Latest / Financial Survival Network / Inflation, Debt, and Growth Forecast 2025 - Jim Welsh - #6215

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Inflation, Debt, and Growth Forecast 2025 - Jim Welsh - #6215 · Financial Survival Network

• 0:00
  Speaker 1: Expectations are very high for President Trump, pro growth policies,
• 0:06
  Speaker 1: cutting back on regulation, wanting to drive the price of
• 0:10
  Speaker 1: energy down by half, and so forth. The problem, I think, Carrie,
• 0:16
  Speaker 1: is that expectations are likely to be disappointed for a
• 0:21
  Speaker 1: period of time, because all those things may have great
• 0:24
  Speaker 1: value longer term, but it's going to take time to
• 0:28
  Speaker 1: actually make progress, get them to be operational, if you
• 0:32
  Speaker 1: will in the real world.
• 0:34
  Speaker 2: You're listening to Carrie.
• 0:35
  Speaker 3: Let'sa's financial survival Network where you get valuable information you
• 0:40
  Speaker 3: just can't find anywhere else to thrive in today's trying times.
• 0:44
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• 0:49
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• 0:52
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• 1:01
  Speaker 2: And welcome. This is Financial Survival Network. You're listening to
• 1:05
  Speaker 2: your host here, Carrie Lutz, and we're at the be
• 1:09
  Speaker 2: first just the first week of the month, literally, and
• 1:13
  Speaker 2: we've got Jim Welshawan from macrotides dot com. Got a
• 1:17
  Speaker 2: question for Jim myself? Shoot me an email kl at
• 1:20
  Speaker 2: Carrie LUTs dot com. Jim, Hey, welcome back, Happy new year.
• 1:24
  Speaker 2: What can we look forward to in this new era? Well, Harry.
• 1:29
  Speaker 4: Great to be joining you.
• 1:30
  Speaker 1: A happy new Year to you and all your listeners,
• 1:32
  Speaker 1: and I'd like to offer the January issue of Macro Tides.
• 1:37
  Speaker 1: All they have to do is send me an email
• 1:39
  Speaker 1: Jim Welsh Macro at Gmail, and I'm happy to send
• 1:41
  Speaker 1: that out to them because it does address some of
• 1:45
  Speaker 1: the things we're going to be talking about. And more so,
• 1:50
  Speaker 1: I think there's a number of themes that I have
• 1:53
  Speaker 1: felt will play a role this year. Expectations are very
• 1:58
  Speaker 1: high for President Trump, pro growth policies, cutting back on regulation,
• 2:06
  Speaker 1: wanting to drive the price of energy down by half,
• 2:10
  Speaker 1: and so forth. The problem, I think, Carrie, is that
• 2:14
  Speaker 1: expectations are likely to be disappointed for a period of time,
• 2:19
  Speaker 1: because all those things may have great value longer term,
• 2:25
  Speaker 1: but it's going to take time to actually make progress
• 2:29
  Speaker 1: to get them to be operational, if you will, in
• 2:32
  Speaker 1: the real world, for those benefits to show up. So
• 2:35
  Speaker 1: I think one of the things early on this year
• 2:38
  Speaker 1: potentially is going to be disappointment at how quickly some
• 2:44
  Speaker 1: of the goals are going to be.
• 2:47
  Speaker 4: Addressed.
• 2:48
  Speaker 2: Yeah, well, some things can be done by executive action, though,
• 2:51
  Speaker 2: right they can.
• 2:53
  Speaker 1: At the same time, you know, I'll take one of
• 2:56
  Speaker 1: the energy idea of cutting energy costs, and so President
• 3:01
  Speaker 1: Trump is going to try to encourage and incentivize oil
• 3:05
  Speaker 1: companies to produce more natural gas and oil. The problem
• 3:10
  Speaker 1: is that over the last five, seven, eight years, oil
• 3:13
  Speaker 1: companies have deviated from historically what they've done. Historically, you
• 3:18
  Speaker 1: go back to prior forty years, anytime oil prices were high,
• 3:22
  Speaker 1: they aggressively increased exploration. With that increased cash flow, and
• 3:26
  Speaker 1: the net result, oil supply increased pretty dramatically. Three to
• 3:31
  Speaker 1: five years later, oil prices came down. In the last
• 3:34
  Speaker 1: five years or so, the emphasis carry has been in
• 3:37
  Speaker 1: not spent doing as much exploration, saving that cash flow
• 3:43
  Speaker 1: and paying dividends and buying backstock. So shareholders were yelling
• 3:49
  Speaker 1: at oil executives for a long time, telling them, don't
• 3:53
  Speaker 1: be stupid, don't drill to drive the price of oil down,
• 3:57
  Speaker 1: and they in fact have been doing that. So I
• 3:59
  Speaker 1: think when President Trump asks them to increase exploration, I
• 4:03
  Speaker 1: think they will. I just don't know that it's going
• 4:06
  Speaker 1: to be to the extent that will bring oil prices
• 4:11
  Speaker 1: down by fifty percent. So that is again some of
• 4:16
  Speaker 1: the headwinds and just kind of a reality check that
• 4:21
  Speaker 1: you know, has to be faced, and that I think
• 4:25
  Speaker 1: is as he was campaigning, bringing energy prices down was
• 4:29
  Speaker 1: a big pitch to those who were most impacted by
• 4:33
  Speaker 1: the high cost of living, lower income families and so forth.
• 4:37
  Speaker 1: And I think they heard that pitch carry because that's
• 4:39
  Speaker 1: why we saw a lot of people who had never
• 4:42
  Speaker 1: voted for a Republican in their life voted for Trump
• 4:46
  Speaker 1: on the notion that, Okay, he's going to bring my
• 4:49
  Speaker 1: They don't think of it an cost of living, They're
• 4:51
  Speaker 1: just going to make He's just going to make my
• 4:53
  Speaker 1: life a little bit easier. My paychecko stretch, Maybe my
• 4:56
  Speaker 1: rent is going to come down, you know, food costs
• 4:59
  Speaker 1: are going to come down.
• 5:00
  Speaker 4: And I think that's.
• 5:02
  Speaker 1: Part of the latent problem in that it's very difficult
• 5:06
  Speaker 1: to accomplish that, especially in a two year window when
• 5:10
  Speaker 1: we have midterm elections and historically the party in power
• 5:14
  Speaker 1: loses seats, and right now the Republicans I think have
• 5:17
  Speaker 1: a majority in the House of four seats. So those
• 5:19
  Speaker 1: are some of the challenges that I think are kind
• 5:24
  Speaker 1: of going to, you know, come up during twenty twenty
• 5:28
  Speaker 1: five and.
• 5:31
  Speaker 4: Encounter to where.
• 5:32
  Speaker 1: The expectations are. I think that generates some disappointment.
• 5:36
  Speaker 2: Okay, well, you know, normally I don't have any expectations
• 5:41
  Speaker 2: or any hopes. It's always the same thing.
• 5:44
  Speaker 4: We're talking politicians, right, But we do.
• 5:47
  Speaker 2: Have to confess that in twenty sixteen Trump's first term
• 5:53
  Speaker 2: things were quite different. Now, what about this concept of
• 5:56
  Speaker 2: the deep state as they seem to run everything. People
• 6:01
  Speaker 2: you think are like totally normal or embedded in the
• 6:04
  Speaker 2: deep state, and the idea of purging these people out.
• 6:09
  Speaker 2: They've kind of kept the game running since World War Two,
• 6:13
  Speaker 2: I would say, at least.
• 6:15
  Speaker 4: For a long time.
• 6:16
  Speaker 1: I mean, if you look at a lot of the
• 6:17
  Speaker 1: agencies and the people that are been run by President
• 6:22
  Speaker 1: Biden passed more economically significant rules than any other administration history.
• 6:30
  Speaker 1: And an economically significant rule is anything that's going to
• 6:33
  Speaker 1: cost over one hundred million dollars. And so, you know
• 6:40
  Speaker 1: what we have, to your point, are embedded people that
• 6:43
  Speaker 1: have been in these agencies for a long time.
• 6:46
  Speaker 4: And so, yeah, you get rid of the top.
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  Speaker 5: Guy, but the philosophy of those who are working within
• 6:53
  Speaker 5: that agency doesn't necessarily change just because you change the
• 6:58
  Speaker 5: top one or two people.
• 7:00
  Speaker 1: And so it really comes down to an embedded again,
• 7:04
  Speaker 1: philosophy or people government should be doing more. And so
• 7:09
  Speaker 1: one hallmark of the Biden administration was that the number
• 7:13
  Speaker 1: of his agencies that were taken to court and then
• 7:18
  Speaker 1: lost is extraordinary.
• 7:21
  Speaker 4: So what we saw.
• 7:22
  Speaker 1: Was in you know, Congress passes a rule on law,
• 7:26
  Speaker 1: the agencies have some latitude in interpretating that law, and
• 7:30
  Speaker 1: under President Biden, those agencies stretched the law so far
• 7:35
  Speaker 1: that they got the risk slapped in court. And so
• 7:40
  Speaker 1: just because President Trump is going to try to make
• 7:43
  Speaker 1: some of these changes, I just think the philosophy that
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  Speaker 1: has been embedded in these agencies for a long time
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  Speaker 1: is just going to be hard to completely eradicate. I mean,
• 7:54
  Speaker 1: I think for a lot of these folks it's like, well,
• 7:56
  Speaker 1: we'll just wait you out now. And I think that's
• 8:00
  Speaker 1: the risk here is that President Trump won a convincing
• 8:05
  Speaker 1: campaign and election, but he's got, in my mind a
• 8:08
  Speaker 1: two year window. Well, and if he loses the House
• 8:12
  Speaker 1: in two years, then all of a sudden, a lot
• 8:14
  Speaker 1: of the things that he wants to get accomplished Carrie
• 8:17
  Speaker 1: become that much more difficult.
• 8:19
  Speaker 2: So two interesting points here. The court overruled the Chevron doctrine,
• 8:28
  Speaker 2: which that courts have to defer to agencies when they
• 8:32
  Speaker 2: pass new regulations and rules, and there's a presumption that
• 8:38
  Speaker 2: they're proper and correct, and basically that gives him the
• 8:41
  Speaker 2: right to dismantle virtually eighty percent of the administrative state
• 8:46
  Speaker 2: because Congress creates these agencies. But then they never really
• 8:51
  Speaker 2: never go away. Yeah, they passed, they passed the law
• 8:54
  Speaker 2: that creates the agency. Say eyes, you're on your own,
• 8:57
  Speaker 2: have fun right now. And normally the administration would have
• 9:05
  Speaker 2: to justify rolling back the rules, so they put it
• 9:08
  Speaker 2: out for public comment. Now they've got the basis to
• 9:12
  Speaker 2: get rid of eighty percent of these regulations in many
• 9:15
  Speaker 2: of these places because they were all based on regulatory creep,
• 9:20
  Speaker 2: the Chevron doctrine, and that that's gone, and man like,
• 9:24
  Speaker 2: of course, like the media doesn't report these is the
• 9:28
  Speaker 2: important stories the way they should.
• 9:31
  Speaker 1: The other they're going to report that the Chevron reversal
• 9:36
  Speaker 1: was a huge loss for the American people.
• 9:40
  Speaker 2: You know, So, like people think that countryes diminishing, we're weakening,
• 9:45
  Speaker 2: And I do think there's an argument to be made.
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  Speaker 2: But I've printed out a chart here. Do you know
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  Speaker 2: what the USA share of global GDP was in the
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  Speaker 2: twenty eleven it's.
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  Speaker 1: A good I'm gonna guess twenty it was about twenty
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  Speaker 1: one percent. Okay, do you know what it was in
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  Speaker 1: twenty twenty four? Twenty seven percent.
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  Speaker 2: Oh, you're close, better than me, close to twenty six percent.
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  Speaker 2: So the US's share of global GDP, and granted that
• 10:19
  Speaker 2: isn't the best market, right, but it's the only one
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  Speaker 2: we really have, has gone up almost twenty five percent
• 10:29
  Speaker 2: in thirteen years years, right. Yeah, So what does that
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  Speaker 2: tell you?
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  Speaker 1: Well, it tells us that the United States has the
• 10:40
  Speaker 1: capacity to innovate way more than Europe. As much as
• 10:44
  Speaker 1: we have regulation in the United States, Europe is like
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  Speaker 1: in a class by themselves. And the net result is
• 10:54
  Speaker 1: many companies are able to come up with a great
• 10:57
  Speaker 1: idea and then turn it into reality that then creates jobs,
• 11:03
  Speaker 1: improves productivity, and so that's the energy that needs.
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  Speaker 4: To be retained.
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  Speaker 1: And again, that's a great statistic carrier because it tells
• 11:16
  Speaker 1: us more than one thing. Not only is us doing well,
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  Speaker 1: but we're doing well in part because other countries have
• 11:23
  Speaker 1: fallen behind. I think the ECB came up about six
• 11:29
  Speaker 1: months ago, and I think it was Mario Draghi who
• 11:33
  Speaker 1: was involved with doing this. Project of what do we
• 11:36
  Speaker 1: need to change to become better? And one of the
• 11:41
  Speaker 1: issues was we need to be able to roll back regulation,
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  Speaker 1: we need to open up markets and so forth.
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  Speaker 4: In other words, we.
• 11:47
  Speaker 1: Need to follow the example of the US. So those
• 11:52
  Speaker 1: are our tremendous strings. The problem that I think is
• 11:58
  Speaker 1: very important is the amount of debt that we're running
• 12:03
  Speaker 1: every single year. So last year the deficit was six
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  Speaker 1: point four percent of GDP and for a lot of people,
• 12:10
  Speaker 1: what does that actually mean. But to put it in perspective,
• 12:14
  Speaker 1: Carrie is you probably know the only time the deficit
• 12:18
  Speaker 1: has been above six percent of GDP was during World
• 12:21
  Speaker 1: War two, War two, Yeah, the financial crisis of two
• 12:25
  Speaker 1: thousand and eight and the pandemic. So you know, we
• 12:30
  Speaker 1: had a really bad recession in nineteen eighty two, seventy three,
• 12:34
  Speaker 1: seventy four long recessions. Guess what, we didn't even get close. Yes,
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  Speaker 1: So that shows how extraordinary the amount of government spending
• 12:44
  Speaker 1: has been. And so the Treasury Secretary nominee the Cent
• 12:51
  Speaker 1: has said, well, we're going to cut that from six
• 12:54
  Speaker 1: to four down to three. That's one of our goals.
• 12:56
  Speaker 1: It's the right goal. It's important to get to accomplished.
• 13:00
  Speaker 1: But if you take away a trillion dollars worth of
• 13:03
  Speaker 1: spending that represents three percent of GDP, the economy is
• 13:08
  Speaker 1: going to slow as that is done. Now they're hoping
• 13:12
  Speaker 1: that by cutting regulation, improving incentives for investment and so forth,
• 13:18
  Speaker 1: that they can offset some of that. It's just that
• 13:21
  Speaker 1: I think the timing aspect is a little mismatched in
• 13:25
  Speaker 1: the sense that as they cut the deficit, the improvement
• 13:30
  Speaker 1: from regulation and so forth will take longer to completely manifest.
• 13:35
  Speaker 1: And the other issue is the economy has been growing
• 13:39
  Speaker 1: about two and a half percent or so if we
• 13:42
  Speaker 1: indeed slow, whether it's later this year next year, it's
• 13:47
  Speaker 1: going to be more difficult to get the deficit down.
• 13:50
  Speaker 1: So my point is the goal of cutting the deficit
• 13:54
  Speaker 1: is the right goal, except the economic repercussions are going
• 14:00
  Speaker 1: to be a political liability because you know what will
• 14:03
  Speaker 1: happen is if the economy starts to slow and starts
• 14:06
  Speaker 1: growing under two percent, we'll be fed NonStop by Democrats
• 14:11
  Speaker 1: in the media. Well, when President Biden was around that
• 14:15
  Speaker 1: GDP was two and a half percent, he handed all,
• 14:17
  Speaker 1: if there's wonderful economy, and that kind of stuff does
• 14:21
  Speaker 1: weigh on how.
• 14:22
  Speaker 4: People perceive.
• 14:25
  Speaker 2: The reality.
• 14:26
  Speaker 1: So it's a you know, I hope he's more successful
• 14:30
  Speaker 1: than most people think he will be. I just think
• 14:34
  Speaker 1: the challenges are really significant.
• 14:39
  Speaker 2: Well, if we pick up Canada, that should be a
• 14:41
  Speaker 2: big boots to the economy, right and there Greenland. I
• 14:46
  Speaker 2: think there's more to Greenland that they were really talking about.
• 14:49
  Speaker 2: There's something there that's way more important than rare earth
• 14:53
  Speaker 2: metals and you know whatever. I think there's something strategic
• 14:59
  Speaker 2: there and it is strategic for sure. You know.
• 15:04
  Speaker 1: Now again the media is going to make fun of
• 15:05
  Speaker 1: them and all the rest of that for these ideas,
• 15:09
  Speaker 1: of course, but you know, we'll see, hopefully you can
• 15:13
  Speaker 1: pull some of that stuff off. But for a lot
• 15:15
  Speaker 1: of people who voted for President Trump, for them, it
• 15:19
  Speaker 1: all matters is is my rent, what's happening to my rent,
• 15:23
  Speaker 1: what's happening to my energy costs? What's happening when I
• 15:26
  Speaker 1: go to the grocery store and those That's where the
• 15:30
  Speaker 1: rubber meets the road carrier, and that's where I think.
• 15:34
  Speaker 1: I hope they focus on that. I'm sure they will,
• 15:37
  Speaker 1: But that's the key I think in terms of what
• 15:40
  Speaker 1: happens in two years with the midterm elections, and if
• 15:44
  Speaker 1: you need a longer runway to accomplish some of the
• 15:47
  Speaker 1: things that I think they're trying to accomplish so that
• 15:51
  Speaker 1: they last a generation, not just this little blip. And
• 15:56
  Speaker 1: I think so many companies have gone through the union
• 15:59
  Speaker 1: yang of democratic white House Republican white house philosophies go
• 16:04
  Speaker 1: back and forth, and they're trying to bridge that volatility
• 16:07
  Speaker 1: in terms of how they run their companies. So I
• 16:10
  Speaker 1: think they've learned is I'm not going to lean too
• 16:13
  Speaker 1: heavily one way or the other because in four years
• 16:16
  Speaker 1: this all can change, and you know, that's the reality
• 16:19
  Speaker 1: that they've been forced to live by over the last
• 16:23
  Speaker 1: ten fifteen years.
• 16:25
  Speaker 2: I will buy it all, right, So, yeah, what's the
• 16:28
  Speaker 2: stock market going to do here, Jim, this is what
• 16:30
  Speaker 2: you got spot on. And what's inflation going to be?
• 16:34
  Speaker 1: Yeah, well, I'll talk about inflation because right now, obviously
• 16:37
  Speaker 1: people are expecting inflation to go up be difficult to
• 16:40
  Speaker 1: come down because of the tariffs and so forth. The
• 16:44
  Speaker 1: thing about the tariffs is it is a negotiating tool
• 16:48
  Speaker 1: to get bring people to the table and hopefully come
• 16:51
  Speaker 1: to some kind of a compromise. So I don't think
• 16:53
  Speaker 1: the tariff inflation aspect is going to be as bad
• 16:57
  Speaker 1: as people are thinking. Number two, inflation is going to
• 17:03
  Speaker 1: come down in the next four months. As you remember,
• 17:06
  Speaker 1: in the first part of twenty twenty four, the first
• 17:09
  Speaker 1: four months of inflation were really bad numbers. In fact,
• 17:13
  Speaker 1: if you add up those four four months for the
• 17:16
  Speaker 1: CPI and the Personal Consumption Expenditure Index the PCE, it
• 17:21
  Speaker 1: was one hundred and forty basis points. So the way
• 17:25
  Speaker 1: they do the calculation on these things carry is they
• 17:28
  Speaker 1: take away what happened twelve months ago and they add
• 17:30
  Speaker 1: in what number comes now. So what we know is
• 17:33
  Speaker 1: these inflation metrics are going to have a takeaway values
• 17:37
  Speaker 1: of one hundred and forty basis points. So if each
• 17:41
  Speaker 1: of these average month to month inflation of point two five,
• 17:45
  Speaker 1: well that means you're taking away one forty and you're
• 17:47
  Speaker 1: adding one hundred, which means almost all these metrics. I
• 17:51
  Speaker 1: think by the time we get the last report in
• 17:54
  Speaker 1: May for April inflation, we're going to see them decline
• 17:57
  Speaker 1: by at least four tenths of a percent, and so
• 18:01
  Speaker 1: I think that's one of the Again the counterpoint too,
• 18:05
  Speaker 1: where perceptions are today, I don't think the inflation problem
• 18:08
  Speaker 1: is going to be.
• 18:09
  Speaker 4: As big as people are worried about.
• 18:12
  Speaker 1: In terms of the equity market, the problem is valuations
• 18:17
  Speaker 1: are incredibly stretched. Forty percent of the S and P's
• 18:21
  Speaker 1: value is just top the top ten stocks, and so
• 18:26
  Speaker 1: they've been pulling the market up. And I think at
• 18:29
  Speaker 1: some point in time in Nvidia and these other companies
• 18:32
  Speaker 1: that are at the forefront of artificial intelligence, the growth
• 18:36
  Speaker 1: rates are going to start to slow and those companies
• 18:38
  Speaker 1: are going to be vulnerable to fairly significant corrections. So
• 18:41
  Speaker 1: my take has been the last month that we're going
• 18:44
  Speaker 1: to see probably something close to a ten percent correction
• 18:49
  Speaker 1: come into play. And then it comes down to is
• 18:52
  Speaker 1: if the S and P takes out forty nine point fifty,
• 18:56
  Speaker 1: then we're probably in a new bear mark it So
• 19:02
  Speaker 1: I think based on valuations expectations, the advanced declin line
• 19:09
  Speaker 1: has been lagging historically that has been a really good
• 19:13
  Speaker 1: tell prior to significant correction and or bear market. So
• 19:19
  Speaker 1: I'm pretty cautious in the near term, Curry, because I
• 19:22
  Speaker 1: think the market has the you know, there's more downside
• 19:26
  Speaker 1: risk than upside potential at this point in time.
• 19:29
  Speaker 2: Okay, all right, understand what you're saying so one thing, like,
• 19:37
  Speaker 2: I guess a lot of it depends upon sentiment, right,
• 19:42
  Speaker 2: so you basically think that the bullish sentiment's kind of
• 19:45
  Speaker 2: going to peter out, then huh yeah.
• 19:48
  Speaker 1: I mean, in other words, it's just gotten excessive. And typically, again,
• 19:54
  Speaker 1: I think the table set for a retrenchment in that.
• 19:58
  Speaker 1: All right, when President Trump takes office, he's got to
• 20:02
  Speaker 1: get his cabinet through. There's going to be some bumps
• 20:04
  Speaker 1: along the way. The trade negotiations are not going to
• 20:07
  Speaker 1: go smoothly. I mean, think about it. If you're a
• 20:09
  Speaker 1: politician of another country and now you're sitting down at
• 20:13
  Speaker 1: the negotiating table with Trump, you need to have something
• 20:17
  Speaker 1: that you can take back to your people to say, hey.
• 20:20
  Speaker 4: I didn't roll over for Trump. I got us this.
• 20:23
  Speaker 4: And I just think that's the reality.
• 20:25
  Speaker 2: Now.
• 20:25
  Speaker 1: Trump, I think is very good at understanding that, and
• 20:28
  Speaker 1: I go, okay, you give me this. I'm happy to
• 20:31
  Speaker 1: give you that. But it just takes time for all
• 20:34
  Speaker 1: that to take place. So again, I think expectations are
• 20:39
  Speaker 1: so high that that's a problem. The other thing that
• 20:43
  Speaker 1: I think could be very significant is the dollar. You know,
• 20:48
  Speaker 1: people are of the mind that Trump's pro growth policies
• 20:53
  Speaker 1: are going to be bullish for the dollar. And to me,
• 20:57
  Speaker 1: there are again a number of reasons why I take
• 21:01
  Speaker 1: the opposite side of that.
• 21:03
  Speaker 4: One is, Trump is not in favor of a.
• 21:05
  Speaker 1: Strong dollar, right if you look at when for right, well,
• 21:09
  Speaker 1: I would go against that. I mean Robert Rumin in
• 21:12
  Speaker 1: Clinton's administration was very sincere and consistent a strong dollar
• 21:17
  Speaker 1: is in the best interests of the United States, all right,
• 21:20
  Speaker 1: So there have been times when you know that has
• 21:23
  Speaker 1: been supported. But my point is President Trump wants to
• 21:26
  Speaker 1: strengthen the US. Well, if you have thirty percent of
• 21:30
  Speaker 1: the revenue of SMP companies comes from international sales, well,
• 21:33
  Speaker 1: a stronger dollar makes our prices less competitive with other
• 21:39
  Speaker 1: competitors around the world.
• 21:40
  Speaker 4: So a weaker dollar helps that.
• 21:43
  Speaker 1: And so I think somewhere in the not through distant future,
• 21:47
  Speaker 1: those sentiments are going to get expressed. You know, in
• 21:50
  Speaker 1: theory is strong dollar sounds good, but in.
• 21:53
  Speaker 4: Reality not so good.
• 21:55
  Speaker 1: The other thing from a chart analysis, and this I
• 21:57
  Speaker 1: go into the January macro time looking at the long
• 22:01
  Speaker 1: term picture of the dollar index. I think it's on
• 22:05
  Speaker 1: the cusp of a decline that will take it below
• 22:09
  Speaker 1: ninety five. So the dollars trading up around one oh
• 22:11
  Speaker 1: eight up to one oh nine. I think we're going
• 22:14
  Speaker 1: to see a decline of about fifteen points. And the reason,
• 22:19
  Speaker 1: in part is when the dollar hit its high in
• 22:22
  Speaker 1: October of twenty two at one fourteen and change, it
• 22:26
  Speaker 1: then quickly dropped fifteen points to ninety nine and change.
• 22:30
  Speaker 1: And so to me, I just think that the synergy
• 22:33
  Speaker 1: between a big decline followed by choppiness that we've seen
• 22:37
  Speaker 1: over the last two years, and then another leg down.
• 22:41
  Speaker 1: I think the fundamental story ties with what the technical
• 22:45
  Speaker 1: picture is. So as long as the dollar doesn't close
• 22:48
  Speaker 1: over let's say one ten, I think that's the outlook
• 22:51
  Speaker 1: for the dollar, and you know, I think that has
• 22:55
  Speaker 1: implications for obviously other markets. Historically, in the last handful
• 23:01
  Speaker 1: of years, there's been a strong correlation between treasure yields
• 23:05
  Speaker 1: and the dollars. So as yields went up, the dollar strengthened.
• 23:08
  Speaker 1: When the dollar has pulled back, yields came down. So
• 23:11
  Speaker 1: I think right now the consensus is we're going to
• 23:15
  Speaker 1: see yields keep going. I think there's a decent shot
• 23:18
  Speaker 1: that treasure yields are in the process of topping out
• 23:21
  Speaker 1: right now. And if I'm right about the economy three
• 23:25
  Speaker 1: six months from now showing more signs of slowing inflation
• 23:29
  Speaker 1: remaining more under control than people expect, I think you
• 23:32
  Speaker 1: can see a rally in treasury yields where they will
• 23:36
  Speaker 1: drop below where they were in December of last year.
• 23:40
  Speaker 1: In terms of tot which is the long bond ETF
• 23:45
  Speaker 1: it's got down below eighty five today. I think we're
• 23:48
  Speaker 1: near trading low and I think ultimately it's going to
• 23:51
  Speaker 1: rally close to one oh five. So there's a trading
• 23:55
  Speaker 1: opportunity I think developing there. And in goal last but
• 24:00
  Speaker 1: mount least, I think it's in a bull market. In October,
• 24:06
  Speaker 1: I turned kind of cautious negative in the sense of sentiment,
• 24:10
  Speaker 1: was very very bullish. Positioning reflected that sentiment, and I said,
• 24:16
  Speaker 1: I think we're going to see a decent sized pullback,
• 24:19
  Speaker 1: and I believe gold will trade below twenty five forty one,
• 24:23
  Speaker 1: which is the last low that it hit of any
• 24:25
  Speaker 1: significance in the last four to six weeks, and could
• 24:29
  Speaker 1: trade down as low as twenty four hundred once this
• 24:32
  Speaker 1: correction is over. No matter where it ends, gold I
• 24:35
  Speaker 1: believe will go to a new all time high. So
• 24:39
  Speaker 1: it's just a question of looking for an entry point after.
• 24:43
  Speaker 1: I think we see more weakness from the low and gold,
• 24:47
  Speaker 1: and I think it was in nineteen twenty twenty two.
• 24:53
  Speaker 4: One up two down.
• 24:55
  Speaker 1: Wave two lasted about four months, and then the high
• 24:58
  Speaker 1: at twenty seven eighty nine would be Wave three, and
• 25:01
  Speaker 1: way four and two have often a similarity in terms
• 25:05
  Speaker 1: of time. So my guess carry is that this correction
• 25:09
  Speaker 1: can last into mid February, maybe into mid March timely.
• 25:15
  Speaker 2: So it's a correction, not a bear market.
• 25:18
  Speaker 4: Absolutely. Yeah. I think again, if I'm right about the.
• 25:21
  Speaker 1: Dollar working its way lower over the next twelve months
• 25:26
  Speaker 1: or so to ninety five, that would be a big
• 25:29
  Speaker 1: tail when I think for gold.
• 25:31
  Speaker 2: Yeah, yeah, I could see that. And yeah, I tend
• 25:36
  Speaker 2: to agree that you're you're thinking right on this.
• 25:40
  Speaker 1: So all right, hopefully two great minds burning in a
• 25:45
  Speaker 1: small circle.
• 25:46
  Speaker 2: Yeah, wells baller the better, right, Yeah?
• 25:49
  Speaker 4: Right, So we looked like a dot.
• 25:53
  Speaker 2: Yeah no, no, I gotcha, I got you. So all right,
• 25:57
  Speaker 2: Well just at a macrotides dot com to Jim get
• 26:01
  Speaker 2: a free copy. Tell us your email address again.
• 26:03
  Speaker 4: Jim, Jim Welsh macro at gmail.
• 26:07
  Speaker 2: Okay, Jim Welsh macro at gmail dot com, and if
• 26:13
  Speaker 2: you got any questions comments for Jen myself, shoot me
• 26:15
  Speaker 2: an email kl at carrielots dot com. You find a
• 26:19
  Speaker 2: link to macrotides dot com in the show notes to
• 26:22
  Speaker 2: this interview on Financial Survival Network dot com. We just
• 26:26
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  Speaker 2: last one I sent out actually opened it and read
• 26:54
  Speaker 2: some of it, so it's good to know that reading
• 26:57
  Speaker 2: is not yet dead. Jim, A pleasure being a healthy
• 27:00
  Speaker 2: new year to you and yours. We'll talk to you
• 27:02
  Speaker 2: again real soon.
• 27:03
  Speaker 4: Thanks Terry and enjoying our conversation.
• 27:05
  Speaker 3: Thanks for listening to Carrie Letz's Financial Survival Network your
• 27:09
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