Beat Inflation With Commodities: Gold, Silver, Bitcoin and Ethereum Explained

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Unemployment is climbing, the Dow dropped a thousand points in two days, and GDP is heading the wrong direction. In this Friday show I walk through what's actually happening to the dollar and why the wealthy don't sit on piles of cash — they hold assets.

This isn't a "sky is falling" video. It's the same weekly checkup I do on my own money: emergency savings first, debt payments gone next, and then a little bit into assets every couple of weeks.

What you'll learn

• How much value the dollar has lost over 100 years — and over just the last five
• Why a 0.1% move in the unemployment rate is bigger than it sounds
• What checking, CDs and Treasuries actually pay versus inflation
• How gold, silver, Bitcoin and Ethereum performed so far this year
• What an inverted yield curve is telling us about a recession
• How I diversify with small, regular buys instead of holding extra cash

Three things going the wrong direction

I open with the numbers: unemployment started the year around 3.5% and is now about 4.3%. Interest rates are incredibly high compared to the last ten years. GDP — how productive the country is in goods and services — is going down. When all three of those move the wrong way at once, you plan.

What the dollar has actually done

Over the last 100 years the dollar has lost about 99% of its value. Over just the last five years, a dollar is now worth about 78 cents. So whatever you've been saving in cash for five years buys noticeably less today. If that same money had been in an S&P 500 ETF over that stretch, the example I show puts it at about $214. That's the whole point of the Friday show: cash sitting still loses ground.

Why 0.1% unemployment is a big number

People hear "3.5% to 4.3%" and shrug. Do the simple math with me. With roughly 160 million people in the workforce, one-tenth of a percent is about 160,000 people. The move we've seen this year works out to somewhere around 1.2 million people losing jobs since January. Could be more, could be less — but 0.1% is never "nothing."

Step one: emergency savings and killing payments

Before any of the asset talk, two things come first. Have emergency savings in case you or a family member loses a job, and keep doing what we've been doing here since last year — getting rid of debt payments. Whether it's $200, $500 or $800 a month in payments, when those go away the money either becomes available to invest or your monthly expenses simply drop, which means you can survive longer on less.

Cash equivalents versus commodities

I go down the board. Savings, checking, CDs and Treasuries are running roughly 0.5% to 5% and barely move month to month. Inflation is still over 3%, so even a Treasury is only just beating it. Those are cash or cash equivalents.

Then the commodities. Gold started the year just over $2,000 and sits at $2,475 — call it a 20% move. Silver went from $22.88 to $28.99. Bitcoin from $43,000 to $65,000. Ethereum from about $2,200 to $3,170. Gold, silver, Bitcoin and Ethereum are treated as stores of value: when the dollar buys less, people move into things they believe hold or gain value.

How to buy them and what the market is saying

You don't have to take delivery of physical metal. There are spot ETFs for gold, silver, Bitcoin and Ethereum you can buy and sell through a regular brokerage. On the market side, the Dow is at 38,654 after dropping a thousand points, still up from 39,945 at the start of the year in my chart, and the S&P is at 5,374 versus 4,958. At the bottom of the board, the 2-year Treasury is at 3.9% and the 10-year at 3.8% — inverted. In my opinion that means we've been in a recession for a while, which is why none of this news surprises me.

What I personally do

I keep cash for transactions and emergencies. Above that, instead of stacking more cash, roughly every two weeks I buy a little gold, a little silver, a little Bitcoin and Ethereum, plus broad ETFs. That's money I don't need in the next month, six months or year, because these things go up and down. This is informational only — don't do what I do, but do keep an eye on what the wealthy do, because they own assets rather than dollars.

Key steps

1. Build emergency savings first, sized to your bare-bones expenses — find your number here.
2. Attack debt payments so your monthly expenses drop and your cash lasts longer. Run your own numbers in the Credit Card Payoff Calculator.
3. Know what your cash actually earns after inflation before you leave it sitting — see the real return math.
4. Only with money you won't need soon, consider diversifying into assets in small, regular amounts.
5. Check the same board every week: inflation, savings and Treasury rates, gold, silver, crypto and the yield curve.

FAQ

Should I buy gold or Bitcoin before I'm out of debt?

My order is emergency savings, then killing debt payments, then assets. A credit card charging you 24% is a guaranteed drag no commodity has to beat. If you want to walk through that decision with numbers, read Buying Gold While in Debt.

What does the inverted yield curve mean for me?

Normally you get paid more to lock money up for 10 years than for 2. When the 2-year pays more than the 10-year, it's inverted — historically a recession signal. Practically, it's a reason to have savings and fewer payments, not a reason to panic. More on that in Inverted Yield Curve and Your Debt.

Isn't a 5% Treasury good enough?

It's fine for cash you need. But with inflation over 3%, you're barely ahead before taxes. That's why cash is for emergencies and transactions, and long-term money goes somewhere else.