Kitco NEWS

Fed Nightmare Setup: Oil Up, Jobs Weak, Credit Cracking | Larry McDonald

Mar 17, 2026
Guest
Larry McDonald
Larry McDonald, founder of The Bear Traps Report and author focused on credit cycles and hard-asset strategies. He unpacks an unprecedented oil supply shock and fertilizer-driven food inflation. He warns of private-credit stress from AI-fueled CapEx and a Fed trapped between soaring energy prices and weakening jobs. He highlights rotation into uranium, coal, gold miners, and volatility as tactical responses.
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INSIGHT

Energy Shock Moves Inflation Into Food

  • The IEA-backed 8 million barrel daily drop and a 28% surge in urea fertilizer shift inflation from gas stations into grocery bills.
  • Larry McDonald says clients are rotating into wheat, corn and hard assets as DBA ETF outperforms the NASDAQ.
INSIGHT

Diesel Inflation Can Crush Gold Miners

  • Diesel cost spikes are squeezing gold miner margins and can trigger 20–30% drawdowns despite higher bullion prices.
  • McDonald notes diesel is 20–30% of operating margin and up ~70% off December lows, creating buying opportunities on weakness.
ADVICE

Buy Select Royalty Stocks Not Broad Miners

  • Favor royalty/streamer companies and select senior producers over broad miner exposure to mitigate jurisdictional and cost risks.
  • McDonald recommends Wheaton Precious Metals and buying majors on weakness after diesel-driven drawdowns.
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