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Well, you know that since the
last time you and I talked, the

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CPI and the PPI both came out, and the CPI was much lower than

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anybody expected. The PPI was actually
negative. There was actually deflation in commodities,

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and so all of a sudden,
it seems like inflation is and you

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know, you and I talked about
this. There are so many recession indicators

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out there that we would expect lower
inflation and maybe even deflation in the year

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ahead. You are listening to Carrie
Leutz's Financial Survival Network, where you get

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00:00:31,399 --> 00:00:37,039
valuable information you just can't find anywhere
else to thrive in today's trying times.

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00:00:37,240 --> 00:00:43,799
You need the Financial Survival Network now
more than ever. Go to Financial Survivalnetwork

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00:00:43,799 --> 00:00:50,560
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and gift. Financial Survival Network now more

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than ever. And welcome. You
are listening to watching the Financial Survival Network.

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I'm their host, Carrie Lutz.
John Rabino is with us. John,

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Hey, I just came back.
I got to share with you.

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This just came back. I was
in LA for conference in Woodland Hills,

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which was pretty Tony neighborhood, and
I mean I could not believe, like,

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right in the center of town,
there's a homeless encampment. They're supposedly

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building the La RAMS training center there, but they got ghost malls, they

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got ghost buildings that have been empty
for ten years. Remember that electronics chain

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Fries, which was a marvelous chain, the best chain out there, way

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better than any of the big boxes. Now that's been empty for about ten

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years. I just could not believe. And then I go to the airport.

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All right, I know, like
newcomer to the drug scene. But

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in front of the airport last night
as I'm leaving the night before, there's

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like people all over the place smoking
marijuana in front of the airport. John,

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what is the world coming to here? Well, you know what,

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maybe that's where they put all the
sand for Cisco of homeless people when they

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cleared them out, just lay a
good thing for presidents to come visit.

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So yeah, because they you know, they're somewhere, So maybe they just

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dumped them in some other homeless encampment. So you saw, you saw it

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double the normal number. But I
can't go. California is a nightmare.

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Yeah, I haven't newsome. It
is very likely going to be the Democrat

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nominee this time around, or possibly
no not guaranteed, but I think,

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you know, possibly good pump,
but he's so easy to run against.

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All you need to do is run
video of California right now, almost random

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video. You don't even have to
curate it or anything. Just drive down

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the street and post the video and
then say do you want this guy running

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the country? You know? And
that seems like that's all you would have

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to do. Man, I'm like, all for legalizing, liberalizing all these

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drug laws. It's a mental health
issue. It's not a criminal issue.

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But because the cost gets so high, people have to steal to support their

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habit, it becomes a criminal justice
issue. But in places like even New

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Jersey and numerous other states, the
deal is you got to go for treatment

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if you get arrested for crime,
and if you don't, then they'll send

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you to jail. This is what
we need for the rest of the country.

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You know, you get arrested for
drug crimes whatever, or you're a

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criminal because you're involved in drugs,
you need mandatory treatment get off of it.

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And you know it's doable, but
there's no will to do it.

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You know. Have you had Michael
Schellenberger on your show because he wrote a

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book about this called San Francisco,
Sico, San Francisco, San Francica.

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Yeah, and that's basically the conclusion
that he comes to in that book is

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that most of the people in the
streets are drug addicted or mentally ill,

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and therefore you can't fix their lives
by giving him a little apartment or something

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like that. The rent's not too
damn high. Is that that's not the

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call of it? No, no, he yeah, he actually said the

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idea of the normal middle class person
who loses their job and ends up on

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the street is a myth. Yeah, it's not what's there? So,

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yeah, and so you basically have
to have some kind of a some kind

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of what you know, a liberal
person might call coercive. Yeah, there

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has to be some kind of coercion
involved in here where they there's some behavior

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that's expected and if they don't behave
in that way, then there's a consequence,

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you know. And so we'll see. I think it's a self correcting

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thing, luckily, because different states
have different policies, so we know what

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works and what doesn't. And yeah, could not they got it more.

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Yeah, the guy the guys who
implement what doesn't work just get kicked out

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of office. Hopefully, that's so
easy to happen. One's upon a time

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that happened. But now they get
they get kicked up for higher office,

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right, yeah, you just move
them up to president or sent there's something

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like that. I mean, look
at our president now. He was basically

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a failed politician, and he failed
his way to success. You know,

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the way it's happening now is that
people are voting with their feet in states.

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They're moving out of states that are
badly run and into states that are

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perceived as being well run. And
there's a nasty side effect to that,

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which it leaves all the people who
like the way the badly run states are

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being run at home to vote and
people don't like it leaves so you don't

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get any pressure on the mayors and
the governors to do a better job because

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they get reelected no matter what.
So anyhow, that's that's a long that's

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a sessions worth of yeahs So,
but in the meantime, we got plenty

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of issues here. So what's with
inflation that just disappeared? Happy days are

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here again. Rates are going lower
and pretty soon before you know it,

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banks will start making loans again.
Who could believe that could happened. Well,

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you know that since the last time
you and I talked, the CPI

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and the PPI both came out and
the CPI was was much lower than anybody

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expected. The PPI was actually negative. There was actually deflation in commodities,

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and so all of a sudden,
it seems like inflation is and you know,

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you and I have talked about this. There are so many recession indicators

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out there that we would expect lower
inflation and maybe even deflation in the year

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ahead, and that's starting to kind
of play out. And so the question

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is is it good for the stock
market? Because stocks rocketed on this,

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We had this big relief rally,
Yeah, and huge ract you know.

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The implication, well, disinflation is
good for stocks when when the inflation rate

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is positive, but declining stocks usually
go up. But deflation is bad for

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stocks when when prices actually go down. And I kind of think that that's

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what we're going to see in the
next year, just because there's so many

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really major signs of weakness out there
and zero heads. Today they just said

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that the index of leading economic indicators
went down for like the sixteenth month in

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a row. You know, those
are things that point towards future economic activity,

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the things that make up that index, and you know, there's all

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kinds of other things that you and
I have talked about that indicate recession is

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coming. So if we get if
I'm not here already, yeah, yeah,

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if they don't go back and revise
everything and say, oh, it's

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starting in October, which is usually
the way it works and the way it

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could work this time, but that's
not good for stocks because an actual recession,

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especially if there's deflation during the recession, really lowers corporate earnings and that's

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bad for stock prices, and yeah, yeah, it's bad for the banks,

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and it also blows up a lot
of the leverage speculating community. There

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are huge sections of the financial world
that can't function in deflation. They need

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inflation and interest rates to be doing
what they're supposed to do and instead of

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just plunge it, so you know, you you end up with lower corporate

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earnings, falling stock prices, and
then a bunch of crises that governments have

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to step in and bail out.
And I kind of think that's Petsil's coming

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based on a lot of commous leaders. So this relief rally was probably kind

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of a delusional and it's probably going
to be reversed out pretty soon. That

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that would be my prediction for the
next few months. All right, Well,

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it'll be interesting to see, that's
for sure. I mean, uh,

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it definitely, it's definitely we're at
a real pivotal point here. We

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don't know what's going to happen,
but if these banks don't turn around fast,

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I don't see how that's going to
help. And kudos to you for

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that great article in zero Hedge today
by you, and we'll put a link

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in the show notes to that about
inflation just up and disappearing. Yeah,

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it's nice when zero hedge kicks up
your stuff, you know. That's uh

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that that site is a giant compared
to most of the regular sites up there,

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so very cool to see that happen
once in a while. Hey,

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So, you know, going back
to the recession, the phenomena, you

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know, the leading economic indicator is
down for the nineteenth straight month. Do

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we not have a recession? Now? How is there not a recession?

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Well, there's been all kinds of
indicators like that, Like remember how long

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the yield curve was inverted for and
it didn't cause a crash or anything.

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So there's a lot of stuff out
there that, you know, the indicator

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happens, but the economy doesn't follow
along the way it has historically done.

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And there are reasons for that,
and one of them is all those stimmy

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checks from Yeah Trillia. We basically
said, Okay, you don't have to

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go into work, so you stay
home and work from home. You don't

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have to pay rent, you don't
have to your student loans, yeah,

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or your mortgage or your student loans, and then we're going to send you

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checks at least every two months.
So people ended up accumulating what they call

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excess savings, and they've been spending
those excess savings for the last couple of

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years, and that's kept the economy
going when a lot of those indicators said

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that it shouldn't anymore. You know, the yield curve goes inverted. So

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you know, we've got plenty of
money, and now people have used up

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their excess savings, but they're putting
everything on plastic. So credit card debt

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is soaring, which is another negative
indicator. You know, when you get

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a trillion dollars of credit card debt
and rocketing delinquencies on credit cards, then

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you know, consumer spending has to
decline because all those people who are now

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having to pay on their student loans
but they're already maxed out on their credit

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cards. They're not going to go
out to Costco and spend five hundred dollars

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this weekend. It's just not going
to happen. So that's another recession indicator

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and possibly deflation indicator of many,
Yeah, of many or sure, and

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you just, uh, it's this
lead living in this world of illusion of

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00:11:05,000 --> 00:11:11,200
delusion, because I think the argument
is there quite persuasively that we were been

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having a recession for the past year. It's just that the some of the

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traditional indicators tend to lag anyway,
and real estate's been good, the job

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numbers have been okay, so we
hang our hat on that. But the

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reality is if you just printed money
and nobody had to do anything, you

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00:11:31,759 --> 00:11:33,759
know, it would look it would
look even better. Yeah, oh,

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the modern monetary theory thing would look
great for the first few years. If

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we just just printed money and gave
it to everybody, cut everybody's taxes and

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00:11:45,159 --> 00:11:48,120
stopped borrowing money, and just finance
the government with newly printed currency. That

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would work until why yeah, until
inflation spiking the dollar tanked, because that's

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00:11:54,720 --> 00:12:01,519
that's the logical conclusion of a product, you knows, where you just finance

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00:12:01,559 --> 00:12:03,879
yourself with newly created currency. So
you know, we kind of did that,

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really and we got a pretty good
economy out of it, at least

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in terms of headline numbers superficially.
You know, you mentioned real estate and

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00:12:13,279 --> 00:12:16,240
what was the other thing you mentioned
something else that labor, the labor market,

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and both of them under the surface
are horrendous, but the headline numbers

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00:12:20,120 --> 00:12:22,679
are okay. But you know,
in the labor market, you get you

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00:12:22,679 --> 00:12:28,240
get these big jog job numbers now
and then after the number comes out and

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00:12:28,279 --> 00:12:31,960
everybody gets excited about it, people
dig into it and say, oh,

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one hundred and seventy five percent of
the new jobs were we're part times.

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00:12:37,559 --> 00:12:41,080
That means we're losing full time jobs
at the same time people are having to

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00:12:41,120 --> 00:12:43,799
take on, you know, third
jobs in order to make ends meet.

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That's not a good job's number after
all. But by that time, everybody

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saw the headline number and came to
their conclusion, you know, and same

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thing with real estate. Link criss
are elevated still, but The reason they're

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elevated is because nobody's willing to sell
because the mortgage rates you're so high now

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00:13:01,919 --> 00:13:05,360
that if you sell a house with
a three percent mortgage and you have to

176
00:13:05,399 --> 00:13:07,559
take on an eight percent mortgage to
buy your next house, that doesn't work

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00:13:07,600 --> 00:13:13,039
for you, you know, but
exactly the case. Your mortgage, your

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00:13:13,039 --> 00:13:18,960
low rate, cut rate mortgage has
become a major asset. But it's also

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00:13:18,039 --> 00:13:22,799
to become a millstone around your neck
because if you need to finance your next

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home, it's going to cost you
to double and you'll buy half the house

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that'll wind up costing you the same. Why bother moving? It's like a

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00:13:31,919 --> 00:13:35,080
rent controlled apartment in New York City, isn't it. You get it?

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You never leave. You know,
you're ninety six years old, you're still

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walking up those stairs to that rent
control department. So I think that's true

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with a lot of houses now that
are you know, McMansions. They're completely

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00:13:46,519 --> 00:13:52,039
inappropriate for the sixty nine year old
baby boomers living there because they've got three

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00:13:52,080 --> 00:13:58,200
stories and the boomers have bad news, but they can't leave, you know.

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Yeah, So I think there are
three big sources of homes for sale.

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Inventory come in pretty soon, and
when they come, it's going to

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00:14:05,960 --> 00:14:07,879
be a deluge. And that is
the boomers who are going to finally have

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00:14:07,960 --> 00:14:15,240
to sell they can they can't get
upstairs anymore. And the Airbnb guys who

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00:14:15,480 --> 00:14:20,240
are terrified that the other Airbnb guys
are going to sell a bunch of their

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00:14:20,279 --> 00:14:22,039
inventory and push prices down, so
they're going to start selling. And then

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00:14:22,039 --> 00:14:28,519
the Wall Street guys who bought up
entire neighborhoods at bubble prices, and they're

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00:14:28,519 --> 00:14:31,759
going to behave like Wall Street always
behaves when they figure out they're in the

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00:14:31,799 --> 00:14:35,960
wrong asset class. You know,
they're going to just sell everything at whatever

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and just take the losses. So
we'll see a lot of private equity companies

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go bankrupt and dump their inventory.
And so those neighborhoods that got bought out

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for twenty percent over the market are
now going to be sold at forty percent

200
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under the market. So you know
howling is going to crash. There's just

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00:14:58,759 --> 00:15:03,039
no way around it. All that
is and we've already seen we've already seen

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commercial crash. That's a basket in
case, no end in sight. Eight.

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So bitcoin is up over thirty seven
thousand bucks, I got to admit,

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I've been buying it. I'd been
making some money on it because I

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would just buy some every Monday,
and then it would hit a price target,

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I'd sell it and then I'd begin
the process over again, and once

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a week I would buy x amount
of bitcoin. And yeah, it's been

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it's been a nice little run up
there. Well, those ETFs are finally

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coming that people have been talking about
for such a long time, you know.

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And when a physical ETF comes into
a market, it's usually really beneficial

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for stock prices like or for the
commodities price. Yeah, that happened.

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There was the GLD gold ETF came
out back in the day when gold was

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much lower, but then it bought
a bunch of inventory, got everybody excited

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and gold had a nice round,
and same thing with uranium and so the

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as I understand that the new bitcoin
and if they're in et aps are going

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to come in and they'll do the
same thing. They will buy a bunch

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those coins and take them, yeah
it spot and take them off the market.

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So people are excited about that prospect. Well, and the other thing

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that's nice about these ETPs is it
lets enormies buy the thing like, I

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don't know how to buy the bitcoin
myself. I wouldn't know what to do

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if you told me go out and
buy some bitcoin right now. But when

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that Etsy hits the market, I'll
know exactly what to do. I'll just

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go buy. I'll pull up that
ticker and hits sen or he'll hit buy,

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and that'll be that, you know. So I think a lot more

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buying will come into the bitcoin market
for sure, and it will probably pull

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up the other crypto currencies. So
I think that this is you know,

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other things being equal good for cryptos. And there might it might not be

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equal, like there might be a
you know, huge deflation herey crash right

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now that ups bitcoin and ethereum and
gold and silver all down with it.

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But just other things being equal,
that's probably why cryptos are going up right

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now. And I think he could
be right hey, and miracle of the

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old miracles, Argentina just elected libertarian. I didn't know that you could spell

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libertarian in Espaniel, but evidently you
can. Yeah, something was to do

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with libertad right, you know,
you're just a little thing like freedom.

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I didn't think but he cared about
that anymore. Well, you know,

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this guy sounds like a cross between
Ron Paul and Darnald Trump because he's you

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know, he's really emphatic, and
you know, he okay, being like

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Ron Paul, he wants to close
down the Central Bank, but he also

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wants to make abortion illegal from the
top down, you know, national law,

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and he wants to close down a
long list of government bureaucracies, and

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he wants to cut wealth are spending. So you know, you toss all

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that together and that you know,
some of those policies are conservative, some

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of them are populists, and some
of them are libertarian. So you know

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it's gonna be fun to watch.
But hey, he could always move to

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Chile after this fails, right,
Well, you know, Chile was the

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closest thing to a libertarian country that
we had out there for a really long

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time. And yeah, yeah,
yeah, well yeah, in Hong Kong

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got taken over a China, so
it's no longer that and forget that.

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You know, Chile had a very
free market economy because of the legacy of

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Pinochet, right, and so you
know, it wasn't all a good thing

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the way it happened, but Pinochet
left Chile with a relatively constrained public sector,

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relatively loaded taxes, relatively clean regulations, and so Chile was a very

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successful country for a long time.
Now they're kind of backsliding into socialism,

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but but who knows, we'll see. It's nice to see Latin America leading

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the way in that direction from once, you know, because usually that's they're

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they're pulling in the other directions a
lot of the time. Maybe they swing

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between dictatorship and socialist dictatorship, you
know, military and dictatorship and socialistic,

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and it's never they never find that
happy medium, and Chile was kind of

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that for a while. So maybe
Argentina will end up being that too.

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That would be nice, and I
would any man, it's going to be

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down. It would be like a
block of uh well maybe maybe you know,

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Argentina going back to libertarian things would
be enough of a push to get

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Chile to go back as well.
And then you would have the entire southern

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tip of South America. Plus you
could kind of throw Uruguay in there to

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some extent, not truly libertarian,
but not like the rest of the world

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either. So then you'd have three
major South American countries and then if it

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worked, it could become the basis
of a movement, right it could.

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I mean, that's hoping for a
lot in this world because so much of

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the bad stuff that's happening out there
is being blamed on capitalism, which means

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a lot of people vote socialists because
they perceive their problems to be caused by

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capitalism. But I wouldn't call what's
happening in the world today capitalism. It's

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capitalism. Yeah, yeah, you
know, it's an oligarchy in the US,

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which is you know, it's as
close to fascism as it is to

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pre American capitalism because it's basically a
partnership now between big corporations and loaded governments

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and these guys. You know,
that partnership is you know, censorious.

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They do not want free speech,
they don't want petition, and they don't

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want clean elections. So you know, that's that's not our view of capitalism.

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And so you know, I think
that the best thing we could do

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in the US right now would be
aggressive anti trust, where we go in

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and saying, you know, okay, Golden miss acts from now on,

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your five smaller bags, Japie Morgan
Chase twelve smaller bags, and you know,

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Pfizer, Yeah, you know,
right down the line, you just

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go into these uh, these industries
that are run by just a handful of

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the companies and break them up.
That's normally perceived to be a left wing

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policy, but I think, you
know, because it is. Well,

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see, you could get pop right
wing, populists and socialists to agree on

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that policy and maybe you get fifty
one percent of the vote out of that

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coalition. So it's conceivable that that
that, you know, it's it's that

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the populists and socialists get to get
for that one issue and then then anti

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war too. You know, once
they're together, they can look at the

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other things they agree on and say, all right, men, and we're

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going to close down the military empire. So again, that's that's asking for

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a lot of today's world fantasy.
It's a nice fantasy. It could happen,

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you know, that's like who's been
changed? Man. I don't know

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that one, but yeah, or
if we can, if they can pull

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it off, I support it wholeheartedly. Hey, so China and Saudi Arabia

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central banks sign a currency swap agreement. I'll give you my take on it.

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It doesn't mean anything because you got
like China with a crashing currency.

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Everything's crashing in China. It's just
a matter of time until three gorgeous damn

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takes everything out. Well, yeah, China is not the super powerful more

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to live that it seemed like it
was for a long time, because they've

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got a major financial crisis going right
now, and they've got a demographic collapse.

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It looks like they're on Their population
is shrinking and aging at the same

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time. So they're not going to
be a manufacturing powerhouse in the same sense

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that they were for the past twenty
years, you know. So, yeah,

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you're right. Just because China makes
a deal with somebody else, it

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doesn't mean what it might have meant
at one time. But what a currency

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squad swap means between countries is that
what's the Saudia currency? Is it real?

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No? No, yeah, I
don't know what the sound enough currency

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is. Okay, But anyhow,
you China and Saudi Arabia give each other

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or they buy each other's currencies,
right, so then they've got some of

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00:23:40,640 --> 00:23:44,119
the other countries' currency on hand and
they can use that to buy stuff from

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00:23:44,160 --> 00:23:48,359
that country without having to swap into
dollars in order to do it. So

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it's a it's a form of dedollarization, and it's a real thing in the

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sense that henceforth Saudi Arabia will be
selling oil to China for you want,

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00:24:00,319 --> 00:24:06,559
and that will do with those you
want, but they'll have them. Yeah,

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00:24:06,799 --> 00:24:07,440
well, yeah, yeah, I
see. That's the thing. You

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got to have something you can do
with that currency once you get it.

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And that's that's the problem with for
instance, Russia and India hutting these bilateral

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00:24:15,400 --> 00:24:19,839
trade deals because Russia will sell oil
or natural gas to India and go get

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rupees back, but they can't buy
anything with the rupees that they want,

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you know, so that that deal
is not working for them. And so

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that's part of the rationale for that
gold backed bricks currency everybody was talking about

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00:24:33,559 --> 00:24:37,799
for a little while. But yeah, we've talked about it for a week

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and now we're onto this. Yeah
yeah, but you know, it's the

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same process that's being worked out.
It's going to happen. I don't mean

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00:24:45,720 --> 00:24:51,640
to say dollar, it's supreme supremacy
forever. We pretty much abuse that position

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of trust. So the world will
have to find an alternative. And we

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want the world to find an alternative
because it's doing more harm than good to

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the United States in so many ways, the unlimited deficit spending, the unlimited

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00:25:04,119 --> 00:25:11,319
military industrial expansion, complex expansion,
all that as a result of the abuse

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of our trust of the world's reserve
currency. But hey, you know,

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this is just another step along the
along the path going to be interesting to

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00:25:21,039 --> 00:25:23,880
see what happens in any event.
That is it for today. Make sure

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00:25:23,920 --> 00:25:30,519
you go over to John's substack.
It's rabino dot substack dot com link in

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00:25:30,559 --> 00:25:37,319
the show notes, along with a
link to your superb article John about inflation

337
00:25:37,480 --> 00:25:41,480
disappearing that appeared on Zero Edge today
that tens of thousands of you out there

338
00:25:41,519 --> 00:25:45,000
have been reading. Hey, you've
got any questions or comments, email kl

339
00:25:45,319 --> 00:25:51,119
at Carrie LUTs dot com site Financial
Survival Network dot com. Sign up for

340
00:25:51,160 --> 00:25:52,640
your free newsletter, John. We'll
catch up to you in a couple of

341
00:25:52,680 --> 00:25:59,240
weeks. Thanks carry so Ya,
thanks for listening to Carrie Letz's Financial Survival

342
00:25:59,279 --> 00:26:03,039
Network, your solution to today's trying
times. For the latest, go to

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00:26:03,200 --> 00:26:10,440
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