S4 E5: The Great Divide; the US Stock Market vs the Economy

In today's podcast, Greg tackles the GLOBE, from Europe to the US to Asia, to show how stagflation is intensifying amid a further tightening in global monetary conditions, and an appreciation in the US Dollar, as Central Banks are lining up to hike official short-term interest rates, and credit conditions are becoming dangerously "tight". Against this backdrop sustained high US price inflation in services, and a fractured labor market has pushed Consumer Confidence to new all-time lows, while Retail Sales growth is dominated by rising Sales (AKA prices) at Gasoline Stations, while spending at Eating and Drinking Establishments and Vehicle Sales are DISINFLATING at an alarming pace.

Yes, CAPEX spending on AI data center build-outs is skyrocketing and output of Semiconductors-Computer Peripheral Equipment SOARS, the FACT is that these three things account for only 16% of GDP, while Consumer Spending and the Service sector still accounts for 71% of GDP. The disconnect between Consumer final demand disinflation, and new all-time high in US stock indexes has NEVER been greater. Moreover, the current long-term momentum driving the US stock market higher is as stretched and extended as it has EVER BEEN. Throw in the fact that Gold is now breaking down versus nearly every paper currency on the planet...

...and the stage is all but set for an all-out "asset price deflation event"!

This IS..."The Great Divide; the Stock Market vs the Economy”

Transcript

Return And The Macro Whiplash

SPEAKER_00 0:00

Hi, I'm Greg Weldon. I'm your host for Money Markets and New Age Investing. And I just looked to see what episode this was. It's season four, episode five. And it really shocked me to see I haven't put out a podcast since April 11th. I'm sorry about that. But you know, with this war and with one day we're gonna wipe the civilization off the face of the planet, and the next day is we're this close to a deal, a negotiated deal, and that goes back and forth every day for the last six weeks. Well, you know where I've been, buried in my cave here, trying to handicap markets that are not handicappable, if that makes any sense. Um, but I can say what's really interesting is the macro backdrop, the micro that's you know, uh continues to expand in terms of stagflation. We've been talking about this now for a couple of months, and how this is now coming above ground and being noticed. And we're gonna kind of go some with some international flavor today, because some of my focus has been, you know, that this is a global issue now, not just what's gonna happen next in the US. This is what's gonna happen next to most of the world outside of Russia, China, and OPEC and the Middle East. All right. I'm gonna start with a piece, and I've done three pieces on Europe recently: April 29th, May 1st, May 21st. The May 1st piece was called it was about stagflation and inflation and deflation in the economy, and it was a German phrase, and uh, so it was pretty interesting. And then May 21st, I did the piece called Hello Ball. And if you remember the Ralph Cramden, if you remember the honeymooners, I'm old enough, you probably have no clue who I'm talking about, but it's a basically a bus driver who has all these get-rich quick schemes, and he basically convinces his uh depot uh boss at the bus depot that he can play golf. So the guy invites him to come play golf as the guest member guest championship at his country club. Well, Ralph doesn't know how to play golf, he's never played golf in his life. So him and his buddy Ed Norton, uh they've always been on his scheme, uh, who works in the sewer, get together and Ed buys a book and he's gonna learn how to play golf in a single night. And the very opening of the book is first thing you do is address the ball. Well, neither one of them knew what the hell that's supposed to mean. So, you know, Norton kind of pushes Ralph on the way. Let me show you, let me show you. You know what I'm saying? It waggles the club, waggles the club a few times, and then tips his hat and goes, hello,

Europe Meets Mila At The Bundesbank

SPEAKER_00 2:15

ball. And Ralph just goes crazy, and it's just one of the funniest scenes of all time, you know, in that kind of slapstick comedy uh dynamic. So, but in this case, it's both funny and yet serious because it's hello Mila. Hello, Mila. And what does that mean? Well, Mila is what the Bundesbank, the German central bank, just introduced in the last couple of weeks with their May monetary report. It was literally last week. Um we're talking a week ago. They introduced Mila. Mila is the monetary intelligent language agent who is going to guide us through the Bundesbank's decision and guide us through the macro forecast that Mila is going to provide for the bank of for the Central Bank of Germany, the Bundesbank, one of the most respected banks, you know, since World War II that's out there. And, you know, still lurking, still doing really good research. And what's interesting about it is when you start to look at what's going on in Europe, yeah, it's problematic. I mean, it really is. I mean, I start with you know the uh EU's commissions consumer survey, all right, and this is updated materials for April published in May, all right. Um, the inflation estimate, and this is coming from the EU uh uh uh commission, but is the ECB's data, all right? The inflation estimate from the fourth quarter now to the first quarter for the first quarter has been lifted by 0.7 while the GDP estimate cut by 0.4. I mean that's stagflation right there. Higher inflation by seven tenths, four basis point or four uh tenths less on GDP. That's 110 base point swing. That's a full 1% from stagflation that's impacting already. All right. Now, uh check this. This is the Bundesbank stuff. I'm sorry. I'm sorry, I'm a little ahead of myself. I'm already on the EU commission. That's next. This is the Bundesbank saying this. This was their estimate for Germany for German growth. It was uh revised up 0.7 for inflation, down 0.4 for GDP, 110 but point swing, base point swing on stakeflation. Then the Bundesbank went on to say, okay, in their money supply report, that both investors and households were showing a high preference for liquidity. The they were substantial additions by uh by households to overnight deposits. People don't feel safe with their money. This is what it's saying, and people want their liquidity, they want to have their money accessible where I can have cash in my hand tomorrow if I need it. Okay, but it goes even further because I also did a report recently on the uh ECB's fourth quarter, uh excuse me, first quarter uh senior bank loan officer survey in Europe. Well, the Bundesbank picked up on this, man. They did some great work to extrapolate on what the ECB had done. Bottom line is this was the Bundesbank's conclusions. EU area banks are further tightening their lending policies. Lending to households fell off markedly. Do you see where we're going with this? It's called a credit crunch. Not only do we have monetary conditions tightening, central banks are gonna hike, the dollar's rising, these are tightened monetary conditions, and you're talking about now we might have a we're having a tightening in credit conditions. I mean, this is a double double-edged machete slicing away at consumer final demand. And this is the kind of thing that causes a potential crisis, all right. What's interesting here is the Bundesbank went on to warn countries, and it used to be the Bundesbank that you know had the same over the ECB because they were the you know the badass uh BMOC, you know, big man on campus. Um, because a lot of these countries now are uh helping thinking about well, we can use fiscal policy to offset some of the higher prices for energy that consumers are feeling. Bundesbank warning countries uh seek seeking to help um should uh must learn from past policies and keep fiscal support temporary. They don't want to blow it out like they did in 2010 that led to the crisis in 2011 where bar markets collapsed. All right, the Bundesbank estimate for EU deficit to GDP has just been lifted for 2027, next year, from 3.1 to 3.6. Deficit, annual deficit from 3.1 to 3.6 of EU GDP. That's a problem because already at 3.1 you're above the high, the hard high limit, which is supposed to be 3%. If you remember ERM and Master Treaty, all the way back in 1990, which I remember like it was yesterday, and all the tenants, all the little things in there, including if a country goes above 3% deficit GDP, they get fined and they have to cut spending. Like it's mandated. So, of course, all of that was done away with in 2008 and 9. That's the problem, and it's never come back. But this is really interesting already in terms of thinking about fiscal policy support for the consumer in the EU. At the same time, the ECB's hiking rates. This is againstflation. It's like we want to hike rates to fight inflation, but we're gonna fiscally support the consumer because of the deflation and consumer final demand. Now, the EU commissions survey, get this one right, consumer expect expectations trend index, inflation expectations trend okay, rose to plus 51 from plus 26 just three months ago, it's more than it's almost doubled. It's a point shy of doubling. But more than that, at plus 51 is the second highest reading in history. And this data goes back to 1985 before there was even a union. And before 1985, it was Germany. Not only that, okay, so the inflation expectation trend from

Euro Area Credit Tightens Fast

SPEAKER_00 8:10

consumers in the EU is the second highest ever, and the time it was only higher, was in 2022. That's it. So on the flip side of that, Dutch inflation would be the stag, and that's the service sector business sentiment. All right, service sector, bulk of the economy, the business sentiment index uh for uh April hit 0.9, 0.9, down from 4.1 in March and is six year low. Outside of the pandemic, which is the only time it's been lower in six years, was 2020. The only beyond that, it's the lowest since 2013. Then we go to the ECB's consumer survey. The ECB's consumer survey for one year ahead of inflation hit four percent up from two and a half percent in March. It was expected to be up 2.9 according to the ECB, but they missed that one because it hit four. It wasn't even supposed to be three, it hit four. The three-year ahead hit three percent, up from two and a half in March. So this is really tough, man. I mean, it really is. And then you start to look at the senior loan officer survey from the ECB. Loans to enterprise and loans to households demand has turned negative. And the loans to enterprise, it's negative for the second quarter in a row. Right? Loans to household demand. The balance fell to minus 20, meaning 20% of banks see lower loan demand from households in the first quarter. That's down from zero. And it's expected to stay at minus 20. I mean, that's massive, massive tilt towards lower demand for household loan for household loans. Then for housing loans for home purchase, all right, there's a heightened rejection rate. So the banks are rejecting more home purchase loans. In Germany, a plus meaning you're rejected. Germany went from zero in the fourth quarter to plus four in the first quarter. Spain from plus ten to plus ten was already tight. France from minus twelve, where they weren't rejecting anybody pretty much to put in for a home loan in France. Now zero. Italy from minus ten to plus one, now tightening in terms of loans being rejected. In terms of tighter lending standards on consumer credit and credit cards for the entire EU area, plus 16 from plus seven and from plus five in the uh uh third quarter of last year. And next year it's expected to go to plus 18 from plus 16. So tightening standards, tightening rejections, tightening everything. And the sign that European banks expect this to continue and get worse is very simple in their non-performing loan expectations. In other words, how many people are going to default on our loans that we have to basically, you know, uh write them off? Non-performing loans, a plus is a is a bad thing. All right. Non-performing loans for businesses in the first quarter hit plus five, up from plus three in the fourth quarter, expected to be plus seven in the second quarter. So they are seeing a rising, a fairly high degree of rising non-performing loans among businesses, among consumers, it's even worse. From minus one in the third quarter of last year, it's at plus seven now. Went from minus one to plus five to plus seven. It's expected to go to plus twelve in the second quarter. This is a total flip-flop from we don't have any non, you know, nothing to note in terms of non-performing loans on consumer loans to now it's a problem potentially emerging. So, what does this all mean for the ECB? And the policy rate's 2.15. Inflation just jumped to 2.6. It was 1.7 in January. It's 90 basis points higher. It is now a full, what is that, 35 basis points above the ECB's policy rate, which means the ECB right now is loose, stimulative. The three-month rate, which is the deposit rate up two is up to 2.86, take the minus 15% uh basis point rather uh spread you normally have over the policy rate, and they're looking for 250 rates. So you could say the uh the market is priced in two hikes uh from the ECB. Well, guess what? That's what the ECB tells us they're expecting two rate hikes in the next 12 months. Monetary conditions will continue to tighten when credit conditions in the EU are already tightening, it's already a credit crunch, and now monetary conditions are tighten more dramatically in the EU. Let's

US Energy Shortfall Keeps Inflation Hot

SPEAKER_00 12:38

talk about the U.S. Inflation is still a problem, and I it really bothers me when you see these people talk about well, you know, gasoline prices will come way down as soon as the war is over, and you know, inflation is pretty good outside of gasoline. It's not true, any of it. First of all, U.S. inventories of both gasoline and particularly crude oil are low, low, low. They have drawn down huge, even though they've released SPR crude. Why is that? Well, yeah, we produce a record amount of crude, 13. let's call it six, seven, eight, depending on the week. Let's call it 13.8 million barrels. Hell, let's call it 14 million barrels, just to get six months, 12 months down the road to where they actually are getting to 14 million. Let's say we produce 14 million barrels a day. Our throughput to refineries, all right, in other words, what we're cracking into gasoline, all right, and diesel fuel and jet fuel and all these other things is over 16 million barrels per day. It's a 2 million barrel, if not two and a half million barrel gap every single day. So you release some SPR, big deal. Guess what? Inventories kept falling. They're below the five-year low, and I'm not going to say they're dangerously low, but they're not that far away from it either. And if this thing does go on, and I have my thoughts on the Iran war, we're really not going to get into too much today because you can't handicap it. It's a lose-lose for Trump right now. He's paying himself in a quarter, he can't get out with getting paid on himself. He needs to get out before it gets too close to the birthday on July 4th or the you know the midterm elections. And it may already be too late. If he goes in too hard, you'll take another whole spike in gasoline prices, and this will crush the consumer, and it could endanger the Republicans' control of the House. So, in all of this, you know, the politics that I hate to get involved with, you know, let's look at the macros. The macros are going to change as soon as the war ends, it's going to be one of these things. Okay, well, let's get back to looking at their macro data. Holy macro! Holy macro, the macro. I mean the macro data stinks. Where where have we been? Well, no one's been digging. All right. You think inflation is low. It ain't. Let me tell you why. Service sector is still 70% of the economy. We're gonna talk more about percentage of the economy as it relates to the stock market, it relates to semiconductors. Because they got some good stuff for you there, man. These numbers are, you know, to use the firm. Here's a phrase they used to use. I haven't used it in a long time. The data is whack, man. It just is whack. It's that simple. All right. CPI. Service sector, CPI, 81 indexes. All right. Not including energy, which is only two things electricity, natural gas. So they don't include those. 81, and those are high. Electricity particularly. Above 6%, I think it was. It was, I'm not sure. It might have dropped. It's gonna go higher. Bottom line for CPI, 81 service sector inflation indexes. 64% over two-thirds, almost two-thirds. Almost two-thirds are above three percent year over year. They're not two something, they're above three. Forty-seven or nearly half are above four percent year over year. And you can see some that are above three are also above four, so the numbers don't add up to 100. But you know what I'm saying. Half are above four percent. A third or thirty-two percent are above five percent year over year, and twenty-one percent, one in five is above six percent year over year. I mean, that's problematic, man. Big time. And the things that are the highest are the things people have to pay for. And this is why not only is it gasoline, it's everything else. Double digit gains. Let's talk double digit gains, household insurance, tenants insurance, garbage and trash collection, auto rental, vehicle service and repair. Uh, and that's two things vehicle service and maintenance, number one, and then vehicle repair, number two, because of course they clip you twice, dental services, delivery and postage, concert, movie, and theater tickets. Ain't that interesting? Um dry cleaning and laundry services, public inner city transportation, and one of the biggest, 13.3 for video streaming, movie rentals. And let me tell you, Memorial Day weekend, I really kind of took it easy because it's been a really busy, busy couple of weeks, and I just watched a whole bunch of movies, and yeah, it's expensive. I actually bought Hail Mary, which I was really excited to watch. I'm a science geek, and frankly, I didn't like it at all. I'm sorry. It was a major disappointment. It really was. At any rate, uh, so what's interesting about this is inflation is still there, and you wouldn't know it. And people are so, you know, kind of just complacent when it comes to the economy and the consumer. And if I hear one more person

Retail Sales Strength Is A Mirage

SPEAKER_00 17:25

on TV tell me that the consumer is is healthy and the labor market is solid, I'm just gonna scream. It's either both of those narratives are completely untrue if you look at the data. Let's take retail sales, along with GDP, they both posted about 4% year over year. And this retail sales number from two weeks ago, above four. Oh my god, you would have thought that this was the second coming, and the stock market is gonna be up you know 30% in the next two weeks. Big problem here. Big, big problem. When you take the dollar change for the month, gas stations accounted for 47% of the rise. And in in in that was in March, and in that was actually in uh that was in April, 47% in April, after 65% in March, people actually drove less because gasoline prices stayed pretty high. And look, and by the way, every time the harbor delivery gasoline price gets to 370, that's when Trump folds and backs down. So just keep that in mind. All right. So the other, so you have gasoline stations 47% of the monthly gain. And the year over year was higher because we had the roll-off of first quarter dynamic in 2025 that related to tariffs and front-loaded demand, and all of a sudden that fell off, and April last year was weak. So the year-over-year number was already skewed to the upside. The growth, the actual dollar growth, was almost it was over half gasoline stations in the last two months. The other thing higher was online sales. So in April, 47% gasoline, 41% online sales. And this does add up to 100 when you take the pluses and minuses. All right. So, but so this bottom line is people stayed home and worked the stuff and paid at the gas station. Because eating and drinking establishment sales up for the last 12 months now hit 57 million on a rolling 12-month basis. It's usually in the billions, two, three, four billion if it's a really good year. All right. This is back-to-back lowest numbers since the pandemic. Since the pandemic. All right. And then not only that, everything else is pretty much flat except automobiles, which are down two months in a row because they're highly negatively correlated to gasoline prices. So what you see here is gasoline prices has completely clouded out, blacked out sales of most everything else on a discretionary basis. And inflation is basically the cause of that. All right. Not

Labor Market Cracks And AI Looms

SPEAKER_00 19:53

only that, the labor market. Solid. Yeah. I I said to somebody, I'm going to give you this line, even though, you know, if you don't want to hear it, cover your ears now. It's as solid as diarrhea. I mean, that's what it is. I'm sorry. All right. Dropouts in the last 12 months have been 2.4 million. New jobs, non-farm, non-farm payroll jobs, 251,000. First of all, that's the second lowest 12-month gain since the pandemic, and one of the lowest 12-month gains in like in history. I mean, it's a real flash point here. It is flashing red big time at only plus only 251,000 over the 12 months, last 12 months. All right. And anytime it gets below a million, it gets to negative every time. And it's seven times going back to the 70s. So this is a problem going forward, and we know what AI is going to do. But let's just stick with the program here where 2.4 million dropouts in the last 12 months against 251,000 newly created jobs in the last 12 months, gives you roughly 2.14, let's call it 2.1 million new unemployed that are not being counted. You add those to the 7.2 million that are counted as unemployed, and you have an unemployment rate of 6.1%. Now the BLS gives us all kinds of indexes like this too. The other one, and I noted this within my GMSR for the last two months in a row, the number of people working part-time for economic reasons is up by close to 470,000. Don't quote me on the exact number, it's around 470. It's just shy of half a million. Over two months. That's a massive number for two months. And that's why the U6 total employment, which includes people part-time for economic reasons, is 8.1. Now, here's the great thing, too. Not great at all. I mean, the great thing about people to say the owner that the labor market is solid. That's the word I hear it's so much solid on TV. The participation rate fell for the fourth month in a row. It's 61.8%. It's below 62. It's never below 62%. In fact, this is the lowest, except for 2020 when the entire global economy was shut down. It's the lowest since. The 1970s. The lowest U.S. labor market participation rate since the 1970s. And when you look at the Fed's SCP, the uh forward staff economic projections, okay, the uh basically say that AI will have no impact because they see the unemployment rate staying between 4.3 and 4.5% through 2028. And yet, what do we just hear? Standard Charter CEO, Goldman Sachs President, HSBC CEO, Jamie Diamond, JP Morgan, and the Morgan Stanley CEO all said in the last two weeks we will be removing employees and replacing them with AI. It's gonna have a big deal. So no wonder consumer confidence is basically the worst it's ever been. It's worse than when it was when Jimmy Carter was president. Come on, if that doesn't give you anecdotal evidence that the consumer is not healthy, the conference board, economic conditions, new all-time low. Current financial situation of households, new new all-time low. Worse than 2009, worse than 87, worse than the 70s. The University of Michigan's even worse. It's a little jaded sometimes, but it's still what it is. I mean, it is what it is. 47.6, it's an all-time low by almost four full percentage points. Okay. The only other time, and it's still all-time low. Below 2008 November, and below the May 1980 low, which was the all-time low at 51.7, it beat that by 3.9 percentage points. And that's the all-time low, it was 1980, when Paul Volcker lifted interest rates to 20% to defeat inflation. And people are feeling that much worse now. Now. And by the way, you want to talk stagflation? That's the University of Michigan consumer sentiment. But the five-year consumer inflation expectation rose to 3.4, the highest since May of 2008. That wasn't a pandemic number. 16-month high, highest non-pandemic number since May of 2008, lowest uh, you know, a new all-time low, but also taking out the November 2008 low. 2008, 2008, boom, on both sides, the stag and deflation. So

AI Spending Props Up Thin Breadth

SPEAKER_00 24:12

let's talk about the stock market because everyone says, oh, the consumer doesn't matter, the economy doesn't matter, this is all about AI and chips and all that's going to do. Well, yeah, it is right now because it's dollar terms. All right, GDP is high because capital spending is built tens and hundreds and you know, ultimately a trillion dollars or more. So, of course, GDP is high when you're adding a trillion dollars. All right. The problem is this is a bit of a one-off. All right. I mean, these you know, this spending is gonna stop. This is not something that's gonna go on for the next three years, not even probably for the next four quarters, all right. And while consumers and services still remember, still still uh make up, 71% of the economy. Capital spending is 14% of the economy. Break it down even further in terms of measuring industrial production, understanding manufacturing is not a driving force, but pretty much everything that is gonna be put in data centers is part of the industrial production report. Okay, especially when it comes to high tech. It's very high tech now skewed data set. And I decided to look at it just to see if I saw what I ended up seeing because I had a suspicion I was gonna see this. And it's right on. I mean, it really is. All right, the two highest gains year over year in industrial production are semiconductors, which are up 9.9% year over year in terms of output. Problem is semiconductors is only 1.5% of the economy, it's one and a half percent of the economy. The second one, up 14.5 year over year in terms of output is computers and peripheral equipment. And that latter part's important because that is the part that interacts with semiconductors. You're talking about this of 14.5%. So these numbers are huge. The spending numbers are huge in dollar terms, so the gain of GDP is huge in dollar terms. But here's the problem computers and peripheral equipment are 0.2% of the economy. It's two-tenths of one percent. Semiconductors is one and a half percent. Between them, they're less than two percent of the economy. When you throw in capital spending, you got 16% of the economy versus 71% for consumers and services. You see why it's so important? The consumer's choking, and the second is war is over, the second AIA data center build out, and the tens and billions of dollars that are gonna be spent on this that are announced seemingly every other week, all right, and the whole semiconductor craze to whatever extent is done, people are gonna look around, look at the economy, and go, like, be the this is, oh, this is what it is, this is what it is. I gotta go back to my theme that I used back in 2008. The Wiley E. Coyote economy. It's the Wiley E. Coyote stock market, I should say. Because at some point, you know, you're gonna have the roadrunner runs off the cliff. He doesn't realize he's run off the cliff yet. He turns and looks at the roadrunner, sitting there with his tongue hanging out, and then he looks down and he goes, uh oh. That's kind of gonna be the stock market at some point in the future. And that's kind of our piece. Now, another

Asia Trade Swings And Gold Warning

SPEAKER_00 27:12

piece I did today, by the way, breaks down the data, the macro data in Asia. All right, and I look at three countries in particular, and I've been trading the country these currencies since the 90s. And one of my biggest plays, you know, in my career through 1998 was being short to Thai bot, made a fortune off being short to Thai bot for Commodity Corp, for Swiss reinsurance, and uh partially for myself. So the piece today was Malaysia, Taiwan, and Thailand, and how they're dealing with this war. And you have numbers where, man, exports are off the off the charts to the upside, imports are off the charts to the upside, and trade balances are either huge or the deficits are huge. And it's really interesting. But all in all, retail sales are strong, the economy's strong, inflation is low relative to the rest of the world, because they have a lot of trade with China for the most part, too. That's a big deal. But the biggest thing about it is these currencies, okay, when you look at the dollar and then you look at these currencies, you look at every other currency on the planet. There's one thing in common among all of them. Right now, gold is breaking down against all of these currencies. This is potentially huge. I don't want to get too excited about this, and I know that a lot of people left gold. I think there's gonna be a huge buying opportunity in gold, but not before there's something potentially bigger to the downside. You have monetary conditions tightening further. You have a potential credit crunch, right? You have central banks gonna raise rates, you have a dollar that's higher. This is all generating intensifying stagflationary pressure. So when you talk about all this and you see gold now declining against all currencies implies there may be a liquidity trap emerging, a liquidity shortage, because you have monetary and credit conditions tightening so much here. Central bank's gonna raise, the dollar's higher, stagflation is intensifying. This could cause an asset price deflation event. So it's kind of a time for safety right now. It really is. And then you wait for the next bunch of series of events, and it could take some time to play out. And frankly, to me, I want to make money the whole time. But for the average investor out there, there's a time for protection and safety and almost some cash, right? I never advise go to all cash because I don't want to screw people up if I'm wrong. Okay, it's that simple, you know. But I feel pretty confident about this in terms of the disconnect, the stock market from the economy, the dynamic around AI and spending that's going to run out, the fact that AI will cripple the labor market that's already crippled, and that the consumer final demand is going to need to be saved. So, what you're waiting for is the Fed for the stock market to reconnect to the economy, which means some kind of significant correction. And by the way, consumer discretionary, new lows against the SP. The retailers, new lows against the SP. Online retailers, P and QI, new lows against the SP. Financials, new lows against the SP. Whole builders, new lows against the SP. Healthcare, new lows against the SP. The only things making new highs against the SP are the semiconductors, infotech, and energy. That's it. So it's a temporary, the clock is ticking, right? The roadrunner is about to run off the cliff. And the degree to which that's when the Fed will have to ride their white horse back into the picture. You're talking about a bond market that probably may have to be saved. At the very least, the consumer's gonna have to be saved. Because you have you can't service the debt, $56 trillion between we the people and household debt, unless you have final demand growth. If we don't have final demand growth, it's you know, stake of night gracie. So the degree to which the Fed will be forced to acquiesce to higher inflation, which I've been saying for over a year now, this is ultimately where we're going. And then that would be the dollar card being played. And that's when you get a bottom in gold and silver. I mean, and that's when you get the next new highs: $10,000 gold, $325 silver. Those are the longer-term targets. And but I think a significant decline could be first. And this could be a total kind of asset price deflation because of all the tightening in monetary conditions against everything else. The only thing saving us right now is the AI data center spend and these companies that have benefited from that. That's it. Show me something else that's really good out there right now, and then stocks will recover ultimately towards the end because the lower dollar, best thing in the world for stocks, and that's why it always recovers because they perpetually depreciating the dollar, which is why we do this to help investors protect and do all these other things and trade these other markets and be long and short, everything if you can in the futures market, best way to do it, or invest in a great CTA. Put many of them out there, uh, as to protect the purchasing power of your wealth, income, and money.

Protection First Then The Next Setup

SPEAKER_00 31:36

All right. Now, for me, uh, if you want to get some copies of the work, happy to send it to you. There's a lot of good charts and any of this stuff. Uh just uh the piece on the Asian gold to be a good one, but it's a lot of Asian macro stuff too. So uh anything I've done in the US, you want to see it, just shoot me an email. Greg Weldon at Weldon Online. G-R-E-G W-E-L-D-O-N. I'm on Weldon at Weldon Live on X, uh, the podcast at money underscore podcast. And the lovely Anna is my producer. She will take good care of you if you contact us through there and get you hooked up with whatever it is you need. Um, and you know, I don't really I don't really like to be gloom and doom, so I'm always trying to things find things positive. And the New York Knickerbockers are in the NBA finals. So right now, I'm pretty ecstatic no matter what the heck is going on around the world.