On April 20, 2021, financial expert Marc Friedrich has published his new book "The Greatest Opportunity of All Time: What We Must Learn Now from the Crisis and How You Can Profit from the Greatest Transfer of Wealth in Human History". In it, he gives an overview of the monetary, economic, and political entanglements that will seal the end of various cycles and lead to profound upheavals. In addition, Friedrich provides his readers with a guide of concrete investment strategies and practical advice on how to use the coming crisis and paradigm shift wisely to build up wealth for generations to come. We talked with the multiple bestselling author about his predictions for the future and his recommendations for investors.
GoldBroker : On April 20, your new book, "The Greatest Opportunity of All Time" has been published, in which you describe how to prepare for the coming crisis and how to use it as an opportunity. Now, the first question that comes to mind is: Are we currently not also seeing positive developments in the world? The vaccination campaign is progressing, restricting measures are being scaled back, and governments are launching aid packages worth trillions of dollars, promising economic recovery. Couldn't we say that the worst is already behind us?
Marc Friedrich : Of course, we also see positive aspects. But it is also a fact that with these massive monetary packages we are merely postponing the crisis into the future, without actually solving the problems. At some point we will have to pay back the debts, at some point inflation will take its course, and then of course you need good life insurance for your purchasing power, for your prosperity. We see that we are only delaying insolvency with these gigantic economic stimulus packages, and also with the central banks' purchasing programs. We are accelerating the zombification of companies, while merely delaying the insolvencies, which will break out at some point.
Of course, we'll see a crack-up boom in the stock markets, and we'll see that people have a lot of pent-up demand for travel, consumption, eating out, etc. But in the long run, this demand will not be sustainable, because the damage to the economy is already done. All over Europe and all over the world we're going to see a lot of bankruptcies, a lot of retailers are going to disappear. They will never open again, which will come to haunt us in the future and cause a lot of economic pain. This also means tax increases are actually pre-programmed, no matter in which country. Taxes will rise, and inflation will eat away at your savings. We need to prepare and position ourselves now in order to preserve our purchasing power, prosperity and assets.
GB: So you're saying that the recovery may well continue for a while yet, but that ultimately we'll probably experience a crisis all the more violent and severe. You also write in your book that we are facing a real paradigm shift, that various cycles are ending, and a new age is beginning. Which kind of upheavals are you referring to exactly?
MF: To any kind, and in every area. Politically, we can already feel it. We can see that politics is on the decline. The EU slithers from one crisis to the next without solving any of them. It has really only been embarrassing itself. Then, of course, we also see the failing of political parties throughout Europe, but also in Germany. We see that they are not able to master the situation, that they are acting in an activist and headless manner without solving the problems, and actually making them even worse.
We see that the central banks have manoeuvred themselves into an economic dilemma, into a quandary, and cannot get out of this downward spiral of constant money printing, constant asset buying, constant intervention and ever lower interest rates. We see that our monetary system is running on empty. We see that the banks and the financial world are still teetering, that they haven't really gotten on the road to recovery since 2008, and that we constantly have to bail them out and rescue them. The economy isn't growing as fast as it should, while global debt is actually expanding more rapidly than the economy. Wherever we look we can see things being in a sorry state, and above all, we can see that our societies are more polarised than ever before, worldwide. In this respect, we need an improvement now. But I fear that at first, things will have to get worse before they can get better.
I also tried to show people that crises have always been necessary in the history of mankind. Mankind has grown through crises, they were part of our evolution, and people always learn best through crises. If you look back in your own biography, when was your greatest learning experience? A young child might fall down five times, but it will still learn to walk. It is the same for all of us: We need crises to develop, to define ourselves, to get to know ourselves, to know what our strengths and our weaknesses are. In this respect, crises are gigantic opportunities for us as humanity and for us as individuals.
That is also why there are great opportunities now for us as a society to implement a new political system, a new monetary system, but of course also privately, by setting ourselves up financially in such a way that we can benefit from the largest transfer of wealth in human history and perhaps achieve financial freedom.
GB: So you do believe that this will encompass all aspects of life, that there are no economic, social or political spheres that will be unaffected by this change?
MF: No. That is what characterizes a paradigm shift, a turning point in time, where everything is included in a transformation process. We see that no country is being spared. In 2008, we saw a banking crisis in the Western world, which was resolved relatively quickly, but now we have a completely unprecedented crisis. The whole world has de facto locked up their economies, put them in a deep, artificial coma. There has never been anything like this before. We are all in the same boat, from China to New Zealand, from Canada to South Africa. This is a crisis unprecedented in human history, and this is why we need global solutions.
But for this reason, I also see a golden age coming if we now realize what is working and what is not. We simply see that the old world is no longer working, and we will no longer wake up in this old world. Anyone who still believes that is naïve, unfortunately, and will be proven wrong. We will never travel, pay, live, or vote in the same way as before. We will wake up in a completely new era. We need to prepare for that now, to really shape this new era in a way that serves us, because now we really are at the crossroads - freedom or dictatorship.
GB: You have just mentioned this indirectly: For savers in Europe, the question naturally arises whether there will be a currency reform, a new monetary system? Do you expect the eurozone to break up, or can the single currency survive these difficult times?
MF: No, the euro has been doomed to fail since its inception. It was structured completely wrong, it was actually a miscarriage from the very beginning. It is economic madness to put economies of different strength into one interest rate and currency corset. This has never worked and will never work. In the history of mankind, all currency unions have failed without exception. Years ago, on Markus Lanz’ TV talk show, I asked "Mr. Euro," Theo Weigel, a former German minister of finance, how it could come to this. The last monetary union on European soil, the Latin Monetary Union, also failed spectacularly, and he didn't even know it. I have to say, wow, that's a relatively poor foundation for a new monetary union if you don't even look at the past, because in the rear-view mirror of history you can see what has been working and what hasn't.
We can see that the eurozone is not working, otherwise it would not have been in intensive care for a decade, dependent on artificially respiration. We need ever new interventions by central banks, historically low interest rates, and asset purchase programs to keep the countries in the euro at all. The fever curves are the TARGET2 balances, but the fever curve is also the historically low interest rate since 2016, as well as, of course, the balance sheet of the ECB, which now already stands at over 7 trillion euros – and no end in sight, because they have to keep printing money to keep the euro artificially alive. For this reason, one cannot help but say: the euro will not survive this crisis.
Will it fall apart? Yes, it will not be shelved voluntarily. That's why this system will probably blow up in our faces uncontrollably. No politician will stand up and say, "Okay, dear people, the currency experiment of the euro has failed, it was a stupid idea." But it's their own fault, after all, as they broke the rules and the contracts that they had signed beforehand. So you really shouldn’t be surprised when things go wrong.
GB: That means it is now important to also mentally prepare for the fact that such a major currency reform may come?
MF: Yes, of course. Currency reforms come and go, I also pointed that out in the book. Currencies fail again and again, and in Germany there have been quite a few currencies that have failed during the last centuries. That is completely normal, it is part of history, part of evolution, of monetary history. I also show this currency cycle in the cycle chapter, and if you recognize it, you can now prepare optimally and then have new, better starting capital for the next monetary system.
GB: Recently, we have also seen that inflation rates and, above all, people's inflation expectations are rising again, and that worries about this inflation have returned to the financial world. Do you think that hyperinflation, as for example in Germany in the 1920s, is still a realistic danger today?
MF: In the book, I actually show that inflation in Germany was already at 13.73% last year, which is of course far from what we are being told officially. De facto, the euro is already in hyperinflation mode, because if you compare it to Bitcoin, for example, you see that 99.9% of its purchasing power have been lost. After all, we see that gold, silver, Bitcoin are going up and up in the last few years. This also shows that people have less and less confidence in the monetary system.
But to get back to your question: We will see inflation, and Friedrich von Hayek once aptly said, Inflation always leads to more inflation. In that respect, I actually expect hyperinflationary developments as well. That's why we see asset price inflation. We see assets at ever higher highs, stock markets, real estate markets, precious metals, Bitcoin, etc. That's why you need all the assets limited by nature in your portfolio now, to have a kind of life insurance for your purchasing power, against the madness of central banks and against the irrationality of politics.
GB: In your book, you also give very specific recommendations and advice on how investors should position themselves now in order to benefit from precisely this paradigm shift. Which asset classes would you recommend and how should they be weighted?
MF: I have to tell the readers very clearly that this is a once-in-a-lifetime, historic investment opportunity that we have now. We will never have an opportunity like this again in our lifetime, because several cycles are coming together now, and because we are now actually facing the perfect storm. In my book, I tried to show how I would position myself in the current situation, and what percentage I invest in which asset class.
At the top, of course, is the money that everyone has known for thousands of years: gold and silver, but also platinum. That is to say, precious metals which are limited by nature, and which have always been money and will always be money. In this context, I would also like to point out the following: The central banks hold more gold than ever before and have been buying more and more gold since 2008, since the financial crisis - whether it's Russia, Turkey or China. And why? Because apparently, they don't really trust their own product, their unbacked paper money, and prefer to have a reserve currency. The German Bundesbank holds over 3,000 tons of gold as a reserve currency - even though we have not been on a gold standard since 1971! This should give us all food for thought and everyone should try to emulate the central bank and also build up a mainstay of wealth by owning gold – the eternal money – which has been tried and tested for 5,000 years, since the Roman Empire. It has always been money, and in my opinion, it will always remain money. That's why you should have a peg there, so to speak, where you can implement a wealth mainstay in gold, silver, but also platinum.
I also find Bitcoin incredibly exciting, and I would invest there as well. Why? Because it's deflationary. It's actually limited. We don't know how much gold or silver is still lying dormant in the earth's crust. With Bitcoin, we know: It is mathematically limited to 21 million units, then it hits the end of the road. It is not within the reach of the central banks, it is supranational, it cannot be manipulated, and it is also extremely interesting because you can easily take it anywhere.
Then I think stocks are important, especially mining stocks. I find companies which extract gold and silver from the earth incredibly exciting, because these represent yet another lever on the gold price and on the silver price. In the book, I gave various ideas on how you can position yourself and how to implement the perfect asset protection in order to cheat inflation, to simply be two or three steps ahead of the rest and of the central banks.
There will be taxes, there will be tax increases, and of course there will be inflation. You need to position yourself correctly now, otherwise you will be left out in the cold. Those who set the right course now will preserve and create wealth for generations. Fail to do so, and your wealth will be destroyed. In the past, that was unfortunately the case for the majority of the broad masses: more then 90-95% typically lost between 50% and 100% of their wealth during these crises.
GB: So you're definitely saying that investors should diversify their holdings and give preference to real assets. Regarding the ongoing debate on Bitcoin vs. gold, where we often hear that Bitcoin is the better store of value, and that Bitcoin will be the better store of value in the future: Do you see it the same way or would you go for both assets?
MF: Both, I don't see any competition there. I think gold and Bitcoin both have the same goal, which is to represent better money and counterbalance the system. That's why for me gold is the older "big brother", and Bitcoin is the younger brother. I do expect Bitcoin to actually outperform gold in terms of performance, but I would never put all my eggs in one basket. I would rather have multiple mainstays, multiple options. For me, gold is essential, as is silver, the "poor man's gold," and I'm convinced that while the next monetary system will be digital, gold and silver will definitely play a part in it as well. It has been archaically ingrained in the soul of man for 5,000 years that these shimmering gold or silver metals have an exchange value, whether in the Amazon or in Africa, whether in Russia or in Germany. Everyone knows that they have an inherent value because they cannot be produced artificially. Consequently, I would definitely hold both in my portfolio, as a hedge.
GB: In terms of precious metals, do you also prefer to a broad-based investing approach, or is there one metal that you prefer?
MF: No. Right now, I would favour silver because I think silver has more pent-up demand. Silver is an industrial metal, and it is actually being consumed. All the gold that was ever mined, 99% of it, is still out there, in some vaults, at the central banks, or as jewellery around the necks and wrists of pretty women. That is completely fine, completely legitimate. Gold is money and will always remain money, but silver is actually being consumed. It is becoming increasingly rare, and that is why I would overweight silver. I also find a small addition of platinum interesting, simply because I expect that these three metals will be money again in the future.
GB: That means that for you palladium does not necessarily belong in a portfolio?
MF: It's not a monetary metal for me, it's purely an industrial metal. For those who want to have it, and who have a lot of money, yes, but for the average citizen rather not. I myself don't have any palladium either.
GB: Alright. Do you have any personal price targets for the precious metals? Or, given the inflation that's coming, do you actually think that it won't matter at all how high the nominal prices will rise in the end?
MF: Absolutely, I completely agree with you. An ounce of gold and an ounce of silver are always an ounce of gold and an ounce of silver, regardless of how much fiat money I may get for it. For me, gold is the escape route from the monetary system. I don't want any paper money back at all, because paper money is just printed cotton anyway, and is being devalued more and more by politicians, because they want to get out of debt at the expense of the citizens and want to shift the burden of debt onto us. Therefore, I do not want to exchange it at all. I also don't calculate in fiat currencies, i. e. in euros or dollars, but I mostly calculate in Satoshi, the smallest unit of Bitcoin, or in gold.
I will now state my price targets in the old monetary system: this year I see gold at $2,300 and silver at $35 + x, but in the long term – and these targets are interesting, because I am running the marathon, I want to get the gold medal and stand at the top of the podium – in the long term, I definitely see gold between $5,000 and $10,000. If we get hyperinflation, of course, the price will be much, much higher.
We will definitely see triple-digit prices for silver, come what may. There is no other way, and especially if we continue to move in the direction of digitalization, we will need enormous amounts of the raw material silver. Without silver, without nickel, without tin, without copper and partly even without gold, there is no digitalization and no artificial intelligence, there are no smartphones, no processors, circuit boards etc. For this reason, I would rather be the one of the wholesalers who sells the shovels and the jeans during the gold rush than digging in the dirt myself, so to speak, and that's how you should think as well. Therefore, the mine operators are very interesting, but also the raw materials themselves.
GB: Now, you’re saying that you see silver in the triple digits, gold at $5,000, and even $10,000. In what time frame would you expect those targets to be reached?
MF: In this decade, definitely. By 2030 at the latest we will achieve these targets, probably more quickly. The central banks and the politicians are doing everything in their power to continue to destroy the confidence of the public in the monetary system. In the light of that, it may happen more quickly. If we see extremes, which is quite possible, you can have look at the chart I published in my new book: 1923, Weimar Republic, where the gold price actually explodes like the SpaceX rocket. Then you have several million euros per ounce of gold. It is well possible.
GB: The question is, of course, what significance the prices would still have if they rose into the millions.
MF: None at all.
GB: In the end, you surely would not want to exchange the gold for fiat money once prices move into that range, but instead keep it for what comes after, to hold an asset which will keep its value through the crisis.
MF: Yes, you can actually create the seed money for the next system right now, because in the new system such assets will have much more value and exchange value than the paper scraps we get from the ECB. I always say, "In gold or Bitcoin we trust", not in fiat or dollars.
We would like to thank Marc Friedrich for the interesting interview and wish him every success with his new book.
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