Top Three Videos – August 3, 2024

Consequences of Inflation and Monetary Policy

• “The probabilities are overwhelmingly on Gold’s side that is the best environment to see gold increase its value.”
• The Fed’s balance sheet has gone parabolic from 700 billion to 9 trillion, now at $7.2 trillion.
• Instead of having yields on the long end of the yield curve fall as they usually do, they could actually rise because of an insolvent nation ravaged by inflation.
• Insolvent nations with an inflation problem don’t tend to do very well when pursuing a course of inflation, raising concerns about the potential consequences of cutting rates and implementing QE.
• An unhealthy and sick middle class is detrimental to the economy and the nation’s viability.
• The economy is growing while destroying the currency, leading to a shift towards base metals and energy.

   

Economic Indicators and Predictors

• 20 years of interest rate repression has led to negative FED funds rate minus CPI, a historical first for the United States.
• Michael Pento uses a five-sector framework to analyze inflation, including deflation, disinflation, stasis, reflation, and stagflation.
• The yield curve inversion is one of the best predictors of recession, with a historical track record dating back to 1955.
• The FED is always behind the curve, looking at lagging data like labor market and GDP, while predictive algorithms like bank lending standards and yield curve are better indicators of inflation.
• “There’s a good chance that long-term rates rise instead of fall, and then you’re that’s usually the salve behind a recession.”