Peak Prosperity - Stocks Say ‘Everything Is Awesome!’ While Bonds Sneak Out the Back Door
Episode Date: May 16, 2025Sound money is the cornerstone of economic prosperity. We don’t have sound money, and the Fed has operated like a monetary vandal authoring the widest wealth gap in US history and the worst generati...onal inequalities. But still we have to make our investment decisions…Click Here for Peak Financial Investing
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But that yen carry trade blows up that reverses liquidity in the market and if there's several other things
Blow up as well that just sets off a chain of events that could lead to a crash at some point in the future
The following is the audio version of a video released at peak prosperity calm a chain of events that could lead to a crash at some point in the future.
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 episode of Finance U where we discuss all
things financial in a way that hopefully you can understand them and our view is that these
are really really extraordinary times and so we're going to need the best information
we can to keep current and try and figure out where the puck is
Going and by the way
That puck might just reappear somewhere random in the arena
Maybe even in the parking lot who knows to help us understand where that puck it may mean it's not even a puck
It's a bowl of petunias. We don't know
Paul kiker kiker wealth management eight ball good to see Great intro, Chris. That was phenomenal. I love that.
Well.
And you're right. These are interesting times. I mean, I really believe that in the future,
there's going to be a lot of time spent on studying emotions, foolishness, and just peak stupidity
within the U.S. in many areas and peak emotional pressure within the US in many areas
and peak emotional pressure within the markets on investors.
I totally agree.
And by the way, I've been a huge critic of the Fed
over the years because I don't see them
as careful stewards of anything.
I see them as serial bubble blowers.
And my model for that has been they started,
like all things.
They started innocently enough with a little bubble, and then they just got used to it.
Now they've been larger and larger and larger.
And I think what we've just seen since the beginning of this year where we had Liberation
Day tantrum, and then this complete recovery, which by the way, is for the record books,
Paul, this is not just sort of like an interesting advance. This is one of the most powerful six week advances in the US
stock indices since ever. And, and because of that, I look at that and it doesn't feel
organic, it doesn't look organic, there's nothing that could make the story change that
much, you know, honestly, let's talk about what has happened. People, I guess, were relieved
is the story we're supposed to believe, that we don't
have 145 percent tariffs on China.
Instead, we have 30 percent tariffs, where before we used to have 10 percent tariffs.
So if you're keeping score at home, we now have an input cost structure that's higher
than it just was.
All things being equal, Paul, that means that fewer things are gonna get sold,
which is lower economic activity.
Because higher prices lead to less demand,
unless all of my economics was wrong.
So I don't see any way to spin this besides saying,
well, things are gonna get a little bit more expensive
and things will go slightly slower.
So either corporations make less on the profit side
on the front end because
they don't they eat the cost increases or they raise it and they sell fewer things.
One of those two things happens or so or both. I just I didn't see a way to spin that into
a massive explosion higher. But everybody's been trained, habituated. The Fed's going
to save us. They'll print more stocks go up into the right always by the dip
That is the ruling mantra and it was right one more time
It has been right so far and and who knows maybe this is it and maybe maybe this is navigated
Perfectly from this point forward and Trump just has that golden horseshoe up his rear end
graphics, sorry, Renee's gonna get on to me for that but
up his rear end. Graphics, sorry, Rene's going to get on to me for that. But the reality is,
it can be navigated perfectly, but there are major changes that have been taking place
around the globe. And you've got real estate that's essentially frozen, prices are holding up right now, interest rates are still continuing to climb and work their way higher. Does that
tell us that we're worried about inflation? And then the big question is,
is the hard data has held up really well
in comparison to sentiment, okay?
So sentiment, your soft data has been negative
and still relatively negative.
Hard data is held up, but we know some of that,
at least we think some of that is attributed
to the front running of the tariffs.
So my concern is, is if we don't navigate this perfectly and our leaders are making
no mistakes whatsoever, and to make no mistakes whatsoever, you have to assume that they're
going to be able to counterbalance those forces out there on the other political party that
don't seem to want to be working together as a team.
They are desiring failure of this administration. So they've got
other challenges that they're facing. What's going to happen
if we do have a slowdown and we had we actually have a
recession in the fall, who knows whether we're going to or not.
But with that front running, that's purchases that's pulled
demand forward, which could further exacerbate a slowdown if
we do have a slowdown later in the year. So this is a dangerous time for investors.
And I haven't seen emotions this high
with the individuals that tend to get really emotional
at the bottom, that you have to talk them into staying
and then get really emotional.
You're having to talk them right now.
Hey, just be patient.
You're playing the long game. Don't let this fear of having to talk to them right now, hey, just be patient, you're playing the long game.
Don't let this fear of missing out suck you in right now,
because if it's not navigated perfectly,
at a minimum, we should at least have a pullback.
You know, long-term, a healthy rally can retest those lows in April.
Who knows whether we will or not.
But the reality is, you know, the risk is you get sucked in right now, and then we
do end up not navigating this perfectly, and we retest those lows or break those lows, and then
that individual is frozen, not knowing what to do. So that's why it's so important to have a strategy
to keep your emotions in check. Invest your plan, not your emotions. I've heard that somewhere.
Yes.
Actually, it's right over your head.
I couldn't remember if I changed my sign
behind me or not.
You didn't.
But yeah, that's important right now
is don't let your emotions make decisions for you.
And if your emotions are taken over,
hey, take 10 days, just take a deep breath.
Missed opportunity is not what's gonna wipe somebody out, but an emotional mistake
that allows somebody to get too aggressive and then it not pan out the way they expect
it to, or maybe the Fed can't bail it out.
Does it come to the table like they have in the past?
That can decimate someone's retirement future or their retirement goals.
Well, Paul, last time we did talk about there were some SOMA
purchases by the Fed.
I had to wait, though, because we recorded that on Wednesday.
It's not until Thursday that the Fed updates once a week.
They update their balance sheet.
There's nothing.
I mean, the balance sheet only expanded by about a billion
over that past week.
So that's well within noise. So I don't
think they've started printing anything, but we still don't have access to whatever the Fed does
overseas that's hidden from everybody. So, so we don't know. But you know, this whole idea, so
stocks are for show bonds are for dough. You've heard me say it before bonds. I want to get to
those in a minute. Those are saying, telling us a different story potentially than what we're hearing from stocks, commodities, telling
an entirely different story from the, Hey, you know, huge growth is about to arrive here.
Somebody has the story wrong. So I want to parse that through with you. But let's, let's
start here though, with this idea that the Trump administration is trying something really
magnificent, right? Something really big. They're going to reset the global order.
We talked about that. The so-called Mar-a-Lago accords. Here's Treasury Secretary,
Scott Bissett.
He just came out and he said, there's a possibility we can do a big,
beautiful rebalancing.
Sounds like he's picking up some Trumpisms there in his speech patterns.
And he says, quote,
Geneva established a framework towards a mutually beneficial agreement between
the US and China.
Yay.
US can shift more to more production, and China can shift to more consumption.
The dream scenario is both countries can do this together.
So that's the story.
We put these extra tariffs on, and now there's greater impetus to do more producing in the
United States.
That's the story.
However, I want to turn now to a friend of mine, actually, David Stockman, former, he
worked in the Office of Management and Budget under Reagan, and he said, quote, sorry, Scott,
that silly hedge fund talk, the huge US trade imbalance with China is because our fully
loaded manufacturing wage is about 40 bucks an hour and China's is 10 bucks an hour.
And how did that happen?
Well, since the late 1980s, the Fed has been inflating the bejesus out of US prices, wages
and costs, making American workers and companies increasingly uncompetitive on global markets.
Therefore, closing the huge US trade deficit doesn't require re-engineering two massive economies
with $50 trillion of combined GDP by ignorant politicians like you and the Donald. Just
shut down the Fed's printing presses and the free market. We'll take care of the rest.
Well, that is very well through the gauntlet down on that one. What do you think? Very
well said. And I like his big picture
thinking in the reality. So there's the ideal of where we would want to go. I mean, that
would be great if China would shift more towards consumption. But then you've got these major
corporations that that's going to crush their profits and they're not going to want to lose
their profits. And that rebalancing, if there is a global rebalancing,
at best we can hope that it pulls the rest of the world
up to the US.
Great for them, okay for us.
But what happens if we have to come down some
and they have to come up some,
that reduces our standard of living in the US.
There's no easy way to navigate this.
No, there really isn't.
I mean, I admire what they're trying to do.
It just feels a little cart before the horse. You know, don't cut off your supplies of cheap Chinese goods first
and then hope you get the factories. Like, make the conditions easier to get factories.
And he's absolutely, David's right. The reason that it's so expensive to live here right
now is because the Federal Reserve keeps printing money.
Yes.
I know their balance sheet's been reducing lately, but it's still, you know, well over
$6.5 trillion.
It's a very, very large number.
And they just, and who even knows what they're doing off the books?
We don't know.
I wish we did.
Audit would cure that up.
Why not?
If you're not doing anything funny, just audit it.
Hey, by the way
Where's my audit of Fort Knox?
Right that that just disappeared from the mainstream media. Did it not?
Just gone. I'm kind of still I would like a like the audit
We'll talk about gold and silver in a minute
But you know they have Paul right now
There's a number of cities that talk about what their affordability index is for. Just even for a single wage earner in some cities, the cutoff line
is about $100,000 a year to not be getting in trouble and somewhat, you know, to not spend
more than 30% on your, you know, housing and X percent on the rest of it and all that.
Well, that's $50 an hour if you work a 2,000 hour year.
Right?
It is.
So we say, you know, 40 maybe,
that might work for you in Alabama,
but it doesn't work for you in San Francisco.
You might need something a lot higher than that.
So I just don't, I don't understand
how we're gonna bring all this manufacturing home
when we have 40, $50 input costs, you know?
Right.
And if you're a family of four, you might need $50, $60 an hour to pull it off, right?
Yes.
Yes.
And you're still not going to be able to save for your future.
So you're going to end up being, you know, chasing in this, this, this feeding frenzy.
The Fed has turned investors into like piranhas when some meat hits. They've
trained them that, hey, here's a sell-off. And if you stood back and were patient over the years,
you've missed opportunity because they've gone further and further and further across those
boundaries that put us in the same situation that caused the housing crisis in 2008. Maybe they think that AI is gonna help them navigate
this perfectly going forward, but it's a complex system.
And if one thing goes wrong and one plate drops,
it can drop all of the other plates
and we have a forced reset.
Cause if we don't choose to deal with this now
and change the decision making process,
my concern is they're telling us that they want
to change things, but they continue the same decisions and actions that put us in the situation
where we are right now, where it's eviscerated the middle class, and further put pressure and
more debt and more pressure on the shoulders of our younger children that are coming out
trying to start.
If you don't come from a wealthy family, you've got a lot more hurdles to come over to try
to get a start because you're having to come out with student debt, you're having to buy
houses that are really unaffordable.
You just don't have any other option because if you don't buy and they continue to print
money and houses go up for 10 years without a correction, you're further and further behind.
So they've set up an environment where the American dream has turned into a treadmill
that if you stumble and make a mistake, you're in big trouble.
You're not going to be able to recover.
And the only way to fix that is to allow free markets to come along, but that's going to
be ridiculously painful for baby boomers and especially the passive investors because that passivity is
going to cause them to be hurt.
And David's getting right to the heart of something I believe in fully, which is that
sound money is kind of a necessary prerequisite for getting to have free markets.
I don't know how you can, so people like, Oh, Chris, do you
like the Chinese communist model or the American capitalist
model? I'm like, well, China doesn't really have communism
and we don't have capitalism, right?
They're not, they're not, they don't even represent the, the
reality of what we should have.
Right. So at a minimum, you can't have capitalism,. What's the root of capitalism capital? What's capital?
It's stored wealth. That's what capital represents
How can you have stored wealth when there is a group of people who can print it out of thin air and hand it out
To their buddies in whatever quantities they want whenever they choose to do it without oversight and without audit
You can't so there's no if you don't have capital as a concept. You can't. So if there's no, if you don't
have capital as a concept, how can you have capitalism? Right? It just doesn't make any
sense. So if we had sound money, a lot of people would hate it. Right. And I think we
could do away with at least probably 80% of our financialization process. Those are just
people who make money with money. Right? We don't need them. No, don't need them
No, and we would get back to creation and innovation and better products and and more options of products
If we went back to sound money, you know one good exercise for the listeners out there if you're trying to help educate your family about
These complicated subjects because it's hard for people to understand the impact of printed money and what the Fed can do
and those that are close to the Fed.
So this is a good exercise.
Go play Monopoly with your family.
If there's about five of, you know, family and friends,
there's about five of you sitting there,
take the money from four other Monopoly games
and have one person that's called the Fed, let them play.
And then the next person that's close to them,
the politicians and senators,
and when somebody gets in trouble,
just pass that money around
and see how trickle economics works.
It doesn't work.
They get all the cards and all the properties
in the process, and that's exactly where we're headed
at this end game.
It doesn't trickle down to everybody associated there.
They accumulate it for themselves
and we get these monopolies and oligarchies is what we end up with.
Yep. Well said. I'm Paul. We're going to take a quick break and we'll be right back.
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All right, so we were just talking about monopoly, monopoly money, all of that. You know, I remember and urging you to act now.
All right, so we were just talking about monopoly, monopoly money, all of that.
You know, I remember there was this,
Reagan had a lot of quips.
At the time when I was a young man,
I didn't appreciate him.
Now I'm a little older, more conservative,
and I really like how he rolled.
And he had that quip about how,
said there was this girl came up to him and said,
and she had two very liberal parents,
and he said, what do you wanna be when you grow up?
And she said, oh, I wanna be president.
And he goes, oh, what would you do if you were president?
She said, I'd make sure all the homeless had homes,
and I'd make sure they had all the food they needed.
He goes, oh, that's great,
but you don't have to wait to be president, little girl.
Come to my house, mow my lawn, straighten up my house,
I'll give you 50 bucks,
and I can take you down to the store,
and there's a homeless guy there,
you can give him the 50 bucks. And he said, she said, well, why doesn't he
just come to your house and do that stuff? And he said, welcome to the Republican Party.
That's great. And there's so much truth and wisdom in that too. It's reality versus theory,
right? Yeah, that's good. So with that, you know, the Fed fundamentally represents to me, unfortunately,
I call them the reverse Robin Hood organization, because Robin Hood stole from the rich to
give to the poor. Now reverse Robin Hood would do the opposite of that. They steal from everybody,
and they give it to the few. And that's what they've done by creating inflation, which
steals from everybody. Like if you have $100 in a bank account, 4% inflation, oops, now you have $96 in your
bank account.
Where'd the $4 go?
Well, it didn't just disappear.
It was stolen, right?
And then when you look at the wealth gap charts, you see the wealth gaps just like going crazy.
So I was just, I was noticing some people were noticing this whole thing in South Africa
and this huge wealth disparity and talking about how terrible it is.
And they noted that 7% of the country has 70% of the wealth.
Sounds, it's bad.
That's not good to have a wealth gap like that.
But let me be clear.
According to the Federal Reserve in the United States, 10% of the families own 67% of the
wealth.
So we're not that far off and you'd have to ask like,
did that just happen because these people are that much more hardworking than everybody else?
The answer is no. It's what you described, right? It's that game of monopoly where that,
the wealth gap we have is because the Fed handed that money out to rich people. It gave it to them
so they could buy more things with it. And here we are. And here we are. And the sad part about
that is those those same individuals who are so convinced that they're just that much smarter
than the average individual. Now they're exercising that to try to tell the average individual how they need to live their lives.
And they look down upon those individuals who weren't born with the same opportunities that they are.
And they don't realize the fact that, yeah, you can still, you know, America still has more opportunity than other parts of the world.
That's why some of the best and brightest want to be here. But the roadblocks for those individuals that don't have resources or access to that are
much more devastating if they make a mistake.
You know, there was a period of time if this was a more equal playing field and a sound,
honest money, that's what the Bible would call right scales.
And I can't remember the exact phrase, but it's something along,
the Lord detests deceptive scales.
And guys, I'm butchering that.
I'm just trying to pull up the theme that's behind it, because
they are deceptive scales, and they deceive those that are
benefiting from them into believing that they're more
intelligent than they are, which is devastating for the large majority of those because at some point, we're going
to reach the point of diminishing returns where the same things don't work and that
system is going to collapse in on itself.
And those people who have been struggling to get by and having to pick themselves up,
you know, or have emotional resiliency from those minor mistakes that turn into major setbacks
are going to thrive on the other side of that
because they're emotionally stronger than those
who have this false pride that their money
is gonna shelter them from anything
that's gonna happen in the future.
Right, what's the old saying?
None are so poor as those who only have money.
Right? You know what's going to get you through?
I've never heard that. Your wits, your skills, yeah, your friendships, your health, these are all actually more important to have in a turning point.
So, you know, I do believe, Paul, in gold and silver as a convenient way to sort of like store my wealth. Silver has been very frustrating for me though, because it just, for whatever reason, it seems
to start advancing and then it gets these beat downs, which I've long, I see manipulation
when I see that.
Manipulation to me is when I can clearly detect that somebody is setting prices in a market
and they're not, it's not a legitimate price setting function, right?
So they can legitimately set prices too high or too low, but for silver, it's always a
slam.
It's always, it's never like a, wow, it accidentally went up a couple bucks.
It just gets beaten out of nowhere.
And so here, TF Metals, my good friend, Craig Hemke is just noticing that in silver here, you
see these big giant rundowns, right?
And it just happens, this happened at three in the morning, but very typically it happens
at 645 central time, right?
It just bonk, gets bonked.
What's so bad about 645 central time?
I don't know, right?
And here it is today.
This is a chart from today, which is Wednesday, the 14th of May.
And you can see here, let me pull this up a tiny bit so we can see the scale at the
bottom.
So right when the US markets open at eight o'clock, it's just this waterfall.
It's just massive selling.
Oh, that's the new price.
It's just mad.
It's like magic, Paul.
It was magic.
It went from 31, just lost a buck, right?
And that's the new magic price. And
Make Gold Great again is noticing, repeating what Iden said here, said that 60 million
ounces of global annual silver supply was dumped in one hour. And that's what happens.
Maybe Americans are going to take a big loss in this eventually. So more silver dumped than the U.S. mint has minted in the last three years is all dumped
in a single hour.
So that's not price discovery.
That's not honest buyers and sellers coming together.
That's somebody coming in and water falling the price of silver and manipulating it.
And the thing that's frustrating to me about that, Paul, is completely obvious that that's
not legitimate price discovery. That isn't some trader getting out of a position because if they are getting out of position that inelegantly they should not be a trader and they
violated their fiduciary responsibility
And that's what they always trot out there like oh looks like somebody got liquidated like well
Then I should be reading about somebody losing their job, right and that never happened
So that's price into manipulation the CF, the SEC never do anything about it.
That's a normal functioning market as far as they're concerned.
Well, you know, and the reason that I believe I'm trying to give it the benefit of
the doubt, but when you look at the liquidations that take place and in when
there is no demand, right, there's
just not much out there, there's no other way to justify what's taking place
outside of they don't care about the price that they're getting for that
silver, they care about what they're doing overall to the price of the
silver. Now, the reason they're able to get away with that is because
passive investing does not allocate a portion
to that indexing doesn't allocate a portion there.
So it's a market that's easily controlled.
And especially if you have someone that is above
the rule of law or examination, you know,
every now and then what was it several years back,
there were a couple of JP Morgan traders
that were convicted of price manipulation.
You know, they'll try someone out there every now and then, there were a couple of JP Morgan traders that were convicted of price manipulation.
They'll try someone out there every now and then, but they still have not solved the issue.
And especially the historical link between silver and gold
and silver has been suppressed.
And we know that it's needed in industrial metals
and other areas.
I mean, the story is there, but what's it done?
It frustrates investors to the point that they put their assets elsewhere
because they look here, instant gratification versus this, and they give up. And at some point,
those that have been patient and look at the fundamentals will be rewarded when they can't
control that market anymore. But they've controlled it a whole lot longer than I've ever anticipated
they would. Sooner or later, you you know but that's been a refrain for a
long time the point of this is to keep people out of those commodities they
don't want people in there they're very excited that Nvidia not to either before
or against any particular shares here but it recaptured the three trillion
dollar valuation by going up a couple hundred billion in a single day I'm
pointing that in context because it's thought
that perhaps, possibly a billion ounces of silver
exists above ground right now that you could possibly buy.
Well, at $31 an ounce, that's 31 billion.
Shaky pinky finger up to the corner of the mouth.
31 billion, that's like a fraction of what NVIDIA alone went up yesterday because Trump went to Saudi
Arabia and maybe we'll sell some NVIDIA H100s in Saudi Arabia.
Whatever the story is, it's just, it's absolutely the case that our attention is always sort
of kept focused on certain areas.
Those are approved areas to go up very excitedly.
But I'm waiting for somebody to write an article from mainstream media about that.
Those waterfalls should not be happening.
It can't be true that all of a sudden in a freely traded market that a vital commodity
is suddenly worth three and a half, four percent less in an hour.
Right.
Yeah.
And look, I would be sued if a client called me and had a,
had a large position in something and said, Hey, I need you to sell this for me.
I'm like, okay, I'm going to sell it in the lowest liquidity where the process,
where you're going to get the worst process you could possibly get.
And then, you know, cause it's so foolish. There's the,
I just don't understand it. And there's no way that if that is a trader, that they're going to continue their job,
continue to have their job.
And if they didn't lose their job, the manager is going to be fired because there's always
somebody who's going to account for those funds and being responsible in those trades
to liquidate large portions like that.
And you're right.
We would hear of the bankruptcies, it would be on the headlines
and investors would be impacted if somebody was with that large a money, that large amounts
of dollars would impact hundreds, thousands of people unless it's these billionaires and
they don't become billionaires by making stupid decisions like that.
And the Federal Reserve at all, the whole system, Washington,
D.C., they don't like gold and silver because those represent honest money, potentially.
And those are anathema to the overall way of functioning. So, but somebody again has this
story wrong because we have these exceedingly strong moves and equities up. At the same time,
oil's gone nowhere, copper's wobbled down, gold and silver,
commodities in general are taking it here.
So one of these two things isn't quite right, right?
Because normally commodities go up
because we're about to have this big economic resurgence
and so that makes sense that stocks
would go up at the same time, right?
It used to be called Dr. Copper
because you could just follow copper
and it would tell you what was happening in the economy. It would diagnose the economy. That's Dr. Copper because you could just follow copper and it would tell you what was happening in the economy.
It would diagnose the economy as Dr. Copper because if the economy was picking up, the
copper prices would reflect that pretty accurately and pretty early.
I used to follow Dr. Copper.
He ain't a doctor anymore.
Something's broken in that mechanism.
So generally speaking, Paul, I haven't found commodities to be useful bellwethers
lately of much.
They have not been. The powers that be have so distorted the signals that the investors
can use. They've basically created an environment where from a narcissistic standpoint, you
need to pay attention to what I say is going to happen more than what's actually happened, because they're distorting everything. And that's not an environment.
It's a terrible evil that we don't have honest and sound money. It's an even more terrible evil
that we're in a situation to where, of course, passive investings work, because it's like,
hey, you got to trust me.
I'm your savior.
You can't do this on your own.
You have to be passive and put your faith in me.
And no man is worth putting 100% of our faith in.
Well, speaking of like, is the economy going up or down?
And we'll talk about bonds soon because I think rates are also a discordant note in
this story.
But before we get there, Kobe SE letter noting the labor market continues to weaken
under the surface.
So the number of permanent job losses jumped by 105,000 in April to 1.92 million, so highest
since October of 2021.
So here you can see permanent job losses going up.
And it's not—usually they just sort of— they wobble down until you get to a recession,
then they spike, little after spike
after that recession in 2000, they come down,
started to come up a little bit,
that's the 2008, nine recession there,
came all the way down, COVID of course,
its own little beast.
But this is a very unusual period to see, you know,
permanent job losses climbing like that.
Not totally distressed areas, these are distressed areas,
three, four, five, six, seven million,
but definitely not a strong story, I would say.
No, not at all.
And when you add that with credit card,
serious credit card delinquencies are hitting higher levels,
the highest we've seen since 2011.
It just doesn't justify when you're looking at that data, because the risk is increasing,
but yet you've got these sheer panic purchases and feeding frenzy of equities and this huge
fear of missing out, which who knows what's going to unfold, but that's what happens at
the start of bear markets you get this massive volatility
some of your largest
Percentage gains and your largest percentage losses happen during bear markets not during bull markets
Some of the biggest returns come towards the end of those bull markets because that's when the fear of missing out takes over
discipline is thrown out the window and
emotions rule the day.
And you know, if we live our life making emotional decisions, we don't have good outcomes.
We don't produce good fruit from that.
We have to be disciplined.
We have to think about where we're going and we have to follow some type of strategy to
help us make consistent decisions over the long term.
Well, can we talk about the elephant in the room then,
which is what might be different?
Obviously, those emotions are greed and fear, FOMO,
and all that.
They've been with us since time immemorial,
and they've always been a part of trading.
And I started, I cut my teeth on reading technical charts,
because those are supposed to sort
of capture the totality of how
investors were experiencing things.
And you could chart the FOMO moments.
Humans don't make a lot of decisions anymore,
except, obviously, at your level,
people will call you and make decisions.
But the markets themselves, most of the signal in a market
right now is not individuals deciding to do something.
It's computers.
Yes.
And those computers now with AI, don't you, isn't it possible that AI can just clean our
clocks?
Like I don't know how I could trade against an AI algorithm.
Its speed and precision and its ability to fool me and play on my emotions are going
to be like literal light years out of, it's a very asymmetric environment.
I don't think I can trade anymore against these machines.
No, no.
And one of the things that I had talked
to the investment committee about several years ago
when I realized the power of computing
and the trading algorithms, I said,
you know, if I was a major hedge fund,
you know what I would do?
Is I would go through all the technical charts.
I'd take your inverse head and shoulders pattern,
your head and shoulders pattern, your head and shoulders pattern,
your trend line breaks, your wedges.
You know, there's thousand pages
of different psychological patterns represented in books.
And you know what I would do?
I would put every bear trap that I could
and I would force stops and then I would go long.
And I would frustrate people because computers can do that.
And the other problem with the computers that concerns me is their design.
They're not sentient at this point.
So they're designed basically with our own human weaknesses in there
to take the most recent paths and project it in the future.
There's not a whole lot of really good data about some of these longer term cycles.
So even in those algorithms, they may trade fast may trade fast, but they're not. They don't seem to have the
ability to look six months out. Like they used to. Like the
market used to predict a long time ago, it's a shorter and
shorter timeframe, and more speculation than it is
anything. But you're right. I mean, there's no way if we were
all trading against an AI interface, it would mop up all
of the assets from everyone because it knows how to play our emotions.
It knows how to bow our strategies up.
And theoretically, if you've got a Fed behind it and enough money, you can take enough losses
in the interim period to set up investors to puk all their assets to you?
That's a concern I have. You know, increasing the, you know, the headlines
like, oh look what the markets have done in the last six weeks. I'm like, I don't
know what I'm looking at anymore potentially. Just because I've been, I've,
so we're all waiting over here on my side for Grok 3.5 to come out, which
has been pre-sold to us, is, this thing is capable of coming up with information or a response that doesn't exist elsewhere on
the net.
Like, it's generating its own responses now.
We don't know what that means.
It could be dog meat, you know, dog poo for a while.
But if this thing has suddenly got the creativity of a three-year-old, eventually they have
the creativity of a seven-year-old and then an adult, right?
That's just that that's the direction of things so I'm not really clear. What kind of a world we're in with
95% plus of all trading happens because of computers trading with other computers. I don't
It's it's like you and I are down here with slingshots Paul and we're watching a dogfight between an you know
Su 35 and a f16, you know
Paul and we're watching a dogfight between an SU35 and a F16, you know, or an F35 or whatever.
I don't know if those are good, but whatever they are.
Like it's like, ah, I don't know anymore.
I just don't know.
Now, it's certainly a challenging environment.
And this is probably one of the hardest environments that any investor is going to have to face.
And think about it, the larger majority of individuals,
so 2008 was the last major real bear market we had. Now we had a technical bear market in 2020,
a technical bear market here just in the past month, but that's not a real bear market. That's
a technicality we're down 20%. It was over in a matter of time. 2000, 2003, 2008.
Well, take an average 60 year old right now.
That was 16 years ago.
So they were 44, right?
They didn't accumulate a large amount of wealth.
They're focused on raising kids and generating their career
or trying to maximize their career ability.
They had a foundation of assets
that they have accumulated a large amount now.
But if that environment changes, it's going to be ridiculously impactful for those individuals
that if it's not different this time and we face a real bear market and they're letting their
emotions, you know, throw wisdom and prudence out the window and piling into this market right now
because maybe, hey, maybe if I make an extra percentage,
I can retire two years earlier instead of four years out.
That's speculation, and that's a dangerous thing to do
in this environment right now.
Well, it is.
So, stocks bonds real estate, we got the big three.
We know real estate has gotten a little weak.
Texas we've talked about, before Florida we've talked about,
and we had a hint at it, but now it's come in.
Washington, D.C., again, from the Kobe AC letter here, you know, surge and record, record
surge in homes for sale.
So that makes sense, I guess.
A lot of people moving out from Washington, D.C., doge, dodge, cut, you know, doge cuts
and all that.
But it's a smallish market overall.
But generally speaking, you know, I'm seeing general sort of like a stall pattern in almost all
markets I'm looking at right now, and some are in decline, which was Texas, Florida,
also D.C.
So real estate, a little iffy.
Jobs a little iffy. So they're not just saying to the moon, you know,
put your shades on, the future's so bright,
I don't know what to do with it.
They can be lagging indicators,
but the other big part is, this is astonishing to me.
This is United Health Group, whose CEO, Brian Thompson,
was the one who was shot by that Luigi guy.
But even this is, it was hanging out
at around the 600 level here, just earlier in May, but even this is, it was hanging out at around the 600 level here just
earlier in May, sorry, in April, towards middle of April, and then boom, big collapse, big
collapse.
And this is right where Trump said, oh yeah, hey, we're also going to cut pharmaceutical
prices 30 to 80%.
I don't know if that's related to this, but this is pretty magnificent decline here.
That's a 50% decline in a very major stock.
This is why the Dow has not been quite carrying on to the same extent.
So this is speaking to something really bad going on under the surface.
And I'm seeing the same thing as well, Paul, across, well, zero hedge here, writing on
the 14th of May, like it's dying, Goldman Sachs says of Pharma,
Pharma's trading like the new coal.
Remember when coal, 20 year percentage rank, zero percent.
Premium or discount to the S&P, minus 18%,
but this is kind of interesting looking at this table here
because healthcare is trading at a discount,
consumer staples, media and entertainment,
materials of course, we just talked about financials too,
big time, telecom and energy,
all trading at massive discounts to the S&P.
So what's up right now?
Semiconductors, so it's AI stories, software and services,
and I can't tell
what that last one is under there. But that's fascinating to me. These are all
your defensive plays right here, all of them, and they're all saying they're
trading at a mass discount. So this is not just you said FOMO, this is FOMO on,
this is like full-on get me in tech, buy anything sort of software or AI
related or tech related right now. Yes. And that's been the reflexivity trade since Trump was elected.
We saw a short period of time where value looked attractive. Now I don't know about healthcare.
I'll make one comment about healthcare. If they're doing this for the people to fix it,
then it's not going to be the number one
performing category.
Because one hint that we had, you go back to Obamacare being unleashed in 2010, oh,
this is going to be great for the people.
Well, we can examine the fruit of that right now.
We look back and everybody's healthcare is more expensive with less services, but healthcare
was, you know, FXH is one I watched, was one of the best performing sectors in the S&P
for the first six, seven years after that.
So but again, this reminds me of that 1999 window because the reflexivity investors has
been hey, it's mag seven and everybody's got to chase the mag seven.
And if you're a money manager in this environment and you've got some investors that are passive
in there in a mutual fund, you got to try to track close to the S&P.
Well, that's a large percentage of the S&P right now because it's over weighted because
of market cap.
So now there's this reflexivity to go back into that and at the expense of value.
Well that reminds me again of 1999 Berkshire Hathaway and Warren Buffett was down approximately
19% because of that
same environment where we don't want consumer staples, we don't want your energy, we don't
want your banking stocks.
Back then were considered value stocks.
People were selling those and they were chasing the internet.
Well, all of those internet stocks changed our lives over the next 25 years, even Amazon.
But it still didn't keep them from going down 80% from on average in the Nasdaq index.
I think it was close to 80 from 2000 to 2003.
This is the same environment and just another road sign that tells us caution ahead.
When value is being thrown out, attractive valuations, long-term lessons in investing says you want
to buy a company with good products, good market space for as low a price-trainings
ratio as you can to chase these mag-7 stocks because it's pure momentum and feeding frenzy.
It's a technical thing from my perspective, but it's causing a lot of investors,
I believe to make large mistakes.
And look, I may be a fool in saying that
because I don't know how this future is gonna unfold.
But I can tell you throughout history,
this is a very dangerous place to be throwing those good,
high quality companies out
that are already attractively priced.
Again, I'm not here to pick or choose for or against any particular stock, but there's
an incoherence to all of this, right?
So if you like the AI story, and let's say I'm all in, I like, I just love the AI story.
So a Nvidia, you know, micro, semi, all that.
I love them all.
Well, then you have to love energy too, because it's fundamentally an energy story.
Yes.
It's just that's just and energy is hated right now.
So I don't know how you love one hate the other.
It doesn't make sense to me.
The other incoherence to me was for better or worse, Tesla took a lot of damage from
the people who hated on Tesla because Elon wanted to help cut money from government spending.
I'm not sure why that translated into hate of electric cars or Elon, but it did.
So their earnings report that just came out, absolute, again, dog poo, right?
Real collapses in some markets like Europe and China, like big markets, like real collapse.
I'm using the word collapse very politely because it was maybe worse than that.
And it's up 25, 26% since the earnings announcement.
Right? So again, there's an incoherence to that that I can't make a fundamental argument
for that. So I have to make a different argument. It's a momentum argument. It's a FOMO argument.
It's a something, but I've never seen anything. I haven't seen this since the stuff I saw
back in 2008. Right. me either. Me either.
And I haven't seen it. Which was all center home builders then, right? You had to have home builders.
Yes. Toll, home brothers, all that. Yeah, toll brothers and yeah, all those guys. You had to
you had to own them. Must haves. Well, I remember in 2008 conversation that I had with a with a
client and this this is how this went. Prices had started to soften in the North Georgia mountain area,
and they settled down just a little bit.
The client was, you know, we were already defensive
outside of commodities at that point, so he's like,
hey, you know, they're not making any more land.
You know, we're in the southeast here.
We've got long-term growth.
Everybody wants to be in this area. And look, my son-in-law is an idiot. This is what the Southeast here. We've got long-term growth. Everybody wants to be in this area.
And look, my son-in-law is an idiot.
This is what the guy said.
And he's made a fortune in real estate.
And if he can do it, I can do it.
So I appreciate the warning, Paul, but he goes out and buys five houses because prices
have pulled back about 10%.
I think the final purchase was in April of 2008.
And then boom, everything came apart. The plan was to rent a lot of those.
Now, luckily, he paid cash for the homes. But even even then rental prices went down, there were people that weren't able to pay rent.
He would have been better off looking at the long term picture and being patient and averaging into that instead of that panic.
Hey, I've been missing this. And finally, this is my opportunity.
into that instead of that panic. Hey, I've been missing this and finally this is my opportunity. That's what happens at the end of these cycles like this because it's, you know, we get caught
up in hindsight bias. For those who like to read about emotional biases, Roff DeBelli has a
phenomenal book called The Art of Thinking Clearly, and it's real short reads, but hindsight bias is
one we tend to look in the most recent past Hindsight and recency bias and project that in the future. It's just a human weakness that we have
And that's one of the reasons it makes it so challenging when we get into these periods of time like we are right now
Well
Would you say Roth Roth the belly r-o-l-p-h
the belly D-o-b-O-L-P-H de Belli D-O-B-E-L-L-I and it's called
I want to read that. The art of thinking clearly. I've read that thing probably
I don't know over the past 10 years. It's a short read so you can do it in
short little pieces when you wake up in the morning. Great information and it'll
help pass on some wisdom to those that are out there about our own emotional
biases. It'll help you in many ways
Yeah, because I just did a whole piece with evie for uh peak prosperity subscribers on belief systems
It's some of the most powerful work i've ever done and not not not this piece. I mean
Some of the most important work i've ever done in my life is investigating
How we make decisions what belief systems are how they get amended?
Um, you know what goes into them, because what I wanna do
is hold beliefs as loosely as possible.
It's not that, let me be more clear.
I don't wanna reproduce the whole thing,
but there are enhancing beliefs.
Have them, hold them, right?
Hey, I have enhancing beliefs in my life, right?
Like I believe I can learn anything. I believe I'm lucky.
Those are good things, right?
I'm gonna keep believing those.
But there are limiting beliefs you can hold, right?
And it was Mark Twain who said it best.
He said,
it ain't what you know that's wrong that'll get you.
It's what you don't know for sure that just ain't so.
Yes, yes.
So you can be wrong about stuff, that's okay. But that's not important. It's what you don't know for sure that just ain't so. Yes, yes. So you can be wrong about stuff, that's okay,
but that's not important.
It's what you don't know that hurts you.
It's what you know for sure that just ain't so.
So you gotta look into those belief systems and see.
So to that end, you know, I was talking,
look at Moderna, just down another 5.7% at 24.
Let me back this out to a five year just so we get some magnificent.
This thing was all the way up here.
This was a $450 stock at one point and now it's a $24 stock.
I think it's still overvalued, but that's a personal opinion, not investment advice.
But this is clearly saying something's off in this story.
And then as well, if we go backwards, let me go back to Pfizer here.
Look at Pfizer at 22 bucks now.
Again, from a five year standpoint, you want to talk bear market.
This thing was a $60 stock and now it's a $22 stock and trending down also on volume. So these things are, it, there is something, um, very much in terms of if you want to buy
the stock market, that's fine.
But these sec, this sector right now is looking tough.
That is looking tough.
And look, I, I'm a big believer.
I wish that all of these companies from healthcare
to the pharmaceuticals, I know they need funding, right?
And the equity markets provide a lot of funding,
but I really wish that they were nonprofits
because I want them focused on serving the people
with really good products and not have that temptation
to cut corners for maximum profits.
And if RFK is able to do what needs to be done, those are not going
to be good performing stocks.
One indication that Obamacare was not great for the people is the fact that
the investments, the healthcare stocks and pharmaceuticals performed so well
over that period of time and, and the quality of care got worse and worse
for the average American.
So I wish they were nonprofits,
but I can wish all I want and that's not gonna happen.
But if they can gut all of this ridiculous regulations
and stacking the profits for the shareholders
of those companies at the expense of their customers, then things can be fixed.
And I hope that's what they're doing.
I was thrilled about the pharmaceutical announcement executive order that Trump put through.
That's one step in the right direction.
Yeah.
And it was really clever.
So they used the most favored nation trading platform for that.
So it's a pre-existing agreement that says, da da da da da, Americans shouldn't be paying more
than other nations, right?
So they levered an existing piece,
and then they put a real carrot on top of that,
and then a stick, and the stick was,
oh, by the way, if you don't play ball,
we're going to allow people to buy
their pharmaceuticals direct.
So they cut out the whole pharmacy benefit managers,
the PBMs, who are the real, they're the people most responsible for driving our
costs out the wazoo. So it's like, listen, play ball or not play ball, but if you
don't, we're gonna like pull this option on you. And I think that could be
driving some of the behavior we're seeing in the farm aside right now.
Because prediction, the pharma people are not going to know how to play ball.
They're just so entitled. They think they have the power. They think they can Because prediction, the pharma people are not going to know how to play ball.
They're just so entitled.
They think they have the power.
They think they can wait them out.
They'll just throw more money into the midterms.
They think they can sort of muscle their way through this.
I'm not sure, the one thing I trust Trump on a lot is that he knows when somebody's
getting screwed and he's decided the American people were getting screwed by pharma companies
and he's sort of said, yeah, stop that.
And I'm pretty sure he's right about that.
And I don't think he's going to back down.
So I'm really keen to see how this plays out.
No, and I love the fact what was in the press conference.
Somebody's like, what about all the money the pharmaceutical companies gave you?
And what was it like a hundred million dollars for his campaign or something?
But obviously that's not influenced the decision that he's making.
He's like, I'm still doing what's best or trying to do what's best for the average American
citizen.
And not only that, it's going to benefit the rest of the world if we get this fixed as
well.
Yeah.
So the 10-year back at 4.52, that's a pretty big deal as far as I'm concerned.
And the yield was up again on the day here,
breaking through what I consider
the psychologically important level, 4.5.
You can see it bounced its head off of it,
bounced, bounced, bounced.
It's been there for a while.
Let's go back five days.
And here we bounced along just under the 4.4 mark,
and here we bounced under the 4.5.
But you can see rates are going back up again.
And I think this is off script.
So here we're going back six months.
This was the low at the liberation day panic.
And now you can see we're all the way back up.
They were going this way.
That was the high back here on early mid January
at just around 4.81.
Looked like we were headed towards 5% at that point.
But I think this is off script, Paul.
I don't think this is the right direction
as far as the cent is concerned or Trump.
There's what, eight, nine trillion that has to be,
and I don't know how much that they've already
refinanced and rolled over this year.
But the question is, you know,
that was the low of the market sell off.
But if I remember correctly, when yields went back up there from that V at the 1st of April,
there wasn't a back off of the tariff, right?
That's the bottom.
Follow that up to the high there.
Right there was, if I remember correctly, I'd have to overlay the charts and look at
the time, but that was when the Trump puts seem to be on the tenure because that was when
they started backing off some of the tariffs and announcing some
trade deals and whatnot. And here we are back to that level
again. And I'm seeing a little bit of breakout in the short
run. So what's the bond market telling us? It's not going to
matter until it does. But it sure appears that the bond investors, which are the
smartest investors in the room, they just are, are more
concerned about inflation at this point than they are
anything. Maybe that's what it's telling us, but those yields
want to go higher. And that was something that mattered a couple
of months ago. Maybe it doesn't matter now
But I don't see how it's not gonna matter with high with all this debt that has to be rolled over this year
I mean is it inflation is the concern or is it that the u.s. Has a a spending problem?
And that isn't gonna get addressed anytime soon, right?
So there we hit a low of 388 on the 4th of April and just a couple days later
on the 9th, on the 5 days later, there we are at 44, you know, and then up again. So here we are at,
you know, now we're over the 45 market, 452. It feels like it wants to go higher. And of course,
that's going to, that feeds into everything, right? auto loan rates credit card rates mortgages you name it that all keys off the 10-year
So something's happening there on the 10-year Paul that I don't I feel like the that's off script
I feel like the approved script would be stocks higher gold down oil down
Rates down that would be the holy quad effect of what Trump would want from a optics standpoint and bonds aren't
playing long here.
No, they're not.
And the 30 year was up as well today.
So the 30 year is pushing some of the highs that we saw back in the middle of April as
well.
So rates, so anything extended out on the curve is higher.
And what concerns me about that is if you fully believe that they're going to print
their way out of this.
Now we go back to the tax bill,
the big beautiful tax bill that's coming through, right?
What is it increases the debt level by $4 trillion?
If I remember, I didn't see what period of time that was,
but I know it was 4 trillion.
So the raise in the debt ceiling is what it was.
That's the proposal.
And now you're starting to see the 30 year increase,
the 10 year, the 20 year.
If I'm really worried about them inflating away this debt,
then I don't wanna own anything that's on the long end.
And less demand means higher yields across the board.
So we talked last week about how
there was a failed German bond auction, but then they
changed the terms of the auction last minute and said, success.
We win.
This is starting, so, Japanese, so there's really only three big players out there in
the global market we have to worry about because China's market isn't open.
So they don't have an open bond market.
So you got Japan, you got the US, you got Europe.
And on this front, the Japanese long-term bonds have doubled over the last two years
in terms of interest rate, doubled.
And so here we see on the 30-year, they're starting to catch right up.
Their 30- and 40-year yields are now over 3% each, and that's a lot. And of course, Japan has a debt to GDP ratio of 251%,
and that's just government debt.
It's just, it's unbelievable what they're up to
and facing there.
And here we can see sort of the scope of this change.
This is just in 2025, Paul, look at this.
We're down here all the way at 2.55-ish, and here we are now closing in on 3.45.
This speaks to something dislocating in that market.
That is a massive move in the Japanese market.
I think they're going to be fighting hard to try and keep this from really blowing up
on them.
As I've often said, it looks like a what?
Sorry, that looks like a mag-7 stock performance chart right there.
Doesn't it? Yeah.
If I bring it up, because if Japan blows up, the whole thing blows up, right? It's just kind of
how it's, it's all one big blob market right now, you know, and so there's no fire breaks
There's no bulkheads in the ship of states anymore. It's all one thing
So these linked markets this says that all I can tell you is somebody is selling these bonds
That's it there's and they're selling them kind of at a panic
So somebody out there has said, I really don't want
long-term Japanese debt at all. Right. That's all I know. And if that continues, that's one other
area of the market where easy liquidity has come in. So if that yen carry trade blows up,
that reverses liquidity in the market. And if several other things blow up as well, that just sets
off a chain of events that could lead to a crash at some point in the future. Not a projection,
just a realistic estimation of what can happen.
Well, I mean, it's clear something is creaking popping sound out there. But with their debt
to GDP of over 250%, Japan doesn't have any room for error in here. They can't afford higher rates. They just can't afford them because they'll be paying all of their
tax income to pay off the indebted part. And then, oh well, we owe it to
ourselves, that whole story. But that gets dicey now. The other part of
this that I've been really concerned about is that, you know, Japan is a
manufacturing center so they
import all these raw materials particularly energy and then they do
cool things with it and they do a lot of value add they've got great
manufacturing processes they build good cars they do great on chemicals they do
good on really good on optics electronics all kinds of stuff but the
whole model is buy the inputs cheap add some value and sell the products a little higher.
And that's a great model. Love it.
If energy gets a lot more expensive though, that whole model gets pretty dicey.
And that's what Europe has just figured out because they didn't have quite as robust a manufacturing process technology.
And they're busy getting dismantled right now.
I just put this out to my subscribers a few days ago, but in the UK they had this huge
offshore wind farm and even with government subsidies and even with a 15-year lockout,
they had to abandon the project because they just couldn't, they couldn't make it work
at the stated rate, which was $85 a megawatt hour, which is way more than we pay.
And it still didn't work and God bless them, but all Europe can figure out how
to do Paul is, well, then we have to like up the subsidies because they just want
their wind power, even though it's going to bankrupt them and ruin their
manufacturing.
I guess they're going to miss out on the AI race with all these data centers and the energy
that it consumes if they're already in a bind with their electricity production.
That's a good point.
They will.
Yeah.
So they'll be left behind again because of theoretical thinking.
Well one of the things, Trump was just in Saudi Arabia, inked a bunch of deals, $148
billion for military stuff,
which I'm not a huge fan of.
Like, they're all excited.
Oh, look, we sold $148 billion of military hardware.
I'm like, not exciting.
However, he inked a deal, too, where they're going to be buying a lot of Nvidia's chips.
So I think that was part of the excitement.
But that's a natural fit, because, of course, you know, they've got all this energy to convert
into electricity if they want.
And then I don't know if you saw, but this was really remarkable to me big time was that
Trump basically came in and said, this was astonishing.
He says, we're very sorry.
He almost didn't say I'm very sorry, but he said people from the West, including neocons
have come in and done terrible things to the Middle East and have acted very disrespectfully,
and let's do this differently going forward.
And he just wanted to reset all of that.
But he called the neocons out on purpose
for wrecking countries
and not really appreciating the other cultures.
He was treated like a rock star.
Purple carpet, color guard, horses with American flags,
standing ovations.
I mean, it was really like a big deal, but he basically said we're resetting
this whole relationship here
If I had to place my money on the table black or or red and
Red is the Middle East. I'm putting my money on red compared to black, which is Europe
Oh, absolutely, and I did not know that he said that, but that's what we need to be doing. We need to work with everyone and bring it together instead of coming in and
dictating and with pride saying, we know better than you. So, and I also heard he got a lot of
tremendous number of orders for Boeing as well. So I know they got a good deal out of that.
He's a deal maker. He likes his deals. He goes around, he cuts deals. I've never had a president who just goes around cutting deals, but it's what he does. But
the resetting of the tone of that relationship was pretty, pretty big. It's actually pretty
exciting. I'm glad for that because I would much rather. So China, as we've talked about
before, their strategy, Paul has been just running around the world, making friends with
with their checkbook diplomacy.
And I've just been like, why don't we do that?
Well, now we're doing it.
So we'll see how that plays out for us.
But I'm a big fan of that.
Rather than threatening people, find the win-win and find the way that we can both do better
as a consequence of that relationship and try that for a while.
So I'm pretty hopeful for that.
I hope that that gets us somewhere.
I'm hopeful too.
And how nice is it that we're hearing about deals
that were done for the American people and CEOs
were going over there to try to better
for the average American versus making deals
for their own foundation and their own family members
to sit on boards and all of this stuff.
That's a pretty big trend.
We're gonna have to watch that carefully
because I think there's something coming from that. But you know obviously that
was to begin to forestall that China's making a lot of inroads doing the same
strategy so I think we kind of had to make a little pivot but it was it's
pretty intense. Look at all the things that are pivoting right now and
who knows how it's gonna play out so that's why we got to be nimble. Make sure
you understand the risks. Watch thes, you know the signs very carefully because this could go either direction
It's pretty it's this is a delicate time, you know
It's like the butterflies just got its wings out of the chrysalis like it's like puff a wind and this doesn't work out quite
Right, you know, so and all of this is great
You know and that and that would be great for the economy from a long-term standpoint for the US.
My biggest concern is just the ridiculous valuations and how expensive this market is,
because we can have the best economic outcome for labor in this country, but still capital
pays a price.
So if we get back to normal valuations, just average price, that could be 30% below where
we are.
So let's say, hey, this is great
and increases the revenue and business opportunities
and employment within the United States.
Well, that still means that this equalization means labor
is probably gonna creep up a little bit
and cost is gonna creep up in the US,
which may reduce demand, which causes profits for corporates to be a profit margins to squeeze a little bit and you see prices
come down.
So this could be great for the labor, the average American at the expense somewhat of
capital within the United States.
That's one of the concerns that I have about this.
I like what's taking place, but it's a completely different environment than what we've been seeing over the past 10 to 15 years
where it's been at the expense of labor for the benefit of capital. Let's hope
that labor gets its turn at the at the table. Right. Finally. The people, the
people of this country deserve a few wins. It's just been way too long without
any wins with health care treating us like farm animals at best and you know at worst worse than
that and with you know the Fed just doing what it's doing and just throwing
whole generations under the bus with nobody challenging them. That always
bothered me Paul that you like the all these scribes out there like so Jerome
Powell how much do you think the economy is really gonna be amazing, right?
It's like they should be asking them questions like hey, you just threw an entire generation under the bus
I get it. You want to rescue house prices, but
How what happens with these people right
So I'm glad that we can actually have these conversations again, and I know it's gonna be tricky and
perilous
Like all good adventures involves a little bit of danger. It may not go the way we hope that's right
That's right. And when you're in uncharted territories, you're gonna learn new things and you're gonna discover new things
so this is a completely different environment that we find ourselves in and
So but but I'm excited about the opportunity
and, you know, things that are taking place. We're back to focusing on reality instead of
theory at this point. If we could get back to the root causes of things, stop the Fed from printing
and don't let markets be run roughshod by price manipulators, right? Just get back to sound money,
free markets.
I believe in both of those things enormously.
We haven't had them in a while.
It would be great if we could get back to them.
Anything else is just sort of band-aids and window dressing,
so I'm kind of hopeful that we can go deeper than that,
but we'll see, one thing at a time.
And I know this is a courageous
and I may look like a fool from saying this,
you have to examine your own situation, But we're in an environment right now where we went
from peak pessimism to extreme pessimism to extreme optimism. And we're kind of
back to that reflexivity of the magnificent seven, but yet the
underlying environment is changing. You've done a great job of explaining
the issues with energy from a long-term standpoint,
I do encourage individuals take this opportunity if you have it. And it's a scary thing to do.
Be prudent, don't speculate. Get your emergency funds in order, make sure that you you're in a
position. If you have some debt, reduce that debt as much as you can right now It's not the missed opportunity in the short run that's going to cause you to be unsuccessful
But but if if this is a false typical bear market rally and we've gone from a bipolar
Extreme to extreme pessimism to extreme optimism
And we still have some reality that's gonna have to unfold over the next six months, because Trump has made it clear there's going to be some pain in the short run
for long term.
And maybe we get through this.
Maybe we get through this with instant gratification, but it's highly unlikely
that we do here in the interim period.
So really good decisions made today will produce fruit for years ahead, but they
may not be instant in that gratification.
So I do encourage investors, if you were losing sleep at night and on the verge of panicking
with that sell-off that occurred in February, or February, early April on the tariff tantrum,
then consider reducing your exposure enough to where if that shows up again, that you
can sleep with some peace at night. Nothing better than a good night's sleep right
Paul? Right, right, be in the right position. All right well that's all the time we
have today. Thank you for being here again if you want to talk to Paul and
his amazing team just go to peakfinancialinvesting.com there's a very
simple form to fill out won't take take but a minute. And then within 48 business hours,
somebody from Paul's team will get back to you,
schedule a discussion.
So with that, Paul, thanks so much for your time today.
Always a pleasure, Chris.
Have a blessed day.
Likewise.
Bye-bye. Music