Garrett Baldwin writes at “Me and the Money Printer” on Substack, where he analyzes liquidity flows, insider behavior, and the mechanisms of modern finance that traditional media ignore. For anyone saving for retirement, this is a must-see.
For most Americans, the financial system operates like a black box. We hear about interest rates, inflation, and stock market valuations, but the real machinery driving our economy remains hidden from view.
In this wide-ranging conversation, financial analyst Garrett Baldwin pulls back the curtain on how modern markets actually work—and why everything we learned in Econ and Finance might be dangerously outdated.
The Shadow Banking System Few Discuss
Baldwin’s journey to understanding finance took him through three graduate schools and 17 years of study, ultimately leading to a shocking revelation: the banking system today operates nothing like it did before 2008. The key insight? Markets don’t run on fundamentals anymore—they run on liquidity.
“Liquidity is not just money,” Baldwin explains. “It’s the idea that you’re going to have money in the future.” When that confidence evaporates, markets don’t gradually decline—they collapse violently, as we saw in August 2024 and April 2025. These weren’t driven by poor earnings or economic fundamentals. They were collateral crises in the shadow banking system that most people don’t even know exist.
The mechanism is complex but crucial to understand: Hedge funds buy Treasury bills, use them as collateral in the overnight lending market (repo market), borrow more money, and repeat the process 6 or 7 times. A $1 million position can balloon into $2.5 billion in leveraged exposure. When liquidity tightens, this unwinds catastrophically.
From Manufacturing to Financialization
Since 1971, when America left the gold standard, the economy has undergone a fundamental transformation. Manufacturing has fallen from 25% to 11% of GDP, while finance, real estate, and insurance have jumped to 25%. This isn’t just a statistical shift—it’s a structural curse.
In a financialized economy:
Homes aren’t places to live; they’re speculative assets
College becomes a lending product
Healthcare becomes a billing product
Corporations buy back stock instead of investing in production
The strong dollar benefits consumers but devastates domestic production. Economic growth now depends on credit creation and asset price inflation rather than building things. And those closest to the “money printer”—the hedge funds, sovereign wealth funds, and shadow banks—capture the gains before inflation hits Main Street.
This is the Cantillon Effect in action: those nearest to newly created money benefit most, while everyone else pays through higher prices down the line.
The Perpetual Bailout Machine
Since 2008, we’ve experienced multiple “K-shaped recoveries”—where top shareholders get bailed out while everyone else runs in place. The Federal Reserve’s balance sheet exploded from essentially nothing to $9 trillion, then “normalized” to $6.7 trillion.
Baldwin predicts it could exceed $10 trillion by 2027-28.
The Treasury Department now finances 22% of federal debt with short-term bills (under 12 months), up from just 11% in 2017. This provides the collateral that shadow banks need to create leverage, but it also makes the system dangerously fragile. As Baldwin notes, we’re no longer asking if the system will hit a wall, but when—likely 2026 or 2027.
The Fed’s actual mission has shifted: “I don’t believe the purpose of the Federal Reserve anymore is to manage inflation and manage the labor markets. I think it is to provide stability to global markets at all given times.”
What Wealthy Families Have Known for Ages
When Baldwin studied historical crises—from 60 AD Judea to the French Revolution to Weimar Germany—he discovered something remarkable: wealthy families always own the same things.
The pattern holds across millennia:
Gold and silver
Land and toll roads
Infrastructure that controls movement
Choke points in the economy
Today’s equivalents are companies like Prologis (last-mile delivery infrastructure), pipelines, digital infrastructure, and electricity generation. These are exactly what sovereign wealth funds prioritize—not currencies, but hard claims on physical assets.
The investment principle is elegant: If it moves, invest in it. Money flowing through payment systems, goods moving through supply chains, data moving through networks—these represent the modern toll roads that generate perpetual cash flow regardless of currency debasement.
Practical Signals for Everyday Investors
Baldwin offers several actionable insights for retail investors navigating this treacherous landscape:
Watch insider behavior. CFO purchases have outperformed the market since 1968. When multiple executives buy their own stock simultaneously (cluster buying), especially at companies with economic choke points, pay attention. Insiders collectively called the bottom of every major downturn since 2008.
Track the insider buying-to-selling ratio. When this spikes alongside accommodative policy changes (even if they’re not called “QE”), markets typically recover.
Follow momentum, not hope. Use the 20-day moving average. If a stock trades above it, and the average is ascending, consider buying. If it drops below, step aside. Buy dips at the 100-day moving average when momentum is positive.
Listen for policy clues. When the Fed announces new lending programs—whatever they call them—it’s money printing by another name. Combined with heavy insider buying, this signals an opportunity.
Preciousssss Metals
Silver represents a particularly compelling case. It’s both a monetary metal and a critical industrial input for AI, EVs, missiles, and advanced electronics. China is hoarding strategic commodities while export controls tighten global supply. Meanwhile, the paper markets show signs of stress—there may not be enough physical silver to meet delivery obligations on major contract expirations.
Baldwin holds both physical metals and ETFs such as PHYS (Sprott Physical Gold Trust) and SLVR, which represent direct claims to vaulted metal. But he emphasizes patience: “This can go on a lot longer. This could go on another 15, 20 years.”
Hitting the Wall
Multiple forces converge toward a reckoning in 2026-27:
Record Treasury rollovers at elevated rates
Accelerating entitlement obligations
Waning foreign appetite for US debt (China isn’t buying, Japan has its own problems)
Shadow banking requires constant collateral expansion
Passive investing now represents over 50% of market flows (up from 5% in 1997).
Two catastrophic scenarios loom: foreign capital fleeing US markets, or short-term Treasury rates spiking as confidence erodes. Either could trigger the cascading liquidations that leverage creates.
The solution won’t be pretty. It likely involves the Fed’s balance sheet exploding past $10 trillion, new forms of monetization, and continued extraction from those furthest from the money printer.
What You Can Control
Baldwin’s advice echoes through the conversation: focus on what you can control.
Control your health. Control your wealth through strategic positioning in real assets and companies with genuine competitive moats. Control yourself by avoiding the panic that causes retail investors to sell at bottoms.
The system is complex by design, opaque by necessity, and rigged by structure. But understanding its mechanics—liquidity waves, insider signals, and the primacy of real assets—provides a framework for navigating the storm ahead.
As we face an increasingly bifurcated world, with the US taking the Western hemisphere and China the Eastern (echoing the Spain-Portugal division of the 1500s), the old rules dissolve. The question isn’t whether change comes, but whether you’ll be positioned to survive it.
The wealthy families of Rome, the merchants of the Renaissance, and the sovereigns of today all learned the same lesson: own what moves, own what’s scarce, and own what’s real.
Everything else is just paper promises in a world running out of credibility.
