The BIS is warning of a rare “double bubble.” The double bubble is supposedly because gold and stock share prices are moving up in unison. Traditionally, when money is going into stocks the price of gold stagnates and when people panic the price of gold usually is the beneficiary. Thus, you have two assets that are usually uncorrelated.

Today, they are both moving up together. While the BIS is viewing this as a bubble I am viewing it from another angle. What this is saying to me is that because of all the “printing and buying” taking place not only here but globally- the message I am getting is that prices are rising because currencies are falling at an accelerating rate and the stock “markets” and gold are predicting FAR higher prices in the future.

The main difference going forward, in my opinion, is that gold always has intrinsic value and many good, solid companies offer somewhat the same. The problem with most stocks today is that the majority of companies have a lot of debt that could cause a default in the future that could result in a 100% loss with no chance of bouncing back. While stocks may help in keeping up with inflation, I believe it is imperative that the stocks being held should have strong balance sheets, be in a sector that has a bright outlook and strong earnings. At this point I also believe that any stocks being held should have a product that people have to have. With the economy struggling it is likely that many discretionary purchases will be far lower than in the recent past.

As far as gold, silver, and most hard assets are concerned, the future appears to favor these assets because they are actually ASSETS and not somebody else’s promise to repay.

There was no mention of bonds, which, in my opinion, are likely the riskiest of all positions.

The reason I believe that bonds are the riskiest asset class at this time is that I see no long-term path to decent inflation adjusted returns. The very act of “printing” money dilutes the currency that the bond is going to pay you back in over time. In a best- case scenario, the bond will pay off over time but lose much of its purchasing power. The longer the time until maturity is and the more risk you are taking because of currency debasement. In a worst-case scenario if the “printing” stopped you could see a loss from anywhere up to 100% depending upon the underlying fundamentals of the bond.

While most people think bonds offer safety, I don’t believe this has been true since at least the year 2008 when all conventional assets rose together from 2003-2008 and they all collapsed together in 2008. The traditional portfolios that held stocks and bonds and counted on the bonds to have stability during stock market corrections were disappointed at that time. Even if we go back to the dotcom bust and subsequent pullback of all the indexes from 2001-2002 the bonds functioned as expected and gave decent returns to buffer the losses in stocks. That all changed in 2008 when the Fed started “printing” and has led to all assets rising together yet again.

Many have called our latest bubble the “everything bubble.” The likely reason is that so much “money” has been conjured up out of nowhere that prices have been bid up into the stratosphere. The sad part is that the VALUE people are purchasing these assets at has NO CORRELATION to the price being paid. The current valuations of most stocks are so high there is no historical precedent. This is all great until it’s not.

In possibly a real reveal it was reported on Wednesday morning that Blue Owl- a private funding entity that has been issuing loans that, in many cases, the banks were reluctant to issue loans for, has backed out of a funding deal for Oracle. To me, this is a clear sign that what I have previously written about just may be true. That the AI buildout may not have a pot of gold at the end of the rainbow. It is possible that others are now seeing the gravity of having so much debt to service prior to having meaningful revenues. This could be a serious and possibly a fatal problem for some entities.

I hope that anyone who has a large stake in this area is keeping a close eye on this. My belief is that this could be worse than the dotcom bust in 2000. The main reason is the flood of easy money and off the charts speculation.

As many review the past year and start to make plans for 2026 a thorough review of your holdings should be on your planner. 2026 looks to be VERY interesting- that doesn’t mean good or bad but there are MANY ominous signs out there right now.

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 purport 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 reliable, 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.

Commodities are generally considered speculative because of the significant potential for investment loss. Commodities are volatile investments and should only be a small part of a diversified portfolio. There may be sharp price fluctuations even during periods when prices are rising overall.

Precious Metals, including gold, are subject to special risks including but not limited to price may be subject to wide fluctuation, the market is relatively limited, the sources are concentrated in countries that have the potential for instability, and the market is unregulated.

Diversification does not ensure gains nor protect against loss. Companies mentioned are being provided for information purposes only and is not a complete description, nor is it a recommendation. Investing involves risk regardless of strategy.