Fiat currency, like the US dollar, is not backed by a physical asset like gold or silver. Instead, its value is derived from government regulation and the trust and confidence of the people. It is valuable because the government says that it is valuable. It is also the reason your grocery prices continue to increase.

The Nature of Fiat Currency

Fiat currency is created through a process called the “Mandrake Mechanism,” where money is created out of debt. When a loan is issued, new money is created, and the money disappears when the loan is repaid. This system creates a flexible money supply, but it introduces significant risks.

Effects on the Monetary System

The shift to fiat currency has fundamentally transformed the monetary system. Central banks, like the Federal Reserve, can control the money supply, which can be used to manage economic cycles. Central banks can increase the money supply during economic downturns to stimulate spending and investment. Conversely, they can reduce the money supply to curb inflation during rapid economic growth.

However, this flexibility comes with challenges. The absence of physical backing means that the value of fiat currency is highly dependent on the stability and economic policies of the issuing government. Any loss of confidence in the government’s ability to maintain economic stability can lead to currency devaluation and inflation.

Inflation and Fiat Currency

One of the most significant criticisms of fiat currency is its propensity to cause inflation. Since fiat money can be printed at will, its supply has no intrinsic limit. This can lead to an increase in the money supply without a corresponding increase in economic output, resulting in inflation. Inflation is a hidden tax, as it reduces the purchasing power of money. When new money is created, new value is not. That value has to come from somewhere, and that somewhere is the purchasing power of previously issued currency. Inflation is a tax because it takes value that the everyday person has earned and redistributes it, often without the person realizing it.

Historically, periods of high inflation have been associated with excessive money printing, such as during the 1970s. The Federal Reserve’s response to high inflation, including raising interest rates, has profoundly affected the economy.

Conclusion

The transition to a fiat currency system has given central banks incredible power to manipulate the economy and the value of money. This hidden tax is the real reason prices continue to increase. Given the potential for inflation and economic instability, it’s crucial to diversify your assets to safeguard your wealth and ensure its preservation over time. Don’t put all your eggs in the fiat basket; explore other investment options to protect yourself against the unpredictable nature of fiat currency. It is prudent to put a portion of your net worth into tangible, physical assets like gold and silver. Something that cannot be debased, cannot be inflated, and has been used as a store of value for thousands of years.

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After a strong year for gold and silver, the market has seen a downturn since the election. It can be easy to get nervous and panic, but it’s important to remember that these short-term movements are a normal part of the market cycle. Instead of panicking, this is a great time to recognize the value of dollar cost averaging.

Understanding Market Movements

Precious metals, like any other asset, experience price volatility. Over the past few weeks, we’ve seen some significant swings. This price “ping pong” can be influenced by various factors, including economic data releases, geopolitical events, and market sentiment shifts. While these movements can be dramatic, they are typically temporary and do not alter the long-term value proposition of investing in precious metals. The world is still printing money, which means gold will continue to be a good investment when pitted against fiat currencies.

The Power of Dollar Cost Averaging

One of the most effective strategies to manage market volatility and avoid emotional reactions to market movement is dollar cost averaging (DCA). This approach involves regularly investing a fixed amount of money into precious metals, regardless of the price. Here’s why Dollar Cost Averaging is a smart strategy:

1. Mitigates Risk: By spreading out your investments over time, you reduce the risk of making a large purchase when prices peak. This helps to smooth out the effects of market volatility.
2. Builds Discipline: Dollar cost averaging encourages disciplined investing habits. It removes the emotional aspect of market timing and helps you stay committed to your long-term investment plan.
3. Cost Efficiency: When prices are high, your fixed investment buys fewer ounces of precious metals. When prices are low, the same amount buys more. Over time, this can lower the average cost per ounce, enhancing your overall return.

Practical Tips for Dollar Cost Averaging

• Set a Schedule: Decide how often you will invest (e.g., monthly, quarterly etc…) and stick to it.
• Determine an Amount: Choose a fixed amount to invest each time, aligning it with your financial goals and budget.
• Don’t Get Fixated on the Price: The price will go up and down, but it will continue to go up in the long term. Instead of being paralyzed by watching the price, buy at regular intervals regardless of it.

Long-Term Perspective

At Fisher Precious Metals, we advocate for a long-term investment approach. Precious metals have proven to be a reliable store of value over time, preserving wealth through economic ups and downs. By focusing on the big picture and consistently applying dollar cost averaging, you can confidently navigate short-term market fluctuations.

Conclusion

Recent movements in the precious metals market are a natural part of the investment journey. Remember the importance of dollar cost averaging instead of getting caught up in the daily price swings. This disciplined strategy allows you to build a solid portfolio over time without the stress of market timing. Stay the course, and keep your eyes on your long-term goals.

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It is the day after the election, and gold and silver have tanked. What should you do? Should you sell, should you buy? Will gold and silver continue to tank? Here are some things to keep in mind.

Trump’s Economic Perception

• Better for the Economy: President Trump is perceived as better for the economy. His policies, which focus on reducing regulations and taxes, are conducive to economic growth.
• Calming Geopolitical Conflicts: Trump has made clear that he intends to lower the temperature of the conflicts around the world, such as in Ukraine and the Middle East. Geopolitical conflicts typically lead to buying gold as a safe haven asset. Demand for gold and silver could lessen which could make the price tank. 
• Cutting Government Waste and Tightening Trade Deficits: His proposed policies aim to reduce government spending and address trade imbalances, which can positively impact the economy.

However, Remember:

• Debt Accumulation: It’s crucial to remember that Trump’s administration added a substantial amount of debt, nearly as much as the current administration has.
• Real Estate Debt: Trump’s real estate  business empire is built significantly on debt.
• Promises and Debt: His promises of tax cuts and increased spending (e.g., no income tax, no tax on Social Security, no tax on tips, lowered corporate and personal tax rates, and military rebuilding) will likely require significant borrowing, potentially increasing national debt.
• Rebuild the Military: Trump has made promises to rebuild our nations military, this also carries an expense.
• China, Japan & the EU: These regions are aggressively expanding their monetary base, printing more money to stimulate their economies. This practice typically leads to inflation, which in turn can drive up the prices of precious metals.

All of this requires money, and it has to come from somewhere! All of that new money, rather than, making gold and silver tank, would lead to an even higher price.

Investment Strategy

Bottom line—today is a day to buy. Gold and silver have tanked. BUY THE DIP! I never say that, but I am saying that today. DON’T GET GREEDY thinking the metals will get cheaper. DON’T be scared to buy. Just buy a little—you don’t have to buy a lot. Gold will be $3500 – $4000, and silver $50 by the end of next year. Global expansion of the M2 money supply is sufficient in itself to drive the metals higher.

Remember, investing is about balancing risk and reward. Diversify your portfolio, stay informed, and make calculated decisions based on the latest economic data.

Fisher Precious Metals Product Pricing

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Gold’s price rise reflects concerns that world bankers, international monetary authorities (and you and I) should know.  Everyone in the know understands this is unsustainable.  The populous is told everything is fine and just continue to put your trust in the central banks. 

Debt is very, very easy to create with fiat currency.  However, the more debt you make, the less valuable is the previous debt you created.  You can not randomly create gold.  It only inflates at about 1.8% per year.  World governments know this, hence their increased gold holdings.

Not only is debt growing but, of course, the interest due on that debt continues to grow. Tell me, is this sustainable?

Gold price will continue to rise and do very well for the balance of 2024 and into 2025.  We could see $3,000 this year and probably $3,500 to $4,000 next year.  Silver should ride its coattails and maybe outperform.

Finally, I know that the gold price seems high. I have been at this for 30 years. It has always seemed high, and it’s going higher. Dollar-cost averaging in modest amounts on a consistent basis is, and always has been, the best approach.

Fisher Precious Metals Product Pricing

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What is inflation? It is a term that has been on everyone’s lips recently. However, most people do not understand it. Inflation, often called the “hidden tax,” quietly erodes purchasing power, impacts savings, and alters the financial landscape without explicit legislative action. Unlike direct taxes, inflation diminishes the value of money over time, affecting individuals and businesses alike.

Understanding Inflation

Inflation is the rate at which prices for goods and services rise, reducing currency’s purchasing power. High inflation can lead to serious economic problems and a lowering of the median standard of living. Inflation is not random. When the government prints new money it causes inflation by taking the wealth of the average American and redistributing it to government programs, foreign aid, and other expenses. Printing money to pay for these programs is much easier than raising taxes on the American people. Americans are aware when their taxes are higher, they are not as aware of the causes of inflation and rising prices.

Inflation as a Hidden Tax

1. Erosion of Purchasing Power: Inflation reduces money’s value. If inflation is 3%, something costing $100 today will cost $103 next year, acting as a tax on consumption and savings. The government receives this tax as they continue to print money to pay for various programs that keep voters happy and themselves in power.
2. Impact on Savings: Savings lose value if the interest earned is less than the inflation rate. For example, with a 2% interest rate and 3% inflation, savers lose 1% of their money’s value each year. That is assuming that the inflation rate we are given accurately reflects the actual effect on purchasing power. The value in newly printed money is taken from the value that was present in the average American’s savings.
3. Wage Stagnation: Wages often lag behind inflation, reducing real income and acting as a hidden tax on labor. As wages do not rise with inflation, the average American’s standard of living worsens.
4. Debt Relief for Borrowers: Inflation benefits borrowers as the real value of debt decreases, acting as a reverse tax on creditors.
5. Government Revenue: Inflation increases tax revenue indirectly through “bracket creep,” where rising nominal incomes push taxpayers into higher tax brackets.

Gold and Silver: Inflation-Proof Assets

Gold and silver are reliable stores of value during inflationary periods due to their intrinsic value, historical stability, and global acceptance.

1. Intrinsic Value: Gold and silver have inherent value due to their limited supply.
2. Historical Stability: Gold and Silver have been used as stores of value for thousands of years.
3. Global Acceptance: These metals are safe stores of value. The whole world recognizes gold and silver.

Conclusion

Inflation is a hidden tax impacting savings, consumption, and income. Understanding its effects and investing in inflation-proof assets like gold and silver can help protect your hard-earned wealth. Awareness and proactive management are key to minimizing inflation’s hidden costs.

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Gold prices in 2024 have soared from $2,050 to over $2,350 per ounce. That is over $300 dollars, or an almost 15% jump, since the beginning of the year. This significant movement in the price of gold says a lot about the economy and inflation. The surge in gold prices can be attributed to various factors, but inflation concerns are taking center stage.

The Federal Reserve’s efforts to keep inflation rates in check have faced considerable challenges. This has contributed to the allure of gold as a hedge against inflation. Despite the Fed’s efforts and reluctance to adjust interest rates, inflation has remained stubbornly high. This is prompting investors to seek refuge in assets like gold. Gold is a great way to avoid the negative effects of inflation as it maintains its value while the Fiat dollar continues to lose buying power.

There is no reason not to think gold prices’ upward trajectory will continue throughout the remainder of 2024. With ongoing concerns about inflationary pressures persisting (not to mention a turbulent geopolitical sphere), gold is expected to maintain its allure as a safe-haven asset. Investors are closely watching developments in global financial markets, geopolitical tensions, and central bank policies for clues on the future of gold prices. As uncertainty looms over the economic landscape, gold stands out as a beacon of stability.

With all of this in mind, if you haven’t bought any gold yet this year and think you may have missed the opportunity, you haven’t. There is still reason to be concerned over the economic landscape, and gold remains a hedge against inflation. Gold is maintaining its growth and it is never too late to protect your wealth from inflation.

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2024 may be one of the most influential and critical years in recent history that could decide the future of the United States of America. It all comes down to the upcoming election. Although none of this is concrete, these concerns are based on actual observations. I see it as a real possibility that they could manifest in the coming year.

The 2024 presidential election can potentially be the most controversial and heated election in our country’s history. I do not want to spend time explaining the ideological differences between Donald Trump and Joe Biden. I am assuming that my readers are at least somewhat aware of the significant differences in foreign policy and domestic affairs. However, I want to focus on something else. My focus will be on the potential fallout in society when either candidate wins.

Will Anyone Trust This Election?

The primary concern that I see arising is that both sides may claim it was an illegitimate election when they lose. Whether they were right or wrong in their assumptions, what matters is they will believe it. What do I mean by that? 

If Trump Wins in 2024

Let us first look at a scenario where Donald Trump wins the 2024 election. The left has already tried to claim that Donald Trump is ineligible to run for president. They use the 14th Amendment, coupled with the events that occurred on January 6th, 2021, to claim that Trump is an insurrectionist and, therefore, ineligible to run for president. The State of Colorado even tried to remove Trump from the ballot. The Supreme Court overturned that decision, but the narrative is already out there. Leftists will now have backing to their claim that Donald Trump is ineligible to run. Now that the idea has been floated, good luck getting that cat back into that bag.

If Trump wins, I could easily see a scenario where the far left claims the election was illegitimate since he should never have been able to run. We can only imagine what would happen next, whether riots, revolutions, or even entire states refusing to acknowledge him as president. A political leader perceived as illegitimate is the precursor to chaos.

If Biden Wins in 2024

What if Biden won the 2024 election? Would we avoid the chaos? I do not believe this is the case either, and it is tied to the same reasoning as if Trump won. If Trump were to lose, Trump supporters would be able to legitimately claim that there was election interference. The fact that states tried to remove Trump from the ballot is proof that the left was not trying to win democratically but by any means possible. An attempt to take away the ability of voters to vote for the candidate they want is an attempt to stop the democratic process. With that trust already being marred, Trump supporters will believe the election was interfered with.

This does not even mention the multiple legal battles that popped up against Trump right while the race was starting. Trump voters do not trust the democratic process. If they lose again, they will be able to claim that the election was rigged. There would be a legitimate claim that Biden really is “not my president.” Republican state governors have already defied Biden on the border. Would it be that surprising if they again defied the federal government if Trump lost the election? This could be the precursor to an actual civil war.

Conclusion

By now, I hope you can see the potential for absolute chaos in 2024. The best-case scenario could be riots, and the worst-case scenario could be something far worse. Only time will tell. However, you should ask yourself, am I prepared for the worst-case scenario? What will you do if there are riots throughout the country, maybe in your city? If there are revolutionaries or even civil war, will the grocery stores still be stocked with food? Will the banks still be reliable in giving you your money when you need it? (As if they were now). Will your money even have value? If America was thrown into chaos, would the world still use the dollar as a reserve currency, or would they dump it, resulting in inflation like we have never seen?

All of these questions are hard to answer, but what you can do is make sure that if that day comes, you are prepared. This is one of the benefits of owning gold and silver. Your wealth is no longer tied to the American system but is inherent. Gold and Silver are valuable regardless of the dollar’s value, and you can have it in your own hands instead of relying on the bank to keep it for you. It is impossible to know what the future holds, but you can know that your wealth is protected and you will be protected if the worst-case scenario becomes a reality.

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I do not have a crystal ball, but these predictions are the distillation of everything I have read and everyone I have spoken with in and outside of the industry.

MORTGAGES

Mortgage rates will fall below 6% for credit scores above 750.  Marginal credit will see interest rates around 6.5%

PREDICT MORE INFLATION

Real inflation (not the fake, self-serving government numbers) will outstrip wage growth.  The Low and middle income households will get poorer in real terms

INCOMING LAYOFFS

I am reading predictions showing 10% layoffs in big and small companies everywhere (Google, Citi, UPS).  Don’t believe unemployment numbers.  I have clients and acquaintances who have applied for a multitude of jobs to no avail.  AI and robotics are going to wipe out many professions – blue and white collar.  Young people should consider the trades (plumber, electrician, medical) where there will most likely always be a need.

PREDICT MORE CONSUMER SPENDING

Spending went crazy during the plandemic, and predictions show it is not slowing down.  Consumer debt is between $1-$1.4 TRILLION dollars.  Average credit card interest rate stands at 21.2%.  Delinquencies are at all-time highs.  Bankruptcies are on the rise.  19% of all car loan/lease monthly payments are over $1,000.  Average car loan term is 5.5 years.  62% of new car loans are being denied.  Mortgage application denials are on the rise.  Here in south Florida, the Canadians didn’t come down this year as they always do – they couldn’t afford it due to prices and exchange rate.

DE-DOLLARIZATION

The dollar is continuing to decline in prominence.  What country wants to hold debt of a nation that is 135% of GDP and dilutes (prints) at will?  BRICS and prospective BRICS countries want an alternative.  The U.S. uses the dollar as a weapon, most recently illustrated by forbidding Russia to use the SWIFT international payments system.  Russia is showing the world that they don’t need dollars – they can do direct currency swaps with the recipients of their oil and store their reserves in gold and bitcoin.

MORE WAR

Predictions show wars, proxy wars and new wars will increase.  Ukraine will eventually have to acquiesce, at least partially.  The U.S. and Israel will bomb Iran while the international community stands by with token support – allowing us to use money we don’t have and continue to put our soldiers in harms way.  China will go into Taiwan – maybe not this year – but they will.  One of these days someone will use a nuclear device.

PREDICTIONS ON ILLEGAL IMMIGRATION

Prediction show that we will continue to drown in illegal immigrants. We have terrorists within our country planning single and/or significant attacks.  We will have another 9-11 equivalent instance.  Chemical, Cyber, bombing or even a dirty nuclear device.  Immigrants will be in every city in the United States as they spread out.

ELECTION PREDICTIONS

Here are some possibilities:  Either Trump or Biden don’t make it to election day.  Haley is hanging on in case Trump goes to jail or dies prematurely.  Newsome and Michelle Obama are in the wings in case Biden completely falters or dies prematurely.  Jail, complete falter or premature death for Trump or Biden – desperate times, desperate measures.  In the end, as with the 2020 election, the end justifies the means.  How about a national cyber event just before the election, or covid 2.0, or use your imagination, could result in suspension of the election and martial law.

FED PIVOT

It’s an election year.  “It’s the economy stupid”.  Predictions show rates will come down.   Liquidity will be pumped into the system which will have to flow somewhere.  The stock market and home prices will rise.  Many people will “feel” richer.  Fed rate pivots typically are followed by a recession 6-12 months later.  They will juice the economy and put lipstick on the pig.

This list isn’t exhaustive, and my readers are largely aware of all of these items already.  What to do?

1. Get out of debt except for your mortgage provided you have equity in your home
2. Have 3-6 months cash at home.  Many of the black swan events I have cited could result in bank closures / bank holidays and non-functioning ATM machines
3. Get 5% or more of network in physical gold/silver/platinum – purchases are still largely unreportable, and that WILL change
4. If you invest in the stock market, the NASDAQ and S&P should do well for the next 12 months.  Just buy the indexes – don’t stock pick
5. Dip your toe in bitcoin.  Educate yourself on YouTube.
6. Buy land other than your principal residence.
7. Read your Bible or Torah – it will reassure you that God is fully in control even if we don’t understand and it makes no sense.  His ways are not our ways.

John

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“When the first shot rang out at Dealey Plaza on November 22, 1963, most bystanders didn’t even realize that it was the sound of gunfire.  But Texas Governor John Connally was an avid hunter. He recognized the sound, sensed danger, and turned behind him to check if President Kennedy was OK.
Moments later, the second shot was fired, striking Connolly in his back. And as he looked down and saw his blood-soaked shirt, he shouted, “My God, they’re going to kill us all.”

President Kennedy, of course, did not survive. But Connally eventually made a full recovery. And, having achieved near mythical status in the State of Texas, he was re-elected twice more as governor.
Then, in 1971, President Richard Nixon asked Connally to be Treasury Secretary. Connally accepted the post despite having almost zero experience in finance or economics. And when questioned later by reporters about his obvious lack of credentials, he famously quipped, “I can add.”
(Connally later declared personal bankruptcy.)

The US economy was in bad shape at the time; Nixon’s predecessor, Lyndon Johnson, had spent aggressively on the Vietnam War while simultaneously spending billions of dollars– a prodigious sum in the 1960s– on education, anti-poverty, and welfare programs.
And inflation rose to around 6% thanks in large part to this excessive government spending.

Developed countries around the world began to rapidly lose confidence in the US dollar and the American government’s ability to manage its finances. And the Treasury Department started receiving demands from foreign governments who wanted to redeem their US dollars for gold.

Nixon was in a bind about how to fix the economic mess. And it was Connally– full of Texas swagger (and little else)– who convinced the President to formally end the dollar’s convertibility into gold.
Nixon made the announcement on Sunday night, August 15, 1971, unilaterally ending the “Bretton Woods” international monetary system that had been in place since 1944.

The announcement became known as the “Nixon Shock”. And “shock” is probably the right word. Foreign governments were in a panic; their entire financial system had been snatched away, overnight, without any warning. And politicians don’t tend to handle uncertainty very well.

This is where Connally stepped in yet again to smash foreign governments in the face with their new reality. “The dollar is our currency,” he told his fellow finance ministers in late 1971, “but it’s your problem.”

Connally was essentially pointing out that the rest of the world didn’t have an alternative to the US dollar. Nearly every nation on earth conducted international trade in US dollars. And because they had no other alternative, the US government could do whatever it wanted… including rack up huge deficits and painful inflation.

And that’s what happened. With no reason to restrain itself or have any financial modesty whatsoever, US government spending soared. Deficits piled up year after year, leading to a particularly nasty episode of stagflation in the 1970s.

One of Connally’s lasting legacies was scaring the world into setting up an alternative to the US dollar.
Europeans in particular were freaked out by the Nixon Shock… so much, in fact, that western European nations eventually banded together to form their own currency as an alternative to the US dollar; today the euro has about a 20% share of global financial reserves.  But with a 60% market share, the US dollar is still dominant. For now.

More than fifty years after the Nixon Shock, the US government still has no financial restraint. Annual deficits easily top $2 trillion, nearly 10% of GDP. America’s fiscal situation is so bad that, within the next decade, 100% of tax revenue may be consumed just to pay for mandatory entitlements (like Social Security) and interest on the debt.

If that weren’t bad enough, the Treasury Department has also made a habit of weaponizing the US dollar, i.e. threatening individuals, businesses, and foreign governments to bend to its will or else be cut off from the global financial system.

It’s no wonder that there’s been so much in the news lately about alternatives to the US dollar. Late last year, for example, Saudi Arabian officials said that they were “open” to selling oil in a currency other than US dollars (i.e. Chinese yuan).  And just a few weeks ago, members of the “BRICS” alliance expanded their membership in an effort to directly challenge the dollar’s dominance.”

Simon Black, Founder
Sovereign Man

My (John’s) opinion – The demise of the dollar will accelerate.  Gone is the exclusivity of the petrodollar.  The Chinese Yuan is on the rise.  The BRICS (Brazil, Russia, India, China and South Africa) are seeking to add Argentina, Egypt, Ethiopia, Iran, Saudi Arabia (Iran and Saudi Arabia have historically been enemies -Shiite and Sunni) and the United Arab Emirates (Dubai).  BRICS is exploring their own currency backed by other commodities. Commodities like Gold, Oil, and other precious metals.

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