1 00:00:13,680 --> 00:00:16,840 Speaker 1: Hey, everyone, Welcome to another episode of The Market Disruptors Show, 2 00:00:16,880 --> 00:00:19,279 Speaker 1: and today I am sitting down with Steven van Meter. 3 00:00:19,640 --> 00:00:23,040 Speaker 1: He is taking the social media world by storm. I 4 00:00:23,079 --> 00:00:24,799 Speaker 1: guess you might want to call it that with his 5 00:00:25,079 --> 00:00:27,200 Speaker 1: really good analysis that he's been doing on the markets. 6 00:00:27,520 --> 00:00:29,400 Speaker 1: He's been one of the most requested guests that I've 7 00:00:29,440 --> 00:00:31,600 Speaker 1: had recently, so we decided to have him on and 8 00:00:31,880 --> 00:00:33,720 Speaker 1: I've really been enjoying your work and Stephen, it's a 9 00:00:33,720 --> 00:00:36,320 Speaker 1: pleasure to have you on the show. Thanks for joining us. Mark, 10 00:00:36,479 --> 00:00:38,400 Speaker 1: it's a real pleasure to be here today. Thank you 11 00:00:38,600 --> 00:00:41,199 Speaker 1: for inviting me. Yeah, so, um, you know, I've seen 12 00:00:41,200 --> 00:00:43,120 Speaker 1: a lot of stuff that you've been doing, a lot 13 00:00:43,159 --> 00:00:46,479 Speaker 1: of good analysis, specifically around what the FEDS doing in 14 00:00:46,560 --> 00:00:49,760 Speaker 1: the bond quee, etcetera. But for those that don't know 15 00:00:49,800 --> 00:00:51,360 Speaker 1: who you are, just give us a little bit of 16 00:00:51,400 --> 00:00:53,159 Speaker 1: background on what you've been working on and kind of 17 00:00:53,159 --> 00:00:57,160 Speaker 1: what you're doing. Sure, I've been a financial planner and 18 00:00:57,240 --> 00:01:00,320 Speaker 1: financial advisor for I think this is my nineteenth year 19 00:01:00,360 --> 00:01:02,960 Speaker 1: in the business. I tend to not worry about the 20 00:01:03,000 --> 00:01:06,440 Speaker 1: little details of how exactly how many years I've manage 21 00:01:06,440 --> 00:01:09,679 Speaker 1: a macro fund. And I also invented a formula based 22 00:01:09,840 --> 00:01:14,200 Speaker 1: long equity strategy called portfolio Shield. And uh, other than that, 23 00:01:14,280 --> 00:01:17,399 Speaker 1: I am the self anointed bond king, as many of 24 00:01:17,440 --> 00:01:21,640 Speaker 1: your fans now, yeah, self appointed bon king. So um 25 00:01:21,680 --> 00:01:24,120 Speaker 1: talking about bonds. Well, let's go ahead and dig into 26 00:01:24,160 --> 00:01:26,240 Speaker 1: that for a minute. So Um, I've been kind of 27 00:01:26,280 --> 00:01:29,640 Speaker 1: looking and talking about how um, you know everybody. It 28 00:01:29,720 --> 00:01:31,800 Speaker 1: seems like, at least the retail investors seemed to be 29 00:01:31,840 --> 00:01:35,320 Speaker 1: fixated on the stock market. Um, But it seems like 30 00:01:35,480 --> 00:01:38,880 Speaker 1: the people that really know what's going on are really 31 00:01:38,920 --> 00:01:43,160 Speaker 1: focused on the bond market. Um. Is there? Is that true? 32 00:01:43,200 --> 00:01:46,160 Speaker 1: And if so, why it's a hundred percent true? Because 33 00:01:46,240 --> 00:01:48,080 Speaker 1: let's say that you and I go out after the 34 00:01:48,080 --> 00:01:50,240 Speaker 1: show and have a beer. Well, how how fun is 35 00:01:50,240 --> 00:01:54,040 Speaker 1: it we can talk about Tesla or you know, other 36 00:01:54,160 --> 00:01:57,240 Speaker 1: tex stocks, and and that's what people are excited about. 37 00:01:57,320 --> 00:01:59,520 Speaker 1: You know, they want to talk about, you know, what 38 00:01:59,560 --> 00:02:02,080 Speaker 1: they think is going on with those stocks. If we 39 00:02:02,080 --> 00:02:04,680 Speaker 1: were sitting there over beer and talking about tenure treasury als, 40 00:02:05,360 --> 00:02:09,000 Speaker 1: it seems pretty boring. And you know that's the way 41 00:02:09,000 --> 00:02:12,320 Speaker 1: people approach the bond market is it's not very interesting. 42 00:02:12,800 --> 00:02:15,720 Speaker 1: You know, there's no sex appealed to it. But the 43 00:02:15,760 --> 00:02:18,640 Speaker 1: reason you see certain people focus on the bond market 44 00:02:18,720 --> 00:02:21,480 Speaker 1: is because the bond market is actually bigger and deeper 45 00:02:22,040 --> 00:02:25,720 Speaker 1: than the equity market. And when you understand the bond market, 46 00:02:25,760 --> 00:02:29,040 Speaker 1: you really start to understand the global economy. The stock 47 00:02:29,080 --> 00:02:32,840 Speaker 1: market itself doesn't It can tell you that, but certainly 48 00:02:32,880 --> 00:02:35,560 Speaker 1: doesn't tell you how things are going like the bond 49 00:02:35,600 --> 00:02:39,000 Speaker 1: market does. So the bond market really tells you more 50 00:02:39,040 --> 00:02:41,840 Speaker 1: about the global economy. Is that because we're in a 51 00:02:41,919 --> 00:02:46,440 Speaker 1: debt based economy and bonds are debt. Yes, yeah, that's 52 00:02:46,480 --> 00:02:49,920 Speaker 1: that's a perfect example of that. It tells you, you know, 53 00:02:49,960 --> 00:02:53,360 Speaker 1: are you seeing inflation or deflation? Growth? You know, it 54 00:02:53,480 --> 00:02:55,919 Speaker 1: really tells you what's going on because the stock market 55 00:02:55,960 --> 00:02:58,519 Speaker 1: doesn't always tell you that. You can look at the 56 00:02:58,560 --> 00:03:00,840 Speaker 1: stock market and see a lot of emotion in it. 57 00:03:01,520 --> 00:03:04,320 Speaker 1: The bond market there's really not that emotion. It is 58 00:03:04,360 --> 00:03:08,200 Speaker 1: what it is, and it's more dictated by the monetary system, 59 00:03:08,280 --> 00:03:11,600 Speaker 1: so that the system itself, you know that that controls 60 00:03:11,680 --> 00:03:14,080 Speaker 1: all the money. You know, the bond market is a 61 00:03:14,160 --> 00:03:16,720 Speaker 1: huge piece of that. Where is the equity market? Like 62 00:03:16,760 --> 00:03:19,480 Speaker 1: I said, it's it's sexy, it's fun. You tell your 63 00:03:19,520 --> 00:03:21,840 Speaker 1: friends about it. You don't, you know, tell people like, hey, man, 64 00:03:21,919 --> 00:03:24,040 Speaker 1: I am by bought some bonds and we're like, what's 65 00:03:24,040 --> 00:03:27,359 Speaker 1: wrong with you? Right? Well, I think you know, Uh, 66 00:03:28,000 --> 00:03:31,240 Speaker 1: the retail people own the stocks, right. The boomers are 67 00:03:31,280 --> 00:03:34,200 Speaker 1: looking at their stock portfolio for their retirement. The president 68 00:03:34,280 --> 00:03:38,240 Speaker 1: is trying to push the stock market for uh perception. Right. 69 00:03:39,040 --> 00:03:41,200 Speaker 1: But at the end of the day, really, I guess 70 00:03:41,240 --> 00:03:43,800 Speaker 1: what the Fed is doing is all about bonds, and 71 00:03:43,920 --> 00:03:46,600 Speaker 1: by by moving the bonds, then it moves that moves 72 00:03:46,600 --> 00:03:49,320 Speaker 1: the stock market. Well, well, let's let's touch on why 73 00:03:49,360 --> 00:03:52,360 Speaker 1: the president from pushes the equity market so much, because 74 00:03:52,360 --> 00:03:56,440 Speaker 1: that is something he does and he's only very effective 75 00:03:56,520 --> 00:03:58,400 Speaker 1: at it. I don't think we've ever had a president 76 00:03:58,760 --> 00:04:01,440 Speaker 1: that really could almost move the market with a tweet 77 00:04:01,640 --> 00:04:05,680 Speaker 1: or a press conference. And this is kind of interesting 78 00:04:05,720 --> 00:04:08,720 Speaker 1: to me. You can people have opinions about presidents Trump 79 00:04:08,760 --> 00:04:11,240 Speaker 1: on either side of the fence, But somebody in the 80 00:04:11,280 --> 00:04:13,280 Speaker 1: White House, and I don't know if it was him, 81 00:04:13,720 --> 00:04:18,800 Speaker 1: understands that the economy is consumer consumption. And I don't 82 00:04:18,800 --> 00:04:20,880 Speaker 1: know about you, Mark, but when I feel rich, I 83 00:04:20,920 --> 00:04:23,320 Speaker 1: tend to spend more money. When I feel poor, I 84 00:04:23,360 --> 00:04:25,719 Speaker 1: tend to spend less. Well, how do you make people 85 00:04:25,760 --> 00:04:29,160 Speaker 1: feel rich? Well, you drive stock prices up and get 86 00:04:29,160 --> 00:04:31,760 Speaker 1: people to say, hey, I'm I'm getting richer this week 87 00:04:31,839 --> 00:04:33,720 Speaker 1: or this month and this year, I'm gonna go out 88 00:04:33,760 --> 00:04:36,440 Speaker 1: and buy that new home, car, whatever it is I want. 89 00:04:36,960 --> 00:04:39,640 Speaker 1: And that's a pretty interesting that he's figured that out 90 00:04:39,720 --> 00:04:42,440 Speaker 1: and that he's really, you know, seems to be able 91 00:04:42,480 --> 00:04:45,280 Speaker 1: to push the market to his favor. But how has 92 00:04:45,279 --> 00:04:47,320 Speaker 1: he been able to push the market other than a tweet? 93 00:04:47,400 --> 00:04:49,640 Speaker 1: So he puts out a tweet which makes people feel 94 00:04:49,680 --> 00:04:51,400 Speaker 1: warm and fuzzy, and then they just go spend. I mean, 95 00:04:51,440 --> 00:04:54,960 Speaker 1: don't they actually need to see the stocks going up? Right? Well? 96 00:04:55,040 --> 00:04:57,840 Speaker 1: They do, And a lot of this market is run 97 00:04:57,880 --> 00:05:02,400 Speaker 1: by computer algorism. And since the Great Financial Crisis, what's 98 00:05:02,400 --> 00:05:06,200 Speaker 1: happened is you've seen some black effectively black box computer 99 00:05:06,279 --> 00:05:09,359 Speaker 1: programs that are actually what we call an instry al goals, 100 00:05:09,720 --> 00:05:12,200 Speaker 1: and they're actually reading the news and there's actually computer 101 00:05:12,279 --> 00:05:15,160 Speaker 1: programs that are written to translate the news to them. 102 00:05:15,240 --> 00:05:18,839 Speaker 1: So when they see certain things and their algorithm says, hey, 103 00:05:19,000 --> 00:05:22,760 Speaker 1: that's market positive, well they start, you know, bidding prices up, 104 00:05:22,760 --> 00:05:26,440 Speaker 1: and then everyone says, wow, Trump just tweeted about something Wow, 105 00:05:26,480 --> 00:05:28,400 Speaker 1: the market's going up. Well, I'm gonna go home and 106 00:05:28,520 --> 00:05:31,160 Speaker 1: you know, bye bye bye bye bye, and then boom 107 00:05:31,160 --> 00:05:34,440 Speaker 1: movement drives it up. Yeah. So they're looking the algals 108 00:05:34,480 --> 00:05:36,640 Speaker 1: are looking at sentiment. So they're looking at the different 109 00:05:36,640 --> 00:05:39,200 Speaker 1: conversations and seeing if people are talking bullish or if 110 00:05:39,200 --> 00:05:41,680 Speaker 1: they're talking barish, and then they're trying to trade off 111 00:05:41,720 --> 00:05:44,200 Speaker 1: of that or at least put that into their equation. Um. 112 00:05:44,240 --> 00:05:47,479 Speaker 1: So if if, if his tweet alone is enough to 113 00:05:47,520 --> 00:05:49,680 Speaker 1: maybe push the algals and make everybody feel warm and 114 00:05:49,720 --> 00:05:51,720 Speaker 1: fuzzy and go by, and then it becomes a self 115 00:05:51,720 --> 00:05:53,640 Speaker 1: fulfilling prophecy. More people start buying, and then it goes 116 00:05:53,720 --> 00:05:57,160 Speaker 1: up even more. Um. But then what is fed chair 117 00:05:57,200 --> 00:05:59,320 Speaker 1: of your own powal doing. So when he goes out 118 00:05:59,360 --> 00:06:02,040 Speaker 1: and he says at we're going to basically, you know, 119 00:06:02,120 --> 00:06:05,320 Speaker 1: qui infinity, We're basically gonna you know, all these things 120 00:06:05,320 --> 00:06:07,719 Speaker 1: that he talks about right backstock the economy, what is 121 00:06:07,720 --> 00:06:10,880 Speaker 1: he doing by saying that? Yeah, So the real question 122 00:06:10,880 --> 00:06:13,560 Speaker 1: should be is why is he doing quie in the 123 00:06:13,640 --> 00:06:17,640 Speaker 1: first place? So, what what is the role of of 124 00:06:17,680 --> 00:06:20,000 Speaker 1: the central bank or the FED in our economy? And 125 00:06:20,279 --> 00:06:23,320 Speaker 1: their role is to create a certain level of inflation. 126 00:06:23,960 --> 00:06:26,480 Speaker 1: And we've heard them say they want to percent inflation. 127 00:06:26,480 --> 00:06:28,039 Speaker 1: Now why do we want that. Well, in the dead 128 00:06:28,080 --> 00:06:32,680 Speaker 1: based economy, the goal is you want to slowly inflate 129 00:06:32,720 --> 00:06:36,360 Speaker 1: away that debt. So pal's role is to come out 130 00:06:36,440 --> 00:06:39,560 Speaker 1: there and say, okay, we have the tools and mechanisms 131 00:06:39,600 --> 00:06:43,000 Speaker 1: to create inflation. Now. The odd part is they actually don't. 132 00:06:43,720 --> 00:06:47,760 Speaker 1: And so the reason they do quantitative easing, which is 133 00:06:47,839 --> 00:06:50,800 Speaker 1: widely misunderstood. So most people think, oh, the FED is 134 00:06:50,839 --> 00:06:54,640 Speaker 1: doing quantitative easy to create inflation. That's not actually the 135 00:06:54,680 --> 00:06:57,520 Speaker 1: case at all. The FED does quantitative easy and when 136 00:06:57,520 --> 00:07:01,040 Speaker 1: the economy is deflating or they feel the risks are 137 00:07:01,160 --> 00:07:05,240 Speaker 1: very high that the economy will deflate. So it's exactly 138 00:07:05,320 --> 00:07:08,320 Speaker 1: opposite what people think the FET is doing and why 139 00:07:08,360 --> 00:07:11,560 Speaker 1: they're doing well. But if the if the FET is 140 00:07:11,600 --> 00:07:16,720 Speaker 1: doing quantity it easy because the economy is deflating, but 141 00:07:16,800 --> 00:07:21,320 Speaker 1: then they're doing it in order to reinflate it, so 142 00:07:21,480 --> 00:07:25,680 Speaker 1: wouldn't it be considered inflationary. They do it when it's deflating, 143 00:07:25,720 --> 00:07:29,520 Speaker 1: but in order to get it to reinflate, it would 144 00:07:29,640 --> 00:07:34,160 Speaker 1: if quantitative easy and was inflationary, And that's the problem 145 00:07:34,480 --> 00:07:38,080 Speaker 1: the quantity of eason is not inflationary at all. In fact, 146 00:07:38,080 --> 00:07:41,800 Speaker 1: I use the phrase QUEI is deflationary and tell us 147 00:07:41,920 --> 00:07:47,080 Speaker 1: in inflationary. Everyone's like, huh, well, okay, So the question 148 00:07:47,120 --> 00:07:51,040 Speaker 1: is what does actually quantitative easy actually do. I mean, yeah, 149 00:07:51,040 --> 00:07:52,640 Speaker 1: we can go in and look at the mechanics and 150 00:07:52,680 --> 00:07:55,000 Speaker 1: see how this. You know behind the scenes what the 151 00:07:55,000 --> 00:07:57,760 Speaker 1: FET is doing. But what is the real purpose of 152 00:07:58,320 --> 00:08:01,200 Speaker 1: their actions? And that is too low interest rates? Now 153 00:08:01,240 --> 00:08:04,080 Speaker 1: why would the FED want a lower interest rate to 154 00:08:04,200 --> 00:08:07,640 Speaker 1: create inflation? Well, it's pretty simple. We come back and 155 00:08:07,680 --> 00:08:10,560 Speaker 1: ask the question is how is money created in our economy? 156 00:08:10,640 --> 00:08:13,720 Speaker 1: And it's created when consumers in businesses borrow new money 157 00:08:13,760 --> 00:08:17,280 Speaker 1: is born inside the banking system. If that actually cannot 158 00:08:17,320 --> 00:08:20,760 Speaker 1: create money, they do not have the tools or the 159 00:08:20,800 --> 00:08:24,040 Speaker 1: abilities to do that. So how do I get you, 160 00:08:24,440 --> 00:08:26,240 Speaker 1: and say, if I'm the Feder, how do I get 161 00:08:26,480 --> 00:08:29,160 Speaker 1: you know, Mark Moss to go out and spend money? Well, 162 00:08:29,600 --> 00:08:31,560 Speaker 1: I know, if I raise interest rates, he's probably not 163 00:08:31,680 --> 00:08:33,800 Speaker 1: very motivated, but maybe that car that he's had his 164 00:08:33,840 --> 00:08:35,719 Speaker 1: eye on. If I can get raised down low enough 165 00:08:35,720 --> 00:08:38,200 Speaker 1: and you go, okay, I'm gonna go do it, that's 166 00:08:38,240 --> 00:08:42,160 Speaker 1: the goal. Now, the problem is, and what we learned 167 00:08:42,280 --> 00:08:46,319 Speaker 1: from late economist Milton Freedman is the lower interests actually 168 00:08:46,480 --> 00:08:50,560 Speaker 1: lower interest rates actually tightened financial condition Of course that 169 00:08:50,679 --> 00:08:52,920 Speaker 1: kind of seems We'll wait, a missie, if that seems 170 00:08:52,960 --> 00:08:56,560 Speaker 1: completely opposite of what I've heard, We'll think about it 171 00:08:56,600 --> 00:09:00,640 Speaker 1: this way. Right, Let's say that I was going to 172 00:09:01,360 --> 00:09:04,880 Speaker 1: lend you money at two percent for thirty years. Do 173 00:09:04,920 --> 00:09:08,920 Speaker 1: you think I really want to do that? No? No, 174 00:09:09,559 --> 00:09:12,440 Speaker 1: And what's my risk? What if you don't pay it back? 175 00:09:12,559 --> 00:09:15,520 Speaker 1: My my profit margin is not much. The risk to 176 00:09:15,559 --> 00:09:18,240 Speaker 1: reward is off, is way off. Well the banks know 177 00:09:18,400 --> 00:09:22,280 Speaker 1: that too, So what happens as rates go down banks 178 00:09:22,480 --> 00:09:27,320 Speaker 1: usually start tightening financial conditions. They have zero incentive to lend, 179 00:09:28,320 --> 00:09:30,920 Speaker 1: and all of a sudden it gets harder and harder 180 00:09:30,960 --> 00:09:32,640 Speaker 1: to borrow money. In fact, I was talking to my 181 00:09:32,679 --> 00:09:36,079 Speaker 1: partner today at my securies firm, and he was like, yeah, 182 00:09:36,240 --> 00:09:39,000 Speaker 1: He's like, we just refied our house and his wife 183 00:09:39,160 --> 00:09:42,960 Speaker 1: works in the in the government sector. He said the 184 00:09:43,080 --> 00:09:45,240 Speaker 1: day the loan was gonna close, and he was four 185 00:09:45,280 --> 00:09:47,720 Speaker 1: times they confirmed her employment there in the day before. 186 00:09:47,880 --> 00:09:51,440 Speaker 1: They wanted a phone call with her boss. Because that's 187 00:09:51,440 --> 00:09:55,880 Speaker 1: how type financial conditions are. Banks are decentivizesed to lend 188 00:09:55,960 --> 00:09:58,719 Speaker 1: right now. Now, at some point interest rates will get 189 00:09:58,720 --> 00:10:02,560 Speaker 1: low enough, the economy will shrink or crash, will have 190 00:10:02,600 --> 00:10:05,520 Speaker 1: a recession, and the government will come and say, okay, 191 00:10:05,559 --> 00:10:08,400 Speaker 1: we'll backstop these loans. And then the banks will say, okay, cool, 192 00:10:08,440 --> 00:10:10,760 Speaker 1: cool if if if my risk now is going to 193 00:10:10,840 --> 00:10:13,680 Speaker 1: federally zero, we'll have at it. I'll just start, you know, 194 00:10:13,720 --> 00:10:17,559 Speaker 1: I'll loan anybody. Right. That's why quantitative easy and actually 195 00:10:17,800 --> 00:10:22,520 Speaker 1: is deflationary until it's inflationary because it doesn't actually create 196 00:10:22,559 --> 00:10:25,560 Speaker 1: any money. And that is the biggest myth propagated by 197 00:10:25,559 --> 00:10:28,040 Speaker 1: the Fed of the day. We've heard fedshare pal say 198 00:10:28,040 --> 00:10:30,840 Speaker 1: in a sixty minute interview that the FED is creating 199 00:10:30,880 --> 00:10:35,359 Speaker 1: digital money. No, that they they're absolutely not creating a penny. 200 00:10:35,480 --> 00:10:37,640 Speaker 1: And that's why you don't see that isn't a lot 201 00:10:37,679 --> 00:10:40,280 Speaker 1: of it semantics in a sense right, where it's like 202 00:10:40,320 --> 00:10:42,400 Speaker 1: are they printing money? Well, of course there's no money 203 00:10:42,400 --> 00:10:44,520 Speaker 1: printer today. It's just digital and so like a lot 204 00:10:44,520 --> 00:10:47,559 Speaker 1: of it's like semantics. But if if money is created 205 00:10:47,559 --> 00:10:50,959 Speaker 1: through debt creation, right, which is what you said, right, 206 00:10:51,200 --> 00:10:53,880 Speaker 1: so money is created through debt creation, well, in order 207 00:10:53,960 --> 00:10:57,000 Speaker 1: to create more debt. I need more reserves. So if 208 00:10:57,000 --> 00:10:59,319 Speaker 1: the if the que gives me more reserves, I can 209 00:10:59,320 --> 00:11:03,040 Speaker 1: create more debt, which does kind of print more money, 210 00:11:03,400 --> 00:11:08,640 Speaker 1: well kind of. So the problem is is what quantity 211 00:11:08,679 --> 00:11:11,880 Speaker 1: of easy does is actually, you're correct, it creates bank reserves. 212 00:11:11,920 --> 00:11:14,560 Speaker 1: And so there's a mechanism for that. And what it 213 00:11:14,640 --> 00:11:18,520 Speaker 1: does is it's called a reserve swap. So if you 214 00:11:18,600 --> 00:11:21,839 Speaker 1: look at banks, they will hold US treasury securities and 215 00:11:21,880 --> 00:11:24,960 Speaker 1: mortgage backed securities as reserve assets. Now that doesn't mean 216 00:11:25,000 --> 00:11:26,680 Speaker 1: all of them that they own there, but they do 217 00:11:26,800 --> 00:11:29,520 Speaker 1: hold them in their reserves. So all the FED comes 218 00:11:29,520 --> 00:11:32,480 Speaker 1: in and does and say, okay, here's the deal. We're 219 00:11:32,600 --> 00:11:35,160 Speaker 1: you're gonna give me that treasury security. I'm gonna give 220 00:11:35,160 --> 00:11:38,360 Speaker 1: you reserve asset. Now people look at that exchange and 221 00:11:38,400 --> 00:11:43,000 Speaker 1: go ha ha, they printed money. No, because they removed 222 00:11:43,080 --> 00:11:45,720 Speaker 1: one asset from the bank's balance sheet and gave them another. 223 00:11:46,040 --> 00:11:48,040 Speaker 1: And then that treasure security of the FED took while 224 00:11:48,120 --> 00:11:49,920 Speaker 1: we see it on their balance you can go to 225 00:11:49,920 --> 00:11:52,199 Speaker 1: their websites say yeah, there it is. We can account 226 00:11:52,200 --> 00:11:55,800 Speaker 1: for it. It's effectively removed from the system. You can't 227 00:11:55,800 --> 00:11:58,160 Speaker 1: buy it from the FED. You can't you know, short 228 00:11:58,200 --> 00:12:01,959 Speaker 1: it from the FED, it's it's essentially removed from the system. 229 00:12:02,720 --> 00:12:06,120 Speaker 1: From a bank's perspective and the economy, there's no net 230 00:12:06,200 --> 00:12:09,560 Speaker 1: change in money created. The bank can't access it because 231 00:12:09,600 --> 00:12:11,839 Speaker 1: it's held away from it and they can see it. 232 00:12:11,960 --> 00:12:15,480 Speaker 1: But it does allow them to create more money. Okay, 233 00:12:15,520 --> 00:12:18,480 Speaker 1: well that is the purpose. Okay. From the FEDS perspective, 234 00:12:19,120 --> 00:12:22,560 Speaker 1: what a reserve asset is designed to do, in their 235 00:12:22,600 --> 00:12:26,240 Speaker 1: mind is for the banks to lend against But one 236 00:12:26,280 --> 00:12:29,400 Speaker 1: of the problems that people don't understand about reserve assets 237 00:12:29,440 --> 00:12:31,920 Speaker 1: is they can't leave the system. So when a reserve 238 00:12:31,920 --> 00:12:35,520 Speaker 1: asset is created, it's actually held at a Federal Reserve 239 00:12:35,600 --> 00:12:39,520 Speaker 1: member bank, so you can't the bank can't actually take 240 00:12:39,559 --> 00:12:42,320 Speaker 1: that money out. Now it can move in between the system. 241 00:12:42,320 --> 00:12:44,720 Speaker 1: And what I mean by that is the ownership of 242 00:12:44,760 --> 00:12:47,520 Speaker 1: that reserve asset can change. So if I was a bank, 243 00:12:47,520 --> 00:12:50,640 Speaker 1: and you were a bank, and you had a treasury security, 244 00:12:50,640 --> 00:12:52,440 Speaker 1: and I had a reserve asset, and you said, man, Steve, 245 00:12:52,520 --> 00:12:55,160 Speaker 1: I really need a reserve asset right now, and say, well, man, Mark, 246 00:12:55,200 --> 00:12:58,600 Speaker 1: I really need a treasure security. We could swap, but 247 00:12:58,679 --> 00:13:01,800 Speaker 1: it doesn't leave the system. So the and that's A 248 00:13:01,840 --> 00:13:05,120 Speaker 1: really key point to understand is the reserve asset cannot 249 00:13:05,240 --> 00:13:08,559 Speaker 1: leave the system. So because it can't leave the system, 250 00:13:08,600 --> 00:13:11,520 Speaker 1: the banks can lend against it, but they actually have 251 00:13:11,600 --> 00:13:15,200 Speaker 1: to risk their own capital. So if a default occurs, well, 252 00:13:15,280 --> 00:13:17,760 Speaker 1: now the bank's gotta they've got to eat that in 253 00:13:17,880 --> 00:13:21,640 Speaker 1: the borrower still have to risk their own collateral. It's 254 00:13:21,720 --> 00:13:24,520 Speaker 1: not a perfect situation. So and if you look at 255 00:13:24,520 --> 00:13:26,760 Speaker 1: we have, you know, trillions of dollars in all of 256 00:13:26,760 --> 00:13:29,480 Speaker 1: these reserve assets piling up in the banks, and they're 257 00:13:29,520 --> 00:13:33,080 Speaker 1: still not letting you because the banks cannot be forced 258 00:13:33,080 --> 00:13:36,160 Speaker 1: to learn buy the FED, at least not yet. But 259 00:13:36,280 --> 00:13:38,880 Speaker 1: that's the that the FED can't do that, that's not 260 00:13:39,080 --> 00:13:41,440 Speaker 1: that's not something they can do. So the risk rewarded 261 00:13:41,559 --> 00:13:43,800 Speaker 1: ratio is definitely off. They can't be forced to do 262 00:13:43,880 --> 00:13:46,320 Speaker 1: it um. And so really, if we look back like 263 00:13:46,360 --> 00:13:48,840 Speaker 1: we see, you know, QUI really came into prominence after 264 00:13:48,920 --> 00:13:52,280 Speaker 1: you know, two great financial crash um. And I think 265 00:13:52,320 --> 00:13:54,079 Speaker 1: a lot of people look back to that and say, well, 266 00:13:54,080 --> 00:13:56,160 Speaker 1: we did Quie and we didn't have the inflation and 267 00:13:56,240 --> 00:13:58,280 Speaker 1: so it's not inflation are as you said. But then 268 00:13:58,320 --> 00:14:01,200 Speaker 1: some people would say, well, we did have inflation, but 269 00:14:01,240 --> 00:14:03,920 Speaker 1: it all happened in the financial sector. So now we 270 00:14:04,000 --> 00:14:07,120 Speaker 1: have this, we do have inflation with all these financial assets. 271 00:14:07,360 --> 00:14:09,000 Speaker 1: Is that accurate or you don't think it did? It 272 00:14:09,080 --> 00:14:13,000 Speaker 1: created inflation there either. Well, again, it comes back to 273 00:14:14,000 --> 00:14:16,360 Speaker 1: quantitative easy and does not have anything to do with 274 00:14:16,400 --> 00:14:19,600 Speaker 1: any financial asset. There's no stock trade involved in it, 275 00:14:19,640 --> 00:14:24,360 Speaker 1: there's no housing trade. But there's this belief that as 276 00:14:24,400 --> 00:14:26,680 Speaker 1: the FED increases the monetary base, and let me be 277 00:14:26,800 --> 00:14:29,240 Speaker 1: very clear, not the money supply, the monetary base. The 278 00:14:29,320 --> 00:14:32,560 Speaker 1: FED has zero control over the money supply, but they 279 00:14:32,600 --> 00:14:36,000 Speaker 1: can raise and lower the monetary base with quantitative easy. 280 00:14:36,120 --> 00:14:39,200 Speaker 1: There is this myth that's been propagated that as a 281 00:14:39,280 --> 00:14:42,600 Speaker 1: monetary base rises, for some reason, my house increases in 282 00:14:42,720 --> 00:14:45,600 Speaker 1: value and in your stocks increase in value, and it's 283 00:14:45,640 --> 00:14:50,360 Speaker 1: simply because the FED is doing quantitative easy. There's no 284 00:14:50,400 --> 00:14:54,080 Speaker 1: evidence to support that at all. What's happening is people 285 00:14:54,240 --> 00:14:57,720 Speaker 1: believe that's what happened what it does. And so if 286 00:14:57,760 --> 00:14:59,960 Speaker 1: I believe the stock prices go up because the FED 287 00:15:00,040 --> 00:15:01,920 Speaker 1: is doing QUEI well, what's the smartest thing I can 288 00:15:01,920 --> 00:15:05,320 Speaker 1: go do with my money? Mark? Yeah? By stocks? Yeah? 289 00:15:05,640 --> 00:15:07,600 Speaker 1: And then I think, oh, well, housing must go up. 290 00:15:07,640 --> 00:15:08,880 Speaker 1: Because of that too, So what do I do? I 291 00:15:08,920 --> 00:15:10,960 Speaker 1: go out and buy a house. Well, if everyone starts 292 00:15:10,960 --> 00:15:13,640 Speaker 1: buying homes and stocks because they think the FED makes 293 00:15:13,640 --> 00:15:15,840 Speaker 1: it go up, guess what, they go up and bad. 294 00:15:16,720 --> 00:15:19,120 Speaker 1: And that's that And that's a great point that I 295 00:15:19,120 --> 00:15:21,400 Speaker 1: wanted to talk to you about. So just like Trump 296 00:15:21,560 --> 00:15:26,080 Speaker 1: is tweeting now and almost bluffing the market, um, it 297 00:15:26,200 --> 00:15:29,080 Speaker 1: also appears that Jerome Powell has maybe been bluffing the 298 00:15:29,120 --> 00:15:32,440 Speaker 1: market saying they're going to do all this intervention, um, 299 00:15:32,480 --> 00:15:35,360 Speaker 1: but really not. But just by saying they're gonna do it, 300 00:15:35,400 --> 00:15:37,240 Speaker 1: they're gonna back start the ecoim, they're gonna do whatever 301 00:15:37,280 --> 00:15:39,680 Speaker 1: they can to let it prevent it from crashing, it 302 00:15:40,600 --> 00:15:42,600 Speaker 1: encourages people to go out and by because they think 303 00:15:42,640 --> 00:15:46,360 Speaker 1: the FED has their back. Is that correct? That is 304 00:15:46,360 --> 00:15:50,560 Speaker 1: a percent correct. So the the Federal Reserve has a 305 00:15:50,640 --> 00:15:53,240 Speaker 1: lot less power than people think it does. And I'm 306 00:15:53,240 --> 00:15:56,160 Speaker 1: not just saying power. You can go back through central bankers. 307 00:15:56,520 --> 00:15:58,800 Speaker 1: And so the whole game of the FED is if 308 00:15:58,880 --> 00:16:03,160 Speaker 1: I can convince you of anything and you go do it, 309 00:16:03,160 --> 00:16:06,080 Speaker 1: it becomes a self fulfull in prophecy. So let's say 310 00:16:06,080 --> 00:16:08,400 Speaker 1: that you believe stock prices go because I do more 311 00:16:08,480 --> 00:16:11,240 Speaker 1: quantity and easy, so you go buy stocks, and then 312 00:16:11,240 --> 00:16:13,360 Speaker 1: all of a sudden, because more wealth is being created 313 00:16:13,400 --> 00:16:15,800 Speaker 1: as people chase it up, they feel richer. So they 314 00:16:15,960 --> 00:16:17,520 Speaker 1: then go out and say I'm gonna go eat out 315 00:16:17,520 --> 00:16:19,320 Speaker 1: more and spend more money and buy a new car. 316 00:16:19,680 --> 00:16:21,680 Speaker 1: All of a sudden, now money is being created, as 317 00:16:21,720 --> 00:16:24,320 Speaker 1: money starts moving around and it gets borrowed. And now 318 00:16:24,400 --> 00:16:27,480 Speaker 1: you've gotten this self fulfilling prophecy. And that's why you'll 319 00:16:27,600 --> 00:16:30,960 Speaker 1: never hear any FED chair or any member the Fed 320 00:16:31,040 --> 00:16:32,760 Speaker 1: come out and say, yeah, you know what, Hugh, he 321 00:16:32,840 --> 00:16:34,760 Speaker 1: doesn't do any of the things that you think it does. 322 00:16:35,080 --> 00:16:38,680 Speaker 1: They want you to believe, because the more you believe, 323 00:16:38,800 --> 00:16:41,720 Speaker 1: the more it becomes a self fulfilling prophecy. Now, if 324 00:16:41,720 --> 00:16:44,400 Speaker 1: it did work, and here's a perfect example of it, 325 00:16:45,040 --> 00:16:48,800 Speaker 1: if anyone watches or listens to what Fed chair Fed 326 00:16:48,840 --> 00:16:52,640 Speaker 1: chair pal says lately, he's been going around telling Congress 327 00:16:52,680 --> 00:16:55,960 Speaker 1: and anywhere he can speak as more fiscal stimulus, more 328 00:16:56,040 --> 00:16:59,520 Speaker 1: fiscal stimus. Well wait a minute, who time out? If 329 00:16:59,600 --> 00:17:01,520 Speaker 1: quantity need of using word, why don't we need more 330 00:17:01,520 --> 00:17:05,200 Speaker 1: fiscal stimmus? Because he knows it doesn't actually do anything, 331 00:17:05,680 --> 00:17:08,840 Speaker 1: and He doesn't want anyone to figure out that it doesn't. 332 00:17:09,240 --> 00:17:12,040 Speaker 1: So he can get the Congress issue more fiscal and 333 00:17:12,160 --> 00:17:14,359 Speaker 1: by some stroke of luck, it works, or if it 334 00:17:14,359 --> 00:17:16,800 Speaker 1: doesn't work, you can say, hey, their fault, they didn't 335 00:17:16,840 --> 00:17:19,840 Speaker 1: do more fiscal stuments. I did my part. It's all 336 00:17:19,880 --> 00:17:23,520 Speaker 1: a big game, right, And yeah, we're starting to maybe 337 00:17:23,560 --> 00:17:25,479 Speaker 1: start to see some people that are paying attention are 338 00:17:25,520 --> 00:17:28,440 Speaker 1: starting to see that the Fed doesn't really have those tools. Um, 339 00:17:28,520 --> 00:17:31,680 Speaker 1: what is the difference than between the what the Fed 340 00:17:31,760 --> 00:17:37,000 Speaker 1: can do through its que um and then the fiscal stimulus. Well, 341 00:17:37,040 --> 00:17:39,880 Speaker 1: all q WE does is it's a swap in reserve, right, 342 00:17:39,960 --> 00:17:44,640 Speaker 1: I mean, it literally does absolutely nothing else. And the 343 00:17:44,640 --> 00:17:47,040 Speaker 1: the idea then is okay, banks are gonna lend off 344 00:17:47,080 --> 00:17:49,720 Speaker 1: of this, but because they have to risk their own capital, 345 00:17:49,920 --> 00:17:54,200 Speaker 1: they're really not motivated in the current economic climate. Now, 346 00:17:54,359 --> 00:17:57,520 Speaker 1: fiscal stimus are simple. Congress is going out borrowing money 347 00:17:57,520 --> 00:18:00,560 Speaker 1: and giving it to people and hoping the they're actually 348 00:18:00,560 --> 00:18:03,560 Speaker 1: gonna start spending it on discretionary goods and good goods 349 00:18:03,600 --> 00:18:06,080 Speaker 1: and services and then the money will start moving around 350 00:18:06,119 --> 00:18:09,280 Speaker 1: the economy and that will create inflation and grow. So 351 00:18:09,320 --> 00:18:12,800 Speaker 1: instead of money accumulating at the banks, fiscal stimulus goes 352 00:18:12,840 --> 00:18:15,000 Speaker 1: directly out to the people from Main Street to from 353 00:18:15,000 --> 00:18:17,560 Speaker 1: Wall Street to Main Street, which then increases the spending. 354 00:18:18,320 --> 00:18:22,439 Speaker 1: Well even worse than that. When the US government borrows, 355 00:18:22,440 --> 00:18:24,479 Speaker 1: they borrow from people all over the world, So they 356 00:18:24,520 --> 00:18:29,880 Speaker 1: borrow from foreign central banks, foreign investors, US investors, everybody. 357 00:18:29,960 --> 00:18:32,440 Speaker 1: And so the way I like to look at it 358 00:18:32,600 --> 00:18:37,000 Speaker 1: is there they're kind of pulling in dollars from around 359 00:18:37,000 --> 00:18:39,320 Speaker 1: the world, and they're redistributing, so they're taking them from 360 00:18:39,320 --> 00:18:41,800 Speaker 1: people who have and giving them to people who they 361 00:18:41,840 --> 00:18:45,560 Speaker 1: perceive need them or or will use them. That the 362 00:18:45,600 --> 00:18:49,440 Speaker 1: government is a redistribution machine for dollars. Sure, yep. I 363 00:18:49,520 --> 00:18:51,800 Speaker 1: always say that the government can't create anything, right, they 364 00:18:51,840 --> 00:18:55,280 Speaker 1: just redistribute everything. So, um, So we've talked about que 365 00:18:55,560 --> 00:18:57,439 Speaker 1: and that's kind of one of the FEDS tools, and 366 00:18:57,440 --> 00:18:59,239 Speaker 1: maybe they only have two tools, and the other one 367 00:18:59,240 --> 00:19:02,080 Speaker 1: would be interest right, it's correct, right, And so we 368 00:19:02,160 --> 00:19:04,280 Speaker 1: talked about interest rates briefly, but that's the other tool 369 00:19:04,320 --> 00:19:07,560 Speaker 1: they have. And um, interest rates, low rates or deflation 370 00:19:07,560 --> 00:19:10,040 Speaker 1: are as we've already talked about. But we've gotten to 371 00:19:10,080 --> 00:19:13,400 Speaker 1: a point now, um where interest rates are basically at 372 00:19:13,520 --> 00:19:16,320 Speaker 1: zero and I know none of these things are easy 373 00:19:16,359 --> 00:19:19,399 Speaker 1: to understand because they're so intertwined. Right, But like in 374 00:19:19,440 --> 00:19:23,199 Speaker 1: your example, you used that the FED can't really get 375 00:19:23,240 --> 00:19:26,600 Speaker 1: the market stock market or the real estate to market 376 00:19:26,600 --> 00:19:28,960 Speaker 1: to go up, but they can make me feel better 377 00:19:28,960 --> 00:19:31,000 Speaker 1: about it, so I go by real estate or or 378 00:19:31,040 --> 00:19:33,600 Speaker 1: by stock, which cost him to go up. Which is 379 00:19:33,640 --> 00:19:36,959 Speaker 1: partially true. However, when interest rates are low, then as 380 00:19:36,960 --> 00:19:39,359 Speaker 1: a corporation, I can borrow to buy my stock, or 381 00:19:39,440 --> 00:19:41,639 Speaker 1: when interest rates are low, I can go buy that house. 382 00:19:42,240 --> 00:19:43,840 Speaker 1: And when I buy that house, and whoever I bought 383 00:19:43,880 --> 00:19:45,360 Speaker 1: it from has money and they can go do other 384 00:19:45,359 --> 00:19:47,960 Speaker 1: things with it as well. So in a sense, even 385 00:19:47,960 --> 00:19:50,320 Speaker 1: though maybe the que didn't cause it, the low interest 386 00:19:50,440 --> 00:19:53,359 Speaker 1: rates in a roundabout way did cause the stock market 387 00:19:53,480 --> 00:19:56,960 Speaker 1: or the real estate market to go up, right, And 388 00:19:56,960 --> 00:19:59,800 Speaker 1: and that's that's the whole game is is what you 389 00:19:59,840 --> 00:20:02,080 Speaker 1: can and convince people to do with their money. They 390 00:20:02,200 --> 00:20:05,000 Speaker 1: just so happened to be right now. They're picking stocks 391 00:20:05,600 --> 00:20:07,960 Speaker 1: and they're picking real estate. And why is that? Because 392 00:20:08,040 --> 00:20:10,879 Speaker 1: let's say we do get really high inflation, which is 393 00:20:11,440 --> 00:20:13,600 Speaker 1: what the market believes. Well, what do I want to own? 394 00:20:13,640 --> 00:20:16,440 Speaker 1: I want to own you know, hard assets, real estate, 395 00:20:16,440 --> 00:20:19,960 Speaker 1: goal potentially cryptocurrencies that they're still new enough that we 396 00:20:20,000 --> 00:20:22,320 Speaker 1: don't know exactly how they're going to act in the future, 397 00:20:22,359 --> 00:20:25,320 Speaker 1: but you know they'll probably do fine and high inflation, 398 00:20:25,720 --> 00:20:28,320 Speaker 1: and you want to buy stocks because hey, if that's 399 00:20:28,359 --> 00:20:31,119 Speaker 1: what's gonna happen, then that's what I need. The question 400 00:20:31,200 --> 00:20:35,800 Speaker 1: comes is what happens when it doesn't work? Right? We haven't. 401 00:20:35,920 --> 00:20:37,800 Speaker 1: We saw that in March, and a lot of people 402 00:20:37,840 --> 00:20:40,440 Speaker 1: look back to say, well, well March was an anomaly. 403 00:20:40,560 --> 00:20:43,320 Speaker 1: Well it couldn't have been fed with actually doing quantitative easing. 404 00:20:43,320 --> 00:20:45,919 Speaker 1: Then oh well, they just weren't doing enough. If if 405 00:20:45,920 --> 00:20:47,719 Speaker 1: they would have done more, we wouldn't have seen that. 406 00:20:48,000 --> 00:20:51,120 Speaker 1: And that's the big problem that will happen is what 407 00:20:51,800 --> 00:20:54,720 Speaker 1: how are people going to react when QUI doesn't actually 408 00:20:54,800 --> 00:20:57,320 Speaker 1: do anything because it doesn't do anything, and then they 409 00:20:57,320 --> 00:20:59,760 Speaker 1: figure it out. Well, and I think we can already 410 00:20:59,760 --> 00:21:03,439 Speaker 1: see that it's been having diminishing returns, right, so it's worked, 411 00:21:03,440 --> 00:21:05,240 Speaker 1: and then it works less and less and less, and 412 00:21:05,240 --> 00:21:08,359 Speaker 1: then eventually it just doesn't. Right, So it works until 413 00:21:08,359 --> 00:21:11,280 Speaker 1: it doesn't for sure, because at some point, everybody that 414 00:21:11,320 --> 00:21:13,560 Speaker 1: wanted to buy stocks, bottom everyone that wanted to buy 415 00:21:13,600 --> 00:21:16,280 Speaker 1: real estate bought it, and the economy underneath is still 416 00:21:16,960 --> 00:21:19,480 Speaker 1: weak and not create enough money and enough growth for 417 00:21:19,520 --> 00:21:21,359 Speaker 1: more people to go out and do it. Yeah, and 418 00:21:21,400 --> 00:21:24,480 Speaker 1: so quee doesn't fix that problem. So now that we 419 00:21:24,560 --> 00:21:27,560 Speaker 1: understand the FED and the two tools that they really 420 00:21:27,560 --> 00:21:30,520 Speaker 1: have at their disposal. UM. Now they have these two 421 00:21:30,600 --> 00:21:32,919 Speaker 1: to two tools at the disposal, almost like if I 422 00:21:32,960 --> 00:21:34,760 Speaker 1: was driving a car, I have a gas and I 423 00:21:34,800 --> 00:21:36,840 Speaker 1: have a break. Those are my two my two levers. 424 00:21:37,440 --> 00:21:39,840 Speaker 1: But I'm reading the road, right, so I'm reacting to 425 00:21:39,840 --> 00:21:41,760 Speaker 1: the road using the two levels that I have UM, 426 00:21:41,800 --> 00:21:44,200 Speaker 1: And the FED has two levers UM, and they're trying 427 00:21:44,240 --> 00:21:45,680 Speaker 1: to read the road. And what they're trying to read 428 00:21:45,760 --> 00:21:49,320 Speaker 1: is inflation. And so they have they have this target 429 00:21:49,359 --> 00:21:54,320 Speaker 1: of two percent supposedly, right, yeah, and they have that 430 00:21:54,320 --> 00:21:57,800 Speaker 1: that is their target. They really want to present inflation, right, 431 00:21:57,880 --> 00:22:00,639 Speaker 1: They really want to UM and they and and they 432 00:22:00,640 --> 00:22:02,600 Speaker 1: haven't been able to get it. And now they said, ah, 433 00:22:02,840 --> 00:22:05,200 Speaker 1: forget it. Now, our target is an average of two percent. 434 00:22:05,320 --> 00:22:08,720 Speaker 1: Let it run hot. All these things. However, there in 435 00:22:08,800 --> 00:22:10,840 Speaker 1: order to look at that, like their little gauge on 436 00:22:10,880 --> 00:22:14,879 Speaker 1: their dash of inflation is the CPI. And it seems 437 00:22:14,920 --> 00:22:16,960 Speaker 1: like the CPI I've heard you talking about CPI. Seems 438 00:22:16,960 --> 00:22:20,920 Speaker 1: that the CPI has been a moving target. So, um, 439 00:22:21,040 --> 00:22:23,960 Speaker 1: they have changed the way CPI has been calculated. And 440 00:22:24,000 --> 00:22:26,359 Speaker 1: if if we looked at CPI like we did in night, 441 00:22:26,760 --> 00:22:28,919 Speaker 1: we got a ton of inflation. But if we look 442 00:22:28,960 --> 00:22:33,959 Speaker 1: at today, we don't. So how do you see that? Well, well, 443 00:22:34,160 --> 00:22:35,960 Speaker 1: let's go back to the two tools, because I think 444 00:22:36,000 --> 00:22:38,480 Speaker 1: that's a good, good starting place. And I look at 445 00:22:38,640 --> 00:22:40,600 Speaker 1: the FED as as a golf cart, right, I mean 446 00:22:40,600 --> 00:22:43,920 Speaker 1: it's ford and reverse. I mean that's you pushed one 447 00:22:43,960 --> 00:22:46,200 Speaker 1: pedal and you either get one action or the other. 448 00:22:46,720 --> 00:22:50,399 Speaker 1: And quantitative easy and the Federal funds right, they do 449 00:22:50,480 --> 00:22:52,399 Speaker 1: the same thing. So when the FED lowers the Federal 450 00:22:52,400 --> 00:22:55,880 Speaker 1: funds right and does quantitative easy, they both lower interest rates. 451 00:22:56,160 --> 00:22:58,320 Speaker 1: That's exactly what they do. And when the FED raises 452 00:22:58,400 --> 00:23:01,160 Speaker 1: the federal funds right and they do quantity tightening, that 453 00:23:01,240 --> 00:23:04,399 Speaker 1: causes interest rates to go up. So yes, they do 454 00:23:04,640 --> 00:23:08,400 Speaker 1: use the consumer price index. They also use the personal 455 00:23:08,440 --> 00:23:13,040 Speaker 1: consumption expensures as the barometer for inflation. And you know, 456 00:23:13,240 --> 00:23:15,360 Speaker 1: and that's their choice. I mean that I don't make 457 00:23:15,359 --> 00:23:17,760 Speaker 1: that roll up. It's it's a lot of people are 458 00:23:17,840 --> 00:23:20,120 Speaker 1: kind of critical and say, well, why do you fall invels? 459 00:23:20,160 --> 00:23:22,919 Speaker 1: Because it's what everybody uses. I mean, if there's a 460 00:23:22,960 --> 00:23:26,080 Speaker 1: benchmark in your industry, even if it's flawed, you got 461 00:23:26,080 --> 00:23:28,960 Speaker 1: to use it because that's what everyone else is looking at. 462 00:23:29,840 --> 00:23:32,120 Speaker 1: And so yeah, that's what they look at. They obviously 463 00:23:32,160 --> 00:23:35,240 Speaker 1: feel strongly about it and probably one of the reasons 464 00:23:35,240 --> 00:23:38,000 Speaker 1: why they've modified it over the year. And remember it's 465 00:23:38,000 --> 00:23:40,400 Speaker 1: not the FED that has actually changed this, it's it's 466 00:23:40,440 --> 00:23:44,440 Speaker 1: the other government agencies that create these uh indicies for 467 00:23:45,080 --> 00:23:48,560 Speaker 1: the FED or well or just these government statistics, and 468 00:23:48,640 --> 00:23:51,119 Speaker 1: the FED happens they use them is because if I 469 00:23:51,160 --> 00:23:54,080 Speaker 1: can artificially keep that a little bit lower than it 470 00:23:54,119 --> 00:23:58,680 Speaker 1: should be, then I can theoretically print more money, even 471 00:23:58,680 --> 00:24:02,359 Speaker 1: though I'm not actually really printing money. But that's I 472 00:24:02,400 --> 00:24:06,120 Speaker 1: think that plays into the psychology of this is well, 473 00:24:06,240 --> 00:24:09,200 Speaker 1: we'll just use a statistics that's a little weaker than 474 00:24:09,320 --> 00:24:12,080 Speaker 1: the actual statistic. Because let's just say we used a 475 00:24:12,440 --> 00:24:14,800 Speaker 1: you know, a nineteen eighties gauge of the CB. I, well, 476 00:24:14,800 --> 00:24:17,119 Speaker 1: what would happen. The FED would have to start raising rates. 477 00:24:17,920 --> 00:24:20,800 Speaker 1: That would that wouldn't really be good right now? Right 478 00:24:21,200 --> 00:24:22,840 Speaker 1: And that was exactly what I was thinking, and I 479 00:24:22,880 --> 00:24:24,760 Speaker 1: was just trying to get your take on that. So 480 00:24:25,000 --> 00:24:27,680 Speaker 1: maybe there they are changing the goalpost, if you will, 481 00:24:27,720 --> 00:24:30,240 Speaker 1: pushing the goal post back, um, in order to continue 482 00:24:30,280 --> 00:24:32,800 Speaker 1: with their policy that they want to have, right. But 483 00:24:32,840 --> 00:24:35,040 Speaker 1: the key understanding here is the FED does not create 484 00:24:35,240 --> 00:24:39,200 Speaker 1: those the Consumer Price Index or the Personal Consumption Expenditures 485 00:24:39,200 --> 00:24:42,200 Speaker 1: Index that they use, right, So it's another agency that's 486 00:24:42,240 --> 00:24:44,879 Speaker 1: doing that, correct. Yeah, I believe it's a Bureau of 487 00:24:44,960 --> 00:24:47,720 Speaker 1: Labor Statistics that does the cb I. I'm not sure 488 00:24:47,760 --> 00:24:51,320 Speaker 1: if they also do the pc or not. Now obviously 489 00:24:51,359 --> 00:24:53,640 Speaker 1: someone will say, well, they're obviously in case Hoot's well, 490 00:24:53,840 --> 00:24:57,080 Speaker 1: and some of these agencies are fairly independent of others, 491 00:24:57,119 --> 00:25:00,480 Speaker 1: so um, I don't know that that's entire true. But 492 00:25:00,520 --> 00:25:02,760 Speaker 1: the FED does get to kind of pick which ones 493 00:25:02,800 --> 00:25:05,040 Speaker 1: they want to use, so there could be some bias 494 00:25:05,119 --> 00:25:08,280 Speaker 1: there for sure. Yeah. I've been uh I've been working 495 00:25:08,320 --> 00:25:10,320 Speaker 1: on doing a video on it, and it's taking me 496 00:25:10,359 --> 00:25:13,760 Speaker 1: a while, but I've been using the shadows stats information 497 00:25:13,800 --> 00:25:16,840 Speaker 1: that they have and uh really studying into the CPI 498 00:25:17,000 --> 00:25:19,359 Speaker 1: and what the BLS does. Um. So it's it's a 499 00:25:19,400 --> 00:25:21,639 Speaker 1: work in progress. I'll come out with it, but um, 500 00:25:21,720 --> 00:25:23,800 Speaker 1: it looks like if we use like a nineteen eighties 501 00:25:23,880 --> 00:25:25,560 Speaker 1: number or that I should say, this is the same 502 00:25:25,640 --> 00:25:27,879 Speaker 1: model that we had an ninety we have like eighteen 503 00:25:27,880 --> 00:25:31,280 Speaker 1: percent inflation. It's like crazy, Um, don't hold me to 504 00:25:31,320 --> 00:25:33,320 Speaker 1: that exact number because it's still a work in progress. 505 00:25:33,320 --> 00:25:36,000 Speaker 1: But somewhere somewhere I won't because I don't. I mean, 506 00:25:36,240 --> 00:25:38,040 Speaker 1: people are very critical to me and they say, why 507 00:25:38,080 --> 00:25:40,240 Speaker 1: don't you look at these other things, Like because this 508 00:25:40,280 --> 00:25:42,640 Speaker 1: is a bunch farm of my industry uses. I have 509 00:25:42,720 --> 00:25:44,960 Speaker 1: no choice whether whether I agree with or not. It 510 00:25:45,000 --> 00:25:47,600 Speaker 1: doesn't matter, and it doesn't matter where those are more accurates. 511 00:25:47,640 --> 00:25:50,960 Speaker 1: Everybody's using this, So this is what I'm going to use. Sure, sure, 512 00:25:51,160 --> 00:25:52,840 Speaker 1: well it makes sense. I mean I think I think 513 00:25:52,840 --> 00:25:54,960 Speaker 1: we have to look at it. You know, these things 514 00:25:54,960 --> 00:25:56,760 Speaker 1: are multifaceted, so we have to look at them from 515 00:25:56,760 --> 00:25:58,879 Speaker 1: different angles. So for sure, we have to look at 516 00:25:58,880 --> 00:26:01,399 Speaker 1: the benchmark industry give us because that tells us what 517 00:26:01,520 --> 00:26:05,120 Speaker 1: the FED policy is going to do. But as an investor, 518 00:26:05,400 --> 00:26:07,800 Speaker 1: as as someone taking a person responsibility for my own self, 519 00:26:07,840 --> 00:26:10,879 Speaker 1: I also have to understand what's really going on maybe 520 00:26:10,960 --> 00:26:14,159 Speaker 1: beyond their policy. See, you gotta look at both. You 521 00:26:14,160 --> 00:26:16,080 Speaker 1: gotta hold both ideas in their head at the same time. 522 00:26:16,080 --> 00:26:18,920 Speaker 1: Maybe yeah. I mean I think as a money manager, 523 00:26:18,920 --> 00:26:21,600 Speaker 1: it's a little different because if I was actually, you know, 524 00:26:21,720 --> 00:26:24,720 Speaker 1: running my investment strategies based on say, let's let's just 525 00:26:24,720 --> 00:26:27,040 Speaker 1: say you're eighteen percent number is correct, and we'll both 526 00:26:27,080 --> 00:26:29,520 Speaker 1: agree that we don't know. Well, I'm gonna have a 527 00:26:29,640 --> 00:26:33,280 Speaker 1: much different investment allocation that I would if I'm following 528 00:26:33,280 --> 00:26:36,440 Speaker 1: what the FED is kind of saying, is is the benchmark. 529 00:26:36,560 --> 00:26:39,639 Speaker 1: So there's a point where you can say, well, I 530 00:26:39,680 --> 00:26:42,359 Speaker 1: know this to be true, but I can't really use it. 531 00:26:42,560 --> 00:26:43,920 Speaker 1: I mean, look and I know it's true in the 532 00:26:43,960 --> 00:26:46,680 Speaker 1: day to day life, but that doesn't matter. Well let's 533 00:26:46,680 --> 00:26:48,879 Speaker 1: talk about that for a minute though, So uh force 534 00:26:49,320 --> 00:26:52,320 Speaker 1: like a takeaway that somebody could get. So, um, the 535 00:26:52,400 --> 00:26:56,480 Speaker 1: FED saying there's no inflation, and so I'm investing according 536 00:26:56,520 --> 00:26:59,280 Speaker 1: to what I expect from the FED right this macro lens. 537 00:26:59,320 --> 00:27:02,119 Speaker 1: But on a personal level, I I do have to 538 00:27:02,160 --> 00:27:05,040 Speaker 1: account for prices going up. I mean, food's gone way 539 00:27:05,119 --> 00:27:07,560 Speaker 1: up this year. Uh get you know, everything's gone way up. 540 00:27:07,560 --> 00:27:09,560 Speaker 1: So I do have to kind of manage the amount 541 00:27:09,560 --> 00:27:12,400 Speaker 1: of cash FW that I need. So from a personal 542 00:27:12,760 --> 00:27:16,560 Speaker 1: uh financial planning perspective is that it is that important 543 00:27:16,600 --> 00:27:19,440 Speaker 1: to kind of understand to help adjust my plan properly. 544 00:27:20,160 --> 00:27:22,480 Speaker 1: It is the problem is people don't actually believe that 545 00:27:22,520 --> 00:27:26,040 Speaker 1: things go down in price either. So one example is, um, 546 00:27:26,440 --> 00:27:30,560 Speaker 1: I I leased cars at least cars for eighteen years, 547 00:27:31,080 --> 00:27:33,320 Speaker 1: so about every three years I do. I know some 548 00:27:33,359 --> 00:27:36,040 Speaker 1: people listen as so like, what a complete waste of money? Right, 549 00:27:36,320 --> 00:27:38,520 Speaker 1: Well maybe, but you know, I'm really busy. I want 550 00:27:38,520 --> 00:27:40,680 Speaker 1: to make sure my cars under warranty. I don't drive 551 00:27:40,720 --> 00:27:43,440 Speaker 1: a lot and I don't buy really fancy cars generally, 552 00:27:43,520 --> 00:27:46,440 Speaker 1: so to me, it's not really a big deal. Well, 553 00:27:46,600 --> 00:27:50,760 Speaker 1: the least on my current cars thirteen dollars a month. 554 00:27:50,960 --> 00:27:53,280 Speaker 1: It's the cheapest least I've ever had. So I could 555 00:27:53,320 --> 00:27:55,120 Speaker 1: look at that and say, well, I've had more expensive 556 00:27:55,200 --> 00:27:58,800 Speaker 1: leases than I have now, so that is effect deflation er. 557 00:27:59,040 --> 00:28:00,679 Speaker 1: And I can look at other things in my budget 558 00:28:00,720 --> 00:28:02,960 Speaker 1: and say, okay, well, you know, my my cost of 559 00:28:03,040 --> 00:28:07,120 Speaker 1: internet is kind of round this level, but every year 560 00:28:07,200 --> 00:28:09,360 Speaker 1: a couple of years, they boost my speed up. Well 561 00:28:09,359 --> 00:28:13,240 Speaker 1: that's disinflationary. So you know, people I think just wants 562 00:28:13,280 --> 00:28:15,720 Speaker 1: to see the prices are always going up even though 563 00:28:16,520 --> 00:28:18,360 Speaker 1: they aren't. I mean you have to kind of look 564 00:28:18,400 --> 00:28:20,320 Speaker 1: at the big picture and say, Okay, maybe some of 565 00:28:20,359 --> 00:28:22,520 Speaker 1: these things aren't going up that much, or maybe they're 566 00:28:22,520 --> 00:28:26,240 Speaker 1: not going up as much as other things. Right, Um, 567 00:28:26,240 --> 00:28:28,560 Speaker 1: getting to get a yeah, getting a bigger perspective. So 568 00:28:28,800 --> 00:28:32,560 Speaker 1: I'm talking about that. So then, um, the inflation versus 569 00:28:32,600 --> 00:28:36,320 Speaker 1: deflation debate. So back to you know, shadow stats as 570 00:28:36,359 --> 00:28:39,520 Speaker 1: were inflationary, Offed says, we're not inflationary. What they're trying 571 00:28:39,560 --> 00:28:44,720 Speaker 1: to do is is maybe inflationary, but it's actually getting deflationary. Um. 572 00:28:44,840 --> 00:28:46,720 Speaker 1: I kind of look at it as like inflation is 573 00:28:46,760 --> 00:28:48,880 Speaker 1: this big balloon that we filled up with debt whatever 574 00:28:48,920 --> 00:28:50,840 Speaker 1: a couple couple hundred billion dollars worth in the last 575 00:28:50,880 --> 00:28:53,600 Speaker 1: fifty sixty years, and it keeps trying to deflate, and 576 00:28:53,680 --> 00:28:55,520 Speaker 1: the FED keeps trying to pump it back up and 577 00:28:55,520 --> 00:28:59,560 Speaker 1: and it deflates again. Um. Is that the battle that's 578 00:28:59,600 --> 00:29:01,480 Speaker 1: going on? And they're constantly just trying to keep this 579 00:29:01,560 --> 00:29:04,560 Speaker 1: balloon inflated while it's trying to deflate, And if so, 580 00:29:06,200 --> 00:29:11,240 Speaker 1: who wins that battle? Yeah, that's not not quite exactly right. 581 00:29:11,400 --> 00:29:14,480 Speaker 1: So we're in a debt based economy. You mentioned that earlier. 582 00:29:14,520 --> 00:29:17,640 Speaker 1: And so how do you get economic growth, well, believe 583 00:29:17,720 --> 00:29:21,200 Speaker 1: or not by more people by more debt. I mean that, 584 00:29:21,600 --> 00:29:23,760 Speaker 1: I mean as much as you know, I know you 585 00:29:23,800 --> 00:29:26,160 Speaker 1: and other people talk about you know, living within your 586 00:29:26,200 --> 00:29:28,880 Speaker 1: means and all that, the reality is we're an economy 587 00:29:28,880 --> 00:29:31,160 Speaker 1: that if I'm debt free, someone else has to have 588 00:29:31,320 --> 00:29:34,760 Speaker 1: more debt because I don't. And that's the whole name 589 00:29:34,760 --> 00:29:37,440 Speaker 1: of the game. And so what it's not that the 590 00:29:37,480 --> 00:29:40,320 Speaker 1: debt so much is deflating, because that's clearly not the case. 591 00:29:40,360 --> 00:29:43,680 Speaker 1: For really, you know, the debt is growing on a 592 00:29:43,680 --> 00:29:46,719 Speaker 1: regular basis when it is deflating if somebody defaults. I mean, 593 00:29:46,760 --> 00:29:50,640 Speaker 1: I could default on a million dollars and it's gone, right. 594 00:29:50,640 --> 00:29:52,840 Speaker 1: But the the issue isn't that, it's just the debt 595 00:29:52,880 --> 00:29:56,640 Speaker 1: isn't growing at a fast enough rate. That's the problem. 596 00:29:56,680 --> 00:30:00,000 Speaker 1: And so you know, the Fed really needs to see 597 00:30:00,200 --> 00:30:02,560 Speaker 1: the debt growing at a certain rate to get enough 598 00:30:02,560 --> 00:30:06,400 Speaker 1: economic growth to keep anybody, to keep people from defaulting 599 00:30:06,440 --> 00:30:09,080 Speaker 1: on their loans and all that good stuff. The problem 600 00:30:09,120 --> 00:30:12,120 Speaker 1: is they don't have the tools or ability or mechanisms 601 00:30:12,160 --> 00:30:15,760 Speaker 1: to accomplish that goal. So do you think we're getting 602 00:30:15,840 --> 00:30:18,960 Speaker 1: to uh the end? I mean they're getting there. They don't. 603 00:30:18,960 --> 00:30:20,800 Speaker 1: They don't have a strong enough air pump to blow 604 00:30:20,840 --> 00:30:22,840 Speaker 1: it up anymore. Like they're not able to get the 605 00:30:22,880 --> 00:30:25,200 Speaker 1: inflation that they need anymore. And so now we're going 606 00:30:25,240 --> 00:30:27,680 Speaker 1: to start this slow decline or maybe even a rapid 607 00:30:27,680 --> 00:30:30,920 Speaker 1: decline into more of a deflationary cycle. Well, we've seen 608 00:30:30,960 --> 00:30:33,520 Speaker 1: the disinflation for forty years. I mean, if whether or 609 00:30:33,520 --> 00:30:35,760 Speaker 1: not people agree with the consumer price indexs, you can 610 00:30:35,760 --> 00:30:37,760 Speaker 1: look at treasuryels, you can look at other things and 611 00:30:37,840 --> 00:30:41,320 Speaker 1: say that, yes, we have not seen the same rate 612 00:30:41,320 --> 00:30:43,560 Speaker 1: of inflation as we saw in the eighties. And even 613 00:30:43,560 --> 00:30:46,200 Speaker 1: if we went, say to the shadow stats, and you know, 614 00:30:46,400 --> 00:30:48,920 Speaker 1: well then their version of the eighties was probably even 615 00:30:48,960 --> 00:30:52,960 Speaker 1: more than the official version. The the problem with low 616 00:30:53,040 --> 00:30:58,520 Speaker 1: interest rates is it destroys money really quick. So here's 617 00:30:58,520 --> 00:31:00,520 Speaker 1: a great example. We talked about money is created when 618 00:31:00,560 --> 00:31:03,000 Speaker 1: people borrow, Well, there has to be an opposite reaction 619 00:31:03,040 --> 00:31:04,920 Speaker 1: to that. Money just isn't created into stays in the 620 00:31:04,960 --> 00:31:09,160 Speaker 1: system perpetually. It is destroyed as people make a principal 621 00:31:09,200 --> 00:31:11,480 Speaker 1: payment toward their loans. So you know, in a payment 622 00:31:11,520 --> 00:31:13,720 Speaker 1: they have interest in principle as you make that back, 623 00:31:13,800 --> 00:31:17,480 Speaker 1: the principle is actually destroyed, removed from the system. So 624 00:31:17,600 --> 00:31:20,080 Speaker 1: when you get down to the zero bound, right, So 625 00:31:20,120 --> 00:31:21,680 Speaker 1: let's just say after the show that you and I 626 00:31:21,720 --> 00:31:23,719 Speaker 1: go out, um, and we want to get a new 627 00:31:23,720 --> 00:31:26,520 Speaker 1: car together, and so we buy a sixty tho dollar 628 00:31:26,560 --> 00:31:29,880 Speaker 1: car at zero percent interest. Well, we finance this, so 629 00:31:29,920 --> 00:31:32,800 Speaker 1: sixty dollars comes into the economy, but every month as 630 00:31:32,840 --> 00:31:35,200 Speaker 1: we make that thousand dollar and one payment, money is 631 00:31:35,200 --> 00:31:38,080 Speaker 1: being destroyed, and at the end of sixty months, it's 632 00:31:38,120 --> 00:31:40,720 Speaker 1: all gone. Well, the problem is is when you're at 633 00:31:40,720 --> 00:31:43,360 Speaker 1: a low interest rate bound, you need so many, so 634 00:31:43,560 --> 00:31:46,360 Speaker 1: much in new loans being created all the time to 635 00:31:46,440 --> 00:31:49,720 Speaker 1: offset all of this currency destruction from low interest rates 636 00:31:50,560 --> 00:31:53,239 Speaker 1: that it's a self fulfill and prophecy. You're going to 637 00:31:53,320 --> 00:31:57,400 Speaker 1: get disinflation and deflation because you have to have so 638 00:31:57,520 --> 00:32:00,840 Speaker 1: much borrowing going on, and there's just no way that's 639 00:32:00,840 --> 00:32:03,960 Speaker 1: going to happen. Yeah. Yeah, the system is just inherently 640 00:32:04,000 --> 00:32:06,920 Speaker 1: flawed because that the dead system just can't continue at 641 00:32:06,920 --> 00:32:11,120 Speaker 1: some point. Um. I recently had Jeff Booth on the show. Uh, 642 00:32:11,160 --> 00:32:12,800 Speaker 1: he wrote a book, The Price Up Tomorrow. I'm not 643 00:32:12,880 --> 00:32:15,800 Speaker 1: sure if you've you've seen that. Um, he's uh, he's 644 00:32:15,800 --> 00:32:17,960 Speaker 1: definitely interesting. I think he was on Real Vision recently 645 00:32:18,000 --> 00:32:20,640 Speaker 1: as well, but he wrote he wrote a book called 646 00:32:20,720 --> 00:32:23,040 Speaker 1: I may have Actually now I know who you're talking about. Yes, yeah, 647 00:32:23,040 --> 00:32:24,480 Speaker 1: he wrote a book The Price of Tomorrow, and he 648 00:32:24,520 --> 00:32:28,920 Speaker 1: basically said that everything we do is deflationary, like my 649 00:32:29,600 --> 00:32:32,560 Speaker 1: like humans, everything we try to think about is deflationary, 650 00:32:32,640 --> 00:32:35,920 Speaker 1: meaning I want to accomplish more with less work. Right, 651 00:32:36,400 --> 00:32:38,120 Speaker 1: I'm gonna invent a lawnmower so I don't have just 652 00:32:38,240 --> 00:32:41,480 Speaker 1: there with scissors, right, Like, everything we do is deflationary. 653 00:32:41,640 --> 00:32:44,000 Speaker 1: I remember as a kid watching the jet the Jetsons, 654 00:32:44,040 --> 00:32:45,719 Speaker 1: and like there was like a robot, and I'm like, oh, 655 00:32:45,720 --> 00:32:47,080 Speaker 1: how cool would be if I had a robot that 656 00:32:47,080 --> 00:32:50,080 Speaker 1: can clean my house? And that's deflationary, Like we want 657 00:32:50,160 --> 00:32:53,000 Speaker 1: that world, But at the same time, our financial system 658 00:32:53,080 --> 00:32:55,479 Speaker 1: is trying to fight the world, and so it's fighting 659 00:32:55,520 --> 00:32:59,160 Speaker 1: against nature, which doesn't seem like a good, good war. 660 00:32:59,320 --> 00:33:02,560 Speaker 1: I guess yeah, I totally agree that if you want, 661 00:33:02,600 --> 00:33:05,440 Speaker 1: if you want to see people working in inflation, start 662 00:33:05,520 --> 00:33:08,120 Speaker 1: ripping away all this automation and all of a sudden 663 00:33:08,160 --> 00:33:10,280 Speaker 1: people are gonna have to work. I mean, we keep 664 00:33:10,360 --> 00:33:12,640 Speaker 1: hearing more and more that at some point technology will 665 00:33:12,680 --> 00:33:14,840 Speaker 1: get to a level where most people will not be 666 00:33:14,960 --> 00:33:17,960 Speaker 1: will not need to work. Well, that's not inflationary. You 667 00:33:18,040 --> 00:33:20,160 Speaker 1: know what I want is you know, factories full of 668 00:33:20,200 --> 00:33:22,960 Speaker 1: people assembling things and doing all that. Well, that means 669 00:33:23,200 --> 00:33:25,280 Speaker 1: lots of people are getting paid, lots of money is 670 00:33:25,280 --> 00:33:28,000 Speaker 1: moving around, and lots of things are happening. But we 671 00:33:28,040 --> 00:33:30,040 Speaker 1: don't really want that. I would love to have a 672 00:33:30,160 --> 00:33:32,120 Speaker 1: robot doing all my work for me. I mean, well, 673 00:33:32,400 --> 00:33:35,520 Speaker 1: not if there's perpetual deflation, you wouldn't. I was in 674 00:33:36,040 --> 00:33:37,880 Speaker 1: I'm a surfer, so I travel all over the world 675 00:33:37,920 --> 00:33:39,920 Speaker 1: to surfing in the most remote places that we can 676 00:33:39,920 --> 00:33:42,760 Speaker 1: get to. And uh, I was in Nicaragua, and uh 677 00:33:42,960 --> 00:33:44,560 Speaker 1: one of the poorest places that I've been to. It's 678 00:33:44,600 --> 00:33:47,040 Speaker 1: really poor there, and the same stretch of road that 679 00:33:47,080 --> 00:33:49,600 Speaker 1: I've been going on for years, and uh, like they're 680 00:33:49,720 --> 00:33:52,120 Speaker 1: making no ground on this road. You know, it's still 681 00:33:52,160 --> 00:33:55,080 Speaker 1: mostly dirt and very rough, and they're out there literally 682 00:33:55,120 --> 00:33:59,440 Speaker 1: hand by hand laying these pavers by hand, pavers like 683 00:33:59,520 --> 00:34:02,240 Speaker 1: not even concrete or asphalt. And I asked the locals, 684 00:34:02,280 --> 00:34:04,480 Speaker 1: like what is going on with this road? Like they're 685 00:34:04,480 --> 00:34:06,360 Speaker 1: out there lane brick by brick, Like why not just 686 00:34:06,400 --> 00:34:09,719 Speaker 1: bring a tractor out here. Oh, because the people need 687 00:34:09,760 --> 00:34:12,720 Speaker 1: to work. Yeah, people need to work like that, So 688 00:34:12,719 --> 00:34:15,200 Speaker 1: so they're inflationary getting people to lay bricks by hand 689 00:34:15,239 --> 00:34:16,640 Speaker 1: when they could just bring a tractor and get the 690 00:34:16,680 --> 00:34:19,880 Speaker 1: road done in a year, which I think is what 691 00:34:19,960 --> 00:34:22,680 Speaker 1: I would want, but I guess, uh, different people say 692 00:34:22,719 --> 00:34:26,840 Speaker 1: that differently. Yeah. Well, and that's why back when Japan, 693 00:34:27,040 --> 00:34:28,719 Speaker 1: and of course they're still going through a lot of 694 00:34:28,719 --> 00:34:31,680 Speaker 1: their problems, they would do just stimulus, fiscal stimus after 695 00:34:31,680 --> 00:34:34,480 Speaker 1: fiscal stimulus, and you would hear stories where they pave 696 00:34:34,520 --> 00:34:36,520 Speaker 1: a whole stretch of road and when they got done, 697 00:34:36,920 --> 00:34:39,560 Speaker 1: they tear all up and pave it again. It up, 698 00:34:39,640 --> 00:34:44,040 Speaker 1: pay it again, keep people working. Now. We talked about 699 00:34:44,080 --> 00:34:47,840 Speaker 1: being in a debt based system um compared to a 700 00:34:47,920 --> 00:34:50,040 Speaker 1: system that's not built off debt like we had with 701 00:34:50,080 --> 00:34:53,120 Speaker 1: the gold standard. Right, well, the gold standard was still 702 00:34:53,200 --> 00:34:55,640 Speaker 1: dead based there. What you would more what you're referring 703 00:34:55,680 --> 00:34:59,279 Speaker 1: to as a saving based saving space. So the goal, 704 00:34:59,400 --> 00:35:01,560 Speaker 1: the goals of the still that they're the difference is 705 00:35:01,640 --> 00:35:04,080 Speaker 1: gold limited. How much money could be created once we 706 00:35:04,080 --> 00:35:07,040 Speaker 1: were off the goal standard, the bankinginess system actually took 707 00:35:07,080 --> 00:35:09,560 Speaker 1: over and said, look, we can create money now as 708 00:35:09,600 --> 00:35:11,480 Speaker 1: long as people want to borrow and move it around. 709 00:35:11,480 --> 00:35:13,920 Speaker 1: Whereas and under the gold standers said, look you have 710 00:35:14,040 --> 00:35:17,960 Speaker 1: ex gold, you can only create x amount of dollars. Yeah, so, 711 00:35:18,640 --> 00:35:21,360 Speaker 1: um in in a savings based economy, then then I 712 00:35:21,400 --> 00:35:24,200 Speaker 1: should be able to specialize in my work, put the 713 00:35:24,239 --> 00:35:27,319 Speaker 1: money aside, and have its store its value. Which then 714 00:35:27,480 --> 00:35:30,840 Speaker 1: if prices were getting cheaper over time, but my value 715 00:35:30,960 --> 00:35:34,480 Speaker 1: was retaining its purchasing power or increasing its purchasing power, 716 00:35:35,040 --> 00:35:37,560 Speaker 1: I should be able to work less and still enjoy 717 00:35:37,640 --> 00:35:40,520 Speaker 1: my same standard of living. Theoretically, right, that's how supposed 718 00:35:40,520 --> 00:35:43,480 Speaker 1: to work. That is exactly how it works. But we don't. 719 00:35:43,520 --> 00:35:44,920 Speaker 1: We don't. We don't know because we don't we don't 720 00:35:44,960 --> 00:35:47,719 Speaker 1: have that. Um well, there's a reason why if you 721 00:35:47,760 --> 00:35:50,400 Speaker 1: really want to go down the rabbit hole. I love 722 00:35:50,480 --> 00:35:53,759 Speaker 1: rabbit holes, which is funny because my wife would have 723 00:35:53,800 --> 00:35:56,480 Speaker 1: a little pet rabbit we cause and tell you get 724 00:35:56,520 --> 00:35:58,200 Speaker 1: one of those things. Are kind of weird pets. But 725 00:35:58,880 --> 00:36:00,920 Speaker 1: I wish he watches a show gonna kick out of that. 726 00:36:01,200 --> 00:36:03,200 Speaker 1: So here, So, so think about this. If we're in 727 00:36:03,200 --> 00:36:07,280 Speaker 1: a savings based system where you're actually your your money 728 00:36:07,280 --> 00:36:11,319 Speaker 1: holds value and you can actually end up working less. Well, well, 729 00:36:11,320 --> 00:36:14,960 Speaker 1: why is that a problem. Well, because in our system, 730 00:36:15,040 --> 00:36:18,839 Speaker 1: now we have some people, some families that what else say, 731 00:36:18,920 --> 00:36:22,359 Speaker 1: is generational wealthy. Now you know you'll see year after year, 732 00:36:22,440 --> 00:36:24,880 Speaker 1: decade after decades. Certainly now some people fall off and 733 00:36:24,920 --> 00:36:26,680 Speaker 1: some people get out of it, and you'll get people 734 00:36:26,680 --> 00:36:29,360 Speaker 1: like Zuckerbirds that will get very rich. The question is 735 00:36:29,440 --> 00:36:32,879 Speaker 1: can they hang on to that? Well, you also look 736 00:36:32,920 --> 00:36:36,960 Speaker 1: at the government a lot of power being in politics. 737 00:36:37,440 --> 00:36:40,959 Speaker 1: A debt based system is designed to keep a very 738 00:36:41,000 --> 00:36:44,719 Speaker 1: small number of the population extremely wealthy. It's designed to 739 00:36:44,719 --> 00:36:48,840 Speaker 1: support large governments, and as the same argument, it also 740 00:36:48,960 --> 00:36:52,439 Speaker 1: designed to keep people working. Now that seems really weird. 741 00:36:52,719 --> 00:36:55,960 Speaker 1: And here's why. There's a limited pool of dollars in 742 00:36:56,040 --> 00:36:59,239 Speaker 1: our system. And if we took all those dollars and 743 00:36:59,320 --> 00:37:01,640 Speaker 1: try to pay off every debt that exists, and there 744 00:37:01,640 --> 00:37:05,320 Speaker 1: are not enough dollars out there to accomplish that. So 745 00:37:05,440 --> 00:37:08,600 Speaker 1: in any given day, we all compete, e shop compete 746 00:37:08,680 --> 00:37:11,120 Speaker 1: with each other. So right now, Mark, I'm competing with 747 00:37:11,160 --> 00:37:13,799 Speaker 1: you to get dollars, You're competing with me. All of 748 00:37:13,920 --> 00:37:17,759 Speaker 1: all of your listeners are competing for dollars. There are 749 00:37:17,800 --> 00:37:19,759 Speaker 1: there are some that are very good at it. So 750 00:37:19,800 --> 00:37:23,359 Speaker 1: say Mark Zuckerberry, excellent at getting dollars, Elon Musk very 751 00:37:23,360 --> 00:37:25,560 Speaker 1: good at getting dollars. And there are some people that aren't, 752 00:37:25,760 --> 00:37:29,400 Speaker 1: and they're on you know, government assistance, or they're homeless. 753 00:37:29,440 --> 00:37:32,040 Speaker 1: So every day we're out competing for dollars. Now, if 754 00:37:32,120 --> 00:37:34,239 Speaker 1: I've got to go out and compete for dollars every day, 755 00:37:34,280 --> 00:37:36,000 Speaker 1: and you've got to go out and compete for dollars 756 00:37:36,040 --> 00:37:38,920 Speaker 1: every day, what now, what I don't have time to do? 757 00:37:39,400 --> 00:37:47,280 Speaker 1: Overthrow the government? Yep, I get it. Um, And so um, 758 00:37:47,320 --> 00:37:50,879 Speaker 1: I get why this system is where the system is. Um, 759 00:37:50,920 --> 00:37:52,919 Speaker 1: it's just not the system that it seems like it's 760 00:37:52,960 --> 00:37:55,120 Speaker 1: the best for human kind. And and going back to 761 00:37:55,560 --> 00:37:59,640 Speaker 1: a very old example of this biblical example, Uh, the 762 00:38:00,120 --> 00:38:02,399 Speaker 1: Israelites lived under the under the Pharaoh, and he looked 763 00:38:02,400 --> 00:38:04,120 Speaker 1: out and said, oh, there's way too many of them. 764 00:38:04,120 --> 00:38:07,600 Speaker 1: What are we gonna do. I have an idea. Let's 765 00:38:07,600 --> 00:38:09,799 Speaker 1: turn them into slaves and work them so hard they'll 766 00:38:09,800 --> 00:38:12,880 Speaker 1: never have time to overthrow us. That this was thousands 767 00:38:12,880 --> 00:38:14,680 Speaker 1: of years ago they said this, So so it's been 768 00:38:14,719 --> 00:38:17,960 Speaker 1: that way ever since. And that is a good conversation 769 00:38:18,000 --> 00:38:20,200 Speaker 1: that I would love to dig into into that rabbit hole. 770 00:38:20,440 --> 00:38:21,960 Speaker 1: But I know we're running short on time and so 771 00:38:22,040 --> 00:38:24,279 Speaker 1: we don't have time to go down that whole rabbit hole. 772 00:38:24,360 --> 00:38:26,479 Speaker 1: But um, you've definitely give us enough of a taste, 773 00:38:26,480 --> 00:38:27,800 Speaker 1: and maybe we'll have to have you back on for 774 00:38:27,840 --> 00:38:29,480 Speaker 1: a talk on that. What I do want to talk 775 00:38:29,520 --> 00:38:33,399 Speaker 1: about before we run out of time is, um, is 776 00:38:33,840 --> 00:38:37,600 Speaker 1: where we're going and how the average person should be 777 00:38:37,640 --> 00:38:39,560 Speaker 1: thinking about this or what they should be paying attention 778 00:38:39,560 --> 00:38:41,920 Speaker 1: to to navigate this. So, um, if we've been in 779 00:38:41,960 --> 00:38:46,879 Speaker 1: a downward deflationary path for the last forty years, um, 780 00:38:47,280 --> 00:38:52,680 Speaker 1: we're probably gonna have a more different disinflationary period. Uh. 781 00:38:52,680 --> 00:38:55,160 Speaker 1: And and there's a very good chance we might have 782 00:38:55,239 --> 00:38:58,040 Speaker 1: even more maybe even a rap more rapid rate of 783 00:38:58,120 --> 00:39:01,640 Speaker 1: disinflation in the near future. Um. How does somebody think 784 00:39:01,680 --> 00:39:06,400 Speaker 1: about that? What are they watching? How do they navigate that? Yeah? 785 00:39:06,640 --> 00:39:10,160 Speaker 1: I think the risk now is the again we're gonna 786 00:39:10,200 --> 00:39:12,560 Speaker 1: have to use the consumer price index as the barometer 787 00:39:12,719 --> 00:39:16,040 Speaker 1: because it is the baramter. Is it's running at such 788 00:39:16,080 --> 00:39:17,920 Speaker 1: a low rate that the risk is now we're going 789 00:39:17,960 --> 00:39:22,000 Speaker 1: to get outright deflation. And the problem is, if you're 790 00:39:22,040 --> 00:39:25,080 Speaker 1: in debt, deflation is your your biggest enemy, because now 791 00:39:25,080 --> 00:39:27,160 Speaker 1: all of a sudden, there's even less money for you 792 00:39:27,200 --> 00:39:29,399 Speaker 1: to pay on your debt. So unless you're really good 793 00:39:29,400 --> 00:39:32,160 Speaker 1: at going out and get in dollars, it gets really difficult. 794 00:39:32,239 --> 00:39:34,720 Speaker 1: And then you've got this whole game and musical chairs 795 00:39:34,760 --> 00:39:38,480 Speaker 1: being played under a deflation scenario where more people are 796 00:39:38,920 --> 00:39:41,160 Speaker 1: not having chairs to sit in at some point, so 797 00:39:41,200 --> 00:39:44,719 Speaker 1: they lose their homes, they lose their businesses, lose everything. Now, 798 00:39:44,800 --> 00:39:48,360 Speaker 1: if you're a saver, if you've got money and you 799 00:39:48,520 --> 00:39:51,200 Speaker 1: and you've been waiting for opportunities, deflation is your best 800 00:39:51,239 --> 00:39:54,480 Speaker 1: friend because as soon as asset prices start collapsing, now 801 00:39:54,480 --> 00:39:56,759 Speaker 1: you're gonna go out and buy it. The problem is, 802 00:39:56,920 --> 00:39:59,120 Speaker 1: not many people are in that position, and if you 803 00:39:59,160 --> 00:40:01,719 Speaker 1: look historically, savers are the ones who get rich through 804 00:40:01,719 --> 00:40:04,879 Speaker 1: recessions by buying up all these cheap assets. But that's 805 00:40:04,960 --> 00:40:08,279 Speaker 1: what will likely happen is we I expect that even 806 00:40:08,280 --> 00:40:09,840 Speaker 1: though we're in the middle of a recession now and 807 00:40:09,880 --> 00:40:12,360 Speaker 1: it doesn't appear to be that we are uh, it 808 00:40:12,800 --> 00:40:15,399 Speaker 1: is going to get worse. There will be a deflationary shock. 809 00:40:15,520 --> 00:40:18,240 Speaker 1: We will see a repeat of the Great Financial Crisis. 810 00:40:18,280 --> 00:40:21,479 Speaker 1: It will most likely be worse. What will happen after 811 00:40:21,520 --> 00:40:23,960 Speaker 1: that is anybody's guests. I'm sure the federal do a 812 00:40:23,960 --> 00:40:25,600 Speaker 1: lot of things and come up with new things that 813 00:40:25,640 --> 00:40:28,560 Speaker 1: we've never heard of. But the real long term challenges 814 00:40:28,640 --> 00:40:31,560 Speaker 1: how are they going to create inflation? How we're going 815 00:40:31,640 --> 00:40:34,200 Speaker 1: to get money out in the economy when it's actually 816 00:40:34,320 --> 00:40:37,440 Speaker 1: the system isn't working at all. Yeah, I'd like to 817 00:40:37,480 --> 00:40:41,000 Speaker 1: ask you about gold. So with gold is typically you 818 00:40:41,000 --> 00:40:44,440 Speaker 1: would think of it being good in an inflationary environment, right, um, 819 00:40:44,480 --> 00:40:48,160 Speaker 1: And that's kind of traditionally been a hedge for inflation. UM. 820 00:40:48,200 --> 00:40:51,399 Speaker 1: Today gold has been doing really well. Um. I think 821 00:40:51,400 --> 00:40:54,040 Speaker 1: people are expecting inflation, but we're probably gonna end up 822 00:40:54,040 --> 00:40:57,560 Speaker 1: with deflation. UM. To two parts to this gold question. 823 00:40:57,600 --> 00:41:00,560 Speaker 1: I guess the first part being why. And it looks 824 00:41:00,560 --> 00:41:04,279 Speaker 1: like there's way more UM fundamental reasons why gold could 825 00:41:04,280 --> 00:41:07,440 Speaker 1: take off today than just inflation. So, for example, interest 826 00:41:07,520 --> 00:41:10,960 Speaker 1: rates are at zero or negative, why not just hold gold? Um? 827 00:41:11,080 --> 00:41:13,799 Speaker 1: If currencies collapse, why not hold gold? And so those 828 00:41:13,800 --> 00:41:17,840 Speaker 1: are non inflation based UM reasons to own golds. I 829 00:41:17,880 --> 00:41:20,680 Speaker 1: guess first, what do you think about that? Yeah? So 830 00:41:20,760 --> 00:41:23,880 Speaker 1: I'm I'm sure to embarrass long term bullish on gold, 831 00:41:24,120 --> 00:41:27,120 Speaker 1: and yeah, in in the short term people will so 832 00:41:27,120 --> 00:41:29,680 Speaker 1: so why are people bidding gold up? And you look 833 00:41:29,719 --> 00:41:32,360 Speaker 1: at the same you can you look at like say bitcoin, 834 00:41:32,400 --> 00:41:34,880 Speaker 1: there's a lot of similarities to that and tech stocks. 835 00:41:35,600 --> 00:41:38,480 Speaker 1: Why is everyone doing They really believe inflation is coming now. 836 00:41:38,640 --> 00:41:41,200 Speaker 1: They actually part of their belief is the dollar is 837 00:41:41,200 --> 00:41:45,200 Speaker 1: going to lose the value because somehow, some way, all 838 00:41:45,280 --> 00:41:47,320 Speaker 1: this stuff the fet is doing and all the stimulus 839 00:41:47,400 --> 00:41:50,600 Speaker 1: that the government is doing is somehow going to magically 840 00:41:50,600 --> 00:41:54,600 Speaker 1: turn into an explosion of dollars. And so they're just 841 00:41:54,719 --> 00:41:58,520 Speaker 1: lining up early to play the game. The problem is 842 00:41:58,560 --> 00:42:02,320 Speaker 1: when it doesn't happen. Now they're in these inflation assets, 843 00:42:02,480 --> 00:42:05,719 Speaker 1: and you know, there's this argument that gold does really 844 00:42:05,719 --> 00:42:07,759 Speaker 1: well during inflation. But here's the problem. If I have 845 00:42:07,880 --> 00:42:09,920 Speaker 1: less money and you have less money, and everyone has 846 00:42:10,000 --> 00:42:13,399 Speaker 1: less money, how does golden to hold his value? Now. 847 00:42:13,440 --> 00:42:16,239 Speaker 1: I know there's arguments that as yes, you can go 848 00:42:16,320 --> 00:42:18,759 Speaker 1: up in inflation and can go up into deflation. The 849 00:42:18,800 --> 00:42:21,960 Speaker 1: reality is it's more likely to have a pull down, 850 00:42:23,320 --> 00:42:26,359 Speaker 1: a pretty quick move down like we saw in late 851 00:42:26,360 --> 00:42:30,280 Speaker 1: two thousand and eight, before it takes that bigger move higher. 852 00:42:30,600 --> 00:42:32,000 Speaker 1: That's kind of the way I look and I know 853 00:42:32,040 --> 00:42:34,600 Speaker 1: I could be wrong about that, and I'm it's one 854 00:42:34,600 --> 00:42:36,319 Speaker 1: of the most critical things when wait till you read 855 00:42:36,360 --> 00:42:38,279 Speaker 1: the comments of the show, everybody's gonna be like, man, 856 00:42:38,280 --> 00:42:40,719 Speaker 1: I got a complete idiot because you think that. But 857 00:42:40,840 --> 00:42:43,080 Speaker 1: that's just kind of my view is you know, the 858 00:42:43,120 --> 00:42:45,920 Speaker 1: dollar isn't going to zero and it's not likely to 859 00:42:45,920 --> 00:42:47,960 Speaker 1: go down. The dollar is going to rally, and I 860 00:42:47,960 --> 00:42:50,680 Speaker 1: think that's the key part people are missing. We're gonna 861 00:42:50,680 --> 00:42:54,000 Speaker 1: see the dollar strengthen, which will bring consumer prices down 862 00:42:54,080 --> 00:42:57,160 Speaker 1: because we're in a we're an important country and when 863 00:42:57,160 --> 00:43:01,640 Speaker 1: the dollar rises, generally you see old go down. That's 864 00:43:01,680 --> 00:43:04,200 Speaker 1: what that's kind of my base cases. The dollar is 865 00:43:04,239 --> 00:43:06,640 Speaker 1: going to tell us everything I think. I think it 866 00:43:06,680 --> 00:43:09,200 Speaker 1: comes down to when you talk about the dollar gatting stronger, 867 00:43:09,239 --> 00:43:13,359 Speaker 1: a weaker dollar went up or down compared to what right, 868 00:43:13,400 --> 00:43:15,600 Speaker 1: So then I think you have that like so gold, 869 00:43:16,280 --> 00:43:17,719 Speaker 1: I mean, yes, you're right. In two thousand and eight, 870 00:43:17,719 --> 00:43:21,160 Speaker 1: it took dip stocks from down, gold rebounded in seven months. 871 00:43:21,480 --> 00:43:24,480 Speaker 1: Stocks rebound in like six years. So because and and 872 00:43:24,520 --> 00:43:26,279 Speaker 1: maybe you know, next year, if we have a big crash, 873 00:43:26,320 --> 00:43:28,799 Speaker 1: we'll kind of see something similar. But the thing with 874 00:43:28,960 --> 00:43:31,279 Speaker 1: gold is let's say it goes down. Say it say 875 00:43:31,320 --> 00:43:35,520 Speaker 1: it collapses to a thousand dollars with deflation. But it's 876 00:43:35,520 --> 00:43:38,560 Speaker 1: not about being priced in dollars. What's the purchasing power 877 00:43:38,600 --> 00:43:40,959 Speaker 1: of it? So did the purchasing power of gold stay 878 00:43:41,000 --> 00:43:43,160 Speaker 1: the same or even go up even though the US 879 00:43:43,239 --> 00:43:47,319 Speaker 1: dollar value of it went down? Do you look in 880 00:43:47,400 --> 00:43:49,960 Speaker 1: terms of purchasing power value as opposed to just like 881 00:43:50,000 --> 00:43:53,160 Speaker 1: denominating dollar value. It should, but I think more people 882 00:43:53,239 --> 00:43:56,120 Speaker 1: buy it as an inflation head. So you know, but 883 00:43:56,239 --> 00:43:58,840 Speaker 1: the idea is that you know, a loaf of bread, 884 00:43:58,960 --> 00:44:00,960 Speaker 1: you know, so much gold little for bread, then that 885 00:44:01,320 --> 00:44:04,360 Speaker 1: buys it now, and that that is a valid argument. 886 00:44:04,480 --> 00:44:07,120 Speaker 1: And in a deflationary environment, when there's less money, well 887 00:44:07,120 --> 00:44:11,400 Speaker 1: obviously the value of consumer goods will drop, which is 888 00:44:11,480 --> 00:44:13,000 Speaker 1: kind of where I come back to the fact that 889 00:44:13,320 --> 00:44:15,920 Speaker 1: it does make sense that gold is likely to pull back. 890 00:44:16,000 --> 00:44:18,399 Speaker 1: Doesn't mean it's going to zero now. It just means 891 00:44:18,440 --> 00:44:20,879 Speaker 1: that if you're looking to be in it, there may 892 00:44:20,880 --> 00:44:23,839 Speaker 1: be another opportunity to buy at lower value. And if 893 00:44:23,880 --> 00:44:28,080 Speaker 1: you missed sure, all right, well, um, we'll wrap it 894 00:44:28,160 --> 00:44:30,320 Speaker 1: up with one more question and we'll put you a 895 00:44:30,360 --> 00:44:32,440 Speaker 1: little bit more in the hot seat. Yea with gold 896 00:44:32,480 --> 00:44:34,640 Speaker 1: you were nice enough to say short term barrassed, long 897 00:44:34,719 --> 00:44:39,399 Speaker 1: term bullish. Um, I'm just curious what your short, more, 898 00:44:39,520 --> 00:44:42,239 Speaker 1: shorter term, and longer term outlook is just on the 899 00:44:42,320 --> 00:44:46,320 Speaker 1: overall market itself. So obviously, you know, we know timing 900 00:44:46,360 --> 00:44:50,000 Speaker 1: markets is impossible, but from what you see, UM, I mean, 901 00:44:50,160 --> 00:44:52,440 Speaker 1: we're we've talked about kind of having diminishing returns and 902 00:44:52,480 --> 00:44:54,839 Speaker 1: the game can't go forever and things like that. Um, 903 00:44:55,120 --> 00:44:57,960 Speaker 1: do you think that you know, this kind of starts 904 00:44:58,000 --> 00:45:01,239 Speaker 1: to end there, maybe has a pretty bad hiccup in 905 00:45:01,280 --> 00:45:04,480 Speaker 1: the next year, and then they have this crazy intervention 906 00:45:04,520 --> 00:45:06,239 Speaker 1: which then shoots up, and what are you thinking for 907 00:45:06,280 --> 00:45:09,600 Speaker 1: the next year or two three years. I think things 908 00:45:09,600 --> 00:45:14,440 Speaker 1: start to get really interesting in say thirties some days, 909 00:45:14,680 --> 00:45:16,680 Speaker 1: And mainly it's because I'm watching the dollar. I think 910 00:45:16,680 --> 00:45:20,000 Speaker 1: the dollars is getting close to make it a move higher. 911 00:45:20,080 --> 00:45:24,000 Speaker 1: When it does, then the whole system starts to a ravel. So, UM, 912 00:45:24,040 --> 00:45:26,640 Speaker 1: I think we're pretty close to see before the election. 913 00:45:26,760 --> 00:45:29,759 Speaker 1: Something big happens before the election. Yeah, And and it's 914 00:45:29,800 --> 00:45:31,759 Speaker 1: not in my view as an election base at all. 915 00:45:31,840 --> 00:45:34,000 Speaker 1: It's just strictly I'm looking at the dollar, and I 916 00:45:34,040 --> 00:45:37,560 Speaker 1: know the dollar is gonna rally. It's it's consolidating, and 917 00:45:37,600 --> 00:45:39,640 Speaker 1: I think it's got a little further to go. And 918 00:45:39,680 --> 00:45:42,640 Speaker 1: then once it ends that and heads higher, then the 919 00:45:43,040 --> 00:45:45,919 Speaker 1: real fund begins because now we'll have low interest rates, 920 00:45:45,920 --> 00:45:49,480 Speaker 1: which are tight financial conditions, will have the banks not 921 00:45:49,560 --> 00:45:51,759 Speaker 1: wanting to lend, that's type financial conditions. And now we 922 00:45:51,840 --> 00:45:54,920 Speaker 1: get the third whammy, we get the dollar rallying, and 923 00:45:54,920 --> 00:45:57,439 Speaker 1: then the system just can't handle that at all. Yeah, 924 00:45:57,840 --> 00:46:00,520 Speaker 1: all right, Well it's gonna be interesting see how that 925 00:46:00,560 --> 00:46:03,120 Speaker 1: plays out. The beauty is, none of us have a 926 00:46:03,120 --> 00:46:04,960 Speaker 1: crystal ball, and none of us know, and we all 927 00:46:05,000 --> 00:46:07,240 Speaker 1: have our best guesses and the way that we interpret 928 00:46:07,320 --> 00:46:09,319 Speaker 1: the cards I guess, so to speak. I've seen I've 929 00:46:09,360 --> 00:46:12,719 Speaker 1: seen many technical analysis uh analyst um saying that the 930 00:46:12,760 --> 00:46:15,879 Speaker 1: Dixie looks weak and it's ready for another job. So, yeah, 931 00:46:16,440 --> 00:46:21,759 Speaker 1: who knows. I disagree with them, but well, I guess 932 00:46:21,800 --> 00:46:24,719 Speaker 1: we'll find out. Um. I'm very much in the minority 933 00:46:24,760 --> 00:46:28,880 Speaker 1: on that view, but we'll see who's right in the end. Yeah, yeah, yeah, Well, Stephen, 934 00:46:28,920 --> 00:46:30,719 Speaker 1: it's been such a great time talking to you, such 935 00:46:30,719 --> 00:46:33,279 Speaker 1: a great conversation. Maybe we'll dive into that rabbit hole 936 00:46:33,280 --> 00:46:36,400 Speaker 1: another time. But I want to make sure that everybody 937 00:46:36,400 --> 00:46:38,319 Speaker 1: goes and follows your YouTube channels. I'm gonna make sure 938 00:46:38,320 --> 00:46:39,719 Speaker 1: to link that down below WI try and get you 939 00:46:39,760 --> 00:46:42,880 Speaker 1: a bunch more subscribers, um anywhere else that anyone should 940 00:46:42,880 --> 00:46:45,239 Speaker 1: follow you. Yeah, I appreciate that. So three days a 941 00:46:45,239 --> 00:46:47,239 Speaker 1: week I do kind of a macro show. We look 942 00:46:47,280 --> 00:46:49,440 Speaker 1: at the economic data, and right now it's very much 943 00:46:49,480 --> 00:46:52,920 Speaker 1: bond theme because I'm a self annointed Bond king and 944 00:46:53,080 --> 00:46:56,080 Speaker 1: Bond is Mackero, so that's a great place to find me. 945 00:46:56,120 --> 00:46:58,080 Speaker 1: And we also do a Sunday chart show for those 946 00:46:58,120 --> 00:47:00,480 Speaker 1: who are more looking for the technical analysis US. And 947 00:47:00,480 --> 00:47:03,040 Speaker 1: then you can also find me on Twitter at uh 948 00:47:03,280 --> 00:47:06,600 Speaker 1: even though it's it's mispronounced. Its at Metra Stephen m 949 00:47:06,600 --> 00:47:10,319 Speaker 1: E t r E Stephen, even though it's actually fan meter. 950 00:47:10,520 --> 00:47:13,520 Speaker 1: So there you go. You're your fans will have fun 951 00:47:13,560 --> 00:47:17,040 Speaker 1: with that, all right, Stephen, thank you so much. Mark 952 00:47:17,120 --> 00:47:18,879 Speaker 1: has been a real pleasure to meet you, and thank 953 00:47:18,920 --> 00:47:22,879 Speaker 1: you for having me on your show. All right. Yeah,