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Ripple Effect

From Two Centuries to 27 Months

Loading ...Addison Wiggin

August 7, 2025 • 2 minute, 34 second read


debtparbolicsoaring debt

From Two Centuries to 27 Months

We’ve honed in on the dangers of soaring debt since well before the founding of the Grey Swan Investment Fraternity last year.

It’s been the focus of our life’s work — and that of many esteemed economists and investors for decades before that.

But we can’t help but feel like things aren’t just getting worse — they are at a faster rate.

Well, we’re right. Debt isn’t just soaring, it’s gone exponential:

Turn Your Images On

We’re gonna need a taller chart soon enough.

In the past 27 months, more debt has been created in the U.S. than during the first 215 years of the Republic.

That kind of exponential move isn’t sustainable. Like tulip prices in 1637 or shares of Cisco in January 2000, it can’t last. The question isn’t whether this will collapse — it’s whether or not we get a massive market run first.

That seems to be in the cards — what Austrian Economist Ludwig von Mises called the “crack up boom.”

And it’ll be fueled by a combination of debt and the collapse of the purchasing power of the dollar. Not a company’s earnings or AI spend. That won’t be a typical bull market — it’ll be a terrifying one.

~ Addison

P.S. For the first time in living memory, a principal economist at the Fed has openly explored the mechanics of gold revaluation.

To be clear, the U.S. government still officially values its 261.5 million troy ounces of gold at $42.22 per ounce, a relic from the early 1970s.

But what if — as Ray Dalio, Elon Musk, and even the Chinese central bank seem to believe — the U.S. is preparing for a new monetary regime?

According to Musk’s new Grok model, revaluing the U.S. gold stash to today’s ~$3,380 spot price would generate an $873 billion paper windfall.

That could be used to expand the Fed’s balance sheet, issue new certificates, or offset the nation’s eye-watering debt load.

Dalio added on X: “The U.S. dollar used to be backed by gold. It’s not farfetched to think we may be headed there again… Once people lose trust in fiat, the pattern repeats: print, inflate, devalue, and return to gold.”

Meanwhile, China is preparing. Their gold deliveries against futures contracts have doubled in the past month.

The signal is clear: when the faith in fiat falters, the old gods of money — gold, silver, hard assets — tend to return.

We know that relative to money supply creation, gold prices are still undervalued — as are many other metals and commodities in general.

We continue to like gold as a long-term store of value, and this quarter’s earnings reports from gold miners are showing signs of life across the resource sector.

While this market rally continues, by all means, take some profits in high-flying trades. But it’s still safe to stay invested in parts of the market that are rising for fundamental reasons.

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)


The Grand Realignment Gets Personal

January 13, 2026 • Addison Wiggin

Sunday night, Powell addressed the probe head-on in a video post — a rarity. He accused the White House of using cost overruns in the Fed’s HQ renovation as a pretext for political interference.

The White House denied involvement. But few in Washington believed it.

What followed was bipartisan condemnation of the investigation. Greenspan, Bernanke, and Yellen co-signed a blistering rebuke, warning the U.S. was starting to resemble “emerging markets with weak institutions.”

The Grand Realignment Gets Personal
A Rising Sign of Consumer Stress

January 13, 2026 • Addison Wiggin

Estimates now indicate that the average consumer will default on a minimum payment at about a 15% rate – the highest level since a spike during the pandemic lockdown of the economy.

President Trump’s proposal over the weekend to cap credit card interest at 10% for a year won’t arrive in time to help consumers who are already missing minimum payments.

Not to fret, the other 85% of borrowers continue to spend on borrowed time. Total U.S. household debt, including mortgages, auto loans, student loans, and credit cards, reached record highs in late 2025, exceeding $18.5 trillion. This surge was driven partly by rising credit card balances, which neared their own all-time peaks due to inflation and higher interest rates.

A Rising Sign of Consumer Stress
Protest Season Amid the Grand Realignment

January 12, 2026 • Addison Wiggin

There’s an old Wall Street maxim: “Don’t fight the Fed.”

This year, you could add a Trump corollary.

A wise capital allocator doesn’t fight that storm. He doesn’t argue with it. He respects it the way sailors respect the sea: with preparation, with humility, and with a sharp eye for what breaks first.

In 2026, the things that break first are the stories. The narratives. The comfortable assumptions.

Protest Season Amid the Grand Realignment
Breaking: Government Budgets

January 12, 2026 • Addison Wiggin

Total municipal, state and federal debt service costs soared to nearly $1.5 trillion in the third quarter of 2025. Debt’s easy to accumulate when rates are low. Trouble is, you are obligated to refinance them even after rates go up.

It’s also a key reason why the Trump administration is demanding lower interest rates – even if it means reigniting inflation.

Breaking: Government Budgets