Will the price of oil ever again top $50 a barrel?

Probably not, according to Dennis Gartman, editor and publisher of The Gartman Letter.

“We have seen the end of the bull market in crude. It’s going to be very difficult for WTI crude oil to maintain much above $50 per barrel for any protracted period of time,” he told the audience at the seventh annual Inside Alternatives investment conference in Denver earlier this week.

Gartman’s pronouncement came during a wide-ranging discussion with Mark Yusko, the founder, CIO and CEO of Morgan Creek Capital Management. The two agreed on much about the future of oil and other commodities, the timing of the next recession and how to survive the coming headwinds.

Oil Sinking

Fracking has not only increased production, it’s made extraction less expensive, said Gartman. And new crude oil supplies are being discovered around the world. In Argentina, for example, recoverable reserves of 4.2 billion barrels were just found. In the well-developed Permian Basin of west Texas, Apache recently discovered another 3 billion barrels of oil.

Increasingly efficient use of oil will also hold down prices.

“We view oil with a lot of circumspection as well. Saudi Arabia made a huge mistake in November of 2014 when they didn’t cut production,” Yusko said. “There will be excess supplies.”

Gartman said the Saudis are likely to pump oil aggressively because they have a “wasting asset” that will be worth less in the future.

The Saudis have about a two-decade window before renewable energy sources make oil significantly less valuable. “Twenty years from now, we won’t be talking about oil. We’ll all be driving EVs [electric vehicles] and autonomous vehicles,” said Yusko.

Commodities Rising

Some say the super cycle for commodities is over, but not Gartman. “Given the numbers of people who have truly thrown up their arms and given up on commodities, and the number of commodity hedge funds that have been forced to close—that’s  the hallmark of a market that’s about to go in the other direction.”

Demand for food will rise because the developing world is growing. History shows that populations increase grain consumption as they advance economically. “You move from eating grain to feeding livestock, and livestock chew up a lot more grain than do human beings,” said Gartman, who recommends owning agricultural commodities for the next five or 10 years.

When commodity prices drop, not everybody goes out of business, said Yusko. For instance, copper prices have been falling and a number of producers have been forced out of the market. But those that remain have seen their stock prices rise.

“The thing that people are missing about commodities is China,” Yusko said. Although some think China’s economy is getting worse, Yusko said it’s getting better. “The One Belt, One Road project might be the biggest industrial project in the history of mankind.” The development strategy, which seeks to link China with the rest of Eurasia by land and sea, is expected to consume an enormous amount of commodities.

Gartman said he’s not a “goldbug” betting on the world ending. He’s “quietly bullish” on gold because of political conditions. He recommended buying it in a currency that could be devalued. “The euro is basically a doomed currency at this point,” Gartman said. He’d rather spend euros than dollars to buy gold, because he thinks the dollar will strengthen.

In one of their few areas of significant disagreement, Yusko said he thinks the dollar will get demonstrably weaker over the next few years. While his is a contrarian view right now, Yusko said the Fed can’t and won’t raise interest rates.

Recession Coming

“The U.S. stock market is the most vulnerable it’s been since 2000,” Yusko said. “We will have a recession sometime in the next 12 months. And when that happens, stocks will go down a lot in the U.S. as a broad index.”

Neither Gartmann nor Yusko indicated they thought the recession they anticipate  in 2017 will be devastating but they did think that nine years after the last recession began, another one was to be expected. Since the Great Recession ended, most of Europe and Japan have suffered two small recessions.

Citing Warren Buffett, George Soros and others, he said, “The best investors in the world who manage their own money have huge amounts of cash. Why? Because valuations in the United States are stupid, and stupid things end.”

Gartman said we’ve been in a global bear market for the last 16 to 17 months. The wild fluctuations in indices that investors have witnessed lately are the types of swings that accompany peaks. He agreed with Yusko’s timing that a recession would likely arrive during the coming 12 months. “I think you’re going to be better off sitting in cash, being very quiet, being patient, and if you have to own something, hedge it up.”

Keeping interest rates low is just delaying the inevitable. “When the cost of capital is zero, the return on capital goes to zero. It’s axiomatic, if you give people free money, they will do stupid stuff,” Yusko said.

Some companies, like ExxonMobil, are actually borrowing money to pay dividends because interest rates are so low. “ExxonMobil is my favorite short,” Yusko added.

The speakers agreed that the next U.S. president would likely face a recession.

Gartman said presidents can effectively handle recessions if they occur early enough in their administrations. He said that both Hillary Clinton and Donald Trump would likely use fiscal policy in the form of infrastructure expenditures to combat a recession. “How will Mr. Trump deal with it? He’ll stamp his feet and gnash his teeth and wail and bemoan things and say he’s going to ‘make America great again,’” said Gartman.

Nevertheless, Gartman said he planned to vote for Trump. “I’ll vote for a fascist over a liar almost any day,” he said, echoing the widespread dissatisfaction with this election cycle’s presidential candidates.

Given the risk of recession, Yusko recommended shorting Europe and European banks. He said the European market could crash 30 to 40 percent overnight if Italy votes in its upcoming referendum to leave the EU. Meanwhile, Deutsche Bank is teetering financially.

Yusko also sees good potential shorts in low volatility U.S. stocks—and Hormel Foods. “Who eats Spam?” Yusko joked with the audience.

Other profitable shorts could include auto companies, utilities and big-box retailers. “REITs may be the most overvalued thing on the planet right now, particularly office REITs. Office REITs are selling at ridiculous cap rates,” Yusko said.

“High-cost New York real estate has got to be the best short in the world. It’s already crumbling at the top. They can’t sell the penthouses and the Russians are no longer coming to the United States,” said Gartman.