The Real Reason The Fed's Rate Cut Was A Mistake | Bill Fleckenstein
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- Опубликовано: 28 сен 2024
- Bill Fleckenstein, president and founder of Fleckenstein Capital, returns to The Julia La Roche Show for episode 197.
✨ This episode is sponsored by Public.com. Lock in your 6.6% yield: public.com/julia ✨
Paid endorsement for Public Investing, Inc. Not investment advice. All investing involves the risk of loss, including loss of principal. Brokerage services for US Listed and registered securities, options and Bonds in a self-directed brokerage account are offered by Public Investing. ETFs, options and Bonds are available to US members only.
*A Bond Account is a self-directed brokerage account with Public Investing, member FINRA/SIPC. Deposits into this account are used to purchase 10 fractional investment-grade and high-yield bonds. The 6.6% yield is the average annualized yield to maturity (YTM) across all ten bonds in the Bond Account, before fees, as of 9/18/2024. A bond’s yield is a function of its market price, which can fluctuate, and a bond’s YTM is “locked in” when the bond is purchased. Your yield at time of purchase may be different from the yield shown here. The “locked in” YTM is not guaranteed; you may receive less than the YTM of the bonds in the Bond Account if you sell any of the bonds before maturity, or if the issuer calls or defaults on the bond. While corporate bond yields should fall in reaction to a Federal Reserve rate cut, we cannot know whether that will be true of the bonds in the Bond Account, how quickly bond yields will respond, or how much they will decline. Public Investing charges a markup on each bond trade. Bond Accounts are not recommendations of individual bonds or default allocations. The bonds in the Bond Account have not been selected based on your needs or risk profile. Fractional Bonds also carry risks including liquidity risk, interest rate risk, credit risk, inflation risk, and potential tax liabilities. Read more about the risks associated with fixed income and fractional bonds and learn more about the Bond Account at public.com/dis....
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00:12 Welcome and introduction
00:53 Macro view and Fed policy
06:48 Understanding inflation and central bank policies
11:21 The bond market's role in economic stability
18:01 Bubbles and market psychology
21:45 Current economic health and stagflation outlook
26:46 The Fed's credibility crisis
31:53 Implications of the upcoming election
34:13 Gold and silver investment perspectives
35:55 Japanese yen carry trade unwind
37:14 US dollar outlook
39:41 Thesis development in investing
42:00 The U.S. debt situation and future outlook
44:03 Parting thoughts on developing investment theses
46:07 Book recommendations and where to find Bill's work
#macro #gold #investing
✨ This episode is sponsored by Public.com. Lock in your 6.6% yield: public.com/julia ✨
Paid endorsement for Public Investing, Inc. Not investment advice. All investing involves the risk of loss, including loss of principal. Brokerage services for US Listed and registered securities, options and Bonds in a self-directed brokerage account are offered by Public Investing. ETFs, options and Bonds are available to US members only.
*A Bond Account is a self-directed brokerage account with Public Investing, member FINRA/SIPC. Deposits into this account are used to purchase 10 fractional investment-grade and high-yield bonds. The 6.6% yield is the average annualized yield to maturity (YTM) across all ten bonds in the Bond Account, before fees, as of 9/18/2024. A bond’s yield is a function of its market price, which can fluctuate, and a bond’s YTM is “locked in” when the bond is purchased. Your yield at time of purchase may be different from the yield shown here. The “locked in” YTM is not guaranteed; you may receive less than the YTM of the bonds in the Bond Account if you sell any of the bonds before maturity, or if the issuer calls or defaults on the bond. While corporate bond yields should fall in reaction to a Federal Reserve rate cut, we cannot know whether that will be true of the bonds in the Bond Account, how quickly bond yields will respond, or how much they will decline. Public Investing charges a markup on each bond trade. Bond Accounts are not recommendations of individual bonds or default allocations. The bonds in the Bond Account have not been selected based on your needs or risk profile. Fractional Bonds also carry risks including liquidity risk, interest rate risk, credit risk, inflation risk, and potential tax liabilities. Read more about the risks associated with fixed income and fractional bonds and learn more about the Bond Account at public.com/disclosures/bond-account.
The tightening was too aggressive to begin with. The rate hikes have broken an already fragile economy that would have worked out the inflation in the free market. The Fed chose to spark inflation buy napalming the public with stimulus right when the global supply chain was broken and production of good and service basically did not exist during Covid. It was gasoline on the perfect firestorm. Then, instead of letting the inflation work itself out… we hiked rates thousands of times higher than they were in the most massive pounding the Fed has ever given an economy. They chose to break the inflation they created over the backs of the middle class. Now they’re providing a little relief and everyone is acting like it’s going to bring back Covid level inflation and end the world..... Anyone feeling the impact of these economic shifts should consider Crypto long-term trading strategies to protect their assets. My advice to anyone feeling the heat in this inflation, just trade long term more than ever, I have made over 720k from day trading with Seren Wintersun in few weeks, this is one of the best medium to backup your assets incase it goes bearish….
SHE IS ON TELE GRAM.
@Serenwintersun
In a field as rapidly evolving as cryptocurrency, staying updated is crucial. Seren’s continual research and adaptation to the latest market changes have been instrumental in helping me make informed decisions.
Nice, I was just hodling before I found Wintersun. In my opinion she is the very best out there.
The same high-yield potential exists in both bullish and bearish situations; what matters is how information and technique are used. Not neglecting professional advice.
The Fed's talk of interest rate cut leaves me pondering what stocks to buy now and when do I sell? I'm unsure how to properly allocate my money to achieve an optimal portfolio in this present economy, my goal is $3m for retirement.
navigating market volatility can be challenging, it might be beneficial consulting with an advisor to provide personalized insights based on your specific situation and financial position
No doubt, getting proper financial advice is invaluable, my portfolio is well-matched for every season of the market and just yielded 120% from early last year. I and my advisor are working on a 7 figure ballpark goal, tho this could take another year.
I’ve been considering getting one, but haven't been proactive about it. Can you recommend your advisor? I could really use some assistance.
Melissa Elise Robinson is the licensed advisor I use. Just research the name. You’ll find necessary details to work with to set up an appointment.
Thank you for the recommendation. I'll send her an email and I hope I'm able to connect with her.
With the Fed cutting interest rates by 50 bps, what do you think will happen to the stock market? My portfolio has performed exceptionally well this year, but I am concerned about the possibility of a market crash and losing my gains.
rate cut will create new buying opportunity, but given the current market uncertainty, have you considered consulting a FA? they can provide personalized strategies to help protect your investments and maximize returns
rate cut will create new buying opportunity, but given the current market uncertainty, have you considered consulting a financial advisor? they can provide personalized strategies to help protect your investments and maximize returns
Over $6 trillion is in money markets earning high interest, but Fed rate cuts will push this money into equities. A crash/recession can be discussed after that shift. My advisor has helped me understand the market, gaining 25% this year alone under her guidance.
i’ve managed my investment portfolio for 3 years. initially, it performed well, but recently, it has been losing money. I need to find a way to start seeing growth again, how can i reach your advisir please?
I'm cautious about giving specific recommendations since this is an online forum and everyone situation is unique, but I've worked with ''Katherine Nance Dietz'' for several years now and highly recommend her. Look her up to see if she meets your criteria.
Been around mkts a few yrs longer than Bill and have always found him to be a realistic, worthwhile listen ... Ted Williams batted 0.344.
Bill! Where’s the rest of The Beach Boys?
WELL SAID BILL
Great job. Best Bill Fleckenstein interview ever.
I always tune in to the great Bill Fleckenstein, whatever macro show he happens to be on. He doesn't do a lot of interviews, so kudos to you, Julia!
I believe the Bond market is the truth BUT the Gold market is the absolute truth.
Always like listening to Bill 😊
Excellent episode
Bill has been a perma bear for years and he's consistently wrong on the market for years as well. I really appreciate his opinion so I can do exactly the opposite. Thank you
Welcome back, Bill!
That it’s lasted this long (post 1971) is surprising. The Fed has used every trick in their book. The Jig is up!
Bill is the best smart guy and knows how corrupt the system really is.
Great pod, thanks for creating this!
Loved your guest today❤
People who say the Fed doesn't know what they are doing are dead wrong. There is a clear understanding within DC of what is occurring. All economic systems deteriate over time, and all the things we look at and complain about are expected, especially after the pinnacle of a cycle. You just need to identify where we stand within the cycle and adjust investments. No policy adjustments can alter what will inevitably happen. More debasement until collapse.
Love Bill. Julia’s not bad either😉
I once met at Fitzwilliam college Cambridge in the 1980's a guy who knew John Maynard Keynes - Quentin Bell, ( Virginia Woolfe's nephew ). He passed away since.
The herd instinct. Always good to be wary.
What a great guest - I learned a lot, thanks for the content.
Great guest and interviewer.
I really wish you would ask some of these guests abour BRICS
Happy to! Shoot me an email at julia@julialaroche.com w/ questions + guest recommendations.
BRICKS is NOTHING. Get over your obsession about USD doomsday lol. USD is going no where. Every govt is printing, including US govt.
I was surprised they went that route too. Lowering rates doesn’t seem like the right call when inflation is still high. It's just pushing people toward riskier investments trying to chase returns, and that’s never good for the long-term
Fleck is still the man!
I’m sorry, Fleck has been singing the same tune since I subscribed to his service in the 1990’s. The economy and equites are up multiples of where he thought they would go, all those years ago, and the Fed is even more friendly toward loose money than back then. Who’d have thought we’d have ZIRP for over a decade and this Fed balance sheet that we have gotten over the intervening time, yet enjoy only 4% unemployment and sub-3% inflation in 2024!? Fleck has never adjusted his thinking. The most stubborn pundit and critic of financial markets and monetary/fiscal policy that I’ve ever heard.
4% unemployment and sub 3% inflation, laughable! Many things in this world cost 3-4 what they used to and everything is at least 50% higher.
Excellent interview............. Bill is giving real practical trading advice............
The price level (accumulation of inflation) may never cone down.
Bill has turned into a whining dude
Investing in yourself is key...not an unstable commodity like gold or silver..skills..knowledge..experience are priceless 😮
Inflation is interesting.
IF it's Food/Gas/Electricity - the kind that everyone pays more for - Everyone complains.
IF it's Asset Inflation - stocks/real estate/ gold/ BitCoin - then if you already own it - you Love it. You're making money!!
The poorer get screwed in both.
The richer gets screwed in the first - but benefits from the second - so come out better.
So Inflation is selective to whom gets screwed.
Bill should enumerate those great history books 🤔.
It was a tale of two cities….a low thundering could be sensed.
After watching Bill the last time you had him on, I took his advice and bought gold (miners). As of today, my positions are up 50%!! Too bad I didn't buy more at that time, and now I have cold feet about buying more because it has gone up so much so quickly.
I like Fleckenstein a lot. He seems so impassioned about the destructive impact of the Fed and their reckless policies, which I agree with. However, where is his understanding of the macro to help shape and model the direction of economies and ultimately markets? Does he not see the rising unemployment rate as a concern? Claudia Sahm's rule or Mckelvey's rule have both been triggered, suggesting unemployment by historical record will continue to accelerate. If he is a student of history, how does this not factor into his thinking? It seems important, yet his fixation is that inflation will persist so there really is no reason for the Fed to cut and that long rates will continue to push higher. Is he factoring the impact of China's economy slowing markedly and the collapsing price of iron ore / steel and the deflationary impact that will have on the global economy? They are also dumping cheap everything on the world on a grand scale. Just go and talk to anyone who lives/works in the region of South East Asia at the moment. Then we can look at Europe who are mired in a shallow recession but what is likely worsening to a deep recession as industrial production in places like Germany slows to levels never seen before. These will all impact the US economy and inflation more broadly, yet he seems convinced inflation is going higher. I just wonder if he is so anti Fed that he has become so fixated on the idea that any decision they make is wrong, rather than perhaps considering or asking the question "what are they seeing that I'm not". For all their flaws, they still are run by Fed members who spread across America and are speaking to different regions and business owners in those regions. It is possible that what they are hearing - and this is certainly true of the many surveys that are coming back at the moment - that the US economy is slowing quickly and the outlook is quite negative. Just my 2 cents..
Is it just me, or does it seem like the Fed is more concerned with applause than actually fixing the economy? 🤔
Btc??
4 mins of losing your audience got me
Is he still in gold stocks?
Yes
Alamos Agnico Wesdome
This clown has underperformed the market forever.but comes on these programs and acts like he is some kind of guru.
Laughed
It’s about losing less when the SHTF that is way more important…
I love listening to Bill. He is smart and articulate. However, keep in mind that he has been a "perma bear" for decades. I agree with everything he has put forth. However, I think his views can be viewed as fear mongering. Stay the course and make sure your allocation to stocks is appropriate for your risk tolerance. Also, I think value investing will do well in the years ahead. Consider this strategy for your equity holdings.
We have a diversity of viewpoints on the channel. My next two guests are bulls 😊
Get better guest 🤦🏾♂️
Great guest...thanks Julia.
Great show Julia!
He’s right , the prices didn’t come down , there was no victory by the fed .
There can be if they allowed deflation long enough. But thatll never happen.
Great interview. Your approach and style are very engaging. Well done!
you had better be careful Julia.......you are making Bill ....Blush...lol.......if i had such a pretty girl giving me all those compliments......i would be Blushing tooo..........lol
I keep hearing "It's different this time.". Several RUclipsrs and media keep repeating this theme.
The right thing was to not raise rates when the inflation was 90% shortages and higher oil prices. It was the correct to cut rates because unemployment is starting to accelerate rapidly. BTW, It actually is starting tomorrow.
Bill's the best - what a class act, humble and smart. Appreciate him & the thoughtful questions from Julia.
Nothing beats experience and intelligence thank you both
To much Government spending, combined with unfunded liabilities, mix that with 1 Trillion dollar interest payments. It's not going to end well. Stop loaning money to people who can't afford to pay it back would be a great place to start, including the Government.
i really like the part about human psychology. its really something most people don't pay any attention about. human psychology never changes, it just shows up and the face of it looks different.
i really like the part about human psychology. its really something most people don't pay any attention about. human psychology never changes, it just shows up and the face of it looks different.
Bill is great. You should have him on more regularly.
Julia does an exceptional job with her interviews. This is yet another one.
Lend a guy 10’you may get paid back
Lend 100 they doge you
1000 they never answer phone
35 trillion your never getting paid
No. "You are not only providing the basis for a bust of the asset price bubble" - but you are providing the basis for allowing new credit - and based on this credit keep on doing consumption.
→ stop doing it, and the economy will enter a downward spiral with a "not so nice" ending ...
Making loans and using overvalued collateral in the underwriting decision has consequences. Go figure.
The rate cut was to keep the federal government afloat. Can't afford interest expense.
I'm not sure he did anything for 45 minutes besides state the obvious. Lots of cold takes.
Always love Fleck, and Julia seems to ask the right questions to get the most out of him. Nice work!
Everything broke in 2008 they have just been keeping the system going since then. Things are going to get way way worse…
The US bond market doesn't need to be great. It just needs to be better than all the other sovereign bonds, a.k.a, the cleanest shirt in the laundry.
I ❤ Fleck! If only he would accept that he and Grant are true Bitcoiners already 😂
Bill is totally the Fonz of financial markets but with way more brainz!
Until you run a business 👍👍👍👍👍
I don’t thumbs up when you got scam comments at the top of your page
i liked him on happy days. haaaaay
Great interview.
👍🏻💛
If this happens, the FED will just monetize the debt and buy all of the treasuries.
fed said it is doing QT...he talks about it...although he pointed out it was watered down...
@@MeMe-lm9bm I wonder if they buy up Fracker's Bonds?
That was something that messed up the sales of Frakkin Bonds
last time OPEC+ messed with prices.
What do you think they do now?!
@@Stone881 The illusion of support for the US Dollar,
seems to have a difficult time presenting any positive figures.
They will Hand Trump a Failed Economy to repair.
Just like LBJ handing the Nixon Administration the Bill for NAM.....
The cost of Colonial Conflicts does produce enormous debt.
What Economic Miracle will the next Administration come up with?
I like bill and Luke gromen view .
Bill : they shouldn’t lower rates due to the state of the economy right now .
Luke : doesn’t matter , the rates are going down to help fiscal deficit of the 🇺🇸.
Julia, thanks for the work and asking good questions, but he is not able to explain your questions in a plausible way! Your best guest so far was Jim Rickards. Please bring him back again. :)
The Fed and their interest rate policies are a scary bedtime story. When ST rates are lowered to 1% or worse, it makes borrowing free. Like a drunken brawl. In 1999 the P/E radios on Dot Com stocks were triple digits just months after their IPOs. I'm interested to see how they slow the merry go round this time. The conflict in the mideast continues, with US there for backup.
He did a good job on this socialism vs capitalism lets all vote
Fed Funds rate should shadow nominal GDP.
Ironic they put in a “public bond account ad”