Black Swan Author Nassim Taleb: Gold Is Effectively Now The Reserve Currency
A recent Bloomberg interview showed Taleb in his best form discussing the dollar, gold, and Trump 2.0's tariff and immigration policies.
Author of “The Black Swan”, Nassim Taleb, joined Bloomberg earlier this week and shared some important insights on gold, the changing role of the US dollar globally, tail risk, and Trump 2.0’s tariff policies.
Taleb is a Lebanese-American scholar, statistician, former options trader, and risk analyst best known for his work on probability, uncertainty, and randomness. He is widely recognized for his provocative ideas on black swan events—rare, unpredictable occurrences that have massive consequences.
🔦🎤Highlights from the interview
On the primary tail risks he sees today:
“…we're not going to be borrowing less. I mean, clearly, we're going to continue to increase deficits, at least if this one big, beautiful bill is passed… There's a second risk. So the first one is the deficit. The second one is effectively that the dollar is losing its status as a reserve currency.”
When asked what proof he has of the dollar losing its status as the reserve currency, Taleb responded:
“You can see the accumulation of gold in the reserves and the behavior of gold over the past 12 months. And it didn't start with with Trump's policies. Of course, it started with Biden when he froze the accounts of people connected to Putin….So it's a little slow and of course, thinking that it'd be limited there, but people not connected to Putin decided to stay away from the euro and the dollar. And gold is effectively now the reserve currency. So transactions take place in dollars, euros, usually dollars, and at the same rate, however, they get converted back into gold.”
When asked about Citi’s recent downgrade of gold:
“What do they know? How do they know?”
On the perception of America under Trump 2.0 and gold’s emerging role as a ‘storage currency’:
“With the new administration, the perception of America, the riskiness of America has increased. So on top of that move into gold that started with Biden. We now have a move into gold by people who are afraid of these policies, including central banks around the world, which doesn't look like it's going to let up, especially central banks around the world. So the dollar is a good transactional currency because people can label things in it, but not necessarily a storage currency. And this is what we're facing now.”
On Trump 2.0’s tariff polices:
“I understand tariffs may be necessary in many areas. They need to be symmetric and stuff like that. So this we understand. But the way they're going about it makes no sense.”
On Trump 2.0’s tariff team (Bessent, Lutnick, Navarro, etc.):
“They’re not specialists in that area…..Peter Navarro, I apologize, but I'll have to say that in his own domain, he hasn't fared well. If the other ones have had some kind of performance in an area that is orthogonal and others uncorrelated to the current performance, it's like asking a dentist to do brain surgery….they may do better than average, but I'm not sure….So none of them really is a specialist of the area that they're discussing.”
On immigration:
“I don't know if you realize the structure of American businesses and American labor. The last time we had a labor shortage, we saw what prices did. People have large loans. Everything is based on cheap labor coming from Latin America, or elsewhere. Everything is based on it.
So trying to constrain that source of labor may make sense in the long run, but like in Japan, for example, they have small houses, here people have mansions. You won't be able to find people to mow the lawn or do things….for the time being we don’t have cheap robots.”
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