BY BILL GRIFFO
November 19, 2025
Every now and then, someone rings a bell at the top of the market.
In 2000, it was Julian Robertson walking away from Tiger.
In 2007, subprime spreads blew wide open.
And in 2025? It may just be Michael Burry shutting down Scion Asset Management.
The headlines focused on “Burry gives up vs. AI-fueled bubble” — but that’s not the lesson.
This isn’t a market where valuation matters.
This is a market where policy determines price — and where the release valve is increasingly gold and currency debasement, not stocks.
Let’s break down what Burry’s goodbye letter really means for long-term investors.
The chart that tells the whole truth:
- S&P 500 in USD: +152% since Powell’s 2018 pivot
- S&P 500 in Gold: –27% over the same period
Think about that…
For seven years, stocks “soared” — but only if you price them in a currency that’s being intentionally weakened through:
- Powell’s 2018 pivot
- Not-QE (2019)
- QE (2020)
- Yellen’s TGA drain (2022)
- BTFP (2023)
- Treasury issuance shift to the front-end (2023–25)
- Record buybacks funded by ultra-cheap front-end financing
- Bessent doubling UST buyback run-rates (2025)
This market isn’t going up — the dollar is going down.
Here’s the circular loop powering the bubble:
1. The Treasury has shifted so much issuance to T-Bills that the U.S. now rolls $550 billion per week.
2. This requires a permanently swollen TGA, which pushes up repo rates.
3. Higher repo threatens the $1.8 trillion hedge fund UST basis trade (Cayman funds are now the biggest “foreign” holders of Treasuries).
4. To prevent a meltdown, the Fed’s Standing Repo Facility injects liquidity to press repo back down.
5. Repo liquidity keeps leverage alive → leverage keeps long-end yields suppressed → suppressed yields support equity valuations → which gives cover for more Treasury issuance → expands the TGA → which pushes repo back up…
And on and on.
This is not a market.
It’s a self-referential liquidity machine.
When a system becomes circular and self-reinforcing, the pressure must escape somewhere.
Right now, that escape valve is: Gold
This is why:
- S&P 500 priced in dollars = “all-time high.”
- S&P 500 priced in gold = 7-year bear market.
The insiders know this.
The foreigners know this.
The hedge funds know this.
Retail? Most do not.
And that is where the long-term opportunity lies.
Yellen and Bessent cannot stop the front-end juggernaut now.
They must roll short-term debt to avoid blowing out long-term yields.
But here’s the kicker…
If gold rises sharply enough, Bessent can revalue official U.S. gold reserves
…and use the windfall to:
- Refill the TGA with a massive deposit
- Repurchase a meaningful share of long-term Treasuries
- Break the U.S. out of fiscal dominance for the first time since 2018
- Reduce the Fed’s need to perpetually intervene in markets
This would be the reset moment.
We’re not there yet.
But gold is the breadcrumb trail leading to that outcome.
Live and Trade With Passion My Friends,
Bill Griffo
Bill Griffo
Head Income Trader
See what's hot at option pit
CAPITOL GAINS: SMR Aug16 7 call closed for a 150% gain
DELTA STRIKE: VLY Mar15 8 puts closed for a 88% gain
PFE May17 26 calls closed for a 66% win
OP MENTORING: SPY Mar22/19 510 put calendars and 520 calls for 6.4% gain
OPTION SHOPPER: ERX Mar28 65 calls closed for a 90% gain