'Everything Is Getting Hit': Next Is 2008, 9/11 For Stocks, Oil, Bitcoin | Mike McGlone
Summary
Macro Outlook: Guest forecasts a global recession catalyzed by an energy shock and equities rolling over, with volatility set to rise materially.
Crude Oil: Expects a classic pump-then-dump, calling for WTI/Brent to trend toward $40–$50 by year-end as supply rises and demand weakens post-crisis.
Energy Crisis: The Strait of Hormuz closure triggered a temporary price spike, but resolution and Western Hemisphere supply growth should normalize prices and undercut inflation.
Industrial Metals: Notes sharp reversals in copper and silver, framing them as cyclicals tied to recession risk with “pump then dump” dynamics.
Gold: Turns decisively bearish, citing elevated volatility and positioning; calls for a gold bear market with potential downside after a parabolic move.
Bitcoin: Projects a bitcoin bear market, viewing ETF-driven euphoria as a peak signal and setting downside markers well below current levels.
Bonds: Favors long bonds (U.S. Treasuries) as the year’s best alpha opportunity amid tightening financial conditions and equity drawdown risk.
Policy & Risks: Warns that rate hikes into an oil shock could accelerate recession, echoing 2008/2002 playbooks, with broad risk assets vulnerable.
Transcript
The economy is going to recession. The number one reason to go into a recession is the stock market going down. That is the economy now. Like this is the beginning of the third 50% draw down in the S&P 500 since 2000. We I think this is the year I finally get to my $40 barrel call in crude oil. I'm not a fan of gold. I think initially goes to 4,000. That I haven't said that in decades. I fully expect silver to go back to near 50 and gold initially to buy to drop down to 4,000. I still think Bitcoin is going to head towards 10,000. Stock markets are extending their four-week selloff today on Friday, March 20th, with the Dow Jones at yet another year-to-ate low. The S&P 500 is down nearly 1% intraday as of around 12 p.m. Eastern time. The NASDAQ is down 1.5%. Gold is back down towards $4,500 and Bitcoin is up to $69,500 and WTI crude oil remains at 96. This is the trigger for a major serious recession this year that's going to bring markets much lower from here. According to our next guest, Mike Mclo, senior commodity strategist at Bloomberg Intelligence, we're going to be getting Mike's outlook on all of these assets and what the Fed is going to do next. This video was sponsored by Koshi. It is a fully regulated platform that lets you trade on real world events from economic data to political outcomes. Sign up and use my code lin link in the description down below or scan the QR code here. New users will get $10 deposited to your account when you trade $10. Traders can put money down on their favorite teams, events, elections, and more in all 50 states, including California and Texas in over 140 countries. Mike, welcome back to the show. Now, the Straight of Hormuz closure probably didn't come as a surprise to a lot of people after the Iran strikes happened on the 28th of February, but not everybody anticipated those strikes to begin with. So, it's understandable that risk assets sold off after the war began. But, it's been almost 4 weeks now. So why are equities and gold which we'll talk about still selling off today Mike? >> Well the most important thing I think as a trader investor and a strategist admit where you're wrong first own it and move on. And I did not expect that the industry would close. We fully expected the attack. I mean most of it the there was an armada around Iran that was just going to happen. It's a question of time. The market had priced for it. Crude oil was up 20 to 30% on the year pricing for that. Um gold was rallying. Everything was pricing for it. The key thing that happened was I fully expect this to be quick and the US military had would had would had planned for maybe almost five decades would not allow the straight horses to be closed. Major mistake. It is closed. So now where do we move now and that's where we where we are. This is the biggest shock for the market and it has it has inklings of 2008 911 before that and 2022 with Russians invasion of Ukraine. And I've been just kind of kneeling towards what um this means. And so I fully expect it's going to be resolved soon. Uh maybe even this weekend because I think what's happening is now is what's Yeah. And the US military and Iran, Israel militaries and their you know what's underestimate their uh intelligence services have messed up a little bit, but they're just going to I think keep pounding and pounding until Iran no longer has offensive capabilities. Now we might see that by the end of this weekend. It's already kind of showing up a little bit in crude oil. You look at WTI crude oil. Last week it closed at 98 as we speak on Friday, March 20th, you know, or about midday. It's actually down on the week. Part of that is the flip in contracts. You went from that April contract with which still open, but it was it's basically done down to the May which is a 96 at the as we speak. But that's part of the burden of crude oil. It has to to be higher. It has to ride up the curve. And I have to look out, you know, in in commodities, we like to say we like to skate where the puck's going. If you go to that December contract, which is the most significant on the planet, partly because it's front month right before the midterm elections, it's running around 7778 a barrel. It's going to be front month right before midterms. I fully expect it to go towards 50. Trump needs it to go to 50 and it's a question, what's he going to do to make it go there? So, right now, we're in that fog of war. We have a long weekend coming up, but what's happening today is so significant in partly from when you're seeing things like collapsing gold. I look at gold as looking ahead to a more secure world when we say that straight of home was is secure and Iran no longer has offensive capabilities to to distress shipping there. To me, that's what's happening. But everything's getting hit and I think that part of the reason is this is one of the best catalysts I've ever seen for it's an energy crisis for a global recession. Now, you're seeing that in the industrial metals. Copper was up 15% on the year. Now, it's down almost 7%. Silver was up 63% on the year and now it's down a couple percents. You see the bent there? Silver's an industrial metal. Copper is an industrial metal and Bitcoin is, you know, was already down 20% on the year. So to me, this is the year. And so I'll end with the key thing I've gotten wrong so far, but I fully expect to pick up is on the year I pointed out some of those things are tilting over, but 60-day volatility on the S&P 500 as of yesterday was down 10% on the year. To me, that's a shocker. That happened in 2008 and the first quarter 60-day I'm sorry first half 60-day volatility at the end the first half was actually down and then we saw what happened. So to me this is an accident just getting started. I mean it's a great tactically trading year but I think for the key thing now is can we avoid all this volatility from trickling over to the stock market. I think that's just getting started which brings everything down at least for now. >> The stock market's been rolling over for four weeks in a row now Mike. So take a look at my screen. Uh this is the S&P 500 and uh as you can see it topped around uh end of January and it started rolling over even before the Iran strike happened. And so maybe I'm not going to say it was telegraphing the Iran war. I'm not going to say that. But why was it why was it already falling basically is is my question. It went up too much. To me that's a key thing is theme is the stock market bullishness at the beginning of this year end of last year was bas most extreme I've seen certain to near similar peaks in 2000 and 2007. Um and the key thing is it had a good reason. All the indications were it was going to go down. First of all gold warned us about what's happening now. Gold's parabolic rally to me was I wanted to take take a look back at it from the future. It's going to mean something. Now we know it's meaning something. Now we're giving that back. But also you look at what's happened in cryptos. They're a great leading indicator. They've collapsed. They're down. Bitcoin is still down 20% on the year. The Bloomberg Galaxy crypto indexes rolled over. But what you showed in that chart is a nice rollover pattern. I started seeing that last year when I saw Micro Strategy getting too expensive. It started rolling over and then Bitcoin and all cryptos starting rolling over and now the stock market's just following it. And the key question is where's it stopped? To me, this is just getting started. We're definitely going to see some relief shortcoming rallies and that's what we've seen so far this month in Bitcoin is a shortcoming rally. So everything's linked. No, that's the problem is I I look at you know people who I here's one thing I like to end with on the year so far. Co copper was up for a while 15%. And right now it's down about 5% which is almost exactly matching the S&P 500. See the problem? They're all the same trade right now. >> So this is from Kosi. It's a prediction market. How high will oil WTI oil get by the end of the year specifically? So, uh traders are predicting a overwhelming chance 90% 89% chance that oil will end the year above $100. And if you scroll further down, even at above $125, you're still above a 50% chance. Now, a couple things here. We're going to get to your deflationary outlook and uh revisit that call. See if you're still um you know uh thinking about that um as a narrative. Uh but also I've heard some economists say that even if the street of Hormuz were reopened tomorrow, even if let's say the war ends tomorrow, the disruption to the supply chain has already been done. It's going to take several months to recover. Ships are now rerouting to all over the place and uh it's going to be expensive to just go back to normal right away. And um it's not just oil that's being disrupted, by the way. all sorts of cargo that runs through the straight and by the mostly it's Asia and Europe that's affected. Uh so you know can you just comment on on these odds here? >> Sold to you for crude oil to be that high by the end of the year we have to first thing has to be stated it's different this time. Crude oil right now is is kicking over to a global energy crisis and recession. The last good example of that we had a little bit 2022. The high was 130 and the low this year was 55. We had the high peak in 2008 at 147 and the low that year was 32. I see parallels. So I'll make my call right now. By the end of the year, by the time we get the elections, crude oil is going to be closer to 50. That's that front month contract right now. The December contract, which will be front month in a few, you know, by by the time we get to those elections is 77. And for that to happen, that scenario towards $129 a barrel, that's a global recession. That means the whole the Republicans get absolutely crushed. Trump's legacies is ruined means the whole Middle East is a major problem. The middle the horra is still closed and please don't people always underestimate human ingenuity. The last time we had a similar pump like this in 2002 in China maybe your average EV sales are 10% or so another 65%. These kind of things spark you spark that bring on of that supply of crude oil which is happening in the US massively on the whole western hemisphere. it it crushes demand and then it brings out alternatives. So, I'm going to say here, I'll make my call. I think this is the year I finally get to my $40 barrel call in crude oil. Probably on the back of one key thing, just a middle of recovery in US stock market volatility. So, right now we're in the in the the fog of war. This is um that scenario is basically expects the US and Israeli forces and they're increasing some of their allies because Iran has been reaching out and pissing off some of its neighbors. It fully expects them to completely fail and basically mentions that Iran's probably going to be controlled the straight. I think within a few weeks the US is going to pound them hard enough to say they don't have the offensive capabilities. That was a major mistake that they closed it but we'll be opening that straight. this will be reset and then the thing is we already set heading just like a 2000 in 2001 2000 we got 2001 we got 911 we're already tilting lower in the market that event happened and the whole world heading towards a recession on the back of one key thing stock market went down so I have to end with this this event has happened with US stock market about 2.3 times GDP and in 2007 before the last big pump before we peaked in curo it was 1.2 two times GDP. Also, 180day volatility in the stock market is still running near a 10-year low. Well, just starting to revert. Also, we were warned about this last year by gold. So, yeah, I'd love to take the other side of that trade. And what's what's make sure we check in by the year if I'm wrong on that. This is going to be I already think it's going to be a great trading year, but that's a pretty severe global depression, that kind of crill price by the end of the year. >> $50 or even $40 uh dollars a barrel. So, yeah, that is going to be on the back of some sort of recession. Is that is that going to be triggered by ironically high oil prices right now? >> Yeah, exactly. So, let's put it this way. Uh, it did it in 2008. It's natural gas has already done it. Natural gas was up 100% on the year. That's a front contract. Now, the front contract is down 16%. Uh, silver has already done it. It was up 63% on the year and now it's down 3%. Gold was up what, a third on the year, now it's up 5%. Copper was up 15% on the year. Now, you see the tilt in commodities, pumps then dumps. Right now, it's crude oil's turn. But here's the difference. In 2008, that when when the average price of gasoline reached $4 a gallon, that's when I just laid in the shorts. I was trading. I don't trade anymore and made a decent amount of money and shorts in the stock market and everything, but it was up 53% to get to that. Our high so far this year to get to that high of 120 was up 108%. It's double what we did in 2008. And that triggered that accelerated that great recession. So don't ever underestimate crude oil is the greatest. It's its own worst enemy. It pumps, it brings on supply, curtails demand, tilts the world um towards global recessions, and then dumps. That's the scenario I think we're going to have this year. The key thing is this straight's going to be cleared up. Bra is probably going to collapse at some point. We're going to have a re relief rally in risk assets, and then they're going to look over and say, "Oh, look how expensive we were. Now we have this you a more secure world, but before this was happening, we found out expensive the stock market were." consumer sentiment was waning. What's going to happen now? The consumer sentiment and then we have to tilt over back to yeah AI really created this massive pump in in uh stock market valuations. Now everybody's losing worried about losing their jobs through AI. It's just to me this is a classic cycle. I think this year is going to make and break careers. I mean my suggestion is to still hide in treasuries and look for levels to sell. So the key levels I've been using is Bitcoin initially was around 100. It got to 96. Now it's down at 70. Okay, that's a little bit lower. Copper above six to me was a key short. Um $6 a pound. Silver above 100 to me was a key short. Still is. Crude oil. Now, I think that high of 120 is going to last for a long time. And even the bond yields, that's the key thing that's kicking it out. Treasury bond yields, that long bond right now as we speak is 495. The high for the year is 5%. Has been unable to go above 5%. It might get there again, but that's the lose-lose. If that goes up, everything goes down. And I fully expect by the end of the year the best trade this year I still stick with it is I think was going to grab alpha this year is the long bond. I f see this as a combination of 911, 2008 and 2022 all together and the big differences is stock market as of a few months ago on a year- end basis was the most expensive since 1928 versus GDP >> combination of 2008 2002 >> and um >> 911 >> and all right I'm going to come back to that call uh I I I I want to play for you this clip uh the reporter asked POW at the latest FOMC meeting earlier this week about oil and its impact on Fed policy. Take a listen and I'll get your take. >> There's been some debate about whether the Fed should look through the inflation that will come from higher oil prices stemming from the Middle East conflict. Is that the right approach at this juncture? And to what extent does the fact that inflation has been above target for roughly 5 years now influence the committee's thinking around this? So, uh, first let me say we're well aware of, um, the performance of inflation over the last few years and how a series of shocks have have interrupted progress that we've made over time and, uh, that happened most recently with tariffs and then and now there will be some effects on inflation coming forward. Um the the thing that's really important that we see this year is progress uh on inflation through a reduction in goods inflation as the one-time effects on prices of tariffs go through the system, go through the economy. That's the main thing we're looking for going into this exercise. And we need to be seeing that uh to you know to sort of understand that we actually are making progress because on net we didn't make progress. And if you look at total inflation, sorry, total core inflation, it's about 3%. And some big chunk of that between a half and 3/4 is actually tariffs. So is he trying to say that oil is going to have a rollover effect or spillover effect on other commodities uh and and other assets here? What what's he trying to say? >> He doesn't know. >> Okay. >> He doesn't know. And I want if I can I'd love to share a screen or I can just go ahead. in in um as I as I shared in 2008 I just remember trading it well CPI peaked right about here as the things were collapsing at 5.6%. That's when crude oil reached $147 a barrel and the Fed had already started easing. The Fed just stayed stable right about 2%. Uh actually the Fed funds was closer to um yeah but this year now we're hovering below 2.4%. 4% it might spike above 3% but this is well when rates are higher and the stock market cap the GDP is double what it was then back then it was like 1.2 times now it's 2.3 times 2.1 no 2.2 two times. So to me, this is a scenario that's going to make 2008 look like stuff um compared to what's happening because we're just so stretched. But right now, as we speak, the Fed has just started, the market has just started to inkling for the first time I've seen in years potentially priced for hikes, which is you're seeing it on the screens. Everything's getting hit. To me, that's an oxymoron. You don't hike in this environment. You wait it out. And back last in 2008 was an example. We just see that flatline. That's is Fed funds. They waited it out and then bam, everything collapsed. So, we probably see a we're going to see a a jump in CPI from this. You know, it's hovering below 3%. It hasn't been able to get three above 3%. Yeah, core is high, but I fully expect this number to be close to to zero by this year, if not next year. And it's not profound to say that because all it needs is a little pick up in stock market volatility, normal reversion commodities already happened. I pointed out all the ones that have gone from major pumps to dumps and um it's done it before. So we did we were about 2% in 2020. We dropped below 2000 2 I'm sorry 0% in 2015 and we bought at minus 2% in 2009. This is a similar trajectory. So this is just it's and it's only March David. So this is just getting started. And the bottom line for this um the Fed to ease for inflation to go down and for this to just have a normal pump then dump is the stock market just gosh help us if we have a 20 10 to 20% correction. Right now we're down 5% on the year. >> Isn't that exactly what happened with the ECB in uh 2008? Uh they actually raised rates. If you take a look at um if you take a look at my screen, I'll just show you real quickly here. This is the uh ECB deposit facility rate for the Euro area. Uh in 2008, right before the Leman collapse, >> they raised rates once >> and that was because oil has been going up like you showed in the chart all throughout that summer and the inflation reading in Euro uh in the Euro area stayed hot. I just remember >> Yeah, please go ahead. >> I remember that so well because I was started getting bearish at the end of 2006. I had a rough year trading 2007 and obviously did very well in 2008. Just I thought I was just hedging my life and my home and everything because I saw it coming. Volatility was too low. But that was one of my triggers. Spike in oil prices, ECB hiking, Fed figured it out, but that was just dumb. That's one one good way to accelerate a recession when you already have kind of a oil shock is to hike rates and they're already starting to price for hikes in Europe. So this is a this is the big one and it does it's not really profound to say that at all David when I point out two things. Last year we had the best year for gold since 1979. Let's make looking a little more profound right now. And we have the highest most expensive stock market versus GDP in I mentioned in almost 100 years and stock market volatility is still low and Bitcoin's collapsing. It's all telling you that this is going to happen. Just button down and act accordingly >> there. I I bring up the ECB because that's exactly what the Fed is contemplating right now. Recall the FOMC conference. There's been several questions asked about the possibility of a hike of a rate hike this year because of what's going on with the straight of four moves. This is from this from Koshi. and prediction markets are are saying there's a before 2028 63% chance before 2027 there's only a 15% chance all right it's still not high but it's going up before July before July 2027 there's a 35% chance of a hike so it it's not high but it's not it it has been going up I'm not saying it's going to happen but if they contemplate a hike or execute one before the summer or even just keep rates steady what happens to the economy what happens to markets The economy is going into recession. The number one reason to go into a recession is the stock market going down. That is the economy now. Like I said, it's the highest versus GDP in almost 100 years. Just imagine a 10% correction. That's almost 25% in GDP. Mr. Trump talks all the time about, you know, trying to get Europe to to increase their percentage of GDP to 3 to 4% for defense spending. I mean, you can't delegitimize that fact. But I would look at that as as a strategist. It's like, oh boy, you're going to add fire to a global recession. And I hope they don't. I think they're smart enough that what they did in 2008 to just wait and then ease. So my prediction is by the end of the year. And also that number will change the minute we see a secure straight home use and crude oil can drop 20% in a day. I I would say that quickly. And actually like my goal is my point is still it's going to be down a year. But then look at all these other markets. They're collapsing in commodities. Only thing that's up now is energy. Okay. So, uh before we get to the other commodities, I do want to talk about gold and and silver and Bitcoin. Uh WTI is at currently 96 and Brend is above 100. If you were an oil trader, would you would you would you pair trade this somehow like short Bren long WTI? >> Well, that's what oil traders are doing. But if you go out, you don't never do the front month. You go out I would go to to DD and that spreads about normal. So, right now, at least I checked it yesterday. That spread between Brent is yeah it's high but historically it's gone much higher and it has a great reason to be high. I mean Brent represents global seaborn crude mostly and WTI is still somewhat landlike now that's changed but this remember that in the whole history of crude oil I like to point out there's one key thing look at Brent as a bell curve every time it gets above 120 it drops down to 40. Now that's 20 years of trading and that whole period of time and the bell curves and the the apex is around 70. That whole period of time the US was most as the net importer. Now we're net exporter. Add in Venezuela, Argentina, Canada, Brazil, Guyana. The the supply coming out of the Western Hemisphere is going to balloon from this. I mean the land man were just waiting for an opportunity to sell forward and bring on more supply which is going to trickle down. So I'm quite confident that this is the pump that's going to dump. I've got I've already seen it happening in natural gas this year and you know give me a month and I'll get worried but this is going to I think let's not underestimate the tenacity of first of all our president I I've learned not to underestimate him the US military combined with the Israeli military and those combined intelligence sources the the key thing I learned is you don't mess with the MSAD these guys when people talk about boots on the ground they'll figure it out they'll the bottom line right now number one goal is to is capitulation from Iran to eliminate their ability to cause distress to to keep the um straight closed that I think by the end of this weekend very soon will be mostly secured and we will have a better clue but this is you know sometimes a great peak and also I like to point out is if it's so bad before weekend is usually the problem but why is kernel down in the week it's 96 last week's close was 98 okay so by the end today it might be higher but that's the key thing when you come in Monday and if there's not any major damage from Iran it can be seen that Iran is just inability to really create offensive distress crude is going to start collapsing the key thing is gold's already warned us about that gold is already looking forward to a more secure world and here's the reason I want to I can I'll pause and we'll go there when you're ready >> uh one final note about oil and then we'll we'll go there so this is this is what you were referencing earlier it spiked oil spiked and then recessions happened um hasn't happened every time in history, but it's happened enough. 2007 to 08, we talked about uh 2001, uh 1991, I think that was a Gulf War. So, uh >> Oh, yeah. >> That was in the trading pits. I remember that one. Well, >> I I don't know if the recession had anything to do with the Gulf War at the time. Maybe you can brief us on that. Um and then 2020 was CO, so it actually went the other way, but that was an anomaly. Why do barring CO which was an anomaly, why do these relationships happen here? It's the most significant industrial commodity, less so than in the past. And one thing I like to point out when it spiked in 2022. I so enjoyed writing about the lessons of Adam Smith and the invisible hand. And this is happening during a paradigm shift. We're shifting of converting fossil fuels with to technology. Right now we have 100% tariffs in this country on BYDs, electric cars from China. Why? Because they're awesome and they're cheap. And before that in 2022 maybe average sales in China were 10% electrics. Now they're 60% or so. Why? Be because there was a shift in incentive to not an estimate human ingenuity and and and um necessity and invention. And that's what's going to happen that is happening and you're seeing it definitely in the US. All I see right now is those producers who here's one way to look at it. um that's causing a recession for the rest of the world which is a big problem and you can see that also from China and Europe and let's look at Germany they haven't had really positive economic growth for almost five years now but what this is doing in the in the US is accelerating what was the US becoming the dominant energy producer in the world already is the biggest energy producer in the world and a net exporter of of natural gas and crude oil. So what do you think this higher price is going to do for all those producers? We started curtailing production sell forward, bring it on. What's it going to do for demand? It's going to collapse demand. Maybe that collapse but declined it. So one key thing I like to mention that the average price of a gallon of gasoline in this country has popped up to near four. In 2008, that was my signal to sell. Now the high was got to five in 2022 and came back. Right before this happened is running around 2 and a half. The average price of a gallon of diesel gasoline has popped up just above five. The high was just about 580 in 2008. I'm sorry, 2022. That's the grease of the global economy. So, right now you're in those spikes, but they're going to be and the market was so ready for a catalyst for reversion is way I like to point it out. The key thing I like to point out is we have 180day volatility on gold reaching the highest since 2009 and 180day volatility on the Nasdaq and S&P 500 almost near 10 year lows. That's going to pick up and that's going to be your main signal. the the the idea that oil going up would cut consumer demand. I understand that as an economic theory, but in practice, how much of that actually happens? In other words, how much of consumer demand actually falls when gas prices go up? >> Um, and I know more people have EVs now. Not everybody does, but is that effect still as relevant today as it was in the early 90s? I think it's much more now because of the psychology and human and consumer um consumers are already getting somewhat up unpleas unhappy before consumer sentiment was pretty negative before now we got a great catalyst to say oh hey honey shut up the spending we're not going to buy that extra car I'm thinking also this is in the back of the biggest money pump in history I've been waiting for this I've been way too early now we have that signal to just shut off the consumer globally not just the US most notably the rest of the world Um and but it's happening the number one way to really pressure consumer sentiment is gas prices going up and the stock market going down. Now that's what we're seeing right now. So when we look at the data a few months from now from this period it's going to be horrible. Now we're going to know that. >> Um but also from a few months from now we're probably going to see crude oil closer to 50 than closer to 100. That's my view. And then you're going to see all that easing. The point the bottom line is when the stock market starts going down which is way way overdue for just a normal reversion. Men was out 20% three years in a It's way overdue for a 20% correction. David, that's going to be all that matters. And that's where we have a classic case of a postinflation deflation cycle. Right now, we're inflating a little bit, but some of us remember this as well in 2008 um in two in 2000 and some of in 2022. So, right before this happened, crude oil was trading off 55. I think we're going to go back to that. Yeah, that's I mean this is kind of reminiscent of 2022 when the uh Ukraine war broke out and oil temporarily spiked to above $120. Uh stock markets were already rolling over because the Fed was on a on a on a hiking cycle. I'm just going to call this uh if they consider a hike or if they actually do a hike, it's all over for the markets. We're looking at 2022 over again. Uh but maybe it doesn't even need to take a hike uh for us to get there. Um maybe maybe the natural order of the recession that you're calling uh is just going to make the markets go down. So what what's going to happen now with gold and silver? You wrote about this uh in your most recent piece 2026 a sell one Q1 by fourth quarter. Silver's Q1 pump then dump may prove contagious. All right. We're calling this the uh devil's metal. >> Yeah. >> And that that that's the mantra. That's a nickname I heard decades ago for silver, >> right? Yeah. That uh has lived up to its reputation, reversing a 63% year-to- date gain on January 28th to a roughly 1% decline on March 19th. Now, uh let's just start with gold. Uh silver has been kind of tracing gold. The the the notion that gold is supposed to hedge us against geopolitical uncertainty. I think a lot of gold investors have been disappointed with that ever since the Iran warf breakout broke out on the 28th of February. The DXY, the Dixie has been rising as a safe haven. And gold's been going the other way. Can you comment on that first? >> It Yeah, gold was the right trade to be in last year. Some of us got lucky. I never thought it'd be go up that much, but it's its own worst enemy. The the highs I'll stick with my key theme for this year. The highs in gold and silver might last for years, maybe even decades of history as a guide. It just went up too much. And the key theme is that it flipped. Um, it switched from a store value. Typically in store values trade with volatility less than the S&P 500. It jumped to 180day volatility running 2.4 times um S&P 500. That's not a store value. That's a speculative risk asset. It's a classic. You're supposed to be selling when you're yelling. I'm not a fan of gold. I think initially goes to 4,000. That I haven't said that in decades. Um D. I started saying it last year like cryptos in 2024. I was early, peaked 2025, been early in metals, but I fully expect silver to go back to near 50 and gold initially to buy to drop down to 4,000. There'll be buyers, but I think this is the end of that bull market. It's over. >> Where's the bottom for you? I don't know for sure. The bottom the but it's going to really depend on the stock market. If this is what I think this is, the beginning of the third 50% draw down in the S&P 500 since 2000. We've had two, so it's not profound to say that. The only thing is it's just so anathema to say that people can't even conceive of a 50% draw down in the S&P 500 which would be approximately seven it's about 30 almost 30 trillion that's 100 times GDP that's one I'm sorry that's one that's 100% of GDP um it's just a normal reversion we're way overdue for and this to me is a catalyst >> let's take well let's just let's take a look at uh uh 2001 uh 911 and 2008 as a just a reference and we'll close off there. Um because that's what you say we're getting a combo of. So what happened with gold? What happened in the S&P 500 during those times? 2008, we know what happened. Um everything got slammed. Uh 2002, I'm actually curious why what did gold do during the tech bubble? Actually was in a decade. Yeah, it was a decade uh bull market. Um and then 911. Uh what happened immediately after 911? Uh my gut instinct tells me after 911 was yeah to that yeah that was not not much that was still in the in the um in the um in the bull market. So um is it fair to say that gold isn't going to react too much to the stock market uh uh volatility here because uh that that's not what happened the past three cycles. So what I've been using is the word um with gold when it got above 5,000 I I was early. I started really worrying about above 4,000 last year. It's a lose-lose. Stock market goes down. It's um the bottom line is when you have any asset that trades much higher volatility than the stock market, unless it's a negative delta put, um if stock market goes down, everything goes down, particularly high volatility assets, that's gold, unfortunately. It's changed. It's it's the answers have changed. And also, it got to a classic example of it just went up too much. Um so I and silver, too. I think here's a key word you're gonna be hearing in silver. Thrifting. Now, we've dropped a lot um and fast already from that high above 100. But the key thing, David, we all know is it's the hardest thing to do is when you've been bullish or long or strategist and an asset and it goes up a lot, hardest thing to do is to stop and get out. And that's the human nature of it. And I'm got to be the one willing to walk in. I've walked in Bitcoin conferences the last year and I got booed because I said sell. I've heard that in precious metals for last six months or so. And I'm just got to get used to it. But that's when you know you tweak something. When people's emotions get that strong, it's just the key lessons in in markets is you never want to buy a commodity after it goes up. Gold is the least elastic, but you got to get in it before if you're bullish and or broad commodities, but after it goes up expansion exponentially like this, just remember what a commodities do. Now, gold is less of like a def supply demand deficit, but all most of the metals were in supply demand deficits, particularly silver and copper before this happened. But when prices go parallel, it shifts the supply demand curve. It brings on the supply, curtails demand. And that's the key thing a lot of analysts miss. >> All right. Uh, finally, real quick before we go, Bitcoin. Um, hovering around 69,000. Is this the local bottom here? >> No. Well, sure, it's been a bottom. Um, the key support was around 60 64. That was my key level. Key resistance is 75. I still think Bitcoin is going to head towards 10,000. The bottom line for that is the stock market going down and having at least a 20% correction and partly because Bitcoin um led the way up and it's leading the way down. I think initial key support now after this is around 50,000. I'll be worried if I'm still the bottom line is also it's it's a bare market respected sell rallies. I don't understand what people are missing. The key thing I look about Bitcoin is there is an unlimited supply of cryptocurrencies. Yes, we all get Bitcoin is supposed to have limited supply but now it's in the mainstream. It's been financialized. ETFs are on board and it was the best sell signal, David, I ever seen. We had the most the best performing back test asset in history. The biggest ETF launch in history. I can't wait to put that in my book sometime. You put it in the peak. It's going to continue to lead the way lower. So those are my levels. I think it's initially level should expected to break down to 50. I think it doesn't really bottom to around 10,000. And that also in the predicates in the back of my view of the stock market. We're due for a pretty significant draw down. And Bitcoin just led the way up. Should lead the way down. But the key thing is there was one in 2009 and now there's billions of these cryptocurrencies. It's an unlimited supply asset and there's just too much purging that still needs to be done. So key thing is things like Dogecoin still worth $15 billion. They attract nothing. Come on. We got to purge that stuff. >> Thank you so much, Mike. We appreciate your thoughts. We appreciate your time. Tell us where we can find you >> on your show. Thank you very much. On the Bloomberg terminal, Mike Mcloone 11 on X and Mike Mclo senior commodity strategist on LinkedIn. and and if people want me to add them to the distribution list, just reach out. And thank you, David, for having me on. I'm looking forward to our next conversation. >> I I look forward to as well. Have a great weekend. Uh enjoy. Uh happy Friday afternoon. And we'll see you next time. And thank you for watching. Don't forget to like and subscribe. And don't forget to use my code Lynn when you sign up to Koshi link down below or scan the QR code by using my code LIN. You get $10 when you trade $10. 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'Everything Is Getting Hit': Next Is 2008, 9/11 For Stocks, Oil, Bitcoin | Mike McGlone
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Transcript
The economy is going to recession. The number one reason to go into a recession is the stock market going down. That is the economy now. Like this is the beginning of the third 50% draw down in the S&P 500 since 2000. We I think this is the year I finally get to my $40 barrel call in crude oil. I'm not a fan of gold. I think initially goes to 4,000. That I haven't said that in decades. I fully expect silver to go back to near 50 and gold initially to buy to drop down to 4,000. I still think Bitcoin is going to head towards 10,000. Stock markets are extending their four-week selloff today on Friday, March 20th, with the Dow Jones at yet another year-to-ate low. The S&P 500 is down nearly 1% intraday as of around 12 p.m. Eastern time. The NASDAQ is down 1.5%. Gold is back down towards $4,500 and Bitcoin is up to $69,500 and WTI crude oil remains at 96. This is the trigger for a major serious recession this year that's going to bring markets much lower from here. According to our next guest, Mike Mclo, senior commodity strategist at Bloomberg Intelligence, we're going to be getting Mike's outlook on all of these assets and what the Fed is going to do next. This video was sponsored by Koshi. It is a fully regulated platform that lets you trade on real world events from economic data to political outcomes. Sign up and use my code lin link in the description down below or scan the QR code here. New users will get $10 deposited to your account when you trade $10. Traders can put money down on their favorite teams, events, elections, and more in all 50 states, including California and Texas in over 140 countries. Mike, welcome back to the show. Now, the Straight of Hormuz closure probably didn't come as a surprise to a lot of people after the Iran strikes happened on the 28th of February, but not everybody anticipated those strikes to begin with. So, it's understandable that risk assets sold off after the war began. But, it's been almost 4 weeks now. So why are equities and gold which we'll talk about still selling off today Mike? >> Well the most important thing I think as a trader investor and a strategist admit where you're wrong first own it and move on. And I did not expect that the industry would close. We fully expected the attack. I mean most of it the there was an armada around Iran that was just going to happen. It's a question of time. The market had priced for it. Crude oil was up 20 to 30% on the year pricing for that. Um gold was rallying. Everything was pricing for it. The key thing that happened was I fully expect this to be quick and the US military had would had would had planned for maybe almost five decades would not allow the straight horses to be closed. Major mistake. It is closed. So now where do we move now and that's where we where we are. This is the biggest shock for the market and it has it has inklings of 2008 911 before that and 2022 with Russians invasion of Ukraine. And I've been just kind of kneeling towards what um this means. And so I fully expect it's going to be resolved soon. Uh maybe even this weekend because I think what's happening is now is what's Yeah. And the US military and Iran, Israel militaries and their you know what's underestimate their uh intelligence services have messed up a little bit, but they're just going to I think keep pounding and pounding until Iran no longer has offensive capabilities. Now we might see that by the end of this weekend. It's already kind of showing up a little bit in crude oil. You look at WTI crude oil. Last week it closed at 98 as we speak on Friday, March 20th, you know, or about midday. It's actually down on the week. Part of that is the flip in contracts. You went from that April contract with which still open, but it was it's basically done down to the May which is a 96 at the as we speak. But that's part of the burden of crude oil. It has to to be higher. It has to ride up the curve. And I have to look out, you know, in in commodities, we like to say we like to skate where the puck's going. If you go to that December contract, which is the most significant on the planet, partly because it's front month right before the midterm elections, it's running around 7778 a barrel. It's going to be front month right before midterms. I fully expect it to go towards 50. Trump needs it to go to 50 and it's a question, what's he going to do to make it go there? So, right now, we're in that fog of war. We have a long weekend coming up, but what's happening today is so significant in partly from when you're seeing things like collapsing gold. I look at gold as looking ahead to a more secure world when we say that straight of home was is secure and Iran no longer has offensive capabilities to to distress shipping there. To me, that's what's happening. But everything's getting hit and I think that part of the reason is this is one of the best catalysts I've ever seen for it's an energy crisis for a global recession. Now, you're seeing that in the industrial metals. Copper was up 15% on the year. Now, it's down almost 7%. Silver was up 63% on the year and now it's down a couple percents. You see the bent there? Silver's an industrial metal. Copper is an industrial metal and Bitcoin is, you know, was already down 20% on the year. So to me, this is the year. And so I'll end with the key thing I've gotten wrong so far, but I fully expect to pick up is on the year I pointed out some of those things are tilting over, but 60-day volatility on the S&P 500 as of yesterday was down 10% on the year. To me, that's a shocker. That happened in 2008 and the first quarter 60-day I'm sorry first half 60-day volatility at the end the first half was actually down and then we saw what happened. So to me this is an accident just getting started. I mean it's a great tactically trading year but I think for the key thing now is can we avoid all this volatility from trickling over to the stock market. I think that's just getting started which brings everything down at least for now. >> The stock market's been rolling over for four weeks in a row now Mike. So take a look at my screen. Uh this is the S&P 500 and uh as you can see it topped around uh end of January and it started rolling over even before the Iran strike happened. And so maybe I'm not going to say it was telegraphing the Iran war. I'm not going to say that. But why was it why was it already falling basically is is my question. It went up too much. To me that's a key thing is theme is the stock market bullishness at the beginning of this year end of last year was bas most extreme I've seen certain to near similar peaks in 2000 and 2007. Um and the key thing is it had a good reason. All the indications were it was going to go down. First of all gold warned us about what's happening now. Gold's parabolic rally to me was I wanted to take take a look back at it from the future. It's going to mean something. Now we know it's meaning something. Now we're giving that back. But also you look at what's happened in cryptos. They're a great leading indicator. They've collapsed. They're down. Bitcoin is still down 20% on the year. The Bloomberg Galaxy crypto indexes rolled over. But what you showed in that chart is a nice rollover pattern. I started seeing that last year when I saw Micro Strategy getting too expensive. It started rolling over and then Bitcoin and all cryptos starting rolling over and now the stock market's just following it. And the key question is where's it stopped? To me, this is just getting started. We're definitely going to see some relief shortcoming rallies and that's what we've seen so far this month in Bitcoin is a shortcoming rally. So everything's linked. No, that's the problem is I I look at you know people who I here's one thing I like to end with on the year so far. Co copper was up for a while 15%. And right now it's down about 5% which is almost exactly matching the S&P 500. See the problem? They're all the same trade right now. >> So this is from Kosi. It's a prediction market. How high will oil WTI oil get by the end of the year specifically? So, uh traders are predicting a overwhelming chance 90% 89% chance that oil will end the year above $100. And if you scroll further down, even at above $125, you're still above a 50% chance. Now, a couple things here. We're going to get to your deflationary outlook and uh revisit that call. See if you're still um you know uh thinking about that um as a narrative. Uh but also I've heard some economists say that even if the street of Hormuz were reopened tomorrow, even if let's say the war ends tomorrow, the disruption to the supply chain has already been done. It's going to take several months to recover. Ships are now rerouting to all over the place and uh it's going to be expensive to just go back to normal right away. And um it's not just oil that's being disrupted, by the way. all sorts of cargo that runs through the straight and by the mostly it's Asia and Europe that's affected. Uh so you know can you just comment on on these odds here? >> Sold to you for crude oil to be that high by the end of the year we have to first thing has to be stated it's different this time. Crude oil right now is is kicking over to a global energy crisis and recession. The last good example of that we had a little bit 2022. The high was 130 and the low this year was 55. We had the high peak in 2008 at 147 and the low that year was 32. I see parallels. So I'll make my call right now. By the end of the year, by the time we get the elections, crude oil is going to be closer to 50. That's that front month contract right now. The December contract, which will be front month in a few, you know, by by the time we get to those elections is 77. And for that to happen, that scenario towards $129 a barrel, that's a global recession. That means the whole the Republicans get absolutely crushed. Trump's legacies is ruined means the whole Middle East is a major problem. The middle the horra is still closed and please don't people always underestimate human ingenuity. The last time we had a similar pump like this in 2002 in China maybe your average EV sales are 10% or so another 65%. These kind of things spark you spark that bring on of that supply of crude oil which is happening in the US massively on the whole western hemisphere. it it crushes demand and then it brings out alternatives. So, I'm going to say here, I'll make my call. I think this is the year I finally get to my $40 barrel call in crude oil. Probably on the back of one key thing, just a middle of recovery in US stock market volatility. So, right now we're in the in the the fog of war. This is um that scenario is basically expects the US and Israeli forces and they're increasing some of their allies because Iran has been reaching out and pissing off some of its neighbors. It fully expects them to completely fail and basically mentions that Iran's probably going to be controlled the straight. I think within a few weeks the US is going to pound them hard enough to say they don't have the offensive capabilities. That was a major mistake that they closed it but we'll be opening that straight. this will be reset and then the thing is we already set heading just like a 2000 in 2001 2000 we got 2001 we got 911 we're already tilting lower in the market that event happened and the whole world heading towards a recession on the back of one key thing stock market went down so I have to end with this this event has happened with US stock market about 2.3 times GDP and in 2007 before the last big pump before we peaked in curo it was 1.2 two times GDP. Also, 180day volatility in the stock market is still running near a 10-year low. Well, just starting to revert. Also, we were warned about this last year by gold. So, yeah, I'd love to take the other side of that trade. And what's what's make sure we check in by the year if I'm wrong on that. This is going to be I already think it's going to be a great trading year, but that's a pretty severe global depression, that kind of crill price by the end of the year. >> $50 or even $40 uh dollars a barrel. So, yeah, that is going to be on the back of some sort of recession. Is that is that going to be triggered by ironically high oil prices right now? >> Yeah, exactly. So, let's put it this way. Uh, it did it in 2008. It's natural gas has already done it. Natural gas was up 100% on the year. That's a front contract. Now, the front contract is down 16%. Uh, silver has already done it. It was up 63% on the year and now it's down 3%. Gold was up what, a third on the year, now it's up 5%. Copper was up 15% on the year. Now, you see the tilt in commodities, pumps then dumps. Right now, it's crude oil's turn. But here's the difference. In 2008, that when when the average price of gasoline reached $4 a gallon, that's when I just laid in the shorts. I was trading. I don't trade anymore and made a decent amount of money and shorts in the stock market and everything, but it was up 53% to get to that. Our high so far this year to get to that high of 120 was up 108%. It's double what we did in 2008. And that triggered that accelerated that great recession. So don't ever underestimate crude oil is the greatest. It's its own worst enemy. It pumps, it brings on supply, curtails demand, tilts the world um towards global recessions, and then dumps. That's the scenario I think we're going to have this year. The key thing is this straight's going to be cleared up. Bra is probably going to collapse at some point. We're going to have a re relief rally in risk assets, and then they're going to look over and say, "Oh, look how expensive we were. Now we have this you a more secure world, but before this was happening, we found out expensive the stock market were." consumer sentiment was waning. What's going to happen now? The consumer sentiment and then we have to tilt over back to yeah AI really created this massive pump in in uh stock market valuations. Now everybody's losing worried about losing their jobs through AI. It's just to me this is a classic cycle. I think this year is going to make and break careers. I mean my suggestion is to still hide in treasuries and look for levels to sell. So the key levels I've been using is Bitcoin initially was around 100. It got to 96. Now it's down at 70. Okay, that's a little bit lower. Copper above six to me was a key short. Um $6 a pound. Silver above 100 to me was a key short. Still is. Crude oil. Now, I think that high of 120 is going to last for a long time. And even the bond yields, that's the key thing that's kicking it out. Treasury bond yields, that long bond right now as we speak is 495. The high for the year is 5%. Has been unable to go above 5%. It might get there again, but that's the lose-lose. If that goes up, everything goes down. And I fully expect by the end of the year the best trade this year I still stick with it is I think was going to grab alpha this year is the long bond. I f see this as a combination of 911, 2008 and 2022 all together and the big differences is stock market as of a few months ago on a year- end basis was the most expensive since 1928 versus GDP >> combination of 2008 2002 >> and um >> 911 >> and all right I'm going to come back to that call uh I I I I want to play for you this clip uh the reporter asked POW at the latest FOMC meeting earlier this week about oil and its impact on Fed policy. Take a listen and I'll get your take. >> There's been some debate about whether the Fed should look through the inflation that will come from higher oil prices stemming from the Middle East conflict. Is that the right approach at this juncture? And to what extent does the fact that inflation has been above target for roughly 5 years now influence the committee's thinking around this? So, uh, first let me say we're well aware of, um, the performance of inflation over the last few years and how a series of shocks have have interrupted progress that we've made over time and, uh, that happened most recently with tariffs and then and now there will be some effects on inflation coming forward. Um the the thing that's really important that we see this year is progress uh on inflation through a reduction in goods inflation as the one-time effects on prices of tariffs go through the system, go through the economy. That's the main thing we're looking for going into this exercise. And we need to be seeing that uh to you know to sort of understand that we actually are making progress because on net we didn't make progress. And if you look at total inflation, sorry, total core inflation, it's about 3%. And some big chunk of that between a half and 3/4 is actually tariffs. So is he trying to say that oil is going to have a rollover effect or spillover effect on other commodities uh and and other assets here? What what's he trying to say? >> He doesn't know. >> Okay. >> He doesn't know. And I want if I can I'd love to share a screen or I can just go ahead. in in um as I as I shared in 2008 I just remember trading it well CPI peaked right about here as the things were collapsing at 5.6%. That's when crude oil reached $147 a barrel and the Fed had already started easing. The Fed just stayed stable right about 2%. Uh actually the Fed funds was closer to um yeah but this year now we're hovering below 2.4%. 4% it might spike above 3% but this is well when rates are higher and the stock market cap the GDP is double what it was then back then it was like 1.2 times now it's 2.3 times 2.1 no 2.2 two times. So to me, this is a scenario that's going to make 2008 look like stuff um compared to what's happening because we're just so stretched. But right now, as we speak, the Fed has just started, the market has just started to inkling for the first time I've seen in years potentially priced for hikes, which is you're seeing it on the screens. Everything's getting hit. To me, that's an oxymoron. You don't hike in this environment. You wait it out. And back last in 2008 was an example. We just see that flatline. That's is Fed funds. They waited it out and then bam, everything collapsed. So, we probably see a we're going to see a a jump in CPI from this. You know, it's hovering below 3%. It hasn't been able to get three above 3%. Yeah, core is high, but I fully expect this number to be close to to zero by this year, if not next year. And it's not profound to say that because all it needs is a little pick up in stock market volatility, normal reversion commodities already happened. I pointed out all the ones that have gone from major pumps to dumps and um it's done it before. So we did we were about 2% in 2020. We dropped below 2000 2 I'm sorry 0% in 2015 and we bought at minus 2% in 2009. This is a similar trajectory. So this is just it's and it's only March David. So this is just getting started. And the bottom line for this um the Fed to ease for inflation to go down and for this to just have a normal pump then dump is the stock market just gosh help us if we have a 20 10 to 20% correction. Right now we're down 5% on the year. >> Isn't that exactly what happened with the ECB in uh 2008? Uh they actually raised rates. If you take a look at um if you take a look at my screen, I'll just show you real quickly here. This is the uh ECB deposit facility rate for the Euro area. Uh in 2008, right before the Leman collapse, >> they raised rates once >> and that was because oil has been going up like you showed in the chart all throughout that summer and the inflation reading in Euro uh in the Euro area stayed hot. I just remember >> Yeah, please go ahead. >> I remember that so well because I was started getting bearish at the end of 2006. I had a rough year trading 2007 and obviously did very well in 2008. Just I thought I was just hedging my life and my home and everything because I saw it coming. Volatility was too low. But that was one of my triggers. Spike in oil prices, ECB hiking, Fed figured it out, but that was just dumb. That's one one good way to accelerate a recession when you already have kind of a oil shock is to hike rates and they're already starting to price for hikes in Europe. So this is a this is the big one and it does it's not really profound to say that at all David when I point out two things. Last year we had the best year for gold since 1979. Let's make looking a little more profound right now. And we have the highest most expensive stock market versus GDP in I mentioned in almost 100 years and stock market volatility is still low and Bitcoin's collapsing. It's all telling you that this is going to happen. Just button down and act accordingly >> there. I I bring up the ECB because that's exactly what the Fed is contemplating right now. Recall the FOMC conference. There's been several questions asked about the possibility of a hike of a rate hike this year because of what's going on with the straight of four moves. This is from this from Koshi. and prediction markets are are saying there's a before 2028 63% chance before 2027 there's only a 15% chance all right it's still not high but it's going up before July before July 2027 there's a 35% chance of a hike so it it's not high but it's not it it has been going up I'm not saying it's going to happen but if they contemplate a hike or execute one before the summer or even just keep rates steady what happens to the economy what happens to markets The economy is going into recession. The number one reason to go into a recession is the stock market going down. That is the economy now. Like I said, it's the highest versus GDP in almost 100 years. Just imagine a 10% correction. That's almost 25% in GDP. Mr. Trump talks all the time about, you know, trying to get Europe to to increase their percentage of GDP to 3 to 4% for defense spending. I mean, you can't delegitimize that fact. But I would look at that as as a strategist. It's like, oh boy, you're going to add fire to a global recession. And I hope they don't. I think they're smart enough that what they did in 2008 to just wait and then ease. So my prediction is by the end of the year. And also that number will change the minute we see a secure straight home use and crude oil can drop 20% in a day. I I would say that quickly. And actually like my goal is my point is still it's going to be down a year. But then look at all these other markets. They're collapsing in commodities. Only thing that's up now is energy. Okay. So, uh before we get to the other commodities, I do want to talk about gold and and silver and Bitcoin. Uh WTI is at currently 96 and Brend is above 100. If you were an oil trader, would you would you would you pair trade this somehow like short Bren long WTI? >> Well, that's what oil traders are doing. But if you go out, you don't never do the front month. You go out I would go to to DD and that spreads about normal. So, right now, at least I checked it yesterday. That spread between Brent is yeah it's high but historically it's gone much higher and it has a great reason to be high. I mean Brent represents global seaborn crude mostly and WTI is still somewhat landlike now that's changed but this remember that in the whole history of crude oil I like to point out there's one key thing look at Brent as a bell curve every time it gets above 120 it drops down to 40. Now that's 20 years of trading and that whole period of time and the bell curves and the the apex is around 70. That whole period of time the US was most as the net importer. Now we're net exporter. Add in Venezuela, Argentina, Canada, Brazil, Guyana. The the supply coming out of the Western Hemisphere is going to balloon from this. I mean the land man were just waiting for an opportunity to sell forward and bring on more supply which is going to trickle down. So I'm quite confident that this is the pump that's going to dump. I've got I've already seen it happening in natural gas this year and you know give me a month and I'll get worried but this is going to I think let's not underestimate the tenacity of first of all our president I I've learned not to underestimate him the US military combined with the Israeli military and those combined intelligence sources the the key thing I learned is you don't mess with the MSAD these guys when people talk about boots on the ground they'll figure it out they'll the bottom line right now number one goal is to is capitulation from Iran to eliminate their ability to cause distress to to keep the um straight closed that I think by the end of this weekend very soon will be mostly secured and we will have a better clue but this is you know sometimes a great peak and also I like to point out is if it's so bad before weekend is usually the problem but why is kernel down in the week it's 96 last week's close was 98 okay so by the end today it might be higher but that's the key thing when you come in Monday and if there's not any major damage from Iran it can be seen that Iran is just inability to really create offensive distress crude is going to start collapsing the key thing is gold's already warned us about that gold is already looking forward to a more secure world and here's the reason I want to I can I'll pause and we'll go there when you're ready >> uh one final note about oil and then we'll we'll go there so this is this is what you were referencing earlier it spiked oil spiked and then recessions happened um hasn't happened every time in history, but it's happened enough. 2007 to 08, we talked about uh 2001, uh 1991, I think that was a Gulf War. So, uh >> Oh, yeah. >> That was in the trading pits. I remember that one. Well, >> I I don't know if the recession had anything to do with the Gulf War at the time. Maybe you can brief us on that. Um and then 2020 was CO, so it actually went the other way, but that was an anomaly. Why do barring CO which was an anomaly, why do these relationships happen here? It's the most significant industrial commodity, less so than in the past. And one thing I like to point out when it spiked in 2022. I so enjoyed writing about the lessons of Adam Smith and the invisible hand. And this is happening during a paradigm shift. We're shifting of converting fossil fuels with to technology. Right now we have 100% tariffs in this country on BYDs, electric cars from China. Why? Because they're awesome and they're cheap. And before that in 2022 maybe average sales in China were 10% electrics. Now they're 60% or so. Why? Be because there was a shift in incentive to not an estimate human ingenuity and and and um necessity and invention. And that's what's going to happen that is happening and you're seeing it definitely in the US. All I see right now is those producers who here's one way to look at it. um that's causing a recession for the rest of the world which is a big problem and you can see that also from China and Europe and let's look at Germany they haven't had really positive economic growth for almost five years now but what this is doing in the in the US is accelerating what was the US becoming the dominant energy producer in the world already is the biggest energy producer in the world and a net exporter of of natural gas and crude oil. So what do you think this higher price is going to do for all those producers? We started curtailing production sell forward, bring it on. What's it going to do for demand? It's going to collapse demand. Maybe that collapse but declined it. So one key thing I like to mention that the average price of a gallon of gasoline in this country has popped up to near four. In 2008, that was my signal to sell. Now the high was got to five in 2022 and came back. Right before this happened is running around 2 and a half. The average price of a gallon of diesel gasoline has popped up just above five. The high was just about 580 in 2008. I'm sorry, 2022. That's the grease of the global economy. So, right now you're in those spikes, but they're going to be and the market was so ready for a catalyst for reversion is way I like to point it out. The key thing I like to point out is we have 180day volatility on gold reaching the highest since 2009 and 180day volatility on the Nasdaq and S&P 500 almost near 10 year lows. That's going to pick up and that's going to be your main signal. the the the idea that oil going up would cut consumer demand. I understand that as an economic theory, but in practice, how much of that actually happens? In other words, how much of consumer demand actually falls when gas prices go up? >> Um, and I know more people have EVs now. Not everybody does, but is that effect still as relevant today as it was in the early 90s? I think it's much more now because of the psychology and human and consumer um consumers are already getting somewhat up unpleas unhappy before consumer sentiment was pretty negative before now we got a great catalyst to say oh hey honey shut up the spending we're not going to buy that extra car I'm thinking also this is in the back of the biggest money pump in history I've been waiting for this I've been way too early now we have that signal to just shut off the consumer globally not just the US most notably the rest of the world Um and but it's happening the number one way to really pressure consumer sentiment is gas prices going up and the stock market going down. Now that's what we're seeing right now. So when we look at the data a few months from now from this period it's going to be horrible. Now we're going to know that. >> Um but also from a few months from now we're probably going to see crude oil closer to 50 than closer to 100. That's my view. And then you're going to see all that easing. The point the bottom line is when the stock market starts going down which is way way overdue for just a normal reversion. Men was out 20% three years in a It's way overdue for a 20% correction. David, that's going to be all that matters. And that's where we have a classic case of a postinflation deflation cycle. Right now, we're inflating a little bit, but some of us remember this as well in 2008 um in two in 2000 and some of in 2022. So, right before this happened, crude oil was trading off 55. I think we're going to go back to that. Yeah, that's I mean this is kind of reminiscent of 2022 when the uh Ukraine war broke out and oil temporarily spiked to above $120. Uh stock markets were already rolling over because the Fed was on a on a on a hiking cycle. I'm just going to call this uh if they consider a hike or if they actually do a hike, it's all over for the markets. We're looking at 2022 over again. Uh but maybe it doesn't even need to take a hike uh for us to get there. Um maybe maybe the natural order of the recession that you're calling uh is just going to make the markets go down. So what what's going to happen now with gold and silver? You wrote about this uh in your most recent piece 2026 a sell one Q1 by fourth quarter. Silver's Q1 pump then dump may prove contagious. All right. We're calling this the uh devil's metal. >> Yeah. >> And that that that's the mantra. That's a nickname I heard decades ago for silver, >> right? Yeah. That uh has lived up to its reputation, reversing a 63% year-to- date gain on January 28th to a roughly 1% decline on March 19th. Now, uh let's just start with gold. Uh silver has been kind of tracing gold. The the the notion that gold is supposed to hedge us against geopolitical uncertainty. I think a lot of gold investors have been disappointed with that ever since the Iran warf breakout broke out on the 28th of February. The DXY, the Dixie has been rising as a safe haven. And gold's been going the other way. Can you comment on that first? >> It Yeah, gold was the right trade to be in last year. Some of us got lucky. I never thought it'd be go up that much, but it's its own worst enemy. The the highs I'll stick with my key theme for this year. The highs in gold and silver might last for years, maybe even decades of history as a guide. It just went up too much. And the key theme is that it flipped. Um, it switched from a store value. Typically in store values trade with volatility less than the S&P 500. It jumped to 180day volatility running 2.4 times um S&P 500. That's not a store value. That's a speculative risk asset. It's a classic. You're supposed to be selling when you're yelling. I'm not a fan of gold. I think initially goes to 4,000. That I haven't said that in decades. Um D. I started saying it last year like cryptos in 2024. I was early, peaked 2025, been early in metals, but I fully expect silver to go back to near 50 and gold initially to buy to drop down to 4,000. There'll be buyers, but I think this is the end of that bull market. It's over. >> Where's the bottom for you? I don't know for sure. The bottom the but it's going to really depend on the stock market. If this is what I think this is, the beginning of the third 50% draw down in the S&P 500 since 2000. We've had two, so it's not profound to say that. The only thing is it's just so anathema to say that people can't even conceive of a 50% draw down in the S&P 500 which would be approximately seven it's about 30 almost 30 trillion that's 100 times GDP that's one I'm sorry that's one that's 100% of GDP um it's just a normal reversion we're way overdue for and this to me is a catalyst >> let's take well let's just let's take a look at uh uh 2001 uh 911 and 2008 as a just a reference and we'll close off there. Um because that's what you say we're getting a combo of. So what happened with gold? What happened in the S&P 500 during those times? 2008, we know what happened. Um everything got slammed. Uh 2002, I'm actually curious why what did gold do during the tech bubble? Actually was in a decade. Yeah, it was a decade uh bull market. Um and then 911. Uh what happened immediately after 911? Uh my gut instinct tells me after 911 was yeah to that yeah that was not not much that was still in the in the um in the um in the bull market. So um is it fair to say that gold isn't going to react too much to the stock market uh uh volatility here because uh that that's not what happened the past three cycles. So what I've been using is the word um with gold when it got above 5,000 I I was early. I started really worrying about above 4,000 last year. It's a lose-lose. Stock market goes down. It's um the bottom line is when you have any asset that trades much higher volatility than the stock market, unless it's a negative delta put, um if stock market goes down, everything goes down, particularly high volatility assets, that's gold, unfortunately. It's changed. It's it's the answers have changed. And also, it got to a classic example of it just went up too much. Um so I and silver, too. I think here's a key word you're gonna be hearing in silver. Thrifting. Now, we've dropped a lot um and fast already from that high above 100. But the key thing, David, we all know is it's the hardest thing to do is when you've been bullish or long or strategist and an asset and it goes up a lot, hardest thing to do is to stop and get out. And that's the human nature of it. And I'm got to be the one willing to walk in. I've walked in Bitcoin conferences the last year and I got booed because I said sell. I've heard that in precious metals for last six months or so. And I'm just got to get used to it. But that's when you know you tweak something. When people's emotions get that strong, it's just the key lessons in in markets is you never want to buy a commodity after it goes up. Gold is the least elastic, but you got to get in it before if you're bullish and or broad commodities, but after it goes up expansion exponentially like this, just remember what a commodities do. Now, gold is less of like a def supply demand deficit, but all most of the metals were in supply demand deficits, particularly silver and copper before this happened. But when prices go parallel, it shifts the supply demand curve. It brings on the supply, curtails demand. And that's the key thing a lot of analysts miss. >> All right. Uh, finally, real quick before we go, Bitcoin. Um, hovering around 69,000. Is this the local bottom here? >> No. Well, sure, it's been a bottom. Um, the key support was around 60 64. That was my key level. Key resistance is 75. I still think Bitcoin is going to head towards 10,000. The bottom line for that is the stock market going down and having at least a 20% correction and partly because Bitcoin um led the way up and it's leading the way down. I think initial key support now after this is around 50,000. I'll be worried if I'm still the bottom line is also it's it's a bare market respected sell rallies. I don't understand what people are missing. The key thing I look about Bitcoin is there is an unlimited supply of cryptocurrencies. Yes, we all get Bitcoin is supposed to have limited supply but now it's in the mainstream. It's been financialized. ETFs are on board and it was the best sell signal, David, I ever seen. We had the most the best performing back test asset in history. The biggest ETF launch in history. I can't wait to put that in my book sometime. You put it in the peak. It's going to continue to lead the way lower. So those are my levels. I think it's initially level should expected to break down to 50. I think it doesn't really bottom to around 10,000. And that also in the predicates in the back of my view of the stock market. We're due for a pretty significant draw down. And Bitcoin just led the way up. Should lead the way down. But the key thing is there was one in 2009 and now there's billions of these cryptocurrencies. It's an unlimited supply asset and there's just too much purging that still needs to be done. So key thing is things like Dogecoin still worth $15 billion. They attract nothing. Come on. We got to purge that stuff. >> Thank you so much, Mike. We appreciate your thoughts. We appreciate your time. Tell us where we can find you >> on your show. Thank you very much. On the Bloomberg terminal, Mike Mcloone 11 on X and Mike Mclo senior commodity strategist on LinkedIn. and and if people want me to add them to the distribution list, just reach out. And thank you, David, for having me on. I'm looking forward to our next conversation. >> I I look forward to as well. Have a great weekend. Uh enjoy. Uh happy Friday afternoon. And we'll see you next time. And thank you for watching. Don't forget to like and subscribe. And don't forget to use my code Lynn when you sign up to Koshi link down below or scan the QR code by using my code LIN. You get $10 when you trade $10. 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