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Fifth Street Finance CEO Len Tannenbaum on how to invest as global economies continue to print money.
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-- today to keep interest rates unchanged amid concerns of high inflation.
Fifth Street Finance chairman and CEO -- him -- says inflation will be wise to see it building a bubble in the markets.
Now time to get -- -- by begging joining me down a Fox Business explicit you see a bubble ahead because of the printing of money.
Around the world right.
Everybody's printing Switzerland's printing they don't want their -- down.
So they said -- -- infinite amounts of money to maintain their currency against stars against euros against yen.
You know Europe's printing.
We know Japanese have said they had going to be printing what happens when everybody prints a bubbles created evening -- -- about how we you're giving yourself wishing to going into hard assets that's right I.
Okay so explain it explain the thinking here so where does the money go.
Where's -- can have -- to.
Well what well that's a good question inflows the stock market.
-- -- -- contact -- real estate -- close to anything with an international appeal that it doesn't matter what is denominated and.
By money can go there and then at the future to be exchanged for more this what which could be worthless currency down -- Okay see you -- the liquidity argument and fair enough but if you take a look at the Saint Louis Fed's adjusted.
Monetary base if you look at -- -- show a chart wanna -- us for our viewers.
It's basically been flat -- -- tells me that.
That the rest no liquidity out there that we aren't seeing that money is being printed and then and -- -- if you look at get a chart -- little bit about.
Of -- of -- negative possibility here you got the Pentagon -- are right this this company opposite of what I'm hearing.
For me about liquidity.
So so it's let's think of the bathtub think it's filled up -- quarter.
And that fed has been taking a fire hose to fill up the bathtub for the bathtubs been -- where's -- been leaking Greece.
Problems negative shocks to the inflationary cycle deflationary shocks.
Things to suck up liquidity the banks having to build their tangible net assets for battle.
All of these things are sucking liquidity out to the -- not filling up yet but what happens when those.
Polls start to plug in the flood of water even expands from here you're going to see the bathtub fell.
This you're still in the -- quit is gonna come back this year in the United States asked why what we've seen over a lot of the world I would -- I'd seen that in our crisis you're seeing that in New York -- York city real estate near tie.
One can ever wealthy investors that are going for things like and he is such an art modern art Melissa and things like bath OK -- lot of liquidity and and supporting first to their -- -- flowing.
Throughout the economy throughout.
The middle -- investors and smaller -- OK OK well let's talk about that because -- I'm curious I know that mean that the Fed has told us they're not going to be raising interest rates I.
We'll see if that her right hand -- I don't know.
But what happens we do talk to see -- was in there would have a that we do effect comes back and says you know actually are gonna have to raise rates and a lot of letter what does that do to be.
Those hard assets they -- recommending that viewers by now -- -- this artist signed to that the two year to ten year treasury spread.
Is now increased to one of the largest in the wider spreads it's been -- while people are already starting to anticipate.
The fact that over the next few years -- -- high degree chance that the Fed will have to increase rates.
And there be inflation so what do you -- How do you protect yourself.
Wealthy individual investor buy your house GO long term fixed rate mortgage contract and -- appreciation in nominal appreciation of your house apartment.
Will should generate returns you over time.
Vs inflation to the deflationary hedge OK I don't call -- up by donkey or sable fungal that you buy real estate by eight.
I'll buy an apartment erected out of luck I looked like that when I actually bought a small one of Miami -- a week Miami's when this international markets replaced by someone has the cash to do that a I say we we don't look at a respite RS -- -- gold but gold has not been performing -- -- -- -- -- and now we're saying some pressure on the currency markets that.
Could be bad news for -- While gold is a tough commodity right because gold really has no earnings power so ultimately want to buy the stock market.
So could the stock market increased earnings and pass along this number of stocks and types investments in the stock market that you can actually make.
I'm the -- basis anyone can make them that make money.
Going back to the risk and thinking about buying modern art along with horses and yachts.
I don't have a lot of capital and cash flow and get a bump district finance chairman and CES -- -- Atlanta thank you and.
