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Major Multinational Banks Make the Call!

Major banks are raising their forecasts for silver prices, with expectations that silver will make new all-time highs!   

That would mean prices over $50 per ounce, a price silver has reached as far back as 1980, touched again in 2011, and flirted with in 2012.

A move well above $50 would be consistent with gold’s performance this year, in which it has set one new record after another.

UBS, the Swiss multinational investment bank, is calling for silver to rise to $44 by the end of this year, and $47 by mid-2026.

The bank’s strategists have issued a note to clients saying, “We flag that silver prices could reach an all-time high.” 

The strategists, Dominic Schnider and Wayne Gordon, point out that silver ETFs have surged by more than 20 million ounces in the current quarter alone, to 80 million ounces.  That’s impressive, but there is much more potential silver buying power as holdings are still 200 million ounces below the peak they reached during the pandemic in 2021.  

The UBS analysts also expect the gold/silver ratio to move to 80 to 1, indicating silver as outperforming gold.

Forces driving silver?  UBS highlights geopolitical tensions, US deficits, and Federal Reserve interest rate cuts.

Deutsche Bank, citing a fifth straight year of physical deficit with demand for silver outpacing supplies, raised its 2026 silver forecast to an average of $45 an ounce.  

Expecting central banks, especially China’s to continue gold buying, Deutsche Bank has also raised its 2026 gold forecast to $4,000.

Yep, it’s not just China!

We report often on China’s substantial gold buying.  Along with central banks elsewhere, it is one of the powerful dynamics driving gold prices to new heights.

And we know something about India’s devotion to gold.  People in India’s gold purchases are so dependable that many analysts regularly expect firming or higher prices to coincide with the annual wedding season there.  

But what about the Middle East where wealth pools around oil riches?

The Middle East is third after China and India in gold acquisition.  

The World Gold Council confirms that this ranking continued in the second quarter of 2025:

• China led the way with a 44 percent increase over the same quarter the prior year, purchasing a total of 115 tons.
• Indian demand totaled 46 tons in the second quarter.  That’s the eighth consecutive quarter of buying.
• Middle Eastern demand was healthy at 31 tons, purchases coming from different countries across the region.

Altogether, the WGC reports, last year (2024) the Middle East (excluding Turkey) consumed 281 tons of gold.  That’s more than twice the amount of Europe which acquired 134 tons of gold.

The United Arab Emirates has become an important global center of the gold market, according to the WGC.  “It is now the second largest cross-border physical trading hub after Switzerland. With no gold deposits of its own, it acts as a trading center for the processing of gold for onward export, and as a major jewelry wholesale and retail destination…”

“The Middle East is a major gold market, and the growth of the region is powering the gold industry across the [Gulf Cooperation Council] and beyond. This is evidenced by the growing gold trading links between the Middle East and Southeast Asia.”

There is an enormous amount of liquidity in the oil producing nations of the Middle East.    

For now we will share the observation of Goldman Sachs that if Goldman Sachs stated that if 1 percent of the privately held U.S. Treasury market, valued at over $24 trillion, were to shift to gold, it would drive gold to around $5,000 per ounce.

Stagflation is just another factor making gold and silver go up

As we write this note, gold prices have gained nearly 39 percent this year.  That follows a 27 percent jump in 2024.  It’s a good time to look at one of the most powerful dynamics that makes gold price go up:  Stagflation!

In the modern American memory there aren’t many things as closely associated with explosive gold and silver price increases as stagflation – the brutal combination of inflation and a stagnant economy.

In fact, the entire decade of the 1970s is often simply called the Stagflation Decade. The decade was characterized by subpar growth (rising interest rates killed a lot of businesses; the Fed funds rate peaked at 20 percent at the end of the decade), recessions (two of them), and sky-high inflation (it peaked at almost 15 percent in March 1980).

Of course GDP contracted, and consumer confidence collapsed.

But precious metal?  Whoooo, boy!  The stagflation decade was a spectacular bull market in both gold and silver.

So is there any evidence that we are again entering a period of stagflation, one that can be very profitable for investors well-positioned in gold and silver?

The answer is yes.  To go along with that short answer, take a look at this chart from the respected Purchasing Managers Index.  It shows contraction in employment along with rising prices.

There is plenty of confirmation of this picture, especially the July Producer Price Index that took a big, unexpected jump.  The money supply, M2, is growing at almost 5 percent.

GDP (productivity) growth in the first half of 2025 was only 1.2 percent annualized, less than half 2024’s 2.8 percent growth.  The unemployment rate is inching up.  The Conference Board reports that consumer confidence is down as well.  The price of oil is down as well from high in 2022.  Slowdown in economic activity means lower energy demand.

As for the Federal Reserve, it is in about the same place it was during the Stagflation Decade.  Trump wants a rate cut to goose the economy, but that isn’t usually done when the stock markets are at all-time highs (remember the stock market collapsed under these same conditions in the 70s!) and the indices show inflation already climbing.  On the other hand, raising rates to head off inflation threatens more stagnation.

It’s the same conundrum the Fed was in 50 years ago.  So it did a little of both, it raised rates and then lowered them.  Then it lowered them some more and then raised them.  Then it raised them and then lowered them again.  The number of interest rate changes was mind-boggling, because they simply didn’t know what to do.  Just like today.  So people protected themselves with gold and silver.

We are in the jaws of Stagflation!!  Speak with a Republic Monetary Exchange professional today to protect yourself and your family from the volatile financial conditions ahead!

That’s how you know the world monetary system is going through a major shakeup!  Because gold outperforms pretty much everything!

Gold is having another bumper year. The shiny metal is setting new all-time highs and has raced ahead by some 35 percent 2025.  It looks like gold is headed for a third straight year of double-digit return.  

Along the way it is leaving stocks and bonds way behind. 

Here’s the way Newsweek reports on gold’s performance:

Gold has shattered previous price records in a dazzling rally, propelled by a mix of economic and political anxieties that have convinced a growing number of investors and governments to place faith in its time-tested “safe haven” status.

 With US debt now at 126 percent of the nation’s total productivity (GDP), individuals, investment professionals, and foreign nations are growing skeptical about the prospects of that debt being repaid.  Newsweek cites one researcher stating the obvious, “that gold’s surging price could also be tied to growing questions about the sustainability of U.S. government debt—now over $37 trillion according to Treasury calculations.”

 Others point candidly to an overall erosion of faith in the dollar.  The US Dollar Index (DXY), which measures the performance of the dollar against a basket of six leading currencies, is down more than 9 percent this year.

The best advice we can give our friends and clients is to protect yourself from a once-in-a-lifetime shakeup in the world monetary system.  Let us help you devise a gold and silver portfolio for protection and profit in fast-changing times.  Speak with a Republic Monetary Exchange professional today.

Protect yourself from rising prices with gold and silver!

Although we’re not in a position to fire anyone for them, we’ve always been skeptical about government economic numbers.

Inflation figures have been monkeyed with for decades to help politicians soft-pedal the damage they’ve done.

The latest government report shows consumer prices rose 0.2 percent in July and 2.7 percent over 12 months.  Bloomberg writes, “Underlying US inflation accelerated in July.”  

But the big hit is producer prices.  In July the producer price index jumped 0.9 percent from a month earlier.  That’s big.  Producer prices are like wholesale prices, destined to be felt in consumer prices eventually. 

As for the Consumer Price Index, it has been over the Federal Reserve’s two percent target for 53 consecutive  months.  Most people in their private jobs are not given tolerance for being that wrong and underperforming for so long.

The so-called core CPI, which excludes food and energy costs, rose 0.3 percent in July and 2.7 percent for the 12-month period.  

Are the government CPI numbers the real story, an accurate portrayal of actual price increases?  Probably not.  They never really have been, and there’s no reason they should start being reliable now.

John Williams of ShadowStats has detailed the changing basis of the Bureau of Labor Statistics inflation reports:

The Consumer Price Index has been reconfigured since early-1980s so as to understate inflation versus common experience.  The CPI no longer measures the cost of maintaining a constant standard of living.  CPI no longer measures full inflation for out-of-pocket expenditures.

With the misused cover of academic theory, politicians forced significant underreporting of official inflation, so as to cut annual cost-of-living adjustments to Social Security…

Use of the CPI to adjust retirement benefits, private income or to set investment goals impairs the ability of retirees, income earners and investors to stay ahead of inflation.

So let’s zero in on a few things.

Beef has never been more expensive than it is today.  The average price of a pound of ground beef is over $6.  That’s a first.  

Eggs are 16.4 percent higher over the last 12 months, coffee is 14.8 percent.

No wonder that a majority of Americans report that the high cost of groceries is a major source of stress in their lives.

It is important to remember that price inflation compounds.  If next month’s CPI is up 0. 3 percent over this month, that means higher prices next month will be up built upon the increases already present this month.  Inflation has been compounding like that for 53 months in a row.  The eighth wonder of the world!

“For those living in a U.S. dollar-denominated world, physical gold remains the primary hedge against the ultimate dollar crisis, along with physical silver,” says ShadowStat’s Williams.

It makes gold glitter and silver shine!

It’s always the same thing:  governments go bankrupt and their money fails because they can’t control their spending.  Politicians spend, spend, spend money they don’t have to buy the voters love and affection.  This helps them get reelected.

Then when the bill comes due for all their spending, they act like the national debt came from some alien ship in outer space that they had nothing to do with.  But the get their light sabers ready and promise to fight inflation.

So here we go again.  It’s time to check in on DEBT OUT THE WAZOO!

That’s financial blogger Wolf Richter’s colorful term for America’s recklessly ballooning national debt.  

One year ago the national debt was $35.1 trillion.  Today it’s $37 trillion.  Washington added $1.9 trillion dollars of debt in 12 months.  

Now $37 trillion, the debt out the wazoo will reach $37.8 trillion by year end.

But wait!  There’s more.  There’s hidden debt, an iceberg below the surface!  It’s another $100 trillion.

All that debt cannot be paid in a straightforward, honest way.  But Washington has a secret weapon.  Here’s former Federal Reserve chairman Ben Bernanke letting the cat out of the bag. 

The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.  By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services.

That’s it.  Washington has the means to “default” on its debt by printing money, by reducing the value of the dollar and thereby reducing its real debt.  By inflation.

So gold keeps climbing.  

Protect yourself and your money.  

(and war threats are spreading by the day!)

“The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”

—  Ernest Hemingway

Bombs have been falling all over the place this year.  

In Iran, Yemen, the Gaza Strip, Syria, Ukraine, Israel, Russia, Lebanon, the West Bank, as well as Iraq, Sudan, Myanmar, and the Democratic Republic of Congo.  Nor can we overlook Thailand and Cambodia bombing one another.

The rubble is still bouncing in some of those places as we write, while threats of attacks and counter attacks are flying all around the globe.

Trump issued a cease-fire ultimatum to Russia the other day, to which former Russian president and prime minister Dmitry Medvedev responded, “Each new ultimatum is a threat and a step towards war. Not between Russia and Ukraine, but with [Trump’s] own country.” 

Trump warned that Medvedev was “entering very dangerous territory!”

Medvedev warned that “Russia isn’t Israel or even Iran.”

And so it went.

These are among the conditions that have conspired to propel gold to new all-time highs.

It is no surprise that gold demand surged in Iran during the second quarter of the year, thanks to the “12 day war” with Israel and the US.   Gold sales jumped 20 percent over the same quarter the year before. Iranians stocked up on earrings, pendants and other types of bling.  Oh, well.  Gold is gold.  In times of desperation even gold jewelry and silver tea sets are prized for their precious metals content.  But it makes much more sense, as we recommend at Republic Monetary Exchange, to invest in gold and silver coins and bars, items of known quality and weight, that don’t have to be assayed or melted down, and don’t carry the additional mark up of fabricated gold or silver.  

But gold is gold, and we’re sure that people besieged with war will be glad to have gold in any form.  

“Iran was the outlier.  Consumers bought gold jewelry as a proxy investment, pushing demand in the quarter up 12 percent year on year,” said a WGC analyst.  “Gold recorded a remarkable 26 percent appreciation in the first half of the year in dollar terms, outperforming many major asset classes.”

We spend a great deal of digital ink on describing the latest developments on the monetary and fiscal fronts, but the escalation of war threats is enough to remind us that gold is the wealth protection haven par excellence in time of chaos and war.

No wonder central bankers and smart investors are buying gold.   Speak to us about protection and profit with gold in times of increasing warfare.

We say prepare now with gold and silver!

The US government collects $5 trillion.  It spends $7 trillion.

And that is not a recipe for economic health!

That’s the view of hedge fund superstar Ray Dalio, the founder of Bridgewater Associates.  Five years ago we included Dalio in our pantheon of billionaires that were urging you to buy gold.  

He sure got that right!

And there’s more to come for gold.  Here’s Dalio’s heart attack metaphor about Washington’s economic peril:

It’s spending 40 percent more than it takes in, and it can’t really cut spending because so much of it is fixed. It’s accumulated a debt that’s six times its income…  The credit system is like a circulatory system that brings nutrients—buying power—to different parts of the economy. If that buying power is used to generate income, then the income services the debt, and it’s a healthy system. But when debts, debt service payments, and interest rates rise, they begin to crowd out other spending—like plaque in the circulatory system—creating a problem akin to an economic heart attack.

-Ray Dalio, Founder of Bridgewater Associates

Ray Dalio says we are at point of no return.  There’s not much Washington can do at this point but institute capital controls and print money.  Warning signs are flashing, he says.  Now gold is reclaiming its place in the global monetary order, having this year surpassed the euro to become the world’s second-largest reserve currency.  

We agree with Dalio’s observation, that “if you don’t own gold, you know neither history nor economics.”

If you would like to know more about gold’s role in the global monetary order, and what gold can do to protect your own financial health, why not make an appointment with us at Republic Monetary Exchange.  We’ll brief you on developing monetary trends and discuss prudent steps you can take today to meet the challenges ahead.

Gold and the Dollar are Facing Off

As far as bull markets go, this gold market is impressive!  But it is much more that just another bull market.

This is a global monetary reset!

This is more like a showdown.  The endgame for a monetary system that is no longer sustainable.   As we have noted, when fiat (unbacked, irredeemable, made-up) paper or digital money goes toe-to-toe with gold, gold always wins.

That is gold’s strength.  It is on display now as the global monetary system re-sets.  Gold and the US dollar are facing off.  The dollar has had its worst first half of the year since 1973.  The world is turning away from the dollar.  It is turning to gold. 

That is why gold is making one new high after another. 

A couple of details:  In the month of June, 27 percent of federal revenue went to pay interest on the national debt.  Stated differently, the US is borrowing $6 billion additional dollars a day just to keep the wolf away from the door.  Beef prices are up nine percent since January.   Inflation has been above the Fed’s (arbitrary) two percent target for four years. 

Things are growing grim.  Oh well, historically reserve currencies have an average lifespan of around 94 years.  France has a run of 95 years followed by the British empire.  The British pound sterling lasted in the starring role for 104 years, finally undone by war and socialism.  

The US dollar took the inside lane in 1920; its preeminence became official with the Bretton Woods agreement which was launched in 1944.  But Washington couldn’t resist money printing, war, and socialism.  So the world is starting to beat feet away from the dollar as a dependable store of wealth.

In other words, we are in a global monetary reset.  That is why gold is in a bull market, but not  ordinary bull market. The accounting for gold’s success will be complete when people stop talking about how many dollars’ worth of gold they have.  They will just cut to the chase, measuring their wealth in ounces of gold.  Who needs a middleman?  

Like those who decided a century or so ago to move out of the British pound and into what was then the “good as gold” US dollar, we hope you will position yourself wisely for the end-of empire global monetary reset that is underway now.  

At Republic Monetary Exchange, we can be of help.  

It’s what we do.

You’ll wonder why they don’t cost a lot more!

There isn’t much gold to go around!  There’s not enough for everyone to have very much.  Having given that some thought, we wonder that gold is still so affordable.

So we decided to put our preferred AI service, GROK 3, to the test.  

We asked, “How much gold is there (above ground) in the world?”

Here is GROK’s answer:

As of December 2024, approximately 212,582 metric tons of gold have been mined globally, according to the World Gold Council. This represents all the gold above ground, as gold is virtually indestructible and most of it remains in existence.

 To calculate the amount of gold per person, we divide the total gold by the global population, estimated at around 8 billion people.

• Total gold: 212,582 metric tons = 212,582,000 kilograms = 212,582,000,000 grams.
  
• Gold per person: 212,582,000,000 grams ÷ 8,000,000,000 people ≈ 26.57 grams per person.

This translates to roughly 0.86 troy ounces per person (since 1 troy ounce ≈ 31.1035 grams), or about the equivalent of six gold rings per person, as some sources describe.

Wow!  There is less than an ounce of gold per person!  How can it still be so affordable when it is so rare?  

We asked GROK the same questions about silver.  “How much silver is there (above ground) in the world?  How much is that per person?

Estimates of above-ground silver vary due to differing methodologies and data sources, but based on available information, approximately 1.74 million metric tons (about 55.94 billion troy ounces) of silver have been mined historically as of 2023. However, a significant portion is lost to corrosion, industrial use, or unrecovered waste. The Silver Institute and other sources suggest that identifiable above-ground stocks, including bullion, coins, jewelry, and industrial products, are much lower, potentially around 2.5 to 4 billion ounces of .999 fine silver bullion, with total above-ground silver (including non-bullion forms) possibly reaching 20–50 billion ounces when accounting for jewelry, silverware, and other fabricated products.

For per-person estimates, using a global population of 8 billion:

• If we consider 4 billion ounces of .999 fine silver bullion, that’s roughly 0.5 ounces per person.
• If total above-ground silver is closer to 50 billion ounces (including all forms), it’s about 6.25 ounces per person.

These figures are rough, as much silver is unaccounted for in private holdings or lost to landfills. Unlike gold, silver’s industrial use and lower recycling rate (around 18% annually) reduce available stocks.

So there just isn’t that much gold and silver to go around.  Less than an ounce of gold per person and perhaps just a few ounces of silver per person.  

Just imagine what happens with the price when people realize that we are in a currency reset and that fiat money is being discredited.  Imagine the stampede to acquire real gold and silver for profit and protection.  

It will be something to behold!

Latest figures from the Silver Institute!

When the gold price broke out to new highs this year, we repeatedly advised that silver would follow and even outpace gold.  

It sure has.  Silver is up more than 30 percent.  And even though gold made new all-time highs this year, silver has outperformed gold.

Silver in the solar industry is experiencing huge demand, now accounting for 14 percent of overall silver demand.  With that and other robust technology demand for silver, we expect the bull market to continue. 

Other components of this roaring silver bull market included the economic fundamentals, the geopolitical chaos of wars, and the financial uncertainties that have driven gold to new highs, factors like deficits and debt.

The Silver Institute reports that silver has been flooding into exchange traded products:

With net inflows of 95 million ounces (Moz) in the first half of 2025, silver ETP investment has already surpassed the total for all of last year. This surge reflects increasingly bullish price expectations.

By June 30, global silver ETP holdings reached 1.13 billion ounces (Boz), just 7% below their highest level since the peak of 1.21 Boz in February 2021.

Those exchange products are important for tallying silver demand, but under today’s economic circumstances we are insistent in cautioning you against holding mere title to precious metals in funds or in paper substitutes like exchange-traded products.  Economic and political atmospheres are not now reliable enough for that.  For maximum safety, buy only physical, tangible metals that you can take in your possession.  Be sure to read our recent post on Government Risk here.

One other thing to note that indicates that silver is an undervalued asset and a shining opportunity.  Silver is still priced well-below the highs it set in 1980, 2011, and 2012. Don’t miss out on this undervalued asset. 

There are options to choose among when you invest in real, tangible silver:  silver coins like US silver dollars, privately minted silver “rounds,” and silver bars of various sizes.  Fortunately, an experienced Republic Monetary Exchange precious metal professional can guide you through the special advantages of each and help you establish a portfolio that best serves your needs.

We aren’t in the business of defending Federal Reserve chairmen.  We don’t defend anything about the Fed.  It has been a world class calamity for the value of the dollar.  It is the main agency for bailing out banks with the peoples’ money.  And the idea that a handful of bureaucrats and academics should be setting interest rates in a $29 trillion dollar economy, instead of letting supply and demand, and millions of borrowers and savers work out satisfactory interest rates themselves, is one of most destructive elements of central bank activities.

There.  We feel better saying that.  

Now, what happens next?  For now, the President has said firing Powell outright is highly unlikely.  Nevertheless, Trump has declared jihad on Chairman Powell, dubbed him with the nickname “Too Late,” and is demanding Powell lower interest rates.  Now.  And not just a little lower.  A lot lower.  

Last week Trump posted this:  

Our Fed Rate is AT LEAST 3 Points too high. “Too Late” is costing the U.S. 360 Billion Dollars a Point, PER YEAR, in refinancing costs. No Inflation, COMPANIES POURING INTO AMERICA. “The hottest Country in the World!” LOWER THE RATE!!!

Okay.   As we write, the yield on the US 10-year Treasury note is 4.48 percent.  But recent Treasury auctions are described as “weak.” The Treasuury has a growing problem.  It is experiencing difficulty attracting buyers.  Demand for 20- and 30-year bonds has been soft.

Bond buyers are lenders.  When they buy US government bonds, they are loaning money to the US government.  But when lenders are backing away, sensing risk to their funds, how are they induced to lend any way?  

By offering them higher interest rates.  

That is the opposite of what the President wants.  Trump wants the Fed to lower interest rates.  All presidents want easy money, in the hopes of creating a boom – although an artificial boom is always accompanied by a bust.

Can the Fed lower rates?  Forcing interest rates three percent lower (which is what the President means) would see the 10-year Treasury note paying 1.48 percent.  But if rates on US government bonds are driven so low, who will want to buy them?

Bill Bonner answers that question with a single word: “Nobody.”

In fact the primary remaining buyer would be the Federal Reserve.  It would have to create “money” out of thin air to finance Washington’s debt.  Call it what you will, liquidity operations, money printing, quantitative easing, or debt monetization, it would have to massively inflate the supply of money and credit to keep Washington’s borrowing and spending going.  As Bonner says,

The Fed would have to ‘print’ the money…US bonds and the dollar would crash…sending the US into the long-awaited credit crisis, chaos and recession.

That of course would be very bad for the economy.

But very, very good for people who own gold!

Higher, of Course!

The most important indicator of future gold prices is the relentless move by the world’s central bank of inch away from US dollar reserves and their movement to gold.

We have written about this several times and are doing so again because the move to gold is simply unprecedented.  The numbers are huge.

Central banks, particularly in emerging markets like China, have increased gold reserves significantly since 2022.

Altogether, the world’s central banks have purchased 1,000 metric tons of gold a year for each of the last three years.

This year they are on track to do it again.

That’s more than 32 million ounces of gold a year!   

That’s a lot of gold!  But it’s not a gamble.  It’s not speculation.  It is a move to protection.  It is a flight to quality.  

To add that much gold to their currency reserves, they are lightening up on their US dollar reserves.  So it is a referendum on the future of the dollar.

Major financial institutions are noticing.    

JP Morgan is looking at $4,000 gold next year.   It also describes a scenario in which gold climbs to $6,000 in 2029.  That scenario is based on the reallocation of less than one-half of one percent, just 0.5 percent, of US assets held by foreign investors getting repositioned in gold.   Citi has a long-term outlook of $7,000 by 2030.

We actually think that those forecasts may be modest.  If the US begins another round of intense inflation in an attempt to depreciate its massive $37 trillion national debt, a stampede by foreign investors out of dollar-denominated assets is sure to result.

We urge you to speak with a Republic Monetary Exchange gold and silver professional now.  Get a briefing in the developing global monetary system and discuss a sensible plan for protection and profit with precious metals.

Another Look at Gold’s Purchasing Power

A month ago we posted a comment about preserving your wealth with the purchasing power of gold. 

Now we’ll refresh your memory and add to the story.​

At the signing into law of a Florida bill recognizing gold and silver as legal tender, the bill’s sponsor, Representative Doug Bankson, offered this illustration of gold’s purchasing power.  

“If you bought a home in 1979, the average cost was $75,000; those were the days,” said Rep. Bankson. “If you bought that same home, that same product, now it would be $531,000. However, if you had bought that in gold in 1979, it would’ve been 268 ounces. Today, if you bought that home, 268 ounces. Why? Because it’s a tangible thing that has true value.”

It’s a great example.  We agree with Bankson’s core argument—that gold retains purchasing power better than fiat currency, since the US dollar has lost over 90% of its value since 1971. 

But Bankson understates the case for gold.  

Today 268 ounces of gold would be worth closer to $900,000, much more than the current $531,000 value of the home.  Today, it takes fewer ounces (159–160) due to gold’s price rising faster than home prices since 1979. This aligns with historical trends: gold’s value has surged (up 41.28% year-over-year as of July 2025), while home prices, though rising, have not kept pace with gold’s appreciation in recent years.

One more purchasing power example, this one from Bill Bonner, Bonner Private Research:

A Ford F-series pickup — the workingman’s wheels — cost $1,390 in 1950. Adjusting to official inflation figures suggests a price today of about $17,000. Instead, the cheapest F-150 you are likely to find will be about $40,000.

Yes, it is a better truck. Thanks to tech improvements. But new materials and new tools should have made them cheaper to build, too.

So rather than rely on BLS figures, let’s look at it in terms of gold. US GDP has risen 90 times since 1950. But the price of gold is up 82 times. In other words, in gold terms, US output — including the phony output — has scarcely increased over the last 70 years.

And in terms of GDP per person — up 40 times since 1950 — it has actually fallen in half.

But it took 33 ounces of gold to buy an F-100 pickup in 1950. Today, it takes only 13 ounces. In other words, the real economy – measured in gold – cut the price of a pickup truck in half. But the fake economy made them twice as expensive.

Bonner asks, where does that leave us? 

We think you know that answer: You’re better off with gold!

Accept No Substitutes for Real Gold and Silver

Today, with socialism on the march everywhere from New York to California, it’s more important than ever that you protect yourself with real, physical gold and silver.   Not paper gold, shares, or title to gold.  

That’s to protect yourselves from government risk.  

Right now Mexico is the world’s largest silver producer.  Its production is more than six times that of the US.    It produces so much silver that from time to time someone in Mexico proposes backing the Mexican peso with silver.  That’s not a bad idea.

While there is a lot of silver in Mexico’s silver mines, buying mining shares in this environment bears no relationship to owning tangible gold and silver for protection if the developing monetary crisis.  Mines are vulnerable to all kinds of problems, environmental interventions, mismanagement, stock manipulation, natural disasters, and nationalization. 

Right now there appears to be a risk that Mexico’s socialist president could nationalize the country’s silver mines.

And POOOOF!  There goes your investment.

How likely it is Mexico will nationalize Mexico’s mines is unknown, but it’s the sort of thing that socialists dream about.

So don’t be surprised if it happens, particularly in a crisis.   Last year Mexico elected a hard leftist president, Claudia Scheinbaum.   Her father was a communist and it is not clear where she differs from Karl Marx.  Because people like her destroy wealth and ruin currencies, the Mexican peso immediately fell, quickly losing about 9 percent of its value.   

Here is author and analyst John Rubino thinking about nationalization:

It’s impossible to predict which destructive thing will happen where.

Suffice it to say that a flat-out nationalization of Mexico’s silver resources would be a serious problem for the miners now operating there. AND it would be a potentially dramatic boost for the price of silver, as supplies became suddenly unreliable.

Our recommendation is to understand just close the world is to a monetary event of enormous proportions.  

We agree that silver is a good bet for profit at the same time that it is a wise means of wealth preservation.  But the chief value of both gold and silver is that unlike other investments, they are not someone else’s liability.  And be particularly aware of governmental risk to all your investments.  Put priority on physical, tangible gold and silver that you can take in your personal possession.  

As Rubino says, “Emphasize physical metals to a greater extent than would be necessary in a world free of geopolitical risk.”

Forecasts should “Buy Gold!”

Long-time friends may have noted that we don’t devote much space to long-term budget projections out of Washington.  Not that we pay a lot of attention to a lot of stuff that comes out of Washington, but long-term budget projections should not be relied upon by anyone.  The only thing they reveal is what people in Washington think, which can be quite astonishing.  We sometimes publish 10-year budget projections since some people on Wall Street take them into account.

But, politics and politicians being what they are, here is a rule of thumb:

The only budget that really matters is the current one.  Period.  Full Stop.

Anything else is subject to change.  With that in mind we want to share some 30-year Congressional Budget Office projections to show you why they are not to be relied upon.  We do so with the expert guidance of David Stockman, US budget director in the Reagan administration.

With policies currently in place, the publicly-held debt will grow by $102 trillion over the next three decades, reaching a staggering 154% of what would be $85 trillion of GDP by 2054.

We choke when we say the debt will grow by $102 trillion over the next three decades.  But that is only part of the story, the naïve, Rosy Scenario part.

As Stockman points out, that projection depends on highly unlikely, if not absolutely impossible conditions:

• The underlying CBO projections presume that there will be no recession during the 34-year span from 2020 to 2054, and that, in fact, there will be perpetual full employment at about 4% from here on out.

• Of course, during the last 30 years there have been three recessions, and no such full-employment perfection was even remotely achieved. The short spells of 4% unemployment or under, in fact, were few and far between—in stark contrast to the CBO baseline which presumes 4% unemployment year after year until 2054.

• The CBO projections also assume that inflation stays strictly in its Fed-prescribed lane at around 2.0% for the next 30 years, as well. That hasn’t remotely happened during the last 30 years, when the inflation rate has exceeded the 2.0% mark during 17 years, and frequently by substantial amounts.
  
• Likewise, it assumes that the bond pits will have no problem funding more than $100 trillion of new Treasury debt at yields which average just 3.6% over the next 30 years. Of course, the actual weighted average yield in the Treasury market today stands at 4.2% and the fulcrum 10-year note has been cycling around 4.4%, albeit at this point the prospective debt inundation is just getting started.

• Again, judging by the last 30 years of history, the odds that interest rates will be pushed down into the mid-3% range and remain there for 30 years running would not seem very compelling, either.

There you have it.  The official CBO 30-year budget projection is deadly in its own right.  But it depends on no recessions, 30 years of practically no inflation, and the Treasury funding all this debt for 30 years at interest rates below today’s rates.

“Even then, the truth is surely far worse,” says Stockman.  “Just remove one brick from the edifice of Rosy Scenario—perpetually low interest rates—-and the fiscal dragons truly come surging from the budgetary vasty deep. That is, if you assume the weighted average UST yields will clock in at 4.25% rather than 3.5% over the next three decades, the added debt from the permanent extension of the OBBBA would amount to $156 trillion….

“That is to say, there is really no escape from the Fiscal Doomsday Machine that has now tightly engulfed the nation’s very governing process.”

Like the antiquarian maps that showed the edge of the world with the warning “There be dragons!”, we are in uncharted waters.  Stated differently, if even the rosiest of rosy budget projections is a hair-raising calamity that will have the Federal Reserve waving its digital money creation wand as its only alternative, and if the real world will be much more… well, real, it only makes sense to get out of the way.

Speak with a Republic Monetary Exchange gold and silver specialist today for a sensible plan to protect yourself from the Fiscal Doomsday Machine.

What to expect Washington to do, and what you should do about Social Security’s bankruptcy!

In Part One of The Truth About Social Security we shared the latest news from the program’s Trustees: the retirement fund will be out of money by 2033.

Government accounting is funny.  The retirement fund is already out of money, but they don’t have to face reality the same way a private business does.  Nevertheless, it will have to face the accounting reality by 2033 that it is broke.  In the meantime, we are not government, so we should face the reality today that the net present value of the unfunded liabilities of the US government, including Social Security, Medicare, and Medicaid is $100,000,000,000,000.

That is ONE HUNDRED TRILLION DOLLARS!

That is the amount of money that Washington would need to be set aside today to fully fund future obligations for programs like Social Security, Medicare, and other entitlements.

But of course there is no one hundred trillion dollars that can be set aside.  To the contrary, the visible government debt is $37 trillion.  

So what will the government do about this?  And what can you do?

These programs are bankrupt.  The government will have to default on them.  That means it will break its promise to pay you.  

We are not suggesting that Washington will default overtly on Social Security payments.  We believe that they will be paid in “nominal” terms as long as possible… but not in “real” terms.  In other words, recipients will likely get their checks bearing the same face value they might expect, but in terms of purchasing power, they will be inadequate.  That is at least the most likely near-term expedient to expect from Washington.

That is something like a slow-motion default.  Printing press money is used to meet expectations of payments, but the printing press money has progressively less and less value.  

There simply aren’t a lot of other options.  The government could simply repudiate its obligations all at once.  But that is a game-over move.  It would bring the government’s remaining credibility and all of its activities, including tax collection, to a sudden, screeching halt.  It is far more likely that the pain of default will be spread out over time.

 The chart on the right illustrates the decline in the purchasing power of the dollar (in green) since the US creation of the Federal Reserve System.   There will have to be much more of that in the years immediately ahead.  

That is why we urge our friends and clients to prepare for their future, their retirement, and old age with gold and silver, long-term tools of wealth preservation par excellence. 

It is often said that the United States has never defaulted on its debt.  But that is not true. For those that would like to learn something about the US government’s past debt defaults, we refer you to this article by Ryan McMaken of the Mises Institute.  It is called “Yes, the US Government Has Defaulted Before.”

In the meantime the best that you can do is to be aware that Social Security is not dependable.  To protect you own retirement and older years, accumulate more gold and silver coins now.  To learn more about the role of gold and silver in wealth protection, speak with a Republic Monetary Exchange precious metals professional now.

Better start putting away more gold and silver coins!

What do you need to do about Social Security?  Simple.  Start putting away more gold and silver coins for the future.

That’s because the Social Security Trust Fund is in deep kimchi.  Simple put, there are no funds.  There is no security.  And don’t even think about trusting it.

Here’s the latest from the new Social Security Trustee’s Report.

Social Security is critical for 70 million beneficiaries and 185 million covered workers and their families this year.  Nevertheless, Social Security’s costs have exceeded income every year since 2021.  Costs exceed income again in 2025.  This year’s deficit is larger than last year’s.

Social Security’s Old-Age & Survivors Insurance (OASI) Trust Fund – that’s the retirement fund – will be depleted by 2033.  

There are two additional points to make, both essential.  The first has to do with shifting demographics.  

When Social Security began there were 160 workers for each retirement recipient.  Today there are only 2.7 workers supporting each recipient.  That is nothing less then a fuse lit on intergenerational warfare.  The load the young bear supporting the aged only gets worse.  It is expected to fall to 2.3 workers per recipient in ten years.  That is because about 2.5 million more baby boomers retire each year.

Finally, Social Security, like Medicare and Medicaid, are benefits that people believe they have paid for, benefits they expect to receive.   We don’t know any other way to tell you this except directly.  THE MONEY YOU PAID IS GONE.  IT HAS BEEN SPENT.  That is why these items are called unfunded liabilities, money the government owes but resources for which are simply non-existent.  They don’t show up in the budget or in national debt figures.  

Congress spent the money to buy votes and to foment phony wars.  It is in our view nothing less than a crime.  Mark Twain was right when he said, ““Congress is the only distinctly native American criminal class.”

This is Part One of The Truth About Social Security.  In our next post, Part Two, we will tell you what to expect Washington do about it.  

Experts note changing global monetary role

It’s one of those headlines that sums everything up in a few lines.  This is from the Financial Times on 6/17/25:

We are certainly glad to see some of the international news media catching on.  Our only interest is seeing to it that our friends and clients get in early before everyone awakens at once and the price of gold races to the stratosphere.

The Financial Times news report details exactly what we have been describing in these blog posts: Central banks expect to keep on buying more gold, according to a survey of officials.  They expect the value of the dollar to continue to fall over the next five years.

All of that is completely foreseeable.  Central banks hold currency reserves for a number of reasons, including issuing their own currencies against the value of reserves that they hold.  There is little point in holding reserves in an asset of declining value.  Anyone who remembers the Biden administration should remember suffering the highest monetary inflation in more than forty years, inflation that touched double-digit rates in some venues and for some products.  That means the dollar was losing purchasing power fast.  And the world’s central banks know it.

Watching America’s ballooning debts, they want to be prepared for more of the same.

Here are a couple of key bullet points from the Financial Times report:

• Gold prices have surged 30 per cent since January and doubled in the past two years.

• Gold has now bypassed the euro to become the world’s second-largest reserve asset, behind only the US dollar.

• A record 95 per cent of respondents to a World Gold Council survey expect global central banks’ gold holdings to increase over the next 12 months, the highest level since the annual poll started in 2018.

• Meanwhile three-quarters of respondents expect central banks’ US dollar holdings to decline over the next five years.

It is notable as well that central banks continue to repatriate their gold rather than relying on foreign depositories like the Federal Reserve and the Bank of England for safekeeping.  This reflects distrust in the management of the largest monetary institutions.   We believe that distrust is justified.

As gold and silver authorities of long standing and with thousands of clients, our interest coincides with yours.  We believe you should take prudent steps to protect your family and your wealth with gold and silver.  As we’ve said, we hope to be able to help you before the global stampede to hard money breaks out.  Rather, we think you should do so now and leave the rest of the world to chase prices later.  

Ask knowledgeable people how high gold will go, and they’ll ask, “how low will the dollar go?”

That’s because the price of gold is the world’s referendum on the quantity and quality of the U.S. dollar.

The future of the dollar is the same as it has been for all debt-backed paper currencies throughout history.  They all go to zero eventually.  They spend more than they can afford, become buried in debt which they cannot pay.

Right now, interest on the national debt costs $2.6 billion a day.  It is the fastest growing part of the budget.

So here’s the referendum on the future of the dollar:

The U.S. dollar has lost 97 of its value since the Fed began making money out of thin air.  

Central banks around the world are buying gold at a record pace, more than a thousand tons a year for the last three years!

 And now the U.S. has lost its Triple A credit rating. 

You can count on gold as Washington’s spending and deficits grow and with each hike in the debt ceiling.

For protection and profit with gold and silver, talk to my friends at Republic Monetary Exchange.  Time tested around the world for thousands of years in crisis after crisis.    

A Look at Gold’s Purchasing Power

 We reported last month about the states that are passing laws to protect the people from the effects of Washington’s inflation.

In short, inflation destroys the purchasing power of a currency like the dollar.  As the government or central bank creates more and more dollars, they buy less and less.  The adjoining chart depicts this loss of dollar purchasing power with rising consumer prices over the decades.  

That is a leading reason to protect yourself with gold and silver.  It is protection from being defrauded by the monetary authorities.  Because they can’t print gold, its ability to protect your purchasing power is legendary.

Florida is among the states that now recognize gold and silver as legal tender.  This important measure passed both the Florida House and Senate unanimously and was signed into law by Governor DeSantis.  

At the bill signing, the legislation’s sponsor, Representative Doug Bankson, offered a powerful example of gold’s purchasing power.  

 “If you bought a home in 1979, the average cost was $75,000; those were the days,” said Rep. Bankson. “If you bought that same home, that same product, now it would be $531,000. However, if you had bought that in gold in 1979, it would’ve been 268 ounces. Today, if you bought that home, 268 ounces. Why? Because it’s a tangible thing that has true value.”

It’s a great example.  For decades people have described gold’s retention of purchasing power in relationship to a new gentleman’s suit which could be purchased for an ounce of gold a century ago.  Today an ounce of gold can buy you a beautiful bespoke suit.

Other examples of the purchasing power preservation of gold and silver during hyperinflations are worth remembering.

It is said that only a few years ago, during the Chavez/Maduro inflation in Venezuela, one could pay off a mortgage with an ounce of gold and feed a family for a month with an ounce of silver.

Here in the US, with already unpayable debt and unrestrained government spending, gold has a long way to climb.  What do we mean?

We mean that since 1980, gold is actually lagging the increase of the US money supply.  Gold is up 294 percent since then, but the US monetary base has grown by 3,578 percent.

In other words, as the effects of this monetary expansion become more widely known, and the trillions of already created fiat dollars in the Fed’s hand continue to work their way into the consumer economy, gold will have some catching up to do.

Learn more about purchasing power protection by speaking with a Republic Monetary Exchange gold and silver professional.  You’ll be glad you did!

. . . of silver no one ever yet possessed so much that he was forced to cry “enough.”
—Xenophon, “On Athens”Silver is moving!  

Silver is moving!
With Thursday’s breakout silver hit a 13-year high.

A week ago we posted a piece calling silver the double-play precious metal.  And right on cue it decided to prove us right.

Fred Hickey is one of our favorite market commentators.  Fred writes a newsletter called The High-Tech Strategist.  Obviously as a tech analyst he keeps an eye on the burgeoning digital and industrial demand for silver.  But he also has a rock-solid understanding of monetary issues, so with his double-play insight, let’s turn to him.  His view on X of the silver breakout this week is short and sweet:

“Looks like we (finally) have the long-awaited breakout in silver this morning. Buckle up. Silver breakouts to the upside typically are crazy (and relentless).”

Others on X posted comments like this:

“Congratulations silver stackers! Silver sets a new 13-year high.”

Another wrote, “Silver prices are now up +24% year-to-date and trading at their highest level since 2012.  Precious metals are incredibly hot.”

Robert Kiyosaki, the Rich Dad Poor Dad author, posted, “Silver hit $35 an ounce. I believe silver is the best bargain today. I believe silver will 2X…possibly $70 this year.”

Commentator Peter Schiff posted, “Not only is silver above $35, it’s about to take out $36, trading at its highest level since Dec. 2012. This train has left the station and there’s no stopping it!”

We remind our friends and clients that silver has a long way to go.  Spot silver rose to $50 and ounce in 1980, and again in 2011 and very nearly in 2012.

Because of decades of intervening US dollar inflation, for today’s silver price to equal its 1980 peak, the price would have to rise to more than $206 an ounce. 

As of Monday morning on 6/9, silver is still settled above $36 and looking to move some more.

Learn more about the profit opportunities in silver, the double-play precious metal.

(Because it can just print more money)

It wouldn’t surprise us to learn that even Federal Reserve officials are secretly buying gold!  That’s because in the face of unpayable US debt, establishment figures, left and right, are acknowledging that it’s all a game!

One hedge fund manager even called it “KAFAYBE!”  That’s a term from professional wrestling that means it’s all fake.

On CBS “Face the Nation” Sunday, Treasury Secretary Scott Bessent said what he had to say:  “The United States of America is never going to default. That is never going to happen, that we are on the warning track and we will never hit the wall.”

Of course the US won’t default!  It will just print the money.  

But even establishment voices are being raised.  Here are a few juicy takeaways from a Wall Street Journal story this week headlined, “Wall Street Is Sounding the Alarm on U.S. Debt. This Time, It’s Worth Listening.”

Hedge-fund manager Ray Dalio told Bloomberg he gives America “three years, give or take a year” to avert an economic “heart attack.”

Peter Orszag, chief executive of investment bank Lazard and a former budget director, wrote last week that he’s worried about the debt and deficits because the wolf is “lurking much closer to our door.”

If bond yields surge, JPMorgan chief Jamie Dimon warns, “You are going to see a crack in the bond market, OK?”

“It is going to happen,” he added.

Former International Monetary Fund chief economist Kenneth Rogoff, is quoted saying, “Almost every country default—either through outright default or high inflation—occurs long before debt calculus forces it to.”

And hedge-fund manager, Paul Tudor Jones just called it all “kayfabe.”

Annual interest on the national debt has already “blown past $1 trillion,” notes the story.  “Federal interest this fiscal year already will be more than the defense budget and more than Medicaid, disability insurance and food stamps combined.

The whole world is beginning to awaken to the money-printing kayfabe.  We don’t know if that includes Fed officials, but we wouldn’t be surprised.  But we certainly hope that you won’t be taken in.

The return to honest money can’t be stopped!

It only stands to reason that we would spend more time than others tracking movements in the return to an honest precious metals-based currency system.  It’s our job!

We want our friends and clients to profit from this epochal change in monetary dynamics.  Today there is more evidence that the movement is taking place even on the state level.

By now most of our readers are familiar with the stampede of the world’s central banks to shore up their reserves with gold – generally at the expense of their former US dollar holdings.  Dramatic evidence of this global gold rush is the world central banks’ purchase of a thousand tons of gold every year for the last three years.

That’s on the international level.  A similar movement is taking place at the grassroots level.  Individual US states are joining in on the move to precious metals, taking steps to regularize people’s use gold and silver in everyday commerce.  It is not a moment too soon we believe, as the value of the government’s fiat currency is due to suffer serious blows sooner rather than later.

Several states now statutorily recognize gold and silver as legal tender or are in the process of doing so.  Others are lining up to join them in order to protect their people from the effects of Washington’s inflation.  It is a movement that has solid Constitutional grounding:

Article 1, Section 10:  “No State shall… make any Thing but gold and silver Coin a Tender in Payment of Debts.”

Count on resistance from Washington by means of banking regulations, tax codes, and other legal challenges.  Afterall, inflation only works when the people are forced to use the depreciation currency.  Nobody will much care how much “money” the Federal Reserve prints if no one used their failing, dishonest currency.

Today eleven states have taken steps empowering their citizens to rely more easily on the wealth preserving capacity of precious metals.

In Arizona, with the passage of House Bill 2014, which was signed into law and took  effect in August 2017, US government issued gold and silver coins were formally recognized as legal tender and accordingly can be used as a medium of exchange for debts, public charges, taxes, and dues.   For private businesses their use is voluntary and can be specified in contract if the parties wish.  The law further provides that as money, rather than merely commodities, they are not subject to state capital gains taxes on income derived from their exchange.

In April, Florida joined the honest money movement, while Missouri followed in May, both with a law similar to that of Arizona, recognizing gold and silver coins as legal tender for the payment of debts and removing taxes on their exchange. 

Other states are lining up to join the movement away from depreciating fiat money. Beat the rush!  Benefit from this mega-trend by owning gold and silver now! 

Taking Risk Seriously!

The lights went out in Europe – Spain, Portugal, France, and Belgium.  It’s just one more wake up call.  

On Monday, April 28, Spain and Portugal experienced the brunt of a massive power outage. Spain lost about 60 percent of its electricity within about five seconds. 60 million people were without power.   And it happened only a week after Spain claimed to have achieved 100 percent renewable energy power.

Transportation was a disaster.  Traffic signals that didn’t work had people the roads and highways snarled up and people stuck.  Trains stopped, leaving passengers in the middle of nowhere.  Flights were grounded.  911 call centers didn’t work.  People were stuck in elevators.

Commerce died.  Banks, stock exchanges, grocery stores, all went down along with communications.  Forget digital payment systems.  If you didn’t have cash, you couldn’t get it from an ATM.

Explanations and speculation ran wild.  It was a rare cosmic event, said some.  It was a cyber-attack.  Maybe the weather was to blame.  

Actually it could have been any of those things: a solar flare phenomenon, a next generation terrorist attack, or even a freak weather event.  

It turned out to have been the result of idiotic policy choices, an over reliance on unreliable solar power.  

This is not the first time idiotic policy choices have caused widespread power loss.  Remember a few years ago when winter storms left millions of people in Texas without power, sometimes for days.  18 gigawatts of “renewable” energy sources were offline.  A big part of the problem: wind turbines that were inoperable because they were iced over.

All of our infrastructure is fragile.  Instead of America keeping its grid and transportation systems in first rate conditions, we have spent trillions of dollars on foreign wars, foreign aid, and paying for endless and unspeakable social demands for the rest of the world.  It has left us deeply in debt and trying to juggle our debts with money printing and selling bonds to an increasingly skeptical world.  At the first sign of a serious grid failure, digital money will find itself at a deep discount to real money, gold and silver.

Don’t overlook the risk of digital hacking.  The reality is that in an age of widespread identity theft and large-scape computers hacking, gold and silver are a preferred way to protect one’s privacy from the prying eyes of criminals.  The Office of the Controller of the Currency has found that many of the biggest U.S. banks are unprepared for cyberattacks and other serious operational risks.

What’ll you do when your bank doesn’t open?  When ATMs don’t work?

As our own infrastructure grows more fragile, you must take these failures seriously.  In a crisis you need money – real money, gold and silver – that is off the grid, that you can get to.  

Don’t be at risk of being blacked out!

Here’s a better idea- Gold!

81 percent of Americans think the government is corrupt.  Do you agree?

If you agree the government is corrupt, why would you trust the government’s money?

The U.S. dollar has lost 97 of its value since the creation of the Fed.  Why would you trust the government’s money?

The government promised you could always exchange dollars for gold.  It broke that promise.  Why would you trust the government’s money?

Let me put this another way.  If you realized that Charles Ponzi or Bernie Madoff were running scams and couldn’t pay back  their investors, would you leave your money with them? 

Well, the U.S. government has $36 trillion dollars in debt that it can’t pay back.  It has another $100 trillion in promises it has made to the people.  It certainly can’t pay for those promises.  Why would you trust the government’s money?

Informed people realize that they shouldn’t trust the government’s money for their future, their savings, their retirement hopes.

That’s why gold keeps moving up.  It can’t be printed.  It doesn’t default.  It isn’t dependent on empty promises.

That’s why the world is turning to gold, and why you should, too! 

Speak with the experienced professionals at Republic Monetary Exchange, Arizona’s premiere gold and silver dealer.  Learn more about gold and silver, the enduring money of the ages and how to use precious metals for profit and protection.  

Even establishment institutions are raising their gold price forecasts. Like UBS, Citi Bank, and Goldmann Sachs.

With other targets at $3,700 and $3,900, Goldman Sachs has a scenario that sees gold hitting $4,500 an ounce! This year! 

A Bloomberg Intelligence analyst sees recent price action is as the beginning of a larger move to $4,000.  

Even the old-line banks and brokers are start to realize that this is not just a cyclical bull market.  It is tectonic plates shifting in the post-World War II order.  It is the breakdown of the global financial system that we’ve been warning about.  

Goldman Sachs cites rising global uncertainty for its new higher outlook.  It also cites foreign central banks racing to gold.  They have purchased a thousand tons of gold a year for each of the last three years!

It could just as well cite Washington’s unpayable debt.

Or it could point out that the bond market is getting yippy.

One Fed governor has even revived the term “transitory” for the coming tariff inflation.  Better to have retired that word!

Nomi Prins, author and former Goldman Sachs managing director expects gold to reach $3,800–$4,000 per ounce by the turn of the year and $5,000 within two years.

If confidence in the dollar takes a hit – as we suspect is now inevitable – all of these establishment forecast will prove to be worthless.  The primary reason to cite them is to demonstrate that even establishment institutions are beginning to recognize that gold is the gold to investment in a crisis.

Gold is more than just a safe haven.  It’s the world’s time-tested way to accumulate lasting assets.

Gold is essential to your investment survival, too.  Find out why.

Speak with a knowledgeable gold and silver professional at Republic Monetary Exchange for time-tested advice on preparing for the rapidly developing breakdown of the global financial system.  

The Dollar’s Safe Haven Status at Risk!

We read it in The Telegraph headline:  Trump’s tariff blitz has put America’s safe haven status at risk.

We knew it would come to this.  We knew it was headed our way.  Only when didn’t know exactly when it would arrive, and we don’t know exactly how it will unfold.  We only know that it looks like this.

The US dollar is losing its global go-to, safe haven status.

Evidence?  World central banks have purchased a thousand tons of gold every year for the last three years.  It’s hard to miss evidence like that!

Global reserve currencies don’t last forever.

If the US dollar is no longer a safe haven currency for the rest of the world, what is?  It’s not the euro.  The European Union itself is fraying.  And it is not China’s yuan.  China’s financial troubles are deeper than are widely reported.

Then the remaining safe haven currency must be gold.  

Bloomberg News:

Demand for gold is strengthening, with investors seeking safety as a new trade war unfolds between the world’s top two economies. The precious metal could reach $4,000 an ounce next year — about 25% above current levels — amid a wave of purchasing by central banks and recession risks, according to Goldman Sachs Group Inc.

It is impossible to maintain a world reserve currency in a currency the world no longer trusts.  In the beginning, trust in the dollar relied on the assurance that the dollar was backed by gold.  Anyone with a $20 dollar bill could exchange it for a $20 gold piece.  Or take $200,000 in US paper money and exchange it for 10,000 $20 dollar gold coins.

That convertibility was so trusted that people around the world said that the dollar was as good as gold.  But it didn’t stay that way.  In 1971 the convertibility of the dollar to gold became a thing of the past.

Now even the paper dollar isn’t safe.  It has become a weapon  of US foreign policy, which means the dollar accounts can be frozen and rendered unusable.  Ask Russia.

China is worried about its dollar holdings now, too.  It has been sharply reducing its holdings of US Treasury bonds for a few years.  But now, with the Trump trade war, it appears to be dumping dollars in an act of self-protection at an accelerating pace.  An analyst at Mizuho Group, one of Japan’s largest financial institutions, has expressed a “high degree of confidence” that China is selling.  Japan has raised the prospect of selling its US bonds as a weapond it the trade war as well.

A currency loses trust when its government becomes financially unsound.  The US is financially unsound.  It is the world’s largest debtor and must devalue the dollar to nominally pay its bills.  This devaluation is inevitable.  Other currencies of equally poorly managed and indebted countries are no substitute.  The only reliable alternative in today’s world is gold.

To learn more about the unfolding of the global monetary system and how to protect yourself, speak with a Republic Monetary Exchange gold and silver professional today.

In Part I of this post, we have tried to make the case that governments simply cannot be trusted to manage monetary affairs reliably.  We believe that a dawning awareness of the dangers involved is the reason so much gold is suddenly in motion around the world.

Or one more example.  In the lates 1970s, the US Treasury auctioned of 16.7 million ounces of gold, gold it had stolen from the people in 1933.  

At the same time that the Treasury was auctioning off the people’s gold, the International Monetary Fund auctioned off 25 million ounces of gold.  The IMF is not a business or a real bank.  It doesn’t earn money.  So where did it get all its gold, 153 million ounces?  It got somewhere between 25 and 30 million ounces from the US.  The American people’s gold.  Washington gave it to that multi-national bureaucracy, the IMF! 

What a waste of your wealth.

To top it all off, the US Treasury and the IMF structured those gold auctions not to realize the most return for the people’s gold.  Quite the opposite.  They structured the auctions so that all the gold would be sold at the lowest successful bid price.

If you think that is perverse, we think you are right.  We think it is criminally negligent stewardship of the people’s wealth.

The British government did the same thing even more recently.  Between 1999 and 2002, Chancellor of the Exchequer Gordon Brown (he later became Prime Minister) auctioned off half of the UK’s gold holdings.  

Like the US and IMF auctions, it was a so-called Dutch auction, designed to give preference to low bidders, to sell the gold at the lowest successful bid price.  

Brown sold 12.7 million troy ounces of gold over 17 auctions at an average price of around $275 per troy ounce.  Basically, he sold the British people’s gold in pursuance of some madcap monetary scheme at the bottom of the market.

We conclude from the long sweep of history that governments cannot be expected to manage monetary policy and currencies in the best interest of the people, neither wisely nor honestly.  That is why in time of unpayable debt and of obvious chaos developing in the global monetary system, the best thing you can do is get out of the way.  

Move to gold. Gold that you own and take into your possession.  It is not the liability of anyone or dependent on the management of any government.  The move has become imperative with worldwide financial and monetary storms raging!

If you would like to know more, speak with a Republic Monetary Exchange gold and silver professional.  Call today for an appointment.

Robert Kiyosaki: “Silver will 2x this year to at least $70 an ounce”

The millions of people who follow Rich Dad Poor Dad’s Robert Kiyosaki may have seen this message on his X account:

SILVER set to boom.  Hottest investment today is silver.  Much more demand than supply…. 

I predict silver will 2X this year to at least $70 an ounce.

Although Robert already owns a lot of silver, he even mentioned to his followers that he bought more from “Jim Clark of Republic Monetary Exchange.”  

Robert points to the increasing demand for silver in solar panels, electric vehicles, computer applications, weapon systems, medicine and other vital applications.  

His message reads, “I strongly believe the price of silver will ‘sling shot’ to all time new highs…. possibly 2X to $70 an ounce in 2025.”

The author of the bestselling investment book in history also points to silver’s affordability, saying, “Almost everyone can afford to get richer and richer one silver coin at a time.

“I’d rather save silver… than save fake paper money.”

We agree.  At the recent price of just over $30, silver is far below its all-time highs of $50 an ounce, highs reached in 1980, 2011, and 2012. 

Call or stop by to speak with a Republic Monetary Exchange gold and silver professional to learn about the latest opportunities to protect your wealth and profit with precious metals.

A Dispatch from the War on Cash!

The war on cash is an extension of the war on gold.  Enemies of your autonomy and financial privacy have made the elimination of cash a priority.  Now one of the battleground countries in that war may be waving a white flag!

Sweden is having second thoughts.  A leader in the war on cash, only one in ten purchases is Sweden is today made with cash.  But in a world that seems on the edge of war and other crises, Swedish officials are start to see the advantages of cash for “safety and accessibility.”  

The Swedish central bank now says, “Measures need to be taken to strengthen preparedness and reduce exclusion so that everyone can pay, even in the event of crisis or war.”   The defense ministry has flooded the country with a brochure called If Crisis or War Comes.  It urges “preparedness,” and urges people to use and keep a supply of cash.

Whatever the virtues of cash are compared to central bank digital currencies, the advantages of gold are much greater.

The US government has been at war with cash for some time.  For example, it imposes burdensome and often quite ridiculous restraint on the use of cash, including needless reporting requirements and even a presumption that cash transactions are necessarily indicative of criminal behavior.

The total surveillance ambitions of the Deep State have been focused on eliminating cash for the same reason it opposes gold: both be used anonymously.  That is a challenge to their imposition of China-like social credit control systems in which your ability to buy and sell, travel, and own property can be turned off by the flip of a digital switch to penalize independence of thought.  Speak out?  Your access to banking is over.  Challenge authority?  You can be forbidden from boarding a train or plane, from owning property, from access to courts.  Along the way you can be fined or have your wealth stripped away from you unilaterally and without appeal. 

Don’t overlook the risk of digital hacking or grid failure, as well.  The reality is that in an age of widespread identity theft and large-scape computers hacking, cash may be a preferred way to protect one’s privacy from the prying eyes of criminals.

Bear in mind that the war on cash is only a harbinger of the State’s war on your financial freedom.  It is an important advance warning.  Nevertheless, cash is not as safe as gold.  Currency call-ins along with cash with expiration dates are among the hazards of owning cash.  Much better for the privacy advantages that are even superior to thoss of cash, but with additional freedom from state manipulation and wealth preservation, is gold.

To learn more about why gold keeps setting new highs and about the long historical record of gold in times of crisis, speak with a Republic Monetary Exchange gold and silver professional.  Ask about a sensible plan to protect yourself and your family with the superior performance of gold and silver.

There is nothing like gold for privacy!

We have warned from time to time that Central Bank Digital Currencies pose an almost unprecedented threat to your freedom.  Now the head of the European Central Bank, Christine Lagarde, says the digital euro will arrive in October.

A European CBDC is a stalking horse for a Federal Reserve digital currency.

Your financial privacy will evaporate when the State introduces a CBDC.   You will be subjected to State control in everything you do.  CBDCs enable the State to track every transaction, block payments at will, unilaterally deduct taxes and fines at will, and even force you to spend by implementing expiration dates on the currency.  CBDCs are the perfect tool for total State control of your life.  

Gold, on the other hand, is without equal, the sine qua non, of financial privacy!

Here’s are just a few observations from people who are watching and warning about the approach of CBDCs.

Chris Martenson, economic researcher:  “If you have anything you’d like to say or protest, now’s the time, because later ‘your’ money won’t work unless you submit to the totalitarian ideologies.”

Daniel Lacalle, economist and fund manager:  “In the European Union, where limits to freedom of expression and the cancellation of elections are already a concern, a CBDC can be seen as surveillance masquerading as currency.

“CBDCs are not just digital versions of existing currencies; they are issued directly to accounts held at central banks, allowing for unprecedented oversight of financial transactions. This direct issuance means that central banks can monitor every transaction, including spending habits, savings, and borrowing activities. We can compare this system to having a police officer in your kitchen, underscoring the intrusive nature of digital currency.”

Wayne Lusvardi is a water and energy policy analyst:  “Americans are not aware that we are on the verge of the elimination of a transactional economy based on two-party free market exchanges (using cash and checks) to be replaced by all-digitized crypto script that will allow a third-party into all transactions in the U.S. –the Bank of International Settlements — through its largest “stakeholder” the New York Federal Reserve Bank.  What this means is that money as free market currency will die and be replaced with an electronic totalitarian system of controlled transactions by central banks. 

“Central bank digital currencies are coming.  Central bankers can hardly wait.  Lacalle describes them as “surveillance disguised as money.”

Find out about threats to your financial privacy and well-being by visiting with a gold and silver professional at Republic Monetary Exchange.  You can protect yourself and profit with precious metals.

By now, just about everyone we know has learned to view the mainstream press through skeptical side eyes.  So, today’s message is very short.

Here’s the front page of the financial section of the Wall Street Journal two and a half years ago.  Gold was $1,678 at the time that “the world’s leading business publication” announced that the undisputed preferred money of the ages and around the world had somehow managed to lose it’s safe haven status.

As we write this, gold is quoted at $3,019.  In other words gold is up 79 percent in 30 months.  Pretty good for an investment that has lost its safe haven status.

Meanwhile, the stock market is, in the Journal’s word, a “mess.”  As for the bond market, the ten-year US treasury yield is up more than 200 basis points since the article was published.  Ouch!

If you’re not skeptical enough about the financial press consider this:  When gold was only $1,150 an ounce in 2015, someone wrote disparagingly in the Wall Street Journal that gold was nothing by a “a pet rock.”

Gold investors have had a good laugh about that ever since!

President Trump’s 25 percent tariffs on goods from Mexico and Canada might or might not be in effect soon.  As we write this, tariffs are on hold for goods that are covered by the North American trade agreement.  If and when a general tariff kicks in, Canada has promised to retaliate with 25 percent tariffs on $100 billion worth of US imports. Mexico is will likely to do the same.  

Trump also introduced an additional 10 percent tariff on Chinese imports just days ago, bringing the total tax to 20 percent following a similar increase last month. China swiftly retaliated with tariffs on US food and agricultural products and an export ban on some defense firms. 

According to the Peterson Institute for International Economics, calculating the full Trump tariff proposal, “the direct cost of these actions to the typical, or median, US household would be a tax increase of more than $1,200 a year.”

Treasury secretary Scott Bessant minimizes the impact of the tariffs over time, saying that price hikes will be offset by cuts in regulation and cheaper energy.

Warren Buffet disagrees about the impact of tariffs.  “We’ve had a lot of experience with them. They’re an act of war, to some degree,” he says.

We want to be sure our friends and readers make the distinction between inflation, which is the result of increasing the supply of money and credit, and simple price increases which are often called inflation.  If freezing conditions slam citrus growers this winter, the prices of oranges will rise.  But that is not inflation; it is just a rising price. Tariffs are price increases across many goods, but are not the result of money printing.  Even so, you will still want to protect yourself from lost purchasing power.  Many will turn to gold and silver right away, while others will follow.

With that said, and as others argue back and forth about who pays the costs of tariffs, we thought we should offer a couple of simple examples that add clarity to the discussion.  Let us imagine a farmer in Mexico who regularly sells a crate of his products to a family across the border in Arizona.  To make our example easy to understand, we will leave out middlemen like truckers, distributers, and grocers.

BASELINE  – Before Tariffs

In their long-established custom, we imagine the farmer sells a crate of produce to the family for $100.   It is a straightforward and regular transaction.  The government gets nothing.

EXAMPLE 1 – Trump’s 25 Percent Tariff

When the new tariff takes effect, to maintain his same income, the farmer will have to charge the family $125 dollars.  The government takes $25 of that, while the farmer would still get his accustomed $100.  But the family has just seen the cost of these groceries climb by 25 percent.

That is a pretty steep increase.  What will they do?  Will they pay it without complaint? Will they buy less?  Look for substitute foods or a lower cost producer?

EXAMPLE 2 – The Farmer Pays

The farmer doesn’t want to lose his long-time buyer.  Maybe he thinks he can absorb the cost of the tariff himself, at least for a while.  So, the farmer cuts his price for the crate of goods by 20 percent.  Now he charges $80 dollars, to which the government adds on 25 percent.  The final price to the family is the same, $100, leaving the farmer worse off by $20.  The government gets that $20.

EXAMPLE 3 – Splitting the Difference

If the farmer can’t absorb the full loss of income, perhaps he will try to split the difference with the buying family.  He agrees to charge just $90.  The tariff adds 25 percent  or $22.50 to the transaction, so the family now must pay $112.50.  In this case, the farmer is worse off than before the tariffs arrived on the scene.  The family is worse off, too.  But the government is making out on this deal. 

We offer these examples to settle the ongoing argument of who pays for the tariffs, the producers or the buyers?  The only honest answer is no one can say.  In a complex economy of a myriad of producers of competing products and millions of buyers, there are countless individual decisions to be made.  They are never made uniformly, and today’s decisions may change tomorrow.  

What we can tell you is that in two out of our three examples, once the tariffs begin, the family, the consumers, will see prices rising.   Unless sellers can absorb the entire cost of the tariff which is simply not always possible (Example 2), consumers will be worse off.  Their dollars, their earnings and savings will buy less. The Consumer Price Index will rise.  The government will have more money.  People will have less money.

“Over time,” says Warren Buffett, “[tariffs] are a tax on goods. I mean, the tooth fairy doesn’t pay ’em!”  

In such instances, when the consumer’s dollar doesn’t go as far and the CPI rises, they begin to look for proven, reliable alternatives.  Like gold and silver.

We hope that helps.

The Worldwide Turn to Gold Continues!

If you are adding gold to your profit and protection portfolio, you are in good company!

The price of gold hit new highs in February in all the world’s major currencies, according to the World Gold Council, a London-based industry trade association.

The cross-currency performance is important to note, so that the bull market is not incorrectly attributed just to the US dollar market.  The dollar has been in decline for most of the year.

The WGC shares our repeated warning about the re-inflation in the pipeline now and the return of stagflation.  It finds that “there are several factors that could reinstate the thorny problem of higher inflation, especially at a time when deteriorating economic conditions may necessitate interest rates staying low. The US economy is likely in ‘stagflation’ and consumers appear to see it that way.” 

The WGC’s assessment of risk and reward in today’s gold price comes down heavily on the side of “reward.”

• The “Trump trade” – stronger dollar and US stocks – has taken a back seat amidst concerns about tariffs and hawkish foreign policies, conditions that will likely remain.
  
• As governments look to increase military spending, budgets deficits are likely to increase and credit ratings to fall.
  
• At the same time, despite inflationary pressures, markets expect a more dovish Fed, pricing in at least two full rate cuts by the end of the year.
  
• These factors combined are creating a particularly supportive environment for gold.

To learn more about the prospects for gold in our rapidly changing global environment, speak with a Republic Monetary Exchange gold and silver professional today.  He can help you create a portfolio designed to protect your family and your wealth. 

The Worst of Both Worlds!

Is the Stagflation Train pulling into the station?  Bringing both inflation and a depressingly stagnant slow growth or shrinking economy with it?

If you listen carefully, you can hear its whistle blowing.  It’s coming around the bend!

The Stagflation Train brings carloads of economic misery, but at the same time as we know from experience, we can protect ourselves from stagflation and profit with gold!  

Bigly!

Stagflation has two components, inflation and stagnation.  Rising prices in slow or no growth economy means the cost of living goes up, but the opportunities to make money go down.  And that is a bad combination!

The inflation case is quite simple, and we have been made it often recently.  We are already experiencing re-inflation.  The highest inflation in 40 years that we experienced during Biden’s term never really went away.  The Consumer Price Index for January has climbed for the fourth straight month.  The month over month numbers, increase for the same period one year earlier have risen for the seventh straight month.  

What is the evidence of the stagnation part of stagflation?   With this headline, “US Economic Growth Falls Back Below Average,” the Wall Street Journal just reported that falling activity in production, personal consumption, and housing are to blame for weaker activity in 2025.

There is much more.  More and more commercial real estate loans for offices and apartments are in distress.  Housing sales are down as is consumer spending. Consumer confidence is tanking.  Consumer credit card delinquencies have risen to a 13-year high.

Here’s one more indicator of trouble ahead for the stock market and the economy as a whole.  It’s one we note seriously.  America’s favorite stock picker, Warren Buffett of Berkshire Hathaway can’t find much worth buying.  He’s stockpiling cash, $334 billion, to weather the storm.  That is up $100 billion since the pandemic.  Berkshire sold a net $6.7 billion in the fourth quarter.

A brand-new stagflation decade will mean a gold and silver bull market that will be much bigger than the one your grandparents remember.  

So here is what actually happened in the last Stagflation Decade.  In the period from 1970 through 1979, the Dow Industrials rose 11.5 percent. 

Silver climbed 1,699 percent.

Gold was up 1,820 percent.  

Speak with your Republic Monetary Exchange professional advisor about stagflation.  Prepare yourself now without delay.

The Inflation outlook… Grim!

Our adjoining post this week STAGFLATION HERE AND NOW? focuses mostly on evidence of the slowing US economy.  That is the stagnation part of stagflation.  Now we look a little more closely at the inflation component of stagflation.

Let’s start here.  The Consumer Price Index has been higher than the Federal Reserve’s entirely arbitrary two percent target for 16 consecutive quarters, for 47 months in a row!  From the first quarter of 2021 until now, the Fed has been unable to reach its own inflation target.

Meanwhile… lingering, prolonged inflation has now turned into reinflation.  As we have noted, the Consumer Price Index for January has climbed for the fourth straight month.  The month over month numbers, increase for the same period one year earlier have risen for the seventh straight month.  

Reporting that inflation is moving up again, Bloomberg News writes that, “No matter what metric you’re looking at, US inflation is moving in the wrong direction again.”

Americans are convinced reinflation is real.

Here is some of the evidence that they are right from Bloomberg:

• Costs of materials like lumber and steel have been high for several years coming out of the pandemic and are moving up even more. A measure of input prices for manufacturers this month reached the highest since October 2022, according to S&P Global.
  
• Businesses surveyed by the Dallas Fed in February reported that an index of prices for raw materials doubled to the highest since September 2022….
  
• Groceries have come back into the spotlight again largely because of record-high egg prices, due to the worst-ever bird flu outbreak in the US. 
  
• Persistent price increases in areas like food, as well as other big expenses like housing, healthcare and car insurance, are hindering progress on broader inflation.

Gold’s remarkable rise of about 11 percent in just the first two months of this year, combined with its stellar performance last year has triggered Wall Street speculators take some quick profits.  The resulting pullback in prices provides you an opportunity to build your profit and protection gold holdings at more favorable prices.  To learn more and to take advantage of what may be a fleeting opportunity, speak with an RME gold and silver professional today.

We Ask: Higher Than Expected by Whom?

One headline blared:  “Inflation comes in hot!”  

We have been urging our clients and friends for several months to expect re-inflation.   Inflation never went away and now it just keeps climbing.  The January CPI is the fourth straight monthly increase and the seventh straight month over month increase from the prior year.  Both the “headline” CPI and “core” CPI were up.

This latest report is for January, and as Trump duly noted, reflects Biden numbers.  Bear in mind that they do not yet reflect higher prices from Trump’s China tariffs and others to come.

Producer price increases in January were hot as well, climbing to a level not seen in two years, giving us a peek at prices in the pipeline headed toward consumers.

While we’re at it, we should give you the equally bad – if not worse news – about our fiscal situation.

The fiscal year 2025 began on October 1, so we now have four months or one-third of the year under our belt.  During those four months, the deficit hit $840 billion.

In the same period, interest on the national debt was $392 billion; for the 12 months interest of the debt amounted to $1.167 trillion. In the month of January a year ago, Washington spent $500 billion.  Somehow spending shot up 29 percent this January to $642 billion! 

It is self-evident that this cannot go on.  We are not shocked, although we should be, at the way much of Washington is resisting the discovery by DOGE that the budget is stuffed with billions of dollars of illicit spending, with concealed cronyism bleeding the people dry.   

It is a sign that much of officialdom doesn’t care about the survival of the Republic.  They are too busy stealing everything they can get their hands on.  And their collaborators in the media portray the people who are catching the thievery in action as villains.

How does this end?  The Fed is powerless to control interest rates, which will continue to rise to reflect not just inflation, but the uncontrollable debt.  But there is always the printing press to devalue the dollar at an increasing rate.  

We’ve seen this drama before.  It has played out hundreds of times and in hundreds of places.  You can’t stop it, but you can protect yourself with the enduring money of the ages:  gold and silver.

As we like to say, they can’t print gold!

“Gold is going to continue to rise!”

“You’ll see gold double, triple, and quadruple if we don’t do the right thing. Those who want to cut spending and tie it into monetary policy have a very important job,” said Dr. Ron Paul in a recent interview. 

And soon Ron Paul may have a very important job!

After a long congressional career as gold expert and Washington’s leading voice for sound money, liberty and prosperity, Dr. Paul may finally see the Federal Reserve subjected to an audit – and may serve as the audit’s chairman! 

 At least Elon Musk, the head of President Trump’s Department of Government Efficiency, thinks that would be a very good idea.

And what an appropriate appointment for Ron Paul, who year after year tried to get Congress to pass an Audit the Fed measure.  So great was the demand to have the Fed audited that when Paul ran for President, he was met on college campuses by thousands of students chanting “End the Fed!  End the Fed!”

That popularity moved 270 congressmen to sign on as co-sponsors of Paul’s Audit the Fed measure in 2012.    Yet such is the power of the Fed, that on the vote for final passage, eight House Democrats who co-sponsored the bill voted against it.

“All aspects of the government must be fully transparent and accountable to the people. No exceptions, including, if not especially, the Federal Reserve,” Musk said in a recent post on X.

In other recent posts, Musk was asked if Ron Paul should head the Fed audit.  “That would be great!” he replied.   Another post asked who would like to see Ron Paul as the Federal Reserve Chairman, to which Musk replied, “That would be awesome.”

The Federal Reserve has desperately resisted an audit. It doesn’t want the American people to learn the inside story of its destruction of their wealth, in their name and with their currency.  For example, Senator Bernie Sanders wrote that a 2011 Government Accounting Office inquiry found that the Fed:

… provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression…The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo.  The same firms also received trillions of dollars in Fed loans at near-zero interest rates. Altogether some two-thirds of the contracts that the Fed awarded to manage its emergency lending programs were no-bid contracts. Morgan Stanley was given the largest no-bid contract worth $108.4 million to help manage the Fed bailout of AIG.

 An audit of the Fed would be a blockbuster revelation.  It will have Americans demanding a return to gold.

Meanwhile, Dr. Paul points out that, “In the last year, there was an explosion of interest in gold. Gold is going to continue to [rise]. When gold exploded in the 1970s, it went from $35 up to $800.”

Who is going to dominate global affairs in the future?

As we have said on ample precent many times, nations that are net acquirers of gold rise in the affairs of the world. 

Nations that are net dishoarders sink. 

Some people think that rising nations become acquirers of gold because they are prosperous. But they become prosperous because of sound economic views.

Disbelievers of gold grow poorer because they don’t have absurd economic views like these:

• We can print our way to prosperity.
• Our national debt is not a problem because we owe it to ourselves.
• A nation that prints its own money can afford whatever it needs. 

Those absurd views and variations on, them have been heard in the schools, in the marbled halls of power, and in the lapdog press in America for generations.

With that thought in mind, you might note that while the US government has tried to make gold ownership difficult for almost a century, we should look at which nation(s) place a priority on gold.  It is there we are likely to see the emergence of the future of global dynamics.

With that in mind, here are just a few stories that popped up as we sat down to write this note.

• The People’s Bank of China has reported a 5 tonne increase to its gold reserves in January – the third consecutive month its gold holdings have risen according to the data. Last month’s purchase helped lift gold reserves to 2,285 tonnes.
• China discovered gold deposit worth over US$80 billion
• Bloomberg:  China’s Central Bank Buys More Gold as Prices Hit Record
• China will allow insurance funds to buy gold for medium and long-term asset allocations as part of a pilot project, the country’s financial regulator said on Friday.

And while China is aggressively adding to its gold holdings, we can report that it is doing as part because of an almost subterranean flow of gold from the West to the East.  

For days, gold has been withdrawn from the Bank of England.  It is leaving London in this case to beat the threat of tariffs by the US.  If it is abandoning one of the most important gold trading centers for centuries in the West, at least in this case it is going to the US.  For now.  Here’s the CNN headline:

The world’s second-largest gold storage suddenly has very long lines to withdraw bars.

If you’d like to go with the flow of history, speak to us a Republic Monetary Exchange about adding gold to your investment portfolio.

Gold keeps hitting new record highs!  It’s evidence of serious turmoil.

Gold is a sensitive indicator of trouble.  Sometimes the price of gold starts moving before the actual evidence of trouble becomes clear.  

But then the dust settles!

Foreign central banks loading up, gold shortages, currency wars, and overseas exchanges scrambling to get their hands on more gold, along with one new high after another… these are important signs that changes are underway.  They are wake up calls!    

In the US buyers are wondering about eventual tariff pressures, so gold is being delivered to the US from both Europe and Asia.  435 tons of gold has been recalled from London to New York.  That is $82 billion of gold moving to the US where many buyers are taking physical delivery on futures contracts.  

Delivery bottlenecks are widely reported.  A Dubai-based bullion dealer told Reuters,
“The U.S. is like a gold magnet right now, pulling in gold from all over the world.” 

These are classic signs of a short squeeze.  Shorts, speculators who have taken a market position betting on lower prices, eventually have to pay higher and higher prices to deliver the metals they have borrowed. A short squeeze is a market development that can drive prices to stratospheric heights.   

Signs are beginning to appear that a short squeeze is in development in the silver market as well.  There are signs of stress in a leading silver Exchange Traded Fund (ETF).

The Silver Academy, a Substack letter, reports, “The silver market is experiencing unprecedented turmoil, with recent developments in the iShares Silver Trust (SLV) ETF painting a picture of extreme market stress.”

The letter describes a volatile imbalance in the SLV options market: “With 4.7 million shares potentially needing to be delivered and a mere 10,000 available to borrow, the imbalance is profound. This situation could force short sellers into a corner, potentially triggering a significant short squeeze and driving silver prices higher.”

We continually advise people to avoid needless risk and to own real, tangible gold and silver rather than ETFs and other paper representations found in gold and silver market.  

Remember that unlike paper representations of gold and silver, physical gold that you can hold in your hands is not anyone else’s liability.

In times of turmoil, you will want…  you will need to own precious metals!  And with all the signs of possible short squeeze that can drive prices to stunning new heights, now is the time to protect yourself and profit with physical gold and silver.  That is the safety zone!  

Call, make an appointment, or stop by today.  Republic Monetary Exchange in Phoenix, on Camelback just east of 40^th Street.   Just a phone call away at 602-682-GOLD.

Here is What the World Gold Council Says!

“Gold is a highly liquid asset, which is no one’s liability, carries no credit risk, and is scarce, historically preserving its value over time. It also benefits from diverse sources of demand: as an investment, a reserve asset, gold jewelry, and a technology component.”

That is a short description of gold’s leading financial attributes according the World Gold Council, and international gold industry trade association. 

Here are some of the key takeaways from its just released report Gold as a strategic asset: 2025 edition:

A long-term source of return
Gold is, on the one hand, often used as an investment to protect and enhance wealth over the long term, but on the other hand it is also a consumer good, via jewelry and technology demand. During periods of economic uncertainty, it is the counter-cyclical investment demand that drives the gold price up. During periods of economic expansion, the pro-cyclical consumer demand supports its performance.

Diversification that works
[During the Global Financial Crisis 2008-9] equities and other risk assets tumbled in value, as did hedge funds, real estate and most commodities, which were long deemed portfolio diversifiers. Gold, by contrast, held its own and increased in price, rising 21% in US dollars from December 2007 to February 2009. And in the most recent sharp equity market pullbacks of 2020 and 2022, gold’s performance remained positive.

A deep and liquid market
The gold market is large, global, and highly liquid. We estimate that physical gold holdings by investors and central banks are worth approximately US$5.1tn, with an additional US$1.0tn in open interest through derivatives traded on exchanges or the over-the- counter (OTC) market.

The gold market is also more liquid than several major financial markets, including euro/yen and the Dow Jones Industrial Average, while trading volumes are similar to those of US T-Bills.

Return, diversification, and liquidity.  For investors in today’s demanding and inflationary environment, those qualities are pure gold.

For portfolio protection or just to have gold and silver off the grid for time of uncertainty, contact Republic Monetary Exchange Phoenix today.  

How high will gold go in the next four years?

The price of gold has risen under every US presidency since 2000.

This graphic from Visual Capitalist reflects the gold price action from 1989 until August 2024 using World Gold Council benchmark prices.  That month gold broke above $2,500 for the first time ever.  To update the figures, when President Biden was packing up to leave the White House on Friday, January 17, the price of gold was $2.715.  

Using WGC benchmarks, the chart reflects gold having risen by 53 percent in Donald Trump’s first term, rising from $1,208 to $1,841 in the four years.

A similar increase during his new term would carry gold to about $4,153. 

Gold’s biggest moves in this century have come during Republican presidencies.  There are several reasons for this.  In Democratic administrations, congressional Republicans will occasionally – although not too reliably – muster some opposition to the growth of taxing and spending.  Or as Grover Norquist observed, “”the only reason for Republicans to exist is to stop new taxes.”  Republican opposition to fiscal recklessness seems to mysteriously fade away in a Republican administration.

But of course, the picture is vastly more complicated and depends on monetary policy and well as fiscal policy.  Check back with us often here at the Republic Monetary Exchange blog for more about both monetary and fiscal policy in the months and years ahead.  

Gold a shade under $4,000?  Silver at $51, a new all-time high?

We don’t publish a lot of predictions for future gold and silver prices.  We do know what happens to unbacked paper or fiat money: it eventually goes to nothing.  The US has gone a long way down that road already.  

That means the price of gold and silver eventually goes “to infinity and beyond,” since the paper money that they are quoted in becomes worthless.

Market veteran Chris Weber of the Weber Report was called to our attention this week.  He points out that our old friend and market legend Jim Rogers is selling all his stocks.  And what is Jim buying?

Silver.

At the same time, President Trump’s designated Treasury Secretary Scott Bessent (who came up in the market business under Rogers) names gold as his number one position going forward.

But here is some speculation from the first couple of weeks of the new year by Weber:

Silver started this short year with a bang. It was up over 6% from end-2024 until profit taking set in. This has cut the gain in half. But if it only continues to rise by 3% every two weeks, then 2025 will see silver soar by over 77%, and end the year at over $51, a new nominal record.

Silver has outpaced gold so far this year, as we thought it would. Gold is up ‘only’ 1.7%.  Still, if gold does this every two weeks for the rest of the year, it will end the year at $3,797.20, up by 44.6% to a shade under $4,000.

Weber notes the important silver supply/demand fundamentals.  “One big reason I’ve been so bullish on silver is that for many years now, the new supply has lagged demand. I’ve never seen a situation like that. There have been allegations of large short positions keeping silver down. But this cannot last forever. It is like a coiled spring that can only be pushed down so far and for so long. At some point, my view is that silver will explode. In real terms, silver is extremely cheap.”

We’ll close with Weber’s general predictions for 2025.  There are only a few:

• 1.Silver will be higher a year from today. 
• 2.Silver will outperform gold. 
• 3.Interest rates will also be higher. (The 30-year yield is now 4.786%.) 
• 4.Stock Indexes will be lower.

Those are safe and reasonable observations.  We will just note that if there is a crisis – something that is very likely – all bets are off and gold and silver prices will rocket to levels that are unexpected by most people.

“I want to just obey the Constitution.  The Constitution says only gold and silver can be legal tender.” – Ron Paul

He’s an icon of the sound money movement, the former Congressman who knows more about gold and money than others in Washington, and the elected official who tried valiantly year after year to have the Federal Reserve System audited.

Now Dr. Paul offers up some advice for the year 2025.  

He advises Congress to act responsibly and pass a budget in a Constitutional manner.  “Return to the normal legislative process and pass individual, clean appropriations bills with open rules that allow maximum participation from each Member or Senator.”

“Then spend the rest of the year renaming post offices, if you want. The American people will thank you for it.”

With major sections of Los Angeles still fighting fires that have claimed the homes of thousands and 12,000 Americans in North Carolina still living in tents four months after Hurricane Helene swept through, Congressman Paul points out that billions of dollars have been stolen by a corrupt regime in Ukraine, while Congress refused to demand monitoring of the money sent to the Zelensky regime. “Americans are rightly furious that President Biden has sent as much as $200 billion to fund Ukraine’s futile war with Russia, but where did Biden get that money? From Congress.”

“So why are we draining the US treasury and draining the population of Ukraine for a lost cause?” he asks.

Ron Paul also warns about a major economic crisis.  “The Federal Reserve should resolve to stop enabling excessive federal spending by purchasing Treasury bonds, thus monetizing the federal debt. The Federal Reserve’s monetization of federal debt enables the federal government to amass trillions in debt while running a global empire abroad and a welfare state at home.”

“The American people feel the effects of the Fed’s debt monetization in the form of the regressive inflation tax.”

Dr. Paul would also like to see the media straighten up.  “The media should resolve to stop gaslighting the American people with misinformation. For example, the media should stop repeating the lie that a failure to raise the debt ceiling will lead to a government default on its debts. The truth is a refusal to raise the debt ceiling would force Congress to reduce present and future spending — just like most people do when they find themselves in debt.”

Dr. Paul began buying gold in the 1960s when it was only $35 an ounce.  And he says he wishes he had bought more!  

“Here’s what I believe: by owning gold, I’m protected against inflation and the ongoing, frenzied money-printing that devalues the dollar.”

What they are saying about the gold, stocks, and the year ahead…

Another hike in the debt ceiling.  That’s highly correlated with higher gold.  And there are a host of things that threaten the stock market which is already in dangerous territory because of fundamentals like high price/earning ratios in a rising interest rate environment.

Those market interest rates keep climbing despite Fed rate cuts.  

Among other concerns worth noting are delinquencies on securitized office mortgages which are at a new high; credit card defaults are at a 14 year high; inventories of spec home inventories keep climbing.

What are astute observers saying about the stock market under these circumstances?  Here are a few examples.

James Rickards write in the Daily Reckoning that currency wars are back, and trade wars are coming.  But the loudest alarm bell ringing is the stock market:

“We are now positioned for an historic crash. The specific cause does not matter – it could be war, natural disaster, a bank or hedge fund collapse or another unexpected event. What matters is the super-fragility of the market when the trigger is pulled. This is why Warren Buffett has over $300 billion in cash and why central banks are buying gold. Prepare now. Don’t be the last one to know.”

David Stockman says the stock markets “have every bit the feeling of March 2000 when the stock indices peaked on March 10 and then proceeded to plunge by 30% during the next 18 trading days.”  Stockman calls the situation a “time bomb,” writing in International Man: 

“We are referring to the mother of all fiscal crises that will be triggered within months when the US Treasury runs out of both cash and borrowing authority under the $36.1 trillion reinstated debt ceiling. And that may not even be the first inning. The stock market has now reached a point of such extreme “irrational exuberance” that even Alan Greenspan couldn’t have imagined it when he invented the term several decades ago.”

Our final word of wisdom come from economist Steve Hanke, economics professor at Johns Hopkins University, puts his conclusion in no uncertain terms in a few words on X:

“The US stock market is OVERPRICED, OVERVALUED, and OVERHYPED.”

We think this is a good time to move the safety zone of gold and silver.  Speak with a Republic Monetary Exchange precious metals professional today.

(Although they never really left!)

SHANGHAI (Reuters) – China’s central bank resumed buying gold for its reserves in November after a six-month pause, official data by the People’s Bank of China (PBOC) showed on Saturday.

That’s Part One of the story. 

Here’s Part Two:

(Business Standard.com) – China added gold for a second straight month as it bought 10 tons of gold in December, that took its gold reserves from 72.96 million ounces in November to 73.29 million ounces. China buying gold at historically expensive levels is being seen as a positive signal for the yellow metal.

China is serious about gold and that is not going to change even if the People’s Bank appears to be out of the market for a while.  China remains both the world’s largest official sector buyer of gold and the world’s largest gold producer.

Reuters reports that China’s central bank bought 160 thousand troy ounces of gold in November.  The official institutions of China may not have been entirely absent from the gold market during the reported pause.  It is widely believed that in addition to its central bank, the Red Army, the Communist Party, and other nominal owners may be stockpiling gold outside of the official numbers. 

When Chinese authorities got tired of impoverishing and punishing their population with communism, Deng Xiaoping, the Chinese reformer, cracked open a door to the middle class for a great number of the world’s people.  It was at that point that China became a powerful force in the global commodities markets.  That means that it became an important source of demand for the things that things are made of: copper for power lines, steel for automobiles, aluminum for refrigerators and other appliances, zinc for paint, and lead for batteries.

And gold for money!

India, with an economy now growing at an enviable 6.5 percent rate, gets it too – about gold that is!  It is the second largest gold market.  Even if we leave central bank buying out of the equation, Asia accounts for 60 percent of gold demand.

Recently the global financial news portal FX Empire reported that “a growing consensus of Wall Street’s most powerful institutions believe China is planning to increase its Gold holdings by an estimated 15%, if not 20%, of its total bullion reserves by 2028.”

Even as China adds to its gold holdings, its US dollar reserves keep shrinking.  With President Trump’s tariff fanfare and the weaponization of foreign dollar holding by the US State Department, China is clearly positioning itself for troubled waters in the months ahead.

When China is in the market to buy gold, we want to be buying gold as well! 

Now, with gold price having dipped in response to the Federal Reserve’s latest interest rate cut and  premiums low, is a very inviting opportunity to acquire gold for the inflationary months ahead! 

Each year, we like to wrap up the end of December with some important quotes about gold and silver. This year is no different… here is our list of things worth remembering about gold and silver…

●●●

Now when Jesus was born in Bethlehem of Judaea in the days of Herod the king, behold, there came wise men from the east to Jerusalem…  When they saw the star, they rejoiced with exceeding great joy.  And when they were come into the house, they saw the young child with Mary his mother, and fell down, and worshipped him: and when they had opened their treasures, they presented unto him gifts; gold, and frankincense and myrrh.

• Matthew 2

●●●

There has been a significant increase in demand from central banks to replace dollars with gold, and we’re just at the beginning of that trend. Gold will go up and the dollar will go down, so you’d be better off keeping your investment reserves in gold at this point.     

• John Paulson

●●●

In order to back all outstanding currency with gold reserves, the price of gold would have to reach $8,800 per ounce, roughly five times higher than it is today.

If gold were to cover all money created by the Federal Reserve (which is equal to its current liability of $8.4 trillion) the price of gold would have to be upwards of $32,000 per ounce (nearly eighteen times the current price of gold).

• Alex Gloyy, Eurasian Review

●●●

“True, governments can reduce the rate of interest in the short run. They can issue additional paper money. They can open the way to credit expansion by the banks. They can thus create an artificial boom and the appearance of prosperity. But such a boom is bound to collapse soon or late and to bring about a depression.”  

• Ludwig von Mises

●●●

“We now understand better how little we understand about inflation.”

– Federal Reserve Chairman Jerome Powell

●●●

Ray Dalio, founder of Bridgewater Associates, gives each of his grandchildren a gold coin for every holiday and birthday. The yellow metal is the best way to get young people excited about saving, he says.

But the gift comes with special instructions. “They can’t spend the gold coin. They have to save that gold coin and only use it in an emergency,” he tells Barron’s. “In their lifetime, the goal is to pass the coin onto their kids.” 

Dalio says the gift helps the next generation appreciate the value of saving.

• Barron’s

●●●

Gold’s superior nature is honored in our daily usage of terms like gold prizes, golden ages, the golden rule, golden mean, and good as gold. In the East gold figures prominently in holy places and sacred occasions: rituals, festivals, and marriages.

• Jim Clark, Real Money for Free People

●●●

SHANGHAI (Reuters) – China’s central bank resumed buying gold for its reserves in November after a six-month pause, official data by the People’s Bank of China (PBOC) showed on Saturday.

That’s the story.  China is serious about gold and that is not going to change even if the People’s Bank appears to be out of the market for a while.  China remains both the world’s largest official sector buyer of gold and the world’s largest gold producer.

Reuters reports that China’s central bank bought 160 thousand troy ounces of gold in November.  The official institutions of China may not have been entirely absent from the gold market during the reported pause.  It is widely believed that in addition to its central bank, the Red Army, the Communist Party, and other nominal owners may be stockpiling gold outside of the official numbers. 

When Chinese authorities got tired of impoverishing and punishing their population with communism, Deng Xiaoping, the Chinese reformer, cracked open a door to the middle class for a great number of the world’s people.  It was at that point that China became a powerful force in the global commodities markets.  That means that it became an important source of demand for the things that things are made of: copper for power lines, steel for automobiles, aluminum for refrigerators and other appliances, zinc for paint, and lead for batteries.

And gold for money!

India, with an economy now growing at an enviable 6.5 percent rate, gets it too – about gold that is!  It is the second largest gold market.  Even if we leave central bank buying out of the equation, Asia accounts for 60 percent of gold demand.

An recent on the global financial news portal FX Empire stated that “a growing consensus of Wall Street’s most powerful institutions believe China is planning to increase its Gold holdings by an estimated 15%, if not 20%, of its total bullion reserves by 2028.”

Even as China adds to its gold holdings, its US dollar reserves keep shrinking.  With President Trump’s tariff fanfare and the weaponization of foreign dollar holding by the US State Department, China is clearly positioning itself for troubled waters in the months ahead.

When China is in the market to buy gold, we want to be buying gold as well! 

Now, with gold price dipping in response to the Federal Reserve’s latest interest rate cut and  premiums low, is a very inviting opportunity to acquire gold for the inflationary months ahead!   

Massive Increase in Debt Signals Another Reason to Buy More Gold

This is serious.  “Trillions are flying by so fast they’re hard to see!”

That the description of the skyrocketing national debt  from Wolf Richter at WolfRichter.com.  He is right.  The US national debt just topped $36 trillion.  It broke through $35 trillion just four months ago!  It flew past $34 trillion like a bat out of the hot place only 11 months ago!

It’s not just serious.  It’s deadly serious!

The astounding thing is, says Richter, “that the government has been racking up these huge debts despite the strongly growing economy. No one wants to even imagine how this debt would balloon if there’s ever a recession with falling tax receipts and surging outlays. It’s just nuts to have this during the good times.”

Let us repeat that last point.  What happens in a recession?  Government tax receipts fall.  Social spending increases.  Deficits explode.

Right now, the average interest rate on Uncle Sam’s $36 trillion debt portfolio is 3.30 percent.  It is that low because much of the debt was issued when lower interest rates prevailed.  But as those old debt instruments mature and are redeemed, they have to be replaced by new borrowings at now higher interest rates.

Bear in mind that as recently as 2001, the average interest rate on Uncle Sam’s debt portfolio was 6.5 percent.  That is almost twice as high as today’s average rate!

Some people believe that the late-Everett Dirksen, a senator from Illinois from 1959 – 1969, remarked of escalating government spending, “A million here and a million there, and pretty soon you’re talking about real money!”  

Others think he must have said, “A billion here and a billion there…”

But thanks to inflation, we have to employ “quotation inflation” as well.  Today it would be, “a trillion here and a trillion there…”

A statement from the Committee for a Responsible Federal Budget makes an important point about human psychology: “It’s often said that the more times you say a word over and over, the more it starts to lose its meaning. With so many trillion-dollar debt milestones in recent years, it’s easy to forget that each of them has real-world consequences.”

As we have said many times, the debt has now grown so huge that it can only be paid by inflation – legal counterfeiting of ever more dollars that devalue every dollar already in existence.

And that is a certainty.  The monetary superiority of gold, throughout the ages and around the world, is an unchallengeable certainty as well.

You will need it as debt continues to grow “out the wazoo!”

In a recent post, Silver Shines, we asked if you are ready for the silver shortage.  

We have repeatedly cited leading financial institutions that foresee big moves in silver.  Among them are calls for silver to trade at $38-$40 and $40 per ounce by mid-2025.  We think these market calls from major banks have silver’s direction exactly right, but they seem to have underestimated the power of the markets.  Throughout the year we have warned that they would have to raise their silver price targets, and many of them have. 

Our friend Robert Kiyosaki just told his millions of Rich Dad Poor Dad followers that silver is the best asset buy today: “Buy it before it hits $50.00.”

More recently in our post WAR AND SILVER, we made the point that war is bullish for silver.  That is thanks to its dual role as both a monetary and an industrial commodity.

Coincidentally we saw a recent report in the Jerusalem Post that focused on military applications for silver, a story we felt we must bring to your attention.  It made points that are often under-reported or omitted from official data:

The hidden military demand for silver could potentially outpace industrial applications as we progress through time and technology advances. Escalating geopolitical tensions and potential conflicts may drive this increase, making silver’s role in military applications increasingly significant. This shift could have a substantial impact on the overall silver market, potentially influencing prices and supply dynamics.  

A recent (Oct. 29) Wall Street Journal headline makes our point clear again:

“Pentagon Runs Low on Air-Defense Missiles as Demand Surges“

“Large number of interceptors used to strike missiles, drones in Middle East raises concerns about U.S. military readiness in Pacific”

So even  if you are following silver closely, and you are also only too aware of the spread of kinetic warfare, you may not be getting the whole picture.  But following silver and watching a shortage as it begins to develop is not enough.  You must act as well!

Resolve to speak today with a Republic Monetary Exchange gold and silver specialist about establishing a profit and protection portfolio.

We Hope You’re Watching!

You may have heard about the popular poster back in the 1970s that read “War is not good for children and other living things!”

But war sure seems to be good for silver.

It was good for silver in the 1970s.  And you may have noted how silver prices took off after the Hamas attack on Israel in October 7,023.  Silver had closed on the trading day prior to the attack at $21.72.   As we write, it is almost $10 per ounce higher and has traded as high as $35.   

The following chart shows the performance of silver during that period.  You will note that the silver price was below the 200-day moving average at that time and has been mostly above since.

With that in mind, here’s a quick description of the gathering of war clouds now.

After Biden gave Ukraine the go-ahead to fire missiles into Russia, Ukraine launched US ATACMS and British Storm Shadow missiles into Russian territory.  Russia says the use of those long-range missiles from Nato risks nuclear war, and it has fired off its new hypersonic ballistic missile.

Meanwhile the US has evacuated its embassy in Kiev and is providing Ukraine with widely-banned anti-personnel mines.  The US has newly opened a missile defense base in Poland, which Russia has declared is “yet another provocative step in a series of deeply destabilizing actions by the Americans and their allies in NATO in the strategic sphere.”

Warfare drives people to seek protection in gold and silver as a monetary safe-haven to begin with, but silver is also essential to the weapons of modern warfare: in radar systems for detecting and tracking targets; for secure and efficient military communication hardware; in guidance systems; and in sensors and drones.

The threat of wider war on several fronts is real.  Things are grim and escalating fast.  You would probably push the STOP button if you could, but you can’t.

In the meantime, take steps to protect yourself and your family with silver.

Silver’s uses in modern warfare and technology grow year after year.  Couple that with the safe-haven demand for precious metals in times of war, along with a silver supply – demand deficit year after year, and you will agree that silver has an important place in your investments.  

With missiles flying and war clouds gathering, it’s time to add silver to your holdings.

Beware the next round of big bank loses!

America’s biggest banks are sitting on mountains of distressed and non-performing commercial real estate loans.  They have squeezed their eyes tightly shut, hoping the problem will somehow just go away, a strategy called “extend and pretend.”

A report inside the Federal Reserve describes this practice of delaying the recognition of losses as a buildup of “financial fragility.”

From the report Extend-and-Pretend in the U.S. CRE Market:

The post-pandemic period is characterized by a deterioration of CRE valuations and monetary tightening. In this environment, banks have to manage their CRE loan portfolio while seeing their marked-to-market capital being eroded by losses on securities. 

We document that, since 2022: Q1, banks have extended the maturity of their distressed CRE mortgages coming due and pretended that such credit provision was not as risky to avoid further depleting their capital.  

Consistent with this interpretation, we find that this extend-and-pretend behavior is driven by banks with weak marked-to-market capitalization, is absent before 2022:Q1, and is also present in bank lending to REITs that hold large CRE portfolios.

Or, stated more succinctly, “The delayed recognition of losses exposes banks (and all other holders of CRE debt) to sudden large losses which can be exacerbated by fire sales dynamics and bankruptcy courts congestion.”  [Empasis ours.]

Fire sales.  Bankruptcy courts.  When people start to notice the cracks in banking, some make cash withdrawals, others close their accounts completely.  

The farsighted line up to protect themselves with gold and silver.   

We’ve seen it before.  In March ’23, Silicon Valley Bank went under just 14 days after the Big Four accounting firm KMPG gave the bank a clean bill of health.  During the spate of bank closures, our offices were crowded early to late day after day with people taking steps to protect themselves with gold and silver.

They were doing the right thing.  Gold is up about 45 percent since then; silver has soared, too, up 50 percent.

Now the Fed’s own report “Extend and Pretend” (or as we like to call it, kicking the can down the road in the hope that something will magically solve their problem) has us on high alert.  Warren Buffett may be another leading indicator of bank troubles brewing.  At our last check Buffett had sold more than 266 million shares of Bank of America stock just since July.

Avoid the rush.  Come see us at Republic Monetary Exchange today.  

…But they will keep digging!

A few years ago we warned that the Republicans and Democrats were acting like they had signed a mutual suicide pact!  That’s because they were digging us into a debt hole so deep that eventually they wouldn’t be able to climb out.  

Our advice at the time:  “STOP DIGGING!”

But they didn’t. 

Total US debt has jumped by $473 BILLION over the last 3 weeks alone, to a record $35.8 trillion. What is your share?  Well, at the risk of shocking you, your share of America’s debt has climbed by $1,450 in just the last three weeks.  

How about interest on the national debt?  

The US now holds a record $103,700 of debt for every American. That means you!  In 2024, interest on the national debt soared to $1.16 trillion.  That’s the first time it has raced above $1 trillion.  Uncle Sam now owes $103,700 for every American citizen, including you, and paid interest of $3,360 for every citizen in the just finished accounting year.

So after decades of falling interest rates, the worm has turned.  With exploding levels of unpayable debt around the world, interest rates have begun rising.  That means the cost of servicing America’s debt will climb.  Your cost will climb.

What is the long-term plan here?   There isn’t one!

This episode tells us something very unpleasant about our country today.  And about our leaders.  A debt crisis like this is the stuff of third-world banana republics (like Zimbabwe, Argentina, Venezuela) and advanced economy kleptocracies (think Germany 100 years ago).  

Now we are like them.  And our leaders were either too stupid to see where we were headed, or they just didn’t care.  

We don’t know which is worse.  Maybe it doesn’t matter.

Former US budget director David Stockman says the national debt will reach $36 trillion in the next few weeks, and $40 trillion sometime in 2025.  “Needless to say, figures of those stunning magnitudes imply Roman Empire style financial ruin.”

To repeat ourselves, what is the long-term plan here?   

There isn’t one!  There is no central plan or government playbook to get this problem under control.  We are waaaay past that!

The only conceivable plan to deal with this is your plan for yourself.  Call or stop by Republic Monetary Exchange to learn why your personal profit and protection plan must begin with gold and silver.

“Time Bomb Ticking” (which is why you need gold now)

 Just so you know, even though we have been warning that this is where we are headed, it’s now no longer just us saying that the dollar scam will end badly.  We hope all the government grifters, Fed flimflammers, cronies and crooks, Washington wastrels and political pilferers have gotten everything they wanted, because the whole system is close to blowing up.  It will take them down with it.

And now that it’s getting close to game-over, others are beginning to read the writing on the wall.  Including at the International Monetary Fund, which says the government debt problem is “worse than in looks.”

That’s pretty scary considering it looks pretty damn bad already.  

Bloomberg News headlines its account this way: “World’s $100 Trillion Fiscal Timebomb Keeps Ticking.”

In short, we’re looking at government debt exceeding $100 trillion, or about 93 percent of global gross domestic product by the end of this year!

IMF Managing Director Kristalina Georgieva in a speech last week:  

“Our forecasts point to an unforgiving combination of low growth and high debt — a difficult future.  Governments must work to reduce debt and rebuild buffers for the next shock — which will surely come, and maybe sooner than we.”  

Let’s see.  “Time bomb.”  “Worse than it looks.” “Unforgiving.”  “The next shock.”  “Sooner than we expect.”

It’s almost like something we would have said, although we said it when you had more time to prepare.  

Now the time bomb is ticking.  Time is running out.

Here’s a succinct description of the inflation scam from Bill Bonner:

Inflation is a form of theft. But it only ‘works’ as a federal policy so long as someone gets robbed. The feds ‘print money,’ pretend it is valuable, distribute it to people… who are then ripped off by it. 

In 1971, for example, a saver might have worked hard his entire career to lay aside $100,000. By 2024, his money would have been devalued by about 90%. In other words, he was cheated out of $90,000.  

That’s why an inflationary system is unstable. People try to protect themselves. And if they succeed, the policy fails. Or, to put it differently, inflation is just an underhanded way to tax people. But it only works as long as someone ‘pays’ the tax. 

That’s the story in a nutshell except for one thing.  How do people protect themselves?  

As they have done in these situations for thousands of years, they protect themselves with gold and silver, the enduring money of the ages.

To find out more, speak with a Republic Monetary Exchange precious metals professional while you still can.

Tick… tick… BOOM! 

You’ll need Gold and Silver to Do it!

 It’s the question the mainstream financial media should be asking but doesn’t.  While they remain behind events unfolding, year after year the Mises Institute takes dead aim at the economic realities others prefer to ignore.

This month a Mises article asks “Can America Survive Global De-Dollarization?”  We will share a couple of important points, but we prefer to reframe the question, asking if you and your family can survive de-dollarization.

The article focuses on the obvious threat that between purchasing power loss – inflation, depicted on the adjoining chart – and the use of the dollar as a tool of US foreign policy by means of sanctions rendering some foreign-held dollars useless, we could see an avalanche of de-dollarization.

We not only think it is likely as we have been warning, but we also see it as inevitable and indeed already underway.

The loss of the dollar’s preferred status as the preferred unit of global trade, what a French finance minister dubbed an “exorbitant privilege,” it spells reduced demand for dollars, making things more costly for those that need that issue dollar-denominated debt. It will cost the American people dearly:

This would shock the United States economy with massive price increases on consumer goods while crippling the local, state, and federal governments because deficit spending will no longer be possible if no one buys the debt. In this scenario, states like California and New York might find themselves turning to the federal government for some type of bailout while smaller states with more balanced budgets might find themselves wondering why they should be paying the bill for someone else’s reckless spending that they had no part of, which in turn could create a crisis of unity among the United States of America.

As the world repudiates the incredible shrinking dollar, what will replace it?  In truth there is no governmental or national currency that is any more reliable.  We recall one author telling us years ago that when the dollar fails, people will turn to the International Monetary Fund’s sketchy “Special Drawing Rights.”

Not bloody likely.

Deceived by one phony, unbacked made-up currency – the dollar – it is not even conceivable that the SDR, with which people are unfamiliar and which depends on backing by the poor American taxpayers anyway, will rise by acclamation instead.

And in fact, the Mises article notes that another monetary unit is rising instead:

Part of what is propping up the US dollar’s dominance is the fact that there is not an alternative ready to replace it. However, there has been speculation that gold—whose price is up 25% this year—could be that alternative, and the price increase is a reflection of the demand from other countries buying it to fill their central banks.

As the article notes, the end of fiat money, money made of nothing but thin air and a few digital bookkeeping entries will be at hand.  How will you and your family do in this era of a failing currency and declining American solvency?  If you have prepared with gold and silver, as foreign central banks and astute trend watchers are doing, you will have taken prudent steps to insulate yourself as much as possible from the dramatic shift away from the dollar’s exorbitant privilege.  It may have been nice while it lasted and with honest management it might have lasted longer.

But today, it is what it is.  And what it is is over!

The disastrous economists are a signal to buy gold!

Like other disasters, hurricanes are bad for the economy.  So are most Washington economists.  The destructive effects of both are frightful and when these “disastrous economists” are making monetary policy, it is a very good time to own gold!

Year in and year out, statist economists and their followers are like an echo chamber with this nonsense touting the economic stimulus to be had from natural disasters and wars, and the benefits of rebuilding.  Some examples:

• Let’s start with former Federal Reserve Vice Chairman and New York Fed President William Dudley who explained on CNBC a few years ago that Hurricanes Harvey and Irma actually would lead to increased economic activity over the long run: 

“The long-run effect of these disasters unfortunately is it actually lifts economic activity because you have to rebuild all the things that have been damaged by the storms.”

“I would expect that by the time we get to the end of the year and early 2018, the transitory negative effects of this storm I think will be over and we actually will start to see some of the benefits of the rebuilding efforts in terms of boosting the economy,” Dudley said.

• No one can illustrate this class of reasoning more effectively than Larry Summers, himself a former World Bank chief economist, U.S. Treasury secretary, Harvard president, and Kennedy School professor. After the 2011 Japanese earthquake and tsunami, Summers went on display:

“This is clearly going to add complexity to Japan’s challenge of economic recovery. It may lead to some temporary increments ironically to GDP as a process of rebuilding takes place. In the wake of the earlier Kobe earthquake Japan actually gained some economic strength.”

• Every disaster brings these no-nothings out.  Bush administration Labor Secretary Elaine Chao gave voice to the same view in the aftermath of Hurricane Katrina:

“There is a bright spot in that new jobs do get created. And in the rebuilding.  New Orleans, for example, is going to see one of the biggest construction booms that they have ever seen. So in the aftermath and the rebuilding of a devastated area, there will be a tremendous array of new jobs that are being created. And that is going to help the economic development.”

• President George Bush expressed the belief that spending on his elective Iraq war was good for the economy, saying, “I think actually the spending in the war might help with jobs . . . because we’re buying equipment, and people are working.” 

Who are these people?  These disastrous economists pop up every time there is a natural disaster to proclaim how wonderful its impact in stimulating economic growth will be.

When government economists, Fed economists, academic economists are disastrous economists, when they are in charge of monetary policy, it is time to run, not walk, to stock up on gold!  Because they are out of their minds. 

It stems from a childish misconception as Frédéric Bastiat, the French economist and statesman, explained in an essay written more than 150 years ago.  Bastiat wrote that destruction is not profit in an easy to understand a piece known as The Broken Window.  

Bastiat’s reasoning, applied to the above situations, is this.  Before the hurricanes, the homes, the bridges, the power lines, and the roads were intact.  The money that will be used to rebuild them could have been used for new things, for additional wealth in the form of additional homes bridges, power lines, and roads.  But now it is used merely to restore what already existed.

Before the earthquakes and the tsunami in Japan, the places destroyed by them already existed.  The capital that went to rebuild those places was no longer available for additional infrastructure.  

After New Orleans was devastated by the floods, the money that went to rebuild New Orleans was no longer available to be used for new projects.  Before the flood there were both the intact city and the capital.  After the floods, the city was rebuilt, but the capital was spent on replacement bricks and mortar, on replacement lumber and asphalt, on replacement bridges and sewers, on replacement schools and homes that were in existence but were destroyed in the floods.  That capital merely restored the status ante quo, the prior state of affairs.

Before Bush’s elective war in Iraq, the schools, homes, hospitals, roads, sanitation facilities, and other infrastructure that were ultimately destroyed were in existence.  Making the US taxpayers rebuild what the war destroyed – schools, homes, hospitals, roads, sanitation facilities, and other infrastructure – left Americans with a mushrooming national debt.  

That burden of that debt doesn’t simply disappear because the disastrous economists don’t notice it.

When these people are in charge – and they dominate in both Republican and Democrat circles and administrations – you can be sure that the money system will be fraudulent, and the currency will be on a trajectory to zero.  People who think destruction creates wealth are the same people who think they can create wealth by printing more dollars.

Buy gold and silver to protect yourself from disastrous economists!

Washington keeps piling on unsustainable costs for Americans.  Owning gold now “increasingly important!”

A new fiscal year for the Federal government began on October 1.  The acknowledged US national debt has now hit $35.6 trillion.

Let us tell you what happened during the fiscal year 2024.  It began at the beginning of October 2023 with a national debt of $33.442 trillion dollars.  Then, just days ago, on October 1, 2024, when the new fiscal year got underway, the national debt had reached $35.668 trillion.  

That means that the nation debt grew by $2.226 trillion during the just ended fiscal year.  

You can track these numbers for yourself as they change at the US Treasury’s “Debt to the Penny” website.  If you prefer you can track the change between September 30, 2023, and September 30, 2024.  But either way that’s a lot of red ink!

It’s not just because Washington is incontinent – it won’t restrain its spending – but in part the deficit explosion is now out of their hands.  Higher market interest rates have led to a near doubling of interest on the debt over the last two years.

In other words, things are starting to get real!

What you don’t see!  Death by a thousand regulations!

It’s not just the overt spending that burdens the economy and takes money from the pockets of the American people.  Regulatory costs quietly raise the price of everything so that the consumer dollar doesn’t go as far.  And under that category, regulatory costs, the Biden-Harris administration has set new world indoor records.

From a new report by The House Committee on Oversight and Accountability Majority Staff:  

Since taking office, the Biden-Harris Administration has imposed an estimated $1.7 trillion in new federal regulatory costs2 in its effort to push its left-wing agenda. To place this staggering figure in context, even the highest available estimate of the cumulative costs of regulations imposed by all administrations comes in at $3.079 trillion through 2022. This means that the Biden-Harris Administration has imposed over half of cumulative federal regulatory costs—and it did so in less than four years.

As one study recently reported, the Biden-Harris Administration is on pace to impose in just four years nearly double the costs the Obama Administration imposed in its entire eight years in office.8 In present value, the Biden-Harris Administration’s excessive regulations impose costs of $47,136 per U.S. household—a shocking toll that promises to harm, not help, American households and the U.S. economy.

Someone sent us this response from an AI source on owning gold.  It’s not bad:

In light of this exploding federal debt, owning physical gold becomes increasingly important as a hedge against potential economic uncertainties. Gold has historically served as a store of value and a safe-haven asset during times of economic turmoil and currency devaluation. As the national debt grows, there are concerns about the long-term stability of the U.S. dollar and the potential for inflation. Physical gold provides investors with a tangible asset that is not tied to any government’s fiscal policies or debt obligations, offering a means to preserve wealth and protect against the erosion of purchasing power that may result from excessive government borrowing and potential currency devaluation.

To learn more about wealth and personal protection with gold and silver, visit with a Republic Monetary Exchange professional today.  Because, as we said. Things are starting to get real!

What’s your plan for the cataclysmic reckoning?

“Only a dwindling number of denialists doubt that a cataclysmic reckoning, including double-digit damage to Americans’ income growth, lies ahead. It’s past time to prepare.”

It sounds like what we have been increasingly warning about.  Only this time it didn’t come from us.  Somehow it made it onto the Opinion page of The Washington Post.

By the time the WP notices something like this, the hour is drawing nigh!

The column didn’t pussyfoot around about the coming crisis.  Written by Mitch Daniels, a former governor of Indiana, a former director of the Office of Management and Budget, and co-Chair of the Committee for a Responsible Federal Budget, it bore a serious title:  ‘The Day the Dollar Died’ is coming. What’s the plan?”

Of course, there is no plan.   

Here is how Daniels frames the issue:

With debts already about to surpass the nation’s entire GDP, and adding close to $2 trillion more this year, only a dwindling number of denialists doubt that a cataclysmic reckoning, including double-digit damage to Americans’ income growth, lies ahead. It’s past time to prepare….

Maybe the most likely of many possible triggering events is the day when — not if — tens of millions of Americans are told that the trust funds are not trustworthy, and that the safety-net benefits they have been receiving are about to be reduced, perhaps drastically.

Daniels says more hopefully than realistically that this country doesn’t need another gathering of central bankers at Jackson Hole or other muckety-muck meeting at Aspen or Sun Valley next year.  He’s calling for a gathering of serious, responsible people to plan what Federal assets will have to be sold, who among Uncle Sam’s countless creditors gets paid, how much of a haircut US bond holders will have to take, and what happens when there is no money for Social Security benefits and Medicare.  

Oh yes, and how to explain to the poor unsuspecting American people how this was allowed to happen. The sense of naked betrayal is likely to provoke “violent reactions.”

Of course, the perpetrators of this outrage are all right there in plain sight and have been for generations.  The are in the universities, and in think tanks, and on TV panels and running for re-election in every state in the Union.  And they will slip the dragnets and run away into the night like the thieves they are.

And most of the American people, their lives turned upside down, will wonder how this happened to them.  Our hat is off to Daniels for making clear that the money is running out.  Our only objection is that there can be no collective, political, government “plan” at this point.  Deferring to government plans is what got us in this mess.

The only hope rests in the plans of individuals, the private plans by farsighted people to arrange their own affairs themselves, and not to wait for a big central plan to ride to their rescue.

Those individual plans must rely on real money, gold and silver, because phony paper and deceitful digital dollars will be among the first things to go.

Begin making your own plan today.  Consult with a Republic Monetary Exchange gold and silver specialist about gold for wealth protection and silver for personal protection.

A Former Treasury Official Says You Already Don’t!

In YOU WILL OWN NOTHING, Part I, we shared a video of a Canadian man trying to withdraw a few thousand dollars from his bank account.  The bank wanted a document of some sort to show what he was going to do with his money.

There is more of this sort of thing going around than most people suspect.  It is not just happening at the level of local banks.  A former US Treasury official suggests that you may have already lost ownership of your retirement and investment accounts on a national level.  You will own nothing!

Meanwhile, the US government is making clear to the rest of the world that their dollar holdings are only theirs when Washington says they can have them.

Locally.  Nationally.  Internationally.  Title to assets and control of monetary resources is under assault.  You don’t have to be Carnac the Magnificent to see where this is headed.

On the international front, Congress didn’t just pass a bill to give away $95 billion in foreign aid money we don’t have, it also included a provision that will allow Washington to steal billions of dollars owned by Russia.  Bill Bonner says that the measure is the equivalent of if France, in response to the US invasion of Iraq (remember the Weapons of Mass Destruction that didn’t exist?) had seized the bank accounts of Americans in Paris.

This is what is meant by the weaponization of the US dollar.  It is why US dollar owners around the world are growing wary of the dollar.  They fear correctly that they will own nothing!  

That fear is driving a move to more trustworthy alternatives.  It explains the move by foreign central banks to own more gold. Gold is the most trustworthy money in the world. It depends on no one’s promise.  Gold is its promise!

The US is undermining its own currency.  Washington is shooting itself and you in the foot.  That is because the value of the dollar has long been buttressed by its international reserve status.  Pull out the support system, and everything will cost you even more.

What about your ownership of your investment and retirement accounts?  Paul Craig Roberts says, “you may have already lost ownership of your banking, pension, and investment accounts.”  

Roberts was an assistant secretary of the US Treasury in the Reagan administration and an associate editor of the Wall Street Journal.  He explains:

Your “ownership” has been reduced to permission to use your assets until the financial intermediary holding them gets into financial trouble. At that moment, they cease to be your property and become the property of the creditors of the intermediary that holds your accounts, whether it be Merrill Lynch, Schwab, Wells Fargo, TIAA, or whoever. Your dispossession was done quietly over many years by regulatory agencies. This is what Klaus Schwab of the World Economic Forum means when he tells you that “you will own nothing.” You already don’t.

So, there you have it.  Faith is collapsing in the property rights the people must have in their financial assets.  Internationally.  Nationally.  Locally.  You’ll own nothing… unless you own gold.

The only money you own is gold and silver in your personal possession!

You better watch this video.  Especially if you think you own what is in your bank account.

Ownership is the ability to call upon and dispose of assets as you desire or as agreed upon.  When you deposit your money into your bank account do you think you still own it?

Better watch this video from Canada…

During the collapse of major banks last year – Silicon Valley Bank, Signature Bank, First Republic Bank, and others – clients reported personally intrusive inquiries and difficulties in making bank withdrawals.  It is a problem that we expect will only grow worse.

Gold is the most liquid financial asset in the world.  It is not dependent on counterparties, fund managers, bank managers, or Fed officials.  It is not susceptible to being frozen by bank holidays or by institutional bankruptcies.  

But this only applies to physical gold and silver you have in your possession.  It does not apply to “paper gold” or gold substitutes.  To learn more about the safety of gold, speak with a Republic Monetary Exchange precious metals professional today!

Ten Things That Won’t Happen in 2021!

Below are out predictions for the New Year.  Read all ten 2021 predictions and at the end you’ll discover a little surprise about our list!

10. 
The Federal Reserve won’t stop managing the monetary system to benefit the banks that created it to serve their interests in the first place.

9. 
Foreign central banks won’t increase their dollar holdings, although they will increase their gold holdings.

8. 
Congress won’t reduce federal spending; it won’t stop creating trillion-dollar deficits; and it won’t make a serious attempt to reduce the $27.5 trillion debt.

7.  
The Washington establishment won’t hold most of its members to the same legal standards that it applies to the ordinary people.

6. 
Washington Republicans and Democrats won’t stop trying to divide the people to win elections.  They will, however, concentrate their attention on smaller divisive issues while the fundamental issues of America’s freedom and prosperity go unaddressed.  

5. 
The establishment’s lapdog press won’t bother to report accurately on the fate of the dollar.  Nor will their reporting on gold be accurate.

4. 
The establishment lapdog press won’t blame the nation’s monetary problems on the Federal Reserve and the nation’s money manipulators.  It will blame the people instead.   

3. 
While Washington may commission a study, launch a new bureau, or even appoint a bureaucrat, nothing meaningful will be done about the declining lifespan of the American people. 

2. 
Monetary and fiscal policy won’t stop shrinking the American middle class.

1. 
In a crisis, you won’t see people standing in line to exchange their gold for paper money like dollars.  It’s always the other way around.

Now here is the surprise…. 

These are the exact same predictions we made last year, at the beginning of 2020.  And the year before that, at the beginning of 2019!  

Well, actually, they aren’t exactly the same.  We have to make a change every year to number 8.  We had to change the national debt to $27.5  trillion.  Last year it was $23 trillion.  This proves the point of the prediction, that Washington won’t stop creating trillion-dollar deficits!

Because these predictions have worked out so well, we dusted them off to re-issue them for 2021.  How accurate do you think these predications will be when we look back on them next year?  

In the meantime, all we can say is to own gold, and have a Happy and Prosperous New Year!

The Fed can’t stop printing money.  

Now it has discovered that the trillions of dollars it already “printed” can’t be neutralized or rolled back.  

The genie can’t be put back in the bottle.

The Fed tried that.  It tried to undo some of the trillions of dollars of funny money it created in Quantitative Easing.  That’s because even Fed officials know that if those trillions of dollars aren’t somehow unwound before they work their way into the general economy, they will eventually create a real Third World-style inflation here in the US.

Worse than that, the Fed not only can’t undo what it did in its QE money printing spree, it now is scrambling to print more money to replace what it tried to roll back last year.

The Fed is in a real bind.  A mess of its own creation.  And since we are all helpless victims of its policies, we are in a mess, too.

Here’s the story.  It can be seen in the chart below. 

The Federal Reserve reacted to the mortgage meltdown in 2008 by creating almost $4 trillion.  It was all just made up digital money.  It did this so that it could buy toxic mortgage and other bonds from the crony banks.  To help them out.  And, boy oh boy, did it ever help the crony banks out! 

The spree lasted from 2008 to 2014.  

This chart shows the assets on the Fed books after QE ended.  It had assets bumping along close to $4.5 trillion dollars.

Recognizing the inflationary potential of that liquidity when, under certain circumstances, it starts finding its way into the commercial banks and into the consumer economy and sets off a nightmare inflation, the Fed decided to undo what it had done.

It didn’t go well.  We’ll tell you what happened then and why it matters to you and the gold market in our next post, Inflate or Die, Part II.

Before the trillions of dollars of made-up digital “money” it created in 2008-2014 does its real damage, driving consumer prices to the moon, the Fed started to reduce its assets with a program called Quantitative Tightening.   They didn’t discuss it much, and the mainstream press didn’t say much about the risk overhanding the economy from QE either, but even the Fed knew that had created a huge problem with trillions of dollars of money it made up out of thin air in its Quantitative Easing program.  You can see on the chart below that Fed assets began to move lower in 2018 as the Fed targeted reducing its holdings by $50 billion a month

But by last fall, the stock market threw a fit.  Since it had been climbing for years on the backs of free money for Wall Street, as the Fed tightened and reduced its assets, the market began to collapse.   The S&P500 had traded as high as 2941 points in late September; by Christmas Eve it was 2350, a staggering 20 percent loss in only three months!  

Wall Street was on strike!  More free money, it told the Fed, or we’ll bring the whole stock market house of cards down.

The Fed got the message.  By Labor Day, as you can see on the chart, the Fed’s balance sheet began to grow once again.  Fast!

Not only did the Fed reverse gears, but it also stomped on the money printing accelerator!

Notice that the blue line, Fed assets, is now climbing faster than it came down.  The upward trajectory is steeper than the rate at which it declined in the first nine months of the year.  This illustrates the fact that with the new QE the Fed is printing at least $60 billion a month, which is more than the original QE that began in 2008.

Fed chief Jerome Powell says the new QE (which he refuses to call QE) is an interim measure.  But is it?

The Fed knows it has to print money or the stock market will go into free-fall.  The Fed has become the guarantor of stock market profits.   The Fed has become Wall Street’s “Hey, boy!”  It is inflate, or die!  

Eventually, a critical mass of investors will figure that out.  Discovering that the market is only held aloft by the Fed, they will head for the door all at once.  And there is nothing the Fed can do at that point.

Well, there is one thing.  The Fed can begin printing money and buying stock itself.  That is a real endgame scenario.  Seriously, if that happens, it’s the end of American free enterprise.  Get out of the way!

One more thing.  And this is the reason for telling the whole story.  When the Fed prints new money, it reduces the value of every other existing dollar.   That’s inflation.  It’s a stealth tax, voted for by no one.  It appears to make everything cost more, but in reality, the dollar buys less and less.

That’s one of the reasons people buy gold.  

And in fact, you may remember when the market figured out last summer that the Fed was going to start a new round of inflation, the new gold and silver bull market was born.  Gold and silver prices took off!  

Here’s a chart that shows what happened.

The Inflate or Die Fed is in a fix.  The only beneficiaries of its dilemma are people with gold.  By its own logic, the Fed must continue to print more dollars.  That will drive gold higher.  Much higher.  If it stops printing money, the stock market will plummet.  And stock investors will rush into gold.  

Either way, your best choice is to own gold.