Macro Investor Bert Dohmen simply issued a dire warning on the way forward for the US and world financial system.
In a brand new interview with Stansberry Analysis, the founding father of Dohmen Capital Analysis says anybody who believes the banking disaster is over is engaged in wishful considering.
“We’ve got three of the most important banking failures in US historical past inside six days and everyone’s pretending it is a one-off occasion that received’t occur once more.
That is the tip of the iceberg, and if about icebergs one-seventh of the iceberg is above water. Which means six-sevenths of the iceberg is beneath water and that’s going to sink everyone else.
Not solely did we’ve got these financial institution failures within the US, it was adopted by the most important financial institution failure in Switzerland ever. The largest financial institution, Credit score Suisse, 137 years previous, went bankrupt in a single day and needed to be bailed out. That is going to be a world disaster.”
Dohmen says a long time of systemic danger has additionally constructed up within the derivatives market, which he believes is headed for a seismic crash.
“There may be about $1.6 quadrillion of derivatives excellent internationally. That’s such a staggering quantity. Nobody can actually think about how huge that quantity is, and it’s completely unregulated. The CFTC in 1999 tried to get derivatives regulated and was fought by the most important names conceivable within the funding subject as a result of it might have stopped that complete recreation of enjoying with derivatives…
Now no one actually is aware of precisely how huge it’s. The most effective guess is $1.6 quadrillion. It could possibly be $2 quadrillion {dollars} of derivatives. Once they begin falling aside it’s going to be like dominoes.”
Dohmen predicts the Fed will print trillions upon trillions of {dollars} to attempt to stabilize markets.
He says he withdrew cash from banks nicely prematurely of the present disaster, and if US lawmakers don’t reverse course, he forecasts an financial collapse as unhealthy or worse than the Nice Despair.
“At first of 2020, in order that’s three years in the past now, we mentioned this decade goes to be just like the 1930’s as a result of the cycle referred to as for that. So which means a 10-year melancholy, however I mentioned it is going to most likely be a lot worse than the Nice Despair and all of it depends upon what the federal government and the Federal Reserve does.
We now see that we’re doing the identical factor because the 1930’s the place it was a 10-year melancholy. It may have been a two or three 12 months recession however the insurance policies of Washington actually made it a Nice Despair… spending up the wazoo, tax will increase such as you can not imagine.
[President Biden wants] to double the capital positive factors price tax from 20% to about 40%. It is a killer for the financial system. It’s buyers that make the financial system. They create companies and companies create jobs. If no one’s creating companies you don’t have any job creation and every part is finished with freely giving cash and we noticed what that induced.”
Dohmen, who shouldn’t be a believer in Bitcoin and crypto, says gold might be a secure haven – however solely after a coming crash.
“The primary [gold] section that we’re in proper now’s on the way in which to a high, an necessary high, after which a really robust correction in gold.
So don’t be trapped whenever you learn headlines that gold made a brand new file excessive. That might be a promote sign… Then you definately’re going to have an enormous drop and finally you could possibly have a fantastic shopping for alternative when the central banks step on the accelerator and create trillions and trillions of {dollars} of synthetic cash.”
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