Latest / Financial Survival Network / The Fed’s Sweet Fix & the Market's Sugar High - Dale Smothers #6150

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The Fed’s Sweet Fix & the Market's Sugar High - Dale Smothers #6150 · Financial Survival Network

• 0:00
  Speaker 1: We almost have to consider this as a sugar high.
• 0:03
  Speaker 2: We are.
• 0:03
  Speaker 1: We are on a sugar high, and the Fed just
• 0:06
  Speaker 1: gave us another pixie stick. It's kind of concerning if
• 0:10
  Speaker 1: you ask me, I've got two young boys on my own,
• 0:13
  Speaker 1: and anytime they ask for sugar, I know that there's
• 0:15
  Speaker 1: going to be this high activity period of time and
• 0:18
  Speaker 1: then the crash comes. And my fear is when does
• 0:22
  Speaker 1: the crash come? And how bad of a crash.
• 0:24
  Speaker 3: You're listening to Carrie Lutz's Financial Survival Network, where you
• 0:28
  Speaker 3: get valuable information you just can't find anywhere else to
• 0:32
  Speaker 3: thrive in today's trying times. You need the Financial Survival
• 0:36
  Speaker 3: Network now more than ever. Go to Financial Survivalnetwork dot
• 0:41
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• 0:45
  Speaker 3: Network now more than ever.
• 0:51
  Speaker 2: You are listening to and watching the Financial Survival Network.
• 0:54
  Speaker 2: I'm your host, Carry Letz. Hey, so we got our
• 0:57
  Speaker 2: fifty point basis cut. Most of the so called experts
• 1:02
  Speaker 2: were expecting twenty five basis points. So far, the markets
• 1:07
  Speaker 2: are reacting favorably. You wonder if they're reacting to the
• 1:11
  Speaker 2: election or to the center, to both. But we got
• 1:17
  Speaker 2: a guest here who's going to explain it all to you,
• 1:21
  Speaker 2: and well, hey, what can you say? Dalla Smothers is
• 1:26
  Speaker 2: with us now, President founder of RDS well Dale. It's
• 1:31
  Speaker 2: great to have you on the show. We first time guessed.
• 1:34
  Speaker 2: So yes, hey, how bad is the economy? B? Does
• 1:39
  Speaker 2: fifty basis points make any difference? And C does the
• 1:43
  Speaker 2: election matter at this point?
• 1:46
  Speaker 1: Sure? So let's take it in order. Then let's go A.
• 1:49
  Speaker 1: How bad is the economy? You know, cutting straight to
• 1:53
  Speaker 1: the chase. I think a fifty basis point cut at
• 1:57
  Speaker 1: this point in the game is is a telltale sign
• 2:01
  Speaker 1: that they see something that's not in the publicly disclosed numbers.
• 2:05
  Speaker 1: You know, when you look at the jobless claims that
• 2:07
  Speaker 1: just came out this morning and you see that our
• 2:10
  Speaker 1: jobless claims aren't actually as bad as what you would expect.
• 2:14
  Speaker 1: After a fifty basis points cut, you've got to wonder
• 2:17
  Speaker 1: what the world are they seeing? You know, not to
• 2:19
  Speaker 1: say that they're wrong, it's just what are they seeing
• 2:22
  Speaker 1: that would that would negate this type of jobless claim
• 2:28
  Speaker 1: that we're seeing. I mean that the jobless claim is
• 2:30
  Speaker 1: trending in the right direction, and we still come out
• 2:33
  Speaker 1: with a fifty basis point cut for b on the
• 2:38
  Speaker 1: fifty basis point cut? Does it really affect the market?
• 2:41
  Speaker 1: You know, I think that the market's going to react
• 2:44
  Speaker 1: favorably to this, as you already see happening today. My
• 2:48
  Speaker 1: problem that I have with this is that we almost
• 2:51
  Speaker 1: have to consider this as a sugar high.
• 2:53
  Speaker 2: We are.
• 2:54
  Speaker 1: We are on a sugar high, and the Fed just
• 2:57
  Speaker 1: gave us another pixie stick. It's kind of concerned if
• 3:00
  Speaker 1: you ask me. I've got two young boys on my own,
• 3:03
  Speaker 1: and anytime they ask for sugar, I know that there's
• 3:05
  Speaker 1: going to be this high activity period of time and
• 3:08
  Speaker 1: then the crash comes. And my view is when does
• 3:12
  Speaker 1: the crash come and how bad of a crash is it?
• 3:15
  Speaker 1: And then for se does the election matter? I think
• 3:18
  Speaker 1: the election certainly has consequences, as every election does. We've
• 3:22
  Speaker 1: got the potential for a long term capital gain or
• 3:26
  Speaker 1: short term capital gain being taxed even without realizing it.
• 3:30
  Speaker 1: That could impact a ton of investors and in my opinion,
• 3:34
  Speaker 1: could make a lot of money flow out of the
• 3:37
  Speaker 1: capital markets that we currently see. A lot of policy
• 3:42
  Speaker 1: that is on the table right now is going to
• 3:44
  Speaker 1: impact the market, and we can unpack that as you
• 3:47
  Speaker 1: wish or in my opinion. I think again, either of
• 3:51
  Speaker 1: the sides that are going to be running are going
• 3:53
  Speaker 1: to be giving us more pixie sticks along the way.
• 3:56
  Speaker 1: So we're talking to our clients right now, Harry in
• 3:59
  Speaker 1: a and a notion of Hey, in the next ten
• 4:02
  Speaker 1: to fifteen years, we just got to make sure that
• 4:04
  Speaker 1: we're weathering this storm no matter what it becomes or
• 4:08
  Speaker 1: how bad it becomes. We've got to have assets in
• 4:11
  Speaker 1: places that perform in good markets and in bad.
• 4:14
  Speaker 2: Yeah. So we talk in precious metals, we talk in cryptos,
• 4:19
  Speaker 2: and talking consumer stocks.
• 4:23
  Speaker 1: And I love that you pitch that I like the
• 4:26
  Speaker 1: consumer stocks. I like those tried and true method stocks
• 4:29
  Speaker 1: that have been around for a long time and paying
• 4:31
  Speaker 1: very good dividends. And I'm a big fan right now
• 4:34
  Speaker 1: of stocks that have been hit pretty big, like say
• 4:36
  Speaker 1: a dollar general recessionary style stock that you know, if
• 4:40
  Speaker 1: the markets are bad or there is a recession, it's
• 4:43
  Speaker 1: a really good place to buy some things for a
• 4:46
  Speaker 1: lot of the Americans that are suffering the most. And
• 4:49
  Speaker 1: it was if I'm not mistaken, I think it's down.
• 4:52
  Speaker 1: I didn't prepare for this part, but I think it's
• 4:54
  Speaker 1: down sixty plus percent from its highs and there's really
• 4:58
  Speaker 1: no reason for it to be. Dollars is a good
• 5:00
  Speaker 1: place if you're in this area of the country. They're
• 5:03
  Speaker 1: popping up everywhere you turn. There seems to be a
• 5:05
  Speaker 1: dollar General being built, and you know, I think something
• 5:09
  Speaker 1: like that would be a good place. So consumers are
• 5:11
  Speaker 1: definitely consumer. Consumer sector is a great place to invest.
• 5:16
  Speaker 1: I like precious metals. I've not yet gotten on the
• 5:18
  Speaker 1: vandwagon of buying a bunch of gold, but having gold
• 5:21
  Speaker 1: is a great hedge. We also talk about diversification of
• 5:25
  Speaker 1: types of products that investors invest in, and there are
• 5:29
  Speaker 1: ways to safeguard against downturn markets with some insurance based products.
• 5:35
  Speaker 1: I also like options on some of these stocks that
• 5:38
  Speaker 1: we believe to be good for long term trading, perhaps
• 5:42
  Speaker 1: maybe generating some income from covered calls, those types of
• 5:45
  Speaker 1: things that we don't have to be as dependent upon
• 5:48
  Speaker 1: the market movement itself if we're getting the income we desire.
• 5:52
  Speaker 2: Okay, anything any feelings about bitcoin?
• 5:56
  Speaker 1: Yeah, so I know that you're a big fan of bitcoin.
• 5:58
  Speaker 1: I'll be honest. The way we talk to our client
• 6:00
  Speaker 1: it's about bitcoin is I think it's a great place
• 6:02
  Speaker 1: to put some money that you're okay, letting dance around.
• 6:05
  Speaker 1: I don't feel yet that we have a lot of
• 6:09
  Speaker 1: adoption of bitcoin, like we need to see if I'm
• 6:12
  Speaker 1: not mistaken. I caught on the news the other day
• 6:14
  Speaker 1: it was Donald Trump that was at a bar and
• 6:16
  Speaker 1: bought his first a bar in New York City. It's amazing,
• 6:22
  Speaker 1: and you know, type that type of momentum is only
• 6:25
  Speaker 1: going to make bitcoin or crypto currency more and more
• 6:28
  Speaker 1: in favor. I'm not yet ready to say that bitcoin
• 6:33
  Speaker 1: is something we shouldn't pay attention to by any means.
• 6:36
  Speaker 1: I think that we've woken up now that crypto is
• 6:38
  Speaker 1: potentially a currency of the future. But I'm still in
• 6:42
  Speaker 1: the camp of crypto is a asset class, not so
• 6:46
  Speaker 1: much a currency. So if you want to trade crypto
• 6:49
  Speaker 1: to make some money with capital gains, certainly that that's
• 6:52
  Speaker 1: somewhere you could put some money to say, it's a
• 6:54
  Speaker 1: hedge against the oncoming storm that I see happening, or
• 6:59
  Speaker 1: the the sugar crash. Going back to my analogy, I'm
• 7:03
  Speaker 1: just not there yet, and the reason probably carries the
• 7:05
  Speaker 1: clients we deal with. We don't want a lot of
• 7:08
  Speaker 1: volatility in their positions. If we're taking income throughout their
• 7:12
  Speaker 1: retirement years.
• 7:14
  Speaker 2: But it is a non correlated asset and right now
• 7:19
  Speaker 2: as we're talking, it's right around sixty four thousand. Yeah, bang,
• 7:23
  Speaker 2: I buy a little bit every week. Honestly, what oh buy?
• 7:27
  Speaker 2: Because average up, average down, and actually, you know, yeah.
• 7:32
  Speaker 1: Dollar cost averaging into an asset like that is a
• 7:35
  Speaker 1: perfect way to average out your cost if you are
• 7:39
  Speaker 1: interested in bitcoin and to carry I know you are
• 7:41
  Speaker 1: a fan of it. I watched the show. I know
• 7:44
  Speaker 1: that this is something that you enjoy even discussing. It's
• 7:48
  Speaker 1: just more or less coming from my perspective. With retirees,
• 7:52
  Speaker 1: our goal is to minimize the volatility, and something like bitcoin,
• 7:58
  Speaker 1: perhaps in the ETF four fits the bill for that,
• 8:02
  Speaker 1: but directly buying a bitcoin on a coin exchange is
• 8:05
  Speaker 1: not something that we've gotten into at this point.
• 8:08
  Speaker 2: Yeah, well you got your twenty something ETFs that all
• 8:12
  Speaker 2: have bitcoin now, sure, so that makes it a little
• 8:16
  Speaker 2: bit more investible for you, doesn't it.
• 8:18
  Speaker 1: And it's exactly right, And to my point, that becomes
• 8:21
  Speaker 1: a momentum shifter where now things are beginning to be
• 8:24
  Speaker 1: more in favor of bitcoin being adopted as an actual currency.
• 8:30
  Speaker 1: And this is this is all good for those bitcoin investors,
• 8:34
  Speaker 1: my guess.
• 8:35
  Speaker 2: Is you know, seventy five thousand has been a resistance
• 8:38
  Speaker 2: point for bitcoin. If I look at the chart, I
• 8:43
  Speaker 2: think it was seventy three thousand it hit. I'm not mistaken,
• 8:49
  Speaker 2: Peace can't remember now, oh man senior moment here you're okay, yeah,
• 8:56
  Speaker 2: well that's for today. So we look at the one
• 8:58
  Speaker 2: year because it was just recent league and seventy one thousand,
• 9:03
  Speaker 2: four hundred and ninety one dollars that was the peak,
• 9:07
  Speaker 2: and hey, looking at it now, sixty three thousand, it's
• 9:11
  Speaker 2: been trading in a sideways channel with not lower lows,
• 9:17
  Speaker 2: but lower highs for sure. So it's been in a
• 9:21
  Speaker 2: kind of a bull pendant, a bear pendant, I guess.
• 9:25
  Speaker 2: But but you know, I got to see it break
• 9:27
  Speaker 2: out at sixty nine thousand. That's my breakout point. Then
• 9:33
  Speaker 2: it's going to make new highs.
• 9:34
  Speaker 1: And you know that is that is trading one oh one.
• 9:37
  Speaker 1: If it hits through that resistance, we are likely to
• 9:42
  Speaker 1: see that one hundred thousand dollars number that's been prophesied
• 9:45
  Speaker 1: for the last four or five or even six years.
• 9:49
  Speaker 1: I remember I remember bitcoin coming onto the scene and
• 9:53
  Speaker 1: being able to snatch it up at a very low price,
• 9:56
  Speaker 1: and I passed on it, and you know, down a
• 10:00
  Speaker 1: little bit more inclined to say, Okay, this is something
• 10:04
  Speaker 1: that we might want to buy at the next dip,
• 10:06
  Speaker 1: but again at the moment, not something we're purchasing for
• 10:09
  Speaker 1: clients just yet.
• 10:11
  Speaker 2: It's pretty easy to purchase and the hey I'm up nicely.
• 10:16
  Speaker 2: I mean, you know, bitcoin over the past year, it's
• 10:20
  Speaker 2: up thirty six thousand, five hundred dollars, so it was
• 10:25
  Speaker 2: at twenty seven and change. So that's a nice little
• 10:29
  Speaker 2: return there. So you have to curious, how do you how.
• 10:34
  Speaker 1: Do you purchase bitcoin yourself or is that something that
• 10:36
  Speaker 1: you go to the exchanged direct I.
• 10:39
  Speaker 2: Do it at the exchange, even though honestly it's cheaper
• 10:42
  Speaker 2: to do it in ETF at this point. Sure, but
• 10:46
  Speaker 2: I just kind of like having the wallet there.
• 10:49
  Speaker 1: So all right, and I am curious too to this point,
• 10:52
  Speaker 1: we'll pull up here for just another second. Do you
• 10:54
  Speaker 1: see any divergence from ETF pricing and the actual bitcoin,
• 10:59
  Speaker 1: the underlying bitcoin in itself.
• 11:01
  Speaker 2: Not yet, not major divergences, but I think that's in
• 11:04
  Speaker 2: the offing. And that'll because they're you know, san bankman
• 11:09
  Speaker 2: Free showed you can arbitrage crypto. Yeah, He's the first
• 11:14
  Speaker 2: one and really made it popular. So you know, the
• 11:19
  Speaker 2: divergences will not be big enough for individual traders to
• 11:24
  Speaker 2: be able to take advantage of it. You really need
• 11:26
  Speaker 2: a trading bought system to do that. You can't. You know,
• 11:30
  Speaker 2: they're so quick now because there are hundreds of different
• 11:36
  Speaker 2: traders and crypto looking for that little little divergence between
• 11:40
  Speaker 2: the ETF so they can sell one and buy the other,
• 11:43
  Speaker 2: right arbitrage? Yeah, but you know too much for me.
• 11:51
  Speaker 2: I'm just a hobby trader. Yeah, but you know it's
• 11:54
  Speaker 2: making money, then it's a good hobby, right, Why not? Yeah?
• 11:57
  Speaker 1: You so you would be considered more of the long term.
• 12:00
  Speaker 1: Do you do do a lot of trading in and out?
• 12:01
  Speaker 1: Are you long term?
• 12:03
  Speaker 2: I was swing trading it, but then when I saw
• 12:05
  Speaker 2: it broke certain points that it was setting higher, I
• 12:08
  Speaker 2: just held on for the ride. But you know it's
• 12:14
  Speaker 2: at sixty three thousand today, Dale, it could be at
• 12:17
  Speaker 2: fifty three thousand tonight. I know this is true, and
• 12:20
  Speaker 2: it wouldn't surprise me because now that there's ETFs and
• 12:24
  Speaker 2: there's options and futures, it's so easy to manipulate, and
• 12:28
  Speaker 2: there's no law against manipulating cryptocurrency, so everybody loves.
• 12:33
  Speaker 1: It right, right, So just like you part of the appeal.
• 12:38
  Speaker 2: It's just like you can't be charged for manipulating commodities,
• 12:41
  Speaker 2: you can't be charged for manipula manipulating cryptos, but you
• 12:46
  Speaker 2: can be charged for manipulating options on stocks, right. Does
• 12:52
  Speaker 2: that make any sense? Well, you know the rules we
• 12:56
  Speaker 2: work with.
• 12:56
  Speaker 1: I guess is the big appeal, in my opinion, is
• 12:59
  Speaker 1: the it's the wild wild West, the idea that there
• 13:03
  Speaker 1: is no real regulation against the bitcoin marketing. But the
• 13:09
  Speaker 1: more and more it becomes a asset that's traded, I
• 13:12
  Speaker 1: think we see regulations start to creep in.
• 13:15
  Speaker 2: Oh they have it, dude, Yeah, and then they got
• 13:17
  Speaker 2: to because but the other thing is that it's international, transnational.
• 13:23
  Speaker 2: There's no borders, there's no nothing, and the central banks
• 13:27
  Speaker 2: out of the picture. The exchanges are really in your imagination,
• 13:31
  Speaker 2: they don't really exist. Sure, I mean they're there, they're
• 13:34
  Speaker 2: just a website. So I'm not sure about it. But
• 13:39
  Speaker 2: looking ahead here, when we have this conversation in a year, dale,
• 13:42
  Speaker 2: what's going to be the economic landscape here? Man? Assuming
• 13:48
  Speaker 2: that political situation is neutral at best.
• 13:52
  Speaker 1: Sure, yeah, so I think that any uncertainty for the
• 13:57
  Speaker 1: market is a bad thing. And so you know, just
• 13:59
  Speaker 1: the fact that we get the election behind us, I
• 14:02
  Speaker 1: think it's going to give us a little bit of
• 14:04
  Speaker 1: a trend in the right direction for the market. Again,
• 14:08
  Speaker 1: my fear is that we are on the sugar high
• 14:11
  Speaker 1: and that when we start to see the reason why
• 14:14
  Speaker 1: rates are being cut, we could see inflation re emerge.
• 14:19
  Speaker 1: Re emerging of re immersion of the inflation is going
• 14:23
  Speaker 1: to certainly be a halting factor for the market, especially
• 14:28
  Speaker 1: if the Fed has to react again to inflation. In
• 14:32
  Speaker 1: the hills of Kentucky and you know, the Appalachian Mountain
• 14:36
  Speaker 1: region here in Tennessee where I serve, we have wildfires
• 14:41
  Speaker 1: from time to time that spark just out of nowhere,
• 14:43
  Speaker 1: just a little bit of spark ignites a massive wildfire.
• 14:47
  Speaker 1: And you know one recently just almost burned down a
• 14:50
  Speaker 1: city that is that is widely known, Gatlinburg, Tennessee. Oh sure,
• 14:55
  Speaker 1: And in my opinion, I think what we see is
• 14:58
  Speaker 1: inflation was raging and all of a sudden, our firefighters
• 15:02
  Speaker 1: have put it out to say, ninety percent completely done smoldering.
• 15:07
  Speaker 1: But it's smoldering, You're exactly right, and it's still smoldering,
• 15:10
  Speaker 1: and all of our firefighters are headed home. And now
• 15:12
  Speaker 1: they the FED has decided that they are on the
• 15:16
  Speaker 1: other end of their dual mandate to worry about unemployment,
• 15:21
  Speaker 1: and unemployment doesn't seem to be a major factor right
• 15:24
  Speaker 1: this minute, so I'm curious what's going on in their head.
• 15:28
  Speaker 1: And then we've got a potential strike with the port workers,
• 15:33
  Speaker 1: and if that takes place, that could put a major
• 15:36
  Speaker 1: strain on supply, and ultimately it's an economics problem from there.
• 15:40
  Speaker 1: I don't care if you're a Knesian or a Freedman.
• 15:43
  Speaker 1: You have to understand that less supply, more money equals inflation,
• 15:49
  Speaker 1: and if inflation becomes another factor, we could see the
• 15:52
  Speaker 1: market begin to melt down in the face of potentially
• 15:57
  Speaker 1: higher interest rates.
• 15:58
  Speaker 2: Once again, all right, We're gonna leave it at that,
• 16:02
  Speaker 2: uh Dale, Just tell us how we connect with you?
• 16:05
  Speaker 2: Where we find you on the web? Yes, sir, so again.
• 16:09
  Speaker 1: You can go to our website Rdswealth dot com RDS
• 16:13
  Speaker 1: wealth dot Com. Log in there get in touch with
• 16:15
  Speaker 1: our team. You could call our office two seven zero
• 16:18
  Speaker 1: six hundred plan two seven zero six zero zero seven
• 16:22
  Speaker 1: five two six if you'd like to sign up for
• 16:24
  Speaker 1: our newsletter. Jump to our website again rdswealth dot com
• 16:28
  Speaker 1: and push subscribe at the top right for our newsletter.
• 16:31
  Speaker 2: All right, Hey, appreciate you coming on, Yes, sir, and
• 16:34
  Speaker 2: if you've got a question for Dale or myself, shoot
• 16:37
  Speaker 2: me an email kl at Terry Leeds dot com. You'll
• 16:40
  Speaker 2: find the link to dale site in the show. That's
• 16:42
  Speaker 2: this interview on Financial Survival Network dot com. While you there,
• 16:46
  Speaker 2: please join the thirty five thousand other people who have
• 16:49
  Speaker 2: signed up in our subscribers to our newsletter. And Dell,
• 16:54
  Speaker 2: we appreciate you coming. Sugar highs are okay, but then
• 16:59
  Speaker 2: they're followed by crashes and your blood and then you're
• 17:04
  Speaker 2: like half passed out, you need a nap, and then
• 17:07
  Speaker 2: you're thinking, hey, maybe this wasn't worth it. I think
• 17:10
  Speaker 2: that's where we're going to be as well. We'll talk
• 17:13
  Speaker 2: to you again soon. Dale, thanks so much.
• 17:14
  Speaker 1: Asah, thank you Ker.
• 17:15
  Speaker 3: Thanks for listening to carry lets this Financial Survival Network
• 17:19
  Speaker 3: your solution to today's trying times. For the latest, go
• 17:23
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• 17:29
  Speaker 3: than ever