Asks Larry to explain his thinking after metals' worst day since 1980s and recent stabilization.
Sam
Larry McDonald
Metals are back to January levels; silver and gold still dramatically outperforming Bitcoin year-to-date.
Larry McDonald
Thesis: sustained bond yields and global inflation regime are driving historic capital migration from financial assets to hard assets (coal, natural gas, oil).
Asks Larry to explain the wild swings in metals—meme bubble, dollar debasement, margin tweaks in China?
Sam
Larry McDonald
Combination of factors: spread between New York and Asia dynamics, but dismisses claims US banks are massively short.
Larry McDonald
Massive money in financial assets (bonds) is losing money globally; AI trade is blowing up.
Larry McDonald
DRAM is a commodity and part of AI infrastructure; if DRAM prices rise 200-300%, it will crush growth and profit margins.
Asks Larry for his outlook on the dollar this year.
Sam
Larry McDonald
Dollar is oversold; local currency emerging market bonds are frothy.
Larry McDonald
Dollar in an 8-year bear market, 2-3 years in, but probability of a counter-trend rally is high.
Larry McDonald
Expects a counter-trend rally in the dollar over the next couple of months.
Notes long-term dollar weakening narrative but asks about sweet spot given onshoring, PMI strength, and treasury moves.
Sam
Larry McDonald
Bloomberg Commodity Index and ISM prices paid point to a CPI bounce later this year.
Larry McDonald
Inflation is embedded; with $1.4T AI CapEx and $1.9T deficits, inflation is not going anywhere.
Asks if 3% is the new 2%.
Sam
Larry McDonald
Only two ways out of $38T debt: default or financial repression (keeping rates below inflation).