The Federal Reserve (Fed) is done (read powerless). So is the POTUS (President of the United States) and his so called “MAGA – Make America Great Again” (read “fascist”) regime.
Genie is out of the bottle. Horse has left the barn.
Trump is in trouble. That is President of our great country (once upon a time), Donald J. Trump. Only made worse or rather worst by the greatest conman in the world history. He is exposed now thoroughly. His days are over. So is his base. It is finished. The game is over. Days of delusion and evil-intent of “intentional distractions” exploiting “useful idiots” over extreme focus on “real issues” can last only so long.
So is Crypto. Crypto World is in trouble as well. The world that is built upon a flimsy foundation. Not a solid footing. At best it may linger on a couple more years and at worst, it may fold in a few months. Obviously, the crypto as a “technology” lives on for good, though, it becomes dead from the “store of value” perspective as it has been nothing but a tool of speculators and gamblers.
“Cost of Living Crisis” is real for proletariat and the full attention of a “ruling class” is only on “power grab” and enriching themselves. There are plenty of signs of desperation flagged by the ordinary people only to be ignored. Ditto for the administration trying to preserve its power and relevance. Battle rages on and eventually good will prevail over evil.
The inflection point came about due to the uprising of gold – during much of 2025 and in a full gusto in 2026 only to take a little breather and beating in the last few days. Finally.
Long in waiting and sitting patiently. Lion roars while the sheep ate its lunch. In case if you have not noticed, higher the stock market goes based on more and more froth, higher the gold goes now. It has already decided. Clearly, it is taking some beating along with the market for now.
Gold revolt will not stop until the United States crash and burn. Not a pretty picture. We do not want to see it, though, we need to prepare for it. For our own good.
Treasury rate currently plays around 4.25%.
Before we know it, the interest cost alone for the federal government will be close to 20% of all expenditures and more than 60% of the budget deficit.
The reason is simple – Distrust. Trust is broken already. Hence, the revolt. No more tolerance. No more excuses.
Hence, they are both fighting like hell – Trump and crypto for their survival. However, they are not likely to win. Not anymore. Bitcoin, the cheer leader of the crypto world, now faces an existential crisis. Wall Street took many for the ride. It cannot anymore.
In the age and world of extreme political polarization created and fostered by the greatest conman of history exploiting the “useful idiots” to his benefits, the only outcome for American citizenry is discontent, distrust and slowly creeping in misery.
The only thing that can keep this “fascist” straight is the thing what he loves the most – gold. No one else. No other entity can. Completely “out of control man” shall be tamed by this one lion alone. Gold is the weapon of “Dollar Debasement Trade” or “De-Dollarization”.
That is the only force than can work against him. That powerful force will dictate the price of gold and keep him in check. Here is the hoping that it can contain some catastrophic use of power by the psychopath sitting at the highest seat in the world, though, it will not come cheap or without any price to pay. It still will be a significant price to pay for the foolishness of few in two elections – 2016 and 2024.
Faith is lost in the U.S. government. By who? The major actors such as foreign countries. It is not by design, though, it is a result of our own actions here at home. People of America enabled the current messy situation. We went from “bad” to “worse”. Is “worst” yet to come? May be. It is a very high-probability event and quite likely to occur.
Unsurprisingly, crypto world began the war with gold recently – only to lose, of course. Guess who wins? Unreal cannot win against the real. Crypto is picking the war it cannot win. One must have a ‘healthy respect’ for gold. One must surrender to the fact that it is an ultimate ‘real’ tangible asset similar to the real estate property or even stock, an ownership stake in the business.
Live and let live. Coexist. That shall be the mantra. A weak cannot pick the war with the strong. That is the sign of an ultimate foolishness. All sovereign countries act in their best interests just as the U.S. has done all along with the exception of a very recent time period under this “fascist” regime of last one year. That is no rocket science. Just plain common sense, little bit of a wisdom and a sprinkle of history reading.
Gold price exploded during 1970’s economic crisis enabled by the oil embargo as the price rose almost 25-fold – from $35 in 1970 to $850 in 1980. That is a ‘stratospheric’ rise. Then it crashed and went down to about $250. Even at the bottom, it is about 8 times of the original value. Eight times.
That is one big history lesson.
Fast forward now. The gold price literally doubled in last one year alone. What does the future hold? No one knows. Sky is the limit for the gold price until it stabilizes and finds its footing again with the renewed sense of ‘stability’ and ‘vigor’ of this country. Lion will eventually go back to sleep in its cave.
Current situation is all owing to the U.S. profligacy, now exacerbated by the utterly corrupt (beyond words) and rudderless presidential administration. See the chart below. From 2000 onwards, we are steadily becoming more and more profligate. Now, the tolerance limit of major actors has been breached. We are consistently now at 6% deficit as a percent of GDP for a few years with no sign of progress at all.
We tested the limits of the major benefactors and their magnanimity all these years. No more. It is time to pay the piper. Japan started experiencing it recently. Soon, it will be a turn for America.
We covered the deficit topic via a detailed matrix in the following post just before the end of the year: Inspiring Story about 88-Year-Old Working Man: Can We do the Same for Our Country?
When it comes to profligacies – there are three main ones, all aiding each other and fleecing ordinary Americans, hence, the outcome is not bright: United States government, Federal Reserve and Financial Markets.
If we have had any other presidential administration than the current one, they would have realized it promptly and started acting in an urgent manner accordingly. They would be left with no choice. To the contrary, the current administration is simply tone-deaf and the only sound they can hear is ‘ka-ching’ of the White House cash register enriching themselves.
We cannot avoid the disaster, though, we certainly can delay some just as we have been doing it for the past 20 years. A ‘smarter’ country would start taking the necessary steps to avoid the disaster for ever.
“Trump and Trump World” is not interested in solving the problem, except for making a façade out of their sheer ignorance of the issues on hand as well as their inability to tackle any serious issues. With that suicidal approach, they will bring many of us down except for those who are aware. Hence, severe austerities, i.e. budget cuts are coming. That may bring an unanticipated and major economic shock that our highly leveraged systems cannot handle gracefully. Kevin Warsh, proposed nominee as the Fed Chairman, is of no help there, alas, he can make it worse by following the “orders” of our financially incompetent president.
As alluded in the above post, it is possible to gradually reduce the deficit, avoid the disaster and re-enter in a ‘safe’ zone in a couple years, if we put our minds to it. And that is a big if. Basically, we need to bring the deficits back in control just as the J.P. Morgan CEO, Jamie Dimon, continues to shout from the top of his lungs for the longest time. Only, if we were to listen.
Well, if not now, clearly, we will have to do it post-crisis. There is no other way around it. However, that is not smart. That is just plain dumb. Anyone can mend their ways ‘somewhat’ after the crisis. We need to be ‘smart’ and proactive to avoid one. That should be our goal. Let us get our ‘act’ together and avoid the disaster. We have a new sheriff in town already, that is gold, and that can help keep us straight as a country. Pay a fair amount of respect and reverence to the gold price that is a sign of times.
We should not believe in predictions. We should look at the facts only, the reality on hand and assess it “accurately”. That is the only power we have. There shall be no prediction, though our prognosis shall be based on the world history as it is the greatest teacher of all. History never repeats, though, it often rhymes.
Let us face it. Let us admit it. Let us be shine the light on the ignorance. Let us be strong and humble about it as the weakling cannot do it. Forgiveness is an attribute of the strong, not a weak one. Clearly this applies to whoever voted for Trump. The rest are excused.
America has elected the wrong leader. In fact, populace elected a perfect a leader to bring the “ruins” to America quicker. What used to be a slow-motion train wreck is now proceeding at a full-fledged speed heading in the direction of a disaster, not away from it. We are ready to fall of the cliff now at any moment and history will not be kind to us. It can only laugh at us and our foolishness like the rest of the world is already for quite some time.
It is about time to confess in order to make a new beginning, else the worse and worse days are ahead of us waiting to embrace America in the valley of despair.
We are in a crisis already. The only question is when the masses will realize that we are truly in a crisis. Those days are not far from what we see on the horizon. By then, most everyone will agree what a mess we are in.
It is too late already to change much, though, whatever we can salvage is what the focus shall be. For example, the mid-term elections are coming. Coward and subservient politicians who do not serve the general public, rather have fealty to the conman need to be booted out for the new breed. They are the ones who hollowed out the traditional conservative or Republican party. Thereby, the party lost its way and so did the country along with that.
That is the first real opportunity, however, it is still 9 months away. A lot can happen before that. And we need to do the best we can prior to that. Besides, approximately 3 more years are remaining of the current presidential term unless some divine interventions were to occur to our benefit. That is an eternity given our precarious situation.
We already warned of the crisis mode for U.S. three weeks ago via the following post: Crisis Mode Enabled for USA: Ticking Time Bomb (Warning # 1) – Requires Defense & Offense Investment Strategy.
Subsequently, we raised the alarm with a second warning soon after, much sooner than we expected, with the following post just last week: New Sheriff in Town of Financial Markets: Crisis Mode for USA – Warning # 2 (Much Sooner than Expected)
What this new sheriff in town, i.e. gold, intends to do is simply this:
Watch over the “dollar debasement” trade and “de-dollarization” initiative by the countries that can make a difference. Our country needs to learn from that and wise up accordingly. Till then, we will remain in a crisis mode only inviting a misery for more and more people on this beautiful land.
Some great examples of what this new sheriff has accomplished already in such a short time span – of about a year and more so in last few weeks as the new fascist regime brought the wrecking ball to our great country yet the biggest bully of the world had to retreat as follows:
1) Forget about the Greenland acquisition fantasy
2) Pull back of 700 federal agents of U.S. Immigration and Customs (ICE) from Minneapolis, MN, an unfortunate war zone created domestically by this fascist administration and resulting in two untimely deaths of innocents
A while back, in April of 2025, we got the preview of the same when Trump turned into TACO (Trump Always Chickens Out) as he had to retreat from ruinous tariff threats upon a wild reaction by the financial markets, namely the bond yields shooting up close to 5%.
Now is the time to delve a little bit about the impending third (and last) warning. We can lay out our thesis here as to what it will take to issue the third and final warning (#3). It will be commenced at the earlier happening of the following two:
1) A major disruption event in the global financial markets, be it from any corner of the world, though, potentially causing a systemic risk to the markets worldwide
2) U.S. hitting $40 trillion in fiscal debt. It is already over $38 trillion and in a matter of a few months, it is expected to reach a breakneck pace of $40 trillion, after which all hell will break loose
In all likelihood, it may occur sooner than later based on the confluence of many different factors. We would rather not issue the final warning, though, we may be left with no choice.
For context, a great summary of U.S. debt and few other critical items is available at the site
As for the crypto, it is at a full-fledged war with gold which clearly it is losing. Nay scratch that. Crypto is about to get annihilated in a war with gold.
At 3% interest rate for the U.S. government, it will be $1.2 trillion interest cost alone as part of close to $2 trillion total deficit this fiscal year. At 4% rate, the interest rate cost alone will be a devastating $1.6 trillion, which will be eerily close to the total deficit spending of $1.7 trillion last year. Do you now see why the conman is pushing the Fed so much to lower the rates when his other actions are not in congruent with that ask?
With all the short-term treasury issuance, this does not seem far-fetched that we may soon be heading to those days of 4% average interest rate cost for the U.S. government. Hence, we announced the crisis recently via the above listed post. Now, in recent days, we are seeing the effects on the markets already starting with crypto to tech sector.
The interest rates are becoming the highest in a recent history, in fact in a generation or two, after partying like there is no tomorrow for about 4 decades. Enough of partying and time to get serious else the country is going broke.
Trump is “toothless” and he cannot bite or chew any longer. That is good for a change! He will try hard no doubt as he always has; while holding a nose of others, he only will end up making a bigger mess for himself and others. He will continue to make more and mistakes as he fights for his own survival. Unfortunately, the mistakes will only be of a higher and higher magnitude under the current administration as they have never intended to serve the public at large.
For example, the conman started vilifying the Fed in recent times. Adding insult to the injury, even the treasury secretary, Scott Bessent, made a disparaging comment about the America losing trust in the Fed. In fact, it is people losing the faith in presidential administration. Fed is doing what is supposed to do, which is help nothing but the government and banking industry. The Fed has never served the common man.
Hence, it is quite a height of hypocrisy coming from Bessent. This is in addition to a recent comment about ‘Denmark not being relevant’. We all know all too well what happened with the Greenland fantasy and now it is all put to the rest – at least for now. Such irresponsible and incompetent comments coming from the top official of the administration is at a minimum reckless and at worst, it is harming our country’s standing globally as we question the Fed’s motive as if there is not enough damage done to our country.
Fed is simply doing what it is supposed to do. Yes, they goofed up in 2021 and were too late to raise interest rates stoking the worst bouts of inflation. However, they did wise up later and yet if anything, the monetary policy is still loose, too loose from what I can see, helping the U.S. government and Wall Street both.
If we are not super careful now, it will get worse, not better. There is no other way out without a major change. The greatest conman in the world history offered precisely just that – only in the reverse direction, not forward, though, little did we know the greatest shaft in the history owing to the ignorance of certain populace. God save us from ignorance.
Kevin Warsh, the Fed nominee, may be chameleon at best and puppet of Trump at worst – neither option is good for us Americans. At least, Jerome Powell, a current Chairman, stood up against the biggest bully and tried to maintain a balanced pasture for the Fed.
Unfortunately, outcome of all this and the next steps are something we rather not see, though, inevitably, we may end up seeing. That is austerity, a severe austerity, i.e. spending cuts aided by increase in income taxes. There is no other way. We need a sustained path to bring the deficit closer to 3% of GDP and bring back the country from brink or total collapse.
Some level of austerity is a very first step without which it is getting increasingly hard for America to survive in its current form. Later, a series of more advanced and complicated initiatives can be undertaken to propel the economy back into a real growth mode, not just a ‘flimsy’ growth based on the financial engineering or on the backs of one-time AI (artificial intelligence) push.
Both political parties, Democrats and Republicans will have to relent and agree, they have no choice. There is no other alternative. Along with that, we will need plenty of luck and of course the hard work.
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