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Greg Weldon: Debasement, Currencies, Inflation, and Commodities – A Look Ahead

Tom Bodrovics welcomes back Greg Weldon, the publisher of Global Macro Strategy Report and the Gold Guru, for a discussion on the US markets, with a focus on the economy and consumer spending. With over four decades of experience in financial markets and commodity trading, Greg expresses concerns about economic stress despite celebratory employment reports, citing labor market conditions worsening with rising unemployment, underemployment, and declining savings rates. Consumers are also facing increasing credit card and auto loan delinquencies while disposable income decreases and government handouts account for an expanding share.

Greg suggests the economy might already be rolling over, and the Fed would like to see asset prices decrease before declaring victory in inflation, despite the policy rate being higher than current inflation. Commercial real estate is another major concern, with the Fed seeming behind the curve.

Greg shares his perspective that the Fed might be showing a willingness to accept higher general rates of inflation to protect consumers and the economy despite risks of inducing a credit crunch. The discussion touches upon Federal Reserve Chair Jerome Powell’s challenges in maintaining an apolitical stance during the divisive US election year and potential social unrest leading to economic negatives. Greg also mentions commercial real estate debt due in the next 12 months, which could lead to bank failures for regional banks holding 80% of that debt.

Greg discusses the implications of a consumer wake-up call in the stock market or another Plaza Accord-like agreement among major global powers as potential catalysts for the U.S. dollar’s next round of debasement. He also mentions natural events, climate change, and geopolitical conflicts that could impact currencies and commodities, particularly gold. Greg encourages being aggressive defensively by shorting the S&P 500 when the time comes and suggests optimism about future performance for platinum and certain mining shares. He believes mining as a whole will benefit from increased enthusiasm towards gold.

Lastly, Mr. Weldon emphasizes the importance of staying adaptive, not being bound by historical prices or market assumptions, researching a good Commodity Trading Advisor, importance of proper risk management, and understanding futures trading.

Time Stamp References:
0:00 – Introduction
0:38 – Heavy Policies & Elections
4:50 – CPI Understated?
6:29 – Consumer Credit Stress
8:57 – Powell & Asset Prices
10:08 – Fed Watching Gold?
12:54 – Fed Inflation Targets
15:20 – Inflation Metrics?
19:26 – Powell & Elections
21:38 – Bank Failure Risks
25:47 – Dollar Risk & C.B Cuts
32:13 – Defensive Plays
34:15 – Dollar/Gold Correlation
37:27 – Stock Markets & Currencies
39:48 – Gold Market Considerations
45:23 – Platinum Thoughts
47:12 – Mining Sector Vs. Metals
50:00 – Concluding Thoughts
51:20 – Wrap Up

Talking Points From This Episode

  • Why the economy may already be rolling over, with rising unemployment, underemployment, and declining savings rates, despite positive employment reports.
  • The Fed might accept higher inflation to protect consumers and the economy, potentially causing a credit crunch.
  • Natural events, climate change, geopolitical conflicts, and consumer behavior could significantly impact currencies and commodities, particularly gold.

Guest Links:
Money Podcast:

Greg Weldon is a veteran in the global financial markets industry with over 40 years of experience. He started his career as a floor trader on the COMEX and later worked as a broker for Lehman Brothers and Prudential Securities. He then became a proprietary money manager for hedge funds Moore Capital Management and Commodities Corporation. In 1998, he founded Weldon Financial and has been producing independent research ever since. His clients include top hedge funds, banks, government agencies, and individual investors.

WeldonLIVE, his flagship service, provides a comprehensive market research report, including live commentary. The service covers global economic reports, supply-demand fundamentals, monetary trends, and their impact on stock, bond, currency, and commodity markets. Weldon combines a top-down macro approach with technical analysis to offer a broad view of market trends. He provides market recommendations in sectors such as stock indexes, metals, currencies, fixed-income, energy, and commodities.

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