Trump Calls for Hyperinflation as Public Policy
Rafi Farber of End Game Investor says the most interesting action right now is not the floating price of gold or silver but the Federal Reserve’s discount window. He calls that window Orwellian language for the bailout window. Banks are tapping it at levels last seen before the crises of 2008 and 2023.
“They call it a discount window because it sounds better. People like discounts. Discount gas. Discount internal organs. Discount drugs, whatever. That’s all great. But when you talk about bailouts, nobody likes to hear that, but that’s what it is,” Farber said.
Primary credit, the amount drawn directly from the Fed, stands above $11 billion. That is higher than at any point since the regional banking crisis. Banks avoid the window if they can because taking the money signals they are dying and can trigger a run. “You don’t want to take this money if you’re a bank because it means that you’re dying. And if you take that money, people know that you’re dying.”
The stress shows up elsewhere. Junk bond spreads between CCC rated debt and investment grade paper have widened to levels last seen in October 2022 and are approaching the March 2020 spike. Sovereign yields have eased in recent days, but junk yields have not. Farber reads the flight into Treasuries as a knee jerk move to safety while financial conditions tighten. Federal Home Loan Bank advances, which John Titus has called the liquor kiosk of loans, sit near $800 billion.
Banks prefer that channel because it is reported only quarterly, so competitors do not immediately know who is borrowing. The record was set during the 2023 Silicon Valley Bank collapse. The current pace has been rising since 2025.
“We’re at 2008 levels of bailout window access or bailout window tapping by the banks,” Farber said. In 2008 the window reached roughly $110 billion. In 2023 it hit about $155 billion. The present level of $11 billion matches the reading from May 2008, just months before the full crisis. Small banks began tapping the window as early as 2005. The pattern is repeating.
Silver futures open interest has jumped by about 5,000 contracts to roughly 113,000 as the metal tagged the $55 area that held in late June and mid July. New longs opening at the low suggest bullish speculation rather than short covering. Farber does not expect silver to make new highs until the Fed is forced to print in response to a crisis. A buffer above the recent lows would still be useful. “I don’t think that silver is going to surge to new highs until the Fed has to move and print more money because of a financial crisis.” Once that happens, he expects triple digits and beyond.
The video then turns to a Time magazine interview with President Trump. When the interviewer noted concern that the economy is too hot, Trump replied that the concern is inflation and that “this is hurting our country more than inflation.”
Unprompted, he added that certain levels of inflation will pay off the debt “very rapidly. Very rapidly.” Farber’s reading is direct. “What kind of inflation pays back debt very rapidly? Well, that would be hyperinflation. So it seems that Trump is calling for hyperinflation as public fiscal policy.” He argues the outcome is coming regardless, because the only ways to clear the debt are hyperinflation or default. Both leave gold as money again. “Hyperinflation is public policy because that’s where we’re headed.”
Bank of America earnings illustrate the next pressure point. The stock fell 7.5 percent. Headlines focused on a charge of roughly $1.2 billion to $1.5 billion. Farber says the real story is elsewhere. Held to maturity agency mortgage backed securities showed unrealized losses rising from $68 billion on June 30 to $87 billion on September 30. Treasury and government agency losses rose only from $13 billion to $15.6 billion. Total unrealized losses crossed $100 billion. “This I think is what’s really causing Bank of America to fall because mortgage backed securities are losing value which means we’re having another housing crisis.” Fannie Mae’s stock is falling again. Housing prices are next. “Fanny May the place where mortgage backed securities go to die.”
Farber does not know which domino falls first. Sovereign debt, junk credit, and housing stress could hit together. “Maybe there’s just going to be an earthquake and like all the dominoes just fall together without even creating this great pattern of lovely falling in an artistic line. It’s not going to be so artistic. Maybe it’ll just be like the room explodes in a nonviolent way.” When credit and debt cancel, the dollar, which is roughly 98 percent credit on the Fed’s balance sheet, leaves only the original backing. That is gold. Silver then becomes necessary for retail transactions once derivatives, including Bitcoin, are wiped out. “People are left with no choice but to transact in gold and silver coins for a while.”
The signs of stress are rising. The bailout window is open. Junk spreads are widening. Mortgage losses are growing. And the president has described inflation that pays off debt very rapidly as something that would help the country.
Farber’s conclusion is that the next crisis is not distant.
