Transcription
[music] Well, welcome back to the contrarian, everybody. It's my pleasure to have David Hunter on again. It's crazy for me to think about, but it's been about 5 years now that I've been chatting with David regarding his macroeconomic outlook. Uh, he's a chief market strategist at Contrarian Macro Advisors. He's very active on Twitter at Daveh Contrarian. He puts out a quarterly letter by subscription. He's been, I would say, the most accurate macro strategist forecaster I've talked uh with in the last 5 years or so. Um, David, thanks so much for coming on today.
>> Yeah, hi Logan. Thanks for having me back.
>> Yeah, no worries. There's a lot I want to chat with you today about, of course. Um, I think it'd be helpful maybe to talk about your updated targets and then I know about a week ago you had kind of alluded to you you'd saw a kind of sharp pullback is likely and of course we saw that the end of last week especially in silver precious metals um and then the general stock market indices have kind of treaded water maybe turned a little lower in the last month but um maybe yeah start off with some updated targets you have if there's any changes and um kind of what you see going forward from here after this uh brief pullback we've had.
>> Sure. Yeah, I'll start with equities. I mean, I think the stock market is is still my my view has not changed. We're in a historic bull market that I think has a a long ways to run here. Could come very quickly in the, you know, between now and and summer, but um it's it's a good distance away. Um, I raised targets because I can't remember when we lost talk, but I raised targets in in my October letter um for the equity indexes. Um, I raised my um um my S&P target to 9,500 from 8,700 which had been raised from 8,000 uh during that April selloff uh, you know, when tariffs uh were announced. Um, so I went from 8,8700 and then the 9500 that remains my target there. Uh, the NASDAQ I raised from 30,000 to 32,000 back in October. Um, the Dow from 60 to 65,000 and the Russell from 3,400 to 3,800. So, um, if you do the math from where we're at now, I think, uh, you know, it's like 40% for the S&P. Um, I'm not sure. The NASDAQ's probably a little more than that maybe. Um, and uh, the Russell outperforms them all. I think I'm not sure what the number is from here, but it's, you know, 45% or more. Um, so so I do think we're seeing as we come into this year rotation into small caps uh into some of the non-tech areas and I see that continuing. Um, you know, in the short term you may see a little more weakness or a bit more weakness in in tech in particular. You know, they they could drop you know, several percent more from here. Uh, but it doesn't mean that the tech story is over or that they're not going to, you know, re um return to being one of the leaders. I think they will. I think in the what I call the the final move into the top. Um, I think tech will continue to play, but I think small caps outperform tech. I think we're seeing right now industrials are are doing very well. um, they're not even really impacted by the selloff we've seen of late. Um, you know, we're seeing some momentum start to build in basic industry, you know, materials, copper, um, steel, some of those things. So, um, I think you're I think you're seeing a cyclical resurgence here. Um, but I I also think when I look at things that um from from uh here just about right here I expect that uh financials are going to you know, financials could certainly the market still in [clears throat] my opinion probably still got a couple percent downside risk here. Um, and in tech maybe more than that. Um, but we're not very far. If you think about an S&P that can go up 40% and a couple percent downside. Those that are because I get this on on X all the time, you know. Well, are we still going to get that pullback you call for? I said, why are you wasting your time on trying to pinpoint the last two or 3% when you've got 40% ahead of you? You know, it makes no sense. And yet people seem to think the what their job is to is to get in at the very bottom, which nobody does. Um, and when it gets there, they're going to be hearing from Wall Street telling them is going a lot lower. You know, right now we're hearing people talk about 10 and 20% corrections from here. Um, I'm not worried about that. I don't think that's the story at all. I'm very bullish going forward. I just think we've got to get, you know, this this little correction that's been underway kind of finish it up. We've really been in a high level consolidation since last um late last October. Uh, you know, and so you've been kind of in a sideways consolidation for, you know, the Dow and the S&P. Uh, the Russell's actually broken out. It's been tech that's kind of weighed things down and had a bigger correction, but but frankly, um, you know, it's it's you're you're finishing it up. You're not starting something big. Um, so yeah, you could get the S&P down to 6,700 perhaps. Um, you know, maybe maybe a little lower if you wanted to. Um, but yeah, it's it's really small when you look at what's ahead. And when I look through different groups, even even things that you wouldn't think would be all that interesting right now, things like homebuilders, uh, look like they're lifting up here, and I think we're going to have a strong spring selling season in in housing, I think. So, um, I think they'll go on to new highs here. And, you know, a month ago, they looked dead. Um, so what that argues for me, what that tells me along with a lot of other things is that the 10-year, you know, the bond market is getting ready for a big rally. So, it's been in a trading range for, you know, quite a while and it, you know, got down under 4% on the 10 year down under 4% um several months ago and then backed right back up and we're back in that trading range between basically 4.30 and 4% and I think we're about to roll that over and once we go through 4% this time, I don't think we're going back up. So, so I think you got when you when you think about it, you got going into the spring uh the potential for lower rates, a strong economy because again when I look at industrials and look at the uh materials and things like that, it looks like everything we're seeing with ISM and PMI, um, it looks like the economy is picking up speed on the industrial side, which absolutely makes sense when you think about the buildout that's going on in AI, you know, the data centers and the need for power and the buildout there. Um, and and all the reshoring and the capital that's coming in. Of course, that that is all skewed towards the industrial side. And then you've got the consumer and the consumer is kind of hanging in there. um, in you know, again, it's a have and have not type situation or a K-like economy where you know, yeah, those that have money in the stock market and have houses feel pretty wealthy, those that are at the bottom in the bottom half of the economy are struggling to get by because you know, costs are high and they're their income's not matching it. So, so it's it's a mixed economy out there, but I think what's going to drive this is going to be that cyclical resurgence um including AI um and um and the fact that rates are going down means you also bring housing back into the equation. Um, and probably, you know, retail will be fine. It doesn't look like retail's ready to roll over. Actually um, I think the last four quarters credits look better. So, so I think, you know, all of that speaks to in my opinion, a very big uh final push to a high and that might take three months, it might take six months, but it's, you know, I think we're in that period and again, I don't mean right from today because you've got to finish up this this um selloff or this correction and you know, to hear to hear a lot of um market analysts out there and And people that watch the markets, um, you're hearing, like I said, you're hearing talk of 10 and 20% or the markets peaked or those kind of things. That's music to my ears, as you know. Uh, as a contrarian, I think you're you're seeing the sentiment is pretty, you know, in the wall's been rebuilt. Um, and yet we're not far off the highs. So, um, it's been an amazingly resilient market because of that. Every little selloff and all of a sudden now come all the bears saying, "Oh, here we go. We're we're done. We're going down." And that just provides the future fuel for for the runup.
>> Yeah, it is kind of amazing to see how quickly sentiment can get negative again, even just with a two or 3% pullback. And kind of like what you mentioned with the NASDAQ and S&P remaining pretty close to their all-time highs. Still, it's been a rebuilding of the wall of worry as you said, and it sounds like you're separating the major market indices. You see a little bit of a pullback still possible there, whereas it seems like with gold and silver that that might have even happened last week or I guess based on the last few days, it seems like the precious metals might be done with that. But, um, I'm curious to hear your your outlook for those as well.
>> Yeah, the metals have been amazing and it's um, you know, as I say, people go, "Well, what was the reason for that big, you know, 35% selloff in silver?" You know, what what triggered that? And I go, "Did you look at what happened before that selloff?" You know, it was it was straight up and straight down basically.
>> Um, and I Yeah, I saw it coming. So, I did call call a 30% correction basically in silver. So, I wasn't surprised by it, but it does when when you get a 30% hit, think about that. I mean, that often times that's that's your full bare market, right? And and in silver, we did it in silver, we did it in one or two days, you know. Um, so, um, it's easy to say that's a parabolic blowoff and, you know, we've reversed it and now we're going down. And that's what I think a lot of a lot of analysts out there are saying. Um, I see it as, and I saw it before the selloff, and I see it after the selloff. I see it as yeah, you had this runup, very unusual runup, but you know, very fast runup from um basically well basically $48 up to 122, but but in the last month from 70 up to 122 and then you gave back almost all of the January runup um in two days. And so I think I think this, you know, the bottom in on Monday which was down under 75 um, probably is the low for this selloff and the low for the correction. Um, can you from you know, we got up over 90 today. Can you come back down and retest? I think you can some. Doesn't mean you'll go all the way back to 75, but you could come back um and retest. Um, will we? I don't know. You know, maybe you can argue that intraday on Monday, I don't remember exactly where it went below 75. Um, you know, depends on what you look at, I guess, but somewhere 73.45 in there. Um, and then it rallied and then came back and didn't go all the way back down. You could even argue that that was your retest, but but um, I don't know. I mean, we'll have to see what the next couple days bring. But I do think any retest is this week. I don't think it's something that's a month from now. Um, and uh, so that means, you know, you're down there. And frankly, so many people did not take advantage of what happened Monday and said, "Oh, this thing's going down. People are looking for 50, etc." And so I think there's a lot of people on the sidelines wishing for a a pullback here, wishing for a retest or lower um that are going to be disappointed. So, and markets markets tend not to accommodate. So, I'm again, it's a little bit like the stock market. I wouldn't spend too much time uh worrying about whether whether 90 is going to turn into 80 or not. Um, because I just raised my target. I again, I'll go back to kind of my October. I had a 75 target on silver. I raised it to um, I think 100 and then I raised it again um, I'm losing track of my targets because I've been raising them so much. But um, I raised it again to 125. Um, and you know, it got up to 122 in this most recent spike. Um, I took a look at it this week and I said over the weekend and this week and I it's I I raised my target from 125 to one um 180. Um, and I feel pretty good about that. There are people that think I'm still too low, but there's a lot of people think I'm crazy at 182 at 180. So, so that's probably a good number. [laughter] But I that I mean that's a huge think about it. Silver was was $30 um, not that long ago.
>> And if it goes to 80, it's you know, it's a six-fold run in in a year's time or less. Um, so but that's where I'm at on silver and I I think it is a [clears throat] you know, as you know, I'm looking for a global bust later. So, um, all these things, stock market, the metals markets, we're talking about cycle highs. We're talking I call them my pre-bust targets, but they're they're basically my cycle highs. Is it possible I will have to raise it again? It's always possible, but I think 180 is a pretty big, you know, run from here. Um, gold, uh, similar story, but not obviously as elevated. Um, I um raised my gold target from 3,400 to 4,000 sometime last year. Raised it again um in January to 55. I think I had raised to 5,000 and again to 5,500 in January um and I just raised that up to um 6,800 um for same time frame as silver here. So, so that's a I mean again, that's a big run for gold which you know, not not that long ago was 3,000 or below and you know, now we're talking about almost 7,000. So um, I think uh, I think we're in the sweet spot for these metals. As I say, it's not unlike the stock market which I think the peaks there this cycle will stand for decades. Silver and gold will have another huge run post bust. So once we go through a global bust, come out the other side maybe in 2027 uh later part of 2027 from there to maybe 2032 or three. Um, you know, gold could go to 20,000 and silver 500. Those have been my as you know, those have been long-term longheld targets for me. I've had them for probably five years. Um, I'm thinking now after we're seeing what we're seeing now, the odds are that those at the time they seemed absurd. I had a lot of people thinking that's crazy. Um, I'm beginning to think those are way too conservative. Um, you know, particularly for silver. So, but
>> They won't seem as they won't seem as absurd or as as um conservative. Um, if we go through the bust cuz silver, let's say, let's say I'm right about 180 and or just to round it off, let's say 200 in the in the bust, you could get silver back to, you know, 50 bucks. Uh, you know, because it's so cyclical. Um, so, you know, I'm not I'm not about to raise my long-term targets till we get through the bust and see what we're doing. But I'm just saying if it can get anywhere near 200 this cycle, I'm not sure 500 is anywhere near close to where it's going. If we get a the kind of cycle I think will follow the bust. Exactly. So it sounds like I mean you're very bullish of course in the short term pre-bust and then postbust it's a little harder to tell of course but sounds like you see like a commodity super cycle and um kind of inflationary driven cycle after that. Um, but yeah, kind of pre-bust maybe we could talk a little bit about Fed policy coming up cuz of course in the last week Trump just mentioned that he'll probably appoint Kevin Worsh to replace Jerome Powell coming up. And so that could be another, I guess, bullish factor going forward as well is um perhaps investors uh beginning to see maybe the Fed will be a little more um accommodative or you know, however you want to put it, dovish. Um, but it is just like one vote out of 12 total people. So um, yeah, how much how much do you think that will factor in at all to the meltup kind of story?
>> Yeah, it's funny. I have a different take than what you hear a lot out there on on the street. Um uh for whatever reason people and I think some of it has to do with Trump, you know, is the the TDS or whatever you want to the negative view of Trump. So no matter what, the media spins everything negative when it comes out. So Kevin Worsh, who I thought was a great pick. I mean, he's kind of the the right guy for to head a to be chairman of the Fed. you know, he's got the experience, he's been on the Fed before. Uh, I like him because he basically has a monetarist background. Um, and but when he was chosen, and of course, I think any of the ones they ch they had in his final list would have been okay. I wasn't worried about that pick. I didn't think it was consequential like everybody was sitting on it waiting for it, but but um I wasn't. And but I think he was the my first choice and it was a good pick. [snorts] Um, but the the street narrative out there is that he uh is a hawk and that you know, what's Trump doing? He's you know, he's going to have same problems he had with Powell he's going to have with Wars or you know, he doesn't know what he's doing. Worsh is going to pull a fast one here and get in there and then you know, Trump's not going to be happy. No, that's not it at all. Worsh Wars is a monetarist and and rightfully so uh looks at the fact that our balance sheet has expanded from 800 the Fed's balance sheet has expanded from 875 billion in October of 2008 to where it got up to 9 trillion in, you know, post they were right in the pandemic um, and so now it's, you know, been brought back to 6 and a half trillion. Powell's done that um, and did it without crashing the economy um, and without rates going through the roof. So I you know, I give Powell pretty good kudos for that. Um, but uh, Worsh rightfully so says, you know, the balance sheets, you know, we're inflating assets and everything else with all the money printing we've done over the years. Not not recently. Obviously, if it shrunk from 9 to 6 and a half, that's that's not new money. You know, we're not pumping new money in there, but but in the pandemic, we put 5 trillion in. So, he wants to bring it back down. Uh, and and so the street, I get what they're worried about. They think that that's, you know, that's tightening. That's going to be a problem that's going to drive rates up. The thing is, Worsh is not putting a time frame on it and saying, "I want to do that immediately." So, he may do it gradually. He may do a little bit of it. My take is basically I'm not even worried about that because the bust is going to dictate what the Fed does. I don't care whether it was Worsh or Powell or anybody else. When we get into a free-falling financial system, that that balance sheet's going to be expanded greatly. Now, none of our policymakers have that on their radar. None of them. And so it, you know, they're not sitting there thinking about that and saying, "What do I, you know, what do we have to do?" They're they're looking at it and assuming we'll be in a stable economy period and that we can gradually bring or at least Worsh that we can gradually bring bring the balance sheet down. So, I'm not really worried about what he thinks. And the other part that [clears throat] does fit with Trump and why I think he chose him, number one, he's he's looking to reform the Fed and get them away from this focus on quarter-to-quarter economy or month-to-month data and, you know, trying to fine-tune the economy every on every data point. Um, he he wants to get it back to what it years ago it wasn't like that. It was much more bigger picture kind of how I approach the econ, you know, how I approach my forecasting and so I think that's good. Um, he's also I think um, he's and in fact after he was named, you know, he did some interviews and you heard him say this exactly. He goes, I think we, you know, we the Fed's too caught up in this idea that if you get growth, it's going to push inflation up. And he said, I think given given what we're seeing in productivity, giving a given AI and and, you know, deregulation, etc. You can have growth without inflation. And that we're, you know, the Fed's been doing a disservice in terms of um, you know, keeping rates too high because they're worried about they're wrongly worried about inflation because of the economy. So every time the economy gets some growth, they stop, you know, they hike rates or they stop decreasing rates. And he he said, you know, we have, as Trump has said, we have the highest rates or some of the highest rates in the world and yet we're the most productive economy and you know, our inflation's some of the lowest. It's like, what are we doing? So, so that's where I think Trump and Worsh saw eye to eye. I think Trump rightfully saw Worsh as um the right man for the job. Not so much focused on what's he going to do next month or in the meetings, but really understand that this is a guy that knows monetary economics, knows monetary policy and and knows the Fed and wants to reform it. And so I I view as a very big positive, not a negative.
>> Yeah. And I know the market kind of reacted to it that one day last week when Trump mentioned it. I think it sold off that day, but um, I'm curious if you think like hypothetically if the Fed were to be I guess more proactive as opposed to reactive and they you know started lowering rates um and maybe the bond market kind of lowers rates as well in the coming months which I think you see as as likely. Do you think in that kind of a scenario if there's um, you know, steady growth in the US economy as well at that same time, is it possible that the bust is kind of avoided or pushed out further or isn't as severe as what you see or um, I know you've said that like the the seeds have been sewn for the bust, but is it possible that maybe there's a lot more AI capex spending or other kind of um stimulative kind of spending that comes into play that is able to kind of lessen the bust that ends up happening.
>> Yeah. Let me put it this way. If you if you look today and you see the acceleration in in uh capital spending and um, you know, you look at the ISM and and all those things, it's it's crazy to be thinking about a bust. I mean, right now it looks like the economy's come through a period of, you know, under Biden where it was relatively flattish or not doing as well and has and it picked up steam last year and it's picking up more steam this year. It's it's hard and and the stock market's at all-time highs. Um, inflation's basically contained and I think is going lower. Um, it's hard to think that a global bust is anywhere near in the picture. In fact, why would somebody be saying global bust, right? It's uh, you know, if I wasn't, and I'm not um, make myself trying to make myself out to be the guy everybody listens to, but let's face it, global bust is is my term that I brought out five years ago or six, seven years ago, whenever. Um, and yeah, it's probably then um, and it's um, it's kind of out there now. Lots of people talk about bust now, right? And they never use that term when I was starting out to talk about it. So, it's it's on a lot of people's minds because we did look like we were going to see that during the pandemic. It looked like it and then after the pandemic uh some of the time when things were not looking great, but really right now it's hard to talk about a bust and say that it's imminent. It's, you know, there's nothing there right now that's imminent. I'm not giving up or I'm not you I'm not um changing my forecast. I don't know whether it's going to happen. I I still say it very well could be second half of this year. Um, probably latter latter, you know, last four months of the year, but but I don't know cuz a bust is something that can number one, it's global. So it doesn't, you know, it's not just a focus on the US, it's what can happen around the world. Um, and the the real reason for a bust is the leverage in the system. Uh, so that once things do roll over, it's going to roll over fast and get pretty nasty in the financial uh system. Um, there's problems in China, we know that. There's problems in Japan, we know that uh in terms of their rates are breaking out. Inflation's starting to push up and and they don't have any room for error there. Um, Canada's in trouble. Um, Australia, I don't you I'm not sure. They just hiked rates. I think their policies are backwards. Um, Europe's Europe's got all kinds of problems under the surface. You know, you can look and say, "Hey, their stock markets are doing well and and um, you know, the guard's already done their easing, so they're in good shape here." But under the surface, that's an, you know, an overall economy uh that's weighed down by a lot of socialist policies and and energy is an issue, etc. So, so there's there's plenty of fragility in the system. There's leverage like we've never seen before in the system. Um, so we can go from looking pretty good to things getting really out of hand on the downside in a hurry. We're not there now. There's nothing on the horizon right now to say to be able to predict when it's going to hit. Um, meaning in the next several months. Um, but I'd remind you that in 2008, I remember this cuz in two in September 2008, I was saying um, hard landing and most of the economist out there, almost every single Wall Street economist was saying soft landing, no recession in sight. Uh, and that was September of 2008. Lehman Brothers happened in early October and the rest is history. So we went into the we were a month from less than a month from the biggest financial crisis in history to and yet, you know, people were pretty much sanguine and thought things were okay. Um, so it can happen fast. I'm not saying that to say that's where we're at now. I'm saying that by summer that could be where we're at where things look okay but starting to fray and and there's some real problems that can pick up speed in a hurry. So, I'm not abandoning a 2026 um global bust, but I certainly am not hanging my hat on it either because, you know, people say, "Well, we got the elections in, you know, the midterm election in November. Your forecast is going to screw that up." If if it happens before then, yes. Could it be that it doesn't happen till after that? It's certainly a possibility, but I'm not I'm not pushing my my forecast out. I'm just saying it's too early to know. You know, it's um, but I I do think that ultimately um, we'll have this blowoff in the market. Um, we'll still be fragile. We'll still be highly leveraged. In fact, more leveraged than ever. And then I think as the tide goes out, you're going to see the things underneath the surface that really can cause problems. So I would I I caution people now, don't get bearish early because you're going to miss one of the biggest runs in history. You know, we could go up 40% in three or four or five months. Um, but uh, and and some stocks could double in that time. Uh, and in the minor case could triple in that time. Um, so it's, you know, it's not, you know, too many people hear the bad story and they get nervous and they jump to um, you know, buying bonds today. You know, if you want to be a long-term investor and not worry about the returns, you know, being early is better than being late. But if you do that, you know, you're you're sitting there making, you know, a little bit of money, uh, when other people are making or you could be making, you know, a lot of money. So, so it's, you know, I think all I know is it looks like this, you know, from here through the midyear, it looks like we're going to have a lot of things working very well for the markets.
>> Yeah. So that's interesting cuz it sounds like in your mind we could be you know 6 months maybe 9 months out from a historic economic bust but at the same time before then it's almost like you see a very parabolic you know meltup that we talked about of course um and it sounds like almost all assets would perform well during that environment even bonds I mean with rates coming down and um maybe real estate as well if rates come down. So yeah, I mean it would kind of lead to a scenario where of course at that point you'd probably have sentiment looking entirely different than what it is now. Like people being very optimistic um being all-in and then in that kind of a environment. Yeah, I could see I could see a reason for there being economic bust as a result of that just with the fragility that that creates. Um,
>> Yeah.
>> I'm wondering
>> just in response to that, the easier part of a forecast
>> for me is the market forecast because the market is so driven by sentiment. So, you know, that's what I kept trying to say because I've been, as you know, been talking about this meltup for a long time and that we would ultimately have a top and um my and people would say, well, what what will cause you to change your bullish view when you know when are you going to know to get out? And I always pointed the sentiment, right? I said, when everybody's all in, I'm out. You know, when when I hear everybody and it was hard for people, I think to envision that you're going to have a period. It's not going to be easy to be bearish because, as you say, there's going to be several things all at once looking good. You know, lower rates, uh, strong economy, uh, Trump's policies, uh, seemingly working well. Um, maybe maybe we'll have the end of Ukraine, Russia, uh, as a war. Maybe, you know, the Middle East will be resolved, um, to a good extent. you know, there could be a lot of good news things and it's very hard to envision that there's any reason to sell when when you know all ships are rising um and or you know, it just so it but that's probably the when it's going to be and I don't mean the minute you sense that everybody's agreeing with the bullish view that's time to get out you know, it's it's a process but there will come a time when I'm going to as much as I had to fight when I was bullish, had to fight all the critics or or hear all the critics when I was bullish in 2022 for example or spring of 20. Um, as much as I had to fight then and took a lot of criticism then, I'll hear that same criticism on the other side if I'm bearish when everybody's bullish. So that's, you know, I'm I'm pretty confident in saying we'll see a top in the stock market this year and and probably in the next 3 to 6 months. Uh, it's a little harder to know exactly when you know when that when the economy rolls over and you have a bust because there you know, it can be other things that it can get stretched out. The the roll over the process process of topping can take time uh in the market. So, you know, there's not it people it's not let's put it this way, a bust is not going to be um a coincident with the top in the stock market. Stock market will peak ahead of that by probably several months. Um, but you know, whether it's three months or six or eight months, but you know, a top of the stock market probably happens before you really even see the signs of a bust.
>> Okay. And of course you have it or you see like a deflationary bust as being likely, you know, where we actually have asset price deflation, asset deflation in commodities as well. And I was curious to get your thoughts on inflation and um do you think inflation is miscalculated right now? Because there's a lot of different metrics available out there. There's of course the CPI, PPI, like the official BLS numbers, and then there's alternate uh ways that inflation is measured currently. Um, is there a particular one that you uh think is most accurate or reflective of um what everyday consumers experience?
>> Yeah, not really. You know, part part of the problem we have um and again, it's the media makes this hard um is a lot of consumers misunderstand what inflation is versus what high prices are. So, you know, we've had high prices as a result of policies for a long time. Uh, and they and they got driven up during the pandemic. Inflation can be zero and it doesn't mean you're giving him back those high prices, right? So, so I think a lot of the people unhappy with Trump and the media is obviously using it to try to slam him or hurt him is the focus on high prices. You know, they call it inflation, but what they're really focused on is high prices. I mean, frankly, look at eggs. Eggs have had very big deflation. You know, I bought eggs last week and they were $1.50 during during the shortage. Um, I think eggs were $7 or higher, you know, so so eggs have had a big decline. Not that that's, you know, as one input, but but um, yeah, I think part of the problem is misunderstanding what inflation is. I don't have one particular um indicator I look at. You know, obviously look at CPI, PPI, um, you know, the PCE. Um, but then you've got true inflation out there obviously on the low end. What what is interesting to me and again, I think it's some of it's the bos the bias against Trump is and and, you know, Fed Fed fighting the last war to some extent is they they openly admit and they know and have known for a long time that um the indexes are flawed because what they use to to uh impute inflation on housing, you know, through a rental um instrument, uh rental calculation is very lagged, is very delayed so that when prices are coming down or you're starting to see a rollover in in real estate, it doesn't show up for, you know, a long time. And so they openly admit that inflation's artificially held high by that flaw. Um, and then it's also some of the things they use as input um like um um, you know, port more portfolio management fees, you know, investment fees that are calculated on the on the value of the portfolio. You know, that causes fees to jump and look like it's inflation and then it's really not, you know, it's not something that everyday person I is having to deal with. So um, you know, people it's it's good news that people's portfolios are going up, uh, you know, in these are mostly institutional fees. So it's the, you know, it tends to be more on the wealthy anyway, but um, you know, those fees are going up simply because they're a percentage of the value of the portfolio and the portfolio is going up in value so uh because of the stock market. So um, yeah, you got things like that that are really not capturing inflation as it is today. So, it's hard, you know, if you want to get into an argument with the everyday guy and try to tell them that inflation's low, they're going to take issue with you because they're not seeing in their, you know, they go to the store and they go, "My bill's not lower," you know, but that's not inflation. That's because they've been, you know, they got pushed up and now they're staying up. Um, so people mis when you talk about lower inflation, people think deflation and that's not what we're talking about. We're talking about disinflation. But that that being said, I do I do think true inflation shouldn't be ignored. And if you use that number, it's under 1%. Which means the Fed is thinking that you've got 2.7 or 3% inflation. So they don't want to ease. And in fact, if inflation is under 2%, they should be saying, "Yeah, we've done our job."
>> [clears throat]
>> Um, you know, uh, the jobs picture is starting to slow um, and so we should be easier. So, you know, all these people that want to make it out like Trump was wrong and had no reason to be upset with Powell. I mean, I've been, as you know, I've been a defender of Powell for a lot of reasons um, in terms of looking at what the Fed has done, but I do admit that he's been, you know, he's been reluctant. It's not just him, it's the whole committee um, has been kind of fighting the last war of being slow to recognize that we really have already um, done our job or they have already done their job. Um, so, so I think, um, ultimately, yeah, if you get a new Fed chair in there, um, he's probably going to be able to make the argument that inflation is, you know, at our 2% target or below. And um, and in Worsh's case, you know, he'll be saying, you know, just because the economy is doing okay and actually doing pretty well, there's no reason that we have to keep policy restrictive so rates can come down some more.
>> Yeah, that would be an interesting uh dynamic to see if if Worsh or other leadership kind of can maybe see that a little more clearly that they don't have to fight the the last war of inflation anymore cuz of course they are worried about like the mistake they made in 2021 of staying easy way too long and um, you know, and then the massive inflation that happened in 2022. Um, so they're kind of still concerned about that. Um, it sounds like though in the bust switching into that um, it seems like you've said that there would only be like two asset classes that would likely hold up well and that would be the dollar and US treasuries. Um, I know there's some people out there maybe thinking like oh maybe something like real estate, maybe something like gold could also hold up. But um, it sounds like in in economic bust of the type the um magnitude that you're thinking um, I could see why something only in the category of US treasuries and the dollar would hold up. And in fact, you would you think like stock market could have up to like 80% sell off. Of course uh silver could be hit really hard, gold as well. Um, curious to to get your thoughts on on that in terms of like why you see US treasuries and the dollar being the only safe havens.
>> Yeah. So, you know, if you're if you're an institutional portfolio manager, which I was at one time, sometimes your your bogey is outperforming, not not absolute performance, right? So, so um, if the market goes down 70 or 80% and you have a your holdings go down 40%, you're looking pretty good, but you've just um lost a lot of money for your clients, right? So, but in in most investors, you know, most people,
>> Uh, retail, small investor, etc., um, and frankly all investors, I think absolute is very important to them. And so, I think there's going to be very few assets that hold their value and and Treasury's case maybe go up. Um, but so gold gold's going to go down a lot less than the market. I think, you know, whether that's 30% or 35 or 40%. But if the market goes down 70, 80, it will outperform, but that's still a big hit. Um, silver is more cyclical so that can go down almost like the market. Uh, I think um, you know, copper is another metal that's doing very well right now but is very cyclical and that could go down a lot. So, so, uh, it's and it's you you can find sectors in the stock market that will go down less. You know, certainly utilities will hold up more than other things because they have the dividend, the, you know, they're interest rate sensitive, but they're also now kind of being bought on the basis of their growth, but, you know, for the fact that we're building out our electric grid. Um, so they're going to get hit. Whether they get hit 30% instead of 80 or 40% instead of 80, who knows? But, um, [clears throat] and staples, historically, consumer staples are defensive. So, they'll go down maybe less than 80. But, if the market's going down 80, it means a lot of things are going down a lot, right? So, it's hard for me to look at sectors and say, "Yeah, you can own this for defensive reasons." because you're not going to be happy with what that defensive number is. Um, you can certainly be in savings accounts in the bank as long as you stay within the $250,000 FDIC insurance threshold and that's per institution. Um, you know, you can spread it around to many institutions. um, if you have that kind of money you have to protect and I'm very confident that even in a global bust um that we would fund the government would fund the FDIC to whatever level they have to because because of the printing press, the Fed will be printing money like crazy. Uh, if you've got if you've got a deflationary global bust, that means the Fed doesn't have to worry about inflation. That means their only concern when they finally figure it out will be protecting the system. You know, we got to we got to um, you know, it'll be a free-falling financial system that they have to figure out a way to stabilize and turn back up. That will take a lot of money. That's the only thing out there that can move fast enough. You know, just think of the pandemic and what was going on in first quarter of or second quarter of um 2020. You know, when the bond market was falling apart, um, you know, small businesses were closing and you know, had no, you know, we closed down the economy and so they printed all kinds of money, came up with all kinds of programs to support the capital markets. Um, and that's what you'll see in a bust is when things are free-falling, you know, they can get creative and figure out ways to kind of stop things. Um, but it takes time. It takes, [clears throat] you know, the free fall happens very quickly. The deliberations of what to do and figure out what to do um may seem fast in in a slow time when things are just kind of steady, but in free fall, you know, days are are slow. So, [snorts] you know, if you're if you're days late, you're late. Um, so it's, you know, cash is the one thing or or, you know, money is the one thing that can be pushed out quickly so the Fed can, you know, do QE very fast and that's the one thing that can, you know, can be enacted quickly and to stabilize things. So you will see as I've predicted [snorts] um, at least that's my prediction is that you will see $20 trillion or something of that kind of number that will be necessary to kind of stabilize things and get
things going the other way. Um, and there's leads and lags, so they're going to overshoot. So, you know, doesn't mean they needed 20, but they'll be doing 20 because they won't have seen the the progress yet, um, is my guess. And and, you know, you'll see like, uh, similar type numbers or similar type proportionally coming out of all central banks in the world because it's a global bust.
So, um, but in that kind of an environment, yeah, stock market or stocks don't work well, um, below government guaranteed bonds. You know, it's there's gradations of it. You know, junk bonds don't work well, um, low investment grade bonds don't probably do so well, um, maybe high investment grade, you know, double AAA hold up better, but they're still probably down 20%.
Um, and and, uh, you know, you've got, um, you know, private credit is going to get hammered. Um, you're going to have problems in pension funds. You're going to have all kinds of issues out there if this comes to pass. Um, and so, yeah, I think it's basically bank accounts within the insured threshold. Um, um, treasuries of all maturities, treasury bills will hold up. Treasury bonds will actually appreciate because of the the rates will be coming down. Um, and, you know, not much else.
>> Yeah. Yeah. I can see why you would um see that as likely then. I guess just also looking at past, you know, the 2008 or even in 2020, what happened there? And it sounds like you're not really concerned about something like a bail-in having to happen in the US, cuz like you mentioned with, um, the dollar still being the world's reserve currency and the printing, the ability for the Fed and the Treasury to monetize debt and, you know, uh, stimulate the economy that way. Um, that would seem to be a more preferable choice for them as opposed to likely causing a lot of people to be very angry if a bail-in were to happen.
Um, >> yeah, plus it's not just they don't want to make people angry. I think it's we have a tradition here of, you know, and it doesn't help you much if you're trying to revive an economy. Um, you know, destroying people's wealth and destroying people's life savings is not exactly going to give you much, uh, much to work with. So, so I mean, there's a reason why you don't want to do bail-ins. Um, you know, there's a history of bails, obviously, over in Europe, so I can't say that you won't see it there. But I think around the world, the inclination is going to be, if we're printing money like there's no tomorrow, that money is going to be put to use in all kinds of ways that are protective of the cons of the individual. You know, it's not, it's not, it's very counterproductive to save the system but destroy the the consumer while you're at it, right? I mean, if they're going to be hurt very badly anyway. Um, but you, you know, if if they were smart enough to put their money in safe play in so-called safe places, um, you don't want to, you don't want to destroy that.
So, I, you know, we saw in 2008, for example, um, that they backstopped money market funds even though they weren't insured. Um, you know, they had the don't break a buck policy. So the, you know, the government backstopped the money market funds and then took that backstop away after we recovered. I think they would reinstate that, is my guess. You can't know that, you know, the difference between treasuries and the the treasuries and the FDIC insured is, you know, there, the treasuries are explicitly guaranteed and the FDIC too, whereas the other is just a a premise that they'll do that again. You know, they don't have to. Um, so, but I think the odds are that you would see all kinds of programs to make sure the people's assets weren't, uh, taken down with the system. You know,
>> I'm curious to hear because of course with the Fed going into that kind of a quantitative easing policy, they would be buying massive amounts of Treasury bonds and US treasuries broadly speaking. Um, I'm curious if you think it's possible at all that they go into buying equities simply because of, um, you know, you look at something like passive investing, how, you know, broadly speaking most investors own kind of the same basket of stocks, you know, the largest US stocks, and if people suddenly sell, that creates, you know, like you've mentioned, the possibility of like 80% drawdown. And if that happens, you'd have, you know, people's net worth massively being cut, um, which would hurt the economy quite a bit. And, um, I, I don't know, maybe that's going too far, maybe the Fed would never do that, you know, buying equities, but I, I don't know, what are your thoughts on that?
>> Well, you, you know, in 2008, '09, I think that was the time, um, that we heard all about the plunge protection team, right? The the rumor was that the Fed had a plunge protection team or the government did, I can't remember exactly. And the idea was that they were propping up the stock market. Typically, they prop up the stock market through QE, you know, through printing money and then it goes into the system and works its way through to buying stocks. Uh, so I'm, I'm not necessarily thinking that's likely. Um, but anything's possible. Like, you know, they're, you're going to see programs we never saw before, I'm sure. Um, I, I still think what you're going to find is that they'll do, you know, they'll do things like that at the margin, maybe, you know, because there's always Trump certainly is a problem solver and thinks, you know, tries to figure out ways. I don't always agree with him, like this, you know, trying to figure out how to make housing affordable. You know, housing will become affordable in that downturn, don't worry. [laughter] You know, or prices will come down anyway. Um, and, you know, putting a cap on credit card rates. I don't totally disagree with the need for reform there. That I, I don't agree with a lot of the analysts out there that think, you know, you have to have 30% plus user, you know, usurious rates and and encourage, you know, low-income people that shouldn't have a credit card to do that, and you're protected because a certain number of those get written off, but you've charged enough interest. I don't, I don't agree with that as a model. So, I wouldn't, I wouldn't disagree with, you know, putting some kind of cap on it because I think we used to have a cap, um, you know, down 18% or 20 something like that. I wouldn't be opposed to that. Uh, I think 10%, you know, you're getting into a place where you're, you know, you're socializing banking, you know, you don't want to do that. Uh, or price control type thing. Um, so I don't agree with that or the housing. Um, you know, all for trying to figure out ways to, um, build, you know, boost supply of housing, but not, you know, not this other stuff where you're trying to figure out a way to, um, you know, make it affordable because you put in policies. Um, so, but back, back to the other. Yeah. I, I, I just think that most of the situation is going to be solved, or I don't know if the word solved, but will be handled through QE. You know, it'll be, they'll be, they'll be doing, just look at the pandemic as your your model, some of it, 2008, '09 too. Um, you know, we, we bailed out the banks. The banks would have failed if not in 2008, '09. Um, they'll do that again, I think. Um, they'll do things to backstop, I think, brokerage industry if, you know, if brokers get into real trouble. Um, I don't think they're going to let widespread customer losses take place in terms of because the broker went under, meaning, um, you know, that people suffer losses because their portfolios are in stocks that go down or in assets that go down. But, but I don't think they have to worry about the the brokers going down and they lose their assets. You know, you've got number one, you've got SIPC insurance, etc. But I think I think the government, even though they're not, um, expressive, expressly part of that, I think they would probably come up with a program to support SIPC or whatever if, if it [clears throat] got to that point where that, you know, those reserves were were, um, exceeded and, um, needed, they needed help. So I'm, you know, people hear bust and they think depression, you know, 1930s depression. I think this will be, if it, if it happens, it will be more like 2008, '09, except bigger, um, but fast, you know, and and with resolutions on the inside. As I keep saying, the, you know, the the Austrians out there have a view of, you know, the the great reset and this is the time down. You know, Peter Schiff is, Schiff is probably one of the biggest proponents of this idea that we're going down now and, you know, we get this great reset. And I go, what separates me from that view is I think there's one more cycle because in low inflation or deflation, you have the printing press and you can use it infinitely, um, because there's a lag to when that money will become inflationary. So, we have one more cycle where the printing press will be, uh, paramount and we'll bail us out, kick the can down the road one more time, and then the problem is next time you don't have, uh, low inflation or deflation. Next time you have hyperinflation. [snorts] So, if we get to the early 2030s, um, and you've got 20% plus interest rates or 20% plus inflation. Number one, those interest rates are, you know, interest rates tend to follow inflation. So, um, in 1982 or 1981, you know, the third year was 15%. Um, this time and inflation was, you know, up up around 20%. [snorts] Uh, T-bills were 21%. I think this, you know, next cycle after the bust, because of all that money printed during the bust, you're going to have inflation exceed that, you're going to have interest rates exceed that period. So, you could be looking at a scenario where you have 25% inflation and, you know, T-bills at 25, 23, 4, 5%. And the long bond at 18 to 20%. Given the kind of, um, debt we have, and it's going to only expand during the bust, right? It could double. Um, you're going to have a a situation where you have maybe let's say, you know, twice the debt we have today or one and a half times the debt we have today and have to service it at high double digits. There it doesn't work. We can't find, that's, we can't service it at 5%. Right. So,
>> Yeah.
>> Um, so, and and again, you know, right now we've got short rates down, so that you can keep rolling T-bills and they're not, you know, they're not four or 5%, they're down in two or 3%. Um, at the time when you have hyperinflation, you're going to have an inverted yield curve. So the short end is longer is higher than the long end. So you can have 20% plus short end and you can have close to 20 on the long end. Um, you know, there's no way you finance that and there's no way you fund the rest of the government if you have that, right? So then first of all, and long before that point, you've lost the printing press because you can't keep printing money into inflation. It's like putting gasoline, [clears throat] you know, uh, having a fire hose, having pouring out gasoline on a forest fire, you know, it just ignites the inflation even higher. Um, so, so, uh, the printing press gets pulled away sometime late this decade, probably, you know, '28, '29, I don't know. Um, and and then from there, you're, you know, that's one of the things that's propped up standard living is we just keep printing our way out of this. Um, at that point, um, you know, that starts failing. You know, people are going to have a hard time keeping up with inflation. There'll be cost of living things in place, etc. But [snorts] uh, it, you fall behind in that period, most people, um, and then you get to the point where the government, you know, stole from Peter to pay Paul in every way they could to keep the thing going, and now they don't have anywhere to go for it, and the reality comes in that they are insolvent, you know, that they can't, you know, there'll be moratoriums, there'll be things, debt moratoriums, there'll be things to stretch out as long as they can. But I believe by the time we get to 2033, '34, '35, somewhere in there, um, the game's over and the Ponzi scheme just collapses onto itself. And again, I'm describing the US, but this is the world. I mean, we've, we've all done this. Um, so, um, so I mean, that, that's, yeah, [snorts] I think that's what whether whether the bust starts this year or doesn't start this year, I think that's where we're headed. Now, could I be wrong? Sure. If if, uh, somehow Trump policies really do get us rolling here and we really do, um, uh, you know, we're able to pay down debt and avoid a very deep recession and what comes in terms of unwinding the the leverage. Um, then maybe we we do have a a less than a bust in terms of a a down cycle. We we have to have a down cycle somewhere. You know, we're we're at extremes here. So, so there'll be a down cycle. Whether whether it's going to be as big as I say it's going to be, time will tell. Um, I think the odds are it is going to be a bust, but, you know, I can't, I can forecast it, but that doesn't mean it's right.
>> Yeah, I think that's cool to keep in mind. Of course, you know, what you see as likely versus other possible scenarios. And, um, I know we've talked about it, of course, in the past, but and of course, it's, it's not a very contrarian statement just to like get your financial house in order and just be responsible generally speaking, but I know you've mentioned that as kind of a just a common sense practice that anybody listening can put into play of, you know, of course not having, you know, high-interest debt to your name, paying it off as quickly as you can if you do, um, just generally speaking, like getting your house in order. I wonder if there's any specific things you would add to that or just recommendations for people generally speaking as as we go forward.
>> Yeah. I, first of all, basically, it's control what you can control. You know, we can, we can all talk about a global bust coming, but we can't control a global bust. You know, we can't, we can't, uh, do anything about that. We can control, but what we can control. And and for example, if I'm, and again, it's hard. One of the reasons I'm, I've been on X for, you know, over a decade is to hopefully, um, you know, they don't get any economic education in school. They, you know, most people come out of both high school and college with very little understanding of the economy. And and we've been a consumer-oriented economy for a long time. So, it's, you know, um, and they're teased with all kinds of, um, credit. And so it's, you know, and young people want, want what they want. So, it becomes, you know, buy today and worry about paying for it tomorrow, right? If if it, if at all. And and you get yourself into a situation where you have a lot of debt. And you know, in houses, it's worked out because houses appreciated and you, you know, you you had a mortgage, but you were over time, your the value of your house went up and you're, you know, you're paying the mortgage out a little at a time. Um, so that that equation worked only because primarily because, um, we had such a great run in housing prices over the last, you know, 40 years. Um, but, uh, you know, that's not always going to be the case. I think the real estate peak this cycle is going to stand for decades. Um, so even housing, don't, don't, uh, even if you can afford it, I would argue don't get yourself so far in debt because you want that bigger house or you, you know, you want what you want. Um, but certainly autos is a depreciating asset and I'm amazed at what people are doing in terms of, you know, buying $50,000 cars with, you know, seven-year car loans or, um, you know, or or $75,000 cars. Um, I, I would tell people, you, you know, again, people have to do what they feel comfortable with, but, um, you know, if you can, if you can be satisfied with something, uh, less and have less debt, uh, just know that what things look like today is not what things will look like, you know, five years from now. So, um, you know, I, I would just say, you know, um, live within your means to the greatest extent possible. If you're if you're outside your means already, work on getting your debt down. Uh, because the people that are going to have the best chance of, uh, dealing with what's coming, I think in the 2030s, are going to be those that are debt-free, uh, that, um, you know, got their house at financial house in order. And part of that is in the marketplace, the, you know, the stock market. You, if you, if you just buy into the buy and hold strategy that's worked so well for the last 40 years, you know, from the mid-1980s when the mantra really came on that it's time in the market, not timing the market. If you listen to that for the last 40 years, lots of people are millionaires ers because of that. They just kept in their 401ks and in their investments, just kept putting money into a mutual fund. Uh, and they rode it up and down, you know, they just held it. And so we've had some bare markets and they got nervous during those bare markets, but it always went on to new highs. And, you know, look at us today. We're at all-time highs and a lot of people have made, you know, the, um, I know the Dow, so I can quote the Dow. I can't quote the S&P because I can't remember what the number was back in 1982. But at the bottom in 1982, I was running pension money and I, I set the buy in August of 1982. The estimate was I think 780, $780, and it's now 50,000. So that's what's happened in the last 40 years. Um, so we're not going to see that repeat. In fact, we'll see, you know, much of that begin to reverse. So, my point is the mantra that has worked so well for the last four decades, um, from from your financial advisors and pretty much anybody in the financial industry of, don't try to time the market. You know, most people aren't good at that. Um, you're far better off understanding the compounding nature of money and interest and, um, just keep putting money in, dollar cost average or what have you, put it into a fund and it will grow and grow and grow. You know, it'll have some ups and downs, but, you know, the trend will be up. I'm, I'm saying here that that is not going to be the strategy that will be successful going forward. If you continue that strategy after, you know, let's say the next six months, um, you're going to be, you know, if if I'm right that you're going to have a bare market of a magnitude of 70 or 80%, you're you're going to be spending the rest of your time trying to climb back out of that hole. So, if let's say you have a portfolio that go, you know, that your your money manager, um, does better than the market. So the market goes down 70% and your portfolio only goes down 50%, it's still going to take you a while to get that 50% back because to get back to even, you have to double your money, right?
>> Yeah.
>> Um, [clears throat] if you go down 70, if you're in an S&P, and it goes down 70 or 80%, you're going to have to, you know, it's going to be even harder. So, if you can protect, that's one step in that whole process of getting your house in order, is if you can, and you don't have to be perfect, but if you can get out before the the bare market or get out early before the bare market really picks up speed and just sit out the bare market, um, you're, you're a huge step ahead. Uh, and then on the other side, the very important thing is that coming out of that bare market, coming out of the bust, um, it will be different leadership. So it won't be, it certainly won't be buying indexes that will be the most successful, although everything will rise coming out of the bottom. You know, when when you print as much money as I'm talking about printing and you go down 70 or 80%, you, you could see the, you know, the S&P triple out of that bottom or even more out of that bottom. Um, but, but then it's going to level off and struggle having to face inflation the rest of the cycle. So the the leadership of the next cycle, rather than being growth stocks and tech stocks, um, and and things that benefited from interest rates going from high double digit to to low, um, it's going to be things that benefit from inflation, which is, you know, first and foremost commodities, um, and precious metals. Um, it'll be energy, which is a commodity. Um, it will be industrial companies that are, you know, feeding into what's driving the inflation. So they're, you know, a company like Caterpillar will be ser, you know, a lot of their business comes from the mining industry, right? So, so they'll have plenty of business, um, and so they'll, their margins will expand and be able to keep ahead of inflation, but it won't be consumer stocks. The consumer will have been hit hard because, you know, the majority of people aren't going to be doing what I'm talking about right now. So, they're going to get hit hard. Their wealth is going to go down. Uh, they're going to lose jobs in the in the bust. Um, and, uh, they'll be digging out for several years after the bust, right? You know, look at any of our recessions. It doesn't, you know, the stock market may snap back quickly, but, uh, the economy doesn't come back that quickly. You know, it may not feel like you're out of a recession the first year out. Um, so they're going to be, um, you know, the consumer is going to be constrained. Um, growth stocks, initially, they'll do okay because you're down near zero interest rates and, uh, the first year out is, you know, they might go up a little bit, but they're not going to go right away. But as rates go up with inflation through the cycle, that really hits growth stocks because they depend on low, they depend on rates coming down, not going up. Um, and, you know, same thing with utilities, same thing with consumer, uh, staples. Um, so, so the things that will work in next cycle will be primarily the things that can have pricing power, that can keep them ahead of inflation, keep their earnings ahead of inflation. And the first on that list is really, uh, commodities. And I would, I would tell you, as bearish as I've been on energy, on the other side of the bust, energy will be one of the big, big winners. You know, I'm calling for $500 oil by early 2030s, and that will be coming from, I think, $30 or below in the bust. So, you know, you could see where that will be a big wind at your back type trade. Um, so it's, it that's a part of getting your financial house in order is to understand the market enough. You don't have to know it like I know it, but to understand it enough to kind of protect your capital when you need to protect it, and then get into some, you know, better areas on the other side of the bust. And then, you know, after that, it's really, um, you know, do the best you can. In other words, um, probably the biggest thing is like I said, we've been a shop till you drop society for a long time. If you can, when some some people aren't, but and so they're a step ahead, but for the others, if you can kind of discipline yourself to say, you know, maybe material goods and throwaway society is not the best way to prepare for what's coming. Cuz I can promise you when we get to the collapse, things you threw out and thought, I don't need this anymore, you're going to wish you had. And, you know, it's going to be, it's going to be a scarcity of of things. You know, uh, I would, I would encourage, I would encourage people, and I'm not trying to scare people. It's really, it's still a decade off, I think. Uh, and so my point is that there are things you can do to prepare in the next decade to give yourself a fighting chance. But I would just encourage people to, um, maybe read a little bit about the the 2030s, you know, read 1930s, read read about the Great Depression. And I'm not saying we'll see it exactly like that because it'll be different than that. But, but just understanding you can go from roaring 20s where everything looks great and, you know, party on to a point where it's like wow, in in a short time, we went from good to really bad.
>> Yeah. Things can change quickly. And, um, I really appreciate your time, David, just walking us through what you see, you know, coming up in the short term, of course, with the melt-up, your updated targets, the whole bust scenario with the factors behind that, and then, you know, a little harder to, to maybe accurately see what comes after that, but talking about, yeah, of course, what people can do to prepare, um, getting your financial house in order. And I know you're very active on Twitter at DaveH Contrarian. You also put out a quarterly letter by subscription. Um, is that, uh, do people just reach out to you directly for that?
>> Yeah, the best way for the the letter, and I, I'm getting an awful lot of people on on Twitter or on X, um, saying, "Can you sign me up for your letter? I want to sign up for your letter." And I think for most of them that say that, they're thinking it's a freebie. That it's just, you know, uh, put me on your list and send me your letter or tell me how I can read your letter. It's by subscription. That means it's, it's an annual subscription. There's a, there's a price to it. Um, if people, uh, still are interested, knowing to pay for it, um, they can, um, send a chat message to me. You know, it used to be a direct message was what I used as the term for X, X's message system, but they changed it to chat in the last couple months. Um, and it, it's an encrypted system now. It's, it's, it's got a lot of glitches to it, and I don't know whether they're working on them or not because I see no changes. It's complicated my life a lot because I used it a lot to communicate on the subscription, and just as an example, you know, I get, I'll get a bunch of them, particularly lately. Um, and I'll reply to them, and I can't tell whether they're reading, they can read my reply or not because what I get is a message. It doesn't show, it used to show what I sent, you know, just like any message you sent in an email or whatever, you'd see what you sent. Now it's something like, did not load. Um, [clears throat] and so, uh, but oftentimes they are seeing it, but I don't know whether they're seeing it. Sometimes they aren't, and most time they are. And then when they reply to me, I can't read their message. So, but I, I do, when when they reach out to me on chat, um, I send this, um, you know, um, extra, this info, you know, comes in a basically a paragraph of info, and within that, um, is my email address. So once you get that, and you, if you're interested, you can email me and we can have a conversation because people are still trying to do it through chat, and, you know, sometimes I'm not, I'm not able to see what they're saying, and I'm not sure if they're seeing mine. I, it's a mess. I mean, [laughter] that's all I can call it is, you know, I know Musk has bigger things to do, but he better get somebody in there to fix it because it's a mess.
>> Okay. Well, there you have it. Reach out to David Hunter on X if you want his letter or to just follow him. He's very active there most days as well. So to keep up to date with you, David, I thank you so much for taking the time to chat with me again today. It's crazy to think that it's been about five years now that we've talked about every six months. So I really appreciate your time over the years, getting to watch and learn from you.
>> Sure, Logan. Glad, glad to do it and, uh, great to know you and, uh, hope, hope, uh, you can, uh, get through the rest of the winter out there in Montana. [music]