Latest / Financial Survival Network / Golden Opportunities: Navigating Fed Rate Cuts and China's Metal Buying Spree - Phillip Streible #6062

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Golden Opportunities: Navigating Fed Rate Cuts and China's Metal Buying Spree - Phillip Streible #6062 · Financial Survival Network

• 0:00
  So a lot of people were prepositioning for those fat interest rate cuts. Historically,
• 0:04
  after the first futter reserve cut in an interest after an interest rate hiking
• 0:09
  cycle, gold on average has rallied about six percent within the first thirty days.
• 0:14
  We haven't seen the cut yet, so we haven't seen that kind of
• 0:16
  reaction. A lot of people were front running that, so that's part of
• 0:20
  the reason why we were going up. Also, China was a significant buyer
• 0:24
  of precious models of the gold market, as well as many other central banks.
• 0:29
  You were listening to Carrie let'sa's financial Survival Network where you get valuable information
• 0:34
  you just can't find anywhere else to thrive in today's trying times. You need
• 0:40
  the Financial Survival Network now more than ever. Go to Financial Survivalnetwork dot com
• 0:46
  and get your free newsletter and gift. Financial Survival Network now more than ever.
• 0:56
  And welcome you are listening to the Financial Survival Network. I'm your host,
• 1:02
  Carrie Letz and with us today is Phil Strabo and it's great to have
• 1:07
  you back on. Phil. So, Hey, we've been waiting for these
• 1:11
  FED rate cuts. How much longer are we going to have to wait?
• 1:15
  Here? Phil, Well, we're probably gonna have to wait till the end
• 1:18
  of the year. I mean, it's a far cry from the one hundred
• 1:21
  and fifty basis points of the six inches straight cuts that they were expecting at
• 1:25
  the start. It just appears that the inflation continues to remain sticky in at
• 1:29
  elevated levels, pushing out those expectations. I personally thought that the FED would
• 1:34
  have made a rate cut around the May the June meeting. There still is
• 1:38
  the June meeting coming up right around June twelfth, but just for political reasons,
• 1:44
  they would make that cuts out propel you know, markets a bit higher.
• 1:48
  But if the Fed's going to stick to their guns, they're going to
• 1:51
  wait till September December. So right now cm FED watch tool only has about
• 1:55
  fifty bases points factored in this year. All right, So hey, I
• 2:00
  once read in Baron's they said the FED is doing what it does best,
• 2:04
  which is getting a president reelected. Here. You know, we've seen these
• 2:09
  leaks. We know what Chairman Powell, who his preference is for president.
• 2:17
  You think they're just gonna say damn the torpedoes and full speed ahead. They
• 2:23
  I mean, I'm with you one hundred percent, because Trump already said that
• 2:27
  he would have replaced Powell, and you know, towards the ender, he
• 2:30
  said he should have after the fact. But you know, so Powell does
• 2:35
  have some job security that he's got to work on. They really would need
• 2:38
  to cut rates in order to propel equities to new all time highs. But
• 2:42
  the problem is is that you're fighting this double edged sword with inflation going higher.
• 2:46
  So I'm not sure what they could do because a lot of the things
• 2:50
  are out of their hands. They can't control, like whether with the grains
• 2:53
  or you know, this bird fluid that's affecting meats, or problems in the
• 2:58
  Middle East with right energy prices were natural disasters for that sake, because that
• 3:04
  was a big component of CPI and insurance rising. But yeah, I think
• 3:07
  the Fed's going to try and do what they can do in order to get
• 3:10
  it done. It's just going to be too little, too late, though,
• 3:13
  I think equities will come down before then. Yeah. Hey, so
• 3:17
  so basically it's too little too late, is what you're saying, right one
• 3:22
  hundred and ten percent. I mean it's showing up in the data right now.
• 3:24
  We're already seeing you know, consumer confidence levels come down, GDP come
• 3:29
  down, We're seeing the unemployment rates tick up, We're seeing the jobs numbers.
• 3:32
  They finally disappointed here on the last one. The Fed's going to wait
• 3:36
  for the next one. If they do get a disappointing number, you know,
• 3:39
  before they could make another move. But sixty four percent chance that they
• 3:43
  do cut rates in this September meeting, and only about a ten percent chance
• 3:47
  that they cut in the June meeting. Only ten percent. And June is
• 3:52
  right around the corner here, Phil, Yeah, it's fallen quite a bit.
• 3:54
  They do we next week will have some more inflation data outsp I,
• 4:00
  PPI. I haven't looked at the breakdown of that. I do know that
• 4:03
  the CPI data would have come in a little bit lower, and they can
• 4:06
  get some you know, rents and things like that down, But they can't
• 4:11
  get the rents down until they can get people buying again, you know,
• 4:15
  taking longer term stabs on mortgages, and with a rate of over seven percent,
• 4:19
  that's tough to perceive. So we're just going to have to wait and
• 4:23
  see on that as well. Okay, so this is kind of bad news
• 4:28
  here for the markets. Maybe do you think gold has already anticipated this or
• 4:34
  and that's why it's kind of reached level. It's not going any higher right
• 4:39
  for this moment. What's your take on it. So a lot of people
• 4:42
  were prepositioning for those fat interest rate cuts. Historically, after the first futter
• 4:46
  reserve cut in an interest after an interest rate hiking cycle, gold on average
• 4:51
  has rallied about six percent within the first thirty days. We haven't seen the
• 4:56
  cut gets so we haven't seen that kind of reaction. A lot of people
• 4:59
  were front running that, so that's part of the reason why we were going
• 5:02
  up. Also, China was a significant buyer of precious models of the gold
• 5:08
  market, as well as many other central banks. They just don't like the
• 5:11
  debasement of their own currencies and are trying to divest themselves from other foreign currencies.
• 5:15
  It seems like everybody's always is an enemy right now with someone else,
• 5:19
  so they're trying to just pair off some of those currencies. At the moment,
• 5:24
  it's easy to park it into a hard asset like the gold market,
• 5:27
  but gold really is stuck here between a rock and a hard place. We
• 5:30
  need to get back over twenty three point fifty then I think we can break
• 5:33
  out to the upside. See twenty four hundred, will start talking about all
• 5:38
  time highs again. Key level support twenty three hundred on the downside in about
• 5:43
  twenty two eighty, which is a fifty day moving average below it. Okay,
• 5:46
  so that's gold inflation. What's your take on inflation? You know,
• 5:54
  I always love these headlines, Phil It's said experts surprise by higher than the
• 6:00
  expected inflation number. I mean, who are these experts? Have they got
• 6:03
  their heads and totally in the sand or up their butts? I mean,
• 6:09
  if you're you know, like working in commodities, you know, we trade
• 6:13
  all the different asset classes, everything from your meats, your energy, is
• 6:16
  your your grains and things like that. We even trade softs. Where you
• 6:19
  saw cocoa rech record highs. You bet, like if cocoa prices are going
• 6:24
  up substantially like that, the trickle effect is going to with higher input costs,
• 6:30
  higher labor costs as well. Everyone's demanding more pay here for their work,
• 6:34
  what little work they're doing, it's going to have to be pushed on
• 6:38
  as someone else, and it's always pushed onto the little guy. Those higher
• 6:41
  inflation costs. So you know, just going out to dinner, it seems
• 6:44
  like you can't go anywhere right now for two people without dropping close to a
• 6:47
  one hundred dollars for just a subpar restaurant nowadays. So this inflation is definitely
• 6:53
  it's sticky. It's hanging around, and I think that the FED getting back
• 6:56
  to a two percent level, I think is it's just not going to happen.
• 7:00
  I think that they're gonna have to rave us, you know, raise
• 7:02
  the white flag and lift those you lift the floor up a bit and say
• 7:06
  two and a half percent could be the new you know, inflation target.
• 7:11
  Yeah, so you know, and fast food inflation is even higher. It's
• 7:15
  up seventy three percent. I can't even imagine going. I haven't been to
• 7:19
  McDonald's in forever. But then again, it was the dollar menu back then,
• 7:23
  and if they do still have items on a dollar menu, they probably
• 7:26
  need a microscope in order to see how big, you know, what you're
• 7:29
  getting is. So it just seems like they're sneaking the inflation anywhere they can,
• 7:33
  you know, bottles of pop and things like that. Even a beer
• 7:36
  is a little bit smaller than what it once was. You're not getting those
• 7:40
  twelve ounce curls anymore. It's probably more like eleven point eight or eleven point
• 7:44
  five. Yeah, that's called the shrinkflation. Right there you go, and
• 7:48
  it's shrinking like before our very eyes, and nobody's fulled. Like when you
• 7:55
  get a toilet paper, a roll of toilet paper or bounty and it's like
• 8:00
  literally three three squares on it. You know, Like who they trying to
• 8:05
  fool here? They can't fool anybody, I mean, you know, I
• 8:09
  mean, I guess maybe somebody out there where you know, you're getting you
• 8:13
  know, some of these higher inflation costs may be offset by government assistants,
• 8:18
  so certain people might not be feeling it in other ways. But I know
• 8:22
  for the working middle class, they're really you know, it's really crunching into
• 8:26
  them. I mean a lot of people are just in jobs where it's fixed
• 8:30
  their their their compensation is not tied into inflation whatsoever. And we've already started
• 8:37
  to see wage growth come down just a bit, so they'll start to feel
• 8:39
  it again, especially if we start getting you know, a Middle East conflict
• 8:43
  that builds up, you start getting the higher gasoline, higher crude oil prices.
• 8:48
  That's where people really feel it at the you know, at the pump.
• 8:50
  First. Hey, so what about the election, not about who's going
• 8:56
  to win or whatever, but what is that doing to the economy me Now,
• 9:01
  so generally when you do in an election year, the S and P.
• 9:05
  Five hundred usually bumps around for the first one to two quarters and then
• 9:09
  you see ramp and fiscal spending in order to try and you know, create
• 9:13
  some enthusiasm in the marketing, try and get the equity the's going higher.
• 9:18
  Typically after the first quarter into the second we rally about seven percent on average.
• 9:22
  But it looks like US equities already factored that all in. I believe
• 9:26
  that it's going to be more of a volatile session from here on out.
• 9:31
  You know, we'll see how some of the policies we haven't gotten those breakdowns
• 9:33
  that we toreally historically get where it says, you know, if if ex
• 9:37
  president is elected versus why these are their agendas, these are the different sectors
• 9:43
  that will be impacted the most and benefit from it. So we'll have to
• 9:48
  see what you will have to just you know, wait and see here.
• 9:50
  I mean, we do know who the two candidates are, so we have
• 9:52
  some clarity from there, but it just seems like, you know, these
• 9:58
  candidates are really distracted at the moment then with their own problems going on and
• 10:01
  not really able to express what they're going to do with the economy. Hey,
• 10:07
  So you know, the interesting thing about this election, without getting into
• 10:11
  the political aspects, is you have two people who are actually president running for
• 10:16
  president, so you pretty much know what you got with them. And you
• 10:20
  know, I think the last time it happened was Grover Cleveland in the eighteen
• 10:26
  seventy five election. Correct me if I'm wrong. And you know, it's
• 10:30
  interesting there's so many parallels from that election. Cleveland, major controversy, He's
• 10:37
  from Buffalo, New York. Interestingly enough, so New York presidents. Cleveland
• 10:43
  had hired a stand in person for him to avoid the draft in the Civil
• 10:48
  War. And you know, Trump basically had some kind of medical issue that
• 10:54
  didn't seem too major. There's there's a lot of rise a corruption and a
• 11:01
  lot of instability, and you know, it's it's just interesting to see the
• 11:07
  historic parallels here. It definitely is. I mean, let's go see how
• 11:11
  it plays odd. I mean it's going to be it's gonna be pretty uh,
• 11:16
  pretty wild once we get closer to those times. I mean, Trump's
• 11:20
  got some work, He's got to do right now with these you know,
• 11:24
  with these trials and things like that. But if he can get that behind
• 11:26
  him, even though it just seems like they're going to drag this out as
• 11:30
  long as possible to him from uh, you know, going out and meeting
• 11:33
  with with folks and and you know, rally and yeah, all in the
• 11:37
  show trials, you mean you talk about yeah, hey, look a little
• 11:43
  later the Trotsky, you know, just the it's just crazy. You never
• 11:48
  thought I'd love to see it, But hey, we don't want to get
• 11:52
  into politics here. This is a family show after all. So looking down
• 11:56
  the road, what else? What else are you seeing here? I mean,
• 12:01
  we made it through March without a crash, We made it through October
• 12:05
  and September without a crash. Is there a crash down the road here?
• 12:09
  So like just looking at the hard numbers, I mean, stocks continue to
• 12:13
  show some strengthen May the dollar is strengthened, you know, as it is
• 12:16
  recording. We've seen about six straight trading sessions, the only one on the
• 12:20
  green screen on the green at the moment, and it's extended its longest winning
• 12:24
  street since twenty twenty four. The SP's rallying dine out of the last you
• 12:28
  know, twelve days in the Nasdaq is about one percent from record highs.
• 12:31
  So if you just looked at that specifically, it really looks like a good
• 12:35
  picture. If you look technically, I think that equities are going to round
• 12:39
  off and we'll see a lower high on the charts. I think a lot
• 12:43
  of people you know, are digesting this sell and may and go away.
• 12:46
  I mean, you think about it. If US equities are already putting up
• 12:50
  this five to nine percent as of this recording, why not take that money
• 12:56
  off the table some bit and ship back to those money market ounce where you
• 13:01
  know, people aren't getting four and a half to five percent on their money
• 13:03
  without taking any real risk. So it puts you in a pretty good place
• 13:07
  going out through the summer when things can get pretty vilid. So we have
• 13:11
  been tactically taking some shorts here and there for our clients, both on the
• 13:16
  wealth management side and then also on the future side. We're on the wealth
• 13:20
  management side, we use spider puts for a small percentage of the portfolio to
• 13:24
  try and just soften even out some of these selloffs and these ripples that we
• 13:28
  have in the market. But I think the fifty moving to average on the
• 13:31
  S and P is a key test fifty that would be fifty one eighty six
• 13:37
  and anything north of fifty two fifty, I think it's a little froppy in
• 13:39
  the market, all right, So hey, what's your take on the Tesla.
• 13:43
  It's all the turmoil with that stock that's been happening. It's been pretty
• 13:50
  It amazes me. I mean, it'd be just straight with you. How
• 13:52
  many people hate the CEO but drive the car. It seems so like him
• 13:56
  a critical it's kind of funny, but you know, I don't I think
• 14:00
  you can county line must down. He has ways to come, you know,
• 14:03
  come back. And I think that Tesla really switched itself, you know,
• 14:07
  from this EV vehicle company to more of a growth stock. Again,
• 14:11
  that guy is uh is highly intelligent, has a number of irons in the
• 14:16
  fire, and I wouldn't count him down in any way. So I think
• 14:20
  that any significant correction on Tesla, I think our good long term buying opportunities.
• 14:24
  It just they've they've already established themselves as the leading maker and in the
• 14:31
  z V vehicles. I think anyone else who tries to enter just you know,
• 14:35
  just can't live up to what they've already built. And I know that
• 14:39
  China's you know, growth of them purchasing Teslas and things like that. You
• 14:43
  know, it has been fading off in the number of other competitors over in
• 14:48
  China is starting to grow. But I think once you're a Tesla on or
• 14:50
  you're probably one forever. Yeah, I could not agree with you more there.
• 14:56
  You know, I just tappen. I like a Musk and I drive
• 15:00
  a Tesla. Not because I think I'm saving the world, because it's a
• 15:03
  ridiculous notion that you can save the world within by driving an EV. It's
• 15:09
  going to take a little more effort than that, for sure, But driving
• 15:13
  experience wise, nothing like the Tesla. The new full self they call it
• 15:18
  supervised full self driving. You know, it really is close to the point
• 15:24
  where it's going to drive the car for you and you'll kind of watch it
• 15:28
  and make sure it doesn't It's kind of the point now where it drives the
• 15:33
  car and you watch it make sure it doesn't get into problems. I mean,
• 15:37
  there's issues with it, but there's if you're patient and you don't mind
• 15:41
  the car driving slower than you would otherwise and coming to full stops at stop
• 15:46
  science because the government made them do that. As long as you're okay with
• 15:50
  that, basically the thing will drive itself with few exceptions. So interesting thing.
• 15:56
  I just want to get your take on that. They Phil been great
• 15:58
  having you on. Tell us where do we find you? How do we
• 16:02
  connect with you? On the web. You can go to Blue Linefutures dot
• 16:06
  com. We do offer a two week trial on our research. We also
• 16:10
  on YouTube. We do the Metals Minute every day where I break down what's
• 16:12
  going on in the precious metals markets. So we've got a lot of followers
• 16:17
  on that and people really enjoy it. Our website is blue Line Futures dot
• 16:21
  com and you know we love to have you check us out great and of
• 16:25
  course the links in the show notes to this interview on Financial Survival Network dot
• 16:30
  com. Just click it you get right through the Blue Line Futures and while
• 16:33
  you're there, please sign up for your free newsletter. Phil. We always
• 16:37
  enjoyed having you on. Good luck be trading. We'll talk to you again
• 16:40
  real soon. Thanks for having me on, Thanks for listening to carry Lets
• 16:45
  this Financial Survival Network your solution to today's trying times. For the latest,
• 16:49
  go to Financial Survivalnetwork, dot Com Financial Survival Network now more than ever, CRUs