Bonner Private Research Podcast

Monday, September 1st, 2025

Chiswick, West London

By Tom Dyson

I spoke with Matt Smith this week about the new book he’s published along with Doug Casey and his son, Maxim. It’s called The Preparation: How to Become Competent, Confident and Dangerous.

We don’t discuss investing. This is something much more important. The Preparation presents a radical alternative to college, founded on classical wisdom and Doug’s ideas about living with freedom. It’s so good… full of resources for learning skills like welding, flying a plane, building a house, self-defence, cooking plus a rigorous academic program.

As homeschoolers, this is definitely the approach we’re going to take to higher education when our kids reach college age.

Hope you enjoy the conversation!

Tom

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Tuesday, May 6th, 2025

Laramie, Wyoming

Well this is awkward. Yesterday, on short-notice, I had a 45-minute Private Briefing with BPR stalwart Rick Rule. It was, by popular demand, almost entirely about silver (we did talk about the gold/oil ratio at the very end). Why awkward?

Because Barron’s published an article this morning on the very first question I…

Thank you Giles Rowe, Stuart P. Swilley, Dean, Stephen Lindsay, David Unti, and many others for tuning into my live video with Tom Dyson! Join me for my next live video in the app.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.bonnerprivateresearch.com/subscribe

Tuesday, February 18th, 2025

Laramie, Wyoming

Earlier today I hosted a live call with Matt Smith from Doug Casey’s Crisis Investing.

During the chat, the gold price made an intra-day high of over $2,950/oz. Later in the chat, Matt made the case for why gold could go as high as $21k/oz.

Why?

How?

When?

What should you do next?

All good questions!

You can click on the video above to watch (I’m having a transcript made as well, but wanted to send you this as soon as possible).

Here’s a breakdown of the key topics we covered, with timestamps so you can jump to what matters most to you.

Timestamps & Major Topics

[00:00:00] Kicking things off – Matt and I set the stage for the conversation.

[00:01:00] A little about Matt – If you don’t know his background, here’s a quick rundown: entrepreneur-turned-regenerative cattle farmer in Uruguay, working with Doug Casey, and a big believer in getting geographically unlinked from centralized systems.

[00:02:00] What is regenerative farming? – How Matt runs 250 head of cattle with zero external inputs, and why this model matters in today’s world.

[00:04:00] The Mar-a-Lago Accords – Trump’s team has a real plan to reset the monetary system. It’s not just talk. We break down what’s coming and what it means for you.

[00:07:00] Why they want to devalue the dollar – Trump’s people think the dollar is way too strong, making U.S. exports uncompetitive. Their solution? Drive it lower. Here’s how they’re doing it.

[00:11:00] Will this actually work? – Whether they pull it off or not, the fact that they’re even trying is a game-changer.

[00:13:00] Gold’s role in the reset – Trump’s team isn’t stupid. They know gold is key to restoring faith in the financial system. We go deep into how they might use it.

[00:16:00] What’s really in Fort Knox? – Elon Musk and Rand Paul want an audit of U.S. gold reserves. If it turns out the gold isn’t there (or if there’s way more than expected), what happens next?

[00:18:00] Gold’s breakout – Is this rally the start of something huge, or just another head fake? Spoiler: this one looks real.

[00:21:00] Infrastructure & energy – Trump wants to rip out the regulatory roadblocks and supercharge energy and AI. This could be the biggest infrastructure buildout since the 1950s.

[00:26:00] Mining stocks – They’ve been dirt cheap and ignored for years. That’s starting to change. Here’s why it’s a massive opportunity.

[00:28:00] The final gold bull market? – Doug Casey has called this the last great gold boom before gold gets re-monetized. If he’s right, this is your last chance to play it.

[00:33:00] The risks no one talks about – Even if Trump’s team pulls this off, does it just lead to an even bigger, more centralized government? We dig into it.

[00:38:00] Redeemability – Will this new system actually let people redeem dollars for gold, or is it just another illusion?

[00:41:00] The China model? – Trump’s approach has a lot in common with China’s industrial strategy. Is that where we’re heading?

[00:45:00] Wrapping up – Everything’s about to change. Are you ready for it?

Bottom Line

Gold’s on the move. There are reasons why. But there are a lot of dots to connect. And the picture they make isn’t entirely clear. This call with Matt helped us understand some of what’s happening, what to expect next, and most importantly, what you should do with your money now.

Enjoy!

Dan

PS Matt and Doug Casey collaborate on Crisis Investing. As a courtesy to Bonner Private Research subscribers—and because Bill and Doug go way back as friends—they’ve set up a special offer for BPR readers who want to subscribe. You can do so here. And if you enjoyed the video, let me know. We’ll do more in the future.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.bonnerprivateresearch.com/subscribe

Thank you George Atuan, CFA, TMacro06, Andrey, Lux et Libertas, and many others for tuning into my live video with Dr Pippa! Join me for my next live video in the app.

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.bonnerprivateresearch.com/subscribe

Welcome to another Fatal Conceits Podcast…

In Episode #78 (yes, it really has been that many…) we catch up with our nominee for “Man with Coolest Ever Job Title”…

Ronan McMahon, International Real Estate Scout.

We’ve known Ronan for almost twenty years now and only a couple of times caught up with him in the same place. Ordinarily (or perhaps extraordinarily), he’s jetting from Mexico’s Baja Peninsula to Portugal’s Silver Coast…

…or snapping up real estate deals (either for his readers or as Bill Bonner’s personal “boots on the ground” property scout) somewhere along the Mayan Riviera or among Costa Rica’s surfer/digital nomad communities…

…or he’s “trying out” resort golf courses in his native Ireland or somewhere in the Caribbean…

Between his own due diligence and his team of international scouts, there are precious few markets on which Ronan doesn’t have the inside track. (I tested this during our discussion by asking him about property in southern Albania… which, of course, he is perfectly up to speed on.)

Now, after two and a half decades beating untrodden paths around the world, Ronan has recently released a book, detailing his exploits, adventures and hard-won lessons from the road. It’s called Ronan McMahon’s Big Book of Profitable Real Estate Investing… and he’d like to send you a copy, gratis (you just have to pay the shipping).

Whether the international lifestyle is for you or not… whether you’d prefer a bolt hole abroad or closer to home… whether you’re hunting for a place to rest your head or an investment opportunity…

Take a break from the quotidian march for half an hour, pour yourself a copy of coffee (or a glass of wine…) and listen in to Ronan’s globetrotting adventures here, on the Fatal Conceits Podcast.

Cheers,

Joel Bowman

P.S. Know someone who’s always dreaming of a little place abroad… who’s on the lookout for a villa in the Mediterranean or a little cottage by the sea… who’s an unreconstructed romantic with their head in the clouds? Why not share this episode with them! It’s free, after all…

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.bonnerprivateresearch.com/subscribe

Welcome to Episode #78 of the Fatal Conceits Podcast…

They’re sometimes called “California refugees.” But they hail from New York and Illinois, too…

You’ll find them in sleepy little towns in Florida… Texas… Arizona… Nevada… and across the sunbelt… basically anywhere that doesn’t suffer oppressive taxation, creeping government, woke school curriculums, high crime, homelessness, drug epidemics…

The pandemic didn’t birth this trend, but it sure did accelerate it. Presently, California is losing about 370,000 people per year, a record rate.

In today’s program we’re joined by MN Gordon, editor and publisher of the Economic Prism newsletter and former California native. Earlier this year, Mr Gordon packed up his family and headed east to find his own American Bolt Hole. We begin today’s discussion with his fascinating story… then talk about Opendoor - as both an idea and a company - and what’s next for real estate in the US.

Please enjoy our discussion and leave your own comments and ideas regarding the best places in the US to live below…

Cheers,

Joel Bowman

P.S. For those inclined to read rather than listen, please find a lightly edited (for clarity) transcript below…

Thank you for reading Bonner Private Research. This post is public so feel free to share it.

TRANSCRIPT:

Joel Bowman:All right. Well, welcome back, dear listeners, to the Fatal Conceits Podcast. As you know, by now, it's a show about money, markets, mobs, and manias, not necessarily in that order. If you've not already done so, please head over to the Bonner Private Research substack page. You can find us at bonnerprivateresearch.substack.com, where there are now hundreds of articles on everything from high finance to lowly politics and everything in between. There's plenty of research reports there, of course, by our macro analyst, Dan Denning and investment director, Tom Dyson, as well as plenty of Bill Bonner's daily musings. You won't find them anywhere else.

And in addition, of course, there are many more conversations just like this on the Fatal Conceits Podcast. Grab that at the tab on the top of the page. And speaking of which, I'm delighted today to welcome a newcomer to the show. Mr. MN Gordon is the Editorial Director and Publisher of the Economic Prism Newsletter. I'll provide a link in the transcript to this, so you can head on over there. In particular, check out the library. You'll find plenty of usual suspects from Messrs. Hayek to Hazlitt to Mises, and all the rest of those free market oriented kind of gentleman. So, without further ado, Mr. MN Gordon, welcome to the program.

MN Gordon:Hey, Joel. Morning. Thanks for having me on.

Joel Bowman:Yeah, not a problem. Not a problem. Now, we've got so much to talk about, as is the case whenever we sit down these days. We had the remarks from Mr. Powell yesterday. There's real estate to discuss, credit markets, the dollar, on and on. But one thing I wanted to start with here is a story I read over on your Economic Prism website, and I think it's really instructive. I think a lot of people in America are thinking along these lines at the moment, and that is your exodus story from California. Why don't you just kick us off by telling us a little bit about how you got out of the Sunshine Tax State?

MN Gordon:Yeah, you bet. Yeah, I'm a native of Southern California, born and raised there and worked for many years there in my career. And over the years, it just became more and more intolerable of a place to be. Certainly, the high taxes and wacky politics have always been a part of California, but it really turned ugly or just more and more intolerable during the COVID lockdown that had taken place.

And my wife and my kids, we were just eager to get out and try something else and look for a place that maybe has a lighter touch from the government, more favorable tax policies, lower cost of living. So, we certainly found that in Knoxville, Tennessee. We moved out here in July, so we've been here for several months and we're really enjoying it so far. Really, really liking the green and wet conditions, not being in perpetual drought...

Joel Bowman:Must be a nice change.

MN Gordon:It is a nice change, for sure. And yeah, certainly more of a freedom feel here, no state tax, and lower cost of living, so it's turning out to be a really great move for us.

Joel Bowman:Fantastic. Yeah, my wife and I were just in Austin, Texas a couple of months back and ran randomly into a group of people who referred to themselves as "California refugees." There are these pockets of similar people, it seems like, all around the country, in Austin, in other states. You guys looked at a few other places, Arizona, Nevada, Texas, Florida, but none of them floated your boat for various reasons. What was your criteria?

MN Gordon:Yeah. That's right. I think for us, it was really finding that lower cost of living, finding somewhere that had very good access to nature. I grew up at the beach and really connected with the beach in my youth and into my early adulthood. And the older I got, the more appealing the mountains became for me. California certainly has mountains that you can go to, but they're kind of tinder boxes. You don't really want to spend much time in them, and certainly wouldn't want to live there.

And all the mountains in East Tennessee, we've got quick access to the Smoky Mountains here, and while they're certainly more subtle, the peaks are lower and what have you, they really are livable and very beautiful and enjoyable to spend time in. So, that was certainly something that attracted us to this area.

Joel Bowman:And you mentioned your wife and kids, obviously it was a more appealing environment for a family in addition to just the great outdoors and having easy access to the lush Smoky Mountains. What about things like schooling? I'm interested in this, in particular as a father of a young daughter, what were the kinds of, I don't want to call them grievances, but complaints that you had pre-COVID, did you find those exacerbated with lockdowns and that kind of thing? Was that prevalent where you were in Southern California?

MN Gordon:Yeah. Yeah, so that was also a big part of it. So, my son is 15, he'll be 16 next month or later this month actually. And so, he's in high school and the school he was going to, the local public school in Long Beach, has about 4,000 kids there, and they shut it down, of course during COVID. And when they reopened it, it really seemed like that the kids just went back and were really wild or what have you.

Anyhow, it just turned into a rough situation. There was an incident where the school safety officer ended up shooting and killing a woman that was fighting one of the students right in the street, in front of the school.

Joel Bowman:Wow. Oh my goodness.

MN Gordon:Yeah. So, it was really crazy. And then, just during COVID and this prevalence of this woke ideology that had seemed to come into the school. Several years ago, the state of California created a third alternative when you apply for a driver's license. So, you can be male, female, or X, right?

Joel Bowman:Oh, right, okay. Yep.

MN Gordon:Yeah. And so, all of a sudden then my son's got a teacher that is clearly a mister, but he goes by Mx, because that's what's on his driver's license, and just a lot of that kind of nonsense.

Joel Bowman:That teacher didn't happen to be the biology teacher, did they?

MN Gordon:Right, yeah.

Joel Bowman:Creates a little conflict.

MN Gordon:Yeah. So, we were eager to get out of there for those reasons, and certainly don't want to be too negative on it here, but that was also certainly part of the factors in our decision to leave.

Joel Bowman:So, how have you found it then in Tennessee? Because one of the things that you mentioned in the article, and actually one of the things that this group of "California refugees" impressed upon me when we met them in Texas, was exactly what you would said, which is, "Don't California our Tennessee." Or, "Don't California …

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Welcome to Episode #77 of the Fatal Conceits Podcast... 

In today’s conversation, I’m joined by author, value investor, student of life and editor of the popular ContrarianEdge newsletter, Mr. Vitaliy Katsenelson. 

I’ve been reading Vitaliy’s work, on and off, for over a decade now. In fact, we used to publish his columns and market insights occasionally in The Daily Reckoning, a publication I managed for Bill Bonner back in the 2000s, in what seems like another lifetime...

Vitaliy describes himself as “Born in Russia, Made in America,” a distinction we talk about during our conversation. He’s also a professor of finance, CEO of Investment Management Associates and a keen world traveler. 

Over the course of an hour or so, I asked Vitaliy about his insights into the beleaguered American housing market, what the Fed hath wrought for the US economy at large, the challenges facing bottom up value investors like himself and where to for stock markets over the short and medium term. 

We also talk about his newly published book, Soul in the Game - The Art and Meaning of Life.

Please enjoy - and share! - my conversation with Vitaliy Katsenelson, below...

Cheers,

Joel Bowman

TRANSCRIPT:Joel Bowman:All right, well, welcome back to another episode of the Fatal Conceits podcast, dear listener. If you've not already done so, please head over to our Substack page. You can find us at BonnerPrivateResearch.Substack.com, where we have hundreds of articles, research reports, and many more conversations just like this on the Fatal Conceits podcast tab at the top of the page, where we talk about everything from high finance to lowly politics and everything in between.

It is my pleasure today to welcome a gentleman to the show whose work I've been reading on and off for years, and as we were just talking about before we pressed record here, our email correspondence has gone back over a decade, so it'll be great to connect again. Vitaliy Katsenelson is the author of Contrarian Edge. Head over to his website there. He's got plenty of excellent material, mostly about investing, but a few life lessons in there, some political musings, lots of travel stuff. He's also the author of two investing books, Active Value Investing, and the Little Book of Sideways Markets, and most recently, a book that I hope we get to chat about today, Soul in the Game: The Art of a Meaningful Life.

So, first of all, Vitaliy, welcome to the Fatal Conceits podcast. I feel like it's long overdue.

Vitaliy Katsenelson:I know, Joel, it's a pleasure. Thank you. We're looking forward to it.

Joel Bowman:Outstanding. And as we were also just mentioning, if this background looks familiar, you were recently on a podcast with Anya Leonard, who runs the Classical Wisdom website. We sit about 10 feet away from each other. Being husband and wife, we share a home office, so if this is a little bit of deja vu...

Vitaliy Katsenelson:Absolutely. Yeah. No, that's still there.

Joel Bowman:All right, so there's lots of stuff I want to get to, Vitaliy. You covered such a wide breadth of subject matter in your musings, and again, people should head over to Contrarian Edge to check out your work there. But for readers who are just coming upon your work for the first time, I think they might be interested just in a bit of a Vitaliy origin story, because it's a very interesting one. You put it as “Born in Russia, Made in America,” which I thought was a very entertaining juxtaposition. How did you make that journey and come to that distinction?

Vitaliy Katsenelson:Yeah, so today I live in Denver, and I have a wife and three kids, and I run a value investment firm, IMA, and I also write, and I wrote several books, but I write articles all the time. And by the way, we have a Substack as well, so you can just look for my name on Substack. You can subscribe to the articles.

Joel Bowman:I'll put all the links to these links in the transcript.

Vitaliy Katsenelson:Perfect. Yeah. But I was born in Russia and I moved, my whole family moved to the United States in December, 1991. What's interesting about this, actually, I was not living in Russia. I was living in the Soviet Union, and then literally a month later it stopped, it ceased to exist. The reason we moved to Denver, because my father's youngest sister left Moscow in 1979, and she moved to Brighton Beach. If you watch Moscow on the Hudson, that movie basically describes her life.

Joel Bowman:Wow. Okay.

Vitaliy Katsenelson:And then she married the Rabbi, and Rabbi had a synagogue in Cheyenne, Wyoming, out of all places, which is, I don't know if there are any Jewish people there, but yeah, that's a different conversation. But anyway, she invited us over. There was an organization that does a lot of good things, actually, not just for Jewish people, called Jewish Family Services. They were in Denver. So my aunt decided that it was better for us to move to Denver than to Cheyenne, Wyoming, and I keep thanking my aunt every day just for that decision alone.

Joel Bowman:And so, I believe you were first studying and then lecturing at, was it the University of Denver?

Vitaliy Katsenelson:

Yeah. Yes. I studied, I got my undergraduate degree and a graduate degree at University of Colorado at Denver. And then I taught finance as an adjunct, which is a fancy word for part-time. So if you are a professor, and if you say part-time professor or part-time lecturer, it doesn't sound as interesting.

Joel Bowman:It sounds a little casual. Yeah.

Vitaliy Katsenelson:But adjunct, because most people have no idea what it is.

Joel Bowman:Right.

Vitaliy Katsenelson:And so suddenly, you sound important. So I taught finance for about seven years, and the reason I actually quit, because two reasons. Number one, I absolutely hated the part where I had to give out grades. I loved giving out As. I hated giving out Ds and Fs. And so, I hated that. But the second part is that after you teach the same class over and over again, it gets old.

And I realized when I write, I can teach, because every article would teach something, but I don't have to repeat every article. I don't have to repeat this semester after semester, so I can get to learn new things all the time. And so, I quit in 2007, so I haven't taught in 15 years.

Joel Bowman:And also, I guess as you mentioned with your Substack and with your Contrarian Edge page, you get to reach a much wider audience than just how many people can fit in the auditorium, right?

Vitaliy Katsenelson:Oh, absolutely. Yeah. I can help a lot more people with my writings than just in a classroom. Yes.

Joel Bowman:Excellent. We were back and forthing a little bit email-wise, and I'd been reading some of your work recently on the housing market, the US real estate market, and I wanted to kind of get into that, because I think that's, to use a popular phrase, “top of mind” for most people at the moment, with obviously the Fed having met recently. You and I are talking on November the 7th, for our readers' edification, here.

But it's been five days since the widely expected rate hike of 75 basis points that I think most people were paying attention to, most people had kind of expected that, but they were paying more attention to the tenor of Mr. Powell's remarks afterwards. He seems to be speaking fairly directly in his remarks, saying that the job of the Fed is not done at present. We're not looking to pause. "Talk of a pause is premature," I think were his exact words.

I wanted to get your take on how you think that shakes out in the housing market, because obviously there's a lot of Americans, in particular the middle class, with wealth tied up in that asset class, and you've written that you think it's quite worse than people think. Why is that?

Vitaliy Katsenelson:All right. If you look at the housing prices from 1999 to today, they basically went up about 40%. In less than four years, they went up 40%. Most of that increase happened actually over a three-year period. So, the median house today in the Unit…

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.bonnerprivateresearch.com/subscribe

And now for some more Fatal Conceits…

Welcome to Episode #76 of the Fatal Conceits Podcast, dear listener, a show about money, markets, mobs and manias.

All eyes were on the Jay Powell’s Fed this week, specifically the chairman’s remarks following the much-expected 75-basis point rate hike.

Word was that the central bank will “continue to do what needs to be done to get the job done." Actually, they were JP’s exact words.

“The job” to which Mr. Powell refers is, of course, to get inflation back to the 2% range.

What does that mean for stocks and the dollar in the near term?

What does it spell for America’s already-toppy housing market, the pillar of middle-class wealth?

And how will gold respond? The Midas Metal popped more than $50 on Friday. (Silver was up even more, doubling gold’s advance in percentage terms.)

For answers and insights, I spoke with Bonner Private Research’s macro man, up in Laramie, Wyoming, Mr. Dan Denning. Over 45 mins or so, we covered all of the above, plus BPRs Trade of the Decade, the coming Winter Catastrophe, 2022 Redux, and why you should panic now (in an orderly fashion, of course) and beat the rush.

Please enjoy our conversation and, as always, like, comment and share our work with friends and family far and wide.

Cheers,

Joel Bowman

Thank you for reading Bonner Private Research. This post is public so feel free to share it.

TRANSCRIPT:

Joel Bowman:All right, well welcome back to another Fatal Conceits podcast, dear listener, a show about money markets, mobs and manias. If you have not already done so, please head over to our Substack page. You can find us at bonnerprivateresearch.substack.com with hundreds of daily articles now on everything from high finance to lowly politics and a ton of in-depth research reports, many of which were authored by none other than my guest today, Bonner Private Research's, macro man up in Laramie, Wyoming, Dan Denning. Dan, welcome to the show. How do you do, mate?

Dan Denning:I'm doing all right. It's dark and cold and gloomy here in Laramie as winter approaches, but that's kind of how it feels like in markets right now, so I suppose that's appropriate.

Joel Bowman:Yeah, exactly. We're talking off camera just now and you were firing off emails this morning at around 5:00 AM. I'm imagining it was still well below freezing at that point up there?

Dan Denning:Yeah, it was supposed to snow this week, but it hasn't, which is good and it's been nice and sunny, but it has been something we've been paying attention to both behind the scenes and when we're writing to the readers, because as it gets colder in the US, we're dealing with this 32% drawdown in the strategic petroleum reserve and then these reports of impending or possible diesel shortages so you're kind of trying to separate what's fact from fake, I suppose, and go beyond what's in the news reports to see if it's actually impacting truckers and travel prices and things like that. So we, Bill, last year, penned a winter catastrophe and we had bad winter last year, but I think it could be worse this year and as you know, because you're organizing it, we're going to address that in early December.

Joel Bowman:Yeah, that's December 13 for our readers, listeners and viewers, I guess now that we're doing this on YouTube, but I'll pop a link down below where you can get some more information about registering for that event. As you mentioned, Dan, we're doing a bit of behind the scenes work just to get that all organized. It's going to be the 2022 Winter Catastrophe Redux, which will be more well attended than our first one, given that it was the inaugural event and we had just a few hundred readers on that very first call with Byron King and Rick Rule, but yeah, as you mentioned, the second one looks to be shaping up to be quite the event. Of course, it's the kind of thing that you don't want to be right about, a coming winter catastrophe, but that looks like what's on the plate anyway.

So let's start at the beginning, Dan, because we're talking on Thursday the 3rd of November, and of course the big news this week was yesterday's Federal Reserve meeting where Powell & Co. hiked rates by the expected 75 basis points, but I guess it was what followed that hike that kind of got markets a little spooked. We saw a 500 or so point drop in the Dow after Mr. Powell's remarks yesterday. I'm just going to read a quick quote here from the Fed Chairman in which he says "The question of when to moderate the pace of increases is much less important than the question of how high and how long to keep monetary policy restrictive." He said, adding that "It was very premature to discuss when the Fed might pause its increases." Was this more or less in line with what you and Tom had expected and what does it mean for both stocks and the dollar in the near term in your view?

Dan Denning:Yeah, I think the answer to the first question is definitely. The market, whether you use the future's market for interest rate expectations or you listen to the people that are quoted in mainstream media as analysts for the major banks or Wall Street firms, at the beginning of the year, they thought that the highest the Fed would go this year was 3.75% and we've been saying since the beginning of the year that it has to be much higher than that in order to bring inflation down from 8% to even 4%. A chart that we've shown repeatedly reveals that rate real interest rates, so interest rates adjusted for inflation, are still negative... and they're negative by a long way. So that would change if inflation halved from here, so the Fed wouldn't have to raise as high, but we've said that people consistently underestimate how high interest rates will have to go before inflation is under control and they probably underestimate the Fed's willingness to raise them that high.

So what you get is this mistake that we saw in the summer, and again, this mistake we've seen in the fall, where the market thinks the Fed is done raising interest rates, or will pivot to either raising them less fast or even cutting them, as some people had hoped, and so they bid up the price of especially growth stocks, risk assets as they say, and everybody gets super excited because they think the end is near. But as Powell said yesterday, it doesn't appear the end is anywhere close to being near. He said inflation hasn't come down since last year; that there will be no pause and that the so-called terminal rate or neutral rate, is at least 5%. So all that could change if the Fed issues a press release and has another press conference, but in terms of talking to the markets about where interest rates are headed, the message couldn't have been any clearer yesterday and I just don't know why people aren't listening to the Fed, so I think that's one reason Powell spoke so forcefully.

Joel Bowman:It's a strange situation, isn't it, when we get strong inflation prints, for example, or when things in the market seem to be breaking, and investors take that as of reason to bid up stocks because they think then, okay, the Fed is now going to have to ease off because things are starting to break. Powell said yesterday that he is going to "continue to do what needs to be done to get the job done" and by getting the job done, he explicitly mentioned bringing the rate of inflation back to around the 2% range. You've written about this before and so have both of Bill and Tom, but what does that imply for a real rate? And in other words, how far does the Fed have to keep raising before it can get, as they say, ahead of the curve, do you think?

Dan Denning:Well, if you look back to the '70s in a similar situation, where I think Powell is studying his playbook, you saw that the Fed prematurely cut interest rates when inflation began to come down and then inflation came roaring back, so from that point of view, they probably want to see whatever inflation target they have, whether it's 2% or 4%, which I think... I think it's more likely th…

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And now for some more Fatal Conceits…

“I mean, look, you seriously couldn't make this stuff up and it really is banana republic stuff, frankly. It's embarrassing and they just need to get a grip.” ~ Robert Marstrand on the sorry state of British politics.

Welcome to another episode of the Fatal Conceits podcast, dear listener. In this conversation, Episode #75, we catch up with UK-born investor and fellow Argentine resident, Robert Marstrand. Following his career as an investment banker at UBS, where he worked out of London, Zürich and Hong Kong, Robert joined forces with Nigel Farage to create UK Independent Wealth, a financial research service aimed at helping folks in the UK reclaim their financial independence. (Find out more about his work here.)

Over the course of a half hour or so, Rob takes us through the Shakespearean tragi-comedy that has been the past few months in UK politics… from the ousting of Boris Johnson… to Liz Truss’s spell as the shortest serving Prime Minister in the nation’s history… to the unelected appointment of Rishi Sunak… (or is it, as President Biden has it, “Rashi Sanuk”?)

Thrills and Spills

As with all such soap operas, there’s plenty of betrayals, backstabbing and upsets along the way… from the death of a monarch to generation-high inflation to plenty of turmoil in the markets, including a near catastrophe in the UK bond market… and a very embarrassing situation for the Bank of England itself…

As always, feel free to leave your comments below and to share this episode with friends on both side of The Pond.

Cheers,

Joel Bowman

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