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| Money Metals News Alert | August 4, 2025 – Gold prices finished last week a bit higher while silver lost ground. Silver's move lower came on the heels of a melt down in the copper market.
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Copper prices had surged in July after the Trump administration signaled a 50% tariff was coming. Last week, though, the White House announced that refined copper would be exempted from tariffs. Only fabricated copper products will be taxed.
Traders who had loaded up on futures contracts for the commodity were caught flat footed. Copper prices crashed 20% on Wednesday – the largest single day drop for copper in COMEX history.
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Silver, which had risen some in sympathy with copper last month, gave some of those gains back.
Stock prices were also clobbered last week. The dollar finished higher and yields on the 10-year Treasury were down sharply.
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 | Gold : Silver Ratio (as of Friday's closing prices) – 90.7 to 1 | | |
| Is The Genius Act a Backdoor to CBDCs? | | | |
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Congress recently passed the Genius Act which provides a regulatory framework for private banks and other organizations to develop and operate stablecoins. These are digital tokens which have their value pegged to another "stable" asset, such as the U.S. dollar.
There was plenty of cheering from Washington and from Wall Street. We're told the Act opens a new frontier for innovation and development in finance.
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Innovation sounds nice. Unfortunately Wall Street bankers have a terrible track record when it comes developing new products and services which improve anyone else's lives.
Mortgage backed securities were hailed as an "innovation" prior to the 2008 financial crisis. Bankers used them as a vehicle for making garbage loans and then packaging them for sale with a bogus triple-A rating to pension funds and insurance companies.
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When that fell apart, they peddled them to the Federal Reserve Bank (at full price).
The problem is that major financial institutions aren't really like small businesses trying to innovate and succeed. There may be no cozier relationship than the one between Washington DC and Wall Street.
Large banks enjoy practical immunity from prosecution for their misdeeds. For example, no one in top leadership has ever been prosecuted for the widespread fraud which led to the 2008 crisis.
These banks also claim the ultimate protection against the consequences of bad decisions and/or poor luck. The public will bail them out.
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This bizarre privilege for banks used to be merely assumed. Politicians and central bankers were quick to step in after events like the failure of Long Term Capital Management in 1997 and the 2008 Financial Crisis.
Today, the 29 largest banks are officially designated as Globally Systemically Important Banks (G-SIBs), and governments are formally obligated to prevent them from failing.
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In return for immunity from the consequences of bad judgment or misdeeds, the large banks tend to cooperate with government officials.
Consider initiatives such as Operation Choke Point. Bureaucrats and bankers worked together to prevent clients in out-of-favor businesses, such as gun shops and coin dealers, from being able to secure banking.
Now, Wall Street has a green light to build stablecoins – digital tokens which can represent currencies such as the dollar – in brand new payment systems.
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The large banks will build centrally managed systems rather than decentralized networks like the one powering Bitcoin. They may have complete tracking and control over who is allowed to transact, what they can purchase, where they can buy or sell, and when transactions are allowed.
The Genius Act offers zero protections for privacy or against censorship to the users of stablecoins.
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What could go wrong?
Stablecoins could become be a backdoor method of getting the public to adopt something very close to a Central Bank Digital Currency (CBDC). To the exent the big banks are in charge of stablecoins, government officials may get access to transaction data and a large measure of control by proxy.
The recent spotlight on government funding of "Non-Governmental" Organizations (NGOs) revealed the federal government has a penchant for using "private" organizations as a workaround to citizens' constitutional rights. Bureaucrats job out programs which are either illegal or too unpopular to handle directly.
The strategy might be working. There has been a lot of fear and consternation over CBDCs. Few seem worried about Wall Street's rush into launching stablecoins.
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More benevolent organizations may launch stablecoins. However, it is hard to imagine how a stablecoin might be built with decentralized control or the promise of privacy and anti-censorship.
The Genius Act requires token issuers to register as a "financial institution". That means built-in requirements to screen users for Anti-Money Laundering (AML) and Know Your Customer (KYC). Issuers will be keeping a close eye on who uses their tokens and how.
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It will, of course, be framed as a good thing – protecting society from drug dealers and terrorists.
One thing is clear. All these developments only make ownership of private, off-the-grid, gold and silver even more important for liberty-minded people. | | |
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| This week's Market Update was authored by Money Metals Director Clint Siegner. | | |
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