Something cool about Silver and Gold is that we have such a long history of how they translate to labor.

https://people.duke.edu/~charvey/Media/2013/Hurriyet_May_2_2...

> In the era of Emperor Augustus (27 B.C. to 14 A.D.), a Roman centurion was paid 15,000 sestertii. Given that one gold aureus equaled 1,000 sestertii and given there was eight grams of gold in an aureus, the pay comes to 38.58 ounces of gold

Today, 38.58oz of gold would be a salary of $156K/yr.

If we do the same for silver, it comes out to about 470oz of silver. So $23,500/yr.

If we compare that to a US Army E-8 (say 80k/yr), we can argue that gold has doubled its value relative to labor and silver has dropped to almost a quarter.

When people are talking about inflation, what inflation statistic are they referring to? CPI has been below 3% since May 2024.

Precious metals (silver, gold, platinum, palladium) have out-paced Bitcoin.

USD:EUR hasn't gotten worse than 5-year lows, same with USD:GBP.

I don't think these statistics support "money is fleeing the U.S." or "tariffs are causing runaway inflation", unless I'm missing something? You could paint it as "wealthy people are hedging against globalized recession / future break-downs in trade", maybe, but then why are precious metals out-performing bitcoin?

If anything this feels like "momentum"-driven speculation, similar to what we're seeing with some of the biggest companies in the S&P500, and similar to what we saw in late-2020, where the numbers are front-running a plausible but as-of-yet-unrealized narrative.

What indicators that people are finding useful to make sense of this?

Gold and silver hitting all time highs, stock market at insane levels. We have an asset bubble even though interest rates are high. Why is this?

To teach my daughters about investing when they were young, I gave them some actual silver coins that I purchased — thinking these are tangible things, they can track the price. Of course I bought at the peak. They're adults now but just might be seeing a profit on their coins.

I suppose lesson learned?

I wrote an article about this in 2022 titled "This is not Normal": https://jonpauluritis.com/articles/recentfinancialhistory/

feels pretty relevant again...

The dollar index has fallen 11% this year and it doesn't seem to slow. It's great for assets, Gold being a prime example, and people with assets but bad for consumers. It's hard to see how this will not turn into inflation since we import so much and those good are only getting more expensive.

We don't have an asset bubble the prices are just adjusting to the lower dollar.

I bet the FED will have to increase interest rates next year and that's when we'll see a collapse of asset values and since markets tend to over correct, it's going to be painful for all holders. Be ready...

Does this mean the dollar is down, or os this more of a flight to safety?

It’s the debasement trade. Going off the gold standard in the early 70s started the eventual snowball of the USD currency collapse and the last few years has picked up steam.

No political party will ever choose to fiscal prudence when they can just print print print. This is why Bitcoin exists.

Everything is completely normal.

I carry a real United States Dollar, minted in New Orleans in 1901, as an example of hard currency, aka real assets.

It takes between 38 and 39 paper Reserve Notes to equal its value. If Trump isn't removed, I expect it to be 100:1 before the midterms.

45 year cup and handle patterns playing out in gold and silver, both going much higher -- governments cannot borrow their way out of debt, current paper currencies going to zero value over time -- Dow down over 70% measured in gold over last 25 years -- etc. etc.

Wealth is becoming more and more concentrated at the top end of the distribution. Folks at the high end have a lower marginal propensity to consume, and thus invest more in assets. This increase in demand causes all assets to rise.

Price of hamburgers also at an all time high: https://pos.toasttab.com/blog/data/burger-prices

Conclude from that what you will. Personally the cost to keep myself alive relative to the amount I'm making is more interesting than shiny metals.

In an inflationary economy like the one we have, "the market is at all time high" is not really a useful statement since it's the normal state of affairs.

Losing faith in the value of the dollar in the face of our crazy fiscal position?

The one thing that baffles me is energy prices. We haven't seen this oil/gold ratio since the pandemic, when demand for oil plummeted.

People are afraid of the volatility of the USD, especially with the expected rate cuts coming up, and preferring to buy gold/silver instead.

I keep wondering when the hangover is going to hit The Market.

I've been told though that it's a meme stock market these days. I don't believe that though — there are people trading billions of dollars in this machine. Perhaps they're waiting for the music stop and hoping they're not the last to grab a chair.

Gold and silver is most likely from China buying a massive amount (to decouple from the USD slowly). Unsure about the asset bubble but interest rates are “high” compared to the zero interests days, still low historically. Assets are the best way to wash away inflation (you pay your debt with today money) so could be the reason.

Because the numerator in all those fractions is the dollar, which is rapidly losing the worlds trust, as a store of value. Eventually we'll see what happens when you try to divide by zero.

> Why is this?

Massive gilded-age-levels of wealth inequality that will be politically impossible to address (neither US political party has a unified will to do it due to donor capture, and only the one with less will to do it has any national power currently) until there is a substantial economic crash.

Wsj had a great explainer on this today:

https://www.wsj.com/finance/investing/gold-screams-debasemen...

(Sorry, archive.ph not responding)

Inflation is being priced in.

Globally faith in the USD is being lost, and anyone paying attention knows one of Trump's main economic goals is to weaken the dollar. He also clearly wants to tamper with the fed and economic data, which just ads fuel to the fire.

Meanwhile there isn't really a solid alternate to the dollar, so precious metals are default.

The numerator is increasing (assets, i.e claims on future value), far outpacing the minuend in the numerator (actual future value).

The denominator is also decreasing (value of USD).

Fun times.

It's fiat that's going down everywhere.

Uncertainty. It means that there is a lot of uncertainty about our near future.

I feel like something broke during COVID. My only thought is people want their money to make money (I mean, I know I do), and apps like Robinhood normalized speculation and gambling as "saving your money" and "stocks always go up."

We've had an unprecedentedly long period of growth that a lot of the younger "investors" have known nothing but. So this will be their first real bubble burst.

My little brother-in-law is only 27, he was too young to really remember 2007-10, and he started gable-vesting during lockdown, and when you turn $10 into $120 on some meme stock, you feel like you are up, even though the 50 other bets lost money.

Basically when enough people know nothing other than "stonks go up" and "apes strong together" you can keep pumping, but eventually the dump comes for all of us.

Most of the market's upward movement is from a few stocks that are getting lots of juice from Federal policy.

Gold and silver are at record levels because of capital fleeing fiat due to lack of confidence in central banks -- Trump is actively attacking the US Fed trying to destroy Fed independence. Because the dollar is the world’s funding and invoicing currency, big moves by the Fed reset global financial conditions—pushing other central banks to react even when their domestic cycles don’t match.

Real estate has stalled, hiring has stalled, car buying has stalled (so much unsold inventory dealers can't afford floor plan!). Farmers are getting a $10-$15B bailout / hush money. It's just a matter of time until the correction occurs.

The spike in equities is also based on the assumption that the equities will weather the inflation and still end up as a store of value, but I think that's naive.

Take TSLA, currently "winning" in the special olympics micro-market of the tariff-protected US EV market, and losing internationally -- Musk just did a $1B buyback to juice the price. Take NVIDIA, finally going to get real competition from AMD but spiking after US "deals" juiced the price. Chinese GPUs are 12 months behind and rapidly closing the gap and will be half the price per perf/watt (TSLA investors pretend Chinese EVs don't exist, but not for long).

Imagine 30-120 days out once the national guard is occupying and helping ICE detain more and more of the workforce in the most economically productive 90% of the country!

The US economy is facing the greatest coordinated sabotage it has ever faced and as soon as the real numbers come in things are going to get very very ugly. The country seems to have forgotten that central planning does not work.

Tradfi is increasingly becoming a dog shit product.

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Advent of FATCA means it's hell for normal Americans to bank overseas.

You're basically locking yourself into a tiny box by carrying tradfi products. Most lower middle class people will never notice because if you do things like "receve paycheck, go to grocery store" then you'll never see all the walls built around you. But people with money notice.