MacroVoices #487 Larry McDonald: The Great Migration To Hard Assets
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This is Macro Voices, the free weekly financial podcast targeting professional finance, high net worth individuals, family offices, and other sophisticated investors. Macro Voices is all about the brightest minds in the world of finance and macroeconomics telling it like it is, bullish or bearish, no holds barred. Now, here are your hosts, Eric Townsend and Patrick Ceresna.

Macro Voices Episode 487 was produced on July 3rd, 2025. I'm Eric Townsend. Happy Independence Day to our American audience. Beartraps Report editor Larry McDonald returns as this week's feature interview guest. We'll talk about everything from copper to the dollar to precious metals.

Larry brought a great chart deck with him this week, so be sure to download it before you start the feature interview. And I'm Patrick Ceresna with the Macro Scoreboard week over week as of the close of Wednesday, July 2nd, 2025. The S&P 500 index up 222 basis points, trading at 6227. Markets have maintained upside momentum all week, but will the jobs numbers change that? We'll see.

We'll take a closer look at that chart and the key technical levels to watch in the postgame segment. The U.S. dollar index down 95 basis points, trading at 96.77. The August WTI crude oil contract up 390 basis points, trading at 67.45, finally breaking out of last week's trade range.

The August RBOB Gasoline up 291 basis points to 212. The August Gold Contract up 51 basis points trading at 3360. Still maintaining its bullish trend but will we see a bullish breakout next week? September Copper Contract up 569 basis points trading at 520.

It's approaching those March highs and uranium down 121 basis points trading at 77.55. The U.S. 10-year treasury yield down two basis points trading at 426. And the key news to watch next week is the FOMC meeting minutes and the much anticipated July 9th tariff deadline.

This week's feature interview guest is Bear Traps Report Editor Larry McDonald. Eric and Larry discuss opportunities in lithium, copper, energy demand, financial repression, and more. Eric's interview with Larry McDonald is coming up as Macro Voices continues right here at MacroVoices.com. Macro Voices

And now with this week's special guest, here's your host, Eric Townsend. Joining me now is Larry McDonald, famously known as the author of the Bear Traps Report. Larry prepared a slide deck to accompany this week's interview. Registered users will find the download link in your Research Roundup email. If you don't have a Research Roundup email, it means you haven't yet registered at Macrovoices.com. Just go to our homepage, Macrovoices.com, click the red button above Larry's picture that says, Looking for the Downloads.

Larry, it's great to get you back on the show. Let's dive right into your slide deck. Page two, you've got Albemarle. I believe that's a Western Australian lithium producer. Why is lithium on your mind? You know, Eric, we love to look at the bear traps before we focus on election cycles and

and some of the best trades price in really impressive profits before the election or around elections. And in the case of Chile, you have to look at the world. Lithium is in a very good spot now because you're talking about devastation, what I call bombed out villages where there was a left wing candidate that was perceived to be the winner in Chile. If most of our planets

Lithium comes out of Chile. And so SQM and ALB are two of the primary lithium producers. And as you well know, over the last year, what we call hybrids have taken massive, massive expectation market share from electric vehicles relative to where electric vehicles were supposed to be at this point in time. So at the end of the day, you have a double barrel of

capitulation perfect storm for lithium, which what we believe is gone through a massive, what we call capitulation cleansing process where we're coming out of capitulation. And if you look at that chart,

You know, when you get a monthly MACD, Eric, a monthly MACD is a wonderful technical signal. It's a sign of what we call the, like I'll say it one more time, the bombed out village where massive seller exhaustion and we can get into the political dynamics. And Larry, just to clarify, I look up ALB on my system. I see a Western Australian lithium producer. Sounds like maybe it's a Western Australian company that operates its mine in Chile. Right.

Exactly. Exactly. So SQM equity and ALB equity are the two big mines in Chile that control a large portion of global lithium. Larry, I see on page three, we've got copper coming up. That's also another major export from Chile. But before we dive into these charts, let's start with the big picture. Why Chile? What are you thinking about Chile? And what is it about Chilean politics that has got your attention on these markets?

Okay, so think about the last four or seven years. Argentina, Brazil,

Chile, you've had left-leaning governments in these countries. And with the move in Argentina toward Malay, that has been an enormously profitable trade where you're going from a left-wing government to a more capital market-friendly government. That's where you can make huge, huge returns in emerging market equities.

In the case of Chile, we've had four years of left-leaning governments. We had a primary in the last week or so. And so the left-leaning government, JARA, is really now up against two conservatives, Kast and Matea. And at the end of the day, I think all of our best political consultants that we work with, it looks to us this is like an Argentina situation where the

The probability of a market-friendly candidate, because you've had years and years of left-leaning socialists there, not market-friendly. These socialists, what they do in these countries, they go after the copper, they go after the copper, they go after the lithium, they go after companies that produce commodities in these types of countries. And so if you go from a market-unfriendly government to a market-friendly government, the returns could be spectacular. And that's what we think is about to happen.

And you think the Chilean election is basically about to bring in a right-leaning government that's going to reverse these policies. That's going to be good for the Chilean domestic copper industry, and that in turn is good for Chilean copper exports and the performance of these companies. That's the gist of it?

Yes, exactly. You've gone from multiple years of left-leaning governments and now all of our best information on the ground points to either CAST or METEA. In either one of those situations, it would be, I think, extremely good news for ALB and SQM.

Now, we used to kind of tell ourselves that about $4 was the upper limit on how high copper could go. I'm saying years ago, we said that's about as far as it could go. Obviously, it's gone farther than that. How much are we in a new realm here? It feels like the era of copper's uses in the economy, as well as the price range that it needs to trade in, might be both changing at the same time.

Yes. So there's two big things going on. One is the situation in Washington with the 301 investigation, the Trump administration.

But the bigger picture, which I want to cover both, but first I'll just take a step back to the macro picture, and that is artificial intelligence data centers, the U.S. power rebuild. We talk about this in great detail in our book, How to Listen When Markets Speak. And we believe we're coming into an OPEC 1970s-like crisis with copper because it's

One of the things that I've talked about in the book is Neil Ferguson, when we sat down, the famous historian, I sat down with him in the book, and he's like, wars are so inflationary. And when you come out of wars, you've got to get through war.

you know, massive amount of issues. And if you think of like the Ukraine rebuild, right? Think about the, just if you do the math on the structures, rebuilding the Ukraine, the structures to rebuild Iran, Gaza, Israel, wars are extremely, extremely inflationary. And then when you think about artificial intelligence and, and,

Right now, the U.S. power grid is 50 years old in some places, 30 years old in others. And so that's a situation where you've got tremendous incoming demand for copper there. And then there's the Los Angeles rebuild just because of the tragedy there with the fires in the fall. And so if you add it all up,

And then the last area is robotics. Robotics, 2 million robots, just 2 million robots. And we were expecting literally, if you listen to some estimates across the street, the next 10 years, you could have 50 million robots that are produced. But just 2 million robots would take almost a month of demand of global production. And so if you add up

And we do this in the book. You just have a tremendously powerful macro picture for copper. And that's why, if you look at some of the charts here, copper is breaking out versus big tech and the NASDAQ. I was slightly surprised that you didn't mention the need to rebuild and increase the capacity of most of the electric grids of most countries around the world, because people talk about electric vehicles, great grid.

But if you want to be able to recharge them all and everybody's got one, we've got to double the capacity electric grids. And there's no plan to do that. Those things are not budgeted, planned or accounted for. It seems to me like that's one of the biggest drivers. You didn't mention it. Do we disagree that that's a driver or what are you thinking? No, no, absolutely. It's interesting.

It's the grid is 50 years old in some places, 30 years old in others. And I should have made that much more clear. This is something where the power grid, it's like a 90 year old retired person that, you know, really has to get into a Ferrari. In other words, all of those data centers, all of that transmission of power and energy has to go and all those electric vehicles have

And you could see this breaking down in the state of Texas, California. There's a number of places in the United States where the grid system is just breaking down. And so the whole, it's about a $2 trillion rebuild in copper and aluminum, by the way. Those two are going to be the big beneficiaries.

Larry, before we leave the topic of copper, we got to touch on President Trump's tariffs. It's been quite a ride on copper because people didn't know what to expect. A lot of people were front running expecting tariffs on copper. Then it turned out that copper itself was exempted a little bit. Nobody really saw that one coming. And so it was just a whipsaw on the HG futures chart.

Give us the background. Tell us what we need to understand about the politics of copper looking forward. Well, at the Bear Trash Report, we have a Bloomberg chat with hedge funds, mutual funds, and pension funds that we host a conversation during the day. And what I've noticed is a trend shift where in the last month or so, there's a lot of focus from the institutional investors on copper and on tariffs in Washington.

And the SETA, based on all of our research and talking with the big funds,

The setup is really bullish because once the Trump team gets through with this 301, Section 301 investigation, we're talking about a 25% tariff on copper. And the U.S. imports about 40% of our copper needs. And so right now there's a pretty interesting spread between U.S. copper. So think of U.S. copper and copper reserves.

say in London or in other parts of the world, U.S. corporate's already almost a 10% premium. So you can tell that

these tariffs are being priced in, we think it's going to be a 25% tariff. Some people are front running this. So I want investors, I want everybody listening to us to know that this is no secret that the U.S. is going to have the tariffs and that this is being priced in some respect. But at the end of the day, this is coming and I'm seeing really large institutional investors buying companies that are exposed to the U.S. copper for sure.

Now, this is the kind of setup where you could expect potentially a squeeze that pushes prices much higher as people come to terms with the imbalance in supply and demand. Then, just as everybody's piling in, it ends up, you know, kind of sell the news event. Do we need to be worried about that? Is there a coming event where copper presses up to a high level and blows off and ends up resetting lower? You know, copper is in a consolidation, and you can see there in the charts that

especially the long-term chart, the monthly chart is just amazing because copper has failed here a few times. If copper does fail here, it will be a great buying opportunity because copper

The momentum is there, but you're right. In the last month, there are people front running this. And so I think the smart thing to do is if you want to take a new position, take a 25% position and just be there and look for copper to pull back if it does on the news. And we expect that.

much higher prices right now, 509 on HG. We're talking 750 to 900 in the COPX ETF, which are the copper miners. We think your downside is 20 to 30%. Your upside has been potentially 200 to 250% over the next five years.

Larry, let's move on to page six, natural gas equities. Boy, energy, what a surprise. Well, in natural gas, once again, the shale region of the United States has been through a lot the last decade. And we're at a point of depletion. This is pretty well known. Our shale regions are running low historically, like if you look back at terms of where we are. So the probability that natural gas kind of

is in the $7 to $9 range with the energy demand from artificial intelligence on natural gas, plus Europe and all the LNG exports. It's an amazing bullish story and that depletion is coming. And so the FCG equities, here's an amazing stat. Everyone's in the NVIDIA trade. If you do the math on NVIDIA, it's $3.7 trillion equity equities.

The top three holdings inside of the FCG ETF, which is natural gas, are only worth about $250 billion. That's the top three holdings. So at the end of the day, Eric,

We're seeing on this situation, it's a lot like the 1990s. Everyone's in the most obvious crowded trade, $3.7 trillion for NVIDIA. But in order for NVIDIA to get to where the growth estimates are, you're going to need these natural gas names to be up 200% to 300% in our view. And right now, the

The amount of capital that's in natural gas equities relative to just NVIDIA, we're talking the top three holdings in the FCG natural gas ETF are only worth $250 billion. And NVIDIA is up at $3.7 trillion. So at the end of the day, the risk reward and your upside, you want to be selling stocks like NVIDIA and buying the FCG.

Let's move on to page seven, where you've got the rig count charts. Rig counts kind of changed because oil drilling technology has changed so that we now drill more oil wells using pad drilling from a smaller number of rigs. So how should we be interpreting the rig counts? And what are they telling you in this slide here on page seven? Yeah, and this applies to oil and gas. But

At the end of the day, Eric, CFOs across our country in the energy space, they have watched their previous five or six bosses have been fired over the last 10 years. And

One of the reasons for that was what we call overindulgence and what we call capital expenditures. And we think the same thing's going on right now in the AI space for, say, chips. The path of capital investment is very similar to what happened in the natural gas space about a decade ago. And

There's a scene in our book, How to Listen to Markets Speak. We talk about Aubrey McClendon. And at the bottom, bottom line is natural gas chief financial officers, CEOs a decade ago, massively over, over, I call it, you know, a CapEx orgy, capital expenditure over overdose. And over the last decade, CFOs have been more disciplined. And most importantly, they've

They've learned how when you get lower natural gas prices or lower oil prices, the ability of these companies to react and take down production, take down rigs in a fast manner that offers much more support than we used to have a decade ago.

On page eight, you've got the SPR, Strategic Petroleum Reserve chart. This chart, just every time I see it, I get angry. And I want to emphasize to our listeners, on the left there, it's not like, oh, you know, it's been lower than it is now. There's times in the past. That was the initial fill that you're looking at on the left side of the chart. The SPR only started in the late 70s or mid-70s. And you're looking at the initial fill, getting it

up, took till the end of the 80s to get it fully up to its intended capacity. It's the first time we've ever, after it was up to intended capacity, drawn it down to anything remotely close to these levels. And the reports are saying now that it was damaged as a result of those drawdowns to the point where it cannot be refilled until they do a bunch of repair work on it. So how does that fit into the story here? Well, to us,

Now we're going to shift to the bull case for oil services because it really plays into the SPR, Strategic Petroleum Reserve, right?

U.S. production is higher, but the Trump team, when you talk to people on the Hill, you talk to people that are close to the Trump administration, they want U.S. production. Right now, offshore drilling is about 14% of U.S. production. So it's about 1.7 million barrels a day. And so if we become more and more and more energy independent,

Our need for the SPR goes down, and that's what's been happening over the last five years. Everyone knows this, but the Trump team wants to take this to the next level. The Strategic Petroleum Reserve came about after the OPEC crisis in the 70s and through the 80s and the 90s. The United States was dramatically under-invested in this space.

The Trump team, when you talk to people on the Hill, they really want energy independence. And guess what? Oh, by the way, they know that shale region is in decline, right? And so if you think of like two things that are really going to increase what we call equity prices in oil services. So the oil service names are like the OIH, Schlumberger, SLB, and Weatherford, WFRD.

These equities are in really incredible shape because if we take our, if we go from 14% of U.S. production that's offshore to 20%,

the oil services names have two, 300% upside. And the valuation of stocks like Weatherford is absolutely incredible relative to technology equities. Larry, give me a little bit more data. You're saying you love the Weatherford valuation. Why is it such a great deal? Give me the sales pitch. Okay. So first of all, one of our favorite value managers in the world, David Einhorn, Greenlight Capital, uh,

has been buying the stock in recent years. And we have to ask, like, why is someone like, you know, a Hall of Famer like Einhorn interested in Weatherford? And when you look at the balance sheet, you're talking about $3.7 billion equity valuation, $3.7 billion. Okay. They have

almost $900 million in cash, and the debt level's down at $1.7 billion. So the balance sheet is much, much stronger, Eric, than we were in previous regimes for energy. That's the first thing. But the free cash flow yield, we think in 2026, they're going to do $500, $520 million of free cash flow.

And if you take that up against their equity market cap of $3.7 billion, you're up near like a 15%, 16% free cash flow yield, Eric. This is of incredible value relative to regularity.

Right now, the S&P is trading at 22 times earnings, right? This company, Weatherford, has an equity market cap, I think once again, 3.7 billion EBITDA of 1.2, 1.3 billion next year. So,

You're talking about it's trading at two to three times EBITDA and with a free cash flow yield of 16%. To us, you've got, but this could be a five or six bagger on the upside from this incredible valuation. And Larry, on page 10, we've got Schlumberger. What's the story there? Well, Schlumberger is, I wanted to talk about two different equities because Schlumberger

You know, Schlumberger is a household name. It's really kind of like the Google of this space. So they're using artificial intelligence in ways to create a better oil services company, I should say. $47 billion valuation, free cash flow yield of almost 10%.

We expect EBITDA next year close to $9 billion. So it's a much bigger company. It's a much safer company. It's a Hall of Fame, kind of like I said, it's the Google of the oil services sector. So I wanted to look at a small cap equity in Weatherford and a large cap in Schlumberger. Let's move on to page 11 where you've got jobless claims. What's the story here? Okay, so this is where we get into the big, beautiful deal and the Trump administration and the Fed.

The Fed, if you look at housing, jobless claims, there's some deterioration going on in the United States economy that has the Trump team pretty concerned. And the pressure they're putting on the Fed is impressive. I wouldn't say impressive, but highly unusual historically. And, you know, in the last week, they're coming up with all this. I would say in the last like six weeks, Besant and Trump are doing a number of things around housing.

you know, trying to force the Fed's hand on rate cuts. And if you look at those claims, we're breaking out and the institutional clients that we speak to feel that the banks, because we're coming off of this beautiful move up in bank deregulation, Michelle Bowman is a Trump appointee. And so there's this disconnect between where the banks are priced now

relative to creeping and encroaching economic risks that you can see through the breakout claims and the fact that the White House is very, very nervous and they're begging the Fed for rate cuts. They're begging the Fed for rate cuts for a reason. That's because under the surface, they see some things that got them pretty concerned at this point.

And on page 12, we've got a chart of JP Morgan stock. Yeah, so JP Morgan's trading at 2.4 times book.

2.4. It's never traded there before. And what we're seeing and what our top institutional clients are telling us is the spread between JP Morgan and the regional banks is two standard deviations greater than the norm. And that's because of all this bank deregulation, which favors the large banks. So with the highest conviction,

We think you should be selling the large banks now, your JP Morgan, your Bank of America, or shorting them through something like puts or the FCG ETF. But just to keep it simple, you want to be taking down exposure to the large banks like JP Morgan. And oh, by the way, Jamie Dimon now has he sold basically everything.

I think, 2 million shares in recent years, which is like almost 25, 30% of its holdings and a lot this year. So Jamie Dimon, the CEO of J.P. Morgan, is selling shares aggressively. This is the most aggressive he's been. And so we want to be taking down exposure to J.P. Morgan and increasing exposure to the regional banks through the KRE or KBW positions.

And we've got Nasdaq and Russell on page 13. So one of the things about this legislation that's on the hill this week, and I really want to get into this because this has massive macro implications, but there is some potential growth that can come out of this. And we think there's going to be a substantial re-spike or kind of re-ignition of inflation.

But the growth angle inside, remember, legislation that impacts U.S. companies versus international companies is an important trend right now. So if you think of the S&P 500 or if you think of the NASDAQ, the exposure there to the international sales is very, very high. If you have a piece of legislation through this big, beautiful deal that increases sales

U.S. growth expectations over the next couple of years, you're going to see a colossal shift back toward the IWM, which is the Russell 2000 versus the S&P names, technology names or the QQQs. This is a trade that hasn't worked for a while. But as we come into the second year of the Trump administration and into the midterms and as the

As the growth in tax cuts comes into the economy next year from this legislation, this is where you could see a substantial outperformance in the IWM ETF relative to the QQQs and the S&P. And Larry, on page 14, you've got UUP, the dollar up ETF. I was thinking about the dollar down ETF myself.

So, you know, we've been dollar bears and there's a big, you know, there's a whole chapter on the dollar in our book, How to Listen to Markets Speak. But I want to remind people, this is probably the most important part of this chat. So if you think of bond issuance, right, right now, there's been no, Eric, there's no new net issuance.

from the United States government since, we're talking about treasury sales of bonds. There's been no net new issuance since January. So that means when they raise the debt ceiling, Eric, in the next two, three weeks, by August, between August and the end of the year, we calculate

They're going to have to sell $1.7 trillion of treasuries to catch up. And if you think of the U.S. Treasury checking account, which is called the TGA, the Treasury General Account, that is getting drained because right now there's no net issuance.

And as we move toward that debt ceiling over the next three, four weeks, and if this bill gets tied up in the House, which we think it will, this is really... Right now, it's a big showdown between... Because there's a House version of the bill, and then there's a Senate version of the bill. And they have to be merged. And so this is where it goes back to the dollar. Because...

At the end of the day, if they don't pass this bill right away, we're going to get too close to the debt ceiling. And that means the refill of the Treasury general account

It's going to be even bigger, Eric. We calculate it could be six to 700 billion more issuance than last year over the same timeframe from say August to the end of the year. And what that means is for everyone listening to us right now, if you have an explosion of issuance, we're talking 1.5 to 1.6 trillion of issuance, six to potentially 700 billion more than last year of issuance.

That's going to drive up T-bill rates dramatically. And so the Treasury is going to have to sell lots of T-bills, lots of bonds, lots of notes. Both Besant and Trump said this week they want to lay off the long end. That's why the longer dated Treasuries are rallying quite a bit over the last couple of weeks because that started to ooze out. So they're going to issue a lot of paper on the front end. You know what that's going to do?

It's going to make the spread between U.S. treasuries and the rest of the world. That spread is going to really start to blow out again. And that's going to attract money back to the dollar. So.

The dollar had its worst first half, I think, since the 1970s. The probability that we have a counter trend rally in the dollar between now and in November, that's meaningful trade is, I think, very, very high. What does that mean for gold? So gold, gold's been strong. Every every move down to the 50 days been a buy.

Gold probably has a difficult third quarter. We are coming into a very good seasonal point for gold. If you look at the GLD, the best months are typically right in here and kind of like the summertime. But

I think where gold's going to have a problem is, as we get into really September, October, where that issuance picks up and the dollar goes through that big counter trend rally. Yeah, gold's going to have a little bit of a problem at that point. But at the end of the day,

We have so much debt and Washington is even more irresponsible than ever. They're really smoking in the dynamite shed in Washington. When this bill goes back to the House, Eric, I mean, think of like, imagine if you're a fiscal hawk in the House, Eric. The Freedom Caucus, there's 30-ish members, right? They're the most hawkish, the most fiscal austerity fans that we have in Washington. And they've been promising their...

you know, their voting base back home that they're fiscal hawks. Elon Musk just pledged this week to out them if they vote for this. So this bill is going to come from the Senate back to the House. And there's going to be a big showdown because remember, the majority of the Republicans in the House is tiny. I think it's two, I think it's less than five. And so we're going to have a big showdown in the House. We're going to have a big spike in volatility.

This bill is going to go back and forth. The debt ceiling, we're going to drain that Treasury general account every day that we don't get this bill passed and on the president's desk, that Treasury general account, those extraordinary measures, we're going to run out of cash potentially. I don't think we're going to default, but it's going to be high drama.

Elon versus Trump and the Treasury issuance to catch up. We have to issue $1.5 to $1.7 trillion between August 15th and the end of the year. It's the largest Treasury issuance periods in a six-month range that we've ever seen. And it's, like I said, it's going to be potentially $600 billion more than last year.

So the trade setup is absolutely incredible for macro investors the next six months. And on the final slide, page 15, it looks like you're comparing the Citibank Economic Surprise Index, or CESI, to the U.S. 10-year yield. Why don't we start with what is CESI, explain what it's about, and then what does it have to do with the 10-year yield? So the CESI, the Citigroup Economic Surprise Index,

It's not perfect. Many institutional accounts that we speak to talk about its problems. So let's get that out of the gate. But what it does over time is it looks at where the economic data comes in relative to expectations. And what we found is that

We've been recommending in the last month, we've recommended the TLT to clients because of Besant's bag of tricks. But also this gets back to those jobless claims and what the Fed's up against. And it's very, very unusual that we've had this kind of like massive amount of economic data and a lot of negative misses. That's where we get back to the banks. The banks are pricing in a lot of deregulation

but they're not pricing in any economic risk. And so when you see the SESI move down like that, that just means that the economic data is missing expectations. It could mean that the expectations bar was just really too high, too optimistic. But

To us, this is a reason why the long bond trade is working now. If you think of Ray Dalio, right? You think of Paul Tudor Jones. If you think of Gunlack, the bearish bond trade has been so well known because this Liz Truss moment that's been out there for so long. Everyone knows that we have this huge problem in the third, I call it like September, October, November.

And that's where we had that big problem with issuance. But we think Treasury Secretary Besant, we think he has a bat phone into Stan Drunkenmiller. Remember, they worked together at Soros. So they know about this bear case for bonds and they have this bag of tricks, whether it's through the supplemental leverage ratio, what they're doing with Wells Fargo.

what they're doing with stable coins and they're going to try to use stable coins to buy T-bills, right? And that whole type of demand. So they have created this spectacular portfolio of kind of like

bag of tricks that's creating this bond rally. At the same time, claims are higher and the CESI, which is the Citigroup Economic Surprise Index, is a lot lower. This tells me, you know, bonds could rally a little bit more here. I think you want to sell bonds toward the end of August. And then we have this big showdown of issuance, which is going to create a

potentially bearish outlook for bonds in that September, October, November range. It all depends on, it's basically Bessent's bag of tricks. It's what we call, Eric, and this is the most important phrase of this conversation, it's financial repression. We talk about this in our book,

When you try to hold interest rates below the rate of inflation, it's extremely bullish for commodities and hard assets. And at the end of the day, that's Trump's plan is financial repression. When you have a $37 trillion debt hole and you've got tons of bonds that have to be sold, they need to massage.

Interest rates below the rate of inflation, stagflation. That's what they're up against. That's their playbook. That's why hard assets in a lot of the trades that we talked about, platinum and palladium, you can add to gold, silver, the setup for hard assets relative to financial assets, which are just stocks and bonds, just paper certificates, are

the next five to 10 year trade. And this is all part of our book. That is where you want to be in hard assets, not financial assets and paper certificates.

Larry, I'm curious about something that's not in the slide deck. You've been almost as outspoken as I've been about nuclear energy and its importance. I noticed as we went through all the commodities here, you never mentioned uranium. What are your thoughts on nuclear energy broadly and specifically uranium commodity? What do you think and how come not in the book?

So, and thank you for that, Eric. And you and I were out there and you were a lonely wolf. I remember you in 2020, 21, we started to build a position in Cameco in, in that, in our trade alerts for clients back then, 2020, 21. And Cameco is up, I think 110% in 57 trading days. And so,

I think that this high beta risk on move that we've had in equities, you know, what I call it in the end of the first, second quarter, which is the middle of the year, we've had a spectacular high beta move. And all that means in English is high beta is just stocks that move more than the market.

And all the time, the uranium names are in the high beta space. So we've had this big risk on. And so we actually did a trade alert this week where we're selling down our Cameco position. We love Cameco over the long haul. And we were aggressive buyers in client trade alerts in April and May. And here's a fascinating thing.

When the tariffs started to come on on the scene, we started to hear a real bear case on uranium in, say, March as the tariffs were coming in. And then CFOs of companies in the uranium, say, if you're a buyer of uranium or, say, a power plant, you know, you have to move that uranium into enrichment. As you move the uranium around the world,

This really scared people. And so you had this spectacular move down in the uranium equities in April and May. And then as the tariff problems went away, or at least Trump and Besant neutralized that risk,

The, the, the, the, the risk back on has been so spectacular that we're actually reducing uranium and some of the uranium equities relatives because we, we made a lot of good purchases for clients in our trade alerts and in late March, early April and into May, we hosted a call with

the Sprott team, John Campaglia, and we hosted a client call. So I just think that I love the space, but I'm really worried in the next four weeks because of what's happening with the debt ceiling, because of what's happening in Washington. We think the first part of the third quarter, the high beta names are really going to suffer. And so that's where I'm going to be looking to get back in these uranium equities.

Well, Larry, I sure hope you're right because I would love to add significantly to my uranium position. I've been waiting for that dip. And the problem that I have is I think there's a long line of other guys that are waiting for the exact same thing. A lot of people expecting those gaps below the market on the uranium charts to get filled between now and September when we have the WNA conference.

I still hope that that happens and I hope you're right. But boy, it seems like there's a lot of people lined up to on the sidelines ready to buy the next dip. Right. Right. And the only thing that makes me feel some comfort around because I you're right, I don't. And all we've done is just cut our position down by 30 percent. But what's just fascinating is no matter how bullish the case is for uranium, it's

Anytime we go risk off, these names are just for sale. And even the independent power producers, we love the NUKZ ETF. We recommended that three, four times over the last year because it has the uranium names and the independent power producers.

These things, the best truths of the world, the constellations and obviously the chemicals of the world, they just get absolutely hammered at any kind of risk off, which is and that's why they're high beta. So I'm just betting that we still are in a high beta situation where if we go risk off the beginning toward the middle of the third, you know, say August, we're

we'll have a good opportunity. But I agree, there's a long line of people that want to get into this trade, especially with our energy secretary that's laid out in an incredibly bullish future for the Iranian space and the Trump team and everything they're doing around national security. The whole thing is just more bullish than ever.

Well, Larry, I can't thank you enough for another terrific interview. But before I let you go, please tell us a little bit more about what's going on at the Bear Traps Report. I can't imagine anybody not familiar with that publication, but just in case, tell them what it is and also how to follow your work. And while we're at it, please tell us about your book, which is called How to Listen When Markets Speak. Well, we're really proud. The book has been number one, number five on Amazon in the financial space. And

The book really focuses as a whole chapter on the book on nuclear power and hard assets. And so that's, that's, we're really proud of that. The bear traps report, I started off on the retail side of the business in the nineties. And, you know, I always felt as a retail broker that, you know, someone was trying to pull the wool over our eyes. Right. And I wanted to bring kind of

democratizing information and bring kind of a lens on a buy side conversation out to retail investors. And that's what the bear trap support is all about. So we host a conference call every day on the Bloomberg terminal with big hedge funds, mutual funds and pension funds. And we gather the intelligence and then recap that for a broad audience.

And so I'm happy to give a discount to Macro Voices listeners, you know, a special rate because most of our business is on the institutional side and we're happy with that. But I'm at a stage in life where I really want to democratize information. We want to kind of bring that retail investor behind the scenes and take a look at what the...

what the big boys are up to. And for anyone who wants to take Larry up on that generous offer, you can just email info at thebeartrapsreport.com. Tell them you heard it here on Macro Voices and they'll hook you up. Patrick Ceresna and I will be back as Macro Voices continues right here at macrovoices.com. Now back to your hosts, Eric Townsend and Patrick Ceresna.

Eric, it was great to have Larry back on the show. Now let's get to that chart deck. Listeners, you're going to find the download link for the postgame chart deck in your Research Roundup email. If you don't have a Research Roundup email, it means you have not yet registered at Macrovoices.com. Just go to our homepage, Macrovoices.com, and click on the red button over Larry's picture saying, looking for the downloads.

Okay, Eric, let's start talking about equities here. Well, Patrick, I won't be surprised if this rally continues, I don't know, maybe all the way up to 6,500, but I'm already selling into it. Or more accurately, I should say, I've begun to accumulate put spreads on E-mini S&P futures struck between 5,750 and 4,750. So a thousand point spread to hedge the possibility of another round of drama between President Trump and S&P.

Secretary Besant in the third quarter. Well, Eric, what scenario would 6500 happen? In my mind, that would be a reaction to some very positive headlines that would be coming out around the July 9th.

when we have the tariff deadline. If Trump has been working in the background with getting a whole bunch of deals done, maybe some super exciting headlines about the tariff wars being over might spur an impulse of buying in the markets, feeling like all of this is now behind us. That could be that kind of momentum. Now, purely on technicals, the market A is very distinctly in a bull trend.

higher highs. Now that we've surpassed all of the previous highs, that no longer acts as technical resistance. And so the markets have a lot of free reign. At the same time, a number of measured moves are done where 300 S&P points above the 50-day moving average. So when you go back through the history of market rallies, when this stretched off of an average line, it tends to be the

upper boundary of bullish moves. That doesn't make it bearish. It simply means that often the market pauses and consolidates as the market has kind of stretched too far and then mean reverts or consolidates the run. And so there's a lot of reasons to actually technically envision a pause in this advance. What could cause a pause in the market?

Well, one distinct thing is on page three is we saw a very interesting July 1st trend, which is that the momentum value ratio broke down. There was a selling in the most popular kind of AI name starting on July 1st and a very interesting breakout in a lot of value names.

And so why July 1st? Well, that's the end of the second half of the year and the end of the quarter. So there's substantial fund and asset manager quarterly rebalancings going on. And so the question is, did we see a pivot in these trends as there's a new reallocation of capital coming where they start taking out some of these very bullish semiconductor names and other AI names that

have had this huge run and they rotate that out into more defensive spaces. We saw big breakouts recently everywhere from healthcare to consumer staples to the home builders to a whole array of beaten down and left behind commodity names, some of which Larry was referencing throughout the interview. And so with these kind of upticks,

If we see that sector rotation is the name of the game, then it's not necessarily that something bearish has to happen, but rather if the big mega cap market cap names see a little bit of profit taking in the sector rotation, then it's

We could have bull markets running just in other parts of the market while the stock market starts to get a little bit heavy up here. At this stage, for there to be a bearish breakdown in the month of July, I think it needs a meaningful catalyst. And as far as I'm concerned, if we get past these jobs numbers and past the July 9th, which without doubt,

causing some sort of big event, then the only real thing that could crack the markets here in July will be the earnings, which will be past the July option expiration. And so at this stage, I think the markets are going to be a little bit more choppy here, but there is opportunity. And therefore, it's just about identifying where those opportunities are going to emerge. Let's move on to the dollar. What's your thinking here?

Well, the selling continues this week. Very briefly testing a 95 handle on the Dixie before a bounce began. My downside target for this move, Patrick, is 89. Yes, 89. That's another, what, six big handles down. But I'll be very, very surprised if we get there without at least one and probably two significant countertrend rallies, which could come at any time, including tomorrow or next week.

Well, I don't know if I'm as bearish as an 89 handle on the downside, but what we do have is a scenario where the prevailing downtrend is dominant and every bounce is almost immediately sold in this prevailing downtrend. And so with this downtrend still in place, then the most immediate downside measured move is that 95 level you were suggesting that is in line there. But at the same time, this is an

incredibly crowded trade with the sentiment of almost all investors being so decisively in consensus of a bearish dollar. This allows there to be something that squeezes all of them out, the dollar shorts.

out of it with a violent rally. When we were calling that on oil, it just so happened to be a Middle Eastern confrontation that ultimately was the catalyst. But a catalyst always emerges. And if this trade continues to be as crowded as it is, even though the primary downtrend of the dollar may stay intact over the remainder of the year, there's definitely increasing probability that some sort of a counter trend squeeze happens

can emerge here in the months to come. And will it be, you know, something like the resolution of the tariffs or something like that, that creates a little bit of a relief rally? We'll see. All right, Eric, let's touch on oil.

Well, Patrick, so far, my second chance hypothesis that I described last week, suggesting that maybe we're getting a second chance to buy a really good opportunity to get on this upside move before it really gets underway. So far, it's playing out, but we're only a week into this. Let's wait and see what happens. Meanwhile, what are the charts telling you after absorbing last week's whipsaw?

Well, Eric, my thesis on oils that I just don't think that conditions are bearish enough and geopolitical circumstances aren't resolved enough for us to have a new bear decline where we go back to $55 or lower on crude. And so to me, while I don't have necessarily a strong bullish thesis that we're going to like $90 plus on the upside.

I do think that we are on the lower boundary of what's going to be a new trade range. I marked off on the chart on page five what was the six, seven month trade range from basically September of last year all the way through March, which was this range between like $67, $68 all the way up to about $72 today.

And I think that that's a very interesting position to be taking here is that the oil will come back into this trade range and stay up at these more elevated levels. This will be meaningful because that will start turning all of the technicals up

for oil off of their worst levels as we're off of those April-May lows. And it'll be interesting to see whether that's enough tailwind to really start turning many of the energy equities that have been really left behind in this entire bull phase and whether they actually start behaving and creating new bullish opportunities. All right, Eric, on page six, we have that chart of gold. What are your thoughts?

Well, it seems clear that the short-term swing low is in, with both the slow stochastics and the RSI pointed back up again after they both bottomed in extreme oversold territory earlier this week. Now, I guessed that this correction might bottom on, I think I said a high 32 handle, maybe 32.90 or so in last week's podcast. Okay, it turned out it was about $40 lower, just over 32.50. So close, but not quite.

Of course, another wave down is still possible, but I think a rally from here to new all-time highs is actually more likely. We needed that $250 correction to shake off the unwind of geopolitical risk hedges. Now, frankly, I scratch my head trying to understand why the people who unwound those hedges think the risk is fully abated, but

The point is a certain number of people were going to unwind their hedges. Those people have now unwound their hedges as a result of Trump declaring total victory in the nuclear facility strikes. And I guess the people unwinding the hedges bought that story. Right.

Those hedges are now out of the system. You know, that paves a clear path for us now to move higher, which is where I think the fundamentals are taking us, probably toward a new all-time high. So hopefully I haven't jinxed the market and it won't have reduced to the point where you see a print below $32.50 by the time this podcast airs.

But as I'm recording, it's still looking well above $3,350, $3,360 something as I look over my shoulder at the chart here. And I think we're headed maybe back above $3,500. Let's see what happens.

Well, Eric, I bought the dip around the 3300 level where that 50-day moving average was and looking to see whether or not the bulls can follow through. I have this at least from a tactical short-term basis on a short leash because when you have a reversal like this on the upside, it needs follow through. And as far as I'm concerned, one of the most important things

the bulls will need to do next week is to clear 3400 on the upside to prove that this was a buy on dip and this is a continuation pattern for another bull trend i continue to think it's actually super easy to trade here because we're trading right at that 50-day moving average which has basically been a very good depicter of the primary trend that's been in place for over a year and

And so the way I look at it is that either A, we're going to clear $3,400, which then puts $3,600, $3,700 in play, or that fails to follow through and gravitates back down to or below that 50-day moving average.

That would be a short-term indication of weakness and that would make me question whether or not some sort of topping formation could be underway. But I'm giving the bulls the benefit of the doubt now. Let's see whether they can follow through on the upside.

Now, Eric, on page seven, I have that chart of the spot physical uranium. So spot prices of uranium have certainly started to advance here in the last little bit. What are your thoughts here? Well, as mentioned in the feature interview, while I still hope for a meaningful correction or pullback, I'm rapidly losing faith in that actually happening.

The problem is there's a line of just way too many people all waiting to buy the dip. I think there's just a whole lot of people, myself included, who were watching this market saying, okay, I've got my position on, but I don't want to go all the way into my full position until I'm sure that this crazy bear market that we just went through is really and truly over. All of a sudden, prices have doubled dramatically.

But there's got to be a pullback. There's got to be a pullback. There ought to be a pullback, according to normal analysis. But with this many people expecting it, it's almost certain that those dips are going to be bought sooner than later and they're not going to dip as far.

So I think the gaps below the market are not likely to be filled before Labor Day, as I was hoping for, unless there's some big external bearish catalyst that drives it, some event, either broad market risk or some nuclear plant disaster or something happens.

I'm starting to nibble already this week up here at these prices. It's painful because we've come so far up, you know, to be adding more here. I want to wait for that pullback, but I'm just not convinced it's going to happen. August 15th is going to be my deadline to have a full position on. If we get through the end of, well, it's already first week of July. If we get into late July, I'll probably have to start averaging in if we haven't had any buyables

dips between now and then. So I'm hoping for downside before the upside, only because I'm so convinced the upside is coming that I want to put more size on this trade if I possibly can. I will say I'm starting to think more about a downside risk we haven't talked about on Macro Voices before. Nobody's talked about it, frankly. And that is, I believe, and this is purely 100%

personal subjective personal opinion here I think the risk of somebody detonating at least a tactical nuclear weapon in one of these three or four active war theaters that we have going on around the world is

in the next couple of years has reached at least a 50-50. I'm not saying it's going to happen. It's not a prediction, but I think we're at about a 50-50 that somebody is going to escalate to detonating a tactical nuke.

What, if anything, does that mean for investor sentiment around civilian nuclear energy? Well, the only data point that exists for somebody actually detonating a nuclear weapon in warfare is from 1945. That one data point isn't really similar to the current situation, or at least I sure as hell hope not. So if somebody uses a tactical nuke out in the middle of the ocean someplace in a conflict...

Does that cause everybody to freak out about nuclear energy or do they not even associate it? I have no idea. I don't think anybody does. We know that accidents at nuclear plants like Fukushima and Three Mile Island certainly freak out investor sentiment.

will a nuclear weapon detonation cause a big freakout? I'll tell you, if it caused a big freakout right now, I would look at it as an incredible, buyable dip opportunity. I think it could be a very, very big dip.

I think people could get very emotional if that were to happen. But I don't think it really sanely matters to the future of nuclear energy. And I think we need nuclear energy badly enough that we would come to our senses. That event might take several months to a year to blow over. But I think it would be an incredible by the dip if it happens. So we'll see. It's obviously an outlier, but I do think it's possible.

Well, Eric, I have two very distinct opinions. First of all, uh, I think there's, uh, the uranium equities and then there's the actual spot prices of uranium. The uranium equities have had an extraordinary run. And I know that, uh,

You and Larry just had that conversation about them being a little stretched on the upside. I'm in principle in agreement there where this move has really advanced on these equities. And it's not that it can't continue. It's not that Cameco can't hit 80 or higher. It's just simply that the asymmetry of staying in the trade is diminishing massively.

Because a stock that has moved as extraordinarily high as Cameco has up until this stage is vulnerable for a $10 plus correction on the downside at some point. And so the question is, can you get at least $10 more on the upside? And as the payoff is kind of neutralizing, there's an increased benefit of using things like option strategies such as Comcast,

to lock in these upper gains because I continue to think it's far more neutral here where the downside risk is about the same size as the upside potential. And this is the perfect condition from which to implement strategies like that. When it comes to the spot physical though, it really feels like this...

year-long bear market is over. With this kind of a bull breakout, while there will be dips, I think that spot prices of uranium have not had this kind of big run on the upside the way the equities and the enthusiasm in the equities were. I'm far more bullish on the physical uranium trusts than I am on the actual equities.

And Patrick, before we wrap the show, let's hit that 10-year Treasury note chart once again. Well, it's been a trade range for the last six months in the 10-year Treasury yield. Bonds have been quiet, has contributed to why equities, I think, were able to really run because there's been no disruptions from the bond markets. The big question is as we get to the passing of the big, beautiful bill and we get to the necessary Treasury yield,

issuances that the government has to make will we see the treasury bond markets wake up and start creating a little bit of trouble and will that be where equities will start to care at some point at this stage this is a very quiet market i don't not necessarily predicting something is imminent but this trade range really makes this a quiet market and no no real big activity there

But on page nine, I want to highlight that three-month SOFR future. Again, focusing on the December 2026 to encompass 18 months of interest rate policy. We continue to actually edge higher as the question becomes, will the Fed inevitably have to ease up on their rates and become more dovish at some stage? I

I think there's all sorts of things that can happen that will essentially force the central banks to be far more accommodating than they're currently positioned for. And therefore, I remain quite bullish on these silver futures and think that there's room for this to break out of this trade range that's been established over the last two years.

Folks, if you enjoy Patrick's chart decks, you can get them every single day of the week with a free trial of Big Picture Trading. The details are on the last pages of the slide deck or just go to bigpicturetrading.com.

Patrick, tell them what they can expect to find in this week's Research Roundup. Well, in this week's Research Roundup, you're going to find the transcript for today's interview, as well as a chart book we just discussed here in the postgame, including a link to a number of articles that we found interesting. So you're going to find this and so much more in this week's Research Roundup.

That does it for this week's episode. We appreciate all the feedback and support we get from our listeners, and we're always looking for suggestions on how we can make the program even better. Now, for those of our listeners that write or blog about the markets and would like to share that content with our listeners,

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