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Business Insider: Gundlach Warns of Stubborn Inflation and Market Jitters

December 14, 2021
Dollar Crash Gold

Article by Theron Mohamed in Business Insider

Billionaire investor Jeff Gundlach predicted in his latest quarterly webcast that inflation will remain stubbornly high in 2022, and he compared this year's frenzy around growth stocks to the dot-com bubble.

The DoubleLine Funds boss — whose nickname is the "Bond King" — also warned that if the Federal Reserve hikes interest rates and tapers its stimulus efforts, financial markets will be rattled and economic growth will falter.

Here are Gundlach's 12 best quotes from the webcast, lightly edited and condensed for clarity:

1. "The stock market, and risk assets broadly, have been supported for over a decade by the Fed's balance-sheet expansion. As we move into tapering and ultimately raising interest rates, it's turning into rougher waters for markets."

2. "It's fascinating to see charts that compare the dot-com era to some of the speculative froth today, like some of these funds that invest in very go-go companies. We have basically had the same run up as dot-com stocks did in the late 1990s. Now they have clearly rolled over and are showing the magnitude of decline the dot-coms stocks had in the aftermath of the dot-com bust."

3. "The Fed has clearly responded to movements in markets, and it will continue to defend risk assets. Money printing and money giveaways are here to stay."

4. "The US economy is not strong. It has the appearance of being strong because of the stimulus, which has never been as extreme as it is right now."

5. "It's likely that we will see economic problems with just a few interest-rate hikes from the Fed. Maybe only four or eight hikes or so, maybe it's 1% or 1.5% on the federal funds rate, that breaks the economy."

6. "The bond market seems to be sniffing out a weaker economy coming. The yield curve is .....

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