Cheap money can push asset prices higher and encourage investors to take greater risks—but rising interest rates can expose the debt behind those gains. In this video, we examine how borrowing amplified the 2008 housing downturn, why commercial real estate faces mounting refinancing pressure, and how higher financing costs could challenge stock valuations and the spending behind the AI boom. We also explore how rising Japanese interest rates could unwind yen-funded investments across global markets, and what the August 2024 selloff revealed about how quickly that pressure can spread. Finally, we look at how physical gold, which requires no refinancing and carries no credit risk, can help diversify funds beyond assets dependent on cheap borrowing.
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