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Is the gold standard.
Coming back a new report says Republicans will put together a gold commission as part of their official party policy.
Let me ask Scott -- what he thinks about all that he's chief investment officer a Guggenheim partners per -- Scott just.
From a practical perspective there's not enough gold in the world at this point is there to back all of the currency all the money out there.
No and that day in its current price of around 16100 dollars an ounce there isn't.
But you know if we -- valued gold to 101000 dollars an ounce than we probably would have enough.
But how you put the genie back in the bottle could the gold standard was -- completely abolished by but that by the US in 1971.
-- I think it I think going back to the gold standard isn't very practical.
Yeah I think from the party the Republican party's willingness to included as part of the platform.
It reflects more of a concern about Ron Paul and and the people that live there and not having them break off and having -- run of independence.
But -- a practical way.
To getting back to the gold standard simply because politicians have gotten too used to having a printing press and they're not -- they're not gonna wanna give it up.
-- Scott looking at just the Federal Reserve's balance sheet and the amount of money that it's funded and armed put out there and in the world.
In recent years what worries you about the way that their portfolio looks today.
Well certainly in a day in past we've accumulated more and more treasury securities.
The Fed is increasing the amount of interest rate risk that it's taken.
And the whole basis for believing that the Fed can maintain price stability and not have runaway inflation.
Is the theory that it can limit the amount for the supply of money.
If that the prices of the assets on the Fed's balance -- fall.
To the point that it doesn't have enough assets and market value to sell.
To reduce the money supply.
Then essentially we could lose control of the money supply and the US treasury would be in a position where potentially couldn't finance itself.
And we could go down the road to what would be the worst case scenario.
Which would be either hyper inflation or.
Dramatically changing our system where.
Capital controls and and and controls on capital flows will Scott what are the chances of that happening now -- LA and I think about you worry about a -- -- and interest rates it based on the the way he described the Federal Reserve portfolio.
But because the Federal Reserve is a mirror owner of treasuries as long as the Fed doesn't sell all that -- at least right help keep interest rates in check would it not.
-- what it will -- long -- inflation doesn't become a problem.
But you know it -- -- as you're well aware and I am and most of bureau.
Listeners are well aware.
The amount of money that's been created.
Over the last five years store in the course of the crisis -- result of an almost tripling in the size of the Fed's balance.
And now you know on the eve both Jackson Hole we're now discussing the possibility of another round of asset purchases.
Which would expand the balance sheet even further.
It once inflation starts to pick off the Federal Reserve has to sell assets to -- is to reduce the size of its balance sheet.
And if if the market value of those assets go down far enough there's not going to be enough assets to -- Do you think he's one final thanks Scott we are -- you predicted that -- yields and interest rates would start going up earlier this year and you said short treasuries that you it's on short sell here.
Scott do you think we are now at the beginning.
-- of pricked a long protracted increase in interest rates and yields.
You know -- -- it's always hard to predict the exact bottom.
But I do believe that if you were to sell treasuries today that you would have a profit on them.
-- within the next five years and I think that we are at the early phases of the beginning of a generational bear market where rates will be meaningfully higher over the next decade.
Right it's been a thirty year bull market for bonds so it's got and it -- the digital take this is classes at.
Scott it would not even even the -- it -- even the Internet bubble finally ended.
Yeah exactly and -- the housing bubble badly.
Scott good to see you mild to rub my genie bottle for your -- Dodgers and follow Scott on Twitter he is Newt's Twitter.
So you need some followers he's incredibly brilliant man so yet now you have to deliver Scott.
The -- update and thanks for the plug I'll see I'll I'll see at the Dodgers game.
OK RA -- show -- scary but how are showing up at our -- -- take care Scott -- of the economic marketers.
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