Speaker 1: Once you start going down this road of printing money
and deflating the currency and you know, creating this inflationary process.
I mean, it's really really hard to back out of.
And until we stop spending, you know, we can lower
rates as much as possible. And I really think that
this is going to be a it's a band aid,
it's a short term cure for a long term problem.
And you know, it's what is it, short term pain,
you know, versus long term gain. And instead we've chosen,
you know, short term gain, and we're going to create
long term pain.
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Speaker 3: And welcome. You are listening to and watching the Financial
Survival Network. I'm your host, Kerry Lutz. Hey, who would
think mid September, surprise, surprise, the Fed cut rates Finally, finally,
they've only been promising for a year now fifty basis
points probably another one on the way well sidell is
with us now ed So shock, what do you think?
Speaker 1: No, no, I you know, originally I was saying, you know,
fifty basis points, and I kind of bought into well,
you know, they're not gonna telegraph it. They're not going
to be that overt and they'll probably only do twenty
five basis points. But once again, how they continue to
prove me wrong. You know, they telegraphed what six six
rate cuts in November and confirmed it in December last year,
and so this is the first one, and you know,
oh what a way to make a big splash. You know,
fifty basis points. I think now the federal funds rate
is four and three quarters to five percent. You know,
I think they're going to lower it another fifty to
seventy five basis points before your end.
Speaker 3: I think it's a mistake, that's what they're.
Speaker 1: Going to do.
Speaker 3: This is the last one before the election though, right, yep,
when's the next FED meeting. It's in November, so it's
after the election.
Speaker 1: This was a big one because you know, you know,
as a Pennsylvania I think Pennsylvania starts mailing ballots next week.
Speaker 3: So yeah, this was a big deal. Yeah, well, I
don't think Pennsylvanians are really they're going to yawn at
this one, right, not going to matter. If you didn't
manage to secure one of those eight hundred and eighteen
thousand imaginary jobs with imaginary pay and benefits and imaginary vacations,
all that good stuff, then you're kind of left out
in the cold, aren't you.
Speaker 1: Well yeah, but you know, so everyone's kind of focusing
on that eight hundred and eighteen thousand, but everyone's forgetting
about all the revisions downwards on top of it, you know,
every other month, So every two months, you know, when
they came out with the jobs glowing jobs reports, you know,
look how great everything, and then they would everything is,
and then they would revise it downward two months later,
and then the other eighteen hundred and eighteen thousand on
top of it. So, you know, I think last time
we talked, I used the phrase the tail of two cities,
you know, Wall Street versus Main Street, and then I, honestly, Carrie,
I really started thinking about it. You know, I've been saying,
you know, we're kind of in a rolling recession. But
I missed the boat. I completely missed it until a
couple of weeks ago and then realized the recession is
in the private sector. Okay, the public sector, government jobs,
there is no recession. I mean, that's where we just
added forty seven thousand new jobs at government jobs and
so you know that's those jobs that weren't created and
continue to be lost, you know, those are in the
private sector, and that's where all the pain those are
the pain points right now.
Speaker 3: Yeah. Well, hey, as far as the government is concerned,
the it's all the same, right, it's all one big
bucket and jobs are actually ops and uh we should
all be grateful.
Speaker 1: Yeah, yeah, just just happy and go along, you know,
go along to get along, you know. But I think
I think people are finally starting to wake up a
little bit, at least I at least I hope.
Speaker 3: So ezak, you think they're waking up? Really, I do too,
you know, I think with we not as fats as
you own one. Yeah. So, uh so where does this
leave us all here? You know?
Speaker 1: I I think, uh, we're going to continue to see
you know, another round of of q E quantitative easing,
and I think it's going to be honestly, you know,
quantitative easing Q e infinity. It's just it's just never
going to stop because you know, once you start going
down this road of printing money and deflating the currency
and you know, creating this inflationary process, I mean, it's
really really hard to back out of. And until we
stop spending, you know, we can lower rates as much
as possible. And I really think that this is going
to be a it's a band aid, it's a short
term cure for a long term problem. And you know,
it's what is it, short term pain, you know, versus
long term gain? And instead we've chosen you know, short
term gain, and we're going to create long term pain.
And I think we're going to see what we saw
on the seventies. You know, inflation is going to come
roaring back and then rates are going to go back up.
And you know, until we get leaders in d C,
actual leaders that that are really focused on their constituencies
and you know, American people, this is just going to
continue to happen and it's going to get worse before
it gets better.
Speaker 3: All right, So what's the for the individual investor? Should
you be buying bonds because they're going up? Right? Yeah?
Speaker 1: So not only the yields right are are still really
good right now. But you know, it's the the bonds
that has an inverse reaction to interest rates, either up
or down. So as rates go down, you know, the
appreciation of bonds is going to go up.
Speaker 3: And you know, if.
Speaker 1: If you go out to uh, you know, close to
ten years and you do a decent fixed income ladder portfolio,
you know, getting you know, six six and a half,
you know, uh, growth rates including yield on an annual basis,
I think is unbelievably doable, you know, especially as we
can continue to see money market rates go down.
Speaker 3: Yeah, so maybe last week the market's getting gyrating getting
slammed was the market's way of telling the Fed you
promised you better deliver. Yeah, oh absolutely that.
Speaker 1: I think that was the wake up call and said, hey,
you know what, we already have fifty bases points built
in and you know, I honestly I think the FEDS
should get out of the interest rate game and trying
to you know, control the economy using interest rates. You know,
I think what they need to do is just have
a sound you know, monetary policy. But you were that's
just never going to happen, at least not with this leadership,
not with Powell. You know, he's more concerned about his legacy,
you know, over the next couple of years. So yeah,
and that's really what it comes down to. They're just
looking at, you know, what's it going to look like
by the time I get out of here. And once
I get out of here, you know, then it's up
to the next person. And I you know, I'm not
so worried about.
Speaker 3: It, all right, So bonds Obviously, gold has been going up,
you know, you do realize, like, of course you realize
I'm talking to a financial professional, but the dollar has
been steadily sinking, right, and it was obvious that this
was going to happen. They put it off till the
last possible moment. Right now, we've got gold, as you
and I speak, all time high of twenty five eighty
five the ounce, So it's going to three thousand. It
looks pretty obvious for sure, there's got to be sold
that we have pulled back at some point. And then
the silver back up to thirty one bucks just about so.
And then when we look at the dollar, it's it's
right at one hundred, which historically it's not such a
low level. But compared to what it was trading at.
It's down you know, fifteen percent recently. Yeah, you know,
I mean it was this I think it was a
year ago. A year ago October it was you know,
one fifteen and and so yeah, you know, I've been
saying it's going to dip below one hundred, but you
know that it's it's going to be the continued devaluation
of the dollar, and I agree with you. I mean,
gold is going to hit three thousand sooner than expect.
I think earlier this week or maybe it was last
Friday gold was or or over the weekend, I can't remember,
when everything's kind of running together where gold was actually
over twenty six twenty six hundred. So you know, we're
just going to and that's.
Speaker 1: That's a telltale sign of you know, hard assets, people
investing in that as well as silver, and and you know,
protecting what they have. I think short term the market
is is going to do well, uh this year, going
in the next year. But you know, you really got
to keep an open eye as to what's going on
in the world around you because you know, when when
things really start going wrong, I think it's going to
go wrong, not at the drop of the hat, but
it could be like overnight or over week, you know,
very very quickly, and you know, you want to make
sure you know you're you're protected. You know you do
have those hard assets on hand, cash on hand and
other things because you know, work the the the debt
rate for consumers is up one hundred and twenty three percent.
Savings is normally average is about almost nine percent. I
think it's like eight point eight or eight point nine percent,
and it's down low three percent, which is recessionary by itself.
So you know, we've been hearing soft landing, soft landing,
don't worry about it. Everything's great, you know, rainbows and
puppy dogs, and you know, I think we're there and
I think it could get a little bit uglier before
it gets better. But the market's going to tell a
different story because as rates go down, the market's going
to do better. And and my fear is as rates
go down, people are going to spend more, get more
into debt, and that you know, that's going to create
an issue all the way across the board.
Speaker 3: Well, you know, they even if they don't go on
shopping sprees, they're going to be spending more because everything
is more expensive, right, and when you tell.
Speaker 1: The cure inflation, yeah, the nerd inflation carriers, it's we're
all good. Remember inflation is only at you know, a
two point five percent to show.
Speaker 3: Well, it sounds like whoever the next occupant of the
White House is going to be. Uh, there're going to
be some issues, aren't there?
Speaker 1: Yeah, you know there are, right, and you know either
candidate right now, you know both. And you know I'm
saying Harris because she was part of the Biden Harris campaign.
Everyone who over spent it. So so you know, we
need to make sure from the Speaker of the House
to the White House that everyone's on the same page
as far as getting this debt under control. And if
we don't, if we don't read this debt bubble, it's
going to pop all the way across the board, and
that's when it's going to really get ugly.
Speaker 3: All right, Well, thank you for your words of wisdom.
Speaker 1: Ed.
Speaker 3: Just tell us where we find you again, how we
connect with you on the web? Yeah?
Speaker 1: Absolutely, it's e g SI Financial dot com.
Speaker 3: E g SI Financial dot com And the link is
in the show notes of this interview on financial survival networks.
Dot com. When you're there, please sign up for free
newsletters like thirty over thirty thousand of you have done
already and a great info from a variety of sources.
And if you've got a question for Ed or myself,
you can always shoot me an email k l Atcarrie
Lutz dot com. Ed we'll talk to you next month,
and let's let's keep our fingers crossed. Man, maybe financial
alchemy isn't dead after all, and the FED will pull
a monetary rabbit out of the hat, although for some
reason maybe not. We can only hope.
Speaker 2: Thanks for listening to carry Letz's Financial Survival Network your
solution to today's trying times. For the latest, go to
Financial Survivalnetwork dot com. Financial Survival Network now more than ever,