'Historic' 40% Rally In Stocks By Summer: David Hunter Doubles Down On Market Melt-Up

I have a target of 7,000 for the for the S&P um 23,000 for the NASDAQ 55,000 for the Dow and the hardest one for people to believe probably is that my target on the Russell um which had been 3,000 I've raised that to 3,300 you know I I'm expecting a recession probably to start sometime this year the Melt up could be over this summer David Hunter returns to the show he is a chief macro strategist of contrarian macro ad ERS and he's had over 50 years of experience working in the investment management industry David was on the show last year calling for a market melt up well he still thinks the market will melt up this year and in fact he's revised up his forecast for stocks we'll find out exactly what he thinks is going to happen this year and next and we'll be talking about the Federal Reserve we're speaking right now ahead of the FED meeting on May the 1st Wednesday so we don't know exactly what Jerome pow is going to announce as of the time of this recording but we'll talk about the FED regardless uh this episode is sponsored by nordvpn and if you're new to the channel make sure to subscribe and hit the like button and hit the Bell button to stay up todate on daily finance and economics updates with experts in the industry David welcome back to the show always good to see you hey David great to see you again great to see you let's just start with your call First that you made on my show last summer you said that the stock markets will get a major melt up before we get a meltdown and we can walk through your thesis again for the audience who hasn't seen that episode you can click up here or in the link down below to revisit David's call from last year but you said that we're going to get a melt up to potentially 6,000 to 7,000 points on the S&P 500 now we did get a sort of melt up the S&P continue to Rally like you said we didn't hit 6,000 we 7,000 yet so my first question is are we still going to get that level is that still your call yeah that's definitely still my call in fact I've I've dropped the 6,000 part of that range and I've back in January and I raised my target to or or uh had my target move to 7,000 so I don't think I need that range anymore I think you know my work shows that we are going to see the upper end of that that range so I have a target of 7,000 for the for the S&P um 23,000 for the ndaq 55,000 for the Dow and the hardest one for people to believe probably is that my target on the Russell um which had been 3,000 I've raised that to 3,300 so I think you're going to see this Market once we come out of this you know small pause we've had for the last month um resume its upside get actually steeper and a run to the top from here um will be broad uh include small cap and large caps uh include growth and value I I think it's going to be uh a historic run let's put it that way okay well David just just to recap recent price movements it seems that this bull rally that uh the risk assets have had is starting to taper off stocks have seen new all-time highs Bitcoin has seen new all-time Highs but all these risk assets have pulled back somewhat so how would you evaluate the current state of market performance yeah I'd like to say Market St stair step their way to the top so um you you have to have these pauses along the way to rebuild the skepticism otherwise markets get ahead of themselves get overbought so um really this Market uh it's been probably four or six weeks of of sideways to down more recently down movement uh it's all within an uptrend I don't see anything here that causes me concern uh and actually what I see is that wall of worry that helped carry us from you know 3500 on the S&P back in October of 2022 all the way up to 5250 um the move down here to you know just a small move of maybe 6% a little more um you know has rebuilt that wall of worry and that's the fuel that fuels the upside if you if you have skepticism you have penup demand we're going to continue with David's call on the markets but 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two-year plan plus four extra months simply click on nordvpn.com David Lin in the description down below to learn more we're going to get much lower prices do you think before we get that rebound to 7,000 I think the odds are it's possible we could get down to 47 4,800 I think that's unlikely um which isn't all that far from you know where we bottomed out last week um I think more likely that low of last week holds um and you know today who knows you get volatility out of fed meetings so who knows what today brings could go down to 5,000 or may not um but I think this is the end of that consolidation and within hours or days I think we resume the up upside so I don't look for a lot of downside here if we do happen to break the lows of last week like I said a 4700 is I think the 200 day moving average that could come into play I'm not expecting that I think when I look at the internals and look at the the nervousness out there I think more likely um we're going into this meeting very skeptical people are nervous uh and and getting more nervous um that you know fed hikes are done and you know the fed's uh got to worry about inflation coming back the other way you know breaking out again um so I think people are going into this with you know pretty pretty big amount of skepticism about a bull market and that to me um is going to temper any downside you know and I I think my guess is is that Po's going to um not come out all that H because he'll he'll continue to say higher for longer I would guess but I think they're going to have to temper that with the idea that there are signs certainly saw it this morning in some of the numbers and and recently there are signs that the consumer is slowing down that the economy is slowing down so um we had that kind of um strength in the first quarter but obviously the GDP number recently was was uh unexpectedly low um and you know numbers in uh the ism numbers and Chicago purchasing managers yesterday all those things are are coming out um indicating we're we're in a Slowdown you know this economy is getting weaker so the FED has to look at both the economy and inflation I don't think they can get much more hawkish here I think they have to worry that they are going to tip this thing into a recession if they're not careful so what do you think they're going to prioritize inflation or unemployment I think he'll still come out saying you know the risks are somewhat balanced they'll probably prioritize inflation a little bit uh given you know the comments of the last month um I would guess that most of the FED members want to make sure that we don't let inflation heat up again um however like I said the numbers of late have to be causing them some concern that you know things are are getting weaker here and we can't go too far and they they understand they may not fully understand but they understand there are leads and liks to their policy and if they you if they go too far uh they they aren't going to be able to reverse that quickly Let's uh talk about Market expectations for what the fed's going to do I'm looking at the CME fed watch to and again this may change in a couple hours when um the fomc comes out with their decision and we hear from Jon pow but I'm looking at a 40% chance of a cut by September that's the first significant probability of a cut uh this year I'm not seeing any probability of a hike what's your take when are we getting a cut yeah I really don't worry I don't play that game of how many cuts are we going to get this year and when um you know they will happen I'm pretty sure we'll see some cut this year I'm not in the camp that says there will be no cuts um and you know I also think what we've seen here in the last two or three months particularly the last two months is because inflation came in above expectations um you know particularly CPI but others other numbers too um and because um uh the FED is starting to worry that you know things are go the other way commodity prices have picked up some things like that oil prices were up um obviously um the expectations for rate cuts um lessened and they got pushed out you could just as easily in the next couple numbers next couple months get numbers going the other way um and see those expectations come right back the other way so I think people misunderstand that what the FED thinks today is not necessarily what the fed's going to think tomorrow and what you know or next month um and you know what we see in the bond market is a reflection of expectations today those bond market expectations can change on a dime and I actually think the likelihood is that in this sometime in the second quarter we are going to start seeing it go the other way and maybe some of those economic numbers of the last few days will be part of that you know is the beginning of that so let's revisit your uh melt up call once more H what is your overall thesis here are you betting on a recovery of the economy are you betting on more um fed liquidity what's going to drive prices up to $7,000 uh 7,000 points on the S&P yeah let me put it this way I think the narrative that will drive it will be that rates are coming back down you know I think this has been a correction rates don't forget rates were at 5% um and you know back in early November gap down and started to move down to 380 so they dropped 120 base points we've had this backup in rates but I think it's only a correction in that downward Trend so even though it backed up quite a bit um my guess is that downward Trend resumes so I expect rates over the course of this year to get down under 3% on the tenure so part of the the Melt up will be lower rates um I think we will get back to recognizing that inflation is trending down and moving towards that 2% Target um so that will be received bullishly um I think you will see earnings um look like they're turning up so you're going to see increased earnings expectations over the course of the next you know six months uh and estimates for next year starting to be hiked um and I think you're going to see as this Market comes out of this consolidation and um investors realize they're not going to get that lower entry point that they were hoping for because you've heard the calls out there people are looking for 10 or 15% pullback at least and so they're thinking yes I missed the bull market yes I missed the run from last October um yes I believe the market can go higher but I'm not coming in here I'm going to come in 10 or 15% lower when this thing reverses like I said could reverse today or tomorrow when this thing reverses and I so could I don't know when it'll reverse but I think it's very soon um when it reverses you're going to see a lot of those people on the sidelines who have fought this Market all the way up saying this is I got to get in now I can't wait for more pullback and um so you'll get fomo kicking in um there's a lot of skepticism out there people didn't believe the market when it moved from 3500 to 4600 then when it went back to 4,100 um last October um they didn't jump on there they only jumped on and began to jump on when it got to new highs and a lot of them said okay it's new highs maybe it is a bull market but like I said they're saying I'm not jumping in here I'm going to wait for a pullback they're thinking this is going to be a deeper correction when it doesn't turn out that it's deeper they're going to be forced to have to buy on the upside so that means fomo 7,000 on the S&P is 40% higher than today's level which is 5,000 are you expecting a slow grind up to 40% higher from today David which would take months if not years or you're expecting a catalyst from either a political geopolitical event or a macro shock that will send prices much higher in a very short amount of time yeah um the answer is I do expect it to be relatively fast so I think you as I said that this may be the last leg coming out of this correction this this six or s% correction um this may be the last leg so from let's say it turns at 5,000 I think you could run this from 5,000 to 7,000 by this summer so it'll be very steep um and I believe it will be um the second part of your question again was no yeah geopolitical I don't believe it's geopolitical um I don't think those events are going to be what drives it um I don't believe um it's it's really any major uh macro event out there it's really the recognition that the fed's done tightening um that at some point here in the not too distant future they're going to start easing or cutting rates and that that means we have a pretty long Runway ahead in terms of not just what's happening second half of this year but what's happening next year and the year after in terms of a an upswing in earnings and an upswing in the economy so if if the um inflation CES down if interest rates start rolling over again um then I think you're going to have people say what am I on the sidelines for I've got to get in so it's really is really driven by people having to change from that bearishness they've had for the last two years uh and skepticism they've had to getting on board because they'll see it as a new cycle well that's the critical assumption here isn't it that inflation comes down in the FED lowest rates why is inflation coming down well first of all look at oil and I've been a bear on oil so uh and pretty much the only bear on oil for quite some time uh when it was 130 back in 2022 I said it could go to 85 and then when it got down there I said it could go to below 60s I still believe that's where we're headed and you know this most recent runup where uh WTI crewed went up to you know the mid high 80s um everybody was calling for 100 again and saying you know what are you crazy you think oil's going down in this environment well oil's down at 80 and it looks like it's heavy and heading lower I think you're going to see this year um $60 oil and uh so um that will help I mean that's you know gasoline prices will follow oil so gasoline prices which have been up strongly the last six months are going to roll over um I think you're going to find some of the things that spiked like cocoa and cotton and some of those things that got people's attention because they were up they're rolling over um you know orange juice rolled over uh the grains if you look at the grains they're heavy uh they're they're they look more deflationary than inflationary um I think the most recent rise in rates is going to at some point here temper housing um it has in some places already seeing home prices break in some of the you know the Western cities um so there's there's all of that as I said the consumer of late is showing weakness I mean look at Starbucks today they came out way below expectations in terms of their their quarterly stuff so um you know you're starting to see a sign that and I've talked about a Have and Have Not economy for quite some time um you're seeing a sign seeing signs that the have not part of the economy which is pretty much the middle class on down um are really having trouble uh they don't have a lot of discretionary income so and I think delinquencies on credit cards are another sign that you know there are um you know there are signs out there that the consumer is getting stretched right so that was actually my next question what if we tip into a recession what if the consumer gets overstretched and businesses start to actually see earnings deteriorate not improve are you still going to stick to that melt up call or would you revise well let's put it this way the Melt up could be over by the time you know I I'm expecting a recession probably to start sometime this year the Melt up could be over this summer and you're not going to really know I mean the economy still looks like um yes it's slowing but it's not you know you're going to still have a soft Landing scenario out there for at least next few months things aren't going to roll over hard here um they will roll over hard later but I don't think it's going to change the narrative in the short run I mean it was just it was just weeks ago people were so sure we weren't you know we went from soft Landing to no landing and then that GDP number came out and kind of caused people to S step back a bit you don't think that uh the stock markets tend to lead economic uh activity meaning if we get a melt up doesn't that mean that the markets are investors at least are expecting economic growth not a recession well keep in mind I'm calling for a big bare Market to follow and melt up and I'm calling for a global bust next year which could even start before the end of this year um but there are periods of time where the market will be looking at the here and now and so you can have a final runup into a secular top even though within six months you're heading South I want to come back to the this uh melt down after we get a melt up in just a bit but let's revisit some other asset classes first you mentioned the Russell which is small caps and midcaps that's interesting because the Russell's been trading range bound since I think 2022 and has been lagging the large caps if you think that's going to go up then then your thesis is not just a few big companies pulling up the S&P with the NASDAQ you think the entire Market is going to get a melt up yeah I think as I said and I've said this for a while um I normally when you're and this this is a run into a secular top that I believe the secular bull market started in 1982 August of 1982 so this is the culmination of a 41 going on 42e secular bull market normally if you're going into that kind of a top markets narrow into the top right so normally you would see a market get ever more narrow as it did you know last you know going back to early this year people were saying oh this is just the the mag seven you know this is a very narrow Market it's not good quality and I fought that and said actually if you look below the surface you're getting some broadening of the market and that's continued into this this period now so um it's an unusual thing to have it brought into a secular top but that's exactly what I expect you will have if rates are coming down and yet um people are seeing signs that the cycle you know the FED may end uh tightening uh and the and they can start looking over the trough to the next cycle they'll start buying cyclicals which they have already done they've started that um so you'll see cyclical running you'll see value stocks running you'll see growth running um rates will be coming down so you'll get that benefit in dividend stocks Etc um and you'll have growth stocks running because rates are coming down so I think you can have a broadening the market into the top surprisingly okay so uh can you break that down uh even further so growth stocks and uh and some value stocks running uh which sectors are we talking about here yeah I think some of the areas that will do the best I mean we've seen recently copper waking up so I think in the in the cyclical valary I think you'll see copper producers and other uh I actually I think although it's been weak this week or the last couple weeks I think steel will do well um I think you'll see some of the laggards like autos and and um Airlines and things like that will will have a catch-up rally um home builders which have been very strong for the last uh year and a half I think will continue that strength for a while longer uh they look like they've got more legs so the home builders will continue to do well now at the same same time you've got those cyclicals doing well and and by the way xli which is the industrial um ETF uh that thing has been very strong for quite some time it was one of the things I used to push back against you know the market being only the mag seven you look at the ingersol rans and the cats of the world and the um you know the Packards of the world uh engines um Eaton you know that that sector has been strong and I think think that strength will continue um in the in the tech on the tech side on the growth side um I think you know the Amazon of the world the mag sevs I think will uh some of them been hit and they will come back um and some that are you know showing some strength like Amazon today uh came out with their earnings I think you'll see that continue with more strength um semiconductors which I've been on since the beginning of this move way back in 2022 highlighted them as a leading sector I I think that will continue I've got a Target on SMH of 300 um so you know you've got 50% upside there um so there's a you know a broad array even things like biotech which has been really flat on his back for a long while and hasn't been a much of a participant I think even that if rates start coming down we'll start catching up during this melt up should we stay away from defensives like Consumer Staples utilities yeah I think they will be the laggards um you know they'll probably rally because if you're going to have a you know 40 50% rally in the market they will they will participate but they'll be the laggers that underperform the market um and so um yeah I think utilities um the health care area maybe um uh you know certainly stap um those areas I would probably say are the ones that are going to underperform and the one that I think probably is going to under form maybe the most is energy I think the you know XLE ETF I think is is potentially goingon to be going down while the Market's going up what about uh other asset classes let's talk about gold so gold has had a huge runup um where does gold fit into your picture of this melt up and then a meltdown yeah I've been a huge huge um gold and silver bull here and I think it's just beginning so um gold my target on gold has been for quite some time 3,000 and I think that's a conservative estimate of where it goes pre- bust so I my targets when I put out a Target I'm saying pre- bust so you know um I think gold can go to 20,000 by the end of the decade uh for reasons we can go into when we talk about the bus but but pre-bus I think it can go to 3,000 and silver I have a target of 60 and I've been saying of late that I think if it gets through 60 you could see 75 very quickly so 60 to 75 is kind of where I see silver going this year um so those are big moves and the miners which have lagged um and uh they've had to move out of their bottoms of a few months ago but they've lagged um I think they have huge upside from here why would gold go up and an environment when all other risk assets are going up I mean presumably if you have things like the S&P going up 50% or 40% according to your call then Capital needs to flow into those risk assets Capital wouldn't be flowing into Safe Haven assets like gold right yeah it's it's interesting because I think people have a recency bias where they assume um that the precious metals have to move opposite of the uh Market the equity markets and yet go back to the first decade of this Century you know 2001 to 2011 you had a bull market in stocks during a good part of that and you had a very big bull market in precious metal so there are times when they move together and I certainly think this is one of those times technically they look very strong um there's there you know gold obviously has moved to all-time high so there's no resistance above of it Silver's got a lot of uh resistance to move through but I think it's a very thin area that once once uh institutions decide that they need some of that because the momentum is there you will see that the prices can move dramatically in in pretty quick fashion okay well Bitcoin is by the way let me answer the in terms of in terms of um the metals I think rates coming down and probably the biggest part of it that has not manifested yet but I think will is the dollar coming down I have a dollar Target of 80 so okay so if the if the Dollar's at 106 and I have a target of 80 imagine what that does to Metals if I'm anywhere near correct well the dollar has been strong so that is quite a contrarian call can you elaborate on that why is the dollar coming down are you expecting um other central banks to be more hawkish no well yeah think what it's going to be not so much quish but I think and again this is contrarian call but I think we're going to find that um the fed's GNA have to scramble uh and reverse themselves here and I think the others are going to be slower to do it so ECB and and Bank of Japan obviously is going to be going the other way they've got they've got issues here that I think are going to come to the Forefront here very quickly where you know their currency is going down I mean you know their currency is going down their rates are about to break out and they've got you know a very leverag balance sheet so I think I think you're going to see I think there is a potential this is not a forecast but when I look at the currencies and see what's going on it strikes me there's a potential here for some sort of an accord you know Plaza Accord of 1985 I'm not sure it'll be that but but something where they coordinate uh the valuations of the current uh particularly particularly the yen versus the dollar uh because Japan can't can't withstand much more pressure okay what's going to happen to the 10year yield is it going to retrace 5% currently at 4.65 yeah I there you know the 10year gap down last November from 480 so there's a small Gap there at 480 and we're not very far from it so it could you know here in the next couple days fill that Gap other than that I don't think it's going very far to the upside um I am not in the camp that says we're going to go back to 5% or higher you know obviously we could but I I think 480 is kind of possible and then I think we roll again um and I'm as I said before I'm looking for sub three% here in the next six months and um and it could be two and a half% we could go as low as that so for that to happen some of my other uh call has to manifest itself meaning slowing economy starting to look Troublesome um you know inflation rolling over uh we find out that the first quarter numbers you know the first three months of inflation were were more of a counter Trend move and that we go back to the downtrend uh if those things come to the Forefront I think you're GNA see bonds do very well before we get the Meltdown then bonds will still perform well yeah I think bonds go from here to 250 let's say on the 10 year maybe sub three on the 30y year um you know obviously shorter rates will come down and then um you know it's possible from there we get a counter Trend move back up they're not going to go straight down so you could see two and a half let's say back to three and a half um Trend the recent trend for the tenure has been up something has to happen for that to reverse course right what's that Catalyst you think well again trend is short-term Trend yes has been but but don't forget we were at 5% went to 380 so what we're dealing with here in my opinion is a counter Trend not the main Trend so if it rolls over it resumes the the main Trend which takes it sub three maybe to two and a half then we get another counter trend from Two and a half maybe back to three and a half during during a period where why do we get that we could get that because the FED looks at the market at 7,000 or somewhere between six and 7,000 and says my God you know Animal Spirits have broken out we got Commodities running we got a Titan so they could even though they begin easing and I don't know whether that means rate Cuts or you know no more qt or what have you but they could then reverse themselves back right on the eve of a global bust because they're so worried about the market breaking out um and Titan at the very wrong time you know the exact wrong time so you could get a counter Trend moveing rates back up uh not all the way back to here but you know back up 100 base points um but yeah I'm not so worried about that let's get to the two and a half first and see where it goes and then if we get that counter trend from there or even if we don't from there during the global bus I'm calling for the tenure down to zero or below and short rates to negative territory so I do think there is one lower low in rates coming next year um during a global bust Bitcoin then how do you see Bitcoin fitting into this picture I I I I'm guessing you think Bitcoin is also going to melt up alongside stocks fortunately I don't have to make that call because I have I have begged off of Bitcoin from the very beginning I've said I I just don't follow it so right I think it's I think it's a tough call if I were following it today I think it's tough call Which Way Bitcoin goes um from here because it does look it you know I could make the case either way but you know I don't follow closely enough to be somebody to listen to about that fair enough let's talk about this Global deflationary bust what is that what what are we referring to exactly yeah so there's you know there's shorter Term Policy and longer Term Policy implications um I think basically uh my my thesis for a global bust is that we have leverage in the system so much higher than it's ever been before and we're heading for a downturn so you know I think um when I say leverage higher than ever before we've got 320 trillion in global debt right both private and public um we've got um quadrillions in notional value of derivatives which is leverage on the markets so you know even in even looking in comparison to 20089 we are so far beyond anything we've ever seen before leverage works well on the way up right it helps enhance Returns on the way down it really exacerbates problems so so first and foremost the reason for a bust is that leverage can turn a normal downturn into something far worse we saw we saw that in 20089 in Spades um you know leverag in our banking system system was why we had a financial crisis like we've never had this time you've got leverage far beyond that um our banks particularly our large banks are in better shape because of 20089 but European banks are in trouble um Canadian Banks didn't learn our lesson they were in good shape back in 20089 you know their their system is very leveraged today um Australia's leveraged China's got problems obviously Japan's very leveraged so I I think the problems could come you know the Catalyst could come from overseas uh but it's going to be Global we'll be a part of it um and and the the other piece to this so I go if I put a formula together it's leverage plus fragility caused by the pandemic I think under the surface we still have a lot of um imbalances caused by what happened in the you know the 202 20 to 22 area you know there's yes we've recovered statistically yes lots of areas have done well but lots of small businesses failed and lots of others are hanging on by a thread it created because of the response the five trillion in in QE and uh and all the the debt we put out to deal with the pandemic it's caused a very fragile system you know we've got a and this is I'm talking about the us but it really is around the world there's more fragility in the system going into what I think will be a recession this time around and that just will exacerbate the it'll be a global recession um I think the problems the imbalances are around the world we're not unique in that and then thirdly so I go leverage plus economic fragility from the you know caused by the pandemic plus um what I think will be a very big policy error on the part of central banks so the central banks don't in my opinion don't really understand the underlying risks they're not they're not thinking any they wouldn't be doing what they're doing now if they understood how fast this thing can go from looking fine to disaster you know the leverage will take this thing down fast we saw it in 2008 I I remember in 2008 in early September of 200 eight I remember I was one of the only voices out there saying we're we're heading for a hard landing and I got a lot of push back because every Economist out there was saying soft Landing no recession in sight three weeks later we had Leman brothers and a huge financial crisis so that's how fast things can come look look okay and then turn around and go sell um and I think that's what we're going to see leverage will do that again when you say deflation are you referring to to deflation in asset prices or deflation in CPI consumer prices yeah I think we'll actually see um overall deflation it won't last long it's not a depression it's not a long drawn out but I think technically even our price indexes will be in deflation so it'll be it'll be asset prices for sure I'm calling for an 80% bare Market or the potential of an 80% bare Market from the top but um but it's more just ass some prices I think you'll see commodity prices fall through the floor my my oil Target in the bust is $30 so that gives you some idea I think we're gonna see Commodities get hit hard copper could go from I have a copper Target for pre-bus meaning this year of of $6 and I had that when copper was three and a quarter you know six months ago um I have a copper I think copper could go to as low as a dollar in the bust so you're going to have some big moves in in Commodities you're going to have you know other prices coming down across the board so but I I think any deflation lasts you know not more than a year I I when you say that this is not going to be a depression I wonder why you think that is these problems that you've highlighted are long-term structural problems that if they do manifest in some sort of sharp economic downturn it sounds to me like it might last a while right but it won't good good question it won't for one reason and that is the printing press they will we we saw what they did in 2020 right we saw what they did in 20089 um and and you know the period after that with QE one two and three what I think you're going to have when I when I say Bust I should Define bust because people use terms without really understanding what they mean I've I've started to talk about bus many years ago before it was being used um global bus to me is something sort of like 20089 except it goes farther in 20089 we were on the verge of a bust when ge when GE was about to um go under because the commercial paper Market was frozen if you remember that in the fall of 2008 the the commercial paper Market froze up and fortunately the government responded very quickly and that was right after Leman and and responded with with a lot of money you know um and so um we we avoided the bust we avoided that stage that would take us over to Cliff we got very close but we didn't get there this time I think we go over that cliff and the reason is because of 20089 and because of 2020 our Central Bankers are all telling us they won't do that again right they're all saying we don't want to go back there we know it was a mistake we're not going to print money like that again that's nice to say until you're staring it in the face and you've got Banks across the the globe Domino you know Domino across the globe and failure you know they can't sit there and say well but we don't want to cause inflation so we're not going to print money or we don't want to prop this up they will come in and my estimate is that what it will take this time around you know took five trillion in 2020 or at least that's what they did this time around I think you'll see the FED balance sheet expand by 20 trillion so you'll go from you know nine or 10 trillion to 30 trillion um and you'll see like proportionally like amounts coming from every Central Bank that's GNA spark massive inflation would it not with a lag because they're dealing with deflation and financial crisis you know of major proportions it will take a couple years for that to manifest in terms of inflation starting to break out you'll go from negative inflation in 2025 maybe into the first half of of the following year it'll be low single digits by by by the end of 26 and into 27 inflation is going to move in high single digits toward double digit by the end of the decade I think we'll be looking at 25% inflation in this country so so yes it's going to manifest in a huge commodity cycle a huge inflation cycle I'm calling for $500 oil by the end of the decade um you know like I said gold 20,000 copper will go through the roof you're you're going to cause a real collision between this massive money and no infrastructure to deal with all the money chasing fewer Goods by by the way uh this financial crisis that you're speaking of down the line well we're getting sort of a uh uh renewed fear of a financial crisis now in the US with the uh Republic First Bank recently shut down by uh Regulators people are commenting that hundreds of small Regional Banks across us are feeling stressed this came in from an article from CNBC uh Christopher wolf managing director uh of Fitch ratings told CNBC that you could see some banks either fail or at least you know dip below their minimum Capital requirements it seems seem to me like even the people at the top are believing that this is not the end of bank failures where do you stand on this yeah I agree with that I think I think in the in the bus which is mostly next year like I said it could start before the end of this year uh who knows because because we we will start with an economy in recession right it'll look like a recession and then then morph into a bust as as the financial system starts breaking so so I think we'll see recession before the end of this year whether the bus hits before the end of the year or not we'll see um yes I think there's major Bank failur going to happen like I said in terms of the big Banks our big banks are in better Capital shape than they've been you know they they were forced to get religion at the um you know back in the 20089 G GFC however there's so much counterparty risk out there and if we see major Banks failing around around the globe it's going to come back to us so I can't say our big banks are immune certainly our regional banks are very vulnerable we saw that a year ago and like you said there's some signs and that's why um it's important to remember this stuff doesn't happen overnight you don't go from everything healthy to everything breaking there's things under the surface that are moving in that direction already it just doesn't all happen um in a time frame that everybody expects so I think by the end of the year I think some of those problems you know we've got obviously commercial real estate problems in those Regional Banks um you know there's a lot of things under the surface but that does not prevent a melt up before we get there that was a very thorough discussion of pretty much all asset classes that I can think of for the moment we didn't cover real estate but we can go into that uh next time uh in more detail thank you very much for your analysis where can we learn more from you and reading more of your work sure yeah I'm on Twitter pretty much every day so my handle there is davh contrarian not David but at daveh contrarian um and I also put out a quarterly letter that's by subscription um I always tell people if they have interest or think they might have interest in it um there's a cost to it so if you want the details on the on the letter uh direct message me on Twitter so just um you know click that little l enel open in the Box uh and message me and I'll provide details yeah you have a lively Twitter threat so I me I encourage people to go uh check that out and follow you and read more of your work so we'll put the links in the description down below and of course uh check out Dave's newsletter as well thank you very much I'll speak to you again soon okay thanks David and thank you for watching don't forget to like And subscribe

Channel: David Lin

Views: 137,074

Keywords: david lin, the david lin report, david lin youtube, david lin finance, david lin investing, david lin trading, david lin economics, economics, finance, business, macroeconomics, trading, investing, financial news, finance news, economics news, business news, economy, david hunter, stocks, stock market, stock market crash, financial crisis, inflation, deflation, contrarian investing, federal reserve, monetary policy, gold, commodities, bonds, interest rate, stock market prediction

Id: t9vNPckCZMo

Length: 47min 31sec (2851 seconds)

Published: Wed May 01 2024