Peter Boockvar: Market Crashes Happen When Tapering Begins
Tom welcomes back Peter Boockvar of the Bleakley Group. Peter discusses the latest CPI prints and the transportation bottlenecks. These logistics issues are likely to persist to the number of trucking and shipping companies that went out of business in recent years.
High prices for houses have forced many to seek rentals driving rents higher. These are long-term structural issues and with low-interest rates, home prices have risen significantly. The ongoing mix of fiscal and monetary largess has caused many of these problems.
Infrastructure spending is pulling workers away from other employers and projects. This spending won’t necessarily do much for the economy. We need to stop spending and reduce some of this liquidity and get control of inflation.
Market corrections tend to occur around the Fed’s taper plans which is when we often see pullbacks. Therefore, we’re unlikely to skate through this taper program either. What the Fed does this time around will be interesting as they will risk tanking the dollar. It will probably be a no-win scenario as markets today are drunk on easy money.
He explains why yield curve control is difficult to reverse once implemented.
The dollar needs to be compared against other currencies as there are many reasons why it may be rising or falling. One reason gold and silver have underperformed this year is due to the Fed’s claim to have inflation under control
He believes cryptocurrencies will be staying and there are commonalities of belief with those that like metals. Both markets are quite small when compared to the world economy. Gold has an extraordinary history while Bitcoin is still very new. Those that say Bitcoin will replace gold have little understanding of its history.
The drive towards green energy and solar will continue and that should put a floor under metals like silver. Should silver rise by several multiples then producers may consider substitutes.
Time Stamp References:
0:00 – Introduction
0:34 – CPI & Transportation
4:54 – Rent & Housing
6:16 – Fed Rates & Bubbles
8:09 – Infrastructure Spending
10:05 – Tapering & Corrections
14:21 – Powell & Doves
16:39 – Yields & Control
19:02 – Dollar Path Forward
20:48 – Gold, Silver & Commodities
22:10 – Bitcoin & Metals
25:43 – Mining Input Costs
26:28 – Silver & Slowdowns
27:13 – Wrap Up
Talking Points From This Episode
- Inflation numbers and supply chain breakdowns.
- Real estate bubble driving demand for rentals.
- Market corrections and why they tend to follow Fed policy.
- Dollar performance and gold’s 5000-year history.
In his role as Chief Investment Officer of the Bleakley Financial Group, Peter Boockvar leads the team that is responsible for the development, management, and oversight of Bleakley’s investment management program, managing the investment committee, and setting the firm’s overall investment philosophy, global investment outlook and asset allocation decisions. Peter also acts as the manager of a global macro multi-asset portfolio strategy for select clients.
Before joining Bleakley, Boockvar was a managing director and the Chief Market Analyst for the Lindsey Group – a macroeconomic and market research firm founded by former Federal Reserve Governor Larry Lindsey. In this role, Boockvar was responsible for global economic & market research at the firm.
Before his time with the Lindsey Group, Peter worked as a macro analyst and portfolio manager for Omega advisors and had previously been a partner at Miller Tabak & Company, where he was an equity strategist and portfolio manager.
Industry leaders frequently seek out Peter’s market insights and, for the last several years, he has been a frequent guest and contributor on CNBC programs. He is also regularly quoted in Forbes, Barron’s, Bloomberg, CNN Money, and several other news outlets. Peter graduated magna cum laude with a BBA in Finance from George Washington University.