This Time Gold Will Rise While Stocks Crash: Alasdair Macleod Warns of Debt Spiral and Unlimited Money Printing
In a recent interview with Pinnacle Digest, veteran financial analyst Alasdair Macleod stated that the United States is already caught in a debt spiral. He warned that stocks will crash, the Federal Reserve will unleash limitless money printing, and gold will rise sharply while most investors watch their wealth disappear.
Macleod, who began his career as a stockbroker on the London Stock Exchange in 1970 and later worked in investment management and banking, explained that rising bond yields, inflation pressures, and an unnecessary war in Iran are accelerating the crisis. He previously predicted that if the yield on 30 year U.S. Treasury bonds exceeds about 5.2 to 5.3 percent, it will eventually reach 20 percent. Yields have already crossed that threshold.
America is already in a debt spiral
“We are already in a spiral of debt,” Macleod said. “I think the interesting thing is that very few people actually realize that.” He pointed to the Iran conflict driving up prices for diesel, kerosene, and marine fuel, which underpins global logistics. The Houthis have effectively halted Saudi oil exports.
A severe El Niño is expected to bring food shortages. “The idea that this is just a sudden spike in inflation, that it’s just a one off surge and there’s nothing to worry about, is completely wrong.”
Higher interest rates to defend the currency push the government deeper into the debt trap. “If they do not raise interest rates, the value of the currency will decrease. This is actually a very positive indicator for gold. But if they raise prices, this in turn pushes them further and further into the debt trap, which is good for gold too.”
Gold is money, not an investment
Macleod stressed that gold is real money and an exit from credit. “Gold is simply a complete exit from dealing with credit. This is the crucial point. Gold represents all types of physical and tangible assets, and the entire commodity pool.” When gold rises, “It’s really just a decrease in the value of the dollar.”
He dismissed the idea that gold has lost value simply because its dollar price fell about 1,500 dollars from the January peak. Paper markets and currencies distort values. “My work shows that at the moment it is valued at only 20 percent of what it should be in gold.” Central banks and sovereign buyers acquire physical metal outside open markets, so ETF inflows do not always move the visible price.
Stock market crash and limitless quantitative easing
If yields rise further from current levels above 5 percent, “the stock market bubble will burst.” Banks have lent nearly 4.5 trillion dollars to brokers, hedge funds, and through repurchase markets. Foreigners hold about 25 trillion dollars in U.S. assets and will rush for the exits. “Foreigners are the first to realize this. They go out first. But the vast majority of investors will be very slow to act.”
Macleod expects the Federal Reserve to print whatever is necessary. “The mandate is to do whatever is necessary to save the system. It’s limitless quantitative easing if you look at it from this angle. This will lead to higher bond yields. This is absolutely certain.” Profit margins will collapse, companies will face recession, tax revenues will fall, and the budget deficit will explode. “Simply put, everyone will lose everything. I regret to say that.”
Foreign investors, Saudi Arabia, and energy pressures
America is being expelled from the Middle East and scaling back European commitments, leaving foreigners holding unwanted dollars they will sell. Saudi Arabia faces collapsing income and rising expenses. “Its GDP is collapsing, which means that the debt to GDP ratio, currently at 33 percent, will skyrocket. You will find it is 100 percent within months.” Macleod sees a high likelihood of a palace coup against Mohammed bin Salman, who “simply refuses to accept any deal that might cost him face” and has mismanaged the Houthi situation.
Refined product prices imply a far higher effective crude oil price than headline West Texas Intermediate or Brent figures suggest, adding to inflation.
The biggest mistake investors can make
Macleod’s core message is that gold will rise while stocks crash because the public sector debt crisis will force unlimited credit creation. Holding paper assets and trusting the dollar to retain purchasing power is the critical error. “There is no way left” to postpone the problems. Real money is gold. The investment industry managing nearly 170 trillion dollars in U.S. assets has spent decades under fiat currency and does not understand this.
The interview makes clear that Macleod views the current environment as fundamentally different from 2008 because the crisis originates in sovereign debt rather than private sector excesses. Foreign sales of U.S. assets, rising energy costs, and the political impossibility of fiscal restraint set the stage for gold to reassert itself as the only reliable store of value while equities and the dollar decline.
