The Only Thing Not on Sale Is Leverage

Gold, silver, bitcoin and oil are being liquidated in unison. The dollar and US equities are adored. Sitting under both: a record pile of borrowed money - and a consumer who just ran out of his own.

Jun 25, 2026

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Gold has snapped below $4,000, about 26% off its January high. Silver’s been knifed into the high-$50s, bitcoin sits at a 20-month low under $60k, and Brent is back to its pre-Iran-war handle near $72. Every asset you’d buy to step outside the financial system went on the clearance rack at once - and gold ETFs are bleeding the kind of outflows you see when people sell what they can, not what they want to.

Gold ETF flows by region turning to outflows as gold price rolls over — ETFs flip to outflows as the price rolls over. That’s forced selling.

Why now

The disinflation victory lap

The cause is obvious. The Fed held, scrapped its easing bias and floated a hike, sending 2-year yields to a one-year high. Oil’s collapse is doing the Fed’s job on inflation, the Iran premium has unwound, and Treasury Secretary Bessent is out narrating a tidy world of strong dollar, tamed inflation, 3% growth and AI-doubled productivity — all at once. Higher real yields and a firm dollar are gold’s natural kryptonite, so the move is coherent. It is also extremely crowded.

Foreign portfolio holdings of US equity securities at a record — A record ~$23T of US equities held abroad — ~63% of foreigners’ financial assets, above the 2000 peak. The whole planet is long the same paper.

What’s actually going up

Here’s the one line printing fresh records while everything real bleeds: borrowed money. Margin debt just hit an all-time high $1.3 trillion, roughly 5.2% of GDP. Leveraged ETF assets sit at a record $198bn — the 99.9th percentile in history — with ~$40bn in 3x Nasdaq and ~$35bn in 3x semis. Nothing says “sound fundamentals” like a record margin balance propping up a record-crowded long.

Margin debt at a record high $1.304 trillion — $1.3T of customer margin debt. The last three times the line went vertical: 2000, 2008, 2022.

The crack under the floor

And the buyer of last resort is tapped out. US real disposable income just turned negative year-over-year: households have less real money to spend, courtesy of the inflation that already happened — even as the forward narrative pivots to disinflation. A levered-up market resting on a shrinking consumer is not a sturdy structure.

US real disposable income turns negative year over year — The marginal buyer is getting poorer in real terms — just as the market levers up against him.

The setup is everywhere. The trade isn't. So why this looks like a washout rather than a top, and the one signal that's flipping?

Alina Khay