Episode summary
You’re Waiting for the Bubble to Burst | Jan van Eck on Why It Already Has
Excess Returns
· · Guests: Jan van Eck
Summary
Jan van Eck argues that investors have more 2026 visibility than headlines suggest because government spending, monetary policy and technology are already pointing in recognizable directions. He says federal deficits are on a downward trajectory, from over 6.5% of GDP two years ago to a forecast below 5.5% this year, which he thinks reduces stress on markets and supports a “risk on” setup.
On monetary policy, van Eck expects a less interventionist Federal Reserve and does not think the market is facing an extreme tightening shock. He says the philosophy coming out of Washington points toward normal short-term rates rather than a dramatic cut to 1%, and he thinks that mainly helps financials rather than creating a broad sector shift. He is also relaxed about Fed independence, arguing the chair is only one vote and that politics around rates are nothing new.
The strongest conviction in the discussion is around AI. Van Eck says token demand is exploding, compute remains in shortage, and the AI buildout is moving from phase one into broader beneficiaries like electricity generation, nuclear power, and selected industrials. He also sees gold as a long-term response to a multipolar world and rising geopolitical distrust, while private credit looks less alarming than many fear because corporate and household leverage are shrinking even if some vehicles trade cheaply.
Key takeaways
- Van Eck expects federal deficits to fall below 5.5% of GDP in 2026, which he says should ease market stress.
- He thinks the next Fed chair will follow a less interventionist philosophy, but he does not expect a dramatic rates shock.
- He says AI token demand is exploding and believes the compute shortage could persist for about two more years.
- He sees the AI opportunity broadening into electricity, nuclear power and other infrastructure plays, not just semiconductors.
- He favors gold as a long-term hedge in a multipolar world where trust in paper currencies is weakening.
- He is not highly worried about private credit systemwide because corporate and household balance sheets are shrinking as a share of GDP.
Notable quotes
“Federal fiscal deficits as a percent of GDP is on a healthy downward trajectory”
“what that suggests to me is that he was not laying the groundwork for someone to come in and drive short-term interest rates from 3 and a half% to 1%”
“I think when you focus on the few number of really important trends in the world and I think for a longer time you can just have much greater conviction around that”
“Token demand is exploding. It's and and I don't think those numbers are are released a whole lot anymore by the by the hyperscalers”
“I guess uh a reasonably high conviction that we won't get a dramatic employment shock”
How the episode opens
If you look at government spending, monetary policy, and technology, we we do know a lot about what's going to be happening in 2026 already. Federal fiscal deficits as a percent of GDP is on a healthy downward trajectory. So, it peaked um over north of 6 and a half% two years ago.
It was just south of 6% last year. We think it's going to be below 5 a.5% uh going into this year. One of the things that Besson said as well though is he said interest rates today are normal.
And what that suggests to me is that he was not laying the groundwork for someone to come in and drive short-term interest rates from 3 and a half% to 1%. Token demand is exploding. It's and and I don't think those numbers are are released a whole lot anymore by the by the hyperscalers, but you know, I think it was like 38 times from the summer of 2024 to summer of 2025.
Hi Yan, welcome to Excess Returns. — Thank you. It's great to be here. As CEO of VANC, you oversee a innovative and a very influential ETF and asset management firm. You're home to some of the industry's well-known and widely used ETFs, including the Vanic Gold Miners ETF, the Vanic Wide Mo ETF, and many other stock, bond, and crypto ETFs and investment strategies. Um, you've described
Semiconductors. That's the biggest one. That's right. Um, but yeah, a lot of different I mean dozens of I think ETFs and strategies and some of the first in some of these I think more I would say a little bit more focused areas of the market but areas that advisers and investors clearly want exposure to and are important in terms of building diversified investment portfolios.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ai capex
- gold allocation
- federal reserve policy
- fiscal deficits and rates
- private credit and liquidity
Companies and tickers mentioned
- VFIDX
- VGPMX
- VWIGX
- VWEHX
- VanEck
Watch the episode
Watch “You’re Waiting for the Bubble to Burst | Jan van Eck on Why It Already Has” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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