This Signal 'Front-Running' Global Depression: Repeat of 1929? | Mike McGlone
Speakers
Mike McGlone
— Senior Commodity Strategist, Bloomberg Intelligence
Summary
Mike McGlone argues the global economy is tilting toward recession and deflation, with the overvalued US stock market as the main deflationary force. He favors gold and expects the gold/silver ratio to keep widening, while being bearish US stocks, Bitcoin, copper, and crude oil. He also sees US long bonds as the next big trade if deflation follows inflation.
- Mike expects short-term tariff-driven inflation to give way to deflation and global recession.
- He argues US stocks are extremely expensive versus GDP and history, with S&P fair value near 4,000 in recession.
- He remains bullish gold but flags it as expensive, with range-bound $3,000-$4,000 trading possible.
- The gold/silver ratio above 100 is viewed as a recession signal and likely to keep widening.
- US Treasury bonds are framed as the next major long trade as stocks and risk assets roll over.
- Bitcoin is treated as a speculative risk asset correlated with Nasdaq, with downside risk to $10,000.
- Crude oil is expected to fall to $40 on supply abundance, weak China demand, and EV/technology substitution.
- The dollar is tied to US risk assets and near support, so no clean directional trade was emphasized.
Ideas
Gold-silver ratio likely keeps widening
Mike says the gold/silver ratio above 100 is an ominous recession signal, historically spiking at the onset of recessions. He expects it to continue widening because silver is increasingly an industrial metal exposed to weakening global demand from tariffs and recession, while gold is the risk-off default. A quick reversal would require US stocks to show resilience or global industrial demand to reverse, which he sees as unlikely.
US stocks due for bear-market reversion
Mike expects a US stock bear market because market cap/GDP is near 2x, an extreme seen only in 1929 and Japan 1989. Tariffs are reversing profit-maximizing offshoring, hurting earnings and consumer sentiment, the Fed cannot ease much because inflation is sticky, and the wealth-effect boost is reversing. He cites Bloomberg Intelligence fair value near 4,000 for the S&P 500 in a recession and calls US stocks his least bullish asset.
Treasuries are next major long trade
Mike says the next big trade is likely US long bonds/Treasuries if his deflation-from-inflation thesis plays out. He argues the US bond market is the cheapest in about 35 years, stocks and Bitcoin are likely to roll over, and 10-year Treasuries at 4.21% look attractive versus China at 1.65%, similar to Japan's 1990s bond rally. He notes he has been early and wrong for two years, but still sees this as the major trade.
Crude oil heading to $40
Mike has been a notable crude bear and expects oil to reach $40. Supply is structurally abundant, with US/Canada exports around 6M bpd versus net imports in 2008, while China demand declines and EV/technology substitution accelerates. US shale breakeven around $50 means prices need to fall to shut off supply, and tariffs and recession add demand pressure. He calls crude a deflationary asset.
Copper faces weak industrial demand
Mike calls copper dicey and later lists it among the least bullish assets. He expects major pressure on industrial metals as US tariffs and global recession hit demand, though copper has been distorted this year by tariff-related flows. He prefers gold over industrial metals.
Still bullish gold despite expensive run
Mike remains bullish gold as the default risk-off alternative and an asset front-running a global recession/deflation. He cites central-bank buying, a reversal from four years of gold ETF outflows to nearly $30B of inflows this year, and the end of prior negative sentiment. He acknowledges gold is expensive after a 33% YTD move and may trade in a $3,000-$4,000 range, but still tilts back to gold, with $4,000 possible if the S&P 500 falls to 4,000 fair value in recession.
Bitcoin likely falls with risk assets
Mike is bearish Bitcoin as a speculative risk asset, not digital gold. He says it is highly correlated with Nasdaq, tends to fall with stocks, and is dependent on a broad crypto wealth machine. With sentiment now bullish and price near overhead resistance, he sees rallies as selling opportunities and major downside risk to $10,000 if it cannot hold above roughly $95,000; the Bitcoin/gold ratio is more likely to fall toward 10 than reclaim 30-40.
Volatility regime is turning higher
Mike notes the VIX bottomed at a six-year low and is now rising, and argues the market is shifting from a buy-and-hold risk-asset regime to a more tactical trading regime. This volatility upturn fits his bearish risk-asset and recession view.
Ethereum weakness likely continues
Mike notes Ethereum, the No. 2 crypto, is down about 50% this year and expects crypto-wealth-withdrawal trends to continue. This makes Ethereum a high-beta short within his bearish crypto and risk-asset view.
Up Next
This The David Lin Report video, published April 29, 2025, features Mike McGlone discussing Gold/silver ratio, SPY, TLT, WTI, COPPER, GLD, BTC, Bitcoin/Gold ratio, VIX, ETH. 9 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Mike McGlone · Tickers: Gold/silver ratio, SPY, TLT, WTI, COPPER, GLD, BTC, Bitcoin/Gold ratio, VIX, ETH