In Part II of this eye-opening interview, financial expert John Rubino (https://rubino.substack.com) joins James Connor to reveal why a massive monetary reset isn’t just likely, it’s inevitable. With debt levels spiraling out of control and markets more dangerously overvalued than during the 2000 tech bubble, Rubino explains why a severe market correction (potentially a 50%-80% crash) is on the horizon.
Learn how and why central banks worldwide are quietly stockpiling gold, positioning themselves for a historic return to a gold-backed monetary system. Could gold prices explode to as much as $20,000 per ounce?
Stay tuned until the end of the video for valuable expert commentary from Chris Casey of WindRock Wealth Management, who analyzes John’s insights and provides actionable guidance on how investors should navigate these uncertain economic times.
If you missed part I of John’s insightful interview, go here: https://youtu.be/t6HUOmhTwFc
Investment Concerns? Get a free portfolio review with Wealthion’s endorsed financial advisors at https://bit.ly/4hoDyeM
Hard Assets Alliance – The Best Way to Invest in Gold and Silver: https://www.hardassetsalliance.com/?aff=WTH
John Rubino 0:00
We really need the monetary reset that we’ve been having heading for for such a long time, you know, because the the current system just flat out doesn’t work. We’re going to do monetary reset. We’re going to have to have gold backing the dollar and the yen and the euro at a reasonable valuation. Then you get 10 to $20,000 gold, which means $3,000 is nothing, right?
James Connor 0:27
Okay, so you mentioned recession a couple of times, and I almost get the impression the current administration is preparing the public for a recession. And just recently, Scott percent said that there are no guarantees that there will not be a recession, and we’ve had a significant pullback in both the S, P and the Nasdaq. And so when you talk about a recession, you think it’s going to happen. You think it happens this year in 2024 and how severe will it be? Well,
John Rubino 0:56
it, you know, I’m, I’m the worst predictor of the timing of anything that you will ever met in need. So if I say it’s going to happen this year, then you assume it’s going to happen two or three years from now, if it ever happens. So, you know, it feels like a lot of the imbalances are building up that would normally be expected to cause a recession. So based on that? Yeah, I think it’s, it’s fairly soon. You know, I think stocks are wildly overvalued, so just a bear market in equities could be the thing that cause, causes a recession this time around. But I think slower consumer spending is, is right there, along with whatever else happens. So yeah, I think we get a recession sooner rather than later. And I think there’s a potential for it to be very serious, just because there’s so much bad that bad paper out there, you know, there’s an awful lot of subprime paper in whatever sector you want to look at, and those things can behave very erratically. They can behave like equities when the time comes, you know, they can really plunge in value and set off chain reactions that could be very dangerous this time around. Now, having said all that, we really need the monetary reset that we’ve been having heading for for such a long time. You know, because the the current system just flat out doesn’t work. We tried the fiat currency experiment in began it in 1971 and since then, the amplitude of the booms and the busts that have happened have gotten bigger and bigger. The amount of debt basically everywhere you look, has gone parabolic, and there’s no way to fix it with the current system, because the current system is designed for increasing debt year after year after year, and that debt has become debilitating, so it has to blow up on us, and we really might as well just get it over with. You know, there’s, there’s no return to normality in a system that encourages all the big governments of the world to continuously create more and more debt and then encourage the private sectors in their countries to do the same thing, you know? So let’s just, let’s get it over with. And if it happens next year, I think that would be the best for all concerned, because the further out we push this, the worse the eventual consequences are. So they’re going to be bad as it is because we’ve pushed it way too far, but later will be worse. So I would say the best thing that could happen for us right now is to have a big crisis that involves the currencies, not just private sector debt or whatever, and get it over with, have Jim Rickards monetary reset, and then go back to some kind of a sound money system. You know, it looks like the central banks of the world are prepping for a gold backed monetary system in the not too distant future. But, you know, there are other candidates out there. We’ll just have to see what the base money of the system is when the reset happens. But I suspect it’s going to be gold, you know, and I think that that accounts for the gold price going up as dramatically as it has lately. You’ve got all the central banks of the world scrambling to get their affairs in order for a monetary reset, they have one. They want to have as much gold as possible on hand when that happens. So they’re, they’re not really price sensitive buyers, because they’ve got this target out there that they’ve got to meet, and they’re willing, you know, within reason, to pay anything they have to pay to get the amount of gold that they think they’re going to need. I want
James Connor 4:41
to pick your brain a little bit about equity valuations. And if we do get this economic reset that you’re referring to, we’re going to see a significant pullback here in the final in the equity markets. And I recently read one of your sub stacks, and it was titled rhyming history. And in that article, or sub stack, you compared the current. Bubble that we’re witnessing right now with the 2000 tech bubble. Maybe you can just discuss some of the similarities that you see between now and then. Yeah, in
John Rubino 5:10
the 1990s a new technology came along that was going to change the world. It was the internet, and people got very excited about this, this this new thing that was going to grow basically forever. And they concluded that no price was too high to pay for companies in that space. So they basically bid up the dot coms, which were the internet companies at the time, to levels that nobody had ever seen before. And we reached a point where the global economy depended on the US economy. The US economy depended on the US stock market, and the US stock market depended on 15 or 20 big tech companies that, in the aggregate, weren’t even making any money. So you reach a point where you’ve got to have a crash, and in 2000 that crash came, and a lot of those big tech stocks became members of the 90% club. In other words, their stock went down by 90% in the crash that happened in 2000 through 2022, or 2002 now fast forward to today, and artificial intelligence is going to change the world, and it’s going to do, you know, everything you can imagine it’s going to do. And the companies that dominate that space are infinitely valuable. You pay anything you have to pay to get Nvidia stock, because Nvidia is going to grow infinitely, you know. And so that’s where we are now with basically the same story on a much bigger scale. The numbers are much higher, the amount of money that’s been tossed at these companies is much bigger, and the valuations of the big tech stocks today are richer than they were back then. So yeah, we’re we’re in a place where, historically, you get a massive crash, and that leads to a big recession. So just, just taking stock market valuations as our indicator, you get a crash, and you get a recession that flows from it, you know. So all this other stuff that we talked about that’s that’s extra for the recession that’s coming, which is basically, basically could just be driven by a bunch of overpriced big tech stocks just going back towards their intrinsic value, which is 50% to 80% down. And that’s already starting to happen. Right? The last couple of weeks, equity prices have have dropped by like 10% pretty much across the board, and some tech stocks have dropped a lot further than that. So this could be the beginning of a 20 or 2000 to 2002 kind of bear market in some corners of the stock market, and maybe the broad stock market. So we’ll see. But when it happens, it’ll look like the last few weeks in in the US markets. Stay
James Connor 8:04
tuned for the second part of this interview, and we have a discussion with Chris Casey of Winrock wealth management to hear his thoughts on what John robino said, and also what he is suggesting to his clients do during these tumultuous times. So you mentioned that we could see a pullback of 50 to 80% depending on what index. And back in the tech bubble of the early 2000s the NASDAQ pulled back 80% from its peak to its low. Hard to believe, but crazy numbers. And right now we’ve we’re down 10% which is just, you know, a regular pullback. It’s nothing really to be concerned about. We’ve seen many of these in the last few years. In August of 2024 the markets got hit hard. They pulled back, all on the back of this unwinding of the yen carry trade, and then they recovered quite quickly and went on to make new highs. Do you think we could be in a situation like that right now, where we should be buying this pullback. Well,
John Rubino 9:04
a whole generation of investors have been trained to buy the dip because that’s what has worked since. Well, since 2002 you buy the dip continuously, and that’s basically the lifetime of most professional investors, you know, they’ve just learned that our system always bounces back. So, yeah, you know, it’s completely possible that a lot of new money pours into the market and stocks go right back up again and maybe make new highs. But it’s also possible that this is 2000 again, because by the dip works until it doesn’t, and there’s really no way to know ahead of time which dip is going to be the one that doesn’t come back, you know, and that just keeps on going down and takes the fortunes of all the people who have been trained to. Buy the dip along with them. So, you know, I think fundamentally, the US economy is at such risk right now that this could be the dip that turns into the bear market, that turns into the depression for at least some big sectors of the economy. But who knows? You know, I, if you’d asked me this five years ago, I would have said, you know, the big crash is coming, and be very careful and start raising cash. I would have told you to be super careful, and I’m telling you that again, but we have to keep in mind that I was wrong. You know, last time I would have told you that. So there’s no guarantee in the stock market about anything, but I think this is an extremely risky market, and watching what Warren Buffett is doing is probably a good signal right now to how we should be behaving with our own capital.
James Connor 10:56
I appreciate your honesty. A lot of people wouldn’t admit that, but okay, let’s just assume we’re going to get this pullback in the economy. Go into recession. We got a significant pullback in the equity markets. You’ve already touched on gold a couple of times, and why? Why we should own it. What are your thoughts on gold right now? It’s, let’s just call it $3,000 give or take. How high do you see it going? Yeah.
John Rubino 11:19
Can you believe gold is 3000 now, it wasn’t that long ago when it hit 2000 I think
James Connor 11:24
it’s still under priced. Yeah, yeah. Well,
John Rubino 11:28
if you assume we’re going to have a monetary reset, and that gold is going to be the base money of that reset, then the question is, at what price do we do? We put gold at the, you know, the base of the monetary system? And the guys who’ve run the numbers for, you know, the price of gold that we would have to have in order to back the world’s fiat currencies by, say, 40% which is the percentage that pertained for most of the classical gold standard couple of centuries. Well, if we did that now, with all the paper currency that’s out there, we would need 10,000 to $20,000 an ounce for gold. So, you know, assuming that logic train is is valid, and we’re going to do monetary reset, we’re going to have to have gold backing the the dollar and the yen and the euro at a reasonable valuation, then you get 10 to $20,000 gold, which means $3,000 is nothing, right? So,
James Connor 12:36
so 10 to $20,000 is a big range, it
John Rubino 12:40
is, but, you know, it, it depends on how much new currency we create in the process and trying to bail ourselves out of the next recession, and what level of backing we decide to choose. And, you know, there’s so many imponderables right now, so many variables, that there’s no way to put a one price out there and make that a prediction for gold. So the fact that it’s almost certainly going to be a lot higher than it is today is really the important thing. So that that means your $3,000 an ounce gold isn’t this wildly overvalued kind of tech stocky kind of thing. It’s, it’s still a reasonable price. That doesn’t mean it won’t correct. I mean, we could go back to $2,500 an ounce easily in in a lot of year Head scenarios out there. But I think if you were, if you’re thinking of gold as your your personal financial bedrock money, you know, then it’s not a thing you trade. So yes, it’s way up. And yeah, you know, it never hurts to take a little bit off the table when you have something that’s gone way up. But the vast bulk of your physical gold ought to just stay with you as generational wealth. Just hold on to it, you know, and know that it will bail your kids out of some bit of trouble sometime in the future, or your grandkids or whatever, because it’s not, it’s never going to lose its value. You know, gold will stay valuable and stay useful for a long time. Now. The that’s not the same thing that you might say about the mining stocks that benefit when gold goes up, because there’s a point at which they might get overvalued, you know, and you want to take profits and then take more profits or whatever. They’re not there yet. They’re still pretty cheap. The gold miners, relative to gold, are still pretty cheap, and they’re they’re generating more cash flow now as the thing that they sell goes up in value, and that’s allowing them to do a lot of good things. They can pay off debts, they can buy back stock, they can raise their dividends, and that makes. Them a lot more attractive. So when their cash flow goes up like this, you got to kind of revalue the gold miners in in your own mind, because they they become much more successful companies and much more able to do things. And then, you know, later in the process, the m&a starts when, when these big gold miners that have massive amounts of new cash flow start going out and and increasing their reserves by buying the explorers that have found pretty good deposits, or buying the smaller producers that they can fit into their portfolio. And and you get a lot of really nice moves by the smaller entities in this market. So I think the big miners, seeing their cash flow go up is a reason, reason to buy them, for instance, for their dividends. You know, even though their dividends aren’t high as a group, they should be rising in the next few years. So you know, if you’re a cautious investor, this is still a good time to buy the big gold miners. And if you’re risk tolerant, there’s a lot of smaller miners and explorers out there that are probably five to 10 baggers right now. And so if, if you can tolerate the risk of things that can, you know, be a five bagger and also just completely go out of business, there’s a lot of opportunity out there now. So in my steps substack, I have a portfolio of gold mining stocks that includes a lot of little 10 bagger lottery ticket kinds of stocks. And, you know, a lot of them have not worked out, but a few have, and I think a lot will in the future. So it’s, it’s an interesting time right now and a risky time. But if you’ve been paying attention to precious metals for a while, I think you’re aware of a lot of opportunities that that might just be borderline, borderline life changing investments over the next decade. I always
James Connor 16:56
like to finish on a straw note, and you just did. And John, I want to thank you very much for spending time with us today. You mentioned your sub stack. Can you give us the details if people want to learn more about you and read some of your research work, and they go, Yeah, I’m at rubino.substack.com
John Rubino 17:12
and I’ve got a newsletter there that is about actionable ideas based on all the gloom and doomy kind of financial stuff that we talked about today, and so far so good. You know, there’s a lot of opportunities out there that that readers are taking advantage of. So it’s turning into an interesting community.
James Connor 17:33
Yes, and I like the way, I like how you think, because even though you are predicting a recession and a significant pullback in the equities, you got to look at it from an opportunistic point of view. And out of this can come great opportunities, and we have to take advantage of it and be in a position to take advantage of it, John, once again, I want to thank you very much for being with us today. Thanks Jimmy, Chris, thank you very much for joining us today. You and I both listened to the John Rubino discussion, and I just want to get your thoughts on a lot of the things you said about the US economy and also equity valuations and what you’re proposing your clients do during these uncertain times. And why don’t we just start with the US economy? John expressed a lot of concerns with the economy. What do you and your team think of the US economy right now as it stands?
Chris Casey 18:22
Yeah, well, first of all, I’d have to say that I’ve listened to a lot of John robino other years. I definitely like what he has to say. I generally probably agree with the vast majority of what he just said. We are likewise concerned about the economy, maybe for different reasons. A lot of people focus on what I would call the sparks that so called, create a recession. When reality, it’s it’s kind of like a forest fire, like everyone’s focused on that this campsite started, or that campsite. In reality, you should be looking at the conditions. It was dry, it was windy, there was too much undergrowth that that’s really what’s you should be looking at. And for us, the analogy would be, that’s what you’re over your money supply represents. That’s what the inverted yield curve represents. That’s what you know credit spreads represent. If you look at that kind of data, I’d say two hour three have been flashing red signals, and they’ve been flashing red signals for about two years now, really since late 2022 so just over two and a half years. So we are definitely concerned. Now, the question would be, well, what could spark at this time? And really anything could My personal theory would be that we could have an impasse at the budget here. I know we just passed continuing resolution, but I think we will have what I would call a gilt crisis in the US. So you may recall, in october 2022 on in the United Kingdom, their government bond, tenure, government bond, known as the gilt, they passed a new budget, or proposed new budget, and those spread, I’m sorry that yield on that tenure went from like 3.3 to 4.5 in two days, right? It dramatically increased interest rate. Because everyone was concerned this new budget that could never pay down the debt. Well, we may be entering that right now with the US. I thought we had a real chance here to cut back government spending, and instead, we passed another continuing resolution, despite all the progress doziers made, except etc. The reality is, without congressional approval and congressional changes, no real change is going to take place. So I am concerned about recession. I have been concerned about recession for some time based on the factors I just mentioned. But I think the probability, as time goes on increases. So I think, if anything, people should be more and more cautious, not less. And to
James Connor 20:39
your point, people have been talking about a recession now for quite a few years, and it hasn’t come. It just keeps you know the economy is doing okay. The US GDP is growing at around 3% the unemployment rate is staying relatively low at 4% give or take. But what concerns you when you look at the when you dive deep down on the US economy, what elements really stand out to you that give you concern about how the US economy is doing and where it’s going? Well,
Chris Casey 21:10
there’s probably a whole bunch of different factors. You know, if I was president or part of the administration, there’s a whole host of things reforms that would have enacted. But for me, the biggest issue will be, and probably will be for the next 10 years. Unfortunately, the overall fiscal situation, I mean, money supply growth, has been, you know, it’s low single digits. So that’s not pretending, necessarily anything dire immediately. It’s not, neither is it pretending anything that’s or predicting anything that’s really beneficial for the markets. But for me, ultimately, it comes down to the budget and and it’s what it does to the overall debt levels, because there’s no way us, government can ever pay this government, this debt down right? It’s just impossible without inflating the currency. So I really think that’s I think that’s what everyone should be laser focused on the debt and actions to reduce the debt. If no action is taken or things are get worse over the next year or so, then all bets are off. Because, frankly, Trump and this administration has the most power right now, because a year from now, you have razor thin you already have razor thin majority in the House. Every Congressman there starts looking at their reelection, right? That’s all they’re thinking about. So if you’re gonna do anything, it should have been now, and I’m afraid, if you don’t do it six months from now, when they run out of money with the latest continuing resolution, that’s when we could very well see a crisis develop, if not sooner.
James Connor 22:31
Interesting point, and we do have the midterms coming up in two years. So there is a lot of commentary about this recently, and a lot of people are thinking the current administration is trying to push this economy into a recession, get get the pain over with relatively quickly, and then get ready for 2026 Do you think they’re actually trying to orchestrate that? I don’t know.
Chris Casey 22:53
It’s quite possible. I mean, people would say that Reagan did that when he passed his tax cuts back in 1981 they would argue that he couldn’t have done that without kind of double dip recession that was experienced right then. I don’t know if that’s really part of the playbook by the administration. It could just be that they think it’s a high likelihood that this could happen. I mean, they have a very good secretary of treasury, unlike, you know, his predecessor, so that would not surprise me if they thought it was coming, and they’re just trying to politically position themselves accordingly. That’s, I think, more likely than any kind of planned recession where they think they could do something with it. And you
James Connor 23:27
touched on the debt levels a couple of times. So it currently stands around 36 or $37 trillion just the mind boggling number. The interest payments are well over a trillion dollars now to service that debt, and the debt to or the deficit as a percentage of GDP, is around 7% right now, and the current administration wants to get it down to 3% do you think that’s possible in the next four years?
Chris Casey 23:52
I don’t. I if you asked me this two months ago, I said it was highly more likely than I do now. By the way, I’m not sure why the target’s 3% I’m not sure why it’s not zero, because zero gets you. You’re not making things worse. You’re not really making things better at three, right? Better than what they they could be at seven, but it’s not diminishing the overall debt levels in any capacity. So do they get there in four years? I highly doubt it. And this is based on, I mean, the second time Trump’s been president, yes, he’s much better prepared this time. Yes, I love what he’s doing. He’s doing it far faster than we did before. However, he never really touched the budget he was on when he was on Joe Rogan he said it was for COVID. They would have balanced the budget that year. I mean, that’s just, that’s just wasn’t possible. It’s not feasible, and that wasn’t going to happen, but I’d be surprised if they’re south of 5% in four years. And frankly, if we have recession, which could be a prolonged and fairly severe recession, it could be far worse.
James Connor 24:53
So let’s talk about equity valuations now. And this is something else John talked on. He. He thinks we’re going to get a pullback in the economy, which will lead to a recession and also a bursting of the bubble that we’re looking at right now in the S P and the Nasdaq. And he actually said the things the S P can pull back, I think the numbers he threw out was 50 to 80% and he’s comparing that to what we saw in the early 2000s when we had the tech bubble. What are your thoughts on equity valuations? Do you think we’re going to get a significant pullback right now? The S P’s are down around 10% on the year, or from its peak. What are you looking for in terms of a pullback here in the S P and the Nasdaq Well, as far as
Chris Casey 25:37
the worst thing in the world for equities would be any kind of economic weakness, whether it’s a recession or otherwise, or rising interest rates, right? Slow growth and rising interest rates are recipe for contracted PE multiples, or any kind of, really, for that matter, valuation multiple. So he’s right on point that could very well happen. Now it’s a little bit different when you’re actually managing people’s money, and you have to prepare for it, versus just, you know, speculating what could happen. So, I mean, everyone should be defensive. Everyone should have high cash positions. Everyone should think about what gets hurt in a recession the most, as far as, like, cyclical stocks, etc, anything with, you know, high valuations. That’s how really people should be positioning themselves going forward. As far as what, what happens with the S, P and and NASDAQ, I don’t know exactly, but, I mean, we’ve seen this happen before. It’s not ancient history, right? We’re not talking about the Great Depression, although that’s at some off limits. We could talk about what happened then, but you just got to look back in last 25 years, and we’ve seen this happen before. Yes, there could be a huge downturn in equities. I’m not saying there will be, but if the conditions are right, that absolutely could happen.
James Connor 26:45
And John was very bullish on gold. Do you and your team have a view on gold?
Chris Casey 26:50
Well, we’ve been bullish on gold for a while. I’d say we are still so called bullish. Gold is not cheap at this level. It is, but I think everyone so instead of everyone piling in right now and establishing large positions, I would phrase it more so if you don’t own gold, you should consider owning gold. If you do own gold, I don’t think I’d be a seller at these levels I like just based on purely the solvency crisis, which I think eventually happens for the US, it’s prudent and proper for investors to consider fairly large precious metal positions, gold or silver. So I like gold, and gold at 3000 like obviously much more at two, but frankly, gold could easily be above five, 5000 an ounce, if we have a major solvency crisis here. That’s That’s certainly not unreasonable by any means, and it could happen quickly, because we just saw gold go up by a third in just over a year, right? So it doesn’t take a lot to push up to five right now.
James Connor 27:50
And to your point, you always have to, when you’re a money manager, you always have to have an allocating allocation toward the equity markets. But you can reduce it. Have you reduced that exposure to the s, p, and have You increased your weighting in cash or cash equivalents? Yeah,
Chris Casey 28:06
we’ve been pretty defensive for a while, concerned about the market. So it doesn’t mean we’re not buying things. You know, we’re, there’s always rotation, there’s always opportunities. So it doesn’t mean, you know, we’re, we’re stagnant or not doing things. We’re just out of the market. That’s actually probably a big problem psychologically for a lot of people, because it’s very easy just to get out of the market completely, right? It’s like a cave bunker mentality when you’re in there and you’ve got, you know, golden bullets, you know, that’s, that’s, that’s fine in dire situations. But the reality is, you know, life gets in the way. People have retirement, they have goals, they have objectives. You just can’t do that completely. So I’d say overall, we’re very defensive. But that doesn’t mean it’s like a bunker type mentality.
James Connor 28:46
Well, Chris, that was a great discussion, and I want to thank you for providing your feedback on John rubinos conversation. And if somebody would like to learn more about you and your team and also Winrock, where can they go? Yeah,
Chris Casey 28:58
well, I’d say we post all of our past research, all of our post podcast. Obviously, we’re on wealthion frequently, so you can go to that website and just kind of, you know, search our names and a bunch of videos that come up. We also have everything on our website, which is windrockwealth.com and we push everything out via x, which is at windrock wealth. So feel free to check us out there. Chris,
James Connor 29:18
once again, thank you. Thank you, Jimmy, you.
