David Brady: Could We See a Precious Metal Buying Mania?
Tom welcomes back David Brady, CEO, and Co-Founder of Global Pro Traders. David discusses Fed Chair Powell’s recent statements, but argues that financial conditions have not tightened that much. Powell has said some real doozies recently, like the economy is strong, and the labor market is doing well. David says, “give me a break, the metrics around labor markets are startling wrong.” Bernanke has stated in the past, “When the data is bad, you have to lie” because it’s about maintaining confidence. The economy is not doing well, and neither is the labor market. The Fed statements are just justification for their policies.
We’re starting to see delinquencies and foreclosures that are likely to get considerably worse by next year. Housing and properties in parts of Canada have dropped forty percent.
The CPI metrics for the Fed is part of their narrative construction. They are going to “redefine” the CPI lower because it reduces the cost of government entitlements. Year over year, inflation will come down, and they are going to recalculate it even lower. If we get lower inflation, the Fed will have justification to pause.
He believes the DXY will head lower when this pop completes, once again near the recent highs. This will be the time to be buying gold and silver while many are throwing in the towel. The only way that doesn’t play out is if we break below 1750 support. There is no scenario where gold and silver don’t go up in the next few years.
He is concerned there could be nationalization or excess taxation of miners. If you’re able to get out, will you be able to find someplace safe to put your money?
The markets are essentially rigged and managed by central banks. All the markets needed recently to go in the other direction was a catalyst. The Euro drop was the catalyst and caused the DXY to move higher, these are nearly perfectly correlated.
Time Stamp References:
0:00 – Introduction
0:36 – Financial Conditions
2:28 – Labor Contradictions
6:44 – Hikes & Latent Damage
10:15 – Redefining the CPI
14:43 – DXY & Gold Outlook
18:48 – Final Fed Endgame
23:27 – Mine Nationalization
25:35 – The Metals Reversal?
32:50 – Leading Indications
35:14 – Fed Still Matters
38:50 – Dedollarization
42:44 – The Fed Trifecta
48:06 – Entitlements
53:23 – Wifey Wrap Up
Talking Points From This Episode
- Fed policy is all about maintaining a narrative while manipulating statistics to support it.
- Outlook for the dollar and why he is so optimistic on precious metals.
- The move away from the dollar and why Fed policy still matters.
David Brady has managed money for banks and businesses for 25 years. Mr. Brady is a CFA charter holder and holds a bachelor’s degree in Business Studies and Financial Markets from Dublin City University. He started as a foreign currency trader in USD/DEM and managed multi-billion dollar bond and foreign exchange portfolios for multinationals such as eBay and Salesforce.
He has always been interested in financial markets, winning investment competitions at the age of 15. Scoring the highest grade for his graduate thesis, “Is the ERM (Exchange Rate Mechanism) Fatally Flawed,” in 1993, and won foreign currency spot, forward, and bond trading competitions at 23. Suffice to say that financial markets have been his passion for much of his life.
David is a native of Dublin, Ireland. He moved to the United States in 1998 and now lives in Ontario, Canada, since 2015, with his wife and four kids.