Why Falling Interest Rates Could Signal "Stagflation"—Why Precious Metals Matter More Than Ever
- David LeBlanc
- Aug 31
- 3 min read
Hi again real money tribe,
Happy Labour Day Weekend to you! Whether your kids are getting excited for home- or pod-schooling, or you are ramping up your self-employed business after slowing day a little during the summer (because fewer of us want our kids in the public education system or us working a '9-5'), welcome to September and this week's article about how we can protect and preserve our wealth with precious metals and passive dividend income for our financial independence, choice and freedom.
We’re hearing more and more lately that the U.S. is likely to start lowering interest rates in September after a long period of sitting between 4.5%–5%. Canada will likely continue lowering rates too, and many other developed countries have already begun easing. On the surface, cheaper borrowing often sounds like a good thing—businesses can access capital more easily, consumers can refinance or borrow at lower rates, and the stock market tends to like rate cuts.
But let’s be honest: when central banks start cutting rates aggressively, it’s usually because the economy is struggling and needs a boost. History shows us that this often comes with more government spending, more debt, and yes—more money printing. The end result? Higher inflation down the road.
This environment is exactly why owning physical precious metals makes so much sense.
Stagflation: The Hidden Risk Behind Rate Cuts
To me, what we’re starting to see looks like stagflation. What is it? It's the worst of both worlds—it’s when the economy is weak (stagnant or even shrinking), but prices continue to rise (inflation). That means our purchasing power continues to drop while growth continues to slow, which puts real stress on households and businesses alike.
How does stagflation happen? Usually when central banks and governments try to stimulate a struggling economy with rate cuts and spending, but inflationary pressures are already baked in from years of debt and money printing. Instead of solving the problem, they fuel rising prices while the economy stays sluggish.
Historical Examples of Stagflation
This isn’t new—we’ve seen it before:
1970s United States: After the oil shocks of 1973 and 1979, the U.S. experienced high unemployment and inflation simultaneously. Traditional economic tools didn’t work—raising rates hurt growth, cutting them worsened inflation. During that period, gold skyrocketed from around $35 per ounce in 1971 to over $800 by 1980, protecting and massively rewarding those who owned it.
United Kingdom, 1970s–80s: The U.K. faced a mix of high inflation, energy crises, and weak productivity. The British pound was devalued, and ordinary savers saw their wealth eroded. Precious metals again provided a hedge against the falling value of fiat currency.
More recent examples: Even in the late 2000s after the financial crisis, while inflation wasn’t as severe, the flood of money printing ("quantitative easing") pushed investors toward hard assets. Gold and silver both climbed as confidence in paper money wavered.
The lesson? Stagflation has always been brutal for savers in fiat dollars—but beneficial for those of us holding tangible assets like gold and silver.
Why Precious Metals Are Essential in This Environment
In times of stagflation and currency debasement, physical gold and silver aren’t just “nice-to-have” assets. They become essential. Unlike fiat dollars, which central banks can print endlessly, physical precious metals are finite and cannot be manufactured out of thin air.
Wealth preservation: Metals hold purchasing power when useless fiat dollars are losing value.
Financial privacy & control: You’re not relying on a bank or government policy—you hold real, physical money that's been used by everyday people for thousands of years.
Crisis hedge: When the economy weakens and inflation runs hot, history shows that precious metals tend to rise.
That’s why I personally believe people should only hold enough fiat dollars in the bank to cover monthly bills, use high-yield income ETFS for increased cash flow and reduced income risk, and preserve their true long-term savings and wealth in physical precious metals.
Ready to Take the Next Step?
So, if you’ve been hearing all the news lately about gold and silver and are wondering if now’s the right time… you’re not alone.
👉 If you have specific questions about whether physical precious metals may be right for you, or ready to get started but aren’t sure where or how to begin, or maybe an experienced "stacker" but looking for some tips and plan, I invite you to book a free 15-minute Discovery Call with me.
It’s a private consultation where we’ll go over your questions, your goals, and whether owning gold and silver fits into your plan for protecting and growing your wealth.
To your financial health 🥂,
David
'The Precious Metals Coach + Money Mindset Mentor
"Real Money For We The People"
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