Treasury Steps In, Gold Surges: Is the Debt Crisis Entering a New Phase?
In a recent episode of The Real Story with Michelle Makori on Miles Franklin Media, host Michelle Makori speaks with Brien Lundin, editor and publisher of Gold Newsletter and president of the New Orleans Investment Conference.
The roughly 90-minute discussion centers on a notable Treasury market move, surging long-term yields, sovereign debt risks, and what gold appears to be signaling about the broader financial system.
Lundin outlines a strongly bullish case for gold, silver, and mining equities amid escalating fiscal pressures.
The Trigger: Treasury Intervention and Rising Yields
Long-term U.S. Treasury yields had climbed sharply, with the 30-year yield reaching 5.34%-its highest level since 2007.
In response, the Treasury announced it would at least double the size of certain buyback operations for longer-dated securities (from about $2 billion to at least $4 billion per operation) in the 10- to 30-year sector, citing the need for greater liquidity support.
Yields subsequently eased and gold prices rose.
Lundin notes that while the amounts involved are relatively small and the Fed is not directly printing money (so this is not formal quantitative easing), the signal is significant: Washington appears willing to intervene to prevent long-term rates from rising further.
He argues that higher yields increasingly reflect investor concerns about government debt levels, deficits, and the prospect of repayment in depreciated dollars, rather than purely inflation expectations. U.S. debt is approaching or exceeding $40 trillion, with persistent deficits, rising interest costs (already over $1 trillion annually and exceeding defense spending in some measures), and heavy refinancing needs.
These same forces that push yields higher-worries about fiscal sustainability and currency debasement-are also supportive of gold, according to Lundin.
The Gold Bull Thesis
Lundin describes the current gold bull market as different from prior cycles.
Central banks have been steady buyers for years, elevating gold’s role in sovereign reserves (at times surpassing the euro or Treasuries in certain rankings).
Western investors only began participating more meaningfully around late 2025, after Fed rate-cut signals, which introduced greater volatility.
Central bank demand continues to provide a floor. He contends that gold is effectively “sniffing out” the next phase of the debt crisis. Extreme equity valuations (e.g., elevated Buffett indicator readings) and signs of liquidity strain or an AI-related market rollover could eventually trigger a broader market event.
In such a scenario, gold, silver, and mining stocks might initially sell off alongside other assets in a liquidity vacuum, but a subsequent central bank rescue would likely be larger than the interventions during the COVID crisis or 2008.
“The addict has developed a tolerance,” Lundin suggests, meaning future liquidity injections would need to be substantially bigger.
The Federal Reserve is increasingly constrained. High debt and deficits make aggressive rate hikes difficult, and the eventual path of least resistance points toward easier policy and further currency depreciation.
Historical parallels include President Nixon’s 1971 closure of the gold window, which severed the last formal link between the dollar and gold after foreign demands drained U.S. reserves. Lundin sees a possible long-term reattachment of gold to the monetary system in some form (though not necessarily a strict classical gold standard), potentially as legal tender or a market-determined anchor, which would further support prices.
Speculation around Fort Knox audits and U.S. gold reserves also features: Lundin raises the possibility that official buying may have helped replenish holdings, coinciding with periods of strong gold demand and later official statements affirming the gold is “present and accounted for.
”Outlook for Prices, Silver, and Mining Stocks
Lundin views the current environment as a generational opportunity in precious metals and related equities-comparable in potential to the early 2000s.
He forecasts gold could approach or exceed $5,000 per ounce before the end of 2026.
Silver, he suggests, could reach approximately $100 in 2027 (with some chance of triple-digit prices earlier, though he hopes for a more gradual rise to avoid an overly speculative spike).
Silver’s dual role as both a monetary and industrial metal is highlighted as newly advantageous. Industrial demand (including technology and green energy applications) is absorbing essentially every newly mined ounce, tightening available supply even as monetary interest grows.
Short-term economic slowdowns could pressure industrial use and prices temporarily, but the longer-term trend remains intact due to its leverage to gold and structural supply dynamics. Central banks are unlikely to accumulate silver in the same way they do gold.
Mining equities are described as deeply undervalued with historically strong margins. Major producers could potentially rise four- or fivefold as the sector catches up, offering leverage with relatively lower risk than pure explorers. Lundin recommends physical gold and silver primarily as wealth insurance (in accessible, divisible forms), with mining stocks providing additional upside. ETFs can serve as convenient exposure vehicles.
Risks and Counterarguments
Potential derailers of the thesis include a genuine productivity boom (possibly AI-driven) that meaningfully shrinks debt-to-GDP ratios through higher growth and tax revenues without corresponding spending increases.
Lundin is skeptical, citing human nature and governments’ tendency to expand spending when revenues rise. He also notes that reported inflation measures may understate true price pressures (citing examples like shrinkflation).
Overall, Lundin sees few plausible scenarios that are not ultimately supportive of gold as a hedge, given current debt trajectories. He promotes ongoing education via Gold Newsletter and the New Orleans Investment Conference for deeper insights into the sector.
The interview underscores a view that the combination of fiscal pressures, market interventions, and shifting investor behavior marks a meaningful evolution in the debt and monetary landscape-one in which gold, silver, and related assets are positioned as key beneficiaries.
As always, the discussion is presented for informational purposes and does not constitute investment advice.
