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I've always advocated that people should buy some gold every month. And I continue to do so, but I'm not sure that gold will go up, but it could go down less than other things. Right, if I had to list the make a list of what will go down the most when the bubble burst, I would list semiconductor stocks and AI-related stocks.
A lot of these companies will go bankrupt, bankrupt, and gold will stay, but there's, as you know, always a risk that the government, especially under someone like Mr. Trump, goes and says, "Well, gold is okay, but uh the private ownership of gold is unpatriotic. The government can hold gold, but individuals are not allowed to go hold gold."
Global financial markets are teetering on the edge of severe dislocation as speculative excess inflates asset classes across the board. Persistent currency debasement continues to erode purchasing power, leaving everyday investors vulnerable to sudden and systemic valuation shocks. Marc Faber, a well-known economist, investment advisor, and publisher of the Gloom, Boom, and Doom Report, emphasizes that when the current speculative bubble bursts, semiconductor and artificial intelligence-related stocks will suffer the steepest collapse.
He predicts that numerous high-flying tech companies will go completely bankrupt, whereas gold will demonstrate resilience and decline far less than broader risk assets. Furthermore, central bank money printing fails to resolve underlying economic damage, merely postponing severe reckonings while exacerbating systemic instability.
Mounting national debt burdens guarantee that traditional financial securities remain exposed to sustained monetary destruction. To protect purchasing power, individuals should accumulate physical bullion monthly and act as their own central bank. Now, we present the clips from Mark Fabf we go back to say 1970 and we measure prices adjusted for inflation, regardless how we measure inflation, then energy prices, I mean, oil prices are have gone up much less than say the price of gold.
So, in gold terms, a barrel of oil is relatively inexpensive. It may be expensive, but gold is more expensive. Now, if we measure all these relationships, I would say labor is very cheap relative to everything else, and we can measure in the US the labor share of the economy is at the lowest ever. Never been lower.
Food prices, wheat, corn, soybeans is the lowest ever. It's not the lowest ever, but relative to everything else, it's very low at the present time. So, what you're saying is correct, but you have to understand as an investor, say I'm I'm not, but assuming I were a billionaire, and then I have a billion to invest, okay.
Uh with a billion, you can afford to hire a team of agrarian experts that would buy a farm, but not everybody wants to have the headache that is associated with owning farmland. So, and ordinary people, for them to own a farm and be working in a bank or in a I don't know, an office somewhere in New York, is not so easy.
But, uh they can easily own a ton or kilo or [clears throat] an ounce of gold. You understand? So, in a situation where people are unsure about the value of paper money in the longer run and of securities, I mean a stock is worth a hundred. Who knows? In a week, it could be worth 200 or it could be worth 50.
You don't know. I mean, the generation Z seems to know that everything will go up, but the reality is that not everything goes up even with money printing. And the prime example of money printing not helping out are commercial buildings around the world and especially in the US where, as you know, some great commercial buildings in Los Angeles and in Baltimore and in New York and San Francisco are down 80% in value in the city center.
So, the money printing has its limitation. And when you say, "Yes, the government will intervene." This likely, but the reaction of the market may be adverse in the sense that I own a bond portfolio. Because compared to cash, I can earn higher return by being in bonds. And uh cash, I don't feel that comfortable with owning cash.
You understand? So, I own a bond portfolio, but of different maturities. So, every year some maturities will mature. But anyway, if I see that the Fed, say at the September meeting, if they don't increase interest rates, what happens to the bond market? You think it will rally? Or you think it will decline?
My impression, if everything remains the same, and the inflation does not decline, but it may decline on paper, because the government will cheat, but the bond market will not like it. You know, they know how to calculate these things. The fact is simply the Taylor rule, according to which interest rates would be at the neutral level.
On the 10 years, it will be above 6% according to the Taylor rule at the present time. But the bond is 4.7%, so interest rates are relatively low in comparison to the rate of inflation we have in the system. But for sure, they will try to print money. The question is, will it help? You know, in the past it's helped, not it did not help, but it postpones the problem.
It made the problem in the long term worse, but in the short term, it painted fresh paint on the wall and the cracks. Aggressive monetary expansion has definite structural limits that central planners cannot overcome. Unprecedented liquidity injections have already failed to rescue prime commercial properties in major metropolitan centers, where real estate values have plunged up to 80%.
A severe reckoning is predicted for income markets if policy makers refuse to raise borrowing costs against persistent inflationary pressures. Under standard economic models like the Taylor rule, 10-year sovereign yields ought to trade above 6% rather than artificially suppressed levels. Consequently, bond markets will revolt against official attempts to mask deteriorating fundamentals through paper manipulation.
Suppressing borrowing costs to manage ballooning obligations will unleash rampant monetary inflation across the economic system. Tangible holdings will drastically outperform financial promises as currency debasement accelerates throughout the broader economy. Artificially painting over financial cracks merely compounds catastrophic risks, leaving conventional portfolios exposed to severe capital losses.
Now, let's get back to the interview. I expected you to ask about gold since you call yourself Palisades Gold. So, it's not the surprising question. But to answer your questions, of course, monetary inflation is a gift uh for gold prices. An even greater gift for gold prices is a fool or buffoon like Mr.
Trump and an arrogant and ignorant Secretary of the Treasury like Mr. Bessant. Mr. Warsh is not necessarily an academic who is very beneficial for gold because he is actually a well-educated economist. That I have to say. I've read speeches of his and paper of his. He's very knowledgeable about economics and not just modern-day economists, but he understands the theory of say the classical economist from Adam Smith onwards to Hayek, from Mises, Schumpeter, and so forth.
And he knows that money printing is disastrous in the long run. In theory, he would like to increase interest rates, but now he's a politician. Can he do it? He He may come under a lot of pressure from his colleagues, from the Treasury Department. The Treasury Department is essentially praying for lower interest rates because at this level of interest rates, we're not even talking about an increase, the cost of servicing the debt is growing very rapidly because the debt is growing and the interest rates are higher than say they ate 10 years ago.
So, we had no problem and we had all these economists that say debts do not matter. You know, the modern monetary theorists, the absurd theorists, but in a bull market, everything even the absurdities are believed. The debt level exploded and it was possible as long as interest rates went down because [clears throat] the interest payments didn't go up.
But once interest rates started to go up after August 2020, it became burdensome and now this is the largest expenditure at $1.1 trillion a year, the interest on the government debt. Now, the interest on the government debt in theory, in theory, could be deflationary, but if you print money, so course, it's hugely inflationary.
And in that environment, gold is a store of value. And I have advocated for the last 40 years that you cannot trust central banks anymore. You have to be your own central bank and store some gold yourself. That is documented in my books and in my writings and in my interviews. I've always advocated that people should buy some gold every month.
And I continue to do so, but I'm not sure that gold will go up, but it could go down less than other things. If I had to list make a list of what will go down the most when the bubble burst, I would list semiconductor stocks and AI-related stocks. A lot of these companies will go bankrupt. Bankrupt.
And gold will stay, but there's, as you know, always a risk that the government, especially under someone like Mr. Trump, goes and says, "Well, gold is okay, but the private ownership of gold is unpatriotic." The government can hold gold, but individuals are not allowed to go hold gold. You understand?
If the government could lock up the population in during COVID and the population accepted it, they accepted it to be locked up and forced to take vaccines, they all accepted it, then they will probably do nothing if the government comes and says, "Sorry, we have to collect your gold. We pay for it.
We give you some dollars which we print with with They They can can issue freshly printed dollar notes signed by Mr. Trump because by then America will be called the land Trump land." Sovereign debt accumulation has entered an unsustainable spiral with national interest servicing costs already exploding past $1.1 trillion annually.
Because servicing this massive obligation at current interest rates is economically paralyzing, governments will inevitably resort to massive currency printing to fund deficits, triggering intense stagflationary pressures. In such a debased environment, gold will serve as the ultimate store of value, yet investors will face unprecedented political interventions.
A looming geopolitical and regulatory risk is that state authorities will declare the private ownership of physical gold unpatriotic. Governments may decree that only official treasuries are permitted to hold bullion, forcibly outlawing private accumulation and compelling citizens to exchange their gold for newly printed paper notes.
Historical precedent shows that public resistance will be minimal just as populations unquestioningly accepted severe quarantine lockdowns and mandates during recent health emergencies. Individuals are predicted to passively surrender tangible reserves under the guise of patriotic duty. Meanwhile, productive real assets and commodities remain deeply underpriced relative to precious metals and paper claims, signaling massive structural reallocations ahead. Preparing for coercive capital controls is essential for wealth preservation. .
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