Before entering upon the duties of that office I took an oath that I would “preserve, protect, and defend the Constitution of the United States.” Entertaining the opinions alluded to and having taken this oath, the Senate and the country will see that I could not give my sanction to a measure of the character described without surrendering all claim to the respect of honorable men, all confidence on the part of the people, all self-respect, all regard for moral and religious obligations, without an observance of which no government can be prosperous and no people can be happy. It would be to commit a crime which I would not willfully commit to gain any earthly reward, and which would justly subject me to the ridicule and scorn of all virtuous men. – President John Tyler,1841, vetoing yet another attempt to create a central bank | emphasis added
Recently, we witnessed a stronger-than-expected U.S. jobs report—a superficial signal of economic health that belies the inherent fragility lurking beneath the surface of the current financial system. Remembering, however, that it was just a few months ago that the rosy jobs report of March was found to be made up and had to be revised down by 818,000 jobs — job numbers are not reliable. I maintain that this system is teetering on the brink due to unsound monetary policy and unsustainable debt levels, exacerbated by central banking practices at odds with the prescriptions of Austrian Economics.
Gold and silver, the historical bastions against monetary uncertainty, are experiencing price pressures following this rosy employment data. Yet, one must ask why these precious metals would not surge in an era of unease and expansionist monetary policy. Look at gold prices today at $2772, moving past its all-time highs and heading toward $3000/oz. Silver, too, is finally moving out of its containment box and heading back toward its all-time high.
Hyperinflation is the expected outcome of continued debt expansion, which is not stopped except by the dollar-based system’s collapse. We have reached the point that Austrian economists call the “Crack Up Boom,” wherein the debt market will lock up. No amount of money printing can satisfy its liquidity demands, and sadly, all things valued in dollars will take a final turn for the worse.
In the short term, I foresee market segments continuing to respond erratically to the push-pull of economic reports and central bank policy statements. With the stronger dollar and the effect of new U.S. fiscal policies, we may see temporary depressions in gold and silver prices alongside bullish equity markets drawn upward by optimism and speculative fervor, not fundamentals.
Technological advancements and innovative corporate strategies will likely drive stock market segments to new heights, even as the market’s general pulse quickens in anxiety. Tech stocks will probably continue their upswing, while commodities, reflecting deep-seated concerns about inflationary pressures, could oscillate with geopolitical tensions and supply chain fluctuations.
Looking at the longer horizon, my assessment remains grim, grounded in the teachings of Austrian Economics. The tides of debt continue to rise, with the U.S. budget deficit of $1.833 trillion as of September 30th, and continues to grow. Living beyond one’s means, a culture perpetuated by central banking institutions, inevitably leads to economic dislocation and hardship.
This burgeoning national debt and inflation rates that outpace income growth have resulted in currency debasement. The average citizen pays the price as their savings and purchasing power erode. As noted by Rothbard and Mises, this situation cannot be indefinitely sustained without eventual catastrophic correction.
Given this precarious reality, I predict currencies issued by central banks will continue their descent into lessened trustworthiness –collapse. As a result, we may very well witness a gradual, at first, and then a rushing shift toward tangible assets like gold and silver. Moreover, alternative stores of value, like cryptocurrencies, irrespective of their volatility, might find increased acceptance as hedges against fiat currency depreciation.
Central banks, engulfed by their self-interests, fail to realize that there is no escape from the economic reality they have helped to engender—massive debt paired with artificially low interest rates begets more speculation, higher asset prices, and ultimately, an uneven economy that services the few at the cost of the many.
Ironically, BRICS nations accumulating gold reserves point to a broader geopolitical strategy to insulate themselves against the potential for a global monetary reset—perhaps a signal that they, too, anticipate the dire consequences of the West’s continued financial imprudence.
Therefore, as the market digests the juxtaposition of positive employment figures against the backdrop of increasing national debt, savvy investors would do well to adopt a cautious stance—balancing their portfolios with assets uncorrelated to the whims of central bank policies, the most prudent of which are gold and silver.
In sum, the economic health of our times—contrary to short-lived euphoria in stock markets or apparent employment upticks—hinges on a sword edge sharpened by debt and monetary expansion. Until we fundamentally address the skyrocketing national debt and control inflation and interest rates, the future of the U.S. and Western economies remains precariously uncertain.
To the right of this economy now would be a herculean effort; we must embrace sound money principles, eschew the expansionist entrapments of central banking, and recalibrate our financial system towards one grounded in fiscal responsibility, market-determined interest rates, and real economic growth. Without such foundational changes, and expect none of which to happen, I fear we are merely delaying the inevitable reckoning to be paid for a century’s worth of financial folly.
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.
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