RiskReversal Pod Luke Gromen: Why Cash Is Trash & Gold Is The New King
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Dec 12, 2025 
In this intriguing discussion, Luke Gromen, a macro analyst and founder of Forest for the Trees, dives deep into the complexities of fiscal dominance and the current economic landscape. He argues that cash is losing its value while gold is emerging as a vital reserve asset. Gromen highlights Japan's bond market dynamics, the implications of Fed T-bill purchases, and the interplay between currency strength and bond yields. He also reveals how central banks are increasingly shifting reserves into gold, challenging the dollar's supremacy.
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Fiscal Dominance Drives Market Behavior
- Luke Gromen views fiscal dominance and U.S. debt dynamics as the primary lens to interpret market moves.
- He argues markets still play by those rules and nothing has yet fundamentally changed.
True Interest Expense As The Crucial Metric
- True interest expense exceeding 100% of receipts signals an acute fiscal stress point.
- Gromen says that forces inflation or nominal growth acceleration, which penalizes long-duration assets.
Dollar, Gold And Japan's Market Risk
- Equity performance is tied to the dollar; Dow priced in gold is down 45% since 2022.
- Gromen warns Japan's bond-yen dynamics threaten global yields and could force U.S. rates sharply higher.