George Robertson: The Fed Has No Control, There Will Be No Recession, and Fiscal Supremacy Will Drive Stocks To “Ponzi Stage”

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Nov 13, 2023

George Robertson, an economic analyst, argues that the fiscal stimulus will lead to a continuous economic boom. He challenges common conceptions on the risk-free yield curve and the impact of the Federal Reserve's monetary policy. The podcast covers topics such as the potential for a recession, the relationship between interest rates and new home constructions, the behavior of euro dollars, and the disconnection between S&P 500 earnings and reality.

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Introduction

00:00 • 5min

The Two Camps on a Possible Recession

04:31 • 22min

The Relationship Between Interest Rates and New Home Constructions

26:32 • 2min

The Relationship Between Mortgage Prepayment Speed and the Economy

28:33 • 2min

The Relationship Between the Yield Curve and Mortgage Rates

30:44 • 20min

The Behavior of Euro Dollars and Term Premium

50:16 • 14min

Digital Asset Summit London and Evaluating the Federal Reserve's Actions

01:03:55 • 3min

The Role of Data in Determining GDP Surge

01:06:39 • 19min

Bullish Outlook on Stocks, Bond Sell-Off, and Anticipating a Ponzi Stage

01:25:46 • 2min

Disconnection Between S&P 500 Earnings and Reality

01:27:59 • 4min

Bank Loans, Savings, and Fiscal Policies

01:31:58 • 20min

George Robertson joins Forward Guidance to argue that the exceptionally large fiscal stimulus will mean that the economic boom has no end in sight. Once the market realizes there will be no recession, Robertson continues, stocks will soar and the 10-year will rise. Robertson makes the case that the “true” risk-free yield curve is actually not inverted, a claim at odds with common conceptions and one of many claims that Jack pushes back on, some others being that the Federal Reserve’s monetary policy has effectively no impact on the economy and that the 10-year Treasury yield is an accurate gauge of future nominal GDP. FIlmed on October 30, 2023.

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Timestamps:

(00:00) Introduction

(04:00) The Huge Economic Boom Is Just Getting Started

(07:16) George Says Federal Reserve Has "Violent" Control of the Press

(11:49) George Says Risk-Free Rates Are Commonly Misunderstood

(20:32) Federal Reserve is "One Of Greatest Creations Of U.S. Democracy," Says George Robertson

(23:08) Debate About Interest Rate Impact on Mortgage Prepayment Speeds

(30:00) Debate About Whether Mortgage Curve Is "True" Yield Curve

(51:19) SOFR is Complete Useless Garbage

(01:02:14) Minsky Comes In: Hedge Phase to Speculative Phase to Ponzi Phase

(01:26:00) 10-Year Headed To 6% As "Cheap As Hell" Stocks Will Enter "Ponzi Phase"

(01:30:40) It's "Foolish" To Make A Call On Labor as Jobs Market At 50-Year High, Says George Robertson

(01:34:00) Modern Monetary Theory (MMT) & Inflation

(01:45:29) George's Experience With Long-Term Capital Management (LTCM)

Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.