The Gundlach presentation "Penny For Your Thoughts" has begun.
On currency debasement
"Currency debasement is not new," Gundlach says.
There are a lot of pennies out there and they cost a lot to make, more than the value on it, Gundlach explains.
The dollar has lost 96% of its value since 1913, and it's lost a lot of purchasing power.
The U.S. is close to historical norm of how long global reserve currencies have lasted. The U.S. has been a reserve current for 94 years, Spain had the longest reign at 110 years. And there's increased talk about China's yuan emerging as a potential reserve currency, Gundlach writes.
On interest rates
Interest rates have fallen in 2014 is because there aren't too many bonds floating around. He also attributes it to the negative GDP growth in the first quarter. Q2 GDP forecast is 3.4%, he thinks it might be closer to 3% and he thinks the average for the first two quarters would be about 1% — and this is part of the reason interest rates fall.
Interest rates have also fallen because of huge short position in U.S. Treasury market going in to 2014.
On demographics
Conditions in labor force are terrible for 16-19 year olds, having fallen nearly 30 points in the past generation and a half. Labor force participation is falling for everyone but the old folks he says.
The U.S. has a huge change in population of 65 and older as a share of total population. The slope is very steep for the next 15 years before it flattens out.
On global growth
Absolute parity between U.S. and Spain 10-year bonds. In the near-term Spain will be near or reside below US in yield considering hand off in quantitative easing. In terms of range for the U.S. 10-year this year, Gundlach sees it making it up 2.80% and thinks it could possibly be pushed down to 2.2%.
More to come...
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At 4:15 p.m. ET, Jeffrey Gundlach of DoubleLine Funds will hold a webcast.
The bond guru will be updating us on his take on the economy and markets.
Wall Street had been looking for bond yields to rise in 2014, but Gundlach had pointed out that they could tumble to as low as 2.5% during a Jan 14 webcast.
Last month, Gundlach said that we could be on the verge of a big bond market rally. ""If we go down [more] on Treasury yields, we will see one of the biggest short-covering scrambles of all time," he said at the time.
Today's webcast is titled "Penny For Your Thoughts." We'll have Gundlach's comments live.