It's more posturing because there is absolutely no way on in any scenario, that
new United States allows itself to default on its obligations. Because the dollar is
the worldwide currency, it's the currency that's used to trade oil, it is
the standard throughout the world. The United States will never put that positioning at
risk. You're listening to Carrie Letz's Financial Survival Network, where you get valuable
information you just can't find anywhere else to thrive in today's trying times. You
need the Financial Survival Network now more than ever. Go to Financial Survival Network
dot com and get your free newsletter and gift. Financial Survival Network now more
than ever. Welcome you are listening to watching the Financial Survival Network. I'm
your host, Carrie Letz. Well, we've got the I guess it's annual
or almost annual debts kabuki dance taking place in DC now. If you're not
aware to date, they've they've raised. Congress since nineteen sixty has raised the
debt ceiling seventy eight separate times to permanently raise or temporarily extend or revise the
definition of debt limit. That's forty nine times under Republican presidents and twenty nine
times under democratic presidents. So that should tell you that this thing really kind
of should transcend politics. They're both both parties are fiscally irresponsible and have showed
absolutely no desire to reign in spending and to reprioritize government and preferably to stop
the government the country in the world from going bankrupt. But maybe this time
is different. Carl Gould is with us now by him at Karl Gould dot
com. Carl, great to have you back on. So why is this
time different than all the others? Hey carry great to be here. It's
not different than all the others. It's the same as all the others.
And what the death ceiling becomes as a negotiating point that every politician knows is
coming at some point, because what happens is, you know, the country
expands, they make more money. We have a greater GDP gross domestic product,
which is like our salaries, right, So the percentage of what you
are able to borrow or what is responsible to borrow also can increase, and
so by definition, the debt ceiling will increase as the company grows. Each
party knows that they all know that it's coming, but they use it as
a bit of a bargaining chip so they can get other items resolved as part
of the debt ceiling. All right, So so this is like death taxes
and the debt ceiling, right, pretty much, it's inevitable. There's now
and now the debt ceiling changing and rising doesn't have to be a bad thing.
It does mean we are irresponsibly raising the debt ceiling. It just means
that at some point, if you look at a percentage of revenue, the
debt ceiling will follow. We have to, of course, keep it under
a certain percentage, just like every every person out there is not going to
apply for a or get accepted for a mortgage if it's over a certain percentage
out there salary. But as your salary goes up, your ability to borrow
goes up as well. This is the same thing. But Carl, doesn't
it reach a point where it's unsustainable? And maybe we're at that point already
where we can't grow ourselves out of it. It used to be the debt
the deficit would be a couple of billion, Then it went to tens of
billions, then it went to hundreds of billions. Now we're in the trillion
dollar ms. What don't you think that's important? Doesn't it make a difference
at some point? There there is no question, and all of the entitled
programs during COVID increased the debt to historic eyes, and so it does need
to be reined back in. There is no question about it. And that's
exactly what's happening now. The Republican side wants certain spending measures reduced, the
Democratic side wants certain entitling programs to stay, and that all of the negotiation
that we're hearing about now has everything to do with everything but the debt ceiling.
They're not going to approve the death ceiling unless they get their their programs
push forward, right, So it's a political bargaining chip effectively, is what
you're telling exactly. And whoever has um you know, whoever has the majority
in Congress currently the Republicans can exert more influence. And so they're playing a
bit of game of chicken right now. But in the end they're all gonna
come to the table or they are they really playing a game of chicken?
Or is this just all fostering and just playing to the public. It's more
posturing because there is absolutely no way on in any scenario that the United States
allows itself to default on its obligations. Because the dollar is the worldwide currency,
if it's the currency that's used to trade oil, it is the standard
throughout the world. The United States will never put that positioning at risk.
All right, But there we come into the end of the dollar being the
sole reserve currency, now, aren't we really? I don't know that we're
coming to the end. Remember every time you borrow money and you signed a
thirty year mortgage, you have locked in that dollar for the next thirty years.
Anytime somebody places a foreign investment in our country and that invest if it's
a bond and it's a ten year bond, well that dollars locked in for
ten more years. That mortgage is locked in for twenty more years or thirty
more years. So the where that disruption is going to come from is digital
currencies, cryptoc and sees and other digital currencies. That is what is going
to disrupt the monetary system overall. But the dollar will remain as the world's
currency for the immediate time. Be okay, Well, hopefully you're correct on
that score. I don't know. At some point the world is subsidizing US
now subsidizing the dollar. Don't you think that you're going to get tired of
this at some point? Well as other opportunities and other options materialize, that
is what is going to put the dollar at risk. And so I think
the big change you're going to see is not necessarily around paper currency. It's
going to be around digital currency because right now, cash is the only way
that you can exchange value with another person without an intermediary. In other words,
Kerry, I can give you a dollar, you can give me something
back that's worth a dollar. We didn't need anyone else's permission for that.
I gave you a dollar, you gave me back value in a dollar.
That's the only Please, there's that one to one exchange. But right now
it's not the physical currency. Well, cryptocurrency and other digital currencies are trying
to become is a one to one, peer to peer exchange of value that
does not have an intermediary. That's where the change is going to come in
because now governments can't regulate the currency or the transaction. Okay, so yeah,
so this cryptocurrency is another step towards enslavement, then, isn't it.
Then now there will be. They're just trying to figure out how to regulate
it and how to enforce it. Because right now, if you have a
currency, it's because you have an army and you have a government, right
And if you have a strong enough government and a strong enough army, then
your currency will be stable and will be welcome in the marketplace. The United
States has both a great army, a great military, and a very stable
government, and so that's that's one of the reasons why the US currency is
the world's currency, and so h with it. When it comes to a
digital currency, it is likely going to be backed by a military and backed
by a government, all right. So when we're looking at the stability though,
how stable really is the United States at this point? Well, relatively,
the United States is one of the most if not the most stable currency
in one of the most stable economies. The overall monetary system is what has
some instability in it. Certainly, China is making some advances, but their
population, def their population is going to start to contract over the next couple
decades. So that's actually going to put them in a really difficult position because
they will not be able to sustain their growth. So they are going their
policies of only one child or family is going to come back to haunt them
as they look to grow, because it is rejected that in the next two
decades they will drop below one billion people and so they will have twenty to
thirty percent less population that they have now. And so for a growing company,
sorry for a growing country that wants to be a player in the world
market, that's going to be borderline devastating for them. Yeah. Well,
in the meantime, though, we got this banking disaster that's still unfolding that
they haven't been able to get a handle on yet and making a lot of
people nervous about the long term stability and viability of the country. Are you
concerned about it? Well, I'm always concerned about the long term viability of
our country, and I'm not ready to ring the doomsday bell just yet.
I think there. I think we have a many more tools at our disposal
that we once had. But it will be a volatile and very rocky road
over the next three to six years, there is no question about it.
The you know, the economic downturns and the correction in the markets, when
you mix in COVID and the pandemic and all the dollars that were put back
into the system to stimulate it that all that XS cash excess equity, excess
value has to be flushed out and normalized. And so yeah, the next
three to six years are going to be rough, but they're going to be
rough for everybody. There's there's nobody that is going to be spared this next
correction that will come over the next few years. So it's going to be
tough. It's gonna be tough, there's no doubt about all. Right,
So we know it's gonna be tough. But what can you do about it?
How do you prepare for it as an individual? Are you totally helpless
or is there something you can do? No, there's a lot you could
do, and you want to just be a little bit more discretionary with your
spending. A formula that we advise our clients to use is to look at
anything that you're about to buy. You look at the asset and you want
to pay sixty percent of the asking price, or you're looking for bargains.
You're looking for deals because things are overchrist right now, So don't get caught
over buying an asset. And during the next three to six years. Don't
expect an asset to grow in its equity value. Manage it for cash flow.
So we say buy low and manage for cash flow during times like this.
And if you are if you are doing that and not expecting to get
some high you know, upside on the value or the equity value of the
asset, you should be in good seat, all right. So so buy
assets at a discount. Do we buy assets other than housing, assets that
are going to make you money cash flowing? Perhaps your guidelines there. So
if you need to buy a truck for your business, you need to buy
a printing press because you're a printer, you need to buy. If you're
a contractor, you need to buy you know, lawnmowers and trailers and trucks.
Look for them out on the secondary market. Somebody who has a change
in their life or change in their business or looking to sell. You could
likely get a good deal on that. So don't pay retail prices for the
next three to six years on assets because they will not appreciate. You want
to look for the good deal, and you want to you want to bargain
hunt right now, all right, So bargain hunting. You know, I'm
always bargain hunting, so that's nothing new to me. Sure, but make
sure that these are the kind of assets that perhaps aren't going to lose value.
Do we say it that way, or well, they are. If
you bought them at their peak, they might likely lose their value for a
period of time. But if you're buying below market value, when the value
comes down, you'll still be safe and you won't be underwater. You know,
if you look back at two thousand and five where people bought houses,
they bought them at the peak with low interest rates. Right, all of
a sudden the value the house comes down, and all of a sudden,
your interest rate goes up. Now you're underwater. Your mordig is high or
than the value of your own right, so you got underwater that way.
We're not doing it that way. Now. What we're doing is we say,
if you're asking for a hundred, I'm offering sixty. I'll buy us
somewhere in there. So when that asset drops down to eighty or seventy,
I'm still okay. All right. So but you know, like a house,
all right, For instance, you know that inflation is not going away
anytime soon. They don't have it under control. As much as they would
like you to believe that you got to live someplace anyway, you risk being
underwater to have your monthly housing payment to be below market value. You know
what I'm saying. Yeah, not necessarily. So for example, you can
have a house that's a perfectly good asset, but maybe the ownership or the
partnership that owns it is distressed. So you're not always just looking for distressed
assets. You're also looking for distressed people that are in distressed and need to
get out of it, and you could help them do that. So as
state sales and auctions and what people are selling their real estate portfolio or um,
you're you're buying a fixer upper, or you know somebody is looking to
down size or they're moving, So there are other avenues to explore. Sometimes
when you see a foresale by owner, that's somebody that's that you know might
be look have some have some distress or or their life circumstances have changed,
and you coming in and even buying it for less than they're asking actually helps
them out. So so there are a number of circumstances where you could buy
it a discount and it actually helps the seller Okay, got you there,
all right? So win win situation effectively or win not excuse me, m
but at this way, win win but not losing too much. Correct,
Sometimes you win by not losing, right, That's right. Sometimes you get
into a good deal if sometimes you avoid a bad one. Those are both
wins. All right. What about people as far as testing in yourself,
human capital, all that stuff, does that still apply or do you just
hoard cash and try to ride out the storm. No, you know some
people will hoard cash and just try to ride out the storm, and that
would be a mistake right now doing volatile times. Purchasers defer to what they
believe are experts, and they believe if they believe that company is the best
in its niche. So right now I would be directing my If I'm a
business owner, I'm directing my funds towards marketing and I'm brand building and I'm
show I'm sharing thought leadership to show that I have I'm a subject matter expert,
and I have a solid place in the market. Now, if you're
an employee, what I suggest is go to your boss and show them just
how indispensable you are, and tell them that you are willing to come back
into the office at least three days a week, because that's where that's what
businesses need. They need their employees back in the office. And I know
it was an employee's market for a while, but it's flipped back. It's
an employer's market now. And you don't want to be left on the outside
looking in. You know, business great businesses, most of them are grown
by having their employees collaborating and be around each other, have proximity. So
I would share with your with my boss just how indispensable I am, and
then I'm willing to come into the office. Yeah. But if you're a
millennial, the last thing you want to do or a gen zer, last
thing you want to do is go back to the office. Right, This
is true. This is true. You might not want to do it,
but it doesn't change the fact that that's what the company needs. And you're
putting yourself at a disadvantage if you're unwilling to do all. Right, So,
no matter how any masks you think you need to go back to the
office, go back to the office. Now. Remember most businesses have adopted
a hybrid policy. They're okay with you only coming in a few days a
week, right, So set your week up that way, right, and
it's and it doesn't have to be as bad as it seemed. To Remember
it wasn't all that long ago that you used to go into the office all
the time. So you know they if not, you are subjecting yourself to
you know, the marketplace and trying to find a job where that is going
to be the prevailing request is that you move back in to the office.
Come back to the office the bullet, huh, bite the bull, or
start your own business where you don't have to come in and come into the
office. But if you're working for somebody else, they're going to ask you
to come in right. Don't be insulted if the boss expects you to come
in right, that's right. Look before COVID, nobody was saying the way
to build a great company is to send everybody home. Nobody was saying that
that was out of necessity. We got a little there is, we got
a little sabbatical there. If you're able to engineer your life where you can
continue to do that, good for you. But understand that business owners know
and they've had the most success by having their teams working together at being in
an office together, and they're going to go back to that. Yeah,
and you know when Elon Musk is saying, you know, you got to
come back to the office or else, then it's time to get back to
the office. Exactly, exactly, all right, Well, interesting perspective on
things, Carl. Just tell us where we find you. How do we
connect with you on the web. Sure, you can connect with me by
going to my personal site Carl three six dot com. That's c A RBL
three six zero dot com and you can connect with all of my social media.
Interact with me anyway, Drop me a text, drop me a line,
and we can we'll connect there, all right. That link is in
the show notes to this interview on Financial Survival Network and the just click through
and it'll take you there. While you're at the site, just to sign
up for your free newsletter. We bring you a lot of interesting info like
things with Carl's discussing the economy, the dollar, all these things. And
if you got a question for me or Carl, I'll shoot us an email.
Heyl at carry Lutz dot com. Carrel always a pleasure. We'll talk
to you a gain real soon. Thanks Carry, Thanks for listening to carry
Lutz'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