#247 Chris Whalen: Tariffs Are a Distraction - The Real Story Is America's Retreat from Global Currency Dominance

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Apr 5, 2025

Chris Whalen, chairman of Whalen Global Advisors and author of The Institutional Risk Analyst blog, dives deep into the complexity of tariffs, describing them as distractions from America's fading global currency dominance. He discusses worrying trends in consumer credit and forecasts potential defaults in multi-family housing. Whalen also analyzes the bond market's surprising rate cuts and advises investors to seek opportunities amid market volatility. His insights present a compelling picture of the shifting economic landscape.

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INSIGHT

Tariffs as a Distraction

The tariff debate distracts from America's retreat from global currency dominance.
Trump aims to end the Bretton Woods system and force fairer trade terms.

ADVICE

Stock Opportunities Amid Volatility

Investors should consider stocks despite market volatility.
The current focus on tariffs presents a distraction, creating potential opportunities.

INSIGHT

Historical Context of Tariffs

Tariffs have existed throughout American history, protecting domestic industries.
Current tariffs address China's predatory mercantilist practices.

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Chris Whalen, chairman of Whalen Global Advisors and author of The Institutional Risk Analyst blog, returns to The Julia La Roche Show for episode 247 to discuss tariffs, markets, and the economy.

Sponsor: This episode is brought to you by Monetary Metals. ⁠https://monetary-metals.com/julia⁠

Chris Whalen explains why the tariff debate is largely a distraction - part of Trump's "shock and awe" strategy to force trading partners to negotiate fairer terms as America attempts to end the Bretton Woods system after 75 years. He sees credit deterioration emerging in auto loans and credit cards while warning about multi-family housing defaults, particularly in smaller urban properties where market indicators show values 50% below their last sale. Despite market fears, Whalen believes the bond market is already cutting rates regardless of Fed action, with the 10-year yield dropping to 3.94% due to strong demand for risk-free collateral and Treasury's efforts to reduce auction sizes. He predicts financial consolidation will continue, pointing to the mortgage industry shrinking to just five major lender/servicer groups, while suggesting investors should look for stock opportunities despite current volatility.

Links:

Twitter/X: https://twitter.com/rcwhalen

Website: https://www.rcwhalen.com/

The Institutional Risk Analyst: https://www.theinstitutionalriskanalyst.com/

Inflated book (2nd edition): https://www.amazon.com/Inflated-Money-Debt-American-Dream/dp/139428571X

Stanley Middleman book: https://www.amazon.com/Seeing-Around-Corners-Achieving-Business/dp/B0D5PTSJVC/

0:00 Introduction1:27 Tariffs 3:03 Market reaction assessment5:11 Investment strategy amid volatility7:40 Historical context of tariffs10:37 Main Street vs Wall Street priorities11:17 Impact and distribution of tariff costs13:30 Consumer credit and lending trends15:34 Multi-family housing defaults17:36 Real estate overbuilding concerns18:17 Consumer recession outlook20:46 Job market and recession dynamics22:57 Fed outlook and rate environment24:52 Balance sheet impact discussion26:56 Treasury market outlook29:36 Client questions about market positioning30:57 Closing remarks and contact information