21 April, 2024



BitMEX Co-Founder Foresees an Impending Economic Recession in Five Years

11 Oct, 2023

11 Oct, 2023

  • Arthur Hayes foresees a crisis akin to the Great Depression within five years due to widespread adoption of Keynesian economics.
  • He discusses the relationship between money printing, and inflation as these are the factors contributing to rising prices. 
  • He references research indicating that crossing the 130% debt-to-GDP threshold historically leads to financial crisis.

BitMEX co-founder Arthur Hayes has grimly predicted a severe global economic crisis, akin to the Great Depression, within the next five years. In his YouTube video titled “A Great Recession Worse Than 2008 – Survive and Thrive During the New Economic Reset,” Hayes outlined his vision of a future marked by radical disruption. He believes this crisis, worse than the 2008 recession, is looming due to the widespread adoption of Keynesian economics, resulting in excessive government debt and stagnation in alternative energy innovation.

On October 9, industry researcher ‘arndxt’ spotlighted key excerpts, underscoring Hayes’ assertion of ‘radical disruption in the next 5 years:

Hayes highlighted the challenges faced by the U.S., such as escalating healthcare costs and defense budget issues. Addressing these concerns without alienating the support of the baby boomer generation proves to be a significant hurdle. Additionally, escalating national debt and the potential for default could lead to currency devaluation, exacerbating the situation.

Moreover, Hayes discussed the relationship between money printing, inflation, and resource nationalism, explaining how these factors could contribute to rising prices. Recent events, including the pandemic, lockdowns, stimulus measures, and extensive money printing, have accelerated these economic challenges in the United States. Consequently, banks are becoming increasingly unstable, with deposits dwindling and lending standards tightening to levels reminiscent of a recession.

Hayes drew parallels between the current situation and post-World War II circumstances. He explained how after the war, the US was the only major power left standing, and its manufacturing base remained intact.

Hayes pointed out that the global debt-to-GDP ratio has increased significantly, reaching unsustainable levels. He attributed this trend to declining birth rates in the developed world, leading governments to rely on continuous money printing to sustain their systems.

He referenced research indicating that once a country’s debt-to-GDP ratio crosses about 130%, there is historically an inevitable default. He suggested that the current global debt levels have already crossed this threshold, indicating a looming financial crisis, potentially leading to defaults or significant economic repercussions.

In the provided transcript, Arthur Hayes discussed several key points related to the global economy, inflation, and government debt. Here’s a summary of the main points he makes. Also, Hayes narrated the comparative attractiveness of gold and bonds in the current economic scenario. He pointed out that rising interest rates are making bonds less attractive, leading investors to consider alternatives like gold.

In the video, Hayes also narrated a relatable analogy using mortgages, explaining how a homeowner with a low-interest mortgage might find it difficult to afford a new house if interest rates have significantly risen, making new mortgages more expensive.

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