Why Gold and Silver Are Entering a Historic Supercycle as the Fed Loses Control | Nomi Prins

Sprott Money Jul 15, 2026

Summary

The guest argues central banks set the cost of money but cannot control real-asset inflation, leaving gold and silver as long-term stores of value.

Paper silver trading in one ETF can reach 50 million ounces a day against roughly 800 million ounces of annual mine supply, per the guest.

Silver is in its sixth consecutive year of structural deficit between mine extraction and real demand, according to the guest.

A cited study since 1992 shows gold, gold miners, and especially junior miners beat cash and Treasuries on purchasing power.

Central banks led by China have cut Treasury holdings and keep adding gold, leaving reserve percentages below historical highs, the guest says.

Top takeaway Prins argues that despite Warsh's inflation-first rhetoric, he will not be able to shrink the Fed's balance sheet or restart QT, because that would work against managing the government's growing debt-servicing costs.
She notes the Fed's balance sheet grew about $250 billion from December 2025 through the as-of date — roughly matching the 10-year Treasury issuance over that period — and remains about $2 trillion above its post-2008 peak.
She says Warsh's pledge of less guidance and an inflation-first focus amounts to the same data-dependent approach as Powell's, with talk of changing how inflation metrics are calculated.
With inflation in the high-3s to low-4s percent range as of mid-July 2026 after oil spikes tied to Iran, she calls a possible 25 basis point hike before year-end a 'statement hike' that would change little.

Top takeaway Hemke argues gold's sharp fall over the four months to mid-July 2026 on rate-hike expectations rests on Fed 'jawboning': its real mandate is keeping markets afloat — and, as he puts it, greasing a $2-trillion-a-year deficit — not fighting inflation.
He frames today's speculation as rhyming with the 1920s and suggests Warsh's inflation-first posture is about establishing gravitas, not a real break from Powell.

Top takeaway Prins's central thesis: the Fed and other central banks cannot control inflation — only the cost of money and money supply — because they cannot control real assets or supply chains; she notes the Fed cut rates from 5.75% to 3.75% while inflation stayed above its 2% target.
She cites a study of returns since 1992, net of purchasing power: $100 in cash lost about 60% of its value, Treasuries returned about 2x, gold about 5x, the S&P 500 about 15x, top gold miners about 20x, and surviving junior miners up to about 100x — on which basis she would buy gold, not Treasuries.
The Fed's balance sheet grew about $250 billion from December 2025 through the as-of date — roughly matching 10-year Treasury issuance over that period — and remains about $2 trillion above its post-2008 peak; she expects it to keep growing and QT to stay off the table.
She argues paper markets distort physical ones: the SLV silver ETF trades on the order of 25-50 million ounces per day (1.5-10 billion ounces per year) against roughly 800 million ounces mined annually, with silver in a sixth straight year of structural deficit and gold heading for one on current demand alone.
She notes China has cut its US Treasury holdings from about $1.3 trillion to $650 billion while the People's Bank of China and other central banks keep buying gold, and central-bank gold reserve percentages remain below historical highs — implying substantial further official buying.