Greg Weldon: All Global Central Banks Will Let Inflation Run Hot Now, Good For Gold & Commodities
hi everyone this is Jason B of Wall Street for Main Street welcome back to another Wall Street for Main Street podcast interview today’s special guest is a first-time guest I’ve actually been following his work for many many years he’s been a professional Trader for almost 40 years he worked in the pits at comx trading gold and silver and other Commodities he’s also written books on trading a book on the gold market and trading he started as a uh broker at Leman brothers and credential Securities he moved on to be a hedge fund manager he started Welden Financial in late 1997 since then he’s been putting out a newsletter covering pretty much everything for macro central banks liquidity stocks bonds and commodities Greg Walden thank you for joining me wow man I’ve I’ve done a lot of things I’ve kind of done it all started from the very bottom and work my way all that to the very top and yeah 40 years man but uh I’ve seen a lot so we have a lot to cover you’ve seen a ton of different cycles and the cycles that we’re seeing right now the stuff we’re seeing right now is just really really where we’re recording this interview on Thursday April 25th 2024 the US dollar Index is at 105.5 the 10year US Treasury yeld just in the last month or so it’s gone from 4.2% yield up to 4.7% looks like it’s going to go higher the gold price is also screaming higher it’s gone up almost $250 in the last month or so it’s over 2,300 at $2,331 I want to get your thoughts though on the macro situation right now because a lot of people have expected the FED to cut rates but it looks like these other central banks are going to start cutting rates before the FED what are your views on the current macro situation with the fed and other central banks well I think you know first of all you got to give a little context to this because this really kind of dates back to when pal took over you go all the way back to 2018 and you really to get the full story to understand why Powell is taking the stance he’s taking now all right and if you go back to 2018 Jerome pow has told us everything he was going to do and he’s gone out and done it he might be the most transparent Central Bank we’ve ever seen and in 2018 the FED did 11 different white papers over 300 pages I read every single page I know there was only 5200 downloads of this document so I don’t think a lot of people read them but the it was fascinating because it was a discussion of the protocols around a new paradigm of of policy and how central banks you know since 2008 have had this situation where the you know what you might call the neutral policy rate well let’s define the neutral policy rate because it’s a heck of a lot lower than it used to be given you know the situation with debt and how much we have to do to stimulate growth when we have recessions now right because this is exponential and it’s a 50-year trend since they took the dollar off the gold standard in 1971 so when you look at what they said they said look we’re going to let inflation we want inflation to be higher and we don’t see the worst thing is the debt deflation they fear that more than anything I wrote that in one of the books I wrote in 2006 six was called you know I mean it is like this kind of monetary Armageddon debt deflation would be so devastating with all the debt it would create a depression the likes of which you might not even be able to print money out of I mean look at Argentina I mean it’s kind of a Forefront of that kind of trend all right and the macro sense and when this came to 2018 in the FED they said look we want inflation to securely be 2% and above and to and to make this happen we are going to let inflation run as high as it can and there’s something in theory called tolerance bans in other words we’re going to say okay we have a 2% inflation rate we want it to be above 2% well you wanted the average to be above 2% because we want it to be sustainably at or near 2% so what moving average do we use we decided on an eight-year average which was interesting because that means you would have to get the average and the period of time that inflation would have to be higher to be longer because it’s been so low inflation for so along so from that context let’s let inflation go as high as we want we’re not going to have a tolerance band in other words if it gets to six then we’re going to get worried and we might actually scale some you know policy back a little bit so there’s eight-year average there’s no tolerance banss inflation go as high as it it wants to go we’re going to let it just fly and then because jome pal is a disciple of Paul vulker and when you listen to Jerome pal you can go back and take vuler speeches on Capitol Hill and the words are virtually the same and when you say well pal says we can execute the vulker Playbook and we can know raise rates dramatically and bring inflation down so this is where they’re at now they want to ensure okay that inflation you know kind of comes down but also stays above two so it is really like trying to walk the tight RPP across Niagara Falls it’s almost an impossible task that the FED is faced here in this case okay it is the effort to get inflation back to 2% and you could say that they’re not going to succeed and while they might get inflation down close to two that you’re going to see it vacillate probably higher for a lot of reasons here all right a lot of this is base effect a lot of is energy there’s a lot going on when you talk about some of the things that have been higher they’re sticky they’re not necessarily coming down you only renew your rent theoretically once every year so these are kind of things that are going to stay on the higher end some of the Commodities have come way down but now they’re coming back up a little bit which is concerning the fed you look at base metals are breaking out look at Copper within that context they really want to stay this tight longer because if inflation comes back up to four or above with a policy rate of f five and a quarter to five and a half they’re barely restrictive and if inflation God forbid came back to five they’d be neutral now there’s a lot you could talk about beyond that is it going to be okay to be neutral down the road if inflation starts to crimp the economy you could also suggest that if inflation stays at three all right three and a half which I doubt for now at least in the near term that the FED would have room to cut because they’re 200 plus basis points on a real fed funds basis that’s punitively restrictive as opposed to sufficiently restrictive so you try and tie all that in with what the what’s going on with the fed and what we saw in the last you know year or so is that the market priced in six to seven rate Cuts in 2024 which was ludicrous the market ran up and you have this whole Fed rate cut bubble then you throw in AI all right and the Very select sector that this is going to you know boost and this is why you see the breadth in the market is so poor really and then you throw in even something like people believe the consumer is quite strong here I hear this on television all the day it makes me have to change the channel I mean I can’t even watch Financial TV you know except to get the headlines first thing in the morning for much more than 15 minutes when I listen to these people talk because it’s like if you say it it’s true that’s not really the way it works you need to back it up with Statistics and when people say the consumer is strong the stati the statistics completely Bei that door process all you got to do is take the retail sales take the consumer discretionary sectors apply the inflation adjustment because retail sales doesn’t take into account the price changes and you’re flat to negative for the last like 16 months in retail sales the consumer when you take wages all right you take wages of let say it’s four to four and a half percent and I love to you know go through the numbers and kind of you know destroy the statistics based on what people are trying to make them out to be when you look at the wage gains and there was a couple months ago everyone’s all excited because average hourly earnings was up big and it was a 4 and a half percent year-over-year rate what they didn’t know or didn’t care to know was the fact that hours worked fell and the weekly take-home pay fell for the month and it was actually below 3% year over a year which is below any inflation rate that you might want to apply to it the point is real wage growth is flat at best there’s no real growth in wages to account for the higher prices you’re paying for stuff and then you talk about savings savings lower now than it was in 2019 you blow through $ trillion dollars of savings and then you kind of look at well credit cards we know that credit cards have exploded people are using credit cards and it’s like it’s the credit card companies that are reporting that consumers are so strong which is really interesting to me consumers are borrowing the most money ever at the highest rate ever to borrow money that doesn’t bode well for the future when a lot of people are living on their credit cards have no savings and their wages are not going up so how the consumer is strong when retail sales are flat to down in almost every discretionary category except online shopping and eating and drinking establishments every single one down year-over year and has been for months on an inflation adjusted basis so you have a polarized Dynamic that the fed’s looking to deal with here and I think the outcome and this is a long answer for just the FED because there’s so much more to talk about macro we talk about debt in particular but when you come back to the FED I think you are coming to the point where the FED is going to realize and the markets are going to realize they have to acques to generally higher rates of inflation and I could see a case where it’s they raise basically go to an inflation uh range Target like some central banks have of something like two to two and a half two to three and if you look at their dotplot for 2025 everything’s right around two and a half inflation is two and a half at funds is to I it’s kind of like equal in a in a sense that would suggest that the economy is not really even doing that well which is probably going to be true so I think that that’s the next big play is that when the FED kind of does have to almost forced to acques to higher rates of inflation because inflation doesn’t come down and I think that the FED would like to see some disinflation in the equity Market too as part of insuring because that would help squelch some of the higher commodity prices we have right now but to that degree you know that’s a dangerous game because you’re kind of it’s almost a house of cards and if you pull too many cards out you know what happens so again you know the fed’s job I wouldn’t want for the for the life of me but I think ultimately acquiescing to higher General rates of inflation which will boost commodity prices and it will boost asset prices so I think to get there you probably need the stock market to come off and I think that’s the next phase okay you went through a lot here let let me um ask you some additional questions based on what you said do you think that the FED is trapped then uh with a supply and demand issue in US treasuries based on the budget deficits that DC is running and that there’s a serious uh supply and demand issue with treasuries and what I mean by supply and demand is the budget deficits DC is running spending from DC and how the foreigners like China Germany Japan do not want to buy the treasuries that they used to yes yeah I mean I think that that’s definitely a big part of this is they kind of feel like they’re gonna have issues with the bond market and I mean let’s be honest I mean you know spending’s out of control February budget numbers they spent twice as much as they took in I mean that’s insane I I just don’t even understand how that happens and they’re just G to borrow another hundred billion here to support Foreign Wars I mean you know let let the Ukraine borrow the money from us I mean let’s lend it to them we we give it to them why are we the people the public paying for all these wars over there um you know to whatever extent I don’t want to get political about it and certainly you want to support those that are under attack but at the same time the bigger picture kind of dynamic on that side of the world is has changed and this is one of the biggest things that I said at the beginning of this year that you could have said in the beginning of 2020 that one of the big shifts that’s going to come as the US will no longer want to be or be able to be the the military police to the world and I think that there’s a kind of pulling in on this kind of thing too but when you look at the debt and deficits it’s clearly out of control it’s gone parabolic and to the degree that this means the supply of debt is huge again you’re borrowing from the public and the means of financing is borrowing from the public so it’s it really is kind of crazy when you look at it when you’re taking in new money for Social Security to pay the retiring people and their benefits Social Security taking in new investor money to pay old investors that are cashing out what does that sound like we all know what that is in that context in that context it puts the dollar really under the gun here going forward but in as it were with the fed and how this all applies absolutely this is part of the equation of the FED being forced to acques to higher rates of inflation it’s the only way I mean you’re going to print money I said this another thing I said in one of the books was when you’re staring into a debt deflation Abyss official D will choose to reflate at any and all costs no matter what and that’s where we’re at so they will continue to print money this is the trend now and bottom line Jason when you really talk about what is the most important thing that we can discuss here is that the biggest trend is the debasement of the purchasing power of paper currencies everywhere on the planet and that is the case for hard assets and that is the case where the gold bugs all of a sudden get excited and you see gold up by $320 since February which is higher than the entire price of gold was when I started a trading for it at comx it was less than $300 an ounce and we we just had a rally in a period of six weeks that’s equal to the entire price of gold was 30 40 years ago 50 60 80 100 years ago how long it was I started this business but you know yeah I think everything you just said and I think particularly the deficits and the debt which is not just us it’s Global and that makes this thing Global and that makes this inflation Global and that’s not to say stocks won’t rally they will because when you print money and devalue the currency the stock market goes up the best thing that happens for the US Stock Market is when the dollar depreciates it’s a direct correlation a higher dollar bad for stocks a lower dollar good for stocks it’s that simple and the problem with that is that the pace of growth in the stock market will not keep up with the debasement of the purchasing power your money and that’s the biggest problem that’s why investors have to change the narrative here on what they do and that’s a big issue going forward for a lot of people well also let me add to that so you’re right about the currency D basement generally good for stocks however on the other hand you also have the rise in the tenear US Treasury yield and you have a lot of consumer small business private sector credit is price off the 10 years treasury so if the 10 years treasury keeps rallying let’s say it goes to five I mean that’s going to cause a lot of problems for the consumer small business in the real economy no doubt and you’re right on and again this is a 40-year downtrend in interest rates and inflation that’s been reversed so you’re going to have higher lows here and I think you’ve seen them and you know right now I mean 493 is the key level on the tenure you get through there I would add by the way that the numbers out of Germany this morning were very uh encouraging as it were for spending in the economy and some you’re seeing some signs that you know some of these economies are wanting to shrug off these rates and all of a sudden the German BN Market is getting just whack the last two days and to me that’s a big deal because the thought process was the ECB would be you know ahead of the fed and now that’s starting to kind of shift away too and all of a sudden the Dax which has been Stellar performer is wobbling so you know yeah I think that generally speaking uh you know this all plays into the same kind of narrative that the Fed acestes to higher rates of inflation and that comes with it higher yields generally speaking and at some point that is going to cause a problem for the consumer absolutely and I think we’re probably closer to that point I would add that when you talk about the consumer you know watching the xly consumer discretionary ETF or the xrt the retail S&P retail ETF and some of the relationships between the consumer staples or between the stock market or between the bond market can be very interesting because it’s a leader you can’t have a really kind of strong growth narrative that is driving stocks higher unless the consumer is part of that and right now the consumer is underperforming the consumer is in fact breaking down on pretty much every metric relative to the stock market and we have seen this particular these particular relationships bottomed before the market did in 2009 it was a it was a pre-warning sign in 2007 it Peaks first it bottoms first it leads higher it leads lower and right now it is broken down and bidding to lead lower and if that’s the case then you’re going to have a consumer come under attack sooner rather than later and that’s not something people are priced for here in the broader Market indexes yeah and you brought up how savings have have drastically almost zero negative credit card debt spiking the other part of that is mortgage payments and now mortgage demand I think in the United States is at a 15-year low uh the average mortgage payment I think in a lot of cities and Metro areas for a lot of single family homes or town houses or condos I mean it’s over $6,000 a month a lot of people aren’t getting approved for a mortgage and if they do it would take up too much of their monthly discretionary income budgets yeah and then you have some issues too if you look at the latest new home sales I mean if you want to look at strictly the stock market impact of this the home builders have been on fire I mean it really have and when the individual shares have skyrocketed they hitting new highs and this is a function of we need more houses I mean we need more homes we have a housing shortage in this country and that’s a big part of it too so when you tie in the fact that you know on some measures the you know the mortgage rates back above seven you know you saw the weekly numbers have been really crappy for quite some time I mean these indexes the NBA index is the purchase index and especially the refi index the refi index is like a 30-year low uh you know how much rates would have to come down to allow most people to refinance their Loan in advantageous you know degree that’s really low compared to where you are now you need big declines that are not going to happen anytime soon and you have the whole you know affordability issue around homes but I find within this that the the number of homes for sale not yet started and the sales of homes not yet started both are the sales are way down the homes for sale that are not yet started are up significantly a multi-year high in fact and all of a sudden the home builder Shares are getting hit so and the the XR the xlre which is the retail uh ETF from the S&P 500 uh sectors also broke down last week and so you starting to see kind of round two of the issues here in housing and this could be really interesting too as as you’re saying you know to the affordability and the whole dynamic let alone that you’ve had stuff like lumber prices come way down and copper had come way down at one point now these things are starting to break out to the upside again so man I’ll tell you what this just it doesn’t bod well for the economy for final demand from households and consumers over the next 18 to 36 months and I think that’s an issue for the FED did you see the Wall Street Journal chart that they put out in the last 10 days with all these different central banks it looks like the game plan for a lot of these central banks is to potentially start cutting rates or at least let inflation run hot above the government bond yields yeah and that’s the way it’s been and I think that you know if you’re looking for places where that’s not the case it’s some of the Emerging Markets all right and we haven’t even talked about Emerging Markets because some of them had inflation that was really high a case like Brazil they raised rates to Draconian levels 11 12% say in the case of Brazil for example and inflation came way down and now you’re sitting on 800 900 a, basis points of real official policy rates so these central banks have been able to aggressively cut and in fact it rallied some of those currencies which kind of kept the emerging markets off the radar screen in the in the context of there are a lot of currencies that are getting just wasted that are at record lows I I made a list I think this was in the fourth quarter last year it was like 21 foreign currencies had made all-time record lows in 2023 and when you look at the case of stuff like Vietnam is that against the dollar what is what are the currencies low against yeah against the dollar yeah against the dollar i’ made record lows against the dollar and when you look at some of the currencies it’s interesting because a lot of them are linked to commodi producing countries Vietnam all right the dong when you talk about Angola and the K Quanza you talk about Nigeria and the naira then you start talking about turkey and Argentina and all the places that we know where these currencies have just gotten wasted and it’s a lot of them you say well look you talk take a place like Nigeria and Angola and they got 4 million barrels a day of oil output capacity and they’re producing about 700,000 barrels so it actually impacts the global markets in the sense that these currencies are gotten so wasted they can’t possibly fulfill their capacity to produce oil and that leaves a shortage and right now the shortage could be filled by those two countries alone if they were produced in their capacity but they’re not so you know these these are things that are worth watching and I think that this is interesting because it kind of leads you back to gold all of this conversation and I’m not a gold bug even though I started a Florida kise Exchange in the gold pit you know back in the 80s um and you know I’m I’m an everything guy and I want to watch everything and I want to trade anything and everything from either side I have no bias whatsoever uh you can’t in doing what I do as a CTA registered three you know commodity trading adviser runs managed accounts so in that context uh it kind of all comes back to Gold why because gold is rallying against every paper currency on the planet right now that’s The Sweet Spot that’s the Tipping Point that’s the change and that’s why gold has gotten so hot plus the fact that you know China is buying gold like crazy and has been for a while their their numbers are off the charts and that’s a whole another story I mean China man we could talk about China for three hours well the demand for Gold’s also from India Japan I think Japanese gold demand is the highest has been in decades do you think then the gold price in all these other currencies is sniffing out these Central Bankers that are going to let inflation run hot they may start cutting rates but it’s going to be what the game plan is is a yield curve control where they let inflation run above the bond yields for years yeah absolutely and that’s a bullish scenario for gold it really is and that’s the whole kind of macro picture of acques to higher inflation because you have no choice you can’t you can’t press too hard or you unleash a debt deflation because the debt is onerous again tipping points tipping points we’ve reached extremes when you look at just look at a chart of us public debt I mean it’s straight up and down now the line just goes straight up and parabolically now you have to print so much more money to get the same economic impact it’s just a simple mathematical fact uh so to me it’s just you know 40 Years of math have just changed in the other direction and this is a trend that probably lasts for the next two decades at least and uh it’s going to be vicious and people are going to have to do other things to kind of protect their money uh than just being passively long the stock market and the other country that has a debt problem and a lot of people have said on a percentage basis is even larger than the US unless you count the unfunded liabilities for the US immediately is Japan and I think we’re starting to see finally the currency weakness that a lot of people in the Widowmaker trade have been predicting for decades the Widowmaker trade yeah for decades I’ve heard the Japanese story for decades and finally now what’s interesting to me is the jgb is finally now really potentially breaking down here on a major long-term you know multi decade Trend basis too but I would throw in the fact that yeah it’s Japan and we know Japan and Japan will be a litmus test I think that the Yen has probably gotten a little too far and I think that Japan is a place where they could be raising rates and there’s a lot of inflation push there so you know Japan will be a test case I mean the boj you know kind of stays where they are and continues to insist on being easy because their policy is in fact stimulative uh that’s going to be really interesting and you see how much gold is up against the Japanese Yen it’s doubled like in the last since you know since like the 2020 low I mean you’re talking imagine the de basement of the purchasing power of the currency in a place like that or in a place like turkey or in a place like India you mentioned India gold priced in India is through the roof the Indian rupee is now like one of the most debased currencies out there on a short-term basis so you know when you look at these countries too there’s over 40 countries now that have a debt to GDP ratio exceeding 100% I remember when there was three it was Greece Libya and Japan now there’s over 40 41 42 43 something like that it’s over 40 so again it’s Global it’s a Japanese style thing that’s going global but in the case of Japan yeah it’s interesting and guess and guess through all this what do you see you see the Niki making like the is reaching the highest level since the 1990s all these things kind of track back so I think that Japan will have OPP unities from from the trading side like being short the jgbs okay so you’re saying then that it makes sense that with a weaker currency that the stock market would price head in and it would start to make nominal highs that’s what you’re saying 100% I mean the correlation in Japan’s even tighter than the US a lower Yen equals higher stock prices to some degree and certainly when you’re seeing what’s happening now with the fact that inflation is back in the mix that makes that correlation go back to how tight it was you know back in the 80s and 90s and I’ve had conversations with some Japanese investors over the years and they were into like American technology stocks and real estate and a lot of foreign investments foreign technology stocks they did not consider gold up until recently so it’s it’s like a new phenomenon there where the gold demand for Japan is finally starting to come back after Decades of where Japanese adults wouldn’t even consider it you see actually a lot of that I mean a lot of people have missed this gold move people got frustrated with gold at one point and I get a lot of questions about gold all the time just because of my background and it’s interesting because frankly gold and the dollar have diverged in a way that we’ve never seen before and on a gold adjusted value basis the dollar is at a 12year low right now so that tells you a lot about what gold is doing in dollar terms that has been mindblowing in the dissociation with the fact that the dollar is actually higher right now so I think that a lot of that frustration was like why isn’t gold taken off why isn’t gold taken off it’s not taken off because the dollar is not coming down all right on its own merits nominally speaking the dollar Index I think relative to the fact the dollar wasn’t breaking down gold was performing phenomenally and you were going to get this thing and I said this in beginning of year Gold’s gonna break out and people are going to end up chasing it because they feel like they don’t own enough and you are right in that situation right now well last year and that makes gold to buy on this dip too so well last year Greg I mean the gold price was range bound right in US dollars but in every other currency it was at or near an all-time high so people are like is the dollar gold price ever get to break out but like in the Fiat currencies the relative Fiat currencies the dollar was relatively strong relative to the other currencies but the gold price was reflecting currency debasement in the other currencies first yeah and you knew it was going to spread to the US I mean it was for me it was kind of an easy call I mean this was almost a slam dunk trade frankly it just required patience and the fact that it’s happening now imagine where Gold’s goingon to go when they finally have to play the dollar card I mean holy mackel I mean I I’ve never I’ve never said 3,000 gold I’ve always it’s to me it’s always been a mathematical type of thing and you look at it I mean 2650 was our Target for breakout in Gold above 2,000 I mean gosh you almost got there already imagine when the dollar breaks holy macro I mean you can’t you can’t write off anything anymore um and this applies even to crypto too frankly when you start to talk about this because you can you know create a scenario where in a lot of these places you talk about 40 countries that have debt to GDP above 100 you talk about all these currencies that are making new all-time lows against the dollar and all the fact that Gold’s rally and all these currencies well you can imagine a lot of these places where it’s tough to get to the bullion dealer it’s tough to store your gold it’s tough to hold gold right and you really don’t necessarily even want paper gold that’s maybe two steps away but when you start to talk about what can these people do got a phone got a digital wall they can all buy some crypto something like that so you know I’m I’m like I don’t I I’m not have a problem owning gold and Bitcoin I don’t see why people have to fight over this I don’t see why it has to be one of the other where everything’s binary now it’s ridiculous so I think there’s a case to be made for both and it’s kind of the same case yeah I agree i’ smart to have some diversification in this environment some gold some silver some Bitcoin actually the you didn’t bring it up but the Indian silver demand their Imports for silver just hit an all-time high to in the last month absolutely insane the number yeah because Gold’s now expensive so yeah this is the play in silver when it’s the Lesser expensive one that gets the retail investors come in and that could be the biggest pool of money at all I mean I remember when was uh uh you know when I was one of my friends I went to Kate University and a guy who I went to Kate with ended up working the running the bullion desk at presedential so he kind of got me an in and for a while I was the research provider for presential Securities for the metals right this was back in the late 90s and we used to I remember going into York they were on the uh on the east side of Manhattan the lower tip of Manhattan and we would sit around on the bulling desk there after work having a couple cocktails and we would just talk about just imagine if you get this percentage of money from the stock market comes into gold and blah so on and so forth you know all these you know Pine the sky thought process and now you’re there you know 30 years later here we are where it is that case where oh my gosh if you really see this thing where you don’t believe the stock market and passive investing in equities a paper asset here that is you know dominated to whatever extent by the economy and by policy and by debt and all these things maybe you just got to allocate some to gold and uh think that we really almost haven’t even seen that start yet frankly the statistics really don’t show it I mean ETFs you know the value of gold held in the ETFs is down people liquidated their ETFs people are not in gold to the degree that they were even you know three years ago so I think it’s pretty explosive and we’ve already seen the tip of the iceberg there yeah I agree and there’s also an underinvestment in commodities for a lot of metals on the supply side so it’s not like an oil and natural gas company that can drill a new well in say a couple months they could have new Supply line mines take many many years longer than that so we could be looking at supply shortages in the future for a lot of key Metals whether it’s copper for a lot of electrification artificial intelligence electric vehicles those types of things and then silver uh going forward as well absolutely I mean you’re already seeing it copper is the first one to kind of go here I mean inventories are historically low you’ve seen a big shift of the inventories that have gone to China and that’s not coming back into the market so now all of a sudden you know Western Warehouse inventories are low it’s the same in some of these other metals too uh you see all of a sudden aluminum is popped uh tin is always a leader and you know nickel even that getting crushed and the whole debacle with the lme which just destroyed their credibility as a as a medium of uh you know trading exchange uh you have a real situation with some of these metals and food commodities too you’ve already seen what happened in Cocoa we’re seeing it now starting coffee all right we haven’t talked about elino which is now already potentially flipping back to El ninia really quick and it does doesn’t usually happen that way these are weather phenomenon that are caused by Big Picture science that is happening on the grandest scale that is only going to intensify so when you start to talk about risk because if one of the things we’re test to do is risk assessment one of the biggest risk assessments is the actual environment and not from the context of green clean energy I’m talking natural disasters earthquakes these powerful storms we’re having yes the rising of sea levels all these things are linked to science that has nothing to do with human beings on this planet it’s really a fraudulent narrative to suggest that we are the cause of what’s Happening Here that’s about as egocentric as thinking the Earth is the center of the universe which is used to be a commonly held thought right so when you look at these things and you see the weather patterns and you saw the onino coming I mean we were all over this moov in Coco why because it’s right in the firing line of some of the worst weather that come from El Nino and you’re seeing this in terms of a lot of food commodities then you start to talk about Supply chains and stuff like this and Food Supplies you know the Commodities themselves and this is why I think that people not to be unhumble and I hate to be salesman I never do this but to the to the degree that people that do what I do that are commodity trading advisers that operate in the Futures Market I have access to all these Commodities every one of them click of the button I’m in all the bond markets all the currencies all the metals all the energies I can trade them all long or short and that is going to be a phenomenal Advantage going forward because you’re going to need to do these kinds of things to keep Pace with the debasement of the purchasing power of your money and one of those ways is going to be em to be involved in these Commodities like cocoa like coffee eventually soybeans all of these Commodities you said the metals energy will be back too I mean it’s kind of to me a longer term secular bull market that is ready to go into the next upwave in my opinion let alone the risk that extends from the Middle East that people are just incredibly complacent about all the risk whether it’s China the political situation here immigration a hot summer people don’t have air conditioning you could have social unrest you know through the roof here in the US this summer so all of these risk factors that we don’t really that that that I consider that I talk about that I take into account just seem the complacency around some of these things to me is really shortsighted and mind-blowing I actually wanted to ask you about agriculture and soft Kamai since you have covered that I’ve watched your videos and listened to your interviews for years and done an excellent job covering those with the higher prices of these soft Kamai agriculture do you think that the farmers are going to eventually have to order fertilizer and plantmore or we looking at like crop yield failures food shortages for years what what’s your view on this are farmers actually going to spend the money to buy the fertilizer and plant more crops and solve this problem well that’s a great question and I think it’s the latter uh answer because you know you could talk about in the US all you want but the US really doesn’t produce cocoa or much coffee you know we don’t grow that kind of thing certainly you know the US is huge I mean I’m not trying to minimize the US role in all this my point is when you talk about the affordability of maintaining your crop that is already part of the problem why let’s take Coco for example all right Ghana right their currency the CTI has gotten annihilated so they can’t afford to buy fertilizer they can’t afford to to maintain the crop and the you know and the trees and all the things that are involved in growing some of these crops the fields whatever it might be with each individual crop so yeah I think it is shortages I think it is more intense weather that causes shortages and then you throw in the fact that these currencies have gotten crushed you know decreased the ab the ability of farmers around the world to maintain their fields and their crops on a longer term secular basis is huge and I think the weather then plays into that as something that is absolutely more volatile and going to be in the extremes it’s not that it’s you know hotter on record it’s also colder on record there’s record everything it’s polarized it’s both it’s not one of the other it’s all of them and uh from that perspective I think it is the lad you will be facing shortages you will be facing issues around a lot of these agricultural Commodities that are not at all linked to monetary policy that have much more to do with currencies the things you said and then the weather yeah because we have a huge Divergence I don’t know if you’ve seen this between DBA the agriculture Commodities ETF that has like the Futures contracts in there for like corn and wheat and soybeans some of the other uh soft commodity Futures contracts versus the commodity um the agricultural commodity producers companies like John Deere and uh caterpillar and the other um some of the crop Growers like Bungie and some of the other food manufacturers which is I think moo so there’s an enormous Divergence between the DBA the agriculture ETF and the kamise producers ETF you know Jason that’s a great point and I think that goes right to the heart of what I’m talking about because being passively invested in no stocks what’s that got you not not you’re not keeping Pace all right what what keeps pace is being in the underlying Commodities and that is not something that most people do it’s a lot a lot of people don’t know how to do it I mean Futures markets are tough man because it takes capital I mean most people you can’t come into the Futures Market with 50 Grand I think you’re going to be successful not these days these contracts now say like gold I mean you know the contract is 100 ounces this is a a quarter of a million dollar contract you buy one gold contract you want a quarter million dollars of gold you want to try and do that with $50,000 I you could be wiped out so fast it’s not even funny you know so the risk reward is there you could definitely make a lot of money there’s no doubt I mean you’ve seen people take 10,000 and make it into a million the risk of Ruin is very high in that kind of situation and I think the biggest mistake that Commodities Futures traders that are kind of on the retail level make is being under under capitalized and not understanding the math we did a boot camp on the Futures markets back in 2018 or 19 it was pretty successful got a lot of attendance and it was just a lot of it was teaching people the math around how to manage the risk and this kind of thing so I think again it kind of gets back to not to be self-serving but you know anyone that does what I do not just me there’s a lot of good you know ctas out there a lot of people with a lot of experience uh are going to be more valuable in the future because people are going to really if they really want to keep pace these are the things you’re going to have to take into consideration and take take some higher risk to try and keep Pace because it you know it doesn’t come without risk it’s risky there’s no doubt I can’t say that there’s you know there’s no risk in this there’s always risk but you know I’ve been doing this a long time we manage the risk very well we’re low-risk Traders but uh it you know I think this is something people need to be more involved in so for Commodities risk reward right now uh Platinum Group medal so platinum and plaum I mean normally the Platinum to Gold r show Platinum is normally above gold at least historically now it’s way below the gold price do you think that we’re going to see some type of rally here or do you think that that platinum and plaum prices they’re kind of cheap and hated right now are we going to stay lower than gold for a long time oh man you hit a sore point of me I keep thinking platinum’s going to you know kind of be a buy here at some point when it’s $1,300 discount to Gold All right but there’s a reason it’s a $1,300 discount to Gold Platinum is kind of in a supply side Surplus situation to whatever degree sometimes there moves into a very minor deficit on a rolling 12-month basis it just doesn’t seem to be there I mean I’ve actually kind of given up on watching Platinum which almost means it’s about to happen so I don’t know but I don’t know I do know this if you get above say 11 really kind of 1050 in the forward Platinum contract I’ll be a buyer I will participate if this thing’s going to be real but I’m going to let it prove itself to me I don’t you know I I’m not one that’s necessarily gonna say look I got to buy it when it’s at its cheapest you know they say Buy Low sell High I like one of the old other cliches which is buy high sell higher right in some cases like Platinum I want the market to prove itself to me I want it to break out first and then I will buy it and even though the risk might be a little higher then and maybe I can’t buy quite as much as I could have if I had you know taken a bigger Risk by buying it lower it’s just I want in a case like Platinum it’s been a it’s been a non-starter it’s had several false breakouts uh I do believe there’s value there at some point but I think that that that particular sector along with some other places may actually need the FED to act more than just talk about acting or be perceived to be about to act so I isn’t isn’t there developing sorry to interrupt you isn’t there developing uh supply side problems for platinum because a lot of the supplies either from Russia Zimbabwe South Africa and didn’t the London Metals exchange just put some restrictions I don’t think they’re going to buy any metal from Russia so I don’t know where they’re going to get the Platinum Supply from well you saw a big jump in some of the base medals on that and platinum didn’t get much play um I would say South Africa is definitely a place if you start to see specifically with electricity in South Africa is always seems to be kind of an issue that could be potentially a risk factor for platinum so but again hey if platinum’s going to be real it’s got to get through 1050 if it gets through 1050 I’ll be interested until then I’m not interested yeah what what I’ve heard from people who are saying that the reason it hasn’t done anything a lot lot of people are worried that there’s not going to be the demand because of electric vehicles but I think the electric vehicle companies are in the process of going bankrupt and then you have the the companies that make the hybrid cars like Toyota and you still need catalytic converters so if the car market changes I mean there’s still going to be platinum and plaum demand for cataly converters from hybrids and not electric vehicles well it’s one of the reasons I’ve actually been watching Palladium as potentially the one you want to buy because pum is now is at a very you know favorable spread to platinum as well so it’s at a favor will spread to Silver for example Palladium padium is cheap relatively speaking and yes it has those properties where if you were to see some kind of shift like that Palladium could come into Quick demand I remember back in the 80s when he started talking about cold fusion and Palladium went from being $150 an ounce to, 15500 I mean it was wild I mean that was one of the most amazing moves I had ever seen early in my career in the 80s so yeah I I I would probably preferred to keep an eye on Palladium uh even in Platinum the problem with Palladium it’s a thinner Market tougher to trade trade a little more slippage you know kind of the things you got to consider too are the depths of some of these markets you know like I’d love to be more active in some of the markets like Lumber or rubber or Palladium but you know you have to see the volume come into those markets before you can become too involved so there are some other issues behind just you know okay we’re bullish on that but then executing that certainly in the underlying Commodities there are some limitations in some of these places yeah there’s also not a lot of options for retail investors they could try to buy the mining companies but the mining companies for and plating miners in South Africa a lot of them are close to bankruptcy because they have higher electricity prices and higher costs and in lower Metals prices so their profit margins are being destroyed right now yeah and they are but I’ll tell you what if if platinum’s going to rally and that might give them some Vig you know then you’re talking these are pretty low prices for some of those you know when you talk about Impala or some of the stocks you’re talking about in South Africa man they have been decimated all right even like uh what is the Still Water the old Still Water here in the US um when you talk about these stocks have just gotten crushed these could be stocks that you buy and look at them uh as like an option on Platinum and padium and it’s like it’s a you buy the stock you know in the case of the old still water I think it’s around $5 you know a share last I look four or5 dollar somewhere 450 and if that’s the case well hey you’re buying a call option right that has no time Decay that has you know no real strike price other than the money you bought you here’s your premium but it’s not going to be subject to time Decay and there’s no time line value on when your option expires so I think that you know you could look at some of these things we had some some thoughts on that in the silver mining shares very similar back in 2020 and uh you know that you know still kind of looking to work out and some of those have worked out very well actually in silver that have performed quite well and one of them even got taken over at a much higher price so sometimes you got to look at some of those things in a little bit of a different way I hear what you’re saying and I totally agree with you on the other hand I think those those some of those you know p g m stocks particularly those in South Africa have gotten so whacked that you could buy them as a call option at this point in time and just put it in your back pocket and be willing to risk every dime you put into it like you would an option I think actually there’s a large mining companies that are looking at that so you’re right if the cycle does turn there’s hundreds of percent upside there for the mining shares I think BHP buletin was looking at anglo-american who has a large amount of platinum empl mines uh recently there’s rumors of a takeover now yeah and and I’ll tell you what that is another big story the mining shares across the precious metals as well so this has always been one of those things where you see even like a Newmont and a Barrack have really underperformed and part of this is some of the debt they took on to buy more properties and when you start to talk about even having gold in the ground that is not even yet being mined that is owned by somebody’s like a numont that took over a company that did you know owned this property was never going to be able to take that gold out of the ground well then you start to see those stocks start to play catchup because that is value there at some point where the gold in the ground becomes more valuable too even before it’s mined to whatever extent so uh that plays with some of the potential merger and acquisition dynamics that you could see coming in the precious metals mining shares well actually I think for risk and reward a lot of these gold stocks gold royalty gold miners are some of the best right now because the gold miners are not pricing in 2,300 gold yet because uh the Q2 earnings numbers are when we’re going to actually see the 2300 gold that we’ve been talking about for the last 20 or 30 minutes we’re going to actually see that hit what with the profit margins in the free cash flow yeah and you see here with this decline in Gold you know the GDX and even the S have held up pretty well I mean they’re kind of closer to their breakout highs whereas the metals now are you know significantly off their breakout highs more recent breakouts not the original breakouts but uh there does seem to be a little shift of interest just even this week and within the context of what you just said that’s a that’s a good observation well new Mount mining popped 133% today I think that’s because of they’re the only uh goal Miner in the S&P 500 so you have these generalist fund managers as you said earlier in the interview they’re starting to put okay we need one% allocation to gold and gold mining okay we’re just going to buy Newmont since they’re in the S&P 500 yeah we said last week newmont’s poised to pop it’s poised to catch up and there you go it’s exactly why that’s exactly what we’re talking about I I want to ask you about uranium because the uranium price lasts 12 to 18 months I mean it there’s been a clear breakout there’s fundamental reasons a lot of the policy makers in the US European Union United Kingdom they’re starting to talk talk about approving nuclear power plants again investing in them do you think that we’re in a nuclear power and uranium bull market now absolutely when you look at the projects that are planned the projects that are already underway I mean it’s a lot you’re talking about 300 one of the reports I read about three months ago was talking 300 projects planned globally you know France was the most recent one to kind of acquest to more I mean yeah uranium is a bull market and you want to talk about something that is you know linked back to Russia I me Russia is the largest refiner you know the enricher of uranium out there we get a lot of our uranium in the US from Canada too but the degree to which Kazakhstan and Russia are key to these markets is also a wild card factor that I think makes this a potentially very explosive situation you kind of had your first wave higher I think it takes a more of a degree of understanding about you say nuke and people just want nothing to do with it right away and I think when they get a better understanding of how this is the wave of the future whether you like it or not whether it’s safe or not it doesn’t matter in the sense that this is the way we’re going because it is the least expensive most efficient alternative energy to petroleum it’s that simple so yeah I think it’s hugely bullish and I think that it is still kind of you know hit with this connotation that is not so positive that is holding it back I think that you have some issue with getting some of these approvals actually pushed through there’s still know a lot of resistance to this but at the end of the day going forward the supply demand fundamentals in uranium are pretty wildly bullish and I agree it’s the cheap it’s the most efficient cheapest form of Base load electricity by far by far by far beyond solar and wind and I mean it’s just really kind of insane and uh so yeah well I I think what people are learning the hard way since the pandemic started in 2020 is that if you support solar and wind like the um ESG crowd your electricity bill could go up a ,000 dollar a month so that’s a big no no I mean if you’re a small business owner that’s potentially you’re in a lot of trouble well these people that have these ideals and that they’re so you know I mean it’s I almost feel like people want to be in Conflict these days and I think that’s part of the science too by the way it has to do with brain chemistry and some of the polarization that’s actually taking place inside of people you see it you see that human beings are acting in increasingly volatile ways that has a lot to do with the vibrations of the human heart versus the vibrations across to the planet we’re out of touch we’re out of sync you know all of this has kind of gotten misaligned recently with some of the the increases in the frequencies we’re under attack from all this light in the place we are in the Moki way right now and it’s affecting the energy on the planet so you know when you talk about these things like the you know the green clean movement I mean you get people that just want something to protest and they want to get out there and they want to you know be enraged and be you know confrontational and oh my God and you’re bad and this is bad and oh my God and it’s like they believe everything they hear in a 5-second you know dieet tribe they might hear something and they’re going to believe it 100% they’re going to you know they’re going to die with this belief 100% all in and it just kind of blows my mind that people are so willing to be not be more educated not do research who reads anymore who reads science journals I mean besides me I mean I’m Saturday morning I’m all over science journals all the time I’m all over medical I always want to know more I’m always reading the sources of research and experiments and the things they’re finding out so it’s all a big science thing to me but a lot of people here something they want to pick up a cause they go to bat for and they really don’t even know what they’re talking about and so to me this is a bigger problem going forward when you have such a short attention span everyone sees what they see on social media that’s their source of information they’re going to believe what they say the powers that be believe if they say something it must be true right I mean it’s like hey okay let’s say this and if we say it we can make it true and it just kind of blows my mind with the degree of excuse my excuse the way I say this but the degree of ignorance out there about so many of these topics that uh you know are going to lead to acquiescing to a higher level of General inflation well I think the problem that a lot of politicians and a lot of people that are saying that they’re in favor of solar and wind don’t solar and wind don’t understand is you can’t have all these Technologies data centers electric vehicles artificial intelligence which requires all these data centers not just like a software program on your phone with chat GPT you have to have all these data centers and electricity usage Mark Zuckerberg just did a podcast talking about this talking about that they don’t have enough cheap electricity so you need the copper you need the cheap electricity you need stable basad power for all these new technologies new techn uh companies Investments for electric vehicles and we don’t have that they did not make the efficient infrastructure investments into these things this the way to do it rush out try and change everything but you know as we spoke we’ve spoken about offline I mean what people what I don’t think people really fully understand and in my mind you know there’s really not evidence to support this other than anecdotal evidence what’s right in front of you and that this whole movement has nothing to do about like changing the climate you can’t change the climate Okay that’s ludicrous concept to begin with okay you know the degree to which we have an influence on this is so minimal compared to the bigger picture science it’s not even funny but the extent to which uh you know this is all about not changing the environment it’s about an engine of global growth something we can create more debt to spend money on to support the economy to create jobs because you always need an engine of global growth we can go back to the to the 80s and we saw it was like the Asian tigers at one point then technology through the 90s with the internet and price Discovery and then you created this huge you know 20-year trend of disinflation to deflation and the price Discovery Dynamic which is kind of gone away as well now too where people are now more concerned about securing Supply than securing the lowest price I think that was a big shift that came out of the pandemic that was secular that a lot of people people don’t talk about psychologically and so this is more about we need an engine of global growth particularly in Europe and places where they have this high debt too the US of course is involved where they need the growth or a debt deflation becomes a higher risk and that this is all smokescreen to borrow more money and spend it on these things to try and you know stimulate the economies I think this is much more about economic growth and the need for some engine of economic growth than it is about changing the planet because I think the official understands you’re not going to change the planet you’re not going to change the climate this is a solar SL Milky Way Dynamic that is only going to intensify for the next several hundred years so to think that we’re going to have an impact on changing that in the next 30 Years is ludicrous and there’s also not a country like a China where we can Outsource all of our Factory manufacturing and reduce uh labor costs and Manufacturing cost by 70 80 90% yeah that’s right You’ve Lost That as well you’re you’re right on so again what does that mean it means it means wages higher acquiescing to higher rates of General inflation you don’t have that labor depressing Dynamic out of China you know in terms of wages so and then I I think we’re back to a lot of policy mistakes from the 1920s in 1930s post World War II uh with a financial repression yield curve control in the 1970s stagflation because you’re starting to see politicians talk about they want to protect protect jobs in their domestic economy with tariffs and raise wages there they don’t want uh foreign people buying as many foreign Goods you’re talking about currency Wars Global Currency debasement kind of a lot of similar mistakes from past Financial history stagflation is the is the wave of the future it really is I think that’s the going to be the next big Trend uh and that’s going to be something that the fed’s going to have to deal with and that I mean you know not to be a broken record but it comes back to the same thing acquiescing to higher rates of inflation to make sure that the growth doesn’t collapse and that that doesn’t drive us into a debt deflation because that’s the worst case scenario right now and Central Bankers will go to any lengths to avoid that from happening and that means printing more money and it’s the same story the basement of the purchasing power of paper currencies but you’re think they’re trying to manage that though right so they’re trying to keep inflation kind of in a Range so most people don’t notice the real inflation rate is what above the bond yields on the government debts and then the the DC the US Treasury the Federal Reserve Bank they don’t really want a strong dollar or do you think they’re trying to like manage the Dollar on the exchange rate yeah I think they’re trying to manage it I think that they understand that a strong dollar becomes a problem in a variety of ways um you know first of all the impact on Emerging Markets which we’re already seeing um so I for one watching the EM you know if you want to talk about stock market and what the impact could be on the stock market uh you can take a clue from the eem which is the Emerging Market ETF which is not at all kept pace with any of this rally in the developed Nations right especially the US and there’s levels there where if you start to break down that could be really serious the CW is the Emerging Market currency ETF keeping an eye on that too where it is now it’s a looks like it’s a toppy about to break down here too so I think there are big risks to allowing the dollar to go higher but I think that I really can’t shake the feeling that the FED would like to see as kind of the last draw all right to their policy objective some disinflation inequities I mean how are you supposed to see the FED shift to cutting rates when the stock markets at record highs and Gold’s above $2,000 an ounce where’s the motivation for the FED to cut rates in that scenario why because the labor market might roll over or because people are upset I mean it’s like kind of what are you talking about I mean so I think that for this to be real for the fed and this is where it’s the most dangerous game trying to let you know tweak it to let a little bit of air out of the bubble without the bubble deflating is such a dangerous game uh but I think that’s kind of where we’re at right now I can’t shake that feeling every time I I hear the FED talk I look at what the markets are doing and I just feel like this isn’t over for the FED where they feel victory that where they can feel they can claim victory over inflation until they see some disinflation in asset prices well I think we’re we’re the FED is trapped again through policy mistakes with DC spending and then also uh the Federal Reserve Bank policy itself the green spend Fed was promoting the wealth effect and then uh correspondingly the tax receipts became more and more dependent here in DC on home price and stock market capital gains taxes so over the last like three decades I think it’s now relying I think 30% of the annual tax receipts are from home sales and Stock Market trading capital gains taxes whereas like a couple decades ago was only around 10% so now you’re in a situation here where if asset prices fall for a prolong period of time especially home prices and stocks where the the government tax receipts start to collapse and that’s true I think that they would probably look at it like look if asset prices did fall then the FED could unload and that would bring them right back up so you know yes I agree with all that but I think the issue is more around kind of being able to declare Victory and then being able to unload and get the stock market back up so I see like some kind of I wouldn’t say a crash I don’t think the market is going to crash but I could see some kind of sharp correction where you get a li battle liquidation let’s not either even forget the fact that a lot of the moves here in these markets you know you want to talk about AI I mean it’s all well and good for some of these chip makers and everything but you know you need this to be applicable to Consumer products that are going to create profits for companies selling this stuff you’re so far away from that that this AI is great in the short term and I get it but at the same time when you look at something like Nvidia versus even just versus the NASDAQ it’s a straight line to the upside so this has had an impact but a limited one now where now you see even the xlk the infotech ETF is breaking down it’s breaking down on its own it’s breaking down on a relative basis so when you kind of apply all this back to the stock market I could see a you know kind of a fast and furious corrective move that you know allows the FED to kind of you know declare Victory they cut rates everything comes back and you know then the stock market starts to Rally again but doesn’t keep Pace with the inflationary push in a lot of these underlying Commodities yep and then the FED probably has to start buying uh commercial real estate office buildings mortgage back Securities uh you know some they might even have to buy Municipal debt if the states get funding crises I mean the FED will just the rules at this point post 2008 with the bank the the types of bailouts and the rules changes they’ve done nothing would surprise me at this point another whole level of complacency we talk about all the complacency whether it’s the Middle East whether it’s the political situation I mean you know the the the commercial real estate thing was a big deal we talked about this towards the middle of last year understanding what was coming and you know it’s been Shrugged off already it’s been Shrugged off already you know so I you know watching the banking statistics too I mean I still think there’s a lot of banks that have issues I mean the banks have underperformed the Community Banks are breaking down again a second time here now uh and on a relative basis and on a on a on you know the qaba which is the ETF for those to a lot of the individual names that came up in the C uh you know when you’re talking about office space or you talk about you know multif family buildings I mean all of it so again here’s another level of complacency with something that’s been swept under the rug that is almost forgotten about that it’s still a very real risk that the FED will have to deal with at some point yeah I agree I mean they’ve been they’ve been doing a bunch of like kind of extended pretend games for a lot of the commercial real estate loans for the last 12 to 18 months but the regional Banks Greg their their loan books are a Minefield a lot of these uh Regional Banks hold an enormous amount of older bonds and then they have like tons of Consumer Debt that’s bad on like auto loans credit card debt small business loans commercial real estate I mean I I would want to touch these things a couple years from now which is why they’re saying they’re going to be tightening standards on auto loans and credit cards for the next year so I mean you want to talk about back to the stronger consumer too it affects the consumer in the back end of all of that because you’re 100% right this is the small Banks and the banks that have less than 10 billion in assets hold onethird 35% of the commercial real estate debt out there I mean that’s crazy and when you start to look at those Banks they’re breaking again right now so yeah I think that’s a real near-term thing that could extrapolate like you say out towards the consumer as well and how the fed’s going to deal with that and let’s not even you know forget hey QE buying treasury bonds probably back in play at some point in time you know it’s going to be it has to be they have too much debt to sell it’s just insane when you talk about the interest cost when you talk about borrowing from the public when you talk the means of financing is borrowing from the public I mean it’s kind of nutty and I think that QE is almost inevitable again and that goes right back to everything we’ve been saying throughout this interview Q I view QE is just oldfashioned debt monetization and bailout so I mean they called it another name I don’t know if they’ll call it quanti ative easing going forward but it’s from Financial history it’s just debt monetization well you know Jason what’s funny about this is I wrote this in the book in 2006 I said the FED will print you know money and I talked about monetary Armageddon which is you reached the point where there’s so much debt and there’s so much risk from a debt deflation that you have monetary Armageddon which is the Fed uh uh governor and the treasury secretary are in the monetary bunker they have the keys they’re putting them in to turn it to turn the nukes and they basically print enough money to buy treasury bond ever printed all right that’s where we’re going ultimately that is kind of a scenario that is not so outrageous and when I wrote the book on gold in 2006 and I said the FED we’re in a commerci we’re we’re facing a real estate thing that’s going to affect the consumer in a really negative way that’s going to cause the FED to buy bonds and start monetizing govern monetizing government debt and I did a book tour and I was on squawkbox on CNBC and I was interviewed with Joe kernin and actually Mark Haynes at the time and you know they asked me about that that I written that in the book and you know I talked about and I said you know gold was trading around $400 at the time I said this would be big for gold I’m not a gold book but understand the FED will have to work the dollar down they will buy treasury bonds and print more money and gold will Skyrocket and I did finish the interview and I walked off and they go to the Green Room to grab my stuff and they have a TV in the green room and Joe kerin was calling me a nut job on National Television right and I just I I couldn’t believe it I’m like he’s like all these nut jobs think the FED will never buy bonds and that’s just out outrageous to think BL and so it happens you know in8 2009 and what’s interesting I was back for an interview in 2010 all right and this the story I tell sometimes and I’m in the bathroom literally at the urinal and who walks in Joe kernin and he’s standing next to me well I’m 610 I weigh almost 300 pounds he used to be a basketball player and you know I rarely use my size I’m very I’m a gentle giant right and but in this case like this guy called me a nut job a national television and all I remember is like leaning over a little bit like standing at the there only two y she’s right next to me and just trying to make him feel small you know and what was funny about it is I looked at him I goes you don’t remember me do you Joe and he looks at me he goes no I you call me a nut job on TV in 2007 and he just looked at me with this blank look of fear on his face and I swear to God I am not kidding I not exaggerating I’m not you know embellishing by the time we left the men’s he was inviting me to play off at his freaking Country Club so you know don’t the point of the story is don’t ever think something is not possible in this day and age let alone back then especially now they will do whatever they have to do to avoid a debt deflation and in this case it gets back to everything we’ve been saying for the last hour all right acquiescing to higher levels of General inflation and further debasing the purchasing power of paper currencies not in just in the US but everywhere on the planet and I call it stagl tax SL but there’s like rules changes and bailouts I mean let me add to your points there we know this cuz Jeff gunlock discloses he hired someone from the Federal Reserve Bank uh to add to his bond fund team recently from double line and he was telling a story about this at a Grant’s conference on an interview on a speech he gave us on YouTube and he said that the person at the FED they were discussing in 2020 Like rules changes about not only buying Municipal Bond debt and corporate bonds and then they said we have to get our lawyers and the lobbyists to get the rules changed first and they’re like oh no problem we’ll just get the rules changed so then we could buy all the corporate debt and the municipal bonds so this is like the mentality of the people in power the unelected bureaucrats the Board of Governors at the FED but it’s the same attitude for most of the people in Washington DC now well it’s almost the offshoot of the mmt This Modern monetary Theory or whatever it was that you know you could just it really didn’t cause any you know there was no negatives to doing this kind of thing right and it’s like well okay but because we haven’t had inflation in 20 years doesn’t mean we can’t now especially when you talk about the sheer numbers the levels the parabolic nature of the math it’s just Tipping Point stuff it really is but that is really interesting to me and I talk about this all the time too when you talk about the Municipal debt when you talk about the state’s debt uh you know I mean come on I mean it’s also out of control uh and again another level of complacency but if that is the solution to buy the debt and monetize it what does that mean you probably should own to keep paced with that kind of dynamic means you need to own Commodities and hard assets yep you need inflation Hedges so you need inflation Hedges you don’t want to be holding the currency for a long period of time you want to go find assets that will have a chance to keep Pace or out or beat inflation you know what it comes down to what you just mentioned Grant James Grant the great James Grant one of the best in the business he’s a instant first first ballot Hall of Famer in our industry I used to write for his website in fact I know Jim quite well he’s brilliant you know and it’s like he’s been saying this stuff for a long time and people didn’t listen until it started happening and then you got to listen uh and in that case it kind of comes down to what he used to have was the Pyramid of assets and it just comes down to one simple saying that I use now in the newsletter quite a lot just even recently stuff over paper it’s it’s almost that simple right now and I think that that’s a real kind of rallying cry for investment uh going forward in the future yeah even even China I don’t know if you’ve seen the numbers but China’s been importing copper stockpiling it at a insanely High Pace in just the last couple months and are like wondering like why are they stockpiling this much copper and I was like well if they have trade surpluses they might want to just rather build a new warehouse and stuff it full of copper which won’t go to zero then buy more us treasuries absolutely I mean Diversified out of the dollar they are hoarding Commodities they own 54% of the world’s wheat that’s above ground and don’t know how long wheat necessarily lasts in in how you can control that but the degree to which they are hoarding Commodities and they are liquidating I mean China is doing the Jim Grant play buying stuff and selling paper I mean that’s the play and guess what I mean I’ve been doing this a long time I remember when I first started a floor the the phone that was kind of connected to China wasn’t really that important it was really the OPEC phone the London phone we even had the ARB with Chicago in the silver market I mean that’s how Antiquated it was when I started but the Chinese phone probably now is the most important phone and what I did learn over time is that the Chinese have always been very astute Traders I mean you could say I mean I don’t know much you know about G I mean here’s a lot of history with G he’s a maist he’s a manifest destiny Guy this is why Vietnam is in play the Philippines are in play Korea is in play you want to see a currency that’s gotten wasted lately it’s the Korean wand all of a sudden under the guise of this whole thing going on in Gaza with Israel you know X is sending one of his top guys to meet with the leader of North Korea and they sign a strategic alignment PCT I mean Hello do we know where Korea is South Korea I mean it’s right across the straight you want Ships coming into Shanghai and stuff you got to go right past Korea you got to go right past Taiwan you got to go right through the Philippines right past Vietnam all these places are at risk so when you talk about China I would say and I take no pleasure in saying this us all the way right now China is outplaying us every step of the way so of course they’re hoarding these Commodities they’ve been brilliant Traders for for history right Traders going all the way back to the silk trade for for example so the context of them buying Commodities hoarding them on the you know when and you see it too when Commodities come down that’s when the Chinese are there and that’s when the big import numbers start to show up so this applies to a lot of these Commodities and they’re really playing they’re they’re out playing us they’re playing Above the Rim and they’re out playing us right now it’s good basketball analogy there yeah they’re getting a lot of Second Chance rebounds they were buying a lot they were buying a lot of gold and silver months ago when no one else is buying it everyone’s like why are they buying gold and silver huge huge ounts I actually did a special report on that any of your listeners want to get it they can feel free to email me but yeah this was a major report breaking down all the statistics China has been the primary buyer of gold over the last 12 months by far it has not been us it has not been retail it has not been ETFs it’s not even been coins the coin demand you has been down significantly you know just over the most recent you know rally in prices has affected demand in the US from in the coin market so yeah the statistics are pretty clear China has been accumulating gold along with copper like you say and a lot of these Commodities all the way down to the some of the some of the important food commodities well Greg you are truly a wealth of information I definitely want to have you back on in a couple months I want to thank you so much for your time today if my listeners want to follow your work take a look at your newsletter how did they do so you know the best way is to just get some samples is to uh just shoot me an email sales at Welden online wld online one word Welden online.com uh and I’ll shoot you out some uh uh some samples of of uh of the research that we provide and of course we also manage money for credit investors uh we’re a high minimum because these markets require High minimum not because we want a lot of money under management but because for me to apply you know I mean I worked with lwis bacon one of the greatest hedphone managers one of the greatest traders in the world up there with tutor Jones they’re like distant cousins or something the whole there’s a whole family dynamic between the bacons and the Joneses that goes way back it also ties into some of the other large head funds like tiger right they all kind of know each other to whatever extent and they come from the same place but the extent to which really risk you know risk reward math and really applying very stringent risk controls commod you can trade Commodities without taking ridiculous amounts of risk it just takes Capital to allow the math to work to where I can apply my risk me regiment to allow me to take the losses that I need to take to be involved in the wins that I need to be involved in and our goal is to to you know outperform you know pretty much everything out there it’s still some degree of looking for higher returns while taking a little more risk than maybe you might see in some of the you know Equity Market or some of the you know the big houses and some of the you know programs they want to sell you and all the Dynamics around trying to you know increase their money under management uh it’s important for us that we are capitalized enough to be able to handle the risk and the swings here uh to be able to succeed in helping people keep Pace with the debasement of the purchasing power of their paper money it is that simple and that’s what we do here and we’ve done it quite successfully over time and uh although of course I must say past performance does not guarantee future results and in this day and age you can’t guarantee anything yeah exactly there’s tons of rules changes I mean oil Futures contracts went briefly negative who would have who would have seen that that was C Ser seriously I I mean at this at this point with the oil Futures going negative I mean I would be shocked to see gold prices at $3,000 in the next 12 months there could be a lot of stuff happening I mean there’s rumors of a a plaza Accord if the Emerging Market currencies continue to get weak against the dollar there’s been some rumors around floating around that too which would uh you know be good for Commodities price especially gold if there was a one-time dollar devaluation you know I think Jason to be honest with you I think I started that rumor I really do because I’ve been talking about that recently in the past maybe four five six weeks I’ve been I’ve been sharing my experience in the plaza cord I was active in 1985 when the plaza cord was struck I remember vividly that day waking up in my apartment going to the train station and all the world’s a buzz you didn’t have the accessibility and information back then that you have now you had a what they called the quot Trex machine which was like this giant headheld thing that you could punch in and get numbers and see markets and get some news headlines and I’ll never forget there was Buzz on the New Jersey Transit to the PATH train to the to the to the Trade Center that day about the Plaza Accord and what it meant and it was one of the wildest days ever uh I was on the Florida kamise exchange on that day and uh so I’ve started talking about that recently so it’s so funny to me that you just brought that up because I have heard no one else talk about that until just now outside of myself for the last four or five weeks well try to be ahead of the curve I mean I was warning about the Chinese demand spike in gold and silver months ago and people were like well it’s not going to affect the dollar I was like well if they’re going to take delivery and clean like the custodians of the dld and the SLV are going to get cleaned out it’s going to happen eventually the price is going to move they’re going to play the dollar card I mean it’ll come a time this is when everything changes and you know when they say look you know we’re the biggest importer over $300 billion dollar of of stuff every month we the biggest exporter over $300 billion doar of stuff every month by a three to2 margin over the US when they say we’re only going to accept Rim NIMBY for exports and pay Rim nimi for imports the dollar is done and that is a day that is going to come I don’t know how long that’s going to take I don’t know how we get there but it’s a trend towards that and that will be a day of reckoning if you want to use another great in our industry Bill boner I mean the Day of Reckoning that is what comes when China plays the dollar card and they hold the weapons here you want to say it’s like this is already a resource and financial resource War that’s going on and you want to think that the US holds the best weapons here we don’t China does all right we’re the ones with all the debt China’s the ones that really doesn’t care about the stock market as long as their people are employed They Don’t Really Care as much about the economy it’s a manifest destiny Dynamic and in that case when they want to move on Taiwan they hold the dollar card over the US you don’t let us get away with this we play the dollar card and you’re in depression in the US it’s a really fine line right now and there are so there’s so much risk out there that I don’t think that people fully are cognizant of or aware of or even you know understand how devastating it could be that’s the biggest one in my mind right there I’ve been saying this for a while there’s a lot of complications around that thought process but that doesn’t mean it can’t happen well also the people in DC they don’t understand things and they do dumb policy mistakes all the time look they weaponized the dollar and froze what 300 billion of Russia’s Reserve assets and they thought oh we got Russia we’re going to get Putin we’re going to get Russia well the other non G7 countries the central banks decided Well what happens if we piss DC off now we’re going to start buying more gold tonage each month so it backfired it was like a Looney Tunes yosim Sam they just straight up shot themselves in the foot the policy mistakes were that bad it’s exactly why the Chinese been buying gold so look at what they just did to Russia why we’re not going to let them do that to us it’s 100% right well um unfortunately I I’m here in the DC Metro area with a lot of people are two or three degrees and they think their Geniuses but they’re real real world world track record Greg are not as good as you trading Commodities Futures their real world track record is full of blunders but some way somehow they managed to keep growing their net worth like Jenny Ellen yeah that’s not I’m not even going to go there or or Ben binki getting like $20 million for Consulting work from a hedge fund hey I’m just glad that I love what I do otherwise I wouldn’t be able to work these 16 17 hour days with the passion that I do and it’s sometimes you know at this point in my career it’s not even so much more about you know oh we need more clients we need more money under management need more money more more more more more it really is now must become a mission to try and help people to more you know uh to to try at least try and even to playing field number one and then at least try to keep Pace with what governments are doing to the to the purchasing power currencies I mean it really is you know it’s pretty it’s pretty disgusting when you really look at it from the from the top town
Jason Burack of Wall St for Main St interviewed first time guest, long time professional trader, trading book author, former hedge fund manager and CEO of Weldon Financial http://www.weldononline.com/index.aspx, Greg Weldon
Greg started Weldon Financial in late 1997 and has been publishing a paid investment newsletter and also managing money for SEC accredited investors since then.
Greg Weldon’s YouTube channel: https://www.youtube.com/user/GregoryWeldon
Read Greg’s full bio here: http://www.weldononline.com/gregoryweldon.aspx
During this 50+ minute interview, Greg talks bout all governments and central banks having a government debt problem as now over 40 governments have debt to GDP ratios over 100%!
Greg expects many central banks to let inflation run hot and focus on stagflation and a controlled inflation where the real inflation rate is above government bond yields by a wide margin.
To protect against currency debasement, Greg talks about gold, agriculture or soft commodities, energy and even copper or platinum or palladium as hedges to try to offset or beat inflation or currency debasement.
Greg is very bullish on agriculture, uranium, non ESG energy and precious metals as central banks have created a government debt Ponzi scheme since 2008.
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Great content! Keep it up!
Really like these interviews thanks
Wow this guy is good!!! Great content as always Jason. Appreciate all your hard work and thank you for sharing.
G.W. is to my knowledge The most well rounded technical analysts in the field. He even accounts for Galactic and Astrological Energies in his studies and reports. Very unique and fascinating indeed.
So valuable to listen to this several time. Plan accordingly it’s early
Greg is a legend. Thanks for having him on the channel Jason
I learned more in the first 5 minutes than I have in years of listening to others.
Love your content. Very informative.
Greg is tuned in too the next level. The ant people live in ignorance they are everywhere 😂🤣 thanks guys wonderful discussion. Not many guys understand finance, climate, vibrations and human behaviour as Greg. Climate change is extortion.
Here in New Zealand we are in stagflation and building social unrest.
BHP deal excluded the PGM assets
Great interview. Thanks Jason. The Weldon site is unstable and needs an update fyi.
BHP and RIO Tinto!
Greg Weldon is GREAT
Well Folks the Nutjar (FED)is about to POP Open
Your guest details the speculative risks very well-however…
He’s not a gold bug because we can buy gold and not need to take the riskS nor need his services! lol.
Just buy gold and silver
First time I hear about Greg. A great interview, value content. Well done gents. 🎩
Chinese buying commodities because sanctions are coming.
Damn I love conversations with the two of u riffing off of each other like this keeping it 100% real. Very rare in our times
Jason awesome 😎 and great guest always love to hear from Eric 👍👍👍👍👍KEEP
UP THE Awesome WORK Jason
I have never heard of this guy before but he was great!
Hes 6'10?! Gees. Great video jason
What a "nutjob" 😂🙃
Great show!
Another great interview
I think the biggest risk of all is not investing.
Bro you can't talk about global debt and not understand the damage we do to nature. This dude talking about star cycles and shit
Yup