WEBVTT 1 00:00:00.160 --> 00:00:03.040 I find myself in a very peculiar position. I'm kind 2 00:00:03.040 --> 00:00:06.120 of in defending Jerome Powell, which I never thought I 3 00:00:06.160 --> 00:00:09.160 would do in my life, you know, carry for the 4 00:00:09.160 --> 00:00:13.800 life of me. I don't understand what the administration, who 5 00:00:13.839 --> 00:00:16.120 I support, is thinking when they say they want to 6 00:00:16.120 --> 00:00:19.239 fire Powell and cut interest rates to one percent. 7 00:00:19.480 --> 00:00:23.280 You are listening to Carrie Let's's Financial Survival Network, where 8 00:00:23.280 --> 00:00:26.719 you get valuable information you just can't find anywhere else 9 00:00:27.280 --> 00:00:30.879 to thrive in today's trying times. You need the Financial 10 00:00:30.960 --> 00:00:32.479 Survival Network. 11 00:00:32.359 --> 00:00:33.520 Now more than ever. 12 00:00:34.079 --> 00:00:37.600 Go to Financial Survivalnetwork dot com and get your free 13 00:00:37.640 --> 00:00:43.679 newsletter and gift. Financial Survival Network now more than ever. 14 00:00:46.840 --> 00:00:50.799 And welcome. You are listening to and watching the Financial 15 00:00:50.840 --> 00:00:54.359 Survival Network. I'm your host. Carrie Let's Michael Pento is 16 00:00:54.479 --> 00:00:57.840 on vacation, although as long as Michael has a phone, 17 00:00:57.880 --> 00:01:01.840 he's never really on vacation. In fact, he manages hundreds 18 00:01:01.880 --> 00:01:05.959 of millions of dollars, not with computers but with his iPhone. 19 00:01:05.959 --> 00:01:09.120 If you could believe it, that's how easy he's got 20 00:01:09.120 --> 00:01:10.120 the job down to. 21 00:01:10.239 --> 00:01:13.799 Right Michael, Yeah, I'm in a beautiful Belmore New Jersey 22 00:01:14.359 --> 00:01:17.359 in the upstairs apartment of a close friend, and I 23 00:01:17.400 --> 00:01:20.640 forgot we were doing these interview But I'm here, here, 24 00:01:20.680 --> 00:01:24.159 my athletic freaky shirt on, and I'm ready to go. 25 00:01:24.560 --> 00:01:28.239 So no, you know what Woody Allen said, ninety percent 26 00:01:28.239 --> 00:01:29.680 of life has showing up, right. 27 00:01:30.200 --> 00:01:31.480 Well, I'm going to show up at the pick a 28 00:01:31.519 --> 00:01:33.319 ball courts in maybe about a half an hour, so 29 00:01:33.400 --> 00:01:34.280 let's see what happens. 30 00:01:34.560 --> 00:01:37.239 All right. I'll say a prayer for you, because everybody 31 00:01:37.280 --> 00:01:40.760 that I know, except for one or two people, has 32 00:01:40.799 --> 00:01:46.319 sustained fairly significant injuries from a very low impact, low 33 00:01:46.400 --> 00:01:53.319 effort sport with jarring lateral movements, studden stops running backwards 34 00:01:53.760 --> 00:01:55.719 like I don't know how you do it? 35 00:01:55.760 --> 00:01:58.239 Oh hey yeah, I'm so Just to digress for a second, 36 00:01:58.879 --> 00:02:02.799 I had preci gift significant concussion from doing a Frankenstein 37 00:02:02.879 --> 00:02:07.879 walk backwards and soup pine on my head, and then 38 00:02:08.039 --> 00:02:12.280 I popped a calf muscle and now I'm nursing a 39 00:02:12.360 --> 00:02:18.479 broken tendon in my foot as well as of displaced bones. Well, 40 00:02:18.759 --> 00:02:22.080 pick a bowl is very safe. I suggest everybody do it. 41 00:02:22.240 --> 00:02:25.000 Just put a hell out. I think it's about as 42 00:02:25.080 --> 00:02:28.000 safe as the bright Line train, you know. Just talking 43 00:02:28.039 --> 00:02:30.560 a little Florida biz I wrote an article about this, 44 00:02:30.919 --> 00:02:34.159 The bright Line is unsafe at any speed. We thought 45 00:02:34.199 --> 00:02:38.680 there were only one hundred twenty six deaths bright line 46 00:02:38.719 --> 00:02:42.400 related since twenty seventeen, but the Miami Herald just came 47 00:02:42.439 --> 00:02:45.439 out with an expose. It's actually one hundred and eighty 48 00:02:45.639 --> 00:02:50.240 six deaths. So they've been covering it up. But I'm 49 00:02:50.240 --> 00:02:52.639 not so much worried about the carnage on the tracks 50 00:02:52.680 --> 00:02:55.719 in Florida. I'm worried about the carnage and the tracks 51 00:02:55.759 --> 00:03:00.120 coming out of Wall and Broad Street, right. 52 00:03:00.680 --> 00:03:03.840 Yeah, and the echoes building at the at the Federal Reserve. 53 00:03:04.599 --> 00:03:07.800 Yeah, So, what's what's going on here with the Federal Reserve. 54 00:03:07.840 --> 00:03:10.800 It seems like they got some pretty luxurious digs there. 55 00:03:11.840 --> 00:03:14.199 Central banking is good business, isn't it. 56 00:03:14.319 --> 00:03:17.240 I find myself in a very peculiar position. I'm kind 57 00:03:17.240 --> 00:03:20.319 of in defending Jerome Powell, which I never thought I 58 00:03:20.360 --> 00:03:23.120 would do in my in my life, you know, carry 59 00:03:23.159 --> 00:03:27.400 for the life of me. I don't understand what the administration, 60 00:03:27.800 --> 00:03:30.240 who I support, is thinking when they say they want 61 00:03:30.240 --> 00:03:33.400 to fire Powell and cut interest rates to one percent. 62 00:03:33.639 --> 00:03:35.439 Now the curve the funds rate is for four and 63 00:03:35.479 --> 00:03:37.240 a quarter to four and a half, So it's just sowing. Know, 64 00:03:37.439 --> 00:03:39.680 we're talking about one percent, which is an over you know, 65 00:03:39.759 --> 00:03:42.520 a three hundred and twenty five basis point rate cut immediately. 66 00:03:43.400 --> 00:03:44.039 Yeah, I guess. 67 00:03:44.080 --> 00:03:47.080 I guess inflation that has wiped out the middle class 68 00:03:47.159 --> 00:03:50.680 isn't good enough when you have sixty percent of Americans 69 00:03:50.680 --> 00:03:55.120 that have a networth of one thousand dollars or less. 70 00:03:55.159 --> 00:03:58.960 Sixty big zero? What are we doing here? But do 71 00:03:59.039 --> 00:04:01.039 we want to make home prices go up even faster 72 00:04:02.000 --> 00:04:04.639 and make them eve expensive? I don't understand it. So 73 00:04:05.439 --> 00:04:07.680 on what premise would you cut interest rates? Let's see 74 00:04:07.680 --> 00:04:09.960 the unemployment rate is is? I think it's four point 75 00:04:10.000 --> 00:04:13.800 one or four point two percent is historically very very 76 00:04:13.919 --> 00:04:16.639 very low. The stock market is at an all time 77 00:04:16.720 --> 00:04:20.079 record high valuation, home price to income ratios are an 78 00:04:20.120 --> 00:04:24.160 all time high. Credits reds are extremely tight. Financial conditions 79 00:04:24.199 --> 00:04:28.480 are extremely loose. We're not in a recession. GDP growth 80 00:04:28.480 --> 00:04:30.319 for this quarter is supposed to be about a little 81 00:04:30.319 --> 00:04:37.040 bit over two percent, and inflation is inflation carry has 82 00:04:37.079 --> 00:04:42.759 been above the Fed's asinine two percent target for fifty months. 83 00:04:43.759 --> 00:04:44.680 Right now. 84 00:04:45.839 --> 00:04:48.600 If I just told you, what if you just heard that, 85 00:04:48.720 --> 00:04:50.639 if you came from Mars and said, you know, I 86 00:04:50.759 --> 00:04:55.680 understand the federal reserves shorter is to maintain you know, 87 00:04:55.759 --> 00:04:59.319 a level prices, you know, stable prices. And I just 88 00:04:59.360 --> 00:05:02.439 told you all those things and you and I also 89 00:05:02.560 --> 00:05:05.279 said that the Fed has missed its target to the north, 90 00:05:06.160 --> 00:05:08.839 it's two percent target to the north for fifty months, 91 00:05:08.879 --> 00:05:10.839 and that target is moving further away. 92 00:05:10.839 --> 00:05:11.759 In other words, the. 93 00:05:11.639 --> 00:05:15.360 Inflation rate is moving further away from the target two. 94 00:05:15.920 --> 00:05:18.399 What do you think the conversation would be. It wouldn't 95 00:05:18.399 --> 00:05:22.160 be when are you going to cut rates? It shouldn't 96 00:05:22.199 --> 00:05:24.720 certainly shouldn't be when you're going to lower rates to 97 00:05:24.759 --> 00:05:26.560 one percent. It's gonna be when you're going to raise 98 00:05:26.600 --> 00:05:27.439 interest rates. 99 00:05:27.920 --> 00:05:34.319 Yeah. Well, and really historically, going back, you know, as 100 00:05:34.360 --> 00:05:38.240 far back as you can go, really, the rates are 101 00:05:38.360 --> 00:05:42.639 not out of line. They're kind of normalized. Now, if 102 00:05:42.680 --> 00:05:47.000 we need zero percent interest to keep this economy going, 103 00:05:47.439 --> 00:05:50.399 then we've got a real problem here, don't we. No, 104 00:05:50.439 --> 00:05:51.519 we not. 105 00:05:51.639 --> 00:05:54.480 If we have a real problem. We have a tremendous 106 00:05:54.519 --> 00:05:55.199 credit bubble. 107 00:05:56.879 --> 00:06:03.759 We have an an unbelievable equity bubble two hundred Well, 108 00:06:04.160 --> 00:06:06.879 the total market cap of equities is now two hundred 109 00:06:06.920 --> 00:06:07.920 and twelve percent of. 110 00:06:08.000 --> 00:06:11.360 GDP, so it's more than double the size of the 111 00:06:11.519 --> 00:06:16.000 entire US economy. Now, the normal relationship there's around ninety 112 00:06:16.040 --> 00:06:19.240 to one hundred percent, that's just normal. So that means 113 00:06:19.279 --> 00:06:21.959 stock prices could drop fifty percent and still be above 114 00:06:22.920 --> 00:06:26.560 valuation historical valuations. That's how that's how crazy. And then 115 00:06:26.560 --> 00:06:30.240 you also have you know, the Cape ratio, which is 116 00:06:30.240 --> 00:06:35.279 that I think it's at almost twenty seven or thirty seven, 117 00:06:35.319 --> 00:06:39.399 I forgot where it was anyway, it's astronomically high. It's 118 00:06:39.560 --> 00:06:46.920 historically speaking, pryces deals ratio is three risk premiums are 119 00:06:47.000 --> 00:06:52.120 negative in the risk premium the inverse of the pe ratio, right, Sure, 120 00:06:52.199 --> 00:06:55.800 get your earnings yield, and the earnings yield is less 121 00:06:55.839 --> 00:06:58.079 than what you can earn in a T bill. This 122 00:06:58.199 --> 00:07:03.360 is all highly unusual record low dividend yields. So the 123 00:07:03.360 --> 00:07:05.879 stock market's in an epic bubble. Home prices are the 124 00:07:05.879 --> 00:07:09.360 most expensive they've ever been in history, even relate in 125 00:07:09.439 --> 00:07:12.399 relation to incomes. And we have a massive credit bubble 126 00:07:12.399 --> 00:07:15.240 when there's like, you know, trillions of dollars of things 127 00:07:15.319 --> 00:07:19.439 like private credit, which hardly ever existed before, I mean 128 00:07:19.480 --> 00:07:22.399 in the previous decades. Now, there's a whole cottage industry 129 00:07:22.800 --> 00:07:26.000 of businesses that can't get loans from a bank or 130 00:07:26.120 --> 00:07:29.040 float corporate paper, so they get loans from you know, 131 00:07:29.600 --> 00:07:33.319 the shadow banking system. Yeah, that's a huge problem these 132 00:07:33.360 --> 00:07:36.399 that's a huge when we have when not the not if, 133 00:07:36.600 --> 00:07:40.879 when we have a recession, because the the the business 134 00:07:40.879 --> 00:07:43.879 cycle hasn't been repealed. When we have the next versus 135 00:07:45.519 --> 00:07:48.680 when we have the next credit crisis or recession, this 136 00:07:48.759 --> 00:07:50.839 is when reality is going to hit. So it's not if, 137 00:07:50.879 --> 00:07:53.560 it's when I have a timing model that lets me 138 00:07:53.639 --> 00:07:56.759 know when to get out. I'm been, I've been you 139 00:07:56.800 --> 00:07:59.279 know in a you know, I have a long short strategy, 140 00:07:59.319 --> 00:08:03.000 so mostly long, sometimes short. The past few years mostly 141 00:08:03.000 --> 00:08:05.720 went out long, but holding our nose because we know 142 00:08:06.600 --> 00:08:08.959 that if you're gonna be one of those people, one 143 00:08:08.959 --> 00:08:12.959 of those automatic buy and hold dollar course to averaging 144 00:08:13.319 --> 00:08:16.720 funding their four to one k in a target date fund, 145 00:08:17.160 --> 00:08:19.040 and you're gonna be down thirty five percent in a 146 00:08:19.360 --> 00:08:22.600 few weeks time, not a few weeks from now, but 147 00:08:22.720 --> 00:08:25.360 in a few weeks, a truncated period of time, when 148 00:08:25.360 --> 00:08:28.639 the when the poop hits the bed, we're gonna be 149 00:08:28.680 --> 00:08:31.720 down thirty percent in a very quick period of time. 150 00:08:32.200 --> 00:08:35.840 And then you're gonna panic and call your administrator for 151 00:08:35.879 --> 00:08:37.600 your four to one K plant and say move my 152 00:08:37.799 --> 00:08:41.000 plan into cash. And that's what market goes down fifty 153 00:08:41.000 --> 00:08:42.080 to sixty seventy percent. 154 00:08:43.039 --> 00:08:46.120 But haven't people been programmed to not behave that way? 155 00:08:46.919 --> 00:08:50.840 They have been inculcated through the decades to just buy 156 00:08:50.840 --> 00:08:55.879 and hold. But Carrie uh, stock ownership among Americans has 157 00:08:55.919 --> 00:08:59.799 never been higher, and the stocked ownership is concentrated mostly 158 00:08:59.799 --> 00:09:03.480 in people who are my age or older. So you 159 00:09:03.559 --> 00:09:08.559 went around in their fifties, like fifties, early sixties, or 160 00:09:08.600 --> 00:09:11.320 in their retirement ages. Not not not in the twenty 161 00:09:11.360 --> 00:09:15.679 year old, not in the mean stock people. It's our age, yes, 162 00:09:15.840 --> 00:09:20.480 approaching retirement or in retirement. Kerry. When they're down thirty 163 00:09:20.519 --> 00:09:23.840 five percent in their portfolio, I don't know the exact number, 164 00:09:23.879 --> 00:09:26.639 but it's probably around. That's my guest to mint. They're 165 00:09:26.639 --> 00:09:30.600 gonna exist because they cannot see. Then it becomes what 166 00:09:30.639 --> 00:09:34.039 you just said, it's a it's an existential crisis. I 167 00:09:34.080 --> 00:09:35.799 am not gonna be their wife is going to tell 168 00:09:35.799 --> 00:09:40.639 them from probably being a little sexist here, but if 169 00:09:40.639 --> 00:09:42.440 you're a man, your wife's going to tell you, hey, 170 00:09:43.559 --> 00:09:46.320 I'm not canceling my trip to Europe and I'm not 171 00:09:46.399 --> 00:09:50.679 selling my my lake house. You can sell. You're gonna sell, 172 00:09:50.720 --> 00:09:52.799 and you're gonna sell now and will wait for it 173 00:09:53.759 --> 00:09:56.480 to settle down. That is going to happen, and that 174 00:09:56.600 --> 00:09:58.919 is gonna be synergistic. It's gonna be a death spiral 175 00:09:59.039 --> 00:10:01.559 in my opinion. It's just it's just a matter of 176 00:10:01.559 --> 00:10:05.720 mean reversion. If you believe in nature, heats vacuums, this 177 00:10:05.759 --> 00:10:08.039 is a mean Listen, this is one or two things 178 00:10:08.080 --> 00:10:14.480 are gonna happen mathematically certain. Either stought pressures are gonna crash, 179 00:10:15.039 --> 00:10:18.399 so the ratio that you know they're not the enumerator 180 00:10:18.559 --> 00:10:21.480 matches the denominator, or they're going to stay where they 181 00:10:21.480 --> 00:10:24.360 are for a decade not could not do anything until 182 00:10:24.559 --> 00:10:28.799 the denominator catches up. Now, the latter scenario never happens 183 00:10:28.840 --> 00:10:33.279 in history. It just never has happened before bubbles burst. 184 00:10:33.559 --> 00:10:36.279 They don't just stay bubblicious for a decade. 185 00:10:36.720 --> 00:10:42.879 Wow, all right, So uh ah, so you got to 186 00:10:42.879 --> 00:10:46.600 think what should you be doing now because this appears, 187 00:10:46.840 --> 00:10:49.879 from what you're saying here, Michael, to be inevitable. 188 00:10:50.559 --> 00:10:53.200 Well, you better first of all, if you're you're in 189 00:10:53.240 --> 00:10:57.320 one of those buy and hold dollar cost averaging rubrics, 190 00:10:57.320 --> 00:10:58.480 you've got to get the hell out of there as 191 00:10:58.480 --> 00:11:01.000 fast as possible. You got to put yourself in an 192 00:11:01.039 --> 00:11:04.039 active money managuer. It doesn't have to be me. I mean, 193 00:11:04.080 --> 00:11:08.039 I'm I mean, let me speak altruistically. Find somebody else 194 00:11:08.080 --> 00:11:09.600 besides me. I have plenty of money, and I have 195 00:11:09.639 --> 00:11:12.360 plenty of money under management. I don't care. But find 196 00:11:12.360 --> 00:11:16.960 yourself a rouste a robust model that is in the 197 00:11:16.960 --> 00:11:20.720 purview of a very honest and experienced money manager. Does 198 00:11:20.759 --> 00:11:22.720 not have to be me. But do it for your 199 00:11:22.799 --> 00:11:24.679 own retirement sake. 200 00:11:24.879 --> 00:11:27.559 You need to do it all right, sir. 201 00:11:27.919 --> 00:11:30.720 You've worked your entire life to get where you are. 202 00:11:32.200 --> 00:11:36.840 Realize where you are. Realize the triumvirate of bubbles that 203 00:11:36.879 --> 00:11:41.519 we have unprecedented in history, all three of them. Yeah, 204 00:11:41.559 --> 00:11:44.440 and be a historian. See what has happened, not only 205 00:11:44.440 --> 00:11:48.639 in the United States but around the world. What happens 206 00:11:48.679 --> 00:11:52.639 to asset prices when they get this this elevated and 207 00:11:52.679 --> 00:11:56.440 the inculcation the mindset is overwhelming. Where you know, you 208 00:11:56.559 --> 00:12:00.080 have to now convince people that there is such thing 209 00:12:00.159 --> 00:12:02.799 is a business cycle. You have to convince people that 210 00:12:02.879 --> 00:12:08.320 the FED and the Treasury and the administration can't always 211 00:12:08.360 --> 00:12:12.720 bail you out. And you know, in the past, Carrie, 212 00:12:12.759 --> 00:12:16.240 what is it. What does the Treasury and particularly the 213 00:12:16.320 --> 00:12:20.440 FED have done. They've always solved the problem every hiccup 214 00:12:20.440 --> 00:12:23.240 in the stock market or a steed speed by economy. 215 00:12:23.559 --> 00:12:26.720 They just lower interest rates and print money. Carry Do 216 00:12:26.759 --> 00:12:29.519 it again, do it one more time, and see what 217 00:12:29.559 --> 00:12:33.440 happens to inflation if they actually start cutting, if they 218 00:12:33.480 --> 00:12:36.720 ever stop, If they started cutting interest rates now to 219 00:12:36.720 --> 00:12:41.240 desert QE helicopters money, I think it would be an 220 00:12:41.279 --> 00:12:44.200 absolute disaster. It already is a disaster for this country. 221 00:12:44.360 --> 00:12:47.639 When you have, when you have over sixty percent of 222 00:12:47.679 --> 00:12:53.120 the population with really no or negative net worth, you 223 00:12:53.240 --> 00:12:58.559 can't have a viable nation. So try try now pursuing 224 00:12:58.600 --> 00:13:01.559 a policy that bails out Street and screws Main Street. 225 00:13:02.080 --> 00:13:03.759 See what happens. 226 00:13:04.720 --> 00:13:06.120 It ain't gonna be pretty, is it? 227 00:13:06.440 --> 00:13:06.519 No? 228 00:13:07.679 --> 00:13:12.440 So gold silver, It appears certainly for silver we're on 229 00:13:12.480 --> 00:13:16.519 the verge of a major breakout and things are not 230 00:13:16.600 --> 00:13:20.360 looking good for those silver shorts, are they. No. Now 231 00:13:20.360 --> 00:13:21.559 I've I've i have. 232 00:13:23.200 --> 00:13:28.000 So I took a nice position in platinum several months ago, 233 00:13:28.200 --> 00:13:30.159 bit more gold for a very long time too. So 234 00:13:30.240 --> 00:13:34.320 my proxy for the the bit so the precious metal 235 00:13:34.399 --> 00:13:38.120 is proxies that I use are gold and platinum, but 236 00:13:38.320 --> 00:13:41.399 silver too is you I'm not going to argue against silver, 237 00:13:41.840 --> 00:13:43.879 but you should. You have to get your your hands 238 00:13:43.879 --> 00:13:46.639 on some of this. And there's a there's a bull 239 00:13:46.679 --> 00:13:49.799 market happening in platinum. You know, for decades and decades 240 00:13:49.840 --> 00:13:53.240 on end, platinum was more expensive than gold. 241 00:13:53.240 --> 00:13:54.360 It's a it's. 242 00:13:54.240 --> 00:13:58.639 A rarer, more more rare metal, it's a more precious metal. 243 00:13:59.399 --> 00:14:02.840 It has some industrial components to it as well, and 244 00:14:02.879 --> 00:14:05.639 that flip that has flipped. So I would not only 245 00:14:05.679 --> 00:14:08.399 own gold, I would definitely own some platinum here because 246 00:14:08.519 --> 00:14:11.200 there's only one thing that's going to happen. There's only 247 00:14:11.240 --> 00:14:14.639 one thing that I could be assured to occur, and 248 00:14:14.639 --> 00:14:17.799 that stackflation like we've never before imagined. We're going to 249 00:14:17.840 --> 00:14:21.000 have another recession. Business cycle hasn't been repealed. We're going 250 00:14:21.039 --> 00:14:23.480 to have a credit crisis. The playbook is going to 251 00:14:23.519 --> 00:14:25.720 be deployed because it's worked all that every time in 252 00:14:25.759 --> 00:14:28.519 the past. What's the Pavlovian response from the Fed and 253 00:14:28.559 --> 00:14:33.759 Treasury borrow print spend or it was automatic stabilizers that 254 00:14:33.840 --> 00:14:35.600 kick in are going to send a deficit not to 255 00:14:35.960 --> 00:14:38.919 you know, the deficit was two hundred billion in prior 256 00:14:38.960 --> 00:14:41.000 to the global financial crisis. Then it went to you know, 257 00:14:41.440 --> 00:14:45.120 the trillion trillion now it's now it's two trillion. In 258 00:14:45.159 --> 00:14:48.000 the party times man, in the good times with full 259 00:14:48.039 --> 00:14:53.759 employment and record a stock market, it's two trillion. So 260 00:14:53.879 --> 00:14:57.720 when the automatic stabilizers kick in, the unemployment benefits kick in, 261 00:14:58.200 --> 00:15:00.679 this deficit is going to go between from from two 262 00:15:01.840 --> 00:15:06.000 to four to six trillion per ADAM. So that means 263 00:15:06.000 --> 00:15:11.679 when four to six trillion, where's six trillion dollar annual deficit, 264 00:15:12.600 --> 00:15:14.679 And and that means the money is going to go 265 00:15:14.799 --> 00:15:17.080 directly to the people. It's not gonna be like it 266 00:15:17.080 --> 00:15:19.120 wasn't the global financial crisis where you just bail out 267 00:15:19.159 --> 00:15:23.840 Wall Street by taking the banks got their assets bailed 268 00:15:23.879 --> 00:15:26.519 out from the Fed. Now this is going to go 269 00:15:26.600 --> 00:15:28.840 right into the hands of the pockets of the people 270 00:15:29.960 --> 00:15:32.919 through these through the unemployment insurance that they're gonna get 271 00:15:33.759 --> 00:15:36.639 right and through the subsidies that they're gonna get from 272 00:15:36.679 --> 00:15:40.159 from the Fed, and the helicopter money coming from the Treasury. 273 00:15:40.440 --> 00:15:43.120 So we're gonna have inflation, not the way they measure it. 274 00:15:43.159 --> 00:15:46.519 Stop at nine, it's going to go to nineteen. Yeah, 275 00:15:46.799 --> 00:15:49.559 and that's you know, if you that's what you have 276 00:15:49.600 --> 00:15:51.559 to be prepared for, because if you're saying to yourself, 277 00:15:52.320 --> 00:15:54.879 you know, I think I'm gonna I think I'm going 278 00:15:54.919 --> 00:15:58.799 to retire, and five percent on a thirty year treasury 279 00:15:58.799 --> 00:16:03.200 bond sounds pretty pretty good because the first is only three. 280 00:16:03.639 --> 00:16:04.840 You know, that's wonderful. 281 00:16:06.519 --> 00:16:09.200 Uh, tell me how you feel about earning five percent 282 00:16:09.240 --> 00:16:10.320 when inflation is nineteen. 283 00:16:12.919 --> 00:16:17.279 So that's a that's an existential problem in and of itself, right. 284 00:16:17.559 --> 00:16:22.440 Garry inflation core inflation rose to two point nine percent 285 00:16:23.320 --> 00:16:26.639 year over year coreation, wrote, I mean, then the morons 286 00:16:27.759 --> 00:16:31.960 that speak on mainstream financial media when the when the 287 00:16:32.000 --> 00:16:33.840 inflation report came out, they're. 288 00:16:33.639 --> 00:16:36.360 Like better than expected because. 289 00:16:36.080 --> 00:16:39.000 The month over month was a little bit better the core. 290 00:16:39.080 --> 00:16:43.159 But here the core rate of inflation increased. At the 291 00:16:43.279 --> 00:16:46.120 end of the form reading was two point seven or 292 00:16:46.159 --> 00:16:48.919 two point six, it jumped to two point nine core 293 00:16:49.000 --> 00:16:52.960 inflation year over year. That's that is that is a 294 00:16:53.000 --> 00:16:58.120 disastrous conversation to have him. Inflation on the core level 295 00:16:58.240 --> 00:17:00.879 is spiking, and I want to have a scenario where 296 00:17:00.879 --> 00:17:03.840 I'm firing the central bank so I can put a 297 00:17:03.960 --> 00:17:08.039 what I would call an obsequious sicko fan, a puppet 298 00:17:08.319 --> 00:17:11.000 of the president, to put rates at one percent. 299 00:17:12.079 --> 00:17:14.839 Yeah, what could possibly get wrong here? 300 00:17:14.839 --> 00:17:16.559 What happened to that stuff? What would happened to the 301 00:17:16.599 --> 00:17:19.640 housing market? Let me hear here's the scenario. The scenario 302 00:17:19.680 --> 00:17:23.000 scenario is this some so April April two thousand or 303 00:17:23.039 --> 00:17:27.039 May twenty twenty six comes, Powell is shoved out the door, 304 00:17:27.400 --> 00:17:30.319 an obsequious sick ephan, a puppet of the president, comes in. 305 00:17:30.559 --> 00:17:33.759 He cuts rates to one percent. And what what happens 306 00:17:33.839 --> 00:17:37.279 when the long end of the bond market interest rates 307 00:17:37.279 --> 00:17:41.200 go ballistic? I mean, if that can control the overnight 308 00:17:41.240 --> 00:17:44.319 interbank lending rate, and the money markets will will trade 309 00:17:44.319 --> 00:17:47.319 in sympathy with that. But let's say, unless they assent 310 00:17:47.359 --> 00:17:49.880 to buy every single treasury bond issued, like the Bank 311 00:17:49.920 --> 00:17:53.240 of Japan does, we're gonna have a huge problem with 312 00:17:53.319 --> 00:17:56.279 the interest rates. And if they do buy everything, we're 313 00:17:56.279 --> 00:17:57.880 gonna have a bigger problem with inflation. 314 00:17:59.200 --> 00:18:03.319 M h yeah, it sounds like we got problems on 315 00:18:03.359 --> 00:18:05.200 the way here. Huh. 316 00:18:05.519 --> 00:18:10.559 Well, I mean, listen, what when you when you abrogate 317 00:18:10.599 --> 00:18:12.599 free markets. When you say, you know, the free market 318 00:18:12.640 --> 00:18:16.039 doesn't have to function. We could just nineteen eighty seven, 319 00:18:16.519 --> 00:18:18.839 just print some money. Greenspan says, we'll just print some money. 320 00:18:18.880 --> 00:18:21.039 We have, we have a tool, we have a technology. 321 00:18:21.640 --> 00:18:24.559 We don't need to Why would we Why would we 322 00:18:24.640 --> 00:18:28.000 make money peg to something like gold? 323 00:18:28.240 --> 00:18:29.119 Why would we do that? 324 00:18:29.599 --> 00:18:33.759 Well, because mine supply of gold is limited, and you 325 00:18:33.839 --> 00:18:37.400 have something real and tangible that's backing your currency. But 326 00:18:37.440 --> 00:18:39.039 then they came up with the idea we could just 327 00:18:39.119 --> 00:18:43.960 we could just live in faeryland. We could just back 328 00:18:44.000 --> 00:18:47.319 our currency with nothing. We'll back it with the taxing 329 00:18:47.440 --> 00:18:51.839 authority of the US Treasury and the American military complex. 330 00:18:51.880 --> 00:18:55.920 That's what will Yeah, and then the dollars, you know, crashes. 331 00:18:56.279 --> 00:18:59.279 You know, go look at what the dollar has done 332 00:18:59.319 --> 00:19:00.400 since nineteen thirteen. 333 00:19:00.400 --> 00:19:01.440 It's purchasing power. 334 00:19:01.720 --> 00:19:03.680 And then those people have the nerve to tell you 335 00:19:03.720 --> 00:19:07.240 that they're they're they're they're in charge of protecting the 336 00:19:07.240 --> 00:19:13.640 purchasing power of the of the currency. That's a comedy routine, Kerry, 337 00:19:13.920 --> 00:19:14.480 it's a joke. 338 00:19:14.559 --> 00:19:19.000 Yeah, that is a comedy routine. And you know it's 339 00:19:19.039 --> 00:19:23.160 that old uh, that old saying. Will Rogers said, every 340 00:19:23.160 --> 00:19:26.559 time Congress makes a joke, it becomes a law, and 341 00:19:26.640 --> 00:19:28.799 every time they make a law, it's a joke. 342 00:19:29.440 --> 00:19:32.960 Right Gary, let me just I have I had this 343 00:19:33.039 --> 00:19:35.240 written down. I want to make sure when I talk 344 00:19:35.279 --> 00:19:39.799 about credit bubbles, total non financial US debt as a 345 00:19:39.839 --> 00:19:43.160 percentage of GDP is higher today than at the start 346 00:19:43.200 --> 00:19:46.359 of the global financial crisis and the start of the 347 00:19:46.480 --> 00:19:50.680 Nasdaq crash in two thousand. So current ratio is two 348 00:19:50.720 --> 00:19:55.000 one hundred and fifty seven percent of GDP total non 349 00:19:55.039 --> 00:19:59.000 financial debt. In two thousand and seven, before the stocks 350 00:19:59.039 --> 00:20:00.799 lost fifty percent of their value, the S and B, 351 00:20:01.480 --> 00:20:05.279 it was two hundred and thirty four percent. And in 352 00:20:05.279 --> 00:20:07.960 two thousand that great recession where the NASDAK lost eight 353 00:20:08.039 --> 00:20:10.559 percent of its value, it was one hundred and eighty 354 00:20:10.640 --> 00:20:12.960 nine percent. And the current ratio is two hundred and 355 00:20:13.039 --> 00:20:18.480 fifty seven percent. That's your credit bubble. That's your credit bubble. 356 00:20:20.640 --> 00:20:23.160 Man. So there's no way out of this. 357 00:20:24.440 --> 00:20:26.039 There isn't any easy way out of it. I mean, 358 00:20:26.039 --> 00:20:28.119 they're gonna try to hyperinflate their way out of it. 359 00:20:28.200 --> 00:20:30.880 But since we haven't adjustable rate mortgage as a as 360 00:20:30.880 --> 00:20:34.960 A as our you know, everybody said, hey, Janet Yellen, 361 00:20:35.400 --> 00:20:37.920 why don't you know when interest rates were like aero 362 00:20:37.920 --> 00:20:40.119 point three on the ten year note, why don't you 363 00:20:40.240 --> 00:20:43.079 like float some thirty year dead out there and finance 364 00:20:43.119 --> 00:20:45.200 it or maybe even issue a fifty year bond. I 365 00:20:45.200 --> 00:20:47.799 guess the wasn't any appetite for that, But at least 366 00:20:47.799 --> 00:20:50.960 they should have really loaded up on that lawn kerry. 367 00:20:51.000 --> 00:20:53.599 If they're gonna, if they're gonna, if Wall Street's gonna 368 00:20:53.720 --> 00:20:56.240 supply you with a ten year note that's yielding a 369 00:20:56.279 --> 00:20:59.319 third of one percent, wouldn't you want to lock in 370 00:20:59.400 --> 00:21:02.839 those that that's a pretty good rate, right right? Well, 371 00:21:02.839 --> 00:21:05.599 guess what they said, Now we're just gonna do T bills. 372 00:21:05.720 --> 00:21:08.839 We're gonna do T bills and chill. Well that's now 373 00:21:08.880 --> 00:21:13.079 you have to roll over those tea bills every single year. Yeah, 374 00:21:13.119 --> 00:21:16.799 and that's what you have. So if if if you 375 00:21:16.880 --> 00:21:20.000 really want to know the truth as to why President 376 00:21:20.000 --> 00:21:24.440 Trump wants that interest rate artificially suppressed even further lower, 377 00:21:24.799 --> 00:21:26.799 is because it would really bring down the interest on 378 00:21:26.839 --> 00:21:32.599 the debt. Yeah, with no no negative ramifications with housing 379 00:21:32.920 --> 00:21:37.039 or real estate or or or the equity market. 380 00:21:39.960 --> 00:21:45.359 So it's that simple, huh, yeah. So it's it's all 381 00:21:45.400 --> 00:21:46.440 about rates. 382 00:21:47.319 --> 00:21:49.240 It's all about interest on the debt, which is over 383 00:21:49.279 --> 00:21:50.359 a trillion dollars already. 384 00:21:50.480 --> 00:21:51.559 Yeah, gotcha. 385 00:21:52.079 --> 00:21:54.119 Do you see how you see how well doge work? 386 00:21:54.240 --> 00:21:54.400 Right? 387 00:21:54.440 --> 00:21:57.680 The Doge roar into town and they really slashed the 388 00:21:57.720 --> 00:22:01.559 government slashed everything down. I mean, we're all we're good now, right. 389 00:22:01.599 --> 00:22:03.960 I think they decided to cut one hundred and sixty 390 00:22:04.039 --> 00:22:05.160 billion dollars. 391 00:22:05.440 --> 00:22:09.440 Yeah, for I was still cutting in theory. Yeah, I 392 00:22:09.440 --> 00:22:10.200 don't know what they cut. 393 00:22:10.279 --> 00:22:12.880 Well, those have been run out of town faster than 394 00:22:12.920 --> 00:22:15.119 the shrve has been run out of town. And they 395 00:22:15.119 --> 00:22:17.200 should be cutting a trillion dollars per We need to 396 00:22:17.240 --> 00:22:19.119 cut a trillion dollars per andum to get to that 397 00:22:19.160 --> 00:22:23.039 magical Scott Besson, you know, three percent. But guess what, 398 00:22:23.200 --> 00:22:25.839 we decided to cut one hundred and sixty billion, So 399 00:22:25.880 --> 00:22:28.079 we're a little bit short. It is about eight hundred 400 00:22:28.079 --> 00:22:28.920 and forty billion a year. 401 00:22:29.440 --> 00:22:33.960