The Fourth Turning is a 20-25 year cycle of chaos and institutional breakdown, recurring every 80-100 years due to generational forgetfulness.
We’re currently in the acceleration phase of the Fourth Turning, characterized by strife, conflict, and the tearing down of institutions like the UN, WHO, and governments.
The dollar’s decline as a reserve currency is underway, with central banks diversifying and BRICS countries developing alternative payment systems like BRICS Pay.
Gold and silver are crucial for wealth protection during this period, with silver potentially experiencing a speculative explosion similar to the crypto boom.
The Genius Act has created synthetic demand for US treasuries through stablecoin issuance, potentially leading to a digital fiat trap.
Gen Z’s willingness to trade privacy for convenience could accelerate the development of a digital surveillance state.
Investors should focus on protecting wealth by taking less risk, holding gold and silver, and avoiding dollar-denominated assets.
The story of George Walton Williams, who only accepted gold and silver during the US Civil War, illustrates the importance of real assets during economic chaos.
The current Fourth Turning will lead to a power shift between generations, resulting in 40 years of peace and calm after the period of upheaval.
Understanding the Fourth Turning cycle is crucial for navigating the current economic and social situation and preparing for future changes.
The US job market shows downward momentum with massive revisions, unemployment at 4.3% (highest in current cycle), and 11,500 Americans retiring daily, signaling potential economic shifts.
Current broad market is driven by passive flows, momentum, and speculation, reminiscent of the 1999-2000 bubble, risking a major correction as demographics change.
Banks are tightening lending standards, rejecting mortgage applications and facing losses from subprime auto lender blowups, potentially leading to a housing market meltdown.
The private credit market’s growth is problematic due to lack of due diligence on lower credit borrowers, serving as a canary in the coal mine for liquidity issues.
Gold reaches all-time highs after a 4-month consolidation, driven by central bank buying and investors seeking hedges in uncertain economic times.
Fixed income markets, particularly US treasuries and commercial paper, become more attractive during recessions as yields fall and short-term cash alternatives gain value.
The US debt and deficit situation is critical due to untouchable entitlement spending, requiring mature decisions on retirement ages and increased entitlement spending control.
The Fed’s independence is at risk due to internal conflicts with the US Treasury, while ending the Fed could leave the financial system vulnerable to cyber attacks.
The stock market is in a bubble, with a price-to-sales ratio of 3.2, higher than the 2.87 peak of the dot-com bubble.
The labor market is slowing, with a negative 911,000 benchmark revision for April 2024 to March 2025, a rare occurrence outside recessions.
The K-shaped economy is worsening, with the top half getting richer and the bottom half getting poorer, moving the line of recession for the average person.
The yield curve is a key economic indicator, with a bull steepener leading to a spike in the unemployment rate.
The Fed’s rate cuts signal a worsening labor market, despite historically low unemployment rates.
The Fed’s balance sheet and bank reserves are not directly related to loan growth, credit growth, liquidity, or M2 money supply.
The 10-year Treasury yield is 80-85% correlated with nominal GDP and inflation expectations, not Treasury supply.
Banks in the Eurodollar system are the marginal buyers and sellers of Treasuries, pocketing the spread between liabilities (1.5%) and assets (4-4.5%).
Gold has outperformed the stock market this year, up 40% compared to 10-12% for the S&P 500.
Energy and oil are undervalued and essential commodities with high upside potential and low downside risk.
The velocity of money is increasing due to the government converting savings into checking, potentially leading to a big spike in inflation.
Wait for the big pile of money to show up in the market before investing, as per Jim Rogers‘s advice in “Market Wizards”.
The US debt-to-GDP ratio has increased from 30% in 1980 to 120% today, while the deficit-to-GDP ratio rose from 2.4% to 6.2%.
The stock market bubble will eventually pop, leading to a repricing of asset prices downwards.
Direct to household fiscal stimulus will likely be used again in the next downturn, potentially causing a huge spike in inflation.
The economy is slowing further, with the unemployment rate likely to rise, making asymmetric bets like gold, energy, and oil attractive investment opportunities.
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