History is About to Be Made... (Emergency Update)

We need it for security purposes. We

need it for national security and even

world security. It's very important.

>> David, we're seeing economic retaliation

now from the European Parliament in

response to US aggression.

>> The Europeans are furious. They're

resentful and the impact of all of this

will be felt for years to come. The

shifts happening right now in the global

monetary system, the geopolitical order,

and global trade have profound

implications for the market. But the

vast majority of people are completely

misreading what is truly happening in

financial markets today. Take a look at

this chart. It shows us the US stock

market against what's called the US

economic policy uncertainty index. Now,

while in early 2025, the US stock market

and US economic uncertainty moved in

tandem to one another. We've seen a

divergence build between these two lines

over the course of the last year. So

despite US economic uncertainty

remaining at one of the highest levels

over the last 30 years of data, the US

stock market has somehow been able to

thrive and make new all-time highs. Now

on the surface, it looks like investors

have simply stopped caring about this

level of uncertainty that they are

completely disregarding the threats to

global trade and the geopolitical order.

But this couldn't be further from the

truth. You see, if we look at the US

Treasury bond market, it has been

falling over the course of the last

year, declining by 12% over this period,

which is the equivalent to wiping out

$360 billion worth of market value off

the US Treasury bond market. And the

same thing can be said about the US

dollar index that has also been

declining, meaning the US dollar has

lost purchasing power relative to other

global currencies. Just over the course

of the last month, we've seen a record

hundred billion dollar of outflows from

US money market funds. According to Else

Sega data, geopolitical risk, sovereign

debt risk, and now the offloading of US

assets by foreign holders. All of these

things are happening right now. The

truth is we are seeing a massive flow of

capital out of US assets as a result of

all of this uncertainty. Now, you might

be thinking, if that's really the case,

why are we not seeing the US stock

market decline? Well, when a currency is

losing value, weird things can start

happening in the market. So instead of

measuring the US stock market in US

dollar terms, we can look at how its

price is evolving compared to something

that is holding its value like gold.

Gold's primary use case has been a

storehold of value for thousands of

years, weathering through the storms of

many currency collapses throughout

history. So by anchoring the S&P 500

index to gold instead of the dollar,

we're removing any potential impact of a

currency devaluation. And this is what

it looks like. Indeed, since December of

2021, the S&P 500 index has fallen by

45% measured in gold and is now hitting

the lowest levels since 2014. This

decline really began to accelerate right

here in late 2024, which is the very

moment where US economic policy

uncertainty began to rise. If we compare

that to the S&P 500 measured in dollar

terms, we see that this has led to a

spectacular divergence between the two.

The current levels of uncertainty is not

leading to a nominal collapse of the S&P

500, but instead a collapse in the real

return of the index. So, what does this

all mean for the actual S&P 500 index

right here? Well, it means that

investors are flocking away from the

stock market, but they're flocking away

from the currency at the exact same

pace. And this is the element that most

people are missing right now. They only

see the reason for why investors should

be moving away from the US stock market

and concluding that this should

necessarily be putting downwards

pressure on an index like the S&P 500.

But the problem is that the S&P 500 is

measured in US dollars. And the dollar

is also seeing a record outflow as well.

This means that in currency terms, the

S&P 500 is stable or even rising

slightly, but in gold terms, it's

contracting substantially. Gold has been

the best performing asset in 2025. We've

been fortunate enough to ride it the

entire way through. If you're wondering

how we are approaching gold as an

investment in 2026, you can watch our

2026 investment strategy report for free

in the description below. Now, what does

this mean for the S&P 500 index looking

forward? For now, we've seen the

outflows from the US dollar outweigh the

outflows from US equities, which is why

the S&P 500 index is making new all-time

highs. But the big question is whether

all of these concerns are eventually

going to lead to a panic in the stock

market like what happened in early 2025

that could lead to a large contraction

in the S&P 500 index even when measured

in terms of dollars. At the end of the

day, the answer to that question depends

on the S&P 500's earnings. And this is

what they look like. Earnings have been

melting up over the course of the last

year despite the many predictions that

they would contract following the

implementation of tariffs. Quite the

opposite has started to take place.

Earnings have actually accelerated

higher. Now remember, earnings are

priced in US dollar terms. This means

that earnings are not adjusted for

inflation and certainly not adjusted in

terms of gold. So if the dollar loses

purchasing power, companies don't need

to sell more units, gain more market

share, or improve their productivity in

order to see their earnings rise. This

is exactly what is taking place right

now. In some ways, this is a loophole in

the financial system that the Trump

administration is benefiting from,

whether that is intentional or not. But

this is exactly why we have the stock

market at all-time highs and also why

strong earnings could continue to push

the market higher. Now, there is a very

important nuance. The stock market is

not a perfect representation of

earnings. We can see that the index

swings up and down around earnings

depending primarily on investor

sentiment and allocation. Despite very

strong earnings throughout 2024 and

2025, the stock market witnessed

multiple corrections exceeding 5%. In

the short term, a four to 5% correction

from the all-time high would not

surprise us. But just like in April, we

do not believe that this will derail the

underlying direction of earnings that

currently have significant tailwinds

pushing them higher. The real

consequences from all of this, however,

is that outflows from the US are not

just going into gold. They're going into

foreign markets around the world. It is

creating shifts in how capital is being

allocated across global financial

markets. We currently have exposure to

Argentinian stocks, Greek stocks, and

the UAE at Bravos Research as a way for

us to take advantage of these massive

flows in capital out of the US. Again,

we highlight the details of our strategy

that you can access in the report that

you can watch for free in the

description. Thank you for watching.