Financial Collapse Imminent, GOLD At ALL-TIME HIGH (Uncut) 03-14-2025

Financial Collapse Imminent, GOLD At ALL-TIME HIGH | David Hunter

Within the next year, we’re going to be in a global bust. Gold bust, just simplify it and say something worse than 2008-9. That sounds crazy.

Most people don’t see that. But I think certainly auto loans will be a part of that. I think there’s a lot of things, you know, you can’t have the leverage we have in the system and go through a surprisingly bad downturn and not have it, you know, cause real problems.

Hello, and welcome back to Soar Financially, a channel where we discuss the macro to understand the micro. My name is Kai Hoffman. I’m the EJR Mining guy over on X and of course, your host of this channel.

And I’m really looking forward to welcoming David Hunter. He’s a contrarian investor, and I’m really looking forward to catching up with him. We spoke with him at the end of October right before the US elections.

And as you can imagine, and as you all know, not a secret, a lot has changed. So we need to get a fresh perspective from David. What has happened to the boom bust scenarios that he’s been calling for? How’s the S&P going to behave? What’s gold going to do? Are we going to see a bit more of a rally here in the S&P 500? Have we seen the blow off top that David has been predicting in our last conversations? Or is this just a blip on the radar screen or maybe just a bump in the road to maybe even higher levels in the S&P and in the gold price, of course, as well.

So lots to discuss with our guests. But before I switch over to my guest, please hit that like and subscribe button. Helps us out tremendously.

And we’ve been growing tremendously. So we really appreciate you hitting that subscribe button and leave a comment and leave a like down below as well. Now, David, it is great to welcome you back on the program.

It’s good to see you again. How you been? Yeah, hi, Kai. I’m doing well.

And we sure do have a lot here that’s changed in the last, I guess, four or five months since we talked. So it should be a fun conversation. Yeah, definitely.

Lots to catch up on. And maybe we’ll start with a big topic here. Bit of a can opener as well.

David, does the White House want a recession? Yeah, I know that’s the big narrative out there. And there’s a lot of people saying Trump wants a bear market. He wants a recession.

He wants to be able to kind of clean things out and blame it on Biden and start fresh. I think people are reading him wrong. He recently said he didn’t really care about that the market was going down.

He seemingly has sent signals out that, yeah, we could have some pain before we see the benefits of what we’re doing. I think that’s very true. I don’t think he’s necessarily trying to create a recession or wants a recession.

But I think he’s right that we’re not going to get all these changes done without some disruption. So whether he wants it or not, we’ll probably, I’m calling for a recession this year for sure. But I think the bigger story or the bigger misunderstanding out there is that somehow his comments about not caring about the stock market was because he wants the market down or because he’s trying to send the message to Jay Powell because he wants them to cut rates.

I don’t think it’s either one of those. I think it’s very straightforward. His big focus right now is tariffs to try to get concessions from our trading partners.

Concessions, whether they be, for example, in China or Europe, having them lower tariffs or eliminate tariffs. In Canada and Mexico, it’s other things along with some concessions on tariffs. But what I think the comment about the stock market was, was because I think our trading partners are sitting there saying, if we wait them out, if the market goes down, he’s going to have to change his tune.

He’s very in tune with the market. And I think that was what that comment was, was basically a sudden message to them. That’s not going to change me.

I’m here because I have the leverage. We have the market. You guys want.

We are going to extract concessions one way or another. We can either do it by getting to the table and doing this reasonably or we can do it by trade war. And I think he’s very sincere in that.

He’s come into this committed saying, you know, the U.S. for too long, many decades, frankly, has given away its markets for free. Well, Europe basically blocks our goods. China tariffs us left and right and keeps us out on many things.

Canada and China certainly aren’t in that category, but they tariff us. And we’ve given away our store for free. It’s time to level the playing field.

I think that’s his agenda. He came in running. He ran on that.

And I think people are selling him short if they think he’s just going to kind of cut and run as soon as the something else happens. So I think Canada is making a mistake playing hardball. I think, you know, their rhetoric is strong, but frankly, they get hurt a lot more than us by this trade war.

So I think what you’re going to see as a market, as a stock market, you know, investors, if they kind of settle back, let this play out. Ultimately, I think it’s very much a positive that you’re going to see, you know, basically a freer trade around the world. I think Trump is doing everybody a favor in this.

And unfortunately, it does get messy and chaotic while you wait for it. But I think it’s coming. Yeah, no, definitely a lot’s going on.

One thing I’ve noticed, I think a lot is getting lost in the messaging itself and the way it’s presented and the way it’s communicated as well. I’m very pragmatic when I look at things like just this morning, the Financial Times was talking about the U.S. will not be buying any of our European champagne and Parmesan cheese. But I’m really pragmatic when I look at it like, yes, we’re slapping really high tariffs or duties on American or U.S. red wine, for example, to be sold over here.

I love Parmesan cheese. I love French wines. I love Spanish and Italian wines.

But I do get that it needs to be a two way street here if we’re friends and partners. Right. But the messaging is the problem that I see.

And that’s what riles up a lot of people. And that’s what drives people against the White House and the decisions that are coming out of Pennsylvania Avenue here. Yeah, his style is confrontational.

He certainly is hyperbolic in what he says. He’s got a big task. I mean, like I said, this is many decades in the works.

And it’s not just obviously in trade. It’s in the way our governments run, the waste, fraud and abuse, etc. And he’s got a big task.

You can’t do this. I hear lots of talking heads out there saying, well, you just have to go at this in a more reasonable manner. If you do that, you’re not going to get what you want.

This is how he negotiates. It’s how he negotiated in real estate. He’s written the book, The Art of the Deal.

Anybody that’s watched him over the last eight or 10 years should know that this is, I mean, campaigning like this, this is his style. But part of it, I think people underestimate him because I think he’s just kind of, it’s a personality thing. And it’s just, he doesn’t know how to behave normally.

And he gets criticized, obviously, by all his enemies in the media, etc. But in truth, it’s a purposeful thing to create the chaos, to create the hyperbole, to get everybody kind of off balance. And their initial reaction is pretty negative, obviously.

But then they have to kind of look and say, hey, this is hurting us too. We got to step back. So I think there’s a method to the madness, shall we say.

I don’t think this is all just Trump’s unreasonable and Trump’s chaotic person. I don’t think that’s really what this is. Yeah, it looks like he’s getting results, just the Ukraine, for example, the Ukraine situation, just to throw that in here as well.

But Zelensky and Trump and Vance had that falling out at the White House. But now they’re back at the table, 30 day ceasefire is being negotiated, seemingly happening, and should be announced any minute here, it seems like. So he’s getting what he wants.

And frankly, if you look at his first presidency, or even what’s happened since he’s been in this time, that’s not a one-off thing. That’s typically what happens is the chaos happens first. Everybody goes crazy and underestimates what’s happening.

And then it gets resolved. And they kind of say, oh, how did that happen? And then they go right back to reacting to his hyperbole in the next thing that he does. Like I said, he knows what he’s doing, even though the image out there is that he doesn’t.

Yeah, it creates a lot of uncertainty. And there’s a lot of political theaters like tariffs, how are they happening? Are they not happening? And he’s causing that confusion to degree as well. So I don’t want to take him out of the line of fire here, because he’s causing that confusion, like with Canada and Mexico, where we said, hey, 25%, we’ll give it a four week break.

We will do it next month. And then he keeps walking stuff back. So he’s causing that confusion.

Maybe it brings me to the market discussion now as well, David. Is that what we’re seeing in the S&P 500 right now? Is it really just uncertainty that’s being priced in? Or is there more to it, perhaps? Yeah, I think it’s definitely uncertainty. Most of it’s driven by the tariffs.

I will say a month ago, I started talking about the market was at 6,100 at a ties. And I was saying, I’d like to believe this is my scenario, I’m bullish. But I see some things under the surface that tell me we’re probably not done with the consolidation that started last December.

And I thought we’d go down 5% in the S&P and maybe 8% or 9% in the Nasdaq. It’s obviously done more than that. And I think that’s because of the tariff talk and trade war scares.

And you’ve got people coming out of the woodwork comparing this to the 1930s, this is how a depression starts, et cetera. But there was, before even the tariff talk started, there were plenty of things technically and, like I said, under the surface that really argued that we were due for a correction or a little bigger correction anyway. Now that we’ve had it, and it went further than I expected, the sentiment is off the wall.

The sentiment is so bearish right now. And what I step back and say is with a 10% correction in the S&P and a little more than that in the Nasdaq, you’ve created a wall of worry, a sentiment picture that you normally get from a much bigger bear market. So I think that’s all a sign that this is cleansing.

It’s the pause that refreshes. And my view hasn’t changed. I still believe we’re headed for S&P 7,500, Nasdaq 25,000, Dow Jones 55,000, and the Russell up to 3,300.

Now the Russell from its lows, that’s about a 65% lows of this week. That’s about a 65% run. The S&P and Dow probably a little over 30, and the Nasdaq probably 40.

And I think things like the semiconductors, which everybody wants to pan now and doesn’t like, I think that you’re going to see those pretty much double from here. I have a 400 target and it’s not changing. So these are aggressive numbers.

I get a lot of people reacting negatively to my call right now, but I think you are set up for a very big run here in the spring and into the summer. Yeah, you definitely have to elaborate on that, David, because as you mentioned, you mentioned it yourself, you’re seeing the cracks, they were there, you can’t avoid them. Forward earnings are weaker and the outlook is generally weaker.

Where do you see that strength supposedly coming from, David? Yeah, my cracks were more short-term technical though. I mean, there were gaps that could get filled in. The market was overbought technically.

And I look at a lot of cross-market stuff, sector stuff that was just saying it’s not in place yet, that it’s got some weakness ahead before it can go. And it was things that the market needed. So those were the things that I was looking at that were kind of cracks, but they were short-term cracks.

The bigger picture about the economy, where the economy is slowing for sure, and people were worried that inflation was accelerating, so you’re hearing the stagflation word again, etc. I don’t agree with the inflation accelerating. I think today’s number is the beginning of numbers coming down, not up.

People kind of forget, but oil fell from 80 to mid-60s in the last probably less than two months, maybe last month, month and a half. And gasoline’s come down. So that’s a big help to inflation and help to the pocketbook.

Shelter has definitely been weakening because of the rise in rates of the last few months. So you’ve got two of the big parts of the economy are helping inflation and slowing. And they’re also obviously helping to soften the economy.

What people don’t realize is that the market’s going to probably go up. My base case anyway is that the reason we have the run to the numbers I’m talking about is because of the softening economy, not that the softening economy is a negative. As the economy moves towards recession and maybe into recession, the Fed’s going to move back the other way.

We went from four cuts in the fourth quarter to all of a sudden people were questioning whether we’d get even one cut in 2025. Now we’re up to three cuts because the economies look softer and GDP now from the Atlanta Fed scared people into thinking we were already in recession. I do believe the Fed’s very close to easing again, whether they know it or not yet.

I think they’re going to have to ease through the bulk of this year. The economy is softening. And yeah, they’re a little nervous about tariffs being inflationary, etc.

I think that, too, is a misread. Number one, I don’t think we’re going to see nearly the trade war of the tariffs that everybody’s worried about. But number two, tariffs are a one-time raise in prices, right? The offset to that is that they also can create some softness in demand.

So that you really don’t look at tariffs on a long-term basis as something that’s going to be inflationary. It could be more disinflationary or even deflationary if you really got a trade war. So I think economists make a mistake, and the Fed certainly, of viewing tariffs in a straightforward inflationary manner.

I think it’s far more nuanced than that. We have to talk about stagflation in that context. You brought up the Atlanta Fed and the GDP now forecast, which was a negative 2.4%, which they walked back a few days after because they probably realized that they caused quite a bit of stir in the market.

And they said, well, let’s take gold imports out of it because we’ll get to gold here in our conversation in a minute. But they took gold out of it and said, oh, OK, we’re back to positive territory, 0.4%. Everything’s fine. Goldman Sachs came out in the same sentence, pretty much saying, oh, 1.3% is our target for the GDP, which is much lower than where we’re at, 2.3%. So I’m going to throw the stagflation debate back in here.

It doesn’t fit with the inflation, though. We’re seeing a weakening economy, but you just said that you don’t see inflation picking up again, based on tariffs or other factors. Stagflation, is it really off the table, though? I’m not a stagflation person.

Even when I was around in the last year or two years, I lived through the early 80s when stagflation became, that was when the term was invented. Stagflation was because we had relatively solid growth and inflation in the high single digits and double digits at some point there. But don’t forget, back then, we came down from high double digit inflation, mid-teens, even 20% inflation.

And we went through a recession in the early 80s. That’s what stagflation was. This idea that you can have 1% or 2% growth, if that, and inflation at 3%, and that’s stagflation.

No, it isn’t. We came through a long period where we had almost no inflation and some growth, slow growth. So people are kind of spoiled by that and think that anything that’s a higher inflation is stagflation.

First of all, I think we’re very close to recession, so that goes beyond stagflation, I think, beyond the stag part of that. But secondly, more importantly, I do think inflation has peaked, is coming down. Any rise in the first quarter, we see it every year, seems to be a kind of a seasonal bias that gets worked out as you go through the year.

Trueflation is a measure, a private measure out there that I’m not sure where their differences are, but their inflation number is well below the Fed’s target at 2%. It’s 1.3% or 4%. Shelter is one thing that has biased the indexes up, CPI in particular, it’s not calculated properly to adjust for, to bring it to present day, and shelter is definitely weakening.

Rents are sticky, obviously, they don’t come down quickly, but housing, although it’s held up, you go to areas like Texas and Florida, and prices are coming down pretty quickly. So I think our indexes are not necessarily accurately representing where inflation is today. And at the very least, I don’t think it’s going up, I think it’s coming down.

It could be at 2% target already if it were calculated properly. So I think stagflation is kind of a neat word people climbed onto that didn’t live through the early 80s. I just don’t think it’s the story of today.

Yeah, I definitely didn’t live through the early 80s. So I can’t really comment on that. I was only born in the mid 80s.

So you’re lucky. Yeah, I guess so. I guess so.

I was one of those. But you mentioned inflation rate. And of course, trueflation is already showing 1.32% inflation.

So we’re already below the 2% target rate. Which brings me to the Fed. And you mentioned it yourself, the Fed might be forced to cut.

Right now, I’m just looking at the CME FedWatch tool, 97% of a Fed cut, but that hasn’t really priced in the CPI number that came out this morning, the beat or downside downward beat of the CPI number below market expectations. I want to work with you through the facts like why would the Fed have to cut and the various aspects to that CPI number dropping, but bond yields is a topic that we skipped over earlier. But we got to talk about that.

Yeah. So I’m not saying they have to cut and I really don’t play the game of when you’re within the month of meeting, I don’t play the game of are they going to cut or aren’t they going to cut because it’s really a group of committee members sitting together and I’m trying to guess their minds. It’s hard.

But they’re data dependent, David. Yeah, they’re data dependent. Exactly.

You know, frankly, I’ve been a defender of the Fed and a defender of Powell for the last couple of years. And I’m in an awkward place doing that because I’m saying the Fed is going to create a real problem. And Powell’s going to make a big policy mistake along with other central banks.

But if you just step back and look at the last year and what everybody was saying he should do or what was going to happen, he was the most right of anybody in terms of how they manage policy. Right. I mean, he basically walked that line and they brought rates down.

They didn’t create inflation. They didn’t create recession. So they, in my mind, in the last year, they get an A. That doesn’t mean they can’t get an F in the next year because I think we’re heading for a place where they’re going to make a big mistake.

But up till now, it’s really hard to fault the way they’ve done it. And they’ve really tried to walk that line between looking at the jobs picture, looking at inflation and balancing the risks, and at the same time, you know, not throwing us into a recession. So I can’t fault them for what’s happened to date.

The problem is it gets messy if we do start going into recession here and they still play cautious and say, well, yeah, but we don’t want to go back to what happened in the last 10 years where we, you know, blew QE up that we, you know, print like crazy and we drop rates down to zero. We’re not going back there. And I think that’s the problem is that they’re going to be so worried about not doing what the Fed got criticized for in the last, you know, decade or more, that they’re going to sit on their hands too much at a time when it’s desperately needed that they ease.

So that’s a little bit of where we’re at now is they could sit on their hands at this meeting at a time when they shouldn’t. Particularly, they got criticized for doing a 50 base point cut in September. So, you know, they’re going to be cautious about easing.

And I think the economy, the way the economy works, it can look fine. And then all of a sudden you go off a cliff. I can remember September of 2008, I was a real loner.

There were a few of us, I guess, out there, but that was saying we’re headed for a hard landing. Literally all of Wall Street’s economists were saying soft landing, no recession in sight. That was the first, second week of September.

Three weeks later, we were in the biggest financial crisis in our history. I mean, that was how close we were and they didn’t see it. So when things start heading south, they can head south in a hurry.

I don’t think we’re there. I think we’ll start with a mild recession that causes them to say, yeah, we’re going to start easing again. We got to cut some rates again and that will help the stock market.

The problem is down the road when that starts accelerating, it’s something worse and they’re just not up to speed with it. Now, that’s where we’re sort of maybe what we’re seeing in the S&P 500 right now. And you’re talking about the Fed put easing rates, QE, just supporting the market with liquidity or additional liquidity as well.

And I think the market might have lost a bit of faith in the Fed or Trump put as well, just buoying the market with excess liquidity and additional money printing, quite honestly. Well, they should. That’s my point is I think that’s what brings on the bear market and the bust.

It’s not that they’re not going to cut a quarter point or even a half point along the way here. It’s when the acceleration to the downside on the economy starts happening. And I think that’s sometimes going to happen this year.

They’re not going to be able to catch up to that because they’re going to say, oh, we can’t, you know, we can’t shovel another trillion into the market, into the system. People think we’re just going back to the old ways. So the mistakes of the past are going to cause them to make the opposite mistakes this time around.

In the next, you know, three, four or five months, they’re going to be easing in their typical gradual way, helping the market. And that’s why I think we get this run. You know, you’re going to have, you know, as I’ve said on X, the things that will drive this final leg to the top, which is a big leg and I think a fast leg, will be lower rates, lower dollar, Fed ease and the sense that things are, you know, it’s a soft landing.

It’s not a hard landing. That’s what I think is about to happen. I think between, you know, Fed meeting in March and Fed meeting in June, I think you’ll see a very robust stock market.

Now, I know it’s interesting because we’ve had that discussion before, David, I believe, and I just lost my train of thought. Hold on. I wanted to talk about the Fed.

Oh, okay. Hold on. Yeah, no, I want to talk rates, but also the lag effect and keeping some flexibility.

So David, I think you got a point there and we need to talk about maybe the Fed keeping some flexibility to themselves, but also lag effects. Even if they cut 25 basis points, what does that really mean? When does that, you know, trickle through the system as well? I think it’s symbolic. They could do that with words, not necessarily with rate cuts.

So I’m curious, like two parts of the question here, David. A, should they keep some flexibility, meaning keeping rates fairly high? So if something does break, they can actually react to it instead of cutting early or potentially early, let’s say in air brackets here, and then not have that flexibility as well in the system there. Yeah, so part of the problem I have with that is it’s not the Fed, and I am forever saying this on X, it’s not the Fed that cuts rates or that determines rates.

The bond market basically determines rates. The Fed can control the overnight Fed funds rate, the rate that the banks charge each other to lend money back and forth. That’s what they control.

They can’t control the 10-year, they can’t control 30-year, they can’t control a five-year. Obviously, they can influence it with their, you know, their policy, but let’s say the Fed totally says, we’re not cutting, you know, we’re holding firm here. Do you think the bond market’s going to just sit and say, well, if the Fed’s not cutting rates, they’re not going anywhere? No.

If the economy is softening, you’re going to see a bond rally, a big bond rally, and then the Fed will follow the bond market ultimately. So they might lag, they might be slow to react. I don’t care because the bond market’s not slow to react.

You know, right now, and I’ve been saying it this week, there’s a setup in the bond market. The 10-year looks like it could go back to 440, 450. We were at 420 yesterday, we’re already back up to 430.

432 right now as we speak. Yeah. So I think we’re on our way to that 440.

There’s a gap at 440 and there’s a right shoulder top at 450. So somewhere between 440 and 450, I think we roll back over. And it doesn’t have to do that, doesn’t have to fill that gap, doesn’t have to go, you know, the shoulder doesn’t have to go back there.

But that’s, I think, likely. And if it’s going to happen, it’s probably going to happen in the next two or three days. From there, I’m calling for a 2.5% 10-year probably by summer.

So you’re at 4.5%, let’s say, or 440, and you go to 2.5%, that’s a lot of ease, right? It doesn’t matter what the Fed does, that bond market, and whether the Fed’s along with it or not, that’s why I’m bullish. Because that’s what I see. I got to ask you about the correlation between the S&P 500 and the bond market, though.

Because right now we’ve seen a crash in the S&P, or a crash, like a correction in the S&P 500, and a correction in the bond yields, meaning the bond yields have been dropping, meaning bonds have been rising. But what you’re saying is we’re dropping to 2.5%, that means the bond prices are crashing, which is good, but that also means that money is rotating out of other sectors. Meaning, why would the S&P 500 run with bonds crashing? Well, I will say that there are times when rates are coming down sharply.

That’s what I mean. Yeah, sorry, it’s very difficult to keep that apart. Rates are coming down sharply and the bond market’s running.

There are times when that’s very bearish for the stock market because they’re doing that because the economy’s crashing or the economy’s heading straight south. There are other times when the bond market’s rallying and the stock market’s rallying, and rates are coming down and the stock market’s getting a benefit of rates coming down. It really depends on the environment.

Like I said, right now, I believe what you’ve got for, and basically it’s end of first quarter, March to, I’ll say have is rates coming down because inflation’s coming down. I think you’re going to be at the Fed target, even on CPI. Rates coming down because the economy’s softening, but it’s not looking like it’s heading.

There’s going to be plenty of evidence that things aren’t going straight south. It may be that when they go back and calculate the recession, that it started before now, but in terms of Wall Street’s analysis of it, there’s still going to be enough evidence that the economy’s holding firm into the third quarter before you start getting nervous. Part of the reason for that is if I’m right about rates coming down, they’re going to also stimulate auto sales and stimulate housing sales again.

You’re going to get a bump. Housing has peaked. Housing peaked a year and a half ago.

Car sales are not going through the roof, but a drop in rates of that magnitude, and let’s say they drop half, three quarters of a point even, is going to stimulate home buying in the spring, meaning now. It’s going to stimulate some auto purchases. Those are almost automatic stabilizers or offsets to the economy weakening.

That’s why you’re going to have enough things in the economy to keep the economists from getting dire, from saying, oh, we’re in bad shape. If you have the economy okay, soft landing, and you have rates coming down, dollar coming down, the Fed getting on board, I think by sometime in the second quarter, some of this tariff stuff straightened out so that there are deals and things look more orderly and it looks like maybe the U.S. is in better shape trade-wise than they were. People are going to start back to the side of, hey, Trump is doing a pretty good job.

These aren’t pro-growth strategies. We are okay. All those things and a positive tape that’s going from S&P 5,500 to S&P 6,500, and all of a sudden, everybody’s on board the tape and they’re saying, wow, it’s great.

I can guarantee you at 7,500, if I’m right about my number, at 7,500, you’re going to have everybody all in and very bullish for the next two or three years. I’ll be saying we’re at the top. Yeah, I know.

That’s why you’re a contrarian indicator and contrarian investor. That’s why I love chatting with you because it’s good to have a bit of a counterbalance to all the arguments. I wouldn’t say pushback, but I got to challenge you on the mortgage situation and the U.S. housing market a little bit because back in September last year, when the interest rates got cut, mortgage rates went higher and didn’t have the effect on the housing market that many expected.

Why do you think it’s different this time? It’s a dangerous saying. It’s dangerous to say this time is different. That’s different, yep.

Well, yeah, I’m not saying really this time is different because this is more typical. What was not typical was that. A lot of that was obviously, first of all, the Fed did a 50-base point cut and soon after they did it, the economy strengthened, right? So they started getting criticized for having jumped the gun on easing.

And secondly, you were going into the election and there was a lot of uncertainty about tariffs and if Trump wins, you’re going to get exactly what we’re seeing now, right? That was the fear. So I think rates went up and I said then, I’ll say it again, I said it earlier in this show. There is a narrative out there that tariffs are inflationary, right? That’s kind of conventional wisdom within the economic community.

And there are others that agree with me. Tariffs are not per se inflationary. They cause an immediate, a one-time jump as prices get adjusted for the tariffs.

The businesses raise their prices because they can’t absorb all that or the consumer can absorb some. So it’s not a full one for one, but they do raise prices to offset some. But after that, that tariff is not inflationary and in fact is disinflationary if not deflationary because higher prices lead to less demand and the economy slows.

So this idea of the Fed officials, the Fed governors are doing it, most of Wall Street economists, not all, there are some that agree with me, but they all kind of jumped to this idea that tariffs are inflationary. And in the immediate future, they may be, but really it’s not a sustained inflationary effect. But that was really what drove rates up last fall.

My read of the charts, my read of cross markets, my read of everything says that was a one-off situation. You’re not going to see that again. Yeah.

I’ve been hearing commentary that auto loans might be the next, what do we call it, the next global, the next trigger for the financial crisis here. Curious what your thoughts are. We’re having a guest come on, I think next week, to talk exclusively about just auto loans and what the auto market looks like.

I’m curious what your thoughts are because you brought up the auto market here. Yeah, I will certainly agree because I’m calling for a global bust, as you know, out beyond, we start with a recession, starts looking like a soft landing, then it gets harder and harder. But ultimately, I think within the next year, we’re going to be in a global bust.

Go bust, just simplify it and say something worse than 2008-9. That sounds crazy. Most people don’t see that.

But I think certainly auto loans will be a part of that. I think there’s a lot of things, you can’t have the leverage we have in the system and go through a surprisingly bad downturn and not have it cause real problems. So I think even I’d say the last two, three, four years of home purchases, a lot of those for particularly first-time homebuyers that ran to that market and said, yeah, it’s absorbing a lot more of my income than it should, but I can’t afford, I’m not going to wait any longer.

Those people aren’t going to be able to carry through if they lose a job or what have you. So we’re still going to have a housing downturn that I think could cause a 34% to 40% decline in home prices across the board on average. Autos, I think can be a problem.

Certainly, commercial real estate, we’re not out of the woods there yet. So there’s a lot of things that once we start deleveraging, you’re going to find out what deleverage means. Yeah, I know auto loans is an interesting market because there are so many outstanding loans that have just been given out to anybody with zero down payments, very low interest rates.

What’s that sound like? That sounds like 2008 with mortgages, right? And where people are buying cars with, I don’t know what they’re at now, seven or eight year auto loans, I mean, or these leases are incredible. I’ve heard 12 years even. 12? Really? Wow.

Yeah, it’s ridiculous. When people mention the amount of months, like, yeah, I financed this for like 120 months. It’s like, what? At least you could make the case that homes could appreciate.

With autos, they’re depreciating from day one. So it really is ludicrous. Yeah, it’ll be interesting.

I’m looking forward to that conversation in more detail as well, if there’s even a chance to make it through it. David, we have two more topics I quickly want to touch with you, quickly. But the US dollar we need to talk about, the Dixie at 103.5 against other currencies, of course.

But how is that playing into the cards of Donald Trump here and the White House? Yeah, I have been predicting a big drop in the dollar. And for a long time, it’s going against me. It’s finally rolled over for sure.

And I think next stop is probably 100, you know, it can go to 103 and bounce to 104. But in terms of until there’s any big turn, it’s going probably back to 100. And then from there, I think it can go down to 90 and ultimately 82 is my target.

And that’s basically for the next, you know, in 2025. So that’s a huge drop. I, you know, I don’t know where the administration is in terms of the dollar.

I don’t think they’re certainly not looking for that. But I also think they understand that, you know, a weaker dollar helps trade to some extent, helps our, you know, his agenda to some extent. So I don’t think they’re going to be all that worried if the dollar is going down, maybe not because they’re pushing it down, but for other reasons.

We just need to talk drivers. Why would the dollar decline so much versus the other currencies? And I have a question prepared about the EU for you as well, and how much of a competitor it is now, especially for capital and liquidity. Yeah, some of it, you know, currencies are very much a technically driven thing.

You know, a lot of what happens there is in the charts, not that there aren’t fundamentals behind it, but a lot of the dollar’s weakness is the paired currency strength. So you can see a lot more strength coming in the euro, in the British pound, in the, you know, the commodity currencies like the Aussie, the Louis, you know, you’ve got Japan is the big one in terms of, you know, I think they’ve turned the corner that, you know, the yen came down for so long. There’s a long ways for that to go back up.

I’ve got it going up from, you know, 0.0066 or wherever it is to 0.0085. That’s a pretty big move. So a lot of the dollar’s weakness is really the other currency strength. And it’s strength from places where they were deeply oversold.

So it’s not like they’re long, you know, their stories are big, long stories, but for the next, you know, balance of this year, I think the story has been reversed. Some of it is policy. I suspect what we’re going to find is that our economy somewhere probably beginning second half of this year accelerates the downside faster than the others.

You know, our policy changes are bigger. So it causes, you know, a lot of currency changes, relative policy comparisons or interest rate comparisons, et cetera. I think there’s going to come a point here in the second quarter where our rates are dropping faster than anybody else’s.

And that causes the dollar to go down. Yeah, no, it’s interesting. I brought up the EU here because it seems like we’re going on a spending spree here, very, very soon, not just defense infrastructure, which we desperately need, especially here in Germany, talking about the train, the train and train infrastructure and the rail infrastructure here.

But how much competition is the EU, for example, to the U.S. right now in terms of like liquidity drag? Because I would assume some of the drop in the S&P 500 had to do with money shifting over to the DAX, for example, the German index. And just curious, like how much of a competition that is for the capital that’s out there? Yeah, there’s certainly, you’re getting, you know, you’re hearing certainly lots of institutional investors saying we’re reallocating some of the money from the U.S. there. Not everybody, there’s lots of them that still are in the camp that the U.S. is the lead.

And that’s my view. I think this last leg up into the top, you know, I’ve always said there would be sympathy moves around the world. You know, it’s not just the U.S., but the U.S. is going to be parabolic.

The others aren’t going to be quite so parabolic or aren’t going to be so strong. But I think they will, you know, I’m not sure, you know, if my call is from here to 7500 on the S&P in the next three or four months, I don’t think any of the European markets are going to match that. You know, they’ll go up in sympathy or they’ll go up because some people say there’s a better value there and you are seeing some fiscal expansion and monetary expansion there.

Those are reasons for some people to say I’ve got to reallocate. But I think by and large, the U.S. is going to still be the lead. Yeah.

No, I tend to agree. They’re ahead of everybody else in the AI race, it seems, and other sectors as well. And we don’t have to talk about the military prowess here, of course.

David, we need to talk about gold as our last topic. Of course, we touched on it, talking about the Atlanta Fed GDP now numbers. And if we take out the gold imports from Switzerland back to the U.S., the Atlanta Fed GDP number is positive again.

But my point is gold has been having a massive impact generally. It’s actually entered the mainstream media again. Joe Rogan, Elon Musk, Donald Trump have been talking about gold, auditing Fort Knox.

How much momentum is left in the gold price here? And where do you see gold headed? Yeah, I have the $3,400 target. I don’t know whether I raised it last year. No, I think you had it in October as well, $3,400.

Yeah, yeah. I think I raised it in the middle of the year. It was $3,000 was my target.

I raised $3,400. I have said more than once that’s a conservative target. I think it can go higher than that, but that’s kind of taking a step at a time.

Part of the reason I’m figuring it’s conservative is because I have a $75 target on silver. So it’s hard, even though I know silver is going to outperform in the bull market, it’s hard to see silver go from 33 to 75 and gold go 400 points. So I’m guessing if the dollar drops to the extent I’m talking and silver goes where I’m saying gold’s going above 3,400.

But for now, 3,400 is my target. That’s a pretty good move from here. And I think it’s true of the whole metals complex.

I think copper is 460 or wherever it is, and I have a $6 target there. I think you’re going to have a very strong metals market in the next six months. I mean, very strong.

One of those special times when we see a six-month period where metals outperform everything. I have to ask you, David, about the timeframe for copper, because you said you’re predicting the recession towards the end of the year. How does that fit with a $6 price target for copper? My guess is copper fits more with my mid-year saying you could see the stock market run from here to, you know, could be good three or four months.

I think copper will probably top out pretty much with the stock market, whereas the pressed metals probably move beyond that for two or three months, because they have other things that can drive them. Okay. I just needed to clarify because it needs to fit the recession.

Right. Yeah, for sure. On the other side, I think copper has, if I’m right about a global bust, and that means an 80% downside in the stock market and, you know, gold, let’s say silver goes 75, it could come back here or below.

So in other words, all assets can get hit, except maybe treasuries. In that environment, copper could fall from $6 to $1. I mean, so I’m definitely, yes, the recession will take copper back down and a bust will take it down even further.

I just talked one last asset that I think is important is oil. And oil has, you know, I was the bear on the street for a few years while everybody else was, you know, either neutral or positive. And I had a $60 target.

I still have that $60 target for this year. I think we could see it in the second quarter. And I think it could fall below 60.

But ultimately, my target is 30 in the bust. So in the next year, sometime, I think you could see 30. From there, this is probably the bigger story.

From there, the recovery after the bust, you know, this bust is probably a 12 to 18 month time horizon, and I think probably shorter rather than longer. After the bust, we’ll have a recovery cycle. I think commodities will go through the roof.

Oil could go to $500 from $30. That’s an insane move. And gold could go from, let’s say gold goes back from, you know, mid $3,000s back to the breakout at $2,100, let’s say.

From $2,100, I think it could go to $20,000 by early next decade. So commodities will be the story of the next cycle. Now, I just looked at the oil price chart back in 2020, when we’ve actually had negative oil and where it ran to.

So it’s still an impressive move. So massive moves like that are possible. So history has proven that.

David, very, very last question, recession or depression? I use the term bust as a kind of in between the two. It is a period similar in length to a recession, so a year or a little more, but it has the feel of a depression because I think it will be the biggest, potentially the biggest financial crisis in our history. So 2008-9 was really the biggest.

I think this could be bigger financially. From a GDP standpoint, it may not be as big as 2008-9, but from an overall economy standpoint and financial standpoint, I think it’s bigger than 2008-9, but not a depression. Depression is something that’s drawn out.

I think that’s a mid-2030 story. You know my story there. I think we could see a total collapse then because you go from deflation, a deflationary bust next year or in the next year, to hyperinflation by the early 30s that could be 25% in this country.

And that means that interest rates are up at close to 20%. And this is around the world, hyperinflation and interest rates flying. You can’t balance the equation given the $320 trillion of debt in the world system now that I could grow to $450-$500 trillion by the end of this decade.

And just look at our US government debt. How do you service that debt when interest rates go through the roof? You can’t. So there’s going to be defaults all over the place at some point.

The chickens have to come home to roost. It’s a fact. That’s just a fact.

And you could push this down the road as long as you had a printing press. Once you get hyperinflation on top of what we’ve just done in the last 20 years with debt, and not just here but around the world, you lose the printing press if inflation goes double-digit. Once that happens, you have no ability to keep this thing extended.

It can extend for a couple of years because they’ll play all kinds of games and tricks. But I estimate by 2033 to 2035, the whole world system collapses. It’s basically the end of the Ponzi scheme.

That Ponzi scheme has been in place, started gradually after the Great Depression, has been in place for 80 years and will be 90 by the time we get there. And you just can’t keep it going if you don’t have the printing press. No, fantastic.

David, tremendously appreciate your time as always. It’s always great to catch up. Where can we send our viewers, the very few that don’t know of you yet, but where can we send them? Yeah, I’m on Twitter every day.

Sometimes it’s for good and sometimes for bad, but I’m there. My Twitter handle or my ex-handle is at Dave H. Contrarian. So D-A-V-E, not David.

Yeah, at Dave H. Contrarian. I also put out a quarterly letter by subscription, so there’s a cost to it. Anybody interested in details of that can direct message me on X. Fantastic.

David, wonderful conversation. Really, really appreciate your time. We’ll have to get you back soon to see how everything’s playing out, the tariff narrative, the first 100 days in the office.

There’s so much going on. Yeah, this summer could be a good time to look back and say, was he right or was he crazy? No, I can’t wait, to be honest, looking back 15 years from now to see where we’re at and how things have been impacted. We’re living through history, for sure.

Yeah, because I think we’re still trying to figure out the impacts of the first Trump term and what that caused and what the impacts were, and still trying to figure that one out. David, thank you so much, and everybody else, thank you so much for tuning in to Soar Financially. We tremendously appreciate your support, but if you haven’t done so, hit that subscribe button, because I know 80% of you watching haven’t hit that subscribe button.

It helps us out tremendously, reach a wider audience, bring guests like David onto the program, so we really thank you for that. What do you think of the conversation? Leave a comment down below. How do you see things playing out? I do read every single comment.

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Thank you.