The great fiscal fire drill: Gold’s relentless march through the debasement decade

Every few years, the market rediscovers an ancient truth: gold doesn’t glitter—it endures. It doesn’t promise yield or innovation or anything remotely “new economy.” It simply refuses to die. And in 2025, as traders stare into the fiscal bonfire of the modern world, that stubborn endurance is starting to look less like nostalgia and more like a survival trait.

When people call me asking why gold’s going up—old clients, new punters, even the golf-course crowd—the answer I give is brutally simple: too much debt chasing too little trust. The world’s running from one fiscal fire to another, and gold, ever the stoic, just stands in the middle of the smoke, unburned.

Something snapped in 2022 when Russia rolled tanks into Ukraine. Before that, gold moved like a shadow of real rates: down when yields rose, up when they fell. But that relationship broke—violently. The old dance between gold and the 10-year real yield lost rhythm. Central banks in the emerging world, freshly paranoid about seeing their reserves frozen like Russia’s, began quietly shifting their hoards from digits to metal. Not for profit—out of self-preservation.

Still, that wasn’t the big bang moment. The true ignition came later, in 2024, when gold began climbing in earnest. Tariffs, tantrums, and the slow realization that the fiscal foundations of the West were cracking under their own weight—those became the accelerants. And by 2025, what we’re witnessing is less a speculative trade than a structural migration out of paper promises.

This year’s rally came in two decisive “steps.” The first in April, when the world’s trading system started looking like a casino that lost its dealer. Tariffs on everything from chips to crude turned global commerce into a policy knife fight, and gold became the last asset left that didn’t have a counterparty. Then came the second leg—Jackson Hole—when Powell, with his signature blend of priestly calm and plausible deniability, all but signaled that the rate-cutting season had reopened. The market heard gospel and responded with gold buying so aggressive it bordered on the devotional.

What’s most striking is not just the ascent—it’s the discipline of it. Since late August, gold’s been climbing in a near-straight line, unfazed by a stronger-than-expected Fed meeting and utterly indifferent to the noise around rare earth skirmishes with China. Even the dollar’s steadiness hasn’t dimmed the metal’s glow. That tells you this isn’t about “dollar weakness” anymore—it’s about currency exhaustion. Every G10 note is now being questioned. The “global debasement trade” isn’t some fringe slogan—it’s the quiet panic of capital realizing that fiscal arithmetic no longer adds up.

Because look around: debt-to-GDP ratios are brushing against the stratosphere, and the so-called safe havens—Germany, Japan—are watching their long bonds revolt. Even Switzerland, the last port in this storm, is a boutique shop with limited inventory. The safe havens are shrinking, the debts are swelling, and the balance sheets of nations look like the morning-after ledger of a gambler who lost track of time.

So who’s really buying here? It’s tempting to dust off the old “central bank bid” story, but this leg feels different. The anecdotes about dusty central vaults hoarding bullion are romantic but dated. This rally smells more like real money—the kind that reads fiscal projections and sees inflation not as an event, but as a strategy. Investors are starting to price in what policymakers won’t say out loud: debt will be inflated away.

That’s the quiet genius of gold. It doesn’t need to know who’s right or wrong—it just measures who’s scared. And right now, the fear isn’t about war or rates or even growth. It’s about credibility. The entire monetary system is whispering, “Don’t worry, this time is different,” while the balance sheets scream otherwise.

Gold’s rise, then, is not a bubble—it’s a referendum. On fiscal honesty. On monetary restraint. On the idea that the world’s reserve currencies are still “safe.” Traders sense the shift instinctively: the old order is losing gravity, and gold, once again, is where the world parks its disbelief.

So yes, gold’s going up because there’s too much debt in the world. But that’s only half the story. The rest is psychological—a slow, collective realization that every government is playing good cop and bad cop with its own currency. And in that routine, gold has become the only honest witness left in the room.