You Cannot Print Confidence: The Bond Market Is Sending a Warning

In this week's Weekly Perspective, David Morgan examines a growing contradiction in the U.S. economy: weakening employment alongside historically high long-term Treasury yields. Despite disappointing job growth and expectations that the Federal Reserve may pause further rate increases, bond investors remain concerned about inflation, rising energy costs, federal borrowing, and America's deteriorating fiscal position.

Gold and silver experienced significant corrections as rising bond yields and a stronger dollar pressured precious metals. Morgan emphasizes that short-term price declines do not necessarily undermine their long-term investment case. He also highlights the Shanghai Gold Exchange's holiday closure and upcoming reopening as important developments to watch for renewed Asian demand and potential price volatility.

China's reported suspension of most fuel exports introduces another potential inflationary pressure. Higher energy prices threaten economic growth while increasing production and consumer costs, leaving the Federal Reserve caught between controlling inflation and protecting an increasingly fragile economy.

Morgan concludes that lasting prosperity comes from productive labor, energy, manufacturing, agriculture, mining, and savings—not currency creation. He maintains that gold and silver remain important stores of wealth despite market volatility and encourages investors to focus on long-term fundamentals rather than short-term price movements.

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