(Money Metals News Service) In this week’s episode of the Money Metals Midweek Memo, host Mike Maharrey unpacked a volatile week in the markets, highlighting gold’s standout performance as a safe haven asset.
After opening just under $3,040 per ounce, gold briefly dipped below $3,000 during Monday’s sell-off, reaching a low of $2,950. But the yellow metal quickly rebounded, surpassing $3,300 by week’s end and reaching an all-time high of $3,323 per ounce.
Maharrey emphasized that gold’s sharp recovery—despite a broad market panic—illustrates its enduring role as a store of value in times of uncertainty. Analysts were surprised not by the initial dip, which often occurs as traders liquidate gold to cover losses elsewhere, but by how fast the metal recovered and pushed higher.
Traditional Safe Havens Fail to Deliver
While gold surged, other traditional safe haven assets faltered. U.S. Treasury bonds saw an initial wave of buying early in the week, sending the 10-year yield below 4 percent. However, that rally quickly faded.
By Friday, the 10-year Treasury yield had risen to 4.49 percent, the highest since February. This signals falling demand for U.S. debt at a time when the federal government remains heavily dependent on borrowing.
Meanwhile, the U.S. Dollar Index plunged to 99.78, its lowest level since April 2022. Both developments are abnormal during a stock market correction, when bonds and the dollar typically attract capital.
Analysts suggested this may reflect growing concern over the long-term viability of the U.S. dollar and U.S. debt as safe assets.
Silver Follows Gold, Remains Volatile
Silver also rallied last week, though it remains more volatile due to its industrial demand. The gold-to-silver ratio briefly dropped below 100:1, a sign that silver is still historically undervalued.
Maharrey noted that silver tends to lag behind gold in a bull market but often outperforms later in the cycle. He also pointed out that silver’s connection to the broader economy makes it more sensitive to trade wars and recession fears.
Despite its volatility, silver’s role as a monetary metal remains intact, and Maharrey expects it to track gold higher over time.
Trade War Adds to Economic Fragility
Maharrey devoted a significant portion of the episode to analyzing the impact of tariffs and trade tensions.
Last week’s announcement of new reciprocal tariffs led to an immediate market sell-off, though a 90-day reprieve later in the week temporarily calmed investor nerves.
Still, the market remains jittery, largely because of what Maharrey called “regime uncertainty”—a climate in which businesses and investors are unsure about the future direction of policy.
This uncertainty, he argued, is especially dangerous in an already fragile economy built on unsustainable debt and inflated asset prices. The tariffs may not be the root of the problem, but they could serve as the pin that pops an already overinflated economic bubble.
The Bubble Economy Enters the Mainstream Conversation
A major theme of the episode was the recognition—even by mainstream outlets like Reuters—that the U.S. is operating within a bubble economy.
Maharrey highlighted a Reuters article titled “There’s No Easy Escape from the U.S. Bubble Economy,” which described a system where asset prices are detached from fundamentals, corporate behavior is driven by financial engineering, and debt fuels growth rather than investment.
The article also noted that the contribution of finance and insurance to GDP has doubled since 1945, while manufacturing has shrunk by more than half. Maharrey emphasized that this bubble is fragile and inherently unsustainable, especially as debt levels continue to climb.
Debt Levels Reach Historic Highs
The discussion turned to the scale of America’s debt problem. Combined government, corporate, and consumer debt now exceeds $100 trillion—over three times the U.S. national income. American consumers are saddled with record credit card debt, while average interest rates remain above 28 percent. Meanwhile, the federal government is running massive deficits.
The first half of fiscal year 2025 saw a $1.31 trillion deficit, second only to the $1.7 trillion deficit logged during the first half of fiscal year 2021 at the height of the COVID-19 crisis.
Contrary to claims that spending is under control, outlays rose by $139 billion in the first quarter of 2025, with borrowing increasing by $41 billion compared to last year.
The Federal Reserve: Bubble Generator in Chief
Maharrey made clear that the real source of the bubble economy is not tariffs or trade policy, but the Federal Reserve.
Since the 2008 financial crisis, the Fed has pumped over $9 trillion into the financial system through quantitative easing and held interest rates near zero for more than a decade. This easy money fueled rampant asset inflation and created the illusion of prosperity.
The Fed’s policies encouraged borrowing, discouraged savings, and led to asset bubbles in stocks, real estate, and even art.
Maharrey criticized mainstream economists and reporters for failing to connect the dots between monetary policy and the boom-bust cycles that define the modern U.S. economy.
Economic Indicators Point to Recession
Economic data supports the warning signs. According to the Atlanta Fed’s GDPNow model, U.S. GDP is expected to contract by 2.4 percent in Q1 of 2025.
A recent survey of over 300 CEOs found that more than 60 percent expect a recession or economic downturn within six months. These forecasts align with other warning indicators, including a shrinking manufacturing base, weak consumer confidence, and rising borrowing costs.
As the air leaks out of the bubble economy, Maharrey warned that it is only a matter of time before the next major downturn hits.
Analysts Turn Bullish on Gold
Mainstream and alternative analysts alike are increasingly bullish on gold. Mark Chandler called for a move to $3,500 in the near term, citing capital flight from U.S. assets and the weakening dollar.
Adrian Day described the latest gold pullback as “short-lived” and emphasized the strong momentum behind the metal.
Maharrey noted that the current market dynamics—rising gold prices amid rising bond yields and a falling dollar—are highly unusual and speak to deep structural shifts in investor preferences.
Conclusion: Real Money in an Unreal Economy
In closing, Maharrey encouraged listeners to protect their wealth by owning real money—gold and silver. He argued that the weakening dollar, the erosion of trust in U.S. debt, and the persistence of economic bubbles all point to a need for financial insulation.
Maharrey advised listeners to call Money Metals Exchange to learn more about precious metals or visit the website to start buying.
Whether by design or by accident, the economic bubble appears to be deflating, and now is the time to act before the next crisis arrives.
To speak with a precious metals specialist or start building a position in gold and silver, contact Money Metals Exchange at 1-800-800-1865 or visit www.moneymetals.com.
