My Friends,
In times of economic turbulence, it is crucial to understand the myriad factors affecting the financial markets and the broader economy. As your commentator, I consistently strive to keep a close eye on critical developments, making sense of complex data to guide you through this volatile landscape.
The current snapshot of the financial world is telling, with gold prices standing firm above $2,350 an ounce and silver gaining attention (at $28.35) , not only for its price resilience but also for its industrial applications.
Simultaneously, the US 10-year Bond Yield (over 4.5% today), an indicator often watched for economic sentiment, maneuvers in uncertain waters, reflecting investor hesitancy in the debt market.
Let’s examine recent trends and consider what they could mean for your financial security and the preservation of your wealth.
Gold and Silver: Pillars of Stability in an Unstable World
The allure of gold and silver remains strong, as they are not just commodities but symbols of wealth that have withstood the test of time. While fiat currencies, government-issued money not backed by a physical commodity, flounder, these precious metals preserve value.
Recent spot market prices for gold and silver testify to their enduring appeal, with gold persistently above $2,350 per ounce and silver holding its own. These precious metals are more than investment vehicles; they are insurance policies against a currency system teetering on the brink of over-extension.
Digging Deeper: The Appeal of Physical Metals
Investors are opting for physical gold and silver at a growing rate. Pre-1964 coins, often called “junk coins,” are experiencing a renaissance among individuals seeking tangible assets beyond the reach of fragile banking systems. These coins are a slice of history and a piece of mind, representing real value rather than digital promises.
The rationale for this shift is evident in the US debt market. With a debt that requires increasingly large borrowings just for interest payments, the economy is like a car accelerating toward a cliff with a broken brake line. In such a scenario, would you trust a seatbelt made of paper or one woven from the strongest steel? The answer is evident.
A Glimpse into the Debt Markets and the Fed’s Dance with Money Supply
The US 10-year Bond Yield is a metric that should concern every investor. Historically, bond prices rise when there is confidence in the economy. However, when confidence wanes, yields can skyrocket.
Bond prices fall when interest rates increase. Needless to say, we live in the era of the yield curve roller-coaster, which is symptomatic of deeper economic malaises. Falling bond prices trigger sell-offs, further increasing interest rates.
The Federal Reserve, the US central bank, has been inflating the money supply, and the velocity of money had been falling until late in 2020. Now, this situation has turned around.
The money supply is falling due to an increase in money velocity—this ratio (ratio of quarterly nominal GDP to the quarterly average of M2 money supply) has risen from 1.128 in 2020 to 1.33 and continues to climb.
The details of the ratio are optional. Still, the takeaway should be that when money velocity speeds up, inflation rises, rapidly decreasing the average person’s purchasing power.
Simply put, every dollar now buys less than it did before, making it critical to convert some of your wealth into assets that traditionally hedge against inflation—like gold and silver.
This indicator signals a coming acceleration in inflation. If the velocity of money continues to rise, devastating inflation will result. Hyperinflation is a destructive force on par with weapons of mass destruction.
Those not prepared, informed, and armed with understanding may not survive the complete loss of the US dollar’s purchasing power.
Among other assets, Silver and Gold can and will protect purchasing power against inflationary destruction.
Beyond Precious Metals: Diversifying with Platinum, Palladium, and Cryptocurrencies
While gold and silver take the spotlight, let’s recognize the potential of other precious metals like platinum and palladium. Both are integral to various industrial applications and are subject to supply and demand dynamics. These metals offer an additional option for diversifying their wealth-preservation strategies.
Cryptocurrencies such as Bitcoin (over $70k and rising) have also carved out a niche, oscillating between being viewed as digital gold and a speculative asset. However, the inherent volatility of cryptocurrencies necessitates a cautious approach, given our focus on wealth preservation.
Oil Prices: The Undulating Pulse of the Economy
The price of US Crude Oil ($85.19) remains vital to gauging the economy’s health, with tight supply chains and geopolitical instability often leading to price spikes.
Energy is the lifeblood of economic development and is highly sensitive to market sentiment. As consumers, we feel the impact at the gas pump and through increased costs for goods and services.
The current geopolitical conflicts and a sudden increase in infrastructure-damaging ‘accidents’ will continue to push oil prices higher. Make changes to reduce your exposure to rising oil prices, which will soon impact all prices.
Political Influence and Market Manipulation
As a survivalist, I see the signs of deliberate economic destabilization. Market manipulation twists outcomes, creating an artificial economy disconnected from the free-market principles that ensure efficiency and sustainability.
The increasing entanglement of political agendas with economic policies underlines the necessity of controlling your assets, away from systems that can be rigged against the average investor.
Surviving the Unthinkable: Preparing for a Liquidity Crisis and the Collapse of the Dollar
It’s not a matter of if but when the dollar finally succumbs to the pressures of unsustainable debt. The liquidity crisis ensuing from such a collapse would cripple the unprepared.
Now is the time to act. Holding physical gold and silver, maintaining a stock of essential supplies, and remaining vigilant are all crucial steps.
Conclusion: Building a Fortress to Weather the Economic Storm
Precious metals like gold, silver, platinum, and palladium are not merely commodities—they are bastions against economic storms. As the US debt market’s ticking time bomb counts down, the Federal Reserve’s money-printing measures only hasten the inevitable.
Tactically acquiring physical precious metals fortifies your financial stronghold. In a world of digital currency and fleeting promises, the intrinsic value of these tangible assets is a sanctuary of stability.
My commitment to analyzing and guiding you through the marketplace remains steadfast as we move through these precarious times.
Together, we’ll navigate the economic maelstrom, converting the currency of fear into a currency of resilience and preparedness.
Be not deceived – be prepared ~ Silver Savior
* Note We are not giving advice, only our opinion, We are not a financial advisor. This article represents our thoughts about the economy only. Do your own due diligence – think for yourself.
Author
