Tom welcomes back Jeff Snider to the show. Jeff again brings us his extensive knowledge of bonds and the shadow money system.

Jeff explains the purpose of swap spreads which includes reflecting systemic credit risk. Back in October 2008 something significant changed as spreads turned negative. The 2008 crisis was primarily about the money dealers since without them there is no banking system.

We may not want a fixed supply of money because the world is quite dynamic. We need to adapt the Eurodollar into a more disciplined system.

Every country constantly needs dollars because otherwise, they can't participate in the global marketplace. When countries need dollars in a hurry it’s not unusual for them to sell treasuries.

The Fed is concerned that the public might begin to change their spending behavior because of inflation. The Fed today is more of a behavior influencer than a direct intervener in the markets.

The main parallels of today are the 1930s in the U.S. and the 1990s in Japan. We see similar pricing of current long-term bond yields to those times.

Gold prices this year are doing fairly well despite higher interest rates. Gold is often a reflection of long-term treasuries. The bottom line for gold is that nothing in the system has been fixed so gold will continue to do well.

There are many ominous signs of problems in the system. Compressed rates, flat yield curves, and negative rates are all indicative of massive problems in the monetary system. What form those problems will take remains unknown but they are stacking to the downside. It could be a recession or a decline in growth for part of the world.

Time Stamp References:0:00 - Introduction0:45 - Swap Spreads4:46 – Dealers & 08 Crisis9:00 - A Broken System11:50 - Fixing It16:41 - Treasuries & Dollars18:36 – EuroDollar & Inflation25:54 - Wage Price Spiral30:00 - Fed's Limited Controls35:20 - Interest Rate Behavior37:39 - Historical Parallels40:51 - Yields and Gold46:24 - Bitcoin & Risk48:53 - Stimulus & Economics51:29 - Helicopter Money?54:14 - Russia & Reserves59:41 - What is Coming?1:02:54 - Wrap Up

Talking Points From This Episode

Swap spreads and the 2008 Financial Crisis.Possible solutions to the world's financial system.Outlook for gold in this environment.Risks in the current global markets and what the next crisis might look like.

Guest LinksTwitter: https://twitter.com/JeffSnider_AIPWebsite: https://alhambrapartners.com/

As Head of Global Investment Research for Alhambra Investment Partners, Jeff spearheads the investment research efforts while providing close contact to Alhambra’s client base. Jeff joined Atlantic Capital Management, Inc., in Buffalo, NY, as an intern while completing studies at Canisius College.

After graduating in 1996 with a Bachelor’s degree in Finance, Jeff took over the operations of that firm while adding to the portfolio management and stock research process. In 2000, Jeff moved to West Palm Beach to join Tom Nolan with Atlantic Capital Management of Florida, Inc. During the early part of the 2000′s he began to develop the research capability that ACM is known for. As part of the portfolio management team, Jeff was an integral part in growing ACM and building the comprehensive research/management services, and then turning that investment research into outstanding investment performance. As part of that research effort, Jeff authored and published numerous in-depth investment reports that ran contrary to established opinion.

In the nearly year and a half run-up to the panic in 2008, Jeff analyzed and reported on the deteriorating state of the economy and markets. In early 2009, while conventional wisdom focused on near-perpetual gloom, his next series of reports provided insight into the formative ending process of the economic contraction and a comprehensive review of factors that were leading to the market’s resurrection.

In 2012, after the merger between ACM and Alhambra Investment ...