Gold’s performance reveals elevated systemic risk. There is more than one black swan at the door

History teaches us that in the past fundamentals have always ultimately prevailed over interventions, and that hope is not an investment strategy.

by Maurizio Novelli, manager at Lemanik Global strategy fund

News about the difficulties of some American companies active in the Private Credit segment confirm what I have been saying for some time about the crisis in the Shadow Banking System. The suspension of redemptions in Private Credit funds managed by Blue Owl Capital and BlackRock seems reminiscent of the stress situations that emerged in Bear Stearns funds before 2008. The contagion was immediately reflected in the shares of the main Private Equity firms (Blackstone, KKR, Apollo and Carlyle Group), whose stocks have been under heavy downward pressure for many months now, with declines from the highs reached two years ago amounting to a range of 30%-40% and beyond.

Negative news has begun to move beyond the narrow circle of sector specialists and is now prominently featured in the main financial media. The entire Private Markets sector is worth around $9 trillion (40% of US GDP), and the Private Equity sector alone, according to Bain & Co’s latest report, holds about $3 trillion in assets that cannot be sold under current market conditions. It is highly likely, therefore, that the US banking sector, already heavily exposed to speculative financing toward the Shadow Banking System, will begin to show serious credit problems in the months ahead. Shares of the major American banks active in Investment Banking have started to weaken significantly despite results that "beat estimates".

Adding to these developments is the further deterioration in credit in the Commercial Real Estate sector, where delinquencies reached a new record of over 12% at the end of 2025. It is worth remembering that credit extended to this sector by the US banking system amounts to $4.5 trillion (20% of GDP) and, at present, no default appears yet in the balance sheets of the exposed banks. At this point, a clear worsening of the credit environment and a general contraction in lending to the economy and to consumer credit can reasonably be expected, with the latter already showing a sharp rise in defaults.

And so, while people continue to say that “profits beat expectations”, Capital One Financial (COF US), the largest consumer credit company in the United States, is down more than 20% since the start of January. The consensus narrative is mostly focused on AI-related Capex and the positive implications of a potential increase in productivity, but in the meantime the entire structure of speculative credit that financed the "Private Markets bubble" is showing increasingly hard-to-hide cracks, and it is now clear that the impact of a crisis in the Shadow Banking System will have serious repercussions across the entire financial sector and will spread to the real economy through a contraction in credit.

Recent data on US GDP, for whatever credibility such data may have today, nonetheless confirm an important point: as soon as fiscal intervention stops, GDP immediately weakens. The US administration has in fact attributed this decline to the temporary administrative "shutdown" caused by negotiations over the "debt ceiling". However, in periods of high inflation, GDP growth is significantly distorted upward. There are in fact several inflation measures: the CPI, the PCE and the CPI used to calculate GDP; but the CPI used to calculate real GDP does not take account of any imported inflation, since GDP stands for "gross DOMESTIC product". So, in calculating real GDP, only price increases in goods and services produced locally are taken into account.

Although correct in principle, this methodology tends to produce a positive distortion in the calculation procedures, leading to an overstatement of the real figure in an economy that imports almost everything. Let’s take an example: if you import an Apple phone from China, whose price rises from $500 to $600, that increase is not counted in the domestic inflation calculation for GDP, but when the consumer spends an extra $100 to buy it, that increase adds to domestic consumption in real terms. The price increase would be picked up by the PCE or by the CPI used to measure general inflation, but not by the CPI used to calculate GDP. The same example applies to Europe: if Germany imports gas from the United States at twice the price paid to Russia, that increase is not reflected in the calculation of the inflation used for GDP, since the gas is not produced in Germany; but when the gas bill rises and consumers spend twice as much, that expense has a positive impact on domestic consumption. In fact, utility bills are also part of consumer spending (for some goods, people spend more because they are forced to).

This is why it is easy to understand why most consumers do not feel the economic growth that is currently being trumpeted by China and the United States, and to some extent also in Europe and the UK. In this case we speak of "Ghost GDP" or "ghost GDP": you see it, but you cannot benefit from it in any way. This is the main reason why consumer confidence is at lows everywhere, even though the economy appears to be growing and unemployment is at its lowest. Since 2022 we have been dazzled by "Ghost GDP", but the real economy has been in recession for 4 years. Stock market algorithms are celebrating, but the majority are struggling to make ends meet, and the US government must keep intervening with endless fiscal stimulus to avoid a recession. Confirmation of what I have described comes from defaults in consumer credit and from the problems in Shadow Banking, also confirmed by recent statements by J. Dimon, CEO of JPMorgan, who "warned of an impending market collapse and likened the current situation to the pre-2008 crash era." (The Economic Times Feb 25, 2026).

Just as in 2007 and the first months of 2008, equity markets continue to focus on other narratives, ignoring credit problems in the Shadow Banking System and the risks of a possible contagion to the economy. It is absolutely essential that the average investor remain focused on the consensus narrative without dangerous distractions that could put the resilience of US stock indices at risk. In reality, even for listed companies, "not everything that glitters is gold." Without the help of Buy Back, which on average consume around 50% of cash flow, the earnings per share (EPS) trumpeted by Wall Street would look quite different from what we are led to believe. The American administration is discussing how to curb this perverse mechanism, which continues to divert profits more toward the stock market than toward the real economy, but any attempt to stop it runs into the risk of a market fall.

Wall Street finance is therefore devouring the real economy, and the public budget must step in to replace the capital that is spent on Buy Back, which is what keeps the stock market rising. The capitalist system has entered an unsustainable phase and, in order to survive, it must defend to the bitter end the monopolistic positions it has created in order to avoid a crisis. This "monopolistic trap", in which the value created by the economy remains in the hands of a few, is already creating no small number of social problems in the Western world, and populist pressure is only set to increase. In an effort to counter it, current governments (the US first and foremost) must intervene with welfare spending, fueling another trap: debt.

For now, the perverse mechanism holds, but it is clear to everyone that it will end in a crisis. The performance of Gold tells us that systemic risk is sky-high. The start of 2026 highlighted the "fierce battle" on the precious metals markets between China and the United States. Gold and Silver, after a spectacular surge in the first weeks of the year, were hit by a massive intervention from someone intent on stopping their rise. The American government is now forced to intervene everywhere to prevent the onset of a financial crisis. It intervenes in the Treasuries market to prevent yields from rising, it intervenes in equity markets as soon as they fall, it recently intervened in the Dollar-Yen cross, and it probably also intervened in the Gold and Silver markets.

The sharp rise in precious metals during January, besides fueling a flight from the Dollar, was about to trigger a potential crisis at the Comex. The buildup of long positions in Gold and Silver had exceeded the available physical stocks at the Comex and therefore, in the event of a request for physical delivery, the Comex would not have been able to meet any requests. The intervention caused a steep drop within a few hours and triggered a "margin call". However, a few days after this event, Chinese authorities ordered Chinese mining companies no longer to sell silver futures contracts forward, effectively creating a backstop to the decline. China stated that Silver is a strategic metal and added that current stocks are at their lowest since 2021. These statements halted the crisis and sparked a rapid recovery in precious metals, trapping the American institutions that had intervened to push down the prices of both Gold and Silver.

It has therefore emerged that some US institutions are short precious-metals futures, which are now controlled by China. In fact, physical Gold is scarce in London and New York, but is widely stored in the vaults of the Shanghai Metal Exchange. The current market structure is therefore difficult to alter with one-off interventions, which do nothing but expose those who intervene to painful short covering. All of this highlights the "war" that China is waging against Dollar supremacy and the international currency system, fully aware that the economic and trade confrontation with the United States goes beyond a mere trade war and fits into the US strategy of economic "containment" and "isolation" of China.

Unfortunately, the United States has little chance of reversing a trend that is now irreversible. The weakness of the Chinese economy is evident even if official data show growth of 4%, but the crisis in the American system is no less severe, even if official data say, somewhat tellingly, that growth has been at 4% in three of the last four quarters. After the January storm, Gold is set to reach $6,000 in the near term, nullifying the American attempt to stop a trend that underscores an increasingly evident systemic risk and an increasingly marked Dollar risk. To prevent a collapse of the reserve currency, Japan is embarking on a reflationary strategy based on public spending and rates that do not rise, as announced by the BOJ.

This mechanism has begun to weigh on the Yen again, and its weakness tends to increase imported inflation and fuel a negative loop in JGBs. For now, the Dollar seems to be benefiting from Japanese policy of delaying rate hikes, but the decline in JGBs is destined to resume after the BOJ intervention in January. Japanese institutions, full of government bonds bought at yields of 0.5%, with JGB yields at 3%, are forced to average down and increase their positions in domestic assets, and this mechanism will begin to weigh on the flows directed into carry trades on US Treasuries.

In conclusion, we are now operating in an environment of clear stress, and the global financial system is surrounded by dozens of potential Black Swan events that could be triggered at any moment. The "complacency" currently supporting long positions in risky assets is based on the strategy of "hope" that policymakers will always be able to step in and prevent a crisis (A broken system is based only on the faith of the next bailout). Over the past 4 years, this strategy has proved successful; however, history teaches us that in the past fundamentals have always ultimately prevailed over interventions, and that hope is not an investment strategy.