Bankless Podcast: "Why Recessions Are Dead & How to Invest in The Debasement Era" Guest: Vincent Deluard (Macro Investor, Stonex Group) Host: Ryan Sean Adams Date: September 15, 2025

Overview

In this episode, Ryan Sean Adams interviews macro investor Vincent Deluard to break down the forces that have propelled U.S. capital markets to dominance, why the era of recessions as we've known them is over, and what investors should do in the new "debasement era." The discussion traverses persistent inflation, the "MAG7" concentration, AI’s impact, gold and crypto’s roles, and, most importantly, how to construct a robust portfolio for the future.

Deluard brings a macro lens shaped by years advising pension funds worldwide, offering a forthright, sometimes counterintuitive take: yes, fiat debasement is real—and here's how to survive and thrive in it.

Key Discussion Points and Insights

1. The U.S. Capital Markets Supercycle (03:31–25:13)

• U.S. equities have outperformed the rest of the world since 2008—outpacing by around 8% per year with low volatility.
• "Pretty much since 2008, if you went long the MSCI US index... you would have made about 8% a year with almost no volatility. This is like line goes up chart, perfect." (Vincent, 09:05)
• U.S. now accounts for ~70% of global equity market cap, despite having only about 5% of global population and 10–20% of GDP (13:00).
• How did this happen?
  • Tech sector dominance (iPhone, rise of the "MAG7")
  • Shale/nat gas: U.S. became the world’s largest energy producer, slashing energy costs
  • Willingness and ability to run aggressive fiscal policies post-2008
• The U.S. stock market’s structure (tied to the pension system) creates persistent, valuation-insensitive demand for equities.
• After Russia’s assets were frozen in 2014, international reserves shifted from U.S. treasuries into U.S. equities.

Notable Quote

"The U.S. equity market became the recipient of the U.S. trade deficit, which is our capital surplus. And we benefited from massive purchases from foreigners that really no other market experienced like that." (Vincent, 24:08)

2. Is This Peak America? (27:36–35:36)

• Signs are emerging that U.S. market dominance may have peaked.
• Foreign sovereign wealth and pension funds are over-concentrated in the MAG7.
  • "The world’s largest investor is the Norwegian pension fund...If you add up their holding of the Mag7, it’s more than 100% of Norwegian GDP." (Vincent, 31:01)
• The AI-driven rally has kept energy in the U.S., but foreign funds have mostly only trimmed currency exposure—not MAG7 positions.

Notable Quote

"It is odd...Being like, I think many of our American listeners will have just...not noticing that we've been in an American capital market super cycle since 2008." (Ryan, 13:10)

3. Investing in the Age of AI, Concentration & Bubbles (35:36–39:23)

• AI spending by hyperscalers made up a third of U.S. GDP growth recently—unsustainable.
• AI can be both a real, long-term transformative force and a short-term bubble—parallels to 1999 and ecommerce.
  • "The answer could be it’s both a bubble and real." (Vincent, 37:24)
• Macro: Real growth post-COVID has been surprisingly strong (~3% a year), higher than in the previous decade.

4. Inflation: Now a Mentality, Not an Event (39:23–50:04)

• Deluard identifies as an "inflationista," predicting the Fed’s 2% inflation target is dead and 3%+ CPI is the "new floor."
  • "If you kind of miss the target for five years...We see the Fed cutting rates not once but twice now with core CPI at 3%. That tells you...3% on core is the floor." (Vincent, 40:27)
• He advocates seeing inflation as a persistent macro-social force, not merely a supply shock or technical phenomenon.
• "There’s something in the air. Right. That’s why I talk about the psychology of permanent stimulus." (Vincent, 45:04)
• Institutions have not fully priced in persistent inflation—most still act as if the 2% inflation target is meaningful.

Notable Quotes

"Inflation is a symphony. It’s the air we breathe, it’s the water we swim in." (Vincent, 41:26)
"The 2% targets kind of somehow survives in long term bond pricing. So no, I don't think I am...I don't think it's consensus yet." (Vincent, 49:23)

5. Debasement Mindset & The Portfolio Shift (50:04–54:02)

• Large investors are moving from "capital preservation" to "purchasing power preservation"—hence, the move into "debasement assets" like equities, gold, and crypto.
• Long duration government bonds are the loser in this new regime.
  • "The loser is long term government bonds." (Vincent, 51:55)
• Demand for bonds is artificially propped up by passive index flows and regulation; this is a form of "soft capital control" (Ryan, 53:41).

6. Fiscal Dominance: What It Is and Why It Matters (55:48–66:24)

• Fiscal dominance: government spending/fiscal pressure trumps central bank (monetary) independence.
• Trump's direct pressure on the Fed (and other politicians’ similar moves) are a symptom of monetary/fiscal inseparability.
  • "Historically, the role of the central bank in any country has always been to finance the government." (Vincent, 56:57)
• The 2% inflation target was always arbitrary and unelected.

7. The End of Recession as We Know It (68:55–76:27)

• The structure of the U.S. economy, ubiquity of fiscal stimulus, and the dominance of intangible assets make "recession" (as defined by deep, deflationary busts) highly unlikely.
  • "I'm in my early 40s, there's been only one recession in my lifetime in the U.S. ...The only major recession we've had is 2009." (Vincent, 69:24)
• Even as construction/manufacturing cycles slow, government and healthcare dominate, muting cyclical downturns.
• If anything, the risk is "death by fire": persistent inflation/stagflation, not meltdown.

Notable Quote

"If you think of recession as a 2009 like event where we'll see, you know, sub 1% inflation print, massive job losses, 10% unemployment rate. I really don't think it's going to happen." (Vincent, 74:11)

8. How To Invest: The "Debasement-Resistant" Portfolio (77:45–92:43)

Deluard’s 2025 playbook:

• Hold cash—but not as a store of value. Cash is "optionality"—the ability to buy risk assets on dips.
  • "I like cash,...not necessarily because I think it's going to be the best way to preserve purchasing power. But...cash is the option to buy something else at a cheaper price. It has this optionality value." (Vincent, 77:45)
• No long-duration government bonds; short-duration bonds are preferable.
• Stay market or overweight U.S. equities—especially on corrections, even though foreign capital may be rotating out.
• Seek international exposure, especially China and Brazil. U.S. outperformance has likely peaked; Asian/EM currencies are due for their turn.
  • "We will see the most interesting opportunities over the next 10 years are going to be abroad." (Vincent, 81:37)
  • "Within EM complex, I would actually favor China... Brazilian equities are another one." (82:10)
• Don’t fall for "economic growth = stock market returns"—the price you pay matters most.
• Gold: Still a core holding, supported by persistent central bank demand even at all-time highs. Investors in the West remain underweight.
  • "One thing that does help gold is your..you have this kind of central bank bid...And you still see like the share of...people, bank of China, they probably have like 4%." (Vincent, 89:26)

Notable Quotes

"It's not just, you know, buy...crypto and nothing else is probably not, not the right position." (Vincent, 68:07)
"Going back to crypto, in the early age, crypto had a negative correlation to stocks, now it's probably around 60, 70%...As it gets adopted...if everybody owns it and you lose money in stocks, then you're going to sell something else." (Vincent, 78:28)

Predictions:

• U.S. stocks may see a 10–15% correction in Sept/Oct (80:51).
• Emerging market equities (China, Brazil, etc.) will benefit from a weaker dollar and normalization of real rates.

Memorable Moments & Notable Quotes (with Timestamps)

• "Investing is one of these things where it's almost the opposite of eyesight...the further it is, the clearer it gets..." (Vincent, 04:09)
• "Every economic activity is energy transformed." (paraphrasing We gave, 16:10)
• "You cannot separate fiscal from monetary...it's something that only works in economic textbooks." (Vincent, 56:57)
• "There are two ways you can die. We can die by fire or we can die by cold. And I think it will be death by fire this way." (Vincent, 75:34)

Timestamps & Key Segments

• 03:31 — Introduction to Vincent and the next 10 years of macro investing
• 09:05 — U.S. capital market dominance, historical context
• 14:09 — Why did the U.S. surge post-2008? Multi-factor breakdown
• 25:13 — How foreigners became overexposed to MAG7; global savings in U.S. assets
• 31:01 — Norwegian sovereign fund's extreme MAG7 exposure
• 37:24 — Is AI a bubble or genuine productivity boost?
• 39:45 — Persistent inflation, debasement era described; the death of the 2% target
• 50:04 — Debasement portfolio shift, bonds as the big loser
• 55:48 — Fiscal dominance explained; Trump vs. Powell
• 68:55 — Why deep recessions are structurally “dead”
• 77:45 — Portfolio recommendations for debasement era
• 82:10 — China and Brazil as international equity plays
• 89:26 — Gold’s continued strength and central bank accumulation

Actionable Takeaways

For investors looking for debasement resistance:

• Maintain cash for flexibility, not safety.
• Avoid long-term government bonds.
• Don’t underweight stocks, even if U.S. mega-caps seem stretched.
• Heavily consider international (esp. Asia/EM) equities as USD cycles wane.
• Gold and hard assets remain in play, especially given central bank accumulation; Western ETF investors have yet to join the party.
• Crypto remains part of the portfolio—but don’t be a maximalist.

Big Picture:
Deluard’s thesis: the post-2008 regime is transitioning. Passive flows may keep U.S. assets bid, but the real value will shift internationally as fiscal dominance, inflation, and a “debasement mindset” take hold. Avoid the "Ponzi will collapse" doomerism—expect fire, not ice.

(End of summary. For full content, see detailed transcript for quotes and further color.)