Stocks, Gold, and the Biggest Macro Shift in Decades | David Hunter

Hey, good morning. Happy well, Thursday, everybody. Welcome into this week's

everybody. Welcome into this week's long-form episode on a shortened holiday week. And happy Canada Day to all of our

week. And happy Canada Day to all of our listeners up in Canada, and happy 4th of July 250th United States of America. We are jumping

into a long-form episode with the ultimate contrarian, David Hunter from Contrarian Macro Advisors. And he's been pretty

Advisors. And he's been pretty outspoken. Well, David's always

outspoken. Well, David's always outspoken.

But he comes on MSD and really lays out the framework of what he is expecting for a final melt-up, [music] and then a bust. What does this mean for precious metals? What does it mean for

precious metals? What does it mean for commodities and mining equities?

It all is laid out here over the next hour conversation.

Thoughtful, thought-provoking discussion with David. Special thank you to Visl

with David. Special thank you to Visl Silver, Revival Gold, Integra Resources, and Equinox Gold for their continued support of Mining Stock Daily.

And I'm just going to jump right into it, because I know you all want to listen to David.

Have a wonderful holiday weekend, everybody. Be well.

everybody. Be well.

All right, I'm really excited to really I guess you could wrap up the first half or begin the second half of the year, but going into a long 4th of July

weekend, 250th birthday to the United States. So, pretty meaningful long

States. So, pretty meaningful long weekend as well.

But here on Mining Stock Daily, we talk a lot about contrarian investing, and no shortage of contrarians. In fact, you almost have to be if you're dabbling in the metals markets and the

miners and anything commodities. But our

guest today really hangs his hat, puts it in his title. He is the chief macro strategist at Contrarian Macro Advisors.

Happy to welcome in David Hunter. David,

good to see you. It's been a while.

Yeah, hi Jordan. Great to see you.

Yeah. Uh,

you know, it has been an eventful first 6 months of 2026.

Uh, we are expecting more of an eventful second half. You've been out there uh,

second half. You've been out there uh, doing a lot of discussions within markets macro media as well.

Uh, but I really want to start before we kind of take a deep dive in.

Let's take a step back and really, you know, when we think about being a contrarian, we talk about finding things that are absolutely hated, are in the dumps, maybe the chart looks terrible.

Um, but you take us as a little bit differently. Your contrarian view

differently. Your contrarian view thinks, you know, we're not necessarily in an equity bear market by any means. In

fact, you think we could go even higher and that goes against the consensus view. Maybe talk about be as a

view. Maybe talk about be as a contrarian, like what is really setting you apart from most, you know, contrarian analysts out there?

Sure. What I say is uh, I've been a lifelong contrarian. I've certainly

lifelong contrarian. I've certainly career long and I started my career back in 1973. So, um, it kind of comes

in 1973. So, um, it kind of comes naturally to me. I've learned a lot over the years and become, you know, refined my craft, so to speak. But, but my view

of contrarianism is it's not knee-jerk contrary. You know, if if the consensus

contrary. You know, if if the consensus is here, I want to be here. It's really,

you know, I'm still um, you know, macro strategist. I look at fundamentals, I

strategist. I look at fundamentals, I look at technicals, etc. What I say is that where I'm most contrary is going to be at the important inflection point, whether that be top or

bottom of a market. Um, and what you find and what I found very early in my career is that at tops, most people are bullish and at bottom

most are bearish and I flipped that on you know on its end and and I'm most bullish at bottoms and most bearish at tops and it's natural for me. I mean I'm not I'm

not doing it just to do it. It's really

what I see at that point. So sentiment

is really important in my work and so I do that. What I get a lot on I'm on X every day. What I get a lot of pushback on is

um you know when when the market's in a a middle of a a bull market where a lot of people are bullish, they'll go you're not you're not contrary at all. You know

you're you're not really living up to your name and I'll go yeah, there's there's a time in market moves where the consensus is correct and so it's at the turning points where you're going to

find me very contrary and certainly you know on on sell-offs or pullbacks where you get people going the other way and you you build that wall of worry up.

Back. I'll be back on you know, I'll be back on the contrary side or look more contrary again, but but it really is not a case where I always want to be contrary. It's it's you know, my

contrary. It's it's you know, my fundamentals and technicals drive me and I'm really really happy when the contrary side is there too.

Yeah. Well, let's maybe let's rehash the last 6 months. I mean not necessarily in-depth. That would take

in-depth. That would take multiple hours here David. So we don't want to do that, but I mean we've seen geopolitical tensions, persistent

inflation concerns obviously and this AI driven enthusiasm in equities. In fact,

we're recording Wednesday morning. We're

seeing a big headline from Meta.

Don't have to dive into that, but I'd start scratching my head and start asking questions on that news. That

stock's up 7 months. So the AI driven enthusiasm not going away right now, but has anything fundamentally changed your outlook or does today's market still fit within

that long-term roadmap that you've been laying out for the last few years?

Yeah, my my view hasn't changed. I've

raised targets um several times obviously in my most recent uh raise uh my hiked my my S&P target to 10,000 and my Nasdaq

target to the 36,000 from 32,000.

Um and I still got a very bullish view on the Russell which I think can go to 4,000 uh and the Dow at 67,000. So my my

targets have been raised several times in the last couple years. Um but the the bull market's still intact. I see

nothing to indicate a top here. I know a lot of people are very concerned about the market here.

And I actually think we're we're about you know, we've consolidated for a couple weeks here. I think we're going to we're going to come out of this consolidation this month and have you know, pretty strong July and probably a

strong August. So um I you know, nothing

strong August. So um I you know, nothing nothing is there to suggest that any kind of a rollover is imminent. On the

other hand you know, AI in particular is up on stilts and semiconductor stocks are up on stilts. So we are in a higher risk

on stilts. So we are in a higher risk area but my whole thesis as you know is that we are in a you know, the end of a long

secular bull market one that I believe began in August of 1982.

So we're coming up on the 44th uh year anniversary in August. Um

and you know, markets end and often times big market big secular moves end in a parabolic uh or often do. And

that's been my case is that I think we will see this thing have a a final blow off and uh and then I think you got to worry about the other side of the market. But as of right now I think

market. But as of right now I think the coast I'm I don't want to say the coast is clear. There are plenty of things to keep people worried, but I think what you're going to see through the balance of this summer and maybe

into the fall is a lot of those institutional investors in particular who have had one foot out the door throughout this becoming

uh more bullish. Maybe it'll be that Iran looks clear, that you know, things are clearing up there and it's not, you know, it's not World War III. Uh maybe

it'll be the continued drop in oil prices. Uh maybe it'll be the fact that

prices. Uh maybe it'll be the fact that people start seeing that, hey, the economy, although it's it's not robust, it still has legs and certainly what it'll be is that earnings remain strong

and they've been amazingly strong this year. So, I think all those things and

year. So, I think all those things and one other thing that I think is going to add to that as well, prices drop as um you know, inflation rolls over, I think you're

going to see the bond market finally um come out of what is it, 2 and 1/2 year bottom and and have a, you know, pretty pretty strong bond bond bull

market over the course of the next year or year and a half. Um and that will, you know, interest rates will be dropping. That'll be another wind at the

dropping. That'll be another wind at the back of the market.

Okay. Uh well, before we kind of get to the effects of uh what you said, the potential blow-off top, I do want to talk about how we get to that point.

So, what evidence are you seeing here that tells you that we're still in this kind of melt-up rather than entering into that not entering into that next bear market yet?

Yeah, I I mean, if you I tend to look at weeklies and monthlies and not dailies that much, but if you look at even the dailies, but the weeklies and monthlies, the the stock market looks great. I

mean, I you're in a full bull mode and yes, you get these consolidations. You

know, some are bigger than others. We

had one obviously in response to the Iran war back in, you know, February, March, and into April, I guess, but but it's you know, had a big run, and then you've

spent a you know, a few weeks kind of consolidating that. That just refreshes

consolidating that. That just refreshes things for the next leg up or the next move up. If you look at it on a monthly,

move up. If you look at it on a monthly, I think we've started we started the bull the parabolic uh couple months ago.

You know, it's If you look at it on a daily, yes, it looks like, hey, it's kind of, you know, um gone sideways to down, um but on a

monthly, it's, you know, up up and away.

So, so I and either way, when I look at it, it really does look like everything's intact here for a very strong next several weeks and probably next couple months.

Yeah. So, a lot of this market leadership that continues to extend the the bull market is coming from seems like a smaller and smaller number of mega mega cap technology companies

here, David. And

here, David. And um we're not necessarily talking about the Mag 7 in the same sort of frame that we used to talk about the Mag 7 a year ago, but we're, you know, it's kind of there's this rotation

happening within the technology and uh markets. Uh it's just going from

markets. Uh it's just going from different names to others, right?

But still narrow.

But how's that lead I would push back on that. It's It's

It's a broadening market. I have been saying this for quite a while.

Um if you look, financials look great and are starting to come out of a a very um you know, consolidation day, a nice move in the last month. Um and look like

they've got a lot higher still to go.

Um industrials have been great all along. Uh I think basic materials look

along. Uh I think basic materials look good here. They've consolidated and look

good here. They've consolidated and look like they're going to move higher.

Um you know, the the areas that are weak are energies. Yeah, I mean, the stocks I

are energies. Yeah, I mean, the stocks I would not touch those right now, but but um I think you're seeing a much broader market than people realize. And again,

it's it's if you look at it from a cap standpoint, you know, small caps outperformed the Nasdaq and the S&P and the Dow in the first half of this year.

You know, I think the um Russell 2000 was up 21 % plus and the Nasdaq was up 19 and the S&P less than that. So, so you have had

going on for several months um a broadening in the market, and yet there's this perception by so many people that it's all been tech and it's

all been AI, and it's all been semis.

And and what I would say is, and I have said, is that it's not that we're going to rotate out of the tech area and have these other things take over, it's that they're both going to work

here as we move to the top. And that's

unusual. Tops usually are a narrowing process.

And I think that kind of got everybody off, you know, off track for the last couple years. You know, you could when

couple years. You know, you could when when mag seven was truly every part of the market, you know, all the entire upside, you know, I don't know, it was 18 months ago or whenever that was,

um that's all you heard was, you know, this is a very poor quality rally and this thing's bearish and we're going down and instead it went up. Um but it did broaden along the way, particularly

this year.

And I And yet the perception is, yeah, this is all AI.

Yeah. I mean, I think that is the perception. Obviously, dy- dy- the

perception. Obviously, dy- dy- the dynamics of sentiment and the because the narrative is always AI. I

mean, I haven't turned on, you know, any sort of financial media this morning, but I bet if I did, David, I'd all I'd be hearing is about this news out of Meta today, right? Nothing

out of General Electric, nothing out of industrials, nothing out of staples or anything like that. The AI narrative has been the dominant dominant talking factor for I mean

almost years now, right? But do you think that's starting to run its course when people are now starting to question the profitability of all this?

Well, just to step back. I mean that's what that's in response to your comment.

That's the beauty of this is that things like industrials are going unnoticed and not noticed by those that own them. But

if you look at the XLI, it's a wonderful chart. It's and it's been you know,

chart. It's and it's been you know, years of upside.

Um and it's part of that is driven by reshoring and you know, the build out of the um grid you know, build out of the grid and and the data centers, etc. So

it is partly AI, but you know, it's Cummins engine. It's you know, it's a

Cummins engine. It's you know, it's a lot of things that you um unless you're paying attention, you'd think oh no, it's just you know, it's just the data centers. It's just mag mag seven or it's

centers. It's just mag mag seven or it's just semis.

Um so so there is you know, I like it when they aren't getting all that attention and yet they're moving up and that's what we've seen. Now

financials have lagged for you know, quite a while and now are are in gear and it's again, it's a beautiful picture.

But it's just beginning. So you're not going to hear a lot of you beginning to hear you know, when they come on CNBC and stuff, people talking about you know, financials have a place that's

starting to get attention. But it's

early. You'll you'll hear the you'll you'll be it will dominate the conversation at the top.

You know, so you know, move out three months from now if if financials do what I think, you know, I have a target of 90 on the XLA. So if you know, if they outperform

XLA. So if you know, if they outperform there you know, it's probably 50% from here. I don't know, but if they

here. I don't know, but if they outperform the indexes, all of a sudden momentum drives people's attention.

Right.

And so, that's that. Now, from from the standpoint of the media and all the conversation, yeah, AI is still kind of dominant.

Uh and certainly semiconductors have gotten a lot of attention. Well, you

know, why would they not if you look at what Micron's done? And I hadn't looked at Applied Materials for a while. I

looked at it today. I Oh my god.

Right.

These things are up manyfold in in a matter of months, you know, like I think I did a number um a week ago and I think Micron

is up like 3.6 or 3.8 times in, you know, in 4 months or whatever.

Mhm.

So, you know, you're not It's It's not normal movement. That if

anybody wants to know what a parabolic looks like, that's a parabolic.

Right.

I don't mean to say that's what the market will uh do, but but it's, you know, it's when it goes vertical, it just keeps going.

And of course, the the beauty of AI and the beauty Well, actually, the beauty of semiconductors anyway is that it's fundamentally driven. It's

all being driven by earnings.

You're not getting there just because there's froth or because, you know, people are chasing the tape, which they are.

You're getting there because the earnings keep outpacing the price move.

And that's what happens when you get into a situation where demand for a product far, far outstrips the supply. Price goes through the roof.

the supply. Price goes through the roof.

And in a commodity, which chips are, memory chips certainly are, um you coin money. And that's what, you know, that's what Micron's doing right now. Now, that comes to an end, though.

now. Now, that comes to an end, though.

I guarantee you cuz I've been through these cycles before. This one's unusual.

It's far beyond any other one.

But I've been through Micron and semiconductor memory chip cycle before.

I guarantee you there is double ordering and triple ordering going on as people try to get, you know, find chips wherever they can get them.

And so this thing can unwind pretty quickly once it reaches that that momentum peak or that peak. And so

that's coming. I just don't think we're there yet.

Do you think that the mechanics of this current market is playing dynamics on top of the momentum of the price movement and the financials? I mean, we have more

the financials? I mean, we have more people invested in this market in any other time in history. We have multiple levered passive funds that are really

driving a lot of buying as well because of the mechanics of how those are set up plus the exorbitant number of those uh ETFs that are actually been built over the last 10 years. I mean, do the

mechanics play a part in pulling this thing up as well?

Ab- absolutely. I mean, it's really been, as I say, it's a, you know, four-decade long secular bull market and it really the

the big takeoff point was the mid-80s when, you know, the financial industry recognized that, hey, the rat going through the snake, meaning the baby

boomers that set the trends of the mid-70s when we had chaos, you know, the Vietnam War, etc. Uh and then they set the trends when we had the home buying

in the late 70s and the 80s um that they recognized in the mid-80s that they're done buying, you know, you know, they're they're beginning to focus on their retirement savings and that you

know, that rat going through the snake, they're going to be the dominant force in the next, you know, 20, 30, 40 years.

So, they they really the financial industry started creating product and started pushing the the mantra of it's time in the market, not timing the

market. And and they became a more

market. And and they became a more professional industry, not just a broker calling you up with a hot tip or an idea.

Um it was now, you know, money in the market, um passive funds, just keep allocating to it with your cash flow and and

markets will move ever higher over, you know, many years. And that's been what's happened in spades. You know, we've had a I go back and talk about cuz I started in '73

and and the real you know, I talk about the the bull market in in starting in August of '82. In August

of '82, um the Dow, I believe, was 780.

So, 100 800.

You know, we're now talking about a Dow at 52,000.

That's what that, you know, from the '80s on, what we've had. And yes, it's been partially uh driven by all the product that's been

created to to meet that insatiable demand. So, you know, a lot of it is

demand. So, you know, a lot of it is passive money.

And then and then we had the, you know, the advent of ETFs.

And so, it's become um and and obviously online brokers and etc. It's been a lot easier for in that retail investors

to uh it's been democratized. So, they

can basically and of course, not to mention the zillions of services out there, whether technical services or, you know, the ability to get charts that are as good as

you know, Bloomberg or whatever. You

know, you've got you've got the ability for retail investors to take an interest in this. And then you take the next

in this. And then you take the next step, which is really since the pandemic, you know, when when we when we through the pandemic, we shut down sports,

right? We stopped, you know, a lot of

right? We stopped, you know, a lot of the sports were shut down.

Right.

A lot of those that got involved in sports gambling or just following sports got pulled over to start following stocks. And you know, Robinhood has been

stocks. And you know, Robinhood has been a big beneficiary of that. Um you know, meme stocks, all of that. So, you've got that and now we're taking it another

step, which I don't uh necessarily endorse, but the you know, the the gambling websites, you know, the betting on Kelce and you know, Right.

I'm it's uh turning that into some kind of an investment. I don't believe it is, but um So, so yes, for sure. And you

know, when I do talk about options and derivatives, etc., but I it's all kind of you know, been one feeds the other.

Right. I know. The the the options play was it was so 2021, David.

[laughter] Like that was the big conversation we were having 5 years ago and we totally moved on for that. That's like that's a household name anymore.

But you I so you've really laid out, you know the the fundamentals of this move higher and and into your forecast, but I guess the

other side of the sword here is the warning signs, you know, despite a move higher that you see kind of in place for the next number of months, this final melt up,

what are the warning signs you're seeing, David, to really think, okay, this will eventually come to an end?

Yeah, I'm you know, people complain cuz I've been talking about a global bust coming after after the bull market ends and I've never called an of a bull market, but I've I started recognizing

that this will come to an end at some point, and it won't end in a good way.

And I say that because of the leverage in the system. So, I define leverage as you know, debt is the leverage on the economy and the financial system.

Derivatives is are the leverage on the markets.

And we've seen a you know, we just talked about we've seen this huge explosion in both. So, the the debt leverage

um is far, far higher than the 2008-2009 downturn. And that's what got us in

downturn. And that's what got us in trouble there was massive leverage, and we're way beyond that now. Well, I'm

talking about worldwide. Um and

derivatives obviously been driven with the and you can include ETFs in that because they're um you know, there are leverage ETFs, etc., but um

derivatives are way beyond what they were, you know, 15 years ago. So, we're

we're looking at massive, massive leverage on the entire system, markets, and the economy, and financial system.

And so, my my simple thesis is that the next downturn that leverage works great and enhances on the upside, and that's part of what

this bull market's been is leverage uh has helped enhance it, but leverage decimates on the way down. You know, it works great on the way up and

not so great on the way down. And so, I think, you know, timing is a tough part.

Does it come as soon as I think? Maybe

or maybe not, but I I think we're approaching because I think we're approaching a top in the market. I think

we're approaching the end of this cycle, so that next year could be the bust.

Now, I say it could start by the end of this year, could happen that fast, or it might be pushed out and not start until sometime next year, but but I think we're that close to um the top of the

mountain and the market and a rollover in the economy and the and ultimately a what I call global bust. Um so and it's not just US, it's global. Uh in fact, they're

you know, Asia's in more trouble than we are. Japan's in big trouble, we know um

are. Japan's in big trouble, we know um because of all the all that they did for the last two decades.

Um you know, in terms of zero interest rate policy on steroids um and now interest rates and inflation breaking out there. They're going to have have a

out there. They're going to have have a very hard time holding together that that game they've played for so long. Uh

and and as that starts to come apart, that could be part of the problem in the bust, but but you know, China's got its issues. Europe's not in great shape. Um

issues. Europe's not in great shape. Um

Canada, as I say, Canada uh from a real estate perspective was in great shape in 2008-9 when we had the you know, subprime loan problem that and

their banks were not leveraged in any big way. We were very leveraged here.

big way. We were very leveraged here.

They're now looking like we were in 2008-9. They didn't They didn't learn

2008-9. They didn't They didn't learn our lesson. They They ate They copied

our lesson. They They ate They copied our lesson and and Australia obviously has always had a big real estate uh leverage game there that if that ever rolls over, it can work the other way.

So So there are plenty of issues out there.

The timing is a tough one.

Um but I I'm still saying I think it's nearer at hand than it is far away.

Yeah.

And we've gone so long where the use of leverage and the use of debt to um exacerbate liquidity

value, you know, price action.

It It's It's been a feature, not a bug of of this system for so long. But it

sounds like what's about to run its course as you think will kind of reverse course and all of a sudden we're going to start seeing the implications of that. And I

keep on going back to the headline from PIMCO a couple weeks ago. They were out saying they are starting to see potential cracks in the credit system alone. Uh

and you know, that's a not too many big institutions will go out there and say such a thing. But for PIMCO to do that that?

PIMCO.

PIMCO was saying Yeah. Yeah. Uh that really caught my

Yeah. Yeah. Uh that really caught my attention because you know, maybe you'll all look back and say you know, that they were the first or the first ones in my mind from what I

was saying to kind of be out there.

But to say to for an institution like PIMCO and I think they're you know, very well trusted and and and and respected um to go out there and say they are

concerned about uh credit really kind of coming to an end here, the cycle coming to an end. I

I that just that headline stood out to me.

They're They're probably I mean, certainly we we had um earlier in the spring a lot of talk about private credit.

Yeah.

And you know, some of the problems that and that showed up there. And it got kind of brushed off, you know, it created a little bit of concern for a couple weeks and then it got brushed off

as um yeah, there's you know, there's some issues there, but it's it's pretty contained and and now I saw something recently where somebody was saying yeah, actually we

haven't seen it improve at all, you know, it's getting worse. And that I think private credit is maybe the subprime of this. It's not as big, but subprime of this cycle might be or the

canary in the coal mine in the beginning of the beginnings of problems because uh you know, those credits are um a lot of times they're they're there because they can't can't do the public

markets. Um

markets. Um I also think private equity which has been adopted by an an institutional business.

Um you know, the pension funds said, "Oh, this is a uh great thing we need in our portfolios cuz it's alternative to public markets.

It can help diversify." The problem, you know, private equity uh in my day back in the mid '80s or back in the '80s when Mike Milken was around and really

spirited that, it was called leveraged buyouts, right? And we we prettied up

buyouts, right? And we we prettied up the name and called it private equity.

Now it sounds better, but it's still massive leverage. And so I think, you

massive leverage. And so I think, you know, endowments are loaded up with that. A lot of public pension funds are

that. A lot of public pension funds are and some private pension funds. So I

think that will be one of the candidates when we roll over in terms of, you know, it it exacerbating the problem. Um and

and I just when you have a market that runs as long as this one has, obviously margins and debts are but, you know, all time highs.

And when you have a market that's going this long, um there's plenty of people in there that are in there with both feet because all they've saw and they've seen is up

up and away.

Right.

I will counter that to some extent in terms of why I have remained bullish is that going back, let's say to October 2022 when we came out of the bear market

in '22, from that point forward, institutions generally, and obviously there are exceptions, but generally institutions

have fought this market all the way up.

They It was always when we came out of October 2022, they said, "Yeah, it can bounce, but, you know, up around 4,000 or 4,100 on the S&P because we came out

of it at 3,500, you know, it's going to it's just a bear market rally, it's going to roll back over." Then when it exceeded that, then it was 4,400. Then

it was uh back at the highs at 4,800.

And then when we pushed through 5,000, they got a little more bullish, but they still had one foot out the door and you know, not so sure how far can this go?

It's just up on still. So, they have fought this thing all along what I call a wall of worry has helped fuel the advance and kept it it you know, I cuz I thought tops could have happened a

couple of years ago. It's kept me bullish because I always saw that wall of worry, that skepticism in the institutional side. Retail's been

institutional side. Retail's been actually the far more prescient investor, ironically, all the way through this, even you know,

April of 2025 when we had the the tariff sell-off.

All right.

Retail bought at the bottom.

Institutions were starting to panic and sell.

So, um you know, you've seen all the way through this the skepticism on the institutional side. And that's still

institutional side. And that's still there today. Um I think stuff's been

there today. Um I think stuff's been going around recently.

You know, hedge funds have I think record shorts of the market right now. They're very bearish.

right now. They're very bearish.

Okay.

And so, that's the fuel for the next advance. That's again, that's the

advance. That's again, that's the contrary uh contrarian in me or the contrary approach is that when everybody's bearish, that's fuel for the next advance cuz they they've

already acted on their bearishness. It's

time for them, you know, when the next move out of that the next change will be having to reverse course and be buyers.

So, I I think we're going to see that and as I said, I I think July looks pretty good for that.

Okay.

Uh you mentioned that your thoughts on this bull market's more than 40 years long since 1982, which made me

think, well, David, I was born in 1982.

So, my generation I've never known a bear market, you know, Yep, we've had we've had plenty of cyclical bear markets, as you know, you know 2008-9

being a big one, but even 2000, obviously, in the in the uh Nasdaq was a a big bear market.

Um so, we've had some cyclical ones, but in terms of secular, and I and there are people who take issue with my call on that cuz some people will say, "Oh, the secular

um bull market ended in 2008-9, and we started new secular bull market then cuz we had lower lows." And I said, "Yeah, but if you really look back, this

thing's been driven from 1982 on with the peak of the uh the bottoming in the bond market peak in interest rates when interest rates were, you know, 15% 20% 20% on on T-bills and

15% on the long bond uh back in '81, that was the beginning of disinflation uh was basically why I timed it to back to August 2020 August 1982.

And this whole thing, even though we've had some rise in inflation, uh the trend has been in to disinflation through this whole cycle, and that drove PE multiples

um from mid-single digits, you know, six seven times earnings for the market multiple back in 1982 to um

you know, mid-20s now, and cuz interest rates and PE multiples work in inverse uh inversely. So,

uh inversely. So, um so, that's a lot of it, um but you know, we're coming I think coming to kind of the end of that.

So, how do you describe, if we are coming to the end, the next chapter? Is it

a bear market? Is it an economic slowdown? A re-

slowdown? A re- deep recession, depression, you know, how do you how do you kind of frame the expectations of what that next chapter

I I believe since this is if if I'm right, this is the end of that long cycle.

I believe we're going to see a very big historic bear market follow.

Uh what I call a a bear and global bust.

So, bear and bust bust refers to the economy and the financial system. Um

which means something bigger than a normal recession, uh much bigger than normal recession. Um and and bear refers

normal recession. Um and and bear refers to the market. So, I am I am saying we could see peak to trough an 80% bear market. Now, that's bigger than any bear

market. Now, that's bigger than any bear market we've had since the 29 crash, the 1929 crash, which was 90%. You know, from a broad

standpoint, the Nasdaq I think was down close to 80% maybe um in 2000, but the S&P didn't have anything like that. So,

so this will be the biggest bear market we've seen in the post um depression era. Um and you know, and that's another

era. Um and you know, and that's another long cycle. I believe we're at the end

long cycle. I believe we're at the end of um a you know, we're in the last decade of a super cycle, which I define as a period between two two depressions, the

Great Depression of the 1930s and what I think will be the next depression in the mid 2030s. So, next

year, even though I call it a global bust, is not a depression. I think

the what keeps it from being depression is the printing press.

If Right.

If um inflation trends lower again because of oil, etc. If we if we I actually think the bust will bring on um deflation.

You know, for a period of time we'll have deflation because we'll be entering a we'll be entering the biggest downturn in in this country since the Great Depression.

Uh Uh, know, we'll be entering it with inflation near 2% you know, 2 or 3%. So,

if you get that worst situation in in you know, 80 or 90 years, that will take you uh quickly into negative inflation.

So, it might only last a year, but I think we'll have a deflationary bust.

Um, and and if you have deflation or you have very low inflation, you can print money cuz you're not worried about the inflation. You know,

and particularly you're not you inflation's not your big worry if the economy is crashing and if the financial system is unwinding.

You know, at that point you put aside your worries about inflation and say, "We'll worry about that later. We got to print money to pull us out of this." And

I believe that's that's why I call it a bust. I believe we will have a period of

bust. I believe we will have a period of time, I think next year if it doesn't get stretched out, um, uh, we will have

during the bust a free-falling world financial system. So, similar to 2008-9

financial system. So, similar to 2008-9 except maybe going farther.

And it is in that period that they'll they'll be reluctant to go back to the what they did in 2008-9 and what they did in 2020. You know, we you hear from you heard from Powell

throughout his term, you know, "We're not repeating that mistake again. We will not do in you

mistake again. We will not do in you know, QE infinity again."

And you're hearing certainly from Warsh the same thing. We want to shrink the balance sheet. We don't want to expand

balance sheet. We don't want to expand it. You know, we want to fight inflation

it. You know, we want to fight inflation and monetary expansion creates inflation. So,

inflation. So, so there's going to be reluctance to go to the policy tool that they're going to need to pull us out of a free-falling system.

And they will do it cuz they're the the only tool they have to do it, but it means they're going to be slow to do it and reluctant to do it and that only means it's going to get exacerbated until they finally realize

we don't have a choice.

Right. Well, even using the same tools, even if they are reluctant and maybe late late to the response, those tools, at least from what I understand what

you're laying out, will have diminishing returns uh because they've already been they've already been used over and over and over again.

No, actually no. That's not my view. My

view is they will you know money works if you create enough of it. You know,

it's like it's like a pie. If you if you pour more um filling into that pie, it's going to expand, you know, it has to. Um

so if you pump enough money, and I'm talking again, this is totally seat of the pants guesswork, but I'm I'm saying if this is as bad as I expect, meaning worse than 2008 and 9

globally, you could see from the Fed an expansion in the balance sheet to something close to $30 trillion. So

from, you know, got up to 9 trillion in the pandemic and now it's 6.7 trillion.

From here, you could go to 30 trillion. Now, if you asked

30 trillion. Now, if you asked if you asked Kevin Warsh today, he'd laugh at you and say, "We're I guarantee you we're not doing that.

We'll never do that."

That's easy to say until you're faced with what I think we're going to see.

And and worldwide, every central bank will be doing the same thing. So

worldwide, you could see 50 trillion in new money. And if you if you do that, I

new money. And if you if you do that, I mean, you can't help but see a response from that. That's why, you know, because

from that. That's why, you know, because there are lagged effects, obviously, when you print money, initially it doesn't do much. Might

provide liquidity for the system, but it doesn't expand the economy for another year or for 9 months. So they're going to be they're going to be faced with, you know, we printed we printed a couple few trillion.

This thing's still falling. We print a few more trillion. This thing's still collapsing.

And so they'll all throw another 8 trillion in. You know, it's going to

trillion in. You know, it's going to take time for them to get to a right-sized place where finally stabilizes the system.

Um but they will do it because the choice is either allow the entire globe to collapse or save the system. And that

you know, you could talk about fiscal policy. There will be an accompanying

policy. There will be an accompanying fiscal response. But fiscal is much

fiscal response. But fiscal is much slower and has to get Congress to agree on things.

Uh good luck with that. You know, so it's it's going to be money that can respond quickly. And again, even money

respond quickly. And again, even money because of the mindset of the Fed um and the mindset of central banks around the world um because of that mindset, it's

it's going to be a grudging process.

So when I went back and I had used the phrase diminishing returns with those with expanding [clears throat] the Fed balance sheet, excuse me.

I think what my underlying question was, I mean, not only does it save the system but does it put the financialization

of our society back into favorable conditions where everybody's plowing money back into their Robinhood accounts, buying

derivatives and seeing tech stocks continue to move all-time highs. Is Is

that what it does or does it just basically save the system and people remove themselves from financial markets?

Yeah, as as I say, this is my thesis of what I think will be, you know, I think is inevitable if we get the bus.

I am by no means endorsing it because you're right. The returns on the other

you're right. The returns on the other side of this are not only didn't diminishing, but will destroy us. I

mean ultimately all that money with a lag will begin an inflation cycle the likes of which we have never seen in this country certainly. You know, I

saw it in the Weimar Republic, but um I I believe, you know, in in cuz I was there in in the early '80s, inflation got up to, you know, textbooks. And when

I see people uh looking at history and recounting inflation, those that weren't there typically giving you numbers that aren't accurate cuz we we saw I can distinctly

remember I was running money then. Um

we had 21% T-bills, we had 20% plus inflation. You

know, may not have been year over year, but we had it. Um and we had generally we had high double-digit inflation. I

believe the next cycle following the bust, uh it'll take several years to get there, but we'll see 25% inflation.

We'll see uh interest rates exceed the early '80s, so 15% long bond was a peak back then, you know, could be 18 or 20%. I don't

know. Uh T-bills will certainly go up well over 20%. Um so you're going to have that coupled with and and you know, I talk about 20 trillion in new money coming,

new QE money coming out of the Fed, that'll be matched similarly matched by fiscal response. So you're going to have

fiscal response. So you're going to have not only 40 trillion in in def- in debt, government debt here, you know, you're going to add another 20, 15 or 20

trillion to that. We can't service our debt at 5%.

How do we service it at 15 or 20%? Or

you know, even 10%. So

Yeah.

So at some point it's going to be a bigger problem than even what we will face next year.

But for a period of time that money will grease the skids, you will have a cyclical bull market. I am saying that the the top this year, if it's this year,

that's the top of this will be uh highs for decades to come, I believe.

The next cycle will be a cyclical bull market, but not a secular bull market.

It will be the beginning of a secular bear market, which means lower highs and lower lows as you go through the next couple decades. Um so, we could we could

couple decades. Um so, we could we could come out of an 80% decline. Let's use

10,000 the S&P 10,000 for simple math.

If you go down 80%, you go to 2,000, right?

All right.

So, from 2,000, you could you could triple or quadruple the market because of all that money printing and go back to 6 or 8,000, but not get back to 10,000.

So, you can have a super cyclical bull market and it might happen over 2 years' time.

You know, a tripling or quadrupling in 2 years' time will be unbelievable, but you could have that.

But, it's not you know, at some point within the next within a few years of that printing, probably two two years and and beyond, you're going to start seeing inflation

move towards high single digit, then double digit, and then by you know, probably by late this decade, early next, you might be in double digits on your way to that 25% within a

year or two. So,

so, what that does is it causes you know, a tremendous headwind.

P/E multiples move inverse to interest rate, so P/E multiples are going to get shrunk back down to single digits.

Um the only things that are going to be able to produce earnings that can outpace inflation will be commodities, and I think the next cycle will be a commodity-driven

cycle. You know, they're still going to

cycle. You know, they're still going to be reshoring, they're still going to be building out the grid, they're still going to be data center and AI spending.

Uh and so, you're going to have demand for a lot of industrial and a lot of um commodity and and as I say you if you print 20 and I'm just using this

country's 20 that really worldwide much more but if you print that much money um and you and you goose the economy

um and the the economy is goose mostly in the on the industrial side with the buildout um you're you're goosing demand for you know you're expanding demand for

commodities at at rates that quickly eat up the capacity that you have and to get new capacity might take

you another decade or two so you're going to quickly be at a situation where demand far far outstrips supply and I

only need to point to memory chips today to make the point that when that happens prices of those commodities go through the roof.

Right.

And and and it hurts everybody in the economy but those commodity producers, right?

Well, especially for commodities that are denominated in US dollars and the thesis you've laid out here absolutely crushes the dollar, right? And so it's you know it's it's

it it It's not a it's not a pleasant scenario.

It's not an equation you can solve. I

mean I look at it more from the you know the government side and again this is repeated around the world it's not just US but just looking at the US there's no way

you're you're going to quickly and I think by the end of this decade or certainly by say 2030 you're going to quickly be at a situation where just the

servicing of the debt far outstrips our budget. You know we we can't and and

our budget. You know we we can't and and so people go well don't don't they then just keep printing money to do I said no because as inflation moves up

the you take the printing press out of the picture because just like a forest fire, you know, you can't pump more gasoline on a on a raging fire. The raging inflation fire,

raging fire. The raging inflation fire, if you print what's going to happen is as you you're going to reach point where the Fed official will recognize this at some point that we're printing more money to cover

our needs and inflation is eating that up before we can get more money in. You know, it's it's moving inflation moving faster than our increase in money. So, we're falling

be farther behind not ahead. At that

point, the printing press gets shut down.

We then have to live within our means and demands for just servicing the debt are beyond anything else. That means

there's no money for welfare, no money for unemployment, no money for um you know, you're going to have the way social security is run, you may have some there, but

it's not going to be able to keep up. Um

you know, the you're basically going to have the end of the you know, the welfare system as we know it and and and if you take this out to say, I think it's the

mid-30s you have a collapse of the system.

You know, because basically it's it's been a Ponzi scheme that's been building since the last depression.

You know, started gradually throughout of World War II, but it's accelerated and that's what happens is as you move cycle to cycle to cycle the excesses get bigger

the central banks have to be more dramatic in cranking it down. They go

too far, then it then they print they blow it up again bigger and and what you've got is this um buggy whip phenomena where you know, the

the cycles get more volatile and you reach the end of it and then you get the collapse.

So, we all know that every economic regime comes to an end. It happens. Every

monetary system has come to an end. Some

have just ran a lot further in its path than than others, right? But in this framework David I mean, I I think the answer is pretty

obvious, but I'd love for you to tell me that maybe it's not so obvious. Which

asset class surprises investors the most through this? Is it precious metals? Is it the

this? Is it precious metals? Is it the commodity sector?

Yeah, I have um and again, I'm I'm talking about post bust. So, my you know, we'll talk about precious metals a little bit here because I have a target

for this year for silver of $200 and that's still my target. Um I just raised it in June, in fact. So, at the beginning of June. Um I have a target of 7,000 for gold. So, that's what I think

we get pre-bust this year.

Um then in the bust, you could take silver down 70 or 80% because it's very cyclical. You could take gold down 50%.

cyclical. You could take gold down 50%.

Um actually, ironically, if you look at it, um you know, if if I'm anywhere right on my numbers, gold at 7,000, if you go down 50%, that

takes you down to 3,500. That's kind of a very nice place on the charts. In

fact, that's where a lot of the bears today think we're going now. I don't

think so.

Um uh if you take silver down from 200, um you can get back to um basically that 50 level, which it

marks the breakout from the 2000 top, you know, uh 48 or 50. So, you know, you can you

can fall 75% and get down to 50.

And I think those those make sense to me is that that's what you might see in the bust. From there,

bust. From there, and again, those are just guesses. I I

don't know that for sure, but if that happens from there, um the next cycle, because of all the money printed, your your your leaders in the next market, leading assets and

leading stocks, are going to be in the commodity area and the precious metal area. So, my target for gold

area. So, my target for gold out in the 2030s, you know, probably by 2032 or 3, is 20,000.

Um my target for silver is 1,000.

So, you know, if you're at 50 at the bottom of the bust and you go to 1,000, that's a pretty nice return.

Right.

If you and that's silver, the miners obviously you have leverage to that, so they can even outdo that. Um and same thing with copper. I mean, every commodity most

copper. I mean, every commodity most most commodities, including ag commodities, I think are going to go through the roof, so I don't know where copper goes. It might be 20 you know, I

copper goes. It might be 20 you know, I I look at the futures the eight My target on copper for this cycle is $8. I

may raise that. My you know, next cycle, who knows? Is it 20? Is it 30? I don't

who knows? Is it 20? Is it 30? I don't

know. Natural gas, which is down in the threes, it could go to 50. I mean, oil, I I have a target for oil next cycle, uh post bust, you know, probably out in

the 2030s of um 500.

Wow.

So, oil oil in the bust can go down to 30 and go from 30 to 500. So, the the commodities are going to be the area of leadership next cycle, com- commodities

and commodity stocks.

Um and and that's what we have. Every

cycle is new leadership. This This cycle obviously has been tech, AI, semis, etc. The next cycle, I believe it's going to

be led by commodities and industrial because of the build-out. Um and and consumer, if you if you think through the whole scenario,

the going to get hit hard because the market tanks, right? In the bust.

The consumer's going to be be hit hard because of unemployment if the economy tanks.

Coming out of the bust, and I think you can come out of it sometime in '28, coming out of the bust, consumer's not going to be shop till you drop or, you

know, the the main driver in any way. I

think we are coming to the end of what has been in your lifetime a consumer-driven economy.

Yeah.

I think the next cycle, and it's really the last cycle before a huge game-changing depression, the next cycle is going to be that reshoring,

uh, grid build out industrial cycle. So,

that's what's going to drive the next cycle, not consumer. That doesn't mean you know, consumer's totally dead, but they are not going to be driving the next cycle.

Yeah.

Um, obviously making the case for accumulation uh with natural resources, commodities, and those associated equities here, David.

But, maybe before I let you go, I I would love it if you could maybe leave our listeners and viewers with maybe some actionable

items of like what to watch.

You know, what to watch over the next 6 months 6 months. Data points, market signals. What do you you know, what

signals. What do you you know, what should we be really keeping tabs on?

most the the key thing to watch more than anything else is going to be sentiment. And you don't have to you

sentiment. And you don't have to you know, you can look at sentiment indicators, um, you know, and I would say probably you want to see like the Bank of America uh, portfolio

manager survey. I don't know what they

manager survey. I don't know what they call precisely, but um, you know, it's a survey of portfolio managers and they track it uh, month to month I think or quarter to

quarter, but it's um, because institutions have been kind of behind the eight here and been so skeptical. When you see them all in,

so skeptical. When you see them all in, that will be the signal we finally got everybody in.

But, I think you can also track it just on, you know, on X and everyone and on CNBC, etc. is that when you see everybody all in and when you hear the,

you know, people like me, not me cuz I'll be the other side, but when you hear strategists and market analysts and portfolio managers saying, "Oh, this thing has several years to run because

of X Y Z, you know, because of AI, because of the Fed's now when that are back, they're easing now, whatever, whatever the scenario is." If you hear a

rationale that says "Yeah, this market's at 10,000, but there's still years to run."

That's when I want to run the other way.

So, it's Yeah, it's sentiment more than anything else and it's It's hard to gauge sentiment. Don't get caught in

gauge sentiment. Don't get caught in the, you know, um you know, like the CN- CN and has a greed fear index. Our fear greed index.

It's more of a trading index cuz it flips around pretty quick. So, you have to be careful. What I'm talking about is a real, you know, big cycle sentiment where everybody's all in and that you

more or less judge that kind of just listening, watching what everybody says. When you hear a lot of

everybody says. When you hear a lot of the pundits saying, you know, "We have years to run or this can go another couple years."

That's when I start getting nervous and and I will say um nobody's going to ring the bell at the top.

The odds are for most people they're not going to get out at the top.

So, it does pay to be on this side of the mountain and on the other side and be chasing the mountain, you know, chasing the trip down.

However, it also is a funny period because of how much territory we we could cover in the next few months.

If if people say, "Yeah, what he's talking about on the other side is so scary, I'm getting out right now."

I'm not smart enough to pick the top, and maybe the top's Some people are saying the top's near. I'm going to get out now. You run the risk because what

out now. You run the risk because what I'm talking about from here to the top is potentially, you know, 30 to 40% upside.

Mhm.

Um cuz I'm not even sure my numbers are high enough.

[laughter] Um but you run the risk that you get out now, and then 2 months or 3 months from now

we're at 10,000 or 9,800, uh and you hear all these people saying this thing has years to run, and you say, "I got out way too soon. I got to get back in."

And you you defeat your purpose. You got

it out early, missed it, and then got back in and caught the top. Um so so it is, you know, I can't give advice, and I'm not I'm not even pretending I can

know what the exact top is or exactly when to get out.

So you just have to know yourself.

Kind of know your own personality.

Um Don't be greedy.

And and kind of let sentiment be a bit of your guide, you know, the kind of sentiment I just discussed.

Yeah. All right. David, thanks so much uh for the thorough conversation. Every

time you and I chat, and even when I listen to, you know, other recordings and interviews you've done with other people, I it just kind of puts me back in my seat and gives me a lot

of food for thought here. But I'm glad you could share it with our listeners here on Mining Stock Daily. Uh

you can be found on uh X at uh always @DaveHcontrarian.

Uh outspoken, as always, very active there on the platform. Uh keep that up cuz the world needs people like you. But

I appreciate your time. Any uh anything else coming down the pipeline? I would

are you enjoying yourself this summer other than [laughter] being on financial media all the time?

started. I look forward to the July 4th.

I will say that. I think this is a big big time to party, you know, 250. We

don't see those very often. So

We do not.

Um yeah, I I just encourage everybody to kind of enjoy enjoy this coming weekend and and remember what you know, how great how lucky we are to be in this country. There's a lot of a lot of

country. There's a lot of a lot of problems, but there are also a lot of good things about what we what we have here.

Absolutely.

Uh happy 4th of July, David. Thanks so

much.

Okay, thanks, Trevor.