Latest / Financial Survival Network / Inflation Stability, Interest Rates & Investment Strategies Amidst US Economic Chaos -- James Locke #5968

Transcript

Inflation Stability, Interest Rates & Investment Strategies Amidst US Economic Chaos -- James Locke #5968 · Financial Survival Network

• 0:00
  You know that is reasoning to believe that this kind of quote unquote soft landing
• 0:04
  is possible. But you know, the Magnificent seven has rallied and we're not
• 0:09
  going to see too much more out of that because that's that's well played.
• 0:14
  But you're right, there is money on the sidelines. And if we get
• 0:19
  that cut in interest rates, right, so let's say the Fens you know
• 0:23
  right now they're talking about March, actually we may have about twenty twenty four,
• 0:26
  right, you might see a quarter point cut, and let's say we
• 0:29
  get a whole point over time, you know, over twelve eighteen months from
• 0:33
  there, you got to start seeing people with these cash reserves on the side
• 0:38
  getting five percent interest. All of a sudden it's down to foest out three
• 0:42
  two in a quarter. And then guess what's going to happen. You're listening
• 0:45
  to Carrie Let'sa's Financial Survival Network where you get valuable information you just can't find
• 0:51
  anywhere else to thrive in today's trying times. You need the Financial Survival Network
• 0:57
  now more than ever. Go to Financial Survival Network dot com and get your
• 1:02
  free newsletter and gift. Financial Survival Network now more than ever, and welcome.
• 1:12
  You are listening to and watching the Financial Survival Network. I'm your host
• 1:18
  Carrie Lutz, and hey, we got some real interesting numbers out today and
• 1:23
  we're going to find out about interest rates all of this right now, James
• 1:27
  lock Block dot com is with us. James, great to have you back.
• 1:33
  Oh and by the way, if you got a question for me or
• 1:34
  James, shoot me an email kl Atcarrie Lutz dot com. So, James,
• 1:42
  when we last spoke, hey, things have changed a bit now,
• 1:46
  interest rates dead, all these interesting things. What's going on here? Yeah?
• 1:51
  For sure. You know we've come off on a good November is the
• 1:56
  bottom line, right, and you know the question is why so kind today?
• 2:01
  What's happening? You know, we know we had a as you mentioned
• 2:06
  there, a snoozer of a number with a producer of price index. But
• 2:09
  it is an important number. It came in unchanged for November and that indicates
• 2:15
  the changes and prices that sellers receive for thousands of different items, services,
• 2:23
  things like that, and its main use is to tell investors, business ultimately
• 2:28
  policy makers, which is going to happen later today, you know, about
• 2:31
  the direction of inflation, and really inflation is remaining steady. That's what an
• 2:37
  unchanged number is telling us, and reinforces that FED kind of the FED Reserve
• 2:44
  is going to leave the FED Funds rate later on today two thirty whenever they
• 2:49
  released that they're going to leave it alone. I'd be surprised if there's any
• 2:53
  thing it's really in the FED Funds meeting this afternoon is really going to be
• 2:58
  all about owls comments, right, which way is he leaning? And you
• 3:07
  know when we talked about November coming out of October, and I've ever started
• 3:10
  off poorly high interest rates and there was you know, kind of taking risk
• 3:15
  off the table kind of idea. But then two weeks in CPI report nominal
• 3:22
  core inflation pulling back more than expected, softening retail numbers, and what are
• 3:30
  it do? Send interest rates down? Right? And answer the rates go
• 3:34
  down, and every person out Wall Street starts saying, okay, here would
• 3:37
  go bye bye bye, right thing, Yeah, I will. Where else
• 3:40
  are you going to put your money? Let's face it. And and there's
• 3:45
  a lot of liquidity still sitting on the sidelines from all the money they printed
• 3:52
  over the pines to five or six years, right, really injured threads because
• 3:59
  the last few times but you know, we kind of I was a little
• 4:02
  bearish and saying, hey, I don't know that the markets are going to
• 4:05
  end, They're going to end further down, closer to the bottom and the
• 4:09
  top. But you know that is reasoning to believe that this kind of quote
• 4:15
  unquote soft landing is possible. But you know, the Magnificent seven has rallied
• 4:20
  and we're not going to see too much more out of that because that's that's
• 4:25
  well played. But you're right, there is money on the sidelines, and
• 4:30
  if we get that cut in interest rates, right, so let's say the
• 4:32
  fence you know, right now they're talking about March, Actually we may about
• 4:36
  twenty twenty four. You might see a quarter point cut, and let's say
• 4:41
  we get a whole point over time, you know, over twelve eighteen months
• 4:44
  from there, you got start seeing people with these cash reserves on the side
• 4:49
  getting five percent interest. All of a sudden it's down to forest out three
• 4:53
  two and a quarter. And then guess what's gonna happen. They're gonna they're
• 4:56
  gonna start running up the risk curve and that's going to put it into investments,
• 5:00
  which may you know, from where I'm looking, kind of support some
• 5:04
  of the more value focused investments or higher dividend stocks things like that. It's
• 5:10
  going to be hard to push everything into the Microsoft teslos and videos, you
• 5:15
  know, the AI world with with things that high already kind of been backored
• 5:21
  in. So you're a hundred percent right, there's money on the sidelines.
• 5:26
  Uh, that's gonna that's gonna push in and that's going to keep pressure on
• 5:29
  inflation, is the bottom line for sure. For sure. So the money
• 5:33
  is there, Uh, what other numbers we got coming up here? Obviously
• 5:39
  the Fed the meeting here is going to kind of be a yawner as well,
• 5:44
  right, I mean, yeah, the numbers they're going to be fund
• 5:47
  rate unchanged, and they're going to state all these numbers of age book and
• 5:53
  UH inflation measures c p I, p p I, job and state they're
• 5:57
  gona they're gonna talk about all these things that are that are slowing down.
• 6:00
  And that's why you know, they're going to wait and see how the red
• 6:03
  hikes have continued to affect the market. And you know, you're even here
• 6:11
  in some of the more barished people that you know, what's the name Jakari,
• 6:15
  Right, he's even starting to soften about further rate hikes, and so
• 6:21
  it's kind of led to a resurgence in the then pivot believers, right,
• 6:27
  And that's what I said that they can talk about next spring now about starting
• 6:30
  to cut reads. So we really want to listen to the language that how
• 6:35
  comes out with, right, because that's going to make a difference. And
• 6:41
  really tell if you know you got just like everything in finance, right,
• 6:46
  you got? I think it's J. V. Morton coming out saying next
• 6:51
  year is going to be you know, not so good. Then gold Missacks
• 6:55
  coming out down and telling you everything's going to be great next year. But
• 6:58
  who do you believe? What? Right? And And the thing is,
• 7:03
  you know, as as crazy as it sounds, the slow down in the
• 7:08
  account on me is a is a good thing. Right. The deflation was
• 7:13
  causing a lot of problems. But you know when you print a lot of
• 7:17
  money, like you said, and you put it all these in hands,
• 7:19
  you know, like it's it's like the fireman starting the fire, you know
• 7:23
  what I mean? Like the government adds the ability to unwind it, question
• 7:29
  it will they And you know a lot of it has to do with who's
• 7:32
  in the White House and who's in the Senate. But I you know,
• 7:36
  you're gonna be hard pressed to see the White House underwined expensive social programs.
• 7:45
  So whatever is, we're gonna see businesses get taxed. That that's that's common,
• 7:49
  right, you know, that unwinding of the tax code in twenty twenty
• 7:54
  five, because money has to come from somewhere, uh to to you know,
• 7:59
  kind of maintain the social programs. And you know, right or wrong,
• 8:05
  you know they more than that too, maintaining our kind of international allies,
• 8:09
  like unless there's some sort of change in Russia or China. You know,
• 8:15
  as much as we want to be isolationists, those places and their international
• 8:20
  moves affect us, you know, affect our life and our economy. So
• 8:24
  you know, there's still a lot of spending that needs to be done to
• 8:28
  kind of keep that international balance. So it doesn't you know, tip bar
• 8:33
  kind of economic scales here back at home. And so how we're going to
• 8:37
  come up with that money, Well, it's coming out of it's coming out
• 8:43
  of, uh, you know, the tax payer. And and this is
• 8:48
  what people that come into my office are always shot to learn that. You
• 8:52
  know, they're the wealthy and they look around and then they're struggling to meet
• 8:56
  their mortgage payment and you know, provide a better life for their kids.
• 9:01
  And all of a sudden they're like, well, what do you mean I'm
• 9:03
  the wealthy, you know, I'm like, well, go, you know,
• 9:05
  go talk to d C and they'll tell you you have more money and
• 9:09
  they want a piece of it. And and that's what's going to happen.
• 9:11
  Where to see taxes go up, where to see businesses get tax to try
• 9:16
  and pay for this. But let's help the firemen aka Washington who started the
• 9:22
  fire can put it out the right way by cutting spending that that would lead
• 9:26
  to much better results in the long run for for you know, the American
• 9:31
  people and our out Well, we can only hope, right right, Yeah,
• 9:39
  I mean for sure. And listen, there's there's things out there.
• 9:43
  When you look into like into Canada, right, they have you know,
• 9:48
  there's like what I call hibernating bearishness. Right. A lot of the mortgage
• 9:54
  rates in Canada are variable. That's just how they do things. That's the
• 9:58
  norm up there. And you're starting to see housing prices fall right unlike in
• 10:03
  the US, where we're much more you know, thirty year fixed right,
• 10:07
  Well, that means slowing down and you know it's it's going to have to
• 10:09
  come here as well. Right. And the other thing you're going to start
• 10:13
  seeing is, you know a lot of these office buildings and and you know
• 10:18
  return to work kind of things which are still empty. You got managers saying,
• 10:22
  hey, we want people in the office four days a week at least,
• 10:26
  and you've got employees who are openly saying one hundred percent at home,
• 10:31
  right or remote. But as the economy cools, you know that leverage is
• 10:37
  going to shift back to the managers. And you know, if there isn't
• 10:41
  a commercial space to handle it, you know that ship, you know,
• 10:45
  due to economic slowdowns, could end up being a net positive for real estate
• 10:50
  and the banks. Right. So you know there's there's all kinds of interwoven
• 10:54
  pieces that you know that kind of come hand at hand, right, Well,
• 11:01
  all the perils of you know, all the dread of the problems with
• 11:05
  job right, Yeah, yeah, exactly. But you know what it is
• 11:11
  that you know, the the good need is that is you know, the
• 11:15
  markets are moving in the right direction. Right, We're not we're not seeing
• 11:18
  catastrophe. It's it's now we're trying to fine tune things right, right,
• 11:22
  And I do see if they can get this soft landing and where we're gonna
• 11:26
  make money in the future. From an investment point view, it's you know,
• 11:31
  it's got kind of the dividend payers because let's just say the magnificent seven
• 11:37
  is has already had it to run up as interest rates come down. People
• 11:41
  don't want, you know, run up the risk of a little and that's
• 11:43
  going to be you're kind of stop in so to speak, when we cash
• 11:48
  doesn't pay as much anymore, and it might mean that the indices themselves don't
• 11:56
  necessarily go up if we're seeing some of the big ones lag because there's such
• 12:01
  an influence on the on the number you know, on the window, six
• 12:03
  hundred on the SMB, things like that, right, So we could see
• 12:07
  some of the the smaller, you know what I'll what i'll call more value
• 12:13
  oriented things rally and carry those bigger ones that you know have literally carried the
• 12:18
  S and P this year. I mean, that's that's what's you know,
• 12:22
  when you go look at the amount of the five hundred stocks that you know
• 12:26
  of them, which ones are up and which other' down. You know,
• 12:28
  I don't know what the final battle number is, but the big picture is
• 12:33
  in my membicine seven is carry the vast majority of this annual game that we've
• 12:37
  had. And that's how to slow down and then knock on board. Right,
• 12:41
  Let's hope the FED doesn't administer too much medicine to kill the patients.
• 12:46
  Yeah, you will. The Fed's been known to do that before. Sometimes
• 12:52
  we've seen in the past, James, that the economy winds up on life
• 12:56
  support and there's no doctor in the room to administer the pals, to do
• 13:01
  the defribillator to bring it back to the patient back to life, right,
• 13:05
  to torture the analogy a little further, for sure? For sure? You
• 13:11
  know that's uh. You know that is that we have to watch out for.
• 13:16
  It is the bottom line. And then you know, like, any
• 13:18
  let's see what happens with Palell this afternoon. See how he says, hey,
• 13:22
  let's all forget Like if he provides too much stimulation to the patient to
• 13:28
  bring him back from the dead, then we have inflation and it's global and
• 13:35
  the potential currency collapse. All this good stuff. Congress is not cooperating because
• 13:41
  they're not braining in the fiscal spending. So where does it all end?
• 13:46
  I don't know maybe it ends in Ukraine or in the Gaza strip for the
• 13:50
  economy, but we got challenges ahead. Hey, James, just tell us
• 13:56
  where do we find you? How do we connect with you on the web?
• 13:58
  Yeah? Absolutely, I'm www dot coolelock dot com, p O O
• 14:05
  L E L O c k E dot com. That's my web page and
• 14:09
  there's links to my radio program in there as well. If you're in the
• 14:13
  Wilmington, Delaware area. I'm on every Sunday at eleven, so I'm always
• 14:18
  happy to take take questions and then hey, talk about the road to ed.
• 14:22
  All right, Hey, appreciate you coming on. A cutting question for
• 14:26
  James myself again. The email address is k L at Carrie Lutts dot com.
• 14:31
  A link to James's website is on the show notes to this interview on
• 14:35
  Financial Survival Network dot com. While you're there, sign up for your free
• 14:39
  newsletter James. Always a pleasure. Thanks for stopping by. Thanks Garret,
• 14:45
  thanks for listening to Carrie Letz's Financial Survival Network your solution to today's trying times.
• 14:52
  For the latest, go to Financial Survivalnetwork dot com. Financial Survival Network
• 14:58
  now more than ever