YouSaid · the spoken record

Mel Mattison

lines on the record: 105
first: 2024-05-20
most recent: 2024-05-20
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“When I think you're going to get an international call to say, hey, we need to rethink this monetary system. We need to figure out a different way of doing things than funding the whole world's economy on essentially U.S. debt.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“And asset bubble prices that's going to lead to SP 7000 in the next 24 months and home prices to go up again. And all of these things are going to happen. And then at a certain point, like I said, there's going to be a critical mass of investors who say, I want to take my gains and go home. And once people start heading for the door, why did the tulip bubble collapse when it did? You know, it could have conceivably gone up another hundred percent, but it didn't. At a certain point, investors said, okay, enough is enough. And they're going to start heading for the door. And that's when tax receipts are going to go down because the stock market and capital gains are a major driver of revenues for the government. And when the government all of a sudden is losing tax receipts because the stock market's going down, they're going to have to issue even more debt. And then this yield curve control is going to start to become untenable. And that's.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“And we never did pay the Piper because basically if we would have continued down that path, we would have had instead of 7% deficits, we would have had a 10% deficit in fiscal year 2023. And so the government is just, it's like an addict. It has to inject more and more and more spending and liquidity and bonds. And it's going to keep doing that to stall off a recession as long as it can. The side effect of that is going to be inflation of financial assets, housing, gold, stocks, and then people start moving into there. And then this is essentially kind of, I'm describing the anatomy of a bubble is that the government is instead of letting interest rates go to 9%, they're going to control that. And that's going to be the fire, the fuel to the fire of liquidity.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Because they cannot allow there to be another significant recession because the deficit spending is not what it was in 2008, 2009. And so in 2022, when the stock market went down, we didn't have a recession, but tax receipts were just killed. And so you're going to make this matter even worse if you have a recession. And so basically we're almost entering into a time where the monetary and fiscal authorities cannot allow for a recession. The political impulse will be to deficit spend our way away from the recession. And I think that's what happened last year. I think a lot of people were expecting a recession. The Federal Reserve raised rates and they said, okay, we should have a recession and, you know, kind of pay the piper for all of this COVID spending.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“A bond yield at 5% is an obvious steal, so you buy it and then it goes to 3%, and then low bond yields cause the economy to recover. Up, down, up, down, the cycle. Why can't that continue? I mean, what is wrong with that logic? Why are you taking it to the Federal Reserve has to enact your control?”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“In your script, you know, to take to take Andy Constance think that the script in your personal script, the immense amount of US government borrowing is going to cause bond yields to rise. That's where I'm with you. Step one, step two, you say the economy won't be able to handle it, i.e., you know, oh, mortgage rate is 9%. We're going to have a recession. So rates are lower and there's yield curve control to Federal obviously on the short end. The Federal Reserve has complete control on the long end. It's going to enact some sort of yield curve control, which it did in the 1940s. That is where I'm having trouble with it because isn't there a not a virtuous cycle, but a cycle and an equilibrium where, okay, a too hot economy with too hot inflation caused bond yields to rise, bond yields rising causes the economy to slow down, it might even cause a recession, and then in a recession, bond yields should go down because if inflation is at 1%.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“There's not going to be the stomach for it. And so that's why you're going to get places like the Federal Reserve involved. And then what that's going to do is it's going to cause stock market investors to see liquidity. And they're going to jack up the markets. But eventually that has to come to an end because trees don't grow to the sky. So once the stock market gets to 30 or 35 times forward earnings, there's going to be some investors that, you know, it's a tipping point. And they say, you know what, I'm taking my money out. And once people start running for the doors, that's how you're going to get the collapse, which is, by the way, the traditional modus operandi of bubbles throughout history, whether it's tulips or anything, is that people think you can't lose and then everybody gets in. And then when everybody's in, all of a sudden some people start saying, hey, I'm cashing out.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Rapidly. And then in 2030 or thereabouts, the Social Security Trust Fund is essentially going to go empty. And at that point in time, there will still be money coming in, right? Because you have all the workers are paying 6%. So it's not like when the trust fund goes empty, the government has to.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Thing I would point to is while Japan has been able to hold 100% of GDP JGBs, Japanese government bonds, look at what happened in the stock market during that period, nothing. So basically what I'm saying is that I don't think that the government is going to run out of money. But what's going to happen is that, again, this comes back to the Social Security. So we talked about in 2020, 2021, the Social Security Trust Fund had been running a surplus. And what that enabled the Treasury Department to do is to take that surplus and then sell to the Social Security Trust Fund, the Special Treasury bonds that only the Social Security Trust Fund gets to buy, and it funds the government. That extra source of funding was taken away and it's now declining.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“What I believe is that you're absolutely right. The propensity for the U.S. to continue to print money, I think, is a lot greater than a lot of doomsayers have talked about. So there were people after 2008 saying, oh my God, the Fed balance sheet's going to go to $4 trillion. What's going to happen? And we took it to $9 trillion during COVID. And if you look at the Bank of Japan, which holds 100% of GDP on its balance sheet, if you were to do that in the United States, that would be $30 trillion. And we're only at around $8 trillion. So there's a whole lot of room on the United States balance sheet or on the Federal Reserve balance sheet to hold U.S. Treasuries if you were to say, well, look, they were able to do it in Japan and they didn't have an inflation issue. The demographics in Japan are very different than the demographics and the growth in the United States.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“More bonds. And some people would issue compared this to a Ponzi scheme. But I think, yeah, the US government has special privileges that no other private sector actor has. And above all other governments, it has an even higher privilege because everyone wants dollars and, you know, no one wants the Argentine peso. Sorry. Why can't this continue? That's kind of my fundamental question.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“You said something about the UK about mortgage. The UK will have to cut rates because Unlike in the US, in most of the rest of the world, mortgages are effectively floating rate or fixed rate but short duration. So there's no, oh, I got 3% mortgage at 30 years. And even though mortgage rates went 7%, I'm fine. And my kids could get my house and they'll still be fine in 2050. That doesn't really exist in the rest of the world. So UK mortgage holders, they're impacted already by rising mortgage rates. That is going to crimp mortgage credit because they won't be able to afford it. I get that because the private sector, not just individuals, but corporates, can't print their own money. Isn't that fundamentally different though than the government not being able to afford higher rates? Because the US government can always print its own money and the demand for dollars is so high. Basically, interest expense has gone up because interest rates have gone up because of the Federal Reserve has raised interest rates. The U.S. can afford it because you can always just issue.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Issue at all for banks because they're just going to be making so much money on higher yields. You know, if you lose money on a mortgage or on a loan because of credit because you're not getting paid back, there is no opposite effect to balance that out. It's just a loss and it could actually have a negative consequence, negative knock-on effects. Whereas if you lose money on a bond because interest rates went up, you're going to be making more money on loans eventually. It's just going to take some time. And some banks couldn't make enough money. But I think I have definitely covered the risk to the banking system of higher rates in terms of losses as well as rising deposit costs. And I think in my not so informed judgment, but I do think that it's looking a lot better, you know.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Think everything you said is true, but I think you connect things that are not related. So, like, yeah, as you said, the issue with the banks in the 1930s was they were insolvent because of credit losses. They had loaned money to someone to a mortgage. The house collapsed. They couldn't make the payment. They loaned it to stock speculators. The stock market crashed. That was the source of the losses. It was not that they had marked market losses on their government bonds because interest rates shot up. Interest rates actually declined. So the issue with the banks now definitely of last year was huge mark-to-mark it lost, this which some banks thought they could just paper over and say, oh, this isn't held a maturity category. Silicon Valley Bank, First Republic Bank, you know, on this program, as you may know, we covered that extensively. And that definitely was an issue last year. I think in the scenario that you describe where the economy not only doesn't go into a recession, but it reaccelerates, I actually think that that is not going to be.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Interest rates and all this money flooded out of Germany, out of Europe. And this was part of that spiral that began and culminated in the great crash in October of 29. So there was a lot of transatlantic type stuff that we're seeing now where you have a situation, for example, in the UK where a lot of homeowners are going to have mortgage resets coming. And the UK simply cannot keep interest rates where they are. They're going to have to cut. Same thing in the ECB is going to have to cut. And I think that's why when Powell came out in his last speech and he sounded rather dovish and people are saying, well, why is he dovish? Why? Because I think he understands that he cannot raise rates. And in fact, he's going to most likely need to cut rates multiple times this year, regardless of whether. Inflation is bumpy or not”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“The way that the banks had their losses back then was that they had been loaning out a lot of what they called brokerage cash, which was to fund the nine to one leverage in the stock market. And so at the peak in October, the margin rates were 20 plus percent. And so banks were literally, and this actually led to an initial collapse in Germany. Germany had wanted capital after World War I and they had been paying higher than average interest rates on deposits. So they'd been paying like five, six percent interest rates on deposits. And so a lot of capital had gone into Germany. But in the heat of the stock market bubble, what happened was people realized that they could loan brokerage cash so that people could lever up and charge 20%.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Holiday, and he went on his fireside chat and he told people don't, you know, take your money out of the banks. We're going to be okay. We've got a plan. And they were able to kind of keep things moving until World War II. But really, the night whole...”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Would basically go under. We haven't seen a runs on the bank because, you know, there was basically a defecto guarantee implied after SVB. And these were the exact type of situations that FDR was wrestling with in 1932, or excuse me 1933. He was elected in 1932. He took office in March of 33, where he sat down with his advisors and he talked about what are we going to do. One of the things they talked about was just a straight up haircut on government debt. He talked about basically calling all U.S. Treasuries. And he was willing to basically print dollars to buy all the U.S. Treasuries back. And this was going to cause inflation. His advisors talked him out of it and they did a bank.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“It's very light. It's very light. But on the margins, it is impacting things. And I think it's keeping things within this range because there is this other thing that we haven't talked about, which is the stress in the banking system of these higher rates because the Treasury and the Fed essentially told banks, you know, after 2008 buy Treasury bonds and Treasury bonds had almost no yield. So they started buying they started buying 10 20 year paper and that was essentially assets held against short-term liabilities. And so we have the regional banking system right now underwater. I mean, in a real sense, many of the banks in this country are insolvent. And by insolvent, I mean that if all of their liability holders, all the depositors said we want our money, then they would.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“You're absolutely right that the U.S. Treasury and Treasury Secretary Janet Yellen issued more short-term treasuries, i.e. bills than coupons, relative to expectations. And I bet that probably did have a positive impact on liquidity, a positive impact on the stock market, and a positive impact on long-term bond yields, i.e. maybe there are a few basis points lower. I would disagree that that is yield curve control. I mean, yield curve control is when the central bank, which can infinitely print money, says 2%, that is the top level. And anytime it goes to 2.01%, you know, you're going to lose money investors because we're going to buy it and we have an infinite printing press relative to that ginormous money printing machine and a guarantee, which no other financial player, not JP Morgan, no one, Warren Buffett, could ever match. I think having coupons go from, it was expensive.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“The mortgage back market, which is right now around 7% because that actually has a government guarantee to it. And if you back out the costs associated with bundling mortgages, you might get a 10-year yield at around 6.5% right now. And that is why the yield curve is not really inverted. And that's why we're not heading to a recession. And that's why we're probably heading to six percent nominal GDP growth, which is going to be a combination of inflation and real growth. And that's why people, investors are going to look at this and they're going to build up the stock market because they're going to see spectacular nominal GDP growth in the future.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Bills. And what that's doing is it's feeding into the money markets and the bank reserves. And that ties into the ISDA letter, the International Swaps and Derivatives Association asking for essentially regulatory relief to hold Treasury bonds not as part of their tier one capital that they can hold an infinite amount of treasuries. And so I don't necessarily know if it's going to be QE or it could be some sort of financial repression where the banks are essentially turned into these massive buyers of treasuries. But essentially we need to artificially keep the long end rates low. And this was the comments of one of your other guests, George Robertson, talking about his belief that the true yield curve is better approximated by looking at”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“If the treasury were issuing bonds in the types of denominations that they normally do, we would have had over the last 12 months a lot more 10, 20, 30 year paper come out onto the market. And once in October, Yellen realized that Treasury demand was waning. And this was the same period of time. You had people not just me, you had Jeffrey Gunlock on CNBC after one of those Fed meetings saying, hey, the Treasury market is starting to get a little skittish here. So this was when people were, you had Griffin from Citadel. You had different big names coming out and having these issuance concerns. And we haven't heard those in the last number of months since October because Treasury has been funding huge amounts of the debt with”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“What we've done recently, especially since COVID, has gone off like a hockey stick and it's growing faster than GDP. And so there was a report by the Congressional Budget Office that it did a 50 or 60 year projection that at these levels of deficit spending debt to GDP would reach over 500% by like 2066 or something like that. Growing at two, three percent a year when you have real GDP growth of two, three percent a year, that's completely.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“In my opinion, it's going to be bond market investors recognizing that interest rates need to be higher than what they actually are right now in order to keep up with the coming inflation. However, this coming inflation is necessary to deflate away the sovereign debt bubble. So there's about 330 trillion dollars of sovereign debt around the world. And all of these countries are in this situation where it's basically untenable.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“At the Bancorps, which was a gold based basket of currencies based on trade. And so in order to equalize trade and make onshoring in the US and all these things, you're eventually going to need to get off of a dollar-based system.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“That collapse, we still got a ways to go in this bubble inflation, and that's why I think we could easily see S&P 6000 within the next 12 months and S&P 7, in the next 24 months. And at a certain point, it's going to basically get so blown up that people are going to realize, hey, this can't go on forever. And once people start, you know searching for the exits, it's going to be like a game of musical chairs and it's going to start crashing down. And this, in turn, is going to lead to people to realize we cannot have a dollar as the world's reserve currency and we need to come up with something along the lines of what Maynard Keynes suggested in Bretton Woods, which was a basket of currencies, something like a special drawing right. He called”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Technological boom going on in the 20s. RCA was one of the hottest companies with radio, General Motors. So you had cars and radio and all of these amazing things that people thought were just going to be spectacular growth engines. And they were, but it took 20 years for RCA stock to get back to the highs that it got in the 30s. And what I worry is that we're putting 25, 30 multiples on Google and Amazon and Meta and all of these amazing companies and their tie-ins to AI because we're having capital flight to the United States because of higher interest rates and that once this system begins to unravel in the same way that it did in the 1920s, then you're going to get the collapse. But I think before we get...”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Debt to the United States. And what we have right now is a situation where the Federal Reserve with the highest interest rates. I mean, you look at the bond yields. So the German tenure yield is somewhere around two something percent. The Japanese tenure yield is about 95 basis points. And so you have capital coming to the United States because we don't hold all the gold, but we do hold the dollar manufacturing capability. And since we can manufacture dollars, capital is coming to the United States. And that's why our stock market is trading at a forward PE vastly above of what China's trading at or the European borse are trading at. And so I see basically a similar situation to the 20s, where you have capital flowing into the United States, into the United States stocks. We have a similar situation where there was a vast tech.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Situation where you can look at a corollary today where you had all this huge debt in Europe and then you had the United States with not only gold but also the world's manufacturing capacity because Europe was destroyed. And so what happened essentially today is you have Europe and the United States in huge debt and then you have a lot of the world's manufacturing capacity in China. China is kind of the new entrant into this system that was not really there post-World War I or post-World War II just to tie this all together of how it gets to Bretton Woods is that we had kind of a repeat situation after World War II where once again the United States had vast majorities of the world's gold and Europe was essentially in debt.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Yes, exactly. And the mechanics of it, to get a little more detailed, was that the United States during World War I lent huge amounts of money to Great Britain. Great Britain then lent money to France and Belgium and other allied countries. And so at the end of World War I, you had Britain in huge debt to the United States. You had France indirectly in huge debt to the United States through Great Britain. You had Germany in huge debt. And not only did they have huge debt, they also had the reparations demands, which led to the creation of the Bank for International Settlements in Basel, Switzerland, to handle reparations demands in 1930, which is another one of these intergovernmental organizations like the IMF and World Bank that's involved in these things. But basically that.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Whether or not you believe that that was the U.S. intention, I think it is a historical fact that that is what happened. That after World War Europe was basically broke and it net owed US a tremendous amount of Something like 75% of the world's gold was in US because all the French and British. We're buying weapons and stuff from gold till gold was just.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“I think in some sense you can almost look at this whole period between World War I and two Bretton Woods as this time of transition. So I think it's also important to understand what was the global dynamics post-World War I. So many British bankers and economists cynically believe that the United States purposely waited to enter World War I until the end in order to essentially bleed dry European countries. And so and Mel.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Going to simplify and skip a few things. So, the reason that the world needed dollars. After World War II, the Sterling was over as a global reserve currency. Even argue unofficially that in the post World War I era Really was actually a dollar standard, even though it was officially a sterling standard. But at Bretton Woods, dollar has become gold. The rest of the world's currencies are going to be pegged to the dollar in the same way that currencies. To be pegged to gold. The dollar would be pegged to gold. And if there was any imbalances between the dollar and the franc, the IMF would intervene to set things right and restore. So you wouldn't have competitive trade balances where France would devalue that the French franc in order to The French economy”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Basically, at that point, we were down to about 8,000 metric tons, which is where the Federal Reserve's holdings sit today. And so once we went off of the gold, you know, it was all fiat, that was the final straw to basically put this debt spiral into place that people have been talking about since before, you know, you were alive before I was alive. And basically what's happened is it's now, I believe, reaching a crescendo. And my belief on that goes back to the main expenditure of the United States government, which is Social Security and Medicare and something that happened in 2020, 2021, where we stopped running Social Security surpluses. And now we've moved into a deficit position and we're going to essentially run the Social Security Trust Fund dry over the next six or seven years.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“The empire fell, they were able to turn them into offshore havens for dollars. And to this day, London banks process over 25% of dollar transactions through this euro-dollar market. And it could be legitimate and it could also be illegitimate. So it could be cartels, arms traffickers, what have you that take advantage of these tax havens. And so this entire dollar system that fed the banks profitability in London was put into place to replace the sterling system. Basically, the dollar, which became the surrogate for gold in post-World War II, the United States had about 20,000 metric tons of gold. Nixon suspended convertibility in 71. At the same time, he also put in price controls and did a bunch of other stuff.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Held in Tokyo Bank. It could be held anywhere. And what happened was the Soviet Union actually was afraid that, you know, the United States could essentially confiscate their dollars. And they did not want to hold their dollars in a U.S. bank. And they went to a London bank in the 1950s and they said, we want to hold dollars. Can you hold dollars? kind of wink, wink, nudge nudge deal was made between the London banks and the Bank of England to say, look, if you're going to hold dollars, these are not pound sterling and we're not going to regulate it. And what they did was they proceeded to take their overseas territories, places like the Cayman Islands, Bermuda, the Island of Jersey, Gibraltar, all of these overseas territories that Britain held on to. And there's a reason why they held on to those territories, even though the rest of the world.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Parade every year on November 11th, the Lord Mayor's parade, they basically are a law unto themselves. And so what happened after World War II is they realized that we can still make money. We just can't do it in pound sterling. We need to do it in dollars. And this was the creation of the euro dollar market. Milk, explain why. Most people, you know, euro dollar, they might have heard of it. They're like, isn't that like dollars that are domiciled outside of the United States, not under the auspices of the Federal Reserve? Yes, that's basically what it is. But it is, in fact, the largest pool of dollars in the world. So there are a certain amount of dollars that are held in the United States. And then there are these, what they call euro dollars. And that's just a dollar held anywhere.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“And it was given special rights and privileges, and these special rights and privileges were extended in the Magna Carta in the 1200s, and they continue to this day. So your listeners might not be aware, but the city of London, there's only two cities within the broader geographical area of London. There's the city of London and there's the city of Westminster, where the government is. And both of those are cities that have their own local authority, their own police departments, their own structures. And in the city of London, unlike anywhere else in the Democratic world, the voters are not individuals. The voters are the corporations and companies that are domiciled there. So in the city of London, which has its own police force, it has its own mayor.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“You're correct. It was a pound sterling system prior to World War II. And a lot of this was because of the British Empire, right? So, you know, as the saying goes, the sun never sets on the British Empire. I believe at one point, over 25% of the world's population.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Bring down debt to GDP, which is what we did post World War II. We had an immediate 25% inflation, and we brought that debt to GDP down from 120% to about 95%”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“And you eventually got to the liquidity that the world needed. What's happening right now is that we're in a situation where sovereign debt levels have reached such highs, whether you're talking about Germany, Japan, United States, even China is getting close to 100% debt to GDP, that there's going to be another craving for dollars and for liquidity and that this craving is going to need to be answered. Otherwise, we're going to hit a collapse. And to fund this, liquidity need, then the result is inevitably going to be inflation on the levels that we saw in 46 and 47 that we saw in the 1980s. We're heading into a high inflation environment and a sustainable inflation environment. And I think that's the only way to”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Originally supposed to be called the International Monetary Union, but it was too globalist, so they changed it to International Monetary Fund. The IMF, and those essentially were failures. Immediately following World War II, there was a dearth of dollars. There was a starvation of dollars around the world. The UK in particular needed a $3 billion loan from the United States. It was similar to a Len lease type situation where Britain needed to be bailed out by the United States. But even that $3 billion loan was not enough. And so what happened was a $15 billion plan, the Marshall Plan, which was to seed Europe with dollars, and they did a similar thing in Japan, in Asia. And so what happened is all of this money flowed into the system.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Exactly. So at around $34,000, $35 trillion, if you have a GDP that is starting to approach $30 trillion, then you're at that 120% level. And so in 1946 and 1947, we had about 12% inflation each of those years. So we immediately had basically a 25% inflation rate over a two-year period. And then we entered into 48 and 49, which was a recession period. And then we entered what happened at that point in time was that the Bretton Woods scenario that Harry Dexter White, who was the Under Secretary of the Treasury at the time and John Maynard Keynes put in place, that was really set up with two main things. They put in a World Bank, which was to fund the development of countries. They put in the IMF, which was”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“That's federal government debt to GDP. So just the U Congress. What Congress decides we need to issue a deficit and then Treasury actually makes it happen by issuing the debt. That's what you're talking about.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Exactly. And what I wanted to do was just put out the thesis, and now we can get into the reasons why I think that this thesis holds water. So I agree with you that commodities in the long run, what commodities do is they essentially track inflation in the long run. And you should not expect real returns on commodities, I believe. And so if we're going to see 15 or $20,000 gold price in the next five or ten years, then what you can infer from that is that I'm predicting inflation. And so what I would do is I've seen a lot of people, they harken back to the 1920s, they harken back to the 1990s as kind of corollaries to today. But I also think it makes sense to go back to the 1940s. So if you go to, you know, World War II, the United States essentially hit debt to GDP levels that we Just recently surpassed of around 120% debt to GDP.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Don't like is when people post charts about commodities to stock indices and they say, Oh, in 1915, the commodities to the Dow was such and such, and now it's so low, it makes sense why over time stocks will crush commodities because stocks have earnings and those earnings invest to make earnings bigger in the future. The economy grows. They can do dividends. They can do buybacks. Meanwhile, a bushel of wheat does absolutely nothing. So it makes time like I'm a long term, you know, on a century plus basis stocks will crush commodities. So I really don't like those ratio charts. Tell us the real reason why, you know, and maybe it would help to go back to Bretton Woods, but why do you believe what you believe?”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“We're getting these important influential voices telling people put your money in the stock market as long as you're long term. You're going to do well, that we're actually could possibly be entering a period of what I believe is going to be a crescendo, a bubble, the likes of which we probably haven't seen since 1999, and then a collapse. And I believe it could be a decade plus period before we get back to those highs.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“Status quo gets changed, then I think these types of things are possible. And what I really worry about and what I'm concerned about is a lot of people, whether it's Larry Fink or Warren Buffett or all these top investors, they're preaching to everyone, all Americans, that the path to prosperity is to invest into the stock market. And while that has been true post-World War II, I think it's important for investors to recognize that long periods of time with no real gains in an equity index are possible. And just two examples, 1933, it took 25 years to get back positive. And then you look at Japan, 1989 until just earlier this year, a 34-year period.”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT
“And then in the 1980s, we had gold at 875 and the Dow was in that neck of the woods. Now you look at the Dow right now, it's hitting 40,000. If we were to get gold and Dow parity again, that's going to require either a very significant rise in the gold price or a very big fall in the Dow. And I think both of those things are very possible within the next four years where we could see a $25,000, $30,000 DAO, a big drop and a $25,000 gold price, which is absolutely ridiculous. I understand the ridiculousness of that. But if we are truly entering into a new monetary regime and we're going to have this switch where the dollar denominator”
2024-05-20 · Forward Guidance · Mel Mattison: Asset Bubble Crescendo Until 2027 Collapse When U.S. Treasury Market Implodes · IDENTIFIED FROM THE TRANSCRIPT