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People's belief in something as suddenly as
questioned, it's a false belief they have.

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And it's my opinion this is I'm
guessing it'll be inflation. We do

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not believe in any stretch of MEAs
inflation has been beaten, and specifically in

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services inflation. And if that's the
case, then when the FED says higher

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for longer, it could be much
longer, or it could be have to

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take rates up again a little higher, not dramatically, but a little higher.

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Just anything in that could really be
a trigger. You are listening to

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00:00:31,960 --> 00:00:37,479
Carrie. Let'sa's Financial Survival Network where
you get valuable information you just can't find

9
00:00:37,560 --> 00:00:43,640
anywhere else to thrive in today's trying
times. You need the Financial Survival Network

10
00:00:43,920 --> 00:00:49,159
now more than ever. Go to
Financial Survivalnetwork dot com and get your free

11
00:00:49,240 --> 00:00:59,200
newsletter and gift. Financial Survival Network
now more than ever, And welcome.

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00:00:59,439 --> 00:01:03,320
You are listening to and watching the
Financial Survival Network. I'm your host,

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00:01:03,439 --> 00:01:07,439
Carrie Lutz. Hey, if you're
on the podcast, we're attempting to add

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a PDF file. If you're watching, we'll show you the PDF file.

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I'm still getting over this. I
lid to phenomena in medical terms. It's

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called a Schalasian and it's where you
have a clogged land and the oil builds

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up. And no, I didn't
get into a fight. In case that's

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what you're thinking. I've tried to. I almost got into a fight a

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couple of weeks ago, physical at
publics, but luckily didn't come down to

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that. I don't know how I
would have handled it. But we're in

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a fight here, all of us, an economic fight, whether you realize

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it or not. It's what you
call Gordon the trifecta. Gordon too long

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and it's great to have you back. So the trifecta. What is the

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trifecta? I got absolutely Carrie.
By the way, you remind me of

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high school. When I look at
you, I think I had a BA

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come home few times looking like that
myself. Anyway, we digress. Yeah.

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Here I set these couple of charts
to you because I thought it was

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a good place for us to start
the trifecta. This first chart up here

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is is a log chart and going
you know, a long ways back,

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and you see any time is in
should share this. I'm going to share

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this on my screen right now.
Give me one moment, I can find

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it all right, So Gordon,
we've got the trifecta here. I've got

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your your uh slides up on the
screen. Can you see them there?

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I can. That's uh, the
next the next one, the next one.

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Yeah, that's the that's the trifecta
that I'm referring to. Okay,

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Well, a trifecta when you're at
the track for those of you not in

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the new that is when you pick
the first, second, and third orsus

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in a race, and it usually
has large payoffs. But here this trifecta,

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I think maybe not such a good
payoff. No, it's going to

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be a which side of the table
you're on on on this way. But

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the trifect here what this a long
term chat going back to the nineteen fifties,

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you know of the S and P. And you'll see it forty two

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percent of the time it actually traded
with since ninety eight forty eight within five

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percent of all time highs. And
then you can see these little coloring lines

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along is sort of in orange,
and then you see three boxes. And

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so what I did, what I
distilled from from our research is is ours

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three times where we've actually had ourselves
within five percent of all time, historical

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points in time, and that's that's
an interesting point. But what's important is

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once you once you get that,
you get into what the trifect is,

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and that is in all three of
these, and the three being when we

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you know, back in the seventies, same inflationary kinds of issues. You

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see a double top there in the
first box, and the lower the next

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week we had the same thing.
You see a double top. That was

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where we had the dot com bubble
leading to the financial crisis, the second

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hump in there, and then today
where we're at where we're putting in a

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second top. But what's common in
this and then it's what's behind this.

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It's important is that you get any
every one of those. You had extreme

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narrowing of the market. So what
happens is the market went up rapidly based

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on fewer and fewer stocks. So
back in the first box there in the

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seventies, and you carry you probably
remember this, I do. We created

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the nifty to fifty and it was
fifty big comps. We were going global.

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It was just that was where it
was, and you had to be

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in those fifty stocks. As you
remember, during the dot com bubble,

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we had the same that wasn't bet
narrower depth, but still narrowed down,

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and we were into the key Internet
box like Cisco and World common these kinds

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of corporations. Today the breath is
as narrow as we've ever had it.

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We have the Magnificent seven, and
frankly since in the last sixty days it's

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been simply in non ideot in it. But that this massive narrowing of breath

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is the first thing that's common only
to these three of boxes. And it's

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not just the narrowing that's himself is
important, but it's that they go parabolic

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and so as it takes a while
for them to build up, but it's

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when they go parabolic that you you
really start to see where this prefectus starts

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to bring itself in. That's the
first one of the three. The second

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and I alluded to earlier they all
have double tops, and that is you

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get into this fomo and fear,
the fear of missing out and buying the

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dips and the excitement, and everybody
gets into the market, sells off.

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But it takes a second big push
up to to really start to take that

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out of the market. And then
so it can actually start to even potentially

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capitulate. Still takes a bit of
time. And and the third one is

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in every case at least the second
hump was a big recession, a hard

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recession. And so if we get
a hard recession or just a recession period,

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I know what the market thinks now. But if we get our it,

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we've all dropped down to that black
line historically, and et cetera.

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We go to the next chart,
it really kind of brings it a little

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further Herey, it won't rob me
any at any point here as we're talking.

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This is this this of the bottom
fifty of the S and P five

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and you can see where it gets
narrow and narrower all the way down.

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But what's interesting on the bottom,
even though it's is now that the narrowness

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is so so tight, as I
said the Magnificent seven, that that we

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went completely parabolic in that in that
point alone, and you can see from

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that line it's I thought there was
something interesting that they would all connect like

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that, and it's I don't know
what the computers are reading into it,

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but it's an amazing that it is
working out like that. It's a little

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scary going to the next chart if
we could this is this is this is

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something we've it's an interesting chart and
that we've been using this chart for I

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guess for five five years now before
COVID, and you can see where we're

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going parabolic at this point in time. But we drew we drew this chart

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where there's a dotted red line that's
going parabolic and you can see inside the

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bottom red one. We drew that, which was really and you can see

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it touching the loaves and we it
was allowing us to see that we when

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we came out of COVID, where
we thought we were going, and so

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it really was beautiful for hi,
I'm just talking about the dot line,

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dot line, and we thought we'd
reaching the point. It hadn't quite went

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parablem Then it dropped and we fell
down. And so what we were forced

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to do we said, well,
I guess that was the end of that.

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We don't playing loud is. We
had to redraw it hang around with

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the COVID. You see it's redrawn
with touching COVID, and it started to

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tell us that at the end of
the next cycle, and you can see

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cycles along the bottom of the chart, a little rounded humps the next time

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we're in a cycle top, this
thing would be on the vertical red line.

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We could go parabolic again. And
we drew these dotted black lines and

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we came to fifty one eighty six
and we said, this is absurd.

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We didn't believe it, we really
didn't, but we we had it there.

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We put it aside at fifty one
eighty six. Well, last week,

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Carrie, it hit fifty one eighty
six eighty seven and immediately pulled back.

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I don't know that tells us anything, but it does tell us that

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we're at a very major junction in
the world right now in terms of the

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terms of markets. And I cautioned
people right now to really be careful if

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this is the time to take risk
off the table, because that last five

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percent can be an absolute, absolute
killer. You go to the next chart.

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Hey, let's not forget what gold
is doing now in bitcoin, and

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it's doing it because of this bitcoin
and gold they're doing it because of this

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while a number of reasons that they're
doing it and big time, and we

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may have got some time we'll love
to talk about gold specifically, but this

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is another chart that this big dome
top, which was a third box,

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and you can see the We didn't
draw the dome on the down here a

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little lower at the dot com further
to the left, but we've drawn this

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don't cop and we felt that we
would come up and touch that. Because

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tops are a process, they take
time, and this is a generational top,

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we believe, and therefore it would
expect it to be two or three

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years in the making, which is
what we're going through. We think we're

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very close to it and we will
probably if thing's unfold and there's a big

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caveat I'll get to in a second. We should rock it on to the

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bottom of that black line and that
channel going all the way back to the

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financial crisis, and we're not going
to correct that, but we're going to

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correct a big part, probably back
to the pre COVID high before we went

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into COVID. We think we'll be
corrected, and then from there we will

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see what happens. But even with
some moving around, it shopped down.

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You can drop and you see the
divergence here at the bottom, which as

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good sign as anyone. And we
got divergences which everywhere so a long winter.

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But a lot of this is just
is really it's telling us get out

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00:10:43,799 --> 00:10:46,360
of the equities right now short term, even though it's going to go up,

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the risk risk is too much.
And if you flip to the next

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chart, we will have all sorts
of charts go behind it. But the

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next one. Sure. Remember what
Bernard Baruch said, I got rich make

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it, letting the other guy make
the last ten percent exactly that this is

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00:11:01,279 --> 00:11:07,879
a classic period that we're in.
I'm a big fan of John Houseman from

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00:11:07,919 --> 00:11:13,320
a technical or from a fundamental standpoint. There's phenomenal work. And when he

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00:11:13,360 --> 00:11:16,000
puts out a charge like this from
a fundament I'm not talking about technicals,

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00:11:16,000 --> 00:11:20,639
I'm not talking about global mackerel,
which my comments have been generally at so

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00:11:20,759 --> 00:11:26,440
far. He's all his signals are
saying there's something here right now in this

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00:11:26,480 --> 00:11:28,960
period of time. This doesn't mean
this market's going to sell off tomorrow.

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00:11:30,240 --> 00:11:33,919
It could drag out for it.
But I don't know what the period's going

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00:11:33,960 --> 00:11:35,879
to be. But it does tell
me that what's going to trigger it has

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to be a shock that comes to
the market out of nowhere, something that's

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00:11:39,399 --> 00:11:45,600
unexpected, because right now it'll run
until something hits it. I felt I

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00:11:45,639 --> 00:11:48,960
went through that in the Dot com
bubble. I saw it back in eighty

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00:11:50,039 --> 00:11:52,960
six. It takes a shock,
and there are some things that could shock

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00:11:52,000 --> 00:11:56,679
the market. That's when people's belief
in something is suddenly as questioned, it's

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00:11:56,720 --> 00:12:01,600
a false belief they have. It's
my opinion. This is I'm guessing it'll

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00:12:01,639 --> 00:12:07,159
be inflation. We do not believe
in any stretch and measure inflation has been

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00:12:07,159 --> 00:12:11,840
beaten and specifically in services inflation.
And if that's the case, then when

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00:12:11,840 --> 00:12:16,399
the Fed says higher for longer,
it could be much longer, or it

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00:12:16,440 --> 00:12:20,279
could be have to take rates up
again a little higher, not not dramatically,

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but a little higher. Just anything
in that could really be a trigger.

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That didn't mean to go on there
carry any questions on what jumps out

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to you? Uh not really.
You know it's looking pretty bubblicious out there.

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Well we listened to. The next
chart is something that really explains why

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00:12:37,840 --> 00:12:43,120
is the amount the liquidity that we
have right now in the market is just

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00:12:43,360 --> 00:12:46,840
a model. You pump bout six
point seven trillion dollars and it goes out

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through into the market, through the
through the gen the Treasury's general account,

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00:12:50,840 --> 00:12:54,240
where we where they control where it's
going. Read some of these bills,

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these bills like the Inflation Reduction Act, like it almost gives them carte blanche

174
00:13:01,120 --> 00:13:03,679
to send the money wherever they want, and it's being targeted. And that's

175
00:13:03,720 --> 00:13:09,360
just a but behind it. The
this church shows us has showed where stage

176
00:13:09,399 --> 00:13:13,519
one at the top and stage two
at the bottom, where we watch Yellen

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00:13:13,600 --> 00:13:18,879
all the time, we don't how
we it's what Yellen's doing with the general

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00:13:18,919 --> 00:13:24,840
account and for since we got the
cap on the cat, it really wasn't

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00:13:24,840 --> 00:13:28,639
but the debt crisis. When we
had that discussion last June, what she

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00:13:28,840 --> 00:13:33,720
what she's been doing is is she's
grown the general account, but she's kept

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00:13:33,759 --> 00:13:39,039
she's issued at a short term duration, which pushed the the the reverse repo

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00:13:39,159 --> 00:13:43,799
market from two point seven trillion down
to around four hundred billion. And that

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00:13:43,879 --> 00:13:48,120
money has flowed right through short term
bills and out into the out into the

184
00:13:48,159 --> 00:13:52,639
market, and that's what's been keeping
it going. Now it's come all the

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00:13:52,639 --> 00:13:54,919
way down to as I said,
maybe three to four hundred billions left.

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00:13:56,120 --> 00:13:58,879
It's get it's getting. The completity
was starting to tighten. And what she

187
00:14:00,080 --> 00:14:03,720
did next is she arbitraged. I
don't mean to get too techy a book

188
00:14:03,720 --> 00:14:07,120
that some of our listeners just made
like want to know the details. She

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00:14:07,559 --> 00:14:11,799
allowed the big banks to arbitrage.
On the left here the BTFP, the

190
00:14:11,840 --> 00:14:16,879
Bank Term Funding Program, so that
the difference in spread, the big banks

191
00:14:16,879 --> 00:14:22,240
were able to pull out about sixty
billion dollars fifty two billion to be precise,

192
00:14:22,559 --> 00:14:26,799
dollars before they slammed it down.
Now that fifty two billion dollars is

193
00:14:26,919 --> 00:14:31,720
literally infinite money to the major banks, who then landed out to the hedge

194
00:14:31,720 --> 00:14:35,399
funds and some of the money market
funds who then leverage it up. There's

195
00:14:35,399 --> 00:14:37,919
about fifteen of them, and that
money and you follow the red curve goes

196
00:14:37,960 --> 00:14:43,600
back in where they now can buy
longer term and immediately she's now putting out

197
00:14:45,279 --> 00:14:46,879
or three year, five year,
seven year, and ten year money.

198
00:14:48,120 --> 00:14:52,320
And so it's almost unlimited now of
the money that she has to take us

199
00:14:52,360 --> 00:14:56,440
through this election. Here. And
as you're showing this slide here, you

200
00:14:56,480 --> 00:15:01,360
know, everybody talks about the financial
conditions tightening, lose. They never tightened

201
00:15:01,360 --> 00:15:03,279
it. Look at the green.
This is the this is the fits chart.

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00:15:03,720 --> 00:15:09,399
They've always been extremely loose in spite
of quantitative tightening. And if you

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notice on the far right, it's
starting to loosen even further. And that's

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what we've been going through. That's
at the root of what's been pushing this

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this incredible expansion and the market up
their play. It's an electioneer. We

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all know that. Any questions there
here, Kerrie, the jump, notte

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edge, No, just that it's
kind of a shell game. While the

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interest rate has gone up and now
it's stayed where it is for quite a

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00:15:33,519 --> 00:15:39,919
while. The net effect is more
money is flowing into the system. Oh,

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without question. And you know they
what people get. I think it

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confused about the banks have tightened credit. Absolutely, we tighten the credit,

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but the financial conditions are saying,
I don't worry about that. There's so

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00:15:54,639 --> 00:16:00,720
much liquidity from ten or twelve years
of quantitative easing. Ever mind six white

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00:16:00,759 --> 00:16:06,600
seven trillion that bidnomics is pumped into
the system. There's so much money it

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00:16:06,600 --> 00:16:10,159
doesn't know where to go, and
so it's willing to take And this goes

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00:16:10,200 --> 00:16:14,879
back to the original trifecta. It's
willing to take risk it ordinarly would never

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00:16:15,000 --> 00:16:19,519
take before. Yeah, well it's
uh, it's heads they win. Tells

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00:16:19,600 --> 00:16:25,759
we all lose, right, Wally, Yeah, but remember they're not buying

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00:16:26,039 --> 00:16:30,720
protection yet in the skews and that
sort of thing, but they will be

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00:16:30,200 --> 00:16:36,799
very quickly starting to protect themselves.
Well that's what they do, hey,

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00:16:36,519 --> 00:16:41,000
So that's all. The only loser
is the capitulation of the last people to

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the party, in other words,
the people that have been buying from Christmas

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00:16:45,000 --> 00:16:49,720
on that are still there. And
I just put a newsletter this morning showing

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the rate at which the money's coming
out of the high tech the mag seven

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00:16:55,879 --> 00:17:00,600
right now. And this is tip
theoretically the spart money. They just don't

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00:17:00,600 --> 00:17:03,080
want to take that. They've said, I'm taking the risk off the table.

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00:17:03,320 --> 00:17:07,680
But don't forget during the dot com
the market peaked in March, the

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00:17:07,720 --> 00:17:12,000
IDEs of March, they're right in
there. But it rebounded and came back

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00:17:12,079 --> 00:17:17,480
up at September. Then wasn't a
new hide that was then that capitulation happened.

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00:17:18,079 --> 00:17:21,799
So this may drag on for a
while, but it doesn't mean it

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00:17:21,880 --> 00:17:25,039
keeps on going. And we've kind
of stalled here right now, and I

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think there'll be some corrections and some
attempts at rally now as we go on.

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All right, our opinion, it's
sharing that with you. So the

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00:17:33,759 --> 00:17:40,400
GDP and GDI, so gross domestic
product gross domestic income. They're diverging too

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00:17:41,240 --> 00:17:45,079
big timing And for those that don't
know what GDI is gross domestic income,

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00:17:45,200 --> 00:17:52,400
it's it equals the GDP. Now
there's a slight little discrepancy for timing and

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00:17:52,640 --> 00:17:57,160
what selected, but since Bidenomics has
come in, it's exploded in terms of

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the difference. And in a double
accounting system, they're always supposed to equal.

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00:18:02,599 --> 00:18:06,599
So if you're going to the next
chart, it shows you just the

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00:18:06,640 --> 00:18:10,119
magnitude and this is the government try
and get the GDI numbers out of the

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00:18:10,119 --> 00:18:15,559
government. But anyway, this shows
you the GDI on the left and the

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00:18:15,599 --> 00:18:19,319
GDP on the right, showing you
Q three and Q two of twenty three

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00:18:19,440 --> 00:18:23,960
in the difference for example Q three
one point five revised in the GDI,

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00:18:25,680 --> 00:18:27,759
where's GDP was five percent? And
then when you do a year over the

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00:18:27,799 --> 00:18:33,519
year, how dramatic it's been.
So the economy is saying GDP is really

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00:18:33,599 --> 00:18:37,839
great, but why where's the GDI. And if you go to the next

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00:18:37,920 --> 00:18:41,200
chart, it just says it's about
printing money. It's not. We're not

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00:18:41,240 --> 00:18:45,119
creating well. Actual fact, we're
destroying well by the debt we're creating.

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00:18:45,160 --> 00:18:52,039
And this chart says on the left
is GDP on the writer's GDI. Because

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00:18:52,119 --> 00:18:55,960
GDP measures herery as you will,
well, no, and I know you

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00:18:56,039 --> 00:18:59,880
know all this. It measures expenditures, what we're spending. So that's the

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00:19:00,039 --> 00:19:03,279
money that's coming in and where it's
spent. In theory, everything that's spent

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should be some income somewhere, either
to profits, to wages. The money

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flows out, so the income's on
the right. So what's happening is inflation

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00:19:14,599 --> 00:19:18,880
is really pushing up some of the
income, but it's not really it's much

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00:19:18,960 --> 00:19:23,240
much less than the money that we're
spending on expenditures. And the reason basically

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is in the GDP formula, we
borrow money. It's called investment income.

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Then it's difference. It's because the
government has in the government spend it.

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00:19:33,240 --> 00:19:37,839
It's G for government. That's the
three elements consumption, government income. So

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00:19:37,079 --> 00:19:41,359
the government spends it, we add
it up again and then it goes as

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00:19:41,400 --> 00:19:47,720
transfer payments for social security benefits,
specific targets. That's called consumption. That

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00:19:47,839 --> 00:19:51,440
goes up again. And that's what
GI is really showing you. You're saying,

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hey, something seriously amiss here.
And remember when this was all put

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together. We were on sound money, we were on a non feit currency.

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So the possibility when we had to
settle in gold at the end of

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the year, said Pete, it's
got a equal, But when we settle

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with credit, it doesn't equal.
So the system is fundamentally lowed. But

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it's not in Wall Street's interest to
tell you that, all right, And

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you can't keep on going when you
have this way, when you're growing your

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00:20:21,839 --> 00:20:26,119
national debt against GDP at this rate, it can't sustain. And that's assuming

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00:20:26,119 --> 00:20:32,200
the GDP's reft, which means the
day of looming is much much sooner than

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we think. And I'm not trying
to be negative, I'm just being honest

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here. Yeah. And the reason, if you notice, the thirty year

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00:20:38,880 --> 00:20:45,759
bond now is tracking exactly in line
with what the credit default swap is for

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00:20:45,839 --> 00:20:48,319
the nation. So the yield on
a thirty year and it goes almost down

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00:20:48,359 --> 00:20:53,039
to the ten is mirroring the growth
in our GDS. The yield rate that's

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00:20:53,079 --> 00:20:57,720
going up as opposed to the CDs
rate for it, that says money is

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00:20:57,839 --> 00:21:03,839
really frightened about our ability to continue
to have foreigners hey for a debt.

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00:21:03,920 --> 00:21:10,079
And this goes back to your comment
Harry about bitcoin and gold. That's a

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00:21:10,160 --> 00:21:15,240
reflection of these charts you're just saying. They're saying the central banks are buying

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00:21:15,240 --> 00:21:18,039
gold big time, and some of
the major players are beginning to get into

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00:21:18,039 --> 00:21:22,799
gold right now, are only beginning. They're not even close to really buying

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00:21:22,839 --> 00:21:25,960
in, but they're starting to say, hey, I'm looking at it.

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And you see that with the sales
of the ETFs in bitcoin. All right,

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00:21:30,759 --> 00:21:33,279
Well, anyway, I did me. I went on on on here.

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00:21:33,279 --> 00:21:37,000
I was loooking for some questions.
Tell me where where you think we're

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00:21:37,039 --> 00:21:40,319
wrong? Carry No, I got
to say, I agree, Yeah,

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00:21:40,960 --> 00:21:47,279
you know, you just basically statistically
proved what we've all known. Yes,

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00:21:47,920 --> 00:21:52,759
we know there's something wrong. It's
like, but how do I conclusively see

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00:21:52,759 --> 00:21:55,119
it? And that's what I believe. These charts begin to tell you.

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We have all sorts of others that
go behind it, but it's there if

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you's the backs are there if you
want to look, yeah, that's the

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00:22:03,119 --> 00:22:06,799
big if. Well, Gordon,
just tell us where we find you.

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By the way, if you're listening
on the podcast, there's a link in

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the show notes going to the dropbox
that will give you all of these charts

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00:22:15,680 --> 00:22:22,200
gift from Gordon, and we'll put
it in the YouTube description too. I

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00:22:22,200 --> 00:22:25,079
don't know if you'll be able to
do it or not, but we'll put

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00:22:25,079 --> 00:22:29,119
the link to the charts there,
even though you've been seeing them as well.

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So Gordon, hey, just tell
us where we find you, how

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00:22:32,799 --> 00:22:34,559
we connect with you on the web. Yeah, please, As you saw

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00:22:34,599 --> 00:22:41,920
on the chart so Matassi dot com. We have a free newsletter out weekly

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00:22:41,000 --> 00:22:47,279
with chart packages. Because everything I
shown you things change, so you know,

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00:22:47,680 --> 00:22:49,480
that's where we kind of update what
we're seeing and things that are that

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are changing. And we welcome everybody
to join us. All right, Hey,

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00:22:53,759 --> 00:22:57,359
if you have any questions, are
you having problems downloading those charts,

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00:22:57,559 --> 00:23:00,759
shoot me an email k l Well
at Carrie LUTs dot com. We'll get

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00:23:00,799 --> 00:23:04,759
you an answer. We'll get you
a link, and all of this is

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00:23:04,799 --> 00:23:11,920
in the show notes to the site
Financial Survival Network dot com. While you're

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00:23:11,960 --> 00:23:15,279
there, sign up for your free
newsletter. Gordon, always a pleasure,

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00:23:15,400 --> 00:23:18,039
Thanks for stopping by, Thank you, carry, Thank you very much.

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00:23:18,039 --> 00:23:22,440
I enjoyed it. Thanks for listening
to Carrie Letz's Financial Survival Network your solution

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00:23:22,720 --> 00:23:29,400
to today's trying times. For the
latest go to Financial Survivalnetwork dot com.

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00:23:29,400 --> 00:23:33,279
Financial Survival Network now more than ever,