Charles’ note: America might “win” its trade wars. 

But it’s hard to say what winning means. More leverage over other countries? More money in the government’s coffers from tariffs? A stronger U.S. manufacturing base?

That all sounds great. 

But as today’s expert points out, there are downsides, too. And one long-term loser of America’s trade wars will be the U.S. dollar.

James Hickman is a West Point graduate, former U.S. intelligence, permanent traveler, and self-described free man. 

I’ve been a fan of James’ analysis since he began writing under the pen name “Simon Black.” And he’s predicted many of the trends we cover at The Freeport Society – including the West’s debt bubble, inflation, bank failures, social unrest, and more.

James now works alongside best-selling writer and economist Peter Schiff at Schiff Sovereign.

And as you’ll hear from him below, he sees a huge opportunity in gold, as Trump’s trade wars cause foreign governments to dump the dollar.

Why Trump’s Trade Wars Are Great News for Gold 

By James Hickman, Co-Founder, Schiff Sovereign

Well, that was fast…

The smoke had barely cleared on the opening salvo of the Great North American trade war, when all sides called a truce to talk out their differences.

At Schiff Sovereign, we predicted this…

Trade wars are an elaborate show. They demonstrate to the world that America is willing to make good on its threats and force everybody to the negotiation table.

There may be some short-term benefits from these negotiations. 

But there will also be long-term consequences – especially when it comes to the value of the U.S. dollar.

There’s already a move by foreign countries to ditch the dollar for trade. Trade wars – or even the threat of trade wars – will only accelerate that trend.

As we’ll look at today, that’s great news for gold. It’s one of the few assets outside the dollar that’s widely accepted all over the world.

Gold may have set 40 record highs last year… and continues to set new records this year.

But thanks to the prospect of further trade wars, it’s not too late to invest.

Uncle Sam’s $28 Trillion Problem

Over the next four years, roughly $28 trillion worth of U.S. government bonds will mature.

That’s more than three-quarters of the government’s roughly $36 trillion national debt.

That averages out to $7 trillion a year through 2028.

And we’re just talking about existing Treasury bonds. That figure doesn’t include new bonds Washington will issue over that time. These could easily add another $7-10 trillion to the debt.

Usually when a Treasury bond matures, the bondholder rolls the proceeds into a new bond at whatever yield that new bond carries.

But most of the bonds maturing over the next four years were issued five, 10, and even 20 years ago, when interest rates were much lower than they are today. So, that’s going to put a further strain on the government’s finances

Let’s do the math… 

If the government issued $28 trillion in bonds at an average yield of 3%… and refinances that debt at an average yield of 5%… that’s an extra $600 billion in annual interest payments on top of the $1.1 trillion it currently pays out in interest a year.

And even that may be wishful thinking.

The investors who buy Treasury bonds are split pretty evenly between U.S. entities (the Fed as well as companies and individuals) and foreign investors (foreign government, central banks, multinationals).

That means the Treasury Department relies heavily on foreigners to buy U.S. government bonds.

Right now, most countries have to buy U.S. government bonds because the U.S. dollar is the world’s dominant reserve currency. And Treasury bonds are the most liquid U.S. dollar assets in the world.

But there’s been a move underway by countries to engage in trade and commerce without using the dollar. 

For instance, since 2010, China and Russia have increased the use of their currencies, the yuan and the ruble, in bilateral trade. 

In 2018, the BRICS emerging markets – Brazil, Russia, India, China, South Africa – started to develop BRICS Pay. It’s a decentralized payment messaging system designed to enable transactions in local currencies and reduce reliance on the U.S. dollar for trade.

In 2023, Saudi Arabia announced its openness to trading in currencies other than the U.S. dollar. That’s a major shift given its historical role in pricing oil exclusively in dollars.

And also in 2023, Argentina began paying for Chinese imports using the yuan instead of the U.S. dollar. 

Facing the constant threat of sanctions and tariffs will only encourage these countries – and even many countries in Europe – to accelerate their diversification away from the U.S. dollar.

And as I mentioned up top, the natural beneficiary of this trend is gold.

40 Record Highs and Counting

Last year, gold set 40 record highs as central banks, and foreign governments continued their buying spree.

According to the World Gold Council (WGC), overseas central banks collectively added 1,045 metric tons of gold to global reserves in 2024. 

That made it the third straight year in which central bank purchases have exceeded 1,000 metric tons. 

And you can expect that trend to continue…

Think about it from the perspective of a country on the other end of Trump’s tariff threats?

Say you’re a foreign central bank, and you’re holding $100 billion of U.S. government bonds about to mature. Are you going to reinvest that $100 billion back into a country that’s threatening you with tariffs? Or do you let your Treasury bonds mature, take the money, and find someplace else to invest?

As trade tensions ratchet up, foreign governments and central banks are going to be giving serious consideration to option No. 2.

And they’re going to have to invest that money in an asset that – like U.S. Treasury bonds – is widely accepted around the world.

Gold is one of those assets. That’s why central banks have been buying so much of it lately.

And given the prospects of tariffs and further trade wars – or even just more threats of tariffs and trade wars – they’re going to keep buying gold and send the price even higher.

So, if you want to protect yourself against future risks to the U.S. dollar, gold makes a lot of sense right now.

To your freedom,

James Hickman

Co-Founder, Schiff Sovereign 

P.S. Like The Freeport Society, Schiff Sovereign is all about building financial strength and personal autonomy. And James embodies that ethos. He’s traveled to more than 120 countries on all seven continents. He’s started, invested in, and bought businesses all over the world – in sectors ranging from technology to agriculture to banking. And he specializes in teaching folks how to achieve new freedom by embracing financial and lifestyle opportunities across the globe. So, be sure to check out Schiff Sovereign here.