Podcast: Asset Price Inflation, Retail Price Inflation, or Both?
President Trump is currently testing the legality of firing a key Federal Reserve official his administration has accused of mortgage fraud.
Earlier this year, he looked into whether he could fire Federal Reserve Chairman Powell— who has so far ignored Trump’s demands to cut rates.
This isn’t the first time a President has clashed with the Federal Reserve. Back in the 1960s, Lyndon Johnson was furious when Fed Chairman William Martin refused to play along with his spending spree.
Johnson wanted guns and butter—funding for the Vietnam War and his massive “Great Society” welfare expansion. When Martin warned that the economy was overheating and refused to cut interest rates, Johnson lost it. He even asked the Attorney General if he could fire the Fed Chair. He couldn’t.
So instead, Johnson used the bully pulpit to apply pressure. He undermined Martin publicly, pushed for lower rates, and demanded more spending from Congress.
The result? A short-term boom that quickly turned to stagflation. Growth flatlined. Inflation soared. Bond yields spiked. And foreign governments started dumping dollars for gold.
If that sounds familiar, it should.
I predicted a couple weeks ago that with pressure from the White House mounting, the Fed would eventually fold.
And after Friday’s speech at Jackson Hole, that prediction is coming true.
Chairman Powell didn’t cut rates yet. But he cracked the door wide open. The central bank is capitulating.
And this is music to the Treasury Department’s ears.
The US government will spend over $1.2 trillion this fiscal year just to pay interest on the national debt. So naturally the White House and Treasury Department are keen to bring interest rates down as quickly as possible.
So it seems like a foregone conclusion that the Fed is going to use its key policy tool and cut the Federal Funds rate. Unfortunately that’s probably not going to be enough.
We’ve talked about this before. Rate cuts alone won’t get the job done—especially not with long-term yields still elevated. The Fed can nudge the short end of the curve, but they can’t just snap their fingers and bring the 10-year or 30-year down to 2%.
We ran the numbers, with the help of Grok, and the bottom line is that it would take about $10 trillion in newly ‘printed’ money to push average rates down to 2%.
Even then the annual interest bill would be ~$750 billion. But even that’s more manageable than $1.2 trillion.
So my latest prediction is that the White House will soon start calling for the Fed to begin a new round of Quantitative Easing, i.e. money printing, to make this happen.
The question is—what happens when they do it? What happens when QE begins again?
In today’s podcast, we break this down by looking at two recent episodes of inflation.
After the 2008 financial crisis, the Fed printed trillions of dollars. But what we really saw was asset price inflation. Stocks, bonds, crypto—everything rocketed to all-time highs.
Retail prices, on the other hand, remained flat. In fact inflation was so tame during that period that Businessweek magazine eventually ran a famous cover story proclaiming the death of inflation.
Then came the pandemic. Same script—massive printing. But during that 2020-2022 period, we saw both asset inflation and retail price inflation.
In today’s podcast, we explore some of the key differences between those scenarios. And we discuss whether the 2026 Fed Quantitative Easing cycle will result in asset price inflation, retail price inflation, or both.
We talk about:
- The post Global Financial Crisis Energy Boom: After 2008, US shale discoveries brought the energy equivalent of multiple Saudi Arabias online in just a few years. That flood of cheap energy helped keep production costs—and consumer prices—low, even as the Fed printed trillions.
- The lack of global dollar competition in 2008: Back then, there was no BRICS coalition, no widespread de-dollarization, and no credible alternative to US Treasurys. Foreign central banks eagerly bought US debt, soaking up the excess dollars and keeping inflation in check.
- That meant massive international demand for dollars: Quantitative Easing worked in part because much of that liquidity got exported. Dollars flowed overseas, where they inflated asset prices in global markets—but didn’t push up rents or groceries in Topeka, Kansas.
- The Pandemic-era ‘printing’ was different:
- The money went directly to consumers, not just into bank reserves
- Energy policy turned anti-supply, driving up input costs
- Dollar dominance is now openly challenged—less demand, more inflation pressure
Given these differences, we think the case for retail price inflation is strong.
What kept prices in check after 2008—like cheap energy and strong foreign demand for US debt—simply aren’t there anymore. This time, the dollars are more likely to reach consumers.
But we’re also expecting asset price inflation, especially in real assets.
Gold could easily triple in price as faith in fiat currencies deteriorates. Gold miners—still trading at bargain-basement valuations—stand to benefit even more, with many still paying high dividends and trading at low single-digit earnings multiples.
And energy will be critical. For now, with new supplies constrained, it will contribute to inflation. But we also discuss the possibility that as new sources— such as nuclear— are brought online, it could provide the same relief as the shale boom of the 2010s.
You can listen to the full podcast here.
You can access the podcast transcript here.
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