Monetary Matters with Jack Farley “Mother All Crises” | Luke Gromen on America’s Choice Between AI Dominance and Real Value of Treasury Market
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Dec 10, 2025 
In this enlightening discussion, Luke Gromen, a macro analyst and founder of Forrest for the Trees, tackles America's tough choice between AI competition with China and preserving the US Treasury market's value. He outlines why our electrical grid is a critical bottleneck and warns of Bitcoin's signals for a tumultuous 2026. Gromen also predicts gold could skyrocket due to shifting reserve dynamics, while tariffs and capital flows could lead to inflation and bond market risks. His insights combine economic trends with geopolitical implications, painting a vivid picture of the financial landscape ahead.
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Reshore Or Preserve The Bond Market
- The US faces a forced choice between keeping the Treasury market's real value or reshoring industry to compete with China.
- Reshoring requires positive real rates and likely yield-curve control, which will erode bond real value.
Two Competing Post‑1971 Playbooks
- The post-1971 model relied on offshoring production and foreigners recycling dollars into US capital markets.
- A reshoring model flips flows so foreigners invest in US factories rather than treasuries, pressuring yields and treasuries' role.
Why Gold Becomes The Reserve Asset
- If global capital shifts from treasuries into US factories, rates rise and yield‑curve control becomes necessary.
- Countries will seek a non‑debasable reserve asset and gold is uniquely positioned to fill that role.
