Signs …

I hear many politicians and many wealthy people touting how great the economy is. I really have no reason to not believe that for them, it is great. Those with assets are always happy to see easy money and rising asset prices.

Many people have wondered out loud – how can those “in charge” just keep conjuring up cash in exponentially increasing amounts and not have massive inflation? Actually, we DO have massive inflation-albeit FAR less than I would have envisioned with the type of “printing” that has taken place. Many are just looking in the wrong places.

The inflation that has been most prevalent-SO FAR- has been in asset prices that have become so inflated that the PRICE of stocks and bonds have NO CORRELATION to the VALUE.

Most people, when they see stocks rising, they just ASSUME that the VALUE must be rising also. Where we are now that could not be further from the truth. Stock buybacks, Fed “printing and buying” and outright manipulation have raised the PRICE of most stocks and bonds FAR beyond any VALUE that exists.

With the easy money of the past 10-15 years many companies have bought homes and because of the excess demand for housing most of our young people look at home ownership as an American nightmare rather than the American Dream. Big companies and banks win- we lose.

An eye-opening report by Accounting Insights notes that in 1984 47% of 30-year-olds owned homes. Today only 33% own homes. That means 2 of every 3 people starting out cannot afford to buy a home. The amount of 30-year-olds that were married and owned a home was over 70% when I was starting out and today stands at 13%. That is a stunning collapse in the ability for those starting out to build up equity. (ASSETS)

While those at the top are feasting on rising assets and cheap “money” those at the bottom are already struggling to stay afloat LONG before the real inflation is likely to hit. There are many signs like:

· According to the Federal Reserve 37% of all Americans could not pay for a $400.00 unexpected expense without taking a loan or using a credit card. With millions losing their jobs this is a clear and present danger.

· According to Investopedia 67% of all Americans are living paycheck to paycheck. This generally means that they are relying on the next paycheck to fund current living expenses.

· It appears that as people get more desperate, they are looking for even more ways to get by. Many have taken out home equity loans and run up credit card bills. It appears that many are tapped out- evidenced by rising defaults and past due payments. Now we have a company like Yendo, Inc. which allows you to use your car (which probably still has a loan on it and is a depreciating asset) that will give you a credit card so you can access cash with a mere 3% ATM fee and a modest 30% interest rate. This appears to me to be a last resort for anyone.

· If it were not for government spending our GDP would only be a fraction of what is reported. Announcing DEBT as growth is an extraordinary way of fooling the public. It makes our “numbers” appear strong as the economy is obviously collapsing right before our eyes.

· The divide between the “rich” and the “poor” is even greater than just prior to the Great Depression. Stock PRICES have never been so high in relation to VALUE. That is likely why the greatest stock investor of our time has a record $350 BILLION + in cash and T Bills. This while the public piles in not only with cash but record amounts of margin. Margin is a loan taken out to invest. It will amplify gains on the way up but can accelerate losses and lead to forced selling when the music stops.

· Personal and corporate bankruptcies are surging. According to Cornerstone Research over the last 12 months there were 32 mega- bankruptcies (Companies with over $1 Billion in assets), up 25% from the prior 12 months. 117 large companies ($100 million or more) up 44% from the average of 2005-2024. Overall, Federal court data shows that total filings rose 11.5% for personal and business bankruptcies in the first half of 2025. Keep in mind that when a public company defaults the common shareholder loses 100% with NO CHANCE to rebound. Balance Sheets Matter! Do you think things are GREAT for these people?

· Credit card Debt is growing at 9.7% and outstanding balances have reached over 1.2 TRILLION with 14% of that number being 30 days or more overdue. Lower income households are at 22% delinquency rates while higher income households are at 8%. 11.3% of student loans are delinquent. 5.8 MILLION borrowers were 90 days or more past due. (Information from Perkins Thompson)

· Jamie Dimon- probably the most influential banker in the world- is warning on bad loans. According to MarketWatch (JP Morgan Chase & Co Chief Executive Jamie Dimon warned Tuesday that when it comes to bad loans, if there is one, more are likely to emerge, especially if the economy weakens). I believe he should have said- if it gets even worse because the economy is at best anemic. It is obviously on Fed intervention life support.

· City, State and Federal government “budgets” are being hit with rising costs for everything. Taxes alone cannot fix the problems. Many promised pensions are so underfunded that we are probably not far away from seeing that monster arise in the near future- stock and bond “markets” meltdown or not.

My point here is that many problems reveal themselves at the weakest point. In this case those with few assets and a meager income. Remember that ALL DEBT IS A PROMISE TO REPAY. We are seeing MASSIVE signs that many- if not most of those promises will likely not be kept. The central banks know it. Anyone paying attention knows it. That is why gold, silver and hard assets are surging. Those “in the know” are getting ahead of what is likely to be the biggest bust that has ever existed caused by unfathomable amounts of debt that the numbers indicate can NEVER be paid off with the currencies keeping anywhere near today’s perceived value.

Be Prepared!

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