Jack Hoogland: “Precious Metals and Commodities Are at the Start of a Major Rally”

The announcement that the U.S. Treasury will begin buying long-term government bonds has breathed new life into the debasement trade. As the dollar falls, gold and other hard assets are rising, while major fund managers are beginning to make their move. According to Jack Hoogland, this is merely the very beginning of a strong upward phase.

Last Tuesday, I already explained to our readers why we were heading towards an ideal scenario for gold and silver. Since the following day, that scenario has only improved.

The U.S. Treasury Secretary announced that he would begin buying long-term government bonds to prevent their yields from rising further.

The impact of Bessent’s announcement last week, effectively imposing a yield cap on long-term government bonds, has been significant. Many experts predicted that long-term yields would nevertheless continue to rise.

However, they conveniently overlooked the fact that the U.S. Treasury has a cash balance of $936 billion. See the chart below. Reducing that balance (to purchase bonds) simultaneously represents a direct injection of liquidity into the financial system.

Debasement Trade

The tweet below clearly illustrates the impact of Bessent’s announcement: a bond yield that barely moved, a falling dollar and rising prices for gold, bitcoin and other hard assets.

The text also refers to the debasement trade, which means positioning for the declining purchasing power of paper money—a term that is now reappearing everywhere. Throughout the financial media, we are once again seeing references to enormous budget deficits and the rapidly rising national debt.

We are therefore seeing the same ideal scenario for gold, silver, copper and uranium that existed before the outbreak of the Iran war! On top of that, the largest fund managers are now beginning to make their move.

Fidelity Buys Gold

Citadel Securities is talking about financial repression, while the tweet below shows that a major Fidelity fund had already begun buying gold at the end of last month.

What is particularly striking is that Fidelity has an internal rule stipulating that no more than 5% of the fund’s assets may be invested in gold. It now wants to raise that limit because of the deteriorating credibility of the Fed and the government’s economic policy.

If the major players lose confidence, the rest will quickly follow. What we witnessed last week was merely the very beginning of an extremely strong upward phase for gold, silver, copper and uranium, among others!

Finally, I would like to draw your attention to the video clip below, in which I explain in just 30 seconds why gold-mining stocks are particularly attractive right now. The same naturally applies to silver, copper and uranium stocks.

Jack Hoogland worked for the American bank Citigroup in Amsterdam, Düsseldorf, Madrid and Brussels as a Financial Analyst, Risk Manager and Finance Director. Jack has been following the financial markets since the late 1980s and, following the global financial crisis, increasingly focused on macroeconomics and the financial system. Read more from Jack Hoogland.