Even the NYT Is Saying, “Buy Gold”

A recent piece in the New York Times encouraged readers to buy gold, noting its record-breaking run since 2020. However, what the article gets wrong is associating the phenomenon with presidential policies instead of central bank monetary policy. Treasury policies can contribute to money supply growth by issuing debt, and presidential policies can add fuel to economic fires. 

But money printing and sustained artificially-low interest rates are why inflation keeps resurging no matter which political party is in power.

As Peter Schiff recently said on X:

Trump has given the Fed a gift, as FOMC members will blame the coming surge in inflation on tariffs. But tariffs won’t be the cause. Resurgent inflation will result from the Fed’s monetary policy mistakes. They held interest rates too low for too long and printed too much money.

— Peter Schiff (@PeterSchiff) February 20, 2025

The Fed is permanent, and can’t be reformed. No matter who joins the Board of Governors or who becomes Fed Chairman, the only tools that central banks really know how to use are inflationary. Money printing and artificially-low interest rates are the only methods the Fed has in their effort to manage the economy.

Inflation is an expansion of the money supply, not the rise in prices. Prices go up as a result of inflation, not the other way around. But while the NYT piece attributes this 12% increase in 2025—following a 27% rise in 2024—to President Donald Trump’s second-term policies, such as tariffs and deportation plans, the fundamental driver is that central bank monetary policy has inflated the money supply and eroded confidence in fiat currency, propelling gold’s ascent. 

Analysts like those quoted in the NYT article suggest that Trump’s proposed tariffs on Canada, Mexico, and China, could stoke inflation by raising import costs. Economists quoted in the piece note that such measures, combined with labor market pressures from deportation policies, are pushing investors toward gold. This makes sense on the surface — disruptions to trade and labor can indeed lift prices, and higher costs for imports will just be passed onto consumers. But money supply growth is what inflation is; price increases are just one of its downstream effects. Gold’sgain suggests a deeper unease tied to the Federal Reserve’s actions rather than any single administration.

The money supply (M2) has ballooned from $15.4 trillion in early 2020 to over $21 trillion today, according to Fed data. Meanwhile, interest rates remain below historical norms. Low rates discourage saving and devalue fiat currency, making gold—a finite asset immune to printing presses—an attractive hedge. The Times focuses on Trump’s tariff threats, but central banks set the stage long ago.

M2, 1981 to Present

The World Gold Council reports that central banks bought 1,037 tons of gold in 2024, up 6% from 2023, signaling a shift away from dollar dominance. Physical demand is also straining markets, with the article noting New York futures traders awaiting bars from London vaults.

The Times mentions Trump’s quip about auditing Fort Knox “to make sure the gold is there,” a comment Treasury Secretary Scott Bessent downplayed. Official figures peg U.S. reserves at 8,133 metric tons, but the last full audit of Fort Knox was in 1953. While the article treats this as a sidebar, it underscores a valid point: opaque, dictatorial monetary systems fuel skepticism. Central banks control the levers but, unlike politicians, their “errors” are academic and esoteric enough to evade mainstream scrutiny. 

The Times captures a symptom—gold at $2,900—and correctly tells its readers to buy, wisely realizing that this bull run isn’t over. But it misses the root cause of the gold spike, and assumes that inflation and higher prices are the same thing. Central banks, with their printing presses and interest rate policies, are the architects of inflation. Lots of things can increase prices, and money supply inflation is one powerful force among many as it erodes the purchasing power of the dollar and continues sending gold to record highs.