October 2018 - Summary -


Despite October`s large decline in markets, the worst is yet to come, in my opinion. We will see large swings in stock markets over the next few months, giving bulls the false hope that a correction is over. I am estimating this coming bear market to take approximately 18 months, having taken the average duration of the past bear markets.

A midterm election, trade tariff discussions, they all seem like reason to celebrate, but they`re a drop in the bucket when it comes to the macro picture that i`ve been sketching for you over the past 3 months. The current monetary system is broken and must be fixed. This can either be done through hyperinflation, through increasing the price of gold overnight and therefore artificially inflation balance sheet holdings, or, as some have suggested, another big bailout. This bailout wouldn`t be for corporations, but for entire governments. The IMF has the power to create its own currency and can therefore bail out any government. This would be another “kicking the can down the road” scenario and is currently only a conspiracy theory.  

I would bet on a worldwide hyperinflationary situation, which essentially allows governments to press the “reset button” and start anew. This will hurt each and every one of us, and only the people who hold commodities or other hard assets will be able to avoid this crisis. One advantage? Stock market valuations would go to the moon! (measured in then-worthless Dollars)

My preferred scenario would be a revaluation of gold, where a few zeroes would be added to its dollar valuation and “magically” government balance sheets would look much healthier. Because at the end, who does the world owe money to? Itself. So theoretically we can move the goalposts as much as we want.
Will there be unintended consequences to such a revaluation? Most definitely. How about gold producing nations, would they suddenly become world leaders when it comes to the size of their balance sheets? How about a country like India, that`s known for its citizens hoarding gold, will they benefit the most from such a revaluation?

For a project like this to succeed, the largest nations will have to cooperate and roughly hold the same amount of gold in reserves, to be able to be on equal footing as their counterparts after the revaluation. Is this scenario feasible? I`d love to hear your thoughts about it!


Thank you for reading, and don`t forget to stay positive!
Robbert-John Sjollema





The information contained in this publication is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. The opinions expressed in this publication is that of the publisher and is subject to change without notice. The information in this publication may become outdated and there is no obligation to update any such information.