October 29, 2024 • 9 mins
Here Come the Bond Vigilantes! www.watchdogonwallstreet.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.
Speaker 2 (00:16):
The bond vigilantes are coming. I'm not saying they're coming,
I'm saying they're here. Yeah, we mentioned this, We've talked
about this in box full with questions, doing interviews, various
different programs out there. Everybody wants to know what a
world is going on. Oh no, no, it's it's seven
(00:40):
percent on the back up with the mortgage rates. Again,
what am I gonna do? It? S They sound like
Johnny Fontaine from the First Godfather?
Speaker 1 (00:48):
What do I do?
Speaker 2 (00:49):
Godfather? What am I gonna do?
Speaker 1 (00:50):
Well?
Speaker 2 (00:51):
Listen, everybody, I want you to understand that it is
our collective of fault. Get that our collective fault based
upon the choices that we have made as a society,
the people we vote for the stuff that we demand
(01:12):
for government. That's why rates are where they are. Now,
Why again, I told you, I actually looked it up.
Something similar happened in nineteen eighty nine when the FED
lowered rates, and I'm sorry I couldn't remember that, but
(01:33):
I was finishing up high school at that point in time.
It's not to the extent, nearly to the extent that
what we're dealing with right now where the Federal Reserve
comes out, and again, yes, we're lowering by fifty basis
points in the bonds market, It's like, screw, no way,
(01:57):
we don't care. We see the country's fiscal situation. We're
aware of the country's fiscal situation. We see what's happening
around the globe. And if you people there in the
United States want to continue to borrow the way do
you are and spend the way that you are, well,
guess what we want to get paid? We don't. We
(02:19):
don't want this. You know you're thirty five trillion dollars.
Is the request not reasonable? I actually watched this morning,
got Steve Lessman on CNBC, and he obviously he gets
into arguments with the you know, conservative uh Rick Santelli
on a regular basis. He's like, you know, I call
all bond auctions a's and Becky's like, wait a second,
(02:43):
just because they sold them all this is like pass
fail for crying out loud, how do you get an
a if you're yeah, you sold all the bonds, but
you're selling them at higher rates and the taxpayers are
paying the interest on that debt. But again, I guess
according to Steve, it's okay because we're getting all this
great government stuff like what exactly like what the bond
(03:09):
vigilantes are here? Now? What makes this different? Last week
we talked about the European debt crisis with the they
used to call them the pig countries Portugal, Italy, Greece
and Spain, and Ireland was in there as well. It
was pigs. Yeah, we again are in a unique position
(03:39):
right now, is because the world is wash and debt
countries are spending a fortune. I just got word that,
you know, China, it wants to push for some one
point four trillion stimulus plan because your economy is in
a whole Yeah, want you to put this in a perspective.
(04:01):
I'm got to share what you some numbers to get
your arms around. Okay, US government we got go close
to six point eight seven trillion dollar economy, third largest
in the world. That's the US government. The US government.
The size of our government six point eight trillion dollars
on its way to seven, would be the third largest
(04:21):
economy in the world. Government spending is currently up fifty
percent over the past ten years. Fifty percent now again,
go back ten years. That's Obama, Trump, Biden, They're all responsible.
(04:43):
The world's third largest economy, growing nine percent annualize this decade,
faster than India or China. And this is all funded
by debt. Again, you take a look around the globe,
take a look at Europe and their situation right now.
Because a dollar continues to get stronger, the US dollar
(05:06):
share of global payments hit forty nine percent, that's the
most in the past twelve years. This according to Swift data,
the share the Euro's share of payments has gone from
thirty nine percent to twenty one percent, the lowest in
a decade. The Chinese one increased from two percent to
(05:30):
five percent. Now, obviously does this includes some transactions that
were done outside of the Swift system, and that most
certainly is taking place because of sanctions that have been
put on Russia. But again, we are in a unique position.
There was an interesting column talking about Europe and how
bad their situation is right now, and you take a
(05:52):
look on the growth that Europe has at this point
in time, and how they're just stuck in so many
ways as far as growth is concerned. How they have no, nothing,
nothing when it comes to any sort of really new
technologies out there. There's seven right now, seven trillion dollar
(06:18):
companies around the globe, and six are tech firms that
are based out of the West coast of the United States.
The seventh one is the Saudi oil company a Ramcome.
That's that's the reality. What are you guys doing over
there in Europe? Nothing? Nothing. They might be happy, they
(06:44):
might i get happy with their lifestyle and being you know,
a tourist destination, an open air museum. Again, it's kind
of funny as you're getting pushback in many of these
countries because of the amount of tourism that's taking place.
They're taking offense the fact that they're turning themselves in
many places into Disney World. But that's that's what they do.
(07:08):
That's what they do. Yeah, they have certain industries out there,
was much when it comes to food and clothing and
luxury where they do a phenomenal job. But again, you
nothing new, nothing in hyper growth industries. So their economy
is pretty much stuck. This is this is going back
(07:33):
to the early years of the Obama administration, and I
was yelling and screaming about the money that was being
printed at the debt at that point in time, and
I actually made the suggestion of starting a petition that
we could send to the people the countries around the
globe that we're buying our debt and telling them to
stop doing it. Because you stop doing it, then our
(07:56):
interest rates will go up, and then maybe government will
get in line. Well, rates are going up despite the
fact the Federal Reserve is trying to lower rates. The
world is awash in debt. What does this mean, Well,
that means everyone's situation is getting worse as far as
(08:16):
rates are concerned. Everyone's interest rates are going up. At
the same time, there's no real safe haven that's out there.
Will that allow our government officials to say, eh, no
big deal, no big whoop. Maybe you know again, we
talked about the fact that I was vowing. I think
it was Alan Greenspan that said, hey, you know, we
(08:38):
could just end up, you know, bankrupting these other countries.
You know, we can keep barring until then they keep
borrowing and then they end up just bankrupting themselves. Before
we do none of this. None of this, in my opinion,
is any good. People are wondering why, well, it doesn't
make sense. The wizards of Smart said, well, rates are
going up, well, then the stock market should be going down.
(09:00):
It's all relative, bub it's all relative. We are in
an inflationary environment. I don't care what they've been saying.
We've been in an inflationary environment and with that goes
asset inflation. Have to take that to consideration as well. Again,
(09:21):
bond vigilantes are out and about and they're going after everyone.
Watchdog on Wall Street dot com
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.
Speaker 2 (00:16):
The bond vigilantes are coming. I'm not saying they're coming,
I'm saying they're here. Yeah, we mentioned this, We've talked
about this in box full with questions, doing interviews, various
different programs out there. Everybody wants to know what a
world is going on. Oh no, no, it's it's seven
(00:40):
percent on the back up with the mortgage rates. Again,
what am I gonna do? It? S They sound like
Johnny Fontaine from the First Godfather?
Speaker 1 (00:48):
What do I do?
Speaker 2 (00:49):
Godfather? What am I gonna do?
Speaker 1 (00:50):
Well?
Speaker 2 (00:51):
Listen, everybody, I want you to understand that it is
our collective of fault. Get that our collective fault based
upon the choices that we have made as a society,
the people we vote for the stuff that we demand
(01:12):
for government. That's why rates are where they are. Now,
Why again, I told you, I actually looked it up.
Something similar happened in nineteen eighty nine when the FED
lowered rates, and I'm sorry I couldn't remember that, but
(01:33):
I was finishing up high school at that point in time.
It's not to the extent, nearly to the extent that
what we're dealing with right now where the Federal Reserve
comes out, and again, yes, we're lowering by fifty basis
points in the bonds market, It's like, screw, no way,
(01:57):
we don't care. We see the country's fiscal situation. We're
aware of the country's fiscal situation. We see what's happening
around the globe. And if you people there in the
United States want to continue to borrow the way do
you are and spend the way that you are, well,
guess what we want to get paid? We don't. We
(02:19):
don't want this. You know you're thirty five trillion dollars.
Is the request not reasonable? I actually watched this morning,
got Steve Lessman on CNBC, and he obviously he gets
into arguments with the you know, conservative uh Rick Santelli
on a regular basis. He's like, you know, I call
all bond auctions a's and Becky's like, wait a second,
(02:43):
just because they sold them all this is like pass
fail for crying out loud, how do you get an
a if you're yeah, you sold all the bonds, but
you're selling them at higher rates and the taxpayers are
paying the interest on that debt. But again, I guess
according to Steve, it's okay because we're getting all this
great government stuff like what exactly like what the bond
(03:09):
vigilantes are here? Now? What makes this different? Last week
we talked about the European debt crisis with the they
used to call them the pig countries Portugal, Italy, Greece
and Spain, and Ireland was in there as well. It
was pigs. Yeah, we again are in a unique position
(03:39):
right now, is because the world is wash and debt
countries are spending a fortune. I just got word that,
you know, China, it wants to push for some one
point four trillion stimulus plan because your economy is in
a whole Yeah, want you to put this in a perspective.
(04:01):
I'm got to share what you some numbers to get
your arms around. Okay, US government we got go close
to six point eight seven trillion dollar economy, third largest
in the world. That's the US government. The US government.
The size of our government six point eight trillion dollars
on its way to seven, would be the third largest
(04:21):
economy in the world. Government spending is currently up fifty
percent over the past ten years. Fifty percent now again,
go back ten years. That's Obama, Trump, Biden, They're all responsible.
(04:43):
The world's third largest economy, growing nine percent annualize this decade,
faster than India or China. And this is all funded
by debt. Again, you take a look around the globe,
take a look at Europe and their situation right now.
Because a dollar continues to get stronger, the US dollar
(05:06):
share of global payments hit forty nine percent, that's the
most in the past twelve years. This according to Swift data,
the share the Euro's share of payments has gone from
thirty nine percent to twenty one percent, the lowest in
a decade. The Chinese one increased from two percent to
(05:30):
five percent. Now, obviously does this includes some transactions that
were done outside of the Swift system, and that most
certainly is taking place because of sanctions that have been
put on Russia. But again, we are in a unique position.
There was an interesting column talking about Europe and how
bad their situation is right now, and you take a
(05:52):
look on the growth that Europe has at this point
in time, and how they're just stuck in so many
ways as far as growth is concerned. How they have no, nothing,
nothing when it comes to any sort of really new
technologies out there. There's seven right now, seven trillion dollar
(06:18):
companies around the globe, and six are tech firms that
are based out of the West coast of the United States.
The seventh one is the Saudi oil company a Ramcome.
That's that's the reality. What are you guys doing over
there in Europe? Nothing? Nothing. They might be happy, they
(06:44):
might i get happy with their lifestyle and being you know,
a tourist destination, an open air museum. Again, it's kind
of funny as you're getting pushback in many of these
countries because of the amount of tourism that's taking place.
They're taking offense the fact that they're turning themselves in
many places into Disney World. But that's that's what they do.
(07:08):
That's what they do. Yeah, they have certain industries out there,
was much when it comes to food and clothing and
luxury where they do a phenomenal job. But again, you
nothing new, nothing in hyper growth industries. So their economy
is pretty much stuck. This is this is going back
(07:33):
to the early years of the Obama administration, and I
was yelling and screaming about the money that was being
printed at the debt at that point in time, and
I actually made the suggestion of starting a petition that
we could send to the people the countries around the
globe that we're buying our debt and telling them to
stop doing it. Because you stop doing it, then our
(07:56):
interest rates will go up, and then maybe government will
get in line. Well, rates are going up despite the
fact the Federal Reserve is trying to lower rates. The
world is awash in debt. What does this mean, Well,
that means everyone's situation is getting worse as far as
(08:16):
rates are concerned. Everyone's interest rates are going up. At
the same time, there's no real safe haven that's out there.
Will that allow our government officials to say, eh, no
big deal, no big whoop. Maybe you know again, we
talked about the fact that I was vowing. I think
it was Alan Greenspan that said, hey, you know, we
(08:38):
could just end up, you know, bankrupting these other countries.
You know, we can keep barring until then they keep
borrowing and then they end up just bankrupting themselves. Before
we do none of this. None of this, in my opinion,
is any good. People are wondering why, well, it doesn't
make sense. The wizards of Smart said, well, rates are
going up, well, then the stock market should be going down.
(09:00):
It's all relative, bub it's all relative. We are in
an inflationary environment. I don't care what they've been saying.
We've been in an inflationary environment and with that goes
asset inflation. Have to take that to consideration as well. Again,
(09:21):
bond vigilantes are out and about and they're going after everyone.
Watchdog on Wall Street dot com
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