Debt

The era we are living in is, in many ways, similar to the period leading up to the Great War. Crises are multiplying and intertwining, powers are coming into conflict, divisions of all kinds are becoming more pronounced, isolationism is becoming a reality once again, and nothing seems to serve pe...

Over the past couple of years, I have shown you numerous ratio charts that suggest a precious metals bull market is in full swing. This week, we will add a couple more into evidence that highlight the sheer magnitude and duration of this magnificent bull.

What we are experiencing today is a cash crisis. The major bond crisis, the one that will call into question the sustainability of public debt, will undoubtedly come – but later. Gold, meanwhile, is navigating this landscape perfectly.

America's decline, economically, demographically, and socially, was becoming so obvious that it could only give way, as history has repeatedly shown, to the rise of a new superpower. But that was without taking into account the fact that China would follow the same path.

At first glance, everything seems under control: stocks are holding steady and the U.S. economy is resilient. And yet, something is going wrong in the global financial system. In recent days, the cost of very short-term cash – the SOFR rate – has risen sharply.

While the stock markets are driven by algorithms and bitcoin is kept afloat by synthetic liquidity, the silver market highlights the divide between paper and reality.

France's public debt is mainly held by foreign investors and this is precisely what worries senators, the French Ministry of Finance, and the government: a loss of confidence among international investors would cause interest rates to skyrocket immediately.

With the US government shutdown, “fiscal QE” came to an abrupt halt. It comes at a time when the US Treasury has become the central player in providing liquidity to the system. The longer the situation drags on, the more the pipeline seizes up – and the greater the likelihood of an accident.

Fitch's downgrade of France's debt rating last Friday was expected. It remains to be seen whether Moody's and Standard & Poor's will follow suit on October 24 and November 28, which seems quite likely.

To function, a gold standard would require a far higher price than today. Will Donald Trump, willingly or not, help China and Russia rebuild the international monetary system? The answer could come within weeks — or months at most.