Posted originally on Dec 23, 2025 by Martin Armstrong |  

While all we have heard from the biased goldbugs who insist that the US will go broke and the dollar will crumble to dust, that is the oldest theory from the 1970s that has NEVER been correct for it is rooted in the 17th century idea of money must be backed by a commodity. That has been behind so many analytical theories that are just without any credibility. That is repeated continually with no empirical evidence historically to prove that is remotely true.

The coinage throughout the centuries tells a completely different story proving even the Austrian School dead wrong, which they misunderstood the debasement of Henry VIII of which Sir Thomas Gresham commented that bad money drives out good. That comment came during a period when there was no obvious superpower and all the currencies of the European states traded solely on their metal content. They NEVER looked beyond that period for if they did, they would have discovered that there was ALWAYS a premium to the the coinage of the superpower that was the financial capital of the world.

India was the source of spices and was rich in trade from the days of Greece which is why Alexander the Great attempted to invade India and failed. Here is a gold aureus imitation of a Roman coin of Septimius Severus where the gold content was greater than the actual Roman coin. India had the gold but they imitated Roman coinage because that was like the dollar today, seen as the superpower of the world. There was a premium to the gold because it was struck by Rome.

When Athens rose as the financial capital of the world after defeating the Persians, here too we see imitations of the Athenian Owls throughout the Mediterranean region. Even Egypt, which never issue coinage of their own like India, they too imitated Athenian Owls for the purpose of international trade.

Even going back to Macedonia, the coinage of Alexander the Great’s father  Philip II was imitated throughout Europe. It was of the same weight and again it carried a premium to the metal content.

Here is a half stater struck in Switzerland by the Helvetii at the proper weight again imitating the gold coinage of Philip II of Macedonia.

Indian imitations continued right up into 18th century when Venice was the financial capital of the world until Napoleon conquered it.

This constant nonsense that the dollar will crumble and that even entering World War III would bankrupt the United States, is all based on this unsupported sophistry that money must be backed by some commodity. The WEALTH OF A NATION is its people, and its productive capacity. Russia is the richest country in the world from a natural resource perspective, but it is not the financial capital of the world. Japan and Germany were destroyed after WWII yet they both rose from the ashes on the productivity of their people – NOT GOLD!!!!

A loaf of bread in 1929 was about 10 cents. Today, that is just under $2. So, obviously, a loaf of bread would be a great hedge against inflation. The entire reason silver and gold became money was because it was durable and that aspect enabled capitalism because suddenly with silver as money, it allowed the accumulation of wealth and thus capitalism unlike barley or cattle, which ultimately spoiled or died. All tangible assets are a hedge.

However, the third question comes into focus. Why did BITCOIN become popular? It is not a store of wealth since it fluctuates in value the same as everything else. Thus, I warned that it would never replace the dollar. It was the best money laundering instrument BECAUSE it was like gold insofar as it was durable unlike wheat or barley, but it was the same instrument if sold in Beijing as it was in New York. That is the character of both silver and gold. Even oil is a different grade depending on where it comes from.

Do not confuse the hedge against inflation vs the hedge against government. During the Germany Hyperinflation, everything tangible rose in value. When the new currency was introduced in 1925, it was backed by real estate.

The hedge against government is distinctly different from inflation. When there is war involved, capital flees from the region where there is war and under this condition the capital will convert to another currency and flee. That is when immovable assets like real estate are not the hedge for they may be destroyed and at best you are left with title to the raw land if your country wins. If your nation-state loses, those assets are gone to the victor.

Gold is movable and therein lies its value. The greatest risk is capital controls. When I was in the gold business, I had the incredible  opportunity to handle a rare Russian money skirt. It was entirely woven from gold wire and painted black. This was how gold was being used to flee the communists.

When their theory that the dollar would crumble after the fall of the gold standard in 1971, they came up with the excuse that the reason they were wrong was that the dollar was then the petrodollar because oil was being priced in dollars. Crude oil is less than 6% of world trade. The US trade of goods stands at 13% nearly double that of crude oil. But, it sounded good. It covered by their claims that the dollar would crumble to dust without gold. Then the Euro was going to displace the dollar. That has yet to ever materialize.

The capitalization of NYSE is greater than all the stock exchanges of Europe combined. The market capitalization of just the New York Stock Exchange (NYSE), at approximately $31.7 trillion in May 2025, is significantly larger than the combined capitalization of all European stock exchanges, which is estimated to be less than half the size of the total U.S. market coming in about $25.53 trillion in 2025. The entire U.S. stock market (including the Nasdaq) represents over 60% of the total world market capitalization. Yet the dollar is going to crumble because it is not backed by gold?

Now they are at it again with BRICS. Oh, BRICS will be backed by gold so the dollar will crumble to dust. Yet, not a single BRICS nation offers a market where I could pick up the phone and invest $10 billion. This sophistry is just amazing. Even Chinese provinces borrowed in dollars. The third world countries go to NYC to borrow in dollars because that is where the capital markets are today just as it was London before WWI. They refuse to examine why their theory has been wrong each and every time. They refuse to understand what is the true wealth of any nation – its people and productivity enhanced with the freedom of capital to invest.

I have warned that war in Europe is inevitable. Those to think it will not happen because it would be suicide and the EU with the UK is broke mis the entire point. Europe is collapsing because of his highly Marxist control. This is why they are shutting down freedom of speech and you are about to witness capital controls. When WWI and WWII took place, the capital fled to the United States. That is what made the USA the financial capital of the world.

I get called in behind the curtain because they know this is NOT my OPINION. Every time I have tried to beat my own computer, I have lost. They can try to prevent mainstream media from interviewing me because I refused to cooperate. When the CIA wanted my model after it correctly forecast the collapse of Russia in 1998, I offered to run any study they wanted. But I was told that they had to own it. I refused to turn over the code or build it for them. So they do their best to try to prevent these forecasts from becoming mainstream. All they have succeeded in doing is making them more desirable behind the curtain than perhaps they would have been concerning geopolitics.

Russia has no interest in the conquest of Europe. But Europe needs the conquest of Russia to survive. They will use any peace deal to stage NATO troops in the Ukraine and then claim that Russia violated the peace deal to justify war. If we get a peace deal, it should be in January to the first week of February 2026. I would not count on it lasting.