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I look at the debt of the
United States. I look at the asset

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bubbles that exist in corporate debt and
commercial real estate, and I look at

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the app asset bubble in collateralized loan
obligations and private credit. I look at

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all these bubbles and I say they're
unprecedented, and they're concurrent. So we

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have you know, through reshtorating,
we've had times when there's been a bubble

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in the stock market. Right in
two thousand, there was no bubble in

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debt to GDP, there was no
bubble in corporate credit, there was no

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bubble in real estate. It was
just a Nasdaq bubble. But that bubble

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burst with a procession and having a
Nasak drop by eighty percent. You were

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listening to Carrie Letz's Financial Survival Network, where you get valuable information you just

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00:00:54,520 --> 00:01:00,399
Survival Network now more than ever.
Go to Financial Survival Network dot com and

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Financial Survival Network now more than ever,

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and welcome. This is Financial Survival
Network. I'm your host, Grriy Lutz.

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Michael Pento's with us now Michael,
it's been a little while since we

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last spoke of things that, well, the stock market's going up, we

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should be we should all be taking
out the champagne now because our paper wealth

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goes up by the day. Right. But yeah, if you're you know,

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I gotta tell you the facts are
that this is this most scary market.

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And I'm in the business thirty three
years, Kerrie, this is the

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most scary market I've ever been in. And that's why I thank God for

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the UH his help and create I
think it's his help creating the inflation,

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deflation and economic cycle model, because
if I didn't have a model that had

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me, like had early warning signs
of what I need to know, the

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are Caine warning signs for when this
market's ready to crack and you need to

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get out of harm's way, I
wouldn't be able to participate in this bubble.

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But let's just talk about the bubble
here. So this is the most

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narrow market I've ever seen in my
thirty three years and and throughout historically studying

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the history of markets. I mean, usually when you have markets that are

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just one sector you think about,
you know, dot Com or nifty to

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fifty or AI, and that's dangerous. But when you have a market that's

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just really one stock, one stock, that's in fact, I was looking

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at in Vidio's percentage of the of
the GDP of this country. It's ten

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percent. It's marketing cap. It
is ten percent of the GDP of this

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country. And you can find it
with Apple and Microsoft, the the big

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three. It's like one third of
the entire country's output in three stocks.

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And then I think, think about
the market cap of GDP as a percentage

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of market cap of equities as a
percentage of GDP. Excuse me, that's

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not one hundred and ninety percent now, it's it's only been higher in one

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instance, which was a little bit
about two hundred percent, right after the

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helicopter money was deployed post COVID.
So just for a reference, in two

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thousand and seven, the total market
cap of equities to GDP was a bit

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above one hundred. So you know, we're almost two times higher because of

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all the money they printed, borrowed
and printed. I should add, and

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when you have a market this rally, it always ends in disaster. So

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just so I can wrap up this
thought, you have AI and Nvidia.

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That's causing people to believe, oh, the market's doing fantastic. Wow,

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everybody's getting you know, wealthy.
But if you just look under the surface,

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the equal weight S and P five
hundred RSP is up four percent this

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year. Four percent. It's not
horrible, but it isn't Nvidia, I

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carry and the Russell two thousand,
which is more than one stock, right,

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two thousand stocks that's down on the
ear. So that's when you pull

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people and you say, well,
how are you doing in the stock market.

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How's the market doing. How are
you doing well? People say,

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well, it's in a bear market
and we're in a recession. Because if

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you just look at a very small
narrow slize of the market, things look

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great. But if you look at
in reality, most of the market is

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down or at least unchanged on the
year, unchanged it down. And if

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you call people on the phone and
say, hey, do you have a

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job, well, no, I
don't. But if you if you look

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at the headline figure from the non
front payer report, things are going great.

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Yeah, hey, you know the
politicians have saved the market here,

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Michael right should be grateful. Well, I mean I had this conversation very

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recently with a client perspective client actually, and he asked me a question.

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He asked me an interesting question,
Kerry. He said, well, you

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know, we both agree we're a
cord that you know, things are artificially

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inflated and it's very dangerous out there. And how can you invest stock market

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and any confidence? And he said, Michael, when the next crisis comes,

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what if they just print it all
away like they always do? And

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I said, yeah, that's a
good question. But what makes this time

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different than every other time since nineteen
eighty seven when the FED decided they could

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just monetize away the problem after the
eighty seven crash. Well, there's two

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things different. First, the first
one that's different is the US economy,

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and more precisely, US Treasury isn'tsolvent's
solvent. You have a trillion dollar interest

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payments on the debt, on the
deficit. You have two trillion dollar deficits.

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You have debt outstanding that is seven
hundred and twenty five percent higher than

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the revenue that you collect every year. You have an in solid nation.

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So the idea that you can just
start on this massive borrowing spree to combat

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a combat or recession, you know, you risk you risk really aggravating the

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bond vigilanties, and an interest rates
might not go down. And the other

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difference this time is this for the
first time since eighty seven. The problem,

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the salient issue is inflation already to
start. Inflation is still way above

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the Fed's target. Three point three
percent isn't two, it's its rate of

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change. Second derivative is down from
nine. But if you look at the

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University of Michigan's consumer sentiment, it
shows that people are very much aware that

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their living standards have been destroyed over
the last four years. They're not interested.

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They're not interested in inflation coming down
more slowly. In other words,

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just let me rephrase that to me
more eg accurate. They're not interested in

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having inflation going up more slowly than
it was. They want prices to fall,

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They need prices to drop, they
don't need them to go up more

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slowly from an already unaffordable level which
is much higher than two percent target.

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So that's the problem. It's a
big problem here, and it doesn't look

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like anybody really cares about it anymore. The candidates, the politicians, nobody

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seems to care less about it.
Michael, Well, they do care.

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I mean they can't. You know
they care, You know what, they

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care enough to write a letter.
Elizabeth Warren wrote a letter to Jerome Powell,

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and Jerome Powell is antsy and recklessly
looking forward to cutting rates again.

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Elizabeth Wore wrote a letter with three
other Democratic senators say please please start cutting

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interest rates now because it'll make housing
more affordable. I mean, what,

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carry, These are the people we
elected to represent us in Congress. You

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want to cut interest rates so housing
becomes more affordable? What a moron?

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I mean, housing prices went up
fifty percent in the last four years because

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interest rates went to zero. The
ten year surgery was taking a third zero

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point three to three percent post COVID, and that caused everybody to buy.

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What do you do? What do
you do? In interest rates are free?

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Carry you borrow a lot of money? Yeah, so, Elizabeth,

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Elizabeth, maybe your interest rate might
be and we just talked about the fact

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that it might not be because of
inflation and insolvency issues, credit and inflation

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issues. Maybe your interest rate might
be lower if you cut short term intrabank

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lending rates. Elizabeth, but our
whole price is going to go down.

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Start cutting into strength. Not a
chance no, no, So once again

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main Street, mainstream loses and Wall
Street wins well, and the Wall Street

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crybaby, this kills me to the
Wall stream cry babies. We need you

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know, you know this. The
Barry Stern licks are out there of the

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running these real estate Investment trust Please
cut rates, please, it's it's so

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despicable, it's disgusting when you when
are we going to start caring about the

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average you know, middle class person
who actually does the working in this country.

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Yeah, they actually do the producing
in this country, not the people

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who own assets, not the poor
who are collecting welfare, the people who

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work for a living. What you
know, who's speaking for them? Good

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question, Perry, who's a kid? I'm sorry you got me going on

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this? You it flame you,
it's me, I'm kidding. But who's

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a candidate out there who really has
a good understanding of economics and can get

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up and say we need to abolish
this horrific organization known as the Federal Reserve?

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And you know, Janet Yellen's out
there, she's the head of Treasury

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saying that the government debt isn't a
good place. Yeah, oh yeah,

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what does she smoke? Me?
What she's smoking? Huh, I mean,

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come on, what place is that? I mean, they so question

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for you. The petro dollar appears
to be officially dead. Now what does

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that mean here for us? Well, I mean it's short short term.

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I'm looking for short term. I'm
looking for the rate of change of inflation

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to drop significantly because I think we're
headed for a recession very quickly. I've

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been predicting that it's gonna end.
I I've been predicting that we were going

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to end up in another phase.
So twenty twenty two we had a recession.

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It was bailed out by the and
this is it, this is this

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is true. This is a fact. One point seven trillion dollars of qwe

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came out of the reverse Repo facility
from twenty twenty two till today. It's

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still coming out. So that's what
that's what truncated the recession. So that's

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so the reverse repoacility had two point
five trillion dollars in it. Let's now

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have just a few hundred billion.
That's almost empty. That's that Q.

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That Q the offset all the QT
and then some from the Federal reserve.

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Right, So that's what that's the
loquid. That's why you think. That's

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why Roaring Kitty and in VideA and
the sock market in certain sectors is having

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a field day. That's why you
know you you give Wall Street one point

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seven trillion dollars of gambling money over
the course of one freaking year, and

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they'll go to town and that's what
they've done. That's almost that's almost over.

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When that happens, I think you
have a liquidity crisis, repro crisis,

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money market crisis, and I think
everything goes down except for short term

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bonds, and the US dollar will
have a bid, temporary bid, I

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think. But then you're talking about
the petro dollar you talk about you talked

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about the dollar weakness that's going to
come on the other side of this recession

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when they start blowing up the balance
sheet again. I mean, you think

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about the fest balance sheet that was
seven hundred billion dollars two thousand and eight,

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then then went to nine trillion dollars. This has been out of republic,

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my friend. There are hop style
numbers. No, you can't deny

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that, and no one can,
no one, no one should. And

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then you say, okay, you
you you got it back down down to

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seven point two trillion dollars from seven
hundred billion, still a lot, right.

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In fact, it was four and
a half tri the ballance. He

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was four and a half trillion prior
to COVID, right, which was still

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out of hand. Yeah, of
hand, money supplied, bowing. That's

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what's fueling all this liquidity. It's
almost over though, and you think about

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the recession that's going to come and
on the other side of it, on

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the other side of this recession,
when Janney Yellen and Jerome Powell or whoever's

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in charge, there'll be somebody who's
going to be a puppet of the president.

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They are going to have an unholy
union once again and unleash helicopter money.

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It'll destroy the dollar. And I'm
not talking about the dollars so much

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against you know, the end or
the pound. I'm talking about the dollar

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against hard assets. Yeah, yeah, yeah, you're going to see excuse

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me that people call me even on
the day on a federal holiday, as

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you see, Uh, you're gonna
see. And I think you can see

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protract and statuslation the likes of which
we've never before witnessed or even dream possible

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in this country. Wow. So
in the MEANTI have a Banana Republic,

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like Argentina, is moving in the
right direction, right and interesting how Mille

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decided not to dollarize the Argentinian economy
and we're heading in it exactly. The

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US and the West are heading in
completely wrong direction. And we didn't even

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talk about China here, Michael,
But China is you know, China is

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not my favorite country either. I
mean, you're talking about, you know,

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running from the United States, you're
gonna run into what you're gonna run

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into, the euro the Renman b
where you're gonna where you're gonna go.

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I mean, they have they have
a real estate crisis there. It's not

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going away. Clearly, the problems
are not interest rate related. People can't

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afford the house, can't The real
estate crisis in China is worse than the

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crisis of the United States. And
we have a massive real estate crisis the

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United States. People can't afford their
home. People can't afford a home.

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And you throw at the fifty percent
increase in home prices and then coupled with

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the twenty six percent increase in maintenance
costs and insurance and taxes associated with owning

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a home unaffordable a we have a
dysfunctional real estate market here frozen. So

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yeah, I'm talking about the dollars
destruction against hard assets once, but not

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not now. I wouldn't do it
now because maybe a dollar can still have

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one big move higher. Yet,
because that's what happens anytime you unwind Carrie

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trades, global carry trades, people
run into the dollar. Yeah, well

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so I would. I would be
a long dollar. Not now, I'm

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neutral a dollar. I'm a position, and I would be I would get

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it, get ready to get a
position and a dollar and then short the

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heck out of it. In the
aftermath of the Great Recession, I want

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I'm gonna I'm not gonna call I
think it's I think I've called I've called

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this the Greater Depression. Yes,
right, that's why I thing it's gonna

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happen because and carry Why because I'm
some kind of maniac who has no idea

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what he's talking about. Uh,
or or I'm sometimes some kind of Cassandra

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who uses hyperbole. No, I
look at the debt of the United States,

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I look at the asset bubbles that
exist in corporate debt and commercial real

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estate, and I look at the
app ascid bubble in collateralized loan obligations and

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private credit. I look at all
these bubbles and I say they're they're unprecedented,

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and they're concurrent. So we have
we you know, we through reshtory.

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We've had times when there's been a
bubble in the stock market. Right

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in two thousand, there was no
bubble in debt to GDP, there was

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no bubble in corporate credit, There
was no bubble in real estate. It

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was just a Nasdaq bubble. But
that bubble burst with a procession and having

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the Nazak drop by eighty percent eighty
three. I think in two thousand and

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seven there wasn't really a in equity
bubble, but there was a real estate

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bubble, and that didn't stop the
S and P from dropping by fifty percent.

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But now you have a credit bubble, uh, real estate and bull

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student loanle auto bubble. Got bubbles
as far as the eye can see in

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vidiot bubble, I mean the bubbles
everywhere you look, and their concurrent,

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in other words, existing simultaneously together. What do you think is gonna happen

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when they burst and there is no
real like this? Gentleman, I was

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having a conversation with my perspective client, there is no there is no perfunctory

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response. That's a salve that's going
to be there's one hundred percent effective that

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will remediate the situation. Oh,
let's just cut rates to zero, borrow

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trullions of dollars and will monetize it
all. Try and see what happens.

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See if that possibly go wrong.
So we're going to have a We're gonna

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have to have some type of jubilee
here, either voluntary or involuntary. Right,

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Well, we're talking about debt jubilee. You're talking about the restructuring and

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canceling of debt. Yeah, that's
that's I mean, I don't see that

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happening volunt terily. It's going to
be well, let's just be specific.

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I think the I think after we
go through stagflation, hyperinflation that we've never

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before seen in this country, when
that becomes such a problem, that restructuring

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and canceling and balance, which are
very deflationary, become preferred hyper inflation.

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In other words, when everybody has
sense to the idea that we know that

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we have to change, everybody's on
the same page, then they'll then there

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will be balance and and dead will
be canceled and that will be written off.

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But that's a you're talking about people
all coming to the common you know,

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the zeitgeist will be I prefer I
prefer to have a real depression short

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term because this hyperinflation is killing us. Are we going to have a referendum?

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Do you want hyper inflation or do
you want a real depression? And

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uh see, I'll think I'll think
I'll tink both that both, because you're

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gonna have because you have both.
I mean, that's this third choice.

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Unfortunately, it's not really the choice. You just you look at every country

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on the planet who has gone through
this. Unfortunately, that's why I call

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the United States now it's heading towards
banana republic status, where when you have

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when you have debt and depths is
out of control that have to be monetized

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by a central bank, you end
up with. This is replete throughout history.

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You end up with a yeah,
you know, hyperinflationary crash and then

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you know, then you have depressions. Now. The only I mean we

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I guess the best thing we could
ever do is end up like Japan,

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which is a chronic case of you
know, no growth, a protracted perpetual

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recession and by the way, their
stock market is down after thirty five years

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of their experience. So if that's
if that's the best case scenario, I

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think people need to call their money
manager, their favorite broker up and say,

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are we what's our plan here?
What's the strategy going forward? If

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this is if this is where we're
headed, is it just buy a hole

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because you know the market always comes
back. Well, I'm you know,

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I'm approaching retirement and I like to
participate in bubbles, but I don't really

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want to have my my retirement plans
divided by two are multiplied by point five

256
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and and wait fifteen years and I
hope they come back to even in nominal

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terms. That's not really it's not
really a retirement strategy. But do we

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have these you know, target date
target date portfolios and you know he's order

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rebalancing. Everybody's piled into the same
thing. And this this is not new

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kerry. This is you know,
this is a disaster. It's going to

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be horrible. Getting the timing as
close to possible correct, you know,

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possibly correct is the challenge. But
it's better than just say, you know,

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yeah, I'm long, I'm a
long envidio. Just close your eyes.

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So hey, your words just reminded
me of a quote by Bernard Baruk

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who said I got rich, letting
the other guy make the last ten percent.

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Wow. Very profound and very true. Yeah, we're close. We're

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close to that. We're close to
the breaking point. There was going to

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be an epiphany here soon. And
I'm tying that to when the reverse repo

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facility runs runs out of its q
E so right around. Yeah, I

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thought it would be already, but
that seemed to plateau. But we're running

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out of liquidy probably, you know, I would say definitely before the end

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of the year, but should be
sometime this summer that you could start seeing

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fireworks erupt. You could sooner rather
than later. I wrote in an article

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six years ago. Yeah, it
must have been right before the last election

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called the Emperor has no coretex,
you know, the cerebral cortex. Yeah,

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he's got no cortex. And that
goes for any of the presidents.

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Wasn't specific, but this one has
a particular allure to it. Now.

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Well, when you when an independent
suppose the independent third party says you're you're

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you're not competent enough to stand trial, guilty, you're innocent. You're innocent

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for reasons of lack of community,
you know, yeah, incapacitated mentally.

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But that makes you a great candidate
for really I mean, it's Aladdin,

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but it's really sad. It's really
very sick. Yeah, this is like

283
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pissing me off. I just googled
the Emperor has no cortex, and I

284
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see a few people have stolen it
from me. Oh well that's you know

285
00:23:02,279 --> 00:23:04,559
what they say, invitation is the
greatest form of flattery, sage. Yeah,

286
00:23:06,000 --> 00:23:11,400
I'm flattered. I'm sure. So
hey, how does the crypto or

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kleptocurrencies fit into this whole scenario?
Is that a safe haven or is it

288
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just like anything else for me?
They don't because, I mean they've been

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00:23:23,240 --> 00:23:29,880
corrupted and co opted by Wall Street, and so if their price is predicated

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00:23:29,920 --> 00:23:33,079
on them shoving ETFs down your face
and saying here, by this cryptocurrency,

291
00:23:33,200 --> 00:23:37,359
through our r ETFs, that means
when the liquidity crisis hits, people will

292
00:23:37,400 --> 00:23:44,920
be dumping ETFs and their shit coins
as fast as possible. So no,

293
00:23:45,240 --> 00:23:52,640
you're not going to get any zero
zero ballast in your portfolio from cryptocurrencies.

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00:23:52,839 --> 00:23:59,559
Okay, so when everything crashes,
though, and the digital dollar is basically

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turned into vapor. If you're holding
a currency, though, that could be

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00:24:03,640 --> 00:24:08,039
okay for a little while, right
it so, so the four horsemen of

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the economic apoculas have cash, short
term bill, short term treasuries, the

298
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US dollar, and shorts shortening the
market. So those are only four things

299
00:24:21,880 --> 00:24:25,480
that will work, the only four, because everything goes to a correlation of

300
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one when you have a liquidity crisis. I'm going to make a little I'm

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00:24:30,839 --> 00:24:37,960
going to have an artist make up
that diagram the four the foro coursecalypse.

302
00:24:38,279 --> 00:24:44,799
Yes, your credit for it,
thank you, thank you, so short

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00:24:44,880 --> 00:24:48,640
term treasuries. But but this is
only a fix, a short term fix

304
00:24:49,279 --> 00:24:53,839
right in the it's a place to
hide when the when, so what everything

305
00:24:53,839 --> 00:24:59,480
collapses? You need a place to
hide. I mean you could just because

306
00:24:59,480 --> 00:25:03,480
you're not going to get any early
warning signs from Wall Street. They're not

307
00:25:03,519 --> 00:25:06,839
going to get on the TV and
tell you, you know, or Janet

308
00:25:06,880 --> 00:25:10,960
Yellen or Joan Powell. No one
will tell you the truth. I don't

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00:25:10,960 --> 00:25:12,960
think Joe Biden will either. I
don't know if he knew it. Yeah,

310
00:25:14,279 --> 00:25:17,640
and he's not going to tell you. Hey, listen, we're I

311
00:25:17,680 --> 00:25:19,920
think we're headed for a recession that
couldn't manage, you know, metastasize into

312
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a depression. So I would sell
everything you have right now, get in,

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00:25:22,960 --> 00:25:26,680
get into cash that will never happen. Uh. And you're not going

314
00:25:26,680 --> 00:25:33,559
to hear it from your your your
friendly neighborhood money manager either because you know,

315
00:25:33,039 --> 00:25:36,680
you know what he bothered with this. He's off of the golf course.

316
00:25:37,279 --> 00:25:40,440
He or she's off of the golf
course trying to raise the next you

317
00:25:40,440 --> 00:25:44,680
know, million dollars for the a
U N So uh. You want to

318
00:25:44,720 --> 00:25:48,720
be with someone who's least looking at
this. Not not a panic, not

319
00:25:48,720 --> 00:25:52,400
not a herm, a bear,
but someone was looking at I noticed.

320
00:25:52,880 --> 00:25:57,240
I noticed financial coechnitions are tightening,
and I noticed credits breads starting to widen

321
00:25:57,279 --> 00:26:00,400
out, and I noticed the reverse
repos is al he's at it whack.

322
00:26:00,480 --> 00:26:07,880
And I know that the the move
index is blowing out because the volatility UH

323
00:26:07,000 --> 00:26:15,319
index for bonds is getting unruly.
I think I'm gonna maybe raise some cash

324
00:26:15,359 --> 00:26:21,680
and charting, starting to sell some
of these high data UH exposures and just

325
00:26:22,279 --> 00:26:26,200
maybe go into the four horsemen for
a while. See what Horstman is gold

326
00:26:26,240 --> 00:26:30,119
and silver. It's if the if
there is a fifth horseman, it would

327
00:26:30,119 --> 00:26:33,440
be gold. It wouldn't be silver
because silver has that base metal component to

328
00:26:33,519 --> 00:26:37,039
it, so it is it is
is tied to it. You know,

329
00:26:37,200 --> 00:26:41,839
silver does best when the global economy
is expanding and we have inflation, so

330
00:26:41,960 --> 00:26:48,960
that's a that's its monetary hedges working, and it's hedge to industrial industrial abuse

331
00:26:48,079 --> 00:26:56,200
is moving. But gold has a
much better, much lower volatility profile than

332
00:26:56,319 --> 00:26:59,839
silver, So I would head and
I would use gold. But even in

333
00:26:59,839 --> 00:27:03,640
a liquidity crisis, physical goal will
get hurt. It depends on the intensity

334
00:27:03,640 --> 00:27:07,519
of that liquidity crisis. So I'll
you know, measure and map that process

335
00:27:07,559 --> 00:27:11,759
as well. But right now I'm
only owned, I'm only long gold.

336
00:27:12,880 --> 00:27:19,400
Yeah, understandable, understandable. So
but but they call silver the poor man's

337
00:27:19,440 --> 00:27:22,680
gold, right you know, well
I'm not. I'm not a poor man

338
00:27:22,720 --> 00:27:27,039
and I don't and thank god,
I'd rather own the real thing. If

339
00:27:27,079 --> 00:27:30,759
I don't, it's not for it's
not for man as well. They can

340
00:27:30,799 --> 00:27:33,559
call it what they want, But
if you look at the performance of gold

341
00:27:33,640 --> 00:27:40,400
versus silver, especially when it comes
to economic crises, you will want to

342
00:27:40,480 --> 00:27:44,640
own the real thing, which is
one hundred percent money. And has no

343
00:27:44,720 --> 00:27:49,319
exposure to the rate of change of
economic growth. Okay, I'll buy it.

344
00:27:49,640 --> 00:27:55,640
I'll buy it. I see your
point. But I think is massive

345
00:27:55,759 --> 00:28:00,400
panic that's going to take place.
They'll be buying everything, even opper,

346
00:28:00,759 --> 00:28:06,559
Michael, They're even going to be
buying copper. I would would I would

347
00:28:06,640 --> 00:28:11,000
not disagree with that on the but
I would say that would be after the

348
00:28:11,039 --> 00:28:17,079
recession takes place. It would be
on the ex post the recession, and

349
00:28:17,079 --> 00:28:19,640
and then you know, I would
buy I will be buying copper, base

350
00:28:19,720 --> 00:28:26,319
metals, and energy, precious health. That's only after the that these maniacs

351
00:28:26,559 --> 00:28:32,759
in Washington are able to re liquify
the financial system. You really feel and

352
00:28:32,839 --> 00:28:34,440
tell us how you really feel about
it? Yeah, I mean, well,

353
00:28:34,599 --> 00:28:37,920
well, you know what the you
know you have you have an inverted

354
00:28:37,000 --> 00:28:42,279
yield curve that's been inverted for the
longest duration in history. Yeah, I

355
00:28:42,319 --> 00:28:45,920
mean, you're killing you're killing the
bank. The bank. The banks are

356
00:28:45,000 --> 00:28:51,319
finished, and they're under a lot
of pressure from their assets that are eroding,

357
00:28:51,440 --> 00:28:56,440
so their margins are and called it
net interest margin NIM is under a

358
00:28:56,440 --> 00:29:02,720
lot of pressure. So you know, we listen, Jerry, I'm not

359
00:29:02,720 --> 00:29:07,000
a nefarious individual. I want the
best for this country. The country is

360
00:29:07,000 --> 00:29:12,480
in desperate need of a recession.
Doesn't in needs indegation, in need need

361
00:29:12,640 --> 00:29:19,200
that it needs the cathartic cleansing,
urging action that comes with resetting all this

362
00:29:19,359 --> 00:29:25,920
debt that's not you know, not
supported, cannot be supported. Resetting asset

363
00:29:25,960 --> 00:29:30,799
prices, that's wonderful. It would
be nice if people wouldn't be nice if

364
00:29:30,799 --> 00:29:34,960
people could actually buy a house.
Wonderful. Right, So let let's go

365
00:29:36,079 --> 00:29:41,640
back to the gold you know,
to dow ratio. So, once upon

366
00:29:41,680 --> 00:29:45,799
a time, two hundred ounces bought
a house, right, two hundred ounces

367
00:29:45,920 --> 00:29:49,480
or one hundred ounces, I don't
remember what the number was exactly, but

368
00:29:49,759 --> 00:29:56,759
basically in a house it was one
hundred grand and or fifty and you had,

369
00:29:57,000 --> 00:30:00,680
you know, one hundred ounces of
gold, you could buy a house

370
00:30:00,759 --> 00:30:06,279
with it. But not the case
anymore. So how prices are you know,

371
00:30:06,519 --> 00:30:08,480
a way out gold? If you
look at a home price to income

372
00:30:08,599 --> 00:30:15,960
ratios, they're at the highest point
by far in relation to any other time

373
00:30:15,960 --> 00:30:18,200
period, even two thousand and six, which is the previous bubble peak.

374
00:30:18,440 --> 00:30:22,480
So home prices cannot be afforded by
the income. And if you look at

375
00:30:22,759 --> 00:30:26,039
all the other factors that are a
part of a house. Like I said,

376
00:30:26,079 --> 00:30:29,119
the main has caused the insurance costs, taxes, it's even further out

377
00:30:29,160 --> 00:30:33,000
of reach. So yeah, so
I would I would look for that ratio

378
00:30:33,119 --> 00:30:37,680
to come back into some you know, economic symmetry, historic symmetry soon and

379
00:30:38,119 --> 00:30:41,720
it would probably do so by both
the home price coming down and gold going

380
00:30:41,799 --> 00:30:48,279
up. Yeah, and the gold
to dow ratio. You know, it's

381
00:30:48,240 --> 00:30:52,359
also I mean, even though the
doubt isn't really the best to now,

382
00:30:52,839 --> 00:30:56,400
you know, but look at the
gold and NASDAC ratio if you want something

383
00:30:56,920 --> 00:31:03,880
that shows how out of whack everything
is. So yeah, so all these

384
00:31:03,960 --> 00:31:08,839
ratios are going to reverse reversion to
mean eventually, right the reversion. Yeah,

385
00:31:10,200 --> 00:31:12,720
so you want to be you can
never prepare for the inevitable, like

386
00:31:12,839 --> 00:31:18,160
we buy life insurance, but that
doesn't mean you're ready to die. You

387
00:31:18,160 --> 00:31:22,440
know, you can't really prepare for
this tsunami. It's because it hits the

388
00:31:22,559 --> 00:31:26,240
US, then it means it's global. Right, it's every country in the

389
00:31:26,240 --> 00:31:30,240
world except for some countries that are
kind of off the grid. Yeah,

390
00:31:30,920 --> 00:31:37,440
right, global. I mean,
if you take the problems that are extends

391
00:31:37,519 --> 00:31:44,119
in Europe and the United States,
and China and Japan. Those are the

392
00:31:44,119 --> 00:31:47,799
countries you have to be concerned with
as far as you know your portfolio,

393
00:31:48,160 --> 00:31:51,559
what most people are concerned. I
mean, if you have problems in those

394
00:31:51,599 --> 00:31:56,160
four countries, you're not going to
be safe anywhere. Yeah, and it's

395
00:31:56,359 --> 00:32:00,759
one black swan gets set it all
off, right. I don't think we

396
00:32:00,759 --> 00:32:02,640
need a black swan. We need
read the regular white. So it's every

397
00:32:02,759 --> 00:32:06,839
like we just said, it's not
it's not. I don't think we need

398
00:32:06,880 --> 00:32:10,599
some kind of rare exogynous media or
hitting the earth. It's it's going to

399
00:32:10,640 --> 00:32:14,559
be the same thing. It's a
business cycle. We took on way too

400
00:32:14,640 --> 00:32:20,480
much debt. Interest rates are way
interest rates we're near zero present for ten

401
00:32:20,559 --> 00:32:25,200
of the last fourteen years. Following
was awful, following following the global financial

402
00:32:25,200 --> 00:32:30,720
prices. I mean, that's that's
the problem. And people borrowed too much

403
00:32:30,720 --> 00:32:32,640
money when money was virtually free,
and asset prices went to the moon.

404
00:32:32,759 --> 00:32:38,680
And now inflation is coming down and
money supplies has has been shrinking, and

405
00:32:39,519 --> 00:32:44,279
the liquidity spigot is about to run
dry, and you'll see this correction.

406
00:32:44,400 --> 00:32:47,240
It's just part of the business cycle. We don't need anything crazy to happen.

407
00:32:49,240 --> 00:32:52,200
And when the stock market starts going
down, you know, the there's

408
00:32:52,839 --> 00:32:58,599
in the five quintiles of consumers,
the bottom three are done because inflation has

409
00:32:58,640 --> 00:33:01,160
wiped them out the top two.
It's all. That's all. It's keeping

410
00:33:01,200 --> 00:33:06,759
things afloat. And their their wealth
is in real estate and stock speculation,

411
00:33:07,480 --> 00:33:12,680
Gordon Gecko. And and they're about
to get a reality check once the liquidity

412
00:33:12,759 --> 00:33:15,000
runs dry, because once when the
when when the stock market ins the fall

413
00:33:15,440 --> 00:33:20,559
and the real estate market be into
humble guess what all five quintiles will be

414
00:33:21,039 --> 00:33:29,079
Ryan for Uncle Jerome and the and
Jedi please it was over. Please cut

415
00:33:29,079 --> 00:33:32,200
injurs rates please, and did the
worst time to do it, you know?

416
00:33:32,319 --> 00:33:36,559
And cutting interest rates and we talked
about it already again, cutting interest

417
00:33:36,640 --> 00:33:39,000
rates back to zero when you have
an inflation problem, and borrowing trillions of

418
00:33:39,000 --> 00:33:43,640
dollars when you're insolvent. Yeah,
one hundred and what are we one hundred

419
00:33:43,640 --> 00:33:49,359
and thirty something percent debt to GDP
nuts. You know, the stock market

420
00:33:49,000 --> 00:33:52,559
in prosperity in a more in a
in a soft landing, we have that

421
00:33:52,559 --> 00:34:00,000
condition. The stock market's kind of
mirroring the debt market, right, uh,

422
00:34:00,279 --> 00:34:02,640
you know, stock market's one hundred
and ninety percent of GDP and the

423
00:34:04,039 --> 00:34:07,920
how much is debt times GDP?
That's kind of like we have a definite

424
00:34:08,000 --> 00:34:14,079
correlation there. Huh, We're getting
there. Unfortunately, are not good.

425
00:34:14,280 --> 00:34:17,719
Well, we always appreciate you coming
on. Go over to pentoport dot com.

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00:34:17,760 --> 00:34:22,719
The links in the show notes,
questions comments for Michael myself al at

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00:34:22,760 --> 00:34:27,000
Carrie LUTs dot com. While you're
at the site, sign up for your

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00:34:27,039 --> 00:34:30,599
free newsletter. Michael, we'll talk
to you again real soon. Thanks,

429
00:34:30,840 --> 00:34:36,719
appreciate the time, Carrie, Thanks
for listening to Carrie Letz's Financial Survival Network,

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00:34:36,880 --> 00:34:40,719
your solution to today's trying times.
For the latest, go to Financial

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00:34:40,800 --> 00:34:46,440
Survivalnetwork dot com. Financial Survival Network
now more than ever,