Confounded Interest – Anthony B. Sanders
Financial Markets And Real Estate
Gold and silver. Gold is now outperforming the Stock Market over the last 30 years.
Silver is up 10% on Friday.
Silver (XAG) just hit the $79.2708 price point.
Dino’s song. A shout-out to David Freiberg on the Gibson SG bass and John Cipollina on the Gibson SG guitar. I love the Gibson SG!
Case-Shiller home price indices are out today. The Case-Shiller NATIONAL home price index is up 1.5% on a year-over-year basis, but down -0.30% on a month-over-month basis).
Don’t worry. The Fed won’t stop printing money.
Of course, CPI data release has been delayed thanks to the US Federal government shutdown (aka, the Schumer Shutdown). But never fear, the Federal government is continuing to spending like the proverbial drunken sailors in port. The Federal debt just breached the $38 trillion mark.
And the Federal budget deficit just breached the $7 trillion mark. Why? Too much Federal spending! The Federal government COULD raises taxes, but that would strangle the economy. But politicians in DC are terrified of not being re-elected, so they are terrified of cutting spending.
What about The Federal Reserve? M2 Money printed by The Fed now exceeds $22 trillion and The Fed’s balance sheet is now around $6.6 trillion. Can The Fed print our way out of the debt crisis? Think of the Weimar Republic with its hyperinflation due to excessive money printing.
The only way out is to drastically cut Federal spending. Or we could rename the US Dollar as the Reichsmark.
Any wonder why gold and silver prices are through the roof?
The Federal government is having a party! A spending party requiring massive growth in Federal borrowing AND Fed M2 money printing.
Federal borrowing has increased by 56% since Covid in 2020. And Fed M2 Money increased by 43.2% since Covid outbreak.
M2 money velocity (GDP/M2) is now at 1.392.
As of Q2, interest payments on the national debt exceeds spending on defense.
Despite being shut down by Democrats and Chucky Schumer, The Federal government and Federal Reserve continue to borrow and print money like crazy.
Participants in the mortgage market are hoping for relief in the mortgage market when The Fed lowers rates tomorrow.
But the reality is the the bond market is expecting declining short-term rates, but not much change at the 10-year tenor.
Mortgage rates have fallen since October 23, 2023 as the yield curve has gradually steepened.
So don’t be surprised if The Fed cuts rates tomorrow and there is little or no reaction in mortgage rates.
Under The Federal Reserve, the purchasing power of the US Dollar has declined -97% since the establishment of The Federal Reserve in 1913. It is the House of the Dying Dollar.
Under The Federal Reserve, the purchasing power of the US Dollar has declined -97% since the establishment of The Federal Reserve in 1913.
Of course, Trump II is only 9 months old and Biden had 4 long years to destroy the dollar.
Nobody pisses away money like Washington DC.
The Fed lost another $653 million last week, bringing total realized losses to more than $236 billion since Sep ’22.
Nothing has been the same since the financial crisis and Bernanke’s overreaction.
California Governor “Greasy Gavin” Newsom wants to be President of the USA. He will fit right in with the other spendthrifts in Washington DC.
Keep on printing is the song of The Federal Reserve. But its the same all over the world as global central banks are printing zads of money too.
Bitcoin keeps on growing in price as global M2 Money supply keeps on growing.
And the same is true for ethereum. It keeps growing as M2 Money keeps growing.
It is another example of government gone wild!
Tavi Costa at Crescat Capital (founded by my former MBA student at University of Chicago Kevin Smith) produced this excellent chart of silver prices showing the cup and handle of silver prices.
The rise in silver prices corresponds with a deterioration of the US bond market. Look at Treasury futures courtesy of Bravos Research.
Of course, Washington DC’s insane spending has led to insane money printing by The Feral Reserve.
Everyone in Washington DC deserves a “Silver Cup of Failure” for uncontrolled government waste and spending and mismanagement by The Feral Reserve.
It’s Gov’t Gone Wild! That includes The House, Senate, President and Federal Reserve.
The purchasing power of the US Dollar was $1004.4 on 1915-03-01. By 2025-05-01, the purchasing power fell to $31.1, a loss of 97%. Public debt since the last year of GW Bush, Obama/Biden (with a brief hiatus with Trump) rose 317% since January 2009.
M2 Money printing grew 210% since January 2009.
Confounded Interest - Anthony B. Sanders 
You must be logged in to post a comment.