The moment has arrived. Gold has dipped about 7% since the November 5th election of Donald Trump, with gold stocks, represented by the GDX ETF, sliding 10%. While many expect Trump to slash government spending, the reality is far different. Get ready for Reaganomics 2.0—supply-side policies powered by tax cuts, massive government spending, and deregulation designed to supercharge big business.
Back in Reagan’s era, this strategy worked well with a national debt of $900 billion. But today, the U.S. is grappling with a staggering $37 trillion debt. What happens when these big-spending policies are unleashed in this precarious financial environment?
The Debt Dilemma
Major trade partners like China and Japan have spent the past decade reducing their U.S. Treasury holdings. Meanwhile, the Cayman Islands—through what appears to be a quasi-government hedge fund—has become the fourth-largest holder of U.S. debt. This is essentially “shadow QE,” where private offshore entities step in to monetize Treasury debt, propping up demand and keeping interest rates low.
Trump’s economic team, led by Bessent, appears to be drawing inspiration from Japan’s Shinzo Abe and his “Three Arrows” policy: low rates, heavy government spending, and fiscal surplus goals. But there’s one key roadblock: Federal Reserve Chair Jerome Powell isn’t playing ball.
The Power Struggle at the Fed
Trump’s relationship with Powell has been contentious, with the Fed Chair resisting calls for deeper rate cuts. While it’s debatable whether a president can directly fire a Fed Chair, Trump may not need to. The Federal Reserve Board (FRB), not Powell’s Federal Open Market Committee (FOMC), sets the key rate of interest on reserves—the primary tool for targeting the federal funds rate since 2008.
Here’s where Trump’s influence comes into play. FRB members Christopher Waller and Michelle Bowman, both Trump appointees, already sit on the board. Democratic appointee Adriana Kugler’s term expires in January 2026, presenting Trump with another opportunity to install a loyalist. If other members like Barr, Philip Jefferson, or Lisa Cook step down early, Trump could gain even greater control of the board.
Bessent has even floated the idea of creating a “shadow Fed Chair” to align the Federal Reserve with the administration’s economic goals. He believes we’re on the brink of a “grand global economic reordering,” akin to the historic Bretton Woods agreement, and predicts this transformation within the next four years.
What It Means for Gold
With the debt ceiling showdown looming in January, Trump is likely to ramp up efforts to align the Fed with the Treasury. This could pave the way for issuing massive amounts of new debt while artificially suppressing interest rates by expanding the Fed’s balance sheet to purchase Treasuries.
Such a dramatic shift would fundamentally undermine the Federal Reserve’s independence—and could send gold prices soaring. Gold thrives on uncertainty, and these policies could light a fire under the precious metal’s value.
Position Yourself for Gold’s Next Bull Run
The recent pullback in gold prices presents a golden opportunity to prepare for the next leg higher. The Golden Portfolio, with its proven track record, is your ultimate gold investment. All three products have consistently outperformed relevant gold benchmarks.
It’s been over a decade since gold stocks had their last explosive rally. Don’t miss this chance to capitalize on the sell-off and position yourself for what could be one of the most significant gold bull runs in recent history.
The time to act is now. Prepare your portfolio for the golden era ahead.