We start with two charts.
The first is GLD, the ETF that represents a convenient way for an American investor to own gold. Prices are in US dollars.
SPDR Gold Shares (GLD)
The second is GDE, a relatively new ETF launched by WisdomTree. It combines gold plus equity into a strategy fund.
WisdomTree Efficient Gold Plus Equity Strategy Fund (GDE)
By way of disclosure, as this is written, I have no personal investment position in either security. Note that could change at any time and without notice to readers.
Perspectives on Gold, Money, and Policy
(1)
In my second interview with fishing partner and longtime friend Chris Whalen, we discussed the issues of gold, China payments, CDS in euro, and US policy. Here’s the title and link to this 11-minute read of the transcript.
“David Kotok: China, the Dollar and Bretton Woods 2.0” | Institutional Risk Analyst
We call the Chinese Shanghai payments and gold warrant combined system “Bretton Woods 2.0.”
(2)
Next, here’s the three-minute quick take we made about gold and the repricing of the gold certificate currently on the books of the Federal Reserve with a value of about $42 per ounce. That number hasn’t changed since Nixon “temporarily” suspended gold-dollar linkage 55 years ago.
“Quick Take: Proposals to Fund the Social Security Trust Fund, and What We Shouldn’t Do” | Kotok Report, September 1, 2026
(3)
On August 28, Lyric Hale wrote about why she recommends using a repriced gold certificate to temporarily cover the Social Security Trust Fund shortfall. At the end of today’s piece, I will explain why I like Lyric’s idea but prefer a different approach. Lyric has been a guest at Camp Kotok, in a panel discussion there, and publicly expressed her affection for the experience. We miss her. Lyric, come back! See
“The Golden Years: Revaluing US gold to bridge Social Security reform” | econVue on Substack
Lyric wrote to me regarding our differing perspectives, citing her conclusion to the piece linked above:
The conclusion is probably the best summary (pasted in below), but I don’t think that your focus is on the Bitcoin Reserve, just the gold assets.
One thing I’d flag for your longer piece: I think your six-month calculation uses the wrong denominator. I’m not proposing that gold revaluation finance the roughly $2 trillion annual (deficit), $40 trillion cumulative federal deficit. I’m proposing a one-time bridge for OASI, whose annual cash shortfall is much smaller, specifically to buy time to phase in structural Social Security reforms without increasing federal borrowing.
So, I completely agree that it is temporary and that is the point. Gold buys time; it cannot solve the fiscal crisis nor the Social Security deficit. “Created out of thin air” is different from monetizing an existing sovereign asset that has already appreciated dramatically. I guess the real question is what is the alternative? Social security cuts are politically kryptonite.
All best,
Lyric
Conclusion
Revaluing US gold holdings is of course a one-time boost to the balance sheet and is no substitute for fiscal discipline. But used narrowly, today’s extraordinary appreciation in gold could help prevent an abrupt Social Security shock and buy time for structural reform. At the same time, preserving a long-duration Bitcoin reserve could give younger generations exposure to a very different form of scarcity and position the US favorably in a financial competition with China, which has largely excluded itself from decentralized digital finance.
How wonderful and useful it would be for Washington to take the W on the extraordinary appreciation of an asset it already owns and put that gain to work in three ways: helping assure the security of the golden years of its senior citizens, building a long-duration digital reserve for younger Americans, and strengthening the US position against its principal strategic competitor—without requiring any new federal borrowing.
Lyric Hughes Hale, Editor-in-Chief, econVue
Subscribe to econVue.
Kotok’s View
At our Camp Kotok gathering in Maine, we asked campers whether they expect that Congress will amend the price of the gold certificate on the Fed’s balance sheet. Half answered, “Don’t know.” The other half were divided, with about 1/3 saying yes. That is the highest percentage number of “yes” answers to this question in the history of the annual Camp K survey.
Let’s summarize the options about the gold certificate and repricing.
Option A. Congress does nothing.
Option B. Congress reprices to present market. That triggers a $1 trillion immediate transaction where the asset side of the Fed’s balance sheet goes up $1 trillion and the liability side goes up $1 trillion because the Fed deposits the newly created $1 trillion in the US Treasury’s general account at the Fed. Remember, the Fed is the banker for the US Treasury.
Under option B the Treasury could follow Scott Bessent’s instruction and retire $1 trillion of outstanding Treasury debt. With the annual federal deficit running about $2 trillion, that would absorb a one-time six-month debt issuance relief.
In my opinion, Lyric Hale’s proposal is an improvement on option B. Why? The Treasury moves the $1 trillion to the Social Security Trust Fund, and that postpones the looming 2032 “We’re gonna run out of money” deadline. When the Social Security Trust Fund receives the additional of $1 trillion, it immediately buys a $1 trillion book entry Treasury security, which means the newly created $1 trillion is right back where it would be under option B. By routing it through the Social Security Trust Fund, Congress accomplishes the classic political “kick the can down the road” maneuver — a failure to address a problem.
Option C (Kotok view). Congress grows up. And enough adults are elected to the new Senate and the new House so that they address the issue, revise and modernize formulas. Adults tackle the Social Security Trust Fund, the Disability Trust Fund and, while they are at it, the unfunded veteran’s disability benefits that the US has promised the folks who have worn the uniform of the United States military in service to our country. That is currently an unfunded liability run through the Hegseth-war-machine budget.
Option C requires adults. We certainly don’t have enough of them in the Congress now.
Under my option C, the revaluation of gold is higher than current market. If we use previous history for guidance, the change is like repricing in the1930s from $20 per ounce to $35 or in the 1970s from $35 to $42. We could “guesstimate” a price today of about $6500–$6700. That’s a guess about the future, and it’s probably low. I’ve seen estimates ranging from $6500 to $10,000 for gold priced in dollars. Remember that after Nixon reneged on America’s gold-exchange promise, the market settled out the gold price in the $90s, not at the official $42 level. Readers, please note that the higher an official gold price reset, the more money is in the hands of the US Treasury, created by a political act. If Trump is willing to give away $1.3 trillion in exchange for an election outcome, how much is the limit of his “stroke of the pen” gold price reset? My answer? “Only the Shadow knows.” For younger readers, that line originates from a famous radio drama, The Shadow, which ran from 1930 until 1954 and was popular at the time of the FDR gold price reset in the 1930s.
Under my option C, that law change could incorporate a way to amend the gold price annually to a formula like the Fed’s inflation target or the CBO’s economic real growth-rate estimate or something else. The key is NOT to give discretion to politicians.
Under my proposed option C, the money would be enough to fund the sovereign wealth fund (SWF) of the United States. Then, all these disparate assets being created by the Trump Administration could be removed from the federal budget and placed in the SWF. That means the Intel stock and the Venezuelan oil share and all the other assets, including confiscated bitcoins. The SWF needs an independent trustee board and an annual audit and transparency. It doesn’t need the private wheeler dealer stuff we read about every day.
That money belongs to the taxpayers of the United States. It doesn’t belong to the Trump kids or the Lutnick boys or any other political family members.
It belongs to you and me.
Political Postscript — A Quest for Responsible, Ethical Candidates
Readers often ask where the adult and responsible political candidate is and in which political party. My answer is there are some adults in each party, and there are plenty of despicable miscreants, too.
So I propose that we (Democrats and Republicans) start to think for ourselves; and when the various party leaders want party loyalty first, we tell them to “go to hell” and stop giving them money. I propose we make our own independent judgments about the candidate and not the political party.
Here are examples from my perspective. Readers must do their research and form their own opinions.
In Maine, Republican Senator Susan Collins is one of the four Republican senators who voted against the Trump tariff war, including the crazy Trump trade war with Canada. I respect Collins’ willingness to be independent and to join those colleagues like Senator Murkowski (or, in the past, the late Senator John McCain), to oppose Trump when Trump goes “off the rails” with his 2:00 AM screeds. Maine’s Democrats have made such a mess in their party so as to make this an easy one for independent thinkers. Disclosure: I have previously sent money to Collins even though I cannot vote for her because I cast my vote in Florida, not Maine.
Readers can review Susan Collins’ campaign website and her opponent Democrat Troy Jackson’s website at the links below:
In Florida’s 13th Congressional District, a retired US Army Brigadier General, Leela Gray, is running for a political office for the first time in her career. She has a distinguished military record; and after 27 years of army service, she subsequently studied law and graduated with an emphasis on constitutional law. This is a prestigious, high-quality congressional candidate. Leela Gray is running as a Democrat. Her opponent is a super-slick politician, MAGA and Trump acolyte incumbent whose claim to fame includes trying to get the federal government to chisel Trump’s face into the granite façade of Mt. Rushmore. That’s right. House Bill 792, introduced by Congresswoman Luna directs “The Secretary of the Interior to arrange for the carving of the figure of President Donald J. Trump on Mount Rushmore National Monument.” In my view, if we’re ever going to clean things up, congressional members like Luna must get voted out of office. The Luna bill wasn’t just a praise reference in some campaign rally. It was introduced legislation that would cause the federal deficit to expand by a lot of money to pay the contractors who would be hired to chisel the granite. Disclosure: I’m a registered Republican in Sarasota County, Florida, I do not live in District 13, so I cannot vote there. I have sent money to Leela Gray’s campaign.
The campaign websites for General Leela Gray and Florida Congresswoman Anna Paulina Luna (also a veteran) enable readers to form their own opinions:
Some may ask why I didn’t pick Florida’s US Senator Ashley Moody (appointed by Desantis) as an example instead of Susan Collins. Here’s why. Moody was the state’s attorney general at the time of the now infamous $10 million Hope Florida scandal. I don’t know what her answer is to that famous question from the Nixon era, “What did she know, and when did she know it?” CBS Miami reports that she ducked out of an event and didn’t answer that question. I may be a registered Republican, but my standards for governmental and ethical behavior come first, not my political party registration.
Disclosure:
The information posted on this website (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of David R. Kotok. David R. Kotok is an independent contractor. He may independently receive payments from various entities for consulting, advisory and board functions, speaking fees, book royalties, advertisements in affiliated podcasts, blogs, and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship, or recommendation thereof, or any affiliation therewith, by the Content Creator or by David R. Kotok.
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This content, which may contain security-related opinions and/or information, is provided for informational purposes only. Do not rely upon it in any manner as investment advice. It is not an endorsement of any practices, products or services. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.
Any charts provided here are for informational purposes only and should not be relied upon when making any investment decision. As always please remember investing involves risk and possible loss. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed are subject to change without notice and may differ or be contrary to opinions expressed by others. Information in charts has been obtained from third-party sources believed to be reliable; however, David R. Kotok makes no representations about the accuracy of the information.
