The Federal Reserve’s 1% decrease in short-term rates and 1% increase in 10-year Treasury yields signals bond vigilantes’ concerns about potential inflation and the Fed’s monetary expansion.
The US government’s record national debt of $28T, increasing deficit, and rising interest burden due to debt maturing at 4.6% vs. 0% previously, may exacerbate inflation and deficit issues.
China’s 80% increase in gold reserves over the past 2 years, with 80% of the increase from purchases, reflects a shift away from dollar exposure.
The deficit in silver production, with consumption exceeding supply, is being addressed through recycling and disinvestment, driving prices higher as the deficit grows.
Gold price could reach $3,000 in 2024, over 10% above current $2,640, attracting investors seeking alternatives to the stock market.
Experts recommend investing 20% of savings in gold and silver for diversification, especially for 18-20 year olds with surplus funds.
The stock market may experience a 35-55% correction from all-time highs in 2025, similar to the 2008-2009 crash, triggered by herd mentality and panic selling.
Technical analysis suggests the market is in a stage 3 top, with big tech pushing indexes high while most stocks underperform, indicating a likely swift correction in the next month or two.
Gold and silver are expected to serve as safe havens during uncertainty, potentially moving up 10-14% in the next month as stocks struggle.
Physical gold is considered the ultimate currency in a crisis, as it can be broken into small pieces, making it more useful than digital assets if internet infrastructure fails.
The dividend stock divergence is alarming, with the S&P 500 down only 2% from highs but dividend stocks down 10%, suggesting fund managers are unloading positions.
The stock of money has contracted by 2% over the last 1.5-2 years, with current year-over-year growth of 3% below the 6% needed for 2% inflation, signaling economic slowdown.
The US has experienced only four significant contractions in money supply since 1913, each followed by a recession, including the Great Depression caused by a 39% plunge from 1929-1933.
Tariffs are detrimental, interfering with free trade and open markets, driving up costs of manufacturing inputs and hindering US ability to export goods.
Trump’s mercantilist policies viewing trade as a zero-sum game will harm the US economy, contrasting with the reality of trade as a positive sum game.
Germany’s economy is struggling due to no nuclear power, no Russian gas, astronomical electric prices, and rapid industry destruction, with incompetent elites in power.
The EU’s structure of 27 sovereign nations plus central bodies creates miles of red tape and corruption, with high VAT tax slowing economic growth.
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