A major financial crash is inevitable due to passive investing distortions, reckless Fed policy, global de-dollarization, and gold’s resurgence, leading to a crisis potentially worse than 2008.
The Fed’s QE and passive investing have created a dangerous mix, inflating big-cap stock bubbles and causing stagflation, with the bond market now viewing the Fed with suspicion and distrust.
Serially incompetent Fed chairmen like Greenspan, Bernanke, Yellen, and Powell have made irresponsible decisions affecting the economy for years, with current debt issues building for 25 years.
Non-G7 central banks, Chinese insurance companies, and individuals have been buying gold as a response to the lack of confidence in paper currencies like the dollar, euro, and Swiss franc.
Gold is functioning as a currency without liabilities, with its price increase to $3,500 leading more people to understand its value as a rational asset.
The Biden administration has weaponized the dollar in the wake of Ukraine, contributing to the flow away from the dollar in both stocks and bonds.
U.S. stock investors have been bailed out by passive investing and QE for 25 years, but extraordinary valuations have appeared where they don’t belong, potentially leading to inflation, higher bond rates, or lower equity prices.
Mining stocks haven’t outperformed despite gold’s rise, with only the best companies in good jurisdictions with high-grade properties and well-managed operations doing well.
Fleckenstein’s ideal portfolio for 2025 includes 40-50% cash, gold, some miners, and a couple individual stocks, reflecting a cautious approach amid dicey markets.
The passive investing bid could collapse if there are enough layoffs and people panic and take money out of 401ks, leading to a market wipeout and subsequent recession.
If the bond market and dollar are both weak, it could lead to a very ugly situation with the stock market, especially if the passive investing bid weakens, potentially putting the US in a situation similar to an emerging market country.
Gold price surged 25% year-to-date in 2025, driven by macroeconomic shocks, tariff fallout, AI bubble, and US dollar decline from 110 to 98 on the dollar index.
The gold/silver ratio hit 100:1, indicating significant undervaluation in silver, while platinum is also undervalued at one-third of the gold price.
Portfolio managers are underperforming their index due to AI stocks, but are expected to reallocate to gold and silver when AI stocks decline, creating a huge opportunity in the precious metals sector.
China’s retail investors are emerging as a “new whale” in the gold and silver markets, driving prices higher with their massive buying power.
The “mining clock” suggests the junior market is at 9-10 o’clock, indicating it’s ready to rally dramatically.
The TSX Venture Index, currently at 650, is projected to triple to 15,600 in the future, signaling increased money flow into junior mining stocks.
Most analysts are described as “lemmings” who follow the crowd, needing to increase their price deck for gold to $3,000 before stocks will move significantly.
Silver stocks are expected to rally, with none forecasting price increases, making them a good long-term portfolio position.
The Panama Canal, a key naval choke point, is crucial for US and global trade, with its significance growing due to larger ships and the construction of a new, wider canal in 2016.
The Panama Canal Railway, built in 1855, remains strategic by connecting Hutcherson ports on both sides, allowing ships to transfer containers without traversing the canal.
The Darian Gap jungle serves as a natural defense against Colombian invasion, with the Panamanian government historically maintaining its closure for generations.
Chinese colonization of Panama is evident through control of the Colon Free Zone, Panama Canal expansion, and construction of a super canal, with a significant Chinese population dominating local businesses.
The United States, as the largest funder of the United Nations, continues to build global influence while the UN develops infrastructure and facilitates migration to Europe.
Blackouts can be used as strategic tools for creating chaos, as demonstrated by a small explosion at a key power plant in Panama that caused widespread panic.
Alfred Thayer Mahan’s 1890 book on the effects of sea power on history remains relevant for understanding the Panama Canal’s strategic importance.
Mosquitoes, initially thought to cause diseases like yellow fever during canal construction, were later identified as vectors, leading to the implementation of mosquito brigades by the US Army and Gorgas.
Canals have played a significant role in global trade, with the US building 4,000 miles of canals in the 1800s, and the construction of the Suez Canal preceding the more challenging Panama Canal.
Colony Ridge, a $200,000-person city in Texas, is linked to Governor Greg Abbott and developer Trey Harris, highlighting ongoing border control challenges.
The Darien Gap, a key migration route, was effectively closed under the Trump administration, but infrastructure for mass migration remains in place.
Wars often grow unpredictably and spread beyond initial battlegrounds, as seen in the extension of European wars to the American Revolutionary War.
Zionism, an oligarchal structure separate from Judaism, includes various factions like atheist Zionists and Zionist Muslims, dating back to at least 1899.
Famine, pandemic, and war are closely related, creating human osmotic pressure that drives migration and social upheaval.
Control over geopolitical choke points like the Panama Canal, Suez Canal, and Strait of Hormuz can lead to massive disruptions in energy supplies and economic stability.
China’s Communist Party aims to make the world Mandarin-speaking, erasing local languages like Cantonese and Fujian as part of their goal for global dominance and cultural uniformity.
Historical reconnaissance in the 1850s-1870s laid the groundwork for the Panama Canal and Japan’s opening, with the US strategically forming Panama to build the canal and enable global trade dominance.
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