Julian Brigden: The Catalyst for a Powerful Metals Bull Market is in Sight

Tom welcomes back Julian Brigden, co-founder of Macro Intelligence 2 Partners, about the current economic condition referred to as 'macro purgatory.' Brigden warns of an impending recession following a tightening cycle, with only an 8-10% chance of a soft landing. He underlines the significance of employment data, specifically unemployment rates, which can precede a recession and could result in significant rises, potentially causing bond markets to rally while equities weaken. The Fed's failure to meet its stated goals complicates matters as Treasury and Janet Yellen have counteracted their efforts. Brigden discusses his perspective on inflation trajectory over the last few years and identifies significant factors such as the breakdown of globalization, a resurgence of the cold war, demographic changes, and the impact of COVID-19. He explains that goods inflation is at its second lowest level in 65 years, while core services remain high. If core service inflation does not decrease significantly, it could indicate weakening wages and lead to recessionary signals despite falling inflation rates. The challenges faced by the Fed in making monetary policy decisions due to lagging and imperfect metrics like employment data, GDP, and CPI are also discussed. Julian expresses optimism about precious metals as a potential investment during this economic period. Brigden shares his perspective on investment strategy shifts towards precious metals, emphasizing the significance of recognizing market weakness and the Fed's response. Julian also mentions the historical trend of investors being fully invested during strong markets, leading to a lack of liquidity during downturns, and discusses potential impacts on bond yields when the Fed inevitably intervenes. Additionally, he touches upon geopolitical risks such as uncertainty surrounding the next U.S. presidency. Timestamp References:0:00 - Introduction0:40 - Macro Purgatory5:10 - The Fed Vs. Treasury7:46 - Goldilock Periods13:08 - Inflation Calls & Factors21:30 - Fed & Curbing Labor25:53 - Lagging Metrics & Politics34:26 - Markets & Pricing Concerns41:00 - Metals & Low Liquidity43:47 - Metals Potential & ETFs49:13 - Miners & Capital Rotation53:45 - Risk Vs. Returns & PMs58:24 - This Time is Different59:58 - AI Usefulness?1:01:07 - Fed Cuts & Bonds/Dollar1:07:00 - Wrap Up Talking Points From This Episode * Brigden predicts an impending recession with low chances of soft landing; employment data is crucial. * His thoughts on what may spark further interest in miners and metals. * The Fed's failure to meet goals complicates matters as Treasury and Janet Yellen counteract efforts. * Core services inflation could indicate weakening wages, leading to a potential recession despite falling rates. Guest Links:Twitter: https://twitter.com/JulianMI2Website: https://mi2partners.com/Substack: https://mi2partners.substack.com/ Julian Brigden is the Head of Research at Macro Intelligence 2 Partners, a firm he co-founded in 2011. He leads a six-person team of research and market professionals to publish independent macroeconomic research that is both ahead of market consensus and timely. Julian has over 30 years of experience in financial markets including positions in market and policy focused consulting to institutional investors as well as FICC sales. Julian is a trusted advisor to many top money managers who use MI2 Partners’ research to guide their investment process.