Rapid Asset Price Inflation: When the Economic Engine Runs Hot (w/ Raoul Pal and Larry McDonald)
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- Опубликовано: 23 сен 2020
- What happens when the monetary and fiscal engines run too hot? This is the question that Larry McDonald, New York Times bestselling author and founder of the Bear Traps Report, explores with Real Vision CEO, Raoul Pal. McDonald and Pal start by analyzing the valuations of high-flying tech stocks and discuss whether they will continue to soar or make an early landing. The pair then examine in detail the remarkable price action seen over the past few months in commodities such as precious metals, lumber, and natural gas. McDonald compiles this appreciation as evidence to explore his thesis that excessive stimulus could serve as a "cobra effect" to augur a hyperinflationary economic collapse. Filmed on August 18, 2020. For more of Larry McDonald's charts, click here: rvtv.io/3hwFEv3. Find more information about Larry McDonald's work at www.thebeartrapsreport.com.
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Rapid Asset Price Inflation: When the Economic Engine Runs Hot (w/ Raoul Pal and Larry McDonald)
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Amazing guest!
nothing is more interesting than "fundamentals" that don't seem to work
Ll
Yes things are changing on the back of a scam. Covid was never that dangerous.
Need a quick explanation as to what that creepy doll is about in the opening
Ya...what's that about??
Can't unsee it LOL
Seeker of the way, the truth, and the Life - are masons into creepy dolls?
Perhaps they are ridiculing us and see us all as puppets. After all, it looks like a ventriloquist doll/puppet.
anon2k10 - as a lifeless, impassive, creepy shell of an object? - yeah, that’s a about right
I read his book, A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers. Great book, he has a wealth of knowledge and experience.
this man 👌🙏 i really wish i could hear a conversation between this guy and andrew yang
Buy gold 🥇 and silver 🥈 folks ✌️
Buy Gold and Bitcoin and Popcorns, and forget what the “market” says what they are worth. Who cares, you are out then. Enjoy the popcorns.
Agreed. Only addition use BTC profits to purchase seat on SpaceX mission to Mars
@@kpmoresco Why not saturn ;) as much probable as btc mooning this or next year...
Great interview and insights...thanks guys...cheers
Thank you! Very insighful conversation.
It is a challenge sometimes with how rapidly our market changes, that in order to digest valuable information in a timely manner, 4 weeks is a little long to upload and keep it viable. I mean no disrespect with this comment as I am trying to consume as much valuable information as possible from those with incredible market knowledge. Thank you.
Though it's also kind of interesting to see people talk about these things a month ago, and see how things have played out since then.
These are put up to inform people, but also very much as a promotion. You are welcome to subscribe and view the videos a month earlier.
@@dixonpinfold2582 already did subscribe to the membership as I figured that was the case. Makes perfect sense. Thank you.
Excellent discussion. Thank you.
I’ve watched a few of these, first time I’ve heard standard deviations mentioned.
I love that cobra story 😂🤣😅👍👍👍
I LOVE REAL VISION !! A MEGA WEALTH OF SUPERIOR INFORMATION !!! 👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍👍
Some tobacco stocks have reasonable balance sheets and great P/L accounts but very low share prices.
Because the growth rates for these companies is rapidly shrinking year over year.
Fascinating discussion, we'll see shortly which theories are correct
The money line, " The debt is just so big now...".
hands flapping for almost an hour
sound quality is poor from guest.
What are coles ?
Tick Tock: That's the sound of our economy continuing to deflate because cash just remains in low velocity bank accounts and doesn't actually bid up the price of real goods and services.
@Kevin Schmidt The Fed CAN'T fix the economy. That's the point. Everything that matters in the economy comes down to the creation and distribution of real goods and services, and the governments role in that comes down to fiscal policy: how they spend money into the economy, and for what services, and how they tax it back out of the economy. The only thing that the Fed can do is pay back treasuries, i.e. repay money that was already spent into it, and is now just sitting in the bank accruing interest.
@Kevin Schmidt To the degree that they can buy securities, that is basically just taking stored money out of the vault and giving it back to the person who put it in the vault. And that is an extremely limited tool for inducing economic activity because an extremely limited spectrum of people are who own securities: i.e. mostly rich people, who are at least as likely to just use that money to buy new securities. This is what actually happened during the pandemic and is why we have deflation: because a whole bunch of money just went from security to reserves and then back to securities again, plus even more money went into securities out of fear of the uncertainty. Take a look at M2 vs. M3: M2 plummeted but M3 skyrocketed. Why? Because M3 includes those securities while M2 does not. Therefore, we can see that while The Central Bank can purchase securities, that doesn't actually mean that the money that people got back for those securities actually went back into the economy, because unless The Treasury stops selling treasury bonds, that is exactly what those people are going to purchase: new securities. I mean, just think about it for a second: why would people buy those securities in the first place? They have returned below inflation for a while now, maybe slightly above inflation for 30 year bonds, but they are ultimately a low risk, low reward investment for people looking for a low risk, low reward investment. Unless they changed their investment strategy to become more high risk, why wouldn't they just throw them right back into securities? And why would the investment strategy of most people suddenly become more high risk during a time where it seems like taking such risks are more prone to failure than they were before? They wouldn't, which is why the macro trends played out exactly as they did: conservative investments increased, and the supply of the treasuries which denote such conservative investments increased along with it.
@Kevin Schmidt And my point is that, really, they can't in any where near what they can do fiscally. I am curious as to what kind of debt they can buy with the mandate that they have, because they are ultimately limited by the supply of treasuries they hold in regards to how much money they can "print". The difference between The Central Bank and The Legislature is that The Central Bank can only increase liquidity in relation to the supply of treasuries they have. They can't actually create reserves out of nothing without the legislature ordering it to, they can't pick specific people to give them back to, and they aren't in charge of taking reserves back to be decommissioned via taxation. Only the legislature has the power to induce such precise fiscal flows, all that The Fed can do is say: "Here's your money back, pretty please spend it into the economy." The people who get their money back don't actually have to spend it back into the economy.
Very natural and honest discussion
Why is this video posted after a month? Isn't it of better value if we had these information back in August?
its because you have paying subscribers and non paying subscribers. You, my friend, are the later, thats why 😂
the play is commodities, then short the bonds, then buy the bonds.
Or buy gold
Yes
I prefer to have Tech as opposed to banks and industry ... and Tech is a secular trend, the future's Tech
Great a reversal brought on by more Sports -- just what America needs.
If markets dip what is stopping the US from getting into deals with foreign countries to do money swaps to purchase US equities with behind the scene agreements with em? That way if markets dip we always have a catalyst to prop markets up so we only end up with corrections and a rising dollar
Gold?
4 standard deviations? 3 standard deviations takes one out 98% or 99% of the possibilities- or probabilities? WOW!
Listening to all this 1 thing keeps popping into my mind it's the most environmentally neutral of all fuels and is relatively safe & has many uses. Very disruptive! Gold price looks like it will rise dramatically too.
Wasn't it yesterday your channel was trying to convince us that stimulus is deflationary?
They show you a bunch of different views so that you can make up your own mind. I’m glad that they have people like Brent Johnson on their show
They have diametrically opposed viewpoints on RV, Raoul has his view but it's biased because he is invested. You don't get an objective house view here. Sometimes, adding more noise to your research muddle the signals.
Also, I think you're referring to Q/E as being deflationary. Fiscal stimulus can be inflationary at the same time. (Though I'm still trying to wrap my head around all of this, so feel free to correct me.)
They are going to nationalize parts of the banking industry in the next few years thats why buffet got out!!
On the topic of UBI it would have to be fiscal correct? The US Gov would have to sell USTs to banks to get the cash for UBI, however then banks would be taking it out of the dollar pool.
I don’t understand how UBI would be implemented mechanistaclly under the current authority of the fed.
Massive Deflation coming first.
Do you think investors can price this in properly? or do you think the inflation will happen seemingly overnight with another black swan event
Robby Llewellyn price in inflation? Hasn’t that been the last 6 months?
Then afterward massive inflation and Making It Rain
@@JonnyMReck Yes!! The Fed is waaay behind the curve with what is coming. I'm not sure people are ready for that massive deflation followed by Argentine style inflation.
@@robbyllewellyn Deflation will come fairly quickly by next year.
This guy knows his stuff. Warren Buffet buying a gold mine is huge.
So why did the guy exaggerate? $560m is not "almost a billion dollars".
Just like in the 1940s, the fed can peg all rates low by buying all the bonds and peg the whole curve at 1% or whatever they want. If there is inflation due to oil price or whatever, they can do limits on how much oil people can use per person (similar to war rationing). They might do that for environmental goals anyway.
Market cap to GDP is not indicating a market bottom. It suggests a blowoff top. I know, one factor only. There are some others, not going to type them out. Nobody reads these comments.
Few people as consistently wrong as Larry. I bet tech will outperform non-tech in 1 year.
Depends upon Nov 3. Dems love to bite the hand that fed them
@@kpmoresco If the Dems win they will owe tech big time. Dems love to make promises they have no intention of keeping.
14:56 Obviously involved
Interesting talk but this guy advertises himself (mentioning a meeting with C Munger) and his books too much)
irrational exuberance
💪🏻
if prices inflate then tech cash flows will increase too?
Initially, yes but then you have to start thinking about what people value and what people will give up first as the inflation pressure persists. It's usually the big monthly expenses they'll give up to be able to keep eating. Then over time people will try and keep the things of value so like gold, guns and things people are systematically addicted to and would never give up
A 10 P/E is a 10% return for risk. Then there is the exception of high growth potential, which tapers off in correlation with the size of a venture. McDonald is right, throwing around even 22s, 27s etc. as an S&P rule is ludicrous, and not reflecting on the returns vs the risks, whether Goldman promotes it or not. They wish!
1/20PE is a 5% return, and while 5% might be attractive for a low-risk savings account, it does not adequately allow for downside risk on net revenues in a widely politically and economically volatile global economy. If inflation returns, for instance, those net revenues will shrink in value and investors will rush out, demanding at least inflation + 5%. If inflation is 5%, they will demand 10% on low risk.
Where is the Tea Party now that we actually need them? Seems they have turned into the Slumber Party! Where are the Bond Vigilantes? The silence is deafening.
Haha it's obvious what's happening. Corporations are pumping their stock prices and making billions on trades. The train is about to come off of the tracks and a whole bunch of chumps are going to be left standing around holding some very heavy bags, scratching their heads and asking what just happened.
the video keeps skipping on its own
I was totally paying attention, but why is the background to larry on perma blur?
Im calling it, he is a deep fake.
And yes raoul's den is a still shot.
So, thats a creepy doll.
yuotubes ads are illegal
Hydrogen!
And who saw the inflation unicorn? There is no inflation and QE never created any inflation... stimulus also wont do it.
Tricky, tricky... This was *recorded* late August 2020, immediate;y before NDQ happened to tank, so guy was right, yay!! Except the fact this epsiode isn't aired until Now, after tech stocks have already made at least a 50% return back up... So what do we think this NEWS is elling us? "SHort tech, see, we've 'been right!' before!!" But I don't think im buying that... I think we're gonna boom back up :))
HATEMAIL ECONOMICS
The Fed's support through QE is not convincing _domestic_ investors to buy S&P equities, it is convincing the _rest of the world's_ investors to buy US companies, as a haven from their anaemic growth rates and leftist politicians. The global investment community is driving the Dow, not just the US economy. It's not "beliefs" in this case, although it often is.
Another clown who doesn’t get how the economy (monetary) works. The cobra effect will actually strike to the other side, deflation
Free Market doesn't exist. Fed's rules is the Governments rules. Government wants inflation to pay off the debt and line the rich/politicans pockets who own assets. Government is already threatening banks and talking about a digital dollar.
HighlandDroid yea yea except the fed has already admitted it can’t create inflation! Many many times! Why? It can’t create currency.
Fed said what it's doing isn't creating inflation because ultimately what it's doing is lending* to the banks, so the banks can give out loans. Well the banks aren't giving out loans, so if things stopped there that'd be it and deflationists correct... But things aren't stopping there. Powell has been grilled by politicans all week, financials took a huge hit when it "came out" there was some shady paper work about possible mass money laundering, and as mentioned before, Fedcoin was already attempted to be put into the Stimulus package back in August. The sideshow Politicans may be putting on a act for their constituents, but they'll rewrite the Feds rules, pass the stimulus, introduce Fedcoin, and commit all manner of rigging to get the money flowing. This isn't a fair game, the laws and rules are made up. A Central Bank was never put into the constitution, and so Congress can change it anytime it wants. If Deflationists admit mass Inflation takes place after a deflationary crash, just how long would a deflationary crash need to last for? I don't think we'd crash for a week, let alone a month before steps would be taken to "print money".
HighlandDroid dude it would take an act of Congress to pass a bill that allows the fed to truly monetize its balance sheet... so yea it would last longer than a month . And the money laundering is what it is, has been happening for decades, nothing new
Fed coin...digital dollars... whatever...it’s coming after much financial pain
I don't understand economics very well. But I DO understand why death is a lie. I won't explain it to you because you would not understand.
Please buy coals, I’ll buy Lithium battery.
Buy crypto and silver 💯
@Wyatt Steward you are right, I lost about £4,000 before I was referred to Mr Steven, who help me recover my money
Can you trade forex on Robinhood or which what??
Trading can be lucrative. Even professional traders make losses on trades on a day to day basis.
I've been into forex trading for over a year now and I'm earning and making profits through the assistance of my trusted broker Mr Steven lawson he's the reason behind my success in forex trading.
Sometimes people are afraid to invest because of the rate of scam in the business.
I know this is a month old now, but these guys clearly believe Trump is doing a lot better than he is. They are defending Trump and that calls their credibility into question.
💪🏻