Episode summary
Why Central Banks Buying 96 Tons Of Gold a Month Beats Bitcoin
Summary
Dylan Grice argues that the current “debasement trade” is still about protecting purchasing power as the dollar weakens and inflation remains suppressed rather than fully visible. He says Bernstein’s call for Bitcoin to reach $300,000 does not change his preference: if forced to choose between Bitcoin and gold, he would pick gold because central banks are buying roughly 50 to 100 tons, or about 96 tons, of gold every month, while they are not buying Bitcoin at anything comparable.
He also argues that Bitcoin’s finite supply is not enough to make it the best hedge, because Wall Street keeps creating leveraged products around it and those structures tend to come under pressure at certain levels. By contrast, he says gold has durable support from official-sector buying and real utility.
Grice’s broader point is that gold and Bitcoin are not the only inflation defenses. He says investors should focus on assets with pricing power: real estate, stocks, and especially businesses that can raise prices above inflation, like Hershey’s in his example. He frames that as a revived 1970s playbook for an environment where he believes interest rates and inflation are being managed or suppressed.
Key takeaways
- Dylan Grice says he would choose gold over Bitcoin because central banks are buying about 96 tons of gold a month.
- He argues Bitcoin’s finite supply does not offset the lack of comparable official-sector demand.
- Grice says Wall Street’s leveraged Bitcoin products can create pressure when prices reach certain levels.
- He thinks inflation hedges should emphasize pricing power, especially businesses that can raise prices above inflation.
- He says real estate and stocks can work as inflation defenses because they can reprice over time.
Notable quotes
“Central banks are buying between 50 and 100 tons, 96 tons of gold every month. They're not buying that much Bitcoin”
“if I had to choose, gun to my head, between Bitcoin and gold, I'm choosing gold”
“What you want to do is you want to find businesses that are able to raise their prices above the inflation rate”
“it seems like every time it gets to a certain level, all these leveraged product companies around it get really hurt, and it puts pressure on it”
How the episode opens
Good morning. This is Don Jovanal behind the market. Happy Monday.
Today is Monday the 31st of August, last day of the month. Anyway, today I'd like to talk about gold versus Bitcoin. A good buddy of mine is in the hospital and we got talking and he's a big Bitcoin guy.
He's doing okay. He's a big Bitcoin guy. He said to me, you know, Dylan, what do you think about this new report out from Bernstein, very decent research house on Wall Street, pretty smart guys over there.
I've watched them for 30 years. He said, what do you think about them? They say Bitcoin can hit $300,000 because of the debasement trade.
And, you know, ladies and gentlemen, the debasement trade is kind of what Warsh was talking about Friday indirectly. Warsh said basically what we thought he would say and it's really interesting. Side note, everyone is struggling to understand what tools or what metrics Warsh will use if interest go high.
What are you looking for? And it's really interesting. I've studied a lot of his report, his actual writings, and I've watched his interviews and they're pretty clear there.
I don't know why everyone's so confused, but, you know, regardless of what Warsh said, the debasement trade is still on and the debasement trade is something we talk about here a lot. It is basically a belief that the US dollar is just going to keep going down, that inflation is going to keep getting worse, and most importantly, most importantly, what do you do to protect your wealth? One thing you do not want to do is buy long bonds.
You never want to get a fixed coupon in it when you're dealing with variable interest rates, okay? Cuz you get stuck and frozen in that situation.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- central bank gold buying
- bitcoin vs gold
- dollar weakness
- inflation and rate manipulation
- assets with pricing power
Companies and tickers mentioned
- HSY
- Bitcoin
- Wall Street Journal
- Hershey
Watch the episode
Watch “Why Central Banks Buying 96 Tons Of Gold a Month Beats Bitcoin” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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