“It is the worst in my lifetime and the reason I said it was because there was so much debt [that had] built up in the world. In 2008 we had a big problem because of too much debt; since then the debt everywhere has skyrocketed, even in China.”
Jim points to nearly every government in the world having started printing and spending staggering amounts of money. “America was already the largest debtor nation in the world, and along came [coronavirus] and America has added trillions and printed trillions more. This is going to be a serious burden for the world economy.”
As Jim sees it, the ten-year bull run in US stocks also made a market slump overdue in addition to an economic slump, and coronavirus was just an excuse. “There would’ve been some reason. Some places were already slowing down, and along came the bubble and now we have the excuse. We always have an excuse and here it is.”
Gold, Silver, USD and Safe Havens: How Safe?
So, with this outlook, what does Jim have to say about the viability of gold, USD, and other assets traditionally viewed as safe havens? “I stopped buying gold and silver in 2010 and I started buying again last summer. I bought more recently and I will probably continue to buy both gold and silver; more silver than gold now because silver is down much more.”
On USD: “It’s not a safe haven, but [the important thing is] people think it is. I still own a lot of US Dollars and I haven’t sold any. It’s going to get overpriced and it could conceivably turn into a bubble, depending on how bad things get in the world.”
USD being Jim’s currency of choice is explained in part by the unattractiveness, as he sees it, of the alternatives. “Right now with the Euro, many people are skeptical. British Pound? Please. I love the UK, but that’s not even a semi-sound currency any more. The Swiss Franc is being so debased, and as for the Japanese Yen? Japan has staggering debts, with a population declining for ten years.
“[So] which currency? That’s part of the problem.”
- Source, Daily FX, read more here
