Animal Spirits Podcast – "Gold's 1987 Moment" (EP. 450)

Date: February 4, 2026
Hosts: Michael Batnick & Ben Carlson

Overview

In Episode 450 of Animal Spirits, hosts Michael Batnick and Ben Carlson dive into an unprecedented stretch of market volatility, focusing on the dramatic boom and bust of gold, silver, and crypto—likening silver’s crash to a 1987-style event. They explore how social media, algorithmic trading, and global retail flows are reshaping market cycles, dissect the shifting landscape of AI, discuss changing retail investing patterns, and reflect on societal and generational tensions (especially around housing). The episode is fast-paced, mixing market commentary, cultural touchstones, behavioral economics, and personal asides, all delivered with their signature candor and humor.

Key Discussion Points & Insights

1. The Fastest and Wildest Market Decade (01:23–04:38)

• The news cycle is relentless, covering everything from market sell-offs, meta technology mergers, AI agent breakouts, Disney/Netflix news, to new Fed leadership.
• Michael claims:

  “This is by far the most exciting market decade ever.”
  (04:12)

• Rapid shifts and volatility are enabled by social media and algorithm-driven investing, accelerating both market trends and reversals.

2. The Gold and Silver Crash – Social Media’s Market Impact (04:38–13:59)

• Silver’s Parabolic Rise and Crash:
  The price of silver surged over 25% in days, then crashed by as much as 33% on a single day—worse than the metal’s 1987 crash (05:09–05:49).
• Quote:

  “It was down almost 30% on Friday… worse than a 1987 crash for silver in a single day.” – Michael (05:27)

• The boom was fueled by Reddit and algorithmic platforms serving up hot trends, with retail money flooding in and out, sometimes via leveraged ETFs experiencing wild swings (06:03–07:38).
• Despite the initial meme-stock mania of 2021, “degenerate” behavior in markets hasn’t faded—retail addiction and participation has only multiplied.
• Global nature: China’s retail demand also contributed, with one silver ETF reaching a 42% premium due to rampant demand (09:55–10:21).

3. Gold’s Supercycle? Deconstructing Commodity Narratives (11:08–13:52)

• The mainstream narrative of dollar debasement was challenged; instead, geopolitical events, deglobalization, and hoarding by central banks are boosting metals, per Jeff Currie’s thesis.
• Michael:

  “Commodities go up, someone says it’s a supercycle… but I think we had a supercycle compressed in like 15 months.” (11:41)

• Despite historic volatility, gold's annualized return in the 2020s doubled in 13 months (from 11.4% to 23%).

4. The Changed Nature of Markets & Retail’s Role (13:59–16:42)

• Internet-driven speculation is here to stay; retail volume now makes up about 20% of all trades and is never going back down to pre-pandemic levels (14:24–14:48).
• Hedge funds and market-makers capitalize on this liquidity, but are not losing money.
• China’s influence looms large: “It’s Shanghai over London,” as local demand now drives prices.

5. The Rise of Prediction Markets – A New Economic Signal? (16:42–21:01)

• Ben and Michael debate the long-term impact and potential economic utility of prediction markets in narrowing the range of future outcomes, potentially creating “massive economic efficiencies.”
• Kyla Scanlon is cited: Prediction markets could meaningfully affect real-world behaviors (19:50).

6. Earnings, Tech Efficiency & AI Winners (21:02–24:36)

• Rising corporate profit margins in the S&P 500, even as Big Tech (Meta) burns $80B on the metaverse/AI—yet Meta’s margin is still a hefty 41% (22:03).
• Michael:

  “There’s been no project in the history of mankind…I’m guessing, maybe there’s something I’m not thinking about, that has lit $80 billion on fire and not only survived, but thrived.” (22:26)

• AI is being used primarily to maximize engagement and ad targeting—Meta’s “win” is ultimately making people spend more time online, sparking a depression about the true social value of tech “progress.”

7. “Nobody Knows Anything”—The Humility of Forecasting (25:00–28:14)

• Referencing Bill Simmons, William Goldman, and Stanley Druckenmiller, the hosts reinforce that experts and legends alike regularly get forecasts utterly wrong.
• Michael:

  “Almost everything ages poorly. Once in a while you get something right.” (28:02)

• Example: In 2020, Druckenmiller called equities’ risk/reward the worst he’d seen—since then, the market was up massively.

8. Retail Investing Surges & Bubbles Dispersed (30:34–31:36)

• Jeff Yass’s data: Retail now accounts for over 20% of US trading volume, exceeding long-only and hedge fund flows combined (30:55).
• Signs of broadening from AI-dominated stocks to new bubbles (SanDisk spin-off, EM ETF flows).

9. Emerging Markets & Dollar Dynamics (31:55–33:51)

• EM ETFs record historic inflows, possibly marking a cyclical handoff from US stocks.

10. Economic & Generational Pressures – Housing, Inequality, and Frustration (51:53–56:21)

• Trump’s controversial stance: “I don’t want to drive housing prices down...I want to drive housing prices up for people who own homes.” (52:08)
• The generational divide: Access to housing as the locus of wealth, and a potential powder keg for demographic conflict.
• Ben:

  “Everything comes down to housing…If they can't afford housing or they feel like they can't afford housing, they're going to be mad forever...” (54:05–55:19)

11. Societal Changes – Technology, Fake Stories, and Believability (41:44–45:55)

• AI rapidly approaching “Her”-style personal assistants: Michael is awed by a demo of an AI agent controlling a computer via phone call (42:41).
• On the downside, viral feel-good stories are now widely dismissed as AI-generated fakes; trust is eroding in everyday stories (45:12).
• Ben:

  “We're just not going to believe anything anymore. And that's scary.” (45:49)

12. Food Delivery, Consumer Spend, and Cultural Shifts (61:00–63:55)

• Explosive growth in delivery app usage, even among lower and middle-income households, despite high costs and inflation concerns.
• Michael admits he was wrong about the stickiness of pandemic-era food delivery:

  “I thought this was going to sort of like business travel… I really thought this was a pandemic phenomenon and that people wouldn't waste their money. But here I am wasting…” (63:20)

Notable Quotes & Memorable Moments

• Michael (On commodity speculation):
  “This is worse than a 1987 crash for silver in a single day.” (05:27)
• Ben (On meme speculation):
  “Remember when it was like the meme stock thing was going to be a flash in the pan? …It’s multiplied.” (07:38)
• On AI’s ‘winner’:
  “The most depressing winner of AI is Meta.” – Ben (24:00)
• On forecast humility:
  “Almost everything ages poorly. Once in a while you get something right.” – Michael (28:02)
• On ‘bubble’ avoidance:
  “Nothing could be better for all of us for building long term wealth than avoiding a bubble.” – Michael (30:10)
• On emerging market resurgence:
  “From 2010 to 2024, emerging markets stunk out loud. They're up 65%. In total, the S&P was up over 600%.” – Ben (32:43)
• On housing and generational anger:
  “Everything comes down to housing… If they can't afford housing or they feel like they can't afford housing, they're going to be mad forever.” – Ben (54:05)

Timestamps for Important Segments

| Segment | Timestamps | |-----------------------------------|---------------| | Market Volatility and “Decade” | 01:23–04:38 | | Gold/Silver Boom and Bust | 04:38–13:59 | | Commodity Supercycle Theories | 11:08–13:52 | | Social Media’s Market Impact | 13:59–16:42 | | Prediction Markets | 16:42–21:01 | | S&P Earnings & AI’s Role | 21:02–24:36 | | “Nobody Knows Anything” | 25:00–28:14 | | Retail Flows & Bubbles | 30:34–31:36 | | Emerging Markets Cycle | 31:55–33:51 | | Fake Stories, AI, Trust | 41:44–45:55 | | Housing Crisis, Demographics | 51:53–56:21 | | Food Delivery’s Social Impact | 61:00–63:55 |

Additional Highlights

• The hosts bounce through pop culture (Hollywood screenwriting, 90s movies, Sinbad), humorous debates on car parking styles, grievances about home repairs, and strategies around food delivery.
• Final observations hammer home the ongoing acceleration of news, the overwhelming “beat” of information, and the challenge for any investor (or citizen) to keep perspective amid the chaos.

Conclusion

Episode 450 offers a tour de force across financial markets, policy, society, technology, and even plumbing. Michael and Ben’s conversational, sometimes exasperated, style highlights just how fast and absurd the financial world has become—and reminds listeners that beneath the surface, human behavior—be it greed, fear, addiction, or tribal loyalty—remains the constant driver. Whether it’s gold’s wild ride, prediction markets, or the next market narrative, there’s never been more noise. Their advice: tune in, but hold your forecasts loosely; nobody, no matter how expert, really knows what comes next.