Cash Isn’t Trash, But It’s a Melting Ice Cube

Since its disconnect from gold in 1971, the U.S. dollar’s purchasing power has gone nearly straight down.

That’s created an uphill environment for savers. By the time you can save a buck — after your taxes and expenses — the dilution of the dollar continues to work against those savings.

That’s true of the simplest form of savings of all: Cash in a bank account.

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Even with relatively higher yields on cash today, money in the bank continues to lose value over time. (Source: X/Twitter)

Century-to-date, keeping cash in the bank has been a losing proposition.

The trend was the worst in the 2010s. Although inflation was moderate during that decade, and the Fed was arguably fighting deflation following the Great Financial Crisis, banks largely paid no interest to depositors.

That’s improved since the Fed aggressively raised interest rates in 2022-2023. Investors are almost getting a positive return after inflation.

But with rates coming down, potentially aggressively under a new Fed Chair next year, that trend will worsen.

Add it up, and it’s another reason why gold is a superior form of savings. Cash is more like an ice cube on a summer day – over time, its value will melt away.

~ Andrew

P.S. Remember, the Fed is expected to cut rates in September, with or without a new Fed Chairman.

Such a move risks kicking off a “most terrifying bull market” in stocks, which sends those valuations into the stratosphere before they come crashing down to earth. And it could help gold push higher.

But either way, it’s likely to push the dollar lower — and further punish savers.

Meanwhile, Grey Swan Live! returns tomorrow. We’ll be joined by Matt Clark, Chief Research Analyst at Money & Markets, one of our corporate affiliates.

Matt’s role is similar to mine as Portfolio Director — finding new investment opportunities and sifting through ever-shifting markets.

Matt is the only person I know who can find data and precise numbers faster than I can. Maybe that comes from his days as an investigative journalist.

But with markets hitting an air pocket this week and all eyes on Jackson Hole, this will be a timely and critical chat — exclusively for our paid-up Fraternity members.

If you have any questions for us about the market, send them our way now to: Addison@GreySwanFraternity.com.

Since its disconnect from gold in 1971, the U.S. dollar’s purchasing power has gone nearly straight down.

That’s created an uphill environment for savers. By the time you can save a buck — after your taxes and expenses — the dilution of the dollar continues to work against those savings.

That’s true of the simplest form of savings of all: Cash in a bank account.

Turn Your Images On

Even with relatively higher yields on cash today, money in the bank continues to lose value over time. (Source: X/Twitter)

Century-to-date, keeping cash in the bank has been a losing proposition.

That’s improved since the Fed aggressively raised interest rates in 2022-2023. Investors are almost getting a positive return after inflation.

But with rates coming down, potentially aggressively under a new Fed Chair next year, that trend will worsen.

Add it up, and it’s another reason why gold is a superior form of savings. Cash is more like an ice cube on a summer day – over time, its value will melt away.

~ Andrew

P.S. Remember, the Fed is expected to cut rates in September, with or without a new Fed Chairman.

But either way, it’s likely to push the dollar lower — and further punish savers.

Meanwhile, Grey Swan Live! returns tomorrow. We’ll be joined by Matt Clark, Chief Research Analyst at Money & Markets, one of our corporate affiliates.

Matt’s role is similar to mine as Portfolio Director — finding new investment opportunities and sifting through ever-shifting markets.

Matt is the only person I know who can find data and precise numbers faster than I can. Maybe that comes from his days as an investigative journalist.

But with markets hitting an air pocket this week and all eyes on Jackson Hole, this will be a timely and critical chat — exclusively for our paid-up Fraternity members.

If you have any questions for us about the market, send them our way now to: Addison@GreySwanFraternity.com.

Bitcoin isn’t a trade and trying to time it with chart patterns generally does not work.

I’ve never really felt like technical analysis carried much real predictive edge in general and when it comes to BTC, I’ve seen too many failed “death crosses” to change my opinion.

The one that just triggered in mid-November as bitcoin flirted with $90,000 is just the latest.

What really matters? It’s a monetary regime change – if market participants are trading anything it’s getting rid of a currency (“it’s the denominator, stupid”) for a store of value – and we’re seeing it in spades with Bitcoin and gold.

White-collar hiring is, in fact, slowing. Engel’s Pause is taking hold of the jobs picture.

In the meantime, everyday Americans are rediscovering an ancient truth: there is wisdom in wearing steel-toed boots.

Jobs that struggle to attract bodies in boom times are now seeing stampedes of applicants.

– Georgia’s Department of Corrections: applications up 40%.

– The U.S. military: reached 2025 recruiting goals early.

– Waste management staffing: applications up 50%.

For now, economists call this “labor market tightness.” Anyone who has ever scrubbed a grease trap knows it by another name: fear.

Bitcoin has historically weathered 30%+ corrections while still in a bull market.

Global liquidity fears and lower odds of a Fed rate cut in December are driving bitcoin and other cryptos lower at present.

As Andrew Zatlin described on Thursday’s Live! we can expect a series of stimulus efforts next year, ahead of the midterms, driving new liquidity. The $2,000 “tariff rebate” checks President Trump has been touting are but one example.

When higher liquidity hits the market – in whatever form it takes – today’s bitcoin buyers will be waiting.

Make like the whales, and use market selloffs and stimulus to your advantage.

The market seems to know something about private credit that we don’t. And in a big enough liquidity event for private credit, investors will have to sell off more liquid assets if they want capital.

That’s the danger private credit poses today, exactly at a time when rules are being eased to make it easier for retail investors like us to buy into this asset class.

I’m in the camp that this smells like a way to keep the party going by providing another source of liquidity – the passive investment flows from your regular 401(k) contributions. The smell takes on a sour note as this sector starts to falter.

Perhaps today’s selloff is simply a reaction to declining interest rates, the growth of private credit, and a few inevitable deals that have gone sour recently.