S2 E5: Central Bank MoneyFest 2024

Twenty-two global Central Banks held meetings this past week to decide what, if any, changes they would make to their monetary policy stance. More than one-third of those Central Banks (8) voted to CUT their official short-term Policy Rate, TWICE as many as voted to raise rates (4), while 10 of 22 left policy unchanged.

Of those Central Banks that left rates unchanged, the majority of them communicated belief that they would be cutting rates this summer or fall, as global monetary officialdom is starting to ease policy before inflation actually declines to their target rate, thereby "acquiescing" to higher general rates of inflation, via higher lows to be set in year over year inflation rates. 

Greg discusses all of this and then some, particularly as it relates to the US FOMC and how their move this week to prepare markets for EASING of "Quantitative Tightening" is the first step towards a full-blown policy reversal, which in turn is supporting asset prices, specifically stock indexes and commodity markets, like Energy. Listen to find out which specific markets to which Greg is allocating his client's money. 

Transcript

Speaker 1: 0:02

Hi, greg Weldon, here I'm your host and this is Money Markets and New Age Investing. And wow, this one, we're going to call it Global Central Bank Monetary Fest 2024. This was a week when you had 22 global central banks meet with policy decisions hanging in the balance. We're going to go through this, but what's interesting here is from a very heavy preponderance of rate hikes just a year ago at this time, we now are more towards the rate cuts. Eight out of 22 central banks cut their policy rate this week. Four hikes, so twice as many cuts as hikes. Ten central banks left policy unchanged. A lot of them suggested interest rate cuts could take place in the summer or in the autumn, and then other central banks said there's actually still a chance of more rate hikes. Just to go through a few of them, because it's kind of interesting, and then we're going to focus on three in particular. Before we get to the US and the Fed. We're talking about globally. You kind of see this skew towards South America Columbia cut rates, paraguay cut rates, mexico cut rates, brazil cut interest rates. Then you also see countries like Mongolia, moldova, indonesia with left-wing rates unchanged, but you also had rate cut from the Czech national bank in terms of unchanged, in addition to the Bank of England. But in the context of the Bank of England, versus the vote a month ago which was seven wanted to remain unchanged and two voted to hike rates. This month it was eight unchanged and one for a rate cut. So that was kind of interesting. Iceland left late rates unchanged, hong Kong unchanged, northern Bank of Norway unchanged, but also said we see rate cuts by autumn.

Speaker 1: 1:57

China was unchanged and they have record low rates but they're still high nominally 3.45 against the bond market which have been very bullish on. I've mentioned. You can see sub 2% 10-year bond yields in China and that's kind of on the verge of happening now. So the market's pushing for rate cutting. They're just not getting it. So that's kind of interesting to me too.

Speaker 1: 2:16

But in the context of Pakistan was unchanged, which was really interesting to me 22%, even though you had a decline in inflation from 28.3 to 23. So their real interest rate went from being negative 630 basis points to being negative 130, so policy became much less stimulative and that would theoretically help their fight to bring inflation down. Morocco was also unchanged. Now there were rate hikes that are interesting. Of course the Bank of Japan. We'll talk about that in a second. But also Taiwan hiked rates by 12.5 basis points to 2% and Turkey raised rates by 500 basis points, 5% to 50%. They continue to try and rein in the lira.

Speaker 1: 2:59

Similar situation in Angola, and I've talked about both these places. Why? Because the currencies have gotten smashed. Pakistan, argentina, angola, turkey, nigeria I mean the list is long and when you look at a place like Turkey and Angola, I mean, is there a significant place? Angola and Nigeria they produce potentially capacity to produce 4 million barrels of oil a day, which would make up the shortfall you have right now. So to that degree, 100 basis point interest rate hiked by the central bank of Angola, taking rates up to 19%, which is interesting, but inflation is running at 24.7, so they might have more to go.

Speaker 1: 3:40

So what you have right now is this polarization is so much that you have data evidence that supports both points. You have the dovish evidence, you have the hawker's evidence and it's all over the place. And when we kind of knock it down to a couple of key central banks and decisions made this week, you can see how polarized it is. We start with the Bank of Japan, who instituted the first rate hike in like the millennium. All right, it goes way, way back now that you've had seven years of negative policy rate in Japan and they take the rate. This is the big news. They take the rate from minus 0.1 to plus 0.1 and it's really only a 10 basis point hike because it's a band from zero to minus 0.1 to zero to plus 0.1. So you could say it's a 20 basis point increase. It really isn't, it's 10. So the extent to which, finally, you have a positive interest rate the one year bond immediately jumped to 8.5 basis points.

Speaker 1: 4:38

And they also pull back on QE no more QE in terms of buying ETFs or REITs, so they're not going to be dabbling in the stock market anymore. And no more yield curve control, so the long ends kind of almost free. I mean they did away with official YCC yield curve control. Everything needs initials now to the degree that they also be watching the 10 year bond yield, so you could say that they ditched it. You could say that they didn't because they said they'd be watching it. So there was some level where they start to feel anxiety and could potentially intervene and frankly, they're intervening already and they have been and they continue to in terms of QE buying of JGBs. So that's really interesting. The bound sheet continues to expand. Although the expansion on a rolling 12 month basis is less than it was a few weeks ago, it's still expanding then.

Speaker 1: 5:26

So, and you kind of look at what the Bank of Japan is telling us, all right, we see the and this is a quote the virtuous cycle between wages and prices. In other words and I have told you on this podcast repeatedly Japan is on fire, the economy is on fire. Retail sales have been up over 5% for 21 consecutive months, at least the last month that I looked at, which was two months ago. Price stability has come into sight, they say YCC, and the quantitative easing to the degree of buying stocks has fulfilled their roles. All right, but and here's the big but the bank anticipates accommodative financial conditions will be maintained for the time being, given the current outlook for economic activity. And right after that, they say economic activity is weakening and while wage growth remains strong, it shows the strength is waning. All right, so this was interesting choice of words. Now, retail sales above 5%, wage growth has been well above four, and even higher, depending on which industry you look at. Against inflation, that's between 2% and 3%. So you have some real wage growth there, and the latest round of negotiations were quite positive for the unions and wages and so on and so forth. So it's a pretty rabid economy, pretty robust, and it still has zero interest rate. All right. They're still monetizing debt by buying JGBs.

Speaker 1: 6:49

And what's interesting here, though, is the yen and the Nikai's at the highest level since 1990, and we're long the Nikai for our clients and the degree to which all of this is so bearish for the yen. Well, the yen fell on the news, but it and it almost made a new low, but it didn't. But if you look at the yield differentials, whereas when the yen has made new lows, the yield differential is widening the discount in Japan to the US Well, that's over Now, at least until the US rates start falling, but even then you're narrowing the discount right. So, in that context, the yen made a new load that was not confirmed by the rate differentials, and a very egregious and glaring degree. When you look at an overlay chart and the short position is through the roof on the end, and they sold it hard after the news you have a short-covering rally setup. That's going to be pretty interesting. You have a dynamic where you have inflow into the Japanese stocks, the banks at new highs, almost to short of new highs that they just made two months ago and outperforming the US banks by far. A call we made last February, february, a year ago, that Japanese banks were outperforming almost 100% year-over-year outperformance.

Speaker 1: 7:56

But then let's look at the Swiss National Bank, who just cut rates. So the bank in Japan raises rates and, by the way, boj raises rates just into an inflation report that came out late Friday that shows a big jump in inflation in Japan. We'll talk about that too in a second inflation. But the Swiss National Bank cuts rates. They cut the rate to one and a half, down from 175. Inflation had dropped to 1.2. I don't know, it was maybe two weeks ago. I did a big special on that because it was really interesting when you see this. All right. So in that context, they expect CPI to decline and stay around 1.1% through 2026 and predicated upon a 1.5% overnight rate, which is their official policy rate. I think it's the overnight rate. Yeah, the overnight rate is the Swiss. So in that context it's like OK, no more rate cuts first of all, and here's another kind of currency that has really rallied, has come all the way back is on a verge of breaking down, but maybe that's it for rate cuts there. But they're out ahead of the game to get the gold medal for the major central banks for having cut rates first, and then we go to the even kind of in the middle. All right, because we got the you want to say you know hawkers bank in Japan, or maybe they're really not. The Swiss National Bank, which is clearly now easy. Oh and, by the way, swiss National Bank mentioned the Frank as too strong. So that was another thing. Throw another currency under the bus. But in Australia, same night bank in Japan, half hour removed from one another.

Speaker 1: 9:20

The RBA did not cut rates, but they said a further increase cannot be rolled out. Service price inflation remains high. Excess demand remains in the economy. They continue to aggressively QT the balance sheet down another 6 billion. In February it's down to 526, from Ohio 647. So it's down 120 billion Aussie dollars in just a matter of a few months. That's an 18% shrinkage in the balance sheet which exceeds the Fed shrinkage which we're going to talk about in just a minute. We're having a shrinkage when they say shrinkage contest here, but right now the RBA leads in terms of unwinding QE with QT.

Speaker 1: 10:01

But in that context, where does the Fed stand on this? Because this, of course, was the big news this week and this is why we're doing a podcast today. Let's talk about the economy first a little bit, because if this is about okay, we don't want to cut rates because economy is strong and there are some things that suggest the economy is strong, first of all, housings come back with a little bit of optimism around interest rate cuts from the Fed, so housings bounce back pretty nicely. It's got a long way to go, but the residential, the mortgages, the permits and buildings I mean, all of this is kind of taking a turn to the upside. But of course, you don't have enough supply. Inflation will continue to rise and that's an issue.

Speaker 1: 10:43

But in terms of the Fed really being focused on the labor market, so this is kind of like that they specifically said a turn for the worst in the labor market would be cause for action. In other words, this would be a catalyst and actually cut rates on the fly. They get a bad employee number or two and then they could cut rates without having to telegraph. It's kind of what he's saying, because we're telegraphing now by telling you this. Well, frankly, the labor market is not as healthy as the press wants to make it out to be.

Speaker 1: 11:14

I mean, you talk about last month. You had an increase in January, I should say two months ago 353,000 on a headline payroll employment. This most recent month the report just a couple of weeks ago for February you had an unemployment, you had employment. You know, payroll employment rose 275,000. That's like 600 and something thousand between the two months. The problem is the 275,000 increase in February came with 167,000 downward revision to the previous two months. So net you're only up 108,000 if you look at the payrolls. But the problem is that the household numbers and numbers that have a wider kind of swatch of input are actually much, much worse. U6, which is the total unemployment rate, is seven and a half. That's up 50 basis points from a year ago.

Speaker 1: 12:08

The number of unemployed has risen 500,000 in the last 12 months. All right. In the most recent monthly survey household employment fell 184,000, second month in a row declined. The number of unemployed rose 334,000, second month in a row. And here's the kicker over the last 12 months of the job growth, 921,000 jobs created in part-time jobs while full-time jobs down 284,000. And I can tell you by looking at the stats. The number of people Working part-time for economic reasons is up. But even more telling is when you look at the number of people working two full-time jobs for economic reasons. It is at one of its highest levels ever. And when we're at this level, it almost does always in fact it always has is 100% in the past preceded every session.

Speaker 1: 13:01

Now you say, well, earnings are good and these consumers strong, right? No, nothing can be further from the truth right now, when we talk about earnings from the labor market numbers 3.5 year-over-year and average weekly earnings. Well, against core inflation of 3.8, your paychecks worth less the second you cash it, I mean, even if you want to use the lower inflation numbers, you're at best flat. So there's no wage growth really here, the only wealth effects coming from the stock market. You don't have savings. They've been drawn down. Credit card debt. The banks are already tightening standards and said they're going to keep standards tight and tightened and tightening to the entire year.

Speaker 1: 13:39

From the senior loan officer survey, you know, and you say well, the retail sales numbers, right, the retail sales numbers, you know, excuse my language, they suck, they're terrible. Alright, you're talking about so many different things here. Let's just look at the numbers in dollar terms. In the most recent retail sales report from the month of February, retail sales grew total for the month four billion dollars. More than half of that was vehicle sales. 88% of the increase came from vehicle sales, building material sales and gasoline sales. What's down for the month and the year are discussion items, clothing, furniture, department stores, sporting goods and garden supplies and, when you look at this, online sales okay, non-store retailers down two months in a row. The year-over-year rate has slowed dramatically from double digit rates. That has been at for like three years in a row. This has been the backbone of the growth in sales in the consumer and that is starting to weaken. It really is. It's very noticeable.

Speaker 1: 14:47

And when we talk about online sales in terms of the rolling 12-month change so let's take the rolling 12-month change in monthly sales Alright, we have a channel, very well-defined up channel that goes back to 2002 and runs through now. We have tested the bottom side or hit the bottom side of that channel on four other and four occasions up until now since 2002. 2009 crisis was one of them. 2015 was one, when they ended QE in 2014 in the third quarter of 2014. In 2019, after the stock market got hit late 2018, the pandemic, and now it's the fifth now. So you're at the bottom of this channel in growth in online sales on a rolling 12-month basis, monthly Alright.

Speaker 1: 15:36

Total retail sales 700.7 billion for the month of February the same number it was six months ago. It's gone nowhere. The monthly dollar spent hasn't changed for six months. Let's take this one because it doesn't factor in inflation. So if you take out inflation and the price increase in all these things that up that add up to 700 billion dollars a month in sales, you got a lot less stuff for that money. The volume and the actual stuff that you are buying for that amount of money is much less because they don't factor in the inflation to reduce, to compare volume. So let's do that and it's pretty simple. Since April of 2022, 22 months, almost two years okay, the total increase in retail sales total increase to 700 billion from 22 months ago is only 3.7 percent. I mean 0.16 per month on average over the last 22 months. Over that time frame, cpi is up 7.7 400 basis points more than is retail sales in dollar terms, and the average monthly growth is 0.35. It's more than double the growth in retail sales is the growth in inflation, month for month, for almost two years now. So this is wearing on the consumer, no doubt.

Speaker 1: 17:00

So where are we in inflation? Because you know, this is the whole key to the Fed's kind of turn and all of these markets, all these asset price rallies, are predicated upon Fed easing that, if it doesn't come, will mandate a correction. So where is CPI? Well, I can tell you what's interesting about CPI is that the most recent monthly number and you've had a couple months now and we I told you right here on this podcast you would get disinflation into the fourth quarter. I thought it might end a month or two earlier, but it's kind of ended to me and now the risk is back to the upside. And one of the tells, especially specifically in doing what I do in here and dissecting the micro and the data and looking for, you know, things that might extrapolate out into medium-term trends and then have an influence on prices, is to look at kind of the differences around this CPI report where the things that have driven the disinflation posted huge monthly gains which suggest a bottom in those things, and I've seen this happen, you know, for 40 years. So doesn't mean it's happening again. Past performance is not guaranteed future results, that's for sure.

Speaker 1: 18:05

But in the context of let's look at a few. All right, all items less food and shelter, all items. Cpi less food and shelter 1.7 year over year and that's like below two. It's below the Fed's target, but it was a 0.8 for the month. It's, like you know, 9% year annualized rate. That's an acceleration from 1.7 to 9%, that's for sure.

Speaker 1: 18:28

Let's look at commodities excluding food, the year-over-year rates minus 0.8. You have outright deflation in commodity prices excluding food for the year. For the month it was up 1.1, double digit annualized number. Non-dorable goods inflation 1.1 year-over-year up 1.0 for the month. The entire year-over-year gain came in February. I mean hello, that's huge. Take non-durables, excluding food minus 0.2 for the year. It's down to 10th. Deflation in non-durables less food, except for the month it was up two full percentage points. I mean that's huge.

Speaker 1: 19:15

But then it's also the things that have been driving inflation to some extent that also post huge monthly gains and it doesn't show up in the headlines. And this is why it's important to kind of read down into the deepest levels of the data. All items, excluding medical care 3.3 year-over-year. Not like astronomical, but it's well above target 3.3-over-year posted 0.7 for the month. Service inflation is at 5.6% for the month. Services excluding shelter 3.9, 0.6 for the month. So you start to see it. And the last one is housing a 4.5 year-over-year, a 0.5 or 6% annualized rate in the month of February. These things have accelerated on a short-term basis. Will that carry through? We'll see, but I sure think so.

Speaker 1: 20:07

Now, if we kind of get to where we are in terms of also looking at the Cleveland median CPI, which is one I've always watched and the Cleveland Fed produced some pretty good research. It's not that widely disseminated. The monthly number annualized was 6.54, and the Cleveland Fed put out a report about this. It's a great chart if you look at it. The only other time in 30 years of this report that you've been above 6, was 2022 and 2023. You're back above 6,. You got to 1.8. You went from 8 to 1.8, back to 6.5. So hello on that one.

Speaker 1: 20:45

But at the same time, the Fed is kind of trapped, and this is what I'm saying. The whole point of this kind of environment is the Fed is being forced to acquiesce to higher inflation, and I said exactly those words would be where you'd be here All right. Why do I say that? Because you have stank inflation in the economy and again, while it's not as visible as it will be, it's there. And again the Fed didn't get really tight with rates because they lagged the rise in inflation, so rates policy's only been tight for like a year, so you're starting to see the effects come in now, except for housing, which collapsed.

Speaker 1: 21:17

When you took at the Small Business Confidence Index, the NFIB numbers, they're really valuable. It's below 90. That's recession territory. It's there already. The only other times it's been below 90, 1990, one of the biggest recessions ever. It was really deep. It was a real natural recession 98, 2000. Oh, wait a minute. No, it was never below 90 those times. The only two times that this indicator's been below 90 was in 2009 crisis and the pandemic. It wasn't 1990 recession, it wasn't 1998. Long-term capital management it wasn't 2000. And tech bubble crash Didn't get that low. It's the third worst reading in this indicator.

Speaker 1: 21:55

And you want to talk about employment? Most of its small businesses is going to make up the margin. So in that context, the percentage planning too higher, the lowest since 2016,. If you exclude the pandemic. Not only that, it's the lowest level in four years in the response of unable to fill employment positions. So in other words, we're not having trouble finding workers anymore.

Speaker 1: 22:22

Let's take another step because we've got to talk about the US budget. It's turning into a long podcast for such good stuff. I think the budget Okay. For February, the US government federal budget just put out Outlays were 567 billion against receipts of 270. 567 against 270. You're spending twice as much as you're taking in here. The largest increase came on interest on the debt 127 billion was the increase year-over-year. So security was up there.

Speaker 1: 22:52

One of the largest spends was on income security, which is a newbie. I couldn't even really find too many details about it and I went through the entire line-by-line items and it's a long report. I couldn't find anything that kind of linked back to income security other than some of the social media back to income security, other than some of the social programs which we can imagine where that's going. It's going to the border and to the people coming in In the meantime and that was 90 billion. In the meantime, spending on Homeland Security, which is only one third of that, fell for the month by a billion dollars from 35 points on them to 34 points on them. That's atrocious. The deficit for the month was 296 billion for the month, 13% worse than a year ago.

Speaker 1: 23:38

And when you look at deficits in this country, in the US, and you wonder why the de-dollarization is big and you wonder why the dollar hasn't risen when all these currencies are getting whacked and gold is going higher and Bitcoin is going higher, the dollar is going nowhere. It's because of the debts and deficits. It's now. The tipping point has been passed. The deficits you've had deficits in this country 56 of the last 60 months. Think about that 56 of 60 months. Over the last, you've had deficits. In 28 of the last 29 months You've had deficits exceeding 200 billion dollars in a month in 14 of the last 25 months. You've only had a surplus in the last 10 years in 24 months. That's 19% of the time. Have we posted a surplus in the last 10 years?

Speaker 1: 24:27

I mean, and the really troubling thing is the means of financing. Financing this debt is borrowing from the public. More than ever. It's four times what it was a year ago. For the first five months of the year, borrowing from the public was 1.03 trillion dollars versus 290 billion a year ago. Five months it's three and a half times as big. All right. Not only that, but the rolling total increase in debt over the last 12 months. Month to month, over the last 12 months you're up 2.65 trillion, the fifth largest ever. But the other four 12-month periods that were higher were all consecutively during the pandemic. It's the highest debt growth non-pandemic in US history. It's the highest public borrowing in five months ever. It's out of control. You're spending twice as much as you're taking in a month and borrowing from the public to fill the gap.

Speaker 1: 25:27

Now the Fed is talking about reducing the balance sheet too, and actually this is really where it gets interesting in terms of whether our position's here, because the crux of the matter is the Fed has actually changed policy here this week. They said they were going to looking at, exploring and discussing the options in terms of slowing QT. All right, the balance sheet was as high as $8.9 trillion Actually $8.965, so almost nine just short of nine. It's 350 billion short of nine, not even 35 billion short of nine trillion. Now they've shrunk it by 1.42 trillion over the last, since April 22 or whatever it was. You're down 16%, 16.9 to be exact. All right, and that includes, by the way, the period where you added money to the balance sheet when AVB went belly up a year ago, so that was 391 billion at over a three-week period.

Speaker 1: 26:25

That rolls into this thing where now you're really? You have the tightest QT ever, so they're going to start to loosen the tightening in QT. And then you wonder why? Well, because the government just borrowed $1.027 trillion in the last five months from the public. You have to sell that debt. Interest cost is the largest increase in the deficit, so they have to make sure the bond market doesn't blow up from a supply-demand perspective. So this is where the Fed included and all these central banks that eased policy eight of them cut rates this week alone.

Speaker 1: 27:02

All right, acquiescing to higher inflation, because we know we have to. This is a 40-year downtrend. Inflation has ended and you've broken out to the upside. We had our first wave, we've had the correction, we're going to wave two, it's the next step and this is going to be dynamic, really great opportunities here and the degree to which we're going to talk a little bit here at the end about what to do with this information. Of course, we sell research on this. So sales at weldononlinecom. Email me. We can send you all kinds of free reports that you can take a look at. But in the context of what I'm trying to do with helping people out there, energy is going to be a place that's going to benefit from all of this, because at some point the dollar card gets played. You're maybe a step away from that, but you have a supply demand dynamic and energy that's bullish on its own merits and when the dollar card gets played it's huge. Let alone the fact and when I say dollar card, meaning dollar down because they're going to be easing and become acquiescing to higher rates of inflation.

Speaker 1: 27:56

All right, you've already seen a pickup of materials. You've already seen a pickup in the base metals, certainly gold's at a new high, silver's even below. You had a rally in platinum and palladium last week and they've been dogs. Dogs would flee, is to quote Gordon Gecko. So the context that we're seeing a shift here. Energy has a fundamental supply demand dynamic that's bullish. So does certain commodities like cotton, like soybeans, like coffee, like sugar, cocoa one we mentioned here on this program that has exploded in price.

Speaker 1: 28:24

Energy crude oil inventory is down 2 million barrels this week. They're 7.5% below year ago levels and 3% below the five year average. For this time of year You're down 32 million barrels in crude oil supplies, not including SPR, which is down huge from a year ago. Gasoline's even more bullish. The gasoline inventories fell 3.3 million barrels this week. They were expected 1.3. So that's a huge miss on the downside, which is bullish for prices. Gasoline supplies are down seven weeks in a row. They peaked early on the seasonal and have come down really hard, exactly as I suggested they would. They were down 23.4 million barrels in the last seven weeks, 3% below the five year average. Now they were almost above the five year high just two months ago.

Speaker 1: 29:10

You see this in some of the market action the crude oil swaps. The May-October price is almost $3 versus 70 cents in December. So that's telling you the tightness. You're going to pay more for the May month to try and draw inventory and to meet demand. So, as opposed to normally, the October month would cost more because you have to store it and insure it. So it's what we call backwardation, when the front month is a higher price because you're trying to attract that buying into the market, or rather that supply into the market. You're trying to attract sellers by paying a $3 premium for a five month contract. I mean that's huge.

Speaker 1: 29:47

And you look at two the positions in energy People are not long. The open interest in crude oil futures only $162,000 in January. It's up to $233,000. But as far off its high of $526,000. It could double and that would drive prices to, I think, something $107ish maybe in crude oil when you start looking at some of the dynamics around the fact that North Sea Brent is making new highs here, dubai crude on Tokom, the Tokyo Comanche Exchange is breaking out. You're breaking out in Chinese room, nimby terms. You're breaking out in Euro currency terms. Crude oil is breaking out in every currency.

Speaker 1: 30:25

I like gasoline even better and here's the interesting thing about how it ties into inflation. Gasoline at $2,065 right now in the futures contract is up 6.6% from a year ago. It's going to become a positive to CPI when this has been the biggest negative of all. The long term moving averages have been cleared. The long term oscillators turned up. A breakout takes place at 299. You're not even close yet and the open interest is one of the lowest we've seen in the last couple of years. It's $59,000, which is well off the peak that was almost $80,000. So in January you're at $76,200.

Speaker 1: 30:58

The UGA is the gasoline ETF. A breakout above $69. $5690 would be a reasonable stop level. All right, that's a bottom. That's in the Fibonacci zone. You have inverted and shoulders bottom there.

Speaker 1: 31:12

The XLE is the energy shares ETF, last at $9030. Like it here. $7880 would be kind of a stop level. $94 would be a major breakout. The USO is the crude oil ETF. I like that. But look at the PXE drilling and exploration, because you do. You need more of the Petro. I mean, we downplayed it and now we're paying for that. And now they're coming back and note by the way, all right, all of the solar, the Q clean, the green clean, the tan, the fan, the PWB, anything related to alternative energy is getting smoked and is making new lows against gasoline stocks, which are the high fliers. So Philip 66, sonoco, sun, xom, love Exxon here, all right. So when you look at something like when WTI crude oil is, where the XLE is and where Exxon is it, actually the stocks have led the way and they imply that you could have crude oil between $115 and $122 a barrel. That's a big gain.

Speaker 1: 32:16

The other commodity I really like here is copper. You've had inventories down from $191,000 to $113,000 over the last several weeks. That's a 40% decline in warehouse inventories of copper. The swaps are way up now, have been deeply negative, now they're positive. We haven't seen this kind of action in the inventories really since 2005. You have London Mining and Southern Coppercore, lun and SCCO. Now they've already broken out, they've gone wild. But they're implying here too, like in energy, implies the higher crude, the copper shares imply a higher copper price of $575 to $6. So that's interesting too. Copx is the copper ETF. Hudbay, a Canadian miner, has been one that's kind of lagged but is really starting to break out, so that's one that's probably still has value here.

Speaker 1: 33:04

But this is the kind of thing we do every single day here. We help retail investors. We help some of the largest hedge funds in the world. I worked at one of the largest hedge funds in the world and I've been doing this for 40 years, and now it's kind of come down to. I see what's happening in terms of the purchasing power of the dollar. I see what's coming. This is the next wave is coming like right in here, we're here.

Speaker 1: 33:24

This is why we started this podcast almost two years ago now, and so in that context I also invite you all to check out my YouTube channel. All right, it's Gregory Weldon on YouTube. You can check out my Twitter, which is at Weldon Live. Certainly sign up and follow us on the podcast. It's on Twitter Money Underscore Podcast. We're also on YouTube and we're also on Facebook in terms of the podcast and I thank you just for taking the time to hear me speak and I hope that I gave you some insight and maybe we can help you keep pace with the devaluation and debasement of the purchasing power of your paper money, wealth and income. Till next time.