'2008 on Steroids' - Devastating Global Bust Coming in 2025: David Hunter
What this covers
David Hunter maintains his call for a devastating global bust that could result in an 80% drop in the broad market, and he sees it potentially unfolding in the middle of 2025, after a continued parabolic melt up leads to valuations that will finally make investors realize the emperor has no clothes. David discusses whether gold could provide a shelter from the storm, how Trump at the helm could soften the blow, where he's looking for value in markets today, and much more.
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00:00 Introduction 00:40 Market Trends to Watch 02:54 Will China Move on Taiwan? 05:51 Debt Ceiling Debacle 07:14 Global Bust in 2025 10:52 How Will Bitcoin React? 15:08 Could Gold Protect From the Crash? 19:48 Can Trump Turn Things Around? 27:55 Do Passive Inflows Change Everything? 35:27 Fed Cuts and Interest Rates 39:14 Value in Fixed Income
#marketcrash #recession #commodities
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Hunter argues that despite near-term market melt-up into 2025, a global bust comparable to 2008 but worse is inevitable mid-year, driven by excessive leverage globally, which will require unprecedented monetary expansion (20 trillion+) and ultimately produce a deflationary collapse in the 2030s despite massive policy responses.
- China's real estate collapse and deflation presage a synchronized global bust as banks worldwide are more overleveraged than in 2008
- The Fed and central banks have no choice but to print massively during the bust, regardless of stated intentions, because it's the only tool available
- Bond market will see 10-year yields fall to 2.5% in the next 6 months, then to 0% or negative during the bust, followed by secular highs above 1981 peaks by the 2030s
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The mechanism for reaching zero to negative rates during the bust is Fed QE of 20 trillion, which requires the Fed to buy every available bond to inject money into the system, while government simultaneously runs large fiscal deficits that the Fed monetizes, preventing a supply shortage problem.
“if you're printing 20 trillion if you're coming out with you know QE of 20 trli you're that means you have to be buying um debt right they'll be buying every Bond they can Bond and Bill they can get their hands on to put money into the system at the same time the government's still going to be you know they'll be matching a probably not dollar for dollar but they'll be doing a lot of fiscal expansion so they'll be playing up new debt but they'll be they'll be monetizing all the debt uh so it won't be a problem of saying well there's Big Supply out there and nobody wants to buy it know fed will be the buyer of Last Resort”
The Federal Reserve does not actually control interest rates; long-term rates are market-determined, as evidenced by 10-year Treasury yields rising while the Fed cuts rates, proving Fed rate cuts do not automatically push down long-duration yields.
“I think there's this idea out there that when the FED Cuts rates automatically treasury yields go down um how do you expect the FED to react here and what is the rise in the 10year rate telling us yeah I don't think it's telling us a lot I think the rise in the 10year rate everybody got excited about that that's why the Market's down and Etc um I think the rise in the 10year rate was as I said directly um a response to Trump getting elected”
Buying long-duration bonds near the rate lows (near zero percent) is a major strategic mistake, as it locks investors into minimal yields while rates subsequently rise to 14-15%, turning bonds purchased at 1% or 5% rates into severe capital-loss vehicles for the entire next decade
“if you buy a bond you're locking yourself into the rate you buy that Bond at so if you buy a bond at 1% you know that's G to be a big loser as rates go to 14 or 15 per. if you buy a bond at 5% and rates go to 14 or 15% still a big loser um so staying away from bonds will help your portfolio immensely and just understanding that you may have to give up early on you know you're going to be choosing between you know a bond yielding 1% a t- bill yielding zero um but you're gonna be better off in that t- bill because within a year you're G to be or maybe even sooner you're gonna be having the t- bill out out returning that 1% you locked yourself into on the bond”
Gold will not be a safe haven that rallies during the bust; instead it will decline but less severely than equities, falling 25-30% from its pre-bust peak of 3,400 (down from breakout at 2,100 to a range of 2,100-2,500), because the monetary response (not safe-haven demand) will drive the post-bust recovery.
“gold won't fall anywhere near as much as the equity Market in my opinion silver could Silver's got you know more volatility to it but but gold yeah you you probably see it down less and recover much sooner because the response to the bus will be massive money as well as massive massive fiscal response you know government um response but but that massive money response means people will probably take that as a signal that we got to get into gold again um so I'm kind of using and I I still think there's a big run in gold and silver here in the next six months um but I'm you know I'm saying gold can get 3,400 here um before the bus pre- bust and then could fall back anywhere from its breakout point at 2100 to Mid 2500 so if you do a calculus on that it's basically saying it could fall by somewhere probably between 25 and 30%”
The Federal Reserve does not actually control interest rates; longer-term rate movements are driven by market expectations about inflation and fiscal policy rather than Fed policy decisions.
“the FED doesn't actually have any control over interest rates I think there's this idea out there that when the FED Cuts rates automatically treasury yields go down”
Economic cycles have ratcheted upward in magnitude over the past 80 years, with each successive cycle featuring larger excesses, imbalances, and corresponding monetary responses, creating an inevitable escalation that eventually goes 'off the rails.'
“you know we're this is 80 years in the making you know we've we've had cycle after cycle where the excesses build up and to bigger levels higher levels and then it takes a bigger response to bring it back down from those excesses and in doing that they overshoot and then that creates an even bigger neck cycle so you've had this ratcheting up of excess imbalances and monetary response so now we're you know we're at levels where I think um what comes at you comes at you bigger and faster and the response is bigger and faster and I think we're just at that point where you know it it goes off the rails it just goes you know goes through the roof on the upside in terms of um the Melt up um the blowoff in the market um and then and and the excess buildup you get this um crash in not just the markets but in the financial system”
Policy makers currently face unprecedented situations they have never seen before in history, as the magnitude of excesses and the response required are operating in 'nowhere land' beyond any prior precedent, meaning there is no playbook for what happens next
“we're we're operating in um nowhere land you know basically unprecedented territory so no policy maker has ever been here before doesn't know what to do”
Default risk is not a 2025 problem but a 2030s problem, because by then inflation will be so high that the Fed loses its printing press—printing will only cause higher inflation, making that point when default becomes possible.
“my whole thesis is that um you know we as long as we have a printing press we're not defaulting on the debt the problem with the the issue with default I think is a 2030s problem because by then I think we lose our printing press simply because inflation's way too high and you can't print when you know printing just leads to even higher inflation and a bigger problem”
Bitcoin and cryptocurrency have not yet been tested in a recession or downturn, have never experienced a real economic stress event, so their durability and true value cannot be assessed until the coming bust tests them.
“one reason I don't follow it is I say it's never really gone through even a downturn you know we haven't even had a recession since bitcoin's been around um so let's see how it holds up in the bust and then we can kind of see what kind of staying power it has”
The Federal Reserve's stated commitment to avoiding QE (per Powell) is counterproductive to preventing the bust because slower, more cautious responses to warning signs mean the crisis builds larger before eventually forcing massive response, resulting in worse outcomes than quicker intervention would have produced.
“part of why we're gonna have the bust is because of that right because they're going to be slow to respond to what would normally take a quicker would cause a quicker reaction but they're going to say no no we we don't want to do that again and in delay it you get an even bigger downside and then ultimately when they finally realize this thing's out of control they have to come in with both feet and and you know we'll see numbers we've never seen before”
During the deepest bust, treasuries will be the only game in town (no corporates, no spreads); post-bust when rates begin bottoming, investors should avoid buying long-duration bonds and instead roll short-term Treasury bills quarterly, capturing rising rates as the rate cycle turns upward over 6-7 years.
“as the economy goes into recession and then ultimately a bust that you move from Two and a half down to zero over the course of many months um obviously that's there's only one game in town at that point that's treasuries you won't want to be in anything uh you don't try to play spreads above treasuries you it'll be treasuries or bus basically so um so there's a point there's a crossover point where you you know you can own both corporates and treasuries now but there's a crossover point where you'll want to move everything to just government guaranteed bonds because that's the only thing that's going to hold up in the bus and then there's a point at which you want to say you nobody's gonna be able to pinpoint this or very few so I'm not saying you do it to the precise moment but you'll want to say at some point rates are bottoming out if it's zero it's zero if it's a quarter it's a quarter if it's a negative it's a negative but somewhere down there rates are botting me out and I would not want to buy buy a one would want would not want to own a long duration Bond going forward for probably the next several years you know for the next decade maybe um government or otherwise and at that point your fixed income strategy still GNA fixed income your fixed income strategy going forward from the bust um and you might be okay for a few months into the recovery but going forward would be rolling treasury bills”
An 80-year pattern of accumulating excesses and imbalances has created a ratcheting cycle where each crisis requires a bigger monetary response, which overshoots and creates a bigger next cycle; the system is now at a critical point where 'what comes at you comes at you bigger and faster' in both the melt-up and the crash.
“we've had cycle after cycle where the excesses build up and to bigger levels higher levels and then it takes a bigger response to bring it back down from those excesses and in doing that they overshoot and then that creates an even bigger neck cycle so you've had this ratcheting up of excess imbalances and monetary response so now we're you know we're at levels where I think um what comes at you comes at you bigger and faster and the response is bigger and faster and I think we're just at that point where you know it it goes off the rails”
China is leading the edge of a global bust because it is more levered than anyone else, has more excesses than anyone else, and is running into more problems due to its dependence on real estate, and it is just a matter of time before the rest of the world catches up.
“I think what we're seeing in China um you know particularly with what you've seen in their interest rates and you know basically in deflation now I think they're Leading Edge Of This Global bust um you know they they are more more um levered than anyone else they're more they have more excesses than anyone else and you know they're running into more problems than anyone else right now because of their dependence on real estate um and I think it just a matter of time before the rest of the world catches up with that”
China is experiencing deflation and is the leading edge of a global bust that will spread to Europe, Asia, Canada, and Australia due to their excessive leverage, real estate dependence, and accumulated economic imbalances.
“I think what we're seeing in China um you know particularly with what you've seen in their interest rates and you know basically in deflation now I think they're Leading Edge Of This Global bust um you know they they are more more um levered than anyone else they're more they have more excesses than anyone else and you know they're running into more problems than anyone else right now because of their dependence on real estate um and I think it just a matter of time before the rest of the world catches up with that”
Federal Reserve balance sheet has grown from 875 billion (2008 pre-crisis level, largest ever at that time) to 9 trillion (pandemic peak) to predicted 30 trillion (by end of coming bust), representing an unprecedented escalation of monetary expansion.
“we were a central bank balance sheet of 875 billion back in 2008 before the response to the you know financial crisis 875 billion was the largest balance sheet we've had going back to you know was as big as we had gotten going back to 1913 when the Fed was put in place and now we're talking you know we're at we got to n trillion during the pandemic and we're talking maybe 30 trillion you know by the time we get through the bust”
Equity market peaks achieved in early-to-mid 2025 (potentially Q1) are unlikely to be revisited for decades due to much higher interest rates and compressed PE multiples in the subsequent cycle.
“the peak um this next year meaning that 7500 if that's what it turns out to be on the PE the peak we see in this cycle is likely to stand for decades and terms of the indexes they'll be opportunities within the indexes you know lots of groups that will do well commodity uh producers Etc but the indexes I think because of much higher interest rates next cycle uh it'll squeeze PE multiples Etc so I don't think you'll revisit the highs of this next you know probably probably see the highs in the first half of 2025 maybe even first quarter um those highs probably won't be seen again this decade and maybe not next decade”
Central banks will be forced to inject 20 trillion dollars in new money into the financial system in response to the global bust, despite Fed leadership's stated intention to avoid repeating QE mistakes from the last cycle.
“as much as I'm very encouraged by um Trump I think he's very sincere in what he's trying to accomplish to bring America back to what it used to be um you know and make us the world leader again I think I think he will be successful in some ways with um you know the military getting the military back in in shape and you know bringing bringing us bringing down the world wars you know Bringing Down the you know the Ukrainian situation hopefully resolving something in the Middle East um I you know all that people should be optimistic about but you know we're this is 80 years in the making you know we've we've had cycle after cycle where the excesses build up and to bigger levels higher levels and then it takes a bigger response to bring it back down from those excesses and in doing that they overshoot and then that creates an even bigger neck cycle so you've had this ratcheting up of excess imbalances and monetary response so now we're you know we're at levels where I think um what comes at you comes at you bigger and faster and the response is bigger and faster”
The Federal Reserve's recent rate cuts do not signal actual easing of monetary conditions, but rather reflect the Fed's delayed response to deteriorating economic conditions.
“part of why we're gonna have the bust is because of that right because they're going to be slow to respond to what would normally take a quicker would cause a quicker reaction but they're going to say no no we we don't want to do that again and in delay it you get an even bigger downside”
Supply-side economics is a legitimate framework where significant tax rate cuts lead to higher overall tax revenues rather than lower revenues, contrary to static analysis models; however, this positive economic effect is overwhelmed by the incoming macroeconomic bust.
“I don't again this has been true really since since Reagan um that people do not understand supply side economics it is a legitimate argument and I think it could be proven that it's happened over and over you cut tax rates um in a um Dramatical fashion you you know you uh alter tax approach dramatically by cutting taxes and you get higher revenues you don't get you know they they all use a static analysis to say well you're cutting marginal tax rates therefore you're going to get less tax revenue absolutely false you know the problem we've had the reason deficits have continued to grow has been spending not not tax revenues our tax revenues grow uh with tax cuts”
The Fed's monetization of government debt during the bust phase will mean the Fed purchases essentially all new Treasury issuance as the government simultaneously runs large fiscal deficits, preventing any meaningful debt supply from accumulating in private markets
“if you're printing 20 trillion if you're coming out with you know QE of 20 trli you're that means you have to be buying um debt right they'll be buying every Bond they can Bond and Bill they can get their hands on to put money into the system at the same time the government's still going to be you know they'll be matching a probably not dollar for dollar but they'll be doing a lot of fiscal expansion so they'll be playing up new debt but they'll be they'll be monetizing all the debt uh so it won't be a problem of saying well there's Big Supply out there and nobody wants to buy it”
The US will not default on its debt in the near term because as long as the Federal Reserve has a printing press, default is technically impossible; however, default becomes a realistic possibility in the 2030s when inflation becomes so severe that printing money would only exacerbate inflation.
“I don't my whole as you know my whole thesis is that um you know we as long as we have a printing press we're not defaulting on the debt the problem with the the issue with default I think is a 2030s problem because by then I think we lose our printing press simply because inflation's way too high and you can't print when you know printing just leads to even higher inflation and a bigger problem”
Gold will decline from a pre-bust peak of $3,400 back to between $2,100-$2,500 during the bust phase, representing a 25-30% drawdown that is roughly half or a third of equity market losses.
“I'm saying gold can get 3,400 here um before the bus pre- bust and then could fall back anywhere from its breakout point at 2100 to Mid 2500 so if you do a calculus on that it's basically saying it could fall by somewhere probably between 25 and 30% something like that um which would be half or less you know half or a third of what the equity Market does”
Tax revenue growth historically follows tax rate cuts due to dynamic economic effects, not static analysis; the problem with rising deficits has been spending growth, not tax revenue shortfalls—cutting taxes with deregulation would improve deficit control compared to baseline expectations.
“you cut tax rates um in a um Dramatical fashion you you know you uh alter tax approach dramatically by cutting taxes and you get higher revenues you don't get you know they they all use a static analysis to say well you're cutting marginal tax rates therefore you're going to get less tax revenue absolutely false you know the problem we've had the reason deficits have continued to grow has been spending not not tax revenues our tax revenues grow uh with tax cuts”
Passive money flows through ETFs have delayed market corrections and made cycles more stretched out, but when the reversal occurs, the decline will be larger and the subsequent recovery rally will require more money to reflate assets.
“certainly do think um you know the money flows and the passive money flows do influence things to some extent and do make it harder to shut things off or to to you know things get delayed I I would certainly agree that that could be part of why the cycle is stretched out um but I think ultimately that only makes the fall bigger when it reverses um and then and then you know the the amount of money it takes to blow it back up bigger”
The Federal Reserve's balance sheet will expand from the current level to approximately 30 trillion dollars by the end of the bust phase, compared to 875 billion before 2008 and 9 trillion during the pandemic.
“we were we were a central bank balance sheet of 875 billion back in 2008 before the response to the you know financial crisis 875 billion was the largest balance sheet we'd had going back to you know was as big as we had gotten going back to 1913 when the Fed was put in place and now we're talking you know we're at we got to n trillion during the pandemic and we're talking maybe 30 trillion you know by the time we get through the bust”
Bitcoin has not yet been tested in a significant market downturn or recession, and therefore it is not yet proven whether Bitcoin will maintain value during periods of financial system stress or function as the safe-haven alternative some proponents claim.
“one reason I don't follow it is I say it's never really gone through even a downturn you know we haven't even had a recession since bitcoin's been around um so let's see how it holds up in the bust and then we can kind of see what kind of staying power it has”
The bond market's recent 100+ basis point rise in 10-year yields post-election was driven by speculation about Trump's inflationary policies, reflecting bias against Trump rather than genuine economic analysis; this was a counter-trend move in a larger downtrend.
“but but I don't think it's nearly as dire as the bond market wanted to take it and you know they drove interest rates up 100 basis points pretty much on the basis of speculation about Trump policy being inflationary and and I think there is a bias in there that they they just really think he's an idiot um so but I I think these are legitimate um it's a legitimate agenda with a very positive outcome if not for the bust”
The 2020 lows in Treasury yields (0.4% on 10-year) will not be the historic low; instead there will be one more leg down to new lows (possibly zero or negative), which will be the secular peak in bonds and secular low in rates, representing the turning point before multi-decade rate increases.
“everybody thought the 20 20 lows you know when tenure got down to 04 um thought that was the end everybody's consistent I'd say 99.9% of people out there you know pundits out there analysts out there think we've seen the historic low and rates and we won't go back there uh we're going higher not lower I think we have one more leg down to new lows that will be the secular peaking bonds the secular lowing rates”
Trump's presidency, while positive for the economy in normal times due to pro-capitalist deregulation and resource development, will have limited ability to offset the macro bust that is coming in 2025, because the bust represents phenomena (80 years of excess building) that dwarf anything Trump can do at the margin.
“the problem is the macro trumps that I mean the you know I'm talking about something we haven't seen in 90 years you know you can call the Great Depression part of it was a bust you know we did see massive bank failures around the world uh um and we did see you know an economy that was Far Below any recession recessionary Norm so so you could call that what I'm calling here this one isn't going to be a Great Depression it's not stretched out over a decade because they will print that money pretty quickly but the damage that's done in that 12 to 18mth time Horizon that we're in a bust is massive and and it it not only is bigger than anything Trump can can offset with um it also really short circuits some of what he you know if if he were coming in in a normal time if this were even four years ago or eight years ago and he were doing this I'd be super optimistic”
Despite recent market weakness and near-term bearish sentiment, the market will experience one final parabolic melt-up rally lasting 3-4 months (potentially into Q1-Q2 2025) before rolling over into the broader bust.
“I don't believe that at all I think everything I look at in my work says there's you know one last um parabolic melt up into a top so I think could be a first quarter thing could stretch into the second quarter but I think the next three or four months uh is going to be probably the steepest biggest rally we've seen today”
The 10-year Treasury yield will decline from current levels (approximately 4.60%) to 2.5% within the next six months as the market reprices for economic slowdown and Fed easing, representing bullish returns for long-duration Treasury bonds.
“I'm looking for the ten year to go from 460 to two and a half and the next six months let's say um that's obviously very bullish for a 10year treasury and it'll be very bullish for all long duration treasuries”
Trump's pro-capitalist policy agenda—including deregulation, tax cuts, and increased energy production—would normally create economic conditions similar to the Roaring Twenties if implemented during normal economic times, but this cannot offset the macro effects of the incoming bust.
“if if he were coming in in a normal time if this were even four years ago or eight years ago and he were doing this I'd be super optimistic because it's it's a very Pro capitalist uh agenda with you know pretty big deregulation um necessary deregulation um you know drill baby drill so you know taking advantage of the resour resources we have in in this great land um and and cutting government trying to reduce government's influence on the economy which is usually a drag doing all of that I think you know eight years ago would have led to you know something basically what you know people call the Roaring 20s”
Bitcoin does not yet have macro significance for Hunter's analysis because it is not universally held, not a system unto itself, and cannot answer the structural problems he foresees (deflation turning to hyperinflation, sovereign debt vulnerability, collapse in the 2030s), though it may be a good investment for small percentage of people.
“I just don't think Bitcoin has the kind of significance to answer that now it may be an answer for a handful of people or a you know small percentage of people but right now it is not a universally held security it's not it's not a system unto itself um so right now it's just a good investment”
Hunter predicts 20 trillion in new money from the Fed in response to a global bust, with some of that potentially moved up if default risk begins to appear.
“I'm predicting 20 trillion in new money coming out of the FED in response to a global bust”
After the market peaks mid-year, as recession turns to global bust, equity markets will see 70-80% downside in a bear market, with Europe and Asia already in trouble and Canada and Australia joining, creating a global banking crisis worse than 2008 due to worse banking fundamentals worldwide.
“bust refers to the economy the financial system um and bare Market accompanies that to the tune of maybe 70 or 80% downside um but but um you know we aren't done with melt up yet”
Passive ETF flows have delayed market corrections and may have stretched the cycle, but ultimately this only makes the eventual fall bigger when it reverses, and increases the amount of money needed to blow it back up afterward.
“I certainly do think um you know the money flows and the passive money flows do influence things to some extent and do make it harder to shut things off or to to you know things get delayed I I would certainly agree that that could be part of why the cycle is stretched out um but I think ultimately that only makes the fall bigger when it reverses um and then and then you know the the amount of money it takes to blow it back up bigger”
During the bust phase and early recovery, long-duration bonds should be avoided entirely, and investors should instead deploy a rolling short-term Treasury bill strategy, purchasing 6-month bills and rolling them as they mature to capture progressively higher yields as the rate cycle turns.
“and at that point your fixed income strategy going forward from the bust um and you might be okay for a few months into the recovery but going forward would be rolling treasury bills so you buy Six Monon bills and every six months you'd be rolling them at a higher rate you know once that rate cycle starts ratcheting the other direction and you do that for the bells of that you know whether it's a six or sevene cycle and you'll start rolling t- bills at let's say zero or you know a half percent uh in the first year of the recovery by the time you get into the fist or seventh year of the recovery you'll be rolling te treasury bills at high double digits”
The recent backup in interest rates post-election was driven by market participants misinterpreting Trump policies as universally inflationary, reflecting Trump Derangement Syndrome in the economic analysis community.
“the other part of what the last you know basically postelection period has been has been a backup in rates right people added two and two and got six in terms of trump policies he decided his policies were much more inflationary interestingly I think um you know tdf Trump derangement syndrome uh was pervasive throughout even the economic community and the certainly the you know CB you know the CBO and the place that do these analysis they're building in a bias towards saying yeah Trump's worse than Cala and you know the numbers are going to be more inflationary than Biden Etc”
Central banks will be forced to print money regardless of stated intentions to avoid repeating past mistakes, because when facing a systemic financial meltdown they have no other tool that can move quickly to stabilize the system, making the decision to print 'the only tool they have' regardless of policy makers' preferences.
“yeah he he doesn't want to just print money like crazy but that's what's going to happen it's not it's not because of trump it's not because of pow um every Central Bank is gon to have no choice if they want to save the system you can sit back and say well you know we're not blowing up you know we're not going to pump the system up again like we did and you know the mistakes we made last cycle and that's what Pal's telling you right he he's pretty adamant he's not going back to that QE solution again that's easy to say until you're staring it in the face and the system is basically uh melting down you know you're having a freef fall in the financial system they don't have a choice it's the only tool they have where they can move quickly and stabilize the system”
Hunter projects specific price targets for the melt-up phase: S&P 500 to 7,500, NASDAQ to 25,000, Dow Jones to 55,000, Russell 2000 to 3,300, representing 25-50% upside from current levels.
“my target is 7500 on the S&P um 25,000 on the NASDAQ uh 55,000 on the Dell and um 3,300 on the Russell so the Russell from here is basically 50% upside you know Dow the S&P the NASDAQ get you know 25 to 35% but but that's a lot of upside still to go”
Post-bust, gold will undergo a massive rally to 20,000 (approximately 10-fold move from a 2,100 recovery level), and silver will reach 500 (approximately 25-fold move from low-20s recovery level), as precious metals lead the post-bust cycle.
“post bus yeah post bus I think the pre medals are going to lead the pack I mean you will see I think uh gold get to 20,000 uh so if it gets back to say 2100 and then rallies 20,000 almost tfold move um and silver I think can get to 500 so you know if it moves back to low 20s and moves to 500 you know you're talking about you know a 25 f move so so there's there's I think a huge future ahead in the precious metals”
Trump is unlikely to escalate into military conflict over Taiwan because he is focused on de-escalation globally and is unlikely to commit US forces to protect Taiwan when the US can delay and allow domestic semiconductor capacity to build.
“I just don't see us and it's not because he's an appeaser I just think he's going to look at it and say you know we're we're not going to you know put our our citizens at risk and in war um for something like that”
After the melt-up targets are reached, the global bust will occur with equity market downside of 70-80%, bringing recession that transitions into a 'global bust' defined as recession-speed economic contraction but far worse than normal recessions, comparable to 2008-2009 on steroids
“so my call has been for several years we'll we'll get this melt up and then and then the you know bust and bear so bust refers to the economy the financial system um and bare Market accompanies that to the tune of maybe 70 or 80% downside um but but um you know we aren't done with melt up yet”
Taiwan semiconductor dominance means a military conflict with Taiwan in the next year or two would present a significant problem for the US due to disruption of semiconductor supply, but Trump administration's focus on deescalation makes such conflict unlikely despite China's potential use of Taiwan as a distraction from economic problems.
“the biggest problem we have is obviously Taiwan semi is such a dominant player in semiconductors and and the the production of semiconductors that you know if if we can delay this couple years you know you're seeing new plants being built here by uh Taiwan semi so uh and and other companies obviously stepping up with Fabs so so that's really the issue for us in Taiwan if it happens this year or in this next year uh it will present a problem I think but um you know I just have a hard time seeing us go to another stage in in global war when you know Trump's trying to deescalate everything”
Stock market peaks reached in early 2025 (targeting 7,500 S&P, 25,000 NASDAQ) will likely stand for decades and won't be revisited this decade or next decade, due to much higher interest rates constraining PE multiples in the next cycle.
“the peak um this next year meaning that 7500 if that's what it turns out to be on the PE the peak we see in this cycle is likely to stand for decades and terms of the indexes they'll be opportunities within the indexes you know lots of groups that will do well commodity uh producers Etc but the indexes I think because of much higher interest rates next cycle uh it'll squeeze PE multiples Etc so I don't think you'll revisit the highs of this next you know probably probably see the highs in the first half of 2025 maybe even first quarter um those highs probably won't be seen again this decade and maybe not next decade”
Post-bust, gold will experience a ~10-fold increase, reaching 20,000 from a base around 2,100, while silver will experience a ~25-fold increase from low 20s to 500, representing a huge future opportunity in precious metals as the largest gains occur after the bust
“post bus yeah post bus I think the pre medals are going to lead the pack I mean you will see I think uh gold get to 20,000 uh so if it gets back to say 2100 and then rallies 20,000 almost tfold move um and silver I think can get to 500 so you know if it moves back to low 20s and moves to 500 you know you're talking about you know a 25 f move so so there's there's I think a huge feature ahead in the precious metals”
The current market phase is unusual in that market leaders will broaden to include both growth and value stocks simultaneously into the cycle peak, rather than the typical pattern of narrowing into a top like the Nifty 50 in the early 1970s.
“it's kind of unusual because usually As you move to a top you do narrow and you do get you know you narrow right into a top where only a handful of stocks are driving the market you know kind of the nifty50 of the early 1970s um but this one's going to be unusual and that I think we have the opposite I think we broaden to the top”
A Taiwan invasion would create short-term problems for semiconductor supply, but the issue becomes less critical after a few years as new semiconductor fabrication plants (fabs) in the US come online.
“the biggest problem we have is obviously Taiwan semi is such a dominant player in semiconductors and and the the production of semiconductors that you know if if we can delay this couple years you know you're seeing new plants being built here by uh Taiwan semi so uh and and other companies obviously stepping up with Fabs so so that's really the issue for us in Taiwan”
The next three to four months will likely contain a parabolic melt-up with steep gains, reaching specific targets: S&P 7500 (25-35% upside), NASDAQ 25,000 (25-35% upside), Dow 55,000 (significant upside), and Russell 3,300 (50% upside from recent lows), before the market begins to realize the economy is losing steam mid-year.
“I think there's you know one last um parabolic melt up into a top so I think could be a first quarter thing could stretch into the second quarter but I think the next three or four months uh is going to be probably the steepest biggest rally we've seen today so that gets you to you know my target is 7500 on the S&P um 25,000 on the NASDAQ uh 55,000 on the Dell and um 3,300 on the Russell so the Russell from here is basically 50% upside you know Dow the S&P the NASDAQ get you know 25 to 35%”
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The recent one-month consolidation in the stock market (November-December) should not be interpreted as the start of a major correction; instead, Hunter expects a resumption of the uptrend very soon (possibly within days or a week).
“but I think you can't analyze during this last month because it's a it's a consolidation it's partly a consolidation of the moves that those value stocks had so I expect very shortly in fact I think it may be you know may start today or maybe you know next week um but I expect we're going to begin the next leg up after this you know one month consolidation or whatever it is you know four to six week consolidation”
David Hunter is a Wall Street veteran with 50 years of experience and the chief macro strategist of Contrarian Macro Advisors.
“David Hunter a Wall Street veteran with 50 years of experience under his belt and the chief macro strategist of contrarian macro advisors”
We are slowly gravitating towards lower inflation levels and a recession ultimately, with the election in the fall stretching things out as the Biden Administration propped up the economy to help Democrats in the election.
“we're kind of slowly gravitating towards lower inflation levels um and a recession ultimately but with the election in the fall it kind of stretched things out I think I think the Biden Administration put all kinds of things through the government to try to keep the economy propped up”
Bitcoin proponents who advocate for extreme policy positions (like the US government selling all gold to buy Bitcoin) operate more as 'hype artists' than serious analysts, raising concerns about the sustainability of Bitcoin enthusiasm.
“I am concerned about um you know some of these people that are the you know the lead spokesman for it uh you know they're kind of hype artists in a way and and uh you know it feels on the one hand it feels a little toilet bulb like um yeah you know and and then on the other hand it does answer at least one concern out there which is Central Bank control um it gets you outside of that”
Bitcoin advocates and prominent spokesmen like Michael Saylor exhibit 'hype artist' characteristics, and their proposals (e.g., US should sell all gold and buy Bitcoin) feel 'tulip-bulb like' in terms of speculative fervor, raising concerns about speculative mania.
“I am concerned about um you know some of these people that are the you know the lead spokesman for it uh you know they're kind of hype artists in a way and and uh you know it feels on the one hand it feels a little toilet bulb like um yeah you know and and then on the other hand it does answer at least one concern out there which is Central Bank control”
Xi Jinping's emphasis on Taiwan reunification in his New Year's address suggests geopolitical risk, though Hunter views a full military invasion as unlikely.
“regarding China it's interesting to note that Xi Jinping recently gave his uh president presidential address for the New Year's where he emphasized that Taiwan was going to reunify with China I'm wondering if you think you know war is always an effective distraction if you think these economic problems at home could potentially lead them to make a move on thawan or start some sort of conflict um to kind of rally the citizens around a a so-called noble cause yeah rally citizens and distract the citizens from what's really going on um certainly a possibility”
Janet Yellen and the Biden Administration are likely making a 'difficult for Trump' political move with debt ceiling warnings rather than genuine policy positioning, as default is not a realistic risk under a printing press regime.
“but I suspect uh the Biden Administration is and yell and being part of that and certainly a loyal part of that they're just trying to make it difficult for Trump coming in”
The market narrative of narrowness (Magnificent Seven dominating) was overstated; under the surface in late 2024 other groups like Industrials participated, value started playing, and small caps came alive, so the market was broader than headlines suggested.
“people acted like it was seven stocks it wasn't there were other things that were doing pretty well it just was those seven were doing so well that you could statistically say they were you know they were accounting for the whole move um but in you know in a period of the time this year you know middle of this year into the fall we had a pretty broad uh Market you know the ma sens took a rest Nvidia took a rest a lot of the semis took a rest um and you saw other groups come to the Forefront you saw some value start playing and you saw the small caps actually come alive”
The Biden Administration deliberately kept the economy propped up through government stimulus in the months leading to the 2024 election to help Democrats politically, but this did not ultimately help them electorally and now economic payback will come in the first half of 2025
“I think the Biden Administration put all kinds of things through the government to try to keep the economy propped up and you know help help the Democrats uh you know in the election didn't didn't really help them but um now we're probably gonna have payback I would guess in the first half of this year”
Janet Yellen and the Biden Administration's warnings about debt ceiling and default risk were primarily political theater intended to make life difficult for Trump coming into office, rather than genuine default risk
“but I suspect uh the Biden Administration is and yell and being part of that and certainly a loyal part of that they're just trying to make it difficult for Trump coming in”
The 10-year Treasury yield rise from 3.6% to 4.6% represents a two-thirds retracement of the prior 5% to 3.6% decline, and Hunter consistently expected 4.4-4.5% yields; this move does not invalidate his prediction of eventual yield decline to 3% and ultimately 2.5%.
“we had a drop from 5% down to 360 in the preceding six months um and so you went five to 360 back to 460 um some maybe a two-thirds retracement type of thing you have a lot of calls now as happens when the tape moves that way uh for five six 7% tenure uh I have consistently said uh and didn't expect honestly to get to 460 but um I wasn't surprised by 4 440 or 450”