John Rubino – Short Term Gains On The Recent Relief Rally In The Face Of Longer Term Economic Pain
John Rubino, Founder of The Dollar Collapse website, joins us to review the oversold bounce we saw in most markets for the prior month, the global economic health, and what this may mean for Fed policy and world currencies. This is wide ranging discussion touching upon fiscal blowouts in spending, central banking policy errors, and geopolitical missteps regarding trade, resources, and energy policies.
We start off looking at the technically oversold bounce in general equities and commodities, and the ingrained trading mentality to always buy the dip, figuring the Fed will bail out any serious market routes. This creates the environment where the Fed can keep hiking rates more aggressively for a longer duration, than if the markets had a more steep capitulation move lower, and just moves the correction further out. Next we discuss the growing challenge central banks will face as they continue hiking interest rates higher while holding the largest amounts of debt in memory, making the rolling over of variable debt at much higher rates eventually quite problematic.
We then focus on the strong US dollar over the last year, in relation to other troubled fiat currencies, but also point out the actual purchasing power of the dollar continues to be eroded by 8-9% inflation. A big reason for the fleeing to the safe haven of the dollar, is the economic weakness further hurt by poor global energy policies leading to problems in Europe and Asia – in particular, Germany and Japan as a models of policies and growth that hasn’t worked out.
We wrap up with potential paths forward and investing opportunities in the energy space, like the return to fossil fuels and nuclear power we’ve seen in focus lately. There is also the realization that some drastic changes will need to be implemented to even source the raw materials needed to fund the global agendas around growth and renewable energy we hear so often about in the mainstream narrative.