Inflation Data: The latest CPI report showed a higher-than-expected increase, raising concerns about potential stagflation, although the speaker disagrees with this assessment.
Labor Market Concerns: Recent negative labor market data, including initial jobless claims and non-farm payrolls, suggest potential economic challenges ahead.
Interest Rates: Contrary to stagflation fears, interest rates, particularly the 10-year Treasury, have not risen as expected, indicating the market does not foresee runaway inflation.
Stagflation Debate: The speaker challenges the notion of stagflation, arguing historical data shows inflation typically decreases during recessions with rising unemployment.
Gold and Miners: Peter Schiff's prediction about gold and gold miners performing well has been accurate, with significant gains in the GDXJ index compared to gold itself.
Investment Strategy: The speaker emphasizes the importance of understanding historical trends and data to inform investment decisions, particularly in the context of inflation and economic cycles.
Monetary Metals: The podcast highlights a service that allows investors to earn interest on gold holdings by leasing it to jewelers, offering an alternative to traditional storage.
Transcript
Well, so we had big news. The inflation data came out today. The CPI report that everybody was anticipating. And let's go over to the calendar, check it out, and see what has happened. And first and foremost, I have to give mad props to my good buddy Peter Schiff that absolutely nailed the move in this specific asset class. Am I talking about gold? Kind of. Kind of, but not really. But then at the end of this video, I'm going to go over some of the things that I think my good buddy Peter has wrong and how this puts the Fed into a very difficult predicament going into their rate cut decision. Okay, so that's what we're going to review. Now, let's go over to the news. Drum roll, please. We see the calendar and expectation month over month was for.3. We got a 04. Yikes. So, is this stagflation? I don't think so. And I'll tell you why. And I think that's what Peter is getting wrong. But we're also going to go over what Peter got absolutely right. And actually, what he got right is probably more important than than where I think he's wrong. All right. So, with some rounding, I'm assuming we've got year-over-year at 2.9, which hit expectations core.3 month overmonth, and year-over-year 3.1. But here we go, guys. Here we go. Look at the initial jobless claims. 263. So, the expectation was for 236 263. So I mean think about all the negative data we have had in labor market just over the last week. I mean, remember Jolts numbers, terrible, ADP numbers, terrible, non-farm payrolls, atrocious, benchmark revisions, horrific. And now we've got a bump, a substantial bump in the initial claims. And a 263 number in and of itself isn't, you know, just recession, pants on fire, but it's all about the trend. We say that on this channel constantly. And the best indicator that I know outside of just interest rates for what's likely going to happen in the economy is the labor market. And the labor market, by the way, is a much better timing mechanism than interest rates. Just the yield curve that gives us it's very powerful tool. But it kind of tells you just the future path of what the expectations are where when the labor market really starts to deteriorate with the non-farm payrolls with the household survey ADP jolts you throw the initial claims in there that's telling you that there are some real problems that are likely going to surface in the very near future. So better timing mechanism and especially if you go back to 2024. Now, I don't want to get too far off on a tangent, but I know one of the bullish arguments for the labor market deteriorating is, well, this kind of makes sense. You can't really put a lot of weight into the June number being negative or any of these revisions because we've had all the the brown people, whatever you want to call them, illegals or legals or whatever. Uh, we've had all of the Mexicans or the illegals, whatever, South Americans. We've had all these people that have left. Trump kicked them out. They're scared. They're leaving, whatever. So, we have no one to do all of the bluecollar work. And so, these jobs just go away. And so, it's not really because the economy is doing bad. It's just because all of these immigrants are going home. And I I don't really buy into that because number one, okay, that's still fewer people working and contributing to the economy and that means whether you like the brown people leaving or not, it that's not really the question. The bottom line is they're spending less money. Therefore, aggregate demand goes down. So whether you think that's good long term or not, over the short run, that's going to lead to decrease in economic activity, especially in an economy that's 70% consumption. But I I'm also very skeptical of that theory because if you go back to 2024, then we we had Biden and obviously he was doing the complete opposite of Trump to the extreme. And back then, if you look at the benchmark revisions, we still had a couple months that were negative. So h how how how do we explain that one? I mean, that's not immigration. That's not foreigners leaving the country or people that whatever. You get what I'm saying? So I I don't put a lot of weight into that idea or that rationalization, let's say, for the data in the labor market getting worse and worse and worse. Okay, so now let's see. Let's go over to CNBC where we get kind of like a mainstream take on it. Uh, here's the inflation breakdown for August 2025 in one chart. They always do this, but it never adds up. I There's There's got to be something I'm missing with these CNBC charts because every single time they have a CPI, I go here and they give me a breakdown and the numbers never make sense. So, I don't Maybe you guys can tell me in the chat what I'm missing. I mean, am I just stupid or like like like right here, food at home, 2.7%. Okay. And then every single thing that they do or every single thing, every single line item they have, if you add all these up or just average them, it's not even close to 2.7%. I mean, just me eyeballing it, it's probably like 7% or 8%. How the hell are you getting 2.7? I I I don't know if they just I don't know what they're doing. Maybe you guys can tell me in the chat or you can let me know in the comments. Maybe they're just listing the items that went up the most and they're not giving us the items that went down that would help better understand how they get to 2.7. But it's like this everywhere. Like look at this. energy negative 1.6. Yet the two things they listed, one was up 13%, the other up 6%. Like I'm no math genius, but I know the average of 13% and 6% ain't negative 1.6. So I I mean you could say maybe this is a month overmonth number and this is annual, but that's not that's not what they're doing here. At least no, that's not what they're doing anyway. So let's just whatever. We we'll let the BLS deal with that nonsense. Here we go. Oh, of course tariffs contribute to rising good uh good prices, economists say. So, of course, at CNBC, they have to blame Trump. They have to blame Trump for something. So, the CPI tracks how quickly prices rise or fall for a basket of consumer goods and services from haircuts to coffee concert tickets. Inflation is reigniting largely due to reinflation for consumer goods, said Sarah House, senior economist at Wells Fargo. Prices for core commodities, excluding food energy, rose 1.5 uh August fastest annual pay since May of 2023. Excluding the surveillance sickness and aftermath, core quantities haven't hit that quick rise since 2012. And then just more blaming it on Trump. Blaming it on Trump. Okay. Okay. Okay. Uh the fact that we're seeing some of the largest tariffs since the 1940s, I think is certainly a part. Okay. More more bad. Orange man. Bad. Okay. More of this. So they talk about personal finance. I don't really care about that. What I thought was interesting is the prediction made by Xandy. I thought I had that highlighted. But basically he said he expects this to continue in for the next year. In other words, for the CPI to go higher and higher and higher and higher and higher and higher, not just stay above the Fed's target as far as overall inflation, but the actual inflation rate ramping up. And I I'm sure he's blaming that on on tariffs or the pass through effects of tariffs tariffs. But this is where I completely disagree. So, this would be the stagflation argument where I I would push back on kind of uh Peter's overall view. And it looks like the view of this Xandy fellow. Uh maybe it was up here. There you go. Inflation's uncomfortably high and it's accelerating, said Mark Xandandy. I think we should expect a further acceleration. So, not just a further uh not just more inflation prints that are higher than where the Fed would like them, but an actual acceleration of prices. So, they're going So, we've got a let's say a 2.9 CPI this month. That's going up to 3.5, going up to 4.5, going up to six, going up to eight, going up to 15. And pretty soon it's just going to be wildly out of control. and the Fed isn't going to be able to raise rates because that's going to crush the economy further. This is the argument that you get from uh probably Mark Xandy and it's definitely the argument that you get from uh my good buddy Peter. So now let's go over what's h happening in interest rates because interest rates are telling a much much different story as far as stagflation. They they are not screaming stagflation. They're screaming the act the opposite of stagflation. And this really quite frankly caught me off guard because when I saw the CPI print this morning, I would have assumed the long end of the curve would have gone up uh at the very least been flat and that is not what we saw. So let's start with the 10-year Treasury that right now we're trading at 4.02 02 which is almost shockingly low based on a the narrative and you know that interest rates are just going higher and higher and higher and higher and higher and higher and higher and that it's all because of debts and deficits and you know you I don't have to revisit that. I talk about that on this channel all the time. Um but when you look at the actual chart you know we'll do year-to- date. Um, I mean, that's that straight down. And even with the 10-year Treasury, I mean, we could do three years. Uh, we do a three-year chart and we're up uh I mean, we're up 50 basis points, but that's over the last three years. I mean, think about what the debt and deficits have done over the past three years. So, when you look at and then going back to just uh 2022, no, wait a minute, 2023. So Q3 of 2023, I we're almost 5%. On the 10-year Treasury, and since that time, we're down 100 basis points. And by the way, intraday, let's go back to that chart. There were points when, as you can see right here, the 10-year Treasury was trading sub 4%. Sub4%. So, what this is telling you is that the market is not expecting stagflation. In other, and let me be clear, I'm not saying the market isn't expecting inflation to be higher than the Fed's target. So, we've got to define terms because when most people talk about stagflation, um they're talking about not just prices being slightly higher than where the Fed would like them, but prices getting out of control to where, like I said earlier, they're going higher and higher and higher and higher and higher. Right? And by the way, if your definition of stagflation is just prices being higher than the Fed's target, that doesn't make a lot of sense to me because we look at the CPI rate. In fact, let's do that right now and then we'll come back to interest rates. So, this is a chart that I want to go over here in a minute, but let's let's fast forward. That's GFC. But let's fast forward to where the CPI ah come on red line. There we go. So the CPI in you can see is pretty much the same. I mean 2017 181 19 just under 2%. So right here as you can see on the chart we're at 1.7. All right. Was anybody talking about stagflation back then at 1.7? No, not really. We're talking about stagnation is what we were talking about back then, not necessarily stagflation. So I mean if the and let's just use the CPI as a proxy for the Fed's target. So if the inflation rate was at the CPI was at 2.3 instead of 1.7, would we call that stagflation? I mean, I don't know. We're talking about 50 60 basis points here. Now, if that was at uh 8 accelerating to 9 going to 10 going to 11, absolutely. Now, we're talking about stagflation, especially if the unemployment rate is very high. But that that's why I I don't really I don't like the term stagflation in reference to inflation just being higher than the Fed's target. But I don't think that's the way the majority of people use it. And I don't want to put words in in my good buddy Peter's mouth, but when he talks about stagflation, I I I think it's safe to assume that he's talking about inflation actually accelerating and getting higher and higher and higher over the next call it 6 months and the next year as the labor market deteriorates further. That's something we both definitely definitely agree on. Okay. So now let's go back to interest rates. Look at the Oh, that's the dollar. And we've got the 2-year. Now, we had a little bit of a bull flattener today where the two-year is down slightly. Uh, but the 10-year was down more significantly. So, you get that the long end going down a little bit more than the front end. It's it's bull because both interest rates are going down. But uh where we saw I think probably the biggest move was in the 30 the 30-year which is why if you're just for me interest rates being one of the best inputs or predictors of longerterm growth in inflation uh nominal GDP whatever you want to call it uh the the 30-year just plummeted today. So down four basis points but look at this chart. It's just it's it's it's nothing but down as far as the yields. In fact, if I wasn't doing this video right now, I would probably That's tempting. That's very tempting right there. But we'll have to save that for Rebel Capitals Pro. Okay, so now let's go into where Peter just nailed it. And kudos to my good buddy here. And like I said, I think this is probably more important than the stagflation call because this is far far far more actionable. And what I'm talking about and what we used in that thumbnail, what were the miners? I mean, Peter man, did he call this? He was talking about on his podcast that gold's going up. I Peter always talks about gold going up. Uh that's nothing new. But what is new is I don't remember when it was but he was talking about this rotation um into the gold miners and into silver or maybe not rotation probably isn't the right word the cycle the way the cycle typically plays out where you have gold going up and then you have the miners really catching up to gold and then surpassing it as far as a percentage increase and then silver doing the same thing. And if we look at let's just do a let's do a six-month. So 6 month uh the GDXJ is up 63%. 63%. And let's look at the GLD just using that as a proxy. Let's look at Trading View. Just so we're comparing apples to apples and let's do a six-month there, 21%. See guys, this is exactly what Peter was talking about. And uh this is why uh back probably a month or two ago, I actually sold some of my gold and parlayed that into the GDXJ was really to just kind of play this this catchup uh to gold trade. And obviously that's worked extremely well. Another thing that we were talking about in Robo Capitals Pro. But now let's go over to this stagflation argument because a lot of people would say, well, the reason gold is going up is because it's predicting stagflation or it's predicting, you know, an acceleration of consumer prices in the future. I don't agree with that. I I don't see any when you go back and look at charts over history, I don't really see a strong correlation at all with uh gold and the inflation rate although over long periods of time obviously gold does a great job of maintaining its purchasing power. And so a couple charts that are one I discussed this yesterday but we didn't go over the chart which uh once again I don't have up but really if you look at 2009 2008 actually we can pull up CPI. Let's do that guys. Sorry we're kind of bouncing around here but I think it's relevant to what we're talking about. So look at this uh red line and this is the CPI. I don't know why this thing keeps bouncing on the black line. I wish I could delete one of these things, but unfortunately I can't. There we go. There we go. So, what we're looking at here is December 2008, and this is when the CPI was at 0.03. So, basically 0%. And then look at the trend here. The trend is mega mega mega. Not just disinflation, but deflation. In fact, we went from this was really shocking because we went from the CPI being 5% plus in June July of 2008 to it going straight down to zero to then it going down negative where the CPI was negative negative 2%. In other words, 2% deflation not disinflation deflation. So in this environment, you would assume that gold would have got shellacked, but what did it do? It's going straight up. It was hitting all-time highs. So my point there is that number one, gold doesn't really have a great correlation with inflation, although over long periods of time it really maintains its purchasing power. And often often it has an inverse correlation with inflation with the CPI assuming that the stuff is really hitting the fan. And why is that? Like my good buddy Doug Casey says, gold is pretty much the only asset that isn't simultaneously someone else's liability. So when the stuff is really hitting the fan, what do you want to own? Own, excuse me. You want to own something that doesn't have or has as very as as low a counterparty risk as possible. Okay. So now let's look at this through the lens of the stagflation argument that we're hearing a lot. I hear it just constantly on social media. So let's um where do we want to start here? Let's start in the 1970s because that's the decade of stagflation that everybody always talks about. So, we're going to Oh, I went way too far. Sorry about that. Here we go. 1980 to 1970. Okay, this is close enough. And what I want to do in addition to this is look at a chart of unemployment. So, we're going to go back and forth here, guys. We're going to go back and forth. Let me zoom in just for those of you who are maybe watching this on your cell phone or something. This is really important cuz so many people just they just don't understand this and it's it's it's not rocket science. It's just I don't for whatever reason they don't look at charts or history. Okay, so let's start right here. 1970. Look at this spike in the unemployment rate, guys. We go from 3.9 straight up to 6.1. I mean, talk about the SOM rule being triggered, right? So, and then what happens in 197574 when we get another recession and we go from let's just say 5.4 4 right here in the middle when unemployment really starts to go up and this is June, July, call it the summer of 74 and it just rips higher the unemployment rate till it peaks out in May of 1975. So, let's look and see what happened to the CPI back in the 1970s when we had a recession and economic slowdown and we had a significant softening that's probably understating it of the labor market where the unemployment rate really goes up which is what a lot of people are expecting including myself and uh Peter Schiff. No certainties only probabilities but that would definitely be my base case. um looking at what has happened to the labor market and these revisions and everything that we've been talking about on this channel. So now let's go over or back to long-term trends. And we see that right here 1970, look at the red line, guys. And remember what happened to the unemployment rate right during this time into 1970. What was happening to the unemployment rate? It was going straight up, wasn't it? and we were in a recession and what happened in in the in the decade of stagflation, what happened to the inflation rate as measured by the CPI went down. We go from 6% all the way down to a point where here in 72 we're down to 2.71. That's under where we are today for heaven's sakes. And this was 1972. This is after we went off the gold standard and all that stuff. But then we get a reaceleration right here. And but keep in mind this isn't a reaceleration 2 months later. This is a reaceleration 2 years later, way off into the future. Okay? And then inflation goes up higher, higher, higher. And then what happens in 1974? You guys remember we get the recession. And then in the summer of 1974, let's fast forward June, uh, July. So right in here, what happens to the unemployment rate? Goes straight up, right? We go from just kind of normal level. It's the inflation rate's going up like this and it gets to the point where it's still kind of within the range of normal and then the stuff hits the fan and boom, straight up, right? And what happens to the CPI for the next two years. I mean, and remember the unemployment rate continued to go up into May of 1975. So, look at what's happening to the red line going into May. It's going straight down. Straight down. And then what does it do? It goes straight down all the way to November of 1976. So you're looking at basically again two years of disinflation. Now was the inflation rate still high? Absolutely it was. Absolutely it was. But the inflation rate was not accelerating. It wasn't even staying the same. So the point here is if you believe we are going into a recession and if you believe there is going to be significant job losses to the point where the unemployment rate is spiking then you cannot you you cannot believe that the inflation rate is going to continue to go higher and accelerate. You you have to be in the disinflation camp. You you you can't have both. Either you got to choose. Are we going into a recession where we're going to have a spike in unemployment or or are we going to have a reaceleration of inflation? Because the two don't go hand in hand. See, and that's the point. Even in the 1970s, and if you look at this dynamic going back to the 50s, the 60s, the 70s, the 80s, the 90s, whatever, you see this this consistency, this correlation. So that's why I always say the an accelerating rate of inflation with an accelerating a spike in the unemployment rate with a recession that like that's not a thing that that's not a thing. Now it doesn't mean that it can't happen in the future. Again, there are no certainties. There are only probabilities. But the fact that it's never or I'm not going to say never, but in the last 75 years it hasn't happened in the United States just increases the probability to what 90 95% that into 202 or into 2026 if we have uh that big spike in unemployment then again 95% chance that the uh the CPI is not 2.9, but the CPI is a hell of a lot lower when we look into the future. Let's just say 6 months, a year, 9 months, something like that. So, this is why I always kind of say that on Twitter. I don't think a lot of people really realize why I'm saying this. they think I'm just kind of talking out of my my rear end. But no, that the reason I do that is because it's just it's history and it's facts and it's charts and you just look at what happened and there's a reason why this happened because when you have the unemployment rate spiking, what's happening to aggregate demand? Aggregate demand is plummeting. Okay. Well, if aggregate demand is plummeting in an economy at 7% consumption, how are prices going up? You say, "Oh, George, it's the money printing. It's the money printing. It's the money printing. Okay, great. Well, let's talk about that because that's a very good point. If we look at the M2 money supply growth, now let's go from this actually down and we're going to zoom in on the same time frame, but this is a cumulative chart. So, what we're what we are looking at above was just kind of a year-over-year chart. This is accumulation. So we can see total money supply growth. And let's just actually zoom in from 1970 and we're going to compare that to 2020. So we're going to go 1970 to uh 75. So then we can compare that with 20 to 25 because that would be a lot of uh the stagflationist that would be their rebuttal I'm sure to my argument is that well you can't compare it because today we've had so much money printing and that all that money that's slloshing around the system that we didn't have in the early 1970s. that's going to eventually rear its head in an acceleration of consumer prices even though the labor market is deteriorating and we are in a recession. So let's just try to look at that through the lens of history. So we've got no we got to zoom out a little bit here. Here you go. So here they go. August of 1975. Perfect. So M2 money supply growth for that time frame was 67%. 67% in total. So M2 money supply grew from 19 or from our point on the chart here uh late 69 into August of 1975 it grew by 67%. Okay. So let's go ahead and compare that to what we had 2020. Ah, exact same dates. Fantastic. So, this is November 2019 to August of 2025. And we can see that the M2 money supply grew by, drum roll please, 45%. 45%. So, that's 20% less than we had in the 1970s. But still, but still in the 1970s, every single time we had a recession with a big spike in the unemployment rate, it led to disinflation. So that's why guys, my base case is disinflation over a long period of time. It it's it's not this stagflation and a reaceleration of prices. Now, once we get through the recession and out the other side and then you have all the central planners doing whatever the hell the central planners are going to do, then it's then it's uh a completely different ballgame and then my opinion will likely change based on what the circumstances are and the environment. But as of right now, for the next six months, for the next year or so, this is why I kind of remain in the uh disinflation camp. I hate to say it, the the let's say stagflation transitory transitory camp. And another thing I want to point out that I think you guys will find interesting. Let's go back up to this uh year-over-year long-term trends chart. Let's look at the GFC. So, I want to highlight something here. We're going to go right to uh January. Okay, let's go to September07 because we can compare it with September of 2024 and then we're going to go to well that same quarter where we had the deflation. We'll look at July 09. All right. So, when the Fed started dropping rates in 2007, you can see that Oh, oh, oh, no. Sorry, I got to fast forward. Here we go. Right around here, the CPI was right around 3.5%. 3.5%. And notice what it did going into the summer of 2008. It went up to 5.6. Way higher. In fact, the starting point was higher than where we are right now. the starting point of the Fed's rate cutting cycle in 2007. And what was happening to the unemployment rate? It was going up. Now, not dramatically, but it was going up during this time. So, this you could say would have been quote unquote stagflation, stagflation, stagflation. But we all know how this story ends. We got the spike in unemployment. We got the stuff hitting the fan. We got the recession. And by the way, remember in the summer of 2008, the NBER hadn't come out and said that we were in a recession yet. Most people thought, "Oh, the economy is maybe sputtering a little bit because of this housing market thing, but no big deal. It's strong and resilient." In fact, when you read the Wall Street Journal from this time, they were ted hiking rates in July of 2008. Hiking rates. Yeah. Okay. So then what happened just like the 1970s even though we had a short time frame well it wasn't short let's just say it was 9 months where they were dropping rates the front end we had an acceleration an absolute acceleration of the CPI we had a decrease in the uh uh the well that's probably not the right word. We had a uh a decline. We had a uh deterioration is probably the best word of the labor market during this time frame and CPI still went up. But at the end of the day, when we look and fast forward to the end of the movie, it still results in not only disinflation, but in this case, outright deflation. Outright deflation where the CPI goes from, you know, 5.6, six, like we said, down to a negative 2.1. So, going back to the incredible call uh that Peter got right with the GDXJ, the juniors and the miners, uh it leads me to today's video sponsor, which is Monetary Metals. This is my good buddy Keith Weiner. And the problem with gold going up is your storage fees go up as well. And it's it's a catch22, right? But fortunately, in meeting Keith and him bringing this to my attention, he said, "George, I've got a solution for you and I'd like to talk about it on your channel." I said, "Well, Keith, I really don't do sponsors too much, but let me go ahead and set up an account. 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Uh and when what happens is these jewelers, it behooves them because they can for a variety of reasons. Uh they can hedge out their uh the fluctuation the gold price with their current inventory. Uh they can take on more gold. They can sell it without having to have as much out of pocket and then they just go ahead and return the gold. Uh or uh you know they sell the gold and they take they buy more gold, bring it back and they pocket the spread. Uh, I went I know it sounds complex, but I did a whole explainer video that Josh will put in the description below. It's a whiteboard on how their business model works. And once you understand what they're doing as far as taking the gold and actually leasing it to a jeweler and then the jeweler pays the interest rate and they happily pay for this service because it's a huge benefit for their business model. 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New Inflation Data Confirms Worst Case Scenario
Summary
Transcript
Well, so we had big news. The inflation data came out today. The CPI report that everybody was anticipating. And let's go over to the calendar, check it out, and see what has happened. And first and foremost, I have to give mad props to my good buddy Peter Schiff that absolutely nailed the move in this specific asset class. Am I talking about gold? Kind of. Kind of, but not really. But then at the end of this video, I'm going to go over some of the things that I think my good buddy Peter has wrong and how this puts the Fed into a very difficult predicament going into their rate cut decision. Okay, so that's what we're going to review. Now, let's go over to the news. Drum roll, please. We see the calendar and expectation month over month was for.3. We got a 04. Yikes. So, is this stagflation? I don't think so. And I'll tell you why. And I think that's what Peter is getting wrong. But we're also going to go over what Peter got absolutely right. And actually, what he got right is probably more important than than where I think he's wrong. All right. So, with some rounding, I'm assuming we've got year-over-year at 2.9, which hit expectations core.3 month overmonth, and year-over-year 3.1. But here we go, guys. Here we go. Look at the initial jobless claims. 263. So, the expectation was for 236 263. So I mean think about all the negative data we have had in labor market just over the last week. I mean, remember Jolts numbers, terrible, ADP numbers, terrible, non-farm payrolls, atrocious, benchmark revisions, horrific. And now we've got a bump, a substantial bump in the initial claims. And a 263 number in and of itself isn't, you know, just recession, pants on fire, but it's all about the trend. We say that on this channel constantly. And the best indicator that I know outside of just interest rates for what's likely going to happen in the economy is the labor market. And the labor market, by the way, is a much better timing mechanism than interest rates. Just the yield curve that gives us it's very powerful tool. But it kind of tells you just the future path of what the expectations are where when the labor market really starts to deteriorate with the non-farm payrolls with the household survey ADP jolts you throw the initial claims in there that's telling you that there are some real problems that are likely going to surface in the very near future. So better timing mechanism and especially if you go back to 2024. Now, I don't want to get too far off on a tangent, but I know one of the bullish arguments for the labor market deteriorating is, well, this kind of makes sense. You can't really put a lot of weight into the June number being negative or any of these revisions because we've had all the the brown people, whatever you want to call them, illegals or legals or whatever. Uh, we've had all of the Mexicans or the illegals, whatever, South Americans. We've had all these people that have left. Trump kicked them out. They're scared. They're leaving, whatever. So, we have no one to do all of the bluecollar work. And so, these jobs just go away. And so, it's not really because the economy is doing bad. It's just because all of these immigrants are going home. And I I don't really buy into that because number one, okay, that's still fewer people working and contributing to the economy and that means whether you like the brown people leaving or not, it that's not really the question. The bottom line is they're spending less money. Therefore, aggregate demand goes down. So whether you think that's good long term or not, over the short run, that's going to lead to decrease in economic activity, especially in an economy that's 70% consumption. But I I'm also very skeptical of that theory because if you go back to 2024, then we we had Biden and obviously he was doing the complete opposite of Trump to the extreme. And back then, if you look at the benchmark revisions, we still had a couple months that were negative. So h how how how do we explain that one? I mean, that's not immigration. That's not foreigners leaving the country or people that whatever. You get what I'm saying? So I I don't put a lot of weight into that idea or that rationalization, let's say, for the data in the labor market getting worse and worse and worse. Okay, so now let's see. Let's go over to CNBC where we get kind of like a mainstream take on it. Uh, here's the inflation breakdown for August 2025 in one chart. They always do this, but it never adds up. I There's There's got to be something I'm missing with these CNBC charts because every single time they have a CPI, I go here and they give me a breakdown and the numbers never make sense. So, I don't Maybe you guys can tell me in the chat what I'm missing. I mean, am I just stupid or like like like right here, food at home, 2.7%. Okay. And then every single thing that they do or every single thing, every single line item they have, if you add all these up or just average them, it's not even close to 2.7%. I mean, just me eyeballing it, it's probably like 7% or 8%. How the hell are you getting 2.7? I I I don't know if they just I don't know what they're doing. Maybe you guys can tell me in the chat or you can let me know in the comments. Maybe they're just listing the items that went up the most and they're not giving us the items that went down that would help better understand how they get to 2.7. But it's like this everywhere. Like look at this. energy negative 1.6. Yet the two things they listed, one was up 13%, the other up 6%. Like I'm no math genius, but I know the average of 13% and 6% ain't negative 1.6. So I I mean you could say maybe this is a month overmonth number and this is annual, but that's not that's not what they're doing here. At least no, that's not what they're doing anyway. So let's just whatever. We we'll let the BLS deal with that nonsense. Here we go. Oh, of course tariffs contribute to rising good uh good prices, economists say. So, of course, at CNBC, they have to blame Trump. They have to blame Trump for something. So, the CPI tracks how quickly prices rise or fall for a basket of consumer goods and services from haircuts to coffee concert tickets. Inflation is reigniting largely due to reinflation for consumer goods, said Sarah House, senior economist at Wells Fargo. Prices for core commodities, excluding food energy, rose 1.5 uh August fastest annual pay since May of 2023. Excluding the surveillance sickness and aftermath, core quantities haven't hit that quick rise since 2012. And then just more blaming it on Trump. Blaming it on Trump. Okay. Okay. Okay. Uh the fact that we're seeing some of the largest tariffs since the 1940s, I think is certainly a part. Okay. More more bad. Orange man. Bad. Okay. More of this. So they talk about personal finance. I don't really care about that. What I thought was interesting is the prediction made by Xandy. I thought I had that highlighted. But basically he said he expects this to continue in for the next year. In other words, for the CPI to go higher and higher and higher and higher and higher and higher, not just stay above the Fed's target as far as overall inflation, but the actual inflation rate ramping up. And I I'm sure he's blaming that on on tariffs or the pass through effects of tariffs tariffs. But this is where I completely disagree. So, this would be the stagflation argument where I I would push back on kind of uh Peter's overall view. And it looks like the view of this Xandy fellow. Uh maybe it was up here. There you go. Inflation's uncomfortably high and it's accelerating, said Mark Xandandy. I think we should expect a further acceleration. So, not just a further uh not just more inflation prints that are higher than where the Fed would like them, but an actual acceleration of prices. So, they're going So, we've got a let's say a 2.9 CPI this month. That's going up to 3.5, going up to 4.5, going up to six, going up to eight, going up to 15. And pretty soon it's just going to be wildly out of control. and the Fed isn't going to be able to raise rates because that's going to crush the economy further. This is the argument that you get from uh probably Mark Xandy and it's definitely the argument that you get from uh my good buddy Peter. So now let's go over what's h happening in interest rates because interest rates are telling a much much different story as far as stagflation. They they are not screaming stagflation. They're screaming the act the opposite of stagflation. And this really quite frankly caught me off guard because when I saw the CPI print this morning, I would have assumed the long end of the curve would have gone up uh at the very least been flat and that is not what we saw. So let's start with the 10-year Treasury that right now we're trading at 4.02 02 which is almost shockingly low based on a the narrative and you know that interest rates are just going higher and higher and higher and higher and higher and higher and higher and that it's all because of debts and deficits and you know you I don't have to revisit that. I talk about that on this channel all the time. Um but when you look at the actual chart you know we'll do year-to- date. Um, I mean, that's that straight down. And even with the 10-year Treasury, I mean, we could do three years. Uh, we do a three-year chart and we're up uh I mean, we're up 50 basis points, but that's over the last three years. I mean, think about what the debt and deficits have done over the past three years. So, when you look at and then going back to just uh 2022, no, wait a minute, 2023. So Q3 of 2023, I we're almost 5%. On the 10-year Treasury, and since that time, we're down 100 basis points. And by the way, intraday, let's go back to that chart. There were points when, as you can see right here, the 10-year Treasury was trading sub 4%. Sub4%. So, what this is telling you is that the market is not expecting stagflation. In other, and let me be clear, I'm not saying the market isn't expecting inflation to be higher than the Fed's target. So, we've got to define terms because when most people talk about stagflation, um they're talking about not just prices being slightly higher than where the Fed would like them, but prices getting out of control to where, like I said earlier, they're going higher and higher and higher and higher and higher. Right? And by the way, if your definition of stagflation is just prices being higher than the Fed's target, that doesn't make a lot of sense to me because we look at the CPI rate. In fact, let's do that right now and then we'll come back to interest rates. So, this is a chart that I want to go over here in a minute, but let's let's fast forward. That's GFC. But let's fast forward to where the CPI ah come on red line. There we go. So the CPI in you can see is pretty much the same. I mean 2017 181 19 just under 2%. So right here as you can see on the chart we're at 1.7. All right. Was anybody talking about stagflation back then at 1.7? No, not really. We're talking about stagnation is what we were talking about back then, not necessarily stagflation. So I mean if the and let's just use the CPI as a proxy for the Fed's target. So if the inflation rate was at the CPI was at 2.3 instead of 1.7, would we call that stagflation? I mean, I don't know. We're talking about 50 60 basis points here. Now, if that was at uh 8 accelerating to 9 going to 10 going to 11, absolutely. Now, we're talking about stagflation, especially if the unemployment rate is very high. But that that's why I I don't really I don't like the term stagflation in reference to inflation just being higher than the Fed's target. But I don't think that's the way the majority of people use it. And I don't want to put words in in my good buddy Peter's mouth, but when he talks about stagflation, I I I think it's safe to assume that he's talking about inflation actually accelerating and getting higher and higher and higher over the next call it 6 months and the next year as the labor market deteriorates further. That's something we both definitely definitely agree on. Okay. So now let's go back to interest rates. Look at the Oh, that's the dollar. And we've got the 2-year. Now, we had a little bit of a bull flattener today where the two-year is down slightly. Uh, but the 10-year was down more significantly. So, you get that the long end going down a little bit more than the front end. It's it's bull because both interest rates are going down. But uh where we saw I think probably the biggest move was in the 30 the 30-year which is why if you're just for me interest rates being one of the best inputs or predictors of longerterm growth in inflation uh nominal GDP whatever you want to call it uh the the 30-year just plummeted today. So down four basis points but look at this chart. It's just it's it's it's nothing but down as far as the yields. In fact, if I wasn't doing this video right now, I would probably That's tempting. That's very tempting right there. But we'll have to save that for Rebel Capitals Pro. Okay, so now let's go into where Peter just nailed it. And kudos to my good buddy here. And like I said, I think this is probably more important than the stagflation call because this is far far far more actionable. And what I'm talking about and what we used in that thumbnail, what were the miners? I mean, Peter man, did he call this? He was talking about on his podcast that gold's going up. I Peter always talks about gold going up. Uh that's nothing new. But what is new is I don't remember when it was but he was talking about this rotation um into the gold miners and into silver or maybe not rotation probably isn't the right word the cycle the way the cycle typically plays out where you have gold going up and then you have the miners really catching up to gold and then surpassing it as far as a percentage increase and then silver doing the same thing. And if we look at let's just do a let's do a six-month. So 6 month uh the GDXJ is up 63%. 63%. And let's look at the GLD just using that as a proxy. Let's look at Trading View. Just so we're comparing apples to apples and let's do a six-month there, 21%. See guys, this is exactly what Peter was talking about. And uh this is why uh back probably a month or two ago, I actually sold some of my gold and parlayed that into the GDXJ was really to just kind of play this this catchup uh to gold trade. And obviously that's worked extremely well. Another thing that we were talking about in Robo Capitals Pro. But now let's go over to this stagflation argument because a lot of people would say, well, the reason gold is going up is because it's predicting stagflation or it's predicting, you know, an acceleration of consumer prices in the future. I don't agree with that. I I don't see any when you go back and look at charts over history, I don't really see a strong correlation at all with uh gold and the inflation rate although over long periods of time obviously gold does a great job of maintaining its purchasing power. And so a couple charts that are one I discussed this yesterday but we didn't go over the chart which uh once again I don't have up but really if you look at 2009 2008 actually we can pull up CPI. Let's do that guys. Sorry we're kind of bouncing around here but I think it's relevant to what we're talking about. So look at this uh red line and this is the CPI. I don't know why this thing keeps bouncing on the black line. I wish I could delete one of these things, but unfortunately I can't. There we go. There we go. So, what we're looking at here is December 2008, and this is when the CPI was at 0.03. So, basically 0%. And then look at the trend here. The trend is mega mega mega. Not just disinflation, but deflation. In fact, we went from this was really shocking because we went from the CPI being 5% plus in June July of 2008 to it going straight down to zero to then it going down negative where the CPI was negative negative 2%. In other words, 2% deflation not disinflation deflation. So in this environment, you would assume that gold would have got shellacked, but what did it do? It's going straight up. It was hitting all-time highs. So my point there is that number one, gold doesn't really have a great correlation with inflation, although over long periods of time it really maintains its purchasing power. And often often it has an inverse correlation with inflation with the CPI assuming that the stuff is really hitting the fan. And why is that? Like my good buddy Doug Casey says, gold is pretty much the only asset that isn't simultaneously someone else's liability. So when the stuff is really hitting the fan, what do you want to own? Own, excuse me. You want to own something that doesn't have or has as very as as low a counterparty risk as possible. Okay. So now let's look at this through the lens of the stagflation argument that we're hearing a lot. I hear it just constantly on social media. So let's um where do we want to start here? Let's start in the 1970s because that's the decade of stagflation that everybody always talks about. So, we're going to Oh, I went way too far. Sorry about that. Here we go. 1980 to 1970. Okay, this is close enough. And what I want to do in addition to this is look at a chart of unemployment. So, we're going to go back and forth here, guys. We're going to go back and forth. Let me zoom in just for those of you who are maybe watching this on your cell phone or something. This is really important cuz so many people just they just don't understand this and it's it's it's not rocket science. It's just I don't for whatever reason they don't look at charts or history. Okay, so let's start right here. 1970. Look at this spike in the unemployment rate, guys. We go from 3.9 straight up to 6.1. I mean, talk about the SOM rule being triggered, right? So, and then what happens in 197574 when we get another recession and we go from let's just say 5.4 4 right here in the middle when unemployment really starts to go up and this is June, July, call it the summer of 74 and it just rips higher the unemployment rate till it peaks out in May of 1975. So, let's look and see what happened to the CPI back in the 1970s when we had a recession and economic slowdown and we had a significant softening that's probably understating it of the labor market where the unemployment rate really goes up which is what a lot of people are expecting including myself and uh Peter Schiff. No certainties only probabilities but that would definitely be my base case. um looking at what has happened to the labor market and these revisions and everything that we've been talking about on this channel. So now let's go over or back to long-term trends. And we see that right here 1970, look at the red line, guys. And remember what happened to the unemployment rate right during this time into 1970. What was happening to the unemployment rate? It was going straight up, wasn't it? and we were in a recession and what happened in in the in the decade of stagflation, what happened to the inflation rate as measured by the CPI went down. We go from 6% all the way down to a point where here in 72 we're down to 2.71. That's under where we are today for heaven's sakes. And this was 1972. This is after we went off the gold standard and all that stuff. But then we get a reaceleration right here. And but keep in mind this isn't a reaceleration 2 months later. This is a reaceleration 2 years later, way off into the future. Okay? And then inflation goes up higher, higher, higher. And then what happens in 1974? You guys remember we get the recession. And then in the summer of 1974, let's fast forward June, uh, July. So right in here, what happens to the unemployment rate? Goes straight up, right? We go from just kind of normal level. It's the inflation rate's going up like this and it gets to the point where it's still kind of within the range of normal and then the stuff hits the fan and boom, straight up, right? And what happens to the CPI for the next two years. I mean, and remember the unemployment rate continued to go up into May of 1975. So, look at what's happening to the red line going into May. It's going straight down. Straight down. And then what does it do? It goes straight down all the way to November of 1976. So you're looking at basically again two years of disinflation. Now was the inflation rate still high? Absolutely it was. Absolutely it was. But the inflation rate was not accelerating. It wasn't even staying the same. So the point here is if you believe we are going into a recession and if you believe there is going to be significant job losses to the point where the unemployment rate is spiking then you cannot you you cannot believe that the inflation rate is going to continue to go higher and accelerate. You you have to be in the disinflation camp. You you you can't have both. Either you got to choose. Are we going into a recession where we're going to have a spike in unemployment or or are we going to have a reaceleration of inflation? Because the two don't go hand in hand. See, and that's the point. Even in the 1970s, and if you look at this dynamic going back to the 50s, the 60s, the 70s, the 80s, the 90s, whatever, you see this this consistency, this correlation. So that's why I always say the an accelerating rate of inflation with an accelerating a spike in the unemployment rate with a recession that like that's not a thing that that's not a thing. Now it doesn't mean that it can't happen in the future. Again, there are no certainties. There are only probabilities. But the fact that it's never or I'm not going to say never, but in the last 75 years it hasn't happened in the United States just increases the probability to what 90 95% that into 202 or into 2026 if we have uh that big spike in unemployment then again 95% chance that the uh the CPI is not 2.9, but the CPI is a hell of a lot lower when we look into the future. Let's just say 6 months, a year, 9 months, something like that. So, this is why I always kind of say that on Twitter. I don't think a lot of people really realize why I'm saying this. they think I'm just kind of talking out of my my rear end. But no, that the reason I do that is because it's just it's history and it's facts and it's charts and you just look at what happened and there's a reason why this happened because when you have the unemployment rate spiking, what's happening to aggregate demand? Aggregate demand is plummeting. Okay. Well, if aggregate demand is plummeting in an economy at 7% consumption, how are prices going up? You say, "Oh, George, it's the money printing. It's the money printing. It's the money printing. Okay, great. Well, let's talk about that because that's a very good point. If we look at the M2 money supply growth, now let's go from this actually down and we're going to zoom in on the same time frame, but this is a cumulative chart. So, what we're what we are looking at above was just kind of a year-over-year chart. This is accumulation. So we can see total money supply growth. And let's just actually zoom in from 1970 and we're going to compare that to 2020. So we're going to go 1970 to uh 75. So then we can compare that with 20 to 25 because that would be a lot of uh the stagflationist that would be their rebuttal I'm sure to my argument is that well you can't compare it because today we've had so much money printing and that all that money that's slloshing around the system that we didn't have in the early 1970s. that's going to eventually rear its head in an acceleration of consumer prices even though the labor market is deteriorating and we are in a recession. So let's just try to look at that through the lens of history. So we've got no we got to zoom out a little bit here. Here you go. So here they go. August of 1975. Perfect. So M2 money supply growth for that time frame was 67%. 67% in total. So M2 money supply grew from 19 or from our point on the chart here uh late 69 into August of 1975 it grew by 67%. Okay. So let's go ahead and compare that to what we had 2020. Ah, exact same dates. Fantastic. So, this is November 2019 to August of 2025. And we can see that the M2 money supply grew by, drum roll please, 45%. 45%. So, that's 20% less than we had in the 1970s. But still, but still in the 1970s, every single time we had a recession with a big spike in the unemployment rate, it led to disinflation. So that's why guys, my base case is disinflation over a long period of time. It it's it's not this stagflation and a reaceleration of prices. Now, once we get through the recession and out the other side and then you have all the central planners doing whatever the hell the central planners are going to do, then it's then it's uh a completely different ballgame and then my opinion will likely change based on what the circumstances are and the environment. But as of right now, for the next six months, for the next year or so, this is why I kind of remain in the uh disinflation camp. I hate to say it, the the let's say stagflation transitory transitory camp. And another thing I want to point out that I think you guys will find interesting. Let's go back up to this uh year-over-year long-term trends chart. Let's look at the GFC. So, I want to highlight something here. We're going to go right to uh January. Okay, let's go to September07 because we can compare it with September of 2024 and then we're going to go to well that same quarter where we had the deflation. We'll look at July 09. All right. So, when the Fed started dropping rates in 2007, you can see that Oh, oh, oh, no. Sorry, I got to fast forward. Here we go. Right around here, the CPI was right around 3.5%. 3.5%. And notice what it did going into the summer of 2008. It went up to 5.6. Way higher. In fact, the starting point was higher than where we are right now. the starting point of the Fed's rate cutting cycle in 2007. And what was happening to the unemployment rate? It was going up. Now, not dramatically, but it was going up during this time. So, this you could say would have been quote unquote stagflation, stagflation, stagflation. But we all know how this story ends. We got the spike in unemployment. We got the stuff hitting the fan. We got the recession. And by the way, remember in the summer of 2008, the NBER hadn't come out and said that we were in a recession yet. Most people thought, "Oh, the economy is maybe sputtering a little bit because of this housing market thing, but no big deal. It's strong and resilient." In fact, when you read the Wall Street Journal from this time, they were ted hiking rates in July of 2008. Hiking rates. Yeah. Okay. So then what happened just like the 1970s even though we had a short time frame well it wasn't short let's just say it was 9 months where they were dropping rates the front end we had an acceleration an absolute acceleration of the CPI we had a decrease in the uh uh the well that's probably not the right word. We had a uh a decline. We had a uh deterioration is probably the best word of the labor market during this time frame and CPI still went up. But at the end of the day, when we look and fast forward to the end of the movie, it still results in not only disinflation, but in this case, outright deflation. Outright deflation where the CPI goes from, you know, 5.6, six, like we said, down to a negative 2.1. So, going back to the incredible call uh that Peter got right with the GDXJ, the juniors and the miners, uh it leads me to today's video sponsor, which is Monetary Metals. This is my good buddy Keith Weiner. And the problem with gold going up is your storage fees go up as well. And it's it's a catch22, right? But fortunately, in meeting Keith and him bringing this to my attention, he said, "George, I've got a solution for you and I'd like to talk about it on your channel." I said, "Well, Keith, I really don't do sponsors too much, but let me go ahead and set up an account. 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