Silver gains strength amid growing fears that stocks will soon reflect the true state of economies.

Welcome to the newsletter, where I offer an in-depth look into the world of finance, investments, and precious metals. In today's uncertain times, it's crucial to remain cautious and proactive in managing your wealth. Protecting your assets in the upcoming period is key. Through our collaboration, news updates and even deeper insights can help you make informed decisions in any economic environment.

General Overview

• U.S. stocks continue to set records, but valuations are dangerously high.
• Economic activity is slowing, and despite Germany’s shrinking economy, the ECB does not see any risk of a recession in the eurozone.
• Annual inflation, measured by the Harmonized Index of Consumer Prices, which is used for comparisons between EU member states, stood at 1.7% in the euro area in September.
• Major German manufacturers like Volkswagen, Mercedes-Benz Group, and BMW have recently issued warnings of lower profits. These warnings come at a time when historical layoffs are threatened, and potential closures of Volkswagen’s German plants loom.
• Ray Dalio, renowned American investor and hedge fund manager, says that China, in addition to recent stimulus measures, needs to undergo "beautiful deleveraging" to avoid a debt crisis.
• Unrealized losses of U.S. banks are seven times larger than during the 2008 financial crisis.

In the period leading up to the next U.S. elections, ongoing military conflicts, and new liquidity injections, it feels like we are living in a "PARALLEL" world. The question arises: how much longer can this continue, and what could go wrong?

In the past three weeks, $500 billion has been added to the U.S. debt...

• Half a TRILLION in 3 WEEKS.
• Total U.S. debt is approaching $36 trillion, which means the U.S. is increasingly dependent on borrowing for every dollar spent.

If debt continues to rise, this could lead to higher interest rates, inflation, and a decline in investor confidence in the U.S. economy.

Will stock market history repeat itself?

• At the peak of the Dot-com bubble, Cisco ($CSCO) was worth 5.5% of U.S. GDP. Nvidia ($NVDA) is now worth more than double that, at 11.7% of GDP.

The number of Zombie companies in the U.S. is rising

• 43% of companies in the Russell 2000 index are unprofitable, the highest since the COVID-19 crisis. Meanwhile, interest expense as a percentage of total debt for Russell 2000 firms has reached 7.1%, the highest since 2003.

Expectations for a "soft landing" are extremely high.

• Markets are betting that we will avoid a recession. What happened in the past?
• Similar situations occurred during the Dot-com bubble of 2001 and the Great Financial Crisis of 2008.

What could this mean for stocks?

• Will stocks provide any protection against inflation in the coming years?
• Goldman Sachs warns that the S&P 500 index will average only 3% annual returns over the next decade.

What does the comparison between gold stocks and U.S. stocks show?

• Gold stocks are starting to gain value relative to the broader market.
• The ratio between gold stocks and the S&P 500 index is crossing a key support level that has been in place since 2011.
• Are we about to see a cyclical capital rotation event?

The gold and silver scenario within a cyclical rotation event

• Further gains in the price of gold relative to stocks reveal an interesting picture.
• The key to gold reaching $10,000 and silver reaching $100 is revealed in the chart below.

A remarkable year for silver in 2024

• In my 2023 article "Can Silver Become the Best Investment of 2024?", I predicted an outstanding year for silver. So far, it looks promising.
• Silver has had an outstanding year, with prices soaring by 40% since the start of the year, reaching the highest levels since 2012.
• On Friday, silver prices jumped by 7%, closing above $33 for the first time since 2012.

How high could silver go?

• We could witness major moves in silver prices.
• In 2020, silver gained 60% in just 4 weeks.

Why educate yourself and trust your own judgment?

If you trusted the media, you missed a 67% gain in gold over the past two years. An article from the Wall Street Journal in September 2022 ?? claimed that gold wasn’t providing asset protection. The article is no longer available to online readers.

Best regards,

Peter

The opinions and analyses presented here are educational and do not constitute financial advice. I do not endorse or recommend any investments based solely on the above information. I recommend consulting with a qualified financial advisor before making any decisions. Investors must consider their financial situation, investment goals, and risk tolerance before taking any action. I am not responsible for any investment losses that may result from using this information. For in-depth advice, please contact me at [email protected].