"If You're Worried About A Bear Market, Buy Bonds Now" | Lance Roberts

The host says compute capacity—supported by electricity production, data centers, and chips—could give countries a substantial advantage in the US-China AI competition, while the speakers describe access to computing resources as a potential policy lever for the US and China. That strategic importance does not settle the investment case: one speaker says AI returns over the next couple of years remain uncertain, with some potentially taking 15 or 20 years to materialize.

The speakers frame fiscal policy as a trade-off between monetary discipline and economic flexibility: one argues that the Fed should refuse to monetize debt to pressure Congress to control spending, while another says limiting M2 growth under a gold standard would impede growth. Lance Roberts offers a different route to making debt productive, arguing that a government-utility partnership to rebuild the grid could employ people and generate revenue while users pay for power over time.

Lance Roberts argues that rate hikes cannot directly reduce oil prices and may instead weaken demand, while he says downward PCE revisions to a 1.6% average suggest the Fed may be making a mistake by hiking rates. He warns that raising rates during an oil spike could add pressure on consumers, and says the Fed may hold at its next meeting—particularly if oil prices are falling—to assess the prior hike.

Roberts describes a strained consumer backdrop: companies are retaining workers but hiring cautiously, while weak job creation can weigh on spending; the 0.9% rise in retail sales was primarily driven by gasoline prices, which leave less income for other purchases. He says households are also drawing on savings and investment assets, with a savings rate around 3.8%, and distinguishes disinflation from falling prices, noting that consumer prices remain about 29% above 2020 levels.

Lance Roberts links Germany's energy choices and dependence on Russian gas to economic harm, and says limited AI investment could leave European countries behind. He also argues that limited investment in some European economies could mean slower future growth and earnings, while emerging markets' reliance on US consumption informs his stated preference to underweight international markets.