Top Three Videos – April 26, 2024

Economic impact of government policies

• “The FED has been able to print away every bear market and every recession since 1987, engendering asset bubbles and unsustainable debt levels.”
• “They’re now compelled to keep inflation rising to prevent asset bubbles from imploding.”
• The vast swath of consumer, business, and government debt is unserviceable and untenable at 5% plus borrowing costs, leading to the urgency to lower borrowing costs as fast as possible.
• “What happens if they cut rates and end QT and go back into QE and restart the bank term funding program and maybe uh get rid of the the um Reserve requirement the uh the capital ratio requirement for banks what if they do all this stuff and that guess what long-term rates sore right.”
• “You do not grow an economy by monetizing government debt. That is how you create stagflation and history is unequivocally positive that is the way you destroy the middle class and an economy.”
• “How big of a Pandora’s Box did we open with the direct to household fiscal stimulus during covid? A massive. One can’t be overemphasized.”
• Inflation is a deliberate act on the part of a government, usually occurring when a central bank monetizes out of control government debt.
• The confidence in the dollar is at risk of being destroyed, leading investors to turn to hard assets.

   

Market indicators and predictions

• The second phase of the recession may last 6-9 months, followed by unprecedented stagflation in the country.
• The comparison to the 70s raises questions about the Fed’s ability to control inflation.
• Michael Pento predicts a potential “air pocket in asset prices sometime in the summer” due to the withdrawal of money from the reverse repo facility.
• “Equity prices have to come down 40% so they can be back to historical relationships.”
• The 10-year note minus the two-year note yield is now in the longest inversion in history, a near perfect recession predictor since 1955.