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.

Technology is a double-edged sword. We’re still living in the long tail of a hard money, capitalist society – and reaping new technologies out of it.

But the destruction of the purchasing power of the dollar stands to create a crisis – and drive investors back to safe havens like gold.

All these rumors could work out to Intel’s benefit. That’s something no investor can know. What we can know is that the road to recovery will be a rocky one, fraught with disappointments along the way. It is all but certain that at some point, Intel stock will once again be far cheaper than it is today. And at that later date, investors will have far more information to be able to judge the likely success of the promised comeback. We’re not going to buy the rumors. We will wait for the news.

There’s something about big, round numbers that draws investors like moths to a flame.

In the stock market, every 1,000 points in the Dow or 100 points in the S&P 500 tends to act like a magnet.

Now, after consolidating for five months, gold has broken higher to $4,000.

AI stocks are running hot. They’re not the only game in town… but they’re about half of it.

JPMorgan just reviewed all of the 500 companies in the S&P 500. A full 41 of them are AI-related. While that’s less than 10% of the index by total, it is over 45% of the index by market cap.

Technology is a double-edged sword. We’re still living in the long tail of a hard money, capitalist society – and reaping new technologies out of it.

But the destruction of the purchasing power of the dollar stands to create a crisis – and drive investors back to safe havens like gold.

There’s something about big, round numbers that draws investors like moths to a flame.

In the stock market, every 1,000 points in the Dow or 100 points in the S&P 500 tends to act like a magnet.

Now, after consolidating for five months, gold has broken higher to $4,000.

AI stocks are running hot. They’re not the only game in town… but they’re about half of it.

JPMorgan just reviewed all of the 500 companies in the S&P 500. A full 41 of them are AI-related. While that’s less than 10% of the index by total, it is over 45% of the index by market cap.