A common theme for the McAlvany analysts is the importance of reality over mirage—and mirage here is a metaphor for myriad human fantasies, illusions, delusions, hopes, assumptions, and poorly based desires.
We humans have many ways to avoid the cold, hard, impersonal discipline of reality. Our machinations sometimes sustain our make-believe world for quite a while, but reality always returns with a vengeance.
Unfortunately, illusion is costly. Very costly. The price of socialist utopia in Russia and China has been in the tens of millions of human lives. The tally for major market manias through history has been millions of fortunes lost by persons and corporations. Similar losses pertain to poor investments of life and/or money by individuals on a smaller scale.
Recent societal developments in many Western countries—led by America—indicate a partial desire to return to reality. But partial reality is partial mirage—and mirage is costly in any quantity.
The authors whose work is summarized below understand the value of every return to reality—whatever its extent—while cautioning against faith in mirage. Fortunately, in the monetary world, real money protects against mirage money and real debt.
Key Takeaways:
- Reality isn’t always winsome, but it always matters most
- Leverage works both ways
- When words and deeds diverge
- View the metals markets as they are, not as they seem
The McAlvany Weekly Commentary: Best Risk Hedge: Gold Or Crypto?
This week David and Kevin unravel the tangled ball of today’s markets—liquidity, risk, and human belief—asking whether gold or crypto makes the better hedge. David argues that bitcoin has been mirroring the stock market rather than offsetting it, behaving more like a speculative risk-on play than a safe haven. Gold, by contrast, continues to attract both central banks and investors as an anchor against inflation, policy mistakes, and geopolitics, while silver, with five years of supply deficits, shines as a scrappier but more volatile companion. Along the way, the duo examines cracks in private credit and equity, debates Fed rate-cut expectations, and muses on overextended AI valuations and energy bottlenecks. They tie it all back to tangible reality: in a world built on leverage and narrative, hard assets still matter. With characteristic humor and philosophical asides—from Heidegger to Christmas lights—the hosts remind listeners that patience, perspective, and a grounded allocation to metals remain timeless virtues when markets get frothy.
Credit Bubble Bulletin: Volatile and Fragile
Doug surveys a global market on edge, wavering between euphoria and panic. He opens with Nvidia’s whiplash week—proof that AI exuberance can turn on a dime—and expands the lens to reveal synchronized de-risking from Asia to Europe to Wall Street. Hedge funds, bruised by crypto’s collapse and crowded trades in Fannie, Freddie, and AI stocks, now face forced liquidations and tightening liquidity—signs, Doug warns, that the great leveraging is giving way to deleveraging. Private credit, once the belle of the ball, looks more like subprime 2.0, and life insurers stuffed with illiquid assets could be sitting on ticking time bombs. Threading through his narrative is a skepticism toward the so-called “Trump put”: policy rescue efforts colliding with deteriorating credit conditions. Fed officials at the Cleveland conference reinforce the theme—belatedly grasping the systemic risks Doug has long chronicled. By the end, his message is clear: speculative bubbles are losing air, credit strains are spreading from the periphery to the core, and the financial world’s “new normal” is neither stable nor survivable without consequence.
Hard Asset Insights: Confidence in Destination
Morgan maps the Fed’s whiplash week of hawkish talk and dovish pivots, reading it as high drama in an ongoing policy theater where inflation takes a back seat to market stability. Early in the week, Fed officials like Hammack and Logan talked tough on rates, dousing hopes for December cuts and rattling equities, but by Friday, New York Fed President John Williams reversed things entirely—hinting that downside employment risks warranted easing and sending rate-cut odds back toward 70%. Morgan sees this not as mixed signals but as confirmation: the Fed is trapped, unable to sustain high rates without cracking the credit edifice. He outlines growing repo-market stresses, the likely end of quantitative tightening, and the quiet return of balance-sheet expansion—QE by another name. Add in talk of financial deregulation from Stephen Miran, and the picture, Morgan argues, is clear: policymakers have chosen to inflate rather than fracture. For investors, that path leads—however bumpily—to a golden horizon where hard assets, especially gold, stand to gain as confidence in destination replaces faith in direction.
Golden Rule Radio: Proactive Positioning in a Lull
Hosts Miles, Tory, and Rob take a calm, clear-eyed look at what they call a welcome “breather” in the metals markets. After a 33% surge in gold from late August to October, prices have cooled about 3%, with silver, platinum, and palladium following suit as the dollar climbs above 100 and equities retreat. Rather than viewing the lull as weakness, the team frames it as a chance for disciplined investors to reposition—comparing it to a deep inhale before the next leg up. They discuss key technical levels, notably gold’s support near $3,970 and the untouched 200-day average around $3,425, seeing these as potential accumulation zones. Drawing parallels to early 2000s bull markets, they suggest history may rhyme again, with gold poised for renewed strength despite higher interest rates and a firmer dollar. The hosts emphasize practical strategy—steady dollar-cost averaging, ratio trading among metals, and long-term portfolio integration—over market chasing. In short, they counsel listeners to act now, not out of fear, but out of foresight.
