Two Wars Over One Currency

Disclosure: Pineda Family holds positions in gold and silver.

Thirty-three years in technology taught me one thing about infrastructure transitions: the most consequential moments are not when a new system is announced. They are when the old system visibly strains under the weight of what replaced it.

On 22 April 2026, US Treasury Secretary Scott Bessent confirmed that numerous Gulf and Asian allies had requested dollar swap lines amid the economic fallout from the Iran war. He framed it carefully — swap lines “to maintain order in the dollar-funding markets and to prevent the sale of US assets in a disorderly way.”

Read that sentence slowly.

The world’s reserve currency system is under enough stress that the Treasury Secretary felt compelled to confirm, publicly, that allies are being given emergency dollar support to prevent a fire sale of US assets.

That is not a normal sentence.

I wrote a version of this piece in late June, built around a specific date — 4 July 2026, the 250th anniversary of the American republic, when some combination of circumstances suggested a formal monetary announcement might land. It did not. The administration made no gold revaluation declaration. The moment passed quietly.

Gold, which dipped below $4,000 in late June, is around $4,180 as I write this in October.

The thesis did not need the ceremony. The structure was always the driver, and the structural forces I described in June are now four months further advanced. The price is modestly higher than at the late-June low. That proves nothing either way, which is exactly why the discipline section below matters more than the forecast.

The anomaly that still has not closed

The United States government holds approximately 8,133 tonnes of gold in its vaults — Fort Knox, Denver, West Point and a small amount at the Federal Reserve Bank of New York.

It has been valued on the Treasury’s balance sheet at $42.22 per ounce since 1973.

At the time of writing, gold trades at around $4,180 per ounce.

The gap between those two numbers is not an accounting curiosity. It is roughly a $1.1 trillion unrealised asset sitting inside the US government’s balance sheet, marked at a price set fifty-three years ago — a price that has now been wrong by a factor of nearly one hundred.

Every serious student of monetary history knows this. Most treat it as trivia. A small number of people — including, it appears, some inside the current administration — understand that this gap is a policy instrument.

Here is the mechanism: a Presidential Executive Order, or a Treasury ruling, could revalue the statutory gold price to market. The effect would be immediate: the Exchange Stabilisation Fund would be recapitalised overnight by over a trillion dollars without a single Congressional vote, the US debt-to-GDP ratio would fall materially on paper, and the signal sent to the world’s central banks, sovereign wealth funds, and family offices would be unambiguous.

Gold is money again. The United States just said so.

This is not a fringe theory. Revaluation is a policy option that has been discussed openly in monetary policy circles for years. Some commentators on the so-called Mar-a-Lago Accord ideas have pointed to gold revaluation as one possible mechanism for addressing the structural overvaluation of the US dollar and the trade deficit it produces.

The formal announcement has not come. The structural conditions that would make it attractive have, if anything, strengthened.

Why the conditions remain aligned

Four conditions need to be present simultaneously for a gold revaluation to be politically executable. In October 2026, all four remain in place.

Condition 1 — Dollar funding stress is acute and visible

Bessent’s swap line comment in April was not a routine statement. Swap lines are activated when dollar liquidity is tightening in ways that threaten disorderly asset sales. The Iran war disrupted Gulf energy markets, strained the dollar-funding needs of energy-importing Asian economies, and accelerated the already-underway diversification away from dollar reserves by central banks that had been quietly watching SWIFT weaponisation since 2022. That pressure did not resolve over the summer. It has continued to develop.

Condition 2 — The administration has the ideological framework

The Mar-a-Lago Accord is not a conspiracy theory. It is a policy framework circulating in Washington that treats dollar overvaluation as a structural problem for American manufacturing and trade — and proposes a managed devaluation as the solution. The current Treasury Secretary has spoken publicly about the dollar’s role in the international monetary system in ways that signal awareness of — and sympathy for — restructuring. This framework did not expire in July.

Condition 3 — The fiscal math makes it attractive

The US federal debt has passed $40 trillion. Congressional appetite for debt ceiling increases is limited. A gold revaluation that recapitalises the ESF by over a trillion dollars provides fiscal headroom without a Congressional vote. For an administration that has shown willingness to use executive authority aggressively, this is a meaningful consideration. The arithmetic has not changed.

Condition 4 — The political window remains open

The symbolic moment of the 250th anniversary came and went. But the political window did not close with it. An administration that frames economic policy through a lens of national renewal has multiple occasions — trade deal announcements, legislative milestones, market stress events — that could serve as backdrops for a monetary statement. The absence of an announcement in July tells us precisely nothing about whether one is coming. It tells us the conditions were insufficient in July. The conditions in October are not weaker.

What I watch instead of dates: Bessent’s comments on the dollar’s structural role in global trade. Movement in gold lease rates. Central bank purchase data from the IMF’s monthly IFS release. The signal is more likely to come from those than from a calendar.

Two wars, one neutral asset

Zoom out from the revaluation scenario entirely. Even without a formal announcement, the structural picture points in the same direction.

The dollar system is being re-architected simultaneously by two opposing camps — and gold is the neutral asset both sides end up relying on.

Camp 1 — The US establishment entrenching the dollar digitally

The GENIUS Act (2025) created a regulatory framework for dollar-backed stablecoins. JPMorgan, Citigroup, Bank of America, and Wells Fargo are building a tokenised deposit network, with other banks, targeting a first-half 2027 launch. Stablecoins have been framed in Washington as a dollar-dominance strategy: the private sector creating synthetic Treasury demand at scale.

This is not dollar weakness. This is dollar entrenchment via digital infrastructure. And it is being built at exactly the moment that dollar credibility as a neutral reserve asset is being questioned by the other camp.

Camp 2 — The BRICS bloc escaping the dollar

CIPS (China’s alternative to SWIFT) processed roughly 180 trillion yuan (about US$25 trillion) in 2025. The mBridge cross-border CBDC network has expanded to six members, most recently Macao. By some estimates, around two-thirds of intra-BRICS trade is now settled in local currencies rather than dollars. And central banks — led by the PBOC, now in its twenty-third consecutive month of gold purchases — bought about 860 tonnes in 2025, building gold as the neutral reserve asset for a post-dollar settlement system.

Why gold sits at the centre of both

If the US succeeds in re-platforming the dollar onto digital rails and maintaining reserve status — gold is the credibility anchor the Treasury eventually revalues to signal monetary seriousness. The stablecoin infrastructure needs backing. The backing that is politically credible globally is not more Treasuries. It is gold.

If the BRICS bloc succeeds in building a parallel settlement system — gold is the neutral reserve asset at its centre. A multipolar monetary world needs a numeraire that neither Washington nor Beijing controls. Gold is the only candidate with 5,000 years of track record.

The contest itself is the demand driver. The argument does not depend on which camp wins. It depends on the contest continuing, and on central banks on both sides wanting gold while it does.

How we are applying the discipline

What follows describes how our own family office is handling this, not what anyone else should do. Whether gold or silver belongs in a particular portfolio, and at what weight, depends on circumstances an essay cannot know.

Gold

A volatile year tests a framework more than a calm one does. The exit rules we set (price levels, a ceiling on portfolio weight, allocation thresholds) were written for exactly the stretch when a thesis appears to be paying off and confirmation bias is strongest. The question we are asking is not whether the thesis is working. It is whether those rules were calibrated for swings of this size, or quietly assumed a calmer path, and whether they still match the position as it stands today rather than the position we held when we wrote them.

Silver

The gold-silver ratio, around 61 in mid-June, sat above 72 in mid-October. In past monetary stress, notably 1980 and 2011, the ratio later narrowed sharply. History does not oblige it to do so again, and the honest reading of a wide ratio is that silver has lagged, not that it must catch up.

Our trims are pre-committed and written down. At each one, the anti-anchoring check applies: would we buy the current position size fresh at today’s price? That question governs the decision, not the cost base.

The discipline that matters most

The most dangerous period in a thesis that appears to be working is not the event itself. It is the long stretch afterwards, when the score is positive, the narrative feels inevitable, and the temptation is to hold longer, add more, or defer the decisions the framework set in advance. A written framework exists for that period. Its value is that it was decided before the temptation arrived.

Three questions we are asking this month

1. Does our exit framework still match the position?

Rules set at one price and position size describe a different dollar exposure after a year of large swings. We are checking that the trim levels and ratio triggers are documented against the portfolio as it is now.

2. Do we understand the tax position in each structure?

The treatment of a large gain differs depending on whether an asset sits in a superannuation fund, a discretionary trust or a direct holding. That is a conversation with a tax adviser, and it is better had while nothing is forcing a decision.

3. Are we watching the few signals that matter?

Commentary from the US Treasury on the dollar’s structural role in trade. Gold lease rates, where unusual movements can indicate institutional positioning. The IMF’s monthly International Financial Statistics release on central bank gold holdings. Most of the rest is noise.

The argument here is not a prediction. It is a framework for watching a structural change unfold, and the framework is the point.

The price was always wrong. The only question was always when the accounting catches up with reality.