Weekly Nuggets #33
This thirty-third edition of the Weekly Nuggets reinforces the growing sense that the global economy is entering a far more unstable and fragmented phase.
Geopolitical tensions in the Persian Gulf, renewed inflationary risks, persistent fiscal imbalances, and mounting strains inside the global monetary system increasingly suggest that the era of abundant liquidity and predictable globalization is fading away.
The material gathered this week highlights how financial markets and policymakers are struggling to adapt to this new environment. While governments continue to pursue industrial policy, monetary interventionism, and strategic competition, investors are simultaneously reassessing the role of hard assets, commodities, and gold within portfolios. In particular, the recent surge in demand for US dollar liquidity amid Middle Eastern tensions serves as a reminder that, despite recurring narratives about de-dollarization, the dollar-based system remains deeply embedded in global finance.
Importantly, skepticism toward traditional fiat frameworks continues to intensify. Several of this week’s discussions revisit the themes of sound money, monetary credibility, and structural inflation, while others explore the possibility that global markets may be entering a prolonged period of stagflationary pressure and resource scarcity.
As always, the Weekly Nuggets does not seek to forecast short-term market moves, but rather to identify the deeper structural currents shaping the macroeconomic landscape. Increasingly, those currents point toward a world defined by monetary uncertainty, geopolitical rivalry, and the gradual repricing of real assets.
Tweets/Notes/Posts
1/ In the end of the day, though, it all boils down to gold being an inflation hedge. This is why gold rises in the long term.
2/ How moronic?! The Indian rupee is not falling because the high gold demand has widened the trade imbalance. The reality is that Indians are buying gold, in part, to protect from the currency debasement.
3/ Speaking of moronic, “sophisticated” investors are apparently even worse. All the same, I bet these idiots have high-yield zombie tech stocks in their portfolios.
4/ What’s really sad is to realize that these fools have nonetheless seen their wealth surge, while those who have noted the absurdity of the financial system perform poorly.
5/ Fortunately, this insane state of affairs may be on the verge of turning. Clearly, the cheapness of the hard assets is looking pretty attractive.
6/ Certainly, there’s a precedent. Hopefully, we won’t relive in full the 1970s’ stagflationary experience.
7/ However, so far in this decade, stagflation has not eluded us.
8/ Moreover, with the oil market disruptions, the likelihood of a massive spell of inflation and economic stagnation is anything but negligible. Nevertheless, it is also possible that we’ve witnessed the worst of it.
9/ If you’re looking at the oil futures market for guidance, you’re wasting your time. You’d better do some due diligence… or go with the flow and hope for the best.
10/ How interesting! After the bubble, when the internet and related activities effectively grew in terms of adoption, the number of jobs in this sector gradually decreased. The exact same trend is unfolding now.
Cartoons/Memes
1/ Is this MAGA?
2/ Many have tried to write this book. No one succeeded.
Podcasts/Interviews/Presentations
1/ Back to the Founders: Dr. Shelton on the Constitution, Gold, and the Future of the US Dollar | In Gold We Trust [EN]
Commentary
In this remarkable featured interview for the upcoming 20th anniversary edition of the In Gold We Trust report, Ronnie Stoeferle sits down with renowned monetary economist Dr. Judy Shelton for a timely and thought-provoking discussion on the future of the international monetary system. Against a backdrop of accelerating de-dollarization, geopolitical fragmentation, and record-high gold prices, Shelton revisits foundational questions about money, sovereignty, and trust.
What makes this conversation especially compelling is Shelton’s ability to connect today’s monetary challenges with the constitutional and philosophical origins of the US dollar itself. Drawing on Jefferson, Madison, Hamilton, and Bretton Woods history, she outlines a bold vision for restoring monetary credibility through gold-linked bonds, a more disciplined Federal Reserve, and ultimately a renewed gold-based framework for global finance.
Far beyond a discussion about gold prices, this interview captures the broader themes that have defined two decades of our partner’s In Gold We Trust report series, ranging from inflation and monetary disorder to geopolitical power shifts and redefining markets, along with the enduring search for sound money. To conclude, it’s a fitting and intellectually rich preview of what promises to be a landmark anniversary edition.
2/ Why Global Demand For Dollars (And Gold) Is Spiking — Jeff Snider Explains | Monetary Metals & Eurodollar University
Commentary
In this compelling conversation on the Monetary Metals channel, Jeff Snider of the Eurodollar University dissects the hidden fractures inside the global dollar system and explains why seemingly disconnected developments, from the Iran conflict and dollar shortages in Dubai to the private credit unwind and the rise of a deeply K-shaped economy, are in fact symptoms of the same underlying monetary dysfunction.
Essentially, Snider contends that the modern financial system is no longer governed by transparent market signals or sound monetary foundations, but by a fragile and increasingly distorted web of offshore dollar liabilities, central bank interventions, and structural imbalances. Viewed through that lens, instead of an anomaly or speculative mania, gold’s powerful rally since 2018 is a rational response to a deteriorating global monetary order.
Particularly striking is the discussion about younger generations becoming disillusioned with what they perceive as capitalism. Seeing that the affordability crisis is preventing them from reaching the financial milestones that are typical as youngsters advance into adulthood, socialism has gained traction.
Obviously, much of this frustration stems from a misunderstanding of the current system. What exists today is not a genuine free-market regime. As a matter of fact, we live in a heavily interventionist framework shaped by central banks, political incentives and chronic monetary distortions.
Be that as it may, being a young adult myself suffering the same economic malaise, you have to cut us some slack. If even trained economists are totally ignorant about these facts, you can’t blame Millennials and Zoomers from being as well.
Quotes
1/ “Since [October 2020], commodities are up 210%... That period from 23-24, oil traded sideways to down, but gold ripped… the rotation may have changed but the trend was the same; it’s just a straight line… By the way, the NASDAQ was only up 125%. Commodities were nearly 2x what the returns you got from owning technologies. This is not a new story; I can’t get anyone to buy it, though.” – Jeff Currie.
2/ “The economy is doing well. We’re just creating more inflation. If you’re creating more inflation with the economy doing well, then the path for bond yields, is going to be higher. I think we’re probably going to see that 5% yield in the next year.” – Jim Bianco.
3/ “The United States is short power, short compute, short chips. There are going to be shortages in all three. We just don’t have enough compute power right now… I actually believe a new asset class will be buying futures of compute.” – Larry Fink.
Charts
1/ Needless to say, it’s hard to imagine the weight of the materials sector to fall further.
2/ Notwithstanding, the broad stock market is bound to keep on soaring. Even if the multiples remain constant, the surge in earnings will drive equities higher.
3/ This was inevitable. On the bright side, there will be more roaming space.
Articles/News
1/ The Chinese Equity Bull Market Quandary
https://research.gavekal.com/article/the-chinese-equity-bull-market-quandary/
Commentary
In this insightful research piece, Louis-Vincent Gave explores the growing possibility that Chinese equities may be entering a new bull market phase, despite widespread skepticism among global investors. Rather than focusing solely on China’s property downturn or debt concerns, Gave highlights the country’s rising industrial competitiveness, technological progress, and improving market liquidity as the primary drivers of future performance.
What makes the analysis particularly compelling is Gave’s nuanced view of opportunity within the Chinese market. Thus, he identifies attractive areas across technology, industrials, dividend-paying financials, and deeply discounted consumer and internet stocks, arguing that investor pessimism may now be overlooking important structural strengths within the Chinese economy.
Ultimately, the piece challenges the prevailing bearish consensus on China and suggests that markets may be underestimating the country’s long-term industrial and technological transformation. Of course, those familiar with Gave’s work are hardly surprised by his positive outlook. Maybe the Chinese have finally figured out a way to make socialism work as promised.
2/ Reindustrialization The First Domino Has Fallen
Commentary
In this interesting Substack article, Jay Martin discusses reports that the United Arab Emirates approached the United States seeking dollar swap lines amid rising tensions in the Persian Gulf. The piece correctly emphasizes the importance of dollar liquidity in maintaining financial stability during periods of geopolitical stress.
However, Martin’s conclusion that this development signals a breakdown of the US Treasury market is difficult to sustain. If foreign governments and central banks are rushing to secure US dollars and dollar-denominated assets, that is not evidence of collapsing confidence in the dollar system, but rather proof of its continued dominance.
Simply put, swap lines exist precisely because the US dollar remains the backbone of global trade, energy markets, and international finance. In moments of crisis, institutions do not flee the dollar. In truth, they seek more of it. Far from exposing the irrelevance of the dollar system, the UAE episode highlights how indispensable it still is.