Metals and Markets This Week
Gold (via GDX, GDXJ miners) gained 1.1% on the week, closing at $4,193. Silver moved the opposite way, down about 1.1%, closing at $60.70; it traded in the 50s, down into the 59s, maybe the 58s. Anything below $60, or near $60, is a strong buy for silver, which sits on support. The same logic applies to gold. Silver will not go much lower than $60, and will not stay below $60 when it dips. Gold should not fall below $4,000; if it does, it will not go much below and will not stay there long. Buy gold and silver now, take delivery through shiftgold.com, or set up storage through tagold.com before prices rise.
Gold and silver mining stocks rose: GDX up 2.4%, GDXJ up 1.5%, both beating regular stocks. Bitcoin did poorly, down 43%. Oil closed up on the week; crude oil at $91.85, holding firm, though diesel prices slipped. The dollar index rose, back above 102, at 102.2. The dollar will not go much higher than this. At some point the bottom will drop out of the dollar and it will fall. That has not happened yet, but it will.
Bond Yields Heading Back to Normal
Bond yields slipped on the week. The 30-year Treasury yield closed lower at 5.6%, after hitting 5.73% on Wednesday, a new high going back to 2002 - a roughly 24-year high. A recovery followed, since nothing drops in a straight line. The 10-year Treasury yield also fell, closing at 5.24%, after an intraweek high of 5.36% on Wednesday, also a new high from 2002.
These are not high rates by history. They only look high next to the last couple of decades. We lived in a "bond fantasy land" of artificially low rates, held down by central bank intervention and quantitative easing. That period is over, and rates are returning to reality, which means much higher rates.
Why 4% Is Not Normal
Grant Cardone, speaking about real estate, said he is buying property at great prices now because he expects mortgage rates to normalize back down to about 4% and the market to recover. But 4% is not normal. The post-2008 financial crisis created the false belief that the last roughly 15 years were normal. They were abnormal. Rates rising now is the real normalizing. We are returning to normal mortgage rates after more than a decade of abnormally low ones.
Mortgage rates now sit at 7.4%, which is still low given how much debt we carry. The more debt a society has, the higher the interest rate creditors demand, because heavy debt makes a borrower less creditworthy and more likely to default. For the US government, creditors also expect inflation and build that into the rates they charge. People are delusional to think today's rates are the aberration. The low-rate era was the aberration; now is the return to normal.
Real estate bargains bought today could become expensive mistakes if borrowing costs stay high. Cheap credit shaped property values, encouraged borrowing, and made costly assets look affordable. Buyers should judge cash flow under realistic financing, not yesterday's cheap money.
High Debt Plus High Rates: A New and Dangerous Combination
We are returning to high rates while carrying high debt, a mix never seen before. The four possible states:
- Low debt, low rates - great.
- Low debt, high rates - okay, because debt was small.
- High debt, low rates - manageable, because debt cost little.
- High debt, high rates - where we are now - a disaster.
Debt is higher than ever, and rates may end up higher than ever. Nobody is talking about this. I am a contrarian in expecting bond yields to keep rising. Even those who agree yields will rise think they will not rise much more and will then come back down. They treat it as a temporary, wartime-related situation that will blow over. It will not. We are going back to normal, and normal means much higher rates. The problem is our debt is abnormally high, so we cannot handle even normal rates, let alone the high rates coming.
The Fed Is Still Too Easy
FOMC minutes released Wednesday show members expect more rate hikes; they are not done. The odds of an October hike are now very slim, so no October hike, but more hikes are coming. Some FOMC members admitted current Fed policy is not restrictive. I argued for years, while the Fed claimed its policy was restrictive, that it was actually accommodative - which is why inflation got worse. Policy is still accommodative, and rates need to go far higher than the Fed signals or markets expect.
Rising bond yields are a major story in financial media. The stock market, at least the big names, shrugs them off. In the discussions I watch, everyone feels sure we are near the highs: maybe 5.5% on the 10-year, 6% at most; they mention 6% on the 30-year but doubt it gets there. Tom Lee, in an interview, called rising bond yields transitory - the same word the Fed used for inflation. The market may be pricing in a policy victory before the inflation fight is actually won.
Record Consumer Pessimism
New data contradicts the president's claims. University of Michigan consumer sentiment was expected to rise from 47.8 in September to 48. Instead the preliminary October read fell to 46.3, around a six-month low. Year-ahead inflation expectations rose from 4.6% to 4.7%, more than double the Fed's 2% target. High inflation now, plus expectations of more, is one reason people are so pessimistic.
The midterm elections will be a pocketbook vote decided on the economy. War matters only through its economic effect; no Americans are dying in the Iran war, so its real impact shows up at the gas station and supermarket. Republicans will lose because the economy is bad; if it were good, they would win.
The most striking part of the report is the current conditions index, which hit a new all-time record low. American consumers have never been this worried about their own finances as they are in October 2026.
75 Years of Crises, Yet Today Is the Low Point
The survey started in 1951. Over 75 years, Americans were never as worried about their personal finances as they are now. Donald Trump says the economy has never been better in history, which would include all 75 years - two directly opposing ideas. A list, posted on X, puts it in perspective:
- 1951-1953: Korean War, many Americans died. People were less worried than now.
- 1953-1961: three official recessions. Not once were people as worried as now, when the economy is supposedly in a historic boom.
- 1962: Cuban Missile Crisis, risk of nuclear war. Less worried than now.
- 1963: assassination of the president. Less worried.
- 1960s-1975: Vietnam War, the Tet offensive. Less worried.
- 1968: assassinations, civil unrest, protests. Less concerned than now.
- 1972-1974: Watergate, Nixon resigns. Fine.
- 1973-1975: Arab oil embargo, gas shortages, hours-long gas lines, stagflation, recession. Still more optimistic than now.
- 1987: Black Monday stock market crash. Did not faze people.
- 1980s: savings and loan crisis, a recession, the Gulf War. Far less worried than now.
- 1997-1998: Asian financial crisis, Russian default, collapse of Long-Term Capital Management. No big deal compared to today.
- 2000-2002: dot-com bubble burst, recession, 9/11 attacks on the World Trade Center and Pentagon, many deaths, war. Consumers were more optimistic.
- 2007-2009: 2008 financial crisis, housing market crash, Lehman Brothers and Bear Stearns bankrupt, Fannie Mae and Freddie Mac fail, the Great Recession. Consumers were less worried than today.
- 2011-2012: US debt downgrade, European debt crisis, debt ceiling fight. Worried, but far less than now.
- 2020-2021: COVID pandemic, lockdowns, mass unemployment, masks, quarantine. Less worried than now.
- 2022: Russia invades Ukraine, highest inflation in four decades. Still less worried than now.
The Core Contradiction
What does this tell you? The idea that we have a great economy is pure fiction. How can the economy be this great while consumers are this worried about it? An economy can post strong headline numbers while households feel financially trapped. Record-low ratings of personal finances deserve scrutiny next to employment, growth, and market performance. Sentiment alone cannot prove the whole economy is failing, but persistent pessimism may hold back spending and confidence. For protecting wealth, the gap between official optimism and real household experience is what matters. Investors should watch household resilience, not just stock indexes.
