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Each year pundits make their predictions. Some always predict gold will hit $5,000/oz. and silver will top $100/oz. I agree with friend and expert Chuck Butler, when he says, “I hope not! Too much, too fast would signal something drastically wrong, like hyperinflation.”

The 2025 numbers are in. Gold ended the year at $4,325.60/oz.- up 65%. Silver closed at $70.13/oz. – up 144%.

In the first two weeks of 2026, gold topped $4600.00. Silver continues skyrocketing, hitting $93.00/oz. A 32% increase in two weeks!

It’s Scary!

Tom Dyson echoes my sentiments in his article Psychological Warfare and Silver:

“This parabolic rise in the monetary metals terrifies me.

I’ve devoted 25 years of my life to understanding gold, silver and paper currency systems. I may be nuts, but these price moves suggest to me the world is on the cusp of hyperinflation…and a total loss of faith in their experimental paper currency system. I hope I’m wrong…”

Dozens of pundits now predict gold and silver will easily top $5,000/oz and $100/oz. respectively – and very soon….

We recently discussed probable causes for the historic silver price increase. Inflation fear is a likely contributor; however, other issues are also piling on.

Inflation

According to the government, the Consumer Price Index jumped 2.7% last year. The partisan media’s opinion is of little help, promoting their political agenda as opposed to really digging in.

Chuck Butler writes, Lies, and more lies:

“Just whom do the BLS think they are fooling with their STUPID CPI report? I don’t get it, I mean, I think even the Fed Heads know their report is a bunch of lies… This is really getting ridiculous…

The BLS reported that inflation remained at 2.7% year on year, while John Williams says that inflation is really 16%… Who will you believe? I know who I’m going to believe, and That’s John Williams of shadowstats.com who calculates inflation the way it was calculated before (The Clinton administration) started to change the way it was calculated…

They provided tons of hedonic adjustments so that inflation would look lower, and the Fed would cut rates and make housing more affordable… That’s the story behind the change, and it’s fact, folks…”

 

The Dilemma!

The extraordinary gains in metals are terrific; however, instead of 10% of your overall portfolio, metals could easily occupy 30% or more. Too many eggs in one basket?

Tom Dyson continues:

“But what do we do now? We are now past the ‘analysis’ stage of the trade and solidly into the ‘psychological warfare’ stage of the trade.

The contrarian in me wants to sell. But I also don’t want to leave silver’s massive potential upside on the table. …. I also know, once we sell, it’ll be impossible to get back into silver again if it keeps rising.”

Choices…

Metals are the best way to combat inflation; however, they are not the only options. As inflation continues to destroy the value of the dollar, currencies are traded in pairs; others will rise.

Denominating some of your investments in foreign currency is foreign (pun intended) to most Americans; offshore is far away and historically Americans have viewed the dollar “as good as gold!” It was until Nixon took us off the gold standard.

Today I want to review non-precious metal alternatives; offsetting the dollar to hedge inflation.

Let’s assume Joe SixPack has $50,000 to invest. He wants safety, income and inflation protection. He has many options…

US Certificates of deposit. In December, 2024 he could have purchased CDs paying 4.4%. His $50,000 would yield $2,200 in income. When adjusted for (reported) inflation, his investment appreciated 1.7%, $850.

Today’s rate is 3.65%. If inflation remains the same, he will gain .95%. As Chuck explains, the government number is phony; realistically Joe is losing buying power.

Holding Foreign Currency. Having an offshore account is not a requirement. Brokerage firms now allow clients to hold foreign currency in their accounts. You can buy in/exit your position with a click of a mouse. Five popular alternative options to the US dollar and their 2025 performance:

Swiss Franc (CHF) +14.3%
British Pound (GBP) +7.5%
Euro (EUR) +13.8%
Australian Dollar (AUD) +7.7%
Canadian Dollar (CAD) +4.7%

Had Joe invested $10,000 in each of the above he would have averaged 9.6%. His investment would have topped reported inflation by 6.9%.

Foreign currency exchange-traded funds (ETFs). You can purchase these funds, tied to foreign currency, through your stock broker. Their prices fluctuate, influenced by the value of the underlying currency. Like stocks, they are easily traded. Yahoo.com provided their performance numbers.

Swiss Franc – FXF +14.2%
British Pound – FXB +8.6%
Euro – FXE +13.8%
Australian Dollar FXA +7.3%
Canadian Dollar FXC +5.4%

Had Joe invested $10,000 in each he would have averaged 9.86%, beating reported inflation by 7.16%.

FDIC Insured CDs denominated in Foreign Currency. We recently interviewed friend Frank Trotter, a founder of Battle Bank.

Frank pioneered the concept of foreign currency CDs, held in US banks, covered by FDIC insurance. Your income is the interest rate each government pays, plus the appreciation (or minus depreciation) of the currency versus the US dollar. Here are the 2025 results:

Swiss Franc – +14.34%
British Pound + 8.81%
Euro +13.10%
Australian Dollar +8.24%
Canadian Dollar +5.31%

Had Joe invested $10,000 in each, he would have averaged 9.96%, beating reported inflation by 7.26%.

I found this one interesting because Switzerland has negative interest rates, yet they still beat the dollar by more than 14%.

Stocks denominated in Foreign Currency. I regularly interview Urs Vrijhof-Droese the Managing Partner of  WHVP, international asset managers, based in Zurich.

Investing offshore is a multi-dimensional challenge. Urs has access to stock markets world-wide and can hold stock in many currencies. You can gain (or lose) from the underlying stock and/or the currency in which it is denominated.

I update our holdings regularly, calculating the value of the holding in relation to the US dollar. Here are some 2025 examples from our holdings.

Swiss Franc – Roche +46.3%
British Pound – no holding
Euro – Shell +18.2%
Australian Dollar – BHP +24.3%
Canadian Dollar – Wheaton Precious Metals +119.5%

2025 is the best year offshore, by far. Urs not only allocated a portion to metal stocks, but we also experienced a nice gain from currency appreciation (a fall in the US dollar).

Investing offshore is not for everyone; the fees are expensive as compared to the US. When Jo and I decided to open the account, our primary purpose was to hedge against the decline of the US dollar. For several years we saw little if any gains. This year our patience was rewarded.

Tying things together

Bundling the five currencies in ETFs or Battle Banks FDIC insured CDs yielded almost 10%. Inflation, whatever the real number might be, still remains.

OK, I’ll say it out loud. Joe SixPack’s biggest risk is holding a major portion of his worth in US dollar CDs. While the bank pays interest, FDIC insurance does not insure against losing buying power to inflation.

Forget the political rhetoric. Regardless of what party is in power, the government is spending us into oblivion – inflation is not going away. Neither political party is willing to do what it takes to fix it!

What to do?

Tom Dyson echoed what many investors are feeling. Metals have skyrocketed, too much too soon. We don’t want to lose money, nor do we want to miss out on future gains should hyperinflation begin to appear.

Much has been written about price manipulation in the metal stocks. Chuck Butler explains the shenanigans:

“Before I retired last night, I did a quick check on the metals and saw that they were getting hammered. I said to myself, “looks like the SPTs are having their way with the metals”

I loved this line from Ed Steer, talking about the manipulation in the metals… ‘The price management has been so obvious recently, that even Stevie Wonder could see it.’ – Ed Steer from www.edsteergoldsilver.com

…. But as the night went on, the selling abated and the SPTs made the downward move look like profit taking.

…. That day will come, I do believe, that no amount of funds in the ESF is going to help the dollar, but in this case, we have to be patient, and amass our Gold & Silver holdings to make sure we’re diversified and that our protection against a falling dollar is in place…”

In my morning conversation with Chuck, he emphasized, “You should have both currencies and metals as diversified asset classes….”

I sold some metal stocks which were becoming too high a percentage of our holdings – and bought other stocks in the same sector. There is risk of any individual company having problems with mines, confiscatory governments, you name it. The foreign currencies and stocks have kept up so we still manage to stay somewhat balanced.

I hope we never have to sell our physical metal; for if we do it will be Armageddon.

This is uncharted waters. Diversifying into any of the foreign currency alternatives helps protect against inflation. Thankfully, today they are easy to implement.

It galls me when out of power politicians scream about inflation, yet, when they get their chance, they do nothing to fix the cause. Out of control government spending will continue, until the world no longer wants our funny money.

Should hyperinflation arrive, it will create much more than just a money crisis!
 

On The Lighter Side…

We spent most of the week unpacking and getting things organized in our new home. My hope was to be able to go on the golf cart later in the week and explore. Temperatures dropped below freezing. Next week temperatures are supposed to be back in the high 70’s, so we postponed our fun for a bit.

The NFL playoffs are heading to the conference championships next week. They should be exciting. The Bears tied the game with seconds remaining on the clock, but they ran out of miracles in overtime. I suspect we will see Seattle and New England in the Super Bowl. Defense wins championships, and Seattle looks pretty solid.

At the time I’m sending this article into production, the outcome of the College Championship is not known. Our local paper shared some interesting facts:

“Tuesday’s classes at Christopher Columbus High School in Miami have been canceled. …. Columbus will be busily celebrating the sight of alums hoisting the national championship trophy.

…. Columbus, a Catholic all-boys school sits about 5 miles from the University of Miami…. And about 25 miles from Hard Rock Stadium – where the game will be played – is a house divided.

…. The list of Columbus grads in this game is seven deep.”

The grads include both players and coaches. Sounds like the high school is a football powerhouse that likely recruits from all over the city.

There is no division in our house, we are pulling for Indiana. I’m hoping for a mistake-free and injury-free game!
 

Quote Of The Week…

“Inflation is not caused by the actions of private citizens, but by the government: by an artificial expansion of the money supply required to support deficit spending.

No private embezzlers or bank robbers in history have ever plundered people’s savings on a scale comparable to the plunder perpetrated by fiscal policies of statist governments.” —Ayn Rand

And Finally…

Friend Phil C. shares some puns for our enjoyment:

• Once there was a king who was only 12 inches tall. He was a terrible king but he made a great ruler.
• A book on how to fall down the stairs is a step-by-step guide.
• My son was chewing on electric cords, so I had to ground him. He’s doing better now and conducting himself properly.
• My friend claims that he accidentally glued himself to his autobiography. I don’t believe him, but that’s his story and he’s sticking to it.
• An armed man ran into a real estate agency and shouted, “nobody move!”
• I asked a surgeon if I could administer my own anesthetic. He said, “Sure, knock yourself out.”
• I got into a fight with 1, 3, 5, 7 and 9. The odds were against me.
• In Britain it’s called a lift but Americans call it an elevator. I guess we were just raised differently.
• The Lord said to John, “Come forth and ye shall receive eternal life.” Unfortunately, John came in fifth and got a toaster instead.
• I have two unwritten rules:

1.
2.

And my favorite:

• 97% of people are stupid. Glad I’m in the other 5%.

Until next time…

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The Housing Dilemma No One Discusses
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