Transcription
In today's video, I want to tell you about the newest trend in investing that's been making people a lot of money. It's called the debasement trade.
The debasement trade means that you are betting against the US dollar. Essentially, if you're in this trade, then you believe that the US dollar will devalue not relative to other currencies, but rather devalue against real assets. In other words, you believe that each US dollar is going to lose purchasing power. So, what investors have been doing is buying gold, silver, and Bitcoin to protect themselves financially from the rapidly devaluing dollar.
So, here's a quick look at what we're going to be covering in today's video. First, I want to expand upon what is the debasement trade and then I'll share with you my thoughts on is it too late for you to participate in the debasement trade and what would I do right now.
Now, let's begin by better understanding the debasement trade. So, why would someone believe that the US dollar will lose purchasing power? Well, I would say it's mainly for two reasons. The first thing is that the intrinsic value of fiat currencies is zero. So if you think about it, I mean these US dollars are backed by nothing. Like literally nothing. They're just worthless pieces of paper. Actually, they're, you know, cotton and linen or now digital.
And the second thing is that the federal government, the central banks and the banks, they've been printing trillions of dollars. The M2 money supply is at a record high. And you could bet your bottom dollar that they're just going to print more money. I mean, look at the chart for the past 65 years. I mean, do you notice a trend like I do? Essentially, as they print more money, the fiat currency devalues, which causes inflation.
I just want to show you this chart of the price of gold. It's around $4,000 a troy ounce right now. 30 years ago, 1 ounce of gold was at $380. Today, it's inflated all the way up to here. I just want you to understand that gold going from $380 an ounce to now $4,000 an ounce is not because gold has become more valuable. No. If you had 1 ounce of gold back in 1995, then 30 years later in 2025, you still have 1 ounce of gold and it didn't change. The price of gold has been rising because it now requires more devalued dollars to buy an ounce of gold. That's that's the true story. That's what's been going on. So, it's not the value of gold that's going up. It's the value of the dollar that's going down, which is causing the price of gold to go up. This is called asset price inflation or you can call it the debasement trade where the currency is getting debased.
The situation is that people are expecting governments, central banks, and banks to continue printing more and more fiat currency and expand money supplies. Okay? Why? It's because we are in a global debt bubble. The only way to keep the charade going is to print more money. You can do the math, but to verify the mathematics, let's ask Chat GPT. Okay? So, you can ask Chat, how long will it take the US government to pay back $38 trillion of debt if the US government overspends by $2 trillion a year? And take a look at the answer for yourself. Chad says that it would never be paid back. I mean, it even bolded the never so that we don't miss it. Chad says that the debt would actually grow larger every year. Each year, instead of paying anything down, the government adds another 2 trillion in new debt. So, the only solution is to print more money, and that debases the currency. That's why gold has recently hit a record high of $4,000 an ounce. Investors are looking for a safe haven from all this money printing. That's why silver has been soaring to record highs. That's why Bitcoin has recently hit new record highs. People are realizing that our overlords can print money, but they can't print gold, silver, or bitcoin.
Now, let's move on to the next question. Is it too late for you to get into the debasement trade? So, that's a very good question, but I want to ask you this. So, this is a serious question for you. This is the M2 money supply over the past 65 plus years, right? I mean, take a look at the chart. Do you really think that they're going to stop the money printing? The only way to stop debasing the currency is to stop the printing. But if they do that, what's going to happen? The debt bubble is going to pop and then we're going to get an economic crash. It'll be a guaranteed economic depression. And then what would happen? The politicians would get voted out. The politicians would lose their slush funds and their power. the Federal Reserve would be blamed, disbanded, and they would they would all lose their jobs. Now, do you think that that's what the politicians and central bankers want? And the answer is no. Of course not. So, they're going to they're going to keep the circus act going for as long as possible and just print more money.
So, to answer the question, if you think that they're going to stop the money printing, then yes, it's too late for you to participate in the debasement trade. But if you think that they're going to continue printing money, then no, it's not too late. And it's better late than never. And how high can gold go up? How high can silver go up? I think the better question to ask is how much money can they print?
Now, moving on, and we're going to just focus on today. Like, if you're in this situation where let's just say you're late to the game or you want to add to your current position, what should you do? Well, what you should do is it depends on your personal situation, but I'll tell you what I would do. So, let's answer this question. What would Brian do right now? I personally like to look for an asymmetric trade. Okay, so what does that mean? Again, I brought chat to help out. What is an asymmetric trade? Here's how chat defines it. An asymmetric trade in investing refers to a situation where the potential upside significantly outweighs the potential downside. In other words, you're looking for a potential investment that is low risk and high reward. And I just want to tell you that these are hard to come by. Silver was an asymmetric trade a year ago. You could even say just, you know, a few months ago. So that's why I said that that was my favorite investment at the time. And silver has outperformed gold and Bitcoin year to dates in 2025. But again, let's focus on now, right now. Where is the asymmetric trade? Which one is low risk and high reward? What's the best investment opportunity in my opinion in this debasement trade? Here are my thoughts.
Okay, gold right now, it's near $4,000 an ounce with gold. If it's going to go up, it's going to grind up. Relatively speaking, it's going to be a slower climb up. I believe that right now in the debasement trade, gold represents the lowest risk and moderate return in the debasement trade. I believe that silver is moderate risk and offers the highest potential gain. Okay, so here's my thoughts on this. Silver is higher risk than gold because of the silver slams. Now, if you're a silver investor, you know exactly what I'm talking about. You can call it a technical term, the silver slams by the banksters. Fortunately, the slams have been short-lived and shallow in recent times, at least for now.
And then you have Bitcoin in the debasement trade. I believe that Bitcoin is the highest risk and offers moderate return potential. Listen, I understand some people are going to say that Bitcoin is going to the moon. That's great. I hope it does. However, there's a chance that it may not or that it's going to lag gold and silver. Yeah, you have to keep in mind that year to date, Bitcoin is underperforming gold and silver. And that's what the entire media and the politicians shoving Bitcoin down our throats. And listen, if you want to hype up Bitcoin with your stories about how you bought Bitcoin for 80,000 or 50,000 or 20,000 and you did amazing, I'll tell you that's great. You know, I personally got at $700, but the past is the past. And we're talking about the now and future performance from here on out. And if you've been in prior BTC cycles, then you know that Bitcoin is the most volatile and it could plunge more than 10% in a few hours. It can go down 20 to 30% in a short window of time. You cannot deny that. It's the highest risk in the debasement trade.
So to summarize, at this very point in time, if you're looking for a clearcut asymmetric trade with low risk and high return potential, I'm telling you, it's not available. That ship has sailed. Now listen, I want to be very clear about this. I am not saying that I wouldn't invest in any of these right now. For example, would I buy gold right now? My answer would be yes, I would buy gold right now. I'm just saying that there's no clear-cut favorites in the debasement trade. However, here's my opinion. I believe that you can still find asymmetric trades in the gold mining stocks. And for that, you would not be too late.
Now, what I'm about to tell you is very important. So, I need to explain this and here's a situation. Let's just say that gold is at $2,000 an ounce, okay? And let's say that the cost to mine for gold, you know, the ASIC, all the general administrative costs, everything, all the expenses, let's just say it cost a company $1,500 to pull an ounce of gold out of the ground. Okay, in this scenario, what would be the profits? They could sell it for $2,000 an ounce and all the expenses are $1,500. So, the profit is $500 an ounce, right? Now, if the price of gold doubles from $2,000 an ounce to 4,000, then the profit's not going to double. No, it's going to go up exponentially. So, the sales might double, yes, but the profit is going to more than double. So, you can do the math. You sell it for 2,000 and it cost $1,500 and that's a $500 profit. But if you sell it for $4,000 an ounce and it costs $1,500 an ounce, then that's a profit of $2,500. So sales doubles, but profit will go up fivefold. Okay? But imagine if gold goes up to 5,000 an ounce or even 6,000 an ounce.
Although gold mining stocks have quietly been outperforming, there are a few good gold mining stocks that I believe are severely mispriced. on my Patreon site, I give you my favorites that you can buy on Robin Hood or Weeble. So, the reason why I'm saying that is because there are certain mining companies that are not available on those platforms. But I believe that right now that's the only way that you can get an asymmetric trade at this point in time. You need to identify which gold mining stocks are undervalued because the ETF for gold mining stocks, if you look at the GDX, has already gone up by 133% year-to dates in 2025.
But I just want to say that if if that's not what you want to do, like if hunting for good gold mining stocks is not your cup of tea, which honestly I would not recommend for most people, here's what I would do for a good debasement trade. I would buy a combination of gold and silver. If you want to be more conservative and defensive, allocate more towards gold. If you want to be more aggressive but have a higher your higher risk tolerance, then I would allocate more towards silver. Personally, I am not a buyer of Bitcoin with Bitcoin at 120,000. I think that silver has a better chance of doubling to 100 than Bitcoin has a chance of doubling to 240,000.
Now, in terms of when I plan to sell my silver, I already said that explicitly in this video and I still stand by it. In terms of when I plan to sell my gold, I already said that explicitly in this video as well and again, I stand by it.
Okay, so that is the debasement trade. I'll keep you updated. Please subscribe. Thank you for the support and I wish you a very nice day. Take care.