WeeklyArticle03072025

While our politicians and media try to portray our economy as “strong” and our outlook bright, their actions are betraying their words. The latest sign of our demise is the Mara Lago Accord. While it has a cool sounding name, I believe it is a clear sign of how desperate our debt situation has become.

The idea is to replace some of our longer-dated treasuries with 100 Year Bonds that would be issued at a discount and mature in 100 Years. They would pay no interest and could be used as collateral to get low-to-no interest loans from the Fed if money were needed in the meantime.

This could lower the interest expenses that we have been paying but would VERY likely undermine the world’s confidence in our US dollar and economy- likely leading to more “printing and buying” and inflation.

In my opinion, this is real banana republic stuff.

Is it any surprise why central banks are jettisoning their treasuries and buying gold?

There has been a lot of commentary lately on the massive amounts of gold being moved into the United States in the past few months. While there is no official story that we can all believe there are many theories out there. Most are plausible but it would be nice to know which ones are actually correct.

When this first started my first thought was that the gold was being brought back home to refill the vaults that had been emptied out because of leasing, etc. I also believed that they needed the physical metal to continue their price suppression schemes. I have noted in the past that in 2014 there were 40 TONS of Ukrainian gold sent to the USA for “safe keeping” just prior to a major takedown of the price in 2015. They still need some physical to back the paper schemes.

Another interesting theory is from Martin Armstrong of Armstrong Economics who believes that the gold is moving from Europe to the USA because those “in the know” are expecting war in Europe. He says, “someone always knows in advance.”

Many others have opined that it is a result of the tariffs that are being threatened.

Recently, I was watching an episode of Live from The Vault with Andrew McGuire. He glossed over a MAJOR point in my opinion. He mentioned that on July 1, 2025, the USA would have to become compliant with Basel 3. The rest of the world has been complying for the past two years. Many times, he has said that the Fed is the only central bank actively suppressing the price of gold. This is likely the reason. Gold is a tier one asset on central bank’s balance sheets. This means that they can take 100% credit as long as they hold it PHYSICALLY- No paper. It also means that any trades have to be settled in one business day. Whether you are buying or selling the metal has to physically be there. This is a major reason in my opinion that the paper games have been failing.

So far, the Fed and its owners- the major US banks- have not had to adhere to these rules and have been able to continue their paper games to keep the price suppressed. It appears that the rest of the world has caught on and are buying each and every dip provided by the suppression.

Despite massive (naked short) selling the gold price has continued to rise.

What happens in July when the US banks need to adhere to these same rules? Will the paper games finally end? Will the banks just rig the “market” up instead of down? Time will tell. It will be interesting to see.

In the meantime, we are being led to believe the dollar is strong while we are seeing our purchasing power evaporate right before our eyes. All of the “fixes” that are being discussed appear to have one overriding feature- A FAR weaker dollar. We hear there is a house affordability problem. The answer from our “leaders”? Lower interest rates. This will lead to higher house prices and a weaker dollar. How does that address that problem at all? Keep in mind that when we make a major purchase it is not only the home price but all of the upkeep and the increases in all of our other bills (because of that weaker dollar) that will likely make home affordability WORSE and have the exact opposite effect. On the other hand, higher interest rates would see the prices fall and the dollar possibly regain some of its strength.

I would really like to hear how prices are going to come down when every answer does nothing but kick the can down the road a little farther.

While the current group of “leaders” appears to be at least attempting to put us on more solid financial footing do not be surprised that the damage has already been done. I am not just talking about the last administration either. We can go all the way back to Richard Nixon and point out the major mistakes that have led us to this point.

It is imperative to remember that when this bubble finally bursts it is not just the last few years of excess that has to be accounted for but actually over 50 years of fiscal mismanagement.

The “markets” have no basis in reality. It is all stock buybacks, cheap money, speculation, and manipulation. If the central bank were not out there buying stocks, bonds, etc. the prices would be FAR lower to reflect actual VALUE.

If the major banks and the Fed were not suppressing the price of gold and silver, they would be exponentially higher. Basically, because of the manipulation you are paying an EXCESSIVE premium for most stocks, and you can get many hard assets- gold and silver in particular on sale- just like the central banks around the world are doing. Watch what they do- not what they say!

Be Prepared!

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