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Andrew Hoese: The End of Cheap Energy Means More Systemic Inflation

Tom welcomes back Andrew Hoese from Finding Value Finance to the show. Andy runs an educational channel where he digs deep into economic data and conducts chart analysis.

Andy Hoese discussed the real estate cycle and its effect on other markets. He explained that the cycle is driven by demographics and consists of four stages: recession, recovery, expansion, and hyper supply. Currently, he believes that we are in the recovery stage, but if interest rates are not lowered, then we are in the hyper supply stage.

He believes that the Federal Reserve is stuck in a tricky situation, as they must manage inflation and the baby boomer retirement, while also considering the base effect of inflation. He suggests that current inflation is being driven by credit expansion and the demographic that is coming into their peak spending years. This leads to a commodity super cycle and an imbalance between credit creation and things being created in the economy.

The Fed will have to hold interest rates higher in order to prevent a large inflationary problem, but that they will eventually relax and hold rates steady. He suggested that investors look for fractals and fundamentals when evaluating potential investments and pointed out the importance of using ratios to analyze investments.

He believes that platinum is particularly attractive right now because it is inexpensive compared to other metals, and energy service companies could benefit from an upswing in the market. Ultimately, the speaker believes that if a solution to cheap energy production is found, it could shift the current market conditions.

Time Stamp References:
0:00 – Introduction
0:32 – Real Estate Cycles
8:14 – Wages & Inflation
11:43 – The Fed Pause?
20:38 – PPI/CPI Ratio Chart
23:44 – M2/GDP Ratio Chart
25:22 – Ratios & Market Flows
29:13 – Rates & Inflation
30:00 – China & Global Demand
33:40 – Q.E. & Malinvestment
40:49 – Gaining The System
44:48 – Best Looking Sectors
50:58 – Energy Services & Uranium
54:13 – Energy Ratio Charts
59:50 – Uranium Charts
1:06:10 – Wrap Up

Talking Points From This Episode

  • The real estate cycles and the impact of demographics.
  • The Fed’s tricky position of managing inflation expectations.
  • The outlook for commodities including energy, metals, and mining.

Guest Links

Andy Hoese is a Colorado-based investor and entrepreneur who is passionate about teaching people about the financial markets. He was born in Minnesota and graduated with a degree in manufacturing engineering from California Polytechnic State University in San Luis Obispo, CA.

Andy grew up with an affinity for mountain biking, dirt bikes, and competitive sports such as baseball and hockey. He was always good at math and science, which made his engineering degree the perfect fit. After working in aerospace engineering at his first job, he developed an obsession with investing and financial markets and would spend hours on YouTube researching and learning.

Andy started his own YouTube channel, Finding Value Finance, in August 2020. He is an avid car enthusiast who owns several rotary cars, including an RX-7 FD and an RX-8. He also likes to get out on the track for some racing during the summer and fall, and has been working out regularly since the age of 16.

Andy’s three-pillar approach to investing includes ratios, market conditions, and technical analysis. He looks for alignment between these three factors when evaluating potential investment opportunities.

He is passionate about helping others to progress their own investment journey in a positive way, and hopes to make a lasting impression on everyone who joins his journey.

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