If we look at GDP and the inflation numbers, you know, if we
use the same math and formula that we use back in you know, in
the eighties under Reagan, you know, I think we'd have different numbers.
So it's it's hard to kind of figure out what's real and what's not a
little bit and that's the most unnerving thing. While we're looking at all the
debt, all the other issues that we're facing. Right now, you're listening
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Carrie Letts. Well, we just got a surprise GDP print two point one
percent at the days are here again. A will have said to use it
as a pretext to raise That remains the question Eddie Sidell has the answers,
Eddie, great to have you back on. So Hey, thanks for having
me. So what about this number here, I you know, not surprising,
you know, like like we were talking about just a couple of minutes
ago. I'm not shocked. I think a lot of people are. You
know, EA's with the dollar and the math, none of the math is
making sense. I mean when you think about with bricks, the US dollar
now, you know, increasing in value, you know, from where it
did below one hundred two. I looked earlier today it was one oh four.
I'm not exactly sure where it is right now. You know, none
of the things are making sense except for what Pal said, not so much
that it made sense, but he's he's already kind of pigeonholed the FEDS and
what the monetary policy is going to be because he said he's going to hold
true and fast that two percent mark. And so if he does that,
you know that means there's going to be a twenty five basis point raise and
maybe one more, even though it's it's lagging. But you know, again,
if we look at GDP and the inflation numbers, you know, if
we use the same math and formula that we use back in you know,
in the eighties under Reagan, you know, I think we'd have different numbers,
So it's it's hard to kind of figure out what's real and what's not
a little bit and and that's the most unnerving thing when we're looking at all
the debt, all the other issues that we're facing right now. Yeah,
so do you think that really gives them a basis if you will, to
raise rates, because look, the two year is U is well ahead,
it's at said funds rate is well ahead of the two year treasury, which
they yeah begging. So the two year, you know, the two year
treasury is down at like four eighty five. Maybe it's gone higher after after
this number came out. I haven't seen it yet, but is that the
that is the question here is is that is that going to lead them to
raise rates again or do they just leave it for the time being an ope
for the best, you know, whether they raise it quarter percent or not.
You know, the market's already kind of braced it in a little bit.
You know, the market's reacting to the the not as good news for
the GDP number. So you know, it looks like we could finish another
positive day for the third day in or row for the markets. But you
know, again, I would be shocked if the Feds actually pause and don't
raise rates. You know, I think if they if they pause, it's
going to inflation is going to come roaring back. And it's already here.
I mean, look, we're spending over five billion dollars a day. It's
actually more than that. If you look, if you go back and you
look at when we actually broke thirty two trillion in UH in our in our
national debt, it's been you know, roughly seventy five eighty days. And
at that rate, you know we're gonna overspend. We're gonna have definite spending
in excess of three trillion dollars a year. That in itself is inflationary.
I think the other things that power are is looking at. It's wage increase.
You know, you've got these large unions that are renegotiating contracts, you
know, for increased salaries and wages, and so that's creating a lot more
pressure upward pressure on inflation. So I think he's looking at everything as a
whole instead of just you know, the Fed funds rate at five and a
half versus the two year treasury And you know, I don't think he's going
to put a whole lot of stock into the GDP number being two point one
perc. You know, I you know, honestly, I think he's going
to be looking at everything, and if he doesn't, you know, inflation
is going to come back. You know. The big concern for me is
how long are we going to keep rates where they're at? And is the
election next year going to be a determining factor that says, you know,
let's go ahead and lower rates one time? Because you know, James Carvill
said the best right, it's about the economy stupid. So they're I think
they're looking at this, even though they're trying not to be political. I
think they can't help but be so all right, so you think it's going
up, then anyway they'll because they've got a free ride to do it because
the market has been going back up and so he's just gonna do it.
But really, are they really shooting for two percent inflation here? Eddy?
I don't know how they're going to do it. You know, it's you
know, more than one in a quarter below the hundred year average. I
mean, I just don't see how it makes sense. And if they do,
and they keep pushing it, they're going to have to reason rates to
a point where you know it could wind up breaking the economy. You know,
you've got debt at all time record highs across the board. A credit
card debt is over a trillion, You've got revolving debt can skip me over
one point three trillion. Student loans are coming due October one of this year.
People are going to have to start making payments on it. You know,
we're getting a lot of jobs that are coming out, but they're mainly
in retailing, the service industry. And you know, we've talked about this
before. In my opinion, you know, I think those are more you
know, second and third jobs. They're definitely not those high paying career jobs
that most people are looking for by benefits. So you know, I heard
a phrase and I really like it. It's called the silent recession. You
know, I think that we're people are feeling it right now. The paint
at the pumps, you know, they're they're struggling to pay all their bills
at the end of the month. And uh, and I think we're I
think we're in for a long haul. I do. Okay, So the
silent reset, and maybe it's not as silent as it appears. It appears
that it's here. And hey, if you know, if a tree falls
in a forest and nobody hears it too, did it fall? Right?
That's right, that's right. And you know, and that's the thing,
because everyone knows when they go to the grocery store. So I'm a treasurer
for a charity local sports club, and the cost of food, you know,
when we're feeding the team is a thirty percent higher than it was last
year, So it's across the board. And then you have to pay for
the gas. You know, there's all these things and when you you extrapolate
that out, and then we're talking about the you know, everyday American family,
it's a struggle. It's a day to day struggle, day in and
day out. And that's why I called the silent recession because it's here,
but no one's really talking about it. So what do you do here?
As an individual approaching retirement at some point in your life? How do you
prepare for this awful series of events here? You know what heads your bets?
Excuse me, I you know there's a lot of risk off investments,
you know, the the six months one year treasury, You've got a lot
of money market CDs there. You know, now it's the time to take
advantage of it. I think September is going to be volatile. I do
believe that the year is gonna finish up strong. You know, why risk
it if you don't have to. I mean, there's enough places to shelter
your money. And again we talk about it all the time. I'm a
fan of precious metals, you know, golden and ceber, not so much
as as an investment, but as a storage of value. You know,
the investing part would be the you know, the mining stocks, so and
again have that as a small portion of your portfolio. But yeah, that
you know, you've got to head your bets right now. So heads your
bets and get ready for the inevitable. Huh, I think so? I
think so. You know, when I say inevitable, I don't think it's
going to be crash landing, but it's it's going to be here to stay.
I really believe that for at least in the near term. Okay,
So, so what anything else in particular you're doing to personally prepare for what's
coming. You know what we just talked about, you know, I there
there's I still utilities were hit really really hard as of late, you know,
fuel, gas, energy, You know, I think that those are
some pretty good plays right now, those sectors healthcare. But again, you
know, it's hedging your bets. The majority of all of the portfolios that
we have across the board are in those short term investments that are that are
risk off type situations where we're generating a good ready to return for not a
whole lot of risk. Okay, I like it, and Eddie appreciate you
coming on sharing wisdom with us about the latest to GDP print and it's enlightening.
Where do we find you? How do we connect with you on the
web? Eg SI financial dot com. That is the best place to find
us. Okay, and links in the show notes in this interview on Financial
Survival Network dot com. Make sure you go and you sign up for a
free newsletter. If you got a question or comment, shoot us an email.
We'll get you an answer. K l at carry Lutz dot com.
Eddie, always a pleasure. Thanks for stopping by, Gerry, I appreciate
it. Thanks a good one. Thanks for listening to carry Letts's Financial Survival
Network. Your solution to today's trying times. For the latest go to financial
Survival Network dot com Financial Survival Network now more than ever,