It’s so nice that Janet Yellen and the self-proclaimed grownups are back in charge of the Treasury Department.
Let’s look at the amazing track record since 2020…
They were wrong about inflation.
They were wrong about the Pandemic.
They were wrong about a recession.
They were wrong about the effectiveness of Russian sanctions.
They were wrong about the recent banking crisis.
It was just a few years ago that Janet Yellen said that we wouldn’t see another crisis in her lifetime.
By my count, we’ve had three in the U.S. alone (2018, 2020, 2023).
And Yellen still has a job.
Now Yellen is in charge of managing the U.S. through the pending debt ceiling crisis.
While the President and the Speaker of the House didn’t even bother to meet for 77 days on the debt ceiling, the Treasury Department has been pouring money into the economy and engaging in “Extraordinary Measures” to address the $31.6 trillion in debt now owned by the U.S. government.
Don’t worry, right? The Treasury is completely on top of this.
Get Paid to Be Wrong
Only in government can you be consistently wrong and get promoted. If a roofer were to project that their roof would be 10 feet high, and then the roof ends up being 8 feet high… that roofer would probably still be in jail.
But that’s different when you work in government finance.
You get promoted.
And in the case of Yellen, the Treasury Department must now navigate the ever-expanding balance sheet of the United States.
In the last 12 years, the U.S. debt has doubled.
Do we actually think that we’re going to suddenly become economically responsible? The entire financialization of the U.S. economy relies on debt… and then more debt to pay off the previous debt.
The Government can get away with this because it has a printing press.
The average household? Well, they’d be bankrupt years ago.
We already have projections that the U.S. will explode toward $50 trillion in debt within a decade or so. And that doesn’t count the $186.9 trillion in Unfunded Liabilities at the U.S. level.
What do we think is going to happen?
I anticipate a significant amount of monetary expansion in the future – and that means it’s time to take a defensive stance.
Gold is Your Defense
A 2019 survey of Americans showed that just 12% of the U.S. population owned gold, while 14.7% owned silver.
It showed that 82.4% of the population had no precious metals.
What are these people doing?
If you don’t own gold in this era of economic uncertainty, I don’t know what to tell you. Because the U.S. government has shown very little concern for the security and stability of the U.S. dollar’s value over the last 100 years.
Consider this…
This survey came BEFORE COVID. Before the Federal Reserve printed trillions of dollars and debased the currency.
It came before we saw two straight years of inflation north of 6%.
It came before the debt ceiling debacle, and before we hit $30 trillion in debt.
If we hike the debt ceiling, we’re looking at even more debt, currency debasement, and reduced concerns about the stability of YOUR bank account.
If you put $100,000 in a bank account in 2000, that money would have the purchasing power of about $63,000 today.
But if you bought $100,000 in gold in 2000, that would have the purchasing power of nearly $550,000.
Given the monetary trend, what do you think is going to happen next? I’ll take the gold.
Tomorrow, we’ll discuss the best ways to own gold.
On Friday, we’ll dig into the other commodities to own in this environment.
Oh – and if you missed yesterday’s “The 2023 Debt Ceiling Survival Guide Part I” you can read it right here.
To your wealth,
Garrett Baldwin
Market Momentum is Green
Volumes remain stubbornly low, but this market is finding a way to stay about key resistance lines. Money is flowing back into the financial sector, while 5,200 stocks were losing on the day. What gives? It’s a matter of squeezing people out during an options expiration week. I keep telling people to STOP trying to trade this madness on a week-to-week basis. You need to be looking out at least 18 to 24 months and owning stocks that provide deep value and/or strong inflation busting income.
You’ll get more in-depth market commentary from me as a member of my Tactical Wealth Investor. I just released my mid-month portfolio update this morning. You’ll get immediate access when you join RIGHT HERE.
*This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk.
