The consensus for the economy is bullish. After a 6.4% annualized increase in real GDP, that’s without inflation, in the first quarter, recent forecasts are for 10% GDP growth in the second quarter, 7.5% in the 3rd, and 5% in the fourth.
As for inflation expectations, they are up. Again the consensus is that the combination of a rapidly rebounding economy, supply shortages, and tight labor market will lead to a sustained rise in prices.
The most prominent skeptic on that front is Federal Reserve Chairman Jerome Powell and other Fed officials who believe the price increases we are seeing now are transitory.
This week’s guest, influential economist Dave Rosenberg is in the Powell camp on this one and believes the recent jump in inflation is temporary and that the overall bullishness on the economy and markets is wrong and will be challenged before the year ends.
Dave Rosenberg is the outspoken and often contrarian Chief Economist and Strategist at his independent economic consulting firm Rosenberg Research.
I began the interview by asking Rosenberg why he is as convinced that the bullish consensus is wrong as he was when he went against the crowd at the height of the tech bubble in 2000 and the housing bubble in 2007.
00:00 Hello
00:46 Introduction
02:58 Interview with David Rosenberg
22:45 One Investment
24:35 Action Point
WEALTHTRACK #1750 broadcast on June 11, 2021
More Info:
For more detail about the evidence behind Dave Rosenberg’s convictions, he is generously sharing a recent comprehensive report, “No New Era” with us. Sign up for your copy.
…(read more)
LEARN ABOUT: Investing During Inflation
REVEALED: Best Investment During Inflation
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HOW TO INVEST IN SILVER: Silver IRA Investing
Inflation Is Temporary: Bullishness on the Economy & Markets Is Wrong [2021]
Inflation is often seen as a negative force on the economy and markets. Rising prices can make it harder for people to afford the goods and services they need, and it can also eat away at the value of savings and investments. However, it’s important to remember that inflation is not always a sign of economic decline – sometimes it can be a sign of growth.
In 2021, there has been a lot of talk about inflation, with some investors and analysts expressing bullishness on the economy and markets. The argument goes that higher prices are a sign of strong demand as consumers and businesses spend more, and that this will ultimately lead to higher profits and a stronger overall economy.
However, there are several reasons to be cautious about this bullish narrative. For one thing, much of the recent increase in inflation is tied to supply chain disruptions and recovering from pandemic-related disruptions. As economies reopen, demand for goods has surged, but many factories and shipping companies are struggling to keep up with the pace. This has driven up prices for things like raw materials, transportation, and labor, all of which are important inputs for producing goods.
While these challenges are real, they are likely to be temporary. Eventually, factories and shipping companies will catch up with demand, and prices will likely stabilize or even decline. This isn’t to say that the economy won’t remain strong or that markets won’t continue to rise, but it does suggest that any bullishness based primarily on rising prices may be premature.
Another factor to consider is the role of government stimulus in boosting the economy. While recent stimulus packages have been credited with helping people and businesses get through the pandemic, they also run the risk of driving up inflation. When people have more money to spend, and there are constraints on the supply of goods and services, prices will naturally rise.
Again, this doesn’t mean that government stimulus is bad or that the economy won’t benefit from it. However, it does suggest that the effects of stimulus on the economy and markets may be more complex than simply driving up prices and boosting profits.
Overall, it’s important to be cautious about bullishness on the economy and markets in the face of rising inflation. While higher prices may signal some positive economic trends, they are also likely to be temporary and should not be seen as the sole driver of market performance. As always, a diversified and balanced portfolio remains the best way to navigate the complex and ever-changing world of investing.
Well, that didn't work, inflation is still burning hot.
Wow, Dave's prediction toward the end of this video really failed hard. Last Fall, He said "GO LONG" on 30 year Bonds.
Fail on Temporary Inflation.
7Trn ain't ever not inflationary even after locking the world down
Just tuned into this again over 5 months on and it appears as though you got it wrong David with inflation "being transitory". However, it looks like it's sort of levelled off at this time on Nov 21. But the problem is that if/when inflation drops back to 1.7% – dropping from 6%, everything doesn't summarily drop back by that percentage.
In other words, inflation goes back to 'normal' (sic) and David and Powell say, "see, I told you inflation was transitory". Alas, families have to still find an extra $40-50 per week to get by on for higher costs that didn't go down.
More than 3 months on Dave Rosenberg, was so wrong costs going up….
do not buy anything until the crash when deflation has strangled the life out of the middle and lower class by up their cars and trucks houses wife's for $0.10 on a dollar get them cheap just like Portugal very cheap
Markets currently dipping with a correction quite possible due to China's RE debt problems. So 3 months later this might look prescient. Great interview interesting points, I've been wondering the same thing about interest rates, let's see if the long bond bumps 25%.
Harry Dent talks about the same trade – 10 or 30y treasuries. Low risk – decent return. Then again, I bought BTC in 2015 – beat those gains (and I'm still in) 😉
Not “we”, you’re Canadian.
Great interview. Very informative
Many people commenting here are looking for easy fast money Good luck with that.
David is the best
Annnnd it increased to 5.4%
I think we will have a few bumps in the next year, but overall things will progressively improve. There's the contrarian thought process for you. And Bob's your uncle! LOL.
Next thing you know, Bob is your uncle.
I didn’t know that.
Not much substance, unfortunately. Essentially Mr. Rosenberg is bearish on economy, associates inflation with growth, concluding that inflation is transitory. Well, perhaps we'd land on staginflation. He could've defended his point of view by laying out a sound economic theory and providing hard evidence supporting the theory. Instead he just threw in some anecdotal observations.
TLT resumed the upward trend after the publish of this broadcast; it probably was not a coincident.
I think we know who the next Treasury Secretary will be!
This guy is full of shit just ask the truckers whats going on they will tell you that its gettign worse. What does some asshat in a suit know about the economy?
Look at the housing shortage and how much real estate has grown in price. Some places like waterfront has doubled the last couple of years. Rent going up…. I see no inventory to back fill this presently. As builders build–more homes sold will drive durable goods? inflation?
Don’t get stimulus and welfare mixed up.
LOL lol 8 trillion $$$ fed balance sheet, $28 trillion debt, its like getting in a car with George castanza to the hamptons or being with Jerome powell as he takes us for a rate ride, do the math.
Disagree. I've followed David for a very long time and although I've always agreed with him, he's missed the upside in the markets the last years. This time we do have inflation because it's not about money velocity only. It has so much to to with money supply. You can't say there's no inflation. That's just ridiculous. We've had 3%+ inflation the last 10 years and currently running at 12%. Learn from John Williams shadow stats….that's all you need to do
Rosenberg has made a career, or lack of one, on constantly wrong contrarian views.
Trillions of dollars of cheap money is everywhere – markets are not going to go down. Feds are connected with Wall Street under the table and wall street operates on a bullish narrative. So yes, markets are going to be flat or upwards. Nothing beyond that.
Dave Rosenberg really understands the financial & economic predicament we're in.
This guy is delusional inflation will never decrease the system is designed to constantly have inflation.
Lots of value…
Economy is fine…
Consumers Savings HIGH
Consumers Debt LOW
Valuations "P" are questionable but the "E" is RISING!!
Now that fiat money has long been accepted, socialist centralized power is growing and massive debt/GDP has reached World War 2 levels, all the ducks are in a row for the government to repudiate its obligations while still going through the motions of paying the debt via the magic of mouse clicks inflating the money supply. If Rosenberg is right, the profitability of his recommended trade will be short lived.
You did not account for the money printed. It went somewhere. It does not disappear after you spend it. Housing prices would crash if he was right. Oil prices would crash. Copper will crash. Wage inflation will crash. Sorry David not happening unless Fed raises rates a lot.
he is wrong
ConsuelO, I hope you will consider telling these men before you interview them, "My name is ConsuelO, NOT ConsuelA! ConsuelO! ConsuelO! ConsuelO! Please pronounce it correctly!"
Invest now. Be smart.
Crypto
Where did the expression of Bob's your uncle come from? Yes, I've heard it infrequently over the years.
GoodYear Tire is going to be a great one. It had a nice pullback and now it has room to run again <3 3 days to cover, for shorts in this ticker. Technically, it is in a nice dip. The CEO was just on CNBC. Ticker Symbol: GT
MORE BALONEY ON WHOLE WHEAT
Good interview. I enjoyed 2nd half most. Of course we are in a precarious situation. The stimulus checks were a bad idea. The money probably largely went to China. Our debt is insurmountable.
I'm sorry I wouldn't even have lunch with Dave