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Season 2, Episode 12, Transcribed: The Next Stage of the ‘Market Melt-Up’ With David Hunter

Moderator 0:02
Welcome to the Contrarian Investor Podcast. We give voice to those who challenge the prevailing sentiment in global financial markets. This podcast is for informational purposes only. Nothing on this podcast should be taken as investment advice. Guests were not compensated for the appearance, nor do they supply payment in order to appear. Individuals on this podcast may hold positions in the securities that are discussed. Listeners are urged to educate themselves and make their own decisions. Now, here’s your host, Mr. Nathaniel, E. Baker

Nathaniel E. Baker 0:36
David Hunter, Chief macro strategist at contrarian macro advisors. You were on the show last summer in August if memory serves, and you told listeners about your idea that there would be a dramatic melt up that would be caused by central baank liquidity, injections and other measures. And anybody who’s been paying attention to markets in the last couple of weeks, could reasonably point out that this is exactly what’s happened here with the Fed, and other central banks, mainly the Fed, stepping in to combat the coronavirus impact, and unleashing all kinds of liquidity. So, I guess that would be the first question for you is where we stand with this. And if this is indeed the start of this melt up?

David Hunter 1:37
Sure. Yeah, I think this is definitely the start of what I think will eventually become a parabolic melt up into a secular top. And in all honesty, when we talked last, I guess, late August, I didn’t anticipate the coronavirus by any means and didn’t anticipate that we’d get down under 2200 on the S&P, I thought we might in fact in January, February, March. I was talking about January, February, early March, I was talking about a correction back to 3000, maybe 2900. But I certainly didn’t see the the cascade that we we got. So, you know, the coronavirus certainly affected the path. But my target of 4000 plus on the S&P, which I had last summer is still my target today. We had another leg down. It took us down to a deeper bottom. But I think it didn’t change the fact that we are going to have this final melt up into a secular top, a top that I expect to be the high watermark for decades to come.

Nathaniel E. Baker 2:51
Wow. Yeah. Okay. Right. I mean, I guess you you you mentioned there that Coronavirus has impacted everything and it’s actually nice to you admit that you didn’t call it a lot of people who were bearish last year are claiming that everything happened exactly as they predicted, including the coronavirus. But obviously I don’t I don’t think anybody could could have predicted this. Nevertheless, the response from the central bank is pretty much what you predicted. Do you think that this response was adequate, was in reasonable in light of the threat that coronavirus posed to the economy?

David Hunter 3:30
Yeah, I’ll take it back even farther. Well, before we talked, but over the last several years, I have talked about a coming global deflationary bust and I started using those three words in a combination way back as early as 2013. And it’s now kind of common lexicon out there, but, but back then, nobody was using those three words in combination. But I’ve been talking for many years about when this cycle ended, it would end in a global bust, the likes of which we had not seen before. And I use the term bust, to describe something that is probably on the magnitude of a depression. What happens in a much faster, more concentrated period of time. So, as opposed to a recession, it’s steeper and steeper, as opposed to a depression. It’s not drawn out like the Great Depression was so. So that’s my people throw around the term bust. And I think too often, the term is misused, but that’s my definition of what a bust is. And that’s what we’re seeing right now. I would say that when I start talking about this, I said it’ll end in massive quantitative easing across the globe. You will see every central bank throw money into the system, unlike ever before. And so that’s what we’re getting now. I think this is the front edge of that bust. I think you get the final run up into a secular top in spite of the fact that we’ve started the bust because of all of that liquidity that’s being pumped. And then unfortunately another shoe drops and we have a much steeper deeper part of the bust, probably late this year and first half of next year. You know, that’s kind of how I see it. I obviously, the coronavirus, speeded things up a bit, but it was the massive leverage in the system that caused me to say that when this cycle ends, you’re gonna see something we’ve never seen. Basically, I’ll use the term Ponzi scheme for what has developed over the last four decades. We have just debt beyond anything we can ever manage. And you when you get these surprises, that leverage really exacerbates whatever downturn you get.

Nathaniel E. Baker 5:54
Yeah, okay, so I want to make sure where are we then in the cycle now, exactly? Because we had this big bust in March, right, really just for about two weeks. And you say that was the start of it right. And followed by the liquidity injections by a central bank. Specifically the Fed meeting with the Fed that has now started this melt up, which you say will last until fourth quarter with a target of 4000 on the S&P?

David Hunter 6:21
Actually, I think the melt up is going to happen much faster now. I am basically saying and of course things can change but I I expect the S*P to see for the exceed 4000 by Labor Day and probably sooner than that. So I expect the top to be in the summer. Then the the second shoe to drop or the second piece of the global bust to hit after that. So we we all want nice neat things where Okay, the the market peaks, and then you get a bust, but unfortunately because of the way this has happened, and because you’re getting money beyond anything that’s ever been pumped before you can get this run up in the market, in spite of the fact that we’re, you know, the bust is not gonna leave us we’re not gonna start the bust and then not we will have I think, a, some sort of a V recovery for a quarter, maybe two, because of all this money. But ultimately, it’s all one bust. I mean, we are at what I described this as, as the front end, the front edge of the bust. And then we’ll see you know, the, the much bigger part of the bust later. The damage has been done. Money can fix things in the short run in terms of the markets and and particularly, you know, the, the bond markets and can postpone some of the worst of this. But the damage has been done, you know, we shut down first the second largest economy in the world completely, almost completely and then the first one or the first largest economy in the world in terms of the US. So, that’s unprecedented. And, and so, you know, you can fix some things, you know, you can certainly provide people liquidity and money to get by before they can be reemployed. But you’re gonna see an awful lot of damage that was done not get repaired. It’s, you know, at least not not anytime soon, so, so we’ll be dealing with other aspects of this as we go along. But that does not preclude this big rally. And I think you’re just you’re overwhelming the market with money. Yeah, and that’s not by the way, that’s not what the Fed is intending. I hear that all the time. Well, the feds just propping up the market. No, the Fed is doing what they should do. And I think that was a question last week and while ago, I do think what the Fed is doing is absolutely necessary. They are I was probably as critical as anybody on wall street of Jay Powell. Maybe the most critical analysts out there have Jay Powell for the last two plus years. I will tell you now I’m, I’m in his corner. I’m saying he has moved up the learning curve very rapidly in the last few weeks. And he’s on board now. And I think doing the right things. So we always knew he was a smart guy. My problem was, he was he was a lawyer, not a, an economist, and had really had limited experience in monetary policy. And he was way behind the curve all through the last two years. By the way, cheerleaders on by much of Wall Street, I would say it was the shallow narrative on Wall Street, was that the Fed was too easy and needed to shrink the balance sheet normalize interest rates, and he listened to that. And I kept saying, Don’t listen to the consensus on Wall Street, they’re wrong. And now we’re seeing why.

Nathaniel E. Baker 9:55
Yeah, interesting. So because a lot of what we see here, that commentary from Wall Street and elsewhere, there seems to be a debate that, of course, a lot of this is short term focus, right? So people are saying, well, we’re going to revisit the lows of March, just watch. This is a dead cat bounce. And everybody else is saying don’t fight the Fed. By now this is going higher. But from what you’re saying it sounds like these can both be true that this bounce will last a lot longer. Maybe then people were anticipating if it goes into into the summer, in labor day, and on the one hand, but then also that it is going to result in a drop in a pretty cataclysmic jobs in the sound of it what you’re saying what are your targets on the downside once we get after Labor Day, and once that happens?

David Hunter 10:44
Yeah, so let me just clarify that. The I call it the retest narrative is kind of the consensus narrative out there that this rally is nearly done that you you’ve retraced 50% of the drop that we had in March. We’re gonna roll over and retest. And of course, many thought we were going to retest from 2500. So it’s gone, you know, two or 300 points higher, and now there’s a Okay, here it is we’re going to retest. So that’s the retest narrative that’s out there. And I totally dismiss that. I don’t think we’re going to go back to the lows anytime soon. The time we revisit the lows is after we have this final leg up into a secular top so I, I don’t use a term retest when you go back after another upper leg to have, you know, a higher high. So I think the retest narrative was just wrong. I could be wrong, but at least that’s how I see it as it were. We’re going to have pullbacks along the way. But I don’t think we’re going anywhere near the lows again until we get back up over 4000 on the S&P so okay. So in terms of the next what follows the final leg up is what I am calling a bear market of of historic proportions. I expect a peak to trough decline from that high. And that high might be 4000. The S&P might be 4500. Well, 4000 is my minimum expectation. So from that high this summer, I expect an 80% Peak to trough declines. So, you know, if it’s 4000 takes you down to probably 100 on the s&p, if it’s higher, we’ll get quite that far down. But, but so the biggest basically the biggest bear markets since the ’29, crash, and it’s it’s an unwind of decades of, you know, debt build up to leverage levels we got, we have $250 trillion in global debt, and what people don’t talk about which I consider, you know, another form of leverage is we’ve got quadrillions and notional value of derivatives. And those are both tools of leverage that work great. On the way up, and is why we’ve had, you know, the reach the heights we have, but they really punish you on the way down. So, I think and they also speed up any declines. So I think the unwind on 80% decline can happen faster than what we saw in 2008/9. So we can we can go from peak to trough in less than six months.

Nathaniel E. Baker 13:26
And you think there’s enough systemic stress in the system to warrant that kind of fell off? Like, where are the like that would kind of involve a lot of problems in the economy, I would suspect. You speak of a debt build up and things like that. But somehow, you know,

David Hunter 13:45
we’re looking at it right now. You look you look at where we are today. And you really, you can become pretty dire about coming out of this. I know there are people out there that want to say you know, you get the economy back working and everything’s fine again, as I said before, I think there’s a lot of damage that’s been done that will not be repaired with money. And, and, again, if we didn’t have leverage on the system like we’ve never had before, you could possibly have the time to repair things and not have, you know, the freight train coming at you from the other direction. But the problem is with all that leverage, it doesn’t buy you times, you know, you really, things have to have to get turned around very quickly. And it’s it’s not within I think any policymakers ability to do what needs to be done. I mean, massive money. And I and by the way, I’ve said this for many years, the Fed balance sheet and I was saying this when the Fed when when the narrative on the street was the Fed needs to shrink the balance sheet down from four and a half trillion down to 3 trillion or whatever, and maybe lower, and I was saying what we’re going to see In the bust, is the Fed balance sheet grow to 20 trillion or more?

Nathaniel E. Baker 15:06

David Hunter 15:07
I think it’s gonna be more. So we’re, we’re probably moving pretty rapidly towards 10 trillion. But when that second shoe drops, I think we’ll roll right past 20 trillion and maybe even go to 30 trillion, I don’t know. But that’s, that’s the problem is when you have an unwind of leverage, you have no choice. I realize there are a lot of people out there, a lot of people on wall street that want to say, let it break, you know, just let the system cleanse, don’t try to prop it up. You know, as I say, the people that say that, if we follow that prescription, we’ll all be living in a cave. You just can’t allow a system that’s leveraged to the degree This one is to just unwind it and even even if you want to argue that point that it’s going to come one way or the other. So do it. It’s not going to happen. I can, as I say, the people, I don’t moralize or theorize, I forecast. And I can tell you that what’s predictable more than anything else, is how the policymakers are going to respond. It’s pay me now or pay me later. You know, if they, if they are slow to respond, it just means they’re going to be responding in a much bigger way, you know, days or weeks later, you know, that there’s no policymaker is going to just let this thing unwind and watch, you know, watch millions of people suffer. Right?

Nathaniel E. Baker 16:33
Right. But then the flip side of that is that, you know, these, these injections of liquidity seemed to work, right? If you go back to 08/09 it kind of worked in salvaging the economy. And more recently, now, they’ve worked again, and it looks or maybe you’re saying that they won’t, but the point is that like once there is a bigger crash, can they just do the same thing and just, you know, unload even more stimulus?

David Hunter 16:57
Yeah, there’s a few answers to that one. As I said before the money will certainly drive the market higher, at least for the time being the money will certainly help postpones problems in the credit markets. The money can put businesses back on their feet. But there’s so much slippage in there’s a lot of things that you can’t reach with money, and a lot of things you can’t fix. And of course, we’re also dealing with a virus, you know, a virus that is beyond anything we’re used to dealing with, and it’s going to take time to get that fixed. No vaccine will go a long way. But, you know, the, the optimistic views on that are that, you know, we could have a vaccine within a year, year and a half.

Nathaniel E. Baker 17:50
All right, David Hunter contrarian macro advisors. I want to take a short break, and then come back and ask you some more questions about this very interesting topic. But let’s first take a short break,

Moderator 18:04
you’re listening to the Contrarian Investor Podcast. You’re on iTunes, Spotify, Stitcher, and other platforms where podcasts are found. Subscribe and supply an honest rating. We on social media search for Contrarian Investor Podcast on Twitter and Instagram. You can find us on LinkedIn as well go to We want to hear from our listeners, email your thoughts to A repository of all podcast episodes and materials is available on our website Now back to the program. Here’s Mr. Baker.

Nathaniel E. Baker 18:46
Ok welcome back we are back David Hunter, Chief macro strategist at contrarian macro advisors. You have a big following on Twitter, where your handle is @DaveHContrarian. I’m active on Twitter as well, as we all know, this is the segment of the show where we talk to our guests a little bit about his or her background, and how he or she came to this stage of his or her career. And we didn’t do that last time when I had you on in August, I think so, was very much looking forward to making up making up for it now. So maybe you can tell our guests a little bit about how you got started in this business. A little bit about what your education was like and what brings you to the present day.

David Hunter 19:36
Sure. So I’m going on 47 years in the business. I was a finance major way back in college and knew I wanted to get into an investment business. So right out of college, took what I could get at that point back in 1973. was able to get into a bank investment department and work Way through eight years of bank investing, as I say, early on, I was lucky because it was a small enough bank where our investment people did both bank portfolio, which is mostly, you know, the bank’s bonds positions. And then also trust portfolio which was, you know, involves a lot more equity investing. So I got both to go to a big bank usually kind of have to choose one or the other. So I was kind of exposed early on to both and I think that really helped my, my macro skills to be able to do that. And then back in the early 80s ended up with Textron, which was a fortune 100 company where they had pulled all their money in in house and we’re managing their pension money. You know, so I went in there as their equity guy. They had been very much a bond house and a private placement house or over shop until they realized in 1980 market that they missed the energy stock run up. And it dropped their performance down from top quartile. So they brought me in. I was told by the street to be careful because it was a dead end for equity investors and I was pretty confident, you know, what behind the ears 3030 years old, or there abouts and thought I knew everything about investing. So they’re saying I can do it. And I basically started early, early on from late 1981 saying we’re in a bear market. But this will end and you know, let’s get our ducks in line to, you know, put money into equities when the time is right because I have a very low equity position, which is why I was hired what what year and I joined them in December of 81. And in August of 82, which was the bottom of the market, I went to the Investment Committee and said, I think it’s time we started putting money and I went from when I joined them, they had 10% in equities. And most of the equities they had were really low flow equities, almost private placement for themselves. And just companies that were not not really in the mainstream of equity, business, just kind of things they understood from private placement standpoint. I took them from that 10% by the time I left, five years later, to 50% equities, and the pension asset has doubled. So those 50% have a much larger posit at that time, too. And, and it was because from almost day one of putting the money in top one, one percentile performance for the five years I was there. So that kind of the I guess I And I dragged them kicking and screaming because they kept saying, you know, are their former chairman Benji William Miller went on to be the Fed Chairman back then. And they’d say, and they respected them greatly. And they say, gee, William Miller said, we should never do this. You should never put equities, you have heavy equity emphasis because of what happened in the 74 bear market. And it took just the credibility building of time where we just kept putting more money in because performance was so good. So that, yeah, that kind of set my career off, where I went from there to running. I went to fidelity for several years running pension money, and then was ultimately was a chief investment officer. I ran the Hartford’s active equity area for a few years and then went on as Chief Investment Officer of a firm on Madison Avenue in New York. So so it was kind of a winding path to career. And then that was early 90s, mid 90s. And about the late 90s. I started off on the sell side as a macro strategist and have been doing that ever since.

Nathaniel E. Baker 24:16
Wow. So that’s a very long career. 47 years is, interestingly enough, probably longer than anybody else who’s on Twitter, I surmise to say

David Hunter 24:26
There are a few of us out there but probably not that many. And and it’s it really is, as I say to people, it’s a different thing when you’ve lived through these cycles, as opposed to reading about them.

Nathaniel E. Baker 24:39
Yeah, I bet. I bet.

David Hunter 24:40
They really do. And you learn pieces along the way. every cycle was different and new. You have really learned so so I certainly where I am today as a strategist and I have a lot of conviction on my calls, typically, because I have that experience behind me.

Nathaniel E. Baker 24:56
And this whole history of course, I’m curious I like what it was like in the 70s. Was there still a, and I probably would have been a living memory of the Great Depression and the 29 crash? And was that still around there to kind of shape the narrative of things with or was that mostly gone at that point?

David Hunter 25:13
Yeah, that was mostly gone. I think. you had a long bull market from the early 50s, right? post World War Two through the 73 Peak, which was a nifty 50 Peak. And so, you know, I came in and actually I credit a lot of my value orientation and risk averse style, too. The fact that I came into this business, very close to the peak of the 73 bull market, the bull market that peaked in 73. So you had the nifty 50, basically, the top 50 stocks, male dominated the run up, it was a very narrow market into a top and then you had up until 2008, basically the worst bear market we had had in the post World War Two era was trying to run this market. And so I learned very early on and I had a good, good boss at the time. We did good avoiding a lot of the risk. And I learned very early on the importance of, you know, the risk side of the equation, not just the return side. I credit that kind of set my career off in the right path.

Nathaniel E. Baker 26:29
Hmm, interesting. Yeah, of course, one thing that does come to mind with, you know, such a long career and something that I’d like to ask all guests who’ve been around for a little while now is how this current crisis compares to the ones that you’ve lived through. Or if it did, the easy answer, of course, is that it doesn’t which in some ways, of course, it’s true, but what would you say there?

David Hunter 26:50
Yeah, there are obviously there are always similarities in some of the things but for sure, this is, this is something that I’ve never seen before. We’ve never experienced before, you know I, I was one of those I got a lot of pushback. Because I was calling for this, this bust. And people said you’re not going to have another 2008 nine so quickly on top of it usually that’s a once in a generation thing. And then and I said we’re, you know one of my arguments and this is when we’re we’re at the latter end of a supercycle and I described super cycles as a cycle. The Super cycle is a cycle, the long cycle that starts after the last depression and ends with the next depression. So So, you know, the Great Depression was last depression. We’ve had lots of recessions in between. But now we’re in what I would say the last decade of that supercycle and those supercycle is just get more volatile, with ever greater risk as you move towards the end of it. So and they also move to a more you know, to a paradigm so I that’s a lot of why I think we’re seeing what we’re seeing. It’s, you know, certainly the virus couldn’t have been predicted, but something else would have come along to create, you know, a bust. So I don’t think we have ever seen anything like this. We’ve never been so leveraged as we are today and certainly not from a magnitude of dollars. Certainly you had leverage at the end of the 20s and it was one of the reasons why we had the Great Depression. But when you look at the massive dollars and the massive currencies of massive debt across the globe, we’ve just never been here before.

Nathaniel E. Baker 28:45
Can you make the point that like, 08/09 was some somewhat of that event because a lot of this if you know, you’ll forgive this is a lot of this really is vocabulary, right? Like the term depression was a pretty common one, if you go back into the, you know, the 19th century in the early 20th century, like what we now call recessions, I think they kind of called depressions. I don’t think the term recession was even around them. And post war, as you know, there hasn’t been a depression, but the 08/09 thing I mean, they call it the Great Recession, which is, I think, completely wrong, because it wasn’t, I mean, it was something that was created by financial engineering and a whole bunch of other things. And obviously leverage in the in the housing market and some insanity there. But this to imply that the recession itself was great, I think is inaccurate, but that’s another topic for another day. But the point is that isn’t it a little isn’t it that just like yeah, couldn’t you make the point that 08/09 was that that unwind? And was that depression?

David Hunter 29:45
Yeah, I would. I would disagree actually, because I I am big on terms. I do think we heal. Some people think it’s semantics, but I do think we need to have common terms. I view depression and I think the general definition of depression is something that’s long lasting, you know, it’s it’s a deeper downturn This causes greater hardship and lasts longer. And maybe that’s because the Great Depression lasted most of the decades. But that’s that’s what I would say is that depression, recessions, you can have recessions within the depression. And so you know, you had you had a recovery after 32. And then, you know, another leg down. So, I think we get too often we people see I see this on Twitter a lot. People see turns used, and then they start throwing the term out and they misuse it. So the last February and into March. People were saying we were in the melt up of the course I’ve been talking about upcoming melt up, and I kept saying, this isn’t the melt up. You’ll know the melt up when you see it. It’s going to be you know, this is a this is a great rally. But this isn’t the melt up. And same thing with the bust. People use the bust for every kind of every time the market goes down sharply. They say, oh, there’s the bust. No, that’s not what not what I’m referring to a bust. As I said before, it’s something in between a depression or a recession. So I I do think time is is what separates a depression from a recession. And I get excited about using the term great in the same text with recession seems kind of oxymoron but but I I accept that because of this saying it’s a bigger recession than we normally have. You know, it’s something that was bigger than our normal recession, but not quite a depression. I actually think and I’ve been saying this for quite a while that when the bust hits the reason why I was so sure it wasn’t the end that we would have a recovery cycle of significant magnitude. Because in deflation, the Fed has virtually unlimited, unlimited ability to print money, because the reason you stop printing money is because you fear inflation, right? in depression in deflation, they will print and if it’s a deflationary bust, they’re going to be dealing with what’s right before them as we are now. You know, the economy shut down, people were out of work. The capital markets are, you know, at very high risk, they’re going to be dealing with that and worrying about worrying about inflation later. And so I figured they can take back the money later if need be. We got to deal with what what’s right before us. So and I predicted that I mean, when people were saying the feds almost out of bullets because rates were at 1%, you know, settling rate was at 1%. I’d go or one and a half percent or 2%. They’d say, you know, they don’t have the normal room to look lower rates go by rates only part of the equation they have, they will have unlimited ability to print money. like they’ve never had ability to print money before because we haven’t been in deflation since the 30s. So, and that’s exactly what you’re seeing now is the mentality is rates are close to zero, we can we know the Treasury can sell bonds and at least the cost from an industry standpoint is is low, if almost non existent and and the Fed can print money and the cost in terms of starting a an inflationary fire seems to be not present, you know, now, I will say that, what I believe follows this is going to be our first inflationary recovery cycle since the 1970s. And that’s where I have a huge advantage I live through. You know, that was where I cut my teeth was in the 70s and the early 80s. Most people today, investing I’ve never seen an inflation cycle they’ve only seen disinflation. So that’s what I think will come out of all this money. And as I say it could be 20 or 30 trillion before we’re done, and every other central bank doing proportionally similar. So we will see a global inflationary cycle, probably even that exceeds the one that ended in, you know, 20% inflation back in 1980/81. And but the inflation is not this year, it’s probably not much next year, it will build fast once we get beyond 2021. I think we could go from zero inflation actually negative probably negative three, four or 5%. Inflation, inflation, so deflation, to what I think will be 20% inflation within one decade, and less, probably six, seven, eight years. So it will ramp up fast once it gets going. But you’re probably two years away from that being the case.

Nathaniel E. Baker 35:03
You think the Fed is gonna come in and buy stocks here before we’re done?

David Hunter 35:06
I would not be surprised. I don’t think they’ll do it here. It won’t be during this leg. I think if it happens, it’ll happen, you know, in the 80% bear market? And I’m not sure. I wouldn’t be surprised. I think they’re going to buy anything they can. That’s how you’re going to get to 20 or 30 trillion in a balance sheet. I mean, we throw around trillions like we used to throw around millions and ]

Nathaniel E. Baker 35:35
Yeah, a trillion here a trillion they’re pretty soon you’re talking about real money.

David Hunter 35:38
Right. Yeah, exactly. And it’s huge. So I would, you know, they’re gonna, they’re, you know, they’ve taken the step almost to there but supporting the junk bond market, right. So I don’t think it’s a leap to think they will get there. But I would tell you, it’s not between the oil and this. The top here, not between them the summer. I think do you know when that second shoe drops? We’ll see the hands never seen before.

Nathaniel E. Baker 36:05
So yeah, one thing i and this is maybe outside the confines of your expertise, but when it comes to these type of depressions and these major cataclysmic events in the economy, I like to say it’s a little bit like physics, there’s always an equal and opposite reaction. And we all know what happened in the in the 30s, in terms of geopolitics and stuff, and there’s always kind of, not always but very often the nasty undercurrent for some, some kind of effect of economic malaise that people weren’t anticipating. You know, we’re civil society starts to disintegrate a little bit or a lot even right and right now, you haven’t happened here. But you know, you go look outside, you look at, you know, in places like Venezuela there’s, there’s a number of at any point in history, there’s going to be a number of failed states that are existing. So I’m wondering if you thought about that at all and about the effects of this, you know, meltdown and this next depression, or whatever it is and what might happen there. And maybe not even over the long term, but just over the short term, we talk about the timing of this, if this happens in September, October, there’s a little bit of a little election coming up here in November, where a certain President is looking to be reelected. And one would think the chances of that are not going to be very good if there is a massive meltdown in the third and fourth quarter. But yeah, so I was just wondering how you thought about all those topics?

David Hunter 37:38
Yeah, I think for sure, you’re going to see politics change, you’re going to see, we’re already It’s amazing. We were talking about universal income. You know, Andrew Yang certainly was that was his platform. And as a capitalist, I call it nonsense. You know what Do you like it give everybody $1,000 or thousand dollars a month or whatever they were talking and and now we’re there. Yeah. So but but I think it is different. I mean, I have heard people this past week say, and these were, you know, commentators on business shows, asking the question saying, aren’t we basically endorsing that now? are we really talking universal income? And are we going to see that going forward? And I thought, No, this is, this is a response to, you know, an event nobody foresaw and where we had to shut down the economy. So that’s quite different than kind of ongoing, universal income for, you know, less advantaged, but I do think socialism is certainly something that’s going to keep pushing its way here. Because of because of what’s going on, you know, there’s gonna be a lot of insecurity and a lot of people willing to hold on to that even though we were look around the globe, and it doesn’t have a very good history. But in terms of anarchy or more, you know, higher crime, certainly you’ll see it, I don’t think as much right now, probably, to some extent, in the second shoe drop, or the bust. But I think we’re really where the society really breaks down is following the next recovery, as I said, because of deflation. We have the ability to pull ourselves out of this as bad as it’s going to be. Once you have that recovery cycle. If we truly go from negative inflation to 20% plus inflation. You’ve taken the central bank’s out of the ball game You know, they know longer have the ability to print money. And that’s the only thing that extends this cycle, if let’s say the Fed

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