Latest / Financial Survival Network / Money Talks: The Federal Reserve’s Influence On Stocks & Economy- Andrew Horowitz #6107

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Money Talks: The Federal Reserve’s Influence On Stocks & Economy- Andrew Horowitz #6107 · Financial Survival Network

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and welcome you are listening to and watch on the Financial Survival Network.
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I'm your host, Carrie Lutz. Hey, we are midway through July.
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Personally about to hear from hasn't been on the show in years, but has
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been racking up trading profits all the all during that time, and for good
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reason too, Andrew Prowitz, The Disciplinedinvestor dot com. If you've got a
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question for him or myself, email kl at Carrie Lutz dot com. Andrew,
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great to have you back on the show. With all the turmoil,
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all the chaos in the United States and around the world. You know,
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like reminds me of that movie Full Metal Jacket. No, you know part
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is the part where the gunnery sergeant says marines will live and die, but
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the Marine Corps is forever and countries companies will go out of business bankrupt,
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but the stock market is forever here andrew it is and seems to only want
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to go one direction lately. It's kind of fascinating, how oh the last
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I don't know, call it a few months really for a longer time than
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that, but for a few months. Good news is good news, bad
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news is good news. Any news is good news. And the fact is
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that the Fed has done a great job of holding a carrot in front of
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all of our noses right just kind of leading us to what they want to
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get that you know, hey, you know, inflation is here, but
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don't worry about it again. They use that for a while, and now
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they're talking up the whole idea of and they talked about disinflation. Now we
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actually have some deflation that's that's setting in and some of the world is actually
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reducing rates. What's really fascinating though, right now is that everybody's really jacked
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up and excited about how a rate cut could be so exciting for the markets.
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And we're seeing that recently there's been a steepening in the Yell curve,
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meaning that shorter term is lower or the longer term is starting to come up
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a little bit instead of the still inverted, but not as inverted, if
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you will. That's been good for net interest margins for banks. That's why
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we're seeing back of America and Goldman and even Morgan Stanley after kind of a
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rough going on, their earnings pop back into the positive. And we're seeing
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all the other areas do very well, even though not as much on the
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investment banking business and even on the trading business, but some of the bond
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business that they're doing as well as the net interest margin money they're making,
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which is their bread and butter, how they actually make money, is doing
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real well. So kind of a fascinating time right now. Yeah, So
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I read several people theorizing that inflation doesn't really happen much from government spending.
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It happens when interest rates go up and the banks can make higher profits on
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loans, and as we know, fractional reserve banking, this is private creation
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of money. Is that what's happening now where the banks are making bigger spreads
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so they want to make loans. Now, I don't think. I don't
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think that. I think that is an inflationary component that could be happening that
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hasn't been like that for a while with the inverted ukur for a while,
3:28
they were really retracting a bit, and they were really doing their best to
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show up their balance sheets everywhere they can because they didn't want to have another
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repeat. Remember something about the banks. The banks were got to get out
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of jail free card by the FED about a year and a half ago or
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so back, we saw that some of these banks were going out of business.
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And what happened was the reason was that all of a sudden, investors
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said, wait a second, let me get this grat You have all these
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bonds that you bought and you're on your balance sheet and now they're worth twenty
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percent less than they were. And when we look at those, we have
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to value them where they're going to be. You're never going to get out
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of them without a major loss. So you know what, we're going to
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sell your shares down or you're not going to meet the required amounts for your
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you know, your government stress tests if you will. So what happened was
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that the government said, come on, we know these bars are good,
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and they said, sell to us. We'll pay you one hundred percent of
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the face value right now because we'll hold them to maturity. Because during You
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know, if they do this, they're fine. The issue here is that
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the FED is a much longer holding period ability. You know, their risk
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is an infinite in terms of if they can hold things for long enough.
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So true, you can hold something. If you and I bought an investment
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it's down eighty percent, that looks like it's going lower. And let's say
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we're margined on it. That's a time when we have to say, okay,
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uncle, you know we're out. The FED can say, I don't
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care, we'll hold them foreveryone. We'll just create money to buy it.
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What happened in this cycle was twofold. The FED made a terrible mistake,
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as they always do. They misjudged dramatically, not only inflation, but the
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combination of low interest rates and enormous that the word doesn't fit, it's much
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bigger word whatever. It a gigantic, infinitesimal amounts of stimulus that was rained
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down on individuals and companies, low tax rates, get get out of jail
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free cards, everything that went on, mortgage repayment, pauses, student loan
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forgiveness, you name it. All this that happened. That was the inflationary
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situation. Now, some would say, well, we had no choice.
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Well, I think we had a choice of not doing the IRA, which
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was the Inflation Reduction Act, which was stibulus, the opposite of what its
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name was. Milton Friedman always said, if you want to know the purpose
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of any law, just do the opposite of what it's named. Right.
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Unemployment Insurance actually ensured that we have unemployment, and the Inflation Reduction Act should
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be called the Inflation Acceleration Act, right, correct? Yepah, So that
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was that was the final nail on the That was the final nail on the
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coffin, Right, That was the final I think that was the final you
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know moment that we had a situation where you know, that was the final
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accelerator of the inflation that we're having already. But you know, the thing
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about inflation. Everybody's all shot up and excited about how inflation has come down
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dramatically, which it has, but remember something, inflation will always come down.
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Yeah, you have five percent inflation, ten percent inflation for a couple
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three years, and now inflation is zero. Everybody's excited. Problem is,
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yeah, you have twenty five percent compounded, but twenty five percent simple math,
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higher prices forever because God knows. The FED does not want inflate.
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Deflation and by the way, those people you probably talked about this carry but
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deflation seems like yeah, I like deflation right. Wait wait, let me
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get this. This is straight price. The lower that's for a question hour
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goes up. Yeah, this this seems awesome. The problem with deflation that
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most people don't know is it creates a psychological I'll wait. You know what
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the house is, five hundred thousand, A few of them are coming down.
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I'll wait at while the cars twenty five, fifty thousand, pick a
7:15
number, whatever it is. You know, we're seeing the dealers and cutting
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prices. I'll wait. And as you weight the consumer is not spending.
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And as the consumer's not spending, the car dealers say, wait a minute,
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we need to cut prices even more to bring them in create more incentive
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somehow, sales bonuses, zero interest rates, whatever it is. And what
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happens in a deflationary market is that prices come down, but more so,
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sales go down traumatically. The reason why things is so good right now is
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because we have inflation. The FED wants a little bit inflation. They come
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up with this two percent that everybody in the world, by the way,
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brought into this arbitrary two percent inflation rate, which may change because if things
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don't work out and they can't get inflation down, they'll just probably put a
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three handle on it and say, well, you know it's about to close.
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It's almost it's you know, we're good at that. So going back
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to something you said like the fedce time horizon, I want to go back
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to the mortgage crisis of eighth nine, where basically the FED all these mortgage
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backed securities were split up into tranches and interest to you know, I don't
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even remember all the terms for it, and the FED just basically bought them
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all. And guess what, the housing crisis was over, and they actually
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made money off of all this stuff that people don't even realize that that bailout
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of the whole mortgage market led to enormous profits for them and a redistribution of
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all these houses that were foreclosed. You know, your Blackstones got them and
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and all your other hedge funds bought them up because they were borrowing for nothing,
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and the turned them into rental properties. And you know, maybe it's
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not that great now, but they're so far ahead of where they work.
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I mean, they owe thousands of homes in our home state here in Florida,
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the thousands, and now those houses, the rents have gone up and
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the equity in those houses has doubled, and the FED got their money.
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So everybody's happy here, right. Yeah, Well, don't forget. They
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set up a you remember Maiden Lane, that was basically a hedge fund that
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was set up by the Fed and the treasure out a lot of this bad
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debt in just hold it forever and figure out if they get to make money
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on it, which they did. Yeah, it was essentially a hedge fund.
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Well, how great is that? Yeah, now that maybe it's not
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such good investment buying the government's debt because nobody else wants it, and the
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kind of the situation we're in, so looking ahead, putting the election aside,
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because that doesn't really matter, because the structural problems in place, these
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deficits, social security, running out of money and all this. And yet
9:56
how can the stock market go up with that type of backdrop. Well,
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still a lot of stimulus in the in the markets. I also think the
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one thing that there's something that nobody really talks about very much, and I
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can't give you absolute It's not conspiracy theory at all, by the way,
10:09
but I can't give you absolute proof. But we do know something we have
10:13
around the world. There are countries that have funds. Switzerland has a gigantic
10:20
cyber wealth fund. Japan has been buying directly into their market. Norway has
10:24
been. You name all these countries. Saudi Arabia, they own a lot
10:28
of stocks, they have enormous amount of assets. They have same as the
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FED. They basically have an unlimited time horizon, right, and as you
10:39
go out the time horizon, your risk kind of goes down to nothing.
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Well, with a dollar increasing in value, they convert their value of their
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lower currency into dollars. It's been going up in value, they press that
10:50
up. They buy the stocks in our companies. Not to mention our companies
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buying the stock in our companies. It might be one hundred and ten billion
10:58
dollar buy back. One hundred and ten billion dollar buyback. That's probably buy
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certain plenty of countries and islands throughout Central America for ut ten billion dollars.
11:09
But they're buying back one hundred ten billion dollars in their stock at basically any
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price that it goes you went to why Apple everybody's so excited about their miserable
11:18
earnings that they had and that we're not quite sure what that AI, the
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Apple Intelligence announcement was, But the stock is of like twenty something percent since
11:24
then. It's a lot of the numbers that came out from the reality of
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a buyback. But that's what's going on. We have all limited amounts of
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cash that's being generated by these countries. You're taxation that buying into our stocks.
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That's a backdrop of almost like we don't really care what the valuation is
11:43
because if you look at evaluations, there's two ways to look at what's going
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on. One is are you kidding me? You know, as a valuation
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area of some of the high tech and some of the part of the of
11:58
the SMP market cap, the largest cap, that's like, oh, that's
12:01
a little bit that's frothy. But the rationalization from the bulls is they're going
12:05
to work their way into this. You know, AI is going to create
12:07
productivity, is going to create a great backdrop for earnings and a lot which
12:11
we'll see over the next three weeks, which I think there'll be some disappointment
12:15
with only because AI is going to take a long time to get going.
12:18
From the perspective of companies, there are certain picks and shovels companies that are
12:24
doing well with this, Microsoft being one of them, maybe Amazon, maybe
12:26
Google with their clouds, and Nvidia of course amdm not so shot up about.
12:33
SMCI is another one, Taiwan and Semi Coonductor. So the few of
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them that are doing very well. Of course, the weight loss companies that
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everybody in the world wants to just go, hey, hey, twenty pounds,
12:43
thank you very much. So there are some things that are happening right
12:46
now that are really interesting. The other side of the market, though,
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is fairly valued. You take the equal weighted and you take the lower tier.
12:56
That's why we're seeing this incredible rally in small caps, because it's happening
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is money. Enormous amounts of money are starting to come out of tech and
13:05
rolled somewhere, and those managers that have a requirement to be in something,
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where are they gonna go, Well, let's see, financials look pretty good
13:13
right now, especially if we're seeing a yield curve start to steep it a
13:16
little bit and the FED coming to a little bit of a real reality that
13:20
they're gonna cut, which we'll see. That's number one. You see number
13:24
two. You see small caps. Oh my gosh, you see the run
13:26
on small caps. It's like hysteria. They're on a ranger, they're on
13:30
a bender. Yeah, you know. And there's some Tom Lee came out
13:33
today with like forty percent in the next I think twelve weeks is a prediction.
13:37
And so so the bottom line on this is that there's a lot of
13:41
reversion to the mean alternative assets that are going to be not alternatives, but
13:46
alternative places to play in terms of where to put money right now that have
13:50
been undervalued for some time. Growth has dominated value tech, biotech, consumer
13:56
discretionary versus utilities and financials, consumer staples. These have been and amounts of
14:03
money we're talking about because we're talking about companies that money's coming up three trillion
14:07
dollar companies. We're not talking about a one for one. It's like a
14:11
dollar comes out of these can buy three dollars worth of the other companies.
14:13
So there's a multiplier factor that's going on right now. So there's a lot
14:18
of things that are pushing the markets up. Higher, prices higher all time
14:22
highs often beget all time highs. There is excitement that there is some decision
14:28
on I think the outcome of the presidency. I don't think that really holds
14:33
a lot right opportunity. They'll build it up, and I think there's one
14:35
more thing going on, Kerry. I think over the last twenty years,
14:39
we've had some near death experiences. Shit, I'm not sure if right.
14:43
I'm just talking about the last twenty years. We've had a near death experience
14:46
financially eight oh nine, right, is that in the twenty year period.
14:50
I guess so, we've had some other craziness by the way in between there
14:54
and then we had a near death, true near death experience in two.
15:00
I think a lot of people are like, look, if the worst cup's
15:01
the worse the shit, it's the fan. The markets come down dramatically,
15:07
it's going to be opportunity when the FED will step in. Even though we're
15:11
kind of are we tapped, I don't know. You know, seventy eight
15:13
trillion dollars of balance sheet assets and debt, that's multitude of that of the
15:18
US government. But they will come to the rescue, creating money out of
15:22
nowhere. Will just look like Japan for a period of time, so I'm
15:24
really not that worried. Plus, the fact is, if I was to
15:26
pull my money out right when the situation hit, I was lost better.
15:31
Yet, I'm not thinking about today or tomorrow. I'm not thinking about the
15:33
war in I'm taking poison in Ukraine or in Middle East. I'm not concerned
15:39
about what's going on in some of the areas of housing and maybe even the
15:41
commercial property markets around the world. I'm not concerned about, you know,
15:46
the amounts of debt that these companies have because I'm thinking about today's mrow.
15:48
I'm going to hold my money in for much longer term. So this stuff
15:50
has created a much stickier environment for people to just keep on putting their money
15:54
in. Yeah, I know, I totally agree with you. And you
16:00
know so I want to talk to you about AI because that has been the
16:03
darling of Wall Street, the flavor of the month, if you will.
16:07
You know the Wall Street sells dreams, right, Wall Street sells dreams and
16:12
memes, and you know they don't like to admit it, but you know
16:18
it's all about the story. Now, I'm sure you're using AI in your
16:23
everyday business. I'm using it in mind maybe recording right now, with AI.
16:27
Yeah, we're recording with AI. When I do the show notes in
16:30
this interview, I'm going to run it through the AI and then modify it
16:34
and then clean it up on chat GPT. So it is revolutionary and I
16:41
think potentially more revolutionary even than the Internet was during the late nineties. But
16:49
there's always a lag time, and there's always you think it's going to come
16:53
out one way, Like we thought all these dot coms, zillions of them,
16:59
if they just a dot com and their name, they were gold And
17:02
that's that's kind of what we're going through. It's AI. And yet the
17:07
eventual effects and AI could be far greater and more profound than the Internet,
17:12
I think by a magnitude of ten to one hundred. But we're not just
17:17
going to get there in a straight line. How do you play it and
17:19
how do you avoid getting burned on this trend? Well, you know,
17:22
you miss blockchain everything. Blockchain was golden hole. So for a long time,
17:26
I don't remember last time I remember saying, Oh, I want to
17:27
buy that company because it's blockchain involved. Yeah, yeah, true, you
17:32
know correct. So I think the AI is a very interesting process. I
17:36
think again, right now we're in the early stages. You have to look
17:38
at this like a gold rush of you know, the eighteen hundreds when people
17:41
would pick up and they would just run out to California. A little bit
17:44
of a different scenario here, right, but they would run out to the
17:47
west and risk their lives and they would go and what did we have.
17:49
Well, they had to do a certain number of things. Number one,
17:52
they had to get clothing, so Levi's, they had to buy picks and
17:55
shovels. They had to get screens, they had to get they had to
17:59
buy drinks, they had to get tent. These are the areas you know
18:02
out there that did very well. The brothels did very well, the bars
18:07
did well, the restaurants to a great right. Now, all these did
18:11
well. Now did somebody absolutely make a lot of money by paying for gold?
18:15
Maybe maybe not. Most did not. Most suffered. They just paid
18:19
for their existence out there. A lot of companies right now are going to
18:22
pay for their existence by this AI thing, right by just for example,
18:27
Microsoft, Microsoft doing great. You know they have obviously their fingers or their
18:33
their arms into open AI. Big piece of that, right, they got
18:37
that going on. They have it. There's your they have a lot of
18:38
things happening with the next generation of what they're doing with AI as well.
18:42
One of the things they're also doing is they give a lot of a lot
18:45
of money they're giving away to company to carry. Let's say, hey,
18:48
Kerry, get how many give you a billion dollars because you're building you know
18:51
this AI. Yeah, yeah, you'll do this, But what we want
18:53
you to do is use that billion to buy back into the Azure network,
18:59
into and our AI processing to help you build what you're building. So what
19:03
do I just do with Microsoft? I just took money off my balance sheets
19:07
and it has moved it into my income statement. Interesting, you wonder why
19:11
they're doing so well and how all these companies can havevelos extra revenue going on
19:15
because they're doing this situation. Amazon doing a very similar situation with credits on
19:22
the AWS system a service platform. So we see a lot of this go
19:26
on. This this money from the balance sheets, freeing it up and which
19:29
is just you know assets that what do they do with it with the hopes
19:32
that they're going to hit something that maybe they even take a piece of the
19:34
companies. So there's going to be winners and loses, No question about this
19:37
you know, you have to wonder, you know, companies that I don't
19:41
know, do, for example, receptious think of the past. Yeah,
19:48
to a degree, right, there is to copy boys, Yeah, elet
19:52
bit your operators. Well, right, these things you don't even see.
19:53
Some people like, what are you talking about? I don't even know what
19:56
you're talking about. But what you have right now is the opportunity for a
19:59
lot of of these productivity gains from much of this and from companies going under.
20:03
Now there's always a room for someone to change what they're doing and go
20:07
into a different business. You know, we've seen that kind of evolution over
20:11
time. But you have to wonder, you know, where's this all going
20:15
to? What level? I think there's some productivity issues that AI will help
20:18
us with. Do we take it to the nth degree? And do we
20:23
have another terminator Skynet situation out there? I don't know. Elon Musk staves
20:30
to think so yeah, yeah, so he's very concerned about, you know,
20:33
where AI goes. I agree with that because it's garbage in, garbage
20:36
out the training and by the way, and thank yourselves, everybody listening watching,
20:40
thank yourselves for giving all this information to all these major companies through your
20:45
social media and through your files and what you do online and your search is
20:48
that they were able to and any blog posts that you have and information that
20:52
you've put out there on the web over the years that they're basically stealing and
20:56
putting into their AI large language models pretty coolly exactly. So is there all
21:03
this or is it as it coming gone? I think the picks, well,
21:07
I think we're overdone on a lot of companies. A lot of companies
21:11
will be trying harder to do it. I think we missed the first wave.
21:14
If you missed it, you know, if you missed your Microsoft,
21:17
it missed your Google. Apple's a tertiary player because they're going to use it
21:21
internally versus the picks and shovels type of a platform enhanced Sirie. I always
21:26
thought Syrien was kind of AI to begin with, to a degree. Yeah,
21:30
she was like a dumb AI. Yeah, who do you think is
21:34
dumber Alexa or yeah, Rosie the robot you got one from like like a
21:38
series a high school dropout and Alex as a college drop out, right right
21:45
right right. I think that there's there's opportunities still in the major players.
21:48
I don't know if they've washed out most of the profitability over the next two
21:52
or three years already though, you know, if we consider some of the
21:56
next gen on video, the Blackwell format and and platform or technology, and
22:03
we look at that, you know, interesting, uh they you know,
22:07
they seem to think it's going to be a I don't know, three or
22:08
four time revenue multiplier compared to the current product line. And maybe but if
22:15
we take the idea that which which happened actually years ago with Dell, when
22:22
Dell was skyrocketing back in the early days, and we looked at the you
22:26
know, the thirty fifty year of and year year of a year sales growth,
22:32
how many years does it take till you're like, wait a second,
22:33
we can't continue that pace of growth because if we did, everybody will have
22:37
like five PCs on their desk, and who needs that? Yeah? So
22:44
true. So I think some of the some of the play is over till
22:47
we get next GENU to see where we go from here. I think everybody
22:49
wanted in, everybody hopped on, and now I think they're slowly. We've
22:53
seen a couple of days that things are starting to turn a little bit and
22:57
that they're there and everybody still upgrading. Oh yeah, it's still upgrading.
23:00
So they're still you know, head over heals with this. I'm listen,
23:03
we get two weeks from now, do we see the earnings. So let's
23:07
see how this plays out, how this shakes out? All right? All
23:10
right? Hey, so yeah, we we don't really know what's going to
23:14
be. One final question on market Tesla. What's your take on Tesla?
23:19
Is that it just an ice stock, She's an AI stock. I mean,
23:22
it's a the Tesla as an EV play. Let's you know, look
23:26
at that versus Tesla as he has a lot of other stuff, a musk
23:30
play and these difference is right? Does that? Yeah? That different?
23:34
You know, MUSC will do everything you can to burnt shorts. I mean,
23:37
obviously there's a recent rally from where we've been to from what one fifty
23:40
six to forty something over the last few weeks. Yeah, on the better
23:45
than expected sales numbers. But yet the robo task has been pushed back,
23:48
which will be pushed back again, and by the way, it's gonna be
23:51
pushed back again from there, you know. But I think I think that
23:55
that uh, you know, you don't want to bet it. First of
23:57
all, you don't want to bet against Elon Musk and Milga Starlink. That's
24:00
just fascinating. A SpaceX fascinating, right, A guy that can build company
24:04
of the company of the company and make you know, every company's billions,
24:08
right. You know, we're not just talking about starting something like Hey,
24:11
I think it's worth a million. It's worth like twelve billion to start.
24:15
Uh, pretty pretty unbelievable. I think Test is probably if we look at
24:18
as a car company, they're a little bit spent. There's a lot more
24:22
uh, competition, Hybrid's coming on strong. China sales are down significantly better
24:27
than expected recently, but still down significantly big. You know neou by d
24:34
In India, you have companies now that are pushing. Actually, I just
24:37
saw, uh, what's the name of the Indian company. I don't remember
24:42
the name of the company? They vifest in infest Uh is the Indian company?
24:48
The electric vehicle company. Uh, there's a dealership right here Fort Lauderdale.
24:52
I was like, yeah, that's pretty cool. You don't see any
24:53
Chinese cars here, you know, you'll see anything. We have a Lucid
24:57
in West Palm Beach, A loose dealer, right, Pluster you're probably a
25:02
pollstar. Yeah, poll stares kicking around, they're barely it's all inside of
25:06
Arabia keeps feeding in them. They'll be okay. But you know, the
25:11
interesting thing is, and I'm a Tesla owner, so I've had this is
25:15
my third one. They keep getting better driving experience wise. Nothing can approach
25:21
it, no other ev you know, No, I agree with that.
25:23
The eighty percent or eighty five percent now and tech wells, they're not even
25:29
in the same arena. They're like five to ten years ahead. But that
25:34
doesn't mean that they're going to make money. You know, all these Chinese
25:38
companies that were so touted over the past twenty years, it was just like
25:44
the United States leading up to nineteen twenty nine, had all these companies exploded
25:49
on the market. They were doing amazing. There was one little problem manager
25:53
they were really making any money. And that's what happened with the Chinese companies.
25:57
They weren't really making any money. There's one company out there, there's
26:00
one they have a really cool car. They went when was the company went
26:03
bankrupt? Once in their back people buy the cars just as a backup battery.
26:08
Yeah, yeah, I've seen that. Yeah, I didn't hear about
26:11
that, but it makes this is uh one with an F. I think
26:15
it starts not not fair to the other guy. It's fair. It'screir.
26:18
Yeah. But people buy the Fiskers for the batteries because but they're out of
26:19
business. It's like twenty grand and you just have a whole house battery.
26:23
Yeah, hey, the batteries. You know that there's so many applications.
26:29
Hey, you know when you look energy that Tesla's building those uh those megapacks
26:34
as they call them, which you know won't solve the energy problem. But
26:40
if you go out west on Southern Boulevard in Florida, that's west from West
26:48
Palm Beach and you get to like the sugar plantations, there are about ten
26:52
or fifteen peaker plants there. The only purpose of those plants is to go
26:59
on line when they're short of capacity, when there's not enough electricity. Otherwise
27:07
they're off all the time. They just shut down so the megapack can get
27:11
rid of a lot of them, which I find kind of fascinating it.
27:15
You know, people don't really understand the electric industry. I've studied it my
27:18
whole life, and I've had people on guests for you know, who are
27:23
major players in it. I kind of get it, and it seems to
27:27
me these electrical utilities are going to clean up for me AI more than anybody
27:33
else. I would agree. I picks and shovels, right, I mean,
27:36
you got you got any uh you got yet if next year was FPNL
27:40
down here, yeah, CMS, you got h Southern Southern uh, and
27:44
you get all these companies and the mini UH and the anything with nuclear related.
27:48
If in fact, we need to have these gigawatt facilities that Intel's building
27:52
and this one's building and that one's building, the energy consumption is absurd.
27:56
Yeah, fifty thousand homs one one one data center is fifty thousand, the
28:02
one the one that the Intel's doing is two undred and thirty. Yeah,
28:06
so even in thirty thousand homes, I mean like building a city. So
28:11
the utilities, A, we're not going to have enough electricity. We're going
28:15
to have to tap into every available source, which means coal, whether you
28:19
like it or not. And b uh the profits of these companies are going
28:25
to be enormous because they're so high fixed. The capital companies and it,
28:30
you know, to get approvals through for a power plant takes years, so
28:36
you know it's just going to explode the whole thing. And what do utilities
28:41
do. Why do old ladies, widows and orphans love them because they pay
28:45
out a substantial amount of their profits in dividends. Right, So that could
28:51
be the Pickbax the miners here, I data, yes, the brothels,
28:56
yeah, the brothels, and the the the bars and the casinos. Don't
29:02
forget the parts where the casinos back so exactly, and especially down south here
29:11
where you have population growth on top of it. And if you watched mister
29:15
Wonderful, he said he's not building any data centers in the formerly Great State
29:22
of New York, the former Empire estate because you don't like the legal system.
29:26
And I think a lot of people following course there. So that means
29:32
the southern utilities are really set to capture a huge amount. And if they
29:37
have any spare capacity, and it's hydro or whatever, I would venture to
29:41
say, you will see power plants being built in the Dakotas from all the
29:48
gats that they can't use, and they'll ship the power off to the Midwest
29:53
or wherever I would agree are data centers. There no tax in the North
29:59
Dakota perfect. So so it's not all doom and gloom. Then, no,
30:03
not all doom and glue. There's something there, but not all Yeah.
30:07
Hey, my former law partner used to say, carry the situation is
30:11
hopeless, but never serious. Right I like that, Yeah, I like
30:15
that. So hey, and Florida is still kicking ass. Right, that's
30:19
right. So it's right. And other states Tennessee can't believe the growth state
30:25
of Tennessee. And people don't move to avoid taxes, they say, right,
30:29
yeah, I have several friends that move from New Jersey, and I
30:32
got to tell you that they keep on telling me the instant raises they get.
30:34
I'm not paying the city in state taxes that they have to pay in
30:38
the New York me measure area, New Jersey, Connecticut. You know that
30:41
whole area. I know. I moved here from New York and it was
30:45
twelve years ago, and then it was a lot cheaper than it is now.
30:48
Prince was cheaper, Everything was cheaper, and you know, the taxes
30:53
were like twenty percent of the New York's real estate crazy crazy, yeah,
31:00
nuts. So all right, hey, just tell us again where we find
31:03
you, how we subscribe? Sure, go over to We have two podcasts
31:07
right the run instance seven The Disciplined Investor. You can find that on all
31:11
the important podcast repositories apps, et cetera. Dhum Plugged is another one which
31:15
I do with John C. Devorak Tuesday night. We do it live also
31:19
to tape. And then The Disciplined Investor dot com. You can find everything
31:23
on there on how we manage money, what we do the podcast all sorts
31:26
of good stuff. Cool. All right, Hey, the link is in
31:30
the show notes of this interview on Financial Survival Network dot com. While you're
31:33
there, please sign up for your free newsletter. Appreciate you coming on,
31:37
Andrew. It's been a pleasure talking about all this stuff. That is like
31:41
because I like getting into weeds. I like to really look and I like
31:45
to get different viewpoints on what is really happening, because nobody really knows what's
31:51
happening. You know, you know your little confusing planet, but you don't
31:55
Runny know all the others. And hey, if you got a question for
31:57
Andrew or myself, shoot me an email kl at Carrie LUTs dot com.
32:02
Andrew, We're not gonna let so much time go by this time. Yeah,
32:05
I appreciate it. Absolutely Thanks so much, Kerry, thanks for listening
32:08
to Carrie Letz's Financial Survival Network, your solution to today's trying times. For
32:15
the latest, go to Financial Survivalnetwork dot com. Financial Survival Network now more
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