David McAlvany has occasionally quoted former Secretary of the Treasury William E. Simon, who noted that, “I continue to believe that the American people have a love-hate relationship with inflation. They hate inflation but love everything that causes it.” This truism is at the heart of America’s current economic dilemma.
Trump, of course, inherited a massive national debt and a high rate of inflation. However, as a consummate politician, he has both promised Americans low inflation and enacted many of the things that cause inflation. True, he is striving hard to reduce such inflation contributors as the costs of energy, regulation, and government, but, as the analysts below point out, he is also causing, encouraging, or allowing many objectively inflationary actions. Even he, recently—in a rare moment of candor on the broader topic of the whole of his policies—admitted that things could go either way.
Our times are characterized by immense economic forces vying for supremacy. Which will win, inflation or deflation? Morgan faces this conflict head-on this week, while Doug focuses on the immense inflationary influences on our economy. Savers and investors need to be fully aware of the forces at work and the potential impact on savings and portfolios. One of the very best ways to do that today is to read or listen to the publications summarized below.
Key Takeaways:
- Elliott Wave analysis of today’s markets
- What happens when leverage’s immense power reverses?
- Who will win the title match between inflation and deflation?
- The gold/silver ratio starts revealing its potential
The McAlvany Weekly Commentary: The Markets’ Stratospheric Tsunami
David interviews Elliott Wave International analysts Steven Hochberg and Peter Kendall to explore why today’s markets look, in their words, positively “stratospheric.” The guests cover Elliott Wave analysis, extreme valuations, and the fragile psychology powering the late‑cycle melt‑up. They highlight the “Pluto‑level” overvaluation of equities, the pervasive role of leverage, and a looming “loss of liquidity” that could turn 2026’s landscape into a far less forgiving one than 2025’s. The conversation ranges from speculative frenzies in AI, the Mag 7, bitcoin, and zero‑day options to key technical signals such as Dow Theory non‑confirmations and the bitcoin/gold ratio rolling over. Gold’s long‑term strength—dating back to its 1999 lows—gets careful attention, along with the current fourth‑wave correction that may set up a future blow‑off fifth wave. Steven and Peter also trace parallels with historical supercycles, stressing how technology manias and debt excesses tend to rhyme across centuries. They close by urging investors to elevate safety—short‑term Treasurys, cash, and physical gold—as liquidity ebbs and the crowd’s optimism risks flipping, as it so often does, on a dime.
Credit Bubble Bulletin: $12 TN and Counting
Doug opens with a jolt: money‑market fund assets have rocketed to a record $7.65 trillion, a symptom of what he argues is history’s greatest bout of monetary inflation, fueled by runaway credit creation, sovereign debt excess, and a shadowy explosion of speculative leverage. He zeroes in on the repo market’s astonishing scale — $12.6 trillion in daily exposures — and the blow‑off dynamics in basis trades, carry trades, and multi‑strategy hedge fund leverage that have quietly pumped trillions of liquidity into everything from sovereign bonds to AI stocks, crypto, real estate, and sports franchises. Doug then surveys rising global yields, yen‑carry fragilities, crypto deleveraging, stretched AI speculation, and a grab bag of regulatory warnings from the Bank of England, BIS, and Washington’s Office of Financial Research. He flags gathering instability across credit markets, including hedge‑fund leverage scrutiny, corporate bankruptcies, and pressures in private credit. Sprinkled throughout are geopolitical tremors, trade‑war ripples, and an AI‑driven boom colliding with soaring power demands. His closing message: markets look deceptively calm at the surface. Beneath, leverage is coiled tight. One good shock could release it.
Hard Asset Insights: Sand in the Hourglass
Morgan frames the current market landscape as a heavyweight bout between inflation and deflation, with both forces gathering formidable strength. He devotes most attention to the inflationary side: surging inflows into commodity ETFs, aggressive sovereign stockpiling of critical minerals, and U.S. industrial‑policy ambitions that require a weaker dollar and structurally higher prices. These pressures, he argues, echo prior pre‑inflationary spikes and hint that 2026 could deliver another, perhaps more dramatic, inflation wave. But Morgan quickly shifts to the hulking deflationary contender: mounting global funding stress driven by massive U.S. deficits, rising Japanese government bond yields threatening yen carry trades, and the debt‑hungry AI arms race, which now needs trillions in capital just to stand still. The combination, he warns, risks crowding out real economic growth and destabilizing markets unless policymakers proactively intervene with liquidity, yield‑curve control, or outright currency sacrifice. With the “sand in the hourglass” running low, Morgan suggests policymakers face a fateful decision: inflate boldly or risk a deflationary crunch first. Until clarity emerges, he favors overweight positions in both gold and cash.
Golden Rule Radio: Metals Rally While Crypto Sags
On this week’s episode, Tory, Miles, and Robert dive into the sharp resurgence in precious metals, highlighting gold’s move back above $4,200 and silver’s eye‑catching 10.5% surge to roughly $58.50. They spend most of their time unpacking silver’s outsized jump and the rapid compression of the gold‑silver ratio from triple‑digit extremes earlier in the year to the low‑70s, a classic tell that a precious‑metals bull market is broadening out. The hosts then contrast that strength with crypto’s stumble, noting bitcoin’s slide from above 120,000 into the 80,000s and the sentiment shift as investors rotate winnings from speculative tokens back into gold’s steadier embrace. They also spotlight unusual opportunities in physical markets: old U.S. gold pieces, junk silver, and Morgan dollars trading at or below melt value—a rare alignment that creates “free ounce” potential when premiums eventually normalize. From strategic accumulation to premium‑capture swaps, Tory and the team frame this moment as early‑cycle strength rather than late‑cycle euphoria, suggesting the metals bull still has plenty of road ahead.
