So…the shows over now? No More Geopolitical Tailwind?
Have a look at gold and silver over the last two months or so–it’s seen better days.
Does this therefore mean that the fears that drive buyers towards these metals are drying up? Does this mean that the Middle East is going to resolve it’s differences and end up in peace? Will trade tariffs and political blockades all clear up and resume commerce as though it was 2019? I have $1.5 Trillion reasons to suggest otherwise.
In case you missed it, a couple of months ago, the Trump Administration has applied with the Department of War for President Donald J. Trump’s Fiscal Year 2027 (FY27) Defense Budget, which asks for a generational investment of $1.5 trillion to unleash the American Arsenal of Freedom, marking a 42% increase over current funding levels.
“We are delivering on President Trump’s commitment to expand American military dominance for decades to come,” said Secretary of War Pete Hegseth. He continues saying that “Previous Administrations underinvested in our military while our enemies grew stronger and more dangerous, so we are now changing the game. This budget builds this arsenal without compromising readiness that will ensure we remain the world’s premier fighting force…”
I don’t mean to get political by highlighting these comments (either between government administrations or on a geopolitical basis), but the bottom line of this announcement is that–that’s a heck of a lot of money–and only increasing!
Hegseth continues, saying it will be for “Ensuring America’s Readiness”. “This budget will invest an additional $31.7B in Core Readiness and Readiness Enablers, over FY 2026 enacted levels for areas such as cyber security, ship operations, flying hours, and ground readiness. This budget also makes key investments…and accelerates the modernization of our nuclear arsenals to reinforce deterrence…”
Why would one apply for an increase in military spending to such a degree if we were headed towards more stable, secure economic times ahead? Ground readiness? For what exactly?
While news headlines are quick to suggest that gold and silver had their day in the sunshine as though they were an AI tech stock, SPAC or any
crypto coin with a silly name–all it takes is a moment to zoom out slightly and clearly see that we’re unfortunately headed towards a world with more chaos, conflict and volatility.
This volatility will generate a new class of speculators on one hand and the other hand will reiterate the need for wealth preservation, fast. This alone could be why family offices are considering major shifts to their portfolios.
As the saying goes, when the USA sneezes, the world catches a cold.
So let’s take advantage of this reality. Subscribe for guidance on how to do so and utilize Sea Lion Investment Office as your personal investment management.
