🔴 TERRIFYING 1929 Stock Market Signal Has BEGUN! | Alasdair Macleod

Summary

In a riveting discussion with Alasdair Macleod on CapitalCosm, key insights unravel regarding the rising bond yields and their ominous implications for the equity markets. Macleod delves into the parallels between current economic conditions and those of the 1929 market crash, foreseeing a potential financial upheaval should conditions persist. Highlighting the unsustainable debt trapeze acts across major economies, Macleod underscores the dire prospects for equities and the growing allure of gold as a safe harbor. His analysis warns of economic conditions possibly more dire than those precipitating the Great Depression, pressing investors to reconsider their portfolios in light of rising bond yields and geopolitical dynamics. The conversation is a wake-up call about fiscal irresponsibility and looming economic challenges.

Highlights

• Bond yields are rising, signaling danger for the equity market. 📈
• Alasdair Macleod likens current conditions to those before the 1929 crash. ⏳
• Unsustainable debt magnifies financial risks across global markets. 🌍
• Gold shines brighter as a safe investment amidst economic turmoil. 🌟
• There are serious warnings that current economic issues mirror those of the Great Depression. ❗

Key Takeaways

• Rising bond yields are ringing alarm bells for equities. 🚨
• History may be repeating itself with conditions reminiscent of 1929. ⏳
• Unsustainable debt levels pose a significant risk globally. 🌍
• Gold is becoming increasingly attractive as a safe haven. 🏆
• Economic conditions could be akin to those leading to the Great Depression, potentially even worse. 📉

Overview

In this eye-opening episode of CapitalCosm, Alasdair Macleod sheds light on the troubling echoes of the past that are resurfacing today. The conversation reveals how rising bond yields might spell doom for the equity markets, likening current conditions to those leading up to the infamous 1929 crash. With an engaging narrative, Macleod elucidates the intricate dance between equities and bonds, underscoring the fraught economic landscape we find ourselves navigating.

Macleod details two major culprits—the burgeoning risk associated with holding dollars and the escalating global debt—that weigh heavily on the current financial situation. He compares today’s economic scene to an intricate high-wire act, where debt levels threaten to send the global economy into a downward spiral. His analysis highlights the precarious nature of current policies and economic behaviors, igniting a sense of urgency for investors to reassess their strategies.

A central theme in Macleod's discourse is the shifting sentiment towards gold, as traditional paper currencies seem increasingly unstable. He suggests that as debt bubbles start to implode, gold's gleam becomes more captivating to investors seeking stability. The deep dive into economic parallels and impending dangers is a sobering reminder of history's lessons and the importance of prudent financial planning.

Chapters

• 00:00 - 02:00: Introduction and Equity-Bond Market Dynamics The chapter discusses the relationship between equity and bond markets, particularly the pattern where the last phase of an equity bull market coincides with rising bond yields. It notes that while a pause in bond yields may occur, a subsequent rise often negatively impacts the equity market. The context suggests they are observing a second increase in bond yields currently.
• 02:00 - 04:00: Rising Bond Yields and Economic Indicators In the first chapter titled 'Rising Bond Yields and Economic Indicators', the focus is on a discussion between the host, Danny, and the guest, Alistair Mloud on the economic implications of rising bond yields on equities. The conversation highlights the potential risks to the equity markets if bond yields do not revert to previous levels. The dialogue takes place in the context of an episode of Capital Cosm, recorded on May 19th, 2025.
• 04:00 - 06:00: Debt Trap and Historical Market Crisis The chapter begins with a recorded dialogue where the host Danny greets his guest, Alistister, and introduces the topic of discussion focusing on what is most relevant for the average investor today. Alistister points out that increasing bond yields along the yield curve are a significant concern.
• 06:00 - 08:00: Current Global Debt Issues and Historical Comparisons This chapter discusses the current global debt issues by examining the increasing risk involved with holding US dollars. As global trade diminishes due to factors like broken supply chains and tariffs, the necessity for holding large reserves of dollars decreases for foreign entities. Historical comparisons may also be drawn, although the transcript focuses primarily on the current situation.
• 08:00 - 10:00: Analysis of Global Debt and Currency Challenges This chapter discusses the increasing tendency of foreigners to sell off US dollars in favor of their own currencies due to heightened perceived risks associated with the dollar. To attract foreign investment and persuade foreigners to hold US assets such as treasuries, the yield on these investments needs to be higher. The chapter highlights the interplay between global debt issues and currency valuation, emphasizing the impact on international financial markets. It also suggests the complexities that arise when balancing foreign investments with domestic economic policies.
• 10:00 - 12:00: Consumer Behavior and Market Reactions The chapter begins with a discussion about the current state of the US economy, touching on the confusion surrounding its growth and potential recession. The argument is made that the economy might already be in a recession if the 7% budget deficit is removed from the nominal GDP. This adjustment reportedly shows a contraction of the private sector GDP by approximately 4 to 5%. The chapter seems to delve into consumer behavior and how market reactions are influenced by these economic conditions.
• 12:00 - 14:00: Equity and Bond Market Interconnections The chapter discusses the critical relationship between private sector GDP growth and government debt. It emphasizes that if the private sector GDP is not expanding as quickly as government debt, a situation known as a 'debt trap' arises. This can lead to skepticism from foreign investors who may question the value and sustainability of holding such debt.
• 14:00 - 16:00: Central Banks and Gold Accumulation This chapter explores the dilemma faced by foreign investors when it comes to investing in US dollars amidst concerns of a potential 'debt trap.' It discusses how central banks accumulate gold as a hedge and alternative to holding reserves in currencies, especially when interest rates or bond yields may not remain attractive due to economic uncertainties. The conversation touches upon the challenges and choices central banks and investors face in managing currency reserves and seeking stable investments.
• 16:00 - 18:00: Currency Devaluation and Gold Standard Discussions The chapter discusses the sterling crisis faced by the UK during the 1970s, specifically around 1975-1976, under a far-left government. The United States intervened to support the British pound, buying it to stabilize the situation. This intervention led to the involvement of the International Monetary Fund (IMF), which imposed conditions on the UK government that compelled them to take necessary actions to address the economic crisis.
• 18:00 - 20:00: Chinese and Russian Gold Policies The chapter discusses the political and economic challenges faced by left-wing cabinet ministers who resigned due to their inability to support cuts in welfare and public spending imposed by the IMF. It mentions that during this period, the UK had government bonds, known as guilts, with coupons yielding 15% and 15.25%.
• 20:00 - 22:00: Economic Theories and Influential Economists The chapter titled 'Economic Theories and Influential Economists' discusses current economic situations, particularly focusing on western economies like America. It highlights the high interest rates and discusses the behavior of US Treasury securities, mentioning the 20-year and 30-year maturities that are approaching 18-20 year highs. This situation is detailed in the context of economic stability and future prospects.
• 22:00 - 25:00: Final Thoughts and Wealth Protection Strategies The speaker reflects on key points that resonate with them before concluding the chapter, placing emphasis on the importance of certain strategies. They note a significant milestone of a 5% mark being hit recently in the context of a 30-year metric, suggesting a trend reversal observed earlier in the year. There is a comparison to historical data, dating back almost two decades, to highlight the change in direction or return to previous levels of performance or valuation.
• 25:00 - 27:00: Conclusion and Promotional Segment The conclusion and promotional segment focus on the increasing dynamics of the debt trap affecting America, the UK, and other governments. The conversation stresses the importance for viewers to understand how these debt traps impact economies, suggesting that the financial situation in these regions will worsen due to these dynamics.

🔴 TERRIFYING 1929 Stock Market Signal Has BEGUN! | Alasdair Macleod Transcription

• 00:00 - 00:30 You know my experience of the relationship um in you know between equities and bonds is that you'll find that the last phase of the equity bull market occurs at the same time as bond yields start rising. You then maybe get a pause in the bond yields but the second time the bond yields start rising that's the one that kills the equity market. I see. Yeah. We've had the first run. I think we've had the pause. We're beginning on the second
• 00:30 - 01:00 run. Unless somehow bond yields come back, I'm afraid equities are doomed. You're watching Capital Cosm. My name is Danny. Today's guest is none other than Alistair Mloud. It is May 19th, 2025, and it's been a pleasure uh you know, talking with you back and forth here, Alistister. We thought we might we might we we might as well hit record and get some of this juicy stuff
• 01:00 - 01:30 on tape. How you been? I've been fine. It's nice to be with you again, Danny. Yeah, likewise. Let's just dive right in here, Alistister. I'm going to ask you the same question I ask everyone on the show, and that is what do you believe is most pertinent to the average investor out there? What's on your radar screen at the moment? Okay. Well, um I think I rarely today um it's higher bond yields. Um out along the yield curve there's there's still rising. Um and uh I think
• 01:30 - 02:00 there are two reasons that we can uh put this down to. One is um there is increasing risk if you like involved with holding dollars. I mean this much is clear because you if if you're going to break the supply chains, you're going to do all that sort of stuff with tariffs and so on so forth, then global trade is going to diminish. I mean that that is a fact. Uh and if global trade diminishes, do you you know as a foreigner, do you really need to hold so many dollars? So the idea that dollars
• 02:00 - 02:30 are going to be recycled, I mean there that's against I think um a tendency for foreigners to sell dollars probably for their own currencies as much as anything. Um and the the second point I would also make is that foreigners see increased risk in the dollar. So if you're going to persuade a foreigner to hold dollars to hold US treasuries, then the yield has got to be higher. And not only that, but um I know there's a sort
• 02:30 - 03:00 of bit of confusion about whether you know the economy, US economy is growing or whether it's going into recession or whatever, whatever. I would argue that it is actually already in recession. If you take out the 7% budget deficit out of GDP, nominal GDP, you're looking in effect at a contraction of um uh the private sector GDP of I don't know what 5%, four 5%. It's been doing that for
• 03:00 - 03:30 the last two or three years. Now this is terribly important because if the private sector GDP is not growing as rapidly as government debt then government debt cannot be financed. It is a debt trap. I mean of course you know if you get someone to buy it that's fine but if you're a foreigner and you're looking at this from the outside you think hold on a minute is this debt really worth having? And then the question that you ask yourself is at
• 03:30 - 04:00 what level of interest rate or bond yield would I be be prepared to accept in return for my continuing investment in dollars and that is the nump because if foreigners take the view that yeah this is a debt trap then actually there's no interest rate no bond yield which is going to attract them. This is exactly the problem. I mean, I've said this on, you know, on probably on your
• 04:00 - 04:30 channel as well, um, Danny, but we had this problem in the UK in back in the 1970s. I think it was about 7576. We had a sterling crisis. We had a far-left wing government. I mean, an extremist government if you like. And, um, uh, America very kindly came in and supported sterling. It went and bought it, turned it round, but then put in the bank manager. the bank manager being the IMF and the IMF forced the government of the day to take the action which they
• 04:30 - 05:00 should have taken. So you had left-wing um uh cabinet ministers resigning because they couldn't you know they they couldn't support the cuts in welfare or cuts in public spending or whatever uh which which were forced on them by the IMF. Now the point I would make is that at that time we had three guilts guilts being UK um government bonds which yielded which sorry which had coupons of 15% 15 and a quarter% and
• 05:00 - 05:30 15.5%. Now coming back to today and the situation in America and indeed in other western economies I can't see anything to stop it at 15%. And here we are looking at the um US Treasury 20 year uh you know 20-y year maturity 30-year maturity nudging on 5% almost at 18 year 20 year highs. This is a situation which is
• 05:30 - 06:00 ringing some very loud bells in my mind. Um so I think that's the first thing that I would really look at. Yeah, there you have it. This is a 30-year. So it's at 496 at the time. So it did hit that 5% mark. Yeah, it was actuallyed above five at one stage. Um about a day ago and then back in January. So if you pull this thing back Yeah. you were at a almost a 20-year
• 06:00 - 06:30 high. Yeah. Yeah. Absolutely. So um and now that's going to go higher in my view simply because of the debt trap dynamics and I think it's very important for all viewers of of um you know of of this podcast to to really understand the dynamics of a debt trap and that's precisely where America is at the moment. It's also I think where the UK is and it is also where some governments
• 06:30 - 07:00 in the European Union are. It is also potentially the position in Japan which has such enormous debt. I mean it's just unbelievable. I mean debt to GDP last time I looked at it was something like 260 270%. I mean we're talking government debt you know not not the wider debt. So um and that's another interesting one. If you look at the yield on the 30-year JGB, 40-year JGB, if you can get that one up, that is
• 07:00 - 07:30 really up up up. And that I think um is a real warning sign of as to the problems that Japan is now going to face. Um I mean the yield on the 10-year JGB I think is in the order of about 10.4 10.5%. But if you go out to the sort of 30 40 year year maturities, I mean you're then looking at uh from memory over 3%. I mean this is this is very serious stuff for uh um a nation
• 07:30 - 08:00 which is so heavily in debt. Most of that debt incidentally being owed to its own central bank. I mean, the the uh um Bank of Japan, I think, owns something, you know, close to 60% of the total uh government debt. So, you can see that we've got problems there. I'd like to switch slightly from this topic. Um just really, really quick, Alistister, is
• 08:00 - 08:30 this what you're referring to, the Japanese 30-year? Yeah. Uh 30 40 and 40 year old 40 years. Yeah. I it's it's a bit hard for me to see your chart there. You you rather want the yield rather than the price, I think. Is that the price? Yeah. I mean, that's probably there. There you are. Look at that. 298 2.98%. Yep. And that is well goes data goes all
• 08:30 - 09:00 the way back to 06. But yeah, this is a it's an alltime high as far as this chart goes, but it definitely goes back. It's definitely a 20-y year high. Yeah. Now, don't tell me that's not a crisis in the making. And you said 40year as well. If you got 40 year there, yep, it'll you you'll see something very similar. Mhm. Three, four chart. Yeah. I mean, it there doesn't seem to be any slowdown. The movement up is just accelerating. So, it's all it's all gas,
• 09:00 - 09:30 no breaks, as far as we can tell. Absolutely. Yeah. That's the sort of move people like to see in stocks, not in government bonds. You're not looking at a meme coin. You're looking at the Japanese 40-year yield. Yep. Yep. Um and our guilts, I mean, if you look at the um sort of 20 30 year guilt maturity. I mean, it's the same story there. It's just, you know, up up yield-wise, not price prices down.
• 09:30 - 10:00 Now this is terribly important because um you know one of the most important factors as far as equity valuations is concerned is what is the yield on government bonds. If the yield on government bonds is high that's bad for equities. So this is effectively undermining the prospects for equities. I think I mean going a bit further down that rabbit hole um I think
• 10:00 - 10:30 we got to think in terms of the other side of debt. Debt equals credit. Now credit is a good thing because all our wealth is in credit as long as uh you know the the debt on the other side of it is sustainable which you know those those charts are telling us maybe it's not. Um, so effectively we're in a credit bubble. If we're in a debt bubble, we're in a credit bubble. Now, the problem with credit bubbles is that they start imploding at some stage. And
• 10:30 - 11:00 I think we're actually we've I think we've actually topped out in equities. Um, particularly in the US. Well, just really quick, this raises a pretty gargantuous question. If equities, if you don't anticipate equities getting a bid and and if bonds aren't getting a bid, what is getting a bid in this case? You well, bonds aren't bonds aren't getting a bid, it's the yields that are going up, just to correct you. But no, I mean, the only thing is is is to look at
• 11:00 - 11:30 it conceptually. The problem is in credit. Yeah. Get out of the answer. And to get out of credit, you don't go into U an asset if you like which depends on credit for its valuation. You can only go into money and real legal money without counterparty risk is gold and that's why gold has been going up over the last two or three years. Um well it's actually
• 11:30 - 12:00 bit longer than that but it's been particularly noticeable over the last two or three years. But but the stock market is significantly bigger than the gold market and then the bond market is significantly bigger than the stock market. Yeah. I mean all that capital, not all of it, but a significant chunk of that capital rotating into a relatively smaller market like gold. What is that a recipe for? Well, it's it's a recipe for far higher gold prices. But um I I think it would be
• 12:00 - 12:30 wrong to think that you know it's dollar for dollar dollar coming out of um equities and bonds and going into gold because there will be huge losses. Um the point is that when you get a credit bubble imploding other than businesses going bust which means that the debt is no longer valid which wipes out the credit what happens is that the value of credit goes down. And here we've got several considerations. I mean we've got the consideration of um uh equity equity
• 12:30 - 13:00 values. That's the first thing. You have got equity you've got equity values as collateral for the banking system. Uh you've you've got the the falling um uh values of of of bonds and on top of that of course you got the falling value of currency because currency is credit. I mean, I know a lot of economists think the currency is money. It's not. It's credit because it's on a balance sheet of a of
• 13:00 - 13:30 a central bank. And then this brings me to a final point um which I actually wrote about in my Substack today. And that is um central banks. Central banks who issue the currencies fiat currencies are themselves technically fast. M I mean just look at um the losses on uh the Fed's balance sheet, on the Bank of Japan's balance sheet, um on the euro systems various balance sheets, you know, the ECB, the Bundus Bank, the Bank
• 13:30 - 14:00 of France, and Bank of Dalia and all the rest of them. You're looking for great deals on gold and silver, coins, and bars from a company that you can trust, then you've got to check out the good folks over at Pimbeck. This year, I've really gotten to know these guys, and all I can say is you're not going to deal with a better group of people. They're a family-owned gold and silver online bullion company offering the essentials and more at industryleading prices while always providing first class top tier service. That's pimbeex.com. And if you're looking to
• 14:00 - 14:30 convert some or all of your retirement account into real gold and silver, give Pinbeck a call. They'll help explain the process and get you started on the right path. Your support at Pinbeck also helps support the channel. So reach out to Pinbeck today. You won't be disappointed. and make sure to tell them Danny sent you. Um and uh um you know the the the the problem that they have is that having gone into QE they've basically what they did was they pushed down bond yields to the lowest
• 14:30 - 15:00 possible level and then went in and bought bonds. That's effectively what they did. This is what QE is. So they've all got huge losses. If these central banks were private enterprises, the directors would be in jail for trading uh fraudulently. But you know, this doesn't apply to governments. Governments have a special position. And of course, we all think that governments are wonderful and they're all trying to do the right thing. Yeah, there's a load of rubbish actually. I mean, the fact is the whole
• 15:00 - 15:30 system is bust, which is why I've been saying get out of credit. We're seeing the bubble. the bubble is imploding, beginning I'd also make a further point, Danny, and that is that if you look at this credit bubble in combination with um uh the tendency for tariffs to be increased, I don't think it's just uh President Trump. I mean, you know, he's he's probably set off. He's open Pandora's box definitely, but I mean, you're going to get the the the you're
• 15:30 - 16:00 going to get Europe, you know, the European Union sort of, you know, responding with extra tariffs. I mean, you know, they're all going to be doing it one way or the other. Um the the problem is that if you look at the combination of tariffs and the credit bubble bursting, ask yourself when did we last see this? And the answer was 1929, the bursting of the late 20s credit bubble and the introduction of
• 16:00 - 16:30 the Smooth Holy Tariff Act 1930. We have got exactly the same thing today. I would argue that it is potentially worse today because uh when you go back to the 1930s the uh the US economy in particular was a lot um you know I mean they produced more and more of their own stuff if you like so that the effect of the Smooth Holy Tariff acts which raised tariffs by um probably a minimum of about 20% across the board had that very
• 16:30 - 17:00 very bad effect and I think something like a thousand economists wrote to President Hoover and said, "Don't sign this into law." He signed it into law in early 1930, and the result was that Wall Street went down and down and down. I mean, it had a rally from the initial selloff in October to November um 1929. Then, of course, um it recovered a bit and then it went down and down and down and lost close to 90% of its value
• 17:00 - 17:30 top to bottom. and 9,000 banks went bust. That was the situation then. I mean, we've got the same dynamics today. The only difference is that we don't have a gold standard um guaranteeing, if you like, uh the value of um credit so long as that credit was sound. Here, here's the oops, let me turn it off for a second. But here's the S&P from the 19 from all the way here at the
• 17:30 - 18:00 top in 1929. Yep. And I I already did the measurements, but you can see from top to bottom, you know, this thing lasted about what 37 months. So about a year a couple a couple years and a half. Yeah. It it busted out in in the middle of 32. Yeah. Somewhere around here. And in total, I mean, you're looking at close to a 90% correction in the S&P. Yeah.
• 18:00 - 18:30 Since then. And then if you add in gold, let's see what gold did during that time. Well, gold gold was at 20.67. Yeah. Until 1933 when it was confiscated. Yeah. So, and then boom, gold went parabolic here in the 70s for obvious reasons. um you know coming off the gold standard being biggest one but uh but yeah very fascinating stuff looking at things things historically and then you also notice that it took from the peak here
• 18:30 - 19:00 in 29 it took you from 29 to 54 to get back to those levels. Yeah. Yeah. A long period long period of time. Um yeah, so you know we've got we've got the same dynamics that they had in 1929 to 1932. It's just in the beginning of development. Um I mean the credit bubble was roaring 20s uh which really was from about 26 27 28. Um
• 19:00 - 19:30 uh you know when the you know basically the bell hops and the the shoe shine boys had all the latest tips and all the rest of it. I mean, I thought we'd seen that actually at the dotcom bubble because the psychology then was exactly the same as, you know, as the reports of um, you know, what was going on in in 1929, 2829. Yeah. Um but no um you know so just looking at this chart Alistister you see I mean if you trace if you look
• 19:30 - 20:00 back at the top and you go down to the first leg down it takes about four months to get to that first leg down to complete that first leg and you're down 33%. So, if you're like a trader back then, you know, you start to see, well, maybe we've hit the lows, right? And then we get this dead cat bounce from the local bottom to the local top here. You get an 18% rally and then for a couple months and then boom, you're back down another 80 plus percentage
• 20:00 - 20:30 points from that. So, it's a very interesting chart to study human behavior. Um it certainly is and and I mean it you can fit that into the condition today. I mean how many people actually think that that's likely to happen? Virtually none. Yeah. You know, they just think the whole thing's on pause or you know um has it gone down enough for me to buy it sort of thing. And uh um yeah, you know, but that I
• 20:30 - 21:00 think the thing that's going to actually limit equities this time are bond yields. Bond yields are beginning to rise. And so you know the idea that you've got um a pause between in that case it was November I think through till about was it May or thereabouts? May yeah something like that. Um November 29 to about May uh April May 1930. Um I don't know that we're going to get that sort of period of time. I mean I'm always I'm always a
• 21:00 - 21:30 bit too eager in terms of timing. I I I'd be the first to admit that because I analyze it and I see what's likely to happen and I think, well, it should bloody well happen now. So, I you know, I'm probably a little bit too um uh um ahead of ahead of events, but um seeing these bond yields rise, unless they come back and stabilize a little bit before they go up, I mean, they're going to go up, let's face it. Um but if we get a little bit of a pause in the bond in the in the
• 21:30 - 22:00 bond market then yeah um you know the um consolidation could take a bit longer but I would caution that if you look at the uh relationship between the 10-year US Treasury yield and the S&P I mean it's an inverse relationship. M um it really does indicate um I mean I that's quite a difficult chart I think for you to put up actually Danny because um you've got to use you you know you've got to take it back to a certain date um
• 22:00 - 22:30 and you know rebase it at 100 or something uh and at the same time you're going to want to invert one so that you can see the relationship but that's actually I mean the gap the gap if you like between overvalued equities and falling bond yields is actually quite frightening. I mean it's it's record record levels. So that's something that's something which um you know again it's
• 22:30 - 23:00 not it's not good news. Okay. So now I inverted the 10-year yield, right? So let me also put on a separate pain. So, where's that at? Current. All right. So, now the 10-year that the inverted 10-year yield is above and you've got the S&P down below in yellow. Yep. And so, yeah. And I if you can rebase
• 23:00 - 23:30 them to the same sort of time. Um, what would you like? A year's a year's time, five years. I think back to about um uh the beginning of the century 2000. I don't think it goes Yeah, the 10-year doesn't go well, the TNX ticker doesn't go that far back. Yeah, tenure only goes back to the 60s. So, we can look at that. Anyway, I mean I think the the point I would make is that um uh the
• 23:30 - 24:00 valuation on the S&P uh 500 is far far too high for current bond yields. And u you know my experience of the relationship um in you know between equities and bonds is that you'll find that the last phase of the equity bull market occurs at the same time as bond yields start rising. You then maybe get a pause in the bond yields. But the second time the
• 24:00 - 24:30 bond yields start rising. That's the one that kills the equity market. I see. Yeah. We've had the first run. I think we've had the pause. We're beginning on the second run. Unless somehow bond yields come back, I'm afraid equities are doomed. Interesting. Let's take a look at gold's recent rally as well because it it's all tied into this. Um, so we have gold here in yellow. I'm going to
• 24:30 - 25:00 go ahead and move it over to the candlestick chart. All right. So, this is this is a chart that goes back to the 70s. And boom. Let's go ahead and let me take these trend lines out. Give you guys a better clearer view. So, this is a logarithmic transformation on the gold price. Let's go ahead for better illustrative purposes to illustrate the exponential rise of gold recently. I mean, check that out. Here's a nominal chart of gold. Yeah. And it has just been going ballistic.
• 25:00 - 25:30 Well, the only thing I would say long term that is Yeah. is that um people will have to understand I mean to get put this into context they have to understand it's not gold going up but it's the currencies going down in this case the dollar is the currency falling in terms of its purchasing power that is why the Chinese the people's bank of China are buying gold it's not so much they're buying gold they're selling dollars right and you know do they want
• 25:30 - 26:00 to buy another currency no they don't they don't want to buy another you they don't want to buy euros because it's exactly the same story or sterling or whatever or even Japanese yen they don't want to buy those. So um where else do you go? You get out of fear and you get into real money which is gold. And that's what they're doing. And this is why um there's so much um speculation if you like about China's long-term intentions in terms of guaranteeing the value of the yuan. Will they go on to a gold standard? I mean, there's no doubt about
• 26:00 - 26:30 it that China has been accumulating gold ever since the People's Bank of China was appointed by law back in 1983 to handle the Communist Party's um acquisition of gold and silver. That was 1983. They accumulated as much as they wanted up until 2002 when obviously they decided that the state had had enough. And incidentally they became the largest
• 26:30 - 27:00 um uh um uh nation by mine gold mine output and that was a deliberate act of policy. They also imported dory and there's still been importing gold from outside China in particular from from from our markets. um in 2002 they decided that um you know they'd got enough gold and it was now the time for um private individuals to acquire gold. Why? Well, I mean if you go back
• 27:00 - 27:30 to Marxist theory and this is what they were to teaching in all the the universities in China. I mean really from the time of Mao Sid Dong all the way up until re fairly recently and they probably still teaching it as far as as far as we may know but uh they've been saying that um you know capitalism uh will eventually fail. Um and that's once it's failed that the next step is to go into the sort of the you know the communist um Yes. Yes. So yeah, they
• 27:30 - 28:00 talk about this. They talk about how the Soviet Union, the reason why it failed, according to them, is because it didn't allow capitalism to build out the industrial base initially. Yeah. Whereas what they're doing, they're letting capitalism flourish. So you get the industrial base and then you bring on communism to man is that well capitalism builds out. So they call that late states capitalism. Yeah. I mean I
• 28:00 - 28:30 think yes. I mean the the the the interesting thing is that Markx was talking about the bourgeoisi and of course you know we we hear about this and we we sort of immediately associate Markx with the destruction of the bourgeoisi you know um that actually wasn't quite his policy his policy basically was um that the bourgeoisi basically make the money and get the economy to the sort of state where um their wealth can be transferred to the state on behalf of everybody. everybody
• 28:30 - 29:00 else. Yeah. You know, so you know, as far as Marx was concerned, the bourgeoisi were doing um you know, the communist god's work. So So um and and the Soviet Unions where they went wrong, according to the Marxists, is that they they put the cart before the horse. They didn't allow the capitalists to build out their to build out the base for the communists to to then take. Yeah. So, so um you know to get back to
• 29:00 - 29:30 I mean as far as as as far as they're concerned if they can see that capitalism in the west is going to fail then obviously fear currencies their fear currencies would go with it that's why they had a gold policy and incidentally it's also why they had a silver policy which of course I think very very few people really realize um I mean it's interesting I I attended a conference uh in New York I was which I was speaking at that must have been about 2011 11 2000 no I think probably about 2013 so we're talking you know a
• 29:30 - 30:00 bit over 10 years ago and there were lots and lots of silver exploration companies exhibiting at this conference and at the time there was a lot of um uh you know sort of conspiracy theory stuff about how JP Morgan were banging the market every five minutes and you know and then you had um uh what was her name Bllythe Masters who was head of the commodity uh side She deliberately went on C I think it was CNN to um uh if you
• 30:00 - 30:30 like make it absolutely clear that JP Morgan did not take positions in the silver market. Now of course everybody running the conspiracy theory sort of thought well this woman's lying but I can tell you I've known people like Bllythe masters and they are extremely careful about what they say in public. They rarely are. There's no way she was lying. So we know that. So going back to the conference, I I asked these silver
• 30:30 - 31:00 miners, I said, uh, right, when you produce your silver output, dory, whatever, whatever, how do you turn it into cash to pay the wages and pay all the energy bills and all the rest of it. And they all said exactly the same thing. a man from Glen Core comes around. He assesses the value of the dory um and uh then they're paid by um a bank which presumably was JP Morgan because if we're talking about a large lot like um Glenor is obviously JP
• 31:00 - 31:30 Morgan is then shipped off uh and I said uh well where's it shipped off to? So, well, we don't know, but I mean, you know, presumably China, but we don't actually know for certain because it's not our business anymore. I mean, you know, we're just paid when it when it leaves the site. Um, and uh then if you if you look at the other end of it, obviously JP Morgan would also be acting for China on um uh on the futures market. So what we have
• 31:30 - 32:00 and it's quite easy to understand what we have is we have silver in the form of dory but it's still silver bypassing the market and then being hedged in the market. So that was the suppression. Yeah. Interesting. And um they were doing this they've been doing this for ages and bear in mind that China is something like the fifth largest producer of silver in the world itself.
• 32:00 - 32:30 I mean she produces a lot of silver and she was importing this stuff. I mean at the time it sort of played into her hands because um uh refining silver isn't a very um environmentally friendly process. I think the Canadians pretty much stopped it. Um so I mean there you know the Chinese were quite happy to do it and so they accumulated a hell of a lot of silver and if you look at um you know the silver institutees numbers and how uh you know there's there's always a
• 32:30 - 33:00 shortfall certainly in recent years uh of supply on demand. I mean where's the difference come from? I guess that China's basically been feeding the market to try control the price because China doesn't China also want silver and just rare earths in general to become the new oil like they're they're building out an an a base primarily fixated on the electrification of the grid. Yes. They're trying to get away from from Yeah. I mean there's that and
• 33:00 - 33:30 also of course they're the largest global manufacturers of photovoltaic cells. I mean, you know, they've got every reason to have a huge stock of silver. The other thing I discovered which was fascinating was that uh China's exports in 2023 of silver, I think the figure was something like 250 million ounces. It matched pretty well exactly the silver institute's uh shortfall on its its its assessment. Um now the other thing that
• 33:30 - 34:00 was interesting is if you look where the silver was sent, it was sent to London. It was sent to Hong Kong. Uh I think Singapore was in there as well. Most of it going to those those centers. Now these are not large consumers of silver but they are financial markets. So you know that tells me that uh they were suppressing the price. we now have a situation where um I just wonder whether it's in their interests anymore to
• 34:00 - 34:30 continue to do that and so far as I can see the 2024 um exports of silver have been significant but um not to financial centers so I think there's a sort of change in China's thinking very very interesting China has accumulated huge quantities of gold if you look at Russia uh apart from what um the central banks got which I think 2,000 tons or something. Um, I'm told by fairly well-informed s uh sources that
• 34:30 - 35:00 there are two wealth funds. Uh, one is called the crop fund, believe it or not. Uh, and uh um uh but those two those two funds have got something like 10,000 tons of gold between them. That's that's what we're told. So, they've got around about 12,000 tons of gold. Not only that, but they're accelerating their mine output. They're now um I think joint second largest producer with
• 35:00 - 35:30 Australia, something like that. So this is you know I mean isn't the annual gold production amount like like 20,000 or 25,000. So that's approximately half of annual gold production that they have under management, right? Well, no, no, no, no, no, no. Hold on. No. The central bank holding is about 2,000 tons. There's another 10,000 held in various wealth in two principally two wealth funds. Okay. Um but when it comes to mine output, I think we're looking at
• 35:30 - 36:00 there at about 350 tons. I mean this is off the top of my head, you know. Oh, of silver. I was sorry. I was thinking about gold. Sorry. I'm talking gold. Yeah. Hold on. I got just get rid of this. They don't like you spilling the beans. Sorry. Right. Um what was I saying? Yeah. Um so but Russia could go on onto a gold standard
• 36:00 - 36:30 tomorrow. I mean, it's it's fascinating how, you know, the propaganda, the anti-Russia propaganda because of the war and because of Putin and all the rest of it is such that um, you know, you get serious um, uh, you know, writers, economic commentators saying that Russia's bust. It's not. I mean, it's debt to GDP is less than 20%. If you look at the tax rate for ordinary people um income tax is around about
• 36:30 - 37:00 13%. I mean if you make a lot of money you pay 15%. Corporation tax is about 25% which is the same as it is in the UK similar I I think in America and Canada. Um but um uh you know the the inflation rate is is high. Yeah. I mean it's running at something like 8%. Now, I don't know whether that's because they actually report a proper inflation rate, which we don't. I mean, you know, John Williams would argue that we've had 8% inflation
• 37:00 - 37:30 and more for some considerable time in the United States, but um the difference is that uh in in in Russia, uh people's wages have been rising very very sharply. I mean, if you're employed um as I think it's a reasonable level of employment um then you're getting wage rises of you know sort of 20 30%. I mean this is this is against an inflation background of you know around about 8%.
• 37:30 - 38:00 And so what banks are doing is banks are um encouraging people to save and these guys are saving which we don't do. They have an economy which actually could switch, you know, very very quickly into a gold standard. Whereas, can you imagine us doing it? No way. With Well, they call they call savings a glut. They Paul Krugerman called savings a savings glut and they talk about it in
• 38:00 - 38:30 a very negative way. Yeah. Well, he's I mean, he's he's a Keynesian nut, you know. I'm sorry. I mean he, you know, he he um actually uh uh write wrote the Fords, well certainly one of Ford, maybe more than one Ford to um Paul Graves version of uh Keen's um uh general theory. So you know that's where Paul Krugman is coming from. Yeah. Um you have this fixation of just you know
• 38:30 - 39:00 constant you know and this is Yeah. And this is this is the the you know the the savings paradox and all this rubbish. I mean Krugman as an economist is I'm sorry to say I mean he's just you know in bongo bongo land. I mean he's just he's just he's just out of it. I mean he really is. um along with with Stiglets I mean he was sort of saying I think at one stage well certainly Stiglets was was was recommending under Madura was it I can't
• 39:00 - 39:30 remember the the previous was it Chavez in in Venezuela was following the right policies you know I mean come on so um sorry you know Krugman and Stiglets and all the rest of it we just got to forget them I mean they they are actually partly responsible for trap that we've got ourselves into. I mean, and their their their god um for whom they are disciples, canes is
• 39:30 - 40:00 actually um got a lot to answer for um in terms of where we are because this really destroying the west. I mean it really is his policies going back to general theory. He invented macroeconomics which now everybody sort of thinks is a wonderful thing. They may not support Keynesianism. They may not support um uh uh uh monetarism. Uh but the one thing they will do is they'll say I support macroeconomics. It's a non-science. It was invented by
• 40:00 - 40:30 canes. You know, I mean this is anyway we're wandering off a little bit from current markets. But that is why the whole thing is now in a state of collapse. Let's it's happening. I see. Well, I think we've covered pretty much all the markets that that I had in mind. And I mean, we still have the energy markets that we could talk about, but if there's nothing else that you'd like to talk about, Alistister, we can go ahead and wrap up, but if there is something you want to talk about, go ahead and uh put on the table. Well, I think I've
• 40:30 - 41:00 probably given uh given your audience enough to think about. Um I think actually I'm I was very impressed with the way you managed to get the charts up, which didn't exactly contradict me. So, um you know, hats off to all your technology. You've really got it got it nailed, I think, Danny. That's pretty good. Well, uh, I I appreciate that, Alistister. Thank you so much for coming on, my friend. Uh, where can people find you if they want to see more of your work? Well, like you, I've got a
• 41:00 - 41:30 Substack. My Substack channel is Alistister Mloud.substack. And, uh, if you just Google mloud Finance, I'm sure that it'll it'll take you there. And the more the marrier. We're trying to save people from what governments are doing to them and we're trying to help them understand the dangers that uh that they put themselves in electing uh politicians. Um it's actually becoming extremely important to look to your own
• 41:30 - 42:00 protection, protect your wealth, try and you know preserve it rather than increase it. This is the whole thing. We're now in a a game of wealth preservation rather than wealth accumulation. Understood. All right. Well, thank you again, Alistister, for coming on. We'll have the link to your Substack down below. So, be sure to check it out, guys, if you're interested. If you enjoyed this podcast and got value out of it, then feel free to give back. You know, like, subscribe, comment down
• 42:00 - 42:30 below. Comment go Alistister go in the comment section. Anything helps in boosting this video and the algorithm. So much appreciated. We do get you additional reach when you guys engage with the content. So if you want more people to view this video and also help us out as well. Uh you can you can do all that YouTube jazz down below. Also check us out on Substack at capitalcosm.substack.com to get early access at free version uncensored version of all my content. and check out
• 42:30 - 43:00 the description box for all of the cool discounts and products that we have laid out for you guys from our affiliates and sponsors. Supporting our affiliates and sponsors also helps support me, too. And you get a cool product and you get a discount for a number of these different products by checking out the links down below. All right, guys. Thanks for watching. I'll catch you next time. Bye. Uh, can you hold