원문 보기
My view, all all ways, all roads lead to some financial crisis, to a shock. But, it's difficult to tell will the shock occur tomorrow or the day after. My sense is that the shock has begun already because the most popular stocks and the most popular sector, say semiconductors and AI-related stocks, they haven't performed well recently.
I believe that precious metals in the crash I [clears throat] envision will also go down. But, you understand, you and I, we own precious metals. They go down 30% or Other people will lose everything. So, relatively speaking, we'll we'll become richer. Global financial markets are rapidly approaching an inevitable systemic shock as major speculative momentum sectors run out of steam.
The underlying warning signals confirm that this structural breakdown is not a distant concern, but a process actively unfolding. Marc Faber, legendary Swiss contrarian investor and editor of the Gloom, Boom, and Doom Report, observes that every current economic path converges toward a severe financial shock.
Speculative market leadership across artificial intelligence and semiconductor stocks has fractured since topping months ago, leaving broad market participation exceptionally weak. When this unfolding downturn strikes, Faber projects that precious metals will initially plunge by 30% to 40% alongside collapsing equity markets.
However, physical gold and silver investors are predicted to emerge far richer in relative terms as conventional stock market participants face total capital destruction. Now, we present the clips from Marc ; When the bubble burst in 1973 and stocks in the US entered a severe bear market 73-74, uh the debt to GDP was very low because uh the government hadn't borrowed.
They actually had paid back debts in the '50s. So, uh the debt to GDP after the Second World War declined. But, after the '80s, especially after the deficits of Mr. Reagan, the debt to GDP increased dramatically. And now we have a gigantic debt to GDP. Exactly how much it is, nobody knows, but it's similar to the global stock market capitalization, also around 300%.
And that absorbs a lot of the economy because the interest have to be paid, and the interest can only be paid if other activities shrink. So, in principle, a government fiscal deficit should be deflationary, reduce demand. But, that's not the case because the central banks finance these deficits. And uh you have the deficits arise because of uh or inflation goes up because the deficits go up, and the deficits uh go up because the central bank finances the deficits.
If the central bank wouldn't finance the deficits, then the the government debt wouldn't grow go up this much. In my view, all ways all roads lead to some financial crisis due to shock. But, it's difficult to tell will the shock occur tomorrow or the day after. My sense is that the shock has begun already because the most popular stocks and the most popular sector, say semiconductors and AI related stocks, they haven't performed well recently.
They peaked out in May and we're now essentially in September. So, we're 3 months past the peak, and some stocks are still going up that I admit, but the majority of stocks is no longer going up. If you look at the list of new highs and new lows, the new high list is very small. There's a very limited number of stocks making new highs.
The majority of stocks is not performing particularly well. So, And I mean, I'm not a buyer, an enthusiastic buyer of bonds, but today, for instance, Bangkok Bank issued bonds 5 years at around 5% per annum in dollars. Well, I think it's not so bad. A return of 5% per annum at the present time because in other things I believe that you'll lose more money.
I don't [clears throat] think 5% per annum is a high return, but it's better than to lose money. Last 40 years were fantastic years in terms of asset inflation or in terms of asset bull markets. The bull market is essentially a symptom of inflation, and it is a symptom of inflation that makes people happy, whereas price increases in the supermarket are a symptom of inflation that makes people unhappy.
Global debt to GDP ratios now stand near an astounding 300% matching the bloated scale of global equity capitalization. Servicing this gigantic debt load absorbs productive capital trapping central banks in continuous deficit monetization. While heavy government debt theoretically suppresses demand and drives deflation, persistent central bank financing actively accelerates currency dilution.
Monetary authorities are locked into funding national obligations while balancing fragile credit markets. In this unstable environment, capital preservation takes precedence over chasing yield. Holding 5-year dollar bonds paying a steady 5% annual return provides a far safer shelter than suffering substantial losses across vulnerable financial assets.
Now, let's get back to the interview. And the Trump and Bessant are the ideal kind of when you look at history, that's clown-like people, buffoons, and they are the perfect people to bring about a crisis, a major crisis, because of their interventions. How the crisis or the shock will look like is unknown.
Will we have hyperinflation before it happens, or will we have the shock, and then the reaction would be of governments, including the US government and worse, to print money to solve the crisis or kind of reduce the pain of the crisis. The problem, as you know, with money printing, and that I said when they started to do in to implement the policies of quantitative easing in December 2008, my argument was once you start printing money, once you start financing economic growth through deficits, it's next to impossible to stop it without inflicting significant pain on the economy.
And since in democracies, no politician gets elected if he tells people, "Oh, you know, you have to tighten your belts and it's going to be 5 years of painful eco- economy, but we have to solve the problems." Nobody will vote for these politicians. They will vote for politicians who tell them, "Let's make America great again."
That happens. And then they print money and academically, I have a high opinion of Mr. Warsh. He's an accomplished economist. He's read the classical economist. He knows what he's talking about. But he's also now a politician and as an economist, he may want to implement some policies, but as a politician, he may not be able to implement these policies.
So, we'll have to see what happens. Now, the midterm elections are in November. I think it it will be difficult for him to increase short-term interest rates. I mean, the Fed funds rate between now and November. I believe that the dollar doesn't have a greater problem than other paper currencies. You understand?
I was always negative about the dollar, but I also said, "And this is my view, that the alternative, say the euro, the yen, and [clears throat] the Chinese RMB and so forth, they're all paper currencies. And it's difficult to make a case that these currencies would be significantly better than the US dollar.
Although I have to say that in some countries the debt level is not very high compared to the US and to European countries. But the weakness manifests itself, as you pointed out, in the price of precious metals. And I believe this year the commodities that are inexpensive relative to gold and silver and platinum are the agricultural commodities.
They're very cheap expressed in gold and oil. Oil is not very expensive at this level compared to say the level in 1970. It's gone up a lot, but as you know, the price level has gone up a lot. And the the cost to buy the house your grandfather lived in is also up compared to the price he paid at the time.
So, the problem is in an economic system once you print money, there are huge price distortions because not all prices, I mean, Copernicus already observed that. But the modern economists that sit in central banks, they don't know that. The problem is that prices go up, but they don't go up irregularly or at the same time and in the same intensity.
Uh the problem of the monetary inflation is that it boosts prices one day, or I mean, in a year, of say coffee and the next year of cocoa, and the next year of gold, and the next year of stocks, and the next of bonds, and real estate and so forth. And a lot of prices come down. That's why I'm sort of leaning that the crisis that is coming will be strongly asset deflationary because you can print money.
But despite of money printing, commercial properties in America, as you know, are in some cases down 80% from the peak in 2018. Because the world changes and a building was useful before, but I don't know where you sit. You don't sit in an office in the center of London. You can do your work through the internet, through Zoom, from your home, and you could be in the countryside.
Or in my case, I'm in the north of Thailand in a globally seen small city, which is the second largest city in Thailand, but is a the relatively small, and I can do my business as an investment advisor and managing money equally well than if I would sit in Hong Kong or Singapore or London or New York.
Continuous fiat currency printing sparks chaotic structural price distortions throughout the broader economic landscape. Because liquidity infusions never lift prices evenly across all sectors, capital rotates unpredictably through equities, real estate, and physical commodities. The damaging reality of this monetary distortion is already apparent in United States commercial real estate, where certain office properties have plummeted 80% from their prior highs as remote work and technological decentralization reshape operations.
Simultaneously, sovereign money creation undermines the purchasing power of every major fiat asset, meaning neither the US dollar, euro, yen, nor Chinese renminbi provide superior protection. In contrast, essential agricultural commodities and crude oil trade at deeply discounted levels when measured against physical gold.
As economic activity increasingly shifts away from congested financial capitals toward decentralized remote hubs, tangible resources remain fundamentally sound. Preserving wealth through this monetary environment requires recognizing that paper debt promises cannot replace real-world physical asse.
Comments 0