'A STORM is Coming' – '40 to 50%' Crash Ahead as Market Bubble Starts to Crack: Edward Dowd
Summary
Market Outlook: The guest anticipates a 40–50% equity drawdown as the AI bubble cracks, the U.S. housing market weakens, and a China slowdown exerts global contagion.
Long Treasuries: He projects long-duration U.S. Treasuries to outperform in 2026 as growth and inflation expectations fall and the yield curve normalizes.
AI Sector Risks: He describes an AI-led distribution phase with rising credit stress (including CDS moves tied to CoreWeave/Oracle) and warns of mean-reversion from extreme valuations.
Private Credit: Evidence of strain includes Blue Owl gating clients and weakness at major banks (e.g., Goldman Sachs, Morgan Stanley), signaling tightening credit and negative feedback loops.
U.S. Housing: New permits plunging, an unprecedented for-sale vs. sold gap, and falling new-tenant rents imply ~30% price overvaluation and a likely correction.
China Slowdown: Demographic decline, collapsing housing permits, weaker GDP, and falling fixed investment/electricity usage point to softening domestic demand and regional spillovers.
Precious Metals: Long-term bullish on gold and silver due to central-bank accumulation and debt concerns, while near-term risk-off could cause volatility before higher highs.
Portfolio Strategy: Hold more cash now, avoid Chinese equities, and seek later opportunities in quality dividend payers and precious metal miners after broader equity pullbacks.
Transcript
Hello everybody and welcome into commodity culture where we break down commodities markets, sound money principles and geopolitics all with the goal of making you a better investor in the commodities sector. My name is Jesse Day. Today is February 27th, 2026 and I'm thrilled to welcome Edward Dow to the program. A former portfolio manager at Black Rockck where he managed a $44 billion growth equity portfolio for a decade. He is also an author and a founding partner of Finance Technologies. A storm is coming. These are Ed's words regarding the cracks he's seeing in the broad market that he thinks will lead to a 40 to 50% draw down as the AI story collapses, the real estate market plunges, and a demographic crisis in China send shock waves through the global economy. Edward also reveals how long he thinks this upcoming bare market could last. Are we in for a Japan style lost decade or will stocks rise quickly from the ashes? We also dive into the Epstein files, whether the aliens really are coming and so much more. So strap yourselves in for my conversation with Edward Dow. Edward Dow, great to have you back on Commodity Culture. You released your US economy outlook for 2026 at the end of last month where you outlined three major risks. a white swan housing crisis, the stock market AI bubble beginning to crack, and China's real estate and demographic crisis having contagion effects. Let's start with the housing crisis. What do you mean by white swan crisis? And what are the signs you're seeing that it's accelerating? >> So, white white swan is different from a black swan. Black swan is something that comes out of nowhere. This is this is not, you know, this is not controversial. The housing market's been slow uh slowly grinding uh to a halt and then we expect pricing to come down. There's a lot of people who agree with us. This is this is not something that um is undiscoverable. It's coming out of nowhere. It's just a cycle. And you know, you have a real estate industry that never wants to admit that anything's going south because they want to sell. But real estate uh new permits peaked in 2022 and usually that leads uh prices. But the reason why we stayed so high for so long was illegal immigration kept a bid under the market through rentals and multif family housing projects which are longer live construction projects than single family homes. Single family homes usually from permit to to finish is one year. Multif family structures are longer. So that's kind of kept the the market afloat. that's all rolling over. Um, you know, new permits continue to plunge. The metric of homes for sale versus homes sold has never been wider. Usually that time series uh we have a nice chart in one of our real estate reports that and I think in our US economic outlook report that shows uh that time series usually follows each other. You know, homes for sale and and sold kind of they they kind of go but this time we have this gap like this. It's unprecedented. So, the market's frozen. Home new pending uh home uh I guess pending home sales are at the lowest they've been in forever. So, the market's frozen. And so, what we have is an unrealistic seller community and people who can't afford to buy. Homes are we, you know, in our in our report, we talk about home affordability. It's about 30% overpriced and we think home prices need to correct 30%. and it'll overshoot to the downside and it's going to, you know, it can either happen fast or slow, but I think it's going to pick up and accelerate as um the the the rest of the US economy uh slows and there's more layoffs. And we're seeing that new tenant rents really started to uh unwind and go lower in the fourth quarter of 2024 when Trump was elected. And so new tenant rents lead all tenant rents which lead home prices and inflation inflation uh 36% of the CPI is shelter and that's that's a big component of of of the of the CPI and that that's all rolling. There's a uh there's a firm called True Inflation. I'm sure you're aware of them. They're showing that inflation's running a lot lower than what you know people think it is. And the bond market is starting to figure this out as well. Um the 10-year broke below 4% today. The 30-year bond is rallying uh in price, going lower in yield. And the long end of the the US government treasury market is is priced by two things and two things only. Growth expectations and inflation expectations, not the deficit. So there's been this thesis that, you know, to fund the deficit, yields on the long end are going to explode. Well, not true if growth is slowing and inflation is rolling over. And we're going to see, I think, a big riskoff uh uh market this year. And our call is that long duration treasuries are going to be the best performing asset class for 2026. For retail investors, you know, I don't I don't recommend, you know, exposing yourself to interest rate risk if you're worried about your portfolio. Maybe just raise more cash, you know, to have dry powder to buy opportunities later. uh if you're institutional, you know, you can look at the long end and make your bets appropriately, but that's that's our call. Um you know, this is this is coming after one of the worst bond bear markets we've seen uh in the last 40 years. Uh bond returns were abysmal after the Fed went on its unprecedented interest rate hike in 2022 21. Um, and if you look at the long-term charts, uh, yields have been stubbornly sticky in the US, meaning, you know, the long bond doesn't really want to go above 5%. And, uh, the Fed has been lowering the short end of the curve a little bit, but they're still way too tight. Uh, real interest rates are still running around 1%. Uh, which that that that the neutral would be 100 basis points lower. And I think what you're going to see is and and let let's also talk about the inverted yield curve. We had the longest inverted yield curve ever, I think, in the history of the the markets. And then it started to uninvert. And the normalization of the yield curve is usually the recession signal. And that's been normalizing pretty fast going into 2026. It tried to do it in the beginning of 2025 and then it kind of flattened out a little bit. What really kind of held up the economy was um you know, the mass deportations didn't really come in. They did shut down the border. uh that may pick up uh but you know that's a second derivative change and that's that's been enough to start the slowing growth in the US and also we had the AI infrastructure build so that kind of propped up GDP for a little bit but this last quarter GDP came in quite weak uh the expectations were I mean the people were you know the Trump administration was talking four four and a half% came in at 1.4 before and showed a lot of alarming deceleration. So, I think when we when we go back uh we've been in an employment recession for a while, the non-farm payroll numbers, I've spoken about this last year, they're garbage. And non-farm payroll is a monthly estimate and then the real data comes in usually nine months in a rears and it's found in the quarterly census earnings and wages report, which is when everybody has to report all the data. And the non-farm payroll numbers were off four standard deviations in 2024 and eight standard deviations in 2025, which mathematically says to me whatever the non-farm payroll number is that prints, it's garbage until until the error rate comes down. So, you know, the market finally started to realize that the non-farm payroll number might be garbage when everything was revised for 2025 and that's really when the long end of the curve started to pick up. Now, the broad market at the moment, propped up by a handful of tech and AI names, is still grinding slowly higher. I I don't know many guests on this show who don't agree that it's in a bubble at present. And you've spoken about that on this show a few times before as well. You mentioned current valuations imply a forward 10-year return of 0%. Which so I'd like to unpack that. Which metrics are leading you to that conclusion? And what would you need to see to officially declare that the bubble has begun to burst? >> It's just it's just a valuation tool. You you look at the dividend yield of the S&P versus uh you know uh corporate credit and it's at a historically low range and when it gets to this range historically the projected 10ear return is zero which implies a big draw down in the market. Now, you know, people might argue this time's different, but you know, capital is capital and capital eventually will we'll figure this out. Um, we put there's a there's a free report on our resource page on our website, finance technologies.com with a ph under under the tab resources and we put out a report at the beginning of last year uh saying the same thing and it only got more expensive. Uh, so it's it's it's even worse. the valuations are even worse a year after we put out that report. And it goes through all the math. You can read it. It's it's it's free. So go there if you want to get the explanation of, you know, and we're not the only ones saying this. This this is not controversial. This is this is this is classic uh math 101 mean reversion. Now again, the argument is it's different this time and AI changes everything, but I'm not a big believer in that. Um so the valuations are crazy. uh the Buffett indicator, other indicators are all, you know,.com level metrics. And you know, I've been here before and uh nothing's ever different under the sun. Uh I want to point out when I know it's easy to to say that the market's been grinding higher, but if you look at the chart, it hasn't gone anywhere since October. It if you pull up the long-term chart of the S&P, it's been putting in what we call a slightly rounded top. uh my best bet short-term and again I don't I'm not trying to give trading advice. I think there's a a false breakout higher to a new all-time high and then everything collapses after that. So we're in this you know what we what we call on Wall Street the distribution phase. Uh markets going sideways uh uh you know the insiders are getting out. If you look at insider selling it's a you know I don't think there's anybody buying any stocks. People are alarmed by the insider selling record insider selling. So, you know, they sell their shares, retail buys it, retail usually comes in at the top. And I think a couple weeks ago, we saw like the largest retail purchasing of the stock market on record, 48 billion. So, the the signs are there. Um, the signs are there. And the AI bubble is starting to crack in my humble opinion. You know, I I have a unique uh background in finance. I my my career started in fixed income. Uh I was an institutional bond salesman. So I got to understand the the credit markets quite well. Then I went back to business school. Then I went to equities. So I have a lot of respect for the bond market and how it interoperates with the equity markets and credit usually credit guys are usually uh ahead of the curve when it comes to the equity folks. Equity folks are into momentum and narratives and stories. Bond guys want their money back. And if you look at what's going on in the AI infrastructure and Coreweave reported last night, uh that stock I think is down uh a little bit here today. And um the numbers the numbers weren't great. The CDS the credit default swaps on Core Weave and Oracle have been going and grinding higher. And there's a private credit problem starting to unfold. We got Goldman Sachs and M Morgan Stanley down seven six 7% today um based solely on the fact that the private credit markets are starting to freeze. That's evident from Blue Owl gating their clients. So this is this is this is how it begins in every every cycle. Uh and at the end of every cycle there's what we call the Ponzi finance part of the cycle. And I'm not saying it's it's like a Ponzi scheme. It just it's what they call it the Ponzi finance. And it manifests in different sites. So in in in OO it was you know companies without any cash flows uh you know getting getting loans on spec that they'd have future internet revenues down the line you know like the selex these were specular telecom companies funded by junk bonds and they had zero zero cash flow and not a lot of revenues and so their the the ability to pay back the debt was based on their momentum and their stock valuation. Once that cycle breaks, it goes the other way. And we kind of see the same thing. Uh that was and then we had the subprime Ponzi part of the uh great financial crisis, you know, giving money to people that couldn't afford to ever pay it back. And now we have the Ponzi finance AI bubble and private credit where which is uh been funding businesses that are zombie companies and the hope is that valuations go higher to you know to refinance the debt. That's all unwinding. And so that that that starts the you know the the credit jenga tower to go from growth growth growth to plateau to starts to have credit contraction and that has knock-on effects. It starts feedback loops everywhere. So credit's probably tightening as we speak. And this time is it's a little more concerning. We have an AI bubble. So a stock market bubble and a housing problem. Um the good news is it's not as the housing uh problem is not as bad as it was in uh 2008. Uh uh the consumer is not as leveraged as they were back then. I think the banks will be able to manage it, but there's going to be a deep recession. I don't think it goes systemic. There's going to be, you know, big scares. Uh, so we're not calling for a systemic issue where we're going to need, you know, massive bank bailouts, but there's going to be a lot of pain. And, you know, we didn't have a systemic issue in the dot bubble and the stock market went down 50%. So, you know, we're projecting a 40 to 50% draw down at some point in the stock market and uh, you know, it's not the end of the world. And the people that I've been talking to um that I consult with um I just recommend to them, you know, have dry powder in your portfolio and take advantage of the opportunities. It'll mitigate you on the downside and uh and and and then when you reinvest and the key is reinvesting and you know, timing isn't perfect, but if stocks are down 50%, I'd start deploying, you know, the cash you built up again. And that's what Warren Buffett's going to do. Warren Buffet like us was was we were early on this because we were wrong about the the illegal illegal immigration really kind of distorting the economy. So we were off on our recession call. Warren Buffett was as well. He's got he's been he's been accumulating cash for 2 years and he's ready. So the key is the storm's coming. Step to the sidelines a little bit. Don't panic and then go back in. >> The sponsor of today's episode is Arc Silver Gold Osmium. Owner Ian Everard is praised even by his competitors as one of the most honest and level-headed bullion dealers in the United States. They have some great prices. You can see some of them displayed right now on screen. Take advantage of these specials today by reaching out to Ian at 3072649441 or by email at ianarchcsggo.com. Make sure to tell him of course that commodity culture sent you. And now back to the interview. That's a really interesting analysis because that leads into my next question which was how long do you think this draw down could last for? Because I've spoken to some people such as Dave Colum who thinks we could be in for a decade plus of the market grinding sideways after a massive correction before we see the previous highs again. And of course the strategy of so many has been to simply dollar cost average into an index fund. People almost treat it like a glorified savings account. Just keep putting money into the S&P index. Is is that still a viable strategy in the long term? Do you think ultimately the broad market recovers out of this in a reasonable time frame? >> Well, if you if you have a draw down of 50%. And and there's going to be bargains everywhere. And if you're especially a retired individual and there's like a a blue chip stock that has a fat dividend yield because of a dislocation, you buy it because you're going to get income from and don't get too concerned about the market. Now, I do think after this dislocation unwinds, it's going to take a long long very long time to go back to new new all-time highs. Um, but if you buy right and you're getting income off the stocks, you shouldn't worry too much about the sideways move for the next 10 years. Now, if you buy, you know, in a sideways move at the top, right before it goes down again, which is what a lot of people do. A lot of people will sell at the bottom um uh of of this cycle, not get back in because they're anchored to the fact that they just sold and then they'll the market will go up for a year or two and uh uh they'll probably buy at the top of that and then it'll it'll you know go down again. It'll be like the Japanese stock market sideways for a while. But, you know, it it's going to be great for fundamental investors and traders. Bull markets make everyone a genius and that's why indexing and passive investing investing has taken over. Um you know there was a passive investing uh trend that was going on during the uh the Nifty50 in the 70s. Um and so let if we go into a market that is um more sideways that can actually make uh you know people who uh are fundamental investors attract more assets. the ETF companies of the world will start to lose share because you know you know in a bull market passive is the way to go and there's going to be a lot of problems if we're if we're going to a 10-year sideways decade market uh a lot of trends that you know that that have been going on are going to unwind and the Larry Finins and the vanguards and the state streets of the world are going to probably lose flow over time. There's been a lot of mixed discussion on the state of the Chinese economy from it's on the verge of collapse to they are destroying the US and will soon be the global superpower. What makes you think we're entering the acute phase of a crisis in the country and what will the implications of the contagion effects of this crisis be? So it's important to understand China is um a net creditor nation. That means they you know they have a lot of reserves. So they can fund this crisis internally and they're not going to be subject to the whims of the uh foreign investors like a lot like like like in Thailand there was the the Asian contagion crisis where a lot of capital went into Thailand then there was a problem and then the capital was pulled up. China can manage this, but it's going to have global contagion effects because what's been going on is they hit a demographic uh plateau in 2015. Uh and then it went sideways. Then it started to roll over in 2020 and it's accelerating into 2032 and they're going to lose 150 million prime prime age working people which changes the whole dynamic of how you spend. And so their economy uh we did we put out some great reports uh an institutional class report and then a ret a cheaper price retail version. Um and we show basically that China's GDP priced in dollars uh was 80% uh of the US GDP in 2019. Since 2020 it's gone to six priced in US dollars its GDP is 60%. uh they've had since the real estate bubble burst in 2020 um it's been a slow grind lower and so to compensate for that they started massive exporting so they they they try to export their way out of this this this problem and that is that has worked to some degree uh but uh you know we now have trade wars so that's a problem second problem is um housing permits are down 70% from the peak what's more alarming is that a lot of these projects s were long live projects and so construction is only down 20%. Construction new construction contracts peaked uh last year and they're accelerating lower into this year. So that's why we think we're going into the key phase. Um their internal economy is having deep deep problems and if you look at their latest GDP number it was four and a half% in the fourth quarter. that was the the slowest GP G GDP growth for them in the last three years. Then there's other metrics like uh net fixed investment. Um that number is now year-over-year below zero. The year-over-year growth rate on a monthly basis is below zero. It's never been below zero except briefly during COVID if you look back at the last 30 years. So they've never seen this. Then additionally, we looked at uh electricity consumption. uh that growth is about to cross over into zero. Uh so there there's something definitely going on in China and we're not so you know is China going to collapse? No, China you know it's not going to collapse but it's going to be very bad there and that's going to have a you know that's going to and their internal consumption is going to drop. That's going to affect their trading partners like Japan uh you know South Korea others in the area. I said it's going to be this um contagion effect and there's going to be you know a lot of problems uh and uh it's just going to add you know you have you have the housing crisis in the US the stock bubble then you have China all three of those are are all bearing down this year and make for a cocktail of um you know slowing global economic growth and again I think the bond markets are starting the US bond market is starting to sniff this out and the Fed is woefully too tight and they're going to be uh chasing this down once it gets going. Um, you know, we're one we're we're 1% too high. Neutral would be 100 basis points lower. And of course, they they'll overshoot neutral. They'll go below neutral. >> And would you be staying away from Chinese equities at present? Because the there's a lot of people pointing out that they seem to be very undervalued here or are they cheap for a reason in your view? >> They're cheap for a reason. And I think I I haven't looked at Chinese equity stock charts, but I think they've had a rally recently. And that, you know, they were already in the tank a couple years ago. I think they've had a nice rally and I, you know, I think it's just like, you know, probably, you know, like what happened to Japan, their Japan 2.0, it'll peak, the rally will peak out and then it'll go, you know, it's it's in the sideways market and uh I wouldn't I wouldn't be buying Chinese equities here. Um they're they're Japan 2.0. So, Japan ran into a sim similar demographic headwind in in the 90s and you know there's a lot of calls and a lot of you know people always are anchored in in in the past and people there's a lot of people out there say China's won China's taken over the world well the numbers suggest otherwise China's in trouble and they have a demographic problem just like I remember in the mid90s uh Japan was entering a demographic problem and everyone said Japan was going to take over the world I was in business school in 1995 and we had um you know a project in in in we had a project where we had to do team building exercises and make presentations and the topic was is Japan going to take overtake the US and we were the only team that said no we got an A because we had a lot of good evidence but the professor didn't agree with us and it was because everyone was looking at you know the data in the rears and we were the only ones that looked at demographics and we said demographics are destiny and that ended up being true, you know, after, you know, around 95, I mean, they really peaked in '89, but it became apparent to everyone that entered the lost decades of deflation. And China's going through the same thing. Just to give you some numbers, I mean, so they uh in 2020, they had 900 million uh in peak peak age working workforce. By 2032, that's going to drop 150 million. So that's a that's a half a US, you know, and they they're aging and they're not and their birth rates aren't and they have, you know, they're not they don't have enough people to support, you know, the elderly. Uh they they don't have a safety net in China. So that's it's it's even worse because they don't have a consumer spending engine. So a lot of people once they they leave their job, they've saved up their money, they go into like conservation mode. Um and they're they're not they're not they're not going to retirement homes. there. You know that it's a whole different dynamic. There's no safety net in China. >> Since the last time we spoke, we've seen an incredible run in the precious metals, especially silver, with it closing at an all-time high of around $1717 near the end of January before collapsing 26% in a single trading day. Now, steadily creeping back to triple digits. We're at around $93 the last time I checked today. What do you think has driven this price action in silver? And do you expect it to reach new all-time highs this year? >> Good question. Um, so silver finally played a catch-up with gold. I mean, you know, people had had been screaming for a year about the silver gold ratio and it finally it finally happened. Um, and I I think long-term uh, gold and silver are going to grind higher. Uh, you know, primarily because there's we do all everybody under the sun thinks a new monetary system's coming at some point. and watch what they do, not what they say. And every central bank is accumulating gold. Every commercial bank in the US is now accumulating physical gold because they made a tier one capital. Uh, China's accumulating gold because they have to depreciate their currency to keep selling into the, you know, global markets. Um, uh, India keeps buying gold. So, gold, gold, gold. So there's a and also we have a you know we all know there's a global sovereign debt problem and people uh as we roll through time and the deficits get bigger and and and the demographics get worse more and more people want an asset that's not someone else's liability which is gold. So gold is I think got long-term fundamentals that are great. That's that's that's strategic tactical. It's a little more problematic. So, you know, if you look at the charts of gold and silver, they had they've had tremendous moves going up into this part of the cycle, much like gold did going into the great financial financial crisis. Uh I don't want to predict what gold's going to do. But uh if there is a uh you know a general riskoff trade, gold and silver may participate in that because as people unwind leveraged bets and and and have to sell what they can not what they what they can not what they want to you it might take a hit like it did in the financial crisis. But I want people to understand in the great financial crisis gold went down quite a bit in in the Leman event. And again we we're not calling one. um it it did recover and go to new all-time highs more uh quickly than the US stock market. So I suspect if there is a pullback in gold or silver, it's a good buying opportunity. Um my best guess is that you know we consolidate uh sideways for a little bit uh and then that's what I'd like to see. That's a that would be a healthy thing technically to see some consolidation and then another runup. Um, if we see a parabolic move in gold and silver soon, that would really scare me. Uh, that means something something's really gone off the wheels behind the scenes in the in the in in in the uh global banking system. And then, you know, usually a parabolic blowoff top means you you don't want to be chasing it if it happens. But I long term, I love gold and silver and I'd love to see it consolidate, you know, for a year or so. But and if there's any kind of major sell-off, I would accumulate some on dips, physical that is, not not the ETF. >> And how do you view silver versus gold? Obviously, silver having much more of an industrial component. Do you see it as a more speculative asset in the long run? Because obviously there's all sorts of narratives out there about shortages in the silver market. According to the silver institute, we're in our sixth year of a supply deficit in the silver market. Indust industrial demand obviously very strong. People point to solar panels as one of the main drivers. I I don't really see that because I don't think solar is going to, you know, dominate the world like people thinks it is. But nonetheless, it's used in so much industry. So, how do you do you see it as more speculative whereas whereas gold is more of a monetary asset, silver is more of a industrial what how do you see that? >> Yeah, if if you look historically at the math, uh silver is more volatile than gold and it does have um a correlation to economic cycles. So if there is a if there if our colony economy is right and industrial demand drops uh go silver will get hit harder than gold and it and that's just the way it is. It's always been that way. Um so you know I'm not I'm a I'm a gold guy because it's going to be part of the new the new and silver may be part of the new monetary system but I definitely know gold is and uh and so gold is more volatile. I mean, s excuse me, silver is more more volatile. It's got higher beta, and that's just the way it is. So, if if you don't, if you can stomach the volatility, you can make tremendous amounts of alpha if you can, you know, weather the storm and you're not leveraged. And if you're just a physical buyer and you're just stacking it because you're young and you're you want to retire and it's part of your total portfolio, again, don't ever put all your eggs in one basket. And I've been recommending to people 5 to 10% of your total net worth in physical uh you know precious metals. But you know if you're if you're a long-term holder, you don't want to get scared out of this stuff. Um it's it's it's not worth trading it in my humble opinion. I mean if you're a trader you can use you can use the ETFs if you're a day trader but again and don't use don't use futures. futures. I mean, that's there were a lot of specs in gold and silver that got blown out when the CME because they can play games. They can increase the margin requirements and then you're blown out. And that that's how they that's how they that's how they manipulated silver lower. It was blowing up the silver uh futures longs, but long-term silver prices are going higher. >> And do you have any thoughts on the gold and silver mining equities and just the commodities complex in general? I know you're bearish on oil moving forward. We've discussed that before before, but are there any other commodities outside of gold and silver that you think will perform well after this kind of broad market bubble bursts? >> Well, we have to see. So, basically uh our economic call commodities won't do well temporarily. Uh and uh so we're we're we're bearish on that. There there are some commodities that are doing better than others like copper. That's because China is hoarding. China has so much uh money supply they're just acquiring real assets because they're going to depreciate their currency. So there's some hoarding going on. Um but when you really need to see we have a globally we have a demographic problem. So that that that that suggests less demand for commodities in general. However, if the authorities in this next downturn respond with unprecedented mon monetary printing, we could have a commodity cycle. So uh I'm you know our call on commodities is like to be determined once we see what the response is at you know once this unfolds >> gold and silver miners and any thoughts on that sector? Oh yeah. So the gold and silver miners they're they're at the end of the day they're equity. So if the equity markets are going to have a general draw down they will participate. They may outperform on a relative basis so you might lose less money. Um but and if you look at the charts of a lot of these stocks that they've been fantastic already uh which you know I don't like to buy charts that look like this. Uh I like pullbacks, but you may get your pullback in in an equity draw down and then longer term uh the the fundamentals are good and I think I think the silver and gold miners will probably do well on the other side of any kind of equity draw down. >> Well, let's get into government corruption. I want to discuss the Epstein files here for a moment and ask the question, what surprised you the most about the files so far? What suspicions have they confirmed? and what impact do you think they will have on the future of politics worldwide? >> You know, I was very suspicious um in 2020 and 2021 of what was going on globally with the co the COVID pandemic vaccine coordination and messaging. And lo and behold, we we find out in the Epstein files that Bill Gates and Epstein and others were uh talking exactly about this, you know, how to profit off of a pandemic. And so, you know, that that angle needs to be really super investigated. Bill Gates needs to be deposed by someone. You know, I always suspected there was there was something. I mean, to me it, you know, intuitively I thought that, but I couldn't say it publicly. I could I could hint around it. But now we have some some real hard evidence that this was a plan. Uh, I mean it it boggles the mind uh that that these super national hidden operations can could coordinate this and and what we're learning from the Epson files is that it's an op it's an operating system. So we have the public facing you know institutions but we find out there's a layer of people above them that know how to manipulate that whole thing to their benefit through comprom and blackmail. and and and and uh and and uh and money laundering. Let's not forget Epstein was involved in moneyaundering. That's that's how a lot of this stuff was. It's all dark money. Uh and the other thing that surprised me that I didn't this angle I didn't think of and I you know again we'll find out more but Bitcoin uh has been tied to Jeffrey Epstein and he's been involved in uh you know taking over the network and funding it. I don't know what you think of that. And you know, intuitively makes sense. If you wanted to uh you know, um set up your own um dark money blackmail operation and launder money, Bitcoin would be the perfect way to do it, I guess. So, you know, there's a lot that's being revealed. And I don't, you know, I don't know what that means for Bitcoin long term, but um it certainly kind of disrupts the narrative that Bitcoin is freedom. I mean, that was kind of one of the narratives that we were hearing. And I've never been a Bitcoin um bear or bull. I've always said it's a it's a proxy for NASDAQ and liquidity trade. You know, you know, buyer beware. It's not a store of wealth. It's very volatile. So that's what it's always been to me is a volatile, you know, 95% correlated asset to the NASDAQ. It seems the Trump administration is doing whatever they can to distract from the Epstein files and bury the truth, including the fact that Secretary of Commerce Howard Lutnik has repeatedly lied about his relationship with Epstein and yet remains in his position somehow. Uh you wrote on X, Howard caught lying about relationship to Epstein from Epstein files and his firm profiting from adverse tariffs ruling. If this guy remains, it's telling and not in a good way. So why do you think this administration wants to bury the files and keep such absolutely corrupt individuals as Lutnik on board who as you mentioned has also set up his family to profit from the Supreme Court's tariff ruling. >> Yeah, let's talk about the profiting. There were some news stories that came out uh about that. Uh so when I wrote that post, that's what I was referring to. Then they came out uh they they came out and adamantly Canford Gerald came out and adamantly denied that. Okay, that's fine. But I read I read the press release and they they they use the word execute and that if you're an agent and uh you're facilitating you're and acting as a broker or an agent that doesn't necessarily mean you execute the trade you just get a commission. So I you know they denied it but I the the the legal ease with which they use the term we didn't did not execute or take any proprietary positions. That may all be true. They didn't they didn't legally execute a trade. They didn't take a position, but they may have they may have profited from, you know, setting up these trades. We don't know, but that, you know, that that needs to be cleared up. So, but it what we do have Howard on dead rights is his absolute utter lie about his relationship with Epstein. I mean, he just he got on I think it was 60 Minutes, I believe, said X Y Z. Then the Epstein files reveal a whole plethora of uh, you know, business relationships. He supposedly bought his mansion next door to uh Epstein for $10. His sister's involved. He actually went to Epstein Island. So, he's caught dead to rights lying on that. So, the the the the firm profiting is less clear. Needs to still be investigated, but he's caught dead to rights. And, you know, I don't know about you, but uh you know, I'm tired of people getting away with nonsense and lying their asses off. And you know, the Trump administration just needs to be better. And uh you know the other problem I have is uh you know the uh Epstein files were you know not you know they indicted a lot of Democrats as well. So the Democrats look awful here but you know it was obviously not good good news for Howard Lutnick and some other high-profile Republicans. Let's let's not forget Howard Lutnick was a Democrat and he's kind of switch sides. Um then of course we drop the alien nonsense. you know, all of a sudden, you know, we're going to have alien disclosure. They're interdimensional beings and yada yada yada. I I'm sorry. That's just that's just too much. >> Yeah, that's interesting because well, f first of all, one comment I want to make about Letic go to Epstein. For some reason, he made a point of saying with all of my children like that somehow changes things. I just I I don't know what that was. Whether he was trying to say it was innocent because I was with my children. It's still a total lie. Now, I I want to follow up on the biggest distraction of all, which is the aliens angle. As you mentioned, you also noted on X that unless the aliens are going to lower the cost of living and give people jobs, this tactic is not going to work. Is this desperation? Are the aliens real? And what, if anything, would releasing classified documents on extraterrestrial life accomplish at this point? I think people want to see the predators in the Epstein files prosecuted more than anything. I I don't see any distraction that's going to work at this point. But hey, the news cycle moves quickly. People are easily distracted. Maybe I'm wrong. What's your take? >> Yeah, I you know, I I I personally believe uh one of the biggest frustrations and the polling numbers reflect this. Uh one of the biggest frustrations with the Trump administration, just I'm not talking about myself or you I'm talking polling. uh is accountability and and immigration and he's um he kind of pulled a 180 on immigration recently. He's you know deportations of only criminals which you know is a dimminimous amount of people. Um so he's walked back his promise there and the accountability there's no one that's been held to account from COVID uh from Russia gate from lawfare gate. I mean, no one has been held to account for any of the crimes that we've seen. And now we have the And then throw the Epstein files on top of that. No accountability. Um, I think people are being uh slowly blackpilled and giving up hope, which I don't think people should do, but that's what's going on. And the Trump administration now knows they're in trouble because the polls are are disastrous. They're going to lose the midterms unless they do something. Um, and the aliens isn't going to the aliens angle isn't going to save him. Let's just say that. I mean, again, you know, first of all, what Donald when Donald Trump says he's going to disclose the alien files, you know, if you dig a little deeper, there's a whole bureaucracy built around secrecy, they won't let him do much of anything. Uh, so that we're not going to whatever does come out, it's got it's not going to be much. So, it it seems to me this was a big big distraction. Get gets a lot of the UFO people excited and and whatnot. You know, the thing to watch for is look, I I I I kind of I' I've talked about the the money uh the debt based fiat system and it needs bigger and bigger credit growth and uh you know, excuses to grow to up the size of the credit growth and co was a perfect excuse that saved the uh global economy in 2019. was clearly rolling over. We were having uh plumbing issues and then we voila co came and we had basically war unprecedented uh money printing and deficit spending. It was a it was warlike spending and that kicked the can down the road and here we are again and it's probably going to unwind. Um and the only thing that really saves the credit creation if if you're trying to prevent the cycle from you know completing and that that's what bankers want to do. They don't want ever want to take losses. Um, you need a war uh or you need uh I jokingly said a couple years ago, fake alien invasion to justify the uh amount of spending to keep this thing going. And sure enough, the aliens are showing up again. I don't know if that's the the reason why, but they're definitely being used as a distraction. A definite distraction. >> Well, Edward, tell us about finance technologies and anywhere you'd like to direct people online who want to follow your work. Yeah. So, financiest technologies.com with a PH instead of an F. We have all our US economic reports, China report, we have some uh real estate reports. Um, you can you can buy uh packages or one-offs, whatever you want. We also um have uh email that you can sign up to, get a get, you know, subscribe to Finance Technologies website. Um, I also have a personal website eddow.com and I'm found on xdowedward and uh I post frequently and um you know there's just a lot going on and uh I think I you know I'm more confident this year that we're going to see something start to unwind. >> Great. Well, I'm going to put links to everything you mentioned in the description below for people who want to check that out. As always, great having you on, Edward. Thank you so much. >> Thanks, Jesse. Great to be here. Thank you for joining us today. Our sponsor Ark Silver Gold. OSM has some great specials on gold and silver bullion products. They are on your screen right now. These are well supplies last and subject to change. So reach out to owner Ian Everard today at 3072649441 or by email at ianarchsggo.com and make sure to tell him that commodity culture sent you. and represent sound money in style with the exclusive stack silver not fiat t-shirt available at the commodity culture shop using the link in the description below and I'll see you guys in the next episode. Commodity culture is a series on commodities and natural resources. If you would like to see more, be sure to subscribe and hit the bell notification so you're always up tod date with the latest episodes.
'A STORM is Coming' – '40 to 50%' Crash Ahead as Market Bubble Starts to Crack: Edward Dowd
Summary
Transcript
Hello everybody and welcome into commodity culture where we break down commodities markets, sound money principles and geopolitics all with the goal of making you a better investor in the commodities sector. My name is Jesse Day. Today is February 27th, 2026 and I'm thrilled to welcome Edward Dow to the program. A former portfolio manager at Black Rockck where he managed a $44 billion growth equity portfolio for a decade. He is also an author and a founding partner of Finance Technologies. A storm is coming. These are Ed's words regarding the cracks he's seeing in the broad market that he thinks will lead to a 40 to 50% draw down as the AI story collapses, the real estate market plunges, and a demographic crisis in China send shock waves through the global economy. Edward also reveals how long he thinks this upcoming bare market could last. Are we in for a Japan style lost decade or will stocks rise quickly from the ashes? We also dive into the Epstein files, whether the aliens really are coming and so much more. So strap yourselves in for my conversation with Edward Dow. Edward Dow, great to have you back on Commodity Culture. You released your US economy outlook for 2026 at the end of last month where you outlined three major risks. a white swan housing crisis, the stock market AI bubble beginning to crack, and China's real estate and demographic crisis having contagion effects. Let's start with the housing crisis. What do you mean by white swan crisis? And what are the signs you're seeing that it's accelerating? >> So, white white swan is different from a black swan. Black swan is something that comes out of nowhere. This is this is not, you know, this is not controversial. The housing market's been slow uh slowly grinding uh to a halt and then we expect pricing to come down. There's a lot of people who agree with us. This is this is not something that um is undiscoverable. It's coming out of nowhere. It's just a cycle. And you know, you have a real estate industry that never wants to admit that anything's going south because they want to sell. But real estate uh new permits peaked in 2022 and usually that leads uh prices. But the reason why we stayed so high for so long was illegal immigration kept a bid under the market through rentals and multif family housing projects which are longer live construction projects than single family homes. Single family homes usually from permit to to finish is one year. Multif family structures are longer. So that's kind of kept the the market afloat. that's all rolling over. Um, you know, new permits continue to plunge. The metric of homes for sale versus homes sold has never been wider. Usually that time series uh we have a nice chart in one of our real estate reports that and I think in our US economic outlook report that shows uh that time series usually follows each other. You know, homes for sale and and sold kind of they they kind of go but this time we have this gap like this. It's unprecedented. So, the market's frozen. Home new pending uh home uh I guess pending home sales are at the lowest they've been in forever. So, the market's frozen. And so, what we have is an unrealistic seller community and people who can't afford to buy. Homes are we, you know, in our in our report, we talk about home affordability. It's about 30% overpriced and we think home prices need to correct 30%. and it'll overshoot to the downside and it's going to, you know, it can either happen fast or slow, but I think it's going to pick up and accelerate as um the the the rest of the US economy uh slows and there's more layoffs. And we're seeing that new tenant rents really started to uh unwind and go lower in the fourth quarter of 2024 when Trump was elected. And so new tenant rents lead all tenant rents which lead home prices and inflation inflation uh 36% of the CPI is shelter and that's that's a big component of of of the of the CPI and that that's all rolling. There's a uh there's a firm called True Inflation. I'm sure you're aware of them. They're showing that inflation's running a lot lower than what you know people think it is. And the bond market is starting to figure this out as well. Um the 10-year broke below 4% today. The 30-year bond is rallying uh in price, going lower in yield. And the long end of the the US government treasury market is is priced by two things and two things only. Growth expectations and inflation expectations, not the deficit. So there's been this thesis that, you know, to fund the deficit, yields on the long end are going to explode. Well, not true if growth is slowing and inflation is rolling over. And we're going to see, I think, a big riskoff uh uh market this year. And our call is that long duration treasuries are going to be the best performing asset class for 2026. For retail investors, you know, I don't I don't recommend, you know, exposing yourself to interest rate risk if you're worried about your portfolio. Maybe just raise more cash, you know, to have dry powder to buy opportunities later. uh if you're institutional, you know, you can look at the long end and make your bets appropriately, but that's that's our call. Um you know, this is this is coming after one of the worst bond bear markets we've seen uh in the last 40 years. Uh bond returns were abysmal after the Fed went on its unprecedented interest rate hike in 2022 21. Um, and if you look at the long-term charts, uh, yields have been stubbornly sticky in the US, meaning, you know, the long bond doesn't really want to go above 5%. And, uh, the Fed has been lowering the short end of the curve a little bit, but they're still way too tight. Uh, real interest rates are still running around 1%. Uh, which that that that the neutral would be 100 basis points lower. And I think what you're going to see is and and let let's also talk about the inverted yield curve. We had the longest inverted yield curve ever, I think, in the history of the the markets. And then it started to uninvert. And the normalization of the yield curve is usually the recession signal. And that's been normalizing pretty fast going into 2026. It tried to do it in the beginning of 2025 and then it kind of flattened out a little bit. What really kind of held up the economy was um you know, the mass deportations didn't really come in. They did shut down the border. uh that may pick up uh but you know that's a second derivative change and that's that's been enough to start the slowing growth in the US and also we had the AI infrastructure build so that kind of propped up GDP for a little bit but this last quarter GDP came in quite weak uh the expectations were I mean the people were you know the Trump administration was talking four four and a half% came in at 1.4 before and showed a lot of alarming deceleration. So, I think when we when we go back uh we've been in an employment recession for a while, the non-farm payroll numbers, I've spoken about this last year, they're garbage. And non-farm payroll is a monthly estimate and then the real data comes in usually nine months in a rears and it's found in the quarterly census earnings and wages report, which is when everybody has to report all the data. And the non-farm payroll numbers were off four standard deviations in 2024 and eight standard deviations in 2025, which mathematically says to me whatever the non-farm payroll number is that prints, it's garbage until until the error rate comes down. So, you know, the market finally started to realize that the non-farm payroll number might be garbage when everything was revised for 2025 and that's really when the long end of the curve started to pick up. Now, the broad market at the moment, propped up by a handful of tech and AI names, is still grinding slowly higher. I I don't know many guests on this show who don't agree that it's in a bubble at present. And you've spoken about that on this show a few times before as well. You mentioned current valuations imply a forward 10-year return of 0%. Which so I'd like to unpack that. Which metrics are leading you to that conclusion? And what would you need to see to officially declare that the bubble has begun to burst? >> It's just it's just a valuation tool. You you look at the dividend yield of the S&P versus uh you know uh corporate credit and it's at a historically low range and when it gets to this range historically the projected 10ear return is zero which implies a big draw down in the market. Now, you know, people might argue this time's different, but you know, capital is capital and capital eventually will we'll figure this out. Um, we put there's a there's a free report on our resource page on our website, finance technologies.com with a ph under under the tab resources and we put out a report at the beginning of last year uh saying the same thing and it only got more expensive. Uh, so it's it's it's even worse. the valuations are even worse a year after we put out that report. And it goes through all the math. You can read it. It's it's it's free. So go there if you want to get the explanation of, you know, and we're not the only ones saying this. This this is not controversial. This is this is this is classic uh math 101 mean reversion. Now again, the argument is it's different this time and AI changes everything, but I'm not a big believer in that. Um so the valuations are crazy. uh the Buffett indicator, other indicators are all, you know,.com level metrics. And you know, I've been here before and uh nothing's ever different under the sun. Uh I want to point out when I know it's easy to to say that the market's been grinding higher, but if you look at the chart, it hasn't gone anywhere since October. It if you pull up the long-term chart of the S&P, it's been putting in what we call a slightly rounded top. uh my best bet short-term and again I don't I'm not trying to give trading advice. I think there's a a false breakout higher to a new all-time high and then everything collapses after that. So we're in this you know what we what we call on Wall Street the distribution phase. Uh markets going sideways uh uh you know the insiders are getting out. If you look at insider selling it's a you know I don't think there's anybody buying any stocks. People are alarmed by the insider selling record insider selling. So, you know, they sell their shares, retail buys it, retail usually comes in at the top. And I think a couple weeks ago, we saw like the largest retail purchasing of the stock market on record, 48 billion. So, the the signs are there. Um, the signs are there. And the AI bubble is starting to crack in my humble opinion. You know, I I have a unique uh background in finance. I my my career started in fixed income. Uh I was an institutional bond salesman. So I got to understand the the credit markets quite well. Then I went back to business school. Then I went to equities. So I have a lot of respect for the bond market and how it interoperates with the equity markets and credit usually credit guys are usually uh ahead of the curve when it comes to the equity folks. Equity folks are into momentum and narratives and stories. Bond guys want their money back. And if you look at what's going on in the AI infrastructure and Coreweave reported last night, uh that stock I think is down uh a little bit here today. And um the numbers the numbers weren't great. The CDS the credit default swaps on Core Weave and Oracle have been going and grinding higher. And there's a private credit problem starting to unfold. We got Goldman Sachs and M Morgan Stanley down seven six 7% today um based solely on the fact that the private credit markets are starting to freeze. That's evident from Blue Owl gating their clients. So this is this is this is how it begins in every every cycle. Uh and at the end of every cycle there's what we call the Ponzi finance part of the cycle. And I'm not saying it's it's like a Ponzi scheme. It just it's what they call it the Ponzi finance. And it manifests in different sites. So in in in OO it was you know companies without any cash flows uh you know getting getting loans on spec that they'd have future internet revenues down the line you know like the selex these were specular telecom companies funded by junk bonds and they had zero zero cash flow and not a lot of revenues and so their the the ability to pay back the debt was based on their momentum and their stock valuation. Once that cycle breaks, it goes the other way. And we kind of see the same thing. Uh that was and then we had the subprime Ponzi part of the uh great financial crisis, you know, giving money to people that couldn't afford to ever pay it back. And now we have the Ponzi finance AI bubble and private credit where which is uh been funding businesses that are zombie companies and the hope is that valuations go higher to you know to refinance the debt. That's all unwinding. And so that that that starts the you know the the credit jenga tower to go from growth growth growth to plateau to starts to have credit contraction and that has knock-on effects. It starts feedback loops everywhere. So credit's probably tightening as we speak. And this time is it's a little more concerning. We have an AI bubble. So a stock market bubble and a housing problem. Um the good news is it's not as the housing uh problem is not as bad as it was in uh 2008. Uh uh the consumer is not as leveraged as they were back then. I think the banks will be able to manage it, but there's going to be a deep recession. I don't think it goes systemic. There's going to be, you know, big scares. Uh, so we're not calling for a systemic issue where we're going to need, you know, massive bank bailouts, but there's going to be a lot of pain. And, you know, we didn't have a systemic issue in the dot bubble and the stock market went down 50%. So, you know, we're projecting a 40 to 50% draw down at some point in the stock market and uh, you know, it's not the end of the world. And the people that I've been talking to um that I consult with um I just recommend to them, you know, have dry powder in your portfolio and take advantage of the opportunities. It'll mitigate you on the downside and uh and and and then when you reinvest and the key is reinvesting and you know, timing isn't perfect, but if stocks are down 50%, I'd start deploying, you know, the cash you built up again. And that's what Warren Buffett's going to do. Warren Buffet like us was was we were early on this because we were wrong about the the illegal illegal immigration really kind of distorting the economy. So we were off on our recession call. Warren Buffett was as well. He's got he's been he's been accumulating cash for 2 years and he's ready. So the key is the storm's coming. Step to the sidelines a little bit. Don't panic and then go back in. >> The sponsor of today's episode is Arc Silver Gold Osmium. Owner Ian Everard is praised even by his competitors as one of the most honest and level-headed bullion dealers in the United States. They have some great prices. You can see some of them displayed right now on screen. Take advantage of these specials today by reaching out to Ian at 3072649441 or by email at ianarchcsggo.com. Make sure to tell him of course that commodity culture sent you. And now back to the interview. That's a really interesting analysis because that leads into my next question which was how long do you think this draw down could last for? Because I've spoken to some people such as Dave Colum who thinks we could be in for a decade plus of the market grinding sideways after a massive correction before we see the previous highs again. And of course the strategy of so many has been to simply dollar cost average into an index fund. People almost treat it like a glorified savings account. Just keep putting money into the S&P index. Is is that still a viable strategy in the long term? Do you think ultimately the broad market recovers out of this in a reasonable time frame? >> Well, if you if you have a draw down of 50%. And and there's going to be bargains everywhere. And if you're especially a retired individual and there's like a a blue chip stock that has a fat dividend yield because of a dislocation, you buy it because you're going to get income from and don't get too concerned about the market. Now, I do think after this dislocation unwinds, it's going to take a long long very long time to go back to new new all-time highs. Um, but if you buy right and you're getting income off the stocks, you shouldn't worry too much about the sideways move for the next 10 years. Now, if you buy, you know, in a sideways move at the top, right before it goes down again, which is what a lot of people do. A lot of people will sell at the bottom um uh of of this cycle, not get back in because they're anchored to the fact that they just sold and then they'll the market will go up for a year or two and uh uh they'll probably buy at the top of that and then it'll it'll you know go down again. It'll be like the Japanese stock market sideways for a while. But, you know, it it's going to be great for fundamental investors and traders. Bull markets make everyone a genius and that's why indexing and passive investing investing has taken over. Um you know there was a passive investing uh trend that was going on during the uh the Nifty50 in the 70s. Um and so let if we go into a market that is um more sideways that can actually make uh you know people who uh are fundamental investors attract more assets. the ETF companies of the world will start to lose share because you know you know in a bull market passive is the way to go and there's going to be a lot of problems if we're if we're going to a 10-year sideways decade market uh a lot of trends that you know that that have been going on are going to unwind and the Larry Finins and the vanguards and the state streets of the world are going to probably lose flow over time. There's been a lot of mixed discussion on the state of the Chinese economy from it's on the verge of collapse to they are destroying the US and will soon be the global superpower. What makes you think we're entering the acute phase of a crisis in the country and what will the implications of the contagion effects of this crisis be? So it's important to understand China is um a net creditor nation. That means they you know they have a lot of reserves. So they can fund this crisis internally and they're not going to be subject to the whims of the uh foreign investors like a lot like like like in Thailand there was the the Asian contagion crisis where a lot of capital went into Thailand then there was a problem and then the capital was pulled up. China can manage this, but it's going to have global contagion effects because what's been going on is they hit a demographic uh plateau in 2015. Uh and then it went sideways. Then it started to roll over in 2020 and it's accelerating into 2032 and they're going to lose 150 million prime prime age working people which changes the whole dynamic of how you spend. And so their economy uh we did we put out some great reports uh an institutional class report and then a ret a cheaper price retail version. Um and we show basically that China's GDP priced in dollars uh was 80% uh of the US GDP in 2019. Since 2020 it's gone to six priced in US dollars its GDP is 60%. uh they've had since the real estate bubble burst in 2020 um it's been a slow grind lower and so to compensate for that they started massive exporting so they they they try to export their way out of this this this problem and that is that has worked to some degree uh but uh you know we now have trade wars so that's a problem second problem is um housing permits are down 70% from the peak what's more alarming is that a lot of these projects s were long live projects and so construction is only down 20%. Construction new construction contracts peaked uh last year and they're accelerating lower into this year. So that's why we think we're going into the key phase. Um their internal economy is having deep deep problems and if you look at their latest GDP number it was four and a half% in the fourth quarter. that was the the slowest GP G GDP growth for them in the last three years. Then there's other metrics like uh net fixed investment. Um that number is now year-over-year below zero. The year-over-year growth rate on a monthly basis is below zero. It's never been below zero except briefly during COVID if you look back at the last 30 years. So they've never seen this. Then additionally, we looked at uh electricity consumption. uh that growth is about to cross over into zero. Uh so there there's something definitely going on in China and we're not so you know is China going to collapse? No, China you know it's not going to collapse but it's going to be very bad there and that's going to have a you know that's going to and their internal consumption is going to drop. That's going to affect their trading partners like Japan uh you know South Korea others in the area. I said it's going to be this um contagion effect and there's going to be you know a lot of problems uh and uh it's just going to add you know you have you have the housing crisis in the US the stock bubble then you have China all three of those are are all bearing down this year and make for a cocktail of um you know slowing global economic growth and again I think the bond markets are starting the US bond market is starting to sniff this out and the Fed is woefully too tight and they're going to be uh chasing this down once it gets going. Um, you know, we're one we're we're 1% too high. Neutral would be 100 basis points lower. And of course, they they'll overshoot neutral. They'll go below neutral. >> And would you be staying away from Chinese equities at present? Because the there's a lot of people pointing out that they seem to be very undervalued here or are they cheap for a reason in your view? >> They're cheap for a reason. And I think I I haven't looked at Chinese equity stock charts, but I think they've had a rally recently. And that, you know, they were already in the tank a couple years ago. I think they've had a nice rally and I, you know, I think it's just like, you know, probably, you know, like what happened to Japan, their Japan 2.0, it'll peak, the rally will peak out and then it'll go, you know, it's it's in the sideways market and uh I wouldn't I wouldn't be buying Chinese equities here. Um they're they're Japan 2.0. So, Japan ran into a sim similar demographic headwind in in the 90s and you know there's a lot of calls and a lot of you know people always are anchored in in in the past and people there's a lot of people out there say China's won China's taken over the world well the numbers suggest otherwise China's in trouble and they have a demographic problem just like I remember in the mid90s uh Japan was entering a demographic problem and everyone said Japan was going to take over the world I was in business school in 1995 and we had um you know a project in in in we had a project where we had to do team building exercises and make presentations and the topic was is Japan going to take overtake the US and we were the only team that said no we got an A because we had a lot of good evidence but the professor didn't agree with us and it was because everyone was looking at you know the data in the rears and we were the only ones that looked at demographics and we said demographics are destiny and that ended up being true, you know, after, you know, around 95, I mean, they really peaked in '89, but it became apparent to everyone that entered the lost decades of deflation. And China's going through the same thing. Just to give you some numbers, I mean, so they uh in 2020, they had 900 million uh in peak peak age working workforce. By 2032, that's going to drop 150 million. So that's a that's a half a US, you know, and they they're aging and they're not and their birth rates aren't and they have, you know, they're not they don't have enough people to support, you know, the elderly. Uh they they don't have a safety net in China. So that's it's it's even worse because they don't have a consumer spending engine. So a lot of people once they they leave their job, they've saved up their money, they go into like conservation mode. Um and they're they're not they're not they're not going to retirement homes. there. You know that it's a whole different dynamic. There's no safety net in China. >> Since the last time we spoke, we've seen an incredible run in the precious metals, especially silver, with it closing at an all-time high of around $1717 near the end of January before collapsing 26% in a single trading day. Now, steadily creeping back to triple digits. We're at around $93 the last time I checked today. What do you think has driven this price action in silver? And do you expect it to reach new all-time highs this year? >> Good question. Um, so silver finally played a catch-up with gold. I mean, you know, people had had been screaming for a year about the silver gold ratio and it finally it finally happened. Um, and I I think long-term uh, gold and silver are going to grind higher. Uh, you know, primarily because there's we do all everybody under the sun thinks a new monetary system's coming at some point. and watch what they do, not what they say. And every central bank is accumulating gold. Every commercial bank in the US is now accumulating physical gold because they made a tier one capital. Uh, China's accumulating gold because they have to depreciate their currency to keep selling into the, you know, global markets. Um, uh, India keeps buying gold. So, gold, gold, gold. So there's a and also we have a you know we all know there's a global sovereign debt problem and people uh as we roll through time and the deficits get bigger and and and the demographics get worse more and more people want an asset that's not someone else's liability which is gold. So gold is I think got long-term fundamentals that are great. That's that's that's strategic tactical. It's a little more problematic. So, you know, if you look at the charts of gold and silver, they had they've had tremendous moves going up into this part of the cycle, much like gold did going into the great financial financial crisis. Uh I don't want to predict what gold's going to do. But uh if there is a uh you know a general riskoff trade, gold and silver may participate in that because as people unwind leveraged bets and and and have to sell what they can not what they what they can not what they want to you it might take a hit like it did in the financial crisis. But I want people to understand in the great financial crisis gold went down quite a bit in in the Leman event. And again we we're not calling one. um it it did recover and go to new all-time highs more uh quickly than the US stock market. So I suspect if there is a pullback in gold or silver, it's a good buying opportunity. Um my best guess is that you know we consolidate uh sideways for a little bit uh and then that's what I'd like to see. That's a that would be a healthy thing technically to see some consolidation and then another runup. Um, if we see a parabolic move in gold and silver soon, that would really scare me. Uh, that means something something's really gone off the wheels behind the scenes in the in the in in in the uh global banking system. And then, you know, usually a parabolic blowoff top means you you don't want to be chasing it if it happens. But I long term, I love gold and silver and I'd love to see it consolidate, you know, for a year or so. But and if there's any kind of major sell-off, I would accumulate some on dips, physical that is, not not the ETF. >> And how do you view silver versus gold? Obviously, silver having much more of an industrial component. Do you see it as a more speculative asset in the long run? Because obviously there's all sorts of narratives out there about shortages in the silver market. According to the silver institute, we're in our sixth year of a supply deficit in the silver market. Indust industrial demand obviously very strong. People point to solar panels as one of the main drivers. I I don't really see that because I don't think solar is going to, you know, dominate the world like people thinks it is. But nonetheless, it's used in so much industry. So, how do you do you see it as more speculative whereas whereas gold is more of a monetary asset, silver is more of a industrial what how do you see that? >> Yeah, if if you look historically at the math, uh silver is more volatile than gold and it does have um a correlation to economic cycles. So if there is a if there if our colony economy is right and industrial demand drops uh go silver will get hit harder than gold and it and that's just the way it is. It's always been that way. Um so you know I'm not I'm a I'm a gold guy because it's going to be part of the new the new and silver may be part of the new monetary system but I definitely know gold is and uh and so gold is more volatile. I mean, s excuse me, silver is more more volatile. It's got higher beta, and that's just the way it is. So, if if you don't, if you can stomach the volatility, you can make tremendous amounts of alpha if you can, you know, weather the storm and you're not leveraged. And if you're just a physical buyer and you're just stacking it because you're young and you're you want to retire and it's part of your total portfolio, again, don't ever put all your eggs in one basket. And I've been recommending to people 5 to 10% of your total net worth in physical uh you know precious metals. But you know if you're if you're a long-term holder, you don't want to get scared out of this stuff. Um it's it's it's not worth trading it in my humble opinion. I mean if you're a trader you can use you can use the ETFs if you're a day trader but again and don't use don't use futures. futures. I mean, that's there were a lot of specs in gold and silver that got blown out when the CME because they can play games. They can increase the margin requirements and then you're blown out. And that that's how they that's how they that's how they manipulated silver lower. It was blowing up the silver uh futures longs, but long-term silver prices are going higher. >> And do you have any thoughts on the gold and silver mining equities and just the commodities complex in general? I know you're bearish on oil moving forward. We've discussed that before before, but are there any other commodities outside of gold and silver that you think will perform well after this kind of broad market bubble bursts? >> Well, we have to see. So, basically uh our economic call commodities won't do well temporarily. Uh and uh so we're we're we're bearish on that. There there are some commodities that are doing better than others like copper. That's because China is hoarding. China has so much uh money supply they're just acquiring real assets because they're going to depreciate their currency. So there's some hoarding going on. Um but when you really need to see we have a globally we have a demographic problem. So that that that that suggests less demand for commodities in general. However, if the authorities in this next downturn respond with unprecedented mon monetary printing, we could have a commodity cycle. So uh I'm you know our call on commodities is like to be determined once we see what the response is at you know once this unfolds >> gold and silver miners and any thoughts on that sector? Oh yeah. So the gold and silver miners they're they're at the end of the day they're equity. So if the equity markets are going to have a general draw down they will participate. They may outperform on a relative basis so you might lose less money. Um but and if you look at the charts of a lot of these stocks that they've been fantastic already uh which you know I don't like to buy charts that look like this. Uh I like pullbacks, but you may get your pullback in in an equity draw down and then longer term uh the the fundamentals are good and I think I think the silver and gold miners will probably do well on the other side of any kind of equity draw down. >> Well, let's get into government corruption. I want to discuss the Epstein files here for a moment and ask the question, what surprised you the most about the files so far? What suspicions have they confirmed? and what impact do you think they will have on the future of politics worldwide? >> You know, I was very suspicious um in 2020 and 2021 of what was going on globally with the co the COVID pandemic vaccine coordination and messaging. And lo and behold, we we find out in the Epstein files that Bill Gates and Epstein and others were uh talking exactly about this, you know, how to profit off of a pandemic. And so, you know, that that angle needs to be really super investigated. Bill Gates needs to be deposed by someone. You know, I always suspected there was there was something. I mean, to me it, you know, intuitively I thought that, but I couldn't say it publicly. I could I could hint around it. But now we have some some real hard evidence that this was a plan. Uh, I mean it it boggles the mind uh that that these super national hidden operations can could coordinate this and and what we're learning from the Epson files is that it's an op it's an operating system. So we have the public facing you know institutions but we find out there's a layer of people above them that know how to manipulate that whole thing to their benefit through comprom and blackmail. and and and and uh and and uh and money laundering. Let's not forget Epstein was involved in moneyaundering. That's that's how a lot of this stuff was. It's all dark money. Uh and the other thing that surprised me that I didn't this angle I didn't think of and I you know again we'll find out more but Bitcoin uh has been tied to Jeffrey Epstein and he's been involved in uh you know taking over the network and funding it. I don't know what you think of that. And you know, intuitively makes sense. If you wanted to uh you know, um set up your own um dark money blackmail operation and launder money, Bitcoin would be the perfect way to do it, I guess. So, you know, there's a lot that's being revealed. And I don't, you know, I don't know what that means for Bitcoin long term, but um it certainly kind of disrupts the narrative that Bitcoin is freedom. I mean, that was kind of one of the narratives that we were hearing. And I've never been a Bitcoin um bear or bull. I've always said it's a it's a proxy for NASDAQ and liquidity trade. You know, you know, buyer beware. It's not a store of wealth. It's very volatile. So that's what it's always been to me is a volatile, you know, 95% correlated asset to the NASDAQ. It seems the Trump administration is doing whatever they can to distract from the Epstein files and bury the truth, including the fact that Secretary of Commerce Howard Lutnik has repeatedly lied about his relationship with Epstein and yet remains in his position somehow. Uh you wrote on X, Howard caught lying about relationship to Epstein from Epstein files and his firm profiting from adverse tariffs ruling. If this guy remains, it's telling and not in a good way. So why do you think this administration wants to bury the files and keep such absolutely corrupt individuals as Lutnik on board who as you mentioned has also set up his family to profit from the Supreme Court's tariff ruling. >> Yeah, let's talk about the profiting. There were some news stories that came out uh about that. Uh so when I wrote that post, that's what I was referring to. Then they came out uh they they came out and adamantly Canford Gerald came out and adamantly denied that. Okay, that's fine. But I read I read the press release and they they they use the word execute and that if you're an agent and uh you're facilitating you're and acting as a broker or an agent that doesn't necessarily mean you execute the trade you just get a commission. So I you know they denied it but I the the the legal ease with which they use the term we didn't did not execute or take any proprietary positions. That may all be true. They didn't they didn't legally execute a trade. They didn't take a position, but they may have they may have profited from, you know, setting up these trades. We don't know, but that, you know, that that needs to be cleared up. So, but it what we do have Howard on dead rights is his absolute utter lie about his relationship with Epstein. I mean, he just he got on I think it was 60 Minutes, I believe, said X Y Z. Then the Epstein files reveal a whole plethora of uh, you know, business relationships. He supposedly bought his mansion next door to uh Epstein for $10. His sister's involved. He actually went to Epstein Island. So, he's caught dead to rights lying on that. So, the the the the firm profiting is less clear. Needs to still be investigated, but he's caught dead to rights. And, you know, I don't know about you, but uh you know, I'm tired of people getting away with nonsense and lying their asses off. And you know, the Trump administration just needs to be better. And uh you know the other problem I have is uh you know the uh Epstein files were you know not you know they indicted a lot of Democrats as well. So the Democrats look awful here but you know it was obviously not good good news for Howard Lutnick and some other high-profile Republicans. Let's let's not forget Howard Lutnick was a Democrat and he's kind of switch sides. Um then of course we drop the alien nonsense. you know, all of a sudden, you know, we're going to have alien disclosure. They're interdimensional beings and yada yada yada. I I'm sorry. That's just that's just too much. >> Yeah, that's interesting because well, f first of all, one comment I want to make about Letic go to Epstein. For some reason, he made a point of saying with all of my children like that somehow changes things. I just I I don't know what that was. Whether he was trying to say it was innocent because I was with my children. It's still a total lie. Now, I I want to follow up on the biggest distraction of all, which is the aliens angle. As you mentioned, you also noted on X that unless the aliens are going to lower the cost of living and give people jobs, this tactic is not going to work. Is this desperation? Are the aliens real? And what, if anything, would releasing classified documents on extraterrestrial life accomplish at this point? I think people want to see the predators in the Epstein files prosecuted more than anything. I I don't see any distraction that's going to work at this point. But hey, the news cycle moves quickly. People are easily distracted. Maybe I'm wrong. What's your take? >> Yeah, I you know, I I I personally believe uh one of the biggest frustrations and the polling numbers reflect this. Uh one of the biggest frustrations with the Trump administration, just I'm not talking about myself or you I'm talking polling. uh is accountability and and immigration and he's um he kind of pulled a 180 on immigration recently. He's you know deportations of only criminals which you know is a dimminimous amount of people. Um so he's walked back his promise there and the accountability there's no one that's been held to account from COVID uh from Russia gate from lawfare gate. I mean, no one has been held to account for any of the crimes that we've seen. And now we have the And then throw the Epstein files on top of that. No accountability. Um, I think people are being uh slowly blackpilled and giving up hope, which I don't think people should do, but that's what's going on. And the Trump administration now knows they're in trouble because the polls are are disastrous. They're going to lose the midterms unless they do something. Um, and the aliens isn't going to the aliens angle isn't going to save him. Let's just say that. I mean, again, you know, first of all, what Donald when Donald Trump says he's going to disclose the alien files, you know, if you dig a little deeper, there's a whole bureaucracy built around secrecy, they won't let him do much of anything. Uh, so that we're not going to whatever does come out, it's got it's not going to be much. So, it it seems to me this was a big big distraction. Get gets a lot of the UFO people excited and and whatnot. You know, the thing to watch for is look, I I I I kind of I' I've talked about the the money uh the debt based fiat system and it needs bigger and bigger credit growth and uh you know, excuses to grow to up the size of the credit growth and co was a perfect excuse that saved the uh global economy in 2019. was clearly rolling over. We were having uh plumbing issues and then we voila co came and we had basically war unprecedented uh money printing and deficit spending. It was a it was warlike spending and that kicked the can down the road and here we are again and it's probably going to unwind. Um and the only thing that really saves the credit creation if if you're trying to prevent the cycle from you know completing and that that's what bankers want to do. They don't want ever want to take losses. Um, you need a war uh or you need uh I jokingly said a couple years ago, fake alien invasion to justify the uh amount of spending to keep this thing going. And sure enough, the aliens are showing up again. I don't know if that's the the reason why, but they're definitely being used as a distraction. A definite distraction. >> Well, Edward, tell us about finance technologies and anywhere you'd like to direct people online who want to follow your work. Yeah. So, financiest technologies.com with a PH instead of an F. We have all our US economic reports, China report, we have some uh real estate reports. Um, you can you can buy uh packages or one-offs, whatever you want. We also um have uh email that you can sign up to, get a get, you know, subscribe to Finance Technologies website. Um, I also have a personal website eddow.com and I'm found on xdowedward and uh I post frequently and um you know there's just a lot going on and uh I think I you know I'm more confident this year that we're going to see something start to unwind. >> Great. Well, I'm going to put links to everything you mentioned in the description below for people who want to check that out. As always, great having you on, Edward. Thank you so much. >> Thanks, Jesse. Great to be here. Thank you for joining us today. Our sponsor Ark Silver Gold. OSM has some great specials on gold and silver bullion products. They are on your screen right now. These are well supplies last and subject to change. So reach out to owner Ian Everard today at 3072649441 or by email at ianarchsggo.com and make sure to tell him that commodity culture sent you. and represent sound money in style with the exclusive stack silver not fiat t-shirt available at the commodity culture shop using the link in the description below and I'll see you guys in the next episode. Commodity culture is a series on commodities and natural resources. If you would like to see more, be sure to subscribe and hit the bell notification so you're always up tod date with the latest episodes.