Tom Luongo: The U.S. Wants a Much Higher Gold Price

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Tom Luongo: The U.S. Wants a Much Higher Gold Price

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Summary

Tom Luongo argues that the central geopolitical struggle is not primarily nation versus nation but a battle over control of global capital flows, with the United States attempting to reclaim financial sovereignty from a British/European-centered system he traces through LIBOR, offshore dollars, and the yen carry trade. He sees the LIBOR-to-SOFR transition, rising Japanese rates, pressure on the euro-yen carry trade, stablecoins backed by short-term Treasuries, and potentially much higher gold prices as interconnected pieces of a US strategy to dismantle the old financial architecture and reshore productive capacity. Luongo ultimately believes Trump is a transitional catalyst toward a new sovereign financial order—potentially a “golden age”—in which the US and Japan unwind legacy leverage, capital flows away from Europe, and gold, silver, and Bitcoin are repriced substantially higher.

Top 5 Key Topics

• LIBOR-to-SOFR power shift: Luongo calls replacing LIBOR with SOFR the critical financial turning point because LIBOR allowed the offshore, London-centered dollar system to influence the global price of dollars, while SOFR anchors that price in US domestic repo markets. He argues this gave the United States control over dollar pricing that it had lacked for decades.
• British Empire and the ARC thesis: Luongo’s “empire never ended” thesis holds that remnants of the British/Anglo-Dutch financial system still exercise enormous influence through global financial networks, while factions in America, Russia, and China have overlapping interests in dismantling that order. He describes Trump as a disruptor in this struggle and speculates that he may even have been groomed over decades for that role, while explicitly acknowledging this is inferential rather than something for which he has direct evidence.
• Japan and the yen carry trade: Luongo argues Japan is pivotal because decades of extremely cheap yen financed enormous leveraged carry trades, and Japanese normalization toward roughly 1.25%–1.5% rates could force those positions to unwind. He cites Japan’s debt-to-GDP ratio falling from about 233% in 2020 to 204%, while arguing Bank of Japan quantitative tightening could reduce it further as roughly 21%–24% of holdings roll off over two years and around 33%–35% by 2030.
• Stablecoins, Treasuries, and $20,000 gold: Schectman and Luongo argue that stablecoins backed predominantly by short-term US Treasuries could create structural Treasury demand while issuers such as Tether use interest income to accumulate gold. Luongo believes the US ultimately wants a substantially higher gold price—potentially even $20,000—alongside repriced silver and Bitcoin, and claims Britain rather than America is now the principal force seeking to suppress gold.
• Trump’s “golden age” endgame: Luongo believes financial sovereignty must precede political sovereignty and views Trump as the catalyst for building institutions that can outlast any individual president. His optimistic end state is a productive, manufacturing-oriented US attracting global capital, rebuilding parts of the Americas such as Venezuela, escaping what he calls the old system of “debt feudalism and extraction,” and potentially entering a much stronger 2030s.