It’s a good thing Harry Truman isn’t president now. He asked whether anyone could find him a one-armed economist. He was tired of hearing on the one hand, this, on the other hand, that. Today, he would be apoplectic.
On the one hand, Trump’s economic sea changes seem to be working—for now, at least. On the other hand, the US economy has some horrific problems.
These are very powerful things. No one can accuse Trump of treating a serious wound lightly. But this story has only just begun. It has a long way to go before it plays out.
And when powerful forces clash, it’s best to stay out of the way as best you can. Self-preservation is a wise course of action. And as the authors below point out, economic self preservation is the native language of gold.
Key Takeaways:
- Economies, like hearts, can seize up
- Current market euphoria doesn’t solve systemic problems
- When the cure is nearly as dangerous as the disease
- Gold is the go-to for most of the world now
The McAlvany Weekly Commentary: All Time Stock Highs & Liquidity Addiction
David and Kevin dive into the intricate dance between stock market highs and liquidity in this week’s episode, framing the economy as a heart constantly at risk of crisis from either blockage or overstimulation. Drawing on the concept of a “Von Misean crack-up boom,” David highlights the dangers of excessive liquidity, where every asset—stocks, bonds, real estate, and commodities—gets repriced higher as currency value declines. The duo explores parallels between health and finance, warning that just as neglecting physical fitness leads to heart attacks, ignoring economic fundamentals invites market collapses. They revisit the 2008 financial crisis as a cautionary tale of delayed consequences, while discussing rising gold demand as a signal of global unease—Germany’s bar and coin purchases are up 250%! Kevin notes the retail investor’s summer exuberance and the institutional trader’s absence, while David emphasizes the need for comprehensive economic assessments, not just quick vitals. With inflationism baked into the system, they caution against policies favoring perpetual stimulus, likening it to an athlete chasing short-term gains at long-term risk. As gold remains the “once and future king,” the conversation underscores its role as a steadying anchor amid financial turbulence.
Credit Bubble Bulletin: Anything But Normal Times
Doug’s latest analysis dives headfirst into the extraordinary dynamics shaping today’s markets. The Nasdaq100 surged 3.7% to a record high, propelled by Apple’s 13.3% melt-up, while the MAG7 Index hit fresh peaks, underscoring the AI-driven frenzy fueling unprecedented corporate spending. Yet, Doug warns, this manic backdrop masks deeper vulnerabilities, including ballooning private credit risks, frothy leveraged loan markets, and a historic bond issuance boom. Meanwhile, the Fed’s shifting landscape—highlighted by dovish whispers about rate cuts and controversial personnel moves—raises questions about the institution’s independence. Globally, tensions over tariffs, AI’s energy demands, and China’s rare earth dominance create geopolitical ripples, with Trump’s policy maneuvers adding fuel to the fire. Amid this whirlwind, gold shines as the steady hand, gaining 1% even as other commodities falter. Doug’s key takeaway? The speculative market euphoria may be blinding investors to looming dangers, with bond vigilantes and inflation risk waiting in the wings. A tale of excess, resilience, and fragility all rolled into one.
Hard Asset Insights: Wealth Preservation & Creation
Morgan kicked off the week’s commentary with a sharp look at a market landscape that, despite summer’s typical lethargy, delivered plenty of action. Equity indexes hit record highs even as troubling divergences emerged, with a surge in new 52-week lows among S&P 500 members. Gold and silver held firm, while miners soared over 10%, energy got trounced, and yields rose alongside a faltering dollar. The broader theme? America’s pivot from Federal Reserve-led monetary policy to activist intervention by the Department of Defense and Executive Branch. This shift, aimed at revitalizing U.S. manufacturing and reducing debt-to-GDP, signals a likely era of suppressed yields, inflationary stimulus, and a weaker dollar. The firing of the BLS Commissioner and the nomination of Stephen Miran to the Federal Reserve underscore this radical policy shift, with gold and hard assets poised to thrive amid dollar devaluation. Investors should prepare for a period of significant financial and geopolitical recalibration, where defense against dollar risks and offense through gold-related investments will be critical. As Morgan aptly framed it, America faces a “risky surgery” for survival—a painful but possibly necessary path to recovery. Gold, as ever, stands ready as the ultimate wealth preservation tool.
Golden Rule Radio: Overseas Demand Fuels Gold
This week, Miles dives into the global forces driving gold’s 2% rise to $3,370, with silver trailing at a 1.6% gain. Platinum ticked up 1% to $1,345, while palladium faced a sharp 7.7% drop, highlighting the contrasting dynamics between precious metals. Miles emphasizes the surging overseas demand for physical gold, particularly from Russia and China, as they challenge Western pricing dominance by establishing their own precious metals exchange. This shift, he notes, could reshape control of the market and weaken the dollar’s influence. While U.S. demand remains subdued, global buyers are stepping up, reinforcing gold’s status as a hedge amid economic uncertainty. Miles also touches on the broader metals market, noting platinum’s quiet resilience and palladium’s decline as part of a larger recalibration. With volatility in the air, Miles reminds listeners of gold’s historical strength as a steady anchor, even as other assets falter. As always, he advises viewers to stay informed and prepared for shifting market tides.
