It’s Happening: Confidence in Fiat Currencies Is Collapsing

Key Insights:

• Gold and silver are now up more than 4x the S&P 500 in 2025 during one of equities’ strongest bull runs ever.
• When risk assets and safe-haven assets are at all-time highs, confidence in fiat currencies is eroding.
• As trust in central banks is dwindling and deficit spending is rising, it’s time to stock up on hard assets like Bitcoin.

Take a good look at the markets in 2025, and you’ll see a chart that, just a few years ago, would have seemed impossible. With risk assets like tech stocks and crypto, and safe havens like silver and gold all marking all-time highs, confidence in fiat currencies is collapsing in real-time.

The S&P 500 is charging through one of its strongest bull runs ever, with AI stocks and tech juggernauts setting new records week after week. And yet, in one of the most unlikely financial twists of the modern era, gold and silver are trouncing equities by a factor of four to one, turning centuries-old conversations about “flight to safety” on their head.

When Everything Rises, What Does It Mean?

Let’s break down the numbers. In 2025, gold is up nearly 50% year to date, and silver has doubled. The S&P 500, despite all-time highs and near-euphoric sentiment, has delivered a solid but comparatively modest 15%.

To see gold and silver outperforming stocks is unusual in any year. To see this during a roaring bull market in equities is downright extraordinary. The hard question, as pointed out by the widely followed Kobeissi Letter: what are gold and silver really telling us?

The plain truth is this: when both risk assets (like stocks and crypto) and safe havens (like gold and silver) surge together, the market is voting with its wallet. In this case, that vote is a resounding lack of confidence in fiat currencies.

People aren’t just hedging. They’re actively searching for lifeboats because the value of the dollars, euros, yen, and other fiat currencies they own is increasingly in question.

Confidence Crisis: The Central Banks’ Trust Problem

Beneath the surface of the record rally, the real story is trust (or a lack thereof). After years of quantitative easing, COVID-era fiscal stimulus, debt-ceiling drama, and rate cuts to keep the economy humming through stagflation, trust in central banks is running on fumes.

Recent warnings from heavyweight institutions make for sobering reading. The International Monetary Fund stated this week that erosion of trust in central banks can jack up inflation expectations.

Their logic is simple: economic stability relies on the belief that central banks will protect fiat currencies’ purchasing power. If that confidence cracks, inflation expectations surge, and once the dam breaks, it’s hard to repair.

For a generation raised on the dictum “don’t fight the Fed,” this is a sea change. But the stats don’t lie. Gold at all-time highs. Silver clearing levels not seen in more than a decade. And US deficit spending hitting new records, fueling forecasts of more money printing to prop up whichever political or technological cause sits atop the national priority list.

Why Hard Assets Win Over Failing Fiat Currencies

None of this is lost on seasoned investors. Legendary macro analyst Luke Gromen commented:

“File under “Things central bankers should’ve thought harder about before making funding ill-advised wars and bailouts for fraud a core central bank line of business since the year 2000.”

The Kobeissi Letter put it more bluntly:

What’s behind the numbers? The calculus is as much about future risk as present reward. With AI spending set to skyrocket, and a new arms race brewing over who will wield the most powerful algorithms, US policymakers are signaling that higher deficits, more borrowing, and more monetary stimulus are simply the cost of progress. The rally in gold and silver is a rational response to a world where promises can be printed, but scarcity cannot.

That’s why it’s not just precious metals drawing attention. Bitcoin, long described as “digital gold,” is seeing renewed advocacy. It serves as both a hedge against monetary disorder and a call option on a new financial regime. As gold and silver force their way back into the financial mainstream, Bitcoin’s case as a “hard asset” grows ever harder to ignore.

The Simple Truth: When Trust Breaks, Scarcity Matters

If there’s a takeaway from this extraordinary market alignment, it’s that hard assets matter most when trust dies fastest. Gold and silver’s historic climb, eclipsing tech and AI stocks in the middle of a euphoric bull market, isn’t just a quirk of the charts. It’s a sign that the fiat currencies in your pocket are increasingly on trial, and the world is watching the verdict.

Perhaps it’s time to look at your own allocations. When both Wall Street and Main Street reach for the same lifeboats, the message is clear. The collapse of confidence in fiat currencies isn’t some distant storm. It’s happening now, and the market is already responding accordingly.