Saudi Arabia is reportedly going to the banks to borrow billions of dollars. Saudi Aramco—the state-owned oil giant sitting on top of one of the greatest pools of petroleum wealth on earth—is reportedly talking to lenders as well.

Let that sink in.

One of the richest countries in the world, sitting on an ocean of oil, is calling the banker.

Now, Saudi Arabia isn’t broke. Far from it. There are perfectly legitimate reasons for a wealthy country to borrow rather than sell assets.

But I couldn’t help thinking:

If the rich guys are borrowing too, maybe it’s time we talked about debt.

Because Saudi Arabia isn’t really the story.

The story is that everybody is borrowing.

Governments borrow. Corporations borrow. Consumers borrow. Investors borrow. And increasingly, when we get into trouble because we borrowed too much, our preferred solution seems to be—borrow some more.

If your brother-in-law handled his finances this way, you probably wouldn’t put him in charge of the family trust.

So how did we get here?

HOW DID WE GET HERE?

Let’s take a very quick trip through monetary history.

In 1933, Americans effectively lost their ability to exchange dollars for gold.

Then came Bretton Woods in 1944. Much of the world tied its currencies to the U.S. dollar, while foreign governments and central banks could still exchange those dollars for American gold at $35 an ounce.

Then, in 1971, President Nixon closed the gold window. Foreign governments could no longer show up with their dollars and ask for our gold.

By the mid-1970s, the international monetary system had formally moved away from gold as its monetary anchor.

And that changed everything.

Gold had imposed a rather inconvenient discipline on governments. You could issue promises to pay, but eventually somebody might show up and ask you to make good on the promise.

Once money was completely separated from gold, that restraint largely disappeared.

The printing presses were off the leash.

And we have been exercising them ever since.

$353 TRILLION LATER...

Today, the world is sitting on nearly $353 trillion of debt.

That’s trillion with a “T.”

It is such an enormous number that it almost becomes meaningless.

So forget the number for a moment and think about what all that debt actually represents.

Promises.

Government bonds are promises to pay. Corporate bonds are promises to pay. Mortgages are promises to pay. Private credit is promises to pay. Credit cards are promises to pay.

We have constructed an enormous financial system based upon one person’s liability being another person’s asset.

And now the pile has reached $353 trillion.

The United States alone carries more than $40 trillion of federal debt, while annual federal interest expense has moved into trillion-dollar territory.

We’re not spending that trillion dollars building roads, bridges, factories or power plants.

We’re spending it for the privilege of carrying the money we already borrowed.

That’s the financial equivalent of using your Visa card to make the payment on your Mastercard.

It works.

Until it doesn’t.

And government debt is only part of the story. Private credit has exploded. Consumer debt is enormous. Securities margin debt has reached extraordinary levels.

Debt isn’t sitting in one little corner of the financial system anymore.

Debt is the financial system.

And here is the part I don’t think most people understand.

The problem isn’t simply that we owe $353 trillion.

The problem is that the $353 trillion has to be serviced, refinanced and continually trusted.

Debt works beautifully as long as the next lender shows up.

But what happens when that lender wants 6% instead of 4%? Or 8% instead of 6%?

Interest expense rises. Deficits get larger. Governments borrow even more money to cover the larger deficits. And the lender, seeing the deteriorating finances, demands an even higher interest rate.

That is how a debt problem can become a debt spiral.

And somewhere along the way, what looked perfectly manageable on Tuesday can become a crisis by Friday.

Debt doesn’t usually send you an engraved invitation before it becomes a problem.

THE WARNING LIGHTS ARE BLINKING

Look at what is happening in the supposedly boring corners of global finance.

Long-term U.S. Treasury yields have climbed to levels not seen in nearly two decades. Treasury has responded by increasing the size of certain long-term bond buyback operations.

Officially, the purpose is to improve market liquidity.

Fair enough.

But when the issuer of the world’s supposedly safest financial asset decides it needs to become a larger buyer of that asset, I pay attention.

Then there is Japan.

Japan may be giving us a preview of what happens when enormous sovereign debt collides with a weakening currency and rising interest rates.

Between July 30 and August 26 alone, Japan spent approximately $96.5 billion defending the yen. On July 31, the United States joined the intervention.

Think about that.

The world’s largest debtor was helping one of the world’s most indebted developed nations defend its currency.

If that doesn’t qualify as a warning light, I’m not sure what does.

I don’t know when the next financial crisis arrives. Nobody does.

But I have become increasingly convinced that when the next genuine black-swan financial event occurs, somewhere near the center of it will be debt.

In 2008, mortgages were the match.

Next time, sovereign debt could be the gasoline.

SOMEBODY IS BUILDING ANOTHER ROAD

And then there is the dollar.

The United States possesses perhaps the greatest financial privilege in modern history: we issue the world’s primary reserve currency.

Countries need dollars for trade. Central banks hold dollars in reserves. Commodities—most importantly oil—have traditionally been priced and settled largely in dollars.

That creates enormous structural demand for our currency and helps America finance deficits under conditions almost no other country enjoys.

But privilege shouldn’t be confused with permanence.

China understands this very well.

Through its Belt and Road Initiative, China has spent years developing relationships involving ports, mines, energy projects, transportation corridors and strategic commodities around the world.

At the same time, it is helping construct financial plumbing that provides alternatives to the traditional dollar-centered system.

CIPS.

mBridge.

Bilateral currency arrangements.

Alternative settlement mechanisms.

None of these replaces the dollar tomorrow.

But somebody is clearly building another road.

And if a meaningful portion of global oil and commodity trade eventually migrates away from the dollar, America’s reserve-currency privilege becomes much more difficult to maintain.

Because if the world needs fewer dollars, it also needs fewer reasons to finance our deficits.

FORGET WHAT CENTRAL BANKERS SAY. WATCH WHAT THEY DO.

This may be the most telling part of the entire story.

Central bankers can give speeches all day about monetary stability and confidence in the financial system.

I prefer watching what they do with their own reserves.

They’re buying gold.

And not a little.

Central banks have accumulated an average of roughly 1,000 tonnes of gold annually over the past four years—about twice the average of the preceding decade. They bought another 289 tonnes in the second quarter of 2026 alone.

And when the World Gold Council recently asked reserve managers what they expect to happen to the dollar’s share of global reserves over the next five years, 74% said it would decline.

I don’t know how much clearer they could make it.

The people who actually manage the world’s monetary reserves are gradually exchanging promises for something that isn’t anybody else’s liability.

Gold doesn’t have a central bank.

Gold doesn’t have a printing press.

Gold can’t default.

Gold can’t declare bankruptcy.

And nobody can create another trillion dollars’ worth of it because an election is coming.

THE POINT OF NO RETURN

Here is the question that bothers me most:

Have we accumulated so much debt that there is no longer a politically acceptable way out?

Mathematically, governments could dramatically reduce spending, raise taxes, balance budgets and slowly reduce their debt burdens.

And I, at 75 years of age, could begin my training to become an NFL quarterback.

Both are technically possible.

The question is whether either is likely.

Politicians operate on election cycles.

Debt operates on compounding cycles.

Those two calendars don’t work particularly well together.

There are only so many ways out of excessive sovereign debt.

You can grow your way out.

Tax your way out.

Cut spending.

Default.

Or you can repay yesterday’s debts with tomorrow’s cheaper dollars.

Guess which one is politically easiest.

I believe governments will ultimately choose the path of least resistance:

More borrowing.

More monetary accommodation when things break.

And over time, more currency debasement.

Currency debasement doesn’t require a press conference announcing that your money will now buy less. It simply happens a little at a time—and by the time everyone recognizes it, much of the damage has already been done.

THIS ISN’T REALLY A GOLD STORY

That may sound strange coming from someone who owns gold and silver.

But this isn’t really a gold story.

It isn’t even a commodity story.

It is a scarcity story.

For more than half a century, the world has dramatically increased the supply of currency, credit and financial claims.

What we cannot dramatically increase is the supply of gold.

Or silver.

Or copper.

Or oil.

Or productive land.

Or many of the critical minerals required to build the infrastructure, electrical grids, data centers and technologies the modern world increasingly demands.

Governments can manufacture another trillion dollars.

They cannot manufacture another trillion dollars’ worth of copper by Tuesday afternoon.

That distinction matters.

Which brings me all the way back to Saudi Arabia.

One of the richest countries on earth is borrowing money while continuing to sit on an extraordinary stockpile of something the rest of the world needs.

Oil.

Maybe there is a lesson there.

The world is carrying $353 trillion of promises to pay.

China is securing access to commodities and building alternative financial rails.

Central banks are accumulating gold at roughly twice the pace of the previous decade.

Japan just spent nearly $100 billion defending its currency.

And the United States is spending roughly $1 trillion a year just servicing its federal debt.

These aren’t unrelated stories.

They are the story.

Capital is beginning to move.

From paper toward things.

From financial claims toward real assets.

From promises toward scarcity.

I don’t believe the dollar disappears next Tuesday, and I don’t believe the financial system suddenly collapses.

I believe something slower—and ultimately much more important—is happening.

After half a century of creating more and more paper, the world is rediscovering the value of things you can’t print.

I don’t know when the debt problem finally forces the world’s attention. I don’t know what the trigger will be, and I don’t know which country lights the match.

But I believe the fuse is already burning.

The question isn’t whether we should be paying attention.

The question is why so few people are.

A FINAL WORD

If you value clear, independent commentary about debt, markets, precious metals and the forces shaping your financial future, please subscribe to Capital & Consequence—and share this post with someone who may benefit from it.

My goal is not to tell you what to think, but to help you recognize the risks before they become consequences.

Important Disclosure

This commentary is not investment advice. It reflects my personal observations and describes actions I am taking in my own circumstances. Readers should consult a qualified financial professional before making investment decisions.

Artificial intelligence tools were used to assist with research, sourcing, organization and editorial development of this article. Robert Katz provides the concepts, analysis, observations, conclusions and final editorial judgment. All opinions expressed are his own.

It has been a wonderful arrangement—especially for us.

But apparently, printing trillions of dollars, accumulating a mountain of federal debt, freezing foreign reserves and using the banking system as a foreign-policy weapon has caused a few countries to become nervous. Who could have seen that coming?

To be fair, sanctions can be justified. Russia’s invasion of Ukraine was not an imaginary event, and the United States and its allies had legitimate reasons to respond. But when the G7 immobilized roughly $280 billion of Russian sovereign assets, other governments noticed. Their takeaway was simple: “If our money is inside the Western financial system, is it really our money?”

That question is helping drive the search for alternatives.

The first system to understand is CIPS—the Cross-Border Interbank Payment System. Think of it as China’s plumbing system for international payments involving the renminbi. It allows banks to clear and settle cross-border transactions without relying as heavily on the traditional maze of Western correspondent banks. It does not yet replace SWIFT, and in many transactions the two systems still cooperate. Nevertheless, as of June 2026, CIPS served 210 direct participants and 1,619 indirect participants worldwide.

In other words, China is not just complaining about the existing system. It is building another one.

Then there is mBridge, a platform originally developed by the central banks and monetary authorities of China, Hong Kong, Thailand and the United Arab Emirates, with Saudi Arabia joining in 2024. It is designed to allow participating banks to make cross-border payments using central-bank digital currencies.

Instead of a payment bouncing through several correspondent banks like a pinball—collecting fees and waiting for everyone to wake up in the correct time zone—mBridge is intended to make settlement nearly immediate and direct. The project reached its “minimum viable product” stage in 2024, after which the Bank for International Settlements handed it over to the participating partners. That means it is real, but it does not mean the dollar has been loaded into a hearse.

The same contest is developing in commodities.

For decades, much of the world has looked to Western markets such as the London Metal Exchange, London’s gold market and CME’s COMEX for benchmark prices. China would understandably prefer that a country consuming enormous quantities of copper, oil, iron ore, gold and other raw materials have a larger role in setting their prices.

The Shanghai Gold Exchange already publishes a renminbi-denominated gold benchmark. Shanghai also trades futures in copper, crude oil, gold, silver and numerous industrial commodities. China is trying to move from being merely the world’s biggest customer standing at the checkout counter to having a say in what appears on the price tag.

This does not mean the dollar disappears next Tuesday. According to the IMF, the dollar still represented about 57% of global foreign-exchange reserves in early 2026, while the Chinese renminbi represented only about 2%. The so-called petrodollar is also not one formal agreement that suddenly expires. It is a deeply established network of oil pricing, trade, banking and investment relationships.

But trends matter.

The likely future may not be one currency replacing the dollar. It may be a more fragmented system involving dollars, euros, renminbi, regional currencies, digital settlement systems and perhaps baskets of currencies. Countries may also hold more gold because gold is nobody else’s liability. A Treasury bond is a promise from the United States. A bank deposit is a promise from a bank. An ounce of physical gold is simply an ounce of gold. It has no counterparty risk—although it still has price, storage and custody risks.

For the American investor, the answer is not to panic, sell every dollar and bury silverware in the backyard. The dollar remains enormously important, and America still possesses deep capital markets, strong institutions and unmatched financial infrastructure.

The lesson is diversification.

If global trade, monetary power and commodity pricing continue shifting eastward, investors should consider reasonable exposure to precious metals, energy, copper, mining companies and other productive hard assets. We should also be cautious about owning only long-term dollar-denominated promises when our government appears determined to manufacture more of them by the trillion.

The dollar may remain king for many years. But the kingdom is getting crowded—and history suggests that kings behave more responsibly when they realize someone else is building a castle.

Chart of the Day to Ponder: Gold has surpassed U.S. Treasuries as a share of a global official reserves.

At the end of 2025, gold represented approximately 27% of global official reserves, exceeding U.S. Treasuries at 22% and the euro at 15%. Much of the increase reflected gold’s price appreciation—a distinction worth remembering—but the milestone remains significant.

A FINAL WORD

If you value clear, independent commentary about debt, markets, precious metals and the forces shaping your financial future, please subscribe to Capital & Consequence—and share this post with someone who may benefit from it. My goal is not to tell you what to think, but to help you recognize the risks before the tide goes out.

This commentary is not investment advice. It reflects my personal observations and describes actions I am taking in my own circumstances. Readers should consult a qualified financial professional before making investment decisions. AI disclosure: artificial intelligence tools were used to assist with research, sourcing, organization, and editorial development of this article. Robert Katz provides the concepts, analysis, observations, conclusions, and final editorial judgement. All opinions expressed are his own.

Sources

Bank for International Settlements, “Project mBridge reached minimum viable product stage,” updated November 11, 2024.

Cross-Border Interbank Payment System (CIPS), worldwide participant data as of June 2026.

International Monetary Fund, Currency Composition of Official Foreign Exchange Reserves, Q1 2026.

European Central Bank, The International Role of the Euro, June 2026; chart data from the IMF and World Gold Council, with ECB staff calculations.

U.S. Department of the Treasury, G7 Finance Ministers and Central Bank Governors’ Statement, October 12, 2023.

World Gold Council, overview of global gold-market structure and price discovery.

Today, the main thing is sovereign debt.

The United States has crossed the once-unimaginable threshold of $40 trillion in federal debt. Long-term Treasury yields recently reached levels not seen in 19 years, and the Treasury responded by doubling certain long-bond buybacks in an effort to improve liquidity and relieve pressure on the market. It worked—but only briefly. Yields declined, the dollar weakened and gold rallied, but the underlying problem did not disappear.

That is because a buyback can improve market conditions, but it cannot eliminate the debt. In fact, Treasury buybacks generally require the government to issue new debt elsewhere. We are rearranging the furniture, not repairing the foundation.

Let’s make this easy to understand.

Imagine a family that has been able to walk into its local bank whenever it wanted and borrow more money. At first, the family uses the money for necessities. Later, it begins using borrowed money to buy a larger house, more expensive cars, nicer vacations and a lifestyle its income cannot support.

Every year, the family earns money—but every year, it spends considerably more than it earns. When bills come due, it does not reduce its spending or repay the debt. It simply returns to the bank and borrows more.

Because the bank has always provided the money, the family begins to believe that the arrangement can continue forever. Its lifestyle no longer seems excessive. It seems normal.

Then one morning, the family walks into the bank expecting another loan. This time, the manager closes the door and says, “We need to talk. We are no longer comfortable lending to you on the same terms. We need a higher interest rate, more security and a credible plan for repayment.”

Suddenly, the family’s entire financial world changes. It may have a beautiful home, valuable investments and expensive possessions, but it does not have enough income to support its debts and lifestyle. It must cut spending or sell assets—probably at the worst possible time.

A sovereign government is not exactly like a household. The United States can tax, issue currency and refinance its obligations in ways a family cannot. But it cannot repeal arithmetic. Eventually, lenders demand greater compensation for inflation, currency risk and fiscal irresponsibility.

For the United States, the bank manager is the bond market.

When investors demand higher yields to hold our debt, borrowing costs rise throughout the economy. Mortgage rates, corporate financing, government interest expense and stock valuations all feel the pressure. Gold receives a haven bid. The dollar comes under pressure. Equities become more volatile. These are not separate stories. They are different symptoms of the same underlying disease.

That is why sovereign-debt stress is the master narrative—not a side story.

The federal government continues running annual deficits measured in the trillions of dollars, even when the economy is not in a severe recession. Interest expense consumes an increasing share of federal revenue, leaving the government with fewer attractive choices. It can raise taxes, reduce spending, tolerate higher inflation or continue borrowing. None of those choices is painless, and Washington has shown very little willingness to confront them honestly.

I cannot tell you exactly when the bubble will burst. I can tell you that inevitable and imminent are not the same thing. A structurally unsound system can continue longer than seems reasonable, but that does not make it sound.

While I am not giving anyone financial advice, I will tell you what I am doing personally. I am out of stocks that are not connected to hard assets such as gold, silver, copper, industrial metals, rare earths, oil and natural gas. I am also personally buying precious metals and storing them away in a safe deposit box.

That position may not be right for everyone, and every reader should make decisions with a qualified financial adviser who understands his or her circumstances. But I believe the bubble will eventually pop, and when it does, the adjustment could be extremely ugly. As confidence in our fiscal discipline deteriorates, I expect the dollar’s purchasing power and standing in the world to continue weakening.

The headlines will change from day to day. The economic reports will be stronger one month and weaker the next. Markets will rally, correct and rally again.

But let’s not allow the daily noise to distract us.

Let’s make the main thing the main thing.

A FINAL WORD

If you value clear, independent commentary about debt, markets, precious metals and the forces shaping your financial future, please subscribe to Capital & Consequence—and share this post with someone who may benefit from it. My goal is not to tell you what to think, but to help you recognize the risks before the tide goes out.

Important Disclosure

This commentary is not investment advice. It reflects my personal observations and describes actions I am taking in my own circumstances. Readers should consult a qualified financial professional before making investment decisions. AI disclosure: artificial intelligence tools were used to assist with research, sourcing, organization, and editorial development of this article. Robert Katz provides the concepts, analysis, observations, conclusions, and final editorial judgement. All opinions expressed are his own.

I am a retired CPA who spent more than 40 years as a partner in a CPA firm, as well as a retired registered investment adviser and asset manager. Over the years, I watched many intelligent and hardworking people make the same basic financial mistakes—not because they were careless, but because they were never taught how the financial system works.

A lack of financial knowledge can be dangerous. People work their entire lives to build savings, yet they are often expected to make important investment decisions without fully understanding the economic forces surrounding those decisions.

I am not here to give anyone personal investment advice or tell readers what they should buy or sell. My purpose is to share the issues I study and the questions I ask when making my own investment decisions. I hope this commentary will help readers become better informed, more cautious and better prepared to protect the money they worked so hard to earn.

Choosing a particular investment should be one of the final steps in the investment process—not the first. Before investing, we should try to understand the larger economic environment: government debt, interest rates, inflation, currency movements, market valuations, geopolitics and the general direction of the economy. Ignoring those forces can turn an otherwise reasonable investment into a costly mistake.

“Only when the tide goes out do you discover who’s been swimming naked.”
— Warren Buffett

As the financial tide begins to recede, I believe we are seeing some troubling cracks in the finances of the United States and much of the Western world. Here are ten that immediately come to mind:

1. Federal debt approaching or exceeding levels that once would have been considered unimaginable.

2. Consumer debt and securities margin debt at or near record nominal levels.

3. Historically elevated stock-market valuations, particularly in portions of the S&P 500.

4. Increasing pressure on Japan’s currency and bond markets, with potential consequences for the United States and other global markets.

5. Growing government and central-bank involvement in sovereign bond markets.

6. Long-term questions about the purchasing power and reserve status of the U.S. dollar.

7. Persistent inflation, elevated borrowing costs and an increasingly unaffordable cost of living for many American families.

8. Annual federal deficits measured in the trillions of dollars, with no politically realistic solution currently in sight.

9. Expensive wars and geopolitical conflicts placing additional strain on government finances, trade and global stability.

10. Rising prices for certain commodities and growing competition for the natural resources needed to support energy production, infrastructure

and technological development.

Any one of these issues might be manageable on its own. The greater concern is that they are occurring at the same time—and that weakness in one area could place additional pressure on the others.

These are the cracks in the wall that I intend to examine in future commentaries. I will try to separate fact from opinion, avoid sensational predictions and be honest when the evidence does not support my personal views. I will also discuss what could prove those views wrong.

My central belief is simple: the financial pressures that have accumulated over many years will eventually require an adjustment. That adjustment may take the form of inflation, currency weakness, higher taxes, reduced government benefits, financial repression, market volatility—or some combination of them. Let’s take a closer look.

Inevitable vs. Imminent

I have spent more than forty years as a CPA and investment adviser watching markets move from optimism to excess and, eventually, back to reality. The names change, the technology changes and every generation believes its favorite assets are somehow exempt from the old rules. They are not. Today, we appear to be watching two powerful forces collide: an equity market priced for near perfection and a long-neglected real-assets cycle that may only be getting started. I do not believe a major reckoning must happen tomorrow. I do believe the conditions that make one inevitable have become increasingly difficult to ignore.

The first warning is valuation. The Shiller cyclically adjusted price-to-earnings ratio recently stood above 42, compared with a long-term mean near 17.4. Valuation alone does not ring a bell at the top, and expensive markets can remain expensive for years. Still, paying historically high prices means future returns depend on historically strong results. There is less room for disappointment. When investors say that this time is different, they may be right about the businesses, but they are rarely right about the arithmetic.

Concentration adds another layer of risk. The largest ten companies represent close to 40 percent of the S&P 500, a level not seen since the mid-1960s. Many of these are remarkable companies with real earnings, strong balance sheets and dominant competitive positions. That is an important difference from the weakest companies of the dot-com era. But a good company can still be a poor investment if the price already assumes years of flawless execution. When so much of an index depends on so few names, a disappointment in one corner of the market can quickly become a problem for nearly everyone who believes he is broadly diversified.

Artificial intelligence is where enthusiasm and financial discipline are now meeting. Alphabet reported $44.9 billion of capital spending in the second quarter and negative free cash flow of $5.9 billion for that quarter, even as its cloud business grew rapidly. This does not prove that AI spending is wasteful. In fact, the revenue opportunity may be enormous. It does show that investors are being asked to finance a buildout of extraordinary scale before anyone can know with certainty what the final return on that capital will be. The parallel with the fiber-optic boom is not perfect, but it is worth remembering: essential infrastructure can change the world while the original investors still earn disappointing returns.

Leverage is the kindling beneath this market. FINRA reported customer margin debt of roughly $1.502 trillion in June, a record-level figure, before it declined to about $1.417 trillion in July. Debt does not create a downturn by itself, but it changes the character of one. Falling prices can force sales, forced sales create lower prices, and lower prices produce additional margin calls. That feedback loop is one reason heavily leveraged markets can move from calm to disorder much faster than most investors expect.

The Federal Reserve has no easy answer. At its July meeting, the Fed held the federal-funds target range at 3.50 to 3.75 percent while acknowledging elevated inflation and energy-related supply shocks. Three voting members preferred a quarter-point increase. Higher oil prices complicate the usual playbook: they can weaken growth while keeping inflation stubborn, leaving policymakers to choose between protecting purchasing power and supporting economic activity. That is the essence of stagflation risk, and it is not friendly to assets priced on the assumption of falling rates and uninterrupted growth.

This is where the commodity case becomes more interesting. Years of underinvestment cannot be reversed with a press release or an interest-rate cut. Mines take years to permit and develop. Power grids require enormous amounts of copper and aluminum. Data centers add another source of electricity and infrastructure demand on top of electric vehicles, defense spending and industrial reshoring. The World Bank now projects broad commodity prices to rise 16 percent in 2026, with metals and minerals up about 17 percent. That does not guarantee a straight line upward, but it supports the argument that tangible assets are moving from the margins of portfolios toward the center.

Gold remains the clearest monetary expression of that shift. After an extraordinary January spike and correction, it has recovered to roughly $4,500 an ounce. J.P. Morgan Global Research forecasts an average near $6,000 in the fourth quarter of 2026, citing continued central-bank demand, diversification away from the dollar and investor inflows. Silver has been even more volatile, which is normal for a smaller market that sits between monetary metal and industrial input. I view both as long-term insurance rather than short-term trading vehicles. Insurance is most useful when it is purchased before the storm, not in the middle of it.

Copper may be the highest-conviction industrial metal because demand is becoming less discretionary while supply remains difficult to expand. The energy transition, grid modernization and AI infrastructure all require copper, yet new production is expensive, politically difficult and slow. That does not mean every copper company is attractive or that prices cannot suffer during a recession. It means the long-term supply-and-demand equation deserves serious attention, especially from investors whose portfolios are dominated by financial assets and contain very little exposure to the physical economy.

There is a fair argument on the other side. Market breadth has improved, smaller companies have participated more fully, and AI-related revenue is real. Bubbles can run longer than skeptics can remain patient, and a broad commodity fund can disappoint if it treats oil, agriculture and metals as one identical trade. Oil’s current strength is heavily influenced by Middle East supply risk and could reverse if tensions ease. China remains the swing factor for industrial demand. The point is not to abandon stocks or chase every hard asset. The point is to recognize that leadership can change, diversification still matters and price always matters.

My own posture is cautious rather than apocalyptic: reduce dependence on a handful of richly valued growth stocks, keep adequate liquidity, own some gold as financial insurance and build selective exposure to producers of scarce, necessary materials. I would rather enter these positions gradually than pretend I can identify the exact top in equities or the exact bottom in metals. The most dangerous words in investing are not simply “this time is different.” They are “I have plenty of time.” The excesses we see today may not be imminent in their resolution, but arithmetic has a way of making them inevitable.

Closing Commentary

I do not know exactly when that adjustment will occur, and neither does anyone else. That is the important distinction between inevitable and imminent.

Something can be inevitable without happening tomorrow. But when the consequences may be serious, waiting until they become imminent can leave very little time to prepare.

For more than 40 years, I was privileged to serve as a partner in a CPA firm, and I later worked as a Registered Investment Adviser and asset manager. Along the way, I wrote six books, including the bestseller Money Came by the House the Other Day, and helped produce several successful faith-based films, including God’s Not Dead, God’s Not Dead 2, The Blind, and Average Joe. Now retired and 75 years old, I write this newsletter because I know that most people have worked very hard for what they have, yet few have been formally trained to navigate the increasingly complicated investment world. My purpose is not to give investment advice, but to encourage readers to look beyond any individual stock, bond, metal, or other asset and consider the larger economic and geopolitical environment surrounding it. These are simply my personal musings, shared in the hope that my years of experience may help others ask better questions, think more broadly, and avoid some of the basic but costly mistakes that can put their hard-earned savings at risk.

If you believe successful investing begins with understanding the world surrounding your investments, I invite you to subscribe to Capital & Consequence. Together, we will look beyond the daily headlines to examine the economic, geopolitical and financial forces that may shape your wealth—and your family’s financial future—for years to come.

Subscribe today, share this post with someone you care about and join me as we try to make sense of an increasingly complicated and treacherous investing world.