🚨 The lowest in over 4 YEARS

September 5, 2025 >> Since December 2022, it has dropped by $2.5 TRILLION

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Dear all,

As I sift through the latest charts and numbers, I can’t shake the feeling that we are once again living through one of those rare moments when the financial world begins to turn on its axis.

The data doesn’t come to us in neat conclusions - it comes as echoes, reminders, warnings.

I see the same rhythms I’ve studied in past cycles, and they are resurfacing right now in front of us.

The whispers of history are loud in the present moment, and each chart I look at seems to be hinting at the same thing: the foundations are shifting.

📉 The Tension Between Yields and Commodities

The collapse of the US 2-year yield to 3.6% alongside commodities climbing to near all-time highs is not just a quirk of the market - it’s the essence of a tug of war that history has shown us before.

I think of the late 1970s, when yields briefly softened from 10% to 7% while the CRB commodity index exploded higher by +120%.

The result was a devastating resurgence of double-digit inflation, and policymakers were left with no good choices.

I see the same dynamic today: the Fed is being pulled between the unbearable weight of debt service and the ever-present threat of inflation running hotter.

It’s as if two tides are colliding, one demanding cheaper capital to keep the system afloat, the other roaring back with the fire of higher prices.

These opposing forces never coexist peacefully for long; the divergence becomes the breaking point where policy and markets collide.

And when they do, history shows us the fallout is never linear - it comes with sudden swings in yields, abrupt moves in currencies, and violent rotations in equity sectors.

The past reminds me that when bond markets and commodities speak different languages, investors cannot afford to ignore them.

👷 A Labor Market Losing Its Strength

Then there is the labor market, always the beating heart of the economy.

The construction quits rate has collapsed to 0.9%, the weakest level since the Global Financial Crisis.

I can’t help but remember how, in 2007-2009, the same pattern unfolded: quits below 1%, the S&P 500 down -56%, and 10-year Treasury yields plunging from 5% to 2%.

We aren’t there yet, but the direction feels eerily familiar.

ADP payrolls added only 54K jobs in August, far short of the 148K average of the last fifteen years.

Contrast that with the surge of +1.25M jobs in August 2021 or the collapse of -6.1M in April 2020.

Each number tells a story of momentum fading, of energy draining from the system.

Every time the labor market weakens like this, Treasuries strengthen, and the dollar yields ground to havens like the yen and the Swiss franc.

It is a chain reaction: fewer people quitting jobs means confidence is slipping, weaker payrolls mean growth is faltering, and the ripple effect spreads into spending, earnings, and asset valuations.

The rhythm is familiar because we have danced to it before - sometimes slowly, sometimes in a rush, but always with consequences.

And while no two cycles are identical, the echoes of 2001, 2008, and 2020 are unmistakable. The labor market doesn’t lie; it leads.

🥇 The Silent Strength of Gold

And yet, while yields sink, jobs weaken, and liquidity evaporates, there is one asset quietly absorbing the uncertainty: gold.

Last week alone, the SPDR Gold Trust (GLD) took in $3.3B in inflows.

This is not speculative mania - it is a steady institutional bid, the same kind of accumulation we saw in 2008-2011, when gold surged +170% while the S&P managed just +47%.

Central banks are driving part of this move too: today, 76% of them say they plan to increase their gold reserves within five years, up from 50% in 2022.

And when I look at performance, the story deepens - the S&P 500’s total return in gold terms is -19% YTD and -29% since 2022.

History tells me that whenever equities underperform gold for three consecutive years, as in the 1970s and the early 2000s, the trend does not stop there.

It persists, reshaping portfolios and rewriting strategies.

What makes this moment different is the silence of it all - no frenzy in retail markets, no mania in search engines or option activity.

This is a rally being led by the quiet accumulation of institutions and central banks.

It is patient money, strategic money, the kind of capital that shifts the tide without making waves at first.

Gold is stepping into the role that bonds and the dollar once played: the stabilizer, the diversifier, the hedge against everything else.

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