Danielle DiMartino Booth: Fed Doesn't Have a Snowball's Chance in Hell of Achieving a Soft Landing
Danielle DiMartino Booth: Fed Doesn't Have a Snowball's Chance in Hell of Achieving a Soft Landing
Palisades Gold Radio: 6-19-2024
Tom welcomes back Danielle DiMartino Booth to the show to discuss de-dollarization and its implications for the US economy.
Danielle argues that while concerns over countries moving away from the US dollar system have been ongoing for a long time, the US dollar remains dominant in global transactions due to its vast liquidity pool and lack of competition.
She advises investors to diversify during financial crises instead of doubling down on dollars. The conversation touches upon the Federal Reserve's actions, with Danielle expressing concerns about potential policy errors regarding inflation and outdated data usage.
Danielle discusses employment statistics, mentioning that hard data from the Quarterly Census of Employment and Wages (QCEW) plays a significant role in revisions to non-farm payrolls and Gross Domestic Product (GDP).
She expresses concern over the Fed's reliance on outdated data and potential late action.
The conversation also covers concerns about risks for regional banks, rising bankruptcy rates, and imminent student loan delinquencies. She also discusses signs of a potential recession, including slowdown in credit card spending, increasing charge offs, and decreasing employment levels.
Despite some optimistic predictions, she express skepticism due to the weak economic foundation and the Fed's role in combatting inflation with varying opinions on its likelihood.
Time Stamp References:
0:00 - Introduction
0:45 - Dedollarization Trends
2:47 - Global Dollar Trade
5:49 - Reserves and Data
8:57 - Fed & Global C.B. Cuts
10:49 - Fed & 2024 Elections
12:55 - Consumer 'Health'
13:58 - Fed Revisions & Data Lag
19:44 - Bankruptcies & Inflation
23:44 - Problems Not Priced-In
25:27 - Regional Banking Risk
28:47 - Bigger Banks & Losses
32:52 - Credit Card Spending
34:52 - Deep Long Recession
37:40 - Fed - Hard Landing
38:55 - Inflation Targeting
41:09 - Wrap Up
Talking Points From This Episode
- The US dollar's dominance in global transactions is due to its vast liquidity pool and lack of competition.
- Investors are advised to diversify during financial crises instead of relying on dollars. - Concerns over the Fed's policy errors, outdated data usage, and potential late action in addressing economic issues.