WEBVTT - Navigate The Markets Last Leg Up Before The BIG CRASH | David Hunter 0:00:13.760 --> 0:00:17.360 Hey, everyone, welcome to another episode of the Market Disruptors Show. Today, 0:00:17.400 --> 0:00:19.520 I am sitting down with someone I'm super excited to 0:00:19.520 --> 0:00:22.720 talk to. We are sitting down with David Hunter. He 0:00:22.880 --> 0:00:27.400 is a or i should say, the contrarian macro strategist 0:00:27.680 --> 0:00:31.120 forty years on forty years plus on Wall Street. UH. 0:00:31.200 --> 0:00:34.760 He's really been known for making really bold and accurate predictions, 0:00:35.200 --> 0:00:36.879 and that's one reason why I'm excited to talk to 0:00:36.960 --> 0:00:39.360 him today. Um. But anyway, David, thank you so much 0:00:39.360 --> 0:00:44.279 for joining us. Yeah, thanks Mark, thanks for having me on. Yeah. So, um, 0:00:44.280 --> 0:00:46.519 I've been following you. I've been following a lot of 0:00:46.520 --> 0:00:49.199 your commentary, interacting with you a little bit, um, and 0:00:49.240 --> 0:00:50.839 that's why I'm excited to talk to you today. But 0:00:50.920 --> 0:00:52.640 for those that don't know who you are, they're not 0:00:52.720 --> 0:00:53.880 kind of familiar. Why do you just give us a 0:00:53.880 --> 0:00:56.280 little bit of that that background, that forty years on 0:00:56.280 --> 0:00:59.520 Wall Street and kind of what you're doing now? Okay sure, um, yeah, 0:00:59.640 --> 0:01:01.960 But my career is kind of split in half. I 0:01:02.000 --> 0:01:04.880 spent the first half of my career UM on the 0:01:04.920 --> 0:01:09.000 buy side. UH started in banks and then moved to 0:01:09.480 --> 0:01:12.840 UH tech Strong, where I ran their equity pension funds. 0:01:13.480 --> 0:01:17.240 UM had top percentile numbers there for five years running 0:01:17.240 --> 0:01:21.360 back in the early the mid eighties. UM got recruited 0:01:21.360 --> 0:01:23.720 out of there and went to Fidelity, not on the 0:01:23.800 --> 0:01:26.600 mutual fund side, but on the pension side and ran 0:01:27.680 --> 0:01:31.840 US money within global portfolios for a lot of foreign 0:01:31.880 --> 0:01:34.360 accounts for them Rolls Royce and a lot of UK 0:01:34.440 --> 0:01:39.240 accounts and UH some Australian and Japanese accounts. So UM 0:01:39.640 --> 0:01:43.200 spent a few years there and then was recruited by 0:01:43.760 --> 0:01:46.319 UM I T. T. Hartford to come in and and 0:01:46.360 --> 0:01:48.920 begin an active equity effort. They had gotten out of 0:01:48.920 --> 0:01:51.840 equities several years before and realized that they needed to 0:01:51.840 --> 0:01:54.360 get back in. So I was brought in there to 0:01:54.520 --> 0:01:57.920 kind of rebuild an equity department. UH and did that 0:01:58.080 --> 0:02:01.600 for a few years UM and that was in the 0:02:01.680 --> 0:02:05.600 late eighties to early nineties UM and then was a 0:02:05.680 --> 0:02:09.080 chief investment officer on of a billion dollars firm on 0:02:09.200 --> 0:02:13.440 Medicine Avenue, New York back in the mid nineties. UH. 0:02:13.560 --> 0:02:15.440 Second half of my career was really as a sell 0:02:15.520 --> 0:02:20.720 side strategist and that's still what I do today. Okay, great, 0:02:20.960 --> 0:02:24.600 so lots of experience, lots of big, big experience, pension 0:02:24.800 --> 0:02:29.000 pension fund institutional type experience. I love that. Now, Um, 0:02:29.040 --> 0:02:31.000 as I kind of said, as I kind of introduced 0:02:31.040 --> 0:02:34.880 you as the contrarian, I think, uh, a lot of 0:02:34.919 --> 0:02:36.880 people who are kind of paying attention, they kind of 0:02:37.040 --> 0:02:39.080 you know, they understand the old bye when there's blood 0:02:39.120 --> 0:02:41.720 in the streets and whatnot. It's a lot harder to 0:02:41.760 --> 0:02:44.960 do in theory than it is than just to recite 0:02:45.000 --> 0:02:48.240 some cliche or some some quote. But um, you really 0:02:48.280 --> 0:02:51.360 seem to be the contrarian. Um, and and you seem 0:02:51.440 --> 0:02:55.240 to hold that against whatever the mainstream is is telling us. 0:02:55.800 --> 0:02:57.440 Give me a reason why that is or how you 0:02:57.520 --> 0:03:00.560 look at the market like that. Sure, Um, yeah, there's 0:03:00.680 --> 0:03:03.160 I mean, it's it's popular today. Everybody loves to claim 0:03:03.200 --> 0:03:07.919 their contrarian But as you say, um, you know, for 0:03:08.000 --> 0:03:11.640 most people, uh, they aren't really committed to a contrary 0:03:11.680 --> 0:03:16.079 and strategy. If it goes against them, they quickly shift gears. Um. 0:03:16.120 --> 0:03:20.160 I started this business in seventy three, and you know, 0:03:20.240 --> 0:03:23.600 I think probably within the first couple of years really 0:03:23.600 --> 0:03:27.200 start seeing how um, you know, a crowd can be 0:03:27.320 --> 0:03:29.680 very wrong. Obviously in Theft fifty was kind of the 0:03:29.720 --> 0:03:33.760 extreme of crowds. Back in the nine event four. So 0:03:33.840 --> 0:03:38.280 I learned very early on my career, um that uh, 0:03:38.360 --> 0:03:42.320 you know, being contrary could pay dividends. Um. I read 0:03:42.440 --> 0:03:49.080 David Dreaman's book at that time that was um countrary investment. Uh. 0:03:49.120 --> 0:03:51.960 I can't remember the psychologist market, I think of what 0:03:52.000 --> 0:03:55.880 it was. He did many reiterations after that that changed 0:03:55.880 --> 0:03:58.720 the naime to countrary investment strategies and things like that. 0:03:58.800 --> 0:04:03.000 But um, he was kind of a well known contrarian 0:04:03.040 --> 0:04:05.640 and and his book was great. It really taught me 0:04:06.600 --> 0:04:11.200 how important psychology was to the stock market. And I 0:04:11.240 --> 0:04:14.000 was already there, but this kind of reinforced it. Uh, 0:04:14.600 --> 0:04:18.040 great read. People should go on Amazon. He's passed away 0:04:18.080 --> 0:04:21.520 by these his books are still out there. Uh. When 0:04:21.560 --> 0:04:23.719 people ask me what what books did you read? I 0:04:23.760 --> 0:04:27.359 go a lot. I'll see if they etcetera. So you 0:04:27.400 --> 0:04:30.159 know a lot of readings over the years. Um, but 0:04:30.560 --> 0:04:36.400 I usually either feature his book or a book by 0:04:37.240 --> 0:04:42.760 Charles Ellis called um uh what is it called The 0:04:43.400 --> 0:04:46.440 Loser's Game and talks about how the market is a 0:04:46.480 --> 0:04:50.400 loser's game for most people. And it's again another contrarian 0:04:50.440 --> 0:04:53.640 type approach to things. So so those kind of um 0:04:54.000 --> 0:04:57.440 set me up uh, and we're at big influences early 0:04:57.480 --> 0:05:01.880 in my career. UM. And I think by nature I'm 0:05:01.960 --> 0:05:04.280 one of those that doesn't have to be with the crowd. 0:05:04.880 --> 0:05:08.400 I've observed over my forty seven years on Wall Street 0:05:08.520 --> 0:05:12.880 that the vast majority of people really don't like being 0:05:12.920 --> 0:05:16.240 away from the crowd. They can try, but but it's 0:05:16.240 --> 0:05:20.359 hard when things really go against you, uh to stick 0:05:20.400 --> 0:05:23.040 with that. And as I say, I'm not a nat 0:05:23.080 --> 0:05:25.480 Jurek countrarian, there are times when I think it pays 0:05:25.560 --> 0:05:28.279 to be with the consensus, kind of in that middle 0:05:28.360 --> 0:05:30.919 meat part of the move. A lot of times I 0:05:31.000 --> 0:05:34.279 sound just like everybody else, but it's at the extremes, 0:05:34.320 --> 0:05:38.600 both the bullish extreme and the barrish extreme, where um, 0:05:38.680 --> 0:05:40.640 you know, if you're with the crowd, you're you're gonna 0:05:40.680 --> 0:05:45.240 get slaughtered at some point. Yeah, definitely now for everybody listening. UM. 0:05:45.279 --> 0:05:47.320 As I said in the intro, um, David is not 0:05:47.440 --> 0:05:49.800 shy about putting out kind of what he sees, kind 0:05:49.800 --> 0:05:53.240 of what he predicts, even giving levels um and so UM. 0:05:53.279 --> 0:05:56.080 At the end, I definitely want to have him go 0:05:56.200 --> 0:05:59.560 over what these levels are for the SMP index, is gold, etcetera. 0:06:00.000 --> 0:06:02.120 Gonna go over those numbers, but before we get so 0:06:02.120 --> 0:06:03.600 make sure you stick around to the end because that's 0:06:03.600 --> 0:06:04.880 what we're gonna get to you. But I want to 0:06:05.040 --> 0:06:07.800 kind of dig into what your thought processes so we 0:06:07.839 --> 0:06:09.840 can learn how you're looking at the market and maybe 0:06:09.880 --> 0:06:13.159 what we can take from that. So I'm just curious. Um, 0:06:13.279 --> 0:06:16.719 you know the difference of being the contrarian um or 0:06:17.000 --> 0:06:20.120 investing with the trend. Right, so people are told, you know, 0:06:20.160 --> 0:06:23.400 don't catch a falling knife, wait til a trend gets developed, 0:06:24.160 --> 0:06:27.760 things like that. So is it different like trend investing 0:06:27.920 --> 0:06:32.760 versus contrarian investing? Oh for sure. I am very much 0:06:32.920 --> 0:06:36.719 kind of a hybrid um. And I don't you know, 0:06:37.080 --> 0:06:40.160 there's nobody out there probably that doesn't like I do, 0:06:40.440 --> 0:06:43.120 or quite like I do. I've just developed over the 0:06:43.200 --> 0:06:46.760 years of style. Um And as I tell people, because 0:06:46.800 --> 0:06:49.960 people on Twitter, as you see, will say, how you know, 0:06:50.000 --> 0:06:51.400 I want to learn from you. I want to learn 0:06:51.440 --> 0:06:53.680 how do you do it? I go, there's no real 0:06:53.720 --> 0:06:56.520 methodology to what do I do? So I'm gont those feels. 0:06:56.520 --> 0:06:59.120 Some of it is, as I say, kind of my 0:06:59.160 --> 0:07:03.279 shorthand as I look at fundamentals, I look at technicals. Um, 0:07:03.320 --> 0:07:06.320 I do macro analysis and rely a lot on forty 0:07:06.360 --> 0:07:11.840 seven years of macro background. Um, and look at sentiment, uh, 0:07:11.880 --> 0:07:15.320 and then put it all together and you know, come 0:07:15.400 --> 0:07:18.600 up with my conclusions and um. There are times when 0:07:18.640 --> 0:07:22.160 I'm out of favor, and you know I was, you know, 0:07:22.320 --> 0:07:25.760 I was bullish on gold. Um, you know, three or 0:07:25.760 --> 0:07:28.920 four or five years ago because we had come down 0:07:28.960 --> 0:07:33.200 from twenty eleven and I thought, you know, in seen, 0:07:33.280 --> 0:07:36.600 you were beginning to start the next leg. Well, it's 0:07:36.880 --> 0:07:38.880 had a nice run sixteen, and then it spent the 0:07:38.920 --> 0:07:42.600 next few years consolidating that run. So I, you know, 0:07:42.600 --> 0:07:44.240 there are times when I'm out of favor and out 0:07:44.240 --> 0:07:46.640 of favor for a while, and you know you hear it. 0:07:46.880 --> 0:07:50.440 But but generally I try not to get stuck in. Ah. 0:07:50.880 --> 0:07:53.840 I was a value manager as a money manager, and 0:07:53.960 --> 0:07:57.200 I learned the hard way over time. You know, buying 0:07:57.240 --> 0:07:59.880 deep value and saying well, you know it will pay 0:08:00.000 --> 0:08:04.760 off eventually eventually can can really hurt a career. So yeah, 0:08:04.800 --> 0:08:08.920 so I try hard to look at trends and um, 0:08:09.000 --> 0:08:11.640 not get stuck in just because of it's cheap, it 0:08:11.640 --> 0:08:15.640 it looks good. Yeah. You know they say that being 0:08:15.720 --> 0:08:18.080 early is the same as being wrong in a lot 0:08:18.080 --> 0:08:21.880 of cases, right right, Yeah, it's kind of a cliche, 0:08:22.000 --> 0:08:24.120 and there are time when I, certainly, as a contrary, 0:08:24.160 --> 0:08:27.800 will argue against that. I mean, I'm not somebody really 0:08:27.840 --> 0:08:32.240 worries about market timing per se. But obviously the closure 0:08:32.280 --> 0:08:35.240 you can get the turning points, um, the better and 0:08:35.280 --> 0:08:38.720 the more you're you're going to be seen as as accurate. 0:08:38.880 --> 0:08:43.520 So yeah, now you've you you're you're definitely a macro guy. 0:08:43.640 --> 0:08:46.760 You look at the big picture, um, as you've already said, 0:08:46.760 --> 0:08:49.880 trends and fundamentals and things like that. So do you 0:08:50.920 --> 0:08:52.960 I'm guessing you do. But do you look at like 0:08:53.120 --> 0:08:55.520 do you think that the big picture, the macro picture. 0:08:55.640 --> 0:08:58.319 I guess the long term picture is a lot easier 0:08:58.320 --> 0:09:01.120 and a lot more accurate than the short term picture. Yeah, 0:09:01.160 --> 0:09:03.880 that's a good question because so many people think the 0:09:03.920 --> 0:09:07.240 shorter the time frame, the closer you can be to 0:09:07.400 --> 0:09:10.920 being accurate. And all my career because I was a 0:09:11.000 --> 0:09:14.600 value manager, uh and through them all my macro as 0:09:15.000 --> 0:09:18.240 a bye side and cell side person. Um, I find 0:09:18.640 --> 0:09:20.920 you stretch it out and I can be pretty accurate. 0:09:21.000 --> 0:09:22.560 You know, it doesn't mean I'm going to be accurate 0:09:22.600 --> 0:09:25.440 timing wise, but I can give you, you know, and 0:09:25.559 --> 0:09:28.400 I get I get pushed back, or I get people 0:09:28.480 --> 0:09:30.800 kind of jumping wanting to jump over one cycle to 0:09:30.840 --> 0:09:34.000 the next, and I'm you know, I've created the monster 0:09:34.120 --> 0:09:36.280 because I'll talk about things that might be out seven 0:09:36.360 --> 0:09:38.839 or eight years and I have to kind of bring 0:09:38.880 --> 0:09:41.280 them back in and say, let's get through this cycle. 0:09:41.280 --> 0:09:43.760 People were worry about the next one. But but yeah, 0:09:43.880 --> 0:09:47.080 I think longer term is is it's an easier call 0:09:47.760 --> 0:09:52.079 from a big perspective standpoint. Sure, So, um, a lot 0:09:52.120 --> 0:09:54.800 of people don't know what that means. What is short term, 0:09:54.800 --> 0:09:56.920 what's medium term, what's long term? And I guess everybody 0:09:56.960 --> 0:10:00.720 probably has different definitions. So, um, running your funds, the 0:10:00.720 --> 0:10:03.160 pension funds, etcetera that you're in before and now probably 0:10:03.160 --> 0:10:07.200 your own investments, Um, what is your typical investment time 0:10:07.200 --> 0:10:10.040 frame or horizon that you're really looking at now? I mean, 0:10:10.080 --> 0:10:12.720 do you look at it as you're looking a couple 0:10:12.720 --> 0:10:16.160 of years? Yeah? I have my core portfolios tend to 0:10:16.200 --> 0:10:21.920 be somewhere between a year and five years. So depending 0:10:21.960 --> 0:10:25.120 on the situation, sometimes it will be shorter or will 0:10:25.160 --> 0:10:27.360 be on the short end of that one to five year. 0:10:27.920 --> 0:10:31.200 But I'm not afraid to tell people. You know, in 0:10:31.320 --> 0:10:35.080 certain cycles, buy it and you may be holding this 0:10:35.120 --> 0:10:38.079 thing for the next five seventy eight years. And that's 0:10:38.160 --> 0:10:40.080 kind of what I see coming in the next cycle. 0:10:40.200 --> 0:10:44.280 I have, as you know, one of the more bearished 0:10:44.559 --> 0:10:48.640 scenarios out there for one, but I probably think most bearished. 0:10:48.640 --> 0:10:52.600 But but I tell people the difference between me and 0:10:53.160 --> 0:10:56.200 the super bear, you know, the woman Doomers is I 0:10:56.240 --> 0:10:59.600 do believe there's a recovery cycle that follows this bust, 0:11:00.240 --> 0:11:03.600 and in that recovery cycle that will be the balance 0:11:03.640 --> 0:11:07.480 of the decade. Um. I think, Yeah, I don't want 0:11:07.480 --> 0:11:09.720 to get ahead of myself, but I think the medals 0:11:09.720 --> 0:11:12.880 will probably be what the dot com stocks were to 0:11:13.000 --> 0:11:20.440 the nineties. So, you know, getting in in two and 0:11:20.600 --> 0:11:25.360 holding ton or eight maybe maybe the way to go 0:11:26.080 --> 0:11:28.880 the trade of the decade maybe. Um. Yeah, So I 0:11:28.920 --> 0:11:30.560 definitely want to get into that. But like I said, 0:11:30.559 --> 0:11:31.959 we'll kind of get into that at the end. We'll 0:11:31.960 --> 0:11:37.079 make sure people stick around for that. But really when so, 0:11:37.080 --> 0:11:39.240 so you're looking at like one year, I mean, obviously 0:11:39.280 --> 0:11:42.280 now we're talking six eight months or whatever, but a year, um, 0:11:42.280 --> 0:11:44.040 But I like that. But so that gives me a 0:11:44.040 --> 0:11:47.520 good idea on the timeframe. But what type of indicators 0:11:47.520 --> 0:11:50.400 are you looking at? Um? What are the main things 0:11:50.400 --> 0:11:52.600 that you're watching. I mean you're a macro guy, so 0:11:52.880 --> 0:11:56.360 like FED policy, interest rates, I mean what are you 0:11:56.360 --> 0:12:00.840 looking at? Yeah, I think uh, FED policy certainly is 0:12:00.840 --> 0:12:03.520 a big one for me. Um, And again I do 0:12:03.559 --> 0:12:06.559 it a little differently than most. Um. Something that served 0:12:06.600 --> 0:12:10.160 me well over the many decades is I am more 0:12:10.200 --> 0:12:12.200 of a money guy than an interest rate guy. I 0:12:12.240 --> 0:12:14.880 think the vast majority of the street thinks it's interest 0:12:14.960 --> 0:12:18.600 rates that drives the economy. And in you know, in 0:12:18.679 --> 0:12:22.079 a micro from a micro standpoint, that's true, lower rates, 0:12:22.320 --> 0:12:27.280 you know, encourages increases, lending, etcetera. But it's really from 0:12:27.320 --> 0:12:29.959 a from a FED standpoint, it's a quantity of money, 0:12:30.000 --> 0:12:32.920 not the price of money that I pay most attention to. 0:12:33.840 --> 0:12:38.880 And so um, you know that that certainly in March 0:12:39.800 --> 0:12:42.360 got me to be much more bullish than anybody else 0:12:42.400 --> 0:12:45.960 and saying, you know, I've been probably the most critical 0:12:46.080 --> 0:12:49.040 person of J Powell for the last year, but he's 0:12:49.080 --> 0:12:52.640 finally getting up to speed, and you know, since then 0:12:52.720 --> 0:12:56.080 has been so so quantity of money is a big 0:12:56.080 --> 0:13:01.600 one for me. Um. I you know, a big picture 0:13:01.720 --> 0:13:04.920 charts will What I always say is, you know, if 0:13:04.960 --> 0:13:09.079 the macro and the technicals and the fundamentals all jive, 0:13:09.840 --> 0:13:12.199 it's like the three legged stool. I feel, you know, 0:13:12.280 --> 0:13:14.520 I feel my convictions go and can go up. If 0:13:14.520 --> 0:13:17.040 I only have two of three of those, then my 0:13:17.080 --> 0:13:19.160 conviction is going to be a little less. And if 0:13:19.160 --> 0:13:20.800 I only have one of the three, I'm probably not 0:13:20.840 --> 0:13:24.240 gonna be there yet. And what were those three again? Um, 0:13:24.280 --> 0:13:30.760 typically fundamentals, which can be macro fundamentals, um, the technicals, um, 0:13:31.120 --> 0:13:37.559 and then um uh. FED policy now, Um, it's interesting 0:13:37.600 --> 0:13:40.800 the FED policy. You talk about the money? Quantity of money? 0:13:41.040 --> 0:13:43.040 Is that kind of like Stanley Druckon Miller. I think 0:13:43.040 --> 0:13:45.640 he talks about that quite a bit. Um, kind of 0:13:45.640 --> 0:13:49.040 like a little somewhat in line with his school of thought. Um, yeah, 0:13:49.080 --> 0:13:51.560 I don't follow stand that much, so I'm not sure. 0:13:51.600 --> 0:13:53.559 I think I was way ahead of him, way earlier 0:13:53.600 --> 0:13:57.360 than him, in terms of looking the money and how 0:13:57.400 --> 0:14:00.400 I read FED policy. I've been doing that since something three, 0:14:00.480 --> 0:14:04.680 So yeah, so I'm curious about that specifically because yeah, 0:14:04.679 --> 0:14:08.040 seventy three is a long time and uh, really that's 0:14:08.840 --> 0:14:12.640 that's seventy one s seventy three was really the change 0:14:12.679 --> 0:14:15.880 of the whole you know, money cycle, the whole world really, right, 0:14:15.920 --> 0:14:17.480 we got off the gold standard, and all of a 0:14:17.480 --> 0:14:20.920 sudden we've exploded with this uh, money creation, debt creation, 0:14:20.920 --> 0:14:23.840 whatever you want to call it. So since seventy three 0:14:23.960 --> 0:14:26.200 was really that turning point, and you've been in this 0:14:26.360 --> 0:14:29.520 since then, So I'm curious. I mean, I guess you've 0:14:29.520 --> 0:14:33.160 been using that this whole time. Um, have you really 0:14:33.360 --> 0:14:35.120 changed the way that you look at it because the 0:14:35.160 --> 0:14:40.160 FED has changed it drastically? Or what is? What? What? What? 0:14:40.320 --> 0:14:44.080 I look a lot of economic and market cycles which 0:14:44.160 --> 0:14:48.640 tend to go together. So um, so you know, basically 0:14:48.680 --> 0:14:51.880 you've had five cycles since since I came into the business. 0:14:52.160 --> 0:14:54.680 You know, the seventies were one, the eighties were another, 0:14:55.360 --> 0:14:58.840 more or less, um, the nineties another one, uh, the 0:14:58.880 --> 0:15:02.320 two thousand's and then the two thousand tens, and and 0:15:02.400 --> 0:15:08.000 in each one the FED helped kind of prime the 0:15:08.000 --> 0:15:11.640 pump and provide the liquidity that helped drive the cycle. 0:15:12.120 --> 0:15:14.640 And then things got overheated. The FED took the punch 0:15:14.680 --> 0:15:17.360 bowl away, and that was a signal where you were 0:15:17.400 --> 0:15:19.920 starting to pay attention to whether you know, the markets 0:15:19.920 --> 0:15:26.200 were topping out. UM. What's changed is obviously the degree 0:15:26.240 --> 0:15:29.520 to which the FED is involved and the magnitude of 0:15:29.840 --> 0:15:33.760 the change in the money supply. So UM. And I 0:15:33.800 --> 0:15:37.560 think that is because and one other thing I kind 0:15:37.560 --> 0:15:41.520 of overlay on my macro is that I believe UM 0:15:41.560 --> 0:15:46.560 supercycles exists that are basically I defined it as the 0:15:47.200 --> 0:15:51.040 period between one depression and the next nine thirties was 0:15:51.160 --> 0:15:56.040 last depression. I think we've been in a supercycle ever since. UM. 0:15:56.200 --> 0:15:59.600 And you know, as you go through the supercycle, everything 0:15:59.680 --> 0:16:03.800 kind of was two higher highs and and so debt 0:16:04.240 --> 0:16:07.960 particularly took off in the last three decades, but it 0:16:08.000 --> 0:16:11.240 was building before that, and now we're at the kind 0:16:11.240 --> 0:16:14.560 of the end of that game. I think there's one 0:16:14.600 --> 0:16:19.560 more leg beyond this one. UM. That's another thing where 0:16:19.560 --> 0:16:21.320 I different. Most people kind of think we're at the 0:16:21.360 --> 0:16:23.720 peak in debt. I said, no, you're probably gonna see 0:16:24.240 --> 0:16:28.600 where we're at twur and fifty trilling globally. Now, I 0:16:28.600 --> 0:16:33.000 wouldn't be surprised c. Three before the end of this decade. 0:16:33.520 --> 0:16:36.560 Most of that will come in response to the next 0:16:36.600 --> 0:16:41.400 year's bust, but they will probably expand beyond that. So UM. 0:16:42.200 --> 0:16:45.840 So it's you know, I just think we're you move 0:16:46.120 --> 0:16:50.359 in these cycles, whether supercycle or or the smaller cycles, 0:16:50.760 --> 0:16:53.000 you move from the bottom left to the top right, 0:16:53.160 --> 0:16:56.040 and as you get uh you know, closer to the 0:16:56.040 --> 0:16:59.800 top right, things go parabolic or certainly get steeper in 0:16:59.800 --> 0:17:04.560 the slope. Yeah. Um, Harry Dent talks a lot about cycles. 0:17:04.560 --> 0:17:06.600 He's somebody that we've had on the show. Um, and 0:17:06.640 --> 0:17:08.080 I'll follow it for a long time as well. I 0:17:08.119 --> 0:17:10.080 think he's calling it like a ninety year cycle that 0:17:10.119 --> 0:17:13.440 we're in right now. Um. Yeah, I'm not people want 0:17:13.560 --> 0:17:15.520 you know, they hear me talk cycles, and most of 0:17:15.520 --> 0:17:17.879 mine are really talking about the economic cycle and the 0:17:17.920 --> 0:17:21.280 market cycle that goes along with that. Uh, supercycles a 0:17:21.359 --> 0:17:24.600 little bit bigger stories than that. But I'm not in 0:17:24.640 --> 0:17:26.800 the time cycles. I'm not one of those guys that 0:17:27.240 --> 0:17:29.720 we're in your cycle or we're in the you know, 0:17:30.040 --> 0:17:32.119 the cycle is going to kick in over this cycle. 0:17:32.440 --> 0:17:35.080 I don't mean those kind of time cycles. Okay, good, 0:17:35.080 --> 0:17:38.280 thanks for clarifying that. Um, I was gonna just say, uh, 0:17:38.600 --> 0:17:41.200 he is you said that. Your your call, which we'll 0:17:41.200 --> 0:17:43.520 get into at the end of the drop, is maybe 0:17:43.520 --> 0:17:46.359 one of the most bearish and Harry Harry might also 0:17:46.440 --> 0:17:50.119 join you in that very very various camp. But, UM, 0:17:50.160 --> 0:17:53.360 I'm curious. So you're looking at the money supply, obviously, 0:17:53.440 --> 0:17:57.200 the FED policy things like that. Um, you said the fundamentals, 0:17:57.240 --> 0:18:00.320 So when you're talking about the fundamentals, are you talking 0:18:00.320 --> 0:18:03.520 about the economy, Because it seems like today, more than ever, 0:18:03.680 --> 0:18:08.159 especially obviously since the pandemic happened, the economy is completely 0:18:08.200 --> 0:18:12.600 irrelevant anymore at this point. Yeah, I would probably disagree 0:18:12.600 --> 0:18:16.159 with that in that very much disagree, But but I 0:18:16.200 --> 0:18:22.520 get the confusion right now. Well, I'm asking a question. Yeah, yeah, okay, sure, Um, well, 0:18:22.520 --> 0:18:27.919 I certainly disagree with the concept the I think I 0:18:28.000 --> 0:18:30.639 understand the confusion of people looking and you know, the 0:18:30.680 --> 0:18:34.320 market seems totally separated from what's going on on the ground. 0:18:34.760 --> 0:18:38.399 You know, the economy is really in trouble, and and 0:18:38.520 --> 0:18:41.040 yet we're at all time highs in the stock market. 0:18:41.480 --> 0:18:44.399 Part of that is, and again this is kind of 0:18:44.400 --> 0:18:48.480 my looking at at cycles, but there's a six to 0:18:48.560 --> 0:18:52.080 nine month lag to when the Fed um puts the 0:18:52.119 --> 0:18:54.720 money in the system to when you get your results. 0:18:55.400 --> 0:18:58.359 I think the street over and over and over cycle 0:18:58.440 --> 0:19:01.800 to cycle. You know, the generations of investors since I 0:19:01.920 --> 0:19:06.399 joined expects that to be almost media and it's partly 0:19:06.400 --> 0:19:09.200 because of their focus on interest rates. They think, okay, 0:19:09.000 --> 0:19:12.320 they lowered rates, they cut rates. Therefore, in the next 0:19:12.400 --> 0:19:15.000 quarter we're going to see the results. Most of the 0:19:15.040 --> 0:19:18.159 results are six and nine months out, so you know, 0:19:18.240 --> 0:19:22.280 we we saw the big infusion of money in March 0:19:22.359 --> 0:19:27.159 and April and June. Um, I think most of the 0:19:27.200 --> 0:19:31.560 expansion is really six months from them. So you're talking 0:19:31.600 --> 0:19:34.200 about we're just entering that period where the market, where 0:19:34.240 --> 0:19:38.120 the economy gets start getting stronger. So I mean, it's 0:19:38.160 --> 0:19:41.760 not all that so it is fairly immediate, but there's 0:19:41.760 --> 0:19:44.400 an other things, other factors like we shut down the economy, 0:19:44.400 --> 0:19:46.960 that we opened up the economy, so so there are 0:19:46.960 --> 0:19:51.280 other factors that can shorten some of that. But I 0:19:51.320 --> 0:19:55.280 do think people don't understand that part of what the 0:19:55.320 --> 0:20:00.760 market is doing is looking past the trought and understanding 0:20:01.560 --> 0:20:04.119 that all this money that's being created, which is beyond 0:20:04.160 --> 0:20:07.200 anything we've ever seen in history, is going to lead 0:20:07.200 --> 0:20:13.960 to stronger expect stronger results that we expect. Yeah, so, um, 0:20:14.040 --> 0:20:16.600 it does seem that they're looking at the money side 0:20:16.600 --> 0:20:19.120 more because on the economy side, you know, I don't 0:20:19.119 --> 0:20:21.000 actually know what the latest numbers are. I haven't looked, 0:20:21.040 --> 0:20:25.160 but whatever, tens of millions of people are still unemployed. Uh. 0:20:25.200 --> 0:20:28.240 You know, some reports say of those jobs might never 0:20:28.280 --> 0:20:31.199 come back. Obviously with the stimulus programs that we have, 0:20:31.240 --> 0:20:33.240 a lot of people may choose to never come back 0:20:33.320 --> 0:20:37.760 because because of the stimulus and whatnot. Um. And so 0:20:38.040 --> 0:20:41.439 you know, from an economy standpoint, I mean my stores 0:20:41.480 --> 0:20:45.040 in my area are still operating at capacity, right, so, uh, 0:20:45.160 --> 0:20:47.840 travel is never coming back or whatever, so uh the 0:20:47.880 --> 0:20:50.239 account and and then then we have obviously the real 0:20:50.359 --> 0:20:53.760 estate thing with the pent up foreclosures forbearances, etcetera. So 0:20:53.880 --> 0:20:57.360 I don't know just from the economy standpoint. Um, yeah, 0:20:57.440 --> 0:20:59.760 it is very difficult to get back to that or 0:20:59.800 --> 0:21:01.320 why I were at that all time high. I get 0:21:01.359 --> 0:21:03.879 what you're saying. Where it's like the market's like a 0:21:03.920 --> 0:21:06.760 discounting mechanism, so it's it's basically projecting where we'll be 0:21:06.800 --> 0:21:11.680 in the future. The marketing economy work on different time frames, right, Um, 0:21:11.800 --> 0:21:14.600 But it seems like everybody's really looking at the FED 0:21:14.720 --> 0:21:17.800 is going to backstop the market, right the FED has 0:21:17.800 --> 0:21:22.880 committed to do whatever infinity uh by bonds, probably buying 0:21:22.920 --> 0:21:25.680 equities et cetera. And it seems so do you give 0:21:25.720 --> 0:21:28.199 more weight to that now, like you kind of understand 0:21:28.200 --> 0:21:31.120 this balance or you still think the economy is doing 0:21:31.200 --> 0:21:32.879 good or going to do good in the future that 0:21:33.119 --> 0:21:36.800 you know, the broad picture that I painted about, you know, 0:21:37.440 --> 0:21:40.240 when the money gets infused and when it results, that's 0:21:40.440 --> 0:21:42.560 you know, the world isn't perfect and that's not how 0:21:42.600 --> 0:21:45.479 it always works exactly. And then you add in the 0:21:45.480 --> 0:21:50.119 complications time of we actually shut down the economy and 0:21:50.320 --> 0:21:53.720 we are impacting a lot of small businesses and as 0:21:53.720 --> 0:21:55.960 you say, you know a lot of restaurants, a lot 0:21:55.960 --> 0:22:01.120 of um, consumer oriented businesses may not make it and 0:22:01.160 --> 0:22:04.760 are still shut down. So so you've got to kind 0:22:04.760 --> 0:22:07.600 of balance what is going on in the real world 0:22:07.720 --> 0:22:11.880 with what normally happened with you know, FED policy versus 0:22:11.960 --> 0:22:14.479 when it kicks in. UM. And I think so they 0:22:14.560 --> 0:22:18.200 kind of, um, you know, influence each other or overlay 0:22:18.280 --> 0:22:23.600 with each other. Um. What I would say is that's why, um, 0:22:24.640 --> 0:22:27.120 it's it's a difficult thing. I talked about a global 0:22:27.440 --> 0:22:33.480 deflationary bust in and people start questioning me on the 0:22:33.520 --> 0:22:35.720 bus or refer to my call of the bust, and 0:22:35.760 --> 0:22:39.560 I'll go, um, yeah, but we really the bus started 0:22:39.600 --> 0:22:43.240 in March. Um, so it's yes, we're gonna have a 0:22:43.320 --> 0:22:46.560 rebound in between, but it's all one bust. It's not 0:22:46.640 --> 0:22:48.800 two bus. It's not like we have a bust in 0:22:49.240 --> 0:22:52.560 you know, the second quarter, and then we're you know, 0:22:52.600 --> 0:22:55.560 we're gonna have this short recovery and then we're gonna 0:22:55.640 --> 0:22:58.440 have another bus. I said, it's all one bust because 0:22:58.440 --> 0:23:01.600 a lot of the things leading to that bust are 0:23:01.960 --> 0:23:05.480 those shutting businesses aren't going to come back right now. 0:23:05.760 --> 0:23:08.560 Are are the fact that airline traffic is not going 0:23:08.600 --> 0:23:11.679 to be there. Even even if the economy gets stronger 0:23:11.680 --> 0:23:14.560 in the next few months, you're not getting anywhere near 0:23:14.640 --> 0:23:18.000 back to what is a normal I his period. So 0:23:18.000 --> 0:23:21.719 so it is you know, there are kind of various 0:23:21.720 --> 0:23:26.600 forces in this that aren't all in sync. Yeah, yeah, 0:23:26.680 --> 0:23:28.840 you know, I know kind of what you were saying. 0:23:28.840 --> 0:23:31.159 People ask you what books you read, and you're like, well, 0:23:31.200 --> 0:23:33.320 I've read a lot of books. But really a lot 0:23:33.359 --> 0:23:35.160 of this is just doing it over a long period 0:23:35.160 --> 0:23:37.000 of time. And the brain is so amazing, right, it 0:23:37.000 --> 0:23:39.719 gets so much information and it just starts putting pictures 0:23:39.720 --> 0:23:42.760 together for you. So, uh, there's a lot of information 0:23:42.800 --> 0:23:44.880 to digest and and you've been doing a long time, 0:23:44.880 --> 0:23:46.720 and so it just paint paints a perfect picture in here. 0:23:46.760 --> 0:23:49.000 Well that's exactly right. People think they can if I 0:23:49.040 --> 0:23:51.560 give them the few books that were the big influencers, 0:23:51.600 --> 0:23:53.359 that they'll be able to do what I do. And 0:23:53.400 --> 0:23:55.879 I go, I'm not saying this from an ego standpoint, 0:23:55.920 --> 0:24:00.440 but you know, fourty seven years of cumulative knowledge isn't 0:24:00.480 --> 0:24:03.960 something you find in a book. And I you know, 0:24:04.000 --> 0:24:06.600 there's certainly people that entered the business when I did 0:24:07.119 --> 0:24:11.760 that weren't successful or you know, don't have the same 0:24:11.840 --> 0:24:17.920 views I have, uh, successful or otherwise. Um, it's everybody different. 0:24:17.960 --> 0:24:20.119 And I one the one thing I tell people is, 0:24:20.240 --> 0:24:22.840 you know, younger people that say, well, how did you 0:24:22.880 --> 0:24:25.040 get to where you're at? Or you know your knowledge 0:24:25.080 --> 0:24:28.080 base and stuff? I said, well, one big thing it's 0:24:28.119 --> 0:24:31.760 important is learned from your mistakes. We all made will 0:24:31.800 --> 0:24:34.960 make mistakes in this business. It's a humbling business. And 0:24:35.040 --> 0:24:38.160 the difference between good investors and bad is the bad 0:24:38.160 --> 0:24:41.600 investors will repeat those mistakes cycle to cycle, or you know, 0:24:41.680 --> 0:24:45.720 over and over, whereas good investors make that mistake once 0:24:45.720 --> 0:24:49.000 and say fool me. Once you're not can fool me again. Yeah. 0:24:49.200 --> 0:24:50.680 My dad always told me when I was a kid 0:24:50.680 --> 0:24:53.800 growing up, He said, once is an accident, twice as stupid. 0:24:54.040 --> 0:24:59.320 Don't do this anything overly. So so let's uh we'll 0:24:59.359 --> 0:25:02.080 transition to start looking at some of your kind of 0:25:02.520 --> 0:25:05.960 forecasts and uh and calls for the future. Um, the 0:25:06.040 --> 0:25:08.719 big debate that everybody started, we'll start with the big 0:25:08.760 --> 0:25:10.120 stuff and then we'll kind of work our way down 0:25:10.119 --> 0:25:14.840 into more granular. But the big debate is inflation or deflation. 0:25:15.320 --> 0:25:17.600 And uh, I think you know, we talked about the 0:25:17.600 --> 0:25:21.440 FED since seventy three printing this giant uh money bubble, 0:25:21.560 --> 0:25:24.439 right whatever, three trillion dollars of debt and it seems 0:25:24.480 --> 0:25:27.440 like you know, we've seen, you know, through each correction 0:25:27.520 --> 0:25:29.920 it's trying to de leverage and then the FED pumps 0:25:29.960 --> 0:25:33.680 it back up and then de leverage and pump back up. Um. 0:25:33.720 --> 0:25:37.080 So I guess the the inflation deflation is is the 0:25:37.119 --> 0:25:40.720 debt going to implode and deflate faster than the Fed 0:25:40.800 --> 0:25:43.960 can pump it back up? Uh? What do you see 0:25:44.040 --> 0:25:45.800 or I'm guessing maybe you kind of see it doing 0:25:45.840 --> 0:25:49.520 something like this. Yeah, it's uh, you know, there's there 0:25:49.560 --> 0:25:52.360 are people out there as you know, as Peter Schiff 0:25:52.480 --> 0:25:55.680 or some of the others that I called true that field. 0:25:55.680 --> 0:25:58.320 We're at the end of the cycle, the supercycle, or 0:25:58.320 --> 0:26:02.080 whatever they want to call it, the debt cycle. And 0:26:02.240 --> 0:26:05.240 you know they're they're thinking, we're imploding now or in 0:26:05.280 --> 0:26:10.000 the process of imploding now, and who knows where we 0:26:10.040 --> 0:26:12.480 are after this, and it's gonna be a long time 0:26:12.520 --> 0:26:15.680 before we come out of it. Um. I believe there's 0:26:15.680 --> 0:26:18.760 another cycle before we get to that. So I think 0:26:18.800 --> 0:26:22.680 we've been in disinflation since, um, the early eighties. You know, 0:26:22.760 --> 0:26:25.840 we peeked out in inflation in the early eighties and 0:26:25.880 --> 0:26:30.160 it's been a ratching down of inflation over many cycles. UM. 0:26:30.320 --> 0:26:33.480 And what happens is the FED then ten FED and 0:26:33.480 --> 0:26:38.200 and policymakers tend to overshoot, so they are so worried 0:26:38.240 --> 0:26:42.680 about what they're in now that they can go too far. 0:26:42.840 --> 0:26:47.600 So amazingly, and I've said this for many years. Um. 0:26:47.680 --> 0:26:55.600 You know, inflation reached obviously twenty nine, amazingly, that was 0:26:55.840 --> 0:27:01.760 forty years ago, and we're still were about inflation, even 0:27:01.800 --> 0:27:04.280 though inflation has come down from twenty to almost zero, 0:27:04.960 --> 0:27:09.440 so that that was a very traumatic period. And you know, 0:27:09.560 --> 0:27:12.480 you weren't there. Obviously you're younger than I am, but 0:27:12.800 --> 0:27:16.320 a lot of people in the business today never you know, 0:27:16.440 --> 0:27:20.080 unless you were there. It's really hard to understand how 0:27:21.080 --> 0:27:25.320 um traumatic that was. We went from you know, middling 0:27:25.359 --> 0:27:31.240 inflation five inflation in five years. But is a is 0:27:31.280 --> 0:27:33.960 a lot of that because of the way CPI has changed. 0:27:34.000 --> 0:27:39.600 I mean obviously home prices, gasoline prices, milk and steak prices, education, 0:27:39.640 --> 0:27:42.600 healthcare for sure have all skyro and the money supply 0:27:42.760 --> 0:27:45.840 is all skyrocketed since the eighties. So even though the 0:27:45.880 --> 0:27:48.280 CPI with the FED looks at his inflation is down, 0:27:48.680 --> 0:27:51.560 the reality as most people see inflation or no, yeah, 0:27:51.680 --> 0:27:54.639 I would say no. I mean yes, for sure, there's 0:27:54.680 --> 0:27:58.959 you know, there's elements of the economy that see inflation 0:27:59.200 --> 0:28:01.719 go a lot here, so that you get that argument. 0:28:01.760 --> 0:28:06.840 A lot of yes, the indexes say we're disinflating or 0:28:06.880 --> 0:28:11.080 we're moving towards zero inflation, but people's real pocketbooks to 0:28:11.119 --> 0:28:14.359 know that that's not the case. Um. But overall, I 0:28:14.760 --> 0:28:17.639 don't think it's so much manipulation of indexes or anything 0:28:17.680 --> 0:28:21.000 like the inflation index or anything like that. I really 0:28:21.040 --> 0:28:26.080 do think it's global. Um. We we got such access 0:28:26.119 --> 0:28:30.040 capacity in a response to don't forget, we'd be just 0:28:30.119 --> 0:28:33.480 a little history. In the late seventies or early eighties, 0:28:34.240 --> 0:28:38.920 we went through a huge boom of expanding heavy industry capacity. 0:28:38.960 --> 0:28:44.760 I mean, you know, steal steel, autos, paper mills, etcetera. 0:28:45.320 --> 0:28:48.600 All everybody got caught up in that inflation cycle and 0:28:48.640 --> 0:28:52.240 commodities were going crazy, energy was going crazy, and you 0:28:52.280 --> 0:28:55.000 had this huge build up of capacity and then all 0:28:55.000 --> 0:28:59.320 of a sudden um because inflation was running away and 0:29:00.000 --> 0:29:03.400 economy was very overheated. It took a you know, Paul 0:29:03.480 --> 0:29:06.880 Volker to come in and say and frankly, it was 0:29:07.680 --> 0:29:10.320 that problem of most people are Keynesians and look at 0:29:10.320 --> 0:29:13.959 interest rates, not money. G William Miller was FED chairman, 0:29:14.000 --> 0:29:17.240 and he's sitting there going, I'm in the late seventies 0:29:17.240 --> 0:29:20.800 and he's going, I'm taking I'm raising rates, so I'm tightening. 0:29:21.360 --> 0:29:24.360 But he was raising rates at much lower rates, at 0:29:24.440 --> 0:29:26.640 much lower levels than they would have been if he 0:29:26.680 --> 0:29:28.640 had left them alone. But he was pouring money and 0:29:28.680 --> 0:29:31.880 to keep rates from going too far up or too fast. 0:29:32.560 --> 0:29:36.240 As a result, he was pouring fuel on the fire, 0:29:36.320 --> 0:29:38.920 the inflation fire, and we went from five percent inflation 0:29:38.960 --> 0:29:42.080 to twenty percent inflation in a few years UM. And 0:29:42.120 --> 0:29:45.360 that was all part of the commodity boom, etcetera. When 0:29:45.440 --> 0:29:49.760 Volker came in and said, Okay, I'm no longer worrying 0:29:49.800 --> 0:29:53.720 about targeting rates. I'm gonna let rates go where they 0:29:53.760 --> 0:29:57.240 have to. We're take tightening the money spy down. That was, 0:29:57.400 --> 0:30:02.520 you know, the first step towards a monitorist approach, saying 0:30:02.600 --> 0:30:07.240 money is important, money is what's causing this. And they 0:30:07.280 --> 0:30:11.880 really have off and on with Vulca and then Greenspan 0:30:12.880 --> 0:30:17.880 uh and and some extent bernanke Um. That continued to 0:30:17.960 --> 0:30:22.520 be the process. And so wheneverything's got out of hand, 0:30:22.520 --> 0:30:26.560 they brought you know, they kind of brought it back 0:30:26.560 --> 0:30:29.960 in again. So I think it was a ratcheting down 0:30:30.000 --> 0:30:36.200 of inflation because they did understand money creates inflation. UM. 0:30:36.240 --> 0:30:38.760 Now now they've gone so far that I think next 0:30:38.840 --> 0:30:43.560 year is deflation. And and when we get that again, 0:30:43.800 --> 0:30:46.400 the gloom and dumers think it's, you know, we're down 0:30:46.440 --> 0:30:49.640 for the count. I argue, and I've been arguing this 0:30:49.800 --> 0:30:52.120 for five years because I've been talking about about coming 0:30:52.960 --> 0:30:56.600 um that and probably longer than that. But um that 0:30:56.760 --> 0:31:01.640 in a bus we will see money, and I've been 0:31:01.680 --> 0:31:03.680 saying for a few years it will probably you'll see 0:31:03.720 --> 0:31:06.040 the FED balance you grow the twenty trillion, maybe even 0:31:06.080 --> 0:31:10.600 thirty trillion. And it's because in that global bus, the 0:31:10.600 --> 0:31:15.920 FED has unlimited ability to print because they don't have 0:31:15.920 --> 0:31:18.760 to worry about inflation. There's you know, there's a six 0:31:18.880 --> 0:31:21.480 or nine month lag to the economy. There's a two 0:31:21.560 --> 0:31:24.440 or three year lag to inflation. So that's where I 0:31:24.520 --> 0:31:27.200 disagree with a lot of people on the street today, economis, etcetera. 0:31:27.200 --> 0:31:30.200 Who are we're in about inflation nowity? You know the 0:31:30.200 --> 0:31:32.600 money that the money that we're creating now is going 0:31:32.640 --> 0:31:36.040 to lead to hyper inflation down the road, but you're 0:31:36.040 --> 0:31:38.400 two or three years away from them, maybe longer because 0:31:38.440 --> 0:31:45.720 next year is deflationary bus. Um okay, so so um 0:31:45.800 --> 0:31:48.600 yeah that that makes sense. So then if I'm following 0:31:48.600 --> 0:31:50.920 that line of thought, or I should say to recap basically, 0:31:50.960 --> 0:31:53.560 what you're saying is, um, we're going to see a 0:31:53.720 --> 0:31:56.720 where we've been in deflation. We're going to see a 0:31:56.800 --> 0:32:00.240 big deflationary move because of the bus coming sometime next year. 0:32:01.160 --> 0:32:03.360 But the reaction of the FED, which is then to 0:32:03.480 --> 0:32:07.440 just jump in and print unlimited as you said trillion. Then, 0:32:07.520 --> 0:32:10.480 so we have a deep continue deflation is sharp drop 0:32:10.480 --> 0:32:14.760 in deflation. But then the reaction till printing then pushes 0:32:14.840 --> 0:32:18.320 us into inflation or hyperinflation. Just to just to correct 0:32:18.360 --> 0:32:22.320 a little bit. Um, we're in disinflation still until you 0:32:22.360 --> 0:32:26.880 get into negative inflation. Um, it's disinflation. Is it's inflation 0:32:26.960 --> 0:32:31.160 growing at ever lower rate. So we're still above zero, 0:32:31.320 --> 0:32:35.160 so it's disinflation. Um. We go into deflation next year 0:32:35.200 --> 0:32:37.760 because the economy goes into a double dip. You know 0:32:37.800 --> 0:32:41.680 that we had the first um dip March through June 0:32:41.800 --> 0:32:46.360 or whenever, March through May. UM. And I think next 0:32:46.400 --> 0:32:49.959 year is a much bigger step down in the economy. 0:32:50.000 --> 0:32:52.920 And we're so close to zero on inflation even if 0:32:52.920 --> 0:32:57.000 we get an uptick in the next six months that um, 0:32:57.280 --> 0:33:00.640 you're gonna easily go through zero. And I I actually 0:33:00.640 --> 0:33:04.480 think you could see three to five deflation. That's a 0:33:04.560 --> 0:33:07.880 big number everything. I would say the vast majority of 0:33:07.880 --> 0:33:12.280 people that I think they understand deflation today think of 0:33:12.320 --> 0:33:15.440 deflation in terms of what Japan experienced. You know, several 0:33:15.480 --> 0:33:20.400 years ago, you know, their economy still was close to 0:33:20.480 --> 0:33:25.480 zero or above UM. You know, deflation was maybe slightly 0:33:25.520 --> 0:33:29.120 below zero. I'm talking about something we haven't seen since 0:33:29.160 --> 0:33:33.240 the thirties, you know, three to five negative inflation, an 0:33:33.280 --> 0:33:36.360 economy where you're gonna have, you know, down double digits 0:33:36.480 --> 0:33:39.560 in GDP. So we saw you know, the kind of 0:33:39.560 --> 0:33:42.840 the precursor of that March or March to eight March 0:33:42.840 --> 0:33:45.600 and April. But I think we'll see it for much 0:33:45.600 --> 0:33:48.840 of the next year. And and people go, what if, well, 0:33:49.000 --> 0:33:51.640 the fence printing money, why would you know your you 0:33:51.680 --> 0:33:55.000 believe money is going to keep you afloat. I think 0:33:55.240 --> 0:34:00.000 two things. One, as has been said a lot by others, Um, 0:34:00.000 --> 0:34:02.160 the Fed can take care of liquidity in the short run. 0:34:02.840 --> 0:34:05.280 Insolvency is a different story. And I think by the 0:34:05.280 --> 0:34:06.920 time we get to next year, there's a lot of 0:34:06.960 --> 0:34:12.719 companies that just can't hold on um. And there's you 0:34:12.760 --> 0:34:15.960 see me on Twitter say this a lot um. Markets 0:34:15.960 --> 0:34:19.640 and economies don't. It's not a linear relationship. Things don't 0:34:19.640 --> 0:34:22.239 go in a straight line. So you're gonna have a 0:34:22.280 --> 0:34:25.080 period where policy is not gonna be linear either. I 0:34:25.080 --> 0:34:28.200 think if we if we're looking at a blow off 0:34:28.200 --> 0:34:31.920 in this stock market, you get some uptick inflation and 0:34:32.080 --> 0:34:35.719 next three months, three or four months, oil goes from 0:34:35.760 --> 0:34:39.800 forty to fifty UM. Grain prices go you know, sharply, 0:34:39.920 --> 0:34:43.239 sharply higher as they are. Um, I think you're gonna 0:34:43.239 --> 0:34:46.200 see the FED pause. They've already paused basically in the 0:34:46.280 --> 0:34:49.920 last several weeks. I think you'll see them pause. And 0:34:50.320 --> 0:34:53.520 I think that pause in a period when we're so fragile, 0:34:54.239 --> 0:34:57.120 it doesn't take much to send this thing or straight down. 0:34:58.040 --> 0:35:00.719 And so I think every every time they've paused in 0:35:00.760 --> 0:35:03.520 the past, we've seen what's happened. So I'm not talking 0:35:03.520 --> 0:35:05.520 about it, and I'm not talking about market. I mean 0:35:05.560 --> 0:35:10.000 the economy. The economy just deeds needs that liquidity just 0:35:10.080 --> 0:35:14.360 to stay afloat. The problem is that liquidity. It's it's uh, 0:35:14.520 --> 0:35:17.000 it's more like giving heroin to a junkie, right, So 0:35:17.080 --> 0:35:18.600 it's like they just need more and more and more. 0:35:18.600 --> 0:35:20.879 It doesn't solve the problem. It just keeps them going. 0:35:20.960 --> 0:35:24.439 I mean, companies that are already struggling with too much debt, 0:35:24.480 --> 0:35:27.480 giving them more debt isn't necessarily going to help. It's 0:35:27.560 --> 0:35:31.120 very tough one. As I say a lot, or I 0:35:31.200 --> 0:35:35.200 say once in a while, UM, I'm you know, I 0:35:35.719 --> 0:35:39.520 certainly talk about um. Whether I think should be done. 0:35:39.600 --> 0:35:42.040 But most of the time I'm focused on what's going 0:35:42.080 --> 0:35:45.319 to happen, whether I agree with what they're doing or not. 0:35:45.400 --> 0:35:49.919 So I'd like to say I'm forecasting and not moralizing. 0:35:50.200 --> 0:35:54.920 You know. I think in particularly in today's world, the 0:35:54.960 --> 0:36:00.000 Austrians have become a cult almost on the street or 0:36:00.120 --> 0:36:03.680 on Twitter, and you know, they want to spend all 0:36:03.719 --> 0:36:08.480 their time attacking, you know, the FED or the central banks, 0:36:08.680 --> 0:36:12.200 or criticizing everything being done. And I go, if you 0:36:12.239 --> 0:36:14.360 want to follow, you know, if you want to go 0:36:14.400 --> 0:36:18.160 back on the gold standard today, start right now. Um. 0:36:18.200 --> 0:36:20.560 And if you want to, you know, ratchet money down 0:36:20.560 --> 0:36:22.440 to what you think it should be, which is close 0:36:22.480 --> 0:36:26.520 to zero, we'll all be living in cage of unemployment. 0:36:26.920 --> 0:36:30.040 The Fed and the Treasury are doing what they have 0:36:30.200 --> 0:36:32.799 to do. It doesn't mean it's going to end well. 0:36:32.840 --> 0:36:35.960 I have the most dire forecast for the thirties and 0:36:36.000 --> 0:36:39.799 forties or certainly theties. You know, I think we're gonna 0:36:39.800 --> 0:36:43.360 see a depression many fold bigger than the Great Depression, 0:36:43.520 --> 0:36:46.520 many many We could have eight percent unemployment, we could 0:36:46.560 --> 0:36:49.880 have a totalitarian system replace what we have. But that's 0:36:50.600 --> 0:36:55.000 one cycle from now, not now. And uh. And if 0:36:55.000 --> 0:36:58.320 they want. If they did what the Austrians proposed today, 0:36:58.560 --> 0:37:02.640 we'd have it now. Well, I am, I'm both So 0:37:02.800 --> 0:37:05.120 I'm definitely in the Austrian coult as you call it. 0:37:05.239 --> 0:37:07.080 I wouldn't call it that, but I do believe in 0:37:07.080 --> 0:37:09.360 Austrian colt and I do. But I do agree with 0:37:09.360 --> 0:37:11.319 what you're saying. I mean, obviously to go back to 0:37:11.440 --> 0:37:15.799 that strict system today would cause massive problems. I think 0:37:15.800 --> 0:37:18.080 the bigger argument is if we would have stuck with 0:37:18.120 --> 0:37:20.040 that system all along, we never would have created the 0:37:20.040 --> 0:37:24.359 problem in the first place. That I'm not moralizing, right, 0:37:25.280 --> 0:37:28.439 That's a whole another conversation. I always say, we don't 0:37:28.480 --> 0:37:30.520 invest in the market as we want it to be, 0:37:30.600 --> 0:37:32.439 or as we think it should be, but rather as 0:37:32.480 --> 0:37:35.840 it is, which which is exactly what you're saying, right exactly. 0:37:36.200 --> 0:37:39.879 Um so, um, let's get back into this kind of forecast. So, um, 0:37:39.920 --> 0:37:41.719 this bounce as you're conn and so if we look 0:37:41.760 --> 0:37:44.200 at you know, the Great Depression crash or even the 0:37:44.239 --> 0:37:47.000 two you know, the dot com crash, you typically see 0:37:47.040 --> 0:37:50.880 this whatever drop retrace and then it's kind of like 0:37:50.880 --> 0:37:53.759 a technical a t a kind of bounce. Um, is 0:37:53.760 --> 0:37:56.120 that kind of what you're seeing this bounce and then 0:37:56.120 --> 0:37:57.960 the second wave down kind of like what we've seen 0:37:57.960 --> 0:38:02.680 in other market cycles and the economy. Uh, in terms 0:38:02.719 --> 0:38:04.719 of the market, I mean you're saying early next year 0:38:05.080 --> 0:38:10.479 a potential drop. Yeah obviously, Yeah. I think my view 0:38:10.680 --> 0:38:13.720 is um And you know, I could have easily because 0:38:13.719 --> 0:38:16.960 I had I was calling for a global bust um 0:38:17.000 --> 0:38:20.840 prior to the virus and UM, so I could have 0:38:20.920 --> 0:38:24.239 easily in March. I have looked at what happened, and 0:38:24.280 --> 0:38:27.080 I called for a ten percent direction market when it 0:38:27.120 --> 0:38:30.960 was thirty on the SMP. And so when we got 0:38:30.960 --> 0:38:33.880 down under three thousand, I'm going, I got my ten percent. 0:38:33.960 --> 0:38:37.160 I'm I'm bullish again. We're going, We're going when I 0:38:37.239 --> 0:38:41.240 had a melt up call then so so that last drop, 0:38:42.040 --> 0:38:44.640 you know, the thirty four percent dropped, the last of 0:38:44.680 --> 0:38:48.800 that dropped. I was wrong. I I didn't missed it too. Um. 0:38:48.840 --> 0:38:50.520 You know, I pulled away when I realized that I 0:38:50.640 --> 0:38:53.680 was wrong. But but um, but I could have easily 0:38:53.760 --> 0:38:55.960 when we were down thirty four percent said this is 0:38:56.000 --> 0:38:58.480 the beginning of the bust or the beginning of the 0:38:58.560 --> 0:39:01.279 bear market, and where you know we're heading for a 0:39:01.320 --> 0:39:06.440 thousand on SMP. UM I didn't for whatever reason. I 0:39:06.480 --> 0:39:08.640 stepped back, looked at all my work, and I said, 0:39:09.360 --> 0:39:12.600 sentiment in particular was so negative at that time. It 0:39:12.680 --> 0:39:16.400 was basically back to where we were, um in you know, 0:39:16.440 --> 0:39:18.760 the bottom of two thousand nine. And I just said, 0:39:19.440 --> 0:39:21.480 now this is it's a little bit of an overshoot 0:39:21.520 --> 0:39:23.920 from the trend. You know that you can't draw out 0:39:23.920 --> 0:39:26.400 the trend line and overshot it. But I think it 0:39:26.719 --> 0:39:29.160 overshot it for just a few days. And I said, no, 0:39:29.320 --> 0:39:32.200 I think this is a fake out. I still believe 0:39:32.200 --> 0:39:34.680 we're going to see the melt up, and so so 0:39:34.719 --> 0:39:36.920 I think we're in that, you know, in spite of march, 0:39:37.000 --> 0:39:40.120 and the march was obviously driven by a virus. Um 0:39:40.160 --> 0:39:43.200 in spite of all that, I think we're in what 0:39:43.280 --> 0:39:46.080 I call melt up for blow off stage that will 0:39:46.120 --> 0:39:52.160 take us into a parabolic I have used two as 0:39:53.000 --> 0:39:56.920 the secular market bottom. Uh and I you know, I 0:39:56.960 --> 0:40:00.000 said I couldn't go back to seventy four, but UM 0:40:00.120 --> 0:40:01.880 use a T two because I think that was the 0:40:01.920 --> 0:40:04.800 beginning of the disinflation, the peak inflation in the beginning 0:40:04.800 --> 0:40:08.720 of disinflation cycle, and most of what's driven the secular 0:40:08.800 --> 0:40:13.960 bowl market has been interest rates going from f to zero, 0:40:14.480 --> 0:40:19.920 so you know, inflation going from to zero. So um so, 0:40:20.000 --> 0:40:22.920 I really think two is kind of the beginning of 0:40:22.920 --> 0:40:26.319 this market, and we're in the last spinning of of 0:40:26.360 --> 0:40:30.480 that secular bowl market, and in that last stenning, I 0:40:30.520 --> 0:40:34.040 expect this to see a parabolic un like any we've seen. 0:40:34.200 --> 0:40:38.120 So that gets and that that parabolic is after the 0:40:38.160 --> 0:40:41.680 bust of next year. No, no, no, the parabolic is 0:40:41.719 --> 0:40:45.880 now so then uh so now so then some sometimes 0:40:46.000 --> 0:40:50.000 and I for everybody listening, timing is the most the 0:40:50.760 --> 0:40:53.160 most difficult thing, and really trying to time it, I 0:40:53.200 --> 0:40:56.279 think is a fool's Errand um so I like to 0:40:56.280 --> 0:40:58.080 look at probabilities and we look at levels, and we 0:40:58.120 --> 0:41:00.640 just watched the market unfold. So I'm not trying to 0:41:00.680 --> 0:41:03.040 stick you to any of this, but kind of what 0:41:03.080 --> 0:41:06.719 you're seeing is a continued rise this uh meltop I 0:41:06.760 --> 0:41:09.279 call blow off top whatever um where maybe we see 0:41:09.280 --> 0:41:14.400 equities rally um another leading up maybe sometime in the 0:41:14.440 --> 0:41:17.359 next six eight months and then the next big drop down. 0:41:17.560 --> 0:41:21.600 Is that kind of what you're seeing. Yeah, my numbers 0:41:21.800 --> 0:41:26.640 um are SMP forty two. And I'll be the first 0:41:26.640 --> 0:41:29.760 one to say good overshoot that. I'm pretty comfortable. Usually 0:41:29.760 --> 0:41:33.560 when I give targets, those targets are minimum targets. There 0:41:33.600 --> 0:41:36.080 there what I think the target will be. But they're 0:41:36.120 --> 0:41:39.920 also kind of I'm saying, if anything, it will overshoot them. 0:41:39.960 --> 0:41:46.120 So sp I think we could be there. UM. It's 0:41:46.120 --> 0:41:49.879 funny because I had way back in March that use 0:41:49.920 --> 0:41:53.480 those numbers and said you couldn't even see it by 0:41:53.680 --> 0:41:56.400 labor day. So then I get people three months four 0:41:56.440 --> 0:41:59.680 months later going well, you predicted labor day. I said, no, 0:42:00.400 --> 0:42:03.000 you're missing a keyword. I say, could, which is really 0:42:03.000 --> 0:42:06.359 what I really mean is, um, it's possible we could 0:42:06.400 --> 0:42:10.279 see it as early as labor day. UM. But you know, 0:42:10.480 --> 0:42:13.640 whether it's the end of this quarter, whether it's in October, 0:42:13.760 --> 0:42:16.799 I think it will be pre election. Um that we 0:42:16.880 --> 0:42:20.560 see the top are pretty close to the top. So 0:42:20.600 --> 0:42:22.879 I'm expecting those numbers to be seen in the next 0:42:22.920 --> 0:42:26.080 month or two UM. And as that, I think you 0:42:26.080 --> 0:42:31.439 can get the fifteen thousand uh, DAL thirty six thousand UM. 0:42:31.560 --> 0:42:36.040 So those and those all fall pretty much in that type. 0:42:36.239 --> 0:42:40.919 Move from here um and and I think that will 0:42:40.960 --> 0:42:44.399 be parabolic obviously if we do that in the next 0:42:44.400 --> 0:42:48.440 two months. You can envision it's basically straight up UM. 0:42:48.640 --> 0:42:53.400 And and then I expect whether it begins before the election, 0:42:53.600 --> 0:42:57.600 probably after the election, uh you know, whether it's late 0:42:57.640 --> 0:43:00.279 this year or early next. I expect the role over. 0:43:00.880 --> 0:43:04.360 As you know, tops can can full around at the 0:43:04.360 --> 0:43:06.120 top for a little while, so it doesn't mean you 0:43:07.160 --> 0:43:10.319 get a top tick and then the next step is 0:43:10.480 --> 0:43:12.880 a big step down. It might full around for weeks. 0:43:13.520 --> 0:43:16.239 But either way, I have no idea. Either way, I 0:43:16.280 --> 0:43:19.040 expect most of the first half of next year to 0:43:19.080 --> 0:43:23.600 be a bear market UM, and I'm calling for again. 0:43:23.800 --> 0:43:29.399 Potentially it could be sixty percent. It could be, but 0:43:29.600 --> 0:43:31.840 I think there's a real possibility of an eighty percent 0:43:31.880 --> 0:43:38.319 bear market in the smp UM, and obviously that that 0:43:38.400 --> 0:43:41.720 will look seed the I think we had a sixty 0:43:41.719 --> 0:43:46.200 plus percent bear market in two thousand eight nine UM. 0:43:46.239 --> 0:43:50.560 But that makes sense where I think we're the secular peak. UM. 0:43:50.640 --> 0:43:54.120 What gets confusing is, as I you know I mentioned 0:43:54.160 --> 0:43:57.160 to you earlier, I'm not in that camp that says 0:43:57.200 --> 0:44:00.680 this is the end. There's another recovery cycle. But this is, 0:44:01.040 --> 0:44:03.600 in my opinion, the secular top in the stock market. 0:44:04.000 --> 0:44:07.760 So you can have a cyclical bull market from say 0:44:07.760 --> 0:44:14.600 twenty late through six or seven or eight UM and 0:44:14.719 --> 0:44:17.359 not get anywhere near the highs that we reached this year. 0:44:17.760 --> 0:44:22.799 So let's say we hit SMP you know you can, 0:44:23.040 --> 0:44:25.600 and then you go eight percent down. You can have 0:44:25.640 --> 0:44:29.680 a run from a thousand on SMP or on the 0:44:29.800 --> 0:44:34.520 SMP back to three thousand or thirty four hundred, and 0:44:34.560 --> 0:44:37.240 you're still way short of where you got this this time. 0:44:37.280 --> 0:44:40.160 So so there'll be a cyclical bull market to follow this. 0:44:40.320 --> 0:44:44.839 But secular, I think is peaking the cycle, got it 0:44:45.040 --> 0:44:48.520 UM now that and and that secular peak after this 0:44:48.840 --> 0:44:54.320 UM after is at like another six eight year cycle. Yeah, 0:44:54.360 --> 0:44:57.440 I think, because it's probably gonna be uh you know. 0:44:57.640 --> 0:44:59.960 And and one thing that I've learned over many years, 0:45:00.000 --> 0:45:03.359 as I could write the book on this UM is 0:45:03.480 --> 0:45:07.759 that leadership and I'm not unique to other people understand this, 0:45:07.840 --> 0:45:12.400 but but I feel strongly about this. Leadership changes each cycle, 0:45:12.600 --> 0:45:16.680 or different leadership each cycle. So, you know, seventies were 0:45:17.040 --> 0:45:22.280 energy and commodities, the eighties were the consumer growth stocks, 0:45:22.440 --> 0:45:27.359 the you know, the food and beverage and drugs, etcetera. UM. 0:45:27.480 --> 0:45:31.359 The nineties was obviously teching couple goods. Two thousand's was 0:45:31.600 --> 0:45:35.960 finance and housing. Um, two thousand tens has been the 0:45:35.960 --> 0:45:40.360 social media and other tech you know area. Um, I 0:45:40.400 --> 0:45:42.359 think the next cycle is going to be very much 0:45:43.520 --> 0:45:47.080 mirroring the seventies. It's gonna be commodities and industrial stocks again. 0:45:48.120 --> 0:45:52.480 So so it will be What happens is those leaders 0:45:52.480 --> 0:45:55.880 of the previous cycle face all kinds of distribution. So 0:45:55.920 --> 0:45:58.399 every time they lift their head after that eight percent drop, 0:45:59.120 --> 0:46:01.680 you know there's a different Another level of people would 0:46:01.680 --> 0:46:04.279 say I'm taking my money out. You know, I got 0:46:04.320 --> 0:46:06.760 my costs back, or I'm I'm you know I waited 0:46:07.400 --> 0:46:09.359 to get this far. I'm gonna take it and run. 0:46:09.719 --> 0:46:12.319 So you know, so you have distribution all the way 0:46:12.320 --> 0:46:17.399 through the next cycle and maybe two cycles sometimes. Yeah. So, UM, 0:46:17.760 --> 0:46:20.160 I want to jump into the confident and saying there's 0:46:20.160 --> 0:46:24.000 not gonna be a winner, right, So um jumping into 0:46:24.040 --> 0:46:26.720 the UH. As you said, we had the different cycles 0:46:26.719 --> 0:46:28.759 of different types of assets that cycled back in the 0:46:28.800 --> 0:46:31.680 seventies and now again you think the commodity, the commodities, 0:46:31.719 --> 0:46:34.959 the medals and hard assets things like that. Um. So 0:46:35.239 --> 0:46:38.520 I know you've put out several signals on gold and silver. 0:46:38.840 --> 0:46:43.680 I think you're calling forty five dollar silver UM. Is 0:46:43.719 --> 0:46:46.680 that leading up into this uh in in in with 0:46:46.719 --> 0:46:50.640 this market parabolic run and then also crashing or do 0:46:50.680 --> 0:46:53.680 you think there's a way that gold UM continues to 0:46:53.719 --> 0:46:57.919 do well even through a crash. Yeah. Up until UM 0:46:57.920 --> 0:47:01.280 probably the last several months, I was in the camp 0:47:01.360 --> 0:47:05.960 that felt that UM, gold and silver would would get 0:47:06.000 --> 0:47:09.120 hit pretty much. Gold probably less than the market, but 0:47:09.200 --> 0:47:11.440 silver could be hit as hard as the market. So 0:47:11.520 --> 0:47:15.600 I had calls of you know, UM gold falling well 0:47:15.600 --> 0:47:20.640 below a thousand and silver falling to single digits again. UM. 0:47:20.800 --> 0:47:27.320 I now am of the opinion that UM silver probably 0:47:28.080 --> 0:47:30.160 gets the thirty five and then corrects back to the 0:47:30.200 --> 0:47:35.120 mid twenties UM, so far less than the market gold 0:47:35.239 --> 0:47:42.040 gets to, whether it's hundreds of minimum, UM probably corrects 0:47:42.040 --> 0:47:45.359 back to, say eighteen hundred. So I don't think you'll 0:47:45.360 --> 0:47:49.600 see anywhere near the damage in those that you'll see 0:47:49.600 --> 0:47:54.719 in the broader market, and actually they'll be defensive areas UM. 0:47:55.000 --> 0:47:58.000 You can maybe even before I would say you know, 0:47:58.040 --> 0:48:00.840 we're heading for a deflationary bust. Everything going down except 0:48:00.840 --> 0:48:05.080 maybe treasuries and the dollar. UM. Now i'd say, you know, 0:48:05.200 --> 0:48:09.120 the pressure medals probably they're going down, but they're not 0:48:09.160 --> 0:48:11.279 going to go down nearly what the market is, so 0:48:11.320 --> 0:48:15.080 they've become a defensive holding. Yeah, and and my my view, 0:48:15.440 --> 0:48:17.400 the next cycle, what you know about is is a 0:48:17.440 --> 0:48:20.279 big one. So um, you know, I think gold can 0:48:20.320 --> 0:48:22.960 get to ten thousand plus and silver three hundred dollars 0:48:23.040 --> 0:48:27.400 plus um. So so you know, do you really want 0:48:27.440 --> 0:48:29.640 to get cute with these? You know, if you're a trader, 0:48:30.080 --> 0:48:32.919 certainly you can. If you're an investor, you can hold 0:48:32.960 --> 0:48:36.160 these through the through the bus I think, yeah, I 0:48:36.239 --> 0:48:38.879 love that, you know, um in two in two thousand eight, 0:48:38.880 --> 0:48:42.279 as you said that equities fell about six, gold only 0:48:42.320 --> 0:48:45.799 fell about so it fell, but it was a much 0:48:45.840 --> 0:48:51.600 better place to be losing. Of course, the response to 0:48:51.640 --> 0:48:54.600 the crash, which was massive money printing, caused gold to 0:48:54.640 --> 0:48:56.839 shoot right up. And of course you're saying the exact 0:48:56.880 --> 0:48:58.879 same thing and this cycle that the response will be 0:48:59.200 --> 0:49:01.279 instead of what was in two thousand and eight it 0:49:01.320 --> 0:49:04.280 was about a trillion. Now you're talking twenty to thirty trillion. 0:49:04.520 --> 0:49:06.279 So look at the magnitude of what that can do, 0:49:06.320 --> 0:49:08.080 which is obviously I'm guessing why you're getting too that 0:49:08.120 --> 0:49:14.919 ten absolute and it's a you know, it's a global bus. Um, 0:49:15.040 --> 0:49:18.800 we're gonna get hard, but other other parts of the world, 0:49:18.920 --> 0:49:22.640 like Europe, probably get even harder. Every central bank is 0:49:22.680 --> 0:49:26.000 gonna be putting money out there as fast as they can. So, 0:49:26.000 --> 0:49:31.239 so gold on worldwide basis gonna cut a bit. Now 0:49:31.280 --> 0:49:34.480 be me being in that Austrian coult or really you know, 0:49:34.480 --> 0:49:38.839 believing in in in sound money, gold bitcoin as well. Um. 0:49:39.360 --> 0:49:42.399 I think that on top of that, we also see 0:49:42.440 --> 0:49:44.680 the sentiment changing, so I think we have less and 0:49:44.760 --> 0:49:48.839 less confidence in the fiat currencies, and so that will 0:49:48.920 --> 0:49:51.479 only add extra fuel to the fire of what gold 0:49:51.520 --> 0:49:54.680 is doing. I think I agree with that. I think 0:49:54.760 --> 0:49:59.839 you you're gonna here for many years. Um, the does 0:50:00.080 --> 0:50:01.920 or to go back on a gold standard, and probably 0:50:01.960 --> 0:50:06.000 we're we're closer to that today in terms of a 0:50:06.120 --> 0:50:11.719 mindset than ever before or certainly in the last many decades. Um. 0:50:12.520 --> 0:50:16.080 The only problem is it just it's not it's not practical. 0:50:16.120 --> 0:50:21.360 It can't happen because the minute we stop the pring press, 0:50:22.000 --> 0:50:25.840 we've got you know, hundreds of trillions dollars of debt 0:50:26.800 --> 0:50:29.920 you know, coming right back at us. So so I 0:50:30.000 --> 0:50:34.120 don't see how that happens until after a total collapse, 0:50:34.440 --> 0:50:37.200 and then I think it could happen. Yeah, I mean 0:50:37.200 --> 0:50:40.399 a total collapse where all the currencies collapse, people lose 0:50:40.480 --> 0:50:43.760 complete trust and currencies and the only way to restore trust, 0:50:43.760 --> 0:50:45.719 because everything has to be revolving around trust, So the 0:50:45.719 --> 0:50:47.279 only way to restore trust would be to go back 0:50:47.280 --> 0:50:50.239 to at least some sort of a fractional reserve or 0:50:50.400 --> 0:50:54.280 gold system or something like that. Um, all right, UM, 0:50:54.320 --> 0:50:57.960 I'm curious what are your thoughts on bitcoin. I do 0:50:58.120 --> 0:51:03.440 not follow bitcoin, and I I I'm skeptical. Uh, and 0:51:03.560 --> 0:51:07.960 I fully admit that it could be a huge, huge winner. UM, 0:51:08.160 --> 0:51:11.239 I just don't. I don't think we know enough yet 0:51:11.400 --> 0:51:15.080 to know how it haven't been battle tested. Isn't that? 0:51:15.480 --> 0:51:19.240 It isn't that what gives you the asymmetric upside, because 0:51:19.239 --> 0:51:22.560 it doesn't you know, information is not not not out there, 0:51:22.560 --> 0:51:26.560 it's not. But but right now you've got so many 0:51:26.600 --> 0:51:31.400 particularly fast players in it, a lot of retail but 0:51:31.480 --> 0:51:35.400 certainly a lot of um guys that didn't necessarily do 0:51:35.440 --> 0:51:37.560 a great job as hedge fund managers. You know, guys 0:51:37.560 --> 0:51:41.440 that I had big followings but then blew up. And 0:51:42.239 --> 0:51:44.080 then you're talking about but we don't have to name 0:51:44.120 --> 0:51:49.000 any names, and and so I just think it's easy 0:51:49.200 --> 0:51:51.920 to kind of and and certainly it fits a narrative 0:51:52.040 --> 0:51:56.360 that UM people are very distrustful of the central banks 0:51:56.400 --> 0:51:59.279 and the governments, and so it fits a narrative that 0:51:59.360 --> 0:52:02.680 this goes out side of that. And UM, I just 0:52:03.440 --> 0:52:05.600 I really want to see how it comes through the 0:52:05.640 --> 0:52:10.160 bus before I'm gonna UM say yeah, this is a long, 0:52:10.560 --> 0:52:15.320 long lived UM alternative to gold. For example, what about 0:52:15.440 --> 0:52:17.759 what about people like Paul Tutor Jones, you know, one 0:52:17.800 --> 0:52:20.759 percent portfolio allocation wishing now he would put two percent 0:52:20.800 --> 0:52:24.080 allocation towards it, But I mean one percent portfolio allocation 0:52:24.239 --> 0:52:28.919 just to UM sort of kind of set that portfolio better. Yeah. 0:52:29.160 --> 0:52:32.360 I I operate on you know, the reason as you 0:52:32.440 --> 0:52:35.480 see me on Twitter, some people think is ego or 0:52:35.840 --> 0:52:39.759 you know, stubbornness or whatever. I'm a conviction guy. If 0:52:39.920 --> 0:52:43.240 if I have you know, fourty seven years of stuff 0:52:43.280 --> 0:52:47.800 that can help me have conviction, I'll stand by something 0:52:47.840 --> 0:52:51.480 that I say, and where everyone else is folding, I 0:52:51.520 --> 0:52:54.399 can't have conviction bitcoin, So it just doesn't. I'd much 0:52:54.520 --> 0:52:57.800 rather be in gold and silver because I have complete 0:52:57.800 --> 0:53:01.560 conviction that you know, I commit shit on short term moves, 0:53:02.040 --> 0:53:05.000 but I know where it's going, got it? Got it? Okay, 0:53:05.080 --> 0:53:07.880 makes sense and I agree with that. Um, I always 0:53:07.920 --> 0:53:09.880 tell people the same thing. It's all about the conviction. 0:53:09.960 --> 0:53:13.560 Like I can't tell you the exact allocation or percentage 0:53:13.640 --> 0:53:15.759 or whatever, like you need to know how you feel 0:53:15.760 --> 0:53:19.680 about it. So you got your just gotta fit your 0:53:20.719 --> 0:53:24.120 you know your risk um parameters. You know, if if 0:53:24.160 --> 0:53:27.319 you're a guy that you knows gets nervous and can't 0:53:27.360 --> 0:53:32.160 sleep on on something, don't go there. Yeah exactly. Now 0:53:32.200 --> 0:53:33.840 I know we've gone long. I want to wrap it 0:53:33.920 --> 0:53:35.719 up here. I'd just like to ask kind of maybe 0:53:35.760 --> 0:53:37.480 one more question that we'll kind of wrap it up with. 0:53:37.560 --> 0:53:42.120 But um, obviously you've given us, uh some pretty uh 0:53:42.239 --> 0:53:45.120 you know, pretty good calls and when we have levels here, 0:53:45.160 --> 0:53:47.960 you've kind of given us time frames, etcetera. So how 0:53:48.000 --> 0:53:50.720 do you how how are you personally or how would 0:53:50.719 --> 0:53:53.480 how would how do you see playing this out? So? Um, 0:53:53.560 --> 0:53:55.680 do you stay long in the market to ride, let 0:53:55.680 --> 0:53:57.920 the winners run long and then you just set trailing 0:53:58.000 --> 0:54:01.480 stops to capture profit when the market draw? Are you 0:54:01.520 --> 0:54:03.600 trying to time the market? Like? How how do you 0:54:03.640 --> 0:54:06.960 play this? And well, yeah, I really stay away from 0:54:07.000 --> 0:54:12.399 any kind of UM trading talk because for two reasons, One, 0:54:13.239 --> 0:54:17.040 I'm not a trader, but two I have to walk 0:54:17.280 --> 0:54:19.960 a really careful line as a strategist. I'm not a 0:54:20.000 --> 0:54:25.080 registered investment advisor. UM, and people get mixed up between 0:54:25.080 --> 0:54:27.759 what's advice and what's you know, As long as I 0:54:27.840 --> 0:54:33.480 stay talking my macro, I'm fine. Uh. And And also, UM, 0:54:33.560 --> 0:54:37.879 you know, you really have so many different people out 0:54:37.920 --> 0:54:41.040 there with different risks UM. You know, some a risk 0:54:41.080 --> 0:54:44.319 of ourse something or not. People have different financial situations. 0:54:44.320 --> 0:54:48.359 So I really hesitate even if I could providing any 0:54:48.400 --> 0:54:51.279 kind of blanket advice. What I will say is I 0:54:51.320 --> 0:54:56.080 do think um that next year is a year where 0:54:56.160 --> 0:54:59.680 kepital preservation is going to be supreme. Uh. And as 0:54:59.680 --> 0:55:02.520 I said before, I think the dollar and you know, 0:55:02.600 --> 0:55:04.720 I'm a bear on the dollar short term. I'm looking 0:55:04.719 --> 0:55:08.960 for five on the dollar here on d X y UM. 0:55:09.000 --> 0:55:13.239 But I think the dollar will will be one of 0:55:13.360 --> 0:55:16.279 only two things. The US treasuries and the dollar will 0:55:16.280 --> 0:55:21.400 be two things that will buck the downside in the bust. UM. 0:55:21.840 --> 0:55:24.560 I think we'll see the ten year down to zero 0:55:25.600 --> 0:55:28.919 uh next year early next year. UM. And I think 0:55:28.920 --> 0:55:33.160 the dollar could go as high as one forty so UM, 0:55:33.200 --> 0:55:37.200 so the you know, those are places where you can hide, um, 0:55:37.239 --> 0:55:41.719 when you deem it time to preserve capital. You just 0:55:42.239 --> 0:55:44.719 I would also say one last thing, and that is 0:55:44.840 --> 0:55:51.000 that And I could be wrong, but I suspect if anything, um, 0:55:51.040 --> 0:55:53.960 this this bear market is going to be faster than 0:55:54.000 --> 0:55:57.400 two thousand eight nine, um, just because of all the 0:55:57.440 --> 0:56:00.960 derivative exposure and leverage in the system. Those things speed 0:56:01.000 --> 0:56:04.960 things up and make them exacerbate them. So so I'm 0:56:05.000 --> 0:56:08.279 thinking this thing you could see three or four or 0:56:08.320 --> 0:56:11.839 five thousand point down down, do you know? I don't know. 0:56:12.400 --> 0:56:15.560 I just think, um, it's gonna happen very fast when 0:56:15.600 --> 0:56:20.359 it happens. Yeah, I can appreciate that answer, and uh yeah, 0:56:20.400 --> 0:56:22.799 you definitely definitely can be giving advice to people. It's 0:56:22.800 --> 0:56:25.560 such a big broad subject. But um, for those listening, 0:56:25.680 --> 0:56:30.040 let me try and decipher that just a little bit. Um. 0:56:30.080 --> 0:56:32.640 You know he talked you You talked about a very 0:56:32.719 --> 0:56:35.239 sharp and severe drop, but then of course another huge 0:56:35.280 --> 0:56:37.920 cycle up. So for those that have a very long 0:56:37.960 --> 0:56:40.960 time preference, UM, you could just hold through that as 0:56:41.000 --> 0:56:43.239 you talked about with the gold cycle, probably might be 0:56:43.280 --> 0:56:48.200 a good way to do that, for sure. In the medals, right, 0:56:48.760 --> 0:56:52.520 but you know, nobody wants to sit through draw down 0:56:52.680 --> 0:56:56.560 or draw down or whatever that is. So follow the trends, 0:56:56.600 --> 0:57:00.640 look at your levels. I like to manage risk, so locations, 0:57:00.680 --> 0:57:04.040 position sizes, and of course stop losses. Um. I'd recommend 0:57:04.080 --> 0:57:05.960 that for anybody. Of course, everybody has to figure out 0:57:05.960 --> 0:57:09.480 what their own risk management is. Um. But but look 0:57:09.560 --> 0:57:12.799 to those tools, because yeah, nobody wants to sit through 0:57:12.800 --> 0:57:15.000 an apercent draw down. And as as David is saying, 0:57:15.560 --> 0:57:17.160 the dollar is going to be strong, so it might 0:57:17.200 --> 0:57:20.480 not be a bad place to hide out. UM. Okay 0:57:20.760 --> 0:57:22.800 did I did I side for that? Okay, yeah, that 0:57:22.880 --> 0:57:25.680 was fine, And yeah, I think most people know. But 0:57:25.800 --> 0:57:28.160 you know, you drop, you have to double to get 0:57:28.160 --> 0:57:32.120 your money back, so that's right. That really become costly, 0:57:32.280 --> 0:57:35.960 and especially if this is a secular top um for 0:57:36.000 --> 0:57:39.200 those that are in indexes, you may never see the 0:57:39.280 --> 0:57:43.280 levels again that you see in the next month or two. Yeah, 0:57:43.480 --> 0:57:46.400 I think we'll see a change in the investing market 0:57:46.400 --> 0:57:48.480 and index the way index funds are used. So that's 0:57:48.480 --> 0:57:51.680 a good point. Um. Great, well, that is so much 0:57:51.680 --> 0:57:54.000 good information, David. I know we went long. I really 0:57:54.040 --> 0:57:57.040 appreciate you sticking around and given us so much good information. 0:57:57.080 --> 0:57:59.560 Anything else that you need to add or want to add, UM, 0:57:59.640 --> 0:58:01.960 I will just echo what you just said. I think 0:58:02.160 --> 0:58:07.200 indexes have You know, in a disinflationary environment, indexes thrive 0:58:07.360 --> 0:58:12.320 because it's all about POSI P multiple expansion in an 0:58:12.400 --> 0:58:14.800 environment where I'm describing wen talk bunds. But in an 0:58:14.880 --> 0:58:17.440 environment where I'm describing and its going from zero to 0:58:17.520 --> 0:58:19.640 fifteen or twenty again, I think it could reverse the 0:58:19.760 --> 0:58:25.080 entire disinflation cycle. UM. Over the next decade. UM, you're 0:58:25.080 --> 0:58:28.680 gonna have the reverse, which means multiple contraction. That is 0:58:28.720 --> 0:58:32.040 not an environment for index funds. So you know, we've 0:58:32.080 --> 0:58:34.480 been lucky in this cycle because people could just throw 0:58:34.520 --> 0:58:37.360 their money in index fund and probably I'll perform most 0:58:37.440 --> 0:58:41.680 active managers in the environment I see coming after this bus, 0:58:42.240 --> 0:58:45.560 I think it's gonna be quite the opposite. Great. What 0:58:45.640 --> 0:58:48.080 a great note to end on, UM, David. I appreciate 0:58:48.120 --> 0:58:50.120 you so much for taking this time with us, UM, 0:58:50.160 --> 0:58:52.560 for everybody listening. I am going to make sure to 0:58:52.680 --> 0:58:56.720 link in the show notes. UM. You do a quarterly newsletter, UM, 0:58:56.760 --> 0:58:58.560 so if anybody wants to get more information from you, 0:58:58.600 --> 0:59:00.520 I'll have a link to that as well. Of course, 0:59:00.560 --> 0:59:02.520 as you've already said, we've talked about, you're very active 0:59:02.520 --> 0:59:05.480 on twitter UM. I would highly recommend to follow David again. 0:59:05.520 --> 0:59:08.640 I'll link to his twitter um down below in the 0:59:08.640 --> 0:59:11.360 description as well anywhere else that they should follow. No, 0:59:11.520 --> 0:59:15.400 that's good, that's perfect. Okay, So that's it. So again, David, 0:59:15.400 --> 0:59:17.800 thank you so much. Okay, thanks Mark, really enjoying