Global Economy Charts

Now, let’s talk about CMBS. The overall average delinquency rate is around 8%.

That is extremely high. It has now reached its highest level since November 2020. And remember, that is the overall average.

What is particularly problematic? Office properties. The delinquency rate is 12.16%.

There are figures approaching 13% to 14% in some cases, and this is extremely dangerous. There are several reasons, but one major problem is that loans cannot be extended or refinanced at maturity.

Then we have an increase in specially serviced loans. What does that mean? It means lenders are having greater difficulty recovering their money, so more loans are being transferred into special servicing.

I show you these charts all the time, and personally, I think this may be where some kind of trigger event occurs.

The biggest problem is office real estate. The delinquency rate is now above 12%.

This is enormous. You need to watch this very carefully and make your own judgment.

Now, let’s take a look at oil. Oil prices are still running very high. It is around $101 and still in an uptrend.

Now let’s look at Bitcoin. It is declining. So I believe the rebound will be limited, and there is still a second major decline ahead.

Now let’s look at ARK. These are growth-oriented stocks, and we now have what looks like a double top followed by a decline. Watch this carefully.

The reason I keep telling you to watch bank stocks is CMBS. If this situation deteriorates, the banks that financed these properties—especially regional banks—could be in serious trouble.

Then another 30% decline becomes quite possible.

If we keep seeing declines of 30%, 30%, and another 30%, eventually a banking crisis could erupt, and the Federal Reserve may have no choice but to cut interest rates. And then they would have to inject liquidity again. In my view, that kind of situation could be right around the corner. That is why I keep emphasizing banks. Watch the banks. Keep watching the banks.

If one or two major banks run into serious trouble, the consequences could become extremely difficult to contain. That is why we are preparing in advance and reducing our exposure to the stock market.

Nvidia is basically the only one still holding up. That is not a healthy sign. And we now have a divergence. In my view, this is warning of a major crash. Keep in mind that some stocks could potentially fall 20% or even 30% in a single day.

Next is Apple. That looks like a double top.

Google is declining.

Microsoft has formed a large double top.

Amazon is moving lower.

TSMC reached an all-time high and is now starting to pull back.

So when people say everything is fine, I don’t think that makes sense.

Meta also shows a similar large double-top pattern.

Broadcom had a relatively strong rebound, but the broader trend remains intact.

And now, Tesla. How does it look? Not good. Once something falls more than 40%, recovering becomes very difficult.

Look at Super Micro Computer. It fell roughly 80% over about a year. I am concerned that something similar could eventually happen to some large-cap stocks.

Now, Palantir. Again, we have a double top.

Now Oracle. If a serious default risk were to emerge at Oracle, then in my view the AI trade could collapse that very day. Again, I believe Oracle is showing significant credit risk. Why? Because I believe its corporate bonds are trading at levels associated with high-yield, or junk-bond, credit risk. That would be extremely dangerous. If something suddenly breaks, the consequences could be severe.

CoreWeave is similar. It has fallen nearly 70%, and this is the kind of situation we are seeing.

Now look at the SoftBank. Problems are appearing here as well. We had a rebound after the initial crash, and I believe the second decline has begun.

Be careful. This one is down more than 2%. This is Micron.

If Micron falls, Samsung Electronics tends to come under pressure. And if Samsung Electronics falls, that puts pressure on the KOSPI.

That is what I have continued to emphasize. There was a rebound after the crash, and now I believe the second decline has begun.

SanDisk is showing a similar pattern.

SanDisk, Micron, Samsung Electronics, and the KOSPI are all closely connected in this cycle.

Now let’s look at real estate. This is the Dow Jones Real Estate Index.

The decline has begun. The monthly RSI is around 47, and the trend is downward.

And here is CMBS. I have shown you this repeatedly. I have been saying that the major trend is downward, but the problem is becoming much more serious than many people realize.

Office delinquency rates are above 12%, with some figures exceeding 15%. At these levels, I believe the office market is effectively breaking down.

If that continues, CMBS-related assets could be hit very hard, and I believe this sector could potentially produce the trigger for a broader crisis.

Commercial real estate is becoming a major problem, and especially vulnerable are the banks that provided the financing.

You need to watch the market with the possibility that this could become a major event. I am not trying to scare you; I am simply explaining the situation as I see it.

Next, the price of the U.S. 10-year Treasury continues to decline. It is around 104, and whether it breaks 100 will be important. This is serious.

The U.S. 10-year Treasury yield is now around 5.32%.

Now the 3-month yield. It has risen to around 4.138%. Keep in mind the possibility that the Fed could raise rates one more time.

The 2-year Treasury yield has a strong relationship with gold.

Next is the 5-year yield, around 5%.

Now the 10-year and 20-year. The 20-year yield is rising again to around 5.745%. That is enormous.

The 30-year yield is also around 5.7%. This feeds into mortgage rates, and the real estate market is in serious trouble. Transactions can freeze up at these levels.

Who wants to take out a mortgage at around 7% interest?

The interest-rate spread is also important, and it is rising. I believe this is one of the biggest risks. Keep watching the unemployment rate as well.

If this continues rising, I believe we could potentially see a breakdown comparable to the pandemic crisis, the Lehman crisis, or the Savings and Loan crisis.

Real estate could collapse, stocks could crash, and banks could fail—all at the same time.

This is why I have repeatedly warned about the possibility of a Great Depression-scale event. Keep this in mind and watch the situation carefully.

Now the dollar. We are seeing some temporary strength, but overall it still looks relatively sideways.

Next, the yen. The yen is not coming down yet, and Japan still has not raised rates.

The Australian dollar has paused for now.

The euro looks very weak right now. In my view, concerns surrounding France are putting significant downward pressure on it. This is different from what we are seeing in the dollar.

The dollar is only moving this much, but the euro is falling much more sharply. I believe France is a major factor. Problems could potentially erupt in several areas.

We could potentially see a European financial crisis. And as I mentioned earlier, commercial real estate—especially CMBS—could also become a major source of trouble.

There is more than one potential time bomb in the system right now. Watch them carefully.

The yuan is also showing strength, while the won-dollar exchange rate is moving higher as well.

The dollar is still near these elevated levels, and that is one reason gold has experienced a slight correction.

But gold is continuing to hold above the $4,000 level.

Spot gold is around $4,116.

Silver has fallen to around $60, and I think it may test the next support level.

What level? Around $55. Could it fall further? Yes, it could move slightly lower.

Spot silver is not currently in backwardation.

The gold-to-silver ratio has risen to around 68.

Copper, meanwhile, is not falling.

That suggests inflation may remain difficult to bring down.

This puts the Federal Reserve in a very difficult position.

Natural gas is also starting to rise, and we need to watch that carefully.

Wheat is also rising.

Wheat can become a natural source of inflationary pressure. Natural gas is also moving higher.

If natural gas begins another major move higher, it can rise very quickly. If gas joins the inflationary move, that becomes another serious problem.

Oil is also rising. If all of these move higher together, that becomes a serious inflation problem. Copper is not coming down either.

The key low for silver futures is around $55. Watch whether that level holds. It could move slightly below $55.

I think silver could potentially test around $50. Gold is similar. The key level is $4,000, and personally I think it will hold.

Why? Because I do not think the buyers who accumulated around these levels will simply stand aside. That is why I continue to suggest buying small amounts of physical precious metals gradually rather than all at once.

That is what I keep emphasizing: gradually accumulate small amounts of physical precious metals. If you buy steadily over time, you do not have to worry as much about the exact entry price.

The people who tend to worry the most are those holding paper gold. I also uploaded a James Rickards video. I recommend watching it.

I have explained why I believe physical gold is important. People who went all-in near the top are probably very nervous right now.

I continue to emphasize gradually buying small amounts. In my view, this is about survival rather than speculation.

Rather than making a huge bet in an attempt to make a fortune, I think it is better to focus on financial survival.

Next, let’s look at the Russell 2000.

It is clearly in a downtrend. The RSI is around 46. In my view, the major decline has now begun.

If you look at the monthly chart, I believe the major downtrend has started.

How long has it been since we saw something like this? I believe we could be entering the biggest decline in roughly 17 years.

We have an enormous divergence.

Historically, major divergences like this have often been followed by severe declines.

The Dow is showing something similar. Its RSI is around 50, and the trend is turning downward.

The problem with the Dow, in my view, is that we are sitting near the top of a roughly 120-year long-term trend.

This is an extremely difficult setup.

The S&P 500 may look extremely strong, but I believe that strength is misleading. Why? Because only roughly 10 to 20 major stocks are holding the index up.

If you look at the equal-weighted index, you see a very different picture. That is why the headline index can create an illusion of strength.

That is why I always say: look at the entire market, not just the headline index.

The Nasdaq is similar. It has reached record highs, but I believe the index is being distorted by a relatively small number of stocks.

Because a major divergence has developed, I believe a very severe decline could be waiting ahead.

That is why I continue telling you to be cautious.

For the Nasdaq, I believe 12,000 is a realistic downside level, and under an extreme scenario it could potentially fall toward 7,000 or even 4,000.

But people do not believe it. Why? Because the market is still near its highs.

I am not saying this simply because it might happen someday. This is the conclusion I reach from my analysis.

Some people do not sell at the top. Then they do not sell after the first decline. Eventually, after the market has fallen much further, they still cannot sell—and later they regret not selling earlier.

That is why I believe this divergence is warning of a major crash. My message is simple: prepare.

The next issue I have been discussing is credit risk.

Look at the weekly chart. Credit risk is now beginning to rise. You can see it starting to move higher from late September.

That means credit risk, real estate problems, and the AI bubble could potentially break at the same time.

So what will be the trigger? Personally, I think it could come from commercial real estate.

I do not think the sector can withstand these conditions. Refinancing is becoming extremely difficult, borrowers cannot obtain financing easily, and I believe credit risk could erupt.

This is one of the clearest examples: yields on CCC-rated high-yield debt.

It is currently around 17%. At around 17%, it has surpassed the September 2022 peak. In my view, the crisis has already begun.

So where could 17% go next? Potentially 19% or 20%.

If it moves above 19% or 20%, we would be approaching levels seen during the pandemic crisis. I believe there is a possibility we could reach those levels relatively soon.

When yields on CCC-rated high-yield bonds rise this sharply, it means there is extremely heavy selling pressure in the market.

When did it begin? Around mid-August. You can see how sharply it has been rising.

You absolutely should not ignore this. We need to watch whether it develops into something comparable to the pandemic-era credit shock.

It is not only about potential problems from China or Europe. If CCC yields move above 20%, I believe we could face a very serious credit event.

At the very least, I believe the warning signal has appeared. In my view, the deterioration in the market is becoming very serious.

I believe multiple problems could erupt at the same time during this cycle. You need to watch this very carefully.

So from a practical standpoint, I believe people should maintain adequate cash reserves and then consider holding physical gold.

Physical gold can simply be held securely, and when inflation rises, it can serve as an inflation hedge.

That is why I believe this is particularly important in the current environment.

Gold is a precious metal, but recently its volatility has increased dramatically. For a long time, volatility was relatively subdued, and then suddenly it increased.

When the 2-year Treasury yield is moving this violently, of course gold prices are going to fluctuate as well.

So going forward, my focus is on physical gold and cash.