Welcome to the Crack Up Boom?

Finance U Public Finance U
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Originally published at: https://peakprosperity.com/welcome-to-the-crack-up-boom/

We’re at the tail-end of the most extreme interventions in central banking history. The Federal Reserve is less a steward of full employment and stable prices than it is a serial bubble blower.

We’ve been hopping from one bubble to the next with nary a chance to catch our breath. From stocks to houses to bonds and back to stocks.

Consider this list:

Remember, to drive a bubble you need two things; (1) a good story and (2) ample credit.

On that front, the other side of credit is money because money is created in our banking system when credit is extended. On that front, “M2” – the broadest definition of money we have (as “M3” was retired many years ago, sadly) exploded out to another new all-time high by somehow, magically piling on another $1.65 trillion in 2025.

Note that 2022 was a terrible, no-good year for both stocks and bonds, and that M2 actually shrank that year. These are related events, of course, and explain why the Fed really doesn’t give a hoot about stable prices and full employment; they care about ensuring that M2 is expanding constantly.

One of the “features” of the Fed constantly stuffing more and more money into the system is that the richest of the rich get even richer.

Since Covid the Fed has managed to make the top 0.1% of households (all 135,000 of them) an additional $11 trillion wealthier, while the bottom 50% of US households (67.5 million of them) only managed to get $2 trillion wealthier.

For a really solid description of this process, James Lavish explains it very well in his newsletter “The Informationist.”

(Source)

The reason the super wealthy get richer is that they get access to the money first.

Adding fuel to this raging bonfire of everything getting more expensive is the US government, which, having dropped DOGE like a hot potato, has managed to spend $602 billion more than it took in during just the first three months of FY 2026:

Where did all those billions actually come from? Inquiring minds would like to know…

Add it all up, and the evidence seems to point to the idea that we’re in the crack-up boom phase of the latest bubble, courtesy of the US Federal Reserve.

If so, get ready, you haven’t seen anything yet. Everything is about to get a lot more expensive before the bubble finally bursts.

Prediction: This will be the most destructive bubble burst in all of human history.

Timestamps

00:00 Introduction and Economic Overview
02:24 The Crack-Up Boom Phenomenon
06:04 Global Market Dynamics and Currency Concerns
10:46 The Role of Precious Metals in Investment
13:05 Consumer Stress and Economic Indicators
28:50 The Rise of Monopolies and Wealth Inequality
32:43 The Impact of COVID-19 on Small Businesses
35:27 The Detachment of the Wealthy from Reality
38:51 Navigating Economic Challenges with Courage
43:07 The Unsustainable Nature of Current Economic Policies
48:13 The Need for Transparency and Accountability in Governance
57:56 The Disparity of Wealth and Its Consequences
01:00:13 Intentional Economic Disparities
01:01:15 Navigating Financial Challenges
01:03:07 The Impending Economic Collapse
01:05:10 Inflationary Pressures and Government Spending
01:07:31 The Role of Precious Metals in Investment
01:10:23 Market Dynamics and Investor Behavior
01:12:46 The Importance of Diversification
01:14:30 Contrarian Investing Strategies
01:17:52 The Future of Energy Investments

FINANCIAL DISCLAIMER. PEAK PROSPERITY, LLC, AND PEAK FINANCIAL INVESTING ARE NOT ENGAGED IN RENDERING LEGAL, TAX, OR FINANCIAL ADVICE OR SERVICES VIA THIS WEBSITE. NEITHER PEAK PROSPERITY, LLC NOR PEAK FINANCIAL INVESTING ARE FINANCIAL PLANNERS, BROKERS, OR TAX ADVISORS. Their websites are intended only to assist you in your financial education. Your personal financial situation is unique, and any information and advice obtained through this website may not be appropriate for your situation. Accordingly, before making any final decisions or implementing any financial strategy, you should consider obtaining additional information and advice from your accountant or other financial advisers who are fully aware of your individual circumstances.

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Well, at least for now the Silver “bubble” is showing tremendous resilience at the “9” handle given the past history of price slams. Seems more like a generational repricing event than a bubble, or maybe it’s a “catch up bubble”.

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The timestamps are much appreciated.

I am STILL really missing the captions on Rumble. Sometimes PP videos are captioned, sometimes not. It is very inconsistent :smirking_face: I hate to rag on this, but captioning is an ongoing problem that I have brought up numerous times over the years. There is still no consistency here. It is frustrating… it will be much appreciated if the Peak Team ensures captioning is enabled on all platforms at the time of all video releases.

Thank you! :folded_hands:t2:
Jan

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I just came across a new video on the upcoming Great Reset. Nicely summarized I thought: (not sure if this has already been posted)

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Why are small businesses destroyed? By that Cantillon effect they are in tough position anyway… but various policies are made to push them over the edge.

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So just to clarify, are we getting close to the ‘ka’ phase of the ka-poom theory? In other words, as contrarian as it currently seems, should we be accumulating cash as dry powder for the bust phase that inevitably follows the credit expansion (before the central bank response induced high/hyperinflationary period). Or is this time different, and we skip straight to the inflation? I remember the last bust, i hoovered up a lot of cheap construction equipment. People were just giving it away and turning their backs on the industry, brutal to witness.

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Jim Richards has advocated for years for a “barbell strategy”. He means save and invest to respond to the deflation AND to respond to the huge inflationary period. I think we’ll still see the big deflationary scare followed quickly by the hyperinflationary explosion (and then collapse). I’m ready for both with “dry powder” on the sidelines for the deflation but precious metals for the hyperinflationary period. YMMV.

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I’m still adhering to the ka-poom theory (which is, deflationary scare and implosion first, followed by a muscular print-a-thon by the central banks, which is the “poom” phase).

But…full confession; I am lightening up on cash in favor of other things. That is, I am losing faith that the ‘authorities’ need the excuse of a ‘Ka’ to just do what everybody already knows they are going to do.

Printing has become normalized. So, there’s no political reason to need the 'Ka" to permit them to do what they want to do and will do anyway.

But…it’s always possible Japan or some other black swan comes along and makes the ‘Ka’ happen anyway, which is why I am not 100% out of cash.

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What’s role and comparison chart of dollars vs wealth/assets? I mean any time someone sells something, buyer has to have liquid dollars. If you are selling something that there are no liquid dollars available, cannot sell for that marked price. However very few sell events happen any time($$$ value vs total asset value) so it isnt tested almost ever.

Second thing, since 2008 printing has become normal, so is S&P500 simply corrupted measure as lot of printed money is simply poured there, almost given? Thus give money to something, of course you get activity there, close to communist China model to drive activity in economy this way(post dotcom but before 2008 chart looks normal that it also goes down at points).

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That’s the beauty of Gold - it actually performs really well in deflationary periods. Therefore, investing in Gold doesn’t require predicting what phase is next (“ka” or “poom”).

Probably because it’s a Tier 0 asset :wink::slightly_smiling_face:

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On the topic of people you know who dont heed any warnings then will show up at your door later when things go sideways, as you tried to warn them, i believe this to be a human nature phenomenon. So here is my anecdotal experience. I used to play pool and was relatively good. Was in different leagues as part of a team. Once per game you could give a teammate a coach. Lets say they ran 4 balls and had 4 left. You can see by the next ball they are chosing they are picking a sub optimal path. And will likely be stymied in 2 balls. So i politely ask if they want a coach. They politely decline. After making 2 balls finds themselves stymied. Then ask for a coach. My polite response, im sorry 2 balls ago i could have helped you, now you have exhausted your options for an out. I believe this holds true across many situations.

So look at the game of pool. Specifically 8 ball. (Which is not my preferred game). When you start the game you have 7 options to get to the 8 ball. As you make each ball your route to the 8 ball becomes more limited. Almost anyone can make the first ball. Maybe even 2nd or 3rd ball. Very few people who play pool have a plan to make all 8. They dont think that far ahead. Plus they just made 3 so shouldnt the next 3 be as easy? Our neighbors and friends have had energy in abundance. Just like when you first approach the table with all 7 balls. As energy or the economy tightens options go away. Not seeing the whole table is like not seeing all the possibilities of what can/will go wrong. They now have 4 balls left and what decision they make next may decide if they are part of the remnant.

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Good anecdote. You know the USMint quit selling silver Eagles online (I saw it coming end of Dec and snagged a few UNC w/ an airtite and cert just for old times sake). And the silver chart, it’s what everyone has been preaching since the last crash (~2011-ish, unrecoverable). This is the end of the line, if the current fiat can make it 3-5 more years…probably NOT. We’re just stocking up on things we use frequently, and I always wanted an uzi (Sig Sauer sub now). Some Wall Street Silver memes + my an Apollo 11 silver chart

JPMxi
JPMxi1608×1530 283 KB

MintRiddler
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Apollo11
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Oh, need to add popcorn to the list, and best of luck to everyone.

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Excellent parable.
The variety of attitudes/responses to the awareness of lost opportunity is the future.

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Question for those keeping score at home: what was the yield of the JGB-2 year back in 1991? And what is it today?

You can find the answer (assuming you can read csv files) at the following site:

Click on Historical Data (1974~)

jgb-yields
jgb-yields800×600 65.1 KB

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I’ve been buying silver in a large way since the 2008 crisis because I was shocked at how equities fell. It became very clear how manipulated silver was and I stopped stacking pretty much 10 years later, with just small occasional bullion and numismatic purchases. A year ago I lamented at what a poor investment silver was in light of the huge multiyear gold move. Plus silver was so bulky and challenging to store. Then what happened caught me totally by surprise. The Gold/Silver Ratio tracking back to 2001 had a straight line fit with a 0.0034 upward slope and was in the mid 80’s before the silver move. Now the ratio is about 50 and is perplexing. Has it temporarily overshot its trajectory? Who knows… But something that I came across a while ago may shed some perspective on the matter. In 1964 when the silver was due to be removed from US coins the Federal minimum wage was $1.25/hour. So that was 5 silver quarters and at that time could buy 5 gallons of gasoline, retail. Based on the latest silver price those 5 silver quarters are now worth $80. and will buy about 30 gallons of gasoline. Seems like silver has now overshot its trajectory based on its purchasing power.

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If you’re ready to start selling your stacks I’d be an interested buyer.

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So, shed no tiers for gold.

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Hahaha, no I’ll hang onto the silver now. But based on the price ratio, gold is now a buy.

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Me too
Will trade beef, lamb, chicken, goat, eggs, pecans, chestnuts, walnuts, firewood, hunting and fishing rights for PM’s

Naw , changed my mind, the anatolians might not agree.

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E. or W. of The Rockies? We have some of those, but not all here on the Western Slope. We’ve been following Chris ~17yrs. and others for 25 years (funny how 2001 kinda wakes you up and you ask yourself wtf), and preparing with routes, properties and diversifying, but don’t have a farm in the bread basket or fertile land in in the E. (as I know this site was/is mostly about).

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