For the first time in history, central banks around the world are buying less United States debt and more gold. Gold has just overtaken US treasuries, which are loans to the US government, as the world's top reserve asset.
Countries worried about the health of the US government are moving wealth out of the United States:
- France pulled all of its physical gold out of the US Federal Reserve, and Germany is considering doing the same.
- Hong Kong launched a way to buy gold priced in Chinese yuan instead of dollars.
All of it matters because the dollar is a fiat currency. That's money backed by a promise that it has value, not by physical gold.
The promise holds up as long as people use the dollar. When fewer countries want it, the dollar loses value, and that shows up in the prices you pay.
When Jaspreet polled his audience on their biggest economic worry, the dollar losing value came out on top. He's breaking down how to invest around that in a free live workshop on September 29, based on what he and his firm are doing with their own money.
Countries Trusted US Debt Until the Bill Hit $40 Trillion
Reserve assets are the savings a country's central bank holds. For decades, countries kept theirs in US debt because it was considered a very safe investment.
That's changing now that the US owes over $40 trillion in national debt. Countries that no longer trust that debt want an alternative.
Nixon Turned the Dollar Into a Fiat Currency, and Trust Left With the Gold
Back in 1971, the dollar was on the gold standard, meaning it was backed by physical gold and the two were connected one to one. At the time, 33% of the world's reserves sat in gold, 20% in US treasuries, and 30% in US dollars, and the euro didn't exist yet.
On August 15, 1971, President Richard Nixon took the dollar off gold "temporarily." He told the country the move would stabilize the dollar and that it would be worth just as much tomorrow as it was that day.
The real reason was debt. The government owed so much it was on the verge of defaulting, and leaving the gold standard let it print an unlimited amount of money to pay its bills.
What Inflation Did to Trust in the 1970s
Then came the inflation of the 1970s. Inflation is when prices rise and each dollar buys less, and the 1970s brought the most of it in modern history, more than the pandemic years did.
People lost trust in the dollar and in treasuries. Central banks and governments wanted physical gold instead, and gold became a strong store of wealth around the world.
By 1980, US treasuries had fallen to 15% of world reserves and the dollar had fallen to 15% as well.
The Fed Saved the Dollar, and Treasuries Won Again
In the 1980s, the Federal Reserve jacked up interest rates to double digits, almost 20%. That created a deep recession and very high unemployment, but it saved the dollar.
Trust returned to the dollar and to US government debt. Gold shrank to 11% of world reserves, treasuries climbed to 30%, the dollar to about 28%, and the euro, which now existed, took 17%.
Countries preferred treasuries for a simple reason: a bar of gold sitting in a vault pays you nothing. Treasuries are backed by the US government and pay interest, so governments got richer as long as those treasuries held their value.
Fiat Currency Is Losing Ground to Gold Again in 2026
In 2026, gold is back up to 27% of the world's reserve assets. US treasuries have fallen to 22%, the dollar to 20%, and the euro to 15%.
| Reserve asset | 1971 | After the dollar recovered | 2026 |
|---|---|---|---|
| Gold | 33% | 11% | 27% |
| US treasuries | 20% | 30% | 22% |
| US dollars | 30% | 28% | 20% |
| Euro | Did not exist | 17% | 15% |
Why are these currencies falling? National debt.
None of them are backed by physical metal, so nothing stops a government from printing more. When a government spends money it doesn't have, each dollar loses value.
The trend picked up speed after the pandemic. Trillions of dollars were printed, people felt rich even though no new wealth was created, and the bill came due as inflation.
So countries want assets that grow, or at least don't lose value. To them, gold looks safer than dollars or US debt, because they might get paid back in dollars that are worth less by the time the money arrives.
A 120% Mortgage Explains America's Debt to GDP Ratio
Say you want to buy a $500,000 house and you get a $400,000 loan. Most people would call that fair: 20% down, an 80% loan, and no big deal if you can afford the monthly payments.
That's an 80% loan-to-value ratio, the size of the loan measured against what the house is worth. Now flip it: you don't have $500,000, and you don't even have $100,000 for a down payment.
You ask the bank for all $500,000, plus money to renovate the basement, buy new furniture, and cover the moving costs. You walk out with a $600,000 loan on a $500,000 house.
That's 120% loan-to-value. If you can't make the payments, you're underwater, and the bank can't get its money back because you owe more than the house is worth.
The US government's debt works the same way, except the collateral, the thing that backs the loan, is no longer a house or physical gold like it was before 1971. It's the strength of the US economy, measured by GDP, a number that counts all the spending in the economy.
| 2000 | 2026 | |
|---|---|---|
| US economy (GDP) | $10.2 trillion | $32 trillion |
| National debt | $5.7 trillion | Just over $40 trillion |
| Debt to GDP ratio | About 55% | About 125% |
The economy grew a lot in 26 years, but the debt grew much faster. At 125%, the US is underwater on its debt relative to the size of its economy.
That's why countries and individual investors are getting uncomfortable lending to the US government. They see a borrower that's already underwater and still printing, and printing means more inflation.
Freezing Russia's Assets Made Fiat Dollars Look Risky to Other Countries
When Russia invaded Ukraine in 2022, it had assets stored in US dollars and US treasuries. The US didn't like the invasion, so it froze those dollar assets and Russia couldn't access them.
Other countries, whether or not they agreed with Russia, didn't like the idea of the US punishing a country by freezing its assets. Some started asking if they should hold physical gold instead.
In his interview with Tucker Carlson, Vladimir Putin called using the dollar as a political weapon a grave mistake that dealt a blow to American power. He noted that even US allies are downsizing their dollar reserves, and that freezing assets and restricting transactions sends a signal to the whole world.
Fiat Currency Only Has Value if People Want to Use It
The more people who keep their savings and wealth in dollars and transact in dollars, the more the dollar is worth. A stronger dollar makes your life cheaper, because groceries, cars, and electronics all cost less.
When people lose trust in the dollar, that piece of paper buys less and prices go up. Your paycheck doesn't stretch as far, and your savings don't buy as much, because you're holding paper that fewer people want.
US Allies Are Taking Their Gold Home
Countries aren't just hesitant to save in dollars. They're getting hesitant about keeping their gold in US vaults.
In 2026, France, a US ally, pulled its physical gold out of the Federal Reserve's vaults to hold it at home, and there are now talks of Germany doing the same.
The reason is trust again. Storing gold in the United States was a way of saying you're the strongest economy, the strongest empire, and the strongest military, so we trust you with our wealth.
More countries are now saying the uneasiness has changed their minds, and they'd rather keep it themselves.
Venezuela showed why that matters. In 2019, with its economy struggling, it asked the Bank of England for its physical gold back, and England said no.
So when France or Germany moves gold out of the US, it's usually because they worry something bad could happen. They don't want to be locked out of their own wealth.
The Petrodollar Deal That Propped Up Fiat Money Is Running in Reverse
For the last 50 years or so, gold anywhere in the world was priced in US dollars. Even when you bought gold, the anti-dollar asset, the trade was priced in dollars, settled in dollars, and ran through dollar systems.
The dollar has been here before. When it left the gold standard in 1971, people asked how a piece of paper with nothing behind it could hold value.
The answer arrived in 1974 with the petrodollar, a system where buying oil anywhere in the world meant buying it with US dollars. It worked through a deal with Saudi Arabia: the US would protect the kingdom, and Saudi Arabia would make sure everyone bought oil in dollars.
Then in 2024, Saudi Arabia made a deal with China to sell oil for yuan instead of dollars.
Gold is following the same script. Pricing every gold trade in dollars helped hold up trust in the dollar for decades, and that's what is starting to shift.
In July 2026, Hong Kong launched its own gold settlement program, the plumbing that finalizes a trade, so buyers can purchase physical gold with the Chinese yuan instead of the dollar. Fewer people needing the dollar means less trust and faith in it.
Countries Are Leaving Fiat Currency for Gold, Not the Yuan
A lot of investors worry the Chinese yuan will overtake the dollar as the world's reserve currency, the money the rest of the world saves in. In 2026, the yuan makes up approximately 2% of the world's reserve assets, so it's not a huge player.
Countries are moving away from the dollar, but not necessarily toward the yuan. They're moving to gold, because they want something more stable than the dollar.
Based on all publicly recorded data, the United States is still the number one holder of physical gold in the world.
Economy vs. Debt: The Only Question Left for Fiat Currency
The bigger question is what happens to the value of the dollar, and that comes down to which grows faster, the US economy or its debt. For decades, the debt has won.
If the economy blows past the debt over the next decade, a lot of these worries fade. If the debt keeps growing faster, they get a whole lot worse, and that answer changes where the biggest investment opportunities show up.
That's the question Jaspreet is going deep on in his free investor workshop on September 29. He's running it twice that day, once at 10:30 AM ET and again at 8 PM ET.
If You Think the Debt Wins
If you believe the government keeps spending and the economy can't keep up, you're really worried about inflation. The common debasement assets, meaning assets investors buy to protect against a currency losing value, are gold, silver, and Bitcoin.
Silver is the most volatile of the three, meaning its price swings the hardest, and Bitcoin is also extremely volatile, so investors in either can get hurt by big swings. Gold is the more traditional choice, the one central banks are buying, and it has been hard money, money that holds its value, for centuries.
If You Think the Economy Wins
If you believe the government contains its debt, or the economy grows faster than the debt, then you want to own the economy. That means American assets, something like the S&P 500 or more US stocks, so you own a piece of the growth.
Nobody knows what the future holds, and none of this is a recommendation to buy anything. The point is to understand what's happening so you can think like an investor and allocate your money with the right plan.
