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.

In the past, weapon systems took decades to build and changed slowly. Autonomy changes this. For example, new capabilities developed by field tests or simulation (testing scenarios in full physics simulators depicting actual environments) could be downloaded to existing weapon systems, making it possible to upgrade a weapon system significantly without any meaningful hardware changes. A process of improvement that used to take many years would shrink to weeks and, in time, days.

Markets heard what they wanted. NVIDIA’s stock surged premarket on news that Trump would discuss the company’s Blackwell AI chip with Xi, pushing it to an unprecedented $5 trillion valuation.

Meanwhile, China quietly bought its first cargoes of U.S. soybeans this season — a symbolic gesture that reminded traders that diplomacy still runs on trade.

“It’s not détente,” wrote Bloomberg’s Jennifer Welch this morning, “It is a dealmaking with a timer.” Wall Street is ambivalent on peace, but they do like profits.

In the background, China’s biotech sector continues its ethically murky sprint forward — this week, reports surfaced of Chinese scientists creating monkeys engineered to exhibit schizophrenia and autism.

A high concentration of capital in a few stocks at the top ranks high among the features we detailed in Anatomy of a Stock Market Bubble.

On days like yesterday, headlines urge investors to buy. However, they also underscore the fragility of this terrifying bull market: just a handful of names can make the difference between a big up day and a big down day.

America’s role in the world isn’t that of the world’s policeman (a temporary post-World War II role foisted upon the U.S. due to the Cold War) or as the destination of immigrants (for most of the 20th century, when we saw the most significant increases in individual incomes and quality of life, the U.S. didn’t accept many immigrants). Instead, the role the U.S. has played throughout its existence is as the world’s leader in the production, adoption, and socioeconomic integration of new technologies. We figured out how to do it successfully first, and the world followed.

Markets heard what they wanted. NVIDIA’s stock surged premarket on news that Trump would discuss the company’s Blackwell AI chip with Xi, pushing it to an unprecedented $5 trillion valuation.

Meanwhile, China quietly bought its first cargoes of U.S. soybeans this season — a symbolic gesture that reminded traders that diplomacy still runs on trade.

“It’s not détente,” wrote Bloomberg’s Jennifer Welch this morning, “It is a dealmaking with a timer.” Wall Street is ambivalent on peace, but they do like profits.

A high concentration of capital in a few stocks at the top ranks high among the features we detailed in Anatomy of a Stock Market Bubble.