Monthly Market Compass: August 2026
US debt levels continue to push higher with no off-ramp in sight. Meanwhile the world's central banks buy gold, even as interest in the yellow metal hits a low. AI, tech, and gold are all surreal.
Hello again, and welcome to our Monthly Market Compass for August 2026. These chart-heavy market summaries go out at the beginning of each month.
These notes are not investment advice and are for informational purposes only. Always do your own research. Sources can be found below each graphic.
As usual, we divide these monthly notes into several sections: an introduction and inflation section, an economy section, a liquidity section, a Fed-focused section, a geopolitics and commodities section, a crypto section, and an equities section. A market conclusion follows these sections. Enjoy!
Introduction and Inflation:
Welcome back for a new month!
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OK! Another month, another chance to look at all the challenges facing the modern economic landscape in the US and the West more broadly, along with the chance to appreciate the surrealism of the ongoing K-shaped economy, central bank gold purchases, and AI story.
To dive right in, the world continues to increase the money supply.
Apparently nothing can stop the US debt engine:
$450 billion in debt has been added in the US over the last two months:
US Debt is not a political debate:
Meanwhile inflation is a one way street:
As inflation rises, our interest rates go higher, and stay higher:
Bond rates world-wide continue to trend higher:
The USD might be ready to roll over into a multi-year weakening cycle:
Long term US Treasuries appear to be moving in the opposite direction of that trend:
Meanwhile, long-term rates in Japan are looking ominous:
So ominous in fact that the US Treasury Secretary is warning that the Fed will need to step in to support the Yen:
The tension continues to be between the advanced currencies of the Western world and the limited number of alternatives.
One way of looking at that is through the lens of the global money supply and gold:
Gold has now overtaken US Treasuries as the world’s top reserve asset:
China continues to buy more gold:
And the Bank of Korea will now restart buying gold after a 13 year hiatus:
A reserve currency that can’t be spent in a crisis doesn’t match the intention of what a reserve currency is supposed to be:
