Weekly Market Update by Retirement Lifestyle Advocates

Silver Market Update

          Silver prices have not increased at the same level as gold prices.  As I have been suggesting, the gold-to-silver ratio is now near an all-time high, perhaps suggesting that silver prices are due for a rally.

          Silver fundamentals also seem to favor a rally at this point in time.  The Silver Institute recently disseminated its World Silver Survey 2025.  The survey reported that since 2019, silver demand has been greater than supply, with demand in 2025 projected to exceed supply by about 188 million ounces (Source:  https://www.moneymetals.com/news/2025/05/13/review-world-silver-survey-2025-004059)

          Silver supplies from mining operations declined by 2% year-over-year, while mining costs to get the silver out of the ground declined.  The all-in cost to produce an ounce of silver is now $14.58 per ounce.  That’s down 13% since calendar year 2023.

          Silver demand in the form of silver bars and rounds is increasing as is silver demand to produce solar panels.  Silver demand for jewelry, photography, and silverware declined this year.

          Silver supplies stored in vaults are down about 33% since calendar year 2021.

Moody’s Cuts US Government’s Credit Rating

          The rating agency, Moody’s, pulled the US Government’s Aaa credit rating (the top credit rating) last week, downgrading the credit rating of the United States to Aaa1, one notch below the highest Aaa rating.  (Source:  https://wolfstreet.com/2025/05/16/moodys-cuts-us-government-credit-rating-due-to-deficits-debt-blames-successive-us-administrations-and-congress/)

          Moody’s said the downgrade “reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.”

          The ratings agency added, “Successive US administrations and congress have failed to agree on measures to reverse the trend of large annual fiscal deficits and growing interest costs.  We do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration.  Persistent, large fiscal deficits will drive the government’s debt and interest burden higher.  The US’ fiscal performance is likely to deteriorate relative to its own past and compared to other highly-rated sovereigns.”

          Arguably, Moody’s is a little late to the dance here.  Fitch downgraded U.S. government debt in 2023, and Standard and Poor’s downgraded US debt in 2011.

House Ways and Means Committee Advances Tax Bill

          Last Wednesday, the House Ways and Means Committee advanced a tax measure that would extend the Trump tax cuts beyond the end of this year when they were set to expire.

          The committee voted 26-19 along party lines (Source:  https://www.yahoo.com/news/house-republicans-advance-trump-tax-164218643.html) to advance the tax measure.

          The tax measure would extend the Trump tax cuts, increase the child tax credit, increase the adoption tax credit, and increase the amount a taxpayer can contribute to a Health Savings Account (HSA).

          The bill would also create a new kind of savings account for children known as the Money Accounts for Growth and Advancement (MAGA Accounts).  This program would allow any parent to open a MAGA account for the benefit of their child with a one-time tax credit of $1,000.  Parents and friends of the child could then contribute up to $5,000 per year to the account for the benefit of the child until the child attains age 18.

          One unresolved item is the SALT deduction: the deduction on a taxpayer’s federal tax return for state and local taxes.  Republicans from higher-tax states are looking to keep the current $10,000 deduction limit.  The current proposal is to increase the SALT deduction limit to $30,000 for taxpayers with annual incomes under $400,000.  Several New York Republicans have indicated they want higher limits to lend their support to the bill.

First Quarter Earnings Exceed Expectations

          Standard and Poor’s 500 stocks collectively reported an increase in earnings for the first quarter of 13.4%.  (Source:  https://www.benzinga.com/news/earnings/earnings-beats/25/05/45357352/sp-500-q1-earnings-jump-13-4-spy-investors-just-got-their-second-straight-double-digit-surprise)

          This is the second consecutive quarter that the index has experienced double-digit earnings growth.  90% of S&P 500 companies have reported earnings so far, with 78% of reporting companies beating earnings estimates, topping the 10-year average of 75%.

          While this is the seventh straight quarter of earnings growth, stocks are still trading at a forward price-to-earnings ratio of 20.5, which is far higher than the five-year and ten-year averages.

You and the Pope – US Taxpayers

          The first American Pope is also an American taxpayer.  (Source:  https://www.schiffsovereign.com/trends/meet-bob-the-american-pope-who-still-has-to-file-us-taxes-152794/)

          US citizens, unlike the citizens of many other countries like France, Germany, Britain, Japan, Brazil, Canada, and Australia (and just about any other country on the face of the earth), must pay taxes on income whether or not they live in the United States.  This includes the new Pope, who, as a missionary living in Peru for many years, should have been filing US tax returns and additional foreign disclosures.  American citizens can exempt the first $130,000 of earned income from US taxation, but given the Pope has an annual salary of about $400,000, he will share in the same tax misery that you and I do.

RLA Radio

          This week’s RLA radio program features an interview that I did with Mr. Doug Casey of Casey Research.  The interview is posted and available now by clicking on the "Podcast" tab at the top of this page.

Quote of the Week

“I have enough money to last me the rest of my life, unless I buy something.”                                      -Jackie Mason