Good Morning!

We know that Gold, Silver and miners will not be in a confirmed new secular bull market until the stock market cracks and Gold breaks out against the 60/40 Portfolio.

Until that happens, investment capital will favor larger companies and larger juniors over exploration juniors, Silver and silver stocks.

But I digress.

Today the focus is on the coming monetization of US Debt and Yield Curve Control.

Debt to GDP & Net Interest Payments

In the chart below we plot Debt to GDP (red, right scale) and Net and Gross Interest Payments on the debt (blue, black, left scale).

When the Great Depression began, interest payments were too high. We kept rates very low which pushed interest payments down and we had room to balloon the debt to fight WW2.

After WW2, we kept rates low and implemented Yield Curve Control to get Debt to GDP down. Interest Payments were not a problem.

In the late 1980s and early 1990s interest payments were the problem, but not Debt to GDP. Lower rates, the tech book and globalization pushed interest payments down and Debt to GDP remained steady until the 2008 and the GFC.

The problem now is both Debt to GDP and Interest Payments are at historical extremes.

We need inflation to get Debt to GDP down and we need interest rates to remain low to keep interest payments low. 

Net Interest Expense & Budget Deficit

We plot the budget deficit in black and the net interest expense in red.

Interest Expense began to accelerate higher after 2016 and one can see how its trajectory mirrors that of the budget deficit. 

Moreover, the interest expense has become a huge part of the deficit. This was not the case in 2009 or 2020. In a year or two, the interest on the debt will be essentially an additional $1 Trillion in spending compared to 2020.

Yield Curve Control & Debt Monetization

The policy answer is yield curve control and debt monetization, which entails the Federal Reserve buying long-term Treasuries to keep long-term interest rates low and finance government spending.

Jared Dillian explains in this one minute clip:

In TheDailyGold Premium...

In TDG #911 we highlighted news from one of our Top 10 Companies.

We often mention the importance of growth oriented producers who invest in exploration. One of our Top 10 companies just reported news that highlights the increasing potential at their flagship project.

We also covered a junior exploration company that is a potential watch list company. It is working one project that is decent but a bit small. However, it's second project, located very close by, is sporting numerous higher-grade results and could become a significant value-add for the company. 

In TDG #909 & TDG #910 we up provided a complete update of our Top 10 Table & Top 10 Watch List Table. 

In two pages you can quickly see company market cap, cash/debt position and ~200 words of notes.

This is current analysis on 17 companies, that can be digested very quickly.

Subscribe and you can download these updates immediately.

We aim to find the companies that are undervalued now and have significant potential to add more value in the future. And that can be turbo-charged by a real bull market in the sector.  

I am scouring the junior universe to find future Top 10 Companies and other companies that are undervalued with 5x to 10x potential. 

Thank you for reading.

I wish you all the best in 2024 and beyond.