Inside the Macro Mind of David Hunter (Little By Little)

00:47:33
https://www.youtube.com/watch?v=TCfDe_yLsrU

Sintesi

TLDRIn this episode of 'Little by Little', market strategist David Hunter discusses his predictions for the economy, including a potential deflationary bust followed by a pronounced inflation period. Hunter believes that the general market indexes may suffer due to rising interest rates, while commodities and energy stocks could perform exceptionally well. He anticipates that the current economic environment is fragile, potentially leading to a recession. Hunter argues that treasury bonds will be in high demand during the bust and provides bold price targets for gold and other commodities. He advises investors to prepare for a market run-up before the downturn and underscores the importance of focusing on assets that can withstand inflation.

Punti di forza

  • 📉 Indexes may suffer as interest rates rise.
  • 📈 Commodities and energy stocks could outperform.
  • 💰 Anticipation of a deflationary bust followed by inflation.
  • 📊 Treasury bonds may become 'king' during market downturns.
  • 🏦 Gold may hit $20,000 in the coming years.
  • 📉 Real estate values might decrease significantly.
  • ⚡ Expect a bullish run before a market downturn.
  • 🚀 Prepare for increased commodity demand due to reshoring.
  • 📉 Economic fragility poses risks to the market.
  • 💵 Investors should focus on assets that outpace inflation.

Linea temporale

  • 00:00:00 - 00:05:00

    The speaker discusses the negative impact of rising interest rates on stock market indices, suggesting that commodities and energy stocks could thrive during inflationary times. The potential for significant profits in the fossil fuel and gold mining industries is highlighted as oil and gold prices rise dramatically.

  • 00:05:00 - 00:10:00

    A conversation with David Hunter emphasizes differing views on inflation. Hunter believes inflation is under control, despite alternative measures suggesting higher rates. He argues that price levels are high but inflation is trending downward, with expectations of deflation. He warns against mistaking high prices for ongoing inflation.

  • 00:10:00 - 00:15:00

    Hunter suggests that gold may perform well even in deflationary environments due to its lack of counterparty risk. He predicts a short recession followed by a significant inflation spike, indicating that the economic downturn will be less severe than in 2008 but fraught with risks due to current global debt levels.

  • 00:15:00 - 00:20:00

    Hunter foresees a massive market melt-up prior to a major downturn, predicting significant increases in indices like the S&P 500 and Nasdaq. He expects this excitement and speculation to lead to high market valuations before a subsequent decline in the economy.

  • 00:20:00 - 00:25:00

    The speaker integrates thoughts on the bond market, expecting the 10-year yield to rise to about 4.5% before rolling over to 2.5%. Hunter discusses the implications of this bond market trend for the value of the dollar and the broader treasury market amidst global demand volatility.

  • 00:25:00 - 00:30:00

    Hunter expresses concern over a potential crash larger than that of 2008, attributing it to high global debt and the economic fragility stemming from the pandemic. He believes any downturn will be amplified by central banks' cautious responses to the crisis.

  • 00:30:00 - 00:35:00

    The speaker details the Federal Reserve's intervention during economic turmoil, predicting substantial growth in the Fed's balance sheet and intervention strategies. This, in turn, will influence the demand for the US dollar as the world reserve currency and the treasuries market.

  • 00:35:00 - 00:40:00

    In discussing the deflationary bust and subsequent commodity boom, the speaker predicts dramatic price increases for commodities, emphasizing opportunities for investment. He details strategies for asset allocation prior to the anticipated surge in commodity prices.

  • 00:40:00 - 00:47:33

    Finally, despite the potential for significant downturns, the speaker identifies optimism in the market, particularly focusing on commodities, industrials, and commodities-oriented investments post-bust as potential growth areas while cautioning against complacency in traditional index investments.

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Video Domande e Risposte

  • What market conditions does David Hunter anticipate?

    David Hunter anticipates a deflationary bust followed by a significant inflation spike.

  • Which sectors does Hunter recommend investing in?

    Hunter recommends investing in commodities and energy stocks as they could significantly outperform during inflation.

  • What does Hunter predict for interest rates?

    Hunter predicts a rise in interest rates to around 4.5%, followed by a sharp decline to as low as 2.5%.

  • How does Hunter view gold in market cycles?

    He believes gold performs well in both deflationary and inflationary environments.

  • What is Hunter's outlook on the economy?

    He sees the economy as fragile and expects it to slow down, potentially indicating a recession.

  • What does Hunter suggest for treasury bonds during a bust?

    He believes treasury bonds will be king, as there will be high demand amidst economic turmoil.

  • What is Hunter's long-term gold price target?

    Hunter targets gold prices at $20,000 in the early next decade.

  • How does Hunter predict market sentiment will change?

    He expects extreme bullish sentiment before a downturn as optimism increases among investors.

  • What risks does Hunter identify for assets like real estate?

    Hunter warns that real estate could drop significantly as interest rates rise.

  • What does Hunter see as a major opportunity for investors?

    He highlights that commodities will be in high demand due to reshoring and inflation.

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Scorrimento automatico:
  • 00:00:00
    indexes are going to get hammered
  • 00:00:02
    because of interest rates um in the next
  • 00:00:04
    cycle when rates go up p multiples go
  • 00:00:07
    down so the the broad indexes are not
  • 00:00:09
    going to do well in that environment you
  • 00:00:11
    will want to be in stocks that can
  • 00:00:12
    outpace inflation and that's the biggest
  • 00:00:15
    sector for that is commodities energy
  • 00:00:18
    stocks could go up 10fold who knows i
  • 00:00:21
    mean if oil goes from 30 to 500 there's
  • 00:00:24
    going to be a lot of money made in the
  • 00:00:25
    uh fossil fuel industry if gold goes to
  • 00:00:29
    20,000 even a gold mining company is
  • 00:00:31
    going to be able to produce results with
  • 00:00:33
    that when you get the kind of moves you
  • 00:00:35
    get in in the metals even even poor
  • 00:00:38
    managements can make
  • 00:00:42
    [Music]
  • 00:00:49
    money this is little by little with andy
  • 00:00:53
    sheman good morning everyone and welcome
  • 00:00:55
    back into another episode a little by
  • 00:00:57
    little i'm honored to have with me david
  • 00:00:59
    hunter the chief market strategist at
  • 00:01:01
    contrarian macro advisors david thank
  • 00:01:04
    you for jumping in with me today it's
  • 00:01:06
    nice to see you yeah thanks andy great
  • 00:01:08
    to see you likewise likewise uh i uh
  • 00:01:12
    will jump right in and and get started
  • 00:01:14
    in respect for your time these these
  • 00:01:17
    discussions largely cuz i seem to go on
  • 00:01:20
    and on uh i like the conversation
  • 00:01:23
    um seem to go longer than i anticipate
  • 00:01:26
    so we'll jump right in you know uh i
  • 00:01:28
    there are a lot of people who have
  • 00:01:30
    differing opinions on inflation um i've
  • 00:01:35
    done interviews recently where some
  • 00:01:37
    people say inflation is under control
  • 00:01:40
    and others say it's just getting started
  • 00:01:44
    you've said inflation is largely under
  • 00:01:47
    control now or you anticipate it
  • 00:01:49
    starting to trend downward
  • 00:01:52
    but in alternative measures like like my
  • 00:01:55
    good buddy john williams of shadow stats
  • 00:01:57
    says it's still running much higher
  • 00:02:00
    closer to 9% how do you reconcile that
  • 00:02:03
    difference and how do you think the
  • 00:02:04
    official numbers are missing something
  • 00:02:06
    important
  • 00:02:08
    yeah i don't know uh how how shadow
  • 00:02:12
    stats is is coming up with that number
  • 00:02:14
    but clearly obviously there are you know
  • 00:02:17
    you can look at everyday prices and and
  • 00:02:20
    you know in some respects question
  • 00:02:22
    whether inflation's coming down but i
  • 00:02:25
    think
  • 00:02:26
    ultimately um using any of the official
  • 00:02:29
    numbers using even true inflation um the
  • 00:02:32
    signs are there that we're still in a
  • 00:02:34
    downtrend we've been downtrending you
  • 00:02:36
    know for two years um and i continue to
  • 00:02:40
    expect that trend to continue um i think
  • 00:02:44
    a lot of it is people and and not
  • 00:02:47
    certainly not shadow stats but but there
  • 00:02:50
    are lots of people out there that
  • 00:02:52
    mistake price levels with inflation you
  • 00:02:56
    know price levels are high they're not
  • 00:02:58
    coming they're not going to you know go
  • 00:03:00
    down a lot but actually the you know the
  • 00:03:03
    numbers i i believe the numbers and the
  • 00:03:06
    numbers are showing that we you know we
  • 00:03:08
    came down a lot from you know eight or
  • 00:03:11
    9% down to uh 3% a little below three
  • 00:03:16
    and kind of stalled at a plateau there
  • 00:03:19
    um and and people started worrying about
  • 00:03:22
    you know the one you know the the
  • 00:03:24
    onetenth tickups over you know monthto
  • 00:03:27
    month over the last few months people
  • 00:03:30
    take that as if oh my god inflation is
  • 00:03:32
    breaking out again uh you know these
  • 00:03:34
    things are not straight lines they're
  • 00:03:36
    not linear type things and as far as i
  • 00:03:39
    can see the economy is still soft you
  • 00:03:42
    know we have a have and have not economy
  • 00:03:45
    the you know the have part of the
  • 00:03:47
    economy is doing fine but there's a big
  • 00:03:49
    chunk that's a have not part of the
  • 00:03:51
    economy that's just getting by and i
  • 00:03:53
    think we're going to continue to see the
  • 00:03:55
    economy slow um i just and the other
  • 00:03:58
    thing that's out there that i think
  • 00:04:00
    people are um certainly the fed is
  • 00:04:02
    concerned about and lots of investors
  • 00:04:04
    are concerned about is tariffs and i
  • 00:04:08
    think people misunderstand tariffs in
  • 00:04:10
    terms of how they impact inflation you
  • 00:04:13
    know they are kind of a one-time or
  • 00:04:16
    oneoff bump up in inflation but in terms
  • 00:04:19
    of the trend they will cause a slowdown
  • 00:04:22
    if anything in in demand and ultimately
  • 00:04:26
    will will kind of bring that inflation
  • 00:04:30
    back down again so so i i think this
  • 00:04:33
    idea that because tariffs raise prices
  • 00:04:36
    um that's inflationary it's a it's a
  • 00:04:39
    one-off and it's not a it doesn't add to
  • 00:04:42
    the trend um so all in all i i'm
  • 00:04:45
    actually out there saying that we're
  • 00:04:47
    headed we're we're still in a downtrend
  • 00:04:50
    in inflation but more importantly we're
  • 00:04:52
    headed for deflation
  • 00:04:54
    yeah that's that's interesting and um
  • 00:04:57
    always always think of of of gold in
  • 00:05:00
    that respect most people think gold is
  • 00:05:02
    only for inflation but there are guys
  • 00:05:04
    like roy jastramm who have surmised that
  • 00:05:08
    actually gold performs best in a
  • 00:05:10
    deflationary environment
  • 00:05:12
    um in a in in the context that it has no
  • 00:05:16
    counterparty risk in in a period of of
  • 00:05:19
    um more difficulty in in servicing debt
  • 00:05:23
    and and i guess it will it will be
  • 00:05:25
    interesting to see how how that all
  • 00:05:27
    plays out um i've always wondered how
  • 00:05:30
    the inflation deflation debate
  • 00:05:32
    ultimately plays out but i respect your
  • 00:05:34
    opinion for sure yeah i don't i don't
  • 00:05:36
    actually think deflation is going to
  • 00:05:37
    last all that long you know as you know
  • 00:05:40
    i'm sure i'm calling for a global bust
  • 00:05:43
    um i define a bust as something that
  • 00:05:45
    feels like a depression but it's in the
  • 00:05:47
    time frame of a recession so you know it
  • 00:05:50
    might be 12 to 18 months um halfway
  • 00:05:53
    through it you might actually see
  • 00:05:55
    deflation you know um across the board
  • 00:05:58
    not not just in assets not just in
  • 00:06:01
    commodities but you know actual our
  • 00:06:04
    inflation numbers our our index is
  • 00:06:06
    showing some deflation but it's you know
  • 00:06:08
    it's not going to last very long it's
  • 00:06:10
    not a depression type deflation um so um
  • 00:06:15
    and and i do think the medals will
  • 00:06:18
    probably get hit we can talk about this
  • 00:06:19
    later but i think the metals get hit in
  • 00:06:21
    the bus for sure um so i'm not sure
  • 00:06:24
    they're going to really um be much of a
  • 00:06:26
    a hedge against the bust or the
  • 00:06:29
    deflation whatever you want to uh focus
  • 00:06:31
    on there um but um you know i do
  • 00:06:36
    understand yeah they they will hold up
  • 00:06:37
    better than equities for example um and
  • 00:06:41
    be some sort of a hedge um but i i still
  • 00:06:44
    think most assets in this bust are going
  • 00:06:46
    to get hit
  • 00:06:48
    yeah i'm i'm going to get to the bust i
  • 00:06:51
    i know that you have done a little bit
  • 00:06:52
    of digging and watching of your videos
  • 00:06:54
    of course and um as i follow you
  • 00:06:57
    regularly and and you you talk about
  • 00:07:01
    this this massive deflationary bust
  • 00:07:05
    followed by a big inflation spike
  • 00:07:08
    um but you also predicted a mar a
  • 00:07:11
    massive market meltup with the s&p
  • 00:07:14
    possibly hitting as high as 7,500 the
  • 00:07:16
    nasdaq
  • 00:07:17
    25,000 the dow jones 55,000 i believe
  • 00:07:21
    you expect this first if not if i'm not
  • 00:07:23
    mistaken and this is driven by investor
  • 00:07:26
    excitement and
  • 00:07:28
    speculation what makes you confident
  • 00:07:30
    we're going to see that kind of move
  • 00:07:31
    first yeah so so i was calling for that
  • 00:07:35
    going back to the you know prior to the
  • 00:07:38
    bottom in october of 22 so i was talking
  • 00:07:41
    about i think initially my target was
  • 00:07:43
    6,000 back then i raised it to7,000 the
  • 00:07:47
    beginning of last year and raised it to
  • 00:07:50
    7,500 um several months ago and so we've
  • 00:07:55
    the hard part's been done you know as
  • 00:07:57
    you know back in october 2022 most
  • 00:07:59
    people thought we were heading south of
  • 00:08:01
    3,000 and i was very bullish in saying
  • 00:08:03
    no i think you know people are way too
  • 00:08:06
    bearish and the sentiment's way too
  • 00:08:08
    negative um you know and and called for
  • 00:08:11
    that big rise so the hard part of going
  • 00:08:15
    from 3500 to to 6,000 has already
  • 00:08:19
    happened i think the the final what i
  • 00:08:21
    call the final leg of a
  • 00:08:23
    43-year what i had called a 42 now
  • 00:08:26
    turning into a 43year secular bull
  • 00:08:29
    market that started in august of uh
  • 00:08:32
    1982 um i think that final leg's going
  • 00:08:35
    to go parabolic so that's really the the
  • 00:08:38
    case i'm making is that i think we just
  • 00:08:40
    finished um a consolidation here um you
  • 00:08:44
    know gapped up yesterday
  • 00:08:47
    you know whether we fill that gap or not
  • 00:08:49
    i think the lows of um you know the week
  • 00:08:53
    before last are probably in for this
  • 00:08:57
    consolidation and i think you're going
  • 00:08:59
    to be off to the races here in the next
  • 00:09:02
    uh month two and three so you could
  • 00:09:04
    cover uh as crazy as it sounds you could
  • 00:09:07
    cover that ground from you know wherever
  • 00:09:11
    we are now 50 uh
  • 00:09:14
    5700 up to 7500 you could cover that in
  • 00:09:17
    a few months um don't know if it'll go
  • 00:09:20
    that fast but that's what a parabolic is
  • 00:09:22
    is all about is covering a lot of ground
  • 00:09:25
    in a hurry um it's again it's exciting
  • 00:09:29
    but it's also the last stage of a very
  • 00:09:32
    long bull market and what comes on the
  • 00:09:34
    other side of that is what what people
  • 00:09:36
    really need to um understand right and
  • 00:09:39
    i'm going to get to that that's the
  • 00:09:42
    scary part i think part of your thinking
  • 00:09:45
    also kind of coincides with what you
  • 00:09:48
    believe the bond market has to say about
  • 00:09:52
    all of this and and i found it
  • 00:09:54
    interesting one of the things that that
  • 00:09:56
    i really wonder how it would play out at
  • 00:09:58
    least in terms of the value of the
  • 00:10:00
    dollar and the demand for the treasury
  • 00:10:02
    market is your belief that the 10-year
  • 00:10:06
    yield curve could rise to about 4 and
  • 00:10:08
    a.5% and i looked this morning i think
  • 00:10:11
    we were about
  • 00:10:13
    4.3% or real close to 4.3 on the 10ear
  • 00:10:18
    but you think that this will roll over
  • 00:10:19
    to as low as 2.5% that's a massive drop
  • 00:10:23
    i'm assuming this is what in uh
  • 00:10:26
    accelerates this market melt up first so
  • 00:10:30
    what's the timeline you you see for that
  • 00:10:33
    huge drop in the 10-year
  • 00:10:35
    yield but my question david would be
  • 00:10:39
    what impact do you think that has on the
  • 00:10:41
    dollar and and in particular the broader
  • 00:10:44
    treasury
  • 00:10:45
    market which due to weaponization and
  • 00:10:48
    and volatility has had a hard time
  • 00:10:50
    attracting demand globally how does this
  • 00:10:53
    all play out in your mind yeah so so
  • 00:10:56
    just to start it off um yeah i've been
  • 00:10:58
    talking about in the last couple weeks
  • 00:11:01
    probably the last two or three weeks
  • 00:11:03
    there's a there's a short-term head and
  • 00:11:05
    shoulder top in rates um you know up on
  • 00:11:08
    the tenure up around there's a gap at
  • 00:11:10
    440 and the right shoulder goes up to
  • 00:11:12
    450 so somewhere i've been saying
  • 00:11:15
    between 440 and 450 looks like a kind of
  • 00:11:18
    a likely place where this thing would
  • 00:11:20
    roll back over um you know as you know
  • 00:11:22
    we got down under 420 and and i had a
  • 00:11:25
    lot of people saying "i guess i guess
  • 00:11:27
    that call's wrong." i said "just it
  • 00:11:30
    doesn't look like it's finished yet give
  • 00:11:31
    it time." it did get up to i think 436
  • 00:11:35
    maybe 7 this morning and so you know
  • 00:11:38
    you're within a few basis points of that
  • 00:11:40
    gap whether it fills it or not it could
  • 00:11:43
    it could roll over here and everybody's
  • 00:11:45
    sitting waiting for that so i'm you know
  • 00:11:48
    i'm not worried about whether the last
  • 00:11:50
    10 base points happens or not um the
  • 00:11:53
    bigger story is exactly what you said i
  • 00:11:55
    think we are going to see through the
  • 00:11:58
    spring and into the summer a decline
  • 00:12:00
    that will take us down to 3% and below
  • 00:12:04
    um i think 2 and a half looks like a
  • 00:12:06
    pretty good target um and that will come
  • 00:12:10
    i believe with the reality that the
  • 00:12:14
    economy is is if not in recession pretty
  • 00:12:17
    darn close that inflation is coming down
  • 00:12:20
    uh and probably going to be at the fed's
  • 00:12:23
    target this this spring or by june um
  • 00:12:27
    and that um you know the fed's going to
  • 00:12:31
    be back on the ease side so i'm i'm not
  • 00:12:34
    one of those that gets caught up in the
  • 00:12:36
    month to month or meeting to meeting
  • 00:12:38
    what's the fed going to do today what's
  • 00:12:40
    the you know what what did the fed say
  • 00:12:43
    today about the future as you well know
  • 00:12:46
    being a longtime follower um of of the
  • 00:12:49
    fed and the economy you know you're not
  • 00:12:53
    going to make a lot of money using the
  • 00:12:55
    fed's prognosis of what's coming right
  • 00:12:58
    the there one meeting they can say we're
  • 00:13:01
    we think we're not going to be cutting
  • 00:13:03
    rates for the next you know the balance
  • 00:13:05
    of the year and the next meeting they
  • 00:13:08
    might be saying we think we're going to
  • 00:13:09
    have three cuts so you know people act
  • 00:13:12
    like those things are cast in concrete
  • 00:13:15
    and that they're actually good forecasts
  • 00:13:17
    they're not they're they're just like
  • 00:13:19
    the market they're a point in time
  • 00:13:21
    reflection of what the thinking is at
  • 00:13:23
    that point of course i'm a contrarian
  • 00:13:26
    and and those guys are pretty consensus
  • 00:13:28
    uh there's a lot of times where i'm
  • 00:13:30
    going to be completely in disagreement
  • 00:13:31
    and i i've been a big defender of powell
  • 00:13:34
    i think he's managed what their what
  • 00:13:37
    their mandate is he's managed very well
  • 00:13:40
    these last couple years if he did what
  • 00:13:43
    um maybe i thought or what the street
  • 00:13:46
    thought uh many of those times we'd be
  • 00:13:49
    in a different place he you know he gets
  • 00:13:51
    a lot of criticism but frankly he's been
  • 00:13:54
    more right than anybody in terms of kind
  • 00:13:56
    of trying to walk that line between you
  • 00:13:59
    know easing and not easing too much and
  • 00:14:02
    between you know making sure that we
  • 00:14:04
    bring inflation down but without causing
  • 00:14:06
    a recession now i have problem with what
  • 00:14:09
    i think's coming and that the fed will
  • 00:14:11
    be part of the the error that causes
  • 00:14:13
    that but up till now i don't know how
  • 00:14:15
    you can be critical of what he's done
  • 00:14:19
    well i think you know there there's
  • 00:14:21
    always there's always room for critique
  • 00:14:24
    and there's always differing opinions
  • 00:14:26
    that's one of the reasons i like having
  • 00:14:27
    this show and there's so many different
  • 00:14:30
    opinions and and i think we all need to
  • 00:14:32
    to listen to to both sides in order to
  • 00:14:35
    you know to formulate the correct um
  • 00:14:37
    answer and it's tough it's tough in this
  • 00:14:40
    environment the fed has has you know
  • 00:14:43
    really somewhat of a very difficult
  • 00:14:45
    mandate between inflation and and a
  • 00:14:49
    softening economy and how to walk that
  • 00:14:50
    line i agree
  • 00:14:53
    um you have said to your point that
  • 00:14:58
    you're afraid of what you see coming and
  • 00:15:01
    and in listening to some of your videos
  • 00:15:03
    i've noticed that you said you believe
  • 00:15:06
    we'll see a crash even bigger than 2008
  • 00:15:09
    after this big market run um what makes
  • 00:15:14
    you think we're headed for that kind of
  • 00:15:15
    nose dive and how do you see it playing
  • 00:15:18
    out and then i guess i'd also want to
  • 00:15:20
    know you know you see this big runup is
  • 00:15:23
    this big runup a very very short-term
  • 00:15:26
    phenomenon or how long of how long
  • 00:15:29
    before you see the the tide really
  • 00:15:32
    turn in favor of this big deflationary
  • 00:15:35
    bust yeah so i again i think we could be
  • 00:15:39
    in recession as we speak um maybe not uh
  • 00:15:44
    we'll only know after the fact you know
  • 00:15:46
    as you know the uh uh nber goes back
  • 00:15:50
    after recession is over and and dates it
  • 00:15:54
    so lots of times i can remember through
  • 00:15:56
    my 51-year career how many cycles we
  • 00:16:00
    thought the recession started here and
  • 00:16:02
    it started many months before that so um
  • 00:16:06
    you know it's hard to know whether we're
  • 00:16:07
    in recession now or not but we clearly
  • 00:16:10
    are seeing signs that a good chunk of
  • 00:16:13
    the economy is slowing down um and
  • 00:16:16
    whether it starts now or starts by
  • 00:16:18
    summer i think we're heading for a
  • 00:16:19
    recession and then the recession then
  • 00:16:22
    morphs into a bust simply because at
  • 00:16:25
    least my my thesis is um we have 320
  • 00:16:30
    trillion in global debt um we have um a
  • 00:16:37
    pandemic that caused even though we're
  • 00:16:40
    looking you know everybody's kind of
  • 00:16:41
    forgotten about it and the economy looks
  • 00:16:43
    pretty solid under the surface that
  • 00:16:46
    pandemic did a lot of damage so there's
  • 00:16:48
    in particularly in small business and
  • 00:16:51
    place like that but we're we're in a
  • 00:16:53
    different world today and certainly in
  • 00:16:55
    this this country we're a different
  • 00:16:57
    place in terms of employment you know
  • 00:17:01
    these little you know uh small mom and
  • 00:17:03
    pop places have trouble finding people
  • 00:17:05
    to work for them i don't know what
  • 00:17:07
    happened to the kids but you know i'm
  • 00:17:10
    sure you did when i was a kid we we got
  • 00:17:12
    part-time jobs you know and now i saw
  • 00:17:16
    i've seen dry cleaners close and you
  • 00:17:18
    know other places close because they
  • 00:17:21
    can't find help i mean it's uh and
  • 00:17:24
    that's all since the pandemic i don't
  • 00:17:25
    know whether um people got out of the
  • 00:17:29
    habit of of sending their kids out to
  • 00:17:31
    find a job or what but um you know it's
  • 00:17:34
    kind of an off uh you know off
  • 00:17:37
    conversation thing but but i do think
  • 00:17:39
    under the surf under the surface there's
  • 00:17:42
    a very fragile economy and we we look at
  • 00:17:46
    the statistics you and i and people in
  • 00:17:48
    our business we look at the statistics
  • 00:17:51
    and things look sound but really there's
  • 00:17:55
    you know it is part of that have and
  • 00:17:56
    have not economy story there is a lot of
  • 00:17:59
    fragility in the system so i think this
  • 00:18:02
    time when we roll over um it's more
  • 00:18:05
    fragile than in 20089 and then you add
  • 00:18:08
    to that the fact that we're off the
  • 00:18:11
    rails in terms of comparison to 20089 in
  • 00:18:14
    terms of debt whether it be sovereign
  • 00:18:17
    debt or whether it be private debt the
  • 00:18:19
    leverage in the system is big and i
  • 00:18:22
    learned in business school long ago
  • 00:18:24
    leverage works to your benefit on the
  • 00:18:27
    way up but boy does it hurt you on the
  • 00:18:29
    way down so you know pretty simple
  • 00:18:32
    thesis but that's that's what i think
  • 00:18:34
    can cause a normal recession here to
  • 00:18:38
    turn into something worse and then i add
  • 00:18:40
    to that i kind of put out a formula i go
  • 00:18:42
    it's it's um massive leverage plus
  • 00:18:46
    economic fragility caused by the
  • 00:18:49
    pandemic plus um central bank error
  • 00:18:52
    because keep in mind this is a global
  • 00:18:54
    bus not just us and i think um we see it
  • 00:18:58
    in conversation we see it in comments
  • 00:19:00
    from from powell we see it from lagarde
  • 00:19:04
    um they are promising us they will not
  • 00:19:07
    go back to what they did after in
  • 00:19:10
    response to 20089 9 so you're on the
  • 00:19:13
    verge of what i think with that leverage
  • 00:19:16
    is going to be pretty nasty and starting
  • 00:19:18
    to roll and you're going to have these
  • 00:19:20
    guys hesitant to provide the liquidity
  • 00:19:23
    needed to stop it short of something
  • 00:19:26
    disastrous so they're gonna they're
  • 00:19:29
    gonna ultimately have to do it that the
  • 00:19:32
    but that hesitation that period of time
  • 00:19:34
    while they're um it's not that they're
  • 00:19:36
    not going to ease and they're not going
  • 00:19:38
    to be putting key into the system but
  • 00:19:41
    they're going to be doing it in measured
  • 00:19:43
    uh ways rather than in the massive ways
  • 00:19:46
    that they should be doing it to stop a
  • 00:19:48
    freef fall so it's going to take them
  • 00:19:50
    and and in this kind of a freef fall as
  • 00:19:53
    we saw in 2020 and 2008 once things
  • 00:19:58
    start going south they can go south in
  • 00:20:00
    just a matter of months you know in a
  • 00:20:02
    couple months so so a hesitation of two
  • 00:20:04
    or three months or even weeks can make a
  • 00:20:07
    big difference on how deep things can go
  • 00:20:10
    you know i'm going to ask you
  • 00:20:12
    about about this deflationary bust and
  • 00:20:15
    the commodity boom that you talk about
  • 00:20:17
    you you say something that makes me
  • 00:20:19
    think you know in '08 the fed's balance
  • 00:20:22
    sheet was 800 billion and and by you
  • 00:20:26
    know a year into the pandemic it was 9
  • 00:20:29
    trillion um do you think that we
  • 00:20:33
    actually see that type of of fed
  • 00:20:36
    intervention before this is all said and
  • 00:20:38
    done and if so what does that do once
  • 00:20:41
    again for the demand for the us dollar
  • 00:20:44
    as the world reserve currency and more
  • 00:20:46
    importantly the demand or lack thereof
  • 00:20:49
    for the us treasury um i'd be curious to
  • 00:20:53
    your thoughts before we jump into the
  • 00:20:55
    major commodity boom that you see on the
  • 00:20:57
    horizon yeah so so um basically the um
  • 00:21:04
    response that has to come again i i call
  • 00:21:08
    it it's a matter of timing you know it's
  • 00:21:10
    not whether they will do it or not if
  • 00:21:12
    they're faced with a freef falling um
  • 00:21:15
    system you know this and again it's
  • 00:21:17
    global so if the banking system around
  • 00:21:18
    the world is free falling they can't
  • 00:21:21
    fight it for very long they're not going
  • 00:21:22
    to sit there and say "well we promised
  • 00:21:25
    we wouldn't go back and do qe like we
  • 00:21:27
    did in the past." they're going to be
  • 00:21:29
    deer in headlights scared saying "we got
  • 00:21:32
    to do something right?" so so we did 5
  • 00:21:35
    trillion in response to the pandemic and
  • 00:21:38
    you're right we were at 875 billion
  • 00:21:40
    going into the financial crisis in
  • 00:21:43
    october of of
  • 00:21:45
    um 2008 so i mean it's massive we went
  • 00:21:49
    from that to 9 trillion now we're down
  • 00:21:52
    maybe the seven um or slightly below um
  • 00:21:56
    my estimate is that the response and
  • 00:21:59
    again this is total seat of the pants um
  • 00:22:01
    guesswork but i would not be surprised
  • 00:22:04
    to see our the fed's balance sheet grow
  • 00:22:06
    from from where it is now to 30 trillion
  • 00:22:10
    so over 20 trillion i'm and i have to i
  • 00:22:13
    always say this on twitter when people
  • 00:22:15
    start beating me up on it and i'll go
  • 00:22:17
    i'm not endorsing this i'm telling you
  • 00:22:19
    it's inevitable i'm telling you if i'm
  • 00:22:21
    right about the bust um and and we will
  • 00:22:25
    see proportionally every central bank
  • 00:22:26
    doing the same thing so there's part of
  • 00:22:28
    the answer to your question about the
  • 00:22:30
    dollar is that it's we're not doing it
  • 00:22:33
    in isolation uh we're the biggest so
  • 00:22:36
    ours are our numbers are going to be so
  • 00:22:37
    much bigger but in it's going to be
  • 00:22:40
    everybody's going to be you know
  • 00:22:42
    throwing currency into the system at
  • 00:22:44
    huge rates um i believe you know i have
  • 00:22:48
    a a forecast on the dollar of 82 for
  • 00:22:53
    this
  • 00:22:54
    year so uh part of most of that i think
  • 00:22:58
    comes before the bust but part of you
  • 00:23:01
    know the first part of the bust i think
  • 00:23:03
    the dollar can continue to go down
  • 00:23:05
    because they'll be easing they'll be
  • 00:23:07
    doing things i think later on the dollar
  • 00:23:10
    gets a bid again because as it always
  • 00:23:12
    does in crisis the world runs to the
  • 00:23:15
    dollar as the flight to safety trade so
  • 00:23:19
    so you can go down from you know 103 and
  • 00:23:22
    change to 82 and then by you know by the
  • 00:23:26
    end of the bus be back up to or early
  • 00:23:29
    after the bus be back up to 120 um i
  • 00:23:32
    think we're going to see volatility in
  • 00:23:34
    currencies like we have never seen
  • 00:23:37
    yeah i wonder i wonder if if one of
  • 00:23:40
    these days the dollar loses that safe
  • 00:23:42
    haven bid because of all of this reminds
  • 00:23:45
    me of of the wisdom of understanding the
  • 00:23:48
    cantalon effect uh if what we if what
  • 00:23:51
    you say is true people would would uh do
  • 00:23:54
    themselves a service by understanding
  • 00:23:56
    the theory of the cantalon effect that
  • 00:23:59
    that is he is closest to the money
  • 00:24:01
    printer wins it's about having assets
  • 00:24:03
    and uh uh in an inflationary environment
  • 00:24:07
    not holding currency but holding assets
  • 00:24:09
    doing the best you can to to acquire
  • 00:24:11
    assets leading up to that certainly
  • 00:24:14
    would uh be beneficial um you've said
  • 00:24:18
    that we see a deflationary bust followed
  • 00:24:21
    by a big inflation
  • 00:24:23
    spike with inflation hitting as much as
  • 00:24:26
    25% and active you see the fed's balance
  • 00:24:29
    sheet get as high as as you just
  • 00:24:30
    mentioned 30 trillion yeah 25% may be
  • 00:24:34
    conservative um and this is the cantalon
  • 00:24:36
    effect at work um this comes with the
  • 00:24:40
    major commodity boom again assets um
  • 00:24:43
    real things um you see oil at 500 a
  • 00:24:46
    barrel uh you see gold at
  • 00:24:49
    $20,000 an ounce and silver as high as
  • 00:24:52
    500 now as someone who owns a gold
  • 00:24:54
    company i am not complaining about those
  • 00:24:56
    numbers certainly uh i wonder what the
  • 00:24:59
    world would look like at uh at those
  • 00:25:02
    levels certainly what a mcdonald's
  • 00:25:04
    hamburger may cost anyways um can you
  • 00:25:07
    break all that down how you see that
  • 00:25:09
    playing out and again just to put a
  • 00:25:12
    little bit of timing on it uh how much
  • 00:25:14
    time do people have to start
  • 00:25:16
    accumulating those assets before this
  • 00:25:18
    major commodity boom
  • 00:25:20
    yeah so i you know i think commodities
  • 00:25:22
    will get hit in the bus so answer to
  • 00:25:24
    that last question i think there's time
  • 00:25:27
    there's going to be a run up here in
  • 00:25:28
    commodities prebust cuz you know i have
  • 00:25:31
    a target on copper of $6 and i've had
  • 00:25:34
    that target when it was down under four
  • 00:25:36
    and people thought i was crazy but you
  • 00:25:38
    know it doesn't look so crazy now and
  • 00:25:41
    it's not that far away now given the
  • 00:25:43
    moves we're seeing so um i think you'll
  • 00:25:45
    see copper at six or a little higher you
  • 00:25:48
    know i think you'll see gold at 3,400
  • 00:25:51
    and i think that's conservative now i'm
  • 00:25:53
    beginning to think that i've got to
  • 00:25:54
    raise that my silver target is and part
  • 00:25:57
    of the reason i think gold looks too low
  • 00:26:00
    i think silver is going to 75 these are
  • 00:26:03
    all pre-bust so then in the bust you
  • 00:26:06
    could have gold go back to 2100 where it
  • 00:26:09
    broke out you could have silver go back
  • 00:26:11
    to here or below uh from 75 um so and
  • 00:26:17
    oil i think will go to 30 in the bust so
  • 00:26:20
    there's going to be a time here as i say
  • 00:26:23
    people need to realize you can't don't
  • 00:26:26
    be a linear investor here and think that
  • 00:26:28
    you can buy hold and you know ride it
  • 00:26:31
    through a bus cuz these things are very
  • 00:26:34
    you know obviously very economically
  • 00:26:35
    sensitive and they'll get hit um they
  • 00:26:38
    may get hit less than the equity market
  • 00:26:40
    cuz i'm calling for an 80% bare market
  • 00:26:42
    but but they'll get hit then once that
  • 00:26:47
    massive printing press um response is in
  • 00:26:51
    the system there'll be a lag um usually
  • 00:26:55
    inflation you know cuz you're coming
  • 00:26:56
    from deflation you're not coming from
  • 00:26:58
    here so there'll be a period to get back
  • 00:27:00
    to even
  • 00:27:02
    um you know because we'll be you know we
  • 00:27:05
    markets move as you know markets move a
  • 00:27:07
    lot faster than the economy so the
  • 00:27:10
    market's going to start moving back up
  • 00:27:12
    um as a result of that money and
  • 00:27:14
    commodities going to start moving up as
  • 00:27:15
    a result of that money prior to when the
  • 00:27:18
    economy's moving back up you know maybe
  • 00:27:21
    six months before so there's not going
  • 00:27:23
    to be you're not going to be off to the
  • 00:27:24
    races and and see you know housing
  • 00:27:28
    straight back up or the economy you know
  • 00:27:31
    uh economic um u activity straight back
  • 00:27:35
    up so there's a lag to where you can
  • 00:27:37
    actually be back in inflation um it
  • 00:27:41
    might be you know because of that
  • 00:27:42
    massive money it may come faster i can
  • 00:27:45
    remember way back this probably be um
  • 00:27:49
    before maybe you were on this but there
  • 00:27:52
    there was uh a fellow named stan stanley
  • 00:27:55
    burge who was a technician with tucker
  • 00:27:58
    anthony years ago i sat with him uh at
  • 00:28:02
    lunch one time in boston and he was an
  • 00:28:04
    old ge engineer that went you know kind
  • 00:28:07
    of self-taught on technical analysis and
  • 00:28:09
    became their strategist i can remember
  • 00:28:12
    him this was back in the
  • 00:28:14
    um mid 80s um showing me charts and
  • 00:28:19
    showing me how yes there's a you know
  • 00:28:22
    maybe a six or nine month lag to when
  • 00:28:25
    money um turns into um activity you know
  • 00:28:30
    economic turn um but with inflation he
  • 00:28:33
    had it calculated at 18 months and then
  • 00:28:37
    he had long charts to show so inflation
  • 00:28:39
    doesn't just come just come roaring back
  • 00:28:41
    right back up and that's you know this
  • 00:28:44
    time we're coming out of deflation we
  • 00:28:45
    haven't seen deflation really since the
  • 00:28:47
    30s so 1930s so so um it's a little un
  • 00:28:52
    uncertain how long it will take cuz on
  • 00:28:54
    the one hand you're going to have so
  • 00:28:56
    much money in the system um and we don't
  • 00:29:00
    have the capacity it's going to satisfy
  • 00:29:01
    the demand so that could come pretty
  • 00:29:03
    quickly so it might be a year later you
  • 00:29:06
    start seeing it um or it might you know
  • 00:29:10
    if because we're coming out of deflation
  • 00:29:12
    it might take more my guess is let's say
  • 00:29:15
    the bust hits before the end of this
  • 00:29:17
    year um and let's say it's uh you know
  • 00:29:21
    12 15 month bust
  • 00:29:24
    um you're talking about the bottom of
  • 00:29:26
    the bus being the end of next year maybe
  • 00:29:29
    you know around there i would say the
  • 00:29:31
    econ the market might turn middle next
  • 00:29:34
    year um back up uh commodities same
  • 00:29:38
    thing they'll turn up probably with the
  • 00:29:40
    market um you might be in the first year
  • 00:29:44
    out of the bust you might be in 3 4%
  • 00:29:48
    inflation but you're going to quickly
  • 00:29:50
    ramp up so that by the time we're at say
  • 00:29:53
    2028 you're approaching double digit if
  • 00:29:55
    you're already in double digit and by
  • 00:29:58
    the time you get to the 2030s
  • 00:30:00
    you're you're over you know you're
  • 00:30:02
    you're on your way to 20 if not over 20%
  • 00:30:05
    um i think it's going to be a very fast
  • 00:30:08
    uh move and a lot of it is keep in mind
  • 00:30:11
    we're we're having what i call the macro
  • 00:30:15
    effect you know the massive money
  • 00:30:17
    responding to a massive uh unwind uh but
  • 00:30:22
    that's being coupled with a reshoring
  • 00:30:25
    event that's going on or reshoring cycle
  • 00:30:28
    where we're trying to bring industry
  • 00:30:30
    back here after after giving it away for
  • 00:30:33
    30 years and you know it's begun
  • 00:30:36
    obviously um we'll see semiconductors
  • 00:30:39
    we'll see steel plants we'll see auto
  • 00:30:41
    plants we'll see a lot of things
  • 00:30:44
    um all that requires commodities so
  • 00:30:48
    you're going to have this massive ramp
  • 00:30:50
    up in demand and what we've done over
  • 00:30:52
    the last 20 or 30 years um really since
  • 00:30:57
    the 80s is we've been rationing down
  • 00:31:00
    rationing rationalizing down our
  • 00:31:03
    capacity in commodities right so there's
  • 00:31:07
    no you know you can't just all of a
  • 00:31:09
    sudden say hey look at the demand we've
  • 00:31:11
    got to ramp up our commodities you've
  • 00:31:14
    brought commodity production down and
  • 00:31:17
    the capacity to produce down so that
  • 00:31:20
    when you get this massive spike in
  • 00:31:22
    demand as a result of both reshoring and
  • 00:31:27
    um um the massive money you're going to
  • 00:31:31
    have demand way outstrip supply and
  • 00:31:34
    that's why you get the price moves i'm
  • 00:31:36
    talking about it only you know it blows
  • 00:31:38
    itself it it burns itself out in uh you
  • 00:31:42
    know three or four years probably but in
  • 00:31:45
    that period it's going to be you know
  • 00:31:47
    there's going to be so much dislocation
  • 00:31:48
    it's not funny
  • 00:31:51
    if if a genie came out of the bottle you
  • 00:31:53
    go on a walk later this afternoon a
  • 00:31:54
    genie comes out of the bottle and says
  • 00:31:56
    the bust begins
  • 00:31:58
    tomorrow you know and you say you know
  • 00:32:01
    in that environment he who loses least
  • 00:32:04
    wins where do people put their money
  • 00:32:06
    tomorrow knowing that there's a bust in
  • 00:32:09
    commodities and in equities where's the
  • 00:32:11
    only safe place to be in your mind
  • 00:32:13
    during that yeah i i think and this is
  • 00:32:17
    probably counter to a lot of people who
  • 00:32:19
    are pretty negative about our our debt
  • 00:32:21
    and deficits but i believe the treasury
  • 00:32:24
    bond will be king through the bust i
  • 00:32:27
    mean basically i'm i'm not only calling
  • 00:32:30
    for a 2 and 12%
  • 00:32:32
    um yield on the 10-year this year and
  • 00:32:35
    probably by sometime this summer um but
  • 00:32:38
    i'm also saying that from there in the
  • 00:32:41
    bust you're going to see a 10ear go to
  • 00:32:43
    zero and you're going to see short rates
  • 00:32:45
    go to neg go negative and everything in
  • 00:32:48
    between will be you know zero so um you
  • 00:32:51
    know wong bond might get down to a half
  • 00:32:53
    or a quarter but what what we're talking
  • 00:32:56
    about is a yield shortage right because
  • 00:32:58
    you're going to have every central bank
  • 00:33:00
    buying every bond in sight they can't do
  • 00:33:03
    qe without doing that right so so that's
  • 00:33:06
    that's instant demand and at the same
  • 00:33:09
    time you're going to have institutions
  • 00:33:10
    saying "i have nowhere else to put my
  • 00:33:12
    money i need that government guarantee."
  • 00:33:14
    so it's going to be demand outstripping
  • 00:33:17
    supply again it's the the end of a uh a
  • 00:33:22
    bull market that started in
  • 00:33:25
    1981 when rates were 15% plus um and we
  • 00:33:31
    got down to i think 0.4 in the pandemic
  • 00:33:36
    um on the 10-year and everybody and his
  • 00:33:39
    brother has decided that that was the
  • 00:33:41
    top of the bond market right a secular
  • 00:33:44
    uh bull market i i believe there's one
  • 00:33:46
    more leg uh down in rates up in bonds um
  • 00:33:50
    that takes you below that you know in a
  • 00:33:53
    spike and then i think it's the you know
  • 00:33:56
    the end for bonds i wouldn't want to
  • 00:33:57
    look at a bond going forward from there
  • 00:33:59
    because if you're going to have 25%
  • 00:34:02
    inflation you know you don't want to own
  • 00:34:04
    bonds in that environment as i say uh
  • 00:34:07
    those that need to have fixed income in
  • 00:34:08
    their portfolio uh after the bust should
  • 00:34:12
    be rolling t- bills every 90 days or
  • 00:34:15
    every 6 months at least um you know and
  • 00:34:18
    and that should be your fixed income
  • 00:34:19
    portfolio cuz cuz it won't be fixed
  • 00:34:22
    income you'll be rolling at ever higher
  • 00:34:24
    rates you know the one thing i applaud
  • 00:34:27
    about you is uh your courage to be uh
  • 00:34:32
    unique um i haven't heard many people
  • 00:34:34
    have your take i i i see the logic in
  • 00:34:37
    all of it much of which i agree with
  • 00:34:40
    some of it i guess we'll just have to
  • 00:34:41
    see how it plays out but i appreciate
  • 00:34:44
    someone who has um an opinion and isn't
  • 00:34:47
    afraid to voice it um yeah it's it's you
  • 00:34:51
    know people can misunderstand because
  • 00:34:53
    these are i'm i'm i'm not throwing these
  • 00:34:56
    out to be hyperbolic i'm not throwing
  • 00:34:58
    them out there um because it's my
  • 00:35:01
    personality get caught up in this it's
  • 00:35:04
    really where we are in the super cycle
  • 00:35:06
    and and what we've done all these years
  • 00:35:09
    is why i think we can do this am i going
  • 00:35:11
    to be correct to the extremes that i'm
  • 00:35:14
    talking you know who knows we'll find
  • 00:35:16
    out but hey 50 years in the industry
  • 00:35:18
    gives you the right to be able to make
  • 00:35:20
    these these statements and and that's
  • 00:35:23
    that's what it's all about is listening
  • 00:35:25
    to various viewpoints taking it all in
  • 00:35:27
    and and and figuring it out yourself
  • 00:35:29
    because in many respects there's no
  • 00:35:31
    playbook for where we're at um i i
  • 00:35:33
    respect it very much and and for one um
  • 00:35:37
    uh think it's important to to listen to
  • 00:35:39
    all of this and formulate your own
  • 00:35:41
    opinion but you know i guess if you're
  • 00:35:44
    like me at all you start to wonder
  • 00:35:46
    sometimes uh at least maybe not to the
  • 00:35:49
    degree that i have i'm a little bit more
  • 00:35:52
    contrarian in a different sense of the
  • 00:35:54
    word um you know you get caught up in in
  • 00:35:57
    in this
  • 00:36:00
    um i don't even want to call it doom and
  • 00:36:02
    gloom this balance between what is
  • 00:36:04
    reality what is pessimism
  • 00:36:06
    uh or realism and um but i i try and
  • 00:36:11
    find some some glimmer of of hope and of
  • 00:36:16
    um um you know optimism so with that
  • 00:36:21
    being said let's end on a positive note
  • 00:36:23
    where do you see room for optimism in
  • 00:36:27
    the next few years what are the sectors
  • 00:36:29
    or the trends or the shifts i know
  • 00:36:30
    you've talked about all this but if
  • 00:36:32
    you're going to sum it up uh where do
  • 00:36:34
    you see the most um whether it be
  • 00:36:36
    expected or unexpected opportunities or
  • 00:36:38
    even market resilience where would you
  • 00:36:41
    tell people to focus who are trying to
  • 00:36:42
    figure out what's the best way for me an
  • 00:36:45
    average person to just you know not only
  • 00:36:48
    survive what's coming but maybe even get
  • 00:36:50
    ahead and thrive yeah i'm going to i'm
  • 00:36:52
    going to talk a step before that before
  • 00:36:54
    i get to that and just say um you know
  • 00:36:58
    even though i'm talking a bust happening
  • 00:37:00
    potentially this year by the end of you
  • 00:37:03
    know probably fourth quarter it's going
  • 00:37:04
    to happen um we are in an unusual place
  • 00:37:08
    you know i'm saying this is a top of a
  • 00:37:11
    we're nearing a top of a 43year secular
  • 00:37:14
    bull market normally i would be telling
  • 00:37:17
    people um nobody's that smart you know
  • 00:37:21
    there's the other side of the mountain
  • 00:37:22
    is what you should be concerned about so
  • 00:37:24
    you know don't try to be so don't think
  • 00:37:27
    you're so smart that you call it right
  • 00:37:28
    up to the top because you won't you'll
  • 00:37:30
    get it wrong that's almost guaranteed
  • 00:37:33
    however because so many people have
  • 00:37:35
    gotten so negative here um and and
  • 00:37:38
    really have fought this whole thing
  • 00:37:40
    since october 22 you know they've just
  • 00:37:43
    been worried about the other side of
  • 00:37:44
    this forever you've got a lot of bare
  • 00:37:47
    sentiment out there and if i'm right i'm
  • 00:37:50
    i'm calling for you know if you do the
  • 00:37:52
    numbers 35% to with the russell as much
  • 00:37:56
    as 65% between now and the top which i
  • 00:38:00
    think could be this summer that's those
  • 00:38:03
    are numbers that you normally earn in
  • 00:38:05
    two or three years if you're lucky and
  • 00:38:06
    if you got single if you got 5% interest
  • 00:38:09
    rates you normally earn that in you know
  • 00:38:12
    it takes you four years you know so so
  • 00:38:16
    it's a rare period where you can earn
  • 00:38:20
    years worth of returns in a few months
  • 00:38:23
    and if you if you say "well i'm not that
  • 00:38:25
    smart i'm going to you know i want to
  • 00:38:27
    you know i want to be safe i'm going to
  • 00:38:29
    get out now." just understand yourself
  • 00:38:32
    because
  • 00:38:33
    uh what's going to happen is the nature
  • 00:38:36
    of psychology is if you get out now and
  • 00:38:38
    miss 30 or
  • 00:38:39
    40% at the top you're going to buy into
  • 00:38:42
    all the rhetoric that's going to be out
  • 00:38:44
    there in the euphoric time you're going
  • 00:38:46
    to have at the top telling you this
  • 00:38:48
    cycle has years to go that you know the
  • 00:38:50
    fed's on board and this thing's just
  • 00:38:52
    getting started and you're going to jump
  • 00:38:54
    right back in at the top so i would just
  • 00:38:56
    caution people be a little careful cuz
  • 00:38:58
    even though i'm calling for a top in a
  • 00:39:01
    matter of months it's going to be a
  • 00:39:04
    tricky thing to get this right now to to
  • 00:39:07
    your real question which is what do you
  • 00:39:08
    do in the bust and beyond
  • 00:39:11
    um in the bus treasuries as i said you
  • 00:39:13
    know make sure if you're in the bank
  • 00:39:16
    you're in an fdic insured account
  • 00:39:19
    because the the government will have the
  • 00:39:22
    printing press and they will fund the
  • 00:39:23
    fdic to whatever they need to they're
  • 00:39:26
    also probably i can't guarantee this cuz
  • 00:39:30
    cuz we don't know but you know they they
  • 00:39:33
    had the don't break a buck on money
  • 00:39:35
    market fund back in 2008 i'm sure that
  • 00:39:38
    will come back because they're going to
  • 00:39:39
    have to pull out all stops to make sure
  • 00:39:41
    they hold this thing together i don't
  • 00:39:44
    know what they'll do with pension funds
  • 00:39:45
    because there's a lot of risk in pension
  • 00:39:47
    funds now that they've upped the ante
  • 00:39:49
    and bought all kinds of private equity
  • 00:39:52
    private equity in in the good old days
  • 00:39:55
    back in the mid 80s were known as
  • 00:39:58
    leverage buyouts so in other words
  • 00:40:00
    private equity is a lot of leverage you
  • 00:40:02
    don't want leverage in a bust um so ped
  • 00:40:05
    funds are going to get hit hard
  • 00:40:06
    endowment funds are going to get hit
  • 00:40:08
    hard because they all decided private
  • 00:40:10
    equity is safer than public equity we're
  • 00:40:12
    going to go there it isn't not in the
  • 00:40:15
    bust um so so um coming out the other
  • 00:40:20
    side of the
  • 00:40:21
    bus as i said it's going to be a huge
  • 00:40:24
    commodity cycle what got this is true of
  • 00:40:26
    every cycle every cycle has different
  • 00:40:28
    leadership this cycle was tech and
  • 00:40:31
    healthcare and um and financials maybe
  • 00:40:35
    next cycle is going to be commodities
  • 00:40:38
    and industrials the consumer is going to
  • 00:40:40
    be digging out for a long time if if my
  • 00:40:43
    scenario comes true you know they're
  • 00:40:45
    going to get hit in their housing i
  • 00:40:46
    think housing could drop 30 40% in the
  • 00:40:48
    bust um they're going to get hit in
  • 00:40:50
    their stock market uh portfolios because
  • 00:40:53
    i think you could have an 80% bare
  • 00:40:54
    market they're going to get hit you know
  • 00:40:57
    obviously they're going to be digging
  • 00:40:58
    out from losing jobs etc um so housing
  • 00:41:02
    is not inflation hedge housing you know
  • 00:41:06
    if interest rates go from you know you
  • 00:41:09
    could see a 2% mortgage during the bust
  • 00:41:12
    if it goes from 2% to
  • 00:41:15
    20% real estate value is going to go the
  • 00:41:17
    other way so people who think real
  • 00:41:20
    estate is going to be like it's been for
  • 00:41:22
    the last 40 or 50 years i don't think so
  • 00:41:25
    um so the the areas that you really want
  • 00:41:28
    to be in are going to be commodity
  • 00:41:30
    oriented things things um both companies
  • 00:41:33
    and things that can outpace inflation
  • 00:41:36
    and inflation is going to be pacing
  • 00:41:38
    pretty fast so that means precious
  • 00:41:40
    metals um where you you're right i'm
  • 00:41:43
    thinking 20,000 gold by early next
  • 00:41:46
    decade um um probably 500 silver 500 500
  • 00:41:53
    oil um you know copper will go through
  • 00:41:56
    the roof natural gas which is obviously
  • 00:41:58
    been under tremendous pressure we're
  • 00:42:01
    going to have a shortage of energy out
  • 00:42:03
    there and natural gas will finally get
  • 00:42:05
    that bid as well so you know maybe
  • 00:42:08
    you'll see $50 natural gas i don't know
  • 00:42:11
    um these are these are bearish numbers
  • 00:42:13
    because it's going to really hit
  • 00:42:15
    pocketbooks but but for a short period
  • 00:42:18
    of time of two or three or four years
  • 00:42:21
    you're you're going to be able to make a
  • 00:42:24
    lot of money if you're in those areas if
  • 00:42:26
    you play it like um you can just stay
  • 00:42:29
    with your index portfolios that have
  • 00:42:32
    done well since as i say anybody that
  • 00:42:35
    bought an sb index in the mid80s at the
  • 00:42:38
    advice of a financial advisor proved to
  • 00:42:41
    outprace most active institutional money
  • 00:42:44
    managers through this time and you can
  • 00:42:47
    sit there and say well i'm you know all
  • 00:42:48
    i had to do was just put it in an index
  • 00:42:50
    and it didn't i'm going to continue that
  • 00:42:52
    indexes are going to get hammered
  • 00:42:54
    because of interest rates um in the next
  • 00:42:57
    cycle when rates go up pe multiples go
  • 00:42:59
    down so the you know the the broad
  • 00:43:02
    indexes are not going to do well in that
  • 00:43:04
    environment um you will want to be in
  • 00:43:07
    stocks that can outpace inflation and
  • 00:43:09
    that's the biggest sector for that is
  • 00:43:13
    commodities so you know energy stocks
  • 00:43:16
    could go up 10fold who knows i mean if
  • 00:43:18
    oil goes from 30 to 500 there's going to
  • 00:43:22
    be a lot of money made in the uh fossil
  • 00:43:24
    fuel industry um if if gold goes to
  • 00:43:29
    20,000 even a gold mining company is
  • 00:43:32
    going to be able to produce results with
  • 00:43:34
    that so uh there they've struggled even
  • 00:43:38
    with gold moving as nicely as it has for
  • 00:43:40
    the last couple of years you know the
  • 00:43:42
    gold mining companies have struggled uh
  • 00:43:45
    when when you get the kind of moves you
  • 00:43:47
    get in in the medals even even poor
  • 00:43:50
    managements can make money
  • 00:43:53
    yeah i've seen it i've seen it in my
  • 00:43:55
    career no question about it david you're
  • 00:43:57
    you're awesome i appreciate your fresh
  • 00:44:01
    perspective on things i definitely want
  • 00:44:03
    to have you back um and see how this all
  • 00:44:05
    plays out uh you're talking things start
  • 00:44:08
    to unfold here by by summer so there'll
  • 00:44:11
    be lots to to come back and chat about
  • 00:44:14
    um what's the best way for people to
  • 00:44:16
    find out more about what you're doing of
  • 00:44:19
    course we'll make links and references
  • 00:44:21
    to the b at the bottom of this but what
  • 00:44:23
    is the best way for people to keep on
  • 00:44:25
    top of uh your your analysis yeah
  • 00:44:28
    there's two ways i i'm on twitter every
  • 00:44:30
    day or on x every day um and so my my
  • 00:44:34
    handle there is
  • 00:44:36
    daveh contrary in so make sure it's
  • 00:44:40
    daveh um you know i haven't seen it so
  • 00:44:43
    much lately uh maybe the blue check
  • 00:44:45
    helps i don't know but um it used to be
  • 00:44:48
    that lots of people would try to you
  • 00:44:50
    know you you had these fraudulent
  • 00:44:51
    accounts that would just change a letter
  • 00:44:53
    in contrarian or whatever and use your
  • 00:44:56
    profile and your profile picture and
  • 00:44:58
    makes it look like you i've got um
  • 00:45:01
    214,000 followers um so most of those
  • 00:45:05
    fake accounts are lucky if they have
  • 00:45:07
    a,000 or 2,000 followers so that's one
  • 00:45:09
    way you can judge that it's me um the
  • 00:45:13
    other thing i would tell people is i get
  • 00:45:16
    often somebody will say "i haven't seen
  • 00:45:18
    you know you finally posted something i
  • 00:45:20
    haven't seen you in months." i go "i've
  • 00:45:23
    probably posted in just in the last week
  • 00:45:25
    you know 100 or 150 posts you're miss
  • 00:45:28
    you're missing it because you're only
  • 00:45:30
    looking at original posts most of my
  • 00:45:33
    communication is through replies to
  • 00:45:35
    other people so if somebody comments or
  • 00:45:38
    asks a question i'll answer them and and
  • 00:45:41
    that's my dialogue through the day
  • 00:45:44
    occasionally i'll put in an original um
  • 00:45:46
    post but i i just found when i do that
  • 00:45:50
    it opens me up to a world where i get a
  • 00:45:52
    a zillion uh posts out there and i and i
  • 00:45:56
    tend to want to answer my post so it
  • 00:45:58
    gets so busy i can't do it so so i just
  • 00:46:01
    have kind of done the replies is how i
  • 00:46:03
    mostly communicate along with these
  • 00:46:05
    interviews um so you have to make sure
  • 00:46:08
    your settings are right so you're seeing
  • 00:46:10
    replies not just original posts and then
  • 00:46:13
    the other way i communicate is i have a
  • 00:46:15
    quarterly investment letter um that is
  • 00:46:18
    by subscription so there's a cost to it
  • 00:46:21
    anybody that might be interested can uh
  • 00:46:24
    direct message me on x and i'll provide
  • 00:46:26
    you details
  • 00:46:28
    wonderful yeah that the um fake accounts
  • 00:46:32
    on x are a real pain in the butt i i i
  • 00:46:34
    seem to have to deal with that once or
  • 00:46:36
    twice a week and the process is is kind
  • 00:46:39
    of a pain in the butt to get it resolved
  • 00:46:41
    but uh nonetheless uh i i appreciate it
  • 00:46:45
    very much david you're awesome i look
  • 00:46:48
    forward to picking up where we left off
  • 00:46:50
    uh i wish you and your family nothing
  • 00:46:54
    but the best here in 2025 thank you for
  • 00:46:57
    jumping in with us here today and we'll
  • 00:46:59
    do it again real soon yeah thanks andy i
  • 00:47:01
    really appreciate it and uh we should be
  • 00:47:04
    in for some fun here in the next few
  • 00:47:05
    months yes indeed you know the old
  • 00:47:08
    saying may you live in interesting times
  • 00:47:10
    so uh right these are indeed interesting
  • 00:47:12
    so thanks for sharing your perspective
  • 00:47:14
    david it was it was very nice and
  • 00:47:16
    refreshing to hear something different
  • 00:47:18
    so uh best of luck to you look forward
  • 00:47:20
    to chatting with you again real soon
  • 00:47:22
    same to you thank you bye
  • 00:47:27
    [Music]
  • 00:47:29
    little by little with andy sheckman
Tag
  • market trends
  • deflation
  • inflation
  • commodities
  • energy stocks
  • interest rates
  • investing
  • gold
  • treasury bonds
  • economic outlook