TABLE OF CONTENTS

1. Market Recap: Another 20% Market Crash, Recession this Summer; Trump ‘Coup’?

2. CRYPTO: Global ‘Chaos’, Monetary Collapse To Send Bitcoin To $10 Million

3. ECONOMY: Will Tariffs Trigger Banking Collapse? Banks' Top Risks Exposed

4. MARKETS: Recession Around The World: Market Correction Of ‘Cyclical Degree’ Not Over

5. MARKETS: People Don’t Realize ‘How Bad This Could Get’; Gold To $7,000 In Dollar Crisis

6. GOLD: Why Central Banks Are Stockpiling Gold: $3,700 Next

7. GOLD: Debt Crisis Here, Gold Price Explosion Not Over, Here’s How High

8. What To Watch

MARKET RECAP

Latest News. Market volatility eased significantly this week (April 21–25), with the VIX dropping to 24.84 on Friday, down from a 35.75 high at the start of the week, as optimism grew around US-China trade negotiations and major tech earnings outperformed expectations.

The S&P 500 rebounded from an early-week selloff, ending up 5.59% for the week. The Nasdaq surged 6.7%, while the Dow Jones lagged but still gained 2.5%. The rally was fueled by strong results from Alphabet, Tesla, Nvidia, and Meta Platforms, with Tesla (despite a lackluster report) also jumping almost 24% and Alphabet up 1.5%.

The 10-year Treasury yield drifted lower, closing at 4.32% on April 24, compared to 4.42% at the week’s open, as traders increasingly expected Fed rate cuts.

Despite the improving sentiment, the S&P 500 remains down 1.5% for the month, and the Dow is off 4.5% since April began. President Trump’s softer tone on tariffs helped reverse earlier losses, but markets remain sensitive to trade headlines and global economic signals.

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BCA Research's Chief Global Strategist Peter Berezin said that Treasury Secretary Scott Bessent's claims of imminent trade deal progress appeared unlikely, explaining that China had little incentive to negotiate.

“The reality is that China doesn’t have any major incentive to make a deal with the U.S.,” he said. “Chinese exports to the U.S. are like 2 percent of GDP… They can certainly offset that drag with stimulus if they so choose.”

Regarding US economic indicators, Berezin predicted a recession beginning by summer 2025, citing declining job openings, rising delinquency rates, and excess housing inventory.

“We’re going to see a much more difficult labor market in the second quarter, and into the third quarter of this year,” he said. “And most likely a recession that starts by the summer.”

He explained the pattern of rising bond yields alongside a weakening dollar suggested changing investor sentiment toward the dollar.

"The fact that the dollar is weakening now is telling you something important," Berezin said. He explained, "Investors increasingly do not see the dollar as a safe haven asset."

Berezin maintained his S&P 500 year-end target of 4450, predicting a 10% earnings decline. For investors, he said underweighting stocks, holding cash, and favoring defensive sectors was advisable. He explained gold appeared promising while Bitcoin warranted caution due to its market characteristics.

Market Movements

From April 21-25, the following assets experienced dramatic swings in price. Data are up-to-date as of April 25^th at 4pm EST (approximately).

1. Tesla ($TSLA) – up 23.75%

2. Equifax ($EFX) – up 17.71%

3. First Solar ($FSLR) – up 12.18%

4. Globant ($GLOB) – up 14.05%

5. Verizon ($VZ) – down 5.18%

DXY – up 0.39%

Bitcoin – up 11.25%

Gold – down 3.06%

10-year Treasury Yield – down 1.55%

S&P 500 – up 5.59%

Russell 2000 – up 3.85%

USD/Yuan – down 0.21%

CRYPTO: Global ‘Chaos’, Monetary Collapse To Send Bitcoin To $10 Million

Michael Saylor, Executive Chairman of Strategy (formerly MicroStrategy), said The White House crypto summit was a significant moment, noting the president's signing of the Strategic Bitcoin Reserve and the Treasury Department's reversal of anti-crypto banking guidelines.

"The administration is moving faster with innovative programs and decisive, courageous, pro-business, pro-technology, pro-innovation programs than any administration in my lifetime," Saylor said.

On Bitcoin's investment thesis, Saylor said short-term trading strategies were less effective than long-term holding.

"Bitcoin is going to grind up 30 to 60% a year for the next 20 years," he predicted.

Saylor explained Bitcoin's appeal during market uncertainty: "Bitcoin is powered by chaos because chaos will never go away. It's always going to devalue traditional physical and financial capital assets."

Regarding the company's name change from MicroStrategy to Strategy, Saylor said simplicity and recognizability were important. "The design is not complete until there is nothing left to take away," he explained.

Saylor said the United States was positioned to lead global Bitcoin adoption, potentially triggering what he called "a Cambrian explosion in innovation and digital transformation."

ECONOMY: Will Tariffs Trigger Banking Collapse? Banks' Top Risks Exposed

Christopher Whalen, chairman of Whalen Global Advisors, said recent market volatility was a buying opportunity rather than a crisis, explaining "my message to my flock is everyone calm down. Do your homework. Think about what you wanted to buy last year that was too expensive," noting he had recently purchased American Express shares on price dips.

Regarding Trump's trade policies, Whalen explained, "Trump is trying to wind the clock back 75 years and have fair trade." He said the administration would eventually make deals with allies while maintaining sanctions on China and Russia.

On inflation, Whalen predicted it would remain elevated despite some relief in energy prices. He explained that the Federal Reserve faced conflicting economic signals, with Powell acknowledging that tariffs would cause "higher inflation and slower growth."

Whalen said banks had "way too much capital" to face serious problems, with current pain concentrated in commercial real estate rather than consumer loans. "If you compare the pain for banks today, it's on the commercial side, not the consumer side," he said.

For investors seeking safety, Whalen said gold was advisable, which he predicted would continue rising due to limited supply and increased central bank buying. He explained fears of economic collapse were unfounded but said "the whole architecture that came out of World War II has got to be revised."

MARKETS: Recession Around The World: Market Correction Of ‘Cyclical Degree’ Not Over

Felix Zulauf, founder of Zulauf Consulting, predicted in December 2024 that policy uncertainty would create market volatility in early 2025, which had materialized with Trump's tariff policies.

“All the bad stuff that I have been expecting late last year is really now in the price at the lows of April 7,” Zulauf said, referring to the recent market correction of approximately 20%.

Zulauf said the world economy faced a recession due to policy uncertainty, reduced government spending, and weakening consumer confidence. He explained structural changes in global finance, particularly concerning the U.S. dollar's status.

"The U.S. dollar has lost its status that it once had as the major reserve currency," Zulauf explained, pointing to foreign investors selling U.S. assets and seeking alternatives like gold.

For investors, Zulauf said there were limited safe havens in the current environment. He predicted gold would reach a "buying climax" before a significant correction, and explained long-term bonds were "much more risky than the stock market."

Looking beyond 2025, Zulauf predicted recovery through fiscal stimulus, monetary easing, and higher inflation, with the S&P 500 potentially reaching 7,500 by 2027.

MARKETS: People Don’t Realize ‘How Bad This Could Get’; Gold To $7,000 In Dollar Crisis

Luke Groman, Founder & President of Forest for the Trees, and James Thorne, Chief Market Strategist at Wellington-Altus Private Wealth, discussed market shifts as the S&P 500 dropped 3% and gold surged above $3,400. They analyzed the dollar's status amid Trump's tariff policies.

Groman said a "tectonic sea change" was occurring in global finance, pointing to Trump's America First investment policy memo. "They're saying, 'Listen, take your money, invest in our factories and infrastructure and workforce or put it in gold, but our deficits are no longer going to be allowed to accrue in our financial markets without a tax,'" he explained.

Thorne said this represented a rebalancing of global trade imbalances. "The global economy is closed, which means deficits and surpluses must equal," he explained, adding that the U.S. had transformed "from a creditor to a debtor nation."

Both experts said U.S. debt sustainability was concerning, with Groman explaining that interest expenses plus entitlements now exceeded government receipts. "That's junk. That's highly speculative junk. It's not AAA," he said.

On investments, Groman said gold and Treasury bills were advisable, predicting gold could reach $7,000. Thorne agreed, predicting $5,000 gold by 2028 while explaining "negative rates" would be a necessary policy response.

GOLD: Why Central Banks Are Stockpiling Gold: $3,700 Next

Nicky Shiels, Head of Metal Strategy at MKS Pamp, discussed gold's historic price surge beyond $3,400. She explained this primarily related to the global de-risking of US assets amid the Trump administration's trade policies.

"Right now, there is no asset class correlated with gold. It is on its trajectory, and a large part of that is because of central bank demand," said Shiels.

The analyst predicted gold could reach $3,700 in 2025, citing the inflation-adjusted historic high of $3,580 as the next target. Shiels explained an unusual market dynamic existed where gold prices rose alongside bond yields, breaking traditional correlation patterns.

This disconnection stemmed from investors questioning US Treasuries as safe havens. "It is the political regime and the uncertainty around policy," Shiels explained regarding dollar weakness despite rising yields.

Shiels predicted a less substantial increase for silver, projecting a $32-35 range. She explained silver's underperformance relative to gold often indicated recession concerns.

Regarding potential risks, Shiels said trade war implications outweighed any benefits from geopolitical de-escalation in Ukraine or elsewhere, creating what she called an "uncertainty chaos premium" for gold.

GOLD: Debt Crisis Here, Gold Price Explosion Not Over, Here’s How High

CPM Group's Managing Director Jeff Christian analyzed gold's record surge beyond $3,400, explaining it primarily related to market reactions following Trump's April 2nd announcement of global tariffs. Christian had updated his 2025 gold price projection to $2,956, up $250 from six months ago.

Christian explained an unusual market divergence existed where gold rose while bonds fell and the dollar weakened. "Gold is outperforming stocks, bonds, silver, copper, and oil because gold is that safe haven everyone runs to in economic tough times," he explained.

Regarding recession concerns, Christian said major institutions now aligned with his earlier predictions. "Goldman Sachs says it's a 46% chance of a recession. JP Morgan says it's 50%," he said.

On Trump's economic policies, Christian described them and said the president's inflation claims were incorrect. He predicted that proposed tariffs could affect the federal deficit, potentially adding "$580 billion a year over the next 10 years."

Christian predicted silver would rise but would likely not outperform gold, projecting an average price of $32-33 for 2025. He explained China's rare earth export restrictions represented a response to US trade policies.

WHAT TO WATCH

Friday, May 2, 2025

• Earnings: Berkshire Hathaway, ExxonMobile, Chevron, Apollo

• U.S. Unemployment Rate Report - Monthly economic indicator published by the Bureau of Labor Statistics that measures the percentage of the total labor force that is unemployed but actively seeking employment

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TABLE OF CONTENTS

1. Market Recap: Former Fed President Tom Hoenig On Trump’s Trade War

2. EQUITIES: Doug Ramsey says the bottom has not yet been hit

3. EQUITIES: Expect a ‘huge plummet’ in all assets, says Chris Vermeulen

4. EQUITIES: Harry Dent is predicting a 50% market crash this summer

5. ECONOMY: Matt Piepenburg on why the $300 trillion debt crisis is here

6. ECONOMY: ‘Things are just warming up’ says Steve Hanke

7. BONDS: DoubleLine’s Bill Campbell on whether bonds are breaking

8. ENERGY: Oil will crash to $50 says Doomberg

9. CRYPTO: Matt Sigel on how Bitcoin gets to $450k by 2028

10. What To Watch

MARKET RECAP

Latest News. Market volatility this week (April 11th-17th) has cooled, with the VIX down 43 percent from its year-to-date high of 52.33 on April 8th. Traders have been encouraged by rosier outlooks on the White House’s trade war disputes.

The S&P was up 0.5 percent, but the Nasdaq was down 0.4 percent and the Dow Jones traded at 0.9 percent below its week-ago level. The 10-year Treasury yield has recovered slightly, down to 4.3 percent from 4.5 percent a week ago.

However, the VIX is still near 30, and remains at elevated levels. President Trump has escalated tensions with Beijing, hiking tariffs on Chinese goods to 245 percent, up from 145 percent.

Tom Hoenig, Distinguished Senior Fellow at the Mercatus Center and former President of the Kansas City Fed, said that trade wars historically do not end well.

“We are at risk, around these trade wars,” he said. “I understand the desire to get your trade balance improved, but I think doing it in… a hammer-like fashion is probably short-term in its ability to deliver any real long-term outcomes. You may get some immediate effects, but in the long-run, I think our economy and [China’s] economy, both will be harmed.”

Hoenig predicted that Trump’s trade war escalation with China could impact the status of the U.S. dollar.

“One of the things the United States has to be sensitive to is, it has a huge debt to deal with, and China holds a lot of that, the rest of the world holds a lot of that,” he said. “So how they treat those countries may affect their willingness to hold dollars, and that affects our financing of our own national debt.”

When it comes to the effects of the global trade war on the U.S., Hoenig said that the unemployment rate would rise and a recession is possible.

“It’s like any tax increase,” he explained. “There are a lot of companies that import from around the world, and with higher tariffs their cost of production goes up — the prices go up, demand goes down, they have to lay off [workers]. People’s income falls. It’s a typical recession scenario.”

Market Movements

From April 14-17, the following assets experienced dramatic swings in price. Data are up-to-date as of April 17th at 4pm EST (approximately). Markets closed Friday, April 18th.

1. United Health Group - down 23.68%

2. Nvidia - down 11.06%

3. Tesla - down 6.58%

4. Apple - down 6.84%

5. Meta - down 9.83%

DXY - down 0.64%.

Bitcoin - up 1.44%.

Gold - up 2.9%.

10-year Treasury yield - down 0.91%.

S&P 500 - down 2.93%.

Russell 2000 - down 2.77%.

USD/Yuan - up 0.31%.

EQUITIES:
MARKET ‘REVOLT’ AS FISCAL DISASTER LOOMS
Doug Ramsey, April 18, 2025

Doug Ramsey, CIO of The Leuthold Group, said that the market is not near its bottom yet.

“What we’ve seen is the first leg or two down of a cyclical bear market,” he said. “The economy, by many measures, has been growing by rates and exhibiting characteristics that, for a while, we have called pre-recessionary. One example is the slowdown in job growth… The year-over-year growth rate in non-farm payroll employment has slowed to 1.2 percent.”

He explained that there is a close correlation between market returns and the unemployment rate.

“The entire bull market, dating back to October of 2022 through - and I think — the ending was February 19th of this year… took place in the lowest unemployment bucket,” he said. “There’s only been one other cycle like that that we’ve seen historically and it was also very brief and not very powerful, in terms of the total magnitude… The best returns from the stock market generally come after stocks and the economy have been very well liquidated.”

Ramsey said that “the stock market is not sniffing out an economic expansion” this year.

“It’s always been true that asset prices have played a role, not just in anticipating the direction of the economy, but they also play a role in the economic outcomes,” he said. “We’ve had this negative wealth shock we’ve taken in the U.S. We’ve taken the stock market from a little over two times the size of the economy… just two months ago. It went down to 165 percent in a little over a month.”

EQUITIES:
EXPECT ‘HUGE PLUMMET’ IN ALL ASSETS
Chris Vermeulen, April 15, 2025

Chris Vermeulen, Chief Market Strategist of The Technical Traders, said that he had seen bearish signals for the market.

“As a long-term investor, you don’t want to be holding stocks in general,” he said. “When the tide goes down, almost all stocks go down with it. In fact, during a bear market in equities and an economic downturn, almost everything goes down, and sometimes cash is a play. You want to get out of pretty much most other assets.”

Vermeulen said that he expected a “huge plummet” in all assets.

“I believe this so-called dead cat bounce, that I believe in, is going to be a bunch of bars of the market… just trading sideways and slightly higher,” he said, pointing to his charts. “And then eventually, it’s going to roll over and break this neckline. And when it breaks the decline, that is when we see a huge plummet.”

Using the pandemic-era market lows as a benchmark, Vermeulen said that he foresaw an S&P pullback of up to 30 percent.

“We could see a pullback to 4,600, all the way down to 4,100,” he predicted. “In reality, from the ultimate highs, we’re looking at about a 25 to roughly 30 percent pullback.”

However, Vermeulen said that in a worst case scenario, the market could crash by up to 55 percent.

“This is a big pullback, but it’s very similar to what we saw back when the tech bubble burst, the financial crisis burst,” he explained. “We’re going to have something else burst, whatever it’ll be this time, but there is a lot of downside.”

EQUITIES:
50% MARKET CRASH BY SUMMER
Harry Dent, April 14, 2025

Harry Dent, Founder of HS Dent, said that he expected a 50 percent pullback in the market by this summer, due to trade war fears.

“I’ve analyzed every bubble in history,” he explained. “40 to 50 percent is typical in the first two to four months, that first crash — and that’s what I think we’re likely in.”

He explained that the stock market had been buttressed by fiscal and monetary stimulus, which had artificially inflated asset values.

“We had the greatest boom in history,” he said. “They’ve just been printing money and running huge deficits… I mean, the economy is pretty good [but] it’s good because they poured $27 trillion in it, which by the way, when I compare that to GDP, would’ve been enough for us to grow just on the stimulus at 6 to 7 percent a year.”

Dent said that President Trump’s tariffs are the “perfect trigger” to deflate the stock market bubble he said had been growing since 2008.

“We need to see a crash,” he said. “I expect… that this first crash takes us down, into the summer, 50 percent from the top on the Nasdaq and QQ Nasdaq 100, and 40 percent on the S&P 500. So my message is, folks, it makes sense to sit through most corrections. This is not one of them.”

Long-dated treasuries are likely to perform well during the crash, said Dent.

“It’s the treasury bonds that do the best in the end,” he said. “In 2008, it was TLT that rallied 40 percent in the second half of 2008… I tell people to be in treasury bonds instead of cash, because they will tend to go up modestly at first in a downturn, but when it really gets bad, as bad as I’m thinking, they do better and nothing else.”

ECONOMY:
$300 TRILLION ‘DEBT CRISIS’ IS HERE
Matt Piepenburg, April 16, 2025

Matt Piepenburg, Partner of Von Greyerz AG, said that the U.S. is currently facing a debt crisis.

“We have a debt crisis,” he said. “… We are at unprecedented debt levels. We are running out of options. We’re in so much debt, we can’t inflation by raising rates because we can’t afford our own rate hikes, and we can’t even organize or initiate a trade war.”

When it comes to the trade war, Piepenburg said that its success hinges on how patient the American public are.

“It’s a laudable and long-term goal… We definitely need to re-shore manufacturing,” said Piepenburg. “Will the American voter population and small businesses be able to wait that long? That’s to be determined, but I think China and the BRICS and others are going to find ways not just to retaliate, but to get creative and not need America as much anymore.”

Piepenburg said that the world is becoming increasingly multipolar, and that this would affect economic relations between countries.

“China… if they’re hit with 145 percent tariffs from the U.S., obviously that market is shut down to them, so they’re going to retaliate,” he said. “They’re going to go to other trading partners, they’re going to look to [the] EU… There is dysfunction coming: alliance, trust with the U.S, the EU just saw a temporary 20 percent tariff.”

ECONOMY:
’THINGS ARE JUST WARMING UP’
Steve Hanke, April 12, 2025

Steve Hanke, Professor of Applied Economics at Johns Hopkins University, said that recent economic events, such as the U.S.’s slowing money supply growth and escalating trade tensions, are similar to the lead-up to The Great Depression.

“[In] the Great Depression, you had a two-stage thing,” he explained. “The money supply started to contract, the economy starts going in the tank — and then you had the Smoot-Hawley Tariff… but I don’t think it’s as bad as what Trump is doing. The [Smoot-Hawley tariff] rates weren’t as high, and they were much more certain.”

Hanke said that a recession is likely to occur, due to the slowing money supply and higher tariffs.

“The Trump tariff… is really throwing a lot of sand in the gear,” he said. “That will just make the slowdown even worse and probably we’ll have a… technical recession.”

Because of policy uncertainty, there had been a failed treasury auction, which caused Trump to pause his tariff hikes, said Hanke.

“Usually, primary dealers and foreign central banks buy around 15-16 percent of each one of the supply of treasuries at the auction,” he explained. “This week, they bought like 1.5 percent only. And within minutes after that, Trump called for a 90-day pause in the tariffs… That auction failure, it was a complete failure. And I’m certain Scott Bessent, the Secretary of The Treasury, pressed the panic button.”

BONDS:
BOND MARKET BREAKING?
Bill Campbell, April 16, 2025

Bill Campbell, Portfolio Manager for DoubleLine’s Global Bond Strategy, said that there is a shift away from the U.S. dollar dominance, and towards a multipolar financial system.

“Due to a large political shift… we had wealth inequality reaching historic levels and we’ve seen strong polarization of many political parties, not just in the U.S.,” he said. “The net impact of that has been a move towards more protectionism, and the U.S. stepping back from its prior position as a global leader as far as providing security guarantees, and also the free exchange of the U.S. dollar.”

He identified the 2022 sanctions on Russia and expulsion of Russia from the SWIFT system as a watershed moment in the shift towards the multipolar world order.

“When the U.S. sanctioned Russia… and pull them off of SWIFT, froze their FX reserves, and really weaponized the U.S. dollar based financial system, that kind of started this move,” he said. “But… the protectionism and trying to adjust global supply chains is now speeding this process up.”

When it comes to asset allocation, Campbell said that investors should be cautious about policy uncertainty.

“For the near term, the outlook is highly uncertain,” he said. “You may have to wait a little bit for the front end of the curve trade to play out, but I ultimately think the belly to the front end — we should be reducing duration in portfolios.”

ENERGY:
OIL WILL COLLAPSE, HOW LOW WILL IT GO?
Doomberg, April 17, 2025

Doomberg, Head Writer of , said that oil prices will fall to $50 per barrel under the Trump administration.

“Oil is going to $50,” he said, commenting on the recent downward movement in oil prices. “Trump wants $50 oil. The Saudis have agreed. There was clearly a deal with OPEC [The Organization of Petroleum Exporting Countries]… In my view, it’s the end of OPEC as a functioning cartel that has the ability to manipulate crude oil prices higher.”

Doomberg said that The White House had likely negotiated a deal with Saudi Arabia and Russia to allow for lower oil prices, sidelining other OPEC countries in the process.

“Russia, Saudi Arabia, and the United States have been engaged in high-stakes diplomacy for weeks,” he explained. “Those are the three largest oil and gas producers in the world… Something was decided behind closed doors… and I think Saudi Arabia put the knife to OPEC.”

However, Doomberg was skeptical of Goldman Sachs’s prediction that oil could crash as low as $40 per barrel in an “extreme” scenario. He said that this could only happen if there is a regime chance in Venezuela, which has some the world’s largest proven oil and gas reserves.

“[Venezuela] used to produce 4 million barrels a day,” he said. “It barely produces 1 [million] today. With the most advanced technology of the Chevrons and the super majors are assembling right next door in Guyana, if we see a regime change [in Venezuela]… that would be pretty bearish for oil prices.”

He added, “We are not condoning [regime change]. We don’t think this is the proper practice of foreign policy. There’s all manner of ethical issues and national self-determination issues but those have never mattered in the past [to the U.S.].”

CRYPTO:
BITCOIN WILL REBOUND TO $180K
Matthew Sigel, April 14, 2025

Matt Sigel, VanEck’s Head of Digital Assets Research, said that Bitcoin could reach $180k by Q4 of 2025.

“Assuming that Bitcoin can get through this period of uncertainty, which we think is macro-driven, interest rates [will] come down, the Fed gets a little easier, [then] we think the second half of the year should be quite positive,” he said. “Bitcoin could reach $180k per coin.”

Sigel explained that his price prediction was grounded in prior patterns of Bitcoin price movements.

“[Previous Bitcoin cycles] have tended to get smaller over time,” he explained. “The previous smallest Bitcoin cycle was a 20X return from the trough to the peak. If we can do a 10X return this cycle, that would imply $180k.”

In terms of a medium-term outlook, Sigel said that Bitcoin could reach as high as $450k per coin.

“We benchmark Bitcoin against gold, specifically the 50 percent of the gold market that is more speculative in nature,” he said. “If Bitcoin can reach the 50 percent of gold that’s speculative in nature, that would imply roughly $450 per coin… That could be maybe a 2027 [or] 2028 [target of] $450k per coin.”

TABLE OF CONTENTS

1. MARKET RECAP: Former Fed President Jeff Lacker on Trump tariffs

2. EQUITIES: Trivariate Research’s Adam Parker on the market crash

3. EQUITIES: Michael Gayed on what to buy when the market bottoms

4. EQUITIES: Clem Chambers says “there is no bottom” in this market

5. GEOPOLITICS: Former CIA agent Ray McGovern on why Iran is not a threat

6. What To Watch

MARKET RECAP

Latest News. The past week was one of the most volatile for markets in American financial history. The Nasdaq, the S&P 500, and the Dow Jones ended the week up 5 percent or higher, after having shed trillions of dollars in market capitalization in the prior week.

All three indices fell after President Trump increased tariffs on over 180 countries on April 2nd. The S&P alone erased $6 trillion in value.

On April 9th, Trump abruptly paused tariff increases for 90 days. Most countries will continue to be charged 10 percent duties, but this is a significant decrease from Trump’s previously-proposed tariff rates.

After Trump’s tariff pause, markets rallied, ending the week higher. Treasury Secretary Scott Bessent praised the president’s move, saying that more countries are now willing to negotiate trade deals.

One exception to the tariff pause is China, which will continue to be charged a 125 percent tariff, according to the White House.

Jeff Lacker, Senior Affiliated Scholar at the Mercatus Center and Former President of The Richmond Fed, said that The White House’s trade policy has hampered its economic objectives.

“Either the administration has had a secret plan to do this in order to induce negotiations, or… to reduce trade deficits,” he said. “Now that they’ve sort of revealed that they’re going to negotiate after having said, well no, they’re not going to negotiate… they’ve sort of undercut their own credibility.”

Lacker said that Trump’s trade policy could adversely affect long-term trade relations with the U.S.’s partners.

“[This is] bound to lead other countries, that still favour lower trade barriers, to combine with each other into trading blocs,” he explained. “They’re going to want to find partners to trade more freely with, I think.”

Although Lacker said that the U.S. dollar’s role as world reserve currency is not currently under threat, further market volatility could undermine the dollar’s status.

“The widespread invoicing in U.S. dollars, I think, is going to continue to bolster the value of the dollar as a reserve currency,” he said. “Threats to its [are] kind of a little distant still, but yeah if this… whipsawing of markets persists I think that that could erode it more rapidly over time than it would otherwise erode.”

Market Movements

From April 4th to April 11th, the following assets experienced dramatic swings in price. Data are up-to-date as of April 11th at 9pm ET (approximate).

1. Newsmax — down 49.2 percent.

2. Papa John’s — down 12.3 percent.

3. Palantir Technologies — up 19.6 percent.

4. Newmont — up 21.2 percent.

5. Hecla Mining — up 22.5 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — down 3.1 percent.

Bitcoin — up 1.2 percent.

Gold — up 4.1 percent.

10-year Treasury yield — up 12.8 percent.

S&P 500 — up 5.7 percent.

Russell 2000 — up 1.8 percent.

USD/yuan — up 0.4 percent.

EQUITIES:
MARKET CRASH STARTING, HERE’S WHAT’S NEXT
Adam Parker, April 7, 2025

Adam Parker, Founder of Trivariate Research, said that the damage from The White House’s tariffs may prevent a bullish outlook on markets for the rest of the year.

“At this point it just feels very skewed to the negative, in terms of GDP is worse than people thought, the earnings haven’t come down that much, and stocks aren’t acting great when they miss,” he said. “That cocktail makes me still cautious about taking a lot of risk for the next two or three weeks at least.”

Parker said that earnings growth is slowing, suggesting that markets could still reach a bottom for this year.

“I don’t think the low is in,” he said. “It’s always hard to make a short-term call. The administration could say something that changes course here pretty soon… but right now, I think the consensus is the Trump puts a lot lower.”

In terms of sector recommendations, Parker said that healthcare looks promising.

“If you look out, medium to long term, there are a lot of inefficiencies in the U.S. healthcare system,” he said. “In the U.S., when you go to a doctor, they still hand you a clipboard with a pen. That should be melting your motherboard on technological inefficiency… The ability to predict customer behaviour, predict employee behaviour, and drive up higher margins should be really high for this sector.”

If a recession occurs, Parker said that healthcare, staples, and utilities do well on a relative basis. He added that a market rally would favour the tech sector over others.

“We analyzed the last twenty times the S&P went down 10 percent or more, and then we looked at the 20 recoveries three months after that,” he said. “In 19 of the 20, technology was up, and on average tech performed best in those recoveries.”

EQUITIES:
BLACK MONDAY 2.0? BLOODBATH IN MARKETS
Michael Gayed, April 7, 2025

Michael Gayed, Publisher of , said that the recent market crash would cause a flight to treasuries, which could in turn allow the U.S. government to refinance its debt at lower yields.

“When you look at major declines in equities, long-duration treasury yields drop, because there’s this moment of panic among investors,” he said. “If you want to get yields lower to refinance these trillions of dollars of U.S. government debt, one way to do it is to make the S&P suddenly look like it’s crashing.”

Gayed said that market lows are difficult to identify, but that there are telltale signs in credit market data.

“I think typically you can identify when you’re close to [a market low] when credit spreads are going through a multi-standard deviation spread widening… which then forces the Fed to act, step in, and liquify,” he said. “You’re not there yet. Credit spreads are still very much disconnected from the magnitude of the S&P 500’s decline.”

Gayed said that small caps would be the next “generational buying opportunity” when markets crash.

“They’ll crash stocks to save bonds,” he said. “The next phase of that is, you save bonds, you save small caps… I think small caps, coming out of this, will be saved, because small caps have been held back by higher rates.”

EQUITIES:
’THERE’S NO BOTTOM TO THIS’ MARKET CRASH
Clem Chambers, April 5, 2025

Clem Chambers, Founder of ANewFN, said that “there’s no bottom” to the latest market crash sparked by Trump’s tariffs.

“A revolutionary American government, that’s the worst possible thing you could possibly have for the market,” he said. “There’s no bottom to this at the moment.”

Chambers said the White House’s hints at leaving NATO threatened the U.S.’s role as a global superpower.

“Nobody’s going to be buying America,” he said. “It’s going to be difficult to spend billions on American equipment in Europe when you’re being cut loose… Europe is now going to be forced to become the definitive superpower, because there are more Europeans than there are Americans, and the GDP per head is very similar.”

Given the tumultuous markets, Chambers said that investors who want to “surf in the hurricane” should allocate to cash, defence stocks, agricultural equities, banks, and precious metals.

“Precious metals… will probably get hurt in the next week or two, because money is just going to come out of the market, and everything is going to fall,” he said. “You sell your gold to make your margin calls… But after that, then I think the precious metals will do very well, and defence stocks will do very well, and banks will do very well weirdly enough — and agricultural stocks will do really well.”

However, Chambers warned that luxury goods and tech would fare poorly.

“Anybody selling Ferraris is going to have a hard time,” he predicted. “You wouldn’t want to be in Louis Vuitton, for example. That’s the sort of thing that’s going to come down like a lead balloon. And all the Mag 7, they’re going to get crushed.”

GEOPOLITICS:
MORE DANGEROUS THAN WORLD WAR 3?
Ray McGovern, April 9, 2025

Ray McGovern, former CIA analyst and Chair of the National Intelligence Estimates, warned that if the United States gets embroiled in a war with Iran, it could lead to World War 3.

“You have a regional capability of this thing blowing out of all proportion,” he said. “Israel, of course has… about 200 nuclear weapons, some of them really small ones. And so the nuclear genie could be let out of the bottle in a last resort because there’s no way that the Israelis, even with U.S. help, can subjugate Iran in the way that the two of them did Iraq back in 2003.”

McGovern said that Iran does not pose a national security threat to the United States. He said that Iran lacks a nuclear weapon, and is not currently developing one.

“The annual threat assessment, barely a week old, by all U.S. intelligence agencies, reads this way: Iran has continued to avoid and has stopped its work on a nuclear weapon as of 2003,” explained McGovern. “The [Iranian] Supreme Leader has also said that the Iranians are not going to reverse that decision that he himself made in 2003.”

The only threat Iran potentially poses is to Israel, added McGovern.

“The Israelis perceive that Iran might pose a threat to them, and so they’re trying to eliminate that threat,” he said.

If a war with Iran occurs, McGovern said that Iran has the ability to both shut down The Strait of Hormuz, an economically important seaway, and to use hypersonic missiles.

“These are missiles that there is no air defence or missile defence against,” said McGovern. “U.S. troops in Iraq [and Syria]… are extremely vulnerable, and I would say they will probably be hit as well [in case of war], if not directly by Iran then by Iran’s surrogates.”

WHAT TO WATCH

Wednesday, April 16, 2025

• Retail Sales — the total receipts of retail stores for March.

• Bank of Canada Interest Rate Decision — The Bank of Canada will make a decision on its key policy rate.

Thursday, April 17, 2025

• Housing Starts — the number of new residential construction projects begun in March.

• ECB Interest Rate Decision — The European Central Bank will make a decision on its key policy rate.

TABLE OF CONTENTS

1. Market Recap: Daron Acemoglu on the real threat to American prosperity

2. EQUITIES: Ted Oakley on the recent market turmoil

3. EQUITIES: Chris Vermeulen on why a 50 percent correction is coming

4. EQUITIES: Milton Berg on why the market is nearing the bottom

5. ECONOMY: DOGE should give a $5k dividend check, says James Fishback

6. What To Watch

MARKET RECAP

Latest News. On Wednesday, March 19th, the Federal Reserve held its key interest rate within the range of 4 to 4.25 percent.

Fed Chair Jerome Powell said at a same-day news conference, “we think it’s a good time for us to await further clarity,” as the U.S. economy contends with tariffs, deportations, and rapid geopolitical changes.

The Fed’s move was not as hawkish as some economists had feared, and stock markets responded positively. The S&P was up 1.1 percent, and the Dow rose 0.9 percent in intraday trading. The 10-year Treasury fell to 4.257 percent, down from Tuesday’s close of 4.28 percent.

The relief to the stock market was a welcome change, after months of downward action. The S&P is down 3.4 percent year-to-date, and the Nasdaq is down 7.8 percent over the same period.

In other news, Donald Trump became the first sitting U.S. president to address a cryptocurrency conference on Thursday, March 20th, after he virtually spoke to The Blockworks Digital Asset Summit (DAS) in New York City.

Crypto prices fell following Trump’s speech, but have since rallied. Bitcoin finished the week up 3 percent, and Ether rose 6 percent from last Friday to March 21st.

During his speech, Trump vowed that the U.S. would dominate the crypto sector, and that dollar-backed stablecoins would “expand the dominance of the U.S. dollar.”

However, Nobel laureate and MIT Professor of Economics, Daron Acemoglu, said that Trump — despite The White House’s optimistic messaging — risks ending U.S. dominance in the global economy.

Referring to his recent Financial Times op-ed on the threats to American prosperity, Acemoglu said, “I was very worried about the direction that the U.S. economy is taking under President Trump.”

In his Financial Times article, Acemoglu pointed to tariffs that Trump has implemented, suggesting they could cause uncertainty, harm U.S. manufacturing, and spark inflation.

“I wanted to warn against some unthinkable outcome within the next two decades that could happen out of this, in particular loss of U.S. economy dynamism and end of U.S. economic leadership at the global level,” he explained. “My guess would be that those, if they come to pass, would be caused by a combination of the institutional damage that the Trump administration is causing, plus the tech industry.”

Acemoglu said that the U.S. tech industry could lose ground to China, due to inefficient consolidation and worse research support.

“Big tech companies in the United States… pour 100s of millions of dollars, sometimes billions of dollars, into new projects, new ventures, research and development, various types of innovative activities,” he explained. “But they’re not very good at it… The U.S. has an advantage, but if it doesn’t maintain its support for academic research, academic independence, if it doesn’t prevent complete consolidation of the industry, [then] that’s in danger as well.”

Market Movements

From March 14th to March 21st, the following assets experienced dramatic swings in price. Data are up-to-date as of March 21st at 9pm ET (approximate).

1. Virgin Galactic — up 26.9 percent.

2. Guess? Inc. — up 23.4 percent.

3. Celsius — up 21.6 percent.

4. Reddit — down 9.8 percent.

5. 23andMe Holdings — down 6.8 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — up 0.4 percent.

Bitcoin — up 3.1 percent.

Gold — up 1 percent.

10-year Treasury yield — down 1.1 percent.

S&P 500 — up 0.5 percent.

Russell 2000 — up 0.6 percent.

USD/yuan — up 0.2 percent.

EQUITIES:
’STAGFLATION’ CRISIS: HOW BAD IT CAN GET
Ted Oakley, March 19, 2025

Ted Oakley, Founder of Oxbow Advisors, said that the recent volatility in markets was caused by uncertainty, especially around President Trump’s new trade policy.

“I think [CEOs] don’t know what to do,” said Oakley. “If you’re saying well, you’re going to pay X today, but we’ll change it and you’ll pay half-X tomorrow — oh by the way, four days from now maybe you’re paying 2X… companies have a very hard time with that.”

Oakley said that his firm had taken a “defensive” position amidst this uncertainty, investing in U.S. treasuries to manage risk. He added that he was not impressed with current market valuations.

“We’re very high on current earnings, like 24 times,” he said, referring to markets. “You’re still expensive in this marketplace… People are very, very, highly exposed to stocks — the most I’ve ever seen, really, I have to tell you.”

In response to Trump’s statement that the economy would undergo a “period of transition,” Oakley said that The President is trying to echo Ronald Reagan.

“When Reagan came in, the first 44 days the markets were up, until he got inaugurated, and then we went into basically an 18-month bear market,” said Oakley. “It was over in August of ‘82, but maybe he [Trump] is taking a page out of that.”

Responding to the recent rally in gold, Oakley said that it was driven by dissatisfaction with the U.S. dollar.

“The rest of the world does not want to own the dollar,” he said. “I think they’re saying, you know what, when we have extra reserves we’re going to use a lot of that money to buy gold.”

EQUITIES:
’50% PULLBACK’ IS COMING
Chris Vermeulen, March 10, 2025

Chris Vermeulen, Chief Market Strategist at TheTechnicalTraders.com, said that “today is definitely a panic-selling kind of day,” referring to the March 10th market correction, which saw the Dow fall nearly 900 points.

“This [market] is going back into 2023, 2022 levels,” he said. “There’s a lot of fear. If there’s too much fear, it means a downtrend is likely starting.”

However, Vermeulen said that in the short-term, the selling pressure would cease, and there would be a few more upward trends.

“Overall, most of the downside is done,” he predicted. “We should have some type of bounce up into, like, the March 24th-March 25th area.”

Vermeulen said that, “I think we need a great big correction in the market… we’re primed and ready for another 50+ percent selloff.”

When it comes to asset allocation, Vermeuelen cautioned that gold would experience the same downward action as stocks, and that “there is no safe haven when it’s full-on panic [in markets].”

“Sometimes you need to sit in cash and just wait for an opportunity,” he said. “Gold will collapse with the stock market when there’s mass fear.”

He added that he has bought inverse ETFs, which are negatively correlated with broad market activity.

“As the market just keeps having these waves to the downside… we hop on an inverse ETF,” he said. “As everyone is losing their accounts, our accounts are shooting higher on those days.”

EQUITIES:
BIGGER BUBBLE CRASH AWAITS
Milton Berg, March 8, 2025

Milton Berg, Founder of MB Advisors, said that the market has bottomed, or is at least close to a bottom, for now.

“By virtue of the fact that the S&P 600 peaked back in November, and the 10-day rate of change now is the weakest in 350 days… is another reason to suggest we might be at a low,” he said. “Just based on history, you have to expect that what we’re seeing now is actually the panic that you see at the end of a low, rather than something you face before a crash.”

He added that if a rally were to occur, it would be “very strong,” but short-lived.

“It could be a 5 percent rally or 10 percent rally in small caps,” he said. “I’d say [it’s] likely for a short-term rally [to occur]… It may take some indices back up to above the previous highs on a minor basis, but at this point I don’t think that we’re going to see a continuation of the bull market.”

In terms of asset allocation, Berg predicted that an economic slowdown would manifest, which would benefit long-dated bonds.

“I’m bullish on bonds at this moment,” he said. “We think stocks will go down for the same reason bonds will do well, because the slow down or recession historically is bad for stocks and good for bonds. On the other hand, when you have a government trying to save money, trying to pay down debt, that is certainly good for bonds.”

Berg said that gold, a common safe haven asset, had topped, despite surging past $3,000 recently to reach new all-time highs.

“The argument that gold is going to do well doesn’t hold water,” he said, pointing to various charts comparing gold to housing and economic indices. “You can’t argue that gold is cheap… not relative to CPI, not relative to even housing prices. It’s not undervalued.”

ECONOMY:
$5k DOGE DIVIDEND CHECK
James Fishback, March 12, 2025

James Fishback, CEO of Azoria Partners, explained his DOGE Dividend Check idea as incentivizing “millions of Americans to report waste in government spending that they themselves see.”

The DOGE Dividend proposal, as Fishback conceived of it, involves taking 20 percent of the funds that the Department of Government Efficiency (DOGE) saves, and transferring it back to taxpayers in the form of a check.

“We think DOGE can save $2 trillion over the next couple of years,” said Fishback. “If you take 20 percent of that, as the DOGE Dividend calls for, and send it back to taxpayers… you end up with a check of roughly $5,000 to each taxpaying household.”

He added that the savings would be sent back regardless of how much DOGE actually manages to cut from government spending.

“If the savings are only $1 trillion, which I think is awfully low, the check goes from $5,000 to $2,500,” he explained. “If the savings are only $500 billion… then the [check] is only $1,250.”

Fishback dismissed concerns that these DOGE Dividend checks would cause inflation through higher household spending.

“Polling data from CNBC and JL Partners suggests that 70-75 percent of a DOGE Dividend check like this would not be spent, but would be used to pay down existing debt, and to reorganize household finances,” he said. “If you get a $5,000 check and use that to pay down your credit card bill, or your auto loan payment, that is not inflationary. In fact, paying down debt… is automatically deflationary because it takes money out of the economy.”

WHAT TO WATCH

Tuesday, March 25, 2025

• S&P/Case-Shiller Home Price Index — A monthly home price index across major U.S. metropolitan areas, tracking repeat sales of single-family houses.

• Building Permits — The number of building permits approved in the previous month.

Thursday, March 27, 2025

• Initial Jobless Claims — the number of individuals filing for unemployment benefits for the first time in the prior week.

• Pending Home Sales — measures the number of homes under contract to be sold but not yet closed, over the prior month.

Friday, March 28, 2025

• Personal Consumption Expenditures (PCE) Index — measures the level of consumer prices of goods and services over the prior month.

TABLE OF CONTENTS

1. Market Recap: Bill Smead on why the S&P 500 is in a ‘doomed position’

2. EQUITIES: Jim Bianco on whether the market downturn is just starting

3. ECONOMY: The economy is ‘going off the cliff,’ says Steve Hanke

4. ECONOMY: Art Laffer reveals Trump’s trade war end game

5. ECONOMY: Warren Mosler uncovers the biggest lie about public debt

6. COMMODITIES: The U.S. is already broke, says Peter Grandich

7. CRYPTO: The path to $1 million Bitcoin, according to Arthur Hayes

8. What To Watch

MARKET RECAP

Latest News. The S&P 500 saw its worst week since September 6th, with the index down 3.1 percent since last Friday. The Dow Jones was down 2.4 percent, its worst week since February.

Markets were skittish due to President Donald Trump’s flip-flops on trade. On Tuesday, March 4th, Trump imposed 25 percent tariffs on Canada and Mexico, only to roll back most of the tariffs on Thursday.

The president has said that this tariff pause will be in place until April 2nd.

More than $3 trillion has been wiped out from the S&P since its February 19th all-time high. Tech giants Tesla and Nvidia are driving the loss, losing $322 billion and $712 billion in market cap, respectively.

Bill Smead, Chairman and CIO of Smead Capital Management, said that the S&P 500 is in a “doomed position.”

“[The S&P] got over-concentrated in very aggressive, very popular… common stocks,” he said. “We have been concerned… that we are going to have a lost decade, like we did from 1999 to [2009].”

Smead added that he was concerned about President Trump’s trade policies.

“The President of the United States is violating David Ricardo’s theory of comparative advantage,” said Smead, referring to the 19th Century economist’s theory that free trade is beneficial for all who participate in it.

He said that treasuries are in a good position to perform better than U.S. equities.

“We believe that if you make 4 percent in a treasury bond over the next ten years, you will wipe the floor with the S&P index,” he said.

Turning to the energy sector, Smead forecasted that oil prices would rise over the next decade as the resource becomes increasingly scarce.

“Over the next ten years, production from the Permian Basin is going to decline,” he said. “The production, the last 10 years in the Permian Basin, was the swing supply that kept oil prices down… the swing supplier is going to dramatically peter out over the next 10 years.”

Market Movements

From February 28st to March 7th, the following assets experienced dramatic swings in price. Data are up-to-date as of February 7th at 5pm ET (approximate).

1. Cardano — up 36 percent.

2. John Wiley & Sons — up 15.8 percent.

3. Moderna — up 15 percent.

4. Tesla — down 10.3 percent.

5. Nvidia — down 9.8 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — down 3.4 percent.

Bitcoin — up 7.6 percent.

Gold — up 2 percent.

10-year Treasury yield — up 1.8 percent.

S&P 500 — down 3.1 percent.

Russell 2000 — down 4.1 percent.

USD/yuan — down 0.7 percent.

EQUITIES:
START OF BEAR MARKET?
Jim Bianco, March 3, 2025

Jim Bianco, President of Bianco Research, said that markets are struggling to understand Trump’s tariff policy, which in turn had led to market volatility.

“[Trump] uses [tariffs] both as a form of revenue, and he uses them as leverage,” he said. “Part of what’s happening with these markets is, we’ve got a whole new set of dynamics that we’re still not quite sure of. We can’t even figure out if [tariffs] are inflationary or recessionary.”

He added that uncertainty over tariffs had caused the Atlanta Fed’s GDPNow indicator to forecast a recession. Bianco said a rising trade deficit was the cause of this.

“Why was there a surge of imports?,” said Bianco. “Two things: one, people trying to beat the tariffs… Second thing, that’s not getting talked a lot about [that] was also in the imports, was gold. Because of the COMEX-LME arbitrage, a whole ton of gold has been imported into the United States.”

Amidst this macroeconomic backdrop, Bianco suggested that investors looking for defensive assets should consider bonds.

“If you really want to go defensive… [go for] the bond market,” he said. “They’re doing better than cash, they’re doing better than the stock market, they’re doing better than the crypto market right now.”

Bianco forecasted that stock markets would not see the outsize gains they had in recent years.

“There isn’t going to be a 15 or 20 percent gain in this market because of these high valuations,” he said. “You need to have monstrous earnings to have these high valuations… We need to adjust ourselves.”

ECONOMY:
ECONOMY ‘GOING OFF THE CLIFF’
Steve Hanke, March 7, 2025

Steve Hanke, Professor of Applied Economics at Johns Hopkins University, said that the U.S. economy is “going off the cliff” because of its lower rate of money supply growth.

“The money supply calls the tune of the economy,” he said, commenting on the Atlanta Fed’s GDPNow, which recently forecasted negative economic growth. “Big changes in the money supply, with a lag, eventually work their way into the real economy… That’s why I have kept saying that a slowdown and recession, those things are baked in the cake.”

He added that while headline data suggest a strong economy, the underlying data point to much weaker trends.

“The headline numbers in the job market and in manufacturing might not look that bad, or look okay,” he said, “but if you look under the hood, they don’t look so great… The manufacturing sector has been more or less slowing down for quite some time.”

Because of these economic trends, Hanke suggested that the 10-year bond yield would continue to trend downwards.

“I think the 10-year is still looking pretty good,” he said. “We have the money supply contraction a couple of years ago that is working its way into the economy, the economy is going to slow down, inflation will keep slowing down, and Trump is throwing so many curveballs into the picture with this trade war thing… all of those things lead into a pretty good bond trade, being long.”

ECONOMY:
TRUMP’S END GAME REVEALED
Art Laffer, March 5, 2025

Art Laffer, Chairman of Laffer Associates, said that Trump’s tariff threats constitute a negotiating tactic that will result in freer trade agreements.

“Donald Trump has been negotiating… lower tariffs on [other countries’] part for access to our markets,” said Laffer. “He is using our very large market as a leverage point to get them to reduce their tariffs, quotas, and non-tariff barriers.”

He added that Trump’s first term saw the reduction of trade barriers.

“If you look at… all of these trade deals that Trump did with other countries [in his first term], all of them resulted in lowering tariffs, lowering non-tariff barriers, and lowering quotas, which is really great for the world,” said Laffer. “I think [Trump] is a free trader all the way, based upon his history as a CEO of a large international company.”

When it comes to the Department of Government Efficiency (DOGE), Laffer said that while he was impressed by the pace of their spending cuts, more permanent changes are needed.

“They [DOGE] are going on just cutting things down, which is also good right now, but they need to make this a permanent part of the U.S.,” he said. “We need to instil incentives in the government to let them run efficiently: reward politicians for doing a good job, and punish politicians for doing a bad job.”

Finally, on the war in Ukraine, Laffer said that it was crucial that Russia and Ukraine have an immediate ceasefire so that negotiations can ensue. He warned that nuclear war is “on the cards.”

“Just stop shooting, that is it,” he said. “You don’t have to have the totality of the agreement negotiated over five years, or whatever it is… I really do feel sorry for Ukraine, I do think it’s awful. I don’t want World War 3, to be honest with you.”

ECONOMY:
THE BIGGEST LIE ABOUT DEBT EXPOSED
Warren Mosler, March 1, 2025

Warren Mosler, widely known as a founder of Modern Monetary Theory (MMT), said that the U.S. government will never go broke, and that concerns about its debt are overstated.

Unlike traditional economics, MMT is a framework which suggests that deficits are not inherently problematic and that inflation is the real limit to government spending, though it can be managed through taxation and spending adjustments.

“The government checks won’t bounce, they’ll all clear,” said Mosler, responding to the U.S.’s rising deficit. “It won’t drive up interest rates, only the Fed does that… There won’t be a funding problem, there won’t be a solvency problem, the government won’t go broke.”

Mosler said that taxes by themselves do not fund government spending, since the government first has to make money available for people to pay their taxes.

“They [the government and its agents] have to spend the money first before anybody has it to pay their taxes,” he said. “Everybody’s got it wrong… They don’t understand that tax liabilities, which are tax requirements, cause the economy to need the government’s money — and the only source for getting it is government.”

He added that printing money, in and of itself, does not affect the economy unless there is a concurrent rise in spending.

“Spending is another matter… and that can drive the price up,” he said. “But if you’re just sitting in a room at the Federal Reserve, [and] you print up dollar bills, you’re not causing anything if they don’t go anywhere.”

When it comes to Fed policy itself, Mosler said that higher interest rates can be stimulative for the economy, because it leads to more deficit spending.

“If the debt held by the public is $28 trillion now, I think, a 1 percent [interest rate] increase would ultimately add $280 billion to deficit spending,” he said. “That has a positive effect, a direct effect, on income, unemployment, on growth, and on prices.”

COMMODITIES:
U.S. IS ALREADY BANKRUPT
Peter Grandich, March 4, 2025

The U.S. is “technically bankrupt already,” according to Peter Grandich, Founder of Peter Grandich & Co.

“If we start to put in the amount of monies that are expected to be paid out for Social Security, Medicare, and Medicaid, there’s no way we’re in a position to pay those in the future, unless we keep creating higher and higher deficits, and printing money that we don’t have,” he explained.

He said that concerns about public debt may have caused the recent rally in the gold price, which was fuelled by central bank buying.

“The very fact that the banks have done this transfer of gold in such large quantities strongly suggests that there’s something afoot that’s not yet ready for the public domain,” he explained. “That has to be the eventual usage of gold to somehow restructure the world debt which is so much out of hand.”

Grandich said that he was bullish on the gold mining sector, including junior miners.

“We’re basically seeing a flattening of earnings growth in the U.S. market,” he said. “One of the few sectors that are going to report, over the next few quarters, just dramatically increased better earnings are going to be the gold producers.”

Commenting on Trump’s proposed minerals deal with Ukraine, Grandich said that it would be “years away” from having an effect on commodities markets, if the deal is ratified.

“It will take many, many years to develop that and bring it to the market,” he said. “I actually think it hopefully enlightens people to how badly critical minerals are needed here in the U.S.”

CRYPTO:
THE PATH TO $1 MILLION BITCOIN
Arthur Hayes, March 2, 2025

Arthur Hayes, CIO of Maelstrom and Co-Founder of BitMEX, said that Bitcoin would hit $1 million as global liquidity grows due to a rise in nationalist economic policy.

“We’re not going to rely on a global supply chain of products,” he explained. “This requires a huge amount of capital, and the private savings market doesn’t have the money… so [The U.S. and Western Europe] are going to have to print the money.”

This money printing, in turn, will lead to a $1 million Bitcoin price, said Hayes.

“It’s, let’s increase the bank lending so they build the new factories,” he said. “Let’s sequester savings and do yield curve control, whether outright or surreptitiously… so that’s how we get to $1 million Bitcoin. How fast we get there, I don’t know, but I do think that this is on the horizon before the end of the decade.”

When it comes to Trump’s proposed crypto strategic reserve, Hayes warned that it could fall prey to political exploitation.

“Politicians buy and sell things for political reasons, not for financial reasons,” he explained. “Maybe a Democrat gets in, or a Democratic Congress or president in the next four years, and they say, I’ve got a bunch of Bitcoin, and it’s worth money… policy is about spending money to your supporters to get votes.”

Hayes said that for Bitcoin to be useful to the U.S. government, it should become an asset that backs the U.S. dollar.

“The de-industrialization of the United States, the export of finance, is a direct result of the way the financial system is set up,” he said. “To change the situation, people should not be saving in U.S. treasuries… I’m arguing for them to use Bitcoin.”

TABLE OF CONTENTS

1. Market Recap

2. EQUITIES: Gareth Soloway on a coming significant market breakdown

3. EQUITIES: Markets are at an “inflection point,” says Peter Boockvar

4. ECONOMY: Eric Basmajian on the economy’s “warning signs”

5. ECONOMY: Bob Elliott on why the economy could slow down

6. TECH: John Belton on whether the Nasdaq has hit a top

7. What to Watch

MARKET RECAP

Relations between the U.S. and Ukraine broke down on Friday, February 28th, following a tense Oval Office meeting between American President Donald Trump and Ukraine’s President Volodomyr Zelenskyy.

The discussion between the leaders led to an argument, with Trump accusing Zelenskyy of “gambling with World War III.” The leaders did not sign a proposed minerals deal, as had been planned, and a joint press conference was cancelled.

The Trump-Zelenskyy meeting comes amidst rising strains on Washington-Kiev relations, with Trump calling Zelenskyy a “dictator” on February 19th, and Zelenskyy accusing Trump of falling victim to Moscow’s “disinformation.”

Following the latest meeting, Trump issued a statement, saying that “[Zelenskyy] disrespected the United States of America in its cherished Oval Office. He can come back when he is ready for Peace.”

The S&P 500 dipped briefly following the exchange before paring losses. The Euro fell 0.27 percent against the U.S. dollar. The VIX spiked to 22.3, up 6 percent from the start of the trading session.

Market Movements

From February 21st to February 28th, the following assets experienced dramatic swings in price. Data are up-to-date as of February 28th at 5pm ET (approximate).

1. iRobot Corp. — down 16.9 percent.

2. Peloton — down 12 percent.

3. Nvidia — down 7.2 percent.

4. Anheuser-Busch InBev — up 11.7 percent.

5. American International Group — up 8.2 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — up 0.9 percent.

Bitcoin — down 14.3 percent.

Gold — down 2.7 percent.

10-year Treasury yield — down 5 percent.

S&P 500 — down 1 percent.

Russell 2000 — down 1.5 percent.

USD/yuan — up 0.4 percent.

EQUITIES:
SIGNIFICANT MARKET BREAKDOWN
Gareth Soloway, February 26, 2025

Gareth Soloway, Chief Market Strategist and President of Verified Investing, said that he expected “significant downside” in markets.

“You have to be more bearish now,” he said. “The trend has broken… and I think it’s important to note that we have some very big negatives that are concerning investors.”

Pointing to inflation, a slowing economy, and tariffs as examples of “negatives,” Soloway said that recent consumer data also point to headwinds for the markets.

“We’ve seen recently the Michigan [consumer] sentiment numbers coming in much weaker than expected,” he explained. “The consumer is the backbone of the U.S. economy, and if that players is slowing — and even the mid-tier to upper-tier [like Walmart] is slowing — this economy is in some trouble.”

When it comes to Bitcoin, Soloway said that it is likely to head lower, based on his technical analysis.

“You’re going to likely head back [down] to this $73-$74,000 level, which again would be major technical support,” he said. “The stock market [has] been tanking [in] the last couple [of] days, Bitcoin’s tanking the last couple [of] days.”

However, Soloway said that in the long-term, he is bullish on Bitcoin.

“I think there’s a viability towards having an alternative to the U.S. dollar or fiat currencies,” he said. “That’s where Bitcoin comes in.”

Gold’s recent rally, which saw the precious metal up 8.6 percent since the start of the year, is over for now according to Soloway.

“In the short-term, we know that gold sells off when there’s panic in the markets,” he said. “We’re starting to see a little bit of that.”

EQUITIES:
MARKET ‘INFLECTION POINT’
Peter Boockvar, February 24, 2025

Peter Boockvar, CIO of Bleakley Financial Group, said that the tech trade is “over.”

“I think that there is some reality check to [Magnificent 7 stocks’] fundamentals, and potentially their growth rates,” he explained. “Whether it’s the DeepSeek news… [or] AI’s influence on Google’s search business, for example… [Mag7] stock market dominance, I think, is coming to an end.”

He added that U.S. markets are at an “inflection point,” and that a rotation out of U.S. major indices and into small-caps, mid-caps, or emerging markets is possible.

“I think that U.S. tech stocks, the Mag7, have become a reserve holding of many foreigners, and some foreign central banks,” he explained. “If this trade is sort of tiring out [then] what happens if foreigners start to reallocate some of this capital into other things, maybe outside the U.S.? Does that have implications for the U.S. dollar?”

Responding to Microsoft CEO Satya Nadella’s February 19th announcement that Microsoft had made a quantum computing breakthrough, Boockvar said that it had the potential to be “disruptive” to the tech sector.

“Think about all the data centers that are being built,” he said. “If you can sort of shrink the size of the capability of the data centre, there’s going to be a lot of wasted real estate out there. There’s going to be a lot of technological obsolescence on all the data centers that are being built right now.”

When it comes to the performance of Walmart, whose stock fell 6 percent after the company issued disappoint guidance, Boockvar said that it was trading at “crazy multiples,” like other big retailers.

“We’ve seen that [happen] in a variety of other stocks,” he said. “It was a momentum trade that took them to tremendously elevated levels, and I think the Walmart news, I guess, maybe, is just a wakeup call… All these momentum stocks, all these comfort stocks, including the Mag7, really sucked a lot of the stock market energy away from everything else and into these names.”

ECONOMY:
ECONOMIC WARNING SIGNS
Eric Basmajian, February 26, 2025

Eric Basmajian, Founder of EPB Research, said that the concern that tariffs will cause inflation is “overstated.”

“If you increase tariffs on, let’s say, motor vehicles, that will increase the price of [motor vehicles],” he explained, “but unless there’s a broad-based increase in money supply, that increase in the price of motor vehicles will be offset by a decrease in price in another good that’s not being consumed, or it will reduce the amount of vehicles being consumed — so growth would go down, in that sense… nominal economic growth is not changed by tariff policy.”

Basmajian said that, based on leading indicators such as manufacturing and construction sector job losses, the overall labor market is not at significant risk of major weakness at present, though he sees “early warning signs.”

“Usually you need to see job losses in those two sectors [manufacturing and construction] combined increase to 100,000-200,000… before it starts to spill over into broader coincident economic weakness,” he said. “Those two sectors combined are only about 10,000-20,000 jobs lost so far. So we’re still pretty early in the labor market deterioration situation, in my view.”

The Federal Reserve is currently engaged in “tight” monetary policy, according to Basmajian, which could lead to an economic slowdown.

“If the Fed holds policy in this range, and money supply growth in real terms continues at about that 1 percent pace, they will continue to engineer a slowdown in the cyclical sectors, and then it will spread forward,” he said. “Should the Fed keep policy here, mortgage rates will stay elevated and the economy will continue to slow, with these long lag times notwithstanding.”

ECONOMY:
WHY MARKETS ARE FLATLINING
Bob Elliott, February 21, 2025

Bob Elliott, CEO of Unlimited, said that fiscal policy would be the big driver of economic trends in 2025.

“Look at the series of policies that have come in so far,” he explained. “Pretty much all of them are growth negative in the course of the next six to twelve months.”

Elliott pointed to immigration, trade, tax, and spending policies as potential contributors to an economic slowdown.

“The clampdown on immigration is reducing the potential growth rate of the U.S. economy,” he said. “If you look at tariff implementation, which is in the short term effectively a tax on consumption, that certainly is starting to add up to be a meaningful drag on the economy. And then there’s some ambiguity about what DOGE [The Department of Government Efficiency] and other tax and fiscal policies are going to be ahead.”

He added that inflation was likely to slow in 2025, based on the latest data releases, including the Producer Price Index.

“Inflation is not going to be interesting in 2025,” said Elliott. “It’s gradually cooling. All the data is aligned with that.”

Elliott said that the “real uncertainty” is whether real GDP growth would remain at 3 percent, and whether company earnings growth would remain strong.

When it comes to gold, Elliott said that foreign investors had been driving strong retail demand, and that gold is a “geopolitical hedge” and an “uncertainty hedge.”

“You look at the current circumstances, both of those things [geopolitical and policy uncertainty] are elevated, and so it makes sense that [gold] is getting a bid,” he said.

TECH:
HAS NASDAQ TOPPED?
John Belton, February 23, 2025

Despite DeepSeek’s and Alibaba’s recent advances in AI technology, John Belton, Portfolio Manager at Gabelli Funds, said that the U.S. continues to lead in artificial intelligence.

“The U.S. is still at the leading edge when it comes to generative AI technologies,” he said. “The U.S. is still far ahead of China when it comes to companies in the real economy having adopted and having started to build out useful AI applications.”

Belton added that Nvidia, the chip manufacturer, has “no real competition.”

“There is no alternative to Nvidia,” he said. “I don’t see that changing anytime soon… I think the valuation on Nvidia is still reasonable… I don’t think we’re anywhere near the peak in terms of earnings yet, so I’m still comfortable holding Nvidia over the medium to long term.”

When it comes to the tech-heavy Nasdaq, Belton said that in the long-term, he is optimistic.

“The economy is very resilient,” he said. “[There are] a lot of reasons to believe in and be excited about AI. There’s a lot of new things the new [Trump] administration is doing [that] should be more business-friendly. So, I think if you have a long-term perspective… stocks are still a good place.”

The Trump White House has brokered a $500 billion investment into large-scale data centres to benefit AI. This ‘Stargate Project’ could benefit companies like Oracle, which have invested in the project, but there is a lot of uncertainty surrounding the investment, said Belton.

“I think it’s hard to have real conviction on how this is going to unfold,” he said. “Beyond [the first $100 billion], I think it’s going to depend on a lot of factors that are still kind of unfolding.”

TABLE OF CONTENTS

1. Market Recap: Matt Gertken on why the Ukraine War could end in 2025

2. ECONOMY: Judy Shelton on whether The Fed should end

3. ECONOMY: Danielle DiMartino Booth on tariffs and inflation

4. ECONOMY: BNY’s Vincent Reinhart on who wins trade wars

5. MARKETS: Chance Finucane on risks the market isn’t pricing in

6. MARKETS: A ‘major reprice’ of assets is coming, says Clem Chambers

7. CRYPTO: Bitcoin to $180k in 2025, according to Van Eck’s Matt Sigel

8. What to Watch

MARKET RECAP

Latest News. On Tuesday, February 18th, U.S. State Department officials met with their Russian counterparts for the first time since the Ukraine war began in 2022.

The two teams, led by U.S. Secretary of State Marco Rubio and Russia’s Foreign Minister Sergey Lavrov, agreed to look into ending the Ukraine war.

Ukraine was excluded from the talks.

The Kremlin announced that a presidential summit between Donald Trump and Vladimir Putin is expected this year.

The White House signalled that it expects European countries to shoulder more of the burden of peacekeeping in Ukraine. The news sent European defense stocks soaring higher.

German arms manufacturer Rheinmetall was up 9.4 percent and Sweden’s Saab AB was up 21.3 percent over the week, from February 14th to February 21st. Britain’s BAE Systems was up 2.7 percent over the same period.

Matt Gertken, Chief Geopolitical Strategist at BCA Research, said that he expects the Ukraine War to end this year.

“Certainly the window of opportunity for Russia is very clear while President Trump is in power,” he said. “I think it probably will be this year [that the war ends].”

On February 12th, U.S. Secretary of Defence Pete Hegseth said that it is unrealistic to expect Ukraine to become a NATO member state, or to return to its pre-2014 borders.

Commenting on this, Gertken said, “having the Americans, as a formal matter of policy, admit that Ukraine won’t join NATO is a major concession to Russia, and should help to culminate in a ceasefire agreement.”

However, he added that such a ceasefire may be fragile if it includes European peacekeeping troops in Ukrainian territory.

“The U.S. has not wanted to have a trip wire that would cause conflict with NATO,” Gertken explained. “Minsk 3 is what [Pete Hegseth] said they don’t want, and that may very well be what they end up getting.”

The Minsk agreements were two ceasefire deals between Russia and Ukraine, brokered by European nations in 2014 and 2015.

Gertken also discussed the possibility that aid to Ukraine will dry up under the Trump administration.

“The writing is on the wall, that Ukraine is effectively being abandoned,” he said. “That’s what makes it very likely that we will get a ceasefire… There may be a small swap of territory for the piece that Ukraine invaded, in Russia around Kursk, but that’s not very large compared to the huge amount that Russia has taken.”

Market Movements

From February 14th to February 21st, the following assets experienced dramatic swings in price. Data are up-to-date as of February 21st at 5pm ET (approximate).

1. Celsius Holdings — up 46 percent.

2. Saab AB — up 21.3 percent.

3. Alibaba Group — up 11.6 percent.

4. Coinbase Global — down 14.2 percent.

5. Walmart — down 8.9 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — No significant change.

Bitcoin — down 1 percent.

Gold — up 1.9 percent.

10-year Treasury yield — down 1 percent.

S&P 500 — down 1.7 percent.

Russell 2000 — down 3.7 percent.

USD/yuan — No significant change.

ECONOMY:
WILL TRUMP ABOLISH THE FED?
Judy Shelton, February 20, 2025

Judy Shelton, Senior Fellow at The Independent Institute and former Economic Advisor to President Trump, said that the Federal Reserve’s inflation target should be zero.

“I think zero inflation is the appropriate target,” she said. “I would love the day that there’s no difference between the real rate of interest and the nominal rate of interest, because the real rate of interest reflects real supply and demand for capital.”

When it comes to whether a central bank is even needed in the United States, Shelton said that “ that is the question of the moment, and I think we’re fast approaching some kind resolution.”

“There… is a mood now to question the Fed,” she explained. “You have people like Senator Mike Lee saying that the Fed has gone beyond its constitutionally intended powers. Basically, Congress farmed out its own responsibility… to regulate money to [The Fed], whose record on delivering stable money has not been very impressive.”

To help the U.S. economy achieve stable prices and low inflation, Shelton put forward the idea of gold-backed treasury bonds, with a 50 year maturity, which she called “treasury trust bonds.”

“A holder of a treasury trust bond would be able to be reimbursed for loss of purchasing power in terms of gold, which would be a surrogate for the real economy, and for commodities,” she explained. “And so, you now put the burden on the U.S. government, on both monetary and fiscal policy, to do better than market expectations with regard to preserving the purchasing power of the dollar, and I think truly aiming for stable prices as a mandate of the Fed, and in conjunction with a balanced budget.”

ECONOMY:
FED’S RESPONSE TO TARIFFS
Danielle DiMartino Booth, February 19, 2025

Whether tariffs affect inflation depends on how they’re implemented, as well as their magnitude, according to Danielle DiMartino Booth, CEO of QI Research.

“If it’s a one-time shock to the system, then it will filter in and out of the data within a very short period of time,” she explained. “If it was to be death by a thousand cuts, and for there to be… a constant trickling in of ever-increasing tariffs, then that would certainly build into an inflationary impulse on its own.”

However, DiMartino Booth said that the ongoing Department of Government Efficiency (DOGE) job cuts would be “disinflationary” and could slow economic growth.

“Every single job in America generates income,” she said. “To the extent that that job no longer exists, that income is no longer being generated, and the Fed must attend not just to its inflation mandate, but also to its employment mandate.”

DiMartino Booth was also skeptical that the private sector would be able to absorb public sector layoffs.

“The private sector layoff tally right now is about 100,000,” she explained. “If anything, these [laid off] public sector employees are going to be presenting a form of competition to others in the private sector who continue to look for jobs.”

She added that uncertainty about fiscal policy and geopolitics is not properly priced into markets.

“[The 10-year bond yield] looks like a deer in the headlights,” she said. “It looks like it is completely frozen at 4.5 percent, not knowing which direction Fed policy is going to take next, not knowing whether or not the policies that are coming out of the new administration are going to be inflationary, whether they’re going to be deflationary, whether the jobs cuts are going to be offset potentially by a one-time check sent out by the Department of Government Efficiency.”

ECONOMY:
WHO WINS IN TRADE WAR?
Vincent Reinhart, February 17, 2025

Vincent Reinhart, Chief Economist at BNY Investments, said that although Trump’s 25 percent steel and aluminum tariffs would raise prices, they were unlikely to make a significant impact on the CPI.

“[With tariffs,] you raise prices,” he said. “It’s a little more complicated for what this does to steel prices, because an exchange rate gets in between… That’s why we didn’t see all that much pass-through in 2017 [during Trump’s first-term tariffs]… It is a small cost to an important input in production. You’re not going to see it on the CPI in three months.”

Although he said that the “case for free trade is pretty overwhelming,” Reinhart added that he understood why Trump may have advocated for tariffs.

“Our exports are a lot smaller than our imports,” he explained. “When we put on a tariff, it’s on our imports. When we get retaliation, it’s on our exports, i.e. the retaliator hits us less than we hit them in terms of quantity.”

Reinhart also said that many imported goods have high margins, which companies could afford to adjust in response to tariffs.

“I think that the White House believes they’ve got leverage because they’ve got a tool that hurts other economies more than [the U.S.],” he said.

If tariffs are used “transactionally,” as a threat against other countries to get specific policy outcomes, then Reinhart said that the outcomes themselves may even be good.

“If a tariff is used transactionally… then it’s hard to get too excited about the incidence of it because it’s going to go away,” he said. “And it’s possible that you’ll get other better policy outcomes as a consequence.”

MARKETS:
BOND MARKET WARNING
Chance Finucane, February 18, 2025

Chance Finucane, CIO of Oxbow Advisors, observed that 10-year yields have been rising over the past few months, signalling both higher inflation and economic growth.

“If it has gone up, say, by 100 basic points, maybe half of that is from the inflation rate rising, and the other half is from a little bit better economic growth,” he explained.

He added that uncertainty over Trump’s economic policies are not being properly priced into markets.

“The level of uncertainty about where markets and the global economy goes has heightened, and yet we’re not seeing that priced into financial markets yet,” he said. “[This] leads us to really want to focus more on the risk side of the equation, and the potential downside with any new investments that we make.”

Finucane said that the S&P 500 had become too concentrated, and that investors should seek to diversify, in order to “outperform” markets over the next two years.

“The top 10 stocks in the S&P 500 are now 38 percent of the weight of that index, because they’ve risen so high,” he explained. “Over the next two years, you’re better-off having a more diversified portfolio across an array of stocks, rather than being so concentrated like the S&P 500 is.”

When it comes to undervalued assets, Finucane said that consumer staples and healthcare are examples of industries that have potential upside.

“You’ve got consumer staples and healthcare that have really sold off sharply,” he said. “[With] consumer staples, it’s concern about weight-loss drugs ruining demand for some of their products [and] it’s people not wanting to own defensive businesses. [With] healthcare, it’s the risk [of] disruptions to healthcare policy in the United States… but we now think it’s so priced in, that there’s opportunity there that wasn’t there six months ago.”

MARKETS:
’MAJOR REPRICE’ OF ALL ASSETS
Clem Chambers, February 16, 2025

Clem Chambers, Founder of ANewFn, said that the recent rise in the gold price points to increasing “volatility,” as well as uncertainty about U.S. government policy.

“How are you going to put some money aside…. if it turns out to be catastrophic?,” he said. “Well, there’s really only one place to go, and that’s gold.”

He added that gold will “go to $5,000” within a couple of years.

When it comes to the risk posed to American artificial intelligence firms from Chinese competitors like DeepSeek and Alibaba, Chambers said that “it doesn’t matter” for chip demand.

“[DeepSeek] doesn’t lower the demand for the training hardware that Nvidia makes,” he explained. “It doesn’t lower the demand for cooling for all those machines… There is no limit to how much [artificial] intelligence you want.”

Chambers said that there would be a “major reprice” of major indices.

“[There] is a fairly large amount of uncertainty at the end of that [Nasdaq] chart,” he said. “[It’s] not surprising, seeing that there’s a new administration… there’s good reason for there to be uncertainty.”

Chambers said that his top asset for 2025 is British equities.

“[The UK] has been such a terrible market for so long, and the local chancellor has declared open season for taking over FTSE 100 companies and carrying them off,” he explained. “For the sort of stuff that I hold, which are… large companies with huge profits and great value, great international businesses, they’re all getting strip-mined… It’s cheap, it’s going up, it’s going to go up for two or three years.”

CRYPTO:
$180k BITCOIN IN 2025
Matthew Sigel, February 18, 2025

Matthew Sigel, VanEck’s Head of Digital Assets Research, said that Bitcoin could reach $180,000 per coin in 2025.

“The most explosive part of the Bitcoin cycle tends to happen in the one year after the halving,” he said. “We had that last halving in April of last year… The previous smallest ever cycle was 2,000 percent from the trough to the peak, so if we assume a 1,000 percent price return, that would be roughly $180k for this cycle… [It is] likely to peak out in Q4 of this year.”

In the medium-term, Sigel said that he predicts Bitcoin will reach $450k.

“Over the medium-term, we benchmark this asset to gold, and specifically the 50 percent of the gold market that is used for speculative purposes, rather than jewelry and industrial purposes,” he explained. “If you assume that Bitcoin can surpass that 50 percent of gold market cap, that would be a $450,000 Bitcoin price target.”

Sigel said that The Department of Government Efficiency’s budget cuts may have a negative impact on the Bitcoin price.

“A lot of people buy Bitcoin when they’re frustrated with how government is functioning,” he said. “To the extent we get major sustainable cuts in the U.S. budget deficit, I think that’d probably be a negative for Bitcoin, all things equal.”

Responding to Elon Musk’s suggestion that federal government payments be put on a blockchain, Sigel said that the benefit of this would depend on what kind of blockchain is used.

“There’s a number of blockchains that function similar to permissioned databases,” he said. “But if this were to go on something truly permissionless and open-source like Ethereum, where the blockchain explorers are very well-developed, then I think that would be tremendous for U.S. citizens to see how payments are being made, and where funds are coming from, and where they’re going.”

WHAT TO WATCH

Tuesday, February 25, 2025

• S&P/Case-Shiller Home Price Index. This tracks monthly U.S. home prices across major U.S. metropolitan areas.

Thursday, February 27, 2025

• Pending Home Sales. This shows monthly pending home sales; i.e., residential real estate transactions which have not yet closed.

Friday, February 28, 2025

• Personal Consumption Expenditures. This is a monthly measure of spending on consumer goods and services in the United States.

TABLE OF CONTENTS

1. Market Recap: Chris Vermeulen on why investors should brace for ‘chaos’

2. ECONOMY: Lyn Alden on what happens when tariffs destroy the economy

3. ECONOMY: Steve Keen explains why private debt is the real crisis in the U.S.

4. INVESTING: Robert Kiyosaki on which assets will soar, how to invest

5. FIXED INCOME: Kathy Jones on where yields are headed

6. What to Watch

MARKET RECAP

Latest News. U.S. retail sales plunged in January, falling 0.9 percent, larger than the expected 0.3 percent. This was the largest monthly fall in retail sales in two years.

The sales data were released on February 14th; stocks and the dollar reacted by falling, while Treasury yields rose. Since the morning of the 14th, stocks have pared losses.

Yet, market volatility will only get worse in 2025, according to Chris Vermeulen, Chief Market Strategist at TheTechnicalTraders.com.

“In the next month or two, I believe the markets are going to put in a major market top, so I am bearish,” he said.

Once the market reaches a top in the coming months, Vermeulen forecasted a major crash.

“I think we’re going to see way bigger than a 25 percent pullback,” he predicted. “I do think this year we’re going to see a huge correction… until then, don’t bet on that with the trend, which is up at this point.”

When it comes to the Trump White House, Vermeulen said that uncertainty about policy would affect markets.

“All we have to know is, Trump’s in power [so] expect chaos,” he said. “Expect… all kinds of stuff that will be in place one day and removed the next day. All it means is expect increased volatility.”

Long-term, Vermeulen said that he was bullish on the U.S. dollar.

“I’m still bullish, long-term, on [the dollar],” he said. “If we were to do a Fibonacci extension on here, to where that upside target could be, we’re looking at potentially 124 [in the DXY].”

Market Movements

From February 7th to February 14th, the following assets experienced dramatic swings in price. Data are up-to-date as of February 14th at 9pm ET (approximate).

1. Papa John’s International — up 28.9 percent.

2. DraftKings Inc. — up 26.5 percent.

3. Alibaba Group Holding — up 24.1 percent.

4. Iron Mountain Inc. — down 10 percent.

5. Zillow Group — down 8.4 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — down 1.2 percent.

Bitcoin — no significant change.

Gold — up 0.8 percent.

10-year Treasury yield — down 0.2 percent.

S&P 500 — up 1.5 percent.

Russell 2000 — no significant change.

USD/yuan — down 0.5 percent.

ECONOMY:
WHEN TARIFFS DESTROY THE ECONOMY
Lyn Alden, February 13, 2025

Lyn Alden, Founder of Lyn Alden Investment Strategy, said that large tariffs could lead to slower growth and higher inflation in the U.S. economy.

“If you implement large tariffs, and then especially if you get in counter-tariffs, that’s basically a big global tax increase,” said Alden. “That can increase the odds of recession, or makes business planning a lot harder.”

Alden said that unless the Trump administration reduces regulations or improves energy output, “at scale” tariffs would be inflationary.

“Generally speaking, [with tariffs] you’re either taxing stuff that stays foreign, which [results in] higher prices, or you relocate to a higher-cost area, which has benefits, but then generally comes with higher prices,” Alden explained. “So, there is potentially inflationary effects, but only if this is done at scale.”

When it comes to inflation in 2025, Alden said that slow-moving components of the CPI and PCE indices would keep inflation elevated.

“I think we’re probably still going to end 2025 above [The Fed’s] target [of 2 percent],” said Alden. “This gives the Fed a little bit more hawkishness in their narrative, at least until we get maybe a couple of more soft prints.”

Alden stressed that fiscal dominance would drive inflation in 2025.

“Instead of rapid bank lending causing this inflation, it’s generally large budget deficits,” Alden explained. “50 basis points rates in either direction is greatly outweighed by [deficits]… and what does tariff policy look like in three months, six months, 18 months from now? Those are way more important in my view.”

ECONOMY:
PRIVATE DEBT IS THE REAL CRISIS
Steve Keen, February 12, 2025

Steve Keen, Honorary Professor at University College London and Publisher of , said that the real problem in the U.S. is not inflation or the budget deficit, but rather private debt.

“The real problem in America is not the level of government debt, it’s the level of private debt,” he said. “Everybody’s obsessing about government debt being 100 percent of GDP, roughly, right now. Private debt is 170 percent of the GDP… Private debt is what causes financial crises.”

He said that the solution to this is to use the government’s ability to “create money” to buy up private debt.

“I would actually use the government capacity to create money… to cancel private debt,” he said. “… That would give you a much, much wealthier middle class.”

Keen said that government deficits are not inherently bad, since increasing money supply leads to a growing economy.

“If you want to have a growing economy, you’ve got to have a growing money supply,” he explained. “There’s two sources of increasing money: the government creates money by running a deficit, [or] the private banks create money by lending more than they get back in repayments. And you actually [have] too much credit money creation, and not enough fiat money creation.”

Responding to the Congressional Budget Office’s projection that the 2025 deficit would be 6.2 percent of GDP, Keen said he’d be “happy” to maintain it at that level.

“I’d actually be happy to maintain the deficit on the order of 6 percent of GDP, and reduce the amount of money created by banks, because most of that money created by banks goes into share market speculation and housing speculation,” he said. “It makes housing more expensive. That’s not a good thing… Private debt is the real problem.”

INVESTING:
THESE ASSETS WILL SOAR
Robert Kiyosaki, February 11, 2025

Speaking at the Vancouver Resource Investment Conference (VRIC), Robert Kiyosaki — best-selling author of the Rich Dad, Poor Dad series — stressed that investors need to know about how inflation affects asset prices.

“[The U.S.] is printing $1 trillion every 100 days,” said Kiyosaki. “When they print that much money, what happens is this: the rich get richer… because there is asset inflation.”

He added that “the dollar is fake, we’ve got to start going to hard assets.”

Kiyosaki cautioned that investors should be careful about relying too heavily on financial planners.

“The most stupid people I meet, they actually let a financial planner handle their finances,” he said.

In terms of specific investments, Kiyosaki said that he was investing in silver.

“[My friend Andy Schechtman] says that every time they fire those Tomahawk rockets, I think there is 1.4 pounds of silver in them, and you never get it back,” he said. “Silver is an industrial metal, it’s also a strategic metal in war.”

He said that investing in assets like real estate, which generate a passive income, is also an important aspect of investing.

“I make about $250,000 a month in apartment houses,” he said. “It’s not big money, but I can pay my bar bill.”

FIXED INCOME:
ARE INTEREST RATES ABOUT TO SPIKE?
Kathy Jones, February 14, 2025

Kathy Jones, Chief Fixed Income Strategist at Charles Schwab, said that inflation could stay sticky and higher than the Fed’s target, which in turn would affect bond yields.

“We have tariffs and we have immigration changes [under the new Trump administration], and those two components have the potential to be somewhat inflationary,” she said. “The risk is towards higher rather than lower inflation, so I would say, yeah, we could stick around this 2.5-2.6 percent inflation for a while, if some of these potentially inflationary policies really come to fruition.”

She said that these inflationary pressures could cause Treasury yields to rise.

“Between those policies and the fact that the economy has just been very resilient in the face of a lot of things that have been thrown at it over the number of years, I would say that the risk is that we go back in Treasury yields to retest the 5 percent area on the 10-year,” she said.

Commenting on Treasury Secretary Scott Bessent’s plan to reduce 10-year yields by promoting energy output and slashing government spending, Jones said that Bessent’s outlook was “very optimistic.”

“So far we’ve seen a lot of potential reduction in workforce at the federal level,” she said, referring to the Department of Government Efficiency’s budget cuts. “But you only have 3 million government workers… and if the average worker in the federal government makes $100,000 a year, let’s say, you know you’re not going to get $2 trillion in deficit reduction even if you cut the entire federal workforce.”

Jones also expressed skepticism about the possibility of energy prices being driven down lower through an increase in output.

“[Lowering energy prices] requires getting production up to even higher levels than it is domestically… and driving the price down,” she said. “Well, that depends on whether the investors in the energy companies want those companies to increase production and potentially drive down their own profits… Investors don’t want that.”

TABLE OF CONTENTS

1. Market Recap: Will Chinese trade retaliation lead to military escalation?

2. ECONOMY: Axel Merk says Trump could be an ‘anchor of stability’

3. ECONOMY: Gary Shilling on why markets look more ‘dangerous’ now

4. GOLD: Gary Shilling explains how gold could hit $3,100 in 2025

5. TECH: Bradley Tusk weighs in on markets pricing DeepSeek risk

6. What to Watch

MARKET RECAP

Latest News. On February 12th, the Consumer Price Index came in at 3 percent year-over-year, up from 2.9 percent in December, and higher than expected. Consumer inflation fears have also risen by 1 percentage point from January to February, driven by worries about tariffs.

On February 4th, the White House imposed 10 percent tariffs on Chinese imports. Beijing responded with tariffs of its own, taxing coal and liquified natural gas at 15 percent, and crude oil, agricultural machinery, and large-engine cars at 10 percent.

Markets in China reacted to the news with greater volatility. The yuan fell 0.3 percent against the U.S. dollar, and the Hang Sang China Enterprises Index falling by 1.7 percent. Since the tariffs were announced, Chinese markets have pared losses.

Shaun Rein, Founder and Managing Director of The China Market Research Group, said that Trump’s tariffs were in part responsible for China’s “weak” economy and low consumer confidence.

“The weakness that people are going to be surprised about is just how weak Chinese New Year spending was,” he said. “We interviewed a lot of hotels, and the price per room was 10-20 percent in most five-star hotels, because consumers are scared about whether or not Trump is going to slap 60 percent tariffs. Chinese consumers are scared whether there will be military tension over Taiwan.”

Michael Beckley, Associate Professor of Political Science at Tufts University, largely agreed with Rein’s assessment. However, unlike Rein, Beckley was skeptical about Trump and Chinese President Xi Jinping working out a deal to reduce trade tensions.

“I’m maybe a little more bearish on the idea of some future deal,” he said. “I know that Trump and Xi decided not to meet, and I just see these things escalating naturally… I actually think the 10 percent [tariff] is the opening gambit of the Trump administration.”

He added that Trump’s administration would like to scale tariffs on China up to 60 percent, which would hurt both U.S. and Chinese economies.

“I think it’s going to hurt consumers on both sides of the economy,” he said, “but I think because China is more export-dependent than the United States, a trade war is just going to hurt its macroeconomy more than the American economy.”

Rein said that there is “no need for America to be fighting against China.”

“I don’t believe in this Great Power hatred and politics that a lot of people push,” he said.

However, Beckley predicted that because the Chinese economy is weakening, Beijing could seek to affirm its strength through a possible military intervention in Taiwan, or another hot conflict in the South China Sea.

“For China, it’s like, if you’re going to try to strangle our economy, well then there’s no reason we have to contain this within the economic sphere,” he said. “There’s plenty of other areas [China] can cause problems for the United States or some of its allies… We’ve seen historically that trade wars often will precede periods of intense conflict… I fear that this cycle of retaliation is feeding on itself at this point. I would expect things to get worse, both economically and on the geopolitical front, before they have a chance to get better.”

Market Movements

From February 5th to February 12th, the following assets experienced dramatic swings in price. Data are up-to-date as of February 12th at 9pm ET (approximate).

1. Uber Technologies — up 23.1 percent.

2. Lions Gate Entertainment — up 20.8 percent.

3. Palantir Technologies — up 15.8 percent.

4. Tesla — down 11 percent.

5. Zillow — down 7.4 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — up 0.1 percent.

Bitcoin — down 0.6 percent.

Gold — up 1.7 percent.

10-year Treasury yield — up 4.3 percent.

S&P 500 — down 0.2 percent

Russell 2000 — down 2.6 percent.

USD/yuan — up 0.5 percent.

ECONOMY:
SOVEREIGN WEALTH FUND A GAME CHANGER
Axel Merk, February 6, 2025

President Donald Trump may be an “anchor of stability in an increasingly unstable world,” said Axel Merk, President of Merk Investments.

He pointed to the U.S. political system being more robust to populist leaders, and the claim that Trump lacks a strong majority, hence weakening his mandate.

“… Obviously the opposition to whatever Trump wants to do is going to ramp up,” he said. “Trump doesn’t have a big majority, and so he has to do things with executive orders. And so, we’ll see pan out in the coming weeks which of these things will stick, and which ones the courts will push back on.”

On February 4th, Trump ordered the creation of a U.S. sovereign wealth fund, which Merk said suggests “more active industrial policy” on The White House’s part.

“[Industrial policy] means… the government is more involved in the allocation of resources… [which means] resources are going to be allocated less efficiently,” he said. “It also means, in many ways, that the cost of doing business is going to go up and tariffs are going to be elevated. And all of that warrants a lower long-term yield, and in many ways a higher price of gold.”

When it comes to the White House’s newly-created Department of Government, headed by Elon Musk, Merk was skeptical that it would make substantive cuts in government spending.

“There is nothing more popular than highlighting government abuse,” he said. “What does it mean for the long-term fiscal sustainability?… There, I think I’ll just sit back and eat my popcorn.”

ECONOMY:
MARKETS ARE GETTING ‘DANGEROUS’
Gary Shilling, February 5, 2025

Market participants have become increasingly uncertain due to President Donald Trump’s trade and fiscal policies, according to Gary Shilling, President of A. Gary Shilling & Co.

“Trump, clearly, he’s a master of uncertainty,” he said. “I think he revels in the idea of keeping people off-balance, and creating a certain amount of uncertainty.”

Shilling pointed to the example of Elon Musk’s Department of Government of Efficiency, created under Trump, which has been cutting government spending in an unpredictable manner.

Despite this uncertainty, Shilling said that he is “long the dollar.”

“The dollar is the global currency, and it’s the place people go in times of difficulty,” he said. “If you look at total investment flows, dollar transactions — both trade and investment — 88 percent of them involve the U.S. dollar.”

Shilling also dismissed the idea of de-dollarization due to trade wars.

“I think the trade war is in favour of the dollar,” he said. “It’s a safe haven. I mean, can you imagine, if you’re looking at a trade war… are you going to rush into the Swedish krona? Probably not.”

While gold is perceived as a safe haven, its long-run real performance is “flat,” said Shilling.

“Gold is affected by trade wars, it’s affected by shooting wars, it’s affected by international currency movements,” he said. “There’s a lot of forces, and a lot of times they just seem to cancel each other out.”

GOLD:
GOLD COULD HIT $3,100 IN 2025
Gary Wagner, February 5, 2025

The gold price could breach $3,100 in 2025, according to Gary Wagner, Editor of TheGoldForecast.com.

Gold has hit a record-high of over $2,880 over the past week, and based on market trends, if its recent pattern continues then gold will reach new all-time highs in 2025, said Shilling.

“[From October of 2023 to April 2024], [gold] runs up approximately $500, a 27 percent rise, and it did that in 230 days” he said. “We had a second leg of the rally, and on this rally it took 122 days, and it increased at about $454. I simply averaged out these price moves… For the first half to the third quarter of this year, [we should see] gold substantially higher, well above $3,000, and actually breach $3,100.”

Shilling said that even if the Fed does not cut rates in 2025, his forecast would not change significantly.

“I still think it’s going to easily hit $3,000, and possibly challenge $3,100 in a more challenging environment,” he said. “In a more favourable environment for gold, it would barrel through $3,000, and not only challenge $3,100, but go in excess — $3,150, shy of $3,200 per ounce.”

When it comes to gold’s performance against equities, Shilling said that he predicts gold to surpass the performance of broad market indices like the S&P, but technology-heavy indices like the Nasdaq would likely perform better than gold.

“[When it comes to] gold and for example, the S&P, I would put my dollars on gold,” he said. “But if I had to bet against, say, the Nasdaq Composite, which includes that heavy tech sector, I think the Nasdaq has the opportunity to outperform gold.”

TECH:
DEEPSEEK’S RISKS TO TECH
Bradley Tusk, February 2, 2025

Chinese AI company DeepSeek’s recent challenge to American tech firms shows that markets were not pricing in the threat from Chinese competition, said Bradley Tusk, CEO of Tusk Ventures.

“The stock markets have not been completely rational about any of this for a while now,” he said. “The endless bull run on Nvidia, in my view, wasn’t totally logical… As we know, things always change.”

Tusk said that U.S. restrictions on exports of advanced AI chips to China had spurred innovation among Chinese tech firms, who had to “make do” with older chips.

“Ironically, it was our restriction in the first place that led to the Chinese innovations, if they are true and accurate,” he said. “I think as President Trump thinks about all of his different tariffs and trade policies and restrictions… be careful what you wish for.”

In general, Tusk said that innovations from Chinese firms like DeepSeek and AliBaba had been good for the tech sector.

“Ultimately for tech to work, it has to become commoditized, and the cost of operating has to be low enough that it can be done at scale, and so you want lower computings costs and less energy usage,” he said.

WHAT TO WATCH

Wednesday, February 19, 2025

• Housing Starts — The number of new house construction projects started in the prior month.

• FOMC Meeting Minutes — The minutes from the FOMC Meeting in January will be released.

Thursday, February 20, 2025

• Leading Economic Indicators — The Conference Board’s Leading Economic Indicators for January will be released.

Friday, February 14, 2025

• Existing Home Sales — Sales of existing homes will be released for the prior month.

TABLE OF CONTENTS

1. Market Recap: Doug Casey on how ‘insane’ tariffs destroy living standards

2. EQUITIES: Steve Diggle on why the Nasdaq is set up for a 2000-style crash

3. ECONOMY: Steve Hanke on Fed’s rate cut, economic slowdown in 2025

4. ECONOMY: Fed will launch a ‘bazooka’ after market crash, says Matt Piepenburg

5. COMMODITIES: Rick Rule on why he is optimistic about Canadian oil and gas

6. CRYPTO: Markus Thielen on why Bitcoin will reach $122k in the short-term

7. What to Watch

MARKET RECAP

Latest News. On Saturday, February 1st, The White House announced that, effective February 4th, the U.S. would be rolling out 25 percent tariffs on Mexico and Canada, and a 10 percent tariff on China.

The executive action also would have imposed a 10 percent tariff on Canadian energy.

Markets reacted badly to the news on the morning of Monday, February 3rd, with the Dow down over 500 points and the S&P down 1.6 percent.

However, stocks recovered following news that U.S. President Donald Trump had worked out a last-minute deal with Canada and Mexico, which involved both countries devoting more resources to policing their borders and stopping the illicit flow of fentanyl.

In return, The White House agreed to pause tariffs for 30 days.

Doug Casey, best-selling author of Crisis Investing and Founder of the Crisis Investing newsletter, called the trade conflict “stupid and unnecessary and destructive.”

Casey was speaking on February 3rd at 2pm EST, before Trump rolled back tariffs on Canada.

“What’s going to happen is we’re going to see a significant drop in the standard of living,” he said. “If [The President] wants to get rid of U.S. trade deficits, what needs to happen is U.S. taxes and regulations need to eliminated. That would reduce the cost of production in the U.S., and people would come to the U.S., instead of running away from the U.S.”

Casey predicted that the end result of a trade war would be no trade between the countries involved in it.

“Just as Trump has attempted to punish Canada, Trudeau… thinks that he can now punish Americans [with tariffs],” he explained. “What’s Trump likely to do? Well, you punish me, I’ll punish you more. And there won’t be any trade between America and Canada… or any other country.”

However, Casey said that tariffs by themselves do not cause inflation, since they only raise relative prices, and not the overall price level.

“Tariffs don’t increase inflation,” he said. “What increases inflation… is an increase in the money supply. What tariffs do is they increase the prices of individual items, not the general price level… and people can buy less of those items, and they can use their money to buy something else.”

Market Movements

From January 27th to February 3rd, the following assets experienced dramatic swings in price. Data are up-to-date as of February 3rd at 9pm ET (approximate).

1. Whirlpool — down 25.5 percent.

2. JetBlue Airways — down 25.3 percent.

3. Comcast Corporation — down 13.2 percent.

4. Palantir Technologies — up 11 percent.

5. Arabica Coffee — up 8.8 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — up 1.4 percent.

Bitcoin — down 0.9 percent.

Gold — up 2.7 percent.

10-year Treasury yield — up 0.9 percent.

S&P 500 — down 0.3 percent.

Russell 2000 — down 1.1 percent.

USD/yuan — down 0.8 percent.

EQUITIES:
NASDAQ COLLAPSE CRISIS
Steve Diggle, January 31, 2025

Risks to market stability are similar to those in 2008 during the Global Financial Crisis according to Steve Diggle, Founder of Vulpes Investment Management.

Diggle made over $3 billion betting on volatility in 2008, and warned of an upcoming crash in the tech-heavy Nasdaq.

Diggle said that market volatility risks have risen due to central banks being constrained in their policy tools, alongside “untenable” asset prices.

“[Firstly], the extent to which the central banks will feel comfortable continuing their money printing is limited because we’ve had this very significant 50-year high inflation,” he said. “And secondly… asset prices have now grown to a point, particularly in certain areas, where they just look untenable… It’s now a good time to start revisiting the idea of downside hedging because the chances of volatility have gone up, but the cost of hedging has gone down.”

However, Diggle said that the chances of another 2008 financial crisis are slim.

“I think it’s unlikely for two reasons,” Diggle explained. “One, the epicentre of risk now is no longer in the banks… The banking system is an awful lot more robust than it was in 2008… Secondly, the central banks are watching particularly the banks, but [also] general, broad pillars of the financial system, and stand ready to add liquidity a lot faster than they did in 2008.”

A “2000 Nasdaq collapse style crisis” is more likely to occur, said Diggle.

“We’ve now got some gigantic companies sitting on relatively small or fragile revenues,” he explained. “We also have a macroeconomic background with the new President in the United States who… has a fairly radical agenda and is very unpredictable.”

As an example of fragility, Diggle pointed to the recent crash in Nvidia stock, which was driven by DeepSeek, a Chinese tech firm which reportedly ran an efficient AI model on old Nvidia chips.

“When a tiny little 200-person company [DeepSeek] can cause the most valuable stock in the world to lose $560 billion in a single session… if that’s not a sign that things are fragile, then I don’t know what is,” said Diggle.

ECONOMY:
FED’S END GAME
Steve Hanke, January 30, 2025

Steve Hanke, Professor of Applied Economics at Johns Hopkins University, said, in response to the Fed’s rate decision, that the Fed failed to account for the money supply growth in its monetary policy.

The Federal Reserve on Wednesday, January 29th, held its key interest rate steady, after cutting three times in a row last year. The current range for the Fed Funds Rate is 4.25 to 4.5 percent.

Jerome Powell, Chair of The Federal Reserve, said in a press conference that the Fed needs to see “real progress on inflation” or labor market weakness before further rate cuts.

“[Powell] never mentioned the money supply growth, he never mentioned credit growth, and those are… the drivers that fuel for the economy,” Hanke said. “To hit the Fed’s inflation target… of 2 percent, Hanke’s Golden Growth Rate for the money supply, measured by M2, is 6 percent per year.”

Hanke went on to say that the current M2 money supply growth rate is only 3.9 percent, which is “too slow.”

He added that the Fed should stop its quantitative tightening program.

“The Fed is too tight,” said Hanke. “… A 25 basis point reduction [in the Fed Funds rate]… would be okay, not a big deal one way or the other. The big deal is quantitative tightening.”

At the current rate of money supply growth, the economy is going to “slow down” in 2025, said Hanke.

“The nominal GDP will go down because inflation will go down,” he said. “I think [inflation] will be dipping down, by the end of the year, below the 2 percent target actually, and I think the real growth will be slow.”

ECONOMY:
FED TO LAUNCH ‘BAZOOKA’ AFTER CRASH
Matthew Piepenburg, January 26, 2025

Matthew Piepenburg, Partner at Von Greyerz AG, said that the Federal Reserve would unleash a “bazooka” of stimulus following an upcoming market crash.

“You’ve got a very narrow, over-valued market by every indicator,” he said. “Eventually the laws of gravity will apply… The question is will the Fed wait for a crash to then pull out the bazooka?… Will we have a Nikkei ‘89 that stays down for a long time, or will we have another dip, buy the low, and see QE sustain this market?”

Saving the bond market would be especially important for the Fed in the event of a market crash, according to Piepenburg.

“If you don’t support an otherwise unloved U.S. Treasury, then bond yields rise, [which] means the cost of debt rises,” he explained. “Yields are the real interest rate, not the Fed Funds rate, and so if yields rise, that crushes just about everything but the U.S. dollar.”

The risk to the bond market is greater due to rising U.S. national debt, said Piepenburg.

“The rest of the world is catching on that the U.S. is too massively in debt,” he said. “It’s a bad credit from a bad issuer… [The U.S. government needs] more support from the Fed if they really want to cut some of the expense of interest.”

Piepenburg also said that the U.S. is unlikely to reduce its debt until it cuts military spending and entitlements.

“The only way to really cut spending is to do something severe in the military budget or the entitlements,” said Piepenburg. “You have the optics of the DOGE, but the real spending cuts are going to have to come from politically difficult areas like the military, like entitlements. They’re massive.”

COMMODITIES
’ECONOMIC DILEMMA’ FOR INVESTORS
Rick Rule, January 24, 2025

Rick Rule, President and CEO of Rule Investment Media, said that political constraints had limited the development of oil and gas over the past few years, especially in Canada.

“[Canada] could be a much larger exporter of oil and gas,” he said. “The problem hasn’t been technical, it’s been political. [Prime Minister Justin Trudeau] decided there was no business case for Canadian natural gas, despite the fact that it sold for $2 a million BTU in Alberta, and $14 million [Canadian dollars] in Rotherham or Shanghai.”

However, a change in political regimes both in Canada and the United States would lead to benefits for the oil and gas sector, said Rule.

“I think that we’re headed into a period that is extraordinarily bright,” he said. “Canadian [oil and gas] will do better than most, because the governmental constraints to the production and export of both Canadian heavy oil and Canadian natural gas are really, really, really changing… At the same time, the transmission infrastructure blocks in the United States, that occurred during the Biden era, are likely to be gone too.”

Despite an escalating trade war, with Canada threatening to cut off energy supplies to the United States in case Trump implements tariffs, Rule said that he is not concerned.

“This is a non-starter,” said Rule. “This is Mr. Trump pandering to his base.”

When it comes to inflation, Rule said that the CPI Index is a “flawed” measure, and that true inflation.

“The idea that the basket of goods and services that you consume… has only gone up by 2.5 or 2.6 percent compounded in the period 2020 to 2025 is farcical,” he said. “The underlying depreciation in the purchasing power of the U.S. dollar is probably more like 7.5 or 8 percent.”

CRYPTO:
BITCOIN’S NEXT PRICE SURGE
Markus Thielen, January 26, 2025

Markus Thielen, CEO of 10x Research, predicted that in the short-term, Bitcoin would hit $122k.

“When you look back over the past 12 months, we have been moving in $16k to $18k increments,” he explained. “So the fact is that we’re sort of… struggling around this $90k to $106k range, so the next $16k range is going to be $122k.”

He said that the Chinese New Year could be a “big catalyst” for buying, as a lot of Bitcoin demand comes from China.

“When you look back in early 2014, actually 90 percent of all Bitcoin trading was in China,” he said. “So the Chinese New Year that we’re going to have next year might be a big catalyst.”

Thielen said that over time, Bitcoin had kept its purchasing power, and has functioned as a “store of value.”

“[Bitcoin] is of course too slow, or too small really, to be a monetary currency,” he said. “So Bitcoin is not a currency but it is a store of value… Bitcoin is a gross operating business with a network effect that keeps on growing.”

When it comes to the policy idea of a Bitcoin strategic reserve, Thielen said that there is “no reason really to doubt” that it would be implemented.

“I think [Trump] is quite in favour of this view of a strategic Bitcoin reserve, and all [the U.S. government] has to do is not sell [the Bitcoin they already have],” he said. “I think it’s just a matter of time until they announce it.”

WHAT TO WATCH

Monday, February 3, 2025

• Construction Spending — The amount spent on construction over the prior month.

Wednesday, February 5, 2025

• U.S. Trade Deficit — Monthly U.S. trade deficit data will be released.

Thursday, February 6, 2025

• Bank of England rate decision — The Bank of England’s Monetary Policy Committee will meet to make an interest rate decision.

Friday, February 7, 2025

• Unemployment Rate — The unemployment rate, the share of jobless in the labor force, will be released.

TABLE OF CONTENTS

1. Market Recap: Keith McCullough on how DeepSeek is crashing markets

2. EQUITIES: Chris Vermeulen on why markets are on verge of breakout

3. STOCK IDEA: DOLLY VARDEN SILVER

4. ECONOMY: Richard Wolff on how a tariffs could bring about ‘catastrophe’

5. ECONOMY: Danielle DiMartino Booth on why massive job losses are coming

6. ECONOMY: Former Fed Chief Tom Hoenig on the ‘inflationary boom’

7. ECONOMY: Steve Hanke on Trump’s tax cuts, tariffs, and inflation

8. CRYPTO: Galaxy’s Steve Kurz weighs in on Trump’s crypto policies

9. TECH: Stargate is the ‘most important U.S. investment,’ says Arthur Herman

10. What to Watch

MARKET RECAP

Latest News. Markets were down on Monday, January 27th, after news that DeepSeek, a Chinese AI startup, is threatening U.S. artificial intelligence dominance.

Over the trading day, the tech-heavy Nasdaq was down 3 percent and the S&P 500 fell 1.5 percent. Nvidia crashed 16.9 percent, shaving off $589 billion in market capitalization.

DeepSeek’s new AI model, R1, is reportedly as efficient as ChatGPT-4, at one-thirtieth the cost. DeepSeek said it used older Nvidia H800 chips for training, spending less than $6 million in the process.

On January 26th, DeepSeek was the most downloaded app on Apple’s App Store.

Keith McCullough, CEO of Hedgeye Risk Management, said that DeepSeek had “the gun pointed right at the head” of Nvidia and other large cap tech stocks.

“[DeepSeek has] a far lower cost [than ChatGPT] and… a more efficient search on a narrower and, one would say, a more kind of expert field,” said McCullough. “Instead of just looking at the entire hospital with ChatGPT, [with DeepSeek] you’d be asking specific specialists.”

McCullough was referring to the DeepSeek’s programming, which allows the AI model to draw from domain-specific insights, as opposed to general-purpose outputs like ChatGPT. This allows for faster processing.

DeepSeek’s breakthrough suggests future opportunities for AI and tech, said McCullough.

“I think, generally speaking, there’s probably a lot of opportunity,” he said. “This is talking about super-expensive GPUs from Nvidia becoming much lesser of a cost, in terms of people having to have those chips.”

However, McCullough said that he would short Nvidia “on any bounce.”

“Before this [correction] happening today, revenues were going to decelerate through the year at Nvidia,” he explained. “It’s an expensive stock with growth slowing, [and] now [there’s] a huge competitive threat staring right at [it].”

Market Movements

From January 20th to January 27th, the following assets experienced dramatic swings in price (Please note that U.S. markets were closed on January 20th for Martin Luther King, Jr. Day). Data are up-to-date as of January 27th at 9pm ET (approximate).

1. TRUMP coin — down 17.2 percent.

2. Nvidia — down 15.8 percent.

3. Oracle — down 8.2 percent.

4. Moderna — up 16 percent.

5. Netflix — up 11.8 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — down 1.5 percent.

Bitcoin — down 0.7 percent.

Gold — up 0.5 percent.

10-year Treasury yield — down 1.6 percent.

S&P 500 — down 0.6 percent.

Russell 2000 — down 1.4 percent.

USD/yuan — down 0.9 percent.

EQUITIES:
MARKETS ON VERGE OF BREAKOUT
Chris Vermeulen, January 21, 2025

Chris Vermeulen, Founder and CIO of TheTechnicalTraders.com, said that markets are on the verge of a breakout following Trump’s inauguration.

Vermeulen said that he is currently holding a U.S. dollar index (DXY) ETF, waiting to deploy cash.

“I’m hoping the stock market is going to have one more push higher,” he said. “Potentially in the next week or so, we’ll have another buy signal to re-enter the stock market. The Nasdaq has potential to run about 10 to 11 percent [higher].”

When it comes to bonds, Vermeulen predicted that they would “rise from the ashes” once the markets given the right signals.

“We need a lot of blood on Wall Street for them [The Federal Reserve] to start cutting some rates,” he explained. “Once they start doing that, bonds are going to put in, I think, a miraculous rally.”

Vermeulen also said that he prefers to hold gold as a commodity, as opposed to gold mining companies, citing the latter’s volatility.

“There is going to be a sweet spot to get into miners… [but] we’re not there yet,” he said. “Gold I think will hold its value and go a little higher. Gold stocks, I think they’re a struggle, they’re a higher-risk play.”

STOCK IDEA: DOLLY VARDEN SILVER (TSX.V:DV | OTCQX: DOLLF)
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Watch my last interview with Dolly Varden Silver CEO Shawn Khunkhun in which he discusses the growing deficit that the silver market faces, as well as the future of the silver mining industry:

ECONOMY:
ECONOMY COULD BE ‘DESTABILIZED’
Richard Wolff, January 24, 2025

Richard Wolff, Professor of Economics Emeritus at the University of Massachusetts Amherst and Co-Founder of Democracy at Work, said that President Trump’s proposed tariffs would be inflationary, and that The President’s economic policies would fail to bring down the cost-of-living.

“Tariffs are a tax,” said Wolff. “If we tariff — that is, tax — imports to this country, even on a small scale, in the manner Mr. Trump has been talking about, the result will not be to bring down prices, but to raise them.”

He added that Trump’s tariffs are at odds with the President’s aim to control the southern border.

“If you hit [Mexico] with tariffs, it will shut off a significant portion of their exports… [and, alongside a loss in remittances due to deportations,] that is a recipe to fundamentally destabilize an economy,” Wolff explained. “We’re going to have, on our southern border, an enormously dysfunctional catastrophe.”

Wolff said that Trump’s executive action on improving affordability was “just fluff.” Wolff said that to address the cost of living, price controls should be implemented, like they were by President Richard Nixon in 1971.

“If prices are going up, it’s because employers make the decision to raise them,” he explained. “If you want to control inflation, the first thing to do is to understand, you’ve got to deal with the 3 percent of the people who are employers.”

When it comes to foreign policy, Wolff said that Trump has the leverage to end the Ukraine conflict.

“Russia has made their demands crystal clear,” said Wolff. “The question is only, will Mr. Trump be able to force the Ukrainians to the table to cut a deal.”

ECONOMY:
MASSIVE JOB LOSSES COMING
Danielle DiMartino Booth, January 23, 2025

Danielle DiMartino Booth, CEO of QI Research, said that the U.S. economy could experience 100,000 job cuts in January as the economy continues to weaken.

“We’re on a run rate to probably hit 100k-110k job cut announcements in the month of January,” she said. “I think we’re going to see the unemployment rate continue to rise.”

DiMartino Booth said that the U.S. economic slowdown started in earnest in 2022, based on her reading of the data.

“All of the charts are in agreement,” she explained. “Things bottomed in late 2022, and since then, we now have Americans [experiencing] the median duration of unemployment at 10.4 weeks… You have to go back to 2008 to find that length of time.”

Despite the fact that the National Federation of Independent Businesses’s (NFIB) small business survey showed renewed optimism ahead of the Trump presidency, DiMartino Booth said that this sentiment was disconnected from reality.

“The optimism, the hopium, has to match what we’re actually seeing on the ground with hiring,” she said. “If your average post-war recession was 11 months or so, we need to start talking about when the U.S. economy is going to come out of recession.”

Given the policy uncertainty surrounding the new Trump administration, DiMartino Booth recommended holding gold.

“Gold is going to be the ultimate hedge,” she said. “Nobody knows what Trump is going to do, so your safest place to be in highly uncertain times is gold.”

ECONOMY:
’INFLATIONARY BOOM’ IN 2025
Tom Hoenig, January 20, 2025

Tom Hoenig, former Vice Chairman of the FDIC and former President of the Kansas City Fed, said that inflation is unlikely to come down in 2025, and that an “inflationary boom” is currently underway.

“We’re in somewhat of an inflationary boom right now, not in terms of large inflation, but the fact that it won’t come down” he said. “And that reflects a very strong economy, [as well as] several quarters if not years of stimulative policy, which includes subsidies for infrastructure on the deficit side, green energy, [and] other spending programs that I think help move the economy in terms of demand.”

Hoenig added that the Federal Reserve’s 100 basis points of interest rate cuts were also stimulative, lending support to higher inflation rates.

“If inflation is… let’s just say 3 percent to round off, and the interest rates are 4 [percent], [that] means real rates are 1 percent,” he said. “That’s probably stimulative.”

Because he expected inflation to remain high and the economy to be strong, Hoenig said the Fed should not be “in a rush to cut rates.”

“If they’re fortunate enough to see some… disinflation come forward, that’s great, but I don’t necessarily think they should ease rates,” he said. “Now, if there’s some kind of a shock, or there’s some kind of a significant slowdown, I can understand considering whether they need to do rate cuts, but I don’t anticipate that at the moment. In fact, I anticipate the opposite.”

ECONOMY:
WILL ECONOMIC CRISIS HIT IN 2025?
Steve Hanke, January 19, 2025

Steve Hanke, Professor of Applied Economics at Johns Hopkins University, said that President Donald Trump’s tax cuts should be extended to ensure strong economic growth.

Hanke ascribed the U.S.’s economic “exceptionalism” in part to low taxes, which he argued had boosted productivity, as compared to Europe with its higher taxes.

“A healthy economy rests on reasonable taxes,” said Hanke. “Look at how the European economies have collapsed… The European tax take is over 50 percent in Germany, France, and Italy. It’s almost unbelievable.”

In response to Treasury Secretary Scott Bessent’s claim that the U.S. could experience an economic crisis at year-end if Trump’s tax cuts are not renewed, Hanke said that tax increases would “slow the economy down.”

Hanke added that to address the U.S. government deficit spending cuts should be pursued instead of tax increases.

“If you’re worried about deficits, which Bessent is clearly worried about… you have to cut government spending and retain the current tax structure that we have,” he explained. “I’m for cutting government spending… Actually, I would like to cut taxes and move to a flat tax.”

When it comes to the impact of Trump’s proposed tariffs on inflation, Hanke said that tariffs do not affect inflation, though they will chance relative prices.

“The thing that affects inflation is the change in the money supply,” he said. “The things that we import, that have big tariffs attached to them, those would go up in price relative to other things… But the price level is an aggregate of hundreds of goods and services, and that is affected by the money supply.”

CRYPTO:
TRUMP’S FIRST 100 DAYS — EFFECT ON CRYPTO
Steve Kurz, January 22, 2025

Steve Kurz, Founder Partner and Global Head of Asset Management at Galaxy Digital, said that Trump’s presidency would likely be bullish for crypto.

"I would be surprised if there wasn’t an executive order that at least pays lip service to things like crypto regulations, perhaps to the Bitcoin strategic reserve,” said Kurz, who was speaking on January 16th, four days prior to Trump’s inauguration.

However, Kurz expressed hesitation about the idea of a Bitcoin strategic reserve.

“Why should the U.S. have a strategic Bitcoin reserve, and does the U.S. strategic Bitcoin reserve necessarily make it seem like we’re too weak with the U.S. dollar, or we need something to prop up the dollar?,” he said. “That’s a big question for the government… I’m not sure that it’s a good thing for the U.S. that they do go that far.”

He added that putting cryptos and Bitcoin into a U.S. sovereign wealth fund would “make a lot more sense.”

When it comes to stablecoins, Kurz said that the U.S. government should promote the use of dollar-backed stablecoins as a cross-border payment mechanism.

“It’s literally both a 10X savings in cost to the current system, and it’s a more than 10X savings in speed,” he explained. “The existing system is very, very fragmented and very, very expensive.”

In terms of a Bitcoin price target, Kurz said that Bitcoin could reach $150k within a year.

“It could go higher than that, but it’s going to take hundreds of billions of dollars coming into the space for that to happen,” he said. “I don’t think that’s happening in one year. I think that’s going to happen over many years, and Bitcoin will be much higher than $150k in the medium to long term.”

TECH:
’MOST IMPORTANT U.S. INVESTMENT’
Arthur Herman, January 23, 2025

Trump’s ‘Stargate’ initiative, which involves a $500 billion investment in AI infrastructure, is the “most important American investment” today, according to Arthur Herman, Senior Fellow and Director of The Quantum Alliance at The Hudson Institute.

While expressing optimism about Stargate, Herman said that AI has to go beyond generative AI programs like ChatGPT, and must have direct industrial applications.

“If Stargate is something that engages all aspects of AI as a force multiplier, as a game changer in our economic and national security, I’m all for it,” he said. “But it’s got to be able to do more than just be able to replace human thinking when it comes to daily tasks or writing term papers, or all the things we’ve come to expect with ChatGPT.”

Turning to the topic of quantum computing, Herman said that quantum computers can potentially be more efficient than traditional computers.

“The quantum computer’s key advantage is not that it’s faster than supercomputers, but that it’s able to skip multiple steps in terms of the calculation of numbers and the quantification of data,” he explained. “Instead of reading the entire Library of Congress book-by-book, you’re able to read the entire Library all at once.”

However, Herman said that quantum computing can be risky, especially since it increases the chance that the Bitcoin network and Fedwire can be hacked.

“The hacker is going to appear as a user of Bitcoin, as an investor, and so they’ll have access to everything that operates within the network, within the blockchain, and that means they’ll be able to manipulate and control in ways that none of the other users will be aware of until the value is gone,” he explained. “It’s a stealth and persistent threat, and that’s what makes it so qualitatively different from a conventional hack of the kind that we’ve become used to.”

WHAT TO WATCH

Monday, January 27, 2025

• New Home Sales — This shows the number of new homes that were sold over the prior month.

Wednesday, January 29, 2025

• FOMC Decision — The Federal Open Market Committee will meet to make a decision about the Federal Funds Rate.

• Bank of Canada Rate Decision — The Bank of Canada’s Governing Council will set the Bank’s key interest rate.

Thursday, January 30, 2025

• Pending Home Sales — This shows the number of pending home sales that were recorded over the month.

Friday, January 31, 2025

• PCE Index — The Personal Consumption Index (PCE) and Core PCE Index are the Federal Reserve’s preferred measures of the price level.

TABLE OF CONTENTS

1. Market Recap: Chris Vermeulen on why a 25 percent market pullback is likely

2. EQUITIES: Thomas Hayes on post-inauguration market activity

3. EQUITIES: Darius Dale on why a 2025 market crash is likely

4. EQUITIES: Bank of America’s Joe Quinlan on why stocks will thrive in 2025

5. ECONOMY: Lobo Tiggre on The Fed’s next move and inflation’s return

6. TECH: Stephen Yiu on whether a Tech Bubble 2.0 is happening

7. POLITICS: Why Prime Minister Justin Trudeau resigned

8. What to Watch

MARKET RECAP

Latest News. After a significant correction over the past few weeks, markets are starting to recover amidst President-elect Donald Trump’s inauguration on January 20th.

On Friday, January 17th, the S&P was up 1 percent, the tech-heavy Nasdaq rose 1.5 percent, and the Russell 2000 increased by 0.4 percent.

Markets corrected two weeks ago, on January 8th, following news that the Federal Reserve intends to limit the pace of rate cuts in 2025. The news broke after the Fed’s December meeting minutes were released.

As a result, Bitcoin crashed from a high of over $100k on Tuesday, January 7th, to almost $93k on Wednesday, January 8th.

Bitcoin has since recovered from this low, and was trading above $100k on Friday, January 17th.

Over the week starting Monday, January 6th, the S&P 500 was down 1 percent, while the tech-heavy Nasdaq was down 1.2 percent. The 10-year Treasury yield was up 3 percent.

On Friday, January 10th, the markets further fell in intraday trading, following news of a positive jobs report, with unemployment falling to 4.1 percent. This was interpreted as news that the Fed won’t cut rates.

Chris Vermeulen, Chief Market Strategist at TheTechnicalTraders.com, said that chart patterns had been predicting a market correction for a while.

“The market has been telling us for a little while that it’s been rolling over, and the Nasdaq is a good leading indicator,” he said. “The internals were telling us, hey, there’s big money flowing out of this market, and the Nasdaq was the first to give this signal.”

Vermeulen predicted that this would be the start of a longer correction, warning that the markets could “really collapse.”

“I think this could be the start of a much bigger correction,” he said. “I think we could see a big pullback of potentially 15 to 25 percent, and then… we might actually see another much larger drop after that.”

If the Fed does not cut rates, then Vermeulen said that investors would prefer to stay in cash, which would further affect markets negatively.

“If rates are going to stay up here, they [investors] are going to be like, you know what, I’ll just stay in cash, I’ll earn… risk-free interest,” he said. “That’s why the stock market is selling off.”

Market Movements

From January 10rd to January 17, the following assets experienced dramatic swings in price. Data are up-to-date as of January 17th at 9pm ET (approximate).

1. Sugar (commodity) — down 5.3 percent.

2. GameStop Corp. — down 14.9 percent.

3. MicroStrategy — up 20.9 percent.

4. Trump Media & Technology Group — up 13.4 percent.

5. GEO Group — up 14.3 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — down 0.2 percent.

Bitcoin — up 9.6 percent.

Gold — up 0.4 percent.

10-year Treasury yield — down 2.9 percent.

S&P 500 — up 2.9 percent.

Russell 2000 — up 3.9 percent.

USD/yuan — No significant change.

EQUITIES:
MARKET SHIFT POST-INAUGURATION
Thomas Hayes, January 16, 2025

Thomas Hayes, Managing Member of Great Hill Capital, said that international equities would benefit following President-elect Donald Trump’s inauguration.

“When Trump was elected [to his first term, starting in 2017]… everyone thought you had to be all U.S.,” he explained. “[But] international and emerging markets actually outperformed after the dollar rolled over, after the inauguration.”

Hayes said that international markets are cheap relative to those in the U.S., yet would generate similar returns.

“International [markets are] going to have 13-14 percent earnings growth compared to the U.S., [which is] about 14 percent earnings growth,” he explained. “The difference is, [in the] U.S., you’re paying 22 times [earnings], [while] international you’re paying 15 to 15.5 times.”

When it comes to Trump’s policies, Hayes said that the President-elect’s proposed trade policies would not be as disruptive as Trump himself suggests.

“We’ve been of the camp it won’t be as bad as advertised,” he said. “I think the advertisement was 60 percent tariffs across-the-board. I think that’s going to be more modest and more reasonable, like we saw in Trump 1.0.”

Hayes predicted that markets would react to Trump in 2025 in a similar manner as they did to his policies in 2017.

“As you saw in 2016 to 2017, while the dollar rallied after the November election and bond yields really accelerated after the election, after the inauguration, bonds got bid, yields compressed for the next year plus, the dollar rolled over, international stocks took off, biotech stocks took off, oil stocks collapsed,” he said. “It was the exact opposite of what everyone was expecting and we think it could be some version of that.”

EQUITIES:
MARKETS SET UP FOR CRASH IN 2025
Darius Dale, January 15, 2025

Darius Dale, Founder of 42 Macro, said that “conditions are in place for a market crash in 2025.”

He pointed in particular to the roles of refinancing government debt, harsher immigration policies, and a more hawkish Federal Reserve.

“If we get a significant deceleration in liquidity this year, at the same time we have a significant acceleration in global refinancing demand, the markets will crash in 2025,” explained Dale.

52.5 percent of Dale’s asset allocation is in cash, a decision he said is based on his firm’s quantitative model, and not purely on fundamental factors, though he also said that his outlook is “risk-off.”

He added that he is worried about the incoming Trump administration’s economic and border policies, and their impact on economic growth.

“[There will be potentially] dramatic fiscal and regulatory policy changes,” he said. “One of those changes, in my opinion, is the likelihood that we’re probably going to see tariffs and a change in border policy that could potentially create a negative supply shock to the economy… That could potentially cause problems in asset markets, alongside the fact that we are likely to see a hawkish shift in treasury net financing policy in terms of the composition of treasury financing.”

In addition, Dale said that the average investor, who maintains a bullish stance on markets, may be in for a surprise in 2025.

“The average investor out there is already positioned for good news, for the resiliency of the economy to persist,” he said. “Essentially what we’re saying is, based on some of the dynamics that we’re observing in our fundamental research process, specifically as it relates to the backup, the hawkish repricing of the treasury curve, and the strength of the U.S. dollar, these are things that may actually cause that positioning to unwind.”

EQUITIES:
WHAT WILL SHOCK MARKETS IN 2025?
Joe Quinlan, January 4, 2025

In 2025, the S&P 500 will reach a level of 6,666, based on good earnings and a strong economy, according to Joe Quinlan, Bank of America’s Head of Market Strategy.

“[We expect] good earnings overall, better breadth, an economy that continues to expand — say 2.5 percent,” said Quinlan. “We think a lot of these [upcoming] policies… whether it’s lower corporate taxes, deregulation, fires up the animal spirits.”

Quinlan added that the Bank of America does not expect a recession to manifest, and said that even Trump tariffs would not derail the economy.

“Assuming these [tariffs] are targeted, not they’re blanket, and they’re directed more at China than our… trading partners, Mexico or Canada, that you could shave off 0.1-0.2 percent off GDP,” he said. “But there’s enough demand out there, enough capital expenditures out there, to keep the economy moving forward by that 2-2.5 percent over 2025.”

When it comes to Fed policy, the Federal Reserve would closely watch the policies of incoming President Donald Trump, said Quinlan.

“The Fed, in general, is trying to game out what happens to prices if the incoming administration does what they promise to do — raise tariffs, anti-immigration which creates labor problems,” he said.

The Bank of America predicts that the Fed will cut rates twice in 2025, according to Quinlan.

“In general, when you’ve got… high-income consumers out there spending, and you see it in services across the board, then it’s hard to really pencil in this recession, and therefore [have] the Fed continue to cut as aggressively as the Street thought they were going to,” he explained.

ECONOMY:
THE FED’S NEXT MOVE
Lobo Tiggre, January 6, 2025

Lobo Tiggre, Editor of The Independent Speculator, said that the Federal Reserve cut rates in December because of a weak U.S. economy.

“[The Fed] cut anyway, even though they knew that inflation has been going up, and not just [for] one month — two months now,” he explained. “In my view, despite the hawkish cut… the Fed knows that the U.S. economy is weaker than it seems… I think this is why they’re cutting in the face of higher inflation.”

He added that inflation is “coming back,” due to high fiscal spending.

“There is so much money flooding out of Washington… and it takes time for that money to percolate through the economy,” said Tiggre. “They [the government] are running wartime levels of deficit spending and Trump is not proposing to cut that.”

Tiggre said that “sticky inflation is a global phenomenon,” because most countries had increased spending in response to the pandemic.

He also expressed skepticism about Trump’s Treasury Secretary nominee, Scott Bessent, when it comes to his ability to reduce the deficit.

“The markets are pricing in success, not only before it’s happened, but success that has never happened,” said Tiggre, referring to Trump’s plans to reduce the deficit. “By the way, if they do actually manage to cut something, if we do actually increase government efficiency, that in and of itself causes near-term pain… I’ve watched politicians promise this sort of thing before and they’ve never delivered.”

TECH:
TECH BUBBLE 2.0?
Stephen Yiu, January 7, 2025

Stephen Yiu, CIO of The Blue Whale Growth Fund, said that the technology market is unlikely to be in bubble territory, because tech valuations are underpinned by good earnings and efficient technology.

“Technology companies today, while [they’re] a bit more expensive today compared to the last ten years… they are highly profitable,” he explained. “Hence the valuation is less expensive compared to during the tech bubble [of the 1990s].”

He added that technology now is also a lot more efficient than during the 90s, which allows tech companies to have better products and a wider consumer base.

“Today… you can watch YouTube, you can play games, you can socialize with your friends, you can use Teams or Zoom, and there’s a lot more things that you’ll be spending money and time with,” he said. “I would say that building up the AI capability today is a lot easier than building internet infrastructure 20, 30 years ago.”

Yiu’s firm, Blue Whale Growth, aggressively sold shares in Microsoft in 2024, because of the lower return on Microsoft’s investments in artificial intelligence — in particular, Microsoft’s CoPilot AI suite, which requires Microsoft to spend on Nvidia’s infrastructure.

“We are actually seeing, or expecting, the return on invested capital of this company to be coming down from here,” he said. “Hence, we are significantly underweight Magnificent 7, with the exception of Nvidia.”

Because it is required for so many AI applications, Yiu said that he is bullish on Nvidia, but that its future returns would be more muted.

“From our perspective, we still think Nvidia can outperform,” he said. “So if you say to me, oh the S&P is going to do another 10 percent [per] year in the next couple of years, we probably would think Nvidia can do like 15 percent — but it’s not going to make you rich, it’s not going to do what the share has done before.”

POLITICS:
WHY TRUDEAU RESIGNED
January 8, 2025

On Monday, January 6th, Prime Minister Justin Trudeau of Canada announced his intention to resign after his party finds a new leader.

Trudeau also suspended Canadian Parliament until March 24th, which means that Canadians will not get an election before May.

Following Donald Trump’s election as U.S. President, Trudeau has been described by media as “weak,” with Trump threatening to levy 25 percent tariffs on Canada. Trump has even joked that Canada should become the 51st U.S. state.

The poor state of Canada’s economy has weakened Canadians’ support for the Liberal Party, and boosted support for the opposition Conservatives, led by Pierre Poilievre.

In particular, 1-in-4 Canadians live in poverty according to a recent study, and many Canadians struggle with housing affordability — especially in cities like Vancouver and Toronto.

This is exacerbated by wage stagnation, which is driven by weak productivity and lower foreign direct investment.

Based on Polymarket betting odds, the next Prime Minister of Canada is most likely to be Pierre Poilievre.

WHAT TO WATCH

Monday, January 20, 2025

• Presidential Inauguration — Donald Trump will be inaugurated as 27th President of the United States.

• World Economic Forum (WEF) Annual Meetings — The WEF’s annual meetings will start on January 20th, and continue until January 24th.

Friday, January 24, 2025

• Existing home sales — The number of existing homes that were sold over the prior month.

• Bank of Japan rate decision — The Bank of Japan will make a decision on its key policy interest rate.

TABLE OF CONTENTS

1. Market Recap: Komal Sri-Kumar on how the Fed crashed markets

2. EQUITIES: A ‘mini depression’ is coming, says Chris Vermeulen

3. EQUITIES: Peter Berezin on a 4,550 S&P level in 2025

4. EQUITIES: Felix Zulauf on why ‘hell for investors’ is coming in January

5. ECONOMY: David Rosenberg on the market’s ‘rough year’ ahead

6. ECONOMY: ‘Buckle up’ for 2025, says Danielle DiMartino Booth

7. ECONOMY: Tavi Costa on the dollar peak and what it means for assets

8. ECONOMY: Jim Thorne on the ‘brand new monetary system’ that’s coming

9. ECONOMY: Ron Paul on ‘the biggest bubble of all history’

10. What to Watch

MARKET RECAP

Latest News. The much-anticipated Santa rally has proven to be elusive.

On Wednesday, December 18th, The Federal Reserve cut interest rates by 25 bps, bringing the Fed Funds rate to a range of 4.25-4.5 percent.

The Federal Open Market Committee (FOMC) forecasted only two rate cuts next year, despite having previously forecasted four rate cuts. Fed Chair Jerome Powell said that, “the slower pace of cuts for next year really reflects both the higher inflation readings we had this year and the expectation inflation will be higher.”

Markets reacted with a significant downturn. The Dow fell by 1,100 points or 2.6 percent, its tenth losing day in a row, and its longest losing streak since 1978. The Nasdaq fell 3.6 percent, and the S&P fell 3 percent. The 10-year Treasury yield spiked from 4.39 to 4.5 percent in intraday trading.

To understand Fed policy, inflation, and why the Fed caused a market correction on Wednesday, we spoke with Komal Sri-Komar, President of Sri-Komar Global Strategies and Author at .

Sri-Komar said that up until now, Powell had implicitly guaranteed that he would support equity markets, but on Wednesday he suggested that he would no longer continue to do so.

“I have been critical of [Powell] because of the fact that he’s not focused on just inflation, he’s focused really on the stock market, even though he doesn’t say so,” said Sri-Kumar. “And today’s developments — his press conference and the Fed decision — essentially told the markets that he may not be there to support them in the future.”

Powell was “irresponsible” to cut the Fed Funds rate to zero and increase the Fed’s balance sheet in 2020, according to Sri-Kumar, who said that this happened in the midst of “expansionary” fiscal policy and contributed to inflation.

He argued that inflation was set to rise in 2025, and so the Fed would not cut rates.

“[The] next move is either remain the same, or have an increase in the interest rate because inflation perks up significantly in the first half of 2025,” said Sri-Kumar.

In particular, Sri-Kumar singled out tariffs as a driving force behind an uptick in inflation as Trump takes office. Trump has threatened to levy across-the-board tariffs on Canada, Mexico, and China.

“Even if [Trump] does not increase by as much as he threatened, there is going be a significant amount of tariff increases which will in turn be passed on to U.S. consumers,” said Sri-Kumar. “That will push up the inflation rate, and that is going to make it very difficult for the Fed to keep cutting interest rates further.”

Sri-Kumar also mentioned that the fiscal deficit and corresponding debt service costs would have an “impact on inflation.” He said that the incoming Treasury Secretary, Scott Bessent, would face a challenge in bringing the deficit down.

“In order to [bring the deficit down], he will have to essentially deal with a number of what we call sacred cows,” said Sri-Kumar. “He has to deal with Social Security, Medicare, and entitlements which are automatically going to U.S. residents… He has to tackle them.”

Market Movements

From December 13 to December 20, the following assets experienced dramatic swings in price. Data are up-to-date as of December 20 at 9pm ET (approximate).

1. Blackberry Ltd. (NYSE: BB) — up 37.6 percent.

2. VIX Index — up 32.9 percent.

3. Papa John’s International (NASDAQ: PZZA) — down 13.1 percent.

4. MicroStrategy Inc.(NASDAQ: MSTR) — down 10.9 percent.

5. Rapeseed — down 5.6 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — up 0.8 percent.

Bitcoin — down 3.5 percent.

Gold — down 1.4 percent.

10-year Treasury yield — up 3 percent.

S&P 500 — down 2 percent.

Russell 2000 — down 4.4 percent.

USD/yuan — up 0.3 percent.

EQUITIES:
’MINI DEPRESSION’ COMING
Chris Vermeulen, December 20, 2024

Chris Vermeulen, Chief Market Strategist of The Technical Traders, said that the S&P 500 could pull back 35-55 percent over the next year or two, and that Bitcoin still has significant upside in 2025, diverging from and outperforming stocks.

In an interview on the show on November 28th, Vermeulen had predicted that Bitcoin would top at $108k in this trading cycle. On December 17th, Bitcoin indeed reached over $108k, its all-time high.

Vermeulen said that he had exited his Bitcoin position, and is now “just waiting to see what Bitcoin is going to do.” He said that Bitcoin could go as high as $160k, as long as the stock market does not see a significant correction.

“I think it could be like two, three months from now we could see [Bitcoin] actually pop,” he said. “It’ll be… a parabolic type move.”

When it comes to stocks, Vermeulen said that the last week’s market correction was a temporary blip, and that “we are still in a bull market.”

“It’s the market trying to buck you up, it’s the bull trying to get rid of you before it wants to go higher,” he said. “I think stocks are going to rally back up to the highs, potentially push to new all-time-highs by the end of the year.”

However, he warned that January could see the market top, leading to a 35 to 55 percent pullback in the S&P 500.

“We’re going to have a series of like, bear flags [in 2025] and it’s going to unwind,” said Vermeulen. “I do feel like we could see like, a 35, 55 percent pullback in the S&P 500 over the next year or two.”

He also predicted that most of the world would experience a “big recession,” which would “feel like a mini depression.”

EQUITIES:
START OF EVEN BIGGER CRASH IN 2025
Peter Berezin, December 18, 2024

The S&P 500 is likely to retrace towards 4,550 by the end of 2025, said Peter Berezin, Chief Global Strategist at BCA Research.

Berezin said that 2025 would be bearish for stocks. By contrast, most Bloomberg price targets for 2025 range from 6,500 to 6,800, according to Berezin.

He pointed to weakening labour market data as a sign of economic vulnerability.

“My view [on the stock market] is predicated on the U.S. entering recession next year,” he said. “The economy is vulnerable, and I think there are a couple of potential shocks that could easily knock it into recession.”

As examples of shocks, Berezin pointed to a “trade war” and Trump’s proposed tax cuts triggering a market “revolt.”

“I think that the market is just going to revolt if Trump tries to cut taxes by as much as he’s pledging,” said Berezin. “If we have a riot in the treasury markets, that’d be pretty nasty for the economy… certainly enough to trigger a recession.”

When it comes to the market’s strong performance over the year, Berezin said that much of it had been driven by Magnificent 7 tech stocks: Alphabet, Apple, Amazon, Meta, Microsoft, Nvidia, and Tesla.

“If you look at… the overall S&P 500 index, earnings growth for the 493 companies that are not the Magnificent 7 has actually been fairly weak,” said Berezin. “If you look at, say, the smallest listed companies [on the stock market], more than half of them are unprofitable.”

He said that consumer staples, healthcare, and utilities are examples of sectors that would not be “as badly hurt” during the market decline he expected to happen.

EQUITIES:
JANUARY WILL BE ‘HELL FOR INVESTORS’
Felix Zulauf, December 14, 2024

Felix Zulauf, Founder of Zulauf Consulting, said that 2025 would be a “rollercoaster year,” with a 1,000 point sell-off in the S&P 500, and 15-20 percent in the major indices starting in Q1.

“I expect the top, very soon, early in Q1 of 2025,” he said. “[This would be] triggered by uncertainty about the Trump trade policy, the tariffs, and perhaps also the DOGE [Department of Government Efficiency] cuts that people are talking about.”

Yet Zulauf said that in Q2, the Fed would step in to ease monetary conditions and support markets, setting off another rally. This could send the S&P 500 to as high as 7,000, according to Zulauf.

In the longer-term, Zulauf warned that Donald Trump’s trade policy could weaken the U.S. economy, drawing comparisons to The Great Depression.

“People should not forget that the intermediate-term correction that started in 1929… turned into a terrible mess, a global economic crisis, depression, and the market meltdown because in June of 1930 they introduced major tariffs with the Smoot-Hawley Act,” he said. “We have to watch very carefully what eventually comes out of Washington.”

Zulauf also pointed to Trump’s DOGE, headed by Elon Musk and Vivek Ramaswamy, which is tasked with cutting $2 trillion in government spending, as a trigger for a short-term market correction.

“Even if they cut out only half of what they said, it would be $1 trillion, and $1 trillion is about 3.5 percent of GDP,” he said. “While I applaud that structurally for the long-term, in the short-term it would be very painful.”

In general, Zulauf expected a “trading environment good for traders, and hell for investors,” due to uncertainty and volatility in markets.

ECONOMY:
’PRETTY ROUGH YEAR’ AHEAD
David Rosenberg, December 21, 2024

David Rosenberg, President of Rosenberg Research, said that the U.S. economy would be considerably weaker in 2025 relative to expectations.

Rosenberg pointed to weakness in the U.S. economy, as highlighted in several recent data releases.

“The Philly Fed Index swung to a pretty big negative,” he explained. “Most of the regional surveys, even on the services side, have been softening. Manufacturing is in a recession… It’s consistent with an economy that’s growing at a 1 percent annual rate, not 3.”

When it comes to the Dow Jones’s longest losing streak since the 1970s, Rosenberg said that this fits with his view that the economy is “cooling off.”

“We’re supposed to get the big Santa rally,” he explained. “December is almost always an up month, seasonally. The fact that it’s down month-to-date with a few days to go, that’s actually very surprising.”

Rosenberg forecasted that inflation would experience downward pressure in 2025, driven by a fall in housing costs.

“What’s going to compound the downward trend in inflation is going to be the rental components,” he said. “We have a massive pipeline of rental construction coming in in 2025 at a time when the vacancy rate nationwide is already at a cycle high. That is going to weigh on rents, and it’s starting to finally feed through, more dominantly, in the CPI data.”

ECONOMY:
’BUCKLE UP’ FOR 2025
Danielle DiMartino Booth, December 19, 2024

Danielle DiMartino Booth, CEO of QI Research, said that the U.S. is already likely in a recession, and that inflation would trend downwards into 2025.

DiMartino Booth said that even if Trump levies tariffs next year, shelter costs are falling, which would lead to a reduction in inflation.

“Goods are actually deflating by 0.6 percent year-over-year, so even if that is to turn positive in 2025, you still have a downward trajectory for the inflation rate going forward,” she said. “I happen to disagree with what the Fed determined in taking their inflation expectations upwards.”

She also disagreed with the Fed’s labour market projections.

“[The Fed’s] projection is that the unemployment rate is going to fall to 4.2 percent,” she said. “We have a complete deniability on Powell’s part… I do project that we will see a rising unemployment rate, and inflation begin to drift down as we get into 2025, and that the Fed will be forced to reverse course yet again.”

DiMartino Booth said that the U.S. economy is already in a recession, and that future revisions to economic data would demonstrate that this is the case.

“The recession begins several months before job losses begin,” she explained. “That would put it in March, April, May of 2024… It took the National Bureau of Economic Research 366 days to announce that a recession had started after it had begun in December 2007.”

She added that she hoped the recession would end “towards the middle of 2025.”

In terms of investment implications, DiMartino Booth said that safe, dividend stocks should do well. She also said that gold would be a “good play,” as well as bonds, in 2025.

ECONOMY:
DEATH OF THE DOLLAR?
Tavi Costa, December 17, 2024

Tavi Costa, Portfolio Manager at Crescat Capital, said that “the [U.S.] dollar holds the key for the entire market,” and that the dollar was reaching its cycle peak, which is bullish for other asset classes, such as emerging market stocks.

“When it starts moving higher, it basically attracts capital from all over the world into the U.S. dollar,” he explained. “It tends to inflate other things… it inflates either treasuries or equity markets or real estate, or something along those lines.”

When the dollar becomes stronger, the rest of the world becomes “cheap,” said Costa, causing capital to flow to emerging markets and under-valued sectors.

“If you look at Brazilian equities or the mining industry, they have not performed at all,” he said. “They… have not received any of those flows just yet… Things take time, and so those flows, at some point, will come back. And so I do think we’re in the process of seeing those things.”

He gave the example of billionaire hedge fund manager David Tapper, who was rotating into Chinese equities.

“The time to be short China, and negative on China, was 5 to 10 years ago,” Costa said. “I am not of that view anymore.”

As the dollar weakens in the future, Costa predicted that Chinese equities, Japanese stocks, and Latin American assets could perform well.

“We’ve seen two [political] trends happen in Latin America: the Bolsonaro trend, which has been more conservative, and then we’ve seen the Milei and El Salvador sort of libertarian movement,” he explained. “This is a big change in leadership in Latin America overall, so I do think this is going to translate into growth, and translate into inflows of capital at some point.”

ECONOMY:
’BRAND NEW MONETARY STANDARD’
Jim Thorne, December 16, 2024

Jim Thorne, Chief Market Strategist at Wellington-Altus Private Wealth, said that the incoming Trump administration will harness crypto to boost the U.S. dollar and form a new monetary system.

Thorne highlighted incoming President Trump’s pro-crypto policies, and said that Trump’s Treasury Secretary appointee, Scott Bessent, wants to negotiate a new monetary standard, backed by crypto.

“If the thing that basically is the bridge between the digital world and the analog world is stablecoins, and stablecoins are backed by the U.S. dollar and the U.S. Treasury, [then] the U.S. monetary leadership is insured for the next century,” said Thorne. “I think we are starting to see the early building blocks as we speak, and it’s going to happen under the Trump presidency.”

He added that if stablecoins are backed by U.S. Treasuries, then this would create a “massive demand for Treasuries,” which could be a solution to the U.S.’s deficit problem.

When it comes to Bitcoin, Thorne said that Bitcoin could reach $500k per token over the next four years due to rising demand and government policy.

“Trump is going to implement the [Bitcoin] treasury reserve,” he explained. “People need to take Mr. Trump at face value and… recognize the fact that we’re going to renegotiate and build a new Bretton Woods system. And I would suggest to you that Bitcoin and digital assets are going to be a major player in whatever this looks like going forward.”

Thorne said that in terms of assets, he would invest in the Nasdaq, the S&P 500, and Bitcoin in 2025.

ECONOMY:
’BIGGEST BUBBLE OF ALL HISTORY’
Ron Paul, December 15, 2024

Ron Paul, Host of The Liberty Report and former Congressman from Texas, warned about the rising U.S. deficit and debt levels, and said that this could lead to a lot of economic damage as the U.S. struggles to liquidate its debt.

Paul highlighted the danger of the U.S. government’s $36 trillion debt and “out of control” deficit. He pointed to the Federal Reserve as the root of the U.S.’s fiscal problems.

“[The Fed] has created the biggest bubble of all history, and that is the $36 trillion of [debt],” Paul explained. “There will be liquidation of the debt… I think interest rates would go up and prices would go up, and that would be part of the liquidation.”

Paul warned that if nothing is done to reduce the size of the debt and deficit, “there will be big pain and suffering.”

“I think that we should wean ourselves off [excessive government spending], but I think the political forces are so strong,” he said. “The military-industrial complex, the pharmaceutical industry, the whole works, the welfare state — they are not going to accept that… I fear that the consequence of this situation is actually, you know, violence.”

He added that deficit reduction measures, like those proposed by the Elon Musk and Vivek Ramaswamy’s DOGE, will face political obstacles.

“[The DOGE] is talking about getting rid of some of the bureaucrats, but believe me, there is a powerful force that runs Washington, and those are the special interests and the lobbyists, and they really control things,” said Paul. “I don’t think it’s going to work because I think the people who are going to be hurt by cutting [government] spending are going to be very, very noisy… it’s like drug addiction.”

Paul said that he is “not in favour of” tax increases, and that deficit reductions should come via cuts.

“The government is way out of control,” he said. “It goes back to the Fed. [The] Fed is the backbone of this whole system, because it wouldn’t be this size if you didn’t have [the] reserve currency of the world that’s doing, still, better than it deserves… This bubble can’t just keeping getting bigger without bursting.”

WHAT TO WATCH

Monday, December 23, 2024

• Consumer Confidence — These data reflect the degree of optimism or pessimism that consumers feel about the overall state of the economy and their personal financial situation.

Tuesday, December 24, 2024

• New Home Sales — The number of new houses that were sold in November.

Thursday, December 26, 2024

• Initial Jobless Claims — This measures the number of individuals filing for unemployment benefits for the first time.

TABLE OF CONTENTS

1. Market Recap: Mike McGlone on ‘severe deflation’ in 2025

2. EQUITIES: Markets are ‘insane,’ says Gareth Soloway

3. EQUITIES: Fr. Emmanuel Lemelson on finding ‘deep value’ stocks

4. EQUITIES: Michael Gayed on his ‘bad feeling about December’

5. ECONOMY: Douglas Holtz-Eakin on a potential bond market ‘revolt’

6. REAL ESTATE: Ron Butler on the ‘catastrophic’ housing problem in Canada

7. What to Watch

MARKET RECAP

Latest News. Consumer Price Index (CPI) data were released on Wednesday, December 11th, showing an uptick in inflation in November. Year-over-year headline inflation was 2.7 percent, in line with expectations, while core inflation, which excludes food and energy, rose 3.3 percent.

Markets reacted positively, with tech stocks leading the way. The Nasdaq Composite rose 1.7 percent on Wednesday, with Alphabet, Tesla, Meta, and Amazon hitting record highs. The S&P 500 rose 0.8 percent. Bitcoin soared from under $98k to $101,300 per coin in intraday trading. The 10-year Treasury yield rose by 0.07 percentage points.

Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, discussed the latest CPI report, as well as what the future holds for risk assets and commodities.

McGlone said that much of the uptick in the recent CPI reading came from a 4.7 percent year-over-year increase in shelter costs. He said that many market observers do not predict inflation will drop significantly in the near-term.

“It might be kind of silly to expect inflation to drop a lot when we have the stock market related wealth effect the highest in 100 years,” he said. “That is, we’ve had this massive pump in equities — it’s two times GDP — and that’s a massive wealth effect. So why should consumers stop spending?… And also we have a wonderful situation for [the] wealth effect: we have the stock market going up, and the Fed’s easing.”

McGlone warned, however, of “significant deflationary forces” in China, the world’s second-largest economy, where the 10-year note was “at 1.84 percent” on December 11th. He also said that U.S. stocks are highly “elevated,” when looking at metrics like market indices relative to GDP, which could imply a correction.

“The number one force for deflation in this country is a backup in the highest stock market valuation to GDP in 100 years,” he said. “Tariffs will happen right away [under a new Trump administration]… and maybe a little purging of some of those excesses there [in the U.S. bureaucracy]'; that means 2025, I think, is finally going to have a little bit of a backup.”

“We’re at the point now where every single outlook for next year assumes the stock market is going to go up,” said McGlone. “Just imagine if it drops 10 percent. That’s severe deflation, on the back of what’s happening in commodities.”

Bitcoin is a leading indicator for risk assets, according to McGlone, who said that the Bitcoin-gold ratio can be used to help determine when a correction in risk assets will occur. He mentioned that this ratio is currently around its 2021 cycle peak.

“The best leading indicator [for risk assets] might be Bitcoin,” he said. “On a 100 day basis, the Bitcoin to S&P 500 correlation is about 0.50, it’s the highest in its history.”

McGlone said, “The best case I think for gold, is if Bitcoin resistance around $100,000 holds, and eventually kicks down. That means all risk assets are expensive, signalling lower. That means a major, I think, tilt towards gold and treasury bonds.”

Market Movements

From December 6 to December 13, the following assets experienced dramatic swings in price. Data are up-to-date as of December 13 at 9pm ET (approximate).

1. Walgreens Boots Alliance — up 21.4 percent.

2. American Superconductor Corp. — down 17.2 percent.

3. Adobe Inc. — down 15.8 percent.

4. Natural Gas (Henry Hub) — up 6.2 percent.

5. Tesla — up 12.1 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — up 0.8 percent.

Bitcoin — up 3.8 percent.

Gold — up 0.5 percent

10-year Treasury yield — up 0.6 percent.

S&P 500 — down 0.6 percent.

Russell 2000 — down 2.6 percent.

USD/yuan — No significant change.

EQUITIES:
MARKETS ARE ‘INSANE’
Gareth Soloway, December 11, 2024

Gareth Soloway, Chief Market Strategist of Verified Investing, gave his market outlook, warning of a potential correction ahead.

Soloway predicted an “unbelievably nasty” downturn may occur in 2025, based on his chart analysis, as well as historically high stock market valuations when looking at PE ratios.

“Stock valuations are insane,” he said. “We are priced beyond perfection. In fact there’s no doubt there’s a bubble here… I am very skeptical that the markets will continue to go up.”

He said that U.S. consumer spending had been held up by the wealthy, whose stock market portfolios had seen substantial increases, allowing them to buy more goods and services.

“Anyone making under $50,000 can’t even go to McDonald’s anymore,” he said, “but the high end, which spends the most money, they are keeping the economy going. As long as the stock market keeps going up, the merry-go-round and the music will continue to play, but at some point it can’t.”

However, Soloway said that he is bullish on Chinese stocks, as well which he said would outperform global equities in 2025.

“So, number one, China is talking [about] massive stimulus now… [and] that’s bullish for equities in China,” he explained. “Number two, Trump has threatened massive tariffs on China. He generally threatens monstrous tariffs, and then he imposes something less. It’s a negotiating tool. So I think prices on China equities are reflecting a potential of these massive tariffs. My guess is… it won’t be as high as markets anticipate. That will be bullish.”

On Bitcoin, Soloway said, “As long as the stock market is going up, Bitcoin likely goes up with it. But once we see that correction in the stock market, or pullback in the stock market, Bitcoin likely comes back in.”

Yet, Soloway said he would buy Bitcoin if it corrects, especially given the incoming Trump administration’s pro-crypto stance.

EQUITIES:
MARKET’S HIDDEN GEMS
Fr. Emmanuel Lemelson, December 10, 2024

Fr. Emmanuel Lemelson, a Greek Orthodox priest and CIO of Lemelson Capital Management, discussed investing in “deep value” stocks in the midst of historically high market valuations.

Lemelson said that the markets are at “scary” levels when looking at The Russell 5000 to U.S. GDP.

“I think through the close of business yesterday… we hit a new record, it’s 2.09, I want to say,” he said, referring to the Russell 5000 divided by GDP. “The previous record was like 2.084.”

Yet, despite record market valuations, Lemelson said that there are sectors and strategies which can help investors turn a profit.

He singled out off-price retail as an undervalued sector, mentioning that his firm held stakes in Walgreens, Kohl’s, and Big 5 Sporting Goods.

“We own a stake in Big 5, which is a very unpopular sporting goods store,” he said. “They’ve been around for a very long time, they fill a niche market. They’re trading at a pittance, frankly, a fraction of tangible book value… Are people going to have their kids not do school sports next fall because the economy is [down]? Probably not.”

Lemelson said many of the major tech stocks are over-valued, and that his company had taken a short position in Tesla.

“A lot of these big tech names, it’s like the lemmings going over the cliff,” he said. “If you look at Tesla, for example… Do you really want to buy a company that the NTSB [National Transportation Safety Board] just said had the highest fatality rates, on the road, for its cars?… and yet people buy it, because it’s like a meme stock.”

When it comes to a broader macroeconomic outlook, Lemelson said that he was hopeful about the new Trump administration.

“He’s got a lot of really great businessmen that he’s appointing in his cabinet,” he said, pointing to the examples of David Sacks and Paul Atkins. “I do believe he [Trump] will do what’s in the best interests of the country.”

EQUITIES:
’THIS WILL END BADLY’
Michael Gayed, December 7, 2024

Michael Gayed, Publisher of , talked about his bearish outlook for markets, and the assets he is most bullish on.

In 2023, Gayed had predicted the unwinding of the carry trade between Japan and the U.S. This trade involves investors borrowing from Japan at near-zero interest rates, and using the money to buy U.S. risk assets.

When the Bank of Japan (BoJ) raised its interest rates in July of 2024, this triggered a sell-off in U.S. risk assets, so that investors could cover higher interest payments in Japan.

Gayed said that the unwinding of the carry trade may not be over, and that it is still “lingering.”

“I have a bad feeling about December… because there is a BoJ decision coming up,” he said. “It seems like they need to hike rates… Japan has a real inflation issue, and if The Bank of Japan does panic to try to counter the inflationary pressure, then you might have a repeat of August [when the carry trade unwound].

He warned that U.S. markets are caught up in a “speculative mania” that would “end badly.”

“It’s unlike other speculative manias in the sense that it’s very concentrated… in tech stocks, it’s concentrated in Bitcoin and some certain cryptocurrencies,” he said. “It’s concentrated also in levered funds… It’s very clear, we’ve become a gambling nation. Everyone is just trying to YOLO into 2X and 3X and individual stocks… [T]he last time we had that feeling as a society was the peak in 2021.”

However, Gayed said that he was bullish on long-duration treasuries and small caps.

“They’re interconnected,” he explained. “If you end up having long-duration treasury yields collapse [due to deflation worries or the reverse carry trade],… In that collapse in yields, now small caps finally have their lifeline, because now they can refinance into lower yields.”

ECONOMY:
IS U.S. DEBT DEFAULT COMING?
Douglas Holtz-Eakin, December 9, 2024

Douglas Holtz-Eakin, former Director of The Congressional Budget Office (CBO) and President of The American Action Forum, discussed his long-term outlook for U.S. deficit and debt, and their impact on the economy.

Holtz-Eakin said that “there is no excuse” for the U.S. to be running a deficit that is 7 percent of GDP, especially given that the economy is at “full employment” and is “not engaged in an overseas war.”

“We know that this is part of a larger trajectory where the debt relative to GDP has gone from 30 percent in 2000 to 100 percent now, and is on a trajectory to go steadily north as far as the eye can see,” he said. “And that’s literally unsustainable.”

If the government fails to control the debt and deficit levels, Holtz-Eakin predicted that interest rates could spike, and there would be a bond market “revolt.”

“[Long-term interest rates will] go up,” he said. “If they [The Trump administration] in fact do both extend the tax cuts and do another [set of spending measures] — his promises add up to another $3 or $4 trillion — I think you’ll see a revolt. I don’t think the bond markets are going to like that a bit.”

Holtz-Eakin expressed skepticism about Trump’s proposed Department of Government Efficiency (DOGE), headed by Elon Musk and Vivek Ramaswamy, which is tasked with trimming $2 trillion in government spending.

“If you want to talk about cutting $2 trillion out of spending, you have to recognize that the Constitution gives the power of the purse to Congress, and it gives the implementation of that spending to the Executive, and nowhere in there is the DOGE,” he said. “And so the question is, what authorities does the DOGE have on paper? They don’t have anything.”

He drew a comparison to The Grace Commission under President Ronald Reagan, which issued several recommendations for reducing spending.

Holtz-Eakin said, “it doesn’t look like it [The Commission] changed the size and scope of the federal bureaucracy very much.”

He said that to tackle the deficit, modifications need to be made to entitlement programs like Social Security and Medicare.

“I think more affluent individuals have to get less back in their Social Security,” he explained. “Medicare is harder… We have struggled mightily in this country to control healthcare cost growth. We’ve made some real progress, but that’s the next big challenge.”

REAL ESTATE
’CATASTROPHIC’ PROBLEM IN CANADIAN HOUSING
Ron Butler, December 12, 2024

Ron Butler, Host of “The Angry Mortgage Podcast” and Principal Mortgage Broker at Butler Mortgage, gave his outlook for Canadian real estate.

Butler said that a correction is “on the horizon” for condominiums in Toronto.

“We have seen an absolute catastrophic problem developing in investor-driven condominiums in [Toronto],” explained Butler. “We have brand new [condo] products coming on the market… This new product is priced so grossly higher than resale products right across the street… The delta is completely unmanageable.”

Toronto condo investors were driven by “absolutely ridiculous” assumptions when they purchased real estate, said Butler.

“The assumptions were… that prices would simply go up eternally and forever,” said Butler. “Another assumption would be that 2 percent interest would continue forever, and that mass immigration would continue forever. All of these things have become untrue, and the feasibility of even closing on these condominiums… is doubtful.”

However, Butler said that single-family homes in Vancouver and southern Ontario would not suffer from a correction, due to geographic, regulatory, and financial barriers to building new units.

“In Ontario, we suspect that the development of single-family homes in 2024 has just fallen off the face of the earth,” he said. “There’s no financing for development available for single-family homes, and the big builders of single-family homes in Ontario and in British Columbia all stopped building them about 12 or 14 months ago. They sold what they had pre-sold, and they closed their sales offices.”

WHAT TO WATCH

Tuesday, December 17, 2024

• U.S. retail sales — The total revenue generated by retail businesses across the U.S.

Wednesday, December 18, 2024

• FOMC Rate Decision — The Federal Open Market Committee will meet to make a decision on The Fed Funds rate.

• Housing starts — The number of new homes being built across the U.S.

Thursday, December 19, 2024

• Existing home sales — The number of pre-owned homes being sold across the U.S.

• U.S. leading economic indicators — This is a composite of ten key metrics designed to forecast U.S. economic activity.

Friday, December 20, 2024

• Personal Consumption Expenditures (PCE) Index — A measure of how much U.S. households spend on goods and services.

TABLE OF CONTENTS

1. Market Recap: Bitcoin hits $100k

2. EQUITIES: Markets are ‘out of whack,’ says Mark Zandi

3. ECONOMY: 2025 will be ‘extremely volatile,’ says Philippe Gijsels

4. ECONOMY: Jason Trennert on why a 2nd wave of inflation may be coming

5. ECONOMY: Matt Piepenburg on the ‘craziest times’ he’s ever seen

6. PRECIOUS METALS: Nicky Shiels gives her 2025 gold and silver outlook

7. What to Watch

MARKET RECAP

Latest News. President-elect Donald Trump’s nomination of pro-crypto businessman Paul Atkins as Chair of the Securities and Exchange Commission triggered vigorous buying of Bitcoin, pushing it above the $100k mark on Wednesday, December 4th. The coin hit an all-time-high of $103,332 on December 5th before falling slightly.

Bitcoin has risen markedly since Trump won the presidency, rising from $69,374 on election day to over $100k this week. Crypto markets appear to be treating Trump’s election as a boon for digital assets, given his pro-crypto campaign messaging.

The Bitcoin price may have also been pushed up by Federal Reserve Chair Jerome Powell’s remarks on December 4th that investors saw Bitcoin as a “competitor for gold.”

Let’s revisit Bitcoin analyses and forecasts, both short-term and long-term from recent experts on our program: Clem Chambers, Chris Vermeulen, Ran Neuner, Aaron Arnold, Benjamin Cowen, Samson Mow, and Jack Mallers.

The view shared by Chambers and Vermeulen was there would be strong selling pressure around the $100k Bitcoin level.

“This is no longer an appealing [Bitcoin] price for someone to get in at,” said Chambers, Founder of AnewFn. “At some point — in six months, a year — it’s going to be down to $60,000 again.”

Vermeulen, who is Chief Market Strategist at TheTechnicalTraders.com, held a similar view. He predicted that once Bitcoin hits $100k, “we’re going to see some selling,” because this would be a “mental resistance level.”

However, he said that he had recently bought some Bitcoin.

“I like Bitcoin, not as an investment,” he said. “The reason I like it is that it is such a herd mentality trade… I still think it’s going higher.”

Pointing to his chart, Vermeulen said, “this tells us where Bitcoin should go next, which is about 108 to 109 thousand dollars.”

We also interviewed Neuner, Host of Crypto Banter, on December 5th.

He said that Bitcoin has the potential to reach $100k, but he predicted a lot of selling by January, characterizing it as part of the market’s natural rhythm.

“It’s pretty normal to have these 25 or 30 percent pullbacks [in Bitcoin]” he said. “That is why I’m starting to accumulate cash.”

Aaron Arnold, Co-host of Altcoin Daily, said that the next several months would be a bullish environment for crypto because of Securities and Exchange Commission (SEC) policy changes.

“For the last seven plus years, the crypto market has been suppressed, and now that that suppression is being lifted, these assets — Bitcoin, Ethereum, Solana — they’re in price discovery again,” said Arnold. “The next nine-ish months are when you see the biggest gains, the highest rallies.”

Benjamin Cowen, Founder of Into the Cryptoverse, said that Bitcoin’s dominance would reach 60 percent of the total crypto market cap.

“60 percent was my target because it was essentially just retracing where the bubble began with alt[coin]-Bitcoin pairs,” he said. “The one thing to remember about Bitcoin dominance is that it tends to spend three years going up, and then one year going down.”

In the long-term, Samson Mow and Jack Mallers expected Bitcoin to hit as high as $1 million.

“I believe Bitcoin is severely under-valued right now,” said Mow, CEO of Jan3. “I believe we’re on track to $1 million. The ETFs have been an enormous influx of capital into Bitcoin… We’re getting to the point where we should be going parabolic very soon.”

Mallers, CEO and Founder of Strike, held a similar view.

“The bond market is in trouble… and so, if central banks and governments are going to try to save that market, the amount of liquidity that’s needed is going to send assets very high,” said Mallers. “If that happens, it’s impossible to speculate on an asset as scarce as Bitcoin, but I think $250,000 to $1 million… in that range.”

Market Movements

From November 29 to December 6, the following assets experienced dramatic swings in price. Data are up-to-date as of December 6 at 9pm ET (approximate).

1. Intel Corporation — down 13 percent.

2. DocuSign — up 34.3 percent.

3. Coinbase Global — up 16 percent.

4. Arabica Coffee — up 34 percent.

5. UnitedHealth Group — down 9.9 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — up 0.2 percent.

Bitcoin — up 3.4 percent.

Gold — down 1 percent.

10-year Treasury yield — down 0.7 percent.

S&P 500 — up 1 percent.

Russell 2000 — down 1 percent.

USD/yuan — up 0.4 percent.

EQUITIES:
MARKETS ARE ‘OUT OF WHACK’
Mark Zandi, December 3, 2024

Mark Zandi, Chief Economist of Moody’s Analytics, gave his views on markets and the economy. He said that markets are “off kilter” and potentially overvalued.

Zandi said that the U.S. economy is strong, and he did not predict a recession in 2025. He ascribed the recent rise in unemployment to immigration, which had caused a surge in the labor force.

“[Unemployment’s uptick] wasn’t anything to do with [labor] demand,” he said. “I think the economy is on solid ground… I think the fundamentals are good.”

As a result of strong fundamentals, Zandi expected earnings to grow “at the rate of [nominal] sales.”

However, he warned that market valuations are “out of whack,” and that assets may be overvalued.

“I think asset values are feeling on the high side, and they continue to march higher,” said Zandi. “They’re getting increasingly disconnected from… the good fundamentals, and that does open up the asset markets to a sell-off.”

He gave the examples of all-time-highs in the stock market, low corporate bond spreads, and rising real estate prices. He said that active investors need to think more “carefully” about portfolio valuation.

“If you go back, the only other point in time where [corporate bond] spreads were thinner was right before the financial crisis in 2007,” he explained. “The markets… are discounting that nothing is going to go wrong here at all… and that is very unlikely.”

He pointed to President-elect Trump’s proposed tariffs and deportations, which could trigger “mean reversion” to the downside.

“Those tariffs will result in more inflation and that means higher bond yields,” he said. “I think in general, you’ll get higher bond yields, higher interest rates, higher inflation, and a higher value of the dollar.”

ECONOMY:
2025 TO BE ‘EXTREMELY VOLATILE’
Philippe Gijsels, December 5, 2024

Philippe Gijsels, Chief Strategy Officer at BNP Paribas Fortis, discussed his economic forecast and the implications for assets.

Gijsels said that 2025 would be a “extremely volatile” geopolitically and economically. He said that the world is becoming increasingly divided, and is moving away from globalization towards “multi-globalization.”

“The Pax Americana is over,” he explained. “You have different [trading] blocs, and that will create a lot of geopolitical uncertainty. That geopolitical uncertainty will translate into volatility in the financial markets.”

He predicted that every asset class would experience volatility in 2025, including the U.S. dollar.

“Whatever move it will be, I think it will be volatile,” he said. “If the Euro/Dollar moves, then everything attached to the Euro/Dollar moves, and that’s all the rest of the currencies… [they] will be volatile as well”

He warned that equities markets seem overvalued, which could cause a “serious correction” in stocks or bonds, which could affect the real economy.

“In economics, when you have a huge boom, you run the risk of having a huge bust,” he explained. “If there is an accident, it will come more from the financial side, and it will translate into the economy.”

In the long-term, Gijsels said that commodities are on the brink of a “super cycle” as commodity demand struggles to keep up with supply. He said he was “bullish” on commodities.

“There is a lot of demand coming from the electrical revolution,” he said. “If you look at the longer-term picture… I think this will be the strongest bull market we’ve seen in the last 100 years.”

Gijsels was particularly bullish on copper, predicting that its price could double.

“You need about 200 new mines in the copper space,” he explained. “A lot of the older mines are losing on production, and there is not enough coming upstream.”

ECONOMY:
SECOND WAVE OF INFLATION
Jason Trennert, December 3, 2024

Jason Trennert, CEO of Strategas, provided his perspective on inflation, Fed policy, and the incoming Trump administration.

Trennert forecasted that a second wave of inflation could be coming, based on his analysis of historical data.

“What we’ve found is that about 90 percent of the time, when you have one wave of inflation over 6 percent, you get a second wave of inflation,” he said. “As time goes on… unions and workers demand not only higher wages, but also higher wages to make up for what they have missed in the last several years.”

Trennert explained his ‘Common Man CPI’ measure, which showed that inflation in goods and services had outpaced wages.

“The headline numbers looked pretty good,” he said. “Inflation came down, stock prices were high, the unemployment rate was low. And yet, there was a sense of unease in the economy, and I think the unease was largely among the average person.”

He said that the Federal Reserve had cut rates too quickly.

“I think, frankly… The Fed should slow down on its easing campaign,” he said. “If your goal truly is 2 percent [inflation]… you want to be careful, for a lot of the reasons I mentioned before, about easing too quickly.”

Trennert also addressed President-elect Trump’s threat to punish BRICS countries with a 100 percent tariff if they avoid using the U.S. dollar. Trennert said that the dollar is unlikely to be replaced as the world reserve currency.

“If President Trump is true to his word about government efficiency [with DOGE]… you won’t have to worry about any other currency,” he said. “The U.S. is the reserve currency. There’s nothing that will change that… in my lifetime.”

ECONOMY:
’CRAZIEST TIMES I’VE SEEN’
Matt Piepenburg, December 2, 2024

Matt Piepenburg, Partner at Von Greyerz AG, joined the show to discuss economic growth, tariffs, and other topics.

Piepenburg addressed Trump’s threat to levy tariffs on goods coming from Mexico and Canada, until, as Trump wrote, “drugs, in particular fentanyl, and all illegal aliens” stop passing through the northern and southern borders into the U.S.

“[Trump’s] ultimate goal is to re-shore production and companies and the C-suites and the manufacturing back to U.S.,” explained Piepenburg. “I think what Trump is trying to do, on the positive side of these tariffs, is convince companies in the world that we’re focusing on America, we’re focusing on American productivity, American manufacturing, re-shoring jobs… that’s expensive, and that takes more than one term.”

When it comes to economic growth, Piepenburg said that the important metric is the U.S.’s debt-to-GDP ratio, which is now above 120 percent.

“You can’t get growth when your debt-to-GDP crosses the 110, 120 percent rubicon,” he explained. “Once you cross 100 percent, growth slows by one-third… if you want to get growth, you’ve got to cut the debt-to-GDP ratios. That takes more than four years.”

Piepenburg was skeptical about the ability of Trump’s Department of Government Efficiency (DOGE), run by Elon Musk and Vivek Ramaswamy, to sufficiently cut debt. DOGE aims to cut the size of the federal workforce by as much as 75 percent, and trim $2 trillion from government spending.

“It’s great optics, it’s very appealing,” said Piepenburg. “But if you cut $2 trillion worth of jobs, then what happens to the… U3, U6 [un]employment? What happens to the cost to keeping those people on welfare for a year, or on the dole for a year? Where do they find new jobs? And even if you do those, the cost of re-shoring, the cost of these other great ideas, are going to be more than $2 trillion.”

Given these challenges, Piepenburg said that Trump’s second term may be daunting.

“It’s absolutely the craziest time I’ve ever seen in a macro setting,” he said. “It’s the craziest geopolitical scene. It’s the craziest geo-economic scene.”

PRECIOUS METALS:
2025 GOLD AND SILVER OUTLOOK
Nicky Shiels, December 4, 2024

Nicky Shiels, Head of Research & Metals Strategy at MKS PAMP, gave her 2025 outlook for gold and silver.

She said that MKS PAMP’s bull case for gold is a “repeat of 2024,” though “[the gold price] will be a lot more volatile” in this scenario. Shiels said that she ascribes a 55 percent probability to this potential situation.

“We expect milder gains [than 2024],” she explained, referring to MKS PAMP’s bull case for gold. “Gold potentially could hit $3,200 next year.”

However, Shiels said that in a bear case, gold could fall to as low as $2,200 if political and geopolitical fears ease, the crypto industry benefits under a Trump administration, and the Federal Reserve gets “ahead of the inflation curve.”

When it comes to inflation, Shiels was skeptical as to whether the Fed has inflation under control. She expected inflation to remain higher than the Fed’s 2 percent target in the long-term.

“I think in terms of this decade, we’re putting the past behind us in terms of… a low interest rate, low inflation structural regime for developed markets,” she said. “Certainly with policy uncertainty, with de-globalization, de-dollarization, ESG, all of these structural policies are coming together to support a higher-for-longer inflation floor.”

She said that the new floor is likely 3 percent, and said that higher inflation is bullish for gold.

Sheils had a positive outlook for silver in 2025, given its industrial demand.

“Silver, which is a high-beta sister metal [to gold] that can capitalize on both the fear premium in gold and the industrial cyclical reflation story behind copper… can attract the best of both worlds,” she said. “Silver has an opportunity… to recalibrate into much higher territory, and we’re talking about $35 to $40.”

WHAT TO WATCH

Wednesday, December 11, 2024

• Bank of Canada rate decision — The Bank of Canada’s Governing Council will make decision on its key policy interest rate.

• Consumer Price Index (CPI) Release — This shows the price level of consumer goods and services.

Thursday, December 12, 2024

• Swiss National Bank rate decision — The Swiss National Bank will make a decision on its key policy interest rate.

• European Central Bank rate decision — The ECB will make a decision on its key policy interest rate.

• Producer Price Index (PPI) Release — This shows the level of prices that producers receive for their output.

TABLE OF CONTENTS

1. Market Recap: Steve Hanke on whether Trump tariffs will cause depression

2. EQUITIES: A big selloff may occur in January, says Chris Vermeulen

3. ECONOMY: David Hay and Jeff Dicks on the biggest bubble ever?

4. ECONOMY: $200k Bitcoin and $4k gold in 2025, predicts Lawrence Lepard

5. ECONOMY: Doug Casey on the most dangerous era since WWII

6. BANKING: Chris Whalen on banks’ potential $3 trillion loss

7. CRYPTO: Clem Chambers on whether Bitcoin is near its top

8. CHINA: Keyu Jin explains how China will respond to Trump tariffs

9. What to Watch

MARKET RECAP

Latest News. On Monday, November 25th, President-Elect Donald Trump threatened 25 percent tariffs on Canada and Mexico, until “drugs, in particular fentanyl, and all illegal aliens” stop passing through the northern and southern borders into the U.S.

The market reaction was swift, with the U.S. dollar gaining 1 percent against the Canadian dollar and 2 percent against the Mexican peso. S&P 500 futures fell by 0.3 percent and the U.S. 10-year Treasury rose by four basis points to 4.31 percent on Tuesday, November 26th.

Prime Minister Justin Trudeau of Canada and President Claudia Sheinbaum of Mexico subsequently had phone calls with Trump.

Trudeau said that he had a “good call” with Trump, and his government later committed to spending more on policing the Canadian border. Trump met with Trudeau at Mar-a-Lago on Friday, November 29th.

Sheinbaum, by contrast, said that she would not agree to stop illegal border crossings, and even hinted at retaliatory tariffs if Trump were to impose tariffs on Mexico.

Trump also threatened a 10 percent tariff on China.

Steve Hanke, Professor of Applied Economics at Johns Hopkins University, joined the show to discuss these tariffs and their potential effects on the U.S. economy.

Hanke pointed to the historical example of the Smoot-Hawley Tariffs of the 1930s, which he said had exacerbated The Great Depression.

“The Smoot-Hawley Tariffs did contribute to The Great Depression,” he explained. “The money supply [also] contracted massively between 1929 and 1933. So that was a one-two punch that gave us The Great Depression.”

Hanke said that money supply growth has been contracting recently, which is a leading indicator of a recession. He also predicted that Trump’s tariffs could be more damaging to the economy than Smoot-Hawley, because “the U.S. economy is not as free market and flexible as it used to be.”

The American consumer and the manufacturing sector would also suffer under tariffs, said Hanke.

“A lot of imports to the United States aren’t consumer goods, they’re intermediate inputs,” he said. “You have complicated supply chains, and those will be disrupted and affected.”

He added that tariffs would be ineffective against China, which would simply allow its yuan to weaken.

“If you put a 20 percent tariff on China, then China will say… we’re going to let the yuan depreciate against the U.S. dollar 20 percent,” said Hanke. “The Chinese can do all kinds of things. By the way, they can cut us off from critical materials, and send the U.S. economy into a total tailspin.”

Market Movements

From November 22 to November 29, the following assets experienced dramatic swings in price. Data are up-to-date as of November 29 at 9pm ET (approximate).

1. MicroStrategy Inc. — down 8.2 percent.

2. Hertz — up 22.4 percent.

3. Bath & Body Works — up 18 percent.

4. Natural Gas (Henry Hub) — up 7.7 percent.

5. Solana — down 7.4 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — down 1.6 percent.

Bitcoin — down 2 percent.

Gold — down 2.1 percent.

10-year Treasury yield — down 5.3 percent.

S&P 500 — up 1 percent.

Russell 2000 — up 1.2 percent.

USD/yuan — no significant change.

EQUITIES:
BIG SELLOFF IN JANUARY?
Chris Vermeulen, November 28, 2024

Chris Vermeulen, Chief Market Strategist at TheTechnicalTraders.com, returned to the show to give us his market outlook on stocks, Bitcoin, gold and the U.S. dollar.

Vermeuelen said that the S&P 500 had reached a “psychological level” of 6,000 before retracting. He explained that psychological levels are “typically whole numbers” like 5,000 or 6,000, which make traders feel like they should sell.

However, he remained bullish on equities, predicting a short-term rise of 2 percent in the S&P.

“The market is trying to digest a previous high,” he explained. “I know people are pretty nervous right now that the market is going to roll over, but in the grand scheme of things, I think the stock market is ready to climb.”

However, he cautioned that January would be “pretty ugly” as the market experiences a “much bigger drop” after the optimism following Trump’s inauguration “fizzles out.”

“I think this momentum in this Trump bump in price… I think once all of that fizzles out, I think we could see some big selling,” Vermeulen predicted.

When it came to Bitcoin, Vermeulen predicted that once Bitcoin hits $100k, “we’re going to see some selling,” because this would be a “mental resistance level.”

However, he said that he had recently bought some Bitcoin.

“I like Bitcoin, not as an investment,” he said. “The reason I like it is that it is such a herd mentality trade… I still think it’s going higher.”

Pointing to his chart, Vermeulen said, “this tells us where Bitcoin should go next, which is about 108 to 109 thousand dollars.”

Vermeulen said that gold has hit its measured move target around $2,800 and anticipates a 15-25 percent correction. He plans to add more after a significant correction.

Despite recent fluctuations, he remains bullish on the dollar, viewing it as a safe haven.

“When chaos hits, I think we’re eventually going to see… the DXY up to maybe 130,” he said.

ECONOMY:
BIGGEST BUBBLE EVER?
David Hay and Jeff Dicks, November 30, 2024

David Hay and Jeff Dicks, co-CIOS of Evergreen Gavekal, gave us their outlook for the U.S. economy following the election of Donald Trump.

Dicks said that markets are interpreting Trump’s policies to be inflationary, which has caused bond yields to surge higher.

“The policies that Trump will put through are going to be largely inflationary,” he explained. “So far, that’s been bad for bonds.”

However, Dicks said that bonds “looked fairly oversold,” and that fixed income may benefit from a “relatively strong economy” in the coming years. He pointed to consumer spending, real wages, and GDP as being strong.

“I think it’s almost no question we are having a soft or no landing,” he said. “Q2 GDP is 2.9 [percent], and Q3 GDP looks like it’s coming in at 2.8 [percent]… those who think there’s a recession at hand, I think, are wrong.”

When it comes to the U.S. dollar, Hay said that Trump had sent mixed messages in his campaign on whether he wanted a strong dollar.

“He wants to get the U.S. trade deficit down meaningfully,” he said. “To do that with a rising dollar is really tough, and I actually believe he’d like to see the dollar come down significantly, particularly against the Chinese currency, the renminbi, and also against the Japanese yen.”

Hay was also skeptical about Trump’s proposed DOGE (Department of Government Efficiency), headed by Elon Musk and Vivek Ramaswamy, which was set up to cut $2 trillion in government waste.

“So many of these expenditures are locked in,” said Hay. “Medicare, Social Security, Medicaid — those are tough to cut.”

He explained that even if the Trump admin manages to cut $2 trillion, this would hurt the American economy and could cause “pain” that would be “unacceptable” for most Americans.

ECONOMY:
$200K BITCOIN AND $4K GOLD IN 2025
Lawrence Lepard, November 26, 2024

Lawrence Lepard, Managing Partner of Equity Management Associates, gave us his surprising forecast: Bitcoin will reach $200k and gold will reach $4k in 2025. He also discussed his economic outlook for the U.S.

Lepard warned that rising U.S. debt and deficits are unsustainable. He said that the U.S. is currently running a $2.4 trillion deficit, with no plan to reduce it, and that this is reflected in a weakening bond market.

“The bond market is… in the process of failing,” he said. “The Fed cut interest rates, and yet the 10-year [Treasury yield] has gone up 75 basis points. That’s not supposed to happen, and it tells you that the Fed is probably too loose.”

Lepard predicted that the Fed would use yield curve control and print money to address rising debt levels.

“The Fed and the Treasury are going to have their hands full… in the next six months,” he said.

Saying that the stock market is “overvalued,” even as there are signs that the real economy is faltering, Lepard said that the stock market would face a significant correction.

“We haven’t had a truly prolonged and serious bear market since ‘08,” said Lepard. “I think there is a real day of reckoning coming for stocks.”

To address a crashing stock market, the Fed will “turn on the [money] printer” and loosen monetary policy, said Lepard. This, in turn, could benefit gold and Bitcoin.

“The last time they turned on the printer… Bitcoin went from $10,000 to $50,000, and gold went from $1,365 to $2,070,” he said.

ECONOMY:
WORLD’S MOST DANGEROUS ERA
Doug Casey, November 23, 2024

Doug Casey, Best-selling author of Crisis Investing and Founder of Casey Research, discussed his outlook on the U.S. economy and investing.

Casey said that President-Elect Trump will have to face the most “dangerous” time in history since World War II, given ongoing conflicts in Ukraine and the Middle East, as well as rising tensions with China.

“Before Biden leaves office he may yet start World War III with Russia or may attack Iran, or may provoke the Chinese,” he said. “It’s a dog’s breakfast.”

Given these risks, as well as poor economic data, Casey said that the stock market is over-valued.

“By all conventional metrics, the stock market, which is at all-time-highs… is quite overpriced,” he said. “Meantime, the actual number of employed people is going down. The actual debt in this country is gigantic and growing… what we’re entering upon is something I call the greater depression.”

He pointed to rising credit card debt, auto loans, and student loan debt.

Although Casey was optimistic about President-Elect Trump getting into office, he said that he worries about Trump’s trade policies.

“If Trump puts on tariffs, then trade internationally will collapse,” he predicted. “It’s a potential catastrophe.”

When it comes to investments, Casey was bullish on energy stocks, particularly hydrocarbons and uranium, citing their essential role in industrial economies. He was also optimistic about Bitcoin, viewing it as a superior store of value and a privacy mechanism.

“I’m a Bitcoin bull,” he said. “Lots of governments are going to adopt Bitcoin as a high-tech alternative to gold, and certainly to the U.S. dollar.”

BANKING:
$3 TRILLION IN BANK LOSSES COMING
Chris Whalen, November 27, 2024

Chris Whalen, Chairman of Whalen Global Advisors, joined the show to assess the U.S. banking sector and provide his economic outlook.

Whalen warned that U.S. 10-year Treasury rates have increased in recent months, which could hurt commercial bank balance sheets. In particular, he said that a yield of 5 percent could result in a $3 trillion negative capital position for banks.

“If the 10-year goes to 5 [percent] or higher, the pain from these securities is going to get really tough,” he said. “My fear is that the regulators still aren’t focused on this.”

He warned that if Fannie Mae and Freddie Mac, two mortgage companies which have been under conservatorship since 2008, were to come out of government conservatorship, that this could increase mortgage costs and affect the U.S. financial system.

“Fannie and Freddie, if you want to keep them the way they are, as both an issuer of securities and a guarantor of mortgages, then you have to have sovereign support,” he said. “I think ultimately they won’t come out.”

Whalen said that Moody’s would downgrade Fannie and Freddie if they were to leave conservatorship.

When it comes to banking stability, Whalen said that the Federal Deposit Insurance Corporation (FDIC) had “done a lot of work” to calm panic since the failure of Silicon Valley Bank in 2023.

“I think there is still going to be a tendency to go to larger banks for safety,” he said. “But I think, generally, the public shouldn’t worry about the deposit side.”

CRYPTO:
THE END FOR BITCOIN?
Clem Chambers, November 29, 2024

Clem Chambers, Founder of AnewFn, provided us his outlook for Bitcoin and crypto markets.

Chambers pointed to the recent and dramatic rise in the Bitcoin price. He said that Bitcoin has predictable four-year cycles driven by halving events, in which the reward for mining Bitcoin falls by one half. This, in turn, allowed him to forecast Bitcoin’s price movements.

“The supply halves, and the price doubles,” he said. “The top could be $150k, but I think that’s stretching it.”

He expected Bitcoin to hit $115K-$120K, before correcting, and said that he had already exited his Bitcoin position.

Highlighting his strategy, Chambers said, “If you buy near the bottom and sell near the top, you’ll do very well… we’re now near the top.”

Referring to the relationship between the NASDAQ and Bitcoin, Chambers said that “Fed liquidity” explained the close correlation between the two.

“When they do a twist on the yield curve, it goes into markets,” he said. “It just doesn’t go into equities… it goes into crypto too, because they’re all connected.”

When it comes to altcoins, Chambers said he maintains Ethereum holdings, expecting a short-term rally following Bitcoin’s peak. However, he criticized Ethereum’s frequent changes, such as its protocol change from proof-of-work to proof-of-stake.

“Human beings being in control of cryptos debases them,” he said, adding that Bitcoin does not have this problem because “there ain’t no Satoshi Nakomoto to say I’ve changed my mind.”

Chambers also discussed Solana’s momentum, branding it as “rock and roll” compared to Ethereum’s “jazz.” When it comes to meme coins, Chambers said that their rally meant that the market is near its peak.

CHINA:
CHINA’S RESPONSE TO TARIFFS
Keyu Jin, November 27, 2024

Keyu Jin, a global economics professor and author of The New China Playbook: Beyond Socialism and Capitalism, discussed China’s economy, and Beijing’s response to Trump’s potential tariffs.

Jin said that China would respond to tariffs by strengthening trade alliances globally. She explained that during Trump’s first term in office, “40 percent of the reduction in trade with the U.S… was compensated by more trade with other economies.”

She pointed to how China is working to bolster trade with Europe, especially in the EV sector.

“Trump marks an anti-globalist, anti-multilateralist, isolationist, de-sinicization policy,” she said. “This could potentially push Europe to work with other countries on a grander and broader scale.”

If Trump ends up implementing tariffs on China, Jin said that China would respond, but not with “extreme measures.”

“The weighted average of tariffs is already at 13 percent,” she said. “Half of the goods that China exports to the U.S. are already suffering from pretty high tariffs, so any additional change on these tariffs is actually quite vacuous.”

When it comes to diplomacy, Jin said that China views Trump as more “peace oriented,” given his intent to resolve conflicts in Ukraine and The Middle East. This, in turn, could make Trump easier for Beijing to negotiate with.

“Geopolitically, we might be seeing a slightly different road map compared to the Biden Administration,” she said. “Obviously, we’re talking about the more sensitive areas — The South China Sea, Taiwan, and so forth.”

WHAT TO WATCH

Tuesday, December 3, 2024

• Job Openings — This is the total of all job vacancies, including those for part-time or temporary employment.

Friday, December 6, 2024

• Unemployment Rate — This BLS release shows the percentage of unemployed persons in the U.S. labor force.

TABLE OF CONTENTS

1. Market Recap: Ray McGovern on whether Russia will nuke Ukraine

2. EQUITIES: Ed Yardeni predicts 8,000 on S&P 500 by 2026

3. ECONOMY: This is how a Great Depression could happen, says Peter Grandich

4. CRYPTO: Bitcoin will rally after crashing in January, predicts Ran Neuner

5. CRYPTO: Ben Cowen on the trigger for $100k Bitcoin

6. GOLD: Jeff Christian on when gold will shatter records

7. PUBLIC POLICY: Darrell Bricker on Canada’s immigration crisis

8. What to Watch

MARKET RECAP

Latest News. On Sunday, November 17th, The White House gave Ukraine permission to use U.S.-made long-range missiles to strike Russia, an unprecedented move that risks escalating the Ukraine war.

The Kremlin responded by updating its nuclear doctrine, stating that an attack from a non-nuclear state – like Ukraine – which is backed by a nuclear power will be treated as a joint assault on Russia.

Following this, Ukraine launched American ATACMS (Army Tactical Missile Systems) into Russia, and also used British-made Storm Shadow missiles. The Russian Defence Ministry claimed that it intercepted most of these missiles before they hit their destinations.

Markets responded with an exit out of risk assets. Stocks fell on Tuesday; the Dow Jones opened down 0.8 percent, and the broader S&P lost 0.4 percent. Global bond yields fell.

On Thursday, U.S. and other Western embassies in Kiev announced that they were closing, in preparation for a major Russian assault. That same day, Putin announced that Russia had fired an Intercontinental Ballistic Missile (ICBM) into Ukraine.

Will this latest round of escalation lead to a hot war between the United States and Russia, or is The Kremlin’s threat a bluff?

Joining us to discuss these topics was Ray McGovern, former CIA officer and Director of The National Intelligence Estimates under President Ronald Reagan. McGovern prepared President Reagan’s daily security briefings.

McGovern said that Putin is “winning” in Ukraine, and does not see U.S.-supplied missiles as a game-changer. Rather, he said that The White House’s latest moves were about domestic politics.

“They’re doing this because they want to go out into the Western sunset, right after the administration is over, saying, look, we gave the Ukrainians everything they asked for… and it’s not our fault they [the Ukrainians] are falling apart,” said McGovern. “I think he [Putin] is going to attrit… until a new administration comes in, and then he’s going to be able to deal from a position of strength.”

McGovern characterized the authorization of ATACMS as a “mini coup,” and said it was orchestrated by Secretary of State Antony Blinken and National Security Advisor Jake Sullivan without President Biden's direct involvement or Pentagon consent.

McGovern predicted that ATACMS will not alter the war’s trajectory significantly. Their limited range (190 miles) and the small number of missiles make them ineffective.

“[Putin] has got the upper hand,” said McGovern. “Is he going to allow himself to be provoked by pin-pricks?”

McGovern predicted that Putin will wait until Trump gets into office, and then negotiate an end to the Ukraine conflict.

Market Movements

From November 15 to November 22, the following assets experienced dramatic swings in price. Data are up-to-date as of November 22 at 9pm ET (approximate).

1. MicroStrategy Inc. — up 23.8 percent.

2. Peloton Interactive — up 23.1 percent.

3. Dogecoin — up ~20 percent.

4. Target Corporation — down 17.8 percent.

5. Cocoa — up 6.8 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — up 0.07 percent.

Bitcoin — up 12.6 percent

Gold — up 6 percent.

10-year Treasury yield — down 0.03 percent.

S&P 500 — up 1.7 percent.

Russell 2000 — up 4.5 percent.

USD/yuan — up 0.02 percent.

EQUITIES:
8,000 S&P TARGET BY 2026
Ed Yardeni, November 19, 2024

Ed Yardeni, President of Yardeni Research, returned to the show to provide his outlook on markets, and to extend his previously bullish call.

Yardeni was confident in a continued rally for U.S. equities, due to the resurgence of “animal spirits” under President Donald Trump. He mentioned Trump’s corporate tax reductions, from 21% to 15%, and deregulation as catalysts for market growth.

“We’ve raised our [S&P 500] outlook for the end of this year to 6,100, for next year at 7,000, and the year after that 8,000,” said Yardeni. “Those are actually very consistent with an improvement in our earnings outlook, based on a lower corporate tax rate, deregulation, and continuing strength in the U.S. economy.”

Yardeni addressed the risks from tariffs, comparing the United States’s escalation in the trade war with China to the Smoot-Hawley Tariff Act of 1930, which economists claim worsened the Great Depression.

“If next year we get something like the Smoot-Hawley tariff, then we could get a depression, or we could first get inflation that causes the Fed to tighten, and that causes a recession or something worse,” said Yardeni.

Yet Yardeni dismissed concerns about an imminent recession, saying that Trump is a “dealmaker” who is merely using the threat of tariffs to negotiate with China.

He pointed to strong consumer spending, particularly by Baby Boomers with substantial wealth. He even suggested that a declining savings rate could fuel further economic growth.

“The Baby Boomers have $79 trillion in net worth,” said Yardeni. “They’re retiring and they’re spending that money”

When it came to favoured sectors, Yardeni said he prefers technology and communication services, which together account for 40 percent of the S&P 500. These sectors have been top performers during the current bull market.

He was less enthusiastic about bonds, expecting yields to stabilize between 4 percent and 5 percent.

“I think you’ll earn the coupon, but you’re not going to make much money on the capital side, in capital gains,” he said.

ECONOMY:
WHAT WILL TRIGGER ANOTHER GREAT DEPRESSION?
Peter Grandich, November 18, 2024

Peter Grandich, Founder of Grandich & Co, returned to the show to discuss prospects for the U.S. economy following the Trump election victory.

Grandich was optimistic about Trump’s proposed reforms, including tax cuts and government efficiency measures. He also praised Trump’s stance on ending U.S. involvement in Ukraine and NATO funding imbalances.

“America has always had to fund so much more of the responsibility [for NATO],” said Grandich. “Western Europe has a lot of issues, and quite frankly it’s time for them to spend more of their own money defending their main interests.”

When it came to the U.S. national debt, which recently surpassed $36 trillion, Grandich criticized the lack of fiscal discipline across administrations and was skeptical about Trump’s ability to tackle the deficit.

“It is going to become more and more difficult to service this debt, especially as we continue to grow multi-trillion dollar yearly deficits” he said. “When we start to get to $50 trillion and we only have a 5 percent interest, we’re going to have a yearly interest payment of $2.5 trillion.”

On precious metals, Grandich said that central bank buying and BRICS-related speculation had fueled a gold rally earlier this year. However, he saw limited upside in the near term due to easing central bank demand and the strong U.S. dollar.

“I don’t think gold has much chance to get back to the previous highs of this year until we get to 2025,” said Grandich.

The dollar's strength, driven by rising long-term rates, has further pressured gold prices. Grandich did not expect the dollar to surge significantly higher, but he warned of volatility stemming from potential trade wars and protectionist policies.

Grandich said that rising long-term interest rates could have a more profound impact on the economy than other factors. He said that 25 percent of Americans are using credit cards for basic needs.

“If interest rates don’t go lower and keep going higher, they’re going to have even less to go forward on,” said Grandich.

He predicted that 10-year Treasury yields could exceed 5 percent in the coming quarters, intensifying pressure on both consumers and the broader economy.

CRYPTO:
BITCOIN CRASH BY JANUARY, FOLLOWED BY RALLY
Ran Neuner, November 21, 2024

Ran Neuner, Host of Crypto Banter, joined the show to discuss the state of the crypto markets.

Bitcoin is up over 40 percent in the past month, and Neuner said it has the potential to reach $100,000 in the near term.

“You’ve got this perfect storm of bullish news for Bitcoin,” Neuner explained, pointing to the launch of Bitcoin options, and institutional players like MicroStrategy raising funds to purchase Bitcoin.

However, Neuner predicted a correction by January, characterizing it as part of the market’s natural rhythm.

“In 2016 and 2017, we had five corrections in the run-up, which were all over 30 percent” he said “I’m trying to get my portfolio into 30 percent cash for when the inevitable dip comes.”

He attributed much of Bitcoin’s recent performance to the recent U.S. election.

“We’ve gone from an administration that ran an anti-crypto army… to one that’s running a pro-crypto army,” he said. “It feels like all the puzzle pieces have fallen for the most bullish four years ahead for crypto.”

He mentioned President-elect Trump’s willingness to meet with industry leaders like Coinbase CEO Brian Armstrong, as well as SEC Chair nominees with pro-crypto stances.

Neuner added that while Trump’s proposed Bitcoin strategic reserve is “far-fetched,” it is also “the most exciting thing that I’ve ever heard.”

Although Bitcoin is thriving, Neuner said that altcoins, including Ethereum, have under-performed.

“Bitcoin goes up a lot and alt coins go up a little,” he remarked. “It’s a weird relationship that they have at the beginning of a cycle. It’s nothing to get excited about, or stressed about.”

However, he criticized Ethereum’s lagging performance, citing the rise of competitors like Solana.

“Solana can do everything that you can do on ETH much faster and at a fraction of the cost,” Neuner argued. “I don’t really see any reason to be holding ETH, other than the fact that… Coinbase runs the predominant Layer Two on Ethereum, called the Base chain.”

CRYPTO:
WHEN BITCOIN HITS $100K
Ben Cowen, November 18, 2024

Ben Cowen, founder of Into the Cryptoverse, joined us to share his insights on Bitcoin's current performance, market dominance, and the broader cryptocurrency ecosystem.

Cowen addressed the much-anticipated milestone of Bitcoin reaching $100,000, emphasizing its psychological and market impact.

“It'll make headlines,” he said. “Whenever it hits $100K, there likely will be some form of a selloff.”

Cowen's analysis centered on Bitcoin's market dominance, which he had forecasted to hit 60 percent of the crypto market cap —a prediction that recently materialized.

“Bitcoin dominance spends three years going up and one year going down,” he explained, citing historical patterns. “I don't think it will go all the way back up to [its previous peak of] 73 percent because of the stablecoin market cap.”

He explained that the stablecoin market cap is much higher than it was before, and is likely to remain high.

Cowen compared Bitcoin’s current price movements to historical cycles, noting similarities with 2019. He attributed some of Bitcoin's current resilience to improving global liquidity, despite the Federal Reserve's ongoing quantitative tightening (QT).

Addressing the altcoin market, Cowen pointed out that Ethereum (ETH) and other altcoins have lagged behind Bitcoin during this cycle. Ethereum's performance, Cowen said, hinges on monetary policy.

“[ETH] does outperform Bitcoin in a QE market, with the Fed printing money,” he said. “But in QT markets, it underperforms Bitcoin.”

He also highlighted XRP’s recent 131 percent rally, attributing it to a classic double-bottom formation on its Bitcoin pair.

“The way to be successful in crypto is to value your portfolio in satoshi rather than U.S. dollars” Cowen said. “So every time you take a trade on alt coins, by taking some of those profits back to Bitcoin, it helps to preserve the long-term value.”

GOLD:
GOLD WILL SHATTER RECORDS IN 2025
Jeff Christian, November 23, 2024

Jeff Christian, managing partner of CPM Group, returned to discuss the trajectory of gold, silver, and industrial metals following Donald Trump's re-election.

Gold has fallen by $200 from its highs, a slide that began before the election but intensified afterward. Christian attributes this drop not to “economic euphoria” from Trump's win but rather to profit-taking and broader sell-offs across commodities.

“Gold, silver, aluminum, copper, platinum, palladium, oil, and natural gas all fell sharply starting October 31st,” he explained.

Despite rising inflation expectations, gold prices have not followed suit like they usually do. In particular, 10-year Treasury yields, which track inflation expectations, have not moved inversely with gold prices.

“I don’t know that the 10-year is rising on inflation expectations,” he said. “I think it might be rising on a broader set of economic concerns.”

He pointed to recession risks and fiscal deficits as drivers behind the 10-year’s rise.

Despite their recent correction, Christian said that he has a bullish outlook for precious metals.

“We’re looking for gold prices to average around $2,700 over the next year, with potentially higher prices in 2026,” he said, while adding that “we think that we are within 24 months of a peak in gold prices.”

Silver is expected to track gold, with investment demand playing a critical role in driving prices.

“A record average silver price above $35 an ounce is possible in the next few years,” he projected.

Industrial demand remains a headwind for silver, tied closely to broader economic conditions.

PUBLIC POLICY:
CANADA’S IMMIGRATION CRISIS
Darrell Bricker, November 22, 2024

Darrell Bricker, Global CEO of Ipsos Public Affairs, returned to the show to analyze Canada’s most pressing issues. The discussion covered immigration, housing, healthcare, and the broader economic outlook.

Bricker highlighted growing public concern over immigration, which has become the fastest-rising issue in Canada.

Canada’s population growth rate in 2023 was 3.2 percent, five times higher than the OECD average; more than 90 percent of that was due to immigration.

“People [in Canada] are not happy with what’s happening with immigration,” he said. “Now when people say, ‘why am I having a hard time getting access to healthcare?,’ well immigration is a driver of that, so they feel.”

This has prompted Prime Minister Justin Trudeau to cut permanent immigration levels by 20 percent, alongside reductions in temporary worker and international student programs.

The potential for increased migration from the U.S., following Donald Trump’s election victory, has further intensified the debate. Bricker noted that even a modest influx—10 percent of the estimated 11 million illegal migrants in the U.S.—could strain Canada’s public services.

“Our system is really not capable of dealing with it,” he warned, citing challenges in healthcare, housing, and asylum processing.

The interview also touched on Canada’s ability to manage its long, undefended border with the U.S. amid potential surges in asylum claims. Bricker expressed skepticism about U.S. cooperation under a Trump administration.

“I don’t see that we’re going to get an awful lot of sympathy from Donald Trump on this question, because he just wants them [illegal immigrants] out,” he said.

He predicted that asylum claims would further overload Canada’s immigration system, adding, “You’ll be here for a long time before your case actually gets heard.”

Bricker stressed the need for long-term solutions to Canada’s demographic and economic challenges, saying that immigration is needed in the short- to medium-term to offset Canada’s declining birth rate.

WHAT TO WATCH

Tuesday, November 26, 2024

• New Home Sales — This shows the number of sales of newly-built homes in the previous month.

Wednesday, November 27, 2024

• PCE Index — The Personal Consumption Index (PCE) and Core PCE Index is the Federal Reserve’s preferred measure of the price level.

TABLE OF CONTENTS

1. Market Recap: Sheila Bair on how rising debt can trigger financial crisis

2. EQUITIES: Gareth Soloway on where stocks will reach their top

3. ECONOMY: Peter Schiff forecasts mounting inflation, bank failures

4. BONDS: Interest rates could surge, says Peter Boockvar

5. GOLD: Gary Wagner on whether the gold selloff will intensify

6. What to Watch

MARKET RECAP

Latest News. CPI (Consumer Price Index) Inflation hit 2.6 percent in October on a year-over-year basis, in line with Dow Jones estimates. Core CPI inflation, which excludes food and energy, hit 3.3 percent in October on a 12-month basis.

Stock market futures rose after the news, while Treasury yields dropped.

The CPI inflation reading for September was 2.4 percent, suggesting that inflation is accelerating.

In other news, President-elect Donald Trump’s cabinet is beginning to take shape, with major picks including Marco Rubio as Secretary of State, Peter Hegseth as Secretary of Defense, and Tulsi Gabbard as National Security Director.

A surprise announcement on Thursday was Robert Kennedy Jr.’s appointment as Secretary of Health and Human Services (HHS), which caused pharmaceutical stocks to plummet, given Kennedy’s vaccine-skeptic views.

The new Trump administration will have to oversee a historically high U.S. debt of $36 trillion, with a debt-to-GDP ratio of 120 percent.

Failure to rein in this debt may result in a financial crisis and a loss in investor confidence, according our guest Sheila Bair, former FDIC (Federal Deposit Insurance Corporation) Chair and former Board Chair of Fannie Mae.

Bair said that excessive debt levels could erode investor confidence, leading to higher interest rates and significant economic pain.

“Make no mistake, if we continue on this path, investors will eventually lose confidence in our debt,” said Bair. “The change could be gradual or sudden, but the consequences will be painful no matter the pace.”

She said that the U.S. has long benefited from its status as the world's reserve currency, allowing the U.S. government to easily take on debt, but she warned that this advantage is not guaranteed indefinitely.

“We are the world's reserve currency,” said Bair. “That’s going to keep happening until it doesn’t.”

Addressing potential solutions, Bair called for maintaining moderate interest rates and emphasized that reducing debt relative to GDP is essential to regaining investor confidence.

Turning to the issue of inflation, Bear explained that it is driven by an imbalance between money supply and economic output, using the example of her children's book, Princess Penny and the Money Wizards, to illustrate how money printing causes inflation.

She also said that while low interest rates are politically popular and can temporarily boost borrowing, they often encourage risky financial behavior, asset bubbles, and economic instability.

“It’s a common misperception that low interest rates help the economy,” Bair explained. “The empirical research just isn’t there.”

Market Movements

From November 8 to November 15, the following assets experienced dramatic swings in price. Data are up-to-date as of November 15 at 9pm ET (approximate).

1. MicroStrategy Inc. — up 26 percent.

2. Moderna — down 21.3 percent.

3. Dogecoin — up ~100 percent.

4. Walt Disney Co. — up 16.2 percent.

5. Copper — down 4.9 percent.

The following major assets experienced the following price movements during the same time interval.

DXY — up 1.6 percent.

Bitcoin — up 20.6 percent.

Gold — down 4.6 percent.

10-year Treasury yield — up 3.1 percent.

S&P 500 — down 2.1 percent.

Russell 2000 — down 4 percent.

USD/yuan — up 0.8 percent.

EQUITIES:
THIS IS WHERE STOCKS WILL TOP
Gareth Soloway, November 11, 2024

We invited Gareth Soloway, Chief Market Strategist of VerifiedInvesting.com, to the show to give us his reaction to the recent rally in risk assets follow last week’s election.

Soloway said that while the market's rally was expected due to Trump’s pro-business stance, the scale of the rally was surprising. He had a long-term target range of 6,000 to 6,100 points. This, according to Soloway, corresponds with the 1929 market high before The Great Depression.

“We are back to a trend line that goes back to 1929, almost a hundred years ago,” he said. “Think about what happened after each of these highs—it does make me a little bit concerned.”

When it comes to the economy, Soloway said that he was concerned about Trump’s new tariffs, which could raise the cost of goods and services, hence leading to more inflation. He said that retaliatory tariffs from other countries may worsen this problem.

“Tariffs can increase production in the U.S., but they also mean higher prices, which is inflationary,” said Soloway. “Don’t think that retaliation won’t come, especially with the level of tariffs that are going to be put on.”

He mentioned that while the Federal Reserve might want to cut rates to stimulate the economy, inflationary pressures from tariffs and other economic policies could limit their ability to do so.

“I do think you’re going to have that uptick in inflation over the next year or so, and that’s going to put the screws to the Fed,” he said.

Soloway maintained a cautious yet optimistic view on gold and bonds for 2025. He expected potential pullbacks in equities and Bitcoin, while anticipating that gold could regain its momentum.

ECONOMY:
INFLATION TO SURGE, BANKS WILL FAIL
Peter Schiff, November 12, 2024

Peter Schiff, Chief Market Strategist at Euro Pacific Asset Management, joined the show again to give us his economic outlook following Trump’s election to office.

Schiff said that while official GDP numbers may show growth, the reality is that this growth is inflated and not indicative of true economic health.

He said, “All these numbers are a function of inflation masquerading as growth. The real economy is weak.”

In particular, Schiff said that the U.S. is already experiencing stagflation, even if the Federal Reserve refuses to acknowledge it. He said that the Fed is in a difficult position to respond, given its limited monetary tools like rate cuts and quantitative easing.

Schiff also warned that the current higher interest rate environment, coupled with an increasing national debt, poses severe risks.

"We’re going to have much higher interest rates with much bigger debt," he said, predicting that this combination will push the U.S. towards greater economic instability.

Schiff said that the new Trump administration will not be able to effectively deal with rising debt levels, despite promises of a Department of Government Efficiency to combat wasteful spending.

“When Trump came to office [in his first term]... the annual deficit spending was about $650 billion officially,” said Schiff. “Now it’s well over $2 trillion a year.”

He also expressed concerns about the health of the banking system, emphasizing that banks are in a fragile state due to their exposure to low-yielding debt accumulated during a period of zero interest rates.

“The problem is the economy can't handle those higher rates,” said Schiff, warning about what would happen if Treasury yields rose to 6 percent. “A lot more banks would fail."

Schiff was bullish on gold despite recent declines post-Trump victory, arguing that the current market sentiment is mistaken.

He said, "Gold went up by about 40% during Trump's first term... I think it’s actually going to do a lot better despite what the markets are saying right now."

BONDS:
INTEREST RATES ABOUT TO SURGE
Peter Boockvar, November 10, 2024

We spoke again with Peter Boockvar, CIO of Bleakley Financial Group, about his outlook for various assets under the Trump economy.

Boockvar said that the global bond market could experience an “unwind of an epic bubble.” He predicted that while the Federal Reserve (Fed) may continue to cut short-term rates, “longer-term interest rates across the yield curve are going to stay higher.”

In particular, he forecasted that the 10-year U.S. Treasury yield may re-test the 5 percent level due to worries about U.S. debt and deficits — or international factors, such as tariff battles.

He criticized the Fed for potentially misjudging the market's response to rate cuts, saying, “J. Powell in his press conference...was rather dismissive when someone asked him about this rise in long rates after you cut interest rates.”

Boockvar believed that this attitude could lead the Fed into “another mistake” if it fails to respond adequately to market signals, like the price of gold and the bond market's movements.

“A lot of what Powell tried to do...has sort of backfired and that's why I actually thought he should have done nothing at the November meeting,” said Boockvar.

The rise in the 10-year yield, Boockvar pointed out, was driven by a combination of inflation expectations and supply-demand dynamics in the bond market. This could reflect investors' growing concern over debt and deficit issues, not just in the U.S. but also observed in other sovereign bond markets, such as the U.K. and France.

GOLD:
WILL THE GOLD SELLOFF INTENSIFY?
Gary Wagner, November 13, 2024

Gary Wagner, Editor of TheGoldForecast.com, discussed the current state of the gold market following the election of Donald Trump as the 47th President of the United States.

Wagner said that Trump's win brought certainty to the markets, boosting equities and Bitcoin while causing a $200 decline in gold prices.

“Gold dropped $200 from the all-time record high due to the uncertainty premium being removed after Trump's election win,” say Wagner.

The strong performance of the U.S. dollar post-election also contributed to gold's downturn, as the two assets usually move in opposing directions.

Wagner said that Trump’s foreign policy, which would involve pacifying conflicts in Ukraine and The Middle East, would also put downward pressure on gold prices. He provided a technical analysis of gold's recent movements, identifying that it had likely entered a corrective phase after peaking at $2,800.

“I believe that $2,600, maybe $2,580, is the absolute floor of this current correction,” predicted Wagner, who added that “the fundamentals that propelled gold to $2,800 remain intact, suggesting we could see gold exceed that level after this correction.”

Wagner said that long-term investors would be wise to accumulate gold during this dip, with the expectation that prices could exceed $2,800 in the future. He also offered insights on silver, noting its high beta and recent price fluctuations that mirrored gold's movements.

“For long-term investors with a two- to three-year horizon, this pullback presents an excellent point to accumulate gold,” he said.

WHAT TO WATCH

Tuesday, November 19, 2024

• Housing Starts — This tracks the number of new residential construction projects that have begun.

Thursday, November 21, 2024

• Existing Home Sales — This shows the number of sales of existing homes.

TABLE OF CONTENTS

1. Market Recap: Steve Hanke on Trump’s election — ‘revolt against the elites’

2. EQUITIES: Milton Berg on Trump’s effect on markets

3. EQUITIES: Chris Vermeulen on ‘euphoric’ post-election market rally

4. ECONOMY: Nobel Laureate Simon Johnson on tariffs and hyperinflation

5. ECONOMY: Will interest rates spike after the election? Kathy Jones weighs in

6. ECONOMY: U.S. Senate candidate John Deaton on U.S. debt default

7. POLITICS: Why Trump won, and what it means for the economy — Matt Gertken

8. What to Watch

MARKET RECAP

Latest News. Donald Trump won the U.S. presidential election on Tuesday, November 6th, making him the 47th President of the United States of America.

Risk assets reacted positively, with the Dow Jones up over 1,200 points on Wednesday morning; bank stocks performed particularly well. Bitcoin reached a record high of $75k on the day of the election, and the U.S. dollar index rose 1.65 percent. Treasuries, however, fell in price, and gold prices slid to a three-week low.

In other news, the Federal Reserve cut the Fed Funds Rate by 25 bps, in line with market expectations.

Steve Hanke, Professor of Applied Economics at Johns Hopkins University, had predicted a Trump win, and joined the program to give his outlook for a post-election economy.

Hanke said that the election of Trump represents a “revolt against the elites.” He emphasized that over the last four years, Americans grew frustrated with how Washington D.C. and media elites managed the country, particularly in handling fiscal and monetary policies that seemed to disproportionately benefit the wealthy.

Hanke predicted that Trump would focus on tax cuts rather than reining in government spending.

“Trump will likely focus on tax reductions,” said Hanke. “His attention to controlling the fiscal deficit will likely be lax.”

Hanke also mentioned the idea of Elon Musk heading a proposed “Department of Government Efficiency” under a potential Trump administration.

He drew a parallel to the Grace Commission during the Reagan era, which aimed to identify and cut waste, fraud, and abuse in government spending. He said that while the Grace Commission produced extensive reports, it ultimately did not result in significant policy changes or actions.

When it comes to the Federal Reserve, Hanke criticized the Fed under Chair Jerome Powell, calling it a "complete disaster," especially during its COVID-19 response. He explained how the Fed monetized over 90 percent of the increased deficit by purchasing government bonds, which led to a massive expansion of the money supply and, consequently, inflation.

Finally, when it comes to foreign policy, Hanke said that Trump would struggle to control conflicts like the Israel-Hamas conflict. While he might have some influence on Ukraine, Hanke said that Russia already holds a strong position.

“The winner calls the tune,” said Hanke. “The Russians have won the war [in Ukraine] so far, so they’ll be dictating the terms.”

Market Movements

From November 1 to November 8, the following assets experienced dramatic swings in price. Data are up-to-date as of November 8 at 9pm ET (approximate).

1. Beyond Meat — down 11.8 percent.

2. Palantir Technologies — up 39.3 percent.

3. Coffee (commodity) — up 4.5 percent.

4. Tesla — up 29 percent.

5. Moderna — down 14.3 percent.

DXY — up 0.6 percent.

Bitcoin — up 10.4 percent.

Gold — down 2 percent.

10-year Treasury yield — down 1.2 percent.

S&P 500 — up 4.7 percent.

Russell 2000 — up 8.6 percent.

USD/yuan — up 0.8 percent.

EQUITIES:
MARKETS ENTERING TOPPING PHASE
Milton Berg, November 8, 2024

Milton Berg, Founder of MB Advisors, joined us to discuss his analysis of how Trump’s presidency would affect markets.

Berg said that Trump, known for his frugality and negotiation skills, would focus on austerity and cutting waste, which could suppress market growth in the early years but ultimately be positive for the economy.

Cautioning that the response to Trump’s election could be a “buy the rumour, sell the news,” event, Berg said that markets would rally after the initial optimism following a Trump victory, followed by a potential decline. He also said that Trump would promote austerity.

In particular, Berg predicted that Trump would hire people like Elon Musk and Scott Bessent to trim the size of government. He drew a parallel between Donald Trump and President Ronald Reagan, both of whom he labelled “capitalist” leaders. He said that after Reagan was elected, the market saw a significant rally but ultimately reached a peak following austerity measures.

“Reagan was great for the economy, but in order to do the great things he did, he had to first have some pain for two years,” said Berg.

Berg also addressed the concern that Trump's policies aimed at reducing the debt and government spending could be deflationary.

He said, “The risk is deflationary or disinflationary at this point... paying down debt is bearish for stock markets initially.”

He explained that this is because paying down the debt requires imposing cuts on government spending.

EQUITIES:
TRUMP WINS, ‘EUPHORIC’ MARKET RALLY
Chris Vermeulen, November 6, 2024

We were joined by Chris Vermeulen, Chief Market Strategist at The Technical Traders, to discuss market moves following Donald Trump's victory in the U.S. presidential election.

The financial markets showed a significant reaction. The S&P 500 rose by 2%, the NASDAQ by 2.3%, while gold prices fell by 2.7%. Bitcoin also hit a new all-time high, reaching around $74,500.

Vermuelen said that this was due to Donald Trump being viewed as a pro-business candidate, and that he has prominent business leaders like Elon Musk backing him.

“Trump and Elon Musk, they won together, more-or-less,” said Vermeuelen. “They’re both pro-business, and so we’re seeing small caps skyrocket today, and stocks across the board.”

Despite his short-term bullish outlook, Vermeulen said he is skeptical about a long-term bull market due to underlying economic cycles.

He said, "A one-day rally doesn't change an entire massive economic cycle," indicating that while markets could see further gains, caution is warranted.

Vermeulen said that the current market, even amidst rallies, could be in a late-stage cycle where a reset is looming. This reset would involve a significant correction or decline in asset prices, akin to what was observed during the 2008 financial crisis or the 2000 tech bubble.

“I believe stocks are overdone,” said Vermeulen. “We could have a big market correction or financial reset at any point.”

He said that “we’re many weeks” away from the market “breaking down” into a bearish pattern.

ECONOMY:
WILL TRUMP TARIFFS TRIGGER HYPERINFLATION?
Simon Johnson, November 6, 2024

We welcomed Simon Johnson, 2024 Nobel Prize in Economics laureate and Professor of Entrepreneurship at MIT, to the show.

Johnson won the Nobel Prize alongside his colleagues Daron Acemoglu and James Robinson “for how institutions are formed and affect prosperity.” He is also the former Chief Economist at the International Monetary Fund (IMF).

Johnson said that unrealized losses in U.S. banks are a significant concern, especially given the Silicon Valley Bank crash in 2023. He said that while there's increased awareness, these issues remain problematic.

“The regulators and supervisors are paying a lot more attention than they were before Silicon Valley Bank,” he said.

He added that the rising U.S. debt burden could trigger a financial crisis, in line with similar warnings offered by former FDIC Chair Sheila Bair. However, Johnson said that financial markets and politicians “do not take this issue seriously,” which is a concern.

Johnson also said that “too big to fail” (TBTF) banks pose significant risks to the financial system. He believes that failure is a fundamental part of capitalism, but these major banks are shielded from it in an unprecedented manner through bailouts and other taxpayer-subsidized protections. This, according to Johnson skews incentives toward taking excessive risks, as executives have little personal downside.

Finally, Johnson touched upon Donald Trump’s proposed tariff policies. He said that Trump’s plans for imposing sweeping tariffs among to a "massive tax" on lower-income Americans who rely heavily on imported goods. According to Johnson, such tariffs disproportionately affect low-income consumers, potentially costing them thousands of dollars annually in higher prices.

He also said that Trump’s ideas to replace income taxes with tariffs is unfeasible, calling them a "ludicrous fantasy" that doesn’t add up mathematically.

ECONOMY:
WILL INTEREST RATES SPIKE AFTER ELECTION?
Kathy Jones, November 4, 2024

We were joined by Kathy Jones, Chief Fixed Income Strategist at Charles Schwab, to discuss the economy and its effect on the bond market.

Jones said that while inflation expectations have risen from summer lows, they are stabilizing in the low-to-mid 2 percent range. This reflects a resilient economy that has performed better than anticipated, driven largely by consumer spending.

“The economy’s been much more resilient,” said Jones, “and that means the Fed can’t cut rates as much, and probably inflation doesn’t drift down as much as had been anticipated.”

Jones’s base case includes one more rate cut in 2024, followed by a gradual easing to a 3-3.5 percent terminal rate by the end of 2025. Despite certain categories like insurance and housing keeping inflation from dropping more, a 2-2.5 percent inflation rate would be acceptable for the Federal Reserve, said Jones.

Although unemployment has ticked up slightly from record lows, it remains close to full employment. Jones said that jobless claims are still low, indicating a healthy labor market.

“The labor market still looks healthy,” she said. “We could see it tick up a bit, but we’re not looking for it to really accelerate to the upside or downside.”

Jones’s outlook includes expectations of a “bull steepener” in the yield curve, with longer-term yields rising less than shorter-term ones. The 10-year yield is considered reasonably priced at 4-4.25%. She pointed out that the MOVE index, indicating bond market volatility, has increased due to rising rates and economic uncertainties, including the elections and fiscal policy ambiguity.

ECONOMY:
U.S. DEBT DEFAULT INEVITABLE
John Deaton, November 2, 2024

We welcomed John Deaton, Senate candidate and Managing Partner at Deaton Law Firm, to the show to discuss his views on the economy and cryptocurrencies.

Deaton said that the U.S. is facing multiple crises: immigration, debt, inflation, opioid abuse, and foreign conflicts. He criticizes the current leadership, particularly Elizabeth Warren, who he was running against, for being divisive and ineffective.

He warned that the U.S. is effectively broke, with $36 trillion in national debt, rising credit card and student loan debt, and $3 billion in daily interest payments. He opposed solutions that involve printing more money, as it exacerbates inflation and widens the wealth gap.

“If we continue down this path, we risk turning the United States into another Venezuela or Argentina,” said Deaton.

He proposed the "Government Spending Accountability Act" to require departments to pass audits or face funding freezes. He also advocated for a "single bill approach" to limit excessive and unrelated legislative additions.

“We can't tax enough,” said Deaton, “we can only grow our way out of this.”

Deaton has also been a prominent figure in opposing the SEC's classification of XRP as a security. He said that the government should foster innovation and adopt smart regulatory frameworks for blockchain and crypto, rather than trying to stifle the industry.

“The government overreach and what went down at the SEC by certain bad actors was just outrageous to me,” said Deaton. “When they control your money, they control your entire life.”

He also said that he is opposed to central bank digital currencies, saying that it’s a “hill I’m willing to die on for sure.”

POLITICS:
THE REAL REASON TRUMP WON
Matt Gertken, November 7, 2024

Matt Gertken, Chief Geopolitical Strategist at BCA Research, joined us to discuss the impacts of Donald Trump’s win in the presidential election, and what it could mean for U.S. economic policy and foreign policy.

Gertken said that Trump had won 51% of the popular vote, driven largely by economic concerns such as inflation.

“Inflation was the real driver in this election,” said Gertken, “and that 20 percent increase in price levels over the last three years really motivated a huge opposition.”

He predicted that the Republicans' economic approach would involve substantial tax cuts reminiscent of Trump’s 2017 policies. While this could stimulate the economy in the short term, it could also lead to higher budget deficits and inflationary pressures.

The potential fiscal expansion would put the Federal Reserve (Fed) in a challenging position.

“The Fed has to be a little bit more hawkish, a little more vigilant, and that’s where we then see President Trump get entangled with Chairman Powell once again,” said Gertken.

When it comes to foreign policy, Gertken said that Trump would push for a ceasefire in Ukraine, but would have a harder time de-escalating tensions in the Middle East. He also said that tensions with China would continue.

“Trump's election in 2016 marked a historic shift toward competition with China,” he said, “and that trajectory is going to continue with him back in office.”

WHAT TO WATCH

Wednesday, November 13, 2024

• Consumer Price Index — This measures the level of prices for goods and services that a typical U.S. consumer pays.

Thursday, November 14, 2024

• Producer Price Index — This measures the level of prices for inputs that U.S. producers pay.

Friday, November 15, 2024

• U.S. retail sales — These data show the total receipts of retail stores, reflecting consumer spending.

TABLE OF CONTENTS

1. Market Recap: Keith McCullough on ‘stagflation’ risk

2. ECONOMY: Inflation is inevitable, says Rick Rule

3. ECONOMY: Lyn Alden on investing in 2025 amidst growing deficits

4. COMMODITIES: Mike McGlone sees deflation in commodity markets

5. TECH: Why more liquidity will flow into tech, according to Jordan Nof

6. What to Watch

MARKET RECAP

Latest News. Markets are priming for the U.S. election on Tuesday, November 5th. Bloomberg predicts that gold, the U.S. dollar, and Bitcoin could rise in the event of a Trump win, while the yuan, peso, and 10-year Treasury futures would rise if Harris wins. Betting markets such as Polymarket predict that Trump will win, while major polls show a tight race.

Meanwhile, 10-year Treasury yields have been rising since the FOMC’s last rate decision, with markets pricing in higher inflation in the future. Both the Republican and Democratic parties’ fiscal plans are projected to raise the deficit, which could increase the price of goods and services. The Federal Reserve will meet on Wednesday, November 6th, to decide on whether to further cut rates.

Markets are pricing in a 25 bps cut. The current Fed Funds Rate is in the 475 to 500 bps range.

To discuss these developments, we welcomed to the show Keith McCullough, Founder and CEO of Hedgeye Risk Management, who highlighted the recent tumult in Treasury markets. McCullough singled out the MOVE Index, which proxies for Treasury volatility, and said that its recent rise indicates an increased risk of inflation.

“The MOVE Index going vertical is basically the sign that we’re right, that inflation is already reaccelerating,” said McCullough.

McCullough predicted a shift toward “stagflation,” where growth slows and inflation accelerates. Based on Hedgeye’s analysis, he projected that inflation would stay above the Fed’s 2 percent target, and remain “higher for longer.”

“When you have real growth slowing and inflation sticky and rising...that type of environment plays to hard assets,” he said.

In particular, McCullough said that investing in assets like gold, silver, and other commodities would be beneficial. He cautioned against bonds, leveraged small-cap stocks, or riskier credit options.

When it comes to the U.S. elections, McCullough said that Hedgeye does not base its models on specific election outcomes. He nonetheless observed that Trump had offered tax cuts — possibly even eliminating taxes completely and replacing them with tariffs.

“If you have tax cuts like that or anything that really gets off the back of small business in America...there’s no doubt you could see a lot of growth,” said McCullough.

In contrast, he said that a Harris administration would raise taxes and increase government spending, comparing such policies to “modern monetary theory,” and he said that this could increase inflation further.

Market Movements

From October 25 to November 1, the following assets experienced dramatic swings in price. Data are up-to-date as of October 1 at 9pm ET (approximate).

1. Trump Media & Tech Group (DJT) — down 27.4 percent.

2. JetBlue Airways — down 20.9 percent.

3. Natural Gas (Henry Hub) — up 5.9 percent.

4. Reddit, Inc. — up 38.9 percent.

5. Lumber — up 4.4 percent.

What follows are the price movements of major assets over the past week.

DXY — up 0.06 percent.

Bitcoin — up 2.5 percent.

Gold — no change.

10-year Treasury yield — up 3.7 percent.

S&P 500 — down 0.9 percent.