In a world swimming in debt and precarious financial underpinnings, there stands a bulwark against the tides of fiscal decay: gold and silver, whose rallying calls have never been more pressing. Their steady climb in value signifies a warning for the discerning observer: the economic storm clouds are gathering, and precious metals may well be the financial arks of refuge.

Currently, gold is worth a robust $2628.61 per ounce, while silver is worth $30.689 per ounce. This reflects a gold-to-silver ratio (g/s) 85.65, suggesting an undervaluation of silver and a potential investment opportunity. The persistent strength in these metals is juxtaposed against an economy tethered to an unwieldy debt burden and exacerbated by diminishing faith in traditional currency.

The United States 10-year Bond Yield has nudged up slightly to 3.735%, a precarious ascent from 3.699%. This reflects investors’ jittery confidence in government debt as a harbinger of fiscal stability. Bond investors’ cautious discernment speaks volumes about the broader sentiment regarding the longevity of the market’s health.

Yet beyond the allure of gold and silver, other commodities like platinum ($959.74 per ounce), palladium ($1034.57 per ounce), and copper ($4.345 per pound) also reveal the movements of a market that is quietly hedging against the potential collapse of fiat strength. Commodity investment, a time-tested hedge against inflation, has never seemed more prudent.

Note On Interest Rate Cuts and the Bond Market

Last week’s rate cut of a massive 50 basis points foretells a coming explosion of money supply growth and ever-increasing inflation. Folks, the economy is burning up. The Fed’s decision to continue cutting rates is a disguised emergency monetary easing—similar to 2008. All of which is rapidly destroying the purchasing power of the dollar. Recently, we noted an increase in money velocity (how fast each dollar changes hands) and a slowing of the money supply growth. We are now in a situation where the money supply will explode, fueling massive inflation, and it remains to be seen if money velocity increases also – increasing supply and velocity are the conditions of fully fueled hyperinflation.  Food shortages are a reason why money velocity can rise during hyperinflation as people try to buy more food than currently needed to sustain them during increasing shortages. 

From the news today Fed’s Goolsbee sees ‘a lot’ of Fed cuts coming over the next year. This is a signal that the Fed has decided to collapse the dollar’s purchasing power. To back that up, we see J.D. Vance suggesting that a Bond Market Meltdown is likely if Trump is elected. Folks a bond market meltdown is already in the cards. As inflation rises, the stress increases in the US Bond market – which without a doubt will lead to a liquidity crisis and bond market sell off.  Boom, over a few hours the US dollar and economy will implode.

Energy markets, too, tell their part of the story. Crude Oil has ticked up to $69.63, with the Mont Belvieu LDH Propane (OPIS) priced at $0.57, indicating the intricate dance between energy supplies, demand, and broader economic health. These prices, from the pump to the furnace, impact every facet of American life and industry.

Our gaze then shifts to the enigmatic world of cryptocurrencies. Bitcoin asserts its contentious claim as ‘digital gold’ at USD 63,229.79, a stark reminder of the growing appetite for assets detached from conventional monetary policies. In an era of perturbation within traditional markets, cryptocurrencies have captured the imagination of those seeking shelter from fiat currency devaluation.

The tale woven by these financial metrics is further complicated by political machinations that contort market outcomes. Far from being free and unfettered, our markets are subject to pervasive interventions. One such intervention is the subtle manipulation by central banks, which have distorted the reality of supply and demand by artificially dampening interest rates and engorging the market with liquidity. The recent rate cuts by the Federal Reserve and the European Central Bank’s leaning towards policy easing only deepen this artificiality.

In this economic diorama, gold and silver have emerged as unparalleled vessels for preserving wealth. Financial institutions like Goldman Sachs’ predictions, which foresee gold reaching $2700 per troy ounce, reinforce the strategic insight in diversifying one’s portfolio with these metals. Local market observers note a keen interest in silver, particularly for its utility in burgeoning green technologies—marking it not only a precious metal for monetary safeguarding but also an investment in the future of sustainable innovation.

I posit that the current economic trajectory is beyond an imminent downturn—it is a deliberate deconstruction, where wealth preservation through precious metals becomes not just a choice but a necessity. In championing asset-backed currencies and decrying the unsustainability of endless borrowing, the current trajectory of US debt—an albatross around the nation’s fiscal neck—warns of a day when debt service becomes a Sisyphean predicament, only solvable through draconian austerity or the evaporation of wealth through hyperinflation.

For those navigating these troubled economic waters, I advocate fortifying one’s positions with physical gold and silver—including pre-1964 coins known for intrinsic metal value—as these assets have historically outlasted the fall of currencies and maintained purchasing power. Physical possession negates counterparty risk and firmly places financial security in one’s hands.

In conclusion, as a survivalist, I stress the importance of preparation. Strengthening your financial footing with tangible assets can provide a measure of control amidst economic chaos. Understanding the interplay between the debt markets, the velocity of money, and precious metals will give you the knowledge to survive and thrive through any potential collapse.

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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.