MW America just imported a mountain of gold. Here's why that should scare you.

By Charlie Garcia

What do central banks know that the rest of us don't?

Something suspicious is happening with gold. Not the kind of suspicion when your neighbor suddenly buys a Ferrari. I mean the kind when a guy in dark glasses unloads mysterious crates at 2 a.m.

In the first two months of 2025, America quietly imported more than 600 tons of gold from London and Switzerland, according to World Gold Council data - enough to make King Midas blush. Officially, economists at many major banks waved it away as a statistical oddity. "Relax," they said. "It's just bullion banks hoarding gold ahead of tariffs." Sure. And a fleet of black helicopters landing at your neighbor's barbecue is just the local weather guy testing his equipment.

Maybe it's nothing - but let's walk through it slowly.

The world's central banks - think of them as the world's biggest piggy banks - picked up 1,062 tons of gold last year, their third straight year on a buying binge. Countries haven't moved on gold (GC00) this aggressively since the 1950s, back when Elvis was king and TVs were furniture. So here's a question: What exactly do they know that we don't?

Russia and China - America's two biggest geopolitical headaches - have spent the past two decades stockpiling gold at an unprecedented rate. Makes you wonder if they're anticipating trouble, or planning to cause it. Meanwhile, America's official gold reserves have sat at roughly 8,133 tons in total for years, according to the World Gold Council. There's about 4,603 tons of gold in Fort Knox alone.

And speaking of geopolitical heartburn, last week China flashed its poker hand, allowing local firms holding foreign currency (think U.S. dollars (DX00)) to buy gold. That's right, China - which was sitting on around $784 billion in U.S. Treasurys as of February - suddenly gave companies permission to swap greenbacks for gold bars. Exchanging just 10% of those dollars into gold would equal roughly 8% of America's official gold holdings at Fort Knox. Coincidence? Sure, if you believe Elvis and Jimmy Hoffa are living together in Boca Raton.

Would China buy that much gold? Of course it would. And it won't stop with physical bullion - China will dig deeper. Literally. Expect China to snap up mining stocks, because that's where the real gold bargains are. How cheap? Consider that the price-earnings ratio of $15 billion VanEck Gold Miners ETF GDX recently was about 20 at the end of April, compared to the S&P 500's SPX P/E of 28.

Ever since Donald Trump returned to the White House, a flood of physical gold has poured into the U.S. - much of it rerouted from London and Switzerland, the world's main bullion hubs.

About 19 million ounces - almost 600 tons - of gold came into the U.S. in a single quarter from these two European sources. For perspective, that's 13% of what's estimated to be locked up in Fort Knox.

Gold markets usually traffic in paper promises, digital IOUs - transactions clean as a Las Vegas casino floor at dawn. Yet, now, actual gold bars are crossing oceans and landing in U.S. vaults. This isn't your usual market dance. Somebody, somewhere - someone with enough muscle to move bullion like Amazon moves books - is making a play.

Even Trump has suggested an audit of Fort Knox's gold - feeding, without evidence, conspiracy theories that the vaults might be empty - though officials insist nothing is amiss. Both the U.S. Mint and the U.S. Treasury have consistently stated that the gold is accounted for, with no significant movement in or out for years. In fact, in 2017 officials even visited Fort Knox and confirmed the bars were still there.

Why gold? Because when the money merry-go-round stops - and it always stops - gold is the last man standing. Paper currencies are group therapy with a printing press - we pretend they're stable, nod politely at the charts, and ignore the fact the whole room smells like someone lit the drapes.

A golden global reset

When a government drowns in debt it can't service, it pulls the only move left - it resets the game.

So picture this: a global reset. All those IOUs get reshuffled, the Monopoly board wiped clean. When a government drowns in debt it can't service, it pulls the only move left - it resets the game. Ray Dalio, founder of hedge fund Bridgewater Associates, calls this the end of a debt cycle.

No fancy economics degree needed here. We're 81 years into the Bretton Woods system, when the typical cycle runs 50-75 years. The money printers run 24/7 until the music stops, the currency collapses like a shot horse, and everyone who bet on promises instead of hard assets finds themselves holding worthless paper.

This is not theory - it's the playbook governments have followed since Rome debased their coins. For the skeptics, Dalio lays it all out in his book "Principles for Navigating Big Debt Crises," which you can download for free at Bridgewater.com.

When a currency is debased, folks holding gold will be the ones writing the new rules. It's not conspiracy; it's history. Bretton Woods? Gold-backed. Ancient Rome? Gold standard. Whoever has gold decides what money is, what it's worth, and who gets to spend it.

China and Russia stockpiled gold. America, meanwhile, pretended gold was passé until someone in D.C. finally Googled "monetary collapse" and yelled for a forklift. You don't move vaults full of metal because it's shiny - you move it because the paper stuff's starting to smell like 2008 in a microwave.

Keep an eye on gold

Portfolios filled with nothing but tech stocks, bonds, and vague promises might soon feel emptier than campaign pledges the morning after Election Day.

For investors, the message is simple and stark: Keep your eyes on gold. It hasn't climbed in price because it's pretty - it's climbing because a lot of smart, powerful people sense the ground shifting. Portfolios filled with nothing but tech stocks, bonds and vague promises might soon feel emptier than campaign pledges the morning after Election Day.

If central banks - those famously secretive, careful, cautious institutions - are stockpiling gold like paranoid survivalists hoarding canned beans and ammo, investors would be wise to reconsider their own financial basements.

Maybe it's time to ask if your financial adviser thinks gold is "too old-fashioned" for your portfolio - while central banks scoop it up. Trump's not whispering about this either - a few weeks ago he posted his "golden rule" in all-caps on his Truth Social account, like it came straight from the Book of Deals.

So, Trump and the central banks might be right - he who has the gold may well set the rules. But don't ignore Warren Buffett's counterpoint. During the 1973 bear market, he missed investing in Coca-Cola $(KO)$ and Walt Disney $(DIS)$ at fire-sale prices. Now at 94, with about $350 billion in Berkshire Hathway's $(BRK.A)$ $(BRK.B)$ cash reserve, the Oracle of Omaha won't repeat that mistake. When asked if he's saving cash for his successor Abel, Buffett bristled: "I wouldn't do anything so noble."

The lesson from Buffett's experience? Keep your powder dry. When those perfect pitches float across the plate, nothing swings harder than cash parked in Treasury bills. Add some gold and silver (SI00) - and even bitcoin (BTCUSD) too.

But remember: When markets finally capitulate, gold might set the rules, but cash is still the kingmaker.

Charlie Garcia is founder and a managing partner of R360, a peer-to-peer organization for individuals and families with a net worth of $100 million or more. Garcia holds positions in gold, silver and bitcoin. Email him at charlie@R360Global.com.

More: Gold skids more than 3% on tariff relief. Is it time to sell?

Also read: What a steepening gold futures curve says about demand for the yellow metal

-Charlie Garcia

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May 15, 2025 07:45 ET (11:45 GMT)

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