I heard something that I haven’t heard before from an unexpected source. The great writer Ernest Hemingway described the money “printing” as “TEMPORARY PROSPERITY of excess money printing masquerading as careful policy.”

The fact that we have had the reserve currency since 1942, has allowed us to export our inflation to the rest of the world rather than experiencing the consequences of conjuring up cash from nowhere and since 1971- not backed by anything more than the full faith and credit of the US government.

That faith is now experiencing the most questions across the globe as we are running $2 TRILLION deficits (that we admit to) that don’t include many things. Like Rodney Dangerfield said in the movie Back to School when the professor was setting up costs for a new company “You left out a LOT of stuff”. In our government’s case, the wars, Social Security, Medicare, Veteran’s Benefits, etc. are NOT part of that already monstrous $2 TRILLION annual deficit or part of the over $40 TRILLION that already exists.

While many can see that this is an obvious problem, the loss of respect and lack of confidence in our rule of law across the globe along with our bullying and bombing have left us with few friends and even our staunchest historical allies are buying gold and selling treasuries at a time when the funding needs could not be more acute. In addition to that, many countries are in the same boat of unpayable debts (without conjuring the cash up) and are acting in their own interests to keep their currencies elevated and their bond yields compressed leaving them with little ammunition to buy treasuries and in many cases SELLING.

The Dollar index is measured against other currencies rather than in GOLD. This gives the illusion of strength even though our purchasing power is being sapped at an increasing pace. Measured in GOLD the US dollar purchases less than 1% of what it purchased in 1971 when the dollar still had a gold backing. Don’t think so? Oct. 6, 2026, GOLD price $4163.00. Price in 1971 was $35.00. Do the math. It lost 99.159% of purchasing power vs REAL MONEY-GOLD.

The sick part of this is that gold should be FAR higher in my opinion. In the 1970’s COMEX was set up to keep the price of gold restricted so that the actual demise of our purchasing power could be disguised.

We are all told to look at the S&P 500 index and assume “all is well”. At first glance that seems fair. Looking behind the curtain, 440 of the S&P 500 companies are down 20% OR MORE in the last 12 months. That means just a few companies are carrying the entire edifice and with the circular financing deals, energy and zoning problems, rising rates and societal pushback, the bottom could fall out at any time. This doesn’t even account for the private credit and commercial real estate problems hiding in plain sight.

Another interesting point that I have made in the past is that this time it WILL be different. In the past when stocks sold off the US dollar gained in strength. People are conditioned to believe this is the way it is. Things have changed. The dollar and treasuries no longer looked at as the safe haven play. GOLD has now assumed that role since nobody has to rely on someone else’s promise to repay. Also, for 5000 years gold has held its purchasing power where NOT ONE fiat currency can say the same. In April when the S&P pulled back 18% the dollar FELL against their DXY counterparts and rates ROSE.

While the Fed and Treasury will do all they can to prolong the suppression of rates it appears they are already losing control-particularly in the long end. Who trusts the USA 10-30 years from now when the entire paradigm could change in 10-30 minutes.

In addition to the fact that we have to issue FAR more debt than there is demand for, a large reason that rates are rising is that INFLATION is roaring across the globe. This is a major reason that global interest rates are rising.

While many are hopeful (as I am) that this war will end soon there is a sobering fact that many have not thought of. I expect FAR HIGHER inflation going forward for the foreseeable future.

Larry C Johnson, former CIA analyst and commentator interviewed Karl W Miller and in it Mr. Miller stated, “The damage to Gulf energy infrastructure is not a disruption that ends when the shooting stops”. Mr. Miller expects the damage (as it is now with no further damage) to take $1.16 TRILLION with costs now. If costs rise it could go from 2.5 TRILLION to nearly $5 TRILLION. In addition to that, he estimates that the work would not be completed for 5 years. Since the IEA, USA and others have released hundreds of millions of stored oil and diesel into the market the actual price shock is likely just a month or two away. As many know, oil, diesel, etc. are MAJOR components of nearly every economy.

A couple of major points:

· Combined Russian and Gulf exports are 1.6 MILLION barrels per day below February’s output.

· Global Oil stocks have fallen 507 MILLION barrels since February- likely higher now since last week the IEA released another 100 million barrels to keep the illusion of normalcy for another month or so. The US is near the end of what can be drained from our strategic reserve already.

· Global refineries in August produced 4.2 million barrels LESS than in August 2025.

· Global releases just DELAY the day of reconning. It is a postponement of reality- not a replacement for it. In addition, not only will supply likely be insufficient but those drained reserves will have to be replaced- likely at a FAR higher price as the world bids for precious resources.

In looking at history, it appears to me that the Fed/Treasury complex will do all it can to protect the bond “market” and the dollar’s purchasing power will get crushed even faster. That is what history says will happen. Hopefully, there is some plan in the works that will prove me wrong, but we are at the end of the road. It appears to me that another of Hemingway’s quotes that the debt and spend fantasy would end with the “permanent ruin of currency debasement and war.” I don’t follow all wars, but I have studied MANY fiat currency experiments that all ended the same way- permanent ruin of the currency.

The only surprise is how long we have kept the illusion of solvency and abundance alive not only here but in most developed countries. Get ready for massive changes- COMING SOON.

Be Prepared!

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