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- David Hunter, the primary macro strategist at Contrarian Macro Advisors, thinks the worldwide economy remains in the middle of huge “bust” including two unique phases.
- Stage 2 of the bust– which Hunter is anticipating to happen in late 2020 or early 2021– will be “steeper and much deeper” than the ongoing first stage.
- When all is stated and done, Hunter believes the stock exchange can lose as much as 80%of its value.
- Due to extraordinary stimulus and inflationary pressures, Hunter believes gold can hit $10,000 or higher in this years.
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The method Hunter sees it, the bust will take location in 2 parts: (1) The initial shock and short-lived healing (2) The “steeper and deeper” drawdown.
However according to Hunter, phase 2 isn’t far off.
Hunter’s insolvency forecast echos that of John Hussman– the outspoken investor and former teacher who’s long forecasted a market collapse.
Bloomberg, John Hussman.
When these insolvency issues are combined with extreme debt and leverage– two metrics Hunter has been monitoring like a hawk– it’s a dish for catastrophe.
” We have debt beyond anything we can ever manage,” Hunter stated in a previous interview on “ The Contrarian Financier Podcast.” “When you get these surprises, that leverage really worsens whatever decline you get.”
An 80%drop in stocks and $10,000 gold
Prior to the huge unwind Hunter sees coming down the pike, he thinks markets will experience a starved “melt up,” resulting in brand-new all-time highs.
Still, when financier spirit runs dry and the economy is still in dire straits, Hunter believes the relax will take hold.
Hunter’s thinking behind his outlook works like this: extraordinary stimulus leads to inflation, which leads to a weakened US dollar, which leads to a gold rally.
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