There Is No Way Out Of This That Doesn't Involve Money Printing

Jun 17, 2025

The U.S. dollar may still be a good pricing mechanism and medium of exchange, but gold has already become the de facto world reserve currency, and the Trump administration's tariff and immigration policies are "like trying to wreck the boat voluntarily," according to Nassim Taleb, author of "The Black Swan" and scientific advisor at Universa Investments.

Taleb was asked about the markets' reaction to the worsening U.S. government debt situation and whether the markets are pricing in risk in that area.

Beyond the steady erosion of the value of the U.S. dollar, which Taleb said is ultimately reflected in U.S. equities, he sees another major problem on the horizon.

"There's a second risk," he said. "The first one is the deficit. The second one is effectively that the dollar is losing its status as a reserve currency."

"You can see the accumulation of gold in the [central bank] reserves, and the behavior of gold over the past 12 months," Taleb replied. "And it didn't start with Trump's policies, of course. It started with Biden when he froze the accounts of people connected to Putin, thinking that it'd be limited there, but people not connected to Putin decided to stay away from the euro and the dollar."

"Gold is effectively now the reserve currency," he said. "Transactions take place in dollars, euros, usually dollars, and at the same rate; however, they get converted back into gold. And we can see it from the accumulation of reserves."

"The dollar is a good transactional currency because people can label things in it, but not necessarily a storage currency," Taleb said. "This is what we're facing now."

** Information contained within this email should not be construed as Legal, Accounting, Tax or Investment advice. Patriot Gold Group is a Gold & Silver Dealer, representatives are NOT Licensed Financial Planners and do NOT give investing or tax advice.

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Why This Strategist Is Expecting A Lost Decade For U.S. Stocks, Even Without A Recession

AI is a "bubble" that won't do U.S. stocks any favors, says Marko Papic

The U.S. won't be offering great returns for investors over the next five to 10 years, predicts a strategist at BCA Research.

Our call of the day comes from BCA Research's macro and geopolitical expert and strategist Marko Papic, who says over a five to 10-year investment horizon, he sees "U.S. assets underperforming in almost any scenario." So recession or no.

As worries about the U.S. economy have set in this year, alongside a tariff war, the "sell America view" has taken hold, with Wall Street strategists slicing what were fairly bullish S&P 500 forecasts headed into 2025 and lowering earnings estimates as companies grapple with tariff unknowns.

From 2020 onward, the U.S. investment case was "effectively built on a house of fiscal cards," owing to the fact the government "dumped a wheelbarrow of money" on its economy from 2017 to 2024, Papic said. That fiscal stimulus went to consumers and pumped the economy, making the U.S. look again like a great investment story, and then the AI story came in and supported markets, pushing tech from 2022.

AI is one reason he just can't see U.S. exceptionalism as a play investors can bet on, because that groundbreaking technology ultimately will do little for U.S. stocks.

"My concern is that what DeepSeek did in January showed us that innovation and productivization of AI will not necessarily be monopolized by American big tech companies," said Papic.

Papic calls the current tariff wars a "sideshow," but that it is only helping the view that U.S. exceptionalism is ending because of how President Trump is waging it. But what will happen now is the rest of the world will be pushing stimulus and reform due to American aggression that will only end up negative for the U.S., he says.

** Information contained within this email should not be construed as Legal, Accounting, Tax or Investment advice. Patriot Gold Group is a Gold & Silver Dealer, representatives are NOT Licensed Financial Planners and do NOT give investing or tax advice.

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WSJ MarketWatch: Vanguard's U.S. Stock-Market Call Is Even More Shocking Than You Realize

So, just to recap, Vanguard's numbers seem to suggest anyone investing in large U.S. growth stocks might just as well set fire to some of their money now and save themselves the wait.

Do you and I even need to own U.S. stocks in our retirement portfolios?

And if so, do we need to own the S&P 500 — the benchmark index of large-company stocks that is the bedrock of almost every portfolio?

Those are the shocking questions raised by the recent asset-allocation paper from Vanguard, of all firms.

Now look at Vanguard's latest numbers.

Their "Capital Markets Model Forecast" sees U.S. large-company stocks earning you somewhere between 2.5% and 4.5% a year, on average, for the next decade.

That's before counting the costs of inflation, which Vanguard sees as averaging 1.9% to 2.9% a year over the same period. (It's also before any investment fees — and many people are paying about 1% a year.)

So in "real" or constant dollars — in other words, after deducting inflation — Vanguard's model sees big U.S. stocks earning you somewhere between 2.6% and minus 0.4% a year, on average, over the next decade. That's enough to turn $1,000 now into... somewhere between $1,300 and $960 by 2035.

Don't buy an iPhone today! Put that money aside and invest it in the S&P 500... and in 10 years' time, if you're lucky, you'll... be able to buy an iPhone.

Compare that with the record of the past century, when, on average, the S&P 500 has doubled your money over 10 years, in constant dollars.

Let alone the past 10, when it's earned you more than 150%.

But if the Vanguard numbers look bad, consider this: Their model implies absolute catastrophe for those who invest in large U.S. growth stocks — the kind currently dominating the market. The firm sees a passive investment in U.S. growth losing somewhere between 20% and 40% of its value in real or constant dollars over the next 10 years. (That's based on forecast nominal average returns of minus 0.4% a year to minus 1.6% a year, and their inflation estimates.)

Maybe in 2035 you won't be able to buy an iPhone.

So, just to recap, Vanguard's numbers seem to suggest anyone investing in large U.S. growth stocks might just as well set fire to some of their money now and save themselves the wait. And if you have your money invested in the S&P 500, by one measure about three-quarters of it is invested in... large U.S. growth stocks.

** Information contained within this email should not be construed as Legal, Accounting, Tax or Investment advice. Patriot Gold Group is a Gold & Silver Dealer, representatives are NOT Licensed Financial Planners and do NOT give investing or tax advice.