Peak Prosperity - Can (or Will) the Fed Paper Over the Coming Recession?

Episode Date: May 1, 2025

The GDP contraction was mainly due to tariffs while the labor market is slowing down and retail investors are coasting on a sea of complacency.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. I Do believe that that the markets if they get back to normal valuations We got to go 30% below here and it's much better for businesses if we do that over 9 to 12 months instead of 2 to 3 weeks 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. It looks like it's April 30th

today and I'm back with Paul Kiker of Kiker Wealth Management. Hey Paul. Hi Chris. Good to see you today. My favorite time of the week. We get to talk all things economic and financial and all of that and lots been happening. So. Yes. Yeah. How about how about here's a couple things on my plate. I have some recession indicators, but US GDP contracted it was a little surprising. They said the economy contracts for first time in three years, but they're noting here the decline was driven by a surge of imports ahead of President Trump's

sweeping tariffs. Let me just show you one chart, but also notice down there, US payrolls, private payrolls report a big miss. Okay. But look at this, this, this massive erosion here in, in this import. So these are, this is our trade deficit. So this huge downward adjustment, this is our trade deficit. So this huge downward adjustment This is minus a hundred billion for a month. This is a monthly reading. Look at that thing

It's all the way down there at a minus a buck fifty or sixty hundred minus hundred sixty two Panic selling and the markets after Liberation day, but that's panic front front running of the tariffs. It looks like. Well, it is. And so the funky way that GDP is constructed for anybody who's listening, who doesn't know is it adds up a number of things. So it's private consumption, it's government, et cetera, but it takes exports minus imports. And so if exports were 100, but imports were, you know, know 162 that 62 billion gets dragged off of GDP

So so a big explosion in importing is going to be GDP negative So Okay, we had some economic weakness at least by the headline I don't I'm not really sure it's all that not I don't sure it's all that meaningful. That is a big distortion, those tariffs. That's a huge distortion. I was reading one of the reports over today, looking, looking through the data that said, Hey, without all of the front running of the tariffs, assuming that's what it is, we would have had a record GDP prep. So that did distort it quite dramatically.

It pulled it down. I think our expected was a negative point two and we came in at negative point three. Well, so what was going to be contributing positively? I haven't torn it apart to that level. I haven't seen it. So there was a, I didn't get into all the details, but we had a very high investment. So that's where Trump's saying, Hey, the tariffs are starting to work. So that investment portion of it was what, what would have caused it to be record to the other side. I think I have a chart here somewhere if I can find it. So well investment is a good thing. I'm a big fan of investment. So if we had a big big increase of investment he's going to be wanting to take

a victory lap on that. But basically what you see is here was the real GDP change. Those were the imports which is a negative. Oh look at that. Yeah. Yeah you see is here was the real GDP change. Those were the exports, which is a negative. Oh, look at that, yeah. Yeah, so that was the chart that you showed on the other side. Here were the exports. Government was down a little bit, so Doge is reducing some of the expenditure.

Not much, but some. Not much, but a little bit helps. But here's the investment side of that, that had this been normal, this would have pulled it up to a, to a very good GDP. So overall, you know, market participants or analysts were saying, hey, this isn't as bad as it seemed. Okay. Cause that, that import is just going to reverse itself at some point. Yes, I would expect so. But with that said, so it mentioned jobs were weaker. So this is from April

6th, and this is looking at job openings, the jolts, you know, so looking at job openings. And you can see that normally in a recessionary period, the job openings decline, you know, and then climb back up and then decline during a recession, real sharp here in 2020, obviously. But then what's this? And we could say, wow, this is a huge distortion right here because of all that 5 billion that the Fed dumped in there. So sometimes it's hard to get the readings quite right.

Lowest since last September, they're saying here in Bloomberg. And from that article, they said U.S. job openings fell last month to the lowest in September indicating weaker labor demand, amid increased economic uncertainty, which I understand, and available positions decreased to 7.19 million from a revised 7.48 million. So that's a lot of job openings that just vanished. Whew. And, but this is the one that's interesting to me is how many openings do you have compared

to unemployed people? And we're getting back to that magic one many openings do you have compared to unemployed people? And we're getting back to that magic one ratio where you have just one opening for every unemployed person, if you could line them all up. So generally speaking, that's right where you start to get into trouble normally when you fall below that one mark there. So yeah, I mean, a lot of the data is just pointing to the fact that we're slowing, it's pointing to a trajectory of recessionary numbers.

And even another indicator that I'll pay attention to from time to time, I didn't commit to memory the numbers, but basically job jumpers, right? Those people who are always shopping, they'll be in a job and shop for pay raises. Those numbers, their increase in pay raises are starting to come down. So that's just another sign that the labor market is not as strong as what it has been before. And especially if you shut down all these illegal immigrants that are coming in, that obviously filled some jobs and then there's some deportation of some of these illegal immigrants. It's interesting that with lack of supply of labor,

that you're starting to see these numbers continue to come down? Well, my CPA tells me that they're starting to record and his clientele weakness in in restaurants. Now that's we're up in Massachusetts. It's just an anecdote. But that's usually a leading indicator. And guess what, Paul, I don't know.

I mean, all of a sudden, you know, burgers for two plus a salad and a drink is a hundred bucks now. So, you know, I could see that being pretty sensitive to any, any economic weakness. Yes. And it's hard to say because, you know, there's been a lot of information on making America healthy again, about what's in our foods. We're seeing the same thing here in the North Georgia area, not a major decline of, of, and restaurants, but a softening for sure.

It's a lot easier to get reservations in your higher end restaurants. And is that just people eating more at home because prices have gone up because they want to be healthy or because they just don't have as much money left over. All right. So bull case is look, investment is coming back. It's got a little bit of a lag. I'm surprised it came back that quickly, right? Trump was inaugurated 100 days ago, and we already have a bump in our investment figures in the GDP reading. That's pretty,

that's pretty impressive, actually. Now on the bear case, on the other side of that, you have people like Jeff Snyder saying, and he does with Eurodollar, that's the Eurodollar University, Jeff Snyder underscore edu, Eurodollar University. He says, quote, the cracks in the U.S. economy are no longer hidden. In the latest beige book, the Federal Reserve quietly admitted something they've been trying not to say out loud. Mass layoffs are starting, economic momentum is collapsing, PMI surveys are crashing to pandemic era lows. For months, they've told us the economy was resilient, but their own data now reveals the

truth. The U.S. economy is teetering on the edge of a full blown recession. In today's video, he walks everybody through the feds beige book, probably worth watching that. There's a link down there below. You could find that or just Google them up or YouTube them up and figure it out. And he talks about the collapsing labor market data, the danger of the beverage curve, which I'm wondering if that's what we're talking about and why the next few months could be a lot worse than anyone's prepared for. All right. So Jeff Snyder has taken the bear case he thinks economic weakness is here and it's about to get worse. Boy, that would fit with selling me and go away.

It sure would. I like things to line up. It sure would. And that's my concern. You know, we've had a lot of things that have changed here recently. So you just think about the market reaction and the psychology behind it. And I've even had a hard time. So I remember back in 2017, now we follow our tools.

So I'm just talking about emotional struggle. This is the hard part of the investing process when you have the indicators that are clearly telling you that we're headed in a recessionary trajectory. But we've had an environment to where the administration, the prior administration through fiscal foolishness was trying to keep things going. And then you had the Fed that was constantly intervening every time data started to get poor.

So as soon as the GDP or ADP numbers came out, 62,000 jobs, which is lower than what it was expected, lowest print since July of 2022, if I remember correctly. Rate cut expectations went up and the market's pricing in right now four to five rate cuts in 2025 for the rest of the year. So the market remembers that, hey, bad news is good news, bad news for labor is good news for capital because the Fed's going to fuel the market with this liquidity. And I've mentioned before, Chris, that I think we're very similar. This is going to be very similar to the 2000 talk. And the reason I'm stating that is because

we had had this massive bull market in the 1990s where the S&P was the only game in town. That was the technology bubble 1.0 where it was internet stocks, cable stocks, everything inside there from Lucent Technologies to Cisco. And so you have market participants, and this is the psychology of a market top. And I'll share this here in a minute, but I want to talk about it before because it's a great picture. There are tons of investors, especially those baby boomers that got really hurt in 2008. Some of them stayed the course. they were working, they were 15 years from retirement, 10 years from retirement, and they kept dollar cost

averaging. There's others that got out. And then there's other people that wrote it up into 2014 and they're like, hey, this is completely unsustainable. And I agree with that completely. You know, there's a lot of people that they'll claim, hey, you're crying wolf. There's a difference in that story of crying wolf because you're lying and want attention versus actually paying attention and seeing the wolf sneak in and out of the trees waiting on the perfect time to pounce on the community. But the Fed kept basically kicking that can down the road, kicking that can down the road. And there's so many investors that stood back, were like, oh, finally, this is the

sell off and then the Fed rescues the day. Well, where we are now, I believe, and this is what I'm seeing, even with those who are, who are paying attention and watching the numbers is there's this persistent belief like Pavlov's dog, that there's no way Trump's going to allow this market to come apart. There's no way that they're really gonna do this. So coming into liberation day, there was this belief that, well, yeah, it's not gonna be as bad as we think.

And then you get this immediate reaction to the downside because everybody's caught off guard like, whoa, he's serious. And then we reach kind of the peak worst tariff news. So of course he's gonna make deals and then there's deals that come in. Market starts to rally a little bit. It's another reason I believe the market's gonna rally for the next month or so, 60 days, maybe into the end of May, just an educated guess,

because those investors are relevering again. It's like, oh, the Fed's gonna cut rates, we're gonna get these deals, everything's gonna be great. Not paying attention that the underlying environment that supported the market for the longest period of time has completely changed. There's still a question of whether the Fed's paying politics and they want to see things fail for Trump. We don't know that yet. I do believe based on what they did back in September and August of last year, had this been a Democratic presidency, they'd probably cut rates five times at this point. Maybe that's just cynicism on my part.

But you look at their actions before, because there were more inflationary pressures back then than what there are right now. We're starting to get a little bit of disinflation, as we call it, or deflation in the short run in some of these numbers. So I am concerned that we're in that cycle of market emotions that's really hard for investors who don't have a strategy. And if you're modern portfolio theory, there's nothing you should do. I mean, literally your argument is, is, hey, we're going to have a portfolio that if markets go down, bonds will go up. And if bonds go down, markets or stocks will go up. And we're going to have a portfolio that if markets go down, bonds will go up. And if bonds go down, markets or stocks will go up. And we're going to have less volatility.

But 2022, I believe, was a warning shot across the bow to tell us that it certainly could be different this time, because if this doesn't work out perfectly, you can have bonds in trouble and stocks in trouble. Like 2022. The markets are a ticking time bomb. Volatility is spiking, trade wars have broken out, and most investors are sleepwalking into disaster. Many portfolio strategies perform poorly

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and I'm Dr. Chris Martenson urging you to act now. History rhymes all the time for good reason, but remember, so everybody's been conditioned and this started under Greenspan where the feds just constantly bailing everything out, right? And so they gave us this huge increase in the roaring 90s, you know, but then oops, don't forget 1998 happens.

It was a pretty big drawdown. I kind of thought, you know, looking back, I would have been hoodway. I wasn't paying attention at the time, but now I am. I would have looked back and said, that's it. This is the big one. And it didn't, it went right up there into 2000, you know? And then we had that first top and drawdown and

then it went up and held for a while and you know, and I think people are thinking that like we had 2020 big drawdown but came roaring back. So I think that by the dip mentality is is been, I mean, it's kind of worked for a long time. It has. I mean, it really has. But you've had the backdrop where the Fed and the government were just accumulating this debt to keep the leverage going.

So what I think happens, we had some deleveraging occur in the short run. Oh, no, maybe they're serious. And now the market is relevering up again. At the same time, though, this is the first time since I saw it in housing in 2007. And of course, I was younger and just starting in my career in the year of 2000, but I had some very wise individuals that set me on the path to a risk managed portfolio that were just like, this is the perfect environment for institutions to unload on the individual investor. And I see it right now. This is the perfect time for institutions to unload on the individual investor while they're repositioning their portfolios to be in a position to buy back those

same stocks they're selling right now to retail when they puke them on the other side. And that certain psychological environments that we get into. So now I wanna share that cycle of investor emotions. I have another one, but I really liked this one. So I wanna give them a credit. So this is to Price Action Ninja. I've never heard of them before, but I pulled it off their website.

And this is great. So if we look at this, everything starts on hope, right? So Chris, what were we all as gold investors, you know, really through 2016, 17, 18? We were hope. We know that we're making good decisions. We're making fundamental decisions, or we think we are, but we know we're doing it mathematically and that the prices should go higher. Now, I still don't think we're in the euphoria phase. I think we might be but we know we're doing it mathematically, and that the prices should go higher. Now, I still don't think we're in the euphoria phase. I think we might be in the belief phase when it comes to the precious metals complex.

But as far as the markets go, we have come through that euphoria, and I believe the numbers that we talked about back in February, and I can't remember the numbers specifically, but we had record purchases of retail investors back in February. That was that euphoria. You know, hey, I've got this figured out.

Trump's going to make things work. This is going to solve the economic problems, and this is finally my ticket. Then you get that big sell-off. This is where I think we are in the process, where you had this sell-off with the Liberation Day, the reaction to tariffs and hey, maybe they're serious, we get some de-levering. And then you hear, okay, it's time for the market to heal. We postponed some of these tariffs.

We have, we've got deals coming. Trump's started to focus on the market a little bit more in a lot of the tweets that he has. And we're in this area of complacency. And I like what they put below here. We just need to cool off for the next rally. And then when we make that next move lower, and I don't know for sure when that's going to be, this is just an educated guess with the things that we're seeing in the economic data and the psychological backdrop, that next sell down is going to be anxiety.

And then we move into the denial, and then we move into the panic, and then we move into the capitulation. And that's when your passive investors and your modern portfolio theory refuse to stay the course. And they put those investments out, which turns into anger. And that's when those that have run risk manage strategy and professional investors start to move in and buy like Buffett said, when there's blood in the streets. And I believe that we're in we have left the euphoria stage and

we're in the complacency stage at this point. Could be you know, that might fit with this where from April 26, four days ago, Kobase letter reporting that US equity funds are record 156 billion inflows, record, and tripled from the previous year, surpassed the 154 billion seen in 2021, prior record. And at the same time, global equity funds have attracted 250 billion in inflows. And so just massive like inflows. And so this is people piling and that's complacency right there.

Hey, we had a little hiccup. Trump's gonna solve the tariffs. We're good to go, right? And I see that behavior. This is just today's price action in the S&P. You see it open down and sometimes you'll see that, Paul. You see it open down, but then you get these dip buyers just show up.

They just show up. So we've been seeing dip buying since about Sunday two weeks ago, and I just observe it It's a thing. It's been happening But I think that that corresponds nicely with the chart you're putting out there that this is this is very ordinary sort of normal psychology behavior Where? of normal psychology behavior, where people I don't think are focusing on the fundamentals, they're just all focused on the price action, prices were lower. I think they should be higher. They were higher before, therefore they're going up.

That's right. I think, I think it's the whole thought process. It is and it's, it's, it's the pressure that people are feeling. The inflationary numbers are making them feel left behind. And I can't take conversations I've had with people that are making really good money. And they're like, look, I don't understand how some of these people are spending the money

the way they are because I know I make good money. You look at the statistics and I'm in a higher percentile and I feel broke all the time. you look at the statistics and I'm in a higher percentile and I feel broke all the time. But the quote that comes to mind is by Mark Twain, it ain't what you know that gets you into trouble, it's what you know for sure that ain't so. That's not just my Southern accent, guys. I mean, I'll say ain't every now and then. That's literally what Mark Twain said. So if there's this pervasive belief that Trump's going to capitulate, that the Fed's going to save the day, and we're in a different environment, because if they are focused on

rates more so, which matters more for the average individual than asset prices, then that belief that has helped people to speculate well in the prior environment regime just might not be so if this is a change. It's too early to tell. I mean, my biggest concern is that Trump's going to just throw in the towel and capitulate and go back to what worked before for short-term benefit. But then you get a tweet that he pulls out on Trump social, which I can't pull that up, but I have it written down here. So this morning, Trump posted on true social says, this is Biden's stock market, not Trump's. He says, he goes on to say, I didn't take over until January 20th.

Terrace will soon start kicking in and companies are starting to move into the USA in record numbers. Our country will boom, but we have to get rid of the Biden overhang. This is the important thing. This will take a while. Has nothing to do with terrorists only that he left us with bad numbers. But when the boom begins, it will be like no other be patient. So that leads me to believe that that that he's

expecting more pain to come in the short run because instead of jaw boning the markets off to the races, he's saying, Hey, look, be patient. It's going to take some time for this to come to fruition. Because you know, so here's the part I'm confused about on this whole thing. So we know that there's been some tariff hiccups in this whole story, right? And so here's a couple things I'm confused by. First, Doge was supposed to be doing all these these big savings and of course we always knew how hard that was going to be because you know you need bipartisan support and you know the other side is not going to do any kind of support of any type, right? And it's going to be fought bitterly. And of course, one man's cuts is another man's paycheck losses, right?

So all of that. So we haven't seen a whole lot so far in deficit reduction by the US government. And so that was the first thing they were coming in to do is to sort of address this chart, which is the staggering pace of new debt just at the federal level. So I'm going to have to say, and I can't, I'm not going to say this is Trump's fault or anything. I'm not laying anything there, but, but this requires bipartisan support to do anything

about it. I don't know what they can do about it. So I'm not that sanguine that much is going to happen on the debt front, but we're still going to have to keep issuing all that debt. Somebody's got to buy it, Paul, right? They do. I do wish we could get a transaction level audit of the US Federal Reserve, particularly its offshore activities, because apparently last month there was a

record amount of offshore buying of Treasuries. I'm suspicious, but I'm a suspicious guy. I would just like to lay my suspicions to rest by knowing for sure that it wasn't the fed Buying our own debt, you know by by hook or by crook Okay, so but then this is our trade deficit right here And so over the years from 1990 to currently it's about 24 26 trillion dollars of cumulative trade imbalance And that's about how much of our country foreigners own Right. It's a lot. It's a big number.

They own almost 100% of our GDP in assets and things. So that's a big deal. Now here's what I don't know, Paul. When you add it up, it's about $950 billion a year that we have to finance by having people accept our paper offshore. I don't, I'm not clear yet on this. And I've been struggling to try and understand like what is the plan. I'm not really clear how tariffs addresses any of that. You know.

That's a good point. I don't I don't I don't either and I don't have a theory as to how that's going to be solved unless we start paying down that debt or I don't have a theory. I mean, if all of a sudden all the manufacturing is back here and we have a much reduced trade imbalance, that's good for us. It's not going to be good for anybody else. So I don't know how you negotiate that. Like, hey, China, I want you to negotiate being poor at your expense. You know, that's a tough negotiation. Not real clear how you pull that one off. You know? I mean, basically they've been recycling that extra profit back in the treasuries to keep the game going. That's an oversimplification. But if they

were making $10 million a year and they're putting five million back in the treasuries, that allows us to continue to borrow money. Well, if all of a sudden we're leveling the playing field and they're making 5 million a year, we've got that extra 5 million here, where's that extra money gonna recirculate back into buying those treasuries? Is it gonna be US investors that are gonna be buying treasuries at this point?

And if you've got a Fed that's fueling asset prices during the period of that time, why are you gonna be buying treasuries when if the feds just continuing to drive asset prices higher? So then that's a good question. You know, Luke Grohm, and I didn't totally get it, but he said that one way that this sort of sorts itself out

a little bit is if the price of gold rises a lot. is if, um, is if the price of gold rises a lot. I'm not totally, not totally sure I understand that thesis. Um, but as I understand it, it's, if we could get China to have to pay a lot more for the gold it seems to want, uh, that would somehow begin to balance all this out. Not sure I understand it yet. We can look at that thesis later. Yeah, I'm kind of curious about that. Just thinking out loud. We'd have so if let's say gold goes 10,000 an ounce, just pick a number just to operate this. Well, you've still got the debt that's there.

So unless you're pulling from future income to pay that debt down, because all, you know, for you listeners out there and just to state it, all debt does is pull future purchasing power into the present. So you're, when you take on that debt, especially for something that doesn't generate income. Now, if you're invested into a business, you're pulling future spending power into the present to generate more income to pay that debt off quicker. But if it's foolish debt, you're just spending future income now and you're creating more of a burden down the road. So how do we reduce that debt unless our income for the government goes up dramatically?

That's one avenue. But at the same time, if Trump's talking about reducing taxes for anyone making $200,000 a year or less, then I would assume you're going to have to raise it on the other side, or you're going to have to sell some of that gold at some point, which is an asset, to pay down that debt at that higher number. So am I missing something there, Chris? Well, dude, where's my audit of Fort Knox? Where is that?

But I mean, this is the so here's the thing that I think we're all struggling with. And I struggle when I listen to people try and understand this because this is a very complex, very large thing that Trump has kicked off something with the cent, which is magnificent in its audacity, right? We're going to completely restructure all of our trade relationships and all of that, right? Including the value of the dollar is going to have to be renegotiated. The only way this pencils out that I can figure out is if the value of the dollar falls by

a lot. Okay. And every country wants their currency to be a little weaker because domestic manufacturing has helped. Right. So if I make a widget and it costs $10, but my currency falls, so somebody overseas perceives that as $5 from their standpoint, I'm going to sell more of them. Right. So, you know, at any rate, I think that's, that's how gold falling, falling dollar value of gold, I mean, number of dollars that you get for an ounce of gold, right? It's like crashing in terms of the amount of gold you get.

So I think that's it. But there's just not enough gold in the system. It's just it's mouse nuts. It's a few trillion, you know, of monetary gold kicking around. It's just, it's not enough really to get this. No, but what's interesting is, I mean, you know, we've been talking about this since 2022. This is from Vince Lancy, VBL ghost at soren the K on Twitter, saying that Asian gold retail buying way ahead of the game. So look at that, uh, that, that blue thing,

Asia, right? That's China right up there. Just going crazy. US nowhere to, I mean, just way down there. Um, Europe just not even cracking the a hundred mark on this particular story. And uh, that, yeah. So sure. It looks like a, it sure looks like a plan to me to get as much gold ownership across the Chinese gold line as possible as fast as possible. That's a big deal right there. That is a bit that is a big deal. That's a huge deal. And what's interesting is, is Asians tend to be very good savers, right?

And then you get right, you've got government, so they save while the US is spending, and reminds me of the Ant the Grasshopper in the long run, which is, it's told for thousands of years for a reason, or however long it's been in there, but for a long time. But the reality is, is their governments are actually encouraging the ownership of gold. So what do they know that we don't know? I mean, if you look down the road at the end game, there's never been a fiat currency that survived in perpetuity. So they come to an ultimate end game at some point. So, you know, if you've got governments that are encouraging that when the United States, you've got Wall Street this and, you

know, controlling the media, and if they're not going to get paid on it, they're not recommending and encouraging investors to buy gold. Oh, it doesn't pay dividends. And oh, that's an ancient relic. And it's not as sexy as Bitcoin and some of the cryptocurrencies out there. So still, I don't see, I see a lot of denial in the move of the gold price. I don't see any euphoria or thrill or excitement except for those of us that have owned it for quite some time, or those that have owned it recently and had some instant gratification. You know, I'm, I'm gold is backed off a tiny bit here, but to me, Paul, the thesis is, is pretty simple.

Something big has gotten kicked off. We're just out here in the cheap seats, watching big things start to unfold. I'm a little worried that we're back off track because I can tell when the markets are behaving in kind of unusual ways, it means unusual things are happening behind the scenes. We've gotten back to some very usual patterns here of late. Somebody decided to reliquify the markets

about two Sundays ago. It happens. I've seen it over and over again. Uh, it has a very same pattern. Oh, a stocks up bonds up gold down oil down. It's it's the, what you call the holy quad effect of, uh, what you would want, you know, if you're just sort of, you know, gaming the markets for political ends, right. And Biden game, the markets for political ends. We saw that, obviously, you know, people, that's conspiracy theory.

Well, selling the SPR was not a conspiracy theory. It happened. And he did that to day trade the price of oil lower so that it would look good politically. You know, wasn't good for the country strategically, because that's what the strategic part of the petroleum reserve is supposed to be about. But he did it anyway. so it happens, right? And we know that governments have been gaming the numbers for political purposes. They overstate jobs, they understate inflation, all very provable, happens over and over and

over again. So I was kind of hoping we were going to get into this more truthy environment where if I was got, if I got elected, I would have fired everybody who in government who was releasing bad economic statistics because while they might have been good politically, they're no good for using as instruments to drive the ship of state. We need to know what is the actual rate of inflation. How many people are fully employed?

Right? How many illegal aliens are actually in here working at key jobs? Right? How much oil do we have? These would have been critical things to know. And I can tell you there's zero movement on improving those national statistics, nothing. If there's any pressure happening, I'm not aware of it.

And I'm pretty sure I would be. Right. Well, we were promised that there was gonna be a lot of truth to come out that we haven't seen and has not been delivered on. From the Epstein files to all kinds of other information. But Chris, I think that's just an indication of where we are in the societal cycle.

Why this is the 4th turning because you love the truth. That's one thing that I so dearly enjoy about our conversations. We can talk about anything because you're in search of the truth. I love the truth, and that's what I want to know. Now, what's your line? I may be wrong, but I'm not confused. Mm-hmm. So when you're searching for the truth, you may be wrong in the interim period because you can't find that truth, but you're ultimately going to find it because if you search for it with everything, you're going to get there. But the problem is, there was a period of time in our past, and I think those major

events like World War II and when there's a lot of pain, those cycles we come through, that people love the truth and they focus on it. And then you get weak people that are in charge. And they care more about their perception. They care more about their perception. They care more about their look. They care more about the plastic face than they do on the inside. So what is it? I wish I could quote this exactly, but the Bible calls the Pharisees, they're whitewashed, they're perfect on the outside, but they're rotten on the inside.

And that's what bothers me is I still see that continued plastic face in the government. And maybe they're just afraid of the fact that, hey, if we let all this truth out here at once, people's brains are going to seize and the markets are going to crash and it's going to be much worse. So I do see a little bit of a controlled dissent from the view from 30,000 feet. It's like we get these, here's a little bit of truth and now let's back off just a little bit and then let's kind of hold the markets up, let it heal a little bit. And then, and then there's a little bit more truth and then you start to see this decline

because from 2000 to 2003, the S&P went down 47% and the NASDAQ somewhere around 70 or 80 if I remember correctly, I always remember the S&P but not the NASDAQ number. So, but it happened over a two and a half, three year period of time. And there was periods of big declines, relief, declines, relief. So technology employees were laid off relatively dramatically, but the rest of the economy held up well. So I'm wondering if they're trying to control this descent and let this information, you know, maybe that's a little optimistic, but at least that's the hopeful side of me. Is maybe, hey, if we can control this descent a little bit, you get this birth pain, the market rallies a little bit, the people that love

truth have strategies or paying attention, they can reposition themselves, maybe reduce their debt, get in a little bit better position, and businesses can adapt to that better than if you have this sheer meltdown like occurred in 2008, where only those few who had the courage to follow their strategy ahead of time are in a position to keep from getting wiped out. I mean, I do believe that the markets,

if they get back to normal valuations, we got to go 30% below here. And it's much better for businesses if we do that over nine to 12 months instead of two to three weeks. But then see, if we could get the truth to sort of come through, I understand what you're saying, you know, you can't, people can't handle the truth, you know, Jack Nicholson yelling it, they can't handle it. Right? Maybe I have more faith in people than that, but maybe I have too much faith.

And they know better to release it slowly. But if we had actual truth in where we are, so one of the things I've been banging on the table about for a long time, but most recently, because the US Energy Information Agency has even admitted now that the United States faces a peak of oil production. Starting in 2027 as far as they're concerned, but as far as I'm concerned, it's actually we've gone nowhere in two years already. So maybe we're already there, whatever.

It's coming soon, soon enough that you have to have a plan for that. Like what's your plan? You can't not have a plan. You can't be saying, oh, well, we're going to lie to ourselves for a little longer and hope it sorts itself out. This is reality knocking on the door. So what are we going to do about that? Meanwhile, you want to know what it looks like when people get it? It looks like this.

So China just approved the construction of another 10 nuclear reactors. Wow. Mm hmm. 27 billion. And by the way, they're going to build those 10 for 27 billion. We got our two Hinkley point reactors are going to cost us 60 billion. We're I don't know. It's just maybe we could smooth some of those regulations out or something like I can't

believe China is going to get 10 for 27 billion. And we're still trying to cough up to at 60. Do I hear 70? Who knows? Those are supposed to be 32 billion and they're already 60. So I guarantee it's going to be higher than that. But we're doing we're not doing it right. We're doing something wrong.

Right. But this is China saying, wow, we're going to need nuclear 10 reactors. And they just approved some last year and some of the year before. So it's it's they're just like plowing forward. That's a big deal. They're doing the things that we should be doing. And they're focusing on where we're going to be, not necessarily the news, the headlines of the day and the polls of the day.

And that's one thing that grieves me about our leadership within the country is, you know, it's so short-term focused instead of which basically pulls and leads investors to short-term focus instead of focusing on the long-term and a sustainable path. I mean, with all the data, why have we not reinvested in, why have we not put all kinds of investment into nuclear technology, and especially with the thorium reactors and the new technology that China has to be able to shut down? Basically what is it they tested? I don't understand everything behind it, but basically the outcome was they tested a nuclear meltdown and they've got technology now that can stop it instantly.

So they're saying in some of their new reactors, you do not have to worry about a nuclear meltdown. Where in the US, we're still thinking about Three Mile Island and Chernobyl instead of reinvesting into the future and talking about new technologies and how they can be implemented to free ourselves of the potential risk of peak oil. What was just last week that China announced an exciting milestone for, it has a pilot thorium reactor, which is a nuclear fuel cycle. And it's exciting because there's a lot more thorium out there than uranium. And also it's kind of exciting because a little bit wonky, but as it burns through its fuel,

it burns 99.5% of that fuel. It leaves very little waste. That number is almost exactly upside down for the kind of uranium you we use where it burns about half to three quarters of a percent And leaves the rest is waste right that you then have to process and handle it so a it's a lot more efficient that way But what they just announced Paul was they announced their first they refueled the reactor while it was still running That's one of the things you're supposed to be able to do. It has this molten salt, and they just opened a plug, I'm simplifying, and they put more in while it was running.

Ours, you know, with our old 60s design, you have to shut the whole thing down, you have to very carefully lift all these things out, and it's just like this huge process. They refueled it while it was running. So they're making all these milestones, you know, and in the West, we saw Spain getting all excited because they just announced excitedly that they got 40% of their electricity from solar and wind. And as you know, just a couple days ago, we saw the very first nationwide blackout that we've seen in, gosh, it's been years.

I can't remember when the last one was right and there's they still you know what's surprising I still can't find out nobody's telling us exactly what it was you know but like like I figured you should know by now you can just tell us was it hackers was it a squirrel that you know was it our. But I think a lot of people are kind of concluding that this decision to move towards such heavy prevalence of solar and wind, which is intermittent, if it didn't cause the blackout, it caused the recovery from the blackout to be a lot more difficult for sure. Because you can't, it's hard to do a hot spool up when you have to re-energize a grid

when the sun isn't up right for instance or the wind isn't blowing can't do it so Again, this is the kind of stuff. I think we just need to have more reality in our conversations. This is you know, it's just reality Yes, well, and you know and here's the thing when you love somebody You speak the truth as softly as you can, but the truth always hurts. And that's one thing I always tell my kids. I'm like, look, you can tell somebody that really loves you when they challenge you in some of your thought processes because they love you enough to risk the relationship

with you if you don't take that in a good way to try to put you on a better path. So I always tell them, surround yourself with people who have the courage to call you out when you're acting stupid, because sometimes we don't know we're acting stupid until we get hit in the face with a baseball bat. And that's the problem with all this perception

and marketing and manipulation and propaganda that goes in there, they see us as pawns. They see us as somebody to maneuver for their own benefit, not loving us enough to, hey, have a hard conversation with us and just sit down and say, hey, look, the path we're on is unsustainable, right? Electricity sounds great. We'd all love to have electric cars.

We'd all love to have free energy, but to get there, we've got to make these sacrifices in the short run, and here's the truth of the matter. So I really wish that they were completely truthful because they were, like you said, I understand trying to control this a little bit to the downside, but I don't believe in being deceptive about it. We should have that truth, and then just roll up our sleeves and rip off the bandaid and let's move forward because we have enough information now for the pruda to foresee danger. You've been warning people about the danger for so long

and the risks that are here and you can kick that can down the road and they can kick that can down the road until you can't kick it down the road because how does anybody go bankrupt? It's slowly, they're bankrupt years before the actual event because they have to become gamblers and speculators to try to kick that can down the road a little bit longer, but it's slowly and then all at once.

But if you deal with it well before, the pain might be bad soon, but it's far better than the catastrophic failure that covers with that all that happens with all at once. So that grieves me a lot that that we're just not truthful about what's there. And then they try to obfuscate the data to make those people who are warning and watchman look like the boy that cries wolf when they care enough like you do to warn people so that they can make better decisions in the future. The markets are unraveling and the stakes could not be higher.

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The future that I see consists of both winners and losers, but many more losers this time than last time. Go to peakfinancialinvesting.com today and schedule your free consultation. This is your chance to protect your wealth. Again, that's peakfinancialinvesting.com. And I'm Dr. Chris Martenson urging you, please don't wait another day. There were two times that he said this, but this was the first time.

So this is from 2023 when Jay Powell said this. It's your opinion that the level of debt we have is sustainable? Yes. I mean, we could clearly, we have the, you know, the largest economy in the world. We can service this debt. That's not the problem. The problem is that we're on a path where the debt is growing substantially faster than the economy. And that's kind of by definition, in the long run, unsustainable. Yeah. So there it is. It's just, it's unsustainable, right? So again, prudence and being adult, somebody, I mean, listen, Jerome Powell should not be talking about fiscal matters.

He's a monetary guy, but he got asked a fiscal question. Hey, tell us about the debt in the government. That's really on Cynthia Loomis, who was asking the question, other senators and congressmen, right? But that's what he said. And it goes there, but this is, this is where we're at. Our debt has just been growing vastly faster than our GDP. We always knew this was unsustainable.

Jerome Powell told us, so like you said, for the people who have ears to hear, eyes to see, you've been warned. He just told you, Jerome Powell just told you this is unsustainable. And I don't hear anybody talking about how we get off of this. The first thing I've heard in my entire adult life about how to potentially address this, and I'm still skimpy on the details, is what Trump is talking about right now. It's like, look, somebody had to do something real bold. Otherwise, this ended in a brick wall at some point in the future.

You know, we were breaking, and then we stopped all at once, you know. So I think something needed to be done, but I'm not clear. It's I think everything has to go really swimmingly well to pull this off. And all I see is that, and let me put this right on the table, Paul, people in the media and people in the opposition democratic party who are just simply opposed to anything or anything Trump might be doing. In fact, I'll go further and suggest I think some of them want him to fail and they don't care who gets hurt in that process or how many people have to lose their jobs or how bad the country gets harmed in the process.

I think that's what I'm seeing. No, I agree with you completely Chris because You know one Their pride they care more about their plastic face and then they do the truth. Okay number two It's revenge because they give over to their base desires. That's what we people do They give in to their desire for revenge. All of us have desire for revenge when we're hurt. That's one thing about, the Bible tells you you gotta forgive others,

but you can forgive others for your own benefit, not for them, right? I still believe in Jesus, but you forgive them so that you don't get consumed with bitterness. And we can see that they're so consumed with bitterness for several reasons. Their gravy train seems to be over, hopefully, if Doze continues to do what it's doing. They want power more than anything. They're not in power. Even

more so than that, I believe that they, because they want to keep that face, they don't want to be proven wrong. And one thing that I can see is, if I look out there, how good this would be not only for labor and the average individual and build them back in the middle class, but for us as consumers. Because we all know and remember the times that, hey, heat and air units lasted a whole lot longer. They used to last for 15 or 20 years and washers and dryers and appliances and vehicles have,

you know, there's built-in decay. So if you get to a level playing field with those tariffs, okay, and then so we can make it for the same price in the United States that it can be made for in China. Well, if all things are equal across the board, guess what? Now you focus on quality more so than you do profits, right? We don't want it just cheap because it's cheap product. We want quality. And how great would that be if companies were back to trying to make the highest quality product that will last for the longest period of time.

And that's not great for profits, but that's what you should do as a company. If you're producing a product, it should be of the most excellent quality. And it should be, you know, you shouldn't have all this built in repair and built in, you know, breakage within the system so that you can maximize your profits. And I go back growing up in the lumber industry, and look, I don't know, guys, I'm not a chemist

and I'm not an environment, you know, I don't know everything that goes on the environment as far as the impact of environment. But I can tell you this, pressure treated wood that was built in the 1980s lasted, you know, for quite some time. And there's a dock on a lake that our family had built that had pressure treated wood that was built in the 1980s lasted for quite some time. And there's a dock on a lake that our family had built that had pressure treated wood put on it in 1987. And those boards are still good. And I grew up handling those boards and I don't know anybody who's

had major issues from that, but yet you buy pressure treated wood now with all these new regulations and within three to four years, you're having to replace that sometimes if you're not spending lots of maintenance and chemicals to try to keep it painted and up to date. So is it really for the environment or I can't answer that. I'm just making an observation and products that I've used over my life or is it for maximum profitability for those companies that are selling things because you've got the basis trade that you talked about, erosion,

for those of you, if you've not listened to that, you gotta go listen to it, it's great, an interview that you had with him or them, and, you know, keeping this ability to be levered to the hilt in financialization. So the end result, if we can get there, I believe would be phenomenal for, for the citizenry and the consumer and labor. But the reality is, Chris, it's a complex system.

I mean, these are things that people are levered to the hilt across the board. And if one thing goes wrong, you know, you can't control that complex system. When I was growing up, my grandparents had the same refrigerator, the same washing machine and dryer, the same TV. We had the same, like nothing changed, right? It was unthinkable that you would get rid of stuff. But what's interesting to me right now, Paul, is that, you know, people really want the alternative and let me turn this off because but I found this is shocking Apparently there's a Toyota truck that that will sell for ten grand, right?

And and they sell it all over the world and nothing fancy, right? I mean, it's got a little roll bar on there. But otherwise this thing's like all the analog I think the windows cranked down like the old-school style apparently, it's you know, fairly indestructible and people in the United States want it. I mean, of course they do. And we're not allowed to have it. You can't import them here, not allowed. Your truck has to cost $75,000. That's how it is here, right?

Well, you got to have a truck that costs enough where the banks are forced to loan you money so that they can make money. And then you got to protect the profits of the over levered, you know, car manufacturers in the United States. And I know why they won't sell that. It's the same reason a lot of the, the diesel engines that you can buy in Canada that you can't have inside the United States is because I'd buy one of those trucks and I would drive it. And I know a lot of people who would do the same thing

because it's affordable and it gets the job done. Now, what I wanna drive it, I haven't driven it, I would assume that I don't wanna drive it on an eight hour trip to the beach in Florida because it may not be that comfortable, but to do work around the farm, around town, to drive a starter car for kids when they turn 16 would be phenomenal. That's less burden on parents when they're there and they keep us our citizens from being able to own that.

I think that's just ridiculous. Well, and I mean, you know, and if two kids are each driving one of these and they sort of bump into each other, it's like 50 bucks of damage, you know, you know, so insurance goes down. I bet you that kid replacing himself in the backyard without having to go, you know, have all this complex work. And that's a good lesson for one that's not paying attention as well. Exactly. So, I mean, lots of reasons.

So, but obviously in the United States, we've been treating ourselves as sort of tax donkeys and also consumer donkeys for a long time that we even call ourselves consumers is when you think about it, it's pretty denigrating, you know? It is. Well, and the financial markets have become the same way. I mean, literally, there is so much propaganda that has fueled and passive investing, right, has worked through all of this this terrible period since 2008 this stressful

Overvalued period it's worked because the feds stepped in and bailed out You've had liquidity that's been put into the system, but it's inherently unstable unsustainable from a long standpoint because And I believe that we get warnings. Okay, I believe that God will warn us and from time ahead of that we get warnings. Okay, I believe that God will warn us from time ahead of time. We get birth pains per se that will warn us so that we can look up and the prudent can foresee the end game if you're looking down the road and you're looking at the sustainability.

So when you look at what occurred in the 1990s where Greenspan basically got to the point where everybody, I remember on CNBC, they would look at his briefcase to see what his briefcase looked like, trying to anticipate what he was going to do, and that he set the backdrop for these markets to be fueled. Well, guess what? It took 14 years to work off that excess in the system and how overbacked it was, and you had 250% declines. Well, where are we today? They've done more of the same that put us in the situation that led to the 14-year sideways period. I mean,

the globalization maximized profits, but what they've had to do is do more of the same times 1,000, and our debt skyrocketed and we're unsustainable. The hard part is, is you don't know when this ends. Nobody knows because it's so complex. Can they kick the can down the road another five years? Have they figured it out to this point that it's perfect and they can spin all these plates without any mistakes? Is AI gonna give them the answer to everything? I don't know.

AI is certainly a powerful tool. But like Jeffrey Tucker talked about in his house of Jenga cards, where you pull that out, there's so many moving parts, that if any one thing goes wrong, and it sets off a chain event across the system, and especially how over leveraged everything is right now, you know, we may not necessarily get that, that euphoria perfect outcome. And that's my concern right now to try to help investors navigate.

Well, you know, we're just trying to hang on to, to what we got and it shouldn't be this complicated. You know, it really shouldn't. I mean, all due respect to your profession, it's, it's way too complicated for, you know, I mean, I mean, if you could just fix, if we just had one fixed variable, like if our money wasn't being inflated away, that would, that would sweep a lot of complexity off of the, off of the table right away. You know, it would.

And you could be rewarded for good behavior. And on the other side of that coin, you're gonna be rewarded for bad behavior, but it's gonna be a negative reward. That's where we need to get back as to where you're rewarded for good decisions and prudent decisions. You know, it's been a while since I've stated this, but we've had to make adaptations in our strategy, thank goodness for people that God brought into my life

throughout, over time. And the quote that I'll never forget is, you have to play the game by the rules that are forced upon you. I really wish in an ideal world that I can make mathematical investments in good companies in a fundamental manner. I really wish that we were in a world

where people come to me and they're like, hey, I just bought this rental property, what do you think? And I'm like, I wish we'd talked about, I'm like, well, when I do the math, by the time you have a wear and tear and replacement and effort, you're not gonna pay the mortgage off for 30 years at the rent that you're getting. And so you add replacing the roof and appliances

and some tenants to do some damage and 20% vacancy, which is historically been the number that you want taken into consideration, then you're looking at 40, 45 years before the tenant pays for the property for you. I remember periods of time when you could buy properties and for seven to 10 years, the tenant would pay the property for you. That's an investment. It's a speculation at the prices that we're at right now.

And you have to assume the asset prices are going to continue to inflate at the price that they have been for that to work out. And if they don't, you're in trouble. So I can't wait till the day and I hope that there's a day that we can get back to investing. For now, you play the game by the rules that are forced upon you when you can. We've got tools that help us do that. There are times where you stand back and just observe for a little bit.

And then there's times where you're playing hard defense and protection of capital so that you're in a position to take advantage and be able to invest when those prices get back to more reasonable levels because at some point they will. I don't know how they get there, but at some point we're gonna get back to longer term sustainable foundation.

We're not, we're on the house of cards right now. Or a Jenga tower is this or whatever. The Jenga tower. That was a good announcement. I've read that article three times. It was really good. Oh, he's such a good writer. I like Jeffrey a lot as a person too.

Um, well I have to call it here cause I'm looking at the time I'm, I'm running for a local select board office and tonight is meet the candidates. And so I got to get on down to the town hall and hopefully answer questions from a throng of people or all eight of them, whoever shows up, right? I wish I could see that. I'd be in the back cheering on. It's fun. It's fun. It's just time to see if I can give back a little. I think I'm going to able to see that. I'd be in the back cheering on them.

It's fun. It's fun. It's just time to see if I can give back a little. You know, I want to help the town run more efficiently if possible. And I think I have some things to add, but we'll see. So with that, Paul, if anybody wants to talk to you and or your team, they go to peakfinancialinvesting.com, fill out a simple form. Apparently you've been pretty busy lately. So, I'm glad to hear you've been keeping busy talking to new folks.

We have been. It's been good. We've talked to everybody, communicating, and just met a lot of wonderful people that are just trying to find a way to navigate. And it's really exciting to meet people who care for truth, wanna know the truth and the reality of their situation and make pretty good decisions going forward. All right, well, Paul, have a great weekend. Thanks for everybody who's been here with us listening to this. We'll be back next time.

Of course, leave your comments down below and if you have any questions, just put them down there. Paul or myself will probably get to them as soon as we can. So with that, thanks very much for being here Paul. Have a great weekend. We'll see you next time. See you soon Chris.