The United States has only one path left: money printing!

Will gold inevitably reach new highs again?
U.S. national debt has hit a historic milestone of $39 trillion and continues to grow at an astonishing rate. James Lavish, a seasoned macro investor and fund manager with decades of global market navigation experience, points directly to the core issue: the current market uncertainty is unprecedented.
“Honestly, this is one of the most difficult markets I’ve ever invested in,” Lavish admitted. “I’ve experienced many so-called once-in-a-century events: the collapse of Long-Term Capital Management in 1998, the tech bubble of 1999-2000, 9/11 in 2001, the 2008 crisis, the COVID lockdowns in 2020… but this time, it’s really different.”
Unlike past crises, traditional safe-haven assets like gold had already surged significantly before the current conflict erupted, making them no longer ideal safe havens. “What really worries me is that we might be replaying the stagflation scenario of the 70s-80s, but worse,” Lavish explained. “Back then, U.S. debt was about 30% of GDP, and now it’s over 120%.”
The Illusion of Energy Independence
Many believe the U.S. is now energy independent and won’t face the oil shocks and rationing of the 70s. However, Lavish points out this is a misconception: “While the U.S. is indeed the world’s largest energy producer, our light crude oil cannot be fully refined domestically, and environmentalists have long blocked new refineries. We both export and import oil—that’s the disappointing reality.”
Surface-level energy independence doesn’t solve the refinery capacity issue, leaving the country vulnerable in global energy conflicts.
The Fed’s Dilemma: Printing Money or Collapse
Lavish is relatively optimistic about the economic outlook, believing the Iran conflict might be resolved faster than markets expect, especially considering the midterm election pressures on the U.S. administration: “Do you think this government wants to risk a prolonged conflict, with high energy prices and opposition parties criticizing oil costs every day? Or do they want to find a solution and keep the stock market near record highs?”
However, regardless of how the conflict is resolved, Lavish believes the Fed and Treasury face an unavoidable dilemma: this year, they need to refinance $9.7 trillion of debt, and with interest payments and accumulated deficits, over $12 trillion needs financing.
“The Treasury wants to extend debt maturities, but long-term bond yields are high. If the 10-year Treasury approaches 5%, the Treasury will be in trouble. They will have to start serious QE and distortion operations with the Fed’s help—buying long-term bonds to keep rates low enough—to prevent U.S. debt from exploding from $40 trillion to $50-60 trillion.”
Money Printing: An Inevitable End
“This is the crux of money printing,” Lavish emphasized. “In the next 6-18 months, regardless of what happens, we will inevitably see money printing. There’s no alternative; that’s the reality.”
When Michelle Makori asked about the debt issue, Lavish quoted Fed Chair Powell: “Our debt growth is outpacing the economy… long-term, this is unsustainable. Debt levels themselves aren’t unsustainable, but this path is. If we don’t act quickly, the outcome won’t be good.”
What does Powell’s “outcome won’t be good” really mean? Lavish explained: “The Fed’s job is to maintain confidence in the dollar. Why? Because they need countries around the world to buy U.S. Treasuries. Why? Because we need to keep borrowing to sustain this whole game.”
Asset Prices and Currency Devaluation
“If the world loses confidence in U.S. Treasuries as assets, we’ll lose buyers. We won’t be able to borrow as much, borrowing costs will rise, and we’ll enter a real debt spiral. Mathematically, I see no way out.”
That’s why Lavish believes holding hard assets is so important: “The U.S. Treasury and Fed won’t allow the economy to slip into recession, causing deficits to explode and long-term rates to spike due to inflation expectations. They’ll have to buy those bonds and keep rates low. As everyone often says, every country is ‘becoming Japan.’”
“All roads lead to more money printing, whether the Iran conflict is resolved quickly or slowly. Sooner or later, we must create more money, ultimately leading to currency depreciation,” he said.
The Truth and Impact of Quantitative Easing
Lavish explained in detail what quantitative easing (QE) really is: “QE means the Fed buying U.S. Treasuries. Why do they do it? Because it injects funds into the market that didn’t exist before.”
“Like playing Monopoly,” he vividly compared. “We all have our positions on the board, then suddenly the bank says: ‘You know what? We’re going to put more cash into the game.’ Those who get extra cash will buy properties on Broadway, Park Avenue, raise prices, build hotels… more money in the market.”
This monetary injection mainly goes into asset purchases—whether bonds, stocks, gold, or real estate. “This causes inflation, which is directly related to all this money printing. Since 1971, the money supply has expanded at over 7% annually. This expansion is the reason all asset prices have risen.”
The Future of Gold
Regarding gold’s outlook, Lavish disagrees with Bloomberg analyst Mike McGlone, who believes gold has peaked and will experience years of sideways or downward movement. Lavish countered: “Gold has already corrected from $5,600 to $4,000—that’s a big adjustment. Can it quickly return to $5,600? Absolutely, depending on how fast and how much we print.”
“I believe gold will definitely reach new highs in the next one or two years. I wouldn’t be surprised if we revisit $5,000 this year, then move toward $5,500.”
Lavish emphasizes that when the Fed starts printing, gold will be the first asset to surge. He considers UBS’s forecast of $5,600 by year-end to be a conservative estimate.
Stock Market Outlook and Systemic Risks
Regarding the stock market, Lavish says a 50% plunge is unlikely: “We’d need a serious event, like 9/11, for that to happen. Remember, a large part of the global economy revolves around the U.S. stock market. We have the seven largest companies in the world, which are extremely important to the economy.”
He believes the market might see a 10-20% correction but not a disaster—especially if Middle East tensions ease: “If the Middle East conflict is resolved, I think the market will keep climbing. If we don’t find a solution and uncertainty persists, the market could stagnate or drop about 10%. If the situation escalates, it could fall 20%.”
However, Lavish also warns of potential “black swan” risks: “The trouble with black swans is you don’t know what they’ll be. During the 2008 financial crisis, when major banks failed, people thought it couldn’t happen—but it did. In 2020, when flights were grounded and everyone was told to stay home, that was also unexpected.”
Conclusion: Investment Strategies in the Storm
Lavish’s final view is hopeful yet realistic: “I’m optimistic about the dollar’s dominance but cautious about its purchasing power. No matter what we go through, the other side will inevitably be money printing, which means you need to own assets.”
He states, “Hard assets like gold are crucial for every portfolio. My concern is wage earners—those without investments. Anyone living on wages and without investments will need to invest in the long run.”
Despite the uncertainty, Lavish firmly believes: “If the market declines, it will be a once-in-a-lifetime opportunity to buy assets at low prices and benefit from subsequent money printing. It’s the same script, just on a larger scale.”
We’ll see how this economic drama unfolds. But one thing is certain: in a world of currency devaluation, tangible assets will be the last fortress of wealth preservation.
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