Our Annual Q&A Part 2 – Happy New Year!

McAlvany Weekly Commentary

Morgan Lewis answers your question on Gold Recycling/Dollar Recycling Philip Wortman on Crypto and Gold What indicators does David McAlvany look at consistently? Welcome to the McAlvany Weekly Commentary. Happy New Year! I'm Kevin Orrick, along with David McAlvany. Well, I sure enjoyed the questions last week, Dave, and look forward to what you have to say on the questions this week. We're never disappointed, are we? David: No, and I'm grateful to be closing out another year with the Weekly Commentary. Kevin, thank you for your efforts throughout the year. I enjoy the engagement with our audience and am grateful for the questions that have been sent in. You know, some of the questions are beyond what I have the capability to answer, so we bring in Philip Wortman and Morgan Lewis to tackle a couple of the ones that are just right down their alley. Kevin: And I'm looking forward to that. Well, tell you what, let's just go ahead and get started. Jeff asks, "Do you see the stock market correcting, and if so, when will that happen? And will it be a minor correction or a large pullback?" The second part of the question is the commercial real estate market, Dave, in America. "Is it still in trouble? If so, how will that affect the banking system? And thanks for your efforts in putting the weekly podcast together." That was Jeff. David: The answer is yes. No idea when we have a market correction. We just know the context is set, and by any measure valuation, it will happen. When is, of course, the billion-dollar question. A '30s-style crash? I think that's less likely. A '70s-style crash, where performance in real inflation-adjusted terms ends up over a course of time being as grave as the 1930s? I think that kind of pressured environment is more probable. So it's either large and all at once, or less extreme—minor, if you want to think of it in those terms—extended, and excruciating over time because of the impact of inflation. Commercial real estate, there are really big refinance needs in 2025. Estimates are between one and two trillion dollars, and so it makes sense that we would see pressure in commercial real estate. But I think it obviously depends on liquidity dynamics at the time. Your ability to refinance that debt, if it is with commercial lenders or if it's in the private markets, it all depends on the current liquidity dynamics and financial market conditions at that time. Part of the commercial real estate market is finding a bottom, part of the commercial real estate market has yet to materially correct. So if we assume that there is another leg or another segment within that asset class—commercial real estate—then I think your banks—commercial banks—will see a lot of stress on their CRE portfolios. Kevin: Dave, this next question reminds me of a conversation I had with a client the other day. He said he's got a Wednesday morning ritual. He pours a cup of coffee, he listens to the Commentary every Wednesday, and I was surprised at how many people do that. They have rituals for actually sitting down and listening. So James—this question reminded me of this—he said, "It's been great listening to the show over the last few months. It's become part of my Wednesday morning routine at this point. I've got a few questions, no pressure to answer any or all of them." Dave, I know you're probably going to answer them, so I'll ask you the first one. "Are there any often overlooked market indicators that you'll be paying attention to in 2025?" David: Well, I love the rituals. It also reminds me of a friend of ours, a client of ours in Mexico, and that's a common thing. Friday evening at the end of a work week, popcorn, a glass of wine, and the Weekly Commentary. Kevin: That sounds like fun. David: And he and his wife have been doing that for the better part of 15 years. Kevin: Wow. Wow. So what are you looking at in 2025? David: Yeah. Yeah,