Stock Prices High, Gold at Record Levels: What Happens to the Value of Money? - From This Morning's News -

Watching the news this morning, a question suddenly popped into my head.
"Stock prices are high and gold is at record levels—what does this actually mean?"

I have written an easy-to-understand article on why gold continues to hit record highs, so please take a look if you are interested.

The current situation seemed a bit contradictory.
It was a perfect theme to think about, so I looked into it while having a dialogue with AI.

1. What is happening in the world

The current market (as of October 27, 2025) has several characteristics.

• U.S. stock prices are at all-time highs

• Gold prices are also remaining high near record levels

• Prices (inflation) are still near 3%

• Central banks around the world are busily buying up gold

In other words, stocks and gold are rising "at the same time."
Normally, if one goes up, the other goes down.
But that is not the case right now.

2. Why is such a strange thing happening?

(1) Because money is becoming easier to circulate

The economy is not bad, yet interest rates are starting to fall.
In other words, it is a state where it is "easy to borrow money."

Companies find it easier to invest, and stock prices tend to rise.
At the same time, as the amount of money circulating in the world increases, the value of money itself is gradually being diluted.

(2) The "investment boom" of the AI era

Semiconductors, power, data centers.
Infrastructure investment to support AI is progressing all over the world.

For companies, this is a major growth opportunity.
But at the same time, demand for power and resources is rising, which also leads to pressure for price increases—meaning the value of money is shrinking.

(3) More people are buying gold

Central banks around the world are continuing to buy gold as part of a "move away from the dollar."
Amidst increasing political and geopolitical anxiety, the trend of "gold over paper currency" is strengthening.

Because of this, gold prices are maintaining a high level that cannot be explained by the normal "relationship with interest rates."

(4) Japan is riding another wave called 'yen depreciation'

As the value of the yen falls, when overseas assets (both stocks and gold) are converted into yen, their prices appear to rise.

But that also means—
it means the yen is becoming weaker.

3. How to view the present and the future

When I talk about various things with AI, economic topics tend to become difficult💦

But to put it simply, it's like this.

Interest rates fall and stocks rise.
But in the background, there is the reality that the value of money is gradually thinning.

In other words, it is an era where just holding cash means its value will slowly decrease.

Like in the past, just depositing it in a bank and having it grow with compound interest—
that era is already over.

4. Outlook for the next 1-2 years

Based on the current situation, the future scenarios seem to be broadly divided into four.

🟢 Soft Landing
Economy grows moderately, inflation in the 2-3% range
・Stocks: Maintain high levels
・Gold: Remains high
・Currency (Yen): Slightly weaker

🟠 Re-inflation
Prices rise again, interest rates rise
・Stocks: Headwinds for growth stocks
・Gold: Rises further
・Currency (Yen): Unstable

🔴 Hard Landing
Economy stalls, rate cuts accelerate rapidly
・Stocks: Adjustment phase
・Gold: Recovers after a temporary drop
・Currency (Yen): Towards a stronger yen

⚪ Disinflation
Prices settle and stabilize
・Stocks: Stable
・Gold: Slightly lower
・Currency (Yen): Yen rebounds

The current market's main scenario is 🟢 a soft landing (a gentle touchdown).
However, depending on energy and geopolitical anxieties,
there is a possibility it could lean toward 🟠 re-inflation (rising prices again).

5. How to face it

• Not just stocks, and not just gold.
  Include other financial assets and maintain a balance that complements each other.

• Watch the flow of exchange rates.
  As long as the yen continues to weaken, overseas assets will appear stronger.

• Do not be swayed by short-term news.
  The economy is a wave.
  Rather than trying to read the waves, it is important to build a boat that won't sink even when tossed about.

6. For our future

There are valid reasons for both stocks and gold to be rising.

However, the essence of the matter is that the form of trust we call money is slowly changing.

Rather than fearing this change, I believe it is better to understand the trend and ride it at your own pace.