Just like QE! What would a Trump gold revaluation shock look like? On February 3, Trump’s new Treasury Secretary Scott Bessent said that “over the next 12 months we will be monetizing the asset side of the U.S. balance sheet.” These comments, against the backdrop of the U.S. government funding a new sovereign wealth fund, prompted Gillian Tett of the Financial Times to suggest that growing speculation about a gold revaluation may be behind the surge in gold. “The value of U.S. gold stocks in the national accounts is currently only $42/ounce,” she said. “But informed observers believe that at current prices ($2,800/ounce), $800 billion could be injected into the U.S. Treasury General Account (TGA) through repurchase agreements. This would likely reduce the need to issue large amounts of Treasury bonds this year.” (Technically, it is, but in reality, given that the U.S. government spends more than $7 trillion a year, the “benefit” of doing so would not be enough to cover two months of spending.)
In any case, panic is spreading throughout Wall Street, believing that the value of gold could suddenly be revalued by about 70 times, to the extent that Mark Cabana, Bank of America's top Federal Reserve expert and former New York Fed staff member, was also invited to express his views on whether the Treasury would really shock the world by allowing gold to 'float.'
Cabana wrote in the article (Monetization of U.S. Assets and Gold Revaluation) that, although he acknowledged he does not yet know the details of Bessent's plan, it may include non-traditional financing options for the Treasury.