Are Your Assets Truly Gaining Value?

Today’s Market Update

The precious metals market is witnessing a strong and steady surge. Both gold and silver are refusing to slow down, showing only small intraday or one-day corrections.

In contrast, the equity markets are dull and lacking excitement. Despite being close to all-time highs, there is no strong enthusiasm or fear among investors.

Today’s trading session saw a gap-up opening, a quick rise, a fall, and then a recovery from the lows. Being an expiry day, such volatility was expected.

• The Nifty ended the day with a small loss of 0.32%, while the Nifty Junior was down 0.5%.

• Mid-caps and Small-caps looked weaker with bearish engulfing candles, down 0.69% and 0.88% respectively.

• However, the Bank Nifty held firm and did not even break the previous day’s low, showing strength in banking stocks.

• Gold continued its upward journey, trading at around ₹24,900 per 10 grams, up 0.63% today. Since late August, gold has barely paused for more than a day or two, showing consistent strength for almost two months.

Other Market Triggers

• The Nifty heat map was full of red with most big names—SBI, Bajaj Finance, TCS, ITC, L&T, and JSW Steel—showing losses.

• The Nifty Next 50 also mirrored this trend with stocks like Havells, GAIL, Canara Bank, and Bank of Baroda losing ground.

• There were a few bright spots, though. MTAR Technologies surged 12.6% on news of a ₹15,000-crore Adani Defense order for the AMCA stealth fighter.

• CE Infosystems also jumped 9% after receiving public endorsement from a government minister.

U.S. Market Update

• In the U.S., markets bounced back strongly after a weak Friday. The S&P 500 rose 1.5%, Nasdaq gained 2.2%, and Russell 2000 jumped 2.79%.

• Major movers included Broadcom, up nearly 10%, Tesla up 5.4%, Qualcomm 5.3%, Oracle 5.1%, and ServiceNow 3.9%. Broadcom’s continuation rally, along with similar strength in Tesla and Oracle, showed renewed confidence in tech stocks.

What to watch next ?

• The rise in precious metals clearly points to a shift in the global monetary system and the world order.

• Most people may not yet realize the seriousness of this change as we live through it, much like a frog sitting on a slowly heating pan, unaware that the temperature is rising.

• The result season begins tomorrow, and perhaps the market is not expecting very strong earnings.

• For now, it feels like the market is waiting—watching global political developments unfold and letting time pass.

• The Nifty and Bank Nifty remain near record levels, signaling stability but not much momentum.

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What To Read This Week ?

The Debasement Trade: Are Your Assets Truly Gaining Value?

The Core Thesis: Monetary Expansion and The Debasement Trade

Popular financial analyst Luke Gromen has highlighted a critical economic phenomenon dubbed the "debasement trade." The central idea is that the rapid expansion of the monetary base is causing fiat currencies, like the US Dollar, to lose purchasing power at an alarming rate.

In this scenario, as more money is created to support the base, everything else must be priced higher in nominal terms. However, these nominal gains are merely an illusion of prosperity, masking a decline in real value when measured against genuinely scarce assets. This perspective suggests that holding cash is actively harmful to one’s wealth preservation goals.

The Illusion of Nominal Gains (Measured in USD)

When we look at asset performance since the start of the COVID era, the numbers in US Dollar terms appear highly impressive, suggesting a robust market rally.

In dollar terms, these gains represent substantial portfolio growth. But what happens when we change the ruler?

Gold: The First Scarcity Anchor

By shifting the valuation base from the US Dollar to Gold—an asset with a restricted mining supply (approx. 1.5% to 2% annual growth)—a starkly different picture emerges. Gold acts as a check against monetary printing, demonstrating that the perceived strength of stocks and housing is largely fiat-driven inflation.

Asset Performance Measured in Gold Terms (Since COVID):

• Nasdaq Index: Up 7% (The massive USD gain shrinks dramatically).

• S&P 500 Index: Down 18% (The S&P 500 has effectively lost value).

• Home Prices: Down 37% (Housing purchasing power has declined significantly).

Versus Gold, these major asset classes have largely stagnated or, in the case of S&P 500 and housing, seen their value reduced.

Bitcoin: The Ultimate Measure of Absolute Scarcity

The contrast becomes even more acute when assets are measured against Bitcoin, which possesses the strictest form of programmed scarcity and a completely fixed supply cap. Using a five-year measurement period, the comparison is severe. (see the image above)

Asset ClassPerformance (Measured in Bitcoin)

• Nasdaq Index - Down 78%

• S&P 500 Index- Down 84%

• Housing Prices- Down 87%

The data points to a massive rally in Bitcoin relative to nearly every other traditional asset, suggesting that assets with absolute, non-expandable supply are the ultimate beneficiaries of the "debasement trade."

The Scarcity Premium: A Call to Action

The overarching principle is that assets which cannot be printed out of thin air or easily replicated will continue to appreciate vigorously as an expanding money base chases a limited pool of goods.

Pointers on Scarce Assets:

• Financial: Gold, Bitcoin.

• Tangible: Limited-edition automobiles (e.g., handmade Ferrari), Fine Art, Aged Wine.

• Collectibles: Rolex watches, exclusive designer bags (e.g., Gucci).

The conclusion is clear: Do not keep your money in cash or uninvested in a bank. The debasement of the monetary base demands that capital be deployed into asset classes that will, at a minimum, preserve or increase their purchasing power against inflation and monetary expansion.

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