Short the Ordinary & Long the Visionary | David Murrin on @SouthbankInvestmentResearch

Summary

• Market Outlook: The guest forecasts a severe equities crash, citing a narrow U.S. market leadership and a bursting “doomsday bubble,” with the NASDAQ at risk of a rapid downside cascade.
• Commodities Cycle: He expects a deep interim pullback (“demand slap”) after the first surge, before a powerful third wave in the broader commodity supercycle, with oil potentially dipping to $60–$70.
• Safe Haven: Strongly favors gold over silver as the primary hedge, noting it may avoid the typical initial selloff during equity routs; gold miners are highlighted as his preferred zone over the medium term.
• Defense Spending: Anticipates a major rearmament cycle and argues Western nations must dramatically increase defense spending, underscoring opportunities tied to aerospace & defense capabilities amid hypersonic and drone-era threats.
• Geopolitics & Supply Chains: Warns of heightened China decoupling risks via sanctions and a potential Taiwan crisis, driving lasting supply-chain reshoring and structural inflation.
• Inflation Regime: Projects persistent stagflation fueled by money printing and deglobalization, with long-run CPI potentially far exceeding 1970s peaks.
• Sector/Company Notes: Consumer-sensitive mega caps (e.g., Meta and Amazon) are cited as vulnerable, illustrating how narrow leadership could accelerate a broader U.S. market downturn.

Transcript

Hello there folks and welcome back once again to South Bank Live, our weekly YouTube broadcast where we take a deep dive into what's going on in the markets over the past week and try to figure out what's going on beneath the surface. Now this evening uh we have a very special guest. We've got David Mur who I interviewed a few weeks back over at the South Bank headquarters and who will be uh today answering a few questions from the audience and indeed uh debating some of the more recent news as the world is of course moving at a very rapid pace. Uh good evening David. How are you getting on at the minute? >> I'm very well thanks buyers. Looking forward to a new form of communication with you. Two have been fabulous. So uh let's see how it cracks on on on a day which I think is really significant because I think the equity markets in the US are finally cracking and cracking in a big way. So I think today's an interesting day to be here. [snorts] >> Well, it's uh it's good we've got our timing pretty pretty well. Of course, timing is everything in markets and uh we shall of course be uh this is a recording as well. So folks who couldn't join us this evening uh you of course will be able to to get a recording of this or if you have to dash away in the middle it's uh it's all right. you can return back to this. But a very good evening to everybody who has joined us here on YouTube or LinkedIn or or Facebook or anything like that. Hello to HK Barry and Andrew and Robin and John. A lot of people in the chat already which is great. Just to kick things off uh David you are a uh an acclaimed geopolitical and historical uh you know forecaster. You are very good at taking these models of the past and applying them to human behavior and then making predictions based on that. perhaps you could give uh give our viewers this evening a brief intro to yourself and your very uh your very adventurous career which has spanned uh all manner of different sectors. Look, you can read all about my career on the website. Essentially, it's, you know, starts off as a physicist, geohysicist, ended up in Pap and New Guinea as a seismologist, exposed to the tribes people and watch the first collective behavioral patterns. Just completely changed my perspective on who humanity really is. But of course, they were not like us because that was looking back in the past. ended up strangely enough years later sitting on a floor in JP Morgan joining one of their programs which is brilliant actually and thinking what do I know about finance and as a good scientist as you watch everyone else and suddenly I realized that we modern man are no different from papinians we're collective maybe higher thresholds of individuality but there on the trading forward collective human behavior I became fascinated by that full stop and especially the concept of predicting future price moves as a directional trader became one of the first successful prop traders in the bank and very quickly built a whole organization which predicted markets based on price way ahead of its time changed the whole bank's risk profile what do you do with that you set up a hedge fund that's what I did in the early 90s way before people could spell hedge fund CEO of my own hedge fund uh all the way up until I stopped managing money in 2013 when I realized they're just going to print more money than I wanted to fight and there was another time to come back and in between that after 911 I had this fundamental realization that what if that you know America was the last of the western Christian worlds or systems and we were going into a terminal phase of decline. So I started to reverse engineer price models into behavioral patterns built the five stages of empire. Uh and that model I started to apply to understand where every country was on the curve. By 2002 I'd been able to predict that America entered decline the fifth stage. China was in the rise and they were part of super systems behind them and the time ahead of us was going to be pretty tumultuous. At the same time we recognized the Kwave cycle of 56 years split by two that's sort of 23 years that started in 2000 would peak around 25 not far from where we are now would bring about a commodity surge which is a key investment thesis and we got the whole move from 0 to 10 and essentially bring about World War II or the risk of World War II as China challenged America. We're talking about 20 years ago. Very accurate timing, very bold kind of construct, but it was very clear to me. Uh, and then breaking the code of history, published in 2009, which was the essential thesis I developed seven years before. Um, as a dyslexic, it was probably my life's greatest achievement to be able to write a book. And funny enough, it was brought about when I had my second and third children who were twins. And the night I sat there feeding them, thinking, what sort of world have we brought them into? I better write this book to warn people of where we were going and how we repeat our patterns. And that's the efficacy of breaking the code of history. And it's frighteningly been accurate. I wish I could say it was a load of crap because life would be a lot happier, but it's proven to be remarkably accurate. And we're now living out what I call the decade of catastrophe of consciousness where the humanity survives this clash of hegemonic power with weapons that are, you know, so powerful to destroy us is really the big issue in front of us. and all the things we're seeing in the marketplace with large printing of money, that cycle coming to an end, the Chinese challenging Russia, they're all linked to the things I predicted, which led me to start global forecaster in 2019. And my conclusion was really simple. Setting up another hedge fund and making lots of money for me, wasn't really going to help anyone, especially my children and our children. And as soon as you manage money, you can't tell people why you do what you do and when you do. So I created global forecaster which doesn't manage money lets people tap in and pay for the IP because it's relatively cheap for them. But most importantly I wanted to cascade the ideas into lateral people that will then start to affect change and change the course of this rather terrible path ahead of us. And that's exactly what we've been dedicated to in the past two years. Alpha generation has been off the charts as has the success of our geopolitical predictions. Now I must first introduce your ideas through your book breaking the code of history which I would thoroughly recommend to all our viewers. It's it's a big one but it's uh definitely worth the read and it's covers all manner of different aspects of human history uh and you know political structures, market structures uh demographics, things like that. It's a great great read. But David, looking more more closely, you say uh you you also wrote the other book uh Red Lightning: How China uh won World War II and uh well, sorry, how the West lost World War II to China in 2025. Uh or I guess it depends on which way you look at it, right, for uh how China won World War II or how the West lost World War II. But could you walk us through a little bit about that? because I think uh for the purpose of this conversation, it's something I'd like to I'd like to dig into a little bit further because of course we are very close now to 2025 and we are seeing this uh stirring uh where conflict in Europe is now uh is now accepted pretty much. This is something that nobody thought was possible for a very long period of time and yet has now uh reared its head and it has changed the way people look at markets and commodities. What's your what's your thoughts on what is going on with Russia and Ukraine at the minute? Because while we did have a conversation about this a few weeks back, uh the conversation with the uh the situation is fluid to borrow a Dick Cheney line. >> Um so you know obviously I had in the back of my mind this commodity cycle that was going to lead to conflict. So defense is actually one of my fascinations and of course only in 911 could I start to equate how it might look and relate to the other outside world and I was really you know could see the rise of China and you know whole conduit they were in that would lead to a massive arms race and the arrogance and hubris of the west in ignoring that just staggered me as it went along. They were so desperate to grab the money that was on offer, they became blinded by the threat. And I talked about this covert manipulation of our society to encourage us to build their manufacturing base that they would then put back against us in an arms race we couldn't match. And lo and behold, we're in that situation. In 2015, when the defense review came out, I was limping Richard tearing my hair out. So I wrote my first defense review for the UK which talked about what we should have done. And I got it out there and some people listened but you know just carried on. Where's the threat? Where's the danger? And as we came into 2020, you know, at the time of the pandemic, which I'd also predicted in my book, it would come from a Chinese weapons laboratory and it would be an asymmetric threat. So I was very alert to it. All my clients knew about it on the 5th of January. How it took the governments three months to work it out is beyond me or six weeks, 10 weeks is really incompetence and collective linear thinking in my opinion. But essentially, >> uh, sorry, I'll just get your phone for you. >> No, Robin, >> or my phone. Um, so I decided to mount a real campaign to explain to people and I wrote a defense called now or never. And people laughed at the time and said, why are you bothering? Because it's all about the pandemic. And so you don't understand the pandemic is also part of the chain of the disabled and to the west. In my opinion, it's timing the strategic advantage given the Chinese. we should increasingly be alert. And I got this um piece out. I got it into number 10. I got into the uh Ministry of Defense and the Treasury. And three weeks later, Boris made his statement about defense really mattered. And he took all the words out of now or never. I was thinking, "Wow, did that really work?" Of course, the defense review itself was disastrous, cloaked in, you know, little increases in changes. We literally watched our capacity be destroyed in the third disastrous defense review to the point we couldn't defend ourselves. And there's a good reason why Putin is aggressive is because Britain as one of the key European states is failing to show and have failed to show the intention to defend itself. Weapon systems like ASW systems let Russian submarines creep right up to our coast. They could never do that in the Cold War. Imagine those signals pouring through Putin's information packs. It was just another thing that made us look weak. Our army was, you know, disintegrated to brigadeiz actions. So in desperation uh and I'd had already been approached by various services to advise them and I had been doing that in my capacity the ones that wanted to affect change. I thought how can I explain to people that we are going to lose if we do this and the simple mechanism is that everything that we see with Putin and China comes because US carrier dominance has been threatened by hypersonic weapons. Now I watched these develop years ago. I warned people about them. Now, we know the word, but most people don't understand. They're designed to kill carriers because if you kill carriers, American power dissipates. And red lightning is all about how America loses and Britain, all its carriers, barring one, in the first 20 minutes of an all-out strike of 10,000 missiles with hypersonic warheads. And then the second part of it is the technology we could employ to make our carriers invulnerable to such attacks. And it's a wakeup call to just not accepting this asymmetric challenge and change of balance. And it's got all sorts of responses from people. I think after Russia, people take it far more seriously. Um, you know, I was, you know, as you know, I was predicting that the the whole war in Russia based on the commodity cycles revenues into Putin's hands and his mindset back in November when giving it a 98% probability it would take place and it did. So I wish to be honest I I was making predictions that all turned wrong. I feel much happier. I'm rather alarmed that the rate of predictions and the quality of predictions is so high that we should all be very alarmed. And you ask what you can do. Spread the word. Act as a secondary node like talk about it be alarmed about it. Spread the cascade. And remember the story that in 1936 in March after the Germans invaded the rhinlands. It was the people that demanded that fighter command was developed to protect against the bomber, against the air ministry and the government. And Fighter Command came about through popular opinion and we all know it saved the day in the battle of Britain and gave us the chance to do the CAT um to survive and go to the next phase. >> It's really really interesting. Again, there's so many avenues we could uh we could go down with that. Uh maybe just quickly uh David when you're talking about what uh what World War II or what uh the threat of World War II is ultimately who are the various parties uh involved here? Is China working alone? Is it in in cahoots with Russia? Uh who you know which side is India on? Is it Britain and the US? Is it NATO? What who who is so the main protagonist in this process process is Russia's hegemonic challenge of America without China sorry not Russia China without China none of this would happen because no one can match the scale of the the hedgeimon at the moment or the past hedgemen about to be the past hedgemen so China's key to that and then you have Russia with a different agenda which is now strategically allied to China make no mistake the announcement before the Olympics was a strategic military alliance. They both, you know, the Chinese knew about what was going to happen in Ukraine and they backed off, but they knew about that process. And then you've also got North Korea, which is a satellite of China. It can't afford itself. Yet, it can afford a large army designed to move north south into South Korea. So, you can tick the box that's under Chinese control. And you know what it's there for? It's there at the same time as a challenge to Taiwan. You can assume that South Korea is invaded, too. And then you've got Iran who is ever closer to Russia and China and you got to assume that their nuclear nuclear breakout will take place at the same time. So that's your force structure. The Indians are very much terrified of the Chinese even if they have a strategic past relationship with the Russians. And you can assume the Indians actually are with the Japanese, Australian, US and UK contingent that surrounds China. right now in terms of why China would want to escalate to the level of taking out uh carrier strike groups with hypersonic me miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss miss missiles what would be the the driver here what do you number one what do you hope to achieve and why would you want to escalate to a kinetic conflict in order to achieve >> so the thing you've got to remember is that sea power and sea hedgemony is how you control the world controlled the world through its navy and battleships America controlled the world through its carriers and the Chinese seek to replicate the same hegemonic process. They plan to do it by removing the primary threat which is carrier capabilities. And that thread goes back to the third Taiwan straits crisis in 1996 when the Americans sailed two carriers and a MU group which is a small assault carrier through and it shut down any aspiration for the Chinese to expand kinetically overtly as they had been doing gradually slowly since the end of their civil war and that's when they switched to a covert strategy of getting us to invest in a larger manufacturing base so they could match a more overt strategy of an equalized navy which they've been building. >> Right. But why would be what would be the the cause for a uh you know an allout assault on all >> so what is the cause what was the cause for an all-out assault on Ukraine? It was the point that the aggressor who's a predator decided that the timing was right for him. So what are the constituents? the commodity cycle had given him sufficient wealth to feel like he could afford it over time and reconstituted strategic rocket forces so that his nuclear umbrella worked and there was a threat of it. U most importantly he saw that Biden was weak and there must have been a rush for the door between she and Putin to go first because losing Biden because he dies of old age in office is the worst thing that can happen to them. And after the route from Afghanistan that was a red flag to a bull for an aggressor. So those things happen. So why didn't the Chinese move at the same time the Russians moved? Well, it's a really interesting thing in martial arts I'll never forget. And that's when two people fight one person. No one ever does it simultaneously. The first goes in and the other watches to see what's happening. And that's sort of where China is. It's watching. It's learning from the petri dish of combat. And the Russians are adapting to the combat zone. And you'll see their skill set increase. They're the bottom of the cycle, but they will increase and are. And the Chinese are drawing every lesson out of it to work out what they didn't know, what they need to know, and how basically to cope with it. >> And now the uh the Chinese are getting an awful lot of very very cheap energy as a result of this. If we move to markets, uh as the consequences of this, when you're looking at the markets, generally if you're looking at commodities, uh and you've said you're very bearish on on equities at the minute, what's your current take on it? Do you think uh markets are actually reasonably pricing in the consequences uh of >> so so let's just I think there's an important string here. The big thing is that the doomsday bubble as I call it which is the product of printing money started in ' 01 all the way through the '08 crisis through to the COVID crisis essentially is about the fifth stage of US empire compensating for lack of productivity by printing money and creating leverage that has reached astronomical levels as befits a hegemonic power threatened by a more productive challenger China and finally it's completely run out of steam So we are looking at equity collapse on a scale of 29 squared. That's where we're going. And the fact that Chinese managed to squeeze an enormous through the pandemic force America to print those last vestages of money tipped everything over the balance. And that money could have far better been used for example in the process of creating more defense spending to reduce the imbalances of power that are growing. Now they've all been spent. So strategically it was brilliant. That was his goal in my opinion. Asymmetric economic warfare to destroy the debt structure so the west couldn't fund itself against an oncoming challenge. Works brilliantly. So we're very close to that collapse. It's going to be very ugly. It's going to be very quick. And at the moment I think the commodity cycle that we all see essentially is one that um has completed its first surge. So everyone's bullish of commodities. They all think they're going up and wars make them happen. But actually, I would take the opinion that we're about to have a massive demand slap. So, commodities are very vulnerable to a deep retracement before they continue their next surge. >> What uh what is the cause of the demand slap there? >> It's just quite simply when equities fall [snorts] out of bed, which they are about to do, essentially people's personal wealth disappears. In America, most of it's in equities. Imagine equities drop 50% how poor America's going to feel, >> right? And that just leads to a knock-on in in demand across the board. >> Exactly. Right. >> How long do you think it would take before uh commodities would start rising again after that? >> Well, I think this is going to be the most enormous slap. I mean, horrendous slap. But nonetheless, I think that if you look at the kind of the next step is China makes this move. So if you disable America and the West financially, they they won't resist. So you know you collapse and then the Chinese make their move on Taiwan and then you get more demand. Now now demand has collapsed but now suddenly you can't get commodities because the Chinese you know the whole dynamic between where they're sourced and then you start the next cycle which is the third wave and that turns out to be huge and now you just increase input inflation and stagflation and that's where we are. We're in massive stagflation and I can see that CPI if CPI reached 15% of the height of the K cycle in 75 you rest assured it'll be three times to four times higher at the height of 25. So rampant crazy superinflation is very much after this collapse you need to brace yourself for the next chapter. It's not one chapter and oh that hurt but I survived. It's like the double whammy. And that's exactly what happens to systems that are old. They get entropic shocks, shocks in different degrees. Whether it's hegemonic challenge, it's inflation, whether it's, you know, debt cycles that collapse, they all happen at once and the system is swamped. And we still haven't really been hit by the magnitude of those swamping waves just yet. >> Lead me through the threat facing the equity market. So, we're looking specifically at different sectors of it or just completely uh broad across the board. I think the thing that really fascinating was that the rally that led to that well like massive extension in price which is the doomsday bubble was very narrow. Read any textbook and broad is healthy. Narrow is very unhealthy. So all you need is as we've seen with stocks like Meta and soon to be Amazon. Amazon suffers because everyone's about to get poorer because we've got a cost of living crisis on steroids. It's only going to get worse. So anything that has a consumer element of choice is going to just suffer that you know and then then you get the price comes down now the price comes down and then the whole system collapses because they'll lead you know five six stocks will lead the NASDAQ through the floor and that's the the cascade we're in right now. >> What do you think that look like for the Footsie here in Blighty? >> So the Footsie has been really strong. It's been really strong because predominately it has full of commodities. So everyone thinks it's a good bet. The trouble is in the cycle I've just destroyed, it'll describe the commodities take a massive dive and the footsy just catches up with everyone else. >> So where's the is the safe haven uh just in gold and precious metals or is there >> you know at the moment it is. And at the moment it's more gold than silver. I mean, one of the things that we're going to find out what happens with gold and silver is it essentially whenever stocks have dropped out of bed, the first response is gold gets sold off and then it recovers. I suspect this time it won't, but you always have to be prepared to be caught with your patty pants down. So, just, you know, be mindful of it if it holds its price, which I think it is. I think there's a good chance it's already made a significant low in the past week. If that holds and that behavior changes, which I think it well might, then gold is your best safe haven. >> Now, we do have uh plenty of comments and questions here in in the chat. I think we'll take a a small small adventure through some of these questions before we get back to uh some of the other themes we can explore this evening. This one's from >> I love the one. It's 700 p.m. Why have I missed anything? [laughter] >> Robin asked, "Hello, Boss. Can you ask David Martin where the best place is to hide out during World War II, please? Time to get a boat. >> Well, I think boats as a sailor, I've thought about this. I think the use of nuclear weapons at sea against submarines and targets is probably more prolific and would happen before it happened on land. So, the idea of bimling up and down in your boat and being whacked by some, you know, large wall of water doesn't really appeal to me. So, I put that one in the bin. Um, in terms of places, uh, I think northern Canada is well and truly within the Western sphere of influence and it's m it's wild enough up there that, you know, you're not going to be a direct target. Um, and that's probably my favorite place to be honest. If you want to go to New Zealand, you'll be captured first by the Chinese. You know, you run through the list and it's a world war. It's, you know, and if it's a nuclear war, it goes everywhere. So um that being said, one of the things I think is very interesting is that if you go and look at the warhead ratios of Russia and you look at them when they were first in the in the cold war, there was America and there was Europe and there were certain number of warheads which would have dealt a deadly blow. But you've got India, you've got China, because the deal in a nuclear exchange is you don't just go for the enemy as in America for Russia and Russia for America. They take out everyone at the same time. So no one can stand tall and and will be immune while they go through hell. So actually the distribution of warheads currently from the ICBM [snorts] warhead loads is actually I would say much lower and more thinly distributed than it was in the cold war for its target set. Now that leaves an interesting question that there may well be large holes in that. So I don't see this assumption that you know a nuclear war is unservivable. Obviously depends if you're in London you're probably not going to make it. But you know some of the gaps between you know where these blasts come make it a very different proposition. Now you you suffer from fallout and all sorts of other dynamics. But remember there are civil defense protocols. And if you want to be inspired go to Finland. Those guys have done a brilliant job for six million people. They can all go underground. They build bunkers. And I've always argued that any smart country should have always done what Finland did as long as a single nuclear weapon is available for someone to drop on your head. And of course, we've forgotten that because we thought history had changed. And in our liberal delusions, here we are. [snorts] >> Yeah, the Fins do seem to have things figured out, though. At the same time, half of the reason for that is just because they're so close to Russia. And I wonder with >> Well, it is what's very interesting about them is they're so close that their real threat was a conventional assault. >> Yeah. >> Not a nuclear threat really because, you know, they just get run over first. Yeah, they built a relatively large army, but that's not the first front line. I think it's what is really interesting. They took the responsibility to protect their people and they gave them the best protection. Now, I would argue that from the time that Johnson got into office, one of his greatest failings is the attendance to defend the realm. It's been compounded because he's done the right thing, I would argue, by helping Ukraine. I think he's linked his own political survival to the survival of Ukraine quite rightly because that's the only thing that stands between him and being kicked out. But in the process of resisting Russia and leading the charge for NATO, he has refused to spend more money on defense and Sunnak is in the way and that's completely unacceptable. We should be spending 200 million pounds right now immediately and beyond 5 to 8% because right now we've just prodded the bear and we are the number one target. I do not understand how the electorate can accept that or that any leader considers themselves a leader when they increase the risk parameters without mitigation. >> How close do you think we are to a nuclear exchange? >> Um okay so exchange nuclear let's talk about this. So um a full-on mutually assured destruction like eradicate each other. I still think all the barriers are there. No one wins. The Chinese would be very pissed off if the Russians triggered that because the Chinese believe they could inherit the world and they'd consider Russia to be an impediment to doing that from a radioactive dust cloud. So, believe me, the Chinese don't want it because they see a route to success and hedgemony with a non-uclear avenue. Um, the West don't want it and Putin doesn't want it, I'm convinced. But what they did do is they created a strategy called deescalation which I commented on when it was published in 2019 which was okay we've got these lovely weak western leaders and intention is everything. The evidence is overwhelming that success in the Falklands meant that Margaret Thatcher was perceived to be the iron lady and that in an invasion of Europe, she would use nuclear weapons if necessary and the concept that West was weak and full and you pushed them over with an invasion fell apart because of her intention manifest in the success in the Falklands war. Now it's the converse when Putin looks at Biden man that you know it's the opposite. When he looks at the western powers of Germany, it's the opposite. He looks at France, well, you know, he whispers in his ear and that's not going to work. And he looks at one country and it's Boris. Well, that's not really impressive either, although he's more impressive than the rest. So, essentially, he created this mechanism whereby I drop a small nuclear weapon on the battlefield, maybe 500 tons, thousand tons, make it an air burst, no fallout, and I demonstrate I'll go higher, and I scare the out of them. That's what we're living with right now. And we don't have a strategy to compensate. And if he does that in Ukraine, it falls outside our envelope. And there is only one way you can do that and say, "We will consider Ukraine to be part of NATO if nuclear weapons are used." Suddenly that's different. No gray zone. But we haven't thought like that. Instead, what he did was code the Western leaders to act like Pavlo's dogs and basically we can't start World War II. We can't escalate it. And it created the outcome he wanted, which was a bubble in which he could conventionally rape and pillage Ukraine untouched. And then the response by the West is keep slithering weapons in below a threshold of response and hope we can keep Ukraine alive. I don't think that's acceptable because even if Ukraine stops right now, Putin has the upper hand. Everywhere he goes, he can use the same deescalation policy to intimidate any country he wants. So our security paradigm is irrevocably fractured unless we face him and face off against this deescalation policy by manifesting intention. And the simple concept of that, if you've ever all seen a bully, is essentially being nice to a bully begats more aggression. Putting your toe next to him, giving it the biggest thump in the face, and decking him is the fastest way to address the power balance. We have to do that with Putin because fundamentally he's a bully and a street fighter. >> What do you think is the likelihood of that occurring? Uh it is is a very interesting um is a very interesting idea you know to say Ukraine is part of NATO if it suffers a nuclear attack. But how do you think there is a likelihood that NATO would do that? >> The main commander of of of NATO as in Biden is is I call him an invertebrate and I I'm not being rude. There is no courage or spine or understanding of the concept of deterrence and intention and peace. just acquiescence and appeasement. Uh look at France and I'm afraid Macron isn't going to do it because I nicknamed him the Putin whisperer for a reason. Putin got inside his head and Britain is the other country and we don't have enough strategic lateral leadership to get ahead of the curve. One of the um speeches I gave recently to group of generals was essentially the mode of a peaceime armed force is linear because linear people like structure. They like predictability. They're very good politically and in peace time you end up with linear leadership and in wartime given enough time it adapts to lateral leadership because lateral people think ahead strategically find how to go around the back door and the lateral people are actually the warrior race within the subset with subset within humanity. So the problem we've got is we've got a lateral leader in the form of Boris without any personal discipline and strategic construct advised by the majority of linear people who are constantly behind Putin's actions. Everyone thinks we're ahead. Oh, let's go and have a let's go and have a an economic war with Putin. We'll beat him. No, you won't. as I described at the time, let's take a knife to a gunfight and let's go and try and beat an economy that's based on commodities in an upward commodity cycle, an inflationary cycle where they naturally don't suffer from that because they sell at a higher price and we're a consumer society. We should have learned in the peak of that cycle in 75, we almost lost the cold war. History is repeating itself. So, you need lateral people to get ahead of the challenge. Set set the goals up so you are ahead at all times. And the first thing we need is full naturalization of our leadership because that's the first thing that creates different outcomes >> on the strategy of Putin to escalate in order to deescalate and the the use of tactical nuclear weapons, small nuclear weapons. Uh from my understanding, I don't believe any of the NATO countries have tactical nuclear weapons in any in any size. So if Putin were were to try and do it, there wouldn't be much retaliate with. They do. Um the French have more. America has tons of them and Britain doesn't. And if you noted in the last strategic defense views a specific note to develop and they increase the number of warheads from 180 to about 220 and specifically small tactical nuclear weapons because they realized what was missing >> and those could be deployed then in the event that uh you know >> Yeah. I mean, they're essentially the smallest nuclear weapon you can make uses 7 kg of enriched uranium and yields about 500 tons. It's a suitcase bomb and you stick them in a warhead or an artillery shell. And if you put them in as an air burst, they don't suck up all the earth and make it radioactive. They create a low over pressure, which a big thump, which is a little bit like the Lebanese explosion. So, it's much more about the word nuclear than it is about the definitive impact. Right? Obviously you can scale their use their their yields their sizes but that's one of the things that people kind of failed to understand. Nuclear weapons have a whole load of different yield properties and you know you can use them in different ways with different outcomes. We just didn't have them and Britain didn't America does still does and Putin decided to use that gap as his strategic lever to create the bubble to start intimidating everyone conventionally. We do get a uh a comment here from uh from Rune who asks uh when we're talking about equity crashes. How about stocks and funds linked to South America and Africa? Can they hold up better? >> No. Uh if you look at the emerging market world, it's actually been leading the fall. So if you look at the MSCI, it made its peak last year somewhere around February, March. It had the same fifth wave extension dynamic as the NASDAQ and literally led the fall. And if you want to kind of see what the NASDAQ will look like, have a look at the MSCI. And now, you know, in terms of Africa, big big fan of Africa, but you know, Chinese money's everywhere. Look at South Africa. CCP are completely, you know, into the bought the ANC. And essentially what they really want is the control of the Cape trade route. Now, Britain's smart. We need to really battle to get the eastern western Cape for to sever itself in this economic trauma that South Africa is going through so we can get hold of the Cape trade route again. All the geostrategic concepts are back. I love Africa and I think as long as the US Navy can protect Africa from the force of a Chinese navy having a migration and prosecuting a debt issue, it could be safe. But I do think it's a battleground that has to be cleared of Chinese and Russian influence. And I think it would be in the case of a global war. But, you know, again, uh, you'll suffer the same downdraft as everywhere else. >> And this is from Jamie who asks, "How would Mexico likely be affected by a nuclear war?" >> Well, you know, that's the going back to the it it has a trade relationship with America, which has obviously be constrained somewhat as as its economy went to the size of a sixpence. And at the same time, probably, you know, its industrial bases wouldn't be allowed to survive either because it would just substitute. And so everyone gets dragged into this. If you're if you are targeting your nuclear weapons for a full exchange, no one is allowed to survive it. So that's how they thought in the Cold War. And I'm sure they still think. >> This is a uh a comment from John who asks when or uh who asked when Theresa May was prime minister. She said one day in the comments, "Mr. Putin, we know what you're up to." Any idea on what she meant? Was it cyber or was it Ukraine? >> You know what? Um I have to say she's one of the great disappointments in prime prime ministerial um office and I think actually she holds a lot of responsibility for the path towards Ukraine. So one of the things that Putin wanted to do was dismantle the cold war relationship between weapons and mass destruction essentially between the group is nuclear, chemical and biological. And the rule in the cold war was use any one of them and we'll use one of them back as in use a chemical biological weapon you'll get a nuclear weapon on your head. And there's no doubt in my mind that he went about severing that linkage whether it was in Syria and the chemical red line and subsequently in Ssbury because he was looking for the way we responded to what is an escalation of a wartime intent and May was absolutely pathetic along with saidwell. I mean really we they have huge responsibility. What they probably did was turn the lights out somewhere in some eastern Russian city with a cyber attack and you know thought that that scared Putin for the magnitude of what he did versus we did. It was a come on of mega degree and I remember hearing about an exercise where essentially at that particular generation of leadership was telling us that they didn't need we didn't need kinetic weapons. Strange the Chinese were building kinetic weapons. The Russians were and the Americans but the They decided that we didn't need kinetic any weapons anymore. So essentially in their exercises they got to the point of turning the lights out in Moscow and uh they turned around and said to the PM, "So you can either nuke him or surrender because there's nothing in between, which is exactly the problem. No escalation scale, no adaptability in your response curve. Honestly, from Cameron onwards, I actually think they're responsible for this war in Ukraine and what comes next by leaving us so exposed." On the topic of what's going on in China at the minute, David, uh where they've got the in Shanghai, for example, where they've got very very strict COVID restrictions, uh and there's a threat of full lockdown in Beijing. Uh for an outside observer, seems very uh very strange that they're still going really hardcore on COVID. And uh you know when I've spoken to uh Chinese folks about this well they've said well we dealt with SARS really well by by going after a really hardline policy here. Um but I'm I still don't think I have a full grasp of what they're doing and why. Could you maybe enlighten me? >> Well look this is obviously a my theory as it is. So uh there's a 72page document you can all download on my website. It's about the origins of the pandemic. I believe it came from a Chinese weapons laboratory. It was asymmetrically designed to create economic impediment in the west and they had a mechanism. They actually had an antidote which they sprayed in the streets, a freeze-dried version without a furin cleavage. So for the first wave of the pandemic, they didn't really suffer from it. But what they have suffered from is basically they haven't adapted that. They've got mutations that have flooded in from the outside that we went through in a fairly traditional multi-wave pandemic. We've had three clear waves which suffered consequences, although I'd still say not enough for lockdowns. We're into our fourth and fifth. Whereas they've got a whole population which had some inoculation to the first and the other ones they haven't. And they're also very dogmatic. So this idea of you know you face a problem with force and organization is very Chinese. There's 1.2 billion of them. it's cultural and they don't move and they don't change. So, I think they've been locked into that strategy and what do you do if you're the Communist Party? You just turn up the volume and you keep doing it and you keep doing it. But it's ironic that if my thesis is right, they released it upon the world then essentially that it's now boomerang back and that's the problem of having an RNA virus. It's like multiple it adapts and it keeps changing and you've got a huge pool of people in China who are not immune to the subsequent adaptations, hence their responses. certainly would make a lot of sense and it's fascinating theory. David, are there any aspects of that you'd like to expand on? >> No, I think I said it all really. >> They certainly covered all the bases, but it does it has such um such weight if that uh it would be revealed to be true. Um it certainly would make uh a lot of things that happened over the past couple of years uh look pretty uh pretty strange in retrospect when we're thinking of the consequences of co everyone seems to have conveniently forgotten about it and they're just all angry about Ukraine or American politics or uh something else you know that everyone's sort of looking for the next crisis but the cost of COVID with the huge amount of debt huge amount of government spending you know that's not going anywhere what do you think the consequences of that are going to be uh as we you know head into this next round >> as I mentioned I think its purpose was asymmetric as asymmetric economic disablement and that's what we've just really had you know we have put our debt through the roof so even if you know you survive the crash how do you fund a proper arms race with defense you won't be able to and that's his main role so I think it's done its job we're asleep we still have this really cool window where honestly I do think we could go out there and like borrow if I was in the UK government I'd borrow a phenomenal amount of money like a thousand billion and I'd use it to fund my defense for the next three years because I know my interest rates 2% I'd pay 3% for it knowing inflation is so high right now they should be doing massive long fundings because that's the only thing that's going to we're going to have a revenue drop it's just a a nightmare scenario of entropic waves alto together >> there's a it's a pretty pessimistic discussion. I've got to say, David, uh though, of course, you know, you're not saying this just for fun. >> Look, look, I'm trying to say it to wake us up because we still have some choices left, but we're about to be put in a box where there are no choices. Our economy's imploded. We're stuck in stagflation. We barely hold our society together, and the Chinese and Russians continue with their moves. I mean, that's the options. So, it's not to scare people. It's to like wake them up. One of my theories as to why everyone is so asleep is really simple. Bubbles create masses of dopamine. Bubbles and the stability and decline of systems create linear thinkers. So, we've got linear leadership all over the place from corporations to politicians. And everyone is saturated with the residules of dopamine. The moment the stock market jumps off a cliff, believe me, the dopamine will replace with cortisol and we will see the world completely differently. we will suddenly see the multitude of threats we face and there will be conversations of why the hell didn't we do something. My job as a global forecaster and what I set the organization up to do was to warn people when you still had choices in your responses. That's what it's about. >> What makes you think that the uh the equity market is really on the precipice now and it's not in say a year's time. >> Um look all my work is based on price model analysis. They're very powerful. I mean, as you know from the tool, at the at 15,000, I made a call that the NASDAQ peak would be 6720 and it turned out to be 6740 and all of the guys that follow my work got to sell it at 67 in maximum size. So, my work has precision timing and right now the the the things that we have are every down move is impulsive and every up move is corrective. And essentially, look at what happened with the Fed yesterday. They managed to talk, it managed to rally, and it spat the dummy. And now we're looking really bad today. And those are exactly the conditions that lead to truly like vaultace collapses. Once the NASDAQ stays below 13,000, you're into a different door where all the bulls who tried to buy the dips are starting to have major interestion and then suddenly they'll all want to get out together. It does uh it does seem like uh we are going through quite a regime shift when it comes to people's perceptions uh especially when it comes to things like inflation. Uh on on the topic of commodities earlier you mentioned how you think that the first wave of this commodity surge is reaching its end or we've kind of gone past it. Is there a similar element there with inflation as so much of inflation is as a result >> I wish it was so simple. So if we were in the past K cycle it would be yes right because it was really K cycle inflation is normally just linked to inputs but there's two other real inflationary drivers that we face right now the first is a supply chain when we exported all our manufacturing to China we suppressed inflation when we should have seen indigenous inflation from 2000 onwards and now we're about to get it all back in our face that is like a monster nightmare where suddenly we got to find new supply as this cold war brings an into any kind of business relationship with China. Massive in its own right. And then the third one is all that printing of money. Like looked good for a time, but it's like the dam broke and now the dam's broken. That alone is enough to swap the system. So when you look at input inflation debates, the other forms of inflation are not going to abate. So no, there's going to be no reprieve at all. certainly does feel like a good environment for gold uh in that in that situation. You mentioned there on the ending of trade ties totally with China. How soon on the horizon do you see that happening? So, I think we can assume that the Chinese are covertly doing what they can to support the Russians because they're not and cannot afford to see Russia fail. And that will involve chip substitutions for their weapons, drones, or there will be covert support right now. Some stage the Americans are going to go, "Look what you've done." And then that's it. Sanctions for China, sanctions for Russia, one and the same thing escalates. >> Right? >> That's one scenario. The other is the Chinese decide to make their move in the land of you know what do I do next? They make their move and they go for Taiwan and you know so if we see a stock market crash I think that creates massive vulnerabilities >> and that would be the opportunity that would be seized. >> Yes, exactly. >> Did do you think uh the chi that China could just take Taiwan very rapidly or would it be a drawn out affair? Well, I've got a scenario for that to be honest. Uh, which I think is quite interesting. Um, so whatever they do, we can assume that it's going to be done quietly and it's going to be a surprise. So, um, one of the things that we've seen in Ukraine is the use of drones and I think drones are essential part of the Chinese plan. So we know that the Russians and Chinese put rockets and uh missiles onto container ships which can you know you can imagine a Chinese container ship 12 milesi from Taiwan surprise strike. Add on to that multiple drones which take everything out quickly. I think surprise is going to be a pretty critical stage in this equation. >> And do you think that would be uh successful? Do you think the Taiwanese would be able to have any kind of air defense against that kind of thing? Look, you know, how do you defend against a multitude of small targets? We don't really have the defensive capabilities anywhere in our systems to do that. That's what swarms and small drones present. And I think we're going to see more and more about you. Imagine you're suddenly hit by, you know, 20 switchblades all at once. Well, there are no systems around from different directions to save you. So, I think we're, you know, drone saturation is a big revolution in military affairs. is we're going to see an awful lot more of. >> Yeah, certainly something uh folks are going to get used to rather than just seeing it every now and then on on a sci-fi movie. >> Yeah, exactly. >> Uh we do get a quote a question here from Rune who says, "A sociologist friend of mine says, "The situation today is closer to the years before 1914 than 1939. It suggests a more confused situation." >> What do you think, David? I think that's a very perceptive comment actually because the primary um first of all theratio cycle peaked in 14 so you're at the same part of the K cycle and secondly you've got Germany that that actually didn't have to go to war but chose to go to war as to where it was in its timing as a weaponized system and it went to war to challenge the hgemony of Britain through France first. So actually very similar very very similar. There are some fascinating overlays I would add that do come about um if you go and add in um the second world war for example the algorithmic expansion of Hitler whether it was Czechoslovakia and and more and more to Poland and then you know to France and you add these so you can see you can see Putin trying to replicate that as an algorithmic process. So that's interesting and obviously the interesting about the second world war is it was the clash of the western Christian world and also the superian world and so there are elements there that need to be infused but in terms of sentiment within the American system I think it's a very perceptive comment and if you go and look at Britain and I've written a lot about it you know there was a there was a revolution in government for almost two years basically where we had two governments and to the point of almost a military dictatorship because the leadership was so weak And that encouraged the Kaiser to move further in his generals. Now that's Biden's regime. And then we also had a move to socialism at the same time. So the economic conditions of Britain and America are remarkably similar. I've written a lot about it. >> Oh, very good question indeed. Uh and we do have one from Jay here which I I find uh which is very very good one actually. Jay says, "I've got a possibly dumb question." Don't worry, Jay. I'm full of those two. How would the market, >> you know, your bows? I love the people who say I've got a possibly dumb question because normally they're quite smart. It's the one that things got a smart question which are usually quite dumb. So I like the prefix. >> Perfect. Perfect. Well, how would the markets react to nuclear war? Uh I don't think it's a dumb question at all, Jay. I think it's a very good one. Uh >> what do you think? >> You know that is a very I mean a hell of a bloody difficult question. Um obviously uh with great apprehension. Um I heard some interesting comments that basically said um and I've forgotten what it was. It was like you buy the out of it and if it it doesn't work, you're all dead anyway. Well, I mean, I have to say it's a little shortsighted. [laughter] [snorts] >> There's a certain there's a certain logic to it. I can appreciate. >> Yeah. Yeah. Yeah, there is. There is. Uh, look, I I think right now we're on this precipice and that precipice really is quite challenging and uncertainty when people are ultra long never does anyone any good whatsoever. So, I think, you know, it would end up with a massive price flush, but we're going to get there before that, so I wouldn't worry about it. >> Right. Still a good uh a good exercise perhaps uh to think about what what might what might occur in that kind of situation? What do you think uh in if we move away from nuclear escalation and we did look at China uh taking Taiwan or attempting to take Taiwan, David, how do you think markets would react to that? >> Well, they go down. I mean, can you see a reason why they would buy? I mean, that's definitely not a smart not a dumb question, is it? >> No. Well, I don't know. Maybe when it comes to semiconductors, for example, if China established a monopoly there. >> Look, you know, I think the issues around semiconductors uh and South Korea is included in that is really serious. It's a resource and I've argued that wars are about resources. Yeah. >> So, we need to take it very very seriously that Taiwan is not just, you know, a first stepping stone for China. It's also a resource basing for high-tech chips that we need and therefore you know again the mistake that we sort of constantly seem to make and it does really um annoy me is we could have declared a protective zone around Ukraine before the war happened and we've still got a strategic ambivalence to support Taiwan or not. So much so that the Japanese have a strategy to say well we'll support them knowing it'll drag the Americans in. Strategic ambivalence was very very you know at the heart of why the Germans thought they could invade France because Britain and Lloyd George said we won't do anything about it and the only reason we did is they went through Belgium. If they gone directly into France we would have sat there and watched. So strategic ambivalence is a liberal doctrine of appeasement and it always begats the worst outcome of conflict. Certainly uh certainly something which uh you know I don't feel there's a clear answer from many Western leaders at all on what uh would happen in the event of Taiwan being invaded. It's uh I think it's an open question whether or not the American public would support another another foreign war. They would equate it to uh the misadventures in Iraq and Afghanistan. >> I think this is very I think this is very different. I think >> it's completely different. Yeah. because the because Afghanistan Iraq were existentialized peripheral conflicts that never could have ch made a difference. The thing that really could make a difference is China's ambitions anywhere or Russia in Europe and America understands that. So I think that and there there is a and especially if you've had a stock market crash believe me that kind of dynamic creates a very acute and aware concern over what comes next. >> Right? We do get a uh a good question here from Cindy uh who asks what will happen to the UK property market and when uh which is a an interesting uh an interesting question given what we've discussed so far. >> I think the horrible truth about this crash that's pending is everything will go down together. you know, people even with low interest rates have big mortgages because the natural tendency is to leverage yourself for as much as you can afford. And so then suddenly you lose your job or you know, you're demanding to do it somewhere else and the net effect is you can't afford to pay it. There's a default. So I think we're going to see you know an awful lot of very dangerous stuff around that. >> Yeah, it does sound like there's nowhere to hide. Um, and on that we get a question from Suffuk Gardner who asks, "Will gold miner shares fall as the rest of the market falls?" If so, >> I think gold I think golden gold miners are kind of my sort of favorite zone. So, um, yeah, I would say net net um, they'll be the place to be. And yes, you may get a downdraft in gold and you may get a downdraft in them, but net if you want to come out of it within a couple of years, to me that's the only place to be. >> Yeah. Is there any other safe havens out there, David, other than precious metals that you can think of? >> No, I really can't actually. Um, I mean, genuinely can't. >> Uh, oil. Is there any or is that still uh something? >> I mean, right now I think oil's, you know, has every chance of dropping to 70 to 60. So, it depends where you own it, right? You know, right right now being in cash is cool because you avoid the That's really important. And then you if you're smart you can buy Bitcoin at 15 which I think is somewhere down there. You can buy some oil when you know it's back at 6070. But it's a question of timing. It's not just where you put it, it's when you put it. And you asked me the question where is the safe haven for now. It's gold >> in my best estimation. >> Uh a question from John regarding uh inflation and the happier times. Alarm broke out when uh inflation reached 3 to 6% uh recently. Today, radio 4 Bank of England quote suggests that 10% here and globally may soon occur. Any guess when 2% will be with us again? >> Yeah, somewhere in 2030s, >> right? Well, uh we we've got that to look forward to. That's the uh >> So much fun. So much fun ahead. >> Yeah. [laughter] Well, speaking of fun, on the lighterhearted section of South Bank Live, uh we do normally have our long short segment where we take a look at markets over the past week and uh say give something that we're bullish on, something that we're bearish on. This is not financial advice. This is purely just to uh uh have a bit of fun really and uh to shoot the breeze when it comes to markets given we have uh been speaking about some pretty grave topics here like the annihilation of life as we know it. Uh maybe uh we could look at the long and the short, David. >> Well, you know, my short's going to be in the stock markets in the US because that's where it is. And you know, my long is going to be gold. So, really simple. And uh if I was being more frivolous about it, I think uh you need to be long of all the great things in life that you enjoy. You need to be short of all the negative like erroneous people and events around you that detract from the quality of life and enjoy this period every day, every minute. I think that's uh certainly uh yeah I think that's a great a great quote for us to take away from this given the given the importance of uh the situation that we're now in. John uh sorry David David like when you're thinking of uh when you're thinking of things that people should bear in mind when it comes to this situation at the minute uh we have uh covered a lot of angles here that you would don't see covered in the press. uh a lot of angles here that mainstream investors uh aren't uh speaking about. Are there any other elements here that you think are being undisussed that are very important? >> Look, we've covered uh the the new age of war and the road to wars and the need to spend massive amounts on defense. Uh we've covered um [snorts] the cost of living crisis which implies developing resilience for your economy in every sourcing of of you know whether it's food, energy, all of those things but by smarter solutions than we've got. Um and you know we've covered this implication that the stock market is about to tube and what it does to people which is pretty difficult. So I think we've covered most of the the hot topics at the moment. Um I do think the last topic I would drum home is is if you are a linear leader and you look in the mirror and you know you know you are a linear thinker well you don't have to shoot yourself you just have to somehow invite and encourage the lateral aspects of your organization to come right to the side around you and listen to them and much of what they say to you will feel difficult will feel hard to hear but it's exactly what you need if you wish to preserve your organization in these entrop ropic periods that includes governments that includes organizations and you know it includes personal family units too. >> One uh one uh request from AJ uh David's books again please uh as we are reaching the end of our hour I think it would be very good uh for folks who are not familiar with your work David tell them a bit about your books because they are great uh I thoroughly endorse them uh but introduce them in your own words. So uh that's very kind of you buyers. So breaking the code of history. Um there's only a few literally less than 100 so books left of the initial >> commodities. >> Yeah. And basically it's rare. So you you can only buy them from my website. So you know if you're interested move quickly uh that will give you all of the groundwork and knowledge which I've tried to share and it has huge efficacy because you can see the predictions have turned out to be right. So, you know, I'm not just someone pontificating. Obviously, I've got systematic approaches. They work and I've been open in sharing them with you to empower you all to make better decisions, understand and cascade that knowledge down to everyone else. So, um, lines there by lines, I never really advertised, but it's really started to take off in military circles is a story of the First World War and the real story of how Britain absolutely trashed the Germans by the end of it. And it wasn't lions led by donkeys, but lions led by lions. and the parallels embedded in it between the Chinese and German challenge and Britain and America as a hedgeim and the fact that lateral people ultimately he evolved the BEF to beat Germany. One of them was Hey, interesting enough. I [snorts] think he was probably more linear but he he let the lateral people run with it and that made the difference. Um and then there's obviously I do urge you to read now or never because it's a template of what we have to do. you need to probably add like 150% what we really need to do. But it'll give you and let you be educated about defense because everyone should be and that's men and women. One of the things I really think is crazy is that women don't have a voice in defense because they're not interested. They're 51% of our population or 50% and they really need to get to speed. And red lightning it'll take you one hour and by the end of it you'll be ringing up your MP and saying you need to do something. >> Yeah. And of course, David, you write your marinations uh as well, which is much more uh fast-paced as it were. I mean, you've got regular updates going out. Do you want to say >> that? On the website, you will see all my theories are available to you. Um you can look at any marination over 10 years, which goes back three months. And if you want the updates, you pay 50 a month and they come out, you know, as and when. They're designed to be predictive and explain to you why I make those predictions. So, they're educational, they're powerful, and they give you the construct you need to understand, you know, kind of what's going on. >> Well, there you have it, folks. Uh, I believe there is a link to David Mur's website in the description for this video. Has been a great chat and has been very lively in the live chat as well. Uh, thanks to everybody who has tuned in. This has been very, very stimulating conversation as ever with you, David. Uh, any closing moments, closing comments, sorry. Before we end it, >> there's a comment on the chat saying, "When will the age of wars be out?" I've been so busy. I mean, I've half done it and I'm desperate to get it out. I gave a speech at the Defense College about it to all the onestar generals. It's in my head. It's mostly in. So, I will get it out as soon as possible because it'll explain to people how we how we got into this mess. >> Well, uh hopefully we'll have another conversation around that time. David, I wish you all the best with completing it. And uh I think we'll call it there for this episode of South Bank Live. Hope you have enjoyed it to everybody who has tuned in this evening. It's been great to host this live as ever. And if you are watching a recording of this, do give us a like and subscribe if you enjoy the content. That's all from us for the moment, but we'll see you in the next one. Bye-bye.