The Capitalist Investor - Episode 224

The latest Capitalist Investor episode where we tackle a blend of economic insights and golf swings! In episode 224, “National Debt, Hot Inflation, and Gold Masters Picks,” our hosts Luke, Tony, and Derek delve into the murky waters of the national debt’s spike to $34 trillion and unravel the intricacies of hot inflation. We dissect the consequences of the Federal Reserve’s monetary policies, opine on potential crisis in future taxes and benefits, and shed light on gold’s rally amid a frenzy of buyers like Russia. With an unexpected segue, we weigh in on gold bar sales at Costco and the logistics of such a hefty purchase. But it’s not all economics! We can’t help but share out laughter at our disinterest in golf before switching gears to make our predictions for the upcoming Masters tournament. Discover our top picks and understand why large caps might safeguard your investments. 📈🏆

The Exploding National Debt and Ignited Inflation Fears

The national debt has surged past an alarming $34 trillion, with a $1 trillion deficit reported in just the first quarter. The hosts engage in a grave discussion about the ramifications of this debt on future taxation and the sustainability of Social Security and Medicare. To add to the complexity, they fear such indebtedness will force the government’s hand in either continuous spending, which could inflate the economy further, or austerity measures that may lead to deflation—a choice between a rock and a hard place for policymakers and citizens alike.

Federal Reserve’s Rate Hikes: A Double-Edged Sword

The Federal Reserve’s monetary policy and its recent rate hikes were a significant focus, especially considering their effect on borrowing costs. The host trio dissect the balance the Fed needs to maintain to contain inflation without derailing economic growth. They contemplate the challenges that investors face in adjusting portfolios to accommodate longer-duration investments, like 30-year treasury bonds, at a time when interest rates are rising.

The Golden Debate: From Costco to Russia’s Acquisitions

In a surprising twist, the recent sale of gold bars at Costco led to an intriguing conversation about the reasons behind people’s inclination to invest in gold during uncertain times. The hosts express humor and curiosity over the practicalities of buying and transporting gold from a wholesale club. Additionally, they touch upon the global scene, noting that gold is not just an individual’s safe haven but also a strategic move by countries like Russia, which has been increasing its gold reserves.

Market Dynamics: Large Caps vs. Small and Mid Caps for Safety

The stock market continues to hit all-time highs, prompting the hosts to analyze what these peaks might signal for future performance. Easing away from the smaller and more volatile players, the consensus leaned towards large-cap stocks for relative safety in the potentially turbulent markets ahead. They encourage listeners to pay closer attention to company earnings rather than the Federal Reserve’s actions as primary indicators of economic health.

Masters Golf Tournament: Predictions and Preferences

Straying from their typical financial discourse, the hosts wind down the episode with some commentary on the upcoming Masters golf tournament. Though lukewarm about golf themselves, they throw their predictions into the ring, favoring players like Jason Day and Joaquin Niemann due to their impressive recent form. They extend the conversation beyond picks, reflecting on the state of live golf coverage and how changes in tour circuits affect the traditional greens.

Keep Listening to The Capitalist Investor:
Episode 15:
Spending Strategies in a Bear Market, Ep #15
Episode 31:
Handicapping the 2020 Election, Ep #31
Episode 47:
11 Investments in Your Home That Pay Off, Ep #47
Episode 63:
Jeff Bezos and Amazon: Past, Present, and Future Ep #63
Episode 79:
7 Ways Biden Plans to Tax American Families (Part II), Ep #79
Episode 95:
5 Beaten Down Stocks to Buy on the Dip, Ep #95
Episode 111:
Special Episode – Talking Energy with Daniel Turner, Ep. #111
Episode 127:
Retail Earnings Tank & What The Heck is Greenflation? Ep. #127