Title:   The Next Economic Shock Has Already Started
Show:    The David Lin Report
Guest:   Nomi Prins (founder/CEO, Prinsights Global; ex-Goldman Sachs MD; author "Permanent Distortion")
Date:    2026-JUN-04
URL:     https://www.youtube.com/watch?v=uWkjZ4THfa8
Length:  ~47 min
Note:    Auto-transcript, timestamps mm:ss. Saved for personal study. Commodities/macro interview: silver (her
         #1 pick), copper (top-3; Section 232), gold (now central banks' #1 reserve), aluminum, uranium and
         tungsten as "permanent distortions" of weaponized supply chains; plus Fed/Treasury intervention,
         Kevin Warsh, and a hike vs. long-end-of-the-curve debate.

================================================================

(00:00) This is a point of permanent distortion. Silver was and actually remains our number one pick for the year. Still bullish on silver. I still see it getting back to 120 or higher by the end of the year. It's not a far stretch from where it is. Copper would be above seven actually by the end of this year. Dollars per pound.
(00:15) >> How can you explain from the perspective of permanent distortions why markets are still grinding higher in fact to new all-time highs? >> The fact is that >> with the onset of the Iran war, one thing has been certain. Supply chain bottlenecks create opportunities for investors as well as distortions to the economy.
(00:36)  Our next guest is an expert on distortion. She's written literally books about this and we'll be discussing her take on which commodities may actually survive this Iran war and perhaps even prosper and which permanent distortions are now caused in the supply chain globally that investors and consumers alike need to be aware of. She's Dr.
(00:55)  Nomi Prince, founder of and CEO of Princeize Global. And uh it's just good to have you back, Nomi. Welcome back. >> Thanks so much, David. It's such a pleasure to be back with you. >> Let's start by talking about hard commodities, gold versus everything else. It seems that the safe haven trade, uh which is something that people have been looking to during times of distress, have disappointed investors while things like copper have soared to new all-time highs.
(01:21)  And in fact, if I were to show a chart shortly after this question, you can see on the screen that copper and gold, which have traditionally moved together, have now diverged. Now, is this a case of just gold consolidating or do you think capital is shifting away into things that are, I guess, impacted the most by supply chain bottlenecks caused by the Iran war, which presents an opportunity for some investors? What do you think is happening? Yeah.
(01:49)  So, we we're definitely seeing gold in a range right now. Um, having reached a peak before the Iron War um and a historical high, having come off of those highs and now basically trading in a range. On the other side of that though, we've had reconfirmation of gold relative to US treasuries that it is now the number one reserve asset of central banks.
(02:08)  It was at the end of 2025. The ECB, European Central Bank, just confirmed that. Um, and it does have that staying power. But what's happened is from an investor perspective um this the part of the story not the full story just the part of the story around gold as you mentioned with respect to a safe haven for the investors sort of on the margins of gold investment that has dimmed down where the focus has moved more towards oil spikes oil and and LNG and natural gas.
(02:38)  So so that's what happened just from the standpoint of of new money coming in. It doesn't mean that central banks aren't currently continuing to buy gold, continuing to use it to diversify against US debt, against the dollar, and to solidify their monetary policies as collective entities in in the global economy and with respect to global um trades and settlements of trades.
(02:59)  So, we're seeing a bit of a drawback on that, but I that is very temporary um because the main strategic players in gold remain involved in the metal and it's really just the margin that has changed and I think this is a great buying opportunity um for gold. It's a great opportunity to be patient if you're already in it and it's a very good opportunity to be selective on which miners have good plays in neutral jurisdictions which brings me to the other part of your question David with respect to other commodities and copper
(03:28) is one um you know actually in the beginning of the year when we listed our top 10 focus commodities for the year um copper was number three and that gold was after copper I think we put gold in as number five um no disrespect to gold but because we see copper as having such a multiple um set of components that drive its price.
(03:50)  One of those were tariffs and these sort of export control wars that are going on between copper producers throughout the world and copper refiners. For example, in China, there has been an imbalance. And what we saw in the wake of um the Supreme Court judgment against some of the tariffs that the Trump administration put in general on imports into United States is that there has been an investigation launched um at the time into copper under section 232 of 1960 statute on trade um on trade with respect to to national security matters. And that
(04:24) report that uh the administration asked for from the Secretary of Commerce is due out on June 30th. What that will probably show and this is one reason for the squeeze up and I think continued squeeze up in opportunity in copper and in copper miners and good jurisdictions is that it absolutely remains a strategic critical asset um and necessity for the United States for electrical purposes for um for rewiring purposes for construction infrastructure purposes but also because it's it's in short supply from a production
(04:54) standpoint. So 232 will probably show when this report comes out on June 30th that copper can be classified as a material important metal with respect to national security um which will allow tariffs on processed copper to increase um starting in 2027 and 2028. So we're seeing positioning into that potential um result right now.
(05:20)  That that's one thing that's happening. The other thing is that copper in general, the smeltering of copper, um the processing of copper is expensive. It's predominantly done in China. Then we get processed copper back. And so that's one of the reason for this particular report. Um and and it continues to be an industrial necessity um for basically continuing to develop infrastructure throughout the world for for energy and defense and just general you know population demand purposes.
(05:46)  So we are going to continue to see um you know these new records and we had suggested that copper would be above seven actually by the end of this year dollars per pound. We think that's going to continue already seeing breaks above that. Um, and also it's important about the orgrades. We've seen a lot of outages in Peru and Chile and so forth.
(06:02) And it takes so long for a new mine to come into play that that the permit process, the jurisdiction process, the safety process, the community connection is all very important for copper. And I think that's another reason we're going to see really good opportunities and we are um in in mining companies that are that are further along the junior mining process and in copper prices itself.
(06:22) [sponsor — Monetary Metals]
(07:31)  Now, uh on that, Trump has made changes to steel, aluminum, and copper tariffs like you uh alluded to. He expanded the existing category of industrial equipment that is subject to a 15% tariff to include mobile indust industrial equipment like bulldozers and forklifts. So he's bring tariffs down from 25% to 15%.
(07:50)  Uh does this change your thesis at all? Um for investing in these metals um or is 25 to 15% not significant a difference? It's significant if you look at the the supply chain of of of these important industrial metals and the fact that you know we've all we're also sort of rating um the US it's it's it's defense um instruments um when with respect to the IM war and that's that's put a sort of higher squeeze or higher bid on processed steel processed aluminum um if we look at aluminum um and steel but but aluminum particular as as one of those
(08:21) industrial metals in short supply because of the production that's mostly done again in China and the fact that we have about four smelters in the United States that can process um but only one is operating capacity for various reasons of being old, of not having been um you know updated of not having um the the right sort of grade of of aluminum coming into them.
(08:42)  So it it is additionally something that is in short supply as more building gets done. So it it's not as much the 15 to 25% tariff. what these what these labels do, what 232 reports do um in terms of changing where tariffs are is they create just um a a new level by which we can consider the entire supply chain.
(09:03)  And that's something that's important to note here. It's not just you're getting raw steel or raw aluminum. You're basically incorporating expenses throughout a supply chain where production is mostly done outside of the US. Um, and this administration to an extent, the Biden administration, Trump administration before, and has has tried to move the needle on on reinvigorating um, some of that processing and production for industrial metals, for copper, for silver, for uranium enrichment, and all of these things are are still years away
(09:31) from our needs of full capacity of the the end products. And so, we're it doesn't really um, it doesn't really change our thesis for for these metals. And in fact, when we put aluminum on our top 10 list as well in the beginning of the year, um it was mostly because of the processing chain and what we've seen since the Iran war because there are some processors out um in the Middle East and those in the process aluminum hasn't been able to get through the straight which is you know operating at 6% of its pre-war capacity right now. Um
(10:00) and that has squeezed up prices in in that metal as well. Um and so these are about full supply chains um and full geopolitical relationships and where stuff is made and what can be restricted and by whom and that we continue to look at. Tariffs are a component, reports are a component, but right now the the need for metals and processed metals exceeds the ability to put new product from a raw ore perspective, a raw uh feed stock perspective into the market.
(10:35) >> I want to tie this back to your hit book, Permanent Distortion, and the concept of intervention, government intervention during crisis, which is something you've discussed a lot in your book. Now, this is a situation that just based on observation, we can say the Iran war has caused an immediate selloff in the S&P and stocks, but they've rebounded very shortly after.
(10:56)  There was a V-shaped recovery, and now we're back at all-time highs with a lot of stocks, and AI, the AI narrative has driven things higher. On the other hand, the deficit has widened in the US. Defense spending is projected to grow and inflation expectations are now higher and more sticky. And so my question is first of all, how can you explain from the perspective of permanent distortions why markets are still grinding higher in fact to new all-time highs even though the Iran war has caused arguably permanent supply chain disruptions
(11:30) around the world? >> Yeah, that that's an excellent question, David. And and the fact is that um even if we look at our Fed and the size of their book, um it is not as big as it was in terms of the treasuries it's it's bought. uh during the COVID period, but it's still $2 trillion more than it was at the height of the financial crisis intervention.
(11:52)  So, they're basically running a $6.5 trillion book. We've got a $39 trillion um amount of debt outstanding, which is only going to increase. So, if you even look at, you know, let's round that up to 40 by the end of the year. Um you're looking at a significant percentage of of holding still of public debt on the books of the Fed.
(12:13)  It has not basically stayed with quantitative tightening beyond that $6.5ish trillion dollar level. In fact, in December, the New York Fed has started to buy 40, it's not a lot, but $40 billion worth per month of treasuries back. I believe that's what's going to happen when Kevin Worsh comes in. And I think this is part of the market positioning um that has been evolving in the wake of the Iran war even with the higher spikes we've seen in oil driving higher inflation costs is that we're going to see more bond buying from central banks whether it's called
(12:42) QE whether it's um less runoffs whether it's we're going to go by part of the curve um from the standpoint of Treasury buying back some of its treasuries or doing some sort of joint initiative with the Fed which has been floated by this administration. Um, I think we're going to see that and I think the market um is anticipating some of that long-end drag that we have seen now because of inflation being picked up again by this um potential intervention on the long end of the curve.
(13:10)  That's not to say we're going to see rate cuts um by by this this Fed under under Kevin Marsh at the at the offset because of what's going on. We won't. But we I believe we'll see more activity in the long end. it it we we we carry too much of a burden of servicing the payments and the interest payments of our Treasury debt above a trillion dollars.
(13:32)  It's um a year um to not have conversations going on now between the Fed and Treasury Department as they have been doing before before Kevin Morris's appointment. And and I think that is is part of the reason why stocks like AI um which are effectively long-term buys um even you know with some short-term funding involved are continuing to see bids and then again going tying that back to commodities um what has lagged the AI um sort of reboost after after the initial selloffs during during the start of the war is that you cannot run
(14:06) AI data centers. you cannot run the construction of the infrastructure to get to them, the wires that basically supply them with energy and and everything in between without um the commodities that are necessary to to supply all of that power. And that ties you back to a lot of mining capacity that needs to be examined from the standpoint of long-term investment and opportunity in that part of the market because you cannot have um this appreciation without.
(14:33)  So we we see the financial distortion driving um these investments in in AI and other large companies and then we see um a little bit of a lag with some of the mining companies um and the and some of um the commodities but but but less so um that I think will catch up in the long-term investment cycle.
(14:54)  One theme of your work is that crises have reshaped often the financial system. And I wonder if this conflict in Iran could be used as justification for enacting some of the policies that were shelved before. I'm talking about greater central bank uh intervention, more strategic subsidies, larger deficits, more spending, so on and so forth.
(15:14) >> Yeah. I mean, as as you said before, we we're definitely seeing a larger deficit there. There have been numbers floated to increase the defense budget um in in between times. that probably won't happen. But but when when the next um um the next budget is determined and the defense component is always the component that drives the budget anyway and it creates all the side deals that happen in Congress, it's like we all agree this is defense.
(15:36)  Let's figure out how everything happens. But but you know to your other point about um you know there dislocations there and and distortions. I do think there is going to be obviously more debt, obviously higher deficit, obviously higher debt payments, but I do think we're going to see some more strategic intervention from the standpoint of a Treasury Fed type of initiative or more Fed quantitative easing or so forth to take some of that pressure off of not just Treasury yields, from the standpoint of the the interest they require, but also
(16:04) from the standpoint of the percentage of debt um that is owned by external to the United States central banks and countries because as percentage that percentage has fallen as as as the amount has increased by more so. So there's an accelerated drop off in in other nations um taking our debt which makes sense because of of the fact that you know it is um it it is being replaced by by gold in other types of commodities in in central banks and then in in their supply chains.
(16:35)  So we I think we see that and again these were initiatives that were floated by the Treasury Department under Bant by the Federal Reserve um under uh the former chair um under Powell that that basically didn't go anywhere. But I but I think we can see I think we'll see more conversation um about forms of taking down our debt or collaborations um in the coming months.
(16:55)  I I think I would be surprised if we don't see language to that effect out of the next FOMC meeting and if not that one then then the next one. It's been a consistent pattern that following a crisis the central bank or at least the treasury were both intervene. Now co was an example. The financial crisis is an example. This is an example.
(17:15)  Is it safe to assume that we're living in a regime where a crisis would most likely be followed by a rally in asset prices following a bit of a correction but intervention usually has according to history pushed asset prices higher. In other words, I'm not saying I look forward to a crisis. I certainly don't. But if I were an investor looking at this from the angle of is this a buying opportunity, I would say yes almost every time.
(17:41)  How would you how would you respond? >> Absolutely. And and a lot of our our research is based on um the realities of of supply deficits for for real assets and and where they go in the economy and and what they drive and and how scarce they actually are. um on the one side of that in terms of real assets and on the other side from a financial perspective I think that's why we've seen these um resiliences that we are seeing in in the markets because the expectation um based on recent um you know substantiation it is that there will be more debt and
(18:11) somehow there will be a way to take down that debt on you know from a public perspective you on the Fed's book from a treasury perspective book and it will sort of get reabsorbed into the system co was an extreme example of that um and there was an extreme example of blowing up the you know ballooning the Fed's book from um under4 trillion or 4.1 trillion to almost 9 trillion.
(18:29) So it was enormously quick intervention as happened around the world the ECB the bank of England Bank of Japan and so forth. Um this is this is a little more um nuanced because we already have had such an extreme rally since that time and now we have there war there's a tradeoff there's all this conversation about oil prices and inflation.
(18:52)  So that the the period of sort of rebound um has already happened which is very interesting um because it does point to the fact that if there is then an intervention from the standpoint of the Fed or Treasury or or or those around the world you know the the equivalents around the world that we could see much higher prices and again also much higher prices in the assets the selective assets and companies that are integral to to those um upswings.
(19:19)  So if we were to identify where central banks and governments are going to be directing money next and then positioning accordingly, where would you go? >> Well, I I I think we're seeing uh you for example in in Japan, you know, we're seeing right I they've had a mess of a of a situation in terms of the amount of debt that that the country um owes owns um from a public standpoint versus what they issue.
(19:43)  Um Japan is very involved in in rare earth. um they they're looking at a they just created a collaboration with the United States on that to break the strangle hold of of China um on rare earth's metals and materials which is which is enormous um which is very integral to defense across the world. Um so I think we'll see you know this combination trying for example to defend the yen but also to um reinvigorate or buy more JGBs from the standpoint of that.
(20:07)  I think we're going to see more Treasury buying at the long end um from the standpoint of a public perspective. Um and where that money goes, you know, it it's it's already um being redirected into more infrastructure types of projects that relate to defense and energy. So, for example, if you look at something like uranium enrichment processes or or rare earth separation processes, the United States is opening more of its public funds into financing that part of the supply chain.
(20:36)  um in the in the United States, in Canada, in in South America and basically in this hemisphere to offset what has um gone on what's going on in China. So there is public funds that are coming in um from the standpoint of um directing towards the processing part of the supply chain um as well as securing the the raw commodities but but very much so down the chain.
(20:59)  Do you think that the uh gap between Wall Street and Main Street are now getting wider is now getting wider given that uh asset prices going up benefits Wall Street but at the same time creates higher deficits, higher inflation expectations which the normal person would not benefit from. >> Yeah. And this this is the point of permanent distortion.
(21:18)  I chose the term permanent during co when when I wrote the book, but but it it really is this this permanent dislocation of of the uh the wealth accumulation ability of of the regular person versus, you know, these systems that are in place versus the Wall Street banks, you know, the big management companies, the private wealth companies and so forth that have the ability um to move more quickly and in greater scale um in and out of the, you know, the areas of the market that are going to appreciate.
(21:45)  And so so what what I do is is look at um and and and what you do actually is try to talk about opportunities for um the average person also in the wake of that because you can't control the process um as an average person but you can figure out where capital flow is going and and be at least a part of it. Um but at the same time yes that gap between um people versus sort of institutional wealth continues to increase as these distortions um from the standpoint of bit you know whe it's debt bought by or by central banks whether it's um
(22:16) leverage debt um in terms of M&A um and different types of things continue to drive this distortion between um individual wealth and um and institutional and and sovereign wealth. the um distortions caused by the Iran war. Have these distortions shifted some of your preferences earlier on the year? For example, I think believe talking to you in January, you were pretty bullish on silver.
(22:40)  You you had you had like silver at the time. >> Um I think you've I think silver has fallen out of favor with you right now. Is that correct? >> I'm just using that as >> silver was our Yeah, it's interesting because silver was our number Silver was and actually remains our number one pick for the year um before it hit um 120 ounces.
(22:58)  um dollars per ounce before before the war when it hit its high. We had suggested it would get to that point which which it did. Um from where it was going into the year and then of course it's fallen back and it stayed in this sort of $75 per ounce range. I think that is a tremendous opportunity. So I I'm not off silver.
(23:15)  In fact, we are we are writing a lot on pure play silver. Um when we say pure play silver, 80% of silver that is processed is mostly a byproduct of processing other things like copper, like lead, like zinc. And that means there's a cost to doing that. And then the offset or the extra that goes to to silver um is how we see our silver.
(23:32)  But that there are a few pure play silver mines throughout the world in good jurisdictions and those are the ones that we really highlight um that that feed into this ongoing structural deficit. You know, four years running of silver relative to industrial uses relative to the Iran war has basically shown us that the industrial uses of silver of grids of solar and so forth actually point towards more demand of silver.
(23:55)  It's just that there's this like we need to handle the oil situation right now because it's front and center. What does that mean? But what what it will mean is that there'll be more attention and there already is. Um that's why China stockpiling now silver um and and it's basically at its sort of highest accumulation level silver in in 8 years because the the process of finding energy alternatives um to just associates and economics has even been more highlighted by the Iran war.
(24:22)  So, the fact that silver has traded off so much um is painful to people in some of the mining um um stocks, although some of them have outperformed uh the the level of silver itself tremendously. Um including we have a couple in our portfolio that have done that. Um and then some just need time and those are the ones that I consider to be the opportunities, but we're absolutely I'm absolutely still bullish on silver.
(24:42)  I still see it getting back to 120 or higher by the end of the year. It's not a far stretch from where it is. It's not a far stretch from it was going into January when we first talked. I think what's also happened is the paper silver trade um the ETF silver trade the sort of easy um I'll call it western silver trade um because it's a sort of a faster moving set of hands on silver um have depressed prices and and haven't come back into the market relative to physical silver but we've seen physical silver trade at like 180 an ounce for
(25:11) getting real silver out in certain parts of Asia in terms of getting it out of so so there's the the entire silver market is very bifurcated right now um I think that's an opportunity Um, I'm a little surprised that we're still in this range for as long as we have been since the war started and that opportunity isn't recognized.
(25:30)  But again, it's very bifurcated. I've seen it recognized in certain silver mining names and not in others. So, it's it's very selective right now. And the selectivity and the opportunity is where um where it's pure play, where you're not paying the extra energy cost of deciphering, you know, or detaching silver from lead and zinc.
(25:47) You're just going straight silver. Um, and in jurisdictions where where the energy costs are low, like for example, Morocco, um, or you have alternative forms that that don't necessarily rely on on natural gas or oil, um, which keeps cost down. And, and there's tremendous opportunity. We're talking about mines with like costs of $21 an ounce, and silver is still three times that right now.
(26:07)  And you don't have that kind of a margin in an AI company um, that you have in there. So, so I think it's it's one to really watch >> what the Iran war has taught us, not so much just with oil, but it's that broadly speaking, at any given point, a supply chain could be disrupted by a choke point being cut off for whatever reason at anywhere in the world.
(26:29)  Um, that significantly disrupts commerce within that area. In fact, not even glo if not globally. and and impacts uh the nations around that area's ability to consume certain raw materials uh without disruption. So if you were to speculate as to which raw materials were critical materials would likely be stockpiled around the world following this revelation, what would you bet on? >> Yeah, again I got to go back to silver because I'm seeing what China and India are doing. So that's definitely one.
(27:02)  I think uranium um is is actually undervalued at at at 85 86 right now. Um so so I think that's one that that hasn't quite gotten itself through um through the system yet in terms of how how severe the geopolitical control of enriched uranium is which is surprising if you consider that it's basically the sticking point for negotiations or any kind of resolution on the Iran war between Iran and the United States is basically about enriched uranium.
(27:28)  Um yeah, the White House talks about in terms of nuclear bombs. It's not that. It's basically the idea of processing or having the processing capability of uranium. The United States has basically um passed acts to reduce the reliance for example on Russian and cas on Russian uranium uranium. Um but it's also renegotiated with Russia to lift its sanctions on oil to keep oil prices down.
(27:51)  So there's there's a lot of stuff in play here from the standpoint of processing production where it is. Um and it takes a long time to bring these mines to market. So, I think that's that's really an opportunity as well that that the market's really not paying attention to is is uh new uranium projects or or or at least permitted ones, you know, a little bit down the chain as well as um processing capabilities outside of Russia and Kazakhstan >> around the world, especially in Asia.
(28:16)  um the cost of living is going up because directly because of oil. I think less so in the west um uh because most of our oil is is is not is not is not um exported from the Gulf regions. But you're seeing rice for example go up um a lot and that's that's one commodity that's being consumed by billions of people around the world.
(28:41)  I I wonder how policies will adapt to this new reality. And I'm talking about this because Iran has just suspended negotiations with the US. They're talking about permanently closing the state of Hummus. Let's see if they follow through with that. I think this theme of our conversation is the word permanent.
(29:00)  So what would happen if let's say the street of Hormuz stays closed and um what policies would you expect particularly eastern policy makers to enact? Yeah, I mean I think we we've we have seen you when it's closed we have seen certain partnership tankers get through again very very limited we're still very low percentages relative to before the war and you start to get more selective about routes around um around the Cape of of Hope around you know different parts of of the Middle East or potentially even through um you know resourcing or
(29:32) sourcing more supply from South America into Asia through through um you know sort of lower route on the globe. So, we're already seeing kind of a redistribution um out of necessity. I mean, out of just logistical necessity um of moving some product. Now, the problem is and why why prices are high? Well, there's two problems.
(31:43) [supply-chain rerouting cost discussion] >> Okay. Speaking of um policy shifting and roots changing, this is a piece that you wrote on Prinsights. We have a tungsten problem up 900% in 12 months on Chinese export controls, US defense law and the July 13th White House deadline.
(32:13) This is a good example of what happens when we have a confluence of policy changes as well as supply chain disruptions. Tell us what happened to tungsten. >> Yeah. So, I mean, tungsten is a situation where um it's it's basically the heaviest metal, which which means it also is is is sort of one of one of the strongest on the table of elements.
(32:35)  Um and it's had a real squeeze. Um it it's a bit off the 900% but basically China um decided to really control or basically stop the movement of processed tungsten. Again it's it's about processing not even necessarily the raw material. Um the United States department of defense is trying to push more stockpiling at the same time.
(32:53) There's less distribution. Um and there is a July 13th White House deadline um you know in about a month or so around the corner um to look at uh somehow breaking or or or sourcing tungsten from places outside of China not not just the physical um raw material but also any of the products down the supply chain you know whether that's that's rounds of munition that use it drones chips etc.
(33:19) um and potentially ban some of those, but but that doesn't necessarily first of all that will squeeze prices up higher. Um and second, just because you ban something, which we saw in tariffs last year, doesn't mean all of a sudden you can process it. And so there's a strong um possibility that China even up some of its export controls because this is an important metal.
(33:38)  Um and that's one of the reasons we're seeing that that squeeze. Now, now there are a couple of companies outside of that grip um that that we're looking at that are sort of not household names um that we're evaluating to see how they will um fit between now and and that July 13th deadline.
(34:20) >> Okay. Uh turning now to the Fed. So about a month ago, there was no chance of a Fed cut before the end of the year. Now, the CME Fed Watch tool has added uh a significant probability to a hike before the end of the year... All the way up to 30% by October and 38% by the end of the year. Now, this is a regime where we all expected the uh next fed chair to be a little more dovish.
(35:03) Trump has been adamant about firing Jerome Pal to replace him with somebody who's going to cut rates and now the markets are going to think that the next Fed chair Walsh is going to do the exact opposite. Do you agree with markets? >> Yeah, I don't I don't think anything happens at at the first meeting.
(35:20)  Um but um and I think that that's really market expectations as well. Um I think if we look at Kevin Marsh's um past behavior um when he was when he was just on the on the board um of governors that he um only one time really rejected a quantitative easing type of of approach. So he you know that that's part of the reason for looking at what can be done at the long end of the curve... no I don't think we're going to see um a rate cut obviously I think we'll stay in terms of a rate hike.
(35:51)  Um I I think Wars is going to be put in this position where he has to start using like Powell terms such as data dependent because there has been there has been a shift up in inflation because of the war and right now there is no resolution... you're still going to have at least a month or two of filtering through over 3% inflation. The Fed likes it below 2%.
(36:35)  So so I do believe that. On the other hand, I still also think we're going to see some movement in the long end of the curve, which could offset the hike because honestly, a 25 basis point hike really changes nothing... a 25 basis point hike doesn't really actually matter um as much as doing something with the long end of the curve.
(37:20) >> [2021-2022 analogy] everyone expected the Fed to start doing something when inflation hit 9.1%... and they didn't until later in 2022. Look what happened with the S&P 500... 2022 was just a bad year for all assets... markets right now are not pricing in a 2022 scenario. >> uh they they'll be bad for risk assets, but they'll be good for for commodities because the idea of inflation as as a dampener to commodities right now is is kind of just a convenient narrative to explain why some of these paper versus
(38:14) supply trades are are where they are, for example, in silver... we are still significantly below those types of inflation numbers, the 9%, the even 7% when the Fed started hiking... I think we continue to see the upside honestly in the markets um with the exception of these volatile periods.
(39:52)  >> I'd like to play for you a short clip from the March FOMC meeting. [Powell clip on supply shocks: "we've had a lot of practice thinking about supply shocks in the last four or five years... it's a very different thing and a very much more difficult thing... has the world changed? I don't know that the world has changed in a way that there'll be more supply shocks... in fact, we have seen more supply shocks in the last 5 years than we've seen in many years before that. It's a fact."]
(41:29) >> It's interesting cuz the book that I'm actually writing right now um Commodity Wars is is specifically about um the weaponization of the supply chain um and and from an international perspective... when you have a geopolitical um issue or or military warfare issue of country against country um and any of those countries control any part of a major supply chain, we're going to see spikes.
(42:30)  this idea that we've seen more um in the last 5 years than beforehand. Yes. The the the fact is we are heading into more structural deficits of supply. We are heading into periods where there is less stuff coming out of the ground to process than there has been before. And if you couple that with more geopolitical power plays, some of which is why we have gold as a you know top reserve right now of central banks...
(43:23) we are going to see more um weaponization of parts of the supply chain whether it's export controls, choke points, um keeping mines inside of countries using it as a bargaining chip... we are in a period right now where we'll um we will see more and more of that... we we are net deficient of supply of what we need to continue moving forward.
(43:50)  >> If you had to rewrite or even add a chapter to permanent distortions... [discusses her trilogy — All the Presidents' Bankers, Collusion, Permanent Distortion — and the new book Commodity Wars, chapter 7 of 10, due to publisher end of year] >> I talked about hard assets, real assets as being the beneficiaries in the end of permanent distortion.
(46:17) >> Where can we find your work? >> come to prinsights.substack.com... it's where our premium portfolio services are and um investment suggestions and analysis. >> Thank you very much. Please follow Nomi in the links down below and we'll speak again soon. >> Thank you so much.