By Charlie Garcia
MarketWatch.com, New York
Thursday, August 21, 2025
Federal Reserve officials including Chair Jerome Powell are in Jackson Hole, Wyoming, this week with a suspicious term paper: the central bank’s Aug. 1 study on how broke countries revalue gold to pretend they’re not broke.
Two weeks after that study came out, Treasury Secretary Scott Bessent posted on X about "budget-neutral" ways to buy bitcoin.
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In Washington, D.C., "budget-neutral" means "we found money we swear we didn't have." Even a child could connect these dots. Start with the Fed's study, titled "Official Reserve Revaluations: The International Experience":
Basically, it's "Gold Revaluation for Dummies." The paper looks at how Germany and a few other countries pulled this trick.
And buried in a footnote, a bill sponsored by Sen. Cynthia Lummis, a Wyoming Republican, to use gold revaluation to bankroll a U.S. strategic bitcoin reserve. Makes perfect sense: Use the proceeds from admitting one lie to fund the next revolution.
Taken together, when the Fed publishes papers citing congressional bills about policies the Treasury denies, we're watching the Mar-a-Lago Accord take shape. It's a U.S. dollar devaluation without sending out the invites.
In practice, here's the beautiful chaos: The Fed publishes what Treasury denies. Congress writes bills the White House won't touch. Everyone's preparing for something nobody admits exists. It's like watching your spouse Google "divorce lawyers" while insisting your marriage is fine.
Time for the math that gives Fed governors night sweats. Gold on America's books: $42.22 an ounce, the price in 1973, when you could buy a Ford Mustang for $3,000. Today gold trades close to $3,400. America shows $11 billion on its balance sheet when it should be $874 billion -- off by a factor of 80. Try that on your taxes and you'll get 20 years to life.
This $863 billion gap is bigger than Denmark's gross domestic product. America could buy Denmark and Portugal -- annex both Vikings and explorers -- and still bankroll Finland's sauna habit. But nobody says a word, because if they did, they'd have to admit the U.S. dollar has lost 98.7% of its value against gold.
Enter President Donald Trump and Bessent. Trump wants a U.S. sovereign wealth fund funded and taxes untouched. Bessent floats "mobilizing the asset side of the balance sheet," which functions like a Rorschach test. Gold bugs heard "we'll reprice Fort Knox from $11 billion to $874 billion." Bitcoin bros heard "digital reserves will be funded with found money."
Last March, Bessent was denying the premise. "We're not revaluing gold," he told Bloomberg. "That's not what I had in mind." In Washington that's not a denial; it's a rain check.
Then, five months later, the Fed releases a guide to revaluing gold. Central banks don't publish primers on options they're not eyeing. It's like the Pentagon issuing "How to Bomb Iran" as a coffee-table book.
Bessent's Aug. 14 tweet revealed everything: Trump wants 1 million bitcoins, exactly what the Lummis bill proposes, to make America the world's "crypto superpower." The U.S. government already has 200,000 bitcoins from seized assets and needs 800,000 more. The cost: roughly $92 billion. Where does that come from? In the fiction between gold's book value and reality, with enough left to seed the sovereign wealth fund Trump ordered last February.
What terrifies them isn't the math. It's admitting the original sin: Nixon lied. He killed Bretton Woods claiming that the Fed's steady hand would replace gold's discipline.
The Watergate tapes show Nixon ordering that same Fed to "goose" the money supply. Since then the dollar has lost 98% of its value under the central bank's "steady hand." Every Treasury secretary since has protected this lie like they would a state secret. Admitting it would be like the pope admitting there's no God. Some lies are just too big to fail.
That lie now has run out of road. The U.S. debt bomb is detonating: National debt just hit $37 trillion, with another $5 trillion authorized. The dollar is down 11% so far this year -- its worst showing since 1973.
Funny thing about 1973: That's when the U.S. revalued gold. Dollar crashes, gold gets repriced. It's not a coincidence, it's a pattern. The Fed knows it, which is why it just published that instruction manual.
Here's the beautiful part for our enemies: China and Russia, which have been hoarding gold like doomsday preppers, win either way. If the U.S. revalues gold, their reserves explode in value. America validates their anti-dollar strategy while making them rich. It's like underwriting your rival's victory.
Back in the U.S., this is where it gets ugly.
When governments admit to debasement, markets go insane. Rates jump. The 10-year Treasury yield could spike to 7% or higher.
Your adjustable-rate mortgage that seemed clever at 5%? Try 8%. That nice suburban house you can barely afford? Now you definitely can't.
And the ripple hits cash: Your savings would buy 30% less overnight. Every 10 dollars become seven. That's not a haircut. That’s a beheading.
Your 401(k) does that thing where you open the statement and immediately need three drinks.
Gold holders get rich. Everyone else gets poorer. Meanwhile, bitcoin goes so high Elon Musk posts about it from Mars.
Legally: The Constitution says only Congress can revalue gold. The president can't do it with a Truth Social post, though I'm sure he'd consider it. Lummis has a bill ready, but getting the votes to admit America has been lying about money for 50 years? In normal times, impossible. In a crisis, they'll pass it at 2 a.m. on page 1,847 of the "Emergency Save America Act" that nobody reads.
Politically: Expect nothing to change before the 2026 midterms. Admitting your money's worthless doesn't win elections. But in 2027, a debt-ceiling fight, a failed Treasury auction, any workday ending in "Y" could provide cover.
Trump will have his new Fed chair by May 2026, someone who understands "emergency flexibility"” But math beats politics eventually. The U.S. has $37 trillion in debt and an accounting fiction worth $863 billion. It's like owing the mob $37,000 while sitting on a Picasso you insist is worth $11.
What we're watching at Jackson Hole isn't coordination. It's a financial standoff. The Fed prepares what Treasury denies. Congress writes what the White House ignores. Everyone knows the $42.22 price is a joke but nobody wants to be the one who admits the emperor's gold is naked. They're all positioning for the crisis that makes confession inevitable.
Strip it down. The truth?
We're not hiding $863 billion. We're hiding that fiat money is a 50-year Ponzi scheme -- and new marks are getting scarce. The $42.22 gold price is the last fig leaf covering the fact that we've been playing monetary make-believe since Pink Floyd dropped "The Dark Side of the Moon."
Which brings us back to Bessent. He says we're not revaluing gold. And if you can't trust a man defending a lie that's off by a factor of 80, who can you trust?
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Charlie Garcia is founder and a managing partner of R360, a peer-to-peer organization for individuals and families with a net worth of $100 million or more. Email him at charlie@R360Global.com [5].
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