Hedgeye Podcasts

In this edition of Real Conversations, Hedgeye CEO Keith McCullough welcomes Christopher Whalen, chairman of Whalen Global Advisors, in an extensive discussion ranging from his newly-released book Ford Men, a study of Ford Motor Co and the Ford family, to a host of important financial market issues affecting investors.

You don't want to miss this no-punches-pulled unplugged Q&A session with bestselling author Jim Rickards and hosted by Hedgeye CEO Keith McCullough. Exclusively on HedgeyeTV.

You don't want to miss this no-punches-pulled unplugged Q&A session with bestselling author Jim Rickards and hosted by Hedgeye CEO Keith McCullough. Exclusively on HedgeyeTV.

You don't want to miss this no-punches-pulled unplugged Q&A session with bestselling author Jim Rickards and hosted by Hedgeye CEO Keith McCullough. Exclusively on HedgeyeTV.

Most investors will dismissively tell you gold prices are entirely driven by greed and fear, and that the only way gold works as an investable asset is if the world ends.That’s simple-minded. Gold is a stable store of value. It’s money.“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney. Wieler continues:“We don’t think that gold will make you rich but it will help you retain your purchasing power. So yes it has gone up several thousand percent since the demonetization of gold but it still buys you the same amount of oil or the same size house it’s just very good money.”In the HedgeyeTV video interview above, Wieler and Hedgeye CEO Keith McCullough discuss…What drives gold prices (“real interest rates and energy prices,” Wieler says)The impact of upcoming Fed rate hikes and what that means for gold pricesAnd on the U.S. economy: “Even in an absolute goldilocks scenario, gold prices would only come off a little bit until we hit the next recession and the Fed has to lower rates,” Wieler says.For more, check out our interview with Goldmoney co-founder Josh Crumb, “GOLD: The Complete Investor’s Guide From the Smartest Guy In the Room.”

Most investors will dismissively tell you gold prices are entirely driven by greed and fear, and that the only way gold works as an investable asset is if the world ends.

That’s simple-minded. Gold is a stable store of value. It’s money.

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney. Wieler continues:

“We don’t think that gold will make you rich but it will help you retain your purchasing power. So yes it has gone up several thousand percent since the demonetization of gold but it still buys you the same amount of oil or the same size house it’s just very good money.”

In the HedgeyeTV video interview above, Wieler and Hedgeye CEO Keith McCullough discuss…

What drives gold prices (“real interest rates and energy prices,” Wieler says)

The impact of upcoming Fed rate hikes and what that means for gold prices

And on the U.S. economy: “Even in an absolute goldilocks scenario, gold prices would only come off a little bit until we hit the next recession and the Fed has to lower rates,” Wieler says.

For more, check out our interview with Goldmoney co-founder Josh Crumb, “GOLD: The Complete Investor’s Guide From the Smartest Guy In the Room.”

It is an age of heightened global angst and uncertainty, an era of discontent. An age which gives birth to brazen, Never-In-a-Million-Years political outsiders like Donald Trump. And Brexit, Britain’s equally shocking decision to exit the EU. Political “elites” might argue recent voting decisions of their electorate are chaotic, or mad. Whatever you call it, it’s the reality we must grapple with today, says Pippa Malmgren, founder of economic consultancy DRPM Group and author of the best-selling book “Signals.” “The philosophical question of our time is are you a globalist or are you a patriot,” she says. “And can you be a global patriot or a patriotic globalist?” Once you accept that the global zeitgeist is divided along these two competing interests, Malmgren says, the world falls more neatly into place. Malmgren knows a thing or two about simplifying the complex. She’s had a storied career on Wall Street and in Washington, having served as special assistant to President George W. Bush for economic policy on the National Economic Council. She also has considerable experience interpreting financial markets, serving as Deputy Head of Global Strategy at UBS and Chief Currency Strategist for Bankers Trust.“What I find is that people in financial markets love to go around blind in one eye. They only look at things through a mathematical or data lens,” Malmgren says in the Real Conversations interview above with Hedgeye CEO Keith McCullough. These people miss a lot of things. On Brexit or Trump’s victory, Malmgren had the foresight to see both coming long before these events shocked markets.“What’s fascinating is that you see this populist uprising everywhere in the world and everywhere people think it’s a local issue,” Malmgren says.The underlying driver is really simple. The debt burden is so big it can’t be paid down so that causes lack of jobs, slow economic growth and kills your hope for the future, she says.Meanwhile, the only solution policymakers have come up with is to inflate away that debt by devaluing the currency. This hurts domestic purchasing power as citizens see their paychecks worth less and less.“The question then becomes how come my wealth is being distributed to some other guy and not me?” Malmgren says.That leads to a final question that should frighten any career politician desperately clinging onto their post, “Why are you in charge?”If you follow this line of logic the rise of Trump in the U.S. or Le Pen and Macron in France isn’t a big leap. Malmgren has some intriguing ideas on Trump:“I’ve been describing Trump as the “Uber of politics.” It’s important to think this way because he is literally disrupting, displacing, disintermediating the traditional power structures. That includes the media. It also includes the fundraisers, because there’s no need for them if you can win the presidency without them. It’s the technocracy, where I come from, and where people are normally hired into the senior jobs in bureaucracy and expect to get big titles. They’ve all been told we can run the government without you.”Populist tides are clearly rising in Europe too. Malmgren lives with her family in London. She watched as the Brexit vote unfolded in real-time. As freaked-out investors watched at home, Malmgren watched with curiosity as Italian banks got whacked in early morning trading as British voters repudiated their EU membership. The market was sending a clear message to politicians across the continent. Get your act together or more countries could leave the Eurozone.The reaction also served as a self-perpetuating feedback loop. With share prices tumbling, the pressure was on Italian banks to come up with more capital. The government stepped in:“Italian politicians said we’ve got to have a bailout because this is such a structurally important institution. And the public heard this and said ‘We’re going to find $5 billion to bail out a bank

It is an age of heightened global angst and uncertainty, an era of discontent. An age which gives birth to brazen, Never-In-a-Million-Years political outsiders like Donald Trump. And Brexit, Britain’s equally shocking decision to exit the EU.

Political “elites” might argue recent voting decisions of their electorate are chaotic, or mad. Whatever you call it, it’s the reality we must grapple with today, says Pippa Malmgren, founder of economic consultancy DRPM Group and author of the best-selling book “Signals.”

“The philosophical question of our time is are you a globalist or are you a patriot,” she says. “And can you be a global patriot or a patriotic globalist?”

Once you accept that the global zeitgeist is divided along these two competing interests, Malmgren says, the world falls more neatly into place.

Malmgren knows a thing or two about simplifying the complex. She’s had a storied career on Wall Street and in Washington, having served as special assistant to President George W. Bush for economic policy on the National Economic Council. She also has considerable experience interpreting financial markets, serving as Deputy Head of Global Strategy at UBS and Chief Currency Strategist for Bankers Trust.

“What I find is that people in financial markets love to go around blind in one eye. They only look at things through a mathematical or data lens,” Malmgren says in the Real Conversations interview above with Hedgeye CEO Keith McCullough. These people miss a lot of things. On Brexit or Trump’s victory, Malmgren had the foresight to see both coming long before these events shocked markets.

“What’s fascinating is that you see this populist uprising everywhere in the world and everywhere people think it’s a local issue,” Malmgren says.

The underlying driver is really simple. The debt burden is so big it can’t be paid down so that causes lack of jobs, slow economic growth and kills your hope for the future, she says.

Meanwhile, the only solution policymakers have come up with is to inflate away that debt by devaluing the currency. This hurts domestic purchasing power as citizens see their paychecks worth less and less.

“The question then becomes how come my wealth is being distributed to some other guy and not me?” Malmgren says.

That leads to a final question that should frighten any career politician desperately clinging onto their post, “Why are you in charge?”

If you follow this line of logic the rise of Trump in the U.S. or Le Pen and Macron in France isn’t a big leap. Malmgren has some intriguing ideas on Trump:

“I’ve been describing Trump as the “Uber of politics.” It’s important to think this way because he is literally disrupting, displacing, disintermediating the traditional power structures. That includes the media. It also includes the fundraisers, because there’s no need for them if you can win the presidency without them. It’s the technocracy, where I come from, and where people are normally hired into the senior jobs in bureaucracy and expect to get big titles. They’ve all been told we can run the government without you.”

Populist tides are clearly rising in Europe too. Malmgren lives with her family in London. She watched as the Brexit vote unfolded in real-time. As freaked-out investors watched at home, Malmgren watched with curiosity as Italian banks got whacked in early morning trading as British voters repudiated their EU membership. The market was sending a clear message to politicians across the continent. Get your act together or more countries could leave the Eurozone.

The reaction also served as a self-perpetuating feedback loop. With share prices tumbling, the pressure was on Italian banks to come up with more capital. The government stepped in:

“Italian politicians said we’ve got to have a bailout because this is such a structurally important institution. And the public heard this and said ‘We’re going to find $5 billion to bail out a bank

It’s simple really. Inside the hallowed halls of the Federal Reserve, unelected, largely unaccountable bureaucrats decide whether the economy is running too hot or too cold, then tinker with monetary policy accordingly. It’s a tremendous amount of power. A generous reading of history suggests the Fed has a dubious track record of forecasting where the U.S. economy is headed. In fact, many are searching for a better way – an alternative to a broken system. None is in more earnest pursuit than Danielle DiMartino Booth, whose brand new book “Fed Up” explains why the current Federal Reserve system is due for a serious revamp. Few are as critical or as qualified to suggest fixes. DiMartino Booth joined Richard Fisher’s Dallas Federal Reserve shortly after the cracks in the financial system were beginning to show. The Fed spent much of 2007 vehemently denying these cracks even existed. Recall in July 2005, that when asked about an impending housing bubble bursting, one that might trigger recession, then Fed chair Ben Bernanke famously said, “I guess I don't buy your premise. It's a pretty unlikely possibility.”During her decade or so at the Dallas Fed, DiMartino Booth recalls feeling initially “daunted” by all these “brilliant people” who could “do calculus in their sleep.” She quickly became disillusioned by how insular the organization was. Sure, the halls were packed with Ph.D’s but many of these academics really didn’t understand the ins and outs of markets. “Generally, if you say stock market to a Ph.D. economist it’s like saying ‘Boo!’ on Halloween. They get all freaked out,” DiMartino Booth says. As the housing market was rolling over and Bear Stearns blew up, “it felt like a hospital,” she says. “Nobody was really worried.”Unsurprisingly, the Fed’s cloistered monasticism has come under tremendous scrutiny and criticism. Many things need to change. “I think the first step should be an acknowledgement of their own fallibility,” she says. “They really are espousing one view of economic thought that would make even Keynes rotate in his grave.”What else? DiMartino Booth suggests a number practical reforms. “We’re no longer the same nation that we were in 1913 when the Federal Reserve act was initially conceived,” she says. In other words, let’s bring the Fed into the realities of the 21st Century.• Reduce the Fed’s mandate to just minimizing inflation. • Take the labor mandate out of the equation and put it back in the hands of the private sector. • Reduce regional Fed offices to ten districts (from twelve currently) by adding a regional Federal Reserve office (or two) on the West Coast and absorbing Minneapolis, St. Louis and Cleveland into Chicago. • Give every district a permanent vote to minimize the power of votes in New York and Washington D.C.• The Fed should hire a more diverse staff with more financial market familiarity and experience• The Fed needs a better appreciation of monetary policy rules, like the Taylor Rule, which would help serve as a system of checks and balancesThere’s hope. By June of 2018, vocal Fed critic President Donald Trump will be able to nominate as many as five Federal Open Market Committee (FOMC) members, DiMartino Booth notes. Meanwhile, accomplished former Goldman Sachs execs like Treasury Secretary Steven Mnuchin and director of the National Economic Council Gary Cohn have Trump’s ear on fixing the Fed. “They are clearly the two most powerful people when it comes to the economy and finance,” DiMartino Booth says. The crusade to fix the Fed continues. Change is coming.

It’s simple really. Inside the hallowed halls of the Federal Reserve, unelected, largely unaccountable bureaucrats decide whether the economy is running too hot or too cold, then tinker with monetary policy accordingly.

It’s a tremendous amount of power.

A generous reading of history suggests the Fed has a dubious track record of forecasting where the U.S. economy is headed. In fact, many are searching for a better way – an alternative to a broken system. None is in more earnest pursuit than Danielle DiMartino Booth, whose brand new book “Fed Up” explains why the current Federal Reserve system is due for a serious revamp.

Few are as critical or as qualified to suggest fixes.

DiMartino Booth joined Richard Fisher’s Dallas Federal Reserve shortly after the cracks in the financial system were beginning to show. The Fed spent much of 2007 vehemently denying these cracks even existed. Recall in July 2005, that when asked about an impending housing bubble bursting, one that might trigger recession, then Fed chair Ben Bernanke famously said, “I guess I don't buy your premise. It's a pretty unlikely possibility.”

During her decade or so at the Dallas Fed, DiMartino Booth recalls feeling initially “daunted” by all these “brilliant people” who could “do calculus in their sleep.”

She quickly became disillusioned by how insular the organization was. Sure, the halls were packed with Ph.D’s but many of these academics really didn’t understand the ins and outs of markets.

“Generally, if you say stock market to a Ph.D. economist it’s like saying ‘Boo!’ on Halloween. They get all freaked out,” DiMartino Booth says.

As the housing market was rolling over and Bear Stearns blew up, “it felt like a hospital,” she says. “Nobody was really worried.”

Unsurprisingly, the Fed’s cloistered monasticism has come under tremendous scrutiny and criticism. Many things need to change.

“I think the first step should be an acknowledgement of their own fallibility,” she says. “They really are espousing one view of economic thought that would make even Keynes rotate in his grave.”

What else? DiMartino Booth suggests a number practical reforms.

“We’re no longer the same nation that we were in 1913 when the Federal Reserve act was initially conceived,” she says. In other words, let’s bring the Fed into the realities of the 21st Century.

• Reduce the Fed’s mandate to just minimizing inflation.

• Take the labor mandate out of the equation and put it back in the hands of the private sector.

• Reduce regional Fed offices to ten districts (from twelve currently) by adding a regional Federal Reserve office (or two) on the West Coast and absorbing Minneapolis, St. Louis and Cleveland into Chicago.

• Give every district a permanent vote to minimize the power of votes in New York and Washington D.C.

• The Fed should hire a more diverse staff with more financial market familiarity and experience

• The Fed needs a better appreciation of monetary policy rules, like the Taylor Rule, which would help serve as a system of checks and balances

There’s hope.

By June of 2018, vocal Fed critic President Donald Trump will be able to nominate as many as five Federal Open Market Committee (FOMC) members, DiMartino Booth notes.

Meanwhile, accomplished former Goldman Sachs execs like Treasury Secretary Steven Mnuchin and director of the National Economic Council Gary Cohn have Trump’s ear on fixing the Fed. “They are clearly the two most powerful people when it comes to the economy and finance,” DiMartino Booth says.

The crusade to fix the Fed continues. Change is coming.