MORJA in Economics: Why the Stock Market and Gold Rise Simultaneously

A few days ago, a political figure announced that the S&P 500 index had reached 7,000 points — a record high in history. However, a detailed analysis of technical charts reveals an obvious contradiction in the market that demands serious attention to the economic situation. When stocks and precious metals move upward in unison, it signals not economic health, but deep structural imbalances in the global monetary system.

Bearish Divergence on Weekly and Daily Charts

Technical analysis of the S&P 500 shows a troubling pattern — so-called bearish divergence on weekly and daily candlesticks. Such signals indicate a discrepancy between price highs and volume, which typically precedes a correction. The situation with the Nasdaq and Dow Jones indices looks no better. At the same time, gold (PAXG) is hitting new all-time highs, which usually occurs during a crisis or significant currency weakening.

Visual analysis of the charts requires the introduction of new trend channels to monitor increasing volatility. Technical indicators confirm that the upward movement may not be over, but its character is becoming increasingly unstable.

Dollar Devaluation as the True Cause of the Paradox

The parallel rise of stock indices and precious metals violates basic economic principles. The only logical explanation for this phenomenon is a massive devaluation of the US dollar. When a currency loses purchasing power, all assets denominated in that currency automatically increase in paper value. This creates an illusion of prosperity in the stock market, while the real value of investments remains unchanged or decreases.

In conditions of such currency devaluation, many analysts see the Federal Reserve’s decision to keep interest rates unchanged as a critical monetary policy mistake. Maintaining such low rates amid high inflation encourages further capital outflows from currency assets.

History as a Warning: 2008 May Seem Like a Rehearsal

The 2008 mortgage market collapse, when major financial institutions and banks failed, now appears only as a prelude to an upcoming economic shock. Back then, the system was in shock, but stabilization was achieved through extraordinary measures. The current situation differs in scale of imbalances and debt obligations.

The timing of the crash remains uncertain. It could happen within the next few months or stretch over several years. As the famous investor Michael Burry paraphrased, it’s impossible to predict exactly when the market will collapse — often traders who foresee the crisis close their positions at losses long before it happens. This demonstrates the danger of maintaining short positions when leverage in the economy becomes unbearable — financial resources are exhausted before the forecast materializes.

Cryptocurrency in the Devaluation Trap: The Case of BTC

Bitcoin holds a special position in this economic drama. BTC is trading at $67.55K with a daily gain of +1.02%, but its movement is synchronized with dollar devaluation, not with independent demand factors. This raises fundamental questions about the true value of cryptocurrencies overall.

When the world’s main reserve currency weakens, crypto assets increase nominally, but their real purchasing power may remain unchanged or decline. Investors seeking refuge in digital assets may find themselves in the same trap as the stock market — gains in numbers without gains in real value.

The Capital Preservation Dilemma

A logical question arises: how to protect savings in a systemic crisis? The traditional answer — investing in precious metals — is losing its appeal. When the crash finally occurs and gold prices reach their peak (in conditions of dollar lows), a mass sell-off will begin. Those who planned to preserve wealth in gold will face forced selling at the worst possible moment, when everyone is exiting positions simultaneously.

Leverage in the economy manifests here as well — every protective measure requires time and resources, which may run out before the strategy pays off. This creates a paradox: knowing about the impending crisis, it’s difficult to find truly safe shelter for capital.