So what do you do with the gold? An analysis

There's a lot of talk about the market's impending crash. After all, gold is up like crazy. At the same time, stocks are up, bonds are up, and crude is down.

Those are a lot of conflicting signals all at once. Together, they either mean that the global financial system is in an unprecedented "golden age", or that it's right at the tip of a major, major crash. And while everyone would like to believe that "all is well", it'd take a leap of faith to buy that story, considering most of the growth that is being seen in the global markets is on the back of an extremely concentrated bunch of companies directly or indirectly dealing with AI and data centre operations (according to an analysis, absent data centres, US GDP grew only by 0.1% in H1 of 2025).

What makes it even harder to believe the "all is well" spiel is that US' debt spiral isn't a secret for anyone. According to Mr. Musk (and Mr. Dalio, and Mr. Many Smart Guys), the US' debt situation is unsustainable, and it's only a matter of time when someone with a lot of leverage cracks open and brings the entire system down. Whenever that happens, it's not just recession we'd be looking at. It'd be something like the "great depression", say these gentlemen. Reducing US' debt deficit was amongst the top reasons why Mr. Musk got involved in politics and DOGE. But even after all his trials and tribulations, what did we get? Here's what Mr. Musk said as he left the world of politics:

"The government is is basically unfixable. If AI and Robots don't solve our national debt, we're toast". Not very inspiring.

And finally, there's China. The Mckinsey types sold US out to China. With the whole offshoring revolution, they shamelessly made money in the short term, but hollowed out an entire country and economy from the very core. So while US wishes it had more leverage in the global play against the Dragon, it really doesn't. US doesn't "make" anything, and while its attempts to bring back manufacturing of critical things like Pharma APIs, Chips, et al are laudible, they all feel like it's 'too little, too late'.

So now, when US barks, China bites. And it's embarrassing to see how US tries to be the big bully, when all it has for leverage is its domestic consumption market (which is sadly totally dependent on China for supply).

So clearly, there are a lot of cracks in the story, and while it's still standing straight, everyone knows it's all quite fragile. All is definitely not well. The question then remains, what do you do with the gold?

My answer is this. As Mr. Taleb says, it's futile to try and "time the market". You can't say exactly when it'll all crash, all you can do is keep yourself in a position where you can benefit from the crash, whenever it happens. How do you do that? Add gold.

When everything falls, including USD, only gold will stand. If history is our guide (see chart), only when markets have bottomed out is when money will exit gold and go back into the system. That's my prediction.

Price of gold against inflation adjusted USD since 1971. With systemic crises highlighed.

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