November 14, 2025 – Are the days of tech dominance numbered? In this wide-ranging discussion, Jim Puplava and Greg Weldon warn that the so-called Mag 7 tech stocks are faltering, jeopardizing narrow market leadership and exposing investors to heightened risk. Surging capital spending on AI and data centers is reducing reliance on human labor, fueling layoffs and wage stagnation. Meanwhile, U.S. consumer debt is rising, and the Federal Reserve remains behind the curve. With the national debt set to soar, more money printing and dollar debasement seem inevitable. As economic and political pressures mount, gold and silver emerge as strategic safe-haven assets for the future.
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Summary
- The Mag 7 tech stocks (like Meta, Nvidia) are showing signs of breakdown and vulnerability, raising concerns about market leadership and concentration risk.
- Massive capital spending is focused on AI and data center buildouts, often at the expense of jobs, as companies aim to reduce reliance on human labor.
- Layoffs and wage pressures are increasing, with large job cuts at companies like Amazon, UPS, Verizon, and even pay cuts at Walgreens, indicating weakness in the labor market.
- The Federal Reserve is seen as behind the curve on interest rate decisions, having been too slow to react to both inflation and economic slowdowns.
- The consumer is under pressure, with credit card debt exceeding savings and personal consumption outpacing income growth.
- The U.S. is stuck in a “debt black hole,” with federal debt projected to reach $50 trillion; servicing this debt may force the government to print more money and risk further currency debasement.
- The risk of a stock market correction or crash is rising, with passive indexing amplifying both upside and downside moves, especially when everyone owns the same stocks.
- Precious metals like gold and silver are seen as strategic assets, with central banks accumulating gold and silver recently declared a strategic metal by the U.S. government.
- There are growing concerns about wealth taxes, state-level policy risks (e.g., California), and the potential for taxpayer flight and corporate relocations.
- Rising political and social polarization in the U.S., combined with economic pressures, could sow the seeds for social unrest or even a “tax rebellion.”
Transcript
Jim Puplava:
Well, we’ve been talking about the Mag 7 for the last couple of years, but if you look at the markets today, the Mag 7 could be in trouble. Let’s find out. Joining me on the program is Greg Weldon from Weldon Live. Greg, you’ve got a couple of charts of key significant stocks—Meta and some others—that are breaking down. So let’s take it from the top, because the financial media and investors have been so focused on tech stocks, and especially the Mag 7.
Greg Weldon:
Yeah, I mean, the whole thing here is about data center buildouts right now. I mean, that’s where all the capital spending is going—even to the degree that if you look at the Fed surveys, which ask about capital spending, it’s all basically aimed (and these words are actually used in the Fed surveys) to reduce reliance on human labor. So, I mean, this all ties into one big picture where you have several stocks leading the way. These are the big buildouts of AI and data centers. What’s interesting to me is you’re using a lot of capital to do this. A company like Meta is hiring as if they’re like an NFL team hiring free agents, you know, as if it’s George Steinbrenner’s New York Yankees breaking the bank in free agency. So, in that sense, it’s kind of like, well, doesn’t that have an impact on these companies and the results and these earnings? Take something like OpenAI, where they want to borrow money to build out data centers, and it’s all this energy consumption, too. So you want to tie in the labor market, the stock market, capital spending, and even energy usage all into this one big picture that is bubblicious to the max, in my opinion. And when you start to see the breakdown in the leadership and you have no other leadership to fill the gap, and it’s so narrow now it’s not even funny, that to me is a problem. You don’t have it in the consumer, who is in a crisis. You don’t have it from housing, which is in a crisis. The labor market is now suffering deflation. The Fed is paralyzed because of their fear of inflation—which, to some degree, is justifiable—but they’re going to have to acquiesce to higher inflation to save the economy and the consumer at some point. But all this is lost on a stock market that is so focused on this one area when it lacks everything else. To me, that makes it very dangerous. And it just reminds me so much of many times—I mean, you and I, Jim, have seen this movie before. 1987, okay, 2000, I mean, 1990—a deep recession. The first time Greenspan brought interest rates to 3% against a 3% inflation rate, which was considered unheard of—to have a zero real interest rate. All right, that progressed into 1997 with a currency and global bond market crisis. 1998, Long Term Capital Management, 2000—very similar to this, sock puppets. You remember the sock puppet, Pets.com? I mean, you have a lot of similarities in that context, and especially in 2007 and 2008. And it harkens back to ’87, and 2007 and ’08 in a way that is—you’ve had these kind of false starts to the downside. Then, you know, the Wall Street money comes in and lifts the market, like they tried to do this morning. And to some degree, they’ve been successful. And while we see all these things that, to us, lead to a major problem here in the not-too-distant future—and I’ve been saying this for a couple of months now—and I was never one that said this would be a crash. I thought it would be more of a slow bleed. The more that this thing has built, the more the risk of a crash has gone up, in my mind, to at least a significant and deep correction. And being early versus being wrong is always one of those things we talk about in this business. If you say something for four years and you’re wrong for four years, but then it happens, and you say, “Well, I’ve been right the whole time.” Right, well, that doesn’t work when you’re managing money, you know, you’re managing risk. And we’ve taken a couple of stabs at the short side of the equity indexes. And we’re actually in our first quarterly drawdown in over three years right now, trying to catch the next move in stocks, which I think is going to be a dramatic move to the downside. And I think this most recent—well, we got short very well, early, early, early this week. And it’s played out quite well through the last couple of days. And I think next week is going to be a telltale week, with all kinds of key technical pivot points set up, all kinds of massive bearish divergences, and all kinds of failure here in leadership—that has been the leadership to the upside, that is, you know, bidding to become the leadership to the downside.
Jim Puplava:
Now, let me throw something out. Exactly one month ago, the probability of a December rate cut was 94%. Fast forward to today, it’s less than 50. We have not had, Greg, really good economic numbers because of the shutdown. But, you know, I just saw a story today: Verizon, layoff 15,000; Amazon, 40,000; UPS, 45,000; Google, what, 510? What happens in your mind if all of a sudden these numbers are brought up to date and the Fed finds, oh, the unemployment isn’t 4.3, it’s 4.6, and we actually lost jobs?
Greg Weldon:
Well, I think that’s coming. I mean, what you said is exactly right. I’ve been saying this. I mean, at the last Fed meeting, Powell was talking about the labor market. And this is coming on the back of the first announcement by Amazon of 30,000 layoffs. All right, you see the challenge of great numbers—the largest October layoffs since 2009. Excuse me, since 2003. All right, because typically you don’t see layoffs in the fourth quarter; it’s the lowest seasonal period of layoffs. You have huge layoffs coming. Not only that, the things you mentioned—also, this week, Walgreens announced a pay cut for their hourly workers. A pay cut. All right, so you’re talking about margins that are getting compressed to the max, that these companies really are kind of eating it. And to the degree that, like I said, all the Fed surveys show us—the special questions from the Philly Fed, the Richmond Fed, the Kansas City Fed, and the Atlanta Fed does a corporate survey—you see corporate CFOs, very similar theme in every single one of them: capital spending is going to be huge, and it’s going to be on AI, robotics, automation. And they say this—the exact words are—to replace and eliminate human labor. And that’s the biggest cost center for most of these companies when they’re getting crushed with margins, with input costs that keep going up. You still have inflation. I mean, if you look at the service part of CPI, right? There are 85 indicators; 44% of them are running above 4% year over year. So the consumer is getting crushed at a time when credit card debt is higher than savings, at a time when personal consumption expenditures growth is greater than the growth in disposable personal income. Right. The consumer’s in a black hole, the government’s in a debt black hole. So where is the growth going to come from? And all of a sudden, the Fed is going to turn around and see deflation has invaded the labor market. To me, it’s very obvious when you break down into the nitty gritty details of the numbers that we already had for the last two or three months. Of course, that’s going to look worse when we get new figures. And I think this is where it gets to the point where—I’ve been saying on your show and to my clients pretty much all year—there will come a point where the Fed will be forced to acquiesce to higher general rates of inflation to protect the consumer, protect the economy, protect the labor market, protect the housing market. All of that’s on the plate here. But the Fed is as divided as ever. And that’s a big problem. And when you say it was 94 a couple of months ago, as of this morning, the market-implied odds in the forward Fed funds market is 94% no rate cut in December, only 6% odds that they’ll cut. Who’s going to ride the white horse if this market cracks? Where’s the white horse rider that’s going to come in and save it? Wall Street money is trying to do it right now, but I think they fail in this latest attempt.
Jim Puplava:
You know, it’s amazing. If you take a look at the Powell Fed, he’s always been late—whether it was keeping interest rates too low for a long time or keeping interest rates too high. So he’s always behind the curve.
Greg Weldon:
And that’s been a big theme of mine all year: behind the curve, Fed, behind the curve. It’s interesting because Waller said the same thing in July, when he wanted to cut rates in July. And of course, they said, “We’ll wait till September.” And he said, “If we wait till September, we’ll be behind the curve.” Frankly, they were already behind the curve in July. Powell’s been behind the curve at every single turn. All right, and that’s a problem. And they’re way behind the curve now, where they could have cut now. They should be neutral. If you look at the labor market, look at the consumer, look at housing, you can make a case that, you know, again, inflation is going to be there because we’ve got $55 trillion in public and household debt combined. All right, you need to reflate to not have a debt deflation, which would be a much worse outcome than kicking the can down the road with more currency devaluation, more inflation. This is the path we’ve chosen, the only path to go. At some point, the Fed will wake up to the fact that they have to acquiesce to these higher rates of inflation and they will be cutting rates. But had they gotten to neutral now, when inflation starts to rise, it’s going to be harder for them to cut rates to get to neutral because neutral will be moving, too. So, I mean, it’s kind of an interesting interplay where being behind the curve now is probably the worst mistake of the three mistakes that Powell has made in terms of missing the turns in policy.
Jim Puplava:
Yeah. Because, I mean, not a day goes by—like today it was Verizon cutting 15,000. Front page of the Wall Street Journal is talking about the class of ’26 will be the worst job market for graduating students. And then you’ve got Walmart saying, “Hey, we’re going to grow at double digits each year, but we’re not hiring.”
Greg Weldon:
Yeah, well, you know, it’s interesting. The Fed actually said this, and Powell addressed this in his most recent press conference. This was in the Beige Book, in the minutes. I mean, one of the things that Powell has been very specific about—and this is really bad—is talking about how, okay, the reason we’re not too alarmed about the labor market is because you haven’t seen it in layoffs or a rise in unemployment benefits claims. Okay, well, first of all, that’s not true. You have seen it there. And secondly, he said something really interesting in the press conference where he said, yes, those people that do get laid off now are not likely to find new jobs. And that’s earth-shaking. And yet why then? Okay, the immediate question is, well, then why are you restrictive with policy? Because the Fed keeps using that word: “We need to be restrictive because of inflation.” And while, if you’re a monetary purist—and I did a piece not too long ago called “Eggheads and Monetary Purists,” because these kind of academic theories—throw them out the window, man. They just don’t apply anymore. And the Fed has a two-tone task, all right? And that’s all they care about, myopically choosing one over the other. And it’s the degree to which they’re not looking at the gray area. They’re not looking at the vision of what the future is about to bring us. And they’re stuck in this policy that is, again, behind the curve. And for Powell to come out and say, “Look, the people that are getting laid off now, the odds of them finding jobs…”—because it’s not a big job loss economy, but it’s also not a big job creation economy either. And that’s a problem when people lose their jobs and have little hope of finding a new one. And you want to sow the seeds of social unrest, and the kind of protest and division we have in the country—higher unemployment would be the primary key driving force in something like that, maybe in the coming summer.
Jim Puplava:
Yeah, it’s interesting too, because there’s been several stories from corporate CEOs where, after Covid, companies were kind of reluctant to lay people off—shortage of workers—that’s completely reversed. They’re letting people go now. And is it possible, if we could see, let’s say in the month of December, all of a sudden we get the numbers, unemployment jumps, job losses increase, that he panics like he always does and does 50 basis points instead of 25?
Greg Weldon:
I don’t think that’ll happen. I don’t think he is in a position to be able to cut 50. Given the rhetoric and given the division on the Fed, I don’t think there’ll be support for that. I’m not saying it’s not the right idea. I mean, I think they should already be neutral, and they’re not. And neutral would be three and a half to three and a quarter, relative to where inflation is. Neutral, they defined as our start in 2018. I mean, Powell has defined all this stuff and he’s done exactly what he said he would do, too. I mean, I give him credit for being totally transparent. The problem is, he has missed the turns at each turn, and he’s missing the turn now. And it’s most critical that he doesn’t, because deflation in the labor market is going to be the key. You can’t have deflation in the labor market when the consumer is already choking and cocooning. When you have, again, savings below credit card debt, delinquency rates the highest since 2009. Okay. It’s only the third time in history that revolving credit has deflated year over year—during the pandemic and the financial crisis. I mean, these are stats, man. These are truths and facts. And when you talk about where the consumer sits, a weakening, deflating labor market is like a dagger in the back of consumption. If you don’t have growth in consumer final demand—which is still 71% of the economy—you’re kind of screwed. I mean, so we’re going to rely on data center buildouts to drive the economy when all that’s going to do is destroy more jobs. It’s kind of insane.
Jim Puplava:
Well, not only that, think of the deficit. We’re over $38 trillion. They’re saying $50 trillion by the end of this decade. So imagine what this is costing the federal government when we’re adding $2 trillion plus a year.
Greg Weldon:
Yeah, and that’s not going to change. It’s only going to increase. You know how it is: we said this after 2008, okay? We said, well, the next time they have to print money, they’re going to have to print exponentially more because the base is so high. And to have the same percentage impact on money supply and growth and all these things, you have to print more money. So now you’re in a situation where the next time you’ve got to print $10 or $12 trillion when you have a crisis. And I think the bottom line here is—and I said this before, earlier in the year, too—if you kind of pick apart Powell’s words, it’s almost like he said—he hasn’t said this, but if you read between the lines, it kind of seems like he has—that the Fed’s not going to feel comfortable declaring victory over inflation until you get some disinflation in the asset markets, particularly in equities. So it’s kind of like Pandora’s box. You can’t open it just a little. All right? That’s kind of where Powell seems to want to open it just a little. And if we get some disinflation in asset prices, that might bring the level of inflation down by bringing final demand down a little bit. But that’s not the way it works, you know, and I know—we’ve seen this movie before—you know that’s not going to work. It’s going to take something like what you just suggested—more of a kind of meltdown—to get the Fed on board. Some kind of really dramatic employment number that gets the Fed on board. But the problem here is, Jim, if you look at the forward, forward Fed funds, they’re still kind of pricing in three, three and a quarter for the end of next year. So it’s not like you have a lot of “vig” to give the market, even if you get a bad number and cut rates here. So that’s my even bigger concern, that the “oomph” factor for the Fed right now kind of doesn’t exist. And given how divided the Fed is—and it’s as divided as ever—and we could talk all day about polarization, how everything is polarized, and the science and astrophysics that go into all that—it’s come home in terms of the Fed, and that’s going to make it more difficult for them to do what they need to do down the road, which means they probably fall further behind the curve, even if the data is so glaringly obvious that they need to be more aggressive.
Jim Puplava:
Well, let’s talk about something that could even cause them to move sooner. What if we have disruptions in the repo market like we did in 2019?
Greg Weldon:
Yeah, well, I mean, you know, it’s interesting. Someone asked me the other day too about the banking system and is there any systemic risk? And I don’t think that there’s a problem in the sense of that dynamic right now. I think that’s a next-step dynamic. Once you have share prices come down, then you start to think about refunding and repos and the government and interest rates, and how are we going to fund ourselves going forward. So I think that it’s an effect of what the next cause is, not the cause of the next effect.
Jim Puplava:
So basically you’re saying that’s ahead of us.
Greg Weldon:
I would say that you’re going to have a lot of turbulence. I mean, there’s no doubt—you don’t have this much debt without having turbulence. But again, Jim, you know, and I know, the bottom line is they’ll monetize debt again. They’ll step in with QE. Look how quickly they did it when Silicon Valley Bank failed. I mean, it was like hundreds of billions in QE immediately on the back of one bank going down. So to me they’ve already proven that the second there’s a problem, they will monetize debt to whatever extent. And this gets back to what I wrote in my book in 2006, when I called on the Fed monetizing debt in 2008 to save the housing market, to save the consumer. But it was considered monetary heresy to say such a thing as the government will monetize government debt. But they will. They will print as much money; they will err on the side of easiness and printing money to whatever degree they need to when they’re staring into that deflation debt, deflation abyss. And we will be there because we have too much debt. So the choice has been made to follow the path of Venezuela, Argentina—all these countries where the stock market makes new highs all the time, but the standard of living doesn’t go higher because the purchasing power of the currency is falling at a greater rate than the stock markets are rising. And that’s the case for gold, Jim. And that’s one of the reasons gold has done what it’s done, aside from the fact that there’s been a lot of overseas central bank buying—and that’s a whole other story. So that’s one of the reasons why, even though we got out of our gold, we issued a warning for a deep correction. We’re into that correction kind of now. Even to the degree you came back earlier this week and you’ve come down hard today, I do believe that there’s going to be a great buying opportunity in precious metals out there because of this reason—because the US investor is not fully involved in terms of taking portfolio out of stocks and putting it into precious metals to the degree that I think is going to be necessary for them to survive in the future. And I think that’s also coming. But all that ties back to the Fed and to the Treasury and to what they’re going to do next, which will be more QE.
Jim Puplava:
Yeah, man. Let’s talk about silver for a moment. You know, on the day we’re talking, I think gold’s down over a hundred bucks, silver’s down a couple bucks. What’s your take on silver here?
Greg Weldon:
Well, it seems to me you have this battle going on where you have Wall Street money trying to support the stock market and you’ve got the shorts and the bullion banks trying to fight the rally in the precious metals. So you have these two different wars going on in these two major markets. And it seems to me like this decline is a lot of kind of intervention-looking price action to me. I would also say that, you know, when you see the kind of sell-off we saw in stocks yesterday—which is to me just the tip of the iceberg—you also get selling of everything else, and you have a lot of people invested in the mining shares and ETFs too. So I think there’s liquidation pressure still to be had in this sector. But I think it creates a tremendous fundamental buying opportunity in terms of a rotation of capital, in terms of having some real safety net under you that is not equity based. And that’s the longer-term argument for gold, where you haven’t had really a speculative bubble in gold. That’s not why gold is where it is. It’s where it is because central banks are hoarding it, buying it, importing it. They want the physical gold. It’s a move away from the dollar, take protection against the US and sanctions and asset seizures and all the things that have transpired in the last couple of years in terms of the Treasury and the US central bank and our policies here for the dollar. So to me, you know, I think that when I look at something like silver, it reminds me of watching gold when gold was kind of unleashed back in the ’70s. It went from 35 to around 110, 140 real quick. I could see silver at 110, 140, no problem. I mean, it’s a strategic metal now. I mean, China’s already announced that. The US is probably not far behind, and at $50, it’s as cheap as hell. I mean, it really is, still, relative to where it could go. And I kind of see that as something that could double or triple even in the medium to longer term here, in the next, say, even 9 to 18 to 24 months.
Jim Puplava:
You know, just recently the government declared silver a strategic metal. Greg, I want to come back to the Mag 7. You had a chart—maybe this is up on the website—of Meta, which has just been hammered. I think people forget the impact of indexing on the stock market, where you have like 10 stocks that make up about almost 40% of the capitalization in the S&P. And Greg, I hearken back to 2022 when the Fed started raising interest rates aggressively, where you saw a lot of these Mag 7 stocks get hit—down 50 and 60%. You know, people have forgotten about that, but that was only a couple years ago.
Greg Weldon:
Yeah, and what’s interesting about it, too, is if you take a look at some of the volume profiles on some of these stocks—I mean, there’s Nvidia, the chips across the board, which now also, you know, that chart of Meta—not only has Meta broken down, but the Meta vs S&P 500 ratio relationship has also broken down. And that has been a major component of this entire bull market. The leadership is breaking down. And to me, that’s even more telling than the fact that some of these stocks are breaking down, is the fact that the leadership in semiconductors, the leadership in the X, okay, the leadership in the Mag 7, all starting to wane. And the momentum on the moves in something like Meta or Microsoft, for example, is terrible. I mean, you talk about some of the worst long-term momentum, bearish momentum divergences I’ve ever seen in some of these things that are the most stretched they’ve ever been, particularly in the indexes. And then you look at the underlying volume profile, where everyone owns them, but the volume has dried up. The rate of return is now diminishing, which is a perfect setup for some kind of—begins as a profit-taking, turns into a liquidation, distribution sell-off in a lot of these top stocks. Almost as if you could hit what I call a buyer’s vacuum, where there’s just nobody left to buy because everyone owns them. And if everyone wants to dump them, that’s how you’re down 50 or 60% in short order. It’s not because—it’s more of a buyer’s vacuum than it is sellers; you’ve got plenty of sellers. You just have no buyers.
Jim Puplava:
Yeah, and that’s what happens when money starts coming out of passive index funds. Just as they drove these stocks up, it also drives them down just as hard on the way down. And you have—the one thing you can say about this kind of bubble, and I think it is sort of a bubble, is at least these companies are making money. Microsoft is making money. Amazon—unlike, let’s say, 2000, where you had a lot of dot-com busts. But, you know, is really Nvidia worth $5 trillion? Is Palantir, which has, what, $5 or $6 billion in sales, worth $600 billion? I mean, that’s just how crazy things have gotten.
Greg Weldon:
Yeah, well, I mean, again, that’s one of those things—they’re worth that now, but what are they gonna be worth if, you know, stock declines? I mean, obviously. So I think the key point for me is to see how much money these companies are now spending on AI, on data centers, on all this stuff, for which we don’t even have the energy to really generate enough energy to fund them all, energy-wise. So this, again—this whole thing is just—I call it Bubblicious. It’s one of the pieces I’ve done. I recently said this is the Tom Cruise market, all right, Mission Impossible. You remember, he’s hanging from the cliff by his fingernails. That’s the stock market. To me, that’s all these stocks. Yeah, they’re making money, and that’s great, but at the same time, they’re spending an awful lot on things that will ultimately kind of be destructive for the economy. Great for productivity, great for their profits, not great for the average guy in the streets. And if you start talking about even a stock market decline—which is another thing that we haven’t really even touched upon that’s very important to me—if you kind of parlay that into a thought process of, if stocks do come down and the stocks that everyone owns—particularly like the Metas and the Microsofts and all the ones that perform well—do come down, then you have an issue where what’s kind of kept the consumer alive in whatever sense of the word “alive” you want to ascribe to the average Joe, which to me is not really living big, it’s not living large, that’s for sure. But still, the people that own stocks, people that make over $100,000 a year, have been less pessimistic than, obviously, at the lower end of the income scale, where they’re really hurting, where you can’t barely afford health insurance and still have money to buy food. And, you know, God forbid, energy prices go up. Energy prices have been down year over year with a negative base effect for almost two years—that’s starting to shift. And if you have a spike in energy, it’s another dagger in the consumer. So what happens is, the stock market comes off, and all of a sudden the upper layer feels the heat, feels the pain, and that’s when you have a real problem with consumption, and that’s when you have a real problem with the economy. So that’s, to me, one of the key kind of unintended consequences that a lower stock market—some kind of correction or sell-off in stocks—would have, would be to sap out that last vestige of some degree of optimism out there, would go “poof” very quickly, because those are the people that own stocks.
Jim Puplava:
Yeah. Another thing I think is a risk out there—a lot of these Mag 7 stocks have been issuing massive amounts of debt to finance these AI centers. So there’s a potential problem for these companies too.
Greg Weldon:
And that’s very 1999, ’98, ’99-like. It really is very, very similar. And I can’t help but think of Pets.com. I mean, here’s a company that—then it was IPOs, and you went out, raised all this money through IPOs, and, you know, Pets.com, they didn’t even have warehouses or the means to deliver pet food, yet they were an online store where they promised to deliver you pet food. I mean, so to whatever extent, this is a little different because there is some degree of light at the end of the road of these promises in terms of the data centers and AI. But again, that promise—whereas the Internet was price discovery, which was good for consumers because it made everything kind of cheaper. You could go to the source to buy the cheapest goods, get it delivered the next day. All this was very competitively positive, even for the consumer. That’s not the case with AI, robotics, automation. None of this is positive for the consumer because it’s bad for the labor market to a degree that the Internet and this bubble in ’99, 2000 couldn’t even imagine back then how damaging this could be to the underlying economy.
Jim Puplava:
You know, the other thing that just kind of strikes me about all of this is we have $38 trillion in debt now. We will be at $50 trillion there. And, and Greg, that assumes, number one, no recession for the balance of this decade, no bear market for the balance of this decade. If that happens, we could be running three and a half, four trillion dollar deficits.
Greg Weldon:
Yeah, 100%. I mean, I think that’s the inevitability. And that’s almost just like, kind of organically, we’ll get to $50 [trillion], let alone if you’ve got to print $10 or $12 trillion to bail out some kind of stock market meltdown. You know, and the bottom line is, though, Jim, this—what I call the debt black hole. I think I’ve talked about that here on your show. It’s a theme I developed at the very beginning of the year. You could see that debt and GDP in the US move very similarly, with GDP above debt. Until when? Until 2008. QE changed everything. And back then, we really didn’t think it. But you remember, people said it’s going to lead to a lot of inflation. Well, guess what? It did. It just took a while. The pandemic accelerated this to where debt went so high above GDP that I liken it to a black hole, where once you cross the event horizon, the gravitational force of the black hole is so fierce that no matter how much propulsion you generate, you can’t escape that gravitational pull. I think that’s where we’re at. What are you going to do—create propulsion by doing what? By printing money. Money is your fuel to burn here. Printing new money to try and pull you out of the debt black hole. But you can’t—you’re too far in it already. And you will have to print more money just to keep from a debt deflation imploding upon ourselves. And that being something like the 1930s depression. I mean, I think any central bank is going to choose to reflate at any cost when peering into that abyss. That’s always been the mantra here since, you know, 2006. And it has worked out, it’s played out, it’s bullish for stocks longer term, but like I said, the rise in stocks won’t keep pace with the debasement, the purchasing power, your currency. So that’s why I’m really bearish on the dollar. That’s one of the longer-term reasons to like gold—all these debt considerations. There’s only one way out, and that’s to keep doing what we’re doing. Because you can devalue the dollar by 97.5% since, you know, 1975. You can do it again, and then do it again, and then do it again. There’s no limit to how many times you can divide the dollar. Look at all these currencies, like the Indian rupee, the Pakistani rupee, the Argentinian peso, the Venezuelan bolivar, the Turkish lira, the Nigerian naira. I mean, you have all these places where the stock markets do really well, and the places that have a lot of debt—what do they do? They just have to keep printing money, keep devaluing the value of the purchasing power of the currency. And that’s where we’re at. And so that’s the biggest trend, and that’s the biggest bull story, really, for kind of resources and commodities. And we’re already in a world war, Jim, for resources. Since 2018, when China opened the Shanghai crude oil futures with the OPEC Dubai-grade crude, the traded contract priced in renminbi, backed by Russia, is going to benchmark the world’s crude to it. I mean, this is a resource war—world war. Already China’s winning. We’re not even talking about rare earths. When you break it down in terms of separation, concentrates, refineries, and then creating products—I mean, we’re 97% reliant on China when you cut all of it down to the final demand center. And so, you know, China has a leg up, and we’re not even talking about that in terms of de-dollarization, in terms of the BRICS unit, in terms of China and Russia and OPEC—the new axis of power on the other side of the world—already winning a global resource war, holding the best hand. Trump goes in there and does a great job trying to bluff, but he’s not holding the best hand—Xi is. It’s pretty obvious to me. So that’s a whole other angle on the dollar that’s also bearish. That puts us in the back seat in many ways.
Jim Puplava:
And we did a deep dive on the budget deficit. And if you take a look at Social Security, Medicare, defense, interest on the debt—they consume 99% of government tax revenue. So basically, to run everything else, the government uses only 1% of their tax revenues. Every dollar we spend, 30% is paid for with borrowed money. So I see no way out of this. As we’ve been talking about here, they are going to have to print, and I think when they do start printing, it’s going to have to be massive.
Greg Weldon:
Yeah, I mean, number three is the interest cost. Right now, it’s number three on the hit parade of costs. Right. And not only that, but what you just said is the reason that three months in the last fiscal year, the government spent twice as much as was their revenue, twice as much or more. I mean, that’s egregious. I mean, we’re allowing this. It’s like we are part and parcel of this. Consumers borrow money; consumers are in a debt black hole as well. So, to the degree that we’re all involved and we’re all part and parcel to this, it’s kind of scary down the road when you really think about it. Because, yes, like I said, when you have $38 trillion in debt versus what you had during the pandemic when it was maybe 20, that means you’ve got to print, you know, like 1.8 times more money just to get the same impact on money supply, on growth, on consumption, on all the things that matter to the economy to keep it floating. You need the growth to service the debt. Without the growth, we’re screwed even more. That’s why they’ll print more money—because they have to. It’s the only option. It’s not, you know, time for academic answers. Last time was in the ’90s. You know, 1990, we could have paid down debt; it was the last time we had an organic recession where consumers and businesses actually paid down debt, where the government started running surpluses under Clinton. All right, but that all, of course, blew up in the tech bubble, you know, breakdown of 2000. So here’s where we are. There’s no escaping the debt black hole. There’s only one answer, and that is: print more money.
Jim Puplava:
And that’s what governments have done throughout history. You know, the other thing that strikes me too—and it’s on both parties—nobody’s talking about the debt or the deficit. And more importantly, you have a new trend. Like, for example, within the Democratic Party, you’ve got socialists and communists that are running, promising. The issue is affordability, which is our inflation story. But they’re saying, “Given that, we’re going to give you more free stuff.”
Greg Weldon:
Well, what’s going on—it’s just mind-boggling. I mean, it’s not doable. It’s just unbelievable when you talk about what’s happening in New York City in particular and all the promises being made. And frankly, it gets to a whole other risk factor. Right. And I’m hesitant to talk about it because, you know, I love the United States and I pay a lot of money in taxes. I mean, I pay a very high tax rate, and the degree to which—if I’m living in California and I find out my tax money is going to give illegal shelter, food, health insurance, health care—I mean, it’s kind of like, look, it’s like representation with no taxation. In other words, it doesn’t matter if you pay taxes or not, you get represented the same. So I’m waiting for someday when people kind of wake up and say, “Why am I even paying taxes? What am I getting for it?” You know? I mean, so that’s a risk too, that you have some kind of revolution, some kind of tax rebellion in the US. Why? It’s like taxation without representation. When you say you don’t need voter ID to vote. When you pull apart somebody’s voting records, see the same people voted twice and they’re not even registered to vote. I mean, it’s unbelievable. It’s just unacceptable. And from the perspective of someone paying taxes, there comes a point where you look around and say, “Why am I footing the bill for all this? I don’t agree with this.” And of course, you say, “Well, then vote the right politicians in.” Well, all the young people seem to love this socialist idea without any clue, because again, our educational system is falling too. And I think when you talk about acuity in mathematics, it’s clear that a lot of people don’t know how to add two plus two equals four. It’s like, okay, two plus two equals eight. So we have two, we can spend eight. And it’s like, yeah, that’s not how it works. So, you know, I worry about the future, let alone, you know, how digitization of everything may be the kind of the handcuffs that are put around people to prevent these kinds of things where people say, “What am I paying taxes for?” It’s kind of insane. I don’t want to house illegal aliens. I mean, I’m glad I live in Florida, where there’s no state tax, so I pay my federal tax and live happily ever after. But in a place where you’re paying high state taxes, and the government’s taking that money and handing it away to people that are here illegally, at some point in California, you’ve got to believe people are going to stand up and say, “Why am I even paying taxes?”
Jim Puplava:
Well, we’re losing 300,000 taxpayers a year. Since, I think, 2019, we’ve lost 1.2 million taxpayers. And they’re going to places like your state of Florida, Arizona, Texas, Florida, Tennessee, and Nevada are the four states that they’re losing it to. And it’s not just that, Greg. We’ve lost almost 400 major corporations—Tesla, Oracle, Hewlett Packard, Palantir—all these major companies are moving out. And you know what these idiots are thinking of doing? They want to put a 5% wealth tax—it’s going to be on the ballot next year—on all the wealthy that live here. If you want to move Tim Cook, Sergey Brin, and all the, you know, the Silicon Valley guys out of here, you know, talk about giving up—leveling a 5% tax on their net worth.
Greg Weldon:
Well, there’ll be an exit tax then. So I think that’s coming next. And, you know, Britain’s already talking about that. You want to move your wealth out of Britain, you’re going to pay a tax on it. It’s mind-boggling, but this is where we’re at. And again, the situation in California—you have a governor who just basically, for all intents and purposes, declared war on the United States. When you say, “I’m declaring my independence from the federal government,”—those are the words of Gavin Newsom—that’s a declaration of war. You’re declaring your independence from the federal government. “We’re not going to follow the federal law anymore. We have our own state, our own law,” and all of this, and it sows the seeds for something. And I started talking about this when I was in my 20s, riding the subway around New York City when I was working on a Florida trading commission exchange, that someday you would reach this point where the haves and the have-nots are so polarized. The polarization of wealth has been taking place since the ’70s, if not for far longer in this country. And at some point, you’re going to reach a tipping point, and you’re probably there, where you have the seeds sown for a civil war. So we’ll see what happens. I mean, you talk about something like New York and, you know, I’m a former—born in New York, raised in Jersey. Always consider myself Jersey Shore, Jersey guy. And I moved to Florida ahead of the curve in 2007, and I won’t go back to New York now. I won’t. To me, it’s like I want to go to a hockey game, go see the Knicks play at the Garden or something. It’s unfortunate because I won’t do it. I won’t feel safe. I won’t feel comfortable even being there. So it’s unfortunate, but this is the kind of divisions and polarizations and changes to life that we have in front of us that are only going to intensify, to the point where at some point you’re going to get some kind of blow up, and this thing is going to get a lot worse.
Jim Puplava:
All right?
Greg Weldon:
I hate to be a doom and gloomer, I really do, because I’m very positive on life. I’m here in Florida; it’s a beautiful day out. This is all the more reason to, you know, when you feel the darkness enveloping you, to get out in the sunshine and get on a jet ski, get on a golf course, go to the beach—do something life-affirming that we still have the freedoms to do in this country, because 50 years from now, who knows?
Jim Puplava:
All right, well, listen, Greg, as we close, tell our listeners about your website, your services, and then also mention your book, your Gold Boot Camp book, which I think is one of the best books written on gold.
Greg Weldon:
Thank you. Appreciate that. Yeah, I wrote that in 2006. Hardest thing I’ve ever done in my professional career is writing that book, and it still stands today. I mean, a lot of the lessons there—and frankly, if you read it, a lot of the things that I talked about in 2006 are happening now. I mean, it’s kind of laid out this path that we’ve been on the entire time to where we are now; it’s kind of written in that book, along with a lot of trading lessons. And, you know, some of the lessons that I’ve learned since, because as a money manager and a trader, you know, it is a war with yourself. It’s a psychological war. You’re always learning lessons, you’re always kind of trying to avoid the same mistakes you might have made in the past, too. To me, my instincts have become really sharp. So, you know, I’ve seen so many scenarios where I feel like I can recognize things as they unfold to where they’re going to go more accurately now than I’ve ever been able to do. So from that perspective, the money management business has been wildly successful. Our returns have been really phenomenal. I can’t talk numbers per se unless you get on the phone with me. Accredited investors only. We have a million dollar minimum investment—that seems high. Would you take gold at $4,000 an ounce? Okay, that means one gold futures contract is worth $400,000. When you talk about managing the risk in these futures markets—we’re a regulated, futures-only trader, money manager, individually managed accounts, no commingling of money. You get a daily report from the brokerage house, not from me. Shows you exactly where your money is, what the risk is, what the profits are, what the losses are. You don’t like what we’re doing, we have no lockup. Get your money back within 48 hours. But the degree to which it’s become really—it’s so important that you use really the strictest mathematical overlay to manage the risk. Because the risk is so big right now—a 5% move at $4,000 an ounce. I mean, consider that compared to a 5% move just two years ago when gold was $2,000 an ounce. The risk has doubled, right off the bat, in terms of what the drawdowns could be. So you have to adjust for that. So it requires more money than ever to be successful because the swings in dollar terms are so huge. I mean, we’ve done that exceptionally well because when I designed this program in 2018, it was designed for exactly what’s happening now. And we’ve been very successful with it. So if you want information on that, you can email me at gregweldon[at]weldononline[dot]com. It’s one of those things where, you know, we’ve made enough money in your life and you’re also trying to now help people. And it really is about helping people maintain the purchasing power of their wealth and income, which is going to be so important going forward. Being passively invested in stocks is going to lag; it’s going to fall behind. And yes, that hasn’t been the case this year. But the year’s not over yet. Let’s see where we are in six weeks, eight weeks from now, because it could be a whole different picture by then. Right now we’re short the stocks. I also do the daily research, which goes out to JP Morgan and top hedge funds in the world and retired individuals. It’s usable. It gives specific recommendations every day in all of these sectors—fixed income, foreign exchange, stock indexes, precious and industrial metals, all the energies, and even the agricultural commodities. I can’t stress enough, Jim, how important the AGs and the energies are going to be going forward in terms of this resource war, in terms of what’s happening on this planet, the polarization in the weather, how extreme things are—it’s going to make food more valuable in the future. You want to keep pace with the decline in purchasing power, your money, you’re going to want to have some of that involved in the agricultural food commodities as well. And that’s one of the benefits we offer. The research is the Global Macro Strategy report. You get a free copy of that, some of the special reports I’ve just done on stocks, by emailing me as well at gregweldon[at]weldononline[dot]com. We also do the podcast. It’s into its fourth season, beginning this month, which is Money, Markets, and New Age Investing. It’s found everywhere where podcasts are distributed.
Jim Puplava:
All right, well, listen, my friend, you have a great weekend and a happy Thanksgiving coming up.
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