Image Source: Pexels

Something VERY bad is unfolding in the financial system right now.

Gold just cleared $5,000 per ounce. Silver has broken above $100 per ounce and is now flirting with $110 per ounce.

These precious metals were at $2,500 and $40 per ounce this time last year.

This kind of price action is exciting for precious metals bulls because it means they’re making a lot of money. But “underneath the surface” this indicates that the financial system is coming apart at the seams.

Let me provide some context…

Ever since the U.S. abandoned the Gold Standard in 1971, our financial system has been debt-based with U.S. Treasuries acting as its bedrock: these are the senior most assets owned by the banks and the yields on these bonds represent the “risk free” rate of return against which all risk assets are priced, including stocks, real estate, and yes, precious metals.

In this context, the price action in precious metals signals a panic is unfolding. That panic concerns LARGE pools of capital fleeing paper assets for hard assets like precious metals.

Put another way, this is not just a bull market in precious metals… it represents a tectonic shift. You don’t get charts like this for silver unless something is very, VERY wrong in a debt-based financial system.

This alone is deeply concerning. But the situation becomes even more worrisome when we consider just WHO is behind this panic bid in the precious metals markets.

Central banks: entities that can literally print currency at will.

Since 2022, central banks have been buying over 1,000 tons of gold per year.

Indeed, they’re getting so aggressive that they now hold MORE gold (hard asset) than Treasuries (paper asset) as a percentage of foreign reserves for the first since the mid-1990s.

Again, this is a TECTONIC shift. The deepest pockets in the world are PANIC moving into hard assets.

This tells us something BAD is coming.

And investors have a small window of time to prepare for it.

More By This Author:

The Dark Truth About Trump’s Attack On The Fed
Silver Is Becoming A Systemic Risk
Japan Is About To Go Bust… Is The U.S. Next?