The Most Dangerous Time In US Financial History

The Most Dangerous Time In US Financial History | Brian Hirschmann

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Күн бұрын

Value investor Brian Hirschmann, managing partner of hedge fund Hirschmann Capital, makes his debut on episode 152 of The Julia La Roche Show to discuss the dangerous state of the U.S. financial system.
In this episode, Hirschmann argues that we're currently in "the most dangerous time" in U.S. financial history and that three bubbles-stocks, real estate, and global bonds-could all burst in the next recession.
Hirschmann also makes the case that we'll see more persistent inflation in the future, given the massive deficits and debt burden. He also shares why gold's price could soar to $7,000.
For investments, he favors gold miners and exposure to international equities.
Links:
Hirschmann Capital: www.hcapital.llc/
Twitter/X: / hcapitalllc
00:00 Introduction and Macro View of the Economy
00:43 Dangerous Time in US Financial History
03:08 Consequences of Crisis Suppression Policy
04:35 US Equity and Real Estate Bubbles
06:27 Government Debt Problem
08:20 Global Government Debt Crisis
09:47 Government Debt Crisis and Private Sector Recession
11:03 Gold's Performance and Market Environment
13:13 Factors Affecting Gold's Valuation
19:36 Fed Policy and Fiscal Dominance
23:39 Impact of Fiscal Dominance on Gold
27:26 Investing in Gold Mining Companies
31:53 Impact of Bubbles Bursting
35:36 Potential Impacts of Recession
40:10 Likelihood of Recession
44:21 Closing Remarks
#gold #economy #investing

Пікірлер: 122

@TheJuliaLaRocheShow 2 ай бұрын

Hey everyone! I hope you enjoy this episode featuring Brian Hirschmann. Shoutout @issenvan1050 for the guest recommendation. Let me know what you think in the comments below. 💙Julia

@issenvan1050 2 ай бұрын

🌷

@alanmrsic893 2 ай бұрын

Please invite Simon Mikhailovich concerning the future of Gold :-)

@michaelstock9351 2 ай бұрын

I love the forest fire analogy. It is so true

@xenrake 2 ай бұрын

Incredibly bright guy. Really good thoughts.

@9timmer 2 ай бұрын

Great session with Brian Hirchmann. His clear-eyed analysis of global debt and likely outcomes is important.

@alanmrsic893 2 ай бұрын

Great stuff, thanks again!

@issenvan1050 2 ай бұрын

How come Japan is still intact with that level of debt/gdp? B/c their budget deficit is lower than 11%?

@HCapitalLLC 2 ай бұрын

Low budget deficits have probably helped as have low borrowing from foreigners and unusually high bank deposits (which facilitate central bank bond purchases). See my mid-year 2023 letter and 2023 podcast. Also as Jeremy Grantham said this week: "My joke-serious investing rule #7 is never, ever extrapolate from Japan! Their society is very, very different".

@issenvan1050 2 ай бұрын

@@HCapitalLLCSo, them being the exception, US, as with the previous 149 cases, will default through inflation? Any link to your podcast?

@markphillips2648 2 ай бұрын

I have never played chess on the North Sea in a storm because it’s hard to imagine where the pieces will go! Enough said!!!

@issenvan1050 2 ай бұрын

Should we draw a distinction between USD being the reserve currency & the unit of account?

@HCapitalLLC 2 ай бұрын

I don't think the distinction matters much. A USD debt crisis seems inevitable regardless of whether the USD is the reserve currency or the dominant unit of account

@issenvan1050 2 ай бұрын

Brian knows his macro history!

@jimclark5037 2 ай бұрын

great analogy in suppression of forest fires to suppression of recessions and bank fails!

@jimclark5037 2 ай бұрын

Julia I'd appreciate discussion of TIPS and ibonds for inflation protection. Love the show, thanks!

@issenvan1050 2 ай бұрын

So, Brian watches the show! 😎

@TheJuliaLaRocheShow 2 ай бұрын

Maybe he read the comments section because this was YOUR guest idea 😊🙏

@daveforgot127 2 ай бұрын

Great interview. Too bad you did not ask him about Silver?

@detectiveofmoneypolitics 2 ай бұрын

Economic investigator Frank G Melbourne Australia is following this informative content cheers Frank 😊

@TheJuliaLaRocheShow 2 ай бұрын

You're the best, Frank!

@issenvan1050 2 ай бұрын

Gold-valuation is around its 50-year average? In inflation-adjusted terms?

@HCapitalLLC 2 ай бұрын

I'm highly skeptical that the inflation-adjusted gold price is the correct way to analyze gold

@issenvan1050 2 ай бұрын

⁠@@HCapitalLLCThen, how come $2.1k-gold is the 50-year-average? & where does your $7k (formerly $6k) target come from?

@HCapitalLLC 2 ай бұрын

@@issenvan1050 I try not to disclose how I value gold in public because a competitor might be listening. Most investors don't understand how to value gold

@issenvan1050 2 ай бұрын

Usually, gold miners do underperform in the long-term, right? Is this time around going to be the exception?

@issenvan1050 2 ай бұрын

How should silver perform during the next recession?

@dailydoseofnews4828 2 ай бұрын

Good stuff - Ye if inflation start goin up again that's gonna hurt, mostly cuz ppl expected it keep goin down to normal by now. Also company bankruptcies starting to look ugly in many major economies (data is published with a long lag)

@DonRua 2 ай бұрын

I fully agree with the guest speaker's insights. I'd like to add a small point: while the massive US debt issue is a significant concern, it's important to recognize that many other countries around the world are facing similar challenges. However, the US has a unique advantage in that it can print its currency, which is widely used as a global reserve currency. This means that the direct impact of money printing on its own economy is somewhat diluted. Additionally, there are approximately $50 trillion worth of Eurodollars circulating globally, which are not subject to US oversight. Most sovereign debts are issued in Eurodollars without US involvement. If countries default on their US dollar-denominated debts, they are essentially defaulting on each other. As a result, investors may see the US as a relatively safer haven for their investments. Even if the US performs slightly better than other markets, investors may choose to invest in the US to mitigate their risks and potentially earn higher returns. This doesn't mean that the US won't face challenges, but it may fare better compared to other countries. In essence, having the "cleanest dirty laundry" could position the US favorably in the global financial landscape. We will have a recession, so will the rest of the world. But the influx of capital will make US stronger than before.

@tenplus1025 2 ай бұрын

Bitcoin has been around for less than 2 decades-ish. Please excuse the guest for promoting gold, which has been an inflation hedge for 2 Millennia 😂 😂

@issenvan1050 2 ай бұрын

How can CPI go up with a contracted money supply?

@issenvan1050 2 ай бұрын

How can higher rates accompany higher gold price?

@issenvan1050 2 ай бұрын

Isn’t 1980’s inflation-adjusted gold price $3.1k or so, not $7k?

@issenvan1050 2 ай бұрын

How are GDX companies restricted?

@HCapitalLLC 2 ай бұрын

An example of the GDX restrictions: "Only companies with market capitalizations greater than $750 million that have an average daily volume of at least 50,000 shares over the past three months and an average daily value traded of at least $1 million over the past three months are eligible for inclusion in the NYSE Arca Gold Miners Index."

@issenvan1050 2 ай бұрын

@@HCapitalLLCAs opposed to GDXJ or JNUG, right?

@mark-204 2 ай бұрын

How many years have I heard that the U.S. is in a bubble?

@daveforgot127 2 ай бұрын

No examples of some of his holdings?

@issenvan1050 2 ай бұрын

Lower oil prices would also benefit the miners, right?

@HCapitalLLC 2 ай бұрын

Yes, they should benefit gold miners

@issenvan1050 2 ай бұрын

👏🏻

@TheJuliaLaRocheShow 2 ай бұрын

FINALLY! 😊

@issenvan1050 2 ай бұрын

Gold price will be higher during the next couple of years, but not because of higher inflation prints (as Brian suggests, which won’t be the case); it will be due to the upcoming recession/economic slowdown (as such, lower rates).

@markphillips2648 2 ай бұрын

Perhaps!

@yankeesteve670 2 ай бұрын

You forgot to say like what Marty was saying is because people start losing faith in the govt snd their fiat that they kept debasing the currency

@jorge1170xyz 2 ай бұрын

The bears and goldbugs make such compelling and intelligent arguments...yet they've been wrong for so long that it forces one to question whether "the powers that be" have finally figured out how to outlaw the business cycle by preemptively printing/bailing out everything and everyone (except the little guy). The way I see it, the bears have 18 more months of (very stretched) credibility before we have to say that they've been so wrong for so long that we really are in a new paradigm and historic cycles no longer matter.

@issenvan1050 2 ай бұрын

How come he never mentions the money supply?

@HCapitalLLC 2 ай бұрын

What I discussed relates to the money supply because high government debt can cause inflation because investors expect the government to print money (i.e. increase the money supply) in the future

@issenvan1050 2 ай бұрын

@@HCapitalLLCGovernment does not print money, right? Most of the money supply is produced by commercial banks, & the FED produces the rest, right?

@issenvan1050 2 ай бұрын

@@HCapitalLLC& if the Treasury sells its debt to the non-bank public, the money supply won’t go up, right? So, unless the Treasury’s debt is monetized, the money supply won’t go up, I guess.

@HCapitalLLC 2 ай бұрын

@@issenvan1050 The Fed, which is part of the US government, prints currency, which is one way the money supply can increase

@issenvan1050 2 ай бұрын

@@HCapitalLLC Yeah, but they have private shareholders to whom they pay 6% interest, right? & correct me if I am wrong, more than 80% of the money supply is produced by commercial banks, isn’t it?

@bluesky2145 2 ай бұрын

I don't have the data but does anybody know if what he said is true that there are three categories of indicators that have had no false positives in predicting the last eight recessions?

@issenvan1050 2 ай бұрын

The yield curve has been inverted, the leading indicators have been down, & the money supply has been reduced for about two years. He does not mention the money supply, though, which is the most important!

@HCapitalLLC 2 ай бұрын

Those three categories of indicators each predicted the last eight recessions (with no false positives). However, every recession is different and thus indicators can stop working

@issenvan1050 2 ай бұрын

@@HCapitalLLC How come you never talk about the money supply & monetarism? &, do you predict higher CPI & rates AFTER the imminent disinflationary/deflationary recession, thanks to the potential fiscal response?

@HCapitalLLC 2 ай бұрын

@@issenvan1050 What I discussed relates to the money supply because high government debt can cause inflation because investors expect the government to print money (i.e. increase the money supply) in the future

@issenvan1050 2 ай бұрын

He should make it clear: first recession, then higher inflation (& higher rates) due to fiscal response?

@HCapitalLLC 2 ай бұрын

Gold should go higher regardless of whether inflation expectations increase before or after a recession

@issenvan1050 2 ай бұрын

@@HCapitalLLCSo, do you think like Jeff Gundlach that DXY should go down during the next recession, as opposed to the historical record?

@dougstohlman673 2 ай бұрын

his forest fire analogy is only partially correct. Man has altered the environment of the forests dramatically by over cutting and replanting single species. This single story of mono culture was presented as possible because the government was going to brush and thin. They never did this due to budget priorities. So we are left with over grown forests that have fuel from the bottom to the top of single species pretty much all the same height. The government's analogy of natural fire is basic propaganda. BIG industry has taken over fire fighting and they do not operate on small burns. They require Incidents. So fires are no longer suppressed when small and their ludicrous justification is how fires cleaned the forests 200 years ago.

@issenvan1050 2 ай бұрын

So, Brian is no longer in PR?

@HCapitalLLC 2 ай бұрын

I'm still a resident of PR :)

@fg-sz9ci 2 ай бұрын

We need to prepare for the next recession things getting worse

@markphillips2648 2 ай бұрын

Gold Royalties…Be the banker, buy your gold at a much lower spot price!!!

@ado22222 2 ай бұрын

and when was ever gold at 7000 in the 80's as he suggests?

@HCapitalLLC 2 ай бұрын

If gold returns to its 1980 peak valuation, then the gold price should go above $7000

@lancemairs4956 2 ай бұрын

You need no ulterior motive to promote gold. Get it or it's gone.

@rrrfamily565 2 ай бұрын

I would love to smoke what Brian is smoking.

@p_l5338 2 ай бұрын

gold?? 😮

@JasonBrodkey 2 ай бұрын

He starts out talking truths then he shifts. Is he trying to pump up gold so he can get of his upside down trades? Is there a time in history when interest rates went down and inflation went up?

@jameskelly9243 Ай бұрын

She should have asked what his fund is doing

@ronfesta771 2 ай бұрын

Me thinketh great fo your guests to., set the stage instead of........set the table!@!?😉

@TheJuliaLaRocheShow 2 ай бұрын

🤣🤣🤣 I know! Sometimes I change it up.

@mrcactus1769 12 күн бұрын

Bitcoin.

@issenvan1050 2 ай бұрын

What is “fiscal dominance?”

@HCapitalLLC 2 ай бұрын

Charles W. Calomiris: "Fiscal dominance refers to the possibility that the accumulation of government debt and continuing government deficits can produce increases in inflation that "dominate" central bank intentions to keep inflation low."

@levteck 2 ай бұрын

The Fed will have to shift their focus on maintaining liquidity in the financial markets (Bonds, Repo market) instead of trying to control inflation and monitoring un-employment.

@issenvan1050 2 ай бұрын

This guy is anti-Brent-Johnson. 😎

@stanminna1761 2 ай бұрын

Gold Milkshake "You won't be drinking My milkshake!"

@easterntechartists 2 ай бұрын

What if they confiscate gold like in the 70s? Don't think anything is safe from government power of force to jail or confiscate anything they want if desperate

@HCapitalLLC 2 ай бұрын

By the time the government confiscates gold, it may be a good time to buy US equities (at far lower valuations than now)