Prof G Markets — "Gold Hits $5K — What’s the Market Afraid Of?"

Date: January 27, 2026
Hosts: Ed Elson (Prof G Markets), Robert Armstrong (Guest, Financial Times), Reid Albigotti (Guest, Semaphore)

Episode Overview

This episode dives deep into the record-breaking rise of gold past $5,000 per ounce, exploring what’s driving investor anxiety and how politics, fiscal fears, and geopolitical tensions are moving capital markets. Co-host Ed Elson is joined by Robert Armstrong (Financial Times, Unhedged) to break down the market psyche, Donald Trump’s latest trade posturing (“taco” moment), and the surprising lack of faith in traditional market reactions. Later, tech editor Reid Albigotti helps parse the newly approved deal for TikTok’s U.S. ownership.

Tone: Smart, skeptical, irreverent, and at times self-deprecating, the hosts blend financial insight with candid doubt and a refusal to accept market narratives at face value.

Key Discussion Points & Insights

1. Markets and Trump’s Latest Trade Drama ("Greenland Taco")

[03:49 – 08:12]

• No Mercy for “Taco” Moves
  • Trump’s threats to impose 100% tariffs on Canada over a new China trade deal follow recent European “taco” drama (Trump’s term for sudden, headline-grabbing trade threats).
  • Armstrong observes that markets barely flinched at the saber-rattling—suggesting investors increasingly discount Trump’s shock moves as political theater rather than policy:

    “The market's reaction function to crazy Trump stuff does seem to be getting blunted over time.” (Robert Armstrong, 03:49)

  • The hosts agree that, as an investor, not all presidential statements deserve attention. Filtering between rage tweets and genuine policy is critical:

    “There should be some filter between what is a Truth Social post and what is a policy proposal. The line is very...blurry, but I think there probably is a line.” (Ed Elson, 08:12)

Notable Quote

• "If we cut off all trade with Canada, there would be howls of pain in the US economy...I would 100% bet on a taco in this case. It was just an expression of rage, I think. Not a policy proposal."
  — Robert Armstrong (05:20)

2. Gold at $5,000: Reasons, Reactions, and Skepticism

[08:12 – 13:02]

• Why is Gold Soaring?

  • Gold crosses $5,000/ounce, up more than 50% in six months. Armstrong admits he’s “been wrong as it is literally possible to be” on gold’s prospects, invoking three possible drivers:
    1. Debasement Trade: Fears of long-term dollar weakening or inflation.
    2. Political Instability: Gold as a perennial safe haven in turbulent times.
    3. Meme Stock Dynamics: Buying begets buying — a reflexive narrative with little bearing in fundamentals.
  • Armstrong is especially skeptical of the “debasement” theory since bond markets don’t reflect runaway inflation or currency collapse.

    "How could you have massive debasement that gold is picking up on, and the bond market just doesn’t see it at all? That strikes me as crazy." (Robert Armstrong, 10:55)

• Gold Replacing Bitcoin as “Doom Hedge”?

  • Elson notes that gold, not Bitcoin, is rallying in a world supposedly tailor-made for crypto.

    "It’s like gold has turned out to be everything that bitcoin wanted to be. And it’s remarkable how bitcoin has not performed...while the world appears to be going politically to shit.” (Ed Elson, 12:06)

  • Armstrong suggests crypto’s correlation to stocks is making it less attractive as a true hedge.

Notable Quotes

• "There are three theories...One, the debasement trade...Two, political instability. Three, it’s a meme stock now. All three can be true to different degrees."
  — Robert Armstrong (09:27)

• "The longer you’re wrong, the more you start to doubt yourself. So you’ve caught me at a moment of self-doubt..."
  — Robert Armstrong (10:55)

3. Fed Chair Speculation: The Rick Rieder Factor

[13:02 – 17:38]

• Potential New Fed Chair — Rick Rieder
  • After Trump courts BlackRock’s Rick Rieder (not Hassett or Walsh), Rieder’s odds soar on prediction markets. Rieder is seen as extremely sharp, deep market experience, but may not align with Trump’s preference for loyalty over independent expertise.

    "He’s an extremely clever man...arguably the most important bond trader in the world....Does that mean he has the temperament to be the chair of the Fed or that Trump will pick him? I have no idea." (Robert Armstrong, 14:12)

  • Rieder has controversially suggested
    • Current higher rates aren’t taming inflation much.
    • Perhaps the Fed could do more to help Treasury control interest costs.
  • Elson and Armstrong are skeptical Trump will pick someone with independent views:

    “It’s very interesting because it’s hard to see the right fit for the job as anyone but a toady and a sycophant.” (Ed Elson, 16:48)

Notable Quote

• "With a small number of exceptions, Trump has appointed for loyalty rather than competence...the main thing about getting appointed to something important in the Trump administration is saying yes as loud as you can."
  — Robert Armstrong (17:14)

4. TikTok’s Fate: Decoupling from China or Illusion of Safety?

[21:19 – 29:08]
(Guest: Reid Albigotti, Semaphore)

• Breakdown of the TikTok Deal:

  • TikTok’s U.S. business officially sold to non-Chinese investors; Oracle, Silver Lake, and Abu Dhabi’s MGX take major stakes. ByteDance ownership falls below 20%.
  • Technical control (especially algorithm oversight) is tasked to Oracle. Goal: eliminate or expose Chinese state meddling in curation.

    “They’re going to retrain the algo [for] US customers...Oracle will sort of administer this...to tell if there’s any [PRC] manipulation.” (Reid Albigotti, 22:23)

• Lingering Concerns and Perception Issues:

  • Critics argue that unless there’s a full technical and ownership break from China, some manipulation risk persists—if only in public perception.

    "Perception is reality, right? If people are worried about it, then...it may continue to be a big question mark.” (Reid Albigotti, 23:38)

• Meta and Market Fallout:

  • Meta’s stock jumps modestly post-deal—possibly on hopes the regulatory churn will benefit competitors.
  • Real value is not just the algorithm but TikTok’s institutional user data and knowledge, which is hard to replicate quickly.

Notable Quotes

• "If someone from MGX calls us up and says, ‘Can you make a little tweak to the algorithm?’ ...they don’t have the power to do that. But again...there’s just always going to be some suspicion around TikTok and, you know, the algorithm, so to speak."
  — Reid Albigotti (25:19)

• "The algorithm itself is not a secret anymore...What’s valuable now...is the fact that they have all this data on users. They know what people like already. That’s why Oracle can’t just come in and say, ‘We’ll just wipe this thing clean.’"
  — Reid Albigotti (27:57)

5. Ed Elson’s Closing Monologue: The Psychology of the Gold Rush

[29:19 – End]

• Elson recaps gold’s meteoric rise as a “safe haven” asset, tying it to widespread investor anxiety about fiscal deficit, geopolitics, and social unrest.

  • Argues that the reflex to buy gold isn’t fundamentally sound but more a collective story or myth investors tell themselves—echoing bubble dynamics.

    “When times get bad, there are plenty of things you could invest in besides gold, but the market doesn’t seem to be fully recognizing that. It seems that gold is rallying not because of its intrinsic value, but because of a story that investors are instinctively telling themselves.” (Ed Elson, 29:19)

• Elson challenges listeners:

  “What makes it [gold] such a safe haven? ...Saying it’s worth it because everyone else says it’s worth it isn’t an answer. You have to have your own answer...The most important question is also the simplest one. And that question is, why?”

Timestamps for Major Segments

• 01:18 — Market Update: Indices rise, gold and silver surge, political drama
• 03:49 — Discussion: Trump’s “taco” tariff tactics and market indifference
• 08:12 — Gold at $5K: Theories and skepticism about the rally
• 13:02 — Fed chair speculation: Rick Rieder’s odds and Trump’s loyalty test
• 21:19 — TikTok US: Deal terms, algorithm oversight, and persistent trust issues
• 29:19 — Closing monologue: Gold’s rally as story over substance

Memorable Moments & Quotes

• "If we cut off all trade with Canada, there would be howls of pain in the US economy...I would 100% bet on a taco in this case."
  — Robert Armstrong (05:20)

• "How could you have massive debasement that gold is picking up on, and the bond market just doesn’t see it at all? ...That strikes me as crazy."
  — Robert Armstrong (10:55)

• "It’s like gold has turned out to be everything that bitcoin wanted to be. And it’s remarkable how bitcoin has not performed..."
  — Ed Elson (12:06)

• "There are always going to be some suspicion[s] around TikTok and, you know, the algorithm..."
  — Reid Albigotti (25:19)

• "What makes [gold] such a safe haven? ...Saying it’s worth it because everyone else says it’s worth it isn’t an answer. You have to have your own answer."
  — Ed Elson (29:19)

Episode Takeaway

The capital markets are gripped by anxiety—over trade wars, erratic politics, and the specter of instability. But whether it’s gold, TikTok, or the next Fed chair, the hosts urge listeners to question market narratives, distinguish myth from signal, and above all: always ask "why?".