Latest / Financial Survival Network / AI Disruption, Inflation, and Energy - Eddy Gifford- #6165

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AI Disruption, Inflation, and Energy - Eddy Gifford- #6165 · Financial Survival Network

• 0:00
  Speaker 1: Everyone keeps telling us that inflation has gone down. It
• 0:02
  Speaker 1: has not gone down. Get that out of your head.
• 0:04
  Speaker 1: It has not gone down. It has slowed down, right,
• 0:08
  Speaker 1: And so we are still stacking. And it's called compound interest.
• 0:12
  Speaker 1: So the price of goods is compounding every single year.
• 0:16
  Speaker 1: And so you can sit here and say, no, inflation
• 0:19
  Speaker 1: has gone down, No it hasn't. It slowed down. It's
• 0:21
  Speaker 1: only up by you know, two and a half percent
• 0:23
  Speaker 1: over last year, but that's still over last year, which
• 0:26
  Speaker 1: was up like thirty percent over the following two years.
• 0:29
  Speaker 2: You were listening to Carrie. Let'sa's Financial Survival Network where
• 0:33
  Speaker 2: you get valuable information you just can't find anywhere else
• 0:37
  Speaker 2: to thrive in today's trying times. You need the Financial
• 0:41
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• 0:46
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• 0:50
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• 0:57
  Speaker 3: Welcome you are listening to and watching the Financial Survival Network.
• 1:01
  Speaker 3: I'm your host, Carrie Lutts. Well, hey, election right around
• 1:05
  Speaker 3: the corner. We got great job numbers out. Everything's doing
• 1:08
  Speaker 3: well unless you live in a state that gets hurricanes,
• 1:14
  Speaker 3: in which case.
• 1:15
  Speaker 4: Not so great.
• 1:17
  Speaker 3: And how really these numbers, What is the FED going
• 1:21
  Speaker 3: to do next?
• 1:23
  Speaker 4: All these questions and more.
• 1:24
  Speaker 3: Eddie Gifford's with us tactivewealth dot com.
• 1:28
  Speaker 4: Eddie, great to have you back on the show.
• 1:30
  Speaker 3: If you got a question for Eddie or myself, shoot
• 1:33
  Speaker 3: me an email kl at Carrie LUTs dot com. So
• 1:37
  Speaker 3: it looks like we're in the colm before the storm,
• 1:39
  Speaker 3: both in Florida and the country.
• 1:42
  Speaker 1: Yeah, definitely. You know, we're in this situation where it's
• 1:46
  Speaker 1: funny because you get one job print that's better than
• 1:49
  Speaker 1: expected and need just forget everything. This happened in the
• 1:52
  Speaker 1: last six months, right, I mean, like we've we had
• 1:54
  Speaker 1: a lot of good job prints all year long, and
• 1:57
  Speaker 1: then we had a dramatic and then all of a sudden,
• 2:02
  Speaker 1: we have a good job right when the election is
• 2:04
  Speaker 1: around the corner. Now, I don't know, it just kind
• 2:06
  Speaker 1: of strange to me that when we get like adjustments upward,
• 2:10
  Speaker 1: they're like, as there are two thousand, like very very
• 2:13
  Speaker 1: small like margin, right, But when we get the adjustments
• 2:17
  Speaker 1: down they're like significant, like like I mean we're talking
• 2:23
  Speaker 1: when they came forward and said, oh, sorry, you know,
• 2:26
  Speaker 1: we didn't actually create eight hundred thousand jobs. But it's okay,
• 2:31
  Speaker 1: because you know, the most recent print was good, so
• 2:33
  Speaker 1: that everything is good to get. And of course, the
• 2:36
  Speaker 1: interesting thing about it is that it really has caused
• 2:42
  Speaker 1: like an about base on the cuts from the standpoint
• 2:47
  Speaker 1: that there's like nobody expecting a fifty basis point cut
• 2:50
  Speaker 1: after that, and the treasury market is telling us that
• 2:55
  Speaker 1: the treasury market, I mean, gosh, the tenure got back
• 2:57
  Speaker 1: over four percent today even been there in forever. And
• 3:01
  Speaker 1: so that is concerning terry because you can have every
• 3:05
  Speaker 1: job right, you can have everything you want. You can
• 3:07
  Speaker 1: make it like China just did a really big stimulus.
• 3:11
  Speaker 1: We live in a global economy and a lot of
• 3:14
  Speaker 1: the things that are happening right now are more inflationary.
• 3:18
  Speaker 3: Now.
• 3:18
  Speaker 1: No one wants to talk about the fact that inflation
• 3:21
  Speaker 1: could come back, but it did it in the seventies.
• 3:22
  Speaker 1: I couldn't do it again, and why couldn't it be
• 3:24
  Speaker 1: worse than it was in twenty twenty tears? And I
• 3:27
  Speaker 1: think that's kind of when you actually look at it
• 3:31
  Speaker 1: and think about what could happen, you can't eliminate that possibility.
• 3:36
  Speaker 3: Yeah, well, look, we've talked about it before. Inflation goes
• 3:40
  Speaker 3: in cycles. It doesn't just go away, and is Milton
• 3:44
  Speaker 3: Friedman one of the greatest economists of all time? The
• 3:49
  Speaker 3: question about it said, inflation is first and foremost a
• 3:54
  Speaker 3: monetary phenomena.
• 3:56
  Speaker 4: Right, What did you get wrong Thereed?
• 3:58
  Speaker 1: Oh, I mean, you're absolutely right. I think that the Well,
• 4:01
  Speaker 1: the funny thing about it is that we want inflation too.
• 4:05
  Speaker 1: You know, the FED is is always you know, targeting.
• 4:08
  Speaker 1: They're not targeting zero percent, right, they're targeting two percent.
• 4:12
  Speaker 1: And of course it on includes things like sugar in
• 4:16
  Speaker 1: the CPI. Why would they do that? It's it's only
• 4:19
  Speaker 1: every single thing that you can buy in a grocery
• 4:22
  Speaker 1: store nowadays. And so it's always interesting to see CPI
• 4:27
  Speaker 1: versus actual because I know the people that I talked
• 4:30
  Speaker 1: to every day right now, they're they're hurt by the
• 4:33
  Speaker 1: fact that they're maxed out on the credit card. And
• 4:36
  Speaker 1: guess what, a fifty basis point cut didn't really do
• 4:38
  Speaker 1: much for them. And the other thing is is that
• 4:42
  Speaker 1: like everyone keeps telling us that inflation has gone down,
• 4:45
  Speaker 1: it has not gone down. Get that out of your head.
• 4:47
  Speaker 1: It has not gone down. It has slowed down, right,
• 4:51
  Speaker 1: And so we are still stacking. And it's called compound interest.
• 4:55
  Speaker 1: So the price of goods is compounding every single year.
• 4:59
  Speaker 1: And so you can sit here and say, no, inflation
• 5:01
  Speaker 1: has gone down, No it hasn't. It slowed down. It's
• 5:04
  Speaker 1: only up by you know, two and a half percent
• 5:06
  Speaker 1: over last year, but that's still over last year, which
• 5:09
  Speaker 1: was up like thirty percent over the following two years.
• 5:12
  Speaker 1: And so we're at this just like breaking point. And
• 5:16
  Speaker 1: of course it's like on the cusp of the election.
• 5:19
  Speaker 1: And of course there's these storms happening that are inflationary,
• 5:24
  Speaker 1: right because now all of a sudden that can mess
• 5:26
  Speaker 1: with supply change and all of these things. And then oh,
• 5:30
  Speaker 1: guess what, we got wars and that causes the price
• 5:33
  Speaker 1: of oil to go up, which is also inflationary. And
• 5:36
  Speaker 1: so there's a lot of things that we can't control
• 5:41
  Speaker 1: that are going to have inflationary action. And then we
• 5:45
  Speaker 1: have the FED, which all they can do is control
• 5:48
  Speaker 1: that ding gray. And when you think about it, at
• 5:50
  Speaker 1: this point, with everybody being maxed out on credit cards anyways,
• 5:54
  Speaker 1: a rate hike might as well be considered inflationary because
• 5:58
  Speaker 1: it's just increasing the cost for the consumer. And so
• 6:01
  Speaker 1: like the only thing that fixes it is true demand destruction,
• 6:05
  Speaker 1: which is where we start talking about recession, talking about
• 6:09
  Speaker 1: S ANDP, going back to the twenty two letter rage. No,
• 6:12
  Speaker 1: that can't happen, Yes it can. It's happened. It's happened
• 6:16
  Speaker 1: two times in the last twenty five years, and so
• 6:19
  Speaker 1: it's cryptique.
• 6:20
  Speaker 3: I'm going to tell you what I think is going
• 6:22
  Speaker 3: to happen now. The inflation. It's going to run its course,
• 6:26
  Speaker 3: assuming they don't tank the dollar, which would mean tanking
• 6:30
  Speaker 3: the entire global financial system, including the bricks they would
• 6:34
  Speaker 3: go with it, because all of our currency is fiant based.
• 6:39
  Speaker 3: But I feel we are in a similar position to
• 6:42
  Speaker 3: where we were in the nineties, and that was before
• 6:45
  Speaker 3: the advent of the Internet for most of us for
• 6:48
  Speaker 3: public consumption as being the greatest communication tool, networking tool,
• 6:54
  Speaker 3: and monetization tool ever created. And really I felt like
• 7:01
  Speaker 3: that brought the country out from an utter collapse that
• 7:05
  Speaker 3: was going to occur. I think we could be in
• 7:08
  Speaker 3: a similar situation with AI. And I don't know how
• 7:13
  Speaker 3: AI will work, but I think AI is far more
• 7:16
  Speaker 3: profound than the Internet. It's already affecting so much of
• 7:22
  Speaker 3: what I do, both for business and pleasure, for show notes,
• 7:27
  Speaker 3: for plotting out the show I'm working for a company,
• 7:31
  Speaker 3: I'm doing a marketing plan for them. I'm working in
• 7:34
  Speaker 3: another company. I have to figure out what went wrong
• 7:38
  Speaker 3: with a company. It is become a force multiplier for
• 7:41
  Speaker 3: me because I can dispense with so much of.
• 7:44
  Speaker 4: The ordinary thought tools.
• 7:45
  Speaker 3: Now, whether it'll replace me or not, I don't know,
• 7:49
  Speaker 3: but conceivably it could drastically increase productivity throughout the economy,
• 7:55
  Speaker 3: and then there will be job displacements, just like there
• 7:57
  Speaker 3: always is.
• 7:59
  Speaker 4: In the end.
• 8:00
  Speaker 3: Technology the past past is prologue. Technology has always led
• 8:05
  Speaker 3: to more jobs. It might not be the case here,
• 8:09
  Speaker 3: but I think that is our one light at the
• 8:12
  Speaker 3: end of the tunnel.
• 8:13
  Speaker 4: It might have this kind of effect.
• 8:15
  Speaker 3: Imagine if our productivity went up four or five or
• 8:18
  Speaker 3: even ten percent, what would happen to the economy?
• 8:21
  Speaker 1: Then ed, well, that's the thing, right, Efficiency drives productivity,
• 8:25
  Speaker 1: and the AI component is more and more and more
• 8:30
  Speaker 1: adopted because you know, you know how people are like.
• 8:32
  Speaker 1: They don't like change, nobody likes shit. We don't like
• 8:35
  Speaker 1: them be differently. Why would we think differently? Even though
• 8:37
  Speaker 1: that everything tells us to think differently. The human bring
• 8:40
  Speaker 1: doesn't work that way. We don't like to be rewired.
• 8:43
  Speaker 1: But the reality is is that the AI is kind
• 8:46
  Speaker 1: of a rewiring of business of you know, it's a
• 8:51
  Speaker 1: rewiring of like the way that we think as business
• 8:54
  Speaker 1: owners or as employees, or is just like everyday people
• 8:58
  Speaker 1: and so definitely productivity. You know, they always say technology
• 9:03
  Speaker 1: is deflationary, and so the question is is, like, you know,
• 9:07
  Speaker 1: to your point, does this AI have the ability to
• 9:12
  Speaker 1: kind of deflationize the incoming inflationary storm? And I think
• 9:17
  Speaker 1: that a lot of it just depends on adoption and
• 9:21
  Speaker 1: trust and and you know, that's the thing that is
• 9:24
  Speaker 1: steering I think a lot of people away from it too,
• 9:26
  Speaker 1: is that, you know, can I really trust this? Is
• 9:29
  Speaker 1: this thing really going to work? And then when you
• 9:30
  Speaker 1: buy eighty you start using, You're like, oh my gosh,
• 9:32
  Speaker 1: like I can get ten times more stuff done because
• 9:36
  Speaker 1: like I only got to do the last ten percent.
• 9:38
  Speaker 1: I don't go to they to the first ninety percent anymore.
• 9:40
  Speaker 1: And so you know that unfortunately that does mean a
• 9:44
  Speaker 1: lot of people lose jobs. But then there's also on
• 9:47
  Speaker 1: the other side, there's a lot more different types of
• 9:50
  Speaker 1: jobs that are created, you know, and instead of like
• 9:53
  Speaker 1: being on the factory line, now you just got to
• 9:55
  Speaker 1: spot chat things you know, before it gets to that
• 9:59
  Speaker 1: final decision for that last ten percent, So it could
• 10:03
  Speaker 1: it could totally do that. You know, I still think
• 10:07
  Speaker 1: that we're in a situation where like, uh, that's what
• 10:11
  Speaker 1: like brings us out of things getting really bad. I
• 10:15
  Speaker 1: don't know if we can avoid what's coming. And you
• 10:20
  Speaker 1: know that that's my biggest fear right now, is just
• 10:24
  Speaker 1: an advisor is you know in two thousand and eight,
• 10:28
  Speaker 1: two thousand and nine really bad, two thousand and two
• 10:30
  Speaker 1: thousand and two really bad. Why were we able to
• 10:33
  Speaker 1: recover two thousand and two thousand and two and two
• 10:35
  Speaker 1: thousand and two thousand and eight. A lot of it
• 10:37
  Speaker 1: had to do with technology, And I think that the
• 10:39
  Speaker 1: technology will be the saying that saves us from disappearing, right,
• 10:44
  Speaker 1: But I don't pick this out a little bit of
• 10:46
  Speaker 1: pain first, unfortunately.
• 10:48
  Speaker 3: Yeah, Yeah, I agree. I mean I think the AI
• 10:51
  Speaker 3: is already taking over the government. You know, in the
• 10:55
  Speaker 3: there's a utility. I just happened to buy shares in it.
• 10:59
  Speaker 3: I'm not saying anybody should called Dominion Energy at their
• 11:04
  Speaker 3: primary areas like Virginia Northern Virginia, and they just sent
• 11:10
  Speaker 3: notice to everybody that if you want to open a
• 11:15
  Speaker 3: data center in the northern Virginia.
• 11:19
  Speaker 4: You have to make a reservation.
• 11:20
  Speaker 3: If it's like five hundred megawatts are higher, they have
• 11:24
  Speaker 3: to reserve it because they're out of capacity. And that's
• 11:30
  Speaker 3: something that's like and that's the reason I bought them.
• 11:33
  Speaker 3: I said, Hey, to me, electricity is the best play
• 11:36
  Speaker 3: on the economy because no matter what happens, they might
• 11:39
  Speaker 3: not have figured out how to make money off of
• 11:41
  Speaker 3: AI yet, but they're going to. There's no question some
• 11:44
  Speaker 3: people are already doing it. Who got in early. It's
• 11:47
  Speaker 3: not just in Nvidia, all of them. Like I said,
• 11:50
  Speaker 3: I'm not saying anybody should buy. The stock got up
• 11:53
  Speaker 3: like not that high for me. I've had it for
• 11:55
  Speaker 3: a few months. It's up like ten percent, which isn't bad,
• 11:59
  Speaker 3: plus is a dividend. While I'm not saying anybody should buy,
• 12:03
  Speaker 3: and I'm not a financial advisor, but I just thought
• 12:06
  Speaker 3: it was a cool play on AI and so electricity
• 12:11
  Speaker 3: utilities they're going to have to do dramatic expansions here
• 12:16
  Speaker 3: and it's not going to be enough just to put
• 12:18
  Speaker 3: in solar cells and batteries. They're going to be building
• 12:22
  Speaker 3: power plants here right.
• 12:24
  Speaker 4: Oh.
• 12:24
  Speaker 1: Absolutely, I think that you know, it's interesting that you
• 12:27
  Speaker 1: talk about that, because you know, we were huge advocates
• 12:32
  Speaker 1: of utilities this year, like like one from a standpoint
• 12:35
  Speaker 1: that they were just like so they had underwormed so
• 12:37
  Speaker 1: much relative to the SEB five hundred. But then also
• 12:41
  Speaker 1: just because of this demand that you're speaking of, and so, like,
• 12:44
  Speaker 1: the funny thing about it nowadays is that utilities generally speaking,
• 12:48
  Speaker 1: are that thing are if you're staying in equities, it's
• 12:51
  Speaker 1: to flight the safety in equity. And you know, when
• 12:54
  Speaker 1: things get bad, people money managers, big money rotates right,
• 13:00
  Speaker 1: becuse they can't sit in cash, they're not allowed to.
• 13:02
  Speaker 1: They rotate to utilities, they rotate to value stocks, they
• 13:05
  Speaker 1: rotate to dimon in pairs, right, and that's where they go. Well,
• 13:10
  Speaker 1: now we've got this thing called AI and you know,
• 13:13
  Speaker 1: we still have this thing called cryptocurrency, which is very
• 13:16
  Speaker 1: tech heavy. We still have a lot of miners out there.
• 13:19
  Speaker 1: We still have a lot of that that it is
• 13:21
  Speaker 1: driving a lot of demand for electricity. You know, like
• 13:24
  Speaker 1: a lot of these miners, it's not that they can't
• 13:27
  Speaker 1: make money or that they don't have the money to
• 13:29
  Speaker 1: buy the machines to be able to continue to make money.
• 13:32
  Speaker 1: Even post having they can't get the energy, you know that.
• 13:38
  Speaker 1: And so you know, obviously supply and demand is always
• 13:42
  Speaker 1: the king, it doesn't matter what you're talking about. And
• 13:46
  Speaker 1: if you need more energy, then the cost of energy
• 13:50
  Speaker 1: is going to go up, right, And so I think
• 13:53
  Speaker 1: you're absolutely right there. I think that that the as
• 13:57
  Speaker 1: people figure out and we have you know, more adoption
• 14:02
  Speaker 1: on the AI side, we have more adoption on the
• 14:05
  Speaker 1: bigcleaning cryptocurrency side, that's just going to drive like more
• 14:10
  Speaker 1: demand for energy. And you know, to your point, like, yeah,
• 14:15
  Speaker 1: I know that Elon wants to just carve out of
• 14:18
  Speaker 1: you know, a corner of Texas and just put a
• 14:21
  Speaker 1: solar form, but luck with that, that's probably not going
• 14:24
  Speaker 1: to happen, and that takes time.
• 14:27
  Speaker 3: You know.
• 14:27
  Speaker 1: It's the same thing that we've talked about with the
• 14:30
  Speaker 1: whole like you know, grain energy of this last administration.
• 14:34
  Speaker 1: It's like that's nice, but like we don't have the
• 14:38
  Speaker 1: infrastructure to being able to produce what we need to
• 14:42
  Speaker 1: produce already. So if you start taking stuff away, well,
• 14:46
  Speaker 1: guess what, that's also going to raise the price of energy.
• 14:49
  Speaker 1: And and so there's a very very strong supply and
• 14:53
  Speaker 1: demand story. And again it's typically the the the area
• 15:00
  Speaker 1: that is most valuable when things get bad. Not that
• 15:06
  Speaker 1: it doesn't go down, but it doesn't typically go down
• 15:09
  Speaker 1: as much. And these utility companies, people still pay the
• 15:12
  Speaker 1: energy bills. They got to keep the lights on. Got
• 15:15
  Speaker 1: to keep the lights on, and that's why the dividend
• 15:18
  Speaker 1: keeps coming, you know. So uh, we're it's it's made
• 15:25
  Speaker 1: it challenging as a money manager this year because sometimes
• 15:28
  Speaker 1: it's hard to de cipher is the energy play the
• 15:32
  Speaker 1: utilities play. Is this a risk off factor or is
• 15:35
  Speaker 1: this a supplying demand factor? And I think that that's
• 15:38
  Speaker 1: what's caught a lot of tactical money venders off guard,
• 15:42
  Speaker 1: is that they've leaned into utilities as like a risk
• 15:46
  Speaker 1: off play, and what's happening is it's becoming more of
• 15:51
  Speaker 1: a supplying demand play. And so like it's ciphering that
• 15:55
  Speaker 1: is becoming much more challenging when you look at your
• 15:58
  Speaker 1: traditional intermarket relation ships and the coming storm. That's why
• 16:02
  Speaker 1: you got to go back to basics and look at
• 16:04
  Speaker 1: our our good old favorite, good old gold. Right y
• 16:09
  Speaker 1: been sending a warning. I mean not saying that you
• 16:12
  Speaker 1: need to jump on the sidelines, but we do have
• 16:15
  Speaker 1: a significant warning being set by gold. I mean you
• 16:19
  Speaker 1: look at today, right, like everything in the market is
• 16:22
  Speaker 1: down except for bitcoin. That's interesting, right, and some of
• 16:27
  Speaker 1: it maybe conflict, you know, some of it. A lot
• 16:30
  Speaker 1: of it could be just distrusted and fiat like you
• 16:32
  Speaker 1: were speaking about. So it is, it is very it
• 16:36
  Speaker 1: is very interesting kind of the new supplying demand dynamics
• 16:41
  Speaker 1: that are coming out as more technology becomes available.
• 16:45
  Speaker 3: Yeah, bitcoin is up, you know, going to break that
• 16:49
  Speaker 3: sixty five thousand mark.
• 16:51
  Speaker 1: Because I keep getting the sixty six and then retreating.
• 16:54
  Speaker 1: So we'll see if you can do it this time.
• 16:56
  Speaker 1: Get because I think when the high and the seventy
• 16:58
  Speaker 1: three range, so thinks he probably go to one hundred.
• 17:02
  Speaker 4: But sixteen was first.
• 17:04
  Speaker 3: Seventy five is a psychological resistance. Yeah, sixty five kind
• 17:10
  Speaker 3: of it is our current resistance point. But it broke
• 17:14
  Speaker 3: through sixty again and sixty four, so it's going to
• 17:19
  Speaker 3: be interesting. It's its market cap now is one point
• 17:22
  Speaker 3: three trillion, and i'd expect to see in the next
• 17:27
  Speaker 3: couple of months, especially if there's a lot of election
• 17:32
  Speaker 3: post election civil unrest, I'd expect to see it go higher.
• 17:36
  Speaker 3: And so we find you attactivewealth dot com.
• 17:39
  Speaker 1: Correct, Yes, tactic slash Eddie Dash Gifford obviously, just go
• 17:45
  Speaker 1: on to Google. You can also just look up Eddie Gifford.
• 17:48
  Speaker 1: That's Eddie with A Y, G, A F, f lr
• 17:50
  Speaker 1: and G. But yeah, Hey, it's about the exciting Jerry ready, never.
• 17:56
  Speaker 3: Dull Hey, and I'll do you one better if you
• 17:58
  Speaker 3: go to the show notes this enterview on Financial Survival
• 18:01
  Speaker 3: Network dot com. You just click that link and it'll
• 18:04
  Speaker 3: take your right to Eddie's site. While you're there, please
• 18:06
  Speaker 3: sign up for your free newsletter.
• 18:08
  Speaker 4: We're over.
• 18:09
  Speaker 3: I think we're getting close to thirty five or forty
• 18:12
  Speaker 3: thousand subs right.
• 18:14
  Speaker 4: Now as we speak.
• 18:15
  Speaker 3: Goal is by the end of the year first quarter
• 18:20
  Speaker 3: Q one of the twenty five to hit one hundred thousand,
• 18:24
  Speaker 3: which would be a huge milestone. Ed appreciate you coming on.
• 18:27
  Speaker 3: We'll talk to you again real soon. Oh, if you
• 18:28
  Speaker 3: got a question for Eddie or myself, shoot me an
• 18:31
  Speaker 3: email kl at Carrie LUTs dot com.
• 18:34
  Speaker 4: Ed, we'll talk to you again soon. I appreciate it.
• 18:36
  Speaker 1: Kerry, thank you, thanks.
• 18:37
  Speaker 2: For listening to Carrie Letz's Financial Survival Network your solution
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