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Alice O’Connor, using her pen name Ayn Rand, was a Russian-born American writer and philosopher. She is credited with explaining, “You can choose to ignore reality, but you cannot ignore the consequences of ignoring reality.” If only it were that easy.

In today’s world, with artificial intelligence, what is reality? The media lies, the government lies, our educational system is heavily politically biased; investors must sort through the mountains of data in an effort to determine what is reality, versus political hype or just plain fantasy. We constantly worry about safety, while trying to grow our wealth.

Many Baby Boomers (myself included) were flying high, and totally shocked (literally overnight) by the 2008 bank bailout. A major market correction, historic low interest rates for over a decade, followed by high inflation which derailed most retirement plan calculations. Did we understand what was going on with the “too big to fail” banks when Glass-Steagall was repealed?

Whether we ignored – or failed to understand – reality, made little difference. The adverse consequences affected millions of Americans. Retirement dreams were destroyed; lives were irreversibly changed.

I was encouraged when friend Urs Vrijhof-Droese, Chief Investment Officer of WHVP recently wrote, When The Music Stops:

“One thing that stood out to us in 2025 is how much more seriously Americans have started to take the protection of their wealth. The growing eagerness to find safety is not surprising.

The…foreign and domestic demand for Treasuries is weakening, and the national debt has now reached USD 37 trillion as of August 2025. Against this backdrop, it becomes clear that relying exclusively on the U.S. market is not so much a strategy as it is the neglect of reality.

…. That does not mean the rest of the world is free of problems. Far from it. Global government debt hit yet another all-time high in 2024, climbing to USD 102 trillion.”

Urs is waving a caution flag for the world. It’s time to check in for his global perspective.

DENNIS: Urs, thanks again for taking your time for the benefit of our readers. Your worldview insights are appreciated.

It seems like history is repeating itself. You went on to say:

“And yet—Markets Reach New All-Time Highs

This contradiction has almost become routine. Indices tell one story of wealth and prosperity, while the real economy tells another. I sometimes tire of pointing out this dispersion, but it remains necessary because the gap keeps widening.

Stock indices long ago stopped being a reliable indicator of economic wellbeing. Today, fewer than 10% of the companies in some of the main indices account for nearly half the market capitalization and drive performance almost single-handedly. That is not healthy. It is concentration risk of the highest order.”

While you may tire of waving a yellow flag, there are many pension funds, mutual funds, and millions of individual investors who have a considerable portion of their life savings in those “Magnificent 7” stocks. Please elaborate on the “not healthy” comment.

URS: Thank you, Dennis. It’s great to be back.

The issue with the Magnificent 7 is that their dominance has created a false sense of security for many investors. These stocks have delivered impressive returns, and naturally, people gravitate toward what works. But that success can become intoxicating—like a drug. The more it works, the more investors double down, often without reassessing the risks. Over time, caution fades, and portfolios become dangerously concentrated.

What concerns me is that many investors—especially those with retirement savings tied up in these stocks—may not fully grasp the level of exposure they’ve taken on. The market’s overreliance on a handful of companies is a textbook example of concentration risk. Many times, those hi-fliers suffer huge drops when the market turns.

History has shown us repeatedly: no company, no sector, no trend lasts forever. Diversification isn’t just a buzzword—it’s a necessity for long-term financial health.

DENNIS: You explained every major Western central bank cut rates in 2025, followed by a darn-good question, “If economies were truly as strong as the equity indices suggest, why would central banks everywhere feel the need to lower interest rates?”

Can you explain the major difference between the US Fed and the European Central Bank trying to serve many countries?

URS: The key difference between the Federal Reserve and the European Central Bank (ECB) lies in their scope and complexity. The Fed manages monetary policy for a single country—the United States. While there are economic differences between states, the overall system is relatively unified.

The ECB, on the other hand, must balance the needs of 20 different countries, each with its own economy, culture, and fiscal discipline. Some nations carry high debt loads, while others are more conservative. Trying to please everyone makes policy decisions far more complicated.

Despite these challenges, central bankers are not oblivious. They access vast amounts of data and understand the pressures people are facing. The global unrest we’re witnessing is a reflection of economic strain.

When central banks cut rates, it’s not because everything is fine—it’s often a signal that beneath the surface, there are serious concerns.

DENNIS: I’ve long suspected that the Central Banks of the world are coordinating their efforts, allowing countries to devalue their currencies in unison; maintaining relative parity. If an investor feels high inflation is destroying their home county currency, with central bank coordination, alternative currencies to offset inflation are limited.

Ed Steer reinforced my suspicion:

“The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements, arrived at in frequent meetings and conferences.

…. The growth of financial capitalism made possible a centralization of world economic control and use of power for the direct benefit of financiers and the indirect injury of all other economic groups.” — Tragedy and Hope: A History of The World in Our Time, Professor Carroll Quigley of Georgetown University

Friend Chuck Butler explains:

“One currency is bucking the dollar buying and that is the Swiss franc… which tells me that a flow to safe havens is on… I’m just saying…”

What sets the Swiss Franc apart as a “safe haven”?

URS: The Swiss franc stands out as a safe haven for several reasons. One of the most important is Switzerland’s decision not to join the European Union or the European Economic Area in the 1990s. That choice gave our government and central bank the autonomy to focus on domestic priorities rather than being entangled in complex, often inefficient, EU-wide negotiations.

Of course, this independence came at a cost. Switzerland has faced pressure and even punitive measures from the EU, making it harder for Swiss companies to compete on equal footing within the European market. But in response, Swiss businesses adapted by specializing and excelling in their fields—earning global recognition and commanding premium prices.

This resilience and focus helped maintain the credibility of the Swiss National Bank, which remains politically neutral and committed to sound monetary policy. That credibility is a key reason why the Swiss franc continues to attract investors during times of uncertainty. In contrast, currencies like the U.S. dollar suffer from declining trust due to political interference and mounting debt levels.

DENNIS: One final question. “Politically neutral and committed to sound monetary policy” is the Fed’s never-ending illusion.

Money and Metals reports, “A 20% Portfolio Allocation to Gold and Silver Is Going Mainstream.”

Pundit Bill Bonner adds, “Gold is not an investment; it’s a place to put your money while you wait for a good investment to come along. It’s not a wealth creator; it’s a wealth preserver.”

You mentioned gold. With the current price surge, are you recommending investors increase their gold allocation?

URS: Gold is a multi-purpose asset straddling the line between investment and insurance. While I don’t offer blanket advice on portfolio allocations, I do believe the growing interest in gold is telling. Bill Bonner’s view—that gold is a place to park your money while waiting for better opportunities—is insightful. But I’d add that in certain economic environments, gold does behave like an investment.

We’re entering one of those periods now. People who previously ignored gold are starting to pay attention, and that shift in sentiment matters. However, it’s crucial to approach gold with the right mindset. For example, if you bought gold in 2011, you would have seen your position drop nearly 50% within four years. It wasn’t until 2018 that prices recovered to your entry level. Those who view it as insurance were not concerned; those who invested for quick gains felt much differently.

That’s why patience and perspective are essential. Gold isn’t a quick win—it’s a long-term hedge. Investors need to be prepared to hold through volatility and even consider rebalancing if prices dip. In uncertain times, gold can preserve wealth, but only for those who understand its role and are willing to stay the course.

DENNIS: Urs, once again, thank you for your time.

URS: My pleasure, Dennis.

Dennis here. Politicos of all stripes are hell-bent on spending trillions more than they take in with tax revenue. Historically, high inflation and currency collapse follows. You can’t ignore reality forever! Owning gold is the best hedge available.
 

On The Lighter Side…

The moving van arrived on schedule and Jo and I have been very busy unpacking, trying to get the new Florida home in order.

While we parted with much of our furniture in Arizona, knowing we were downsizing, we made a mistake.

Our new home is around ½ the size of what we left behind in AZ. We have over 300 cartons of “stuff” and it all won’t fit! It’s like trying to cram 10# of potatoes into a 5# sack. We are a long way from finished, but heading back to IN for the holidays. Things are somewhat organized, but there is still a lot of work to do when we return.

We look forward to getting finished so we can focus on enjoying the many amenities the Villages has to offer.

Glad the government shutdown is over. At the time I’m writing this, we are not sure our flight back home is a go. If not, we will scramble and drive back.

I’m hoping to get back to a regular writing schedule soon. Thank you all for your patience and support.
 

Quote of the Week…

“The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. Deficit spending is simply a scheme for the hidden confiscation of wealth.

Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.” — Alan Greenspan
 

And Finally…

Friend Phil C. shares some thoughts for our enjoyment:

• Still trying to get my head around the fact that ‘Take Out’ can mean food, dating, or murder.
• The older I get, the more I understand why roosters scream to start their day.
• You know you’re over 50 when you have ‘upstairs ibuprofen’ and ‘downstairs ibuprofen.’
• If only vegetables smelled as good as bacon.
• The pessimist complains about the wind. The optimist expects it to change. The realist adjusts his sails.
• We live in a time where intelligent people are silenced so that stupid people won’t be offended.
• When a kid says “Daddy, I want mommy” that’s the kid version of “I’d like to speak to your supervisor.”
• It’s weird being the same age as old people. Just once, I want a username and password prompt to respond “CLOSE ENOUGH.”

And my favorite:

• The biggest joke on mankind is that computers have begun asking humans to prove they aren’t a robot.

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