Tom welcomes Jim Welsh to the show. Jim explains his approach to market analysis, which combines technical with macro forecasting. Jim discusses how monetary policy has changed over his career and the consequences of negative real rates and quantitative easing. There has been more and more accommodation by the Fed. Most investors today have never experienced a period of high inflation. Further, bonds and equities are now both selling off, which has surprised many. Since 1981 the use of fiscal and monetary policy to limit economic slowdowns has created unintended consequences of not properly purging the economic system. The Fed has overplayed its hand and is now cornered. Every unit of debt added today is increasingly less beneficial to growth. Debts are now growing faster than GDP, and money velocity has been declining since the mid-90s. This is why we're setting up for a major secular bear market. Many people believe we are in a recession, but the first quarter demand was good. Consumer finances remain strong and people have refinanced mortgages at lower rates. The majority of consumers are in a reasonable position to withstand some inflation. We're not entering a recession yet, but perhaps next year once savings have eroded. Jim shows long-term charts that demonstrate the unusual nature of the recent inflation cycle. We're now seeing good prices decline somewhat, while costs of services have begun to rise. Inflation is affecting a considerable section of the CPI metrics, which probably means a tough time to get below five percent. The odds of the Fed preventing a recession seems low. Gold has done very well for mitigating inflation, but the dollar has created some big headwinds. Gold is likely going to rally toward 1850. We could be looking at a re-test of the highs at some point. Europe is facing a cold winter, and it will be interesting to see what happens to Germany's industry, which is hungry for energy. A recession for Europe is certain given all the dynamics. The dollar is probably approaching a top. Talking Points From This Week's Episode * The negative impacts of controlled rates and quantitative easing.* Why we're not in a recession yet, likely next year.* Thoughts on the labor market and overall consumer finance sentiment.* His outlook for gold, the dollar, and indoor thermometers in Europe this winter. Time Stamp References:0:00 - Introduction0:48 - Technicals + Macro2:20 - Time & Monetary Policy6:30 - Q.E. & Investment Risk9:20 - Fed Losing Control16:55 - Recession & The Charts21:38 - Consumer Strength & Credit26:15 - Labor Market Tightness36:28 - Job Growth Slowing40:33 - Recession Indicators43:49 - Fed Success Rate48:43 - The Neutral Zone54:20 - Fed's Breaking Point?56:52 - Inflation History59:32 - Recession Odds1:06:00 - Inflation Relief1:07:59 - Treasury ETF TLT1:10:27 - S&P Chart Thoughts1:13:35 - Gold Outlook1:17:35 - The Dollar & Europe1:20:10 - Wrap Up Guest Links:Website: https://macrotides.com/Twitter: https://twitter.com/JimWelshMacroE-Mail - Offer: jimwelshmacro@gmail.com Jim Welsh is a student of the financial markets and a seasoned veteran of investing with forty years of portfolio management experience, including security research & analysis, model building, portfolio construction, asset allocation, and is a specialist in technical analysis and macroeconomics. Did we mention he is also an all-around good guy? As a nationally recognized financial expert, Jim has been quoted in Barrons, the San Diego Union-Tribune,
Tom welcomes a new guest, David Hay, to the show. David is a long-time investor and author. He recently released his book "Bubble 3.0" which is a warning about the problems inherent in the financial system. The Fed being the main culprit for bubble creation, and such bubbles always get wrecked. The Fed has kept rates at great depression levels despite reasonable economic activity. He recalls not being negative enough during 2005 regarding the housing market, which blew up. David believes this time around will be similar and things will get quite bad. We've had a wealth wipe out on par with the end of the tech bubble. Many stocks are down around seventy to ninety percent, but this time people are losing in stocks and bonds. People believe there will be another big rally, but he doesn't see it soon. The environment of zero and negative interest rates is crazy, and we may have seen peak insanity. Q.E. wasn't inflationary due to a corresponding drop in money velocity. However, during co...
Tom welcomes Vincent Lanci back to the show. Vincent discusses the position of J.P. Mogan and Citibank, who hold a large gold derivative position. They've changed their balance sheet accounting methodology due to Basel III rules. Banks are going to take advantage of different countries regulations to arbitrage. The banks are in the same condition they we're in previously. The gold dealer market has become smaller, and regulators seem happy to herd these derivatives into one large bucket. Smaller banks have exited out of the market. In light of what has happened with nickel at the LME and the government will do whatever necessary to protect the major banks. As Keith Wiener says, "Gold is not like other commodities because it is not consumed. All the gold ever mined remains, still exists. It's not destroyed and doesn't become irretrievable." Gold is a useless item, which is why it's a great store of value. Money, including fiat, has no real practical purpose. At the central bank level...
Tom welcomes back, Keith Weiner, to the show. Keith is the President & Founder of Gold Standard Institute USA and CEO of Monetary Metals. Keith discusses the recent "Uganda gold discovery" and all the anti-gold people believe it's going to collapse the price. Even if it's true, no one is going to mine anything below the cost of production. All the gold ever mined in history is still exists, and all of it gets recycled. Gold produced doesn't really go away. Keith explains how backwardation works in commodities. It means if you have crude oil in storage, you could sell it today for delivery in the future. It's a sign that we have scarcity in the market. Gold serves as an excellent benchmark for measuring your wealth in ounces instead of dollars. It's difficult measuring wealth in currencies that consistently shrink. Keith argues the dollar doesn't determine its value strictly from the quantity that exists. If that was the case, the dollar wouldn't be worth much today. Gold has strengt...
Tom welcomes back Don Durrett Author, Investor & Owner of GoldStockData.com to the show. Don is taken aback by the strength of the dollar. He focuses on predicting markets out about six months. Currently, he is most concerned about a rebound in the economy because that would affect gold. He wants to see $2500+ for gold, but that may require serious weakness in the economy. Everything depends on the effectiveness of the Fed's magic tricks. We're in a correction inside the longer term bull market. So, long as we remain in the channel, we could rally by the end of the year. 2023 should be a good year for gold as metals will strengthen once the dollar pulls back. The dollar is going to remain strong until the Fed pauses. It's just a matter of time until rates go down. He expects the Fed to pivot next year. September will be a critical month, and he expects another rate rise and a hike this month is all but certain. This will put further downward pressure on markets. Politically, they wi...
Tom welcomes back Axel Merk to the show. Axel is the President and CIO of Merk Investments. Axel discusses the correlations between real rates and gold. Gold is supposed to be an inflation hedge, but people get frustrated when it doesn't immediately respond to inflation predictions. Consumers are seeing the problems in their wallet at the gas pump. Real rates are useful for predicting the markets. The Fed tells us what they want, but they don't explain how they plan to achieve their goals. Central banks often can't see the future because they rely on an idiotic backward looking framework. The Fed cares about bond markets. They aren't concerned about commodity prices. Ultimately, their goal is to keep the banks in business. The Fed is focused on demand, but doesn't know how to handle supply shocks. The political reaction to supply shocks is to provide additional stimulus or price controls, which exacerbate the problem. Instead, they should encourage additional production, and that wo...
Tom welcomes Lawrence Lepard back once again to discuss the markets, mining industry, and the fragile state of the economy. Lawrence discusses the supposed massive discovery of gold in Uganda and why it's hype and absurd. It would have to be about a hundred times the richest mines in production today. A high dollar encourages countries to find alternatives. We're living in a world of monetary chaos and enormous debt structures. ZIRP and NIRP have created enormous financial distortions which are only getting worse. We never imagined that money could get this cheap and markets could get so overvalued. The bubble has found a pin and everything is down twenty plus percent. If they don't pivot, we're looking at a major recession or depression because a Ponzi can't be tapered. Markets are going to go to zero if Powell maintains his approach. We've seen 31 trillion in valuation loss worldwide in equities. We've wiped out one and half times total annual U.S. GDP in paper wealth in six month...
Tom welcomes back Gareth Soloway, President, CEO & Chief Market Strategist for InTheMoneyStocks. Gareth discusses how institutions are often invested in the latest hot thing. They are now in oil, and we're likely to see further downside in oil. Funds are continually looking for the next thing to rotate into, and now we're back to tech stocks. Later in the cycle, we will get to a panic point. Sometimes being in cash is the best place. The bottom will be in when we reach the acceptance step of the grief stages. When everyone is frustrated with markets, you will recognize the bottom. We're currently hovering around the 2017 high for Bitcoin, and we will probably see 25k in a rebound. There are many similarities between crypto and the dot com bubble. We need to see 80-85% decline, as there are far too many other coins. When everyone is calling a bottom usually means we haven't reached that point yet. Gareth believes the Fed will change policy when unemployment rises significantly. The F...
Tom welcomes back Chase Taylor to the show. Chase is a macro strategist and editor of Pinecone Macro Research. Chase discusses the energy trade and why it may be getting a bit crowded. It's probably time to take some profits. Taking the opposite view of Jim Cramer is often a good contrarian play. We're seeing demand destruction beginning for commodities as we enter into recession. We see that with copper at the moment. It's important to understand the differences between prices of crude and refined products. Refinery capacity influences prices and the China has been growing its refinery capacities. He expects further declines in fuel prices and a decline in inflation prints. His April newsletter was the most bearish, and it's clear the Fed wants equity and asset prices to decline. Nominal consumption numbers look acceptable, but people are using up savings. Moving forward, growth will be questionable until things bottom out. Currently, demand destruction is occurring fastest in the ...
This is an edited recording of our live Twitter Spaces event from June 28, 2022. This is an open discussion on silver and the precious metals markets. Participants included David Morgan, Bob Coleman, and Jim Hunter. We take answerer a number of listener questions. Follow our Twitter to find out when the next live stream space will occur. Be a part of the conversation! Guest Links: David MorganWebsite: https://silver-investor.com/Twitter: https://twitter.com/silverguru22YouTube: https://www.youtube.com/user/silverguru Bob ColemanTwitter: https://twitter.com/profitsplusidWebsite: https://www.goldsilvervault.com/ Jim HunterTwitter: https://twitter.com/JimSuncomm1Website: https://allendale-inc.com