Gold Price to Go Parabolic? And Silver Might Even Beat It Says This Expert

Summary

The transcript of the Danela Cambon Show on ITM Trading discusses the current state of gold, the dollar, and global economic conditions with Peter Boockvar, Chief Investment Officer of Bleckley Financial Group. Boockvar highlights the resilience of gold despite aggressive monetary tightening and inflation, attributing its strength to geopolitical events like the EU freezing Russia's reserves, which has led to a shift in central bank buying behavior. The conversation also touches on the potential for higher long-term rates, the mixed bag of global growth, and the impact of US debts and deficits. Boockvar advises investors to be patient, liquid, and price-sensitive, suggesting that the current environment presents opportunities for those with cash to take advantage of various investment situations in the coming years.

Takeaways

• 📉 Concerns about spiraling debts and deficits are leading some to consider gold as a store of value to hedge against inflation and economic instability.
• 🌟 Gold has shown resilience and performed well despite aggressive monetary tightening and high inflation, indicating its continued relevance as a safe-haven asset.
• 🔄 The freezing of half of Russia's central bank reserves by the EU has triggered concerns among other countries about holding US treasuries, leading to a shift towards gold.
• 💰 The diversification away from the petrodollar into other currencies and gold is increasing as countries look for alternative stores of value.
• ⬆️ Central banks have increased their buying of gold, signaling a shift in reserve management and a potential long-term trend.
• 💸 Retail investors in North America have shown less appetite for gold at current levels, possibly due to high real interest rates and a lack of understanding of gold's value.
• 🚧 A lack of investment in commodity production over the past decade has led to a supply-demand imbalance, which is now correcting with implications for commodity prices, including gold.
• 🌐 The global economic landscape is mixed, with some regions growing rapidly while others are slowing down, affecting investment strategies and opportunities.
• 📈 Peter Schiff, a long-time gold advocate, suggests that a price target of $5,000 for gold is becoming more realistic, reflecting fundamental economic shifts.
• 🔑 Silver is highlighted as an undervalued asset with multiple industrial uses, and its price could rise significantly if it follows gold's upward trend.
• 📚 Emphasizing patience in investing, especially in a high-interest-rate environment, allows investors to be selective and take advantage of opportunities as they arise.

Q & A

What are the concerns regarding US debts and deficits?

There are worries that US debts and deficits are getting out of control and only getting worse each day, which could potentially lead to economic instability.

Why is gold considered a store of value?

Gold is seen as a store of value because it retains its worth over time and can act as a hedge against inflation and currency devaluation.

What event has influenced central banks to buy more gold?

The decision by the EU to freeze half of Russia's central bank reserves after the invasion of Ukraine has led to concerns about holding US treasuries and prompted central banks to diversify their reserves, including buying more gold.

How has the petrodollar system changed recently?

The petrodollar system is not as dominant as it once was. Countries are increasingly transacting in their own currencies rather than the US dollar, which affects the demand for dollars and can influence the value of gold.

What is the current situation with short-term interest rates?

There is a belief that short-term interest rates have peaked, with some central banks like the ECB and the Swiss National Bank considering rate cuts. However, there is still a risk of higher long-term rates.

Why might an investor consider owning gold despite concerns about US debts and deficits?

Owning gold can act as a hedge against the potential negative effects of out-of-control debts and deficits, as gold tends to maintain its value during times of economic uncertainty.

What is the current sentiment towards gold among retail investors in North America?

The appetite for gold among retail investors in North America is not as strong as in Asia, with many believing that gold prices are too high to invest in at the current levels.

How does the high interest rate environment affect gold investment?

High interest rates, such as the 5% fed funds rate, can reduce demand for gold because gold does not provide a yield. When interest rates are high, the opportunity cost of holding gold increases.

What are the challenges facing the mining industry?

The mining industry faces challenges such as a lack of investment, longer development timelines for projects, ESG concerns, and political pressures. These factors can deter new investments and exploration.

What is the potential outlook for gold prices?

The outlook for gold prices is bullish, with some analysts suggesting that a price of $5,000 per ounce is becoming more realistic. However, this would depend on various factors including inflation, interest rates, and global economic conditions.

Why is silver considered a unique investment compared to other commodities?

Silver is unique because it serves multiple roles, including in solar panels, electronics, EV batteries, tableware, jewelry, and as a monetary metal. Its diverse applications and the fact that it has lagged behind the rise in gold prices suggest potential for growth.

What factors are currently influencing US Treasury yields and the dollar?

Factors influencing US Treasury yields and the dollar include the Bank of Japan's yield curve control decisions, geopolitical tensions, inflation rates, and the interplay between different global economies and their central banks.

Outlines

00:00

🏛️ Economic Concerns and Gold as a Safe Haven

The first paragraph discusses concerns over rising debts and deficits, suggesting gold as a store of value. It highlights the conversation with Peter Bvar, Chief Investment Officer for Bleckley Financial Group, about gold's performance despite aggressive monetary tightening and inflation. The EU's decision to freeze Russian reserves impacted global trust in treasuries, leading to central banks buying more gold. There's also a mention of the petrodollar system evolving and gold benefiting from a diversification away from the US dollar.

05:00

📉 Retail Investor Hesitance and Central Banks' Gold Buying

This section contrasts central bank gold purchases with retail investors' apprehension in North America. It talks about the impact of high fed funds rates on gold demand and ETF holdings. The narrative also touches on the lack of investment in commodity production over the past decade, leading to a supply-demand imbalance. There's a critique of ESG policies and the challenges faced by mining businesses, including long development timelines and political pressures.

10:01

🌟 Gold Exploration Decline and Future Market Predictions

The third paragraph emphasizes the reduced gold exploration and its implications for the market. It suggests that less exploration leads to less gold discovery, which is a bullish signal for gold prices. The discussion also covers the potential for gold to reach new highs, comparing past market performances to current fundamental conditions. There's a mention of gold's comparison to Bitcoin and the possibility of significant price increases for gold.

15:02

📈 Silver's Diverse Uses and Market Potential

This part focuses on silver's versatility and its role in various industries, from solar panels to electronics and EV batteries. Despite silver's historical performance and its multiple uses, it has lagged behind gold and other industrial metals. The speaker sees potential for silver to rise significantly, given its current undervaluation and the historical average silver-to-gold ratio.

20:04

📊 Treasury Yields and the Dollar's Global Impact

The fifth paragraph delves into the dynamics of treasury yields and the dollar's strength. It discusses how geopolitical tensions and economic indicators influence interest rates and currency values. The conversation also explores the relationship between the Japanese Yen, US treasuries, and the broader impact on global markets. The importance of the Yen's strength and its effect on energy imports and treasury sales is highlighted.

25:05

🌐 Global Economic Disparities and Strategic Patience

The final paragraph addresses the mixed global economic landscape, with some regions experiencing growth while others face slowdowns. It emphasizes the need for investors to remain patient and liquid, capitalizing on investment opportunities as they arise. The advice given is to be price-sensitive and not to chase markets blindly. The speaker is optimistic about commodity stocks and identifies potential areas for investment.

Keywords

💡Gold

Gold is a precious metal that is often viewed as a store of value and a hedge against inflation. In the video, it is discussed as an investment that has performed well despite aggressive monetary tightening and high inflation. The speakers mention gold's historical performance and its potential to reach new price highs, reflecting its significance in the current economic climate.

💡Debt and Deficits

Debt and deficits refer to the financial obligations of a government that exceed its income, leading to a shortfall. The video expresses concerns about the U.S. debt and deficits spiraling out of control, which could impact the value of the dollar and influence investment decisions, including the desirability of owning gold as a store of value.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. The script discusses the highest rate of inflation in 40 years and its impact on the value of money and the performance of gold as an inflation hedge.

💡Central Bank Reserves

Central bank reserves are assets held by a nation's central bank to back its liabilities, such as the currency issued by the country, and to influence monetary policy. The video talks about the decision by the EU to freeze half of Russia's central bank reserves, which has led to a shift in how countries view and store their reserves, affecting the demand for gold.

💡Petrodollar

The petrodollar system refers to the financial framework where oil is priced in U.S. dollars, thus creating a demand for dollars and influencing the dollar's value. The script mentions that the petrodollar is not as dominant as it once was, with countries transacting more in their own currencies, which can impact the demand for dollars and, by extension, gold.

💡

💡Interest Rates

Interest rates are the percentage at which interest is paid by borrowers and paid to depositors for the use of or the loan of money. The video discusses the impact of rising interest rates on investment decisions, particularly in relation to gold and treasury yields. It mentions the Fed's potential to cut rates and the implications for short-term and long-term rates.

💡ETFs (Exchange-Traded Funds)

ETFs are investment funds that are traded on a stock exchange, much like individual stocks. They offer a way to diversify investments and can track an index, a commodity, bonds, or a basket of assets. The script notes a draw down in ETF holdings of gold since early 2022, reflecting a shift in investor sentiment towards gold in the face of rising interest rates.

💡Commodity Production

Commodity production refers to the manufacturing and supply of basic goods, often raw materials, which are interchangeable with other goods of the same type and are typically used as inputs in the production of other goods. The video talks about the lack of investment in commodity production over the past decade and the current supply-demand imbalance, which is leading to a payback period in commodities.

💡ESG (Environmental, Social, and Governance)

ESG criteria are a set of standards for a company's operations that socially conscious investors use to screen potential investments. The video discusses how ESG factors and political pressures have influenced investment in the mining industry, affecting the supply of commodities like gold.

💡Yield Curve Control

Yield curve control is a monetary policy tool where a central bank targets specific yields on certain maturities of government debt to influence borrowing costs and economic activity. The video refers to the Bank of Japan's yield curve control and its impact on global bond yields, including U.S. Treasury yields.

💡Global Growth

Global growth refers to the expansion of an economy across the world, often measured by the increase in GDP. The video script mentions a mixed bag of global growth, with some regions like India experiencing rapid growth while others, such as China, are slowing down, leading to varied investment opportunities and challenges.

Highlights

Concerns are growing over uncontrollable US debts and deficits, which worsen daily, prompting some to consider gold as a store of value.

Despite historical headwinds like high real rates and a strong dollar, gold has performed well, possibly due to the EU's decision to freeze half of Russia's central bank reserves.

The shift away from the petrodollar, with countries transacting more in their own currencies, has influenced the value of gold.

Central banks, particularly in China and Saudi Arabia, have increased their gold buying, indicating a shift in reserve storage.

The end of Fed rate increases could provide a tailwind for gold, with other central banks like the ECB and Swiss National Bank potentially cutting rates.

US debts and deficits are a growing worry, and some investors are turning to gold as a hedge.

Retail investor appetite for gold in North America has not matched that of Asia, possibly due to fears of high gold prices.

The Fed's aggressive interest rate hikes have led to a decrease in demand for physical gold and a draw down in gold ETF holdings.

There has been a lack of investment in commodity production, leading to a supply-demand imbalance and a potential payback period for commodities.

Environmental, social, and governance (ESG) factors and political pressures have dissuaded investment in the mining sector.

The timeline for developing mining projects has lengthened, deterring some investors due to the long wait for returns.

Silver is seen as a highly leveraged play on gold, with potential for significant upside due to its multiple industrial and monetary uses.

The silver-to-gold ratio suggests silver may be undervalued, with historical averages indicating a higher price potential for silver.

Treasury yields and the dollar's strength are influenced by a complex interplay of factors, including geopolitical tensions and energy prices.

The Bank of Japan's policy decisions have had a ripple effect on global bond markets, impacting yields from Germany to the US.

Japan's role as the largest foreign holder of US treasuries means movements in the yen directly affect its appetite for US debt.

Global economic growth is mixed, with some regions like India growing rapidly while others like China slow down, creating diverse investment opportunities.

Investors are advised to be patient, liquid, and price-sensitive, holding cash for potential opportunities in public securities, commercial real estate, and other areas.

Transcripts

of course there's worries about us debts

and deficits getting out of control

those debts and deficits only get worse

every single day why not own some gold

people are afraid of gold at these

levels thinking it's too high do I want

to own this many treasuries and are

there other places where I can store my

reserves and gold is a store of value

for that money we have this mixed bag of

global growth right now that was the

biggest bubble in the history of all

bubbles we're now seeing the unwind of

that this year next year there are going

to be a lot of presentable investment

situations that those that

have hi this is deela Comon and welcome

back to the danela cambon show here on

itm trading today we are talking about

gold yields the dollar and what the

incredible moves are telling us joining

us now is Peter bvar he is the chief

investment officer uh for Bleckley

Financial Group he's also the Ed editor

of the book report play on his name

there I love it uh you do fantastic work

also over at CNBC Peter always good to

see you welcome back great to see you as

well my friend uh thank you for having

me back on yes yeah I know offline I was

saying sorry for your Islanders but hey

better times ahead yes hopefully next

year better times ahead like gold Peter

I mean we've been covering gold for so

long you you've got to be smiling here a

little bit uh you've been bullish uh the

metal and silver for a very long time

let's start with that and uh what you

think lies ahead I I I think the two of

us have redefined the word patience

being uh a bull and gold and silver uh I

well I also have twin toddler so yes

patience is oh yeah that is that is a

big time virtue for you as well uh what

what what I think is the the interesting

setup for for gold was the amazing

performance that we saw in the face of

the most aggressive monetary tightening

in 40 years in response to the highest

rate of inflation in 40 years now on one

hand you can say well if inflation's if

it if Gold's this great inflation hedge

well yeah that's why it should have

traded well which is in part true but if

the major headwinds historically for

gold has been High real rates and a

strong Curren

particularly the dollar then gold should

not trade so well and it did and I think

a a big gamechanging event was the

decision by the EU mostly the EU to

freeze half of Russia's central bank

reserve after they invaded Ukraine so if

you're in China and you own more than a

trillion dollars at the time of us

treasuries and you see just by but

government Fiat what was done your

you're saying oh do I want to own

this many treasuries and are there other

places where I can store my my reserves

and it wasn't just the decision that

that um was triggered in China it was in

Saudi Arabia it's anywhere that deals

with a lot of dollars that is parked in

the US whether that's at a bank or

that's within us treasuries so that's

when we saw a real acceleration of of

Central Bank buying then you also throw

in that the Petro dollar is not as Petro

dollar as it once was it's maybe SL

Petro SL Petro dollar gold in a way

because we've seen of course that

countries are transacting more in their

own currencies and less with the dollar

and as we know after the early 70s any

transaction that took place in oil

particularly with anybody wanting to do

with the Saudis had to do it in dollars

and that is no longer the case so

there's extra money that gets produced

in that that doesn't have to be parked

in dollars and gold is a store of value

for that money and we've seen that big

time over the last couple years and then

all of a sudden gold just needed a

little tailwind and that was possibly um

uh the end of the Fed rate increases

even though we'll wait to see when they

cut uh but we're also seeing while maybe

the FED doesn't cut the ecb's ready to

cut uh Swiss National Bank already cut

Bank in Canada is looking to cut so uh

we've seen Peak short-term rates and I

emphasize short-term rates because we

there's still a lot of risk that we see

higher long-term rates and one last

thing and I'll throw it back to you is

of course there's worries about us debts

and deficits getting out of control and

why not own some gold

yeah yeah yeah and all very good points

before we move away from gold though I

just want to dig a Little Deeper here um

because you bring up a good point

obviously the Central Bank buying

driving gold

prices and and China you know buying

gold at at record amounts here Peter but

what I find interesting is that at a

retail investor level the appetite for

gold definitely present in

Asia but when you speak to bullion

dealers here in North America it's not

quite there yet people are afraid of

gold at these levels thinking it's too

high to get in here do you find it

interesting that the retail investor in

North America at least has not shown up

yeah I I think the 5% um five and a half

percent fed funds rate is a main reason

why not only have they lessened their

demand for

physical uh in actual coin or bar um

form but we've also seen that within all

the ETFs where there's just been a

constant draw down in ETF Holdings of

gold since early 2022 when the FED

started aggressively raising interest

rates I think the average person doesn't

necessarily make also the distinction

between nominal rates and real rates and

also understanding that gold can still

trade well even though it doesn't pay

you a yield and that the performance of

Gold without paying you that yield I

think really says a lot about the demand

unfortunately for retail is we're

beginning to see a I mean you look at

Costco that's selling since September of

last year selling gold bar right in a

way that

introduced the average person who wasn't

necessarily thinking about owning

physical gold they were more focused on

you know buying uh paper towels and

tissues and a lot of boxes of cereal and

ketchup when they went to Costco that

wow hey uh I I guess a gold bar is real

and I can actually see it and actually

feel it and actually can take it home

with me other than uh you know as

opposed to uh other things that uh

people only see on their

computer yeah really good point that

definitely was a a game Cher um but I

also like one another point you bring up

about gold you say money was an invest

in commodity production uh it went into

Tech you know for the over the past

decade this is payback of lack of

investment with Supply demand and

balance is happening now in

Commodities I and and you look back just

to even 2021 when money was falling from

the sky and all you need was right a

PowerPoint presentation and a pulse and

if you said something sexy uh in Tech

you were going to get an investment uh

if you came with a PowerPoint

presentation on this new gold mine in

early 2021 uh people were going to laugh

at you and even well before that I mean

you you talk about going back to when

gold peaked out in 2011 and then really

sold off in

2013 all the investor

Focus all the investment dollars didn't

go into the mining business uh and also

that was around the time in 2014 when

when oil sold off hard and investors

started to say hey we're not just going

to invest in in companies that are just

drilling for drilling sake we want cash

flow we want discipline and so on a huge

amount of investment dollars went

elsewhere and we know where they went we

saw where it went but it didn't go into

the mining business so we've had years

of and then you throw in ESG and then

you throw in you know every politician

that beats you up for being an executive

and a mining business putting aside that

they desperately need your product

particularly the same politicians that

are trying to create this new energy

World while they need you even more so

now it's sort of payback it's catchup

time where we need the investment

dollars but it's very difficult uh not

only to put that to work in a friendly

jurisdiction but the timeline of

developing a project has just gotten so

long that it dissuades a lot of people

from even wanting to do that and they

say do I really want to go through all

these headaches of going down the road

of a developing a mine and dealing with

the jurisdiction uncertain about what

and especially if it's in a foreign one

outside of the US Canada Australia for

example of what what is the tax rate

change going to be I mean just look at

the experience in Panama with first

Quantum and what they went through uh

and and literally just losing mind

having it confiscated now maybe it works

out maybe there's some reversal of that

that that that policy but uh you got to

have you know a set of guts if if you

want to oh yeah develop a mind right now

that you may not see the fruits of for

10 to 15 years all right exactly and

that just plays into the bullish case

for gold right Peter because if there's

obviously less exploration less Juniors

well we're finding less gold right now

we can be sure just by we know how

Cycles work when gold is above 3,000

4,000 whatever investment money Mone is

going to come in no doubt and it's going

to help to finance those higher cost

projects but even then it's still going

to take a long time to bring the needed

Supply on that would quell prices at

some

point well let me ask you this before we

talk um silver um if I had to ask you to

fill in the blind like you wouldn't be

surprised if gold were to hit what's

that number for

you well I I think five is is becoming

more realistic and you know on a on a

parabolic Mania overshoot

10 I don't know if i' be I don't know if

I'm still gonna be long then I don't

even know if I can stomach being long

past five but it can go to

10 yeah you know when I started covering

gold I remember Rob mchan of mchan

mining coming out you know talking

$5,000 gold one day and everyone was

just like thought that number was

absolutely absurd and you know yet here

we are today and the other point I want

to bring up Peter is well it's

interesting that you know Golds are are

you know compared to bitcoin all the

time and we have crazy valuations when

it comes to to bitcoin um you know so

why can't there be those targets for

gold well I I got that same uh I had

that same conversation with him probably

more than 10 years ago and his simple

math was well the 1970 bull market in

gold was up more than 20 times 35 even

though 35 at the time was sort of

artificially set gold still went from 35

to 850 if gold bought him at 250 in 1999

2000 well a 20x move similar to the 70s

gets you to 5,000 so um he's right and

you could also argue

that the fundamental backdrop today for

gold uh is even more intriguing than it

was then then it was okay we had a

classic inflation scare uh we had the

suppression of gold since the 1930s and

it sort of busted out to the upside and

now you have we've had this world of

zero and negative interest rates massive

central bank balance sheet expansion out

of control debts and

deficits uh and and and real destruction

of of purchasing power since the early

70s that just continued on even with uh

Paul vulker and the deceleration that we

saw in inflation in the 80s and 90s so

there there's a a pretty compelling

fundamental uh basis for gold that just

sort of needed this this this push this

Catalyst to to break out of of itself

and uh and I think we we we might have

reached

that talk to me about silver because I

know you really really really like

silver more than gold here so on on a

leverage basis yes you know silver

silver um outside of natural gas there

aren't too many more volatile

Commodities than the two of them uh and

when it goes It goes and when it's dead

meat it's dead meat we know Silver's

just been um in a in a trading range for

for for a decade plus but silver is just

so unique and it's so unique because it

wears so many different hats so many

different roles it plays a role if

you're building at a solar farm where

you need the the producer of those

panels need silver uh it plays a role in

in in building an iPhone and other

electronic products it plays a role in

an EV battery uh it plays a role if you

sit down to eat dinner and you happen to

have silver table wear it plays a role

if you're interested in jewelry and it

plays a role uh as a monetary medal

similar to gold

so that's why I believe it's so unique

and it is so badly lagged this riseing

gold and it's badly lagged a lot of

other Industrial Metals as well

particularly copper and I see a lot of

upside here I mean silver is almost 50%

below just looking at the the future

front month future of 28 uh it it

reached 50ish both in 1980 and

2011 and here you have gold well above

those previous Peaks and silver that is

still substantially below and I know

sometimes silver one day trades like an

industrial metal similar to Copper

another day it'll trade like a monetary

metal similar to Gold but uh I think

it's one of the cheap assets out there

and one of the you know the the sort of

basic amateurish way of valuing silver

is just the silver or gold ratio even

though it's just a a back of the

envelope more than anything else but you

do the the average of 60 times going

back the past 50 years and you get a

silver price well into the 30 so it's

pretty intriguing to me uh as well as

gold Peter I'm I'm curious to get your

thoughts on uh treasury yields uh you

know jumping just this week as investors

reacted to a hotter than expected real

retail sales report and Rising

geopolitical tensions and we have the

dollar ripping uh hitting its highest

level against the Japanese Yen since

1990 talk to me about the the incredible

moves we're seeing in 10e yield and the

dollar what do we need to know about it

well it stretching back when you look at

the the first spurt to that 5% level in

the 10year uh it really started at

around uh July 27 28th when the bank of

Japan decided because I'm going to tie

this to the n and ggbs also when the

when the bank of Japan decided to again

widen yield curve control

from 50 basis points to 100 and ggb

yields Rose and to me that was the

trigger for the 10e yield to go from

about 3 80ish up to five and then after

it got to five the boj actually backed

off from uh getting out of negative

interest rate policy uh the FED started

talking about possibly cutting interest

rates in 2024 and then we've we started

to pric in as many as six rate cuts into

the FED funds Futures market and that's

why you saw the back uh down in the in

the tenear yield back to around forish

again but now we're right back up again

because maybe the fed's not going to be

cutting at all this year with sticky

inflation uh that um is very is

complicating their uh their plan and

plus you have the crb index at the

highest level since August 2022 that

further complicates what the FED wants

to do H and also the conversation that

was alive and well in the fall of last

year about Rising debts and deficits

that sort of went away when yields fell

well those debts and deficits only get

worse every single day and for the first

time in our life lifetimes I do believe

they matter and you know getting back to

the

Japanese and sorry to sound hyperbolic

here

but when we had1 18 trillion dollar

dollars of negative yielding bonds

around the world

that was the biggest bubble in the

history of all bubbles in terms of

dollars and we're now seeing the unwind

of that and the higher rates that we've

seen in Japan where the 40-year jgb

yield and the reason why I bring up the

40 year is because it's furthest out

from uh boj manipulation and and

basically zero short-term interest rates

so it's the most U Market driven area of

that yield curve that yields the highest

level since

2011 and where what where jgb yields go

helps to determine where German Boon

yields go helps to determine where US

Treasury yields go and we're all in this

together and with respect to the Yen

Japan is the largest foreign holder of

us treasuries uh they own less than they

did at the peak but they're still the

largest holder so where the Yen goes

directly influences their appetite for

us treasuries Japan Imports about 95% of

their energy needs maybe it's a little

less based on the last um uh data

because uh they're beginning to turn on

nuclear plants but they basically import

a majority and when the Yen gets weaker

that gets more expensive for them well

that what helps to finance those energy

needs is they sell us treasuries and

they bring that money back uh so I think

that that interrelationship between the

rise in oil prices the weakness in the

end the rise and long-term interest

rates are very intertwined it's not the

only reason why we're seeing these moves

because we also have interest rate

differentials between the Yen and the

dollar course and the do and oil prices

are still moving with geopolitical

reasons and so but it is it is a factor

that flows through so when people wonder

like who cares about the yen well you

should care very much about the Yen

because it flows into US markets us

interest rates very

directly exactly and you know along the

the same uh thought pattern here um

Bloomberg had a good article uh Peter um

basically uh you know the headline pows

us rates uh warning means headaches for

the rest of the

world um Federal Reserve chair Geral

Powell is making life tougher the

article says for his peers around the

world is the prospect of higher for

longer us interest rates reduces room

for easier policy

elsewhere so that's actually a a an

interesting question uh is whether

called the ECB the Boe and some others

are they goingon to sort of wait for the

FED to to lead them in terms of

Direction rates or will they go their

own way because interestingly enough

Powell spoke

this week and purposely said higher for

longer we're not looking to cut rates

anytime soon the same day that Christine

lagard was interviewed on CNBC saying uh

you know we're going to go our own way

and we're g to be cutting rates in June

she basically told you that and other

colleagues of hers have told us that too

so now whether that that's the right

thing to do and whether that works out

for her uh remains to be seen because

the commodity price inflation we're

seeing in the US she's seeing it there

so it's not like she's seeing that much

different of an inflationary Dynamic but

what she's dealing with is no growth in

the Euro zone so she's in a more

difficult stagflationary position right

than than J Powell has here J Powell at

least has some growth that's going along

with the inflation which gives him more

flexibility to stay tight lard is really

being pulled in a few different

directions of the real slow growth both

European economies that want her to cut

like Italy and at the same time having

to acknowledge well their mandate is

solely inflation not

growth yeah it's it will be very

interesting to see how this will play

out and how these chest pieces moves and

we'll wrap I guess you know offline we

were talking with your your bigger

concern here of how uh you know looking

at the environment global environment

how you know we have some places growing

drastically like India and others

slowing down like China like I guess to

your point we have this mixed bag of

global growth right now and and even

just within the US you have the high

income consumer that's traveling going

out for dinner going to concert sporting

events living life and then the lower

end consumer that it can only afford

what they need there is no excess money

for what they want and we've heard that

time and again from a lot of different

retailers you have the housing market

where the pace of existing home sales is

near 30-year lows but home builds are

doing better because we need more Supply

you have manufacturing that's in a

recession but service soci side of the

economy that's doing better uh you have

government spending that's goosing one

part of the economy but causing

inflation and hurting other parts of the

economy so um there people can't talk in

homogeneous terms like oh the economy

strong or it's not there there are a lot

of moving Parts here it's a very very

much a mixed bag as is as as you stated

as is the global economy as

well I think that's really really well

said uh Peter I guess just you know

final thoughts for the the folks at home

I always like to empower people and give

them some tools to walk away with I mean

uh like you said it's a mixed bag even

just here in the US Alone um what should

one be be doing here

so I know it's a loaded question no well

we we started out talking about our

patience you having the extra patience

because we longer

kids but I I think that can apply to

investors generally that the risk-free

starting rate is

5% that gives you a lot of optionality

in terms of being patient where for the

first time in more than 15 years you get

actually generously to be patient and

that be price sensitive don't just chase

the market because it's going up

thinking you're missing something

because I think this year next year

there are going to be a lot of

presentable investment situations that

those that have cash uh will be able to

take advantage of whether it's in public

Securities in stocks and bonds or it's

in commercial real estate because

somebody's distressed because their 3%

loan is repricing at 8 and they need

some Equity uh there are going to be a

lot of interesting situations here uh

for those that are

patient so be liquid be nimble yes

that's not to say don't invest we're

we're very bullish on commodity stocks

as we talked about in a variety of

different uh Commodities areas uh and

their pockets of cheap stuff out there

so there's always something to buy but

don't be afraid to have a little bit of

extra cash don't feel like it's burning

a hole in your pocket

well said uh Peter I always love getting

your thoughts uh the folks um can get

more of you from your book report I love

the name play on words on your last name

they they can check me out on

substack and uh if they're interested in

Wealth Management Services they can

check out our website ble.com and reach

out there you go uh Peter thank you so

much we will see you soon it's great to

see you absolutely

and thank you all for watching we'll

have more great content coming your way

so be sure to keep watching the Danel

koni show here on itm Trading

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