Peak Prosperity - Debt, Dollars, and Dysfunction: The Case for Monetary Reinvention and Regulatory Reform

Episode Date: November 22, 2024

Chris and Paul discuss the surprising stability of financial markets amid geopolitical tensions, U.S. deficit spending, and potential regulatory reforms inspired by international examples like Argentina.

Nothing in this program should be considered investment advice. It is for educational purposes only. Please hit pause and read this disclaimer in full. Thomas Jefferson, I believe it says, if you give the control of the people's money over to a central bank, first by inflation, then by deflation, they will rob you of all your wealth. 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. Welcome to this next edition of Finance U. I am your host, Chris Martinson of Peak Financial Investing, here again with Paul Kiker of Kiker Wealth Management. Hey, Paul. Good to see you. Good afternoon, Chris. Good to see you as well. Well, here we are recording this. Looks like it's around November 20th. Exactly. And there's some really big geopolitical tensions going on out there that have been shocking to me, Paul. We've been talking about it back at Peak Prosperity, which includes the idea that the peaceful transfer of power to Democrats apparently means say the words, but then lob some missiles into Russia. I haven't seen a lot of

market response to that. I'm't seen a lot of market response to that. I'm a little surprised because I'm old enough to remember when the prospect of nuclear thermoconflagration was a market moving event. It didn't really budge the market even slightly. How do you interpret this? Well, so I see the headlines, markets down coming in, you know, clear about the response that he's going to have. So I come in and we've been testing in the office. I'm like, I walk into Dylan's office and mine and I'm like, OK, we've got headlines. You got to you got to build, you know, a terrorist attack has happened or whatever.

You got five minutes to build the positions in the portfolio and be ready to liquidate. So we actually came in and built positions just in case several things started breaking support levels in case there was a response. And then market opens, and then it starts getting a little more strength, a little more strength throughout the day. And then I think we closed positive at the end of the day. Yeah, we did. Yeah, we did. So I'm confused with today after they shoot the cruise missiles. What were they? The storm shadows. Right, Chris?

Yeah, the UK, some some UK storm shadows, it. My biggest concern is there's rightfully so, so much hope from Trump being elected, that there's irrational hope with all the things that are going to have to be done. And the markets have so ignored whatever's happened in the past. Maybe people don't believe that this could accelerate into World War III. I don't know. But, I mean, this is a huge red line that they've crossed that I was just flabbergasted. I mean, the American people voted for the man who says he wants to end the war. Clearly, popular vote, Senate and House now, right?

So that's a clear mandate that the American people do not want a war in Ukraine, but yet you're going to accelerate and run risk and cross all these lines that Putin has stated he's going to respond to, and the markets do nothing. One of the analysts at Rabobank put out an article titled, you know, hey, when you see the headlines, World War III has begun, you might as well go all in the market. Why not? Right? I mean, he was being sarc go all in the market. Why not? Right? I mean, he was being sarcastic, obviously.

Yeah, why not? That's how the market seems to be behaving right now. And it's irrational. Well, is it the market or is it the market, right? You know, there was a theory that went around a while ago, and I think it's true for corners of the Internet where they said the Internet's dead. Because what happened is it got taken over by bots, and there's whole corners of the Internet where they said the Internet's dead because what happened is it got taken over by bots. And there's whole corners of the Internet where it looks like humans, but it's really just robots on robots doing things back and forth, commenting on each other's stuff. And so it's dead in the sense that humans aren't involved anymore.

I'm old enough, Paul, also to remember when the floor of the Chicago Mercantile Exchange, NASDAQ, New York Stock Exchange. Even today, you go to the Wall Street Journal, like traders were, you know, cheered by or something, and they show a picture of a guy, usually. Frowny face if it's a down day, you know, smiley face if it's an up day, you know, taking orders on a piece of paper, right? I think those stock photos are from, like, the 70s or 80s or something, right? Because it's all just blinking lights and computers now like so somehow the computers scan the headline in nanosecond time frames are watching what the other computers are doing and nobody's doing anything so it floated higher which uh just means that that there's plenty of liquidity to support that behavior at this stage. And, you know, reality need not apply yet in this story.

Yet. However, and I think people have become complacent because market valuations, we can talk about the Buffett indicator. People are like, wow, Buffett's got the highest number, amount of cash that he's had in a long time. That's interesting. Let's go chase Bitcoin. Right. Like they, they, they look at him like, you know, the Oracle of Omaha. He's, and he has, he has the right reputation for a reason. He's good at what he does and he's disciplined, but there's a disconnect between the warnings

that are out there and the artificial hope. And there is no alternative and all these, you know these reasons that people come up with to ignore valuations. And granted, valuations cannot tell you when the market peaks because they can stay above historical norms for a long period of time. But what they do tell you is how much risk is to the downside if and when. And it will be a when at some point in the future. We just don't know when. The market normalizes.

And from where we are right now, that's somewhere between 40 to 60% if we don't walk this, if we don't pull off this high wire act perfectly. Hello, everyone. I'm Chris Martinson of Peak Prosperity. And I want to tell you about something. So you've 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 topic, but this is what I do, and I do exceedingly well. I will find ways to understand this and communicate it to you. And I'll find the other experts out there who are just the best at figuring out what you can do and how you can understand this thing. Now, I hope that nothing comes of this great taking idea.

I hope that the trigger is never pulled, but it might. So to help you get there, we have the Great Taking webinar, a variety of experts, and we have seven strategies that we will outline and also are contained in this workbook that comes along with the Great Taking. It's there anytime you want. Once you have secured your access to the Great Taking webinar, you'll be able to download it, look at it, and view it anytime you want. And you should actually do this with people you love, other people people you care about and anybody else you think who might need to know this information so with that 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. Let's talk about some of these macro pressures. I mean, you and I, in the past, we've talked about how there are certain signs out there that include things like credit card delinquencies, commercial mortgage-backed security delinquencies, default rates on auto loans, things like that. There's various signs of stress out there, but somehow they haven't spilled over into

a wider sense of the markets. I think there is a little holding things in abeyance because, you know, Trump got elected, kind of a shock. You know, what does this mean? We saw a huge market rally the day after that election, right? Over a thousand points on the Dow, things like that. Now we're sort of in that holding period with the usual. Come on, it's November.

So you got your Santa Claus rally. We tend to drift higher into the end of the year. It's kind of how things go. i think we're looking at january here um to sort of begin to get a sense of what might happen now i gotta talk about the department of governmental efficiency doge what a great i don't know if everybody knows this, but the U.S. government's deficit spending alone is about 6.5% of GDP. It's a big number. And, Paul, it represents some big number, I think, of the overall growth in the economy. Like, if we took that 6.5% away, we'd be in a capital R, if not a little D, depression.

It would be a pretty, pretty stiff pullback if the government was not deficit spending at this rate, which of course leads to higher levels of debt, because when you do deficit spending, you have to take on more debt, deficit and debt being two separate words here. What are you seeing in terms of that? Do you think there is a chance that the Department of Governmental Efficiency would begin to rein in that huge deficit? Well, you just made me think of a tweet that Eli must put out. So I want to share this real quick because it sets the context well to help us, you know,

have some information on the person that's going to be in there responsible. So hopefully this will pull out good enough to see. It's not like he's doing anything else. So he'll have plenty of time to put on this. It amazes me how much he posts. So Elon Musk puts out, this was what, November the 18th. So this was a couple of days ago at 6, 11 p.m. If we don't tackle the national debt, all tax revenue will go to paying interest and there will be nothing left for anything else.

So, you know, this is in response to Wall Street, May I posting? It was only July 28th when we reached $35 trillion for the U.S. national debt. Now about 100 days later, which what you pointed this out about a year ago, nearly every 100 days we're spending a trillion. You know, it's growing by a trillion dollars. Interest on national debt is on pace for $1.4 trillion for 2025 fiscal year. About 25% of U.S. government revenue will go to pay interest on the national debt. That's just unbelievable. And this was dated July 26, 2024.

So you've got the man that is in charge, that understands if we don't tackle this. And my concern is, is when you pull all of that reckless spending out of the economy, the surprise may be that if the economy has to stand on its own two feet with what the consumers are doing right now, then there's going to be a big reset that takes place in our expectations of what the reality of the economy is. Because we've got the highest number of bankruptcies of restaurants. Well, why are restaurants going bankrupt if there's all kinds of consumers out

there blowing money on eat out, right? You've got Target, which you showed me that chart earlier. Target missed their earnings and cratered. Yeah. And you show that. Look at that. 30 down 21%. That's pretty big for a company target size.

Yeah, and you can't tell me that investors didn't see that coming. Where are the boots on the ground for the investors that are out there, you know, to recognize why are you going to drop, what was that, 20, 25%, Chris? Or is it more than that? I can't see. 21%. 21%. So you're down 21%.

All of a sudden on surprise news that the consumer is struggling. So those are just warning signs for us to take into consideration. It doesn't matter yet. And it may not matter until the inauguration. It may not matter until April. But if Department of Government Efficiency gets in there and cuts the fat out, just like any good business owner would do. Just like that.

Yes. If you ran your business or I ran my business the way the government is, they repossess everything I've got, stop lending us money, and probably throw us in jail for something. Well, I've heard that the Department of Governmental Efficiency, run by Elon and also with help from Vivek, and they're taking ideas. One of the places I've heard they're taking ideas is from Argentina. So Javier Millet is sworn in December 10th, 2023. So at the end of 2023. So he's basically had about just a little

under a year to do some stuff. Paul, what he has done in less than a year is nothing short of a miracle. Maybe the kind of miracle somebody like Elon and Trump would be looking for. Here's a really nice summary of this by Ben Averbuch. Listen to this two-plus-hour interview on Lex Friedman. He slashed 3,000 regulations in just six months. Famously, I think you've seen this thing where he's just... Ministerio de Turismo y Deporte. Afuera. Ministerio de Cultura. Afuera. Ministerio de Ambiente y Desarrollo Sostenible. Afuera. it's just public works out even if you resist yeah ministry of science technology out look at the glee uh yes ministry Ministry of Labor, employment, out.

Education, indoctrination, he says, out. So he's done that. 50,000 employees gone from their government. It's not that big of a country. And then inflation dropped in his first year from 17,000% to 2.4 percent and they had the first surplus in 123 years and the economy started growing again the real economy not the socialist economy not the we tax you so that we can have more workers so that you can get taxed more economy not that one right and malaya and musk have had multiple meetings. They're going to replicate our model in America. That's what Malay said to Lex Friedman. And this is what I

loved. He had just a couple pieces of advice. Malay's advice to Doge was simple. Cut to the chase. Push it to the very limit. Don't let down your guard remove every privilege so hit it fast hit it hard get it done people are going to cry they're going to explain how the worst thing ever is going to happen mostly they'll not have a paycheck they'll have to go find something productive to do and uh we'll move on and maybe with a healthier substrate. But this is going to have enormous impacts, I think, on markets and portfolios. It's really pretty big. How would we begin to analyze this? Well, we really have no way of analyzing outside of just assuming until we have honest data. I mean, you know, real data, let us see where things are.

So my assumption would be, so one thing I want to show, because this does set the perspective, is let's look at what's happened to the Argentine market since Malay took over. I've just been fascinated by it, so I've been watching it. So, and when did you say he took over, Chris? At what time was that? December of 2023. So December of 2023. So, and when did you say he took over, Chris? At what time was that? December of 2023.

So December of 2023. Okay, so here's December of 2023. Let me fix this where it's a little bit easier for people to see. So December of 2023 would be right in here. Okay. Wow. Look how good their markets have done since December of 2023. That's actually October.

So if we go into December, right in there, okay? But you can see the optimism that occurred after he starts coming in. Well, you can see that those markets did nothing for a period of time, okay? So I'm not sure what'll happen to our markets, but what I can tell you about Argentina is with inflation at the rates that they were running, everything that was taking place, the corruption that was known there, investors were not flooding capital into Argentina. Okay. They were staying away because it was a known mess. It was known to be corrupt. And then Malay has started changing that. so now capital is flooding in. So if we go back to where our markets are now and just how different we are than Argentina and how completely different it is to what they were facing, and this is the U.S. markets, as represented by the S&PP 500 going back to January 1st of 2008.

Okay, our markets are ridiculously overvalued because money has been chasing into the U.S. because we've been believed, to be honest, and we've outperformed. So it feeds, that outperformance feeds itself because commodities are down. The index is below what it was January 1st, 2008, 11% below the Goldman Sachs Commodity Index. Emerging markets are 11.6% below. And the developed markets index is basically even. So Doug Short did a great job in this article, and I want to point this out. So Millay goes in, he strips all this extra out, pulls inflations down, deregulates, and the economy starts to surge. I think the same thing will happen for the real economy within the U.S.

because most of these regulations aren't doing anything except for cramping the individual's ability to build a business because all they're doing is supporting the monopolies because our politicians have sold themselves out to the individuals who can hire them the most. All regulations that I see coming through in our business, probably for past 15 years, have done nothing to protect the consumer outside of cybersecurity stuff. I will agree. Or the businesses, small businesses, nothing. Yeah, or the small businesses. What they're doing is protecting the monopolies that are in power and further helping those monopolies, which we call it the Magnificent Seven right now because that's what's driving the large majority of the market returns over the past couple of years. So Doug Short at Advisor Perspectives put together this great article, and I don't want

to lose this chart, so I'll come back and reference the article in a minute. If you take the average of the four valuation indicators, so you've got the CrestBot price-to-earnings ratio from its arithmetic mean. You've got the cyclical PE10 from its arithmetic main, which is just using the trailing 10-year earnings as a divisor. You've got the Q ratio, which is the total price of the market divided by its replacement cost. And then the S&P composite from its regression is just composite price to regression trend line. So what we're seeing right here going all the way back to 1900, what do we notice? The first major bubble was in 1929. The next we had was

in the late 1960s when we got up towards those highs. Well, 1974, we had a 47% decline and the market was sideways from mid 60s all the way to 1982. Then we had the year 2000. We know what happened there. So we're three standard deviations, and we just set at 141%, the all-time record high of the average of those four value indicators. So you pull this extra fiscal stimulus out of the economy, you cut all this fat out of the economy, we're going to have to reprice, as my concern initially, to build that foundation to go forward from. And it's a long way from here all the way down to its mean.

So that's a pretty substantial decline to get back to the baseline of where a strong economy is. So I think it would be painful for investors who believe that passive is the way to go, but I believe it'll be the single greatest opportunity of a lifetime for those who are running a risk management strategy and prudent and can adapt to however this unfolds in the months, days, weeks, and years ahead. All right. So I like this. Paul, can you indicate where 1987 is on that chart for me?

Yes. Let me go back to that. I do want to reference this so she gets credit. That's Jennifer Nash through Advisor Perspectives, Market Valuation. Is the market still going to pay? Okay, so I've got that done, right? Yeah, yeah. And I like Doug Short's stuff.

Advisor Perspectives is a good outfit, good stuff. 1987 would be approximately right in here, Chris, because we got up, you know, we started to come out and then back. So that's where it all started. So that's 1990 right there in recessions ring and the shaded gray area. Yeah. So 87 for me, because that's when Alan Greenspan came in and started doing this whole interventionist Fed routine, right?

And the Fed's going to just bail out the market and do the Fed put and all that other stuff. So the first thing that happens after it comes out of that is he creates the largest bubble that we've ever seen in that series, right? When you see that, it just crams right up there into the 2000 bubble and then bail out bail out bail out bail out so they've gotten really addicted at this point paul i think everybody listening to this including myself is habituated to the idea that the fed's just going to keep doing that because that's what they have been doing for our entire adult lives. But that's not what you necessarily should be doing if you want to run a reasonable tight ship. So I had the great

pleasure, I interviewed Thomas Massey yesterday and I asked him about his end the Fed bill, you know, and I was like, yeah, I love the bill. He goes, oh, that's because you know why that bill so good, Chris, because I put extensive R&D into that bill, which means repurpose and and and distribute from other people's work. Right. That's Ron Paul wrote that bill. Right. It's just this great thing. But he said the Federal Reserve has just been stealing from everybody. Yes. By doing their whole print-a-thon. And then they enable their partners in crime over in Congress to not have to tighten their belts because they know the Fed will always print it all up. And then, you know, everybody just sort of gets sloppy and lazy.

But when you blink twice, you find out that what they're doing with all that is transferring wealth from everybody into, they're creating the largest wealth gap in history out of that. Right? Fine. I think people are, this is a political thing, and I know these are very hard to analyze, but what I'm seeing now, Paul, is that people are waking up to the fact that we're sick and tired of being sick and tired. We don't like what the FDA and CDC have done to us, right? No, they've dropped the ball. They've done worse things than that. I think some really ugly things are going to come out and people are like, don't want any more of that. We found out our Department of Justice had been weaponized. And I think people are waking up and going, don't want any more of that. I think the Fed's going to have to be in that chopping block array at some point where we're going to have to say, what are you all been doing? You're supposed to be the experts.

If you were experts, wouldn't things be working out for everybody? And actually it's working out less and less well. And you have to do larger and larger rescues on an ongoing rolling basis. I'm worried. There's a political risk for them here where they may, they may everybody's ready. Paul,

this is my, my fear. I'm ready. Maybe you are too, for them to just bail this all out again. What if they don't? Well, Thomas Jefferson, I believe it says, if you give the control of the people's money over to a central bank, I butchered the first part of that. But this is right. First by inflation, then by deflation, they will rob

you of all your wealth. So, you know, how do you set the greatest trap? You train people like Pavlov's dog that when the bell rings, let's replace that bell ringing with the Fed cutting interest rates, QE1, QE2, QE3. Those closest to the decision makers knew, knew those banks knew the traders go all in okay those of us who are trying to be prudent managers of our wealth who are who are who are believing what proverbs is taught in wisdom the book of wisdom prudent for see danger and hide themselves while the simple pass on and suffer for it. We recognize, hey, we're crossing boundaries before, like market valuations are a record. What they did in the 1990s, what Greenspan did, we now know led to the housing crisis, and that blew up, and how much damage that did, and we're going to do more of the same.

Then all of a sudden, there's no alternative, and we have to come up with, now we got to play the game by the rules that are forced upon us. Well, there are a few of us that are left that are diligent and paying attention to our signals because, and I tell clients this, I tell the investment committee, remind them all the time. We don't know if this continues forever and it's a permanently high plateau. I don't believe that it is, but that's the attitude that's out there right now. Just people are smart enough not to say it because they don't want to be judged in history by what happened to the individual. You probably remember his name. Irving Fisher. Irving Fisher.

Look, y'all, Chris is like a walking memory bank. I love it. That was an easy one. Yeah. So when he stated that, right, and then everything came apart. So nobody wants to say it out loud, but everybody he stated that, right. And then everything came apart. So nobody wants to say it out loud, but everybody's behaving that way right now. And, and there's such complacency in the underlying market that when, you know, we, we see it in every aspect, that's why we're

playing the game by the rules that are forced upon us right now, but unbelievably diligent. And it's okay. Look, if you break down these support levels, they're there for a reason. They're there to tell you this is the level below which a vacuum can occur in a hurry. So what? We make a transaction, and if we get back above it, we reallocate to that capital. You get whipsawed a little bit, and maybe it goes for another two or three years. But if that rug gets pulled out and that deflation comes along, the prudent are going to be standing when the passive are going to pay a huge price for it. It's what I'm concerned about.

That's not a prediction. That's a concern. But I don't believe that it's different this time. We may break records, and it may be, a little longer than most people believe. But the surprise right now would be, Chris, I mean, I don't I've not talked to anyone outside of one person that's way far left and hates Trump. Even the ones that voted against Trump fully believe that the markets are going to repeat that 2016 to 2017 cycle. But this is a completely different environment than what we had then.

So I'm not saying it's not going to happen, but it's going to be a lot harder to overcome, especially if Doji does what they say they're going to do. They learn from Malay and they bring honesty back to the Fed or get them out. I don't even know how that would happen. Or the Fed says, hey, we're not going to play this game anymore. We're going to try to hide in the shadows, and they pull the money spigots out.

Well, I mean, but this is the main point, which, again, is a brain twister. But listen, Trump came out the other day and said, what if we got rid of income tax, right? Oh, well, that would be a's a good idea you know that sounds fine we're gonna you just you you put the data next year 2025 which we're in the midst of now for the government fiscal year on track to spend 1.4 trillion dollars on interest payments alone okay 25 of the government's budget right right? So here's a question. This is the brain twister, and this is the substance of the end the Fed bill and things like that is why wouldn't the Treasury, what great harm would happen if the Treasury just

issued its own money directly, didn't borrow it? Like, is the Fed and its proxies doing such enormously valuable service that it's worth $1.4 trillion to run that for us? Because that's the cost of the interest to have a banking system run our money supply. Okay. How many businesses can you name that are a $1.4 trillion business? That's just the interest. That is like risk-free profits, right?

They just happen because you and I work hard and pay our taxes and all that other stuff. That's the game. So once we open our minds to that, I think this is what I'm trying to, I think this is what's going to tee up for next year if they don't get us into World War III or crash the economy between here and inauguration. These kinds of fundamental questions are going to get up and at least get debated. So what would happen if we just issued our own money directly and just cut the banks out? That's a good question. Nothing bad, as far as I can tell, right? You're still overspending. You still probably have inflation, but now you're not paying interest on it.

Yeah. Yeah. That would be pretty amazing. And that would, you know, my assumption would be it would put the power back to the people. Cause one thing I've noticed 2008, all of your local community banks were taken out. Now we have one that's here, but we used to have five. We've got one that's left, and they're one of the few that stayed standing. You could walk in to those banks back then before 2008 and get a signature loan and get easier access to capital. Now, the only way you can get access to capital is if you don't need it. Wall Street's got all kinds of access to it, but the individual doesn't. So if you take away the easy money at the expense of the taxpayer

away from these big banking institutions, in that case, I would assume that that brings serving the individual back, and that would be a massive boost for the economy, because that's another way that the monopolies are protecting themselves. They raised, after 2008, the capital to start an individual bank to $500 million, I believe it is. I haven't thought about that number in a long time, but it was huge, because I had gone in with several people, and I'm like, hey, let's take this opportunity to start a bank. Prior to, you had raised like $25 million capital, start a bank. Then they raised it to 500 million, which axes out all but the big players. So if you bring that back to where the people can compete with,

with gaining access to capital, like the monopolies can, then I think it was, it was you or Jordan Peterson, both of you. I think you talked, it was you, started talking about demoralization. That's why kids aren't doing things. They're demoralized, right? They see all this Instagram about how things could be, but they can't compete with these monopolies because they've shut the gates down to everything.

You put that back in the individual's hands, now you have hope. You've got the American dream that can come back. You have a reason for our kids to look forward to being able to be their own business owner and compete. I think that's what happens on the other side of it. And I think that's what we've seen happen to the average Argentine citizen with Malay coming in and getting rid of all those regulations, right? Yep. And, you know, you always need a few regulations to make sure people are safe and secure

and things like that, but we've gone way too far down the regulatory path at this point in time. Well, you know this like I do because you've got your own small farm, right? And maybe it's different where you are because you're a little more agricultural,

but here, if we wanted to get to an approved USDA slaughterhouse, we either have to cross state lines and drive two and a half hours or we got to go the other way and drive three hours. It's a long way to go. That is a long way. And it just doesn't work out for a small farmer. You got to load your your animals up before dark, you know, and take them on a long, stressful ride and all of that other stuff. It's just doesn't work out, you know? And the rules there are extraordinary, right? It's down to, like, what kind of light bulbs you have to have

and which direction your faucets turn, and, I mean, it's amazing, right? These book this thick, you know? And, yeah, it's just got to silly point i mean we see it but we see it at all levels right i think last year in this state of massachusetts they added this many inches i mean almost a full inch of new code to our building codes which were already this thick when i when i was a boy i was on a framing construction crew the code book was like

a pamphlet. Literally was. Put this many nails per board or whatever, you know. Like, it really was. We added this many. That's insane. That's insane. Nobody can explain why. How many of them have helped you?

Yeah, how many have helped you as an individual? Well, hey, here's my experience. I grew up, my grandfather was in the timber business, and then his boys, my father and my uncle, opened a lumber supply. So I grew up stacking wood, right? Every time that I wasn't working, I was stacking, putting supplies together, and we sold a lot of pressure-treated timber, okay? So there are decks that were built in 1986 and 1987 before the regulations change that have not had, you know, you haven't had any rot in that pressure treated wood. Now look, I don't know all the chemical and science behind it, but I will tell you from my observation,

I had splinters in my hands all the time as a kid. It'd fester up a little bit. You pull the fester, pull the splinter out, but it still festers up when I get splinters. Handling wood around the farm, things like that, you get them all the time too. But I don't know anybody who had any major impact. To me, it seems like when you buy pressure treated wood today, it's a joke. About seven years, you got to replace your deck. Well, you know, then I got to thinking after spending my life on Wall Street and knowing how that works, I'm like, somebody paid somebody. This is my assumption. No science behind this, just an observation. Correct me if I'm wrong. But my observation is, makes me question, was that really about protecting people in the environment or was it about, you know, increasing regulations so that you're selling more product?

Would we not be better off to have materials that, because I don't know anybody that was impacted greatly by that, that are going to last for 25 or 26 years versus something that has to be replaced every seven years? Because now that benefits Home Depot and Lowe's a lot, but there's not that many small lumber supplies that are around to compete with them anymore because it's hard to compete with those top monopoly powers when they've got access to Wall Street money on capitals cheaper versus your mom and pop organizations that are in small towns that have a hard time competing with them. Well, I'll tell you, pursuant to that, this whole idea that maybe they made a greener pressure treat adoption, right? You have to actually look at the total story there. So we have a 90-acre parcel that's getting logged out right now. Responsibly, they take about half the trees.

But I asked him, where's the hemlock going? And he said, oh, that all goes to Canada. Like, why is it going to Canada? He said, because they that all goes to Canada. Like, why is it going to Canada? He said, because they pressure treat it up there. And then they ship it back here because they can pressure treat it with some stuff that we're not allowed to here anymore. So even to get that faux pressure treated stuff now, we take trees here. We ship them hundreds of miles. It gets treated.

We ship them hundreds of miles back. And this is greener, right? Yeah, it's it's it's it's crazy. You know, I have a very simple fix for all these rules. Paul is very simple. It's very simple. If an agency believes something is really important. Right. Then they have to fund it out of their own budget. That's a good point. So if they decide, Paul, that you have to have a USDA inspector at your little local slaughterhouse or abattoir, then they have to fund it. That's fine. That's how we know they believe in it, right? Comes right out of their budget. Did you hear about that case? There was this Australian beekeeper guy,

and the agency thought they had detected some pathogen, so they made him burn $2 million of his equipment, right? Yes, I heard about that. Because they felt it was that important. You've got to burn your equipment. I'm like, fine, then that $2 million comes right out of your budget. That way we know you believe it was the right thing to do, and you fund it, go for it. That's a great point. Look, we're going to make you put these things down, but we're not going to destroy your life. Here's the money for it. It's out of our personal budget. We fully believed in it. Poof. That's brilliant because as a business owner, if you believe in something enough and you have to put your own capital there and there's no free money coming in. So, so that makes sense. That levels the playing field.

Yep. And then I had one other like brainchild the other day, I was talking with Evie and it sort of emerged, which was, you know, here's this idea. Let's say I earn a thousand dollars, Paul, and I give it to you for a half a steer or something. That would be a good deal if I got that. And, uh, yeah, That would be a good deal if I got that. And so I had to pay tax on that thousand dollars. I give it to you. Now you got to pay tax on it. Right. And then you give it

to your tractor fixer guy and he's got to pay tax on it. That same thousand dollars could get taxed all the way to like where more of it than existed went to the government. So imagine if you had a thing where there's such a thing as post-tax money. You've earned it. You've paid taxes on it. But now it has a different marker on it. This is where I could see like a crypto or a digital asset coming along saying, Paul, would you rather I pay you in pre-tax money or post-tax money? Because if I give you post-tax money, you're not going to get taxed on it.

It's already been taxed. Government took its nip. Had fun. Right? That's an interesting concept. Wouldn't that, that would change a lot of things right away. I'd have a hard time paying anybody with post-tax money. But yeah, I mean, where it is right now, it's not serving the people. You know, I mean, my wife tells me to be very careful, but she's in education. And she's like, we spend so much time doing things that aren't making a large impact on the lives of our kids.

And she's like, everybody means well. But everybody's also trying to serve these, you know, these dictates that are coming down from these individuals that are so detached from what we're dealing with on a day-to-day basis with the children. And, you know, I told her one day, I was like, nobody let me in there, but I'd love to get in for a while and try and see what we could change. That's not my role, y'all. I don't want to do that. But I think if an outside perspective came in, you know, and I think that's the problem today. You've got these intellectuals that really believe because they're good at studying the books and they're good at taking multiple choice tests. And they think that you have to be trained like some of the individuals that are in power now. Like, oh, my gosh, you're bringing somebody in that's not trained enough to do that. My argument is, get somebody that's not trained in there to do it so

that they can upend things and apply wisdom and common sense instead of, you know, this aloof intellectual knowledge that is great in theory and horrific in application. So look, we know something's going to have to happen here soon. I don't know if it happens in the Trump administration, but I think it's going to have to anyway. I think there's a forcing function here. I think it's from this, Paul, which is that 220 years for the first $11 trillion in U.S. debt, four years for the last for $11 trillion, it's just going vertical, right? And it's only going to go faster and faster as the debt piles up.

The only thing the Fed can do to try and arrest that process is to lower interest rates, right? Which they could do, but then, you know, who's going to want to borrow, you know, lend money to the U.S. government from overseas? It just becomes, we're getting to the end of this story at this point in time. So we're going to have to do something. And by the way, I don't think we should just be binary live or die because, you know, this system broke, so now nothing works. I think the Fed should face competition.

I think we should issue our own currency. The Treasury should issue it. It's a Treasury note. And you can decide whether you want to hold Federal Reserve notes or Treasury notes. And for anybody who's watching, and if you're confused, the Federal Reserve is not a part of the Treasury. It's not a federal agency. It's like FedEx is not federal either. It's a private cartel, and it issues our currency currently. But what if it had competition? Paul, I'm a big believer in competition. and then if all of a sudden people could choose treasury bucks or fed bucks and they were

preferring treasury bucks so now the fed has to compete on some basis to get you to be interested in their product again well they would have to prove to me that they were being more careful stewards of that currency than the Treasury was. Or they'd have to offer me a lot higher rate of interest. But I would have a choice I could make at that point. You know? I think competition makes us all better. Well, one of the problems that we're going to run into, and this is why, and you know this, but I want to make sure that the audience knows, I'm actually heartbroken for the people that are deceived to the point that they have no clue what's coming. Okay. But Chris, we're going to have competition anyway, whether we do that or not. The BRICS, the Biden administration,

because of their weaponization of the dollar, has set in motion the BRICS, Brazil, Russia, China, South Africa, and all the other countries that have come along, and we know that they're introducing the unit and the BRICS pay. They're moving at that pace. Now, all of a sudden, they're not forced to recycle their surpluses back into treasuries, which has been a gravy train for the U.S. for so long. So we're getting ready to have competition one way or another. And what I hope is just like what Malay did when he got into office

and he just ripped the Band-Aid off, right? Now, I think our experience is going to be a lot different initially, but it's going to be much better for the average American, the average individual is going to participate in the growth that comes on the other side of this in our economy. So I'm ridiculously hopeful because I hope that Elon Musk, you know, I can't remember what, who was interviewing him when he was talking about all the fights that he got into as a child and how he had to fight. He was picked on a lot and he stood up wherever he grew. He had to fight

all the time. So I know he won't back down but i pray because you know here's the thing if you're going to get into a situation you're better off to choose the ground that that you choose the ground you're on instead of the ground be forced upon you that you don't know so we know what ground we're on right now so let's pick this fight let's get it over with. Let's rip this bandaid off. Let's go ahead and get the pain out of it to begin with so we can begin healing in that foundation as a nation, foundation as a nation going forward, and that our children, our young adults will have hope going forward and have something to strive for and a dream to achieve

for instead of just hoping that they can climb over and, you know, be employed by one of the monopolies that are out there that's going to suppress ideas. You know, that's the nature of a monopoly is to suppress ideas and keep that competition so they can maximize profitability. What we need is innovation and not destruction. What's the term I'm looking for? A breaking up of the system of these monopolies so that we can have a larger percentage of the population participating.

Anybody willing to work, have a shot at becoming a business and becoming successful. And those who don't can suffer the consequences. The American dream should be that you can suffer the consequences of your actions, both good and bad, right? If you choose not to try, then you'll have the consequences of choosing not to try. If you choose to try and you're successful, then you can reap the consequences of being diligent and prudent. Well, uh, here I have a free business idea for somebody, um, government worker retraining

centers, open them up right now. Um, cause this is, this is basically every one to two of these is 800,000. So about two and a half, that's a million extra workers. So that's one, two million extra workers in the federal government slapped on since 2020. Wow, two million. So we're up at an all-time high of, what's that now, 23 million, 23 and a half million people. And that's just government workers. Paul, I'll bet you anything. Half that number again. Contractors not officially counted. Right. But just let's widen this out over time. You know, do we do we really need this many millions of workers?

You know, is there any way we could sort of trim this back to earlier levels? Of course there is. Of course there is. I think last I heard, Paul, there were 145, let's call it 150 million total jobs in this country. Well, if 23 of them, 23 out of 150 are government workers, what's that, one out of every six? Ish? three out of 150 are government workers. What's that? One out of every six-ish? One out of every six workers works for the government, more or less.

So imagine that you live on a street, Paul. There's six families on the street. Five of y'all get up every day and go to work so that you can pay the salary of the six family on the street. That's the situation. Actually, you are under, so it's 0.66. So let's round it because you're going to round it up. That's one, yeah, one out of every seven workers is government. Wow. Same thing at the state level. You can just see, like, we were coasting along perfectly fine for many years in this little band, and then just somehow, magically, states needed a lot more workers, coming in and Malay style and saying, let's run this like a business, right? If you're running a business,

it should be this clear. You should be able to sit down with any particular employee and ask a question, which is, tell me how you add to the bottom line here. And they ought to have a reasonable understanding of how that happens, you know, what their role is in that. Yeah. You know, I don't think that we've rationalized a lot of, a lot of these jobs here in terms of what we get for them, you know? Well, my concern is, is it's all nepotistic at its core. It's I'm hiring family and I'm hiring friends or you do me a favor and I'm going to bring yours in because Because, I mean, these are – I got in trouble because I was on the grand jury after the crisis in 08, and the grand jury has the capability to subpoena

and examine all the local government agencies. There were problems with what was taking place in the tax office. And, you know, so we brought in under oath, and I had a list of questions I was going through, and I can't remember the numbers because this just came to mind, but basically for them to go physically see all the houses in the county like they stated under oath that they did, that they'd have to see a home every 15 minutes approximately.

It was just a ridiculous number. I have the math somewhere, but it was a ridiculous number. And our county is really wide and dispersed. You know, we're a rural area. So, I mean, you're going to have, it'd be hard to get to unless you're really organized. But the best part about it was in the time window that they had to do it, Chris, they would have to leave the office at 8 a.m. and show back up at 5 without a lunch. And I made the comment, I said, you can't tell me one

government worker is going to show up. I'm sure there are, guys. I'm sure there are, okay? There's the driven ones. But the average doesn't have the drive to show up 15 minutes before, hit the car, work all day long without a lunch, show up and get home a little bit later. I've just not experienced that. Very few people have. So the joke is out there, you know, I got in trouble for pointing that out because I don't know any government worker that would be that way, especially on a local level. Now that I know there's some out there, right? If you're one of those, but wherever you go, nobody, I don't know anybody who thinks that government employees are really working that hard. And I know I'm going to upset some people with saying that, but that's the reputation that has been earned by the government employees.

So it's not efficient. They need to be held to a standard that the business world would be. And there's still business world employees that aren't working efficiently either. But it's a problem that we business world would be. And there's still business world employees that aren't working efficiently either. But it's a problem that we all know is there. Well, Paul, I worked for a company for a period of time. They had a policy, the bottom 10% of the workforce was culled every year. Okay. Just happened, right? So you definitely didn't want to end up down there. And it was mostly performance-based stuff, you know, as a consulting company. So were you bringing in clients and, you know, doing all that?

So I get it. Created a fairly Darwinistic environment. So I'm thinking to myself, you know, what if the government held itself to that same standard and you have to have a Yelp review. So you are an environmental administrator for site planning or whatever your job is, right? And it turns out that the most important thing for you keeping your job is how much your clients,

the public, thinks of you and the kind of reviews you get. Just that incentive alone would change the whole dynamic to where they're going to have to say, wow, how can I be helpful to this person rather than how can I trip them up, you know, and, you know, fill a quota or look busy or whatever the thing is. I'm all about incentives. I think this would be great. We should, we should apply. I don't understand why public private, why government shouldn't

have the same incentives business people have. Serve the customer or go out of business. Well, they're here, they're here, here to serve the people. That's a great idea, Chris, as far as having some reviews. Could you imagine? Because being customer service at Social Security, all you got to do is just, I mean, you're not going to please all the people all the time. The publisher's clearinghouse study shows that 10% of people are going to be upset. But however, if you're doing a job, hey, thank you for calling. This is Paul at Social Security. How can I help you today? Oh, well, thank you for calling. This is Paul at Social Security. How can I help you today? Oh, well, thank you, Chris, for calling in.

It'd be a pleasure talking to you. Let me see. And they put the effort in instead of going, hello, this is Social Security. Hold on just a minute. I've got to finish my conversation. That's kind of the attitude because I've had to call Social Security with tons of clients. That's the attitude that's there now. I don't care.

I mean, there's the rare individual that we get every now and then, but that's a great idea to bring that incentive back to the point of serving the American people instead of us being a burden because we're asking them to serve us. Absolutely. You know, Paul, as I look at this. I really do think that. Remember, Elon Musk was the guy that walked into Twitter, fired 80 percent of the woke staff and nothing bad happened. Right. Like they were like, oh, you can't do that. This whole place will fall apart. Nothing bad happened. I don't think they had any downtime. And and now it's the most heavily trafficked news organization site, which is how I consider it, on the planet, right? Just crushing the competition.

It's more balanced than it used to be in terms of it used to be way more Democrat-leaning. Now it's kind of 50-50, kind of reflects the electorate now. I know that makes a lot of people unhappy on one side that was used to having their way of having their own echo chamber. But, you know, it just shows what's possible. So I actually think the theme for this next year is going to be really reimagining not only how big government should be, but what's it actually there to do? I think we just went on autopilot and autopilot is it just sort of metastasizes and grows and you know that's just normal bureaucratic behavior so it'll be interesting to see what happens if we can get some some rationalization in this and and yeah it should run like a business to some extent it

really should it should i want safe roads i want safe bridges i want I want a good police force with a justice system that is true and fair. If somebody steals from me, I want the justice system and the government to deal with it, to protect our life, property, and our pursuit of happiness. Outside of that, we don't need to be sending funds overseas to influence our ideas on other countries. We don't need to be empire building. We need to walk quietly, but carry a big stick. And if we have to step into something, we do it because there are no other options instead of, you know, exercising power just for the sake of exercising power. That's what brings about tons of corruption. I like that list. And by the way, if people sort of disagree and think, you know,

more regulations are actually the answer to a better future, check out Europe. They got way more regulations than we do. Of all the things that have happened of late, artificial intelligence, Apple phones, Microsoft, whatever you think of in your life, like literally think of a product in your life, almost universally it did not originate in europe you know why because they've regulated themselves to death it's just they have no innovation there's just no dynamism around that at this point in time it's really important if. If you want, if you, if you want that life we have, you need to have freedom. That's freedom, freedom for people to know that they, they can have ideas and pursue them without them being stolen by somebody or the government or

hindered or, or whatever, you know? And I was, I was hearing, um, the case of, uh, Pavel, this guy who, who invented telegram. It's like one of the biggest messaging apps in the world. And he wanted to come over to the U.S. And he's like, this is it. So he goes to San Francisco. He's literally dodging being mugged and feces on the street. So that wasn't it. Tried another city.

The FBI is knocking, saying you have to work with us or you can't do business here. And he went to Dubai and he said, oh, it's so good over here. The government helps you. They're very helpful. They'll help you find a place. They'll help you find workers. If it's not working out, they'll get rid of them. It's just what can we do to help you?

Because the government has this point of view in Dubai, in the United Arab Emirates, that they want people to come to them. And so that's what we've got to get get back. We got to get away from this administrative state. I think there could be a great rebirth. I'm a little worried that we're entering this with very, very expensive stock valuations and a huge amount of debt. It's not clear what the path is, but like you, I'm not afraid of hard work and I'm not afraid of things taking a little bump or two before we can get back on the right path. In like you, I'm not afraid of hard work and I'm not afraid of things taking a little, a little bump or two before we can get back on the right path. In fact, it may be necessary.

We do, Chris. It's better to rip the bandaid off now so the healing can begin. And yes, it's going to be challenging, but for those who, who are eyes wide open, they're, they're, they're working with a strategy and not their emotions and can hang in there and are prudent. You know, there are times where it makes sense. I might be a little bit more cautious right now to see how this unfolds. And then as I see how things start to unfold, then I can get a lot more aggressive. You know, we drive that way. You know, you start seeing lights go off or a high risk area or where there's light. So, so the, the future I believe can be incredibly bright. If we'll love the truth, we'll open up the curtains and bring to light everything that's behind the

scenes. And then we get that accountability for the government to the American people. And so I am optimistic. I'm excited about the potential for the future. And, yes, it's going to be challenging. But for those who are prudent and looking to foresee danger, can protect their families, their communities, and then help make sure to use that position to influence this country for good for everybody. Not just those people that disagree with us or agree with us, but good for everybody.

Protection of freedom of speech. And one thing about X I love is those community notes. Some of those are hilarious, by the way. But, you know, get that. Yeah, sometimes they work. And bring back justice again. Cause Chris, when you talk about Dubai, so I had a friend of mine, I got to share the story real quick. So please entertain me. Friend of mine that I graduated high school with, she's done

really good lived in, um, uh, uh, Sydney, Australia worked at the U S embassy that was over there, married a gentleman that was in the banking business and ended up in Dubai for a period of time. So when she gets there, she's going to interview for a new job in the cab, driving to that biggest building that's over there. I can't remember the name of it. I've never learned the name of it, but that big. Okay. So she's way up there, like on the 60th, wherever it is. So she gets up there and she tells me, I walk into the receptionist and I panic. I left my purse in the car. And I'm scared for her, right?

Because it's Middle East. I'm like, how's this gonna go for you? And she said, Paul, I was terrified. I just knew that I wouldn't see my purse again. All my personal stuff in there. And she said, I told the receptionist. The receptionist said, oh, don't worry. He'll bring it to you.

And she's like, well, he doesn't know where I am. She's like, he'll come in, talk to security, and he'll find out where it is. Because if he steals your purse, he's immediately deported back to the country that he came from, and they don't want to go back. And she said that was the safest place that she's ever lived. Her son, Samir, could walk down any street in the city because crime was so quickly and justly punished, some would consider it severe justice, that nobody wanted to commit those crimes because they wanted to stay in that country because it was a good place for them to live. And if they broke the law, they were immediately sent back to somewhere that's not so good to be. So it works for them, and it could, you know,

not everything that they're doing over there do we need, but we need to bring justice back into the system and wisdom in there and consequences for breaking the law across the board. Very well said. Interesting story. I like hearing stories about that. I think I've seen some things where in certain, like I saw a guy in Singapore and he said, watch this, and he just left his laptop in a coffee shop.

And it's a sped up thing if I'm just walking around town for a couple hours, he comes back to the coffee shop, there it is, right? Just sitting there waiting for him, right? It's like that in some places. And those places tend to be very prosperous. Singapore, very prosperous. Singapore, very prosperous, Dubai, very prosperous. So I think there's a lesson for us in all of this too.

Yeah. Yeah. That doesn't happen in Atlanta. I left my iPad in the back seat in front of me. And, um, um, and just in case, by the time I was gone 10 minutes or well, I was, I had gotten to pick up my luggage, so I couldn't go back through security, called, and, of course, it disappeared, and I erased it immediately. But, you know, knew the seat that I was in and reported it within 15, 20 minutes, and it's gone. Gone.

That's not where we are now. And it's gone. And it's gone. And I knew it. I just erased it immediately. Interesting. All right. Well, that's all the time we have for today, Paul.

Thank you so much for your time today. For everybody listening, if you want to talk with Paul and his amazing team, get a portfolio review. Think about what your strategies are. Just it's a wonderful process. Go to peakfinancialinvesting.com. Fill out the form. Somebody will be in touch with you within about 48 business hours. And it's a wonderful process.

People have learned a lot and have given me incredible feedback, Paul, about just going through the process of seeing what the scenarios are. As you say there, invest your plan, not your emotions. Get a plan. I think everybody needs to have a plan today. So thank you for helping people plan. It's my honor. And for those of you that are out there, I have to run an entire plan for you before I can even give a recommendation. So, you know, that whole initial consultation is complimentary. There's

no charge to you and you get some benefit out of that. So, you know, my number one objective is whether it's appropriate for us to work together or not, that's okay. But if I can impact your life and give you better information so that you're on a wiser path, it was well worth my time, you know, because if we do the right things, everything else will take care of itself. So I enjoy it. It's fun. It's amazing to me on how many people are, you know, I do this all day long, Chris. So it's like, I'm not shocked by the data and people are just flabbergasted by, you know, minor tweaks and how big of a difference they can make and make minor adjustments so that they know they're on a prudent path and they're doing everything that they can control to be successful. Well, excellent. Thanks for that. Again, peakfinancialinvesting.com, and we can get the process started for you. Until next time, thanks for listening to Paul. Hey, have a great weekend. You as well, Chris.