Why Gold Can Fall When the Next Crisis Begins | Steve Keen

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Steve Keen argues the next crisis may not be an automatic gold bull case: if leveraged holders are forced to liquidate into stress, gold can sell off alongside other assets even as financial distrust rises. His key point is that private-sector debt — not the $40tn headline debt figure — is what drives systemic fragility, and he warns companies that have easily serviced loans for 15 years could start defaulting as the cycle turns. Keen also says the AI boom has less than a year left, with serious-user revenue running at only about one-fifth of spending, implying a broader risk-off episode could emerge from the equity side rather than sovereign debt. He criticizes Fed stress tests for missing the mechanics of bank-created money and says more than 90% of money created since 2000 has come from the private sector, reinforcing his view that credit contraction is the key transmission channel. For metals, the message is mixed: gold should benefit from distrust in the system, but a crisis-driven deleveraging could trigger forced selling before any safe-haven bid reasserts itself. Near term, traders should watch credit spreads, bank funding stress, and any liquidation in crowded risk assets; if those intensify, gold may first dip on margin pressure before recovering as a hedge.