[YouTube Video] Gold & Silver Will Not Crash Like In 2008! This Is Why (The Infinite Money Glitch For Gold)6 min read

In a nutshell

Despite a weakening U.S. economy and significant stock market selloffs (S&P 500 down 4.6% and NASDAQ down 7.5% recently), gold and silver have remained remarkably strong, outperforming both the S&P 500 and even Nvidia over the past 12 months with approximately 40% gains. This defies traditional market expectations where precious metals typically crash alongside equity markets during economic downturns, as seen in 2008. The analyst argues this pattern will not repeat because fundamental changes have occurred in the global financial system. Central banks worldwide have become net buyers of gold since 2010, reversing a two-decade selling trend that followed the Cold War’s end. This shift reflects diminishing confidence in the U.S. dollar as the dominant reserve currency.

Additionally, the analyst introduces what he calls an “infinite money glitch” concept—a strategy where governments could issue gold-backed convertible bonds and continuously revalue their gold reserves at higher market prices to justify unlimited borrowing. This approach would establish a price floor for gold rather than a ceiling, allowing its value to appreciate indefinitely. Even in a worst-case scenario with a major market correction, the analyst predicts gold would likely not fall below $2,500/oz and silver would find support around $26/oz, significantly higher than previous crash levels.

Three key takeaways:

1. Fundamental Shift in Precious Metals Market: Unlike 2008, gold and silver are unlikely to experience a major crash during market turmoil because central banks have become net buyers rather than sellers, and bullion banks have less capacity to flood the market with borrowed metals. This structural change has created a more resilient price floor for precious metals.
2. Central Bank Gold Accumulation: Major central banks including China, Poland, and the Czech Republic are actively increasing their gold reserves, even at prices near $3,000/oz, signaling long-term confidence in gold as a hedge against dollar devaluation. Since 2010, central banks have consistently been net buyers of gold, reversing the 1989-2009 selling trend.
3. The “Infinite Money Glitch” Concept: The analyst presents a theory where governments could issue gold-convertible bonds at favorable interest rates, then use their currency-issuing power to continue purchasing gold, thereby increasing the value of their reserves and enabling them to issue more debt—creating a self-reinforcing cycle that supports ever-higher gold prices.

Summary of “Gold & Silver Will Not Crash Like In 2008! This Is Why”

(00:00 – 01:30): The host introduces a weakening U.S. economy with rising unemployment at 4.1% and warns conditions will likely deteriorate rapidly as government statistics catch up with economic reality. Despite continued stock market selloffs putting investor sentiment in “extreme fear territory” for the third consecutive week, there’s an unusual pattern: money isn’t flowing into traditional safe havens like U.S. dollars and bonds. Instead, the U.S. dollar has experienced its biggest weekly loss since November 2022.

Gold and Silver’s Outperformance

(01:30 – 02:39): Gold and silver have remained remarkably strong during this market uncertainty. Over the past 12 months, both metals have gained approximately 40%, outperforming not only the S&P 500 but even tech darling Nvidia, which is up only 34% over the same period. The host frames this as evidence of a major market shift that will prevent a 2008-style crash in precious metals prices and could trigger a long-term bull market.

Gold and Silver’s Growing Market Share

(02:39 – 04:16): Looking at the top 10 investable assets globally, gold and silver now represent nearly 54% of total value, increasing by more than one percentage point in just the past week. This surge occurs while the U.S. bond market, typically a safe haven during uncertainty, shows little sign of recovery. The host explains that the 2008 crash in metals prices was exacerbated by bullion banks lending out metals (sometimes belonging to central banks) to struggling commercial banks, which then sold these metals to raise cash—essentially creating a “fire sale” that depressed prices.

Changes Since 2008

(04:16 – 06:32): Several factors differentiate today’s market from 2008. Bank bailouts have become commonplace, as demonstrated by the Federal Reserve’s Bank Term Funding Program in March 2023 following the Silicon Valley Bank collapse—which actually triggered a rally in gold prices. Additionally, bullion banks have diminished influence due to “repatriation” efforts, with large players increasingly taking physical delivery of metals to eliminate counterparty risk. These structural changes significantly reduce the likelihood of a 2008-style metals crash.

Central Bank Accumulation

(06:32 – 08:49): Central banks continue accumulating gold at an impressive pace. China added another 5 metric tons to its reserves last month, purchasing near $3,000/oz. Poland and the Czech Republic are also actively buying, as are major institutional players in the United States. This behavior indicates these entities don’t anticipate a major price crash. The host attributes this shift to waning confidence in the U.S. dollar’s neutrality and dominance. From 1989 to 2009, central banks were net sellers of gold, but since 2010 they’ve reversed course, becoming consistent net buyers due to concerns about bailouts, money printing, and U.S. borrowing programs.

Limited Downside Potential

(08:49 – 10:34): Even playing devil’s advocate, the host calculates that in a worst-case scenario—if the S&P 500 corrects by 30% back to 4,000—gold would likely only pull back about 11% (remaining above $2,500/oz) and silver about 18% (finding support around $26/oz). These calculations are based on the pullback ratios observed during the August 2023 unwinding of the Japanese Yen carry trade. The host suggests this is actually an optimistic scenario for those waiting for a crash in precious metals prices.

The Role of Gold in a Changing Financial System

(10:34 – 11:42): Central banks increasingly view gold as the only viable alternative to the U.S. dollar in the global financial system. Despite excitement around cryptocurrencies like Bitcoin, gold remains the reserve asset of choice for central banks, as evidenced by their consistent buying patterns through December 2024. The host introduces the concept of “revaluation” moving away from the outdated $42/oz gold valuation on balance sheets, suggesting this could create what he calls an “infinite money glitch.”

The “Infinite Money Glitch” Concept

(11:42 – 16:38): Responding to a viewer question about gold revaluation price targets, the host explains his view differs from those expecting a one-time revaluation to a specific price (such as $115,000/oz to back 80% of U.S. debt). Instead, he believes governments will initially mark gold to market value (around $3,000/oz), establishing a price floor rather than a ceiling. He then describes a potential strategy modeled after Michael Saylor’s approach with Bitcoin at MicroStrategy: governments could issue special convertible bonds backed by gold at favorable interest rates, use the proceeds to purchase more gold, driving up prices, revalue their existing reserves at the higher prices, and repeat the cycle—creating an “infinite money glitch” that could push gold prices higher indefinitely.

Implications and Silver’s Potential Role

(16:38 – 17:41): The host concludes that establishing any kind of price floor higher than current levels would confirm precious metals are “no longer a barbarous relic” and would likely result in prices exceeding the 2033 targets previously shared on the channel. He suggests that due to silver’s current affordability compared to gold, central banks might eventually apply the same strategy to silver, further accelerating the “infinite money glitch” concept.