The Price of Promises

Every few years, the same pattern repeats: economic uncertainty arrives, governments respond with fiscal "relief," and politicians frame the solution as temporary support for struggling families. The checks arrive. Markets stabilize. Headlines shift. But the true cost of those promises only becomes visible later—written not in budget documents, but in the quiet erosion of purchasing power that follows every injection of stimulus into the economy.

President Trump has floated the idea of tariff-funded rebate checks worth between $1,000 and $2,000 per person, framed as dividends from his tariff revenues. It's a familiar pitch: money distributed today, consequences deferred to tomorrow. Meanwhile, the Congressional Budget Office confirms that the federal government logged a $1.8 trillion deficit for fiscal year 2025, virtually unchanged from the prior year despite surging tariff collections.

The math tells an uncomfortable story. Between 2008 and 2012, the federal government enacted roughly $1.8 trillion in fiscal stimulus to combat the Great Recession, spread gradually over five years.

Research from the Federal Reserve found that U.S. fiscal stimulus during the pandemic contributed approximately 2.5 percentage points to excess inflation. The mechanism is straightforward: when governments inject cash without a corresponding increase in productive capacity, purchasing power dilutes across the economy. Prices adjust upward, and the relief becomes a mirage.​

This dynamic is playing out again. U.S. inflation reached 2.9% annually in August 2025, the highest rate since March 2024. Monthly inflation data for October 2025 shows core CPI at 2.93% year-over-year.

Each round of stimulus compounds the challenge: debt rises, currency dilutes, and real value quietly shifts away from savers toward those positioned in assets that retain intrinsic worth.​

Gold's ascent in 2025 offers a sobering counternarrative to political promises. The precious metal surpassed $4,000 per ounce on October 8, marking its 45th new all-time high of the year. Year-to-date, gold prices are up more than 50%. "What makes this rally different?" asks a recent market analysis. "Historically, gold has reached key landmarks at times of chaos or uncertainty... However, this time around, the gold rush was driven by a combination of central bank buying as well as more retail investors purchasing the commodity." Physically backed gold ETFs have added 634 tons year-to-date, with holdings approaching their 2020 pandemic peak.​​

Gold functions as a truth meter for fiscal policy. It doesn't respond to rhetoric or campaign promises. It responds to the gap between what governments promise and what their balance sheets can sustain.

notes the World Gold Council. U.S. retail investors, who spent most of the rally taking profits, have only recently begun participating as buyers following the Federal Reserve's pivot to rate cuts.

Political relief operates on election cycles. Economic consequences operate on longer timelines. The $498 billion cost of the 2008 bailouts represented 3.5% of GDP. The spending justified itself as preventing systemic collapse. But it also set a precedent: when crises emerge, the first instinct is distribution, not discipline. Treasury projections now estimate the U.S. debt-to-GDP ratio could surpass 200% by 2050 and reach 535% by 2100 if current spending patterns continue.

These are not abstract warnings. They translate into real decisions investors must make today about where to allocate savings. The question is whether individuals will protect their purchasing power against the inevitable dilution that follows.

Independent Thinking. Steady direction.