Peak Prosperity - A Recessionary Entrée, With a Side of Dumb Money, Seasoned With Magic Money

Episode Date: March 21, 2025

The Fed split the difference by turning hawkish on rates but dovish by reducing the pace of QT. Inflation is still too high, but the economy is clearly rolling over. Meanwhile, the very foundations of the UYS dollar system were called into question by Elon’s comment about “magic money machines.”Click Here for Peak Financial Investing

Nothing in this program should be considered investment advice. It is for educational purposes only Please hit pause and read this disclaimer in full The greatest curse and the greatest blessing is our country is our dollars the global reserve system, right? It comes with all kinds of responsibilities and burdens That's also a huge advantage to us in comparison to the rest of the world if used correctly It's also a huge advantage to us in comparison to the rest of the world if used correctly. The following is the audio version of a video released at peakprosperity.com. Visit peakprosperity.com to watch the video and to find other insightful content such as articles, discussion forums, and exclusive subscriber-only content.

Hello everyone and welcome to this edition of Finance U. I'm your host Chris Martensens, CEO of peakfinancialinvesting.com and back with Paul Kiker of Kiker Wealth Management Paul so good to be back with you. Wow, we got a lot to talk about today. Oh, we do. These plates keep spinning and spinning and tilting one way or other don't they? Yeah. So Paul, three big things on my plate today. I want to talk today about the Fed because they just came out with another thing where they flap their gums and reliably every time the Fed talks the markets go up. So that's a take that to the bank kind of a moment. Also, you distinguish between a watch and a warning

because you're from tornado country. And I'd love to hear how your experience was just the other just this past week. Wow. A watch is when the tornado is on the ground. A warning is maybe something's coming. I want to talk about recession watch today. And, boy, let's talk about dumb money, can we? So that's what I have on my plate.

You got anything else? Now we'll follow through with that and i'll fill in as we go along, you know All right The news about elon musk and that that video coming out. I'm sure we'll get to that But that's something that that I kind of want to talk about too Indeed the magic money machines if people don't know about that. You should know about that if you have money and you Hey, he's just talking about nothing big, Paul, just that maybe the denominator is an unknown thing in the world of money.

And we should maybe talk about that because that matters in the world of money. All right. So the Fed came out, Jerome says, what did you say here? He says, you know, they're going to hold rates steady, sees a little bit slower growth, higher inflation. I'm not sure where they're getting that, but that's what they're seeing. I see it a little differently. I'm looking more at deflation now, but at any rate, it doesn't matter what I think.

And here are the two dot plots. Here's the one from last December so we can compare. And then the one right below me here is from March, this one that just came out. It's a little bit harder to read just because this one starts in 2024, so I removed that year so it didn't confuse us. So we really have to compare this column, which is in yellow, to this one. First thing we notice here for me, Paul, is that 2025, the Fed, and as of March, sees the interest rate, I just sort of had to squint at that, but maybe the average that is just

under 4%. Well, in back here, just in December last meeting, they were thinking it was going to be about, I'm going to call that three and a quarter percent. So that's about a half a percent higher rate into this year. That's a lot more hawkish in the scheme of things. Normally that would sink stocks, not this time. This time, I don't know what stocks are doing, bouncing at the moment. I think the biggest news that the market may be responding to is the dramatic cut in quantitative tightening, which is where they're reducing their balance sheet and pushing Treasuries

off their balance sheet into the market. They're going from $25 billion a month now down to $5 billion a month, which is a dramatic reduction. Oh, that's big. I missed that. Yeah. So that dramatic reduction, you know, and of course, why not just go to zero at this point if you're going to go from $25 billion to $5 billion.

So I think that over overcame in the market's view the hawkish response of what all four now were expecting. So they went from itching to cut to none of the FOMC members saying four cuts in 2025, which is down, you know, one from December. So my assumptions of market responded to the quantitative tightening news more so than, than the hawkish nose. So we knew that was coming though, right? That shouldn't be a big surprise because we saw that while the Fed had been tightening, the Treasury had been there just throwing money out the door and been eating into what

were called excess reserves over at the Fed. So that was a huge monetary machine, right? Cash was coming out into the markets and all of that. So I think the Fed has to reduce its tightening because that big pile is now, it's out. I think they just ran out this week. So I knew the Fed was going to have to stop, stop the QT because they've been just passing the baton. First, the Fed prints all the money, hands it to the banks, the banks stash it. Then the treasury spends it all.

When they run out, then the Fed goes back. Prediction Paul, by the end of this year, we're back to quantitative easing. I'm pretty sure of it. I would say that's a very good prediction. I would expect so as well. And it makes sense that they've got to cut the quantitative tightening because I don't know as today, I meant to look how much of the nine trillion they've been able to roll over so far.

But I mean, that's a lot that's coming into the market and they need rates to be at least steady or lower. Yeah. Well, going back to this now, we see that for 2026, same story though, Paul, here, I would call that a rate around 3% as of December. And here we are in March and that's got to be closing in on 3.4, 3.5. So we're in that zone. Again, I just drew those dotted lines by eye, so you decide if you think there's more or less weight above or below that line. But that's pretty big. It went from, you know, 3% on the dot to maybe 3.4. And then same thing when we go out here to longer run. They longer run. The Fed somehow magically thinks we're gonna have a 3% Fed funds rate, and you know, they don't get there somehow magically thinks we're going to have a 3%

fed funds rate and you know, they don't get there in 2027. It's just a little higher than 3% longer run, I guess is about the same long, long run. So they think 3% is the native rate, which you know, that was, that's, that's an old number like they're just literally talking their book here which is like well you know if the the US government can reliably run about a three percent deficit on GDP that's been the number that they've been sticking to for a long time I don't know if they've actually looked at what's happening but the federal government ran a three hundred seven billion dollar deficit for February it was 307 in February I I missed that. February alone.

Wow. Wow. So you can talk Doge, you can talk this and that. They push, they slam the continuing resolution through and we're spending at the same pace we've always been spending. So really nothing's happened. You know 200,000 for a hamster study ain't gonna move the needle in this story. 307. It's astonishing. 307, that is is well and that's amazing with the judges. They're they're coming in and blocking the attempt to cut some of this fat out of the government as well and especially the links and the self interest that some of these apparently have based on the reports that are

coming out as well. I'm so old Paul I remember that judges were supposed to recuse when they had any apparent conflict of interest real or or a parent Yes This judge that we do the Bose whatever guy his daughter like works directly for the thing that he's trying to preserve That's an automatic recusal in times past but we're way past that we don't live in that world Do we no we don't and that's when morality and ethics actually mattered apparently and now it seems that this political division within our country to some individuals matters more than doing what's right.

Hello everyone I'm Chris Martinson of Peak Prosperity and I want to tell you about something. So you probably heard about the Great Reset. You know things are highly uncertain right now. There are things happening in the markets that just don't make a lot of sense and there's an unfortunate conclusion lurking under all of that which is that there's some people out there, I call them the raccoons of Wall Street, who have found ways legally, air quotes legally, to take your money, your wealth, your stocks, your bonds, maybe even your house from you. This falls under the idea of something called the great taking, and it's a fairly complicated

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please consider taking advantage of this amazing offer to get educated and then take action to protect your wealth because the great taking, it's a very real thing. Obviously, they wouldn't have spent so much time finagling the law and putting in this trigger if they didn't mean to pull it one day. Let's hope that they don't, but if they do, I want you to be on the right side of the line so that you're not on the great taking side of the line. Now, back to our program. There's a lot of things sort of peeking out at this exact moment in time, including the JFK files got released. I'm letting other people dig through them because there's 80,000 new pages I went through enough of them Paul to go

It's exactly what you thought the CIA was busy From the 50s 60s 70s. That's the period of these of these documents. We were everywhere just doing stuff, right? monkeying around You know starting to start wars. We tried to start wars in Cuba, we were trying to foment unrest in Chile, Brazil, we probably did. So it was just a story. The point here is, is that, and we'll get to this, but, but Elon just said that there are these magic money machines potentially that they found that exist in the government,

not in treasury alone, which you might expect emitting payments, but in HHS, state, DOD. Point here is that, Paul, if we had people who were self-interested enough to think that it was their duty, obligation, and right to change the course of history in other countries by whatever means necessary, isn't it unthinkable to maybe suspect that we need a complete audit to find out that they were, that our money system, but they're like, where's, it's, that's supposed to be the last, like you, the last thing you can apparently trust is that the money we say is in the system is the money in the system.

The Fed meets, they control it, quantitative tightening, it moves markets. This is what we focus everything on. But Paul, that's because we think we know what the denominator in the story is. Is there a chance that we don't know what the denominator is? Oh, I think the information is becoming extremely clear. We know it from human nature that the potential is there, but we're starting to see evidence that that potential is there. Exactly. And I just made the comment off the cuff, maybe going into the election, that I felt

like specifically the Democratic Party, and not just the Democratic Party. I'm talking about the extremes on both sides and these political hacks. There's no boundary that they're willing to cross to keep themselves in power. Unwilling to cross, right. Unwilling to cross, that they're unwilling to cross. Now, of course, we see that in the information of what we've been doing to other countries, and there's nothing more dangerous than someone that believes that they're doing the right thing and integrity doesn't matter. I think that's why, at least in Christianity, you have these boundaries that you are not supposed

to cross that's not okay to cross. We keep those boundaries in place, but they don't seem to be respecting any boundaries. And if that has occurred with these magic money printers, then what faith can we have in our currency? And I think it's hard for the average individual to really understand because we tend to assume that other people are as trustworthy as we are. But they've shown that they're not trustworthy in expecting these boundaries that for whatever agenda they have is more important than the laws and rules that are set in place to protect the integrity of our currency.

Speaking of which, this was astonishing to me and this speaks to the idea that you have to be pretty nimble as an investor these days because we don't, these ideologues you're just describing, right? They'll do anything because right and wrong don't matter. The ideology is what's important. Well, they can mess some stuff up. Did you hear this yet? No. Did you hear? All right. This is Tim Walz. Uh, you know, I think looking for some, for some points, here's what he says. I know some of you know this on the iPhone. They've got that little stock app. I added Tesla to it to give me a little boost during the day. 225 and dropping.

So. Okay, here's a presidential hopeful taking one of the top seven country companies in this country that has done innumerable good that just a few weeks or months ago would have said this is one of the most important countries. In fact, some companies so important, Paul, we're going to mandate that you have to buy electric cars. We're going to give taxpayer you have to buy electric cars. We're going to give taxpayer money to subsidize this.

That's how important because climate change and he somehow switched to the point he is now cheering the destruction of one of the top companies in America that hires people. So you're not going to see any CNN articles and think crying. Oh my God, look at all these Tesla people who just lost their jobs. It's terrible. And that's only terrible if you're a bureaucrat Siphoning off the system. I am shocked Paul to hear a major political figure from the left from the Democrats cheering the destruction of a company because he disagrees with The well Elon he's just trying to save some money. He's just trying to stop the country from hemorrhaging.

Can you believe we're here? I mean, what do you make of this? I can't believe that I have actually been shocked because there was a period of time with this electric agenda and the climate change and everything that that I really struggled, you know, I would assume that someone's following agenda when they're when they're purchasing a Tesla. I could just about assume their political stance from that point of view. And especially when you're looking at, hey, there's no way that we have the resources to complete the agenda that

they laid out there. And now all of a sudden they've swung the other way to where they're destroying Teslas and they hate the company. Well, were you really supporting them to begin with for what they were doing from a climate agenda? Because you've got somebody out there that's motivating you to do that and you're making an emotional decision. Was it a belief or not? What Elon does with Tesla, they're amazing cars.

While my staff has got one and I'm absolutely amazed by it, but I cannot believe that a political figure is stepping out there and cheering on the destruction and further fueling the destruction of Tesla. Because there's people out there that are going, oh yeah, that's an excuse for me. I need to join the resistance and go out there and do damage to Elon Musk. Well, they're doing it to the dealerships and the individuals that own them and the individuals that own the cars that are out there. And they haven't done enough to go, well, if you destroy enough of these, your own insurance

rates are going to go up because insurance companies are going to have to repair these things. So, it's just horrendous to me that we've reached this point that the left is so hateful of anything that this administration or Trump does that they're willing to harm the average American. Well, in somebody who just bought a Tesla under different circumstances it wasn't a political statement necessarily like it is now so they might be a good person right? Probably are. They have kids, they have a job, they're working and you're gonna destroy their car because you're

mad at Elon because he's trying to stop the government from going bankrupt Right, right Well into me that's just further evidence that they're so against this because You know Some people we've been able to track it back to with the information that's come out But just on the evidence that they're raising this much Terror over the fact that we're cutting out wasteful spending, that just leads me to believe that more and more that that wasteful spending is working its way

back into their own pockets and they're trying to protect themselves regardless of the damage it does to the to the future of this country. Well, I get that. Now that would be fine by me, right? If they said, not fine, I mean, we might still disagree, but if they came out, Paul had some moment of honesty and said, look, if you cut this spending, I will lose my job. And I'm a little worried that I actually don't know how to do anything else because I was kind of raised for this kind of a position. If I'm not making PowerPoints for international development, Paul, I don't know what else to do.

I might starve. I'm worried, right? I would go, okay, it's fair, you know But that's not what they're saying. They're saying he's a Nazi or whatever that means At least I could thank them if they're that honest a lot like there I may not agree with it, but I at least I can respect them and instead of instead of okay You're completely against anything that that comes to light This prudent and a fiduciary role from the government that's there, you're wanting to just protect your own agenda and force that upon the American

people. And that leads me to believe that they would be totalitarian in nature if they were ever to get the power that they desire. Exactly. Well, this could get messy because this is, the violence is now ramping up, not unexpected by myself. But can we switch now, Paul, real quick? Can we talk about recession watch, right?

A warning means there might be circumstances where a tornado might exist, but a tornado watch says, oh, one's on the ground. And you're in a cone of possibility for it. Recession watch. This is a big one for me, Paul uh... lizianne saunders here reporting there's a link down there to her x count for this post three-month average restaurant bar retail sales growth negative for second month in a row but pretty negative uh... in the scheme of things so normally restaurant bar sales very sensitive leading indicator for me i watch watched this one pretty carefully. I was a little bit surprised to see it fall off that hard that fast. That's a

sign. So no longer a warning. That's that's one of my watch signals right there. That is a watch. So based on our tools and what we're seeing the money flow we are on watch like in different sectors and my question is okay is it gonna be a situation like 2000, 2003, where money flows back into value stocks that have just been, you know, beaten down and thrown out, thrown out the window to chase the technology story? But that's, I'm not surprised by that actually, from what I'm hearing from clients that I serve that are in the manufacturing industry and even the businesses that are

out there, they're seeing some pretty dramatic slowdowns that they haven't seen outside of recessions and multiple different industries that have manufacturing production in the United States with national customers, national and North American customers. These are also on my recessionary area, Paul. Same idea. Nick Gurley, we've seen some of his charts before. Weirdly, for whatever reason, domestic migration is now outbound from Austin, Texas. Again, this is a very small little data point, one city out of a lot. But the city, actually for the first time in a long time, lost 13,500 people outbound. And home prices are down almost 20% over the past two plus years.

So you can see that dynamic right there. And then he had another one showing Travis County in Texas, again, 30% above pre-pandemic norms, big, big things going on. And then if I could find it real quick, he also showed the same dynamic weirdly in Florida that Florida is now experiencing net out migration for some reason. And I was in the wrong one. I got to go to his his actual thing here. That'll be better. Now I'll find it. Do do do. Yeah, this one. So he says counties all over Florida losing people first time in 20 years, Pinellas County, which is St. Pete Clearwater, lost 3.9 thousand people in 2024 due to move outs.

And you can see the domestic migration. I'm finding this a little surprising because, you know, COVID, those were the two hot zones people flooded in. I don't know. Maybe we're making too much of it, but it is, I, here's what we knew housing got way overextended. You see all the videos, tick-tock young people crying. They can't afford it 50, 60, 70% of their take-home pay just to afford a place to live.

It got stretched. Median incomes, median house prices. There has to be some correlation there. And that got way stretched and out of bounds. So we knew there was going to be a snap back at some point. Is that what we're seeing here or just something else? No, I think we're probably reverting to the main, but I also understand why we're seeing people leave Florida

because I'm hearing some stories of new people that have come into our community. So I have so much fun with the clients and individuals that I meet that move here, because they moved from North to Florida, and then for whatever reason, they'll move back. There was a lot of that prior to the 2007, so I tease them and call them halfbackers. They move now and halfway back. So it's really fun with them, but I've met probably 15 people or so just in the past

60 days that have left Florida. It's taken them quite some time to sell their properties. They didn't get them what they wanted to get them for. And the biggest reasons that they're leaving is because their property and casualty insurance is going up so much. Or they can't get it. Or they can't get it. Their HOPs are going up dramatically.

And two, they just didn't, you know, the hurricanes is something new that they had not experienced before. You know, we've had a couple of come through in the past couple of years and they're really concerned about what they're seeing about all the houses on the market that haven't been able to sell. So they were one of the smarter ones or shrewd ones that went ahead and cut prices ahead of everybody else got out and they're coming to the North Georgia mountain area, North Georgia, Tennessee, North Carolina.

So I think those are a lot of the factors that are taking place. I mean, some of the stories I'm hearing about increases in HOA fees are just horrendous. And I've got a family member that I was talking to him yesterday, his HOA fees doubled in the past 12 months on the property that they had in South Florida. And they've doubled over the past five years as well. Yeah, related, because this is part of that story. So excuse me for looking down. I was trying to find it, but the Wall Street Journal just came out today here on the 19th of March with this. Many condo owners can't sell their properties because of a mostly secret mortgage

blacklist. And that's at the, I believe at the Fannie Mae level. I don't quite understand this. I haven't read it yet that the newspapers sit literally on my kitchen table. But I just wanted to draw that in here. Like something, something weird is going on out there in these markets. That is weird. I don't know why they would blacklist. The only thing that, that I have heard that would make sense for them, for the mortgage

lenders blacklisting is you remember? Oh, I don't know how long ago it was. Maybe within the past two or three years, that condo collapsed in Florida because of ill repair. So there's been a new bill that's come through, which has caused a lot of the increases in HOA fees in some of the older buildings that they have to bring them up to code from what I understand. Now, take this with a grain of salt because I'm going off of an article I read about a week and a half ago and I've covered a lot of information in the past week. But there is a lot of worry of some of those older structures that they could do the same

thing that that building did. So that may have something to do with a blacklist. I mean, I would understand that. Hopefully it's not just a political blacklist. No, it's, but, but people can't sell condos, um, which surprise, probably you can sell those straight up to, um, somebody who doesn't need a mortgage like black rock or something. But at any rate, um, yeah, so, so there's some things out there, but, um, you know, for a long time, right, real estate's been this bulletproof thing. People have been able to sell their houses, But you and I are old enough to remember that sometimes houses go down in price.

Sometimes the markets freeze up for a variety of reasons. Mortgages get hard to come by. People can't afford them. But I've been surprised at just how long, how stupid. I think the market stayed because of that gap between median income, median price, especially given that mortgage rates went up. I thought that was just gonna, you know, it proved highly resistant to selling off under that dynamic. Well, and I haven't had a chance to dig into it, but apparently there's there's rumors

or information coming out of that FHA that they've not been foreclosing on, you know, over several million properties that haven't been making their payments for whatever reason. Oh yeah. Yeah, so if I remember it was somewhere in the neighborhood between six to eight million properties that were behind on their mortgages that they were just writing off. But you think if there was just five million properties to be foreclosed on out there, that's going to drive prices down.

I can understand if you had no line that you were unwilling to cross from a political point of view, you wouldn't want that to occur before the election, but that's not a free market either and we've got to get back to free market. So if all of this comes about, I'm concerned that people are going to be extremely disappointed by their expectations of what real estate is going to do. It turns out that airline ticket sales have just collapsed of late. Yes. So that too, so those are really my sensitive indicators, right?

Food out of the house, travel. Those are the two things that are sort of discretionary. They tend to be at the front end. You see those fall off way before people cut back on roof repairs or something really more core, like food at home, stuff like that. But at any rate, I think those are leading indicators to say there's some kind of recession on the way here. Feels about right.

We've seen a little bit of a sell-off in the stock market. I think we're down about 10% or so interestingly Predictably there have been all these calls from Wall Street like is that is are we gonna get a fed put or not? I'm like if you're just down 10% off a year all-time highs and you're already crying like little babies About needing a bailout Maybe you don't really run in a market anymore. You know, or you're carrying way too much gross leverage and net leverage.

Hey, I got to give it to the Bitcoin investors. They know how to handle volatility. I will give them that. You know, your traditional stock market investors in retail, they get shaken up by, you know, predict or Wall Street gets shaken up by that five to ten percent correction. But, you know, that is a warning. That's a shot across the bow. And I believe we've had a lot of birth pains over the past several years. And for whatever reason, the feds had the firepower to postpone the delivery of this recession that's going to be out there. And they put the future of our country at risk.

They have saddled, if we don't fix this, burdens on the next generations that are not going to give them the opportunity that the Baby Boomer generation has had. They were given a foundation to build from, from their parents and the forefathers before them. And that generation and leadership, really and this is not an individual talk, I'm talking about as a generation, it's just human nature, has not been a good steward for what they'll pass down to the next generation. And hopefully, hopefully we can deal with a little bit of pain now so that it's not a death blow down the road.

Well, look, what we're trying to figure out right now is just how much of our economy was like pure fraud. Yeah. Right. And it's a, it's a, it's a non zero number, right? Um, and so that's no way to go through life son, but, but you know, this is the thing that drives me a little nuts. Paul's it. Elon came in and he just took a look at the scenario and Scott Bessent, they take a look at the new Treasury Secretary.

They just look at the data that you and I and everybody here can look at. It's easy data. Look, we were spending more than we were taking in. The government was running persistent 6, 7% of GDP deficits and eventually that breaks. So you got to get that under control. And all they did was come in and say say like any corporations that's like taking a controlled dive into terrain, they go, what do you do? Free spending, eliminate some redundant departments.

Maybe you throw a few babies out with the bath water, but it happens, right? Because it's kind of an emergency. You got to triage this patient so it doesn't bleed out on the table, right? All right. To mix all sorts of metaphors. But that's all that's all they're doing. It's like what I consider to be common sense, prudent business things that you would have to do to stop something from breaking him completely. And what's been astonishing to me is watching a bunch of rhino. So I'll just call them Republicans who don't

understand economics, apparently. And a lot of Democrats, almost to a person, saying, yeah, no, we liked it the old way. We'd much rather crash this thing. And you know what? Darn the next generations, we don't care about them at all, right? And I just, I don't have a lot of respect for that position on multiple, multiple levels, but that's been their position.

Hey, I want this gravy train works as is for me today, and I don't care about tomorrow. Right, right. And that's what I don't understand. And I think that's why what they have a 20% approval rating at this point for most of those, and they still don't get the story. They still don't understand that things have changed.

They're tone deaf from what's taken place, because they're so self-centered in their ideology that they can't even understand another perspective. But I don't know anybody out there, unless they're acting like a political cultist, right, that doesn't understand that we've got to get this waste out of the government. We can't continue it forever. Now I do understand the individuals that are impacted by it, and they gotta be sad about that. But it can't go on forever, so we're better off to deal with it now

than we are later when people are even less resilient to deal with it, as they would be now. Because the good thing is, where we are now, at least the markets are at high, they can sell some profits and reposition themselves to build a better and solid foundation if they manage what they've got prudently. They'll get through this just fine as long as they're willing to accept the truth of the situation and understand it needs to be changed and deal with the

future with eyes of reality instead of your you know, rainbows and sunshine. Well, let's, if we can, Paul, very quickly then, because, because, I mean, this is central to it. So, um, Mr. Guns and Gear, we follow each other. Uh, can't wait to meet him in person someday. One of my Twitter friends, but he posted this thing, which was a podcast that Ted Cruz has. I don't know who even who the other guy is, but, uh, Elon, minute 15 seconds, and he says this stuff which is really important, I think every investor has to listen to this and decide for themselves, yay or nay, I believe it

or I don't, or he's got it wrong or whatever, but we're gonna have to struggle with this one a tiny bit I think, at least to dismiss it, but I will remind everybody before we watch this that Elon isn't just some guy who just went way out of his lane. His first company, which would be the crown jewel in anybody else's life, right, was PayPal. So that whole thing is payments, payment message systems, banking, finance. So I'm going to say that Elon maybe isn't as much of a rube as some people have tried to tell me. Like they just, I've had people, Paul say, I just isn't as much of a rube as some people have tried to tell me like they just I've had

People Paul say I just didn't know what he was talking about It's crazy. It's what you say magic money computers Well, tell us about it because I never heard of that until you brought that up. Okay, so You may think that these that the government computers Like all talk to each other. They synchron, they add up what funds are going somewhere and it's coherent. And that the numbers, for example, that you're presented as a senator

are actually the real numbers. One would think. One would think, they're not. Yeah. Okay. I mean, they're not totally wrong, but they're probably off by 5% or 10% in some cases. So I call it Magic Money Computer, any computer which

can just make money out of thin air. That's magic money. So how does that work? It just issues payments. And you said there's something like 11 of these computers at Treasury that are sending out trillions in payments? They're mostly at Treasury. Some are, with the sum at HHS, some at,

there's one at, one at State, there's some at DOD. I think we found now 14 Magic Money computers. 14, okay. They just send money out of nothing. They just send money out of nothing. They just send money out of nothing. All right. Now, this is kind of a weird thing because the only entity that's allowed to do that is the Federal Reserve, right?

Banks obviously make money out of nothing, but the money is created and the loan is created. So the cash and the debt come together. That's modern banking. I get that. He's not saying that. He's saying, Paul, that there are government machines that just emit payments. He said it twice. So I'm not sure he was misspeaking. Well, what's interesting is Nick and I debated this today and kind of talked through this.

And I know you were involved in that just for a moment, but I focused on, because I've listened to Elon Musk enough in his interviews with Joe Rogan and others. Every time that he's out there, I like to listen, especially when I'm on the tractor. Every now and then I'll butt pause a podcast or something of that nature.

And, but with Elon Musk, what consistently happens a butt pause, a podcast or something of that nature. But with Elon Musk, what consistently happens if he's asked a question in an interview, he'll think, he'll pause for 15 or 20 seconds and I stop, retract or pull out my phone and like, oh, he's thinking. So I do believe that he pays very close attention to what he says and how he says it. So I've been focused on the magic money printers. Now I think most people are going to have a hard time understanding because we understand the banking system, right?

So Bank A sends money to Bank, well, Bank A has to process a transaction from customer A to customer B. Now everybody's probably had a large enough check frozen in there at some point because they have to verify those funds come across. They have a vested interest in that taking place. Because if they allow funds from A to go to B and then it gets sent overseas and they can't claw it back, that bank's responsible for those funds. That's one of the reasons if a client wants a third party transaction with us, we go way out of the way to make it as hard as possible, not for the

client, but because of identity theft and things of that nature, like we have to know that it's that client going out because we're responsible for those funds if we're not paying attention. So the banking system pays attention. I'm going to turn sideways in this kind of theory or just pointing a different perspective that I want people to think about. So you're the bank, you're behind what's the most trusted source, right? The Fed or Treasury payments.

So we would assume that these computers, when they issue a payment from DOD or wherever it comes from, what those 11 agencies that are out there, that it's accounted for on the ledger and it's either added to the national debt or drawn down for the balance sheet within the treasury, because the Fed's the only one that can just create money out of thin air, supposedly. If these magic money printers are literally just throwing digits at the local bank, I mean, that means there's more money in circulation than what's accounted for across the board. That makes sense that inflation and then how much grift and griftcraft and corruption can come out of that. So to me, it's a game changer from the standpoint of can we really trust a fiat currency, because

we have to assume that at least if they're going to expand the money supply, we know you can calculate the inflationary impact that's going to be there or the reduction in the deflation that could take place. Like in 2008, I don't agree with the response, but still, at least you understand, hey, we have to assume that this deflation is going to be over at this point. But now, nobody has the tools if you've got magic money printers that are out there that can just inject capital in the system. And what our national debt right now is what 37 trillion?

Is it Chris? 37, 38-ish somewhere around there? Even if it's 10%, that's over $3 trillion. Now, I know that's not an exact representation because how long has it been going on? But how can you trust our currency if that's what's taken place? Well, and I've had people say, and there's, we have these beautiful tribe of people at peak prosperity. One of them has been working literally payment messaging systems for 30 years, nose a cold.

Says, Chris, that can't happen. The book on this stuff is, you know, this thick. And you know, if that ever happened, you know, if that ever happened, you know, what must be happening instead is Elon's confused. They send out a payment, but somehow it has to route through the Treasury General account, the TGA, which is maintained by the Fed. And he's saying this is a tight system. So what we're talking about is Elon has potentially said this isn't an integral system of banking. For you and I, it is, right? You go down and you get an ATM and you take out $2.16 for a slushie, that comes out to

the penny from your account. There's like, it's tight. There's no leakage, right? You don't wake up one day and find out they accidentally took out $1.59 or twice that. Doesn't happen. That's our experience of it. But what Elon is saying is, no, no, there's these magic money machines. They just sort of issue stuff. Could that happen? Right? That's our experience of it, but what Elon is saying is, no, no, there's these magic money machines.

They just sort of issue stuff. Could that happen? Right? Some people tell me, no, it can't. But Paul, this is, this is actually the U S dollar system. And this, this little tiny little red thing right in the center here, that's the, the treasury general account, the TGA. This is the federal reserve in the center with the green.

These are all the Fed member banks, all that. But there's also an offshore Eurodollar system. There's all these banks and intermediaries and clearing houses. And here's you, you're here, you're here. You want to put a dollar in what you're saying. It has to clear from bank A to B, right? And like, look at this plumbing. So what Elon is saying is potentially

This plumbing is very complicated and it might have some leaks Right. We got some water in the basement potentially we should figure this out How surprised would you be Paul to find out that that system's got a couple holes in it somewhere? At this point, I would not be surprised at all just because of the information that Doge has already uncovered, and especially from his statements. So, look, he understands ACH because of his relationship with PayPal. There's no magic money printer within PayPal, right?

But he goes further and says, you know, what you're reported, you don't know, I butchered that because I was trying to make notes real quick, Magic Money Computer just issues payments out of thin air, right? So he is literally saying with his understanding of PayPal and other that he would issue payments out of thin air.

As I think through that, what I've been shocked about that Doge has discovered is the lack of investment into upgrading the technology and processes through efficiency within the government where you've got, what was it, the pensions for the government employees, they're done by paper and then they're shipped down and stored in this underground ball. I don't- Oh. That's retirements. Yeah, all retirements are handled on a trolley on an elevator in a bicycle. I'm not worried that they stored them down there. I love the fact that there's a backup of the paper, but what concerns me is how hard it

is to go back and audit that. So what is there to say that people aren't getting government pensions with fake documents that you got to go down there and dig through. There's a gatekeeper in there somewhere that can change that. So he literally said that it's created out of thin air. And look, I don't understand it as much as the other individual or those, but I do know how it's accounted in the banking system. But am I wrong in the fact that they're just sending a digital transaction

ledger from this computer to a banking system and once you put those digits of the $10 million or whatever it is into that banking system, and there doesn't have to be a verification from the treasury, that's just numbers that goes in the system and it works its way through. Am I completely crazy? Well, I mean, again, my understanding is probably terrible, but, you know, the way it works is that, you know, if the Fed is at the center of this whole thing and the Fed is the prime gatekeeper of the double entry bookkeeping system, you're bank A. I'm bank B, right? One of my clients writes a check to one of your clients, right? So what happens is you get a, or they ACH some money over.

Well, in theory, you could just go, oh, my client has this new money in their account, and I just go, oh, okay, well, let me take it out over here. But there's a whole system that's supposed to do that automagically, right? It's a messaging system, and it says, you know, credit $100 there, debit $100 here. That's what happens. And then the main repositories at the Fed, that message system loops back up into this real-time settlement system, and the Fed's watching all of this on their balance sheet, on their books somewhere.

You have a T-balance account, I have a T-balance account, $100 comes off of mine, $100 goes onto yours. We're all settled settled and we're good That's the idea But So we don't have something we don't know What are these magic money machines issuing domestic or is it international because if it's international? Now the Fed doesn't necessarily have to be involved you go through the swift system. It goes through it bypasses the Fed entirely

You go through the swift system, it goes through it, it bypasses the Fed entirely. Who even knows if there isn't like some bank that they've set up in the Caymans that doesn't even need a message settlement. It just like receives something, pretends it has money and then issues money out with it. Who knows? Like we need more detail. But to your point, my trust has been so broken about what we found that just how sloppy they've been, how careless they've been, how self-interested they've been without a full audit.

I'm not really going to trust anything at this point, right? John, I'm with you on that. I mean, the only way to find the truth is to bring everything into the light before the American people and have the courage to lay it out the way it is. I mean, that's like when a family has an intervention with a family member, everybody sits down and they all have the conversation and discover the information,

as much information as they can at the same time. What's the government's responsibility to be a steward for the people and to lay information bare. I understand that there are state secrets in what takes place from our defense, but when it comes to our money, that's something that they take from us

at the risk of going to jail for the rest of your life and losing everything you have, basically with a gun to your head. I know technically they don't do that, but a jail gun to your head that says you pay these taxes, they have to in turn be open and honest with us on how that money is being spent. And, you know, correct me if I'm wrong on this,

now on the Federal Reserve, they can create money out of thin air, but they do account for it on their balance sheet, right? So if they expand the money supply and you are the bank and they step in, they're creating digits that goes into your account, but they're accounting for it on that balance sheet over simplification, but still they're creating, they're creating, they're creating those digits to inject into the system, correct? Yes, but, but I'm gonna

put an asterisk on that just because I think it adds color to the story The Federal Reserve has never had a transaction level audit in its entire history Never never I don't understand that at all When they get audited because they say oh no we're audited when they're audited What they do is they hand a balance sheet to KPMG and say, does it balance? And KPMG looks at the numbers they've been given and go, yes. Well, it's my rule of life.

If you give people an unaudited anything, eventually you're're gonna have not just cheating by one or more members. It will become an institutional part of how they operate over time You know what that reminds me of so so I had an acquaintance that that His wife thought that he was cheating on her. So she wanted to see his phone records So finally, you know after much argument he gives passcode, lets her look at the phone records. She says, like his phone call log, she said, okay, great. Now I want to see your phone records. And he refused to give over the phone records because you can't delete phone calls from your phone record log, right? So that's one thing, you're giving them the information.

You have to assume that they're going to give the information that we want you to see without the ability to see all the information that really took place behind. That amazes me. And in particular, there's a law that's on the books that forbids the GAO from ever peering into what the Federal Reserve is doing with respect to offshore money transfers. I don't understand that. Well, how could you? Is the taxpayer like really? Congress sat down and said we're going to write a law about this, but they did. So we're going to write a law that keeps So, we're going to write a law that keeps the stewardship of our entire, the greatest curse and the greatest blessing is our country, is our dollars, the global reserve system, right?

It comes with all kinds of responsibilities and burdens, but it's also a huge advantage to us in comparison to the rest of the world if used correctly. That's amazing to me. It's my rule. If somebody resists being, having their phone records looked at, I have to assume they're guilty. Right? It's just, it's how I'm built. Right? You know, if somebody says, hey, Chris, I'm going to make change for you at a stall at the flea market says, don't count it. I'm going to have to count it. You know, so at any rate.

Well, you know, while you're looking for that, I'll say this, there's a time to say no. Like I always told my kids when they turned 16, I said, if you get pulled over and a cop asked you to search your car, I don't care if you don't have anything in there or not, your answer is no. You're not searching my car without a warrant.

I said, but at the same time, you know, if I asked to look at your phone records, I get to see it. It's one thing if you have that relationship closely that's in there. It's another thing if you're driving down the road and they need to have due process to be able to search a car. That's just basic protection of our freedom so that you're not set up. But in this case, they have a responsibility and a relationship and taking our taxpayer dollars and managing our monetary system to be open and honest before the American people.

Otherwise, what's going to happen is what we're finding out happened through USAID. You think it's this, you know, great aid organization. It's like making a contribution to the local food pantry to make sure that people can't that can't afford food because they've hit hard times is going to have food on their table for their kids. Right? Even the contributions that I make to the local food pantry from time to time, I want to see their books.

Right? I want to make sure the money's going where it's supposed to be going. Otherwise, I'm not going to make that contribution. I'll do it myself on the corner. And they have that responsibility to the American people and we Should be able to see it and I'm shot that That there's a law in place look at that Let's I always go to the source when I do these things

I don't take anybody's word anymore So I go to Cornell Law School the Legal Information Institute 31 US Code section 714 audit of financial institutions examination Council council, Federal Reserve Board, Federal Reserve Banks, FDIC, and Office of the Comptroller of the Currency, or OCC. It says here, under regulations of the Comptroller General, the Comptroller General shall audit an agency, but may carry out an on-site examination of an open, insured bank or holding company only if the appropriate agency has been consented in writing.

Audits of the board of the Federal Reserve banks may not include transactions for or with a foreign central bank, government of a foreign country, or non-private international financing organization. Can't look at those. You may not audit anything the Federal Reserve does that involves a foreign central bank, government of a foreign country, or a non-private international financing organization. Wow. So you just set up an incentive and a structure so that if I'm somebody like Soros, you go find a way to meet that requirement and now

you can pretty much get funds however you want to get them. Yeah, you go to a foreign government, okay, Virgin Islands or St. Thomas or something, right, the British, whatever. You go to some smallish country and you say, hey, here's a few bucks. I'm going to, no few bucks, I'm gonna, no questions asked, I got some stuff coming in. You know, the interesting thing, all I can think of is this is just more information.

This is more information that tells us that because of the lack of morality, the lack of respect for the rule of law, open transparency, we have enough evidence to know that, we don't know when this thing ends, but we know that at some point without major pain, it's going to enter major truth that it's going to end. Because one of the things that kept us as America is the global reserve currency and didn't give the incentive for the BRICS and others to go out and create their own currency was because there was a rule of law that was respected. And I think what was it? One of the Russians came out, I can't remember at this point, but came out and said one of the problems is, you know, the US doesn't honor the rule of law anymore, especially when we weaponize the SWIFT system against Russia,

you know, and those assets of international individuals. Right. So if we're not trusted anymore, no wonder the BRICS are continuing to work in a fashion. It's so complicated, it takes time to unravel and we can see the end game coming, but they've been methodically working forward with the BRICS pay system that they've rolled out, the unit, they're telling us what's going to be there, 40% backing by gold, other commodities and currencies, because in reality, what has the most value? Something that's limited in supply and can't just be printed out of thin air versus something

that has no real backing outside of the faith that we have in it. What I'm seeing is consistently, the average American just doesn't understand because they're so all they've ever known is the US dollar and they'd have been able to trust it. But fiat currencies have failed throughout history time and time again. And you know, even the Roman Empire, they were still on metals and currency, but they were liquidating the value, mixing other metals in there to try to, you know, and destroy their currency from that standpoint historically. So we just keep getting more and more information for those of us

that are watching and concerned about this from a long-term standpoint that the handwriting is on the wall. I don't know if it's five or ten years from now or five or ten months from now that this really starts to matter, but it does make me appreciate the fact that our strategy has the ability built in within it and how I built it because of my concern about the dollar status from a long-term standpoint. To confidently move into other asset classes that can retain your purchasing power. If that happens, it's going to be painful for everyone. It's just those that are prepared are going to be able to maintain their purchasing power far better than the average individual that's just going to be wiped out because they're following emotions of people that they have trust in, that they have no reason to have trust in

because they're serving themselves at the expense of their followers. They should have been able to have trust though. Paul, Paul You know your HVAC guy or gal is out there working hard They shouldn't have to sit down going I wonder if the Fed and the raccoons in the CIA are going to destroy my currency on me because they're just being self-interested you know Dinks in this particular story, but but that's where we're at I think people do need to know about this, because it's just the reality of the situation. I think that we saw Trump and Elon and Scott Bissen come in and say, hey, we really got

to get our arms around this. I support that, because I can do simple math, too. Our country was on a path to penury, right? We were headed towards the poorhouse. It was going to crack and burn someday. So the only chance we have is to shine some light on this. It'll be a little bit painful. There'll be some disinfectants that don't feel so good on the wound, right? But we're going to have to do it if we want to preserve this system. Otherwise, just why

not just shrug and say, I'm just going to sit back and wait for the dollar to completely destroy itself. In which case, this is a terrible place to live and nobody wants that future. So I see people trying to make a better future Yes, I do too. The chances may not be good, but at least it's got it comports with reality This whole thing of like let's burn down tesla because we don't like him shining a light on this stuff Tells us who the enemy is in the story to be completely honest Right, right and and and i'll give many of them the benefit of the doubt. They have been so overwhelmed with propaganda.

I mean, you know, it's like I was, Holly and I were having a conversation the other day. I'm like, do you realize, and I like laughing at them, but all of a sudden it hit me. A lot of the shows that we watch are comedy. The men are stupid, right? Like they're just dumb. And then I got to think and I'm like, Holly, you know, and how many ways does this have the average individual just assume that men are dumb across the board

if they don't think about it, they don't have respect, or maybe they've got a dad that had, that didn't earn their respect in any way whatsoever from a female perspective, and they've been taken advantage of evil men, right? And then they see this on TV. That propaganda matters. And the thing that makes me so sad about a lot of those individuals is they can't see the truth because they put their faith in individuals that are telling them a story that stirs their emotions, and they're giving up logic for

emotions because they don't love the truth as much as they do the emotional high that they get out of the propaganda that's posted upon them. And unfortunately, those individuals are going to suffer more pain than the others that are trying to, that are embracing the courage and a love of the truth to really accept the fear that can come over you over the potential ramifications of this. Now I'm not saying we need to act out of fear because we don't need to act out of fear. We need to act out of thought and process and, and strategy.

And I know a lot of people don't have that, but if you don't have it, you got to find it. Well, let's talk about that for a second because this is really important to me. You and I have talked about this before that this is the United States in black compared to Europe in red, Japan in the blue. And you can see that the United States

has really been the only game in town since about November 2006, right? It's just been a rocket ride up, everybody else going down, and this is regions as a percent of the total world market capitalization for the big countries, with the United States topping out at just under 75% of total world market. Like Paul, it's a big world. No, it's not. 6% of the world's population, 5% United States is sitting on top of 75% of the total value of everything produced in the world

Obviously, that's not true, but that's how it's been but that's what we've been conditioned into the markets, but this is interesting So here we're looking at the world Relative to the United States S&P mainly S&P 500 and you can see since 2010 it has just been a 16 year ride down and you can see since 2010 it has just been a 16 year ride down and you can see that every so often on this trend line these little red arrows, you know, it touches you know the world. If this line is going down the world is losing compared to the US.

If this blue line is going up it's the opposite. It touches it tried to break out here even once in 2022, which is a weird year, right? Stocks and bonds down, that was kind of awkward. But here for the first time, you know, we're starting to see a breakout potentially here. You know, and again, this is just comparing the overall world stock compared to the United States. But this says there has to be a reversion to the mean at some point, there always is.

So would this suggest to you, Paul, that a strategy here is that there's some rotation out of US into other stocks? Yes, and it makes sense. You know, the question is, and a lot of strategies, especially ours, you have to play the game by the rules that are forced upon you,

so you overweight US equities as long as they're carrying the momentum. And what's happened is fear missing out. If you're a fund manager and you're not keeping up with S&P 500, your job's at risk. If you're an international investor advisor and you're not really, maybe you're over weighting S&P, but we've got ridiculous amounts of money flows that are coming into the US. What some of the indicators you said dumb money, okay? They say dumb money, which is retail, versus institutional money, which is smart money.

They're playing this game professionally for a living. Dumb money or retail money tends to chase these things at the highs at the worst time because they buy what's easy. If you're an advisor and all you're trying to do is sell and get new clients, then it's easy to sell something that has great performance looking back. It's hard to sell something that has terrible performance looking back. So I think we've reached the point where this is starting to crack. Yes, this is starting to crack.

Have you seen this one? No, I have not. Yes, this is starting to crack. Have you seen this one? No, I have not. Oh, that's retail flows. I've seen different charts. I've seen charts different than that, but explain that to me here. Yeah, retail flows as a percent of the total aggregate market cap. So a single fraction of a percent is a big, big number. We have S&P 500 stocks in blue, lighter blue. We have the NDX 100, the NASDAQ. And you can just see here that the retail component for NASDAQ starting mid-January has been, or early February, has just been a near vertical rise. Retail has just been piling in.

Also, to a lesser extent, the S&P, but I think that's the extent to which that this reflects that because some of there's some crossover between the NDX 100 and S&P 500 stocks. So anyway dummies what they call the dumb money has just been piling in at one of the fastest rates we've ever seen in the last month into into stocks. So there's a little dip they said hey this is my moment I like stocks cheap eight nine ten percent off is, and they piled in. I have a flip side to this, which is looking at institutional flows, Paul. They've been selling into that. They have been.

And one of the things that I've noticed is that I've had a couple of clients that have been getting unsolicited calls or cold calls. So one called in, and today I was doing some research for trying to get the highest fixed annuity. They had a fixed annuity from somewhere else, got tons of deferred gains. We need to get the highest. So I found a higher rate for them. And the question was, should I just go ahead and pull all that out and throw it into AI stocks right now? Because I mean, I'm hearing everywhere that AI, you got to be involved in this. And I'm like, hey, hell, let's get on Zoom call real quick.

And I took them through the data and I said, one, you've already been exposed to it, some through the NASDAQ and a few other things that you own inside the portfolio. I said, and I explained the whole story behind it and kind of deep seek and all this. And they were like, well, that's weird. Like I got a call out somebody telling me

that I needed to buy it and their pitch was so great. And the neighbor did too. And the whole neighborhood was talking about it while we're walking yesterday. You know, is it just that big of a thing? So I'm very suspicious and being this industry for as long as I have been, I believe that there's propaganda firms out there that are that these big institutions will hire to start calling, trying to transition their shares off and these stories to retail. Because they tend to get these calls right at the top. They don't get these calls right at the bottom

and they really should be buying these things. So. Yeah, I'm not just suspicious. I'm certain that that happens. Yeah. Yeah. Well, Paul, so we talked about US stocks being the only game in town worldwide for

a bit, but it's not just that. It's not just U.S. exceptionalism. It's concentrated exceptionalism. So this is the top 10% of stocks by size versus the entirety of the U.S. stock market. Top 10%? Look at this concentration weighting. It's like 75%. The last time we were at this level,

I hate to say the number, was the year 1929. Yes, that's correct. And the next time that we got close to that number was what? Was that 2000 on that chart? Yeah. Yep, that's the 2000 peak. Topped out at about 72, 73%. Now we're at about 74, 75.

And here's the hard part. It might go a little higher before it comes apart, but you can't ignore the warning that that information gives you that the economy is distorted. And when you get distorted in something like that, it becomes unsustainable. And here's another bit of information I want to share. If you've got something else, go ahead while I'm pulling this up. Yeah, let me pull this up real quick because I just do want to point out though that this is like the one thing I really track because it's all that matters. Are the central banks printing or not?

And of course, this has really been a tale of the US central bank leading that charge. But I think you can pretty well appreciate that there's a tight correlation here between global M2 money supply in darker blue and in the S&P 500 in green. So there's like we see that Germany is about to start printing up a bunch and I bet the Europe Europe in general is going to have to print. I'm positive that the Federal Reserve is going to print again. Paul, all that happens when they print, obviously, again, this is me saying I think the boomers terrible generation because they don't want any pain in their stock market. If they have to print so that things go up into the right, they'll do that.

Doesn't matter that the whole next generation is locked out and crying in their cars because they can't afford anything. They'll do it. I think it's going to happen again, but I'm kind of of the belief, Paul, that this next last big printing thing is our next last big printing thing. I think this ruins the currency. I think they're gonna wreck it. I just do. I'm on the same page with you there, Chris. I really do believe and I'm gonna follow the tools because they're set up to give us an indication, but I believe that when they unleash the printing presses the next time that will be the

straw that breaks the camel's back. And if we do get some deflation in the interim period, that could be the moment that when they respond the same way, and we don't know where it's gonna come from, what if it's just that the bricks say, we're rolling out the unit, right? Now you've got an alternative to all of this lack of trust that's been building in the US dollar,

and people are gonna know the repeat of what happened back in 2008. That does scare me, right? Because every time they printed money, asset prices have gone up. It may not be the asset prices that everybody's expecting, but there's going to be a flood of people that are going to be borrowing as much as they can borrow just because of what's happened in the past to purchase things that may or may not necessarily hold up as well as they expect them to. Hey, here's one thing that I want to show too that I believe is very dangerous from a historical perspective, Chris. And this is household share of allocation to equities.

So, Gilherm Tavares, which puts out some good stuff, households are extremely allocated to equities. This is definitely not good for forward returns. Why would this time be any different? And I'd love to talk through that. So if we go back to, this is going back in 1966, you had poor returns for 10 years. Then we got up to where nearly 60% of allocation to equities in 1999. He says 10 years, but you had poor returns for 14 years because S&P 500 and the NASDAQ went sideways for 14 years. Now we got there again at real high back in right after COVID, but then the government's been able to juice, and I think a lot of it's just so much money has been sloshing around the economy.

So much. And that we're way back up here. So, why would it not be different this time? I mean, one thing about history, and why I wish I had in high school understood the importance of history, but I consume history like crazy now because it does give us an advantage as an investor. But one thing about history is it can teach you the lessons of the past, and that helps you follow that path like Proverbs tells us twice, and the Bible over 2,000 years has not wasted space.

It tells you twice that the prudent foresee danger and hide themselves while the simple pass on and are judged for it. This is another warning, right, that we need to pay attention and be very careful in the allocation of our resources and for the most part do the opposite of what we want to do most times. Well, I think that the strains and stresses are big enough. I mean, I've been covering this back at peak prosperity for a long time. Here's my view. I don't trust prices anymore because I think that there are forces in the markets that

can manipulate prices. And that sounds conspiratorial to people, but it's not. You ever watch the movie The Big Short? Right? Remember, you know, Steve Carell's like, why aren't my bonds moving? Like everything, like the bonds should have been repricing and they weren't repricing because Goldman Sachs wasn't done extracting value at their fictitious price that they had set for it.

And so, listen, if that can happen, so what matters, Paul, then is less the price, more the movement of things, right? Because big money, if they get the same thing that we're talking about here, that's what I care about. That's what you and I have been talking about offline, you know, all week is like, how would we know if big money's really going, galloping, stampeding one area to another? And we all know that like, we can look at the price of gold here, and sure, it's, you know, it's, it's interesting, because it's, you know, up at 3000 and 56, you know, but it goes up a percent, half a percent per day. It's just sort of like trundling along. It's not vaulting up by two, three, four, five, six percent.

But that's the price, Paul. The movement of it has been nothing like anything I've seen in my entire career of watching it like a hawk. The amount that's fleeing the LBMA vaults in London, coming into the comics, that's just what we know about. I'm hearing private reports that pilots are flying this stuff hither and yon. That's not showing up in any of the reports that you and I are reading. It's, it's, it's a thing. So first question, why is so much gold thundering from point A to point B, you

know, and silver too? Why is that happening? If, if not that big money has decided, I'd like to own the shiny rocks, less of the paper stuff. Somebody knows something because we can see that in money flows. And another thing that I'm seeing as well, commodities, so we track major asset classes, and money flows can't be hidden in the overall price movement of those asset classes. Now, yes, there could be some suppression through the options market in certain areas, but still, when you look at the asset class, so commodities have really risen up and major moves that we've not seen throughout history without sustained multi-year runs

in those commodities. So I'm already seeing that. We've seen it in the gold space. Gold's gone up in spite of a dollar strong. It's gone up in spite of interest rates going up. And now all of a sudden you've seen this massive repatriation coming back. And more than anything, I am so fascinated by this. I'm so fascinated by this, that I'm asking anybody,

anywhere that I can across this country, is I talk to them when I'm traveling, when I run into people in town, I'm like, hey, what do you think about gold? Do you own any? And there's no retail out there that's doing it. No retail out there is doing it. The only, I've heard one individual,

I had a conversation with in town that one of their builders asked to be paid in gold. And I thought, I want to meet this guy, right? So, but this is a lot different than back in 2012, when literally, I mean, I was telling clients when they were calling in wanting to chase it, I'm like, look, if I was to go run an ad in the paper that I'm recommending gold right now,

I could have had a line a mile down the street because every retail person wanted it. We are not there yet. We're not there yet. So this is big money that's moving this. This is not retail. Now we're starting to see some signs that retail are coming in because GDX is breaking out of daily resistance, weekly resistance, and at the end of this month, potential that it'll break some resistance going back to 2013. And GDX being the gold miners' index. The gold miners' index. Not a recommendation, guys. I'm just making an observation. Okay, this is not something that we have in our strategy at this point right now.

Anyway, we haven't allocated to it yet because we've got to see some of these things come through. But these are big signs. And this is very similar to the breakout that we saw, major breakout we saw several years after a multi-year consolidation in gold. And gold has followed through on that substantially. So a lot of this to an extent has to be some big money moving around that knows something that we don't know that will only be revealed in hindsight when we have some more information. It's absolutely big money.

It's absolutely. You're right. I'm starting to hear a little at the retail end. I'm starting, you know, Costco turns out to be a pretty good retail indicator. So they're starting to sell out again pretty routinely, right? I know that because I come out of my local Costco warehouse when I go online and I say, do you have any silver, you know, coins or gold coins? And it's pretty tapped out almost all the time.

I just heard from another subscriber up in the New Hampshire area said same thing, went into Costco. They have it all sort of hidden away. And they're like, he's like, why is it all hidden away? They're like, because when we put it out front, it all goes away in like three minutes. Well, that's a good time good for yeah so could be but but again that's that's not neither here nor there what matters Paul is that we're talking about some big giant seminal stuff like is the

system of money about to be called into question is faith gonna be shattered international because you know I always say money is a faith-based system. It is. But it's actually force-based here in the United States. If I don't pay my taxes in U.S. dollars, guns happen, right? Jail happens. Things happen. OK.

But internationally, you can't really force people. They kind of have to have faith that those dollars that they've taken in exchange for their goods and services Are I'm gonna hold their value and and so if they lose that faith and say I'd rather have something else That can begin to explain. I think what we're seeing in gold and silver Yeah, well, and I think it was 2023 November of 2023 when I went to November of 2023, when I went to Las Ventanas in Baja, Mexico, when we went fly fishing offshore, they did not want US dollars to be paid with. They wanted us to exchange the dollars for Mexican pesos. And I was shocked.

I was shocked by that back then. But maybe they're on the bleeding edge. Maybe it was just the exchange rate that they're paid. I don't know. But they wanted pesos over dollars. Now, that was a period of time where the peso was strengthening against the dollar. But I've never seen that, haven't talked to anybody else that's really seen that. My concern is, is as this starts to unfold, that's going to occur more and more in international travel and that's going

to make it a lot different. It's going to be a completely different environment for US citizens that have been used to going around and waving dollars and everybody wants them big deal We're gonna have to keep tracking this as we go on here, but I'm on recession watch myself So I do think there are for what it's worth. I think there's better prices coming for some things in the future I can't totally make sense of what I'm seeing in the commodity markets right now on that basis Oils down consistent with a recession coppers up inconsistent with a recession I'm not sure that I'm not sure what we're seeing in commodities is consistent with

Its old role, but I don't know But we're just gonna have to watch this play out and that Elon thing I'm surprised at how many people didn't pick that up so far. Yeah. Well, and I'm a little surprised. I think a lot of people just don't know what to do with the information. And when I first read it, Chris, or read it, listened to it, I had the same reaction that I did when I read The Great Taking for the first time. I was shocked for about an hour.

I'm just like, okay, I'm going to set this on the shelf. I'm going to let this run in my subconscious because this is game changing, right? This is information that may not matter right now, but it's gonna matter dramatically at some point in the future. If we literally have these magic money printers that are printing money out of thin air, then how can you trust anything that's coming out of the payment system of the government? I mean, it hits it so you can spend it digitally if it gets in there. But how can we track how to maintain the value of our purchasing power if there's

lies taking place at that level? I mean, if you're printing money out of thin air that's not accounted for in the ledgers, that's a lot, right? And then if you're openly lying about that, then how can you have faith in something that can't be exchanged for gold and how long will it maintain its purchasing power in exchange for the goods that we purchase on a regular basis? If it starts rapidly losing that purchasing power, that's a currency collapse and a currency crisis. And you have to have thought through how you're going to deal with that and have some, some abilities in place, strategies in place to keep your emotions in check, to make sure

you're allocating to the most prudent resources in a diversified manner. It depends on your frame of reference, you know and From a dollar base frame of reference you're gonna have a different experience of it Then somebody else is gonna have well, let's just say a different currency of some kind so I got to try and find this because this is astonishing when I saw this and Well while you're doing that I'll actually kind of talk. So this is not a recommendation because I can't give a recommendation Straight out for everyone. This is just hypothetical exercise so you can mentally prepare yourself if this is something that you want to do or your advisor recommends you do. Consult an advisor. Do not take my advice and go act upon this. But let's say you don't have any exposure to precious metals. We've talked about from time to time,

I typically recommend for most people that I meet, not everyone, so I can't give Blake an advice that they set some of their assets aside. Okay, so if your portfolio is up, say 20% over the past two or three years, and you're concerned that we would have a currency collapse, but you're also concerned that prices are at a high. I can't deny that prices have moved so far so fast, even I'm a little concerned in the short term just because they're overbought. Well, if you're gonna be concerned six months from now that you purchase this down 20%

and you're not gonna be so upset if you don't, you know, if it goes up each month when you do it, one way to help control your emotions is develop a plan. Say I've got X amount of dollars I'm gonna sweep off to get some exposure. Mentally, I'm gonna set it on the shelf for the next 10 years, okay? I hope 10 years from now that it's the exact same price

today, then as it is today, because that means we haven't had a currency crisis. And I'm gonna average in over the next six months, and I'll take one sixth each month and put it in. But if price drops 10% next month I'll do two months at once and if it's down 10% you know the next month again I'll do two months at once and you're speeding up your purchases so you can buy the pullbacks if they occur. So that's one way that somebody could develop a strategy to implement in for short-term price risk and have some funds available if it was to drop but at least you're making some actions to diversify into another asset class.

Again, not a recommendation, just an idea for people to think of if that's something that they've chosen they want to do on their own. Well, Paul, let's imagine for a second, I found my chart. Let's imagine that we want to do this, but we're in, what's your advice to this person who lives in Turkey? and Turkey That's gold versus the Turkish lira. That's a perfect exponential chart I think you can see that if you're keeping your wealth in your local currency in Turkey, you are just getting destroyed

Yeah compared to gold yeah gold in that scenario is maintaining your purchasing power. It is not making you wealthier, even though your account balance is going up. So I don't know the, I can't see the details in clarity here, Chris, but it depends on where you are on that journey. But, well, in 2000, as recently as 2021, gold was priced at about just under 20,000, call that 18,000 Lira. Now it just under 20,000 call that 18,000 lira now it's at a hundred and 10,000 Okay, so let's go back to that 2021 area where you are. There's a little dip before it breaks out right there

Mm-hmm So in that case, the dollar cost averaging is gonna be really good for you. Mostly because you had some money to purchase that dip But on that breakout you got to go ahead and allocate from that standpoint going forward. But if you've had a good run like that, your dollar cost averaging over the next six months, you got a little bit better price and it got you in an emotional way where you could stay. So if you're a Turkish citizen in that case, you can't be scared of the fact that prices are high because the forces that are driving the prices higher are not abating.

And the forces that are potentially driving prices higher in the US are not abating. As a matter of fact, all that repatriation tells me that at a minimum there's lack of trust to hold it where it was being held and they wanna get it closer to home. At a minimum, I think that's it. In Turkey's case, both the price of gold is rising in the in the Lira is falling against

the dollar and gold is rising in dollar terms. So any rate double forces play on that. But I see that experience for a lot of people in a lot of other countries. Gold is hitting all time brand new highs in basically every currency I'm looking at because it's hitting them in dollar terms to write and a lot of currencies are weak against the dollar. So we'll see. We'll see. But this is, this is going to be quite the year.

I highly advise everybody. You got to be nimble, have your money managed really, really well with an eye towards managing the risk. We talked about dumb money today. We talked about maybe threats to the dollar system, the faith in it. We talked about the fact that we're on a recession watch at this point in time because of some leading indicators, right? We're talking about bar and restaurant sales and home sales and airline tickets, things

like that. So if that recession comes, that's going to create a couple of forces, right? Obviously it'll drag down economic activity, but it's going to increase the pressure for the printers to print. We'll see how Trump responds when faced with desperate citizens who would like a bailout or a STEMI check or something like that. We'll see what the Fed does when their precious market cracks and doesn't go up into the right like it's supposed to. We'll see. But I'm predicting printing is a consequence of this this year. I believe I'm ultimately believe we're going to get there as well. And I am really curious to see what Trump does when I kind of know what the

Fed's going to do unless they're playing a political game. Right. They pretty much string us to their playbook. But I am curious to see what Trump's going to do. Is he going to stay the course or is he going to capitulate and grab the Fed and throw them out there and say, print, print, print. But I'm heartbroken as well, because so if you're a Turkish citizen, if you're a U.S. citizen and that unfolds here recently with gold getting higher, I've been calling some of my contacts at the major Wall Street firms. And I'm like, say, are you all getting any recommendations from the firm to put clients in gold? And they laugh at me.

any recommendations from the firm to put clients in gold and they laugh at me. Several of them are like, oh, well, I did it for a client the other day, but I can't get paid on it. Wall Street still refuses to see any value in gold and it's been the number one performing asset class in total return going back to the year 2000 in comparison to S&P 500. I haven't run it against an ASAP to see. But that's heartbreaking to me because what we should be looking at is we shouldn't have a toolbox. What good are you a mechanic if you've got a toolbox with several important tools that

you want to use? There are tools in that toolbox that you may not use, but you know, currencies, for example, from our standpoint, nine months is all they've been using our strategy for the past 21 years, but they were one of the most valuable tools in that toolbox when we needed to use it. So that's what breaks my heart about what's taking place under the surface, and especially if we get

into a currency crisis. So many people are gonna have trusted advisors that are trusting their Wall Street research that still thinks that gold is an asset class that's for barbarians. Well, pro tip, Wall Street does what's best for Wall Street. Sometimes that aligns with your interests. Not always, right? If Wall Street doesn't get paid on gold, well, they're not going to recommend it and that's

that. Doesn't matter how good it is for you or whether it's important. That's why I like working with you, Paul. Independent, you will tell people what's right for them because you want to help people. That's how you sleep well at night and do what you do in the world. So for anybody who wants to talk to Paul and or his amazing team, go to peakfinancialinvesting.com, fill out a simple form. Somebody from Paul and or his team will get a hold of you within

48 business hours, start the process. I guess people are just cutting right to the chase sometimes, Paul, working with you directly. Sometimes they want to go through the whole planning process, which is free. I highly recommend people do the planning process somewhere early in that engagement because it's such a valuable process. I do as well. Even the ones that are jumping past the introduction call and straight into the initial, I'm running a plan on them immediately when we get in there.

Just, it is so valuable because I'm able to break the perceptions of what people have about their circumstances and show them the reality of it. And then that gives me the information I need to give them the recommendation that'll maximize their probability of success, you know, eliminate their blind spots as much as possible and give them a resilient plan, right? So everybody's gonna get that that planning process in there. Well with that, Paul, thanks so much for your time

and we'll see you next week. And then I think after that I'll probably see you in person. Oh, I'm looking forward to that. Yes. So that'll be a good time. And I'm looking forward to the IMA conference in Atlanta as well. So I cannot go down there. Yeah. Coming up April 4th through 6th. All right.

Thanks, everybody. Thanks for listening. Hope you enjoyed this episode of Finance U. We'll be back with you next week, as always. And who knows what we'll be talking about then. Something important, I'm sure.