Let’s face it, the United States government has a spending problem. It’s not a Republican or Democrat problem but a Washington DC problem, regardless of the party in charge. As we march towards $40 trillion in US debt, fiscal irresponsibility has led to mounting pressure on prices threatening every consumer’s quality of life. ⁽¹⁾




When governments engage in sustained deficit spending, it leads to a significant increase in national debt. One of the ways this can contribute to inflation is through the injection of additional money into the economy. As governments borrow to fund programs, improve infrastructure, or increase social spending, that borrowed capital eventually creates upward pressure on prices. More money in the system, often referred to as money supply, increases overall demand for goods and services. If the supply of goods and services cannot keep pace with the increased demand, prices begin to rise, driving inflation.

WT Wealth Management’s Mineral Mint strategy is a real-asset allocation designed to complement a traditional stock-and-bond portfolios by adding diversified exposure to scarce, in demand, inflation-sensitive assets. Back-testing has shown that a measurable injection of real assets into an otherwise fully diversified portfolio of stocks and bonds did lower risk/volatility and increase investment returns.

Mineral Mint groups assets that tend to be under-allocated in most investor portfolios yet historically respond to rising price pressures (i.e., inflation). Research and back-testing by the Investment Committee at WT Wealth Management led to the creation of Mineral Mint; a curated mix of real assets intended to address persistent inflation and supply-chain constraints while broadening a portfolio’s return drivers.




Some may be surprised by an allocation to Bitcoin, however Bitcoin’s fixed supply and increasing adoption may allow it to serve alongside metals and commodities as part of an inflation hedge, rather than replacing currency within day-to-day monetary transactions. The total number of bitcoins that can ever exist is 21 million, so it has a finite supply. Finite supply assets have historically been good inflation hedges. This contrasts with traditional fiat currencies, which can be printed in unlimited amounts by central banks thus eroding their value. Incorporating Bitcoin within a diversified real-assets sleeve aims to capture potential upside while reducing idiosyncratic risk. ⁽²⁾

Position sizes within Mineral Mint are intentionally diversified, with notable weights in gold, energy infrastructure, and silver, along with rare-earth minerals reflecting the sleeve’s objective to balance store-of-value assets, capitalize on economic cycles, and trend-following innovations like Artificial Intelligence (AI) and Date Center creation.

Strategically, Mineral Mint seeks three things:

• First, inflation resilience: real assets with constrained supply (metals, energy,) may respond positively when monetary expansion and fiscal deficits pressure purchasing power.
• Second, structural diversification: many of these holdings are tied to physical supply/demand rather than purely financial conditions, delivering return streams less correlated with broad equities and bonds.
• Third, risk management via breadth: rather than isolating a single theme, the sleeve spreads risk across commodities, infrastructure toll roads, producers that can potentially offset drawdowns during trend shocks.

Risks remain. Real-assets ETFs can be volatile, influenced by geopolitics, currency moves, and commodity cycles; narrowly focused exposures may experience sharp drawdowns. Bitcoin introduces additional regulatory and sentiment risks; while its finite supply is clear, its market price can be highly variable. Therefore, Mineral Mint is positioned as a sleeve, an additive component sized within a holistic financial plan, not a standalone portfolio.




Our proprietary Mineral Mint strategy capitalizes on our view that scarce, real-economy assets, can strengthen portfolios against persistent inflation and broaden sources of return, while relying on diversification and disciplined sizing to navigate volatility.

Finally, inflation itself can become a self-fulfilling prophecy in a high-debt environment. As prices rise, governments may face higher costs for goods, services, and debt servicing. To cover these rising costs without raising taxes or cutting spending, they may borrow even more, deepening the cycle of inflation and debt accumulation.

While deficit spending can be a useful tool in stimulating growth during economic downturns, excessive or prolonged deficits without corresponding increases in productivity and output can undermine monetary stability and contribute directly to inflationary pressures.

The WT Wealth Management Learning Spotlights are designed to inform, inspire, and foster meaningful dialogue between our clients and the WT Wealth Management team. Our goal is to demystify complex economic and investment topics, offering clear, practical insights that connect financial theory to real-world decisions. As always, to explore how Mineral Mint can fit into your broader financial plan, please contact your WT Wealth Management Investment Advisor for a more detailed and targeted discussion.


SOURCES

1. UsDebtClock.org
2. prasad.dyson.cornell.edu/doc/WSJ.08Oct23.pdf