Tom welcomes back New York Times bestselling author, CNBC contributor, and Political Risk Expert Larry McDonald.

Larry discussed the impact of political decisions on the U.S. economy and markets. He highlights the concerning trend of deficit spending relative to GDP, revealing that it cost the U.S. $834 billion to grow the GDP by $334 billion in the last quarter of 2023. He predicts a continued focus on short-term economic growth by politicians to retain power, leading to an inflationary economic environment. McDonald also discussed the potential implications for banks with commercial real estate holdings, emphasizing the need for Federal Reserve intervention as the market faces a significant downturn. He warned of a potential economic crisis if the Fed raises interest rates, putting stress on both banks and consumers.

McDonald shares his insights on an impending energy crisis around 2025-2026. He attributes this coming crisis to factors such as population growth, improved living standards in developing nations, and inadequate capital investments in energy resources. He underscores the impact of geopolitical tensions and climate change on supply chains and inflation, shaping a shift towards a multipolar world order. McDonald suggests that these changes will influence the performance of precious metals, with potential disruptions creating opportunities for investors. He also emphasizes the importance of addressing sustainability concerns, noting that progress in this area may be slower than anticipated. McDonald’s forthcoming book, set to be released in March, delves deeper into these pressing issues.

Time Stamp References:
0:00 – Introduction
0:42 – Politics & Debt
5:32 – Democrats & Spending
10:12 – Loosening Talk & Effect
15:28 – Banks & Commercial Losses
19:27 – Economic Realities
22:37 – Wealth Concentration
27:54 – Risks – Stocks & Banking
31:28 – Geopolitics & Conflicts
38:10 – Precious Metals
43:24 – Green Energy & Metals
46:54 – Book Announcement
48:54 – Wrap Up

Talking Points From This Episode

• Deficit spending costs: U.S. spent $834B for $334B GDP growth in Q4 2023.
• Banks face commercial real estate crisis, may need Fed intervention.
• Predicted energy crisis 2025-2026 due to global factors and capital shortfall.

Guest Links:
Website: http://thebeartrapsreport.com
Twitter: https://twitter.com/convertbond
New Book – Amazon: https://tinyurl.com/2capfzt9

Larry McDonald is a New York Times bestselling author, CNBC contributor, and Political Risk Expert. He is also the creator of The Bear Traps Report, a weekly independent Macro Research Platform focusing on global political and systemic risk with actionable trade ideas.

Thought-provoking Larry McDonald presents his captivating views on the Trump Administration, U.S. Financial Crisis, European Sovereign Debt, and China’s Economic Meltdown – spiced with actionable risk indicators, risk management lessons, and sprinkled with humor.

In 2016, Larry McDonald joined ACG Analytics in Washington D.C., as a partner with a unique skill set, as one of today’s leading political policy risk consultants and strategists. From 2011 – 2016, he was Managing Director and Head of U.S. Macro Strategy at Society Generale.

In 2010 he founded an investment research firm which publishes the The Bear Traps Report, focused on Political and Systemic Risk with actionable trade ideas. Larry makes weekly appearances on CNBC as a contributor focused on political and economic risk and opportunities.

In late 2006, as Vice President at Lehman Brothers, he led his team into betting against the subprime mortgage market, profiting the firm over $2 billion before its demise. In 2009, he wrote the international bestseller A Colossal Failure of Common Sense, The Inside Story of The Collapse of Lehman Brothers – translated into 12 languages, selling over 400,000 copies.

Prior to working at Lehman, he was the co-founder of Convertbond.com, a website that provided convertible securities information with news, valuation, terms and analysis tools for convertible bonds, convertible preferred stocks, and other convertible securities. Convertbond was acquired by Morgan Stanley in 1999.

Larry McDonald’s proprietary risk indicators and risk management lessons are designed for Family Offices, Sovereign Wealth Funds, Hedge-Funds, and any investment group working to avoid the dangerous pitfalls in the post-Lehman financial markets.

McDonald was featured in the Academy Award winning documentary: Inside Job, and also featured in National Geographic’s award winning documentary: The 2000’s. He is a regular contributor on Bloomberg TV and Radio, Forbes, CNBC and Fox Business.

Larry has delivered over 125 keynote speeches worldwide. He details the complexities of the political policy implications of the Trump Administration and their relationship with Congress. Larry also adds the Lehman factor to his speeches, ‘why it was allowed to fail’, and above all – valuable risk indicators which help investors avoid the aftershocks that continue to rock the global economy until today. His presentations are thought-provoking and captivating.