WEBVTT - Buck Brief - Porter Stansberry 0:00:11.697 --> 0:00:14.977 You're listening to the Buck Sexton Show podcast, make sure 0:00:14.977 --> 0:00:17.977 you subscribe to the podcast on the iHeartRadio app or 0:00:18.017 --> 0:00:19.737 wherever you get your podcasts. 0:00:20.097 --> 0:00:22.537 Hi, everybody, Welcome to the Buck Brief. Special guest on 0:00:22.577 --> 0:00:26.897 this episode, our friend Porter Stansbury is here. He is 0:00:26.977 --> 0:00:31.497 the founder, chairman and CEO of market Wise, which is 0:00:31.537 --> 0:00:36.057 the biggest independent publisher of financial research anywhere out there. 0:00:36.097 --> 0:00:37.777 Also very pleased to tell you that. 0:00:37.777 --> 0:00:41.377 I am doing a launching a newsletter with market Wise 0:00:41.497 --> 0:00:44.937 in twenty twenty four, so a partner as well as 0:00:44.977 --> 0:00:47.257 an advisor on all these things. Porter. 0:00:47.337 --> 0:00:50.017 Great to see you, Hey, Buck, It's always great to 0:00:50.017 --> 0:00:53.137 see you. I just want to congratulate you on an 0:00:53.137 --> 0:00:57.457 incredible career. Thank you. I think I saw you in 0:00:57.577 --> 0:00:59.977 sitting out of conference maybe a decade ago. Yep. 0:01:00.697 --> 0:01:03.137 Yeah, I didn't have a job in radio and he's like, 0:01:03.137 --> 0:01:04.737 I think this guy might be good at radio, and 0:01:04.777 --> 0:01:07.377 now with Clay we're co hosting the biggest radio show 0:01:07.377 --> 0:01:09.537 in the country. So thank you very much for. 0:01:09.297 --> 0:01:11.537 Being a laby. I told the audience, I said, this 0:01:11.537 --> 0:01:13.097 guy is going to be an absolute star. 0:01:13.337 --> 0:01:15.897 Watch his career, and he was right, and this is 0:01:15.937 --> 0:01:17.337 why I have him on the podcast, by the way, 0:01:17.377 --> 0:01:19.257 so he could tell you all very nice things, which 0:01:19.297 --> 0:01:22.337 I appreciate greatly. So Porter, I mean, you're you're a 0:01:22.337 --> 0:01:25.577 guy who has made incredible calls over your career in 0:01:25.617 --> 0:01:28.617 the market and that's obviously what folks over at market 0:01:28.617 --> 0:01:30.857 wise do. I wanted to dive in because you wrote 0:01:30.897 --> 0:01:33.817 something this is in my inbox, uh from from you 0:01:34.137 --> 0:01:38.017 about not only what's going on now with Boeing, one 0:01:38.017 --> 0:01:42.457 of the most well known American probably best known American 0:01:42.497 --> 0:01:47.217 engineering related company. Maybe gees up there, but you saw 0:01:47.257 --> 0:01:49.977 this coming. Tell me what you saw a year ago, 0:01:50.057 --> 0:01:51.577 and then we can get into what's happening now. 0:01:52.697 --> 0:01:58.017 I think it's a fascinating situation because Boeing, among other 0:01:58.177 --> 0:02:02.257 large American corporations, has been one of the folks who 0:02:02.297 --> 0:02:06.537 has most fervently embraced the whole DEI mythology if you will, 0:02:07.137 --> 0:02:11.777 the idea that that you can have a better corporation 0:02:11.897 --> 0:02:16.937 of better business if you give opportunities that on a 0:02:17.137 --> 0:02:20.297 pure metocracy would have belonged to someone else. You give 0:02:20.337 --> 0:02:23.657 those opportunities to someone of color, or someone who's a woman, 0:02:24.337 --> 0:02:29.257 or someone who has confused sexuality issues that somehow the 0:02:29.857 --> 0:02:32.817 DEI theory is that that'll make your products better, that'll 0:02:32.857 --> 0:02:36.417 make your customers happier, that'll make your profits bigger. But 0:02:36.497 --> 0:02:39.577 what we see as investment analysts time and time again 0:02:39.737 --> 0:02:43.177 that firms that embrace this kind of DEI I think, 0:02:43.257 --> 0:02:48.697 or the general ESG. They call it mindset, actually perform 0:02:49.177 --> 0:02:52.497 poor going forward, in part because their cultures get wrecked 0:02:52.737 --> 0:02:55.297 and buck I'm sure you can understand this. If you're 0:02:55.337 --> 0:02:58.977 working with a group of people and suddenly promotions and 0:02:59.057 --> 0:03:03.137 raises and bonuses start getting doled out because of factors 0:03:03.217 --> 0:03:06.817 other than performance, it has a really shockingly bad impact 0:03:06.897 --> 0:03:10.337 on the culture. It leads to all kinds of bad 0:03:10.417 --> 0:03:13.057 things happening. But the most notable thing is that the 0:03:13.097 --> 0:03:15.377 truly talented people are going to leave and go work 0:03:15.417 --> 0:03:19.377 for SpaceX, which is what they've done, and the people 0:03:19.457 --> 0:03:21.137 you get left with are the people who are really 0:03:21.177 --> 0:03:25.017 good at corporate infighting and corporate politics, but not necessarily 0:03:25.017 --> 0:03:28.537 good at all at engineering. And as a as a 0:03:28.577 --> 0:03:30.497 part of all that, I'd like to I'd like to 0:03:30.537 --> 0:03:35.817 call your attention to the woman who is currently the 0:03:35.817 --> 0:03:42.777 the chief operating officer at Boeing and UH. Her name 0:03:42.857 --> 0:03:46.617 is Stephanie, and she has a thirty year career as 0:03:46.697 --> 0:03:50.897 an accountant. So she was the you know, the top 0:03:50.937 --> 0:03:55.137 accountant at Boeing Airplanes and and she has a degree 0:03:55.177 --> 0:04:01.377 from Southwestern Missouri State and she has an NBA hold on. 0:04:01.417 --> 0:04:03.257 I got to reference my notes for this because I'd 0:04:03.257 --> 0:04:07.697 never heard of this school. Oh, this intellectual powerhouse, Lyndon 0:04:07.777 --> 0:04:11.577 Wood University. So so what you've got here as a 0:04:11.737 --> 0:04:14.697 as a as a female with no engineering background, And 0:04:14.737 --> 0:04:17.777 I'll go public with this. I'll bet one thousand dollars 0:04:18.297 --> 0:04:22.257 that Stephanie cannot change the oil in her car. But 0:04:22.377 --> 0:04:27.377 she is the director of operations for Boeing, which is 0:04:27.697 --> 0:04:30.857 the most important engineering firm in the United States by 0:04:30.897 --> 0:04:33.657 a mile, and one of the most important companies in 0:04:33.697 --> 0:04:38.537 the world. The whole global transportation infrastructure requires Boeing aircraft 0:04:39.217 --> 0:04:40.937 and they need to be well made and safe. 0:04:41.617 --> 0:04:43.857 Well, this is this is in the headlines obviously porter 0:04:43.937 --> 0:04:46.337 because a piece of register bring everyone up to speed 0:04:46.337 --> 0:04:49.177 for this week, A piece of a Boeing seven thirty 0:04:49.217 --> 0:04:53.617 seven to nine Max fuselage tore off and people can 0:04:53.617 --> 0:04:55.617 see it. I mean, there's video of this from the 0:04:55.617 --> 0:04:58.577 plane from the inside tore off mid flight during an 0:04:58.617 --> 0:05:00.577 Alaska Airlines flight and. 0:05:00.977 --> 0:05:03.177 This is this is this is not this actually is 0:05:03.217 --> 0:05:06.297 not new. They've had They've had consistent problems with their 0:05:06.337 --> 0:05:10.617 aircraft for at least the last six years, including too 0:05:10.737 --> 0:05:14.137 fatal crashes, and they've had an engineering culture that was 0:05:14.137 --> 0:05:18.177 gutted after the merger with McDonald Douglas in ninety seven. 0:05:18.537 --> 0:05:20.737 But Buck, I want to get to a really important 0:05:20.737 --> 0:05:23.937 point about this, would why on earth would you have 0:05:24.057 --> 0:05:28.817 someone with no engineering background whatsoever with degrees from Southwest 0:05:28.817 --> 0:05:34.337 Missouri State and Lindenberg sorry Lyndon Wood University. I don't 0:05:34.337 --> 0:05:38.257 think that is the sharpest engineer or tool and drawer. 0:05:38.537 --> 0:05:40.897 So why would Stephanie get one of the most important 0:05:40.977 --> 0:05:44.617 jobs in engineering. Well maybe because she is the executive 0:05:44.697 --> 0:05:51.377 sponsor of Boeing's Women Inspiring Leadership. What's that, Buck, It's 0:05:51.417 --> 0:05:56.937 a group that's dedicated to increasing gender diversity awareness and that, 0:05:57.097 --> 0:05:59.937 by the way, is right off of Boeing's website. So 0:06:00.297 --> 0:06:02.537 what is going on at Boeing is you have a 0:06:02.537 --> 0:06:05.297 whole bunch of people who are being promoted and getting 0:06:05.297 --> 0:06:08.897 opportunities because of their political orientation or because of the 0:06:08.897 --> 0:06:11.657 buy in that they have made into ESG and DEI. 0:06:12.017 --> 0:06:14.417 But that is not the way to make safe airplanes. 0:06:14.737 --> 0:06:17.137 We've already seen this happen. There is an Atlas Air 0:06:17.217 --> 0:06:20.577 flight in twenty nineteen that crashed near Houston, where both 0:06:20.657 --> 0:06:25.417 pilots were, in my opinion, most likely there because of 0:06:25.457 --> 0:06:28.777 the role they played in meeting diversity targets, not because 0:06:28.817 --> 0:06:31.457 of their flight awareness or their success in training. And 0:06:31.457 --> 0:06:34.377 both have failed out of training. So this is a 0:06:34.537 --> 0:06:37.497 real issue. And it's not just for companies like Disney, 0:06:37.497 --> 0:06:39.977 which you're performing miserably. I mean, at least a theme 0:06:40.017 --> 0:06:42.497 part can't fall out of the sky. But I'm not 0:06:42.497 --> 0:06:44.417 so sure you'd want to go ride those roller coasters 0:06:44.497 --> 0:06:46.297 right now, because you're going to have a whole bunch 0:06:46.297 --> 0:06:48.497 of people who are not qualified in jobs that are 0:06:48.577 --> 0:06:51.137 very demanding and very technical. And this is not just 0:06:51.177 --> 0:06:53.577 going to impact Boeing, It's going to impact our whole country. 0:06:53.937 --> 0:06:55.857 I want to ask you about how the shareholders you 0:06:55.897 --> 0:06:58.697 think of some of the companies out there have every 0:06:58.777 --> 0:07:01.177 at you know, whether we're talking about Budweiser or Disney 0:07:01.257 --> 0:07:02.937 or you know what's going on with Boeing. We'll get 0:07:02.977 --> 0:07:05.857 to this though in one second. You know, is there 0:07:05.857 --> 0:07:08.497 a change coming to the US dollar this year? Well, 0:07:08.537 --> 0:07:12.297 According to former Walls insider Tikachuwari, he very much thinks 0:07:12.337 --> 0:07:15.377 it could happen as soon as this year. He thinks 0:07:15.417 --> 0:07:17.377 the biggest risk to Americans is not the war in 0:07:17.457 --> 0:07:20.617 Ukraine spreading even further out of control, or some kind 0:07:20.617 --> 0:07:23.777 of a conflagration in the Middle East, but the security 0:07:23.817 --> 0:07:26.537 instability of the US dollar. And he's so adamant on 0:07:26.577 --> 0:07:29.177 this point that he's published a video with all the details, 0:07:29.217 --> 0:07:31.737 including how you might prepare go to move your cash 0:07:31.777 --> 0:07:34.137 now dot com to learn the three steps you need 0:07:34.177 --> 0:07:36.537 to partake to protect and grow your wealth in the 0:07:36.537 --> 0:07:39.057 coming months. In a year that's moved your cash now 0:07:39.097 --> 0:07:41.017 dot com, or you could end up holding a bunch 0:07:41.017 --> 0:07:42.657 of dollars that are worth a lot less than they 0:07:42.657 --> 0:07:46.217 are now paid for by Palm Beach Research Group. All right, Porter, 0:07:46.697 --> 0:07:48.897 the it feels like in the last year or so, 0:07:48.937 --> 0:07:50.657 I mean you wrote this piece. I saw the piece, 0:07:50.697 --> 0:07:52.977 and you know we revisited it today. I mean I 0:07:53.017 --> 0:07:54.937 saw you saw it when it came out. You visited 0:07:54.977 --> 0:07:57.777 today about Boeing and what's going on there as a 0:07:58.057 --> 0:08:01.097 corporate culture. But we've had a number of very high 0:08:01.177 --> 0:08:05.897 profile instances, whether it's the backlash at Budweiser a lot 0:08:05.937 --> 0:08:09.497 of pressure on Disney. When does corporate America you think, 0:08:09.577 --> 0:08:12.537 start to listen to the voices out there that are 0:08:12.577 --> 0:08:16.097 shouting stop doing things that aren't about good business but 0:08:16.217 --> 0:08:20.617 you think are about good social justice. 0:08:21.417 --> 0:08:24.617 Well, I think that there's a lot of reasons for 0:08:24.697 --> 0:08:27.457 investors to have made that decision already, and I think 0:08:27.537 --> 0:08:30.537 that's happening. But I think you're going to see something further, 0:08:31.017 --> 0:08:34.737 which is when planes start crashing, When when Disney theme 0:08:34.777 --> 0:08:37.497 starts fall apart. You know, there's there's worse things that 0:08:37.497 --> 0:08:40.177 can happen than a failed movie. There's worse things that 0:08:40.217 --> 0:08:43.937 can happen. Then, you know, changing the the snow White 0:08:44.297 --> 0:08:46.857 film to become a you know, a play on diversity, 0:08:47.337 --> 0:08:50.697 and those things are going to impact our entire economy. 0:08:52.297 --> 0:08:55.297 It's it's it's I think when when this stuff, when 0:08:55.297 --> 0:08:58.617 this rot gets into health and safety, that's when you're 0:08:58.657 --> 0:09:01.417 going to see a really big political shift. And the 0:09:01.497 --> 0:09:04.137 chieft is already underway when it comes to Boeing, though 0:09:04.257 --> 0:09:07.377 buck let me tell you how I found the problem, 0:09:07.897 --> 0:09:09.817 because you might you might not remember, but I first 0:09:09.817 --> 0:09:13.217 started writing about this a year ago in January of 0:09:13.257 --> 0:09:17.057 twenty twenty three. And what I said back then was 0:09:17.057 --> 0:09:21.137 that Boeing stock was going to collapse. And I said 0:09:21.177 --> 0:09:24.857 that not because I suspected that the planes to start 0:09:24.897 --> 0:09:27.897 falling out of the sky necessarily, but that I saw 0:09:27.937 --> 0:09:31.177 that the entire engineering culture had been gutted and it 0:09:31.257 --> 0:09:34.377 had been replaced, first of all, with accountants from GE. 0:09:34.977 --> 0:09:37.417 And what they know how to do is wreck corporate 0:09:37.457 --> 0:09:39.217 balance sheets. That's what they did to GE and that's 0:09:39.217 --> 0:09:41.417 why I recommended shorting the stock for so many years. 0:09:42.017 --> 0:09:44.097 They did exactly the same thing. The two people who 0:09:44.097 --> 0:09:46.657 are running Boeing now, both the CEO and the CFO, 0:09:46.777 --> 0:09:50.297 are veterans of G's finance group, and they do the 0:09:50.337 --> 0:09:54.377 exact same playbook. What did they do. They took Boeing 0:09:54.417 --> 0:09:56.977 from a company that had net cash on its balance 0:09:57.017 --> 0:10:00.137 sheet to a company that now has fifty two billion 0:10:00.257 --> 0:10:03.217 dollars in debt, and that's including net debt of over 0:10:03.297 --> 0:10:07.457 forty billion dollars. They've got to refinance about twenty five 0:10:07.617 --> 0:10:10.737 billion of that in the next two years. And because 0:10:10.777 --> 0:10:14.137 of the safety issues of their planes, they're also facing 0:10:14.177 --> 0:10:18.777 the potential downgrade into junct bond status if that happens, 0:10:18.777 --> 0:10:21.017 their interest expenses are going to soar, and there's a 0:10:21.097 --> 0:10:24.897 real risk that the company could go bankrupt. Nobody sees that, 0:10:25.377 --> 0:10:27.617 but that's what we were talking about a year ago, 0:10:27.897 --> 0:10:31.097 and we updated that short call in December on the 0:10:31.097 --> 0:10:34.737 twenty second, about three weeks ago. So I just want 0:10:34.777 --> 0:10:37.017 you to realize that my work on Boeing is not 0:10:37.097 --> 0:10:40.137 about this latest news thing. It's about the fact that 0:10:40.217 --> 0:10:42.417 for the last five or six years they've been building 0:10:42.457 --> 0:10:45.537 shoddy aircraft and their balance sheet has been destroyed by 0:10:45.537 --> 0:10:48.537 their leadership. And that's why I started focusing on it, 0:10:48.577 --> 0:10:51.257 because the bad choices I could see looking at the 0:10:51.297 --> 0:10:54.097 finances of the company have also flowed through now to 0:10:54.137 --> 0:10:56.697 the engineering of the company. It's a very serious matter, 0:10:56.857 --> 0:10:59.577 not just for Boeing shareholders, but also for the bond 0:10:59.657 --> 0:11:02.257 markets and for our country's transportation networks. 0:11:03.257 --> 0:11:06.297 What do you think the future then holds for not 0:11:06.377 --> 0:11:09.577 just Boeing, but the US aerospace industry in general if 0:11:09.577 --> 0:11:12.017 this has happened. I mean, I know, for example, you're 0:11:12.057 --> 0:11:14.497 talking about the people that make the planes. Well, I 0:11:14.577 --> 0:11:17.657 know a bit about people who go into the planes. 0:11:18.097 --> 0:11:20.537 I have friends and colleagues who you know, got a 0:11:20.537 --> 0:11:23.057 lot of people former military. They become the airline pilots 0:11:23.097 --> 0:11:25.137 are the ones flying these things, and they say the 0:11:25.177 --> 0:11:29.017 DEI wokeness problem. I mean, look, United is bragging about 0:11:29.017 --> 0:11:32.617 how they have changed, you know, the incoming class of 0:11:32.617 --> 0:11:35.377 pilots to be more diverse. But I also know that 0:11:35.417 --> 0:11:37.777 the training programs that pilots are going through so they 0:11:37.777 --> 0:11:41.057 can meet the standards necessary for training are being lowered. 0:11:41.057 --> 0:11:44.537 That is happening. So the people that are moving the plane, 0:11:44.577 --> 0:11:47.377 you're telling me that the people making the planes are 0:11:47.417 --> 0:11:51.537 losing a step or ten. And the people piloting the 0:11:51.577 --> 0:11:54.737 planes right now are also not the same caliber than 0:11:54.777 --> 0:11:56.577 what people have been used to for a long time. 0:11:58.137 --> 0:12:01.137 Yeah, that's a very serious matter. And again, if you 0:12:01.217 --> 0:12:04.297 look at the kind of people that United has been 0:12:04.417 --> 0:12:07.737 using to fill their new pilot academy, right they have 0:12:07.857 --> 0:12:12.257 intentionally partnered with some of the lowest performing schools in 0:12:12.257 --> 0:12:15.697 the country in terms of SAT scores and academic achievement 0:12:16.017 --> 0:12:21.617 because they're the right color. That's just racism. And you 0:12:21.657 --> 0:12:24.937 know when you combine racism and Marxism, you're not going 0:12:24.977 --> 0:12:27.697 to improve the Marxist track record. 0:12:28.137 --> 0:12:30.217 Well, also, you know, we can, finally, I think, have 0:12:30.857 --> 0:12:34.777 a discussion about merit and standards and hiring in a 0:12:34.777 --> 0:12:37.217 more direct way than in a long time porter because 0:12:37.257 --> 0:12:40.137 the Supreme Court came out and said, Okay, you guys 0:12:40.137 --> 0:12:43.057 at Harvard, which is a whole other conversation, what's going 0:12:43.097 --> 0:12:44.977 on there, But you guys at Harvard have been just 0:12:45.017 --> 0:12:47.897 straight up discriminating against Asian kids. That was what got 0:12:47.897 --> 0:12:52.017 this whole thing started. That's unconstitutional, that's illegal. You can't 0:12:52.057 --> 0:12:55.177 actually do that, and you can't continue this system of 0:12:55.217 --> 0:12:57.697 pretending you're not discriminating by race when you are. Well, 0:12:57.697 --> 0:13:00.417 that's in college admissions. But it's starting now to filter 0:13:00.497 --> 0:13:06.337 I think through the broader American political and an economic landscape, 0:13:06.657 --> 0:13:08.497 which is a good thing. But I think we're just 0:13:08.497 --> 0:13:10.257 in the early early stages this. 0:13:11.417 --> 0:13:13.497 Sorry I didn't mean interrupt, but I just want you to say, 0:13:13.737 --> 0:13:15.897 hasn't this been the kind of thing that for many 0:13:16.017 --> 0:13:19.737 years people smiled in grandad and said, yes, you know, yes, yes, 0:13:19.817 --> 0:13:22.737 we're all in favor of equal opportunity, and we are right. 0:13:22.777 --> 0:13:24.777 But no one took it. No one took the idea 0:13:24.857 --> 0:13:27.937 seriously that you would get a guy who couldn't even 0:13:29.257 --> 0:13:34.817 legitimately gain admission to a competitive university and tell him 0:13:35.137 --> 0:13:38.257 with a couple of months of pilot training. He's now 0:13:38.337 --> 0:13:42.337 going to be captive captaining you know, a United aircraft 0:13:42.377 --> 0:13:46.177 with two hundred people on board like that. There is 0:13:46.217 --> 0:13:49.097 there is such an absolute, utter lack of judgment. There 0:13:49.137 --> 0:13:53.097 is such a disparity between the theory of DEI or 0:13:53.457 --> 0:13:56.857 ESG and the reality of engineering and flight, and those 0:13:56.897 --> 0:13:59.217 two things are on a conclusion conclusion course. But let 0:13:59.217 --> 0:14:00.777 me just give you a couple of data points to 0:14:00.817 --> 0:14:03.777 make this a little bit more objective. If you were 0:14:03.897 --> 0:14:06.937 in charge of Boeing and you knew that your your 0:14:06.977 --> 0:14:10.777 cumulative net income over the past three years is minus 0:14:10.897 --> 0:14:15.617 twenty billion dollars, and that your twelve month interest expense 0:14:15.697 --> 0:14:18.017 currently is two and a half billion dollars a year, 0:14:18.657 --> 0:14:22.697 and you knew that your credit rating was one notch 0:14:22.857 --> 0:14:28.617 above junk status at Fitch and SMP is, the last 0:14:28.617 --> 0:14:31.577 thing that you would do is to let a door 0:14:31.617 --> 0:14:34.777 fly off of your plane in mid flight. My point 0:14:34.777 --> 0:14:37.857 about all this is the people running the company have 0:14:38.017 --> 0:14:40.817 such poor judgment they can't even run the company. And 0:14:40.857 --> 0:14:44.337 by the way, Bones one of only two major aircraft 0:14:44.417 --> 0:14:48.697 manufacturers in the world, and it is a dominant defense contractor. 0:14:48.897 --> 0:14:50.777 There's plenty of margin to be made in all those 0:14:50.777 --> 0:14:54.537 defense contracts. So how do these guys lose twenty billion 0:14:54.577 --> 0:14:57.257 dollars in the last three years alone, and how did 0:14:57.297 --> 0:14:59.697 they run their balance sheet just in the last five 0:14:59.777 --> 0:15:05.417 years from net cash positive to forty two billion roughly 0:15:05.537 --> 0:15:10.297 and net debt. This is I mean, it's almost is 0:15:10.337 --> 0:15:14.177 if somebody was deliberately trying to destroy this company, because 0:15:14.217 --> 0:15:17.817 you can't make decisions this bad if you weren't trying. 0:15:17.537 --> 0:15:21.137 To port I want to ask you about a different 0:15:21.177 --> 0:15:24.057 kind of landing, the overall landing that people are saying 0:15:24.217 --> 0:15:26.297 might be soft or not for the economy in twenty 0:15:26.297 --> 0:15:28.217 twenty four, which is going to affect the political landscape. 0:15:28.217 --> 0:15:30.257 I just wanted to get your broad thoughts on that 0:15:30.577 --> 0:15:32.417 in a moment. But first up, you know, a lot 0:15:32.417 --> 0:15:34.097 of us are trying to get our finances in order, 0:15:34.137 --> 0:15:36.377 and there's some great news for homeowners. Interest rates have 0:15:36.417 --> 0:15:38.417 dropped and are now in the fives, a lot lower 0:15:38.497 --> 0:15:40.697 than they were last year. 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Call American Financing today eight six 0:16:09.457 --> 0:16:12.857 six eight nine zero nine three nine two. That's eight 0:16:12.977 --> 0:16:16.337 six six eight nine zero nine three nine two. Or 0:16:16.377 --> 0:16:19.937 go to American Financing dot net. That's American Financing dot net, 0:16:20.017 --> 0:16:23.257 NMLS one eight two three three four animals consumer access 0:16:23.617 --> 0:16:24.977 dot org Porter. 0:16:25.457 --> 0:16:26.377 What are you seeing? 0:16:26.457 --> 0:16:27.777 I mean, I just want to give you the floor 0:16:27.777 --> 0:16:30.057 for for a couple of minutes. Here, what are you 0:16:30.097 --> 0:16:32.817 seeing for next year? Because it feels like the Fed's 0:16:32.897 --> 0:16:38.777 telling us here, Jerome Pal everybody, we win, rates coming down, inflation, 0:16:38.977 --> 0:16:42.537 beaten markets, fine, nothing to see here, no problem? 0:16:42.577 --> 0:16:46.137 What are you seeing? I think that inflation is going 0:16:46.177 --> 0:16:49.977 to be intractable and very difficult to beat because of 0:16:50.017 --> 0:16:52.897 the size of the fiscal deficits the United States. If 0:16:52.937 --> 0:16:55.217 the federal government was able to snap its fingers and 0:16:55.417 --> 0:16:59.217 double double the amount of income tax it collects, it'd 0:16:59.217 --> 0:17:04.297 still be running a deficit. And you've got deficits at 0:17:04.297 --> 0:17:08.217 that size. I just don't believe they can be financed 0:17:08.257 --> 0:17:11.497 through to legitimate means, which means you're gonna have eventually 0:17:11.937 --> 0:17:16.057 more interest rate manipulation, more bond market manipulation, and more 0:17:16.057 --> 0:17:18.577 money printing. It's just a matter of time. And all 0:17:18.577 --> 0:17:20.777 they've done so far really is just change the name 0:17:20.857 --> 0:17:22.937 of what they're calling the MOUNTI printing. You know, they 0:17:23.017 --> 0:17:29.737 used to call it. What do they call it? Easing? Yes, easying? Yeah, sorry, 0:17:30.417 --> 0:17:32.897 there's so much jargon now I can't keep up with 0:17:32.937 --> 0:17:35.937 it all. But the new way that they're doing it 0:17:35.977 --> 0:17:38.657 is they've just been printing money and handing to banks 0:17:39.177 --> 0:17:42.737 that have underwater bond portfolios. So there's something right now 0:17:42.777 --> 0:17:47.017 in the order of seven hundred billion dollars plus worth 0:17:47.057 --> 0:17:50.497 of losses and the banks on their bond portfolios, and 0:17:50.617 --> 0:17:52.897 rather than accept any of those losses and have a 0:17:52.977 --> 0:17:55.417 run on the banking system, the Federal Reserve is just 0:17:55.457 --> 0:17:58.297 printing up money and then giving it to those banks 0:17:58.617 --> 0:18:01.537 as collateral at par so that they don't have to 0:18:01.537 --> 0:18:03.177 suffer the losses that they have. 0:18:03.257 --> 0:18:06.777 Actually, so the banks are effectively hiding losses because they 0:18:06.777 --> 0:18:08.617 got on the wrong side. So what we saw with 0:18:09.377 --> 0:18:12.137 Silicon Valk, for example, people say, hold on a second, 0:18:12.177 --> 0:18:15.137 is this a problem elsewhere? You're telling me you think 0:18:15.177 --> 0:18:16.897 it absolutely is a problem elsewhere. 0:18:17.377 --> 0:18:20.057 Yeah. Absolutely. I mean, if you look at Bank of America, 0:18:20.177 --> 0:18:22.857 just as one example, Bank of America is the largest pository, 0:18:22.857 --> 0:18:26.937 it's the United States. Its entire tangible equity capital be 0:18:26.937 --> 0:18:28.697 wiped out if it had to, if it had to 0:18:28.777 --> 0:18:31.657 write to market where its bond portfolio is. And the 0:18:31.697 --> 0:18:34.697 reason why is because it made enormous investments in bonds 0:18:35.017 --> 0:18:37.777 during the COVID bubble when interest rates are very, very low, 0:18:38.017 --> 0:18:40.057 and then of course the FED had to raise rates 0:18:40.057 --> 0:18:42.457 to stop the resulting inflation from all the money printing 0:18:42.497 --> 0:18:45.617 that they did. So you know, the whole banking system 0:18:45.657 --> 0:18:49.257 is just inside out and there is no way that 0:18:49.297 --> 0:18:52.777 the FED is going to be able to By the way, 0:18:52.777 --> 0:18:55.817 the FED doesn't even want to actually stop inflation. The 0:18:55.857 --> 0:18:58.537 FED wants inflation to be three to four percent a 0:18:58.577 --> 0:19:01.017 year so that they can print print their way out 0:19:01.017 --> 0:19:03.297 of all these government obligations that they can't meet and 0:19:03.337 --> 0:19:06.057 so that they can keep the banking system liquid. And 0:19:06.137 --> 0:19:08.937 so I think that all the talk you're hearing about 0:19:10.177 --> 0:19:13.697 the possibility of deflation or the possibility of a recession 0:19:13.697 --> 0:19:17.377 in terms of nominal GDP as mallarchy, you're not going 0:19:17.417 --> 0:19:21.377 to see any kind of actual recession because they're going 0:19:21.417 --> 0:19:23.217 to print so much money and there is so much 0:19:23.257 --> 0:19:26.537 deficit spending that in nominal terms, the GDP growth is 0:19:26.537 --> 0:19:29.097 going to be probably between four and six percent over 0:19:29.137 --> 0:19:31.657 the next three or four years at least. And how 0:19:31.657 --> 0:19:33.537 will they do that, Well, they just deal with government 0:19:33.617 --> 0:19:35.857 spending and they print the money to do it. So 0:19:35.897 --> 0:19:38.217 that's going to have a really big impact on people's wages. 0:19:38.257 --> 0:19:41.577 And you've already seen that happening, and that's a giant problem. 0:19:41.657 --> 0:19:43.417 And what's your take, border, I mean, you've been watching 0:19:43.417 --> 0:19:46.137 this stuff for a long time. So CPI they measure 0:19:46.137 --> 0:19:48.817 inflation and they tell us that you know, it's not 0:19:48.937 --> 0:19:51.097 bad if you take what food and energy out of it, 0:19:51.177 --> 0:19:53.777 right like so if you need to eat or heat 0:19:53.817 --> 0:19:55.497 your home or put gas in your car or whatever. 0:19:55.577 --> 0:19:56.497 I mean, it's the middle of the winter in a 0:19:56.537 --> 0:19:59.537 lot of places. Other than that, they say inflation is 0:19:59.577 --> 0:20:00.097 not that bad. 0:20:01.377 --> 0:20:03.417 Yeah, well, you know, I like to use real world 0:20:03.417 --> 0:20:07.377 things for for pricing. And if you go and look, 0:20:07.417 --> 0:20:11.977 for example, at how many how many minimum wage hours 0:20:12.017 --> 0:20:14.697 you have to work to purchase a Ford F one fifty, 0:20:14.737 --> 0:20:17.897 which is the most popular, you know, vehicle in the 0:20:17.977 --> 0:20:20.537 United States and has been for most of my lifetime. 0:20:21.217 --> 0:20:24.577 You know, the hours worked has has doubled or tripled, 0:20:25.017 --> 0:20:27.177 and the price of the S one fifty that you 0:20:27.217 --> 0:20:29.977 can buy at the dealer, I would guess it's up 0:20:30.017 --> 0:20:32.857 fifty percent in the last ten years at least. So, 0:20:33.577 --> 0:20:36.337 you know, we can argue about CPI we want, but 0:20:36.657 --> 0:20:38.857 it has nothing to do with the impact of these 0:20:38.857 --> 0:20:42.897 policies on real people's wages and buck. The saddest part 0:20:42.977 --> 0:20:46.617 for me is the people who are suffering the most 0:20:46.897 --> 0:20:50.017 from these kinds of policies and from DEI and from 0:20:50.257 --> 0:20:52.697 ESG and all this stuff to defund the police, all 0:20:52.737 --> 0:20:55.497 this stuff. The people who suffer the most are the 0:20:55.537 --> 0:20:59.457 people who keep voting for it. It's not hard for 0:20:59.457 --> 0:21:01.817 people like me and you to protect ourselves from inflation. 0:21:01.897 --> 0:21:04.417 We go buy a property, We go buy gold, which 0:21:04.417 --> 0:21:07.137 you can now buy at Costco, which I think is great. 0:21:07.297 --> 0:21:10.257 You know, we go buy bitcoin, we go invest in 0:21:10.337 --> 0:21:12.657 high quality stocks, which we have the training to do, 0:21:13.257 --> 0:21:16.577 and inflation just keeps us floating along. But for the 0:21:16.617 --> 0:21:19.337 people that we employ to you know, to take care 0:21:19.377 --> 0:21:22.057