When a government stops producing its lowest-denomination coin, it's more than just a cost-cutting move - it’s history’s red flag to brace for rising inflation, warning citizens to shift wealth outside of their paper currencies. As you may have heard, the U.S. Mint decided to halt penny production, and their admission signals a deeper issue: the steady erosion in the purchasing power of the dollar. Meanwhile, gold is nearing $3,000 per ounce, Fort Knox’s reserves are under scrutiny, and global markets are shifting away from the dollar. Whether or not your advisors are highlighting the implications of this, you need to be clear on what this means for your financial future. The data is clear – Americans are not ready.

The End of the Penny: A Warning Sign for Inflation

The U.S. Mint’s recent decision to halt penny production highlights a critical reality: when governments phase out their least valuable currency, it signals inflation is accelerating beyond a government’s control. History is littered with bellowing government speeches telling citizens not to worry around times of currency transition. Such claims have fueled the understanding that when politicians start denying problems exist, the smart money has consistently taken the opposite view and avoided being led to government slaughter. Think back to our own nation’s most recent claims when America moved away from gold and silver-backed money . On August 15, 1971, Richard Nixon looked into the eyes of the American people on national television, justifying that he had just broken the constitutional protection US citizens enjoyed with gold-backed currency, and lied with his unforgettable entrapment:

"Let me lay to rest the bugaboo of what is called devaluation… your dollar will be worth just as much tomorrow as it is today. The effect of this action [removing the dollar’s gold backing], in other words, will be to stabilize the dollar."

Since Nixon’s lie, gold has appreciated relative to the dollar by more than 5,000% while the dollar has lost 90% of its purchasing power.

Since 1970, prices of goods and services have risen by over 713%, according to official Consumer Price Index (CPI) data. However, if we use the pre-1990s CPI formula, real inflation is likely much higher. This isn’t new - U.S. coinage has steadily lost its intrinsic value since the removal of silver from dimes and quarters in 1965, followed by Nixon’s decision to take the dollar off the gold standard in 1971.

Now, the elimination of the penny raises a critical question: will the nickel, dime, and quarter be next? As inflation continues to devalue fiat currency, the case for holding tangible assets like gold and silver strengthens. Historically, whenever a government devalues its currency, citizens and central banks alike turn to precious metals as a hedge against uncertainty.

Calls for Auditing Fort Knox: Is the U.S. Gold Still There?

Elon Musk has sparked discussions about the transparency of the U.S. gold reserves at Fort Knox. In a recent social media post, Musk suggested that his Department of Government Efficiency (DOGE) should audit the gold reserves, a proposal that has garnered support from figures like Senator Rand Paul. Musk posted on X (formerly Twitter), “Looking for the gold at Fort Knox… This gold is the property of the American people. I sure hope it’s still there!”

If doubts over the U.S. gold reserves persist, it could severely impact confidence in the dollar and U.S. financial stability.

Gold Prices Nearing $3,000: The Market is Voting Against the Dollar

Gold is on the verge of piercing the $3,000 per ounce barrier - a historic milestone that signals increasing market skepticism about the dollar. More than any other asset, gold reflects confidence (or lack thereof) in the dollar and the financial system more broadly.

What’s driving this surge? More investors and central banks worldwide are moving away from the U.S. dollar. Central banks, including those in China, Russia, and the BRICS+ nations, have been accumulating gold at record levels. They understand what’s coming: a shift in global financial power and a weakening dollar. Even Trump’s new Treasury Secretary has said that a major reordering of global finance appears close. Historically such transitions have not been friendly towards sole reserve currencies, a status the dollar has enjoyed during our lifetimes.

Historically, when the dollar weakens or confidence in government finances wanes, gold strengthens. The current rally isn’t speculation - it’s a clear validation the dollar is losing its purchasing power. 

Gold Supply Shortages: A Market Under Pressure

Beyond price increases, the physical gold market is also showing signs of stress. South Korea’s mint recently stopped selling gold bars as it struggles to obtain supply.

Meanwhile, lease rates for gold - a measure of how difficult it is to obtain physical bullion - are rising sharply. When lease rates rise, it often signals that physical gold is harder to obtain than what the market would prefer - another indication that investors and institutions are scrambling to secure real assets in an environment of monetary uncertainty. 150 tons of gold were drained from London's vaults in January 2025 alone, marking the heaviest gold drawdown since records began monitoring such flows. This is yet another indication that physical gold is more difficult to come by than in the past.

The Flight to Hard Assets is Accelerating

From the end of the penny to the potential audit of Fort Knox, from record gold prices to physical shortages, the signs are clear - the global economy is shifting. Investors and central banks are recognizing that fiat currency, particularly the U.S. dollar, is losing value. In response, these investors with inside government knowledge are turning to gold, an asset that has maintained its worth throughout history. Moreover, these bankers are openly targeting 15-20% allocations to physical gold, exactly in line with our research as to optimal weightings to maximize portfolio efficiency.  In contrast, retail American investors continue to maintain ~0% allocations to physical gold, oblivious to what the markets are demonstrating.

The case for owning physical gold has never been stronger. Those who understand history know that protecting wealth isn’t about timing the market - it’s about owning assets that withstand the test of time.

Reach out to our team today – call 610-326-2000 or email info@stjosephpartners.com to get started.

Precious metals are not insured and carry no guarantees.