On the heels of what has been a wild start to 2017, a multi-billon dollar fund manager’s doomsday prediction has sent shockwaves across the internet.

Stephen Leeb:  “As I was thinking about my interview today, KWN’s viral Doomsday interview with Victor Sperandeo has sent shockwaves across the internet and it reminded me of something I have been neglecting. Nativism, populism, whatever you want to call it, is not something unique to America. Brexit could easily be followed by the Netherlands and even France dropping out of the euro zone in the wake of elections being held this year. Yes, Victor is right when he states that ‘absolute f*cking chaos’ across the globe will be the result.

The Great Depression Radically Changed The Global Landscape
But as in America it will be chaos followed by fantastical efforts to spur growth – even Germany will follow the hyper-growth path – finally remembering that it was not hyperinflation that led to Hitler, or even a fall in the government. The Weimar Republic remained in charge of Germany throughout 1933. It was the Great Depression – the worldwide economic meltdown – that brought Hitler to power.  Gerald Celente summed up the situation perfectly in his KWN interview:

“Look, if Sperandeo is correct, we are gong to see the ‘f*cking chaos’ that he is talking about, and it’s going to be global.”

An Out Of Control World
With the disintegration of Europe, the entire West, to the extent it can stay out of China’s hands, will be flailing blindly to keep growth intact at any cost. The end result will be social upheaval, commodities out control, and gold vaulting to new highs with no end in sight, and economic desperation on a scale that will make the last few years seem utterly tame.  And this is not even a worst case, for it doesn’t take into account military developments. Just today, Iran – a relatively small military power compared to the U.S. – defied America and tested another missile. And if it should come to war in the South China Sea, China – assuming it remains a conventional war – will come out on top. In a previous KWN interview I pointed out that America has no answers to hypersonic missiles that would leave American aircraft carriers sitting ducks.  Yet we persist in denial. Yes, Victor is right that these are dangerous times…

But let’s be optimists for a moment and assume that all the above notwithstanding, the world will somehow manage to stay relatively calm. In that case, what should we expect? In particular, what would be the outlook if Trump fulfills his campaign promises to bolster the middle class and bring about broad-based growth?  Right off the bat, I can say this: his plan to do so – via infrastructure spending and lower taxes – will almost surely lead to a bout of high, and possibly very high, inflation. That’s especially true since part of his push will entail leaning on the Fed to keep interest rates relatively low so as not to choke off productivity-enhancing infrastructure growth. That will mean negative real rates (rates lower than inflation), which will further fan inflation. 

Here’s the other thing I can say with conviction: one sure winner will be gold and gold correlates. High and rising inflation and negative real rates are manna for the metal, particularly when inflation is led by rising commodity prices. The two great gold bull markets of modern times were in the 1970s and in the 11 years between 2001 and 2012. In both periods, commodities, overall, rose sharply while interest rates were below inflation.….more here