Raoul Pal on global market insolvency and Bitcoin at one million dollars.
When Raoul talks, investors listen and today is no different. Raoul is the co-founder of Real Vision and is one of the most trusted names in the financial world.
We asked Raoul to give advice on portfolio positioning including Gold, Bitcoin, Cash, and stocks. We also wanted his take on the market crash and what comes next.
Raoul believes there are 3 phases of a market crash:
Phase 1 – Liquidation panic – we saw this in March 2020
Phase 2 – Hope – mobility + rebound – current sentiment (Jun 2020)
Phase 3 – Debt Inflation – Less cash to service debts
What do the central banks do?
As real rates go up – tightening rates in a recession means its harder to pay your debts back This is where insolvency will happen. A solvency event will happen because cash flow is too low to service debt.
Bond yields have continued to fall and less revenue is going to massively impact everything. From socializing, the expenditures, conferences, business travel and all will be much less which reduces cashflow to economies.
Insolvency is rife within all sectors from personal debts including student loans, auto loans, and mortgages to corporate debt levels & government.
All these combined levels of debt are massive.
Abroad there are 12 trillion dollars borrowed from foreign corporations. And this money that must be repaid-with cash.
Everyone in the world has dollar-based debts but all have massive declines in dollar cash flows. Foreigners have borrowed record amounts. And the US is reducing the trade deficit. Once the US started the trade wars, there were fewer dollars in the system which meant a slowdown of global trade. And with fewer cashflows to all businesses the weakest creditor will have to give up… or pay up.
And with the continued surge in the US dollar, paying off those debts are going to get harder and harder. We are living in the dollar standard era. No single currency has dominated the world as the dollar has in the last 500 years.
Currently, the dollar is 70% of all trade and currency transactions.
Could this be self-defeating for the US because they lent out so much money and then they cut off cash flow?
It's important to note that the US did not lend this money. This money is whats called the Euro Dollar market. AKA the offshore dollar lending markets where international banks can create Euro Dollars on their books.
The Fed issues Swap lines which is a short term loan and the banks take it and lend it to their best creditors. And when those creditors fail, then the biggest insolvency issues will happen.
Raoul Pal's personal portfolio:
25% Gold
25% Bitcoin
25% Cash
25% for trading opportunities – Long Bonds, Long US Dollar, Long Gold Miners
Shorting $GE (General Electric)-
Shorting $AT&T
Why does Raoul have so much invested in Bitcoin?
The dollar standard is going to break the system. It's going to eat itself. Central banks want to move to digital currencies to circumvent the strength of the dollar. The world is moving towards digital currency. Bitcoin acts as digital gold which makes it an extraordinary store of value.
Bitcoin is the poster child for digital currency.
Raoul believes that in five years Bitcoin will be trading at one million dollars per coin. The magnitude of the opportunity in Bitcoin is like nothing ever seen before.
Legacy systems in lending, custody, trusts are outdated relics and have to change. Bitcoin is going to force this change.
The Bitcoin algorithm reduces the supply of bitcoin every few years and the more Bitcoin grows, the more adoption will grow.
No investment has ever performed as well as Bitcoin has in the history of the world.
If Bitcoin is 1 million dollars in 5 years, what happens to the US dollar?
The US dollar won’t go anywhere.
How will this impact the US powerhouse and its global influence?
Two possibilities:
*The end of the empire
*The US could have a more robust financial system which will make the dollar-based system last longer. The dollar is a very big problem that needs to be solved.
Portfolio allocation and methodology to prepare for a recession
Cash + Income is crucial & the best income you’ve got is yourself. If you can generate a few sources of income you can insulate yourself in good and bad times.
If you could live anywhere where would it be and why?
* The Cayman Islands
* Singapore
Why?
Going to a place where you don’t pay as high of taxes. You can be anywhere in the world now. Why not be on a beach in the Cayman Islands or in Singapore when everyone can work remotely.
India is also an enormous opportunity because of its low debt, young people, and good education.
Best book to read for all investors:
The Hard Thing About Hard Things
If you liked this interview here are some more for you to check out:
Recession Proof 2020 | CEOs Weigh In On Investing During A Crisis
#Bitcoin
#Investing
#RaoulPal
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Sad that you made the Stephen Moore video private explaining how Trump helped fix the economy, I found it very informative.
If BTC goes to 500K, ETH will goto 25K. I’ll make 15K a month on staking alone. LOL BTC doesn’t stake. 😉
I always enjoy hearing Raoul’s comments. Thank you.
RP is outstanding at simplifying and communicating his analysis for the average joe.
Phenomenal video and interview, thanks for the great insights on the macro spectrum!
Sheep
how do i learn more about bitcoin?I’m totally new….just watching the video for the first time, not really long..i need a good person that can teach me more about this platform.I’ll be grateful.
@alvin zady Basic options, buy bitcoin via ‘Coinbase’, (there are many exchanges you could use), but coinbase is reasonable, I use Coinbase pro from fiat to crypto, cheaper on fees but slightly more tutition on using it is requred, but still straight forward enough. Store it on a wallet, hard ware wallets are the most secure. either a Trezor or Ledger Nano wallet. (Personally I am looking to buy a Trezor wallet to link it to my Exodus desk top wallet. I already have a Nano S but find the app to be a bit clunky. I also have a Exodus desktop wallet, which is not as secure as a hard ware wallet but the app is good and user friendly. Thus looking to buy a Trezor hard ware wallet which you can use with Exodus. The only other thing I could sugest is be vigelant, there are a lot of scamers in the crypto space. I would buy BTC, to start, but at the end of the day, yes some alt coins will have moments of parabolic gains, but BTC out performs the all ovewr time thus far. I hope that is of some help. All the best and good luck.
@Esch She Esch bc thanks a lot, i really appreciate your part of knowledge,if you don’t mind please can you give me your whats number please, we can communicate for more ideas from you okay…..
@Esch She Esch bc can i have your contact so that we can talk ok..i need to learn more from you..
This has been one of the best insights into Raoul’s framework and thinking. I consider Raol a top 3 investor alive rn. If I could, I would get all my family and friends to listen to this interview
Hedge funds manipulate the market by investing in assests that others don’t know about . Why are these millionaire openly telling others to invest in the same thing they are investing in . It doesn’t make sense . It’s light finding a great deal on a house and then telling the whole world about it . You risk losing the deal .
@D Santi I don’t get your logic. In Raoul’s case, for example, he’s already invested in bitcoin. Logically, now he would be happy if others bought into it, as the price would rise and he would get a positive return on his investment. Why would he not talk positively about it? And for what it’s worth, I believe bitcoin has a bright future.
@RCL and just to add to your excellent analysis BTC has performed incredibly well the last 10 years even after taking into account all the volatility, there is no denying that …it probably will continue to do so with perhaps less and less volatility as time goes by.
Fantastic interview.
Friend of mine is starting to wake up to what really goes on and I’m trying to start him off to understand what is going on and this was great for both newbies and those fully immersed.
I think his 25% spread allocation is spot on
Bitcoin has found another pumper. Why would you want a crypto system? Why would you want to sponsor a total enslavement system? A digital system will only take over if humanity allows it. Will you allow and accept this type of system? Gee thanks.
@WEARE WAVES Bitcoin is Nations organic Fiats converted for construction purposes.geez.
@WEARE WAVES What part of a crypto system do you see as being enslavement?
@brady nields Crypto system on it’s own, (SHA-256, blockchain, network) or using the crypto system for a cashless society?
Thanks for the video, I really enjoy listening to the perspective of Raoul. He is very good at explaining complex concepts in a simple manner.
Loved this interview, thanks!
Brilliant! Thank you both for your time and insight.
GREAT interview. Love Raoul. What amazing pad as well!!!
I think that “pad” is actually a fake background on Zoom. That’s what someone said in a previous video anyway. 🙂
Absolutely awesome interview! I would highly love to see Charles Hoskinson speaking about third generation blockchain PoW and more specifically Cardano, it would be outstanding!
Charles is a fraud dude. The only one calling his imaginary platform “3rd generation” is himself. It’s nothing but a token pump. Hoskinson didn’t come up with the idea for Cardano, he’s only being paid to work on it. Do you know who came up with the idea for Cardano and hired the front man and used car salesman to promote it? Probably not.
Great interview. Thank you for writing a great summary in the description. Every video should be like this one…
That was the most useful 40 minutes I’ve spent in a long time. Really well done!
Special thanks to the interviewer who is humble enough to make his questions very short and let Raoul speaks. Very very apreciated!!
Here here!
+(44 ,7 8, 6 8 ,7 1, 0 1, 5 1)🇬🇧dm our company Mrs Sandra
Raoul at 25 minutes: humble about making the sorts of geopolitical predictions that for the last two decades, so often, have been so wrong! This is why he’s so much more worthwhile for listening.
Been watching Raoul for a long time. Thanks for insights and well constructed interview.
Great to see traditional guys like Raoul get it and understand the decentralised finance and tokenisation space! Key point while money is printed further softening its value, bitcoin goes the other may making money harder and restricting supply by design. The only proper digital store of value/savings technology we have right now.
Great interview. Also, thanks for asking him for book recommendations!
BTC and XRP had been difficult but since I got help from Nolasco everything
Heard alot about this man he is indeed the best bitcoin miner in 2020
Wow what i have been searching for year now i need to invest my 912btc
+1 8 1 2 5 6 7 5 1 2 1 Whatsapp
@Altcoin Daily
For sharing this you are wonderful a lot of people will keep this private so only
then continues to get enrich from this man. you are indeed a nice human
@Harry Corrales Thank me later.
Really good macro interview, lots of good insights and things to look at and ponder. Love it!