Gold & Markets in the Fed’s Grip | Dennis Gartman’s Bold Predictions

Dennis Gartman 0:00
I think we’re going to have a quasi soft landing and in 24, and I think the copper the inability for copper to get through $4 per pound in US dollar terms is I think, indicative of the fact that they a quasi soft landing or soft recession is is incumbent.

Eric Chemi 0:22
Welcome to Wealthion. I’m Eric Chemi. Today, we have so much to talk about because of what the Fed is doing and how it’s impacting not only just the regular equity and bond markets, but the commodity markets as well. My guest today is Dennis Gartman. He’s been a Wall Street fixture for nearly 50 years, the editor and publisher of the Gartman Letter that anyone who’s an investment professional, they know it, they’ve probably been a subscriber a reader. It was certainly when I was a young employee working in my hedge fund job the billionaire owner said to everybody, to me, especially on my first date, sign up for the Gartman Letter it’s mandatory reading when we’re here so I’m, I am just thrilled to have Dennis Gartman here you’ve done so many things. I know you’ve been taught classes to people working at the fence. So they’ve been learning from you about the things that they’re doing. Dennis, thanks so much for joining me today.

Dennis Gartman 1:10
It’s an honor to be asked here. Thank you for having me on. It’s a pleasure and let’s see what we can do with this today.

Eric Chemi 1:16
Let’s see. So first thing you know, here we are in December 1 Half of December gold is hitting all time highs right and a lot of people say you know nominal all time highs not not inflation adjusted but nominal highs, people are buying gold and usually it means okay, the weaker dollar I don’t trust the economy, I need hard assets. I need something safe even though gold doesn’t yield anything you can get treasuries for 5%. What is your perspective on watching this gold rush over here?

Dennis Gartman 1:41
I’ve been bullish on gold for the past several months, actually, for the past several years predicated upon the fact that the Fed had begun the process of easing monetary policy 90 And 20 months ago. And that was going to be I think supportive of gold prices is clearly has been supportive of gold prices. And as the chairman of the University of Akron is endowment, I actually got us to do something very unusual for an endowment. We sold 3% of our equity position almost 24 months ago and bought a 3% position in gold, which has proven to be quite valuable, it’s it hedged, our inflationary concerns at that point and and I continue to recommend owning gold as a as a hedge against geopolitical circumstances and inflationary pressures that seem to still be extant in the market. So I’m quite bullish of gold. Now, having said that, yesterday, Monday was quite an extraordinary day, the fact that you had gold up almost $100 an ounce, and in finished almost $50 An ounce lower, you had what the technicians will call an outside reversal Day, which tends to mark important tops, let’s just say there’s an interim top that has been put in the gold market for a while, I doubt that we’re going to take gold back below $22,000 per ounce. But we we got up to $2,270 per ounce yesterday morning. And now we’re at $20 in 2031 3030 35 or $40 an ounce, quite a quite a move in the last 48 hours. So I still been bullish on gold have been for a while and I continue to hold it for the university and for my own account,

Eric Chemi 3:14
how far does it have to rise before you are not bullish anymore. And maybe you’re calling up your endowment buddies and saying it’s time to start lightening up on gold.

Dennis Gartman 3:24
$3,000/oz seems to me to be a reasonable expectation over the course of the next several years, it’s not going to get there next week, it’s not going to get there next month. It’s not going to get there this next year. It’s not going to get there in the next four or five years. But I think over the course of the next 10 years, gold gets to $3,000 per ounce without too much difficulty. So I will continue to think that the bull market move from the lower left to the upper right, which began several years ago is still excellent. And I think $3,000 An ounce is a reasonable target time shall tell. We’ll see how things are prevailing at the time, we’ll see how the monetary authorities are acting at the time. We’ll see what geopolitical circumstances are prevailing at the time. But let’s call $3,000 An ounce a reasonable target for the next several years,

Eric Chemi 4:05
you know, help me understand because I’m certainly not a gold expert as much as you are. When I see easy money, right? When I think about the old version of the fed the QE the 0% rates, all of that, it would make sense to me that, okay, gold would rise because it’s very inflationary. You want some hard assets, you want things that are going to move with nominal rates. In a world where they’re trying to cut down on inflation, they’re trying to do this 5% thing? Doesn’t that hurt hard assets like gold that look where am I missing the plot here?

Dennis Gartman 4:34
Actually, gold has two there’s two reasons to buy gold one is for inflationary protection, the others for geopolitical risk protection. And I think at this point, the geopolitical risk protection is probably 70% of the valuation of gold. Clearly the Fed has begun in the course of the past several months to be to take on a much tighter monetary policy. I think that’s about to end probably sometime in 2024 2025. We’ll we’ll go back to the fact that the Fed will begin easing money again. But for the last 19 months, the Fed has been tightening monetary policy and has taken the overnight Fed funds rate from zero to call it five and a quarter, which would be unbalanced deleterious to gold prices. You have to be impressed. However, the fact that gold has risen, even, even despite or in the light of the Feds arguments that wishes to get inflation back to below 2%. So when something doesn’t go according to what you think common sense would would originate, you have to be impressed. So I’m more and more impressed by gold’s ability to hold its strength, despite the fact the Fed has been has been detrimental deleterious to gold prices over the course of the last 19 months.

Eric Chemi 5:41
It’s true it’s it’s up in spite of that

Dennis Gartman 5:44
what it’s up in spite of that it’s exactly the point.

Eric Chemi 5:47
What about Bitcoin? Everyone calls it the digital gold it’s another place for when they think about inflation and geopolitical assets as it competed for market share against gold in the sense of Oh, I could buy gold but now I can buy bitcoin instead. Do you? Are you seeing that dynamic?

Dennis Gartman 6:00
Yes, there’s clearly that’s that’s a circumstance that prevails at this point. Bitcoin is the kids gold, gold is the old folks gold and I have not I don’t understand Bitcoin for the life of me, I shall never understand the theory and for the life of me, I understand the computer technology behind it. But why somebody would wish to buy a an ethereal replication of money out in the in the atmosphere somewhere, is really quite beyond me. So the kids get it, they understand it, the under 35 seem to get hold of it there they’d rather on that than gold. We all folks, we owe the and the old guard will continue to hold gold. It’s just no question. Bitcoin and Aetherium and the rest of them are competing with gold and you have to be impressed. That’s another reason to be impressed by gold’s ability to hold its gains, despite the fact that the kids are buying Bitcoin

Eric Chemi 6:55
it’s funny if gold were using some good bitcoin is kids gold, or you could say gold is old people’s Bitcoin. Yes,

Dennis Gartman 7:04
I will go in either direction. That’s exactly correct. Gold is old people’s Bitcoin.

Eric Chemi 7:10
So this is what we this is the Bitcoin we had before kids came around with for the Internet, we couldn’t do couldn’t do it like that. The other commodities like when you think about copper, you think about silver, you think about some of the other metals from the mining metals as well. Where do you see in terms of the Feds impact on these commodities? Is there anyone in particular that standing out to you?

Dennis Gartman 7:34
First of all, let’s talk about silver. I don’t trade silver, I let other people trade silver silver, so far too volatile. For me as an old guard, old guy,

Eric Chemi 7:42
you don’t trade it now or you never traded it?

Dennis Gartman 7:44
I used to trade it in my 20s and 30s. I haven’t traded it since I’m 73 years old and I haven’t traded silver in probably 30 years. Okay, I leave that to people who are more aggressive than I am more facile at trading than I am more amenable to volatility than I am. I’ll leave that to others copper makes sense to me as a as an industrial metal copper. As we used to say copper has a master’s degree in economics. People used to call it and said the copper had a PhD in economics, I say that copper, tin, aluminum. And the industrial metals when aggregated have a PhD in economics. They tend to tell you they tend to strengthen in strong economic environment, they tend to weaken and weak economic environment, they tend to lead in both directions. And I think that the fact that the copper in the past several days has begun to deteriorate tells me that weak economic environments are about to happen. So I’ll trade copper. As an industrial metal. I’ll trade aluminum as an industrial metal, but I’ll leave it to wiser, saner, more aggressive traders to trade silver, the volatility of silver just bothers they live in tarnation out of me,

Eric Chemi 8:50
if you if you ignored the volatility and you just looked at the general trend on silver, is there any information that it can tell you in the way that the copper is giving you economic information?

Dennis Gartman 9:01
In bull markets in the metals? There’s no question if gold’s going up, silver will go farther and faster if gold is going down, so go go down farther and faster silver leads gold in both directions higher or lower. And the fact that silver has been leading over the course of the past several months to the upside over gold keeps me involved in the in the metals market on a bullish from a bullish perspective. But it’s again, the volatility of silver bothers me greatly. But in bull markets, silver will outpace gold and bear markets silver well paced gold to the downside. Hey, it’s been that way for for decades. It should always be that way.

Eric Chemi 9:36
We’ll silver top first and then go down first before gold tops and goes down. Like when you think 10 years from now. Usually

Dennis Gartman 9:43
that’s the way it happens. Okay.

Eric Chemi 9:46
The so the coffee I always thought it was Dr. Copper, right? It was the copper at the PhD but you’re telling me copper by itself is a master’s in economics, but you need the 10 You need the aluminum you need everything else together to get the full PhD course work.

Dennis Gartman 10:00
That’s the theory you get your thesis written when you when you use aluminum, tin, zinc, copper and look at them together. I became famous a couple years ago when I said that copper merely has a master’s degree from a secondary institution

Eric Chemi 10:18
the signals that you just mentioned, and I want to get into that more, that are starting to deteriorate. So are you using that, or looking at that as Okay, we are starting to see maybe some kind of hard landing some kind of recession, some kind of pullback, because I’m seeing a lot of mixed signals, we have these conversations, we got some real hardcore bulls, and we’ve got people that say 80% chance of a hard landing in 2024, the real wide range of spectrums here,

Dennis Gartman 10:43
I think we’re going to have a quasi soft landing and in 24, and I think the copper, the inability for copper to get through $4 per pound in US dollar terms is I think indicative of the fact that they a quasi soft landing or soft recession is is incumbent. And that’s that’s what’s coming. So that’s been my thesis for a while I continue to hold to it, Tom shall tell whether it proved to be right or not.

Eric Chemi 11:09
What are the other factors in that thesis, what other data points you’re looking at?

Dennis Gartman 11:13
The fact that money growth has been negative over the course of the past several months bothers me greatly. That’s one of the reasons why I tend to err bearish on stock prices. For a while the Fed had been allowing the monetary aggregates to move violently from the lower left to the upper right. And the in the course of the past year or so the monetary aggregates, especially m two and beyond have been moving from the upper left to the lower right, moving down going negative in many instances, and so to as the volume, the velocity of money, and that bothers me, it’s one of the reasons why I’ve been wrong in November about the stock market. I was right for a long period of time and being bearish. But I’ve been wrong in November. And I admit that openly and without hesitation. But I think that the fact that the monetary authorities have been have allowed the monetary aggregates to go into negative territory, I think should be illustrative of weakening and weaker economic environment as we go forward time shall tell but that that’s the one thing that I look at more than anything. I grew up as a monetarist. I’ve always been a monetarist. And I shall always be a monetarist. I think that monetary theory is the is the better way of forecasting economic activity. And the fact that the monetary aggregates have gone to negative numbers bothers me greatly.

Eric Chemi 12:29
What does that mean exactly? When you say a monetarist? Because I’m not even sure I 100% know, when I hear that word how I should think about it. I’m sure some people in the audience are probably thinking, what does that mean relative to what are some of the other frameworks out there?

Dennis Gartman 12:42
Well, Keynesian economics, means that pays attention to the fact that governments spend and increase spending or decrease spending depending on their forecasts for economic environments, a monetarist at basis at basic cities looks only at the the the data that the the monetary authorities put out regarding the creation of or the the expiration of monetary monetary figures. So I watched him too and I watched the monetary base more than anything else. The monetary basis, the Feds purchases is dictated by the Feds is purchases or sales of Treasury securities. And for a long period of time they were buying Treasury securities adding reserves to the system on an almost daily basis. And lately they have been rolling off those those assets letting those assets disappear or or or mature out, which decreases the amount of money in the system. A pure monetarist would say that money should grow at a percentage, a reasonable number of reasonable accounting for population growth, and non inflationary economic growth, say the population goes 2% and non inflationary economic growth grows 2% Then you should create 4% More money every year to accommodate those two major factors. When you go to five and six and seven and 8% growth. You get inflation when you go to two and one and 0% monetary growth, you get deflation and an economic weakness and so that I think monetarism, to me makes eminent reasonable plausible sense.

Eric Chemi 14:18
Okay. Okay. And so, you’re right November, I think shocked a lot of people, right, kind of right from Halloween to December 1, you saw this massive uptick in equity markets. But the major data hasn’t changed. The empty data is still the same that the major monetary data hasn’t changed. So you wonder what’s going on with this investor speculation that we have stocks almost 10% in that month, right. That’s that’s a massive move. For fundamentally no difference in the underlying thought process.

Dennis Gartman 14:49
I couldn’t agree more. It’s exactly my major concern. The the Fed is actually decreasing the amount of money that it puts into the system, it’s actually allowing about $65 billion worth the Treasury securities to roll off to mature each month. That is money that simply has, for all intents and purposes has quite literally disappeared. And yet stock prices continue to go up. The economy seems to be doing okay. I’m stunned by this fact. And I have been wrong since late October through here we are the first week in December. And I had been manifestly consequentially wrong about the direction of stock prices, no question about that.

Eric Chemi 15:25
How does that work, then? Let’s say you’re talking about that endowment, university, Akron, you, you got them into gold, but it’s all of a sudden, the rest of your thesis may or may not be playing out, right. It’s like, okay, if I’m wrong, what does that mean for students and faculty? And we’ve got to invest this endowment, but it’s not just your opinion, how do you guys balance those discussions for these long term investments?

Dennis Gartman 15:48
Well, first of all, as an endowment, you take a much longer perspective than I as a trader would take. We look at 40 and 50 year, periods of time, 10, and 15, and 20, and 30 and 40 year periods of time. And there’s no question that over the over 1015 20 years, stock smooth, especially American stocks move from the lower left to the upper right, it’s just that’s the way they go. So for an endowment to take two or three or 4% of its of its endowment out of out of stocks and move into to real assets. That’s a consequential That’s an unusual change in environment. That’s, that’s a big move. Nobody would ever go to 0% percentage of zero percentage of their endowment in stocks, they’d always keep it at least 50 or 60%. And then it just depends on which kind of stocks are you buying? The, the Russell, are you buying the s&p Are you buying the NASDAQ, that becomes the only really consequential terminology or investment posture change that you make, we took, we actually took 10% out of the stock market, put it into T notes and T bills that paid off when in one year and two year note periods of time, predicated upon how much money we need to give back to the student body. And at the November meeting, we actually move that 10% that we’ve taken out in two years ago and moved it back into the equities market. I argued against it, but I was overwritten by my membership. And were they they were smarter than I was.

Eric Chemi 17:17
That’s that’s the crazy thing, right? You can look at the data. It’s sort of like the way you said gold, gold is up in spite of these things that would suggest that gold would go down. It’s like equities are up in spite of these things that you would suggest make equities go down.

Dennis Gartman 17:30
Yes. And I have to I fight that every day as I sit here and write a newsletter for once every two weeks. As I trade my own account, as I handle the the the information for the university. I am conflicted, confused, dismayed, distraught and wrong.

Eric Chemi 17:50
How can investors deal with that themselves? And most people don’t have your level of success, experience connections, wisdom, they’re not writing a newsletter. They’re dealing with the same uncertainty. How have you in your career worked on? I think I’m right, but the market is suggesting I’m wrong. How long do I go before I throw in the towel and give up? Because usually they say the market what is it provides the most painted the most number of people, you know, the moment that you throw in the towel, that’s going to be the top right,

Dennis Gartman 18:23
no question about that, that’ll that will clearly be the top. throwing in the towel is always the the the mark of the end of the move. We used to say when I had my seat on the Chicago Board of Trade, we used to say that the market will do the most damage to the most number of locals on a daily basis. The markets in general do the most damage to the most number of traders and investors on a daily basis on a month weekly basis on a monthly basis and on a yearly basis. The one thing that I pay attention to more than anything these days. I love the CNN fear and greed index. It’s I think one of the best indicators of overbought oversold conditions in the stock market. And when that index gets above 70 and turns down, that tends to mark the top and stock market activity when it gets below 20. And turns up that tends to mark the bottom of kind of stock prices and tends to give rise to a bull market. We are at 70 right now 72 I think in the last iteration, so it tends to make me want to stay bearish for stocks. But as I said from October from the last week of October to the first week in December, I’ve been patently wrong and a CNN index is starting is making me stay wrong for right now time shall tell whether it proves to be correct. Correct.

Eric Chemi 19:37
Is there an amount of time or a data point How long will you stay because I I think it’s about for people watching for people listening and think I agree with you. I agree with Dennis Cartman. But I’m getting scared. I’m just going to miss this entire move. It’s going to run away from me. And yet I’m scared that if I come in, I’m going to come in on the top so I’m trying to get a sense for like, if you’re that viewer watching and agreeing with you Dennis, what advice do you have for them in terms of how long? Do they stay strong? How long? Do they keep that perspective up before they before they eventually have to look at some other data point that says, you know, maybe you’re wrong, and you’re never going to be right on this particular move?

Dennis Gartman 20:15
If the market moves 7% against me, I have to, I have to start taking a different outlook, no question. And the market has moved 7% against me in the course of the past month. So actually covered, I’ve been a little bit short on the only trade that I have on in my own account at this point, is I’ve been shorting stocks and long Oh gold, which until which through Monday morning, was working really quite quite pleasantly for me, right. In since Monday afternoon, it’s moved a little bit against me one or 2%. And I’ve covered a few of my shorts and covered a bit of my gold and gotten a little bit smaller over the course of the past 48 hours, just because the market has told me that I’m wrong. How much longer will I will I stay on the short side of the stock market, another one or 2% to the upside, or making a new high on good volume will cause me to reduce my short position again, time shall we shall see. But what what I find amusing and most affecting is that the rallies have come on light volume, the Brexit have come on heavy volume. And that tends to be the historical tendency of a bear market, not the historical tendency of a bull market. So there’s there’s a lot of technical indicators that that point to being overbought, and overextended to the upside. Right now, as again, I’ll say, I’ve been wrong. I’ve

Eric Chemi 21:32
been with you. At home, we had many discussions, because a lot of the notes that, you know, someone in my household that was reading a lot of bearish notes. And so we started to move, move towards a lot of T bills getting out of equities. And and so now you’re like, I thought it was going to come back down. I thought we would have an opportunity to get back in but but it hasn’t happened yet. I’m afraid that the moment that we finally give up, that will be the all time high and it’ll

Dennis Gartman 21:57
never want that I give up will be the all time high. Yeah, yeah. You know, a

Eric Chemi 22:00
lot of people we think about commodities, in a lot of ways they think of it like foreign exchange or options. You see more speculative gambling quick hitters in terms of the investment community, people that know that equities, you stay for the long run. But I see a lot of people who think they can make a quick buck on the volatility of commodities. But people really lose their shirt that way, what’s your advice for people that they think they’re gonna get involved in commodities trading, or they’ve done a little bit but they want to do more.

Dennis Gartman 22:30
The first thing I’ll tell you is I think commodities are easier than the stock market to be quite honest, because it really they depend upon hard data, crop sizes, foreign buying the movement of the dollar higher or lower, I actually think that commodities are easier to understand then, then come on, then the equity market is for example, one of the rules that I follow when it comes to trading crude oil is watch the term structure watch how the front month trades against the back months in a bull market. In a good conservative bull market, the front month will always rise more than the second, third, fourth, fifth, six, seven future. And in a bear market, the front month will always lose more than the first, second, third, fourth, fifth and sixth future. So watch how the term structure as I’ve always said, term structure is worthy. The wizened fill of trade money leaves us footprints. And we two months ago, as crude oil was getting to 85 and $90 a barrel, the front month began to lose relative to the second, third, fourth and fifth contract. That’s not how a good bull market should act. To me that was an indication that the bull market was about to run, it’s about to run to the end of its tenure, and that crude oil prices were likely to continue to start to move lower. Now we’ve gone from having what’s known as a backwardation where the front month was above the second, third and fourth and fifth, to where the front month is now below the second, third, fourth and fifth futures. We have a contango market and contango is are always bearish. So I think that crude oil, for example, is much easier to trade than then the equities market because of the inherent functionality of the term structure. I become I’m rather bullish, for example of soybeans at this point, not because of the crop size, but because soybean meal the major component of soybean crushing efforts, has gone to an inversion. The fun months are above the back months and that to me is you can’t have a good bull market in soybeans unless you have meal inverted and meals inverted. I think that’s impressive meal. Good bull markets and soybeans always have meal leading on soybean oil and meal has been leading oil to the upside and loses less than on days on the downside. So I think that there are commodities are are actually easier for me to understand. Understand, then the equities market on balance there are there are rules that apply. And I guess simply because of the fact that I grew up in the My first job out of graduate school was For a cotton company, and I learned to watch the term structure on cotton futures, I applied it to the, to the crude oil futures I applied it to the soybean meal and soybean oil and soybean, soybean grain markets, and they’ve been they work it gets to me, it’s consistent to me there’s, there’s visibility to me there’s there’s transparency, to me, there’s a greater consistency of effort that our income that’s coming in commodities. Now, the problem with commodity trading is that you do it on such light light amounts of capital incumbent and each trade, you can trade a contract of soybeans for what $1,000 of contract or something of that sort. So the the movement, you get debited or credited to your account at the close of trading every day, your mark to the market on a daily basis, and it tends to be highly leveraged. So you have to be careful but I think that there’s merit in the in the commodity markets now with the with the ETFs. And we future in wheat ETF or corn ETF economy ETF, a crude oil ETF, you can you can make better decisions trading, you don’t have to trade the futures market with the high volatility. You can trade a much lesser volatility using ETFs that are excellent and are usually quite liquid and deepen. There’s depth in the markets that allow the retail investor I think an avenue that he didn’t have available to him 10 years ago.

Eric Chemi 26:21
Do you think there is merit and people who blindly let’s say do a long term commodities, ETF are they they’re a basket of commodities because there’s so many different kinds of commodities, right? You got plants in the ground, right cotton wheat, things that grow that you can clothe people with or feed them, then you’ve got gold, or you got metals, precious metals, you got industrial metals, you’ve got oil, commodities are such different kinds of things, but a lot of bucket them together. But by nature is somewhat liquid summer solid, some are gas, right? Some are animals and some are metals, they’re very different.

Dennis Gartman 27:00
And the problem with the basket ETFs is that they’re always long and unbalanced. Most markets are in contango most markets, the back months are traded above the nearby futures. And by buying deferred futures, you basically on balance are going to cost yourself money over time, right. So I’m not a proponent of the ETF baskets of commodities. I’m much more proponent of the ETFs, or the individual commodities, they that they make greater sense to me the the fact that you’re paying a huge contango to own most of the commodity market, most of the commodities in the, in the baskets, to me is a huge tidal shift tidal wave that you have to overcome, that’s very difficult. So I tend to tell people avoid the baskets of commodities, and focus either on the futures or focus on the individual commodity ETF. That

Eric Chemi 27:50
makes sense, like pick a wheat ETF don’t pick just an ag basket of a whole bunch of things that go into money. Okay. Before we go, because you mentioned oil a little bit, we didn’t get a chance to talk about what are you seeing that you mentioned, based on that term structure? You’re looking at a bearish oil right now, is that right? Yes.

Dennis Gartman 28:08
And I’ll continue to look bearishly on crude oil until such time and there shall come a time when the market is trading lower, and the fun month goes down less than the back months, that will be the signal that the bear market is running its run its course. So keep an eye on that watch as crude oil prices decline. And watch the front month beginning consistently lose relative to the second, third, fourth, fifth and sixth contracts back until such a time when you’re down the markets down $1 and the fundamentals down 90 cents and the second contracts down a buck 10. The third contracts down a buck 20. That’s not how a bear market should act that’s telling you that the bear market is running is about to run its duration, about to run its course and the market shifts from being bearish to being bullish. So pay attention to the to the term structure on a daily basis. Right now I continue to say that can the contango is continue to widen, the font of the term structure continues to be bearish. But there will come a time. Who knows when that time she’ll be maybe next week, maybe a month from now maybe two months from now, maybe a year from now, when you you had several days on the downside, and the front month does not lose relative to the back months. Actually a great period of time was several years ago when you had crude oil going to 100 to $125 a barrel. And for three or four days, the front month began to lose relative to the second, third and fourth and I actually wrote at the time that was going to be the top and the crude oil market it went higher for about five more days, and then it broke violently. The term structure leads in almost every commodity pay attention to the term structure in storable commodities the only place that that doesn’t make sense is in the gold market because the term structure and gold is simply an interest rate consideration nothing more than that but in crude oil in cotton, and soybeans and wheat and corn in cattle in cocoa and sugar. The term structure dictates the price movements and

Eric Chemi 29:58
then lastly, Wednesday, coming up Wednesday, the 13th. We’ve got the final Fed decision of the year, we’re expecting nothing there. What are you looking for? Obviously nothing. We’re gonna get some commentary. We’re gonna hear what they have to say. But we’re not expecting actual movement in that, in that policy rate. What are you looking for? From that decision to SET set up your thinking for 2024 19

Dennis Gartman 30:20
months ago, when the overnight Fed funds rate was at zero, I said that the feds are going to continue is going to start the process of tightening monetary policy. And it was almost laughable at the time. But I said that crude that the overnight Fed funds rate will go to 5%. It’s gone to five and a five and a quarter. There’s probably one more tightening maybe in the Fed, the Fed does not want to be the Grinch at Christmas and probably will defer next week and use rhetoric to tighten them on the market. But I doubt that they move them out of the overnight Fed funds rate to another quarter percent higher. Maybe after the turn of the year. They’ll go one more time. But that’s the most they’ll take it. They’re done for all intents and purposes. But 19 months ago, I said they get to 5% People laughed, it seemed laughable at the time, we’re there. Now we’ll see what happens. But I don’t think they’re going to tighten much more. If anything, maybe one more tightening. After the turn of the year. The Fed does not like to be Grinch at Christmas. So they’ll pass next week. That’s

Eric Chemi 31:17
That’s funny. They don’t want to be a Grinch. I didn’t even think about that that Christmas, that Christmas would actually impact their behavior. That is so good. I appreciate the clarity of your thought how short and sweet your answers are because you really lay it out so nicely and it sounds like your advice to people right now you if you have that one trade like your one trade right now. Short s&p long gold maybe that’s the main takeaway. If you’re one thing today, that’s the thing to learn.

Dennis Gartman 31:47
That’s the one thing I have on I’m short the stock market I’m long gold, and unbalanced. For the past month and a half. It’s actually worked for the past 48 hours, it’s worked against me a little bit. I’m considering lightening up a tad time she’ll tell I’d like to see spot gold trade above 2020 45 before the end of this week, and I think we’ll end up seeing the s&p trade under 4500. If it starts to move back in my favor, I won’t hesitate. But to add to the trade if I can leave the people out there one one piece of advice. It’s an older the line but it works in life and it works in trading, do more of that which is working and try your damnedest to do less of that which is not add to winning trades, cut back on losing trades. That’s the secret to trading. And if you can, if you do it that way, you can be right only 40 or 50% or you can be right 40% of the time and still win. So do more of that which is working and try your best to do less of that which does not add to winning trades, cut back on losing trades. That’s the secret to trading. That’s the secret to investment.

Eric Chemi 32:49
Thank you so much. Dennis Garmin, thank you so much for joining me here on the show today. Eric, thanks for your time. And for those of you watching and listening. And you’re not sure you get your finances right like you heard everything we just talked about, you can go to wealthion.com you can fill out a short form there. If you want to get connected with an investment professional that Wealthion endorses. That’s free. It’s a public service we provide so you can help get your family’s finances on track, no obligation, no commitment. You can just have these conversations. If you want to talk to a professional who can help you figure out what you need to do if you don’t want to trade all these things yourself like we heard about how volatile silver is you probably don’t want to mess with that yourself. If you liked this video if you liked this conversation between me and Dennis Garmin please like it subscribe it share it forward it do all those things that way more people can watch and more people can listen. Thank you again for joining us today. America chummy we’ll see you next time.