As we take a moment to reflect on the year that was, 2024 held several monumental firsts and revelations whose impact may span decades. Here are the top 10 key highlights of the year: 

1. The Return of Donald Trump

The most impactful story of 2024 may be the return of Donald Trump to the White House. His pledged changes to U.S. policy included:

• Deploying the U.S. military to address illegal immigration.
• Reintroducing Christian prayer in public schools and spaces.
• Abolishing significant government bureaucracy, including the Federal Reserve.

The year saw record speculation among investors, characterized by:

• Record leverage and concentration in the stock market fueled by public enthusiasm for artificial intelligence (AI).
• Admissions from tech executives that AI often lacks a clear path to profitability, even as billions are spent to stay competitive.

AI executives sold billions in personal stocks, notably NVDA, whose leadership divested nearly $1 billion in shares. Meanwhile, Bitcoin more than doubled in value as many American investors accepted its status as a currency, despite its speculative nature.

3. Gold: The Unchanging Winner

While gold gains didn’t dominate headlines, the metal solidified its status as a wealth preserver and central banks’ cornerstone asset. Key developments:

• Gold surpassed $2,000/oz. and has risen over 7,000% against the dollar since the dollar’s decoupling from the gold standard.
• The dollar’s 90% loss of purchasing power since 1971 highlights the importance of diversifying with gold.

Optimal Gold Allocations

In 2024, the optimal portfolio allocation to gold rose:

• Historically 15% since the Great Depression
• Increased to 20% post-1971
• Now approximately 25% as gold has appreciated by nearly 10% annually since 2000

Virtually no financial advisors realize the power that physical gold has displayed in protecting wealth and the strength of its returns relative to risk assets such as stocks, bonds and real estate over time. During 2024, one trading firm that oversees billions in assets and is run by Ivy League PhD’s took us up on our challenge to prove our math wrong relating to the optimized allocation of gold within portfolios. These traders who are strikingly humble despite their massive financial success came back and admitted their math agreed with ours – and that Western financial advisors are doing a great disservice to families by not honestly communicating the benefits of physical gold. 4.

4. Risks of Ignoring Physical Gold

During the year, Bank of America admitted that its research showed over 70% of US financial advisors hold less than 1% allocations to physical gold for clients. A question we would pose to any advisors you respect is:

“How will you be able to defend your position of minimal to no gold allocations given that as a professional you knew about the percolating debt crisis, real estate crisis & overvaluation of equity markets in light of client goals to preserve wealth?”

History suggests these oversights may be career-ending mistakes for many in finance.

5. Cybersecurity Threats

2024 exposed the growing risks of financial systems:

• Major banks like American Bank, HSBC, and Citigroup suffered data breaches due to phishing, ransomware, and misconfigurations.
• Other attacks included social engineering at Deutsche Bank and a recidivist strike on Capital One

These incidents highlight the growing risks of third-party vulnerabilities, ransomware, and cloud/mobile banking threats, with phishing and social engineering being primary tactics. The US Treasury even admitted it was compromised. These incidents underscore the importance of diversifying wealth outside the financial system.

6. Financial Vulnerabilities - Elder Fraud

Elder fraud continues to rise, with U.S. retirees losing over $28 billion annually. Insider threats, such as employees selling sensitive data, have compounded the issue, as seen in cases at TD Bank and Navy Federal Credit Union. Outsourcing and high turnover contribute to these vulnerabilities, as demonstrated by a Teleperformance call center fraud ring targeting elderly USAA customers

7. The Federal Reserve and U.S. Debt Crisis

Trump’s call to abolish the Fed may be linked to its role in the U.S. debt crisis. Key developments:

• A 50 basis-point rate cut before the election, perceived as politically motivated, was rejected by markets.
• Rising yields reflect investors’ concerns about unsustainable national debt

This may be the tipping point when a significant portion of Americans now accept it’s impossible to pay down America’s debts without impairing the value of the dollar. Even optimistic scenarios for Bitcoin holdings fail to address the $36 trillion debt:

• IF the US government continues to confiscate Bitcoin and doubles its reported holding of the crypto to 500,000 units AND
• Scenario 1: IF BTC goes to $1 million (more than 10x its current levels), THEN the value of America’s Bitcoin holdings will be $500 billion - NOT even moving the needle on our $36 trillion in debt. 
• Scenario 2: IF Bitcoin goes to $13 million per token as Michael Saylor has suggested, THEN the US government’s position would be worth $6.5 Trillion - significant but still NOT enough to solve America’s debt crisis today, let alone in 20 years when Saylor forecasts such an optimistic scenario.
• Notably, Saylor’s firm traded from $300/share to $10/share in nine months after accounting irregularities at his firm were made public

The reality of the dollar’s declining strategic footing became apparent, as acknowledged by the Former CEO of multi trillion-dollar bond manager PIMCO stating that the dollar is “losing its strategic footing”.

8. Stagflation and Market Top

America’s ballooning debt (adding approximately $1 trillion every days to our national balance sheet) and inflation have led to stark predictions:

• Vanguard forecasts 2-4% annual market returns through 2054
• Tragically, amateur investors expectations have never been higher since data began measuring this outlook in 2017 

Instead of Americans rotating to assets that benefit from inflation, record amounts flowed into fixed-income investments, arguably the worst move at the worst time and again typical for behaviors seen in past market euphoria.

9. Central Banks and the Future of Gold

Central banks aggressively allocated to physical gold (central banks are NOT investors in financial or paper gold), even announcing 25% allocation targets inline with our math for optimized portfolios. Notable trends included covert purchases by major central banks, including China and Saudi Arabia, so as not to tip off the markets as to how critical gold is to the future of finance1

10. Silver: Gold’s Inseparable Partner

Silver’s unique properties make it an essential companion to gold:

• Used for lower-value transactions and industrial applications.
• Exhibits a cup-and-handle chart formation, suggesting strong future potential.
• The only real asset still trading below its 1980 inflation-adjusted peak.

History may recognize silver as the most mispriced asset in terms of risk and reward.

Looking Ahead to 2025

Reach out to us - we welcome delving into diversifying and protecting your wealth and retirement accounts with physical gold and silver. Our team welcomes discussions with you and your financial advisors about the imperative role of these assets in safeguarding your family’s future. Call us today at 610-326-2000. 

God bless and Happy New Year!

The St. Joseph Partners Team