The impending financial collapse, driven by political division, unsustainable debt, and wealth inequality, highlights the importance of investing in gold and precious metals as a safeguard against economic instability.
Economic Instability
The US is running a $690 billion deficit in the first two years of its fiscal year, likely to exceed $1 trillion by December, with trillion-dollar deficits becoming the new normal due to fiscal and monetary policies being inextricably linked as the world reserve currency.
Interest on US debt now exceeds the US military budget, signaling a dying empire, with the interest burden expected to grow exponentially.
Market Bubble and Investment Risks
The S&P 500 market cap is at all-time highs of over 200% of GDP, representing a grossly inflated bubble that will inevitably collapse when the Fed can no longer sustain the fiction.
The US Treasury 10-year bond has given a negative return over the last 5 years adjusted for inflation, becoming a return-free risk despite being the world’s most important government bond.
Wealth Inequality
The ratio of management to median employee salary at companies like Amazon under Jeff Bezos is $1.2 million to 1, reflecting feudalistic wealth inequality directly related to Central Bank policy.
Inflation and Gold
Inflation primarily stems from debt, not supply shocks or government efficiency, with Central Banks expanding the money supply by adding zeros to the balance sheet.
Gold is as cheap today as it was in the 1970s when measured against the broad money supply (M2), despite being up 226% since 1980 compared to median house prices up 500% and M3 money supply up 13,100%.
Central banks are stacking gold since 2014, preferring it over the US Treasury 10-year bond, as they’ve lost trust in the US Treasury due to its quantifiably broke status.