Lyn Alden and Michael Oliver return as guests on this week’s program.
Michael sees a layered but significant equity bear market. In the near term, US Treasuries and gold will benefit. But as deficits surge, inflation rises forcing the Fed to fund nearly all of the Treasury needs. Confidence will be lost in the Fed and Treasuries will join equities and other asset classes into a bear market. Michael sees prospects for a 1970s-style stagflation when double-digit inflation was joined by very high unemployment rates.
Lyn just wrote a paper titled "The Ultimate Guide to Inflation" in which she describes various forms of inflation. What does she think of Michael's stagflation view or Alasdair Macleod’s view of a parallel between the Mississippi Bubble disaster and the Fed's need to print money to buy Treasuries in order to maintain a false sense of Treasury market value? If she agrees with neither view, what does she think is the most likely scenario we face in this increasingly unstable market environment? As usual, Michael also gives an update on what his Momentum Structural Analysis is telling him about the markets.
