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the FED for the last decade or so has flooded the economy with inflation I mean inflation has been the deliberate policy goal of the fed the FED has tried to balance out of every other problem by creating inflation and inflation showed up in the stock market in the real estate market and nobody really had a problem with it because people thought they were richer but now the inflation has moved into consumer goods and that's where it's going to stay and consumer prices are headed much much higher and the rate hikes that we've seen thus far are too little too late to make a difference the FED is way behind the curve when it comes to quantitative tightening they've barely shrank the balance sheet it needs to shrink a lot more but the problem is the economy is now so levered up based on the fact that the FED left rates so low for so long that you can't restore normal rates let alone the restrictive type of rates that would be needed to rein in the inflation without creating a financial crisis that's on an order of magnitude greater than what we had in 2008 except we can't have any bailouts so we have to allow the collapse to happen so it means stock crafts real estate crashes Bond crashes we have a lot of companies going bankrupt we have government slashing spending and you know defaulting on a lot of commitments like paying benefits to people Social Security Medicare uh you know a lot of commitments have been made by the government that it can't keep especially if the FED is committed to you know reducing inflation all a weak labor market is not going to bring down inflation it will actually end up exacerbating inflation but we don't have a strong labor market we have a very weak labor market the jobs that are being created are pretty much all part-time jobs and the reason we have all these part-time jobs is because people who currently have full-time jobs can't pay their rent they can't put food on the table they can't pay for their electric bills or gas for their car and so people are Moonlighting people need second and third jobs because the job they have doesn't pay enough now if we really had a strong jobs Market one job would be all you needed the fact that so many Americans need several jobs is you know a a function of how weak the job market is in fact you can look at the number of young people the percentage you have almost 50 percent of people between 19 and 29 that still live with their parents I mean this is you know the highest we've had I think since coming out of the Great oppression but the reason that so many young people can't afford to move out is because they don't have a job that pays enough to pay the rent so that is a weak labor market and you know I think some of the jobs are going to retired people who can no longer afford to be retired because their incomes have been eviscerated by inflation of course when I'm talking about inflation hurting people it's the government because the government creates the inflation it's like a tax so we only have inflation because of government spending and fed money printing it's not something that just naturally happens in the economy in a normal free market economy prices go down every year and that that's a good thing when they don't go down when they go up it's because the government creates inflation and we pay those higher prices in lieu of Taxation but it all goes to finance government prices aren't really coming down I mean maybe some prices aren't going up as fast as they were a few months ago but that's only temporary but I think you're seeing certain prices maybe coming down like maybe there's some companies having going out of business sales and so they may be marking down their products but once they're out of business then what happens you know once we deplete a lot of this inventory Place prices are going to go up a lot more now I think real estate prices are starting to come down finally but that doesn't mean that buying a house is cheaper it's actually more expensive because the mortgage rates have gone up so much but of course when you buy a house it's not just a mortgage payment the insurance costs have gone through the roof uh maintenance costs utility costs um um you know the the other costs associated with home ownership have moved up dramatically so even if the price of the house goes down the cost of living in it is going way up I wouldn't lend money at five percent with inflation you know I think it's at least twice that high but even the government's own numbers are seven percent and so I'm not going to make a loan to lose money because I'm going to lend somebody money and they're going to pay me back in dollars that have lower purchasing power than the ones I I loan I need an interest rate that's high enough to compensate me for that loss and the taxes that I'd have to pay on the nominal rate so rates are still much too low uh given how high inflation is and of course you know we need savings if we're going to reduce inflation we need people to spend less and save more nobody is going to save when the rate that you get on your savings is less than the inflation rate and so you know the rates are not high enough I mean they would probably have to go into double digits to actually be effective but the problem is we'd the country would completely implode uh with that type of an interest rate because we have too much debt so we'd have to allow a lot of the debt to go into default a lot of uh people would lose money it would be a very painful adjustment but unfortunately what's going to be even more painful is Runaway inflation which is what we end up getting because the FED doesn't have any stomach for that pain but we have you know huge trade deficits and budget deficits I think the fundamentals in the U.S are are much worse than a lot of other major economies and it should weigh heavily on the value of the dollar so I expected dollars fall and that's just going to worsen the inflation problem in the United States because the strong dollar has insulated us somewhat as bad as it's been it would have been worse if the dollar had not gone up as much as it did against other currencies because that helped control the price of our Imports but as the dollar loses those gains and starts to fall then the cost of imports really starts to rise and that's going to bleed into the CPI because you know most of what we buy at least the stuff that we buy is important and it's going to cost a lot more as the dollar goes down yeah well we're already in a recession I mean it's more likely a depression that's coming an inflationary depression I mean this is a real economic disaster that is the consequence of more than a decade of Reckless monetary and fiscal policy and we're going to have to pay a huge price for those mistakes the stock market of course it's dramatically overvalued it's priced for zero percent interest rates you know but that's not a natural rate of interest you know interest is the price of money and in countries that have a lot of debt and minimal savings interest rates should be very high and that's what's going to happen we're going to have very high interest rates at some point in the country and everything that was built on the foundation of low interest rates is going to implode I mean we saw 2008 we know what happens when you have a lot of debt and then interest rates go up you have a financial crisis that's what we're going to have this time except we have even more debt so we're going to get an even bigger financial crisis well we're going to see some rather spectacular Returns on non-us investments uh for the remainder of the decade you know I think the emerging markets and that would include China but I think they're going to do very well in a weak dollar environment but there already are some bull markets look what's happening with uh precious metals you know Silver's had better than a 30 rally off the low that's a bull market based on the way anybody wants to look at it you've seen mining stocks up 30 to 40 percent from their lows over the last few months I think they're now in Bull markets so there's a lot of potential
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