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You know, people say that the price of gold, silver, and platinum has gone up. Yes, relatively worthless paper money that is constantly depreciating. So, I could say that the price of gold is stable and the purchasing power of paper currencies is falling. The value of paper money decreases compared to gold, which is immutable.
Our assets fall from 100 to 80, everyone else's fall to 50, and some fall to 20. We, whose assets fall from 100 to 80, become relatively richer compared to everyone else. To navigate today's volatile financial landscape , one must look beyond superficial profits and recognize systemic monetary erosion.
Owning paper currency constantly erodes purchasing power as central banks endlessly increase the supply of fiat money. The lack of protection against structural depreciation exposes personal capital to devastating losses in real returns. Marc Faber, legendary Swiss economist, ," argues that physical gold, silver, and platinum remain stable stores of value while fiat currencies collapse.
He predicts that overheated global asset markets will inevitably face sharp disappointments, leading to massive valuation declines in the equity and real estate sectors. Truly sustainable wealth accumulation strategies must look beyond short-term profit and prioritize long-term preservation of purchasing power to withstand future economic shocks.
Investors should maintain a disciplined defensive portfolio divided equally between stocks, real estate, and precious metals. Instead of recklessly chasing highs on momentum, securing sound tangible assets is the best protection against the limitless expansion of liquidity by central banks . If you fi.
A million Swiss francs or dollars at the time was a large sum of money in the 1970s. There used to be one or two billionaires in the world, but now there are thousands of them. If someone comes with a billion, they are rich, but they are a poor billionaire, because rich billionaires have 20, 30, 50, 100 billion, and soon a trillion.
This is, you know, people saying that the price of gold, silver, and platinum has gone up. Yes, relatively worthless paper money that is constantly depreciating. So, I could say that the price of gold is stable and the purchasing power of paper currencies is falling. In other words , the value of paper money decreases compared to gold, which is unchanged.
So, individually, in my opinion, and this is a personal opinion. Other people may disagree, but I believe people should have diversified assets. They should own stocks, real estate, cash, bonds, and precious metals, and, uh, the proportion of each asset is about 25%. Now, due to the rise in the value of precious metals , their share has increased, while the share of bonds has decreased , as they have shown poor results over the past 5 years, starting in 2020.
But the bond market hasn't become a disaster, because you get interest on them and all that. So, overall, everything was acceptable. In general, what worries me is that the prices of all assets are simply sky-high, very, very high. Real estate, you are, as I understand, Dutch. Yes. As you know, real estate prices in Amsterdam are very high.
I first came to Amsterdam in the 1970s because I worked as a broker and served Dutch institutions. I worked for an American brokerage company and was constantly running around Amsterdam to visit all these institutions. I rented a bike to get around because, you know, the traffic was terrible and everything was standing still , but at that time you could buy a beautiful house on the canal for like 300,000 euros or so .
The euro didn't exist yet, but in equivalent terms it was around 300,000, which was extremely cheap. And I always say: when I was young, people's salaries were relatively high compared to asset prices. Asset prices are currently skyrocketing and wages are relatively low. As a result, purchasing power decreased.
Young people today who are starting to work cannot buy a house in Amsterdam. This is impossible. This does not happen instantly . Because the collapse of the system can take very unpleasant forms. You know, governments can expropriate you and your property, they can seize, say, your gold or silver and so on.
They can do that. They've done this before. Most of my life, even though I studied economics, I never thought negative interest rates were possible. But it happened. And another thing: when I started working, I thought the system would break down faster. So I've been waiting for the crash for 40 years now.
I mean, I started working 55 years ago. I'm still waiting for that crash. Yes, and surprisingly, each time there were some major shocks, like the Japanese collapse after 1989. But what is surprising is that central banks printed money and simply "washed away" the problem. And every time they did that, if you look closely, some people benefited from each crisis because they became incredibly rich.
You know, BlackRock, because they were buying up real estate during the 2009-2010 crisis, they made very good money . Or they bought stocks and stuff . So, I think if you look back over the last 50 years, I started working in 1970 . It's amazing how rich people have become. This is truly impressive.
And just as striking is how little the professionals won . Let's say an ordinary doctor, an ordinary engineer, an ordinary worker, he earns more than he did 55 years ago, but not much more when adjusted for inflation. Do you understand? Yes. His salary increased, but the cost of living increased even more.
So, in real terms, his salary actually fell. Historical economic trends show how persistent currency depreciation systematically destroys housing affordability for younger generations of workers. Decades ago, professional salaries were relatively high compared to real estate prices, making it easy for ordinary workers to buy a home.
Today, endless injections of liquidity by central banks have sent stock and real estate valuations skyrocketing, while real wages, adjusted for inflation, remain flat. Whenever a major financial crisis occurs, the monetary authorities print trillions to wash away the problems, enriching asset owners at the expense of average households.
Further money printing is predicted to further erode purchasing power, leaving people on fixed incomes in increasing poverty. Surviving in these distorted market conditions requires prioritizing capital preservation over speculative risks. Now let's get back to the interview. In my profession, I write a newsletter.
I, in essence, have to predict the future. And yes, there were cases that I predicted and so on , and they allowed people to make money. And there were other times when I was wrong. So, you know, if I look back on it all, it's hard to say that I was more right than wrong, because maybe I was right one time when it mattered a lot, and I was wrong many times when it didn't matter.
But every reader or viewer has their own interpretation of what I say. But in principle , I would be wary of anyone who predicts the future, because we do n't know. And this is a topic I firmly believe in after much work. I saw the rise of China and wrote the book " Tomorrow's Gold , Asia's Age of Discovery ." That was 25 years ago, and as you know, China has grown significantly, as has India.
Every country that was communist and became capitalist has grown and flourished because the worst thing anyone can experience is socialism. This is the worst, but young people in Europe, they all want socialism because they have never experienced the disaster it brings. But in any case, we don't know what the world will look like in 5 years.
My impression is that asset values will disappoint because everyone thinks stocks will go up, real estate will go up, and that and gold will go up. I have a different opinion. I think a lot of assets are going to fall in price, but you see, you, me, and 10 of our friends—we each have 100, and then asset prices go up.
So some of us might have our assets go from 100 to 200 , while others might only go to, say, 110. So the people whose assets went from 100 to 110 are relatively poorer than the people whose assets went from 100 to 200. You see? This is what has been happening for the last 50 years of asset inflation.
The 1% became richer, much richer, while the average worker, the average family became relatively poorer. Has nothing. Now, in a period when asset prices are falling, we all have 100. One of us, out of ten, will have his assets fall by 90%, and maybe five of us will lose 90%, and you and I , because we're so smart, we'll only lose 20%.
So , our assets fall from 100 to 80, and everyone else's fall to 50, and some fall to 20. We, whose assets fell from 100 to 80, become relatively richer compared to everyone else. And this is something people should think about. People always think about what will go up the most and what I want to buy, but you and I should be thinking about what will go down the least.
This is a different way of thinking: it's not what's growing, but what's falling and what's falling the least. In my opinion, this is what we should invest in. Do you understand? This is a defensive strategy. I have enough money. The only thing I'm afraid of is losing everything. So I'm thinking about how I can save most of it .
How can I only lose 20%? It is very difficult to define inflation. I could say, uh, when stocks go up, when real estate prices go up , when stamp prices go up, when my book collection goes up—that's a symptom of inflation. But investors call it a "bull" market. When the prices of cheese, butter, milk, beef, pork, wheat, and corn rise, they call it inflation.
But it's the same thing . This is a rise in prices due to monetary policy. So, in some cases, we have to distinguish: is the price increase beneficial to you and me, or is it disadvantageous to the middle-class family? When prices for goods and insurance policies increase, it is not profitable. But for you and me as shareholders, if we own shares of insurance companies and premiums increase, it is beneficial because profits increase.
So, you know, it's very difficult to say whether inflation is bad or good. For some people it is very bad, and for others it is good. I know who usually benefits from financial crises and inflation . I know these people, but I don't want to talk about it. Understanding the true mechanisms of inflation requires distinguishing between consumer price inflation and general asset inflation.
When stocks, real estate, and collectibles skyrocket, market participants celebrate a “bull” market. However, such price increases are fundamentally a major symptom of excessive money creation. Caused by the same monetary policy. A critical view often ignored in the financial media is that to truly protect long-term wealth during major economic downturns, market valuations are projected to suffer severe declines, with average portfolios potentially falling by 50–90%.
In such extreme market turmoil, adopting a purely defensive investment approach becomes essential for survival. An investor who limits capital drawdowns to just 20% actually becomes significantly richer on a relative scale than those who experience a massive market crash. Ultimately, investing in stable assets that fall the least ensures long-term financial stability. If this was valuable .
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