Chris Whalen, who publishes The Institutional Risk Analyst and is writing a book on gold, gives over a full episode of The Wrap to questions sent in by the show's viewers. The answers run from whether Washington could seize gold a second time to how Annaly actually earns its yield, what Jerome Powell should have done in 2020, whether credit unions are safer than banks, and what life in Florida is like after New York.
Guest: Chris Whalen, who publishes The Institutional Risk Analyst and is writing a book on gold
Host: Julia La Roche
Published: 29 August 2026 on The Julia La Roche Show feed
Watch on YouTube | Apple Podcasts | 32 min
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Key Takeaways
The only real protection against a second gold seizure is metal held outside the country
Mr. Whalen said a government carrying this much debt has effectively borrowed against every asset in the country
FDR took the gold that belonged to the Fed's member banks in 1933 and used it as collateral to issue more paper
A Fed forced to monetize the deficit is the start of something much worse
Not the crisis-era buying of 2008 or 2020, but buying because the Treasury cannot find enough buyers
Powell's mistake was continuing quantitative easing after the bond market had already healed
Spreads stabilized at the end of 2020; the buying carried on and pushed mortgage rates to two percent and in some cases one and a half
The last budget surpluses were a demographic accident, not a policy anyone can copy
Trust-fund contributions were so large the Treasury barely had to issue long-dated debt
Boomers cashing out changes who owns the assets rather than how much is invested
Half of it sits in 401(k)s and other plans that feed passive strategies, and nobody liquidates on their retirement date
Nvidia lending to its own customers is circular, and AI is pulling money out of everything else
Crypto is wilting because the money is chasing AI stocks
Annaly is not just a bond portfolio — it is a levered one wrapped around a servicer and a lender
Ten-to-one leverage on government-guaranteed paper, with servicing as the offsetting hedge
Private credit firms have taken over insurance companies and are running them as investment vehicles
Offshore reinsurance sits behind annuities American retirees are counting on
Metals belong in a portfolio as a hedge, not as a price bet
His own book is about 65% equities and 15% precious metals, with the rest in income
With $40 trillion of debt, a national sales tax is a live possibility
Florida is already trading property taxes for sales taxes, and he thinks a VAT is where the federal deficit ends up
A Second 1933 Would Be About Optics, Not About Gold Backing
The show is a viewer-questions episode, and the host opened it with one from a viewer named Ben: in a dollar crisis or a debt restructuring, is there a risk of gold-ownership restrictions like the ones imposed in 1933, and how can an owner get ahead of that. Mr. Whalen's answer was that the risk is real and that there is only one hedge against it.
"The only way you can really protect yourself is to have physical gold and keep it offshore."
His reasoning is about the balance sheet, not about politics. When a government carries this much debt, "all the assets in the United States are effectively compromised by that debt" — as though it had borrowed against your house and everything else you own, and might one day come for those assets to settle its own obligations
What FDR actually did in 1933 was take the banks' gold, not the public's alone: "He actually stole the gold that belonged to the member banks of the Fed, but which is now inside Fort Knox." He used that collateral to issue more paper because he could not repudiate the gold standard outright
The constraint that forced FDR's hand no longer exists, so a repeat would be "mostly a question of optics and public relations". Asked his own rhetorical question — whether gold taking off and going to $10,000 an ounce would put pressure on the US Treasury — he answered yes
He noted that Jim Rickards, a recent guest on the show, has talked about this, and said the threat the Treasury faces is the continuing demand for gold around the world
Chinese buying is the mechanism: their purchases this year have been very large, larger than he has ever seen, which pushes metal prices up and in turn pressures the dollar
The chain runs through reserve managers, who he imagines saying "I don't want to hold half of my reserves in dollars. I'm going to hold 40% or 30%."
The dollar's real support is transactional, not investment demand. It has held up because people use American money as a means of exchange, and losing that is the loss that matters
He drew the parallel from the book he is writing: when Rome fell, money across Europe fragmented, trade suffered because there was no common currency to pay with, and "if we saw the dollar no longer become the default means of exchange in the world economy, you would see fragmentation" and a great many inefficiencies with it
The timeline is slow, and he said so twice. In his view this is not something that happens quickly — it happens gradually, but it happens, because "no democracy can have sound money. That's what Hayek said years ago"
Rome Paid Its Senators in Gold; Medieval Germany Had to Use Silver
The host asked what he has learned writing the new book on gold. His answer was an unprompted tour of the ancient and medieval money supply.
Writing it has meant immersing himself in antiquity. He already knew the modern story — the American effort to talk citizens out of thinking of gold as the measure, which is why FDR seized it in 1933, something he called "just more progressive social engineering"
In Rome, gold was compensation on a scale that is hard to picture: "If you were a Roman senator, you would get hundreds of thousands of gold pieces every year as your compensation," enough to make a man enormously wealthy, buy land and pay his taxes — and Roman taxes were paid in gold
The interesting part for him is what happened next. The world fragmented badly during the Middle Ages, silver took its place alongside gold in the pantheon of money, and access rather than preference decided which was used
In Germany you used silver because there was no choice; there was not enough gold for coinage
What he called the most interesting thing of all is the ebb and flow of how these metals have been used as money over time
A Fed That Monetizes the Deficit Is "the Beginning of the End"
A viewer put a layered question to him: assume the Fed raises rates 25 to 75 basis points over the next six months, then cuts dramatically in 2027 as the economy slows, and then prints heavily to cover a growing federal deficit — where does gold end 2026, and how high does it go in 2027 and 2028.
He said the last clause is the whole question. If the Fed has to start explicitly monetizing debt because neither the Treasury nor the market can handle it any more, that is the scenario that matters
That is when gold stops behaving like an asset and starts behaving like the alternative currency. He pointed to the backwardation case made by what he called our friends at Monetary Metals, in which "gold becomes essentially the anti-dollar and the price of it just goes up and there's no way for people in dollars to catch up"
The distinction he drew is between crisis buying and funding the government. Quantitative easing was done after the global financial crisis and again during COVID; doing it because the Treasury cannot sell its debt to enough buyers is a different act — "that's kind of the beginning of the end"
That, he said, is when the United States starts to see some very difficult times
The 1998–2001 Surpluses Were the Baby Boom, Not Robert Rubin
A viewer named Rick sent two questions in one: whether any policies from the last surplus years, 1998 to 2001, could be applied today, and how someone who does not want to hold much physical metal should own precious metals. Mr. Whalen took the second one first, then had to be reminded of the first.
The easy way to own gold and silver is through equities and funds, and it is how he does it himself. He said his site keeps a list of about 48 different vehicles, stocks and ETFs, which he called the most accessible route
"I don't own a lot of physical gold. I'm just not that big of an investor."
On the surpluses, his answer was three words: "Well, make more babies."
Robert Rubin was Treasury Secretary and took credit for the surplus, but Mr. Whalen said the cause was elsewhere: contributions into Social Security and the other trust funds were so large in that period that the Treasury literally did not have to issue long-dated debt
"a demographic effect from the baby boomers that drove the Treasury into surplus" — not, in his telling, anything righteous the Treasury did, and not a policy anyone can imitate now
Powell Should Have Stopped When Spreads Stabilized in 2020
The host raised the positive commentary on Jerome Powell's tenure — sticking the landing, steering between the two halves of the dual mandate — and asked what he could have done differently.
"I think he should have done less."
He asked the audience to imagine Kevin Warsh in the chair in March of 2020 instead. The Fed should have stopped quantitative easing once the bond market got back to normal and spreads stabilized
He named the reason it did not stop: "It was only the progressive hubris of people like Jerome Powell" that kept the extraordinary stimulus running and the trillions of dollars of securities purchases going
The consequences he traced are all in housing. Mortgage rates fell to two percent and in some cases one and a half; there was a boom in housing and a flight out of the cities by people who thought COVID might be permanent and wanted somewhere in the countryside to hide out
Those factors combined and drove up home prices unnecessarily
His broader charge is about the limits of the institution: the Fed's powers are not unlimited and its officials are not clairvoyant — they do not know what happens next year or the year after, however much time they spend predicting it
"I think Powell is going to be remembered as one of the weaker and less effective Fed chairman in the history of the institution" — because once spreads stabilized at the end of 2020, there was no reason to continue extraordinary policy
The Boomer Sell-Off Changes Who Owns the Assets, Not How Much Is Invested
A viewer named Steve, a Gen X firefighter retiring in two years, wrote that boomers appear to hold half the market in corporate equities and mutual funds and asked whether their move to calmer waters would drag the indexes down beyond normal market forces — what he called a mini black swan for his generation.
"My sense is no." Mr. Whalen said people always predict this, and he does not expect a sharp change in the amount of investment in the country
What changes is composition and ownership, not the total. A good half of what is being discussed sits in 401(k)s and similar plans, which in turn feed passive strategies
Nobody liquidates on their retirement date. Asked whether these people turn around and sell tomorrow because they are retiring, his answer was no, probably not — the outcome is not nearly as binary as the question assumes
He allowed one place where weakness would show: the assets of insurance companies, purely because of the demographics
The test he applied is that it is not visible yet. Retirements are running at what he called peak retirement rate now, and looking at the markets you would have to say the effect is not evident at this time
On a separate question from another Steve, about equal-weighted S&P funds at current valuations, he declined to answer. He said he would need to know which fund, that he does not follow the big aggregate funds much, and that he tends to pick specific stocks
Nvidia Financing Its Customers Is Circular, and AI Is Draining Everything Else
A viewer using the name Northstar PNW asked why it is desirable for countries to hold one another's debt but also desirable for Nvidia to invest in or lend to its own customers, since both look like circular financing. The host flagged that the question might contain a typo.
On sovereign holdings he saw a straightforward rationale: if you trade with your neighbors, holding some reserves in their currency makes sense — for clearing, for a variety of purposes, and as a show of mutual support
On Nvidia he agreed with the questioner. The problem is that the customers need to spend in order to buy the chips that keep the stock appreciating, and Nvidia is helping fund that spending
"The amount of money that AI is draining out of the market today is mind-boggling."
"Crypto is wilting because everybody's out there chasing AI stocks." The shiny object, as he put it
He said plainly that he worries about Nvidia, a stock he has been in and out of over the years, and that financing your own customers is a circular situation
It is not confined to one company. Equipment and services suppliers across the AI space and the data centers are doing versions of the same thing, and "they're all involved in this big knot of financing transactions" — hard to separate and hard to work out who is who
He told the viewer the Nvidia question was quite a good one
Annaly Is a Levered Bond Portfolio Wrapped Around an Operating Business
A viewer named Felix said he had heard about Annaly since the late 1990s without understanding it, and asked whether a 12% APY with principal intact would double a position in six years. Mr. Whalen said no — the accretion is not that fast at all — and then took the company apart.
"what Annaly does is they buy mortgage-backed securities and they lever them up 10 to 1" — that leverage is where the yield on both the stock and the preferred comes from
There is no credit risk in the portfolio because the assets are government-insured. What the company manages instead is market risk, the shape of the yield curve, and spreads between short-term and long-term rates
The servicing book is the hedge. Annaly owns servicing, which he described as a negative duration asset with cash flow, matching up against the positive duration of the securities
It is also a lender. The company securitizes loans and sells them into the market, and runs what he called a very significant operation — so a reader should not think of it as a portfolio of mortgage-backed securities and nothing else
"I think they're the best-managed residential mortgage company in the industry, along with Rocket and a couple of the others."
The comparables he named are Rithm and Two Harbors, the latter of which he noted has just been acquired — a small set of REITs that have tried to build operating businesses inside the REIT structure
His general point about REITs is that they are about income. A REIT like PennyMac is mostly about owning assets and passing 90-plus percent of the income to the investor; Annaly is different because it also operates a servicer, a lender and a securitization business
He told the questioner to page through Annaly's earnings presentation for the quarter, which he called a very impressive document
He Owns the Common, Not the Preferred
A viewer using the name Mr. Sterling 5306 asked whether he holds the regular Annaly shares or the preferred.
He owns the regular shares. The preferred is senior to the equity, but he said he is very comfortable holding the equity for the reasons he had just laid out
The company's only real exposures are operations risk and market risk, because the securities it buys are mostly guaranteed by the US government — it invests almost exclusively in Fannie Mae and Freddie Mac paper
The aside that closed the answer: "If y'all hear any hammering, it's because I have construction at my house."
Metals Are a Hedge on the Dollar, and Silver Is a Different Trade Entirely
A viewer named Robert asked whether a 60/40 portfolio is still viable for an older investor over the next five to ten years, or whether broader diversification into metals, commodities, equities and international investments has become necessary. Mr. Whalen answered by disclosing his own allocation.
"I'm about 65% equities, I'm 15% precious metals, and the rest is boring stuff that I would characterize as income."
Given the Fed, the Treasury and the deficit, he said it behooves an investor to have some exposure to precious metals just as a hedge — and that owning the physical metal is not a requirement
His example was a silver stock, Aya, which he had bought recently. It came to him from one of his readers, a man up in Canada, and had been in a group the publication maintained for a while
He was blunt that it is a tiny stock, and that all of these are tiny stocks
Silver is a commercial story, gold is a monetary one. He said the commercial demand for silver is the reason to own some, and that the investment thesis is different from gold's — gold is a monetary asset and a way of hedging dollars
The indicator he watches for gold came from his interview with David Kotok: "You watch the credit default swaps for the United States. Priced in euro." Not in dollars, in euros — which gives a directional signal
He also pointed back to his conversation with Keith Weiner on the same argument for holding metals as a hedge, if nothing else
A Credit Union That Sticks to Its Knitting Is Fine; One That Wanders Is Not
A viewer named James asked whether credit unions are safer than banks. The answer was that it depends entirely on the credit union.
The structural point is about resources. Credit unions tend to have less income than banks, and as a result they do not have the same systems, controls and people, or the same profitability
The warning sign is scope creep: a credit union getting involved in activities beyond mortgages and taking deposits is a little bit of a red flag
A conventional one is safe. A typical credit union that sticks to its knitting and serves its customer base is fine, federally insured, and worth feeling confident in
He recalled being asked about exactly this in the Senate. Testifying before the Senate Banking Committee years ago, Chuck Schumer asked him whether credit unions should be given expanded powers to make commercial loans, telling a story about a big oil company in New York that could not get funding
His answer then was definitely not, because credit unions do not have the capacity to manage that kind of risk
His advice to the viewer: "take a hard look at that credit union, make sure that they're sticking to their basic mission" and that it is not wandering into commercial activities it lacks the resources to manage
Private Credit Has Taken Over Insurers, and Annuity Holders Should Ask Who Wrote Theirs
The viewer Ben returned with a second question: what steps annuity owners should take to protect themselves against insolvency, and whether a run on insurers through annuity surrenders is a distinct possibility. Mr. Whalen's short answer was yes.
The publication ran a piece a couple of weeks ago by Tom Gober, a former regulator he called a good friend, who has been working on this for many years
"a lot of private credit companies have taken control of insurance companies and are using them as a piggy bank for their investment strategies" — which he called a sad fact
The offshore reinsurance layer is the specific worry, sitting behind the annuities American retirees are going to depend on
What he told owners to do is ask questions: be very focused on who wrote your annuity and where it is
The live case is 777 Partners. The publication ran a blog post that week on the fund's bankruptcy; its insurance company went sideways and took down several other insurance companies with it
They are still not done, he said, having just filed bankruptcy in Texas in a process that will go on for years
He pointed readers to the post in The Institutional Risk Analyst as a case in point, and said it is something he expects to hear more about
Land Carries the Value, and a VAT May Be How the Deficit Gets Paid
A viewer named Jimmy asked what he thinks of a Henry George style land value tax, given his past comments on taxing wealth.
The starting point was the arithmetic. With $40 trillion of debt you have to raise some revenue, and whether it comes from wealth or income you have to be sensitive to how it hits the economy
"we have a bunch of ne'er-do-wells in Washington who don't want to talk about anything serious except getting reelected"
On the land tax itself he agreed with the premise: "the value of real estate is almost always predominantly in the land." Improvements are not a significant part of the valuation, and land goes up in value pretty steadily
That, he said, is why insurance companies love holding real estate — a nice low beta asset they can hold for many years
He noted his own position before conceding the point: he does not like taxes and he worked for Jack Kemp, so it pains him to point out the obvious, but a country like this one does have to pay its bills
Florida is running the experiment now. From his home in the state, he said they are getting ready to roll back property taxes rather significantly and increase sales taxes instead
"what we may end up with in the United States is a VAT that's used to pay down the federal budget deficit"
Florida After New York: Sales Taxes, Snowbirds and Mario's Deli
The last viewer question, from a Steve looking at relocating from Seattle to the Tampa area, asked for an honest review of life in Florida relative to New York.
The pros, in his telling, are a simple life and very nice people. Summer is hot but also very nice, because "all the snowbirds are back up in New York enjoying their progressive lifestyle"
He said it has been a great move, that he lives a little further south than Tampa, and that he feels very blessed to have been able to get into the situation
The practical test he applied was proximity: everything he needs is 5 or 10 minutes from the house
Finding Mario's Deli up in Fort Myers was the moment everything was taken care of, because it stocks the specialty items a good Italian-American boy needs to have happiness
The one thing he told the questioner to realize is fiscal: Florida is a very conservative state and pays for everything with sales taxes
Signing Off for Labor Day, and the Book That Replaced the Blog
The host closed with housekeeping: she and Mr. Whalen are taking the Labor Day weekend off, so the show will be dark, and she addressed a rumor directly — the show is not going anywhere
He explained why the writing has stopped: "we stopped doing the blog cuz I have to write this book", adding that if he does not he is going to be in big trouble
The host said the audience will be first in line to buy and support the book when it launches
He held up what he has been reading — Money and Its Use in Medieval Europe — calling it a really cool book that is not easy to read and goes on for quite a while, but one that shows how important both gold and silver were in the old world
The first chapter of his own book takes gold as the sole measure, a formulation he traces to Deuteronomy
Mr. Whalen's bottom line is that a government carrying this much debt eventually reaches for whatever is closest to hand — the citizen's gold, the annuity holder's insurer, a national sales tax — and that the defenses available to an individual are metal held outside the country, a hedge rather than a bet, and knowing exactly who is standing behind the paper they own.
Products, Companies & Tools Mentioned
Annaly (The episode's longest answer: a mortgage REIT that levers government-guaranteed securities 10 to 1 and wraps a servicer, a lender and a securitization business around the portfolio. He owns the common, not the preferred)
Nvidia (He worries about it and has been in and out of the stock; financing its own customers is, in his words, a circular situation)
Rocket (Named alongside Annaly as one of the best-managed residential mortgage companies in the industry)
Rithm and Two Harbors (The comparable REITs that have built operating businesses inside the REIT structure; Two Harbors, he noted, has just been acquired)
PennyMac (His example of the ordinary REIT model — mostly owning assets and passing 90-plus percent of income to the investor)
Fannie Mae and Freddie Mac (Almost the whole of what Annaly buys, which is why he says the portfolio carries no credit risk)
Aya (A tiny silver stock he bought recently, brought to him by a reader in Canada; his example of owning metals without owning metal)
777 Partners (The fund whose bankruptcy, filed in Texas, took down several insurance companies with it — his case in point on private credit inside insurers)
Mario's Deli, Fort Myers (The specialty grocer he says settled the question of whether Florida would work out)
Books & Resources Mentioned
Money and Its Use in Medieval Europe (What he is reading for the gold book; hard going and long, but it shows how much both metals mattered in the old world)
Whalen's forthcoming book on gold (Its first chapter takes gold as the sole measure, which he traces to Deuteronomy; writing it is why the blog has stopped)
The Institutional Risk Analyst (His publication; the Tom Gober piece on insurers and the 777 Partners post both ran there)
Tom Gober's piece on insurance companies (By a former regulator he calls a good friend, on private credit taking control of insurers)
Annaly's quarterly earnings presentation (He told the questioner to page through it; he calls it a very impressive document)
His list of roughly 48 gold and silver stocks and ETFs (Kept on the publication's website; how he says he owns metals himself)
His interview with David Kotok (Where the credit-default-swap indicator, priced in euros, comes from)
His interview with Keith Weiner (On holding metals as a hedge)
Jim Rickards' recent appearance on the show (Cited on the pressure a rising gold price puts on the Treasury)
Apple Podcasts (The episode on Apple)
Episode page (The show's own page for this episode)
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