In this week’s Money Metals Midweek Memo, host Mike Maharrey examined what he calls the debasement trade. It is the growing preference for tangible assets such as gold and silver as protection against the declining purchasing power of fiat currencies.
Maharrey framed the trend as a matter of trust. If people no longer trust the institutions managing their money, he argued, they will naturally seek assets that are not created or controlled by those institutions. Gold and silver have historically filled that role because they are not issued by governments and carry no direct currency-debasement risk.
The underlying question, according to Maharrey, is not whether governments will continue to borrow and spend, but how long markets will tolerate the consequences.
A Gold Bull Market With No Clear Off-Ramp
Maharrey said he is generally reluctant to put a timetable on major market events. Fiscal and monetary problems often take longer to manifest than people expect, even when the broad direction is clear.
Still, he highlighted comments from John LaForge, chief alternative investment strategist at Ned Davis Research, who linked the outlook for gold to governments’ willingness, or unwillingness, to confront their debt burdens.
LaForge said gold prices could continue rising until policymakers learn how to address the debt problem. As long as governments continue piling up debt rather than paying it down, he argued, higher gold prices remain possible.
Maharrey’s interpretation was straightforward. The debt trend is a powerful long-term tailwind for gold. With U.S. national debt near $40 trillion and politicians facing incentives to avoid painful fiscal reforms, he argued that the political system is more likely to keep postponing the problem than resolve it.
That does not mean every move in gold will be higher. Maharrey acknowledged that precious metals can be volatile and can experience sharp corrections. But he maintained that continued currency depreciation and unresolved debt problems create a long-term backdrop favorable to gold and silver.
Norway’s $80 Billion Treasury Signal
One recent development cited in the episode came from Norges Bank Investment Management, which manages Norway’s sovereign wealth fund, the world’s largest. The fund oversees roughly $2.3 trillion in assets accumulated from Norway’s oil and gas wealth.
The fund has proposed reducing government bonds from 70% to 50% of its broader bond benchmark. Maharrey said that, in practical terms, the move could require the fund to shed approximately $80 billion in U.S. Treasury holdings, along with around $20 billion in Japanese government bonds and a reduction in euro-area government debt.
The shift is intended to preserve sufficient liquidity for periods of market stress. The transactions are not expected immediately. Maharrey noted reports suggesting they may not occur until early 2027. Nevertheless, he described the announcement as an important signal from a major global investor that government bonds are no longer being treated as unquestioned safe havens.
He also cautioned against interpreting the decision as evidence of an imminent dollar collapse. Citing Vantage Point Asset Management CIO Nick Ferres, Maharrey noted that unsustainable debt and deficits are widespread across advanced economies, but a shift by Norway’s fund does not necessarily mean a financial crisis is arriving tomorrow.
Bond Bear Market Pressures Build
Maharrey argued that Norway’s decision fits into a broader shift in the bond market. For decades, U.S. Treasury debt served as a primary safe asset for governments, banks, and institutional investors. But persistent deficits, inflation concerns, rising borrowing needs, and policy uncertainty have put pressure on that role.
He pointed to the 10-year Treasury yield, which rose from roughly 1.5% in late 2021 to nearly 5% in fall 2023. Despite Federal Reserve rate cuts and geopolitical events that traditionally might have pushed investors toward Treasuries, yields have remained elevated.
Bond prices and yields move in opposite directions. When investors demand less government debt, bond prices fall, and yields rise. Higher yields, in turn, increase the government’s borrowing costs.
Maharrey said this creates a feedback loop for Washington. The government must borrow heavily to fund deficits, yet higher interest rates make servicing existing debt more expensive, requiring still more borrowing.
Through the first 10 months of fiscal 2026, he said, U.S. interest expense reached $1.17 trillion, up 15.5% from the same period in fiscal 2025. That followed a 7.3% increase in fiscal 2025 interest costs compared with 2024.
He also discussed Treasury Secretary Scott Bessent’s long-end bond buyback effort, intended to support 10-year, 20-year, and 30-year bonds and ease upward pressure on yields. Maharrey argued that the market response was short-lived and that the move may have instead highlighted official concern about the bond market.
Dollar Weaponization and Foreign Demand
Debt is not the only reason overseas institutions are reassessing their exposure to dollars and Treasuries. Maharrey said the United States and its allies freezing Russian dollar-denominated assets after Russia invaded Ukraine accelerated concerns about the weaponization of reserve currencies.
He did not debate the policy merits of sanctions. Instead, he focused on their consequences for countries holding reserves abroad. Governments that see the dollar used as a tool of economic pressure may decide to diversify away from dollar assets, he said.
Maharrey cited China as an example. According to figures mentioned in the episode, China had reduced its Treasury holdings to $652.3 billion, its lowest level since September 2008.
This does not mean the dollar will lose its reserve-currency role overnight. But Maharrey argued that diversification away from Treasuries, increased central-bank gold buying, and more interest in alternative reserve assets all point in the same direction. That is a gradual reduction in reliance on U.S. debt.
Netherlands Moves 86 Tonnes of Gold
The episode also examined the Netherlands’ recent gold relocation. De Nederlandsche Bank, or DNB, moved approximately 86 metric tonnes of gold from North America to London between March and August 2026, citing rising geopolitical unrest and a desire to strengthen crisis preparedness.
The move was not a simple shipment of all the metal. DNB sold about 59 tonnes of gold stored in New York and used the proceeds to purchase replacement bullion in London. More than 27 tonnes were physically transferred from the United States and Canada to Zeist in the Netherlands, while a similar quantity was moved from Zeist to London.
DNB said the relocation improved the tradability and accessibility of its reserves. After the change, London held 32.1% of Dutch gold reserves, while both New York and Ottawa held 18.5%. The central bank’s total gold holdings remained unchanged at 612.4 tonnes.
Maharrey emphasized the role of counterparty risk. Gold itself does not depend on another party’s promise to pay, but gold stored abroad can still create custody and access risks. In a crisis, the location, form, and market acceptability of bullion can matter.
London’s role as a major physical gold-trading center was central to DNB’s decision. Gold stored at the Bank of England meets modern international trading standards and can be accessed or traded more readily in a crisis than some older bars held elsewhere.
Gold Repatriation Is a Wider Trend
The Netherlands is not alone. Maharrey noted that France recently replaced non-standard gold bars previously held in New York with new bars meeting international reserve standards, with the upgraded bullion retained in France.
Germany repatriated 674 tonnes of gold from Paris and New York beginning in 2013, though the Bundesbank still stores roughly one-third of its reserves in New York. Calls for further repatriation have continued in Germany amid concerns about geopolitical risk and strategic independence.
India has also been actively bringing gold home. Maharrey said the Reserve Bank of India repatriated 100 tonnes from the United Kingdom in spring 2024, followed by another 104 tonnes. India now reportedly holds about 680 tonnes of its 880-tonne gold reserve, or roughly 77%, within its own borders.
The broader trend is reflected in central-bank vaulting preferences. Maharrey cited World Gold Council survey data showing that 57% of surveyed central banks held some gold in the United Kingdom, down from 64% a year earlier. Domestic vaulting was preferred by 49%, while the share holding at least some gold in New York fell from 17% to 14%.
Preparing for a Long-Term Currency Trend
Maharrey’s central conclusion was that the debasement trade is driven by long-term fiscal and monetary incentives, not a single administration or a short-lived political cycle.
He argued that governments have committed themselves to inflation targets that steadily erode purchasing power, and that actual inflation may exceed those targets when deficits and debt-service costs become harder to manage.
For investors and savers, Maharrey said the challenge is preparation rather than market timing. Waiting until a financial crisis is obvious, he argued, is like buying fire insurance after a house has already caught fire.
The episode closed with Maharrey’s view that gold and silver can help investors diversify away from fiat-currency risk.
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