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Speaker 1: If you want to support the show and get the

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episodes early and ad free, head on over to Freemanbeyond

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the Wall dot com forward slash Support. I want to

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explain something right now. If you support me through substack

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If you support me through a subscribe, Star, gum Road

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or on my website directly, I will send you a

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link where you can download the file and you can

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listen to it any way you wish. I really appreciate

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the support everyone gives me. It keeps the show going.

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It allows me to basically put out an episode every

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day now, and I'm not going to stop. I'm just

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going to accelerate. I think sometimes you see that I'm

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putting out two even three a day, and yeah, can't

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do it without you, So thank you for the support.

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Head on over to Freeman Beyond the Wall dot com,

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forward slash support and do it there.

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Speaker 2: Thank you.

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Speaker 3: Well.

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Speaker 1: If you never caught one of my live streams before,

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there's the intro to it. I forgot to remove it

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before I started recording this, so yeah, I'm a professional. Hey,

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hey everyone, how's it going.

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Speaker 3: I was about to say that that's a new I've

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never heard that before, but man, that sounds that sounds good.

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Speaker 1: Actually, yeah, that's the intro from Last Dream. Okay, so

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I got Ben Keller in here, I got Stormy Waters here.

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This is the way we have to start out this episode.

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Total disclaimer. Nothing here is financial advice. People have asked

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for an episode like this for a while.

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Speaker 2: We're gonna do it.

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Speaker 1: Please do not do not click by on anything because

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of anything we talk about here now saying that I

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know that that's probably not going to happen, but I

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have to put the disclaimer out here. Nothing here is

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a recommendation or a guarantee that you are going to

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make money.

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Speaker 2: So that's it. Stormy.

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Speaker 1: It feels like I haven't talked to you in like

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twenty four hours.

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Speaker 2: How are you doing doing good?

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Speaker 3: And this is not investment advice?

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Speaker 2: So yeah, Ben, how are you doing doing pretty good?

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I definitely have to echo that, Like I can't. I

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do write a substack obviously focused on investments and all

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these different things, but at the end of the day,

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like I can't reach through the screen and press the

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buy button or sell button for anyone. So to your money,

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your responsibility is a way I'll put it.

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Speaker 1: Yep, all right, who wants to start giving an overview

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of what we're looking at as far as the markets.

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Speaker 2: Go, Uh, I'll let Stormy lead off. We can maybe

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start specifically with commodities.

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Speaker 3: I think that's uh, well, yeah, how about you kicks

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off commodities and I'll take it from there.

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Speaker 2: Okay. So basically, I think what a lot of people

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are missing as far as cycle changes, some of these

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different things in markets that typically last ten to fifteen years,

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and you see it in bonds, you see it in equity,

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you see it across markets with commodities specifically, it's like

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ten to fifteen year cycles, and gold specifically tends to

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lead those cycles where anywhere from a year to two

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years ahead of the rest of the commodities, it'll take

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off right and gold is gone from what sixteen seventeen

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hundred renounce to like well over three thousand in recent weeks.

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So I think that's basically the smoke signal kind of

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signifying that something's different where it's not just going to be.

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You get to own the SMP and passive invest in

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you like automatic twenty percent returns because this is America,

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So I think it's going to be a little more

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difficult as far as finding opportunities. But I think commodities

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are extremely cheap right now. I think energy is extremely

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cheap right now. But basically, there's a lot of different

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sectors and businesses and different ways to kind of express

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that view. Whether it's like you like natural gas or

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you like uranium or coal stocks or whatever it is.

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There's a lot of different ways to potentially apply the

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view that we're probably going to be getting higher interest

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rates and other things that'll be very good for a

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another five ten year run in some of the different commodities.

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Speaker 3: Yeah, I think interest rates is going to be a

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component that everyone wants to focus on because it is

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going to go contra to pretty much everything that you're hearing.

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So much of what you're hearing is at least against

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just my perspective. You know, I'm not I'm not bad

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at giving predictions, We'll say, all right, but so much

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of what you see when you see the dialogue in

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the investment media is how do I put it? Now,

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Everyone listening to this podcast probably has an inherent distrust

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of the media, and that's good, that's important, And the

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place that you need to be the most suspicious is

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in the financial media. Right, the shilling in the financial

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media is going to be much worse than anything else

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that you have, probably like it, worse than anything in

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the mainstream media. So keep that in mind when you

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read stuff about interest rates coming down at any moment,

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or Powell going to pivot things like this, These things

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aren't going to happen. What you're seeing is financial institutions

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that desperately need rates to come down, leaning on policymakers

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to make those decisions right. They're trying to quite literally

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manifest the market conditions to a very important book. As

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much as I hate the man and hope that he

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is rotting in hell in the very near future, one

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George Soros. George Soros wrote a book called Narrative Markets,

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and I think that everyone should read it if they

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want to understand basically how to navigate the media environment

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when it comes to finance. It's COVID made me really

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understand the book because I thought I understood it, but

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I didn't. Right, I was like, oh, okay, so what

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George is saying is that the market doesn't really care

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about fundamentals as much as it may seem. What it

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really cares about is stories, and investments have stories, and

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it's the story of the investment that are making people

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pull the trigger or hold the investment when they otherwise wouldn't.

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And I was like, that's a really novel concept. But

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then I watched the media be controlled in a way

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that I couldn't unsee, Like I knew it was bullshit

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most of the time before, but never that was the

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first time. So I was too young during nine to

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eleven when I actually watched a narrative roll out, like

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you got to see the machine turn on and hum,

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and I was like, oh shit. He wasn't talking about

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taking narratives that exist and trading a security based on

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the story about the security and not the fundamentals of

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the security. He was talking about making the story and

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creating the market. That's what they're doing. So interest rates

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are not coming down. In fact, I don't know how

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old Ben is, but I can probably say that Pete

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is close to me in age, and we will likely

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never see interest rates as low as they were in

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twenty twenty two or twenty twenty three. Are likely even now,

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for the rest of our lifetimes, Pete and I will

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be dead before we see a two percent interest rate again. Right,

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So interest rates are not coming down, and this makes

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leverage very expensive. Right. Leverage costs money because you're basically

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getting a line of credit, line of credit at an

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interest rate, even if it's only in your trade, Even

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if it's only in your e trade portfolio, you are

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still paying interest points on it. But since interest rates

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have been so low for so long and always going lower,

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at least in my entire lifetime right when I was born,

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was like peak Vulkar, right, So literally my entire life

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since I was born, every quarter or every six months,

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you can pretty much set your watch by interest rates

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getting lower, which allowed a bunch of bullshit to happen. Right,

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First off, I'll explain why Ben is correct in his

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assessment of commodities and the future of them, and I'll

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have funny enough commodity futures haha. If you're a company

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that isn't really fucking good at your job, all right, event,

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you would go out of business in the before times, right,

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so pre vulgar times you would go out of business, right,

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But in the post vulgar times of knowing that the

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interest rates are going to come down every single quarter.

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What you do is you borrow a bunch of money

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and you use that borrowed money to run your business

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the operational.

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Speaker 2: Costs, or buy backstock.

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Speaker 3: Well, that is what for when you have excess cash,

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usually don't borrow money to buy you don't usually don't

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buy stock back with borrowed money, right because the capital cost.

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What you do when you buy backstock is when you

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have a bunch of cash on hand and you don't

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want to issue a dividend and return that money to shareholders,

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which is what you're supposed to do. But if you

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spend that money before you have to return it, then

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you don't have to return it. And if you know

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that most of your shareholders are hedge funds or you know,

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money market funds or shit like Blackrock, who care far

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more about returns than they do about actually getting dividend

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money like physical money back, then you know that they

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won't have a problem with this, that they'd much rather

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you take the cash on hand and pump the stock

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then invest in any long term thing like long term

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whether it be new research and development or new facilities,

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anything to actually make the business more valuable long term.

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They don't really care about the business. It's really just

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a like three or four letter combination and then and

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then a value number attached to it. They don't give

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a fuck what the business does, who it employees, where

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it is, like, they don't give a shit.

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Speaker 2: It's a trading snardine in the casino.

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Speaker 3: Basically, yes, exactly one hundred percent. So they don't really

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want you spending any excess money on any long term

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growth plans. They would much rather you pump them by

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the quarter. But anyways, all these companies that are very

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bad at running their business profitably, they borrow a bunch

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of money, and what they do next quarter when the

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interest rates go lower is they refinance that debt. Right,

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this is going to be like, let's say you have

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a minimum credit card payment, right, and all of a sudden,

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your interest rate lowers for some freakish reason, because that

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lowering of interest rates only happens to businesses that never

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filters down to you. Maybe if you're getting a mortgage,

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but that's about it, right, So it's actually the mortgage

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will be better. Let's say your mortgage payment is x

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amount of dollars, and you refinance at a lower interest rate,

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and now your payment is less, let's say it's twenty

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percent less. You had a four thousand dollars payment and

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now you have a three thousand dollars payment. Did your

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salary go up an extra thousand dollars a month, No,

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it did not. Just because you have to pay less

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on your mortgage doesn't mean you earned an extra thousand

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dollars a month. Just means you have to spend one

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thousand dollars less. But that's not what these companies have

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been doing. They've been refinancing their debt and the money

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that they don't have to pay in interest payments anymore. Right,

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the reduction in mortgage by one thousand dollars, they've been

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chalking that up as revenue, right, like their business earned

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that money. So it'll come to us a surprise for

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you to hear that twenty five percent one in four

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stocks on the New York Stock Exchange. And this problem

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is far more metastasized in European stock markets, up in

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these stock markets and Asian stock markets. But we'll just

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take the US, which is the best of the bunch.

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One in four publicly traded companies pays more in debt services, right,

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so it has to pay more in interest then it

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earns in top line revenue, right, So that means they're

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paying more in interest, they owe more in debt services,

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then they make as a business doing business. And if

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it wasn't for the ability to refinance this debt every

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quarter or every six months, they would be out of

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business already. They would have blown up. Right. So the

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last gasp of twenty twenty three, like the last you

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know bit of COVID gave a lot of these company

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is a chance to refinance hard, and they did, but

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it doesn't mean their business has got any more profitable,

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all right. So that means one in four companies are

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basically a ticking time bomb for interest rates to go

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up to a point where it cracks the math and

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they are no longer able to operate. And since they've

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been operating on borrowed money for this long, when they go,

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they will go really quickly. So keep that in mind

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when you're buying stocks. Just know that you know one

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in four companies, one in four of those stock tickers

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is a fucking zombie company time bomb that could go

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to zero really quickly. All right. With that being said,

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the other thing that interest rates do and tying this

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back to leverage and why commodity prices have been so

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cheap for so long, and why commodity prices are going

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to go up more in the near future. In fact,

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they are going to go up proportionally to interest rates

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going up. Well, Stormy, why is this? Well, because it's

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kind of a dirty secret of the Western world that

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we take our cheap interest, our cheap money, and we

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use this cheap interest, right, This this debt our ability

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to borrow tremendous amounts and pay very little for that

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borrowing to leverage up futures contracts. Right. So, let's say

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you have one hundred dollars and let's say interest rates

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are one percent, so inflation's two percent, So that means

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that interest is effectively in real terms free, right, So

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we have free borrowing capacity. What we're going to do

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is we're gonna take our hundred dollars and we're going

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to get a ten x leverage from our securities broker.

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So even though I have one hundred dollars, I will

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be trading with the equivalent of what what is that

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ten thousand dollars I'm really dumb today, boys and girls,

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so please spare with me. So I have a thousand dollars. Wow,

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that was really really dumb. Okay, Anyways, I have a

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thousand dollars when I only should have one hundred, So

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that means nine hundred of those dollars aren't really real money.

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But I'm going to place very real bets on the

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futures exchange betting that the price of X commodity goes down. Right,

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So when I pile on a bunch of futures contracts

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that are basically betting that something is going to go down,

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if I pile on enough of those, I will effectively

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manifest that reality. Right, a company that is shorted nine

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times for every one person that is buying the stock

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hoping the company goes up, that stock's fucking going down.

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Because markets operate on a little bit of consensus, actually

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a lot of bit of consensus, right, everyone just follows

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on to what everyone else is doing. So if everyone

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is seeing a bunch of shorts pile on and pile

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on and pile on, they're going to assume, usually correctly,

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that somebody knows something that they don't, and that sounds

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like money and they're going to do the exact same thing.

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They're going to pile on their shorts and then that

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reality or sorry that you a story will become reality

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because the price of that thing is going to go

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down because of everyone shorting it. We' actively done this

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with commodities to keep resource producing countries nice and poor,

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because if the commodity price goes up, these countries that

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only have natural resources to sell, right, will have a

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ton of money sitting around and they may use that

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money for industrial production to take those raw materials and

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turn them into finish goods to sell into our markets.

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And we don't want that. We want them to not

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be able to do that, right. We want them to

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have no other choice but to sell us the raw materials,

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we turn it into finished goods, and we turn around

292
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and sell the finished goods back to them. We do

293
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the value added manufacturing, which is where the money is

294
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not you you up aty, you know, I don't know,

295
00:20:51,799 --> 00:20:57,960
Nicaraguan or whatever. So that only works if interest rates

296
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are very very low. But if interest rates are not

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very very low, the cost of that leverage becomes very

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very expensive and it becomes no longer worthwhile to do it.

299
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So we've been doing this for nihon I don't know,

300
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thirty fucking years, forty years. So commodities have been artificially

301
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suppressed using cheap credit for about thirty years. So when

302
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that pressure comes off, right, and now that short pressure

303
00:21:36,400 --> 00:21:39,400
goes away, what do you think is going to happen

304
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to those commodities?

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Speaker 2: Ben they might go just a little bit higher. I

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think to add to your point, when you see something

307
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like oil and you see basically positioning where some of

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these large traders are as short as they were in

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00:21:59,000 --> 00:22:04,759
the COVID like crash cycle, where like, say what you

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00:22:04,799 --> 00:22:09,079
want about the economy, it's not as chaotic or uncertain

311
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as things were in like March twenty twenty. So when

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you see that kind of positioning and oil kind of

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just bumping around like sixty sixty five of a barrel

314
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like dip down in the fifties, briefly, like you look

315
00:22:20,640 --> 00:22:23,400
at it and I kind of view it as there's

316
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a whole bunch of kindling waiting for a spark. But

317
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I think you see it across different markets at different

318
00:22:32,720 --> 00:22:37,119
times it gets more extreme, like you kind of see

319
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the pressure release valve being gold and they I think

320
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of kind of taking their thumb off the scale on

321
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gold specifically in the last I don't know a couple

322
00:22:46,839 --> 00:22:51,200
of years, because I think everyone, whether you look at

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China and their central bank buying, I think that's a

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big driver. And I think basically everyone, as far as

325
00:22:58,559 --> 00:23:03,359
I can tell, except Europe, is totally fine with gold

326
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rising to three thousand and four thousand, five thousand ounce.

327
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I think it'll end a decade significantly higher. But part

328
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of that's obviously currency devaluation and whatnot. But I think,

329
00:23:17,319 --> 00:23:20,559
like you're saying, all these different commodities when you put

330
00:23:20,559 --> 00:23:24,039
your thumb on the scale, and it's basically a constant

331
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headwind when you eventually get to a point where that

332
00:23:27,079 --> 00:23:30,319
you stretch that rubber band far enough and just snaps.

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00:23:31,039 --> 00:23:36,359
Speaker 3: Yes, gold is also going up for another reason, right,

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00:23:37,440 --> 00:23:39,480
and that we're going to have to talk about separately.

335
00:23:41,039 --> 00:23:48,880
That'll probably will save that for the end, which is derivatives. Basically,

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00:23:51,000 --> 00:23:57,079
gold is not an inflation hedge. Right libertarians are wrong, well, really,

337
00:23:57,160 --> 00:24:02,119
libertarians are wrong about pretty much everything, from politics to

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00:24:02,480 --> 00:24:07,759
economics itself, which is deliciously ironic, as Thomas would say,

339
00:24:09,119 --> 00:24:14,680
because they've turned economics into both politics and religion. Which

340
00:24:14,759 --> 00:24:19,599
is well, it's funny wrong about it.

341
00:24:21,359 --> 00:24:25,000
Speaker 1: You can be right about economics if everything you're doing

342
00:24:25,079 --> 00:24:28,839
is working in theory, because you can just declare, oh,

343
00:24:28,920 --> 00:24:31,920
this is better, this is better than what's happening now

344
00:24:32,640 --> 00:24:39,079
in theory. Okay, well show me how it played out. Well, no,

345
00:24:39,200 --> 00:24:43,279
this is better. You know friedrich List has been proven

346
00:24:43,319 --> 00:24:46,480
as a crank. Oh yeah, who did that? Oh you

347
00:24:46,599 --> 00:24:50,279
mean somebody who's economics is never going to be implemented.

348
00:24:50,640 --> 00:24:53,680
Nice try Betty, nice, try have a nice day, head.

349
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Speaker 3: Pat Yeah, he was disproven in theory, but it is

350
00:25:03,160 --> 00:25:05,480
proven in fact. But go on, I was.

351
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Speaker 2: Just going to say, it's looking at the world the

352
00:25:07,559 --> 00:25:09,400
way it is versus the way you want to be.

353
00:25:09,559 --> 00:25:11,680
I think is basically what you guys are getting at.

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00:25:12,880 --> 00:25:19,559
Speaker 3: Yes, economics doesn't exist as in economies exist, right, those

355
00:25:19,680 --> 00:25:22,799
exist people buy and sell. I actually did a post

356
00:25:22,799 --> 00:25:27,799
about this recently, and everyone, particularly the Lulberts, got all

357
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retarded on me. So let me use this time to

358
00:25:36,000 --> 00:25:43,119
clarify the difference. Economies are real economics. The academic profession

359
00:25:44,160 --> 00:25:49,680
and study is not, because, like Pete and you Ben

360
00:25:49,759 --> 00:25:56,680
said paraphrasing, they have to operate in a vacuum. Where

361
00:25:56,720 --> 00:26:00,839
the only people inside the vacuum are the buyers and

362
00:26:00,880 --> 00:26:05,039
the sellers. Right, you only got millions and millions of

363
00:26:05,079 --> 00:26:09,039
buyers and millions of millions of sellers, the buyers trying

364
00:26:09,079 --> 00:26:12,000
to get the most value for the least amount of money,

365
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and the sellers trying to get the most amount of

366
00:26:16,640 --> 00:26:19,839
money for coughing up the least amount of value. And

367
00:26:19,960 --> 00:26:26,400
somewhere in this magical process becomes price discovery if there

368
00:26:26,400 --> 00:26:33,519
are no external non economic factors involved, like let's say,

369
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for oil prices, we could say, let's say, like the

370
00:26:37,559 --> 00:26:43,799
geostrategic imperatives of Vladimir Putin's Russia. Ben right, So if

371
00:26:44,119 --> 00:26:54,799
let's say Trump and Saudi Arabia have been keeping oil

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prices artificially low via overproduction.

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Speaker 2: And narrative like you're talking about earlier.

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00:27:03,319 --> 00:27:07,359
Speaker 3: M Yes, the recession narrative is very important for oil

375
00:27:07,400 --> 00:27:12,160
prices because and this is the brilliant economics sorry, the

376
00:27:12,359 --> 00:27:18,799
brilliant economics theory associated that, Oh, if GDP backward dates

377
00:27:19,200 --> 00:27:23,599
for two quarters straight, that means recession, and that means

378
00:27:24,039 --> 00:27:27,640
people will be driving less and less goods will need

379
00:27:27,680 --> 00:27:31,119
to be shipped around because the GDP number went backwards

380
00:27:31,119 --> 00:27:36,319
for two quarters in a row. That's that's that sounds retarded,

381
00:27:36,359 --> 00:27:43,079
but that's literally like economics dogma. All right, the correlation

382
00:27:43,359 --> 00:27:47,880
as causation bros. Are just any anyways. But the people

383
00:27:47,880 --> 00:27:51,559
don't know that. People that tout economics as a reality,

384
00:27:52,319 --> 00:27:56,720
as a real thing, there's really no hope. But the

385
00:27:56,759 --> 00:28:01,279
reason I bring that up is because, particularly when it

386
00:28:01,359 --> 00:28:09,079
comes to narratives and versus realities, there is a narrative

387
00:28:09,839 --> 00:28:15,799
amongst libertarians that gold is a hedge against inflation, and

388
00:28:15,839 --> 00:28:18,640
that if we were to just get rid of the

389
00:28:18,759 --> 00:28:23,440
fiat money, then not only will everything magically be right

390
00:28:23,480 --> 00:28:28,079
in our society and our values pete, our values, our

391
00:28:28,200 --> 00:28:34,400
Christian Judeo Christian values will return right, and trannies will

392
00:28:34,400 --> 00:28:39,039
go away, and James Lindsay will have nothing to talk about,

393
00:28:39,720 --> 00:28:43,279
and we will return to the magic, good old times before.

394
00:28:43,880 --> 00:28:49,279
If only we went on gold backed currency, then all

395
00:28:49,319 --> 00:28:56,519
of the other problems in society, from homelessness to drug addiction. Actually,

396
00:28:56,559 --> 00:28:59,680
I think libertarians are largely responsible, at least in their

397
00:28:59,680 --> 00:29:03,880
own part, for drug addiction numbers, because they're fucking stoned

398
00:29:03,880 --> 00:29:07,920
all the time. Anyways. They think that all this will

399
00:29:07,960 --> 00:29:11,400
be fixed if we just go back to gold and

400
00:29:11,640 --> 00:29:15,680
that inflation will go away. In fact, inflation will be impossible.

401
00:29:17,039 --> 00:29:23,720
But this is incorrect because I mean you and Paul

402
00:29:23,759 --> 00:29:28,640
Fahrenheit did a series on the Spanish Empire, and I

403
00:29:28,759 --> 00:29:33,160
believe there was tons of inflation in Europe in the

404
00:29:33,200 --> 00:29:36,160
Middle Ages during periods of time, and there are also

405
00:29:36,279 --> 00:29:37,640
periods of rapid deflation.

406
00:29:38,279 --> 00:29:40,519
Speaker 1: And Spain was flush with gold.

407
00:29:41,480 --> 00:29:44,160
Speaker 3: Yeah, in fact, gold was the only currency any of

408
00:29:44,160 --> 00:29:49,759
those nations ever used. So wait, if not only Spain

409
00:29:51,000 --> 00:29:54,960
was on a gold standard or literally physical gold as currency,

410
00:29:55,559 --> 00:30:00,440
but every other nation they traded with used only gold

411
00:30:00,599 --> 00:30:06,240
as currency. How did all of these nations experienced inflation

412
00:30:08,680 --> 00:30:13,079
or then deflation? How was there any fluctuation whatsoever in

413
00:30:13,119 --> 00:30:19,920
their currency if they used gold as money. Well, my

414
00:30:20,039 --> 00:30:29,400
dear friends, cause a relation are different things because when

415
00:30:29,519 --> 00:30:36,000
something is a commodity, like ben can tell us, a

416
00:30:36,079 --> 00:30:42,599
commodity is itself a hedge against inflation. But when you

417
00:30:42,720 --> 00:30:48,079
use something as money, no longer is it a commodity.

418
00:30:48,160 --> 00:30:57,559
It's now And funny enough, money trades differently than commodity.

419
00:30:58,119 --> 00:31:02,920
If you take a commodity and you make it money,

420
00:31:03,039 --> 00:31:05,799
it no longer trades like a commodity. It trades like

421
00:31:05,799 --> 00:31:13,880
a currency, which can inflate and can deflate. So keep

422
00:31:13,920 --> 00:31:19,079
this in mind. The only thing gold is a hedge

423
00:31:19,079 --> 00:31:27,559
against is government instability. Right, it won't protect you from

424
00:31:27,599 --> 00:31:32,880
inflation as long as any commodity. We could take all

425
00:31:32,920 --> 00:31:34,839
of our money and put it into barrels of oil

426
00:31:35,119 --> 00:31:39,960
and we will be equally as protected from inflation than

427
00:31:40,000 --> 00:31:44,039
we would if they were gold bars or you know,

428
00:31:44,319 --> 00:31:49,160
platinum or palladium or you know timber, all of these things.

429
00:31:51,039 --> 00:31:56,960
So gold, when you see everybody rushing for gold, particularly

430
00:31:57,000 --> 00:32:05,599
the central banks, they are worried about is governments not

431
00:32:05,720 --> 00:32:12,039
so much their own, partially their own, but primarily counter parties, right,

432
00:32:12,200 --> 00:32:16,200
because governments loan other government's money. And there has been

433
00:32:16,240 --> 00:32:20,079
more central bank gold buying in the last three years

434
00:32:21,079 --> 00:32:26,079
as there has been in the last sixty. So in

435
00:32:26,119 --> 00:32:29,960
the last sixty years, all the gold buying from central

436
00:32:30,000 --> 00:32:34,319
banks that's happened, which there has been a bunch two

437
00:32:34,359 --> 00:32:37,079
almost three times as much of that gold buying has

438
00:32:37,079 --> 00:32:40,720
happened in the last three years. So what does that

439
00:32:40,799 --> 00:32:45,480
tell you. That tells you governments are worried about other

440
00:32:45,599 --> 00:32:51,960
governments going bankrupt or going away, and that is going

441
00:32:52,039 --> 00:32:55,720
to be largely the driving factor of gold because it's

442
00:32:55,720 --> 00:32:58,519
a commodity. Central banks aren't buying it to turn it

443
00:32:58,559 --> 00:33:04,240
into currency. They are buying it right to backstop counterparty risk.

444
00:33:05,480 --> 00:33:09,119
That being said, I think Ben is correct. I think

445
00:33:09,160 --> 00:33:12,200
gold is going to be probably five to six thousand

446
00:33:12,279 --> 00:33:17,119
by the end of twenty twenty seven. So three years

447
00:33:18,680 --> 00:33:22,480
gold will probably three x from where it is now,

448
00:33:22,240 --> 00:33:24,480
and actually sorry, two x from where it is now.

449
00:33:26,480 --> 00:33:28,079
And then you'd be like, oh, well, that's a two

450
00:33:28,160 --> 00:33:32,799
hundred percent return, I'm going to go buy gold. Well

451
00:33:33,079 --> 00:33:37,240
you could do that, but really that isn't all that

452
00:33:37,400 --> 00:33:40,000
great because there's going to be other things that go

453
00:33:40,119 --> 00:33:43,279
up a hell of a lot more, right, So just

454
00:33:43,400 --> 00:33:47,039
park the gold conversation and anyone talking about gold off

455
00:33:47,079 --> 00:33:50,640
to the side, right, have some of your money in gold, Yes,

456
00:33:52,519 --> 00:33:56,680
but no more than twenty percent at the absolute maximum.

457
00:33:56,920 --> 00:33:58,960
Speaker 2: Well, especially after the run it's had, right, and there's

458
00:33:59,000 --> 00:34:01,319
the time to buy these things, and it's generally not

459
00:34:01,440 --> 00:34:04,720
after it's gone vertical like here today. I'd have to

460
00:34:04,720 --> 00:34:07,559
look it up specifically, but it's up to at least

461
00:34:07,559 --> 00:34:10,719
twenty or thirty percent in what four or five months,

462
00:34:11,239 --> 00:34:14,239
So I think there's part of it too, where when

463
00:34:14,760 --> 00:34:17,719
like if you're listening to investing podcasts or different people

464
00:34:17,760 --> 00:34:20,840
talking about it, and everyone's talking about gold and gold

465
00:34:20,880 --> 00:34:24,360
miners and all these different things. When something gets hot,

466
00:34:24,440 --> 00:34:27,840
that's generally not the time to be like piling in. Right,

467
00:34:27,920 --> 00:34:30,119
It doesn't mean you automatically sell either, Right. I think

468
00:34:30,239 --> 00:34:32,599
gold's doing higher. I don't think it's a sell at all,

469
00:34:32,760 --> 00:34:37,159
But I don't think it's somewhere it's made the most

470
00:34:37,159 --> 00:34:41,840
attractive place to be buying. But the thing on gold

471
00:34:41,840 --> 00:34:44,280
I think is interesting too, and it feeds into the GDP.

472
00:34:44,559 --> 00:34:46,920
I don't know if you saw this, but the I

473
00:34:46,920 --> 00:34:49,880
think is people are complaining about key one GDP being

474
00:34:49,960 --> 00:34:54,239
negative because the US imported so much gold, which if

475
00:34:54,239 --> 00:34:57,559
that like doesn't set off alarm bells of GDP and

476
00:34:57,599 --> 00:35:00,039
not having actually anything to do with the economy. I

477
00:35:00,039 --> 00:35:03,400
think that's a it's just interesting that people are saying, oh,

478
00:35:03,480 --> 00:35:07,880
GDP's week. It's like, Okay, what is importing a shitload

479
00:35:07,880 --> 00:35:10,519
of gold actually have to do with the health of

480
00:35:10,559 --> 00:35:15,679
the economy? Like next to nothing? Right, And when you

481
00:35:15,760 --> 00:35:17,239
kind of look at some of these different things in

482
00:35:17,280 --> 00:35:21,719
the narratives and recession narratives of oil and copper and

483
00:35:21,840 --> 00:35:26,440
all these different trades, and like, oh, there's gonna be

484
00:35:27,039 --> 00:35:29,960
supply chain issues and shortages and you're not gonna be

485
00:35:29,960 --> 00:35:33,639
able to get your Chinese whatever from the grocery store,

486
00:35:33,760 --> 00:35:38,079
from Amazon whatever it is because container ships and all

487
00:35:38,079 --> 00:35:40,239
these different things, all the ports are empty, all these

488
00:35:40,280 --> 00:35:43,159
narratives you see on social media, and then you listen

489
00:35:43,199 --> 00:35:45,079
to a guy like I won't claim to be a

490
00:35:45,119 --> 00:35:46,760
shipping expert, but if you go listen to a guy

491
00:35:46,800 --> 00:35:51,880
like Salamarcagliano, like he does daily like or at least

492
00:35:51,920 --> 00:35:54,000
like three or four times a week, he does updates

493
00:35:54,000 --> 00:35:55,599
on what's going on the shipping that's the name of

494
00:35:55,599 --> 00:35:58,719
the channel, and he's basically like, yeah, look, it's not

495
00:35:58,880 --> 00:36:01,639
a it's not business as usual, but it's not like

496
00:36:01,760 --> 00:36:04,960
the end of the world like COVID supply chain shit show.

497
00:36:05,440 --> 00:36:08,199
So I think the narrative and this goes back into

498
00:36:08,199 --> 00:36:10,880
the narrative and flows and some of these different things

499
00:36:10,880 --> 00:36:14,360
that drive markets in general. But I think it's pretty interesting.

500
00:36:14,760 --> 00:36:17,880
I've had a conversations with friends on the phone recently,

501
00:36:18,199 --> 00:36:21,280
like complaining about fake and gay markets, where you kind

502
00:36:21,280 --> 00:36:24,280
of like, look at all this stuff where you have

503
00:36:25,039 --> 00:36:29,360
passive investing like creating massive distortions where I think it's

504
00:36:29,880 --> 00:36:34,119
like fifty to fifty five percent of like passive of

505
00:36:34,199 --> 00:36:37,320
investing is done by passive vehicles. That's like your S

506
00:36:37,320 --> 00:36:40,599
and P five hundred funds, your spy VU, I think

507
00:36:40,719 --> 00:36:43,199
is a Vanguard one. But the point is that, like

508
00:36:43,639 --> 00:36:46,719
it really is as simple as if you give Vanguard money,

509
00:36:46,800 --> 00:36:49,960
they buy, if you take money back right, they sell.

510
00:36:50,000 --> 00:36:56,039
There's no human being like making decisions there. And that

511
00:36:56,079 --> 00:36:59,480
creates distortions where you have like seven or eight tech

512
00:36:59,480 --> 00:37:03,119
companies like the top ten in SMP basically account for

513
00:37:03,599 --> 00:37:07,639
I think it was like forty or forty SMP five hundred.

514
00:37:07,679 --> 00:37:09,920
I could be off on that, but it's even worse

515
00:37:09,920 --> 00:37:12,199
for like the NASDAC and some of these different things

516
00:37:12,239 --> 00:37:16,840
where you have passive disortions. You've got concentration risk in

517
00:37:16,880 --> 00:37:19,960
those index funds, You've got narratives and flows and all

518
00:37:20,000 --> 00:37:22,079
these different things. And at the same time you have

519
00:37:22,119 --> 00:37:27,119
Trump doing his thing with constantly tweeting or putting out narratives.

520
00:37:27,599 --> 00:37:31,320
And my buddy was talking about this. When Trump says

521
00:37:31,320 --> 00:37:34,840
it's a good time to buy stocks, it's a like, obviously,

522
00:37:35,440 --> 00:37:37,280
do your own, make your own decisions here, but he

523
00:37:37,320 --> 00:37:38,800
was like, I'm going to buy and that was like

524
00:37:38,880 --> 00:37:42,280
late last week and then Chinese trade deal or like

525
00:37:42,360 --> 00:37:45,679
when like the WHLL tariff circus was going on in

526
00:37:45,800 --> 00:37:48,119
early April, and he's like, it's probably a pretty good

527
00:37:48,119 --> 00:37:50,679
time to buy stocks, and then they like pump the markets. Basically,

528
00:37:50,719 --> 00:37:53,239
I think when you have Trump doing like tape bombs

529
00:37:53,320 --> 00:37:56,159
like that and like short term trading, like it's really

530
00:37:56,159 --> 00:37:59,280
easy to get chopped to bits trying to like trade

531
00:37:59,320 --> 00:38:01,000
in and out and do all these things. And that's

532
00:38:01,000 --> 00:38:04,960
why I'd rather just buy something that's cheap and hopefully

533
00:38:04,960 --> 00:38:07,440
it has a catalyst and let other people figure it

534
00:38:07,480 --> 00:38:11,599
out later. But I was thinking maybe if I could

535
00:38:12,079 --> 00:38:14,320
redirect here too, and that maybe ask a question of

536
00:38:14,400 --> 00:38:18,480
you story. I think the thing that was I've been

537
00:38:18,480 --> 00:38:20,880
thinking about lately with the economy and some of the

538
00:38:20,960 --> 00:38:25,880
narrative run tax cuts. The question I have is like

539
00:38:26,000 --> 00:38:28,639
everyone's bitching and moaning, like investors are complaining about debt

540
00:38:28,639 --> 00:38:30,440
and death sits and all these things, like it's gonna

541
00:38:30,440 --> 00:38:33,599
be like the sky is falling, it's all over. If

542
00:38:33,599 --> 00:38:36,639
we cut income taxes on people making less than two

543
00:38:36,679 --> 00:38:39,599
hundred thousand a year, like I've been hearing, but I

544
00:38:39,599 --> 00:38:42,480
think the thing that like first order effect, if you

545
00:38:42,519 --> 00:38:46,760
cut income taxes excuse me, income taxes to zero for

546
00:38:47,679 --> 00:38:52,159
that like group of people, doesn't the economy just like

547
00:38:52,519 --> 00:38:55,360
rip in the next three six months? Yes, like is

548
00:38:55,400 --> 00:38:57,079
it just take off again?

549
00:38:57,239 --> 00:39:02,239
Speaker 3: They never so basic. The first to month, the first

550
00:39:02,400 --> 00:39:07,320
two to three weeks of Trump's tariffs were the financial

551
00:39:07,400 --> 00:39:13,280
media's covid right, talk about a deliberate scare campaign because

552
00:39:13,280 --> 00:39:17,840
remember the in remember the institutions that don't want the

553
00:39:18,320 --> 00:39:23,840
trade deals to happen. Every country in the world, all

554
00:39:23,880 --> 00:39:29,119
of their intelligence agencies, right and all of their very

555
00:39:29,239 --> 00:39:33,079
very wealthy people are going to be either funding and

556
00:39:33,320 --> 00:39:38,159
or pressuring media organizations, financial media organizations to basically say,

557
00:39:38,159 --> 00:39:40,800
how this is going to be a disaster. Think about

558
00:39:40,800 --> 00:39:45,039
it this. If Trump the on shoring of US manufacturing

559
00:39:47,280 --> 00:39:52,719
is going to creat China's economy, it's going to creator

560
00:39:52,760 --> 00:39:56,119
a lot of these emerging market economies. But let's just

561
00:39:56,159 --> 00:39:58,960
take China for instance, because they actually have some clout.

562
00:40:00,760 --> 00:40:05,400
The number one priority then of all of the Chinese

563
00:40:05,480 --> 00:40:13,360
intelligence apparatus has one priority now to try and stop

564
00:40:13,559 --> 00:40:20,159
Donald Trump from doing this. Europe, same thing, UK, same

565
00:40:20,320 --> 00:40:25,280
thing So the problem about globalism is when you try

566
00:40:25,320 --> 00:40:32,760
and make national policy decisions that involve economics in any capacity,

567
00:40:33,280 --> 00:40:40,440
you now are in direct conflict with large swaths of

568
00:40:40,480 --> 00:40:45,760
the globe who are going to influence just like US

569
00:40:45,840 --> 00:40:50,599
intelligence influences, just like Israeli intelligence influences. The number one

570
00:40:50,599 --> 00:40:55,039
thing that intelligence agencies like to influence as the fucking media. Right,

571
00:40:55,039 --> 00:40:58,679
Because if you're China, the on shoring of manufacturing and

572
00:40:58,719 --> 00:41:03,239
the application of IFS is now an existential threat, no

573
00:41:03,480 --> 00:41:09,880
different than Ukraine and joining NATO on Russia's border. It's

574
00:41:09,880 --> 00:41:11,159
that big of a deal for you.

575
00:41:12,360 --> 00:41:14,800
Speaker 2: And if I could jump into and add on the

576
00:41:14,920 --> 00:41:17,960
China thing, like when you look at the Chinese economy

577
00:41:18,000 --> 00:41:21,760
and the subsidies and distortions that are going on in manufacturing,

578
00:41:21,800 --> 00:41:23,760
in real estate where it's like, oh yeah, just take

579
00:41:23,760 --> 00:41:27,599
a zero percent loan to start up this electric vehicle company,

580
00:41:27,639 --> 00:41:30,599
and like all these different things. Like I think there's

581
00:41:30,679 --> 00:41:34,000
so many distortions that go on underneath the surface in

582
00:41:34,679 --> 00:41:38,159
manufacturing where if you overinvest in some of these sectors,

583
00:41:38,639 --> 00:41:42,719
it crowds out other areas and it really like, I

584
00:41:42,760 --> 00:41:47,599
think the distortions in their economy because they're basically toggling

585
00:41:47,639 --> 00:41:50,760
switches and monkeying with the controls I think are like

586
00:41:50,840 --> 00:41:53,079
I potentially even more extreme than some of the stuff

587
00:41:53,079 --> 00:41:54,119
you see here in the US.

588
00:41:55,320 --> 00:42:01,159
Speaker 3: Yes, the national socials had the better idea obviously, which

589
00:42:01,199 --> 00:42:04,679
is where the government would give directives like, hey, we're

590
00:42:04,679 --> 00:42:06,239
going to need this in a couple of years, we

591
00:42:06,280 --> 00:42:10,480
want you to go in this direction, right, and businesses

592
00:42:10,519 --> 00:42:15,519
would then go pursue that initiative themselves. China does it

593
00:42:15,559 --> 00:42:19,280
a different way, all right. China's a very transactional society,

594
00:42:21,719 --> 00:42:24,159
and they basically have to straight up have to pay

595
00:42:25,039 --> 00:42:29,840
businesses to achieve any of the the policy needs of

596
00:42:29,840 --> 00:42:34,920
the state. Right, they're not unified in that capacity, right,

597
00:42:34,960 --> 00:42:43,599
Like they're not unified in common purpose because well they're cynical, right,

598
00:42:43,639 --> 00:42:46,559
Like the Chinese people themselves are cynical. Like they don't

599
00:42:46,639 --> 00:42:49,239
give a shit about the Chinese government. You know, it's

600
00:42:49,239 --> 00:42:52,039
not like it is in European countries or you know,

601
00:42:52,719 --> 00:42:58,519
where ideals matter, not ideas ideals. So yeah, they have

602
00:42:58,599 --> 00:43:02,360
to straight up checks to get these things to happen,

603
00:43:04,119 --> 00:43:07,239
which leads to massive distortions like you're talking about, and

604
00:43:07,360 --> 00:43:13,880
massive concentrations of debt risk. So when you're talking about

605
00:43:13,920 --> 00:43:17,400
the distortions and the bubbling out in certain areas. You're

606
00:43:17,440 --> 00:43:20,119
just talking about the capital on one side of it,

607
00:43:20,480 --> 00:43:22,559
but underneath the surface there is a bubble in the

608
00:43:22,599 --> 00:43:26,159
opposite direction, Yeah, which is debt.

609
00:43:26,360 --> 00:43:30,039
Speaker 2: But bubbles create anti bubbles too. Yeah, commodities is like

610
00:43:30,079 --> 00:43:32,760
the anti bubble at least where I see it right now.

611
00:43:32,840 --> 00:43:39,480
Speaker 3: Yes, so, yeah, everything that has happened in the financial

612
00:43:39,519 --> 00:43:42,760
press and the regular press over the last two weeks

613
00:43:43,480 --> 00:43:46,719
has been deliberate scare bullshit to stop Donald Trump from

614
00:43:46,760 --> 00:43:49,400
doing exactly what he's doing. And that's why it is

615
00:43:49,440 --> 00:43:53,440
so divergent from the reality we see. Like literally, the

616
00:43:53,760 --> 00:43:56,639
financial press was like as bad as the regular press

617
00:43:56,719 --> 00:43:59,760
during peak covid as. How fucking shameful.

618
00:43:59,800 --> 00:44:00,360
Speaker 2: It's been.

619
00:44:01,760 --> 00:44:08,920
Speaker 3: So yeah, completely overblown nonsense. But it's understandable why a

620
00:44:08,920 --> 00:44:10,800
lot of these nations are leaning on a lot of

621
00:44:10,800 --> 00:44:13,719
these media organizations, because to them, it really is existential

622
00:44:14,199 --> 00:44:16,320
and this is over the broader thing that we're talking

623
00:44:16,360 --> 00:44:19,639
about that nobody's really going to understand a lot of

624
00:44:19,639 --> 00:44:23,119
people will understand, like if I say globalism is fucking over,

625
00:44:24,159 --> 00:44:28,360
they'll say, oh, okay, that makes sense, but they don't

626
00:44:28,440 --> 00:44:32,920
understand what that practically means in their like reality, right

627
00:44:33,000 --> 00:44:36,480
like at the grocery store or you know, when they

628
00:44:36,480 --> 00:44:40,000
go to buy things or things like that. It's we're

629
00:44:40,039 --> 00:44:51,280
talking about a fucking a shift so great that it's

630
00:44:51,280 --> 00:44:55,239
hard to conceptualize what this actually means making things in

631
00:44:55,280 --> 00:44:59,480
America on shoring US industries like these all sound really good,

632
00:45:00,679 --> 00:45:03,880
but what's happening is going to be profound in a

633
00:45:03,920 --> 00:45:06,320
whole bunch of ways in people's day to day lives

634
00:45:06,320 --> 00:45:09,360
that they're not seeing. And when you get to thinking

635
00:45:09,599 --> 00:45:11,480
on that, when you're thinking about the second and third

636
00:45:11,559 --> 00:45:16,280
order effects, that's when there's opportunity to make money.

637
00:45:16,960 --> 00:45:17,159
Speaker 2: Right.

638
00:45:17,199 --> 00:45:22,920
Speaker 3: So, for instance, I've been accumulating a bunch of I

639
00:45:22,920 --> 00:45:25,320
won't say the specific stock, but let's just say there's

640
00:45:25,320 --> 00:45:30,079
a bunch of publicly traded junk yards. They have super

641
00:45:30,119 --> 00:45:36,840
low debt, almost none, so that means all the revenue

642
00:45:37,239 --> 00:45:41,119
is not getting eaten up by interest payments and basically

643
00:45:41,119 --> 00:45:45,639
credit card payments. So that means they have a ton

644
00:45:45,639 --> 00:45:47,880
of cash on hand. And if they ever needed to

645
00:45:48,199 --> 00:45:51,519
rapidly expand let's say that credit is available to them,

646
00:45:52,239 --> 00:45:54,800
they can go get debt because they're not in debt

647
00:45:54,840 --> 00:45:58,800
when they need it. And why would I be buying

648
00:45:59,079 --> 00:46:06,840
junk yard stock that sounds retarded. Well, making things in

649
00:46:06,920 --> 00:46:13,760
America is going to be very, very difficult when it

650
00:46:13,800 --> 00:46:19,880
comes to who has been making your auto parts? Right,

651
00:46:19,960 --> 00:46:27,679
and who has been making your automobiles. Well, there's something

652
00:46:27,719 --> 00:46:30,360
called and this is something that you should think of,

653
00:46:30,519 --> 00:46:34,519
ben when you're allocating, is how long the country has

654
00:46:34,559 --> 00:46:38,320
been really not just the country, just the entire global

655
00:46:38,320 --> 00:46:44,239
economy has operated on planned obsolescence. Planned obsolescence is something

656
00:46:44,360 --> 00:46:50,960
very important to think about because businesses got well, they

657
00:46:51,000 --> 00:46:53,920
got fucking lazy, rather than come up with a new

658
00:46:53,960 --> 00:46:59,360
technology that's going to do new things that's risky. Who

659
00:46:59,440 --> 00:47:02,559
knows if it pays off. Maybe it does, maybe it doesn't,

660
00:47:02,639 --> 00:47:06,320
who knows. If only we could figure out a way

661
00:47:06,360 --> 00:47:11,960
to get these schmucks on a subscription plan where you know,

662
00:47:12,079 --> 00:47:15,840
they're basically renting that shit for me every single year,

663
00:47:17,239 --> 00:47:20,880
you know, and they're upgrading every year like a cell phone. Well,

664
00:47:20,920 --> 00:47:24,800
how do I make sure or your cell phone gets upgraded? Well,

665
00:47:24,840 --> 00:47:27,000
isn't it funny how your fucking iPhone all of a

666
00:47:27,000 --> 00:47:31,760
sudden commits ritual suicide every time a new iPhone comes

667
00:47:31,800 --> 00:47:34,639
out all of a sudden, this motherfucker is breaking in

668
00:47:34,679 --> 00:47:37,679
every single way that it's probably it becomes the worst,

669
00:47:38,679 --> 00:47:39,320
Isn't that funny?

670
00:47:39,320 --> 00:47:41,719
Speaker 2: For dishs and like laundry.

671
00:47:41,440 --> 00:47:47,320
Speaker 3: Machines, dishwashers machines for years. But if I get refrigerator

672
00:47:47,320 --> 00:47:49,719
from the thirties, it still works.

673
00:47:50,360 --> 00:47:53,280
Speaker 2: Yeah, my grandma still has one from like forties, fifties.

674
00:47:53,480 --> 00:47:58,440
Speaker 3: Literally, just I think everyone that's listening should be taking

675
00:47:58,480 --> 00:48:04,559
what money that they have available, not in your investing money,

676
00:48:04,599 --> 00:48:08,280
not your IRA money, whatever I'm talking about, like spare

677
00:48:08,320 --> 00:48:15,519
cash you have, and buying old appliances, buying old power tools.

678
00:48:17,480 --> 00:48:25,599
These things matter because, like Ben just said, his grandmother

679
00:48:25,679 --> 00:48:29,800
has a refrigerator that has stayed running perfectly fucking fine

680
00:48:29,840 --> 00:48:36,679
without ever breaking since nineteen forty. But any refrigerator that

681
00:48:36,719 --> 00:48:40,320
you've bought in the last thirty years will not last

682
00:48:40,599 --> 00:48:43,920
more than four years without something breaking, because the goal

683
00:48:44,000 --> 00:48:46,719
isn't to sell you a working refrigerator. The goal is

684
00:48:46,760 --> 00:48:51,880
to keep you buying new refrigerators. The price of globalization

685
00:48:52,599 --> 00:48:59,760
didn't drive prices down, right, planned OPSI lescens drove things

686
00:48:59,760 --> 00:49:02,800
down because they were able to sell you shittier stuff

687
00:49:03,920 --> 00:49:07,800
and to build it will it lasts forever? Cost more? Right? So, really,

688
00:49:07,840 --> 00:49:13,360
what you think is globalization and cheaper manufacturing places lowering

689
00:49:13,400 --> 00:49:17,639
the cost of goods, Like any fucking libertarian open borders

690
00:49:17,679 --> 00:49:20,480
faggot will tell you all just the larger we make this,

691
00:49:20,679 --> 00:49:24,199
everything gets cheaper. No, things have just gotten cheaper in

692
00:49:24,239 --> 00:49:26,639
the last thirty years. And you're looking at that like

693
00:49:26,679 --> 00:49:29,760
it's the fucking rule and that if we just replicate

694
00:49:29,840 --> 00:49:34,760
certain societal changes, this will happen in every instance. But

695
00:49:34,800 --> 00:49:37,800
they're wrong about what the actual cause of things getting

696
00:49:37,880 --> 00:49:43,960
cheaper is. It's not manufacturers being able to manufacture wherever

697
00:49:44,000 --> 00:49:47,599
they want and in places without regulation, like none of

698
00:49:47,599 --> 00:49:51,480
that is real. Prices went down, yes, exactly, Prices went

699
00:49:51,519 --> 00:49:55,239
down because they're selling you shit like literal pieces of

700
00:49:55,320 --> 00:49:58,639
trash that won't work for more than two years. When

701
00:49:58,719 --> 00:50:01,679
before to sell you refrigerator, I would have to sell

702
00:50:01,719 --> 00:50:04,159
you some shit that would last eighty years like your

703
00:50:04,159 --> 00:50:08,679
grandma's and that shit's expensive. So buy here's.

704
00:50:08,440 --> 00:50:12,639
Speaker 2: A one hundred percent here's a little detour and a

705
00:50:12,679 --> 00:50:15,760
business idea. If there's any mechanical engineers that have to

706
00:50:15,800 --> 00:50:20,360
be listening or people that want to actually manufacture stuff,

707
00:50:20,440 --> 00:50:23,679
like if you have the skills to go out and

708
00:50:23,719 --> 00:50:29,639
build a refrigerator, a washing machine, launcher machine, all these appliances,

709
00:50:29,880 --> 00:50:34,639
and they're indestructible, bulletproof. And on top of that, you said, yeah,

710
00:50:34,679 --> 00:50:36,719
it's gonna cost you a small fortune, but it's gonna

711
00:50:36,760 --> 00:50:39,159
last forever, and we'll come out and repair it like

712
00:50:39,320 --> 00:50:42,079
free charge in the future if it does break. If

713
00:50:42,119 --> 00:50:45,079
you can like line up an idea like that, I

714
00:50:45,079 --> 00:50:47,960
think there's there would be plenty of people that would

715
00:50:47,960 --> 00:50:51,719
pay for it. But that's a project for the future

716
00:50:51,760 --> 00:50:53,960
maybe if someone has that area of expertise. But I

717
00:50:53,960 --> 00:50:58,719
think there's something to be said for the subscription model,

718
00:50:58,880 --> 00:51:01,280
Like you got to have revenue coming in all the time,

719
00:51:01,599 --> 00:51:06,719
and people get caught up in like it's the same,

720
00:51:07,039 --> 00:51:08,599
Like it really is the same deal if you're.

721
00:51:08,519 --> 00:51:12,960
Speaker 3: That only matters if your business is this needs to

722
00:51:13,000 --> 00:51:16,119
be steady because you owe a lot of money and debt.

723
00:51:16,880 --> 00:51:22,639
Subscription models become necessary for companies that are borrowing.

724
00:51:22,960 --> 00:51:28,960
Speaker 2: A lot trying to throw their way out. Yeah, but yeah,

725
00:51:28,960 --> 00:51:31,920
with with the like it really is no different than Netflix.

726
00:51:32,000 --> 00:51:35,480
If you're like like laundry machine, if that ship breaks

727
00:51:35,519 --> 00:51:38,159
every three to five years, I mean, it's a one

728
00:51:38,559 --> 00:51:41,559
like one time, big ticket purchase in theory, but if

729
00:51:41,599 --> 00:51:43,760
you're doing it every five years like clockwork, it really

730
00:51:43,840 --> 00:51:47,119
is no different than ten bucks a month for Netflix,

731
00:51:47,159 --> 00:51:50,599
whatever it is. But I think it is one of

732
00:51:50,639 --> 00:51:53,880
those things where like this is where I think there's

733
00:51:53,920 --> 00:51:57,400
other disortions that I think are really interesting. Because you

734
00:51:57,440 --> 00:52:01,079
have private equity, you've got private credit, you have all

735
00:52:01,119 --> 00:52:04,719
these endowments that are locked up in I think it's

736
00:52:05,519 --> 00:52:08,400
like sixty or seventy percent of Harvard's endowment. Don't don't

737
00:52:08,440 --> 00:52:10,840
call me on exact numbers, but a whole shitload of

738
00:52:11,199 --> 00:52:16,519
endowments are in investments that are very liquid. And you

739
00:52:16,599 --> 00:52:21,480
see all these different firms like launching a oh here's

740
00:52:21,599 --> 00:52:27,239
a private credit and a private equity ETF. We're gonna

741
00:52:27,440 --> 00:52:33,039
launch this all liquid garbage, toxic sludge to public investors.

742
00:52:33,679 --> 00:52:37,400
And like I said, we said no investing advice at

743
00:52:37,400 --> 00:52:41,000
the beginning, Please do not buy private equity, private credit

744
00:52:41,039 --> 00:52:44,559
ETF junk from these people that are trying to dump

745
00:52:44,599 --> 00:52:48,440
on retail, Like at least if you want to, if

746
00:52:48,440 --> 00:52:50,519
you really have to, like know exactly what you're buying.

747
00:52:51,320 --> 00:52:54,559
And when you have some of these other distortions, private

748
00:52:54,559 --> 00:52:58,159
equity private credit, and these guys that can't survive on

749
00:52:58,280 --> 00:53:00,440
I mean they're struggling at like four or five percent rates.

750
00:53:01,000 --> 00:53:05,079
And if we go like oh, six seven, like I

751
00:53:05,079 --> 00:53:07,360
think we're headed for double digit interest rates over a

752
00:53:07,360 --> 00:53:10,480
long enough period of time, and you look at what

753
00:53:10,519 --> 00:53:13,400
that does to a whole bunch of different industries. Like

754
00:53:13,440 --> 00:53:16,719
that's where the balance sheet of different companies becomes important,

755
00:53:16,840 --> 00:53:21,239
and like the cash flows of what the business actually

756
00:53:21,239 --> 00:53:23,880
does is going to be tied to inflation, Like is

757
00:53:23,880 --> 00:53:27,360
there debt rates, like are they fixed or variable? Interest rates?

758
00:53:27,800 --> 00:53:29,840
How long you're like, what are the maturities when like

759
00:53:29,920 --> 00:53:32,239
all these different things that kind of when you're looking

760
00:53:32,239 --> 00:53:35,639
at different businesses. This is one of the advantages of

761
00:53:35,679 --> 00:53:39,440
actually doing the CPA and public accounting as you get

762
00:53:39,480 --> 00:53:44,159
to see a whole different variety of companies and sectors.

763
00:53:44,639 --> 00:53:47,360
And when you see I'll give a personal example, I

764
00:53:47,360 --> 00:53:50,039
think the Statute of Limitations probably passed, but when you

765
00:53:50,079 --> 00:53:52,400
see I think it was Apollo. It's either pollow or

766
00:53:52,440 --> 00:53:55,360
areas and they go and buy value Village and they

767
00:53:55,480 --> 00:53:57,880
levered up to the tits and they're trying to dump

768
00:53:57,920 --> 00:54:01,800
it on public markets and ipo it and it is

769
00:54:02,480 --> 00:54:06,079
like the balance sheet is just stuff of nightmares, and

770
00:54:06,119 --> 00:54:07,920
they're trying to like dump it on public markets just

771
00:54:08,000 --> 00:54:11,639
like just avoid that. Right. So, I think there's a

772
00:54:11,639 --> 00:54:15,360
whole bunch of things where if you know, like it's

773
00:54:15,440 --> 00:54:17,719
it's pretty easy to back into some of these things

774
00:54:17,719 --> 00:54:20,079
where if you know, okay, I need to avoid X,

775
00:54:20,199 --> 00:54:22,599
Y and Z, and one of those things is crappy

776
00:54:22,639 --> 00:54:27,199
balance sheet. And one of those things is like bubbly

777
00:54:27,199 --> 00:54:32,760
evaluations or it's something that is very hot in news

778
00:54:32,840 --> 00:54:36,679
and I'm going to go buy ai AI stocks or

779
00:54:36,800 --> 00:54:40,119
quantum computing or like some of these things where if

780
00:54:40,159 --> 00:54:42,679
everyone's talking about it and the stocks up like fifty

781
00:54:42,760 --> 00:54:46,679
sixty seventy five percent in like the last couple of months,

782
00:54:46,719 --> 00:54:49,960
like the chances like that opportunity has passed for the

783
00:54:50,000 --> 00:54:54,280
most part. So the one one question I had too

784
00:54:54,840 --> 00:54:57,320
and wanted to see what you thought in this stormy

785
00:54:57,360 --> 00:55:00,880
with the rate side of things, It's amazing to me

786
00:55:00,920 --> 00:55:03,360
that people think rates are going down significantly from here

787
00:55:03,440 --> 00:55:07,079
because you don't have interest rate cycles where you get

788
00:55:07,119 --> 00:55:10,480
forty years to the declining rates and then like we

789
00:55:10,559 --> 00:55:13,840
go up for five years roughly and we come down

790
00:55:13,880 --> 00:55:17,480
a little bit. But we're gonna be going down some

791
00:55:17,519 --> 00:55:19,800
more from here. Like long term, I think rates are

792
00:55:19,840 --> 00:55:22,280
going way higher, but like forty years of the declining

793
00:55:22,360 --> 00:55:24,960
rates doesn't lead to five years a rising rates and

794
00:55:25,000 --> 00:55:27,519
then that cycle's over. But correct me if I'm wrong.

795
00:55:29,079 --> 00:55:31,400
Speaker 3: No, like I said, I think we're going to see

796
00:55:31,960 --> 00:55:36,679
double digit interest rates by the end of twenty twenty eight,

797
00:55:38,159 --> 00:55:42,440
I think we'll probably see it. I think we'll probably

798
00:55:42,480 --> 00:55:45,079
see and this is Fed funds rate, not mortgage rate.

799
00:55:48,119 --> 00:55:50,519
I think you will probably see an eight to ten

800
00:55:50,719 --> 00:55:55,199
percent Fed funds rate by the end of twenty twenty

801
00:55:57,000 --> 00:56:02,599
seven mid twenty twenty eight. But back to what we

802
00:56:02,599 --> 00:56:09,760
were saying about things that are so Basically, people are

803
00:56:09,800 --> 00:56:11,719
not going to be able to just go buy a

804
00:56:11,719 --> 00:56:19,639
new car every year. Right. The dealerships make their money

805
00:56:19,719 --> 00:56:22,599
on car repair. They don't make their money from selling

806
00:56:22,639 --> 00:56:25,360
you the car. They make money on you having to

807
00:56:25,440 --> 00:56:31,039
service it, right, And that's why it's so expensive. People

808
00:56:31,119 --> 00:56:35,679
are going to begin to have to repair things because

809
00:56:35,800 --> 00:56:40,239
new ones every ten seconds. Right, whenever this one gets

810
00:56:40,239 --> 00:56:43,880
dirty or you know, it's warranty is over, I have

811
00:56:43,960 --> 00:56:46,519
to sell this car. I'm gonna, you know, sell this

812
00:56:46,599 --> 00:56:50,280
car that I bought because it's warranty is about to expire,

813
00:56:50,639 --> 00:56:55,199
and that means I'm gonna have to pay to repair it. Right, Well,

814
00:56:56,159 --> 00:57:00,920
if you can't get replacement parts very easily because they're

815
00:57:00,960 --> 00:57:05,280
all made in China, then that makes repairing that a

816
00:57:05,320 --> 00:57:12,280
big problem. So buying a brand new car will mean

817
00:57:12,320 --> 00:57:15,480
that there will not be a lot of replacement parts

818
00:57:16,199 --> 00:57:20,360
available if all of a sudden they are flooding in

819
00:57:20,599 --> 00:57:24,679
from China and then no longer flooding in from China. Right,

820
00:57:24,800 --> 00:57:28,320
So if people have to repair their own things and

821
00:57:28,440 --> 00:57:32,719
the repair parts become very scarce, then things like junk

822
00:57:32,800 --> 00:57:42,880
yards right selling what do they call it, refurbished parts

823
00:57:44,000 --> 00:57:47,079
are going to be a huge deal. They're going to

824
00:57:47,119 --> 00:57:52,000
be vital. And those parts that those junk yards are

825
00:57:52,000 --> 00:57:55,559
sitting on right that they got for virtually nothing. Right,

826
00:57:55,559 --> 00:58:01,079
they're buying total cars for pennies from the insurance companies, right,

827
00:58:01,719 --> 00:58:05,760
those are going to be like, you know, thirty forty

828
00:58:05,800 --> 00:58:10,880
foot tall towers of gold, because every single part that

829
00:58:11,000 --> 00:58:14,480
makes up those cars are parts that are very very

830
00:58:14,480 --> 00:58:21,599
hard to get. And to what you were saying about,

831
00:58:21,880 --> 00:58:24,480
you know that anybody that knows anything a little bit

832
00:58:24,480 --> 00:58:29,760
of engineering might want to start thinking about making parts. Well,

833
00:58:31,320 --> 00:58:34,039
I'm going to give you this example. I'm on Facebook

834
00:58:34,079 --> 00:58:37,920
marketplace for Detroit, Michigan right now, right, this is in

835
00:58:38,039 --> 00:58:42,239
reading Michigan. I'm sorry, this is actually reading Pennsylvania, another

836
00:58:42,320 --> 00:58:45,199
place I did like a five hundred mile radius of Detroit,

837
00:58:45,360 --> 00:58:51,159
which is crazy. But right I am looking at, you know,

838
00:58:51,199 --> 00:58:57,119
reading Pennsylvania, another one of these former manufacturing hubs that

839
00:58:57,320 --> 00:59:02,920
because of the politics and the taxes that these Blue

840
00:59:02,920 --> 00:59:07,400
states have, it has effectively become impossible to run a

841
00:59:07,519 --> 00:59:13,360
manufacturing business of any kind out of Michigan, out of Illinois,

842
00:59:14,000 --> 00:59:19,360
or anywhere in New England, including Pennsylvania. The economics don't

843
00:59:19,400 --> 00:59:22,599
make sense because of the governance policies and the amount

844
00:59:22,639 --> 00:59:26,280
of taxes. So all these manufacturing businesses are going to go,

845
00:59:26,320 --> 00:59:32,239
are going out of business and likely never recovered after

846
00:59:32,320 --> 00:59:35,639
COVID if they were already barely hanging on. So I'm

847
00:59:35,719 --> 00:59:41,400
looking at a decal Mahoe, which is fps five hundred

848
00:59:41,719 --> 00:59:46,239
m NC CNC milling machine. It is a four axis

849
00:59:46,239 --> 00:59:50,840
C and C milling machine manufactured in Germany. Particular machine

850
00:59:50,840 --> 01:00:00,880
that I'm looking at is seven years old, which in

851
01:00:00,880 --> 01:00:04,440
industrial equipment is not allot at all. And this machine

852
01:00:04,559 --> 01:00:07,760
new costs roughly about a quarter of a million dollars.

853
01:00:09,119 --> 01:00:13,679
And if I go to you know, any of these

854
01:00:14,239 --> 01:00:19,239
manufacturing equipment wholesaling companies, they will sell me the same

855
01:00:19,320 --> 01:00:23,840
machine with roughly fifteen or twenty thousand hours on it

856
01:00:25,000 --> 01:00:29,559
for about eighty thousand euros, which right now is you know,

857
01:00:30,480 --> 01:00:34,000
about one hundred grand. So this machine is worth about

858
01:00:34,000 --> 01:00:42,119
one hundred thousand dollars used. This Facebook marketplace ad is

859
01:00:42,119 --> 01:00:45,519
for nine thousand dollars because this man has gone out

860
01:00:45,519 --> 01:00:51,400
of business. Nine thousand dollars for four access C and

861
01:00:51,480 --> 01:00:55,599
C machine and a very very nice German one at

862
01:00:55,599 --> 01:01:01,639
that I got to go down the list. Here is

863
01:01:01,920 --> 01:01:07,239
a Mitsubishi or thirty thousand dollars, thirty thousand dollars, thirty

864
01:01:07,320 --> 01:01:12,679
nine thousand dollars, sorry, in Detroit, Michigan. Right, they're twenty

865
01:01:12,719 --> 01:01:16,480
ten machines, so they're not the latest. Five access These

866
01:01:16,519 --> 01:01:20,079
are or four access C and C machines, which are

867
01:01:20,119 --> 01:01:25,239
more than enough to make all types of parts. But

868
01:01:25,280 --> 01:01:28,079
I can buy five of them, five C and C

869
01:01:28,320 --> 01:01:37,199
machines for forty thousand dollars because this guy in Detroit, Michigan,

870
01:01:37,719 --> 01:01:43,400
he's out of business. What about this other one? Here's

871
01:01:43,400 --> 01:01:47,280
a C and C lathe twelve thousand dollars. That's a

872
01:01:47,320 --> 01:01:49,880
big that's very large. It's a very large machine. If

873
01:01:49,880 --> 01:01:52,679
you wanted to make really large parts, that's what you

874
01:01:52,679 --> 01:01:58,639
would need. And because these states and their politics have

875
01:01:58,719 --> 01:02:02,360
made it impossible to run a manufacturing business, all of

876
01:02:02,400 --> 01:02:07,159
these poor business owners are going out of business. Here's

877
01:02:07,199 --> 01:02:11,840
a plasma CNC machine, I'm sorry, a plasma table NCNC machine.

878
01:02:11,880 --> 01:02:15,039
So that means you can do the CNC milling and

879
01:02:15,159 --> 01:02:17,880
also do the plasma cutting all in the same place

880
01:02:18,679 --> 01:02:23,719
for whopping fifteen thousand dollars. Here's a five access C

881
01:02:23,840 --> 01:02:27,960
and C machine. Five access is important because that's where

882
01:02:27,960 --> 01:02:34,800
you get in the really really kind of what's the

883
01:02:34,840 --> 01:02:39,119
word high precision manufacturing that you would need for like

884
01:02:39,159 --> 01:02:47,559
aerospace stuff. All right, it's a twenty nineteen and it's

885
01:02:47,599 --> 01:02:52,280
sixty thousand dollars in this machine new also German retails

886
01:02:52,280 --> 01:02:59,280
for about three hundred and ninety thousand dollars. So come on, guys,

887
01:02:59,519 --> 01:03:02,679
all of you engineers, maybe the best thing that you

888
01:03:02,719 --> 01:03:06,280
could be investing in is yourself. And if you know

889
01:03:06,360 --> 01:03:08,440
that the nation is going to be short on parts

890
01:03:10,599 --> 01:03:12,360
and it's going to take a very long time for

891
01:03:12,400 --> 01:03:16,719
all these big companies, because a big company is a

892
01:03:16,760 --> 01:03:21,840
lot like a battleship or a cruise ship. When it

893
01:03:21,880 --> 01:03:30,719
wants to turn around and change direction, it takes literally years.

894
01:03:28,280 --> 01:03:30,000
Speaker 2: Just the giant bureaucracy yep.

895
01:03:31,159 --> 01:03:33,760
Speaker 3: And then it's got to build new factories and facilities

896
01:03:33,800 --> 01:03:37,679
here in America and that's going to take time, right,

897
01:03:37,719 --> 01:03:40,320
So these supply chain issues might not get sorted out

898
01:03:40,320 --> 01:03:43,199
for six or seven years. Well, that's going to create

899
01:03:43,320 --> 01:03:48,360
quite a part shortage, is it not? Demand piling up

900
01:03:48,400 --> 01:03:52,199
for six years with no new increase in supply. You

901
01:03:52,199 --> 01:03:56,440
don't need to be a libertarian economics person to figure

902
01:03:56,440 --> 01:04:03,840
out what the fuck happens there. So it's a very

903
01:04:03,960 --> 01:04:07,840
risky time at a very uncertain time, and unfortunately a

904
01:04:07,920 --> 01:04:12,639
time where startup capital is going to be virtually nonexistent

905
01:04:13,599 --> 01:04:16,440
because everyone knows that a bunch of bad things are

906
01:04:16,480 --> 01:04:19,079
coming down the pike and a lot of uncertainty is happening.

907
01:04:20,199 --> 01:04:23,719
The idea of you getting an angel investor or a

908
01:04:23,840 --> 01:04:28,960
VC to come throw you a bunch of money for

909
01:04:29,079 --> 01:04:31,639
a hardware business is going to be very low, next

910
01:04:31,639 --> 01:04:35,719
to zero, and because of the credit market, like Ben

911
01:04:35,760 --> 01:04:37,639
and I have been saying is going to be very

912
01:04:37,760 --> 01:04:40,760
very tight because not only is interest rates going up.

913
01:04:42,159 --> 01:04:45,440
If interest rates go up, that means more people are

914
01:04:45,480 --> 01:04:49,920
going to default on their loans, right, And if more

915
01:04:49,920 --> 01:04:53,079
people are defaulting on their loans, that means lending becomes

916
01:04:53,079 --> 01:04:56,280
a lot riskier, which means banks are going to be

917
01:04:56,320 --> 01:05:00,199
more hesitant to lend. So if you can't get bank

918
01:05:00,280 --> 01:05:05,400
startup money and angel investors and venture capitalist types right,

919
01:05:05,480 --> 01:05:11,039
their pocketbooks are going to be really tight. Well, if

920
01:05:11,039 --> 01:05:14,360
you're really clever and you're willing to drive a bit,

921
01:05:17,280 --> 01:05:21,679
you can accomplish the same goal with very very very

922
01:05:21,719 --> 01:05:27,000
small amounts of money. In comparison, there's still going to

923
01:05:27,039 --> 01:05:30,639
be a bunch of technical know how you're gonna need. Right,

924
01:05:31,159 --> 01:05:34,719
These machines like people go to school to learn how

925
01:05:34,760 --> 01:05:37,639
to use them. I'm sure they're not fucking rocket science.

926
01:05:40,360 --> 01:05:43,119
But this may be something you want to invest in,

927
01:05:44,079 --> 01:05:47,719
if for no other reason than your own capabilities to

928
01:05:47,800 --> 01:05:51,760
make things for people in your community. Right. Don't get

929
01:05:51,760 --> 01:05:53,960
me wrong, You're not going to be like a megaparts

930
01:05:53,960 --> 01:05:56,840
supplier supplying things all around the world or sorry, all

931
01:05:56,840 --> 01:05:59,880
around the country, but you may be. But no matter what,

932
01:06:00,880 --> 01:06:03,199
you will have the capacity to make the things that

933
01:06:03,239 --> 01:06:07,440
your community is going to need. So it may not

934
01:06:07,519 --> 01:06:11,559
make you mega rich, but capital equipment is capital. It's

935
01:06:11,719 --> 01:06:16,760
worth money. So right now, because of the asymmetry in

936
01:06:16,800 --> 01:06:22,800
regulatory environments capital equipment, the price of capital equipment is

937
01:06:22,920 --> 01:06:27,079
artificially low, and we know that the need and demand

938
01:06:27,280 --> 01:06:30,719
for things that is manufactured by this equipment is going

939
01:06:30,719 --> 01:06:36,280
to increase exponentially in the near future. This makes a

940
01:06:36,360 --> 01:06:37,679
huge pricing mismatch.

941
01:06:37,679 --> 01:06:41,880
Speaker 2: When you say, Ben, yeah, I think the thing I'll

942
01:06:41,880 --> 01:06:45,320
add too is when like what you're really saying and

943
01:06:45,360 --> 01:06:49,239
what I'm hearing is as far as like what you're

944
01:06:49,519 --> 01:06:52,840
investing in or looking at or considering, I think from

945
01:06:53,920 --> 01:06:56,320
where we are now, moving forward in the next five to

946
01:06:56,360 --> 01:06:59,199
ten years, maybe longer, like you're going to want to

947
01:06:59,199 --> 01:07:01,519
be looking at things that tied to the real economy,

948
01:07:01,679 --> 01:07:05,239
tied to stuff that can't be printed, tied to businesses

949
01:07:05,320 --> 01:07:09,079
that produce stuff that can't be printed, oil, gas, coal,

950
01:07:10,079 --> 01:07:14,599
like agricultural commodities, whatever, like whatever it is. I think

951
01:07:14,719 --> 01:07:18,480
there's different strategies and ways to apply it. But I

952
01:07:18,559 --> 01:07:22,079
think what Stormy is saying is important, where like you're

953
01:07:22,119 --> 01:07:25,559
probably not going to want to own something that is

954
01:07:25,599 --> 01:07:33,360
built on a mountain of leverage on basically the status

955
01:07:33,440 --> 01:07:37,079
quo continuing as it is. Whether that's like looking at

956
01:07:37,320 --> 01:07:41,199
certain banks or certain financial institutions that might be a

957
01:07:41,280 --> 01:07:44,559
dumpster fire and they might have like off bound sheet

958
01:07:44,559 --> 01:07:46,920
derivatives like some of the European banks, where it's just

959
01:07:46,960 --> 01:07:49,679
a complete shit show, right, And I've been hearing about

960
01:07:49,840 --> 01:07:52,039
people saying the European banks are cheap and those stocks

961
01:07:52,079 --> 01:07:53,599
are cheap, and it's like they've gone up a lot,

962
01:07:53,760 --> 01:07:57,760
like great, fantastic, But if you have systemic shit happening,

963
01:07:58,440 --> 01:08:01,159
like I think the banks for the first to go,

964
01:08:01,239 --> 01:08:05,320
it's like there's certain things where if you can narrow

965
01:08:05,320 --> 01:08:08,159
it down to like know what you want to avoid,

966
01:08:08,360 --> 01:08:11,119
know generally the areas you want to look, right, there's

967
01:08:11,159 --> 01:08:13,840
going to be different ways to go about doing that,

968
01:08:13,880 --> 01:08:18,479
whether it's right buying C and C machines or buying

969
01:08:19,279 --> 01:08:23,279
uranium producers or buying like natural gas stocks, whatever it is.

970
01:08:23,800 --> 01:08:27,760
So I think that's at least the way I kind

971
01:08:27,800 --> 01:08:29,840
of look at where things are headed is you want

972
01:08:29,840 --> 01:08:33,439
to be tied the real economy production of real goods

973
01:08:33,520 --> 01:08:37,760
or commodities or services, and not just something that is

974
01:08:38,319 --> 01:08:41,960
financial wizardry, you know, yep.

975
01:08:43,840 --> 01:08:46,319
Speaker 3: And that's not necessarily a bad thing since we're talking

976
01:08:46,319 --> 01:08:50,840
about euro the Eurozone, right if you own if you're

977
01:08:50,880 --> 01:08:57,680
buying any of this bullshit about because Ben can probably

978
01:08:57,720 --> 01:09:03,840
tell you. When I get set on an idea and

979
01:09:03,920 --> 01:09:08,399
I know my thesis, basically, I know that I'm right,

980
01:09:08,640 --> 01:09:12,039
and I know without a doubt that I'm right, and

981
01:09:12,119 --> 01:09:17,920
I set my positions, I stop looking at the financial press.

982
01:09:17,960 --> 01:09:21,319
I don't give a shit because nothing that is going

983
01:09:21,319 --> 01:09:24,079
to be printed in that news is going to make

984
01:09:24,119 --> 01:09:27,680
me not right. You know.

985
01:09:28,279 --> 01:09:32,159
Speaker 2: Yeah, once you know something cold, there's no surprises left exactly.

986
01:09:33,319 --> 01:09:38,560
Speaker 3: But I do know that over the last couple of weeks,

987
01:09:39,399 --> 01:09:42,359
there has been a lot of hype in financial media

988
01:09:43,439 --> 01:09:46,560
talking about European companies and they're going under, they're going

989
01:09:46,560 --> 01:09:48,359
through a boom, and you need to take your money,

990
01:09:48,399 --> 01:09:51,159
and you need to invest in European defense companies like

991
01:09:51,239 --> 01:09:54,199
Ryan Metal and stuff, because they're going to get this

992
01:09:54,319 --> 01:09:57,880
huge stimulus and all this stuff, and Europe's got to

993
01:09:57,880 --> 01:10:01,720
rearm and all these things. If you put a dollar

994
01:10:01,760 --> 01:10:03,359
into Europe, you're a fucking idiot.

995
01:10:04,960 --> 01:10:07,039
Speaker 2: If I could jump in for a sec Ryan Metal

996
01:10:07,119 --> 01:10:10,079
up two hundred thirty percent in the last year, one

997
01:10:10,159 --> 01:10:13,119
hundred and seventy seven percent since the start of this year,

998
01:10:13,920 --> 01:10:18,560
and trading at almost one hundred times last year's earnings.

999
01:10:20,199 --> 01:10:22,520
Speaker 3: So can you explain what that means to people?

1000
01:10:24,319 --> 01:10:29,800
Speaker 2: Basically? There, let me pull up there. We've got a

1001
01:10:29,840 --> 01:10:36,680
screener here if you give me a second. So basically,

1002
01:10:36,960 --> 01:10:40,000
like right now, the US traded version of the stock

1003
01:10:40,359 --> 01:10:45,079
is like seventeen eighteen hundred bucks. If you have pe

1004
01:10:45,159 --> 01:10:48,119
of one hundred, then their earnings per share over the

1005
01:10:48,199 --> 01:10:52,079
last year is like twenty bucks. So you're paying eighteen

1006
01:10:52,159 --> 01:10:59,640
hundred dollars for twenty dollars of earnings, which if you say,

1007
01:10:59,800 --> 01:11:03,359
how had a rental property, I guess the simplest way

1008
01:11:03,359 --> 01:11:07,279
to put it, and you basically had like one percent

1009
01:11:07,319 --> 01:11:09,039
cap rate? Is the way, Like it take you one

1010
01:11:09,079 --> 01:11:11,920
hundred years to year money out right if earnings can

1011
01:11:12,000 --> 01:11:15,359
grow or something didn't happen. So, and that's a company

1012
01:11:15,399 --> 01:11:18,560
that is eighty seven billion dollars, so it's not some

1013
01:11:18,640 --> 01:11:21,039
small company. It's going to grow or at least can't

1014
01:11:21,039 --> 01:11:27,239
grow the sky, So it's I would avoid it. Basically,

1015
01:11:27,840 --> 01:11:31,119
I always said, not advice, but they're a better place

1016
01:11:31,199 --> 01:11:32,840
to be I'll leave it at.

1017
01:11:32,720 --> 01:11:35,199
Speaker 3: That, Yes, exactly, that's what I said. Like just I

1018
01:11:35,239 --> 01:11:40,560
can't say a specific investment, but I can say like

1019
01:11:41,640 --> 01:11:45,039
I wouldn't put a dollar in the Eurozone because if

1020
01:11:45,119 --> 01:11:49,479
you know anything about the news and economy, particularly their

1021
01:11:49,600 --> 01:11:56,159
energy costs, then you know that there is no case,

1022
01:11:56,359 --> 01:11:59,880
there is no bullish case for the European economy period.

1023
01:12:01,399 --> 01:12:05,199
And if you see central banks all rushing to gold,

1024
01:12:05,279 --> 01:12:11,920
remember I said about counterparty risk, and that's what they're like,

1025
01:12:12,399 --> 01:12:15,640
gold is a hedge against governments. At a personal level,

1026
01:12:15,680 --> 01:12:20,640
gold holding is a hedge against your own When banks

1027
01:12:20,680 --> 01:12:25,880
do it, it's a hedge against other governments. So if

1028
01:12:25,920 --> 01:12:31,159
you see all of these nations central banks rushing to

1029
01:12:31,239 --> 01:12:35,520
buy gold, and remember it's worried. They're worried about counter

1030
01:12:35,680 --> 01:12:39,399
party risk. Right, So like if I lend Ben a

1031
01:12:39,439 --> 01:12:47,000
bunch of money, right, Ben is now my counterparty risk. Right,

1032
01:12:47,079 --> 01:12:50,439
Ben's ability to pay his bills is now risk on

1033
01:12:50,520 --> 01:12:55,279
my balance sheet. So if you see all of these

1034
01:12:55,359 --> 01:13:01,520
nations running to cover counterparty risk and one group of

1035
01:13:01,640 --> 01:13:07,680
nations not running to cover counter party risk, which one

1036
01:13:07,960 --> 01:13:11,800
do you think is the one that's that full well

1037
01:13:11,840 --> 01:13:14,319
knows it's not gonna be able to pay its bills.

1038
01:13:16,399 --> 01:13:19,720
The one that's not buying a bunch of gold, huh,

1039
01:13:20,000 --> 01:13:24,840
because they already know if they're basically the person that

1040
01:13:24,920 --> 01:13:28,520
pissed in the pool, all right, the person who isn't

1041
01:13:28,600 --> 01:13:31,439
like the place that you know, those pools that turn

1042
01:13:31,600 --> 01:13:34,359
like blue or red when somebody peas in them. The

1043
01:13:34,399 --> 01:13:40,960
person standing in the middle of the fucking red is

1044
01:13:40,960 --> 01:13:44,960
the person that peed in the pool. The person not

1045
01:13:45,319 --> 01:13:49,960
running to buy gold is the one that is the

1046
01:13:50,039 --> 01:13:55,079
counterparty risk that the other nations central banks are running

1047
01:13:55,119 --> 01:13:59,760
to cover. So yeah, Europe is a whole different thing.

1048
01:13:59,760 --> 01:14:04,479
If you're a European listener, you can hop on a

1049
01:14:04,520 --> 01:14:09,479
train and go to Switzerland. And this is an investment advice,

1050
01:14:10,600 --> 01:14:13,479
this is banking advice, which I any asshole can give.

1051
01:14:16,399 --> 01:14:21,439
I strongly recommend you hop on a train, and to

1052
01:14:21,479 --> 01:14:26,880
my British friends, I recommend you hop on the train

1053
01:14:26,920 --> 01:14:32,119
that goes under the Channel tunnel and then take another

1054
01:14:32,159 --> 01:14:36,159
train to get to Switzerland. If you don't want to fly,

1055
01:14:37,560 --> 01:14:41,880
and you set up a bank account, and that bank

1056
01:14:41,880 --> 01:14:46,399
account is going to be denominated in Swiss Franks, all right,

1057
01:14:46,479 --> 01:14:51,000
they will hold euros for you. You can have euro deposits,

1058
01:14:53,439 --> 01:14:59,640
or you could deposit euros to the bank and have

1059
01:14:59,680 --> 01:15:06,159
the bank deposit Swiss francs into your Swiss account. Right,

1060
01:15:06,159 --> 01:15:08,479
You're not like hiding from taxes. It can be under

1061
01:15:08,520 --> 01:15:11,199
your name. You're not doing any of that. But your

1062
01:15:11,319 --> 01:15:16,079
money is outside of the European Union's dis you know,

1063
01:15:16,319 --> 01:15:22,279
their outside of their purview.

1064
01:15:23,279 --> 01:15:23,479
Speaker 2: Right.

1065
01:15:23,960 --> 01:15:29,199
Speaker 3: The European Union cannot you know, set monetary policy and

1066
01:15:29,199 --> 01:15:35,880
fiscal policy for Switzerland, nor can the UK. So if

1067
01:15:35,920 --> 01:15:39,840
you are a British citizen with British bank accounts and

1068
01:15:39,880 --> 01:15:43,239
you're a European citizen with European Union bank accounts at

1069
01:15:43,239 --> 01:15:47,039
European banks, you need to get your money out of

1070
01:15:47,119 --> 01:15:50,600
euros and out of pounds as fast as humanly possible

1071
01:15:51,920 --> 01:15:55,399
and into Swiss francs if dollars are not an option

1072
01:15:55,560 --> 01:15:59,479
or crypto is too complicated for you. This is of

1073
01:15:59,520 --> 01:16:05,439
the ut utmost imperative. And I've put my money where

1074
01:16:05,439 --> 01:16:08,039
my mouth is on this because I've borrowed against my

1075
01:16:08,239 --> 01:16:12,680
entire portfolio, all of my like all of my liquid

1076
01:16:12,720 --> 01:16:20,319
net worth, I've leveraged and I've borrowed in euro So

1077
01:16:20,399 --> 01:16:23,960
I've taken the entire value of my portfolio and borrowed

1078
01:16:23,960 --> 01:16:29,079
the same amount of money, right, except for I borrowed

1079
01:16:29,079 --> 01:16:34,600
that money in euros. Why would I do that?

1080
01:16:37,399 --> 01:16:42,399
Speaker 2: Well, because they use can collapse by twenty thirty, That's

1081
01:16:42,439 --> 01:16:45,720
exactly why if not sooner and so not only do

1082
01:16:45,760 --> 01:16:47,760
I get the trade with twice the amount of money

1083
01:16:48,079 --> 01:16:49,760
and have twice the amount of returns.

1084
01:16:50,760 --> 01:16:55,800
Speaker 3: Just nice. I enjoy it. It's good. But at the

1085
01:16:55,880 --> 01:17:00,880
end of the day, there's gonna be no one for

1086
01:17:00,920 --> 01:17:05,119
me to pay that loan back to. And before that

1087
01:17:05,239 --> 01:17:10,159
day happens, when the currency is in free fall, which

1088
01:17:10,159 --> 01:17:18,199
it will be, one dollar will be worth several hundred euros.

1089
01:17:19,600 --> 01:17:21,920
So if I did want to pay them back before

1090
01:17:23,039 --> 01:17:25,720
it all goes hits up, it will probably cost me

1091
01:17:25,760 --> 01:17:30,640
a couple hundred bucks to pay back the amount of euros. Yeah,

1092
01:17:30,800 --> 01:17:34,520
got to keep those tokens. So I am that confident.

1093
01:17:36,560 --> 01:17:38,039
Speaker 1: Just to give you an idea how bad it's going

1094
01:17:38,119 --> 01:17:42,800
to be here, Starmer has announced today that they will

1095
01:17:42,800 --> 01:17:46,399
be closing the borders and going to digital ID.

1096
01:17:47,720 --> 01:17:51,399
Speaker 2: Well, they go ahead, good, yeah, no.

1097
01:17:51,439 --> 01:17:56,159
Speaker 1: This is this is beneficial. It's been getting blasted ever

1098
01:17:56,199 --> 01:18:00,520
since we uh we started. But why would you why

1099
01:18:00,520 --> 01:18:03,399
would you close the borders and go to a digital

1100
01:18:03,399 --> 01:18:07,960
ID especially for your for your diaspar around the world.

1101
01:18:08,760 --> 01:18:13,239
If things are getting better, Well, why would he why

1102
01:18:13,239 --> 01:18:15,239
would he do that specifically?

1103
01:18:15,399 --> 01:18:15,680
Speaker 2: There?

1104
01:18:15,920 --> 01:18:17,680
Speaker 1: I know why we would do I know why we

1105
01:18:17,720 --> 01:18:18,760
would close the borders.

1106
01:18:19,600 --> 01:18:22,039
Speaker 2: Yeah, I mean you look at some of these policies.

1107
01:18:22,079 --> 01:18:24,279
You hear talk about a European Union talks.

1108
01:18:24,960 --> 01:18:26,720
Speaker 3: They rolled it out in October. What are you talking

1109
01:18:26,720 --> 01:18:29,439
about that? Central Bank said that last week. It's not

1110
01:18:29,479 --> 01:18:32,760
in talks anymore. It rolls out in October.

1111
01:18:33,720 --> 01:18:37,720
Speaker 2: No, I understand. I'm just saying all for some of

1112
01:18:37,760 --> 01:18:40,960
these things, as far as actually successfully rolling it out,

1113
01:18:41,000 --> 01:18:43,600
I'll believe it when I see it, Like it's definitely

1114
01:18:43,600 --> 01:18:52,079
an agenda plan. I'm just saying there are certain things where.

1115
01:18:50,159 --> 01:18:52,439
Speaker 3: You're saying what you're saying, are you able to roll

1116
01:18:52,479 --> 01:18:55,399
it out? As in like will the rollout be such

1117
01:18:55,439 --> 01:18:58,880
a ship show that it'll be really embarrassing and all?

1118
01:18:58,920 --> 01:19:01,119
Fuck up? Yes?

1119
01:19:02,880 --> 01:19:05,199
Speaker 2: Are they so incompetent that's possible?

1120
01:19:06,560 --> 01:19:11,760
Speaker 3: So how scared are they about what's going to happen

1121
01:19:11,800 --> 01:19:15,439
to the existing euro and the existing financial system for

1122
01:19:15,520 --> 01:19:23,920
them to take that risk, right, Because it's not like a.

1123
01:19:22,159 --> 01:19:27,039
Speaker 2: Well scared enough to be threatening more Corussia right, you

1124
01:19:27,079 --> 01:19:27,600
see something.

1125
01:19:27,600 --> 01:19:30,359
Speaker 3: Whether the rollout becomes an absolute ship show doesn't matter.

1126
01:19:30,399 --> 01:19:35,279
If the regular euros and free fall does it, then

1127
01:19:35,319 --> 01:19:41,800
the ship show rollout will still be better. Exactly. So

1128
01:19:42,119 --> 01:19:45,600
if you notice, the person that's been flogging digital ID

1129
01:19:46,279 --> 01:19:50,239
is mister Tony Blair and the Tony Blair Institute. First

1130
01:19:50,239 --> 01:19:56,960
the digital ID was how they tackle COVID. We need

1131
01:19:57,000 --> 01:20:04,319
digital i D because we need vaccine passports. Well, then

1132
01:20:04,359 --> 01:20:08,520
COVID went away, and then you heard Tony Blair switch

1133
01:20:08,600 --> 01:20:15,039
to immigration. Right, we can stop illegal immigration with digital ID.

1134
01:20:16,079 --> 01:20:19,840
So if you notice, it doesn't really matter what the

1135
01:20:19,920 --> 01:20:22,479
problem is that he says he's trying to solve. What

1136
01:20:22,600 --> 01:20:27,960
seems to really matter is getting the government to adopt

1137
01:20:28,039 --> 01:20:33,399
digital ID, right, because it's apparently a magic solution to

1138
01:20:33,520 --> 01:20:37,439
every problem, which means it's a solution to no problems

1139
01:20:38,399 --> 01:20:40,640
that they're telling you about, but as a solution to

1140
01:20:40,680 --> 01:20:44,840
something else that they're scared to tell you about, because

1141
01:20:44,880 --> 01:20:46,960
if they weren't scared to tell you about it, they

1142
01:20:46,960 --> 01:20:49,560
would tell you what this solution, what the problem is

1143
01:20:49,560 --> 01:20:53,640
that this is actually a solution for, rather than changing

1144
01:20:53,680 --> 01:21:00,279
the problem every ten minutes. So who funds the Tony

1145
01:21:00,319 --> 01:21:12,479
Blair Institute. Ah, the usual subspecial suspects. Yes, that is correct. Anyways,

1146
01:21:12,640 --> 01:21:17,279
So you need why do you need central bank digital currency?

1147
01:21:17,439 --> 01:21:19,359
And why do you need digital I D. Why do

1148
01:21:19,439 --> 01:21:27,680
these things matter? Because currency controls are coming. Central bank

1149
01:21:27,760 --> 01:21:30,560
digital currency does a lot of things that allows them

1150
01:21:30,880 --> 01:21:38,119
to literally spin up money instantaneously, right. But this would

1151
01:21:38,159 --> 01:21:41,800
be a huge problem because the exchange rates of these

1152
01:21:41,840 --> 01:21:46,840
currencies would collapse. China figured out a way around that,

1153
01:21:48,239 --> 01:21:50,840
and they have Pete. I think you and I have

1154
01:21:50,880 --> 01:21:54,880
talked about this before, I think privately. For that they

1155
01:21:54,880 --> 01:22:00,479
have the onshore one and the offshore one. They have

1156
01:22:00,520 --> 01:22:03,680
a separate currency for people that are inside the country,

1157
01:22:04,760 --> 01:22:06,920
and it's illegal for you to have that other type

1158
01:22:06,920 --> 01:22:10,079
of currency that they use to transact with nations because

1159
01:22:10,119 --> 01:22:13,000
when you transact with another nation, you can't give them

1160
01:22:13,199 --> 01:22:16,760
you know, chuck e cheese tokens. They need, you know,

1161
01:22:16,920 --> 01:22:22,840
real currency. The digital ID is for the people, not

1162
01:22:22,920 --> 01:22:26,439
the institutions. Is is Barclay's going to get a digital ID?

1163
01:22:27,079 --> 01:22:31,359
No they're not, No, because they're an institution. Yeah, that's

1164
01:22:31,399 --> 01:22:36,319
just that's The digital idea is for you, the person.

1165
01:22:37,560 --> 01:22:43,000
The CBDC is for you the person, and that means

1166
01:22:43,039 --> 01:22:46,880
capital controls. So unless you get your money out of

1167
01:22:46,920 --> 01:22:53,600
these economic zones before this becomes policy and put into place,

1168
01:22:54,479 --> 01:22:58,079
you will never get it out. And that means you

1169
01:22:58,079 --> 01:23:00,720
get to ride the fun all the way down to

1170
01:23:00,800 --> 01:23:04,479
the bottom. Take a look at Chile. I think it

1171
01:23:04,520 --> 01:23:10,960
was Zimbabwe, you know, find our Germany, take your pick. So, yeah,

1172
01:23:11,079 --> 01:23:12,760
go to fucking Switzerland.

1173
01:23:13,399 --> 01:23:15,479
Speaker 2: Like there's a reason. There's a reason gold's coming to

1174
01:23:15,560 --> 01:23:18,760
the US. Right, that's not a fluke? And in size?

1175
01:23:19,279 --> 01:23:20,199
Speaker 3: How much size?

1176
01:23:20,520 --> 01:23:27,279
Speaker 2: Right? I'd have to go. Look, but like I was

1177
01:23:27,279 --> 01:23:30,039
saying earlier, enough to distorts.

1178
01:23:30,880 --> 01:23:34,800
Speaker 3: Basically of England has had to It's gold has been

1179
01:23:35,000 --> 01:23:38,279
its gold holdings have been exhausted, and right now it

1180
01:23:38,399 --> 01:23:43,159
is borrowing gold from other gold banks. Because there are

1181
01:23:43,159 --> 01:23:47,800
banks that only deal in gold in the UK, it

1182
01:23:47,840 --> 01:23:54,000
has to borrow from them. So if the central bank

1183
01:23:54,039 --> 01:23:57,079
of your country is out of gold and has to

1184
01:23:57,119 --> 01:24:03,680
borrow it, how is that possible? Does that mean that

1185
01:24:03,720 --> 01:24:06,520
the central bank has promised more gold than a passion?

1186
01:24:07,479 --> 01:24:09,720
Speaker 2: Yeah, isn't like one hundred to one or something. I've

1187
01:24:09,760 --> 01:24:11,159
heard rumors aboute hundred and one and.

1188
01:24:11,079 --> 01:24:13,439
Speaker 3: That's an open secret. So you imagine I mean that

1189
01:24:13,520 --> 01:24:18,560
lets you know that it's actually way worse. So anyways, yes,

1190
01:24:19,920 --> 01:24:27,680
like the scenario because again, like they use those paper

1191
01:24:27,760 --> 01:24:32,960
gold coupons the same way as you know the US

1192
01:24:33,319 --> 01:24:36,840
has used derivatives. Right, So the whole purpose of both

1193
01:24:36,880 --> 01:24:40,439
of these things is to lever up futures contracts to

1194
01:24:40,479 --> 01:24:43,520
suppress the price of commodities so you can buy them

1195
01:24:43,600 --> 01:24:46,399
cheaper than they're actually worth. So the same reason the

1196
01:24:46,399 --> 01:24:50,560
gold is leaving Ben is also the same reason why

1197
01:24:50,680 --> 01:24:58,319
your commodity supercycle is coming one and the same. All right,

1198
01:24:58,399 --> 01:25:00,359
So what not to invest in? Let's talk about that

1199
01:25:00,359 --> 01:25:02,560
for a little bit. What would you not invest in

1200
01:25:02,600 --> 01:25:04,880
ben that everyone else is investing in?

1201
01:25:07,760 --> 01:25:10,279
Speaker 2: I mean I kind of mentioned private equity, private credit?

1202
01:25:10,399 --> 01:25:13,960
Speaker 3: How would somebody How would somebody deal with that? As in,

1203
01:25:14,119 --> 01:25:16,720
like they're only looking at stocks things like that, They're

1204
01:25:16,760 --> 01:25:19,159
probably going to read and check up other places because

1205
01:25:19,159 --> 01:25:22,319
they're definitely not going to fucking make investment decisions on

1206
01:25:22,359 --> 01:25:25,960
what we say, So they're probably going to do a

1207
01:25:25,960 --> 01:25:27,720
lot of research afterwards. So how are they going to

1208
01:25:27,800 --> 01:25:30,199
know like what tickers and stuff, private credit and private

1209
01:25:31,800 --> 01:25:33,319
or P and PC is.

1210
01:25:34,600 --> 01:25:39,840
Speaker 2: Yeah, that's going to be your big name firms at

1211
01:25:39,920 --> 01:25:43,840
least on Wall Street from I think it's Apollo Aries.

1212
01:25:45,319 --> 01:25:49,720
KKR is one. I don't know the tickers exactly the

1213
01:25:49,760 --> 01:25:51,039
top of my head, but I'm just listening off the

1214
01:25:51,039 --> 01:25:56,760
biggest ones I can think of. But I think Blackrock

1215
01:25:56,960 --> 01:26:01,640
and is more asset management than private equity. Blackstone's another one.

1216
01:26:03,520 --> 01:26:06,600
As far as private credit, I think they're basically rolled

1217
01:26:06,680 --> 01:26:10,239
up into a lot of the same companies as far

1218
01:26:10,279 --> 01:26:13,640
as I know, Like all the big guys have private

1219
01:26:13,640 --> 01:26:16,079
equity and private credit and a whole bunch of other crap,

1220
01:26:16,159 --> 01:26:22,199
but those are like the public tickers. I think there's

1221
01:26:23,239 --> 01:26:25,960
like there's basically going to be problems with that whole

1222
01:26:28,840 --> 01:26:31,760
business model an idea with rates being where they are,

1223
01:26:31,800 --> 01:26:36,359
and it basically with the way things have seemingly frozen up.

1224
01:26:37,680 --> 01:26:41,640
Like the whole thing is they can't even send distributions

1225
01:26:41,640 --> 01:26:45,640
out to investors without basically telling them, hey, you have

1226
01:26:45,680 --> 01:26:47,960
to re up and invest in the next fund. Like

1227
01:26:48,000 --> 01:26:50,159
that's why I've heard is going on. It's like basically

1228
01:26:50,760 --> 01:26:54,560
you're either locked in or like you get extended, is

1229
01:26:54,680 --> 01:26:55,520
what I've been here.

1230
01:26:55,520 --> 01:26:58,079
Speaker 3: You know, Yeah, they're trying to extend and pretend is

1231
01:26:58,600 --> 01:27:06,159
the terminology which tells you something else is happening now,

1232
01:27:06,239 --> 01:27:08,039
let's talk Yeah, nothing good?

1233
01:27:08,720 --> 01:27:09,439
Speaker 2: Nothing good though?

1234
01:27:09,640 --> 01:27:16,640
Speaker 3: What about tech? What about the mag seven? What about nvideo?

1235
01:27:18,359 --> 01:27:23,359
Speaker 2: Oh? Fuck no, if you look at some of these industries,

1236
01:27:23,840 --> 01:27:26,439
I'll give a free book recommendation out for anyone that

1237
01:27:26,520 --> 01:27:30,279
wants to understand markets and the way these cycles typically

1238
01:27:30,600 --> 01:27:35,039
tend to work. It's called capital returns by Edward Chanceller,

1239
01:27:35,039 --> 01:27:37,920
I believe is his name. But if you look at

1240
01:27:38,119 --> 01:27:41,960
what happens when like all this money crowds into one

1241
01:27:42,000 --> 01:27:46,560
area of the market, whether it's big tech and our example, right,

1242
01:27:47,000 --> 01:27:50,000
it literally drives the returns down moving forward, and it

1243
01:27:50,079 --> 01:27:53,560
starves capital out of places where like that's where your

1244
01:27:53,560 --> 01:27:56,640
money should be going. And like that's what I'm talking

1245
01:27:56,680 --> 01:27:59,960
about with commodities and these other things. But when everyone

1246
01:28:00,079 --> 01:28:03,520
crowded into big tech, like by definition, right, even just

1247
01:28:03,520 --> 01:28:07,880
from a market dynamic perspective, there's fear and fewer buyers

1248
01:28:07,920 --> 01:28:13,800
at these higher prices. And you go look at like Nvidia, Microsoft, Apple,

1249
01:28:14,880 --> 01:28:20,399
like their valuations on basically any way you slice it,

1250
01:28:20,399 --> 01:28:22,880
it's really hard to see a way they go up

1251
01:28:23,399 --> 01:28:27,640
other than narratives and flows and passive distortions, which we've

1252
01:28:27,640 --> 01:28:30,880
been right talking about for a bit, right, So I'm

1253
01:28:30,880 --> 01:28:34,920
not saying, like, go out and sell all your positions

1254
01:28:34,960 --> 01:28:38,159
if you have any tech companies. But what I will

1255
01:28:38,199 --> 01:28:42,359
say is it's really hard to build a bowl case

1256
01:28:42,600 --> 01:28:45,079
save for Apple at let me pull it up. I

1257
01:28:45,079 --> 01:28:49,039
haven't even looked in long ass time. Apple's close to

1258
01:28:49,079 --> 01:28:52,600
thirty times earnings and it's close to a three trillion

1259
01:28:52,640 --> 01:28:55,520
market cap. Is it going to ten trillion? Are they

1260
01:28:55,600 --> 01:28:57,680
going to buy back twenty percent of stock over the

1261
01:28:57,760 --> 01:29:01,880
next five years? Right? Like what are you pricing in

1262
01:29:01,960 --> 01:29:04,840
really at some of these valuations, Like it could go

1263
01:29:04,880 --> 01:29:06,359
out for the next three months or six months or

1264
01:29:06,359 --> 01:29:08,760
twelve months, right, if the money keeps coming in and

1265
01:29:08,800 --> 01:29:10,920
you've got all these retirement plans that every two weeks

1266
01:29:10,960 --> 01:29:13,800
pile into the SMP and all these different things that

1267
01:29:14,159 --> 01:29:19,199
it's the cycle that reinforces itself and makes markets less

1268
01:29:19,239 --> 01:29:23,640
efficient really if you think about it. But like on

1269
01:29:23,680 --> 01:29:27,359
an actual business return perspective, right, Apple thirty times Arnie

1270
01:29:27,439 --> 01:29:30,720
is not a great idea Microsoft wherever it's at, Like,

1271
01:29:30,880 --> 01:29:33,560
it's the same basically across the board. I know some

1272
01:29:33,600 --> 01:29:38,560
people like Google because the evaluations relatively cheap, but I mean,

1273
01:29:39,079 --> 01:29:42,720
just know you're investing basically in the NSA CIA. Let

1274
01:29:42,760 --> 01:29:48,439
me pick your government agency alphabet soup agency at that point.

1275
01:29:48,479 --> 01:29:52,479
But I think as far as big tech and avoiding

1276
01:29:52,600 --> 01:29:56,680
that specifically, you're going to want to be looking in

1277
01:29:56,720 --> 01:30:01,199
other places where like maybe there are some technology companies

1278
01:30:01,199 --> 01:30:03,920
that are small caps and undercovered and you find something

1279
01:30:03,960 --> 01:30:06,279
where like, hey, this is a real business and it's

1280
01:30:06,319 --> 01:30:10,079
trading at like twelve or thirteen times earnings whatever it is,

1281
01:30:10,079 --> 01:30:13,359
but it's growing like top and bottom line, like revenue

1282
01:30:13,359 --> 01:30:15,800
and earnings like twenty five percent a year. Like there

1283
01:30:15,800 --> 01:30:18,560
are going to be real businesses in the technology sector.

1284
01:30:19,159 --> 01:30:22,439
But just crowding in with the herd into big tech

1285
01:30:22,960 --> 01:30:25,760
I think is a sucker's bet.

1286
01:30:27,840 --> 01:30:31,560
Speaker 1: So what are the sectors that I guess this is

1287
01:30:31,600 --> 01:30:34,800
where you have to be careful because you can start

1288
01:30:34,800 --> 01:30:40,079
making recommendations that people start jumping on. So going forward

1289
01:30:40,560 --> 01:30:44,640
and everything we're seeing with the with the Trump era

1290
01:30:45,279 --> 01:30:48,920
and everything that's happening, what are the sectors that you

1291
01:30:48,920 --> 01:30:53,159
know you think you both think we'll be making money

1292
01:30:53,199 --> 01:30:55,000
in the in the near future.

1293
01:30:56,960 --> 01:31:00,479
Speaker 2: As far as public markets, I think the best place

1294
01:31:00,520 --> 01:31:04,279
to look are going to be broadly commodities. Gold. I

1295
01:31:04,279 --> 01:31:07,840
think we talked about this a little bit, but there's

1296
01:31:08,079 --> 01:31:09,760
a lot of reason to believe that it's going to

1297
01:31:10,159 --> 01:31:13,239
four thousand and five thousand right over time, it's going higher,

1298
01:31:13,279 --> 01:31:16,760
as my opinion, and I think that's probably a pretty

1299
01:31:16,800 --> 01:31:20,640
durable trend there's been, right, we kind of talked about

1300
01:31:20,640 --> 01:31:23,000
the problem with is the run up it's had over

1301
01:31:23,239 --> 01:31:26,119
the last and really year and a half, but especially

1302
01:31:26,119 --> 01:31:28,680
at the start of this year. So it's in favor.

1303
01:31:28,760 --> 01:31:31,359
All the commodity guys are talking about it like they

1304
01:31:31,399 --> 01:31:34,159
love the gold mining stocks. They're talking about like, look

1305
01:31:34,199 --> 01:31:37,239
it out cheap. These things are, like I think you

1306
01:31:37,319 --> 01:31:41,680
probably get a chance. I'm not making specific recommendations, but

1307
01:31:42,079 --> 01:31:45,079
if you go look up the gold miners ETF which

1308
01:31:45,119 --> 01:31:48,560
is GDX, right, just the full basket of everything, the good,

1309
01:31:48,600 --> 01:31:52,640
the bad, the ugly, like the whole nine. Right. If

1310
01:31:52,680 --> 01:31:56,399
you go look up like that basket, what you're really

1311
01:31:56,439 --> 01:32:01,760
doing is you're basically making a long gold and short

1312
01:32:02,000 --> 01:32:05,760
energy short oil trade with some of these businesses because

1313
01:32:05,920 --> 01:32:10,359
of how big of an expense the energy input costs

1314
01:32:10,399 --> 01:32:14,479
are for all these businesses. So if gold's ripping like

1315
01:32:14,600 --> 01:32:17,560
and oil's flat like it is now, these things print money.

1316
01:32:17,920 --> 01:32:22,560
If oil's ripping and gold's flat. Like, that's bad news

1317
01:32:22,560 --> 01:32:25,920
for those businesses. If they're both going up. Gold's going faster. Right,

1318
01:32:25,960 --> 01:32:29,760
there's all these different inputs you can toggle, but if

1319
01:32:30,680 --> 01:32:33,279
you kind of like, I don't really find gold miner's

1320
01:32:33,319 --> 01:32:35,880
all that attractive either, because for the most part, they're

1321
01:32:35,880 --> 01:32:38,760
really crappy businesses, Like you really have to hit a

1322
01:32:39,079 --> 01:32:43,920
top tier mine and find one of those deposits or

1323
01:32:43,960 --> 01:32:46,479
one of those things that separates it to make the

1324
01:32:46,520 --> 01:32:49,960
miners really attractive. And that's most commodity businesses in the

1325
01:32:49,960 --> 01:32:53,720
first place. There's a lot of pitfalls in the commodity

1326
01:32:53,720 --> 01:32:58,119
sector in general with some of these businesses. But I

1327
01:32:58,119 --> 01:33:00,439
think there are a couple of mining sectors that are

1328
01:33:00,479 --> 01:33:02,800
pretty interesting. And it goes back a little bit to

1329
01:33:02,920 --> 01:33:07,199
energy but also to steal and we kind of talked

1330
01:33:07,199 --> 01:33:11,000
about the reindustrialization of the country and some of the

1331
01:33:11,000 --> 01:33:14,520
things that are going to be happening, where a lot

1332
01:33:14,520 --> 01:33:17,279
of people don't know this, but like seventy percent of

1333
01:33:17,279 --> 01:33:21,079
the world steel production relies on coal, and it's not

1334
01:33:21,199 --> 01:33:23,399
going to come from electric arc ferences, is going to

1335
01:33:23,439 --> 01:33:27,000
come from what's called metallurgical coal. And there are companies

1336
01:33:27,039 --> 01:33:29,640
out there that produce this stuff even here in the US,

1337
01:33:30,359 --> 01:33:33,199
and they're pretty cheap. A lot of them have very

1338
01:33:33,199 --> 01:33:35,439
good balance sheets, Like there are a couple that can

1339
01:33:35,520 --> 01:33:39,680
think of where I think one of them is basically

1340
01:33:40,079 --> 01:33:45,680
like pull it up just to make sure that yeah,

1341
01:33:45,720 --> 01:33:47,760
they effectively have no doubt. Right, So the stuff that

1342
01:33:47,760 --> 01:33:51,920
Stormy is talking about where like some of these companies

1343
01:33:51,960 --> 01:33:53,640
are going to be fine. And what's happening right now

1344
01:33:53,720 --> 01:33:56,840
in the whole coal sector is like twenty four and

1345
01:33:56,840 --> 01:33:59,199
twenty five has been rough, and so all these stocks

1346
01:33:59,199 --> 01:34:01,680
have been getting cheaper and cheaper and cheaper and just

1347
01:34:01,960 --> 01:34:05,479
taken out to the woodshed over the last year, but

1348
01:34:05,600 --> 01:34:10,600
really last couple of years, and so the last year

1349
01:34:10,600 --> 01:34:13,439
and a half, give or take. But when you look

1350
01:34:13,439 --> 01:34:16,560
at some of these things, when coal prices start moving,

1351
01:34:16,720 --> 01:34:19,560
especially if you think steel cycle and all these other

1352
01:34:19,560 --> 01:34:23,079
commodities are going to move to right, coal is a

1353
01:34:23,199 --> 01:34:25,520
very interesting way to play it, especially with some of

1354
01:34:25,560 --> 01:34:29,760
these the way some of these companies are valued. If

1355
01:34:29,760 --> 01:34:31,239
you want, you can just go look up what some

1356
01:34:31,239 --> 01:34:33,520
of these coal stocks did from twenty twenty to like

1357
01:34:34,319 --> 01:34:37,720
twenty twenty four. Like some of the numbers they put

1358
01:34:37,760 --> 01:34:40,800
up is like thousands of percent, So not a recommendation,

1359
01:34:40,880 --> 01:34:43,159
but like they got that hated and that cheap where

1360
01:34:43,159 --> 01:34:46,079
everyone thought they're going bankrupt. It was all over Sky's falling,

1361
01:34:46,760 --> 01:34:50,760
and then sure enough it wasn't. It's capital cycle. They're

1362
01:34:50,760 --> 01:34:53,680
all starved a capital commidity. Prices have to go up

1363
01:34:53,840 --> 01:34:56,520
and then they print money for however long it might be.

1364
01:34:57,960 --> 01:35:01,279
And so I think we're at or nearing the trough

1365
01:35:01,479 --> 01:35:05,199
in thermal coal, which is for electricity and metallurgical coal.

1366
01:35:06,119 --> 01:35:08,279
I think there are definitely companies in that area that

1367
01:35:08,319 --> 01:35:12,359
are worth a look. They're you're basical gonna end up

1368
01:35:12,359 --> 01:35:16,600
looking at Australian companies or US companies for the most part,

1369
01:35:16,680 --> 01:35:18,800
like you're not going to find I think there's like

1370
01:35:19,039 --> 01:35:22,600
a couple companies in Mongolia and other places, maybe in

1371
01:35:22,800 --> 01:35:26,720
h South America. But point is like for most of

1372
01:35:26,720 --> 01:35:28,920
the big names that like you'll find first, they're going

1373
01:35:28,960 --> 01:35:32,399
to be in the US and Australia, And depending on

1374
01:35:32,439 --> 01:35:34,960
where you look at Australia, you're gonna get posed on

1375
01:35:35,359 --> 01:35:38,159
their royalty regime. So I would just be aware that,

1376
01:35:38,199 --> 01:35:41,159
like there's other factors too. It's not just like go

1377
01:35:41,279 --> 01:35:44,880
buy coal stocks because like coals cheap, right there's different

1378
01:35:44,960 --> 01:35:47,520
nuances for each of them. But I think that's pretty

1379
01:35:47,520 --> 01:35:51,479
interesting and pretty hated, pretty out of favor, and all

1380
01:35:51,520 --> 01:35:54,159
the commodity guys like they're all busy talking about other things.

1381
01:35:55,359 --> 01:35:58,640
The one that I find interesting right now specifically is

1382
01:35:58,680 --> 01:36:02,439
in energy, but the whole energy sector in general, I

1383
01:36:02,439 --> 01:36:05,520
think is like we were talking about oil and talking

1384
01:36:05,520 --> 01:36:09,039
about what goes on with features and the number of

1385
01:36:09,039 --> 01:36:11,079
paper contracts that are floating around and up there if

1386
01:36:11,119 --> 01:36:14,319
I remember right I was reading a book or listening

1387
01:36:14,319 --> 01:36:21,119
to podcasts, that the paper contracts traded is depending on

1388
01:36:21,159 --> 01:36:22,920
the time, I think it's thirty to fifty times the

1389
01:36:23,000 --> 01:36:27,079
volume of what actually like the physical market trades, right,

1390
01:36:27,119 --> 01:36:32,920
So there's a whole bunch of extra basically people that

1391
01:36:32,960 --> 01:36:37,359
are short paper barrels versus like actual producers that are

1392
01:36:37,399 --> 01:36:41,239
hedging or whatever it may be. So I think when

1393
01:36:41,560 --> 01:36:45,720
you have what's going on in oil getting manipulated down

1394
01:36:45,720 --> 01:36:51,079
through narrative and paper markets whatnot and conveniently timed OPEC

1395
01:36:51,159 --> 01:36:54,680
announcements that where it's like Trump like definitely made a

1396
01:36:54,720 --> 01:36:59,560
deal with the Saudi's where on the tariff like April

1397
01:36:59,600 --> 01:37:02,640
second tariff day or whatever, it was like, oh, here's

1398
01:37:02,640 --> 01:37:06,680
our here's our list of tariffs and percentages on all

1399
01:37:06,680 --> 01:37:10,239
these different countries. And then same day OPEC was like, yep,

1400
01:37:10,239 --> 01:37:13,640
we're increasing supply faster and expected. So oil pukes like

1401
01:37:13,680 --> 01:37:17,800
fifteen bucks in like two weeks, like mission accomplished for

1402
01:37:18,640 --> 01:37:21,600
Trump admin. Which I think is actually a serious policy mistake,

1403
01:37:21,640 --> 01:37:25,239
but I'm not gonna get derailed on that. But as

1404
01:37:25,239 --> 01:37:27,640
soon as oil goes down sub sixty, what you basically

1405
01:37:27,680 --> 01:37:30,479
do to the energy sector here in the US is

1406
01:37:31,319 --> 01:37:34,359
you're going to see capex cuts in the Permian basin

1407
01:37:34,399 --> 01:37:38,039
in Texas because it's high cost, high decline rate. You're

1408
01:37:38,039 --> 01:37:41,000
not going to drill your best wells at sixty dollars

1409
01:37:41,039 --> 01:37:45,039
a barrel. And there's some talk that's a geological decline

1410
01:37:45,079 --> 01:37:49,720
where it's like Permian and US supply has peaked, it's

1411
01:37:49,800 --> 01:37:52,199
rolling over. The US is never going to produce as

1412
01:37:52,279 --> 01:37:56,159
much oil again as like thirteen point four million barrels

1413
01:37:56,159 --> 01:38:00,000
a day, which if you look at other shale basins,

1414
01:38:00,039 --> 01:38:02,880
whether it's North Dakota or other places in the US,

1415
01:38:02,920 --> 01:38:07,239
like they've already peaked, Like there's no no doubt if

1416
01:38:07,279 --> 01:38:10,600
you look at those production charts. So if the Permian's peaking,

1417
01:38:10,640 --> 01:38:12,720
and that's like six million barrels a day of production.

1418
01:38:13,439 --> 01:38:17,800
That is a very big problem for oil supply because

1419
01:38:17,800 --> 01:38:22,640
that's been effectively the entire world's growth for oil production

1420
01:38:22,680 --> 01:38:25,840
over the last fifteen years. So the problem is like,

1421
01:38:25,880 --> 01:38:28,399
they don't make any money at sixty, they really don't

1422
01:38:28,439 --> 01:38:31,439
make a whole lot at seventy, and they might be

1423
01:38:31,439 --> 01:38:34,039
able to raise production at eighty eighty five ninety, But

1424
01:38:35,640 --> 01:38:38,239
how much I have no idea, So I don't think

1425
01:38:38,239 --> 01:38:40,479
it's that much. I think there's maybe something to be

1426
01:38:40,479 --> 01:38:43,720
said for the geological argument that all the best stuff

1427
01:38:43,800 --> 01:38:46,880
is gone when you see I'll just I'll give you

1428
01:38:46,920 --> 01:38:49,439
an anecdote so you get an idea of what's going

1429
01:38:49,479 --> 01:38:55,239
on the Permian. When Pioneer Resources sold to Exxon in

1430
01:38:56,600 --> 01:38:59,560
twenty twenty three, I believe I remember reading a tweet,

1431
01:39:00,239 --> 01:39:03,119
and this was from like two thousand and eight, where

1432
01:39:03,399 --> 01:39:05,760
a couple guys like field hands, like guys working in

1433
01:39:05,800 --> 01:39:08,560
the oil sector, and they knew Sheffield, who's the CEO

1434
01:39:08,560 --> 01:39:13,680
of Pioneer. They basically said, okay, Permian and the shales

1435
01:39:13,680 --> 01:39:18,199
peaking within two years of that CEO selling, because Pioneer

1436
01:39:18,239 --> 01:39:20,199
was all Permian production, and so he sells in twenty

1437
01:39:20,199 --> 01:39:23,439
twenty three. It's twenty twenty five now, and he was

1438
01:39:23,479 --> 01:39:27,680
on CNBC recently talking about, Okay, we're going to be

1439
01:39:27,720 --> 01:39:30,399
out of tier one production or tier one acreage in

1440
01:39:30,640 --> 01:39:33,079
twenty eight and out of tier two by twenty thirty

1441
01:39:33,079 --> 01:39:36,920
two in the Permian. So I think there's somebody said,

1442
01:39:36,960 --> 01:39:41,000
for like, the Permian is not going to be the

1443
01:39:41,039 --> 01:39:43,359
best place to be if you're looking for energy companies

1444
01:39:44,119 --> 01:39:47,720
unless you are very excited about natural gas because those

1445
01:39:47,960 --> 01:39:52,880
those wells are getting gasser over time and some of

1446
01:39:52,920 --> 01:39:57,159
these different things that are basically have an impact. So

1447
01:39:57,199 --> 01:40:01,520
that's I think maybe U so somewhere to be cautious.

1448
01:40:01,560 --> 01:40:02,840
I would say, I don't know if you have any

1449
01:40:03,359 --> 01:40:05,199
thoughts on that specifically, Stormy.

1450
01:40:06,640 --> 01:40:10,159
Speaker 3: Not really on on energy, but I'm gonna have to

1451
01:40:10,279 --> 01:40:17,199
bow out because I I've well, I've kind of overshot

1452
01:40:17,239 --> 01:40:21,520
actually my hard stop by a little bit.

1453
01:40:21,680 --> 01:40:26,159
Speaker 1: But yeah, no worries, Oh yeah, I know you have

1454
01:40:26,199 --> 01:40:29,119
another you have another commitment, so.

1455
01:40:29,079 --> 01:40:32,079
Speaker 3: I have to bounce. But lastly, if I have to

1456
01:40:32,359 --> 01:40:36,560
leave anybody with anything, I would say get out. I

1457
01:40:36,920 --> 01:40:42,279
would put very little in the mag seven as little

1458
01:40:42,279 --> 01:40:49,159
as possible. I mean, I've been short the mag particularly

1459
01:40:49,199 --> 01:40:55,399
in video, and really the whole AI thing. I think AI,

1460
01:40:56,039 --> 01:41:02,000
the AI hype is bullshit. And not that it's bullshit.

1461
01:41:02,079 --> 01:41:04,880
AI you know, exists whatever, but as far as it

1462
01:41:05,000 --> 01:41:10,720
creating economic value, it doesn't seem to be materializing to

1463
01:41:10,800 --> 01:41:15,920
any of the companies making trillions of dollars in fucking Capex, sorry,

1464
01:41:15,920 --> 01:41:20,520
investing trillions of dollars in data centers for AI hard

1465
01:41:20,680 --> 01:41:26,239
or for you know, Nvidia GPUs to be everywhere. Yeah,

1466
01:41:26,319 --> 01:41:28,600
but if anybody that knows about AI is all the

1467
01:41:28,760 --> 01:41:31,960
iteration of AI gets smaller and lighter and smaller and

1468
01:41:32,039 --> 01:41:35,359
lighter and smaller and lighter. The different big difference between

1469
01:41:35,399 --> 01:41:40,640
chat GPT and what you might call it the deep

1470
01:41:40,680 --> 01:41:44,279
seek is that deep seek required I think, less than

1471
01:41:44,359 --> 01:41:48,560
half of the amount of GPU usage. All right, So

1472
01:41:48,600 --> 01:41:54,039
if AI is getting smaller and smaller, then about the

1473
01:41:54,079 --> 01:41:57,479
worst thing you could do as a company is invest

1474
01:41:57,760 --> 01:42:02,880
hundreds of billions of dollars in data centers full of

1475
01:42:02,920 --> 01:42:08,399
GPUs for your AI future, because any AI future would

1476
01:42:08,479 --> 01:42:16,439
involve way less, right, So the AI of the future

1477
01:42:16,520 --> 01:42:20,479
future will be small enough to run on your phone locally.

1478
01:42:22,159 --> 01:42:23,840
Speaker 2: Have you, I know, you have to go, but I'll

1479
01:42:23,840 --> 01:42:25,399
ask you a quick question. Have you heard of the

1480
01:42:26,479 --> 01:42:29,479
it's not floating point multiple I can't remember what it

1481
01:42:29,520 --> 01:42:31,079
is called off to look it up maybe after and

1482
01:42:31,159 --> 01:42:33,439
send it to you. But basically, there are chips out

1483
01:42:33,439 --> 01:42:36,520
there that can run these algorithms, and they're like ninety

1484
01:42:36,520 --> 01:42:39,359
five percent more efficient as far as energy and none

1485
01:42:39,399 --> 01:42:40,279
of the well.

1486
01:42:40,439 --> 01:42:42,800
Speaker 3: That may or may not be possible. I have I

1487
01:42:42,840 --> 01:42:48,239
have some investments in chip cooling in particular, but I

1488
01:42:48,279 --> 01:42:52,000
haven't heard of that particular company. Now, generally, when I

1489
01:42:52,039 --> 01:42:55,960
hear figures that like that, I become a little skeptical,

1490
01:42:56,079 --> 01:42:59,920
and I would have to I would then go, like

1491
01:43:01,119 --> 01:43:03,840
tap people in my network that you know, know about

1492
01:43:03,880 --> 01:43:07,760
chip manufacturing things like that. So when I hear claims

1493
01:43:07,760 --> 01:43:11,079
like that, I talk to people. I don't when you

1494
01:43:11,079 --> 01:43:17,079
hear stuff like that, if you sector exactly like, I

1495
01:43:17,079 --> 01:43:19,600
won't reading after When I see something like that that

1496
01:43:19,640 --> 01:43:25,000
looks exciting and looks a little too good to be true,

1497
01:43:25,000 --> 01:43:28,239
but you know, very very good if true, that's when

1498
01:43:28,279 --> 01:43:33,319
I stop reading and I start asking, Yeah, I think.

1499
01:43:33,239 --> 01:43:37,920
Speaker 2: They're called elmol is versus floating point multiplication. It's like

1500
01:43:37,960 --> 01:43:38,359
a difference.

1501
01:43:38,399 --> 01:43:40,720
Speaker 3: So what I would structures I would invest like I

1502
01:43:40,760 --> 01:43:46,199
would if I could give people an idea what to do,

1503
01:43:46,279 --> 01:43:54,920
just broadly, I would probably have no more than twenty percent,

1504
01:43:55,079 --> 01:43:58,680
preferably like ten percent of your money in gold and

1505
01:43:58,760 --> 01:44:03,119
an equal amount in bitcoin. It just bitcoin, no fucking

1506
01:44:03,159 --> 01:44:05,840
all coins or other dumb stuff.

1507
01:44:08,119 --> 01:44:09,279
Speaker 2: Now I don't like.

1508
01:44:09,880 --> 01:44:15,079
Speaker 3: So that's twenty percent of your money or thirty depending

1509
01:44:15,119 --> 01:44:22,520
on how much you take my advice or Yeah. Anyways,

1510
01:44:22,880 --> 01:44:26,079
So then we're going to take forty percent of your

1511
01:44:26,079 --> 01:44:28,960
money and we're going to keep it on the side

1512
01:44:28,960 --> 01:44:33,039
in cash. I'll explain why you want to do that

1513
01:44:33,119 --> 01:44:38,279
in second. Right. So if I got forty percent and

1514
01:44:38,319 --> 01:44:48,760
thirty percent, that means I should only be investing in stocks, bonds, whatever, right,

1515
01:44:48,840 --> 01:44:57,760
liquid tradable securities. No more than thirty maximum forty percent, right,

1516
01:44:57,800 --> 01:45:01,920
So I want to have as as close to forty

1517
01:45:02,039 --> 01:45:06,720
or fifty percent of my money free and ready to

1518
01:45:06,760 --> 01:45:10,239
go in liquid cash or treasury. I mean when I

1519
01:45:10,319 --> 01:45:16,079
say liquid cash, I mean treasuries, right, because this way

1520
01:45:16,119 --> 01:45:19,960
you're actually you're just pacing inflation. But if you stick

1521
01:45:20,000 --> 01:45:24,720
it in literally cashing your mattress, right, you're getting eaten

1522
01:45:24,760 --> 01:45:28,039
alive because the inflation rate in reality Boys and Girls

1523
01:45:28,079 --> 01:45:32,199
is like ten to fifteen percent, Right, It's not five

1524
01:45:32,239 --> 01:45:35,000
percent or whatever fucking dumb number the Fed is trying

1525
01:45:35,039 --> 01:45:38,960
to get you to believe. Yeah, now, the real inflation

1526
01:45:39,119 --> 01:45:47,000
number is probably closer to ten. Right, So treasuries at

1527
01:45:47,119 --> 01:45:50,079
least forty percent of your money because you're going to

1528
01:45:50,199 --> 01:45:55,039
need that because you're going to see opportunities. Right, So

1529
01:45:55,199 --> 01:45:58,880
all of the investment ideas I could give you, Ben

1530
01:45:58,960 --> 01:46:03,399
can give you, they're not going to be as good

1531
01:46:04,479 --> 01:46:08,600
as seeing. Like, let's say, if interest rates continue to

1532
01:46:08,680 --> 01:46:15,479
climb and no one can afford to buy a new house, right,

1533
01:46:15,600 --> 01:46:17,920
there are people that still need to sell their house.

1534
01:46:19,640 --> 01:46:23,039
So if nobody wants to sell their house because they

1535
01:46:23,079 --> 01:46:25,720
can't go buy in a new house, and nobody wants

1536
01:46:25,760 --> 01:46:33,239
to go buy eventually, that is that's unsustainable, right, So

1537
01:46:33,279 --> 01:46:37,319
the people prices will get checked off. So what's going

1538
01:46:37,399 --> 01:46:42,760
to happen is the housing demand is going to remain consistent, right,

1539
01:46:43,600 --> 01:46:49,000
but buyers won't be spending more money, and sellers can

1540
01:46:49,000 --> 01:46:52,800
only hold the line for so long. Right. Yeah, I

1541
01:46:52,840 --> 01:46:57,640
don't want to sell because I can't sell up. Maybe

1542
01:46:57,680 --> 01:47:03,600
I could sell across. But one thing that we haven't

1543
01:47:03,600 --> 01:47:06,119
talked about is a lot of people are going to

1544
01:47:06,159 --> 01:47:08,199
get laid off, and they've already started to get laid off.

1545
01:47:09,079 --> 01:47:14,359
Layoffs have been massive, all right. A lot of these companies,

1546
01:47:14,399 --> 01:47:16,640
like the tech the five tech companies were talking about

1547
01:47:16,640 --> 01:47:20,720
the Fang stocks, right, cumulatively, they've laid off almost half

1548
01:47:20,760 --> 01:47:24,720
a million people in the last two years. That's a lot.

1549
01:47:25,680 --> 01:47:27,800
That's a lot of three four hundred, five hundred thousand

1550
01:47:27,800 --> 01:47:30,600
dollars a year. Jobs don't exist anymore. There's a lot

1551
01:47:30,600 --> 01:47:32,800
of mortgage payments. I can't afford to get paid anymore.

1552
01:47:33,439 --> 01:47:36,760
And that's just in five stocks. Right. There's going to

1553
01:47:36,800 --> 01:47:38,159
be a lot of people that are going to lose

1554
01:47:38,199 --> 01:47:42,479
their jobs during this chaos in melee. And that's going

1555
01:47:42,520 --> 01:47:44,199
to be a lot of people that need to sell

1556
01:47:44,239 --> 01:47:49,520
their homes regardless, and they can't wait, right, So what's

1557
01:47:49,520 --> 01:47:53,960
going to happen if nothing else happens? If nothing else,

1558
01:47:55,560 --> 01:47:59,920
we are going to see rapid deflation in asset price

1559
01:48:00,119 --> 01:48:04,479
is right, and that'll actually mute a lot of the

1560
01:48:04,520 --> 01:48:10,760
commodity in the growth and commodities will be masked, right,

1561
01:48:10,800 --> 01:48:15,439
It'll be disguised for a little bit by the deflation

1562
01:48:15,520 --> 01:48:18,880
and asset prices written large right, So I don't know

1563
01:48:18,920 --> 01:48:21,119
if anybody is in the market for a boat or

1564
01:48:21,159 --> 01:48:31,560
a plane. I have been looking and to say, well,

1565
01:48:32,439 --> 01:48:34,600
let's just compared to like twenty twenty one or twenty

1566
01:48:34,680 --> 01:48:43,680
twenty two, we're like fifty percent less sixty percent. So

1567
01:48:43,800 --> 01:48:47,600
in the really high end stuff, the big expensive stuff,

1568
01:48:48,159 --> 01:48:51,159
things are already half as expensive. Right, things have dropped

1569
01:48:51,199 --> 01:48:55,319
fifty percent price, forty percent price in anything used. Obviously,

1570
01:48:55,319 --> 01:48:56,720
if you want to go buy a new bucking plane,

1571
01:48:56,760 --> 01:49:02,199
that's your goddamn business. Right, then it's going to start

1572
01:49:02,239 --> 01:49:08,600
moving to homes, and you're already starting to see it, right,

1573
01:49:08,720 --> 01:49:12,239
Because anybody that has a million, two million, three million

1574
01:49:12,279 --> 01:49:16,119
dollars or ten million dollars fifteen million dollars for a

1575
01:49:16,159 --> 01:49:21,079
house has the ability to wait, right, they don't have

1576
01:49:21,159 --> 01:49:24,600
to buy something. They're not in a position like somebody

1577
01:49:24,600 --> 01:49:26,680
that's buying a half a million dollar house or a

1578
01:49:26,680 --> 01:49:29,319
four hundred thousand dollars house. That person is buying because

1579
01:49:29,319 --> 01:49:32,560
they have to buy a house, right because if their

1580
01:49:32,600 --> 01:49:36,319
family is growing, because they have to move, right because

1581
01:49:36,319 --> 01:49:40,600
renting is no longer an option financially, it's just not feasible. Right,

1582
01:49:41,800 --> 01:49:44,560
that person has to buy A person with a five

1583
01:49:44,600 --> 01:49:48,399
million dollar house, ten million dollar house, even a three

1584
01:49:48,439 --> 01:49:50,640
million dollar house, two million dollar house, depending on the area.

1585
01:49:51,279 --> 01:49:55,079
The people that buy that house have money already they

1586
01:49:55,079 --> 01:49:59,199
can afford to wait. So that means if anything looks

1587
01:49:59,239 --> 01:50:03,359
dicey at all, all any uncertainty, they're just going to

1588
01:50:03,399 --> 01:50:09,680
go ahead and wait. And that means those were the

1589
01:50:09,680 --> 01:50:13,960
people that were the biggest buyers, right. The big money

1590
01:50:13,960 --> 01:50:19,880
stuff dries up fast, right, because when rich people buy things,

1591
01:50:20,760 --> 01:50:24,159
they buy a lot, and they'll all buy the very

1592
01:50:24,199 --> 01:50:30,279
trend oriented and very trend sensitive. Right. So twenty twenty

1593
01:50:30,319 --> 01:50:34,279
to twenty twenty two, twenty twenty three, that was when

1594
01:50:34,279 --> 01:50:36,960
they were all buying and everyone, every rich guy you know,

1595
01:50:37,119 --> 01:50:39,720
bought a new thing where there's a new house, a

1596
01:50:39,720 --> 01:50:44,239
new boat, things like that. But when things get uncertain

1597
01:50:44,279 --> 01:50:45,399
and sketchy, they.

1598
01:50:45,239 --> 01:50:46,640
Speaker 2: Stop to keep over with the Joneses.

1599
01:50:46,960 --> 01:50:49,760
Speaker 3: But the market is still putting homes like that on

1600
01:50:49,840 --> 01:50:52,800
the market, still building homes for that, you know, then

1601
01:50:52,960 --> 01:50:56,239
the five ten million dollar mark, but all of a sudden,

1602
01:50:56,279 --> 01:50:59,960
overnight it stops. So first you're going to see the

1603
01:51:00,600 --> 01:51:04,720
falling and I mean falling of prices in those categories.

1604
01:51:04,760 --> 01:51:08,840
I've been looking at houses recently. I won't say where,

1605
01:51:09,840 --> 01:51:14,439
but I mean, in the last three months, I'm seeing

1606
01:51:14,640 --> 01:51:19,399
price cuts of two hundred and fifty thousand, three hundred thousand,

1607
01:51:19,640 --> 01:51:22,079
some of them half a million.

1608
01:51:21,840 --> 01:51:23,319
Speaker 2: Dollar price cuts, big chunks.

1609
01:51:24,199 --> 01:51:26,359
Speaker 3: Right, So if you're dropping your price half a million

1610
01:51:26,399 --> 01:51:29,079
dollars and you've only had it on the market for

1611
01:51:29,119 --> 01:51:32,399
two months, what does that tell me? That tells me

1612
01:51:32,439 --> 01:51:35,840
I'm probably the only fucking person looking at it. Right,

1613
01:51:35,880 --> 01:51:37,800
So it starts at the top and then it works

1614
01:51:37,840 --> 01:51:43,760
its way down, and market's always overcorrect. Right. If housing

1615
01:51:43,800 --> 01:51:47,079
prices need to come down thirty percent or forty percent

1616
01:51:47,239 --> 01:51:49,920
to reach an equilibrium, that means they're going to go

1617
01:51:50,079 --> 01:51:55,079
down sixty plus percent and then they're going to slowly

1618
01:51:55,119 --> 01:51:59,000
work their way back up twenty more percent to where

1619
01:51:59,039 --> 01:52:02,239
they should have been. Right. So, if a market needs

1620
01:52:02,239 --> 01:52:06,000
to be at fifty and it's currently at one hundred,

1621
01:52:06,760 --> 01:52:11,359
it's going to go down to thirty overshoot and then

1622
01:52:11,439 --> 01:52:15,239
come back up. And that overshoot is why you need

1623
01:52:15,279 --> 01:52:19,399
to have forty percent of your money in cash, right,

1624
01:52:19,479 --> 01:52:22,880
Because the good deal, the fucking real game changer deal,

1625
01:52:23,159 --> 01:52:28,199
the real game changing investment doesn't exist yet. You can't

1626
01:52:28,239 --> 01:52:34,600
see it yet. But it damn sure is there. If

1627
01:52:34,640 --> 01:52:39,119
you're patient and you're observant, and you have money locked

1628
01:52:39,159 --> 01:52:44,319
and loaded ready to go, that you can move very quickly, right,

1629
01:52:44,399 --> 01:52:47,239
because other people won't have cash money ready to go

1630
01:52:47,319 --> 01:52:51,039
and can move quickly. So that forty percent that you

1631
01:52:51,079 --> 01:52:57,560
have in treasuries, it isn't uninvested. It's waiting for the

1632
01:52:57,680 --> 01:53:02,880
right investment, and it will generate returns far more than

1633
01:53:02,920 --> 01:53:04,640
any of the other shit you put your money in.

1634
01:53:05,279 --> 01:53:10,359
So forty percent off to the side, twenty percent, fifteen

1635
01:53:10,399 --> 01:53:15,079
percent right, gold and then twenty eight to fifteen percent

1636
01:53:15,079 --> 01:53:18,199
and bitcoin. Right, the stuff that you should have in

1637
01:53:18,239 --> 01:53:21,479
the stock market should be like thirty percent of your

1638
01:53:21,479 --> 01:53:26,239
ink of your net worth, maximum forty percent because that's

1639
01:53:26,239 --> 01:53:30,560
where we're going to see the most volatility. Gold, bitcoin,

1640
01:53:30,640 --> 01:53:36,439
it's not moving right. In fact, volatility and uncertainty increases

1641
01:53:36,439 --> 01:53:41,199
the price of both of those, don't they right, So

1642
01:53:41,600 --> 01:53:45,239
you want to be hedged against that volatility. So that's

1643
01:53:45,319 --> 01:53:47,760
your gold and that's your bitcoin. So at no point

1644
01:53:47,800 --> 01:53:50,520
in time any of the conversations that Pete and I

1645
01:53:50,840 --> 01:53:54,479
and Ben have had, do you need to put anything

1646
01:53:54,640 --> 01:53:58,399
even remotely approaching half of your money into anything? And

1647
01:53:58,439 --> 01:54:01,600
on that. I'll leave you guys until next time. Pete.

1648
01:54:05,439 --> 01:54:07,840
Speaker 2: Yeah, good, good chat with you guys.

1649
01:54:07,840 --> 01:54:12,880
Speaker 3: Don't Ben's got to show Sable offshore.

1650
01:54:13,560 --> 01:54:17,680
Speaker 2: Yeah No, I was just gonna say, I'm like, no,

1651
01:54:18,239 --> 01:54:20,880
leave that, leave that for later. But I was gonna say, yeah,

1652
01:54:21,159 --> 01:54:24,840
if it doesn't work out, looking forward to uh having.

1653
01:54:24,640 --> 01:54:27,600
Speaker 3: Happy to do it, man, happy to do it. So Pete,

1654
01:54:27,640 --> 01:54:29,960
thank you for your hospitality. Ben, thank you for joining me.

1655
01:54:30,199 --> 01:54:35,359
Speaker 2: All right, Yeah, of course one.

1656
01:54:38,279 --> 01:54:41,560
Speaker 1: Ben, I'm gonna do you have anything you want to

1657
01:54:41,600 --> 01:54:44,640
wrap with we can. Let let's leave this open to

1658
01:54:44,640 --> 01:54:45,279
do another one.

1659
01:54:45,840 --> 01:54:46,039
Speaker 2: Yeah.

1660
01:54:46,119 --> 01:54:48,359
Speaker 1: Soon, we'll talk about some different things, I mean, because

1661
01:54:49,319 --> 01:54:53,760
really only really only hit the the large overview of

1662
01:54:53,800 --> 01:54:54,600
everything today.

1663
01:54:54,640 --> 01:54:58,479
Speaker 2: So I think when I was talking about energy there,

1664
01:54:58,600 --> 01:55:01,760
I think the last that I'll add to that is

1665
01:55:02,760 --> 01:55:05,760
when you really like dumb it down to base level,

1666
01:55:05,840 --> 01:55:08,840
Like energy is the economy. All this stuff that oil

1667
01:55:08,920 --> 01:55:11,680
goes into. It's not just going in people's gas tanks, right,

1668
01:55:12,119 --> 01:55:16,720
it's in plastics and close and shoot. Like the amount

1669
01:55:16,800 --> 01:55:21,279
of different products that oil and petroleum products end up

1670
01:55:21,279 --> 01:55:24,960
in I think is something most people just aren't aware of.

1671
01:55:25,079 --> 01:55:29,159
And if you look at what's uh I think is

1672
01:55:29,199 --> 01:55:34,079
going to be a significant imbalance in supplying demand for oil,

1673
01:55:34,279 --> 01:55:40,199
for natural gas, for the energy commodities, for coal, for uranium,

1674
01:55:40,399 --> 01:55:43,840
for these things that like really drive what an economy

1675
01:55:43,840 --> 01:55:46,920
can actually produce, especially if we are going to reindustrialize

1676
01:55:46,920 --> 01:55:49,920
and do all these things that we talked about. I

1677
01:55:49,960 --> 01:55:52,479
think energy is going to be if you're looking at

1678
01:55:52,600 --> 01:55:55,640
equities specifically, I think energy is going to be one

1679
01:55:55,640 --> 01:55:59,479
of the sectors to be in commodities broadly. I think

1680
01:55:59,560 --> 01:56:01,960
is my fair pond deficient? I guess is the way

1681
01:56:02,000 --> 01:56:06,680
I'll put it. And if you guys like follow my

1682
01:56:06,720 --> 01:56:08,680
substack or listen to my podcast, like I haven't made

1683
01:56:08,680 --> 01:56:11,319
it any secret, like what my favorite pick is right now,

1684
01:56:12,319 --> 01:56:16,159
But if you guys are interested enough to go and

1685
01:56:16,199 --> 01:56:18,880
look at my substack or listen to podcasts like I

1686
01:56:18,920 --> 01:56:24,039
talk about investment ideas, what's going with oil, energy, all

1687
01:56:24,079 --> 01:56:28,159
these different topics, and feel free to reach out if

1688
01:56:28,199 --> 01:56:30,000
you have any questions, Like I don't want people to

1689
01:56:31,439 --> 01:56:35,319
just see one name and do zero research and buy

1690
01:56:35,359 --> 01:56:37,399
it and then stock goes down the next day and

1691
01:56:37,399 --> 01:56:40,760
they're like, look, I have no way to tell you

1692
01:56:40,840 --> 01:56:43,960
what stocks are going to do short term, whether it's

1693
01:56:44,199 --> 01:56:47,319
stuff and energy, stuff, in SMP, like, I have no idea.

1694
01:56:47,399 --> 01:56:50,039
I like to think that over the next twelve to

1695
01:56:50,079 --> 01:56:52,960
eighteen months, some of these like trends will become apparent

1696
01:56:53,359 --> 01:56:58,560
with different commodities, different parts of the market, and like,

1697
01:56:58,560 --> 01:57:01,359
I'm happy to talk with anybody about out different ideas

1698
01:57:01,439 --> 01:57:08,840
and different trends of the market, different commodities, different individual stocks,

1699
01:57:09,079 --> 01:57:12,760
and like, feel free to reach out either via Twitter.

1700
01:57:13,359 --> 01:57:15,680
You can just look up contring corner with two k's.

1701
01:57:16,399 --> 01:57:20,520
I was on Matt Matt Erickson's podcast, I think six

1702
01:57:20,560 --> 01:57:22,399
months ago or something, and he was like, you're one

1703
01:57:22,439 --> 01:57:27,439
k short, but the if you look up contraying corner,

1704
01:57:27,640 --> 01:57:31,199
either on any of your podcast apps or substack or Twitter,

1705
01:57:31,319 --> 01:57:34,960
like you'll find me. Just look for that with two

1706
01:57:35,039 --> 01:57:39,279
k's and you'll be able to probably pick my brain

1707
01:57:39,359 --> 01:57:41,880
on what's my favorite idea. It's not a it's not

1708
01:57:41,880 --> 01:57:44,239
exactly a mystery, but I know we don't want, don't

1709
01:57:44,239 --> 01:57:46,520
need to run more than a couple hours, so.

1710
01:57:48,479 --> 01:57:50,960
Speaker 1: Well, yeah, I was just gonna say, what's the name

1711
01:57:51,000 --> 01:57:52,000
of the substack?

1712
01:57:53,000 --> 01:57:56,079
Speaker 2: The substack is also conturing corner, So if you look

1713
01:57:56,159 --> 01:57:58,880
up controlling with a K, it'll be one of the

1714
01:57:58,880 --> 01:58:06,159
first search results on Twitter, on Google or on basically

1715
01:58:06,239 --> 01:58:09,239
in the podcast apps. So excellent.

1716
01:58:09,279 --> 01:58:10,000
Speaker 1: I appreciate it.

1717
01:58:10,039 --> 01:58:12,159
Speaker 2: Ben. We'll do it again real soon. Thank you. Yeah,

1718
01:58:12,239 --> 01:58:12,920
thanks for having me.

1719
01:58:15,079 --> 01:58:15,119
Speaker 3: M