The REAL Reason Unemployment Is Going Up | Jim Bianco

Jim Bianco of Bianco Research and Bianco Advisors joins Monetary Matters to share his views on inflation, the labor market, and bonds. Bianco argues that the reason the unemployment rate has gone up is because the large amount of immigration into the U.S. has increased the labor force. Bianco makes the case that inflation is headed higher and bond yields now are probably headed higher. Recorded on October 14, 2024.

Chapters:
00:00 Intro
01:28 Why Rates Are Up
08:16 What's Driving Unemployment
21:02 The Labor Market's Effect on Inflation
30:51 Strong Wage Growth
34:48 Bianco Research's Bond Market Positioning
45:53 The Explosion of Bond ETFs
48:53 TIPS
53:08 "The Golden Age of Private Credit"
01:08:04 Banks and CRE Exposure
01:15:13 2024 Presidential Election: Who's Better for Inflation?
01:17:55 Consumer Credit Health

[icewa-fg]

I am 53 and retired at 50. 1 thing I did do to retire early was to get out of the 401K and IRA programs. Bought rental real-estate and I am now a Limited Partner in about 1500+ units from collabrative efforts in the fund my estate planner has me invested in. I do not work.

[philiscoolerthanu]

Ludwig von Mises, a key figure in the Austrian School of economics, would likely reject the argument that inflation arises from illegal immigrants not being employed. Mises emphasized that inflation is a monetary phenomenon, meaning that it occurs when the supply of money in an economy increases faster than the production of goods and services.

Here’s a breakdown of how Mises might respond:

1. Inflation is about money, not labor markets: Mises would argue that inflation is fundamentally driven by government or central bank policies that increase the money supply (such as excessive printing of money or monetary expansion through credit). It is not directly tied to whether a specific group, such as illegal immigrants, is employed or unemployed.


2. Supply and demand of labor affect wages, not inflation directly: While labor market participation can influence wages in certain sectors, Mises would view this as a microeconomic factor impacting specific prices, not the overall price level. Even if illegal immigrants were to enter the labor force or remain unemployed, this would primarily affect the labor market dynamics in localized sectors, not the general inflation rate.


3. Focus on government intervention: Mises was highly critical of government policies that distort markets, such as minimum wage laws or regulations that create labor market rigidities. If government policies prevent certain groups (like illegal immigrants) from being employed, Mises would see this as a distortion of the free market, which could create inefficiencies but not necessarily inflation.


4. The role of monetary policy in inflation: In Mises’ framework, real inflation occurs when the central bank or government issues too much money, resulting in a loss of purchasing power. He would caution against attributing inflation to structural labor market issues or blaming specific groups for inflation, as this would distract from the true cause: excessive money creation.



In summary, Mises would likely dismiss the financial advisor’s claim as a misunderstanding of inflation's nature. Instead, he would point to monetary policy and government intervention as the primary drivers of inflation.

[FreedomRider]

Smart guy. Enjoy listening 2 him. Always learn something -or- he confirms what I already know -or- believe.

[edmundlively]

Inflation is the direct effect of inappropriate irresponsible governmental splurging.

[artandreassen]

Jim: Have you considered that the rise in inflation is a result of the increase in Government spending brought on by the increase in immigration? As you of course are aware, we are running a 2 Trillion dollar annual deficit.

[deanbrooke]

Really good conversation. I have been expecting inflation to reassert due to sheer supply chain damage combined with the usual Christmas spending spree. But this is yet another reason why I think inflation is coming back.

[justintyme]

I think 'inflation' is more likely coming from GOV spending, transfer payments to migrants, etc. It is not working 'migrants' who are spending their money. Those people are producing goods or services to go along with their earnings. People who are working and spending do not create inflation.

[bmd]

Jim Bianco and Jack Farley are the Batman and Robin of the financial world.

[rstora]

So, the Fed rarely cuts rates just prior to a presidential election (previous times: 1976, 1984).
Why now?, the economy isn't performing that bad what's up?
What do you think Jim?

[PatamaGomutbutra]

How can immigrants were reported as unemployment ? They must be legally employed workers that had been lays off. Majority of immigrant work on low paid, temp job.

[artandreassen]

Jim: Businesses that hire workers under the table are breaking the law and should be stopped. They pay no taxes and the jobs they give are taken from legal workers. In fact, just because jobs are not counted as employed ignores that the workers they replaced are counted unemployed so they have no impact on the actual unemployment rate, it is the same.

[faithsrvtrip]

The equivalent of another state of Georgia was added. That's insane. FYI Christain conservative patriot, here

Higher prices, reduce consumer purchases which reduces production which causes layoffs. The reduced production causes scarcity of consumer goods which causes higher prices. It's a doom loop cycle.

[frankpizzo]

I'm in NYC. Is this guy telling me that 99 out of 100 migrants that are holed up in all these hotels are working off the books? 😂

[detectiveofmoneypolitics]

Detective of Money Politics is following this very informative content cheers from VK3GFS and 73s from Frank from Melbourne Australia 😊

[lawrencefeldman]

House insurance is higher than five years ago. Homes also higher. But that's changed in the last few months.
The housing market is weak and falling.
Insurance and gas prices will follow.
So inflation is going down. Ten year Treasury will be at 3.50% by mid year 2025. Tax increase on wealth will keep the ten year Treasury below 4%.

[alliedmastercomputer]

The transitory crowd were not correct. They said it was transitory for 2 years and also said prices woule come down. They are still rising and sticky...and high! They have been so wrong it aint even funny

[dialecticalmonist]

Tarrifs protected our iron industry in the 17th century and prices don't go down UNLESS THERE IS COMPETITION.

You can't simply buy everything overseas from slave labor and hope they keep prices low forever.

[wread]

Oh well, my portfolio keeps going up no matter what happens in this crazy world 😂

[geoffgjof]

Bianco needs to go on all the nessage boards across the country where they talk about being unemployed. It's not about immigration lol

He's also seriously underestimating the ability of people to get credit to continue spending. All the people under like 25 that I know are living way above their means.

And if you look at the charge offs chart, we've just gotten into the same territory when 2000 and 2008 started