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Speaker 1: Of course, you know, the world realizes that with those

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two elections, you cannot trust the Redmond b and you

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cannot trust China, you cannot trust the Ruble of being

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any health, and you cannot trust Russia. And for that matter,

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the whole world is reorganizing, even more so around us

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in every way, and the US is going to benefit

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from that a big way. And I bring those two

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elections because I'm arguing that the way the biggest countries

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in the US, whether it's the sp five hundred, Russell

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three thousand, are taking advantage of that global reorganization.

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Speaker 2: You are listening to Carrie. Let'sa's Financial Survival Network where

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you get valuable information you just can't find anywhere else

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to thrive in today's trying times. You need the Financial

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Survival Network now more than ever. Go to Financial Survivalnetwork

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dot com and get your free newsletter and gift. Financial

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Survival Network now more than ever.

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Speaker 3: And welcome you are listening to and watching the Financial

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Survival Network. I'm Carrie lust your host, and with us

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today is somebody I'd met at a Rick Rule symposium

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and you're going to like him a lot. His name

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is Professor Joel Littman, and he is chief investment strategist

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at Altimetry, which.

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Speaker 4: I'd like that name, by the way.

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Speaker 3: That is great branding, gives you a really good feel

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of what you do. And well, he's got some views

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on what's happening now on investing. He's a visionary, a

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forward thinker. Joel. We were talking pre call about the

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Internet boom and your view was, hey, in five years,

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if you're not a dot com, you're dead. And here

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we are twenty years later, everybody's a dot com. So

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with that introduction, great to have you on. Tell us

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first election is on everybody's brain that you and I've

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been through a lot of election cycles. You know, it's

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kind of like that joke you just told me. If

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two lawyers jump off the cliff, one's personal injury and

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one's a corporate lawyer, you know who's going to win.

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And the answer is, you know everybody. Well, the case

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the political campaigns, you want to pick a loser. The

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American public has consistently been the loser in every election cycle,

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with maybe one exception during Reagan, since I've been voting.

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So that with that word cautionary statement, what is going

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on with the election and the markets. I don't care

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about the particular candidates, their positions whatever. All I care

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about is impact upon the market at present and.

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Speaker 4: In the future.

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Speaker 1: Well, I would say the two most important elections for

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the health of the US economy and the U stock

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market already happened. Preston was gigiping for life in China

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and the second was putent for life in Russia. With that,

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it solidified that you cannot trust Russia or China as

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doing business. Everyone knows, and you're looking at a re

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organizing and reglobalizing the world around US law, US sovereignty,

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US respect for other countries, sovereignty unlike China and Russia,

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respect for the almighty dollar, the protection shipping lanes, the

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financial system that for all its problems, and all these issues.

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Who would you rather do with or trust court of

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law and the United States or the court of law

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in China where no company outside China has ever won

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successfully sued a company inside China, with the exception of

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Michael Jordan, who I think won like fifty to sixty

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thousand dollars after they stole a billion dollars or more

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of revenues of Air Jordan without a single dime to

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him for use. And so the court was like, you win.

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They call out a Pyeric victory. Yeah, you're talking about

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a peric victory.

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Speaker 5: Of course.

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Speaker 1: You know, the world realizes that with those two elections,

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you cannot trust the Redmond b and you cannot trust China,

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you cannot trust the Ruble of being any health, and

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you cannot trust Russia. And for that matter, the whole

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world is reorganizing, even more so around us in every way,

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and the US is going to benefit from that in

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a big way. And I bring those two elections because

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I'm arguing that the way the biggest countries in the US,

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whether it's the SP five hundred, Russell Tree thousand, are

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taking advantage of that global reorganization, the speed with which

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they've become less on China and non dependent on Russia.

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It's some black market stuff going on, but for the

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most part pulling out and saying I want to protect

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my IP, I want to protect our work. And then

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you look at the tariffs and the things that have

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been put in, not just a tariffs, but it was

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Trump that originally said no, no, we're not going to

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allow our best super chips to be able to oh,

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our best technology and chips.

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Speaker 4: To go to China.

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Speaker 1: And the truth is the Biden administration doubled down on it.

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Trump put in tariffs on China, and the Biden administration

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is doubled down on that.

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Speaker 5: The administration at.

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Speaker 1: The beginning they killed the Keystone Pipeline, but then they

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went and issued more construction and building permits for oil

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and gas related projects than even Trump did. So in

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many ways, you just have to say, well, if Trump wins,

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we know what his policies are and they're gonna be

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good for the US stock market, in US economy overrole.

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I think that's easy to understand it. On social topics

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or whatever else, that's a different story. You can vote

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who you want talking about what's good for the stock

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market and what's good for businesses.

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Speaker 5: There's your answer right now.

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Speaker 1: If Coplo wins, If she wins, and I don't think

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she will because the electoral if not forgetting about the polls.

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From an electoral map standpoint, she has a super majority

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in certain states, but not enough to carry so many

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of the states. And so let's say though that Kamalo wins.

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I think that she is so concerned with popularity and

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she's so starat of doing what will be right, that

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she will go center or at least will not have

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Congresses backing to continue to be left of Bernie Sanders,

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because she has been left of Bertie Sanders, let's face it,

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as a senator, right.

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Speaker 5: But it doesn't get it any more left than that.

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Speaker 4: Right. Right.

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Speaker 1: But as part of the Biden administration in the last

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three three years, they have been they did not raise

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taxes like people thought they would. They we still have

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the corporate tax cuts in place, which have been a

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big boon. The US was one of the highest corporate

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tax payers, which the laugh of curve, that's very, very bad.

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They were the business and you bring it down to something,

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you know, almost half at least forty percent cut you know,

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from thirty something to twenty twenty one percent, and you

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have a situation with US companies that they can compete,

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you know, in a much much bigger level, not just compete,

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but dominate because once you have that, all the US

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innovation and the R and D that's going on, which

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is bigger than.

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Speaker 5: The rest of the world combined.

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Speaker 4: Right.

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Speaker 1: So when you think of these things, I don't know

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that this election given I don't believe Kamalair can go

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anywhere near as left as she has been as a center,

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and Trump, we know, will be very pro US economy.

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US markets would be very good either way. I think

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the S top five hundred is still going to continue well.

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I think it'll do, you know, better under Trump than

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I wouldn't Kamala arisp simply because the uncertainty of what

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kamal Airis might do. But the end of the day,

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my guess is she probably goes more center and even

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center right the way Biden has on somebody China, Tariff's

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economic policy, whatever else.

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Speaker 4: That.

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Speaker 1: No, I think you're going to find a very very

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healthy US stock market over the next four or five

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ten years, and still a good place to, you know,

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for a passive investor to say, if I don't want

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to spend any time, I'll just put all my money

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the S top five hundred that I won't need for

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five or ten years, all my four one K and

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the sp FI under all my ir in THISB five hundred.

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That is a very very smart move for anybody now,

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regardless of what happens with the these elections.

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Speaker 3: Living so interestingly talking about markets, to me, I think

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the market has already put in it's uh, it's prediction

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that Trump.

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Speaker 4: Is going to win. I don't know who's going to win.

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Speaker 3: Honestly, I called twenty sixteen, I called twenty twenty this one.

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You know, my gut says Trump.

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Speaker 4: But I really.

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Speaker 3: Don't know, and I don't know in the in the

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scheme of things. Yeah, I think there's definitely important differences.

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But so we had this little mini crash three weeks ago,

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and you know, like my portfolio was still ahead even

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after the crash finished. As of today, I'm right back

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exactly where it started from.

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Speaker 5: And so what was the significance, if any.

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Speaker 3: Of that little crash and the direction from a lot

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of you out there, So I'm not minimizing it.

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Speaker 1: Well, I mean, if you were, you know, sitting on

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you know, video and a bunch of the other names,

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then you really got hit hard. But if you're buying

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you know, the S and P five hundred being long

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this P five hundred, you're right, You're still up seventeen

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plus percent for the year, even including the quote unquote

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crash we experienced. The fact of the matter is US

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corporate earnings on a uniform basis and not the gap

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accounting You cannot trust the as reported numbers of this

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stuff on CNBC or Bloomberg all day. Those numbers are nonsense.

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But if you convert to uniform accounting the way the

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biggest investors, the way my clients, right, my readers, two

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hundred and thirty of the biggest three hundred money managers

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in the world look at things. They say, well, I'm

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going to look at those gap accounting numbers. I'm going

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to convert to uniform. You do see that uniform earnings

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this year it is, you know, again getting to record highs,

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and people say, well, the stock market is the record high.

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I'm like, well, earnings is a record high. So don't

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they go together?

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Speaker 4: Right?

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Speaker 1: The expectation of earnings will continue to grow into twenty

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twenty five. Again for the SP five hundred is very

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very strong bro sup board. I don't see any reason

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not believe that. So the stock market may take corrections.

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But to have thought that this is a bear market,

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it was just not supportable by any bear market we've

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ever experienced in history. Valuational loan never sends a market

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to a bear market. True bear markets occur because of

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ce prices. It's always been that way. You can go

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back hundreds and hundreds of years. And while there are

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credit issues going on with the banks right now, right

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and we have had a few bank failures and what

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have you, We're probably gonna have a few more. Given

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what's happening with commercial real estate and how family banks

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are loaned, you know, our loaning money or have loan

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in the.

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Speaker 5: Commercial real estate.

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Speaker 1: We're going to still have some particular office right it

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is going to still be very very very bad. But

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if you can access public debt markets, it's a very

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very very healthy environment. And you've never had a long

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term deep equity bear market in the United States and

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in most of the developed world without an accompanying balance

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scheet crisis in terms of the debt on the books

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of the companies, it does not exist. So any rollover

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in the market is a correction. We have to keep

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looking to say, is there are there any fish in credit?

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But right now, for the biggest companies in the US,

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and so the biggest companies have a correction, that's a

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buying opportunity, right And we'd still be very very bullish

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five to ten years for the S and P five hundred.

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Speaker 3: So in my forty some odd years of investing. There's

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one rule that I have found to be a virtual

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absolute truth. I've never seen it not work, and that

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is stocks lie on a wall of worry.

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Speaker 1: Yes, yes, always, always, yeah, coming out of a If

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you remember in two thousand and nine early to the

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single probably best time to invest in the stock market,

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welle of the three best times, at least in my lifetime,

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at you know, fifty five years old, probably the three

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best time invest in the stock market was March tw

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and April two thousand and nine, and the headlines then

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kind of a Wall Street Journal and everyone else was

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the stock market has fallen forty fifty percent, it could

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fall another forty fifty percent, and exactly the time.

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Speaker 5: He could have been buying. And it stayed that way

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for the next two or three years.

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Speaker 1: Like, oh no, it's gonna rest financial arm again, and

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we're still not out of the woods that wall of worry.

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And the stock market recovered in what two and are years,

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all the losses from the peak of seven to two

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thousand and nine recovered just two and a half years.

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And then had you held on another form for six years,

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you had already been doing, you know, unbelievably better than

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you would have thought was a purely passive investment strategy

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of just by five hundred.

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Speaker 3: What about April of this year, Nobody everybody's saying recession, recession,

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recession at the and you know it takes off again

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and every yeah, right.

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Speaker 1: Well, at the end of the day, you're buying the

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S and P five hundred, You're not buying the US

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economy and the idea that stock market the US economy

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are the same. Thing is how many investors lose money

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and stay out when they should it. Almost half of

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the revenue of the SB five hundred is non US,

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and the US management teams have been very smart picking

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and choosing where to go around the world to generate

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that extra forty to fifty percent of revenue on top

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of the revenue they generate like locally in domestic markets.

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The other thing that they've been very good of but

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is saying we're going to keep our balance sheets safe.

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The balance sheets of the SP five and are unbelievably

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well built, meaning yes, they have more debt than ever

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a structure of their payment and the low interest rates

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they have it at over the last three, four or

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five years.

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Speaker 5: Is so low that even when they refy. It call

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it five percent.

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Speaker 1: It's still some of the cheapest rates in all of

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his to be perfectly honest, which means they're safe companies,

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which means no chance of a massive bear market. I

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was saying earlier that even in two thousand, when people say, well,

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what about the tech bubble, I don't know if people

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realize there was a massive credit crisis in two thousand.

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The private markets were dried up completely, right, banks were

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in trouble, but no one reports that. They said, oh,

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it's a tech bubble that bursts related. No, it was

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a tech bubble. Yes, it was expensive. However, with a

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massive credit price is on the ballance sheets of US

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corporation and that's when you get to bear markets. So, yes,

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we could have a recession in the United States. We

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might be in one right now.

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Speaker 4: We don't know.

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Speaker 1: The p SSAM rule, you know, and looking at unemployment

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would say we're probably you know, unemployment versus average is

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sahm SAM rule would say we're probably in a recession

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right now.

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Speaker 5: It's possible.

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Speaker 1: That doesn't mean that US companies can't still produce record

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profits and people won't still around the world invest in

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those companies regardless of what's happening if there is some

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kind of rolling recession or pockets or recession or an outright.

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Speaker 5: Two quarters of negative GDP in the United States.

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Speaker 4: Yeah, yeah, I couldn't agree with you more.

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Speaker 3: And yeah, it's just interesting that people have never accepted

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that truism because what it says is go against your emotions.

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And you know, like Warren Buffett, when there's blood in

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the streets, that's when you want to be out there.

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Speaker 4: And then when times.

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Speaker 3: Are really good, everything it can ever be bad again,

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that's when.

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Speaker 4: You want to get out right right.

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Speaker 1: Well, that plus a credit crisis. So euphoria by itself

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does not tell you when to sell the market. It's

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euphoria plus a credit crisis on the balance sheets of

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the companies that you're buying. You can have a credit

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crisis and souder loans, right, you can have a credit

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crisis of the US debt. That's not the same thing

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as yet. But you're not buying the US stocks. You're

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buying the US companies who are making money all over

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the world, and in so doing right, the earnings that

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you're getting there attracts global investors from all over the world.

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It still does the US market cap is more than

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the entire rest of the world combined, and rightly so,

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because US corporate profits. I have the uniform accounting you know,

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you know, we have a database of thirty two thousand

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companies globally.

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Speaker 5: They all have different accounting regimes.

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Speaker 1: Chinese accounting standards are different from from German accounting stands

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are different from UK accounting standards. We put them all

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in the same playing field, all thirty two thousand companies,

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so you get it through apples to apples comparison and

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US companies. The United States corporations generate more in corporate

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profit than the entire rest of the world's companies combined,

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which is why US stock market is bigger than the

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entire rest.

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Speaker 4: Of the world combined. They line up.

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Speaker 1: It's not a bubble, it's not a oh my goodness. Now,

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if there's a correction, all right, there could be, right,

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there could be. I'm just saying that I'd probably be

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a buyer, right if we see another decent correction.

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Speaker 3: Yeah, yeah, I'm thinking. You know, corrections are just normal

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for the most part, Joel. What causes a correction.

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Speaker 1: Well, it's you know, enough bad news and the things

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that it caused this one right where trouble with the

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I mean the current president dropping out of the race

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or being outright sick or getting COVID and then a

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horrible assassination attempt on truck that you know is still

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you know, people are still learning what on earth happened

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00:16:50,840 --> 00:16:52,360
there and what's really going on?

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Speaker 4: Right?

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Speaker 5: And could there be more of these issues?

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Speaker 1: Meaning is the safety anything like that of course is

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going to cause give you a reason when the stock

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market it had reached such highs and such mo metal,

346
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but calling five percent is just enough for people to go,

347
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oh yeah, but let me go buy back in because

348
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at the end of the day, the corporate earnings are

349
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not rolling over and as long as those earnings that

350
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keep going up, well, why want the stocks? Right and

351
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with very very sick balance sheets from a credit standpoint,

352
00:17:16,079 --> 00:17:20,079
unbelievably safe, really amazing that the c OUs for that.

353
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Speaker 3: One thing I learned in you know, in my investing,

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is that you may love or hate big companies, but

355
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big companies are always, in the long run way more

356
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stable than smaller companies. And I've had these magical small caps,

357
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some of them have done really well, but a lot

358
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of them, I should say not most a lot have

359
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blowed up. It's unusual for a company and the S

360
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and P five hundred to just walk in one day

361
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and the thing blows up for no reason that anyone

362
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could figure out.

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Speaker 1: Yes, and the size of the companies, their ability to

364
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access capital from a number of different places that a

365
00:18:02,720 --> 00:18:06,839
small five million, ten million, one hundred million dollar business can't, right,

366
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the ability to access to public debt markets and to

367
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get investors in debt from all over the world. Not

368
00:18:11,519 --> 00:18:15,960
just inequity gives flexibility to large companies that does allow

369
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them to one of the storms in a way. And

370
00:18:18,160 --> 00:18:22,039
so again for purely passive investing, S and P five hundred,

371
00:18:22,119 --> 00:18:23,559
next five ten years are going to do very.

372
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Speaker 5: Very very very well, right, very well.

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Speaker 3: So a while ago, basically the SEC kind of banned

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the Chinese companies from our stock markets.

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Speaker 5: Why would they do such a thing, j'all? Well, I

376
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think there were like five years late in doing it.

377
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Speaker 1: Eight years really never unallowed, right, It's because we have

378
00:18:40,640 --> 00:18:42,400
an intertional data base. One of the things we saw

379
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was companies in China that were filing financials with the

380
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New York Stock Exchange or the NASDAQ or whatever, or

381
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with the SC filing with the SEC, and the numbers

382
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were different than the numbers that they're filing with SEIC,

383
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the SEC of China. So one thing we found this

384
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so interesting is that Chinese companies are perfectly willing to

385
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lie through their teeth about their revenues, their profits, you

386
00:19:06,480 --> 00:19:09,160
name it, when they file with the US, but they

387
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are unbelievably scared of filing in Chinese with a Chinese

388
00:19:14,319 --> 00:19:17,920
authority because they're worried about getting disappeared, disappeared for the

389
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rest of their lives. So there is because you do

390
00:19:20,559 --> 00:19:23,319
have these anti corruption campaigns within China that sweep through

391
00:19:23,519 --> 00:19:26,400
and suddenly people just go missing. And so when you

392
00:19:26,440 --> 00:19:30,400
get the financials directly from China from the SAIC and

393
00:19:30,480 --> 00:19:33,680
you start looking at those numbers and adding them up,

394
00:19:34,119 --> 00:19:37,519
you find that that one one out of three companies

395
00:19:37,519 --> 00:19:43,799
in China public listed companies is at risk through bankruptcy

396
00:19:44,160 --> 00:19:45,960
or default on their loans and balance.

397
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Speaker 5: Sheets that are uglier than anything you.

398
00:19:47,839 --> 00:19:50,079
Speaker 1: Saw in the nineteen thirties in the United States. What

399
00:19:50,160 --> 00:19:51,640
China is going to go through the next two decades

400
00:19:51,640 --> 00:19:54,799
is worse than the Great Depression. And yeah, and yeah,

401
00:19:54,799 --> 00:19:57,799
in the US, I'd say if we looked at the

402
00:19:57,799 --> 00:20:00,799
six thousand companies you cover in the US, maybe one

403
00:20:00,839 --> 00:20:04,680
percent have a risk of default one, whereas in China

404
00:20:04,839 --> 00:20:07,279
it's of six thousand companies we cover in China, thirty

405
00:20:07,319 --> 00:20:11,559
three percent thirty four percent have horrible ballot sheets. So

406
00:20:11,559 --> 00:20:15,640
it's not just the Chinese government, municipalities, the individual Chinese

407
00:20:15,680 --> 00:20:18,799
companies have greatly overlovered unbelievably. So it's going to be

408
00:20:18,880 --> 00:20:21,039
very very bad for the Chinese accounty for the next

409
00:20:21,039 --> 00:20:25,440
twenty years, twenty years, twenty years. That's why debt is

410
00:20:25,480 --> 00:20:29,160
a four letter word, because eventually all debts have to

411
00:20:29,200 --> 00:20:35,640
be have to be handled, paid off, defaulted, liquidated, forgiven, renegotiated,

412
00:20:35,680 --> 00:20:39,000
whatever it is, Yeah, deal with them and the world.

413
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And foreign direct investment has collapsed to zero, if not

414
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negative at this point in China, meaning not only is

415
00:20:44,559 --> 00:20:48,480
the net new investment falling that there's enough divestitures telling

416
00:20:48,480 --> 00:20:50,400
that you could argue foreign direct investment in China is

417
00:20:50,440 --> 00:20:52,200
now negative. So where are they going to get the

418
00:20:52,240 --> 00:20:54,839
extra money to do what you said, to renegotiate, to

419
00:20:54,880 --> 00:20:56,720
bail out to whatever they got one place to go

420
00:20:56,759 --> 00:20:59,480
in as Chinese government, and even the Chinese government doesn't

421
00:20:59,799 --> 00:21:03,079
kind of money to bail out a third of Chinese companies,

422
00:21:03,160 --> 00:21:05,559
which is what our data is showing at this point.

423
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Speaker 3: And it's terrible, and that's part of the reason why

424
00:21:08,680 --> 00:21:11,400
markets in the US have been so good to that

425
00:21:11,559 --> 00:21:15,200
flight capital. Like I realized the Chinese scan when I

426
00:21:15,240 --> 00:21:18,359
went to the Bahamas and they were building this huge

427
00:21:18,480 --> 00:21:22,599
new development all of Chinese money in Nassau, and I

428
00:21:22,759 --> 00:21:25,000
realized they weren't building They said they were building it

429
00:21:25,039 --> 00:21:27,799
for Chinese gamblers to come visit. And I said, there

430
00:21:27,880 --> 00:21:31,279
is no way that Chinese gamblers are coming to the Bahamas.

431
00:21:31,680 --> 00:21:35,599
They're not into like beach vacation. Yes, they go to

432
00:21:35,640 --> 00:21:37,880
a casino, they stay in the casino and you never

433
00:21:37,960 --> 00:21:40,960
see them until you carry them out and you send

434
00:21:41,039 --> 00:21:44,160
them home. And I said, Oh, the beauty here is

435
00:21:44,200 --> 00:21:47,519
they're going to lose money. This place will never make money.

436
00:21:47,839 --> 00:21:52,039
And it's a way to drag money, to legitimately launder

437
00:21:52,079 --> 00:21:55,759
money out of China into the West so they can

438
00:21:55,920 --> 00:22:00,319
yeah and yes done. That's the whole belt I've been

439
00:22:00,400 --> 00:22:04,400
rape initiative. It is all about taking money out of China,

440
00:22:04,480 --> 00:22:08,279
getting it out because you'd never safe there. Eye up

441
00:22:08,279 --> 00:22:10,920
in the government and the economy you are bring it

442
00:22:10,960 --> 00:22:14,599
to the US and and find a safe place for

443
00:22:14,680 --> 00:22:15,839
it relatively.

444
00:22:15,440 --> 00:22:17,680
Speaker 1: And if you if you lose twenty to fifty percent

445
00:22:17,720 --> 00:22:21,039
and moving it, fine, that's the cost of movingness. And

446
00:22:21,119 --> 00:22:23,920
so you can have the companies, these Chinese companies do

447
00:22:24,000 --> 00:22:26,960
those things and be losing money, but they're like, no,

448
00:22:27,000 --> 00:22:29,000
I'm not really losing because I've moved it out of

449
00:22:29,000 --> 00:22:32,480
Redmond b which is what every wealthy Chinese person is

450
00:22:32,519 --> 00:22:36,359
trying to do right now. One of the works that

451
00:22:36,400 --> 00:22:40,799
the Henley Partners did was that right now, thirteen thousand

452
00:22:40,880 --> 00:22:45,319
multi millionaire families are leaving China every year, thirteen thousand.

453
00:22:45,680 --> 00:22:47,200
So when you think of that and say, what's the

454
00:22:47,240 --> 00:22:50,400
average networks of you Chinese families five million to twenty

455
00:22:50,440 --> 00:22:55,039
million times thirteen thousand a year right flying out of

456
00:22:55,039 --> 00:22:56,599
there because they're like, we do not want to stay

457
00:22:56,599 --> 00:22:59,759
for how bad it's going to be. That is one

458
00:22:59,759 --> 00:23:01,160
of the designs. And where they're going. They're going to

459
00:23:01,200 --> 00:23:03,319
the US, They're going to Australia, They're going to Dubai

460
00:23:03,359 --> 00:23:08,720
if they can, They're going to Canada, right, some to Portugal,

461
00:23:09,079 --> 00:23:12,759
Greece right explain, oh we'll take them and anywhere they

462
00:23:12,799 --> 00:23:15,160
get a golden visa right anywhere they can get golden

463
00:23:15,240 --> 00:23:17,079
visa and and get out because they know that they

464
00:23:17,160 --> 00:23:19,200
got to get out while the getting is good, right,

465
00:23:19,240 --> 00:23:21,079
because it's going to be a bad twenty years for

466
00:23:21,240 --> 00:23:21,960
China's economy.

467
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Speaker 4: Shot.

468
00:23:22,920 --> 00:23:27,240
Speaker 3: Yeah, for the next ten years, you just put your

469
00:23:27,240 --> 00:23:29,079
money in the S and P and let it ride.

470
00:23:29,640 --> 00:23:31,039
Speaker 5: We're purely passive investor.

471
00:23:31,200 --> 00:23:31,519
Speaker 4: Yeah.

472
00:23:31,680 --> 00:23:33,680
Speaker 1: I mean, if you if you want to just sleep

473
00:23:33,720 --> 00:23:36,799
at night and do nothing, well, keep taking that one

474
00:23:36,839 --> 00:23:38,799
thousand dollars every month out of your four one in

475
00:23:38,880 --> 00:23:40,759
your four to one k and put it one hundred

476
00:23:40,759 --> 00:23:41,960
percent into the SEP five hundre.

477
00:23:41,960 --> 00:23:42,799
Speaker 5: There's no reason to be.

478
00:23:43,119 --> 00:23:45,960
Speaker 1: Fifty to fifty bonds or sixty forty or some crazy

479
00:23:45,960 --> 00:23:47,279
thing like that. Not if you're not going to touch

480
00:23:47,319 --> 00:23:49,599
that money for five to ten years. There's plenty of

481
00:23:49,640 --> 00:23:53,920
time to benefit from the volatility of the S and P,

482
00:23:54,400 --> 00:23:57,960
like losing five percent or eight percent or twenty percent

483
00:23:58,319 --> 00:24:01,160
right during the pandemic and then watch it recover. People

484
00:24:01,160 --> 00:24:03,079
are rea isly in twenty twenty. The stock market was

485
00:24:03,160 --> 00:24:06,640
net up right. In twenty twenty proper the calendar year,

486
00:24:06,920 --> 00:24:09,440
the stock market was up right, And people are like, oh,

487
00:24:09,440 --> 00:24:11,960
but there was a pandemic shutdown like and still just

488
00:24:12,079 --> 00:24:13,440
to be five hundred and then they had a banner

489
00:24:13,519 --> 00:24:18,400
year in twenty one, right, twenty two did well, twenty

490
00:24:18,440 --> 00:24:21,640
three a little bit softer market, and then this year gangbusters.

491
00:24:21,839 --> 00:24:25,240
So you know the idea that you can time which

492
00:24:25,359 --> 00:24:29,160
year that's tough, I could say nope, but to be

493
00:24:29,160 --> 00:24:31,039
able to say for the next five to ten years, yes,

494
00:24:31,559 --> 00:24:35,599
US equities all right, So one thing, like we talked

495
00:24:35,759 --> 00:24:39,359
the companies, the stock market's doing well, whether the country

496
00:24:39,400 --> 00:24:42,200
is doing well or not, a lot of their profits

497
00:24:42,519 --> 00:24:45,200
s and P five hundred and I remember thirty five

498
00:24:45,319 --> 00:24:49,519
forty percent comes from oversee some company sixty seventy percent.

499
00:24:49,680 --> 00:24:50,000
Speaker 4: Yes.

500
00:24:50,200 --> 00:24:53,880
Speaker 3: The death the US budget the term they did say

501
00:24:53,880 --> 00:24:56,640
it does that give you a pause for worry or concern.

502
00:24:56,839 --> 00:25:00,000
Speaker 1: I mean it will if Congress can't get to handle themselves.

503
00:25:00,079 --> 00:25:03,559
But at this point right now, no, the US does

504
00:25:03,559 --> 00:25:04,920
not have a dead issue whatsoever.

505
00:25:05,200 --> 00:25:06,319
Speaker 5: It's why that every time the.

506
00:25:06,319 --> 00:25:09,200
Speaker 1: US says we're doing another round of treasuries, they get

507
00:25:09,240 --> 00:25:13,079
oversubscribed by people around the world who want dollar denominated

508
00:25:13,240 --> 00:25:15,640
triple a interest. The idea that I don't know, Fitch

509
00:25:15,839 --> 00:25:18,279
had the US government double A. I'm like, if the

510
00:25:18,440 --> 00:25:20,480
US isn't triple A, nobody is, so I even have

511
00:25:20,519 --> 00:25:23,079
the rating. No, the US is still triple A. And

512
00:25:23,119 --> 00:25:26,160
the reason is even at the higher interest rate levels,

513
00:25:26,160 --> 00:25:28,039
which are probably gonna get cut. But let's say they

514
00:25:28,039 --> 00:25:30,200
don't get cut. Right, we don't see even two rounds.

515
00:25:30,559 --> 00:25:32,039
So the US is beening what four.

516
00:25:31,960 --> 00:25:32,640
Speaker 4: And a half percent?

517
00:25:32,759 --> 00:25:35,279
Speaker 1: Oh, we can do the math, right, This'll do easy math.

518
00:25:35,359 --> 00:25:39,359
What's five percent of something trillion dollars. It's not hard

519
00:25:39,400 --> 00:25:41,720
to do that math and say, all right, a blend

520
00:25:41,759 --> 00:25:43,799
of five percent, some of it's still a two percent.

521
00:25:43,839 --> 00:25:46,400
Someone Still three percent is about a billion dollars a

522
00:25:46,480 --> 00:25:49,119
year in debt service. I better sorry, a trillion a

523
00:25:49,200 --> 00:25:52,000
year in debt serres for the US. Well, what is

524
00:25:52,039 --> 00:25:54,400
the US generating taxes every year? Because people are using

525
00:25:54,400 --> 00:25:57,279
this debt to GDP? And I'm like, why no government

526
00:25:57,599 --> 00:26:00,200
uses GDP. They can't just take the GDP and pay

527
00:26:00,200 --> 00:26:02,640
off their debts? Why is that TGDP the right measure?

528
00:26:02,960 --> 00:26:06,319
And this is an important point. The US, right, and

529
00:26:06,400 --> 00:26:10,200
every country in the world their main form of revenue taxes, right,

530
00:26:10,279 --> 00:26:12,680
they take their taxes. Sometimes there are one hundred percent,

531
00:26:12,720 --> 00:26:14,920
like Russia, right now is like one hundred percent tax.

532
00:26:15,240 --> 00:26:17,640
All profits of oil and gas go to Russia right

533
00:26:17,680 --> 00:26:19,880
at this point, So it's a it's effectively one hundred

534
00:26:19,920 --> 00:26:22,920
percent tax on that industry. China does that with some

535
00:26:22,960 --> 00:26:25,680
of their industries too, where the state right gets the

536
00:26:26,039 --> 00:26:29,400
bulk of whatever profits. But the fact is US companies

537
00:26:29,400 --> 00:26:31,920
are generating so much in profit. I mentioned that, And

538
00:26:32,119 --> 00:26:34,480
if the US companies can generate more profit than the

539
00:26:34,480 --> 00:26:37,559
rest of the world combined, that means the corporate tax revenue,

540
00:26:37,720 --> 00:26:39,720
even on a lower tax rate, right.

541
00:26:39,839 --> 00:26:40,920
Speaker 4: Is more going out.

542
00:26:41,160 --> 00:26:43,640
Speaker 1: Yeah, right, and so as that's coming in and at

543
00:26:43,640 --> 00:26:46,079
record levels. By the way, that Trump tax cuts at

544
00:26:46,319 --> 00:26:48,680
the New York Times and everyone said, oh, my goodness,

545
00:26:48,960 --> 00:26:50,880
Trump is just giving a tax break and whatever else.

546
00:26:51,200 --> 00:26:54,839
US companies today at a lower tax rate are paying

547
00:26:54,839 --> 00:26:57,440
more in taxes than they were at the higher tax

548
00:26:57,519 --> 00:27:00,160
rate just four or five years ago, right, Meaning the

549
00:27:00,200 --> 00:27:01,680
companies reinvested that money.

550
00:27:01,720 --> 00:27:02,119
Speaker 5: They use it.

551
00:27:02,240 --> 00:27:04,599
Speaker 1: It wasn't all dividends and share buybacks like the New

552
00:27:04,680 --> 00:27:06,160
York Times. If people saying, oh, this is just a

553
00:27:06,160 --> 00:27:08,599
handout to the rich. No, the companies using an R

554
00:27:08,640 --> 00:27:10,160
and D, they use an innovation, They use it to

555
00:27:10,160 --> 00:27:13,640
buy other firms they grew. They're now more profitable and

556
00:27:13,720 --> 00:27:15,599
paying far more in corporate tax day at a lower

557
00:27:15,599 --> 00:27:17,720
tax rate than they were to hire. So Art Laffer

558
00:27:18,039 --> 00:27:20,200
deserved the Presidential Medal of Honor that Trump gave him.

559
00:27:20,359 --> 00:27:22,799
He should get the Nobel Prize. But because it's so

560
00:27:22,880 --> 00:27:27,279
politically charged about taxation whatever, and the Europeans love taxes

561
00:27:27,319 --> 00:27:30,200
so much, right because of politicians, they're like all love

562
00:27:30,240 --> 00:27:32,759
their taxes, they're never going to give a Nobel Prize.

563
00:27:32,759 --> 00:27:35,880
And he deserves it in economics, like nobody in the

564
00:27:35,920 --> 00:27:39,400
last twenty years anyway. But all that together and you

565
00:27:39,480 --> 00:27:41,720
have the US generating more than what you call it

566
00:27:41,759 --> 00:27:45,400
next year five dollars of taxes and actullion dollars of

567
00:27:46,119 --> 00:27:46,720
debt service.

568
00:27:46,960 --> 00:27:49,960
Speaker 5: That's a brainer. That's easy, all right.

569
00:27:50,000 --> 00:27:54,400
Speaker 3: Okay, well, hey, we appreciate your views here, and I

570
00:27:54,400 --> 00:27:58,759
guess the best place to find you is altimetry dot com.

571
00:27:59,079 --> 00:28:01,960
They sir, sign for I just signed up myself on

572
00:28:02,079 --> 00:28:05,960
the list the show notes in the link rather than

573
00:28:05,960 --> 00:28:10,279
the show notes this interview on Financial Survival Network dot com.

574
00:28:10,680 --> 00:28:15,000
And if you're there, just sign up for a free newsletter. Professor.

575
00:28:15,119 --> 00:28:18,319
It was really an honor privilege Thank you Kerry. Great

576
00:28:18,359 --> 00:28:20,319
to talk to you. We'll definitely have you on again.

577
00:28:20,519 --> 00:28:21,119
Appreciate it.

578
00:28:21,200 --> 00:28:22,079
Speaker 4: Great. Bye.

579
00:28:22,359 --> 00:28:25,160
Speaker 1: Yeah we can talk some specific stock time and get

580
00:28:25,160 --> 00:28:26,200
it to some individual ideas.

581
00:28:26,400 --> 00:28:28,920
Speaker 4: Was it just a macro? If you like? Whatever you like, man.

582
00:28:29,000 --> 00:28:31,240
Speaker 3: I do, I do, and I'll have a list of

583
00:28:31,279 --> 00:28:34,160
them for you. Thanks again for coming on.

584
00:28:34,279 --> 00:28:37,720
Speaker 2: Thank you Kerry, thanks for listening to Carrie Letz's Financial

585
00:28:37,799 --> 00:28:42,839
Survival Network, your solution to today's trying times. For the latest,

586
00:28:42,920 --> 00:28:47,799
go to Financial Survivalnetwork dot com. Financial Survival Network

587
00:28:48,079 --> 00:28:49,759
Speaker 5: Now more than ever,