Macroeconomic strategist Garrett Goggin warns that a new U.S. law called the Genius Act could trigger an unprecedented bank run, a flight of deposits into stablecoins, and propel gold and silver to new record highs. With central banks accumulating precious metals and Tether reportedly buying two tons of gold per week, investors around the world are facing a critical question: how to protect their savings from the next shockwave?

The recent dip in the price of gold has led some commentators to claim that the rally in this metal is over. Don't be fooled, says Garrett Goggin, founder of The Golden Portfolio, in an extensive interview with Daniela Cambone for ITM Trading. He insists that the "supercycle" of commodities is far from over, but rather is gaining momentum – and a little-known bill making its way through the U.S. Senate could be the spark that ignites the fuse.

This "Genius Act" aims to make America the global center of cryptocurrency innovation by directly integrating stablecoins into the banking system. Until recently, major U.S. banks were freezing accounts that interacted with tokens like Tether. Under the proposed rules, those same dollars could be sitting alongside insured deposits on your online banking screen. Savers would simply click and transfer cash to a dollar-backed coin – or even to Tether Gold, a token backed by physical gold stored in Switzerland in a 1:1 ratio.

This is where Goggin sees the problem. When depositors can exchange bank balances with zero yield for a token that can earn 4-6 percent in decentralized finance (DeFi) without leaving their smartphone, trillions could flee the traditional system. "It will be the biggest bank run of all time," he warns.

While banks watch liquidity disappear, the corporate treasury of Tether – already the 15th largest holder of U.S. Treasury bonds – would recycle those new inflows into short-term government bonds and, crucially, into more gold.

Tether is reportedly buying around two tons of the metal each week and has begun taking significant stakes in royalty companies like Elemental and Gold Royalty. This insatiable appetite is being added to the record demand from central banks, which began when the West froze Russian reserves in 2022. According to Goggin, many sovereign states now prefer assets that they can "hold in their own vaults, with their own army," to digital dollars that Washington can block with the push of a button.

The market positioning also tells a story. The number of shares outstanding in GLD, the world's largest gold ETF, is roughly 20 percent lower than it was in 2011, when it reached its peak, while the mining ETF GDX is trading at a decade low. For Goggin, the lack of retail and fund investment inflows means that the rise has only just begun. His models put the fair value of silver at $51, which would rise to $87 if the gold-to-silver ratio from 1980 and 2011 were to repeat.

Could the Federal Reserve halt the rise by raising interest rates? The strategist argues that it would only do so if it was willing to raise interest rates to 10 percent, which would bankrupt the U.S. government, which already has a debt of $37 trillion. A more realistic scenario, he says, is what Trump advisor Stephen Moore has called the "Mar-a-Lago deal": devalue the dollar, lower interest rates to 1 percent, and pursue higher nominal GDP.

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