We seem to be drifting in a strange calm. Gold has circled around the $3,350 level for three months, silver has held in a narrow band, and traders now wait (at the time of writing) for Jerome Powell’s Jackson Hole remarks to provide direction. A single dovish word could send the dollar lower and real yields down, while a stubborn tone might test investors’ faith in the Fed’s ability to navigate inflation and growth.
But beneath the surface, the illusion of stability is unravelling. Bolivia has just monetised forty-four tonnes of gold for three billion dollars, a reminder that when dollars are scarce, bullion still works. In the United States, subprime borrowers are defaulting faster than during the global financial crisis. The Federal Reserve’s main liquidity buffer has collapsed by ninety-seven per cent, leaving the system exposed. And Washington has already reached a debt milestone that the Congressional Budget Office didn’t expect until the next decade.
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Investors, meanwhile, appear split between denial and foresight. Ordinary households are pouring billions into equity ETFs at record valuations, while institutions quietly sell. Howard Marks, the veteran investor who has called every major downturn of the past three decades, warns again that the cycle is near exhaustion. Yet the S&P continues to climb, fuelled by seven companies that now account for a third of its weight.
Geopolitics only sharpens the picture. Peace talks are dismissed as failures because they did not escalate war. Sanctions designed to punish Moscow have instead bolstered Putin’s domestic support while Europe absorbs the cost. The Doomsday Clock is now closer to midnight than at any point in history.
In this week’s GoldCoreTV episode, we examine the illusions sustaining both markets and politics: illusions of endless growth, painless debt, and permanent conflict. And we explain why central banks, who know these illusions cannot last, are hoarding gold at the fastest pace in half a century.
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