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I believe that precious metals are an important part of your assets, but I want to point out that during a general debt deflation, there is a collapse in asset prices and a write-off of debt. I expected this in the future, not knowing if it would happen tomorrow or in 5 years, but this debt deflation will happen , and then some assets will fall from 100 to zero.
Some will fall from 100 to negative values, and some will drop by 30%. So, if the general level of asset prices falls by, say, 80%, and you only fall by 30%, you will become relatively richer than others. So, I think you'll feel relatively good with gold. But not necessarily in absolute terms. Global financial markets are rapidly moving toward an unprecedented systemic collapse as excessive debt exhausts the monetary system.
The rapid rise in asset values has created a dangerous illusion of free stability in the global economy. Marc Faber, a prominent Swiss contrarian investor and editor of the report “Gloom, Boom, and Doom,” warns that blind faith in government institutions and central bank policies will lead to destruction.
Investors should take control of their balance sheets by owning distributed physical reserves of gold, silver, and platinum. A cycle of destructive debt deflation is predicted to engulf global markets, triggering a severe revaluation as defaulted debt obligations disappear and inflated asset prices collapse.
Even if central banks begin to aggressively print money, this intervention is not expected to prevent mass bankruptcies of corporations and institutions. During this catastrophic reset, most asset classes are expected to fall by 80%, while gold is expected to fall by only 30%. Therefore, disciplined investors in precious metals are projected to become significantly richer in relative purchasing power.
We will now show excerpts from an interview with Mark Faber. Before we continue the discussion, please like, subscribe to the channel, and click the bell. Thank you and enjoy watching. In 1981, the high for 10-year Treasury bonds was 15.84%. And I remember how we placed money on deposits at 22% in Asia.
Interest rates could be 90%, but monetary policy still remained loose because inflation was at 100-110%. So, people mistakenly believe that the Fed and other central banks have tightened monetary policy by raising interest rates. In fact, monetary policy is not tight. There is still plenty of liquidity.
That's why Bitcoin was worth over 100,000. Liquidity is everywhere. But one day this liquidity will disappear. My opinion is that liquidity will be forced out by market action. Let's say, if cryptocurrencies fall , if the real estate market collapses, if the Dow Jones or S&P fall by 20%, I'll tell you, liquidity will become scarce.
I have been urging investors for the past 40 years not to trust governments and not to trust central bankers . And I've always argued that you should be your own central bank and have your own reserves of gold, silver, and platinum. This is my opinion. Other people do not share this view. And they say that Generation Z likes Bitcoin , cryptocurrencies, tokens and all that stuff .
In my opinion, precious metals are an important part of your assets, but I want to point out: during a general debt deflation, which occurs when there is a general collapse in asset prices, debts are canceled. This is what I expect in the future, but I don't know if this deflation will happen tomorrow or in 5 years.
Then some assets will fall from a hundred to zero. Some will fall from a hundred to negative values. And some will fall by 30%. So if the general level of asset prices falls by, say, 80%, and yours only by 30%, you will be relatively richer than others. So, I think you'll feel relatively good with gold, relatively.
But not necessarily in absolute terms. I believe that the likelihood that governments will start printing money before a collapse is very high. But that may not help. You know, printed money and commercial real estate...In America, commercial real estate has fallen by 80%. I know companies that went bankrupt even though they printed money.
They went bankrupt. Trust gold, but I'm not necessarily saying it will increase in value. I mean, I own gold because I think it will perform relatively well. But asset price inflation has turned into a giant bubble. Everything is overblown, and I think that sooner or later it will have to be deflated, and it will be a very painful process, and what the outcome will be , I don't know, just as I don't know the outcome of a war between Iran and America, but it won't be very favorable, in my opinion.
The widespread belief that central banks have implemented tight monetary policy remains a complete misconception. Massive speculative liquidity continues to saturate the global economy, as evidenced by the rapid rise in cryptocurrency valuations and inflated asset prices. However, this artificial liquidity quickly disappears when asset markets experience real stress—whether through a sharp drop in commercial real estate, a token collapse, or a major stock market correction.
The situation is made worse by this systemic burden of unsustainable public debt. Because high interest rates significantly increase the cost of debt service , governments are forced to print huge amounts of money just to cover interest obligations, which directly stimulates long-term inflation. Under severe fiscal pressure, sovereigns face real risks of default on external debts, which threatens large-scale disruptions in international capital markets and causes capital flight from the US dollar .
Now let's get back to the interview. They could, in effect, declare default. This, in my opinion, is quite likely under Trump, because if the debt becomes painfully unsustainable, I wouldn't rule out that Mr. Trump will say, "Okay, we don't pay interest on the debt to foreigners." This is quite possible.
I think the consequences would be catastrophic, but it's possible. You can imagine how the market will react. I don't think he'll react very favorably. Yes. Well, then the dollar will depreciate. I think so, of course. I think so, and I think people will reconsider their investments in the US . And since these investments, both in stocks and bonds, are at record levels, this will affect the American capital market.
But I'm not sure what the reaction will be. Well, Mr. Trump has declared default multiple times in his life. That's why I say that under the clown duo of Trump and Pence, the probability of default has increased. I'm not saying it will happen. I do n't know. But I can say that the level of debt is now painful, not only in the US or other countries, because interest rates are no longer falling, but rising.
Governments can try to keep interest rates below inflation so that the pain is not too obvious. But it is painful in the sense that money has to be printed to finance deficits caused by interest payments on the debt, and this leads not to a decrease, but to an increase in the level of inflation. The market economy provides signals.
It gives signals to the businessman: the market indicates where opportunities arise and where prices are low. It gives signals about where the price level is high. In addition, there are economic statistics, such as housing starts, and income statistics about how much people earn and who earns the money— rich or poor, and so on.
In general, I can say that rising interest rates are negative for most people, especially the poor, because they have loans. So, the cost of their borrowing increases. This is why in most countries we can observe that the real estate market is no longer growing, but falling. But I want to give an example because I am an economist and also an asset owner.
Higher interest rates are , of course, beneficial to me because I own assets. Additionally, I hold cash and bonds in my investment portfolio. So when rates went up, instead of zero cost of money like in 2020 and before, I now get 5% or 4.5%. So, my financial situation improved without any effort. You may object: " Mark, you have a higher rate, but the cost of living has increased by 4-5%." To this I would reply, "Yes, that's true, but the value of my assets is also increasing." So overall, I'm telling you that higher interest rates have so far benefited mostly asset owners.
Of course, there will come a point where higher rates... let's say someone comes to me and says, "Here you have $10 million, you can buy the S& P 500, emerging market stocks , or 10- year Treasury bonds." Their yield now is, let's say, 5%. What will you choose? Do you understand? In the current environment, I realize that people think they should earn 10% per day, not 5% per year, because all representatives of Generation Z are smart people of this world who, thanks to speculation, sports betting and investments in Micron, Nvidia, Tesla and SpaceX, will definitely get rich.
In this world, 5% is nothing, but in my world with more modest expectations, 5% per annum on all assets is a very high return. This provides me with cash flow, and if interest rates continue to rise, next year I might be able to invest it at 6%, and so on. So, you understand that at some point, rising rates will hurt the stock market.
Three months ago, I wrote a report indicating that I was seeing symptoms in the market that were typical of a period near or at the peak of the market. In other words , I expect that we have already seen the peak of the US stock market . Rapidly rising interest rates are creating deep economic distortions across the financial landscape.
For indebted households and average consumers, the high cost of borrowing creates serious financial pressure that is steadily dampening activity in the residential and commercial real estate markets. Instead, disciplined investors holding significant positions in cash and bonds benefit directly from these rates , providing a reliable 4–5% return without undue risk.
The younger generation of market participants often ignores stable 5% annual returns, choosing instead risky sports betting, speculative digital tokens, and leveraged tech giant stocks . However, within a sound macro strategy, generating reliable income provides a stable cash flow that can be systematically reinvested when rates rise.
Ultimately, the cumulative pressure of higher interest rates inevitably limits corporate profits and weakens market momentum. Clear cyclical signals indicate that the domestic stock market has reached its overheated peak point. Capital preservation and yield security will always trump speculative bets as market valuations normalize.
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