The financial system is vulnerable due to its heavy reliance on machines, making it susceptible to collapse if a single point is compromised.
The basis trade, a trillion-dollar market at the foundation of the financial system, is critical because its failure could trigger a collapse of everything above it, similar to the 2008 financial crisis and 2019 repo apocalypse.
The current gold-to-silver ratio of 88-90:1 is far from the endgame territory of 15:1, with a potential rapid shift occurring over just 4 months when it begins.
COMEX is experiencing daily silver outflows of 1-4 million ounces from London, potentially depleting the 5,500 metric ton float within 5-7 months.
The present gold price of $34 per ounce is significantly below the 1980 limit of $90,000, which could be reached if the Fed halts printing and a banking crisis ensues.
The US government may be buying gold to potentially back a new dollar and reset debt, though their reasons for potentially buying silver remain unclear.
The basis trade is a complex system used to divide gold and silver among different markets, but its reliance on machines makes it vulnerable to manipulation.
Under monetary stress, real money tends to flow towards the reserve currency, creating a double-edged sword for the monetary system.
Stock market overvaluation risks are at precarious levels, with valuations similar to those before the dot-com bust, potentially triggering a recession if a significant sell-off occurs.
The twin deficits of the US – fiscal deficit and trade deficit in manufactured goods – have been neglected, creating uncertainty for countries benefiting from the current situation.
Asset price sell-offs pose the biggest recession risk, as they lead to reduced spending and confidence among wealthy consumers and business decision-makers, impacting hiring, investments, and wage increases.
A factory construction boom in the US, particularly in semiconductors, motor vehicles, electronics, and computers, is reviving manufacturing with positive secondary and tertiary effects on GDP growth.
Tariffs could strengthen the US economy by encouraging domestic production and sourcing, but may also disrupt supply chains and create uncertainty.
Consumer spending remains resilient, with high credit card spending and low delinquency rates, despite recent increases in inflation expectations.
High-end consumers are not saving much and enjoying high stock and home prices, but luxury retail brands like Rolex are experiencing declining sales.
Walmart’s e-commerce growth of 20-30% year-over-year and its status as the largest U.S. grocery store are driving solid sales growth, capturing higher-end consumers.
Long-term stock market returns may be low following a bubble, with analysts forecasting negative average annual returns for the next 12 years based on current overbought conditions.
T-bills offer a 4%+ return with no capital loss risk, credit risk, and high liquidity, making them a suitable investment strategy in the current risky environment.
Consumer sentiment surveys can be misleading due to political divisions, but the Fed’s consumer expectation figures show a small increase in inflation expectations.
Labor shortages in some sectors and a tight labor market may continue to support consumer spending, even as the illegal immigrant labor pool shrinks.
U.S. manufacturing construction is booming, with factories being built and high-tech jobs returning, which will have positive effects on the economy, wages, and the middle class.
A short but deep recession in 2025 is predicted due to massive cuts in government spending, estimated at $50-$100 billion per illegal out of 10-15 million illegals, potentially knocking 5% off GDP.
The firing of 6 million government-funded NGO employees could drive unemployment to 8% and trigger a consumer spending recession.
Deportation of 10-15 million illegals could benefit Blue Collar Americans with lower rent, but the drop in housing demand might trigger a 2008-style housing crash.
Hundreds of billions in government spending potentially fund the left and its NGO industrial complex, artificially inflating GDP by counting handouts as factory output.
A government spending recession could lead to a 1950s-style decade of prosperity, similar to post-World War II demobilization making the nation richer and safer.
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