Larry Fink's Predictions For The Next Seven Years (YouTube link)
When Larry Fink was asked what macro or geopolitical trends he thought the world elites might be underestimating, he responded,
"I have no idea what the next seven days are going to be, but I'm very confident in the next seven years."
In the video above, BlackRock CEO Larry Fink outlined his predictions for the next seven years, emphasizing the need for a reimagined "Globalization 2.0."
Key Takeaways
Here’s a summary of his key points:
Globalization’s Mixed Legacy: Fink acknowledges that globalization has lifted millions into the middle class over the past 25 years but has left many segments of society behind, fueling populism (e.g., Brexit). He advocates for a new globalization model that broadens economic benefits to include those previously excluded.
U.S. Policy and Tariffs: The U.S. is disrupting traditional globalization and alliances through aggressive tariff policies. Fink predicts these tariffs, if implemented, will significantly increase inflation over the next five months, potentially exacerbating economic challenges.
Economic Weakening and Uncertainty: Recent economic data shows a weakening U.S. economy, driven by uncertainty surrounding trade policies. Drawing on behavioral science, Fink notes that uncertainty biases decision-making toward pessimism, leading to conservative economic choices by businesses and consumers.
Bond Market and Inflation: Despite a recent decline in the 10-year Treasury yield to 4.37%, Fink warns that markets may be underestimating the inflationary impact of tariffs. He expects these pressures to manifest more clearly in the near term.
Global Conversations: Fink highlights a contrast in discussions with leaders in Europe versus the U.S., with tariffs being a universal concern. He emphasizes the unpredictability of short-term outcomes (next seven days) but expresses confidence in long-term trends over the next seven years.
Overall, Fink sees the U.S. economy facing heightened inflation and uncertainty due to tariffs, necessitating a more inclusive globalization framework to address inequities and stabilize economic outcomes.
Bank of America CEO Brian Moynihan says consumers are "more cautious" amid Trump policies (YouTube link)
Bank of America CEO Brian Moynihan, in the interview above, discussed the economic outlook and various factors impacting it:
Economic Forecast: Bank of America's economists predict no rate hikes or recession in 2025, expecting slower economic growth (1.5% this year, slightly higher in subsequent years). Inflation is expected to persist until 2026-2027, with the Federal Reserve likely holding rates steady until mid-2026 before cutting to a "normal" 3-3.5% range.
Federal Reserve and Interest Rates: Despite market expectations of rate cuts in September, Moynihan’s team believes the Fed will remain cautious until inflation is under control, targeting a 2% rate.
Tariff Impact: Moynihan noted tariffs could add 30-40 basis points to inflation, though their full impact is uncertain due to the unique economic context. Businesses are cautious, awaiting clarity on trade, immigration, taxation, and deregulation policies from the new Trump administration.
Business Caution: Companies are delaying hiring and investments due to uncertainty around policy changes, contributing to the weakest job growth in three months since the pandemic.
AI and Job Market: Moynihan highlighted AI's transformative impact, noting Bank of America reduced its workforce from 285,000 in 2010 to 212,000 today due to technology. AI is reshaping jobs but not yet significantly impacting hiring, as companies are still learning to adopt it. Historically, technological advancements have increased employment over time.
Jobs Data and Government Statistics: Moynihan expressed concern over the firing of the head statistician responsible for jobs data, suggesting outdated survey methods (with declining response rates) undermine data credibility. He advocated for modernizing data collection using existing government-reported data.
Allegations of Bias: Responding to claims that Bank of America restricts conservative businesses, Moynihan denied systemic bias, emphasizing decisions are risk-based. The bank works with industries like guns, oil, and tobacco, but individual credit decisions may vary. Regulatory clarity would help avoid perceptions of unfair treatment.
Overall, Moynihan emphasized cautious optimism for economic growth, the need for policy clarity, and the transformative potential of AI, while addressing concerns about data reliability and regulatory challenges.
Second Quarter GDP Print: The headline GDP growth for Q2 was 3%, surpassing expectations. However, this follows a negative 0.5% growth in Q1, largely influenced by trade war dynamics (e.g., companies front-loading imports to avoid tariffs). Averaging the first half of 2025, GDP growth is around 1.25%, significantly slower than the 2.5% seen in recent years, indicating a cooling economy.
Core GDP Measure: The "final sales to domestic purchasers" metric, which excludes volatile components like imports, exports, and inventories, showed growth slightly above 1%, also slower than the previous year. Despite the positive market reaction to the headline GDP, the data suggests economic slowdown.
Non-Farm Payrolls (NFP): The most significant development was the disappointing NFP report on Friday, expecting 100,000 jobs but delivering only 70,000. More critically, massive downward revisions to prior months' job numbers erased much of the previously reported job growth, indicating a much weaker labor market than anticipated. This aligns with the slowing GDP growth, reinforcing a narrative of economic deceleration.
Unemployment and Labor Force Participation: The unemployment rate remains low at 4.2%, but this is partly due to declining labor force participation. Analyst Parker Ross estimates that if participation had held steady since April, the unemployment rate would be 4.9%, a level warranting caution. This drop in participation suggests discouraged workers are leaving the labor market.
Market Reaction: The weak NFP data triggered a stock market sell-off, a rally in bond markets (particularly in the 10-year yield and front-end rates), and a significant dollar sell-off. Markets are now pricing in a higher likelihood of Federal Reserve rate cuts in September, with some speculating a 50-basis-point cut if the next labor report is similarly weak.
2. Corporate Earnings: MAG7 Performance
Microsoft and Meta: Both companies beat expectations, with Meta gaining 10% post-earnings and Microsoft becoming the second company to reach a $4 trillion market cap. However, the market sold off later in the day despite these strong results, signaling potential caution or profit-taking.
Apple and Amazon: Apple’s earnings received a lukewarm market response, while Amazon’s results disappointed, leading to a notable decline in its stock price.
Market Dynamics: The initial market highs following Microsoft and Meta’s earnings were not sustained, suggesting underlying concerns or a shift in investor sentiment, possibly a red flag for broader market trends.
3. Federal Reserve Policy and Dissent
Fed’s Current Stance: Fed Chair Powell has maintained that the labor market is solid and inflation remains above target (partly due to tariff effects), justifying the decision to keep rates unchanged. Powell described monetary policy as "modestly restrictive."
Dissenting Governors: Governors Bowman and Waller dissented at the recent Fed meeting, arguing for rate cuts due to a weakening labor market. Waller described the labor market as "on thin ice," emphasizing the lag in monetary policy effects and the need for preemptive action.
Shift in Narrative: The weak NFP data strengthens the case for the dovish faction, increasing the likelihood of a September rate cut. Commentary from New York Fed President John Williams and Cleveland Fed President suggested the labor market is still strong but acknowledged potential for cuts in September. Another weak labor report could solidify expectations for more aggressive easing.
Governor Krueger’s Resignation: The sudden resignation of Fed Governor Krueger, who missed the recent FOMC meeting, was unexpected. Her term was set to expire early next year, but her early exit accelerates President Trump’s ability to nominate a new Fed governor. Speculation suggests Trump may appoint a loyalist to influence monetary policy, potentially acting as a "shadow Fed chair" to push for dovish policies. This could lead to a more dovish FOMC sooner than anticipated, though the appointee’s influence depends on their credibility.
4. Political Developments
BLS Commissioner Firing: President Trump directed his team to fire the Bureau of Labor Statistics (BLS) Commissioner, a Biden appointee, citing politicization of labor market data. This move raises concerns about data integrity but aligns with a broader shift in government operations under Trump, where political appointees may face quicker replacements. The speaker notes uncertainty about the commissioner’s performance, referencing the Biden administration’s history of misleading narratives (e.g., on Biden’s health).
Geopolitical Risks and Russia: A significant US-EU trade deal was reached, imposing 15% tariffs on EU imports with no retaliation allowed, alongside requirements for the EU to buy more US goods and natural gas. The deal appears one-sided, likely influenced by the EU’s reliance on US military support amid its conflict with Russia. Trump has escalated rhetoric against Russia, shortening a deadline for Russia to end its war with Ukraine from 50 to 10 days. Failure to comply could lead to secondary sanctions on countries like India and China for buying Russian oil. These sanctions could disrupt global oil markets, trade, and geopolitics, with markets currently underestimating this risk despite a slight oil price response.
5. Other Notes
Treasury Refunding Announcement: The announcement was not a major focus but hints at potential changes in issuance structure, which Joseph plans to explore further in writing.
Market Implications: The combination of a slowing economy, weak labor market, and geopolitical risks (e.g., Russia sanctions) could increase recession risks and market volatility. The bond market’s rally and dollar sell-off reflect growing expectations of Fed easing, while geopolitical developments could further impact oil and trade markets.
The table includes specific countries mentioned with their respective tariff rates, based on the available information. Note that some countries are grouped (e.g., "most countries" or "roughly 100 smaller countries"), and not all 150+ countries mentioned are individually listed in the sources. Where specific rates are provided, they are included; otherwise, the baseline or general rates are noted.
Jim Rogers on Pending Crash and How to Prepare (YouTube link)
Veteran investor Jim Rogers, based in Singapore, shared that his daughter recently graduated from an Ivy League school and is now working at the UN in New York, with interests leaning toward international relations rather than finance. Reflecting on his career, he recalled hiring Scott Bessent in 1982, noting his enthusiasm and eagerness to learn despite no finance background, which fueled his success. Jim expressed alarm over overextended financial markets, unsustainable debt, and geopolitical risks, urging thorough research, passion, and resilience in finance. Bullish on gold and silver as hedges, he advises young professionals to hustle and prove their value.
Key Takeaways
A recap of Jim's interview featured in the video above:
Career Advice for Young People: Jim advises young job seekers, particularly in finance, to intern for little or no pay to prove their worth, emphasizing hustle, passion, and hard work.
Importance of Research: Jim stresses the enduring value of deep, independent research in finance, regardless of AI advancements. Passion, curiosity, and grit are critical for success, and he warns against neglecting thorough analysis, citing a colleague’s downfall for dismissing detailed work.
Market Concerns: Jim expresses significant concern about the U.S. financial markets, having sold his U.S. stocks due to overvaluation and global market exuberance. He notes the S&P 500’s volatility (peaking at 6,100, dropping to 4,800, then recovering) and questions the sustainability of current highs, driven by central bank interventions.
Global Economy and Markets: Despite global economic weaknesses (e.g., declining airline spending, profit warnings), markets like China (+22%) and Germany (+20%) are performing strongly. Jim sees this as a potential warning sign, as widespread optimism often precedes corrections. He remains invested in Uzbekistan and is cautious about markets that have risen since 2009.
Debt and Interest Rates: Jim highlights the U.S.’s $37 trillion debt and $1 trillion annual interest payments, warning that rising rates (adding $300 billion per 1% increase) could exacerbate issues. He believes central banks’ continuous money printing masks underlying problems, predicting a severe bear market (potentially down 70%) due to unsustainable debt levels.
Gold and Silver: Jim is bullish on gold and silver, owning both and recently buying more silver, which he considers undervalued. He views them as hedges against monetary mismanagement, expecting silver to eventually surpass its $50 high from 1980, driven by central bank policies and a weakening U.S. dollar (down 10% in 2025).
Geopolitical and Defense Spending: Jim notes global increases in defense spending (up 10% to $2.7 trillion in 2024), boosting defense stocks but raising concerns about geopolitical tensions (e.g., Russia-Ukraine, Middle East, China-Taiwan). He sees this as a reason to hold gold and silver.
U.S. Dollar and Bond Market: Jim predicts further dollar weakness due to unrestrained money printing. He agrees with Jamie Dimon’s concerns about cracks in the U.S. bond market, driven by rising yields and debt, which could lead to significant market disruptions.
Personal Insights and Longevity: Jim shares lessons from his career, emphasizing resilience after setbacks and humility taught by market losses. Outside work, he values time with his daughters, born when he was 60, and credits exercise and moderation for his longevity. He humorously attributes his success to following Blue Street Capital.
Global Perspectives: Jim praises India’s shift toward prosperity-friendly policies and notes China’s economic slowdown (e.g., 9.1% drop in industrial profits). He remains cautious about markets globally, urging investors to question widespread optimism.
Conclusion
Jim Rogers is deeply concerned about overextended financial markets, unsustainable debt, and geopolitical risks, advocating for thorough research, passion, and resilience in finance. He remains bullish on gold and silver as hedges and advises young professionals to hustle and prove their value.
An Update on the Big Forces Shaping Markets Today with Greg Jensen (YouTube link)
As global markets continue to shift, the Co-CIO Greg Jensen of Bridgewater Associates shared his perspective on the evolving landscape of modern mercantilism. He explored how trade policies, rising geopolitical tensions, and fluid capital movements are reshaping economies—especially that of the U.S.
Despite mounting challenges like tariffs and volatility, Jensen noted the surprising durability of financial markets. But he cautioned that resilience doesn’t mean low risk. The current climate demands strategic adjustments—chiefly, diversifying portfolios and seeking undervalued assets beyond U.S. borders. Investors should brace for inflation, currency swings, and geopolitical shocks, while staying agile in seizing hidden opportunities.
Key Points
Below is a summary of Jake Davidson's interview with Greg Jensen on YouTube.
Modern Mercantilism: The Trump administration's push for higher tariffs, particularly post-July 9, 2025, reflects a broader mercantilist policy aimed at strengthening the US economy and working class. This is a response to global economic shifts, notably China's growth, but introduces uncertainty and potential retaliation from other nations.
Geopolitical Risks: Heightened conflicts (e.g., Russia-Ukraine, Israel-Iran) and global economic dependencies increase the risk of tail events, necessitating resilient investment strategies.
Market Resilience: Despite tariffs and geopolitical uncertainty, markets have not reacted as negatively as expected, offering investors a chance to diversify and hedge risks. However, risk premiums in equities remain low, while bonds are starting to reflect higher risk premiums.
Economic Slowdown and Fed Policy: A global economic slowdown is anticipated, but not a full recession. The Federal Reserve is likely constrained by inflation uncertainties from tariffs and fiscal stimulus, potentially delaying rate cuts. Other global policymakers may ease monetary policy faster due to disinflationary pressures outside the US.
Fiscal and Debt Concerns: Large US deficits and global debt issuance strain bond markets, but technical adjustments (e.g., issuing shorter-term debt) may mitigate supply-demand imbalances. Long-term fiscal sustainability depends on avoiding inflation or currency crises, with productivity growth (e.g., via AI) potentially offsetting debt burdens.
Investment Strategy:Investors are overly concentrated in US equities due to past outperformance. Diversifying across asset classes and regions, whilehedging against inflation and dollar depreciation, is critical in this volatile environment. European and Asian markets, despite risks, offer opportunities for rebalancing.
Section 899 and Capital Flows: Provisions like Section 899 (retaliatory taxes on foreign entities) signal increasing mercantilism, raising concerns about stable rulemaking and foreign investment in US assets. This could lead to reduced capital inflows and higher risk premiums over time.
AI and Productivity: The rapid development of AI is seen as a potential driver of productivity, which could support economic growth and mitigate fiscal pressures, though its full impact is still emerging.
In summary, the environment is risky but presents opportunities for portfolio adjustments toward diversification and resilience, as markets may not fully reflect the growing uncertainties. Investors should prepare for potential inflation, currency depreciation, and geopolitical shocks while leveraging opportunities in undervalued non-US assets.
This Is a Debt Spiral by Design and Tariffs Will Accelerate the Breakdown | Lyn Alden (YouTube link)
In the video interview above, Lyn Alden delved into the broader economic landscape, moving beyond immediate headlines to discuss a profound, slow-motion regime shift characterized by fiscal dominance. Lyn detailed how factors like fiat currency dilution and persistent structural deficits are reshaping the financial world. Lyn also pointed to the rise of digital asset infrastructure and its impact on liquidity-driven markets, particularly for investors focused on long-term wealth creation and preserving future optionality. To successfully navigate this evolving environment, Lyn recommends prioritizing scarce assets such as Bitcoin and gold. Lyn also stresses the importance of monitoring tariffs and understanding the dual role of stablecoins in extending the dollar's global reach while simultaneously posing surveillance concerns. Ultimately, Lyn asserts that Bitcoin remains an indispensable tool for financial freedom in a system becoming ever more controlled.
Gold and Bitcoin Performance: Gold is above $3,300/oz, and Bitcoin recently surpassed $120,000. The U.S. is running a 7% GDP deficit, a level unseen since WWII, signaling fiscal dominance where deficits and debt servicing drive the macro economy over central bank policies.
Structural Shifts: Lyn Alden highlights demographics and rising interest rates as key drivers. Social Security is now a net drain, and interest expenses are no longer offset by falling rates, making deficits more impactful. Public debt issuance now outpaces private sector credit creation, marking a shift to fiscal over monetary dominance.
Inflation and Tariffs:
Inflation Dynamics: Recent CPI remains above 3%, with core inflation sticky, while PPI is flat. Tariffs (e.g., on copper, appliances) create sector-specific inflation, but front-running by importers and no significant money supply increase limit broader inflationary pressure for now.
Tariff Impact: Tariffs generate $200–800 billion in revenue, significant but small compared to $2 trillion deficits. Markets expect negotiations or delays, but sustained tariffs could cause volatility if no market dislocation occurs.
Federal Reserve and Interest Rates:
Fed’s Diminished Tools: High public debt (over 100% of GDP) reduces the Fed’s ability to control inflation via rate hikes, as they increase deficits faster than they slow bank lending. Unlike the 1970s, current bank lending isn’t excessive, limiting Fed effectiveness.
Fed Independence: Speculation about Trump replacing Fed Chair Powell exists, with betting markets at 35% odds. Such a move could erode confidence in central bank independence, resembling emerging market dynamics, though legal hurdles make it unlikely.
Investment Strategies:
Asset Allocation: Lyn advises against long-term treasuries due to volatility and low returns. T-bills or cash equivalents are better for short-term stability. Scarce assets like high-quality equities, gold, Bitcoin, and select real estate are preferred for long-term wealth preservation.
Bitcoin vs. Gold:Bitcoin isn’t a direct CPI hedge but protects against long-term monetary debasement. It complements gold, with different buyers (central banks for gold, corporates/retail for Bitcoin). Bitcoin competes more with volatile precious metals like silver or platinum.
Stablecoins and Dollar Dominance:
Stablecoin Role: Tether’s $84 billion in Treasury holdings makes it a major debt buyer. Stablecoins act as “offshore bank accounts” for the middle class, digitizing the Eurodollar market and reducing currency frictions in emerging markets.
Impact on Dollar:Stablecoins mildly extend the dollar’s dominance by increasing global demand, but their $4 trillion market is too small to be a game-changer. They enhance surveillance, as they’re more traceable than physical dollars.
Legislation and Regulatory Risks:
Genius Act: This crypto bill, stalled despite bipartisan support, limits stablecoin yield, hindering competition with banks. Critics like Marjorie Taylor Greene warn it could enable CBDC-like frameworks via surveillance and control over issuers.
Capital Freedom:Stablecoins, being traceable and freezable, align with state control, unlike Bitcoin, which offers a decentralized alternative resistant to arbitrary freezes, supporting financial privacy.
Bitcoin’s Role:
Privacy and Freedom: Bitcoin’s anonymity improves with circulation and tools like Lightning Network or ecash, making it harder to trace. It empowers individuals by requiring active seizure efforts, unlike easily frozen bank accounts.
Custodial Risks:Bitcoin ETFs (dominated by BlackRock, Fidelity) face price volatility risks in downturns due to custodial concentration, but the network’s proof-of-work design ensures large holders can’t censor transactions.
Corporate Crypto Adoption:
Treasury Strategies: Companies like Bitmine ($500M in Ethereum) signal broader crypto adoption, but Lyn prefers Bitcoin for its decentralization and security over Ethereum, which faces scalability and monetary policy uncertainties.
Bitcoin Outlook:
Allocation Advice: Lyn suggests a 5% Bitcoin allocation for precious metals investors as a low-risk hedge against debasement, complementing gold’s stability with Bitcoin’s portability and network effects.
Price Outlook: No near-term price target, but Bitcoin could reach seven figures long-term, potentially capturing 1–2% of global assets (gold is ~2% at $20 trillion). The cycle isn’t over, with $150,000–$200,000 possible.
Key Macro Truth:
Structural Deficits: The U.S.’s intractable fiscal deficits, driven by political gridlock and rising interest expenses, are the dominant macro force. Tariffs, potentially the largest tax increase in modern history, are a key lever to watch, as they could either exacerbate deficits or trigger market volatility if not tempered.
Trump’s New Currency Plan Just Set Off A Treasury Time Bomb (YouTube link)
In the video above, the discussion revolves around the U.S. dollar’s role as the global reserve currency, its cyclical strength, and potential policy shifts under a Trump administration, as outlined in the GOP platform.
Key Points
Here’re the key points:
U.S. Dollar as Global Reserve Currency:
The GOP platform emphasizes maintaining the U.S. dollar as the world’s reserve currency, a position explicitly supported by Trump and his proposed Treasury team.
Despite this, there’s an acknowledgment of trade imbalances, which are linked to the dollar’s reserve status. Addressing trade deficits while preserving the dollar’s dominance presents a complex challenge, as these are interconnected issues.
Key Figures and Policy Insights:
Stephen Miran is highlighted as a key economic adviser who understands the nuances of dollar policy. His work suggests that some proposed policies might initially strengthen the dollar but could lead to deliberate weakening later.
The distinction is made between the dollar’s cyclical strength (short-term fluctuations driven by economic conditions) and its structural role as the global reserve currency.
Dollar Policy and Trade-offs:
Trump has previously criticized other currencies for being "unfairly cheap," suggesting a focus on exchange rate differentials in trade negotiations. This could involve intentional dollar devaluation to address trade imbalances.
Policies like tariffs and trade concessions might precede a deliberate dollar weakening to boost U.S. exports, but this risks inflation due to higher import and energy prices.
There’s discussion of disincentivizing foreign holdings of U.S. assets (e.g., Treasuries), which artificially inflate U.S. asset values and the dollar’s exchange rate. Reducing foreign demand could weaken the dollar but disrupt markets.
Economic and Political Challenges:
Reversing long-standing economic trends (e.g., trade deficits and dollar strength) would create winners and losers. Sectors benefiting from a strong dollar (e.g., finance, importers) might resist, while exporters and manufacturers could gain.
The complexity of reversing these trends lies in the trade-offs: weakening the dollar could ease global debt burdens (especially for emerging markets with dollar-denominated debt) but risks domestic inflation and market turbulence.
Politicians, including Trump’s team, may downplay these downsides, promising benefits (e.g., trade balance) while minimizing costs (e.g., inflation, deficits), a common political strategy.
Global Economic Context:
The U.S. has benefited from a unipolar world since the Soviet Union’s collapse, fostering international cooperation but allowing trade imbalances to grow (e.g., U.S. trade deficits, Eurozone issues).
The world is shifting toward a multipolar system, with countries or blocs acting more independently. Trump’s team aims to mitigate policy downsides by pushing costs onto other nations, though some domestic fallout is likely.
Dollar Cycles and Historical Precedents:
The dollar has experienced three major cycles since the Bretton Woods system ended in 1971: strong in the 1980s (leading to the Plaza Accord), strong in the late 1990s, and strong since around 2014.
The current strong dollar cycle (since 2014) has been prolonged by global factors, including:
Weak growth in other regions (e.g., Canada’s energy policy limitations, Europe’s loss of Russian gas, China’s property bubble and tech crackdowns).
Investors see the U.S. as the "only game in town" due to these "own goals" by other economies.
The Plaza Accord (1985) is cited as a precedent for intentional dollar weakening to address trade imbalances, driven by Japan and Taiwan’s competitive exports. A similar move (e.g., a “Mar-a-Lago Accord”) could be considered to reset the current cycle.
Market Dynamics and Risks:
A strong dollar reduces foreign demand for U.S. debt, as seen in the past decade, with foreign central banks holding fewer Treasuries. Private-sector buying hasn’t fully offset this.
In 2020, a dollar spike during the COVID crash caused a Treasury market breakdown, requiring Federal Reserve intervention (QE and swap lines). This illustrates the risks of a strong dollar environment.
Globally, $13 trillion in dollar-denominated debt outside the U.S. creates demand for dollars, but a strong dollar strains borrowers, slows global growth, and can lead to asset sales (e.g., Treasuries), causing U.S. market volatility (e.g., 2020, 2022).
Potential Outcomes:
A deliberate dollar weakening could ease debt burdens for emerging markets, boost their economies, and indirectly support U.S. asset prices and growth.
However, this risks “sticky” inflation due to higher import and energy costs, a trade-off that may not be fully acknowledged by policymakers.
Post-election dollar surges (e.g., after Trump’s election) reflect expectations of lo ‘looser fiscal policy and higher inflation, potentially requiring a hawkish Fed response, which could temporarily strengthen the dollar further.
Speculative Future Moves:
Trump’s focus on currency differentials suggests negotiations may include currency components alongside tariffs.
A major cycle-ending move, like the Plaza Accord, could initiate a new 10-15-year dollar cycle, potentially stabilizing trade but requiring careful management to avoid excessive inflation or market disruption.
Conclusion
In summary, the discussion highlights the tension between maintaining the dollar’s reserve status and addressing trade imbalances. Trump’s team, led by figures like Stephen Miran, may pursue policies that initially strengthen the dollar but later involve deliberate weakening to boost exports, with risks of inflation and market pushback. Historical precedents like the Plaza Accord suggest such moves are feasible but complex, with global and domestic economic implications. The shift to a multipolar world complicates these dynamics, and policymakers may minimize the costs of these trade-offs to sell their agenda.
Tudor Jones on Next Fed Chair, Trump Budget, Markets, AI (YouTube link)
Paul Tudor Jones, a prominent hedge fund manager, shared his views on various economic and investment topics during a discussion. Here's a summary of the key points:
Key Points
Robin Hood Foundation Competition: Jones discussed a successful fundraising event for the Robin Hood Foundation, raising $400,000, with Bill Ackman, Mark Gilbert, and Stan Druckenmiller as top performers. The competition involves a six-month long and short investment bet, and Jones hopes to expand it with more female participants.
Yield Curve and Fed Chair: Jones is bullish on the yield curve steepening, expecting lower front-end rates due to a new, dovish Federal Reserve chair under President Trump by mid-2026. He believes a dovish Fed is necessary to manage the U.S.'s fiscal constraints and high debt-to-GDP ratio (100%) by running negative real rates to lower interest costs.
U.S. Deficit and Budget: Jones expressed concerns about persistent 6%+ budget deficits, calling Trump's budget plan the "big beautiful bill." To balance the budget, he suggested drastic measures like a 6% across-the-board spending cut and significant tax hikes (e.g., 49% top income rate, 1% wealth tax, 40% capital gains rate). He believes bond markets may eventually force fiscal discipline, though the timing is uncertain.
Investment Strategy: Jones predicts a weaker U.S. dollar (down 10% in a year) and a steeper yield curve. For a portfolio in a debt-trap scenario, he recommends a mix of stocks, gold, and Bitcoin (1-2% allocation) to hedge inflation. He sees equities as vulnerable if bond markets react negatively to fiscal profligacy.
AI and Investment: Jones is enthusiastic about AI's potential to democratize quantitative modeling in finance, reducing barriers to entry for smaller firms. However, he avoids specific stock picks, focusing on AI's broader disruptive impact. He tested new AI models at his firm, noting their rapid improvement.
AI Risks and Regulation: Jones warned of AI's societal risks, citing Elon Musk's 20% chance of AI wiping out humanity and potential white-collar job displacement (10-20% unemployment in 1-5 years). He criticized the lack of regulatory guardrails in Trump's "big beautiful bill" and called for thoughtful discussions on AI governance to balance productivity gains with social stability.
Social and Economic Inequality: Jones highlighted the uneven distribution of productivity gains since the 1980s (85% to the top 10%), fueling divisiveness and distrust. He supports ideas like "Invest America" to give children investment accounts to foster capitalism's benefits and suggested taxing AI or robotics to redistribute wealth more equitably.
Conclusion
Jones advocates for fiscal caution, strategic investing around a dovish Fed, and proactive AI regulation to mitigate risks while harnessing its benefits.
In the video above, the speaker, Jeffrey Gundlach, focuses on the unsustainable fiscal path of the United States, highlighting concerns about rising national debt, increasing interest expenses, and shifting market dynamics that suggest a potential reckoning in financial markets. Below is a detailed summary of the key points raised:
Key Points
1. U.S. Fiscal Unsustainability and Rising Debt
National Debt: The U.S. is approaching a $37 trillion national debt, currently at approximately $36.95 trillion, with rapid growth. This trajectory is seen as unsustainable due to persistent budget deficits.
Interest Expense: The average coupon on U.S. Treasuries has risen significantly, from below 2% to around 4%. As older, low-yield bonds (e.g., 0.25% coupons issued in 2009 or 2019) mature, they are being replaced with higher-yield bonds (e.g., 4.25%), increasing the government's interest burden by 400 basis points on maturing debt. This rising cost is viewed as untenable given the size of the deficit.
Market Awareness: There is growing recognition in the markets that the U.S. fiscal situation is precarious, which is reflected in the behavior of long-term Treasury bonds and other financial indicators.
2. Unusual Market Behavior
Dollar Index Movement: Historically, during S&P 500 corrections (drops of more than 10%), the trade-weighted U.S. dollar index typically rises as investors seek safety. However, in the most recent 20% S&P 500 decline, the dollar weakened, which is an anomaly compared to the past 15 years. This suggests a shift in investor confidence in the dollar.
Treasury Yields and Yield Curve: Normally, when the Federal Reserve cuts interest rates, yields across the Treasury yield curve decline. However, since the Fed began cutting rates in September 2023, the 10-year Treasury yield has risen, and the yield curve is steepening. This indicates that long-term Treasuries are not behaving as traditional "flight to quality" assets.
Long-Term Treasuries: The long-term Treasury bond is losing its status as a safe-haven asset. It is not responding to lower interest rates or an inflation rate of around 2.5%, which may rise further. This shift is attributed to concerns about the U.S. fiscal situation and the increasing interest expense.
3. Inflation Outlook
Recent Data: The cumulative headline CPI (Consumer Price Index) for the latest month was 0.18%, but the rolling-off figure from a year ago was 0.1%. Over the next two months, the cumulative rise is expected to be 0.1%, suggesting that inflation may be at a near-term low but could increase.
Implications: Rising inflation could exacerbate the challenges of managing the national debt and interest expenses, further pressuring Treasury yields.
4. Capital Flows and Dollar Weakness
Net Investment Position: Over the past 15–17 years, the U.S. has seen significant foreign investment, with a net investment position growing from $3 trillion to over $25 trillion. However, the dollar is now weakening, raising concerns that some of this capital could exit the U.S.
Investment Strategy: The speaker suggests that dollar-based investors should consider increasing allocations to non-dollar assets, such as foreign currencies or emerging market equities, to hedge against potential capital outflows and dollar depreciation.
5. Long-Term Treasury Bonds and Quantitative Easing (QE)
Potential Pivot: If Treasury yields, particularly on the 30-year bond, rise to an "uncomfortably high" level (e.g., 6%), the U.S. government may face a $5 trillion budget deficit due to increased borrowing costs. This could force a policy pivot, with quantitative easing (QE) being a likely response, where the Federal Reserve would buy long-term Treasuries to suppress yields.
Market Opportunity:If QE is announced, long-term Treasuries could rally significantly (e.g., a 20-point price increase, equivalent to a 100 basis point drop in yield). Investors would need to act quickly to capitalize on this, ideally before the announcement, though such timing is difficult without insider information.
Paradigm Shift: The speaker emphasizes a "tremendous paradigm shift" where long-term Treasuries are no longer a reliable safe-haven asset, and money is not flowing into the U.S. as it once did.
6. Gold as a Safe-Haven Asset
Rising Demand: Gold has emerged as a new flight-to-quality asset, with retail demand surging (e.g., Costco struggling to keep gold in stock). Central banks have been accumulating gold after selling it at lower prices ($300–$400/oz) and buying it back at higher prices (around $3,000/oz).
Price Performance: Gold has risen from $1,800/oz to over $2,000/oz, with a 40%+ year-to-date gain, outperforming or matching assets like Bitcoin. The speaker views gold as a legitimate asset class, no longer just for "lunatic survivalists."
Investment Recommendation: For investors considering volatile assets like Bitcoin, the speaker suggests leveraging gold (e.g., 2x leverage) as a less risky alternative with similar upside potential.
7. Corporate Debt and Credit Markets
Reduced Exposure: The speaker’s firm (DoubleLine) has significantly reduced its allocation to below-investment-grade debt and leverage in its closed-end funds, with leverage at historic lows (e.g., 45% in one fund, 7% in another). This cautious approach is driven by a desire to act as a liquidity provider during market dislocations.
Market Valuations: The S&P 500 is described as "incredibly uninteresting" due to high valuations, with forward P/E ratios exceeding all-time highs from early 2025. Earnings estimates have been cut, yet the market remains overvalued, reminiscent of 1999 (dot-com bubble) and 2006–2007 (pre-financial crisis).
Credit Market Risks: The corporate debt market is showing signs of frothiness, with private credit heavily invested and potentially overvalued. The speaker draws parallels to the collateralized debt obligation (CDO) market in 2006–2007, where excessive enthusiasm preceded a crash.
8. Private Credit Concerns
Overinvestment: Private credit has become a popular investment, with institutions like Harvard’s $53 billion endowmentfacing liquidity issues, forcing them to issue bonds and consider selling private equity stakes at a discount. This suggests systemic overexposure to illiquid assets.
Weak Arguments: The speaker critiques the arguments for private credit:
Volatility: Claims that private credit is less volatile than public markets are misleading, as it can still experience significant mark-downs.
Historical Performance: Past outperformance is not a reliable indicator of future results, especially as public credit has recently outperformed private credit.
Liquidity Risks: Private credit lacks liquidity, which could lead to forced selling during a market downturn, as seen with endowments like Harvard and Stanford in 2008.
Potential for Forced Selling: If institutions need liquidity, they may be forced to sell private credit or equity holdings at steep discounts, creating opportunities for buyers but risks for overexposed investors.
9. Historical Context and Market Cycles
Long-Term Cycles: The speaker references the "Fourth Turning" concept by Neil Howe, which describes generational cycles where societies undergo major restructuring every 80–100 years. The U.S. is in such a phase, with issues like wealth inequality, calcified property relations, and disruptive technological change (e.g., AI) driving systemic challenges.
Wealth Inequality: The concentration of wealth and power has created a "feudal" system of lords and serfs, necessitating a restructuring of institutions, political systems, and finances.
Market Analogies: The current market environment is compared to the dot-com bubble (1999) and the pre-financial crisis period (2006–2007), with overhyped sectors like AI drawing parallels to electricity stocks in the early 20th century. While transformative, these sectors often see excessive enthusiasm that leads to corrections.
10. Investment Opportunities and Strategies
Emerging Markets: The speaker recommends selective emerging market equities, particularly in countries like India, which has demographic and economic similarities to China 35 years ago. India benefits from supply chain shifts and technological advancements, making it a long-term investment opportunity.
Foreign Currencies: Dollar-based investors should consider foreign currencies to diversify away from a potentially weakening dollar. The S&P 500 is underperforming compared to MSCI Europe, and emerging markets may offer currency translation benefits.
Waiting for Opportunities: The speaker advocates a defensive stance, holding cash and gold while waiting for a market correction. A significant credit market break (e.g., bonds dropping 30 points) could create buying opportunities, particularly in high-yield bonds, which could recover quickly.
Timing: The years 2027–2028 are highlighted as a potential "window of tremendous opportunity" due to an expected worsening of the Treasury problem and broader market dislocations.
11. Global vs. U.S. Problem
Global Issue: The fiscal and market challenges are not unique to the U.S. but are global in nature. Investors cannot fully escape by diversifying into Europe or Japan, as these regions face similar issues.
Long-Term Themes: Investing in assets with strong long-term growth potential, such as India or gold, is recommended as a way to navigate the global challenges.
12. Behavioral and Psychological Factors
Need as a Driver: The speaker emphasizes that "need" (e.g., institutions needing liquidity) is a stronger driver of investment behavior than fear or greed. Examples include endowments unable to meet capital calls in 2008 and universities seeking high returns in low-rate environments (e.g., 1993–1994).
Market Timing: Markets take longer to break than expected, but when they do, they decline rapidly ("stairs up, elevator down"). Investors must be patient but ready to act when opportunities arise.
Conclusion
The speaker, Jeffrey Gundlach, paints a picture of a U.S. economyon an unsustainable fiscal path, with rising debt, increasing interest expenses, and shifting market dynamics signaling a potential crisis. Long-term Treasuries are losing their safe-haven status, the dollar is weakening, and gold is emerging as a preferred asset. Investors are advised to reduce exposure to overvalued assets like the S&P 500 and private credit, diversify into non-dollar investments, and prepare for opportunities in 2027–2028 when market dislocations could create significant buying opportunities. The broader context involves a global need for restructuring due to wealth inequality and technological disruption, with long-term investments in emerging markets like India and assets like goldrecommended as hedges against these challenges.
Top 21 countries ranked by PPP GDP per capita (source: StatisticsTimes.com)
GDP per Capita
Below is a summary of the ZeroHedge article "These Are The 50 Richest Countries By GDP Per Capita," published on June 13, 2025, which ranks the top 50 countries by nominal GDP per capita in 2025 based on IMF projections. All figures are in current USD, unadjusted for cost of living.
Overview:
The article lists the 50 richest countries by nominal GDP per capita for 2025, using IMF data, highlighting economic drivers like finance, oil, and tax havens.
Top-Ranked Countries:
Luxembourg ($140,941): Leads due to its financial sector, tax haven status, and small population (~660,000).
Ireland ($108,919): High ranking due to multinational tax strategies, though GNI is preferred locally to adjust for distortions.
Switzerland ($104,896): Strong finance and innovation sectors.
Singapore ($92,932): Financial and trade hub with favorable taxes.
Iceland ($90,284): High living standards, small population.
Norway ($89,694): Oil wealth and sovereign fund.
United States ($89,105): Richest large-population country (>10 million), driven by diversified economy.
Energy-Rich Countries:
Qatar (#10, $71,653): Oil and gas wealth, small population.
United Arab Emirates (#23, $49,498): Oil-driven economy.
Saudi Arabia (#43, $30,099): Benefits from oil exports.
Norway (#6, $89,694): Oil wealth reinvested into $1.4T sovereign fund, stable economy.
Guyana (#41, $32,326): Rapid rise due to recent offshore oil discoveries.
Key Trends:
Tax Havens Dominate: Luxembourg, Ireland, and Singapore rank high due to low taxes attracting multinationals (e.g., Ireland’s 12.5% corporate tax rate).
Small Populations: Top countries often have small populations, amplifying per capita metrics.
Resource Wealth: Oil and gas boost rankings for Qatar, UAE, Norway, and Guyana.
Large Economies Lower: Germany (#19), Japan (#38), UK (#20), and France (#24) rank lower due to larger populations diluting per capita GDP.
GDP per Capita Calculated at Purchasing Power Parity (PPP)
PPP GDP per capita measures the economic well-being of countries and offers more meaningful cross-country comparisons. This is especially true when comparing developing and developed countries, where the value of the same amount of goods can vary significantly across economies.
However, 2025 PPP GDP per capita data is not yet available; according to statisticstimes.com, the latest data extends only to 2022.
Beyond Nominal GDP: Why PPP Offers a Clearer Picture of Economic Well-Being
Comparing Belgium and Taiwan’s rankings in nominal GDP per capita (2025) and PPP GDP per capita (2022) highlights the differences between these metrics and their implications for assessing economic wealth:
Belgium
Nominal GDP per Capita (2025): 16th ($57,772)
PPP GDP per Capita (2022): 21st (Int. $63,268)
Insight: Belgium ranks higher in nominal terms than in PPP, suggesting its high living costs reduce real purchasing power. Its economy, driven by trade and finance, benefits from a strong nominal GDP, but expensive domestic prices lower its PPP rank.
Taiwan
Nominal GDP per Capita (2025): 37th ($34,426)
PPP GDP per Capita (2022): 13th (Int. $69,290)
Insight: Taiwan ranks much higher in PPP than in nominal terms, indicating lower living costs amplify real purchasing power. Its tech-driven economy generates moderate nominal GDP, but affordable domestic prices significantly boost its PPP rank.
Conclusion
PPP is a more accurate indicator of actual living standards, especially for comparing countries with varying price levels, while nominal GDP better reflects global economic influence or unadjusted wealth.
Note: "Int. $" refers to International Dollars, a hypothetical currency used in Purchasing Power Parity (PPP) calculations to compare economic data across countries. It adjusts for differences in price levels and living costs, reflecting the real purchasing power of a country's income relative to a standard basket of goods and services.
Why David Rosenberg is a "Restrained Bull" on Bonds (YouTube link)
David Rosenberg, founder of Rosenberg Research, discusses current market dynamics and economic risks with Maggie Lake, emphasizing concerns about rising U.S. Treasury yields, fiscal policy uncertainty, and a potential recession.
Key Points
Rising Treasury Yields and Market Signals:
The recent surge in Treasury yields is driven by a high term premium, reflecting uncertainty over trade tariffs and fiscal policy, not inflation or economic growth expectations.
This rise in yields is an exogenous shock, not tied to Federal Reserve actions or a strengthening economy, and historically, bond market movements lead stock market corrections.
Economic Weakness and Recession Risk:
Rosenberg believes the economy is weaker than perceived, with softening GDP trends, declining labor demand (evident in JOLTS data), and a housing market downturn signaling broader economic slowdown.
The real Fed funds rate, now over 2%, is at levels seen before past recessions, supporting his view that a recession is likely by Q3 2025.
Fiscal and Tariff Concerns:
The fiscal situation, with large deficits and proposed policies like tariff hikes, is unsettling the bond market, adding a fiscal premium to yields.
Tariffs (effective rate now at 17%, up from 2.5%) are likely to raise consumer prices, reduce purchasing power, and contribute to demand destruction, potentially exacerbating economic weakness rather than driving sustained inflation.
Investment Outlook:
Rosenberg is bullish on U.S. Treasuries, expecting yields to fall in a recession as credit demand from households and businesses contracts, offsetting increased government borrowing. He predicts double-digit returns for 10- and 30-year Treasuries over the next 12 months.
He is bearish on U.S. equities, citing a high S&P 500 forward multiple (21x) and a negative equity risk premium, suggesting overvaluation. He favors non-U.S. equities (e.g., Canada, Asia, Europe) with lower valuations and stronger currencies.
Gold is recommended as a hedge against a weakening U.S. dollar, which he sees declining due to policy shifts and lack of Fed support.
Fed Policy and QE:
The Fed has little control over long-end yields, which are driven by market forces. Rosenberg expects the Fed to resume quantitative easing (QE) in a recession to lower rates, as seen in past downturns.
Current Fed policy is tight, with the real funds rate in restrictive territory, and markets are underpricing the likelihood of significant rate cuts.
Countering Narratives:
Rosenberg dismisses the idea that Treasuries are “uninvestable” due to fiscal deficits, noting that deficits typically rise in recessions, but private sector credit demand falls, supporting bond rallies.
He rejects the notion that the 60/40 portfolio is dead, arguing that Treasuries and equities have different risk profiles, making bonds a vital diversifier with guaranteed income and capital return.
Dollar and Global Context:
The U.S. dollar is weakening despite the Fed’s relatively tight policy, possibly due to deliberate policy shifts or loss of confidence in U.S. economic management.
Other regions (e.g., Europe, Japan) face their own fiscal and monetary challenges, but their lower equity valuations and rate-cutting central banks make them attractive investment destinations.
Conclusion
Rosenberg anticipates a U.S. recession by Q3 2025, driven by tight monetary policy, tariff shocks, and fiscal uncertainty. He sees Treasuries as a compelling investment due to expected yield declines and coupon protection, while advising caution on U.S. equities and favoring gold and non-U.S. markets. His outlook hinges on the economy weakening, which he believes will surprise markets and prompt Fed action.
Mike McGlone: Global Market Correction Risks (YouTube link)
In this episode of The Prospector News Podcast, recorded at the Current Trends in Mining Finance Conference in New York City, host Michael Fox interviews Mike McGlone, a senior strategist at Bloomberg Intelligence. McGlone, nicknamed "McGloom" by colleagues due to his bearish outlook, discusses concerning economic trends reminiscent of the 1930s, 1970s, and 2008, driven by historical data and ratios pointing to potential deflation and market corrections.
Key Points
Market Overvaluation: The U.S. stock market's capitalization-to-GDP ratio reached 2.2 last year, the highest in a century, comparable to 1929 and 1989 Japan, signaling overvaluation.
Buffett himself noted that a ratio above 1.0–1.2 indicates caution, and above 1.5–2.0 suggests significant overvaluation (added by author).
Commodity Ratios: The gold-to-silver ratio is at 100 ounces of silver per ounce of gold, near historic highs, and the gold-to-crude oil ratio indicates deflationary pressures, with crude oil demand weakening and gold rising.
Deflation Risks: McGlone highlights a pattern where significant inflation, fueled by massive 2020–2022 stimulus, typically leads to deflation. He cites collapsing bond yields in China and declining crude oil prices as signs of global deflationary forces.
Policy Challenges: The Federal Reserve is constrained from easing monetary policy due to persistent inflation (3.5–4% core measures), while fiscal stimulus is being cut, and tariffs could reduce corporate profits, further pressuring risk assets.
Tariffs and Trade: Unlike the multidimensional Smoot-Hawley tariffs of the 1930s, current U.S. tariffs are two-dimensional, targeting specific countries like China, Canada, and Mexico. These could disrupt global trade, particularly affecting export-heavy economies like Germany, Japan, and China, whose bond yields are significantly lower than the U.S.
Stock Market Risks: McGlone predicts a potential mean reversion in the S&P 500, with a fair value around 4,000 in a recession scenario, driven by tariffs, austerity, and reduced profits. He notes the market’s reliance on “buy the dip” behavior, which may falter as valuations remain unsustainable.
Gold as a Safe Haven: Gold is seen as a hedge against market downturns, potentially reaching $4,000 per ounce if stocks decline, as investors shift from overvalued risk assets to alternatives like gold and U.S. Treasury bonds.
Government Spending and Politics: Despite efforts to cut spending (e.g., DOGE initiatives), the U.S. budget deficit remains high, with military spending at record levels. McGlone suggests a stock market decline could lower yields, benefiting Trump’s voter base through cheaper mortgages and policies like no taxes on tips or overtime.
Historical Parallels: Comparisons to 1929, 1989 Japan, and 2008 underscore the risks of a market correction or recession, though McGlone hopes for stability but sees a “lose-lose” scenario due to high deficits, inflation, and trade disruptions.
McGlone emphasizes the need for investors to be cautious, reduce exposure to overvalued risk assets like stocks and cryptocurrencies, and consider safer assets like gold and Treasury bonds. He reflects on being early in predicting declines in crude oil and bond yields but remains confident in his deflationary outlook, citing historical patterns and current economic indicators. The podcast concludes with McGlone encouraging listeners to reach out via X (@MikeMcGlone11) or LinkedIn for further insights, stressing that the discussion is for educational purposes, not investment advice.
Global oil market at inflection point as supply, demand falls, says Paul Sankey (YouTube link)
Paul Sankey, a research president and lead analyst, discussed recent developments impacting the global oil market.
Key Points
Geopolitical and Environmental Factors: An explosive attack from Ukraine on Russian oil infrastructure, combined with wildfires in Canada reducing production by 250,000 barrels per day, is contributing to market volatility. These events are significant as they coincide with OPEC's plans to increase output, which is generally bearish for oil prices.
Demand and Supply Shifts: The global oil market is at a critical juncture. China’s oil demand, a major driver for the past 25 years, likely peaked in 2023. Similarly, U.S. oil production, the largest globally, may have peaked geologically and is showing signs of decline. These shifts mark a transition from long-term demand and supply growth cycles (30–50 years) to potential declines.
OPEC and Market Dynamics: OPEC’s planned production increases are reducing its spare capacity, setting the stage for a competitive market where U.S. production efficiency will be tested. This could lead to a "market share war" if demand weakens further, potentially pushing oil prices below $50 per barrel.
U.S. Production Trends: U.S. oil producers are proactively cutting capital expenditure (capex) despite relatively high oil prices (above $60 per barrel), reflecting strong balance sheets and cautious management. However, declining geological productivity is outpacing efficiency gains from technology and AI, suggesting a potential 15-year decline in U.S. output, especially if prices fall to the $50s.
Challenges to Metrics: Traditional metrics like rig counts are less reliable due to improved efficiencies and consolidation among larger, stronger U.S. producers. The industry is moving away from smaller, high-risk players, but sustained low prices could strain smaller firms.
Global Implications: The peaking of Chinese demand (60–70% of global demand growth) and U.S. supply (50–70% of global supply growth) signals a major transition. The interplay between falling demand and supply, alongside OPEC’s strategy, will shape the market’s future, with risks of oversupply and price volatility.
In summary, the oil market is at an inflection point, driven by geopolitical disruptions, environmental constraints, and structural shifts in demand and supply, with U.S. production and OPEC’s moves central to the evolving landscape.
Current Bear Market Rally To Bring "More Pain This Year" | Tom McClellan (YouTube link)
In this episode of "Thoughtful Money", host Adam Taggart invites technical analyst Tom McClellan to dissect Wall Street's recent volatility. They explore whether the March-April dip was a minor setback or if the subsequent May rebound signals a deceptive bear market rally. With conflicting economic indicators and the potential for a more significant downturn in 2025, McClellan offers his expert analysis and insights to guide investors through the uncertain financial landscape.
Bear Market Expectation
Outlook for 2025: Tom McClellan predicts 2025 will be a bearish year for stocks, based on a 10-year leading indicator from crude oil prices, which dropped significantly in 2014, suggesting a stock market decline starting in 2024 and continuing through 2025, with a potential bottom in January 2026.
Recent Rally: The strong market breadth (advance-decline line surge) and a Zweig Breadth Thrust signal post-April 8, 2025, low suggest a bullish liquidity surge. However, McClellan believes this is likely a bear market rally, not a return to a bull market, due to historical patterns and the crude oil indicator.
Key Points
Key Technical Indicators
Advance-Decline Line: A bearish divergence in late 2024/early 2025 (higher S&P 500, lower advance-decline line) signaled liquidity issues, but recent strength (new high in advance-decline line) contradicts the bearish outlook, creating an interpretational conflict.
Zweig Breadth Thrust: A rare signal of strong market breadth occurred after the April low, historically bullish since 1950, but exceptions (e.g., 2004, 2015, 2023) show lower lows can follow, suggesting this rally could be a trap.
Corporate High Yield Bonds: Unlike the NYSE advance-decline line, the high yield bond advance-decline line hasn’t confirmed the rally, indicating potential liquidity constraints.
M2/GDP Ratio: A declining M2/GDP ratio since 2020 suggests a “payback” period of market weakness, likely starting now and peaking around July-October 2025, with a one-year lag effect.
Reverse Repos: Inverted reverse repo data (from the St. Louis Fed) shows liquidity trends, with recent increases suggesting stock price declines in the near term, as markets overshot due to emotional exuberance (low put-call ratio).
Macro and Seasonal Factors
Political Chaos: The new administration’s unpredictability (e.g., tariff announcements) contributes to market volatility, likened to an “800lb gorilla” causing “sloshing” in liquidity.
Seasonal Weakness: Historical July-August weakness aligns with potential declines, partly explained by psychological effects of shrinking daylight in autumn, impacting investor risk aversion.
Bond Yields and Gold: Rising gold prices (above $3,300/oz) signal higher long-term bond yields starting late June 2025, potentially diverting capital from stocks. A brief yield drop in June could offer a refinancing opportunity.
Investment Strategy
Cautious Approach: McClellan advises against buy-and-hold for 2025, recommending “T-bill and chill” to preserve capital. Investors should wait for a better entry in 2026-2028.
Sector Focus: Grains (corn, wheat, rapeseed) and related stocks (e.g., fertilizer like Nutrien, or John Deere) are favored due to gold’s 12-month leading indicator for grain prices.
Gold Outlook: Gold may correct short-term (midpoint of a 13.5-month cycle, bottoming in ~6 months), but long-term bullishness depends on central bank buying (e.g., China, India).
Bonds: Avoid long-duration bonds post-June 2025 due to rising yields; June may offer a trading opportunity in bonds (e.g., TLT) or refinancing.
Parting Advice
Retail investors should prioritize capital preservation in 2025, avoiding major losses in a potentially stormy market. Active traders can explore grains or related sectors, but patience for a 2026 uptrend is key.
For more, visit McClellan’s website (mcoscillator.com) for newsletters and free resources, or check thoughtfulmoney.com for financial advisory consultations.
Expert REVEALS Trumps Plan for the Middle East & Why Oil Price is about to EXPLODE (YouTube link)
Summary of the Podcast Episode
The podcast episode was from TFTC (Truth for the Commoner), a Bitcoin-focused media platform, featuring a discussion with Anas Alhajji, an energy market expert. The conversation, recorded on May 24, 2025, covers oil markets, U.S. foreign policy in the Middle East, the dollar's global role, and energy sector challenges, with brief mentions of Bitcoin's role in the geopolitical and economic landscape.
Key Points
Oil Market Dynamics:
Current Prices: WTI crude is trading at $62.50, down 20% over the past year, despite market fundamentals supporting higher prices (in the $70s). The drop is attributed to China's economic slowdown and global uncertainty caused by U.S. trade policies under Trump.
China's Role: China's economic stall since early 2024 has significantly impacted global oil demand. Real growth in China is estimated at 2.5–3%, far below the government's claimed 5%, and a recovery above 5% is needed to push oil prices back to the $80s.
Trump's Trade Policies: The Trump administration's erratic tariff policies (e.g., 145% tariffs, 90-day delays) create confusion, stalling investments and economic growth (see also [1]). Unintended consequences include front-loading imports (e.g., Apple's iPhone shipments) and distorted trade data, contributing to fears of a recession.
Recession Risks: A potential 2025 recession could lead to a massive inventory build, depressing oil demand in 2026 and keeping prices low unless OPEC+ cuts production.
U.S. Foreign Policy in the Middle East:
Syria and Regional Shifts: Trump’s recognition of Syria’s new government marks a significant policy shift, aiming to counter Iran and Russia’s influence. Syria’s strategic location offers opportunities for U.S. companies to rebuild its infrastructure, with contracts like the UAE’s deal to revamp Syrian ports.
Criticism of Nation-Building: Trump’s speech emphasized a departure from nation-building (e.g., Afghanistan, Iraq), criticizing past U.S. policies under George W. Bush and Clinton-era Democrats. He advocates for leaving nations to prosper independently, focusing on trade over military intervention.
Investment Focus: Trump’s Middle East trip was primarily about investment (e.g., AI, energy, weapons deals with Saudi Arabia, UAE, Turkey), aiming to strengthen U.S. economic ties and counter China and Russia. Deals with Boeing and others pulled business away from China and Europe, extending Trump’s trade war strategy.
Iran Nuclear Program: The U.S. views Iran’s nuclear program (even peaceful) as a stabilizing force for a regime it opposes, creating a “never-ending crisis.” Iran seeks domestic stability through nuclear energy to boost oil exports, but mistrust over uranium enrichment stalls negotiations. Iran is likely delaying talks until it can develop a nuclear bomb, believing it will shift regional dynamics.
Dollar and BRICS:
BRICS as a Paper Tiger: The podcast dismisses the idea of BRICS (Brazil, Russia, India, China, South Africa) challenging the dollar, calling it a “paper tiger.” BRICS’ cohesion is undermined by conflicts like India-Pakistan tensions, and its influence is largely driven by China alone.
Dollar Dominance: The dollar and petrodollar are seen as secure, with no viable alternative currency emerging (see also [2]). Europe took centuries to unify for the euro, making a BRICS currency unfeasible in the near term.
Energy Sector Challenges:
U.S. Oil Production: Trump’s goal to boost U.S. oil production (e.g., by 3 million barrels/day as in his first term) is unrealistic. Shale production faces high decline rates, requiring 600,000+ barrels/day of new oil monthly just to stay flat. High interest rates and a shift from “drill baby drill” to “control baby control” by majors further limit growth.
Energy Demand Surge: Global energy demand is rising due to urbanization, migration, AI, and data centers. Migrants’ energy consumption increases dramatically (e.g., 70x for Afghans moving to the U.S.), and AI/data center growth outpaces renewable energy expansion, ensuring continued reliance on oil, gas, and coal.
Infrastructure Issues: Aging grids and insufficient manufacturing capacity for natural gas turbines threaten energy reliability. Blackouts are increasingly common (e.g., California, Texas, Kuwait), and renewables like wind are unreliable without backup.
Trump’s Stance on Oil: Despite perceptions, Trump historically dislikes the oil industry, blaming it for past business failures (e.g., Trump Airlines bankruptcy). His Gulf visit is framed as extracting oil money due to disdain, not support.
Bitcoin and AI:
Bitcoin’s Role: The podcast briefly touches on Bitcoin, noting its market cap growth from $200 billion to $2 trillion over four years. Geopolitical uncertainty, sanctions, and potential money printing could drive Bitcoin demand, though its market is now more liquid for energy deals.
AI and Energy: AI’s energy demands exacerbate grid strain, risking public backlash if data centers are prioritized over residential power. Bitcoin mining’s flexibility (e.g., selling power during shortages) is contrasted with AI’s rigidity, suggesting paired operations to balance grid demands.
Policy Recommendations:
Align Time Horizons:Energy projects span decades, while political cycles are short (2–8 years). Policymakers must avoid flip-flopping policies (e.g., Biden’s climate push vs. Trump’s rollbacks) to reduce confusion and encourage long-term investment.
Data Integrity: The Department of Energy’s capacity has deteriorated under Trump’s DOGE initiative, with staff cuts leading to canceled reports (e.g., International Energy Outlook). The EIA’s data quality has declined, forcing reliance on private firms for credible analysis.
Bullish Sectors: The speaker is bullish on LNG (a growing global market) and the power sector (driven by AI and utilities), but cautious on U.S. natural gas and oil due to structural constraints.
Critical Insights:
The podcast highlights systemic fragility in energy markets, exacerbated by policy inconsistency and geopolitical tensions. Trump’s trade war tactics, while strategically aimed at countering China, create economic uncertainty that could trigger a recession, further depressing oil prices.
The shift in U.S. Middle East policy toward trade and investment, rather than military intervention, aligns with Trump’s “peace through trade” approach but faces challenges in execution (e.g., tariff confusion, Iran stalemate).
Bitcoin’s growing liquidity positions it as a potential hedge in a multipolar world, though its energy-intensive nature ties it to broader grid challenges.
Conclusion
The episode paints a complex picture of global energy markets and geopolitics in May 2025, with oil prices suppressed by China’s slowdown and Trump’s unpredictable policies, despite fundamentals suggesting higher prices. U.S. Middle East diplomacy focuses on investment and countering China/Russia, but domestic energy challenges (e.g., grid reliability, shale constraints) and data deterioration hinder progress. Bitcoin and AI emerge as key players in the energy landscape, with LNG and utilities as bright spots for future growth. Aligning political and energy project timelines is critical to resolving these issues.
