Stagflation Seemingly Sexy, Price Rally Continues (Uncut) 03-20-2025

GOLD: New ALL-TIME HIGH, Stagflation Seemingly Sexy, Price Rally Continues | Lobo Tiggre

In his world, that confidence figure should weigh more, and so I count this as another instance of disingenuity, because that’s important in his world. In my own world, if you ask me how much do I care about this, things are worse than the numbers that Powell is touting. Hello and welcome to Soar Financially, a special live edition here on FedDay.

It is March 19th, it is Wednesday. We just got out of the press conference, just watching what Jerome Powell has been saying. I have invited back Lobo Tigre, a recurring guest, and I’m excited that both our schedules lined up today to have this live discussion about what Jerome Powell has been saying about the Fed decision.

A lot of buzzwords that we’ll need to discuss. I’m just going to mention a couple. Transitory, hawkish, stagflation, inertia.

Those are just four we’ll discuss throughout this conversation. In the meantime, gold marked a new all-time high at $30.51. Absolutely insane moves here in the market. We’ll dissect that with Lobo Tigre, also known as the due diligence guy of The Independent Speculator.

Before I switch over to my guest and bring him on, quick reminder if you haven’t done so, hit that like and subscribe button. Helps us out tremendously. I’ll remind you throughout this live conversation, of course, as well.

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Hope you can hear us okay. Now, let’s get started. Lobo, welcome back to Soar Financial.

It’s good to see you again. Thanks so much for making the time for this live conversation. Sure.

This was the most fun Fed day I’ve had in a long time. So, let’s get to it. Absolutely.

Yeah. Let’s dive right in. Let’s start with a bit of a recap.

What is your first initial takeaway from the press conference and also the FOMC statement here? So, my first thought was that’s kind of dovish. I heard a lot of talk about hawkish, all this bad news. Excuse me.

There it goes. Puerto Rican sneeze. But bad news is good news, right? There was all this talk about scary things.

And to my mind, that was actually dovish. Those are reasons for the Fed to cut. So, really interesting that they raised their inflation expectations, which you would think.

That’s where the hawkish would come from. Oh, they have to raise rates. Inflation is job number one.

But they have a dual mandate. And no, the SEP says they’re still looking at two rate cuts this year. That’s extraordinary to me that they’re raising their inflation expectation.

And yet, they’re still saying they’re going to cut rates twice this year. The chaos and the why and wherefore will go there. But that was my initial reaction.

I was like, wow, really? And then I thought, well, this is their way of actually trying to talk tough. But actually, my takeaway was this was actually very dovish. And the press conference was supremely dovish in my view without actually saying anything materially more dovish.

It was all the I don’t knows and we don’t knows and uncertainty and sticking with the rate cuts despite the high. I mean, to me, it wasn’t so much what was said, but kind of, sorry, but reading between the lines, Fed speaking, if you will. I think Powell’s intention was to reassure markets.

And that was very dovish. Yeah, it was interesting. It was tap dancing.

Is Jerome Powell a good tap dancer here, Lobo? You know, when he first came on the scene as Fed chair, I thought, wow, this guy is more of a straight talker. He seems so down to earth, calm, measured, reassured, doesn’t do a lot of arm waving. I thought, wow, we might actually get some straight talk for once.

But actually, I think, no, he’s just supremely good at coming across that way while delivering a load of dingoes kidneys. That’s a new euphemism I haven’t heard before. So I’ll have to come back to that one.

But a lot of things were discussed. And too bad that nobody asked the question, at least while I paid attention to the press conference. Jerome Powell, why aren’t you raising rates to fight what might be coming down the pipeline this year? Let me jump in on that, Kai, because two people or at least twice it came up.

Maybe it was referenced other times. But there were two direct questions of why are you still cutting? Like why two cuts if inflation is going up? And this is one of the funniest moments of the conference. One of the guys said, are you, in fact, saying that we’re back to transitory? And Powell said, yes.

And he defended it. He says, and not unreasonably. The logic of what he said was fair.

Sometimes if something happens that will have a one-off effect, like the advent of a new tariff, that effect, it’s not permanent. So transitory is a reasonable way to call it. So that’s true.

Like if you put that in a box and just say, okay, look at that, yeah, that makes sense. That’s perfectly sensible. But he was pushed back on that, too.

He was like, well, don’t you remember last time when you talked about transitory? You had good reasons for why that would be transitory. And look what happened. And he didn’t back down.

He’s basically stepping back into the transitory narrative. And I think that’s hilarious. And maybe more important, amusement aside, it kind of tells you which side the Fed is on.

Like it has this dual mandate. And the fact that they’re reintroducing transitory, oh, it’s all because of the tariffs, you know, it’s not real. It’s transitory.

Well, you know, A, who says the tariffs are going to be one and done, right? You know, this reciprocal thing, the ideal outcome would be both sides say, oh, reciprocal. The perfect tariff level is zero on both sides. Yay.

Let’s go home. But when does the perfect thing ever happen in the real world in geopolitics, right? So I think this whole, I think it’s a red herring, this whole thing that tariffs are just a one-off price increase. There’s no permanent inflation.

Of course that’s not right. I mean, there’s tit for tat. There’s negotiations.

There’s reciprocation. There’s retaliation. And then there’s things that aren’t tariffs at all, you know, bans and cuts and boycotts and things.

These all have, I think, lasting implications. But anyway, even if we give them that, I mean, just the gall to say, yeah, it’s transitory. It’s outstanding.

But again, the bottom line, though, that tells you of the dual mandate, it’s the dollar that goes under the bus. You know, if the labor market is really threatened, then that comes first. And that, I think, longer term is inflationary.

It’s bad for the dollar. And it’s good for anything real, you know, our favorite commodities included. Now let’s take a look at the economic projections real quick just so we have a baseline of discussion here.

Because it’s really, really interesting. Because they’re projecting lower growth, 2025, 1.7 percent. The December projection was 2.1. So they’ve reduced that.

Unemployment rate up to 4.4. December projection was 4.3. It doesn’t sound as dramatic, but it’s ticking up. And we’ll come to the job numbers and unemployment rate here in a second. And how DOGE is affecting layoffs or unemployment rate in general.

PCE inflation ticking up 2.7 percent. Core PCE inflation 2.8 percent. All higher than previous projections.

And they keep coming back to 2 percent. If you can see it here. I’m not sure if you can see the mouse on the screen, on the live stream.

But longer run, 2 percent. Of course, what else are they going to say? Nobody’s going to change it to 3 or dare change it to 3. Lobo, what do you make of those projections? Well, I mean, this goes back to that hawkish dovish question. And, but, I mean, in some ways it’s a striking admission.

I mean, wow, that they’re even, you know, admitting that there’s a problem in the near term. And okay, they’re dusting off transitory because that worked out so well for them before. But for them to even have that show up in the dot plot, I think it’s really quite significant.

Because really, if it was all that transitory, if it really was, oh, this one-off thing. Well, the tariff war has already started. So why would you move your dots up farther out? It just, it strikes me as not credible, let’s say.

I think they have to put that out there. Because I think the reality is that they know that inflation is stickier than they believed it would be. You know, the rebound in inflation, you know, they kept talking bumps in the road.

It’s, you know, transitory without using that word and so on. But it wasn’t just like one month. It was four months.

I mean, the previous low was last September. And here we are in March. And okay, CPI came in lower this time.

But they’re projecting PCE, supposedly the more important one, to go up this time. This time, not over the year ahead. So, you know, the inflation rebound is there already.

And blaming it on tariffs, which are just now starting to take force, I think is disingenuous. Yeah, no, absolutely. If you look at the expectations, it doesn’t make sense.

It’s just the whole narrative. It doesn’t really seem to fit. You said expectations.

And that one is a clear bullshit call. Sorry for my French there. But, you know, he’s like, oh, I don’t see it.

Oh, and he’s trying to say, oh, we look at the longer term. But the longer term number was the more astounding pickup in that last University of Michigan survey. Which, you know, to some reporter’s credit, somebody pointed out to him, hey, you said before this was really important.

Why are you dismissing it now? He’s like, oh, well, you know, we look at the longer term. And like five years was the short end of the longer term. Like what other, you know, what other data does he have that’s, you know, inflation expectations for 10 years from now? Nobody even asked that question.

So I just think it’s nonsense. Yeah. No, I tend to agree.

It doesn’t seem to make a whole lot of sense because all of a sudden stagflation is sexy again. And to quote, right, Jonathan Farrow said stagflation is now bullish for the markets. S&P is up 1.3% as we’re speaking.

How does that make sense? Like where do you see that market euphoria? I don’t want to use that word. It’s not stagflation is great. It’s, you know, we were worried that one of our dots was going to drop down.

So it would be one cut instead of two or maybe no cuts. You know, there was palpable fear, I think, in the markets. We’ve seen it in the last couple of weeks.

Things are not going the way we expected. Maybe the Fed takes away what’s left of the punch bowl. You know, there wasn’t much punch left in the bottom of the bowl, you know.

Our six or seven rate cuts went down, down, down, you know. But that last cut or two, if the Fed yanked the punch bowl, I think we would have seen a massive sell-off. Like right now, it would be dropping like a rock right now instead of the opposite.

So I think it’s, if nothing else, something of a relief rally could have been worse. And we’ll deal with the consequences later. Is that more of maybe an expectation that more easing money will be available down the road with the Fed hinting at easing QT? Whatever that means really because the market reacts right now, but easing QT only starts on April 1st.

Is that maybe misplaced euphoria? Well, a couple things. You know, the market is forward-looking, right? So if you were worried that there weren’t going to be these rate cuts and now they are and you can price that worry out, you know, that kind of makes sense. And two rate cuts, I mean, it seems like it’s not a big deal.

But in a market where you’re worried that you might not get any, then I think that’s quite significant. On the QT, this was another really funny part. Like he really did a masterful job of coming across like it’s not important, there’s no hidden message here.

There’s no signal here. It almost reminds me of the old, you know, watching paint dry comment. Nothing to see here.

These are not the droids you’re looking for. Move along. Right? But I think that’s a big deal.

I mean, they’re dropping the QT down to 5 billion, which is basically almost zero. They’re cutting it off. And he says, oh, it’s just, you know, we’re close to the target.

So, you know, why not slow down the glide path? Like it all makes perfect sense, except when you actually just step back and think about what we’re saying. We’re keeping rate cuts on the table. We’re stopping almost QT.

I mean, that is dovish. And so no wonder the markets responded positively. And by the way, you know, not just the equity markets, risk assets, but this is bearish dollar.

The dollar dropped on this news and gold went up, and that makes perfect sense. Yeah. No, I tend to agree.

Sorry. I’m just taking some notes. I saw an interesting comment here in the chat that I’ll have to get back to later.

It’s about the ECB and inflation and the eurozone spending. We’ll get to the inflation expectations or that question in a minute. Consumer confidence.

You hinted University of Michigan study as well. We have to take a look at it because he dismissed it quite boldly saying, ah, outlier. Don’t worry about it.

Consumer confidence is dipping because of tariff discussions and uncertainty in the market. Where do you rank it? When you look at that, the consumer confidence. Well, I actually place less weight on consumer confidence than the Fed heads do.

Sorry, I shouldn’t do ad hominems. But in their model, their way of thinking, right? You know, economics is all about confidence. Inflation happens, has nothing to do with money printing, but if people expect more inflation, then they’ll get it because they’ll pay more now and they’ll demand more wages, blah, blah, blah.

So for them, you know, that confidence number is really important. I think, you know, people, their confidence is backward looking. They respond to things.

The inflation expectations, you know, Powell dismisses it. And, you know, he sounds very nice and understanding, you know, oh, we understand the pain. And, you know, we’re not dismissing that.

But he is basically telling the people that they’re wrong. You know, that you’re looking at the price of eggs now and it hasn’t gone down as much as you’d like. But the economic statistics say that things are getting better.

So he’s basically saying, you know, don’t believe your lion eyes. Listen to me and my statistics. This is what really matters.

In his world, that confidence figure should weigh more. And so I count this as another instance of disingenuity because that’s important in his world. In my own world, if you ask me how much do I care about this, I do see it as backward looking as well.

And I’m not afraid to say so. You know, people suffer from recency bias. That’s a well-known phenomenon.

And so it’s a lagging indicator. But it tells me that things are worse than the numbers that Powell is touting. And we’re seeing it.

Like you brought up eggs. I think there is an end to the avian flu here. So that part in the inflation calculation or consumer confidence and inflation calculation might be taken out or at least reduced.

Because it has been a big part. And sorry, let’s tie this to unemployment, which you mentioned earlier. Let’s do that, yes.

Okay. Before we go to the EU. But the confidence obviously, you know, touches on the unemployment thing.

And, you know, Powell reiterated that it has been well-balanced before. And, you know, well-balanced doesn’t mean, you know, robust or growing or healthy. I mean, well-balanced is like if you look at the quits and the job openings.

And he did acknowledge this. He said it’s not like we have this booming hiring spree. It’s, you know, companies aren’t firing so much.

And people aren’t, you know, leaving. You know, like in my mind, this is actually kind of a bearish framing. Nobody is confident here.

People don’t want to fire because they don’t want to be able to get people back. But they’re not hiring either. People don’t want to quit because, you know, they don’t know if they’ll be able to get another job.

You know, so the Doge thing is – let’s come back to that. It’s not unimportant, but it is this like big outlier. Let’s just look at where things are.

And the Fed’s own projection in that dot plot is going up to 4.4. And he dismissed that. Oh, you know, it’s kind of like, oh, it’s not a big change. No, sorry.

From 4 or 4.1 to 4.4, that’s like a 10% increase. That’s a big change. That’s a lot of jobs.

If it goes from 4.5, you know, 6 or 4, which, you know, is close to 4.1 or 4.0 where we are now, to 4.4, that will be reflected in a lot of unhappy consumers. Consumer confidence, I think, would tank on that change. Objectively, you could say, oh, 4.4, that’s low on historical – it doesn’t matter.

It just changed in a way that made a lot of people unhappy and will make everybody else uncomfortably nervous. And then, again, remember that that unemployment rate, the U3 rate that they like to quote is the, you know, hedonically massaged or whatever, the new – an improved version, which grossly understates things. If you look at the U6 – and this isn’t, you know, tinfoil hat Lobo making up some number.

This is the government’s own number, the U6 number, which is closer to the way they used to measure unemployment. And this matters. If you say unemployment is at a 50-year low, well, no.

Well, then you have to look at U6. You know, we didn’t use U3 or what we now call U3 50 years ago. And the U6, I haven’t looked at it recently, but as I recall, it’s still way up there.

Seven plus – Eight percent. Eight percent, yeah. So, no, we’re not at 50-year lows.

You know, we’re at a significant level of unemployment. And if it kicks up from here, on Main Street, people are going to feel it and they’re going to say something and have Powell say, you know, don’t believe your lying eyes. The statistics say everything’s fine.

You know, I think people will call BS on that. Yeah, you’ve really downplayed – or I would say downplayed it. But he said it’s a local problem for now, the unemployment rate, because of the layoffs due to the DOJ committee and changes taking effect there.

It’s not on a national scale a problem. That’s what he said, almost verbatim, to be honest. But how do you see that? How do you see DOJ impacting the unemployment market here and the unemployment numbers level is maybe the better question to ask here.

What I’m saying is I think there’s weakness there anyway, and then you have DOJ on top. So this is – you know, it’s interesting. I have a feeling that this will turn into something a lot more significant than the powers that be are letting on right now on either side.

You know, the people on the GOP side, they want to make things not sound so bad. You know, Trump’s little disturbance, right? You know, I think there’s a pretty good chance that this will have knock-on effects far beyond just the number of government employees fired. Somebody – I don’t want to count on the statistic, but it was some like think tank or respected source was saying that for every government job that is terminated, there’s two contractors that lose their position as well, related.

I don’t know how realistic that is, but the idea of it makes perfect sense to me. If – you know, just look at the USAID thing, for example. You know, firing the USAID employees is one thing, but what about all those nonprofits that they cut off from the funding? There are huge knock-on effects, and it’s not just going to be USAID for – you know, they started what they saw as the low-hanging fruit, the easy and obvious places to go.

But I think there’s going to be a lot more going on there. I mean, for example, there’s all this fuss about the famous email that Elon sent out saying, you know, respond to this email. You know, what is it that you do here exactly? Respond to this email within seven days or you’re fired.

And everybody got all up in arms. Oh, this is terrible. How can you fire people without even knowing who they are by email? But that’s not the point.

It wasn’t that Elon was going to evaluate the answers of 15 million government employees on what they did last week and why it was important. The idea was just to see if they answered it all. The idea was this broad dragnet that they had from the data.

It suggested to them that there are just a lot of these people either didn’t exist, like actually didn’t exist. You know, somebody is getting paid, and it’s not a real person, or that they weren’t doing any work at all. They had gone fishing two years ago and never come back.

You know, that sort of thing. So the idea was just this broad dragnet to just catch the people who aren’t there and get rid of those. And who could be against that? You know, somebody either doesn’t exist or hasn’t worked for years.

How can that possibly be bad to fire that person? And if you say, oh, well, they’re a nuclear inspector. Yeah, but if they weren’t there and weren’t doing the work for two weeks, they weren’t nuclear inspecting anything, right? So nuclear inspecting, that’s not a verb. I think you understand what I’m saying.

I think this is just getting going. And I think the impact of the thing itself, you could say, oh, it’s just, you know, be local. Obviously, Washington, D.C. real estate is in question right now.

And that would be a good thing in my view. But I think it spreads way beyond there. And it’s not, you know, if you want to say this is transitory, I think we’re looking at a two to three to, you know, Trump term transitory.

You can look through that if you want. But four years is a long time to ask consumers and businesses and employees to hold off because it’s all just transitory. You brought up transitory again.

I was going to go there, but I was going to ask a follow-up question first on the unemployment side. But since you brought that up, is there a political message in the transitory word? Meaning, OK, yeah, it’s transitory because in three and a half years we’ll have a new government. And he gave some historical context.

That’s why I thought of that, because he was like, well, in the past it was transitory because after four years we had a change. I don’t want to interpret too much into it. Unless they planted the question, Powell didn’t bring the word up.

Somebody else did. And he’s like, well, yeah, it’s transitory. So I’m not sure there, Kai.

That’s an interesting thought. You know, we don’t want to I don’t like to imagine too much of who’s doing that because we don’t know. And people get these ideas and they think they have the explanation.

Oh, it’s all the Bergen builders or, you know, the trilateral commission or the WEF crowd or the Jews or Putin or Zelensky. They have this answer that everything is because of this, that or the other. And I think those answers are almost always wrong.

But I think there is something to the idea that Team Trump wants to front load the pain. Like if they know they’re going to put big changes in, do as much as they can, as quickly as they can, because A, they might lose the midterms and then they won’t be able to do anything. So they just do everything they can while they’ve got, you know, the majority in Congress.

And B, they can blame it on Biden because there’s long and variable lags. So anything that happens within in the first six to nine months in the economy, they can say, oh, it’s got nothing to do with us. That’s all because of Biden.

And so I don’t know this is happening. I’m not saying this is true. I can see where that is something that could be a powerful dynamic in what we’re seeing right now.

On the other side, you know, we put a meme out there. It’s like the media is all, you know, everything’s great, economy’s great, economy’s great. And then they change the chip in the brain and it says Trump.

And so now everything is recession, the economy is terrible, stagflation. And, you know, I’m not out here to tell you this is vast media conspiracy. But it is striking how quickly the narrative went from everything’s great, most, you know, strong and resilient economy, all this stuff to all these concerns.

So I guess what I’m saying, the defensible thing to say here, Kai, is that economics is not all about economics. There is always politics here. And it is naive to imagine that, you know, the simple economic statistics and facts will be all the basis of decision-making.

And yes, there are powers in struggle here in the same way that on the geopolitical stage. You know, the Game of Thrones, you know, as horrible and violent and ugly as that show was in some ways, I actually think it was a public service in that it reminded people, you know, how power struggles, how vicious and bad they can be and how they affect the ordinary person. I just – I wish they had done that without any magic.

If that had been the history of the War of the Roses or something like that, you know, the Hundred Year War, without dragons or magic, then it would be a clearer message to people. Remember, you know, your grand leaders on either side, they’re not your friends. Well, then it would have been House of Cards, and we’ve seen that show, and it was award-winning.

Yes, yes, House of Cards, yes. So we’ve seen that show. Kevin Spacey and everybody else won huge awards.

By the way, that was a rip-off of a BBC show by the same name much earlier. It’s like The Office. Americans can’t come up with anything original nowadays, can they? Spider-Man 27 coming to a theater near you.

I think there’s a Captain America and a Red Hulk played by Harrison Ford coming out this summer. So we’re all in for a doozy here. Great new ideas.

Unemployment. Quickly, one more question on the unemployment side before we move too far away from it. Can the private sector absorb what’s happening in the public sector, meaning all the layoffs? Can we absorb those, and what happens to those government employees that are being axed right now? No.

Yeah, no, it’s a good point. There’s not enough growth, I would say. I mean, think about it.

You’re a lifelong bureaucrat. And you’ve been following the three-ring binder of how not to get in trouble. And do the minimal amount of work to collect your paycheck.

Maybe they’re – sorry, let me go beyond that. I know for a fact I have met persons in government who sincerely cared about their job and doing their duty for the American public. They really thought of themselves as public servants and they cared and they took pride in trying to do the best they could for the people.

But for every person I’ve met like that, I don’t have statistics here, but it sure seems like it’s 49 or 99 that were the other way. I think a lot of those people are going to be very difficult for them to find jobs in the private sector. I’m reminded of the first Ghostbusters movie, talking about multiple sequels.

You remember the first movie when they get fired from the university and one of the Ghostbusters says, oh, you don’t know what it’s like in the private sector. They expect results. Good point.

I love Bill Murray, Dan Aykroyd, phenomenal, big fan, big fan. Now, good stuff. Trump session.

We need to talk about the Trump session because Powell spent a few minutes on discussing recession indicators and probabilities, ticking up to 36%. He dismissed them. They’re ticking up, but they’re still low.

Jeff Gundlach the other day, I think on March 12th or 13th, he put out a webinar running through some data. He expects 60% recession indication, so way, way higher than Jerome Powell. What camp are you in, Lobo, and where would you put the recession odds right now? Well, remember that the Fed never predicts a recession.

It has predicted zero recessions ever. They can’t. If they did, they would cause it.

So, I mean, it’s just a given. He has to either lie or dodge or in some way, you know, run off stage. He just can’t answer that question honestly, no matter what, and it’s not reasonable to expect him to.

I think Jeff Gundlach is very smart. He’s one of the few mainstream financial types that I have a lot of time for. I listen to him routinely, and I find him very insightful.

Where he gets his numbers, I don’t know. If we put any weight on that theory, it’s just a theory that I mentioned before, of Team Trump actually wanting to cause the pain as soon as possible, to get it over with, rip the Band-Aid off, and to blame it on Biden, then I can see why you would have a very high odds number on there. That would actually make sense to me.

But even without that, markets hate uncertainty. If I’m a businessman and I make widgets, and I don’t know if my input costs are going to be tariffed or not, I don’t know if my competition overseas is going to be tariffed or not, or even if Trump says he will tariff them, what if he comes up with a deal? It’s all the art of the deal. And I build a new factory to double my widget production, and then there’s no tariff.

And now I’ve got overcapacity, and I can’t compete with the factories in Thailand or wherever. So I do think that this kind of thing slows economic activity. The decision-making needed to continue the growth.

Who wants to make any decision here? Not to let Powell off the hook, but bring him in on this. One of the things I found most striking about this press conference is, I don’t think I’ve ever heard a public official say, I don’t know, or we have no idea, so many times in 45 minutes. I mean, that we don’t know, or there’s high uncertainty, or it’s very difficult.

I mean, that was in his answer to pretty much every question. And at one point, I remember him saying, you know, okay, we’ve got these projections and things. But he said, I don’t know anybody who’s confident in their projections.

Like, wow. You know, this is the frickin’ Federal Reserve with their 400 PhD economists, and he doesn’t have any confidence in his projections or any of his teams. So, and that’s the frickin’ Fed.

So imagine you’re the CEO of Widget Inc. How the heck do you make decisions in this environment? And if you don’t, you pull back your horns, you’re defensive, you know. Maybe you don’t fire, but you’re not hiring, you’re not building, you’re not expanding.

I mean, to me, that, if nothing else, never mind the specifics of, oh, this blows up, or we didn’t have the copper after all, or all these things, yes, that can happen. But just, you know, what is happening now, the uncertainty happening now, I think that is a recessionary force. And let me say one more thing, because I’ve had people, you know, write in or express their opinion.

Hey, Lobo, you were right about the hard landing. The recession is just coming later than you projected. I have to say thank you, but no, that’s not right.

The recession that I called last year and was wrong about, at least on the undeniable recession front, was based on the COVID knock-on effects, not the new uncertainty based on, you know, the Trump changes. So if the Trump changes induce recession, then I wasn’t right. No, it’s interesting, because he used the word inertia, which I actually quickly had to Google, so I understood it.

But it makes sense, and it doesn’t make sense, because they adjusted their growth and inflation expectations, but they said, well, we don’t have any clarity, we don’t know what to do, then why adjust? Because he said at one point, I think I wrote that down here, no hurry to adjust policy stance, prepare to wait for greater clarity. Why adjust the numbers, then, if there’s no clear visibility? That’s not what inertia means, by the way, but you’re talking to a former physics student, so I can’t let that one slide. But yes, clearly what you’re saying, and I agree, I don’t want to have a Jordan Peterson moment here, but what I hear you saying, and I think I agree, is that is bullshit.

What kind of reason is inertia to not do anything? And you’re sitting here telling everybody there’s all this uncertainty, we don’t know what’s going to happen, we have no confidence in our projections. That sounds like a reason to be very cautious, err on the side of caution. So in my view, it’s clearly just an excuse.

He was asked very directly twice, how can you project higher inflation and still say you’re going to cut interest rates twice this year? And the answer was inertia. Oh, it was already two cuts, so we just didn’t change it. That’s a bullshit answer.

That’s not a good answer. Your data’s changed, your dots changed, your projections changed. You’re talking about chaos and uncertainty, and you do nothing? And you project doing nothing different? That just doesn’t pass the smell test.

Yeah, and if you expect higher inflation, and I can’t remember if we talked about it before in the record button or at the beginning, Lobo, but why not raise rates then, if he expects it? Is it just a lag effect that he knows, like if I raise rates now, they won’t take effect anyway? You can’t say that, but yes, we did talk about it on camera, and my answer is that they’re throwing the dollar under the bus. They have the dual mandate. What this is telling us, without saying so in so many words, if you want to read the tea leaves as it were, my interpretation is they’re telling you we’re going to throw the dollar under the bus, they’re telling you inflation is not job number one, we’re more worried about jobs, the labor market is the job number one now.

Makes a lot of sense. Let’s stay on the dollar for a second. Let’s zoom out from the press conference here real quick, because what you just said sort of fits the narrative and the goal of the current administration.

They do want a weaker dollar. Well, that’s interesting, because Trump, sorry, but Trump has said he wants a strong dollar, but it’s kind of like marketing or something. He says that, but all of their actions are really saying, no, we want a weak dollar.

Exactly. Is it the currency or the brand? I think we need to distinguish that. Yes, exactly.

Strong brand, weak, yes. All right. So it really plays into their playbook.

So really, really interesting. Maybe quickly, before we get to some audience questions as well, because I think we covered most of the topics from the press conference and from the commentary, I just want to talk market reaction real quick, and just let me get the latest numbers here. Gold up only 0.45%, but we’re at an all-time high yet again, 3045.

We were even a little higher earlier. S&P 500, 1.1% up, 5677. Bonds pretty much flat.

What do you make of that market reaction in general, Lobo? Well, it’s interesting that it’s fluctuating. I mean, the dollar moved a lot, and now it’s kind of rebounding. So it’s interesting to see the markets digest all this stuff.

But I do think that there’s, well, one, we saw relatively mild or little reaction on the FOMC press release. And then it was, as usual, it was the press conference that really set things going. And it’s funny how strong that is.

The Fed basically, when you look at the tape, right, and it comes across, rate cuts unchanged, dots unchanged. Ooh, okay, everything’s fine, nothing big. But then when you start looking at the details, like, well, look at this.

They’re slashing their GDP forecast. They’re raising their interest rate. And then Powell’s performance.

So I guess my takeaway here really is the Fed has said and continues to say, and now even more so, it’s data dependence. And that catchphrase wasn’t highlighted so much, but I think it was pretty much understood. When you have all this uncertainty and when you say, I don’t know so many times, what you’re saying in that case, we don’t know, we have uncertainty.

So there’s no theoretical framework. There’s no plan that you’re adhering to and then that you might be forced to deviate from if things don’t go according to plan. We don’t know what’s going on, so we have to be data dependent.

And that exacerbates market reactions. If the Fed is data dependent and they’re going to jigger the money supply, the life’s blood of the global economy and finance, then it shouldn’t be this way in an ideal world, but it is this way in the world we live in. So market participants react strongly to the Fed, and it makes us all data dependent in the same way.

So the data comes out. It’s inconclusive. The market wobbles a little bit.

It starts to seem more like this. The market goes charging in that direction, and then they have time to look under the hood. I don’t know if you’ve noticed this, but in interviews, you haven’t used it yet, so kudos to you.

But you see how these people talk, oh, well, if we look under the hood, this other data point says this. They look under the hood and they see one thing, and they think, oh, I’ve done such a great job looking at it. Looking under the hood should mean having a thorough understanding of whether that engine is working right or not and what’s wrong with it, is it burning rich and blah, blah, blah.

But anyway, I digress. Once the market gets to look under the hood as much as they do and they start saying, oh, wait, this doesn’t fit the narrative. So you see these sudden reversals.

But overall, maybe what’s happening is, as we said at the very beginning, my read is that while there’s a lot of hawkish looking things about this, particularly the higher inflation expectations, there’s a lot that is, if not dovish now, but dovish implied. Like all the bad news, all the weakness, bad news is good news. So I think that despite what Powell said, the message between the lines was the Fed put is here, and that’s dovish.

Explain the Fed put. That was my next question, Lobo, for you, like talking about the Fed put. What is it? What does it mean? What are the implications? The simple version would be if the market turns south, the Fed will charge into the rescue.

And the reason, you know, the famous Powell pivot in, what was it, late 2018 or 2019, I forget which one, after the paint drying, right, and then suddenly the markets went south and the Fed felt suddenly compelled to change its course. That’s the Powell pivot, but it was an example of the Fed put. Or plunge protection team is, you know, maybe a more conspiracy theorist way of putting it.

A more respectful and mainstream way of putting it would be that Powell is cognizant of systemic risk from extreme financial shocks. So he’s not just propping up the market, but if the market melts down, that’s bad. It makes the wealth effect go into reverse and it hurts people, so we can’t let the market melt down without doing something.

So all of these are different ways of saying that the Fed has trained investors over recent years to interpret bad news as good news because it means the Fed will adjust policy in a way that’s beneficial for financial markets. Now, in that same context, the Trump put, same thing. Ed Giordani said that while the Fed put is on hold or standby, the Trump put is kaput.

What does that mean? Like, should the market expect any, you know, saving moves from the new U.S. president here? I think we might be getting too cute with our puts and terminology here. I think it’s very dangerous to think any of us know what Trump will do and what his priority will be tomorrow. He has surprised even his supporters.

So I just think that’s very dangerous. But it does seem like if there is pain, enough pain in response to something that he proposes, that he’s willing to walk things back. And we’ve seen this with the on-again, off-again tariffs.

It seems like, and I don’t know, like I’ve never met him, so I’m just looking from the outside. It seems like he’s not only prone to bombast and braggadocio, but I think there’s a method to the madness here in that he’s floating trial balloons and he’s seeing how people will react. And when he says something outrageous and 51% of the response is, yeah, go for it, then it’s like, well, okay, well, outrageous.

It wasn’t as outrageous as we thought. And if he says something outrageous or does something extreme and there’s a huge backlash and, you know, in my world, it’s striking to me that, you know, he jumped in the aluminum and the steel and all these tariffs. But with the copper tariff, there was no tariff.

It was, oh, we’ll study it. And I just think that’s interesting because I think somebody must have got hold of him and said, you know, sir, he likes to be called sir. Right? You know, we don’t mind this stuff and we can’t mind it fast enough.

If you slap a tariff on this, it’s going to hurt us. So we’re going to study it, right? Anyway, he does seem willing to walk things back sometimes. And so is, you know, call it a put, I don’t know.

But it’s dangerous to count on any of this. When it comes to Trump’s measures, I really, I don’t want to front run any of them. I want to see what actually happens.

Maybe changing gears a little bit, different topic here, Lobo. Geopolitics. I was paying attention.

I missed the last 10 minutes of the press conference here. Was there any mention of geopolitical impacts? Because I know Powell talked about it last time, but I didn’t hear much of it this time. I didn’t hear much of it either.

And he tends to say, well, that’s beyond our purview. He tends to say, well, yeah, we have models, we have scenarios, but we don’t know what’s going to happen. Which is actually not an unreasonable thing to say.

You know, when it becomes bullshit again is when, you know, there’s a war in Europe and they’re like, oh, we have no opinion on that. Of course they have an opinion. You know, we’re not asking you to predict the outcome of the war.

We’re like, well, what are the financial implications for the United States? And to the question that we had earlier, I don’t know how far you want to go in this direction, but I do think that the changes that we’re seeing are important. I think they’re investable. And I don’t just mean European defense contractors, though that’s obviously a big deal.

The short version is that I just don’t see Europeans or other people, you know, Canadians, let alone the Chinese or anybody else. I just don’t see people ever going back to looking at the United States in the same way they did before. Even if Trump is out, you know, at the end of his term.

And even if the U.S. swings Democrat again, or there’s an anti-Trump elected, some globalist person who just loves everything, every WEF proposal there was, right? I don’t think Europe looks at that and says, oh, everything’s fine. We can go back to relying on the United States for everything. No, I think that’s a one-way door.

The scales fell from their eyes. You know, they woke up, smelt the napalm. And that has significant long-term investment implications.

That’s not just a, you know, a flash in the pan right now kind of thing. So I do think this is very important. But no, I didn’t hear anything from Powell on it.

No, okay. So I didn’t miss that part either. Okay.

But maybe to expand on what you just mentioned, inflation expectations coming out of the Eurozone and for – no, sorry, let me rephrase that. Apologies. Europe is going to spend a lot of money over the coming years on defense, green spending, and whatever other concessions we had to make to get the defense spending over the line here.

But how is that going to impact inflation expectations in the U.S. and maybe even globally? Well, okay. That was one of the questions that came up, by the way. We all look at the U.S. because, you know, the U.S. markets obviously are major drivers for everybody around the world.

And commodities are still quoted in dollars. So the fate of the dollar matters to many of our investments as resource speculators. So I get that.

But let’s go back to Europe for a second. I mean, you’re German. You tell me, how do you feel about loosening the debt break and the German spending going up by a trillion euros almost? This is huge.

Of course it’s inflationary. And, of course, some technocrat pushes back. The moment I tweet about it, oh, well, only if they monetize it well.

No. If they’re going to spend this money, it’s going to have an impact. And I do think, you know, what we’re seeing now is just the beginning.

So, as I said, I think this is an investable trend. The takeaway global, if you’re not in Europe or even not in the United States either, is, you know, global rearmament. And despite Doge, you know, fiscal conservatism taking a step back.

This is inflationary globally. And the weakness that we have seen, you know, the term American exceptionalism seems to have gone away. But remember that? Everybody’s talking about American exceptionalism.

What did that mean? It didn’t mean, oh, yeah, Americans are better than everybody else. No, it meant that there were problems in the global economy except in the United States. It seemed, you know, that exorbitant privilege of the United States was protecting it from bad news around the world.

That just seems to have gone away over the last month or two. But where does that leave us? Well, it’s not that the problems went away. It’s that American exceptionalism went away.

So, in my view, these transformational geopolitical changes that we’ve seen have economic and financial implications that are serious, that are enduring. And you add that on top of the economic weakness. And I think, you know, I don’t know how you say money helicopters in German or Czech or Polish or whatever.

But I think we’re going to see them everywhere. And I do think that’s inflationary. It’s bullish for commodities selectively and for other specific investment types.

I got a question here from the audience. And, by the way, Geldhubschrauber is the German word. So, Hubschrauber.

For money helicopters? Yeah, Hubschrauber is a helicopter. Oh. Okay.

Okay. All right. So, we got a question here from the audience.

And I had to read it three times, but I think it makes sense to ask. Like, how does the triangle of price between the dollar, gold, and euro might get affected by a weaker dollar? You know, there was a time where you could chart gold and the euro, and they mapped very closely. A couple of years ago, there was just this time where, you know, alternative to the dollar.

And you could see them moving very closely. I don’t remember exactly when this was. But I remember there was a time where I would look at the euro first and then look at gold and say, oh, yeah, we’re still there.

So, clearly, there’s potential for that relationship to be strong again. But at the end of the day, I think it’s a mistake to over-mathematize this or try to come up with some kind of algorithm to trade on this. Because the fundamental reality here is that what I just said about, you know, the global situation and the end of American exceptionalism and the main consequence being inflation, that’s bad news for all fiat.

And which fiat is, you know, winning the race to the bottom, right? Which is a bad thing, right? At any particular time, you know, on a Forex market, it’s huge. And you’ll see, you know, big swings in the Forex market. But the reality is they’re all losing, right? This isn’t new.

This is, you know, gold bugs know this for a long time. I call this phenomenon the wrong trousers. It’s a mistake to look at the DXY, you know, the dollar and Forex markets, as somehow being an important indicator of the strength of the dollar in the real world.

It’s only an indicator of strength versus other currencies. And if they’re all going down the circular drain, you know, that doesn’t tell us really much that’s valuable. Okay, if you’re a Forex trader, you know, which one’s winning the race or losing the race, yeah, okay, that matters for your trades.

But for me, as a metals and mining guy, it just tells me one thing, you know, that I want to hold on to real assets like metals that I can hold in my hand. And beyond that, sure, you know, real estate, anything that can’t be printed by the government. And I have to say that, you know, that not be printed by the government includes Bitcoin.

I’m not a huge fan of Bitcoin. I’m not telling anybody to go out and buy Bitcoin. I’m just saying that that definition of being something that can’t be printed by governments, unless it’s hacked, right, that definition has to include Bitcoin.

Yeah, no, I agree, Lobo. Maybe one last question from my end, and then we’ll put a bow around this conversation here. But 3050 gold, what does that tell you about the world we live in these days? Actually, it does tell me something important.

Of course, watch me say this, and then gold tanks and goes down to 2,700 next month or something. But I had been thinking that a nice big round number like 3,000 could be a trigger point, could be a critical level that if we hit 3,000, that we bounce off it and then go back down, that it could trigger profit-taking. A lot of people who had targets of 3,000 or maybe 3,100 were some of the targets that we saw, mainstream targets, a year ago.

So you start hitting these targets, you’ve arrived at your destination, you’ve achieved your speculative purpose, it’s time to take some profits. And if that triggers a downfall that triggers stops to go in and other people start selling, it could become a cascading event where just nothing else, nothing in the real world changes, just that technical point turns into a massive correction. Or it could be the opposite.

It could be that that very same news, 3,000, gets lots of headlines, gets people excited, Johnny Come Lately is piling in, it could be the next thing that takes it up to 3,500. My view was going into this year that that could happen, it could go either way, 50-50, no way of knowing which it is. So going from 3,000 to 30-50, I’m not saying, I want to be careful here, I’m not saying 30-50 means 3,500 is the next stop.

But I am saying that my previous analysis was up or down, and right now the data is saying up. So I have been saying in recent weeks, last month or two, that I didn’t know but my wolf whiskers were kind of inclined towards the upside, and we’re getting early confirmation of that now. It looks very bullish, Kai.

That’s all I can say. Yeah, I think one of our thumbnails on one of the YouTube videos we’ve done with you was 3,400 is next. So we’re trending.

I didn’t say that. I’m not sure where it came from. It said in my thumbnail.

I didn’t rewatch the entire conversation. The reason for that was at the time that we recorded, I remember this now, the reason for that was that that would be a real all-time high using CPI in the 1980 peak, in January of 1980. If you adjust that for CPI, then at that time it was 3,400 and change.

And by the way, that number is now over 3,500, which is why I throw that number out. Okay. Maybe that’s a new thumbnail title then.

No, I’m kidding, of course. Lobo, we’re finally getting some questions in here. Where does Age Silver fall into all of this? Maybe that’s the very last question, Lobo.

I want to keep this below an hour. I know everybody’s busy here and don’t want to drag this out too long. Despite my Darth Silver mantle, I’m bullish on gold.

I’m bullish on copper. And if silver has been acting as sort of an alloy of the two, financially speaking, how can I not be bullish on silver? And, yes, silver underperforms. Not today.

I haven’t looked at silver right now since the Fed meeting. But yesterday when gold went up to 30, 35 or something like that, silver got within kissing distance of $35. And then it backed off.

And I think it closed at 33 and changed for something very disappointing. I understand that. On a day-to-day basis, if you pay too much attention to these prices or exchange rates versus the dollars, I think of them, you’re going to pull all your hair out.

So I encourage people not to obsess over that. If you step back and you look at the trend, silver is correlating very highly with gold again this year, more than copper, which is good news. If you’re bullish on gold, then it’s hard to be anything other than bullish on silver.

And I’m also bullish on copper later this year. So I see it as a win-win here for silver. I also see that silver has more upside to hit a nominal, let alone a real all-time high.

All of that is good. But just don’t forget. So I’m bullish on silver.

But just don’t forget that it does still have its industrial side. If there’s bad news on the industrial side, that will affect silver more than gold. And you ignore that at your own peril.

Absolutely. Lobo, thank you so much for your time. What a wonderful live discussion as always.

Thanks for coming back on. And without asking a rhetorical question here, but where can we find more of your work? Well, you can find it at the Deutsche Goldmesse. Of course, that’s what I should answer.

I need to promote myself better. Yeah, you should. But to the audience, I assume your audience includes a lot of people on your side of the pond, even in Germany.

And I love going to these conferences where I can meet the audience and answer their questions and shake their hand. So by all means, I usually hold an event for readers at conferences like yours. I’d love to meet you there.

But until then, right over my head, you can see independentspeculator.com if you sign up for our free weekly newsletter. You may or may not agree with everything I say, but I can promise we will not spam you with a flood of daily advertisements. I hate that.

Fantastic. Lobo, again, thank you so much for your time. Really, really appreciate it.

And everybody else, thank you so much for tuning in to our live discussion here about the Fed and the Fed press conference, Jerome Powell’s statements, and of course the nothing burger we more or less got out of the Fed here today. Although the commentary, the press conference was way more interesting than the statement itself. So thanks so much for tuning in.

Really appreciate all the questions, all the answers by Lobo. So leave a comment, leave a like. We’ll be back with lots more.

I’m going to bed. I’m tired. I don’t know what I’m saying anymore.

So thank you so much. We’ll be back with lots more on SOAR financially. Thank you.