Global Depression By 2025, Caused By Double-Digit Interest Rates & Inflation | Simon Hunt

by the end of 2025 the long end of the interest rate curve which central banks cannot control will be rising the yields will be rising very sharply for instance we have 10-year treasuries yielding well over 10 percent that will result in in the highly leveraged parts of the global economy basically going bust which will lead us into the coming depression welcome to wealthyon I'm wealthy I'm founder Adam Taggart the last time today's guest expert was on this channel he predicted a rocky road ahead for the global economy one that will eventually culminate in the massive pile of trillions of dollars worth of global unserviceable debt going into default and thus causing a worldwide depression by 2025. since his last appearance the markets have become a lot more optimistic U.S GDP has perked up a bit and inflation has been marching downwards albeit more slowly than the central banks would like today we'll ask copper expert and macro analyst Simon hunt whether his dire forecast has improved at all or perhaps perhaps gotten even worse Simon thanks so much for joining us today all the way from Dubai that's right I appreciate you staying up late I know it's late there your time uh that's uh for you no problem at all you're such a gentleman all right look well let's let's bang through all this efficiently so that you can get to bed at a decent hour tonight um let's start with the question that I ask you to kick the discussions off every time you come on this channel Simon what's your current assessment of the global economy in financial markets I think we we have a false false Dawn I think that as we look out to 2025 2026 we will basically see three phases of uh ups and downs between now and the middle of the uh we will have a very large correction in global Equity Bond and commodity markets this will Force the fed and other central banks to is monetary policy produce a form of QE and rate stop will start falling that will result in a Resurgence of inflation particularly energy and food prices the dollar will start falling sharply with inflation Rising uh equity and commodity markets will surge to new highs by the end of 2025 but at the same time the long end of the interest rate curve which central banks cannot control will be rising the yields will be rising very sharply for instance we have 10-year treasuries yielding well over 10 percent that will result in in the highly leveraged parts of the global economy basically going bust which will lead us into the coming depression okay all right so um sounds like from the last time you were on the overall Arc still sort of Remains the Same where we have this short-term weakness that forces the hands of the central banks um their actions kind of goose asset prices um except they also dramatically Goose yields and basically it's the weight of of those higher yields on the over leveraged global system that basically kind of break everything and bring us into what you're calling a global depression with a D yeah correct I think that there is an additional factor that uh we have to add to the fragility of the global economic and financial structure and that is the War syndrome the war has been perceived by markets as something way out far away from America doesn't concern us etc etc but the war is going to probably by the middle of this year is going to take on a completely different posture which is basically whether it's whether you call it World War III I'm not sure though in my gut it's saying it's going to be World War III because what's what's at stake or Russia is the security of its borders which NATO members ever since 1991 have failed to keep their promises so and it's particularly relevant for Russia in an age of hypersonic technology whereby probably within two to three years America will have mastered that technology and will be in a position to locate Hypersonic missiles close to Russia's borders which would enable them to hit the big cities within three to four minutes for America what is at stake is really the breaking up of the growing Alliance that was taking place between Germany Russia and China had that progressed it would have led to the three countries controlling Eurasia which if you go back to 1904 to Halford mckinder's treatise he who controls the Heartland which is Eurasia controls the world so the first part of what's been taking place from America's point of view is the breakup of that Alliance which they've successfully done and is that um so what's interesting is this might be one of the first times that viewers are hearing of this sort of concept um I think everybody most people know that Russia and China have been cozing up to each other more of late and that the America's the West's response to the Russian invasion of Ukraine has probably only pushed them a little bit closer together but the fact that you're kind of pairing Germany in with those three may be new to a lot of viewers here so I guess two questions um one how long had the German component of that been in play leading up until recently and and I imagine the you think the destruction of the Nordstrom pipeline was to somehow you know separate Germany and Russia and was that an effective tactic yeah splintering that that relationship yes yes so how long so how long has that that triangular relationship been occurring was that the question yeah exactly I'm just not sure too many people at least I wasn't aware that Germany goes back a very long way I would say it goes back to when the Berlin Wall fell and I've forgotten the date but that's early early 1990s all right and so um obviously Germany and Russia were trading partners Germany was getting an increasing amount of its energy from Russia uh and is the theory that America started realizing oh my gosh if there's a component in Europe Russia and then China all working together they then control the the Heartland as you're saying here and that becomes a a block that we just that's too much power for us to it tips the scales of a global so basically it threatens uh America's hegemony would threaten the domination of the of the US dollar so you've got your two two sides deeply entrenched Russia because of the security of its borders and America the dollar hegemony because what's happening elsewhere in the world is a large part of the world has got fed up by being told what to do by America and what you're seeing is the enlargement of bricks Plus uh I believe today Egypt has formally announced that they have joined bricsplus we know that from both public statements and private conversations that the countries in the Gulf are going to join it we know for instance that Saudi Arabia has sold some oil to China which China paid for in RMB and with those RMB Saudi Arabia bought gold probably on the Shanghai Gold Exchange so in my view that was a test case does it work and the answer is probably yes I think gold is very Central to the brics plus equation I mean is to give another example [Music] the trade between Russia and China is growing exponentially with Russia holding a large Trade Surplus that trade surplus is held in a gold differential account with the pboc yeah so what what the um Russian Economist who is running the financial side of brics plus developing their new trade and currency platforms what's now going to happen is that member countries can trade within themselves or even externally eventually on a currency that's based on 20 commodities that they produce but valued not in U.S dollars but in grams of gold okay and and you've mentioned this the previous times you've been on the program as have um analysts like monetary analysts like Aleister McLeod who I know that you're in communication with um so it sounds like they're already kind of piloting this in certain ways it's it's perhaps not not fully operational and maybe it's not backed by all 20 Commodities yet and whatnot but they're already doing some some uh currency currency trade outside of US dollars that is sort of resolved or at least backed by gold so you can see actually that when it comes to the gulf countries the same formula that China and Russia have formulated will probably be used when or fairly let's put it a different way when the gulf countries make the decision which will be a step-by-step approach to ditch the dollar and to use for that trade their trade other currencies than the dollar probably not other Fiat currencies and probably it will be as um Russia is holding a trade surplus in a different in a go differential account at the pbrc so the same will probably happen with the gulf countries okay and do we have a name for this new no not not yet yeah I just call it the new currency okay we'll we'll call it the new bricks plus currency just for the sake of this conversation and and I do want to move into um some you know from the sort of geopolitical into the economic in just a minute but Simon you are based in Dubai you are a commodity expert you've done trade with most of the countries that we're mentioning here so you have a real sort of practical Insider's view uh on really what the people in others those countries think um so you mentioned use the term ditch the dollar when when the bricks plus Coalition decides to ditch the dollar you tell me I'm assuming it's not going to be like one day a flip is Switched step by it'll be step by step right so so for a good while perhaps um we'll we'll sort of see competition in the world Reserve currency space right so it's not like the dollar is necessarily going to lose all its trade business with these countries overnight but they'll just progressively do less and less in dollars and more and more in the brics currency until there will come a point when it could be literally a ditch and I think that depends upon what happens in the War syndrome all right so back to the war so one quick question there so if if the Nordstrom pipeline was sabotaged to basically um break the ties between Germany and Russia um it sounds like you said that that was pretty effective um you know there's been a lot of recent allegations the Seymour Hersh article um you know basically saying look the U.S did it and here are all the details and I think that if you look at the the list of suspects even before the Hersh article came out U.S was probably near the top um I'm just curious you know the risk there is that it could backfire where Germany could say Hey you know you just intervened in a you know our national sovereignty and and you know could create a backlash against the U.S Germany ties I don't necessarily see that that's happened but I'm not a geopolitical analyst here um what do you see as the Fallout well I I think let's put it this way I think there is not immediately but over the next couple of years I think there's a real risk that will have a change of government in Germany that [Music] um the German industrialists will have a larger say in the formation of policy and that they where has where where do they see growth over the next 10 20 years not westwards but eastwards and I think you can well see that Germany will rebuild that alliance with Russia and China depending of course on how the how the war ends and then you have to ask the question does that then mean that they join brics Plus I was going to say would you have a germexic you know would Germany break out of the EU that's another question I think it leads to the breakup on the EU I think it's a huge risk that that will happen foreign I think we could have even debated that the the sustainability of the EU as a political and certainly as a monetary structure separate the whole War issue um but obviously you you throw a lot more into the mix when you have this this new triangle you're talking about absolutely the war the war is causing this rethinking okay well look um this is super fascinating in in German right I mean you're saying look the war is is really going to drive a lot of decision making about what happens yeah absolutely yeah the war sits out the war sits over everything else you have a fragile Financial world and then on top of that you've got the war and the war is not going to end tomorrow right and and even even if it does you know let's let's presume for a moment it doesn't escalate further from here and that hopefully at some point there's some peacefully negotiated settlement um it has sort of divided the world into this much more of a a bipolar scenario yes right um so so now it's it's Team America right America and its Western bodies and it's sort of bricks plus which is what you're talking about here correct let's say that that does continue to be the way the world Works going forward and and this bricks plus Coalition really does gel and they create this this new currency that you've mentioned um that is sort of underpinned by gold I mean 20 Commodities but but gold is what it's being priced in what does that do to the price of gold from here like what's your outlook on on gold positive what what is going to be the price who knows but um I think over the next two years we'll see three thousand dollars um don't forget that the Chinese public own approximately 23 000 tons of gold which they have bought off the Shanghai gold exchange since its formation and that probably a Chinese government owns another to my Mass 30 odd thousand tons mostly held in different Ministries including the pla and in fact to um give a little insight into that I used to have a very close Japanese business friend it was company got about 40 percent its revenues from China and as he said to me over lunch I have to know very many different people in China one of whom is a senior General who invited me down to drinks at headquarters four o'clock in the afternoon two hours later he tapped me on the shoulder and said let's walk across the compound which we did and we came to this huge Warehouse and when the doors were opened my jaws dropped because they are stacked from floor to ceiling were bars of gold just to show you that it's not just the central bank that owns the gold in China and on the same note Russia's real Holdings of gold are not what's being held by its Central Bank but by the company that controls the central bank and their total gold Holdings are around 12 000 tons okay so we're we're putting all that together China plus Russia that's almost like seventy five thousand tons of gold yes something like that yeah something like that yeah which is Broad numbers which I believe and I'm doing this from memory but that that is much higher I believe than sort of what's reported in terms of sovereign yeah um so it's sort of like um I'm going to make a bad analogy here um the old Star Wars movies um the the empire was building this death star that nobody knew about until it was actually fully operational and they sort of sprung it on on the Galaxy you're sort of saying in some ways you know there's all this work behind the scenes to create the system that's backed by goal but they're not going to let anybody know about it until bang it's it's there yes yeah and you get you'll get to the Big Bang as it were in a step-by-step approach by countries trading between themselves outside the dollar and in fact which you said we're already beginning to see and very prominently Saudi Arabia now with Egypt now with Egypt they will be able to tap into the brics bank which I've forgotten the name and that bank will allow them to trade without the dollar so this is a huge benefit to Egypt it doesn't have to build a reserve of dollars to finance his Imports that's going to happen right across brics Plus all right and then to murder to murder my analogies here um so in Star Wars the second movie was The Empire Strikes Back right um you know Team America is is probably not just gonna let this happen lying down you know sort of seeding its its dominance as the right now you know pretty much only World preserve currency what tactics do you expect from the west from Team America to try to throw sand in the gears of this new bricks plus currency I have to say whoa okay so it's it's saber-rattling you know incredible yeah I mean look look at America's just negotiated four additional military bases in the Philippines um I hear that um America is deploying more troops to Japan and Guam there is this continuous encirclement you've got uh one of the top Pentagon guys now in type in now in Taipei or on his way there uh you had the other day the American Embassy in Moscow advising all Americans to leave Russia you had today at the Putin's annual speech saying that we are temporarily withdrawing from the new start treaty and that we have placed ground-based strategic missiles nuclear weapons on combat Duty it's all hotting up whether it's going to lead to anything who knows but it's that all one can say is the tensions are going to increase okay that's going to have a huge impact on monetary policy uh okay let's use that as the bridge to get to the macro side of things um so when you say huge impact on monetary policy any particular um manifestation that you're you're you have in mind when you say that yeah you go from QT to QE in some form or another interest rates will start falling inflation then takes off um Energy prices will you probably see some further Supply disruptions plus the fact that OPEC is no longer going to do the bidding of America and Europe but will follow policies that reflect the real Supply demand situation plus we're bound to get some Supply disruptions so we have oil prices this year probably at 150 before the end of the year and between 150 and 200 next year food prices will also be soaring um not only because of the war but because of uh weather patterns in particular there is a risk that either this year or next year that the 89-year glesberg cycle hits again and 89 years ago because the American Midwest Dust Bowl decade so there are many reasons for seeing that in the drop in inflation is very transitory and that you by the time we get into 2025 probably the uscpi despite all the manipulations that are and have been taking place will probably be higher than the 1980 peak of 13 and a half percent okay so um so you're saying you're saying hey if um if you didn't like the inflation we saw you know 2021 through 2022 uh you ain't seen nothing yet that's right that's exactly what you saw in the 1970s and the early 1980s you had the first wave and then by the time you got into 78 79 and 80 you got the second wave which was the destructive wave right and of course events these days speed up you're not going to wait for four or five years right what's interesting is is you know chairman Powell and Christine Lagarde at the ECB and many other Central Bank heads are saying well we're not going to repeat those those sins of the 70s we're going to be super committed we're going to be super Resolute you're thinking nope they're gonna they're gonna fold here um because of the large correction and I guess recession the global recession with an r that we'll see this year yeah correct correct okay um and obviously that all the words too many too many dead bodies lying around the financial system okay so that that's the something two important breaks they have to step in to rescue they do inflation then you know goes Off to the Races uh ultimately racing up above 13 and a half percent uh you know you're making some bold calls that aren't that far away you know 200 oil uh you know food shortages perhaps uh so things just get more expensive more scarce um and I guess and I guess this is the question ahead for you is the central banks will be easing so they'll be pushing down the short term yields correct uh on sovereign debt but because of all the instability I I imagine um that's when the bond market kind of gives up loses faith in the central planners and says look inflation's going Off to the Races the system's getting a lot more stable yeah give me higher yields to compensate and that's what actually breaks everything absolutely that's why by 2026 and probably 2025 we have U.S treasuries 10-year treasuries yielding over 10 percent okay so we go from Global recession later this year you're calling for to Central Bank the Great Central Bank re-inflation uh rescue re-inflation that that that doesn't really rescue the system and then that topples over into the global depression that you see arriving by 2025 2026 yeah yeah okay probably 2025 might even be the end of 2024. so I'm curious Simon because I've now had you on a couple of times you know roughly six months ago and then six months before that uh now that you're here down the timeline a bit are are you uh do you find yourself pushing the timeline off a little bit for all this or pulling it in it sounds to me like you're pulling it into me a little bit Yeah if anything pulling it in a bit okay and I think that's a function of War got it got it um which was the new Element last time you and I talked and of course as you predicted then it wasn't going to blow over quickly and it certainly hasn't um all right let's see here uh what haven't we talked about yeah we did almost everything on here uh uh I guess in the short term you've said you expect the US dollar to like drop down to kiss 100 then go back up to about 110 by mid-year yeah but then then it begins its long-term decline is that sort of still your outlook yeah and I think the the the the the the the the the the recovery to 110 is probably a function of the wall becoming much yeah sir and you get a rush of typical Rush of buying out of other currencies into the dollar it's a crisis trade people are just fearful supposedly Safe Haven supposedly okay um and of course that has you know a dollar big dollar moves have big repercussions um we saw that a lot last year um you from a from an investor standpoint um maybe let's trundle over here now so you know what do you think will happen to the markets in all of this and uh having listened to you and having read some of your recent Works um it sounds like you think in the very near term um so we've got very near term s p could could Spike here while the markets are still probably more optimistic than they should be given everything you've just mentioned get a size maybe 4 300 you then expect it to get knocked down with the arrival of the recession and everything we've mentioned to about 3000 by mid-2023 correct all right correct um and then it sounds like you think it'll hit new highs which would also mean Commodities as well Commodities as well yes mid-year kind of everything gets big people in equity markets will shake out the week holders got it got it and presumably kind of everything would go down right equities bonds would go down um except maybe for for treasuries long-term treasuries that might that might be the safety trade yeah yeah right Commodities will go down like you said so that that gets us to the arrival of the recession part of of 2023. then we have the re-inflation rescue it sounds like you I think I heard you say that that stocks and commodities will hit new highs during that period probably because of all the liquidity correct all right but then basically in in very broad numbers the s p will double in value by 2026 okay we'll go from say 6500 to 14 000. or we will be spoken about yep so when we get to so um that surprises me only slightly where I thought you would have thought that they would have had some massive high like that like a doubling but then would have rolled over when the Depression hit are they just that high in 2026 because the the dollar has been so weakened at that point well if you take the metals industry or take copper as an example what we what we have seen and are still seeing is inventories of everything components products um copper itself being depleted because of order books so the recovery comes in so they replenish those order books and with the dollar falling inflation Rising they will then add to their normal inventories and that is a huge shift this is some massive shift anything from half a million tons to seven to seven eight hundred thousand tons as the same for all the metals so that's why the the recovery plus inflation will have such a dramatic impact on the metals industry okay and I understand that I'm thinking about just sort of General equities still remaining up at a doubling by the the global depression and I guess the reason I'm harping on this is people who are you know saying okay Simon's Arc makes sense to me oh well if he thinks that the stock market's going to double and hang out there maybe that's a place where I'll keep my money I don't necessarily think you're saying that but correct me if I'm wrong I think we have the correction and in the correction that is the time when you reinvest your money okay and so let me just what you're saying is a lot of people will say well if it's going to double even if it goes down to 3 000 I will still hold on I think it's it's getting I mean I'm not an equity expert but yeah you get some who say that and others who get shaken out yeah well let me ask this question one different way which is we have the the rescue reflation right which picks the s p up and we're we're just totally prognosticating here so we'll have you back on long before to clarify but we go from we get knocked down to 3 000 over the next couple years goes up to 6 000 right yeah when the depression hits do you see the markets coming down oh crap because of that crashing crashing okay good that's all I wanted to know okay so you do expect a market crash sort of by the end of 2026 or someplace like that so the recovery over the next two years should be used to save you during the Depression great okay so that's your opportunity basically to yeah opportunity exactly right right the escalator before it turns into a falling elevator yeah don't be the last guy on the Dance Floor okay all right uh uh so let's see here um uh let's let's talk about this depression and we're getting near the end of the discussion here and I hate to I hate to end on on a depression but maybe maybe there's something after right so um we get this Global depression that you're you're forecasting and it's it's largely due at that point to um interest rates yields just being so high that are highly leveraged global economy and financial you know it's a hugely financialized economy now just breaks under it all right and it sends us uh obviously that's going to be a painful period for anybody going through it um is there a sunrise that happens after that yes on our work very much so first of all when the crash comes is probably the moment when brixplus introduced their new currency and trading platform always introduce these things in a period of Crisis crisis right hey there's an alternative folks jump on board yeah that's that but secondly what's the depression going to do is going to wash out the debt so we will then probably evolve a system which is much more Equity based and not debt based and then we we will see from our work both GD Global GDP has operated in about 40 year long Cycles we ended the last cycle in 2020 which was a negative 40-year period so we're going to go back into a positive 40-year period because it's first interrupted by the depression so Global GDP has averaged a growth rate of just under four percent since 1900. will reverse revert back to that sort of level after the Depression okay so um you know in many ways this is sort of the Austrian economists yeah it's a cleaning up process it's the cleansing cycle right all the malinvestment gets cleared yeah so I should have asked this earlier um and I'm going to tie this to another question in a second but this Brix plus currency that you've been mentioning you wouldn't call that a fiat currency would you no because it's gold-based okay so there are some controls on its expansion right it it it it yeah it's skills based yeah so um so we very well maybe so let me ask you this um the the team America the West's response over time maybe especially if we get this sort of collapse you're talking about is hey maybe we need to revert to a non-fiat based currency as well right yeah yeah yeah okay but I think that's what will happen okay um and so that that may you know will lead the pave the way for a more Equitable monetary system then the two two sides can come together because really what the the issue is to negotiate spheres of Interest between brics plus and the Western Alliance but until you've got all the nasties out of their systems by the war then they can come together to negotiate these fears of Interest right and just like markets like stability and predictability Global economies yeah do the same yeah right yeah and what sort of what I'm you know even thinking about here too is we can we can perhaps lay the you know good chunk of the reason for the over financialization of the current world economy is that we have all these debt-based Fiat monetary systems driving the world right now yeah right because because of the way these systems are structured that money is borrowed into existence just debt and credit be to have to multiply as these systems run yeah if we revert to something that that doesn't do that then we don't have to be doomed to the same Destiny exactly all right well Simon um it's as always just been fascinating uh to have you on for this conversation um we will continue to bring you back on to you know uh you know Chronicle for us where we are in this progression and if anything you know happens that changes your outlook one way or the other um beforehand please let me know we'll bring you on sooner um so your videos have been some of the most watched ones uh on wealthyon and its history here uh no no surprise why um for folks that have uh you know really enjoy your analysis and and maybe for folks this video might be the first time they're getting exposed to you um where can they go to follow you in your work yeah uh simon.com great and what will they find there there you'll find my website and they'll find we're starting a monthly newsletter um well priced um and they can access it on the website okay fantastic so uh when we edit this Simon we'll put up the URL uh to Simon simonddashtrunt.com yeah great and anyone who's interested can go there look at your newsletter um I get Simon's uh existing newsletter um actually multiple copies of it helped me put together the question list for this uh uh this video um highly highly recommended um all right Simon well look um again been just a honor pleasure um love to have you coming back on the channel here in the future um just in wrapping up for folks I want to mention a couple quick resources um one is don't forget that Wealthy on Spring conference is coming up next month on Saturday March 18th if you can't watch the event live don't worry replay videos of all the presentations and all the Q a sessions will be sent to everybody who registers to register and find out more about the event and to lock in the early bird price discount which is still in effect go to wealthyon.com conference and if you've enjoyed having Simon on this channel would like to see him come back on again in the future as well as other great minds like him please support this channel by hitting the like button and then clicking on the red subscribe button below as well as that little bell icon right next to it Simon thanks so much buddy it's been a pleasure well thank you very much always enjoyed it with you cheers everybody else thanks so much for a drink agreed all right take care cheers foreign

Channel: Wealthion

Views: 343,213

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Id: 1BZl0CpYtDQ

Length: 47min 17sec (2837 seconds)

Published: Tue Feb 28 2023