Inflation To 'Rebound', Crash Markets And Send Interest Rates Soaring | Louis Gave & David Hay
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- čas přidán 17. 06. 2024
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Louis Gave, CEO of Gavekal, and David Hay, Co-CIO of Evergreen Gavekal, join forces to discuss the coming rebound of inflation and all the market implications that come with it.
*This video was recorded on April 8, 2024
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0:00 - Intro
1:36 - Rebound of inflation
7:37 - Fed policy
16:13 - 8% interest rate?
23:07 - Inflation and spending
33:14 - Invasion of Taiwan?
37:11 - Market bubble
46:00 - Market outlook
48:34 - Gold
51:53 - Asset allocation
#investing #economy #markets
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Will the Fed lose control of inflation? Comment below on what will happen to inflation, as well as Fed monetary policy, and don't forget to subscribe!
FOLLOW DAVID HAY:
Haymaker Substack Page: haymaker.substack.com/
Dave's Biographical Page: evergreengavekal.com/team/david-hay/
Bubble 3.0 Audiobook: awesound.com/a/bubble-30-historys-biggest-financial-bubble (Enter LINREPORT50 for a 50% discount)
Evergreen Compatibility Survey: evergreengavekal.com/compatibility-survey/
LinkedIn: www.linkedin.com/in/davidhayevergreencapital/
Twitter (@Haymaker_0): twitter.com/Haymaker_0
FOLLOW LOUIS GAVE:
Gavekal: web.gavekal.com/
Twitter (@gave_vincent): twitter.com/gave_vincent
If you can’t project wether economic conditions or policies will produce one of either 2 extremes then you must accept you know nothing at all and that economics is an utterly illegitimate field of study.
is silver same as gold ...i bought silver minning companys
Hey David, I would love for you to ask someone about the prospect of Taiwan being attacked not to be secured for mainland China, but as a blow to the US.
I.e. as a "well maybe we can't win, but we can make you lose" scenario. As mentioned, NVIDIA stock, which is propping up the entire stock market, would take a massive hit, and cause the entire market to panic.
Plud, we have to remember that as Putin said, "whoever masters AGI first will rule the world" so there is an AI arms race ongoing as we speak. It would make sense for China to trip up the US side of that equation if they feel they are losing.
The reduction in high end chip production would hurt China as a lot of the electronics they assemble rely on those chips, but I think China would survive and may consider it a worthy sacrifice to strike a blow to US chip dominance.
Something to consider.
This interview was great, very happy to hear more from these gentlemen.
Great work as always.
I can't imagine the crazy house of cards made by reckless policy and governance not yielding wild instability, inflations and deflations.
Gold’s price I think still has a margin to increase but not as much as it did since the early 2000’s (around $250 and now around $2,400 an ounce). That’s almost 10X. Gold is mostly a commodity, hence, it has a demand destruction. It is used as a good conductor of heat, as jewelries, as component of industrial machineries or gadgets like cell phones, etc. Imagine if gold’s price increase by 10X again, then all products that use gold will increase by 10X also. Who’s gonna by a product say for example a cell phone that previously costs around $1,000 but costs $10,000 now? Stocks on the other hand has more exponential growth especially those growth stocks. If you’re scared of putting a lot of money on growth stocks, then you can hedge by also balancing your portfolio through investing in large caps stocks. Stocks have always proven as the best performer of all assets, not real estate, not bonds, not cash and especially not gold. The S and P 500 index in 1928 was only $24 and now it’s around $5,051 (210X) whereas gold’s price in that same year of 1928 was $20 per ounce and now is only around $2,386 (119X). I still have faith in America as the safest haven on earth when it comes to financial investment because it still has the most stable and transparent government in all of the world. Heck, other countries may manufacture stuffs right and left but a lot of their companies and investors all over the world will still park their “scared” and “dumb” money in America especially when there’s global turmoil like what we have now. Those who want to invest in Russia, China, Iran, North Korea and their cohorts need to have an MRI of the brain because you may earn a lot in the beginning as a bait but will just lose almost all of it later because of their authoritarian governments where people’s right to redress the grievances of their citizens are muffled and met by violence and worse, by murder!
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Good point that the only thing that will be “higher for longer,” is inflation itself.
Im betting Blcktken300 will perform well, it havent had a cycle yet and they have a strong community on both, and Blcktken300 update will make rollup fees even lower. Just my 2 cents. Great video goodvibes
David thank you for relentlessly bringing us articulable, and digestible up to date current market/financial information. Mainstream media would never!
I could have listened for 10 hours. Great guests and they were good together.
Louis is very good, provided insights that I have not heard from other guests. Love it!
Great chat! Love both Louis & Dave’s take at where we are in the cycle. TY David 🙏🏻
Fed is not cutting in June.
The plan was to gaslight about cuts until the election in November, Powell knows he has to raise not cut to halt inflation. Israel just screwed their plans by antagonizing Iran.
Yup, it was just signaled today it would be later.
Cutting in June 2024, much like the famed transitory inflation of 2021 is fed speak for "we will wait until there is a large problem and then overreact."
Bond market is on brink of collapse. Cut incoming.
Cut rates without printing.
You must get Louis Gave back on! He’s incredible 💯👌🏻
Great commentary on Taiwan from Louis
The problem is not whether Xi JInPing wants to attack Taiwan. The problem is US wants a war with China (Why do you think Nancy Pelosi visited Taiwan?) With China's problem with Philippines, the war might come after all.
Double interest rate are must to save the $.
2:00 manufacturing strong, uptrend in global manufacturing cycle. Energy price up: Chinese econ has bottomed, raising commodities and energy prices. India too 4:40 China now biggest car exporter, selling to first time car buyers, creating sub 10K car mkt 6:00 fed will still cut in June 8:25 wage growing at 5%. 9:20 even Germany rebounding, China back, emerging mkt booming. Under investment for decades, now investing 11:00 mkt and manufacturing data point to the same up trend 12:25 cut will be a policy mistake 13:10 to crush inflation, need right fiscal and monetary policy; none in the West 20:00 US debt to gdp 120%, not in productive investments 22:40 French economist on inflation 24:00 no recession bc massive govt spending 24:30 ST gain and LT crash. Lacy Hunt. Palo Macro, inflationary recession, illusion of prosperity, social discomfort 28:35 China no inflation, govt supporting stock prices, chinese stocksbsuper cheap. NVDA= Taiwan 34:00 China won't attack Taiwan 39:35 bond and CR spreads fueled the recent rally 43:00 china vs US stock mkt, don't buy when Wall St is selling 45:50 asset classes
Thank you based AI summarizer.
46:45 gold demand comes from China Japan 47:45 yen down, rmb follows 48:45 gold bull mkt will end when China and Japan change policies 50:45 how to participate, miners, gold brokers 51:25 Western investors will realize they need gold too 52:00 big on miners and gold
I've been waiting for a conversation about this topic. Thanks.
The comment at 13:10 is the gold nugget of this entire convo. The Fed is simply pissing into the wind with higher rates without the accompanying fiscal restraint that they are not going to get. So they’re getting all the downside(bond market, interest expense, …)of higher rates with little improvement in inflation. They’ve decided that instead of standing in the middle of the ring and fighting inflation with one hand tied behind their back that they’ll retreat and not take the beating. Fiscal has to join the fight for any hope of victory
I agree. The interest rate isn't highly relevant to the overall money supply (m3) at this point. The only thing the interest rate can do is move money between sectors.
Seems that interest rates don’t impact the pool of money as much as they impact the velocity of money.
I think the 10 year is going to go above 12% maybe even higher. Most folks have no idea what that means but they will.
Louis is spot on on his takes on Russia/Ukraine and China/Taiwan. It’s refreshing not to hear mindless regurgitation of neocon propaganda.
Great guests and conversation i could have listened for hours!
that discussion was awesome, Dav. Thanks for bringing w
such quality discussion and knowledge to us. Cheers
The FED can’t cut. The FED can’t do nuttin’… THE FED doesn’t set rates. The bond market does. If the FED isn’t going to buy a heap of US bonds and put their money where their mouth is, then jawboning about rates is immaterial. Rates will rise. Period. The bond market is already demonstrating this reality. So, your jawboning about their jawboning is just a lot of wind.
Then how come the bond market was ok with negative real rates since 2008
@@user-lb8bg6kj9m Dude! You ain’t payin’ attention. Why am I educating you? The FED was actively buying bonds with printed money. Have you been living under a rock?
@@aaronsullivan1628
During covid too, now our biggest silent partner.
Imagine if the Fed used real, truthful inflation numbers. Rates would be double digit.
It was 25% 😂 and they blame us for getting four to 5% increases but I have friends or engineers making six figures who only got three and a half
Fabulous content. I learned so much from the video (and I consider myself well informed). Just top notch guests!
Thanks for these two great guests. Brilliant discussion!
Two great guest and information...thanks David.
Other analysts are reporting that China is collapsing. How can so many analysts have such different outlooks?
That's a good question
I was wondering the same thing. Also how can we even trust any CCP numbers?
Clash of interest and prejudice
Western reporters like the ones claiming Ukraine was winning the war? 😂
As a Chinese Canadian, all I've been hearing from the Chinese community lately is all about China's collapsing in recent years.
Japan is not strong at all. They are facing insane inflation crisis with yen crashing against usd
Great interview. Really interesting insight from these guys - well done to all 👌
David...maybe next time interview Louis solo...He has so much good info to say...one hour is not enough
Amazing interview David, love every minute, thx.
Outstanding interview, David, excellent guests, this is one of your best 👌
Very valuable experienced guests, right on.
Captivating because it was highly informative ( at least at my level of knowledge). Thank you very much for this opportunity for more knowledge and understanding.
What I don’t understand is, on one hand we are told the stock market will crash and yet on the other we are told ways of investing in the stock market. Oxymoron or paradox? I'm considering investing over $300k, but I'm uncertain about risk mitigation strategies.
Invest in real estate, ETFs and high-yield savings account
Thank you Louis and David H for this great discussion: so if Jamie Dimon thinks inflation will get worse in coming years, and when you look how cheap oil is (using present-day-values of past prices), to keep our net worth from devaluing we pretty much have to invest in oil equities.
Ummm, bitcoin is the best performing asset the last 15 years. You might want to look into it.
huge debts ($34T) and deficits ($1T/100days), and rising debt servicing paying $1T/yr. interest at 5%.
real US inflation 10%.
rates and yields up to 6% then the US Debt Clock explodes into inflation and hyperinflation.
rates and yields down then no one will purchase 4% treasuries billions and trillions to be sold in 2024.
The US rates are stuck at 5% going forward.
This is it.
US inflation is 6-8% currently. It seems like 10, but that's only because it was 15% for a few months last year.
@@RD-kz4wr I see hidden inflation in the work force. I'm starting to have to pay people bribe money to get things done. It's getting bad.
Great debate 👏🏽 lots of “gold nuggets” here. Kudos!!!
30:00 Russell Napier argues (in his recent Library of Mistakes talk) that we should consider where domestic capital flows are headed before deciding where to invest in the world. For China, domestic capital is flowing out of the country. Russell says that when foreign capital is flowing in, but domestic capital is flowing out, it's the foreign investors who are wrong!
The Yuan is not depreciating because of a worsening trade deficit, it's happening because of a worsening capital account, so be vary careful about investing in China.
Fantastic 🎉🎉🎉🎉
🎉🎉 both David’s need microphones 🎉🎉
Great guests
Louis is my new fav analyst. Smart
Great conversation and great topics. Congratulations gentlemen
I don't know why no one is listening to the central bankers. "Higher for longer" the msg is clear.
Naw, bond market on brink of collapse and debt expanding faster and faster. Cut coming.
Another strong interview David! Thanks!
FED WILL BE SPIKEING INTEREST RATE'S HIGHER ? NOT LOWER ?? OBVIOUSLY ?
Brilliant guests!
Congratulations David on a great interview 👏
It takes a Financial Analyist to explain the really reason for the Ukraine war, thank you!
Finally somebody honest, humble and courageous enough to not call them stupid ;) 14:40
very very informative, knowledgable and stimulating discussion. thanks david and the guests!
I like the guy with headphones on. Smart and sensible bloke.
David Hay is on an echo chamber. Hard to hear
Great interview!!! 2 very smart investment professionals who are right on point!!!
Terrific conversation. Learned a lot!!
Great interviews. What does it all mean for investors trying to protect our purchasing power?
Precious metals or india
Good information from your guests.
Really great guests and interview
Incredible!
Great Macro info! Way to go!
Amazing interview
Best definition of inflation : 23:38 to 24:01 wow that was a heavy concept to digest .....i had to watch it 10 X to understand it
They are missing the point about Engineer populations. You can't just throw bodies at engineering problems. 1 Excellent Engineer > 10 Mediocre Engineers.
When you have plenty of engineers you would have plenty of excellent engineers as well. The numbers even out automatically.
@@skydragon23101979 After 10 - 15 years of engineering work.
A country can have many engineers, but if it's economy is a dying, centrally controlled communist system, with little innovation and with debt that is equal or higher than ours... those engineers aren't going to help.
@@skydragon23101979 Coming from an Engineer: The need for huge numbers of Engineers is highly over exaggerated. With proper capitalization a relatively small number of Engineers can execute a huge project. The most important factor is having a project that makes sense economically.
David does a fantastic job.
We need to start asking who is collecting the data and if they’re being objective
Bingo
great iterview
excellent interview - when will the gold run end?
david lin is giga chad
Really liked this show
Thumb up to the great guests .
This was great
awesome guests
I think I’m ready to accept the Illusion of Prosperity.
Great guests!
China is not collapsing but dropping prices to take greater market share. Exporting deflationary goods.
Thanks!
thanks!
Need an individual interview with both these guys
One of the best interviews!
David, do a deep dive on the "market metrics" that folks are throwing around/referencing. How much of the rising prices "demand" referenced as evidence of better business conditions are really just a figment of Inflation? Check food inflation and the real on the street price rise is like 30% over the last year or two, same effect happens on commodities as the buying power of fiat currencies goes down. Misreading economic data surging with inflation effects is dangerous: individuals and businesses will make poor investment decisions. The data seems to indicate a glut of buyers are chasing products so the business buys additional equipment and authorizes worker overtime which all pile up and sit on shelves.
Great discussion!!
If inflation picks up and interest rates are raised will companies have massive layoffs? Will layoffs cause massive unrest? Or even if interest rates are rates will inflation continue to rise and doubling food prices cause massive unrest?
Spot on!!!
Which part? It was an hour long video
Amitiés à votre soeur et a votre papa Louis! Merci à toute la famille Gave!
Great conversation
....or they drain your super/401k....downsize and get out of the way
This 6% budget deficit in monetary terms is larger than personal and corporate savings as at 2024 !! Since savings is really low, investment will also be insignificant and that in turn means that America's stock of capital equipment will not grow significantly enough for productivity growth and more productive employment !!
You should have a debate between inflation vs deflation
This vid is awesome.
Very good discussion
The Federal Reserve is deliberately inflating with deficit spending and refusal to raise interest rates further (mind you, 5.25% rate is not high), meanwhile verbally fear-mongering the markets about fighting inflation. Look at their actions, not their words. With their actions, the Fed is continuing to run deficit spending, keeping interests rate at a very low 5.25%, refusing to increase interests rates; but with their words they pander about how serious they are about fighting inflation. The fact of the matter is, the Fed knows that the U.S. economy is weak, job numbers are also very weak. And in order to stimulate a failing economy, the Fed is desperately seeking for a reason to lower interest rates. The Fed will fudge numbers to make it seem like inflation has been crushed, in order to lower interest rates; when in fact the actual inflation rates will continue to spike up at the grocery stores, at the fuel pump, as the cost of living will be inflated higher and higher. The truth of the matter, is that the world is actively and aggressively dumping the U.S. paper dollar. The U.S. economy has now been transformed into Venezuela.
@14:35 I love this man! :D - Thanks for the grate talk.
It would be great if you had a deep dive on the $AKDMTTP
Got my fingers crossed for BRETT and $AKDMTTP
Silver 🥈 baby 😃
I don’t see Powell cutting. Something catastrophic would have to transpire. It could be something overseas that is a catalyst
The way to cut our current style of inflation, is to stop printing money out of thin air to fund government. Killing the economy by raising interest rates wont help.
As expected we went down a little but $AKDMTTP keeps everything strong and in place. These guys really know how to be convincing and the preparation all the years was so well done. Nothing will change in 2024 and nothing will come close to this incredible smart one. True believers for $AKDMTTP will have a good year
Excellent video! David drank Starbuck drink. SBUX 😊
Why cant u buy gold spot like xauusd? Is that not the correct way?
Odd twist to recency bias but despite Louis's points do not think China was ever investible for retail investors and will never be.
He admires Jamie “I’m richer than you. But I did receive trillions in government backstops and guarantees to keep the shirt on my back” Dimon. Okay. 😂😂😂😂
Narco and Epstein $ galore.
If your game is getting richer and richer it's hard to find many doing it better than Dimon. He sells his soul to do it, but maybe this guy doesn't mind that part.
Yea that was hilarious. The president comment was gold. Yea that's what we really need. A central banker president.
@@MAMPwhat better person to get spending, taxes and inflation under control?. Clearly sleepy Joe can’t do it.
David looks knackered.