David Haggith: Bond Market Collapse will be Catastrophic
Tom welcomes David Haggith, publisher of “The Great Recession Blog”. He started his website twelve years ago, shortly after the housing bubble. He invented the term the epocalypse, which stands for ‘economic apocalypse’ that will be epic in scope. You could also call it the second great depression. He says, “For the last two years I’ve been extremely accurate.” The corona crisis brought massive amounts of money printing. The Fed can no longer print enough to support the equity markets. We’re going to have plenty of economic breakdowns and damage. It’s hard for people to grasp the rate of change that is occurring.
Money only creates inflation where money moves, and after the lockdowns lifted, we saw inflation take off. Production inflation hit manufacturers hard, and he was proven right that inflation was not transitory. We are going to discover that the recession started in Q1 of this year.
The Fed appears reliant on positive statistics, and they are in denial. The public trusts the Fed, but that trust is likely misplaced. Economists aren’t questioning or challenging the Fed’s outlook.
The Brookings Institute recently reported that the job market is short five million positions. There has been a million excess deaths in the labor pool lately. This is the reason why the labor market is tight. Production isn’t increasing due to the lack of available workers.
We’re now entering the period where everything is falling apart due to the system failing. The shortages are going to manifest by the late spring. Crop failures and fertilizer issues will put further pressure on food prices. He recommends you buy the stuff you regularly use in advance because it won’t get cheaper.
Bonds have declined the most, likely, since the great depression. There is no evidence this trend will stop, and it could be catastrophic. Credit Suisse is providing a serious example.
He says, “The Fed will slam the brakes on after they’ve hit the tree. They can shove it in reverse, but the car will be broken, and they won’t be going anywhere. It will be highly questionable if they can accomplish anything.” The Fed is going to lose much credibility in the coming crisis, and this could eventually lead to hyperinflation.
Lastly, he discusses the problems with gold and why his current preference is to stay in dollars. For now, dollars are relatively safe, but that could change. Investors need to remain nimble because we’re in the everything bubble.
Time Stamp References:
0:00 – Introduction
0:40 – Great Recession Calls
11:36 – A Precarious Position
14:28 – The Feds Rhetoric
18:26 – Labor Shortages
26:10 – Global Concerns?
36:06 – The Bond Bubble Bust
37:06 – Another Lehman Moment?
39:00 – The Fed is Stuck
44:16 – Protecting Wealth
49:37 – Wrap Up
Talking Points From This Episode
- Past predictions and why we’re headed towards the second Great Depression.
- Why the Fed is in denial and will have great difficulty in the coming crisis.
- Inflation predictions and the real reasons for the labor shortage.
David Haggith is the publisher/editor-in-chief of The Great Recession Blog and the Daily Doom Substack. David began the Great Recession Blog back in 2007 when he realized the U.S. housing market was on the verge of collapse. He urged family to sell their homes near the peak of the market. He decided the world needed a voice that would present more insightful commentary on the economic news of the day than what had been available anywhere in the mainstream media. Furthermore, he was amazed that so few people we’re able to see through the nonsense. He doesn’t associate with any political party, as politics keep people focused on blaming the other side and not recognizing the flaws on theirs. He’s made a number of successful market calls and forecasts for past recessions. David believes we are now entering a Second Great Recession and provides advice on how to avoid the consequences.