WTF: What The Fed?!? (Round 2)

Back in mid-January, Grant Williams, Mike Maloney, Charles Hugh Smith, Chris Martenson and I sat down for an in-depth discussion on the dangerous distortions to financial markets and the global economy that central bank intervention is causing.

That video, titled WTF: What The Fed?!? was released soon after the US Federal Reserve had added $200 billion dollars to its balance sheet in Q4 2019. At the time, we worried so much liquidity being added to the system so quickly could recklessly exacerbate the extreme overvaluations in the markets, and further increase the instability of our over-indebted economy.

Little could we have guessed that a global pandemic would soon ensue, one that has seen the central banks collectively flood the world with an additional $4 trillion so far, with (much) more anticipated to come. Sure makes that $200 billion look pretty tiny now…

So, if this group of experts was highly concerned about systemic risk pre-coronavirus, what are they thinking now?

$Trillions in new fiat currency printed in less than 2 months. Over 36 million jobs lost. A Q1 GDP drop of -5% and a predicted Q2 drop of -42.8%. And that’s just in the US alone.

These are historically unprecedented developments on a Great Depression-level scale.

The impact of the economic production loss triggered by covid-19 will be painful and with us for years. How bad will it get? What should we expect next? And why are the current prices of financial assets so divorced from the reality of the destruction to the economy?

For these answers and more, watch this 2-minute trailer for WTF: What The Fed?!? Round 2:

And then click here to watch the full 80-minute video discussion.

This is a companion discussion topic for the original entry at

for the next meeting of these 5 great intellects. I could have listened to another hour of comments. Unfortunately, the next time the guys meet, I’m guessing things will be a bit more pressing and perhaps grim…Mahalo nui loa Adam, Chris, Grant, Mike, and Charles. Aloha, be well, Steve.

Every commentator had their spin and all are correct and all are suspect. Grant made it very clear that everyone is just guessing at the future at best. Basically, that there is no true answer to what is coming. I fully agree with his opinion on this. We are now guessing. If I’m going to guess then I’m buying first what every human being must have in their portfolio. ENERGY, it just makes sense. Inflation-Deflation, Long term is Gold and Silver, short term is putting your nose to the grinding wheel and to try and profit in the short term by grabbing a few dollars from the TRILLIONS moving about the economy, because things can change over night as Charles spoke of.
Every day when I begin my research, which is not a planned research as I read everything and my day takes me where it does. Just work at everything, every day, until tired. I research everything so that I am not biased towards one way of thinking. Fact is, I have painfully put myself through the process of taking each side so that I remain humble to the fact that there are many different outcomes. I am never going to look beyond the 3 to 6 month time horizon. It is why I just don’t see PM as being my primary investment strategy. I own PM and it bores me now as I just don’t see where the “World Currency” issue is anyway near in sight. Fact is, when I look out I see everyone else defaulting before we do and then I look at our military, then I think we’ll still be at the head of the table when the shit really hits the fan. The dollar is still very strong, I see heavy Deflation and I don’t see any real Inflation just yet. My God, the world is just getting back to work, will still be in lock down mode for months, a couple of years maybe and Folks just want to pay their bills. I believe too that we will pay off debt now and wait for the time where we feel safe enough to shed our masks and start consuming again but, I never see the retail sector ever really recovering. People will still avoid crowds if they have a viable alternative. That Folks is Amazon. That Folks is work at home. That Folks is staying away from crowded anything. One thing that has permanently been altered is crowded places to comingle. I just don’t see where that will return for those 25 and older. Kids, the next generation may reinstall the crowded bars thing but we are now very scared of getting sick so hanging out is pretty much a thing of the past but in small places that are large enough to space ourselves plenty of room.
Our goals are all different but what is common is what we all agree on. Get RESILENT. That means: what is it that I need for my life to be a rewarding life that I participate in to bring my consumer goods to me that I have a hand in, literally. For me this will control expected inflation as my quality of life also includes my working to bring in a garden, to help bring in my proteins. To bring in a good percentage of my heat and other expenses that I pay my currency for. I can support this because bringing in my crop affords me my style of life and pays me a real return. Hell, fish from our Pond we dug and fruits from trees and shrubs are reliable, productive year in and year out and are now free as all expensing has been paid for as well as past labor. I am doing what I love, every day that has monetary value…to us. My Lady is on board also and my tools help me or rather us to duplicate ourselves as well as do the heavy lifting. It’s very exciting.
Short term there is blood in the streets. Surely Oil is the master commodity. Never before and never again will we be able to buy at such cheep prices. So it isn’t wrong to load up in oil. In fact it should now be owned by all portfolio’s. I know that oil demand will rise at least 10 to 15 million barrels a day as we open up the world economy, not all at once but over the short term for sure. I believe cars will for a long time be the transportation choice. And I know in quick order that oil will recover and burn up much of the reserves that are spilling around all the storage tanks in Oklahoma. Why? The Rigs are being taken off the fields and producers are not pumping. they are not producing, they are not completing (Ducs) and they are not looking for oil. What they are doing is trying to get the price of oil up where it doesn’t meet demand so that the reserves will get drawn down and then they will all manage oil to the point where they (the oil industry world wide) all are profitable and no one will take any action to the collusion that will be in place for the foreseeable future, Oil must get to the $50’s, at least to bring back all the jobs and to supply only enough to keep the balance of Supply and Demand. It is imperative that we have a viable oil industry and we must come to a stable price for oil. Is that $70 a barrel? I don’t really know, I think, probably, so that it doesn’t keep destroying everyone’s book. So, M&A, consolidation, bankruptcy’s…we just must get oil squared away so that we don’t have the spikes that are surely coming if we stop with the finding of oil. Spikes are inevitable and Demand-Supply will balance as no other transportation will be viable but cars. Prices will go up as we start to count the portion of Folks leaving the unemployment lines to work. Looking out 6 months, does anyone believe that oil will be less than $40? I don’t. I think $50 a barrel is achievable this year still. I’m guessing $40’s but we can overshoot and will, we always do.
What I care about is that my house gets finished without any more shut downs. I cannot go into the late Fall without a roof on because if and it’s a big if, the government shuts down then I live with a roof not finished to brave the cold weather of the North Country and all the rain, snow and sleet that comes with this. Michigan can have brutal winters and I would risk a complete rebuild. Not going to happen. It is a RISK I am unwilling to take so may wait until next Spring. It’s all a timing thing and I can’t even get permits until Michigan opens up its economy fully in the near future. Plus I’m financing the project and we haven’t even started this process because it’s shut down and back logged.
Now, when all the States roll their economy’s out again then oil will gather steam and quickly until some form of buoyancy is achieved, it is then I will take profits and play the game even more attentively than I do now.
All of this seems right by me and this Podcast for me gave credence to my plan as everyone spoke of things I’m concerned about and showed me that we probably have a lot more time to still plan than is appreciated. I just need one more year and everything I have planned for will be in place, productive, ready to rock and roll come what may. I believe many people get confused that things are imminent, and only bad things are about to happen. I believe all is good and will have to protect my privacy and not allow the spiritless to influence the harmony we have started in earnest years ago. I can’t concern myself with the ultra rich, I can try and make some cash so that everything is owned out right (I will have only the debt of the new construction and that can be paid for next year if I choose. Next year we get my wifes investments and pension and incomes that she has worked for so hard these last 35 years. So we’ll probably go for a payoff if it looks like we;ve exhausted our opportunies to make more cash in the stock market. I believe in oil, I believe in the Amazon’s, I believe in investing in the things that clearly are needed by everyone just to live a modest life so that will be my only focus. That and a 20 acre piece of wooded land directly across the road from me. That’s a lot of fireplace logs to heat the home with. Plus I can slice up many of the Oaks and Maples for some nice wood to sell area cabinet makers. Otherwise, I’ll just process what I need and that has an immediate pay out for decades to come. I’ll continue to help support my living standards by making food and providing protein so that I can stay home and order my stuff from Amazon. Truly, I just want the time to spend with my Lady in our better years enjoying doing what we do and that’s gardening and taking care of the things that create wealth that was created by harvesting renewable resources. That is what we will do and we will have our investments and use this cash to better the lives of those around us as well. Mainly my son’s. That will be what makes life worth living. Love this site…PEACE…PS: Charles, you didn’t get much ink in this Podcast but that’s ok. Your few words speak volume, certainly for me. I am loyal to you Charles as a Brother is to another Brother. You opened ever door for me because you are an excellent writer and you speak the language that truly motivates and makes things so much clearer for me. Hey, Man love Brother, LOL, what can I say?! Peace.

Finally, I’ve patiently waited through all the virus talk and death tolls (which I know is very important to some, just not me) and now we can discuss life moving forward. So as a paying customer, I can’t watch this unless I give you an email you already have? But wait there’s a catch: I must give you permission to spam me endlessly at the email provided. I don’t want one more thing in my inbox every day, I don’t want my email address sold to whoever, I don’t want to be on one more list. Voting with my feet on this new business model. Thanks for all your past work I really enjoyed the site. Best of luck in your future.

Excellent discussion, the 80 minutes flew by. Although I’m not a paying member (anymore), I agree with dcallback that a little bit more communication as to why email adresses had to be given would have been nice.

If providing an email offends you so much, just put in a burner address or some The video still works just fine.
I fully understand why they ask for it - email is effective marketing and lead capture, and PP would be dumb to leave that option off the table. I’m glad they make it easy to bypass for those that make a modicum of effort.
Keep up the good work, Adam and Chris.

Now for something funny. I found this video to be hilarious!
It’s about “What It’s Like to Believe Everything the Media Tells You”:
It’s most likely - as Chris has stated - that there is a second wave coming. However, that does not justify the authoritharian overreach from the government nor does it justify the fearmongering from the mainstream media. This worries me just as much as the Sars-Cov-II virus itself.

Great discussion and video! Keep up the great work. PP’s education of the world is accelerating at an exponential rate…that’s one exponential Albert Bartlett would be quite pleased with.
Btw, if people don’t like the email thing for whatever reason I recommend Give it a try as I know it will suffice. There are more things to be irritated with the world than typing in a bogus email.
Hope everyone has a great day, gets a lot accomplished working in their garden which will give an outstanding opportunity for great sleep tonight. I haven’t slept this well in 20+ years.

Thank you so much guys for putting forth this effort. I find it very helpful to hear how the Big Players are thinking. My only request for future roundtables is that if that is the best you can do with the Bandwidth, please just post icons of the people speaking so we can hear the uninterrupted audio. While it is nice to see the speaker, if the system is having trouble supporting that then it should be dropped. As with many things going forward from here, the “convenient and comfy” things will have to be sacrificed for what is really needed!

Hey planfortomorrow - your comments about needing to get your roof on before winter takes me back to the '70s when we were building our house in Quebec. We built the garage first, were living in that (mattress in the rafters) while we got the rest up. This was during the inflation of the late 70s, so timing and availability of materials wasn’t always what we expected. But we plowed on, emphasis on the plowed. We have a picture of me shoveling snow out of the bedrooms because winter got there first. But between storms, we got it up. It was a hellish winter, record amounts of snow. When my husband was finally ready to put the cap on the chimney, he didn’t need a ladder - just walked up the 16ft snowbank next to the house, and clapped it on. By this time we’d moved the mattress into the house, but no heat yet of course. So we had a very long extension cord keeping an electric blanket on, and my grandfather’s old heavy arctic sleeping bag over that. The thermometer over the bed showed -10F one morning, but we were lovely and warm. Just didn’t want to get up…
Great memories - thanks for bringing them back :slight_smile:

I recently watched this four part series about Vermont during the Revolutionary War. If our coming collapse enfeebles the Federal government (which I’m actually hoping for), what we get may have many similarities to the struggles of the people of Vermont from 1775-1785. The average person in America (today’s poor, working class, middle class and upper middle class) would be extremely affected by this kind of chaos and conflict if it struck where they live. A number of commenters have asked for more PP content on just that kind of scenario, as opposed to how do the top 10% cope with what’s coming. If that’s what you’re interested in, watch this four part documentary (only about an hour) and then spend an hour considering the implications for you if something akin to it happened to you over the next ten years. I found it chilling and quite plausible, and I think you will too.

It’s a great group and these are all people I follow so it was neat to hear them going back and forth. I’m not an “investor” but I do think keeping an eye on where the money goes is a good idea, for a heads up about how the larger world is doing and where it’s headed. I strongly second davedish’s comment that we’d be better with audio and still images than losing chunks of it because of trying to be higher tech. Presumably you can’t even get a transcript of this because the lost bits really are lost.

Great discussion. To me, there were two key takeaways that i hadnt heard that clearly before. One is to support local businesses if you can. I think that is a fantastic win-win that we should all strive for. It made me order take out dinner tonight :slight_smile:
Secondly, I can seen Grant’s point about accepting certain things rather than getting al fired up about them. There is A LOT to be agitated about these days and I would agree that can suck a lof of energy out of you. Just my 2*(1/100 oz)…

vshelford…you are welcome! Great story and confirmation that I will NOT take the risk (LOL) because I am an old construction Man and I can’t see myself walking up a snow bank to cap my chimney! That was hilarious! Thanks for sharing, you brought levity to our home with your comments and it is always welcome during these times to just laugh allowed and I did. I have always loved living in wide open spaces, meaning no people but lots of land and critters. I lived in the City until married and I lived there with 12 other Brothers and Sisters, Mom and Dad and half the neighborhood. My favorite place in the house was a claimed little closet where I could go, shut the door and lock it! It had a small window so that I could watch the Pigeons roost at the very height of the roof. I could watch birds all day, same with squirrels, sooooo relaxing. I feel if the critters call my place home then my environment is healthy and is our greatest compliment. This goes for butterfly’s, bee’s and all beneficial insects. Their all beneficial are my thoughts. Our mind set is to always leave more than we take. Chop a tree down then plant two, that sort of thing and store extra’s for the repairs of tomorrow. If I see anything at the flea markets that will be useful for repairs in the future I gather it up. I have bought old doors that have been in many homes that I will use on the interior. All are 13/4 inches x 36" and in good shape but all are different period pieces nearly 100 years old. I will use them in my Cabin and have that lived in look, rustic from the start! I’ll save a boat load, hang them myself and use the savings on something else. Doors have a living spirit all there own I think, and just seeing a well crafted door makes me happy. I bought one door that has Principle Office on smoked (hammered) glass! Of course that will be the Master Bedroom bathroom door. Maintenance of everything is critical so that year in and year out repairs are made cheaply and blends with the distress that Mother Nature puts on everything. For example: Cedar siding ages as it oxidizes over the years. I don’t want a siding repair to look new with all others aged so I age the wood but out of the full on elements. This way everything is repaired and looks seamless. Anyways, thank you. I have a question: isn’t walking out your door so much more alive because you know why and the how’s things were done and it just makes you more aware and at peace. That’s what this site has provided me for over 12 years now. Plus, talking with like minded Folks like you always makes for an enjoyable visit. Better than the walleye stares of the unenlightened that are drifting… Be good. Peace

Mike Maloney spoke about hyperinflation in Bulgaria in 1997 and that someone was able to pay off the mortgage for 100 USD. I’d like to find out more about this, prices and real situation. However, even after hour of googling it I didn’t find anything useful and getting to the point. So, was that a real story? Does anybody have any more information to this theme?

I found the links below. I’m not sure if it contains what you are looking for: tldr. Hope this helps. Btw, the last link is interesting, at one point the inflation was 2000%: 100 dollars would buy you at least twenty fold the amount it used to do, considering the price levels of houses in Bulgeria in 1997, Mike’s story is indeed very plausible.

@DaveDD: unfortunately not, I saw all of those you wrote, and many more, but all info I was able to find was that inflation was there (the peak was 1061%), 1 USD formerly was for 70 Leva (end 1996, before inflation) and then it rose (for a while) to 2200 Leva per 1 USD. Still, for 100 USD you would have 220 000 Leva. I’m not sure, but if 1 USD was 70 Leva in good times, it would be hardly enough to buy a house or flat or pay you off the mortgage for 100 USD …

Hi mahroch,
As you made me curious, I looked into property prices. Indeed very difficult to find. I did find this rather anecdotical piece of information wrt property cost:
This is recent information, but it seems to me that 100 dollar in 1997, especially during hyper inflation would have bought you something in rural areas.

This virus is about 8 months old, it’s not even out of diapers yet and look the damage it has done to the economic, I don’t want think about what happen when it hit the terrible two’s

well, maybe, and the maybe is still a weak speculation. but for sure 100 USD had some value if you use it in tiny niche of the hyperinflation. and even though the debt is nominal, I doubt that a bank agreement for mortgage would be so sieve and not bonded to inflation so you can pay it off with 100 USD. For me to consider it as useful information rather than unverfiable tidbit would need some more information about the case …