MacroVoices

[@michaelhueppeler7005]

One reason for the draining of the SPR that nobody mentions is that a lot of the oil is being exported which reduces the trade deficit. A lower trade deficit increases GDP, which means the Biden Adm not only releases the SPR to lower gas prices but also to increase GDP.

[@tycer9754]

Politicians love to work really hard… when it comes to covering their @$$es

[@Michael-qy1jz]

It's all Enron / Arthur Andersen accounting fraud and manipulation for decades. Lol. We need a mass deflationary depression to clean out this Crime wave fraud system.

[@randyrandall2148]

I think they are both right. It's all just timeframe. I think Alex is right over the next 1-3 years. Big deflation is coming for the reasons he gives. But after that, the worldwide response will be so inflationary, it will lead to a crack up boom.

[@justinbrian9]

It's time

[@commycomentor9695]

Best most sane guest y'all have had!

[@Nate-wj4cm]

This host is wrong and is extremely confident he's right. The recipe for losing money.

[@jamesmontgomery8249]

Gurevich always has a fresh take

[@jamesgoodman3645]

I hear a lot of opinion, but not a lot of explanation of why. From my experience of the 1970s, when you do things like price controls or subsidies on a finite supply, you end up with gas lines and rationing and trust me, those suck. On depression, I unfortunately can see it too due to the extreme global debt. Also, unfortunately, it could end up being one that lasts 20 years.

[@superhearingcloud2191]

he is bullish on europe heading into a depression, and energy demand will crash but he is bullish on europe because of investment by governments printing money, this guy needs to get his stories straight

[@handler8838]

He is "bullish" on European banks already in a softer stance when something blows up, where the Fed as the most hawkish bank will be the one in a harder position to pivot, thus being less quick to help its own national economy. Is not a complicated theory.

[@thehylander266]

34:28 The world ran out of cheap oil. That’s what matters. Oil that the global economy cannot afford is of little to no use.

[@MrJuanete12]

This guy is a really really smarter version of Harry Dent Jr's call for what is to come... I buy what he's selling...

[@sunburnfm]

Jeff Snider is saying the same thing. Interesting.

[@MrJuanete12]

@@sunburnfm "collateral" was thrown around in this interview a lot...

[@dinosgura]

@@MrJuanete12 that's how central bankers are reasoning, i presume. Very interesting point anyway.

[@TaticalRemedy]

What energy infrastructure? EU has the tightest ESG policies. You cannot power a modern society on wind, solar and batteries. You need baseload. EU this year included GAS as a clean energy. Prior it was considered dirty energy like coal. 15 years ago EU produced more gas then Russia. Now in 2023 they will face a even tighter energy situation then 2022 if nord stream 1 and 2 are out of action. Im not expert but overlooking the energy crisis as a short easy fix stimulative exercise is risky. We need strong baseload not fairy utopia wind and solar. If you want wind and solar you need nuclear power as your baseload and a great deal of it. EU takes 10-15years to get nuclear power plants up and issue free. Somehow china doesn't have these long build times but maybe someone else can explain that. The energy issue is bigger then most can foresee. However maybe EU will get some sense and invest massively in baseload. But i do agree the greatest depression is coming.

[@drewhelwig]

The icebreaker. Love it. Thanks for having alex

[@sivi9741]

As anyone read the first book Of Alex ? Seem very interesting .

[@JesusGanga]

I wish I had someone like alex as a teacher growing up

[@davidmanley5415]

European smelters are ceasing operations as energy costs soar. This impacts the ability of the COMEX and LBMA from accessing physical silver as demand for physical silver is surging. The paper leverage to physical is increasing to historic ratios and increasing risks for the shorts trying to pick up dimes in front of the steamroller!

[@sbain844]

I've seen this problem before - highly intelligent experts who have no judgement. They use their minds to create brilliant ways to support a false paradigm. They don't do it deliberately, they have a world view that they can't escape, and they find all sorts of clever ways to support that view. Another example is the herd mentality problem, when the herd is wrong you'll find that that the most brilliant minds within the herd find very clever arguments to support the wrong conclusion. Intelligence and judgement are quite different, and only the very best thinkers have both. Be careful not to be influenced by clever people who lack judgement. If something seems like BS, chances are it is BS. We are clearly staring into an inflationary abyss, do not be fooled that a deflationary collapse is coming, this will be a classic crack-up boom.

[@dukescolej]

You are wrong Long term, yes, we will inflate massively. Next 3 years? deflation. Watch, it will occur. Longterm yes, big ibflation. Short term the inflation will completely disappear and go negative before it comes back.

[@sbain844]

@Penderyn That seems highly unlikely to me, but there may well be some disinflation i.e., a slowing of price increases before rising inflation returns with a vengeance.

[@dukescolej]

@@sbain844 i think it will be outright rapid deflation. I think that is why the bond market is so inverted. Why it will deflate rapidly is because of liquidity crises, that's what's gonna drive the prices down so fast. It won't really be prices coming down, it will just be the dollar going up. So affordability will get worse even as prices go down, because the dollar shortage will accelerate.

[@dukescolej]

@@sbain844 i agree that we will hyperinflate, I think that will happen. But first the dollar shortage will accelerate and cause rapid deflation

[@sbain844]

@@dukescolej I agree that there will be a liquidity crisis, but I expect that the Fed will buckle at that point and print money to prevent a banking collapse. That, of course, will only delay the inevitable and make the eventual collapse all the more painful, but I'll be amazed if they resist the pressure to print. If I'm wrong on that, then you'll be right and deflation will come. Time will tell.

[@fkidenya]

Best ever. got me thinking. Love Alex. 😀

[@scottnovitsky9253]

sounds very much like the 40's, inflation followed by deflation followed by higher inflation

[@scurtumarian8725]

On the uk incresing the debt. The guest forgot to mention that taking more debt and having the central bank not accomodate that with lower interest rates makes it harder to service existing debt.

[@AK-by4gp]

I don't understand one thing. How does issuing debt reduce impact of inflationary pressure of fiscal policy? In the short term it's just more money coming in than going out. Over time it might have a balancjng effect yes but I just see more inflationary pressure in the short term

[@evankelly4346]

Yea to me that money buying the bond is coming from savers who likely werent going to "spend" it anyways but maybe invest it so it wouldnt have an effect on lowering inflation

[@samsdragonportfolio1309]

First y’all.

[@simonkolar5478]

As a European citizen I am ashamed of how poorly informed our people are. If our policy makers think the same as this guy, we are indeed doomed.

[@mikehawk4856]

The USA has $31 trillion of sovereign debt. Deflation is not an option.

[@sivi9741]

Don’t forget the hundred + trillions in unfunded liabilities for the baby-boomers. The emperor has no cloths .

[@mikehawk4856]

@@sivi9741 the USA is in a embarrassing decaying empire in terminal decline. We lost all relevance in the early 2000s

[@LightYagami_99]

Yeah it’s closer to $200 trillion including entitlement spending

[@advocate1563]

I'd got to inflationary bust leading to depression. I hadn't got to deflationary depression. Time to think HARD. Implications for portfolio significant as mine currently constructed.

[@joycekoch5746]

Charts not readable.

[@LeroyPeterson]

You'll have to download the chart book

[@michaels4255]

Erik: "what am I missing" - what you are missing is that higher energy prices are strongly recessionary, and that counters overall inflation. And if actual total energy supply begins to decline, it will force the economy to contract, because energy is the ability to "do work" (ie, to produce goods and services). This process is not inflationary.

[@daliborbobr6331]

what you describe is called stagflation. An energy driven inflation will drag the economic growth down. You can have inflation even in a recession, you could see it in the 1970s

[@michaels4255]

@@daliborbobr6331 The so called "great inflation" of 1969 to 1982 was was almost certainly driven primarily by high levels of bank lending, especially dollar denominated loans issued overseas where the Fed cannot measure them. It is unlikely that bank lending is unusually high today either domestically or internationally. Looking back to the 1970s for guidance is like generals who are always prepared to fight the last war and thus unprepared for the next one. Also, stagflation is inflation combined with STAGnant economic growth, not typically with recession. Although there was one recession in particular that surprised economists by its weak effect on inflation, it did not survive the recession of 81/82. It is also rare: so rare it had not been observed before (OR since) the 1970s and thus there was not even a word for it until then. It took economists by surprise. The splurge of mostly US spending in 2021 fueled by "stimmy" checks just as cabin fever victims were coming out of "lockdowns" and which overstressed global supply chains that were already strained before the pandemic was a one time event, and the crash in demand that will be created by a severe, synchronized global recession will allow the supply chains to recover. Oil production capacity will still be tight, but limitations on energy are also limitations on growth, and thus income, and thus demand. Oil prices certainly affect the prices of other products too, but other than fuel itself, the effect is not strong. For example the huge spike in oil prices before the "Great Recession" which were higher than today in nominal dollars and much higher in inflation adjusted dollars did not produce overall inflation nearly as high as we are seeing today. But the conditions that prevailed in the 1970s are generally not the conditions that prevail today. Even energy is not a good parallel. There was still plenty of energy to fuel growth in the 1970s, we just had to pay more for it (and despite a BRIEF episode of stagflation, and four recessions between 1969 and 1982), the 70s overall were not a low growth decade, unlike the post 2008 period. In contrast, the current bout of inflation began with an economic growth surge in the US which was the highest in how long? 20 years maybe? That growth in demand was hard for suppliers to meet, which caused inflation, but it was driven by a one time surge in money redistribution, not by money creation. It is unsustainable under current conditions.

[@joannemeeks745]

Yes, a decline in demand. The largely retired Baby Boomers are not going to be spending or investing the way they have been. Gen X, and the Gen Z working age adults, are small in number.

[@JimMalmPHOTO]

Alex is too important a guest not to have superb audio ( given his accent ).

[@swissclimber1]

Tell him to not speak through a speaker phone

[@patrickm9953]

@@swissclimber1 Agreed, the Audio is so bad, I just couldn't listen to the Interview. Last couple of Interviews have been hard to listen to

[@ethanwessel3911]

24:35 "Price action tells me only about price action, I don't think that bonds went down because that's inflationary". If he doesn't derive his conclusions from the market, then where does he obtain his data from? Market price action is the data!

[@sivi9741]

The market can be wrong by pricing badly the assets for a period of time . That is where volatility comes from isn’t it ?

[@ethanwessel3911]

@@sivi9741 Bad pricing is in itself an indicator.

[@KamilMauel]

The last real deflationary depression was 9 decades ago. Is it possible to have at least half of that nowadays?

[@Nate-wj4cm]

Almost every recession and depression in history has been deflationary. 70s had stagflation, but inflation still fell rapidly due to the recessions.

[@fkrr5]

I was reading that every 90 years we have a depression. Good time to have a big cash position

[@KamilMauel]

@@Nate-wj4cm There was no negative y/y CPI print in the US within 1956-2008, no

[@Nate-wj4cm]

@@KamilMauel fair enough. Ever recession/depression has been at least disinflationary. No I don't think we'll see deflation like in the great depression ever again. Modern fiscal and monetary policy wouldn't allow it, but never say never. The government has a habit of being completely incompetent

[@sardar_gurjot]

@@KamilMauel what money just disappears

[@roberthoag9090]

What would happen if the world suffered a loss of North Sea and US gulf energy supply and infrastructure? That’s a scenario that’s never discussed but a crude price increase to $250 per barrel seems apparent in some 3 year cycle charts.

[@beamerM5]

Alex is very smart, but he does put the FED at the center of everything. And this is where it feels things can go wrong, the FED is just reacting to market forces.

[@AmitKumar-tg7of]

In strong agreement with Alex. Europe will have to take proactive action on energy infra. Dependence on russia wasnt going to take a long way anyways - so good riddance on that. Only difference is on timing - EU has a cold winter coming and I will probably look at it 6-12m down the line rather than today...

[@roberthoag9090]

If it’s above the moving average be long and below be short. Depends on the time frame one uses. In the end it’s all cycles.

[@wccgroundsman]

above or below a moving average???? Really? Best of luck

[@michaelhueppeler7005]

Jon Najarian expressed Alex’s view with a trade on 10.7.22. A large institutional player has placed a monster bet of a 20% decline in European equities. 47,000 Jan 38 puts on VGK at ~$46.75 were bought. The notional value of that trade is ~$216 million. At $38, it would be the equivalent of a 20% decline of European equities.

[@michaels4255]

Thursday, a well known but unnamed "whale" placed a huge options bet on a sudden recovery in the US stock market. I think he will regret it.

[@michaelhueppeler7005]

@@michaels4255 It could be a long US short Europe trade as massive energy shortages destroy European manufacturing going into the winter benefitting the U.S. due to lower energy costs.

[@michaelhueppeler7005]

@@michaels4255 Did you catch the call date? Often times these huge options trades are a stock replacement strategy dumping the underlying stock. October options expiration looks extremely vulnerable.

[@KaceSunShine]

I appreciate Gurevich perspective, but I can't help but feel we'll get inflation for energy and commodities and others will deflate (growth stocks, services)

[@superhearingcloud2191]

If this is how Europe is thinking they are in worse trouble than I thought...

[@ableasdale2000]

Listening to Europeans on anything is more and more fantastical. Total denial of reality.

[@AmitKumar-tg7of]

Erik we think you are a bit more than eccentric ! Peace 🤣

[@5kribbles]

Why does Erik harp on about how draining the SPR is so wreckless. They sold off to blunt a blow-off top in price, and now with a deep recession around the corner they will be able to refill at a reduced price. So they decrease volitility and make money doing it! What is the fear, that the oil will be required in the event of WW3? That's absurd, the oil is produced in North America. Erik is just salty the price dropped and he lost money speculating. And I love it.

[@michaels4255]

North America is not self sufficient in oil and has not been since before the 1970s. At our peak a few years ago, we were producing 13 million barrels a day and consuming 20 million. Do that math, that's an 8 million barrel a day shortfall.

[@5kribbles]

@@michaels4255 sketch for me the paranoid fever dream scenario where the SPR is strategically useful. Aside from using it in an attemt to normalize historically volitile markets.

[@jacknaneek1681]

Who's buying the bonds, Alex? The BoE and the FED. Secular inflation requires endless printing and endless demand growth. Where's that? Populations are flattening and declining.

[@Wetorp]

Eric stop screaming damn it!

[@patricktheut6120]

we are heading for fourth quarter 2019 S&P

[@xopcapital9986]

Alex is probably worth a few quid, but cannot seem to afford a decent microphone 🙄

[@SP-cx2qi]

Will the politicians allow a depression under their watch??

[@patrickm9953]

Last couple of Interview had rather poor Audio Quality. Can you ask people to not do these Interview on a Speaker Phone.

[@mustavogaia2655]

Maxico and Brazil might not be a good bellweather to currency crisis - they are not energy importers. The place to look is India - without discounted Russian Oil, they would have blew up already.

[@rof8200]

The fallacy is in assuming that commodity producing nations will want to continue to sell resources in exchange for fiat. Those days seem to be over.

[@handler8838]

Those nations will provide their resources in exchange for fiat or in exchange for american or european bombs. But they WILL provide.

[@rof8200]

Don't think so. They have bombs too. And now they can't afford to accept fiat. They have to trade for real commodities to survive.

[@AmazianLinsation82]

@@handler8838 lol those B-2s are not just for a show

[@dcal7406]

EI , EI oh!

[@michaels4255]

"there's a lot of evidence that inflation is going to be around for a while" - No, impatience is not evidence. There is no ongoing monetary expansion to fuel sustained inflation. There are supply problems, but the recession will reduce demand below the level of supply.

[@RafaelTruthseeker]

No sight of emerging market crisis? ... Is Alex blind? Or is he living one of those SanFran street tents and isolating from what's going on in the world? Jeez, these rich american fund managers have gotten really distant to what's going on in the day to day economy and with the common people.

[@commycomentor9695]

Eh...lost me at 2k s&p

[@JimMalmPHOTO]

A lot of people are gonna be lost when we get there

[@goldreserve]

@@JimMalmPHOTO Jerome Powell and Nancy Pelosi will be down 50%.

[@Far_real]

Just bought $100k in way OTM call options for TLT expiring Jan 2025 @ $160 strike because of this interview lol God Speed 🫡

[@Nate-wj4cm]

Should wait until fed pauses. Don't go all in beforehand at least.