Warren Pies, founder of 3Fourteen Research, explains how markets have transitioned from a deflationary mindset to a debasement era over the past five years, driven primarily by massive fiscal spending rather than Fed policy. He argues that anger directed at the Fed should be redirected toward fiscal authorities who created unprecedented pro-cyclical deficits. Pies is benchmark long equities and bullish on hard assets like gold, having hit his $3,500 gold target this year. He believes Fed rate cuts will be inconsequential since fiscal dominance has already changed the paradigm, and core CPI won't fall below 3% due to tariff-driven goods inflation replacing the pre-pandemic goods deflation that helped achieve the 2% target.
This episode is sponsored by Monetary Metals. Visit https://monetary-metals.com/julia
Links:
https://www.3fourteenresearch.com/
https://x.com/WarrenPies
Timestamps:
0:00 Welcome and introduction
1:18 Big picture framework
5:03 Behavioral changes in debasement era
8:00 Fiscal dominance
10:49 Jackson Hole speech
12:18 Labor market loosening
16:06 Immigration impact
17:31 Inflation stickiness
21:44 Widening perception gap in macro
26:23 Housing market outlook
30:07 Equity positioning
32:35 Bond allocation
35:36 Gold outlook
37:06 Bitcoin allocation
38:28 AI optimism
42:45 Closing remarks
