Source of the “Debasement Trade”

The global money supply is growing quickly.

Still.

M2 — cash — is up $8 trillion in the past six months alone.

Annualized, global money is growing at a 12% rate. That’s 6 times the Fed’s 2% inflation target, and over 4 times the current pace:

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While headline inflation is still under 3%, global money supply has grown 12% annually since 2020. (Source: Croseus_BTC via X)

Gold dropped nearly 2% yesterday. But with the massive increase in fiat currencies globally, that’s an opportunity to buy more cheaply.

With that much cash sloshing around the system, the “debasement trade” is a go.

Still.

~ Addison

P.S. Tomorrow on Grey Swan Live! — Thursday, October 23, at 2 p.m. ET — we’re going down the Anatomy of a Stock Market Bubble: the impressive list of historical records this terrifying bull market has already hit — including retail investor buy-in, record margin debt and capital concentration at the top of the S&P 500.

We’ll also lay out in simple terms the AI crash scenario. Mostly, so you’re aware of what’s at stake, where we think this market is going.

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As Andrew Ross Sorkin, author of Too Big To Fail, said this week while promoting his new book “1929,” if we’re all in agreement this is a bubble in AI stocks, the trick is to “know when to get on [and more importantly] get off, the wave.”

Then, on Friday, October 24, at 2 p.m. ET, we’re going to do a comprehensive asset allocation and model portfolio review for paid-up annual members of the Grey Swan Investment Fraternity.

During the review session on Friday, we’ll be giving you access to an exclusive Plunge Protection Plan (for annual members only), including ways you can protect your money against a stock market correction and a few aggressive ways you can make money like the pros when the stock market goes down.

(Note: You still have time to subscribe and get the Plan on Friday. Click here for details.)

We’ll be providing more details throughout the week. But for now, mark your calendar for these two dates:

Thursday, October 23, 2025 @ 2 p.m. ET — comprehensive overview of the “terrifying bull market.”
Friday, October 24, 2025 @ 2 p.m. ET — a comprehensive review of the Grey Swan asset allocation strategy and model portfolio. (For paid up annual members only)

The time to prepare for a market correction is before it happens, not while or after. If you wait too long, the exits will get crowded in a hurry… and you don’t want to be worrying about your money if and when that happens.

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

The global money supply is growing quickly.

Still.

M2 — cash — is up $8 trillion in the past six months alone.

Annualized, global money is growing at a 12% rate. That’s 6 times the Fed’s 2% inflation target, and over 4 times the current pace:

Turn Your Images On

While headline inflation is still under 3%, global money supply has grown 12% annually since 2020. (Source: Croseus_BTC via X)

Gold dropped nearly 2% yesterday. But with the massive increase in fiat currencies globally, that’s an opportunity to buy more cheaply.

With that much cash sloshing around the system, the “debasement trade” is a go.

Still.

~ Addison

We’ll also lay out in simple terms the AI crash scenario. Mostly, so you’re aware of what’s at stake, where we think this market is going.

Turn Your Images On

Then, on Friday, October 24, at 2 p.m. ET, we’re going to do a comprehensive asset allocation and model portfolio review for paid-up annual members of the Grey Swan Investment Fraternity.

(Note: You still have time to subscribe and get the Plan on Friday. Click here for details.)

We’ll be providing more details throughout the week. But for now, mark your calendar for these two dates:

Thursday, October 23, 2025 @ 2 p.m. ET — comprehensive overview of the “terrifying bull market.”
Friday, October 24, 2025 @ 2 p.m. ET — a comprehensive review of the Grey Swan asset allocation strategy and model portfolio. (For paid up annual members only)

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

As interest rates fell, investors swarmed into real estate, lured by yields and the illusion that home prices never fell. Wall Street’s private-label securitizers were soon packaging everything from pristine mortgages to what were effectively loans scribbled on napkins, thus turning them into bonds that glowed like gold — until you looked too closely.

For their part, the regulators and ratings agencies conveniently looked away and allowed the bubble to grow. Fannie Mae watched the frenzy from the sidelines at first.

The company’s mandate — written in law — was not to chase profits but to promote affordable housing. That is to say, to make sure that teachers, nurses, and other first-time buyers could own their own homes and unlock the American Dream.

But as Wall Street flooded the market with high-risk mortgage products, political pressure mounted. Congress demanded that Fannie “do its part” for low and moderate-income families.

SoftBank offloaded its entire $5.83 billion Nvidia stake to bankroll an even bigger gamble: tens of billions in OpenAI.

Son insists this is his next Vision Fund moment.

OpenAI’s swelling valuation doubled SoftBank’s profit last quarter. He may have sold the pickaxe factory, but he’s betting the mine still goes deeper.

Although consumer debt is at an all-time high, consumers themselves got the message during the last crisis: Pay down debt, own more assets.

That’s taken the U.S. household debt-to-asset ratio to levels last seen in the 1970s, around the time the U.S. went off the gold standard.

A 50-year mortgage doesn’t make housing cheaper. But by stretching the repayment period over time, it DOES lower the monthly payment on your principal. That lowers the percentage of your total income you’re spending on repayment. And in a strange way, it makes sense.

With a fixed rate mortgage and inflation running in the high upper digits, the real value you of your total debt goes down over time (inflation pays off your loan, as long as your income rises faster in nominal terms). Of course you pay off a lot more interest over 50 years than 30 years. And it takes a lot longer to build up equity (assuming also that house prices don’t fall).

For their part, the regulators and ratings agencies conveniently looked away and allowed the bubble to grow. Fannie Mae watched the frenzy from the sidelines at first.

But as Wall Street flooded the market with high-risk mortgage products, political pressure mounted. Congress demanded that Fannie “do its part” for low and moderate-income families.

SoftBank offloaded its entire $5.83 billion Nvidia stake to bankroll an even bigger gamble: tens of billions in OpenAI.

Son insists this is his next Vision Fund moment.

OpenAI’s swelling valuation doubled SoftBank’s profit last quarter. He may have sold the pickaxe factory, but he’s betting the mine still goes deeper.

Although consumer debt is at an all-time high, consumers themselves got the message during the last crisis: Pay down debt, own more assets.

That’s taken the U.S. household debt-to-asset ratio to levels last seen in the 1970s, around the time the U.S. went off the gold standard.