27 reasons why gold is going higher, and the stock market is going lower

27 reasons why gold is going higher, and the stock market is going lower. Don Durrett - goldstockdata.com

1) Debt Bubble. This has led to fiscal dominance and a $2T deficit and $1T interest payments.

2) Fragile US Government bond market. Foreign buyers have dried up.

3) Geopolitics. The Ukraine and Iran wars have created global instability and uncertainty. The BRICS+ nations are creating an alternative to the SWIFT system for international payments.

4) Tariffs. These are essentially taxes paid by consumers and create headwinds for the economy.

5) Inflation. The cost-of-living impact from inflation has not subsided. Plus, tariffs and oil prices are currently pushing inflation higher. Gasoline, interest rates, and inflation are all stuck at high levels.

6) Overvalued Stock Market. With a forward PE around 22 and a Buffett Indicator over 200%, the stock market is due for a crash. Dave Collum thinks it is overvalued by 200% and that it will revert to its mean. 7) De-dollarization. Countries are swapping their dollar reserves for gold. Plus, we are seeing more trade in non-dollar currencies.

8) Employment. This clearly has weakened over the past 12 months. It now takes about 6-months to replace a job. Normally, that number is 3 months. New college graduates are having trouble finding a job.

9) Housing. The cost for a new or existing house is around $450K. Housing affordability is at historic levels. Inventory levels are rising rapidly, and a crisis is emerging. March’s existing housing sales were the second-lowest on record for March. Only March of 2009 were lower.

10) Autos-Trucks. At current interest rates, the average auto loan is around 8%. The combination of tariffs and high interest rates makes autos and trucks unaffordable.

11) ISM Data. The ISM data for manufacturing and services has been weak for years. It does not appear to be improving.

12) Office Vacancies. Since COVID, the vacancy rate for commercial real estate has been at crisis levels and does not appear to be improving.

13) Banks. The balance sheets of large banks have been a mess after interest rates rose. Delinquency rates for credit cards and commercial real estate are rising. Bankruptcies are rising.

14) Private Credit. This is a potential crisis, with several bankruptcies and gated funds.

15) AI. It has been a job killer. Wal-Mart announced it would soon be reducing jobs due to AI efficiencies. Law firms no longer need as many lawyers. That’s just one example.

16) Demographics. Baby boomers are retiring in droves each month. This reduces consumer spending and taxable income.

17) Healthcare Costs. The current inflation rate for healthcare is 8%. This is squeezing discretionary spending.

18) Political Bifurcation. Washington has become ineffective with ongoing gridlock. Both parties no longer hold the same values. This is only getting worse.

19) College Costs. Like housing, it has an affordability problem. Colleges have become extremely expensive.

20) GDP Slowing. GDP for Q1 is projected to be sub 2%. Ironically, government spending is counted as GDP when $2T is borrowed. If you subtract this $2T, then we are in a recession.

21) Retail/Restaurant Sales. K-shaped economy. We continue to see national chains go bankrupt as the consumer remains constrained. Which company goes bankrupt next?

22) Consumer Confidence. The UOM (University of Michigan) consumer confidence number is currently at an all-time low. Why? Because the consumer can’t pay its bills.

23) Trains/Trucking Volume. The volume is at recessionary levels for both.

24) Apartment Rent. Rents are dropping nationally. Why? Consumers are broke.

25) A Recession is overdue. The last recession ended in Q2 2009. Some say we had a recession in 2020, but that was the COVID crisis and was not a true recession, where you have an extended period of lost jobs and a moribund stock market.

26) Low Dividend Payout. The average is currently below 2% and half the historical norm. The MAG7 average .3%.

27) Gold Exports. The US has been exporting an average of $10B in gold every month since January 2025. This is unprecedented. Why is gold moving from the West to the East? One reason: the rest of the world is selling their US bonds and dollars and buying gold. This is effectively de-dollarization, and it’s picking up speed.

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