Speaker 1: And that is that the quiet eight hundred pound gorilla
in a room is thirty one trillion dollars thirty two
trillion dollars of debt. At some point that becomes instrumutable
in our lifetime, and that will just kill the US
treasure market, which will kill inflation, and which will drive
up inflation and so forth and so on.
Speaker 2: You're listening to Carrie Leutz's Financial Survival Network, where you
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Speaker 3: And welcome.
Speaker 4: You are listening to and watching the Financial Survival Network.
I'm your host, Carrie Letz, and today we've got a
returning guest, Elliott Collen and from my home state of
New York and Elliott's financial expert. Elliott. We have this
election all right. You're in the People's Republic of California.
Now you're watching the place literally burn to the ground.
Very disturbing, and we've got a change of administrations coming.
But the overall economy they're trying to tell us, is wonderful,
everything's coming up roses. If you're an average person on
the street, you know better than that. Yeah, if you're
in the upper ten percent of income earners, not as bad.
But inflation out of control. They say it's coming in
control or under control. But again, you know, you go
to the supermarket and you scratch your head and say, man,
this stuff is still getting more expensive every time I go.
So economic reality versus political reality, where are we?
Speaker 1: Well, Well, first of all, carry thank you so much
for having me on. It's great to be here. You're
at Florida. I'm in northern California, and you're right, we're
on fire in southern California, and we should talk about
that and how that's going to affect the economy of California,
because that's actually really important subject for the western half
of the United States because it will effect at least
a third of the United States the fires in California,
and we just had an election, and that's going to
affect everybody and all of us. So let's talk about
what happened here first, if we could, and that is
that you and I both know with consumers that there's
no such thing as three percent inflation or three and
a half or whatever they think there is. Because I
shop and I cook, and I buy wine, and you
do the same thing or whatever they like to drink,
everything is up significantly. Every dinner is up. I go
out to dinners all the time because I write about high,
good quality food. There's nothing even close to what I
paid two years ago for dinner. There's nothing even close
to wine what I pay two years ago. I think
the best example of that is one of my favorite
wineries is Pine Ridge up in Napa.
Speaker 3: I i'ven't been there, yeah, yeah.
Speaker 1: And my favorite one there. I actually have a vine
named after me at pine Ridge.
Speaker 4: No any Yeah, they made a great chardonnay. Yeah, really
liked the place. Beautiful, beautiful, little smaller winery when I
was there.
Speaker 1: It's all by treasuries, not as small as it once
was now treasure once and they have their their top
of the line wine is fortys f r T A
s then trying to do a commercial for Pine Ridge,
but I've been buying that since that came out, and
when I started buying that twenty years ago, it was
eighty five dollars a bottle, which was the very high
end of my budget twenty five years ago for red wine,
and today that's two eighty five to three twenty five.
And I was in there not too long ago, as
they donated to our charity. They're very, very generous people.
And I said, I want to really ask you. The
question when I started buying was eighty five. It's four x.
Can you tell me this wine is four times better
than what it was twenty years ago? You can't? And
he said, no, it's probably exactly the same. Our costs
have gone up, but anything over now eighty to one
hundred dollars, it's now based on what the wine maker
wants to sell it for what can he get for it.
And that's kind of what's going on with eggs and
with bread. And you know, I'm shocked that I'm paying,
you know, five and a half dollars for a dozen eggs.
It's Safeway in California, and it's the numbers.
Speaker 4: Go to health Whole Foods if you really want to
be shocked. I paid seven dollars for cage free, free
range organic eggs, and you know it's three bucks a
couple of years ago.
Speaker 1: Yeah, And we could argue with her that's a cage
free and organic are good moves for you. I'm not
sure that that's another subject when you gets somebody on
from that industry. But everything is up. So as a consumer,
we know it costs more than ever to do everything.
Filling up my car is still really expensive. I mean
that probably will come down a little bit. Plastics, paper,
coffee super expensive. My electric bill is up about fifty
percent over the last three years in California and now
going to go up even more now with the fires.
And so we voted with a wallet. You've got a
new president coming in on the twentieth of January, and
there are a lot of things that are going to
happen short term and long term, some for the right
reasons and the good and some that could have negative consequences,
and the both political sense and from the economic side,
which you and I live at economic side, we have
to live with what is the fallout of politics and
the economy for the federal level or the world calls
macro and how does that affect our micro level and
the stockwater.
Speaker 4: Yeah, so Trump talks about bringing prices down by increasing
energy production. But you know, Milton Friedman said, God almost
sixty seventy years ago. Inflation is always first and almost
a monetary phenomena, and we're running these, you know, multi
trillion dollar deficits. We're printing the difference, and the only
thing that's really keeping the country afloat is the perception
of the safe haven and money flowing in from the
rest of the world, which is even in worse shape.
Speaker 3: Than we are.
Speaker 4: So I always like to say the United States economy
is the is the best looking house in Baltimore.
Speaker 1: Well, let's call the best looking horse in the glue factory.
Speaker 3: How's that best? The least dirty shirt in the laundry?
Speaker 4: Right?
Speaker 3: All that?
Speaker 1: All that, so, let let me go back for a moment,
because you really bring up some good points that a
lot of people don't understand, Kerry, and that is that
the quiet eight hundred pound gorilla in a room is
thirty one trillion dollars thirty two trillion dollars of debt.
At some point that becomes insturmountable in our lifetime, and
that will just kill the US treasure market, which will
kill inflation, and which will rive up inflation and so
forth and so on. I'm hoping that the appointing of
a couple of you know, tycoons to give ideas to
cut government will be the first step in the right direction.
I'm hoping everybody's hoping that these two gentlemen that are
going to make recommendations for Congress, and Congress is going
to show some fortitude and body parts and try to
begin to rein in that budget. And there are some
budget hawks out there, and we've got to get our
acted in order. And the last time we had one
year of balanced budget was when Bill Clinton was president,
and that's his third year, and I.
Speaker 3: Was with fake.
Speaker 4: That was fake because they were spending the Social Security
surplus and you know, that's just the eating the seed
corn basically.
Speaker 1: So we got to stop that. Well, get our financial
fiscal house and order. Now, if that happens, Carrie, and
we're actually able to make some steps in the right direction,
there's going to be a great reaction in the marketplace.
So that's the fiscal side of it. We've already had
two interest rate decreases in the last two quarters. We're
not going to get another one before the summer. Will
depend on how the economy goes, So it's not going
to be that the US treasuries went up. That's goofy.
They shouldn't go up, but they'll come back down, probably
by the end of the first quarter. So now the
fiscal side is kind of okay for the moment. What
you've got to have here is a lower cost of
product out there. And so what Trump did in his
first administration forgetting tariffs and all that is he was
able to drive drilling prices down for oil by really
pushing the heck out of domestic production. So if you
think I should invest in the oil industry, they really
had a crappy period. Those are not good investments because
you know, when oil goes to one hundred and twenty
dollars a barrel, the chevrons and the shells make a
lot of money. When it goes to thirty five dollars
a barrel and a one day action went to zero.
When it goes down that way, they don't make much money.
Speaker 3: One negative. So I have an idea for cutting costs.
Speaker 1: It would make money in that industry would be transportation
of oil because that would go up. And that's Warren
Buffett's dream because he controls the oil out of North Dakota.
He would love for more oil to come out of
North Dakota, no matter what he tells you on the
other side.
Speaker 4: Yeah, well, we might just get the pipeline put through
this time and actually built, which would break Buffett's monopoly.
But I have a way to cut government costs, get
rid of like a large portion of the workforce. The
next time, you know, when there's a snowstorm in DC,
they always say only essential workers.
Speaker 3: Have to come in. Everybody else can stay home.
Speaker 4: The next time they do that and the essential workers
show up, they should just fire everybody who stayed home,
and then we'd only have essential workers. Which like, if
you run a business, how many non essential workers.
Speaker 3: Do you have in your company? Elliott?
Speaker 1: But I know, you know, the government is working on
about seven percent. The buildings are about seven percent occupy. Wow,
and half of that is custodial staff. So it's really
two to three percent.
Speaker 3: That's all cleaning up.
Speaker 1: Works with feral government. I tell you that carry my
sign full disclosure. Works for the US government. It fed
a reserve. Uh. And he said, and they've never not
been all back at work.
Speaker 3: Yeah, well maybe that's a good thing, because there is.
Speaker 1: Your best.
Speaker 3: Yeah.
Speaker 4: Well, I'm being facetious, but not really, because you know,
we got this. It's a cost cutter is dream assuming
it can happen, and I think that forget about the
players involved. I feel like we've reached a tipping point.
We saw it with Reagan where he was going to
reinvent government and get rid of all the dead weight,
and that kind of failed. He cut taxes, but he
never was able to cut spending. This, I feel like
we're at an inflection point where it really will get done.
Because Trump doesn't have to care about reelection. He can
exercise his impoundment authority, which the Supreme Court during Nixon
said he didn't have any. But traditionally throughout history, the
president didn't have to spend money that Congress allocated.
Speaker 3: It's going to be a big fight, but I.
Speaker 4: Don't believe that any congressman will ever voluntarily cut spending
unless he's really cares about the future of the company,
the country and not his reelection.
Speaker 1: You're probably more right than wrong. I can't disagree with you.
Speaker 4: I mean, nobody gets credit for not spending money.
Speaker 3: You only get credit for.
Speaker 4: That new firehouse, the Interstate highway, especially in Florida that
gets widened, and you know, you only get credit for
projects you don't get credit for saving money and keeping
the government solvent. But maybe we've hit the point where
that's going to change.
Speaker 1: So let's put a couple out there, a couple more
gorillas out there that could really rain on everybody's parade.
And that is the macro political world, and that is
Iran and China and maybe Ukraine and Russia. Is that
expands a little bit. So if you've got Iran in there,
you've got they're exporting oil to China for below market.
If Israel decides to put an end to that and
says we're going to take out their facilities once and
for all because they're funding terrorism, then you could have
Iran respond and saying, then we're going to blow up
the port on Saudi Arabia and that will disrupt the
oil and then oil will not be thirty five dollars
a barrel in the future, it will be one hundred
and fifty dollars a barrel. So that would change everything.
And number two is China. China is a wildcard and
it wants to be the world power, the not one
of the world powers, but the only world power and
political power. And that is we're at war with China.
But lots of people don't want to recognize that right now,
much like we were at war with Japan and in
the late twenties and thirties, but we didn't recognize that.
And so those things could really rain on the parade
for all Americans because we actually go to war with
China or some proxy war with China and Russia, which
Ukraine is a proxy war with Russia for the United
States right now, then you're going to have the whole
conversation about how much money is the Pentagon sucking up?
And how do we restock and rebuild the American Armed Services?
People add product here that will drive the economy up, Well,
that'll drive that Money's gonna have to come from somewhere.
Speaker 4: Yeah, Well, those are the unknown unknowns as they call them.
We got an of known unknowns to keep us busy
for a while. So the question, Elliott is, how do
you like, how do you plan for a retirement? How
do you what do you invest in in this crazy world?
Do you just go for defense stocks? But he's going
to cut back on the military industrial complex supposedly. I
mean I'm at a bit of a loss.
Speaker 1: That's a good question. Where do you where do you
put your money. So if we if we take the
spectrum of aggressive and passive, let's start with the passive person.
We've had a couple of really bad years in a
bond market. I think this will be a really good
bullish year after the first quarter. I think the first
quarter continues to be a little bit of pain in
a corporate bond short and mid term market. Don't buy
anything long term, don't buy anything over five six years.
But I think, but if second quarter, I'd be buying there.
If I'm a conservative person, conservative investor, if I want
to be more aggressive, all right, I still like technology.
I get it, it's overvalued, it's still you cannot walk
away from the luster and the glitter of US technology.
You can't. I would not be buying healthcare at oil
right now. I think there's going to be pressure on
pricing in the healthcare market. I think the US defense
industry is a good place to earn above average returns,
not like technology is done, not like Nvidia up two
percent there, I think the US defense is a good
place to do it. I think oil move bits of oil,
so downstream but not upstream type of things. That's what
the wonky people talking about all the time, so moving
the oil I like a lot. I think the plastics
industry is a pretty decent place to go because they're
going to readact to oil coming down in price. That's
their and gas. Those are their top products in there
at that point. And I would stay away from the
electric car industry completely because I think it's it's not
going to be thriving at all for a while, or
green energy up there. So there aren't a lot of
places you can but I do like some. I still
continue to like some technology which has done really well
and they will build some ship plants and semiconductors have
underperformed for some time. Right now, I don't think they're outperformed.
But let's look at the market's do a pretty steady
climb there, Kerrie, Yeah, for a while, we've had twenty
percent back to back years in the SFP five hundred.
I don't think that's going to happen this year. I
think we finished the year higher than where we started it,
and we have two to three ten to twenty percent corrections.
Those are bare market corrections this year. This year, that's
a lot. That means that you're going to see some
sharp v's down and some sharp v's up in the
stock market this year, so super cautious. I would not
be selling it all when they go down, but we
keep money on the sidelines to buy when they go down.
When it goes down by more than ten or twelve,
I'd be buying some things that I think are going
to go up, and then when it goes if it
goes up by fifteen in a quick v and maybe
take some profits. It would be much more thinking short
term this year.
Speaker 4: Okay, what about precious metals, crypto's real estate.
Speaker 1: So let's do it in inverse order. Start with real estate.
There is an office building cold going on right now.
If that just because remains cold, that as interest rates
come down, mortgages are still at a historic height, we
see a stoic then real estate will begin to bounce back.
It does not really bounce back. If it doesn't bounce
back and the office mark turns into a flu instead
of a cold, then there will be some type of
pushback and correction in that. But let me also say
that for builders right now, right in the western third
of the country, starting in about June, you will not
be able to find a worker to help you build
anything because they will all be in southern California, paid
above average rates with federal and state money, and they're
gonna flock there like it's a gold rush for the
construction industry. That'll drive up lumber, elastic, furniture. I'll just
drive it right up and'll drive up wages because of
what happens, especially if it's state and federal money. That
will now be the backstop for everything down there. And
that's what they're talking about happening. So that could a
lot of the United States real estate because it will
thrive locally in southern California. Let me go to the
next one. Crypto you mentioned. Crypto is an anomaly. There
are people think it's going to two hundred thousand dollars
for bitcoin, and there are other people that say it's
going to thirty five thousand before it's going to onousand,
two hundred thousand. I like some crypto exposure. I don't
think it's a currency. It'll be interesting what Trump does
with that. I'm waiting for the new Treasury Secretary of
the Treasury come out and say we need a crypto
dollars and not a crypto bitcoin. We need something that's
a backstop here Uh. I think that's a game changer
for the crypto industry if that happens, because that will
move demand from the bitcoins of the world and move
them back to a crypto dollar, which would be great
for the US government to have a crypto dollar. That
weirdly would be a good thing to do, but it'd
be crappy for bitcoin to do that. If they pick
the winner, if they pick an exchange for to go on,
and they choose ethereum, boy, that's the big winner of
this whole conversation, Ethereum, because it will need to go
on in exchange, and Ethereum is an exchange up. But
they may pick somebody else. So I think that's an
iffy thing. I'm a watch and see guy on crypto
to see what happens with a crypto dollar if somebody
has a conversation about that. So so we turned to out,
really what was the third one?
Speaker 3: Uh, precious metals.
Speaker 1: Okay, So I think if you're gonna here's the downside
of precious metals. Carry Nobody ever sells them. Nobody ever
sells them. They buy them, don't sell them, they keep them.
I buy bullion myself. I'll never sell my billion yeah,
I'm going to give it to my children and they
can give it to their grandchildren. But I buy bullion
on a regular basis just so I have something to
give to my kids outside the estate. But I'll never
sell it.
Speaker 3: This is that is so true? All right?
Speaker 4: So does that mean it's not going up or it's
only going to go up? But what does it mean
that people doesn't unless.
Speaker 1: A bomb goes off in Taiwan or Saudi Arabia, be
excited about buying precious metals today. Now, that doesn't mean
I wouldn't be buying industrial metals like copper and palladium
and so forth. As coppers four dollars a pound. That's
ridiculously low. Especially with what's going to happen in southern California.
I think lumber is going to go through the roof.
There's a commodity, so lumber and copper I like in
the metals business and the industrial metals business. Lithium, I
tell you a lot of people like lithium because the batteries.
I think that there's a new technology coming that could
get rid of lithium that would actually be a good
thing for mankind. Say, the amagnia of Lithium is one
of the dirtiest things on Earth, and China controls it.
To have a battery that replaces lithium would be amazing.
Let me give you something that's a wild, out there
guess and if you tell me if it doesn't call true,
you can call me up on this one. I'll give
you my phone number and you can yell me. And
if I hold true, I want you to buy me
a steak dinner at Peter Luger's book club. That is that.
I think in the next three years or so, that
Tesla is sold to a consorium of other car makers
and Vetro capitalists, and Elon Musk is in the battery
business full time and out of the car business.
Speaker 4: I don't agree with you, but who knows, you know, not.
Speaker 1: The well for three years and tell me I from
right or wrong?
Speaker 4: Right? Yeah, there's just no impetus for him to sell.
You know, I don't see it. You think he'll be
like Andrew Carnegie. Basically, I think he's.
Speaker 1: Bored to death with in Tesla.
Speaker 4: Yeah, well, he's too busy thinking about Mars or what.
Speaker 1: I think he's a He's a very like a lot
of entrepreneurs who that although he's brilliant, I'm not going
to take anything away with you. Love him or hate him,
that doesn't matter. He's brilliant and he loves the shiny
new toy in the driveway.
Speaker 3: M hm.
Speaker 1: And and Tesla is no longer the shiny new toy.
Speaker 3: Huh.
Speaker 4: That's interesting. I never heard anybody say that one, So
I don't know, like you might be right. I'd never
say anybody's wrong, because you know, the graveyards are full
of people who who always knew they were right. But
you know, on the other hand, it's just the full
self driving thing.
Speaker 3: You know.
Speaker 4: Uh, I got a Tesla and you know, I can
see the light at the end of the tunnel now
and it's pretty amazing.
Speaker 1: You know, car owners love their car. I don't know.
I'm not gonna knock the car. I'm not a fan
of the pickup truck at all. Love their car. I
think that we'll go self driving. That's inevitable. Self driving trucks,
that's inevitable. Three million truck drivers are going to potentially
lose their jobs or be at risk of jobs. That's
a big thing. Nobodys gonna like that. And that's a union,
big union there, So nobody's gonna like that at all.
But I think that you're going to see some a
consortium come together of Nissan and the Chinese and and
maybe the Swedes and an American car company and say
let's take Tesla out.
Speaker 3: Where you're coming from.
Speaker 4: I just I just will agree to disagree with you
on that one, because he's going to own the world here,
you know, once that's self driving. It's like when I
first started doing it three years ago, I said, oh, well,
we're five to ten years away, you know, But every
time they come out with a new version, it's closer
and closer. And I'm at the point where I said,
you know, this thing could be six months away.
Speaker 3: It's very possible.
Speaker 1: It's all possible, and you're right, and I don't know.
But you know, this is one of those far up
progniership prognostications where maybe it works and maybe doesn't. And
if I'm wrong, I'm okay with being wrong. And if
I'm right, I get a couple like, how'd you think
about that? What was your criteria?
Speaker 3: So we'll see it goes all right?
Speaker 4: Well, hey, I think we covered a lot of ground here.
Just tell us how do we find you on the web. Elliott,
how do we connect with you? And you know where's
ways carry?
Speaker 1: You've got a great show here. It's Elliott E. L.
L IoT at Prosperity Financialgroup dot com. The website is
Prosperity Financialgroup dot com and my phone number at my
desk my direct line is nine U five three one
four eight five zero three or on West coast time
you're on East coast time. We talk to people. We
have clients at about forty of the fifty states, a
couple of countries. We'd love to have a conversation.
Speaker 4: All right, Hey, links in the show notes to this
interview on Financial Survival Network dot com. When you go there,
we just ask that you sign up for your free newsletter,
like over sixty five thousand of you out there have.
And if you have any questions for Elliott or myself,
shoot me an email kl at Carrie Lets dot com. Elliot,
We're going to be watching TESLA very closely. Thanks for
stopping by.
Speaker 1: Thank you. I can't wait to put you on our
program as well.
Speaker 2: Thanks for listening to Carrie Lets's Financial Survival Network.
Speaker 1: Your solution to today's.
Speaker 2: Trying to time for the latest go to Financial Survivalnetwork
dot com Financial Survival Network now more than ever,