Name: Trump Just Crashed Gold, Silver, & Bitcoin - What You Need To know
Uploaded: 2026-02-01T18:13:25.000Z
Duration: 13 min 58 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Silver had its worst day since 1980s and Bitcoin seems like it's sliding to zero.

Adverbs of manner

People are freaking out because they don't understand what exactly is happening.

Just recently we were talking that gold prices are about to cross 10k.

Gold prices crashed from $5,500 to less than $5,000.

People were freaking out about the shortage of silver, that China has put restrictions on silver and all invest massively buying silver as if there is no tomorrow.

The real question right now is that will gold, silver and bitcoin prices will continue falling or this is an opportunity and you should be buying these assets.

Why the stock market is not crashing alongside gold and bitcoin and silver.

Let's understand what exactly is happening here.

The value of gold, silver and bitcoin is directly related to the value of the dollar.

The more valuable dollar becomes the less valuable these assets and vice versa.

Unlike bitcoin and gold, silver has a lot of utilities because it's used in a lot of electronics.

But overall there is plenty of silver in the world and most of that silver is recycled anyways, which is why it's not as valuable as gold.

But on the other side, nobody wants to hold gold because gold is a very useless asset.

But investors prefer it in order to hedge their wealth.

Nobody wants to hold US Dollars when it's value is being evaporated, which is why in order to hedge against inflation, investors often move to safe haven.

Assets such as gold, silver, and in some cases right now is even bitcoin.

Investors predict the value of the dollar based on the action of the Federal Reserve.

If the Federal Reserve suddenly decides to devalue the dollar, then investors are going to move into these assets and vice versa.

So if you look historically at the price of gold, you will realize that price.

For a very long time, gold prices have been extremely stable, especially after the 1990s.

Up until early 2000s, gold prices only fluctuated between $200 to $400.

The first biggest increase in the price of gold started back in 2008 when the federal Reserve introduced quantitative easing.

And gold prices spiked from $762 to almost $2,000.

Since the creation of the Federal Reserve, the main tool of the Fed was interest rates.

So if the Fed wanted to limit the supply of money, the Federal Reserve would increase interest rates and vice versa.

If it wanted to increase demand in the economy, it would lower down interest rates and borrowing Money is going to become a lot more cheaper and people are going to borrow more money, spend more money, and

that economic cycle is going to turn even faster.

However, after the 2008 financial crisis, the Federal Reserve realized that they lowered interest rates to 0% and it did not have any impact on the economy.

So the government decided that we have to take it to a completely different level.

If lowering interest rate is not helping to boost the economy, we are literally just going to dump money into the economy.

And that's what we call quantitative easing, where the Federal Reserve is buying US Treasuries in the market at massive scale.

So when you're throwing trillions of dollars into the economy, what do you think is happening to the value of the currency?

It deteriorates, which is why gold prices spike to $1,900.

In fact, there is a direct correlation between the balance sheet of the Fed and the prices of gold.

Up until 2008, the total amount of assets that the Federal Reserve had was about $870 billion.

And that means that throughout the entire existence of the Fed, that's how much of the US Treasuries the Federal Reserve has purchased.

Because there was no mechanism where the Fed could actually buy so much US Treasuries, which means that so much money could.

Theoretically, it was not even possible for that much money to get into the economy.

But with the introduction of quantitative easing, in a matter of a few months, they threw into the economy about $1.5 trillion.

And the balance sheet has increased from $870 billion to as much as $2.3 trillion.

And as the Federal Reserve kept throwing more money into the economy by buying these Treasuries and increase its balance sheets to $2.8 trillion, gold prices continued rising.

So if you want to predict the price of gold or silver or any assets that are being used in order to hedge against the dollar, all you have to do is to take a look at what's happening to supply of the dollar.

Between 2012 and 2018, the the federal Reserve has increased its balance sheet by about $2 trillion from $2.8 trillion.

But gold prices kept falling down from 2012 up until 2020.

So the Fed increased the supply of dollars by $2 trillion.

On the other side, gold prices have went down.

And that's because after the 2008 financial crisis, the United States did not experience any inflation or whatsoever.

The targeted inflation by the but you can see clearly that after the 2008, there has been multiple years where the United States had inflation that was below 2%.

In fact, at certain point, it was like 0.1%.

economy that the Fed is throwing trillions of dollars into the economy.

The US economy is actually growing and has recovered from the 2008 financial crisis.

And that much dollars is not causing any inflation or whatsoever.

Maybe because there is a shortage of dollars into the economy.

Maybe there is a shortage of dollars across the globe.

So it makes sense for the Fed to throw so much dollars into the economy, which is why investors abandoned gold and instantly move to buy US Treasuries.

Especially if the US Treasuries are paying you a higher yield than the inflation rate, then you are getting a far better deal than gold because your golds are shining out there and are not earning anything.

But if you're holding U.S. treasuries, you're getting consistent interest from the U.S. government.

The Federal Reserve again pushed quantitative easing and increased the supply of money from $4 trillion up to $9 trillion.

But here is the reality is that it didn't actually lead gold prices to catastrophically rise.

Why throwing $5 trillion into the economy did not actually cause so much inflation.

And that's because if you go back to 2020, that was seen as the only alternative to the United States was actually closed down and nobody knew what is going to happen to China.

Nobody cares about the European economies because they've been stagnating since 2008.

So the only option in the world was the United States.

So replacing the US dollar as the global reserve currency back in 2020 and 2021 was impossible even to imagine because the United States was at the top of the world.

And throwing so much money into the economy only fueled the US Economy.

And the US Economy was growing faster than ever.

The moment the United States began to experience inflation back in 2022, what do you think the Federal Reserve instantly did?

It increase interest rates to 5.5% and massively started quantitative tightening.

It reduced its balance sheet from $9 trillion to as much as $6.5 trillion.

Quantitative tightening is the opposite of quantitative easing is when the Federal Reserve, instead of money into the economy, it takes that money that it threw through quantitative easing and takes it out of the economy by selling its US Treasuries or not directly selling the US Treasuries but allowing the US Treasuries to expire without refinancing.

Since the US Government is never going to pay off its debts, but

it's rising so much money, when those Treasuries, especially short term Treasuries, expire, the Federal Reserve used to refinance them.

So it would offer another loan to the US Government by buying the new Treasuries that the government is going to release.

But in this case, during quantitative tightening, the Federal Reserve is telling the government, look, I'm not going to buy more of your year's Treasuries.

So you have to sell them to the general public.

That restored faith in the US Economy and the US Dollar, which is why gold prices never actually spike significantly after that.

The only real Spike came in 2024 when the world realized that Donald Trump is about to become the President of the United States.

Now, I don't have anything against Donald Trump, but

if you actually think about it from the perspective of investors, they actually have a lot of concerns.

First of all, they trust the US Dollar because they trust the independence of the Fed.

And Donald Trump has multiple times already attacked the Federal Reserve.

He accused them that they are actually lowering interest rates only to help the Democrats.

So investors are expecting that if Donald Trump is going to become the President, he's going to pressure the Federal Reserve to lower interest rates even when there is inflation.

And the United States ended 2024 with inflation of 3%.

And now if you're going to lower interest rates in 2025, you are going to cause even more inflation.

When investors are investing anything, they're doing that not because of something that is happening today, but

rather because of what they expect is going to happen sometime in the future.

So suppose you imagine that of this asset or this stock is going to rise and you're going to buy that stock today or you are going to wait when that price have already increased, of course you are going to buy it today because you're expecting it to rise so that when it rises, you are going to profit out of it.

So when investors expect that the value of the dollar is going to deteriorate, they're going to take action today.