Jim Welsh on Booms, Busts, and Borrowing Costs; Also, Dying of Money Reprise Interview

February 23, 2024 – Following this week's recap, the Financial Sense Newshour features an exclusive conversation with Jim Welsh from Macro Tides, delving into the correlation between market fluctuations and long-term interest rate trends. Jim posits that we are witnessing the nascent phase of another prolonged ascent in interest rates, driven by unparalleled fiscal expenditures by the US government, which further amplifies the fervor surrounding the prevailing AI frenzy. Subsequently, in light of current developments, we have chosen to revisit an interview with the esteemed author of "Dying of Money," a highly recommended read for investors seeking comprehensive insights into the ebb and flow of inflationary cycles.

See Jim Welsh Macro Tides chart pack for today's interview

Today's show: An AI Nvidia-led mania is driving stock markets to new records. All major indexes added at least 1.3% this week. Driving this week's gains were an earnings release by Nvidia (NVDA) which topped revenue forecasts. No other company in the history of the stock market has gained so much in so short a period of time. It took Apple 42 years to reach $1 trillion. It took Nvidia 9 months to go from $1 trillion to $2 trillion. Nvidia's stock market capitalization is now worth more than the GDP of Canada. In the words of Goldman Sachs, Nvidia is now the most important stock on planet earth. Experts are now predicting the rally in these stocks could continue for years to come, making them more valuable than some of the largest economies in the world. In other news, interest rates continue to rise with the 2-yr note hitting close to 4.7%. Last October it hit 5.2% and we could be going back up to that level again as massive federal deficits are causing the Treasury to raise almost three quarters of a trillion in Q1 alone. Finally, this marks the 14th consecutive week that gold has held above $2,000 an ounce as massive central bank buying of gold is acting as support for gold prices. Which brings up the question: what do they know that we don’t?

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