1
00:00:00,320 --> 00:00:04,120
People are distracted right now. They're
you know, Thanksgiving, Christmas, Halloween,

2
00:00:04,240 --> 00:00:08,279
New Year's They're not paying attention to
the underlying currents. What's going on

3
00:00:08,400 --> 00:00:13,240
in the banking industry, the treasury
auctions haven't been going very well. Other

4
00:00:13,320 --> 00:00:16,559
areas, you know, the national
debt is going up. A couple of

5
00:00:16,600 --> 00:00:19,839
banks blew up two weeks ago.
So there's a lot of stuff going on.

6
00:00:19,920 --> 00:00:24,440
The consumer just isn't paying attention to
it. And welcome you are listening

7
00:00:24,440 --> 00:00:28,280
to and watching the Financial Survival Network. I'm your host, Carrie Lutz.

8
00:00:28,440 --> 00:00:31,440
Well, hey, we're in the
last day of November. Today, we

9
00:00:31,600 --> 00:00:37,240
got good numbers coming out on the
economy on consumer confidence, good numbers at

10
00:00:37,320 --> 00:00:41,439
least at first blush. But what
is the real story? And the real

11
00:00:41,479 --> 00:00:45,320
story, like they say, the
devils in the details, Well, the

12
00:00:45,759 --> 00:00:50,000
real story is in the revisions.
Russell Stone is with us now, Russell,

13
00:00:50,079 --> 00:00:55,960
great to have you back. So
consumer confidence inched up for people like

14
00:00:56,079 --> 00:00:59,880
US fifty five plus, but for
the rest of the world it looks like

15
00:01:00,079 --> 00:01:03,640
it's heading straight down. Yeah,
that would be out great. You know,

16
00:01:03,040 --> 00:01:07,200
when I send my notes over,
I said consumer confidence hasn't gotten the

17
00:01:07,239 --> 00:01:11,439
memo yet. All right. It's
kind of like it's the lagging indicator in

18
00:01:11,480 --> 00:01:15,159
a lot of ways because people are
distracted right now. They're you know,

19
00:01:15,280 --> 00:01:19,359
Thanksgiving, Christmas, Halloween, New
Year's. They're not paying attention to the

20
00:01:19,519 --> 00:01:25,599
underlying currents. What's going on in
the banking industry. The treasury auctions haven't

21
00:01:25,599 --> 00:01:29,439
been going very well. Other areas, you know, the national debt is

22
00:01:29,560 --> 00:01:32,640
going up. A couple of banks
blew up two weeks ago. So there's

23
00:01:32,640 --> 00:01:36,159
a lot of stuff going on.
The consumer just isn't paying attention to it.

24
00:01:36,159 --> 00:01:38,359
It is going to catch up.
There will be an alignment of the

25
00:01:38,400 --> 00:01:44,599
market reality and the consumer confidence.
Well, if you look just like auto

26
00:01:44,799 --> 00:01:52,400
sales, right, you know,
subprime auto bubble repossessions, all of that,

27
00:01:52,760 --> 00:01:57,000
it shows that interest rates, higher
rates are definitely impacting the auto bubble

28
00:01:57,079 --> 00:02:00,480
market. It's no longer a core
market. Some bubble marketing, all right,

29
00:02:00,959 --> 00:02:05,480
you know, just tell us what
your thoughts are on. Right bye.

30
00:02:05,799 --> 00:02:07,479
On my way to work, I
drive it by a very large auto

31
00:02:07,599 --> 00:02:15,439
auctioned parking lot. It's extremely large
Southern and you can tell because you know,

32
00:02:15,639 --> 00:02:23,199
seven eighth nine those park lots were
filled to the brand and then slowly

33
00:02:23,240 --> 00:02:27,439
over time that park lot emptied out
as the economy got better and those cars

34
00:02:27,439 --> 00:02:31,039
were sold off and the repossessed cars
were less and less and less. Now

35
00:02:31,120 --> 00:02:36,479
that park lot is filling up again, right, And last year the auto

36
00:02:36,479 --> 00:02:42,080
industry repossessed one million, seven hundred
thousand automobiles. Right, So that's an

37
00:02:42,120 --> 00:02:46,520
indicator all by itself, say,
with foreclosures on the house, and the

38
00:02:46,560 --> 00:02:52,439
foreclosures are way up right, because
between inflation and between the rights and interest

39
00:02:52,479 --> 00:02:57,000
rates, the consumer can't do everything
right. Something's got to go, and

40
00:02:57,039 --> 00:03:00,759
when they start balling behind on paying
their bills, it's to death spiral eventually,

41
00:03:00,879 --> 00:03:07,120
so repossession or foreclosure. Right.
So so you got to look beyond

42
00:03:07,120 --> 00:03:12,800
the numbers in other words, because
you know what they say, statistics lie

43
00:03:12,919 --> 00:03:17,919
and liars use statistics right, absolutely
absolutely, like the leading economic indicators if

44
00:03:17,960 --> 00:03:23,560
you look at them all right,
for the US, the leading at Kinneplic

45
00:03:23,639 --> 00:03:28,719
indicators are mostly pointed down right right. Give you some example, new orders

46
00:03:28,719 --> 00:03:35,039
were down point two two. Weekly
average initial claims were down point one eight

47
00:03:35,400 --> 00:03:42,560
building permits private housing or it looks
like they was actually positive building permits private

48
00:03:42,560 --> 00:03:46,800
house and negative point one or interest
rate spread on the Fed funds against a

49
00:03:46,879 --> 00:03:53,599
tenure that was down point eighty five. Those are all that and about twenty

50
00:03:53,639 --> 00:03:57,719
five other indicators are all pointed down, not up. So that's why there

51
00:03:57,800 --> 00:04:09,120
is a a conflict between consumer competence
and the real numbers. So the real

52
00:04:09,159 --> 00:04:15,439
world and the world of statisticians,
there's a disconnect. Huh, absolutely absolutely,

53
00:04:15,519 --> 00:04:19,279
And you think about it in your
own world. You know you're looking

54
00:04:19,319 --> 00:04:23,560
at it. Most people looking at
four and ks and bank statements, well,

55
00:04:24,160 --> 00:04:28,639
those haven't been badly impacted over the
last six months because the markets trended

56
00:04:28,720 --> 00:04:33,720
up in twenty twenty two, so
it kind of blosts over the downturn from

57
00:04:33,800 --> 00:04:40,480
twenty twenty one. But at what's
going on is the speculation is off the

58
00:04:40,560 --> 00:04:45,319
charts. The day trader speculation is
off the charts. They have all sorts

59
00:04:45,360 --> 00:04:48,680
of investments that are coming to the
forefront right now that are pure respected that

60
00:04:48,680 --> 00:04:53,879
they have derivative derivative. Right,
So they have a derivative that is based

61
00:04:53,920 --> 00:04:57,920
on a derivative, right, Yeah, and people are buying them up.

62
00:04:58,000 --> 00:05:02,319
Let them right. It doesn't make
sense. There's no raptional sense the markets

63
00:05:02,399 --> 00:05:06,120
right now. The evaluation of the
S and P five hundred is seven times

64
00:05:06,360 --> 00:05:12,399
what it should be. Right,
that's a powerful statement. It can't keep

65
00:05:12,439 --> 00:05:15,720
this up, and it's going to
be it's going to be forced back into

66
00:05:15,759 --> 00:05:19,759
reality. As the credit bubble continues
to contract, the supply of money is

67
00:05:19,800 --> 00:05:25,839
being destroyed. And that's what's happening. As the money supply, the end

68
00:05:25,839 --> 00:05:29,439
to money supply contracts, they've lost
in money right now is lower than it

69
00:05:29,600 --> 00:05:32,439
was in nineteen thirty. So all
these things are telling us that there's bad

70
00:05:32,519 --> 00:05:38,759
news come. Yeah, so bad
news is coming. But the government's job

71
00:05:38,879 --> 00:05:44,680
is to put that bad news off
as long as it possibly can and keep

72
00:05:44,720 --> 00:05:49,519
you buying and acting in the so
called best interests of the economy. Right

73
00:05:49,839 --> 00:05:55,040
yeah. But at some point they
can't hide it anymore because pretty soon you'll,

74
00:05:55,160 --> 00:05:57,680
as they say, you know,
if your neighbor loses his job,

75
00:05:58,040 --> 00:06:00,800
it's a recession. It's you to
lose your job, it's a depression.

76
00:06:00,879 --> 00:06:04,800
Right yeah. Government can't hide one
point two trillion dollars in interest pamments.

77
00:06:04,839 --> 00:06:11,160
They can't hide thirty four trillion dollars
in debt. They can't that the unfunded

78
00:06:11,199 --> 00:06:16,360
liabilities are now at two hundred and
fourteen trillion dollars and the failed bond auctions

79
00:06:16,360 --> 00:06:21,560
are getting into the headlines now as
well. All right, the bond vigilantes

80
00:06:21,600 --> 00:06:26,759
have made their presence known. Huh
yeah, what what do you think will

81
00:06:26,800 --> 00:06:30,600
happen when the interest rates go down
to the you know, junk bond aread

82
00:06:30,680 --> 00:06:34,360
and stay like b rated and C
rated bonds, They're going to get abliterated,

83
00:06:34,399 --> 00:06:39,240
all right. So there isn't a
win win here until the credit bubble

84
00:06:39,279 --> 00:06:46,240
comes into alignment with the consumer's expectation
for value. Okay, so uh yeah,

85
00:06:46,319 --> 00:06:48,680
you know it's their job is to
keep the party going. It used

86
00:06:48,680 --> 00:06:53,079
to be to take the punch bowl
away, which they've already done, but

87
00:06:53,199 --> 00:06:56,199
they're trying to make you think that
the punch bowl is still there, right,

88
00:06:56,720 --> 00:07:00,240
yeah, keep in mind carry it's
an election here as well. Almost

89
00:07:00,279 --> 00:07:05,920
forgot you could. All right,
So what is you what are you telling

90
00:07:05,959 --> 00:07:11,759
your clients? What are you as
an investor doing here? Well? You

91
00:07:11,839 --> 00:07:15,079
know, I expect, you know, in this environment, that we're going

92
00:07:15,120 --> 00:07:17,800
to see this year as an unposed
and my expectation is December is going to

93
00:07:17,800 --> 00:07:25,079
be a very disappointed month economically in
the numbers. And with that expectation,

94
00:07:25,240 --> 00:07:30,319
you're going to see the political policy. People change directions rapidly because it's an

95
00:07:30,319 --> 00:07:33,360
election year, so they're going to
start promising us what we want to hear,

96
00:07:33,839 --> 00:07:38,839
right, So they're going to start
rapidly changing their positions and the focus

97
00:07:38,879 --> 00:07:43,079
on what they're talking about. But
it's not going to stop. What's going

98
00:07:43,199 --> 00:07:46,560
to happen within the markets. The
consumer is going to revolt against the government's

99
00:07:46,600 --> 00:07:51,399
policies and the corporate greed, right, and they're going to revolt just by

100
00:07:51,480 --> 00:07:56,160
They're going to pull back on their
spending. They're going to pull back on

101
00:07:56,279 --> 00:08:00,560
new cars, houses, vacations,
camper boats, planes, trains, and

102
00:08:00,600 --> 00:08:05,399
automobiles. They're going to pull back
and that will cause enough pain that will

103
00:08:05,879 --> 00:08:11,279
force a change in direction. Our
country is going to be humbled right before

104
00:08:11,319 --> 00:08:16,000
restored, right, and we have
to go through the humbling process because of

105
00:08:16,040 --> 00:08:20,279
all this debt and all the mismanagement
has to be dealt with. Okay,

106
00:08:20,360 --> 00:08:26,240
So tell me Russell, what's your
take on rising gold and precious metals prices.

107
00:08:26,040 --> 00:08:31,720
I would be a buyer of silver
first, not gold, but eventually

108
00:08:31,759 --> 00:08:37,000
when that ratio from eighty seven right
now goes back to fifteen, sell your

109
00:08:37,039 --> 00:08:39,559
silver, buy more gold. But
right now, I would be a buyer

110
00:08:39,639 --> 00:08:45,879
of gold or silver, but preferably
silver. Okay, silver, the shiny

111
00:08:45,919 --> 00:08:48,759
metal as we call it. And
how the question that you ask carry is

112
00:08:48,799 --> 00:08:52,440
how high will it go? Well, if you do any research, there's

113
00:08:52,480 --> 00:08:56,879
a lot of speculation anywhere from one
hundred dollars an ounce on silver. I've

114
00:08:56,919 --> 00:09:01,240
seen one thousand dollars announce on silver. That seems like pine in the sky,

115
00:09:01,360 --> 00:09:05,960
but it's not not if you understand
that it's been suppressed for sixty years

116
00:09:07,240 --> 00:09:09,440
and the dollar is in trouble.
So if we have a combination of the

117
00:09:09,480 --> 00:09:16,919
dollars no longer the world's currency reserve
and it's devalued significantly, suddenly those commodities

118
00:09:16,919 --> 00:09:20,559
are going to look really, really
attracted to a whole bunch of investors and

119
00:09:20,639 --> 00:09:26,399
consumers. All Right, So we've
seen the oil gyrating quite a bit,

120
00:09:26,919 --> 00:09:31,519
but it's getting back up to eighty
dollars the barrel. The world seems to

121
00:09:31,519 --> 00:09:35,879
be happy with that price. If
gold and silver go up, then you

122
00:09:35,919 --> 00:09:39,919
think oil is going to follow a
suit. No, here's why, because

123
00:09:39,960 --> 00:09:43,559
they got that oil to go back
up by cutting back on the supply of

124
00:09:43,639 --> 00:09:48,120
oil, right, but the demand
is going down. So if to track

125
00:09:48,240 --> 00:09:50,639
the demand. The demand is going
down, and the other way they can

126
00:09:50,639 --> 00:09:56,519
compensate for that is to increase or
decrease. That's supply right now. Okay,

127
00:09:56,600 --> 00:10:00,480
So you know, I read an
interesting article a few weeks back that

128
00:10:01,240 --> 00:10:07,480
in spite of the current occupants antipathy
towards petroleum, oil and all forms of

129
00:10:07,519 --> 00:10:11,559
so called fossil fuels, although I've
never seen a fossil come out of the

130
00:10:13,480 --> 00:10:16,120
out of the pump at the gas
station, but hey, be that,

131
00:10:16,639 --> 00:10:22,679
Oh wow, have you seen fossils
come out? But be that as it

132
00:10:22,799 --> 00:10:28,320
may. American production is actually at
all time record highs thirteen million barrels per

133
00:10:28,440 --> 00:10:35,159
day and with no decline in sight, even with lower ring counts. You

134
00:10:35,200 --> 00:10:39,840
know, OPEC's hands are kind of
tied, aren't they. Well, we're

135
00:10:39,879 --> 00:10:46,279
not using our capabilities not only in
oil, but in also gold, silver,

136
00:10:46,320 --> 00:10:52,039
and all the other refined metals because
there's so much bureaucracy to get these

137
00:10:52,159 --> 00:10:56,000
new discoveries to the market. It
takes six eight years to get the mineral

138
00:10:56,080 --> 00:11:03,159
discoveries to the market. Same with
oil. We're not using our oil wealth

139
00:11:03,399 --> 00:11:07,440
as a weapon to lower the oil
prices, right, We're using it to

140
00:11:07,519 --> 00:11:11,639
fulfill our need for oil within our
country, but we're not exporting into the

141
00:11:11,679 --> 00:11:16,039
world to force the price to silver
down in the Key Saudi Arabia, in

142
00:11:16,200 --> 00:11:20,559
Russia and China and check mm hm. And we should be and we could,

143
00:11:20,600 --> 00:11:24,000
we could be, and we should
be doing that. Okay, I'll

144
00:11:24,039 --> 00:11:28,080
buy that. So again we look
for harder assets. What's your take on

145
00:11:28,200 --> 00:11:33,919
real estate? To you know,
supply is down, but certainly the markets

146
00:11:33,960 --> 00:11:39,200
down. The homebuilders last week just
reached a five year high. To me,

147
00:11:39,639 --> 00:11:45,200
the homebuilders are like the perfect analogue
for interest rates. My problem with

148
00:11:45,200 --> 00:11:50,799
the homebuilders what data are you reading
and who supplied the data on that information?

149
00:11:52,279 --> 00:11:56,039
Right? I do not trust the
home builder as information if it came

150
00:11:56,039 --> 00:11:58,720
from them, because they have invested
interest in keeping the price of houses up.

151
00:12:00,200 --> 00:12:03,720
They have a thousand houses under construction
that they need to sell and if

152
00:12:03,759 --> 00:12:07,639
you look at all the big owned
builders in this country, they have a

153
00:12:07,799 --> 00:12:11,279
big stake in this to keep the
house prices up. I don't trust the

154
00:12:11,360 --> 00:12:15,879
data if it comes from that.
I look at what's going on and I

155
00:12:15,919 --> 00:12:20,200
will see the inventories and in lots
of these beacon Why would somebody sell a

156
00:12:20,240 --> 00:12:24,080
house with a three percent mortgage to
move into a house with a seven or

157
00:12:24,080 --> 00:12:28,200
eight percent mortgage doesn't make sense,
I know, but I know what you're

158
00:12:28,240 --> 00:12:33,440
saying. But people actually do these
things, right, Yeah, some people

159
00:12:33,519 --> 00:12:37,519
do. I just sold my house
carried and it's going to be the worst

160
00:12:37,600 --> 00:12:41,360
investment those two young people ever made. Yeah. Oh well, cave on

161
00:12:41,519 --> 00:12:46,480
ampter right. Yep, yep,
yep. My heart goes out to people

162
00:12:46,639 --> 00:12:50,320
that are buying houses now. So
to answer your question, Kerry, yeah,

163
00:12:50,360 --> 00:12:52,720
I would be saving money so that
I can buy in another year when

164
00:12:52,759 --> 00:12:56,440
the market is down, all right. I wouldn't be in by in real

165
00:12:56,519 --> 00:12:58,440
estate until you can get a good
deal on it. It's not now.

166
00:12:58,480 --> 00:13:05,000
There's still the prizes are still inflative. Okay, So there's lots of good

167
00:13:05,039 --> 00:13:11,519
news ahead and buy things of value. Obviously not all housing markets will be

168
00:13:11,559 --> 00:13:18,080
affected equally on this, not but
you know it's it's actually the housing market.

169
00:13:18,080 --> 00:13:22,000
It's a bunch of sub markets scattered
across the country, hundreds of them

170
00:13:22,120 --> 00:13:26,159
really, So good time to sell
a house though, huh. But fire

171
00:13:26,399 --> 00:13:31,320
Just take eight, right, and
remember what eight felt like in nine the

172
00:13:31,320 --> 00:13:35,279
beginning of nine, and just multiply
that by four or five times and then

173
00:13:35,320 --> 00:13:37,440
acts us up. Do I really
want to be a part of that?

174
00:13:37,799 --> 00:13:41,360
The answer is no. Eight oh
nine was a real estate bubble. This

175
00:13:41,399 --> 00:13:45,960
is a global financial bubble. Look
what's going on in China. Look what's

176
00:13:46,000 --> 00:13:48,399
going on in very Commony. Look
what's going on in Germany and Europe.

177
00:13:48,720 --> 00:13:54,519
There is no in the world that
anybody can convince me that how we report

178
00:13:54,600 --> 00:13:58,759
information in this country, Uh lines
up with those economies. It doesn't.

179
00:14:00,120 --> 00:14:05,120
Yeah, there's a definite disconnect.
Eh, absolutely, absolutely, So three

180
00:14:05,159 --> 00:14:09,840
sparts over booksmarts. Yeah. Well, experience is often the best teacher,

181
00:14:09,919 --> 00:14:13,679
but often the most brutal teacher as
well. Right. You know, if

182
00:14:15,039 --> 00:14:18,039
our kids never learned some hard lessons, they wouldn't have a whole lot of

183
00:14:18,120 --> 00:14:20,519
character. So life is full of
hard lessons. That's how we get our

184
00:14:20,600 --> 00:14:26,000
character. Yeah, and stuff happens, right, it does, all right?

185
00:14:26,240 --> 00:14:28,639
Hey, tell us where we find
you? How do we connect with

186
00:14:28,679 --> 00:14:31,879
you? On the web. You
can find me at a screen FG dot

187
00:14:31,879 --> 00:14:37,799
com from my website Grand Financial Group
in self ones or Connecticut. That's where

188
00:14:37,840 --> 00:14:43,360
I put my desk and in the
other way that you want to contact me.

189
00:14:43,480 --> 00:14:46,440
So eight six oh sixty two three
five five seven is my phone number.

190
00:14:46,559 --> 00:14:50,720
All right, hey, I've got
a question for Russell myself. Shoot

191
00:14:50,759 --> 00:14:54,679
me an email kl at Terry Lutts
dot com. The Russell's u ur L

192
00:14:54,759 --> 00:14:58,919
will be in the show notes of
this interview on Financial Survival Network dot com.

193
00:15:00,000 --> 00:15:03,679
I'd urge you to go and subscribe
if you haven't done it already.

194
00:15:03,600 --> 00:15:07,600
Russell A pleasure is always thanks for
stopping by. All right, Merry Christmas.

195
00:15:07,639 --> 00:15:09,799
Guide into your audience.