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Simon Hunt: Will the Dollar or Bond Market Be Sacrificed First in the Next Crisis?

Tom welcomes back Simon Hunt to the show. They discuss various economic and geopolitical issues shaping the global landscape. Topics range from potential conflicts and their impact on markets to the shift towards physical assets and a gold-backed monetary system. Simon touches upon underreported inflation, economic instability in America, China’s role in reshaping the global economy, potential crisis scenarios, and the importance of diplomacy versus war.

Simon is concerned about the risk of conflicts escalating, with Russia as a key player, and the emergence of gold-backed currencies to counteract perceived vulnerabilities in fiat currencies. Additionally, they discuss the significance of rising interest rates, potential crises, and implications for U.S. elections and global geopolitical outcomes. Throughout, Simon encourages caution and emphasizes the importance of understanding the underlying economic trends and geopolitical dynamics.

Time Stamp References:
0:00 – Introduction
0:46 – The World & War
5:38 – Equity Complacency
7:02 – Russia & Syria
9:17 – Economic Catalysts
14:32 – Serious Correction
18:18 – Leveraged Bank System
19:24 – Capital Shifts & China
22:57 – Gold Backed Currency
29:26 – Dollar & Rates
30:53 – Chinese Demographics
33:50 – China’s Manufacturing
37:40 – Nuclear Energy
39:31 – China Debt
42:32 – Chasing Rainbows
44:30 – Europe In Recession
48:15 – Inflation Issues
52:25 – Expect More Unknowns
53:35 – Wrap Up

Talking Points From This Episode

  • Geopolitical tensions could lead to significant market shocks in equity and base metal markets before mid-year due to underreported inflation and weak economic activity.
  • Shift towards gold-backed currencies is inevitable as countries seek alternatives to perceived vulnerabilities in fiat currencies, with China and Russia likely taking a leading role.
  • Diplomacy could prevent war, but tensions between the US and countries like Russia suggest that war may be an outcome if Washington continues to support the dollar at the expense of its treasury market.

Guest Links:

Simon Hunt began his career in 1956 in Central Africa as a PA to the Chairman of Rhodesian Selection Trust, one of the two large copper companies in what was then Northern Rhodesia, now Zambia.

In 1961, he came back to London and joined Anglo American Corporation of South Africa as a PA to one of the Board Directors, followed by being part of a small sales and marketing team for copper. From there, he helped start up a new copper development organization, CIDEC, financed by copper producers, which he then joined, focusing on conducting end-use studies of copper in Europe.

He then went into the City to gain financial experience and founded Brook Hunt in 1975. He was instrumental in setting up the company’s cost studies and end-use analyses. Simon appeared as material witness and consultant in two ITC anti-dumping cases in 1978 and 1984, winning both at the commission level.

He has spent 2-4 months every year in China since 1993, and until a few years ago would be visiting some 80 wire and cable and brass mill factories across the country every year. He now restricts these factory visits to a smaller number, all of which he has known for many years. Simon also spends many weeks each year traveling around Asia.

The focus of the company’s services is on the global economy, including the changing geopolitical and financial structures, China’s economy and its copper sector, and then the global copper industry as each part is interconnected.

Simon is the author of the “Frontline China Report Service,” which is marketed by the TIS Group. The Service provides regular reports on China’s economy, politics, and financial outlook.

Simon established this company in January 1996.

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