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Speaker 1: So they've ratcheted up these rates. And you know, obviously

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we saw you know, our inflation go from like nine

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point one to three point zero in June of twenty three,

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so that was about a year ago that we saw

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these rates come way way way down. So the Fed

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basically thought that they were going to be you know,

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able to just you know set back. They went from

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nine to three, so going to two is not going

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to be difficult, and ultimately we've stayed rage bound.

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Speaker 2: Here.

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Speaker 3: You are listening to Carrie Let's's Financial Survival Network, where

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

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

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Survival Network now more than ever. Go to Financial Survivalnetwork

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dot com and get your free newsletter and gift. Financial

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Survival Network now more than ever.

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Speaker 2: And welcome. You are listening to and watching the Financial

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Survival Network. I'm your host, Carrie Lutz. Hey, guess what

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the Fed didn't cut rates? What is wrong with the

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world here? How can this be? Is this a tragedy

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of biblical proportions? Is this as bad? Is the flooding

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currently going on in China? Well, David Strazuski's with us now, David,

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I'm cressfallen, and yet the market goes up.

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Speaker 1: What is going on here, Well, the you know, the

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Fed has sort of got this idea in mind that

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they reached what they call a terminal rate, so they've

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they've ratcheted up these rates. And you know, obviously we

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saw you know, our inflation go from like nine point

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one to three point zero in June of twenty three,

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so that was about a year ago that we saw

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these rates come way way way down. So the Fed

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basically thought that they were going to be you know,

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able to just you know, set back. They went from

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nine to three, so going to two is not going

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to be difficult. And ultimately we've stayed rage bound here,

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you know, somewhere between three to three point point nine

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about an average about three point three in these numbers.

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And so what's going on in the market right now, Well, hey,

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you know what the market wants to rally. We've seen pullbacks,

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We've seen you know, the bulls and the bears kind

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of do their back and forth right now. And you

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know it's easy to to to see that, you know,

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whether it's political or financial commentators, we can we can

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all say both positive and negative things about where we

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are currently right now, and so I personally believe that

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a lot of this data is deteriorating quickly. But you know,

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July is the best month historically for the market. Uh,

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and it looks like today is no exception to that.

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Speaker 2: It's pretty pretty amazing. I mean, just like, well, it

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looks like this bump that the market god is quickly fading.

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But inflation, you know, it ain't going away.

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Speaker 1: No, no, it's not going away.

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Speaker 4: You're right.

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Speaker 1: So, you know, we've we've had inflation that that's been

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above you know, three and not below for thirteen months.

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In fact, I think it's thirty eight months that we've

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had inflation higher than three percent in general. So so

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I don't see inflation going away. In fact, if you

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think back to Milton Friedman, which I know that you're

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a student of as well, you know, he would tell

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you that, you know, printing is literally the cause of inflation.

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Inflation is caught by central banks printing. And so this

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is the tax of least resistance. And so it is

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a tax. It's a tax on the world, it's a

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tax on the American consumer. We're inflating our dollar right now.

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And so you know, basically we haven't seen inflation moving

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over a year. We have had all these false narratives

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as far as you know, hey, the thread's going to

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be cutting any day now. I mean last July it

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was supposed to be cutting. Well, now we got the pause.

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So it's been a year since everything's been paused, and

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you know, and now we're looking for this rate cut.

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But one thing to understand as well is that historically

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when rate cuts occur, that's actually when the rec sessions happen.

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Is just following that. So if we even get rate cuts,

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it's not like a really great sign, because that means

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that things have deteriorated in a way that are not

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you know, exactly peachy and wonderful and great for the economy,

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at least as far as the middle class is concerned.

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Speaker 2: Yeah. Yeah, well, you know, when rates start coming down,

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that's when everything hits the fan. Hey, Actually, the rates now,

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even though they don't look good because we've had nearly

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twenty years of declining, interest rates are kind of normalized.

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You know, five percent T bills, right, I mean, that's

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what you want, that's the historic interest rate and the

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fact is that over the past ten years we've had

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these you know, since the Great Recession of eight nine,

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we've had these sub normal rates, and they were heading

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into the Great Recession. So what would happen if they

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cut rates before there was a recession? David, Well, what.

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Speaker 1: You're going to see is inflate, get even deeper rooted

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into our economy, and it's going to cause things to

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just really you know, inflate. The stock market's going to

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go up. And by the way, the stock market is

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actually not a true barometer of what's going on in

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the economy. It just happens to be a barometer of

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economic health. You know, I personally believe that our economies

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should be judged by how well the middle class is

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doing or not doing. And in that case, we're a

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big and challenging spot. You know, if you've cut interest

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rates right now a quarter percent, does that lower the

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mortgage interest rates in a meaningful way that people are

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going to get back out and start buying things. Not

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a chance. In fact, we're seeing inventories build right now.

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And with interest rate level that we got to your point,

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we had these low interest rates for about fifteen years

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and then now they got ratcheted up at the fastest

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pace that we've ever experienced here, at least in the

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United States, and so that's significant. Change has flipped the

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entire market, and the world runs on credit US dollar credit,

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and so this effects and impacts everything. I mean, we

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were talking a little bit before this. You know, the

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impacts on China right now are massive, Japan massive. There's

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a lot of change that's taking place all over the

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earth right now as a.

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Speaker 2: Result of this.

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Speaker 1: But you know, I don't think that the FED is

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going to be able to get these down in a

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meaningful way, you know, just because we saw things trend

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a little bit better right now. They're going to need

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at least two months worth of data or two different

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times that they sit down trending in the positive direction

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or lower than wherever they are right now, and if

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they're going to see anything. So I don't expect anything

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even in September, even though I know that that's like

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a guarantee right now according to Wall Street, you're not

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going to see it happen unless there's a major crisis.

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And then I think that they're going to turn on

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the printing press, and that's basically their only option.

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Speaker 2: Hey, And I'm just surprised that they must think the

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election is is such a lost cause that they're not

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even bothering to monkey with the rates. Right.

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Speaker 1: Well, you know, it's an interesting thing. The you know,

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the FED can do a lot of things. I believe

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that they're very partisan. Actually, you know where they say, hey,

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we don't comment on political things. Well, it's the politicians

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can't lean on the FED and say lower rates so

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I get elected, But the FED should say and I

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believe it would be negligence to not say, hey, Congress,

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this print and spend stuff that you're doing. This is

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the cause of inflation, all the raises that we're doing.

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You're doing the counterintuitive thing. You're making this worse for

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the people that you quote unquote represent. And so one

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of the things I'd like to be talking to people

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about right now is I like to say, you know,

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elections definitely matter, and it doesn't matter what side of

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the aisle that you're on.

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Speaker 4: Right now.

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Speaker 1: You believe that this is one of the most important

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elections in the United States history, and I believe that

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that's true. The thing, though, that I want to point

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out is that elections matter a lot less when we

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have the right risk diversified approach to our investment strategy.

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When we have the right strategy approach to this rate

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changing environment as we're moving from more maybe more of

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a growth situation with a values a type of an economy,

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maybe individual stocks versus ets. Like, there's a lot of

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different strategies that we can employ. And then the third

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thing would be tax diversification strategies. And I really think

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this is something that is not being discussed right now

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very much. And you know, if we continue to print

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like this, what's going to happen with taxes. We're going

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to have to raise taxes in order to continue to

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pay for everything, including you know deficits now that are

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in excess of a trillion dollars every one hundred days.

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So we're blowing our budget by a trillion dollars every

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one hundred days today. And this is just in an

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unsustainable way, trending backwards. So elections matter, they don't matter

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as much when you get risk diversified strategy versus by

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tax to versus.

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Speaker 2: I couldn't agree with you more. In the meantime, President

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Trump is out there. First, he promised the waiters and

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waitresses and bartenders, no tax on their tips, right, that's

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inflationary today. Just heard that he's promising all the people

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getting uh you know, government checks, social Security, no tax

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on them. I mean there's going to be left to

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pay taxes here.

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Speaker 1: Yeah, I mean perhaps that's a that's a that's an

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appeal to sort of like that that mid and lower.

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Speaker 4: Mid Hansah, maybe a little tangerrating doesn't doesn't sound to

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me specifically like a bribe like the you know, the

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the college education stuff that the Supreme Court has been

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saying that they're not going to be doing it right now.

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Speaker 1: So, uh, you know, I don't know. There's a lot

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of going on, but these election years tend to have

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a lot of promises. We'll see what ultimately gets to

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live it. But ultimately, our economy does need to grow

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and we we we have to be able to figure

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out as as as a nation and who leads the world,

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how are we going to lead forward? And so I

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do think it's going to come down to supply side economics.

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Speaker 2: Well, you know, the problem is when Trump makes these promises,

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he's actually a politician who keeps his promises. That's true.

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What is he going to do? He's got to eviscerate

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the federal government literally. I mean, look, do we need

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to FED buying up mortgages now? Do we need Fanny

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Freddy and the whole apparatus artificially supporting real estate?

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Speaker 3: You know?

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Speaker 2: Yeah, if we got rid of them back in two

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thousand and eight nine, really structurally reorganized the entire financial sector,

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we wouldn't be in a situation now, would we.

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Speaker 3: No?

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Speaker 1: And honestly, we continue to get ourselves into deeper places

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when we don't address the problems that got us there,

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you know, like when the banks are needing bailouts and

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they're the ones that actually led us to these broken places,

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no one goes to jail. And oh, by the way,

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personally believed and can see that we're going to see

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another banking crisis and it's just going to continue to

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unfold right now. I think we're in the second half

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of this, just starting nowt FED just told FGSC told

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us we got sixty three banks that are insolvent right now.

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All hundreds or a thousands, yeah exactly, are just right

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behind that. So, uh, you know, the I think the

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system needs reform. Hopefully the national debate and conversation can

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happen as opposed to just by executive order doing everything

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like we've seen with the border here in the last

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few years, et cetera. So you know, this is this

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is this is where real conversations with real adults need

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to be happening. And I just wish and pray and

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hope that we as a nation can can get to

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the place of trying to come up with some solutions

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as opposed to just pointing out problems, throwing stones and uh,

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you know, going to our political corner, you know, blue,

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no matter who or red, tell them dead.

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Speaker 2: Yeah. Well, you know, it's like it's got to stop.

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And financial fiscal sanity has got reassert itself because we

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can't go on this way unsustainable. David, just tell us

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where do we find you? How do we connect with

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you on the web?

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Speaker 1: Yeah, so website is my SPG for Sound Planning Group

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dot com. I got a number of things that are

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coming out here, courses, got a book that's been a

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long time coming. It's getting out here, hey pretty soon.

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Carrie Riding Bulls and Taming Bears. Investing for Retirement in

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the twenty first century Fair.

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Speaker 2: It can't wait, Yes, Sarry, all right, Hey, it's got

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a question for David myself kl at Carrie Leuts. That's

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the email address. We'll get you an answer and to

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get to David's site. The link is in the show

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notes to this interview on Financial Survival Network dot com.

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While you're there, sign up for your free newsletter. David

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always a pleasure. Thanks for coming by.

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Speaker 1: Hey, Pleasures Mine Gary, look forward to Dog with Jon.

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Speaker 3: Thanks for listening to Carrie Letz's Financial Survival Network. Your

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solution to today's trying times For the go to Financial

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Survivalnetwork dot com. Financial Survival Network now more than ever