Gold vs Bitcoin: The Ultimate 2025 Debasement Trade
🎯 Summary
Podcast Episode Summary: Gold vs Bitcoin: The Ultimate 2025 Debasement Trade
This episode of the Pomp Podcast, hosted by Anthony Pompliano (“Pomp”), features a deep dive into the macro environment, focusing on the accelerating de-dollarization trend and the resulting investment thesis favoring gold over Bitcoin as the primary hedge against currency debasement leading into 2025.
1. Focus Area
The discussion centers on Macroeconomics, Monetary Policy, and Asset Allocation, specifically comparing Gold and Bitcoin as “de-dollarization trades” amidst perceived reckless fiscal spending and the erosion of faith in the US Federal Reserve’s independence and inflation targets.
2. Key Technical Insights
- Inflation Measurement Flaw: The Consumer Price Index (CPI) is deemed a fundamentally flawed measure of inflation, intentionally designed by the government to understate the true impact of money supply expansion (M2 growth is cited as growing 2.5x faster than CPI).
- Gold as True Monetary Asset: Gold is positioned as the only viable, non-confiscatable monetary alternative to the dollar, harkening back to the pre-1971 gold-backed system.
- Bitcoin as Risk Asset: Bitcoin is characterized as highly correlated with tech stocks (like the Nasdaq) and therefore a speculative risk asset, not a true safe haven like gold, making it vulnerable during broader risk-off environments.
3. Market/Investment Angle
- Gold Bull Run Drivers: The current rally in precious metals is driven by accelerating de-dollarization following sanctions on Russia and perceived irresponsible spending by both the Trump and Biden administrations, signaling to foreign central banks that they must exit dollar reserves.
- Portfolio Allocation Shift: Mainstream Wall Street is finally recognizing gold’s role, with suggestions moving the traditional 60/40 portfolio toward a 60/20/20 split (Stocks/Bonds/Gold).
- Prediction for 2025: The guest predicts aggressive price targets for precious metals: Silver potentially hitting $100, and Gold reaching $5,000 by the end of 2025, possibly $6,000 thereafter, fueled by central bank buying competing with new private investor demand.
4. Notable Companies/People
- Peter Schiff (Guest): The primary voice arguing for gold’s dominance, referencing his long-standing predictions (e.g., $5,000 gold target from 2014) and highlighting the weakness of the Bitcoin narrative.
- Ray Dalio: Mentioned for advocating a 15% allocation to gold in a portfolio.
- Morgan Stanley: Cited for recommending a 60/20/20 portfolio allocation, signaling institutional acceptance of higher gold exposure.
- China’s Central Bank: Identified as a major catalyst for the gold rally due to aggressive, strategic divestment from USD reserves.
- Matt Hogan (Bitwise CIO): Mentioned via an advertisement for his weekly crypto memo.
5. Regulatory/Policy Discussion
- Erosion of Fed Independence: The conversation heavily critiques the Federal Reserve, arguing that its independence is a “pretense” being exposed by political pressure (especially from the Trump administration seeking lower rates). This politicalization destroys confidence in the dollar.
- Fed Policy Critique: The Fed is accused of cutting rates into rising inflation and using labor market weakness (partially attributed to immigration and AI) as an excuse to fuel inflation and prop up asset prices, rather than addressing structural economic issues.
6. Future Implications
The conversation strongly suggests a global transition away from the US Dollar standard toward a Gold Standard (or a system where gold is the ultimate reserve asset). This transition will be driven by geopolitical adversaries (like China) and domestic fiscal irresponsibility, leading to sustained, aggressive appreciation in gold prices. Bitcoin investors who sold gold to buy Bitcoin ETFs are predicted to rotate back into gold as they realize Bitcoin failed to act as a true safe haven during market stress.
7. Target Audience
Investment Professionals, Macro Strategists, and Sophisticated Retail Investors focused on inflation hedging, currency risk, and long-term asset allocation strategies, particularly those interested in the ongoing debate between traditional hard assets (gold) and digital assets (Bitcoin).
🏢 Companies Mentioned
💬 Key Insights
"BitLayer is taking Bitcoin beyond just a store of value. For the first time, you can put your Bitcoin to work, earning yield while staying true to its core principles of security and decentralization."
"And then you have a lot of these Bitcoin treasury companies that have also been the big buyers of Bitcoin. I think that whole trade is going to blow up, and a lot of these Bitcoin treasury companies are going to go out of business. And when they have a going-out-of-business sale, what are they going to sell? Well, they only have one thing to sell: their Bitcoin."
"I think Bitcoin is much more highly correlated with the Nasdaq and, yeah, you know, tech stocks. ... if we have an overall decline in the stock market, the gold bull market can continue. The Bitcoin rally can't because Bitcoin is going to follow other risk assets because at the end of the day, that's what it is."
"I think there is something about gold and Bitcoin, which is, I don't have to trust anyone. There's no monetary policy that's being set. There's no kind of backdoor meetings. There's no pressure from politicians in terms of what's going to change about these assets."
"What really is inflation is not prices rising. That's an effect of inflation. It is an expansion of the money supply, which includes credit."
"The CPI is a very flawed measure of the effects of inflation. And that is by design. It's not a coincidence that the government designed a methodology for tracking inflation that understates how much inflation there is because the government creates inflation on purpose."