TWO GRAPHS THAT DEPICT THE ENTIRE ECONOMIC CASE For HARD ASSETS

 This is a graph of the Velocity of Money in the US economy.

 Velocity measures how many times a dollar changes hands.  Each time it changes hands in investment it adds t.o the GDP.  If our dollars are not changing hands but are being hoarded for payment of  debt such as mortagages, car payments etc - or simply hoarded by billionaires who have no use for it but to keep score against other billionaires - then the economy is no longer growing.  

Below is a graph depicting how many dollars of debt it takes to create a dollar of GDP:

In an efficienty economy such as the one Reagan inherited after Volkers raising of rates back in 1980, a dollar of debt created several dollars of GDP.  Thus turning America into a Debtor Nation made temporary economic sense.  Temporary.  

But the policy of using debt to create GDP has been taken to such an absurd extreme by Reagan and every subsequesnt US administration - aided and abetted by a Fed devoted to lowering rates below the cost of money - so that now no matter how much we add to the debt we get nothing but the most temporary boost to the economy.  

Trump added 3 trillion dolalrs of debt pre covid with tax cuts for the wealthy and got two quarters of GDP boost which then immediately subsided back to below 2 percent trend growth.  And that is with a drastic undercounting of Inflation.  If the real inflation figure - as computed for example back in the 1990's were used, we would have been in an economic contraction for the last six years.

We can not borrow our way out of our probelms anymore.

But we can not staunch the borrowing because to do so would require raising rates to the cost of money (plus a risk premium) so that would mean raising rates to about 10 percent.  Ha ha ha.  It will never happen.  We'll never even get to 1 percent.  At least not until the risk markets completely crash.  Then it won't matter.  But then we'll be in a depression so it won't help.

Tough spot.

That's why smart money is desperately seeking out HARD ASSETS.  

Because hard assets have no counterparty risk.  They can not be devalued by government decree.  They can not be watered down by the random creation of similar hard assets.  (Not the real ones like Old Master Paintings, or Historical Coins and Medals or Diamonds, or Gold, or Historical Artifacts and documents etc).

That's why the boom in hard assets is likely to continue for the foreseeable future.

And that's why only Hard Assets can serve as a hedge to the current economic conditions.