Welcome to another edition of the Chicks on the Right podcast, where we talk
to our friend and sponsor of the show, Zach Abraham from Bulwart Capital Management,
about all the craziness going on in the world in the economy right now.
And one of the crazy things that's going on, Zach is that McDonald's
Starbucks home depot they have all announced like way lower than expectation results and Red
Lobster filing for bankruptcy. What do you make of this and who is net
done done? Yeah, yeah, you know it. Really it's harder to
predict that in this environment than I think any other environment before, because it
really is a tale of two cities. Right If you have exposure to you
know, federal spending in any way, shape or form, you're probably in
great shape. But I mean, you could go down through the Russell two
thousand index right now and you could just look at a balance sheet and I
could look at the term expirations, so like look at when their debt's expiring,
and if their debt a lot of those companies, you can look at
it and go if they're debt expires anytime in the next six today months,
if rates are anywhere near here they're done. Oh my god. Yeah,
So I mean it's bad. Yeah, it is, it is, And
I don't have any names off the top of my head, but you just
have a lot of there's a lot and this is always this was always gonna
happen. When you have a period of sustained low interest rates, you're gonna
obviously wind up compiling a lot of debt and a lot of weak things that
should go under don't, right, And so it is bad. And when
I say should go under, I don't like it when companies default, But
companies that are not producing enough value, right, which an easy way to
tell that is if they can't pay to service their own debt. Right,
it means that they're whatever products they're offering aren't bringing them a value to the
marketplace. And so getting rid of the weaker ones is actually good for the
overall environment. Right, It's like kind of liked. And that's one of
the deleterious impacts of low interest rates is it allows weak to live, which
sucks away from productive companies, right, adds unneeded you know, wage competition
and different things like that. So it's it's not all bad. But when
you sit back and take a look at it. You know we were talking
about in our investment meeting this morning. You've got growth cryptal or clicking along
right now at about three percent. When you consider the deficits we're running,
that's actually really good. Yeah, it's like compare and contrast these companies though,
that are going to like crash and burn to our government, which will
never they'll never understand what that's like. Like I feel start like I feel
bad because I'm like, oh, Red Lobster, you know, it's like
and that sucks that they are. They're going bankrupt, But that's it's a
terrible thing because we grew up with that name, right, It's one of
those things that we grew up with. But at the same time, I'm
like, they're going bankrupt because as they couldn't hack it in this market,
whereas if you can parent, contrast that to our government, which just keeps
going, well, we'll just take more money from people who need to pay
their fair share. I wish people would get the comparison, you know what
I mean, because they'll never understand what it's like to be in there.
The government won't. They'll never understand what it's like to be in the free
market and I wish that our government would There's a part of me that's like,
I wish they would understand what it's like to crash and burn, because
then maybe they'd stop taking money from all of us, you know what I
mean, and doing it at a rate that just keeps going like this.
You know, yeah, well, I mean. The other thing that's really
interesting too, is that when you're printing as much as we are, right,
why why are you talking about raising taxes? You know what I mean,
canny not talking about it, bragging about it, right, yeah,
waking about raising taxes because you can't control your spending and you're printing. And
this is one of the things we were talking about last week. Does a
government need to bring in tax revenue? Of course, okay, But when
you go off the point where you're no longer linked to a commodity like gold,
you're not a old back currency anymore, and you're a fiat currency,
the analogy we use. So we went off the gold standard in seventy one,
but there's so much muscle memory. Nobody in seventy one really realized what
that meant, right, because no major power had ever been completely fiat before.
Right, certainly know what was considered a reserve currency. It was always
backed by gold, so nobody really knew. And so the analogy we've used
is sort of like an elephant. If you take a baby elephant and you
put a cuff round its leg and you steak put a steak in the ground,
you can use that as a tether, right, because baby elephant isn't
strong enough to pull the steak out of the ground. Well, by the
time the elephants an adult, you can still use that steak to control them,
Like, they'll stay there because it's trained in their head. Right.
So even though we went off the gold standard in seventy one, people were
still worried about deficits. Guys still went out of office i e. Jimmy
Carter for running up inflation and not being careful about spending. Right, it's
still mattered. Well, what's interesting about the last ten years is the elephant
pulled the stake out of it, right, so they know that they they're
completely non constrained now, right, and they're gonna spend and spend and they're
gonna print, they're gonna fill in together. Well, if that's what you're
doing, why are you? Why are you? Why are you charging taxes
anyway, right, whatever the deficit is, you're just gonna fill in the
gap with printed money. So why are we still paying taxes? Such a
great point. Yes, you know, and this is this is why I'm
telling people like, brace yourself. It's gonna get way crazier because once that
elephant, right, what is the elephant not done yet? He hasn't knocked
down the circus, but he's going to. You can find out lots of
stuff like this from your seminars that you do and from your website and from
your radio show. Tell people how to find you. Now you can go
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