Mike Gleason: It is my privilege now to welcome in Greg Weldon, CEO and president of Weldon Financial. Greg has over three decades of market research and trading experience, specializing in the metals and commodity markets, and his close connection with the metals led him to author a book back in 2006 titled Gold Trading Boot Camp, where he accurately predicted the implosion of the U.S. credit market and urged people to buy gold when it was only $550 an ounce. He is a regular presenter at financial conferences throughout the country and is a highly sought-after guest on many popular financial shows, and it's always great to have him on the Money Metals Podcast.

Greg, good to have you back and thanks for the time again today, welcome.

Greg Weldon: Always my pleasure, Mike.

Mike Gleason: Well, Greg, tariffs are back in the headlines this week. The optimism around an imminent trade deal with China has been supporting markets for a few months, but that blew up this week. The president is planning to raise tariffs and impose them on even more goods. It suddenly looks as if a deal is much farther away than people thought. So, I wanted to get your take on this week's news. Tariffs were first announced roughly a year ago. Do you think more tariffs are likely to succeed or are we learning here that the Chinese either can't or won't negotiate as much as Trump would like?

Greg Weldon: Well, gosh, I don't know, first of all. Will more tariffs succeed? I tend to doubt it. There's certainly one camp that believes that these are almost irreconcilable differences, that we could go on and on and on. If the Chinese have backed off, there's really no choice here. If they're reneging already before a deal's even made, that's not necessarily bargaining in good faith and there's a lot of people out there who would suggest that that's been their modus operandi the entire time. The modus operandi of Trump is to play hardball and that's what he's pulling here.

I think the bigger question, Mike, is twofold. Clearly, it's huge. If they don't reach a deal, that's devastating because, having reached a deal is priced into the markets to some degree, certainly in the U.S. I take it immediately to the stock market, where the stock market has had a 28%, from low to high, rally from Christmas Eve here through April. That is a lot of energy. That is a monster move. Extrapolate that out over a course of a 12-month period. That's just enormous. And that has been predicated upon what? Stimulus? No. Has it been predicated upon, all of a sudden, there's been this consumer resurgence? No, this happened at one of the same times we've seen some of the worst retail sales numbers we've seen in a decade.

It has been built on hope, hope for a resolution to the trade dynamic and hope that the Fed is going to switch to an easing bias and eventually cut rates by the end of this year. If those things don't happen, wow, look out, because they're priced to some degree. And expecting another big jump from here through new highs that's going to power another leg that's going to come with 25 billion 12-month growth in retail sales, I don't see that. I don't. It's almost imperative now that the U.S. gets a deal done, and I think that changes the dynamic a little bit that maybe Trump is not considering, because the thought process in the pop media is that, well, you got a nice GDP print, you got a record low on employment, the U.S. economy is booming, enough we're in a position of strength now and we can play harder ball.

I don't know because, frankly, I could slice and dice the employment number to shreds. I really could. I could make a very strong number case, statistical, factual evidence case that would suggest wage growth has peaked, that the employment dynamic's already rolling over. So, (we’re) playing a dangerous game. And it's still the same thing we talked about a year ago, Mike, you and I… this is basically Donald Trump willing to risk ... it's two guys dousing gasoline, holding matches, and the U.S. betting their match is longer and they're still right. The question becomes what is China’s end game here? Are they willing to risk it all? And the U.S. is betting that they're not, and we'll see what happens.

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