September 6, 2025 For our clients, we utilize a number of different strategies that may not at first glance correlate with our irrevocable trust consulting. However, our consulting firm uses the latest geopolitical and macroeconomic reports from a variety of sources to apolitically educate clients on the urgency (and risks) in creating irrevocable trusts. Indeed, if one were to make a prediction in 1999 about life in the United States (and the state of the world) in 2025, almost no forecaster would be correct. This is because even with basic assumptions about demographics, geopolitics, and economics, the occurrence of technological advancement as well as exogenous events—whether accidental or orchestrated— alter fundamental assumptions. The ability to ascribe degrees of certainty to specific future events, on the other hand, is much more realistic. To do this, one must look at capital, where it accumulates, and why it moves. Where money is reflects the values of a society. In this article, we draw attention to certain macro developments via the Federal Reserve over the past few years then to subject of the present day in order to exhibit the necessity of being prepared in a tumultuous and uncertain environment. The subject of trusts is not addressed here. Contrary to the textbook narrative where central banks dictate the money supply via interest rate settings, data often reveals reverse causality: interest rates adjust in response to monetary base growth, reflecting endogenous money creation driven by economic demand (or lack thereof) and banking activity. The inability of the Federal Reserve to stimulate the economy following the 2008 financial crisis primarily resulted from the concept of Quantitative Easing itself, which Ben Bernanke outlines in his work 21st Century Monetary Policy. Despite the face-melting increase of the balance sheet of all central banks (and zero rates), it merely put a floor under asset prices by stopping a contagion. Money was created but kept primarily as collateral in the banking system More recently, the 2020 monetary response provides a stark illustration. The Fed slashed rates to near-zero and expanded the monetary base from $3.4 trillion in February 2020 to $7.5 trillion by April 2022—a staggering 120% increase in just over two years. This does not include the massive government fiscal stimulus in the form of PPP and helicopter money,. Inflation, however, didn’t spike immediately; CPI was 1.5% in mid-2020, and only approximately 18 months later did it spike, due to fiscal stimulus and confidence in the Fed “put.” There is an interest phenomenon that precedes these events. The so-called yield curve inversion—short-term rates surpassing long-term ones—occurs when the central bank’s policy rate (R) exceeds the natural rate of interest (r*), the equilibrium rate balancing savings and investment at full employment without excess inflation. This signals overly restrictive policy interest-rate policy, compressing growth expectations and foreshadowing recessions. A classic example is the 2006-2007 inversion preceding the Great Recession. r* estimates (Laubach-Williams model) hovered around 2-2.5% real (nominal ~4-4.5% with 2% inflation), but the Fed hiked its policy rate to 5.25% by mid-2006. 60 10-year Treasury yield dipped below the 3-month (spread -0.5%), inverting for over a year; recession hit in December 2007, 18 months later. In 2019, another inversion occurred. r* had fallen to ~0.5% real (nominal ~2.5%) post-crisis, yet the Fed’s rate reached 2.25-2.50% amid hikes. The curve inverted (10-year minus 2-year spread -0.3%), signaling the 2020 downturn, which struck within 12 months. The 2022-2023 episode was profound. With r* estimated at 0.5-1% real (nominal 2.5-3%), the Fed pushed rates to 5.25-5.50% to fight inflation. Inversion deepened (spread -1.1% at peak), lasting over two years, the longest ever. This brings us to the present time, in which recession, though not officially recognized, is certainly manifest. August’s job report saw 22,000 jobs created, remarkably weak, and almost certain to be downwardly revised. “[The July jobs report saw] 73,000 payrolls…created, which was weaker than the consensus estimate of 104,000. Much more important, though, was the heavy revision to the prior two months. May's job gains were revised down from 144,000 to 19,000; June's gains were revised down from 147,000 to 14,000 (no, those are not typos).” (https://www.schwab.com/learn/story/lost-ones-job-revisions-send-chill) This exhibits the accuracy of the yield curve predicting monetary policy mistakes that either will create or exacerbate future economic downturns, which we are currently in, despite the lack of confirmation of *official* statistics. Thus, earlier in this article, we stress the importance of looking at leading economic indicators and understanding the theory behind them. We turn now to the price of gold, which has blasted through a 50+ year cup and handle in early 2024 and in recent weeks has perplexed many investors by exploding higher. If yield curve inversions signal recession, what does the price of gold signal? Contrast the price of gold in 2020 with the hysterical chaos. Indeed, gold moved only about $200 above the 2011 high before falling to lower levels in a consolidation. Now, daily price moves of $50-$100 are common. The narrative behind gold was clear during 2020 as well as in the wayward period post-financial crisis. What is the narrative now? At Dynasty Trust Consulting, we are warning our clients about the implications of a rising gold price WITHOUT a narrative. Currently, the $25T market is experiencing aggressive price action with marginally larger open interest, atypical from what would be expected. Gold moves not based on inflation expectations. It moves on confidence in currency and geopolitical risk. Sudden movements indicate incredible fear. We believe this fear is predicated on an impending geopolitical event, in which individuals are more concerned now about allocating in some form to gold than the price they are willing to pay for it, which is indicative of much more serious systemic issues that we may not have faced in our lifetimes. This is not intended to be financial advice. Please consult with a certified professional.