2007 Red Flags Flash Again as Lehman Veteran Says Markets Are Blind to Coming Crisis

Lehman Vet Issues DEFCON 3 Warning as AI Destroys Middle Class Jobs and Fed Faces Policy Trap

Larry McDonald, former Lehman Brothers strategist and founder of The Bear Traps Report, delivers a high-alert DEFCON 3 warning on 21 systemic risk indicators in this no-holds-barred interview with Kitco News Anchor Jeremy Szafron, recorded September 10, 2025.

McDonald exposes a perfect storm of crises converging beneath record stock market highs. He says your 401k has already been hijacked by AI, warning that middle-class job destruction is accelerating and Wall Street is ignoring the fallout. He breaks the moment into three core breakdowns:

Crisis of Confidence – Bonds are in a historic rout as 'safe' assets collapse

Crisis of Reality – AI euphoria is hitting a hard wall of energy grid limitations

Crisis of Policy – A debt-trapped Fed is steering toward its most dangerous policy error yet

McDonald also outlines his current investing playbook for surviving what's ahead—including why he’s exiting major miners, doubling down on natural gas and coal, and shifting into hard assets like gold, silver, copper, and energy plays that will lead during the great stagflationary rotation.

Follow Jeremy Szafron on X: @JeremySzafron (https://twitter.com/JeremySzafron)
Follow Kitco News on X: @KitcoNewsNOW (https://twitter.com/kitconewsnow)
Follow Larry McDonald on X: @Convertbond (https://twitter.com/Convertbond)

00:00 - Intro
01:13 - The Real Inflation Data vs. The "Hammered" Consumer
03:39 - BREAKING: My Systemic Risk Indicators Just Hit "DEFCON 3"
07:14 - The Credit Time Bomb: "Contagion is Spreading"
11:25 - The REAL AI Trade: Short the Hype, Long the Plumbing
14:59 - The "Great 401k Hijacking": Dark Side of Passive Investing
17:45 - How the S&P 500 is "Being Destroyed by Gaming"
18:18 - The AI Revolution Bifurcates: China vs. The US
19:47 - Why the "Sell China, Buy India" Trade Failed
20:21 - My Strategy for Copper and Gold
24:35 - My New Top Trades: "Beaten Up" Coal & Natural Gas
28:30 - Bitcoin vs. Gold: The "Pumpers and the Strippers"
29:42 - Final Predictions: "The Sky is the Limit for Copper"

#LarryMcDonald #Recession #Stagflation #AI #Nvidia #Gold #Silver #Copper #Investing #KitcoNews #CreditCrisis #401k

__________________________________________________________________

Like, share, and subscribe to Kitco News—and turn on alerts to stay current with expert interviews, market insights, and breaking news coverage.

FOLLOW US:
X: https://x.com/kitconewsnow
Instagram: https://www.instagram.com/kitconews
Facebook: https://www.facebook.com/KitcoNews
LinkedIn: https://www.linkedin.com/company/kitconews

Visit: https://Kitco.com/ for live gold, silver, and crypto prices, the latest mining news, and macroeconomic insights.

Live gold price and chart: https://www.kitco.com/charts/gold
Live silver price and chart: https://www.kitco.com/charts/silver
Live crypto market data: https://www.kitco.com/price/crypto

Learn more about Kitco News: https://www.kitco.com/news/about/

For more information on advertising, sponsorship and marketing promotions – please visit our online media kit at: https://www.kitco.com/advertising

Disclaimer:
The videos are not intended to provide trading advice, and the views expressed do not necessarily reflect those of Kitco Metals Inc. Kitco News, its anchors, producers, and reporters are not responsible in any way for the performance or actions of any sponsor, advertiser or affiliate of Kitco News. In no event will Kitco and its employees be held liable for any indirect, special, incidental, or consequential damages arising out of the use of the content in this video.