Tom welcomes back David Brady, a former money manager, Sprott Money contributor, advisor to 4779 Capital, and Substack publisher. Brady shares his perspective on the current state of markets versus the economy using his Five Pest process. He expresses his belief that a stock market crash is inevitable, with the S&P 500 potentially reaching around 1000. Brady warns that the Federal Reserve will likely intervene to prevent a major market drop and discusses his expectations for bonds, currencies, commodities, Bitcoin, gold, and silver markets.

Brady believes both gold and silver have been correlated recently but notes a disconnect with silver prices. He attributes the current strength of the gold market to Federal Reserve plans to cut interest rates, a weakening dollar, potential escalation of conflicts in Ukraine and the Middle East, growing fiscal deficits, increasing demand from central banks and countries like China and India, and bullion bank squeezes. Brady predicts that miners will eventually catch up with the metals’ price rise but may initially lag behind due to rising energy costs.

David shares his perspective on how miners might respond once the Fed cuts interest rates, acknowledging uncertainty about whether this could be the catalyst for miner outperformance or if it’s already priced in. Silver could also surpass gold’s performance based on historical trends, with silver often underperforming gold but catching up during major rallies.

David emphasizes the importance of looking at inflation-adjusted highs in gold and silver markets. David’s investment strategy involves tracking the beta between miners and silver, buying high beta miners when he believes silver is about to rise, selling when he thinks it’s near a top, and holding until silver drops significantly to validate the trend.

David discusses the potential impact of the upcoming US election on monetary policy and markets, with both Trump and a Democrat potentially winning but differing approaches to fiscal spending and interest rates. He labels Trump as an inflationist and expects him to put pressure on the Federal Reserve to lower interest rates, which could contribute to inflation and benefit gold and silver.

Lastly, David also mentions his concern about larger investment funds that only rebalance their portfolios quarterly or monthly. He emphasizes the importance of being prepared for financial instability by holding physical metals, farmland, becoming self-sufficient, and paying off debt.

Timestamp References:
0:00 – Introduction
0:40 – Davids Market Outlook
6:12 – Fed Reaction & Banks
11:56 – BRICS ‘The Unit’
15:05 – Equity Drawdowns & Metals
16:06 – Performance Gold Vs Silver
23:10 – Fed Cut a Miner Catalyst?
26:08 – Silver Chart
35:25 – Inflation Adj Highs
39:10 – High Beta Miners
45:00 – U.S. Political Outlook
54:08 – Drawdowns Vs. Physical
56:22 – Have a Plan B & Skills
1:00:22 – Crisis & Big Funds
1:04:50 – Wrap Up

Guest Links:
Substack: https://fipestreport.substack.com/
Fund Website: https://4779Capital.com
Twitter: https://twitter.com/globalprotrader
Sprott Money: https://www.sprottmoney.com/writers

David Brady has managed money for banks and businesses for 25 years. Mr. Brady is a CFA charter holder and holds a bachelor’s degree in Business Studies and Financial Markets from Dublin City University. He started as a foreign currency trader in USD/DEM and managed multi-billion dollar bond and foreign exchange portfolios for multinationals such as eBay and Salesforce.

He has always been interested in financial markets, winning investment competitions at the age of 15. Scoring the highest grade for his graduate thesis, “Is the ERM (Exchange Rate Mechanism) Fatally Flawed,” in 1993, and won foreign currency spot, forward, and bond trading competitions at 23. Suffice to say that financial markets have been his passion for much of his life.

David is a native of Dublin, Ireland. He moved to the United States in 1998 and now lives in Ontario, Canada, since 2015, with his wife and four kids.