Gold: A Gift Fit for a King!

Talk about a Christmas gift!

Gold and silver both hit new record highs Christmas week, with gold eclipsing $4,500 and silver above $70.

But are these precious metals in a bubble?

In this episode of the Midweek Memo podcast, Mike Maharrey argues that they are not. He thinks that the gold and silver markets are telling us something — that they are signaling an important monetary paradigm shift.

This week, Mike also explains why the Magi gave the gift of gold to Jesus and tells you where that gold is today and how it got there. (Yes, we know!)

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Mike opens the show by wishing the audience a Merry Christmas.

“Since tomorrow is Christmas Eve, I decided to do the podcast a day early. So, this year, you get a Christmas Eve Eve podcast!

“And it’s going to be a little bit different because, quite frankly, I’m not really feeling the whole work thing. I kind of miss being in school when you have the entire week of Christmas and the week after off. My brain still kind of operates on that schedule, to be honest. Yesterday was not exactly productive, and I don’t have much hope for today, beyond this podcast – although I am fairly certain I am going to produce an amazing pecan pie this evening!”

Mike notes that he would be remiss if he didn’t mention the most recent rally in both the gold and silver prices.

“As I sat down to prep for the show, gold was over $4,500 and ounce, and silver had just nudged above $70.

“This raises a question: are precious metals in a bubble? Or is this rapid increase in the gold price telling us something else? Are we in the midst of a monetary paradigm shift?”

Mike highlights a recent article by Edward Chancellor published by Reuters that makes the paradigm shift case.

Some analysts argue that gold is behaving much like it did in 1979, but things are different today.

“The price rose rapidly through the 70s only to crash in the early 1980s when Paul Volcker cranked interest rates to 20 percent to slay the inflation dragon. After its peak in late 1979, gold gave up nearly two-thirds of its price. But it’s not the early 80s, and needless to say, no Volcker is waiting in the wings. The next Federal Reserve Chairman is likely to be even more inclined toward easy money than Jerome Powell.”

Chancellor notes that gold’s market valuation “tends to reflect different monetary regimes,” and this bull market may well signal another transition.

Using Chancellor’s article as a springboard, Mike explains how gold has been rising despite surging real rates on the long end of the yield curve. This is a fundamental change in dynamics, or as Chancellor put it, “an inversion of an old mental model.“

What exactly happened that might have brought this on?

“The U.S. and its allies aggressively sanctioned Russia after it invaded Ukraine. Then, in the spring of 2024, the Biden administration threatened to liquidate and sell some $300 billion in frozen Russian assets. This https://www.moneymetals.com/news/2025/03/13/the-weaponization-of-the-dollar-and-its-global-implications-003905">weaponization of the dollar drove gold to fresh record highs. Using U.S. bonds and the dollar as a foreign policy billy club could certainly incentivize other countries to ‘behave,’ but it also sends another message – get out of dollars while you can.”

Mike asserts that this is one of the reasons central banks are aggressively buying gold.

“You might look at the sudden surge in central bank gold buying and dub it a bubble. But Chancellor noted, ‘The irrational exuberance that normally accompanies a mania is absent.’”

He pointed out that despite the record-high prices, gold ETF holdings remain below the pandemic peak in 2020.

The monetary and fiscal background is also much different from what it was in 1979. The U.S. is no longer a creditor, but the world’s largest debtor. Debt to GDP has grown from around 30 percent in the 70s to 120 percent today.

“I should mention here that we have a central bank that seems determined to cut interest rates in this inflationary environment. I’ve talked about this ad nauseam. They have to cut because we have a giant Debt Black Hole warping the entire economy. The economy can’t function in even a moderate interest rate environment. And the easy money spigot is really going to open up once President Trump gets his man in position as Fed Chair.”

Mike brings up another key point to remember.

“No matter what the government reports say, inflation is here to stay. It is the stated policy. Even when it is under control, they’re still devaluing your money 10 percent every five years.”

If we are seeing a paradigm shift, it isn’t complete. While central banks have been loading up on gold, investors own very little of the yellow metal, particularly in the West.

“However, that paradigm may be shifting as well. In what was described as a ‘seismic shift,’ Morgan Stanley CIO Michael Wilson recently came out with an investment strategy that includes a 20 percent allocation to gold.”

If this idea gains traction, we will see a massive increase in gold investment, further boosting demand.

“In conclusion, it’s possible that gold is in a bubble. But it’s probably not. The fundamentals argue otherwise. It’s more likely that this historic gold bull market is telling us something. We would be wise to listen.

“Speaking of being wise, have you finished your Christmas shopping?”

If not, there is still a little time. Mike says you might want to consider https://www.moneymetals.com/christmas-gold-silver" rel=”noreferrer”>the gift of gold. After all, it is a gift “fit for a king.”

“And I think most kings would also find silver appropriate at $70 an ounce! But gold has long been a symbol of royalty. It represents wealth, power, and in ancient cultures, it also symbolized wisdom. This is why the Magi presented Jesus with the gift of gold, along with frankincense and myrrh.”

Mike explains the symbolism behind the Magi’s gifts and then reveals a fact many people aren’t aware of.

“Did you know that the gifts the Magi offered Jesus still exist? Based on church tradition and the historical record, the gold, frankincense, and myrrh are in the Monastery of St. Paul on Mt. Athos in Greece.”

Mike explains how the gold ended up at the monastery and then attempts to figure out how much the gold is worth today. Turns out, it was a pretty good gift for a baby.

Mike ends the show, reminding the audience that they, too, can give a gift fit for a king or get it for themselves. Now visiting Magi is necessary. Just call 800-800-1865.