Transcription
I mean, I'm ashamed to say that, but for the first time in my life, I have actually something good to say about the central bank. You can go to any bar, ask the girls, how is the economy? They will all tell you it's horrible. And in Germany, what happened when the green socialist communist took over? The standards of living went down. But Trump is a typical deep state person. But that the western democracies don't want to tell the people money will flow out of the US and go into markets like Southeast Asia and so forth. If you don't steal the girlfriend of the mafia boss, you'll be left in peace.
Guys, welcome back to our channel with another VIP guest whom I've shared some good quality time in Mai. Having had one or the other Chang beer, I obviously don't need to worry about my Thai beverage stock portfolio seeing the stockpile of Chang beer with Dr. Mark's home here. And our interview will be two hours of time, maybe not longer because I think Mark might run out of cigarettes. Jokes aside, guys, looking forward to get your comments under the video and obviously don't forget to subscribe to our channel as well. Mark, a pleasure to have you. Thanks for the invitation today.
Well, thank you for having me. What do you make of the most recent and most interesting conflict in terms of geopolitical tensions, Ukraine, Russia? What's your view on that?
Well, as you know, everybody has a different view about it. My view is that it's a completely unnecessary war that should never have happened. But the Russians were clearly provoked by the western powers, and notably the US, who wanted to drag them into a war, I suppose, because it doesn't make any sense. And the Western European governments, the way they are, they're very weak and useless in my opinion. And they like the war because it distracts the attention of people from the misery that they imposed on their population through socialist measures that economic growth, and destabilizes the economies of countries like France and notably Germany. So the war is sort of useless, but it may not come to an end anytime soon because so many people make so much money.
So is that not then that the US is the net beneficiary of this war in the end as well? Would they have an interest? Because Trump says he wants to end it as soon as possible.
Well, what he says, he says something one day and the next day he says something different, and he's very inconsistent in his policies and in his views. I think what disturbed the Americans the most is that when they started to impose very high tariffs on India, India right away opposed the tariffs and didn't bend, but they started to talk to other BRICS members like Brazil, and to Russia from where they received their oil, and China and so forth. And suddenly the Americans, of course, the Americans are not very smart. They don't look forward. They suddenly realized that they achieved something that nobody has ever achieved in history: that the Indians and the Chinese would talk to each other and be on friendly terms, and that the Russians and the Chinese would be on friendly terms. So the Americans, instead of actually achieving their objectives with tariffs, they have sort of united three-quarters of the world, or 80% of the world's population, against the US, and they have lost a lot of prestige, that I'm convinced.
Would you think that Trump, speaking of the deep state in the US, is Trump really an outsider and does he have real interest for the population, or is it just on the forefront of the story?
I think he's the deep state as well, and I think he listens to Netanyahu. I think Netanyahu tells him what to do, sadly.
Yeah, we have another big crisis obviously with Gaza, and we have crises everywhere. But now the story is unfolding that Netanyahu, not openly but kind of behind the scenes, saying that he might take over entire Gaza, at least starting with Gaza City. What do you make of this?
Yes, I think it's very likely. The Zionists are, you know, very, very territorial minded, and they think that the best is to essentially wipe out the Palestinians from the Gaza Strip. That is their view.
Mhm. But geopolitical tensions wise, it kind of goes even much further on the east, right? Towards the east. Now, Lebanon saying they want to deweaponize Hezbollah and they're trying to do something about it. What do you make of this entire area there?
Basically, the geopolitical developments are very unfavorable because they increase the risk of military confrontation significantly. You know, a general or a naval officer, he may make a mistake, or by design, and lead to a provocation, and it starts to get out of hand. But look, I'm an investment advisor, and I manage money, and I invest money. If I only look at geopolitics, I wouldn't touch anything. But you have to invest money in some ways. And you could say, okay, I put everything into gold, but then there are also other issues. You don't have a cash flow from gold. Of course, I have gold, but I need to look at mostly economic and financial issues, and there the overwhelming factor that influences financial markets is the money printing that we have in the world, and how the central banks have essentially financed the expansion of the government in the western world at the expense of the private sector.
Yeah, this is the issue that let's say should concern investors, and everything that can be used as an excuse to print more money, an economic slowdown, or a downturn in real estate, or whatever, or a war, they will use as an excuse to print more money. Currently, the situation back to the US with Jerome Powell, who might be well replaced, at least a new successor is coming. Trump pushing on Jerome Powell, but the money printing in the US has at least slowed for a little while. Not let's put it this way, if you look at the figures and the charts about money supply and credit expansion and so forth, it is correct that after a huge increase in the quantity of money in 2020-21, the growth slowed down for a while, but it didn't contract, or only for a very brief period of time, and now the money supply is at a record again. In other words, they eased again. And this, I'm trying to explain to investors, the Fed and the government, they tried to sort of brainwash people into believing that they tightened monetary conditions, but because they say, look, we increased interest rates. But the interest rate increase doesn't mean that it's tightening monetary conditions. We could have, like in Zimbabwe, interest rates around 100% and inflation around 1,000% per annum, or like in Turkey, we have interest rates that are very high and inflation is very high, or the same was the case in Argentina before. Now, Milei has done wonders by doing nothing essentially, by cutting down the government. But that the western democracies don't want to tell the people that someone who really cuts down on government expenditures can reduce the rate of inflation. That the woke socialists and the green communists don't want to tell the people. They want a larger and larger government and control every movement that you and I and other people make.
Wasn't then Trump and Elon Musk's approach a light one, at least to reduce government spending and US aid, among others? Isn't that kind of a step into the correct direction?
Musk, of course, he is a businessman, and he understands that cost cutting should be implemented in the US government. But Trump is not a cost cutter. Under Trump, the budget deficit in America will go up, and the government expenditures will increase, believe me. And that's why eventually Musk left or was fired because he wanted to do the right thing. But Trump is a typical deep state person. He's not deep state, but the deep state controls him. All the presidents, all the leaders of nations, most of them are controlled by some influential people. And you can see it with Mr. Trump. Whenever the stock market goes down substantially, he will change his policies because he gets a phone call by some people who have money. They say, "Look, what do you think? Do we like the stocks to go down? You're cutting down on our wealth." So, his policies are actually very favorable for rich people. They're not favorable for the people by and large because tariffs, there's no question about this. A tariff is a tax.
This would have been exactly my next question. Isn't it a nice way of Trump bringing the population behind him, saying the others are paying the price, but in the end, it's the US population paying the price, right?
Of course, of course, nobody else is paying the price. The US is paying the price. Others may be paying a little price, but the US is paying the highest price.
So, moving forward now, back towards the Eurozone, inflation kind of under control, interest rates falling. Is that a way moving from investments in the US to have you recently renewed your insurance policy in Europe?
Yes. How was it? Down or up? Up. By how much? 15% maybe, about. So, and you tell me there is no inflation? Are you telling me there is no inflation? When you yourself see it that the insurance premium is up 15%? The measurement of inflation by governments is completely wrong. They don't weight the basket properly. And I can tell you, we have reports by department stores and chains of supermarkets and so forth that serve mostly the typical household, not only the rich, but the typical household. They all say the same things, that lots of people are saving on their expenditures. Why? Because they don't have the money. The cost of living has gone up more. The rents have gone up. The insurance premiums have gone up. The price of energy has gone up. The price of electricity in Germany has gone up. All these things have gone up more than the salary increases, which then means that the purchasing power of money has gone down. And if you want to see the true rate of inflation, you take say the gold price in 1970, in 1980, you take it in 2000 and so forth, and today, and you see the progression in the price increase that is reflecting more or less the loss of purchasing power of paper money.
You mentioned the gold price. Is it now still a good time to kind of park your money as a safe haven in gold, or would you see any potential correction in gold if the dollar remains kind of weak?
I mean, markets don't move in a straight line, and there may be a correction. However, you know, people have always said gold is too expensive, and they always argued for a correction. And if I look at different asset markets, say commercial real estate, residential real estate, gold, stocks, and so forth, I don't see a sign of a bubble in precious metals. First of all, in a bubble, you usually get a huge increase in the ownership of ETFs. In other words, the ETFs grow a lot because money flows into the ETFs. In the case of gold, the ETFs have actually lost assets because people, as the price of gold goes up, they're selling it. And everybody was expecting a correction around 1,800, and then around 2,200, and so forth. So, in my opinion, it's been holding reasonably well. Now, I'm not saying the gold price will go up or down or whatever. I'm just saying if you have assets, say you have a million or 100 million or what not, I would hold some of that liquidity in gold, silver, and platinum. Platinum is cheap, absolutely and relatively. But everybody has to decide for himself what he wants. Does he want to be in Nvidia and Tesla with all his money on leverage, or in day options, and you know, in speculative instruments, in cryptocurrencies, or gold, or in everything? You understand that is a personal decision an individual should take, and then he should implement his strategy with discipline and consistency, not change or today we're all in here, and then today all in here. But to have a consistent strategy.
Speaking of bubbles, what is currently the biggest bubble you would see when you invest?
The bubble can be so big that people don't realize that it's a bubble. I mean, my view would be, if you look at what is inflation? Inflation is an increase in the quantity of money and the loss of purchasing power of money. Now, if you look at this room, and we print money, and Herr Bernanke drops the money from helicopters, the problem is that money will not go evenly into all prices. You understand? It boosts some assets or some consumer prices, and it may depress others. Say, in real estate, you go in Germany, US, and so forth. Commercial real estate is down, and some a lot, and some people have gone bankrupt because of commercial real estate. But residential has held up better up to now. It's also down a bit, but from a very high level. And stocks in the US are at the high. But if I measured the stock prices in the US in euros, they're down for the year. The peak was around December. And since Trump became president, the appreciation of stocks in America in dollar terms was offset by weakness of the dollar against the euro and weakness against gold, silver, and platinum. So, it's another issue in monetary inflation, and I have a book about this which is very good, the economics of inflation. Anyway, this explains everything that what happens during monetary inflationary periods, including what stock prices do, and the gold price, the foreign exchange, and the impact of high inflation on society and the concentration of wealth. According to this book, it was written in 1923 or 24, after the German hyperinflation. Basically, we all have the symptoms of very high inflation rates at the present time, namely excessive liquidity. When people talk about tightening of monetary conditions, there are more than $7 trillion dollars in money market funds in the US. That is not tight liquidity. Stock markets go up. Speculation is, in my view, we have had a gigantic bubble in all assets. Now, some assets like commercial real estate in America, some commercial real estate is down 80%. In my view, it should go down 100%, but because it will never be reoccupied. As long as the homeless people are in front of your door, nobody will rent space there.
Geographically, what's what's then better? Is it maybe a shift away from the US? You mentioned the markets up in dollar terms, down in euro terms, or at par, maybe European markets seem to be kind of moving higher, especially looking at monetary policy as well. What's your take there?
My view is since 2010 or 2009, the low was March 6, 2009, in the US on the S&P 666. So we're up a lot, and the US has outperformed just about everything until recently, when European markets since the beginning of the year, over the last six, nine months, have significantly outperformed the US and emerging markets as well. You look at, you compare the EM emerging market fund to say American shares to the S&P, it's outperformed also Chinese stocks, Hong Kong shares. So I'm of the view that the money that is the money is overweight in US equities. All the world speculated in Nvidia and Tesla and the Fang seven and stocks. That money, and the US is more than 60% of world stock market capitalization. Money will flow out of the US and go into markets like Southeast Asia and so forth. And Trump, he will accelerate that process.
You mentioned already stocks, Asian stocks, Hang Seng Tech Index, for example, starting to kind of pick up some momentum, right? We have all these Chinese electric vehicle companies, Xiaomi among others. Is that something where you would say it's considerably cheaper still and worth a thought to invest in these Asian markets?
Yes. I mean, believe me, when I can't see anything positive about a country, it's usually near a low point. Thailand, in my view, has reached a low point. I understand all the problems that we have here, but one thing that everybody tells me, they like to retire in Thailand, they like to live here, they like to visit Thailand. I mean, when people travel through Asia and you tell them, ask them, well, where have you been? And they've been to Singapore and Malaysia and Vietnam or Indonesia, and they are in Thailand, and they all like Thailand. It's very free. And I was invited to a speech recently, and there were some ministers in the audience, and then one of the members of the audience in the Q&A session, he asked me, what do you think of the Thai government? And I said, it's very good. They said, why do you say that? I said, because they don't do anything. And the ministers, they all had to laugh. A government that doesn't do anything is the best. The worst is the Trump kind of attitude.
Nobody knows everything. That's why we have economically proven with capitalism and the free market economic thoughts that free markets and the capitalistic system lifts the standard of living of most people. It's not perfect. Nobody claims that capitalism is perfect. But whereas say in 1970, Eastern Europe was depressed and economically had hardly advanced, and people lived under oppression. In the western world, we had progress. And then countries like China and the Soviet Union and Vietnam opened up. And countries that had socialist policies like India moved to the right and had free markets. And what happened everywhere? The standards of living went down. And in Germany, what happened when the green socialist communist took over? The standards of living went down, and the country that was prosperous before, after the Second World War, has deteriorated considerably. That is the responsibility of the socialist and left-leaning politicians who believe they know better than the market. So they intervene in everything, and of course, they are paid under the table by American NGOs or institutions or the CIA or the president or God knows what. They're all bribed.
Back to the same question then, and you mentioned Trump also being part of the same machine in the US, but US aid kind of at least being being reduced slightly, or is there other funds or other other pockets where the money is flowing to from lots of other pockets?
Believe me, look at the money that flows to Israel. Nobody under any conditions could justify supporting Israel and what they do in Gaza. Nobody. Different topic. And many, many Jewish people agree with me. They think Netanyahu is a horrible person, and they completely disagree with the policies.
Back towards the investing story. What do you think is the most undervalued at the moment where you would see chances in the next 5 to 10 years potentially?
I think platinum is very inexpensive. I think Hong Kong properties are very inexpensive. And you know, people, the western media is against China, they don't write anything nice about Hong Kong or China and so forth. But the fact is simply, if you look at cities, where do you like to live the most? If you're a young family or even you individually, you want to live somewhere where it's reasonably safe. I mean, you can say whatever you want against Thailand, and some people say it's a failed state, which is true in some ways, but the country is relatively safe. If you don't steal the girlfriend of the mafia boss, you'll be left in peace. And the same goes for Hong Kong and Singapore. Compare Hong Kong, Singapore to Baltimore, Los Angeles, New York, Denver, Detroit, and so forth. Chicago is very safe to live in Singapore and Hong Kong. You can go out, nobody bothers you. You don't need a bodyguard. And so I think these cities will come back. Of course, the character of Hong Kong will change. It's now part of China, and it has the competition of Chinese cities, but it's still for a foreigner a much more desirable city to live than other cities in China.
So still investing in Asia would be your top pick at the moment?
I might, I might say yes. I mean, I've always been investing in Asia, and I believe in Asia with reservations. I mean, I was for many years negative about Hong Kong property prices and Hong Kong as a city. I wrote a book, "The Rise and the Fall of Major Cities." But I think that Hong Kong has reached the price level, and the whole of Asia, certainly relatively speaking, compared to say the prices you pay in the US and the prices you pay here, is cheap. I think mining stocks, whether you talk about Newmont Mining or Majestic Silver and so forth, mining stocks are cheap, very cheap. But the price of gold has gone up a lot, but the mining sector hasn't gone up that much.
Mentioning mining, silver prices, we haven't discussed yet, obviously. In my recent interview with Jim Rogers, he had an interesting take. What's your take on the silver market because it's also moving higher and creating highs after highs every month now?
Yes. I mean, many people, normally in a bull market for precious metals, silver will outperform gold. Hasn't happened yet, but it may happen in the future. Silver is cheap relative to gold. But I prefer platinum because platinum is not only cheap relative to gold, but also to silver. So you're buying a really inexpensive asset. There were times in history when the price of platinum was much higher than the price of gold, and now it's about a third.
Unless we use the Tesla truck to dig out silver from earth. We are using still petrol. Oil prices. What do you make of the oil price? It keeps falling again now after having peaked recently during monetary inflation.
A lot of funny things happen. But industrial commodities like oil, they reflect to a large extent the demand and supply. And if you ask me about the economy in the world, my view is that the economy is not good. You can go to any bar, ask the girls, how is the economy? They will all tell you it's horrible. There are some structural shifts. You know, young people don't go out and drink as much as we used to do, the boomers. They drink at home or they take drugs, hard drugs or what not. We used to just go after work into the pub and drink and so forth. That, young people don't do very much. And when they go to a bar, they don't buy drinks for the girls, whereas we used to do that anyway. I think some commodities reflect the demand and supply, and the demand in the world is not particularly favorable at the present time. Although some Asian economies, in my view, are bottoming out like China, but other commodities like the precious metals, they don't reflect necessarily economic health or growth and so forth. They reflect monetary conditions, and the monetary conditions are favorable because the money printing, when you think of it, the money flows through the banking system into other areas of the economy. Who gets the money first? The financial system. Wall Street. That's why Wall Street economists will never criticize the Fed, except now they say Powell should cut rates. I mean, I'm ashamed to say that, but for the first time in my life, I have actually something good to say about the central bank, that Powell didn't cut interest rates more. I think he's right not to do it because, as I showed before, the rate of cost of living increase is still very high.
Anyway, I gave you now a few ideas. I think Latin American markets are also attractive. I think Brazil may get a move upwards. It has outperformed the US this year, is up in dollar terms about 25%. But I think it can continue, especially now because Trump is eager to make Lula look very bad, and Lula wants to prove the world that he can do something good for Brazil. So I think the stock market will probably go up.
Two years of bull run in the stock markets, and now we had a sharp correction in April this year, and the markets have already kind of created new new all-time highs, most markets at least. What needs to happen for the stock market to crash?
Anything can happen. The market is fragile, and there's a lot of leverage. Margin debt is at a record high. And you know, I mentioned the overwhelming consideration is whatever happens, the Fed will print money. But in the case of commercial real estate, the printing of money didn't help. And in the case of stock prices, one day the money printing may not help. Maybe it helps, like here is described in this book, how in nominal terms, in other words, in dollar terms, stocks keep on going up. At that time, in Mark, the stock market, everything, prices went up, but the currency collapsed. That is a possibility. And Trump is the ideal character that could lead to a massive currency collapse. We've seen this since he took office. The dollar weakened, as you mentioned many times. We see that the trust in the US in general is just... is it already at a very low point? But the other currencies are not much better.
Yeah, but I'd say the currencies have all declined against gold. That is something that people should pay attention to. The government officials, of course, will not talk about this. Anyway, nice to see you and nice to talk to you.
Thanks. Thanks so much for your time. It was a pleasure, Mark, as always. And guys, as said, please leave your comments under the video. Don't forget to subscribe, and let us know what you think about our talk today. For me, it was a lot of fun, but as I know, Mark and his interesting answers give you quite a bit of room for thought, hopefully. See you then. Take care, guys. Fight.