Eggs Are Not Dairy; Crypto Is Not Money (Only Gold Is)

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Apparently, the marketing displays (DAIRY AND EGGS) in retail grocery stores still have shoppers and consumers convinced that “eggs” are “dairy”. After several decades, why would they not believe it? It does not matter whether or not there was a purposeful intention behind the practice; the two separate products are not linked or related except for the convenience of refrigeration and location for shoppers.

I’m not going to pursue the matter further except to highlight that dairy products (milk, yogurt, cheese(s)) originate from the milk of certain mammals (cows, goats, sheep, camels), and eggs come from chickens. Chickens are birds. Cab Calloway said it best: “A Chicken Ain’t Nothing But A Bird”. A bird is not a mammal. And it does not matter which came first – the chicken or the egg.

When it comes to cryptocurrencies (bitcoin, ethereum, ripple, etc.), the marketing has been purposeful and misleading with the intention of convincing investors, consumers, and pretty much everyone, that cryptocurrencies are money. The most egregious example of this concerns bitcoin, which has been marketed from the get-go as money and a potential substitute for the U.S. dollar. Bitcoin has also been termed by some “a better store of value than gold”.

These claims are repeated nonstop by marketers and proponents. High-profile pitches by celebrities and insane statements and endorsements by wealthy individuals have helped normalize the concept and belief that crypto is a last chance for monetary stability and financial survival. That is not true.

CRYPTO IS NOT MONEY

For cryptocurrencies to be considered money, they would need to function as a measure of value. For example, how many bitcoins will your next car cost? How much ripple will you need to purchase the new dress you want?

We don’t know because there is no reasonably reliable application of value for bitcoin and other cryptocurrencies. In other words, how much is bitcoin worth? Who knows? At least with US dollars – for the time being – they serve as a medium of exchange and a measure of value.

Bitcoin and other cryptocurrencies cannot be termed stores of value, i.e., stable purchasing power. There is no history of sufficient length to provide evidence of that. Sufficient evidence would require centuries. In this regard, gold is the only real money because it is a proven store of value.  (see Is Bitcoin Money? Does It Have Value?)

CONCLUSION

Bitcoin and other cryptocurrencies offer a process for the private transfer of money. The decentralized tracking system (blockchain) offers freedom from regulatory oversight and potential taxation. However, these benefits might not last much longer. (see The Rush To Regulate Crypto)
Cryptocurrencies cannot be stores of value (purchasing power) because they have no intrinsic value and no history to support that kind of claim.

In addition to acting as a medium of exchange and a measure of value, gold is a proven store of value; the three characteristics that make gold “real ” money.

Gold’s value is in its use as money – real money. That is just as true today as it was centuries ago. (also see Gold’s Singular Role)

New Closing Lows For Gold And Silver

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Spot gold closed Friday in New York at $4490 and spot silver closed at $67.69. Both prices were new closing lows for the two metals. See the charts below, courtesy of Kitco…

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AI Is Bullish On Gold – What About You?

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Occasionally, I have asked ChatGPT for its thoughts on certain topics with the intention that it might provide additional perspective to the subject at hand. I did so again. This time I asked about the gold price and what might be expected over the course of 2026…Kelsey’s Gold Facts:  “Where are gold prices headed over the course of 2026? Please include some specific target prices and reasonable explanations.” 

ChatGPT: Probabilistic Outlook for 2026…

If we combine macro conditions, historical gold cycles, and current forecasts:

Scenario Probability Price Range
Base case ~50% $4,300 – $5,000
Bull case ~35% $5,000 – $6,000
Bear correction ~15% $3,700 – $4,200

Gold will respond most strongly to these signals:

1. US real interest rates (10-year TIPS)
Gold rallies when real yields fall.

2. Central-bank purchases
If annual purchases stay above ~800–1,000 tonnes, it strongly supports prices.

3. Dollar index (DXY)
Weak dollar = stronger gold.

4. Fiscal stress / debt markets
Treasury market volatility tends to push gold higher.

Bottom line…

A reasonable expectation for 2026 is:

  • Average price: roughly $4,500–$5,000

  • Likely trading range: $4,000 – $5,500

  • Extreme upside scenario: $6,000+

The structural drivers (central-bank buying, monetary instability, and declining real yields) remain strongly supportive of the gold bull market.

BEARISH SCENARIO?

Kelsey’s Gold Facts: Thanks for your input. Your assessments indicate that higher prices are likely for both gold and silver over the remainder of 2026. Is that correct? 

ChatGPT: Yes—that is the general conclusion, with an important qualification.

Based on current macroeconomic conditions, most analytical frameworks suggest that both gold and silver are more likely than not to trend higher over the remainder of 2026, though volatility and interim corrections should be expected.

The probability-weighted outlook for gold indicates:

  • Base trend: upward

  • Likely trading range: roughly $4,000–$5,500

  • Average expectation: about $4,500–$5,000

The main factors supporting higher prices are:

  1. Central-bank gold accumulation
    Central banks have been large net buyers for several years. This creates persistent structural demand that tends to support prices during pullbacks.

  2. Potential decline in real interest rates
    If monetary policy eases or inflation remains elevated relative to interest rates, real yields may fall—historically a favorable environment for gold.

  3. Fiscal and geopolitical uncertainty
    Elevated global debt levels and geopolitical tensions often increase safe-haven demand.

CONCLUSION 

How “realistic” are AI (ChatGPT and others) projections for gold prices? Some subtle provocation is intended. After all, we are looking to “artificial” intelligence for answers. See here for more information about AI price projections for gold and other precious metals.

(also see Silver Price Implosion – What About The Fundamentals?)

Gold vs Silver – Gold STILL Wins

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GOLD VS SILVER 

The past year has been wild and crazy for both gold and silver. After peaking at about $120 oz. scarcely one week ago, silver gave up almost 40% of that in one day, with an intraday low at $73. A strong reversal to the upside brought the price back to $84 at the close (January 30, 2026). Silver closed today (February 6, 2026) at $77, down 8% since last Friday’s collapse.

Gold, after peaking at $5500, dropped below $5000 with a loss of about 11% (January 30th) and closed today (February 6th) at $4966, a few dollars below last Friday’s close.

Rather than try to predict what might or might not happen next, let’s take a look at where we’ve been. More specifically, we will compare gold and silver performance since 2016, 2011, 1999, and 1980. As good as silver’s price performance has been, gold STILL wins.

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Musical ‘Fed’ Chairs – Same Old S—*

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MUSICAL ‘FED’ CHAIRS

Eight years ago: “President Trump nominated Jerome H. Powell as the new Chairman of the Federal Reserve Bank. Don’t look for much to change.” (see New Fed Chairman – Same Old Story)

Two weeks ago: “I am pleased to announce that I am nominating Kevin Warsh to be the CHAIRMAN OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM. Congratulations Kevin! PRESIDENT DONALD J. TRUMP (Truth Social)

Before Powell was Janet Yellen…

“…if Ms. Yellen makes it through the current year unscathed, she won’t be hanging around afterwards. She won’t want to extend her risk of being at the helm when the ship sinks. And don’t trouble yourself worrying about who the next Fed chief will be.  It doesn’t matter.”  

WHY DOESN’T IT MATTER? 

Expectations that a “new” Fed chair will make a difference are shortsighted. The Federal Reserve has its own agenda.

The Fed is a private institution; a bankers bank. Banks exist for the purpose of creating money, lending it out, and collecting interest – in perpetuity. Also, the inception of the Fed was authorized by Congress AFTER a promise was made to insure that the U.S. government never ran out of money.

Deficits are funded by the Fed via monetization and placement of Treasury securities with primary dealers (banks). Any treasuries not sold to investors remain on the books of the banks, including the Federal Reserve.

NOTE: The largest single holder of U.S. Treasury debt is the Federal Reserve Bank, at about $6 trillion. This is 16% of the total debt ($38 trillion) and five times the amount of U.S. debt held by Japan.

Japan holds nearly twice as much ($1.2 trillion) U.S. debt as China ($680 billion) which is third on the list behind the United Kingdom ($889 billion).

THE FEDERAL RESERVE CONTROLS THE PURSE STRINGS 

Government spending is dependent on the creation of money by the Federal Reserve. Without the Federal Reserve, government spending would come to a screeching halt due to a lack of funds.

Nominees must be vetted (unofficially, of course) by the Fed before approval by Congress. If you think that is hogwash, then ask Judy Shelton. (see The Federal Reserve vs. Judy Shelton And Gold)

ANYONE who is nominated and approved, and sits on the Federal Reserve board in any capacity MUST/WILL fit right in.

CONCLUSION 

The Federal Reserve System operates independently, and in the interest of the banks and those who own the banks. It has never been about “doing the right thing” or “serving the public” or “correct policy”.

The Fed and its member banks have created the inflation that has destroyed more than 99% of the purchasing power of the U.S. dollar. The effects of that inflation have left the entire world awash in debt and hooked on cheap credit. The U.S. government approves of this because it is a primary beneficiary of the largesse.

Where we are today is the culmination of decades of irresponsible financial/fiscal policies and a complete abdication of fundamental economics.

The Fed now spends most of its time and effort trying to contain the damage stemming from a century of inflation which it created, interest rate manipulation, and market intervention.

Greenspan, Bernanke, Yellen, Powell, (or Warsh) make no difference. It is the same old story, same old song, same old s___. (also see Federal Reserve – Conspiracy Or Not?)

Crypto Collapse Shatters The Fantasy

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(The original version of this article was published at Talkmarkets.com as New Lows For Bitcoin and Ripple )

Cryptocurrencies are collapsing. Just a few hours ago today (Thursday), the price of Bitcoin (BTC-USD) touched $60k, down 23% from its $78k price in my original article on TalkMarkets two days ago. The selloff in Ripple (XRP) was worse. Its price at about the same time as Bitcoin reached its latest nadir, was $1.14 – down down almost 30% from its $1.60 print on Tuesday.

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Silver Price Implosion – What About The Fundamentals?

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The price of silver literally collapsed Friday, declining more than $45 oz. from its intraday peak of just over $120 oz. the day before. The spot price intraday low had a $73 handle, and in less than one day the silver price implosion amounted to 39%. On a net closing price basis ($115 oz. to $84 oz.) the decline ($30 oz.) is more moderate at 26%.

In my previous article Do The Fundamentals Justify $100 Silver?, the price of silver was perched at $94 oz. At the time, it had not broken through the $100 mark, but it appeared that it could/would do so shortly…

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Do The Fundamentals Justify $100 Silver?

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Silver closed at $98 oz. on Thursday (1/22/2026). Momentum could take it right through $100 and higher. Projections of $120,  $500, and even $1000 oz. are plentiful. We are told that the fundamentals indicate and support such lofty projections. But, do they?

Only a couple of weeks ago, silver was closer to $70 oz. At that time, I posed a question to my friend at Chatgpt:

“How much of a factor is pure price speculation in the higher silver price increase from $30 to $70+ vs. real fundamentals? In other words, do real fundamentals justify current price of $70+ and predictions of $100 or more? Please be specific when using percentages and price levels.” 

Here is the complete answer I received followed by my own comments…

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Why Is The Fed Buying T-Bills?

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(This article was originally published on TalkMarkets.com December 11, 2025)

The expected reduction in the Fed funds target rate was announced today. The target rate was lowered to a range between 3.50-3.75%. The Fed also announced that it will begin purchasing about $40 billion per month of short-dated Treasury bills starting December 12.

The announcement to purchase a significant amount of short-term Treasury securities every month might be more important than the interest rate reduction. Why is the Fed buying T-bills?

NEW YORK FED AND OMOs

The Trading Desk at the New York Federal Reserve is the operational unit that executes open market operations on behalf of the Fed — buying and selling securities via its primary dealers.

Open Market Operations (OMOs) include the purchase and sale of securities (mainly U.S. Treasury securities, agency debt, and agency MBS) in the open market by the Fed.

Per ChatGPT, OMOs “are the core mechanism by which the Fed adjusts the amount of reserves in the banking system to influence liquidity and interest rates.”

Another way to say it is that OMOs allow the Fed to “steer” the federal funds rate to its desired range and maintain adequate reserves/liquidity in the system.

REASONS FOR CONCERN

Ordinarily, the Fed lends (repurchase agreements, called repos) or borrows (reverse repos) cash temporarily, often on an overnight basis. These actions are short-term oriented and intended to help keep rates stable and maintain liquidity.

This works when reserves are reasonably ample, or abundant. If not, stronger measures a necessary.

The purchase of “shorter-term Treasury securities” is a stronger measure. In other words, today’s announcement is an indication that financial system liquidity is a big concern for the Fed.

The Fed policy of higher rates for longer has had material effects on the bond and money markets that threaten the structural integrity of the financial system. Hence, expect more aggressive actions by the Fed to contain the damage.

Liquidity issues in the overnight money markets are likely prompting the Fed to take this action. The action is similar to the Fed’s aggressive acquisition of long-dated securities in the bond market at the onset of the 2008 financial crisis, when credit markets imploded.

The purchase of Treasury bills is beginning as the Fed winds down its efforts to reduce the size of its balance sheet, which resulted from its 2008 accumulation. This time, the focus of accumulation is on short-term securities.

By purchasing T-bills in the open market, the Fed is injecting needed reserves/liquidity into the system.

That implies that system liquidity is the primary concern, and not just for the Fed, but for investors, businesses, and individuals.

(also see System Liquidity Risk and Liquidity Problems Could Overwhelm Inflation’s Effects )

Kelsey Williams is the author of two books: INFLATION, WHAT IT IS, WHAT IT ISN’T, AND WHO’S RESPONSIBLE FOR IT and ALL HAIL THE FED

 

More Downside For Gold And Silver?

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You can bet that most vocal proponents for spectacularly higher gold and silver prices will see Tuesday’s huge intra-day reversals as just another dip in price before the next jump to warp speed.

The longer and more severe the “correction”, the more frequent use of the phrase “temporary setback” can be expected. After all, the fundamentals demand higher prices, right? A day of reckoning is at hand.

The euphoria surrounding higher gold and silver prices seems to know no bounds. I remember how it was in 1980, as those of us in the trade at that time experienced a similar situation.

Notwithstanding the grim circumstances of double-digit interest rates (fed funds at 17.6% in April 1980), consumer prices averaging increases of almost 12% annually for three consecutive years, and enthusiastic calls for the “death of the dollar”, there was a pronounced peak to the price action in hard metals in January 1980.

In 2011, a government shutdown began on July 1st and lasted for twenty days. The gold and silver price peaks in 2011 came amidst similar sentiments regarding government debt, inflation, and the dollar.

Now, here in 2025, we can only wonder whether a similar situation is unfolding. If it is, it might be worth considering what happened after the peaks in 1980 and 2011.

GOLD AND SILVER AFTER PEAKS IN 1980, 2011

The price peak for gold in 1980 came on January 20th at $843 oz. Within a few days, gold was priced in the mid-$600s – a drop of almost $200. That might not sound like much, but it was a decline of more than 20%. A similar decline now would take the gold price below $3,500.

After a few more weeks, the gold price had broken the $500 level. In less than two months, gold had declined by more than 40%. Measuring from its recent intraday peak of $4,355, a similar drop at this time would take gold down to $2,600.

Silver fared worse. After peaking at close to $50 oz. on January 20th, 1980, silver’s price dropped by more than 30% in two short weeks. By February 3rd, silver was priced at $34.75. A similar decline at this time would take silver down to $37.80 by the end of next week.

Gold found temporary stability around $500, but silver continued to plummet, losing 76% in less than four months. Measuring from its recent peak of $54 oz, a similar drop now would take silver down to $13 oz.

Prices for gold and silver declined in nominal and real terms over the next two decades, reaching respective lows of $260 for gold and $4 for silver. The cumulative declines totaled 70% for gold and 92% for silver.

The gold price decline after its 2011 peak amounted to 45 % and the silver price decline was approximately 80%. Similar declines at this time could take gold as low as $2400 and silver as low as $11.

MORE DOWNSIDE FOR GOLD AND SILVER?

Quite possibly, yes, especially when considering what has happened in the past. The specific conditions are not necessarily the same, but they are similar. Also, there are other factors that are more important as to whether gold and silver continue to decline, how quickly, and by how much.

Liquidity concerns and deflation are the bigger forces at work that could stop in a heartbeat the relentless march of inflation-fueled higher asset prices (see No Winners When The Inflation Balloon Pops). As far as gold and silver are concerned, their price increases have outrun the fundamentals for now.

That does not mean they cannot go higher at this point. They could. You might not want to bet against that possibility, but you would be foolish not to be prepared for some sizeable declines. (also see The Case For Gold Has Nothing To Do With Its Price)

Kelsey Williams is the author of two books: INFLATION, WHAT IT IS, WHAT IT ISN’T, AND WHO’S RESPONSIBLE FOR IT and ALL HAIL THE FED