Simon Hunt: global financial collapse by 2025, BRICS+ to launch new currency

foreign [Music] welcome back to small caps ladies and gentlemen My Name is Kerry Stevenson and today I have the great pleasure of talking with Simon hunt now Simon Hunt is an economist he's also one of the foremost experts in the copper industry he's been over 50 years in the copper industry currently residing in Dubai he is a yorkshireman by background so he tells it like it is but one of the things that he has is a very strong outlook on the uh global economy what's going on the trillions of dollars in debt that is out there there is a good chance that this unserviceable debt will go into default Simon also says that 2025 is going to be a very interesting time for the world for the economy so of our assignment to come on and give us an Outlook in his views on what's going on out there we're going to talk about all sorts of things so sit up get yourself a cup of tea and uh let's have a chat Simon thank you so much for joining me here on Sports I would say not a cup of tea I'd say a glass of whiskey oh well done he's a Yorkshire there you go he's the auction tells it how it is bit early for whiskey I'm not a whiskey girl I'm a I'm a wine or a champagne but yes a good whiskey um Simon let's start off um because this is the first time you and I have had a chat um tell me why you're in Dubai well I came here by accident I got so fed up with all the restrictions in the UK in December 2020 I needed a three-week holiday on two conditions hot weather and where I could play tennis so I went on to the Marriott website and saw this lovely looking place uh Resort in a place I'd never heard of before called fujera which is a province of the UAE so having been there for a week here at Boris Johnson locked everybody out and uh I then asked myself do I really want to go back to the UK I said no so here I am in Dubai well it's definitely hot and they do like tennis over there but Simon I've been having a look at some of your thoughts recently and you've got some fairly strong views on where we are at the moment and right now I'm all I'm seeing is a lot of confusion from our audience out there as to I guess how to protect their wealth but also what what the heck is going on so what is the question what what's going on with the world economy right now you said we have unserviceable levels of debt that we could go into default do you think that's possible or will they just keep Printing and kicking the can down the road uh um it is a most likely outcome in fact um what we have is um the end of last year total Global debt was 390 odd trillion trillion dollars versus a GDP last year of 102 trillion uh we have had um a decade of in real terms basically negative interest rates what does that do it uh it creates a lot of speculation it creates greed and now with uh the FED followed by other Western central banks having decided that they already had made very big mistakes and they better do something about bringing interest rates up to a real level problem is that as as we have seen in a highly leveraged system where you go from rates basically a real rates basically zero to nominal rates at three four percent and in some cases where you're in in in in [Music] sectors like the construction industry you're probably paying seven to eight percent all of a sudden what you felt was uh was going to be zero rates forever no longer exists and that causes huge issues the second issue is that the banks from 2020 onwards loaded themselves with this supposedly safe stuff government bonds yielding practically nothing and now the government bonds are yielding something and the prices have gone down so globally something like 800 850 billion uh if the prices were marked to market the banks would have lost that amount of money so you've got a highly fragile global system and the question is um the real question is where are rates going to go because that's is going to determine everything when the next round of bank failures and uh credit crises are going to occur well we we think that probably a 10-year treasuries they're healing something like got an exact figure something like 3.2 3.3 it will probably be yielding five percent by the middle of this year so that that's not in the market the market is saying oh yields are falling great but this is rare view forecasting it's not looking not looking at where the car is traveling down the road so five percent is going to cause and that should happen around the middle of the year that's going to cause the next wave of crises quite what they're going to be who knows but there's no question there'll be crises so with rates rising and actually real money supply which had a pickup in the first quarter as is now going negative again that tells you something that uh where is global business going to go it's going to go downhill negative real negative real money supply and Rising interest rates it's going to lead into a recession and in the United States people Point towards [Music] um the strong employment data but actually if you look at the forward indicators so it's it's it's got very weak so um recession is going to be around the corner um at the same time around the middle of the year the war in the Ukraine will intensify with a big big risk that it actually goes over the borders of Ukraine I think this is a huge risk and then you've got uh growing in this part of the world um your intentions between Israel and Iran nothing new but Iran has stated that they've got enriched uranium to over 90 percent which brings them close to having a bomb you've got huge domestic problems political problems in Iran the United States and Israel have been conducting um simulation attacks on Iran now that was a month or so ago so I I think I mean this is not a forecast it's one of the risks that we have to watch very carefully this is a big big risk that um Israel will attack Iran problem is that Iran is fully prepared for this they have acquired the latest anti-ship missiles from Russia and China brought into my local sources they're actually chosen the two super tankers to sink in the narrow part of the channel to prevent any shipping going in or out wow and if that I mean this is a risk it's not a forecast yeah yeah I understand something we have to watch carefully and if that happens you're going to blow up the global derivative Market think think of the Strategic alliances that Iran has developed with China and Russia so if you attack Iran you are attacking China and Russia there there seems to me uh because this leads into sort of the bricks and the bricks plus Nations there seems to to me that there's a shift away from US dollar as a reserve currency and that you know you mentioned in Iran you're attacking China and Russia well there's a group of countries getting together from looks of it to say we've had enough and maybe the distraction is war but the ultimate result is a complete reworking of the global economy correct how how much do you think that that that's a possibility I would like to say 100 but nothing is a hundred percent but put the odds that say 90 percent it's happening it's evolving people are not recognizing it uh you you've um you've had the Iranian president in in Moscow you've had the reproach more uh orchestrated by Beijing between Saudi and Iran uh you've got um Assad from Syria being brought into the the Arab fold again uh you've got Qatar is being brought in as well um turkey's being brought in um it's I mean behind the scenes there is an awful lot going on as I mentioned you before you started recording that the president this year of bricks is the president of South Africa so don't tell me the some African countries are not going to join bricks um we know that um the gulf countries have indicated a willingness to join um you've got uh Lulu back as president of Brazil he is a very active always has been a very active supporter of bricks you have the ex Finance Minister Brazil now is the president of the brics Development Bank um you have India and Russia doing huge oil and other trade deals together without the Dollar by the way uh the UAE currency the Dirham has been used in that those transactions um you have had Saudi Arabia selling a tanker or two of oil to China receiving RMB what did they do with the RMB they bought gold on the Shanghai Gold Exchange yeah you had the UAE selling 65 that no 62 000 tons of LNG to China receiving RMB what they did with the r b i don't know but I would guess the same thing by go through the Shanghai Gold Exchange the big deal has been between Russia and China Russia has a very large Trade Surplus with China uh for the sale of energy and and wrong other raw materials what are they doing with the Surplus it's held in a gold differential account in the pboc and probably that is the template of um what will happen between China and the GCC countries so gold is has already come back as a medium of Exchange and if you're going back to Bricks the original plan drawn up by the Russian economists who is in charge of developing the new currency originally it was going to be a combination of the weighted average of member currencies and uh the value of the Commodities that members produce but valued not in dollars but in Gold but there are more recent indications that they're going to make it much simpler the ruble and the one will be convertible into gold bang wow Bang what does that do for the US dollar I could answer in a very simple Yorkshire manner but I don't know you're allowed to do that Simon no um by say 2026 2027 the dollar Index will have harmed in value making it no longer will it will it still be the world's Reserve currency or is this Movement by the brics Nations and the Russians the China's Etc really making it a lot less relevant on the global stage correct uh neither Russian or China want their currencies to be the reserve currency their whole philosophy is a multi-national environment so here you will trade um in a con in in a gold convertible currency or you will trade within your own currencies without going through the dollar why go through the dollar um I mean interestingly what's Ghana done Ghana has a lot of gold and Ghana needs to import so instead of having to build a dollar Reserve to pay for its oil imports if you want we want oil we give you gold well so this is like a I I don't want to call it a virus but it feels almost like it like if it's starting to spread and I'm talking to you in April 2023 this is how it feels like it's a snowball going down the hill picking up speed rapidly it is um I mean we've got built into our forecast that essentially the Global Financial system will collapse in 2025. that's a massive statement there Simon um when you say collapse can you expand on that a little bit yeah you'll have by by then you'll have long term 10-year treasuries yielding over 10 percent what is that going to do to a highly leveraged Global Financial system put it into default yeah that needs to that that's what will lead to depression and in the depression a the bricks will come out with their new currency and be uh the Western countries will come up with a digital currency which is just as worthless this is a paper currency but in digital form yeah the rest of the world because the brics countries within five years maybe within two years the way the pace which this is going is really going to cover the bulk of the world's commodity markets right um so if you turn on its head secretaries treasury secretary Connelly's remark decades ago the dollar is your problem the bricks are now then going to say Commodities are your problem and you need them yeah so those with them those are the most toys win in other words if you have Commodities now I'm talking to you from Australia we have we're a resource-rich country so are you saying that countries that are resource Rich that can pay for goods and services with resources will get through this global collapse well except the the prices of the Commodities are going to collapse too oh okay oh yeah maybe you take copper uh we've got a short-term correction down to about six thousand five hundred dollars but with the by the Autumn with the fed and other central banks looking at failures within the financial system War over Ukraine intensifying other hot spots uh the dollar starting to fall sharply they're going to turn the credit Taps full on so you'll then get some economic recovery but in a highly inflationary environment um and in an inflationary environment what does manufacturing do first of all it replenishes the inventories of everything that they have uh uh sold off and then as a as their own inflation Hedge instead of holding a ton of copper they'll heal two tons of copper for instance and then you have the financial institutions what do they do always when there is a falling dollar currency and Rising inflation they go long of commodities as their own hedges and longer equities your Equity markets will probably buy the Autumn will have fallen by something like 30 percent but then the FED opens the Taps full on to get what I call the last hurray in global equities and in commodities we're basically from the lows of the Autumn of this year they'll double by early 2025 or end of 2024. and then why why then you say so what you're saying is 2023 a pullback of about 30 percent then they open up the credit markets they open up the floodgates the QE starts all over again there's money everywhere Equity markets go up rapidly but then you're saying there'll be a collapse yeah because you grab 10 year treasuries yielding over 10 and all other government bonds yielding comparable figures what does that do to your highly leveraged system collapses what's happened when treasuries were yielding three percent huh and an amazing crisis we had a major crisis in America which the authorities move very rapidly to stop any systemic risk of course yeah but come on you go to 10 percent so if I can go back a step going back to Bricks I mean there's an awful lot going on here but one of the things that appears to me to be uh a constant around the bricks is gold so if one was to assume that this new brics economy which is a lot of countries are involved now and if they're going to be doing their trading gold it it appears to me that the potential for gold where others are collapsing gold will be the place to be correct and so if you were sitting listening to you now our audience out there would you be saying there's going to be an awful lot of turmoil at least have some exposure to gold definitely and I'm not saying I'm not saying by today because I think we could easily have a nice little correction over the next month or so but on any correction buy a gold and hold it why do you think there'll be a correction in the near term uh of interest rate goes up you shake people out the only short-term correction but on the correction you buy it you recently also mentioned that you felt that interest rates were going to fall after interest rates will fall uh um in the fourth quarter of this year yeah because we're in the recession and the central banks have opened attached blah blah blah so probably we will see 10-year treasuries which will have got up to five percent by mid-year going down to three and a half percent but then by certainly by early 2025 if not the end of 2024 they'd have shot up to over 10 percent uh Rising inflation inflation probably worse than what it was in 1981. wow you then had uscpi from memory at 13 and a half percent you've got you've had the last five years the amount of credit that Global central banks have pushed into the economy was the equivalent of the an annual equivalent of 47 of GDP or something like from memory 43 trillion dollars so that that goes into every nook and Cat Cami cranny in the global economy Simon and then and then we are going to have uh Supply disruptions on oil so you will see oil by the end of 2024 we'll call it hundred and fifty dollars but the big kicker is going to be food prices or weather related reasons other than the usual reasons of Supply disruptions I had a Russia Ukraine and fertilizer shortages but the game changer we're going to either by the end of this year or next year move into What's called the 89-year glesberg weather cycle and 89 years ago that caused the Midwest Dust Bowl decade yeah and that that was a terrible time and you know I think if people can put up with a lot of things but if they're hungry you're going to get a lot of social unrest correct do you see that is coming as well social unrest generally yeah I I think I I'm pretty sure of it I I'm sure of it because we've had all this left-wing socialism uh instilled into virtually most governments in the western world and there's going to come a point when the population is going to Rebel mm-hmm they're going to say particularly with all this ESG nonsense vote uh CO2 emissions causing warming weather but the real weather patterns are long-term weather patterns and if you go back to what Noah and NASA said in September 2020 we are coming out of a 40 odd year warming uh warming years and by 2027 2028 we're moving into a cooling period yep in fact Noah actually says a full-blown Minima period I.E gold so people are going to say why are we spending all this money on having EVs and doing all of this stuff on heating homes and cooling homes no thank you and they will Rebel so the Rebellion comes because cost of living and because they see the governments actually pull the wool over their eyes do you think they'll wake up in time I think they'll wake up I can't answer whether it's going to be in time right well speaking of time uh Simon I I'd love to have you back out again soon because we've I feel like we've only just scratched the surface but I would like to know we have a big audience out there we're here in Australia but you know we have audience all over the world as I talk to you now in April 2023 I often say to people be prepared not scared what are three things that you would say to people as to what they could do to be a little bit more prepared a little bit more awake as we head into the changes I think the the the big message that I'm trying to give to Optus my clients but I was in Santiago Chile um got back the early hours of Wednesday morning trying to tell the guys there um now is the time you should start contingency planning don't wait until the proverbial hits the fan start now so for my personal from you know household's point of view start saving a little bit more um have a nice stock of food buy gold on weekdays all the sensible things um and by gold on weekdays he doesn't mean not on weekends he means no no I mean when you see the price falling probably over the weekend you could be able to buy gold anyway when it comes to Gold though Simon do you do you say when you buy gold not paper you mean that's my physical gold the paper gold market will be blown up okay why because there will come a point when the banks are over overrun by the physical Market who owns the physical Market in goals no oh bricks class bricks Plus when you when you'd say Brix plus what does that mean I know bricks which is Brazil Russia yeah I always call it Brix plus because they're continually getting new members on that note sorry I said we're running out of time I just want to ask you if Brix plus becomes as big as important as it potentially could and they're backing things by gold does that mean that places like NATO World health organizations they they tend to lose their power they will disappear wow this is a very interesting um um the Russian Economist who's developing the the new currency did an extremely good interview a few months ago and one of the Clauses in the new currency is that if an existing member or a new incoming member defaults on its loans to the Western World either to individual Banks or to World Bank IMF Etc they will not be debarred from joining brics what does that tell you if you're an indebted country that you're going to join brics bye bye thank you very much nice thanks for the party on to the next well it's one way of putting it Simon uh I think we're in for some pretty challenging times um yes I'm sure you're not going back to the UK anytime soon no can people follow you on Twitter they can follow me on my website and from the website is simondash-hunt.com right so if they'd like to follow some of what you're saying and get some more information that's the best place absolutely all right so well listen I appreciate it because I know you've just got back from Chile we haven't even gone into some of those areas but uh Simon please come back and have a chat again with me sometime soon okay happy job really enjoy yourself today thanks so much wise cheers bye

Channel: Small Caps

Views: 245,013

Keywords: Simon Hunt, economy, geopolitics, money, investing, gold, dollar, BRICS

Id: ArYm77X5rIk

Length: 34min 46sec (2086 seconds)

Published: Sun Apr 23 2023