To investors,
There is a seismic shift underway in how countries think about preserving their economic value for the long-term. It is imperative that you understand what is happening here because the ramifications will touch every asset class, every market, and every investor over time.
Let me explain.
The story is best seen through the explosion of adoption related to gold as a reserve asset for foreign governments. Adam Kobeissi writes:
“Gold is replacing fiat currencies as a reserve currency: Gold's share of global international reserves rose 3 percentage points in Q1 2025, to 24%, the highest in 30 years. This marks the 3rd consecutive annual increase. Meanwhile, the US Dollar's share declined ~2 percentage points, to 42%, the lowest since the mid-1990s. The Euro share remained roughly unchanged at ~15%. Gold is now the world’s second-largest reserve asset after surpassing the Euro in 2024. Gold is seeing historic levels of demand.”
Now it is important to understand that fiat currencies will not fluctuate in price ($1 = $1), but gold’s price can appreciate. My friend Val Katayev responded to Adam saying “This is based on value. As gold price goes up, it will naturally be a higher % of global reserves since other currencies do not appreciate in value generally.”
Speaking of gold’s price, it is up nearly 70% since the start of 2024. That is an epic run for an asset that historically had much more stability.
Even with Val’s volatility caveat though, the significant increase in gold adoption can’t be ignored. So the market is obviously trying to tell us something. What exactly is it?
I asked Silvia, the AI CFO that our team built, to explain why gold has been rallying over the last 18 months. Here is what she told me:
“Gold has essentially experienced a "perfect storm" of supportive conditions: institutional demand, inflation concerns, geopolitical risks, and favorable interest rate environments all aligning simultaneously. This combination has pushed gold to historic highs and fundamentally shifted its role from primarily a dollar hedge to a critical reserve asset for uncertain times.”
This explains why gold’s price is appreciating, but it doesn’t explain why central banks maintained record-high gold purchases in 2024, accounting for over 20% of global demand (compared to ~10% historically).
For that answer, we can turn to Porter Stansberry. He writes:
“This is the ‘End of America’ — the loss of our currency’s world reserve status — and the beginning of the end of the world’s post-Bretton Woods financial system. Anyone dependent on the government’s credit will be destroyed over the next decade.”
Now as you all know, I am not usually someone who is fond of doomsday predicting. The demise of America has long been promised, yet it has not come true. But I don’t think Porter is exclusively talking about the demise of our society and our institutions.
He is explicitly talking about the loss of the US dollar as the world reserve currency.
That doesn’t seem too crazy, right? The bitcoiners have been yelling about this problem for years. The gold bugs have been yelling about it for decades. And now you have central banks and foreign governments who seem to have come to a similar conclusion. Maybe they aren’t ready to completely abandon the US dollar—remember the US dollar is still the most popular reserve asset for central banks globally—but they are definitely more open to reducing their allocation percentage than they had been in prior years.
So this brings us to the most important question for you all. What should you do in this scenario? Is there anything you can do personally? What could you change to protect yourself and possibly benefit?
Porter says “to save yourself: 1. Own a great business; 2. Hold real money — gold, Bitcoin. 3. Sell the dollar (borrow long-term, at fixed rates).” Those three ideas seem reasonable to me. And they have been helpful to people throughout history who faced similar situations.
So central banks are gobbling up gold. They are loosening their dependence on US dollars. And retail investors are buying gold and bitcoin to leverage sound money properties to protect themselves.
But is there something even bigger brewing under the surface? Potentially.
This video of India’s Prime Minister Narendra Modi, Russian President Vladimir Putin, and Chinese President Xi Jinping went viral over the weekend. They are chopping it up like a bunch of school boys plotting how to skip class and get an extra recess session in.
But this isn’t elementary school and these world leaders could significantly change the global world order if they decided to play nice with each other in a highly coordinated fashion.
Investor Kashyap Sriram threw out an interesting perspective. He wrote:
“5 years from now, when people ask: how did we end up in a multi-polar world order? It started with the US policy of attempting to isolate Russia from the EU, doubling down by de-globalizing free trade through tariffs, and attempting to bully India into severing ties with Russia. Honorable mention goes to nationalizing US tech giants and export controls backfiring by inducing China to develop its own advanced semiconductor tech.”
Now it doesn’t take Albert Einstein to get out a hypothetical calculator and add 1 + 1 here. Central banks are looking to gold and other reserve assets at the same time that many of the largest countries have their leaders chumming it up with each other.
Are we likely to see a multi-polar world emerge? Maybe. I don’t know what the end result will be. But I do know that a lot of things are changing right now and it is essential you pay attention. And it definitely won’t hurt to have sound money assets like bitcoin and gold in your portfolio.
Hope you all have a great day. I’ll talk to everyone tomorrow.
- Anthony Pompliano
Founder & CEO, Professional Capital Management
READER NOTE: We are less than two weeks away from the Independent Investor Summit in NYC on September 12th. This is going to be an incredible event packed with actionable investment ideas from many of your favorite internet-native investors.
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How Bitcoin Outpaces Stocks In The Next Decade
Jordi Visser is a macro investor with over 30 years of Wall Street experience. He also writes a Substack called “VisserLabs” and puts out investing YouTube videos.
In this conversation we talk about the Federal Reserve, what is going to happen with artificial intelligence, future outlook for stock market, and why interest rate cuts will be so bullish for bitcoin.
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