By Doug Casey
November 8, 2025
International Man: Gold has seen a dramatic rise recently. What do you think is driving this surge-inflation, geopolitical instability, loss of faith in fiat currency like the US dollar?
Doug Casey: The answer is all of the above.
First, inflation is not retail price rises, as most people think. The rise in prices is a consequence of inflation, not inflation itself. Inflation is the creation of excess purchasing media above the creation of real wealth. Inflation is caused by two things: the Federal Reserve buying assets and increasing its balance sheet, financing government debt by creating currency and credit. And the banking system creating money via commercial loans facilitated by fractional reserve banking.
Short answer: inflation has been a primary cause for gold's moving up not just over the last few years, but over the last 50 years.
Geopolitical instability? Absolutely. All the world's currencies, including the US dollar, are fiat instruments. If a government falls, historically, its currency goes with it. People are increasingly looking for some place to put their wealth and savings other than a fiat currency.
And this leads to the last thing you mentioned-a loss of faith in fiat currency itself. The cat is out of the bag at this point, and all over the world, there's a loss of faith not just in currencies, but governments themselves.
What can you do? You can buy real estate, of course, or you can invest in a productive business-but gold, and more recently Bitcoin, have been the big beneficiaries of this loss of faith.
International Man: Do you believe the dollar's global reserve status is at risk? If so, what could replace it-a gold-backed system, or something else entirely?
Doug Casey: There's no question that the dollar's reserve status is at risk.
Governments recognize each other's fiat currencies for what they are: the unbacked liabilities of bankrupt entities. And most world governments are, in point of fact, bankrupt.
That's most dangerously the case of the US dollar, the world's long-time numeraire. Why should the Chinese, or any other government, hold the currency of its adversary? The currency might be blocked, as it was for the Russians. It will certainly be inflated. Or might suffer an outright default. Governments don't trust each other, and they certainly don't want to use the unbacked liability of an often antagonistic or even hostile government.
The major export of the US since about 1980 has not been computers, or Boeings, or soybeans. It's been dollars. Every year, the trade deficit-the export of dollars-runs in the hundreds of billions. More recently, close to a trillion dollars per year. Those dollars outside of the US amount to liabilities of the US.
If foreigners want to dump those dollars, they're going to come back home to the US to buy real goods-shares of businesses, buildings, farmlands, what have you. When that happens, the amount of real wealth owned by Americans will plummet, and the amount of fiat dollars inside the country will explode.
A digital currency will aggravate the situation. At that point, money becomes just a computer digit controlled by the central authorities. If you think the situation is unstable now, it's going to become much more unstable as the world's governments go to centrally controlled digital currencies.
International Man: You've often said, "The dollar is an IOU nothing." Has that moment of reckoning finally arrived?
Doug Casey: Just because something is inevitable doesn't mean that it's necessarily imminent. But at this point, the government has really gone on tilt. It's completely out of control. I believe we're now at the edge of the precipice.
DOGE was just a bit of electioneering and marketing on the part of Trump. The interest on the $38 trillion acknowledged US debt will keep rising along with the debt itself. Regardless of what may happen with interest rates over the next year or two, in the long run, they're headed much, much higher.
Military spending isn't being cut. As we get deeper into World War III, it will go much higher. Welfare payments are the same. As the standard of living goes down, people will demand more from the government.
The situation is completely out of control. The US has become quite unstable. I was talking about a civil war ten years ago; now they're making movies about the prospect.
International Man: Some investors think gold's rally is overextended. You've said this is "only the beginning." What makes you so confident?
Doug Casey: As near as we can tell, there are about 7 billion ounces of gold in existence. The amount of gold is increasing by about 100 million or so ounces per year, or roughly one and a half percent per year.
There are 8 billion people in the world. If the amount of gold in the world were to be distributed equally among them, each person would only have three-quarters of an ounce of gold. As for the number of dollars in the world today-of course, it's very hard to say how many dollars there really are, depending on which measure of the money supply we're talking about (M1, M3, and others), or just dollars that are outside the US-in order to back the dollar with a fixed amount of gold and make it redeemable with a fixed number of dollars, it's probably going to take $25,000 to $30,000 per ounce of gold at present.
In fact, I suspect the next ploy of the government will be to raise the gold price to $15,000 or $20,000 an ounce, much as Roosevelt did in 1934, or Nixon in 1971. I don't doubt that they'll package a lot of BLM land into publicly traded stock and sell it, as well.
In the recent past, I've said that gold was reasonably priced relative to the price of food, clothes, and houses. It's about where it "should be." However, if the dollar is to be once again redeemable with a fixed amount of gold, it has to be much, much higher.
I don't think we have to worry about the gold market being overextended. The average person doesn't think about gold, doesn't own much of it, and is uninterested in it. The public is completely uninvolved in gold. One piece of evidence for this is that the premium of gold coins above the bullion price is still close to the lowest levels in history. But moving up.
Brief story: yes, gold has gone up a lot, but we're far from a mania in it-and it's going higher.
International Man: For the average investor, how should one position themselves in this environment-physical gold, mining stocks, royalties, or something else?
Doug Casey: Your savings should be in physical gold, preferably smaller gold coins in your own possession. That should be your foundation for savings-cash gold. Secondarily, you should have a good supply of gold stored reliably offshore.
The two things that we recommend are SWP in the Cayman Islands and the Perth Mint. There are others. But foreign exchange controls around the world are on the way, so it's very important that you get a significant amount of your wealth outside of your home country.
Mining stocks, relative to the price of gold-and relative to the price of other securities from every point of view-are very cheap right now. With all-in sustaining costs of mining about $1,500 per ounce industry-wide, and gold at around $4,000, companies that are in production are coining money.
Although the market doesn't seem to care, for reasons we've talked about in the past. Mining stocks are speculations that should play a major role in your portfolio. The safest way to capitalize on the success of mining stocks is through gold royalty companies, which are typically paid 0.5%, 1%, or even 2% of every ounce of gold that comes out of the ground-whether the company is profitable or not.
International Man: If we're truly entering what you've called "The Greater Depression," what role does gold play in surviving-and even profiting from it?
Doug Casey: The whole world is over-financialized today. That's indicated by the gigantic amount of debt that all entities carry. The average American is buried under mortgage debt, credit card debt, automobile debt, and student debt. Local, state, and federal governments all owe huge amounts of money. The same is true for many corporations.
Most of the money that's been made for the last couple of generations has been in the financial markets, not by creating real industry and real wealth the way Carnegie, Vanderbilt, and Rockefeller did. Notwithstanding the great advances in high tech, the real money is in financial engineering, not electrical, civil, or chemical engineering.
The whole world is over-financialized. You want to own real wealth as opposed to paper wealth.
As far as the Greater Depression is concerned, yes, we've been slip-sliding downhill for the last 50 years. It's been disguised by increases in technology and by taking on more debt, which amounts to consuming capital from the past and mortgaging the future.
Reprinted with permission from International Man.