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Dr. Mark Thornton: Rigged Markets, Why The Real Bubble Is In Government Bonds & Revaluing Gold

Palisades Gold Radio Sep 17, 2026 55:31

Summary

Economist Mark Thornton argues worldwide socialist-style governance is driving borrowing, money printing and protectionism, pushing the fiat system toward inflation or hyperinflation.

Wars in Ukraine and the Persian Gulf have idled diesel, crude and fertilizer capacity, pinching mining through sulfuric acid shortages and raising food prices.

Real wages have barely moved while credit-card balances compound at 25% to 30%, so a squeezed consumer sits beneath asset bubbles benefiting the wealthy.

Government bonds are the real bubble: past 100% of debt-to-GDP, economies end in deflationary depression or hyperinflation, and he expects the inflationary route.

Central-bank buying and years of underinvestment anchor his constructive gold and silver outlook; a US gold revaluation would not fix deeper problems.

Key points on New Found Gold

  • The sponsor segment notes Palisades Goldcorp holds a significant stake in New Found Gold alongside its equity and warrant positions in over 200 junior resource companies.

Kevin Warsh's takeaways

  • Top takeaway Thornton says Fed Chairman Warsh's hawkish Jackson Hole remarks, including repeated mountain-'hike' wordplay, were an attempt to influence the algorithms and AI monitors watching markets, which he calls propaganda.
  • The guest argues Warsh and Treasury Secretary Bessent use statements and small policies to rig markets and keep a lid on oil, gold, and silver prices ahead of the midterms.

Willem Middelkoop's takeaways

  • Top takeaway The host credits Willem Middelkoop with the idea, shared on the show a few weeks earlier, that the US government may be engineering a controlled rise in gold — a 'soft monetary reset' in which Treasury bullion is revalued at, for example, $10,000 per ounce to clean up the balance sheet.

Stijn Schmitz's takeaways

  • Top takeaway The host puts Willem Middelkoop's soft-monetary-reset thesis to the guest, asking whether Washington is engineering a controlled gold revaluation of around $10,000 per ounce to repair its balance sheet.
  • He argues oil is still historically cheap once adjusted for M2 money supply rather than CPI, questioning whether real demand destruction has actually set in.
  • He frames the setup as nearing calamity, citing diesel at all-time highs, 10- and 30-year Treasury yields forming 'hockey stick' charts, a US grains harvest a few percentage points light, and the post-WWII deleveraging as the historical comparison at roughly 125% debt-to-GDP.

Scott Bessent's takeaways

  • Top takeaway Thornton dismisses Bessent's 'I'm the house' boasts about using Treasury money to buy the long bond and suppress 30-year yields, arguing the Treasury is buying only a small amount of 30-year bonds and must borrow on the short end to fund it.
  • The guest argues Bessent's statements are meant to intimidate market participants and make the economy look good before the November 3 midterms, and says he would not put a gold revaluation past him.

Mark Thornton's takeaways

  • Top takeaway Thornton's core thesis as of the September 17, 2026 episode is that the real bubble is in government bonds: with the US past $40 trillion of debt and Japan near 200% of GDP, economies crossing 100% debt-to-GDP end in either a deflationary depression or, under fiat money, rising inflation or hyperinflation.
  • He argues Iran holds strategic dominance in the Persian Gulf — with the sabotaged Saudi east-west pipeline needing about 8 weeks of repairs and US strategic reserves drained — so higher fuel and food costs will pinch mining (diesel, sulfuric acid) and agriculture (fertilizer) globally.
  • He claims Fed Chairman Warsh and Treasury Secretary Bessent are rigging markets with hawkish statements and small policies to prop up the economy before the November 3 midterms, with the breaking point likely deferred until after the vote.
  • He is very constructive on precious metals: central-bank gold buying shows no breakdown and could springboard a return to some gold standard, this year's sharp gold and silver correction is normal bull-market behavior, and he expects early signs of monetary demand for silver to add to intact industrial demand.
  • He says a post-WWII-style outgrowing of the debt would require eliminating overseas military operations, Social Security, and most federal social and regulatory programs — still possible in theory but very unlikely with today's leadership.