Chris Whalen: We're One Bad Treasury Auction Away From Trouble
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- เผยแพร่เมื่อ 6 ก.ค. 2024
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Today's guest wrote the book "Inflated: How Money & Debt Built The American Dream"
In it, he wrote: "The first rule of any fiat system is no fiscal deficit"
Well, the US -- and virtually every other G7 country -- is breaking that rule six ways to Sunday given the unprecedented record levels of deficit spending currently underway.
Does that mean we're headed for trouble?
To find out, we'll ask the author himself, Chris Whalen, Chairman of Whalen Global Advisors LLC and expert on the banking, mortgage finance and fintech sectors.
#inflation #debt #bankingsystem
0:00-4:35 The Threat Of 'Too Much Debt'
4:36-7:24 Will Will Adopt A Smarter Course In Time?
7:25-9:37 The Eurodollar Market
9:38-25:09 Deficits & Inflation
25:10-29:08 Where Is Inflation Headed?
29:09-37:30 Banking System & Recession Risk?
37:31 Market Outlook
_____________________________________________
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My company just let go 2k (15% of staff) employees yesterday, and we're relatively insulated as a payroll/workforce management company.
As much as they act like the economy is doing well it's clearly shrinking. And i think after the election you're really going to see the wheels finally come off as the narrative is no longer necessary.
Bidenomics to pump economy with gov money to keep GDP above zero resulting in inflation. Blame it on Russia. Gov sector is the only sector growing besides health care. It would be hard to wind down when Trump takes over.
My guess is the UKG layoff was driven by Hellman & Friedman and Blackstone, not Aron. The PE guys will pay themselves a dividend and protect EBITDA at all cost.
true and unfortunately they'll blame Trump.
You may not be as insulated as you believe. After all, as businesses fail, the need for payroll processing companies will decline, maybe not go away completely but definitely shrink. Automation will most likely eliminate payroll processing jobs completely with companies like ADP and others.
Fully agree
Please bring back Chris Whalen, Adam. An excellent thinker and speaker from the banking side. I always enjoyed listening to him and his perspectives.
Mr. Whalen projects confidence in all his opinions, yet he was the guy who touted New York Community Bank. He bought the stock in 2023 and apparently didn't see the problems coming. So his insights may not be as sound as he would like you to believe.
Or the level of corruption goes to the top
The bears always sound smart.
They're all like that. And if anyone tells you they never made a loss-making trade or took a loss-making position I will show you a liar. The point is to learn from it and to spread risk because everyone's an armchair expert with their theoretical 100% correct trades.
The issue is how coherent, integrated, well informed and inclusive the experts are being and what the overall reliability is of their judgements.
It's absurd to expect 100% correct calls and making that expectation marks you rather than them. It takes years of experience to understand this and there is no substitute for cultivating hard work and objectivity.
Good economy = stocks go up, bad economy = stocks go up.... nothing matters anymore, just keep borrowing and building that debt pile to infinity, i.e. print more money to existence, which then finds its way into stock prices. That about sums it up in my view.
Don't bet on it...The bubble can't inflate for ever. One of Schiller's identifiers of a bubble is new era thinking, that a downturn is impossible.
@@CrashBr0Yep I agree with that, my sarcasm probably didn't come through the computer screen too well, lol... however what I said is the predominant view and it could be years before things matter again
The question you must ask your self is What course correction can I make now? Then act. Respect 🙏
It may seem like “nothing matters”… but that’s not true. Inflation matters, a lot. Why not just let inflation run higher? Because no investor buys a bond paying 4% if inflation is 6%. That’s a 200 basis point loss, guaranteed.
Until the selling begins and everyone tries to sell. You can’t eat stocks. We are very close to a tipping point
I would submit, and I am not the only one to say this, that the Fed is not really very restrictive.
I agree. Current setup at 5% is low key stim. Real slow.
True... but more specific what they do doesn't really matter if congress and the treasury are spending like druken sailors (stealth QE) that's the real problem. Almost no one tracks treasury auctions. It is not reported in the main stream news that often. It is something folks have to specifically look for and understand. What I have been seeing is terrifying.
@@bpb5541 If someone is retiring in a few months at 65 with no pension, very risk averse and not collecting SS until 70 which will cover 70% of income how would you invest your money? currently 25/75 mix with most in money markets.
Adam... I had that class in 12th grade at John H Reagan HS in Austin, Texas in 1986. It was a class required for students that were working internships prior to college. Mr Schultes taught us financial literacy with brutal honesty. The Man ran the class like the most tyrannical boss you'll ever work under. He was an legend. The HS was in a rougher side of town. It's since been cancelled for its name, and likely the class has been replaced with a personal identity course.
You were very fortunate. I'll wager you look back on that as one of the most practically valuable classes you ever took. True?
This guy makes up history: the second half of 1800s the US had deflation, NOT INFLATION. Remember the guy who said he didn't want to be crucified on a cross of gold? He wanted silver. There's a certain narrative that's embraced by wealth, cause it serves their interests. That's what this buy is all about.
We had inflation due to excess gold from the western gold rush flooding the market
The south was Gaza in a deep recession. Tariffs protected infant industries. They caused inflation in the north.
This guys is obviously Jewish and fails to mention the Jewish role in inflation.
William Jennings Bryant
@@kevinobrien9271 Bingo!
I walked into a Pizza Shop in Washington Crossings ,PA. and said I'd like that slice of pizza. The lady sliced it off, put it on a paper plate and brought it to the cash register. She rang it up at $6.00. I said ma, I can't afford 1 slice of your pizza, then walked out.
I'll bet you were invited to tip on top of that $6
How about 3 pancakes for 23.99 at a local dive restaurant?
Where’s the punchline? I thought u we’re telling a joke😮😅😊😢
Perhaps rather than increasing taxes on the people how about decreasing spending by eliminating forever wars and payoffs to the MIC, Israel, Ukraine, et al.
And hand the world over to Xi and Putin. All will be real rosy then.
You don’t learn this in school because teachers don’t know themselves. They bank on a pension- which may or may not help them in the future.
I do teach this stuff to both middle and high school students. My kids know we are a debt-based economy, and we track the dying dollar since 1971. Kids understand it, too. Too bad their parents don't.
I know at some point a bull market ends and a bear begins, it goes on and on... I have a 7 figure ballpark goal and I intend spreading across maybe 100k - 250k on plummeting stocks, my question is how can I know when a market bottom has been reached?
You won’t know. Just spread everything across different funds.
in my opinion, some financial situations can be handled on your own if you research enough, while others are best navigated in consultation with a financial advisor
Agreed, partnering with the right advisor is invaluable, my portfolio is well-matched for every season of the market, and recently hit 140% rise from early last year. I and my FA are working on a 7-figure ballpark goal, tho this could take another year.
@@StephenTho42 mind sharing info of this person guiding you please? truly appreciate the implementation of ideas and strategies that result to unmeasurable progress, thus the search for a reputable advisor
Can't divulge much, I delegate my excesses to someone of great expertise ''Katherine Nance Dietz'' preferably you can look her up on the web, her qualifications speak for itself.
Even if you eliminated all of government, except entitlement spending and the military, US would still have a very large deficit. Every penny the Congress gets to vote on is now borrowed money. This is incredible and cannot end well.
Is that even a good goal though? Coolidge and Clinton both balanced the budget and reduced the national debt. The end result were the worst economic periods in the past 100 years. Public debt is private sector savings.
Tipping point…Locally, regionally and Globally. Perhaps we don’t fully feel the pain evenly but sure as hell it’s coming!
Show me the incentive and I will show you the outcome - The Late Charlie Munger - RIP
Oh, my goodness. Our needs and Social Security are breaking the economy? Maybe we should stop financing wars and the military -- trillions of dollars worth.
Exactly. Plus have a flat tax so the rich actually have to pay their taxes
Spot on to give tax money to foreign countries. Why to buy leverage.
Think what we could have done with the hundreds of billions we've given to Ukraine and Isreal over the years.
and increase the social security income cap! it's WAY out of date.
Excellent guest. Useful and interesting overview of national finance. My hope is for the rise of the new global majority and an end to the present system dominated by a small group.
what the heck is that background behind adam??
😂
It’s a conversation piece apparently it’s working😂😂
its oasis cube bonzai puff ball tribles from star trek residing in an unfinished wall, complete with led lighting. simple dimple. i wonder if he feeds it quadratritacailey?
@@randywhelchel4674That conversation is not complimentary 😅
Clearly that's the rough board wall with some insulation protruding through. Drywall hangers must not have been through yet.
Great host; great guest. Chris Whalen is the knowledgeable, “no spin zone.”
There are lots of things that can go wrong. A failed treasury auction isn't one of them.
Mr Whelan's depth and breadth of know and history is formidable. Thank you for inviting him. I learned several things about the true history of our money system that were incorrectly presented in college. Thank you again.
Doug W.
Asbury Park NJ
Thank you for choosing such credible guests and asking the right questions Adam! I didn't want this discussion to end. Please get Chis back soon if you can.
Tank you to Chris for returning to finish this interview!!
It was worth it, Thank you Chris!!
Really interesting, I'm inclined to agree with you
Nice show with Adam and Chris
Everything is nice and calm before a Tsunami 🌊.
Another amazing interview. Chris is truly a genius.
the debt can not be repaid, it is just mathematically impossible
It will be repaid. Eventually someone somehow will pay the price for what we have allowed. I guarantee it.
It will be paid through the inflation tax. Eventually the debt will be accounted for by the debt going to infinity as the dollar goes to zero. This is how debt has been 'paid back' historically - through hyperinflation. There are many historical examples of this, and in every case the people suffered badly.
It will be defaulted on.
All things end... even super powers. The death of a super power has always been tied to the reserve currency status ... america has been losing theirs for a while now.. and it is picking up steam. Americans are spoiled little brats ... they are not ready for that scenerio. They might burn everything to the groud when they can't afford housing or food.
@@_Ekaros What assets will be defaulted on? Is it safer to purchase corproate debt or equities?
Who else has been watching these fintubers for four years now and is starting to notice "holy shit they have been saying the same stuff for this entire time buuuuut its not actually happening"? Starting to suspect that these are just worthless videos and the system is too complicated for anyone - even the 'experts' - to actually understand.
I’m there with ya, I drank from the fountain too.
There is a classic quote that says, paraphrasing: "If you are not totally confused about the system then you don't really understand it" I agree that these videos veer to a tone that suggests financial implosion is imminent. I tend to look at it in the prepare for the worst and hope for the best scenario, or something folks can navigate thru. I saw the panic in these buffoon's eyes running the system when it blew up in 2008. I agree with some that make the case that the system as we knew it was dismantled at that time.Everything up to now has been patching it and the real disaster has been buried amongst a cadre of criminals with the threat of bodily harm if the truth is exposed. When it happens it will be so fast that people will get whiplash from it. If you don't believe that theory then you must watch very carefully for what you could analyze as the start of a "controlled" demolition. Straight up, the numbers don't lie and the math don't work. I watch these videos because I believe many of these people are slick enough to have unraveled the basics. if they make a buck or two I have very little problem with it.
i noticed that too. might as well be the same guy
A number of factors come into play here: 1) a lot of people have a stake in financial markets, meaning they have a desire to understand and invest accordingly, so they click and subscribe: 2) financial markets are cyclical, recessions and crashes are bound to happen; 3) doomsday scenarios always find more interest than rosy or “things will go sideways for a while” type predictions, so there is an industry of apocalyptic predictions and you know what, one day the market will crash and they will all come out and say “just as we predicted.” In the meantime, do not take anyone seriously unless they get both the direction and timing right consistently and I am guessing that the ones who get both the direction and the timing right (if they even exist) are not making TH-cam videos. All I get from these videos is that I chose the wrong profession, I should have been a “macro analyst” and bullshit my way through life.
You dont think 20% inflation in 3 years is impactful? It will be much worse as they bleed off the 30+ $trillion debt.
Excellent guest. I think his predictions are spot on.
One of the best interviews ever. Love this Guy!
I take some of the criticism I’m reading here about this guy. Still, he’s obviously sharp and incredibly knowledgeable. Great guest. Good on Adam.
Currency does not really exist. The score of the game is not the game. The score is imaginary. The game is real. Breath is real. Credit is man made fantasy. The debt, credit, crypto is all imaginary. The US public debt is imaginary. The debt is fantasy. Gold is honest and real. That is why gold has lasted 4,000 years as money but currency does not last. Currency is ALWAYS printed to zero. Always. No exceptions. The US dollar will be printed down to zero. Guaranteed. The same will not happen to gold. Gold? Get you some.
I like you
Good practical insight. Thank you.
Thank you...........and there is real value in picking up books. 💪💪💪
Honest straight talk. Keep this guest!
Best economic channel !!! Thanks Adam
This was one of the best financial interviews I have ever seen. Thank you so much. I´d love to see more of Chris Whalen. Very smart, very educated, very informed and experienced person. Wow. Honest and authentic!
You don't get out much
Glad you enjoyed it!
@@adam.taggart 🙏
Excellent interview. Thanks, Adam.
My viewpoint is invest in companies that do real things or produce real things. I don't buy if the P/E is too much -- like the S&P index -- it's just way too overpriced for the value. I wouldn't overpay for a small business ... so why overpay for a large business?
Can you share 5-10 companies that you would purchase today at their current valuations?
Great take chris is very intelligent and super clear in his take .great guest !!
Excellent guest, excellent questions. Congratulations on the new background.
Thanks so much!
Great guest!! Chris may not look like the brightest bulb in the room but for the topic today he certainly is one of the best!
It's tough not being bright enough, isn't it - your projection gives you away.
Great interview, thanks. I would really look forward to a roundtable discussion on the risks of a civil uprising.
Great show, great guest.
👏👏👏
Great interview 👍
Yes, we're the age of summarizing, even by artificial intelligence! Such a good video.
Thank you for the rare case that you add time stamps.
This was an excellent interview. Thanks, Adam
Great interview! I would like to see interview with Randy Woodward.
Thank you very much...
Your new broccoli wall looks delicious with some ranch dressing.
There needs to be a more healthier assortment of other vegetables in Adam's salad wall.
OMG it looks like a big fat green snake to me!
Whatever he paid it was too much by 10
@@randywhelchel4674 I was thinking the same but didn't want be the one to break it to him
Yes, agreed. Whenever I have gone for a rustic wood look... on anything... never have I thought, "Do you know what this needs to complete the look? A large mass of green fungal mold growing through it!" 😂
I shouldn't rush to judge though. Maybe it'll grow on me. 😂 (Pun totally intended.)
I like that he ties things back to previous events in history. As for predictions...."previous performance is no indication of future results" or something like that. It will be an interesting time going forward! He is from the investor class and it shows in the way he speaks of those that aren't.
What is that behind Taggart?
check out some of the natural wood "pictures" - one is rather suggestive.
Chris is a great guy!
Nice new background Adam - is it a live plant/moss wall?? Very cool.
The Whalen-Yutani Corporation
sent this man.
Adam, your new background looks very impressive and unique!
Thank you!!
Excellent interview and excellent advice!
Véry interesting interview! 👍
But if we issued massive super long debt during COVID some parties would be sitting on massive losses which could be problematic, say if pension funds or banks piled into that.
Expensive homes is not a carpenters fault...corporates are still paying $20/hour
A few have all the cash.
Its time to steal it back.
Government used to raise taxes and/or cut spending to pay down the debt. Now inflation, the Hidden Tax, is the ONLY Tax. So spending has no limits.
Big fan of your show Adam. Regarding your background, respectfully, so far I liked the style of the Wealtheon one the best. The new one is ok, I love the wood, but Broccoli reminds me a little too much of what you see on the wall in walk-in restaurants. Perhaps try a design that's all wood?
At first glance, I thought Adam's new background featured a green boa constrictor 😮
Excellent guest...I learned something as always...thanks Adam...
Prices are up 25%, which means US$s have been depreciated by at least that much. Most likely people are using substitution to save on purchases. My barometer is how many people are shopping at Whole Foods. As long as people can shop at "Whole Paycheck," the recession will be postponed.
To the point of the national sales tax. It would be interesting to have the Steve Hayes from the FairTax organization as a guest. The FT-HR25 also eliminates capital gains and inheritance tax.
Debt has two sides that have to stay in balance. That is, the borrower and the lender each have to meet expectations. The current global financial crisis shows we are out of balance. Foreclosure follows as confidence fails.
Great new background
"The Fourth Turning is Here" by Neil Howe is a must read. Chris Whalen mirrors much of what is in that book. While I don't philosophically percribe to the "Doom and Gloom" scenario, it does open one's mind into future possibilities. Thankyou Adam and thankyou Chris. Happy Independence Day!
I always love a Chris Wallen interview! He is a font of information and his delivery is very easy to listen to.
Excellent interview! Please encourage a return visit by Chris 👍
Great show Adam!
Thank you!
Good morning and Happy 4th of July Everybody!🌞
Chris is a wealth of knowledge
Great guest and great looking backdrop, that I assume is your new set🤓 NICE!
Are we at a seven or a 9.5? Seems worse than a seven.
Thanks! Yes, it's the new background
You are already taxing us beyond belief.
Awesome guest!
That new backdrop has potential. Though my OCD is driving me crazy with those drawn cut lines. I'd be all over those lines with a little sand paper and erase them from existence.
Re. investing in stocks, Keynes (a very good investor and trader) said it best when he likened the equity markets toa beauty contest.
Credit to the guest for talking about income inequality. "...I worry about the rest of our society because they don't have that protection and we have to start thinking about ways to protect their income or we are going to have a political problem..." Some feel we are presently in the midst of political problems, I guess things can always get worse. Take it from the man.
Inflation in the prices of things you need and deflation in the prices of things you want is always a leading indicator of the system falling apart. Always.
His solution: national sales tax, raise income tax. I’m no socialist but this guys only answers seem to be making the poorest people bear the brunt of the burden
perhaps a VAT? and raising taxes on the 20%.
@@sandie77 any solution that doesn’t close corporate loopholes or puts a disproportionate burden on lower earners. VAT is just a sales tax under a different name. If you make over $100k a year, VAT or sales tax wont affect you nearly as much as it would someone making minimum wage.
What is the thing in your background?
Hi Adam, just trying to be helpful. You had mentioned the Walmart reordering story as being over 400% inflation. The story goes the original order was $145 and the reorder for the same basket of goods was $414 for an inflation rate of 185%. I like this channel a lot and just want it to maintain its integrity & accuracy with fact checking.
285%
@saucyrossy3698
The reason that fire watchtowers are built is so that forest fires can be spotted above the tree canopy from a distance. Without those towers, you wouldn't know there's a fire until it's right on top of you.
If it was your job to look for fires in order to protect your community from fire damage, do you announce the presence of a fire while it's still several miles away, or do you wait till it's close enough for everybody to smell it so that you know that they'll believe you?
As members of the community, if you don't understand the purpose of the watch tower or the reason why someone is standing in it, you might not have any worries when the person in the tower starts to get excited about something.
On the other hand, if you have knowledge of why the watchtower exists and the fact that wild fires are common in the environment then that knowledge helps you understand that when the person in the watch tower yells "fire!" It's time to take action to protect your property and fight the fire or flee if the fire's too big to deal with. Either way, you're prepared to deal with the worst-case scenario because of the KNOWLEDGE that you have.
If you've read this far and don't understand the analogy of what you just read, then you're probably screwed.
Getting close to 100K !!
So close!!
I’m predicting 100K by Labor Day 🍾🎉
Corps that can't make the hurdle rate will contract and more resources will shift toward the large corps who have refinanced at low longterm rates and /or have plenty of cash. This suggests further bifurcation of the equity markets. This suggests that some P/E ratios will expand more.
Regarding politics, for women reproductive rights may be the number one concern, along with inflation.
Corporations have been price gouging due to the stimulus package. Walmart is now lowering prices on certain items for to customers balking at the higher prices
All ppl need to do is stop paying for the greed
This guy is fantastic! Adam there are not enough thumbs up for this guy.
Make no mistake about it. The day of reckoning will come. The question is when.
Lots of inconvenient truths.
I have been able to use party chatt for autogear
Sales tax is horribly regressive. Woe to anybody who suggests one.
How do you tax 20,000,000 illegals who don’t file taxes? How do you tax drug dealers and criminals? National sales tax my friend
Inflation is killing us.
My grocery bill was $251.00
I cant afford that.
Bidenomics. Giddy up.
What? You are not still cruising off that 16 cents you saved on the '21 July 4th picnic thanks to Biden?
@@jwong8755 Do you know what inflation is? The amount of services or goods you buy is fixed. The amount of money in circulation is variable. You print 1000s of tons of greenbacks with nothing backing it, chasing the same amount of goods and services, then it takes a lot more of those greenbacks to buy anything. President Trump took office in 2017. By the end of his term four years later, the debt increased $6.6 trillion. He has stated he will do tax cutes, mostly for billionaires like last time. 54% of Americans own zero shares of any stock. How much stock do you own? None, like me? Why then would you want a capital gains tax cut? He will say what every republican president from Reagan on has said. That money will trickle down!! Been 40 years since Reagan said that. And it has not nor will never trickle down.
Shop at Aldi's.
@@MichaelHarrington17 we don't have Aldi in Northern California. At least not in Sacramento or the wine country
shifting public deficits to surplus would inversely cause private and/or foreign sector deficits, which would be highly undesirable. Public deficits mean more money creation/inflation, expansion. Private deficits means economic contraction, deflation, depression. Foreign deficits are simply untenable for a global reserve currency.
New background! hell ya!
🙂
Adam you really need a sound diffuser behind you instead of the broccoli and burls. I don't think it's an accident that smart guests have bookshelves behind them. It would be a minor acoustic tweak to perfect an already great channel!
Financial advisors like your guest have been saying the inflection point is imminent for years. Eventually one of therm will have guessed right and can brag about how he predicted it. I have done that myself and was right a few times but I don't tell my friends and family that it was anything but a lucky guess.
Phil silvers is on today?
Honest strait