In fiscal dominance, higher interest rates worsen government deficits instead of solving inflation, leaving the Federal Reserve trapped with no good solutions as their tools have mixed results or exacerbate other symptoms.
The disconnect between gold and real rates since 2022 is due to the regime change where higher rates don’t slow things down as much as they used to, causing gold and other scarce assets to resist downward pressure from rates.
Precious metals, Bitcoin, and other scarce assets with no productivity offset tend to perform well in fiscal dominance despite rising rates, as they don’t have debasement rates like currencies do.
In a fiscal dominance environment, it’s beneficial to tailor a portfolio to debasement by swapping bonds for gold and equities for Bitcoin to achieve similar volatility profiles but with better returns.
The US faces long-term risks from demographics, deficits, and de-globalization, with the national debt being an issue despite being denominated in printable dollars due to the importance of where it’s held.
The demographic shift in the US, with an age-heavy population, is a major factor in growing fiscal challenges as entitlement programs like Social Security and Medicare become more expensive on a per capita basis for taxpayers.
The dedollarization trend, where major trade surplus nations like China and Japan are accumulating gold instead of US Treasuries, is a complex, slow-moving process that will impact the US fiscal situation long-term.
Bitcoin serves as a self-custodial portable ledger attractive for cross-border savings and portability, especially in countries with currency crises or political instability, achieving network effect dominance as a communication of value.
The silver market is smaller and more volatile than gold, causing silver stocks to outperform gold stocks at market peaks due to increased investor enthusiasm.
A decreasing gold-silver ratio indicates rising silver prices relative to gold, signaling a positive trend for the silver market.
Mining stocks are lagging behind metal prices but starting to catch up as algorithms focus on miners’ earnings rather than just metal prices.
Newmont mining stock has seen a 104.5% year-to-date increase, making it the second-best performing stock in the S&P 500.
The precious metals bull market is expected to continue, driven by increasing institutional buying, retail interest, and Asian market involvement, particularly in silver.
The third wave of the Elliott Wave sequence is predicted to be the strongest and most dynamic move in the precious metals market, fueled by a shift from disbelief to enthusiasm.
Platinum, with a 15:1 rarity ratio to gold, offers diversification potential due to its use in the hydrogen economy in Asia, despite its small and illiquid market.
Hedge bets and diversification into precious metals are advised, with expectations of panic manic buying and precious metals reaching the top spot in the S&P 500 within the next couple of years.
The movement from a unilateral world led by America to a multilateral world led by Russia and China is the bigger picture, with Washington aiming to strangle China’s growth due to its increasingly competitive manufacturing supply chain.
BRICS and SCO are building a gold-backed alternative to the US-led system, with predictions that the offshore dollar will fall by 50% by 2028, implying the gold price will double by then.
Double-digit inflation in the US and globally is expected around 2027-2028, driven by monetary stimulus, food price increases, and energy price increases, leading to 10-year Treasury yields exceeding 10%.
The US economy is already in recession and will remain so into early 2024, with Europe looking like a basket case due to government weaknesses and growing electorate opposition.
EU leaders are at high risk of going to war in Ukraine to distract from their domestic problems, potentially causing financial and economic turmoil as soon as the first shot is fired.
A potential Dust Bowl crisis in the Midwest due to a 90-year weather cycle could lead to soaring food prices and major economic impact, with the FAO food price index for July 2025 already up 7.6% compared to July 2024.
Recommendations for preparing for global economic collapse include buying gold, building a vegetable garden, stockpiling food in deep freezers, and following short-term market cycles while avoiding long-term investments.
The shift to a multipolar world is driven by the SEO meeting and meetings in Beijing, with Russia and China working together to build a new economic order, representing a once-in-80-year transition in the global economic system.
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