Many people do not have a PhD in economics, but occasionally they look up and see the Dow at record highs – then look at their paycheck not moving up but their expenses continue to climb.

This article is to decode the BIG picture and explain what the hell is going on, and what may be coming.

For the record, I’m not a gold bug. I’m a silver bug. Overall, I believe in sound money, restricted government, and reduced government waste.


You make $75,000 per year and you have for the past 5 years. Wages were stagnant. You look around and see lockdowns and 8% unemployment and are grateful for a job. You have felt the pinch lately, as food prices have been going up, but not to be out done by your healthcare costs that have gone up an average of 8-10% per year for the past decade.

The solution presented to all of us is consolidation. Take all of your debt, consolidate at lower rates!!

Take all of your credit card debt and make it a 5 year loan at lower percent!!

Refinance your house multiple times over a decade.

As long as interest rates go down, you can tend to free up more money!


At some point, interest rates cannot go further lower. You just refinanced your house for the 3rd time, and you just refinanced your credit cards into a fixed payment. You just traded in your 5 year car for a car that has 2% interest for the next 5 years.

But – costs will continue to climb. In fact, this decade may be just like the 1970s in that inflation is expected to hit us really hard. All of the trillions we have refinanced with our government time and time again is no longer able to get refinanced. We have to pay interest on this debt, and the government is broke so they have to raise taxes on you. Property taxes, sales tax, school tax, income tax. They are even considering a plan in California called the “wealth tax” which then looks at the assets you have and taxes them. Right now, they tell you not to worry because it’s only for the uber rich. This is how they roll these things out. It’s how the income tax was rolled out. Over years, they expand the pool of people they tax until everyone is taxed on their wealth.

So you have taxes going up, which will be eating into your pile of free money. After your last round of re-financing, it left you $1,000 extra in your monthly paycheck. Finally, some breathing room! Well, these higher taxes might now take that to $800. Food costs that go up every year are going to accelerate. Day care will go up. Gas will go up, and don’t forget gas taxes. Healthcare going up. Maybe you get a measly 1% “cost of living increase” with your wages at work. But your healthcare insurance just went up 7%.

In 5 years, your “free” money per month went from $1,000 to $400. And, with this inflation, the $400 then actually has the spending power of $250 now.

Big picture?

If you multiply that by hundreds of millions of people, you see in the short term that government funds go up. They meet their interest in the short term. But spending is the ultimate problem. Sorry, let me correct. Deficit spending is the problem.

That $500 or so you will have free per month. What happens when you are invited to a wedding 3 states away? You have hotel room, gift, etc. Christmas? What ends up happening is the debt trap, where you continue to spend in these cycles to buy things you cannot afford and it goes on a credit card of sorts. 5 years from now, you are in the same boat you are in now, except there’s no more consolidation available.

Why not? Well, take a look. The government has been doing the same thing with its debt for 40 years. But there’s no lower the interest can go.

So let me paint the scenario now for the next 10 years. It’s called “stagflation”. Or, stagnant growth with inflation. This is what happened in the 1970s.

The BIG difference from the 1970s and now is then we had $800 billion in debt, and today we have $27 trillion in debt.

Imagine for you, you had $1,000 in Discover card debt. And, they took your rate from 25% to 75%. It would be TERRIBLE, but you could manage because the debt was 1/75th of your yearly paycheck. However, imagine that interest got jacked up to 75% on a $30,000 discover bill? The debt was 1/2 of your salary, and the interest payments alone would break you.

This is what’s going on with the government right now.

In the 1970s, as inflation happened, 10 year interest rates rose as a sign of inflation. Gold and silver also rose – not because of the 10 year, but because gold and silver become more valuable with NEGATIVE real yields.

If the 10 year interest rate is 5%, but inflation is 10%, that is negative 5% REAL YIELD. In order to combat this inflation, your rates increase, hopefully, faster than inflation. This is why gold SKYROCKETED 24x in the 1970s. No matter how much the 10 yr went up, inflation was MUCH higher.

Inflation was a MAJOR battle in the 1970s, with campaigns launched to fight it. Eventually, in 1980, Paul Voelker SLAMMED inflation in the face by raising interest rates to 20%. Inflation was 15%, and this instantly made the REAL YIELD 5%, and thus people left gold to invest in these 20% treasuries.

The difference was, they COULD raise the rates to 20% on $800 billion. When that happened, my mom was a real estate agent and instantly no one bought houses anymore. Who would? At the same time, this creates a lot of pain in the economy with having to service that debt, but it’s short term. Today, we CANNOT raise the rates on $27 trillion in debt. To put it in terms of your $75,000 paycheck, this is like $100,000 in Discover card debt that they would jack up to 50% interest. Essentially, your entire paycheck would go to service the debt only, and no other bills can be paid. No mortgage, car, student loans, utilities.

This is the problem we are faced right now with – and inflation is here.

Inflation versus deflation

So if you look at the chart above, you see a steady down trend. If 10 year rates going up signals inflation, then if this goes down, does it signal deflation? Yes! And…NO.

This does not mean the milk in the grocery store goes from $4 to $3. I had family who were milk farmers, and they were squeezed out by rotten corporations. What happened in this case is “disinflation”. Meaning – the costs of things around them like labor, rents, energy, insurance, etc are going up FASTER than the price of the good they are selling.

So 10 years ago, maybe a gallon of milk was $3.50. Maybe today it’s $4.00. So the price of the good went up 1/7th, or about 14% in those 10 years. But if their costs of labor, rents, utilities went up from $100 to $150 in those 10 years, that’s 50% cost of production. Meaning, if costs of producing things do not go up as fast as COGS (cost of goods sold), this is deflationary.

Essentially, for a business like that to stay in operation, one of two things needs to occur:

  1. Price of product you are selling needs to go up. In the case of a commodity like corn or wheat, the prices are set by the market, not you. You do not have superman milk in which differentiates your product from farmer Smith down the street.
  2. Cost of Goods sold (COGS) needs to decrease. This can only be achieved these days with mega corporations squeezing every nickel from every crevice. These firms have access to millions and billions of dollars at much lower rates than a family farmer. They buy larger equipment that can be more efficient. They have larger healthcare pools to keep costs of healthcare down. They centralize operations and make processes uniform.

In the above scenario, this is essentially what has happened to every mom and pop store or farm in this country over the last 100 years.

I digress- disinflation can be bad, and it shows how a product NEEDS inflationary prices if you are to cater to smaller businesses. But, the mass of people today buy from the Walmarts of the world, who source their products from other countries with lower COGS. People shopping at Walmart have to find bargains – because they are the people above who have been squeezed. They WANT to help their local community out, but have NO CHOICE but to shop for the lowest costs.

With DEFLATION, these pressures can also be bad for an economy. Let me also paint a picture from above with the 10 year.

Imagine you are a bank, and you lend someone $100,000 to buy a home over 30 years at 8%. That bank is then expecting over those 30 years, they may get $200,000 back. So, they put in $100,000 and expect to get $200,000 back.

You go and refinance 5 years later with company B. Instead of the bank getting that stream of $200,000 over 30 years, they made a couple of thousand on the loan in interest and are now bought out at principle. THAT income stream dies. Where the economy expected $200,000 to come back, now only $108,000 did.

Company B is in the same boat, because you refinanced there at 6%. And on and on with refinance.

If you take all of the properties in the country and put a 30 year rate on them at 8%, you expect X number of dollars to be inflated into the economy over those 30 years. However, with lower interest rates, those numbers are a fraction of what’s projected. This has cut major profits for banking over the last 40 years.

And with this, it is deflationary in the sense of money supply.

Inflation is supposed to combat this, but we cannot raise rates due to DEFICIT SPENDING.

Essentially, the government has spent on everything and anything the last 40 years.

With regards to your home spending – imagine you were paying out $3,000 in expenses per month, but after refinancing everything, you are now spending $2,000 and putting $1,000 in the bank. THAT IS DEFLATION!!

This deflation is what the government is trying to “fight” while not increasing rates because they cannot service their debt. So, you see the price of eggs go up, the price of milk go up, but your wages don’t go up. Your wages don’t go up because you work for the big corporation that is squeezing pennies for efficiency by centralizing everything.


Now, imagine no one can refinance anymore. Your cost of living continues to go up, but wages go nowhere. You have a choice:

  1. Stop spending and change how you live
  2. Continue the debt cycle and put money on your credit cards

At issue with number 2, is you will end up like the wheat farmers chicken farmers. You will go bust, because your COGS (expenses) are on runaway where your wages cannot keep up.

At some point, interest rates will rise. Inflation may be 8%, and interest rates may be 6%. If you just refinanced your house for 2.5%, you cannot buy a house for 6% unless you want to seriously downgrade. Costs of houses will skyrocket unless they lower the principal price. With 8% unemployment, this is due to happen soon.

Over the next decade, this can lead to even higher taxes to service debt. And you are going to look at your local school district with the $100 million new school and realize….what the hell did we do?

Times are great with cheap money. But…it’s coming to an end.

What can you do for the next decade to combat the stresses of stagflation?

  1. Refinance your house, ASAP. This might be the last train out. I refinanced my house with a breeze in Sept, and when I went to refinance my rental unit, you could tell the banks were getting tighter in their lending. They may have even asked for my dog’s SSN and proof of income.

2) Style of living. There’s a saying I heard I love from Dave Ramsey. “
“We buy things we don’t need with money we don’t have to impress people we don’t like”. Truth is, I stopped giving a fuck what people thought 15 years ago. I bought a new car because I live 90 mins from work and need reliable transportation. I’ll keep it until I run it into the ground, but I won’t run out every 3 years and get a $40,000 shiny piece of metal to impress someone.

3) Get healthy. I put on the COVID 25 and hurt my back a few months ago, so I’m not the billboard for this, today, but I am never a quitter and love exercise and cannot WAIT to do it a lot again. You probably spend $300 a month on smokes. $600 a month eating out and getting delivery. Buy a bike. Buy gym shoes and a treadmill. Get a simple weight set. Go for walks with your dog. Learn new recipes. By lowering your weight and blood pressure now, you are not only giving yourself 10-20 years on the back end, but end up saving yourself hundreds of thousands in doctors bills.

4) Learn new skills. Recently, I started redoing my basement. Learning to build walls, drywall, mud, drop ceilings. I worked in security. I got paid to play trumpet years ago. I have a LOT of skills. If I lose my job in this mess, which I hope not, I have tried to build up a lot of skills to make myself useful.

5) Buy hard assets. While many of you can’t fathom buying gold at $1900 per ounce, you can buy silver for $25 per ounce. You don’t have to get a wheelbarrow’s worth. Maybe each week you buy 2 ounces? 6 years from now, silver might be $300 per ounce. There are massive supply/demand issues along with deficits yearly and no new big silver mines coming online to help supply. Meanwhile, if you subscribe to “green” anything, you are looking at the usage of silver. From what I read, there’s about an ounce of silver in each car. Each electric vehicle uses about 3 ounces. While it doesn’t sound like a lot, last year 70 million cars were built. In the next 10 years, all of them will be electric. So just people buying EVs could increase silver usage to maybe 200-300 million ounces per year. There’s only 800 million mined. It’s used heavily in solar panels.

Hard assets could also mean real estate. I do rentals, because I feel if prices inflate over the next 10 years, I could have a situation where my property plus taxes cost me $750 per month, my rents today could be $2,000 – BUT if everything inflates over the next 10 years and you have $300 silver and $10,000 gold, this could mean rents are 5x more. Maybe I have a fixed cost of $1500 (taxes may have skyrocketed) on $10,000 rent?

6) Sell shit you don’t need. I did this last fall. Anything not nailed down, I sold and converted to silver and mining stocks. Have an old treadmill after you bought your new one? Sell it for $25. There’s an ounce of silver, which in 6 years could be $300. Anything not nailed down, see if you can sell.

7) Have SOME cash. Maybe have $500 cash in the house per person in the household. If your bank goes under, you might need emergency funds. I would not go TOO much into cash because this is what our currency is doing:

Many people feel this can drop off of a cliff once it hits 88.5. Some project this year it could be under 70. What this means is the spending power of your money decreases. Buying hard assets above can help with this.

8) Save money. I know, I know. you have none left to save. Well, if you follow some of my advice above, you may have plenty to save. You might also be able to do a side hustle to put some away, become a slumlord, or uber driver.

9) Speak to a financial advisor. While it might cost you some money upfront, they may be able to then make that money back for you in minutes with recommended changes.