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case I doubt they'll go 100 basis points but even if they did it would not matter you know I don't understand why markets are still surprised when you get higher than expected inflation numbers inflation is going to continue to get stronger even as the economy gets weaker and in fact the FED actually falls further behind the inflation curve every time it hikes rates because these rate hikes are too little too late the FED needs to make interest rates positive to do anything to bend the curve they have to get rates above the rate of inflation and until they do that they're spitting in the wind and meanwhile what really has to happen is we need massive Cuts in government spending and the government is doing the opposite we have the inflation reduction act we have the chips act we have forgiving student loans all of this is additional spending which is the worst thing you want to do when you have an inflation I expect inflation to become an even bigger problem you know for years central banks the Federal Reserve and the ECB their goal was to create inflation they were trying to tell us that the problem was that we didn't have enough inflation and they were going to solve that problem well the problem we have now is unsolvable because we never had too little inflation but now we have much too much and for years a lot of the inflation that the central banks were creating under the guise of quantitative easing which is just a euphemism for inflation a lot of that money was bidding up asset prices stock prices real estate prices even cryptocurrency crisis we're going up as a result of all that inflation uh but now the inflation has moved into consumer goods which is where it always ends up and in fact it's been there for a while but the government's methodology for measuring consumer prices have been deliberately designed to minimize the impact that inflation has on prices but now prices are rising so fast that even the government's rigged indexes can't hide it anymore so we're going to continue to see consumer prices rising interest rates I think are going to continue to rise particularly on the long end because interest rates are still too low just about every country has an interest rate that is still lower than the inflation rate that means interest rates are negative in real terms despite the fact that the nominal rates have come up you still have negative real rates and that is an inflationary monetary policy as long as you can borrow for lower than the rate of inflation people will keep on borrowing and keep on spending or buying assets and that keeps on bidding up prices what central banks really need to do if they're serious about bringing down inflation is they have to allow interest rates to rise above the inflation rate by a considerable amount they need to really slow borrowing and spending and particularly they have to rein in spending by government the problem that the central banks created I've been warning about this problem since the beginning I knew this day of reckoning was coming but the politicians didn't want to deal with it so we kept kicking the can down the road and now we've arrived at the obvious point in that road where the government has to pick its poison inflation or complete Finance crisis as debt collapses because it can't be serviced anymore and I think the politicians are going to go for inflation and that's why the inflation rates are going to shoot up from here but they're not going to be able to contain the long end of the bond market so they may be able to keep shorter term interest rates under control somewhat because of government borrowing buying them Central Bank buying but nobody is going to hold 10 20 30-year bonds once they realize that inflation is never coming back down see right now you still have Bond investors confident that the FED can bring inflation back down or the ECB can bring inflation back down because that's what they're saying but they're only saying that because they can't admit the truth and it's amazing to me that the markets can't see through these self-serving lies but once it becomes obvious to for just about everybody that inflation is not only here to stay but it's going to get worse than the federal and the ECB will lose control of long-term interest rates our rates are going to soar and if central banks try to stop that from happening the only way they can do it is by cranking up the printing presses even more and now they risk hyperinflation and the complete destruction of the the monetary system well back in 1980 to contain inflation which I think was a smaller problem than what we have now race went up to 20 so we may have to get that high or higher if you look in the United States right now consumer spending credit card debt uh Mortgage Debt auto loans are still at record highs Americans continue to borrow and spend that you're not going to reduce inflation if we keep on spending what we have to do is start saving again to stop inflation but no one's going to save who's going to put their money in the bank even though rates have gone up they've barely moved up you know in a bank account but even if you buy a treasury and get four percent inflation is twice that high nobody is going to save when inflation is wiping out the value of their savings so I just don't see any politically feasible way that they're going to rein in inflation until there's a real crisis I think if we get a US dollar crisis and a sovereign debt crisis then maybe in that type of environment where things are collapsing anyway and they do and damned if they don't then maybe they'll do the right thing but until that point they they're going to continue to Kick the Can well I think Tech valuations peaked in 2021 I think that was really the speculative blow off the end of the Mania and what fueled the tech bubble was inflation I mean that's where a lot of the money that was created entered the economy through the financial system but also you have to remember that when interest rates are at zero and money is basically free when investors are trying to Value companies that don't earn much money or don't even earn money at all and they're expected to earn money in the distant future those type of companies offer a lot more value when the opportunity cost of money is zero when the discount rate is nothing assets that are going to promise returns far into the few future can have a much higher present value but now that things have turned and that interest rates are moving higher and inflation is moving higher the value the present value of a future income stream is greatly diminished what investors are going to be looking for in the inflationary Rising interest rate environment that is going to dominate the investment landscape for the rest of this decade and probably longer is going to be traditional value-oriented Investments companies that earn a lot of money that pay good dividends and more importantly the companies that sell the types of products that consumers just have to buy even if the price goes up they're going to keep on buying they may give up buying other things but they have to buy certain things and so resources food energy utilities tobacco they're going to be a lot of companies that are going to be able to have pricing power and those are going to deliver returns first of all not everybody thought crypto was was the future at least not the current iterations of it these Fiat tokens like Bitcoin that are just conjured into existence and have no real value other than something that you could trade and gamble on but eventually you run out of rules it's always been based on the greater fool premise and I guess there were a lot of fools so that enriched the fools that got in earlier maybe they were smart enough to recognize how many fools there were I wasn't I I passed on bitcoin when I first heard about it because I knew it wouldn't work I just underestimated the number of people who couldn't figure that out and who would buy it but I think just like the NASDAQ crypto Insanity peaked in 2021 it was the most speculative part of that you know investment landscape and we had you know the nft craze as well and all these pump and dub schemes you had El Salvador get in there you had Michael Saylor Anthony scaramucci and Sky Bridge you know some of these institutions bought into it and started buying into the top you got all kinds of Leverage and that bubble has popped there's still a lot of air that's going to come out of it so I think what you're going to see is a big break in all of crypto not just Bitcoin there's more things that are going to blow up FTX was not the last shoe to drop it's a centipede there's a lot more coming there's more scandals more losses you know unfortunately what this is going to usher in is a whole new wave of government regulation and that's the last thing we need is more government I mean government is really the reason for this bubble because it was the the Federal Reserve that created the environment that allowed it to develop but you know more of the SEC you know I talked about that on my podcast and New York Stock Exchange started in 1792 and we didn't get the essence SCC until 1934 it was a mistake it came in as part of the new deal you know whenever the government creates a problem the solution is always more government America was better off without the SEC we were better off without the FED but unfortunately now we're going to get even more regulation because of this is this going to make the U.S economy less competitive I think there will be rallies and there will be declines I think it's going to be lower lows and lower highs I think a year from now Bitcoin and just about every other token will be quite a bit lower than they are right now but I don't think that is going away I think the future of crypto is gold I think that the world is going to be looking for a alternative to Fiat money especially as the inflation rates accelerate and the real beauty of blockchain and the internet is that it makes it so much more efficient to use gold not only is the store of value but as a medium of exchange and it is a unit of account and I just got back from Dubai and there are a lot of companies coming out with projects with goldback crypto where you have all the benefits of Bitcoin where you have the divisibility the portability the fungibility where people can opt out of a Fiat system and adopt a gold standard but not have to Lug around bars of gold you can keep your gold on your cell phone and I could buy a car with my gold or I could buy a cup of coffee or a pack of chewing gum it doesn't matter because you could you could break your gold up into little tiny increments and you can instantaneously and very low cost transact it's way cheaper than cryptocurrencies it's a lot cheap cheaper than Ibiza or Mastercard or any of these other payment rails so there is a future for blockchain and crypto but unfortunately it's not going to involve Bitcoin
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