Markets Crash, Debt Explodes (Uncut) 04-08-2025
Markets Crash, Debt Explodes: Why 2008 Was a Warm-Up for 2025
If we’re at the top of the volcano, Tim, how close are we to collapse? It’s the entire global debt-based system that’s at risk. You’re basing this on cycles. It’s like reading through tea leaves.
Yes, these cycles have been distorted, but they haven’t been invalidated. This is a debt-based system that requires an ever-increasing amount of debt, debt creation, and inflation to survive. Are you saying then we see a reset? The current administration may have been put there to be the facilitator of that exit.
I usually don’t do this, but I feel I should share this info of how this interview even came to be. The entire debt-based global financial system is at major risk, and it is taking more debt to keep this monster alive. In turn, it’s becoming increasingly harder to keep the overall financial system going.
The question is, can the central banker step in and save it again? These are the warnings and thoughts of my guest today, Tim Wood. He’s the author of Cycles, News, and Views, and his site, Cyclesman.com, which provides investors with what he says is truthful, unbiased info. Tim is a certified public accountant.
He began publishing his market letter after writing a cover article in Technical Analysis of Stocks and Commodities magazine. In that article, he identified the 2000 market top, as well as a subsequent decline that produced the 02 bottom. He joins us today, Tim.
Daniela, thank you for having me as well. It’s an honor to be here. I usually don’t do this, but I feel I should share this info of how this interview even came to be, because I really do feel it’s meant to be.
I’m saying this even before I know how this interview will go, but I was working from home editing, I believe it was Ed Griffin’s video. It was. And for some reason, in my mind, a past Ed Dowd video popped up and I said, oh, I should circle back and look at that.
I pull up my old Ed Dowd interview from six months ago, and it opens up to the part where he is referencing a Tim Wood who has greatly impacted his research, which reminds me, oh, I should get this Tim Wood fellow on the program. So I go back to editing. All of a sudden, my phone rings, a number I don’t recognize, and I would probably never answer, but a voice in my head tells me I should probably pick up this call, this phone call.
I answer, hello. I hear, is this Daniela Cambone? To which I say, who’s asking? And you say, it’s Tim Wood. Now, this story may sound crazier because I lived it, but I am telling you that is absolutely absurd.
And I truly feel, for whatever reason, we’re meant to connect and inform the folks out there of your work. So that said, welcome to the show. Thank you for having me.
It is an honor to be here. Well, I’ve heard so much about you and how you’ve been covering cycles, how you correctly identified the 2000 market top, as well as the subsequent decline in 2022. And today, I guess my first question to you, because I know we’re going to get into some nitty gritty stuff about how you’re very concerned about the state of the global financial system and how fragile it is.
But first, let’s just start with folks new to you. If you could tell us a little bit about your long-term cycles and how they provide insights and direction and how, based on that, you know where we’re headed. Well, Daniela, my work with the long-term discovery of the long-term economic cycle stems back to the peaking of the dot-com bubble and the decline into the 2002 low.
From that low, equities pressed higher in conjunction with the most extended four-year cycle advance in the history of the industrials. In spite of that extended advance, I had forecasted that we would see a decline below the 02 low once that advance ran its course. And we did.
And it was dubbed the worst financial crisis since the Great Depression. From there, equities continued higher with more of the same, and I want to say more of the same, the stimulus pushing us, fueling the markets up into the COVID top in 2020. And at that time, I thought that COVID would be used as a cover story, if you will, to let nature take its course and the unwinding begin.
But rather, it was used as a tool to let some air out of the bubble and reinflate, pushing us to where we are today. Now, it was around 2019, just prior to COVID, that I discovered these long-term economic cycles. And prior to this discovery, I viewed this post-2002 era as just kind of an odd, rather peculiar, unexplainable time frame in the market, because it was driven by the expansion of debt, stimulus, government spending.
And the question was, why? Why such practices to continue pushing us in such an environment? And so upon the discovery of these cycles, I found that answer. And so if we can quickly review those cycles to paint this picture, the first cycle peaked in 1818. It was called the Panic of 1818-1819.
The cycle was driven largely by land speculation and the settling of the country. Cycle peaks, turns down, was highly deflationary, turns down, bottoms in 1840. From there, a new cycle is born, this time fueled by kind of more of the same, settling of the country, land speculation, but largely driven by the railroad boom, what ended with the railroad bubble, the bursting of the railroad bubble in 1873.
From there, cycle turns down, bottoms, 1900, this time fueled by the Industrial Revolution. This cycle ultimately peaked with the 1929 top, but it originally tried to peak in 1921. And I’ve heard ever since I was a kid that the Fed was responsible, or that they created, if you will, the crash in 29.
And there’s some evidence to that in that the cycle did try to peak in 21, and they did step in, there’s evidence that they did step in with stimulus, pressing it into the 29 top, and then resulting in, you know, the great, the crash in what would later become known as the Great Depression. From that low, cycle bottoms in 1940, turns up, and this time it was fueled by World War II and the post-World War II economic boom, pushing the markets up into the 1966 bull market top, cycle turns down, bottoms with the 74 low, next cycle is born, this time was fueled by the tech bubble, or the tech boom, and what culminated with the tech bubble and the peaking of the dot-com bubble in 2000. Now, it was around that time that, you know, like I said, around that 2019 time that I discovered these cycles, and upon the discovery of these cycles, something I realized was that, you know, like I said, the post-2002 era, I couldn’t explain it, it was just this weird time that we saw all this stimulus, and the question was why? Well, upon the discovery of these cycles, I got that answer, and what I realized was that the post-2002 era, while it was an odd time, it was also, I figured out, that it was a contiguous cycle with these other cycles, it was a contiguous cycle within this series of cycles that I had discovered.
Well, the other thing that become obvious is that it was based on government spending, debt, and stimulus, whereas these other cycles had an underlying economic underpinning. The next thing I come to realize is that the first attempt to downturn out of this cycle occurred with the decline out of the 07 top, and then I realized, well, the second decline occurred in conjunction with the decline out of the 2020 top, and then I began to see the why, and the why was, like Richard Russell used to say, inflate or die. I mean, this is a debt-based system that requires an ever-increasing amount of debt, debt creation, and inflation to survive, and so then what I realized was that the entire global debt-based system is at risk, and that is why we have seen what we have seen.
That’s why we saw, I should say, the extreme measures in the post-2002 era with the stimulus, the expansion of debt, and what otherwise appeared to be unexplained policies, if you will, and then the other piece of the puzzle that connected in my mind when I saw the David Webb video in November of 23, I believe it was, the great taking, he said something of all the things he said in that video, you know, pretty extreme measures that they’ve gone to, but the one thing that resonated with me in that video was that he said by the end of 2023, all of these global financial institutions had to be compliant, and from my work looking at this cycle and knowing that we had seen, we have this baseless cycle, when I say baseless, no sound economic underpinning, solely dependent on the expansion of debt and government spending, and I knew that we’d seen two attempted downturns out of this cycle, and now here we sit, I knew we were headed toward a third attempted downturn, and so it all resonated in my mind, and his work, to me, just confirmed the risk that I had figured out from these cycles, so that’s where we stand today, I think that’s the backdrop, and that’s the risk we face, it goes far beyond just a correction, it’s the entire, like I said, global debt-based system that’s at risk in my opinion. Wow, okay, so obviously many questions here, and I’m happy you brought up the David Webb angle, because I believe you also saw the interviews, I had done with David, but first let’s back it up a second, so when folks hear, okay, the entire debt-based global financial system is at risk, right, what does that look like, and what does that mean? Well, I don’t, let me explain it this way, the first three cycles that I described, they were driven, or they resulted in extreme deflationary outcomes, job losses, bank failures, they were, when you read the history, extreme, each of these downturns are deflationary by nature, the last two cycles, the one into the 74 low, and then the cycle into the 2002 low, not so much, but they had that deflationary pressure on the system, if you will, and that is why we saw what we saw with the reinflation efforts, but let me, I digress, the threat here is the deflationary downturn, and one common denominator with the first three cycles and the current cycle, and I think the first three cycles being so deflationary, so destructive, was it the growth rate, one thing I found is I data mine, and I look for common denominators, so you can connect the dots, and one thing I found was that the first three cycles, the growth rate of M2, it turned below the zero line, and the second two cycles that I found, it did not occur, and of course they were deflationary, but it did not, we did not see, they were not destructive like the first three, the current cycle, I think it was in November of 22, we did see that downturn, so what I think, what also is happening here, and I sent you a chart showing it, it’d be hard to explain that chart, I can explain it in simple terms, but it is required, every downturn has required an increased effort, in the amount of debt to keep the system going, and that is what, that’s what I’m saying, that’s what’s at risk Danielle, is can they keep the system going, and what is it going to look like, well it depends on if this third attempt to downturn bites, then it’s going to be I think extremely deflationary, I mean that’s the risk, and I digress, that’s why they have done what they’ve done, that explains the extreme measures, going back to the post 02 era, of all this insane stimulus that we’ve seen in debt expansion. Are you talking, so then what happens, are you talking, are you saying then we see a reset? I think, I don’t know that, I don’t have that crystal ball, but I think there is a prepackaged solution, I think that perhaps, it’s increasingly more, the evidence that I see is increasingly more difficult to keep this system going, and I think that it is at risk, and then you know that there is a prepackaged solution, maybe that’s what all, I’m speculating here, maybe that’s what all this great reset stuff is about, I don’t know what that’s going to look like, who knows what that’s going to look like, I don’t know, I just know that the system I believe is at risk, and the chart proves it, so what that chart shows, if I can look at the chart myself to show you, what that chart shows is it’s a, the first, everybody’s familiar with the debt chart, it shows just the cumulative debt curve, the overlay is, it’s a rate of change, it’s not a percent rate of change, it’s a price rate of change, in other words it’s based on the underlying number, and what it shows is the acceleration points, and you can see when you look at that chart, when you can see, even going back to the 1974 low, the bear market bottom low, look at the acceleration point of the debt growth coming out of that chart, you can see it, the line shows it, and then the 82 low, if you know market history, the market is stumbled, there was a four year low, we made the 74 low, then the market kind of rolls over, kind of double bottoms, comes out of the 82 low, look at the uptick of the debt, look at the acceleration of the debt, look what happened in 87, 85, 86, they let off the gas a little bit, we had the 87 crash, look at the acceleration coming out of that 87 low, and then we kind of coasted through the 90s, look what happened at the 2000 bottom, back on the gas, you can see the acceleration of debt, and now you can see it’s taking more and more and more debt at each little hiccup in the market to keep the system going, and right now we are levitating, we’re levitating at a level above the high point that was seen during the great crisis of 09.
So how, so if we’re levitating above that hot, like if we’re at the top of the volcano Tim, how close are we to collapse? Well that, Daniela, I don’t exactly know, like I said, I know the risk, but here’s the other thing I’ve done, I’ve dissected this, since the discovery of these cycles and understanding what we face, I have, like I said, data mined and found a checklist, if you will, of common denominators between all of these cycles and all of the setups along the way, a roadmap, something to guide us to say, okay, this, this, this, this, this is happening, or it’s not happening. And so that is the essence of what I have been following since the discovery of these cycles in 2019. And, and, and we are headed toward a third attempted downturn.
And like I said, there’s a checklist of things that I have to see. And that’s what I’m watching. And as those things are checked, the risk goes up.
And, and then once, if it wants, the checklist is complete, you’re okay. Here we go. The risk is, is, is there.
The downturn’s on us. But then the question is, can they step in and save it again? Just like COVID, for example, in 07, the checklist was complete. All the things were there.
Market turns down, but it was saved again. In 2020, COVID was used as, like I said, basically a tool to let some air out of the bubble, reinflate. Well, is there another rabbit left in the hat? I don’t know.
I don’t know that. But what I do know is that I have found the, uh, I guess you would say the guidepost to guide me through the setup for this, for this, um, third attempted downturn, which we now face. There’s no question.
Okay. Let me ask you this. Do they always want to save it? Or are they looking for that exit point? I bring up what you’ve said.
The 2020 downturn was an attempted downturn out of the current cycle, and it was also saved. Once they are saved, the Fed steps forward with all of the intervention debt creation that we saw, right? Right. Fueling us even higher to where we are today.
And so they obviously didn’t want it to turn it down. But why? The question is why do they want to keep saving it? Or do you think they’re looking for an exit? I think there probably is. Common sense tells me there probably is an exit point.
And I sense, I don’t want to get into the politics, but I sense that the current administration may have been put there to be the facilitator of that exit point. My personal opinion, that’s what I think. It does not exit.
Do you think there’s something going on with gold? Now I’ve heard other people reference what you’re suggesting and saying, and they tie this back to gold, and hence why there’s so much interest back in gold. Does a new system involve gold for you? And I know these are all hypotheticals, but I want to get your thoughts here. Well, let’s go back to this.
Each of the first three economic downturns were extremely deflationary. And like I said, the last two, not so much. This gold has acted, in effect, think about it this way.
Since the O2 low, we have seen the extreme measures that we have seen with the stimulus, the government spending, expansion of debt, et cetera, et cetera, et cetera. That has been inflationary. It’s like the old technician Richard Russell used to say, inflate or die.
It is a debt-based system, and it has to have a continuous supply of debt and inflation, or it collapses. And so coming out of that O2 low, that’s why it was fed the stimulus that it has been fed. And gold has acted as, in my opinion, well, obviously, it has acted as an inflationary hedge since that O2 low.
I mean, the long-term bottom in gold was in 1999, just ahead of the O2 low in equities and all of this stuff that we’re seeing now. So gold has acted as a hedge, and it’s done very well. So if we see, in my opinion, if we see this downturn, this deflationary downturn bite coming out of this start-attempted downturn, then I think that gold, like all other asset classes, could suffer from that.
If, and I want to come back to that, don’t let me forget to come back to that. If, however, they’re able to reinflate, like they did coming out of the 2009 low and the 2020 low, then I think gold’s going to do great. So it depends on whether they can contain this thing or if they want to contain it or not.
If the deflationary downturn bites, then like I said, I think everything is going to suffer. However, I sent you the current March research letter, and in doing some work with the Dow Gold Ratio, I don’t know if you had a chance to go through that. I do think that gold, by understanding the structure of the market, it’s kind of like algebra.
If you understand one side of the equation, you can back solve for the other side of the equation. So by understanding the structure of the market in both equities and gold, you can kind of backwards engineer and figure out what needs to happen. So I’ll say this.
I think gold is going to fare, even if the deflationary cycle bites, I think gold is going to fare much better than equities. Yes. So what do you tell people who, I mean, if you think a collapse is imminent, I mean, what do you do with equities here? Well, at this point, Daniella, we’ve had, like I said, some of the boxes have been checked.
I wouldn’t want to personally, and I’m not giving personal financial advice by no means, but personally, it’s like an old school technician once said, Kennedy Gamage, he said, there’s, you know, this time to dance close to the door. So, I mean, I would either want to be, have no exposure or be dancing awfully close to the door. And as of March the 10th, we had a Dow Theory primary bearish trend change.
Nobody talks about Dow Theory anymore. So that was one of the major boxes that had been checked. Now, there’s some things about this setup that I don’t like.
I don’t know how this is going to evolve. Like I said, this is part of the ongoing, what I do and with the research letter and so forth. But as of right now, we have the Dow Theory primary bearish trend change.
Like I said, there’s some things about that that I don’t like that led up to that, but it is what it is. Another thing I don’t like is all the bearish company. And I don’t know if there’s a twist to this setup.
I mean, maybe there’s something out there that I’m not, you know, not seeing yet. Maybe there’s some, you know, I don’t know. But with that Dow Theory primary bearish trend change, we are in a zone.
The risk is high here. How it develops, I don’t know. That’s, you know, an ongoing process.
You brought up David Webb. I don’t want to forget that. A big premise and point of his theory is that we are at risk of losing it all, right? That they can come and take whatever they want.
Hence the great taking. Your thoughts on that. Is that the scenario you see being set up? Well, let me answer that this way.
The extreme, I think, a lot of things resonated with me when I saw his video. Think of the extreme measures in the post-02 world that we’ve seen to sustain this market. It’s unprecedented.
So you have to ask yourself, why? What’s at risk? Why would you see such insane measures? And then you look at this chart. It speaks for itself. You can see the acceleration points.
So I think that what David Webb exposes in that video, the reason that video resonated so strongly with me is the extreme measures that we’ve seen in the post-02 world and the extreme measures that he reveals in that video. They kind of mesh when you think about it. And so, again, it kind of validates to me, or shows to me, the risk that we face that I’m right.
It is the entire system. Well, look at the extreme measures of 2020. If that’s… Exactly.
We don’t have to go through the list. But I mean, if that’s proof of anything, that anything is possible, right? Right. And like you said, I mean, do they want to save it again? I don’t know.
I mean, who knows? I think there will be maybe a half-hearted attempt. And maybe this is it, Danielle. Maybe they try.
And if they can’t, now with the information that Webb put out with all the global financial institutions being compliant by the end of 2023, maybe that’s the backstop. Maybe now it’s set up, well, hey, if we can’t save it, when we got this, we’re ready to go. You know, I don’t know.
But I’m telling you, this shows the risk. And I feel like that it dovetails with the extreme measures that David reveals in his video. Let me play devil’s advocate here a second, Tim, because I’m sure you’ve heard, well, how are you basing this? You’re basing this on cycles.
The pushback is that people who read cycles, it’s like reading through tea leaves. I mean, how can you base so much on cycles is the question. Well, all cycles are nothing more than trend quantification.
And what you do is you go back and you find common denominators. And if I can say that something is going to happen, if there’s a consistency that I can show this cycle has a certain duration and a certain behavior 70, 80, 90% of the time, then it’s hard to argue against that data. And anyone that doesn’t understand cycles, then I think they’re just speaking out of term or through ignorance because cycles exist all around us.
I mean, you know, the time of day is a cycle. The migration of the birds is a cycle. The seasons are a cycle.
The day and night is a cycle. I mean, the tides, everything’s a cycle. And there are certainly cycles in the market.
Now, those cycles, they can be somewhat manipulated. They can be stretched, for example. Coming out of the O2 low, that was the most extended four-year cycle advance in the history of the Dow Jones industrials dating back to 1896.
And I knew that. And I said that in spite of that advance, we would see a decline below the O2 low because they stretched the cycle like a rubber band. And based on the little checklist of parameters, I was able to make that forecast and that statistic held true.
So you can stretch these things. And because of the manipulation that we have seen, yes, these cycles have been distorted, but they haven’t been invalidated. They’ve just been stretched.
And ultimately, nature is going to have its way. You know, spring may come late one year, but it’s coming. Let’s just wrap on this because, look, anyone who gets your newsletter, I mean, it’s dense, it’s deep.
You really go through all the steps and outline everything. If we’re levitating, as you say, Tim, above that, the hottest peak possible, what’s your advice to folks watching right now? What’s the takeaway? Well, I guess the takeaway is, it’s just understanding the risk. And if you understand the risk, then if you see things start to develop, then you’re not blindsided.
I guess that’s one takeaway. Obviously, anyone that wanted to track the developments along the way, they could do so through the newsletter. I hate using the word the fluid situation, but it’s a fluid situation.
And following those developments, that’s been the focus. But understanding the risk, I believe, I think that’s the point, is that it is not just, it’s not like any other top. It’s not like we face a correction.
It’s not like we face just a downturn in the housing market that’s temporary or like I said, a 20% correction. It goes beyond that. And I think that people do not understand what the risks are because things have been so stretched and so distorted for so long, this now feels like a new norm.
I mean, after 20 plus years, this is normal, but it’s not. I don’t think any administration would want this under their watch. They don’t want a market collapse, especially not the administration of Donald Trump.
So I guess to your point, it’s timelines can change. Things can be stretched, but at one point it can’t be anymore. That’s right.
Exactly. Yes, you took the words out of my mouth. And the question is, are we there? Is the third attempt to downturn that time? And, you know, it’s hard.
Think about this. Think about this. Look at that debt chart.
Look at the stair step. Look at what it has taken in the post-COVID downturn. And imagine, and I did some work on this, and I don’t remember my own numbers.
It’s been too long since I looked at it. But each one of these incidences, if you will, it has taken two to three times more effort to sustain this thing. So if we were to get another downturn and they try it again, and they try to save it again, I mean, look at the effort it is going to take to do so.
And the question is, can they? I don’t know. I suspect they sit around the table and ask themselves that. Who knows? So at some point, yes, I think the inevitable happens.
And like I said, I could be wrong, and I’m not trying to offend anyone. I don’t swing right. I don’t swing left.
I’m neutral when it comes to politics. I don’t care. I’m just saying, I think that if there was an administration, I just feel like that this administration may be there to facilitate whatever’s coming with the inevitable collapse of the system.
Yeah, because I’ve had experts on, you know, if we’re speaking about U.S. debt, right? Who will discount it saying, doesn’t matter if the U.S. wanted to clear it away, they could clear it away. But you would argue otherwise, that the debt does matter. Well, obviously it matters because it is a fiat debt-based system.
The system feeds off the debt. That is what this chart shows is indisputable. This chart shows it every time since 1974 that the market has gotten into any kind of little, any kind of little hesitation, any kind of little tough spot, the debt escalates.
So if the debt’s not important, why? And I disagree with that. Now, as far as could the debt be swept away? Yeah, I don’t even think the debt’s real. I mean, the money’s not real.
So how’s the debt real? But that’s another subject. In this fiat debt-based system, it is real and it does matter. Wow.
Well, that was an incredible introductory interview to your work, Tim. I’m sure we’re gonna bring you back on since I’m sure there’s gonna be plenty of questions from the folks watching. For now, people can find more of your work at Cyclesman.com, correct? Yes, that is correct.
All right. Tim, thank you so much. Daniela, thank you for having me.
I really was an honor to be here. I appreciate your time. Like I said, I feel for whatever reason it was meant to be that we connect.
So thank you for reaching out and I’m glad I picked up the phone. Tim Wood, Cyclesman.com and of course, keep watching our show. You can sign up at danielacombonio.com and subscribe to our YouTube channel.
That’s it for me. Thanks for watching.
