1 00:00:00,080 --> 00:00:04,280 Speaker 1: All right, Brent Johnson, Santiago Capital, otherwise known as the 2 00:00:04,480 --> 00:00:08,039 Speaker 1: dollar milkshake guy, and if you're on Twitter, one who 3 00:00:08,119 --> 00:00:10,520 Speaker 1: likes to poke fund and everybody who thinks the death 4 00:00:10,560 --> 00:00:13,880 Speaker 1: of the dollar is coming anyway, Brent, always a pleasure to. 5 00:00:13,800 --> 00:00:14,960 Speaker 2: Catch up with you. Thanks for joining me. 6 00:00:16,560 --> 00:00:18,680 Speaker 3: Yeah, yeah, happy to be here. I'm looking forward to 7 00:00:18,720 --> 00:00:19,040 Speaker 3: talking to you. 8 00:00:19,200 --> 00:00:19,360 Speaker 2: Yeah. 9 00:00:19,400 --> 00:00:22,800 Speaker 1: So we're framing up sort of twenty twenty four. And 10 00:00:23,200 --> 00:00:26,239 Speaker 1: you know, it was a year ago. About a year ago, 11 00:00:26,280 --> 00:00:28,200 Speaker 1: you and I were in Vancouver at a conference together, 12 00:00:28,280 --> 00:00:31,200 Speaker 1: and I remember you talking about part of the reason 13 00:00:31,200 --> 00:00:33,559 Speaker 1: why I like to continue to kind of pound on 14 00:00:33,600 --> 00:00:35,760 Speaker 1: the dollar and sort of go in the face of 15 00:00:35,800 --> 00:00:38,280 Speaker 1: all these death of the dollar guys, isn't because I 16 00:00:38,320 --> 00:00:40,199 Speaker 1: believe the dollar goes on forever. It's just that it's 17 00:00:40,240 --> 00:00:42,680 Speaker 1: not coming as imminent as a lot of people make 18 00:00:42,720 --> 00:00:43,040 Speaker 1: it sound. 19 00:00:43,040 --> 00:00:44,560 Speaker 2: And that was sort of your approach last year. 20 00:00:46,520 --> 00:00:50,080 Speaker 1: And here we are another year later, and there's still 21 00:00:50,080 --> 00:00:51,560 Speaker 1: plenty of people calling for the death of the dollar, 22 00:00:51,720 --> 00:00:53,800 Speaker 1: and I'm just curious. I want to sort of recap 23 00:00:53,800 --> 00:00:56,200 Speaker 1: a little bit of twenty twenty three, kind of get 24 00:00:56,200 --> 00:00:59,000 Speaker 1: your sort of outlook on twenty twenty four, Right, now, 25 00:00:59,360 --> 00:01:01,400 Speaker 1: and then I want to look at it in light 26 00:01:01,480 --> 00:01:04,080 Speaker 1: of three big events that I think could potentially shape 27 00:01:04,080 --> 00:01:06,039 Speaker 1: this year, and so we'll get your opinion on these, 28 00:01:06,040 --> 00:01:09,039 Speaker 1: and that one is the massive amounts of debt and 29 00:01:09,080 --> 00:01:12,800 Speaker 1: deficit spending that we're looking at. Number two being an 30 00:01:12,800 --> 00:01:17,240 Speaker 1: election year that always sends maybe drives trends, if you will. 31 00:01:17,480 --> 00:01:21,200 Speaker 1: And then third is wars that seemingly are just continuing 32 00:01:21,240 --> 00:01:24,160 Speaker 1: to escalate and what that could potentially do in all 33 00:01:24,200 --> 00:01:27,640 Speaker 1: of this. So that's sort of the framework of this conversation. 34 00:01:29,520 --> 00:01:33,480 Speaker 1: So let's first just start with the dollar. Everybody's calling 35 00:01:33,600 --> 00:01:36,679 Speaker 1: the death of the dollar. It's been greatly exaggerated. Bricks 36 00:01:36,720 --> 00:01:39,440 Speaker 1: came and went seemingly that kind of didn't go anywhere, 37 00:01:40,240 --> 00:01:43,839 Speaker 1: and surprise, surprise, the world didn't end. The Marcus didn't crash, 38 00:01:44,040 --> 00:01:46,760 Speaker 1: the economy didn't crash, and it held up pretty strong. 39 00:01:46,920 --> 00:01:49,360 Speaker 1: Now i'd like your opinion on this. We'll start with 40 00:01:49,400 --> 00:01:52,440 Speaker 1: this question. Mark Twain said that it's not what you 41 00:01:52,520 --> 00:01:53,720 Speaker 1: don't know that gets you in trouble, it's what you 42 00:01:53,720 --> 00:01:57,840 Speaker 1: absolutely know for certain, and people were certain as soon 43 00:01:57,880 --> 00:02:00,680 Speaker 1: as the risk free rate went up, stocks had to 44 00:02:01,040 --> 00:02:04,000 Speaker 1: they had to have to reprice lower and they were 45 00:02:04,040 --> 00:02:05,960 Speaker 1: also sure that when mortgage rates went up, they had 46 00:02:06,360 --> 00:02:08,840 Speaker 1: to had to home prices had to have to have crash. 47 00:02:09,400 --> 00:02:12,679 Speaker 1: Neither of those things happened. So the dollar made it 48 00:02:12,720 --> 00:02:15,239 Speaker 1: another year. The markets the economy made in the year. 49 00:02:15,280 --> 00:02:17,240 Speaker 1: Like what kind of happened last year? What were you 50 00:02:17,280 --> 00:02:19,160 Speaker 1: surprised by? And kind of frame that up? 51 00:02:20,680 --> 00:02:24,520 Speaker 3: Well, I was not surprised until the last two months. 52 00:02:24,600 --> 00:02:28,160 Speaker 3: I did not think that. I wasn't shocked by the 53 00:02:28,200 --> 00:02:31,399 Speaker 3: last two months. I always try to figure out all 54 00:02:31,440 --> 00:02:35,200 Speaker 3: the different scenarios that could happen, and I knew that 55 00:02:35,280 --> 00:02:37,360 Speaker 3: a melt up could happen, but I didn't think that 56 00:02:37,440 --> 00:02:42,239 Speaker 3: it would. And so, you know, up until about September October, 57 00:02:43,480 --> 00:02:46,560 Speaker 3: you know, I kind of felt like I kind of 58 00:02:46,639 --> 00:02:49,600 Speaker 3: knew what was going on, and I wasn't in the 59 00:02:49,639 --> 00:02:52,080 Speaker 3: melt up camp. I understood the arguments they were making. 60 00:02:52,200 --> 00:02:54,040 Speaker 3: I didn't think they would come to be but they did. 61 00:02:54,240 --> 00:02:56,440 Speaker 3: And so, you know, I'd say the last two to 62 00:02:56,520 --> 00:03:00,760 Speaker 3: three months were somewhat frustrating, not so much much because 63 00:03:01,200 --> 00:03:03,400 Speaker 3: it ruined our year or anything, but you know, you 64 00:03:03,520 --> 00:03:05,600 Speaker 3: always like to be right, and it's never fun to 65 00:03:05,639 --> 00:03:08,400 Speaker 3: be wrong, and that, you know, I was wrong for 66 00:03:08,440 --> 00:03:11,880 Speaker 3: the last two months. But what I think is kind 67 00:03:11,880 --> 00:03:17,239 Speaker 3: of interesting to me is that what I would call 68 00:03:17,320 --> 00:03:20,360 Speaker 3: the cognitive dissonance of the market. And I feel like 69 00:03:20,480 --> 00:03:23,919 Speaker 3: oftentimes the market argues with itself and what I mean 70 00:03:23,960 --> 00:03:27,960 Speaker 3: by that or or or they're kind of they're kind 71 00:03:28,000 --> 00:03:30,280 Speaker 3: of at odds with what they're saying. And I'll give 72 00:03:30,280 --> 00:03:33,000 Speaker 3: you an example. So the melt up in many ways 73 00:03:33,240 --> 00:03:38,680 Speaker 3: took place as a result of the expected FED rate cuts, right, 74 00:03:39,520 --> 00:03:43,320 Speaker 3: And actually much of last year's whole performance was based 75 00:03:43,360 --> 00:03:47,640 Speaker 3: on the idea that the FED was done tightening. It 76 00:03:47,640 --> 00:03:49,920 Speaker 3: was only a matter of time until they started loosening, 77 00:03:50,480 --> 00:03:53,560 Speaker 3: and or the only amount of time before they stopped tightening. 78 00:03:53,640 --> 00:03:55,560 Speaker 3: And then kind of later in the year it became 79 00:03:56,160 --> 00:04:00,400 Speaker 3: when are they going to cut and now or as 80 00:04:00,400 --> 00:04:02,040 Speaker 3: of the end of the year, And even now it's 81 00:04:02,160 --> 00:04:04,000 Speaker 3: kind of priced in that we're going to get seven 82 00:04:04,080 --> 00:04:07,720 Speaker 3: rate cuts in twenty twenty four. But the thing is, 83 00:04:07,880 --> 00:04:10,520 Speaker 3: and so as a result, everybody's buying stocks, right, and 84 00:04:10,960 --> 00:04:14,080 Speaker 3: equities are back at their all time highs. But if 85 00:04:14,160 --> 00:04:18,080 Speaker 3: equities are still at their all time highs and markets 86 00:04:18,120 --> 00:04:20,039 Speaker 3: are still holding up, then they're not going to cut 87 00:04:20,080 --> 00:04:24,960 Speaker 3: seven times in my opinion, In other words, front running 88 00:04:25,080 --> 00:04:28,640 Speaker 3: the cuts has somewhat negated the need for the cuts. 89 00:04:29,640 --> 00:04:32,599 Speaker 3: And secondly is even if we do get seven cuts, 90 00:04:32,640 --> 00:04:34,760 Speaker 3: it's kind of already priced in. So what happens if 91 00:04:34,760 --> 00:04:36,839 Speaker 3: we only get four, right, or what happens if we 92 00:04:36,880 --> 00:04:41,600 Speaker 3: only get three? And in my opinion, if we do 93 00:04:41,720 --> 00:04:44,640 Speaker 3: get seven cuts, it's because the market is falling and 94 00:04:44,680 --> 00:04:48,120 Speaker 3: the economy is not good, not because it's great. And 95 00:04:48,200 --> 00:04:52,200 Speaker 3: so you know, I think to get seven rate cuts 96 00:04:52,200 --> 00:04:55,200 Speaker 3: we need the equity markets and economics to be much 97 00:04:55,279 --> 00:04:58,680 Speaker 3: lower and not at all time high. So so I 98 00:04:58,720 --> 00:05:02,359 Speaker 3: think there's this kind of disc between what drives FED 99 00:05:02,400 --> 00:05:06,440 Speaker 3: policy and what doesn't. So to me, it was kind 100 00:05:06,440 --> 00:05:10,240 Speaker 3: of an interesting year to watch this take place, and 101 00:05:10,440 --> 00:05:11,480 Speaker 3: like I said at the end of the year, is 102 00:05:11,520 --> 00:05:13,559 Speaker 3: kind of frustrating to see this melt up take place, 103 00:05:13,640 --> 00:05:15,880 Speaker 3: which to be honest, we didn't really participate in. So 104 00:05:15,920 --> 00:05:17,240 Speaker 3: that was a little frustrating as well. 105 00:05:17,640 --> 00:05:19,960 Speaker 1: Couldn't you say with that line of thinking, couldn't you 106 00:05:20,000 --> 00:05:23,560 Speaker 1: say that we're I mean, maybe what we're seeing right 107 00:05:23,600 --> 00:05:27,000 Speaker 1: now contradicts that. So like, why is the FED cutting 108 00:05:27,040 --> 00:05:30,320 Speaker 1: when the economy in the market so well, unemployments holding up, 109 00:05:30,880 --> 00:05:34,360 Speaker 1: we're still having positive GDP growth, pretty strong positive GDP 110 00:05:34,560 --> 00:05:37,440 Speaker 1: growth of that matter. And you know a lot of 111 00:05:37,760 --> 00:05:41,440 Speaker 1: pundits online are saying basically that why are they cutting? 112 00:05:41,440 --> 00:05:43,680 Speaker 2: Why are they pivoting when we are so strong? 113 00:05:45,520 --> 00:05:47,960 Speaker 3: So I've got a couple of different reasons why I 114 00:05:48,000 --> 00:05:51,239 Speaker 3: think that could be. And you know, this is probably 115 00:05:51,240 --> 00:05:52,560 Speaker 3: a good time for me to say, is you know, 116 00:05:52,600 --> 00:05:55,719 Speaker 3: when I was kind of younger in the business and 117 00:05:55,800 --> 00:05:58,920 Speaker 3: kind of starting out, I always tried to be right, 118 00:05:59,480 --> 00:06:01,360 Speaker 3: and I always tried to figure out exactly what was 119 00:06:01,400 --> 00:06:03,560 Speaker 3: going to happen. And the older I get, the more 120 00:06:03,600 --> 00:06:06,400 Speaker 3: I realize I just don't know and nobody does. And 121 00:06:06,480 --> 00:06:09,120 Speaker 3: so rather than always trying to be right about everything, 122 00:06:09,200 --> 00:06:12,440 Speaker 3: I now just try to be prepared for anything. So 123 00:06:12,480 --> 00:06:16,000 Speaker 3: I'll tell you kind of why I think they could 124 00:06:16,279 --> 00:06:19,400 Speaker 3: be doing this. But I'm the first one to say 125 00:06:19,400 --> 00:06:21,680 Speaker 3: that I don't really know when neither does anybody else. 126 00:06:21,720 --> 00:06:25,640 Speaker 3: So one theory, or one thing that could be is 127 00:06:25,680 --> 00:06:30,680 Speaker 3: that they have some insight into the trends that are emerging, 128 00:06:31,200 --> 00:06:36,240 Speaker 3: and the trend of whether it's you know, economic numbers 129 00:06:36,360 --> 00:06:40,360 Speaker 3: or reserves available in the banking system, or inflationary pressures, 130 00:06:41,000 --> 00:06:44,920 Speaker 3: and they see us of a bigger slow down coming 131 00:06:45,160 --> 00:06:48,039 Speaker 3: than is currently being reflected kind of in the data. 132 00:06:48,400 --> 00:06:50,720 Speaker 3: But they see the data slowing fast, and they think 133 00:06:50,760 --> 00:06:53,640 Speaker 3: it could slow much faster, and they are trying to 134 00:06:53,680 --> 00:06:57,800 Speaker 3: get out in front of it. That's one possibility. Somewhat 135 00:06:57,839 --> 00:07:01,440 Speaker 3: related to that is that I think and Powell started 136 00:07:01,480 --> 00:07:04,360 Speaker 3: the hiking cycle two years ago. That's the other interesting 137 00:07:04,400 --> 00:07:06,120 Speaker 3: thing is literally if you look at a number of 138 00:07:06,160 --> 00:07:09,039 Speaker 3: different asset classes, they are right now where they were 139 00:07:09,040 --> 00:07:11,480 Speaker 3: two years ago when the whole hiking cycle started. So 140 00:07:11,480 --> 00:07:14,280 Speaker 3: it's kind of interesting that everything's back to where it was, 141 00:07:14,320 --> 00:07:17,120 Speaker 3: except for interest rates are now five percent instead of 142 00:07:17,200 --> 00:07:21,960 Speaker 3: zero percent. But I think when he started his hiking cycle, Powell, 143 00:07:22,040 --> 00:07:25,000 Speaker 3: I mean, I don't think that he believed that he 144 00:07:25,040 --> 00:07:29,120 Speaker 3: would be able to raise interest rates and slow inflation 145 00:07:29,360 --> 00:07:34,800 Speaker 3: without causing a hard landing or a recession. And he 146 00:07:34,880 --> 00:07:38,080 Speaker 3: kind of, you know, he was pretty clear about that. 147 00:07:38,200 --> 00:07:41,080 Speaker 3: He often said, you know, there needs to be pain. 148 00:07:41,600 --> 00:07:43,960 Speaker 3: This isn't going to be easy. You know, you know, 149 00:07:44,040 --> 00:07:47,280 Speaker 3: unemployment will probably lie, you know, profits will probably fall. 150 00:07:47,520 --> 00:07:51,200 Speaker 3: Like he was pretty tough about that initially, and I 151 00:07:51,240 --> 00:07:53,480 Speaker 3: don't think he would have said that if he didn't 152 00:07:53,480 --> 00:07:55,200 Speaker 3: believe it, you know, and he even said the pain 153 00:07:55,280 --> 00:07:57,720 Speaker 3: from a recession, we believe that the pain from a 154 00:07:57,800 --> 00:08:01,720 Speaker 3: recession would be less than the pain from continued inflation. 155 00:08:02,080 --> 00:08:04,080 Speaker 3: So I think he believed that he was going to 156 00:08:04,080 --> 00:08:06,480 Speaker 3: have to cause at least a small recession in order 157 00:08:06,520 --> 00:08:10,320 Speaker 3: to get rates back up and to get inflation under control. 158 00:08:10,640 --> 00:08:14,000 Speaker 3: But I think as he went along and got closer 159 00:08:14,040 --> 00:08:17,760 Speaker 3: and closer, you know, as as equity markets kind of 160 00:08:18,280 --> 00:08:20,280 Speaker 3: you know, they fell initially, and then they ramped up 161 00:08:20,280 --> 00:08:22,240 Speaker 3: over the last year, and as they kind of moved 162 00:08:22,360 --> 00:08:26,400 Speaker 3: back towards their all time highs, and the overall economy 163 00:08:26,440 --> 00:08:28,760 Speaker 3: held up, and we didn't have you know, a real 164 00:08:28,840 --> 00:08:33,560 Speaker 3: estate collapse, and you know, inflation, while maybe it didn't crash, 165 00:08:33,800 --> 00:08:36,200 Speaker 3: it stopped going up as fast and it has started 166 00:08:36,240 --> 00:08:40,720 Speaker 3: to come down. I think that maybe he thought, maybe 167 00:08:40,800 --> 00:08:43,439 Speaker 3: I can pull this off right, maybe I can stick 168 00:08:43,480 --> 00:08:46,400 Speaker 3: this landing. And as a result, then I think he 169 00:08:46,600 --> 00:08:50,120 Speaker 3: probably started trying to be taught at least talk a 170 00:08:50,160 --> 00:08:54,760 Speaker 3: little bit nicer than he had been previously. And then 171 00:08:54,800 --> 00:08:57,840 Speaker 3: I think, you know, I think there is truth to 172 00:08:57,920 --> 00:09:01,760 Speaker 3: the idea that at the at the November he said, 173 00:09:01,880 --> 00:09:06,040 Speaker 3: before we will start to slow before we get to 174 00:09:06,080 --> 00:09:09,760 Speaker 3: two percent, right, so I think what the readings are 175 00:09:09,760 --> 00:09:12,640 Speaker 3: now around four percent, the goal is two percent. It 176 00:09:12,679 --> 00:09:14,360 Speaker 3: does make sense, you don't if you know, if you're 177 00:09:14,360 --> 00:09:16,480 Speaker 3: flying a plane, you don't want to land going five 178 00:09:16,559 --> 00:09:19,240 Speaker 3: hundred miles an hour. It does kind of make sense 179 00:09:19,280 --> 00:09:22,000 Speaker 3: to kind of slow down into the landing. And so 180 00:09:22,040 --> 00:09:24,440 Speaker 3: I think kind of related to that, thinking that he 181 00:09:24,480 --> 00:09:27,240 Speaker 3: can stop or stick this landing, maybe he thinks that, 182 00:09:27,520 --> 00:09:29,200 Speaker 3: you know, it makes sense to kind of start this 183 00:09:29,320 --> 00:09:32,720 Speaker 3: glide path to slow down a little bit. And then, 184 00:09:33,040 --> 00:09:35,640 Speaker 3: which I'm sure is not news to anybody. I think 185 00:09:35,920 --> 00:09:38,080 Speaker 3: it's political. You know, I don't think they want a 186 00:09:38,120 --> 00:09:41,640 Speaker 3: massive recession heading into a presidential election. I think they 187 00:09:41,640 --> 00:09:44,560 Speaker 3: would prefer that things kind of continue going as they are. 188 00:09:45,160 --> 00:09:47,040 Speaker 3: I think he likes being the FED chair. I think 189 00:09:47,080 --> 00:09:49,360 Speaker 3: he would like Biden to reappoint him if Biden gets 190 00:09:49,360 --> 00:09:52,640 Speaker 3: re elected. And I think, you know, if if Trump 191 00:09:52,640 --> 00:09:55,200 Speaker 3: gets re elected, maybe he would stay in that job, 192 00:09:55,200 --> 00:09:58,800 Speaker 3: but maybe he wouldn't. And so I think there's some 193 00:09:58,840 --> 00:10:00,720 Speaker 3: of that as well. I think the FED it is political. 194 00:10:00,840 --> 00:10:03,720 Speaker 3: The people who tell me that the FED is independent, 195 00:10:04,480 --> 00:10:07,360 Speaker 3: I you know, I understand that that's what's written, you know, 196 00:10:07,600 --> 00:10:09,600 Speaker 3: in the textbooks, but I just don't think that's the 197 00:10:09,640 --> 00:10:11,600 Speaker 3: real world. I think they're very political. 198 00:10:11,679 --> 00:10:12,960 Speaker 2: Yeah, of course they're political. 199 00:10:13,160 --> 00:10:15,640 Speaker 1: I would have a hard time understanding how anybody could 200 00:10:15,640 --> 00:10:17,720 Speaker 1: think that they're independent. So I would agree with you 201 00:10:17,880 --> 00:10:20,560 Speaker 1: on that. I think if you look at the PC data, 202 00:10:20,640 --> 00:10:23,640 Speaker 1: it looks like they're way under shooting their target. Potentially 203 00:10:23,640 --> 00:10:25,800 Speaker 1: you could reach the end of twenty twenty four goals 204 00:10:25,840 --> 00:10:28,200 Speaker 1: by like March, and so maybe they're starting to go, oh, shoot, 205 00:10:28,240 --> 00:10:29,480 Speaker 1: we're breaking too hard. 206 00:10:29,240 --> 00:10:30,960 Speaker 2: Like let's let off the brakes a little bit. Yep. 207 00:10:31,360 --> 00:10:33,880 Speaker 1: So we'll see. But I guess that sort of takes 208 00:10:33,960 --> 00:10:37,560 Speaker 1: us into one of the topics I wan't talk about, 209 00:10:37,559 --> 00:10:41,200 Speaker 1: which was the election cycle. So I think maybe only 210 00:10:41,240 --> 00:10:43,760 Speaker 1: one president income and president in a reelection year is 211 00:10:43,800 --> 00:10:46,920 Speaker 1: one during a recession. So if the Democrats want to 212 00:10:46,920 --> 00:10:48,840 Speaker 1: win again, they're going to do anything they can to 213 00:10:49,040 --> 00:10:50,320 Speaker 1: make sure we don't have a recession. 214 00:10:53,400 --> 00:10:55,320 Speaker 2: And you know, I guess they'll use whatever tools they 215 00:10:55,320 --> 00:10:56,160 Speaker 2: have at their disposal. 216 00:10:56,280 --> 00:10:58,600 Speaker 1: So do you think that's going to be enough to 217 00:10:58,679 --> 00:11:02,160 Speaker 1: be able to sort of dry markets this year? I mean, 218 00:11:02,200 --> 00:11:03,880 Speaker 1: do you think that will be the big sort of 219 00:11:03,920 --> 00:11:07,800 Speaker 1: theme that might prevent any of these. Last year, we 220 00:11:07,880 --> 00:11:10,560 Speaker 1: still had lot. I think the general consensus was a 221 00:11:10,559 --> 00:11:13,840 Speaker 1: big recession last year didn't happen. Now the general consensus 222 00:11:13,840 --> 00:11:15,880 Speaker 1: seems to be no recession in twenty twenty four. 223 00:11:16,320 --> 00:11:21,360 Speaker 3: Right, Yeah, And I don't know that we're going to 224 00:11:21,360 --> 00:11:24,720 Speaker 3: get a recession. My kind of base case is that 225 00:11:24,800 --> 00:11:26,920 Speaker 3: at some point this year, whether it's in the first 226 00:11:26,960 --> 00:11:31,080 Speaker 3: half or the second half, we will get a downturn 227 00:11:31,200 --> 00:11:34,439 Speaker 3: in the economy and in the stock market. So I'm 228 00:11:34,520 --> 00:11:38,880 Speaker 3: not in the melt up all year camp now. Having 229 00:11:38,920 --> 00:11:40,959 Speaker 3: been wrong about that last year, I'm the first admit 230 00:11:41,000 --> 00:11:43,719 Speaker 3: that I can paint a scenario where we do get 231 00:11:43,720 --> 00:11:45,640 Speaker 3: a melt up all year, but I think that that 232 00:11:45,760 --> 00:11:50,040 Speaker 3: is unlikely now. Whether we slow down in the first 233 00:11:50,120 --> 00:11:53,640 Speaker 3: half and that causes the FED to really pivot and 234 00:11:53,679 --> 00:11:56,400 Speaker 3: we do get those seven rate cuts as a result 235 00:11:56,440 --> 00:11:59,200 Speaker 3: of them trying to quote unquote save the market and 236 00:11:59,240 --> 00:12:03,400 Speaker 3: goose it higher, or if we get into the you know, 237 00:12:03,480 --> 00:12:06,000 Speaker 3: things kind of stay strong into the summer and then 238 00:12:06,040 --> 00:12:09,920 Speaker 3: into the fall, we get some volatility. I don't know, 239 00:12:10,000 --> 00:12:12,199 Speaker 3: but I do not think that we are going to 240 00:12:12,280 --> 00:12:16,880 Speaker 3: get through twenty twenty four with the vix averaging you 241 00:12:16,920 --> 00:12:20,959 Speaker 3: know below fifteen, Like like the vixes at the all 242 00:12:21,000 --> 00:12:23,719 Speaker 3: time low, equities are at their all time highs. You know, 243 00:12:23,760 --> 00:12:26,920 Speaker 3: I feel like the market is priced to perfection. But 244 00:12:27,000 --> 00:12:29,600 Speaker 3: I just feel like we live in a very unperfect world. 245 00:12:30,240 --> 00:12:35,679 Speaker 3: And as it relates to, you know, politics, I am 246 00:12:35,760 --> 00:12:38,160 Speaker 3: of the belief and again I don't think this is 247 00:12:38,240 --> 00:12:41,680 Speaker 3: necessarily a unique view, but I feel very strongly about 248 00:12:41,720 --> 00:12:46,199 Speaker 3: it that whoever wins, the other side will not accept it. 249 00:12:47,280 --> 00:12:50,480 Speaker 3: So while I think the powers that be, whether it's 250 00:12:50,480 --> 00:12:53,200 Speaker 3: the FED or the Treasury, or the White House or 251 00:12:53,240 --> 00:12:57,960 Speaker 3: the all working in combination, try to keep things moving smoothly, 252 00:12:59,040 --> 00:13:02,360 Speaker 3: I don't. I don't think just because my point is 253 00:13:02,440 --> 00:13:04,360 Speaker 3: just because they want things to go smoothly in a 254 00:13:04,400 --> 00:13:08,040 Speaker 3: presidential election year, I don't think that they necessarily will, 255 00:13:08,120 --> 00:13:11,800 Speaker 3: and typically they do go well in a presidential election year. 256 00:13:11,840 --> 00:13:13,960 Speaker 3: But you know, remember we had COVID in twenty twenty. 257 00:13:13,960 --> 00:13:17,360 Speaker 3: That was a presidential election year. The global financial crisis 258 00:13:17,480 --> 00:13:21,480 Speaker 3: was literally happening right in the middle of the two 259 00:13:21,520 --> 00:13:25,240 Speaker 3: thousand and eight presidential the run up to the presidential 260 00:13:25,280 --> 00:13:28,120 Speaker 3: election that there was even a point where John McCain 261 00:13:28,160 --> 00:13:32,040 Speaker 3: and Barack Obama, you know, suggested suspending their campaigns to 262 00:13:32,080 --> 00:13:36,199 Speaker 3: go back to Washington and focus on the global financial crisis. 263 00:13:36,240 --> 00:13:40,720 Speaker 3: So just because you know, monetary authorities and governments don't 264 00:13:40,720 --> 00:13:43,360 Speaker 3: want bad things to happen, doesn't mean that they won't 265 00:13:43,400 --> 00:13:46,839 Speaker 3: happen anyway. So that's kind of where I come down. 266 00:13:46,920 --> 00:13:51,160 Speaker 3: I think we are going to have high volatility this year. 267 00:13:51,200 --> 00:13:53,640 Speaker 3: Are much higher volatility this year than last year. 268 00:13:53,720 --> 00:13:55,840 Speaker 1: Yeah, that's a really good point that you bring up, 269 00:13:55,880 --> 00:13:58,640 Speaker 1: and you're absolutely right. I remember in twenty sixteen election 270 00:14:00,160 --> 00:14:01,880 Speaker 1: there was a lot of all not so much in 271 00:14:01,920 --> 00:14:05,720 Speaker 1: the markets per se, but certainly throughout the country in 272 00:14:05,760 --> 00:14:07,920 Speaker 1: the economy. I think there was like six different cities 273 00:14:07,960 --> 00:14:10,520 Speaker 1: that were on fire that was sort of like BLM 274 00:14:10,640 --> 00:14:13,640 Speaker 1: was kind of taking over. Riots happening everywhere, and so 275 00:14:15,040 --> 00:14:18,400 Speaker 1: already the talk of this being the most important election ever. 276 00:14:18,240 --> 00:14:21,080 Speaker 3: And so whatever we've seen, everyone is right. 277 00:14:21,200 --> 00:14:24,200 Speaker 1: Yeah, well it seems like everyone becomes more and more important. 278 00:14:24,760 --> 00:14:27,560 Speaker 1: But it seems that maybe some of that disruption we 279 00:14:27,640 --> 00:14:29,520 Speaker 1: might see might be amplified. 280 00:14:30,440 --> 00:14:32,480 Speaker 2: Now if we jumped to a little bit of. 281 00:14:32,480 --> 00:14:35,480 Speaker 1: A higher level, maybe sort of maybe Warrior a little 282 00:14:35,520 --> 00:14:37,040 Speaker 1: bit more better known for at least from what I 283 00:14:37,120 --> 00:14:40,680 Speaker 1: see on Twitter, sort of looking at the fiscal side 284 00:14:40,720 --> 00:14:44,560 Speaker 1: of things and the Treasury. It seems like, you know, 285 00:14:44,640 --> 00:14:46,880 Speaker 1: the Fed sort of got neutered a little bit by 286 00:14:46,920 --> 00:14:49,000 Speaker 1: trying to bring the pain pain, pain to the point 287 00:14:49,080 --> 00:14:51,320 Speaker 1: that you said earlier, because they can only make you 288 00:14:51,360 --> 00:14:54,000 Speaker 1: and I feel pain. But Janet yelling over at the 289 00:14:54,000 --> 00:14:58,360 Speaker 1: Treasury wants to continue this deficit spending like we're in 290 00:14:58,400 --> 00:15:00,280 Speaker 1: World War seven or something. 291 00:15:00,720 --> 00:15:01,640 Speaker 2: I don't even know who we're at. 292 00:15:01,680 --> 00:15:03,840 Speaker 1: Like they spend so much definite spending, and it's like 293 00:15:03,880 --> 00:15:07,600 Speaker 1: almost no matter how broke Jerome Powell makes you and I, 294 00:15:07,720 --> 00:15:11,680 Speaker 1: you have the Treasury spending that much and they're continuing 295 00:15:11,720 --> 00:15:14,040 Speaker 1: to spend that much. The deficit is continuing to grow, 296 00:15:15,520 --> 00:15:18,200 Speaker 1: and at the same time, we've already started to see 297 00:15:18,360 --> 00:15:21,360 Speaker 1: it seems like some dysfunction happening in the treasury markets. 298 00:15:21,680 --> 00:15:23,160 Speaker 1: You might disagree with that, so I'd like to hear 299 00:15:23,200 --> 00:15:25,200 Speaker 1: your point, but we've seen some tales happening in some 300 00:15:25,240 --> 00:15:27,640 Speaker 1: of these auctions, and it seems like, I know a 301 00:15:27,640 --> 00:15:32,480 Speaker 1: lot of people would say that the foreign governments aren't 302 00:15:32,520 --> 00:15:34,440 Speaker 1: buying as much treasury debt, and I know you have 303 00:15:34,480 --> 00:15:36,280 Speaker 1: an answer for that, but when I look at some 304 00:15:36,320 --> 00:15:39,000 Speaker 1: of the auctions, it looks like they're buying almost as much. 305 00:15:39,080 --> 00:15:42,360 Speaker 1: It's just there's more supply than there was before. So anyway, 306 00:15:42,360 --> 00:15:44,480 Speaker 1: what's your outlook on sort of that debt and that 307 00:15:44,480 --> 00:15:45,400 Speaker 1: fiscal side. 308 00:15:47,160 --> 00:15:51,160 Speaker 3: Yeah, so the first thing I'll say is that whatever 309 00:15:51,440 --> 00:15:56,160 Speaker 3: your projections for the budget deficit and the national debt are, 310 00:15:56,200 --> 00:15:57,480 Speaker 3: I think they're too low. 311 00:15:58,840 --> 00:16:01,080 Speaker 2: And the CBO has are. 312 00:16:01,120 --> 00:16:05,240 Speaker 3: Out right, yeah and so and so this this often 313 00:16:05,280 --> 00:16:08,200 Speaker 3: gets me painted as kind of well, this is why 314 00:16:08,400 --> 00:16:11,320 Speaker 3: my whole thesis of the dollar getting stronger is often 315 00:16:11,440 --> 00:16:14,720 Speaker 3: kind of confusing to people, because a lot of people 316 00:16:14,800 --> 00:16:17,720 Speaker 3: will say, because they're going to spend so much money, 317 00:16:18,160 --> 00:16:21,360 Speaker 3: because they're borrowing so much that they will never be 318 00:16:21,400 --> 00:16:24,240 Speaker 3: able to pay back, then therefore that means they're going 319 00:16:24,280 --> 00:16:26,640 Speaker 3: to have to print a bunch of dollars and the 320 00:16:26,680 --> 00:16:30,120 Speaker 3: dollar is going to lose value. And in the overall 321 00:16:30,280 --> 00:16:33,880 Speaker 3: long scope of history, that is probably true. But if 322 00:16:33,920 --> 00:16:38,240 Speaker 3: we get back to the whole you know, eminent versus inevitable. 323 00:16:38,400 --> 00:16:40,840 Speaker 3: You know that you mentioned at the very top of 324 00:16:40,880 --> 00:16:44,320 Speaker 3: the hour, and the thing that people need to remember, 325 00:16:44,440 --> 00:16:46,280 Speaker 3: and we don't need to go too far down this path, 326 00:16:46,360 --> 00:16:49,120 Speaker 3: is that is that currencies trade relative to each other. 327 00:16:49,160 --> 00:16:51,960 Speaker 3: They didn't always, but they do now. And you know, 328 00:16:51,960 --> 00:16:54,560 Speaker 3: we're no longer on a gold standard. The whole world 329 00:16:54,600 --> 00:16:57,120 Speaker 3: is on a US dollar standard now. Whether you think 330 00:16:57,160 --> 00:16:58,960 Speaker 3: they should be or whether you think they shouldn't be, 331 00:16:59,400 --> 00:17:01,920 Speaker 3: that's an entirely different debate. The fact is, as they are. 332 00:17:02,280 --> 00:17:06,200 Speaker 3: The whole world uses dollars. And while our budget deficit 333 00:17:06,320 --> 00:17:10,760 Speaker 3: is enormous and our budget and our national debt is enormous, 334 00:17:11,520 --> 00:17:13,800 Speaker 3: every other country is running a budget deficit as well, 335 00:17:13,880 --> 00:17:16,360 Speaker 3: and they're spending a lot of money as well, and 336 00:17:16,760 --> 00:17:19,359 Speaker 3: they don't have nearly the amount of advantages that the 337 00:17:19,440 --> 00:17:22,200 Speaker 3: United States does, and so on a relative basis, there 338 00:17:22,320 --> 00:17:26,320 Speaker 3: is demand for US treasury bonds and US dollars and 339 00:17:26,400 --> 00:17:31,720 Speaker 3: that sort of gives the the the US government the 340 00:17:31,800 --> 00:17:37,360 Speaker 3: ability to get away with these ridiculous policies more than 341 00:17:37,400 --> 00:17:39,560 Speaker 3: say some other You know, if if Turkey was running 342 00:17:39,560 --> 00:17:43,040 Speaker 3: these policies, or South Africa or you know, Argentina or 343 00:17:43,080 --> 00:17:45,000 Speaker 3: whatever it is, then you're going to see their currency 344 00:17:45,000 --> 00:17:47,399 Speaker 3: falling a lot. But we have, you know, we have, 345 00:17:47,760 --> 00:17:50,720 Speaker 3: and we have right. But that is there is a 346 00:17:50,800 --> 00:17:53,119 Speaker 3: difference again, whether you think there should be or not, 347 00:17:54,440 --> 00:17:57,119 Speaker 3: in the real world, there is a difference between the 348 00:17:57,160 --> 00:18:00,359 Speaker 3: country issuing the global reserve currency and a periphery country 349 00:18:00,359 --> 00:18:05,479 Speaker 3: that nobody needs their currency. And so, but what I 350 00:18:05,560 --> 00:18:10,680 Speaker 3: think probably happens barring a crisis. So barring a crisis, well, 351 00:18:10,720 --> 00:18:13,960 Speaker 3: the same thing is is this could even cause the crisis. 352 00:18:14,760 --> 00:18:17,639 Speaker 3: Is that if we get into some kind of a 353 00:18:18,160 --> 00:18:21,280 Speaker 3: mass liquidating market like we had in two thousand and eight, 354 00:18:21,400 --> 00:18:26,400 Speaker 3: like we had in twenty twenty, then I think treasury 355 00:18:26,400 --> 00:18:30,000 Speaker 3: bonds may very well rally dramatically and interest rates could fall. 356 00:18:31,680 --> 00:18:34,560 Speaker 3: But if we don't have that, what I think could 357 00:18:34,600 --> 00:18:38,000 Speaker 3: also happen is I've been saying for many years that 358 00:18:38,080 --> 00:18:43,600 Speaker 3: we are headed towards a sovereign debt crisis where countries 359 00:18:43,840 --> 00:18:47,880 Speaker 3: get into trouble, not just corporations or companies or families, right, 360 00:18:48,440 --> 00:18:54,560 Speaker 3: And in that scenario, global interest rates rise because nobody 361 00:18:54,600 --> 00:18:57,040 Speaker 3: wants to buy those bonds or those or those countries 362 00:18:57,080 --> 00:18:59,399 Speaker 3: have to pay more in order to get people to 363 00:18:59,400 --> 00:19:02,280 Speaker 3: buy their bonds. Now, I think that that if the 364 00:19:02,400 --> 00:19:05,040 Speaker 3: US continues to spend at the rate that they are, 365 00:19:05,680 --> 00:19:08,400 Speaker 3: and we avoid some kind of a liquidating marker where 366 00:19:08,440 --> 00:19:11,800 Speaker 3: everybody does a scramble for treasuries, then it would not 367 00:19:11,880 --> 00:19:13,720 Speaker 3: surprise me at all. To see the ten year back 368 00:19:13,760 --> 00:19:16,080 Speaker 3: at five percent wouldn't surprise me. To see it go 369 00:19:16,119 --> 00:19:19,600 Speaker 3: to six or seven percent over the next couple of years. Now, 370 00:19:19,680 --> 00:19:21,960 Speaker 3: then again people will say, well, this is horrible for 371 00:19:22,000 --> 00:19:24,600 Speaker 3: the US because then the interest expense is going to 372 00:19:24,640 --> 00:19:27,119 Speaker 3: be two trillion a year rather than one whatever. Whatever 373 00:19:27,119 --> 00:19:29,960 Speaker 3: the number is right, and again in the very long 374 00:19:30,080 --> 00:19:32,679 Speaker 3: arc of history, I agree. But in the short term, 375 00:19:34,040 --> 00:19:38,240 Speaker 3: in the short term, I think other currencies and other 376 00:19:38,320 --> 00:19:40,800 Speaker 3: sovereign bonds will get rejected as well. So, in other words, 377 00:19:40,920 --> 00:19:45,080 Speaker 3: even though governments around the world are institutions around there, 378 00:19:45,240 --> 00:19:48,080 Speaker 3: what maybe don't want to buy treasuries at the same 379 00:19:48,160 --> 00:19:51,040 Speaker 3: rate as they used to. I don't think that they're 380 00:19:51,040 --> 00:19:54,399 Speaker 3: going to buy Italian treasuries instead of US treasuries. I 381 00:19:54,400 --> 00:19:57,040 Speaker 3: don't think they're going to start buying Canadian treasuries instead 382 00:19:57,040 --> 00:19:59,520 Speaker 3: of US treasuries. In other words, I think we could 383 00:19:59,520 --> 00:20:02,199 Speaker 3: get into a scenario where all interest rates rise on 384 00:20:02,320 --> 00:20:06,760 Speaker 3: government bonds and that and if the US Treasury is 385 00:20:06,840 --> 00:20:09,760 Speaker 3: paying let's call it five or six, six, six or 386 00:20:09,760 --> 00:20:13,440 Speaker 3: seven percent on their ten year treasury. To me, this 387 00:20:13,520 --> 00:20:17,639 Speaker 3: is a nightmare for emerging markets because one of the 388 00:20:17,680 --> 00:20:21,680 Speaker 3: way that emerging markets gets access to funding, is they 389 00:20:21,720 --> 00:20:25,760 Speaker 3: pay more than the US Treasury, right if you need 390 00:20:25,880 --> 00:20:28,479 Speaker 3: if you need dollars to operate on the global stage, 391 00:20:29,000 --> 00:20:31,760 Speaker 3: but you don't need Turkish lira to operate on those 392 00:20:31,800 --> 00:20:35,040 Speaker 3: global stage, or you don't need uh, you know, tie 393 00:20:35,080 --> 00:20:38,679 Speaker 3: bonds ti bot in order to operate on the global stage, 394 00:20:39,359 --> 00:20:41,680 Speaker 3: and they're both yielding the same, You're going to buy 395 00:20:41,680 --> 00:20:45,480 Speaker 3: a US treasury it just makes more sense. And so 396 00:20:46,320 --> 00:20:48,760 Speaker 3: if we get higher yields in the on the in 397 00:20:48,840 --> 00:20:53,199 Speaker 3: the US Treasury, this could cause a funding problem for 398 00:20:53,320 --> 00:20:57,080 Speaker 3: the rest of the world, which could then kind of 399 00:20:57,160 --> 00:21:02,000 Speaker 3: kick off this global sovereign debt cry basis or currency 400 00:21:02,040 --> 00:21:06,440 Speaker 3: crisis that I think at some point will happen. So 401 00:21:06,040 --> 00:21:09,000 Speaker 3: so I'm going to get to your your your your 402 00:21:09,040 --> 00:21:11,560 Speaker 3: question about the treasury auctions, and this is where the 403 00:21:11,560 --> 00:21:14,360 Speaker 3: treasury auctions come into hand. I don't think we are 404 00:21:14,400 --> 00:21:18,960 Speaker 3: going to have a failed US Treasury auction. And this 405 00:21:19,080 --> 00:21:21,199 Speaker 3: is probably too long of it that we can get 406 00:21:21,240 --> 00:21:23,560 Speaker 3: into it if you want to. But there's several operational 407 00:21:23,600 --> 00:21:26,399 Speaker 3: reasons why I don't think we have one, but the 408 00:21:27,000 --> 00:21:31,480 Speaker 3: the treasury tails that you mentioned. Oftentimes, these these auctions 409 00:21:31,560 --> 00:21:36,040 Speaker 3: are usually well they're always over subscribed, right, so if 410 00:21:36,040 --> 00:21:37,920 Speaker 3: they auction I'm just going to make up a number. 411 00:21:37,920 --> 00:21:40,840 Speaker 3: But if they're auctioning off one hundred billion dollars worth 412 00:21:40,880 --> 00:21:44,480 Speaker 3: of Treasury bonds, there's two to three hundred billion dollars 413 00:21:44,480 --> 00:21:47,359 Speaker 3: worth of interest on these or or you know, people 414 00:21:47,440 --> 00:21:51,399 Speaker 3: bidding for these bonds. So we've never been close to 415 00:21:51,480 --> 00:21:54,639 Speaker 3: a failed auction. But you know, in order to place 416 00:21:54,680 --> 00:21:57,320 Speaker 3: all those bonds, you know they are asking for a 417 00:21:57,359 --> 00:22:00,720 Speaker 3: higher yield, or there have been cases where they've asked 418 00:22:00,720 --> 00:22:05,040 Speaker 3: for a higher yield to finish off the auction, and 419 00:22:05,080 --> 00:22:09,119 Speaker 3: therefore you get these tales that you were mentioning. So 420 00:22:09,160 --> 00:22:10,840 Speaker 3: I think, but I think it's important to remember that 421 00:22:10,880 --> 00:22:14,240 Speaker 3: it's not a case where nobody's showing up to the auction. 422 00:22:14,480 --> 00:22:18,199 Speaker 3: All of the auctions are always over subscribed. Could we 423 00:22:18,240 --> 00:22:22,680 Speaker 3: get into a situation where nobody shows up? Theoretically yes, 424 00:22:22,720 --> 00:22:25,440 Speaker 3: but again, and it's really hard to see that happen. 425 00:22:26,119 --> 00:22:28,359 Speaker 3: I do not believe it's possible that we would have 426 00:22:28,400 --> 00:22:32,679 Speaker 3: a failed US Treasury auction. But again, France continues to 427 00:22:32,680 --> 00:22:37,159 Speaker 3: be funded, Italy be's funded, South Africa's funded, Egypt's funded, 428 00:22:37,160 --> 00:22:40,639 Speaker 3: Australia's funded again, you know, the US dollar kind of 429 00:22:40,640 --> 00:22:43,720 Speaker 3: says at the base of the pyramid, it's really hard 430 00:22:43,760 --> 00:22:46,760 Speaker 3: to have the foundation of a house fall and not 431 00:22:46,840 --> 00:22:49,440 Speaker 3: have the rest of the house go with it. It's possible, 432 00:22:49,480 --> 00:22:50,760 Speaker 3: but it's very unlikely. 433 00:22:52,280 --> 00:22:53,080 Speaker 2: Yeah. 434 00:22:53,160 --> 00:22:55,080 Speaker 1: The one thing I learned very or very early on 435 00:22:55,119 --> 00:22:57,480 Speaker 1: in my investing career was money goes where it's treated best. 436 00:22:57,680 --> 00:22:59,320 Speaker 1: And I think that's sort of what you're saying. So 437 00:22:59,560 --> 00:23:02,600 Speaker 1: it's not to go to Turkey or Argentina. So it's 438 00:23:02,600 --> 00:23:05,600 Speaker 1: gonna go worad's treated best. And so what we'll probably 439 00:23:05,600 --> 00:23:08,960 Speaker 1: see and to your to your thesis, the milkshake thesis, 440 00:23:09,000 --> 00:23:11,080 Speaker 1: is that the dollar will continue to be, as most 441 00:23:11,119 --> 00:23:13,000 Speaker 1: people say, the cleanest shirt in the dirty laundry or 442 00:23:13,040 --> 00:23:15,040 Speaker 1: whatever it is. But where it's treated best. I mean, 443 00:23:15,040 --> 00:23:18,359 Speaker 1: it's probably the safest and best return you when you 444 00:23:18,400 --> 00:23:20,880 Speaker 1: when you look at both of those, there might be 445 00:23:20,920 --> 00:23:24,000 Speaker 1: a time when it's not. I saw this chart the 446 00:23:24,040 --> 00:23:26,000 Speaker 1: other day, and I am going to tell everybody that 447 00:23:26,040 --> 00:23:27,680 Speaker 1: you haven't had a chance to look at this. So 448 00:23:27,680 --> 00:23:30,120 Speaker 1: I'm going to kind of spring this on you. If 449 00:23:30,160 --> 00:23:32,600 Speaker 1: I can pull this up real quick, and it's just 450 00:23:32,640 --> 00:23:34,960 Speaker 1: a chart, it's not there's not a hole there's not 451 00:23:35,000 --> 00:23:36,720 Speaker 1: a whole lot to this. It was just on Twitter, 452 00:23:37,800 --> 00:23:39,960 Speaker 1: and I don't know, I haven't really even dug into 453 00:23:39,960 --> 00:23:41,800 Speaker 1: this as much. But it says at the current rate 454 00:23:41,840 --> 00:23:45,160 Speaker 1: of borrowing of deficit spending, I think the last three 455 00:23:45,240 --> 00:23:48,000 Speaker 1: quarters we've seen about a trillion dollars added per quarter, 456 00:23:49,800 --> 00:23:52,000 Speaker 1: and so it's at this rate, we'll be adding a 457 00:23:52,040 --> 00:23:54,800 Speaker 1: trillion every seventy days, then every fifty days, every twenty days, 458 00:23:56,280 --> 00:23:58,639 Speaker 1: and this says by twenty twenty five it can be 459 00:23:58,720 --> 00:24:01,359 Speaker 1: up to a trillion dollars per week if we stay 460 00:24:01,400 --> 00:24:01,920 Speaker 1: on the trend. 461 00:24:02,200 --> 00:24:02,880 Speaker 2: If we stay on the. 462 00:24:02,800 --> 00:24:07,200 Speaker 3: Trend, yep, And it's it's it's a what what is it? 463 00:24:07,240 --> 00:24:09,200 Speaker 3: Is it debt or is it a monetary base? 464 00:24:09,280 --> 00:24:09,440 Speaker 1: What? 465 00:24:09,440 --> 00:24:09,840 Speaker 2: What is it? 466 00:24:10,440 --> 00:24:13,040 Speaker 1: This is debt the amount of debt being added. So 467 00:24:13,080 --> 00:24:16,560 Speaker 1: we added a trillion dollars in ninety days, and then 468 00:24:16,560 --> 00:24:18,280 Speaker 1: it says we'll go to a trillion every seventy every 469 00:24:18,280 --> 00:24:20,040 Speaker 1: fifty days, every twice. So it's the amount of debt 470 00:24:20,040 --> 00:24:22,679 Speaker 1: that we're adding. So that that would be if we 471 00:24:22,720 --> 00:24:25,119 Speaker 1: stay on trend, which you know we may or may not. 472 00:24:25,440 --> 00:24:26,119 Speaker 2: But you had. 473 00:24:26,000 --> 00:24:29,320 Speaker 1: Mentioned when you were saying, you said if the government 474 00:24:29,359 --> 00:24:31,879 Speaker 1: and the word if if the government continues to spend 475 00:24:31,960 --> 00:24:35,560 Speaker 1: like they're spending, what are the odds that they decide 476 00:24:35,560 --> 00:24:38,200 Speaker 1: to not spend like they're spending and go back to austerity. 477 00:24:38,320 --> 00:24:40,760 Speaker 1: I mean, that's a pretty low base case, wouldn't it be. 478 00:24:40,840 --> 00:24:44,840 Speaker 3: I think it's a pretty low base case. Again, not impossible, 479 00:24:45,240 --> 00:24:48,080 Speaker 3: not impossible, and it and what they could also do 480 00:24:48,119 --> 00:24:50,119 Speaker 3: is you got to remember they could they could do 481 00:24:50,240 --> 00:24:54,440 Speaker 3: something like not spend for six months or three months, right, 482 00:24:54,480 --> 00:24:59,520 Speaker 3: and then spend again. And so but in general, it's 483 00:24:59,720 --> 00:25:02,480 Speaker 3: very unlikely the government is going to stop spending money. 484 00:25:02,480 --> 00:25:06,479 Speaker 3: I mean, those odds are very low. But there's something 485 00:25:06,520 --> 00:25:11,080 Speaker 3: to there's something that people need to remember. And this 486 00:25:11,200 --> 00:25:13,960 Speaker 3: sort of gets into the whole MMT thing. And I 487 00:25:13,960 --> 00:25:15,800 Speaker 3: don't want to lose people on MMT and I don't 488 00:25:15,800 --> 00:25:17,879 Speaker 3: want to go too far down the rabbit hole on MMT. 489 00:25:18,400 --> 00:25:22,040 Speaker 3: But I think a lot of times when people hear 490 00:25:22,119 --> 00:25:24,720 Speaker 3: the this gets I know, I'm jumping around. But yet 491 00:25:24,720 --> 00:25:28,560 Speaker 3: at the beginning you said one of the Twain quote 492 00:25:28,560 --> 00:25:30,359 Speaker 3: that it's not what you don't know that gets you 493 00:25:30,400 --> 00:25:32,680 Speaker 3: in trouble, it's what you're certain about that just ain't 494 00:25:32,760 --> 00:25:35,800 Speaker 3: so right. And there's a lot of people who are 495 00:25:35,880 --> 00:25:41,400 Speaker 3: certain that MMT policies will lead to ruin. And it's 496 00:25:41,440 --> 00:25:44,240 Speaker 3: not that that's incorrect. If taken to the extreme, I 497 00:25:44,240 --> 00:25:46,720 Speaker 3: would tend to agree with those, but it doesn't mean 498 00:25:47,240 --> 00:25:49,560 Speaker 3: it will lead to ruin right away. It's like a 499 00:25:51,040 --> 00:25:54,320 Speaker 3: little bit of sh exactly. And so you know, if 500 00:25:54,400 --> 00:25:57,440 Speaker 3: you if you inject yourself with heroin in the heart, 501 00:25:57,440 --> 00:25:59,280 Speaker 3: you're probably too many times you're probably gonna die. But 502 00:25:59,280 --> 00:26:00,680 Speaker 3: if you do it once, your probably going to be 503 00:26:00,720 --> 00:26:04,159 Speaker 3: pretty excited, and you know, you have a lot of energy. 504 00:26:04,160 --> 00:26:07,760 Speaker 3: And so you know, I think that you know, the 505 00:26:07,800 --> 00:26:14,399 Speaker 3: government spending money doesn't necessarily mean that the US fails 506 00:26:14,640 --> 00:26:19,320 Speaker 3: or loses global reserve currency status overnight. And I know 507 00:26:19,400 --> 00:26:22,720 Speaker 3: people have been predicting this for fifty years now, and 508 00:26:23,280 --> 00:26:25,320 Speaker 3: they're saying, well, we're not predicting it's overnight. We've been 509 00:26:25,359 --> 00:26:28,040 Speaker 3: predicting it for fifty years, and so now's the time. Well, 510 00:26:28,400 --> 00:26:31,440 Speaker 3: people have been saying now's the time for as long 511 00:26:31,480 --> 00:26:34,280 Speaker 3: as I've been in this business. And I'm not saying 512 00:26:34,359 --> 00:26:36,800 Speaker 3: not to be prepared for now's the time, but just 513 00:26:37,160 --> 00:26:40,440 Speaker 3: I would highly recommend people don't bet their entire portfolio 514 00:26:41,160 --> 00:26:45,560 Speaker 3: on now being the time, and The other thing is that, again, 515 00:26:45,760 --> 00:26:49,520 Speaker 3: because there's so much demand for US dollars and because 516 00:26:49,560 --> 00:26:52,840 Speaker 3: there's so much demand for US dollar debt, the US 517 00:26:52,920 --> 00:26:55,040 Speaker 3: government can kind of get away with this for a 518 00:26:55,080 --> 00:26:58,960 Speaker 3: lot longer than others. The other things that the US 519 00:26:59,040 --> 00:27:02,880 Speaker 3: could very easily do, they could do things like mandating 520 00:27:03,200 --> 00:27:07,119 Speaker 3: banks by treasuries. They could mandate endowments hold ten percent 521 00:27:07,119 --> 00:27:10,040 Speaker 3: of their portfolio and treasuries. They could mandate that all 522 00:27:10,119 --> 00:27:13,159 Speaker 3: public pension funds hold ten percent of their you know, 523 00:27:13,840 --> 00:27:16,720 Speaker 3: of their balance and US treasuries. And they would say 524 00:27:16,720 --> 00:27:18,800 Speaker 3: it's for your own good, it's to make sure that 525 00:27:18,880 --> 00:27:21,960 Speaker 3: you don't lose your client's money, right, And it could 526 00:27:21,960 --> 00:27:24,200 Speaker 3: be bullshit, but it's not going to stop them from 527 00:27:24,200 --> 00:27:27,160 Speaker 3: doing it, right. And so there's my point is there's 528 00:27:27,160 --> 00:27:30,720 Speaker 3: still a number of things that could be done to 529 00:27:30,920 --> 00:27:33,800 Speaker 3: fund the US treasury if the market didn't want to 530 00:27:33,840 --> 00:27:34,520 Speaker 3: do it on its own. 531 00:27:34,640 --> 00:27:37,320 Speaker 1: Yeah, they could say all stable coin treasuries have to 532 00:27:37,359 --> 00:27:38,760 Speaker 1: be put into treasuries. 533 00:27:38,760 --> 00:27:39,800 Speaker 2: Oh they did that too. 534 00:27:40,880 --> 00:27:43,120 Speaker 1: No, But I love I love that point that you made, 535 00:27:43,160 --> 00:27:44,840 Speaker 1: And this is sort of the point that I always 536 00:27:44,840 --> 00:27:47,000 Speaker 1: try to hit on. You know, the guy's like Harry Dent, 537 00:27:47,040 --> 00:27:49,200 Speaker 1: who's been calling the crash for twelve years and eventually 538 00:27:49,240 --> 00:27:50,919 Speaker 1: we'll get that or Robini or whatever. 539 00:27:52,400 --> 00:27:52,800 Speaker 2: I feel. 540 00:27:52,840 --> 00:27:54,719 Speaker 1: I've read five of Harry Dent's books. I think his 541 00:27:54,840 --> 00:27:58,280 Speaker 1: research is great. The assumptions that he draws from the 542 00:27:58,320 --> 00:28:00,680 Speaker 1: research has been wrong, partly because I think they failed 543 00:28:00,720 --> 00:28:02,520 Speaker 1: to con they failed to think about how many more 544 00:28:02,560 --> 00:28:04,879 Speaker 1: magic tricks the FED may have up their sleeve. And 545 00:28:04,920 --> 00:28:07,399 Speaker 1: to your point, like they could just mandate that whoever 546 00:28:07,440 --> 00:28:10,639 Speaker 1: buy strategies, right, they could mandate everything whatever, and so like, 547 00:28:10,880 --> 00:28:12,960 Speaker 1: there's so many more things that can be done, and 548 00:28:13,000 --> 00:28:15,320 Speaker 1: it seems like they'll continue to do those things rather 549 00:28:15,359 --> 00:28:18,720 Speaker 1: than let themselves collapse, and so like then you kind 550 00:28:18,720 --> 00:28:20,119 Speaker 1: of have to start thinking out of the box, like, 551 00:28:20,160 --> 00:28:22,280 Speaker 1: oh my gosh, the commercial real estate mortgage market could 552 00:28:22,280 --> 00:28:23,879 Speaker 1: collapse and sink sink the market. 553 00:28:24,119 --> 00:28:25,800 Speaker 2: Yeah, or the FED could just put it on its books. 554 00:28:26,840 --> 00:28:30,040 Speaker 3: Sure right, No, exactly and so and this is kind 555 00:28:30,080 --> 00:28:34,000 Speaker 3: of the key The key thing is, I think any 556 00:28:34,040 --> 00:28:37,520 Speaker 3: and the reason I say this is because I am 557 00:28:37,560 --> 00:28:40,280 Speaker 3: guilty of this myself, or I was guilty of this 558 00:28:40,800 --> 00:28:43,480 Speaker 3: myself several years ago. I was very guilty of this, 559 00:28:44,040 --> 00:28:46,120 Speaker 3: and it took me along to figure out long time 560 00:28:46,160 --> 00:28:48,440 Speaker 3: to figure out what I was doing wrong, and once 561 00:28:48,480 --> 00:28:51,760 Speaker 3: I figured it out, I have it has it has 562 00:28:51,800 --> 00:28:55,320 Speaker 3: allowed me to see the world much clearer. And that is, 563 00:28:57,240 --> 00:29:00,960 Speaker 3: if you analyze the United States in a vacuum, the 564 00:29:01,000 --> 00:29:05,200 Speaker 3: only possible conclusion that you can come to is that 565 00:29:05,240 --> 00:29:08,200 Speaker 3: it is a disaster waiting to happen, and it's going 566 00:29:08,240 --> 00:29:12,960 Speaker 3: to end really, really badly, because the fundamentals are just really, 567 00:29:13,000 --> 00:29:17,200 Speaker 3: really bad. The problem is is that it's not a 568 00:29:17,560 --> 00:29:22,120 Speaker 3: very useful exercise to analyze the United States in a 569 00:29:22,200 --> 00:29:24,680 Speaker 3: vacuum because the world is not a vacuum. It's a 570 00:29:24,840 --> 00:29:28,600 Speaker 3: very big world, and it's very interconnected, and when everything 571 00:29:28,600 --> 00:29:31,880 Speaker 3: trades relative to everything else, and to your point earlier, 572 00:29:31,960 --> 00:29:35,280 Speaker 3: money goes where it's treated best. In order to get 573 00:29:35,320 --> 00:29:38,440 Speaker 3: a good understanding of what's going to happen in the 574 00:29:38,560 --> 00:29:41,120 Speaker 3: US market, you still need to understand what's going to 575 00:29:41,120 --> 00:29:43,080 Speaker 3: happen in the European market, what's going to happen in 576 00:29:43,120 --> 00:29:45,120 Speaker 3: the Chinese market, what's going to happen in Japan and 577 00:29:45,160 --> 00:29:49,200 Speaker 3: South Africa and India and Brazil. It's important to understand 578 00:29:49,680 --> 00:29:52,640 Speaker 3: the relative nature of all this stuff. And once you 579 00:29:52,840 --> 00:29:56,480 Speaker 3: kind of do the same level of analysis on France 580 00:29:57,080 --> 00:30:01,560 Speaker 3: or India, or Japan or China. You have already done 581 00:30:01,560 --> 00:30:04,080 Speaker 3: on the United States. You realize that those countries aren't 582 00:30:04,080 --> 00:30:06,640 Speaker 3: in very good shape either, and it's very hard to 583 00:30:06,640 --> 00:30:10,840 Speaker 3: come up with a situation where those countries thrive. And 584 00:30:10,960 --> 00:30:15,200 Speaker 3: so that, in my opinion, is one thing that it's 585 00:30:15,280 --> 00:30:18,600 Speaker 3: it's not it's it's not that it's a useless exercise 586 00:30:18,640 --> 00:30:21,760 Speaker 3: to analyze the United States. It's just not very useful 587 00:30:21,800 --> 00:30:24,440 Speaker 3: to analyze it all by itself and think that you're 588 00:30:24,440 --> 00:30:27,680 Speaker 3: coming to the to the correct conclusion of what's going 589 00:30:27,720 --> 00:30:30,480 Speaker 3: to happen. And like I said, I coming out of 590 00:30:30,520 --> 00:30:33,000 Speaker 3: the global financial crisis, that's what I did. I did 591 00:30:33,080 --> 00:30:36,560 Speaker 3: that for about four or five years and just kept 592 00:30:36,600 --> 00:30:39,160 Speaker 3: banging my head against the table trying to fagil what 593 00:30:39,160 --> 00:30:40,920 Speaker 3: what am I getting wrong? And once I kind of 594 00:30:40,960 --> 00:30:45,360 Speaker 3: stepped back and looked at the whole picture, it becomes 595 00:30:45,480 --> 00:30:46,200 Speaker 3: much more clear. 596 00:30:46,840 --> 00:30:49,560 Speaker 1: All right, Let's let's try to dig into a couple 597 00:30:49,520 --> 00:30:52,480 Speaker 1: of things that might challenge some people's preconceived notions here. 598 00:30:52,520 --> 00:30:55,880 Speaker 1: So to your point, the clean of shirt and laundry, 599 00:30:55,960 --> 00:30:58,760 Speaker 1: it's still still treated best here. Lots of tricks up 600 00:30:58,800 --> 00:31:00,880 Speaker 1: their sleeve to get people to continue the treasuries. 601 00:31:01,080 --> 00:31:01,840 Speaker 2: I would agree with that. 602 00:31:02,080 --> 00:31:05,920 Speaker 1: You mentioned time frames a couple of times, and let's 603 00:31:05,960 --> 00:31:08,360 Speaker 1: let's try to frame that up. Let's just say within 604 00:31:08,400 --> 00:31:12,040 Speaker 1: the next couple of years, let's even even this decade, 605 00:31:12,040 --> 00:31:14,080 Speaker 1: and it's really more of a trend. So a couple 606 00:31:14,120 --> 00:31:15,720 Speaker 1: things that I would throw out there, and let's see 607 00:31:15,760 --> 00:31:19,000 Speaker 1: what you think about this. So, first of all, I 608 00:31:19,000 --> 00:31:21,160 Speaker 1: don't think there's a lot of people that would argue 609 00:31:21,160 --> 00:31:25,240 Speaker 1: with you that any government or currency or bond market 610 00:31:25,400 --> 00:31:27,240 Speaker 1: is better than the dollar. I don't think anyone would 611 00:31:27,280 --> 00:31:31,160 Speaker 1: ever make that, not anyone somewhat educated anyway. But like 612 00:31:31,200 --> 00:31:32,800 Speaker 1: with the rise of the bricks, like they're not creating 613 00:31:32,800 --> 00:31:36,320 Speaker 1: a new currency or just forget bricks, just any nation. 614 00:31:36,680 --> 00:31:38,080 Speaker 1: They're not come with their own currency. They're not going 615 00:31:38,120 --> 00:31:39,800 Speaker 1: to challenge the US dollar, they're not going to challenge 616 00:31:39,840 --> 00:31:40,440 Speaker 1: the treasury. 617 00:31:40,880 --> 00:31:41,800 Speaker 2: But they could just. 618 00:31:42,160 --> 00:31:44,640 Speaker 1: Keep their money in the ground in oil or gold 619 00:31:44,720 --> 00:31:49,040 Speaker 1: or lithium or whatever X y Z. There's no deep 620 00:31:49,080 --> 00:31:50,960 Speaker 1: liquid bond market like US treasuries, but they could just 621 00:31:50,960 --> 00:31:55,720 Speaker 1: buy gold or whatever. So something like that seems like 622 00:31:55,800 --> 00:31:59,120 Speaker 1: it could sort of be a pretty big disruptor. I 623 00:31:59,120 --> 00:32:01,440 Speaker 1: think I saw twenty percent of oil is now being 624 00:32:01,440 --> 00:32:04,000 Speaker 1: traded outside of the dollar. That's trading, and I know 625 00:32:04,040 --> 00:32:07,960 Speaker 1: you probably have that's currency. But couldn't nations just hold 626 00:32:08,000 --> 00:32:10,760 Speaker 1: their wealth in commodities as opposed to bonds. 627 00:32:12,840 --> 00:32:16,640 Speaker 3: Sure, they could absolutely do that, And this kind of 628 00:32:16,680 --> 00:32:19,760 Speaker 3: goes to what I was talking about earlier. If they 629 00:32:19,880 --> 00:32:23,720 Speaker 3: do that, if they decide to hold their reserves or 630 00:32:24,680 --> 00:32:28,960 Speaker 3: you know, their profits in commodities or natural resources or 631 00:32:29,120 --> 00:32:33,360 Speaker 3: even stocks or whatever it is, rather than bonds, then 632 00:32:33,480 --> 00:32:37,280 Speaker 3: that would see I would believe that would see yields 633 00:32:37,480 --> 00:32:41,040 Speaker 3: on sovereign bonds rise. But I don't think it would 634 00:32:41,040 --> 00:32:44,720 Speaker 3: be a case where only US yields would rise. So again, 635 00:32:45,080 --> 00:32:47,000 Speaker 3: I think yields would rise in Europe. I think they 636 00:32:47,040 --> 00:32:50,360 Speaker 3: would rise in Japan, they would rise in China. So 637 00:32:51,000 --> 00:32:57,000 Speaker 3: in other words, if governments around the world stop and 638 00:32:57,080 --> 00:33:01,800 Speaker 3: institutions around the world stop buying you treasuries because they 639 00:33:01,800 --> 00:33:04,600 Speaker 3: don't want it to get confiscated or they know they're 640 00:33:04,600 --> 00:33:07,920 Speaker 3: worried about the value of the dollar or whatever it is, 641 00:33:09,240 --> 00:33:12,920 Speaker 3: and they decide to hold commodities, they are also, in 642 00:33:13,000 --> 00:33:17,400 Speaker 3: my opinion, going to be shunning all European sovereign bonds 643 00:33:17,560 --> 00:33:21,280 Speaker 3: and Russian sovereign bonds and Chinese sovereign bonds, and that 644 00:33:21,480 --> 00:33:24,000 Speaker 3: is kind of the milkshake theory, where we get into 645 00:33:24,040 --> 00:33:28,800 Speaker 3: this situation where governments around the world are no longer 646 00:33:28,840 --> 00:33:31,840 Speaker 3: being funded as easily as they used to be. They're 647 00:33:31,880 --> 00:33:36,200 Speaker 3: borrowing costco up. It causes them to have enormous fiscal 648 00:33:36,240 --> 00:33:39,840 Speaker 3: problems internally, they have to print more of their own 649 00:33:39,840 --> 00:33:42,960 Speaker 3: currency in order to solve these problems, and it kind 650 00:33:42,960 --> 00:33:46,160 Speaker 3: of starts this vicious loop. So that's a very long 651 00:33:46,200 --> 00:33:48,400 Speaker 3: way of saying, yes, I think that that is a 652 00:33:48,560 --> 00:33:52,480 Speaker 3: very what you suggested. I think is a very real scenario. 653 00:33:53,080 --> 00:33:55,640 Speaker 3: And not only do I think it's possible, but I 654 00:33:55,680 --> 00:33:58,040 Speaker 3: think it's probable that that will play out. Now, whether 655 00:33:58,040 --> 00:33:59,560 Speaker 3: that plays out in the next six months or next 656 00:33:59,560 --> 00:34:01,840 Speaker 3: six years, I'm not smart enough to know that, but 657 00:34:01,920 --> 00:34:03,400 Speaker 3: I think that is how it plays out. 658 00:34:03,440 --> 00:34:05,360 Speaker 1: Yeah, And so to the point to kind of recap 659 00:34:05,400 --> 00:34:09,000 Speaker 1: what you were saying, that will probably happen. But people 660 00:34:09,080 --> 00:34:13,080 Speaker 1: love already stopped buying everybody else's bonds. The US Treasury 661 00:34:13,080 --> 00:34:15,359 Speaker 1: will be the last one that they stopped buying before 662 00:34:15,360 --> 00:34:17,160 Speaker 1: they decide to put the rest of their money in commodities. 663 00:34:17,200 --> 00:34:18,880 Speaker 1: And you know, I think all these things are not 664 00:34:19,120 --> 00:34:20,080 Speaker 1: and a go ahead. 665 00:34:20,760 --> 00:34:22,520 Speaker 3: Yeah, let me just make a point, because I think 666 00:34:22,520 --> 00:34:25,160 Speaker 3: this is the short answer is yes. But what I 667 00:34:25,200 --> 00:34:30,000 Speaker 3: think sometimes people, especially retail, because I don't think that 668 00:34:30,040 --> 00:34:33,239 Speaker 3: they realize because as a retail investor, or, as an 669 00:34:33,239 --> 00:34:37,120 Speaker 3: individual investor, or as a family, you have the choice 670 00:34:37,160 --> 00:34:39,560 Speaker 3: of just sitting on the sidelines, putting your cash into 671 00:34:39,600 --> 00:34:41,880 Speaker 3: the mattress, buying a bunch of gold, and just waiting 672 00:34:41,960 --> 00:34:47,360 Speaker 3: this out right. Big global institutions that operate on the 673 00:34:47,400 --> 00:34:50,479 Speaker 3: global stage, whether it's a corporation, whether it's a hedge fund, 674 00:34:50,480 --> 00:34:54,279 Speaker 3: whether it's an endowment, whether it's a government agency, they 675 00:34:54,360 --> 00:34:58,080 Speaker 3: don't have that option. Right. If you are operating on 676 00:34:58,160 --> 00:35:00,880 Speaker 3: the global stage, if you are trading with one country 677 00:35:00,960 --> 00:35:05,839 Speaker 3: versus another, and you're importing energy and food and you're 678 00:35:05,960 --> 00:35:12,240 Speaker 3: exporting you know, goods, all of this takes place in dollars. 679 00:35:12,719 --> 00:35:16,320 Speaker 3: And now to your point earlier, there are some little 680 00:35:16,320 --> 00:35:18,480 Speaker 3: things on the edges that are trying to disrupt this, 681 00:35:19,120 --> 00:35:22,080 Speaker 3: and you know, and I think those will be continued 682 00:35:22,120 --> 00:35:24,040 Speaker 3: to be tried and perhaps even grow a little bit. 683 00:35:24,520 --> 00:35:28,040 Speaker 3: But by and large, if you want to operate on 684 00:35:28,080 --> 00:35:33,160 Speaker 3: the global stage, you still need dollars. And so while 685 00:35:34,440 --> 00:35:41,440 Speaker 3: you know, these countries may to your point buy gold 686 00:35:41,520 --> 00:35:44,160 Speaker 3: or store their excess in gold or oil or whatever, 687 00:35:44,200 --> 00:35:47,719 Speaker 3: it is, the last currency that they're going to give 688 00:35:47,840 --> 00:35:52,360 Speaker 3: up and totally reject is the US dollar. In other words, 689 00:35:52,960 --> 00:35:58,120 Speaker 3: no country is going to continue using you know, I 690 00:35:58,120 --> 00:36:02,040 Speaker 3: don't know, South African rand and no longer use the dollar, right, right, 691 00:36:02,360 --> 00:36:06,480 Speaker 3: Like Turkey or sorry, Brazil and Japan are not going 692 00:36:06,520 --> 00:36:09,520 Speaker 3: to start using South African rand and not use the dollar, right. 693 00:36:09,800 --> 00:36:12,040 Speaker 3: I mean, that's just that's just not going to happen, 694 00:36:13,280 --> 00:36:16,239 Speaker 3: or at least not without enormous chaos between now and then. 695 00:36:16,320 --> 00:36:19,920 Speaker 1: Yeah, so I would agree with that, I mean, why 696 00:36:19,960 --> 00:36:22,320 Speaker 1: would they. I do think about it in a sense 697 00:36:22,360 --> 00:36:25,160 Speaker 1: of like we've used the Chuck E. Cheese analogy before, 698 00:36:25,160 --> 00:36:27,160 Speaker 1: but we were talking before that. I'm building the house 699 00:36:27,160 --> 00:36:29,200 Speaker 1: in Mexico, so I'm going back and forth beween Mexico 700 00:36:29,239 --> 00:36:31,560 Speaker 1: quite a bit now, and I've been keeping some pesos. 701 00:36:31,600 --> 00:36:32,719 Speaker 1: I mean, I got to use them when I go 702 00:36:32,760 --> 00:36:33,120 Speaker 1: down there. 703 00:36:33,520 --> 00:36:35,879 Speaker 2: I'm done great, I'm certainly, yeah, it has done great. 704 00:36:35,960 --> 00:36:38,959 Speaker 1: Unfortunately, I'm I like it when the dollars are but uh, 705 00:36:39,000 --> 00:36:41,759 Speaker 1: you know, I'm not really storing my wealth in pesos. 706 00:36:41,880 --> 00:36:44,400 Speaker 1: I keep some, you know, because this is easy convenient 707 00:36:44,400 --> 00:36:45,919 Speaker 1: for me, but I'm not really storing my wealth there. 708 00:36:46,200 --> 00:36:48,120 Speaker 1: But when you when you look at this on the 709 00:36:48,160 --> 00:36:51,520 Speaker 1: world stage, let's get into kind of kind of transition 710 00:36:51,600 --> 00:36:53,399 Speaker 1: this into sort of where we're going for the rest 711 00:36:53,400 --> 00:36:55,640 Speaker 1: of this year and maybe in the next year. We 712 00:36:55,719 --> 00:36:57,520 Speaker 1: do have a global stage, and we do have all 713 00:36:57,560 --> 00:37:01,120 Speaker 1: these nations with their own debt and currency issues, and 714 00:37:01,200 --> 00:37:04,160 Speaker 1: the dollar can only get so strong or so weak. 715 00:37:04,160 --> 00:37:05,880 Speaker 1: It sort of has to stay in this range otherwise 716 00:37:05,880 --> 00:37:10,640 Speaker 1: it causes lots of big problems we've seen that we've seen, 717 00:37:11,320 --> 00:37:13,759 Speaker 1: I don't know, potentially talks of like a Plaza cord 718 00:37:13,800 --> 00:37:16,120 Speaker 1: two point zero or something like that, where they devalue 719 00:37:16,120 --> 00:37:17,759 Speaker 1: the dollar to kind of help some of these nations out. 720 00:37:19,440 --> 00:37:21,880 Speaker 1: And if the dollar gets too strong to kind of 721 00:37:21,880 --> 00:37:23,920 Speaker 1: the dollar milkshake theory, they'd have to do something to 722 00:37:23,960 --> 00:37:27,640 Speaker 1: try to maybe devalue to at least slow that down. 723 00:37:28,200 --> 00:37:30,960 Speaker 1: Do you think we see something like that happening this year. 724 00:37:31,080 --> 00:37:34,439 Speaker 1: Does that start to affect, you know, what the Fed 725 00:37:34,480 --> 00:37:36,520 Speaker 1: and the Treasury is able to do and really having 726 00:37:36,560 --> 00:37:38,480 Speaker 1: to try to keep that dollar too low or do 727 00:37:38,480 --> 00:37:40,759 Speaker 1: you think this is out like a decade from now. 728 00:37:42,880 --> 00:37:46,680 Speaker 3: So I think the whole plaza accord, like a serious 729 00:37:46,840 --> 00:37:48,920 Speaker 3: devalue of the dollar, or the whole kind of a 730 00:37:49,000 --> 00:37:52,080 Speaker 3: global agreement where the dollar gets devalued. I think that 731 00:37:52,239 --> 00:37:55,080 Speaker 3: is five to ten years out still, you know, into 732 00:37:55,120 --> 00:38:01,640 Speaker 3: the decade type stuff. But what I think people two things. 733 00:38:02,040 --> 00:38:06,760 Speaker 3: You know, part of the reason that the FED would 734 00:38:06,760 --> 00:38:10,919 Speaker 3: go back to QE or go to easy money would 735 00:38:10,960 --> 00:38:15,799 Speaker 3: be because dollars are scarce, right. In other words, I 736 00:38:15,800 --> 00:38:17,759 Speaker 3: think people get this confused a lot of time. They 737 00:38:17,760 --> 00:38:19,919 Speaker 3: get the cause and effect messed up. They will say, 738 00:38:19,960 --> 00:38:21,799 Speaker 3: the Fed is going to do QE, so the dollar 739 00:38:21,880 --> 00:38:24,400 Speaker 3: is going to fall. Well, actually, the reason that the 740 00:38:24,440 --> 00:38:27,760 Speaker 3: Fed would have to do qe's because the dollar started 741 00:38:27,800 --> 00:38:29,880 Speaker 3: to get strong and they need to weaken it in 742 00:38:29,960 --> 00:38:33,200 Speaker 3: order to provide global liquidity. So the dollar is kind 743 00:38:33,239 --> 00:38:36,840 Speaker 3: of the driver. It's the cause. The effect is QE. Now, 744 00:38:37,400 --> 00:38:40,200 Speaker 3: if we get into a scenario this year where you know, 745 00:38:40,239 --> 00:38:42,320 Speaker 3: we get this hard landing that so many people have 746 00:38:42,400 --> 00:38:46,040 Speaker 3: predicted in a hard landing, the dollar starts to rise. 747 00:38:46,200 --> 00:38:48,000 Speaker 3: That is the definition of a hard land You're not 748 00:38:48,040 --> 00:38:49,959 Speaker 3: going to have a hard landing where the dollar goes 749 00:38:50,000 --> 00:38:53,040 Speaker 3: from one O two to ninety. That would be a 750 00:38:53,280 --> 00:38:57,040 Speaker 3: that would be an immense easing and prove and an 751 00:38:57,200 --> 00:39:00,520 Speaker 3: enormous liquidity boost to the world if if the dollar 752 00:39:00,520 --> 00:39:03,600 Speaker 3: feil that much. But what could happen. What could happen 753 00:39:03,680 --> 00:39:07,160 Speaker 3: is the dollar could start to strengthen fairly quickly and 754 00:39:07,200 --> 00:39:10,560 Speaker 3: as a result force the Fed to pivot fully start 755 00:39:10,560 --> 00:39:13,799 Speaker 3: cutting rates, maybe even go back to QE, in which 756 00:39:13,840 --> 00:39:17,480 Speaker 3: case we could have the dollar fall let's call it 757 00:39:17,480 --> 00:39:19,840 Speaker 3: from one O two to ninety, kind of very similar 758 00:39:19,840 --> 00:39:23,120 Speaker 3: to what happened after COVID. What's kind of interesting now 759 00:39:23,200 --> 00:39:24,840 Speaker 3: is that the dollar is still higher than it was 760 00:39:24,880 --> 00:39:28,200 Speaker 3: at the high of COVID. Right, despite everything that they 761 00:39:28,200 --> 00:39:30,640 Speaker 3: did after COVID, the dollar is still higher now than 762 00:39:30,680 --> 00:39:34,160 Speaker 3: it was at the peak of COVID. But what could happen? 763 00:39:34,440 --> 00:39:37,360 Speaker 3: What could happen? I think many people will say, no, 764 00:39:37,480 --> 00:39:39,640 Speaker 3: this can't happen. What could happen is we could just 765 00:39:39,760 --> 00:39:41,799 Speaker 3: kick this can down the road for another five or 766 00:39:41,800 --> 00:39:45,840 Speaker 3: ten years, where maybe we get into another global easing cycle. Maybe, 767 00:39:45,920 --> 00:39:47,680 Speaker 3: you know, the last couple of years, central banks around 768 00:39:47,719 --> 00:39:50,800 Speaker 3: the world were raising rates and you know, restricting liquidity. 769 00:39:51,280 --> 00:39:53,560 Speaker 3: Maybe now the FED leads the way. If we get 770 00:39:53,560 --> 00:39:57,520 Speaker 3: into another loosening cycle, and you know, countries around the 771 00:39:57,560 --> 00:39:59,919 Speaker 3: world cut interest rates, they go back to QE as well, 772 00:40:00,080 --> 00:40:03,120 Speaker 3: and maybe markets trend higher for in the next two 773 00:40:03,200 --> 00:40:05,520 Speaker 3: or three years and we don't get the crisis that 774 00:40:05,600 --> 00:40:09,480 Speaker 3: everybody is expecting. You know, the dollar goes back to 775 00:40:09,560 --> 00:40:11,920 Speaker 3: ninety or eighty eight or whatever it is, and you 776 00:40:11,960 --> 00:40:14,719 Speaker 3: know gold goes to twenty five hundred, and bitcoin goes 777 00:40:14,760 --> 00:40:18,359 Speaker 3: to sixty thousand, and you know, stock market goes to 778 00:40:18,600 --> 00:40:20,799 Speaker 3: the Dow goes to fifty thousand or whatever it is. 779 00:40:20,920 --> 00:40:24,000 Speaker 3: I can't rule that out. That is kind of the 780 00:40:24,040 --> 00:40:29,200 Speaker 3: way things typically go. But what I think people need 781 00:40:29,239 --> 00:40:35,200 Speaker 3: to understand, though, is that in that scenario, that is 782 00:40:35,320 --> 00:40:38,600 Speaker 3: not the system failing. That's not the dollar failing in 783 00:40:38,640 --> 00:40:42,839 Speaker 3: the system failing. That's actually the system perpetuating. And I'll 784 00:40:42,840 --> 00:40:45,400 Speaker 3: give you a good example. A lot of people will 785 00:40:45,640 --> 00:40:47,520 Speaker 3: show these like I saw a headline the other day 786 00:40:47,520 --> 00:40:50,799 Speaker 3: that said, you know, these two kind I don't remember 787 00:40:50,800 --> 00:40:53,680 Speaker 3: the name of the countries, but you know countries are 788 00:40:53,719 --> 00:40:58,920 Speaker 3: now doing three to five billion dollars, you know, or 789 00:40:59,280 --> 00:41:02,640 Speaker 3: three to five billion in local currency transactions to avoid 790 00:41:02,640 --> 00:41:07,239 Speaker 3: the dollar another evidence of de dollarsation. But year to date, 791 00:41:07,360 --> 00:41:13,400 Speaker 3: already emerging market countries have issued like fifty billion dollars 792 00:41:13,440 --> 00:41:16,640 Speaker 3: of new to US dollar debt, and so as the 793 00:41:16,680 --> 00:41:23,640 Speaker 3: dollar gets weaker, that's what happens more the system countries, 794 00:41:23,800 --> 00:41:28,400 Speaker 3: institutions they issue more debt because now the dollar's weaker, right, 795 00:41:28,760 --> 00:41:32,759 Speaker 3: And so the dollar getting weaker provides that liquidity. But 796 00:41:32,920 --> 00:41:36,200 Speaker 3: the form of the liquidity comes in it because people 797 00:41:36,200 --> 00:41:40,480 Speaker 3: are borrowing. Institutions are borrowing. Now, if everybody stopped borrowing 798 00:41:40,640 --> 00:41:44,880 Speaker 3: US dollars and started borrowing just in their local currency, 799 00:41:45,000 --> 00:41:47,000 Speaker 3: or they borrowed in gold, or they borrowed in bitcoin 800 00:41:47,120 --> 00:41:50,480 Speaker 3: or whatever it was, and they no longer borrowed in dollars, 801 00:41:51,120 --> 00:41:54,719 Speaker 3: then there wouldn't be any dollar liquidity, right, and there 802 00:41:54,760 --> 00:41:58,320 Speaker 3: wouldn't be new dollars created, and then all the dollar 803 00:41:58,360 --> 00:42:04,279 Speaker 3: debt that already exists would have would struggle to have 804 00:42:04,360 --> 00:42:07,640 Speaker 3: the interest or would it would it would the global 805 00:42:07,640 --> 00:42:12,600 Speaker 3: would struggle to service their US dollar debt and and 806 00:42:12,800 --> 00:42:14,759 Speaker 3: pay off their US dollar debt if there was no 807 00:42:14,960 --> 00:42:18,200 Speaker 3: US dollar liquidity. So you really get into this. It's 808 00:42:18,280 --> 00:42:22,680 Speaker 3: kind of a very meta thing, right, It's it's self referential. 809 00:42:23,320 --> 00:42:26,640 Speaker 3: And so that's why I often will tell in my opinion, 810 00:42:26,800 --> 00:42:29,759 Speaker 3: the dollar going higher, that signals that the system is 811 00:42:29,760 --> 00:42:34,280 Speaker 3: in trouble. Yeah, that's what breaks the system. But my fear, 812 00:42:34,520 --> 00:42:36,880 Speaker 3: not my fear, but my expectation would be that if 813 00:42:36,920 --> 00:42:40,080 Speaker 3: the dollar falls, it really just kicks this can down 814 00:42:40,080 --> 00:42:41,440 Speaker 3: the road another five or ten years. 815 00:42:42,440 --> 00:42:43,720 Speaker 2: Yeah. 816 00:42:43,840 --> 00:42:46,960 Speaker 1: Side note, somebody in one of my high ticket coaching 817 00:42:47,000 --> 00:42:51,600 Speaker 1: programs is a pretty high end consultant and one of 818 00:42:51,600 --> 00:42:55,239 Speaker 1: his clients is the US Treasury, And it was about 819 00:42:55,239 --> 00:42:56,799 Speaker 1: a year ago. Now he couldn't come to one of 820 00:42:56,800 --> 00:42:58,600 Speaker 1: the meetings because he had to go meet with the 821 00:42:58,640 --> 00:43:02,000 Speaker 1: Treasury and they were in the process of building I 822 00:43:02,040 --> 00:43:03,919 Speaker 1: want to say, this could be a little bit wrong, 823 00:43:03,920 --> 00:43:08,120 Speaker 1: but I want to say three or four new printing 824 00:43:08,160 --> 00:43:11,000 Speaker 1: facilities money printing facilities in the US, and they're building 825 00:43:11,040 --> 00:43:13,360 Speaker 1: them right next to airports so that they could just 826 00:43:13,440 --> 00:43:15,719 Speaker 1: print the dollar bills, put them onto planes, and ship 827 00:43:15,760 --> 00:43:17,839 Speaker 1: them right out of the country. And he asked them, 828 00:43:17,880 --> 00:43:20,120 Speaker 1: He's like, whoa, you know, he's into bitcoin and you 829 00:43:20,160 --> 00:43:21,839 Speaker 1: know the whole CBD thing and all that, and he said, 830 00:43:21,880 --> 00:43:23,239 Speaker 1: I thought cash was on its way out, And the 831 00:43:23,280 --> 00:43:25,760 Speaker 1: Treasury guy told him, oh no, oh no, the dollars 832 00:43:25,760 --> 00:43:28,480 Speaker 1: have never been in more demand. We cannot create these 833 00:43:28,480 --> 00:43:30,520 Speaker 1: things fast enough. So that was a year ago they 834 00:43:30,520 --> 00:43:34,880 Speaker 1: were just producing these things. So definitely there is something 835 00:43:34,880 --> 00:43:37,160 Speaker 1: to that about this international demand or just global demand 836 00:43:37,160 --> 00:43:38,080 Speaker 1: for dollars overall. 837 00:43:40,120 --> 00:43:43,440 Speaker 2: All right, so where are we? Where do we go 838 00:43:43,640 --> 00:43:44,240 Speaker 2: this year? 839 00:43:44,360 --> 00:43:47,040 Speaker 1: It seems like as the dollar rises and falls, it 840 00:43:47,160 --> 00:43:50,040 Speaker 1: really is starting to sort of offset some of these 841 00:43:50,080 --> 00:43:54,120 Speaker 1: asset prices and drive that. And then we have obviously 842 00:43:54,160 --> 00:43:58,040 Speaker 1: these wars escalating. I know you're not a geopolitical analyst, 843 00:43:58,080 --> 00:44:00,359 Speaker 1: but I know you stay pretty you know, in tune 844 00:44:00,400 --> 00:44:02,440 Speaker 1: with at least what's going on over there. I mean, 845 00:44:02,600 --> 00:44:04,880 Speaker 1: closures on the Red Sea and the Suez Canal. It's 846 00:44:04,880 --> 00:44:08,399 Speaker 1: a pretty big deal potential, you know, pirate attacks going 847 00:44:08,440 --> 00:44:12,080 Speaker 1: as they get around the Cape of Hope they're in Africa. 848 00:44:12,239 --> 00:44:16,280 Speaker 1: If this escalates one, I mean, it could most definitely 849 00:44:16,280 --> 00:44:20,040 Speaker 1: bring back inflation through supply chains, limiting oil supplies, et cetera, 850 00:44:20,160 --> 00:44:22,640 Speaker 1: push and at a minimum, pushing the cost of transportation 851 00:44:22,719 --> 00:44:27,279 Speaker 1: up at a minimum, it could also even escalate potentially 852 00:44:27,320 --> 00:44:29,399 Speaker 1: a lot of these nations wanting to move away from 853 00:44:29,440 --> 00:44:31,600 Speaker 1: dollars even more. I don't know whatever that means. 854 00:44:32,239 --> 00:44:34,000 Speaker 2: Do you think that over this year? 855 00:44:34,080 --> 00:44:35,880 Speaker 1: I mean, is that something that you're really paying attention to, 856 00:44:35,960 --> 00:44:38,319 Speaker 1: you think that has big potential to sort of move 857 00:44:38,360 --> 00:44:38,800 Speaker 1: the markets. 858 00:44:39,960 --> 00:44:43,360 Speaker 3: Well, geopolitical concerns, in my opinion, have never been higher 859 00:44:43,440 --> 00:44:46,759 Speaker 3: in the time that I have been in business, since 860 00:44:47,160 --> 00:44:49,000 Speaker 3: I started in ninety nine, So this is kind of 861 00:44:49,000 --> 00:44:52,280 Speaker 3: my twenty fifth anniversary of being in this line of work. 862 00:44:53,000 --> 00:44:56,000 Speaker 3: I couldnot remember a more uncertain time. 863 00:44:56,200 --> 00:44:56,279 Speaker 1: Now. 864 00:44:57,040 --> 00:45:01,439 Speaker 3: Again, I say uncertain. Maybe things are fine, right I'm 865 00:45:01,480 --> 00:45:05,279 Speaker 3: not certain that we're going to have volatility. I have 866 00:45:05,600 --> 00:45:07,920 Speaker 3: never been more uncertain than I am right now. So 867 00:45:08,000 --> 00:45:10,040 Speaker 3: if anybody's listening to this, thinking Brent's going to give 868 00:45:10,080 --> 00:45:12,799 Speaker 3: us the silver bullet answer, I unfortunately don't have it 869 00:45:12,840 --> 00:45:16,560 Speaker 3: for you. But what I do say is that because everything, 870 00:45:16,680 --> 00:45:20,080 Speaker 3: in my opinion is kind of price to perfection right now. 871 00:45:20,520 --> 00:45:23,960 Speaker 3: But we live in a very imperfect world, and a 872 00:45:24,000 --> 00:45:28,400 Speaker 3: big piece of that imperfection is where geopolitical relations stand 873 00:45:28,840 --> 00:45:33,759 Speaker 3: and potential military hostilities. I think that could I think 874 00:45:33,800 --> 00:45:39,240 Speaker 3: those two things could easily impact markets this year. Again, Remember, 875 00:45:39,360 --> 00:45:43,240 Speaker 3: typically for the last let's just call it thirty years, 876 00:45:45,120 --> 00:45:49,120 Speaker 3: every time we've had some kind of a global systemic 877 00:45:49,200 --> 00:45:51,480 Speaker 3: event over the last thirty years, whether it was the 878 00:45:51,520 --> 00:45:54,040 Speaker 3: global financial crisis, or whether it was a euro crisis 879 00:45:54,080 --> 00:45:57,400 Speaker 3: in twenty ten or COVID in twenty twenty, the whole 880 00:45:57,480 --> 00:46:02,680 Speaker 3: world sort of implemented similar policies and cooperated in order 881 00:46:02,719 --> 00:46:06,520 Speaker 3: to pull the global economy out of it. But during 882 00:46:06,520 --> 00:46:11,320 Speaker 3: that last thirty years, we were in a globalization trend 883 00:46:11,400 --> 00:46:15,560 Speaker 3: where things were becoming more globalized and people were cooperating more. 884 00:46:16,440 --> 00:46:19,160 Speaker 3: Now we're kind of in an environment where people are 885 00:46:19,200 --> 00:46:22,440 Speaker 3: not trusting each other is more. They're not cooperating as 886 00:46:22,520 --> 00:46:25,640 Speaker 3: much as they used to. They're not globalizing, they're deglobalizing. 887 00:46:25,680 --> 00:46:32,799 Speaker 3: They're not centralizing, they're decentralizing. And so as a result, 888 00:46:33,040 --> 00:46:37,000 Speaker 3: if something shows up in the global economy or in 889 00:46:37,080 --> 00:46:40,920 Speaker 3: global financial markets, whether it's geopolitical, whether it's financial, whether 890 00:46:40,960 --> 00:46:46,400 Speaker 3: it's health related, whether it's environment related, you know, I 891 00:46:46,520 --> 00:46:50,800 Speaker 3: think that the ability to respond in a coordinated fashion 892 00:46:50,920 --> 00:46:53,600 Speaker 3: is much lower now than it has been in the past, 893 00:46:53,600 --> 00:46:57,560 Speaker 3: and as a result, I think the potential for contagion 894 00:46:57,640 --> 00:46:59,920 Speaker 3: that kind of gets away from the powers that be 895 00:47:00,680 --> 00:47:03,920 Speaker 3: is higher. So I think this is a year where 896 00:47:04,200 --> 00:47:05,799 Speaker 3: I think this is a very good time to have 897 00:47:05,840 --> 00:47:10,000 Speaker 3: a very boring portfolio, because I think at some point 898 00:47:10,000 --> 00:47:12,640 Speaker 3: this year, it's going to get exciting, and I think 899 00:47:12,680 --> 00:47:15,520 Speaker 3: if you have some dry powder to take advantage of 900 00:47:15,520 --> 00:47:18,360 Speaker 3: that excitement, I think you will not only be in 901 00:47:18,400 --> 00:47:21,319 Speaker 3: a better position mentally, but I think you'll be in 902 00:47:21,320 --> 00:47:23,839 Speaker 3: a better position financially to take advantage of it. 903 00:47:24,520 --> 00:47:28,520 Speaker 1: So what does a boring portfolio look like in twenty 904 00:47:28,560 --> 00:47:29,000 Speaker 1: twenty three? 905 00:47:29,040 --> 00:47:30,640 Speaker 2: Asset categories? Things like that? 906 00:47:31,040 --> 00:47:35,520 Speaker 1: And then what are you looking at specifically to make 907 00:47:35,560 --> 00:47:38,400 Speaker 1: sure you're sort of staying in front of whatever is developing? 908 00:47:40,920 --> 00:47:42,440 Speaker 3: Well, I think one of the things you have to 909 00:47:42,480 --> 00:47:45,520 Speaker 3: be looking at also. So first of all, a boring portfolio. 910 00:47:46,040 --> 00:47:49,160 Speaker 3: I think everybody should own US equities, but at their 911 00:47:49,200 --> 00:47:51,320 Speaker 3: all time highs, I think we're going to get a pullback. 912 00:47:51,360 --> 00:47:53,200 Speaker 3: So if you do own US equities, I think you 913 00:47:53,200 --> 00:47:56,960 Speaker 3: should have some kind of hedge against them, or only 914 00:47:57,000 --> 00:47:58,799 Speaker 3: have enough of them in the port you know, you 915 00:47:58,800 --> 00:48:02,080 Speaker 3: don't have your whole portfolio in them. Right In another 916 00:48:02,120 --> 00:48:05,840 Speaker 3: part of your portfolio, I think having short term fixed income, 917 00:48:05,880 --> 00:48:08,239 Speaker 3: which pays you four to five percent to just sit 918 00:48:08,280 --> 00:48:10,600 Speaker 3: there and wait, is not a horrible thing. You know. 919 00:48:10,680 --> 00:48:12,480 Speaker 3: It wasn't that long ago where you had to buy 920 00:48:12,520 --> 00:48:14,960 Speaker 3: a junk bond to get five percent. Now you can 921 00:48:14,960 --> 00:48:16,640 Speaker 3: get it in the most liquid thing in the world, 922 00:48:16,680 --> 00:48:20,480 Speaker 3: which is treasuries. I think everybody should own gold. I 923 00:48:20,520 --> 00:48:24,960 Speaker 3: think gold is the foundational, uh, part of every portfolio. Now, 924 00:48:25,000 --> 00:48:28,719 Speaker 3: having said that it's at its high, I don't necessarily 925 00:48:28,719 --> 00:48:30,759 Speaker 3: think that gold's going to twenty five hundred over the 926 00:48:30,760 --> 00:48:32,920 Speaker 3: next couple of weeks or the next couple of months. 927 00:48:33,120 --> 00:48:35,000 Speaker 3: I think gold to go to five thousand dollars over 928 00:48:35,000 --> 00:48:37,279 Speaker 3: the next three or four years, five years, but I 929 00:48:37,280 --> 00:48:40,080 Speaker 3: don't think it's happening tomorrow. So again, I think that's 930 00:48:40,080 --> 00:48:41,760 Speaker 3: something that you buy and you put in your portfolio 931 00:48:41,760 --> 00:48:43,680 Speaker 3: and you kind of just forget about it until you 932 00:48:43,719 --> 00:48:46,279 Speaker 3: absolutely need it, and it doesn't matter whether it goes 933 00:48:46,360 --> 00:48:48,600 Speaker 3: up or down, you know, over the next year or two. 934 00:48:49,640 --> 00:48:52,120 Speaker 3: The other thing that I think people could do is, 935 00:48:52,360 --> 00:48:56,200 Speaker 3: you know, I mentioned short term treasuries. If you don't 936 00:48:56,200 --> 00:48:58,880 Speaker 3: have the ability to you know, to to trade and 937 00:48:58,920 --> 00:49:01,319 Speaker 3: fixed income, you know, just have I mean just having 938 00:49:01,400 --> 00:49:03,000 Speaker 3: cash in a bank account I don't think is a 939 00:49:03,000 --> 00:49:06,759 Speaker 3: horrible idea, or you know, have it in your safe 940 00:49:06,760 --> 00:49:09,839 Speaker 3: in your house, have some kind of a safety net 941 00:49:09,960 --> 00:49:13,040 Speaker 3: that if things go south, you're prepared for it. And 942 00:49:13,080 --> 00:49:15,600 Speaker 3: here's the thing is if you if you and you 943 00:49:15,640 --> 00:49:18,400 Speaker 3: know bitcoin. A lot of people own bitcoin. I'm I 944 00:49:18,440 --> 00:49:20,600 Speaker 3: have clients that own bitcoin. I just talked to a 945 00:49:20,640 --> 00:49:25,480 Speaker 3: friendly client yesterday and again this morning, and they're they're 946 00:49:25,680 --> 00:49:28,600 Speaker 3: they you know, they bought it. When did we buy 947 00:49:28,640 --> 00:49:30,400 Speaker 3: it or you know, we bought it to you know, 948 00:49:30,440 --> 00:49:33,040 Speaker 3: maybe it was twenty to twenty six thousand between twenty 949 00:49:33,040 --> 00:49:35,240 Speaker 3: and twenty six and so that's up, but thirty percent 950 00:49:35,320 --> 00:49:37,400 Speaker 3: since they bought it, or forty percent since they bought it. 951 00:49:38,640 --> 00:49:40,240 Speaker 3: You know, it's not a big part of their portfolio, 952 00:49:40,320 --> 00:49:42,360 Speaker 3: but they do own it. I think having things like 953 00:49:42,480 --> 00:49:46,920 Speaker 3: that in the portfolio, I you know, again, try to 954 00:49:47,040 --> 00:49:49,960 Speaker 3: prepared for everything. If you have cash, you're prepared for deflation. 955 00:49:50,000 --> 00:49:52,360 Speaker 3: If you own bitcoin and gold, you're prepared for inflation. 956 00:49:52,400 --> 00:49:54,600 Speaker 3: If you own stocks, you know, over the long term, 957 00:49:54,600 --> 00:49:57,080 Speaker 3: they're probably going to go higher. So I think, I 958 00:49:57,080 --> 00:50:01,120 Speaker 3: think here's what's interesting to me. I've talked to so 959 00:50:01,160 --> 00:50:03,400 Speaker 3: many people over the last let's call it two to 960 00:50:03,400 --> 00:50:06,879 Speaker 3: three months really since q Q three, and I talked 961 00:50:06,880 --> 00:50:09,120 Speaker 3: to so many people. Their sure bitcoin is the answer. 962 00:50:09,200 --> 00:50:11,600 Speaker 3: Other people are sure gold is the answer. Other people 963 00:50:11,640 --> 00:50:13,440 Speaker 3: are sure that the stock is just going to keep 964 00:50:13,440 --> 00:50:16,080 Speaker 3: going higher in stocks are the answer. Other people think 965 00:50:16,120 --> 00:50:20,480 Speaker 3: we're headed for a deflationary collapse and treasuries are the answer. Yeah, 966 00:50:20,520 --> 00:50:23,680 Speaker 3: I'm just like you know I, and they're so certain 967 00:50:23,719 --> 00:50:25,919 Speaker 3: of it, And I don't think you should be certain 968 00:50:25,920 --> 00:50:28,320 Speaker 3: about anything. Have a little bit of everything, be prepared 969 00:50:28,320 --> 00:50:30,600 Speaker 3: for everything. Don't try to be right, just try to 970 00:50:30,640 --> 00:50:32,919 Speaker 3: be prepared because I think, you know, again this year, 971 00:50:33,880 --> 00:50:37,040 Speaker 3: I think something is going to get dislocated this year, 972 00:50:37,600 --> 00:50:40,279 Speaker 3: and which asset class reacts I don't know, but you know, 973 00:50:40,320 --> 00:50:42,759 Speaker 3: if something goes down twenty or thirty percent, then you 974 00:50:42,800 --> 00:50:45,319 Speaker 3: go buy it, right, But I don't like buying things 975 00:50:45,360 --> 00:50:48,520 Speaker 3: that they're all time high, with asset valuations stretched and 976 00:50:48,600 --> 00:50:50,799 Speaker 3: all this uncertainty in the world. So you know. So 977 00:50:50,880 --> 00:50:53,839 Speaker 3: a boring portfolio to me is one that you'll make 978 00:50:53,840 --> 00:50:55,719 Speaker 3: a little bit. If markets do really good this year, 979 00:50:55,760 --> 00:50:58,240 Speaker 3: you'll make a little bit. But if markets do poorly 980 00:50:58,280 --> 00:51:00,200 Speaker 3: this year, you're prepared to take advantage of it. 981 00:51:00,680 --> 00:51:03,520 Speaker 1: So more of a safety. Lots of volatility, a lot 982 00:51:03,520 --> 00:51:06,319 Speaker 1: of unknown uncertainty. So rather play this one a little 983 00:51:06,320 --> 00:51:07,680 Speaker 1: bit safe till you get a bit more, little bit 984 00:51:07,680 --> 00:51:09,520 Speaker 1: more clarity on what to go or. 985 00:51:09,520 --> 00:51:11,600 Speaker 3: What exactly exactly. And this is the thing is in 986 00:51:11,680 --> 00:51:14,880 Speaker 3: Mark there is always going to be another opportunity of markets, 987 00:51:15,280 --> 00:51:18,040 Speaker 3: don't you know. It's kind of like if you're playing poker, 988 00:51:18,080 --> 00:51:20,040 Speaker 3: wait until you get the cards. You don't have to 989 00:51:20,040 --> 00:51:22,319 Speaker 3: play every hand, and just you know, even if you 990 00:51:22,360 --> 00:51:24,799 Speaker 3: don't play hand, the other people playing they might make 991 00:51:24,800 --> 00:51:26,359 Speaker 3: a lot of money. And sometimes it's hard to sit 992 00:51:26,400 --> 00:51:28,440 Speaker 3: there while everybody else at the table's making a lot 993 00:51:28,480 --> 00:51:31,000 Speaker 3: of money. But the worst thing to do is to 994 00:51:31,000 --> 00:51:32,879 Speaker 3: play a hand just so that you're in the game. 995 00:51:33,480 --> 00:51:36,160 Speaker 3: To me, that that to me, that's the worst strategy. 996 00:51:36,160 --> 00:51:38,880 Speaker 3: And I think going all in on you know, one 997 00:51:38,960 --> 00:51:41,920 Speaker 3: or two asset classes right now is kind of jumping 998 00:51:42,000 --> 00:51:43,920 Speaker 3: into the game just because you can't take it sitting 999 00:51:43,960 --> 00:51:45,080 Speaker 3: on the sideline any longer. 1000 00:51:45,160 --> 00:51:46,000 Speaker 2: Yeah. 1001 00:51:46,080 --> 00:51:47,600 Speaker 1: Well, I have a lot more i'd like to ask 1002 00:51:47,640 --> 00:51:48,959 Speaker 1: you about, but I know we got a hard stop 1003 00:51:49,000 --> 00:51:50,799 Speaker 1: and we got to run, so I'm gonna let you 1004 00:51:50,880 --> 00:51:55,040 Speaker 1: go with that. Brent Johnson, Santago Capital will link to 1005 00:51:55,080 --> 00:51:57,760 Speaker 1: your stuff down on the show notes down below. Uh, thanks, 1006 00:51:57,880 --> 00:51:59,879 Speaker 1: thanks for jumping on today. Anything else you want to say? 1007 00:52:00,080 --> 00:52:01,360 Speaker 1: Did we cover it all? No? 1008 00:52:01,560 --> 00:52:03,400 Speaker 3: I just then, you know, thanks for having me on 1009 00:52:03,560 --> 00:52:05,680 Speaker 3: I'm always happy to talk to you, and you know, 1010 00:52:05,840 --> 00:52:07,880 Speaker 3: I wish I had a civil bill at answer for everybody, 1011 00:52:07,920 --> 00:52:10,840 Speaker 3: but I really you know, I think being careful is 1012 00:52:10,840 --> 00:52:12,560 Speaker 3: the best advice I can give to people right now. 1013 00:52:12,600 --> 00:52:16,000 Speaker 2: All right, thanks Brett. All right, let me hit