All I know is my gut says maybe. The long answer is yes. Granted, there’s only two letters of difference between maybe and yes. But in order to understand why, yes. You have to understand what the private credit issue is, and what private credit even is. And to explain that, we’re gonna go to Daniel Oliver, my favorite gold and silver analyst, who uses a movie analogy. A meme, if you will. We’ll watch a clip and his paraphrasing of that scene. It’s from A Wonderful Life, and it’s by character George Bailey. Before we get to that, there are some big changes coming to The Endgame Investor on YouTube.

My channel is splitting into two. I am starting a new channel, link in the description below, and the pinned comment, called Endgame Torah. There are some things that I want to share with the world that are not about money and currency and economics directly, though they are indirectly. I realize that some people don’t want to hear that stuff, so I won’t be putting that on the channel, and I will separate into an Endgame Torah channel, where I will share what is currently on my Patreon. Don’t worry if you are a Patreon member, you will still get exclusive content there, and I will be answering questions once every two weeks, meaning twice a month.

You can submit questions to the Patreon, link in the description below, and I will have a rally marathon answer session to all questions that are submitted to people. Well, not all, however much I can fit in in a reasonable amount of time. And you can ask me pretty much anything you want, and all of the content that is currently on Patreon will be going to the new channel, where I will be covering those topics, and hopefully everyone will be happy. The first video uploaded to the Endgame Torah channel is two rabbis speaking about the realities of possibly building the Third Temple from the left wing and the right wing perspectives they have a discussion.

It’s pretty interesting for those interested in those topics, if you’re not, just don’t watch it. And if you’re interested in biblical and Talmudic lessons on money, economics, and government, check out Endgame Torah, and let’s go with It’s a Wonderful Life. So you see here that this is a classic depiction of a bank run. People’s credit was loaned out to other actors, helping build projects, and those projects went under because they were too indebted and they couldn’t finish, and the money was lost. That is a bank run. Essentially, that is what’s happening with private credit.

How so? Well, Daniel Oliver takes that quote from George Bailey and restructures it like this. To paraphrase George Bailey, he says, you’re thinking of this place all wrong, as if I had the money back in the safe. The money’s not there. Your money is in a dermatology roll-up, where they’ve slashed costs by replacing physicians with nurse practitioners, and your money is in a dentist roll-up, where they’re pushing unnecessary procedures such as baby root canals to drive up revenue. And your money is in HVAC and mobile home park roll-ups, where they took out all of the local competition and jacked up prices.

Buy your lending the money to loot consumers before the economy collapses, and then they’re going to pay you back as best they can, but only if the Fed does QE and lowers rates, and then you won’t even want your money back at all. What is roll-up and why is private credit doing this, making small businesses into big businesses and increasing efficiency? Well, let’s say you’re making cigarettes for a living, and you’re doing it by hand rolling them in some artisanal way. It’s not very efficient, but you can change the flavors, you can change the sizes, you can change the nicotine dose, or whatever it is that smokers like or don’t like, and you have flexibility.

But if there is more credit in the system and interest rates go down, then what will happen is someone is going to buy a cigarette-making machine that will be much more efficient and will make more cigarettes for less cost. You’ll have higher efficiency at the expense of flexibility. This is sort of like roll-up for cigarettes. Now, this is fine, assuming the machine can be paid back in revenue and profit, but if it can’t, then what you have is eventually a default and the machine cannot be paid for, and then you have a bankruptcy.

Given that interest rates were zero for so long, even when they were high, there was so much extra capital through the reverse repose and all that other stuff that was backed up after COVID, all of this capital had to go somewhere. So what happened was the firms with the huge amount of credit took it and bought up a bunch of small businesses and made them into bigger ones and maximized efficiency so that you had more production with less flexibility, which is why you have dentist roll-ups and doctor roll-ups and dermatology roll-ups and mobile home roll-ups.

All of these small businesses becoming bigger businesses with more efficiency but less flexibility. But the companies that are borrowing money from Wall Street to roll up all of these businesses cannot pay back. Why? Because interest rates went from zero to five. So the bank, in this case, which is the private credit front, cannot pay back its investors because the companies that it was rolling up cannot pay back their loans. This will continue to disintegrate until the Fed bails everyone out and then you have even more credit in the system and all of this roll-up is gonna have to be rolled up into one giant ramjack corporation company until you have only one company running the entire planet, which, of course, is impossible and the currency will collapse before then, but that is theoretically where this all heads.

The private credit crisis is essentially the same thing as the sub-crime… as the subprime crisis of 2008 just in a different name. In subprime, lenders had to go out on the risk curve to lend money to consumers to buy houses that they couldn’t afford. The private credit crisis is the same thing, where Wall Street firms have to go out on the risk curve to get return for their investors to lend to crazier and crazier debtors who cannot repay the loan. Just as George Bailey was experiencing a bank run at his bank, now the private credit firms are experiencing a bank run on their banks.

If this bank run didn’t happen, then what would end up happening with ever increasing amounts of credit is the hyper-efficiency of the entire structure of production to the point where the roll-up would continue at such an extreme pace that there would be one company rolling up everything into itself and production would be limited to processing of dead bodies for food for the living who wouldn’t have to do anything but wait for people to die so that they could be consumed in a soylent green manner. Silent green is people! Therefore, nobody would have to do anything.

Everything would be hyper-efficient and life would be death. But before that happens, there will be the final bank run. That is what hyper-inflation is. It is the final bank run on the Federal Reserve itself because the Federal Reserve issues shares on itself, which are dollars, just as George Bailey’s bank issued shares, which could not be redeemed for dollars that they ultimately represented. The Federal Reserve issues shares for its share of gold that it owns. Its shares are called dollars, and the final bank run is going to be people who own those dollars trying to return them for their original money, which is, of course, gold.

But the Fed is not going to give gold for those dollars, so all of those people are going to have to go to coin shops and try to get gold and silver in return for their dollars, many of which will not be able to get any at all. And so the question is, is this private credit bank run big enough to spill over into a large enough bank run to eventually force the Fed to print even more tickets for federal debt and thereby destroy the currency as it causes the final bank run before everything ends up in one giant ramjack corporation where people are eating nothing but soiling grain and doing nothing with their lives? Mom, you’ve got to help.

They’re cooking kids in the school cafeteria. You march right back to that school, look them straight in the eye and say, don’t eat me. One hint that yes, this is a developing credit crisis is that the value of gold has not really declined since it topped in dollars at about $5,500 at the end of January. How do I know that it hasn’t declined? Because gold stocks have not fallen priced in gold at all since the gold top at the end of January. If you look at the gold to Huey ratio, that is gold stocks priced in gold ounces, the lower this chart goes, the more valuable gold stocks are in gold ounce terms.

You can see here, this is 2026 and this is where we are now. This is the end of January and we had a momentary fall in the value of gold stocks relative to gold. We’re right near highs for five year highs from 2020 over here and we haven’t fallen much at all. We’re at 5.66 and I think the high is about 5.2. This shows that the current fall in gold prices in dollars is not affecting the sector fundamentally. If it was, then gold stocks would be falling in gold ounce terms in anticipation of a continued fall in the gold price and in gold equities, which is not happening at all.

Will this be the domino that causes it? I don’t know, but it could very well be big enough to cause the next domino to fall, which will eventually collapse the currency and lead to the end game that we have all been waiting for, which will de facto end all wars because they will not be able to be funded anymore by the dollar which funds all of the violence currently ongoing on the planet. Before that happens, you might want to get some gold and put it in a dirty man safe.

Use the code endgame10 at checkout for 10% off and check out the other channel, EndgameTora, if you’re interested in those types of musings and if you would like your personal questions answered on any topic, check out the Patreon at patreon.com slash endgameinvestor. Prices will not be changed. It’s only $3 a month to keep out trolls and that’s it. Thanks for watching. [tr:trw].

See more of Rafi Farber on their Public Channel and the MPN Rafi Farber channel.