Imagine if I told you that gold had just hit an all-time high, up 44% this year and 15%
since the Fed with a dovish pivot in August of 2025. It's absolutely ripping. Whilst Bitcoin,
my favourite, has been, as Mr Checkmate likes to say, in chop-solidation mode.
Now this has sparked a number of interesting conversations. Is gold signaling the end of
Bitcoin's bull run? Is there something bigger about our broken money system that we're missing
from these price signals? Over the next 30 minutes I'm going to break down some data,
I'm going to look at some historical context, I'm going to share of course my personal takes
and ultimately why I'm still betting big on Bitcoin for capital growth. Even in the instance
where gold, perhaps you could say at the canary in the inflationary coal mine, is whispering warnings about all the shifts that are going on in the global macroeconomic and financial space.
So there's a lot going on. At the end of this, you'll be able to get some insight onto what I'm doing, of course,
insight into how I believe the central banks are behaving and, of course, understand why.
Why is it that the gold price is charging, yet digital gold, Bitcoin, is not?
And the divergence that has happened, it looks like it may have broken that correlation.
We'll dive into that.
Now, why are you going to listen to me?
Well, I've been investing my own money for the last 10 years or so.
I share what works.
I share what doesn't work.
And I'm always looking for answers, asking myself, what am I missing?
What is it, Jake, that you don't understand is going on out there?
Figure it out.
and once you do that, what do you do with that information?
What decisions can I make that improve the situation that I'm in?
Now, an example of this would be is go and price the S&P index in gold.
What happens?
Well, you change the denominator from the US dollars that you're used to
or the index ticker that you're used to
and you suddenly see a pretty boring chart of very little growth
and that's because gold is just another way of measuring value.
but how wildly different these two pictures are.
Now, I've covered this in the podcast previously.
So for those of you that have listened
to recent episodes about this,
then you'll understand what I'm talking about.
But if you haven't, stick around
because I'm going to explain.
Now, I always encourage people,
hop over to the podcast player like a fountain,
join NOSTA, get involved in decentralized
and uncensorable communication online,
chuck us some zaps.
And if you feel like giving me an email,
then hi at jakewoodhouse.io.
I'd love to hear from you. And if you have any insights, why is gold doing what it's doing?
So let's dive in. What is gold and why do we care? Well, the very simple answer is gold is money.
And gold has been money for a very, very, very long time, thousands of years. And it has defied
the odds in many ways of a extreme amount of trial and error. We have used lots of different
types of money. And the Austrian School of Economics is very, very insightful for this
because they have the phrase sound money and gold is sound money. Why do we like using gold? Well,
it fulfills a number of characteristics that are required of the material or the technology that
makes a good money. And it then is able to store value. It is able to be a medium of exchange and
it's able to be a unit of account. This is not an episode about the merits of sound money. I
encourage you wholeheartedly to dive into that as a subject and I will do future episodes on that
because without the base understanding of the concept of sound money you don't understand the
difference between saving and investing and so why is gold ripping in price right now well because
it's a way to store value over time one of the reasons that gold failed in my opinion is not is
it just good at storing value across time but it failed at storing value across space and this is
were the historical context of the development of modern communications channels where it became
easier to send IOUs over telephone via centralized entities than it was to actually physically settle
gold. And that weakness, shall we say, is what opened up Pandora's box of the last century of
central banking and what has become the most recent iteration of that with an entirely fiat
currency like US dollars, British pounds, euros, RMB, yen. They're not backed by anything. Now a
good way of even thinking about this is a suit that you can go and buy on Savile Road today
is the same price when measured in gold as what you would have paid in a upper class Rome
thousands of years ago. Now think about that. Isn't that crazy? If you just had the same amount of
gold as you did back then, you'd buy the same amount of material in real life. And that just
shines a light on the fact that actually hang on a second maybe the denominator i've been using my
whole life to measure things in in terms of value is wrong and that is the pounds i grew up with in
the uk or here in australia and then you start digging into how many of these things are they
printing each year and you start looking at the actual inflation numbers and we'll come to this
later because it's really important as a piece of the puzzle as to why the gold price behaves the
way it does and how different Bitcoin might be. So why do we care about this right now? Well,
gold's price action, without any doubt, it's like a thermometer on global economic health.
And it is absolutely, it's smashing through the red section of a thermometer right now because
the price, you don't get a 15% rise in the price of gold since August. That's mad. What is going on?
And that's what I'm diving into today. It's really due to the behavior, in my opinion, of central banks around the world and a shift in policy from them away from owning government bonds and into owning hard assets like gold.
Now, interestingly, the environment for interest rates at the moment, the Federal Reserve just lowered by 25 basis points.
The Royal Bank of Australia held yesterday, which was interesting.
But I would argue that right now, not only are we seeing all time highs in stock markets, but inflation isn't fully under control, yet they're dropping interest rates.
Why?
Well, because they're so indebted and the cost of their debt is so high that without inflating it away on the back end, they're completely insolvent.
And so gold is absolutely rocking.
Not only are the central banks buying, but anyone that hasn't studied Bitcoin doesn't understand that there's a new form of digital sound money.
And so they're flocking to gold.
Now, for the first time ever, the U.S. gold reserves exceed one trillion dollars in value.
Now, shout out to the, I'm going to get the name wrong, the Kobe Isai letter.
Perhaps I said that wrong.
But they had some good charts this week.
I'll, of course, link a GDoc in the show notes with all the resources that I've gone through to pull this information together.
And they post, this is insane.
As the record running gold accelerates, the U.S. gold reserves just exceeded one trillion for the first time in history.
The U.S. now holds two and a half more times gold than Germany, which is the second largest holder.
now this isn't a podcast about is the statistic on gold owned actually true because there's a mad
fact about when fort knox was last openly audited make of that what you will like how much gold the
u.s government actually have well according to their data it's just passed through a trillion
dollars worth of value but i don't know if that's 100 true but what it screams to me is inflation
risk. The US dollar is weakening. They are printing money and people can see it. And the gold price is
the indicator to you that shows it's actually happening. Now, quantitative easing or stimulus
packages or whatever they give it as a term, basically more money in the system. If there's
more money in the system, but the same amount of stuff as before, then the price moves up.
The value doesn't change. And this is why we're all so confused. You go back and study the Weimar
Republic, people thought they were getting rich because there was more Deutschmarks and the stock
market was hitting all-time highs. But it wasn't that they were getting rich. It was actually they
were getting poorer and the denominator was being disintegrated. And it's very deceptive.
Now, there's also counterparty dangers, right? Why are they buying gold? I'll hit on this later,
but the Russian sanctions that got put in place a few years back, the US confiscated all US
denominated assets that the Russians owned. This counted billions of dollars in spite of the fact
that they were already trimming their position
with that counterparty risk in mind.
Now, as I already touched on,
go and view things you value in normally,
whether you normally use a pound or an Aussie dollar
or a Canadian dollar or a US dollar or euro
or whatever currency it might be.
Price it in gold.
See what happens.
I have started running net asset calculations
on my end in gold.
So each week I have a figure of ounces.
It like your net assets right now are this amount of ounces of gold And why is that helpful It just another way of looking at value Now should you buy gold That a great question
Absolutely great question.
By the end, we'll have a good answer to that, I hope.
I want to just touch on as well another excellent episode
in recent times that I analyzed previously
of what Bitcoin did with Danny Knowles and Dr. Jeff Ross
when they were looking at the S&P priced in gold
over the last 100 years.
And what it shows very clearly is
there's no real growth.
There's a bunch of boom and busts.
But in gold terms,
if you had the same amount of gold as 100 years ago,
you could buy the same amount at the stock market.
What the hell?
That's not the world I see around myself now, is it?
Now, for sure,
I would like to consider holding some gold
as like an emergency stash
for what happens if the banking system collapses tomorrow?
What happens if the internet gets switched off,
as my wife asked me recently?
Earning some gold,
I would like to have it myself so I'd self-custody it somewhere and I'd like to have it in small
amounts so I could potentially use it for day-to-day trade. For capital growth my bet's
still Bitcoin and we'll hit on that as we go through the episode. What happens if the gold
price is being suppressed? Now this is a much bigger subject than what I can cover just in here
but there was a situation in the 60s where the London gold pool was tied up in suppressing the
gold price. The French left and it collapsed. There's history of this happening, right, openly
from central banks and countries. In 1999, the Washington agreement limited sales to avoid
crashes. You find yourself playing a game where others write the rules, right? Oh, no, we're just
going to stop sales for now. And it's all about controlling the alternative to fiat currency.
It's like, oh, no, no, no, you can trust our currency. We're not printing that much of it.
The inflation rate of 2% per year is roughly what we're hitting.
And there's nothing to see here, guys, nothing to worry about.
And the price of gold, when it rips, it's like, I should be owning gold, right?
Anyone out there that's chasing investment returns or is simply trying to retain purchasing power
will be looking at the gold price going, God, why don't I own some?
Why in the hell am I holding these dollars?
Why am I holding these euros?
You know, they're going backwards.
but what's what's really shifted in the last 10 years is central banks are now openly buying gold
and as i touched on before that's because the counterparty risk of owning
the the government bonds that previously were the norm has gone up plus the inflation risk on those
bonds has gone up so you go and buy 10 years worth of the u.s dollar debt you know that when you get
it back at the end of 10 years even with the yield that you've been paid the real rate of inflation
has suppressed, not suppressed, that's the wrong word, the real rate of inflation has eroded the
purchasing power of that debt contract. Like why would you own a negative yielding debt product?
It doesn't make sense. So they're turning to gold. And now I want to shout out to James Lavish's most
recent newsletter with the information is absolutely excellent as always. You know, being able to read
the insights of an active fund manager with lots of experience into Bitcoin as well. I mean, it's
gold does this stuff so a thousand tons annually for three years has been picked up by central banks
like who's buying well it's not a it's not it's not a secret this but the brics nations right the
chinese the russians the indians they're not interested in u.s government bonds any longer
what happens if they get sanctioned why would they go and buy them right and from reports that are
actually visible. So the National Bank of Poland has added 49 tons in Q1 of 2025. China's central
bank has been purchasing since November 2024. And they paused for six months just prior to that,
they've added another 13 tons in Q1 of 2025. The Turkish, Azerbaijan, Kazakhstan, Czech Republic,
Cambodia, the Philippines, they're all buying gold openly. But here's the kicker, right? According
to the data James is posting, only 22% of actual central bank demand is seen on the market. So that
means 80% of gold purchases are being done through back channels that we have no idea about, right?
A lot of this is apparently conducted through Switzerland. And they don't declare it. Why
wouldn't you declare that you own more gold? Well, one, it's a safe haven asset that they are
stashing for a rainy day. We want to retain our purchasing power. Having money that functions in
the future as a store of value is important to us. We want to own that. But two, it's also
recognition of the fact that their currencies are failing. Now, no one really wants to admit that,
right? Oh, yeah, yeah. No, I'm not buying gold. No, nothing to see here. Why? Oh, because I believe
in the fiat currency that I produce every day. So this is fascinating to me. Okay, these are
genuine mechanics of the market that are shifting on like decade-long time horizons are now speeding
up. And important to point out is that the bid, the gold price bid is from people allocating from
a strategic perspective. They are price insensitive. So they are buying what they can
in order to hit whatever quota they might have given. Now, the gold bulls out there are obviously
You're like, whoa, gold is ripping.
We always knew this would happen.
And look at Bitcoin.
Bitcoin's going nowhere.
Now, gold is tracking the M2 money supply very, very closely.
But Bitcoin itself is lagging.
Why?
Why isn't Bitcoin following it as well?
Isn't liquidity an important part of the price action of Bitcoin?
Well, absolutely it is.
But what's interesting here with this analysis, it's actually not unsurprising to see where the price actually is.
And that gave me great confidence.
Thank you, James.
He points out, importantly, that Bitcoin and Global M2, that the pattern seems to have broken from July this year.
Interesting. Let's dig into why.
Now, I don't see this as Bitcoin failing, and he quite rightly points that out.
The question actually better asked is, what if the M2 readings aren't quite right?
What if M2 is telling us something that's not completely true?
And this is just an obvious point.
But as an investor, you want to be looking at the metrics you are actually making decisions with.
are they correct what might be wrong about the metric you're using and james walks this through
very very well i would 100 go and read the newsletter if m2 isn't quite right well why
wouldn't m2 be correct and he's like well okay points out to another report so michael howell
we'll touch on him later as well in more detail but james cites his work and michael's built a
global liquidity uh calculator and it's a piece of proprietary technology that he's built and it
monitors a lot more things than just m2 and his latest data shows that there's 184 trillion dollars
an all-time record high of liquidity wow this is like what i mentioned just before if there's the
same amount of goods and services in the economy but they put more money into it the amount of
value being exchanged isn't changing but the prices do so 184 trillion dollars if we know how much
liquidity is in the market we can start to make a bet on what the the the hard assets that reflect
the shift in liquidity will do in terms of price action and then benefit from that so he points out
the key insight i think is everyone's missing bitcoin's lag versus m2 isn't a problem it's
responding to actual liquidity conditions with a natural delay not to headline m2 number that can
be distorted by TGA accounting and other short-term noise. M2 is a rough estimate that can miss key
pieces of the liquidity puzzle. It does not capture Fed liquidity swaps with foreign central banks,
the repo market, shadow banking liquidity, cross-border dollar flows, and changes in volatility
and collateral requirements. Whereas Michael Howe's global liquidity captures all of this.
point being is that that gold and m2 chart is is is not as accurate as we might think to the actual
global liquidity number from my perspective what does this represent it's like well okay the
divergence maybe this is like the 1970s an inflationary era right gold is up 44 year to date
stocks are also rallying what does that mean and and basically the the norms of safe haven
like the norms of safe haven behavior seem to be shifting now i want to make a shout out to some of
my um audience members on nostr chris justin bond 008 trusso 19 everyone coming in with some great
questions about okay well what's going on with the gold price at the moment and it's particularly
this story about gold price suppression that i want to highlight because what if they've been
purposefully manipulating the price of gold down so that we don't see the erosion in purchasing
power of fiat currencies as clearly as what's happened in the last 15% the last rally since
August. So what the hell is going on out there? We can continue to dive into it. Shout out to
Michael, my producer, who also popped me some stuff as well. North Star Charts, again, I'll link
this in the show notes they show how the Dow and gold is reversing dramatically So hang on a second What going on here The stock market versus gold we have fallen below
So the chart rising equals Dow beating gold.
The chart falling equals gold beating Dow.
So this idea that the stock market would always outpace gold,
that has to be brought into serious question here with this information.
So what do we do about this?
Well, I need some more people to think about this through with.
What are other characters that I've trusted in the past that I know have a good understanding of gold?
And who should we lean on to justify our decisions?
Now, James Lavish is absolutely excellent, of course.
But shout out to Larry Lepard.
So Larry came on my podcast, Bitcoin with Jake, a couple of years ago.
We've done a couple of podcasts now.
What an awesome guy to learn from.
You know, a lifelong investor, worked as a VC in the tech space and then converted to more of a sound money advocate.
spent years studying the gold market and also gold miners etc and has become a big bull on bitcoin
why because it's a digital version of gold with superior features as sound money he was studying
austrian economics years ago how interesting and in the episode he particularly touched on this
concept of gold suppression it's like well think about it you know if you had as much money as you
could possibly dream of because you can print it what would you want to do well you'd want no one
to realize the power that you got from them you know accepting you printing dollars and you would
use as many back channels as possible to suppress the one thing that is an alternative to the system
you're pushing which is gold as sound money and it's like okay well how is that different in bitcoin
And what he points out is that the shadow market for gold, there's all this paper gold that exists.
And I'll touch on this in extra details in a second.
And it's been possible to suppress the price of gold using fiat currency mechanisms.
But with Bitcoin, because of its ability to rip on the short term, on the upside and the downside, it's like a hedgehog.
It's really difficult to attack from the top.
and anyone that tries to attack Bitcoin
in a serious way from a price suppression perspective
could get completely wiped out
as this thing does, you know,
it can double overnight if it wanted to.
Now, yes, there's more institutional capital
coming into Bitcoin
and that is naturally dampening the volatility
because a huge pension fund, for example,
oh, I want to take a 2% position.
They buy 2% of their net assets.
That price then moves up by 30%.
Well, they rebalance, right?
They move it back to 2%.
They only want to own 2% from their portfolio perspective.
And so that increases the sell side pressure as the price moves up.
And that's why I think we're getting a very natural process where the really, really intense volatility is disappearing.
But that doesn't change the fact that in Larry's view, Bitcoin is very difficult to mess around with like this.
And there's a long history of it.
So, and I, of course, you know, I researched for these episodes and I learned quite a bit.
But, you know, central banks, they basically, as we already discussed, they don't typically trade in the spot market for gold, but they can use all sorts of different relationships.
For example, bullion banks to play around with the price.
I touched on the example of the gold pool and how that fell to pieces.
They were trying to defend the $35 per ounce bread and wood peg.
Inflation from the Vietnam War was causing a lot of problems and essentially it collapsed.
But they are openly manipulating the price of gold.
Right.
Right. There's then these things called gold leasing and lending programs where the central banks, they essentially they hold the gold physically.
Right. But they create artificial supply and paper gold with derivatives products.
This creates downward pressure, depleting official holdings permanently.
Like, OK, fine. I don't even know what they actually hold behind these derivatives in some ways.
you know the the idea okay alan greenspan in 1999 central bank uh central banker from the fed
you know ready to lease gold in increasing quantities should the price rise so what the
hell so they're selling paper claims on the gold they have that then can be used to flood the market
with supply well inevitably with this more surprise the price comes down they then have
coordinated sales and agreements. So for example, a central bank gold agreement, eight major European
central banks, this was from 1999 to 2014, capped their annual sales at 400 to 500 tons to avoid
market crashes while gradually offloading their reserves. So the announced sales created preemptive
downward pressure. Okay, it's like a kind of stealth sale in a weird way. Like what the hell's
going on here the uk in 1999 sold 395 tons of gold which dropped the price 20 in weeks okay
interesting there's then the derivatives and futures manipulation that goes on okay so i
mentioned already bullion banks e.g jp morgan hsbc shorting massive paper gold contracts
they call them naked shorts it's where you're selling without physical backing
what how can this make sense well it makes sense because the central bank can print whatever they
want the federal reserve is in cahoots with the u.s government they're the same as you know said
for the bank of england and the british government they use their commercial bank buddies that go out
and they use these derivative products to suppress the price on the behest of the money printer it's
classic cantillion effect behavior you're closer to the money printer so it incentivizes you to
behave within the money printer's interests, right? Because you make money out of this.
And it just, it's actually, it's nefarious, right? It's full on nefarious. I've even heard central
banking described as full evil, right? They are purposefully stealing purchasing power from the
average person by printing money, and they're suppressing the gold price so that people don't
realize how much money has been printed. Now, when you start to piece all these bits of
information together you're like what is going on out there plus what an absolutely incredible
thing bitcoin in self-custody is you know baked into the genesis block of bitcoin is an article
it says the chancellor on brink of second bailout you know a times article very very clear that the
creators of bitcoin the creator the creators it was focused on one thing and that was the the
absolutely heinous thing that central banking actually is and that genesis block just shows
that now how hilarious that we're even in this situation all these years later 15 15 years or
16 years since the creation of bitcoin and what a surprise central banks are printing more money
central banks are trying previously to suppress the gold price but they now need gold that's the
irony right all of these different independent nation-state central banks are buying gold
as we discussed already the demand for gold's gone up physical sale of gold has increased people
have been accumulating instead of owning government debt now it's also important to point out that
these the buddies in the commercial banks the trading desks jp morgan got hit with a billion
dollars worth of fines for one instance of manipulating the gold market and it's oh tap
on the wrist sorry yeah we're going to fine you for that so what the hell anyway some other people
to touch on that I thought were interesting in their perspectives. I mentioned Michael Howell.
So he's built this proprietary tool to measure global liquidity. Fantastic. I am not yet a paying
subscriber of his newsletter, but I think I should convert to that in order to learn more about this.
Like if there's anything that Bitcoin is all about, it's like how much money is sloshing around
in the system? I don't know. The Bank of England doesn't even report the amount of British pounds
they print. It's hidden. I tried to find it one time. It's like, no, we stopped creating that
report over a decade ago. What a surprise. Anyway, in a recent letter of his, he predicts a gold price
of $10,000 per ounce. Why? Fiscal dominance, he describes it. Governments drowning in debt.
They're forcing inflation. So why would you be lowering the interest rates when inflation is
still pretty hot? And that's the government CPI numbers, right? Real inflation, for those of us
on the ground, your beef's gone up, your house has gone up, your car's gone up, all the stuff you
actually want to buy? Energy. The government's CPI stat has come down to 2.something percent.
Well, if it's sitting at 2.9, that's still 0.9 more than 2% that's the target, which is 45%
over what it should be. That's not inflation under control. And I think that's the main reason why
the RBA yesterday decided not to cut rates anymore, or not to cut rates again. But either way,
168 global rate cuts in 12 months.
That's massive, right?
So central banks all over the place are cutting rates.
And could this be a 1970s resurgent?
Stagflation, maybe.
Another interesting point, and I touched on this before.
So Robin Brooks notes the gold price is 15% up
since Powell's Jackson Hole speech, a dovish pivot.
I'll read this.
So the Fed's latest dovish pivot,
telegraphed on August the 22nd by Chair Powell at Jackson Hole,
unleashed something and I don think anyone can really understand what that is Gold is up a stunning 15 since that day A rally that so big it stands out on a 25 chart Again I link
this all in the show notes. Wow. Katusa Research. Gold was 21% of global assets in 1980. Today it's
5%. The financial universe got four times bigger. Stocks, bonds, derivatives, crypto.
but sometimes the denominator is the story what does this mean right it's like okay so all of this
financial stuff has happened apparently all this extra value is being created but gold itself
hasn't moved in price well it's it's obviously a combination of all these things right now larry is
someone i really look up to and respect as i touched on in my mind like he's absolutely right
Like gold is a value anchor, but Bitcoin is the growth engine.
And so who else is actually picking up on that?
I agree with you, Larry.
That's the case.
But what about NATO and BRICS?
This is something really interesting.
Shout out to Chris on NOSTA bringing this up.
It's a seismic shift in macroeconomic behavior and central bank and nation state investment
choices.
And global finance is shifting, essentially.
And gold as a neutral money is moving up.
Now I've got here, so at level 941, again, shout out to Michael for sharing this with me.
Canada dumped gold because gold equals BRICS leverage.
Gold is the base asset of choice for China, Russia, Turkey.
They've stockpiled.
If America pivots back to gold to shore up the dollar, it enriches BRICS directly,
handing power to adversaries adversaries a national security risk canada is essentially a
u.s satellite economy and knows that so dumping gold is a signal of alignment with the usa instead
of holding bullion canada leans on usd reserves and treasury securities and now implicitly it
positions for a u.s reserve re-anchoring into bitcoin and stable coins canada preparing for the
digital gold base layer washington is engineering now could this be true could this be the case
that actually there's going to be a division of choice of money
by central banks between Bitcoin and gold?
Could it be the case that Canada is actually that sophisticated
to be deciding to do that?
I'm not convinced on that right now.
And it's likely some kind of very short-term thinking
on behalf of the government there to finance something
that they've overpromised to their population.
But either way, this is a great concept.
Could this be true?
And would that also imply the same thing for the US, Australia, Canada, the UK?
Maybe, right?
Maybe.
So what is this telling us, right?
What are the key signals?
Well, gold's rally, it's simple.
It's a weak US dollar, right?
It's the worst year since 1973.
Inflation is still happening.
CPI is higher than most central banks claim they want it to be at.
But the central banks themselves are hoarding gold, in a way price insensitive because it's a strategic allocation.
Bitcoin's lag, as James quite rightly points out, is not actually something to worry about.
And yes, the diversification is true.
But in this instance, it's actually very, very bullish for Bitcoin and is more than likely a symptom of the shenanigans that the central bank is able to play with on the repo markets, etc. that I touched on before.
So what the hell is going on?
I think it's very bullish, like extraordinarily so.
Like the year end, we're looking at some big numbers coming in, in my opinion.
There are some risks, of course.
And in this case, like the risks I would point out as more, why would you own US treasuries?
Well, the sanctions that Russia got hit with were a very, very obvious shot across the bowels globally a number of years ago,
where it's like, if you own our shit as a part of your portfolio,
don't expect to keep it long term if you piss us off.
And although the Russians have been actively reducing their position
of US counterparty assets, they still had a bunch of money wrapped up, right?
So the US froze approximately 5 billion in Russian central bank assets
after the sanctions.
So that was in 2022.
but the figure is a little light because the global freeze that happened on russian assets
is more like 300 billion of which 67 billion was in u.s dollar denominated securities
held abroad like in europe for example so you know 300 billion oh i don't want 300 billion not on my
balance sheet right so people are thinking okay well the counterparty risk of owning government
debt, which was previously like highly liquid and considered the risk-free rate of return,
is that still the case? But what other choice do you have, right? Well, gold is the obvious one,
but perhaps level 941 is absolutely bang on. And really the central banks of the Western world are
leaning towards Bitcoin. Like, could that be true? I mean, it would be insanely bullish for Bitcoin
if the case, but it made me think about the Bitcoin standard and the historical context of
the battle between gold and silver and the likes of India and China that were slow to adopt the gold
standard and the disbenefit to their civilization and their economics as a result of doing that.
Are we now at that same turning point? Like if a central bank actively pursues Bitcoin instead of
gold and therefore they choose the asset that is superior for transferring value across not just
time but also space how big a margin might they improve themselves by or win by in the future
now as you know i'm a big advocate for bitcoin i think it benefits not just nation states and
central banks uh in some ways i think it actually obsoletes a central bank but the commercial
banking industry will absolutely remain because there'll still be all sorts of financial products
that can be built on top of bitcoin the base layer but it also benefits the individual right
it enables you to take self-custody of your stuff. It's very difficult to steal a seed phrase from
someone. Like why would you shoot and kill someone dead if you can't get their seed phrase off them
and then you can't get their money? Whereas you could just shoot them and take their gold, right?
There is a very, very clear attack vector that Bitcoin has improved upon when it comes to the
proliferation of sound money of Bitcoin versus gold. So what am I watching? Well, of course I'm
watching m2 of course i'm watching gold of course i'm looking at bitcoin's chop solidation and
thinking when's this blow off top gonna happen now i said i said this recently august september
they're always quiet months right but gold's ripped since the middle of august why has bitcoin
not done that well i think that's yet to come and that's kind of the point of this entire episode
right is yes it's true they suppress the gold price yes it's true they're actually buying gold
themselves. Yes, it's true that there's been a divergence between gold, Bitcoin and the M2,
but we're not looking at the deep enough data. And Michael Howell is incredible for that with
his global liquidity index. So what have we learned? Gold is the canary in the inflationary
coal mine. People are running to the traditional safe haven asset. It might well be the case that
gold actually outpaces the stock market. Could we see some kind of recreation of the 1970s
stagflation? Maybe. If that was the case, do you want to be in the stock market or would you prefer
to own hard assets? And gold is signaling cracks in the fiat system. It's like we can see that
inflation isn't under control. We can see that you are buying gold yourselves. You know, that's
such an obvious thing. It's like, oh, yeah, yeah. Buy my currency, but I'm buying gold. It's like,
okay, that's sus. I don't believe you, right? I don't believe that you actually believe in your
own currency. But it's a global shift. And so easing rates in an inflationary environment with
all-time highs in the stock market and gold, well, more than anything else, this is a story about the
disintegration of the denominator of what most people price their assets in. Remember that. A
Roman legionnaire's beautiful outfit in Rome costs you the same amount in gold as a Savile Row suit
today. Okay? This is a crucial learning that I didn't really come across for a long time.
And because of the lens of sound money, you can then start to think about the difference between saving and investing.
By just owning gold or just owning Bitcoin, you can save because that's a form of money that has the attribute of store of value.
You don't take risk.
As soon as you move your Bitcoin out of self-custody or you don't have physical custody of your gold, you adopt counterparty risk.
So every equity that you own, every bond that you own, every physical piece of real estate that you own, every cassock car, it all carries counterparty risk, in my opinion, over and above Bitcoin in self-custody.
But it could well be the case that these powers that be in the central banking world are cottoning onto the power of Bitcoin as per what we've touched on today and the ability for that to basically leapfrog this power play of the BRICS nations reaccumulating.
gold. Yes, I should, you know, I'm saying to myself, become a paying subscriber to Michael
Howell. That's something I need to do more of is figure out, okay, what bits of economic data
are important to me? And ultimately, where does this all go? Do I want to buy gold? I'm going to
be fully open with you. I'm not buying any gold right now. Why is that? Well, I believe Bitcoin
is a superior version of gold. And I think that it will do better for me as a capital growth driver
and perform that store of value than gold, in spite of gold already doing 45% year to date.
That's a massive return. And congrats to all the gold bugs out there that have sat patiently on
the sidelines for a long time, predicting all these problems, investigating why the credit-based
monetary system is inevitable in its failure. And here we are, gold's ripping, good for them.
So would I consider a small stash of gold? Yes, of course. For emergency situations,
I'd want to take self-custody of it myself.
Again, this episode is making me think,
okay, Jake, you've got to get through that.
But again, for the capital growth,
Bitcoin is the play.
Now, Bitcoin's crossed the Rubicon
as an international and institutional asset,
as Mr. James Check likes to point out.
We should follow that.
Pay attention to it.
Others are taking notice.
The institutions are buying.
There's no doubt about it.
Price your portfolio in ounces of gold
and also price it in Bitcoin,
something I do it really makes a lot of difference because each week instead of
seeing just a dollar figure or a pound figure you get a Bitcoin figure you get an ounce figure you like oh well well that didn move too much Well that actually gone up Do you know what I mean You get a different feel and you measuring value in different ways
What I definitely don't want to be doing right now is selling Bitcoin to buy gold.
That would be a real mistake.
And James points that out brilliantly in his newsletter as to why Bitcoin lagging versus
gold and M2 is actually not such a big problem.
But what do you think?
What are you doing with your money?
I'd love to hear from you. Are you just quietly, calmly staying humble and stacking sats?
Or have you been buying some gold? And if you did buy some gold, did you buy a derivative of gold?
Do you own some kind of claim on a piece of physical gold somewhere? Or did you actually
take in hand coins? And do you have a safe somewhere? Obviously, don't tell me the exact
storage location of your treasure, but I'd love to understand what makes sense for you.
And as I've been through all this information today, a lot of stuff has become more crystal
clear for me. And it's really that idea of like, when you're playing around in the gold market,
and you're playing around in the equities market, you're still playing on someone else's playing
field. And that's where Bitcoin as a system of rules, not rulers, is so compelling from an
investment and wealth protection perspective. Now, if you enjoyed this episode, I'd love to
hear from you. Reach out on NOSTA, send us some zaps, give us a boost on Fountain. I'll of course
link all of the resources and research I've done for today in my show notes. My email, hi at
jakewoodhouse.io. Always reach out with any questions and I'd love to hear from you. So
thanks so much for tuning in. Really appreciate your time.