PodcastKitcoMario Innecco

Big Banks Are Trying to Keep Gold ‘Under Control,’ Mario Innecco Says

Innecco argues that the fiat system depends on expanding debt and credit, while inflation and financial repression can shift the burden onto currency holders. He questions whether central banks can contain inflation without worsening the debt problem, and discusses gold revaluation, past confiscation, and potential pressure on precious-metals prices. He expects higher bond yields over time but sees possible near-term retreats, and forecasts that gold could finish the year higher amid geopolitical risks.

GoldPrecious MetalsInflationGovernment DebtInterest RatesGeopolitical Risk

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Key Takeaways

Innecco defines inflation as growth in money and credit, not the CPI, and argues that the Fed’s zero reserve requirement has enabled more bank lending and money creation. He also says he distrusts the reported 3.7% CPI figure and views the Fed’s role in fighting inflation as managing public perceptions rather than addressing its source.

Innecco argues that fiat currency and expanding debt benefit the government, Wall Street, and large corporations while eroding purchasing power for people who receive new money later, particularly the bottom 50%. He points to roughly 6% U.S. deficit spending and the postwar decline in the debt-to-GDP ratio—from around 120% to 32% by 1980—as examples of how inflation and financial repression can reduce the real burden of government debt.

Innecco argues that higher interest rates can raise costs across a credit-driven consumer economy, while also potentially weighing on gold and silver by making Treasuries and bank deposits more attractive. He says a Volcker-style effort to bring down prices is not feasible with U.S. debt at roughly 133% of GDP, compared with about 33% during Volcker’s tenure.

Innecco says revaluing Treasury gold could generate an extra trillion dollars without selling the gold, but that Congress would have to approve a change to its statutory price. He says using the resulting spending power could be inflationary.

Innecco describes a bond bear market in which rising yields may still fail to preserve purchasing power if goods and services keep getting more expensive. He expects yields could temporarily retreat from 5.3% to 4.5% or 4.25% before moving higher, and estimates a 10-year Treasury could fall from 100 to about 92 or 93 if its yield reaches 6.25%; he favors maturities of up to one year for investors seeking higher yields because shorter duration limits principal sensitivity.

GEO-POLITICS

Gold Revaluation — Innecco says Congress would have to approve any change to gold’s statutory price, so a Treasury revaluation would require legislative action.

“It has to be a trail. so what would happen is actually Congress has to approve the change in price the statutory price…”—

Monetary Discipline — Innecco argues that monetary discipline requires abolishing the Federal Reserve, returning to constitutional money, and limiting U.S. Treasury borrowing to wars approved by Congress. He says other forms of borrowing remain credit. He characterizes the broader goal of eliminating inflation through sound money, no deficits, and no borrowing as potentially draconian and utopian.

“I think the only way to create discipline as I said earlier is to abolish the Federal Reserve and go back to constitutional money and make sure the US Treasury…”—

Roosevelt’s Gold Order — Innecco says Roosevelt ordered Americans to surrender gold during a banking crisis because gold was part of the domestic gold standard and people were withdrawing it from banks. The bank holiday prevented people from accessing their banks. He argues modern confiscation would be difficult because people could hide gold, noting that only a quarter of the gold was turned over during the earlier episode. He mentions targeting gold held in ETFs as a theory, not a certainty.

“The only reason he wanted the gold handed in is because at that time the US was under a domestic gold standard and it was an important part of the…”—

ECONOMY

Inflation Measurement — Innecco defines inflation as growth in the money and credit supply, not the CPI, and says the CPI methodology changed in 2022 to allow more frequent substitutions. He says he does not trust the reported 3.7% inflation figure, though it exceeds the Fed’s 2% target. Even 2% inflation over 40 years, he notes, erodes currency value.

“In in my view, inflation is the increase in the supply of money and credit i.e. M2 or M3, which they stopped publishing 20 years ago…”—

Bank Money Creation — Innecco argues that the Fed’s zero reserve requirement since 2020 allows more bank lending, while China’s 5%–7% requirement constrains it; he identifies lending as a source of price increases and inflation. He says commercial and shadow banks create money by issuing loans and crediting deposits, while the Fed influences the money supply indirectly through banks.

“And yeah, the other thing that I think the markets are soon going to like wake up to Jeremy is that there's such thing as the reserve requirement ratio…”—

Rates and Inflation — Innecco agrees with Bert Domen’s view that higher interest rates can cause more inflation. In a credit-driven consumer economy, he argues, higher financing costs raise the cost of other goods and services.

“So I think you've had Bert Domen on before. Yeah. Yeah…”—

MARKETS

Bond Bear Market — Innecco says bonds are in a bear market and that rising yields can still erode purchasing power when goods and services keep becoming more expensive. He cites the previous bond bear market, when gold rose from $35 to almost $900, as historical context, not a certain forecast. He also argues that a 40-year bond bull market helped delay the system’s problems, and conditions have become more difficult as that trend has turned.

“But now, in my opinion, we are in a bare market in bonds. And the last time there was a bare market in bonds, gold did very well…”—

Metals Selling Pressure — Innecco suspects traders are leaning on precious metals, citing repeated gold and silver selloffs around the COMEX open in London. He argues silver is easier to push around, and that pressure on silver can make it easier to push gold lower.

“Every time around 1:30 1:20 p.m. London, which is pretty much when the regular hour for COMX open, the gold and silver market would be well be sold off…”—

Gold’s Long-Term Returns — Innecco says gold has gained an average of at least 10% per year since 1971. He uses this figure to argue that wage increases tied to reported inflation may not keep pace with currency debasement.

“but when the currency has been debased by I would say 10% at least since 1971 that's the average gain that gold has made per annum since 1971 anyone…”—

FORECASTS

Inflation and Metals — Innecco argues that higher inflation could weigh on gold and silver if it leads the Fed to tighten policy. Higher rates increase the opportunity cost of holding metals instead of Treasury securities or bank deposits. He says the Fed may have to raise rates one or two more times.

“The general feeling is that if inflation is higher or is going up that gold should go up…”—

Rising Yields — Innecco expects yields to rise in a bond bear market, though they could temporarily retreat from 5.3% to 4.5% or even 4.25% before moving higher and reaching 6%. He estimates that a 10-year Treasury’s principal could fall from 100 to about 92 or 93 if its yield rises to 6.25% next year. A comparable move would reduce the price of a 30-year bond even more.

“Yeah. I mean, the main reason I say that is because of, the fact that we're now in a bare market in bonds and that means higher yields going forward…”—

Currency Confidence — Innecco predicts that continued currency and credit creation could eventually trigger a sudden loss of confidence, as people seek anything of value instead of currency. He identifies that shift as a possible path to hyperinflation or a “crackup boom.”

“They're just going to keep printing creating currency and credit and then people realize it's a deliberate policy and there will be one day there will be a trigger where…”—

Inflation Hits 3.7% and Gold Falls

Innecco contrasts the 3.7% inflation report with gold’s sharp intraday drop, arguing markets expect hot inflation to prompt Fed tightening even as gold remains historically elevated.

Why Gold Fell on Hot Inflation

He says rising yields need not hurt gold over the long run, pointing to the current bond bear market and gold’s strong performance during the prior bond bear market.

Is Someone Leaning on Gold and Silver?

Innecco describes recurring selling around the COMEX open and says paper trading can pressure precious-metals prices, especially silver, while physical holders may view dips as buying opportunities.

Can You Trust the CPI?

He distrusts CPI because the BLS changes the basket more often and uses hedonic adjustments and owners’ equivalent rent, which he believes understate living costs and inflation.

The Zero Reserve Requirement

He argues zero bank reserve requirements enable lending-driven money creation and says higher borrowing costs can raise prices in a credit-dependent economy.

Social Security Raise: Who Loses First

Innecco says inflation erodes Social Security and wage increases, while those closest to newly created money—such as Wall Street and large firms—benefit first.

Is the Fed Really Fighting Inflation?

He calls the Fed an inflation creator that manages public perceptions, and explains how commercial banks create money through lending, with the Fed supporting the process.

Will Warsh Hike Before the Midterms?

Innecco says Warsh could hike, but doubts the Fed can tighten forcefully without damaging the economy; he sees a true anti-inflation response as economically destructive.

What Would Crush Gold

He argues a dramatic Fed move, such as sharply raising rates and reserve requirements, could crush gold, but would likely trigger an economic implosion that policymakers want to avoid.

5% Treasuries and the Bond Bear Market

Innecco sees a long-term bond bear market ahead: yields could retreat temporarily, but he expects them to rise toward 6% and favors short-term Treasuries over long-duration bonds.

Certificates of Confiscation

He illustrates how rising yields reduce the market value of existing bonds and says persistent inflation also erodes their purchasing power, making them resemble the 1970s’ “certificates of confiscation.”

Inflating Away the $40 Trillion Debt

He says governments may reduce the real burden of the roughly $40 trillion debt through inflation and financial repression, while savers bear the loss in purchasing power.

The Crack-Up Boom

Innecco says deliberate money creation can end in a crack-up boom when people abandon currency for tangible goods, potentially triggered by shortages or a sudden fiscal giveaway.

Who Really Sets the Gold Price

He says China’s central-bank gold buying increasingly influences the market, though COMEX and London bullion banks still affect pricing and often push paper prices around.

Golden Week and the Bullion Banks

Innecco links weakness during China’s Golden Week to closed Chinese markets and says futures speculators and traders are often on the other side of bullion-bank selling.

Why Silver Lags Gold

He says silver’s smaller market makes its paper price easier to move, but expects it to outperform gold when prices turn; he urges investors to maintain conviction.

Revaluing America's Gold: $1 Trillion

Innecco explains how Congress could authorize revaluing Treasury gold, generating accounting proceeds for the government without selling the physical bullion, though it would not solve the debt problem.

Judy Shelton's Gold-Backed Bonds

He views Judy Shelton’s gold-redeemable Treasury bonds as closer to futures contracts or a public-relations effort than a source of monetary discipline.

1933 Gold Confiscation: Could It Happen Again?

He says the 1933 gold order arose from bank runs under a domestic gold standard, and suggests modern confiscation could be difficult but might target ETF-held bullion.

A Reset Over a Weekend

Innecco says currency resets can happen over a weekend and warns that official assurances may precede drastic measures, citing historical examples in the United States and Czechoslovakia.

Bank Bail-In Warning Signs

He recommends watching banks’ use of Fed and Federal Home Loan Bank facilities for stress signals, and keeping limited cash in banks while recognizing businesses need operating funds.

Miners or Physical Metal?

Innecco favors physical gold and silver as a portfolio foundation, while saying miners may offer greater upside for investors willing to accept more risk.

Gold and Silver Year-End Outlook

He expects gold and silver to finish the year higher despite volatility, citing geopolitical risks including the Middle East conflict and the Russia-Ukraine war.

10 Minutes With Fed Chair Warsh

Asked what he would ask Fed Chair Warsh, Innecco would question whether the debt-based fiat system can be saved, since it requires continuing debt growth to avoid collapse.

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Important Disclaimers

Not Investment Advice: For education only — not financial, tax or legal advice.

AI-Generated: Made by AI from source transcripts and may contain errors.

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