Brien Lundin: Debt, Debasement, and Why Gold's Bull Market Has Support

In a recent Money Metals Podcast interview, host Mike Maharrey spoke with Brien Lundin, editor of The Gold Newsletter and CEO of the New Orleans Investment Conference, about the outlook for gold and silver amid swelling federal debt, rising Treasury yields, Federal Reserve policy, and what Lundin views as the return of the "debasement trade."

The Gold Newsletter, founded in 1971, is one of the oldest publications covering precious metals, and Lundin has edited it since the 1990s, giving him a multi-decade vantage point on metals cycles.

According to Lundin, the central question is not whether officials can talk tough on inflation, but whether the arithmetic permits a sustained tightening campaign. With U.S. federal debt above $40 trillion and the debt trajectory steepening, he argued the country cannot simply "grow its way out" of the problem.

The Limits of Rate Hikes

Maharrey asked why Lundin considers expectations of aggressive Federal Reserve rate hikes under Chair Kevin Warsh to be misplaced. Lundin said Warsh may sincerely want to fight inflation, but the size of today's debt burden severely limits the Fed's options.

He contrasted the current environment with the late 1970s and early 1980s, when Paul Volcker raised interest rates dramatically to combat inflation. At that time, Lundin noted, federal debt stood near 35 percent of GDP. Today, he put the figure closer to 135 percent of GDP.

That difference changes everything. Higher rates increase the government's debt-service burden, and Lundin said rate increases now carry far greater leverage against an already heavily indebted economy. He believes Warsh may be able to deliver a symbolic quarter-point hike, but a sustained campaign of increases is effectively impossible.

Why Debt Points Toward Debasement

Lundin rejected the suggestion that the United States can resolve its debt problem through economic growth alone. He said only an extraordinary, unforeseeable leap in productivity—such as unlimited energy or interstellar travel—would make that plausible.

Absent that, Lundin argued, governments historically resort to debasing their underlying currencies when debt grows too large to manage through normal fiscal means. The "debasement trade," a term popularized on Wall Street, is again becoming a major force in markets, he said. The phrase gained currency among major bank strategists in 2024 and 2025 as gold and other hard assets rallied alongside persistent deficit spending in the United States and other advanced economies.

Maharrey acknowledged that the debt issue has been debated for decades, including during the 1990s and the "Contract with America" era. But both men observed that debt has compounded dramatically since then, while policymakers have shown little willingness to impose the political pain needed to reverse the trend.

Treasury Buybacks Sent a Message

The discussion also turned to Treasury Secretary Scott Bessent's decision to increase long-end bond buybacks from $2 billion to $4 billion. Lundin acknowledged the increase was technically small in the context of a bond market worth more than $30 trillion.

Still, he said the market's reaction was understandable. The move suggested the Treasury was willing to influence yields at one end of the curve and could be prepared to intervene further if necessary.

Lundin argued the effort was not technically yield-curve control, but it nevertheless revealed an inclination to manage yields. In his view, the Treasury's attempt to project strength instead signaled weakness and desperation.

Gold reportedly jumped about $180 in response. Stocks, bonds, gold, and silver all initially rallied, but Lundin said equities faded as the day went on while gold and silver continued to advance.

Gold and Bonds Are Seeing the Same Danger

Among Lundin's most important observations was the positive correlation between gold and the 10-year Treasury yield since late June. Ordinarily, higher yields are viewed as negative for non-yielding gold, but Lundin said today's relationship is different.

Yields are rising not because of strong economic growth or normal monetary tightening, he argued, but because investors are increasingly concerned about debt and deficits. Bond investors—often described as bond vigilantes, a label dating to the 1980s bond-market protests against fiscal profligacy—are demanding greater returns to hold sovereign debt while also turning to gold as a hedge.

Lundin said gold and bonds rank among the most sensitive predictive mechanisms in financial markets. Their behavior, in his view, suggests markets may be anticipating a future crisis, even if no one can identify the precise trigger in advance. Central banks have also been consistent net buyers of gold in recent years, a shift widely documented in official reserve data that has accompanied the metal's strength.

Complacency and the Debt Endgame

Lundin cautioned against predicting the exact date of a financial breaking point. Many respected analysts have warned of a debt crisis for 30 years or more, he noted, and the system has kept operating.

But he also stressed that complacency can be dangerous. Drawing on his experience near Lake Pontchartrain before Hurricane Katrina, Lundin recalled noticing inadequate efforts to reinforce levees only months before the storm devastated New Orleans.

For Lundin, the debt situation carries a similar lesson: a risk can remain ignored for years until an event exposes the vulnerability all at once. He believes the U.S. may be in the endgame of more than 45 years of increasingly easy money and expanding debt, though he does not claim to know how long that endgame will last.

Rising Yields Do Not Automatically Hurt Gold

Maharrey asked about the conventional belief that higher interest rates and rising yields are always negative for gold. Lundin called that view historically incomplete.

Some of gold's strongest advances since the metal became investable after 1971—when the United States ended the dollar's convertibility into gold—and especially after the United States permitted private gold ownership again in 1974—occurred during periods of rising rates and yields. During the 1970s, yields rose to fight inflation but failed to keep up with it, allowing gold to rise.

Today, Lundin sees a different version of the same dynamic: yields are climbing because debt and deficits have grown more ominous, not because the economy is necessarily strong. He added that this is a global phenomenon, with sovereign yields around the world moving sharply higher.

Lundin said he watches the price of gold more closely than the dollar index. In his view, all fiat currencies compete against one another while depreciating over time, making gold a more meaningful measuring stick.

A Long-Term Tailwind for Gold and Silver

Lundin expects the macroeconomic trend to remain supportive of gold and silver until governments resolve their debt and fiat-currency problems. He cautioned, however, that a bull market does not move in a straight line.

The first 18 months of the current metals bull market were unusually forgiving, he said, with corrections largely playing out through sideways consolidation rather than steep price declines. As Western investors and algorithmic trading play a larger role, he expects more volatility and sharper headline-driven corrections.

For physical precious metals holders, Lundin framed the larger question as whether they can afford not to own gold or silver when cash savings may lose purchasing power over time. For mining-stock investors, he emphasized buying dips during a bull market and taking some profits when markets become excessively frothy. This reflects a view he stressed elsewhere in the conversation: that hedging debasement is a long-term position, while trading the sector requires managing volatility along the way.

The Next Crisis May Come From the Unexpected

Lundin said he believes gold and bonds may be "sniffing out" the next major financial crisis. He did not claim to know what will cause it, noting that bubbles in markets are often obvious while the event that punctures them tends to arrive from an unexpected direction.

Maharrey pointed to 2018 and 2019, when market weakness, a late-2018 stock selloff, and repo-market strain preceded the COVID-era monetary response. Lundin noted that the Fed began a roughly $500 billion liquidity effort in late August and early September 2019, even as officials resisted calling it quantitative easing.

Both Maharrey and Lundin argued that the Federal Reserve's balance sheet is again expanding through bond purchases, regardless of the terminology officials use. Lundin said efforts to manage Treasury yields may provide temporary relief, but they do not eliminate the underlying debt problem.

New Orleans Investment Conference

Lundin also encouraged viewers to attend the New Orleans Investment Conference, which he said brings together roughly 40 speakers, mining companies, investors, and analysts during a metals and mining bull market. The event, which Lundin's organization has hosted since the 1970s, has historically drawn notable free-market and hard-money speakers over the decades.

The conference will take place over Halloween weekend in New Orleans and will include recorded presentations, panels, workshops, and a Metals and Mining Masquerade Ball. Lundin said the exhibit hall is sold out, hotel availability is tightening, and registrations are arriving at the fastest pace he has seen in decades. For more information, Lundin directed viewers to GoldNewsletter.com and NewOrleansConference.com.

The interview was published by Money Metals Exchange, an online bullion dealer in business since 2010 that has been voted the Best Overall Precious Metals Dealer by Investopedia. Source: GoldSeek.