Time To Buy Bonds? | Lance Roberts

Lance Roberts (0:00)

If you're really worried about a massive bear market, I'd be buying bonds.

Adam Taggart (0:12)

Welcome to Thoughtful Money. I'm Thoughtful Money Founder and your host, Adam Taggart, welcoming you here at the end of the week for another weekly market recap featuring my good friend, the portfolio manager for whom I forgot to come up with an adjective this week. Lance Roberts, Lance, how are you doing?

Lance Roberts (0:28)

I'm the no adjective guy.

Adam Taggart (0:29)

I think it's the first time it's ever happened.

Lance Roberts (0:32)

I think it is. How long have we been doing this now? Like three, four years?

Adam Taggart (0:36)

Lance, I think it's maybe closer to five.

Lance Roberts (0:39)

It could be. I mean, I'm getting closer to death every day.

Adam Taggart (0:42)

So I know. And I can't really remember because we're getting so well doing this. My memory is gone.

Lance Roberts (0:47)

Exactly. Actually, we just ran out of adjectives. That's the thing.

Adam Taggart (0:51)

Yeah, we have used the dictionary. There are no more words. All right. Well, as folks can tell, I am on the road here. I am in beautiful Fresno, California. I was here for a private event last night. Talk for a moment about it, Lance, but I got to spend the evening with Dr. Thomas Honig, who was the former CEO of the Kansas City Federal Reserve, then served on the Federal Open Markets Committee during the Bernanke era. He actually served with Kevin Warsh, who was the now current Fed Chair. He was a director of the FDIC. He now works at the Mercator Center. Such a guy who's truly been in the room in making some of the most important economic policy decisions. Very knowledgeable about the Federal Reserve and how things operate on DC.

The kind of guy, for those of you who have seen me interview him, we just wish there were a lot more of running the show in Washington. They certainly broke them old when he left.

But also just one of the nicest guys in the world, Lance, really truly a real privilege to be able to spend the evening with him last night.

Lance Roberts (2:01)

Nice.

Adam Taggart (2:02)

Yeah. I think just very quickly, he is as critical of the Fed and a lot of our government institutions in terms of the policies that have been set over the past many decades.

He does retain some optimism that there may be a way to address these issues, dealing with the debt, reducing the amount of diminishment of purchasing power of the dollar going forward. But he admits it's a very, very heavy lift, and there's a lot of things that obviously would need to go right and need to work differently in Washington than do so now. He does, he knows them personally. He does, I think, have a very high opinion of both Kevin Warsh and Treasury Secretary Scott Besant. So he thinks if there are gentlemen who are up to the task, we've got them in place. The question is, will they be able to affect this, and who knows, and we'll be watching and rooting along the way. The key thing, there's an awful lot he said last night, but the key thing that I took away from his outlook and what he thinks needs to happen, it all basically revolves around whether we're going to get any fiscal discipline in Washington. And if you're like me, you don't hold a lot of hope for that.

But that is the thing that needs to change. And really what he sees the role of the Fed right now is really being the adult in the room and telling Congress, look, I'm not going to monetize your debt the way I have in the past, and therefore you need to get your spending under control. Is that going to happen? Who knows? I'm sure in the comment section, a lot of people here say like, yeah, when pigs fly, but it does seem that if we're going to get out of this, that's the essential component that needs to happen.

Lance Roberts (3:52)

And what's funny about that is they were having that same conversation in 1985

Adam Taggart (3:57)

I know.

Lance Roberts (3:57)

In 1990, 1995, 2008, right? So, you know, these cries for fiscal discipline is a perennial thing. And again, to your point, I mean, no, I mean, it's not going to happen. And there's too much money in politics for it to happen. So, there's no, there, you know, this whole kind of, it's a, it's a, it's a, you know, it's kind of the pied piper, you know, saying, hey, if you just follow my pathway of doing fiscal discipline, you know, things will be all better. But countries have tried it and it worked out horribly.