Who knew that counterparty risk would suddenly become the hot topic on everyone’s lips?
- Geopolitical tensions are increasing.
- The rapid depreciation of various currencies globally has citizens confused and alarmed worldwide.
- Central banks have reverted to their favourite playbook of backstopping or bailing out big banks and depositors.
- We have seen a central bank’s foreign assets get frozen.
- There is a growing trend amongst nations of settling transactions using locally denominated currencies.
- The unprecedented levels of debt worldwide have trapped many policymakers regarding how they fight inflation.
I could go on.
To offset the above points, we have:
- A multipolar world is emerging.
- Roughly 90% of the world’s central banks are working on CBDCs.
- Central banks have frequently resorted to the old policies that have created these major structural issues in today’s economy.
- Central banks are buying record amounts of gold to protect themselves from sanctions.
- The trend towards utilizing locally denominated currencies for trade settlements is gaining momentum, while the BRICS nations are actively exploring the creation of an alternative reserve currency.
- 60% of low-income nations are grappling with debt distress or are close to it
In the latter half of 2021, I created and disseminated an illustration of Jarome Powell as a metaphor for an impending financial tsunami.
As the wave approaches the shore, we are witnessing a profound and unprecedented depletion of wealth on a multi-trillion-dollar scale.
We saw many signs:
- People were buying digital rocks for millions.
- A billionaire told retail to mortgage their home to pump his bags. (@Frank_Giustra called Saylor out on this on the debate. @DanielaCambone)
- Federal Reserve officials were forced to stop buying/selling stocks as they were pumping endless liquidity into the system.
- Cathie Wood said millennials would power a bull market in stocks for decades in 2021.
- People were buying digital land in an alternative reality for hundreds of thousands of dollars.
Time always serves as the best educator in the realm of finance.
During these dangerous times, gold is a reliable protector of wealth.
Its resilience in the face of financial crises and monetary resets has had humans always gravitate back to it for thousands of years.
As I have always said, gold is a hedge against stupidity.
Stupidity has arrived.
I hope you all have a great weekend.