Mike Gleason: It’s my privilege now to welcome in Gerald Celente, writer of the famend Tendencies Journal. Mr. Celente is maybe essentially the most well-known developments forecaster on the earth and an everyday visitor on many monetary applications, together with proper right here on the Cash Metals Podcast.
Mr. Celente, it is a pleasure as all the time, and thanks for becoming a member of us once more.
Gerald Celente: At all times my pleasure to be on, thanks.
Mike Gleason: Effectively Gerald, inventory markets flinched proper after the latest announcement that tariffs on Chinese language items would improve to 25% however inventory costs have since resumed the rally, for essentially the most half, that has been occurring since final December. At this level we do not know what it will take to make inventory buyers cautious. Commerce wars, P/E ratios at epic highs, escalating tensions with Iran. There was a time when these items might need frightened some individuals, however not right this moment. It is not even clear what number of precise “individuals” are making purchase and promote selections within the fairness markets anymore with all of the excessive frequency buying and selling occurring. What do you make of the motion in shares? Do you suppose what we’re seeing is an trustworthy market, are actual individuals making judgments about what and when to purchase or promote or have synthetic forces fully taken over? Mainly give us your ideas on the state of the inventory markets right here, Gerald, as we start right this moment.
Gerald Celente: Effectively, it is a mixture of the 2. Again in September of 2018, we closed for an financial 911. The reason is is that the Federal Reserve stated they had been aggressively going to lift rates of interest. The following day, the S&P 500 peaked on September 20. Then the market began to say no, we noticed bear markets happening 20% all over the world. In america, the Dow had its worst December for the reason that Nice Despair. Then on January four, 2019, Fed Chair Jerome Powell, after we had robust employment numbers, 300,000 plus joined the employment power, wages elevated essentially the most in 10 years, for your complete yr. He introduced that they had been going to be “affected person” in elevating rates of interest, and we did a 180 diploma activate our forecast. And we stated the markets are going to return up. It is quite simple: It is financial methadone. Extra low-cost cash that they are throwing into the system. And so, what occurred?
Once we return to simply lower than a month in the past, the S&P 500 and NASDAQ hit all-time highs. And now once more, they backed off with the discuss commerce wars. The commerce conflict speak is nothing however speak. They have been saying this now for 3 years, and the markets maintain hitting new highs. It is not going to deliver the markets down. What is going on to deliver the markets down is primary, are increased rates of interest. As a result of all that is, is letting gamblers gamble low-cost, and notably the inventory buy-backs, which simply noticed a report final yr; we’re headed for one more report this yr. So that they’re borrowing cash low-cost, shopping for again shares, driving up the markets.
We simply got here out with the brand new version of the Tendencies Journal, and our financial forecast is that sure, there’s going to be a recession, however not this yr, as a result of we’re listening to, nicely, the Fed simply got here out once more, stated, “No. Charge strikes are coming for ‘a while’ even when the economic system improves.”
So, when individuals ask, “Does the President have energy over the Fed?”, nicely clearly they do, as a result of Trump has been pushing the Fed to push down charges, and now they are saying they are not going to lift them. And whenever you return to Richard Nixon telling Burns to not increase them earlier than the election. Paul Volcker, former head of the Federal Reserve below the Reagan Administration in his final e-book, saying that he was introduced into the White Home and informed by James Baker to not increase charges earlier than the election. We see what is going on on in Turkey, whether or not it is India… you identify the nation. Sure, the President has energy over the Fed. And we’re going into this, that is the Presidential Actuality Present in america. Trump needs to get re-elected, and he’ll do every part he can to maintain charges decrease, to maintain juicing the economic system. So it is mainly low-cost cash that is pushing the markets up. Our forecast is the markets are close to peak, as a result of we’re additionally seeing, in our forecasts, that company earnings are peaked.
In order that’s the way in which we see it at this second. And sure, you already know, plenty of it is algorithm, nevertheless it’s additionally, they’re the true gamers behind it as nicely, making selections. So, it is a mixture of the 2, however once more, what we’re seeing now, there’s mainly a worldwide slow-down. The one motive you are seeing markets going up round Japan, and China, and in america, is reasonable cash, extra quantitative easing at completely different ranges, and naturally, unfavorable bond yields. And now we’re listening to the OECD popping out and saying that in Europe they need to do extra to stimulate the economic system.
So it is going to be artificially propped up, and that is all it’s, it is a synthetic market, and they are going to maintain propping it up as a lot as they’ll.
Mike Gleason: Staying on level there to the extent now we have seen synthetic forces take over, what do you suppose that can imply for individuals, together with metals buyers, who’re nonetheless investing based mostly on fundamentals? Wouldn’t it be wiser to simply throw within the towel and stope combating the Fed, so-to-speak? Purchase shares, purchase bonds and promote gold. We have seen some purchasers doing that, and their logic is not laborious to comply with, nevertheless it appears to us individuals are forgetting that central bankers do not all the time have a stellar monitor report. They blow bubbles, and bubbles inevitably pop. That stated, we suppose it is price analyzing whether or not this time could also be completely different. So inform us what you suppose? Is that this time completely different, Gerald?
Gerald Celente: Effectively, no. It is not completely different. It is simply, it is going to wait. It may take longer. And the debt bubble, that is the opposite half that we wrote within the Tendencies Journal, that is over $250 trillion. And also you’re listening to warnings popping out from the IMF about company debt and private debt and authorities debt. And also you’re additionally having warnings popping out from individuals like Bain Capital warning concerning the nice company debt that is been taken on due to merges and acquisitions. So, let’s return to this system once more, and what occurs. Effectively, if rates of interest go up, how are they going to pay again this debt? So the very fact is, they are going to maintain rates of interest decrease, and as we stated, we’re forecasting the Fed goes to decrease rates of interest this yr and subsequent yr if and when the economic system slows down, and we consider it will decelerate, since you’re conditions right here, the place it simply can’t maintain itself with increased rates of interest.
And it is true for all over the world. And you do not want any extra clearer details than, return to final December. We noticed dwelling gross sales, for instance, in Southern California, plunge 20% when the 30-year mortgage hit round 5%. Now what is the newest information? Mortgage refinances surge eight%. You understand why? As a result of the 30-year mortgage now could be at round four.33%, and we consider it is going to go below four% by the point of the elections in 2020 in November.
So, no, the bubble’s going to pop at a while, however what is going on to make it occur will in all probability be wildcard occasion, we simply do not know what that is going to be. It could possibly be spiking oil costs, it could possibly be conflict, which is ramping up in Iran and with Venezuela. The gold is the safe-haven asset, and proper now, the costs are caught the place they’re as a result of there is no feeling of a safe-haven want at this second.
Mike Gleason: We aren’t far off from the 2020 marketing campaign cycle actually kicking into gear. We’re lower than 18 months from the election, and it is laborious to know what issues are going to appear like, say, a yr from now, by way of the sector of Democrat candidates that can problem Trump. Give us your ideas on the election cycle developments that you are looking at, Gerald. What are a number of the essential subjects on the marketing campaign path as you see it. Will we see a real socialist turn into the Democrat nominee? Speak about that and anything you would possibly need to touch upon concerning the marketing campaign silliness, let’s hear it.
Gerald Celente: Effectively, our forecast at this second, once more it is within the Tendencies Journal, it is about swing states. It is so simple as that. Trump did not win the favored vote, he received the swing state vote. And what we’re seeing now could be that almost all of society, on the Democratic facet, they need stability and tranquility and security. And that is why you are seeing Joe Biden main within the polls. The millennials, which have a voting inhabitants virtually the dimensions of the child boomers, are pro- Bernie Sanders, however solely by about 2%. So, going again to the swing states, once more it is laborious to say presently, there are such a lot of wildcards between now and a year-and-a-half from now when the elections come.
But when the elections had been held right this moment, and bear in mind, we had been the primary journal in Could of 2016 to select Trump the winner, we’d say it will be Biden. As a result of Biden has robust swing state assist, notably in Pennsylvania the place he was born. And he performs the cardboard about he is Uncle Joe, all people loves him, he hugs you, and shakes your hand, smiles, says nothing and is aware of learn how to play the sport. And that what the individuals are searching for proper now. So, we do not see it being between socialism and capitalism, though we’re seeing an increasing number of individuals swinging towards, because the polls are exhibiting, eager to be extra socialist. However once more, it is the presidential actuality present and now we have to see the way in which the acts play out, notably with the debates. And, however presently, if the election had been held, we’d say Biden would beat Trump as a result of Trump will lose to Biden in key swing states corresponding to Ohio, Michigan and Pennsylvania.
Mike Gleason: If you’re going to get hug from Biden on the marketing campaign on the marketing campaign path, simply be sure you maintain it brief.
Replace us on the newest information and developments that you just’re seeing in Europe, Gerald. Is it nonetheless hotbed over there with the Yellow Vest Motion in France, and the rivalry over Brexit and different social and political points? Give us your ideas.
Gerald Celente: Effectively, whenever you have a look at Brexit, you’ll be able to see what a freak present most governments are, together with ours. And also you identify the nation, and it is one other freak present, Yellow Vests as nicely. The large factor to look at proper now, Mike, are the Parliamentary, excuse me, the European election. The European Parliament elections which are developing starting Thursday, within the subsequent few days, to see the place they go. And for those who begin seeing an increasing number of going towards the populist actions, whether or not it is the 5 Star Motion, Lega in Italy, or in France with Le Pen’s Social gathering, or the Different für Deutschland and AFD Social gathering in Germany, it is determined by what we see there. That is going to be an actual key ingredient of the place it is transferring. If it stays establishment, and that is what you are going to get, then issues like Yellow Vest and the Brexit Motion will calm down.
And once more, going again to the Presidential Actuality Present in america, there isn’t any motion for a brand new occasion, for a brand new method, and a brand new sort of system. It is simply extra of the identical. And so we do not see a lot change taking place in america. Nevertheless it’s essential to look at the EU elections which are going to be taking place this week.
Mike Gleason: How about metals, right here. Gerald? Do you see the headwinds persevering with to overwhelm gold and silver, or will we ultimately get the spark that we have been searching for as a way to lastly get them transferring to the upside? I do know you have been speaking concerning the $1,380, $1,385 degree in gold being that key mark that we have to take out. We’re about $100 beneath that, as we’re speaking right here on Wednesday afternoon. Discuss concerning the metals and what you are seeing there.
Gerald Celente: Simply to make it clear, I am closely invested in metals, so it is not like I do not need them to go up. However I name it as I see it, and I have been saying mainly the identical factor now for numerous years. And that’s that gold has to interrupt the $1,385 mark to hit $1,450. When it hits $1,450, then it goes to $2,000. We want an occasion that has to deliver gold as much as the extent of being a safe-haven asset. And once more, those that we see taking place that may do that’s what’s occurring with america towards Venezuela, and notably towards Iran within the Center East. As a result of if conflict breaks out within the Center East, you are going to see oil costs spike to above $100 a barrel. The globe cannot afford that. So what does that imply? Effectively the greenback’s getting stronger, it is not getting weaker. That is another excuse why gold is staying weak, as a result of the stronger the greenback goes, the weaker gold goes.
So, going again to grease. Because the greenback will get stronger, many currencies are declining in worth. Dramatically. So, when oil costs are petrodollars, in case your foreign money is getting weaker, the worth of oil is way increased, you need to pay much more on your vitality. The extra that goes into the gasoline tanks, the much less goes into the money registers.
So, that is what we see as a black swan occasion that would drive gold costs increased, and that’s if oil costs spike. As a result of it is essential to recollect, Mike, that the final 5 recessions had been preceded by spiking, or adopted, I ought to say, spiking oil costs. So that is the one which we’re wanting on the most, in addition to conflict. However so far as the financial fundamentals as they’re, we do not see the debt bubble popping so long as they maintain pumping more cash into the system, to artificially inflate it presently.
Mike Gleason: Effectively, so we wrap up right here, any closing ideas, or anything? Every other developments you consider individuals ought to be specializing in, or searching for or taking note of, as we transfer into the center a part of the yr?
Gerald Celente: I feel we have lined it fairly nicely. What’s essential, in speaking about this, is to not purchase the traces that the media and the federal government are placing out, that the media is simply repeating – the ‘press-titutes” as I name them. As a result of the individuals within the media simply receives a commission to place out by their company johns, and their Washington whoremasters. So, individuals are being led in instructions with out substantial data of the details, they usually’re simply following the lead that they are being taken on by the federal government, or by particular pursuits, with out realizing the details behind them. So, as this conflict speak heats up and the conflict drums continue to grow louder, keep in tune to the present occasions forming future developments. And naturally, you are able to do that with the Tendencies Journal, as a result of the media’s not doing that. Nevertheless it’s essential presently, as a result of we’re very involved concerning the route we’re getting in now.
Mike Gleason: Effectively, we’ll depart it there, Gerald. We all the time take pleasure in it, and admire the time, as soon as once more right this moment. Now earlier than we allow you to go, inform listeners a bit bit extra concerning the great Tendencies Journal and every other data they need to know concerning the Tendencies Analysis Institute and the assorted ways in which they’ll comply with your work frequently.
Gerald Celente: Effectively, the Tendencies Journal is a month-to-month. We simply got here out with a brand new version. And, in fact, we do Development Imaginative and prescient 20/20 Podcasts, and Tendencies within the Information broadcasts. We get these each weekday evening. And we do Development Alerts every week. It is solely $129 a yr, money-back assure. It is the one journal, solely data supply on the earth, the place you may learn historical past earlier than it occurs.
Mike Gleason: Effectively, thank once more Mr. Celente. It was a pleasure as all the time, take care and benefit from the Memorial Day weekend.
Gerald Celente: Thanks Mike, and thanks for all that you just do.
Mike Gleason: Effectively, that can do it for this week. Our honest thanks, once more, to Gerald Celente, writer of the famend Tendencies Journal. For extra data, the web site is TrendsJournal.com, you should definitely test that out