I wanted to more or less summarize what I see from both of these individuals so most can get an overview about how this all can shake out. I am a blogger and financial writer, and not a market professional like both of them. I do have an MBA, so I can speak intelligently about what they forecast, but I dig a little deeper into the forensics side of this based on others’ opinions. Below, I want to unpack both Michael Oliver and David Hunter’s upcoming forecasts.
Player 1: David Hunter
David Hunter has appeared on dozens of YouTube interviews over the last year or so projecting somewhat of a doomsday scenario. Here are some of the major elements:
- At some point, there will be a 65-85% “global bust”. This is loosely defined as the depth of a depression in the time of a recession. This “bust” is very deflationary.
- He talks about a continued melt up yet before the bust happens. We still aren’t there, and I believe if I am looking at his numbers correctly, he still feels we have a 5-10% upside in the markets.
- In this melt up, he sees gold getting to $2500 and silver to $45-50. On my charts, I have seen how he gets to these areas, if certain macro events continue on their trajectory.
- He is calling for the DXY to first hit 85 and 80 before moving up significantly higher. I have seen how he arrived here on my own DXY charts.
- During the bust, gold and silver may only correct 35-45% where the general markets may correct twice as badly. Essentially, everything gets dinged with this, and gold and silver catch a bid first.
- After the bust, there will be a commodities boom taking gold to $10,000, silver to $300 and oil to $300.
- In the 2030s, there will be a depression
Notes about his analysis:
- He has been around for 48 years and did not come from “nowhere” as someone I am a fan of claimed. Here is his linkedin profile. His experience investing from 1973 during a highly inflationary time through the 1970s needs serious attention. He may be one of the few voices on YouTube that was actually investing in the inflation-laden 1970s.
- He has had somewhat of the same forecast for the last few years that has been delayed. To be fair, the problems coming up in housing now I wrote about in detail last May when I was forecasting items with evictions and mortgage defaults – this forecast was shifted to the right when they kind of made a law that said you cannot evict people and mortgages won’t default. You HAVE to forecast with the balls and strikes thrown. When outliers happen, it can shift your forecasts to the right. So, I can see how he has delayed this bust many times, and understand the principles as to why it has shifted. Those that want to staple his ass to the wall due to missed deadlines aren’t seeing the big Cat 5 hurricane forecast coming. They are the people in your gated community that complain because the wreath you hung is too big for community standards by an inch and you get a letter from a Karen asking you to remove it.
- He was called “dangerous” by someone, and I can see how a doom and gloom forecast can be interpreted as such. That being said, he is one of MANY YouTube financial people calling for a great deflationary event, I’m not sure why this fellow singled him out to call him this. I feel where he gets into trouble is putting dates with numbers, as I ran into that buzz saw myself when my forecasts were shifted to the right due to a bank not being able to source 113m oz of silver and having it appear that it sourced it, when it didn’t. My forecast was accurate, but I could not anticipate a bank lying about sourcing 113m oz for an ETF. Had that been the headlines, I’d be a millionaire at the moment.
- He has nailed the 1.20% 10yr. when it was at 1.8% or so, he called for it to go back to 1.2%. He also called for oil to hit $75 and recede, and nailed that almost to the dollar – and the actions afterwards.
Note about the bust
David gets criticisms on the internet for having this type of prediction for years that continually slides to the right. It’s fair criticism. The “bust” isn’t clearly defined as to what it is, but he thinks of it as a global situation. In the interviews I heard, I don’t hear him speaking of a catalyst that would cause this. I feel this is important in this situation because in my elementary-school type of chart analysis, I can see on the technicals where he was getting some of his price targets. However, this BIG PICTURE is driven by macro conditions. A key item missing here is “what causes this”? One can make many assumptions then – another March 2020? Another lockdown? However, what is missing from this analysis is the root cause. Think of cause and effect. The balloon pops BECAUSE you touch it with a pin. Had you not taken a pin to the balloon, it would not have popped.
I pontificated using some of his big picture that I believe the ROOT CAUSE of all of this is intentionally under-reporting inflation for 40 years. While many may say we have been in deflation for 40 years, I believe most Americans were seeing “dinner table inflation” which structurally, over 40 years, gutted our middle class and turned us from a nation of savers to a nation of debtors, eviscerating the middle class in the process. I believe the “pin” is now inflation they cannot hide with changing formulas up. That is the Hindenberg about to happen no one really grasps. Suddenly, a vast majority of our nation no longer believes the CPI. That is the erosion on trust in government institutions which I believe is underway and has been with the lack of “rule of law” we have been seeing the last 5 years in this country. Rule of law is being overrun, and I believe the next item to be overrun is the faith in institutions. You go out and see a steak is $20 a pound, it was $12 a pound last year, and some rich bastard on TV is smug and tells you inflation IS transitive and has receded back to 4% and he’s all happy with himself. And you now permanently have $20 per pound steak and his company didn’t give him a raise. Yeah…wheels are now turning in your head, aren’t they.
That being said, his outlook for most things has been that there’s a melt up, then a massive deflation, followed by massive inflation, then a global depression in the 2030s. It’s some deep rooted shit, and I can see how he gets there.
This whole situation though is predicated on something happening without identifying the root cause of the issue. Meaning, you are predicting a balloon is popping, but there’s no pin anywhere to be found. One danger with this situation is if you have MMT-loving politicians in office, and collaboration of the G20 to print to eternity (they do), the risk here is that this can melt up rather indefinitely. Meaning, you get to cash anticipating some great blow up and your $100k in cash that has value today is relatively worthless in 4 years of aggressive MMT.
*** Edit 8/8/2021 ***
I was shocked David Hunter commented on my article!! First, in case he reads this – I meant zero disrespect. David made the comment that he has been pretty clear on the cause of the bust. In all fairness, I’m not sitting here with a notebook most times scribbling down exact phrases, that’s on me. I listen to these podcasts when mowing grass, finishing my basement, driving – so sometimes minor details may get lost.
I have listened to a LOT of his videos and I was trying to see “root causality”. This is what led me to pontificate on the root cause – my root cause was 40 years of mis-representing inflation and those errors are now finally bubbling over and correcting. I’m not looking at his or Michael Oliver’s forecasts in the context of acute inflation that may be a recent phenomena. I believe the CPI has been artificially juked down which has tried to hide inflation for 40 years. As they say, all manipulations work until they don’t. Check out the energy this flag has pent up over 36 years…
I re-listened to a video from 2 weeks ago with Palisades, and he was clear. Inflation will cause this, then the fed will tighten to trigger the events. Part of me feels the tighten may never come, but them talking about talking about it will be incessant to keep things in check for as long as they can. I feel they may even change how they calculate CPI in the darkness of night to then say, “see – it went down!”. I then went back to a Palisades interview Feb 21 2019 which essentially is the same forecast, with some different price targets. In that podcast, he mentioned over leverage on the stocks would cause a sell off. One COULD make the argument that his 2019 podcast was an early forecast of the March 2020 crash and the call now is an entirely different one.
Either way – I believe in a LOT of his forecast and one can make many arguments these forecasts slide to the right for many reasons. I feel we are so far overstretched right now that 2019 David Hunter would have called 2021 David Hunter a loon if he was able to tell him how far this craziness ACTUALLY went.
So – I think many agree that all of this is going down in a spectacular way. I think the next stage now is to really unpack the root cause. I could be 100% wrong with how I see inflation as being mis-reported, but shadowstats.com is always stuck in my head. But if I WAS right, and as a result of that was cheap money for 36 years, it explains why houses are more expensive and the market crash, the cheap money that led to over-expansion in dotcom, and why the stock market is 16X from 36 years ago, etc. Risk has not accurately been accounted for in interest rates and this allows for almost infinite expansion. Check the below when you see the channel from above forming and how that related to the DJIA below.
To Hunter’s credit, this last bit of green candles DO look like a melt up.
*** End edit ***
Player 2: Michael Oliver
Michael Oliver talks more about momentum structures in his analysis. I have seen a bunch of his interviews and agree with most of his statements and he’s now my number 1 source to look at. Here’s the highlights:
- Most crashes outside of 1929 have been “arm wrestling events” and can take 12-24 months to “crash”. This, as opposed to a cliff drop scenario from March 2020 most of us who are newer are familiar with.
- When he discusses momentum structures, you can visually see a plane hitting a high altitude and tremendous amounts of fuel needed to not only sustain that altitude, but almost exponential amounts needed to take it higher. It shows almost a “stalling out” effect of major indexes, indicating many are soon running for the hills into other items.
- He feels money will rotate out of stocks and into gold and silver.
- He shows strong momentum indicators to support gold and silver moves up
- His analysis underscores inflation as causing a lot of the issues.
Notes about his analysis:
- He discusses, in detail, how lumber and steel are one-offs with COVID and not the poster child for transitory inflation that some want to tell us. I agree with him that inflation is driving the crash here.
- According to LL, in 2011 to come down, so he is not a permabull.
- His charts deal a lot with structuring momentum, rather than just looking at price. One critique I might have in a few minutes of watching seem to be the periodicity to find some of this stuff might not be consistent. For example, you might hear the “30 week” or “quarterly”. Each chart seems to have a different period. More on this below.
Note about momentum – cruise liner versus speedboat
When I think of momentum, I think of the calculus equations in my college physics classes for acceleration and deceleration like if you tried to stop a car. Please don’t ask me to remember them. Long time ago. Think of things like you learned about gravity where the speed of something dropping is 9.8 meters per second, per second – in a vacuum. It’s not a straight line, but a curved line. The same concept of moving forward and backward work in this type of math when you are pulling out from a stop light or slowing down to avoid running a red light. Kind of accordion-like.
With deceleration, the heavier the car, the longer it takes to stop. Then, you need to count the coefficient of friction of the surface. Is the surface rough and unfinished and your tires will catch, or is it a smooth surface which may be iced over and you can skate for eternity. So using momentum in charts may not be an exact science – but I love where he was going with this. With the different periods above, you then think of perhaps how big that market is, and the financial energy needed to push it forward. For example, silver is a TINY market, and this is why a handful of traders can “spoof” price. The larger the market, the more financial energy needed to move it. This is why I might think that Michael Oliver’s momentum structures might need to consider the size of the market being evaluated to the tailor the right periodicity vehicle. Also of consideration may be to understand the “coefficient of friction” which can be like market fundamentals – many may consider as headwinds or tailwinds. But you might think the silver market would have a more responsive periodicity (weekly) where the bond market is maybe 200 times larger and could use the quarterly or yearly. Meaning, you could not evaluate the momentum of these markets using the same periodicity. One “weighs” significantly more than the other.
The weakness I can think of in momentum charts is if the fundamentals rapidly change, those structures with longer periodicity will not signal anything is wrong. Think of it like this – if you are driving 80 mph and suddenly hit a patch of ice, your driving conditions quickly changed to cause immediate danger. If you were looking at your weather app to determine HOW you should be driving rather than observing the immediate conditions in front of you, you may have a violent crash and have never seen it coming.
Therefore, I believe four things about momentum charts
- The larger the market, the longer the periodicity is needed to evaluate the momentum structure. Silver can pivot on a dime, where the bond market may take years to move the type of move silver could move in an hour.
- Fundamentals are an EXTREMELY important underbelly to monitor the immediate conditions, especially with smaller markets. Meaning, fundamentals in smaller markets may be more sensitive than price action. The larger the market, the more important momentum is over fundamentals, which is how you can get to a PE ratio of 1100 for Tesla.
- This type of analysis I feel is much better suited towards longer term investment and watching indicators to enter and exit a position for a long term hold. Think pension funds and other institutional Vanguard index funds or the like.
- I do not feel this type of analysis is very useful for short term trading UNLESS you are potentially detecting violent up or down moves in the ST, which I feel would be very difficult to detect with larger markets. Oliver’s observation on the silver momentum is VERY interesting to me for a coiled up move.
I joked with Patrick Karim on my video the other day that “you haven’t made it until you get trolls”. I only have a few. These guys have hundreds or thousands. What most dopes on the internet don’t get, yet, is that no one has a crystal ball. Meaning….none of us can be right, right now, and none of us can be wrong, right now.
I call this the Schroedinger’s cat of financial forecasting. You can be right and wrong at the same time.
I believe David Hunter gets in some trouble with putting dates on things, which I believe is the biggest critique he has right now amongst the trolls. I used some cash to play a “david hunter doomsday” scenario by end of Q2 as he had predicted. That bled into Q3. I’m not upset in the least. Things slid to the right. This happens. Going deeper into my comment above about silver, in my Palisades interview in February, I made the rookie mistake of adding time to predictions. I set a COA (course of action) that would happen, given certain events and made the mistake of adding calendar days to this. In my situation, it appears I was right – things did happen, but I was also wrong. Big picture, a certain ETF said they had sourced 110m oz in 3 days. By all accounts, it appears at face value that they did no such thing. Had they accurately reported “we cannot source this metal”, I would have been spot on with my price and time and my middle name would have been legally changed to “nostradamus”. This did not happen because we aren’t dealing with moral, honest people – something I was too naive to understand at the time. They bent the rules to avoid that type of news, which then prevented the price of silver from melting up.
My lesson with that was to describe what can happen given certain events and probabilities, but stay away from “weeks, days, months” – why? Because you can be right about the direction, but you have multi-billion dollar entities able to change the rules whenever they see fit. The end result is that when the predictions do NOT happen, AS you stated them, to the letter, it discredits you. Or me. Or David Hunter. So time with predictions can be a problem.
With Michael Oliver, he has won me over with the arm wrestling argument. He shows me a compelling argument that a March 2020 is an outlier, that most recessions are a struggle over 12-24 months. I’m not sure we have ever been in this sort of money printing era to this extent, ever, but one must also consider now that as stocks start to have problems, more fuel is being thrown on the fire to keep the plane from stalling out. This fuel is “debasement fuel” in a sense, where the more fuel they throw at this, the more debased the currency gets, and the more inflation is increasing in size. This may have very, very, very explosive up move in metals when this debasement fuel is digested by the masses. Why? Let’s look at what his momentum structures are REALLY telling us?
If you can show me momentum is strong, it’s then telling me the cruise liner is running at 50 knots. It’s already running fast. THIS is the environment you may then get the big, “dumb money” coming in. Right now, the cruise liner is at 45 knots and getting to maximum velocity. At THIS point, there’s too much risk for massive money to pile in.
However, let’s go back to the driving conditions. If amateurs are able to observe with their own two eyes that there is ice all over the road, what do they do? React. Better yet, we may read the weather forecast and then go out and get winter tires and maybe even drive with caution. My point is that amateurs can SEE the fundamentals. Amateurs piling is in the kindling fuel. As we spread the word more and more, more people pile in. THIS is how we get to full speed when dumb money piles in.
This chart may look very confusing – but what do I have here? Indicators. 200dma, 50dma, MACD, RSI, Ichimoku – we are trying to look at one aspect of the weather forecast? We then look to others like Oliver or Hunter to confirm our bias. If they don’t confirm our bias, we are critical of them. Go look at trolls.
Why? NO ONE CAN PREDICT THE FUTURE.
What are we trying to do?
- Use as many tools as indicators to try and see where this is going.
- Try to listen to as many experienced voices as we can to see what they are seeing
- Make an informed decision given all the evidence we have to take financial units and grow them
I feel that Hunter’s big picture has a lot of merit, and I am using a lot of that big picture to do things like buy extra food for the house, learn more skills in life (like finishing my basement), learning to shoot, and minimizing dumb ass purchases to then perhaps invest more in metals/commodities for the next 9 years.
I feel that Oliver’s arm wrestling argument wins me over and that gold and silver are Yellowstone about to go ballistic, we are just the kindling to the fire raging and at some point, the alarms go off and dumb money will then come in, making us all stupid rich. His momentum structures appear to be predicting big money is nearing a place to enter gold and silver.
I feel that Hunter’s deflation is a likely event, and in such a case, metals and cash may be a good place to be, so I must be nimble to be able to get to cash and not hold on for dear life to my mining stocks. I need to have a prudent plan to address a possible situation where deflationary forces take the air out of the stock markets, possibly dinging gold and silver hard at the same time. My physical holdings would only suffer “paper” losses for a period. My mining stocks would be more sensitive.
Hunter is seeing a melt up yet continuing in the stock market and Oliver is seeing the end is soon. In Oliver’s case, gold and silver move up as people roll out of tech and overpriced stocks. In Hunter’s case, gold is going to $2500 and silver to $45-50 before a correction.
Take both of their items, and then superimpose my understanding that India is now buying a lot of gold. Russia and China are moving away from the dollar. Many countries are buying gold. Jeff Clark’s picture shows seasonality is in the favor of 2H for gold to rise.
Bottom line – gold and silver, according to them, should be a solid investment through the end of 2021. This then allows me to form an opinion on confidence in things like the SILJ chart. You can see the sideways action, and given what I’m hearing, along with the fundamentals, along with bullishness for the next 6 months with metals, you can then mentally see something like this with my SILJ options.
Note, this above is like the cone of certainty you see with Hurricanes, based on probability. This does NOT mean the price won’t go to $14 and stay there for 10 years. I just find that scenario highly improbable and statistically not likely.
DO NOT go out and buy shit because someone on the internet tells you things. You need to do your own due diligence and take responsibility for YOUR investments. These guys can help you form the big purple cloud above. Maybe YOUR research into the fundamentals allows you to identify if there are icy conditions and to take caution, OR if the roads are clear to accelerate. Perhaps you do a LOT of research and YOUR dark purple cloud then comes into focus.
All of this is probability. ALL of it. Neither Oliver or Hunter is right, nor are either wrong. It hasn’t happened yet. Short of a crystal ball, we need to listen to all of the voices we can to form our own investment thesis.
August 7, 2021 at 1:23 pm
August 7, 2021 at 7:24 pm
I find myself agreeing with both of them on many of their points. I really like Michael Oliver’s momentum analysis. I’ve never come across any better rationale for how to determine the timing for the end of a structural upswing. But I tend to agree with David Hunter on the Crash scenario. This is where the “Minsky Moment” concept comes into play. This is the theory that the longer the bull market and the bigger the bull market, the more likely it will be ended by a sharp crash instead of arm wrestling downwards. Actually the “Schrodinger’s Cat” scenario could unfold: Some initial arm wrestling followed by rapid market capitulation as investors come to understand whose arm is really stronger.
August 8, 2021 at 4:43 pm
I completely agree. I would add that even the best have been in holes, like Rick Rule, who says to be rational and either move the timeline to the right, or cut your losses. But, to learn from the mistakes of commission.