As I type, Gold and Silver have both logged ALL TIME HIGHS in the spot market. Spot price is what you pay to walk away with the metals. It differs from the Futures Contract Price which is often higher due to the expectation that price will rise in time.
As you know, I have been a proponent of both Gold and Silver and advised clients to hold some even if small to protect their purchasing power during inflationary times. I do not follow up asking if they have done so. Plus, I am not a “I told you so” kind of accountant.
The interesting fact about this is that the regular financial channels do not really report on it. The gold and silver markets are more or less considered kryptonite to stocks and bonds which is their bread and butter. They unashamedly do this NON reporting to keep their game or Ponzi schemes going. You should also note that their biggest sponsors who pay advertising fees are big Pharma and a few sundry others. They know where their bread is buttered.
So what is driving these new highs? Simply, it is the National Debt and its Interest only payments plus a loss of faith in the USA's ability to sustain the high interest expense and get new buyers at its bond auctions. These relate to the US Bond which is used to 1. borrow to cover deficits and 2. roll over old maturing bonds into new bonds. The Treasury has been using Short Term Debt like 90 T Bills etc. to finance these rolling over or maturing bonds. The long Bond being the 30 year is now at almost 5% and that is a dangerous level for affording the interest payment and Bessent is not particularly rolling over into long bonds. The new GENIUS ACT attempts to open up a new short bind financing source via the Stable Coins. A dubious plan.
The Genius Act brings a new market for bonds into the mix requiring Stable Coins to be backed by US Bonds or at least making it the main backing for achieving the 1:1 USD ratio of backs to issued. This is actually pretty smart but I doubt that it will lower the long bond rates or mortgages. These are controlled not by the Fed but the market who has largely lost trust in the US and its commitment to any fiscal sanity.
In September's Fed meeting it is expected that a .25% rate cut is a sure thing, now even .5% is in play to a minor degree. I think it is going to be .25%, while leaving some wiggle room to do .50% due to recent releases of slow downs. But is there really a reason to lower with inflation hovering around 3% (likely much higher if reported honestly). Maybe the Fed has quietly dropped the 2% target while also acquiescing to Trumps political pressures for 1% rates. Ouch! 1% will hurt inflation and maybe not even lower long term rates at all. Last such move, long term rates actually went up after a .5% cut. Like said, the market knows what is going on and the good faith and credit thing is out the window.
Add in BRICS and their progress decoupling form the USD and it's a pickle. Just how sour will unfold soon. Meanwhile Gold and Silver are displaying their own brand of AI by maintaining their status as God's money.
I think you should own some precious metals. And don't say I said I told You So. I am just TELLING YOU TO DO IT. Hey, that's different.
Best,
Donn Marier
DM-Your Own CFO