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The Triple Bubble Ready to Blow - Michael Pento #6352 · Financial Survival Network

• 0:00
  Speaker 1: We have a massive bubble inequities and it has to
• 0:02
  Speaker 1: be reconciled. And there's only two ways that can be reconciled.
• 0:05
  Speaker 1: Stocks go nowhere for about ten years and GDP and
• 0:09
  Speaker 1: incomes catch up, or the stock market has to crash.
• 0:13
  Speaker 1: It's the only two ways that is going to happen.
• 0:14
  Speaker 1: And I've never seen a bubble. I've never read about
• 0:16
  Speaker 1: a bubble. I've never witnessed a bubble. I've never experienced
• 0:19
  Speaker 1: the bubble or heard a rumor about a bubble that
• 0:21
  Speaker 1: burst innocuously. They all crash and this one is a
• 0:24
  Speaker 1: gigantic one.
• 0:25
  Speaker 2: You're listening to Carrie Let'sa's Financial Survival Network where you
• 0:29
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• 0:33
  Speaker 2: thrive in today's trying times. You need the Financial Survival
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• 0:47
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• 0:53
  Speaker 3: And welcome you are listening to and watching the Financial
• 0:57
  Speaker 3: Survival Network. We've got America's number one pickle ball warrior
• 1:02
  Speaker 3: with us today, Michael Pentopento port dot com. Michael treats
• 1:08
  Speaker 3: the markets like they were just another game. Of pickleball,
• 1:12
  Speaker 3: and usually he wins. That's why you need to listen
• 1:15
  Speaker 3: to him. Michael, your recent commentary describes the US economy
• 1:20
  Speaker 3: as approaching a historic reckoning. This was in your November
• 1:25
  Speaker 3: seventh piece. Could you simmer summarize please what you see
• 1:30
  Speaker 3: as the core reckoning and the variables involved in it.
• 1:36
  Speaker 1: Okay, the profession I was right, I'll try to do
• 1:40
  Speaker 1: that for you. Well, first of all, you know, I've
• 1:43
  Speaker 1: been saying now for the several years, and I'm sure
• 1:46
  Speaker 1: I'm being derided in many different venues that we have
• 1:50
  Speaker 1: a triumvit of bubbles existing concurrently. So I kind of
• 1:53
  Speaker 1: feel like Alan Greenspan with his o rational exuberant speech
• 1:56
  Speaker 1: in ninety six. Well you know it took three years
• 1:59
  Speaker 1: or four years for that to planet pan out. So yeah,
• 2:03
  Speaker 1: we have the biggest the three bubbles ever in existence
• 2:07
  Speaker 1: in US history, and they all exist together for the
• 2:09
  Speaker 1: first time, so credit, real estate, and equities. And I
• 2:17
  Speaker 1: got to tell you what happened today, So you have
• 2:20
  Speaker 1: you know you guy, a guy named Jensen Wong coming
• 2:22
  Speaker 1: out and giving a beats the street, and the Wall
• 2:26
  Speaker 1: Street sends the stock up to the moon, and the
• 2:29
  Speaker 1: market was up almost like two percent. When I left
• 2:31
  Speaker 1: this morning for my pickupball imagine, and I come back
• 2:34
  Speaker 1: and it's down. Uh, Nvidia is down one percent as
• 2:38
  Speaker 1: as I'm talking, you know, before right before I got
• 2:40
  Speaker 1: on the on the interview with you. You know when
• 2:44
  Speaker 1: it's when the CEO comes out and says that orders
• 2:48
  Speaker 1: first chips are off the charts in a prepared statement
• 2:51
  Speaker 1: for his earnings release. It's just it's just like, am
• 2:53
  Speaker 1: I dealing What am I dealing with anymore? We're just
• 2:56
  Speaker 1: we live in a world of carnival barkers, and it's
• 2:58
  Speaker 1: a freak show out there. It's not just in corporations.
• 3:02
  Speaker 1: It's even in the government where we were giving dividends
• 3:05
  Speaker 1: to people from tariffs which are being repealed as we speak.
• 3:10
  Speaker 1: You know, we have tariffs on on cocoa beans and bananas,
• 3:16
  Speaker 1: which we don't grow in the United States. We're supposed
• 3:18
  Speaker 1: to have tariffs to help rebuild the American middle class
• 3:22
  Speaker 1: and manufacturing base, but we have tariffs on bananas. Doesn't
• 3:26
  Speaker 1: make any sense. So the tariffs are going on bananas,
• 3:28
  Speaker 1: but the tariff revenue is going to go on the
• 3:30
  Speaker 1: bananas too. And it's funny thing is we're talking about
• 3:33
  Speaker 1: sending two thousand dollars stimulus checks to people, and that's
• 3:38
  Speaker 1: supposed to be like a dividend payment. But we have
• 3:39
  Speaker 1: one point eight trillion dollar deficit.
• 3:42
  Speaker 3: It doesn't make sense time, But it doesn't make matter.
• 3:44
  Speaker 1: I mean, from whence and from where are you getting
• 3:46
  Speaker 1: your money from? If we if we have one hundred
• 3:49
  Speaker 1: and twenty four percent debt to GDP thirty eight trillion
• 3:51
  Speaker 1: dollars national debt and it's growing by two trillion dollars
• 3:55
  Speaker 1: per annum, and you're sending out a dividend. No, what
• 3:57
  Speaker 1: you're doing is sending more helicopter money out. But people
• 4:00
  Speaker 1: or people say what they want now, they say that,
• 4:02
  Speaker 1: they say that the demand is off the charts, Which
• 4:06
  Speaker 1: doesn't you sound like a Charlotte. He's like a Carnival
• 4:08
  Speaker 1: barker when you say that. And yeah, yeah, you have
• 4:12
  Speaker 1: a government that says that we're sending out you know,
• 4:14
  Speaker 1: we're giving you a refund check from the revenue from
• 4:17
  Speaker 1: all the revenue from tariffs, which the tariff revenue was
• 4:19
  Speaker 1: supposed to pay down a deficit, bring it to zero
• 4:23
  Speaker 1: and then hopefully start paying down the national debt. Well,
• 4:26
  Speaker 1: is that happen here? You get the truth here. None
• 4:30
  Speaker 1: of those things are even close to happening.
• 4:32
  Speaker 4: That is exactly it.
• 4:33
  Speaker 3: It's just like a tax rebate, but they call it
• 4:39
  Speaker 3: a tariff rebate. And look, we've got to I don't
• 4:43
  Speaker 3: remember how much international trade. We do, something like twenty
• 4:47
  Speaker 3: something trillion. But if you were even to say, you know,
• 4:53
  Speaker 3: a ten percent, we were getting a three percent tariff.
• 4:56
  Speaker 3: If it went up to ten we'd take in two trillion.
• 5:00
  Speaker 3: Which you know what happens though, is you don't really
• 5:04
  Speaker 3: take it in because people find substitutes and they find
• 5:09
  Speaker 3: workarounds right.
• 5:11
  Speaker 1: Well, And the big work around from Liberation Day on
• 5:13
  Speaker 1: April second was we're gonna have massive tariffs on the
• 5:16
  Speaker 1: rest of the world, and we're going to rebuild the
• 5:17
  Speaker 1: Americans manufacturing base. And then when the market crashed like
• 5:20
  Speaker 1: twenty percent in a few days, we've been walking that back.
• 5:24
  Speaker 1: We've been doing the moonwalk on that ever since. So
• 5:27
  Speaker 1: the tower for revenue is gonna be very minimal, and
• 5:30
  Speaker 1: the debt and deficits are.
• 5:31
  Speaker 3: Going to go higher.
• 5:32
  Speaker 1: And hire we have a central bank too that you know,
• 5:35
  Speaker 1: they're trying to reach two percent inflation. By the way,
• 5:39
  Speaker 1: that's now stable prices. It's not you it's two, So
• 5:44
  Speaker 1: you can't reach two for four and a half years.
• 5:46
  Speaker 1: So what do you do when you can't reach two
• 5:47
  Speaker 1: after four and a half years. We ignore inflation, and
• 5:51
  Speaker 1: then that would be bad enough. They're not even ignoring
• 5:53
  Speaker 1: it now. They're going to go back into QI and
• 5:56
  Speaker 1: start low and they're lowering. They're in the process of
• 5:59
  Speaker 1: lowering interest rates. You know that, right, Sure, you can't
• 6:02
  Speaker 1: make If you can't make your two percent inflation target
• 6:05
  Speaker 1: and you miss it to the upside by fifty percent,
• 6:08
  Speaker 1: what do you do, well, you start cutting rais and
• 6:10
  Speaker 1: printing money.
• 6:12
  Speaker 3: Yeah.
• 6:12
  Speaker 1: I feel like I'm in bizarro land here. This is
• 6:14
  Speaker 1: just and nobody tells the truth anymore, whether whether it's
• 6:18
  Speaker 1: you know, orders of orders are vendor financing orders are
• 6:22
  Speaker 1: going through the roof off, the throw off the charts,
• 6:25
  Speaker 1: and we're sending out rebate checks to people because now, well,
• 6:28
  Speaker 1: this is the greatest country the planet has ever seen.
• 6:32
  Speaker 1: But in the meantime, the red ink is spewing, you know,
• 6:35
  Speaker 1: over the damn walls.
• 6:37
  Speaker 4: Yeah, I want to correct myself.
• 6:39
  Speaker 3: Our annual import tab is four point one trillion. It's
• 6:45
  Speaker 3: actually higher than that because that doesn't include illegal imports
• 6:50
  Speaker 3: and a lot of stuff that was going through the
• 6:52
  Speaker 3: deminimous exemption. Even if it was five trillion and you
• 6:57
  Speaker 3: managed to do a twenty percent tariff, that's only a trillion.
• 7:02
  Speaker 3: And then we still have the issue of of substitutions
• 7:08
  Speaker 3: and and workarounds and all of that. So there's no
• 7:13
  Speaker 3: way that the revenue from tariffs could have ever ever
• 7:18
  Speaker 3: made up for the US trade deficit.
• 7:20
  Speaker 4: That's right.
• 7:22
  Speaker 1: Well, tariffs have been in place now for a few
• 7:25
  Speaker 1: for a few months now at least, and we still
• 7:27
  Speaker 1: have a one point eight trillion dollar national annual deficit,
• 7:30
  Speaker 1: annual deficit. So you know, the revenue isn't there. And
• 7:35
  Speaker 1: if the revenue isn't there, and were you giving back
• 7:37
  Speaker 1: to people, you're you're just deficits. You're doing the same thing, Kerrie.
• 7:42
  Speaker 1: What caused the massive inflation that we had post COVID
• 7:45
  Speaker 1: was helicopter money. You went around, you bail out the
• 7:48
  Speaker 1: banking system. You went around the banking system and sent
• 7:50
  Speaker 1: checks directly to people and they went out and spent
• 7:53
  Speaker 1: the money. So it was it was an automatic, huge
• 7:57
  Speaker 1: increase in the broad based money supply. Seeing too few goods,
• 8:00
  Speaker 1: and we had inflation bottlenecks. You know, you remember it
• 8:03
  Speaker 1: was twenty percent inflation the way the way they the
• 8:06
  Speaker 1: way they counted was nine. It was really twenty.
• 8:09
  Speaker 3: And the thing that bothers me about the whole thing
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  Speaker 3: is that the inflation we had was equal parts Trump
• 8:17
  Speaker 3: and Biden. All Right, Trump was as responsible for it
• 8:21
  Speaker 3: as Biden, but Trump got to leave office, so Biden
• 8:25
  Speaker 3: got the entire responsibility for it.
• 8:28
  Speaker 1: But the Trump at least Trump had an excuse.
• 8:32
  Speaker 3: He had.
• 8:32
  Speaker 1: You know, we had the COVID crisis. I mean, the
• 8:34
  Speaker 1: COVID was over. Why it was, But now what's the
• 8:37
  Speaker 1: what's the excuse now? And the greatest economy the world
• 8:40
  Speaker 1: has ever seen? Why are we sending rebate checks out?
• 8:42
  Speaker 1: I mean, I'm all for cutting taxes, it's a wonderful thing,
• 8:45
  Speaker 1: but you're you disrupted the whole world and the markets
• 8:49
  Speaker 1: with with these tariff bs, and now you're trying to
• 8:53
  Speaker 1: send that money back to them. It doesn't make any
• 8:56
  Speaker 1: sense to me. You know what you want to do,
• 8:57
  Speaker 1: Here's what I would do. I would cut taxes and
• 9:00
  Speaker 1: cut spending commensurately, so you starve and kill the cancer
• 9:06
  Speaker 1: known as government. Thank you, Ronald Reagan, and you empower
• 9:10
  Speaker 1: the people. But we're not doing that. But we're not
• 9:13
  Speaker 1: doing that.
• 9:15
  Speaker 3: And that was why initially DOGE seemed really hopeful. And
• 9:19
  Speaker 3: I think DOGE is still working behind the scenes because
• 9:23
  Speaker 3: they made a claim it's coming up now that they
• 9:27
  Speaker 3: plan to using the doge AI tool cut fifty percent
• 9:32
  Speaker 3: of all the government regulations, which are outmoded. A lot
• 9:36
  Speaker 3: of them now are illegal due to recent court case developments.
• 9:41
  Speaker 3: What happens if they cut half the government regulations out there, Michael.
• 9:46
  Speaker 1: That would be wonderful. That would be a huge boon
• 9:49
  Speaker 1: to the private sector. Let's see if it happens.
• 9:53
  Speaker 3: You know.
• 9:53
  Speaker 1: In the meantime, we have let's talk about the credit
• 9:55
  Speaker 1: bubble that we have. I mean, let's talk about live
• 9:58
  Speaker 1: in the real world with AI. I mean, do just
• 10:00
  Speaker 1: been ran out of Dodge for the most part, remember dozs,
• 10:02
  Speaker 1: those of the last cover in the Then the the
• 10:06
  Speaker 1: courts say, well, you can't fire anybody, you know, it's
• 10:08
  Speaker 1: just it's just a cluster mess to clearm to clean
• 10:13
  Speaker 1: my language. But I mean, we have we have things
• 10:16
  Speaker 1: like the credit bubble. We have private equity and private credit,
• 10:21
  Speaker 1: things that were very small back in two thousand and seven.
• 10:25
  Speaker 1: They're exploding through a roof. You've got massive problems in
• 10:28
  Speaker 1: private credit right now. So if you're you're a business
• 10:30
  Speaker 1: and you can't get a loan from the bank and
• 10:31
  Speaker 1: you can't float dead on your own, you go and
• 10:34
  Speaker 1: borrow it through the shadow banking systems. It's second one
• 10:37
  Speaker 1: point three trillion dollars of this stuff out there. At
• 10:40
  Speaker 1: one point, I think it's one point five trillion dollars
• 10:42
  Speaker 1: that So then you have FAHA loans which have supplanted
• 10:45
  Speaker 1: the subprime loan loans. They're not one and a half
• 10:47
  Speaker 1: trillion dollars of FAHA secure loans that they were almost
• 10:52
  Speaker 1: non existent too. There were very very few FAHA loans
• 10:54
  Speaker 1: going into the credit crisis of two thousand and seven.
• 10:59
  Speaker 1: So instead of instead of ninja loans, we now have
• 11:02
  Speaker 1: fachase secure. The government took the government takes everything, The
• 11:05
  Speaker 1: government prints money, takes bad assets onto the balance sheet
• 11:09
  Speaker 1: that you know, the banks make ninja loans while we
• 11:11
  Speaker 1: make that illegal. And then we say, okay, fjall won't
• 11:14
  Speaker 1: do no money down loans. We'll do three and a
• 11:17
  Speaker 1: half percent down. And the these loans are the full thing.
• 11:21
  Speaker 1: There's there's the default rate U the initial foreclosure rate
• 11:27
  Speaker 1: is twenty percent higher year of the year, and foreclosures
• 11:31
  Speaker 1: in general are up a third almost almost a third.
• 11:34
  Speaker 1: Thirty thirty two percent, believe is the exact figure of
• 11:39
  Speaker 1: foreclosures in the greatest economy of the world has ever seen.
• 11:43
  Speaker 3: Carrie, Yeah, it's so great.
• 11:47
  Speaker 1: Is the video goes up six percent because the orders
• 11:52
  Speaker 1: are off the charts. I believe somebody wrote an article
• 11:57
  Speaker 1: about the accounts receivable being like a half a trillion dollar.
• 12:01
  Speaker 1: I mean, come on, and then this little room is
• 12:04
  Speaker 1: about vendor vendor financing. I mean, I'm I'm not gonna
• 12:06
  Speaker 1: say I'm a balance sheet expert on in video, but
• 12:09
  Speaker 1: I you know what. You know what bothers me viscerally
• 12:13
  Speaker 1: is when the CEO talks about businesses off the charts
• 12:17
  Speaker 1: in a prepared statement on his earnings release, I use
• 12:22
  Speaker 1: like I cringe. I'm cringeing, and maybe the market is saying, like,
• 12:26
  Speaker 1: wait a second, this is something wrong here, because in
• 12:30
  Speaker 1: video is up six percent in the pre market and
• 12:33
  Speaker 1: now it's down. Why what's going on? It's all part
• 12:38
  Speaker 1: and parcel of this bubble mentality where people don't tell
• 12:41
  Speaker 1: the truth anymore and they just lie. They just lie
• 12:43
  Speaker 1: to you about tax rebates and refunds, and how great
• 12:47
  Speaker 1: the economy is. In the meantime, the bottom four quintiles
• 12:50
  Speaker 1: have been suffering mightily since COVID. YEP, I keep my
• 12:54
  Speaker 1: hearing people, the idiots on some of these channels say, well,
• 12:59
  Speaker 1: you know, income, I have kept up with the rate
• 13:01
  Speaker 1: of inflation?
• 13:03
  Speaker 4: Whose incomes?
• 13:05
  Speaker 1: Kerry? First of all, thirty percent of the work the
• 13:10
  Speaker 1: American citizenry is not in the workforce. Okay, thirty percent.
• 13:17
  Speaker 1: So what what that retirees make up? Like a quarter,
• 13:21
  Speaker 1: like a twenty I think it's twenty or twenty five
• 13:22
  Speaker 1: percent of people are retired. Tell me if you're retired
• 13:27
  Speaker 1: and it's one fifth or one third of the of
• 13:29
  Speaker 1: the of the voluntari, tell me if your retirement income
• 13:33
  Speaker 1: has kept up with inflation? What about the underemployed and unemployed?
• 13:38
  Speaker 1: Has their incomes kept up with inflation? And even if
• 13:41
  Speaker 1: you want to lie and say that it's true if
• 13:44
  Speaker 1: you're employed and say and say, well, okay, well incomes
• 13:47
  Speaker 1: have kept up with inflation post COVID, that's only if
• 13:51
  Speaker 1: you lie about inflation. Yeah, obviously, I mean, I don't
• 13:56
  Speaker 1: know how home prices if you up twenty percent a
• 13:58
  Speaker 1: year of the year and your inflate official inflation CPI.
• 14:01
  Speaker 1: You know, the core Personal consumption Expenditure Index is up
• 14:05
  Speaker 1: like seven. Well, well then, and then we're going to
• 14:08
  Speaker 1: give you a you know, we're going to give you
• 14:09
  Speaker 1: a four percent raise and say you're keeping up with inflation.
• 14:14
  Speaker 1: It's just all bogus. And I've been I've been carry
• 14:18
  Speaker 1: I've been doing this for thirty five years. I have
• 14:20
  Speaker 1: never seen so many parts of the economy, markets in
• 14:23
  Speaker 1: its highlight zone.
• 14:25
  Speaker 3: Everything is rigged. Michael, Right, Well.
• 14:29
  Speaker 1: Yeah, I gotta tell you it looks it looks more
• 14:31
  Speaker 1: and more like finding the truth is is like looking
• 14:35
  Speaker 1: for a needle in this in the haystack.
• 14:37
  Speaker 3: As they say, So, how do you play this here?
• 14:41
  Speaker 4: Well, first.
• 14:42
  Speaker 3: Do things protection and profit.
• 14:46
  Speaker 1: So so first thing you first you have to throw out.
• 14:48
  Speaker 1: First thing you have to throw out is the mancher
• 14:50
  Speaker 1: from Wall Street that you can't time markets. No one
• 14:53
  Speaker 1: knows when a recession is coming. You can't predict a
• 14:55
  Speaker 1: credit crisis. So just buy and hold a sixty forty portfolio.
• 14:59
  Speaker 1: Do you remember back in twenty twenty two, Tell me
• 15:02
  Speaker 1: how your sixty forty portfolio did. If you don't remember,
• 15:05
  Speaker 1: I'll remind the audience that the S and P fell
• 15:09
  Speaker 1: about twenty percent in twenty two, but long duration bonds
• 15:13
  Speaker 1: lost over a third. It was the third of their value.
• 15:17
  Speaker 1: Now that's the US treasuries. I'm not talking about you know,
• 15:20
  Speaker 1: some exotic penny stock, you know, high high, high yield
• 15:25
  Speaker 1: piece of junk. I'm talking about US treasuries lost over
• 15:29
  Speaker 1: thirty percent of their value in twenty twenty two. And
• 15:33
  Speaker 1: and and the reason is both those asset classes were
• 15:37
  Speaker 1: in a bubble bubble. So when you're both when both
• 15:42
  Speaker 1: asset classes are in a bubble, and the and the
• 15:44
  Speaker 1: carnage is going to start from the bacle on the
• 15:46
  Speaker 1: bond market and the credit market starts melting down, Well,
• 15:49
  Speaker 1: that part of your portfolio isn't going to work. And
• 15:52
  Speaker 1: then when rate spike and mortgage's rate spike and corporate
• 15:57
  Speaker 1: borrowing cross spike and valuations crumble, both sleeves or your
• 16:03
  Speaker 1: portfolio are gonna are gonna go swirling down the toilet.
• 16:07
  Speaker 1: You're gonna get So you have to be you have
• 16:09
  Speaker 1: to be an active manager. And for me, i'd rather,
• 16:12
  Speaker 1: I'd rather than the market was up ten percent and
• 16:15
  Speaker 1: I was up eight percent. For example, in twenty twenty five.
• 16:19
  Speaker 1: I'd rather something like that was the case. And then
• 16:22
  Speaker 1: and then you said we underperformed the S and P
• 16:24
  Speaker 1: five hundred. Well, I don't have an S and P
• 16:26
  Speaker 1: five hundred fund only, but I participate in bull markets.
• 16:29
  Speaker 1: But here's what I didn't do. I didn't lose you
• 16:31
  Speaker 1: fifty percent when reality hit. And if you look at something,
• 16:34
  Speaker 1: it's just simple is look at the total market KAP
• 16:37
  Speaker 1: of ecuaries as a percentage of GDP, And yes, that
• 16:39
  Speaker 1: is still a very valid metric. I don't want to
• 16:41
  Speaker 1: hear about people say, well, you know, US corporations are international,
• 16:46
  Speaker 1: so the numerators, you know, the nominator numertor ratio is bogus. Well, no,
• 16:51
  Speaker 1: that's just straight played out wrong. First of all, foreign
• 16:54
  Speaker 1: corporations are building stuff and producing stuff in America. That's
• 17:00
  Speaker 1: g NP and GVP. Those denominators are very closely related.
• 17:04
  Speaker 1: They're actually in fact, in fact, they're almost the same.
• 17:08
  Speaker 1: So it is a valid metric. And when the total
• 17:10
  Speaker 1: market cap of equities is two and twenty percent of GDP,
• 17:14
  Speaker 1: you've got a real problem because the market could drop
• 17:17
  Speaker 1: by half and still be overvalued. And it's not just that,
• 17:20
  Speaker 1: it's it's the it's the earnings yield being negative, it's
• 17:24
  Speaker 1: priced the sales being in a record high, the trailing
• 17:28
  Speaker 1: twelve month pe ratio being you know, way out of whack.
• 17:32
  Speaker 1: So we have a massive bubble in equities and it
• 17:37
  Speaker 1: has to be reconciled. And there's only two ways that
• 17:39
  Speaker 1: can be reconciled. Stocks go nowhere for about ten years
• 17:43
  Speaker 1: and GDP and incomes catch up, or the stock market
• 17:47
  Speaker 1: has to crash. It's the only two ways it is
• 17:49
  Speaker 1: going to happen. And I've never seen a bubble. I've
• 17:51
  Speaker 1: never read about a bubble. I've never witnessed a bubble.
• 17:53
  Speaker 1: I've never experienced the bubble or heard a rumor about
• 17:56
  Speaker 1: a bubble that burst innocuously. They all crash. And this
• 17:59
  Speaker 1: is one who's a gigante. So you could believe me.
• 18:01
  Speaker 4: You could.
• 18:02
  Speaker 1: You can comment that I'm an idiot, you can say
• 18:04
  Speaker 1: I'm a Cassandra, you can say what do you want?
• 18:06
  Speaker 1: I don't care. I am an active manager participating in bubbles,
• 18:11
  Speaker 1: but with an eye out of with a very robust
• 18:15
  Speaker 1: algorithm that lets me know when I need to get
• 18:17
  Speaker 1: more defensive. You could do what you.
• 18:19
  Speaker 3: Want, all right, Well, and that's interesting and at least,
• 18:25
  Speaker 3: there are things you can do to protect yourself.
• 18:28
  Speaker 1: So yeah, can I tell you what they are? First
• 18:30
  Speaker 1: of all, First of all, you can't be in sixty
• 18:32
  Speaker 1: to forty portfolio. I just mentioned that, but you could
• 18:34
  Speaker 1: own some precious metals. By the way, in a liquidity crisis,
• 18:37
  Speaker 1: those will go down, so so silver, platinum, those will
• 18:40
  Speaker 1: go down. Gold may be less so, but it'll only
• 18:42
  Speaker 1: go down for a short period of time. You should
• 18:45
  Speaker 1: be a buyer when that happens. But you want to
• 18:47
  Speaker 1: protect yourself. Really, there's four things that could protect yourself.
• 18:50
  Speaker 1: There's cash, there's short term bonds. The US dollar will
• 18:55
  Speaker 1: most often work as a as a as an offset
• 18:58
  Speaker 1: because of will ECUITI crisis, everybody wants US dollars. That
• 19:00
  Speaker 1: might not work this time, but for sure you also
• 19:03
  Speaker 1: have to short the market. So there's only four potential
• 19:05
  Speaker 1: things that work, and at least three of them are
• 19:08
  Speaker 1: mandatory cash, short term bonds, and shorts. And if you
• 19:11
  Speaker 1: don't exit your if you don't exit your your shit
• 19:14
  Speaker 1: coin holdings, and you think that that's gonna If you
• 19:18
  Speaker 1: think that you're an alternative asset class is BTC and
• 19:24
  Speaker 1: all those other thousands of other derivatives like you know,
• 19:28
  Speaker 1: we got doze coin, You've got a million other things
• 19:30
  Speaker 1: that One of the reasons why I don't like cryptocurrencies
• 19:34
  Speaker 1: is because while bitcoin is limited to twenty one million units,
• 19:38
  Speaker 1: well there's there's just there's a gazillion other ones that
• 19:41
  Speaker 1: serve the same function of being decentralized and an open
• 19:45
  Speaker 1: ledger blah blah blah blah blah, immutable transactions. They all
• 19:49
  Speaker 1: perform the same function. I mean, if there was if
• 19:52
  Speaker 1: there was an unlimited number of elements in the Earth's
• 19:56
  Speaker 1: crust that were very very rare. There were differ but
• 20:00
  Speaker 1: they were rare, and they never and they were indestructible,
• 20:02
  Speaker 1: and they were discovered discovering that element every every day,
• 20:07
  Speaker 1: Well gold would lose some of its luster because I
• 20:09
  Speaker 1: have so many other choices. I have so much competition
• 20:12
  Speaker 1: for that which is very rare, very beautiful and destruct
• 20:15
  Speaker 1: and indestructible. Right, you follow that philosophy, unlimited number of
• 20:20
  Speaker 1: blockchains that we create can be created. And Wall Street
• 20:24
  Speaker 1: has bastardized the price a bitcoin by pimping it like
• 20:26
  Speaker 1: whors you know, everywhere you look, you know, it's crypto.
• 20:29
  Speaker 1: Crypto bowlers are pilling piling up on TV left and
• 20:32
  Speaker 1: right telling you is that, you know, taking an asset
• 20:35
  Speaker 1: class that probably has some function, some real utility. Maybe
• 20:39
  Speaker 1: if if you want to get your money out of
• 20:40
  Speaker 1: a country that's going and solvent, maybe it's worth a
• 20:43
  Speaker 1: few thousand dollars in unit. But it's not a few
• 20:45
  Speaker 1: thousand dollars. It's one hundred and twenty thousand dollars a unit,
• 20:48
  Speaker 1: which is ridiculous. It's all bigcoin is is a code.
• 20:51
  Speaker 1: It's it's not a lot. It's it's a bunch of
• 20:53
  Speaker 1: numbers in letters. It's all your own. It's electronic numbers
• 20:56
  Speaker 1: and letters that you could take them all, put them
• 20:58
  Speaker 1: in cold stores and write them on a piece of paper.
• 21:00
  Speaker 1: But how much do you want for that piece of
• 21:02
  Speaker 1: paper kerry.
• 21:04
  Speaker 3: Whatever the market will yield. I wish I was the
• 21:07
  Speaker 3: one that thought of it in the first place. Yeah,
• 21:12
  Speaker 3: so gold and silver is really your only defense here.
• 21:16
  Speaker 3: What do you think of the recent movements of silver
• 21:19
  Speaker 3: fifty dollars and ounce. They've been fighting it like mad.
• 21:23
  Speaker 3: I don't want it. It's conspiracy theories. But it seems
• 21:26
  Speaker 3: like comex GPT cannot get used to the fact that
• 21:31
  Speaker 3: fifty that silver is over fifty dollars an ounce. Yeah.
• 21:36
  Speaker 1: So so in the vanguard of protecting yourself against inflation,
• 21:43
  Speaker 1: I always look to gold. Silver and platinum are secondary
• 21:47
  Speaker 1: and tertiary roles in my view. But bear in mind
• 21:50
  Speaker 1: what I did say is that in a liquidity crisis,
• 21:53
  Speaker 1: everything gets sold. So just keep that in mind. And
• 21:55
  Speaker 1: that to me is, you know, if you look back
• 21:58
  Speaker 1: in two thousand and eight, late two thousand and you know,
• 22:03
  Speaker 1: the summer of two thousand and eight into the Fall
• 22:06
  Speaker 1: of Oe and then didn't rebound until around you know,
• 22:09
  Speaker 1: January February of nine. Gold is a wonderful asset and
• 22:15
  Speaker 1: wonderful hedge, but in a liquidity crisis, you sell everything.
• 22:19
  Speaker 1: That is why I didn't make my what I called
• 22:21
  Speaker 1: a four horsemen of the economic apocalypse. Now gold is
• 22:24
  Speaker 1: out performed the S and P in the last quarter century.
• 22:29
  Speaker 1: And I think now that we have a federal reserve
• 22:33
  Speaker 1: which is going back into QE, which is lowering interest rates,
• 22:37
  Speaker 1: you're going to get a new head of the thed
• 22:39
  Speaker 1: which is going to be what I call an obsecree,
• 22:41
  Speaker 1: a sikaphant in the nursery regime, who's going to take
• 22:46
  Speaker 1: interest rates. I mean, you got this guy in Iran
• 22:48
  Speaker 1: who wants to slash a series of fifth this is
• 22:51
  Speaker 1: what he said, a series of fifty bases point rate cuse,
• 22:56
  Speaker 1: so he wants So we're going back to you know,
• 22:59
  Speaker 1: we're going back towards zero interest rate policies, We're going
• 23:01
  Speaker 1: back into QE, and the deficit is going to go
• 23:05
  Speaker 1: from where it is today around two trillion dollars to
• 23:07
  Speaker 1: six trillion dollars in the recession. So if that's all
• 23:11
  Speaker 1: we're aheaded. If the liquidity crisis is genuine and it's coming,
• 23:16
  Speaker 1: be aware that the market is so overvalued, it's going
• 23:20
  Speaker 1: to be like a huge black hole sucking everything down
• 23:23
  Speaker 1: except for what I just mentioned, and I'll mention it again,
• 23:25
  Speaker 1: short term treasuries, the US dollar, and your ability is short.
• 23:31
  Speaker 1: The market adroitly will protect you and make you profit
• 23:36
  Speaker 1: from what's happening. And I would, and I would use
• 23:39
  Speaker 1: the liquidity crisis to stock up on gold, primarily because
• 23:44
  Speaker 1: you're I think you're looking at a double digit fed's
• 23:48
  Speaker 1: balance sheet from where it is today, double digit fed's
• 23:51
  Speaker 1: balance sheet for short negative real interest rates once again,
• 23:54
  Speaker 1: and inflation that's going to run intractable. So go get
• 23:57
  Speaker 1: it while it's on sale. Well forced al as a
• 24:00
  Speaker 1: goal of is what you should be looking to buy.
• 24:04
  Speaker 3: Right, just like what happened in eight no nine, right,
• 24:09
  Speaker 3: gold and silver crashed and then uh temper of dollars
• 24:14
  Speaker 3: and then they took off.
• 24:15
  Speaker 1: Temporary exactly said that's use that quick, use that as
• 24:19
  Speaker 1: your entry point, because that's that's gonna that's going to
• 24:22
  Speaker 1: bounce the hardest and fastest.
• 24:25
  Speaker 4: All right.
• 24:26
  Speaker 3: So when we're looking at the liquidity event, which is
• 24:33
  Speaker 3: inevitably going to occur, most of the collapses we've had
• 24:37
  Speaker 3: have always hinged on that liquidity event.
• 24:40
  Speaker 4: How far off do you see it happening?
• 24:43
  Speaker 1: I can't give you. I can't give you a date.
• 24:45
  Speaker 1: I can tell you where. I can tell you when
• 24:46
  Speaker 1: it's hash starting to happen. So what I've said, this
• 24:48
  Speaker 1: is what I'm doing. Yes me, I manage money for
• 24:50
  Speaker 1: a living. I'm on the record saying that it looks
• 24:55
  Speaker 1: and you're you're listening to somebody who said that we
• 24:57
  Speaker 1: were in reflation and a growth cycle all of twenty
• 25:01
  Speaker 1: twenty five. So this is not a perma bear speaking
• 25:04
  Speaker 1: here someone who says that we were happily participating in
• 25:08
  Speaker 1: the bullmarket lately, and I mean the last couple of weeks,
• 25:12
  Speaker 1: we've been becoming a little more cautious because high yield
• 25:16
  Speaker 1: spreads have stopped contracting, their starting to rise. Financial conditions
• 25:21
  Speaker 1: have stopped easing, they're starting to tighten. If you look
• 25:25
  Speaker 1: at other things like you know, the five year five
• 25:29
  Speaker 1: year forward inflation spread. If look at copper gold ratio.
• 25:34
  Speaker 1: I have a model. There's twenty components and aggregate in
• 25:37
  Speaker 1: the model. The model tells me just to get a
• 25:39
  Speaker 1: little more cautious. So it's not a binary event. I'll
• 25:42
  Speaker 1: say bullish bearish.
• 25:44
  Speaker 3: I don't do that.
• 25:44
  Speaker 1: I'm just saying that liquidity is tightening. I don't know.
• 25:49
  Speaker 1: If it's the yen carry trade that's evaporated. I don't know,
• 25:52
  Speaker 1: if it's the reverse repo facility it's now bankrupt and
• 25:55
  Speaker 1: at zero. I don't I shouldn't say bankrupt. It's back
• 25:58
  Speaker 1: to zero cheap, so reverse rebuff facilities. The excess reserves
• 26:02
  Speaker 1: from banks that were once was two and a half trillion,
• 26:05
  Speaker 1: now it's zero but effectively zero. So that is one
• 26:09
  Speaker 1: of the reasons why the Fed's panicking, because when when
• 26:11
  Speaker 1: you have bubbles like this, you have to keep you
• 26:13
  Speaker 1: have to keep inflating them otherwise they just collapse on themselves,
• 26:16
  Speaker 1: collapse on themselves, they implode. So I'm getting more cautious,
• 26:21
  Speaker 1: That's what I'm doing. So I'm selling some of my
• 26:23
  Speaker 1: AI related stuff and I'm but I brought some health care.
• 26:28
  Speaker 1: I did increase the short that I have in the market.
• 26:30
  Speaker 1: So I'm just I'm just not interested in going down
• 26:32
  Speaker 1: with the ship. And we're not going to go down
• 26:33
  Speaker 1: with the ship God rolling, We're not. We are going
• 26:35
  Speaker 1: to take the appropriate steps when the credit and the
• 26:38
  Speaker 1: credit is to two ways you get a credit crisis.
• 26:40
  Speaker 1: One is because of a deflationary recession slash depression when
• 26:43
  Speaker 1: there's no money around, and the other one is when
• 26:46
  Speaker 1: the liquidity runs out in the bond market, and that
• 26:48
  Speaker 1: you have a bond market crisis where it rates spike
• 26:51
  Speaker 1: even though this you know, the economy is not yet
• 26:54
  Speaker 1: falling to pieces. I'm looking out for both those occurrences
• 26:58
  Speaker 1: and I'm going to protect the sid That's what we do.
• 27:01
  Speaker 3: So I have a theory that these markets actually when
• 27:06
  Speaker 3: these things.
• 27:07
  Speaker 4: Happen like eight No.
• 27:09
  Speaker 3: Nine, they actually happened long before the public is made
• 27:13
  Speaker 3: aware of them. So all the perhaps the insiders who
• 27:18
  Speaker 3: know can adjust their portfolios accordingly, it's kind of like
• 27:24
  Speaker 3: a black hole gobbled up that star twenty years ago.
• 27:29
  Speaker 3: We're looking through our telescope and that star looks like
• 27:32
  Speaker 3: it's still there, but in reality, it's gone. And that's
• 27:36
  Speaker 3: what I think has happened to the silver market and
• 27:39
  Speaker 3: the gold market. I think they've already imploded, but nobody
• 27:44
  Speaker 3: bothered to tell us.
• 27:46
  Speaker 1: That's your theory. Yeah, that's your theory. I base my
• 27:52
  Speaker 1: entire model on it. And now I've been doing this
• 27:54
  Speaker 1: for thirty five years. I used to work on the
• 27:56
  Speaker 1: floor in New York sac Change. I'm not a neophight
• 27:58
  Speaker 1: by any mean. What you said is how I is
• 28:00
  Speaker 1: what I based my model on. What you're really saying
• 28:03
  Speaker 1: is that the stock market is based on insider information. Okay,
• 28:08
  Speaker 1: the people who know what's going on. I call it
• 28:12
  Speaker 1: the few oligarchs that that run this planet, the multi
• 28:17
  Speaker 1: multi billionaires that run this world. Okay, they know when
• 28:21
  Speaker 1: the major asked the major banks their assets are starting
• 28:27
  Speaker 1: to erode. They know, and they act, and that's why
• 28:30
  Speaker 1: you see that My model looks at the arcane parts
• 28:32
  Speaker 1: like CDs spreads, these arcane things that you know CNBC
• 28:36
  Speaker 1: would just tell you buy and hold or this market
• 28:38
  Speaker 1: went down today. We don't know what happened. No, it
• 28:41
  Speaker 1: was happening. Is is that credit The credit markets are
• 28:46
  Speaker 1: starting to fracture and financial conditions are starting to tighten,
• 28:51
  Speaker 1: and the market is going down. They say, well, it's
• 28:53
  Speaker 1: just a normal correction. The fifty look at the fifty
• 28:55
  Speaker 1: day moving errors or the two undred Dame move erers.
• 28:57
  Speaker 1: I remember the Golden Cross or the Desert bs. The
• 29:02
  Speaker 1: insiders know, they react. I'm following them. That's what the
• 29:07
  Speaker 1: model is based on.
• 29:08
  Speaker 3: And I think it's already I think the silver price
• 29:13
  Speaker 3: fixing mechanism has already collapsed.
• 29:16
  Speaker 4: It collapsed back.
• 29:18
  Speaker 3: I think in May when silver crossed thirty two dollars
• 29:23
  Speaker 3: and the price became uncontainable. And I think we're seeing
• 29:28
  Speaker 3: the same thing there. The black hole already gottle the star,
• 29:32
  Speaker 3: but we're still seeing the light coming from the star
• 29:35
  Speaker 3: because we're light years behind the insiders.
• 29:39
  Speaker 1: Yeah, well you don't have to be if you have
• 29:40
  Speaker 1: the if you know what, if you know the insiders
• 29:42
  Speaker 1: take steps to protect themselves and if you follow that
• 29:46
  Speaker 1: their actions, you could you could be saved like they are.
• 29:51
  Speaker 1: They don't come on CNBC and announce what they're doing.
• 29:54
  Speaker 4: I can tell you that, and they don't brag about it.
• 29:57
  Speaker 4: They keep their mouths.
• 29:58
  Speaker 1: Shut, keep their mouths shut. They do what they have
• 30:01
  Speaker 1: to do, and you need to follow them. I don't
• 30:07
  Speaker 1: know them. They're about friends of mine. They don't tell
• 30:10
  Speaker 1: me what they're doing, but I can see their footprints.
• 30:15
  Speaker 3: That's the sign of a market pro. You can actually
• 30:18
  Speaker 3: see because you don't see it directly. You don't hear
• 30:22
  Speaker 3: them place in the orders or see them, but you
• 30:25
  Speaker 3: see the aftermath and you see the patterns. We're talking
• 30:27
  Speaker 3: pattern recognition, and that's what sets you apart from some
• 30:32
  Speaker 3: guy who just says buy ets.
• 30:35
  Speaker 1: Well, first of all, or thereabouts of money managers don't
• 30:43
  Speaker 1: manage the money in a you know, in a long
• 30:47
  Speaker 1: short strategy. Their rubric is, well, I'm going to kind
• 30:50
  Speaker 1: of put some money here that looks like the S
• 30:52
  Speaker 1: and P, and I'll put some money here in the
• 30:55
  Speaker 1: in bonds based on your age, and I'm going to
• 30:57
  Speaker 1: go out to the golf course and try to raise
• 30:59
  Speaker 1: more money. They're salespeople. And then you have the people,
• 31:03
  Speaker 1: you know, the small amount of people who actually run
• 31:05
  Speaker 1: a long short strategy, but how many are really economists
• 31:09
  Speaker 1: and market strategists. How many of those people are and
• 31:12
  Speaker 1: how many of those people actually have an algorithm that
• 31:14
  Speaker 1: works that gets you out.
• 31:17
  Speaker 4: I mean, all right, the alharithm.
• 31:20
  Speaker 1: My monel picked up on COVID before, you know, I
• 31:24
  Speaker 1: didn't know if it was a I don't know if
• 31:26
  Speaker 1: it was the sniffles coming from China or if it
• 31:29
  Speaker 1: was the Bebonic plague. I didn't know. But my model said, WHOA,
• 31:32
  Speaker 1: something's happening here. Insiders are dumping and they're buying the
• 31:36
  Speaker 1: protection for their portfolio, and I'm going to do what
• 31:39
  Speaker 1: they do. Yeah. I'm not saying that I'm some kind
• 31:44
  Speaker 1: of you know, super genius or I have this kind
• 31:47
  Speaker 1: of knowledge that no one else knows. I just been
• 31:49
  Speaker 1: doing this long enough, and I'm independent and objective enough
• 31:53
  Speaker 1: to say, what what what do I need to look
• 31:56
  Speaker 1: at to let me know when there's a problem, a
• 31:59
  Speaker 1: real problem in the credit markets, or when a recession
• 32:03
  Speaker 1: is going to happen. Well, and and that's where I credit.
• 32:07
  Speaker 1: That's the model. That's what the model built of it.
• 32:09
  Speaker 3: You're what we call Michael in the trade, a certified
• 32:12
  Speaker 3: algorithm decoder.
• 32:14
  Speaker 1: All right, I guess I'll take it. I don't know
• 32:16
  Speaker 1: that I don't. I don't even know if that means,
• 32:18
  Speaker 1: but it sounds good. It's better than instead of being
• 32:21
  Speaker 1: the used carpet salesman.
• 32:22
  Speaker 3: How's that a certified financial algorithm decoder, because that's exactly
• 32:28
  Speaker 3: what it is. You see the patterns, Yeah, understand the
• 32:32
  Speaker 3: algorithm behind it, and then you act accordingly.
• 32:35
  Speaker 4: Hey, just tell us.
• 32:36
  Speaker 3: Where we find you how we need to get more
• 32:39
  Speaker 3: info on the fund there.
• 32:41
  Speaker 1: So, the penzo Port website is penzoport dot com. I
• 32:46
  Speaker 1: have a weekly podcast for fifty dollars a year. You'll
• 32:50
  Speaker 1: get my thoughts on the saling, economic data and a
• 32:53
  Speaker 1: high level view of the markets. And then if you
• 32:56
  Speaker 1: were a US citizen and you have one hundred thousand
• 32:58
  Speaker 1: and you qualify for long short strategy, you're suitable for it.
• 33:01
  Speaker 1: I'll manage your money directly in the inflation, deflation and
• 33:04
  Speaker 1: economic SOCCO model, where I have some of my money
• 33:08
  Speaker 1: there too. I mean, my my client's money is in it.
• 33:10
  Speaker 1: My you know, my money in the for the market,
• 33:14
  Speaker 1: you know, not my real estate holding them up. But
• 33:16
  Speaker 1: my money is in there too because I eat my
• 33:18
  Speaker 1: own cooking, and I would the only way I would
• 33:21
  Speaker 1: be able to invest in this market is if I
• 33:24
  Speaker 1: had that algorithms otherwise I wouldn't I wouldn't trust it.
• 33:27
  Speaker 1: I would be scared.
• 33:29
  Speaker 4: To death.
• 33:30
  Speaker 1: And I'm sure a lot of people are, and they
• 33:31
  Speaker 1: should be people who are people who are honestly objective
• 33:34
  Speaker 1: and they see what's going on around them with you
• 33:37
  Speaker 1: know them, you can't afford a home. Home prices are
• 33:40
  Speaker 1: unaffordable for the first time home buyer. The stock market
• 33:44
  Speaker 1: is way overvalued. You're looking at this gambling and this
• 33:48
  Speaker 1: nonsense that's going on in the credit markets, and you
• 33:50
  Speaker 1: see people borrowing, you know, billions of dollars for this
• 33:55
  Speaker 1: AI craze, which reminds me a lot of the Internet
• 33:59
  Speaker 1: craze in two thousand.
• 34:01
  Speaker 3: Great exactly, dodri Holm.
• 34:03
  Speaker 1: It's a great technology, it's productivity machine. It's going to
• 34:06
  Speaker 1: be wonderful. But there's over spending on it now.
• 34:10
  Speaker 3: Over capacity like everything else that they do.
• 34:13
  Speaker 4: And you make a great point there.
• 34:16
  Speaker 3: Hey, stay safe on the pickle ball court, don't running
• 34:20
  Speaker 3: backwards whatever you do, just let the ball pass, because uh,
• 34:25
  Speaker 3: you know, you got a lot of a lot of
• 34:27
  Speaker 3: investors in your fund there who are counting on you
• 34:31
  Speaker 3: to stay healthy and mentally sound.
• 34:35
  Speaker 4: Here.
• 34:36
  Speaker 1: Wow, Okay, I will, I will, I'll wear a helmet,
• 34:38
  Speaker 1: my Frank.
• 34:38
  Speaker 3: Is idea good idea. Well, it's those compound wrist fractures
• 34:44
  Speaker 3: that really kill you and the Achilles tendon ruptures that
• 34:48
  Speaker 3: pickleball is famous for it. In fact, I wrote a
• 34:51
  Speaker 3: book that I just dropped recently called hoa Emperor, about
• 34:55
  Speaker 3: a guy who goes into witness protection. He comes to
• 34:58
  Speaker 3: South Florida. He starts taking over h oa's, turning them around,
• 35:03
  Speaker 3: making them beautiful, all the while stealing them blind. And
• 35:07
  Speaker 3: one of his scams is pickleball, So he's got the
• 35:10
  Speaker 3: Great Pickleball Caper of Port Efford, Lades.
• 35:17
  Speaker 1: All right, good to see you, Gerry.
• 35:19
  Speaker 3: You well, take care.
• 35:21
  Speaker 2: Thanks for listening to Carrie Letz's Financial Survival Network, your
• 35:26
  Speaker 2: solution to today's trying times. For the latest, go to
• 35:30
  Speaker 2: Financial Survivalnetwork dot com. Financial Survival Network now more than
• 35:36
  Speaker 2: ever