Tom Bodrovics hosts both Bob Thompson from Raymond James and Larry McDonald, creator of the Bear Traps Report, for a discussion on inflation trends in the G7 economies. They emphasize the unprecedented $16 trillion debt increase since 2008 due to fiscal and monetary responses to crises, which has led to significant inflationary pressures, particularly in energy costs. They argue that the market’s response is putting pressure on long-term bonds and the US currency, potentially requiring a hard asset tie for stability.

They also discuss the implications of a strong US dollar for Trump’s economic goals, with some factions favoring a weaker dollar. A strong dollar negatively affects U.S. manufacturing exports, hurts companies with sales outside the United States, and forces the Fed to buy bonds, potentially leading to inflation and an economy weakening.

Central banks are increasing their gold purchases and shifting away from US treasuries due to sanctions and mistrust in the US government, which could negatively impact the dollar’s strength. Gold stocks have underperformed the S&P 500, but may offer asymmetrical returns as interest rates remain low and inflation normalizes at a higher level.

They discuss historical gold investing regimes and the transition back towards the one where real rates are favorable for gold. They emphasize the importance of recognizing trends, being ahead of the power curve, and investing accordingly. The possibility of the Federal Reserve’s inflation target shifting towards 3% is discussed, which could benefit certain investment portfolios in sectors like industrial, metals, materials, oil, and gas.

Time Stamp References:
0:00 – Introduction
0:48 – Fed & Inflation
10:18 – Financial Conditions?
13:13 – Misplaced Optimism?
18:13 – Strong Dollar & Trump?
24:56 – C.B. Gold Buying
31:30 – Sectors & Momentum
34:30 – Entry Points & Markets
36:37 – Bull Markets
42:03 – Strong/Weak Bull
42:54 – Energy Demand & Silver
49:03 – Rates & Fed Targets
52:30 – Stocks Vs Commodities
55:17 – Mining Clock Cycle
57:18 – Concluding Thoughts
1:01:13 – Wrap Up

Talking Points From This Episode

• Unprecedented debt increase contributes to inflationary pressures, particularly in energy costs.
• Strong US dollar negatively impacts U.S. manufacturing exports and forces Fed bond buying.
• Gold stocks offer asymmetrical returns as interest rates remain low and inflation normalizes.

Bob Thompson Links:
Twitter: https://x.com/bobthompsonrj
Website: https://www.raymondjames.ca/
Website: https://bobthompson.ca

When Bob Thompson started university, he thought he was headed towards a career in medicine. He graduated from Simon Fraser University with a Bachelor of Science (BSc), but with his family facing financial adversity, achieving financial security became first an interest and then a passion. Bob is now a Certified Investment Manager and Accredited Investment Fiduciary professional with more than 20 years of experience in the financial services industry.

Over the course of his career, Bob has established himself as a respected portfolio manager and one of Canada’s leading authorities on customized investments. With an in-depth knowledge and scientific approach to financial markets, Bob and his team help institutions and select clients to meet their specialized financial goals.

He has won numerous awards for portfolio management, and has established himself as a sought after media resource and industry speaker. He is the author of Stock Market Superstars: Secrets of Canada’s Top Stock Pickers, a “must-read” for both investors and portfolio managers. His perspective and insights into markets have been featured in Maclean’s, the Globe and Mail and the Financial Post, and he is a popular guest on Bloomberg Canada, Business News Network and CBC News, among others. Bob is also a frequent guest speaker at international investment conferences on portfolio strategy and in specialized investments.

Bob is actively involved with the community as a member of Canada Company: an organization committed to developing and supporting initiatives that help our men and women of the Canadian Armed Forces. He has also been a licensed pilot since the age of 16, and notes flying as one of his passions in life.

Larry McDonald Links:
Website: http://thebeartrapsreport.com
Twitter: https://twitter.com/convertbond
Amazon: https://tinyurl.com/2capfzt9

Larry McDonald is a New York Times bestselling author, CNBC contributor, and Political Risk Expert. He is also the creator of The Bear Traps Report, a weekly independent Macro Research Platform focusing on global political and systemic risk with actionable trade ideas.

Thought-provoking Larry McDonald presents his captivating views on the Trump Administration, U.S. Financial Crisis, European Sovereign Debt, and China’s Economic Meltdown – spiced with actionable risk indicators, risk management lessons, and sprinkled with humor.

In 2016, Larry McDonald joined ACG Analytics in Washington D.C., as a partner with a unique skill set, as one of today’s leading political policy risk consultants and strategists. From 2011 – 2016, he was Managing Director and Head of U.S. Macro Strategy at Society Generale.

In 2010 he founded an investment research firm which publishes the The Bear Traps Report, focused on Political and Systemic Risk with actionable trade ideas. Larry makes weekly appearances on CNBC as a contributor focused on political and economic risk and opportunities.

In late 2006, as Vice President at Lehman Brothers, he led his team into betting against the subprime mortgage market, profiting the firm over $2 billion before its demise. In 2009, he wrote the international bestseller A Colossal Failure of Common Sense, The Inside Story of The Collapse of Lehman Brothers – translated into 12 languages, selling over 400,000 copies.

Prior to working at Lehman, he was the co-founder of Convertbond.com, a website that provided convertible securities information with news, valuation, terms and analysis tools for convertible bonds, convertible preferred stocks, and other convertible securities. Convertbond was acquired by Morgan Stanley in 1999.

Larry McDonald’s proprietary risk indicators and risk management lessons are designed for Family Offices, Sovereign Wealth Funds, Hedge-Funds, and any investment group working to avoid the dangerous pitfalls in the post-Lehman financial markets.

McDonald was featured in the Academy Award winning documentary: Inside Job, and also featured in National Geographic’s award winning documentary: The 2000’s. He is a regular contributor on Bloomberg TV and Radio, Forbes, CNBC and Fox Business.

Larry has delivered over 125 keynote speeches worldwide. He details the complexities of the political policy implications of the Trump Administration and their relationship with Congress. Larry also adds the Lehman factor to his speeches, ‘why it was allowed to fail’, and above all – valuable risk indicators which help investors avoid the aftershocks that continue to rock the global economy until today. His presentations are thought-provoking and captivating.