Recent events had the US forces pull off a pretty good trick by going into a Sovereign country and snatching their President and his first lady…ah, the Left must be thinking if only someone in another capable country would grab Trump and Melania. In any event, it was a smooth well executed grab or some say kidnapping. However, it was sugar coated as a police action arresting Maduro for various narco crimes. I never followed Madura much so I can't speak to his crimes but Venezuelans who are in the know say his dictatorship was brutal and cruel. I suppose that is a requirement to qualify as a dictator or they'd declare themselves Kings and Queens and be instant Royalty, another type of criminality if you listened to the original Americans who fled the King of England.
Interestingly, these foreign affairs are in keeping with the 4th Turning wherein wars and violence can surge. It has been noted by better observers than myself that the oil grab is the flaying of a dying once great empire attempting to wrest back its power. That power was undeniable since Brenton Woods and though military might was part of it being exported around the globe, the real power laid in the USD. It was ubiquitous and beloved and hated by many. That big beautiful $100 is still iconic though now buys but $3 worth of stuff compared to 1971 or so. Yes, the gold standard was tossed out of the gold window then closed by Nixon. Brilliant move replaced by oil as its backer of sorts having convinced the Saudis to price and sell in USDs exclusively. Well, that power has changed. Challenged by China and the BRICS alliances who now settle in each others currencies and more so in Gold, the USD is under pressure which also means the most commonly held form being the US Bonds is also under pressure. If folks don't want the US Bond they ask for more and more interest to tempt them and offset real or imagined risks in holding them. The risk is in the open and is the US Debt and likelihood that it can become less and less valuable even at higher interest because that interest is based on an ever debasing USD. If purchase power through Inflation goes down by 5% per year then 3 or 4% interest still loses 1-2% of its purchasing power so it's a losing proposition. What to do, what to do?
Bessent, Trump's ex Soros man in the Treasury has ideas but they are never exposed in full. Putting together his puzzle of solutions, one of the main ones is the Genius Act authorizing private issuance of Stable coins that must be backed 1 for 1 with US Bonds. This new marketplace for he Bond i s still not ready for prime time but does seem to be taking hold. The issuers of These Stable coins get to keep the interest generated whatever it might be and the holders and presumably users of them get the ever debasing USD…a good deal hey? Not for me, I much prefer lighting my cigar with $100 bills or should I say $3 bills.
Quietly, I think the Venezuelan oil grab is also about gold, silver and many other mining interests. In the new Trumpian era where big business gets some nice treatment, the US through its Corporations, many very capable, will benefit by paying less than beads for all of the Venezuelan riches. It is the narrative that these newly managed riches will be shared with the Venezuelan people now that Trump runs the country. Hmm, how can this end? My guess is that eventually it gets annexed, maybe even gets statehood. Trump is asserting the Monroe Doctrine or as is now labeled the Donroe Doctrine and couching it as protection of the great western hemisphere. That actually has its points and to the point, his actions over Maduro sends the clear message to China and Russia to get out and stay out. I think that actual language will be showing up along with fierce replies and a new semi-hot war between the East and West more or less as written in 1984…oh how prescient. Mix in a bit of Huxley and there you have it, never ending war, economic redefinitions and constant accent of production and mass quantities of excellence all created by the King for us his humble servants. Yes, I am being a bit dramatic but until I see FREEDOM somewhere int he equation it looks like more and more big government and that just doesn't sit well on my stomach.
Ron Paul and to a degree his son Rand of our Senate, both advocate for a more Libertarian approach and use of sound money which both exclaim to be Gold, and maybe Silver. Could Trump and Bessent be quietly thinking the same? I do think it is possible and as a last ditch effort to regain faith in the USD and support the bond a new gold standard might just do the trick. We shall see. It is reported that Trump favors the idea of a gold back 50 year US Bond as floated in his ear by famed Judy Shelton, a one time Trump nominee to the Fed. She did not get the job. However, she is a big fan and friend of Greenspan so deeply steeped in Fed think.
Indeed the US has been at times the beacon of Freedom. Enough of it still glows that people worldwide still want to enter New York harbor and see Lady Liberty…I have heard that she writes home only to find her letters addressed to Freedom returned stating addressee unknown.
Whilst Silver and Gold are dumping a bit off their recent ATHs buy some. The USD inversely goes down against their rise…in a way you must learn to think of any rising price in Gold and Silver and even other base metals and commodities as the result of a falling USD so it juts takes more if them.
Best,
Donn Marier
DM-Your Own CFO