In this episode of Palisades Gold Radio, economist and wealth advisor Jonathan Davis once again joins host Tom Bodrovics to discuss the theme of inflation and its implications for the current economic era. Davis argues that we have transitioned from a disinflationary era lasting over 40 years into one characterized by financial repression, which he defines as higher inflation. Tracing this shift back to the post-World War II era when debt levels were unsustainable, Davis contends that recent financial crises were not caused by COVID but rather by ‘shenanigans’ in financial markets. With interest rates reaching historic lows by 2020, Davis predicts that inflation for the next generation will be between 5% and 10%, and interest rates will significantly increase from past decade levels. This transition to financial repression is a response to politicians, central bankers, and bankers’ desire to maintain inflation rather than risk deflation.

The conversation also touches upon China’s economic shift from manufacturing to consumer industries and property development, expressing concern over the large number of unsold homes in China despite continued commodity demand. Mr. Davis discusses the historical perspective of asset classes, emphasizing substantial returns from stocks, bonds, and property over recent decades but anticipates declining value as interest rates rise. He advocates investing in commodities as a long-term strategy.

Jonathan then discusses the current state of the housing market, despite higher interest rates and the end of fixed-rate mortgages, there hasn’t been a significant impact on the housing market yet due to continued employment and low mortgage rates. He also touches upon commercial real estate, suggesting businesses have been able to mitigate costs by subletting unused space and private equity firms delaying effects of the market downturn.

Jonathan shares insights on oil prices’ correlation with inflation, anticipating a rebound and potentially reaching $200 within the next few years due to insufficient production relative to economic growth, causing significant drops in energy stocks. He encourages staying informed, adapting investment strategies, remaining cautious, and avoiding excessive greed.

Time Stamp References:
0:00 – Introduction
0:38 – The End of an Era
13:05 – Real Rates & Growth
20:10 – De-China-Fication
23:15 – Lending & Global Growth
27:32 – Real Vs. Nominal Returns
29:00 – Dow Long-Term Chart
30:49 – 10-Year Treasury Chart
36:24 – Housing Markets & Rates
41:34 – Commercial Real Estate
45:10 – Uranium Thoughts
51:20 – Miners & Juniors
55:34 – Crude Oil & Energy
1:00:53 – Commodities & HODL Gold
1:05:57 – Eastern Metal Buying
1:08:30 – Maintaining Objectivity
1:10:44 – Uranium & Wrap Up

Talking Points from This Episode

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• Davis argues for a new era of financial repression, characterized by higher inflation, due to unsustainable debt levels since the post-World War II era.
  
• Significant price increases for uranium, gold, and silver miners, and global energy in the next one to three years due to low supply and increasing demand.
  
• Politicians and central bankers will maintain inflation rather than risk deflation, which would benefit consumers but negatively impact the wealthy.
  

Guest Links:
Website: https://jonathandaviswm.com
Twitter: https://twitter.com/j0nathandavis
Twitter: https://twitter.com/boomsbusts

Jonathan Davis BA MBA FCII FPFS, Chartered Financial Planner, is the Wealth Adviser. He is a former Chairman of the London Region of The Institute of Financial Planning (now Chartered Wealth Management Institute).

Jonathan has been delivering wealth advice since 1987. Johnathan established the Jonathan Davis Wealth Management in January 2007, where they provide a niche Wealth Management advising a small number of clients. He established this firm in January 2007.

He has over 1000 appearances in the press, radio, and TV. He is often asked to comment on financial issues.