Dollar Cost Averaging Into Silver Makes Cents or is XMoney a Better Choice

We’ve had quite the pullback in silver after a run up to over $120 earlier this year. Meanwhile the main reasons for owning silver haven’t changed but improved. The national debt will never go lower and at present, the interest paid on the national debt is at its highest point ever. Let’s look at the data.

Net interest: approximately $1.04 trillion

That would represent about:14% of all federal spending

• 19% of federal revenue
• 3.3% of the entire U.S. economy

CBO projects total 2026 spending of approximately $7.45 trillion and revenue of approximately $5.60 trillion. That’s an additional deficit of 1.85 trillion. Did you know we spend more on interest than on national defense?

Where interest ranks

There are two slightly different answers depending on whether you examine spending already made or the full-year projection:

Thus, interest is currently the federal government’s second-largest spending category based on fiscal-year-to-date payments, surpassed only by Social Security. On CBO’s full-year basis, it is expected to finish approximately third—behind Social Security and Medicare, but ahead of national defense.

Now let’s look at what President Donald Trump has said in the past so you can get an understanding on how our politicians think. He said in 2020 when our budget deficit was at a record $3.1 trillion, that we should borrow more to pay for infrastructure. Are interest rates higher than 2020? Yes. By default, the amount of interest paid on any additional debt also increases as interest rates move higher. Technically we are still at historically low interest rates but the government has done nothing to slow down its spending each year.

Fiscal years; amounts in trillions of dollars. “Government spending” means total federal outlays.

So for the war spending yes, since 2023 the spending has been consistent even though revenue has increased. In other words, take in more and spend more. What stands out in the following chart?

Defense vs. interest as a share of federal spending

Fiscal years; dollar amounts in billions. Interest uses the standard federal-budget measure of net interest.

While interest rates are presently steady with no Fed Rate change expected tomorrow, with the additional debt incurred each year, the amount paid on interest is growing exponentially. What would happen to that percentage increase when eventually we do move higher in interest rates to fend off expected inflation? What happens if interest rates increase just 3% or 5%? Do you remember the 1970’s and early 80s and double digit interest rates? Is there an energy crisis on the horizon that can expedite this again?

Projected net-interest share of federal spending

I interpreted “3% and 5% higher” as interest rates 3 and 5 percentage points above CBO’s baseline, not merely 3% or 5% higher in relative terms.

Now compare those interest rate increases to share of mandatory government spending the next 10 years. See how much trouble we are really in? In just 10 years we are at 57% or 74.6% of total government spending with interest payments alone. And yet we are fighting wars in Iran and Ukraine and Congress is still spending more than revenue and has no way to stop it no matter who is elected President, Democrat or Republican. Congress is destroying your children’s and grandchildrens future right before your very eyes, and I’m not even trying to scare you with the outcome of double digit interest rates which more than likely will come.

Fiscal years; amounts in trillions of dollars. Mandatory outlays are adjusted to remove payment-timing shifts.

What’s the Solution?

If you listen to Elon Musk, he says in 10 years,2036, we won’t have to worry about money. This of course comes from someone who doesn’t have to worry about money so it’s easily said. And just in the last 24 hours he has introduced XMoney and offering interest rate returns (APY) that are 2% to 3% higher than the underlying bank offers that he is utilizing. But he only offers XMoney to Premium and Premium+ subscribers. But let’s take a closer look at this bank, Cross River Bank, that Elon Musk chose to support his XMoney.

Cross River Bank

• • Savings Account: 1.75% APY base rate with no minimum balance. [1, 2]
  • Tiered Savings Account: Yields scale dynamically based on your balance:
    • • $0.00 – $9,999.99: 1.75% APY
      • $10,000.00 – $49,999.99: 2.55% APY
      • $50,000.00 – $249,999.99: 3.10% APY
      • $250,000.00 – $999,999.99: 3.25% APY
      • $1,000,000.00 and above: 3.40% APY [1]

  • Money Market Account: 0.25% APY with zero minimum balance restrictions. [, 2]
  • Checking Account: 0.10% APY on the digital and physical “Select Checking” options. []

• • 3-Month CD: 3.75% APY
  • 6-Month CD: 3.65% APY
  • 9-Month CD: 3.60% APY
  • 12-Month to 36-Month CDs: 3.50% APY
  • 48-Month CD: 3.60% APY []

• • Prestige Business Tiered Savings: Rates mirror the personal tiers closely, starting at 1.85% APY for low balances and rising to 3.50% APY on amounts over $1,000,000.
  • Business Checking: 0.07% APY on basic business money market checking tiers. [1]

If everything Elon Musk touches turns to gold, I have my doubts about this one. This from a guy who says we don’t have to worry about money in 10 years.

Conclusion on XMoney

I remember being at a Washington Mutual bank and hearing the bank teller offering rates that were 2% more than the norm. The bank was in a cash crunch. Next thing you know they were taken over by Chase bank. Cross River Bank doesn’t seem to be in a cash crunch but why Elon Musk chose that bank is beyond me. The one thing for certain, the 6% APY on XMoney is unsustainable if rates stay the same.

The Silver Alternative 

Right now silver has fallen off its highs and has settled just below the 50% decline area where it decides whether it has one more dip to wipe out any remaining longs or bounces up in a bull move that can last till 2028 and beyond, possibly doubling, tripling or more from where it is presently resides at $57.40 an ounce as I type. It would have to go up over 100% just go get back to where it was in February.

While gold has not fallen 50% and has been the more stable of the two metals, we have always known silver to be more volatile. In the past I have described it as the tortoise (gold) and the hare (silver). We are back to that level once more but instead of running from the teens, it is running from the 50’s and most everyone has already profited nicely from the silver bull run we have had. Many sold over $100 and congratulations if you did.

The key now with silver is to simply do what I have advised many to do from the beginning, dolllar-cost average into your overall allocation. There is no better way to play silver right now and next up are the “undreamed of heights” that my mentor Richard Russel wrote about in the 3rd and final stage of the metals run. Or you can sit on your trumped up 6% from Elon Musk’s XMoney and pretend that is going to outpace inflation. Your choice.

About Doug Eberhardt

Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534