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.

Mining stocks amplify everything. First Majestic went from losing money to 45% margins without building anything new. They just held the line on costs while silver did the heavy lifting.

That cuts both ways. If silver drops hard, margins compress just as fast. Same leverage, opposite direction.

The miners with the lowest costs and cleanest balance sheets will hold up best in a pullback and capture the most upside if the deficit keeps grinding.

Economists at Goldman Sachs said this morning they expect core inflation to finish the year around 2% even while GDP rises at a “surprisingly strong” 2.5% clip.

In our view, their inflation forecast is optimistic. Their GDP call? Modest.

The last time we pumped this much liquidity into the system — 2020 through 2022—the result was a manic asset bubble, runaway inflation, and an epic hangover at the Fed.

Goldman’s optimism has triggered a fresh round of bullish bets: cyclical stocks are rallying, “dispersion” in the S&P 500 is spiking, and the Fed is expected to cut interest rates twice before Jerome Powell gets kicked out of Washington at the end of his term on May 15.

Anecdotally, we’re hearing stories of warehouses full of GPUs sitting unused for lack of energy to power them. It’s a natural feature of the heavy capital investment in new machines. The grid has to catch up!

While Trump’s great reset rolls on in 2026, keep an eye on modular nuclear reactors and increased demand for uranium, natural gas and related resources.

These PM producers are literally printing the most ‘hard money’ that they ever have at these metals prices and record margins here at the midway point in Q4.

If there ever was a time for this sector to get overheated and frothy, this would be it… only that isn’t what we’ve seen playing out.

PM producers are still insanely profitable at even at current metals prices and should be far more valuable based on their margins, revenue generating potential, and their resources still in the ground.