In his recent Bloomberg interview, Nassim Taleb, the author of The Black Swan, issued a damning assessment of the market’s outlook, warning of irrational behavior, flawed policies, and rising systemic risks.
“The riskiness of America has increased,” Taleb began. And it’s not just about headlines — it’s structural. “The accumulated deficit… is snowballing… and it was interest rates here it is adding every year to the budget.” He added, “We should be borrowing less now that we have reached sort of like almost reached a destination.”
That’s only the beginning. Taleb points to another looming threat: “The dollar is losing its status as a reserve currency… gold is effectively now the reserve currency.” Why? “People not connected to Putin decided to stay away from the euro and the dollar.”
His skepticism of conventional market wisdom is unwavering. When Citigroup predicted a slowdown in gold’s rally, Taleb quipped: “What do they know? How do they know?”
He also warns that risk models haven’t improved since the 2008 crisis. “People still use bad models more and more… things have gotten worse.” As he sees it, “There is [no] consciousness of risk that has improved… people don’t understand the difference between noise and signal.”
Taleb finds markets increasingly disconnected from fundamentals. “Markets are not driven by… long-term economic stuff. It’s driven by allocations.” While allocations shift, the long-term issues remain: “The economy will decide, and we have severe problems.”
His sharpest critique is aimed squarely at recent U.S. policy. “The approach is not very rational,” he said of Trump-era economic strategies. “What are you going to do now with these tariffs? Try to shift business from high added value into low added value… like asking a surgeon… to clean the streets one day a week… it would depress GDP.”
On immigration, his tone remains pointed: “Everything is based on cheap labor coming from Latin America… trying to constrain that source of labor may make sense in the long run… but for the time being, we don’t have cheap robots.”
And while Taleb supports hedge funds over banks — “Hedge funders have their money in it” — he warns about opaque private markets if bailouts are in play: “If there is a potential bailout, then we need to know what we may have to bail out.”
You can watch the entire interview here:
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