February 4, 2026
WHY WOULD YOU BUY CRYPTOCURRENCIES!!!??? (That’s Another Rhetorical Question)
Why would you buy bitcoin or any other cryptocurrency? A better question is: How much is bitcoin worth? In early October, bitcoin was trading at $126,000. Over the weekend, bitcoin had fallen below $76,000, trading around $78,000 on Monday, a 38% decline from the early-October peak.
So, like I asked in Monday’s article on the “worth” of gold [Why Would You Buy Gold!!!???], I ask again – how much is bitcoin worth? It’s not $126,000 or $78,000 – those are bitcoin’s prices. The answer is: I don’t know, you don’t know, no one knows! You cannot determine how much bitcoin is worth. It all has to do with a concept known as intrinsic value. According to Investopedia, “Intrinsic Value is a measure of what an asset is worth that is arrived at by means of an objective calculation or complex financial model, rather than using the currently trading market price of that asset.” Such calculations and financial models often use cash flows in the calculations. But gold, silver, cryptocurrencies, and other non-financial assets don’t have cash flows. Accordingly, you can’t calculate an intrinsic value, or “worth”, of the asset. And when you can’t calculate its worth, or intrinsic value, you don’t know if the price you’re are paying for the asset is too much (overvalued), too little (undervalued), or just right (a fair price). Without the ability to make this determination, you are just speculating on the purchase. Will it go up, down, or stay the same? You have no reasonable basis to make that judgement. For an excellent primer on intrinsic value, see Berkshire Hathaway, Inc. – An Owner’s Manual.
What will cryptocurrencies close at today, or next week, or next year? The truthful answer: I have no idea! That’s why I’m investing in stocks and other assets where I can determine an intrinsic value.
February 2, 2026
Why Would You Buy Gold!!!??? (That’s A Rhetorical Question)
Why would you buy gold? A better question is: How much is gold worth? On Thursday, you might have said $5,318.40 a troy ounce. On Friday, you might have said $4,713.90 a troy ounce, an 11.37% DROP in price from Thursday to Friday. That was the largest one-day dollar decline in the price of gold since January 1980. By the way, silver prices declined 31% on Friday (their biggest decline since March 1980).
So, I ask again – how much is gold worth? It’s not $5,318.40 or $4,713.90 – those are gold’s prices. The answer is: I don’t know, you don’t know, no one knows! You cannot determine how much gold is worth. It all has to do with a concept known as intrinsic value. According to Investopedia, “Intrinsic Value is a measure of what an asset is worth that is arrived at by means of an objective calculation or complex financial model, rather than using the currently trading market price of that asset.” Such calculations and financial models often use cash flows in the calculations. But gold, silver, and other non-financial assets don’t have cash flows. Accordingly, you can’t calculate an intrinsic value, or “worth”, of the asset. And when you can’t calculate its worth, or intrinsic value, you don’t know if the price you’re are paying for the asset is too much (overvalued), too little (undervalued), or just right (a fair price). Without the ability to make this determination, you are just speculating on the purchase. Will it go up, down, or stay the same? You have no reasonable basis to make that judgement.
How has gold performed as an investment over time. According to Jeremy Siegel, a renowned economist and Professor Emeritus of Finance at the Wharton School of the University of Pennsylvania: “Despite outpacing inflation, the yellow metal offers little additional returns. Whatever hedging property gold possesses, its long-term returns fall far behind stocks and will likely exert a considerable drag on the return of a long-term investor’s portfolio” [Siegel, Jeremy (2023). Stocks for the Long Run, 6th ed. P27]. Siegel has some very interesting charts and discussion on this topic in his book, Stocks for the Long Run.
Why did the price of gold increase to over $5,000 in recent weeks? According to the Wall Street Journal (1-22-26), there are five reasons: (1) debasement trade; (2) lower interest rates; (3) central-bank buying; (4) expensive stocks; and (5) momentum. Why did gold crash to $4,713.90 on Friday? According to the Wall Street Journal (1-31-26/2-1-26), it was due to the U.S. dollar posting a strong recovery in price after Trump confirmed Kevin Warsh as his pick to lead the Federal Reserve; and profit-taking by Wall Street traders. One analyst commented, according to the Wall Street Journal article: “The short answer is I have no idea. Nobody knows.” This last comment highlights the extremely tenuous nature of predicting, analyzing, and commenting on asset prices that are based on after-the-fact analysis and sheer speculation, not some objective measure like intrinsic value. What will gold close at today, or next week, or next year? The truthful answer: I have no idea! That’s why I’m investing in stocks and other assets where I can determine an intrinsic value.
A final question is this: should you buy gold? You have to make that determination for yourself. But, consider these two things: (1) you cannot determine an intrinsic value for gold to help judge whether the price of gold is undervalued, overvalued, or fairly priced; and (2) gold’s investment performance has lagged that of stocks over time.
December 4, 2025
11 VARIABLES THAT CAN HELP LEADERS UNDERSTAND HOW THE ECONOMY IS DOING
I posted a new article yesterday in my Forbes column on a simple economic forecasting model that I developed and have been using successfully for over 20 years in my own firms.
Making sound business and investment decisions requires that business leaders and investors need to have an understanding of how the economy is doing. The same goes for economists making economic forecasts. These groups and others can benefit from a simple economic forecasting model. I developed a simple model I call the 11 Factor Economic Forecasting Model for just this purpose. Click here to read about this model.
November 24, 2025
ECONOMIC FORECASTERS PREDICT SLIGHTLY HIGHER GROWTH IN 2025 AND 2026 (Release Date: November 17, 2025)
The outlook for growth in the U.S. economy looks marginally better now than it did three months ago, according to 33 forecasters surveyed by the Federal Reserve Bank of Philadelphia. On an annual-average over annual-average basis, the forecasters expect real GDP to grow at an annual rate of 1.9 percent in 2025 and 1.8 percent in 2026. These annual projections are 0.2 percentage point higher than the estimates in the survey of three months ago. The growth projections for 2027 and 2028 of 2.1 percent and 1.8 percent, respectively, remain unchanged compared with those in the survey of three months ago.
The projections for the unemployment rate are nearly unchanged from those of the previous survey. Like the previous survey, the unemployment rate is projected to be an annual average of 4.2 percent in 2025 and 4.5 percent in 2026 before falling to 4.4 percent in 2027, and 4.3 percent in 2028.
On the employment front, the forecasters predict job gains in the current quarter at a rate of 30,800 per month. The employment projections for both the current quarter and the following three quarters show downward revisions from those in the survey of three months ago. The projections for the annual-average level of nonfarm payroll employment suggest job gains at a monthly rate of 125,100 in 2025 and 55,200 in 2026, down from the previous estimates of 132,800 in 2025 and 86,200 in 2026. (These annual-average projections are computed as the year-to-year change in the annual-average level of nonfarm payroll employment, converted to a monthly rate.
Please click here to see the complete forecast from the Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters.
November 5, 2025
SPOTLIGHT ON THE ECONOMY
U.S. Debt Hits Record Levels
U.S. debt hit $38 trillion recently, the first time in history. By contrast, U.S. debt was just $18.1 trillion ten years ago. The debt has been growing at an alarming rate – $500 billion was added in just October alone, which equates to $23 billion per day or $114,000 per American. It is estimated that the total national debt has grown by $69,713.82 per second for the past year. Total U.S. debt (federal, household, and corporate debt) is nearing $100 trillion. The total debt now equals 324% of GDP, with federal debt at $37.5 trillion, household debt at $20.5 trillion, and corporate debt at $42 trillion. Interest payments to service the national debt now consume $1.21 trillion annually—about 17% of the federal budget in fiscal year 2025
Economists focus on the debt-to-GDP ratio to measure fiscal sustainability. Currently about 125%, this figure is projected by the Congressional Budget Office (CBO) to climb to 156% by 2055. This trend warns that government spending outpaces economic growth drastically.
The growing debt burden threatens the economy through higher inflation, rising borrowing costs for mortgages and cars, lowered business investments, and increased goods prices.
The Trump administration says its policies are helping to slow government spending and will shrink the nation’s massive deficit. Treasury Secretary Scott Bessent reported a $468 billion cumulative deficit from April-September 2025, the lowest since 2019.
So, Who Are the Lenders of All of This Debt?
Who lends to the federal government?
The U.S. federal government borrows money by issuing Treasury securities to lenders, who provide funds in exchange for repayment with interest. The lenders are:
- Foreign governments and investors: A significant portion of U.S. debt is held by foreign countries like Japan and China, as well as their financial institutions.
- Domestic investors: This includes a wide range of U.S. entities and individuals, such as banks, mutual funds, pension funds, insurance companies, and individuals who buy Treasury bonds, notes, and bills.
- The Federal Reserve: The central bank holds a substantial amount of U.S. debt, having bought government securities to manage the money supply.
- Intragovernmental holdings: This category represents debt that one part of the government owes to another, such as the Social Security trust fund lending to the Treasury.
Who lends to corporations and individuals?
- Banks and financial institutions: These are the primary lenders for corporations and individuals seeking loans for mortgages, business expansion, or other financial needs.
- Government-sponsored enterprises (GSEs): Some government-sponsored entities also provide financing for individuals and businesses.
- Other investors: Various other entities, including insurance companies and even individuals, can act as lenders through different types of investments and loan products.
Please see the charts on the public debt levels in the Charts section of the Intrinsic Value Wealth Report Newsletter.
September 21, 2025
This Is The ONE Economist I Listen To When I Want To Understand What Is Really Happening In the Economy!
As a professional economist, I am continuously listening to and reading what other economists have to say about current economic conditions, both domestically and globally. And I usually pick up a few good insights from all of them. But when I want to really understand what is going on in the economy, this is the ONE economist I listen to most closely. Click here for this ONE economist’s recent assessment of economic conditions. Be sure to listen to the entire 51 minute presentation/discussion. You will come away with the most complete understanding that anyone has, in my opinion, of the current economy.