Michael Howell, CEO of CrossBorder Capital, an investment advisory firm, and author of Capital Wars, returns to The Julia La Roche Show for an in-studio episode. In this episode, Howell reveals money is flowing out of financial markets into the real economy, marking the end of Wall Street's era and the beginning of Main Street's turn. He warns the market is in a "speculation phase" with low quality returns built on narrow foundations—only AI and semiconductors are racing while most securities stagnate—and the next phase will be "turbulence" as liquidity slows and the bearish flattening yield curve continues. Howell details how the system has monetized with the Treasury refinancing $600 billion per week in short-term bills, notes there is "unquestionably way too much debt," and makes the contrarian call that the Fed will raise rates in the next 12 months because the economy is too strong at 7-8% nominal GDP growth. He positions commodities and energy as the place to be, argues gold is a hedge against monetary inflation (not CPI), and suggests the gold-oil ratio could imply oil prices of $200 per barrel.

Thank you to our sponsor Monetary Metals. https://monetary-metals.com/julia

Links: 

Website: http://www.crossbordercapital.com/

Twitter/X https://x.com/crossbordercap

Substack: https://capitalwars.substack.com/

Book: https://www.amazon.com/Capital-Wars-Rise-Global-Liquidity/dp/3030392902

0:00 Opening - Money leaving financial markets for real economy

1:29 Speculation phase - Low quality returns on narrow foundations

6:49 Liquidity rolling over - Rate of change critical

7:38 Money flowing from financial sector to real economy

13:23 Debt refinancing phenomenon - 4 out of 5 transactions

15:25 Way too much debt, only monetization is the way out

16:40 China monetizing like Japan did with Abenomics

19:32 US monetization already happening - $600B weekly debt refinancing

24:28 MOVE index suppressed through treasury buybacks

30:12 Kevin Warsh expectations for new Fed chair

32:01 Inflation no longer transitory - Now illusionary

35:48 Monetary inflation hurdle 7-8% per year

37:26 What to own - Diversified into commodities, energy, gold

40:10 Gold-oil ratio could mean oil $200 per barrel

40:50 Contrarian call - Fed must raise rates in 12 months

43:15 Find him at Capital Wars Substack