowned: Only 38% Hold Gold
Despite gold’s record-setting performance, most Americans remain on the sidelines. A World Gold Council survey found that only 38 percent of investors hold any gold at all. The U.S. financial culture, driven by commission-based advice, has long sidelined hard assets.
The math tells the story. In 1929, the Dow Jones at 381.17, and gold at $20 valued the Dow at about 19 ounces. Today, with the Dow above 46,000 and gold around $4,000, the Dow is worth just 12 ounces—a 37 percent decline in gold terms across nearly a century. When measured in real money, stock market “gains” are illusions built on a weakening dollar.
The 60/40 “Prevent Defense” Is Failing
The traditional 60/40 portfolio—60 percent stocks, 40 percent bonds—was supposed to balance growth and safety. But in recent turmoil, both stocks and bonds fell together while gold surged. This inversion signals a structural shift in what qualifies as a true hedge.
Even Morgan Stanley now sees it. CIO Michael Wilson recommended a new model: 60/20, cutting bond exposure in half and replacing it with gold. He calls gold the “anti-fragile asset to own”—a durable hedge in an era where Treasuries no longer provide stability. When one of Wall Street’s biggest names breaks ranks, the paradigm is changing.
Dollar Down, Fiat Down—Gold Up
The U.S. dollar index is down nearly 10 percent this year, but the deeper truth is that every major currency is falling relative to gold. Silver, too, is approaching $50 per ounce and already at record highs in India.
This isn’t the collapse of a single currency—it’s the slow erosion of the entire fiat system. Holding cash that loses purchasing power every year is a guaranteed loss. Gold’s rally is the mirror image of paper money’s decay.
Policy Reality: Debt, Deficits, and the Press
America’s debt crossed $37 trillion in August, and the money supply has grown by $1.5 trillion since mid-2023—now higher than its pandemic peak. Neither party is showing the will to reverse course. Inflation is embedded, not transitory.
Consumer price indices capture only part of the problem. Inflation also manifests in asset prices. That’s why, priced in gold, the Dow has fallen for nearly a century. Monetary insurance isn’t speculation—it’s survival.
Central Banks: Net Buyers Even at Higher Prices
Even as prices climb, central banks keep buying. In August, they added roughly 15 tons of gold. The second quarter’s 166 tons was down 33 percent from the prior quarter but still 41 percent above the 2010–2021 average. Kazakhstan, Turkey, China, and the Czech Republic led purchases, and there were no major sellers.
For the first time since 1996, foreign central banks collectively hold more gold than U.S. Treasuries. Nations are hedging against Washington’s deficits and the declining credibility of the dollar.
Why Advisors Miss It (and Why You Shouldn’t)
Most financial advisors earn fees on stocks and bonds, not on gold. Many also came of age during the zero-interest-rate era and see gold as an outdated relic rather than monetary insurance. This blind spot has cost clients dearly.
As Brien Lundin of Gold Newsletter told Maharrey, timing a trade may be hard, but preserving wealth is always timely. The goal is to hold assets that keep value as currencies lose theirs.
Action Steps for Investors
If you’re among the 60 percent of investors with no gold, now is the time to change that. Start modestly if needed. Money Metals’ Installment Program allows participation from $100 per month, letting you accumulate gold or silver gradually.
You can purchase online at MoneyMetals.com or by calling 800-800-1865. Metals can be shipped directly or securely stored in Money Metals’ state-of-the-art depository.
Closing Thought
Gold’s surge isn’t just another price record—it’s a referendum on trust. For two years, gold and silver have been broadcasting the same warning: the fiat system is unstable at its core.
You can’t vote away debt or inflation.
You can only protect yourself.
The way to do that is simple—own real money.
