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Tice Capital President David Tice on why Federal Reserve policies are having a negative impact on the markets.
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Well despite all three indices is sitting at multi year highs one strategist says prepare for S&P 1000.
David Tice is president of -- capital hi Mary David.
Why -- so bearish -- -- To be here great to have you RES and 1000 bearish before.
We get at quick rush out of the -- first quarter of the year of course eight and 12% gain some -- shaking hands you understand ongoing this.
You still bearish that you haven't been -- why is that.
Well policy.
Makers are doing a great job and kicking the can down the road -- and -- -- we feel just like we did back in 99 and also in those seven both those periods before positive about.
Credit being created this that central banks were easy that everybody was complacent and we ended up had a big accident.
Right now -- that the time has been passed from the private sector leveraging to the public sector leveraging because we broke down.
Private -- securitization.
Markets -- -- -- and now the Fed -- the ECB -- had -- larger balance sheet and they're going to -- currencies let me put in real simple -- what's happening is the Fed is enabling it is free spending politicians both here and over in -- would you agree -- that.
Exactly and actually Larry Summers said recently this paradoxical that we got and all these economic problems from too much borrowing too much spending yet.
He said we have to be utilized more the same get out of it.
However if the problem is too much debt you don't get out of the problem with more debt and that's where the keynesian -- wrong.
Okay McCain if you look the message in the bond market right now you know interest rates there are creeping up on expectations -- the Federal Reserve is pushing off.
More monetary policy more quantitative easing if you will so it's kind of off the table right now we're seeing a trend higher for -- Straits.
Enacting a -- in an -- conditions.
If interest rates go up it's going to be very very bad for the US economy still -- -- hello it's just a message right now.
Is that there's still very low I think really what's happening is this is indicating a starting to pierce the government bond bubble you also see emerging market stocks -- underperform recently.
You see Europe slowing down dramatically China is now slowing down.
You know oil prices are up this is indicated the slower economy in the US.
While the other problem interest rates going up as a government borrowing costs go up tremendously they've been able to get away with murder.
By year's spending money they don't have because they're borrowing costs are so low if those barring costs -- I heard somewhere that you know a couple of percent increase in a ten year treasury on their yield would be hundreds of billions of dollars more paid out by the US treasury we can't afford that.
Exactly Dave it's really irresponsible.
How short our duration is of our government debt.
That the administration is going out borrowing that eighty basis points before.
Paper under two years.
And it when rates do go up in rates are gonna go out then our fiscal deficit is going to explode.
I think we think about gold and some other commodities as a hedge for your outlook on a gold's down 12% eight it's a good opportunity here.
I really love gold and silver lawyer and I even -- over more than gold.
In a environment a Fiat money where you have central banks around the world debasing their currencies and they've announced that they'll do that.
Gold is going to.
Act as the de facto gold standard in my opinion.
Is the one.
-- -- currency that does not have a constituency.
Against.
I -- it increasing in value.
The other nations states wanna see their currency undervalued and debate so that they can keep jobs David type by the way what about buying into the mix are you can't by the -- -- -- BXX.
Which sort of tracks of expert -- all pretty much an all time low right now if you believe things are gonna get worse why not -- be XX.
Well I hate I do you think.
A Divx is a good way to go I do think there are few fundamental problems from you know with with the way that index is constructed there might be better ways to quiet fate generally that concept it David -- president of digitize capital David thank you very much.
Okay back.
