Not too long ago, a random billionaire from Texas bought 50 million dollars of Silver Eagles in one order. The news shocked the WallStreetSilver subreddit, and all silver stackers communities as that effectively closed the wholesale market for U.S. silver coins, including so-called junk silver, which reveals how thin the liquidity really is. By the way, about 15% of the order was future mint deliveries. So, that cleaned up the Silver Eagle deliveries for the next few weeks. This is significant to the stackers' community as more and more people escaped dollars; looking for better store of wealth.
The DXY is slowly losing its strength over the weekend. At some point, the parabolic move of DXY will end, and everything none dollar will start to pump. Are you afraid of recession? The phenomena that cause the economy to die slowly; everyone cut their spending, high unemployment rate, and eventually depression – a prolonged crippling negative GDP growth. Imagine your country growing poorer every day and gradually dying for over a decade. That isn't very pleasant, and I think the Fed knows it very well, more than every one of us. The Fed will do everything it can to stimulate the economy and avoid recession, just like in 2016, 2019, and 2020. When the Fed starts loosening the monetary policy again, the obvious things to do are short the dollar and long everything none dollar.
On the other hand, the U.S. national debt is concerning, to say the least. The current debt-to-GDP ratio of the U.S. is about 124.66%. The debt-to-GDP ratio accurately predicts a country's capability to repay its debts by comparing what it owes to its yields. This ratio can also be taken to mean the number of years required to repay the debt if GDP is solely devoted to repayments. 124.66% of the debt-to-GDP ratio means the U.S. needs a year and a quarter of GDP to repay the national debt entirely. That doesn't sound too bad, but according to a World Bank study, countries with debt-to-GDP ratios greater than 77 percent for extended durations undergo a notable slowing in economic growth. Each basis point of debt beyond this threshold costs countries 0.017 basis points of economic growth. It's true that the U.S. is wealthy and privileged, but a further increase in the debt-to-GDP ratio might have a detrimental effect on the economy.
So that's the dilemma the Fed needs to solve. To further increase the crippling debt or let the country fall into a deep recession (it's not transitory, I don't buy it). I'm betting on a dovish Fed. I'm slowly shorting more dollars; collecting more silver, gold, and crypto. But that's just me, what do you think?
