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The United States economy is staring at an uncomfortable reality: rising deficits, entrenched spending, and the need for an unprecedented shift to stabilize the system. With critical areas of spending (entitlements, defense, and healthcare) untouchable, the tools for balance are limited. However, the solution may lie in revaluing assets rather than outright cuts—think gold, Bitcoin, and a reimagining of US energy resources.
Revaluing the statutory price of gold is one of the easiest tools the US Treasury can use to address its deficits. Gold’s current price on the US balance sheet remains an archaic $42.22 per ounce—a far cry from its ~$2,700 market price.
Luke Gromen, a leading macroeconomic analyst, highlights this strategy as an effective path forward. By adjusting gold’s value upward, the US can inject instant liquidity into its balance sheet. For example:
This is not unprecedented. Gold has been used historically to anchor currency systems and stabilize economies. In the current environment, with deficits spiraling and devaluation pressures mounting, gold revaluation may be the path of least resistance.
The possibility of a Bitcoin Strategic Reserve (BSR) has sparked heated debate. While some consider a full-scale BTC acquisition unlikely, we see a more subtle approach emerging:
Another intriguing possibility? Nation-state mining.
With abundant hydroelectric resources, the US is well-positioned to mine Bitcoin domestically. “Made in USA” Bitcoin could serve dual purposes:
If executed strategically, this could establish the US as a leader in state-backed Bitcoin production while bolstering energy infrastructure.
In the short term, signs point to a potential Q1 correction as dollar liquidity rolls over in January. Liquidity—the fuel for risk assets—could experience a temporary pullback, creating volatility across markets.
However, we believe this correction will be short-lived.
The tailwind of renewed QE and liquidity injections is likely to kick back in by mid-2025, supporting a rebound in markets. This cycle of volatility followed by reflation has become the hallmark of the modern monetary system, and we expect no different this time.
Spending cuts alone can’t solve the deficit crisis. The largest areas of expenditure—defense, entitlements, and healthcare—are politically untouchable. That leaves the US with three primary tools:
These strategies would address deficits while positioning the US to lead in a world increasingly driven by real, inflation-resistant assets.
Gold revaluation and Bitcoin retention aren’t just speculative ideas; they’re practical tools in an environment where traditional spending cuts are ineffective. With a looming Q1 correction on the horizon, we see short-term volatility giving way to renewed liquidity flows by mid-2025.
TL;DR:
The US economy faces a choice:
In an era of monetary devaluation, hard assets like gold and Bitcoin could play a critical role in reshaping the economic landscape. Whether through revaluation, retention, or mining, the signs are clear: the tools for stabilization are already in play.
We’re watching closely as this unfolds.
Gold has anchored economies before, and Bitcoin is emerging as its digital counterpart. With deficits soaring and liquidity tightening, will these assets become the cornerstone of a new US economic strategy?
What do you think? Drop your thoughts below.