Central banks are trading fraudulently with negative equity, risking collapse despite their ability to print currency.
The US economy is contracting by 2% nominally and 5% in real terms, with a 65% budget deficit and 4.5% GDP growth.
Foreign investors have already divested from US treasuries and are liquidating US equity holdings, potentially triggering a massive sell-off.
The dollar’s purchasing power has been declining over long periods, with the global economy contracting due to the credit bubble and new US tariff policies.
Gold is leading the rise in commodities, discounting future currency collapse and indicating the direction of future market trends.
BRICS countries are accumulating gold reserves to protect against dollar instability but remain cautious about openly challenging the US.
Banks are centralizing lending decisions and investing in non-productive economies, increasing recession risks and harming small businesses.
Higher interest rates are inevitable and will refinance zombie debt, driving the economy into recession, especially when combined with trade tariffs.
In a credit crisis, banks will call in loans and foreclose on unresponsive borrowers, creating problems for individuals with mortgages and other debt.
The timing of economic collapse could be closer than expected, with parallels drawn to the 1929-1930 Great Depression.
Central banks will likely prioritize protecting the banking system over maintaining currency purchasing power, potentially leading to currency destruction.
The European economy faces potential collapse due to the Ukraine war, with the auto sector expected to be hit hardest, particularly BMW SUVs made in America facing tariffs in Germany.
Despite a false rally in Europe’s money supply (M1 up 2.7%, M3 up 3.6% year-over-year), the German economy is predicted to slow down by mid-year.
The Russia-China alliance is unlikely to be broken by Trump’s efforts, as their long-standing relationship outweighs the US’s four-year relationship approach.
Gulf countries may be planning to stand against colonial powers in the Middle East, potentially leading to civil wars in countries with large Palestinian communities.
The Bank of England has been shorting gold, taking 4-8 weeks to deliver, risking a potential default that could collapse the global financial system.
China reportedly holds 25,000 tons of gold, with citizens and institutions owning an additional 25,000 tons, potentially enabling them to break the Hong Kong dollar peg to the US dollar.
The US Treasury Reserve may be buying gold to double its holdings to 16,000 tons, potentially backing a domestic-use-only currency while allowing the international dollar to find its own level.
The Bank of England might need a war with Russia as an excuse to default on its debt, which could lead to a collapse of the global financial system.
Trump’s recession plan involves cutting spending, red tape, taxes, and continuing mass deportations and tariffs, contrasting with Washington’s typical $2+ trillion spending approach.
Historical precedent from the 1920 recession suggests that doing nothing led to a brief period of pain followed by the “golden decade” of the Roaring 20s.
Economist Murray Rothbard’s analogy compares recessions to locust cycles, arguing against artificial stimulation or paying for inactivity during downtimes.
Trump’s economic policies, including tax cuts and deregulation, aim to grow the economy and repatriate companies.
Maintaining current policies during a recession could potentially lead to a “golden decade” afterward, according to Peter St Onge.
21 billion worth of gold left the COMEX in just one week, signaling massive distrust in the US dollar and a shift towards physical gold as a strategic reserve asset.
45 countries are now transacting trades outside the US dollar, 30 countries are repatriating gold, and central banks have tripled gold purchases since the US weaponized the dollar in 2022.
The US could potentially gain $800 billion to $1 trillion in liquidity by revaluing gold, but this would be a desperate measure against much larger economic issues.
Rising geopolitical tensions, particularly with China and Russia, and the potential for a global economic reset are driving increased demand for gold as a safe-haven asset.
US debt levels at 140% of tax receipts, with entitlement costs, military spending, and interest on debt far exceeding revenue, make gold revaluation an ineffective solution.
Fort Knox gold reserves are likely much lower than reported, while China and Russia potentially hold more, meaning a US gold revaluation could backfire.
Silver, up 48% year-over-year, remains one of the most undervalued assets with potential for massive gains, especially if the gold-silver ratio returns to historical levels.
Mining stocks offer speculative opportunities but require careful selection of companies with strong fundamentals due to the sector’s history of poor management.
Patience is crucial for investors, waiting for mean reversion in overvalued markets and deflationary moments in US equity markets for attractive entry points.
Assessing geopolitical events and their impact on markets, currencies, and gold prices is important for informed investment decisions.
Jeffrey Sachs argues that the US bullied Ukraine out of a neutrality deal with Russia in 2022, leading to a tragic war by acting like a unipolar power.
Sachs suggests the US has started wars in the last 40 years primarily for financial reasons, not for spreading democracy, in countries like Sudan, Syria, Libya, and Iraq.
The economic costs of the Ukraine war are reportedly worse for the West, especially Germany, than for Putin, with ripple effects causing significant challenges for Western economies.
Passive investing and buybacks have warped stock valuations, creating a fragile market structure prone to massive corrections due to reduced float and parabolic price impacts.
The next market downturn could be catastrophic as passive selling will occur indiscriminately, with few active managers left to stabilize prices after a decade of underperformance.
Corporate audits have failed to detect fraud and mismanagement, necessitating the role of activist short sellers as vigilantes exposing financial misconduct.
Stock buybacks serve as a legal form of price manipulation, allowing executives to artificially inflate valuations and exploit the “buy low, sell high” strategy.
The prevalence of non-GAAP metrics and adjusted earnings has fostered a culture of aggressive financial engineering, misleading narratives, and manipulated valuations.
Auditors primarily ensure correct accounting standards rather than actively searching for fraud, often encouraging aggressive practices in a “gray zone” environment.
In the current speculative liquidity-driven market, investors should remain invested in S&P 500 index funds until a major dislocation occurs, focusing on momentum investing.
Key warning signs of an impending market downturn include stressed businesses, tight funding, and excessive leverage in the system.
Vietnam and mining funds offer unique opportunities for qualified investors, with Vietnam poised to benefit from geopolitical shifts away from China.
Short selling serves as a countercultural movement in finance, exposing frauds and manipulations despite being derided by retail investors.
The S&P 500 index effectively functions as an actively managed fund, replacing weaker companies with stronger ones in a momentum-driven strategy.
Successful short selling requires professional expertise, but retail investors can still find opportunities on the long side of the market.
Heavier enforcement against corporate misconduct is needed to combat manipulation and misrepresentation in the markets, beyond current checklist-based approaches.
Tariffs, as taxes on imported goods, raise prices for 330 million US consumers while benefiting only a few domestic producers, creating a mathematically certain net loss for the economy.
The implementation of tariffs leads to deadweight losses and inefficiencies, as the gain to domestic producers is significantly less than the overall loss to consumers paying higher prices on everything.
While tariffs may protect weak domestic industries in the short term, they ultimately make them weaker by shielding them from international competition, resulting in reduced innovation and lower productivity.
The Smoot-Hawley Tariff Act of 1930, passed during the Great Depression, triggered an international trade war that led to retaliatory measures and a complete collapse of global trade.
Low tariff periods in the 19th century, such as the two-decade decline before the Civil War, coincided with major technological innovations like the steam engine, while high tariffs did not spur growth in import-competing industries.
Constitutionally, the power to levy tariffs belongs to Congress, but much of it has been delegated to the president, leading to a blatant violation of the separation of powers principle.
Tariffs consolidate executive power by allowing the president to unilaterally impose them, increasing presidential authority at the expense of Congress, which has become supine in areas like war, trade, treaties, and budget.
Tariffs are a poor foreign policy tool that can potentially make war more likely by escalating conflicts with nations, while economic sanctions, another form of tariffs, have also proven ineffective.
The implementation of tariffs creates a race to the bottom as trading partners retaliate, with the export industry suffering the most due to their inability to pass through tariff costs.
Tariffs disrupt supply chains and trade, causing economic chaos, stock market downturns, and inefficiencies throughout the global economy.
Industries often lobby for protectionist measures in Washington, justifying tariffs as national security measures to protect sectors like microchips and rare earth metals, which can actually drive up prices and create corruption opportunities.
Tariffs are a contradictory tool for protection, as they reduce imports but also decrease tariff revenue by limiting the goods subject to tariffs, creating a complex economic balancing act.
The US government’s $750 billion gold reserve at Fort Knox is insufficient to address the $34 trillion national debt, highlighting the scale of fiscal challenges.
The 1933 gold confiscation and revaluation from $20 to $35 per ounce represented a partial default on the government’s promise to redeem dollars for gold.
Abandoning the gold standard in 1971 removed a key mechanism for maintaining a stable store of value and medium of exchange in the US economy.
The gold reserve serves as a “war chest” for potential existential threats or highly destructive wars, providing a salable good in extreme circumstances.
Maintaining a gold reserve symbolizes state power and independence, offering a backup plan in case of economic collapse or loss of confidence in the dollar.
The ability to “inflate away debt” through currency manipulation is a key factor in the government’s reluctance to return to a gold standard.
Privatizing the gold reserve by defining the dollar as a fraction of gold (e.g., 1/1,000,000th ounce) could limit government’s ability to print money and inflate debt.
Reintroducing dollar-gold redeemability could lead to a hyperinflationary situation as people abandon paper currency for physical gold.
Balanced budgets could potentially stabilize the money supply, but are challenging due to high government spending and unpopular taxation.
The lack of a recent audit of Fort Knox’s gold reserves has fueled controversy about the existence and amount of gold actually held.
Some critics view the gold reserve as a “slush fund for elites” to be used for weapons and mercenaries in case of civil unrest or regime collapse.
The precious metals sector is outperforming broader markets, with GDX up 25% while the S&P is down 10%, attracting generalist investors due to strong Q4 earnings and wide margins.
Gold and silver miners are positioned as safe-haven assets, likely to continue rising even during broader market sell-offs or corrections.
Significant M&A activity is expected in the sector, with large miners potentially offering 50% premiums for high-quality explorers.
The chaotic geopolitical environment, including tariffs, trade wars, and currency spreads, is driving a global bid for gold and silver.
A potential reset of the global monetary system within the next 5 years could significantly increase the value of gold and precious metals.
The sector is benefiting from concerns over US government spending and monetary policies, positioning precious metals as a hedge against inflation and currency devaluation.
Bitcoin’s 16-year track record of meaningful decentralization, resistance to control, and credible, unchanging monetary policy sets it apart from other cryptocurrencies.
Bitcoin’s proof-of-work model connects to blue-collar jobs and energy production, while other cryptocurrencies lack this connection and are more suspect in their governance.
Bitcoin’s credibly neutral monetary policy contrasts with other cryptocurrencies, which may have centralized control over inflation schedules and network operators.
The Trump Administration’s persuasion technique contrasts Bitcoin with other assets to move the needle, while maintaining support for the Bitcoin community vital to his election.
El Salvador’s President Bukele defies IMF demands to stop buying Bitcoin, asserting the nation’s need to stockpile Bitcoin for future economic success, despite taking a $1.4B loan.
The IMF’s opposition to El Salvador’s Bitcoin purchases and mining may stem from a desire to limit Bitcoin’s spread and reduce their control over the financial system.
Categorical differences exist between Bitcoin and other cryptocurrencies like “Fartcoin,” which lacks its own blockchain and has a different backend, giving Bitcoin unique properties and value.
Bitcoin’s energy-backed mining in countries like Belarus contrasts with other cryptocurrencies, as Bitcoin mining utilizes excess energy resources, while other networks have no known relationship to the energy market.
Bitcoin’s network properties, including the ability to change monetary policy and the separation of powers, create meaningful differences compared to other cryptocurrencies like Ethereum and Solana.
Bitcoin’s decoupling from global equity markets, as seen in a recent week where Bitcoin continued to perform while equities tanked, indicates its potential as a unique asset class.
Tether’s significant holdings in US Treasury bills suggest a powerful relationship with the US administration, potentially influencing El Salvador’s Bitcoin strategy and future developments.
Bitcoin is seen as a “choke on the bone” for the government, with the potential to “swallow them whole” if not carefully managed, according to the speaker’s analogy.
Bitcoin’s survival is not dependent on government intervention, unlike some other cryptocurrencies, which may require predatory marketing and experimental technologies to succeed.
El Salvador’s Bitcoin policies are under IMF attack, with the IMF prohibiting the country from using Bitcoin to increase its strategic reserves, despite the government’s agreement to these conditions.
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