In this episode of the Money Metals Midweek Memo, host Mike Maharrey draws an analogy from professional hockey to explain one of the most important principles in investing: having a process and sticking to it. Using the recent recognition of Tampa Bay Lightning coach John Cooper as the NHL's Jack Adams Award winner, Maharrey argues that successful investing, like successful coaching, requires discipline, patience, and a commitment to a proven recipe—even when circumstances become difficult.
Maharrey contends that investors are too often driven by headlines, market volatility, and emotional reactions. Instead, they should establish a long-term framework rooted in their economic outlook and avoid making wholesale changes every time markets fluctuate.
The Importance of Process Over Emotion
Maharrey referenced a recent interview with Axel Merk, who emphasized that investors need a process above all else. Merk argued that even an imperfect process is better than having no process because it prevents investors from constantly shifting strategies in response to daily news cycles.
For Maharrey, that process centers on holding gold and silver as long-term stores of value. While he acknowledges that precious metals prices can experience sharp short-term swings—including gold's recent $150 one-day decline—he maintains that temporary volatility does not alter the long-term reality of currency debasement and inflation.
He stressed that investors should make adjustments to their strategies only when structural economic changes warrant it, not in response to every geopolitical headline or market correction. A disciplined process, he argued, helps remove destructive emotional decision-making from investing.
Maharrey also highlighted Money Metals' monthly installment program, noting that investors can begin building a precious metals position with as little as $100 per month, allowing them to accumulate gold and silver gradually over time.
Inflation Remains the Central Economic Threat
Turning to the broader economy, Maharrey reiterated a theme familiar to regular listeners: inflation remains the primary reason he owns gold and silver. He argued that inflation is not an accidental byproduct of policy but rather an intentional objective, noting that central bankers explicitly target 2% annual inflation. At that pace, the purchasing power of the dollar declines by roughly 10% every five years.
According to Maharrey, policymakers are more interested in managing public perception of inflation than eliminating it entirely. He contends that official statistics often understate the economic pain experienced by consumers, even as household budgets remain strained, consumer confidence remains weak, and Americans struggle under rising debt burdens.
He pointed to growing use of "buy now, pay later" financing for essentials such as groceries and gasoline as evidence of mounting financial stress among consumers. Despite these realities, official economic reports continue to paint a comparatively optimistic picture.
A New AI-Powered “Reality Index” Challenges Official Inflation Data
A major focus of the episode was a new analytical tool known as the Reality Index, which uses artificial intelligence to evaluate raw price data without many of the adjustments built into official government inflation measures. Maharrey discussed findings from Brownstone Institute President Jeffrey Tucker, who used the index to reassess the economic impact of pandemic lockdown policies.
According to Tucker's analysis, the economic damage caused by the lockdown era was significantly worse than official data suggests. The study estimates that the economy has lost approximately 12% of GDP since the pandemic period began and that the purchasing power of the U.S. dollar has been effectively cut in half.
Official government data indicates prices have risen roughly 26% since the lockdowns. However, the Reality Index paints a much more severe picture. By stripping away hedonic adjustments and other statistical modifications, the index attempts to track actual consumer prices more directly.
The methodology was developed by Tom Elliott, described by Tucker as an independent researcher based in Madrid who employed AI tools to reconstruct historical price indexes using Bureau of Labor Statistics data.
The resulting figures were striking. Tucker reported that a basket of goods costing $100 in 1980 would cost approximately $515 in 2025 according to the Reality Index, compared with just $391 under the official Consumer Price Index. Over a 45-year period, real prices increased 32% more than government figures suggest. Over 55 years, the Reality Index rose 54.4% faster than CPI.
Reassessing the Pandemic Economy
The most dramatic findings emerged when Tucker examined the post-pandemic period. According to the Reality Index, purchasing power has declined by roughly 50% since 2019, nearly double the inflation implied by official government statistics.
Even more significantly, Tucker found that inflation never truly subsided. While official CPI data showed inflation peaking in 2022 before declining sharply, the Reality Index suggests inflationary pressures never dropped below 6% annually.
Maharrey argued that these findings help explain the persistent disconnect between government reports and public sentiment. Consumers continue to report financial hardship because, according to this alternative analysis, their economic experiences are far closer to reality than official inflation measures indicate.
Using Reality Index data within GDP calculations, Tucker concluded that the economic downturn triggered in 2020 may never have truly ended. He described the situation as a "recession without end," estimating cumulative GDP losses of between 5% and 12% from 2019 to the present. Tucker noted that such losses amount to roughly half the economic decline experienced during the Great Depression.
While acknowledging that researchers may debate the methodology, Maharrey argued that the alternative data aligns more closely with what ordinary Americans are experiencing in their daily lives.
The Federal Reserve’s Catch-22
Maharrey then returned to another recurring theme: the Federal Reserve's increasingly difficult policy dilemma. He cited comments from Ryan McIntyre, President of Sprott Inc., who recently told Kitco News that the Fed is effectively "walking a tightrope."
According to Maharrey, the central bank faces two conflicting objectives. On one hand, it must keep interest rates elevated to combat inflation. On the other, it must avoid crushing an economy burdened by what he repeatedly calls a "debt black hole." Higher rates may restrain inflation, but they also increase pressure on governments, businesses, and consumers carrying massive debt loads.
McIntyre described the situation as precarious, arguing that policymakers have very little room for error. He estimated it is essentially a coin flip whether the Fed raises rates again before year-end. Nevertheless, he believes any pressure on gold from higher interest rates will be temporary because the larger threat remains sovereign debt.
Maharrey agreed, arguing that debt remains the most underappreciated risk in the financial system. While markets can easily measure inflation or unemployment, debt risks are much harder to quantify and time. As a result, investors often ignore them until a crisis emerges.
Why “All Roads Lead to Gold”
Despite gold's strong performance over the past two years, McIntyre noted that Western investors remain significantly underallocated to precious metals. Gold ETF holdings remain below historical highs, while much of the strongest demand has come from Asia and emerging markets rather than North America and Europe.
Maharrey argued that even a modest portfolio shift toward gold could dramatically increase demand. He pointed to growing discussions among some investment professionals about replacing the traditional 60/40 portfolio allocation with a 60/20/20 model, reducing bond exposure and allocating 20% to gold.
According to both Maharrey and McIntyre, gold is uniquely positioned because it can perform well under multiple scenarios. If inflation remains elevated, gold helps preserve purchasing power. If economic conditions deteriorate, gold benefits from its safe-haven appeal. In either case, they argue, the long-term case for precious metals remains intact.
Final Takeaway
Maharrey closed the episode by returning to the central theme introduced at the beginning: investors need a recipe. Whether navigating inflation, questionable government data, pandemic aftereffects, or the Federal Reserve's debt-driven policy dilemma, he believes long-term success depends on maintaining a disciplined strategy rather than reacting emotionally to short-term events.
For Maharrey, that recipe continues to include gold and silver as essential tools for preserving wealth in an era marked by inflation, excessive debt, and growing economic uncertainty.
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