'Hell Will Break Loose' - The Next Big Crisis Will Be A Shocker | Felix Zulauf

Former hedge fund manager Felix Zulauf, who is the founder and CEO of Zulauf Consulting, joined The Julia La Roche Show to share his insights on macroeconomics, geopolitics, and the market. Zulauf Consulting is a boutique research and consulting firm that offers investment advisory services to institutional investors and family offices.
This interview was recorded on December 14.
In this episode, Zulauf predicted that the market will continue to rise in early 2024 due to the economy appearing stronger than expected. However, he anticipates a drop in equities next year due to a recession. He described the current market as a "rollercoaster," with ups and downs that could be particularly frustrating for passive investors. He suggested that these passive investors might see low or even negative total returns in the next decade. According to Zulauf, those who can play mini cycles could find the environment beneficial.
Zulauf also commented on the extreme concentration of fund managers in the Magnificent 7, a level of concentration he has never seen in his 40-year career.
Turning to inflation, Zulauf argued that what we're currently seeing is only a "temporary victory" and that we have "not killed the inflation beast." He shared his thesis for the latter part of the 2020s, predicting a possible 10% inflation rate. He noted that while occasional crises have been managed and kept under control, he worries that the next big crisis in the late 2020s "will be a shocker." As he put it, "all hell will break loose," and the latter half of the decade will be characterized by social, economic, financial, and currency crises.
www.felixzulauf.com/
0:00 Intro and Welcome Felix Zulauf
1:12 Macro view, geopolitical impact, changing world order
2:40 Equity markets likely to go up first, then drop
3:50 Inflation could rise above 10%
5:20 Nimble and flexible
7:29 Playing the markets in the environment
9:40 Fund managers piling into Magnificent 7 stocks, never seen this kind of concentration
14:24 FOMC reaction, Fed outlook, rate cut likely
17:40 Late 2020s, higher inflation, debt trillion
19:38 Inflation cycle similar to late 60s/70s
21:15 Next inflation cycle will create a problem for the bond market
22:15 Yield curve control
23:30 Hell will break loose, next big crisis will be a shocker
24:30 Addressing the fiscal problems
25:37 Gold not just a monetary asset, but a geopolitical asset
30:40 Parting thoughts, Japanese Yen
#economy #stockmarket #gold

[@TheJuliaLaRocheShow]

Hey everyone, Thanks for the 20,000 subs! I can't believe it. You all are the nicest people on the internet and make doing this show such a thrill. I hope you all enjoy this conversation with Felix Zulauf as much as I did. I've wanted to interview him for ages! I'll definitely invite him back on the show in 2024. Let me know what you think in the comments section. Also, who do you want me to book as a guest in 2024? Let me know! 💙-Julia

[@sheevamatimbas4300]

This is time of the year Felix imparts his macro wisdom once a year. Well done Julia for this podcast 🤶❤

[@crouchhill]

Congratulations Julia for getting Felix on your podcast, he is one of two people I respect the most, the other being Russell Napier. 😊❤

[@kevinobrien9271]

I have developed an appreciation for Julia’s interview style. She asks soft questions that encourage her guests to expound on their answers. Subscribed 😊

[@edwardk4198]

This is my fourth, different Zulauf interview because each one has something additional to his overall themes.. He is prescient and well-grounded with an unmatched view.

[@christianlange9434]

Thank you for the talk with Mr. Zulauf😊

[@charlesdidonato5478]

Julia, thanks for having Felix on. He really is very open and honest as any person I have ever seen.

[@phil.s2245]

Great guest. His insights are very helpful. Well done.

[@zafer150211]

Good idea to invite Felix. I love his broad perspectives. Thank you

[@jasonbourne2280]

It would be helpful if these videos had interview date clearly visible, so it timestamps the interview.

[@TheJuliaLaRocheShow]

Dec. 14 😊

[@Lionfish-Hunting]

A fabulous interview. Thanks.

[@tomhunt-pj3wm]

Also Felix is great!!! Thanks for posting

[@brianesbaugh6897]

While I am no expert compared to the guest, I think his synopsis in the first five minutes is perfectly spot on

[@cl6757]

I’m a new subscriber who has been watching many of Mr Zulauf’s interviews online. Love your style and especially enjoyed at the end when you asked him if there was anything that he would like to discuss it wasn’t in the interview loved it! I mean new fan.

[@nickh2541]

Thats a great interview, thank you Julia

[@ddubsr5886]

Yes good job getting this guest!!

[@detectiveofmoneypolitics]

Economic investigator Frank G Melbourne Australia is still watching this very informative content cheers Frank 😊

[@wespotter6985]

Thank you for the content I am particularly interested in the residential housing market. If you could ask questions around that topic for future. Videos, that would be great

[@jmcmob608]

Thank you very much...

[@VikasKesavan]

Had subscribed a few weeks back.. great content Julia..

[@TheJuliaLaRocheShow]

Thank you so much!!💙💙💙

[@modelmark]

Raising taxes even further would be a disaster, they need to schrink that bloated operation.

[@10317]

We need to stop the never ending wars We need industrialization to broaden our tax base. We need to get corporations out of government. They are too willing to sale their own country and people out by going to another country for cheaper wages. They left behind thousands of buildings that paid wages which also bolstered the states via employment tax. And the politicians went along with it.

[@outlawebikebuildshow492]

Great job. Thank you.

[@bilbobaggins4462]

Great job Julia! Love your interview style and your ability to let expert guests like Felix explain these complex concepts. Congrats!

[@TheJuliaLaRocheShow]

Thank you so much! That means a great deal to me. I love listening to and learning from my guests. 😊

[@yr6178]

Thank you Julia .

[@fubarbrandon1345]

Happy to catch your show while traveling. Felix is a great guest. Thanks and Merry Christmas to you.

[@TheJuliaLaRocheShow]

Thank you so much! Merry Christmas!

[@michael2408]

Tom Lee and Felix Zulauf? Wow…these are big names! Darius Dale from Macro42 is a must to interview. He nailed it for 2023 also… big time 🥂

[@hiii9343]

Liked the interview, would love if you bring jeff snider back ask him about silent depression and how it will be fixed in the context of the world order changing, thanks.

[@HiranyaGarbh.]

Indian households and temples own more gold than all the global central banks of the world combined in spite of the colossal loot carried out by the Western world during colonial period. Therefore, you won't see the Indian Central Bank seeing the need to accumulate much gold even though it is among the top ten in terms of gold reserves.

[@aussiecolwol]

Wonderful insights and wealth of knowledge shared by Felix 👍thank you

[@TheJuliaLaRocheShow]

Glad you enjoyed it!

[@jaylinn416]

This is a quality channel in finance. Happy to follow Julia in her excellent interviews.

[@TheJuliaLaRocheShow]

Oh wow. Thank you so much. 😊💙

[@dailydoseofnews4828]

Good stuff

[@mouradbsiri3822]

Great analysis by Felix. Without appetite for Sovereign debt, we might have rate cuts without higher bond prices

[@postscript123]

So is one asset class that you can buy and hold is pm's?

[@Gabber44906]

WHEN????????????????

[@paulginsberg6942]

Felix is the man.

[@Paulblueridgemtns]

Awesome interview! Well done. That Raoul Pal interview was fire, too.

[@TheJuliaLaRocheShow]

Thank you so much, Paul! Also, love the Blue Ridge Mountains. ⛰

[@Paulblueridgemtns]

@@TheJuliaLaRocheShow Beautiful hikes go well with awesome shows like yours.

[@tomhunt-pj3wm]

Is Almost impossible to flip a coin and choose heads often Diversification and lower returns seem like a more predictable strategy ❤

[@randywhelchel4674]

It’s very hard to time the market I’ve been in since the 60s I can do it… I missed the third leg up I didn’t realize it’s coming?😮

[@The.618]

He is a guru, how could you dare doubt his view

[@postscript123]

As usual, another fantastic interview.

[@issenvan1050]

How about silver?

[@mjbucar]

A great video interview. I always enjoy listening to Felix Zulauf's rationale.

[@TheJuliaLaRocheShow]

Isn't he wonderful? I enjoyed listening to him too.

[@ReginaLong-wg1zh]

What does it mean when Felix says, “i don't believe our system can live with 8% treasury yields.?

[@johnritchie6141]

Also, in another recent video on Thoughtful Money, ge says Ukraine provoked Russia! How?

[@issenvan1050]

He is all around nowadays, giving interviews.

[@TheJuliaLaRocheShow]

I think he does interviews once per year. It's my first time speaking to him; I've wanted to for ages!

[@thehungergames8918]

Robert Prechter sees a few decades long bear 🐻 market 😨

[@Andrew-ww7qq]

He was wrong in his forecast of 2023 ...seems his outlook for 2024 is the same playbook. Will he be right this time?

[@chrism-pt4mj]

When the 2-10 year yield curve reverses the countdown to recession begins.Based on the length and depth of the current inversion it’s going to be a bad recession.I would say late 2024/early 2025.There’s time to invest , but keep your eye on the indicator mentioned.

[@issenvan1050]

What does he mean by currency controls?

[@garystrand8010]

Simply YCC or Yield Curve Control like Japan. Inflation is capped but productivity and growth are almost anemic. FED targets 10 year, prints base current while setting TBills to zero ZIRP or even negative interest NIRP = Government debt service cash flow is contained or managed by Domestic Tax Receipts. Also the FED can increase Bank Reserves against Deposits from current 10% to say 30%. Banks are then forced to purchase UST (higher demand) which increases principal and also lowers yields.

[@issenvan1050]

@@garystrand8010 He appears to distinguish “currency controls” from what you are describing here. That’s why I am re-asking: what does he mean by “currency controls?” Besides, isn’t the current reserve requirement at zero (hence, banks don’t have to have “money”), not 10?

[@garystrand8010]

My sincerest apologies about the 10% reserve rate, yes now 0, because I take great pride in stating real facts. Thanks for the education. The Tool to increase the Federal Reserve Rate and set a yield PEG like WWII increasing UST demand and lowering yields is very real. Definitely a form of currency control. What Zulaf had specifically in mind about "currency controls", I too am not sure? Not much help.

[@issenvan1050]

@@garystrand8010 He seems to distinguish between YCC & capital controls. So, there is no money in banks?! 😎

[@issenvan1050]

@@garystrand8010 You should watch Steve Hanke. Everybody else is below him, tbh.

[@jameskelly9243]

What didference between him and tom lee..

[@TheJuliaLaRocheShow]

I believe in having a diversity of views on this channel. ☺️

[@akdinath]

Bear vs Bull

[@miketesa1456]

The Fed Reserve will keep playing games. There's no chance of a crash-ever!

[@johnritchie6141]

Those naughty BRIC countries putting their commodity prices up in the face of rising demand, instead of giving them away.

[@adriansmith7604]

USA recession late 2024 inflation here Australia at least 15% price gouging is CANCEROUS here

[@brunoheggli2888]

How about Lego?

[@robbyh7037]

Does congress needs to approve QE or can the fed take that decision without? Basically can Republicans block QE in 2024

[@issenvan1050]

How does CCP encourage Chinese to own gold?

[@ryanbaileyboxing]

🔥🙏🏾

[@terrillmel]

They should just allow for a recession because right not incentives are screwy.

[@dave8212]

👍🏻💛

[@issenvan1050]

Would even a Republican administration “allow” that re-liquidification?

[@petervanderveen2340]

I don't see china and russia producing a powerful gold backed currency over the next "10" years, if anything they are a couple of pissant countries that are going to be swept into the dustbin of history. china had a very nice run that lasted 35 years or so but they are on the downhill side now and have been since about 2015. What we witnessed in china was a flash in the pan which was driven in large part by demographic circumstance. Small retirement age group, small children group, and large working age group, coupled with a loosening of the communist/ totalitarian central planning system. Since xi became president in 2011 according to their own numbers the economy started to slow down and in 2015 their population started to shrink and recently the average age of the chinese surpassed that of the US and their ultra low birth rate (around 1) coupled with their rapidly aging work force has them on a path of decline. In 10 years they will be more worried about where their food is going to come from than a gold backed currency

[@user-zb1yy2xm9v]

Humans are always looking for food, or money.

[@adriansmith7604]

% chance recession in 2024 in USA or World Recession

[@issenvan1050]

How come Russia owns 2x as much gold as US?..

[@ThyeWinterGardens]

I'm not sure that it does. When I look up gold reserves by country the US has 8133 tonnes vs Russia with 2333 tonnes

[@issenvan1050]

@@ThyeWinterGardens Is he referring to the Russian public, then?

[@tlebryk]

UNofficial holdings, similar to commercial/state banks and military and public al combined.

[@marcopolotimetraveller]

Russia has spent the last 20yrs buying. USA has spent the last fifty years selling.

[@issenvan1050]

@@marcopolotimetraveller Still, US should have a lot more, according to the figures. & Russia produces gold.

[@thehungergames8918]

🏅🥈🏆🎉🎊😃✊

[@togoni]

Zulauf is on Kreml;in payroll.

[@ThomasG-og4yb]

Test

[@civillian888]

Now ask him about climate change

[@klovacka]

Tom Lee has called for SPX 5200 by DEC 2024. DO-NOT BE FOOLED BY THIS NONSENSE

[@BigHenFor]

SPX? Lol.

[@civillian888]

Sorry I have no clue who this guy is but he shows no humility in these calls. Unreal

[@JamesG1126]

Stocks soar 50% in 2023. Bad things coming LOL

[@BigHenFor]

Stocks aren't the real economy, and when you look at the S & P 500, only the Magnificent 7 is making any real gains. The other 493 companies are still back in 2022 territory. And even the Mag 7 have hurdles to climb next year, as the US consumer has exhausted their savings, and nearly half are living paycheck to paycheck. Plus consumer credit defaults and Bankruptcies are up, and commercial RE will have to pass a few more kidney stones as the banks' lending criteria tighten even more, and private equity finally gets the message that the smelly stuff takes its own sweet time to hit the fan.

[@dallemj9444]

NOOOO NEVER GOLD IS A YELLOW PET ROXK THAT WILL COLLAPSE ITS JUST A YELLOW PET ROCK BITCOIN IS NEW GOLD

[@marcopolotimetraveller]

😂

[@keepgrindin7645]

He has been so consistently wrong about most calls. Just look at his 2023 calls. Over 75 percent were wrong.

[@BigHenFor]

Really? Perhaps you need to refresh your memory. Check out his interview for the Wealthion channel dated 8th December 2022. Then check your assumption he got 75% of his calls wrong. P.S. You can download the transcript, so you can check his assumptions word by word.

[@keepgrindin7645]

🤣@@BigHenFor