The sirens are wailing in the hallowed halls of central banking as we witness the red economic indicators, signaling a profound distress that echoes the Great Recession. Our economy may be dancing on the edge of a fiscal knife, with the dollar’s purchasing power hanging by a thread.
The Federal Reserve’s attempts to anchor the fraying edges of our debt-based monetary system by increasing asset purchases to lower interest rates have afforded only a reprieve. The brief lull in the tempest was just that—fleeting. Rates are climbing again, with the US 10-Year Bond Yield reaching 4.342%, a stark reminder of the dollar’s vulnerabilities.
As per our last analysis, we charted the unsettling rise of gold to $3,372 per ounce. Today, it’s just a bit higher at $3,385, while silver, as if catching the wind under its wings, ascends further to $33.1225 per ounce. The gold-to-silver ratio (G/S), a crucial gauge of the historical pricing relationship between these two metals, stands at 103.66, inviting assessments of potential undervaluation and investment opportunity.
Why this steadfast upward climb? Big and small investors are losing confidence in paper promises and instead turning to tangible assets.
But let us not be myopic. Our scrutiny must encompass the lustrous metals and the full spectrum of commodities. Copper, that bellwether of economic health due to its industrial ubiquity, is currently $4.76 per pound. Similarly, crude oil remains subdued at $59.33, and Mont Belvieu LDH Propane is listed at a modest $0.57. These commodities, and their current valuations, reveal a market skittish over the prospects of deflationary shocks amidst inflationary pressures—a tightrope walk if there ever was one.
Cryptocurrencies, which have been lauded as modern hedges, are experiencing their rallies, with Bitcoin now priced at an eye-watering $96519. These digital assets may one day rival gold and silver as refuges from monetary tumult.
Bitcoin is again closing in on the psychological $100,000 threshold. Several factors underlie this movement: ETF inflows, growing corporate adoption, and Bitcoin’s role in facilitating cross-border transactions for entities facing currency devaluation. “Bitcoin’s resilience comes down to its dominant mindshare,” says Alex Chun, an independent analyst. The surge has been accompanied by a modest uptick in volume on major exchanges like Coinbase, Binance, and Kraken, with no immediate sign of retail FOMO driving the rally.
One notable trend is the decoupling of crypto assets from traditional safe havens. Gold and silver have held firm, traditionally acting as hedges against risk. Yet Bitcoin’s surge toward $100,000 and Ethereum’s resilience—even after several corrections—suggest investors see digital assets less as speculative side bets and more as potential portfolio mainstays.
The dollar, however, does not have such a rosy forecast as we watch its purchasing power collapse. Consider the velocity of money, a key metric that reflects how frequently each dollar purchases goods and services in the economy. It’s accelerating, a sign that the cash printed in abundance is now circulating faster, fanning the flames of inflation and diminishing the potency of the greenback.
The M2 Money Supply indicator is at an all-time high and rising, now higher than during the Covid-19 ‘scamdemic‘ when massive money printing was used to pay people to stay home. A rising money supply and velocity of money are signs of hyperinflation in currency.
Moreover, the political landscape seems less a bastion of economic stewardship and more a stage for fiscal imprudence. Regulatory mistakes and escalating trade tensions are a formula for distorting market outcomes and stoking the fires of inefficiency. The picture of our Western economies, painted in the somber hues of manipulation and control, strays far from the ideals of a free market system.
You should look beyond the daily headlines and see patterns forming that suggest we are in the final months of a dollar-based debt currency life cycle, perhaps weeks. The US debt has ballooned beyond what many deemed conceivable, and with each passing day, the prospects dim for a painless resolution.
How, then, should we brace for impact? By recognizing that paper wealth is a shadow when the substance is questioned. Now is the time to diversify, to consider how physical gold, silver, and pre-1965 coins (so-called junk silver) can act not just as wealth preservers but as bastions of stability in a sea of fiscal unrest.
It is a mistake to ignore the possibility of a liquidity crisis that could freeze markets and obliterate paper fortunes. Efforts must be made to prepare for life after the collapse of the US debt markets, whether through acquiring tangible assets, cultivating self-sufficiency skills, or fostering communities that value exchange through tangible goods.
Folks, we all have to push against the causes of economic decay using lessons already learned from the past—gold and silver, whose value has echoed through history, are an easy and “off the shelf” solution. Please don’t overlook the many other ways to prepare, including acquiring food and water for the “rough spot” resulting from the dollar collapse.
Being prepared is the best way to have the best chance during the financial reset planned decades ago for destruction today.
Be not deceived – be prepared ~ Silver Savior
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- Note: We are not giving advice; we only give our opinion; we are not financial advisors. This article only represents our thoughts about the economy.