The Margin Debt Bubble No One Wants to Talk About

Margin debt on the New York Stock Exchange has now surpassed $1 trillion. That means investors are borrowing record amounts of money against their portfolios, effectively gambling with leverage.

• In 1987, margin calls forced foreclosures on homes after the Dow fell 22.6% in one day.

• Today, the scale is exponentially larger—making the risks even more catastrophic.

• Most investors have no idea their houses are on the line if they can’t meet margin calls.

As Dohmen puts it: “Can you imagine asking someone with a margin account if they know they could lose their house? They don’t.”

The Fed’s Money Machine Is Fueling Madness

The Federal Reserve claims it’s “tightening,” but the data says otherwise. M2 money supply hit an all-time high in August. That liquidity is what’s been propping up the market—not fundamentals.

• The Nasdaq’s market cap relative to M2 supply is now 145%, surpassing the peak of the 2000 dot-com bubble.

• Investors are piling into speculative junk: double and triple leveraged ETFs, one-day options, SPACs with no underlying value.

• The result? An “insane level of speculation” unmatched in history.

When liquidity reverses, the exit doors will slam shut. As Dohmen warns, “When everybody wants to exit, it’s going to get very crowded.”

Wall Street Sells, The Public Holds the Bag

The narrative is always the same. Wall Street hypes risky assets just long enough to unload them onto unsuspecting investors.

• Private equity giants are exiting positions while promoting them as “must-own” investments.

• Retail investors are set up as the bag holders, left with collapsing assets when reality sets in.

• Even JPMorgan’s Jamie Dimon now admits the economy is weakening—a signal that insiders are bracing for impact.

Gold & Silver: The Assets That Endure

While speculative assets collapse under leverage, physical gold and silver preserve purchasing power.

Dohmen emphasized: “Gold and silver will retain their purchasing power. The world is in the same fix—Europe is crumbling, the U.S. is drowning in debt. Tangible assets are your lifeline.”

Why gold and silver matter now:

• Wealth preservation in inflationary storms

• Tangible assets not tied to digital numbers or Wall Street paper games

• Gold vs. dollar: when fiat collapses, gold endures

• Inflation hedge proven through centuries

Unlike Bitcoin—which Dohmen dismisses as a “digital number with no intrinsic value”—precious metals cannot be printed, hacked, or legislated out of existence.

Conclusion

Margin debt at $1 trillion is not just another headline. It’s a warning of systemic fragility that could wipe out retirement savings, investment portfolios, and even homes.

History shows how quickly markets can unravel. The higher the leverage, the harder the fall. And this time, the risks are global.

For investors seeking stability, the path forward is clear: step away from speculative traps and into real, tangible assets—gold and silver.

About ITM Trading

ITM Trading has over 28 years of experience helping clients safeguard their wealth through personalized strategies built on physical gold and silver. Our team of experts delivers research-backed guidance tailored to today’s economic threats.

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