David Haggith, head of The Daily Doom, returns to the show, noting the financial system may be teetering on the edge of the precipice.
- US debt was downgraded by Moody's ratings agency.
- David outlines an atypical development in US housing inventory and related issues.
- The recent Treasury auction - a surprising outcome.
- Will US equities record record highs in 2024?
- Will the bond bust continue and when will US stocks find a bottom?
- Is the bear stalking shares and could a lower low in US shares be in the cards?
- David notes the markets are halfway through a bear market.
I think we saw the pause and I think we're at a point where Jamie Dimon said it really doesn't matter what the Fed does anymore. And I'm of that persuasion that the bond market/vigilantes have come out there, bond investors are taking bond prices up because they're seeing the risk in the world, they're seeing inflation.
Inflation by the way isn't coming down anymore. It's gone up each of the last 3 months...we're going to see significant jump in inflation in the next month's report. We just hit an interest cost that we're 1 trillion dollars a year - that's the US gov't cost of just servicing its debt now.
- Gold will survive best, notes our guest. Haggith says:
I would say that just like housing market is in the ice dam that has to break...it's going to be as the bonds keep going down and keeps sucking things down and you finally get to the point where the bulls in the stock market just say, "OK this isn't happening, there's not going to be a Fed pivot." And they give way and the housing market has held out as long as it can and the ice dam breaks up and all the stuff starts to flush away, that's bound to be good for gold.
Gold is going to have its day in the sun to gleam. But it's hard to say exactly how long that's going to take. I give it 3 years for this whole breakdown to happen as a median number. It could easily take 5 years to get to the bottom of this.
But I've placed it at 3 [years]. We've got a year and a half to go; we're only halfway through. We've got more time for stocks to keep going down and I'm confident that they will. And at some point along that, I think gold is what's going to survive the best because the rest isn't surviving.