Key to sound economy is sound money.

 THE END TO FIAT CURRENCY IS COMING

WEST'S ECONOMIC PROBLEMS ROOTED IN FALSE PREMISE

Fiat currency, has been embraced by every country on earth. The United States ended its backing of its currency in 1971 and every nation on earth has followed. Historically gold and silver were considered money and often a paper receipt was issued to facilitate easy transactions. These paper receipts were redeemable in gold or silver. This has been the traditional role of money since ancient times. It is always the temptation of rulers, bankers and governments to first debase the currency by making coins smaller and then issuing more receipts than actual metal. In past times a private banker who engaged in this fraud was often the victim of vigilante justice as many had their savings stolen in this way.

In the 20th century, governments have universally debased their currency and often through propaganda convinced the populace that this was a sound practice in the modern economy. We were told that this currency no longer needed to be convertible or exchanged for a real asset, but it was guaranteed by the full faith and credit of the issuing government. In reality, it was fraud plain and simple. We were told that the goal was to keep the debasement of your savings at 2% a year as this was now the sound currency of the modern age. It was taking advantage of the citizens by slowing stealing their hard earned labor and savings and allowing all governments to make saving a losing proposition. All currency became not an asset, but represented the debt of the issuer, to be repaid in more debased currency. 

We are now at the end of this fiat currency fraud. It is obvious that the largest economy in the world is soon unable to finance even the interest on this massive debt. Most western nations are in the same boat. The real savings of its citizens is now hostage to financing government debt rather than real investment in producing companies and infrastructure or wealth building endeavors. While most of the leadership hope to keep this Ponzi scheme going it is now having to compete with an alternative, that just by its very existence, will end the present fiat currencies.

While it is going to be a painful transition, it is inevitable that the present debt based system is now on its death bed, it can not be saved by more debt or more imaginative financial instruments. Attempting to save this corrupt system by war or force or intimidation will only make the transition that is necessary only more painful. 

 

Will Trump solidify his foreign policy in 2026?

 POSSIBLE CHANGES COMING IN THE ADMINISTRATION

30 AMBASSADORS COMING HOME

Only a few days and it will be 2026, is Trump going to make major changes at his 1 year mark? While some direction is becoming more obvious there still seems to be an intentional vagueness in much of his foreign policy. Some believe it is just that his administration does not know what to do, this could be true, or that there is fear of challenging the entrenched powers both at home and aboard. 

It does seem Trump has made his decisions about Ukraine, he is out, or at least moving out. There is not any up side to continuing to throw good money after bad on a no win situation. That coupled with the fact that he may believe he can restore some reasonable relations with Russia that can help in solving issues in other areas. This may be true since Putin has showed himself to be very pragmatic in addressing mutually beneficial policies. I would expect that that trust will only be counted on with a case by case condition. 

Then there is the trade disputes still all over the place. A stable trading system needs to materialize to accomplish positive trading improvements. Trump's experiments with trade punishment has had little effect and may be causing more damage to the U.S. than to China or Russia or others.

Then there is Israel and Iran, yesterday it seemed Trump was saying yes to Bibi, but Bibi better be careful, when it come to going to war, it may still be NO. Trump and the U.S. cannot afford war with Iran, it will have massive repercussion both economically and politically. While Trump is often called unpredictable he has no history of gambling on long shots. There needs to be some solid and transparent decisions  made on this subject, Bibi cannot go to war without Trump's support.

Then there is Venezuela which seems more about the involvement of China into South America. Refineries in the Bahamas, a oil transfer station in Venezuela and then there is the $3 billion port in Peru with proposed rail links across the continent. This is going to bypass the Panama canal and provide access to most of South America. Brazil is a founding member of BRICS and China is now the major trading partner of most of the South American countries. This situation is going to be a difficult problem for any U.S. administration and military force is unlikely to be effective. The reality is that trade with China has become a very mutually profitable endeavor for those who are trading partners of the manufacturing giant of the 21st century.

Trump has had 1 year to experiment with different approaches to complex problems, it is now time to make transparent and difficult decisions as to what can be expected in the next 3 years.

Navigating into new global realities.

 TRANSITIONS EVERYWHERE

CAN IT HAPPEN PEACEFULLY?

As we soon exit 2025 the world is in a period of massive transition whether we want to admit or not. We see that some crisis are still ongoing, Ukraine where it is unlikely any peace will be achieved without a clear winner and loser. We can expect Ukraine will continue to be a smaller nation when this transition is accomplished. The UK may soon be in the process of replacing Zelensky.

In Africa, we are now seeing the coming pushback by western powers in response to the changes underway. The trend is the elimination of the remnants of colonial rule, and with it the loss of revenue for European powers. French troops have been expelled in Mali, Burkina Faso, Niger, Chad and Ivory coast. These countries have also ended their dependence on using the French colonial franc as their currency. They are now often trading their resources, which they have renegotiated more control over, in gold or other currencies of their trading partners.  The U.S. presence in these areas has also been reduced and security training and intelligence is being replaced by Russian private contractors.

The recent missile strikes by U.S. in northern Nigeria, just on the southern border of the above counties may be an indication that the U.S. is desiring to exert influence in the region, maybe an opening test. It is becoming apparent that Africa is rising on the concerns of the western powers.

Today Israeli Prime minister Netanyahu is again coming to Washington, we can assume this is another attempt at gaining support for military actions against Iran. One would wonder how any substantial action against Iran can impact the plans of Trump for domestic reforms all dependent on lower energy prices. A conflicting strategy with  a war with Iran. Israel has also just announced the recognition of Somaliland, a breakaway region of Somalia, an indication that Israel is now willing to expand its influence into Africa.  

It is appearing that there may not be any war with Venezuela, nor a exit of Maduro from the country, one may expect that some sort of compromised face saving deal is in the works.

The U.S. announcement of $11 billion in offensive military sales to Taiwan has been received with vehement anger from China. Retaliation has been taken by sanctioning by suspending all material sales to all the major U.S. defense contractors. Material that they need and cannot be replaced elsewhere. We can expect that the economic reprisals will expand until someone cries uncle. 

We can expect an escalating economic and political decline in the Eurozone until there is marked change in direction. 

2026 will undoubtedly see a continuing transition from the Post WW2 economic and political structure. Hopefully it can be done in a cooperative fashion that will be peaceful and prosperous for all involved. 

Gold and Silver new records. Bubble or new normal?

 WHY ARE MONETARY METALS RISING?

INDICATION OF FUTURE INFLATION?

Today gold is trading at $4487 per ounce, silver is at $69.64 per ounce, a truly remarkable phenomenon. Gold has risen 71% in the last year and 11% in the last 30 days, silver rose over 100% in 2025. It many ways it resembles other bubble mania's of the past. In the late 1970's we saw a similar rise with daily records and buying with long lines of people selling jewelry and coins. Much of the rise at that time was due to double digit inflation brought on by new social policies with big deficits and momentum from the Vietnam war.

While some are tempted today to sell off their holdings of metals, many have doubts of replacing their metals with deteriorating dollars or other fiat currencies all with a doubtful future of being a store of asset value. 

In the 1970's much of the buying was retail collectors, today much of the buying is by Central banks and large investors. The wild ride was halted in 1980 when the federal reserve raised interest rates to near 20% and 30 year mortgages exceeded 18%. At that time the debt held by the nation, industry and consumers is infinitesimal compared to today. The U.S. debt had mushroomed from $286 billion in 1960 to over $900 billion in 1980 and 26% of GDP.

Today the national debt is $38 Trillion and 123% of GDP. Any attempt to raise interest rates substantially would result in total economic collapse. That is one huge difference between 1980 and today. 

Prior to the decoupling or ending the redemption of dollars for gold in 1971 gold was set $35 oz. and then reached $800 in 1980 and silver to $48 at that time. The price then traded down until a low in 2000 of $267 oz. Much of this decline was realized by changes in trading rules and then the massive liquidation by Eurozone central banks to obtain a certain credibility of their fiscal solvency to qualify to adopt the Euro which began in 1999 and was completed in 2002. It was a massive buying opportunity for those who understood the fiscal future of the western democratic socialist countries.

Today much of the buying is in the global south and the BRICS countries and they are taking physical possession of these metals, not just trading paper contracts.  Many now are expecting push back from the Comex and the London Bullion exchange to raise margin requirements and possibly even suspend buying in an effort to reduce the price. There is speculation that these Bullion banks in New York and London have been trading more contracts than physical metal exists and if the buying continues they will be exposed and ruined. 

In 1980 the Comex and London exchange had total control of the price of these commodities today there are new exchanges in Shanghai and Moscow that trade actual metal and not paper contracts. Today silver is trading in Shanghai for $73 and oz. compared to $69 for future contracts in western exchanges. This is called backwardation and indicates a shortage of the physical product.

Much of the price hikes we see is the effects of the desire by investors and banks to lower their holding of dollars and U.S. debt, this may only be stemmed by actual balanced budgets in countries with fiat currencies and that is now a political impossibility. They are in fact betting large on very high increases in inflation in these countries.

Another possibility is that U.S. has been able to, in fact, export inflated dollars around the world thereby allowing running massive deficits without suffering from the usual inflation caused by these deficits. Importing lower priced goods for these dollars kept inflation at a manageable level and still allowed massive increases in government spending. 

That is now changing as many countries are now trading in their currencies and often settling in gold, thereby reducing the need for dollars in many of these trades. Those so called excess dollars then are being exchanged for gold or silver and other commodities and U.S. stocks and even real estate investments thus causing a rise in the stock market and real estate above the ability of many citizens to afford.

While this phenomenon is ongoing it may continue and actually escalate, until it runs out of buyers. The quickest way to eliminate those excess dollars is a massive decline in Stock and Real Estate prices, thus destroying Trillions of inflated dollars and even the price of gold and silver, but the gold and silver will still translate into increased buying power but at lower prices. Dollar or other fiat assets can be wiped out entirely.

More and more countries and big investors see that these trends brought on by decades of fiscal irresponsibility and mismanagement are no longer controllable or reversible. You have to decide if this is just another asset bubble or an actual resetting of the global financial system.

Lusting after Russia's assets.

 ROUND 2 OF FLIGHT FROM WESTERN SYSTEM BEGINS

CONSEQUENCES OUTWAY BENEFITS

This week we watched possibly the beginning of the unraveling of the Eurozone experiment. In 2022 the EU and the United States froze the assets of Russia on deposit in western institutions. It immediately kicked off a reaction of other nations beginning to flee their exposure to dollar and euro investments in favor of Gold and other assets, not at risk to the western financial system. This week the EU attempted to seize those assets in an effort to pay for the continued funding of the Ukraine project.

A lengthy argument was made by Belgium prime minister Bart DeWever that this was a very dangerous idea, not from military risk, but from the destruction of the western financial system, a system that is built on trust, and setting precedents having lasting consequences.

So, $300 billion in assets have been frozen, $145 billion held by Euroclear in Belgium, $50 billion in Japan, who has clearly stated, they are not touching these funds. The other nations who have frozen funds have refused to identify what or how much of these funds they have in their possession, one must wonder why?

Belgium made it clear that they would not be responsible for these $145 billion. So, the EU hoped to spread the liability to all its members. The liability is that there is no law or precedent in international law that allows this seizure. DeWever made it clear that there would be years of  litigation and a high risk of losing in court.

He also believed that credibility of Euroclear, which hold assets from all over the world, would be put in jeopardy and assets would soon be fleeing their jurisdiction.

He also stated that Russia still has access to over $1 Trillion in western assets inside Russia, frozen but not yet confiscated. This week, Russia filed a lawsuit to demand their assets and reparations for their lose of their use and interest. While any such judgment may not be recognized in the EU, they may be recognized in China, or other friendly government to Russia. The EU has been confiscating the interest and bond maturity of these assets for 4 years.

So a vote, which requires unanimous approval, was taken and Belgium. Italy Hungary, Slovakia and the Czech republic voted no. Some suggested that they change the voting rules, another no. This idea was now dead, at least for now.

Then they proposed that they take out a loan by the EU, a loan using future reparations from Russia as colleterial, something unprecedented.  90 billion Euro's or $105 billion in dollars and the liability to be spread out among all members. This is supposed to be given to Ukraine in no interest loans that they believe will allow them to fight for another 2 years.  Most estimate that Ukraine needs $5 billion a month just to keep the government running.

Hungary, Slovakia and the Czech republic refused to vote for this, claiming they had no authority to levy this liability on their taxpayers, an idea that has long become irrelevant in much of the western world. They then exempted these three from contributing to the loans and it passed. It has yet to be reported how these loans will be financed, but seems to be irrelevant. One can assume that most of this money will end up paying for weapons from the EU and the US.

It seems that much of the basis for this continued hope of Ukrainian victory is coming from a unified belief from Ukrainian and western intelligence agencies that Russia will fold before the west. Objective independent analysists are universally dismissing this assumption. After years of false information, weapons of mass destruction, Russia will collapse in weeks, one has to wonder if there is an agenda other than national interest.

The goings on this week in the EU, coupled with the U.S. now seizing a second oil tanker with lawful Panamanian registry and carrying Chinese owned oil and the pursuit of a third vessel which seems to be resisting boarding, we can expect global repercussions possibly starting this week.  Actions have consequences and I doubt if any of these leaders understand where this will end.

The moves to seize Russian assets by the Eu, The Netherlands U.S. prompted seizure of Chinese chip maker, Nexperia and now seizure of vessels on the high seas and attacks on oil vessels in the Mediterranean can only lead to military conflict in the near future.

Today we see that both Gold and Silver have ramped up to record highs as an indication that the flight from western paper assets to metals is accelerating. 

Trump reveals, it is about OUR oil.

 TRANSPARENCY SHOULD TRIGGER INTERESTING DEBATE

SHUDDERS ON WALL ST. AND WASHINGTON

You got to give it to Trump he really does say what he is thinking. Yesterday he said that that Venezuela took our oil and our lands and now they must give them back.  I suspect 90 % of global countries that have a history of being on the wrong end of colonialism sat up straight at that one. I suspect that the neocolonialists in the UK, France and on Wall street are aghast at Trumps honest remark. Now we have to see what members of congress want to say about this, do any of them have any guts or will we hear a deafening silence. They may be in one of those lose, lose situations, you have got to love it.

We assume Trump is referring to the oil rights that were nationalized by Venezuela 20 year ago. Suits were filed and awards were won by oil companies and others, some received some money, Conoco Phillips was paid $2 Billion in 2024. Many of the awards were not paid. 

Resource extraction of oil and minerals is a very expensive proposition, often taking a decade to produce a return. It is expected that long term contracts are a necessity, a contract is often advantageous for both the companies and the countries with the resources. I have no idea about these contracts, but those companies have a right to be compensated for their loss. Contracts for extraction are not a perpetual claim on the resources. We expect they have an expiration and then a new contract can be negotiated.

I expect that if Venezuela had access to markets, they could easily pay off the awards that they owe. It does seem that some would rather claim ownership of the resources rather than pay for them at market price.

Many of the disputes we see today starting with Iran and the overthrow of their elected government in 1953, Iraq's oil fields stripped and given to the British created Kuwait. The Libyan regime change operation were all about western countries lust for control of their oil. Russia's resources are looked at with envy by western countries. The reality is they would all gladly sell them as much oil as they want, but that is unacceptable, as they would grow prosperous, and that is never acceptable.

Trump's words yesterday will be echoed around the world, probably already has. It will raise the issue of colonialism in much of the world. If we remember in the last year we witnessed Ukraine selling the UK 100 year leases for their resources and control of their ports and infrastructure, colonialism pure and simple. No wonder the UK and France and others are so set on Ukraine prevailing, they will be able to intimidate Ukraine more easily than Russia.

John Bolton fretted that Trump ruined the hope of acquiring Greenland with his public comments. Has he now lite a bright light on the colonialism still being attempted around the world. He must really be stupid or?

There is no reason a negotiation can't be made for Venezuela to pay off the awards they owe. Of course, they will need to sell things to come up with the money, sounds like a reasonable solution to me.

Trump kicks off 2026 campaign.

 NO ANNOUNCMENT ON VENEZUELA

GET READY FOR DUELING NARRTIVES

Last night Trump kicked off his first national address for the 2026 campaign. We can now expect an avalanche of rebuttals of Trump's claims. We will have wait to see if his predictions will materialize. 

Having hardly recovered from the 2024 campaign, we can soon expect the adds, mailers, speeches and interviews in an attempt to sway voters. I expect that it will revert back to the former strategies, all about personalities  and personal attacks. Trump gives the opposition lots of ammunition to attack him personally. One must wonder if Trump believes that if he can bait his opposition into making him the main subject of their campaign, they will most likely lose again. 

It seems the Democrats do not have much in the way of personalities or polices to challenge the Trump status quo. There is still no real leadership to excite voters, no Bill Clinton, no Barack Obama and if they had a viable candidate like Joe Manchin, he could not win a Democrat primary.

There were rumors that Trump was going to announce hostilities against Venezuela, if it was planned, it was scraped before the actual speech. I suppose the democrats should hope Trump gets involved in some regime change war as it could be the their best hope of winning in the near future, by suppressing the votes of those who are vehemently against any more wars of choice.

Trump laid out the bait to the Democrats, keep opposing ICE and deportation of illegal aliens, a loser for the dems and reinforces attacks as being unamerican and all that goes with it. I am sure he will keep reminding them of thier woke polices and the support for transition surgeries for children and the dems cannot dare change their position.

Same goes for war, the dems now support war and it is unlikely that they will really oppose an interventionist foreign policy. That and the fact that they have no opposition policies or ideas to solve the many problems facing the nation, other than raising taxes on the rich and promising more benefits that cannot be paid for. They no longer have any realistic policies except Trump bad, Maga bad. 

The country would be well served if there was a real opposition showcasing ideas that could be viewed as viable. I don't see any, I suspect that is the result of years of rewarding mediocracy as their main goal.