The David Lin Report
This Signal 'Front-Running' Global Depression: Repeat of 1929? | Mike McGlone
Apr 29, 2025
In this engaging chat, Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, dives deep into the signals of a looming global recession. He discusses how gold's performance against silver foreshadows economic contraction and the impact of tariffs on inflation. Mike highlights the conflicting trends of affluent consumer spending amid recession fears and unpacks the Phillips Curve's current disruptions. Finally, he explores the ramifications of a declining U.S. dollar on commodities, including gold, Bitcoin, and crude oil.
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Quick takeaways
- The gold-silver ratio indicates that as unemployment rises, gold emerges as a safe asset, signaling a potential global recession.
- Geopolitical tensions and recent U.S. tariffs are reshaping commodity markets, affecting supply dynamics and contributing to deflationary pressures.
Deep dives
The Correlation of Gold and Silver with Economic Trends
Gold and silver typically see price increases alongside rising unemployment and declining stock markets, suggesting an inverse relationship with economic stability. Historical data indicates that these precious metals have consistently performed well during economic downturns, often front-running trends of recession. For instance, as unemployment rates rise, the demand for gold increases as a secure asset, while silver's reaction often follows behind due to its industrial use and economic sensitivity. The current trajectory indicates that a potential global recession is approaching, driven by such trends in the gold-silver ratio and central bank behaviors, specifically their increasing purchases of gold.
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