2018 Economy Goes Cold – Inflation Hot – Danielle DiMartino Booth

By Greg Hunter’s USAWatchdog.com 

Former Fed insider Danielle DiMartino Booth is not optimistic about a surging economy in 2018. Booth contends, “We have seen 24 consecutive back-to-back months when credit card spending has outpaced incomes.  That tells you households are struggling to get by.  This is not Eve Saint Laurent handbags and Jimmy Choo shoes.  These are families who are using their credit cards to take care of the necessities, to fill up the gas tank, to buy groceries and fill up their refrigerator. . . . We have seen month after month of subprime automobile delinquencies, and we are starting to see a big tic up in FHA mortgage delinquencies as well. . . . We are at almost 10% (delinquencies) of FHA mortgage loans.  Underlying this sugar high that we will see from all of these hurricanes and rebuilding efforts and wildfires, underneath that, still waters run deep and the economy is not doing well.  We are a consumption driven economy that is weakening underneath.  The sugar high will absolutely wear off in 2018.”

What about the bond market in 2018? Booth says, “We have gone from $150 trillion (in global debt) in 2007 to $220 trillion and counting today.  If you delude yourself into thinking a rising rate environment can be good when we have tacked on $70 trillion of debt in the last decade, you are fooling yourself.  It is an accident waiting to happen, and anyone who doesn’t think that it will take the stock market down with it is more optimistic than I am by a country mile.”

Booth says, along with a “bond market debacle,” the world will see inflation right along with it. Booth explains, “Look at lumber prices, look at the cost of packaging, plastics, raw materials, the producer price index . . . is at a six year high right now.  It’s called the mother of all margin squeezes.  Companies are suffering.  We have inflation.  We have very real inflation, and it is hitting corporate America between the eyes.  We have seen inflation happening, and we continue to see it happening . . . Rental inflation is off the scale. . . . Inflation is up for 2018, and it has been up.  We can have deflation and inflation at the same time.  If all of this debt that has built up, especially for households, if they are allocating more of their income to servicing debt, then they have fewer dollars to spend on other things.  So, you are going to have deflation and inflation at the same time.”

What does the regular guy on the street do? Booth says, “Figure out a way to have exposure to precious metals.  Put your bubble vision on mute.  You do not have to be invested in the market.  That is a fallacy.  Take what you have and pay down your debts.”

Join Greg Hunter as he goes One-on-One with former Fed insider Danielle DiMartino Booth author of the popular book “Fed Up.”

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After the Interview: 

Danielle DiMartino Booth said after the interview, “I am scared because we (America) are in a really bad place right now. People (in the markets) are going to get shellacked.  They have no idea what the momentum is going to look like on the downside.”

There is always some free information and analysis on DimartinoBooth.com. If you want to subscribe to the “Money Strong” newsletter, click here.  Booth also offers consulting services for both individual investors and companies.  Right now, until January 5th, Booth has turned off the pay-wall at DiMartinoBooth.com.  So, you can see all of the newsletter for free, just click here.

If you haven’t gotten a copy don’t forget Booth’s very popular book “Fed Up.”

 

 

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Comments
  1. Anthony Australia

    What a brilliant way to start 2018!
    Thanks Greg.
    I’m not sure if 2018 will bring something that could cease Australia’s 26 year record without a recession.

    • FC

      Come on AA you really think Australia is resilient against what is about to happen.
      It’s a front fender economy shiny on top, sh!t underneath.

      • AA

        Na, I think the numbers have been fudged for years and as you say the the States, we are being “Duped”

        http://www.smh.com.au/business/the-economy/gdp-australia-grabs-record-for-longest-time-without-a-recession-20170606-gwm0o2.html

        • Colin - 'the farmer from NZ'

          AA
          We sure are being duped….
          GDP “growth” is always quoted as a nominal figure, ie it is not inflation adjusted.

          If the modern world was truthful about our economies we would admit that many of our countries GDP’s are in decline when adjusted for inflation. Consequently, these countries are in recession year in year out….guess what this equals….thats right…. DEPRESSION!

          Cheers
          Col

      • Bob.C.

        Here is the ever old reliable Holden FC….

        https://en.wikipedia.org/wiki/Holden_FC

        A gem from the 1960’s, mum and dad had one, remember it well. On current form it would give the current Australian Economy an absolute thrashing, leaving it eating dust !

  2. Paul ...

    If inflation is up and rising as Ms Booth says … don’t stocks usually rise with inflation?

    • Paul ...

      However … something “sure to be taken down” will be all the pedophiles … as explained in this very interesting analysis of the Mueller prosecution of Trump! … https://www.youtube.com/watch?v=Ke3H1OtJY58

      • Paul ...

        The stock market usually crashes when we get an inverted yield curve (and we are close to inverting) … however … the Fed is sitting on $2.45 trillion of Treasury securities and $1.76 trillion of mortgage-backed securities … and can push up long-term yields by doing a “QE Unwind” … thus preventing long term yields from falling below short term yields … thus the Fed can increasingly sell its Treasury and mortgage-backed securities holdings “to keep the yield curve from inverting” … so the Fed’s “balance sheet normalization” which will accelerate as 2018 progresses (in the first quarter the Fed is scheduled to sell $60 billion in securities, in Q2 $90 billion, in Q3 $120 billion, and in Q4 $150 billion … for a total of $420 billion) … and this selling is scheduled to increase to $600 billion in 2019 … so if the Fed can keep the yield curve from inverting by driving up long term interest rates to keep pace with rising short term Fed Fund rates … they can keep the stock market rising for Trump by preventing the yield curve from inverting!!

        And if the Fed wants to spook the markets into jacking up long-term yields, it could accelerate further its “balance sheet normalization.” For the first time in history, the Fed can actually do something that will drive up long-term yields.

        • Paul ...

          So from the looks of things … until the Fed is through doing its “QE Unwind”… an inverted yield curve (and hence a stock market crash) can be prevented by the Fed … and because they have $4.21 trillion dollars to play with this can go on for a long time as inflation roars ahead driving gold and silver prices higher and higher!!

          • Paul ...

            This is not to say rising short term rates and rising long term rates will not be a big negative for current holders of bonds and those in the market looking to purchase real estate by taking out a mortgage … those who buy real estate with cash or already own (unencumbered real estate) should do fine because like the stock market it will rise in price along with inflation … so it is current bond holders who are in the cross hairs … they should be immediately looking to transfer out of their bonds … and into physical unemcumbered gold and silver (which will also rise with inflation) to preserve their purchasing power!

            • Paul ...

              Hopefully those running pension funds will sell their bond holdings soon enough to avoid big losses and purchase gold and silver at current cheap levels to protect the common people who depend on their pension to live … but to be on the safe side common people should be putting gold and silver into their private IRA’s because depending on pension fund managers to invest in gold and silver will probably be like waiting for people to be good and love their neighbor as thyself!

    • lucille Johnson

      Zimbabwe market went up 10000 percent due to inflation and when you cash out you could buy two eggs. Look at Venezuela their market went up 700 percent The money is worthless

    • Frederick

      No because as inflation runs hot they traditionally raise interest rates which is negative for stocks Except this FED is NOT doing anything traditionally

      • Paul ...

        Frederick … To trigger a sharp rise in inflation expectations the Fed would have to engineer a breakdown in long-term bond prices … that is what “QE Unwind” is for … so the hand writing is on the wall … the Fed is creating conditions for a massive bull market in gold and silver!!

  3. KeZa

    This is something else then Mister Pipo Clif High his BS. Sorry for the language but everyone that tells that we are good is stinky like sh*t.

    Kz. from Belgium

    • Williamson

      A great interview with Danielle DiMartino Booth. But, Mr. F0x, you need to re- watch the episode, because it had nothing to do with the Bible.

  4. genocidal politician

    its a wartime economy still, US remains at war against terror and drugs,
    these are the two man pillars of national resource allocation and focus,
    it seems,

    • Frederick

      At war with terror and drugs? You’re joking right?

      • mad matt

        We’ve been at war with terrorism for over 12 years, and America has been in a war on drugs for over 30+ years

        • Frederick

          Keep telling yourself that brother It’s exactly what TPTB want us to believe

        • Paul ...

          Manufactured Wars … is how we have been surviving (like those who survived on a mountain top after their passenger plane crashed by eating the dead bodies) … the only difference between us and them is that “we purposely kill and murder” the bodies of human beings in the constant wars we create to to live and survive and get fat on the death of others … so we are “the grossly immoral” people … not those airline passengers who had nothing to do with the death of the passengers they ate to survive!!

  5. NH Watcher

    “Pay down your debts” is the strongest comment she made, and the most practical for the majority of us. While investing in precious metals is the only remaining solid investment, I still have not heard ANY guest comment on how, practically speaking, these metals will be redeemed in the long, or more importantly, short term. In the short term, therefore, being debt-free (and having a reasonable amount of cash on hand) seems the most viable for the “in between” phase from one economic order to another. Are “debtors prisons” of the 19th century going to be returning? I think we all know the answer to that. The new economic order simply will NOT fund credit consumption or debt accrual as now.

    Laugh at him if you want, but Ben Fulford’s latest newsletter speaks equally ominous for 2018:

    “The movement and related hijacking of gold is linked to some sort of major financial event due sometime in the first half of this year, a separate CIA source says. This source, who has provided us with both big scoops and disinformation in the past, says the financial system will be completely shut down, the stock market will drop to zero, bank accounts will be emptied, and ATMs will shut down when this event happens. This will be followed by the launch of the new gold-backed system, this source says.”

    And I add: know your neighbors, know who will protect you versus “rat you out” for their next meal. Realize who you are when everything is taken away from you, since she also said having a decade more of this economic fantasy system (overvaluation) is extremely doubtful.

    What I am preparing for myself is the “in between” phase, because I do not see the leaders of new economic order having any use for me, or most around me. We will all be exterminated as part of the “useless eaters” (or deplorables). My only saving grace is my relationship with our Lord Jesus Christ. They may kill my body, but only He will save my soul.

  6. JC Davis

    Greg that was much better then I expected. You packed in the questions. I cant wait for the comments.

    • Lore

      Fascinating discussion. This is precisely the kind of analysis that should be broadcast widely through all media. Fat chance! As usual, most people will end up scratching their heads, wondering what happened, and accept whatever narrative is spoon-fed to them by the usual corrupt sources.

      I understand that this is the first interview with this guest. Another time, it would be interesting to just introduce her, bring forward a couple of key issues, and then just stand back and let her talk, so as to enable some of the juiciest in-depth analysis. As it stands, she spent half of the interview repeating herself. It has its place, but we need to get past that, particularly with brilliant guests like this one. Anyway, thank you, Mr. Hunter! This was fascinating.

  7. Vin

    One guest says good news, the next says bad news. Hope for the best and be prepared for the worst. She did say one solid fundamental which is pay down your debts. I am concerned about the elderly debt crisis, magnified by the coming pension crisis. Will the elderly benefit from deflation? What happens to social structure when it’s 30 below zero and nowhere to go? I have friends who live with credit cards and it is astounding how much is going to interest and how little to principal. Think about that going into retirement with a fixed income. Always enjoy your guests Greg. God bless.

    • Paul ...

      Vin … if what the Fed has in mind … INFLATION … not only will “our debts” be easier to pay off … but so will the National Debt!!