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