"Currencies do not usually fade; they tend to collapse." - Daniel Oliver (Discussing the macroeconomic endgame for heavily indebted nations)
"This phase of the gold bull represents the world searching for an alternate asset of final settlement to balance international trade, a crisis external to the domestic dollar system." - Daniel Oliver (Explaining the true catalyst behind gold's recent price appreciation)
"An external dollar crisis will translate into an internal crisis as foreign capital avoids the U.S. and funding costs explode." - Daniel Oliver (Predicting the domestic fallout of the dollar losing reserve status)
"There is no means of avoiding the final collapse of a boom brought about by credit expansion." - Daniel Oliver (Summarizing the inevitable failure of central bank monetary policy)
"Gold is free market money and, therefore, its end goal is to balance balance sheets." - Daniel Oliver (Detailing the fundamental purpose and future price target mechanism for gold)
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The report asserts that the global financial system is entering a perilous phase where the U.S. dollar is losing its status as the world's unquestioned reserve currency, driven by geopolitical weaponization and unsustainable domestic debt. To maintain liquidity and artificially suppress interest rates, the Federal Reserve will be forced to resume massive money printing, leading to severe domestic inflation and a potential currency crisis. Consequently, the current gold bull market is only in its nascent stages; as institutions flee the dollar, both physical gold and historically undervalued gold mining equities are positioned for explosive returns.
Key Takeaways
The mechanics of currency collapse show that fiat currencies suddenly fail under the weight of debt and interest payments rather than fading slowly.
The weaponization of the U.S. dollar in 2022 prompted central banks and global entities to seek physical gold as a non-dollar alternative for international settlement.
The Federal Reserve cannot simultaneously lower interest rates and shrink its balance sheet without triggering a collapse in private equity and debt markets.
The Fed's policy of paying Interest on Bank Reserves (IORB) to control rates is generating massive operating losses (over $245 billion since 2022) and requires accelerating money printing.
To prevent a banking liquidity crisis, the Fed essentially restarted Quantitative Easing (QE) in December 2025 through "reserve management purchases".
To properly balance the Fed's bloated balance sheet, gold prices would historically need to rise dramatically, potentially between $8,395/oz and $12,595/oz.
Despite gold's price increases, mining stocks remain deeply undervalued, with capital actually flowing out of major gold ETFs like GDX and GDXJ, setting the stage for a massive multiple expansion.
Detailed Summary by Topic
The Nature of Currency Collapse
The author establishes that heavily indebted nations typically experience sudden, violent currency collapses rather than gradual declines. As systemic debt grows to meet living expenses or in anticipation of devaluation, the demand for currency to service interest payments forces the central bank into a precarious balancing act. Eventually, a crisis triggers a sudden devaluation, leading to a psychological cycle where the market anticipates accelerating debasement, making the currency's value highly volatile against gold.
The Catalyst for the Current Gold Bull Market
Unlike previous cycles, the current gold bull market was ignited when the U.S. weaponized the dollar against Russia in February of 2022. This drastic action prompted central banks, sovereign wealth funds, and international institutions to quietly shift capital out of U.S. Treasuries and into gold, seeking a safe alternate asset for international settlement. This initial accumulation phase has driven gold prices up in a parabola despite rising interest rates.
The Federal Reserve's Impossible Dilemma
The report highlights the contradictory situation facing Federal Reserve chairman-designate Kevin Warsh, who aims to fund American reindustrialization via lower interest rates while simultaneously shrinking the Fed's balance sheet. Post-2008QE flooded the banking system with reserves, forcing the Fed to control rates by paying Interest on Bank Reserves (IORB). This IORB mechanism currently causes massive operational losses for the Fed and intrinsically requires constant money printing to sustain.
The Stealth Return of QE and Impending Inflation
Despite rhetoric about monetary tightening, the Fed quietly resumed bond purchases (termed "reserve management purchases") in December 2025 because bank reserves fell to dangerously low levels. With $10 trillion in U.S. Treasuries maturing soon, the central bank will be forced to print aggressively to prevent a collapse in private equity and debt markets. Because the global economy is actively shifting away from the dollar, this newly printed money will remain trapped domestically, sparking severe consumer inflation.
Valuation and Opportunity in Gold Miners
While physical gold is destined for much higher nominal prices to balance central bank balance sheets, an explosive investment opportunity lies in gold mining equities. Development companies have seen their valuation multiples decline even as spot gold prices rose, and major sector ETFs have experienced net capital outflows. Because the gold price is now far above production costs, future returns for miners will be driven by multiple expansion rather than just margin expansion.
Data & Figures
Data Point
Value
Context
Start of Gold Bull Market
February 2022
Triggered when the U.S. weaponized the dollar, forcing institutions to seek non-dollar assets.
Fed Bank Reserves (January 2008)
$45 billion
Normal pre-crisis reserve levels before quantitative easing.
Fed Bank Reserves (2021)
$4.1 trillion
Peak reserve levels following massive QE programs.
Fed Bank Reserves (Current)
$3 trillion
Current reserve levels, which are unevenly distributed and signaling systemic scarcity.
Fed Operating Losses (Since 2022)
$245 billion
Losses generated by the Fed paying high IORB rates while holding low-yielding bonds.
New Reserve Purchases (December 11, 2025)
$40 billion
Amount of Treasury bills the Fed purchased to maintain market liquidity, effectively restarting QE.
Stories & Anecdotes
The Weimar Republic Mark: The author references a famous chart showing the hyperinflation of the German mark starting in 1914. As the destruction of the currency accelerated, its value measured in gold became violently volatile, illustrating how markets bet on the "third or fourth derivative" of currency debasement.
The Weaponization of the Dollar: The narrative recounts how the Biden administration freezing Russia's dollar holdings in 2022 inadvertently kicked off the global gold bull market. Despite the Fed simultaneously raising interest rates, the metal stabilized and began a parabolic rise as sophisticated players recognized the urgent need for a non-dollar settlement asset.
Kevin Warsh's Dilemma: The report highlights the contradictory goals of Federal Reserve chairman-designate Kevin Warsh. While he reportedly wants to fund Trump's reindustrialization via low rates and shrink the Fed's balance sheet, the author points out the hypocrisy: Warsh (who previously resigned in protest over QE II) will ultimately be forced to print aggressively when private equity markets face collapse.
The Plight of Metal Smelters: The author describes how increasing gold prices and volatility are severely impacting the basic plumbing of the metals market. Smelters and traders, who hold physical gold and short paper contracts strictly to hedge, are facing massive margin calls from nervous banks, creating a real-world bottleneck for physical supply.
References & Recommendations
Articles/Research Papers:
Myrmikan February 11, 2025 letter - Context (Discusses the government's power to abolish the Fed or revalue gold).
People Referenced:
Daniel Oliver, Principal at Myrmikan Capital, LLC - The author of the report presenting the macroeconomic thesis.
Kevin Warsh, Federal Reserve Chairman-Designate - Mentioned regarding his policy goals of lowering rates and shrinking the balance sheet.
Jerome Powell, Federal Reserve Chairman - Referenced for his historical hypocrisy regarding QE, publicly opposing it in 2012 but embracing it later.
Jacques Rueff, French Economist - Quoted complaining about the U.S. ability to run "a deficit without tears" due to dollar reserve status.
Donald Trump, U.S. President - Referenced regarding his administration's desire for the benefits of the dollar's reserve status and reindustrialization plans.
Joe Biden, Former U.S. President - Referenced for his administration's decision to weaponize the dollar against Russia in 2022.
Tools/Platforms/Products:
GDX (VanEck Gold Miners ETF) - Referenced to show capital outflows from senior miners despite rising prices.
GDXJ (VanEck Junior Gold Miners ETF) - Referenced to show that shares outstanding have fallen by roughly a third between 2024 and 2026.
Speakers & Credentials
Daniel Oliver: Principal at Myrmikan Capital, LLC. He is an investment manager specializing in macroeconomic analysis, heavily critiquing central bank credit expansion and intervention.
Actionable Next Steps
Evaluate Junior Gold Miners: Research development-stage mining companies, as their valuations are historically depressed (frequently trading well below 0.4xNPV) and are primed for explosive multiple expansion.
Prepare for Domestic Inflation: Reassess investment portfolios for an environment where newly printed U.S. dollars remain trapped domestically rather than flowing overseas, which will likely cause severe domestic inflation.
Monitor the Repo Market: Watch the spread between the IORB rate and the SOFR rate as an early warning indicator of bank reserve distress and stealth Federal Reserve interventions.
Diversify Away from Treasury Dependence: Given the structural risks to the U.S. bond market and the $10 trillion in maturing debt over the next 12 months, consider reducing exposure to traditional fixed-income instruments.
Jul 16, 2026
S10E29 Geopolitics, the Dollar and the AI Bubble Debate | 16 Jul 2026 | Know More. Risk Better. Podcast | CreditSights
Note: Podcast recorded on Thursday, 9 July 2026 1. Executive Briefing TL;DR The Core Thesis: The global macroeconomic outlook is defined by heightened geopolitical uncertainty stemming from renewed US Iran tensions in the Strait of Hormuz,…
Maturing Treasury Bonds (Next 12 mos.)
$10 trillion
The massive debt load the U.S. government must roll over in the immediate future.
Gold Price (100% Fed Balance Sheet)
$25,190/oz
The hypothetical price of gold if it fully backed the Federal Reserve's liabilities.
Gold Price (33%-50% Fed Balance Sheet)
$8,395/oz to $12,595/oz
Historical target price range for gold to provide partial backing to a central bank.
Miner Cap-to-NPV Ratio ($1,800 Gold)
0.2x
Historical valuation multiple for development mining companies.