Economist and strategist Simon Hunt lays out a bold, non-consensus vision of the years ahead, and it’s nothing short of a global reset. In this gripping interview with Maggie Lake, Simon reveals why the U.S. is already in recession, why inflation is far worse than reported, and how a geopolitical escalation with Iran could accelerate the collapse of Western economic dominance.
He explains how the BRICS nations are preparing a gold-backed system, why global supply chains are shifting, and why AI-powered factories in China are reshaping global economic power. Plus, he shares what investors must do now to prepare before the system breaks by 2028.
Key insights:
- Why U.S. CPI is really 9–10%, not 3%
- The debt spiral: new debt is being issued to pay old debt
- A coming geopolitical trigger from the Iran conflict
- Gold, the yuan, and the ruble as post-dollar safe havens
- Why you should hold physical gold, not ETFs
- A commodity cycle: sharp fall, then double by 2027
- The end of just-in-time and the rise of strategic stockpiling
- China’s AI-driven factory revolution and arms race
- What a “short boom before the big crash” really means
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Simon Hunt 0:00
We will have us CPI and global CPI. Double figures, what does that mean for long bond yields? Double figures, what does that mean to an economy, not only a US economy, a global economy that’s highly indebted. It crashes.
Maggie Lake 0:29
Hello everyone. Welcome to wealthion. I’m Maggie Lake, and today I’m joined by Simon hunt, founder of Simon hunt Strategic Services. Hi, Simon. Thanks for being with us.
Simon Hunt 0:37
Well. Thank you for having me. Though after our conversation, you may regret it,
Maggie Lake 0:44
I highly doubt that. Before we jump in, just a reminder to all of you who are listening, if you have any comments or questions, please drop them below. We’d love to hear from you, and if you want to take a fresh look at your asset allocation. After what you hear, you can get a free portfolio review from one of the advisors in the wealthion network. Just go to wealthion.com/free so Simon, I thought we might start just getting a little bit of a sort of set the table with what your your macro outlook is. And let’s start with the US economy. What are you expecting from the US economy for the remainder of 2025
Simon Hunt 1:19
so very good question to start with, I have a non consensus answer to that for two prime reasons, the CPI data has been manipulated ever since pre Arthur burns In the 1970s so that the CPI is not 3% as it was reported to be last year, but somewhere between 9% and 10.8% Wow, 9% is the figure that Larry Summers and his team, they took the methodology back to 1983 and concluded that CPI last year was 9% guy that I followed over the years is John Williams of shadow government stats, who takes it all the way Back prior to Arthur burns, and his figure is 10.8% now, if you think about it, what was one of the big reasons why so many households switch from Democrats to Republicans? Because they saw it in their weekly and monthly bills. It’s not 3% and the other heavily doctored figure is the unemployment data, thanks to the birth death model, so you create a completely false foundation for what is really America’s GDP. So basically, America started entering recession in October last year, and we think that, and it’s quite clear that the soft data is beginning to be seen in the hard data, and with the shocks that I think we’re going to see, maybe starting next month, that it will become more generally appreciated that America’s economy is not the exceptional state, but it is far weaker than is generally believed.
Maggie Lake 3:54
I think that your point that sort of ordinary folks are feeling that inflation is a lot higher than the official statistics. Matches up. We know that from confidence levels and from some of the surveys that they have been expressing, the fact that they feel like inflation is is much higher. Why are we why are we experiencing such high inflation? Where’s it coming from?
Simon Hunt 4:22
Monetary policy over the last 10 years, basically plus food inflation. I mean, if you look at globally, I just looked up the faos global food price index may on May, it’s up 6% but you have a few items up like, like meat and vegetable oils up around 20% and I think. That, leaving aside what may happen with energy prices for the moment, you’ve got the weather patterns completely changing, and with the gleisberg cycle likely to kick in next year, the last time we saw that was in the 1990s which led to the Midwest dust bowl. So I think third, inflation is going to be a primary worry, not only for households, but for policy makers. What does that mean for interest rates? What does that mean for long term bond yields? The short end can be doctored by the Fed, but not the long end. So if you’ve got which we think by 20 late, 2027 early, 2028, we we will have us CPI and global CPI in double figures. What does that mean for long bond yields, double figures. What does that mean to an economy, not only a US economy, but a global economy that’s highly indebted, it crashes
Maggie Lake 6:37
when you say inflation is coming from monetary policy. Can you, can you explain that a little bit what the I’m assuming you mean the, you know, extraordinary stimulus that we saw, and very low interest rates. But can you, can you explain why you think that’s driving inflation? Because traditionally, when we see an inflation spiral, it’s built into wages, but wages have been subdued, and people feel like they haven’t. They don’t. They’re not always in the driver’s seat with inflation. So how is it filtering through?
Simon Hunt 7:05
Well, inflation goes in cycles. If you go back to the 1970s CPI inflation pattern, it came up like that. It came down and went up. And we’re in that same process at the moment. So what are wages going to do? Wages will probably be have to go up higher as inflation rises. So it’s a cycle where probably in the bottom of the cycle now, and how quickly inflation rises may well be determined by What happens in the Middle East,
Unknown Speaker 7:59
how so oil
Simon Hunt 8:02
oil, Iran has yet to make the decision on whether or not to close the straits. They made these preparations at least two years ago. The sea bed has been mined with explosives which can be triggered by a switch, and they have a couple of tankers which they will sink in the narrow part of the channel. And I saw on a video a dress rehearsal that was done a few days ago. So in the before they’ve they make the decision on whether or not to to shut the straits down. They have announced that any vessel passing through the straits will have to have permission to pass by the Iranian government. And I, I was just heard today that there are tankers lined up waiting to go through. The other thing you have to consider is probably now insurance companies won’t provide insurance for vessels going through. So that’s the first part. I mean, if America attacks again, which I think they will, then I’m pretty sure that Iran’s retaliation is. Will follow, and how big that retaliation will be, is probably being determined today in meetings with the Iranian Foreign Minister and President Putin. So we’ll know more in the next couple of days, but I think the odds are that there will be another American attack and ongoing after that, this is not going to be a short war. The foundations of the war are not just Israel and America’s wish for or determination for regime change and almost the destruction of Iran, it also fits into the bigger picture, which is Iran is a crucial logistical hub for the east west corridor and the north south corridor. And on top of that, the new 10,400 kilometer railroad from Xian in western China into Tehran opened just a few days ago, along which Iran can export its oil and petrochemicals into China without the ability of America to close down the various choke points. And, of course, China exports of whatever into Iran. So it’s not just Israel and America’s wish to see Iran being destroyed. It’s all part of the bigger picture of America not wanting to see the BRICS group of nations maturing into an operating unit, because if that happened, America’s hegemony would disappear. So you’re talking about, you’re talking about not just a regional war, but a global one.
Maggie Lake 12:56
Yeah, I was going to say the consequences, or the stakes around the situation that you just described are so high. Let me, let’s circle back for a moment on the on the US side, and then I want to go back to the global economy. So you mentioned, so you’ve got this geo, rising geopolitical complexity and risk around that. You mentioned the weather, which we don’t talk about all the time, and the potential for disruptions on food supply, pushing up food prices in this kind of inflationary scenario, stagflationary scenario, it sounds like you’re describing. Is there anything? What tools does the Fed have, or the or US policy makers have to try to combat that? Do they have tools that they can use to try to address that situation?
Simon Hunt 13:49
What did they do on the onslaught of COVID spend at some stage they will flood the system, not just in America, but globally, or let me be more precise, in g7 countries, central banks and governments will flood the system with liquidity. And what does that do? We know that’s part of the new inflation spiral.
Simon Hunt 14:36
It it is stagflation. It will be stagflation. What does that mean? It means that there comes a point when inflation is rising higher than growth. Growth will be driven by inflation by ourselves, instead of spending x. Dollars a month, it’ll be x plus y dollars a month on their necessities, which means, then that the non essential spending will be cut back. And what does it mean for corporates interest long term interest rates rise. They see inflation rising sharply. They buy more goods, whether it be components, products, anything. Instead of holding, say, two weeks of stocks, it’ll be four or six weeks. And in fact, there’s a much bigger development that is probably only just starting, and that is with supply chains, global supply chains, being disrupted and being uncertain. Companies will be ditching just in time that optimizes capital in favor of holding additional stocks of everything in order to to have their security for the supply chains, what is that going to do to inflation? And then if we do, if we’re right, and we do get rising energy prices, what does that do to shipping costs?
Maggie Lake 16:45
So what do you think this does for earnings,
Simon Hunt 16:53
not my not my discipline,
Maggie Lake 16:57
but you. But it sounds like you’re painting a situation. Well, let me rephrase it this way. I mean that does not sound like a good scenario for earnings. It doesn’t sound like a good scenario for it sounds like a scenario where, you know, high inflation and rising interest rates, usually, against that backdrop, we have rising default rates. This doesn’t sound like a positive situation for equities.
Simon Hunt 17:23
Oh, well, equities, you’re going to have very short term, sharp rallies followed by protracted falls. I mean to quote one example, I think we are, at the moment, now, at a very critical inflection point, taking the s, p as an example, and that will be followed by at least a 25% fall over the summer months, then you will have fed starts and all the central banks, because this will be partly due to geopolitical, political pressure points intensifying. So that’s when, by the end of this year, central banks and governments will be starting to flood the system. So on our work, we will see markets bottoming by the early months of next year, and then you probably over the next 18 months, you see a doubling in prices. Then you get the big fall, because 2728 you’ve got double digit inflation, double digit yields on long term bonds,
Maggie Lake 19:08
double digit yields on long term bonds, yeah.
Simon Hunt 19:13
What did we see in 1980 15%
Maggie Lake 19:22
is this, I mean, coming off of zero interest rates. This does not sound like a world that’s set up for that type of no spike in yields. So where do so it’s, do you think that Treasuries are a viable safe haven anymore from inflation, or is that model broken?
Simon Hunt 19:43
I think you can have a short term drop in yields, because the Treasury is desperate to get yields down as they’ve got seven odd trillion to refinance, and if you refinance. At 3% and not at four and a half percent. That’s a big difference, that it’s only going to be a short term rally and then bye, bye. If
Maggie Lake 20:15
you have any questions about how to navigate the current environment, wealthion can help connect you with a vetted advisor to get a free portfolio review, just click the link in the description below or head to wealthion.com/free there’s no obligation, and it will just take a few minutes of your time. Again, that’s wealthion.com/free thanks so much for joining us. So where, where do you see safe havens against that kind of world, in that kind of world, against that kind of backdrop,
Simon Hunt 20:47
I think the primary beneficiary is gold. I think that if America fails to demolish BRICs. Gold will be the foundation for their new currency. At the moment, the Shanghai Gold Exchange is in the process of building gold vaults in BRICS member countries, actually, I think the first one that is being built for other reasons is in Saudi Arabia. So the game plan is obvious that a country that is running a trade surplus with another one, the balance collateral is held in gold in the Shanghai Gold Exchange in that country, it’s basically what goes on with the trade between China and Russia, as I understand it, Russia holds A very large trade surplus that’s collateralized with an equivalent amount of gold held in China’s central bank. Gold the
Maggie Lake 22:09
difference the world returns to a gold standard. The bricks world returns to some sort of gold standard.
Simon Hunt 22:15
Well, that’s, that’s what bricks is going to do whether America and g7 countries follow suit? Is a different question. It’s I mean, I, I, I wrote a paper about a decade ago based on something that a well connected friend of mine, who unfortunately passed away, tipped me off about where you said, Simon, think about America having $2 one for domestic consumption, which will be backed by the gold that the Treasury holds, and the other will be the international dollar, which will have to find its own level. Whether that’s part of today’s game plan, I have no idea. But look, makes some sense.
Maggie Lake 23:25
So people have been warning about debt levels for a long time. Why are we hitting a tipping point now?
Simon Hunt 23:35
Because it’s got to the point where you are having to issue new debt to pay old debt.
Maggie Lake 23:42
So we’re just not growing quick enough. Demographics are not in our favor. Yeah, that’s a, that’s a that, you know, that’s quite a, that’s quite a difficult outlook. Is there? Where do you see outside of gold? Where do you see the opportunity? It sounds like, let me rephrase that. It sounds like there are so many losers and the system is going to come under so much strain that it’s hard to imagine that anyone gets out of that unscathed. So even if, if the sort of developed countries all collapse under the weight of this debt, and the financial system, which is operating on dollars, blows up, can there be any winners, like, can people isolate themselves? Can countries and investors isolate themselves, or does everything fall? And I think, I think sort of global, coordinated reset, I guess, is the answer,
Simon Hunt 24:48
households, it’s best to your food prices are going to rise. So start planning for that. Now. You. Not when they do rise. So to survive, you need to have in you need to have surplus food in your house, then you use on a daily basis. That’s that’s for households, corporates. There will be, there’s, obviously, there will be the survivors, those with very strong balance sheets. There’ll be a lot of failures. Um,
Simon Hunt 25:44
I think that you’re going to see growth in parts of the world that have not participated in last 1020, years of prosperity. I think parts of Africa are going to be very interesting opportunities. Obviously, parts of Asia, if I’m looking 10 years out, this is very non consensus. I think the two currencies well over the next five years, the two currencies that will significantly outperform the dollar and the G, the other g7 fiat currencies will be China’s CNY and Russia’s ruble.
Unknown Speaker 26:46
The ruble,
Simon Hunt 26:49
yes, you look at the chart of the ruble now it’s already turning round.
Maggie Lake 26:57
Is that predicated on Russia and Ukraine ending the war of Russia reintegrating.
Simon Hunt 27:05
It’s predicated on the fact that the country has very little debt. They’ve got large gold reserves, much larger than is reported, and they they follow non Keynesian economic policies.
Maggie Lake 27:25
What? What happens with commodities? Against that backdrop, you mentioned gold, is it limited to gold, or do you see some broader commodity super cycle?
Simon Hunt 27:35
Yeah, I think that first of all, the base metals always track macro developments. So if we’re right that we see g7 recession until the early months of next year, then you’ll see sharp falls in the base metal complex. But then, from the early months of next year until 2027 early 2028 you’ll see a doubling in the price for many of the reasons I’ve already outlined, but then you don’t want to be the last guy on the dance floor, because that’s when the big crash comes. So the bottom line is, you’ve got to play these short term cycles. Don’t look for long term investment because
Maggie Lake 28:46
it’s too hard or nothing will that larger crash you see coming in 28 will take down everything except gold,
Unknown Speaker 28:54
except gold.
Maggie Lake 28:56
What about the role of so anytime we talk about these kinds of forecasts, and it’s difficult, because it’s a very difficult, frightening picture that you’re painting. I know most analysts try to think about what could change that scenario, what would cause me to go back to the drawing board. So how are you thinking about technology? Here? Is there any scenario where technology alters the course of this,
Simon Hunt 29:25
that’s a very good question, and a very complex one to answer.
Simon Hunt 29:34
The experts that I listen to, who normally are, who are normally right. Think that what we’re seeing in with a one now is a repetition of pro.com bubbles. There is a. Are obviously going to be a large usage of a one is the valuations that are that are questionable, whereas China looks at it a different way. They’ve not spent the billions of dollars. They have an A one model that’s available to everybody, and what Washington fears two things. First, China has the world’s most efficient and competitive manufacturing supply chain. You can get anything within a radius of 150 miles, it’s that concentrated. But the big concern in Washington and elsewhere is that China has been using robotics automation powered by a one to produce, to Take the manufacturing system a further stage towards even more being more competitive by putting a one, robotics, etc, onto their existing, highly competitive system. There are now factories powered only by humanoids. No humans in the system with one plant, I was told, producing a smartphone every minute, humanoids only. So that’s the first big worry for Washington, the second worry, so I hear, is that China is surpassing America on the development of new weapon systems
Maggie Lake 32:40
using AI. So they’re going so a scenario where we’re sorry, go on. No, you so, so you’re painting a picture where China dominates both manufacturing and weapons using AI and surpasses like that’s the existential threat to
Simon Hunt 33:03
Yeah. So obviously, a primary objective, one way or another, of America is to strangle China.
Maggie Lake 33:14
So you see, you see, do you? Do you believe that means conflict between the US and China, or just economic warfare
Simon Hunt 33:23
both? Who knows? That’s a risk. It’s a risk. But What? What? What’s pretty clear is that Iran, China and Russia, they talk to each other the whole time to agree policies, and it’s pretty clear that what is emerging Is that Iran will stand firm over its sovereignty. Russia. Stands firm over Ukraine, and China stands firm on its negotiations with America on trade and tariffs,
Maggie Lake 34:17
and who has the upper hand in that standoff?
Simon Hunt 34:22
I think China, Russia, Iran, you’ve got three guys who are going to stand firm instead of what’s believed to be Washington’s policy, which is to hit each one in turn. Now, China, Russia and Iran say we will have more success if we if we stand as three against one. That’s why the. The the attack on Iran, the outcome of that is so important. It’s not just regional, it’s global. Because if, if Iran is defeated, then China and Russia know they’re next.
Maggie Lake 35:19
Yeah, this is a very unsettling and very critical time, especially given what you just point out. And yet we see this strange sense of, I don’t know if it’s a sense of calm or the market investors are just waiting to see what happens, but what would you leave people with in terms of either a risk or opportunity that is being underestimated by the market.
Simon Hunt 35:50
I think they’re underestimating the ability of the Fed to provide its put I think the summer months are going to be bad for equity markets. I think sometime early next year you play the the upcoming cycle, which is not a long cycle, 1824, months at most. Um, uh,
Simon Hunt 36:25
so add to your gold holdings, but physical gold, not ETFs.
Maggie Lake 36:35
Why? Why that? Why is that distinction important? What do people need to understand about
Simon Hunt 36:40
that? Because, from what I understand, even though ETFs say we’re covered by physical gold, they’re not, it’s another leverage play
Maggie Lake 36:55
in a very uncertain world, yeah, Simon, you gave us a lot to think about a lot of it’s very disturbing, but information is power, and we all need to consider all of these options as we try to think about at least preserving our wealth, if not growing it. So thank you so much.
Simon Hunt 37:13
If anybody wants to get hold of our services. Simon dash, hunt.com,
Maggie Lake 37:24
fantastic. Well, we’ll be sure to put a link in in the description as well. Simon, thank you so much
Simon Hunt 37:29
pleasure. Thanks. Sorry. I left you with with happy news.
Maggie Lake 37:36
It’s the world we’re living in. Simon, cheers. If you have any questions about how to navigate the current environment, wealthion can help connect you with a vetted advisor to get a free portfolio review, just click the link in the description below or head to wealthion.com/free there’s no obligation, and it will just take a few minutes of your time again. That’s wealthion.com/free thanks so much for joining us. We’ll see you again next time
