David Brady: The Insolvency Endgame
Tom welcomes back David Brady, CEO and Co-Founder of Global Pro Traders.
David believes there is further downside risk in the metals based on Elliot Wave theory. The Fed printed trillions in stimulus earlier this year, but then they cut treasury purchases in July, and congress cut stimulus to Americans in August. Those actions increased demand for the dollar, causing gold and silver to fall back. Over the coming months, the dollar could move higher. Tensions are high due to failing tariffs with China, trade imbalances, and uncertainty around the US elections.
David says, “A new stimulus program is likely since the alternative is a systemic collapse of everything.” The US treasury cash balance is usually around 400 billion but currently sits at two trillion and that money is waiting on the sidelines and inevitably it will be spent on something.
The economy remains in meltdown, and an additional stimulus program will meet any sharp drop in stocks. It doesn’t matter who ends up in the White House as either party will push for more stimulus driving stocks higher.
Today, there is deflation occurring in discretionary items, while inflation surges in necessities like food, lumber and it could spill over into energy. Inflation may be problematic, if not impossible, to reverse once it begins. Imagine massive stimulus programs, while fewer and fewer products are available to buy on store shelves. The debt picture for the United States is exceedingly grim.
David lays out a long-term scenario where gold and silver outperform while the major miners excel, and the juniors beat everything.
Time Stamp References:
0:55 – Short term risks and previous calls.
6:50 – Markets are ready to explode.
15:55 – Politics does it matter?
20:00 – Stag-In-De-Hyper-Re-flation forecast.
27:50 – Trade deficits and debt.
33:30 – Yield caps and bonds.
37:00 – How banks are positioned in metals.
40:00 – Data conflicts with the prevailing narative.
46:00 – Silver just buy it.
Talking Points From This Episode
- USD strength and possible further pullback in the metals.
- Uncertainty in elections and trade may be bad for stocks.
- Additional stimulus and the treasuries cash balance.
- Stagflation and the risk of runaway inflation.
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 moved on to manage 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.