Marc Faber on What's to Come in 2026 | Marc Faber and Jimmy Connor
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Bloor Street Capital Inc. was paid a fee for producing this event. Bloor Street Capital Inc. and its affiliates may or may not hold …
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Mark, thank you very much for joining us today. How are things in Thailand? >> Everything is fine, thank you. It's cold in the north. >> I How cold is it? >> Well, I mean, not below zero, but uh you understand my office and my house are next to the river and uh the land area is quite large. So, it's kind of colder than in the inner city. And number two, homes in Thailand cannot be I mean, they're not being heated. I have some heaters, but I don't like to use them. I think I have to suffer like everybody else. >> Well, I am based in Toronto, and today it's 10° C, which is crazy warm. Okay. Typically this time of year it's below freezing but uh anyhow such is the case. So I always like to get a sense of when I talk to my guests I want to find out what's happening within their country from an economic point of view and in the surrounding area. How would you characterize the economy in Thailand right now? Well, economist and strategist tend to classify Thailand as a failed state. But when I look at society in Thailand, especially here in the north and in the eastern part, which is Isan and bordering uh Laos and Cambodia, the country is very sort of peaceful and laidback. And compared to other countries, foreigners who travel to Thailand, they tend to love it. They tend to love the country because the people tend to be friendly. And one of the qualities of the country is that it has a very large land mass and the population is not that large compared to say Indonesia. Indonesia's population is more than three times as large as Thailand's and uh the same for Bangladesh and so the country never suffers from hunger. people always have enough food. And uh one of the great qualities of Asian cities in general, but in particular of Thailand, is that there is very low crime. Now, we have to define crime because there are lots of traffic accidents. And I worry more about traffic accidents than whether the stock market goes up or down because I ride motorcycles. I mean, racing bikes and so and the it is dangerous. I'm used to the danger, but it is dangerous. [laughter] >> Do you wear a helmet when you drive your motorcycle? >> Yes, I have several helmets depending. And >> is your wife on the back? I have motorcycles where I could take someone on the back, but I only have one. I have racing bikes that are built for one person and not for many people. [laughter] A side car would be more appropriate. [laughter] Okay, so let's get into it. I want to get your assessment on what's happening in the world right now. Before we do that, I want to reflect back on 2025. It was an incredible year by all respects. S&P was up 16, the Nasdaq up 20, gold up 60, silver up 140%. Even the Canadian stock market was up 30% last year, Mark. But when you reflect back on 2025, what surprised you the most? I mean uh it didn't surprise me all that much but it was sort of a surprise nevertheless uh the strong increase in the price of precious metals. I I p had predicted already for years that gold and silver would go up, but I didn't uh know that it would happen last year and to the the extent it happened. And number two, you said it was a great year. Yes, but it was a great year for some max stocks and some semiconductor stocks. But the broad market, the US, say the equal weighted SNP didn't move up strongly and foreign markets significantly outperform the US. So I apologize, it's the code. Anyway, so now we have this uh sharp increase in European stock markets and uh very strong increase in the emerging market complex. I mean the emerging market ETF EM was up close to 40%. And some markets were up 50% and so forth. So it was a very good year for some stocks in emerging markets. Not all in the Indonesian ch I mean in the China stocks didn't do particularly well including uh Indonesia, Malaysia and Thailand. But I think this year will be the year where these markets these emerging markets that have lacked behind will take off. Well, very interesting. So, let's talk about 2026 and what to expect. Uh, first of all, I want to look at the US, okay? And when you look at the US economy right now, it continues to hum along at 3%. Scott Bent said he thinks it could grow to 4 to 5% in 20126. We just saw unemployment numbers for the month of December. They were 4.4% down from the last reading of 4.6%. We have the S&P out at 7,000, an all-time high. All looks good in the world. What's your take on the US economy as it stands right now? Do you have any concerns going forward? >> I think that the figures are fudged. I think the figures do not reflect the reality for most people because the US government understates or undercalculates the cost of living increases. Say you can easily make GDP grow by 10%. But if inflation is 12%, it doesn't help you much. You understand? You have a decrease in real economic activity. And so the way the government calculates GDP does not really reflect what is happening to the ordinary household. I'm talking about the ordinary household and not the people that benefit from money printing which are idiots like myself who are in the financial sector because we in the financial sector and there I would include Wall Street. We are the first one to receive the printed money. We then the financial sector will distribute that money. It flows to the say the private equity funds and to the fund management companies and from there it flows further into businesses and so forth. And at the very end it flows to the workers to the middle class [snorts] and therefore the workers they have declining real incomes. This is a fact. And the qu the big question is how do you measure GDP? Because say if you take the figures that were used for inflation in the 1970s and early 1980s, then GDP is actually contracting. And there's an individual who calculates these things based on the way the CPI was calculated in the 70s. The old method and his name is John Williams. And when you look at his calculations, you scratch your head. How is this possible? Uh his inflation at the current time is around 10% peranom. These are cost of living increases and I bet you your cost of living increases are more than 3%. They are in the order for most households in the world around 5 to 12%. >> I will not argue that point at all. So you touched on a a couple of very interesting points there. First of all, you talked about the money supply and I just want to throw out some numbers here for the benefit of the viewers. In January of 2020, the money supply in the US is measured by M2 was 15.4 trillion. Okay? And here we are 5 years later and now it's over $22 trillion. That's an increase of 42%. A lot of people don't look at the money supply, but this is what's causing all the issues. You touched on inflation, and I would totally agree. Anytime the government throws out a number like inflation at 3%, I just double it right away. And um so I would totally agree with your assessment. It's somewhere between 5 to 10 or 12%. I mean you look at some of the prices in the past year like the price of coffee it's up 30% year-over-year. Ground beef is up 20%. Even the price of bananas is up 10%. Bananas never go up in value or up in price. So we got a real problem with inflation. I totally agree on that. Well, I mean, it's funny because uh I'm a believer that inflation or co let's call it cost of living increases because when home prices go up, when rents go up, when stocks go up, they call it all a bull market or whatn not. But the reality is that uh when uh the home prices go up, it's also a symptom of inflation. And when stocks go up and commodity prices go up, it's a symptom of inflation. And that is the difficulty when you look at when you talk about inflation. Inflation would not cause any damage if all prices everywhere would go up at the same rate. You see? But now what happens and this was observed already in the 16th century by copernicus prices go up here and then they go up there and then that the back there and so forth and that causes a lot of disruptions in the economy and uh at times I'm saying at times it's possible for workers to move ahead because the wages go up more than uh the prices of of goods and services. But at the present time the wages go up less than uh the prices of goods and services and so the real incomes are going down. >> Yes. And to your point >> to your point I'm making the same wage that I made 10 years ago. I kid you not. Meanwhile, the price of every good, service and asset has gone up 30, 40 or 50% just in the last five years. >> Yes, absolutely. But I want to explain here one one fact that is frequently overlooked. At the present time, the wealthy people have become incredibly wealthy because of the money printing. Because nobody on Wall Street that is receiving the money from the Fed, the the the newly the newly printed money comes to Wall Street, they are never going to criticize the Federal Reserve or the Treasury Department and so forth because they benefit the most from money printing. So you have an industry that is huge, the financial sector industry, and I'm not complaining as a participant because I benefit from the monetary policies, but as an economist and as a historian, as an economic historian and social observer, I criticize the Fed, of course, because it's very destructive for a society to do what the central banks have done [clears throat] essentially in the 20th century because 19th century we had very strong economic growth both in Europe and in the US in terms of per capita increases and we didn't have a federal reserve and the price level in 1900 was no higher than it was in 1800. And the population had grown from 4 million in 1800 in the US to 80 million. >> So, >> so you can have economic growth and no inflation. Uh the Federal Reserve will always use this absuse Keynesian. uh but canes was maybe useful at the time [clears throat] and only to a limited extent but you have to understand when Kanes wrote his books government spending in the economy was around 10% of the GDP now it's around 50% in most countries So essentially, you're saying if you're long assets in this economic environment, you're in good shape. But if you're not, you're totally screwed. >> That is exactly the way it is. If I look at uh people and uh the wealthy people I went to school with and so forth, the ones that are still very wealthy are the ones that had assets and they didn't lose these assets through divorces and through estate fights. You know when someone dies in in the western world when someone dies the usual thing that happens is that the relatives fight with each other over [laughter] the inheritance. >> When it comes to money all bets are off. >> Yes. Correct. So, we talked about the strength of the the US economy and also the risk for higher inflation. And I want to get your views on the Fed because the Fed has been very doubbish and we have no idea who the new Fed governor is going to be, but it could be announced any day now. But whoever it is, they're going to continue to cut interest rates. We have another Fed meeting coming up at the end of January, another one in March. But what's your take here on interest rates? Because it looks like they're going to continue to go lower. this is only going to feed the economy and drive growth and also drive inflation higher. >> Yes, your observation is absolutely correct. But one thing I want to say and this was already discussed in details by Milton Freriedman when asked uh does the Fed control uh interest rates he said no they don't control interest rates they control one rate which is essentially the Fed fund rate and I have to say here if you push down the Fed fund rate into say negative territory, then a 10 years bond yielding 4% could appear to be relatively attractive. But if the less than zero interest rates or as Trump suggest the 1% by year end [laughter] leads to higher inflation as you suggested and to higher long-term rates. Since the Fed embarked on cutting interest rates more than a year ago, long-term interest rates have not gone down. they've gone up and in my view looking at the bond market action you know just how bonds trade I have the view that a big move is coming with bonds either shooting up in other words reacting in my view to an obvious recession and then you would have bonds going up in price and yields coming down. But the other possibility is that bonds go down in others [clears throat] yield up. And that can happen if the Fed cuts rates at a time when there are still inflationary pressures as they are now. There still inflationary pressures everywhere. [laughter] I have to yet see someone who cuts your insurance premiums for the house and for the car. And I have to see yet someone who cuts uh the health care expenditures in hospitals. >> Only the Bureau of Labor Statistic has in their statistics health care costs coming down. It's a complete nonsense. Everybody knows that. And I actually am surprised. Not that I ever thought that Wall Street was particularly honest. [laughter] I I worked for Wall Street for a long time. I mean 40 years. So I am quite familiar with the business practices. But that nobody criticizes the Fed's policies among the economies, you understand? And among the top executives of Wall Street firms that surprised me. I'm always kind of feeling like I'm the only one who criticizes these characters, but they need strong criticism. for having essentially uh financed a huge bubble in government spending and you see when you talk about credit I think it's very important to make a distinction for what is credit used for say you and I we run two different countries And uh you are wise and prudent and intelligent and you have deficits in government spending. I mean in in your finance, budget uh deficits, but you use the money to build roads and railroads and uh to pay for education that is say desirable. And I run a country and I encourage consumption uh mostly of foreign goods [laughter] and uh and uh I encourage government spending that gives the impression that everything is fine. In other words, subsidies. You know the the government in most countries about half the money they spend is for subsidies. social securityities the subsidy and so forth and so forth on and my view is that these subsidies are actually very negative for society. I think people should take personal responsibility and not depend on the government to give hand them money. >> Oh, I agree with that 100%. And unfortunately in the country I live in they do the opposite of that. So, I want to get your views on the US dollar. Uh, the U year-over-year, the USD was down 10%. And if we we both agree that they're going to continue to cut interest rates in the US, where do you see the US dollar going here in the coming year? >> This is a very good question. What do you think where the US dollar will go? [laughter] >> I think it continues to fall. >> Yes. Good answer. But fall against what? Because it's not not likely to fall much against say the the Venezuelan real. [laughter] is not likely to fall much against the euro but it has fallen of course much more than what you say the 10% against gold silver and platinum you know this is the point in an inflationary environment and I have I mean plenty of books on the subject of inflation and economics in an inflationary environment What happens is that money becomes very uh unreliable as a unit of account as a store of value. Anyway, you don't want the one thing that you don't want to own in a high inflationary environment is cash and bonds. But the bond portfolio may not be as bad as the stock portfolio depending when you buy it. Because bonds in the US are reasonably priced compared to bonds elsewhere in the world, say in Switzerland, [laughter] you buy a 10 years bond, they're practically less than half a percent interest. So that supports the dollar. And my view is if someone ask well why is gold and silver so strong or has been so strong? My view would be because the market begin to appreciate that the cost of living increases have been much higher than what governments have published. And then they say to themselves, we have money. Some of it is in our real estate. Some of it is in our stock portfolio. Some of it is in commodities or in in a collection of books or stamps or art or wines or whiskies whatever. And uh then they have also cash and bonds. And then the question is if safety becomes an issue or if a uh store of value becomes an issue and someone has a $100 million or a billion dollars and he says to himself, "Okay, I'm exposed to the financial markets because if Jeff Pess Amazon goes down by 50% % then he loses 50%. Then these people who have money including myself and we say okay we put some of our cash in gold and silver and platinum because whatever money they will print these assets that cannot be multiplied at the same rate like gold like paper money these assets will appreciate in value and the same for paintings. That's why you know art has gone up so much in price. Of course there are there is some art and some some commodities that go down but in like oil is very cheap at the present time. If you if we measure it against gold then oil is very very low at the present time. And But I don't think that uh to say the dollar will go down is uh is necessarily correct. Uh maybe it stays stable against other currencies. I mean interestingly enough I said to you at the beginning Thailand is a failed state what economists call them. I don't think so. But this is the view of some people. But last year 2025, the part the currency in Thailand went up 10% against the US dollar. It's not bad. And everybody was surprised. They don't know why it's so strong. They say it's because the the country thrives on scams. That's that's of course nonsense. The scams are much bigger in other countries than in in Thailand. I'm not saying that they don't exist, but uh the law here is quite strict. Mark, the uh you were talking about gold and silver and why it's been going up here in the last uh past year, but many people say that the move we're seeing in gold especially is just a referendum on the US dollar and also the economy. It's just a reflection of how bad things are. What What's your assessment of that statement? It may be true. But to be fair, if I look at the global economy, I think that Europe is in a bad shape. I think the US if I look at everything you know the the government debt and the deficits and so forth I think it's not sustainable but I would have told you it's not sustainable 40 years ago and it's we're still there. I mean in my life there are a few things that surprised me. I expected China to open up and to become a a wealthier country but and I wrote the book on the subject tomorrow's called Asia's age of discovery that was written more than 20 years ago but the speed at which China became a dominant economy in particular in science and technology ology. That is something that surprised me also me myself. Although I criticized other people who said China will produce the goods, you know, the cheap textiles and garments and toys and so forth. And then western company put the brand on it and make the money and so forth. This wasn't the case. The Chinese have their own brands nowadays and their own technology. And if you look at service by international organization about the best universities in science, technology and engineering among the 10 best, you usually have eight or nine Chinese universities. And MIT is lucky to be on the list among the 10 best. lucky. This is remarkable. And you know this is if you have a country like China or India and you have a billion people, the probability that you have 10 geniuses is higher in a country with 10 with a billion people than in a country with Switzerland with 7 million people who most of whom are asleep [laughter] because they're so rich. Mark, just because we've moved out of the US and started talking about Europe and China, I want to get your views on some geopolitical issues that that are happening right now. We still have war in Russia and Ukraine. We still have hostilities in the Middle East. We have the situation in Venezuela, Greenland, who knows what's going to happen here. And just recently, the president said that he has the US military ready to hit cartels in Mexico. We don't know what that means exactly, but it sounds like uh there could be some issues going on in Mexico pretty soon. But when you look at all of these events, what concerns you the most? >> Well, what concerns me the most is although I would have voted on two occasions for Mr. Trump, what concerns me is his uh inconsistency and he talks constantly about issues about which he has no clue. He is a typical interventionist in a negative way. You understand in economics we have different theories that the the classical econ economists like Adam Smith and so forth they argued for uh market economist the market mechanism and they argued against a very large government. The extreme of interventions is the planning economy of communism and socialism which is a complete disaster. I can take you or could have taken you to any country in Eastern Europe in the 1950s post second world war and even up to the 70s and to Russia and to China and to India everywhere where they had communism. The standards of living of people were substantially I want to stress this substantially lower than in the western world where they had free markets. And the moment these countries opened up and adopted free markets under Deng Xiaoing in 1978 in China and in Russia later in 89 and so the moment these countries adopted free markets and uh the capitalistic system or more capitalism and less state interventionist that propelled these countries upward. And if you look long-term historical trends, Napoleon, he didn't move his armies at the faster pace than Julius Caesar 2,000 years before. And then some British had the great idea to build a train. And since that we have railroads, people could move around the world at a much higher speed. And then after the introduction of the uh aeroplane, but basically the industrial revolution was [clears throat] enabled by the cap capitalistic system that must be taught to the socialists who always criticize rich people. What's wrong with business being rich? He has enabled the whole world to buy products at much lower cost than in a department store. That the same railroads in the 19th century allowed goods to [snorts] be shipped from the countryside to the cities. And so the prices of meat in New York fell. And when prices fall and the wages stay the same or go up, the real incomes increase. That is relevant, not the GDP figure that Mr. Trump and Mr. Bush publish but uh I'd like to make one observation here because economists and strategists and people and politicians especially in the western world they continuously attack China. I mean there's nothing China can do well at the present time. It wasn't the case 10 years ago, but now everything is China is bad, is evil or what not. But the point is this. I remember my grandparents were one of the first people in Switzerland that had a TV, the television, and my father and my uncle bought it. And the TV set had uh just one or two programs and it only broadcasted say uh between 6:00 in the evening to 10 p.m. and then it closed down because the Swiss had to go to bed to work in Switzerland hard anyway. That what? >> Yes. >> That what I want to say is for now I can buy 10 TVs for $2,000. >> I know it's crazy. So the president has said that using the military is an option to take over Greenland. And if that were to happen, I want to get your thoughts on what Europe would do, what NATO would do. I don't think that Europe would do very much but in the world I want to say this in the 50s and 60s the US enjoyed a huge prestige because largely they had won the war. Uh without American help, the Europeans had would have been overrun by Hitler first and then by Stalin. Stalin would have moved west uh to Spain basically. He would have captured the whole of Europe because Europe was destroyed by the war. But the Americans saved that situation. notably George Patton because he was [laughter] aggressive character and a brilliant strategist, a brilliant military man. Uh difficult in character, unpredictable but very capable, very educated. He understood strategy. Anyway, uh the Europeans would do nothing if America takes Greenland. Nothing at all. They they not in a position to do much. But America would lose a lot of prestige. And I think that Trump is a little bit surprised at the reaction within America and internationally uh of people who condemn the American intervention in Venezuela. I mean, I'm sure that Maduro is not a particularly nice person. Whether he was running a drug cartel or not, I have no idea because I'm not there. And it's clear that the countries that aggress that are aggressive, they will always use an excuse to go into a war. I mean, the US is very good at creating enemies. Wherever they go, they have to create an enemy. And I believe you mentioned we have kind of a war in Ukraine and so forth. I tell you my view is that this aggression in Venezuela has brought us much further from a peace in Ukraine than people realized because this is an example of America, a country, a superpower that just goes and essentially conquers another country and then openly tells the world we are going to run the economy. we are going to run the oil and take the oil and so forth. What do you think other countries uh will consider doing? And the US is not the superpower relative to the rest of the world it was in the 1960s. Now the other people on the block that in military are probably as or more powerful than the US and NATO. I mean bricks the Brazil and Russia and China and all these countries uh in my view they're very powerful because of the size of their economies and because of the manpower they can moni mobilize 85% of the world's population. Well, very interesting thoughts and I know we're coming to an end to the time here, so I want to wrap it up and I want to thank you very much for sharing or spending time with us today and sharing your thoughts. If somebody would like to follow you online or check out some of your research, where can they go? >> They can go to our interview. [laughter] No, they can go to a website. It's called gloomboomdoom.com. But a a final thought I'd like to leave is [clears throat] we know the last say 50 years 19 say 1980 to today we had an unbelievable what they call bull market in stocks and in properties and in uh also in bonds because interest rates fell. 1980 the peak in US bonds bond yields was over 15% under 10 years you know and by August 2020 we went down to less than 0.6%. saw an unbelievable rally in assets and in paintings and Picasso and Warhole went up dramatically over that that period of time. And so everybody is conditioned to prices going up somewhere. But what about if prices don't go up but go down? And I think as an investor say for myself, I'm thinking what if prices went down for stocks and other assets? How would I react to it? You understand? At the present time I wake up in the morning or in the afternoon in my case and I feel quite happy because prices are up and my assets have gone up in value. Now let's assume it goes down. I'm always thinking how will I react psychologically and I think probably the right way to approach this issue of price declines I'm talking here about the deflationary environment for asset prices not necessarily consumer prices but asset price would be to think let's consider a strategy that is geared or which or which objective would be to lose the least money when things go bad. I give you an example. Traditionally, people have said, "Oh, real estate always goes up." So, they bought commercial properties in New York and Los Angeles and Chicago and everywhere. And what happened to commercial properties? Some went down 80%. Not all, but some went down 80%. Entire neighborhoods are half empty and so forth. And so I think maybe the best in an in such an environment where prices go down for whatever reason. But I could imagine that in World War II prices will not go up for everything, you know. And uh in that environment maybe bitcoins and maybe gold and silver and and platinum are the best and diamonds. Diamonds are not particularly expensive and uh food. So these are things I this is something I'm considering about because the consensus Bloomberg had a survey of analysts and strategists and economists. None of them were negative about the stock market. They all predicted the stock market to go up in 2026. My prediction it will go down. now go down. Again, the question comes up, what is down? Let's say if stocks went up 30% in the US and the dollar collapsed by 50%. Would stocks be up or down? Yes, in in dollar terms, they'd be up, but in real terms, they'd be down. So, we have to define these things. But I can say that in the last few years stocks, financial assets have been have been tumbling [clears throat] against the price of gold and silver. That I can say >> so >> and it may continue. it may continue the longer we have Trump and as I said I would vote for him any time compared to say Kamala Harris and uh Bush and so forth but as an individual as an economist he's meddling into everything is a disaster because he knows nothing that's the problem he has not he is a clueless individual That's true. Most most politicians. >> Yes. But especially but some people are ignorant and they don't interfere in everything. You know, they admit their ignorance. >> So the message you want to leave with everybody is just stay long gold and silver. That's how you protect yourselves during these. If you could, if you could, the best strategy was would be to sell short any politician in the western world. Any and I'd include also the academics at universities that most of them most are leaning to the left. Well, these are very interesting thoughts, Mark, and I want to thank you once again for spending time with us today, and I will have a link below to your u your website and our show notes. Once again, thank you, and I wish you and your family all the best in 2026. >> Well, I wish you of course the same and to your viewers the same. But to your viewers, I I want to repeat, I think the notion that everything always goes up or goes up in the long term is wrong. because I' I've seen after the first world war the destruction that occurred in asset prices and in territories uh and then the collapse of colonialism after the second world war and real estate in the whole of China real estate in the whole of the Soviet Union became worthless that people must Understand? That's why I'm always telling you my investors, they need to diversify. You can't hold all your assets in one place. So, I would hold maybe some assets in Brazil and Argentina and uh maybe some in China and maybe some in the Soviet Union and so forth, but not everything in the US or in Britain or in Canada, [laughter] but the Canadians. >> Let's touch on the Canadian next time we speak. >> The pioneers have become socialists. Oh, so true. So true. All right, once again, Mark, thank you. All the best. >> Well, thank you very much and uh all the best to you as well.
Marc Faber on What's to Come in 2026 | Marc Faber and Jimmy Connor
Summary
Bloor Street Capital Inc. was paid a fee for producing this event. Bloor Street Capital Inc. and its affiliates may or may not hold …Transcript
Mark, thank you very much for joining us today. How are things in Thailand? >> Everything is fine, thank you. It's cold in the north. >> I How cold is it? >> Well, I mean, not below zero, but uh you understand my office and my house are next to the river and uh the land area is quite large. So, it's kind of colder than in the inner city. And number two, homes in Thailand cannot be I mean, they're not being heated. I have some heaters, but I don't like to use them. I think I have to suffer like everybody else. >> Well, I am based in Toronto, and today it's 10° C, which is crazy warm. Okay. Typically this time of year it's below freezing but uh anyhow such is the case. So I always like to get a sense of when I talk to my guests I want to find out what's happening within their country from an economic point of view and in the surrounding area. How would you characterize the economy in Thailand right now? Well, economist and strategist tend to classify Thailand as a failed state. But when I look at society in Thailand, especially here in the north and in the eastern part, which is Isan and bordering uh Laos and Cambodia, the country is very sort of peaceful and laidback. And compared to other countries, foreigners who travel to Thailand, they tend to love it. They tend to love the country because the people tend to be friendly. And one of the qualities of the country is that it has a very large land mass and the population is not that large compared to say Indonesia. Indonesia's population is more than three times as large as Thailand's and uh the same for Bangladesh and so the country never suffers from hunger. people always have enough food. And uh one of the great qualities of Asian cities in general, but in particular of Thailand, is that there is very low crime. Now, we have to define crime because there are lots of traffic accidents. And I worry more about traffic accidents than whether the stock market goes up or down because I ride motorcycles. I mean, racing bikes and so and the it is dangerous. I'm used to the danger, but it is dangerous. [laughter] >> Do you wear a helmet when you drive your motorcycle? >> Yes, I have several helmets depending. And >> is your wife on the back? I have motorcycles where I could take someone on the back, but I only have one. I have racing bikes that are built for one person and not for many people. [laughter] A side car would be more appropriate. [laughter] Okay, so let's get into it. I want to get your assessment on what's happening in the world right now. Before we do that, I want to reflect back on 2025. It was an incredible year by all respects. S&P was up 16, the Nasdaq up 20, gold up 60, silver up 140%. Even the Canadian stock market was up 30% last year, Mark. But when you reflect back on 2025, what surprised you the most? I mean uh it didn't surprise me all that much but it was sort of a surprise nevertheless uh the strong increase in the price of precious metals. I I p had predicted already for years that gold and silver would go up, but I didn't uh know that it would happen last year and to the the extent it happened. And number two, you said it was a great year. Yes, but it was a great year for some max stocks and some semiconductor stocks. But the broad market, the US, say the equal weighted SNP didn't move up strongly and foreign markets significantly outperform the US. So I apologize, it's the code. Anyway, so now we have this uh sharp increase in European stock markets and uh very strong increase in the emerging market complex. I mean the emerging market ETF EM was up close to 40%. And some markets were up 50% and so forth. So it was a very good year for some stocks in emerging markets. Not all in the Indonesian ch I mean in the China stocks didn't do particularly well including uh Indonesia, Malaysia and Thailand. But I think this year will be the year where these markets these emerging markets that have lacked behind will take off. Well, very interesting. So, let's talk about 2026 and what to expect. Uh, first of all, I want to look at the US, okay? And when you look at the US economy right now, it continues to hum along at 3%. Scott Bent said he thinks it could grow to 4 to 5% in 20126. We just saw unemployment numbers for the month of December. They were 4.4% down from the last reading of 4.6%. We have the S&P out at 7,000, an all-time high. All looks good in the world. What's your take on the US economy as it stands right now? Do you have any concerns going forward? >> I think that the figures are fudged. I think the figures do not reflect the reality for most people because the US government understates or undercalculates the cost of living increases. Say you can easily make GDP grow by 10%. But if inflation is 12%, it doesn't help you much. You understand? You have a decrease in real economic activity. And so the way the government calculates GDP does not really reflect what is happening to the ordinary household. I'm talking about the ordinary household and not the people that benefit from money printing which are idiots like myself who are in the financial sector because we in the financial sector and there I would include Wall Street. We are the first one to receive the printed money. We then the financial sector will distribute that money. It flows to the say the private equity funds and to the fund management companies and from there it flows further into businesses and so forth. And at the very end it flows to the workers to the middle class [snorts] and therefore the workers they have declining real incomes. This is a fact. And the qu the big question is how do you measure GDP? Because say if you take the figures that were used for inflation in the 1970s and early 1980s, then GDP is actually contracting. And there's an individual who calculates these things based on the way the CPI was calculated in the 70s. The old method and his name is John Williams. And when you look at his calculations, you scratch your head. How is this possible? Uh his inflation at the current time is around 10% peranom. These are cost of living increases and I bet you your cost of living increases are more than 3%. They are in the order for most households in the world around 5 to 12%. >> I will not argue that point at all. So you touched on a a couple of very interesting points there. First of all, you talked about the money supply and I just want to throw out some numbers here for the benefit of the viewers. In January of 2020, the money supply in the US is measured by M2 was 15.4 trillion. Okay? And here we are 5 years later and now it's over $22 trillion. That's an increase of 42%. A lot of people don't look at the money supply, but this is what's causing all the issues. You touched on inflation, and I would totally agree. Anytime the government throws out a number like inflation at 3%, I just double it right away. And um so I would totally agree with your assessment. It's somewhere between 5 to 10 or 12%. I mean you look at some of the prices in the past year like the price of coffee it's up 30% year-over-year. Ground beef is up 20%. Even the price of bananas is up 10%. Bananas never go up in value or up in price. So we got a real problem with inflation. I totally agree on that. Well, I mean, it's funny because uh I'm a believer that inflation or co let's call it cost of living increases because when home prices go up, when rents go up, when stocks go up, they call it all a bull market or whatn not. But the reality is that uh when uh the home prices go up, it's also a symptom of inflation. And when stocks go up and commodity prices go up, it's a symptom of inflation. And that is the difficulty when you look at when you talk about inflation. Inflation would not cause any damage if all prices everywhere would go up at the same rate. You see? But now what happens and this was observed already in the 16th century by copernicus prices go up here and then they go up there and then that the back there and so forth and that causes a lot of disruptions in the economy and uh at times I'm saying at times it's possible for workers to move ahead because the wages go up more than uh the prices of of goods and services. But at the present time the wages go up less than uh the prices of goods and services and so the real incomes are going down. >> Yes. And to your point >> to your point I'm making the same wage that I made 10 years ago. I kid you not. Meanwhile, the price of every good, service and asset has gone up 30, 40 or 50% just in the last five years. >> Yes, absolutely. But I want to explain here one one fact that is frequently overlooked. At the present time, the wealthy people have become incredibly wealthy because of the money printing. Because nobody on Wall Street that is receiving the money from the Fed, the the the newly the newly printed money comes to Wall Street, they are never going to criticize the Federal Reserve or the Treasury Department and so forth because they benefit the most from money printing. So you have an industry that is huge, the financial sector industry, and I'm not complaining as a participant because I benefit from the monetary policies, but as an economist and as a historian, as an economic historian and social observer, I criticize the Fed, of course, because it's very destructive for a society to do what the central banks have done [clears throat] essentially in the 20th century because 19th century we had very strong economic growth both in Europe and in the US in terms of per capita increases and we didn't have a federal reserve and the price level in 1900 was no higher than it was in 1800. And the population had grown from 4 million in 1800 in the US to 80 million. >> So, >> so you can have economic growth and no inflation. Uh the Federal Reserve will always use this absuse Keynesian. uh but canes was maybe useful at the time [clears throat] and only to a limited extent but you have to understand when Kanes wrote his books government spending in the economy was around 10% of the GDP now it's around 50% in most countries So essentially, you're saying if you're long assets in this economic environment, you're in good shape. But if you're not, you're totally screwed. >> That is exactly the way it is. If I look at uh people and uh the wealthy people I went to school with and so forth, the ones that are still very wealthy are the ones that had assets and they didn't lose these assets through divorces and through estate fights. You know when someone dies in in the western world when someone dies the usual thing that happens is that the relatives fight with each other over [laughter] the inheritance. >> When it comes to money all bets are off. >> Yes. Correct. So, we talked about the strength of the the US economy and also the risk for higher inflation. And I want to get your views on the Fed because the Fed has been very doubbish and we have no idea who the new Fed governor is going to be, but it could be announced any day now. But whoever it is, they're going to continue to cut interest rates. We have another Fed meeting coming up at the end of January, another one in March. But what's your take here on interest rates? Because it looks like they're going to continue to go lower. this is only going to feed the economy and drive growth and also drive inflation higher. >> Yes, your observation is absolutely correct. But one thing I want to say and this was already discussed in details by Milton Freriedman when asked uh does the Fed control uh interest rates he said no they don't control interest rates they control one rate which is essentially the Fed fund rate and I have to say here if you push down the Fed fund rate into say negative territory, then a 10 years bond yielding 4% could appear to be relatively attractive. But if the less than zero interest rates or as Trump suggest the 1% by year end [laughter] leads to higher inflation as you suggested and to higher long-term rates. Since the Fed embarked on cutting interest rates more than a year ago, long-term interest rates have not gone down. they've gone up and in my view looking at the bond market action you know just how bonds trade I have the view that a big move is coming with bonds either shooting up in other words reacting in my view to an obvious recession and then you would have bonds going up in price and yields coming down. But the other possibility is that bonds go down in others [clears throat] yield up. And that can happen if the Fed cuts rates at a time when there are still inflationary pressures as they are now. There still inflationary pressures everywhere. [laughter] I have to yet see someone who cuts your insurance premiums for the house and for the car. And I have to see yet someone who cuts uh the health care expenditures in hospitals. >> Only the Bureau of Labor Statistic has in their statistics health care costs coming down. It's a complete nonsense. Everybody knows that. And I actually am surprised. Not that I ever thought that Wall Street was particularly honest. [laughter] I I worked for Wall Street for a long time. I mean 40 years. So I am quite familiar with the business practices. But that nobody criticizes the Fed's policies among the economies, you understand? And among the top executives of Wall Street firms that surprised me. I'm always kind of feeling like I'm the only one who criticizes these characters, but they need strong criticism. for having essentially uh financed a huge bubble in government spending and you see when you talk about credit I think it's very important to make a distinction for what is credit used for say you and I we run two different countries And uh you are wise and prudent and intelligent and you have deficits in government spending. I mean in in your finance, budget uh deficits, but you use the money to build roads and railroads and uh to pay for education that is say desirable. And I run a country and I encourage consumption uh mostly of foreign goods [laughter] and uh and uh I encourage government spending that gives the impression that everything is fine. In other words, subsidies. You know the the government in most countries about half the money they spend is for subsidies. social securityities the subsidy and so forth and so forth on and my view is that these subsidies are actually very negative for society. I think people should take personal responsibility and not depend on the government to give hand them money. >> Oh, I agree with that 100%. And unfortunately in the country I live in they do the opposite of that. So, I want to get your views on the US dollar. Uh, the U year-over-year, the USD was down 10%. And if we we both agree that they're going to continue to cut interest rates in the US, where do you see the US dollar going here in the coming year? >> This is a very good question. What do you think where the US dollar will go? [laughter] >> I think it continues to fall. >> Yes. Good answer. But fall against what? Because it's not not likely to fall much against say the the Venezuelan real. [laughter] is not likely to fall much against the euro but it has fallen of course much more than what you say the 10% against gold silver and platinum you know this is the point in an inflationary environment and I have I mean plenty of books on the subject of inflation and economics in an inflationary environment What happens is that money becomes very uh unreliable as a unit of account as a store of value. Anyway, you don't want the one thing that you don't want to own in a high inflationary environment is cash and bonds. But the bond portfolio may not be as bad as the stock portfolio depending when you buy it. Because bonds in the US are reasonably priced compared to bonds elsewhere in the world, say in Switzerland, [laughter] you buy a 10 years bond, they're practically less than half a percent interest. So that supports the dollar. And my view is if someone ask well why is gold and silver so strong or has been so strong? My view would be because the market begin to appreciate that the cost of living increases have been much higher than what governments have published. And then they say to themselves, we have money. Some of it is in our real estate. Some of it is in our stock portfolio. Some of it is in commodities or in in a collection of books or stamps or art or wines or whiskies whatever. And uh then they have also cash and bonds. And then the question is if safety becomes an issue or if a uh store of value becomes an issue and someone has a $100 million or a billion dollars and he says to himself, "Okay, I'm exposed to the financial markets because if Jeff Pess Amazon goes down by 50% % then he loses 50%. Then these people who have money including myself and we say okay we put some of our cash in gold and silver and platinum because whatever money they will print these assets that cannot be multiplied at the same rate like gold like paper money these assets will appreciate in value and the same for paintings. That's why you know art has gone up so much in price. Of course there are there is some art and some some commodities that go down but in like oil is very cheap at the present time. If you if we measure it against gold then oil is very very low at the present time. And But I don't think that uh to say the dollar will go down is uh is necessarily correct. Uh maybe it stays stable against other currencies. I mean interestingly enough I said to you at the beginning Thailand is a failed state what economists call them. I don't think so. But this is the view of some people. But last year 2025, the part the currency in Thailand went up 10% against the US dollar. It's not bad. And everybody was surprised. They don't know why it's so strong. They say it's because the the country thrives on scams. That's that's of course nonsense. The scams are much bigger in other countries than in in Thailand. I'm not saying that they don't exist, but uh the law here is quite strict. Mark, the uh you were talking about gold and silver and why it's been going up here in the last uh past year, but many people say that the move we're seeing in gold especially is just a referendum on the US dollar and also the economy. It's just a reflection of how bad things are. What What's your assessment of that statement? It may be true. But to be fair, if I look at the global economy, I think that Europe is in a bad shape. I think the US if I look at everything you know the the government debt and the deficits and so forth I think it's not sustainable but I would have told you it's not sustainable 40 years ago and it's we're still there. I mean in my life there are a few things that surprised me. I expected China to open up and to become a a wealthier country but and I wrote the book on the subject tomorrow's called Asia's age of discovery that was written more than 20 years ago but the speed at which China became a dominant economy in particular in science and technology ology. That is something that surprised me also me myself. Although I criticized other people who said China will produce the goods, you know, the cheap textiles and garments and toys and so forth. And then western company put the brand on it and make the money and so forth. This wasn't the case. The Chinese have their own brands nowadays and their own technology. And if you look at service by international organization about the best universities in science, technology and engineering among the 10 best, you usually have eight or nine Chinese universities. And MIT is lucky to be on the list among the 10 best. lucky. This is remarkable. And you know this is if you have a country like China or India and you have a billion people, the probability that you have 10 geniuses is higher in a country with 10 with a billion people than in a country with Switzerland with 7 million people who most of whom are asleep [laughter] because they're so rich. Mark, just because we've moved out of the US and started talking about Europe and China, I want to get your views on some geopolitical issues that that are happening right now. We still have war in Russia and Ukraine. We still have hostilities in the Middle East. We have the situation in Venezuela, Greenland, who knows what's going to happen here. And just recently, the president said that he has the US military ready to hit cartels in Mexico. We don't know what that means exactly, but it sounds like uh there could be some issues going on in Mexico pretty soon. But when you look at all of these events, what concerns you the most? >> Well, what concerns me the most is although I would have voted on two occasions for Mr. Trump, what concerns me is his uh inconsistency and he talks constantly about issues about which he has no clue. He is a typical interventionist in a negative way. You understand in economics we have different theories that the the classical econ economists like Adam Smith and so forth they argued for uh market economist the market mechanism and they argued against a very large government. The extreme of interventions is the planning economy of communism and socialism which is a complete disaster. I can take you or could have taken you to any country in Eastern Europe in the 1950s post second world war and even up to the 70s and to Russia and to China and to India everywhere where they had communism. The standards of living of people were substantially I want to stress this substantially lower than in the western world where they had free markets. And the moment these countries opened up and adopted free markets under Deng Xiaoing in 1978 in China and in Russia later in 89 and so the moment these countries adopted free markets and uh the capitalistic system or more capitalism and less state interventionist that propelled these countries upward. And if you look long-term historical trends, Napoleon, he didn't move his armies at the faster pace than Julius Caesar 2,000 years before. And then some British had the great idea to build a train. And since that we have railroads, people could move around the world at a much higher speed. And then after the introduction of the uh aeroplane, but basically the industrial revolution was [clears throat] enabled by the cap capitalistic system that must be taught to the socialists who always criticize rich people. What's wrong with business being rich? He has enabled the whole world to buy products at much lower cost than in a department store. That the same railroads in the 19th century allowed goods to [snorts] be shipped from the countryside to the cities. And so the prices of meat in New York fell. And when prices fall and the wages stay the same or go up, the real incomes increase. That is relevant, not the GDP figure that Mr. Trump and Mr. Bush publish but uh I'd like to make one observation here because economists and strategists and people and politicians especially in the western world they continuously attack China. I mean there's nothing China can do well at the present time. It wasn't the case 10 years ago, but now everything is China is bad, is evil or what not. But the point is this. I remember my grandparents were one of the first people in Switzerland that had a TV, the television, and my father and my uncle bought it. And the TV set had uh just one or two programs and it only broadcasted say uh between 6:00 in the evening to 10 p.m. and then it closed down because the Swiss had to go to bed to work in Switzerland hard anyway. That what? >> Yes. >> That what I want to say is for now I can buy 10 TVs for $2,000. >> I know it's crazy. So the president has said that using the military is an option to take over Greenland. And if that were to happen, I want to get your thoughts on what Europe would do, what NATO would do. I don't think that Europe would do very much but in the world I want to say this in the 50s and 60s the US enjoyed a huge prestige because largely they had won the war. Uh without American help, the Europeans had would have been overrun by Hitler first and then by Stalin. Stalin would have moved west uh to Spain basically. He would have captured the whole of Europe because Europe was destroyed by the war. But the Americans saved that situation. notably George Patton because he was [laughter] aggressive character and a brilliant strategist, a brilliant military man. Uh difficult in character, unpredictable but very capable, very educated. He understood strategy. Anyway, uh the Europeans would do nothing if America takes Greenland. Nothing at all. They they not in a position to do much. But America would lose a lot of prestige. And I think that Trump is a little bit surprised at the reaction within America and internationally uh of people who condemn the American intervention in Venezuela. I mean, I'm sure that Maduro is not a particularly nice person. Whether he was running a drug cartel or not, I have no idea because I'm not there. And it's clear that the countries that aggress that are aggressive, they will always use an excuse to go into a war. I mean, the US is very good at creating enemies. Wherever they go, they have to create an enemy. And I believe you mentioned we have kind of a war in Ukraine and so forth. I tell you my view is that this aggression in Venezuela has brought us much further from a peace in Ukraine than people realized because this is an example of America, a country, a superpower that just goes and essentially conquers another country and then openly tells the world we are going to run the economy. we are going to run the oil and take the oil and so forth. What do you think other countries uh will consider doing? And the US is not the superpower relative to the rest of the world it was in the 1960s. Now the other people on the block that in military are probably as or more powerful than the US and NATO. I mean bricks the Brazil and Russia and China and all these countries uh in my view they're very powerful because of the size of their economies and because of the manpower they can moni mobilize 85% of the world's population. Well, very interesting thoughts and I know we're coming to an end to the time here, so I want to wrap it up and I want to thank you very much for sharing or spending time with us today and sharing your thoughts. If somebody would like to follow you online or check out some of your research, where can they go? >> They can go to our interview. [laughter] No, they can go to a website. It's called gloomboomdoom.com. But a a final thought I'd like to leave is [clears throat] we know the last say 50 years 19 say 1980 to today we had an unbelievable what they call bull market in stocks and in properties and in uh also in bonds because interest rates fell. 1980 the peak in US bonds bond yields was over 15% under 10 years you know and by August 2020 we went down to less than 0.6%. saw an unbelievable rally in assets and in paintings and Picasso and Warhole went up dramatically over that that period of time. And so everybody is conditioned to prices going up somewhere. But what about if prices don't go up but go down? And I think as an investor say for myself, I'm thinking what if prices went down for stocks and other assets? How would I react to it? You understand? At the present time I wake up in the morning or in the afternoon in my case and I feel quite happy because prices are up and my assets have gone up in value. Now let's assume it goes down. I'm always thinking how will I react psychologically and I think probably the right way to approach this issue of price declines I'm talking here about the deflationary environment for asset prices not necessarily consumer prices but asset price would be to think let's consider a strategy that is geared or which or which objective would be to lose the least money when things go bad. I give you an example. Traditionally, people have said, "Oh, real estate always goes up." So, they bought commercial properties in New York and Los Angeles and Chicago and everywhere. And what happened to commercial properties? Some went down 80%. Not all, but some went down 80%. Entire neighborhoods are half empty and so forth. And so I think maybe the best in an in such an environment where prices go down for whatever reason. But I could imagine that in World War II prices will not go up for everything, you know. And uh in that environment maybe bitcoins and maybe gold and silver and and platinum are the best and diamonds. Diamonds are not particularly expensive and uh food. So these are things I this is something I'm considering about because the consensus Bloomberg had a survey of analysts and strategists and economists. None of them were negative about the stock market. They all predicted the stock market to go up in 2026. My prediction it will go down. now go down. Again, the question comes up, what is down? Let's say if stocks went up 30% in the US and the dollar collapsed by 50%. Would stocks be up or down? Yes, in in dollar terms, they'd be up, but in real terms, they'd be down. So, we have to define these things. But I can say that in the last few years stocks, financial assets have been have been tumbling [clears throat] against the price of gold and silver. That I can say >> so >> and it may continue. it may continue the longer we have Trump and as I said I would vote for him any time compared to say Kamala Harris and uh Bush and so forth but as an individual as an economist he's meddling into everything is a disaster because he knows nothing that's the problem he has not he is a clueless individual That's true. Most most politicians. >> Yes. But especially but some people are ignorant and they don't interfere in everything. You know, they admit their ignorance. >> So the message you want to leave with everybody is just stay long gold and silver. That's how you protect yourselves during these. If you could, if you could, the best strategy was would be to sell short any politician in the western world. Any and I'd include also the academics at universities that most of them most are leaning to the left. Well, these are very interesting thoughts, Mark, and I want to thank you once again for spending time with us today, and I will have a link below to your u your website and our show notes. Once again, thank you, and I wish you and your family all the best in 2026. >> Well, I wish you of course the same and to your viewers the same. But to your viewers, I I want to repeat, I think the notion that everything always goes up or goes up in the long term is wrong. because I' I've seen after the first world war the destruction that occurred in asset prices and in territories uh and then the collapse of colonialism after the second world war and real estate in the whole of China real estate in the whole of the Soviet Union became worthless that people must Understand? That's why I'm always telling you my investors, they need to diversify. You can't hold all your assets in one place. So, I would hold maybe some assets in Brazil and Argentina and uh maybe some in China and maybe some in the Soviet Union and so forth, but not everything in the US or in Britain or in Canada, [laughter] but the Canadians. >> Let's touch on the Canadian next time we speak. >> The pioneers have become socialists. Oh, so true. So true. All right, once again, Mark, thank you. All the best. >> Well, thank you very much and uh all the best to you as well.