It’s All About that Monetary Base

August 19, 2025 • 1 minute, 36 second read

Despite a frozen real estate market, home prices remain near record highs. Your local market may vary, but affordability is still out of reach for many.

Fortune noted over the weekend that homebuyers in their 70s now outnumber those in their 30s. It’s part of a demographic trend.

By this age, Baby Boomers owned 21% of the nation’s wealth. Generation X, a little less at 14%. But, Millennials, the first of whom are now turning 40, own just 4.3% of the national bounty.

That stat alone should raise eyebrows.

But the bigger issue isn’t demographics — it’s the system we’ve lived under since August 15, 1971.

Once the dollar was removed from gold, asset prices — homes, stocks, everything — have been driven higher not by productivity gains but by the steady erosion of purchasing power.

Turn Your Images On

Priced in gold, not dollars, homes roughly what they were in the 50s and 80s. (Source: X/Twitter)

Homes priced in gold:

In 1950, the middle-class home cost about $8,000—or 150 ounces of gold.
Today, 150 ounces of gold equals roughly $510,000. That’s more than the national average home price of $421,000.

Gold continues to hold purchasing power across decades and currencies. Whether measured in houses or in stocks, the message is the same: the dollar loses ground, gold does not.

Yesterday, for the first time, we saw an independent gold survey suggesting that gold would match the trend we see in gold prices, sending prices still higher from here.

~ Addison

P.S. Still, the Fed is expected to cut rates in September. With lower rates, mortgages would trend lower and the housing market may thaw—but only because debt gets cheaper, not because the economy is stronger.

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.

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

Dave Hebert: How Long Could That $1.8 Billion Powerball Jackpot Fund the Government?

September 16, 2025 • Addison Wiggin

Our fiscal reality is clearly unsustainable. With the passage of the “Big Beautiful” budget reconciliation bill, Congress has already given itself permission to grow the national debt to $41 trillion. Interest payments on the national debt are already the second-most-expensive item on the federal budget, behind only Social Security (and ahead of defense spending). As the national debt continues to grow, debt service will become our number one spending obligation. History suggests it’s only a matter of time until we hit that limit and, unless things change, once again raise the debt ceiling. This cannot continue indefinitely.

Dave Hebert: How Long Could That $1.8 Billion Powerball Jackpot Fund the Government?

When Trust Runs Thin, Markets… Rally?

September 16, 2025 • Addison Wiggin

Bloomberg’s September survey of economists found that the majority are “somewhat or extremely worried” that the Fed’s decisions will be influenced by political loyalties.

If that happens, borrowing costs for the U.S. government rise as risk premia creep into Treasury markets.

Public confidence is already threadbare.

In 2001, 74% of Americans trusted Alan Greenspan to do the right thing. In 2025, only 37% say the same of Jerome Powell. For the first time, trust in Trump to manage the economy is higher than trust in the Fed chair.

The Tech Meltup, Exhibit A

September 16, 2025 • Addison Wiggin

Overall, the S&P 500’s RSI hit 70, the low side of overbought territory — for the entire index.

“Fed rate cuts tomorrow are likely priced in,” writes portfolio director, Andrew Packer, “it may not trigger a selloff, but at these levels, investors may be disappointed with a .25 cut.”

Tech investors will remain bullish on the prospect of multiple rate cuts over the next few meetings.

But be wary of any indication the Fed tries to rebuff Trump’s overtures and, God forbid, remain independent tomorrow.

Plowshares into Swords

September 15, 2025 • Bill Bonner

The empire is in decline. Demographics, regulatory tightening, fake money and the mis-allocation of trillions of dollars (much of it on pointless wars) have sapped the vitality of the economy. The Federal government gets bigger and bigger, but there is no longer enough output to pay for it.

The interest on the debt alone takes more more than a trillion dollars a year. The US faces a financial crisis. And for the first time in history, our children face a poorer future.

The welfare state model no longer works; the center — consensual democracy — wobbles towards the extremes. What to do? Beat our plowshares into swords?