The Best Interview I've seen on our current economy: CNBC w/ Jeffrey Gundlach

Wow, a major person in the U.S. financial world willing to actually tell it like it is.  This interview is incredibly refreshing, although depressing in the long run.  If you have ANY interest in investing, financial markets, or the future, this is worth watching. 

When I started this blog in June of 2017, bringing all my blogging into one place, I soon started talking about some longer term issues, like technology taking human jobs, the next recession, and other major trends I saw building into a serious recession.  In the beginning of January, 2018, right after President Trump signed the huge tax cut (corporate bailout) bill into law, people in the financial world were predicting the markets would take off, and soar for another 3 to 5 years.  I, however, predicted the markets would rise for 1 to 2 months, and then head downward.  That's exactly what happened.  The Dow, S&P 500, and Russell 2000 all peaked on January 26, 2018, then headed down.  The Nasdaq headed up a few more months before heading down, buoyed up by the big tech stocks everyone was clinging to. 

Largely, I got the point right that Trump signing the taxi bill was the reason stocks were heading higher early in Trump's presidency.  The big corporations and Wall Street new a widfall was coming.  After the bill got signed, and major corporations did some major buybacks of their own stock, and there was no more serious, fundamental reasons for stocks to keep heading up.

At that point, from my point of view the major recession was ready to happen.  Then something really crazy happened, that I didn't expect, stocks began grinding slowly upward again, until a huge collapse in late 2018.  Then they ground slowly upward again.  My analogy was the the stock market is now like a couple of bulldozers trying to push a dead whale up the side of a mountain.  Yeah, you can push it a bit higher, but it really just doesn't want to go.  And at some point, gravity will send it rolling back down the mountain in a big way, that's inevitable. 

While I've said for years that I have a big interest in economics, I've found in the last couple years that I make financial predictions largely on big picture trends and mass psychology.  I'd check the markets to get a take on where the financial world was in the larger cycle I saw playing out.  I never really dug into the nitty gritty numbers of economics.  Sidelined by outside pressure, and struggling to just survive, I had no reason to dig deeper, I have no money to invest.  I wouldn't put a dime in the stock markets, anyhow, at this point. But without digging deep into numbers, I could predict recessions and other market trends using the group human psychology I saw happening over the last 25 years.

What I got wrong, was the incredible level of market manipulation going on since 2008 by the The Federal Reserve, other central banks around the world, the big investment banks, and Wall Street.  While financial people often talk about "free markets," that's really the last thing they want.  The financial world wants markets highly manipulated, in their favor, to make a killing.  Since The Great Recession, though, the markets have become so manipulated, that we now, functionally, have two economies.  We have the "financial world" economy, where the Dow is hitting a new "all time high" today, yet that high is less than 6% above the high it hit on January 26, 2018.  It's up less than 3% a year in the last 23 months. 

Our second economy is the everyday economy that us average American people live in.  About 65% of America is struggling to make ends meet, and a third of everyday people are making decent salaries, but many are weighed down with a huge amount of student loan debt, and often other debts. The "financial world" economy is being pumped full of money, literally to keep it from completely collapsing at this point.  Something like $380 billion has been pumped into the Repo Market since September, a market most of us never new existed.  Yet, if it seizes up for a while again, the world economy begins to collapse.  Like, REALLY. 

We are in a complete financial Never Never Land, a place of countries putting out bonds with negative interest rates, a place where everyone is "living off their credit cards," individuals, corporations, and whole countries.  The world is piled high with more debt than ever in human history, and being pumped full of money to try and inflate markets, continue devaluing currencies, and kick the debt can further down the road.  But the biggest manipulations in history are barely keeping things functioning at this point. This current financial world can't last for long, and the collapse is going to annihilate entire regions and maybe whole countries.

In the interview above, Jefferey Gundlach, hardcore bond expert, actually gets into the reality we're facing, and gives really insightful thinking on where we are, where we're heading, and how to deal with it.