Dear Partners and Prospective Investors,
As we continue to build from last week’s discussion, one reality has become increasingly difficult to ignore: the global economy and financial markets feel deeply out of sync. This disconnect is not anecdotal—it is measurable—and it is shaping both investor behavior and everyday decision-making in ways that create risk for those without a disciplined framework.
Market participants are repeatedly told that inflation is declining and that price pressures are easing. Yet the lived experience for households tells a different story. Since 2020, cumulative consumer price inflation in the United States has exceeded 20%, while wages have failed to fully keep pace in real terms. Food prices remain meaningfully higher than pre-pandemic levels, with grocery costs still up more than 25% from 2019. Housing affordability remains strained, as shelter costs continue to represent the single largest contributor to inflation measures, and insurance, healthcare, and services show little sign of meaningful deflation.
At the same time, financial asset prices remain elevated. U.S. equity indices are trading near all-time highs, valuation multiples remain stretched by historical standards, and a disproportionate share of returns continues to be driven by a narrow group of large-cap names. This coexistence—rising costs of living alongside elevated asset prices—creates confusion for everyday investors and consumers alike. Purchasing power feels constrained, yet markets signal prosperity. These opposing signals erode confidence and encourage emotional decision-making.
Compounding this tension is the continued weakening of the U.S. dollar following shifts in monetary policy and interest-rate expectations. A softer dollar may provide relief to financial markets and government balance sheets, but it often translates into higher import costs and sustained price pressure for consumers. In practical terms, this means that even as inflation metrics suggest moderation, the cost of living remains elevated, reinforcing the perception that economic stability is more fragile than headlines suggest.
This divergence between reported progress and lived reality is one of the defining characteristics of the current environment—and it is precisely the type of backdrop in which disciplined investment processes matter most.
Markets since the Federal Reserve’s recent rate cut have reflected this underlying conflict rather than resolved it. Equity indices remain range-bound, but internal conditions have continued to weaken. Market breadth has deteriorated, leadership remains narrow, and volatility—while not extreme—has remained persistently above levels associated with stable uptrends. Bond markets echo this uncertainty, with Treasury yields moving in both directions without establishing durable trends, signaling unresolved questions around growth, inflation persistence, and fiscal sustainability.
In contrast, currencies and commodities have behaved with greater transparency. These markets have responded more directly to monetary conditions, fiscal realities, and shifts in confidence—and that clarity has mattered.
The metals complex remains one of the strongest and most coherent areas of the global market landscape, with silver continuing to stand out as the leader. Momentum remains firm, structure intact, and follow-through consistent. The Nehemiah Fund remains fully positioned and fully scaled into silver, reflecting maximum conviction under its systematic framework. This positioning is not driven by narrative or fear, but by disciplined adherence to price behavior, trend confirmation, and risk management. Gold and copper continue to reinforce the broader metals trend, but silver’s leadership remains particularly telling. Historically, periods in which silver leads have often coincided with deeper shifts in monetary confidence rather than short-term speculation.
This strength in metals is unfolding against a historical backdrop that has repeated itself across centuries. In Ancient Rome, fiscal strain led to the debasement of the silver denarius, eroding confidence and driving wealth toward tangible assets. In Imperial Spain, massive inflows of precious metals expanded the money supply, fueling inflation and diminishing purchasing power despite apparent abundance. In each case, currency dilution preceded broader economic instability.
The modern expression of this pattern is more complex but no less familiar. The United States now carries over $34 trillion in federal debt, with annual deficits consistently exceeding $1.5–2 trillion. Servicing this debt at higher interest rates places growing strain on fiscal sustainability, increasing reliance on the Federal Reserve to provide liquidity through Treasury market support and accommodative policy. Lower interest rates ease refinancing pressure in the short term, but they do so by encouraging continued borrowing and expanding the money supply, which over time places downward pressure on currency purchasing power.
History reflects the outcome clearly. Following the breakdown of Bretton Woods in the 1970s, the U.S. dollar weakened materially and precious metals experienced a powerful repricing. After the Global Financial Crisis, central-bank balance-sheet expansion fueled strong advances in gold and silver. In 2012, continued monetary accommodation once again supported meaningful metals rallies. Across eras and systems, the sequence remains consistent: when governments rely on debt expansion and monetary accommodation, confidence in fiat currency weakens, and capital migrates toward assets with scarcity and independence from policy discretion.
This currency dynamic is also evident in foreign exchange markets today. The Nehemiah Fund remains fully positioned long both the euro-dollar and the British pound. These trends have emerged as the U.S. dollar softens under the weight of fiscal pressure and shifting rate expectations. Price action in both EUR/USD and GBP/USD continues to reflect sustained momentum and structural integrity, reinforcing the broader theme of capital repositioning away from dollar concentration.
By contrast, cryptocurrency markets continue to show a lack of progression. Despite periodic volatility, price action remains range-bound and structurally weak. Momentum has failed to rebuild, trends have not reasserted themselves, and conviction remains elusive. The Nehemiah Fund remains fully out of crypto, reflecting discipline rather than dismissal. In environments where capital becomes more selective, markets without structure often underperform quietly before they do so visibly.
What differentiates Nehemiah in this environment is not any single position, but process. The Fund operates with a systematic, rules-based framework designed to remove emotion, identify durable trends, manage risk relentlessly, and remain patient when clarity is absent. In a world where everyday experience conflicts with official narratives, and where markets reflect tension rather than resolution, discipline is not conservative—it is essential.
As we move further into year-end, dispersion is likely to remain elevated. Some trends will extend. Others will fade. Broad exposure will continue to struggle to outperform selectivity. This phase rarely feels dramatic in real time, but it often proves decisive in hindsight.
Did you know that during the late 1970s, even as policymakers repeatedly assured the public that inflation was under control, consumer prices continued to rise and the dollar continued to weaken—while gold and silver delivered some of the strongest real returns in modern financial history?
The question worth asking is simple:
In a world where signals conflict and confidence is fragile, is your capital guided by reassurance—or by discipline?
Wishing everyone a happy and health holiday season.
Warm regards,
The Nehemiah Fund Team