Written by Bryan Lutz, Editor at Dollarcollapse.com:
Every Sunday morning I sit down to write a few thoughts.
Sometimes these thoughts end up being about life, other times they are on gold, geopolitical issues affecting the markets, or the economy.
Here are three thoughts for this morning:
1. Wealth inequality has grown because of fiat money. The Cantillon Effect shows that newly created money increasingly flowed to financialized products instead of the average American. This is one reason why nations fail.
This chart, shared via @SpencerHakimian on X, shows the difference between productivity and hourly wage growth.
Before 1973, the system constrained how fast money and credit could expand, since persistent deficits meant gold would flow out of U.S. reserves.
Inflation was relatively modest, and both productivity (+96.7%) and hourly compensation (+91.3%) grew almost in lockstep. Workers’ purchasing power rose nearly in proportion to output.
Under the gold standard, the monetary system limited the Cantillon effect because money creation was slower and more tightly linked to the real economy.
After 1971, things were different.
Nixon closed the gold window, ending dollar convertibility into gold. This inaugurated a pure fiat currency regime, where money creation depended on credit expansion, central bank policy, and government borrowing.
Credit and liquidity grew far faster than real output…
Asset markets, financial institutions, and government contractors—those “closest to the spigot”—benefited first.
So, productivity appeared to keep rising, but only in the form of financialized products.
Meanwhile, asset prices rose faster than wage purchasing power.
Do you see how wealth inequality works?
In the fiat world, it’s much easier to drive growth in the form of financial products and the appearance of wealth through asset bubbles.
Eventually, the inequality gap grows so big that it can’t be fixed. Then nations fail.
2. Eat the Rich is a “fool around, find out” situation. France is about to fool around.
Governments do this over and over again.
When wealth inequality reaches insurmountable heights, and governments begin to see their debt as too much to ever pay off, they tax the rich.
That is what’s about to happen in France.
Politicians want to chop 2% off the top of regular income for the 1800+ millionaires living in France.
Two things happen as a result.
First, millionaires leave.
(Hundreds already left France last year.)
Or two, the rich start fighting for their survival against the working class.
Here’s how Ray Dalio breaks it down:
But first, to keep the rich where they are, you can bet capital controls are coming.
3. “If you like money… You’re going to love silver.” Silver hit $45+ this week. It’s incredible that the MSM are still ignoring silver.
Silver is just starting to breakout from it multi-decade cup and handle formation.
Some commentators like John Oliver are saying silver could reach $100 by the end of Q1 2026.
And that actually seems reasonable.
Check out Dolly Varden Silver, Hecla, and BlackRock Silver.
