U.S. headed towards ' bankruptcy' Gold will protect you, everything else will ' get crushed'

Kitco News

The U.S. is headed for bankruptcy and economic decline, and the best way to protect your wealth is with gold, said Yaron Brook, managing partner of BHZ Capital.

Brook is the best-selling author of several books, including &ldquo Free Market Revolution: How Ayn Rand' s Ideas Can End Big Government&rdquo . He is the chairman of the board at the Ayn Rand Institute and is host of the Yaron Brook Show.

Speaking with Michelle Makori, editor-in-chief of Kitco News, on the sidelines of the Freedom Fest 2021 conference, Brook said the government is &ldquo destructive&rdquo and is responsible for the economic troubles the U.S. finds itself in.

&ldquo COVID has shown us that the American people are willing to behave like sheep when the government dictates what they should and shouldn&rsquo t do. Also, the government is willing to take on massive powers,&rdquo he said. &ldquo We&rsquo re seeing the government move systematically towards bankruptcy. Who&rsquo s going to pay this debt?&rdquo

This high level of debt is almost impossible to be paid off now, Brook added.

&ldquo We are approaching levels of debt we saw in World War Two, but in World War Two, right after the war, we ran surpluses, so we paid it all back. Nobody&rsquo s going to run a surplus today. Politically, it&rsquo s impossible,&rdquo he said.

The more immediate consequence of high debt and government policies, including fiscal and monetary policies, is high inflation with no growth, or stagflation. However, the economy won&rsquo t reach hyperinflation territory, Brook said.

&ldquo [Hyperinflation] is quite unlikely because we know how to deal with inflation, we know how to stop it, it&rsquo s just very, very painful. I think what we&rsquo re really in for is a very long period of stagnation, maybe combined with inflation, maybe now. One thing we&rsquo re not going to see is significant economic growth,&rdquo he said.

Brook added, &ldquo I just don&rsquo t see good things happening in the U.S. economy. You&rsquo ve got massive malinvestment, you&rsquo ve got money flowing to the wrong things.&rdquo

The solution, according to Brook, is to reduce government intervention and abolish the Federal Reserve.

For the investor, assets to avoid in a stagflation scenario are risk assets like equities and long-term bonds. In fact, bonds will &ldquo get crushed&rdquo , he said.

&ldquo You want to be in something like gold, because gold actually maintains its value. It' s on an investment as much as it is a store of value,&rdquo he said.

For Brook&rsquo s views on cryptocurrencies and the U.S. dollar, watch the video above. Follow Michelle Makori on Twitter: @MichelleMakori (https://twitter.com/MichelleMakori).

 

Despite of the huge issue, the sell volume is consider small.

Very obvious, all the shares have already been taken by our comrades from China.

They surely know a good thing when they see one
 

Pai seh, those with big appetite will have to be contented by collecting in the million instead of billion

 

Despite of the huge issue, the sell volume is consider small.

Very obvious, all the shares have already been taken by our comrades from China.

They surely know a good thing when they see one
 

Pai seh, those with big appetite will have to be contented by collecting in the million instead of billion

 

Without patience, nothing great can be achieved

 

Sometimes you have to go through the worst to get the best

 

Great things take time. Be patience

Actually, to tell you someting. Mr Yao is more kan Cheong than us, his stake is so big. 

Stay safe, stay healthy and be happy