A bull market in gold: an anti-fraud movement amid the collapse of the international monetary system
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A bull market in gold: an anti-fraud movement amid the collapse of the international monetary system
Gold bull market—when the faith crack in modern money meets the ancient trust that has endured for five thousand years
Navigating Web3 tides with focused insightsOver the past two years, gold prices have surged significantly. Recently, spot gold rapidly broke through $4,400 per ounce after surpassing $4,000, setting a new historical record with gains exceeding 50% this year. However, since late October, gold has entered a pullback phase following its sharp rise.
Central banks of sovereign nations, institutional investors, and individual investors alike have all begun buying gold over the past two years, with some prominent investors showing particular enthusiasm for the precious metal.
"Money is naturally gold and silver," Marx's famous quote still resonates today. Gold is often regarded as true money or genuine wealth reserve. Yet, as the gold standard faded into history over a century ago, today’s gold price is denominated in fiat currencies issued by various countries. The value of this millennia-old asset has long been "determined by fate rather than itself"! Then who exactly are the forces driving gold’s wild price swings, and where lies the tipping point between real value and bubble?
In reality, it's not that the intrinsic value of gold has increased significantly, but rather that the value of modern currencies—represented by the US dollar—has been drastically eroding. Record-high global government debt issuance, massive central bank digital money printing to purchase these debts, asset shortages caused by excess liquidity, the United States' extraterritorial sanctions on overseas dollar assets breaching the底线 of modern financial civilization, and the unstoppable AI stock market bubble—all signal the scent of a postmodern financial crisis to more and more people. Or put differently, from the perspective of classical financial theory, the combination of fiat money printing machines and the dazzling narratives spun by AI giants increasingly resembles a form of "financial fraud." The feeling of being deceived marks the beginning of cracks in faith, and at such a moment, gold timely emerges as a comfort for financial classicism and conservatism, or strategically functions as a "monetary anti-fraud" hedging tool.
Is non-interest-bearing gold a "Ponzi scheme"?
Certainly, amid the strong upward trend of the current super bull market in gold, skepticism about its value has never ceased. Some even label it the biggest bubble and greatest scam in human history.
First, the biggest issue: gold pays no interest or dividends—it is a non-income-generating asset;
Second, because it cannot generate sustained net cash flows, it cannot be priced using classical asset valuation models. Classic finance textbooks define an asset’s price as the discounted sum of its future net cash flows—gold fails this criterion;
Third, since gold itself produces neither interest nor rent, its pricing relies entirely on capital gains—the profit from price appreciation. This model resembles the classic "pass-the-baton" Ponzi scheme, where current prices depend solely on expectations of even higher future prices. Isn't this precisely what defines a typical bubble?
Yet simultaneously, gold remains the quintessential "safe-haven asset," encapsulated in the saying "buy gold in times of chaos." Beyond that, gold is also a classic "inflation hedge," serving as the most reliable ballast for preserving wealth during periods of soaring prices. Most remarkably, gold is the oldest enduring symbol of wealth, recognized for at least five thousand years; it is also the most widely accepted form of wealth, transcending race, nation, region, and culture—an asset of supra-sovereignty and supra-civilization.
If we strictly define gold as a bubble in human civilization, then what kind of bubble is one that has lasted five millennia and gained recognition from billions? How can such a durable, hard bubble still be defined as a bubble?
Compared to gold, today’s monetary system resembles more of a "scam"
On the contrary, compared to tangible assets like gold, unregulated fiat currency systems may represent the largest bubble or "scam."
Global gold reserves are at least quantifiable, subject to objective hard constraints. In contrast, under today’s fiat systems, central banks can create millions, billions, or even trillions of new currency out of thin air simply by "hitting keys" on a computer (a core tenet of MMT). While legal and institutional checks nominally exist, whenever major crises arise, excuses emerge to bypass them—a phenomenon known in game theory as "dynamic inconsistency."
To date, the U.S. government has breached its debt ceiling over 100 times, accelerating past $37 trillion in total debt, rendering its self-imposed debt limits a public farce with no real constraint on money or debt issuance. Markets treat this limit with indifference. After all, for fiat currency, central bank independence—or preventing the central bank from becoming politicians’ printing press—is the last line of monetary credibility. Yet the Trump administration's overt interference in and criticism of the Federal Reserve has deepened investor concerns.
The Trump administration recklessly tested this底线, while other countries were no better, imitating the same behavior. As the world's dominant and hegemonic currency, the dollar was supposed to serve as a "disciplinary anchor" for other nations’ currencies. But today, the dollar itself is fraught with uncertainty. To maintain exchange rate stability and take advantage of loose dollar conditions to combat domestic economic recession, other countries have also engaged in massive debt issuance and money printing. In a context of weak global economic momentum and intense international competition to find demand and "clients," competitive currency devaluations have become a subtler form of trade war. To investors, this again feels like a hidden scam.
From gold’s twenty-year bear market to today’s super bull run
Of course, faith in gold has not always been solid—it once endured a faith-shattering "lost twenty years."
During the early stages of modern finance, from the collapse of the Bretton Woods system in the 1970s to the dot-com bubble burst in the early 2000s, waves of globalization and democratization, coupled with the internet tech revolution and Wall Street financial innovation, instilled great confidence in human progress and the modern financial system. Confidence grew in disciplined fiscal and monetary policies, strong Federal Reserve independence, and even budget surpluses—persistent confidence eventually became faith. The rise of dollar faith coincided with the demise of gold faith.
After the dissolution of the Bretton Woods system, gold experienced a brief period of rapid "rebalancing" or "repricing" (rising from $35 to $850), only to enter its longest bear market: nearly two decades of decline from $850 to $252—a 70% drop. These twenty years marked the golden age of America and the dollar, but the darkest era for gold.
Today, the world’s political, economic, and financial environment appears completely reversed from that bear market period. The bear market era was characterized by triumphant globalization, the integration of resource-rich Russia and populous China into the global trading system, independent technocratic leadership at the Fed under Volcker and Greenspan adhering to monetary rules, the end of the Cold War, and rising universal ideals like "the world is flat" and the "global village."
Today, anti-globalization rhetoric is rampant, trade wars rage on, great power rivalry and geopolitical conflicts intensify, nationalism and racism spread, far-right ideologies surge globally, the U.S. leads central banks worldwide in competitive "keyboard-pounding" money creation, the international monetary order descends into "ritual collapse," and floods of money and debt erupt across the globe.
In such an era of intense contestation, we must re-examine the foundational assets or ultimate anchors of human wealth. The essence of bubbles lies in faith—the reason bubbles persist is that faith persists. And once faith wavers—even without collapsing—the impact on the value system will be seismic.
The gold bull market reflects a reckoning with the modernity crisis in today’s monetary and financial system
If people perceive "fraudulence" in modern money and finance, how can they protect their fragile financial wealth? Particularly for central banks managing national assets worth trillions of dollars, if they recognize the insecurity of dollar-denominated assets, what anti-fraud measures will they take to safeguard national financial security? This subtle question arises: in an era when modern monetary and financial systems are so advanced, and financial innovators have created such a dazzling array of tools and products, why has a "vintage asset" from millennia ago suddenly come back to life, becoming an object of frenzied purchases by governments (central banks), financial institutions, and individual investors alike in recent years?
The super bull market in gold represents a phenomenon of "monetary regression" or "financial regression." Yet in a system where modern money and financial tools fail to provide security, what choice do investors have but to seek solace in the historical anchor of value and faith?
The "fraudulence" of modern money and finance is, of course, merely a tongue-in-cheek metaphor. We cannot reject modernity outright, but we must objectively acknowledge its inherent crises. Modernity inherently breeds instability (a core view of Minskyism); the history of the modern financial system is essentially a history of periodic modern financial crises. Unchecked seigniorage by hegemonic currencies, excessive extraction by financial capitalism, mass greed and frenzy, economists’ "this time is different" theories, and sensationalist narratives from social media all contribute to the illusory, "fraud-like" nature of modern finance. When more and more people grow concerned about this fraudulence—especially when central banks managing trillions in national wealth begin to worry—increasing allocations to gold, a supra-sovereign, supra-civilizational, and supra-historical asset with millennia of unbroken faith, becomes perfectly understandable. And the gold super bull market manifested through these investment behaviors can thus be seen as a collective global "financial anti-fraud" movement.
Of course, such a collective movement risks becoming irrational. Even the most radical gold bulls are likely awestruck by gold’s sustained price surge in recent years. Does this mean an anti-bubble movement has instead created an even larger bubble? I don’t believe so, because as long as the world remains in an age of great contention, the sense of security, trust, and ultimate value anchoring that gold provides will not waver. Gold remains a strategic-level "core holding" in any asset portfolio.
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