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

both

Dollar is down~11% ytd. Silver is up 76%

It's fiat that's going down everywhere.

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.

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.

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

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.

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

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.

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.

Wsj had a great explainer on this today:

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

(Sorry, archive.ph not responding)

   1.  Divergent market signals
   •   Gold has surged (~50 %+ over the past year) and the dollar has weakened, suggesting investor fears that governments may resort to inflation (i.e. currency debasement) to ease debt burdens.   
   •   But bond markets—especially through long-term inflation expectations embedded in yields and inflation swaps—are relatively steady and show little sign of expecting runaway inflation.

   2.  Why the disconnect?
   •   The article posits that different investor motivations may be in play. Gold’s rally might be driven not purely by inflation fears, but by geopolitical risk, central bank reserve behavior, and rate cuts/expectations of falling yields.   
   •   Meanwhile, bond investors appear anchored by beliefs in central bank discipline, moderate inflation, and weak job growth, which limit inflationary pressure in the view of bond markets.

   3.  Longer-term concerns still loom
   •   Over the long haul, the mismatch between rising debts, low taxation, and persistent spending may force a reckoning: either austerity or inflation. The article suggests many politicians will prefer the inflation route.   
   •   But for now, that outcome seems distant. Bond markets are not pricing in that scenario imminently.

   4.  Possible scenarios ahead
   •   If economic growth maintains momentum and the recent softening in jobs is transitory, the Fed might reverse course—undoing rate cuts or raising rates. That could challenge gold, stocks, and bonds alike.   
   •   Only if policymakers allow inflation to run unchecked (or effectively “print money”) would the “debasement trade” fully materialize.

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.

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.

> 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.

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.

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.

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 do you pick 25 years? If you measure, say, the 25 years ending in 2022, the Dow is up measured in gold. It's only the last 2 or 3 years that gold has taken off like a rocket.

There is a time to buy, a time to sell, stocks and gold go through clear cycles where one outperforms the other, currently stocks have been outperformed by gold for 25 years.

My kids bought silver recently and are up 17% in about 2 months.

I hear this from time to time, and yet for 55 years, having decoupled from gold, untold wealth has been generated. It is as though the economy is not zero-sum.

I mean, you can't use it in any meaningful way as currency without involving the "fake" dollars, whys it the real one? It's hard to even talk about it without mentioning those other dollars!

Have to imagine someone carrying around a real book of laws (maybe they have Leviticus, or the Code Napoleon, or they've got a nice re-chisel Hammurabi's tablets) - unlike the paper law of today

I can't recommend enough that you read "How Countries Go Broke" by Ray Dalio. There's even a free PDF: https://economicprinciples.org/downloads/How-Countries-Go-Br...

Dalio explains the currency cycle, which starts with hard currency, goes through some various stages until there's pure fiat, and then goes back to hard currency.

How do we get to 38oz of gold? 15k sestertii at 8g per 1k would be 120g of gold (aka 4.25oz), right? Also, where do the silver numbers come from?

Interesting approach!