Speaker 1: America is going to come out stronger. But in the
short term, this potential trade war as well as potential
deportations could not only hurt inflation, but also the labor market,
and we could start to hear this nasty word that
we talked about just a few years ago called stagflation,
and man and that happens, things could look a little
bit different.
Speaker 2: You were listening to Carrie Leutz's Financial Survival Network, where
you get valuable information you just can't find anywhere else
to thrive in today's trying times. You need the Financial
Survival Network now more than ever. Go to Financial Survivalnetwork
dot com and get your free newsletter and gift. Financial
Survival Network now more than ever.
Speaker 3: And welcome you are listening to and watching the Financial
Survival Network.
Speaker 4: I'm your host, Carrie Leutz.
Speaker 3: Well, who can believe we're just five weeks after the
election and the good news keeps coming in. We just
got the PPI numbers, and Dale Smothers is with us
now to help us make some sense of them. So
the CPI PPI both coming in higher than expected?
Speaker 4: What does that really mean?
Speaker 1: Hey, Gerry, a little bit higher than we were hoping,
But Honestly, this is not out of what I was expecting.
It's higher than what the experts were expecting. But I
do think that we will start to see inflation rearing
its ugly head once again. As you've heard me mentioned
many times on this show, I think that this could
be more of a balloon landing than an actual soft
landing that the FED is hoping for. We've got a
lot of headwind that we're facing here, Carrie, a lot
of headwind coming with the administration, and in my opinion,
I think it's something that needs to happen. America is
going to come out stronger. But in the short term,
this potential trade will or as well as potential deportations,
could not only hurt inflation, but also the labor market,
and we could start to hear this nasty word that
we talked about just a few years ago called stagflation,
and man, and that happens, things could look a little
bit different.
Speaker 3: Well, some would argue that we've already had stagflation for
the past several years.
Speaker 1: Very true, very true, and I would not argue against them.
You know, the numbers come in with these reports, Carrie.
You've heard me say this several times as well. They
come in. We trade on the news and we sleep
on the revision. You know, whether or not this one
gets revised higher than what we saw is one thing.
But you're going to have analysts who look at this
is a point two percent month over month rise in PPI,
and they're going to analyze this and then annualize that
point too and say, oh, that's right at our target.
But the reality is, if we look year over year,
we have seen a immediate surge. What did it come
in at three point four percent year over year in
PPI numbers? That is that is an almost unfathimable number
for us to then be cutting in. You know, that
number all together is not bad, but to say that
the Fed is going to continue to cut in spite
of that number, that would be shocking. And unfortunately, I
think that's what we're going to see.
Speaker 3: Yeah, well, Powell wants to keep his job right, right,
and he's going to have to do something to a comedy.
But what about DOGE and what about the push to
eliminate needless governmental functions? If they're only halfway successful and
they can knock off a trillion, that's going to make
a big difference.
Speaker 4: Isn't it.
Speaker 1: This is going to make a huge difference. And one
of the things that it's hard to quantify is the
amount of growth that we'll see. The spending will be cut,
Hopefully growth follows with tax cuts, growth follows our GDP
continues to grow. We've got a mess we've got to
clean up here, Carrie. As you're aware, we talked last
about how much we spend and our debt to GDP ratio.
It's off the charts. This Doge move is one that
is long overdue if you ask me, and I think
they've got the right people looking at these budgets. I
do think that there will be some people who are
all about cutting government spending until it affects them and
then the real trench warfare sets in. So we could
see a little bit of a line and a division
of sides once we see what Doge is going to do.
But the theory behind Doge is one that I would
support hands down.
Speaker 3: Yeah, And I mean people are making fun of it.
Maybe they're not taking it seriously, because if you were
alive when Ronald Reagan was president, they promised all these
initiatives and everything else.
Speaker 4: Do you think this one's going to succeed.
Speaker 1: I do when you talk about making fun of and
thinking it's not serious, it reminds me of a candidate
back what would that have been in twenty and fifteen
that announced his candidacy and eventually one because America is
sick and tired of being the bad end of a deal,
this trade war is going to help. It's going to
feel bad at the beginning. It is war. Unfortunately, no
one dies, but a lot of paychecks will be impacted,
and it won't go as far, perhaps for a period
of time, will come out the victor with that doze
is another one that I think is led by a
man who is headstrong and could care less what people
think of him.
Speaker 3: You think, yeah, I know, kid. So how much do
they have to cut? And what can they really cut?
If you can't cut Social Security and Medicare, although you
can cut the fraudulent and the improper payments, but if
that's off the table, that's the majority of the spending
in the economy, right sure.
Speaker 1: Sure, And when you look at the numbers, it begins
to it begins to get difficult to see where they're
going to cut trillions of dollars of spending. But you know,
it's very much like a drug and once once, once
you've had it, it can't get off of it. And
these politicians are are addicted to that spending. If you
think twenty years ago, if we could have done without it,
then surely we can get to the point where we
don't need it now. A lot of the government you
would think, you would think, and a lot of the
government spending is going to immediately impact people in ways
they never imagine. And again that's where that pushback is
going to come from. But if social security is not
on the table, which I am one hundred percent with
the clients that we work with, Carrie, you can imagine
social security is a big part of what we plan around.
I'm not a big advocate of touching social security. It
needs reform, it needs to probably be on the backs
of those who are say under the age of fifty,
and maybe it is means tested to a certain degree.
But if we get into cutting things, I think social
security should be off of the table. With that being said,
we know that we've got to be a strong country,
so our war budget should be off of the table
as well. Our defense is spending. But here's what I think,
go ahead carry.
Speaker 3: I don't know about that, because look, the half the
money that the Defense Department spends is probably wasted here right, This.
Speaker 1: Is where I was actually getting to that. I think
a lot of a lot of fluff is in the
defense spending budget. A lot of people have probably made
a whole lot of money carry, as you can imagine,
by charging four hundred times what a bolt should cost
or what a piece of scrap metal should cost. This
type of expense can be weeded out of the Defense
Department and we're still strong. You think about advancements like
technology enhancements in war and defense that could also help
a ton when it comes to staying a strong country,
keeping our border secure. But cutting some expenses here's a
big one. Though you asked me, what can we cut?
I think one of the things that we need to
stop doing is assisting countries who don't like us or
don't really need the assistance. This type of shipping money
overseas when we have people in North Carolina who are
still feeling the effects of the hurricane, I don't think
a single dollar should be sent to countries to fight
their battles until North Carolina and Florida looks as if
it never happened.
Speaker 3: Yeah, yeah, I couldn't agree with you more and so
so you know, but they're having the spending wordy to
the very end, isn't it.
Speaker 1: This is true, That's exactly right. And when the music stops,
I'm afraid that the market might not react favorably to
it either, you know, thinking of the PPI if the
thinks do this, if the Fed continues to cut, which
is again what they expect to do, I've even heard
talks that they're considering a cut in March as well,
already predicting that the market is buying that up. They're
already taking that into effect. And you know this very well, Kerrie.
They have already priced in December's price cut. So if
a price, if a rate cut, becomes a rate pause,
well now we see an immediate reaction in the market,
and that reaction sets people up who have been predicting
recession or been predicting a pullback. This is it, and
so it becomes a fulfilled prophecy that was self fulfilled
and it's all a house of cards if we're not careful.
Speaker 4: All right, So what is the investors supposed to do here?
Speaker 3: The market? The market's looking a little toppy right now.
It hasn't done much as of late. Do you think
that's going to be the.
Speaker 4: Future here or what? Yeah?
Speaker 1: I do think we'll see. We'll see this constant bounce
off of the support and restraint until eventually something breaks through.
Either we have this potential growth opportunity that we hope
comes from a Trump presidency, or we could see the
markets start to take a nose dive if inflation rears
its ugly head, and God forbid, the Fed has to
now start hiking rates once again to combat that side
of their dual mandate. What an investor should be doing
from our perspective, we deal with a lot of people
who are close to retirement, and here's where we have
to be. If we're close to retirement, losses hurt us
more than gains help us. In this environment, we have
to be conservative in our approach. I like buffered strategies
if we want to still participate in market upside but
have some downside protection. There are buffered ETFs that buy
packaged options for us that give us upside participation and
some downside protection along the way. I like those for
an individual who still wants to have equity exposure if
you're considering setting on the sidelines, though, you know, a
four and a half percent type of money market, it's
not a bad place to be to see how things
shake out. So a cash like position isn't terrible. Gold
is touchy right now. Gold, in my opinion, could be
a place that you could lose a lot of money,
or you could see a little bit of capital appreciation.
I don't expect it to grow much. I don't expect
gold stock to appreciate much, but we could see volatility
in gold, especially perhaps bitcoin. I know you're a big
fan of bitcoin. If bitcoin ever becomes an actual alternative
to gold, we could see people flooding out of gold
and into bitcoin, which would help the bitcoin and crypto investors.
But those who are looking for the security and stability
of gold, you're aware of this. Over the last couple
of months, we haven't felt that stability in the gold crisis.
Speaker 3: All right, So so interesting, interesting situation here. You got
a wonder of you know, this situation seems to be unsustainable, right.
Speaker 1: I hate to use that word, but it is. It's
certainly going to have to change in some capacity. Things
can't continue to go up and again if you're an
investor who is considering retirement anytime soon. The number one
rule of investing carry me and you both came up
with this. You bilo and you sell high. If you
are considering sales, now is the time when the music stops,
it could be too late. I like to think of
the game that we used to play as kids, Musical Chairs, Right.
Musical Chairs is that game where eventually chairs start disappearing
and the music stops, and you've got to find a seat.
I think more people have gotten involved in the game
recently than ever before because of how the market has
increased month after month after month, and like you said,
good news continues. But when more people get in than
there are seats and the music actually stops, for our investors,
we just want to make sure we're really close to
a seat and we're safe to play for the next
round of the game.
Speaker 4: So you don't think we're going to get tired of winning.
Speaker 1: Well, I don't think we get tired of winning internally,
but I do think that with one pull it could
be a house of cards.
Speaker 3: What is your opinion, could be a house of cards
or like you said, a balloon landing.
Speaker 1: Absolutely yeah, And in that analogy. The balloon landing is
what we think is going to be solved ends up
seeing the nose of the plane starts to rise. And
it's all about the inputs in the controls that you
put in there as to whether or not you land
safely or you crash all together. I don't yeah, I
don't have a faith in the bed.
Speaker 3: We could say it would be a partial parachute opening, right,
doesn't kill you, doesn't kill you, but you're not going
to land softly and bounce on your butt. You could
get injured in the process.
Speaker 1: Right, you might have some bumps bruises along the way, Yes, sir.
Speaker 3: All right, Hey, Dale, Just tell us where do we
find you on the internet. How do we connect with you?
Speaker 1: Yes, sir, so our firm Ardismother's Wealth Management. You can
find us at rdswealth dot com. You can catch our podcasts,
the Retirement Matters podcast on any podcast streaming service of
your choice, railba to our website, sign up for our newsletter,
or shoot us an email.
Speaker 4: All right, excellent.
Speaker 3: Hey, The link is in the show notes of this
interview on Financial Survival Network dot com. While you're there,
well asked that you sign up for your free newsletter,
like sixty other sixty thousand plus other FSN members have.
And I've got a question for Dale myself. Shoot me
an email kl atcarrielots dot com. Dale, We'll talk to
you in real soon. Thanks, talk soon. Thank you, Kery,
thanks for listening to Carrie Let's this Financial Survival Network
your solution to today's trying times.
Speaker 4: For the latest, go to.
Speaker 2: Financial Survivalnetwork dot com. Financial Survival Network now more than ever,