FULL TRANSCRIPT: Luke Gromen on The Tucker Carlson Show

But gold can actually be moved around privately and stored privately.

I mean, there’s not a digital record of gold, and that leads to my question, which is, like, what the hell is going on with gold flows around the world? Gold physically moving from one country to another, why isn’t that transparent? This is public money. And this is the reserves of different countries owned by the public of those countries, and there’s no sort of transparent record of it. Am I missing something?

TUCKER CARLSON: The transparency varies. Right? So in the end, it isn’t very transparent.

LUKE GROMEN: That’s very how could a country move its part of its gold reserve to another country without telling its population?

TUCKER CARLSON: And the funny thing is no. But, like, is that outrageous, am I just missing something?

LUKE GROMEN: Well, they they they would say, well, we tell you. You just have to pay very close attention. Right? So you can look in the UK trade statistics. They show you how much gold is leaving London. They don’t want to advertise that, but there are times

TUCKER CARLSON: Do they tell you where it’s going and why?

LUKE GROMEN: The Swiss data are very, very good. They show you The Swiss data. Right. Well, Swiss data are always good.

TUCKER CARLSON: Yeah. The Swiss are very precise.

LUKE GROMEN: So you can you have an idea. But, again, when I say it’s transparent or not, those data, as long as what it is what they classify as nonmonetary gold according to IMF shipping classifications, we’ll call them, however they you know, industrial classification.

Nonmonetary gold gets recorded. Monetary gold, to your point, doesn’t have to be declared as it moves, is is is how I understand the rules. And so when you see the monetary gold movement, there is still very much an element of secrecy and nontransparency. And, yes, some of that is the public’s money, and it’s not being disclosed why it’s moving and and how much exactly you it’s it’s almost like it’s almost like the the the like being in in the movie Jaws, right, where early on, you know, there’s a shark out there, and you’d see the impact of the shark. And every now and then, you’ll get a glimpse of it, but you don’t really fully see the shark very often.

TUCKER CARLSON: Whenever you have secrecy, you have deception and fraud, period. Generally, that’s true.

LUKE GROMEN: The purpose of it, I would argue, privacy being different from secrecy. But, you something that should be disclosed as not is not disclosed for a reason. And so when you have huge movements, am I over you tell me if I’m overstating this, but there are now big movements of gold between countries right now. Correct?

TUCKER CARLSON: Correct.

LUKE GROMEN: And we’re not exactly sure why.

TUCKER CARLSON: Correct. And we don’t really know the volume, as you just said. And so someone’s getting rich and someone’s getting poor, but none of this is public. Like, smell scam afoot.

Gold as a Competitor to Government Currencies

LUKE GROMEN: You know, it’s one of these things where gold has long been the competitor to the dollar system. And once you start getting into competitors to government currencies, which are, as you noted, a very effective method of control. Right?

That’s why we use dollar sanctions, why we’ve been using dollar sanctions. Right. That quickly gets into the reason for I think at least some of the reason for the secrecy around gold as it relates to governments, which is, number one, is war or excuse me, as as Greenspan said that, you know, “The only currency that’s better than the dollar is gold,” and it’s been that way for a long time. And that’s that’s he said that in 2013 or 2014.

And so that, number one, is there’s a perception, right, where if you’re trying to be a manager of the dollar as the US government is, that is a perception you are trying to manage.

And so I think there’s some element of that. I think there are other countries that have been for example, the Chinese have been buying lots of gold. They have long said you can find it in in the WikiLeaks documents from 2009 that China’s buy buying gold to kill two birds with one stone is number one. It will build up and help internationalize the renminbi over time. And, also, the Americans and the Europeans, they specifically said, have historically tried to prevent gold from rising too much in order to increase the prestige and the attractiveness of their own currencies.

And so we’re buying gold for that reason. So you get into this gold is very much a geopolitical metal because when you think of it in those terms, if you’re China and you’re buying lots and lots of gold, as China has done at times over the last fifteen years after the great financial crisis, let’s be clear. That can be construed in certain circles in Washington and in Brussels and in London as a tax on those nations’ currencies. And so it it’s it it is in the interest of nations that might want to diversify from the dollar, from the euro reserves, which in which FX reserves primarily I want to check a number while you’re talking. Primarily denominated, and it it behooves those nations to have a level of secrecy around it as well.

So it’s that element of trying to manage currency systems from two opposite sides of the coin.

TUCKER CARLSON: Okay. So let me let me this is directly to your point. This is the Google result if you type in “which countries own the most gold.” Who’s got the biggest gold reserves in the United States?

Have you seen this list?

LUKE GROMEN: I I I have.

TUCKER CARLSON: I’m reading this to you because it’s just so clearly bullshit. It’s so clearly not true. So this is the in order of the countries with the largest gold reserves.

US one. Okay. Number two, Germany. Number three, Italy. Italy. Okay. It’s got an economy like the size of Ohio. France, Russia, China, Switzerland, Japan, India, Netherlands. You’re telling me that China is one, two, three, four, five, is number six, and India is number nine? That’s a lie.

The True Gold Holdings of Countries

TUCKER CARLSON: That’s just a flat out lie. Like, that is not the actual ranking. There is no you’re telling me France has bigger gold reserves than China?

LUKE GROMEN: And this is why when I say it’s a political and a geopolitical metal. Right? Because those are the official monetary reserves. Chinese have been bringing in thousand plus tons of gold every year. The Indians have been stockpiling gold for thousands of years. I mean, to their great credit. I’m not criticizing them.

TUCKER CARLSON: Oh, yeah. Yeah. The chart of gold in Indian rupees looks like Apple in dollars. It’s up and to the right forever. So I guess the only point I’m making again and again is that the heart of this incredibly important phenomenon, the movement of gold around the world, is a lie.

We don’t actually know what the statement of play

LUKE GROMEN: There’s not great clarity. No. Great clarity. Right? There’s massive lying, and again, whenever there’s massive lying, there’s going to be massive fraud.

The Mystery of Fort Knox

TUCKER CARLSON: Yeah, and there’s a reason for it. Right? There’s always a real reason for that to be. So Fort Knox is one of the places, the physical places in the United States where we’re told our gold is stored. Half maybe, supposedly, of our reserves or something. Yeah.

LUKE GROMEN: It’s I want to see. Yeah. There’s some there. There’s some in Denver. There’s some at this point. I don’t remember.

Fort Knox is the famous one.

TUCKER CARLSON: Yep. And, members of Congress, almost all of them with the last name Paul, have been calling for an audit of Fort Knox for just decades, and if you really press, it doesn’t look like Fort Knox has been actually audited for close to a hundred years since the 1930s.

LUKE GROMEN: I think that’s right. Stand open to correction. They said it was audited in the 1970s, but it wasn’t actually audited. It was like some of it was audited.

TUCKER CARLSON: Why is it so hard with the federal workforce, you know, including contractors, like 10 million people, to just, like, go through the contents of the vaults and weigh them and make sure that they’re not gold plated titanium and make sure they’re all there and then figure out who owns them? Like, why is that so hard? We’re told, “oh, that’s too complicated.”

Really?

LUKE GROMEN: No. I don’t think it’s anything to do to your point. It’s not complicated at all. I think it comes down to policy and that gold is a geopolitical metal.

The U.S. Losing Gold in the 1960s

LUKE GROMEN: And if you go back to, again, declassified documents of conversations and memos around a lot in the 1970s, and you’ll see some familiar names there, Volcker, Kissinger. Yeah. Weintraub, some of those types of names.

The US in the 1960s was losing a lot of gold. Right? The system was essentially dollar is pegged to gold $35 an ounce. Everything else is pegged to the dollar, and it started becoming clear as we got deeper and deeper in Vietnam and guns and butter with LBJ that we didn’t have the gold to cover our debt offshore at $35,000. And

TUCKER CARLSON: Were countries trying to redeem that?

LUKE GROMEN: They were. Yeah. We went from I want to say after World War II, we had 18,000 tons of gold, official gold, and by the time we got to, call it, ’71, we were down to the 8,100 we have today, and that’s where

TUCKER CARLSON: No way. We shipped out about 10,000 tons of gold to satisfy these deficits and physical gold.

LUKE GROMEN: Oh, absolutely. Like, “here are my dollars. Send me my bars.” Yeah. If I recall the story correctly, the French sent warships into New York to pick it up.

TUCKER CARLSON: Oh, yeah. No way.

LUKE GROMEN: Yeah. And we were sending, you know, if I recall correctly, an airplane a month to Riyadh with bullion, right, to settle gold deficits as we had agreed to with

TUCKER CARLSON: By the way, Saudi, one of the richest countries per capita in the world, is not even in the top ten for gold holders. Saudi owns so much gold. It’s just not on the official list. Sorry. I’m just again, I’m making the same point again, which is the numbers are lies. Right.

The U.S. Getting Gold Out of the System

LUKE GROMEN: But and I think the reason why the numbers are lies, why there’s not great clarity, why they manage the optics in the way they’re clearly managing the optics is you can go back.

Once we closed the gold window in ’71, Nixon said, “hey. No more gold. The dollar is now free floating.” And you can read from these declassified documents that the US very much had an interest in getting gold out of the system.

We didn’t want because there was a one one of the declassified documents in question, there was a proposal that was afoot in ’73, ’74 by the Europeans to revalue their gold to settle oil deficits. Right? Because Europe doesn’t have a whole lot of oil.

They were importing a bunch of oil. Oil had gone up a bunch in price, so they had a bunch of oil deficits. They were looking to basically revalue gold and then settle deficits with OPEC in gold. And the Americans in question, Kissinger, Weintraub, Volcker, this isn’t our interest.

This is not what we want. We want the Saudis not getting gold. We want them getting treasury bonds. And so right? The famous Bill Simon deal.

TUCKER CARLSON: And so I think I can’t believe they took that deal.

LUKE GROMEN: I think it might have been a gold or the lead type of deal at that point in time. You know, “we’ll give you not only you know, you take the gold, you take the lead, and the gold is we’ll provide you protection. We’ll provide you weapons. We’ll let you access to our markets.”

“And if you don’t do it, we’re going to regime change you. And, oh, by the way, we’ll give you maybe a sweetener on your” know, I think it’s very possible they were getting higher than market interest rates on the treasury bonds for decades as part of that deal.

TUCKER CARLSON: Who knows?

LUKE GROMEN: But What do you mean who knows? It’s it’s not something that’s ever been disclosed.

TUCKER CARLSON: But Well, how can we we we give country specific interest rates on

LUKE GROMEN: I think I have heard credible rumblings from people that were around then that part of that deal may have been the not not just countries, just Saudi, may have gotten a sweeter deal than other countries.

TUCKER CARLSON: How could but how can that not be disclosed?

LUKE GROMEN: It’s how you get a $10,000 wrench at Department of Defense. Wrenches don’t cost ten grand. It’s right? You’d they you move stuff around a little.

TUCKER CARLSON: This is why they’re always encouraging us to get mad at each other about race and the tranny stuff. You know what I mean? It’s like because the big things are just not even not even

LUKE GROMEN: Well, I you know, in fairness, I think, you know, it’s always about power and control. Right? It’s about control of the system. This was the dollar system. Clearly, ’71 was a default in the gold, and so we were trying to sort of get around this.

The Reticence to Audit U.S. Gold

LUKE GROMEN: And so I think sort of the original sin or, again, origin story of the refusal of wanting to even talk about or, you know, what is an audit, as it relates to audits of Fort Knox is once we close that gold window, I think that generation of leadership, ’70s, ’80s, didn’t want to talk about gold.

Going into audit it, brings gold back up and brings it back up that, “hey. We defaulted on our gold clauses. Like, twice in the past 80 years,” by the way, FDR defaulted on gold clauses too to the domestic Americans.

So I think the original origin story was about this reticence about is the gold there? Has it been audited? What is an audit? Has it been fully audited? Has it been fully assayed? All of the things you would think are pretty easy to do.

I think go back to that policy of petrodollar. We don’t want gold back in the system. The Europeans do. We don’t. This is the deal. We threw our weight around in the 1970s, and sending people into Fort Knox to show them we have the gold doesn’t help us remove gold from system.

TUCKER CARLSON: Ultimately, why do we want to remove gold from the system?

LUKE GROMEN: Control, and it’s easier to run deficits without tears.

TUCKER CARLSON: Sure. Because gold is an anchor in reality. Right.

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Gold as a Taboo Topic

TUCKER CARLSON: What’s so interesting boy, you’re you’re teaching me a lot. Thank you.

They don’t want to talk about gold, they haven’t since the default of ’71, which is never described, by way, as a default. And it was.

LUKE GROMEN: Well, of course, right. You’re not making good in your promise. It’s a default.

TUCKER CARLSON: And they don’t want to talk about gold. The US government doesn’t want to talk about gold. Ever since then, which is my whole lifetime, people who are interested in gold have been derided as, quote, “gold bugs.” And it just it just occurred to me, it’s it’s one of those phrases. It’s so devastatingly effective.

You’re like a you’re a nutcase. Yeah. You’re buggy. You’re crazy. You’re a bug house. Mental patient. And it reminds me so much of the term “conspiracy theorist.”

So CIA, possibly with the help of a foreign government, murders the president of the United States, and it’s super obvious that that happened in 1963, and nobody believes the Warren Commission, and it’s like, doesn’t make any sense actually. So they start calling anyone who raises questions about it a “conspiracy theorist,” and that was a phrase that was devised by the intel community to discredit people who asked uncomfortable questions.

You sort of have to wonder if the phrase “gold bug,” which is just occurring to me now, isn’t a species of that. It’s entirely “shut up, gold bug.”

LUKE GROMEN: It’s entirely. Even to this day, people who, and I know some of them, who are interested in gold and sort of follow its global movements and buy gold, physical gold, non abstract gold, they’re embarrassed of it.

TUCKER CARLSON: Oh, yeah. I mean there’s like a social sanction to even talking about gold.

LUKE GROMEN: Oh, it’s it’s fascinating. I’ve been working in investment research for 30 years and at high levels at major institutions around the US, around the world, as, you know, doing investment research for major money managers. And it’s fascinating what you say because there is always not amongst all of them, but amongst a lot of investment professionals, they watch gold. They’re they’re they watch it. A lot. You more than you more than you’d be would think, more than the average American would think. They own it. But there is that stigma where it’s it’s sort of, you know, you know, “hey. You see gold?” It’s it’s it is. There is there is a stigma is too strong a word, but there’s kind of —

The Taboo of Discussing Gold Among the Wealthy

TUCKER CARLSON: A little bit. I was with one of the richest people in the world the other day, a very famous investor. I’m sure you know him. Wonderful guy. And somebody said to me, you know, he buys gold.

And I said to him off camera, “Do do you buy gold?” And he’s like, “Yeah. Among you know, among other things. Sure.” I said, “Do you buy a lot of gold?”

“Yeah. Buy a lot of gold.” But he clearly just didn’t want to it. Even to someone, you know, open minded, brilliant person, it’s not something that people talk about in public. It’s almost like admitting you have some kind of weird fetish or something.

LUKE GROMEN: I dress up in a chicken costume when I want to talk about it. You know what I mean?

Well, it’s and it’s fascinating. Right? Because it is I think it goes back to that original point of why those movements are shrouded in secrecy, which is gold on some level is a hedge or an insurance policy against the existing system as it has been allowed to evolve over the last 50 years.

And so once you get to a certain level of wealth, power, influence within that system, you clearly understand the Achilles’ heels and the risks and how that system will, at some point, mathematically, certainly, it could be next week, it could be 50 years from now, will, at some point need to be reset in some fashion. You understand that. And it is not in your interest socially, financially, etcetera, to advocate or advertise that you are hedging or insuring against the collapse of that system.

TUCKER CARLSON: No. Right.

LUKE GROMEN: Or the restructuring of that system.

Gold as Patriotic and Essential to Freedom

TUCKER CARLSON: No. I mean, you no. You make a great point, and I shouldn’t thank you for saying that. Because it’s it’s not just yet another intel community inspired conspiracy, though it is that, obviously.

But it’s also it is, in some sense, like, almost unpatriotic to say, “I’m I’m all about gold and land or whatever about physical assets,” because what you’re saying is “I don’t I don’t believe in the system of the US government.” Well, which is which is horribly ironic because if you go back to 1948, Warren Buffett, famous investor, poo poos gold every chance he has. And his father, congressman Howard Buffett, from the state of Nebraska, wrote a missive. You can still find it online saying “gold convertibility is essential to human freedom.”

In which on the first page, he says, “look. The first thing autocrats and evil empires that we just got done fighting.” Right? This is 1948. “First thing they did when they got to power was remove the convertibility of their currency to gold.” So it’s ironic. It’s always ironic to me.

People say, “Well, you own gold. You’re anti-American.” I said, “There’s nothing more American than gold.”

People say, “Well, what does gold do? It’s useless.” I said, “No. No. Gold the very use of gold is that as long as you can convert your currency into gold, you are still a free person. When you can no longer do that, your vote really doesn’t matter because they control the currency.” Right? It’s the famous statement. “Give me control of a nation’s currency. I turn out who makes its laws.”

The Propaganda Around Warren Buffett

TUCKER CARLSON: The Warren Buffett thing, man. That’s like I mean, it right. He’s famously mocking gold buyers. Right?

LUKE GROMEN: Of course. I would say Warren Buffett knows so much to admire there and be impressed by, and I am, and all that, but he’s a he’s a political player among many other things. He’s he’s a very powerful political player, and in particularly for the banks. Right?

Think about who they go to. Worse. 1989 or ’96 with Solomon, who was a big player in the 1998 long term capital bank rescues, Buffett.

TUCKER CARLSON: Buffett. Yeah. And Buffett has lots of great investors out there. Warren Buffett is, you near the top of that list. Of course. I get Oh, and he’s a, yeah, legendary investor.

LUKE GROMEN: Of course. However, massive propaganda around Warren Buffett.

TUCKER CARLSON: Of all the investors in the world, who’s received more slavishly sort of ass kissingly positive press than Warren Buffett. Like, there’s never been a bad word. You’re not allowed he’s like the Oprah. It’s the AUS Yeah. The AUS But you’re not allowed but no one has been promoted more aggressively by the American media than Warren Buffett.

LUKE GROMEN: I I think that’s fair, and it’s, you know, it’s interesting because it’s But but he’s a hard asset guy. He’s absolutely a hard asset

TUCKER CARLSON: He literally bought Borsheim’s jewelry store. Oh, yeah. He sells gold. He bought railroads.

LUKE GROMEN: Right? Exactly. Railroads and Omaha Steaks, and, like, this is not this is a guy whose whole philosophy is about, you know, buying physical things. Yeah. Oh, yeah. Absolutely. With inherent value.

TUCKER CARLSON: And he’s you can go back to He’s against gold. Oh, yeah. He’s not against gold.

LUKE GROMEN: You can see, you know, and this goes back to that conflict of once you become big enough within the system, it’s not in your interest to to to to highlight some of these things. I mean, one of his Berkshire letters from late 1960s, early 1970s, he highlights that, basically, Berkshire made it in the late 1970s. Berkshire stock priced in gold had gone nowhere for 10 or 15 years. And he I mean, that flat out shows you. Right?

So all of these productive business and all these things he says about these productive businesses over time, 100% true. And there are instances in history where gold outperforms, where gold preserves purchasing power, currencies are being debased.

It’s interesting. He he frequently talks about, “Well, I started investing in I think it was when I was 10 years old. I bought my first stock,” which would have been, I think, 1941 or 1942, which just happened to be basically the all time generational low of US stocks because we we we won the battle on Midway, and at that point, was sort of obvious we were going to win World War II and so on and so forth.

But I always say to clients and and and friends, like, “Yes. And look back 15 years. The prior 15 years from 1918 to 1939, 1915 to 1931, were catastrophic for financial assets of all types in the west. Gold, like, all you wanted to own was gold.”

And so it’s interesting. I think part of, you know, the point being, part of, I think, your view of the world depends upon when you’re born and what happens as you’re growing up. It’s sort of that cycle theory of of of, you know, the fourth turning. I think it affects your views on investments too.

TUCKER CARLSON: Why wouldn’t it? Of course. And and it affects your views on the future in general. Sure. And and as you just said, the the degree to which you’re vested in the system currently in place affects your outlook and affects very much what you’re willing to say in public. And the bigger you are within that, the more pressure can be applied to you. Right?

LUKE GROMEN: Or if if you you don’t get deal flow on Sunday night if you are pumping goals if if you’re Warren Buffett, or you have you know, you don’t get the approval of whatever thing you need approved or from the congressman. It’s just look. I’m not opining on it. It’s just how the game is played.

TUCKER CARLSON: It was so obvious. I’m not a financial expert. That’s for sure. But I have been in the media my whole life, and I know what a fluff job looks like. And I know no. I do. I know a lot about it. And I watched Warren Buffett. I’ve never been against Warren Buffett. I’m not against him now. But, I mean, the amount of promotion that guy received from the system told you everything about his orientation and his the incentives in place for him, and, like, they were promoting Warren Buffett and Warren Buffett’s worldview, like, very aggressively.

And so, you know, I didn’t believe half of it, and you shouldn’t either. That’s my view of it.

LUKE GROMEN: Yeah. Think you always want to think critically about this stuff.

TUCKER CARLSON: I think so. Yeah. Think so. Absolutely.

Current Global Gold Flows

TUCKER CARLSON: So give us a sense of where gold is flowing in the world right now, to the extent we know.

LUKE GROMEN: To the extent we the the what we can see, I would describe it simply as from the UK and the EU, to a lesser extent, into the US, it’s still flowing into China.

It flows into China all the time, but they’re the big delta, the big change in since the Trump election, essentially, has been a significant ramp up in the flows of gold out of the UK into the US.

TUCKER CARLSON: So that would seem good for the US. Yeah. Historically, when you see where gold is flowing, that’s your economic winner. That’s who’s winning.

LUKE GROMEN: Where the countries that are losing gold, those are the countries that are losing. That goes back several hundred years. That’s that’s sort of how it works, which makes sense.

TUCKER CARLSON: Thousand years. Yeah. That exactly. Yeah. Yeah.

The Future of Gold’s Monetary Role

TUCKER CARLSON: So do you and I should have asked this earlier. Do you anticipate any time in the future where gold is no longer regarded as a measure of economic strength and health?

Does it ever get eclipsed by crypto?

LUKE GROMEN: No. I don’t think so. I don’t you know, at some point, Bitcoin could compete with it, my opinion, possibly, but I think that’s far down the road. And failing that, it would take something unforeseeable.

Right? We we discover we discover an asteroid that has, you know, gazillions of dollars of gold on it, and we develop the ability to go up there and bring it back cheaply in a way that competes with this.

The Relationship Between Gold Price and Production

TUCKER CARLSON: Okay, gold is almost hovering at about $3,000, a little under $3,000 an ounce. It’s clearly going to make it $3,000, I would guess. Is there a threshold at which it becomes because there’s a lot of gold actually in the Earth’s crust, a lot, and it’s just too expensive to extract it, but is there a threshold at which gold production just ramps up dramatically?

It becomes worth it to extract a lot more gold, and it affects the price because of supply and demand.

LUKE GROMEN: Yes. Ultimately, supply will be a function of price, and then there’s a lot of it in the ocean, right? In theory, you sort of dry out the oceans and filter it, and that’s just a question of price, the question of price is ultimately a question of energy efficiency. Right?

If you wanted to, you know, that’s that’s how much energy do you need to expend to to dig and get that out of the crust where it is and refine it down so that it makes sense. And right now, it’s going to cost you way more in energy in order to get that, and so they’re not you’re not going to do that.

And so if price goes up enough, then it makes sense for you to expend that amount of energy to do that. And I think that’s a really important point that ties back to our stock to flow and why gold is valuable. When you think of it in those terms of is is we need to expend a lot of energy to get gold, and the price of gold determines how much energy you’re willing to expend to get it, it’s just a compressed and portable storage of energy.

Incentives Around Energy Prices

TUCKER CARLSON: And and So that raises a deeper and more fundamental question, which is, do the great powers have a built in incentive to keep energy prices higher than they would naturally be in a truly free market?

LUKE GROMEN: Depends which great power. Right? The Chinese, all else equal, want to build a consumer society. They would like to have energy prices cheaper.

America, we like cheap oil, but not as cheap as we used to like it because now we have shale. So we want, you know, we want Goldilocks oil. So, you know, above $90 starts to be a problem for our consumer. Below $70 starts to be a problem for our shale industry. And and so if you look at at the price of West Texas crude WTI crude oil over the last two, three years now, oil’s been $70 to $90.

And I think that’s like, we need Goldilocks oil. The Europeans, same kind of thing. They need a cheaper oil. The Russians, they would probably like more expensive oil. The Saudis, more you know, Saudi has $90 fiscal breakeven.

Right. You know? Anything anything below $90, they’re borrowing money, and yep. Things get spicy over there if they don’t maintain their promises to their people. So, but okay.

TUCKER CARLSON: So you’re talking about hydrocarbons. Correct. But, you know, there’s been for all the talk of the Green New Deal, now we’re getting far off field, but I think it’s really fundamental to the world, where all the talk of the Green New Deal and all these new forms of energy and renewables and green technology, it’s really been pretty shockingly lame, really, and it’s like windmills and solar panels, both of which are just kind of absurd. There are a lot of advanced technologies, particularly in biotech, that are moving like crazy fast, AI crazy, crazy fast. Energy generation technologies are not moving crazy fast at all.

The Lack of Energy Breakthroughs

TUCKER CARLSON: Like, no one’s like, “hey. Actually, there’s a brand new nuclear breakthrough.” Like, we’re not building any nuclear. Like, you conceivably, if you got off hydrocarbons, could I don’t know. Why isn’t there a greater effort to figure out cheaper ways to produce energy?

LUKE GROMEN: I think a lot of it is on some level political, right? Think there’s

TUCKER CARLSON: Wow. Okay. Right. So maybe if maybe the Green New Deal I mean, obviously, it’s anti-civilization, it’s anti-human, it’s really dark, and it’s built on a lie, but it’s also built on geopolitical realities.

LUKE GROMEN: Right? I think so. Yeah. I mean, it’s look. There are things we could do that would ramp up energy production fast, and that is nuclear.

Like, we we should have we should be building nuclear plants a bunch every year as far out as the eye can see. But if you really got, you know, nuclear or any form of energy down in hydrocarbon equivalents to, like, $10 a barrel oil equivalent.

TUCKER CARLSON: Mhmm. You’d, like, blow up the, like, the world financial system, kind of.

LUKE GROMEN: I think it depends. There’s a lot of other puts and takes. Yeah. You know? And some of that gets into, you know, how you would have to you’d probably have to restructure some debt. Some of that is how gold gold.

Right? Because the Saudis have $10 a barrel. But, again, that then gets into gold. Right? Where we go, “okay. Well, as partly some grand deal now this is far afield, but some sort of grand deal, we are going to revalue oil and gold reserves.” Right?

Or we’re going to revalue gold so that Saudi like, Saudi doesn’t care how they get paid. If if if oil goes to $10, but their oil gold goes up to $10,000, they still have all the money. They get compensated for past

TUCKER CARLSON: Well, But if energy as you just said, if energy prices dropped, you know, far below what we can currently imagine, then the price of gold would also drop because the price of extraction of gold would drop.

LUKE GROMEN: So you’d have a Maybe. Well yes. Yeah. Fair. If you can apply that energy. Yeah. Yeah. Sure. Right. But I mean, you’d have two competing forces.

Your your cost of energy to mine gold would go down, but at the same time, that if you drop energy, there’s two groups of, you know, nations in the world. There’s a US as a reserve currency, and then there are US creditors that import energy and US creditors that export energy. Right. And they all own a bunch of bonds. Yes.

And they own a bunch of financial assets. And so if oil drops really low, all of your oil exporting creditors are going to sell their dollar assets because they’re going to need to because, right, Saudi owes money at $90 a barrel. And if they don’t pay that money for social programs, etcetera, place the place has political problems. Yes. And so they’re going to be selling treasury bonds.

They’re going to be selling stocks, and that creates and the US economy is so leveraged that that it’s not going to take a lot of selling to create an economic crisis from it. So you have to re basically, you would get into a situation where, in some way, shape, or form, the Fed would be printing money again as a result of oil prices getting too low, which is in theory a good thing, which then could actually be net good for gold. Right? So there’s there’s there’s puts and takes depending on how

TUCKER CARLSON: Basically, you’re describing a world that’s so complex and interconnected where, you know, global finance, the cost of energy, and then, you know, the geostrategic stuff, you know, military rivalries, it’s all of a piece. So it’s pretty scary to mess with any single factor in that in a dramatic way.

That’s kind of what

LUKE GROMEN: It’s disruptive, it’s potentially disruptive. Super disruptive. Yeah. It’s potentially and I think that’s ultimately the power and the encouraging thing about gold. Gold is always thought about as a, “Oh, you’re buying gold. You’re a doomer. The world’s going to end.”

No. Part of the problem of what I just described, change in and of itself isn’t a problem, but rapid change when you have high levels of debt, it’s the debt that creates the problem. And so if you when you look around and you see these central banks buying all this gold and having all these countries buying this gold, if you revalue gold enough to basically recollateralize or buy effectively buy down your debt so that you have low debt levels, then you can make dramatic more dramatic changes to the economic system and its connections without running the risk of blowing up the financial system.

Right? Because whether goal you know, once you introduce something deflationary into a debt based system, the debt starts to go boom, right? People don’t generate the income to pay the interest. Right. In a more equity based system or in a, I hate to say gold based because it’s I’m not talking about a gold backed currency.

But if your debt to GDP is low because you’ve revalued your gold much higher and and restructured your balance sheet, a deflationary recession or a restructuring of the economy that is deflationary or a good energy introduction or AI productivity enhancement that is deflationary, that can be weathered and benefited from without blowing up the debt based system. So gold is paradoxically a way to foam the runway for a major change, be it geopolitically or energy or AI, something deflationary. Foam the runway.

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Recent U.S. Gold Accumulation

TUCKER CARLSON: So you see, you said a minute ago that the big picture over time, countries that are acquiring gold are stronger and countries that are seeing their gold reserves depleted or weaker? Seems obvious.

LUKE GROMEN: Over time. Yeah. You’re running right? You’re you’re saving more than you’re spending, essentially.

TUCKER CARLSON: And the United States is acquiring gold because why?

LUKE GROMEN: That’s the $64,000 question in markets right now. It is the official nominal reason being given in in markets and in the media is that Trump’s administration may or may not put tariffs across any number of countries as we’ve discussed, including possibly gold hubs like the UK. And if you put a 25% tariff on the UK across all items, just to pick a number, you run the risk what the the mechanical impact of that would be to increase the price of gold 25%, and the problem is is that

TUCKER CARLSON: Tariffs against American imports of British goods?

LUKE GROMEN: Yes. Exactly. But other than, like, shortbread, is there a British export?

TUCKER CARLSON: Not really. No. Right. They they’re they’re they’re a twin destination. No. So They don’t make anything. Right?

LUKE GROMEN: Not on net. No. No. Not on net. And so this is this this is what the story is.

Is that it it’s there’s been this massive flow of gold out of the UK to the US because tariffs might happen, which would impact the price of gold in a manner such that it would be very disruptive to what are called basically spread trades, that gold traders in New York or London, bullion banks that traffic in gold bullion, they may have a position in gold futures in New York and a physical gold position in London. And if a tariff were to change the price relationship between those two, it could create significant losses for them. And so the response is basically, bring the gold here to mitigate that risk. That is the official story. There’s absolutely a strong element of truth to that.

With that said, the longer this goes on and the gold flows continue, the less that story holds up as the sole reason. When we go back in time to 2020 and during COVID, we saw a very similar spike in gold futures relative to spot prices in London, and it was driving a massive flow of gold out of London here because of COVID, because supply chains broke down with the shutdowns of flights and what have you. A lot of gold is shipped on inter transatlantic commercial airliners in the cargo holds. And so those flows stopped. It drove a mismatch.

And what the COMEX, the the gold futures exchange in the US did, ultimately one of the things to to sort of settle those markets down was to, what else, they changed the rules for the layman. They they introduced a gold futures contract that made the good delivery denomination, I think 400 ounces in London, 100 ounces in New York, either or, right? So that, okay, well, gold to tier is fine, so we don’t need to move it. So they took a step to change the rules to settle the market down. Another famous example we were talking before talking about before we got on air was the Hunt brothers run on silver.

They tried to corner the silver market in the ’80s. This was COMEX, and they changed the rules on the Hunt brothers. Once it became apparent that the Hunt brothers were successfully cornering physical silver, they changed the rules. They sent they they set the market to sell only. You could you couldn’t buy gold or silver futures, and you you could only sell, and the market promptly tanked.

Speculation on the Real Reason for Gold Flows

LUKE GROMEN: At any point in time, Trump, Besant, Rubio, other American officials could come out and say and clarify, “we’re not going to put tariffs on gold. There will never be tariffs on gold.” There’s a lot of countries in the world where there’s no VAT that have VAT, that there’s no VAT on gold. So this is the long my point being that the longer this goes on without a rule change or a political pronouncement about tariffs, political clarification about tariffs, the more likely it becomes, in my opinion, speculatively, that the tariffs are on some level as reason for the gold flows cover. That the the gold’s being brought here for some other reason, and we’re just saying

TUCKER CARLSON: What could I mean, and that always is the likely explanation that there’s something else that accounts for at least part of a phenomenon that you’re watching.

So what could that other reason be?

LUKE GROMEN: I think there’s two things. There’s a tactical reason. There’s a strategic reason. The tactical reason is if you Google “gold revaluation,” you’ll find a number of stories in any mainstream financial media over the last two, three, four weeks.

There has been increasing speculation in the aftermath of Trump’s election and, in particular, in the aftermath of Scott Besson being approved as treasury secretary that there is a gimmicky but completely legal and mandated in the rules way by which the United States could revalue its gold, which it currently holds on its books at $42 per ounce up to the current market price, and in so doing or even higher. And in so doing, it creates a bank deposit, basically, at a at the treasury’s bank account at the Fed that the Trump administration could then use to buy down debt, to not have to borrow as much. It’s effectively money printing through gold. It’s creating money supply using gold through basically an accounting gimmick that is already on the bottom.

TUCKER CARLSON: Gold would never be sold to anyone?

LUKE GROMEN: Never be sold to anyone. It’s just literally an exchange of paper.

TUCKER CARLSON: So the United States would not lose its gold reserve?

LUKE GROMEN: No. There’s no chance of that?

TUCKER CARLSON: Not under that transaction. No. Okay. As I as it’s been explained to get to a point where the nation has so much debt backed by nothing other than its navy, which may become irrelevant thanks to drones. So you could see this all moving very fast, and it’s like all of a sudden we owe the world trillions of dollars, but where’s the collateral?

Where policymakers are forced to sell off physical assets that belong to the country? Oil, water, because we have some of the world’s largest freshwater reserves in the Great Lakes, and gold.

LUKE GROMEN: Don’t think is that a clean slate thing? I think ultimately there’ll be no need to do that because you’ve got the assets and you’ve got a printing press. Right?

The Collateral Backing U.S. Debt

TUCKER CARLSON: So ultimately, it’s really a function of the currency. Of of course, as long as you’re the world’s reserve currency. And even if we’re I mean, I think we will be, but they’ll always have the ability to print dollars. It’s just a question of But if nobody wants them? It would just depreciate faster.

Right. No, but I mean, at some point, like if I take a loan against my house, I have a mortgage on my house, and also if I don’t pay it, you know, the holder of that mortgage gets my house. There’s collateral. So like, where’s the collateral in the United States other than like, I don’t know, people like us? You know, what is the collateral?

LUKE GROMEN: The collateral is it’s it’s a complicated question. It’s I mean, what On some level, it’s the threat of violence. I think some of what we’re seeing in terms of these, you know, discussions around will we leave NATO or will we not. This is a this discussion that goes back to the ’70s. There was something called the Blessing letter.

Karl Blessing was a governor of the Bundesbank, the German Bundesbank. And the French were asking for their gold back. Others around the world were asking for their gold back in the in the ’60s and ’70s. I guess the Blessing letter might have been late ’60s. The Germans started hinting about asking about their gold back, and the Americans sent a letter that essentially said, you know, “if you ask for your gold back, we will have to reconsider stationing US troops in West Germany to protect you from the USSR.”

So “you’re going to keep taking dollars or else we’re going to bring our boys home, and you can deal with the Soviets yourself.” And the Germans never asked for their gold back. And so what collateralizes is a of a complicated multi body. Right? It’s it is goodwill, protection, access to markets, the threat of violence, military protection.

There’s gold is way, way down there. I don’t think the gold is thought of as collateral, but it could be as a reserve asset if we wanted to change the system. We would need to have it if we wanted to change from the system we’ve we’ve been in for the last 50 years, and that kinda gets to the strategic side of it.

TUCKER CARLSON: We had no choice? What if I mean, because we’re not the only decision makers in this process.

LUKE GROMEN: We’re not true. I think you would see some sort of grand deal be discussed ahead of that, and I think that’s, you know, some of what we’re seeing in real time when we talk about US and the Russians and the Saudis and the Chinese all getting together in Saudi and talking about, you know, probably not how the Yankees are going to do this year. And probably not just the end of the war in Ukraine.

TUCKER CARLSON: No. I oh, absolutely. I don’t think it’s only about the war in Ukraine. Of course not. You know, those are think about what you’ve got there. Because the war in Ukraine is not about Ukraine. It never has been.

The Strategic Importance of Gold

LUKE GROMEN: You know, you’ve got the four big you know, Saudi, US, China, Russia are the that’s 40% of global oil production, and US China is, what, probably 60% of global oil imports? Global global oil. So you can oil’s going to have a role there.

Now the strategic side of what I think we’re seeing the the gold movement is ultimately what if you if you take a step back and try to see the forest for the trees of what the Trump administration is trying to do, the Ukraine war showed us we had outproduced by the Russians badly. We couldn’t produce shells. We couldn’t produce Stinger missiles. We couldn’t we were reliant on essentially China to supply our industrial base, to supply our defense base. We have been borrowing money from China to build weapons to face down China using Chinese components. It’s not a good strategy when your biggest geopolitical adversary is China. Right.

And so starting with COVID

TUCKER CARLSON: Could it be that we were using Chinese components to arm the Ukrainians in a war against Russia, which is allied with China?

LUKE GROMEN: I think that absolutely could be the case, and I think that China we know that the Chinese were supplying Russians with dual use goods as well. And the So China’s on both sides. China’s on both sides, and, critically, think about the think about the implications of this. Right?

So we, America, when we were the dominant power, we were the ones supplying the weapons to these types of conflicts. Now we didn’t really have the ability to to credibly say Ukraine, Taiwan, and Israel, we can supply all of you at once. Empirically, we demonstrated over the last three years. It was impossible. We were moving Patriot systems out of Israel to to Ukraine and then, you know, having to having to backtrack in certain areas in in different conflicts as a result of that.

When paired with what happened in COVID, which was, “hey. We need more PPE and supplies and what have you,” and China said, “just as soon as we get, you know, ours,” we were dependent on China in COVID. And we it was made crystal clear to Washington that the defense industrial base has been too hollowed out by this currency system whereby we export dollars and and we export our factories and our workers. And China sends us stuff, we send them dollars, and they send us, goods. And and, I’m sorry.

They send us goods, we send them dollars, and then they reinvest those dollars in our financial markets, and that’s fine. That has been how the world has worked for 50 years, and it’s been great for Wall Street. It’s been great for Washington. It’s been great for China. It’s not been great for the the American middle and working class whose factories got offshored to China, and Washington was fine with that until all of a sudden they realized this process has gone so far.

The Need to Change the Dollar System

LUKE GROMEN: We cannot credibly fight a war without Chinese factories. And the defense department is saying and they began saying it 10 years ago. “We’re done here. This is we need to start reshoring as a matter of national security,” and the the origin problem is the structure of this dollar system. And so we need to get out of the business of supplying China, the dollars, to buy up the world.

We and that means we need to change the currency system that’s been in place for 50 years. Well, when you say these types of things, the instant response, the correct response is, “well, okay. If the US isn’t going to run deficits, run up debt to supply the dollars to the world, who will?” No one else will. The Chinese won’t, and no one else can.

And that is correct. And the answer is is then “you’re going to have to settle deficits in something else that is nobody else’s debt, nobody else’s liability, and that is gold.” And I think that’s where this is going, which is and I think it’s part of the reason why the US is actually buying gold is to try to turbocharge this change to the system.

When you hear president Trump say “we want to go back to tariffs and cut income taxes,” when you hear Marco Rubio on his confirmation hearing say “within 10 years, we are going to be dependent on China for everything if we do not take aggressive actions to change and start to reshore, change this currency system and and reshore.” When you have senator Vance, say what he said in 2023 to Powell about the dollar increasingly being a resource curse about which Vance is very familiar having grown up in West Virginia and Southern Ohio and seeing the deindustrialization.

The chapter and verse is the administration understands this problem.

TUCKER CARLSON: Sure. What what the current vice president, J. D. Vance, said to the Fed chairman.

LUKE GROMEN: So in 2023, he said that the dollar shows the hallmarks of a resource curse, which is it’s it’s often called Dutch disease. I’ll I might I might refer to it there, which is effectively if you’re Saudi Arabia and you discover that you are the biggest, lowest cost producer of oil, you produce a lot of oil, and the rest of your economy shrivels up and does nothing. You know? It withers away, and it ultimately becomes a strategic handicap or a strategic And get corruption every Yeah. Exactly.

And Vance’s point was that the dollar’s reserve status, we are the Saudi Arabia of money. That’s how the system has worked for 50 years. We produced the world’s reserve currency. We’re the Saudi Arabia of money, and what has followed is the hollowing out of industries other than those most closely tied to the money printer, to the dollar, Washington, Wall Street.

And his point is that it’s becoming this resource curse of of being the Saudi Arabia of money is increasingly not good for the American middle class, the American working class, the US defense establishment.

He specifically cited our inability to to produce shells for Ukraine in his question to Powell in 2023, and you can find this online. You can Google it. I think it was April or March of 2023. And so it showed a fundamental understanding of this connection between the structure of the dollar system over the last 50 years and the situation in which we find ourselves where our defense industrial base is so hollowed out and our debt level’s so high, we cannot credibly fight a war against our major adversaries without them supplying us. And our debt is so high that they can weaponize their debt our debt against us.

Moving Toward a New System with Gold as a Neutral Reserve Asset

LUKE GROMEN: And so, ultimately, I think the strategic reason why we’re starting to see gold re-enter the conversation, why central banks have been buying gold for 10 to 12 years, why the US is is gold is we’re likely moving to a system advocated for by the policies of the United States, if not outright saying, “Hey, we want gold to be a neutral reserve asset,” but we can see the policies, and they are functionally they’re functionally indistinguishable from saying “we want gold to be the neutral reserve asset.”

I think what we’re going to do is move toward a system where the foreign capital flows basically, we bring factories that we put tariffs on. We lower income taxes. US consumer spending rises. The dollar we we start to see foreigners send goods here, also pay us tariffs, start to reinvest in our factories instead of just buying our treasury bonds and our financial assets, employment goes up, building goes up, growth goes up.

Ultimately, though, if they’re not recycling their dollars into you know, they can only put so much in factories. They’re not putting them in treasury bonds anymore. They haven’t for some time. What are they going to put it in if they have a surplus left over from dealing with us where they can put their surplus dollars, etcetera? I think the answer is gold.

And I think that’s I think the flows of gold, the longer we go where the tariff story you know, it’s just tariffs, and it just keeps coming, and it just keeps coming, which I’m hearing is is still to this point continuing to keep coming, gold flowing in. The more likely, in my opinion, when married with the pronouncements from Trump, Rubio, Vance, Stephen Merrin, the the council of economic advisers, Besant, the more likely it is that these flows of gold into the US are effectively front running what will likely be a higher price of gold driven there by the recycling of global trade more into gold and less into US financial assets than has been the case over the last 50 years.

Moving Toward a More Concrete Economy

TUCKER CARLSON: It’s just an incredible story. If what you’re saying is right, it’s incredible because, really, it’s not it’s a it’s a it’s a move toward the fundamentals, toward the past. It’s actually moving backward.

What you’re saying is the future is like building more factories and buying more gold, really? I thought we were moving to a far more abstract I mean, I’m thrilled by it, let me just say, but it’s the opposite of what I think many of us anticipate, which is a world that is increasingly abstract, and you’re describing a world that is increasingly concrete.

LUKE GROMEN: Think Or an economy.

TUCKER CARLSON: An economy, yeah, and I think there will still be growth in services and the abstractions in these things. The tech that doesn’t mean technology stops progressing.

LUKE GROMEN: And when I say factories, I would use the broadest possible definition of factory. Right? So we’re making things. We’re making things. Robotic factories.

TUCKER CARLSON: Correct. They’re making things.

LUKE GROMEN: Exactly. And that, I think, is where this is going. And, again, critically, I think the reason it’s going there, and I think the reason these policymakers again, Trump, Besson, Rubio, Vance, mirror like, chapter and verse is it has become clear that the status quo dollar system has become an acute national security threat to the United States on two fronts.

The Dollar System as a National Security Threat

LUKE GROMEN: We can’t make weapons, which we keep hearing. We can’t make them fast enough to credibly defend our allies and and and and project power, and our debt has gotten so high that that too has become a national security threat. And this sort of checks both boxes of of in terms of this systemic change, and it it makes America great again.

So the people who built this country built it because they wanted freedom. One word, freedom. They wanted freedom from oppressors who forced them to buy overpriced tea, then blockaded them when they tried to dump it into the ocean. How’d that work out? Well, we built America in response.

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The Vested Interests in the Current System

TUCKER CARLSON: I mean, that’s an amazing story that you’re telling. I guess here’s the fly in the ointment. There’s an entire class of people, some of the richest people in our society, some of whom I know, you know too, who’ve gotten, you know, rich beyond the dreams of Croesus by really doing nothing and adding nothing just as parasites on the financial system. You probably would be more generous than I am in describing what they do, but they’re useless people who’ve looted the country, but they’re really powerful.

They’re the biggest donors, and so they’re going to stand by and just let their world collapse? I don’t think so. I mean, I don’t you know, it’s one of these things where I think you know, what’s Charlie Munger say? “You show me an incentive. I’ll show you an outcome.” Right? It was one of Charlie Munger’s famous quotes. Yeah.

And so I don’t I don’t see them as I don’t see them as as parasites or whatever. I think I see them as rational people responding to it.

TUCKER CARLSON: They are. I don’t think you can stand back and say, like, you know, I don’t know. Don’t want to be mean. No. Financially, you I don’t want to be too mean.

But, like, it’s it’s harder for the layman, me, to understand sort of the added value, is that the term that they use, of some of these, quote, industries. It all seems fake. It all seems sort of the project of short term thinking. It seems very mercenary. It seems disconnected from the national interest.

It seems greedy among other things, and and basically disgusting, and it hasn’t made the country stronger. It’s made it, in fact, weaker. It’s described it’s made the country you just described. Sure. It’s, like, totally overwhelmed by debt and can’t even produce artillery shells.

LUKE GROMEN: Well, think about it. Right? So, like like, the system we set up when you’re the Saudi Arabia of money, as we’ve been since ’71, you’re going to have dollar Dutch disease. Yeah. This is the resource curse Vance talks about in 2023.

And so you’re going to have two sectors grow to the detriment of all other sectors. Federal government Yep. Yep. And finance insurance for real estate. Right. The fire industry, finance. Now, both of those industries are absolutely and I’m not calling them parasites, but they are parasitic industries. They make money Oh, I know. By taking a small cut of everything that comes in. Yeah.

And if you just think about this intuitively, biologically, in the natural world, if you have a small parasite on you, you have a small, whatever, gut parasite, it takes a little bit of every meal you eat. Maybe you don’t feel a 100%, but you’re fine. The parasite is great, and you’re fine. Right. At some point, the parasite gets so big.

If it’s allowed to get so big that it’s taking too many of your calories, you start to wither, and you die ultimately. And that is where we’re at. Unfortunately, that’s the symptoms of this are 100,000 people a year dying of drug overdoses, the inability to make shells, the howling out of the defense industrial base. And these are the things that this fixes.

I mean, it’s it’s you know, I I look at myself. I was, you know, a fairly smart kid. I was going to look into architecture. Didn’t like architecture. I could’ve done engineering, but I absolutely, 35 years ago, looked at and said, “okay. Well, I can study really hard Right. And never go out to the bars and graduate in five years in engineering, or I could get really good grades, a lot less effort, go out to the bars three, four nights a week, and graduate in four years in business and in finance.”

And I, you know, I made a self you know, I made a it’s a tragedy of the commons problem. Right? I did what was best for me. I’ve And my family. Most of my friends made the same choice. People respond to incentives.

TUCKER CARLSON: Of course. But this fundamentally changes the incentives.

LUKE GROMEN: When you do this neutral reserve asset So to answer your question- There are lot people vested in the

TUCKER CARLSON: A lot people vested. Yes. Powerful. How are they

LUKE GROMEN: I think what we have been watching over the last five years, and I think that’s part of the the, you know, the Trump versus, you know, the the the animosity to him.

TUCKER CARLSON: He manifested in party politics.

LUKE GROMEN: Yeah. I think absolutely. And and I think there has been a sort of the a a progression of the US. You know, what was, you know, 1960 to 1980, “what’s good for GM is good for America.” And then from 1980 to 2020, “what’s good for Goldman Sachs is good for America.”

And I think starting Trump introduced some of these concepts, ’16 to ’20, but think COVID and then the war in Ukraine reinforced it, I think we’re shifting to “what’s good for the US defense industrial base and middle and working class is good for America.”

And so there’s you know, this, to your point, this old “what’s good for Goldman Sachs is good for America” wing of the world, the Robert Rubens and the, you know, the Larry Summers and a lot of these guys you’re seeing lament against all the tariffs and all this stuff, they’re absolutely fighting.

I don’t know that it is terrible for their interests if because what you’re talking about, the two most pronounced dynamics are going to be the real value of long term treasury bonds, long term dollar bonds will fall relative to industrial assets, production, equities, etcetera. So these guys may have less political power, but the reality is that’s just a marking to market. Their worldview has been proven wrong. We can’t make shells.

There are 100,000 people dying of drug overdoses every year. You do have a hollowed out defense industrial base. We do have too much debt. Like, those things are no longer debatable. They’re all empirically true.

They’re all empirically shown to be hurting the US. So they can’t argue on the merits, so they’ve got to attack the people trying to implement it. But in the end, I don’t think they can win this argument anymore because events have proven them wrong. The system is is going to change because the US military is not going to sit here and go, “you know what, guys? You’re right. Let’s keep that system, and we’ll just have China make everything for us in five years. And then, you know, when you want us to face down the Russians over in, you know, Georgia or in, you know, Lithuania, you know, we’ll ask the Chinese to make weapons for it.” Like, that’s not going to happen.

So if that’s not going to happen and if we’re not going to default on our debts, then the only outcome is they’re going to have to restructure the system in this way, which will be good for these people’s equity bases. There’ll be a lot of bank loans, So it’s just more it’s not catastrophic. It’s just catastrophic to a worldview, but the worldview, like, to any objective observer is already dead.

Reindustrializing Beyond the Military

TUCKER CARLSON: Could I mean, just to ask a kind of goo goo question because I can’t control myself, but, you know, you’d to see manufacturing come back and then discover the only manufacturing is, like, machines that kill other people. Could you also because that’s totally that’s totally disgusting. You well, you can’t be proud of a country whose only export is bombs. I mean, that’s no.

You can’t be proud of that. That’s totally immoral. So you you need military, you need weapons, but you also want to build things that are beautiful and uplifting and life enhancing also. Could you get that too?

LUKE GROMEN: I think absolutely. I mean, ultimately, you think about everything we’ve shifted to you know, this system has required us offshoring infrastructure, manufacturing, etcetera. That stuff needs to be rebuilt. Right? We’re sort of when you look at the flows of the last 50 years, it we our our our infrastructure looks like we lost a war. It’s been hollowed out. It’s been dilapidated.

And so there’s decades of open field running of I mean, I’m I’m an investor in a private equity investment in US electrical infrastructure. It’s a boring business. They just make metal bending stuff that goes into transformers.

TUCKER CARLSON: No. It’s not boring at all. It’s the future.

LUKE GROMEN: It’s absolutely the future. And they’ve got so much demand. They can’t hire enough people. They can’t you know?

And so there’s once you get the right incentives in place in terms of the monetary system and and those flows, the markets will start to work, and they’ll start to feed on themselves. And then we can get into things. “Okay. Wow. We have enough elect you know, we’ve got enough demand. Now we need to build the power plants. Once we build the power plants, then we can build more high speed rail. We build more high speed rail. Need more master electricians. We need more Totally.”

And it can feed on itself. It’s not easy. There’s high degree of executional risk, not least of which is because we have dawdled so long, because this other wing of Washington has been so successful in fighting off what has long been obvious to the military and others, we gotta run fast.

We gotta run not quite on a Manhattan project type of time frame, but we like, we don’t have you know, we need to be aggressive in doing this. And I think it’s part of the reason why we’ve seen the Trump administration be so aggressive with some of their moves so early on. I mean, it has been fascinating how quickly they’ve been doing things and moving fast and breaking stuff.

And some of the stuff is that, “oops. We didn’t need to do that. Let’s” but I think that speed reflects, in my opinion, my read of that speed of action by the Trump administration is a nod towards understanding that this needs to get going fast.

TUCKER CARLSON: It’s so big picture. It’s just so impressive, you know, just from a management perspective, like, that they’re thinking in these terms. And I think we know that they’re thinking in these terms.

LUKE GROMEN: Oh, yeah. They absolutely are. You can see it in their public pronouns.

J.D. Vance’s Understanding of the Issues

TUCKER CARLSON: J. D. Vance specifically maybe I’m tell me if you think I’m giving you too much credit, but he seems to have thought about this, like, holistically, like, a big way. You described that exchange with Jerome Powell.

I mean, are you getting indications that Vance has has a big picture in mind?

LUKE GROMEN: I think Vance understands it at a level as good as any politician that I’ve seen in this country in my in in in decades. And I think some of that is you know, if if if viewers haven’t watched “Hillbilly Elegy” or read the book “Hillbilly Elegy,” he understands that it’s such an intuitive level because he lived it. He was in Middletown, Ohio. He saw what happened in Middletown, Ohio.

He saw what happened to his family. He saw he saw the hollowing out. I mean, so much so that Larry Summers, one of the people that trying to fight this, was publicly praising Vance and “Hillbilly Elegy” in 2017. You can find it on X saying, “oh my gosh. I had no idea this was happening.”

Criticisms of Larry Summers

TUCKER CARLSON: So I think Vance — He’s such a foolish man, Larry Summers. Yeah. Well, that’s a whole different topic.

LUKE GROMEN: No. But just like for it’s I mean, I’m not as smart as he is.

TUCKER CARLSON: It’s yeah. He’s as smart as he is. Mean, air quotes because, I mean, we’re constantly bombarded with this propaganda about how smart all these different people are. They’re so smart. Really?

Are they so smart? How are they how do they order their own lives, for one thing? Oh, smart. How much sex are you doing? Like, do your kids respect you? Like, how smart are you actually? What’s the, you know, what’s your output? What have you created that’s worth having? Smart people, almost by definition, would have sort of successes. Right?

What’s his success? I don’t really get it. Gathering, you know, merit badges, whatever. I’m sorry. Anyway, so yeah. The whole leadership class is like that, though. There’s a there it is. “Oh, you’re so smart.” Really? Show me how.

Then it’s you know, so Vance, I think, really gets at — he lived it. He saw, like, more than anyone in that seat that we’ve seen in our lifetimes, I would argue, saw and it’s spoken about, has spoken about the resource curse. And so Vance, you know, the the dollar Dutch disease, what happened to manufacturing? What happened to families? What happened to the social fabric of the middle and working class across America, and he wrote about it.

He’s you know, the movie’s about him. And and in 2023, he specifically linked reserve currency status of the dollar, specifically said it might not be a good thing for the US, specifically said we are getting wildly outproduced by the Russians and Ukraine, and we can’t credibly maintain our defense obligations because we don’t have the industrial base to do so because of the dollar system and the resource curse, and kinda left it open for Powell to kinda say, “hey. You know, you got two minutes to answer. You know? What do you think?”

And and I think he gets it so fundamentally from we talked earlier about, you know, where you grow up leads and influences your views on investing in the world, etcetera. The the time frame in which you grow up and where you grow up. Think about the time frame in which he grew up and where he grew up, and and he’s brilliant, and his ability to just synthesize data and understand not just the direct linkages, but the second and third derivative implications and policies that could be taken, the levers that could be pulled to move those second and third derivatives in a way that is beneficial to fix to really fix the issue and not just, you know, print money and try to paper over it. It’s he’s he’s very encouraging in my opinion.

Reactions to J.D. Vance’s Statements

TUCKER CARLSON: Kinda shocking. I think a lot of I mean, you don’t want to curse at me as the vice president, not the president. On the other hand, I think some people in the last month have looked at some of the things J. D. Vance has said and written and been sort of stunned by how deep and well expressed they are. You’re not used to

LUKE GROMEN: No. And and, you know, last weekend’s a perfect example. And and, again, I it goes to that whole the existing system that’s empirically been proven to not be what’s right for us. All you heard about last weekend was how he had insulted free speech in the UK and in the EU, and and I thought that what they were saying?

TUCKER CARLSON: Oh, don’t follow it.

LUKE GROMEN: Oh my goodness. They were they were they they every The monkey’s in wilting flower about, “oh, the liberal free speech and blah,” and I think they missed the they buried the lead. They missed the points. I mean, they’re just liars.

He he said, “Germany, you are the only country that did not follow, and I quote, the stupid Washington consensus of the ’70s, ’80s, and ’90s that deindustrialized Correct. All of us, and now you’re choosing to deindustrialize?”

Like, that passage alone tells you. The Biden administration blew up their effing natural gas pipeline. I mean, it deindustrialized the country for them, and they’re such self hating cucks that they said not a word about it. They’ve been trained for 80 years to hate themselves, and the net result is the total destruction of the heart of Europe, which is Germany. Sorry.

It is. It’s it’s been it’s it was shocking to me.

TUCKER CARLSON: How is this for the world? It’s not. How is this good for the United States to destroy Europe?

LUKE GROMEN: It it makes no sense. It’s vandalism on a scale that most people don’t understand, and I anyway, God bless J. D. Vance for saying that. He’s absolutely right.

And he’s and, yeah, and that ties back into this whole point of these policymakers are when was the last time you had the vice president of the United States call the ’70s, ’80s, ’90s, holy grail, this is the dollar system “stupid,” the “stupid Washington consensus?” I don’t ever remember hearing that.

And if it was a one off, okay. Whatever. But we’ve heard it, the interactions with Powell. Trump saying, “I want to make us, like, great like we were 1870 1913,” which is tariffs, low income tax, no income tax. Rubio saying, “listen, guys. We can’t make stuff. In 10 years, we’re going to be dependent on China for everything we need.” Bessent saying in his confirmation hearing, “Wall Street’s had a great run. Main Street has really suffered. It’s Main Street’s time. We need to pursue policies to bolster Main Street. Wall Street will still be okay. They’ll still do fine. Maybe not as well, but it’s Main Street’s time. We need a Main Street.”

These policymakers are telling us, and it all, in my opinion, goes back to the structure of the system, which is as long as we store global surpluses in our financial markets and in particular treasuries, that system is going to continue. You move to a neutral reserve asset like gold because now when they store money in gold, price of gold goes up, currencies can move around. We can it it’s a natural rebalancing mechanism.

The dollar will weaken against other against the yuan. Right? What have we been saying? We want the Chinese to weaken yuan weaken the yuan or, excuse me, strengthen yuan. Strength in yuan. Strength in yuan. Strength in yuan. If gold goes up in dollars and doesn’t go up as much in Yuan by virtual flows into you know, dollar flows into gold and fewer Yuan flows into into gold, the dollar’s going to go down versus the Yuan, which is the very thing we’ve been trying to get the Chinese to do to stop dumping so much product, cheap product here. Gold take care of it. It’s it it it it just does what

TUCKER CARLSON: It’s the the most advising the new administration?

LUKE GROMEN: No.

The Potential for Ferocious Resistance to Change

TUCKER CARLSON: I hope you will. The I I guess the only criticism I would have of your critique, which I think is kind of brilliant and very well explained, is that I think you may be undervaluing or underrating the ferocity of the response. I just I don’t disagree. I’m from DC, and I I just think the state the stakeholders, as we call them, the people who are benefiting from the system in place, can be really ferocious in protecting that.

LUKE GROMEN: I I agree. And one of the things I I don’t have as much familiarity with that, and so I would admit naivete towards the degree of that to a certain extent. One thing I would say to me like a million people in Ukraine for, like, no reason. So, clearly, they they don’t care about the human cost.

Well, and and it’s the the from a layman’s perspective, I thought a lot of the Trump appointments were interesting in and of themselves. But as you know, there’s appointments and then there’s confirmations. And so I was withholding judgment to see and I think there is some to me, again, as a as a Washington layman, encouraging Yeah. That he picked Vance, number one, after what Vance said.

TUCKER CARLSON: Most important. Most important thing. I agree.

LUKE GROMEN: So, okay, Vance gets it on that policy. But then when you see when you see Tulsi, very unpopular in the Beltway. Okay? Not only did she get picked, she gets confirmed.

RFK junior I know. Not only gets picked, but gets confirmed. Like, Cash yesterday. Okay. Another so point being that you are seeing, you know, Hagsteth, unpopular or confirmed.

So the there’s this slate of people that are non sort of deep state, if we will, get picked and get confirmed. And so to me, you know, I would I would defer to your judgment, but as a layman to Washington, the fact they got picked and then that they got confirmed is at least encouraging that that fight that I think is presents executional risk to this optimistic view of where we could be in two, three, five, 10 years.

In my opinion, it’s those appointments and what have you have have, on some level, mitigated or at least they’re victories. They’re they’re victories.

TUCKER CARLSON: Huge victories. And, you know, we’re now 31 days in. I don’t know when this is going to air, but we’re a month and a day into the administration, and they’ve won almost everything except Matt Gaetz, and, you know, I think it’s incredible. I’ve never seen anything like this. Nothing like this has happened in my lifetime in Washington.

On the other hand, it was really a victory over the Republican Senate, which is a collection of some of the worst people I’ve ever met, but also some of the dumbest and weakest.

And so it’s a great victory, and I love to see them humiliated, and, you know, every day that some of these people weep is a happy day for me. On the other hand, like, they’re not you know, some of the stakeholders in the current financial system are smart and serious, and they, you know, they are not people to play with at all. I think they’re completely ruthless. I think they are, you know, willing to resort to things. It’s hard to even to imagine, and I don’t know.

I just think there’s a fight ahead. I I think it’s I I would defer to your judgment on it, but I intuitively makes perfect sense to me. Yeah.

Advice for the Average Investor

TUCKER CARLSON: One last question. Where does this leave the the average person, the retail investor, whatever we’re calling that person now, on the question of gold?

Like, you know, I mean, if governments love gold, if gold plays a really essential part of the global financial system, which you’ve described, I think, in great detail, is it wise for the average person to take delivery on gold and carry it in his yard?

LUKE GROMEN: Yes. I think I think the average investor should have probably 5% to 10% of their net worth in gold bullion coins. It’s fascinating. Throughout I’ve been in the investment research business for 30 years, and one of the it’s offensive on some level, but it’s it’s it’s it’s an old saw because it’s true, is once you start to see retail investing retail investors plowing into something en masse Right.

Run away. And a lot of times, the banks too, by the way, the commercial banks Yeah. Yeah. Run away. And, you know, we saw that with, you know, dot com stuff in the late ’90s.

TUCKER CARLSON: That’s dot com. I’m not saying You remember them well. I remember them well. Right? And then it was, you know, sand state real estate, subprime mortgages, and and those kind of things.

The Dangers of Retail Investors in Treasury Bonds

LUKE GROMEN: And in the last three to four years, the biggest marginal buyer of long term US treasury bonds has been the the the US retail. They’ve been investment funds. Right? So the biggest buyers of of of two, three, five, seven, 10, 20, and 30 year US treasury bonds, they’ve been buying anywhere from 60% to 70% of new issuance for the last three to four, five years.

And that’s I’m not saying there’s any risk to treasury bonds on a nominal basis. There isn’t.

TUCKER CARLSON: However No. It sounds totally safe.

LUKE GROMEN: You’re going to get every dime you’re promised, but we can’t guarantee you what that those those those dollars will buy you in the real world. Those dimes will be worth.

The Rigged System of Government Debt and Currency

TUCKER CARLSON: Right. That’s why, you know, when you you’ve got this dichotomy where for 40 years, you know, from 1974 to 2014, global central banks were buying treasury bonds, and they were selling gold. Why would you ever buy a bond from from the same person who can print the currency? I just don’t understand that. I mean If you believe the inflation numbers that like, look.

There are I mean, it’s it’s kind of like a rigged system. Right? Like, the government is issuing the debt, which is held in a specific currency, but that same government prints that currency.

LUKE GROMEN: Yeah. And that’s why they’re they’re so hyper focused on the Fed and manage Oh, I know. It’s it’s doesn’t make any sense. It’s like a rigged game.

TUCKER CARLSON: It is. My ignorance protects me from bad investments because, like, if it doesn’t make sense, I’m not not that I invest, but, like, you know what I mean?

LUKE GROMEN: No. And intuition is to be trusted.

TUCKER CARLSON: Well, that just doesn’t make Doesn’t make sense. That was ultimately why I first got an interest in gold. Because, well, Bola, the key question is not do you get paid back what they owe you. The key question is what you just said, which is what is the value of what they pay you back?

You may get every dime back, but maybe those dimes aren’t worth anything.

LUKE GROMEN: Well and that’s They determine what the dimes are worth, so it’s a rig deal. Oh, it’s and it’s that’s why I first got involved in gold. I never owned gold before 2000 late 2008 or early 2009 when they’ve when the US, you know, depths of the great financial crisis came out and they said, “okay. Now we’re going to print a trillion dollars, and we’re going to buy treasury bonds, QE.”

And I remember thinking to myself going, “how can an oil producer like Russia or our factory base like China look at that and say, ‘so I’m going to expend all this energy to pump this oil and produce it and refine it and ship it and send it and pay you for dollars and then put that those dollars into treasury bonds, and you’re just going to click a couple keys on a computer and buy a trillion dollars of treasury,’ why would I sell my oil and store my surpluses in treasuries?”

That was what first and sure enough, guess what happened later in 2008 or and and and into 2009, 2010? Russia started buying gold in their reserves.

TUCKER CARLSON: Of course. The Chinese, same thing.

LUKE GROMEN: How could you sell all this stuff to the United States? Store them in treasury. Yeah. And and store it in treasury bonds and have the Americans print it. And sure enough, Chinese gold purchases started ramping.

The Boomer Generation and Entitlements

TUCKER CARLSON: So for me, when you when you go back to what does it mean for US retail, it’s the same type of dynamic. The United States government owes its baby boomers. Right now, it’s United States takes $5 trillion a year in tax receipts, and right now, we’re paying baby boomers and entitlements $3.3 trillion of that. So about almost 70% of receipts are going to boomers and ever been a generation that deserves it less?

I’m I’m serious. Has there ever been a generation that has there ever been a more destructive generation, a more self involved generation, a a more annoying generation, if I could just I take you know, as a gen expert, I take it again.

LUKE GROMEN: It’s it’s I try to put myself in their shoes, and it’s it’s look. If I was born when they were born and their parents came home from World War II and basically had, you know, 16 kids and, like, let them to go be free range chickens, and they they just sort of

TUCKER CARLSON: I love all that. They were general they were they were a product of the environment and with that time they lived. Talking about themselves. That’s I I love huge families. I love prosperity. I like peace and freedom. I like all that stuff.

What I don’t like is self involvement, and those people never stop telling their own story. The stupid Vietnam wars, every cliche about Woodstock and the dumb civil rights movement, which actually didn’t really help anybody, and everything about it was just like just it was just they were drowning in Lake Mead, and I was raised around people like that, and they were my teachers. And I every single one of my teachers went to Woodstock. Every single one of my teachers was some sit in and some lunch counter in Greensboro, so it’s like they all were participating in these same mass market cliches, which they thought were like a sign of, you know, unique individualism or something, but they were all like a herd. They were like dumb and narcissistic and mediocre.

Did you not notice that?

LUKE GROMEN: I would agree with the narcissism as a generation. Yeah. I would agree with that.

TUCKER CARLSON: Talking about Selma all the time, and I would be like, how is Selma? Have you ever been to Selma? Like, it’s an actual place with actual people. Like, are they thriving? You know, all these people are, like, you know, just lecturing you about how great they were because they were at Selma, and I was I was wanting and then I wind up in Selma. Have ever been to Selma?

LUKE GROMEN: I’ve never been to Selma.

TUCKER CARLSON: Yeah. You should go to Selma. And and then you can tell them to, like, shut up, actually, because, like, the sum total of your efforts was, you know, like, poverty, despair, and chaos. Like, you didn’t actually achieve anything, so be quiet.

Sorry. You can feel my resentment.

LUKE GROMEN: No. No. No. That’s it’s I hate this.

Inflation as a Way to Transfer Wealth from Boomers

LUKE GROMEN: So think about that. Right? So if you’re getting $3.3 trillion in receipts or it’s $5 trillion in receipts for a retreat.

TUCKER CARLSON: Nice, and I’m like, that they’re lunatics.

LUKE GROMEN: The But how how do you get them to pay more for their own care? Well, simple. You get them into treasury bonds, and then you tell them inflation’s 4%. You give them a 4.4% up percent on the treasury bond, and you actually let inflation run 6%. Right.

TUCKER CARLSON: Exactly. And that’s why you need to also, as an investor, whether you’re a boomer, whether you’re not a boomer or younger, you need to own some gold because over time, you’ll lose on your bonds, but your gold will more than compensate you for that inflation. You’re maintain your purchasing power. And, you know, I think your stocks will in certain know, if if broadly diversified, but that gold is ultimately the release valve that that is happening, that that and and it needs to happen.

But, basically, we’re not going to be able to have an election where and and say, “hey, boomers. We need you to pay more for your care.” Then no no politician will be in office after trying to do that if they raise taxes on boomers to do that. So what do they do? Because they can’t do that, they take sort of the politically uncourageous way out, which is you inflate. You have to inflate and that’s what they’re doing, what they have been doing, what they’re going to continue to keep doing in my opinion and that’s why I think you want to own I think retail investors need to own 5%, 10% of their of their assets in gold bullion.

The Potential for Gold Price Appreciation

TUCKER CARLSON: So is it what? I didn’t check the spot price this morning, but $2,950 ish.

LUKE GROMEN: Ish.

TUCKER CARLSON: Where do you think it goes in the next I I know you hate questions like this, but, like, I mean, I can’t resist. Final question. Where, you know, where could gold gold go?

LUKE GROMEN: So this is something in our business. They say if you give a price, never give a time. Right.

TUCKER CARLSON: No time, never a price. I’m sorry.

LUKE GROMEN: No. It’s okay. It’s okay. No. I I I I do it to to be self aware and parody myself on some level. But in all seriousness, over time, one of the metrics I have looked at when we’re talking about a restructuring of a system, we talk about the debt levels being a problem, all these things.

I have a metric that looks at the market value of US official gold. Right? So let’s let’s pretend it’s all there. We had that discussion already. Let’s pretend it’s all there or it’s being brought back here maybe as we speak, but it’s all there. There’s a metric that I follow that is the US official gold as a percentage of the foreign held portion of the US federal debt. Right? So it’s what percentage at market price, what percentage is the United States official gold collateralizing our foreign held debt?

Because in the end, we can cram down our own people, but we have to we have to Yeah. Yeah. Maintain foreign creditors. Yeah. So long term, the average going back to, I think, 1960 or 1950, that number was 40%.

US official gold at market price collateralized our debt by, on average, 40%. As recently as 1989, that number was 20%. In the in the dollar crisis of ’79 ’80, that number was 135%. That was a true gold bubble. In other words, if our foreign creditors would have been so inclined, we did it, they could have demanded gold for treasuries, and we still would have had a third of our gold left over.

Okay. Where is that number today? That number today with gold having risen 40% in the last year is at 9%. Yeah. It’s bad.

So gold, in my opinion, minimum over time, probably has to rise at least 2x and probably more like 4x just to get back to historical levels, assuming no further growth in the debt and assuming no ever again and assuming no dollar crisis that leads it to go over 40%. And so I it’s still paradoxically one of the cheapest assets on the board when you look at it relative to the debt outstanding and the way this probably needs to be resolved from a debt perspective and an economic restructuring perspective?

TUCKER CARLSON: China clearly thinks so.

LUKE GROMEN: Yep. If people found what you said compelling and smart and really insightful, my views, where do they read more of your insights?

We have institutional and mass market products at FFTT dash LLC dot com. I appreciate it. Thank you.

TUCKER CARLSON: Thank you.

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