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Dennis Gartman: Negative Population Growth Is Problem (Audio) · Bloomberg Intelligence

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  Speaker 1: You're listening to Taking Stock with Kathleen Hayes and Pimp
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  Speaker 1: Box on Bloomberg Radio. Imagine if you had invested your
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  Speaker 1: money at the beginning of the year in an asset
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  Speaker 1: that now is higher by more than eighteen percent. I
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  Speaker 1: was looking at some of the fine print in the
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  Speaker 1: fine work done by Dennis Gartman, because Dennis Gartman has
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  Speaker 1: been putting together the Gartman Letter uh since nine eight
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  Speaker 1: seven that I could not believe. Dennis Gartman, thank you
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  Speaker 1: for being with us economist publisher the Gartman Letter, joining
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  Speaker 1: us from Suffolk, Virginia. How are you old and tired?
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  Speaker 1: But all right? All right, Well that's le's stop. But
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  Speaker 1: that's good enough. You know. I I read your commentary,
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  Speaker 1: but I read it back to front um. Tell me
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  Speaker 1: what's going on with gold and precious metals and palladian
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  Speaker 1: and all that. What's going on with this? They first
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  Speaker 1: of all, the world suddenly does like gold in dollar terms.
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  Speaker 1: What's important to understand is that the world liked gold
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  Speaker 1: in euro terms two years ago, had made its low then,
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  Speaker 1: and the world liked gold in yen denominated terms four
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  Speaker 1: years ago. It's it's been a demonstrative bowld market in
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  Speaker 1: gold predicated in other currencies, and I think one has
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  Speaker 1: to understand that gold is nothing more than a currency.
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  Speaker 1: As an old four X trader, we always used to
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  Speaker 1: trade dollar mark against the end yen, against the Swiss frank,
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  Speaker 1: Swiss frank against the old Italian lira. You're always taught
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  Speaker 1: to be a spreader of one thing, a buyer of
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  Speaker 1: one thing, a seller of something else. And in the
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  Speaker 1: world of for in the world of gold trading, I
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  Speaker 1: think people are beginning to understand that gold really is
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  Speaker 1: simply another currency. And we're beginning to understand that if
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  Speaker 1: gold was a bull market in the end terms four
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  Speaker 1: years ago, if gold was a bull market in euros
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  Speaker 1: two years ago, gold began to be a bull market
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  Speaker 1: in the dollar about four months ago, and that's starting
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  Speaker 1: to engender a little interest on the part of speculators everywhere.
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  Speaker 1: People tend to think of gold only in dollar terms,
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  Speaker 1: and until you've got a bull market going there, it
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  Speaker 1: was hard to get a bullish enthusiasm much. But you're
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  Speaker 1: starting to see that, and I think you're starting to
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  Speaker 1: see an increase in inflationary expectations. The grains are turning
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  Speaker 1: for the better, Livestock is turning for the better. Clearly
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  Speaker 1: the crude oil market has turned for the better. So
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  Speaker 1: there's inflationary circumstances prevailing, which is helping to put a
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  Speaker 1: bit to the gold market. See that's why we've always
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  Speaker 1: enjoyed talking to each other, because we are macro people, right, gold, bonds, currencies, Dennis,
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  Speaker 1: But but you know, the gold going up, but the
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  Speaker 1: dollars starting to strengthen. Two, because people are were first
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  Speaker 1: working comments from key Feather Reserve officials that hey, we
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  Speaker 1: we could raise rates, and in fact some people are
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  Speaker 1: talking about the fact that they will and sooner, maybe
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  Speaker 1: than the market expects. This has been boosting the dollar
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  Speaker 1: a bit. Does that continue and if it does, what
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  Speaker 1: does it mean for this UH dollar rally and goals? Well,
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  Speaker 1: I first of all, I think that people are somewhat surprised.
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  Speaker 1: We're seeing weakness in the stock market to day, which
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  Speaker 1: I think is going to develop into something a little
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  Speaker 1: more difficult over the course of the next several weeks.
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  Speaker 1: But the stock market began to sell off this afternoon
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  Speaker 1: following comments by Mr Kaplan, the the the president of
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  Speaker 1: the Fellow Reserve Bank of Dallas, who, although it's not
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  Speaker 1: a voter on the f o MC this year, I
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  Speaker 1: think is one of the better voices given the fact
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  Speaker 1: that he came out of the trading arena. He's not
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  Speaker 1: a PhD in economics. He's actually somebody who's had to
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  Speaker 1: run a fund, and I think the market tends to
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  Speaker 1: pay more attention to him. And he made this to
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  Speaker 1: the the comment that we might well see a FED
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  Speaker 1: funds rate increase at the June meeting, and I suspect
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  Speaker 1: that that's probably very likely. So there in lies the
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  Speaker 1: problem with the equities market. Equities wanted to see nothing
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  Speaker 1: but flat rates, rates held lower for longer, and sudden
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  Speaker 1: there's on the table once again as an increase in
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  Speaker 1: rate in the June meeting. Dennis Scartman as someone that
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  Speaker 1: I believe I grew up watching companies leave one by
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  Speaker 1: one in there in your neighborhood. I wonder if you
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  Speaker 1: could mix a little politics with a little investment in
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  Speaker 1: the financial perspective for us, well, tis what I grew
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  Speaker 1: up in Akron, Ohio, where back in the nineteen forties, fifties,
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  Speaker 1: and sixties, every tire on every car, literally every tire
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  Speaker 1: and every car was manufactured. There hasn't been a tire
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  Speaker 1: manufacturing naquenceins ninety four entire industry. The rubber industry left,
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  Speaker 1: good Year, good Rich, Firestone, Uniroyal, Cyberling, they were all there.
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  Speaker 1: Their headquarters are still there, but their production facilities have
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  Speaker 1: moved elsewhere. What's interesting is it's all been replaced by
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  Speaker 1: hundreds of other businesses. And therein is the magic of America.
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  Speaker 1: Uh And instead of having six companies that had that
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  Speaker 1: had twenty thousand employees, there are six hundred companies with
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  Speaker 1: two hundred employees, and the unemployment rate and acronism is
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  Speaker 1: holding nicely right at the US at average rate. We
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  Speaker 1: replaced everything, and that's that's what we do well here.
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  Speaker 1: The problem that I have and looking forward into this
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  Speaker 1: next election, is that we have on the Republicans, and
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  Speaker 1: I'm somewhat to the right of Jengis Khan politically and economically,
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  Speaker 1: but the Republican standard there as a protectionist, wants to
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  Speaker 1: protect the businesses. The business of America is actually to
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  Speaker 1: come up with new businesses, destroy the old, build the new,
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  Speaker 1: and that's why we're great. Well, I'm gonna go too
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  Speaker 1: far down that road, because there are some pretty strong
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  Speaker 1: voices arguing these days, Dennis. It's an argument that didn't
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  Speaker 1: go away. But there's more and more focus being put
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  Speaker 1: on the dollar and whether or not it is artificially
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  Speaker 1: manipulated by our trading partners. And if it is, then
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  Speaker 1: maybe Donald Trump has a point that free trade is
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  Speaker 1: one thing, but fair trade is what a lot of
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  Speaker 1: people are saying we must have in order for this
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  Speaker 1: to work for everybody, including us workers. Well, Mr Trump
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  Speaker 1: takes on the es the reman By. He folks who
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  Speaker 1: focuses on the remand as being a manipulated currency. If
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  Speaker 1: it is being manipulated over the course of the last decade,
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  Speaker 1: it's been manipulated against the Chinese, because the reman By
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  Speaker 1: has gotten demonstrably stronger. It's written by what from five
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  Speaker 1: or sickle of actually from eight years ago. I don't
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  Speaker 1: have my screen in front of me, but if up dramatically, yes,
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  Speaker 1: the reman b is down relative to the dollar over
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  Speaker 1: the course of the last year and a half, but
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  Speaker 1: over the course of the last decade, it is up
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  Speaker 1: and up dramatically, and if the if the Chinese have
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  Speaker 1: been manipulating, then they've got manipulation in the wrong direction.
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  Speaker 1: Dennis Gartman expound on the theme of demographics and Europe
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  Speaker 1: and what is going on because this is a problem,
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  Speaker 1: or is not a problem, but this is a situation
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  Speaker 1: that may not necessarily be so widely known about. Well,
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  Speaker 1: all economics derives from demographics. You cannot have a growing
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  Speaker 1: economy if you have a falling population. It's just that simple.
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  Speaker 1: You need need children, you need to have growth in
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  Speaker 1: the population. And what's happening the birth rates in Europe UH,
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  Speaker 1: the United Nations, the u N says that unless you
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  Speaker 1: have two point one children for every woman in in
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  Speaker 1: a birth age population, the population declines. In Europe, now
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  Speaker 1: you're starting to get down to one point seven children
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  Speaker 1: for for women. That's not enough to keep the economy
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  Speaker 1: to keep the population moving higher. What's interesting is in
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  Speaker 1: the industrialized world, the only countries that have populations that
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  Speaker 1: are growing are the United States, Canada, Australia, and New Zealand.
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  Speaker 1: What do we have in common other than the English language.
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  Speaker 1: The thing that we have most in common with is immigration. UH.
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  Speaker 1: You have a problem in in in countries where the
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  Speaker 1: population growth is negative, and in places like Japan, for example,
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  Speaker 1: where the population growth is even more negative than in Europe.
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  Speaker 1: Not only is it growing negative, it is growing older
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  Speaker 1: by the hour. There are as I like to say,
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  Speaker 1: there are entire villages in Japan who have never heard
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  Speaker 1: of baby in the last fifteen years because there haven't
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  Speaker 1: been any born. It's a very serious problem that needs
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  Speaker 1: to be dealt with. Certainly, we started to see the
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  Speaker 1: Chinese begin to deal with it when they when they
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  Speaker 1: ended their ludicrous one child program. At least they have
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  Speaker 1: on them now allowed to have two children if they
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  Speaker 1: ask permission. You need to have population growth, and in
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  Speaker 1: most of the industrialized world we have negative growth. And
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  Speaker 1: if it's not negative yet, it will be negative in
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  Speaker 1: another couple of years. It's a very serious problem that
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  Speaker 1: no one talks about. Just about fifteen seconds left, but
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  Speaker 1: I have to ask you gold that one thousand, two
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  Speaker 1: or eighty dollars roughly an ounce would you buy it here? Dennis?
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  Speaker 1: Is it gonna move higher this dollar gold rally? Uh?
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  Speaker 1: Six months from now it will be higher. A year
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  Speaker 1: from now, it'll be higher, two years from now, it'll
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  Speaker 1: be higher how much. I'm not one of those people
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  Speaker 1: who thinks it's going to several thousand dollars. It's the
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  Speaker 1: trend is from the lower left to the upper right.
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  Speaker 1: It's probably gonna be higher, nicely, probably six seven percent
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  Speaker 1: higher a year from now than it is now. Dennis Carbon,
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  Speaker 1: thank you so very much for joining us. It's great
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  Speaker 1: to have on taking stock here on Bloomberg Radio. Economist,
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  Speaker 1: publisher of the Gartman Letter. He's in Suffolk, Virginia. We're
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  Speaker 1: in Alexandri Alexander, Virginia. Very special broadcast in the Washington
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  Speaker 1: metro area on Bloomberg Radio.