Mark Moss delivers one of the clearest explanations yet of the four stages of Financialisation and why the global system may finally be reaching its limits.
The First Floor was the DotCom Bubble. Excess liquidity and speculation drove valuations to unsustainable levels before the collapse of 2000–2001.
The Second Floor became Residential Property. Supported by aggressive lending, derivatives and central bank policies, property evolved into the dominant asset class until the Global Financial Crisis exposed the risks.
The Third Floor was Sovereign Debt. Massive QE programmes, ultra-low interest rates and unprecedented money creation allowed governments to postpone the consequences of previous excesses. Covid accelerated this process dramatically.
Today that Sovereign Debt Bubble is showing signs of strain as bond yields rise, refinancing costs increase and global demand for government debt weakens.
The question becomes:
What is the Fourth Floor?
If confidence in fiat currencies, bonds and debt-based assets continues to erode, capital may increasingly seek scarce, tangible and trusted stores of value.
This is where Exter's Inverted Pyramid becomes highly relevant.
Gold, silver and selected real assets sit at the foundation of that pyramid. In a world carrying record debt levels and unprecedented money supply growth, even a modest reallocation of capital could have profound consequences for precious metals markets.
The road of Financialisation may be approaching its end.
The implications for investors could be enormous.
