WEBVTT 1 00:00:00.160 --> 00:00:03.040 I find myself in a very peculiar position. I'm kind 2 00:00:03.040 --> 00:00:06.120 of in defending Jerome Powell, which I never thought I 3 00:00:06.160 --> 00:00:09.160 would do in my life, you know, carry for the 4 00:00:09.160 --> 00:00:13.800 life of me. I don't understand what the administration, who 5 00:00:13.839 --> 00:00:16.120 I support, is thinking when they say they want to 6 00:00:16.120 --> 00:00:19.239 fire Powell and cut interest rates to one percent. 7 00:00:19.480 --> 00:00:23.280 You are listening to Carrie Let's's Financial Survival Network, where 8 00:00:23.280 --> 00:00:26.719 you get valuable information you just can't find anywhere else 9 00:00:27.280 --> 00:00:30.879 to thrive in today's trying times. You need the Financial 10 00:00:30.960 --> 00:00:36.039 Survival Network now more than ever. Go to Financial Survivalnetwork 11 00:00:36.079 --> 00:00:39.799 dot com and get your free newsletter and gift. Financial 12 00:00:39.920 --> 00:00:43.679 Survival Network now more than ever. 13 00:00:46.840 --> 00:00:50.799 And welcome. You are listening to and watching the Financial 14 00:00:50.840 --> 00:00:54.359 Survival Network. I'm your host. Carrie Let's Michael Pento is 15 00:00:54.479 --> 00:00:57.840 on vacation, although as long as Michael has a phone, 16 00:00:57.880 --> 00:01:01.840 he's never really on vacation. In fact, he manages hundreds 17 00:01:01.880 --> 00:01:05.959 of millions of dollars, not with computers but with his iPhone. 18 00:01:05.959 --> 00:01:09.120 If you could believe it, that's how easy he's got 19 00:01:09.120 --> 00:01:10.120 the job down to. 20 00:01:10.239 --> 00:01:13.799 Right Michael, Yeah, I'm in a beautiful Belmore New Jersey 21 00:01:14.359 --> 00:01:17.359 in the upstairs apartment of a close friend, and I 22 00:01:17.400 --> 00:01:20.640 forgot we were doing these interview But I'm here, here 23 00:01:20.680 --> 00:01:24.159 my athletic freaky shirt on, and I'm ready to go. 24 00:01:24.560 --> 00:01:27.879 So you no, you know what Woody Allen said, ninety 25 00:01:27.879 --> 00:01:29.680 percent of life has showing up, right. 26 00:01:30.200 --> 00:01:31.480 Well, I'm going to show up at the pick a 27 00:01:31.519 --> 00:01:33.319 ball courts in maybe about a half an hour, so 28 00:01:33.400 --> 00:01:34.280 let's see what happens. 29 00:01:34.560 --> 00:01:37.239 All right. I'll say a prayer for you, because everybody 30 00:01:37.280 --> 00:01:40.760 that I know, except for one or two people, has 31 00:01:40.799 --> 00:01:46.319 sustained fairly significant injuries from a very low impact, low 32 00:01:46.400 --> 00:01:53.319 effort sport with jarring lateral movements, studden stops running backwards 33 00:01:53.760 --> 00:01:55.719 like I don't know how you do it? 34 00:01:55.760 --> 00:01:58.879 Oh hey yeah, I'm so Just to digress for a second, 35 00:01:58.879 --> 00:02:02.799 I had preci gift significant concussion from doing a Frankenstein 36 00:02:02.879 --> 00:02:07.879 walk backwards and soup pine on my head, and then 37 00:02:08.039 --> 00:02:12.280 I popped a calf muscle and now I'm nursing a 38 00:02:12.360 --> 00:02:18.479 broken tendon in my foot as well as of displaced bones. Well, 39 00:02:18.759 --> 00:02:22.080 pick a bowl is very safe. I suggest everybody do it. 40 00:02:22.240 --> 00:02:22.960 Just put a hell out. 41 00:02:23.800 --> 00:02:26.680 I think it's about as safe as the bright Line train, 42 00:02:27.280 --> 00:02:29.319 you know. Just talking a little Florida biz. I wrote 43 00:02:29.360 --> 00:02:32.439 an article about this, The bright Line is unsafe at 44 00:02:32.479 --> 00:02:36.719 any speed. We thought there were only one hundred twenty 45 00:02:36.879 --> 00:02:41.240 six deaths bright Line related since twenty seventeen, but the 46 00:02:41.280 --> 00:02:44.439 Miami Herald just came out with an expose. It's actually 47 00:02:44.520 --> 00:02:48.520 one hundred and eighty six deaths. So they've been covering 48 00:02:48.520 --> 00:02:51.400 it up. But I'm not so much worried about the 49 00:02:51.439 --> 00:02:54.520 carnage on the tracks in Florida. I'm worried about the 50 00:02:54.560 --> 00:03:00.039 carnage and the tracks coming out of Wall and Broad Street, right. 51 00:03:00.680 --> 00:03:03.840 Yeah, and the echoes building at the at the Federal Reserve. 52 00:03:04.599 --> 00:03:07.800 Yeah, So what's what's going on here with the Federal Reserve. 53 00:03:07.840 --> 00:03:10.800 It seems like they got some pretty luxurious digs there. 54 00:03:11.840 --> 00:03:14.199 Central banking is good business, isn't it. 55 00:03:14.319 --> 00:03:17.240 I find myself in a very peculiar position. I'm kind 56 00:03:17.240 --> 00:03:20.319 of in defending Jerome Powell, which I never thought I 57 00:03:20.360 --> 00:03:23.080 would do in my in my life, you know, Kerry, 58 00:03:23.159 --> 00:03:27.400 For the life of me, I don't understand what the administration, 59 00:03:27.800 --> 00:03:30.240 who I support, is thinking when they say they want 60 00:03:30.240 --> 00:03:33.400 to fire Powell and cut interest rates to one percent. 61 00:03:33.639 --> 00:03:35.439 Now the curve the funds rate is for four and 62 00:03:35.479 --> 00:03:36.840 a quarter to four and a half, so it's just 63 00:03:36.879 --> 00:03:39.039 swing up. We're talking about one percent, which is an 64 00:03:39.039 --> 00:03:41.360 over you know, a three hundred and twenty five basis 65 00:03:41.400 --> 00:03:42.520 point rate cut immediately. 66 00:03:43.400 --> 00:03:44.039 Yeah, I guess. 67 00:03:44.080 --> 00:03:47.080 I guess inflation that has wiped out the middle class 68 00:03:47.159 --> 00:03:50.680 isn't good enough when you have sixty percent of Americans 69 00:03:50.680 --> 00:03:55.120 that have a networth of one thousand dollars or less. 70 00:03:55.159 --> 00:03:58.759 Sixty big zero? What are we doing here? 71 00:03:58.800 --> 00:04:00.400 But do we want to make home prices go up 72 00:04:00.439 --> 00:04:04.520 even faster and make them ever expensive? I don't understand it. 73 00:04:04.560 --> 00:04:07.520 So on what premise would you cut interest rates? Let's 74 00:04:07.520 --> 00:04:09.639 see the unemployment rate is is? I think it's four 75 00:04:09.680 --> 00:04:13.479 point one or four point two percent is historically very 76 00:04:13.599 --> 00:04:16.279 very very low. The stock market is that an all 77 00:04:16.399 --> 00:04:19.920 time record high valuation. Home price to income ratios are 78 00:04:19.959 --> 00:04:23.680 an all time high. Credits reds are extremely tight, Financial 79 00:04:23.680 --> 00:04:28.079 conditions are extremely loose. We're not in a recession. GDP 80 00:04:28.199 --> 00:04:30.040 growth for this quarter is supposed to be about a 81 00:04:30.040 --> 00:04:36.360 little bit over two percent, and inflation is inflation carry 82 00:04:36.839 --> 00:04:41.519 has been above the Fed's asinine two percent target for 83 00:04:41.759 --> 00:04:47.279 fifty months. Right now, If I just told you, what 84 00:04:47.800 --> 00:04:49.600 if you just heard that, if you came from Mars 85 00:04:49.639 --> 00:04:53.600 and said, you know, I understand the federal reserves shorter 86 00:04:53.759 --> 00:04:57.279 is to maintain you know, a level prices, you know, 87 00:04:57.360 --> 00:05:00.519 stable prices. And I just told you all those things 88 00:05:01.199 --> 00:05:03.720 and you and I also said that the Fed has 89 00:05:03.759 --> 00:05:07.279 missed its target to the north, it's two percent target 90 00:05:07.319 --> 00:05:09.879 to the north for fifty months, and that target is 91 00:05:09.920 --> 00:05:10.839 moving further away. 92 00:05:10.839 --> 00:05:11.759 In other words, the. 93 00:05:11.639 --> 00:05:15.360 Inflation rate is moving further away from the target two. 94 00:05:15.920 --> 00:05:18.399 What do you think the conversation would be. It wouldn't 95 00:05:18.399 --> 00:05:22.160 be when are you going to cut rates? It shouldn't 96 00:05:22.199 --> 00:05:24.720 certainly shouldn't be when you're going to lower rates to 97 00:05:24.759 --> 00:05:26.560 one percent. It's gonna be when you're going to raise 98 00:05:26.600 --> 00:05:27.439 interest rates. 99 00:05:27.920 --> 00:05:34.319 Yeah. Well, and really historically, going back, you know, as 100 00:05:34.360 --> 00:05:38.240 far back as you can go, really, the rates are 101 00:05:38.360 --> 00:05:42.639 not out of line. They're kind of normalized. Now, if 102 00:05:42.680 --> 00:05:47.000 we need zero percent interest to keep this economy going, 103 00:05:47.439 --> 00:05:49.839 then we've got a real problem here, don't we. 104 00:05:50.279 --> 00:05:51.519 No, we not. 105 00:05:51.639 --> 00:05:54.480 If we have a real problem. We have a tremendous 106 00:05:54.519 --> 00:05:55.199 credit bubble. 107 00:05:56.879 --> 00:06:03.759 We have an an unbelievable equity bubble two hundred Well, 108 00:06:04.160 --> 00:06:06.879 the total market cap of equities is now two hundred 109 00:06:06.920 --> 00:06:08.120 and twelve percent. 110 00:06:07.839 --> 00:06:11.160 Of GDP, so it's more than double the size of 111 00:06:11.199 --> 00:06:15.639 the entire US economy. Now, the normal relationship there's around 112 00:06:15.720 --> 00:06:19.000 ninety to one hundred percent. That's just normal. So that 113 00:06:19.079 --> 00:06:21.600 means stock prices could drop fifty percent and still be 114 00:06:21.639 --> 00:06:26.439 above valuation historical valuations. That's how that's how crazy. And 115 00:06:26.439 --> 00:06:30.120 then you also have you know, the cape ratio, which 116 00:06:30.160 --> 00:06:34.759 is that I think it's at almost twenty seven or 117 00:06:34.759 --> 00:06:38.759 thirty seven, I forgot where it was anyway, it's astronomically high. 118 00:06:39.199 --> 00:06:46.720 It's historically speaking, prices, deals ratio is three. Risk premiums 119 00:06:46.759 --> 00:06:50.199 are negative in the risk premium the inverse of the 120 00:06:50.199 --> 00:06:54.720 pe ratio, right, Sure, get your earnings yield, and the 121 00:06:54.720 --> 00:06:56.680 earnings yield is less than what you can earn in 122 00:06:56.720 --> 00:07:00.759 a T bill. This is all highly unusual record low 123 00:07:00.800 --> 00:07:04.759 dividend yields. So the stock market's in an epic bubble. 124 00:07:04.879 --> 00:07:08.040 Home prices are the most expensive they've ever been in history, 125 00:07:08.680 --> 00:07:11.399 even relate in relation to incomes. And we have a 126 00:07:11.439 --> 00:07:14.399 massive credit bubble when there's like, you know, trillions of 127 00:07:14.439 --> 00:07:19.040 dollars of things like private credit, which hardly ever existed before, 128 00:07:19.160 --> 00:07:21.560 I mean, in the previous decades. Now there's a whole 129 00:07:21.600 --> 00:07:25.399 cottage industry of businesses that can't get loans from a 130 00:07:25.439 --> 00:07:28.240 bank or float corporate paper, so they get loans from 131 00:07:28.800 --> 00:07:32.519 you know, the shadow banking system. Yeah, that's a huge 132 00:07:32.600 --> 00:07:34.959 problem these that's a huge when we have when not 133 00:07:35.000 --> 00:07:38.759 the not if, when we have a recession, because the 134 00:07:38.759 --> 00:07:42.079 the the business cycle hasn't been repealed. 135 00:07:42.720 --> 00:07:44.120 When we have the next versus. 136 00:07:45.519 --> 00:07:48.680 When we have the next credit crisis or recession, this 137 00:07:48.759 --> 00:07:50.839 is when reality is going to hit. So it's not if, 138 00:07:50.879 --> 00:07:53.560 it's when I have a timing model that lets me 139 00:07:53.639 --> 00:07:55.319 know when to get out. 140 00:07:55.560 --> 00:07:56.839 I'm been, I've been you. 141 00:07:56.800 --> 00:07:59.279 Know in a you know, I have a long short strategy, 142 00:07:59.319 --> 00:08:03.000 so mostly long, sometimes short. The past few years mostly 143 00:08:03.000 --> 00:08:05.720 went out long, but holding our nose because we know 144 00:08:06.600 --> 00:08:08.959 that if you're gonna be one of those people, one 145 00:08:08.959 --> 00:08:12.959 of those automatic buy and hold dollar course to averaging 146 00:08:13.319 --> 00:08:16.720 funding their four to one k in as target date fund, 147 00:08:17.160 --> 00:08:19.040 and you're gonna be down thirty five percent in a 148 00:08:19.360 --> 00:08:22.600 few weeks time, not a few weeks from now, but 149 00:08:22.720 --> 00:08:25.360 in a few weeks, a truncated period of time, when 150 00:08:25.360 --> 00:08:28.639 the when the poop hits the bed, we're gonna be 151 00:08:28.680 --> 00:08:31.720 down thirty percent in a very quick period of time. 152 00:08:32.200 --> 00:08:35.840 And then you're gonna panic and call your administrator for 153 00:08:35.879 --> 00:08:37.600 your four to one K plant and say move my 154 00:08:37.799 --> 00:08:41.000 plan into cash. And that's what market goes down fifty 155 00:08:41.000 --> 00:08:42.080 to sixty seventy percent. 156 00:08:43.039 --> 00:08:46.120 But haven't people been programmed to not behave that way? 157 00:08:46.919 --> 00:08:50.840 They have been inculcated through the decades to just buy 158 00:08:50.879 --> 00:08:55.879 and hold. But Carrie uh, stock ownership among Americans has 159 00:08:55.919 --> 00:08:59.799 never been higher, and the stocked ownership is concentrated mostly 160 00:08:59.799 --> 00:09:00.600 in people who. 161 00:09:00.440 --> 00:09:02.600 Are my age or older. 162 00:09:03.279 --> 00:09:08.200 So you went around in their fifties, like fifties, early sixties, 163 00:09:08.519 --> 00:09:11.039 or in their retirement ages. Not not not in the 164 00:09:11.080 --> 00:09:13.720 twenty year old, not in the mean stock people. It's 165 00:09:14.080 --> 00:09:19.559 our age, yes, approaching retirement or in retirement, Kerry. When 166 00:09:19.600 --> 00:09:23.000 they're down thirty five percent in their portfolio, I don't 167 00:09:23.000 --> 00:09:25.159 know the exact number, but it's probably around. That's my 168 00:09:25.279 --> 00:09:29.519 guest to mint. They're gonna exist because they cannot see. 169 00:09:29.759 --> 00:09:31.919 Then it becomes what you just said, it's a it's 170 00:09:31.960 --> 00:09:34.919 an existential crisis. I am not going to be their 171 00:09:34.960 --> 00:09:37.519 wife is going to tell them from probably being a 172 00:09:37.559 --> 00:09:41.679 little sexist here, But if you're a man, your wife's 173 00:09:41.679 --> 00:09:44.799 going to tell you, Hey, I'm not canceling my trip 174 00:09:44.840 --> 00:09:48.000 to Europe and I'm not selling my my lake house. 175 00:09:49.000 --> 00:09:49.759 You can sell. 176 00:09:49.799 --> 00:09:52.320 You're gonna sell, and you're gonna sell now and will 177 00:09:52.320 --> 00:09:55.879 wait for it to settle down. That is going to happen, 178 00:09:56.240 --> 00:09:58.240 and that is gonna be synergistic. It's going to be 179 00:09:58.240 --> 00:10:01.080 a death spiral in my opinion. It's just it's just 180 00:10:01.080 --> 00:10:04.720 a matter of mean reversion. If you believe in nature, 181 00:10:04.720 --> 00:10:07.600 heats vacuums, this is a mean Listen, this is one 182 00:10:07.639 --> 00:10:12.240 or two things are gonna happen mathematically certain, Either stought 183 00:10:12.240 --> 00:10:17.120 preceres are gonna crash. So the ratio that you know 184 00:10:17.159 --> 00:10:20.799 they're not the enumerator matches the denominator, or they're going 185 00:10:20.840 --> 00:10:22.639 to stay where they are for a decade not could 186 00:10:22.679 --> 00:10:26.960 not do anything until the denominator catches up. Now, the 187 00:10:27.039 --> 00:10:30.759 latter scenario never happens in history. It just never has 188 00:10:30.799 --> 00:10:35.720 happened before. Bubbles burst. They don't just stay bubblicious for 189 00:10:35.759 --> 00:10:36.279 a decade. 190 00:10:36.720 --> 00:10:42.879 Wow, all right, So uh ah, so you got to 191 00:10:42.879 --> 00:10:46.600 think what should you be doing now because this appears, 192 00:10:46.840 --> 00:10:49.879 from what you're saying here, Michael, to be inevitable. 193 00:10:50.559 --> 00:10:51.120 Well, you better. 194 00:10:51.159 --> 00:10:53.799 First of all, if you're you're in one of those 195 00:10:54.480 --> 00:10:57.639 buy and hold dollar cost averaging rubrics, you've got to 196 00:10:57.639 --> 00:10:59.320 get the hell out of there as fast as possible. 197 00:10:59.840 --> 00:11:00.960 You got to put yourself in. 198 00:11:00.919 --> 00:11:02.679 An active money managuer. It doesn't have to be me. 199 00:11:03.879 --> 00:11:07.480 I mean, I'm I mean, let me speak altruistically. Find 200 00:11:07.480 --> 00:11:09.440 somebody else besides me. I have plenty of money, and 201 00:11:09.440 --> 00:11:11.279 I have plenty of money under management. I don't care. 202 00:11:11.919 --> 00:11:15.440 But find yourself a robust a robust. 203 00:11:15.039 --> 00:11:18.360 Model that is in the purview of a very honest 204 00:11:18.559 --> 00:11:20.519 and experienced money manager. 205 00:11:20.559 --> 00:11:21.399 Does not have to be me. 206 00:11:21.720 --> 00:11:24.679 But do it for your own retirement sake. 207 00:11:24.879 --> 00:11:27.559 You need to do it all right, sir. 208 00:11:27.919 --> 00:11:28.639 You've worked your. 209 00:11:28.600 --> 00:11:33.480 Entire life to get where you are. Realize where you are. 210 00:11:34.600 --> 00:11:39.200 Realize the triumvirate of bubbles that we have, unprecedented in history, 211 00:11:39.279 --> 00:11:43.279 all three of them. Yeah, and be a historian. See 212 00:11:43.279 --> 00:11:45.240 what has happened, not only in the United States but 213 00:11:45.279 --> 00:11:49.919 around the world. What happens to asset prices when they 214 00:11:50.000 --> 00:11:55.399 get this this elevated and the inculcation the mindset is overwhelming. 215 00:11:55.440 --> 00:11:59.279 Where you know, you have to now convince people that 216 00:11:59.360 --> 00:12:01.879 there is such thing is a business cycle. You have 217 00:12:01.960 --> 00:12:05.840 to convince people that the Fed and the Treasury and 218 00:12:05.879 --> 00:12:11.279 the administration can't always bail you out. And you know, 219 00:12:11.320 --> 00:12:14.240 in the past, Carrie, what is it. What does the 220 00:12:14.320 --> 00:12:19.279 Treasury and particularly the FED have done. They've always solved 221 00:12:19.279 --> 00:12:21.600 the problem every hiccup in the stock market or a 222 00:12:21.639 --> 00:12:25.000 steed speed Buk economy. They just lower interest rates and 223 00:12:25.039 --> 00:12:28.759 print money. Carry Do it again, do it one more time, 224 00:12:29.039 --> 00:12:32.840 and see what happens to inflation if they actually start cutting, 225 00:12:32.840 --> 00:12:35.919 if they ever stop, If they started cutting interest rates 226 00:12:35.919 --> 00:12:41.080 now to desert QE helicopters money, I think it would 227 00:12:41.080 --> 00:12:43.559 be an absolute disaster. It already is a disaster for 228 00:12:43.639 --> 00:12:47.240 this country. When you have when you have over sixty 229 00:12:47.240 --> 00:12:52.120 percent of the population with really no or negative net worth, 230 00:12:53.039 --> 00:12:56.360 you can't have a viable nation. So try try now 231 00:12:58.120 --> 00:13:01.559 pursuing a policy that bails out Street and screws Main Street. 232 00:13:02.080 --> 00:13:06.519 See what happens. It ain't gonna be pretty, is it? No? 233 00:13:07.679 --> 00:13:12.440 So gold, silver, It appears certainly for silver we're on 234 00:13:12.480 --> 00:13:16.519 the verge of a major breakout and things are not 235 00:13:16.600 --> 00:13:18.919 looking good for those silver shorts, are they. 236 00:13:19.440 --> 00:13:24.600 No. Now, I've I've I have, so I took a 237 00:13:24.720 --> 00:13:28.440 nice position in platinum several months ago, bit. 238 00:13:28.399 --> 00:13:30.039 More gold for a very long time too. 239 00:13:30.080 --> 00:13:34.080 So my proxy for the the bit so the precious 240 00:13:34.120 --> 00:13:38.039 metal is proxies that I use are gold and platinum, 241 00:13:38.039 --> 00:13:40.840 but silver too is you I'm not going to argue 242 00:13:40.840 --> 00:13:43.120 against silver, but you should. You have to get your 243 00:13:43.440 --> 00:13:46.320 your hands on some of this. And there's a there's 244 00:13:46.320 --> 00:13:49.159 a bull market happening in platinum. You know, for decades 245 00:13:49.200 --> 00:13:53.240 and decades on end, platinum was more expensive than gold. 246 00:13:53.240 --> 00:13:54.360 It's a it's. 247 00:13:54.240 --> 00:13:58.639 A rarer, more more rare metal, it's a more precious metal. 248 00:13:59.399 --> 00:14:02.840 It has some industrial components to it as well, and 249 00:14:02.879 --> 00:14:05.639 that flip that has flipped. So I would not only 250 00:14:05.679 --> 00:14:08.399 own gold, I would definitely own some platinum here because 251 00:14:08.519 --> 00:14:11.200 there's only one thing that's going to happen. There's only 252 00:14:11.240 --> 00:14:14.639 one thing that I could be assured to occur, and 253 00:14:14.639 --> 00:14:17.799 that stackflation like we've never before imagined. We're going to 254 00:14:17.840 --> 00:14:21.000 have another recession. Business cycle hasn't been repealed. We're going 255 00:14:21.039 --> 00:14:23.480 to have a credit crisis. The playbook is going to 256 00:14:23.519 --> 00:14:25.720 be deployed because it's worked all that every time in 257 00:14:25.759 --> 00:14:28.519 the past. What's the Pavlovian response from the Fed and 258 00:14:28.559 --> 00:14:33.759 Treasury borrow print spend or it was automatic stabilizers that 259 00:14:33.840 --> 00:14:35.600 kick in are going to send a deficit not to 260 00:14:35.960 --> 00:14:38.919 you know, the deficit was two hundred billion in prior 261 00:14:38.960 --> 00:14:41.000 to the global financial crisis. Then it went to you know, 262 00:14:41.440 --> 00:14:45.120 the trillion trillion now it's now it's two trillion. In 263 00:14:45.159 --> 00:14:48.000 the party times man, in the good times with full 264 00:14:48.000 --> 00:14:53.759 employment and record a stock market, it's two trillion. So 265 00:14:53.879 --> 00:14:57.720 when the automatic stabilizers kick in, the unemployment benefits kick in, 266 00:14:58.200 --> 00:15:00.679 this deficit is going to go between from from two 267 00:15:01.840 --> 00:15:04.519 to four to six trillion per ADAM. 268 00:15:05.440 --> 00:15:07.759 So that means when four. 269 00:15:07.519 --> 00:15:12.639 To six trillion, where's six trillion dollar annual deficit, and 270 00:15:12.919 --> 00:15:15.399 and that means the money is going to go directly 271 00:15:15.480 --> 00:15:17.279 to the people. It's not gonna be like it wasn't 272 00:15:17.279 --> 00:15:19.320 the global financial crisis where you just bail out Wall 273 00:15:19.360 --> 00:15:24.080 Street by taking the banks got their assets bailed out 274 00:15:24.399 --> 00:15:26.720 from the Fed. Now this is going to go right 275 00:15:26.799 --> 00:15:30.200 into the hands of the pockets of the people through 276 00:15:30.200 --> 00:15:34.080 these through the unemployment insurance that they're gonna get right 277 00:15:34.679 --> 00:15:36.840 and through the subsidies that they're gonna get from from 278 00:15:36.879 --> 00:15:40.159 the Fed, and the helicopter money coming from the Treasury. 279 00:15:40.440 --> 00:15:42.720 So we're going to have inflation, not the way they 280 00:15:42.759 --> 00:15:46.519 measure it. Stop at nine, it's going to go to nineteen. Yeah, 281 00:15:46.799 --> 00:15:49.559 and that's you know, if you that's what you have 282 00:15:49.600 --> 00:15:51.559 to be prepared for, because if you're saying to yourself, 283 00:15:52.320 --> 00:15:54.879 you know, I think I'm gonna I think I'm going 284 00:15:54.919 --> 00:15:58.799 to retire, and five percent on a thirty year treasury 285 00:15:58.799 --> 00:16:03.200 bond sounds pretty pretty good because the first is only three. 286 00:16:03.639 --> 00:16:04.840 You know, that's wonderful. 287 00:16:06.519 --> 00:16:09.200 Uh, tell me how you feel about earning five percent 288 00:16:09.240 --> 00:16:10.320 when inflation is nineteen. 289 00:16:12.919 --> 00:16:17.279 So that's a that's an existential problem in and of itself, right. 290 00:16:17.559 --> 00:16:22.440 Garry inflation core inflation rose to two point nine percent 291 00:16:23.320 --> 00:16:26.639 year over year, Co wrote, I mean, then the morons 292 00:16:27.759 --> 00:16:31.960 that speak on mainstream financial media when the when the 293 00:16:32.000 --> 00:16:33.840 inflation report came out, they're. 294 00:16:33.639 --> 00:16:36.360 Like better than expected because. 295 00:16:36.080 --> 00:16:39.000 The month over month was a little bit better the core. 296 00:16:39.080 --> 00:16:43.159 But here the core rate of inflation increased. At the 297 00:16:43.279 --> 00:16:46.120 end of the form reading was two point seven or 298 00:16:46.159 --> 00:16:48.919 two point six, it jumped to two point nine core 299 00:16:49.000 --> 00:16:52.960 inflation year over year. That's that is that is a 300 00:16:53.000 --> 00:16:58.120 disastrous conversation to have him. Inflation on the core level 301 00:16:58.240 --> 00:17:00.879 is spiking, and I want to have a scenario where 302 00:17:00.879 --> 00:17:03.840 I'm firing the central bank so I can put a 303 00:17:03.960 --> 00:17:07.480 what I would call it an obsequious sicko fan, a 304 00:17:07.559 --> 00:17:11.000 puppet of the president, to put rates at one percent. 305 00:17:12.079 --> 00:17:14.839 Yeah, what could possibly get wrong here? 306 00:17:14.839 --> 00:17:16.559 What happened to that stuff? What would happened to the 307 00:17:16.599 --> 00:17:19.640 housing market? Let me hear here's the scenario. The scenario 308 00:17:19.680 --> 00:17:23.000 scenario is this some so April April two thousand or 309 00:17:23.039 --> 00:17:27.039 May twenty twenty six comes, Powell is shoved out the door, 310 00:17:27.400 --> 00:17:30.319 an obsequious sick ephan, a puppet of the president, comes in. 311 00:17:30.559 --> 00:17:33.759 He cuts rates to one percent. And what what happens 312 00:17:33.839 --> 00:17:37.279 when the long end of the bond market interest rates 313 00:17:37.279 --> 00:17:41.200 go ballistic? I mean, if that can control the overnight 314 00:17:41.240 --> 00:17:44.319 interbank lending rate, and the money markets will will trade 315 00:17:44.319 --> 00:17:47.319 in sympathy with that. But let's say, unless they assent 316 00:17:47.359 --> 00:17:49.880 to buy every single treasury bond issued, like the Bank 317 00:17:49.920 --> 00:17:53.240 of Japan does, we're gonna have a huge problem with 318 00:17:53.319 --> 00:17:56.279 the interest rates. And if they do buy everything, we're 319 00:17:56.279 --> 00:17:57.880 gonna have a bigger problem with inflation. 320 00:17:59.200 --> 00:18:03.319 M h yeah, it sounds like we got problems on 321 00:18:03.359 --> 00:18:05.240 the way here. Huh. 322 00:18:05.519 --> 00:18:07.079 Well, I mean, listen, what. 323 00:18:09.200 --> 00:18:11.759 When you when you abrogate free markets, when you say, 324 00:18:11.759 --> 00:18:13.920 you know, the free market doesn't have to function. We 325 00:18:13.960 --> 00:18:17.920 could just nineteen eighty seven, just print some money, Greenspan says, 326 00:18:17.920 --> 00:18:20.039 we'll just print some money. We have, we have a tool, 327 00:18:20.079 --> 00:18:23.400 we have a technology. We don't need to Why would 328 00:18:23.480 --> 00:18:28.000 we Why would we make money peg to something like gold? 329 00:18:28.240 --> 00:18:29.119 Why would we do that? 330 00:18:29.599 --> 00:18:33.759 Well, because mine supply of gold is limited, and you 331 00:18:33.839 --> 00:18:37.400 have something real and tangible that's backing your currency. But 332 00:18:37.440 --> 00:18:39.039 then they came up with the idea we could just 333 00:18:39.119 --> 00:18:44.000 we could just live in faeryland. We could just back 334 00:18:44.000 --> 00:18:47.319 our currency with nothing. We'll back it with the taxing 335 00:18:47.440 --> 00:18:51.839 authority of the US Treasury and the American military complex. 336 00:18:51.880 --> 00:18:52.480 That's what will. 337 00:18:53.960 --> 00:18:56.480 Yeah, and then the dollars, you know, crashes. You know, 338 00:18:56.720 --> 00:19:00.400 go look at what the dollar has done since nineteen thirteen. 339 00:19:00.400 --> 00:19:03.160 It's purchasing power. And then those people have the nerve 340 00:19:03.240 --> 00:19:06.039 to tell you that they're they're they're they're in charge 341 00:19:06.440 --> 00:19:11.319 of protecting the purchasing power of the of the currency. 342 00:19:11.599 --> 00:19:14.480 That's a comedy routine, Kerry, it's a joke. 343 00:19:14.559 --> 00:19:19.000 Yeah, that is a comedy routine. And you know it's 344 00:19:19.039 --> 00:19:23.160 that old uh, that old saying. Will Rogers said, every 345 00:19:23.160 --> 00:19:26.559 time Congress makes a joke, it becomes a law, and 346 00:19:26.640 --> 00:19:28.799 every time they make a law, it's a joke. 347 00:19:29.440 --> 00:19:32.960 Right Gary, Let me just I have I had this 348 00:19:33.039 --> 00:19:35.240 written down. I want to make sure when I talk 349 00:19:35.279 --> 00:19:39.799 about credit bubbles, total non financial US debt as a 350 00:19:39.839 --> 00:19:43.160 percentage of GDP is higher today than at the start 351 00:19:43.160 --> 00:19:46.359 of the global financial crisis and the start of the 352 00:19:46.480 --> 00:19:50.680 Nasdaq crash in two thousand. So current ratio is two 353 00:19:50.720 --> 00:19:55.000 one hundred and fifty seven percent of GDP total non 354 00:19:55.039 --> 00:19:59.000 financial debt. In two thousand and seven, before the stocks 355 00:19:59.039 --> 00:20:00.799 lost fifty percent of their value, the S and B, 356 00:20:01.480 --> 00:20:05.279 it was two hundred and thirty four percent. And in 357 00:20:05.279 --> 00:20:07.960 two thousand that great recession where the NASDAK lost eight 358 00:20:08.039 --> 00:20:10.559 percent of its value, it was one hundred and eighty 359 00:20:10.640 --> 00:20:12.960 nine percent. And the current ratio is two hundred and 360 00:20:13.039 --> 00:20:18.480 fifty seven percent. That's your credit bubble. That's your credit bubble. 361 00:20:20.640 --> 00:20:20.920 Man. 362 00:20:21.920 --> 00:20:23.160 So there's no way out of this. 363 00:20:24.440 --> 00:20:26.039 There isn't any easy way out of it. I mean, 364 00:20:26.039 --> 00:20:28.119 they're gonna try to hyperinflate their way out of it. 365 00:20:28.200 --> 00:20:30.839 But since we haven't adjustable rate mortgage as a as 366 00:20:30.880 --> 00:20:34.960 A as our you know, everybody said, hey, Janet Yellen, 367 00:20:35.400 --> 00:20:37.920 why don't you know when interest rates were like aero 368 00:20:37.920 --> 00:20:40.119 point three on the ten year note, why don't you 369 00:20:40.240 --> 00:20:43.079 like float some thirty year dead out there and finance 370 00:20:43.119 --> 00:20:45.200 it or maybe even issue a fifty year bond. I 371 00:20:45.200 --> 00:20:47.799 guess the wasn't any appetite for that, But at least 372 00:20:47.799 --> 00:20:50.960 they should have really loaded up on that lawn kerry. 373 00:20:51.000 --> 00:20:53.599 If they're gonna, if they're gonna, if Wall Street's gonna 374 00:20:53.720 --> 00:20:56.240 supply you with a ten year note that's yielding a 375 00:20:56.279 --> 00:20:59.319 third of one percent, wouldn't you want to lock in 376 00:20:59.400 --> 00:21:02.839 those that that's a pretty good rate, right right, Well, 377 00:21:02.839 --> 00:21:03.799 guess what they said, Now. 378 00:21:04.160 --> 00:21:06.319 We're just gonna do T bills. We're gonna do T 379 00:21:06.480 --> 00:21:09.440 bills and chill. Well that's now you have to roll 380 00:21:09.440 --> 00:21:13.720 over those tea bills every single year. Yeah, and that's 381 00:21:13.759 --> 00:21:14.279 what you have. 382 00:21:14.519 --> 00:21:17.559 So if if if you really want to know the 383 00:21:17.599 --> 00:21:22.359 truth as to why President Trump wants that interest rate 384 00:21:22.519 --> 00:21:25.720 artificially suppressed even further lower, is because it would really 385 00:21:25.759 --> 00:21:30.519 bring down the interest on the debt. Yeah, with no 386 00:21:30.519 --> 00:21:35.400 no negative ramifications with housing or real estate or or 387 00:21:35.720 --> 00:21:37.039 or the equity market. 388 00:21:39.960 --> 00:21:45.359 So it's that simple huh yeah. So it's it's all 389 00:21:45.400 --> 00:21:47.640 about rates, it's. 390 00:21:47.519 --> 00:21:49.319 All about interest on the debt, which is over a 391 00:21:49.400 --> 00:21:50.359 trillion dollars already. 392 00:21:50.480 --> 00:21:51.559 Yeah, gotcha. 393 00:21:52.079 --> 00:21:54.119 Do you see how? You see how well doge work? 394 00:21:54.240 --> 00:21:54.400 Right? 395 00:21:54.440 --> 00:21:57.680 The Doge roared into town and they really slashed the 396 00:21:57.720 --> 00:22:01.559 government slashed everything down. I mean, we're all we're good now, right. 397 00:22:01.599 --> 00:22:03.960 I think they decided to cut one hundred and sixty 398 00:22:04.039 --> 00:22:05.160 billion dollars. 399 00:22:05.440 --> 00:22:07.759 Yeah, for I was still cutting in theory. 400 00:22:08.599 --> 00:22:10.200 Yeah, I don't know what they cut. 401 00:22:10.279 --> 00:22:12.880