A stranger ok now lets talk with stacey. I think its something along the lines a snoop snoop at. Something like that anyway you know what max was a champion in predicting this sort of headlines then druckenmiller speaking of london i guess they used to run the quantum fund out of there right the in george soros yeah im not sure where they dumbass styled probably somewhere waiting. For certainly they did crash the pound and that is this guys then druckenmiller he was on one of the Financial News shows here in the United States and he predicts inflation and deflation out of the ordinary huge numbers he sees inflation will hit 5 to 10 percent over the next 4 to 5 years and he said thats based on what he heard at virtual jackson hole that the fed is encouraging the government to print more money more stimulus so fiscal stimulus and thats like m m t he said and this is going to cause inflation on the other side he said theyre all there asset price bubbles that the fed is stoking is going to cause collapse which will cause a 3 to 5 percent deflation on the other side so both tails he calls it right well i mean this is youre right because it plays into been talking about this for a while for a couple of things 1st of all definitions for the words inflation and deflation this is that the fact that he can say both are happening at the same time or could happen the same time you have to ask yourself whats the whats the use of even using words like inflation or deflation because a stock doesnt describe the whats going on with the economy weve outgrown those words if the economy is moved beyond those definitions were in a different type of economy and market completely you know ive called it things like buy flay ssion weve talked about that last year where you have both inflation and deflation we talked about having financial window she. Here are the forces of inflation and deflation are butting up against each other and then the the average person is kind of caught middle like you would be caught in a storm a boat in this kind of storm and its being ripped apart and youre spinning we called it a Bermuda Triangle of finance where youre flying over the economy and all the gauges are going in opposite directions and theres that inflation of that deflation the my upside down we call it the poseidon adventure of the economy where Steve Mcqueen is and his band the people escaping the ship are going in the wrong direction because they dont realize the upside down weve been this is been a common thing so stam a drunken miller is that stating what weve been saying now for a number of years that it looks like both but it cant be both it has to be Something Different and what it is as weve been saying is that its neo feudalism its the fed is printing all this money as he points out but its not inflating the economy because its being used to take the Economy Private in a huge leveraged buyout like if Michael Milken were running the world this is what he would do its neo feudalism stanley thats thats what i call it by what it really is yeah and its that command and control in order to maintain that status quo of the neo feudalism whatever you want to call it the interference in the markets which are reflecting just merely nature and including in it time and energy and those are the 2 most important ingredients to measuring you know our economy and time went negative with negative Interest RatesEnergy Prices went negative in the past year so it makes sense that you would have that swirling compass telling you are you up or down you dont know anymore because at a certain point you lose track and you could kind of see this in this next chart actually Jeffrey Gundlach says this could be the charts of the year and what you see is this crisis increased disposable income the bottom line there is despite. Civil income. Excluding government transfers so Social Security welfare Unemployment Benefits anything like that including you see it is a huge surge going back decades this is like a huge surge in u. S. Income and totally because of u. S. Government transfers so this is the thing that Stanley Druckenmiller says is going to cause the inflation but its also extraordinary that youre seeing you know we have gone through the Looking Glass that started in 2008 that we really had that a lot of the income. Of the ordinary american 18. 8 percent in 2008 came from the government and thats when baby boomers turn 62. 00 now you have that plus the pen demick plus all this collapse plus the financial collapse plus the negative Interest Rates and negative Energy Prices and we have 24 percent of income in america is from the government so were reaching a some sort of Tipping Point you know the Event Horizon is being passed but just postpone it come is being flooded into the system thats the money printing. And the lack saying that while druckenmiller saying there is an inflation risk or its causing prices to go up. Simultaneously though you are living on a ship that is sinking due to the implosion of the velocity of money and therefore the collapse of the bond market and we know that the bond market has collapsed because the only way that america can sell sovereign bonds or government is to buy them back of from itself if america wasnt buying back its own debt then no no would be no bid there would be nobody buying the debt and like in 1971 the American Government would have to declare bankruptcy or insolvency which is what nixon did we caused the gold window so net net you have. An economy that would be similar to what you might find at a funeral home its a cadaver thats being drained of all his life fluids but people are mistaken the formaldehyde of money as a reanimation of the corpse and that we should then put this corpse up on its own 2 feet and ask it to walk out of the funeral parlor which is asking too much of a corpse this American Economy died in 2008 theres been a lot of formaldehyde pumped in through the system but its still dead its as dead today as it wasnt 2008 and these professional Money Managers obviously by their statements are utterly lost in the woods i have no idea what theyre saying they have no idea what they should be doing well part of the situation we find ourselves in of the topsyturvy them and where we cant tell up from down is that we do have a bifurcated economy where of neil feudalism right and because we have the us dollar and we can print it we dont need the bottom 99 percent so the top one percent in which Stanley Druckenmiller lives they get. The fed money thats the credit that is printed remember its credit is not money only the u. S. Treasury can create money they can issue bonds and they can print currency so the ordinary 99. 9 percent of americans live and that their economy where they have to rely on the treasury you know to and the government for tax policy business policy fiscal policy all of that stuff that would create in a real economy and obviously you know sense since nixon but especially under bill clinton we shift all of our economy to china right and and the top 1 point one percent have been able to live off all this credit so they get free credit for which they can buy up all the assets of the world and have an income stream based on that based on the real goods and services produced by the rest of the world and you know part of the military Industrial Complex and the intellectual property complex they get to get that stream based on all the credit created whereas the real ordinary person lives and that that all their economy and youre seeing like you know that huge rise in income. Is now hitting them because of this corona virus and that thats also going to cause turmoil we dont know how its going to play out but it could play out in this election because people have savings for the 1st time go online read it you could see people talking about having savings for the 1st time in their lives because of all this stimulus money thats being sent to them the enhanced Unemployment Benefits so you know there is something going on something snapping we wont know until it actually happens and we can look back and hindsight but its Something Interesting or thats an interesting point to make this possible income is going up but it doesnt mean that income is being disposed of he has that if people are saving it theyre not actually spending it we have main thats why the money velocity is down also is because yet disposable income if you are described as disposable income is up but people are saving it theyre not disposing of it so you dont see people people dont believe that the condom is coming back so theyre saving now this is also called the paradox of thrift and its of reviled by the keynesians and the money and the debtors out there who believe that you need to spend spend spend or the economy collapses but you know that is only true if you have sound Monetary Policy and we dont if Interest Rates are 0 as you point out then the Michael Milken thickish of the economy is in full swing that is taking it private the mergers and acquisitions will continue until the meetings stop or that the beatings the mergers and acquisitions will continue until morale improves animal spirits improve right until animal spirits come back and if they never come back and we find ourselves with oh my god only 5 people own mind you 9. 8 percent of the economy how did that happen well you know if you watch the show for the last 10 years you would know how it happened yeah and fact when he said that people are saving americans are saving all this cash in this huge savings rate its like chinese level Savings Rates and why did the chinese save some. Its well because there is no sort of they have a really nice feudal system where this a concentration of wealth is vast so they want to save it in order to be antifragile of course because Health Care Costs things like that might wipe out their familys wealth so they have to save a lot because of the per carry ness of precariousness of the whole situation so of course like your experience over the last few decades where you havent had savings for decades because you have to work or work and work 2 or 3 jobs member as george bush has said like uniquely American Well of course like you are you want to youre still you have posttraumatic stress disorder from that from these stressful years and you finally could say ok here it is ive got some savings right the depression generation were great savers yes yes my mom would you know say for pennies on her nickels and put them in depend wrappers and take them to the bank and get cash around every few months right i mean that was something she learned as a child of the depression these young millennial generation z. Or china are children of. You know the dead apocalypse you might call it that this is what stan talking miller had talked about in terms of the deflation hes expecting hes expecting and asset prices of the fed controlled economy not the treasury you know control the economy the people that have to live within the treasury and some their checks to the treasury for their taxes and stuff like that are received income from the treasury so this is these are 2 different economies and theyre about to collide this could be like a neutron star colliding very soon they want happens when new tron stars explode it gives us gold yes were going back to gold were going to take a break after this detroit star explosion and a meteor or hits and when we come back we wont be here at all itll be complete obliteration dont go away. Elwood forward to talking to you all. That technology should work for people. I robot must obey the orders given to a human beings except where such orders that conflict with the 1st law show your identification or should be very careful about Artificial Intelligence and the point all of you seem to crave trust. Really serious here with Artificial Intelligence where some of the. Group must protect its own existence with. A new gold rush is underway and. Thousands of ill equipped with flocking to the gold fields hoping to strike it rich is a good. Person by those that work children a tool in between gold. From me was very poor i thought i was doing my best to get back to school which side will have the strongest appeal. Welcome back to the kaiser report im max keyser time now to go to the to the oracle of secaucus the scene here of bayonne they want to only michael pentel of pent up port dot com michael welcome back. Good to be with you tremendous to see you. Oh is a good time with michael pent all right lets you know usually we talk kind of macro stuff and i wanted to dig into some whats happening in your industry folks that are doing what you do and trying to make money in these markets and start with Warren Buffett you know hes dumped all of his Airline Stock recently most of his bank shares he went long barrick gold thats quite an interesting move there and japanese conglomerates shorting america the thing that he said he would never do michel this is a traditional emblematic person who says you know just buy and hold america and now hes buying gold so i guess you can teach an old dog new tricks he no longer believes in the sanctity and the purchasing power d of the u. S. Dollar so he selling dollars by interest is metals i love the movie i think its very wise and hes welcome aboard my team he has to be nimble thats one thing you need to be in this industry is dead ball you know you dont make money by sticking on to a sinking ship now a stand druckenmiller neither famous money manager worked with george soros for a long time more of the best in the business he he made entering statement he thinks that inflation could easily hit between 5 and 10 percent because according to him weve got this to fact or modern monetary theory going on at the same time he thinks you could see deflation in terms of asset bubble bursts right so this is like 2 conflicting forces in the economy. All at one time it sounds i guess vaguely like stagflation vote what do you make of that michael i mean i like mr druckenmiller but he seems a little bit conflicted there there are 2 different Investment Strategies im a 20 point model the inflation deflation and the Economic Cycle model and makes a heck of a big difference if you want to be hedged against stagflation or inflation or right or inflation where if you want to protect against just inflation and deflation so he better make up his his mind of collecting it collapsing hasnt prices would be very deflationary and you need totally different strategy then for one thats you know as i said a 2nd derivative increase in inflation i am heads right now towards just inflation and deflation and recession. I was hedged for a stacked lation from march to say august and ive changed. Mid to late august d i changed the earlier strategy because we have a massive fiscal and monetary cliff that were going over and for those that believe like mr powell that you could just say i believe that we should bail have a chilling to hear Percent Inflation target instead of a 2 percent target that we just cant reach as we measure it based on the coup or you see deflate. You know doesnt mean you can reach it. As they say we had a 3. 00 trillion dollar deficit in fiscal 2020 that was borrowed money that was printed by the Federal Reserve and now this Balance Sheet that went from. 800000000000 in 2007 to 7 trillion in 2020. It increased by 3 trillion dollars in a matter of a few months that Balance Sheet max is now shrinking if you look at the past month the Balance Sheet has shrunk by 100000000000. 00 thats a big difference that increasing at the rate of about 500000000000. 00 a month thats a huge transient gap in the exhilaration of the Monetary Base and when you say that the fact that theres no more elegantly money no one 1000. 00 checks going out of mr bernanke is helicopter passed out from the 1st time in this country to universal basic and this is what caused the stagflation in the middle of this year but now again like i said there mr druckenmiller just inflation deflation and recession intil the monkeys in d. C. Decide to. I think share each. Borrow trillions of dollars more or bankrupt the nation even further and have the courage for mr powell to print it all you know this modern monetary theory or universal basic and then this idea it sounds like mer and this election coming up and it sounds like its an election about whether america wants to be socialist or not is that a fair characterization whats fiscal and Monetary Policy has ever been in place that has ever been any country not only i see any country in the world that has been able to be successful and remove i mean just didnt deserve a policy for decades theyre still there and you read your is at 0 in straight policies and in to me we got off our observer policy for maybe a man and a nanosecond and then were already panicking and cutting rates in 2100 muster for anyone ever heard of the one virus they could reach 3 times in 2100 remember that we were backed into q. E. When the report market. So barely started we jumped the shark we entered into the threshold the new era of you beyond and modern monetary theory where we just say you know what you stay home and well send you a check to do anything and