So how are global bull markets in stocks possible with record governmental and private debts around the world? The answer is booming artificial money creation necessitated by the deficits in all important countries and now developing nations.

Even Argentina, which seemed to have some excellent economic policies the past several years under Milei, is now in a currency crisis.

We believe it signals a panic worldwide effort to "reflate" in order to prevent a monetary meltdown. Debt can only be reduced by repayment, global debt defaults, or by reflating the economies with huge new money creation.

That latter way of course is the popular way out. It has the least adverse consequences for the people in power. By the time the resulting inflation goes parabolic, they will be retired and playing golf.

We believe that a major decision of the central banks around the world, including the Fed, was made in early April of this year to take that latter route. That is when the market plunges made a sharp turn to the upside.

Also remember that gold became a Tier 1 asset for U.S. banking regulations on July 1. That is when the latest rise in gold prices started.

Being a "Tier 1 asset" means that banks require no reserves to hold against because it theoretically has "zero risk." So says the BIS in Basel, the central bank of central banks, which makes many of the rules.

That makes GOLD a great asset for the banking system, much better than T-bonds.

The gold of the US Treasury has surpassed $1 trillion in value for the first time in history (that is a thousand times $1 billion).

Below is the chart of central bank holdings of GOLD versus holdings of US Treasuries debt (chart from WisdomTree). Notice how just this past September, central banks are holding a higher share of Gold (teal line) than U.S. Treasuries (black line). That's the first time this has happened in nearly 30 years.