in uh 2008 real estate went into an extreme bubble and the stock market had gone down but it went back up into not a super bubble but just a bubble and when Real Estate crashed it pulled the stock market down with it and this time uh we have the almost everything bubble so yes these charts I think it all points to the greatest economic disaster in history because the higher the cliff the bigger the fall and we are on the highest cliff uh that has ever been experienced by mankind JP Morgan said at


best uh gold is money everything else is [Music] credit hello and welcome to this video I've got Ronnie stole again with me Ronnie how are you doing hi Mike good to see you all good how are you my friend good so you just returned from the Dubai precious metals conference and you gave a presentation entitled Showdown and I think we're going to run through a little bit of this here so I've got that on my screen and um uh I I do like this the world's greatest showdowns and uh James Bond and


Goldfinger that that's great so you've got this split into three parts and uh we're I haven't seen this before uh you're going to be showing these a lot of these charts to me for the first time so uh the first section is monetary policy um tell us what you've got here I noticed you've got you've got all of the rate hikes inned here don't you and there's only three outliers is that what you're showing every time there's a rate hike it ends up in recession except for


three times in this chart right exactly exactly so so actually you know the the the thing is um the Fed feder Reserve is is kind of playing a a game of chicken and and and now they are they have to choose between fighting inflation Financial stability so so so if they choose the the tight Road financial markets will probably Revolt at some point and and and the Carnage in bond and Equity markets will continue on the other hand if they choose Financial stability over fighting inflation I think the FED will will kind of lose


will will risk losing The credibility that they have painstakingly rebuilt over the last couple of month so on on this chart we're basically seeing that well you know since 1915 every major um rate hike campaign actually ended in the recession and there were only three um exemptions to the rule three out of 20 so from my point of you given the enormous amount of sensitivity to Rising interest r trades there is actually no doubt Mike that we will move into a recession probably rather sooner than later and we


all know what the Federal Reserve is doing um when the the bed r word actually um yeah um becomes mainstream so so this is basically telling us well actually the market are already kind of pricing in the First Rate cuts and I think if we talk in a couple of month probably um in interest rates will already be significantly lower than they are at the moment yeah I agree I think there but the FED is always reactionary uh they're um the something happens and then they react to it that it's like Elon Musk


said uh they're driving by looking in the rearview mirror instead of out the windshield and he added to that they're watching a replay of a video in the rearview mirror you know so they're looking at at trailing indicators instead of uh what could be happening in the economy in the future they're looking at what just happened in the past uh so we've we've got these three outliers but you know um there's several factors that have to line up for them to officially call it a


recession uh I was uh I had a different business back in uh 1990 three and four where that third red circle is and I know you know we had the first Gulf War and we had um a bunch of other things and the economy was not uh like overheating or good then the the rates the rate hike cycle uh went up but we were basically still semi- recessionary uh like they haven't declared a recession already but I've noticed here a big slowdown in restaurants especially like midweek stuff there there does seem to be


something else going on but let's take a look at your next chart leading economic IND index uh has Su has successfully predicted every recession so uh tell us about this index and what you see Mike we we uh we know uh Dave Rosenberg I think said that every recession starts out looking like a soft landing and now you know we're kind of in this goldilock scenario soft Landing is is is kind of um the consensus view however um and as youve rightly said uh I think as as as as good analysts and


investors we should not look through the rear viiew mirror instead always look through the front window and this is exactly what this indicator does this is a leading economic indicator um It's actually an indicator that is comprised of 10 different sub indicators and and I really like this indicator because it has pretty good uh track record actually so since 1965 the leading economic index has successfully predicted every recession and now the index already if you drew a line there at that 5% Mark or


a little bit higher then it it is 100% reliable once it pierces like if once it goes more than 2% negative or two and a half uh it has nailed it every time hasn't it I mean there's a couple of times where it touches zero and doesn't trigger recession but yes you are right and and and and I think we we are now like um uh declining for like 18 month in a row which is I think the third longest uh uh decline in the last 70 or 75 years so so actually I think this is screaming recession and yes I I


think Mike we shouldn't forget that we're we're moving into in an into an election year in 2024 so obviously um the Democrats um don't want to hear the bad our word while on the other hand Republicans will try everything um to to to to make the US economy look uh look weaker so I think we shouldn't forget about the political aspect next year but the pure facts based on this indicator are clearly telling us a recession is on the horizon yeah you know um when if you jump off the top of a building and


you're falling you can be saying so far so good all the way down is that last uh one 1,000th of an inch that hurts yeah so a soft Landing always turns in to a very hard Landing ask Humpty Dumpty so um uh what have we got here negative Bank credit growth uh this is very very important Bank credit growth um is you know we're on this phony monetary system and most people don't realize that the stuff in their bank account isn't dollars that the FED created those are dollars that the banks


created and it's actually not dollars it's Bank credit it's denominated in dollars but the bank just creates a credit when you uh have an asset that can they can monetize uh you bring a house into a bank say I want to buy that house I want to borrow a million bucks and they they create a credit okay we'll create a credit for a million bucks and deposit that credit into your account it's all Bank credit uh JP Morgan said at best uh gold is money everything else is credit yeah yeah so I I think we we we talked


about this chart in our last session already I think it's it's it's a fantastic chart because as you know credit is the lifeblood of of of of modern economies and and here we are seeing really that um the the credit conditions are deteriorating uh dramatically so usually every time just the momentum of credit growth weakens we're moving into recession but now it's even a NE magnitude worse because we're in negative territory so so we are actually seeing Contracting um um credit so and there's


only one other time that it was negative and that was after the uh 2008 global financial crisis here every time it goes below 4% is uh or five that is I mean look at the double dip recession of the uh 80s the uh Ronald Reagan recessions uh and you're talking about this reversal occurring at plus 6% and here we are negative suggesting that this hard Landing is going to be harder than anything I mean this is going to be the biggest thing since but I believe it'll be bigger than the global financial


crisis of 2008 what's your opinion on that well I can only tell you Mike that um you know large parts of Europe are already in a recession actually you know we're you we're really seeing anemic growth so so you know uh an economy without any any momentum without any power it's it's it's it's really it's really frustrating to to to um to follow what's what's going on in Europe um and actually uh uh this in combination with um pretty sticky inflation rates that


that puts us into a stagflationary environment that for some reason nobody really wants to talk about then on the other hand China is not doing so well as as we all know although they they they really try to to start uh stimulating big time now um and then for the US um I mean if you if you inject such an enormous amount of fiscal stimulus uh in an environment where we're actually seeing full employment I think the US is running now a 8% budget deficit um of course I mean that's that's like


drinking uh uh 8 cups of coffee five Red Bull and and and and uh probably also taking a line of cocaine so of course there's an effect on the economy right but that's not a very sustainable um fiscal policy so um I I think we're we're still seeing this um this lag effect of the of this fiscal stimulus uh sugar rush but it is kind of fading out over the next couple of month and and and um therefore I think that um you know the Republicans will try everything to to avoid um more fiscal stimulus uh


next year due to to the elections so so this is probably the main case for for my um for my recession call next year but Mike let's face it a recession within an economic cycle isn't something that's uh unusual yeah I think uh recession also has lots of positive aspects yeah if you're um if you're well financed if you're running a solid business actually a recession can be an opportunity for you you can pick up really uh good assets yeah at cheaper prices um perhaps in every crisis there


is an opportunity exactly so yeah I mean I I I don't really fear the recession but I think it's it's it's it's uh no coincidence that over here in Europe for example there's quite a large number of really big um real estate developers um going bankrupt at the moment and this is clearly a sign that that actually um you know they can feel this enormous move on on on on on the rate side um because you know we all know that those real estate developers were highly levered um yeah


and if you're running on a variable are interest rates of course that can break your neck you know I I was um on I was in Utah for uh Thanksgiving with some of my family and I did a video for Thanksgiving and it was all about the scale of the bubbles that we're on and the three legs of the economy uh and the real estate is in the most massive bubble it's ever been in in the United States but then the stock market is you know just coming down from it uh you know two years ago peaked and and uh so


it's in a massive bubble and it doesn't matter how you look at it whether you look at PE ratios or the buffet indicator or uh the number of uh hours of the median wage in the United States that it takes to buy one share of the S&P 500 uh it's it's in a an historic bubble something that is uh has never been seen before in history uh and then you take the end of the 40-year bond bull market you know bonds are also in a bubble in the year 2000 Bonds in real estate weren't touched when the stock


market crashed uh because they weren't in their extreme ends of a bubble and then in uh 2008 uh real estate went into an extreme bubble and the stock market had gone down but it went back up into not a super bubble but just a bubble and when Real Estate crashed it pulled the stock market down with it and this time uh we have the almost everything bubble and uh uh so yes this these these charts I think it all points to the greatest economic disaster in history because the higher the cliff the bigger the fall and


we are on the highest cliff uh that has ever been experienced by mankind uh and so this is your uh an your analysis of the uh this first portion of your presentation so what have you got here yeah so so so Mike I think we're we're both not not in the soft Landing Camp uh obviously um but but I think you know um we have to be pragmatic and and make the best out of every situation so in our last in gold with trust report we we we introduced the incrementum recession phase model where we said that um every


recession has five distinct phases with uh different characteristics um and then we we we crunched the numbers and calculated what what actually works best uh uh over the course of a recession um and gold is a is as you can see on the table is is an excellent recession hedge uh on average uh it was up 10.6% throughout the recession then silver equities and commodities have in general a negative performance uh during a recession but and this is important in phase four and phase five um this is this is the phase when you know um I


would say that that Central bankers and and politicians really hit the panic button um and when this aggressive reflation actually starts because as we know uh recessions are most of the time uh only officially announced once the worst is already over so in phase four and phase five it makes sense to be become more aggressive because then silver equities but also later on Commodities do perform better but yeah I think what was really interesting um is that except for phase three on average mining stocks show a pretty positive


performance on average um so so so therefore you know over the course of a recession gold and Mining stocks are doing a pretty good job and in the later stages of a recession you can also get more and more aggressive uh on silver on equities in general uh and to some degree also uh on Commodities but I think that's it just shows us you know um if a recession is coming then gold should be a pretty reliable Hedge that's one thing I've always uh told people is your core position uh should


be the physical precious metals itself that has no counterparty risk and no uh danger of a mind collapse or an Environmental Protection Agency shutdown or a strike or bad management or uh any of the other risks and then uh there are times when you get this uh wonderful upside leverage out of the mining stocks and but to to do that you need need you need guidance from somebody like your company uh you don't want to be just blindly investing in uh mining stocks without somebody really doing in-depth


analysis on the mining stocks uh when you when you analyze like The Baron's gold mining index from uh the day that uh um gold became free trading August 15 of 1971 uh to today the physical medal has outperformed the um Baron's gold mining index by like a factor of eight times 800% and greater uh gains than the than the because you've got um uh leverage on the way up you know you might have gold might go up a buck and the mining stocks go up three bucks but you've also got leverage on the way down and then


whenever it's noodling sideways the stocks tend to lose a little so you need guidance I want to tell all of viewers you need guidance from somebody like Ronnie's company uh in this uh if you're going to so I have the core position and then there's my gambling currency that I use on the uh stocks to gain leverage so yes okay I tell you Mike um since I started analyzing and investing in mining stocks I've lost lots of hair as you can see um it's it's it's a it's a tough


business it's probably really not a long only investment you have to actively time the mining stocks because there is so much that can go wrong you've got geological risk um you've got management risk and you you're seeing one of the worst web management teams in the mining space unfortunately you've got political risks um expropriation new taxes and so on you've got Financial Risk you know um costs of capital are very high at the moment then you've got the gold price


risk yeah um so so so so actually it's it's a tough business but it can also be very very rewarding and and the last couple of days in the mining space we actually great fun but I'm I'm I completely agree it is really um an asset class where where you have to do your homework or otherwise just uh trust uh investment professionals okay I want to thank you so much for running us through this and I think we're going to uh come back in Future videos with more on this same presentation so thank you very much


Ronnie thank you Mike always a pleasure hi I just wanted to tell you about gold silver 111 o Silver giveaway where you can win win win 111 one 1 oz silver bar one 10 oz silver bar and one 100 o silver bar so enter today and win