1 00:00:00,040 --> 00:00:03,160 Speaker 1: There's eleven point four trillion dollars of corporate debt out there, 2 00:00:03,839 --> 00:00:06,960 and one point eight trillion about that trillion is junk 3 00:00:07,040 --> 00:00:10,640 at so you think about companies have to continuously tap 4 00:00:11,039 --> 00:00:14,359 the corporate bond market. This is one of those examples 5 00:00:14,400 --> 00:00:18,960 I throw you to show you how big this Hymenminsky 6 00:00:19,120 --> 00:00:20,160 moment has grown. 7 00:00:20,480 --> 00:00:24,280 Speaker 2: You are listening to Carrie Let's's Financial Survival Network, where 8 00:00:24,320 --> 00:00:27,719 you get valuable information you just can't find anywhere else 9 00:00:28,280 --> 00:00:31,879 to thrive in today's trying times. You need the Financial 10 00:00:31,960 --> 00:00:37,039 Survival Network now more than ever. Go to Financial Survivalnetwork 11 00:00:37,079 --> 00:00:40,840 dot com and get your free newsletter and gift. Financial 12 00:00:40,960 --> 00:00:44,320 Survival Network now more than. 13 00:00:44,159 --> 00:00:50,880 Speaker 3: Ever, and welcome. You are listening to and watching the 14 00:00:51,079 --> 00:00:54,679 Financial Survival Network. I'm your host, Carrie Let's. Hey, we 15 00:00:54,759 --> 00:00:59,799 are halfway through September. All hill is breaking loose on 16 00:01:00,079 --> 00:01:05,560 every front. We've got heard record high gold prices. Silver 17 00:01:05,920 --> 00:01:09,599 has awoken. I mean it's it was close to forty 18 00:01:09,599 --> 00:01:12,519 three dollars today. Now it's pulled back a little, but 19 00:01:13,640 --> 00:01:17,040 maybe it's time for a breather. But let's get the 20 00:01:17,079 --> 00:01:22,079 real truth here. From Michael Pentopentoport dot com. Michael is 21 00:01:22,120 --> 00:01:25,040 always great to have you back and glad you survived 22 00:01:25,079 --> 00:01:26,159 your pickleball game. 23 00:01:26,400 --> 00:01:28,159 Speaker 1: Well, yeah, I wish I could said his name for 24 00:01:28,200 --> 00:01:32,480 my golf game. That's its complete disaster, which is good 25 00:01:32,519 --> 00:01:35,760 news for my clients because they know I'm not spending 26 00:01:35,760 --> 00:01:37,359 a lot of time on the golf course. 27 00:01:37,799 --> 00:01:42,439 Speaker 3: Yeah, all right, be grateful for small favors. Right, Yeah, 28 00:01:42,480 --> 00:01:47,519 So breakout in the metal sector, even silver, maybe silver 29 00:01:47,640 --> 00:01:50,799 will start to lead. It's kind of half leading, half 30 00:01:50,840 --> 00:01:55,040 holding back. What's your take? What are the medals telling us, 31 00:01:55,159 --> 00:02:01,920 especially platinum breaking out from a decade to a decade basic, 32 00:02:02,519 --> 00:02:05,200 I guess a decade of depression for platinum. 33 00:02:07,040 --> 00:02:11,240 Speaker 1: Yeah. So I'm a big holder of gold, and I 34 00:02:11,240 --> 00:02:14,560 haven't own platinum for my entire investment history up until 35 00:02:14,560 --> 00:02:18,039 about four months ago. Three or four months ago, I 36 00:02:18,039 --> 00:02:21,120 saw it started breaking out. You know, platinum is more 37 00:02:21,240 --> 00:02:24,560 rare or rarer, I don't know which one is correct 38 00:02:24,840 --> 00:02:31,280 than gold. It's more precious too, more durable than gold, 39 00:02:31,280 --> 00:02:36,240 and it has a lot of other uses outside of jewelry. 40 00:02:36,319 --> 00:02:39,120 So I remember, I've been in this business for thirty 41 00:02:39,120 --> 00:02:42,879 five years. I remember when platinum was always more expensive 42 00:02:42,919 --> 00:02:44,840 than gold for decades, and then all of a sudden 43 00:02:44,840 --> 00:02:47,719 that switched, and I switched in a big way. So 44 00:02:47,800 --> 00:02:50,319 now platinum is not even half as valuable as gold, 45 00:02:50,319 --> 00:02:53,159 and I'm looking for some kind of mean reversion here. 46 00:02:54,120 --> 00:02:55,680 But I don't think gold's going to go down and 47 00:02:55,680 --> 00:02:57,840 platinum is going to go up. I think they're both 48 00:02:57,879 --> 00:02:59,280 going to go up. But platinum has a lot of 49 00:02:59,319 --> 00:03:01,759 catch up to do. And you know, you you're a 50 00:03:01,759 --> 00:03:04,360 big silver guy. I you know, I don't have to 51 00:03:04,400 --> 00:03:07,120 own every precious metal or semi precious metal, as silver 52 00:03:07,280 --> 00:03:09,599 is has a lot of industrial components to it too. 53 00:03:10,439 --> 00:03:12,919 I just I'm really in love with these monetary metals, 54 00:03:12,919 --> 00:03:16,840 and that's gold first and foremost served us very well 55 00:03:16,879 --> 00:03:17,719 for years. 56 00:03:17,439 --> 00:03:18,319 Speaker 3: And platinum. 57 00:03:18,759 --> 00:03:20,800 Speaker 1: But what do they I mean, he asked, A more 58 00:03:22,159 --> 00:03:26,479 interesting question is like what's going on these tittles? And 59 00:03:26,560 --> 00:03:29,199 you know what I mean? And as you asked that question, 60 00:03:29,240 --> 00:03:30,919 I don't know what your questions are before you ask 61 00:03:31,120 --> 00:03:33,199 but when you were asking that question, you know, you 62 00:03:33,199 --> 00:03:36,199 know what hit my mind was, like, you know, the 63 00:03:36,240 --> 00:03:39,000 Fed's balance sheet, which basically is a measure of how 64 00:03:39,039 --> 00:03:42,280 much how big is the monetary base or a big 65 00:03:42,319 --> 00:03:46,400 portion of the monetary basis, how much how many assets 66 00:03:46,439 --> 00:03:50,759 does the FED own Well, for many, many, many years 67 00:03:51,039 --> 00:03:53,280 of our existence. I'm sixty two. In a couple of 68 00:03:53,280 --> 00:03:56,560 weeks here the FED owned, you know, just a few 69 00:03:56,680 --> 00:04:01,520 hundred billion dollars in treasuries that was there, that was 70 00:04:01,560 --> 00:04:06,879 their balance sheet, and you know, since you know, I 71 00:04:06,879 --> 00:04:09,000 guess you could say since nineteen eighty seven. But really, 72 00:04:10,039 --> 00:04:12,400 really this madness started in the year two thousand. It 73 00:04:12,439 --> 00:04:14,280 was put on steroids in two thousand and eight, and 74 00:04:14,280 --> 00:04:18,199 then we had these buffoons that run our monetary regime 75 00:04:18,680 --> 00:04:23,279 of post COVID as balance sheet went to nine just 76 00:04:23,360 --> 00:04:29,279 over nine trillion with the t dollars, and we managed 77 00:04:29,319 --> 00:04:31,360 to get back down to I think a six point 78 00:04:31,399 --> 00:04:33,600 six trillion is what we are now. So we went 79 00:04:33,839 --> 00:04:36,600 to six point six trillion, which is a lot more 80 00:04:36,639 --> 00:04:40,199 than seven hundred billion dollars where it was just prior 81 00:04:40,279 --> 00:04:43,680 to the global financial crisis. And then we spent most of 82 00:04:43,720 --> 00:04:48,240 the time between two thousand and eight to twenty twenty two. 83 00:04:48,279 --> 00:04:50,199 We spent almost all of that time, not all of it, 84 00:04:50,279 --> 00:04:54,240 but most of that time where interest rates were near zero. 85 00:04:54,399 --> 00:04:58,079 They were you know, one percent or so, and in 86 00:04:58,120 --> 00:05:00,920 a real sense they were profoundly negative. So there's a 87 00:05:00,959 --> 00:05:04,480 long winded way of saying that we have thirty seven 88 00:05:04,480 --> 00:05:09,199 trillion dollar national debt. The corporate debt is enormous. Consumers 89 00:05:09,199 --> 00:05:12,959 are swamped in debt as well. We have so much debt, 90 00:05:13,240 --> 00:05:16,600 particularly at the state level. And I mean by state, 91 00:05:16,639 --> 00:05:19,839 I mean the national level, not just the federal level, 92 00:05:19,879 --> 00:05:22,160 not you know, the state, meaning the people who run 93 00:05:22,199 --> 00:05:28,879 this country. That we have no choice but to continue 94 00:05:29,040 --> 00:05:33,839 building that balance sheet to infinity, more and more lofty heights. 95 00:05:33,839 --> 00:05:38,079 And Carrie, what I find you ask me why gold 96 00:05:38,160 --> 00:05:41,639 is in this this primary bull market. It's just spectacular. 97 00:05:41,680 --> 00:05:46,319 I think it's just beginning. So you have to ask 98 00:05:46,360 --> 00:05:48,279 yourself which one of the two mandates, say is the 99 00:05:48,279 --> 00:05:50,920 Federals are really like the most. So they have this 100 00:05:51,000 --> 00:05:54,040 dual mandate, which is full employment and stable prices, well, 101 00:05:54,040 --> 00:05:56,800 stable collections. That's bs because their stable prices has been 102 00:05:56,800 --> 00:06:00,680 redefined as two percent inflation. Now two percent went out 103 00:06:00,680 --> 00:06:03,040 the window because they can't get anywhere near two percent. 104 00:06:03,199 --> 00:06:08,680 They've been above two percent for fifty two months and 105 00:06:09,240 --> 00:06:12,399 they're fifty percent above two percent because the inflation is 106 00:06:12,439 --> 00:06:14,680 running at three percent the way they measure it. Even 107 00:06:14,720 --> 00:06:18,360 the way they measure it inflation is target and what 108 00:06:18,399 --> 00:06:23,000 are they doing, Kerry. They're just about to slash interest rates, 109 00:06:23,160 --> 00:06:27,079 going on a rate cutting regime starting September seventeenth, which 110 00:06:27,199 --> 00:06:30,040 is just like you know, as in like tomorrow. Yeah, 111 00:06:30,199 --> 00:06:31,839 I don't know when this interview is coming out, but 112 00:06:32,160 --> 00:06:36,920 it's been recorded on the sixteenth. So that's what gold 113 00:06:36,959 --> 00:06:39,519 is selling. They have no idea they have. They being 114 00:06:39,519 --> 00:06:42,800 our government, our treasury, our central bank, has no way 115 00:06:42,800 --> 00:06:46,639 of providing a sustainable level of real interest rates without 116 00:06:46,680 --> 00:06:50,920 the economy falling apart. That's what they think. And they're 117 00:06:51,319 --> 00:06:54,199 about to slash interest rates again to negative territory in 118 00:06:54,240 --> 00:06:57,199 real term. So by yourself some precious metals if you haven't, 119 00:06:57,319 --> 00:06:59,439 if you haven't woken up, if you haven't ascended to 120 00:06:59,439 --> 00:07:03,079 that notion at wake up, all right. 121 00:07:03,120 --> 00:07:06,879 Speaker 3: So silver, I was just thinking about this, Michael. The 122 00:07:06,959 --> 00:07:12,199 majority of people on the planet don't remember when our 123 00:07:12,279 --> 00:07:17,120 coinage was ninety percent silver, Yeah, because that was the 124 00:07:17,240 --> 00:07:20,120 last time. Well they kept a little bit up until 125 00:07:20,120 --> 00:07:25,079 the seventies, but basically monetization of silver ended in nineteen 126 00:07:25,160 --> 00:07:29,240 sixty five, so we're looking at sixty years and the 127 00:07:29,279 --> 00:07:33,759 majority of the population, you know, just say I remember 128 00:07:33,839 --> 00:07:38,120 it because I was seven when My brother came into 129 00:07:38,160 --> 00:07:42,279 the kitchen and he dropped old silver coins and then 130 00:07:42,319 --> 00:07:46,120 he dropped the new copper clad junk slugs as they 131 00:07:46,160 --> 00:07:49,800 call them, and the sounds I still remember it to 132 00:07:49,800 --> 00:07:53,199 this day. We're only looking at sixty years ago. Michael, 133 00:07:53,800 --> 00:08:00,680 I remember that sound. The silver rang it chime, and 134 00:08:00,759 --> 00:08:04,879 the slugs were just they just smacked the floor. 135 00:08:05,360 --> 00:08:08,399 Speaker 1: Yeah, so that's when we had copper. Now I think 136 00:08:08,439 --> 00:08:12,519 they put in nickel and we are aluminum. I think 137 00:08:12,519 --> 00:08:15,639 it's I think they're making coins out of balsa would now. 138 00:08:16,240 --> 00:08:20,759 Speaker 3: Yeah, it could be. There could be ten. 139 00:08:21,240 --> 00:08:21,639 Speaker 1: I don't know. 140 00:08:21,680 --> 00:08:25,319 Speaker 3: Whatever is the cheapest the metallic commodity, and pretty soon 141 00:08:25,959 --> 00:08:28,839 even that will be too valuable to put into a coin. 142 00:08:29,199 --> 00:08:31,600 Speaker 1: Yeah, right, exactly exactly. So now that that's why they 143 00:08:31,639 --> 00:08:35,320 have this this technology, of course, which is a bitcoin 144 00:08:35,440 --> 00:08:38,799 or cryptocurrencies where you know, money doesn't even be backed 145 00:08:38,799 --> 00:08:42,320 by semi precious or base metals. For you about precious metals. 146 00:08:42,399 --> 00:08:48,080 It can be backed by numbers, you know, a barcode, 147 00:08:47,080 --> 00:08:52,840 a glorified QR code that's you know, electronic numbers and letters. 148 00:08:52,879 --> 00:08:56,519 Now could be it's hard money. Now, it's hard because 149 00:08:56,519 --> 00:08:59,519 there's a there's a there's only twenty one million units 150 00:08:59,519 --> 00:09:02,399 of bigcoin that can be printed, but there's an unlimited 151 00:09:02,480 --> 00:09:05,159 number of blockchains and cryptocurrency that can be created, So 152 00:09:05,200 --> 00:09:07,960 who cares? Who cares? So he take point, there are 153 00:09:08,279 --> 00:09:11,919 I don't care how many. You know, there's unlimited blockchains, 154 00:09:12,039 --> 00:09:17,679 unlimited cryptocurrencies. Therefore, so who cares about how many bitcoin 155 00:09:17,720 --> 00:09:21,200 there are? I don't care. It's all electronic numbers and letters. 156 00:09:21,320 --> 00:09:25,679 It's not gold, it's not a U, it's not a G. 157 00:09:27,240 --> 00:09:30,799 It's just garbage, that's what it is. And you know 158 00:09:30,879 --> 00:09:33,639 what else? I want to just a fully answer your question. 159 00:09:34,480 --> 00:09:38,600 There's also as we continue to debase our currencies literally 160 00:09:38,720 --> 00:09:44,480 to base our currencies, there's also this ENLiGHT this this 161 00:09:44,600 --> 00:09:48,919 watershed moment, this this period of enlightenment on behalf of 162 00:09:49,039 --> 00:09:53,120 foreign creditors. They are now as shoeing treasuries, and they 163 00:09:53,159 --> 00:09:57,519 are is shoeing dollars because we we are we capriciously 164 00:09:57,559 --> 00:10:05,440 and arbitrarily impose sanctions and confiscations on foreigners reserves. They say, okay, 165 00:10:05,519 --> 00:10:07,879 you know, all those the dollars that you own and 166 00:10:07,919 --> 00:10:10,159 all those treasures you own, what, well, you don't own 167 00:10:10,200 --> 00:10:15,759 them anymore. They're hours is a salient fear that that's 168 00:10:15,799 --> 00:10:21,120 that's happening, and so they might they might take it away. 169 00:10:21,240 --> 00:10:24,320 In nominal terms, they might just say, okay, you we 170 00:10:24,399 --> 00:10:26,200 owe you a trillion dollars, but now we only owe 171 00:10:26,240 --> 00:10:30,360 you five hundred billion. And by the way, that fire 172 00:10:30,440 --> 00:10:33,039 and billion dollars that you have, it's going to be 173 00:10:33,120 --> 00:10:35,440 handed to you in a depreciating dollar. So how's that. 174 00:10:35,440 --> 00:10:36,360 How's that for a morgan? 175 00:10:39,039 --> 00:10:41,399 Speaker 3: Yeah, I'm sorry, I don't mean to laugh because it's 176 00:10:41,440 --> 00:10:44,600 not really funny, but it's funny. But the way you 177 00:10:44,639 --> 00:10:47,120 put it, because like you'd be crazy to keep them, 178 00:10:47,639 --> 00:10:50,279 and yet we then have a gun to their head 179 00:10:50,320 --> 00:10:53,679 literally that if you don't take these dollars, maybe we'll 180 00:10:53,720 --> 00:10:55,080 just blow up your country. 181 00:10:57,000 --> 00:11:02,000 Speaker 1: Well, with investors with foreign creditors are doing is they're saying, hmm, 182 00:11:02,679 --> 00:11:05,200 if the US is going to cut their interest rates 183 00:11:05,240 --> 00:11:08,759 back to towards zero percent and they destroy their currency, 184 00:11:09,200 --> 00:11:12,440 and they might steal my currency reverse reserves for me 185 00:11:12,480 --> 00:11:16,480 at at a moment's notice, maybe I'll just take my 186 00:11:17,159 --> 00:11:22,080 surplus dollars for my great surplus and I'll just sell 187 00:11:22,120 --> 00:11:25,440 them and buy gold. That's what I'll do, and I'll 188 00:11:25,440 --> 00:11:27,840 hold the gold myself and you can't have it. 189 00:11:28,200 --> 00:11:30,279 Speaker 3: The barber is relic you're talking about. 190 00:11:30,399 --> 00:11:33,639 Speaker 1: Yes, yes, the barber is relic that central banks hate, 191 00:11:33,639 --> 00:11:36,639 but they continue to accumulate at a frenetic pace. Yes, 192 00:11:36,720 --> 00:11:41,639 I would think that that that gold. Yeah, that that 193 00:11:41,679 --> 00:11:48,960 which is virtually indestructible, extremely precious, extremely rare. That that 194 00:11:48,960 --> 00:11:52,279 that is why gold is money because it doesn't go anywhere, 195 00:11:52,399 --> 00:11:56,279 It lasts forever and is very rare, and it's so 196 00:11:56,559 --> 00:12:00,840 you know, divisible, and it's a medium exchange. All of checks, 197 00:12:00,879 --> 00:12:03,840 all the boxes, and the little green pieces of paper 198 00:12:03,879 --> 00:12:06,320 which probably going away in the future to be replaced 199 00:12:06,320 --> 00:12:11,879 by a central bank digital currency. Who the heck wants 200 00:12:11,960 --> 00:12:17,600 to store your savings in that? I mean literally, if 201 00:12:17,639 --> 00:12:20,600 I just told you that the central bank digital currency, 202 00:12:21,120 --> 00:12:23,200 let's just say we had one in two thousand and 203 00:12:23,320 --> 00:12:25,840 seven and the whole be Fed's balance, he was seven 204 00:12:25,879 --> 00:12:28,759 hundred billion, and a couple of you know years later, 205 00:12:28,919 --> 00:12:33,399 a few years later, it was nine trillion. They stole 206 00:12:33,639 --> 00:12:37,320 that much purchasing power of your base money. And that's 207 00:12:37,360 --> 00:12:40,879 why you know things like well, the housing market, transaction 208 00:12:41,039 --> 00:12:46,639 market is frozen well since twenty nineteen, a good a 209 00:12:46,679 --> 00:12:52,639 good sources Nick Jurley. He did some analysis of house 210 00:12:52,799 --> 00:12:56,240 hold whole prices in the last six years have gone 211 00:12:56,279 --> 00:12:59,360 up ninety two percent. Would you care to guess how 212 00:12:59,399 --> 00:13:02,320 much incomes caught up? That same epirs on. 213 00:13:02,600 --> 00:13:04,000 Speaker 3: I don't know what interested that. 214 00:13:04,399 --> 00:13:08,000 Speaker 1: Like twenty two like thatch when so people can't afford 215 00:13:08,039 --> 00:13:10,759 houses anymore. And you know when the FEG gets up 216 00:13:11,000 --> 00:13:13,679 and says, you know, everything we do is in the 217 00:13:13,720 --> 00:13:17,039 service of our people, in our American consumer and blah 218 00:13:17,080 --> 00:13:22,879 blah blah. Wait wait a second. You caused home prices, you, 219 00:13:22,960 --> 00:13:27,480 being the Federal Reserve and particularly you, mister Powell, caused 220 00:13:27,480 --> 00:13:32,879 home prices to surge ninety two percent. And guess what 221 00:13:33,279 --> 00:13:36,879 you were buying mortgage backed securities when home prices were 222 00:13:36,960 --> 00:13:40,559 up twenty percent back on back in this in March 223 00:13:41,039 --> 00:13:44,039 of twenty and twenty two, when there was no more 224 00:13:44,080 --> 00:13:47,120 COVID and there was no more crisis and the economy 225 00:13:47,120 --> 00:13:50,360 was doing fine, you considered it appropriate to still buy 226 00:13:50,799 --> 00:13:54,279 mortgage backed securities, which lowered the cost of mortgages to 227 00:13:54,320 --> 00:13:56,879 send home prices even further. So you know what, so 228 00:13:57,120 --> 00:14:00,080 Blackstone can buy all of the single family homes. 229 00:14:00,879 --> 00:14:01,919 Speaker 3: That's what they're done. 230 00:14:02,120 --> 00:14:05,840 Speaker 1: In a market now and now we see investors not 231 00:14:05,879 --> 00:14:09,759 just Blackstone. Now we see the investors own between twenty 232 00:14:09,799 --> 00:14:12,360 and thirty percent of the entire single family home market. 233 00:14:13,440 --> 00:14:16,000 You know, like you know, there's nobody in these houses 234 00:14:16,320 --> 00:14:18,919 or they're rented or they rent and you know what 235 00:14:19,039 --> 00:14:23,399 home prices are now rolling over and you have you 236 00:14:23,480 --> 00:14:27,159 have the bottom four quintiles of Americas have been destroyed, 237 00:14:27,159 --> 00:14:30,720 the purchasing powers have been wiped out, and the top 238 00:14:30,759 --> 00:14:34,440 quintiles keeping the thing afloat because stock prices are record 239 00:14:34,519 --> 00:14:38,080 highs and I mean record like crazy record. So the 240 00:14:38,200 --> 00:14:40,639 valuation of equities right now is two hundred and eighteen 241 00:14:40,679 --> 00:14:43,840 percent of GDP. That's something that's never been even imagined 242 00:14:44,000 --> 00:14:48,559 that then the mean metric there is like ninety carry, 243 00:14:48,600 --> 00:14:51,279 not two or eighteen. And you know we have all 244 00:14:51,320 --> 00:14:53,759 these target date funds and the four to one K plans. 245 00:14:53,840 --> 00:14:56,159 Mike Green talks about these passive flows all the time. 246 00:14:56,240 --> 00:15:00,200 These very right, very correct, and the passive flow are 247 00:15:00,200 --> 00:15:03,120 going to go into reverse because when this when we 248 00:15:03,159 --> 00:15:06,480 have a recession, you're going to have debt and deficits. 249 00:15:06,799 --> 00:15:08,200 First of all, the annual depths is going to go 250 00:15:08,240 --> 00:15:10,559 to around five trillion dollars the FED is going to 251 00:15:10,600 --> 00:15:13,840 be printing trillions of dollars per annum. The deficit is 252 00:15:13,879 --> 00:15:16,480 already over two trillion dollars this year, despite all the 253 00:15:16,559 --> 00:15:19,120 tariff revenue that we're supposedly getting. I don't know if 254 00:15:19,399 --> 00:15:23,080 if the revenue is fictitious or we're just spending more 255 00:15:23,080 --> 00:15:25,720 money than we ever did before. But why are we heaving? 256 00:15:26,120 --> 00:15:29,159 What are we having in in almost a record low 257 00:15:29,240 --> 00:15:33,360 unemployment four point three percent unemployment rate and supposedly not 258 00:15:33,440 --> 00:15:35,200 in a recession. How the heck do we have two 259 00:15:35,279 --> 00:15:39,320 trillion dollar plus deficits carry how that's structural? 260 00:15:39,440 --> 00:15:39,639 Speaker 3: Right? 261 00:15:41,080 --> 00:15:45,080 Speaker 1: Yeah? And yes, it's all about demographics, sure, absolutely. And 262 00:15:45,120 --> 00:15:47,960 of course what Trump really wants done is he wants 263 00:15:48,000 --> 00:15:51,120 to take the money market rate down so he doesn't 264 00:15:51,120 --> 00:15:53,200 have to pay over a trillion dollars an interest. And 265 00:15:53,200 --> 00:15:56,000 I think that's going to happen very quickly. But I 266 00:15:56,000 --> 00:15:58,480 will sell you this this caveat. This is buyer beware, 267 00:15:58,559 --> 00:16:02,159 caveat dempto if he low if Powell lowers rates by 268 00:16:02,159 --> 00:16:04,200 one hundred basis points, which I think he's going to do, 269 00:16:04,279 --> 00:16:06,679 and then very near future, and then he's replaced by 270 00:16:06,720 --> 00:16:13,320 a you know, obsequious sicofant in. So one who's really 271 00:16:13,360 --> 00:16:16,279 really really going to cut interest rates? What if the 272 00:16:16,320 --> 00:16:19,360 long end of the bond market doesn't say, uh uh, 273 00:16:19,440 --> 00:16:21,120 you know, I don't really like this, this is not 274 00:16:21,360 --> 00:16:23,759 this is not kosher. I am going to raise the 275 00:16:23,879 --> 00:16:26,720 long term borrowing costs, which is where by the way, 276 00:16:27,159 --> 00:16:32,720 that's where mortgages are priced there, corporate deet is float floated, 277 00:16:32,799 --> 00:16:37,559 that's where auto loans. So that's that's See. I am 278 00:16:37,639 --> 00:16:40,519 I manage money for a living, and I am long 279 00:16:40,600 --> 00:16:45,480 the stock market. But I am long with a an 280 00:16:45,559 --> 00:16:49,360 algorithm that tells me when the credit markets are starting 281 00:16:49,399 --> 00:16:52,000 to crater and fracture. And they will and when they do, 282 00:16:52,320 --> 00:16:56,919 they have to, they have to, and when they do, kerry. 283 00:16:56,919 --> 00:17:00,919 When they do, we're going to have a very expedition, 284 00:17:01,159 --> 00:17:06,359 expeditious and salient, trenchant decline in stock prices. It's gonna 285 00:17:06,359 --> 00:17:11,000 happen quickly. It's gonna be very sharp and acute. And 286 00:17:11,039 --> 00:17:12,680 I want no part of that. I want to I 287 00:17:12,720 --> 00:17:15,160 want to be out and short the market when the 288 00:17:15,160 --> 00:17:16,559 worst of that happens. 289 00:17:17,240 --> 00:17:20,519 Speaker 3: Yeah, so we're getting to that point. How much longer 290 00:17:20,559 --> 00:17:22,359 do you think it's gonna be Michael. 291 00:17:22,960 --> 00:17:24,920 Speaker 1: Well, I mean listen all I can tell you it's 292 00:17:24,960 --> 00:17:26,759 not happening right now. If you look at credits spreads, 293 00:17:26,839 --> 00:17:28,880 you look at financial conditions, they're as easy as they 294 00:17:28,880 --> 00:17:31,519 can possibly be. Financial conditions, credits reds are as tight 295 00:17:31,559 --> 00:17:32,519 as they can possibly be. 296 00:17:32,880 --> 00:17:36,519 Speaker 3: And that's sign right, that's a negative indicator. 297 00:17:37,039 --> 00:17:39,680 Speaker 1: Well it's it's well, it's it's negative long term, but 298 00:17:39,799 --> 00:17:42,160 in the short term it says it's a green light. 299 00:17:42,440 --> 00:17:44,680 I mean, if you know, if financial conditions have been 300 00:17:44,680 --> 00:17:47,920 this tight, financial conditions have been easy now for a 301 00:17:48,039 --> 00:17:50,200 very very long time, and they're up. You know, they're 302 00:17:50,319 --> 00:17:53,240 very very easy, and credits breads are the tightest I've 303 00:17:53,279 --> 00:17:55,960 ever seen them. So that tells you that it's like 304 00:17:56,039 --> 00:18:00,440 every there's no complacency abounds. So it's a green light. 305 00:18:00,480 --> 00:18:02,400 But you're speeding at one hundred miles an hour towards 306 00:18:02,400 --> 00:18:05,920 a brick wall. So when an unraval is gonna unravel 307 00:18:05,960 --> 00:18:07,920 quite quickly, and you have to be very nimble, and 308 00:18:07,920 --> 00:18:09,720 you have to have somebody managing your money who's not 309 00:18:09,720 --> 00:18:14,319 gonna say, well, it will always come back. Well, tell 310 00:18:14,359 --> 00:18:17,000 that to Chine, Tell that to the Shanghai chottocker change, 311 00:18:17,000 --> 00:18:20,480 sell that to the nick I Dao. I mean the 312 00:18:20,559 --> 00:18:23,680 nick I Dao was down for thirty five years. Thirty 313 00:18:23,720 --> 00:18:26,319 five years carry they were you know, they didn't see 314 00:18:26,319 --> 00:18:29,799 an all time high. So I think that, I think 315 00:18:29,839 --> 00:18:32,519 when this thing does break, there isn't a damn thing 316 00:18:32,559 --> 00:18:34,720 the Federal Reserve a Treasury can do about it, because 317 00:18:34,720 --> 00:18:38,279 it's when this breaks, it's gonna break because of inflation 318 00:18:39,000 --> 00:18:42,400 and insolvency concerns. So if you're gonna tell me the 319 00:18:42,440 --> 00:18:44,799 same playbook is going to be deployed that's worked in 320 00:18:44,839 --> 00:18:49,039 the past, meaning well, the Treasury is gonna borrow trillions 321 00:18:49,039 --> 00:18:50,960 and trillions of dollars and the Fed's gonna buy it all, 322 00:18:51,720 --> 00:18:55,559 and the bond market's gonna say, oh, I'm already you know, 323 00:18:55,640 --> 00:18:59,200 the bond vigilinanism already told you enough, and this is 324 00:18:59,519 --> 00:19:01,680 this is your I this is how you're gonna fix it. 325 00:19:02,240 --> 00:19:06,240 Speaker 3: Wait, I thought the bond vigilantes were an endangered species here. 326 00:19:06,319 --> 00:19:12,440 Speaker 1: Michael, Yeah, well that listen, there are slumbering volcano like 327 00:19:12,519 --> 00:19:16,440 Vesuvius and it's going to erupt and there's no way 328 00:19:16,680 --> 00:19:20,000 I have no doubt in my mind that's going to happen. 329 00:19:20,039 --> 00:19:22,720 Because you can't I mean, you can't tell you can't 330 00:19:22,720 --> 00:19:26,400 tell bond vigilantes. You can't tell people that they should. 331 00:19:26,480 --> 00:19:28,039 You know, like the ten year note is a bit 332 00:19:28,160 --> 00:19:31,200 just over four percent terry. If inflation goes back to 333 00:19:31,200 --> 00:19:34,240 where it was in COVID nine percent the way they 334 00:19:34,279 --> 00:19:37,480 measure it, seventeen to twenty. In reality, are you gonna 335 00:19:37,480 --> 00:19:39,759 buy how much? I mean how much? Ten? How many 336 00:19:39,799 --> 00:19:41,519 ten year notes? A you're gonna buy at four percent? 337 00:19:42,720 --> 00:19:44,400 I mean, you don't even have to be a vigilante. 338 00:19:44,400 --> 00:19:46,400 You just have to have a You just have to 339 00:19:46,440 --> 00:19:49,240 be a little smarter than a mentally challenged the MEBA. 340 00:19:50,119 --> 00:19:51,799 You're not gonna You're not gonna lock up your money 341 00:19:51,839 --> 00:19:54,720 for ten years four percent when inflation is at nine 342 00:19:56,680 --> 00:19:58,519 and you're gonna be you would if you're smart, you'll 343 00:19:58,559 --> 00:20:02,759 be shoring the bond market. Like me, I will shorten 344 00:20:02,759 --> 00:20:04,519 the bond market too. That's one of the arrows I 345 00:20:04,559 --> 00:20:07,960 have in my quipper. As a matter of fact, the 346 00:20:08,000 --> 00:20:11,720 full disclosure, I shorted the bond market yesterday. Now, I'm 347 00:20:11,720 --> 00:20:13,759 not saying the bond market is going to unravel. Now, 348 00:20:13,799 --> 00:20:16,400 I'm just saying, and I think you alluded to it. 349 00:20:16,839 --> 00:20:20,319 With credit spreads this type, and with financial conditions this easy, 350 00:20:21,440 --> 00:20:24,599 and with a ten year note at four percent, I 351 00:20:24,640 --> 00:20:26,400 shorted the long end of the bond markets just so 352 00:20:26,440 --> 00:20:30,440 you know how much lower is it going to go? 353 00:20:30,640 --> 00:20:33,000 I mean outside of a recession, and I'm not ruling 354 00:20:33,000 --> 00:20:35,599 that out, and I have a I have a lot 355 00:20:35,640 --> 00:20:37,200 of money in the in the belly of the curve 356 00:20:37,240 --> 00:20:40,640 and the shorter end, so I'll be fine, but outside 357 00:20:40,640 --> 00:20:44,680 of a recession. And let me just add this real quick. 358 00:20:44,720 --> 00:20:47,920 Remember I said a recession will cause debt the deficits 359 00:20:47,920 --> 00:20:51,200 to go up to five trillion dollars. That's the way 360 00:20:51,240 --> 00:20:52,279 it's the math works. 361 00:20:52,839 --> 00:20:54,839 Speaker 3: Yeah, for sure, So we're. 362 00:20:54,720 --> 00:20:57,160 Speaker 1: Already at two it's going to go between you know, 363 00:20:57,200 --> 00:21:00,119 four to six trillion dollars. There's no guarantee that the 364 00:21:00,160 --> 00:21:02,519 long end is going to do anything but go higher 365 00:21:02,519 --> 00:21:06,039 and yield a lower and price higher and yield. So 366 00:21:06,240 --> 00:21:08,519 I'm not exactly convinced even a recession would save the 367 00:21:08,559 --> 00:21:10,119 long end of the bond market, but let's just say 368 00:21:10,119 --> 00:21:12,839 it does. Outside of a recession, there's nothing that makes 369 00:21:12,839 --> 00:21:16,160 me think that these yields are going any lower. So 370 00:21:16,240 --> 00:21:17,400 now's your chance to do. 371 00:21:17,400 --> 00:21:23,119 Speaker 3: It, so limited time offer. So what's the asymmetric play 372 00:21:23,480 --> 00:21:28,799 for the inevitable here it's gold and silver obviously, But 373 00:21:29,240 --> 00:21:33,440 from a security standpoint, let's just say, you see it 374 00:21:33,440 --> 00:21:36,559 all going to hell in a handbasket, what's your final 375 00:21:37,400 --> 00:21:38,400 bet at the table. 376 00:21:39,519 --> 00:21:43,359 Speaker 1: So right now, let me answer that question. I'm saying, 377 00:21:43,400 --> 00:21:45,559 right now, we're not positioned for the four horsemen of 378 00:21:45,559 --> 00:21:49,359 the economic apocalypse to break out. And generally speaking, that's 379 00:21:49,799 --> 00:21:52,839 short term bonds, it's the US dollar, which is on 380 00:21:53,039 --> 00:21:57,960 thin ice. It's and it's shorting the market too. You 381 00:21:58,000 --> 00:21:59,640 have to you have to short the market, have some 382 00:21:59,680 --> 00:22:03,680 cash to Those are the four horsemen. So the dollar 383 00:22:03,759 --> 00:22:06,039 might not play a role in that because there might 384 00:22:06,039 --> 00:22:09,359 not be a huge unwinding of that dollar carry carry trade. 385 00:22:10,640 --> 00:22:12,920 So that's still a question. But you ask me what 386 00:22:13,000 --> 00:22:18,960 happens if we do enter this moment where the great, 387 00:22:19,440 --> 00:22:22,480 the great reconciliation of acid prices begins. You don't want 388 00:22:22,480 --> 00:22:24,880 any any part of equities. You have to be able 389 00:22:24,880 --> 00:22:28,200 to short equities. So I would short equities. I might 390 00:22:28,240 --> 00:22:30,880 be shorting the bond market, and I would hold short 391 00:22:30,960 --> 00:22:33,480 term treasuries. I wouldn't you know, obviously, I wouldn't go 392 00:22:33,519 --> 00:22:37,799 to the money market. I wouldn't be in t bills. 393 00:22:38,319 --> 00:22:40,039 But if you do, if you on between two and 394 00:22:40,079 --> 00:22:42,319 seven years, you'll make a lot of money. I believe 395 00:22:43,359 --> 00:22:45,480 your trade that's the best place to hide. Or you 396 00:22:45,480 --> 00:22:49,039 could just you could just listen to your your salesperson, 397 00:22:49,599 --> 00:22:53,000 your use carpet salesperson, money management will just tell you, well, 398 00:22:53,200 --> 00:22:56,000 you know, don't worry, it'll it'll come back. You can't 399 00:22:56,000 --> 00:22:58,680 time the market, Yeah, as as the market is in 400 00:22:58,680 --> 00:23:02,599 full meltdown mount because mode. Because Gary, when you're at 401 00:23:02,920 --> 00:23:05,240 when you're at two hundred and eighteen percent total market 402 00:23:05,319 --> 00:23:08,599 cap equities to GDP, you're not going to just fall 403 00:23:08,640 --> 00:23:10,359 a little bit. I mean, we're not. We're This is 404 00:23:10,400 --> 00:23:14,279 not even even in two thousand and seven when the 405 00:23:14,319 --> 00:23:17,000 stock market lost, the SMB lost fifty percent, the home 406 00:23:17,039 --> 00:23:19,240 prices crashed thirty percent, And I'm not entirely sure they 407 00:23:19,240 --> 00:23:22,160 wouldn't do that again. In some markets, they are absolutely 408 00:23:22,160 --> 00:23:24,119 going to do that. They're on their way down there anyway. 409 00:23:24,960 --> 00:23:27,680 But the total market cap of equities to GDP back 410 00:23:27,680 --> 00:23:31,160 then was like one hundred and four percent. That's expensive. 411 00:23:32,359 --> 00:23:37,079 The market's still crash. And even in the Nasdaq bubble, 412 00:23:37,119 --> 00:23:40,920 when that's the ultimate bubble, it was one hundred and 413 00:23:40,920 --> 00:23:43,519 forty percent well, when you're at two hundred and eighteen, 414 00:23:44,319 --> 00:23:47,519 when this process starts, I mean, you're going to crash 415 00:23:48,119 --> 00:23:51,400 and crash hard like we've never seen before. So you 416 00:23:51,400 --> 00:23:54,759 couldn't even I think you very likely, possibly very high 417 00:23:54,839 --> 00:23:58,480 probability that you'll see circuit breakers trigger, you know, down 418 00:23:58,519 --> 00:24:01,880 seven percent, down thirteen percent, I mean you hold trading 419 00:24:02,359 --> 00:24:06,720 on the NYSC So that's what that's what happens when 420 00:24:06,720 --> 00:24:11,559 you have three concurrent bubbles that are existing concurrently. So 421 00:24:11,799 --> 00:24:16,960 just for the record, that is equities, real estate, and credit. 422 00:24:17,799 --> 00:24:20,079 Speaker 3: All right, So we're heading towards what they call a 423 00:24:20,200 --> 00:24:21,759 Minski moment right. 424 00:24:22,599 --> 00:24:25,000 Speaker 1: Exactly, there's one hundred and ten billion. There's one hundred 425 00:24:25,000 --> 00:24:28,480 and ten billion dollars worth of mortgagees that are seriously 426 00:24:28,519 --> 00:24:34,559 in delinquent right now, one hundred and ten billion dollars 427 00:24:34,960 --> 00:24:38,759 seriously delinquered, seriously delinqued. Credit card debt is the highest 428 00:24:38,839 --> 00:24:43,640 level in the past fourteen years, so the consume. See, 429 00:24:43,680 --> 00:24:46,319 people don't understand. So you look at household debt to 430 00:24:46,359 --> 00:24:50,920 GDP and it looks quiescent on that metric alone. But 431 00:24:51,440 --> 00:24:53,440 when you have to figure, you have to figure into 432 00:24:53,480 --> 00:24:57,519 that we have a record. I think it's eight is 433 00:24:57,599 --> 00:25:03,200 eighteen eighteen point four trulli dollars in consumer debt household 434 00:25:03,200 --> 00:25:05,319 debt until that's a record high, So it's not like 435 00:25:05,359 --> 00:25:08,480 it's we don't have any debt anymore as consumers. Eighteen 436 00:25:08,519 --> 00:25:11,319 point four trillion is a lot of debt to record high, 437 00:25:11,359 --> 00:25:13,119 but as you if you look at the ratio to 438 00:25:13,240 --> 00:25:16,039 GDP or too incomes, it's not so bad. But what 439 00:25:16,119 --> 00:25:18,359 people have to understand when they look at that metric 440 00:25:18,440 --> 00:25:23,400 in isolation is that the bottom four quintas have no cash. Well, 441 00:25:24,160 --> 00:25:28,519 they're living paycheck to paycheck, hand to mouth, so they 442 00:25:28,519 --> 00:25:30,960 don't have even though even though they don't have a 443 00:25:30,960 --> 00:25:34,200 lot of debt to income, their income has been wiped 444 00:25:34,200 --> 00:25:38,000 out because of inflation, so there isn't a lot of 445 00:25:38,000 --> 00:25:41,319 income left over to service the debt. That's what makes 446 00:25:41,359 --> 00:25:45,599 that ratio look quiescent, but in essence it's deadly. That 447 00:25:45,720 --> 00:25:48,440 eighteen point four trillion, that's what you have to concentry on. 448 00:25:49,680 --> 00:25:51,480 So there's a lot of deep debt and deep you 449 00:25:51,480 --> 00:25:54,240 know a lot of delinquencies and defaults in the pipeline 450 00:25:54,279 --> 00:25:58,799 that are coming. And I do think the labor market 451 00:25:58,880 --> 00:26:01,559 also is on this fret. There's no doubt about that, 452 00:26:02,359 --> 00:26:05,079 But it's mostly fracturing because we have no more immigration 453 00:26:05,119 --> 00:26:11,200 in this country, so the labor supply is nil. In fact, 454 00:26:11,240 --> 00:26:13,200 for the first time in the history of these United States, 455 00:26:15,200 --> 00:26:19,240 we have immigration as the negatives. So there's a net 456 00:26:19,279 --> 00:26:23,039 outflow of people who were not born in this country. 457 00:26:23,079 --> 00:26:26,160 They're here, but they weren't born here. There's a net 458 00:26:26,200 --> 00:26:28,759 outflow of those people for the first time history of 459 00:26:28,799 --> 00:26:29,440 the United States. 460 00:26:31,119 --> 00:26:35,279 Speaker 3: Wow. So what appears to be good on the surface 461 00:26:35,720 --> 00:26:39,920 not really so good. That has to really hurt housing too. 462 00:26:39,960 --> 00:26:42,720 If you get like five million people leave the country 463 00:26:43,359 --> 00:26:46,079 pretty much all at once, that's going to have an 464 00:26:46,079 --> 00:26:47,519 impact on housing, won't it. 465 00:26:49,119 --> 00:26:54,240 Speaker 1: If twenty to thirty percent of all homes are owned 466 00:26:54,279 --> 00:26:59,680 by investors, that's the statistic. I told you there's a 467 00:26:59,759 --> 00:27:04,240 lot out of homes inventory that's going to hit the 468 00:27:04,279 --> 00:27:06,279 market as soon as the home prices start falling on 469 00:27:06,319 --> 00:27:09,960 a national basis. I mean, it's one thing to say, 470 00:27:11,039 --> 00:27:13,640 you know, I own my home and I really don't 471 00:27:13,680 --> 00:27:15,200 want to sell, even though I might be a little 472 00:27:15,279 --> 00:27:18,279 underwater because I have to change my address and I 473 00:27:18,279 --> 00:27:20,039 have to call the credit card companies, and I have 474 00:27:20,079 --> 00:27:22,400 to get a moving van and I have to argue 475 00:27:22,440 --> 00:27:24,400 my wife as to what thing I'm going to throw 476 00:27:24,440 --> 00:27:27,480 out and what I'm going to pack. It's a big headache, 477 00:27:28,119 --> 00:27:31,200 believe me. I know I've done it enough. But you 478 00:27:31,200 --> 00:27:35,279 know it isn't a big headache. Hey, hon, we own 479 00:27:35,400 --> 00:27:38,680 these four houses. We can only live in one of them. 480 00:27:39,000 --> 00:27:41,720 And you know what, they're all going down in value now. 481 00:27:42,079 --> 00:27:45,200 And it's just so expensive the upkeep and the insurance 482 00:27:46,119 --> 00:27:52,200 and the property taxes. And we're up one hundred percent 483 00:27:52,240 --> 00:27:56,039 on these houses. Why don't we sell? So I'll just 484 00:27:56,119 --> 00:27:57,839 call the agent and put them on the market. We 485 00:27:57,880 --> 00:28:02,720 don't have to do anything. That's called Layton's inventory, and 486 00:28:02,759 --> 00:28:05,519 that's that is going to there's a tsunami of that coming. 487 00:28:06,200 --> 00:28:09,400 Speaker 3: Wow. So you want to be owning one house now, 488 00:28:09,680 --> 00:28:12,960 if any you or perhaps sell your house and rent right. 489 00:28:13,960 --> 00:28:17,440 Speaker 1: You know, I'm one of those people who had a 490 00:28:19,720 --> 00:28:21,960 property that was not lived in. It was an investment home, 491 00:28:22,119 --> 00:28:24,960 an investment property. I took a bath on her and 492 00:28:25,000 --> 00:28:28,319 it was in New Jersey, held it for three years 493 00:28:28,319 --> 00:28:32,160 and I sold it for a loss. So it's just 494 00:28:32,200 --> 00:28:35,200 not I mean, if you it's just not worth it. No, 495 00:28:35,559 --> 00:28:38,000 they're worth a headache. So if home price to income 496 00:28:38,079 --> 00:28:44,119 ratios have never been this high. Now. Remember in two 497 00:28:44,119 --> 00:28:46,599 thousand and six, in the middle of the the they 498 00:28:46,640 --> 00:28:49,799 called the odds, you know whatever that means. But two 499 00:28:49,799 --> 00:28:53,680 thousand and six, seven eight, the middle of that decade, 500 00:28:54,240 --> 00:28:59,519 there was really no The real estate bubble was salient, 501 00:28:59,599 --> 00:29:03,319 but there were there's no equity bubble. We have two 502 00:29:03,559 --> 00:29:08,359 gi gargantuan bubbles existing at the same time. And in addition, 503 00:29:08,440 --> 00:29:11,759 we have things like that never existed before in credit 504 00:29:11,759 --> 00:29:15,880 market space, like private credit, you know, loans, the businesses 505 00:29:16,359 --> 00:29:18,440 that couldn't get a loan from the bank and they 506 00:29:18,440 --> 00:29:21,960 couldn't tap the corporate bond market, and there's like you know, 507 00:29:22,000 --> 00:29:24,200 I think there's like one point seven trillion dollars of 508 00:29:24,440 --> 00:29:30,440 that stuff out there, and I never existed before. FHA 509 00:29:30,599 --> 00:29:33,839 loans were like three billion dollars prior to the goal 510 00:29:33,920 --> 00:29:36,400 of financial crisis. Now they're like forty billion dollars. Talk 511 00:29:36,440 --> 00:29:38,440 about an increase of people that put three and a 512 00:29:38,480 --> 00:29:43,839 half percent down on the property. There's skyrocketing defaults there too, 513 00:29:43,920 --> 00:29:46,319 So this is this is a bubble. It's going to 514 00:29:46,400 --> 00:29:52,160 burst now. Am I again I managed money for a living, 515 00:29:52,200 --> 00:29:54,720 I wouldn't have a business if I was constantly saying 516 00:29:54,759 --> 00:29:58,240 that and shuring the market, I'm saying that the construct 517 00:29:58,799 --> 00:30:02,720 there's no debating this. The construct of the market is 518 00:30:02,759 --> 00:30:09,440 one that's predicated on acid bubbles, debt, money printing, and inflation. 519 00:30:10,279 --> 00:30:14,000 It's extremely fragile. That's the construct the that's the house 520 00:30:14,039 --> 00:30:19,960 that's built on sand. Now, when that condition breaks, that's 521 00:30:19,960 --> 00:30:22,119 when you have to make changes in the portfolio. But 522 00:30:22,119 --> 00:30:23,880 as of right now, I'm long and I'm enjoying it. 523 00:30:23,920 --> 00:30:27,279 I have plenty of precious metals. I recently bought energy, 524 00:30:27,559 --> 00:30:29,720 I shortened long end of the bond market. I'm making 525 00:30:29,759 --> 00:30:32,279 money for my clients. But the big money is going 526 00:30:32,359 --> 00:30:35,240 to come when this reconciliation of acid crisis begins. 527 00:30:35,880 --> 00:30:40,960 Speaker 3: So let's just talk about what exactly a Minski moment is, 528 00:30:41,440 --> 00:30:46,480 and I'll read you the AI definition from YouTube. A 529 00:30:46,559 --> 00:30:50,160 Minski moment is an economic concept describing the sudden and 530 00:30:50,319 --> 00:30:54,960 often catastrophic and to a period of market optimism, whereas 531 00:30:55,000 --> 00:30:59,039 speculative bubble berths due to increase debt and risky behavior. 532 00:30:59,400 --> 00:31:03,000 It's the point where stability becomes self destructive and a 533 00:31:03,039 --> 00:31:06,519 prolonged boom gives way to a free fall of plunging 534 00:31:06,920 --> 00:31:13,160 asset values and market sentiment. According to the financial instability 535 00:31:13,640 --> 00:31:17,519 hypothesis of Hymen Minsky. That's a seigmen to a t, 536 00:31:17,720 --> 00:31:18,359 doesn't it. 537 00:31:18,880 --> 00:31:20,799 Speaker 1: And Hymen who has had it down to a bat. 538 00:31:20,839 --> 00:31:23,519 You know, there's a there's eleven point four trillion dollars 539 00:31:23,519 --> 00:31:26,759 of corporate debt out there, and one point eight trillion 540 00:31:26,799 --> 00:31:30,160 about that trillion is junk det So you think about 541 00:31:30,519 --> 00:31:34,480 companies have to continuously tap the corporate bond market. This 542 00:31:34,559 --> 00:31:36,720 is one of those examples I throw at you to 543 00:31:36,759 --> 00:31:41,839 show you how big this Hyman Minsky moment has grown. 544 00:31:42,160 --> 00:31:44,759 The bubble has grown too, and when it bursts, like 545 00:31:44,839 --> 00:31:48,200 I said, it's going to be violent, not going to burst, 546 00:31:48,480 --> 00:31:49,920 you know, innocuously. 547 00:31:50,680 --> 00:31:54,480 Speaker 3: All right, Well, Michael, you're a breath of fresh air 548 00:31:54,680 --> 00:31:59,160 inspiration here. But if you're ready for these things, even 549 00:31:59,200 --> 00:32:02,160 if you know prof fit handsomely from it, you can 550 00:32:02,200 --> 00:32:06,400 at least protect yourself so you're not destroyed by it. Right. 551 00:32:06,880 --> 00:32:10,599 Speaker 1: You know what active management. It's been pillary, it's been 552 00:32:11,519 --> 00:32:14,880 excoriated in the past, and maybe even need active management 553 00:32:15,000 --> 00:32:22,200 in prior eras eras, but you need it now. You 554 00:32:22,279 --> 00:32:26,200 need to be able to move quickly and adroitly between 555 00:32:26,759 --> 00:32:32,880 periods of dist inflation, deflation and depression recession to what 556 00:32:32,920 --> 00:32:35,880 I what I see happening in the in the not 557 00:32:35,920 --> 00:32:40,960 too distant future, an era of acute and protracted stagflation 558 00:32:41,119 --> 00:32:44,240 like we've never before seen or suffered in this country's history. 559 00:32:44,319 --> 00:32:47,960 That's what I see happening. So we you know, and listen, 560 00:32:48,759 --> 00:32:51,000 you know if you don't, if you don't have immigration, 561 00:32:51,480 --> 00:32:53,960 And I'm all for closing the borders and knowing who's 562 00:32:53,960 --> 00:32:56,279 in this country. So don't get I'm not a political country. 563 00:32:56,319 --> 00:32:57,720 Speaker 3: You're not an open borders guy. 564 00:32:58,079 --> 00:33:00,119 Speaker 1: No, I'm not an open border but I'm saying the 565 00:33:00,160 --> 00:33:05,400 borders were wide open under Biden. Millions and millions per anom. 566 00:33:05,119 --> 00:33:08,000 Speaker 3: Coming millions supposedly, but nobody knows. 567 00:33:08,240 --> 00:33:11,319 Speaker 1: Yeah, millions of people coming into the labor force, and 568 00:33:11,359 --> 00:33:13,880 then the government doing most of the hiring. And you 569 00:33:14,000 --> 00:33:16,960 go from two hundred and three hundred thousand jobs a 570 00:33:16,960 --> 00:33:19,839 month to you know, twenty two thousand jobs a month. 571 00:33:20,039 --> 00:33:23,359 And that's a natural function of closing the border. But 572 00:33:23,440 --> 00:33:26,279 that's half of your input to GDP growth, and crashing 573 00:33:26,319 --> 00:33:29,680 acid prices aren't actually really good news for GDP growth either. 574 00:33:30,200 --> 00:33:34,720 So I envisioned a period where GDP growth crashes and 575 00:33:34,799 --> 00:33:37,920 acid prices absolutely plummet. So in the next ten years, 576 00:33:37,960 --> 00:33:40,839 it wouldn't surprise me if we ended up flat in 577 00:33:40,920 --> 00:33:45,039 nominal terms or thereabouts in ten years, with a period 578 00:33:45,079 --> 00:33:48,599 of time where in nominal terms the stock market goes 579 00:33:48,640 --> 00:33:51,960 down fifty percent, And if you can time that reasonably, well, 580 00:33:53,200 --> 00:33:55,920 you know, instead of waiting a decade to get even 581 00:33:56,319 --> 00:33:59,599 or more, you can actually have the capital to be 582 00:33:59,640 --> 00:34:03,240 deployed at the appropriate moment when they reliquify the banking 583 00:34:03,319 --> 00:34:05,559 system where you can actually enjoy that one hundred percent 584 00:34:06,640 --> 00:34:08,480 ride back to even remarkable. 585 00:34:08,960 --> 00:34:13,000 Speaker 3: All right, Well, that's something to definitely think about. You 586 00:34:13,119 --> 00:34:14,960 got to take a look in the mirror, decide your 587 00:34:15,039 --> 00:34:20,440 risk tolerance. Sometimes the biggest risk is not doing anything, 588 00:34:20,800 --> 00:34:22,320 and I think a lot of people are going to 589 00:34:22,400 --> 00:34:24,599 be stuck there. Michael. If you got any questions for 590 00:34:24,719 --> 00:34:29,119 Michael myself, shoot me an email klat Kerrie Lutz dot com. 591 00:34:29,239 --> 00:34:32,199 The link to Michael's site is in the show notes 592 00:34:32,199 --> 00:34:36,039 of this interview. And we're no longer doing a website. 593 00:34:36,039 --> 00:34:40,400 We're doing a substack. Honestly, websites just became too big 594 00:34:40,440 --> 00:34:43,440 a pain. The thing breaks all the time gets hacked. 595 00:34:44,079 --> 00:34:50,239 Substack I could write articles, produce videos, produce audios, and 596 00:34:50,719 --> 00:34:54,880 it manages my email list. Can't beat that. Michael, appreciate 597 00:34:54,960 --> 00:34:57,840 you coming on as always and we will definitely catch 598 00:34:57,920 --> 00:34:58,880 up with you next month. 599 00:34:59,159 --> 00:35:02,719 Speaker 2: Thank you, Gery, thanks for listening to Carrie Letz's Financial 600 00:35:02,800 --> 00:35:07,800 Survival Network, your solution to today's trying times. For the latest, 601 00:35:07,880 --> 00:35:12,719 go to Financial Survivalnetwork dot com. Financial Survival Network 602 00:35:13,039 --> 00:35:14,559 Speaker 1: Now more than ever,