3 MINS AGO! Jim Rickards Shared Terrifying Predictions

Added: 2026-05-25

[00:00:00]The supply chain was breaking down before COVID. Now, of course, COVID made it worse. Yes.

[00:00:04]Uh and the war in Ukraine made it worse yet. Yes. But this really started with Trump's trade war in 2018. So, um that I guess it there's a thread that runs through all these things. So, uh not to throw up my hands, I'm not going to do that, but um when you ask me that I'm like I'm thinking, well, you know, you're talking about China, Ukraine, supply chain, Biden, they're they're all they're all a big deal. If um you know, in terms of tragedy, probably uh the war in Ukraine is the most important because it's highly highly significant economically and strategically. But of course, there's a human tragedy going with it. You know, if Chinese real estate implodes, okay, there's some hardship here and there, but it's not like uh people being killed or maimed or forced into refugee status. And that is uh part of what's going on in Ukraine.

[00:00:52]So, that's a that's probably the biggest single one, but I wouldn't uh miss the fact that all these things are going on at once.

[00:00:59]The number one question, uh cuz every everyone's concerned about inflation, but uh there's there's a big backstory there, but I always say when when it comes to your own money, everybody has a PhD in economics. You don't need Larry Summers to tell you what's going on with your budget and your, you know, ability to feed your family or keep a roof over your head. So, people get inflation.

[00:01:19]It's one of the reasons it's so politically toxic is because it's unavoidable. You can't fudge it. You can't spin it. It's like, "Hey, if I used to fill up my Ford F-150 truck for 50 bucks, and now it's 125 bucks, A, you get it. It's right in your face.

[00:01:34]And B, that's 75 bucks that you don't have to take your spouse out to dinner, you know, buy a new jacket or whatever.

[00:01:42]Um so, there's kind of demand destruction at the same time you're spending more money on the one thing you can't do without. So, so people get it. But then from there, the question I get the most is, >> [music] >> "Hey Jim, is this going to cause a recession? Are we going to have a recession?" And I use as recently as a few months ago, I would say, yeah, I think so. You can see it coming late this year, early next year. Now I say, we're in a recession. I mean, it's not coming, we're in it. And and there's data I you know, I never make statements like that Brian without supporting it.

[00:02:12]And we know that >> [music] >> the standard definition of a recession is two consecutive quarters of declining GDP. There are a few more bells and whistles having to do with unemployment and a few other things, but that's [music] that's the rule of thumb. So based on that and based on the best available estimate for a second quarter likely to be accurate, we're in a recession today. Now, it's not severe, but that's like saying I've got I'm in bed with you know, pneumonia, but I'm not dying. Well, okay, but we're going to be we're in a recession right now.

[00:02:41]There's there's a lot of whistling past the graveyard. I mean, the stock market is still you know, greatly overpriced.

[00:02:49]There's still you know, the buy the dips mentality hasn't gone away. It's still there. You got people like Jim Cramer yelling, you know, buy Netflix or whatever.

[00:02:58]And you know, there's institutional support, [music] there's momentum trading. Of course, 95% of the trading's by robots, so you got to reverse engineer the 27-year-olds from Bangladesh who don't get out much.

[00:03:09]They're the ones really writing these algorithms. I mean, brilliant engineers, but you know, you'd have to show them around Wall Street.

[00:03:16]But so so all that's going on. So we haven't really seen the real the market collapse, stock market collapse that I would expect in association with a severe recession has not happened yet. This is just going to play out. It'll get worse as the year goes on. All right, so you're expecting a major correction in stock [music] markets on the back of a recession.

[00:03:36]>> mean, I mean, that that is my expectation. I have my own models and I look at it closely, but if you listen to a Michael Berry, Jeremy Grantham, you know, Charlie Munger, these people have been around and they they run >> [music] >> you know, hundreds of billions and they're saying the same thing. So, yes, every now and then someone will throw some statistic at me and I go, "How long is your time series?" And they go, "Oh, we took it back 5 years." I was like, you know, "Talk to me if you've done it for 100 years cuz that's a little more meaningful." But, Jeremy Grantham actually did do a 100-year time series and looked at bubbles all over the world, you know, in 1929 US, 1989 Japan, 2000 dot-com stocks, you know, and and many others.

[00:04:17]And he said he's never seen anything like it. You know, it's a triple, greatest bubble of all time times three in the sense that it's real estate, stocks, and and other asset classes. So, yeah, I do that that is my view, but it's it's shared by a number of other analysts. And that would mean like S&P coming off another 20, [music] 30%?

[00:04:38]Yes.

[00:04:40]And again, you remind you have to remind people 1929, the stock market fell 22% in 2 days. It wasn't 1 day. It was you know, it was like 12% 1 day, 11% the next day.

[00:04:50]So, 22% over 2 days.

[00:04:53]But that wasn't the crash. I mean, that was the beginning of the crash. The this Dow Jones fell 82% from from top to bottom. Now, it took 3 years. So, it bottomed in June 1932.

[00:05:05][music] Started in October 1929. So, not quite 3 years. But, that fell 82%. And and that happens. So, so yeah, we're down, you know, Nasdaq's down bounced back a little bit in recent days, down close to 30%, down the S&P down over 20%. We're in bear market territory, but that that's just the beginning. That's not what a full bear market, full, you know, market adjustment looks like in the face of the kind of recession that I expect. Talk to me about inflation because, you know, I was looking at some of the inflation numbers and you have to go back to the '80s to see anything that's approaching double-digit. You know, I remember being a just a kid hearing about double digit inflation. I could kind of remember the the the gas pumps, you know, the lines at the gas. It's like a distant memory of me in the '70s [music] and but, you know, how do you talk to, you know, younger people these days about what inflation is or it means because I don't think people really grasp what it actually means to your savings or to the economy in a even a medium term.

[00:06:10]Well, that's exactly right, Brian. And if you um uh you know, you're you're a little younger than I am, but I I I lived through it. I was I I started my career >> [music] >> uh in banking in 1976 and uh so I started I remember my my wife and I used to kid each other. She was in advertising, I was in banking and the inflation was so bad you'd get a raise every like four or five months and you didn't have to ask. They would just give it to you cuz they knew that you were going to quit if if uh they didn't keep up. So, she would get a raise and she was making more than I was at the time.

[00:06:41]So, we'd go out to dinner and then I would get a raise and I was making more than she was. So, we would just tease each other about that, but that's how it was.

[00:06:48]Um and the psychology was, you know, if you needed a whatever, you know, TV set or refrigerator, new car, whatever, you'd say, "I better buy it now cuz the price is going to be higher if I wait a month or two months, the price is going to run away from me." So, it it had huge behavioral effects. Of course, gold was you know, going to the moon. There there was a lot going on at the time, but but Brian, you're right when you say we're putting up inflation numbers today that are the highest in 40 years.

[00:07:12][music] That is correct, but I remind people the inflation 1981 >> [music] >> was the end of a 10-year period of inflation. That was when Volcker finally got it under control, but you go back to '80s, '70s, '70 well, between '77 and '81, so that five-year period, the dollar lost 50% of its purchasing power, not 15, 50.

[00:07:39]So, the question is is this the beginning of an inflationary surge or it's going to get even worse and it is going to last 5 years or is it is it different than that? But I but keep that in mind because the situation we're in today is very different from the 1970s that and I'll explain why. But well I'll explain why right now because in the 70s it was triggered from the supply side with first the Arab oil embargo in 1973 as a result of the the 1973 Arab-Israeli war and then the price tripled but it went from like $2 to to to to $6. Okay, well you know percentage terms that's a huge jump but it was still $6 and then it got to 12 and then in 1979 you had a second oil embargo because of Iran and the Ayatollah and the revolution and the hostages and all that and then it went from kind of 12 to 20. So oil went up by factor of 10 in the course of the late 70s for because of two different embargos.

[00:08:43]So that's coming from the supply side but what happened was the other source of inflation is on the demand side. So you have what's called cost push inflation. That's where you know supply is choked off or there's an embargo or there's a shortage or natural disaster or lot of things it's coming from the supply side and demand is inelastic so you just pay up or you know kind of do without. Um but the demand side is much more psychological. That's called demand pull inflation. That's when consumers behave the way I described and as I say I lived through the 70s where you know hey I better buy it today I better buy it now. You're pulling all this demand forward and bidding up prices because you're worried that it's going to get even worse.

[00:09:23]So as that applies to today we are starting with the cost push inflation and mainly the price of energy but the price of food is a big factor and of course they're related. You know it's like oh it's like here's the energy here's the food. You know where do you think the food comes from? You to get the food, you got to feed feed [music] the pigs and cows. What do you feed them? You feed them corn. Huh, how do you get corn? Well, you grow it on a farm. You need nitrogen fertilizer. You need diesel in your tractors. Uh you get the food, you got to put it in a truck to get it from point A to point B. That requires diesel. The higher the diesel price, the higher the cost of food because you're moving it by truck, etc. So, these things [music] as I say are linked. Um but but food prices are going up substantially and you can't Two things you can't do without are gas in the car and food. So, so you have that um that that cost-push inflation.

[00:10:12]We're not quite at the stage where it's demand [music] pull. We're not quite at the stage where individual consumers are behaving the way I described in the 1970s saying, "I had better better spend the money fast cuz it's it's losing value."