What if a near-term recession & bear market are the LEAST of our worries?
History is full of examples where nations resorted to taking on ever-increasing amounts of debt to maintain a positive economic growth rate.
But it never works out well for those who do.
Most often, they end up sacrificing the purchasing power of their currencies in the process.
Many analysts are now raising such concerns about the fast growing national, corporate and consumer debt pile in the US and other G7 nations.
Are we repeating the mistakes of history?
Or is it truly different this time?
To discuss, we're fortunate to welcome monetary and macro analyst John Rubino, author and co-author of numerous books including The Money Bubble with James Turk.
John sees concerns of a near-term recession and bear market as valid, but fairly pedestrian. He’s much more worried about the next 1-2 decades, over which he predicts widespread hardship as the world’s fiat currencies get inflated away.
For the roadmap he expects ahead, click here or on the video below:
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Adam’s Notes: John Rubino (recorded 7.2.24)
EXECUTIVE SUMMARY
History shows nations that take on increasing debt to maintain economic growth often end up sacrificing their currency's purchasing power. Concerns are rising about the fast-growing national, corporate, and consumer debt in the US and other G7 nations.
US federal debt has grown by $11 trillion since 2020, with the country now adding a trillion dollars every 100 days. This growth is expected to continue due to the necessity of government borrowing to prevent economic collapse.
John predicts an economic downturn (recession) in the near term, accompanied by an equities bear market. This is influenced by trends like the depletion of $2 trillion in excess savings by US consumers during the pandemic, leading to increased credit card debt and rising personal bankruptcies.
Office buildings are losing value, being sold at significant losses, and impacting local and regional bank balance sheets. These massive write-down could trigger a banking crisis in the coming year.
High house prices and mortgage rates have frozen the housing market. Yet inventory is starting to rise sharply in markets like Florida and Texas, and that contagion could spread faster than many currently imagine. Should it, that’s another “negative wealth effect trigger”.
Over the next decade, Rubino anticipates the catastrophic failure of the fiat currency system, fractional reserve banking, and global military empires established since the 1970s. This is based on the parabolic rise in debt levels and interest expenses of major countries.
Rising debts lead to higher interest expenses, which necessitate further borrowing, exacerbating the debt and interest burden. This could result in bankrupt governments and failing currencies, necessitating a global currency reset.
As an investing strategy given the above outlook, John suggests focusing on
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Adam Taggart is the founder of Thoughtful Money, where your wealth = our #1 focus. Thoughtful Money was created to educate & empower regular investors just like you build wealth to fund their life goals. We do this by interviewing the top experts in money & the markets to give you actionable advice on how to protect & grow your wealth. Why? Because today’s environment is one of the most challenging ever for “regular” investors: inflation, high interest rates, recession risk, runaway debt & deficits, volatile financial markets, unstable banks & geopolitical threats — just to name a few. How will assets like stocks, bonds, real estate, commodities, gold, Bitcoin insurance policies, estate plans perform in the environment ahead? Are you just trying to figure out how to protect your family’s financial future from these risks — and hopefully grow your wealth, too — without becoming collateral damage to market events? We sure think that should be your focus. It’s certainly ours.
Adam Taggart is the founder of Thoughtful Money, where your wealth = our #1 focus. Thoughtful Money was created to educate & empower regular investors just like you build wealth to fund their life goals. We do this by interviewing the top experts in money & the markets to give you actionable advice on how to protect & grow your wealth. Why? Because today’s environment is one of the most challenging ever for “regular” investors: inflation, high interest rates, recession risk, runaway debt & deficits, volatile financial markets, unstable banks & geopolitical threats — just to name a few. How will assets like stocks, bonds, real estate, commodities, gold, Bitcoin insurance policies, estate plans perform in the environment ahead? Are you just trying to figure out how to protect your family’s financial future from these risks — and hopefully grow your wealth, too — without becoming collateral damage to market events? We sure think that should be your focus. It’s certainly ours.