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$20k GOLD By 2030! 🚨 And THIS Could happen to The SILVER Price soon! 🚨 · SILVER / GOLD / $UFD: Surviving Global Economic Shifts | RONS BASEMENT

0:00
Gold obviously has broken out to new highs.
0:03
Silver has a long ways to go to get to highs, but it is, you
0:07
know, moving above some significant resistance levels,
0:10
like the most recent one being 30.
0:13
I think your next stop on silver is probably 3536.
0:16
Pretty short term, could move to 38 and just move right through
0:20
that. And then ultimately, I have a
0:22
call for silver of $60. Today we have a very special
0:30
guest. David Hunter is someone who I
0:33
followed for the last three or four years.
0:36
He's known for making bold predictions about the economy,
0:40
about the market, about the silver and gold price.
0:43
But in my opinion, there's some other words we can use to
0:46
describe him. He's experienced, he has
0:48
credentials, he has courage and he has an accurate track record.
0:54
We're going to ask him where we might be one year from now with
0:57
the markets, with gold and silver, with the precious metal
1:01
mining stocks. David, welcome to Ron's
1:03
basement. Well, thank you, Ron.
1:05
Thanks for having me on. Good to see you.
1:07
Yeah. Good.
1:08
Good to see you as well. And and David and I share having
1:12
gone to DePaul University in Chicago.
1:14
So we'll put our put our minds together here, but we're really
1:17
here to hear from you. What are you seeing in the
1:20
markets now, David? Anything that's top of mind
1:23
about what's happening that you'd like to share with us?
1:26
Sure. Yeah, basically, I think
1:29
obviously NVIDIA has been the big story of today or from last
1:33
night on. And what I see that is basically
1:37
is it's cleared the way for this market to move higher.
1:41
It had paused for just a few days and waiting for that.
1:46
And you had a lot of people calling for, you know, time for
1:49
a pull back 'cause it's, you know, high expectations.
1:52
How how much more can it outdo expectations?
1:56
But again, NVIDIA proved that they are the king dog out there
2:01
right now and just delivered and exceeded even the whispers and
2:05
up it goes. So my, my view is that we are in
2:08
a melt up, melt up that's going to have stair steps as every
2:13
market does. But I think the last stair step
2:17
which ended I think in April, I think it was April 19th, it
2:21
bottomed and we've been up like 6% this this month.
2:27
I think it's going higher without you may not see another
2:31
5% pull back before the top. You could.
2:34
There's nothing that says it has to do it this way.
2:36
But you know, yeah, 10% pull back in October or 10%
2:41
correction back in October and then you had the 5% one in
2:45
April. I really think you're not going
2:47
to see them exceed that probably so, so I think we're in that
2:51
melt up phase. I think it's going to just get
2:54
steeper and steeper as we move towards the top.
2:57
I call this a top of a 42, what will be a 42 year circular bull
3:02
market that started in August of 1982.
3:07
We've had several cyclical bulls and bears within that, but I
3:11
think we're coming to the end of a secular bull market, a major
3:15
one that will end in a final blow off.
3:19
So when you say a final blow off any, any targets like with the
3:23
S&P 500 or the Dow that you're looking at?
3:26
Sure. I, I had pretty high targets
3:29
already and in my January letter I raised my targets to, I had a
3:34
six to seven thousand range for the S&P.
3:37
I've just moved that to 7000 and my convictions are that if
3:42
anything it's going to exceed my targets.
3:44
So and I moved up on the Dow to 55,000 from 48.
3:49
I moved up on the NASDAQ from 20,000 to 23,000 and on the
3:55
Russell I had a, a number that was way above the street, but,
3:59
and people were pretty negative on the Russell, but I had a 3000
4:02
target and I've raised that to 3300.
4:05
So, you know, again, I, I raised them a while back, but those are
4:09
my current targets. And as I said, I wouldn't be
4:13
surprised if they prove conservative.
4:17
And and I know you have another scenario that unfolds after we
4:21
hit those targets and we're going to talk about that.
4:23
But how soon do you think these these high targets, these blow
4:27
off tops could be could be hit? Yeah, it all, it all really
4:31
depends on do we get consolidations along the way or
4:34
are we really going to see this thing just start building into
4:38
a, a crescendo into a parabolic If we really take off and then
4:43
we see a buying Stampede here in the next month, you could be
4:47
there by sometime this summer. If it, you know, if you have
4:51
pauses along the way, like the, you know, even if they're a week
4:54
long pause like we just had or the month long pause we had
4:57
before that, it stretches it out and it could go into the fall.
5:01
I'm pretty sure we're going to see the top before the election.
5:04
I'm pretty sure we may see the top by Labor Day.
5:08
But again, I, I get myself in trouble because I, I just say,
5:12
maybe it's on these things and people write that down and say,
5:16
you told me it was going to be there by, you know, this date
5:20
and it's not, well, this is the end of a 42 share circular bull
5:24
market. I'm not going to be able to
5:26
precisely tell you, you know, when it's going to end.
5:29
I'm only telling you we're in the last stages.
5:32
Yeah. You're, you're sharing with us
5:34
based on your analysis, your experience, what you think could
5:38
unfold. And I have a question for you.
5:41
As we, as we look at these markets like, and I think what
5:45
you're what you're referring to, it seems to me like the market
5:48
would be defying gravity. Is that, is that because of
5:53
investor psychology? Is that because of underlying
5:57
fundamentals or how? How does that all play out?
6:00
Yeah, I'll, I'll point to a couple things.
6:04
If you look back to the nasdaqwherethe.com bubble in 99,
6:09
two thousand you saw a similar shape where it built and then,
6:13
you know, you people were calling for a top in 98, I can't
6:16
remember. And by 99 it was, Oh yeah, we're
6:19
topping. And then six months later it's
6:21
higher again by a lot. And then finally topped out
6:24
first quarter 2020 over of 2000. That's a way a, a, you know, a
6:31
parabolic final move takes place as it just gets steeper as it
6:35
goes. A lot of it is psychology.
6:39
What the people, and I'm talking about the pros, whether they
6:42
admit it or not, a lot of what they call is based on momentum.
6:49
You know, the same people that won't like a market at 4000 love
6:52
it at 5000. So and you know, the
6:56
fundamentals change that much. Not really, but boy, they got
6:59
they sure like it that way. And that's kind of where I think
7:02
we're at in the market is, as you know, a lot of professionals
7:06
fought this thing all the way up.
7:08
It was a bear market rally from 3500 all the way up to 4600.
7:13
And then it corrected pretty sharply and then went again.
7:16
It was only when we made new highs where you started hearing
7:19
people say, well, I guess it is a bull market.
7:22
And you know, I'm talking about, you know, professionals.
7:25
And I think here with the what in the video just did, you're
7:29
going to see the what I say could be a buying Stampede as
7:34
FOMO kicks in as those that have been defensively postured, not
7:38
necessarily out of the market, but defensively postured start
7:43
realizing this thing has legs and say, you know, we're lagging
7:47
the market. We got to get on board and more
7:49
aggressively. And if if so much of the street
7:53
decides that one time and retail being momentum driven as well,
7:58
decides they got to get more invested, all of a sudden you
8:01
got a very concentrated period of time where everybody's on one
8:05
side of the boat. Now, you know, back in 2022,
8:09
which is one of the reasons I said there was a melt up that
8:11
wasn't going to follow. Everybody was on one side of the
8:15
boat, but they were on the Paris side.
8:17
And it was pretty clear to me. I had, through 50 years of doing
8:20
this, I had rarely seen such a universal belief that things
8:25
were not good and we're going down.
8:27
Everybody was just convicted that that was, you know, that
8:30
was the way it was going to go. And they fought that changing
8:35
that belief for quite a while. But they are now.
8:37
I think you're seeing what we always see, which is psychology
8:41
does kick in to even the pros and they start saying, hey, you
8:45
know, we've broken up the new highs.
8:48
And when I thought it was a double top, it wasn't a double
8:50
top. It's then you go in this last
8:53
stage here, we, you know, we've we've got to get on board.
8:56
What I think you'll hear though that a company that psychology
9:00
is a belief that not necessarily right here because the feds kind
9:06
of still fighting it. But I think we'll get numbers
9:09
here as we go through the the next few months that say
9:13
inflation slowing down, the economy slowing down and that
9:17
they will get back on board to rate cuts and and the Fed
9:21
tightening. And that's obviously not the
9:25
belief of today. the Fed members are out there talking about
9:29
more, you know, even though it's not a high probability, the
9:32
probability of cuts are there. I mean, if hikes are there.
9:36
So but I think that'll change here in the next month.
9:39
And you know the streets going to get on board to the idea that
9:43
Fed tightening's over and that there's a whole cycle ahead of
9:48
us. I don't believe that, but that's
9:50
what I think will be the narrative.
9:52
Well, so, so you talked about everybody being on one side of
9:56
the boat and, and it feels like a lot of times that's a good
9:59
time to run to the other side of the boat where nobody is.
10:02
I think a lot of our audience right now with my channel are,
10:07
are very interested in silver, gold and the precious metal
10:11
mining stocks. As you as you think about this
10:13
melt up phase that we're heading into, any commentary on what you
10:18
see going on with the the those prices?
10:21
Yeah, very definitely. So I'm I got beat up pretty bad
10:24
for a while because I was, I remain bullish through a pretty
10:29
rough time in the metals. Basically it looked to me back
10:32
in the spring of 2022 as if they were going to break out and and
10:39
then the dollar went the other way in a big way.
10:42
I mean, we had a big climb in the dollar over the next six
10:46
months and the metals went South.
10:49
And so it wasn't until basically fall of 2022 that we finally
10:55
bottomed in metal, September, fall in the miners.
10:57
But September, October or somewhere in there and we've
11:02
been kind of battling our way back since then.
11:07
They really started to pick up speed fourth quarter last year
11:12
and into this year and have now really established themselves in
11:16
a new bull market and gold obviously has broken out the new
11:20
highs. Silver has a long ways to go to
11:23
get to highs, but it is, you know, moving above some
11:26
significant resistance levels like the most recent one being
11:29
30. I think your next stop and
11:32
silver is probably 3536, pretty short term could move to 38 and
11:37
just move right through that. And then ultimately I have a
11:40
call for silver of $60.00 and I've said of late it's 60, but
11:45
if we get through sixty we could see 75 very quickly.
11:49
And on gold, which is, you know, 2354 hundred, I think 3000 pre
11:56
bust now we'll talk about what pre bust means later, but in
12:01
basically this year, I think you could see 3000 on gold and I
12:05
think that number is going to probably be conservative.
12:09
So they're both definitely in gear right now in a in a bullish
12:13
mode with a lot of upside ahead and even more upside ahead for
12:19
the miners that, you know, move up when they move.
12:22
When the when the mining stocks eventually catch up with the
12:25
with the increase in the price of gold and.
12:27
Silver. Yeah, it's taking them a while.
12:28
Yeah, they're they're lagging a little bit.
12:30
I was talking to Dan Wilton, the CEO of First Mining Gold
12:34
yesterday and he has a chart that shows the gold price and
12:37
how the mining, the GDX, the GDXJ and in particular the
12:41
junior mining stocks have really lagged behind the gold pricing.
12:45
And we, I pointed out them and said, isn't that supposed to be
12:48
the inverse? Aren't, you know, the miners
12:50
supposed to have leverage to the gold price and the junior miners
12:53
even more so we could be in for some some big moves in the in
12:57
the mining stocks. Yeah, I very much think so.
13:00
I have pretty aggressive targets for all of them and they're
13:04
long. I mean, I've long held targets,
13:06
but I think they're going to be realized this year.
13:08
I see GDX going up to 65, GDXJ to 100, SIL to 75 and SILJ to
13:20
35, so there's some big moves there and again, I wouldn't be
13:24
surprised if I end up being conservative on those.
13:28
Wow. And and you're saying that could
13:29
potentially happen this? Year, yes, I think, I think if
13:34
you look to 2016 or the period after the pandemic in 2020, you
13:41
know, 2020 we had that huge move between end of March and August
13:47
and I, I see something similar to that again here, except
13:50
bigger. Wow.
13:52
Well, you, you, you've officially become very popular
13:54
in Ron's basement with those predictions.
13:57
So we're going to fly you here on a private jet.
14:01
When, when, when those numbers hit.
14:04
Quick question for you. Today is the 23rd of May 2024.
14:09
Both today and yesterday have been down days in the gold
14:13
market and silver market and and the the person joining us right
14:17
now, the viewer most certainly follows the gold and silver
14:21
price very closely. I like to say that you know,
14:24
nothing goes up in a straight line.
14:26
There will be pull backs with the gold price and the silver
14:30
price. Any any words of encouragement
14:32
or commentary in that we're? Going to sure if people follow
14:35
me on Twitter, they would have seen me today saying to a couple
14:40
people, turn your screens off basically go find something
14:44
productive to do. So my, my belief is people are
14:50
way too short term in this stuff and what they have to realize.
14:53
I mean, I, I tell them at the bare minimum, look at weeklies
14:56
because, you know, they actually last two days feels very bearish
15:00
until you look at it on a weekly and you realize, you know, it's
15:03
higher highs, higher lows. It's not, it's nothing more than
15:07
that. And the market has to keep
15:11
cleansing itself. And, you know, if, if it burns
15:15
itself out, it's not going higher.
15:17
So these, these stair steps are a process of building that wall
15:21
of worry that allows it to continue.
15:24
And we've got a long run to go. So it needs that big wall of
15:26
worry. And obviously from a fundamental
15:29
standpoint, people will get nervous maybe maybe some of the
15:34
sell off is because they think that, you know, if equities go
15:39
up, they have to go down, the metals miners have to go down.
15:42
But that's not the case. I mean, I think we are we, we
15:46
suffer from recency bias an awful lot of the time.
15:49
So when I hear people out on CNBC or elsewhere telling you
15:53
that, you know, typically the metals go counter counter to the
15:58
equity markets, I go go back and look at 2001 to 2011.
16:03
You had a pretty good bull market, if I remember in
16:05
equities and it was one of the biggest markets in in metals
16:09
that we ever had. So, you know, they don't always
16:11
move opposite to each other and I don't think they're going to
16:14
move opposite during this next few months.
16:16
Right, right. And I think even with the gold
16:18
here over the last three or four months, the dollar remained
16:22
relatively strong, right and and gold performed very well.
16:26
So these these kind of common beliefs that are prevalent at
16:32
times aren't always accurate, I guess we could say.
16:35
Yeah, the market loves to kind of throw your curveballs if if
16:38
you think there's if you think it's a dogmatic market out there
16:42
and that there's a formula you're going to be taught very
16:46
quickly, market will do the opposite of what you expect many
16:49
times. So I have AI have a huge or not
16:53
a huge, but I have a pretty bearish view on the dollar.
16:57
I'm looking for the DXY to fall to 80.
17:01
And you know, would have thought by now we would have had that as
17:04
part of the, you know, the play in the medals, but the medals
17:07
have moved without it. So I think it's easy for me to
17:11
see my the rest of my move and the medals come if I'm right
17:14
about the dollar. Yeah, yeah.
17:15
What's right? Yeah, we'll be, we'll, we'll,
17:17
we'll subscribe to the the dollar theory in relation to
17:21
gold, especially if the dollar drops now and gold continues to
17:25
to skyrocket. Right, right.
17:27
Yeah, that that is time to say. Yeah, that's a good.
17:29
Theory yeah, that works. We're we're gonna we're gonna
17:31
stick with that one. So, so blof, blof top big moves
17:36
potentially here in the coming months quarters.
17:40
But then there's another side to this story, right?
17:43
What what happens after we after we have this quote UN quote good
17:47
times. Yeah, I've had this view for
17:49
quite some time that we were in the late stages of and it's it's
17:53
stretched. Obviously the pandemic stretched
17:55
it 'cause I had this view even prior to the pandemic.
17:57
But that we would have this blow off move in the market in the,
18:01
you know, so-called melt up in the market into it's top that
18:04
would probably stand for decades, not a decade, but
18:08
perhaps couple decades or more. So this, you know, the equity
18:13
market top, the highs of that top will likely be there for
18:17
quite some time. We can have bull markets,
18:21
cyclical bull markets within that, but probably not get back
18:25
to these highs of this year. But following that, and the
18:31
reason why I think it's going to be hard to get back to those
18:33
highs, part of it is that I think we are headed for a global
18:36
bust. I define a bust as something
18:40
that feels like and looks to some extent like a depression.
18:46
What happens in the time frame of a recession.
18:50
So, you know, very much like 2008 nine, except on steroids,
18:55
meaning bigger than that. And much of what makes it a bust
18:58
is the financial crack up, is the financial crisis that
19:01
accompanies the recession. So it's not it's not so much
19:05
that the economy is going to be worse than you know, we've seen
19:09
the post World War Two in a couple instances.
19:12
It's really that financial crisis that I think is going to
19:15
be maybe 2008 and nine on steroids and that was obviously
19:19
the biggest in history. So this could be pretty bad.
19:23
And the reason I think we are headed there is because we have
19:26
leveraged like we've never had in the world before.
19:29
So you have 320 trillion in in debt, global debt and you've got
19:34
quadrillions and notional value of derivatives.
19:38
I mean, how do we wrap our head around these numbers?
19:41
And derivatives are what I call the leverage on the markets.
19:45
You know, debt is the leverage on the system, on the economy,
19:49
and derivatives are leverage on the markets.
19:51
And what we know from Business School is that leverage works
19:55
both ways. On the way up it can enhance
19:57
returns and on the way down it can really exacerbate the
20:00
downside. And that's what I think we're
20:02
going to have as an exacerbation of the downside and probably in
20:07
2025, I think. The, you know, it's a recession
20:12
that then because of leverage turns into something worse.
20:16
We have, fortunately in this country, we got hit hard in
20:19
2008, so our banks were forced to deleverage and become more
20:24
capitalized. So I think our banks are less
20:27
vulnerable. That doesn't mean they're not
20:28
vulnerable, but less vulnerable than say the European banks and
20:32
the Asian banks and the Canadian banks who seemingly didn't watch
20:36
us from 2008 Nine, they were in great shape in 2008 Nine and now
20:41
they are us. So now Australia too is one
20:45
that's vulnerable. So, so I think it'll be global
20:48
and of course, you know, counterparty risk and the, you
20:52
know, the closeness of the financial system around the
20:55
world, the ties that are there means we are just as you know,
20:59
we'll be pretty vulnerable too, so.
21:01
Too big, too big of a situation for Jerome Powell and the
21:05
Federal Reserve to come writing. I mean, I'm sure they'll be
21:07
taking action, but at some point do do the laws of mathematics
21:12
take over and it's just too big of a problem for the Fed to be
21:16
able to spray some money on or? Yeah, great question.
21:19
I I have a lot of people that will push back and say they'll
21:23
never let that happen. And I go that's not the issue.
21:27
The issue is that they will react.
21:29
I, I can predict probably it's easier to predict this than the
21:33
markets that they will react. The, the question is the timing
21:37
of when they react. And you know, what we have is a
21:41
Fed that typically fights the last war and basically lots of
21:46
organizations fight the last war.
21:47
So, So what have we heard? Paul Fay, he said we're not
21:51
going to go back there again. We, we are dead set against
21:54
blowing the system, you know, pumping the system up again.
21:58
So they printed 5 trillion in 2000 and 2020.
22:03
You know, people forget we had a balance, fed balance sheet in
22:06
October, 20 of October of 2008 of 875 billion.
22:14
And then after the pandemic it grew to 9 trillion.
22:18
I mean, again, these numbers, how do you wrap your head around
22:21
them? But so he's got religion.
22:24
He said, yeah, we know, you know, he's certainly been beat
22:27
up and the Fed's been beat up for years about what they did.
22:30
And I could argue both sides of that one.
22:33
But but he's basically got religion now and said, I, I hear
22:38
you. And we understand we can't keep
22:40
doing that. So we're going to try to bring
22:43
the balance sheet back into a more normalized place.
22:46
It's not going to happen overnight.
22:48
We've been working on it this last couple of years.
22:52
But when, when trouble hits, they're going to be slow to
22:56
react because his whole mindset now is we're not going to repeat
23:00
the mistakes of the past. Well, what they don't realize is
23:04
they're not going to have a choice.
23:06
If you have a leverage system like we have.
23:08
And again, it's not just the US, it's worldwide.
23:12
And banks start domino failed. Banks are dominoing, dominoing
23:16
across the world. You're not going to be able to
23:19
sit there and say, well, theory says we should not blow it up
23:23
again, We should not pump it up again.
23:24
So we're going to just let this happen.
23:26
We'll all be living in caves. I mean, they can't do it and
23:30
human nature is they won't do it.
23:31
So the easiest prediction I can have is that they will react.
23:36
The problem is they're going to be slow, even slower than normal
23:39
to react because of that mindset.
23:42
That and and guess who's cheering them on?
23:45
The people telling them right on in fact, criticizing them for
23:47
not not being aggressive enough in tightening is Wall Street.
23:52
Wall Street says yeah, we don't want you to pump it up again.
23:54
You know we don't want to do in this.
23:57
So you know Paul says yeah, you're right I'm not going to do
24:00
that again. And that'll that'll last until
24:05
all of a sudden and then that's a question of right sizing.
24:09
You know, you if you got the kind of situation I think he's
24:13
going to be facing having having said we're not going to go back
24:18
and just print 5 trillion, you know, maybe we can print a
24:21
couple trillion, but we're going to be careful this time.
24:24
And then 2 trillion doesn't do anything and it keeps sinking.
24:27
Yeah, maybe we need to do another couple trillion.
24:30
Nothing happened. You know, it'll take them a
24:32
while to get to right size policy that actually stabilizes
24:36
things. And again, I, I focus on Paul
24:39
and the Fed, but it's Lagarde, it's, you know, Bank of Canada,
24:43
it's, it's Bank of Japan, it's everybody will be facing the
24:47
same thing. It's going to be a global
24:49
implosion. So, so is the end result of all
24:53
this as you're speaking and, and I'm learning a lot from
24:57
listening to you, but I keep getting this feeling like the
25:00
end result of all of this as we go through this bust phase could
25:05
be the, the loss of value in a lot of these Fiat currencies of
25:11
the dollar, the euro in real terms, not necessarily, you
25:16
know, compared to each other like in the DXY, but in real
25:18
terms is, is that one of the end results?
25:21
And, and of course, I'm thinking that because I'm a, a, a, a gold
25:25
and silver enthusiast and, and that, and look at that as more
25:28
real value. But, but is there any way out of
25:32
this predicament that we face where these Fiat currencies
25:36
don't lose value? Yeah, I'm, I'm going to take
25:39
this. It's going to take a little bit
25:40
to get there to answer your question, but I'll start with
25:43
saying that's. I'm not sure my I'm not sure my
25:45
question even made sense so. No, it did.
25:49
You certainly hear from the Austrians.
25:51
You know, the Austrians, the Austrian school basically
25:54
thinks, you know, central banks are evil and and what they've
25:57
done is very bad. I mean, I'm not saying they're
25:59
all wrong, but but they tend to think we're at that point where,
26:03
you know, the Peter Ships of the world where things are all going
26:07
to blow up here and you know, you're going to have to go back
26:10
on a Gold Star. You're going to, you know, first
26:12
it says we're going to fall apart, but you're going to have
26:14
to. I think he's about a decade too
26:17
soon or certainly seven or eight years too soon.
26:20
He I should say that either that school of thought, I think we'll
26:25
get there. I think what your question
26:27
implies, we will get there. What I think happens precisely
26:33
in the bust is I think we'll see one last flight to safety move
26:37
in the dollar. You know, whenever crisis hits,
26:39
we tend to get bid up. So I think the dollar could go
26:43
from my 80 target if I'm right and it gets to 80, you know, in
26:49
the next nine months or whatever.
26:50
Less than that maybe. I think it during the bust it
26:54
could go from 80 back to 120 or higher as people just run.
26:58
They are saying, I don't know where else to go.
27:01
So you have one last run on the dollar and then I think the rest
27:05
of the decade has been on the downside.
27:07
So you could see the dollar below 50 at some point by the
27:10
end of the decade. Part of that on the dollar, I'll
27:13
focus on the dollar first. But part of that on the dollar
27:16
is that I believe the Fed balance sheet is going to grow
27:18
to 30 trillion or higher during the bust.
27:22
So as I said, it starts slow, but ultimately to save the
27:25
system is gonna take a lot and they'll overdo it because it
27:29
there's leads and lags. So I think whereas we pumped up
27:33
five trillion, you know, increase the balance sheet by 5
27:37
trillion in, in 2020, I think this time it goes from, you
27:41
know, 8 or 9 trillion to 30 trillion, so 20 plus.
27:46
And proportionally you see every central bank doing the same
27:49
thing that doesn't you know, initially I think the bus
27:53
creates deflation temporarily for you know, probably less than
27:57
a year. But but and so in deflation,
28:01
that's why they are allowed, they have the ability to print
28:05
that much is because in deflation you almost have
28:08
infinite ability to print because of the lag to when that
28:12
will become inflationary. I think the lag's typically 18
28:16
months. It could be more or less than
28:18
that. But that means by the
28:20
second-half of this decade, sometime we're starting, you
28:23
know, we're starting, we're coming out of a hole.
28:25
So we're coming out of negative inflation.
28:27
But by 26, you're probably mid singles to high singles.
28:32
By 27, you're probably double digit inflation.
28:34
By by 29 or 30, you're probably 25% inflation.
28:39
So, so you create hyperinflation, but the lag
28:43
doesn't, you can't predict that. At least Fed's not going to be
28:46
focused on that when they're trying to save the system.
28:49
But that's what we're headed for.
28:51
And in that kind of environment, yeah, Fiat constant currencies
28:54
are going straight down. I'm not sure about because
28:58
obviously when you talk about the dollar, it's the dollar
29:00
versus others. So versus dollar, other fiats
29:05
may be going up. You know, versus dollar we're
29:08
going to be hit the hardest cut probably because we're the one
29:12
pump the most etcetera. But but I think all fiats are in
29:17
trouble. You can take this scenario and
29:20
and obviously interest rates track inflation.
29:24
If I'm talking about 25% inflation by the end of the
29:26
decade, I'm talking about 15 or 20% interest rates by the end of
29:31
the decade. What you know that monetization,
29:35
that 20 trillion and and new money is monetizing debt.
29:39
So we'll get an equal, something close to an equal amount in new
29:42
debt, expanding our debt by another 20 trillion government,
29:46
you know, U.S. Treasury debt.
29:49
And so we're going to be looking at, you know, massive debt that
29:54
has to be serviced. We can't service it at 5%.
29:58
How the hell are we going to service it at 15 or 20%?
30:01
So ultimately, I think it comes to a twenty 30s and I don't say
30:05
20-30, but sometime in the twenty 30s, probably first half
30:09
of the twenty 30s, we we reach a point where the government's
30:13
bankrupt. There's, you know, nobody wants
30:15
our debt, nobody wants anybody else's debt because the rest of
30:18
the world is doing the same thing.
30:20
And basically, you can't service your debt, you the Ponzi scheme
30:24
comes to an end and we collapse. I mean, that's to me, that's the
30:28
end game here. As I say, I don't endorse what
30:31
I'm saying is going to be the response to the to the buffs.
30:35
I'm just telling you what I think is the almost inevitable
30:38
of events that are coming. So it's not a picture
30:42
ultimately, but what I think comes what people should take
30:46
out of that is that get your house in order this decade
30:50
because what comes after that is pretty God awful.
30:54
And those that have any chance of surviving are those that are
30:58
going to be probably free of debt and have built their
31:03
wealth. And there is going to be a huge
31:05
commodity cycle. You know, stock indexes will not
31:09
get back to their highs or anywhere close to them.
31:11
I think that after the bus, commodities are going to go
31:14
through the roof. I mean, gold can go to 20,000,
31:17
silver can go to 500. You know, copper through the
31:21
roof, oil can go to 500. So I mean, there's there's
31:26
opportunities in areas of the market, just not S&P indexes.
31:33
So, so we have the, we have the boom, we have the bust.
31:38
During the bust, I would imagine we'll see gold and silver prices
31:42
pull back from the boom levels. Let's say we get to that $3000
31:45
gold, $60.00 silver during this potential near term, near term
31:51
ish. We're not setting specific dates
31:53
on anything. Boom cycle.
31:55
We have the bust where gold and silver probably go down a bit.
31:59
But in the long run, as these Fiat currencies erode, real
32:06
assets will be the place to be. Commodities, silver, gold, other
32:10
things like that. And those tied to those assets.
32:13
So the the miners will do well. You know, oil companies will do
32:17
well, oil stocks it's but what what won't do well?
32:22
Our utilities bonds, probably a lot of growth stocks, you know,
32:27
some will have growth that can outdo the, you know, the higher
32:31
interest rate effect. But by a lot of them aren't as
32:35
as we, you know what I've learned over 50 years of doing
32:38
this and and managing money through many cycles.
32:41
Every cycle has different leadership.
32:44
So this cycle was obviously tech and healthcare and growth
32:48
stocks. The next cycle is gonna be very
32:50
much the commodity sector and and industrials.
32:53
You know, you'll, you'll see steel do well.
32:55
You'll see, you know, the reassuring will mean lots of
32:59
machinery and things like that will do well.
33:03
You know, about 10 years ago I read a saying that stuck with
33:07
me, which I think applies to the scenario that you laid out.
33:11
And the saying was mathematics show no forgiveness on the altar
33:17
of truth, like you can only manipulate the system for so
33:20
long. And and I want to ask you kind
33:22
of a, a higher level, broader question as you talk about how
33:25
this bus plays out, how you know the Fed will be forced to to to
33:31
kind of keep the system alive and that and that essentially
33:34
they'll be getting a lot of pressure and a lot of a lot of
33:36
factors being pushed on them to, to keep things going.
33:40
And do you think that's because the, the powers that be are,
33:45
they're beholden to this system, right?
33:47
They'll do anything they can to keep it alive for as long as
33:52
they can because, you know, because, Because if not, then we
33:55
have this. When the reset eventually is
33:58
forced upon us, they have more to lose than 99% of the other
34:03
people. Yeah, there's probably a little
34:05
bit of that. I actually think it's, it's more
34:08
more basic than that, which is people just don't want it to
34:12
happen on their watch. You know, I'm, I'm, let's say
34:14
you're a policy maker, you know, if it's going to blow up, I
34:17
don't want to be the one responsible for it.
34:19
So, you know, I think it's everybody wants to attribute
34:23
everything to, and I can be as much about the new world order
34:28
and where a lot of things are happening too.
34:31
I mean, I think both are happening simultaneously.
34:34
Some of this is just human nature and and cycles, you know,
34:39
I believe we're in A to take it to a next step from the circular
34:44
bull market cycle. I think we're in a super cycle,
34:47
which I define as the period between two depressions, the
34:51
1930s being the last depression, the twenty 30s being the next
34:55
depression. And so when you get to that last
34:59
decade of, of super cycle, you know, every cycle you ratchet
35:05
up. So it takes more money to bail
35:07
you out of the last downturn and that creates bigger excesses.
35:11
So the next, the next upturn is bigger, you know, or more
35:14
excesses. And then it, you know, when it
35:17
crashes, there's more imbalances.
35:19
So it takes more to bail you out that.
35:20
So each successive recession and recovery has required more of
35:27
what's got us here, you know, more money, more borrowing,
35:29
more, you know, Keynesian economics, more monetary
35:34
economic, you know, all of that. And now you're at the point
35:39
where, you know, it's like, it's like something, you know, wave
35:43
theory, I guess, where the waves get successively bigger.
35:46
You know, I think we're at that point where it just goes kaboom.
35:51
Or, or like fighting an infection with antibiotics and
35:55
the antibiotics work the first time, second time it might take
35:58
a bigger dose the next time it take.
35:59
And eventually, yeah, eventually it just doesn't work anymore.
36:03
So we are not doom and gloomers, right?
36:06
I, I, I, I want to reiterate that however, one of my previous
36:11
guests said I'm not a doom and gloomer.
36:13
I get paid to assess risk, right?
36:15
I get paid to look at, at what is actually going on out there.
36:19
And you mentioned something earlier, which is a, a
36:21
fascinating concept to me, this idea of normalcy bias or I have
36:26
to think I've also heard it been, has been called recency
36:29
bias. Like as humans, as humans, we
36:32
just think, well, you know, like I'm 54 years old and I was
36:37
raised in a typical middle class family and the bank was always a
36:41
safe place to keep the money, right?
36:43
Put your money in the bank. And, and you know what, through
36:46
my 54 years, the bank has always been a safe place to keep my
36:49
money. So I think that I think it's
36:52
recency bias or it would, would dictate then that the bank will
36:56
always be a safe place to keep my money.
36:58
And, and I think it's important again, not to be a doomer
37:01
gloomer, but to be realistic that right, like these things
37:05
don't last forever. And if all the evidence is
37:08
pointing toward the fact that that we could be in for some
37:12
difficult times, well, then we may want to assess the risk that
37:16
we that we face. And and not just specifically
37:19
for my money I have up the street at the bank, but just in
37:22
general about what's about what's happening out there.
37:25
Yeah, I will say I believe because of the the printing
37:30
press, the, the reason we can have a collapse in 20-30 is and
37:34
why I differ from the Austrians who think the collapse is much
37:37
nearer right, is the printing press.
37:40
If you have and bring press in my view on inflation, if you
37:43
have what I have, what I've said is the the risk right now is
37:48
deflation on inflation. Everybody's worried about
37:50
inflation right now. I think the Fed is likely has
37:54
likely already gone too far on the tight side.
37:56
And because of a lot of things that happened during the
37:59
pandemic, it's being kind of pushed out and masqueraded a
38:04
little bit or just got just a little bit.
38:06
So they don't realize the risks that are happening over the
38:09
decay that's happening under the surface because they're too
38:12
tight, you know. And so it's going to be, you
38:15
know, it's one of those things where it looks like it's not
38:19
going to happen and it happens all at once.
38:21
And so I think we're going to see deflation because of
38:24
deflation. You can almost print money to
38:28
Infinity because there's a year or more before it's going to
38:31
show up as inflation. So, So I have no problem saying
38:34
$20 trillion, even though it sounds like how would that ever
38:38
be able to be happen without inflation?
38:40
Well, there will be, but it doesn't look like it at the
38:43
time. So because they're not, they're
38:47
going to have the ability to pump it up one more time.
38:51
I believe there is going to be as much money as needed to bail
38:56
out pension funds to to fund FDIC, whatever liability needs
39:01
there are. So in other words, as long as
39:03
you have your money in an FDIC insured account under the
39:07
$250,000 threshold this cycle, I think you're safe.
39:13
Next cycle, meaning the twenty 30s I can envision a situation
39:18
where we have no Social Security or limited Social Security, no
39:21
Medicare, no Medicaid, no unemployment benefits, no
39:24
welfare system and 50% plus unemployment.
39:28
That's what I think the collapse is.
39:31
And you know, we're in that we're in the country that
39:33
assumes somebody's going to take care of us, right?
39:36
If I, if I get in trouble, I may not be well taken care of, but
39:39
at least I know I can be taken care of, not when there's no
39:43
resources. And so I, I, you know, maybe
39:46
that does sound gloom and boom doom, but it's reality is that I
39:51
truly believe we're in a not, not by design, but we're in a
39:54
giant Ponzi scheme that comes to an end.
39:59
And we know what happens when they come to an end.
40:01
They just disintegrate. Yeah, yeah, You know, I it's,
40:04
it's, I agree with you. I think we're in a giant Ponzi
40:08
scheme. I mean, I'm an accountant by
40:10
trade and I look at things like balance sheets and, and the, and
40:15
the numbers and the debt. And, you know, when you look at,
40:18
just look at, I love to look at John Extra's pyramid, the extra
40:21
pyramid and you know, the, all the derivatives, all the debt,
40:26
just all this everybody owes. I mean, and you mentioned it
40:29
earlier, you know, the, on a worldwide basis, we have more
40:32
than $300 trillion in debt. And, and, and then if I'm
40:36
correct, the whole entire world GDP on an annual basis is about
40:41
100 trillion. So like we're at three times
40:45
which that I thought I always had heard that once you go above
40:48
like 120% debt to GDP ratio that you're in big trouble.
40:53
So how can the world not be in big trouble right now?
40:56
I feel like the biggest advantage I have over so many of
41:00
the forecasters out there is that I was, I was an
41:03
institutional money manager back in the early 80s, late 70s,
41:07
early 80s. So I came into this in 73.
41:09
So, so I know what high inflation does and it changes
41:14
the equation dramatically. We thought we had high inflation
41:17
for the brief moment we were at 9% and we think, you know, the
41:20
numbers we're seeing now are too high etcetera.
41:23
It's a whole different ball game.
41:25
When this thing goes into, you know, high hyperinflation, it
41:29
changes a lot of your what, what you have to access and what you
41:35
know what's available to you as a policy maker etcetera.
41:38
And it just it it stops the clock.
41:42
I mean, as a as a consumer even, right.
41:44
I mean, you know, I mean, we're aren't, we're kind of seeing
41:47
that right now. Like people that go to buy cars,
41:50
like they were used to this zero interest rate environment.
41:54
And if you're an average person, now you go to buy a car and
41:56
like, well, yeah, we can give you a loan, but it's at 9
41:59
percent or 10% if your average credit worthy.
42:02
And it's like it slows things. It really does slow things down.
42:06
But but the, the real place where it really changes things
42:09
is above a certain amount and we saw a little bit of it in 2022
42:14
and three, but above a certain amount of inflation, you lose
42:21
that printing press. We, we only have seen this
42:26
country look like standard of living hasn't changed much.
42:29
And everybody's, you know, most people are doing OK, if not
42:32
doing well, most says because we've been able to monetize the
42:37
debt, you know, for the last, for the last many decades, most
42:42
of our growth is coming out of government growth.
42:44
It's not private sector growth. You know, look what's happened
42:47
to the auto industry. Look what's happened to the
42:48
steel industry. Look what's happened to many of
42:50
our industries that went overseas.
42:53
If we had no printing press and no monetization of the debt, we
42:58
would have realized that long ago that our country's in
43:00
decline. But they've pumped it up through
43:03
the massive expansion of government.
43:06
The problem is that's even that's going to come to an end
43:09
because you're going to lose the printing press.
43:11
So this, you know, the thing I, I laugh at is MMT, you know,
43:16
modern Monetary Theory that the Democrats seem to think works
43:20
that you can just out infinite and print money.
43:23
You can, you can expand government for as long as you
43:26
want because there's always more money to print.
43:30
You know, we can monetize it. Not when inflation breaks out
43:33
all of a sudden, then you can't once, once the government finds
43:37
out they have limitations, that there's nowhere to go when you
43:41
have a let's, let's just look at a, you know, a natural emergency
43:46
and have a hurricane or something where they declare a
43:50
state of emergency. Where'd that money come from?
43:52
It didn't come out of thin air. They monetized that.
43:55
They, they took it out of the, you know, they said, OK, well,
43:57
we, we can always, you know, sell more treasuries and get
44:01
more money Once that once we lose access to the capital
44:05
markets as a government and that's coming all of a sudden
44:09
you have to live within your means.
44:10
So. So why is that in our lifetimes
44:12
we haven't lived within? Our now right, right.
44:15
And I have a question for you. How does that happen?
44:17
It like what what triggers this situation where the government
44:22
can no longer you said because of inflation.
44:25
Is that because if they if they try to monetize it just creates
44:29
a a doom cycle or? A well, well basically right now
44:33
we're talking about to service our debt is a trillion dollars
44:36
in our budget, right? Right.
44:38
Which is better bigger than, you know, our military budget if if
44:43
interest rates double from here and, and the amount of debt they
44:49
issue in the bus causes that to almost double, you know, you're
44:54
talking about probably four or five trillion in servicing debt.
44:59
I don't know what our whole budget is, but it's less than
45:02
that. I mean far less than that.
45:05
They're just not going to have the money.
45:06
Now initially coming out of the bus rates will move up
45:09
gradually. Initially not for very long, but
45:12
you know, initially it'll be gradual.
45:14
You'll see them floating more debt to get money to service the
45:18
debt. You and I know you as an
45:20
accountant. No, that doesn't last very long.
45:23
And and soon they're going to run out of that option once
45:27
again. It's once they lose you know
45:29
once, once the the world and the Fed unless it will fence the
45:33
buyer of last resort. The reason I know I can call I'm
45:37
calling for a zero percent 10 year at the bottom of the bust
45:41
when people go well, China selling our debt, nobody else.
45:44
You know why do you think it can go to I go the Fed's gonna be
45:48
printing 20 trillion. That means 20 trillion of
45:50
appetite for debt for U.S. debt. So once the printing press
45:57
stops, they aren't there to to be the buyer of last resort of
46:01
death. Nobody else in the world is
46:02
going to want, they're going to look at our balance sheet and
46:04
say no, there you're not a good risk anymore.
46:06
You're not AA, you're not single a, you know, looking out you're,
46:11
you're, we don't want your debt or we want it at an
46:14
extraordinary high price. Higher.
46:17
Rate. Yeah.
46:19
It's just the math doesn't work. I can't even pretend to know how
46:22
that equation gets balanced. It's just if, if I'm anywhere
46:27
not right near right on my scenario, you know, before the
46:33
end of this decade, we're we're going to be really questioning
46:37
how do we service our debt. David, I could speak to you for
46:43
probably another hour, but I, I think we've gone almost an hour
46:47
already. So thank you so much for joining
46:50
us today. I will put your, your
46:53
information at the beginning of the video on the bottom of the
46:55
screen. But I, I, I didn't give you the
46:58
opportunity to really tell us about yourself.
47:01
I do know your, your title, chief macro strategist at the
47:05
Contrarian Macro Advisors. What else would you like to
47:09
share with our audience about you and how they might learn
47:11
more about you or learn about your work?
47:14
Sure. Yeah, most of the time I'm on
47:16
Twitter. That's basically where you could
47:18
access me today. And I'm I'm my my formal jobs
47:23
are done. I'm still, you know, I call semi
47:26
retirement, but I work as hard as ever in terms of this stuff.
47:29
But I'm on Twitter most of the time I'm answering questions,
47:34
replying to people's comments. So if they go to at Dave H
47:39
contrarian, they'll find me there.
47:42
And I also put out a quarterly newsletter that is called the
47:48
contrary and macro or the contrary and was a contrary and
47:53
value advisor. And that's a quarterly letter
47:57
that I put out by subscription. So there's a cost to it.
48:00
If people are interested in that, just go to Twitter or X,
48:05
whatever you want to call it and use a direct message there.
48:09
There's the little You know icon that shows an envelope.
48:13
Direct message me and I will provide details to the letter.
48:17
OK. OK.
48:17
So that's the primary way they can learn about the letter.
48:20
There's not a website they should go.
48:22
To yeah, I don't have a website, so I pretty much do everything
48:24
through Twitter. So I will put your a link to
48:28
your Twitter or acts. I'm sorry account at the top of
48:33
the description to this video. And then I'll also have it on
48:36
the screen for people to see as well.
48:39
Again, on behalf of myself and our viewer, this has been a
48:42
fascinating conversation. I really appreciate you joining
48:47
your or joining me in giving your insights into what you see
48:50
going on because what you say makes sense to me and I learned
48:55
a lot today. So thank you, David, and
48:57
hopefully we'll get you back here in the basement again
48:59
sometime in the future. Sure, sounds good.
49:01
I always like basements. Well, the basement door is
49:05
always open for you, David. Thanks for having me on, Ron.
49:10
OK, you're welcome. We'll talk to you soon.
49:12
OK.