Orderly devaluation

The Trump administration keeps trying to fix the deficit problem with creative ways to make foreigners pay for it, while lowering taxes to Americans. In addition to tariffs, which are now under scrutiny by the SCOTUS, the U.S. will now raise 100X the cost of the country’s secret recipe for success, the H1B visa. Here’s the simple math on them: 85,000 visas are granted per year. The cost will go up from $1,000 to $100,000 of paid by the individual, $200,000 if paid by the company. If fully used, that will represent $8.5Bn-$17Bn in new revenues for the Trreasury per year. The tariffs revenue represents another $300Bn approximately. But the deficit is $2.5Tn. We’re talking about almost an order of magnitude bigger that the creative ways to bring in new income. And that is within the context of a great economic environment. If the economy were to enter into a recession, the deficit will increase even more. Now look at the chart below. It shows the annual behavior of gold over the last 50 years, starting 4 years after Nixon broke the gold standard. Only 1979 was a better year for gold than 2025, on a YTD basis. Gold is rapidly becoming a must on central bank reserves, and perhaps also in investors portfolios. What that represents is the mirror image of the US dollar value. The Mar-a-lago accord is being executed as planned, and that account for an orderly devaluation of the dollar to make American made products competitive. It may also imply higher than normal inflation, which is convenient when you have $37Tn of debt.

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