Sep 17, 2026
The US is running a 6% budget deficit in peacetime. Peacetime is now over. Interest on our debt now costs more than defense. It crossed in 2024 and has stayed there.
This is the second half of my letter to IMA clients, and it argues for an asset I spent most of my career politely ignoring: gold. The fact that I am writing this is a bit shocking to me. Gold falls outside my value framework. It has no cash flows. I have no idea what it is worth. What changed my mind is not something about gold, but many things about the dollar.
The dollar's place as the world's reserve currency rested on three things since WWII: the largest, steadiest economy; a politically stable democracy; the best military. I walk through why all three are cracking at once. I get into the $1.5 trillion proposed defense budget, our highest debt levels since WWII, and what Fed independence looks like after the Justice Department investigated the Fed chair. I discuss the weaponized dollar after Russia's invasion of Ukraine, the perception that the war with Iran was lost, and what that means for Taiwan. I dig into a $4 million Patriot interceptor shooting down a $20,000 drone, China's manufacturing base, and the rare earth problem.
Then there's the piece that made my blood boil: Trump Media reportedly charging trading firms up to $1.2 million a year for early access to Truth Social posts. I explain why I call this the corn republic. And I close with why gold is one position among many, not a panacea.
The full piece is at investor.fm.
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WHO AM I: Vitaliy Katsenelson is the CEO of Investment Management
Associates (IMA) and an award-winning writer. Forbes Magazine
called him "The New Benjamin Graham." His work has appeared in the
Financial Times, The Wall Street Journal, Barron's, Fortune,
Institutional Investor, and Foreign Policy. He is the author of
three books, including Soul in the Game: The Art of a Meaningful
Life. _________________________________________________________
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