America Pulled the Trigger

February 2022. Russian tanks roll into Ukraine, and Washington reaches for what it believes is its most powerful non-military weapon: the dollar.

A few keystrokes, and $300 billion in Russian foreign-exchange reserves are instantly frozen.

The message was clear: cross us, and we'll lock you out of the global financial system.

Central banks from Beijing to Brasília watched those frozen billions vanish from Russia's balance sheet.

They asked themselves one question: If they can do this to a nuclear-armed nation, what's stopping them from doing it to us?

The answer was nothing.

So they started buying gold. A lot of it. They bought like their economic survival depended on it.

Because it might.

The Great Central Bank Shift

According to data from the World Gold Council and the Federal Reserve, for the first time in 30 years, foreign central banks hold more gold than U.S. Treasuries as a percentage of their international reserves.

The institutions that anchor the global financial system, the very ones supposed to trust American government debt above all else, have quietly decided that a metal humans have mined and valued for 5,000 years is safer than a promise from Washington.

In 2022, central banks purchased 1,082 tonnes of gold, which was the highest annual total on record. In 2023, another 1,037 tonnes were bought, and buying has only accelerated since.

China alone added over 300 tonnes to its official reserves since 2022. And then you have countries like Poland, Singapore, Turkey, and India all stacking gold like it's going out of style.

Ironically, the opposite is happening.

Gold is coming back into style. Hard.

President Trump Just Raised the Stakes

Last week, President Trump announced that any country doing business with Iran will face a 25% tariff on all trade with the United States.

On the surface, it looks like standard sanctions enforcement. Iran has been under various sanctions for decades, but they've learned to work around the Western financial system.

They’ve been trading oil in yuan and settling transactions through alternative payment networks.

But this announcement isn't aimed at Tehran.

It's aimed at Beijing.

China imports roughly 14% of its oil from Iran. Chinese companies buy Iranian petrochemicals, plastics, and metals.

The trade relationship is substantial and conducted almost entirely outside the dollar system.

So President Trump's message is clear: Choose. Trade with Iran, or trade with America. You can't do both.

Here's the twist, though. China has been preparing for this moment for years.

The Weapon Designed to Protect America is Now Funding Its Biggest Rival

While American policymakers focused on AI, inflation, domestic politics, and related issues, Beijing built an alternative financial architecture.

The Cross-Border Interbank Payment System (China's answer to SWIFT) processed $24 trillion in transactions in 2024. Up 43% from 2023. Roughly double the volume from 2022.

Chinese banks have systematically reduced cross-border dollar lending in favor of yuan-denominated transactions.

Even the Federal Reserve published a report last year acknowledging this shift.

Meanwhile, China's commodity trade is increasingly settled in yuan. Oil from Saudi Arabia, copper from Chile, and iron ore from Australia.

The dollar's grip on global commodity markets is loosening, one transaction at a time.

And at the center of this parallel system sits gold.

Why Gold Works When Trust Breaks Down

We're witnessing the early stages of a monetary divorce.

On one side… the dollar bloc, consisting of the U.S. and its closest allies, using debt-based collateral to underpin their financial systems along with treasury bonds, which are promises backed by the full faith and credit of the United States government.

On the other side…an emerging bloc centered around China, using gold as the foundation for an alternative system.

Gold works for this purpose because it carries no counterparty risk. No government can freeze it with a keystroke. No central bank can print more of it.

It's the only financial asset of this size that isn't simultaneously someone else's liability.

When trust breaks down between nations, gold is what remains.

And a quick read of the headlines lately tells you that trust is breaking down fast.

Gold By The Numbers

Gold rose from roughly $1,800 per ounce in early 2022 to over $4,700 today. More than 160% in three years.

But the price alone doesn't tell the full story.

The ratio of gold to the U.S. Consumer Price Index broke out of a 45-year downtrend line last September.

What that basically means is gold is gaining purchasing power faster than inflation erodes it. That's not supposed to happen to a "barbarous relic."

Gold miners are outperforming the S&P 500 for the first time in over a decade.

A popular gold miners index I follow generated returns of 891% since February 2016, compared to 329% for the S&P 500 over the same period.

Silver is starting to outperform gold, which historically has been a sign that the precious metals bull market is entering its most explosive phase.

What we’re seeing is a structural shift in how global capital is being allocated.

What This Means for Your Money

I've written about sound money for years. Bitcoin. Gold. Silver. Assets that can't be printed, debased, or frozen by government decree.

Some readers thought I was paranoid. Others thought I was early.

Truth is, I was simply paying attention.

The weaponization of the dollar isn't some abstract geopolitical concept. It has direct implications for your savings, your retirement, and your family's financial future.

When central banks around the world reduce their exposure to U.S. Treasuries and increase their gold reserves, that’s a signal.

When China builds payment systems designed to operate outside American financial infrastructure, that’s a signal.

When President Trump makes it clear that access to US markets and its currency is conditional, and backs that up with the threat of tariffs, that’s a signal.

The signal: the monetary system you’ve known your entire life is changing, because American power is forcing the rest of the world to choose sides.

The One Thing You Can Do Today

I'm not telling you to sell everything and buy gold bars. That's not how this works.

But I am telling you to look honestly at your portfolio.

For most of my adult life, I was told to trust the system. Put your money in a 401(k). Buy index funds. Let compound interest do the work.

That advice made sense when the dollar was unquestionably dominant, inflation was under control, and the United States wasn’t using its financial system as an explicit instrument of geopolitical power.

We don't live in that world anymore.

Ask yourself: what percentage of your portfolio is in assets that can't be frozen, printed, or devalued by political decisions?

For me, that number is substantial, and my allocation is pretty simple.

Bitcoin, gold, silver, mining stocks, and metals stocks. Assets that exist outside the traditional financial system and connect to the real, physical world.

I'm not saying the dollar will collapse tomorrow.

In fact, I don’t see a competitor to the dollar anywhere close. I'm saying the insurance policy is cheap, and the house is showing signs of smoke.

The Bottom Line

President Trump's announcement of tariffs on Iran may or may not be implemented, but that almost doesn't matter.

What matters is the message it sends to every country on Earth: access to the dollar system is conditional.

President Trump is reminding the world that its markets and its currency are privileges, not entitlements.

Some countries will comply. Many won't.

Those who won't are building something new. A parallel financial system with gold and not Treasury bonds at its foundation.

The 2000s gold bull market saw prices rise eightfold.

That happened without the geopolitical dynamics we're seeing today. Without central banks actively fleeing the dollar. Without China building an alternative payment infrastructure.

This bull market could be bigger. And it's just getting started.

Ask yourself whether you'll be positioned to benefit when it continues rising.

Double D

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