MARKET PSYCHOLOGY:
On October 15, as gold was hitting a blow-off top, people in 🇦🇺 Australia were lining up for hours to buy it.
Today, after an 11% correction over the past couple of weeks, those lines have vanished, even though gold has already bounced 5% off the lows.
On Tuesday, it felt like the bottom had fallen out of Bitcoin as nearly all of 2025’s gains were erased.
BTC dropped below $100K for the first time since Trump bombed Iranian nuclear facilities back in June, when the world feared WWIII might break out.
That same day, New York City, the center of American capitalism, elected a Democratic Socialist as mayor in an unmistakable rebuke of the current economic order.
It reflects a deeper malaise across the country. The latest University of Michigan Consumer Sentiment Index came in at 50.3, the second-lowest reading in its 70-year history.
Peter Thiel summed it up in a new interview with The Free Press.
He said, “You can reduce 80% of culture wars to economics, and 80% of economics to real estate.
If you proletarianize the young, you shouldn’t be surprised when they become communist.”
In the 1960s, half of 30-year-olds were married and owned homes. Today, only 15% do.
Trump may act unfazed, but he is a sharp political operator who can sense when the tide is turning.
This week’s elections were resounding Democratic victories and a warning sign for next year’s midterms if the economy keeps sliding.
If Republicans get crushed in 2026, Trump becomes a lame-duck president, unable to secure the legacy he desperately wants.
Sensing that danger, Trump appears to be pivoting left on economics.
Over the weekend, the White House unleashed a barrage of populist “tweet bombs,” starting with the announcement of 50-year mortgages, complete with an image of Trump beside America’s most iconic leftist, FDR.
US Federal Housing Director William Pulte said the administration is “laser focused on ensuring the American Dream for young people and that can only happen on the level of homebuying.”
But rather than improve affordability, longer mortgages just increase leverage.
Today, the median U.S. home costs $500,000. At a 6% mortgage rate, you would pay $1 million in interest over 50 years, half a million more than a 30-year loan, just to make your monthly payment $365 lower.
The question is what people do with that extra $365 a month.
Most will spend it on food and entertainment while the added leverage in the system keeps home prices inflated.
However, you took that same $365 monthly savings and invested it:
In the S&P 500 compounding at 10%, you would have over $5 million after 50 years.
In Bitcoin compounding at 20%, you would have over $8 million after just 30 years.
Mathematically, it makes sense for those who know how to play the debt based system.
But for the average American a 50-year mortgage is just a means of doubling the amount of interest you owe to the bank.
And while people were still running the mortgage math, Trump poured more fuel on the fire Sunday by announcing on Truth Social his plan for a “tariff dividend” of at least $2,000 per person.
The last time Trump handed out stimulus checks in 2020, inflation exploded to multi-decade highs.
If you had invested that $1,200 check into Bitcoin in April 2020, it would be worth $19,000 today.
On this news of more leverage and fresh stimulus, Bitcoin jumped from $101K to $106K by Sunday night.
Trump seems ready to paper over the country’s affordability crisis with populist Left tactics and “run it hot” to put more money in the pockets of the younger generations and thus save the midterms.
But the math speaks for itself.
When they print dollars to “solve” problems, the smartest move is to put those dollars into something that can’t be debased, like Bitcoin.
