Speaker 1: You know, because of the fact that they were behind
the eight ball. Well now, they started lowering interest rates
sooner than a lot of people thought that they might
need to. But the reality is that they're trying to
get in front of the eight ball, and I think
they've done a great job. I think at this point
wait and see as the right approach. It hasn't affected
the stock market. We're still only a few hundred points
on the Dow off of the all time highs. Consumer
confidence is over one hundred, well in expansion territory. So
I think they're navigating everything well and I don't see
any red flags for the economy or stock market.
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Speaker 3: Than ever, And welcome you are listening to and watching
the Financial Survival Network. I'm your host, Carrie Lutz. Hey,
we're at the second to last day of January. This
month has flown by so much has happened and so
much hasn't. Anthony Sakara is with US now, financial expert, Anthony.
Great to have you back on So the Fed says no,
Trump said they're going to cut rates. Powell said, we're pausing.
Who's going to win this fight? Yeah, well, Kerrie, thank
you for having me back. Great to be here as always.
Speaker 1: Yeah, of course Trump wants interest rates to go down
because that is going to spur on the economy, and
Jerome and Powell basically said that we're gonna wait and
see pattern. The reason is because GDP has sloan, but
it's still above the level that they want to see
it at. And inflation has ticked up over you know,
twenty twenty four as well too, but still in the
high twos. I think the CPI was two point nine.
If I'm correct, then the PCE was lower than that.
But the reality is is the Fed Reserve has this
balancing act between the labor market and unemployment and inflation.
Unemployment's been under control for a while. It's currently sitting
in the four point one percent, but for the last
year it's been in the high three is low fours.
That's certainly under control. So their target then has been inflation.
Their target for inflation is two percent. Now I don't
believe and a lot of economists don't even believe that
that's necessarily realistic. It doesn't mean that they have to
get the two percent before they start cutting though. As
a matter of fact, that would be a huge mistake
to do that, because inflation is a lagging indicator. It's
something that occurs after policy. So once you put policy
into place, then six months later is when that's going
to start showing up in inflation. So you have to
be ahead of the curve. And if you're too far
ahead of the curve, then six months later it's the
economy is going to overreact, and not in front of
the curve enough, then six months later the policies the
economy is going to underreact. And that's what happened back
when COVID started. You might remember when they started talking
about inflation as being transitory and they got that wrong.
That wasn't But they didn't make any moves and so
then inflation went out of the you know, went through
the roof, you know, because of the fact that they
were behind the eight ball. Well, now they started lowering
interest rates sooner than a lot of people thought that
they might need to. But the reality is that they're
trying to get in front of the eight ball, and
I think they've done a great job. I think at
this point, wait and see is the right approach. It
hasn't affected the stock market. We're still only a few
hundred points on the Dow off of the all time highs.
Consumer confidence is over one hundred, well in expansion territory.
So I think they're navigating everything well. And I don't
see any red flags for the economy or stock market
for about six months, and that at any point in time,
that's really about how far you can look out.
Speaker 3: Yeah, well, but realistically, the inflation rate is much higher
than they're admitting, right, So that means that the so
called economic growth that we're experiencing maybe doesn't really exist.
Speaker 1: Well, you definitely can argue that, and I don't I
believe that for sure. When I talked to clients, even yesterday,
I spoke with a client and throughout that two point
nine percent CPI number, and his eyes kind of rolled
in the back of his head because that number doesn't
include food, it doesn't include energy, and so there are
some things that are left out and real inflation certainly
is arguable that is higher than that number, So there's
no doubt that there's a lot of truth in that statement.
The reality, though, is that it's the measure that we've
used for years, and if it's going to be higher
by some degree, then it's going to be higher year
over year as well too. The CPI is just the
measuring stick. So if CPI is a two point nine
and real inflation is one percent above that, you know,
three point nine, well, then when CPI goes up, the
real inflation goes up as well too. So yes, the
real inflation rate is really going to be higher than
what the CPI indicates, but it's still relative to being
able to measure it. It's almost like you know, when
I get on a scale. If I get on one scale,
you know I might weigh a certain weight. If I
get on a different scale, I might weigh a different weight.
So which one is correct? Well, over time, they're both
going to go up and down the same regardless of
the scale, And that's what we're measuring. It is what's
the increase and what's the decrease, And the fact is
that inflation has ticked up just a little bit, but
not so much to where the Federal Reserve needs to raise,
but certainly enough to where they need to pause. And
I think pausing was probably a good decision.
Speaker 3: Yeah, well, so what about the Trump administration's efforts to
rein in the federal budget, because that's always what the
Fed's bumping up against, Right, they can't. Monetary policy can
only go so far. Eventually, fiscal policy has to join
the Act if you want to bring inflation under control,
because the deficit is going to get financed by the
FED no matter what.
Speaker 1: Right, Yeah, for sure. You know, our GDP has gone
from watch twenty to one trillion to twenty seven trillion
just in the recent years. And you know, I believe
that I like the idea of doge. You know, where
Trump is about getting rid of all the government waste.
I think there are so many my own personal beliefs.
I think there are so many agencies out there that
were commissioned to start doing something and then really veered
away from what they were supposed to be doing, and
now they're not even on task to do anything that
they were initially set up to do, and it's just
gotten out of control. And I think when you rain
that in, then I think the budget's going to get
in the more in the more realistic territory. But the
reality is is that is that you know, the the
Fed do finance it, and it's the budgetary constraints and
controls that are set by the President and Congress that
you'll really impact fiscal policy. But I do love the
pro growth stance that Trump has and the fact that
he wants the rain and expenses. And you know, we'll
see how that actually plays out over the next four
years because it's not all him, right.
Speaker 3: Right, that's for sure. Well though right now it's all
him because everything he's doing can be done by executive order.
One thing I think it's the hugest wild card out
there that we will We're going to find out about
soon enough.
Speaker 1: AI. What's your So the reality is that we get
a lot of questions about AI. It's it's increased productivity
for companies in a dramatic way. I use AI virtually
to send all my emails. At this point, you can't
craft an email as fast as AI can. It won't
be as good, it won't be as thorough. It is
just you know, caused me to be very, very efficient
with my time, and from a productivity standpoint, when companies
start to grasp the use of AI, it's going to
cause their employees to be very, very efficient. The fear
that I have are are couple fears. The first fear
is the fact that if you have broken English and
you can, you know, halfway say a sentence in the AI,
you can essentially create a resume, and this resume is
going to be the best resume that anyone on the
face of this planet has ever seen because it was
automatically generated. And when we get that resume to our office,
we don't really know anything about you. Same thing with
an email. You send an email to us that wasn't
drafted by you, we don't really know anything about you.
We're not sure who we're dealing with. There are AI
platforms now that could take my face and make me
say what it is, and this whole entire interview could
actually be done by AI, and you wouldn't know whether
it was me or AI doing it. Now. I have
to tell you, Carrie, it's me, but you wouldn't know,
and so it's scary from that standpoint. But from an
investor standpoint, the fear that I would have is We've
had calls from people trying to jump on the bandwagon
to try to find that. You know, how do I
invest in chat ept open Ai And that's a mistake.
You know, people are looking for the next apple where
they can put ten thousand dollars into and then you know,
in fifteen or twenty years have millions of dollars. And
you have to remember, for every apple, there were probably
ten thousand failed apples, and so you don't want to
chase it. And that's the fear that I have is
a lot of people are trying to get get rich quick,
and you still need to have a balance averts by portfolio,
but not trying to find the one thing, you know,
the the n video that you think is going to
be great over the next ten years.
Speaker 3: Yeah, But the other thing is the impact on the
overall economy. It's just progressing way faster than anybody out
there except for the real insiders understand like Elon must
have been warning about.
Speaker 1: It for years.
Speaker 3: But now it's going to hit critical mass. It's going
to change everything.
Speaker 1: One hundred You know, the reality is that it already
has changed a lot of things. It's changed things in
the pharmaceutical world, that can analyze medical conditions faster than
any human can and much more accurate and you know,
do analysis. The reality though, is that as it does this,
not only is it going to be more efficient, the
question I should say is whether it's going to cost jobs?
Is it going to actually take place of workers? And
there's arguments that say, because it's so efficient you need less, we're.
Speaker 3: Going to it is, there's no question, But.
Speaker 1: There is the other side that says, well, we're going
to need.
Speaker 3: More workers for the end. No, but no, and I
agree with you.
Speaker 1: The reality is that it's it is going to take
job in my opinion as far as that's concerned. But
now look at what's happened. China came out the other
day with this Sikh and Ali Baba has a program
where now they're starting to be even more efficient, and
the stock market didn't necessarily like that, The NAZAC didn't
like that, you know, but all of a sudden, realizing
that our own AI system can be much more efficient
than it is. And whereas open ai was pretty much
the only one out there, and all of a sudden,
there's a couple of competitors in there.
Speaker 3: So there's Grock three is the one to watch which
is hooked into X point is it's going to take jobs.
There's no question in my mind, because for me, using
AI could be about ten to twenty times more effective
then i'd be. Otherwise, if you're a lawyer and you're
not using AI, you don't know what you're doing, well,
that's lost. I might because somebody sent me a couple
of contracts. I don't even practice anywhere, Anthony. You know
that I'm America's top recovering attorney, and they wanted me
to look them both through. And it's like, I'm not
getting paid for this, and I got the genius idea.
Just load both of them into chat GPT, I said,
compare each section of these agreements and in a third
put one in one column revision A, and one revision
B and two and put the meaning of each clause
in column three. And it took all of about a
minute and a half to do it. It was slow
that day. And then I looked through it. You know,
obviously the parts of the agreement that you know that
was the easy part. Interpreting it is the difficult part.
I'd say I'd give it a ninety five on the
interpretation all I did was change around a couple of
things because I didn't like it, but it gave me
a starting point. I replaced a couple and it took
me all of fifteen minutes what would have taken me
hours in the past. So even lawyers aren't safe. This
is a white collar of threat. And you know, I
think the impact is unimaginable, and we'll see it very quickly.
In the next six months, six to eighteen months, you
won't recognize the world. And then five years, who the
heck knows?
Speaker 1: Oh, I fully, fully agree.
Speaker 3: Absolutely.
Speaker 1: I heard someone say I don't know a year year
and a half ago. As soon as really open, AI
kind of came out whenever that was, and he said,
if you don't, if you're not scared to death of
artificial intelligence, or you're not excited out of your mind,
you just don't understand it. I think there's truth on
both of those things. Scared to death for the reasons
that I talked about earlier is that you can impersonate
someone and you know, at some point you don't really
know who you're dealing with. And I'm worried about our kids.
You know, if you tell this thing to write a
paper about you know, the Great Depression of nineteen twenty nine.
It will come out and that's all you need to
tell it. Literally, it will write the best paper you've
ever seen. And the plagiarism that can go on and
the cheating that can go on, you know, all of
a sudden, you have kids that are not intelligent at all,
because they don't need to be. They just need to
tell something what to do, and it thinks for you.
And it does take the place of thinking, which is
what scares me to death about it. The exciting part
is the efficiency of the efficiency, the calculations, the analysis.
If you want to do a study of the stock
market history, you can go into chat GPT and say,
you know, give me a one page report on the
history of the stock market. It will do all that.
It's just absolutely amazing. It will write your emails, like
you said, it will analyze your documents. You know, as
an attorney. Every now and then, I'll have it right
legal documents for me. You you know, you know, got practicing,
so you might not even be aware. I can go
in there and have it write a legal document for
me and just tell what to do and it will
come up with the perfect legal document hits it.
Speaker 3: Yeah, you just got to not pull a Michael Cohne.
You got to check those sites because that and make
stuff up. So check them, because you just feed the
sites into the inter chat GP pulls up the case
and you're there. You know, it's interesting. Elon Musk said,
they've run out of data to feed the thing. It's
gotten all the data it possibly can, and now it's
got to like make up its own data and figure
out stuff from there. It's pretty wild, and yeah, you can't.
It's like to me, it's like when you have the
Tesla autopilot. You could theoretically just let the car drive,
but you've got to be supervising it and checking its work.
But we're going to get to the point where you
won't have to. There's no question the Chinese one has
its limitations. I already hit it. It looks very good on
the surface. It wouldn't surprise me if it's just a
front end to some other you know, it's just a
front end to some other a that's already out there working.
I mean, you know, I think they found a slicker
way to figure that stuff out. And don't ask it
about Teman Square or Taiwan, because you're not going to
get a straight answer, Anthony. So investing, where are we
going to be at the end of the year when
we have our end of the year call mark it up, down, sideways,
rates higher, lower, economy booming or busting.
Speaker 1: So I don't see anything in the near future, including
this year, that is going to cause a bust in
the economy. I think we'll be higher in a year
than we are from now because of the pro growth
policies that Trump is put into play, because the tax
policies are most likely going to get extended you know
as well too, So I think you're at the end
of the year, we're higher. The reality though, is that
we're not out of the recession possibility yet and that
I think that's important to understand. You know, you're gonna
get a lot of opinion on all these different news
networks in media. Some people think higher, some people think lower,
and you know, you almost get that, at least for
me when people I've talked to from my radio show
or you know, otherwise, you almost get that fomal feeling.
I've talked to a lot of people that feel, you
know that that maybe got conservative last year or before Trump.
A lot of people, especially in California, you got more
conservative before Trump because they thought everything was going to crash.
If it's the same thing that happened last time, right,
and the same result happened last time too. Nothing happened,
nothing crashed, And so there is this fear missing out.
And my fear is that if this fomo takes over
and you start to act emotionally and not necessarily intelligently,
then you can let your emotions take over and you
can go all in. And if we have a recession
or a crash, and that's not out of the possibility.
If we have a recession or crash and you're on
the bringer retirement, it could cost you your retirement if
you if you're younger, keep dollar cost averaging in and
whether the market's up or down, dollar cost averaging is
the best way to go. It drives the average purchase
price down. But if you're older, meaning within five years
of retirement, you probably want to take this opportunity to
take some chips off the table and start shoring up
your portfolio. Our yield curve is none inverted now. It
was inverted for years, and that's a sign of recession. Yes,
but many recessions have occurred after the yield curve uninverted,
and so just because it uninverted, a lot of people
think that r out of the woods. That's not the case.
So the answer a question is, I think we're going
to be up for the next six months. I think
even the year. I have strong feeling that it's going
to be a good year. But it's not. Nothing's for
certain when it comes to the market.
Speaker 3: You just have to be careful, all right, the trump bump.
You know, like they said in that movie Full Metal Jacket,
men will live and die, but the core is forever.
Men will live and die, but the markets forever, Yes, sir,
all right, Hey tell us how do we connect with you?
How do we find you on the web?
Speaker 1: Sure? Absolutely, Probably the best place is just go to
Anthony Scaro dot com. That'll lead you to my law firm.
It'll lead you to my financial firm. Or you can
search Anthony Sikar anywhere on Google Providence Financial and Insurance
Services the name of my company. You can search that
on the website or go to Providence Financial Inc. Dot com.
Speaker 3: All right, excellent. Hey, Well, if you've got a question
for Anthony myself, shoot me an email kl atcarrielts dot
com and you'll find a link to Anthony's site in
the show notes This interview on Financial Survival Network dot com.
Speaker 1: Oh esks.
Speaker 3: While you're there, please sign up for your free newsletter.
Like over sixty seven thousand other FSN community members have
appreciate you coming on, Anthony, we'll talk to you again
real soon.
Speaker 1: Thank you, Kerry.
Speaker 2: Great to be here, Thanks for listening to Carrie Let's's
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