P.T.I. are the initials for “Printing to Infinity.”

While I have warned for years that this is where we would ultimately end up the US Treasury and Fed- working in unison- have made it clear what their intentions are going forward.

It was not hard to make the call that they would continue to “print” until the money reaches its intrinsic value of near ZERO. The case of this outcome has been recorded throughout history. It is human nature to desire “Something for Nothing.” This is the major reason that gold has been the #1 performing asset since the year 2000. It reflects the dollar being debased. Inflation is not rising prices. Inflation is the conjuring up of cash with no production to back it up. This leads to FAR more currency (dollars in our case) chasing fewer goods. The rising prices are the RESULT of this action.

Once we go down this path- which the entire world is in on- it really cannot be stopped without a catastrophic collapse.

The real problem I see now is that most people are going to assume that since we have pretty much been able to handle exploding debts and deficits that it will continue that way. It is becoming increasingly obvious that the cure in the past (Going deeper into debt to pay off old debts and interest) is quickly becoming the disease that will cause the next few years to possibly be unlike anything we have ever seen.

The main reason I am so bullish about gold is that it does nothing but hold its value. The price can be whipped around by those “in charge” to keep us regular folks out while they buy it cheap, but the value is always there and has been for five thousand years.

It is not just gold that gives us an idea of how badly the dollar has been debased already. Something we can all sympathize with is home prices. If measured in dollars the price of an average home globally in 1970 was $19,300.00. You cannot get a decent new car for that anymore. With the gold price at $35.00 it took 537 OUNCES of gold to buy a home. Today, the global price of a home is $608,000.00. With gold at $4600.00 per ounce, it takes 140 OUNCES of gold to buy a home. In dollar terms, homes have risen in price by 31 TIMES. That is not 31% but thirty-one times. In gold, that same home is about 74% CHEAPER than it was 56 years ago. It is NOT prices going up- it is your purchasing power being destroyed and it is accelerating. (BIS residential property prices, Metal Charts, Reuters gold spot 8-14-26)

The latest antics by the Fed and Treasury will not instill confidence but will ultimately lead to a breakdown in confidence as the latest actions are not a sign of strength but weakness. It is an admission that the debt that has underpinned the global economy for decades is being shunned. Expect EXTREME dollar weakness going forward.

This should be bullish for most hard assets overall.

Another data point that we can all relate to is purchasing power. We see prices rising FAR faster than the “official” numbers imply and we also see wages are not keeping pace.

Zero hedge came out with an article that lists what income it takes to be comfortable in all fifty states. This is for a family of four and means having the ability to have a 50/30/20 outlay. Fifty percent for necessities, 30% for discretionary spending and 20% for saving. In the past, the majority were able to have this type of setup. Today, for many this is just a dream. The numbers tell the story.

The most expensive state is Massachusetts. They estimate that $330,000.00 is the amount needed to live comfortably in that state. The least expensive is Mississippi, still coming in at $188,000.00.

Since we all work for dollars, we price everything that way. We actually have to because there is no anchor since all backing was removed in 1971.

The amazing thing is that if you go back to the early 1920s you were RICH if you earned $20.00 per week. This was roughly the equivalent of an ounce of gold. Needless to say, that $20.00 would now buy lunch- if you skimp. That same ounce of gold (at $4600.00 per ounce) would give you an annual income in dollars just shy of $240,000.00. This should be kept in all of our minds as the future unfolds and the dollar gets increasingly more unstable.

Think of longer-term bonds. If those “in charge” are conjuring up cash and buying those bonds to keep rates low, you will be overpaying. If they lose control and rates rise anyway you may be forced to hold to maturity- which could be a long way off. In addition, the “printing” will erode the VALUE of the sum you receive at the end. You may be planning a luxury vacation, but the purchasing power may allow you to buy dinner. That may sound impossible to many but do a little research and you will find that this is prevalent throughout history. The signs are all there. Rising prices. Then rapidly increasing prices followed by not only higher prices but lack of basic necessities. Just look at Weimar Germany, Venezuela, Brazil, Argentina, and Zimbabwe. What did they all have in common?

Conjuring up cash from nowhere to give the illusion of productivity, solvency, and stability where none really existed. SOUND FAMILIAR? The ONLY reason we have not met that same fate YET (Key word) is that we have had the world’s reserve currency and demand for dollars has allowed us to export the inflation we are creating. The latest actions by those “in charge” are doing more harm than good and hastening our demise into third world status.

Keep in mind that when the music stops those assets being artificially propped up (Stocks, bonds, real estate) they will most likely collapse. On the flipside, those assets being artificially repressed (gold, silver, and most hard assets) could increase in price violently.

Be Prepared!

Any opinions are those of Mike Savage and not necessarily of those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. The information in this report does not prove to be a complete description of securities, markets or developments referred to in this material. The information has been obtained from sources deemed to be dependable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct.

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