>> THANK YOU GRADY, MY UNCLE
GETTING ONE DINNER ROLL,
WRITING THAT DOWN, JOINING
US NOW TOM TOMAS PHILLIPS.
LET ME ASK YOU, IS THIS ONE
AREAING EXAMPLE OF POLICIES
THAT PRESIDENT PUT IN PLACE.
WE’RE SEEING THIS INFLATION.
>> YES, IT IS ROUGH.
ONLY VEGETARIANS GET OFF
THIS THANKSGIVING IF THEY
STICK TO CRANBERRIES.
I THINK IN GENERAL IT IS NOT
YOU KNOW -- A GLOBAL
PHENOMENON THAT WE HAVE THIS
HUGE SPIKES IN THE FOOD
PRICES IN THE WORLD.
ALSO GLOBAL PHENOMENON THAT
GOVERNMENTS ACROSS VERY
DEVELOPED COUNTRIES
REREACTED SAME WAY WITH
MASSIVE FISCAL STIMULUS AND
LOOSE MONETARY POLICY AROUND
COVID, WE’RE SEEING THE
AFTERMATH.
>> COULD THIS MEAN, WE’RE
SEEING MORE SPENDING FOR
THANKSGIVING, WILL OTHER
AREAS SUFFER BECAUSE PEOPLE
WILL MAKE THE CHOICE,
SPENDING MORE FOR
THANKSGIVING DINNER THEN
CHOOSING TO BUY LESS
SOMEWHERE ELSE TO AVOIDER
THANKSGIVING DINNER.
>> WE HAVE SEEN ACTUALLY
ECONOMISTS HAVE BEEN
SURPRISED SEVERAL TIMES ON
HOW RESILIENT THE CONSUMER
IS.
ONE INTERPRETATION WE HAVE A
HUGE BOONE FOR CONSUMERS
WITH COVID, ALL OF THE
MEASURES WE HAVE OF
CONSUMERS, RETAIL SPENDING
ANY RETAIL SENTIMENT, THAT
COME IN ABOVE WHAT WE
EXPECTED.
THE REASON WE HAVE THAT WE
SAW ENORMOUS INCOME GROWTH, TOTAL INCOME FROM GOVERNMENT
TOTAL INCOME FROM GOVERNMENT
PROPRIVATEAND PRIVATE
SECTOR.
THE INCOME GROWTH OF
CONSUMERS WERE MORE THAN IN
ANY BOOM IN PAST YEARS, THAT
IS THE REMARKABLE PART.
WE HAD A RECESSION BUT WE00
COMEINCOME GROWTH, PEOPLE
ARE STILL HAVING THAT MONEY,
WITH LOW SAVINGS, WE SEE THE
END OF THAT RUNWAY NOW,
LEADING INDICATORS COMING IN
INDICATE A RECESSION IS
NEAR.
>> YOU SAID, BLUFFED WE ARE
IN A -- BELIEVE THAT WE’RE
IN A RECESSION OR WERE FIRST
TWO QUARTER OF THIS YEAR,
DOES THAT CONTINUE OR DROP
OFF THEN COME BACK?
>> I ALWAYS SAY THAT PEOPLE
YOUR LISTENERS DON’T CARE
WHAT ECONOMISTS CALL A
RECESSION OR NOT.
THERE IS A CONVOLUTED
PROCESS, THEY CARE ABOUT
THEIR PAYCHECKS DON’T REACH
AS FAR AS THEY DID TWO YEARS
AGO.
REAL INCOMES CAN DECLINED
THE LAST TWO YEARS.
PEOPLE CAN’T BUY AS MUCH FOR
THEIR PAYCHECKS THAT IS WHAT
PEOPLE CARE ABOUT.
WHAT YOU CALL IT, IF THAT IS
A RECESSION OR NOT IS
IRRELEVANT I THINK.
>> WE SAW INFLATION COME
TOWNDOWN 7.7 PER
YEAR-OVER-YEAR, AND MONTH
OVERALLOVER MONTH THE SAME.
HAS THIS PEAKED?
>> ONE THING IF YOU BELIEVE
THAT THE MONEY SUPPLY IS
IMPORTANT FOR INFLATION SOME
PEOPLE ARE SKEPTICAL OF
THAT.
WHEN WE HAD THE FINANCIAL
CRISIS WE HAVE MASSIVE
GROWTH WITH LITTLE
INFLATION.
IF YOU LOOK AT THAT, IT IS
HOPEFUL, WE HAVE AN
EXPLOSION IN MONEY SUPPLY
DURING 20 AND 21 DURING
COVER COVE.
THATCOVID.
THAT HAS COME DOWN, THAT SAY
HOPEFUL SIGN THIS WILL EASE
OFF.
MONEY IS LIKE ANYTHING ELSE,
IF YOU HAVE A LOT OF SUPPLY
IT LOWERS ITS VALUE.
>> SPEAKING OF THAT WE HAVE
BILLIONS OF DOLLARS TO GO
OUT THE DOOR FOR AMERICAN
RESCUE PLAN, BIPARTISAN
INFRASTRUCTURE BILL, HOW
MUCH IS THAT SPENDING THAT
IS YET TO COME WORKING
AGAINST WHAT THE FED IS
TRYING TO DO TO GET
INFLATION DOWN?
>> THEY HAVE BEEN PUSHING IN
DIFFERENT DIRECT, FISCAL
POLICY HAS GONE AGAINST WHAT
FED POLICY HAS BEEN THE LAST
HALF YEAR.
IT IS PUSHING AGAINST THAT.
THIS IS A FISCAL ISSUE.
THE FED MONETIZED THAT DEBT
WHICH WAS LAID ON OUR
YOUNGER GENERATIONS DURING
COVID.
I THINK THAT WILL CONTINUE,
I THINK THAT HOUSE WILL GO
REPUBLICAN NOW IN JANUARY.
I THINK IT WILL PUT A BRAKE.
AND BE DEFLATIONARY PRESSURE
ON THE ECONOMY WHEN THE
HOUSE COMES IN.
>> IN FED MINUTES THEY
TALKED ABOUT A BIG
DISCUSSION ABOUT THE LAG
AFFECT.
THEY WANT TO KEEP EXPECTING
PARTICULAR ANCHORS, HE MAY
SEE A RATE INCREASE IN NEXT
ONE, BUT BECAUSE THEY ARE
TACKING ABOUT A LAG EFFECT
DO YOU FEEL THAT RATE HIKE
MAY NOT BE AS BIG.
>> THE MARKETS THAT TRADE IN
INTEREST RATE FUTURES DONE
MOVE MUCH TODAY -- DIDN’T
MOVE MUCH TODAY, WE SAW THE
MINUTES OF THE FED COME OUT,
AND MARKETS OF INTEREST RATE
FUTURES DID NOT MOVE.
THEY ARE THINKING ABOUT 75%
CHANCE OF A HALF A
PERCENTAGE POINT.
THAT DID NOT MOVE MUCH.
ALSO A VERY STARK INDICATION
TODAY THAT ALL EYES OF ON
THE FED, BUREAUCRATS RULE
THE MARKETS YOU SEE THAT A
LOT OF LAST FEW MONTHS WITH
A LOT OF PERVERSE PRICE
CHANGES WHEN GOOD NEWS COMES
IN MANY TIMES MARKETS GO
DOWN WHEN BAD NEWS COMES IN,
MANY TIMES MARKETS GO UP,
THAT IS NOT HOW CAPITAL
MARKETS SHOULD BE WORKING,
THE REASON IS PEOPLE THINK
THAT FED WILL DO OFFSETTING
THINGS IN THEIR PRICE
CONTROLS AND CREDIT MARKETS.
>> VERY INTERESTING TOMAS