Peak Prosperity - The Big Beautiful Bill Is More of the Same

Episode Date: May 23, 2025

There’s a crisis afoot in the global long-bond markets. Japan’s is melting down, while the rest are under pressure. Adding fuel to the fire, the Trump administration threw in the towel on controlling US fiscal deficits and now says the plan is to instead “grow the economy.” Translation: More money printing and inflation, dead-ahead.Click Here for Peak Financial Investing

Nothing in this program should be considered investment advice. It is for educational purposes only Please hit pause and read this disclaimer in full There's pain coming at some point in the future because we're doing the same things That led to the inflationary pain that we just had a little bit of a warning. It was a horrific inflation It's just enough to kind of make everybody grumble a little bit but on the path that we're headed down, I don't see how we don't get out of this without horrific inflation at some point that's going to bring all kinds of misery to the masses. 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 episode of Finance University I'm the host Chris Martinson and today we're gonna be talking about I Think we're looking at another 2008 moment where were you during the great financial crisis? And when did you know and what was your earliest sign? We're gonna talk about that because bonds are currently in a crisis and this is across the whole Western world We got to talk about this. I think it's another 2008 moment potentially Got to talk about it Paul

Glad to be talking about it with you Paul kiker of kiker wealth management. How are you today? I'm good, Chris. I'm good I feel like the grounds shifting beneath our feet right now So this is this is a very good timing on the conversation that you have for us today Well, and also good timing. I see you changed the sign over your head there. You got the bond bubble. Look at that. Well, what gets me is I ordered this three months ago and there's a, there's a, a person on Etsy that makes these things, which is great. So it comes in yesterday, which is perfect timing for what we're dealing with now. Now the chart ends with interest rates bottoming in 2020, but I love these little

historical pieces right here to keep around the office and throw it back here from time to time. Well, I think history is being made right now. And so I want to alert everybody to this, you know, sometimes things get papered over again, but, but they've been having harder and harder trouble. I want to getting that job done. Paul, I want to talk about bonds failing, not all bonds, but long bonds. And of course, long bonds are super important in this story. And it started here. I know I pointed this out a couple of days ago. So the 20 year Japanese government bond, that's the JGB.

So it had what's, you might as well call it a failure. And so what to, to explain this to people, it says it had biggest tail since 1987. So here's how this works for people who don't know how bond auctions work. A government will say we have a billion dollars of paper, bonds that we wanna sell, and if they got one billion dollars worth of bids,

they would have a bid to cover of one. They had a dollar to sell or a yen, and they got a dollar or a yen in, one to one, fine. You actually want them to be more covered than that. You wanna have two to one, three to one coverage. That'd be great. Even better, because then they get to pick because when they auction them, it's an auction.

People bid, that's what you do in auctions, you bid. So people bid on that. Now if they were going off at say 5% interest, just making a round number up, if everybody bid 5% on that, so people bid on that. Now if they were going off at say 5% interest, just making a round number up, if everybody bid 5% on that, you would have no tail, but some people are gonna want them a little more than others so they'll bid a little higher price or a lower yield, and some people will bid a lower price or a higher yield,

because bonds and yields, prices and yields go on a seesaw. All right, so the tail is they didn't sell them at the price they wanted to, and some people were being cheap and offering a lesser price than they wanted or a higher yield. So if they were offering them at five, somebody might say, I'll only take that at 5.8,

you know, or 5.08, or whatever the numbers are. Just something other than what it went. So they have this big tail, blah, blah, blah. What that means to me, Paul, and I think most people who analyze this is that the bigger the tail, the weaker the interest. So this is just saying Japanese government's having trouble interesting people in its bonds at these prices or at these yields. So the yield is going to have to go up to attract more people

and look what's been happening to their yield. It is exploding higher. It's it, I don't think it's too strong a term to say that is melting down. It's not too strong a term to say that if they were offering, and I'll just make a number up here, all the way back here in 2018 late, We're all the way back here in 2018 late. What was that? 20 basis points maybe? 10? Well, if it went from, let's just make it round numbers, from 10 basis points to over three and a half, that means they're paying 35 times more to borrow money on the long

end of the curve. That's what I've been looking at, Paul. I've got a lot more to go, but let's stop there. What are you thinking when you see that? Now, when I look at that, so the bond vigilantes have been cryogenically frozen for all during this period of time. And all of a sudden, they have reawakened

and everything has changed. The market's assuming that we're going to continue on this path, fiscal deficits and inflation's under control, and retail investors are ridiculously giddy. But we have reached the point of diminishing returns at this point. It looks like the bond vigilantes, which are the smartest investors in the room in every occasion, have said enough is enough at this point.

That rate of change is hard to absorb by in the room in every occasion have said enough is enough at this point. That rate of change is hard to absorb by those over-leveraged individuals and businesses. So we've got some ripple effects that are gonna be coming along from that. I believe that they're gonna be major. Well, this is an important point because now we have to get back to, you know,

what I talk about in the crash course. I spent a lot of chapters on money because if you don't understand how money comes into the system you and I we think Of money is this thing it's already originated by the time we see it You know so you have to go out and earn it and put your time in and so it's this tangible thing But when you back up you find out that we have a very peculiar Type of money system in the world and then that peculiar money system money is loaned into existence

And then that peculiar money system, money is loaned into existence. So that's why understanding the cost of money or the debt side of this, which is the loan side of this, is really important because it drives everything, right? So what we're finding out is that our system of money is now saying money creation is gonna slow way down because fewer people are gonna be able to afford these higher rates.

So I look at this, I don't know how they do their mortgages in Japan, but if this was the U S we would see mortgages go up by three and a half percent in the last five years, which we more or less have, right? Close ish, I guess they were all, what they, I forget what they bottomed out at the 30 or I think it was something like two six6, 2.7, 2.8, 2.8%. Somewhere around there. Somewhere around there, I forget. And now they're poking their heads up at 7%. That means fewer people can afford a house. And we're seeing that already in the housing data.

So this is just, for people who know, Paul, that you're looking, that what we're looking at here is the money system is starting to cry. It's making whimpering noises here. So it's really important to take note of these things. It's very important because the ramifications may be slow, but when you look at what occurred in that, you reach the point of diminishing returns slowly and then all at once. And and that's what we're seeing in that chart. Isn't that how you go broke? That's what Hemingway, somebody asked Hemingway, how did you go broke?

He said, slowly, then all at once. Yes, yes. And that's exactly how it happens. You know, and people are over leveraged. I'm very concerned about what's taking place in private equity and what I'm seeing behind the scenes, we can get to that in a little bit later as far as how they're pushing it on retail at this point, but especially private equity

because they're heavily leveraged, heavily leveraged. So everything in their business model has changed at this point, especially if that yen carry trade starts to blow up because of what's taking place. And in the US, you've got yields that are creeping out and starting to break out with a weak dollar, which is an indication that investors are not willing to

fund these reckless fiscal deficits. I mean, we said that the Biden administration was reckless, and now the Trump administration's reckless. We'll get to that in a minute. Yeah, we'll get to that in a minute. But this is the carry trade blowing up, or maybe it's not solely because of that, but if you were in the carry trade, this is a disaster. Uh, because again, for people who may not be familiar with our prior episodes on this, but the carry trade simply means I would wander over to Japan. I would borrow money at 10 basis points, which is cheap.

And then I would wander off with it and I would carry it to some other location like New Zealand or Germany or some other place. I thought I could get a higher return and then I would be off with it and I would carry it to some other location like New Zealand or Germany or some other place I thought I could get a higher return and then I would be investing it over there That's all well and good as long as I can buy those yen back at the same price that I Started this whole shenanigan at and as you mentioned Paul, I'm gonna do this with leverage. I'll borrow 1 billion Yeah, I'll have 1 billion in capital, but I'll borrow one billion. I'll have one billion in capital, but I'll borrow 10 billion. I'll have a 10x leverage. Carry trades sometimes go 40x or more.

All right. So a lot of leverage. Things don't have to change all that much before all of a sudden I've wiped out everything. So when the carry trades unwind, it's kind of too many concertgoers trying to get out of a fire door moment. You know? Well, and it's easy for people to look at that chart as well and say, oh yeah, well, it's just gone to what is that one and a half percent in that period of time. But the problem is, is the rate of change.

So if that happens slowly over a period of time, then businesses and investors are able to adapt to that environment. It doesn't really matter that it's still a low interest rate from what we're experiencing in the US. It's that rate of change that has occurred, which is like throwing a wrecking ball or throwing a wrench into the gearing system of what's taking place of a fine-tuned machine that's picking up pennies and dollars, well pennies, but then you put leverage in front of it,

hundred dollar bills in front of a steamroller, and all of a sudden, that steamroller's moving a lot faster than what you're used to it moving. So that's the problem with the rate of change and how quickly that has occurred. Well, let's be clear, this is an emergency, but you might be thinking, okay, come on, Chris and Paul, that's Japan, how does that affect us?

It really doesn't necessarily, but we're recording this on Thursday the 22nd. I know you saw yesterday, Wednesday the 21st of May 2025, there was all of a sudden stocks sold off hard. Yes. And the reason they did, I believe believe is because the United States just had a really bad 20-year paper auction to same thing we just saw in Japan a really wide tail And you can see here that there was this this is a pretty big move like all of a sudden bad auction

the yield spikes and bad auction, the yield spikes, and next thing you know, stocks sell off, and Emmett is investing, wrote here on Twitter, if you're wondering why stocks just all went down at once, we just had a horrible bond auction in the United States for our 20 year treasuries, and so the credit market is screaming for help right now is the conclusion. So this is spreading.

This is this is not just a Japan thing. In fact, I've got a chart I'll show in a minute. It's global right now. Again, that's why I frame this as like great financial crisis, because that wasn't just a couple bonds went bad and Lehman Brothers and Bear Stearns got in trouble. It was those, but it was the whole system suddenly started to get trouble. So I'm, I'm saying this feels like a systemic credit event that's unfolding right now. It certainly does. And the question is, is what tools do they have available to step in and, and, and stop this from taking place?

Because we've reached the point to where more fiscal stimulus yield curve control, anything else is, especially in the U S is right on the verge of, I mean, inflation curve control, anything else, especially in the US, is right on the verge of, I mean, inflation is still, it's slowed down, but we're still pacing higher than what we as citizens should have to experience. So there's no way to solve this problem based on what we can see right now without further exacerbating the inflationary issue and depreciating our currency, which is, which another important thing is yesterday the dollar was down with those yields going up, which that's something that should be negative because the dollar should be strengthening

with yields going up like that. And it's not. Yeah. And the reason for people listening who don't know the dynamic is that if there's global capital, it's always hunting in the world for the best place to go. And if yields are higher in one place than another, it goes there. So when the US yields go up, dollars should be coming here, and that would make the dollar

go up. But seeing yields go up and dollars going down, the dollar going down tells you that's actually, that's a real sign of stress for me, Paul, because it means in bonds are being sold in the dollars being sold at the same time. And that's not a good look. No, it's not. And it's an indication that capital would rather go home because of the risks that they see within the U S and some of that may be, you know, a part of of the big beautiful bill, the triple B, and

fiscal irresponsibility. So it's not a good sign. At a minimum, it's another warning shot across the bow that everything is changing and everything has changed while you've still got, unfortunately, retail just assuming that we're going to get more of what's occurred over the past 10 years. So everything under the surface is changing. Well, indeed. And I just need to put this in context.

Even before this next thing I'm going to show you, we have to note that these charts, this is all of the Western world plus Japan, Japan circled in red over there. But we're looking at Australia, Belgium, Canada, Germany, Spain, the Europe, European Union as a whole, France, Great Britain, we got Italy there, then Japan, then the Netherlands, and then the United States. These are 30-year bonds. Paul, whole worldwide, they're just like been going up ever since 2021 they're under pressure everywhere at this point in time so this isn't like a US problem or a Europe problem or a Japan problem or a Australia problem this is kind of everybody isn't it? It sure is. I wasn't aware, I mean I've watched

certain areas but there are certain that have been off our other areas that have been off our radars that that's pretty incredible actually. Well it is. So, so, you know, the beggar, thy neighbor approached a currency as well. I'll, we'll just start printing in the U S and we'll let Europe, you know, eat the inflation that comes off of that. Um, you know, or eat the consequences of that. But there's really, everybody's under the same program. Paul did, so I said, what was the moment?

What was the moment where you said, okay, that's it? Could it, maybe the Japanese bond auction, that would be your moment. For me, it was this, and this is even, this came out just before the big, beautiful bill, which we'll talk about, came out. But this is Scott Bissett. Now remember, Scott Bissett had been saying the whole time,

we're gonna really contain, we're gonna redo the global trade arrangements. We're going to have all these wonderful tariffs coming in, which will start to shrink the U.S. deficit. And at the same time, we're all, you know, fiscally, the United States government with Doge, we're going to start really constraining spending. So that was the story. And then he gets on CNN and he says this.

There are several components there. So if we unpack it, there is the growth, the potential growth of the debt. But what's more important is that we grow the economy faster. So what we've seen under the past four years, and what we inherited, I inherited 6.7% deficit to GDP, which was the highest deficit when we were not at war, not in a recession. So we've been trying to bring down the spending and we are

going to grow the revenue side. So we are going to grow the GDP faster than the debt grows. There it is. That's a change of plan. That's a pivot. The plan now is we're going to grow the GDP so that because we're spending all this, it won't matter as much. We're going to try and eat into this from the bottom by growing our economy. Every president says that I assign a low probability to them being able to do much about that, to be honest, but they just threw in the towel. They're not going to constain constrained spending anymore. No, no, a complete bait and switch was what I was concerned about that was happening. You know, my question was, do they really have the wherewithal and are they strong enough to lead the American people through what needs to be done for the masses. At the expense of the top 10% who are oblivious to what's taking place under the surface,

and it looks like they're willing to throw the masses under through inflationary pressures. You know, we're gonna let inflation run hot, so our GDP numbers look a little bit better to outpace this. That's what I've been concerned about all along. So it's more of the same, it was a bait and switch. And it's not just that we're gonna keep on

the same trajectory as before. This analysis by, I don't know who did, I found this is from the Wall Street Journal, I don't know who actually ran the numbers. Source, Piper Sandler analysis of congressional data, there it is, I see it now. So the blue line, that was how much the deficit was gonna go up anyway

Which is about two trillion dollars a year going up to about two point eight and now it's just gonna go from two to three Over the next ten years. So two trillion I know you saw on the crawler on that CNN thing is said deficit to increase by three point three trillion They meant they meant three point three more trillion than it was gonna grow Anyway, the the deficit is gonna grow at least two Maybe as high as three trillion dollars each and every year for the next ten years. Let's average that out That's 25 trillion if we take the median of that because that's 2.5 for ten years, right?

25 more trillion On top of where we're already at which by the way, Paul, can I just let me just take a look at this on top of where we're already at, which by the way, Paul, can I just, let me just take, look at this. 220 years to get our first 10 trillion of debt, just five years for the last 10 trillion, and over the next 10 years, we're going to grow at another 25 trillion, just mentally make that red line start pointing straight up in the air. This feels reckless to me. It feels reckless to me too, because, because it's more of the same. And, you know, we bash the prior administration for fiscal irresponsibility, and it looks like we're getting more of the

same here, which is very similar to what Trump did in his first presidency. I was so excited that he would actually come in and do something with the Federal Reserve and then gets in there and bash his interest rates down and print, print, print, print, print. And then we have to remember he didn't, he was, he was a part of a massive amount of printing during COVID and paid people more to stay at home than it was to work. Indeed. And Paul, I want to get to the implications of what this bill really means.

We'll go into the big, beautiful bill. And we're going to get to that as soon as we come back from this message. The markets are unraveling and the stakes could not be higher. If you're relying on passive strategies or so-called diversification or perhaps using an advisor who is, I don't know, maybe in elementary school during the great financial crisis, you could be on a collision course with staggering portfolio losses. Peak financial investing is your lifeline. We handpick wealth managers who will actively manage your portfolio with proven, market savvy strategies, not the tired modern portfolio

theory that could crumble under pressure. The unprepared will not just lose this time, but lose big. The future that I see consists of both winners and losers, but many more losers this time than last time. Go to peakfinancialinvesting.com today and schedule your free consultation. This is your chance to protect your wealth. Again, that's peakfinancialinvesting.com, and I'm Dr. Chris Martenson urging you, please don't wait another day. All right, welcome back everybody.

Paul, I wanna talk about the implications of this now because I just showed this frightening chart, right, which really ought to scare everybody. By the way, if you see down there on the lower right, it says, at peak financial investing. That is the Twitter handle. We just started this Twitter account now, so for anybody listening, if you want to follow myself, I'll retweet anything Paul's got, but I'm just putting all my financial thoughts on that Twitter handle, which is at peak, F-I-N-I-N-V, peak fin inv.

It says short for peak financial investing. All right, so we're gonna pile on a lot of debt and this thing, just Speaker Johnson is all excited because they passed the one big beautiful bill act and here's some of the implications of that, Paul. First, additional, there's going to be an additional 2.2 trillion from extending the tax cuts on the top line there. And then they're going to increase the standard deductions. So that's another 1.3 trillion over the next 10 years. Increase the child tax credits. So that's 800 billion sort of middling stuff, defense

spending is going up, things going up. And then all the way in the bottom, they're going to save some money by getting rid of climate change money, so no more EV tax credits, no more solar credits, stuff like that, and then cuts to Medicaid. I hope those are efficiency savings, not real cuts, because that's already kind of a stressed program, but I just gotta point something out. This is what they project,

and this is how they always project it. Paul, this is like when you go to the auto, you go to like a used car lot and they say, the car is $1,000, but if you want a windshield and tires, that's extra. These are the projections with no recessions and no wars. Those are extra. So this is sort of best case, economy grows, nothing goes wrong, which of course is not a good assumption to make, so these always have to be taken

in my mind as the base sticker price without tires or windshields. Yes, yes. Yeah, and just like the last, so we like to buy one year old cars or two year old cars for Hollywood low miles, you know, and you go in used to the price was the price. They know how I deal. And then you go in there, the last car we bought for,

I called this is the price, right? Well, we'll come down and look at it. And then they sit down for signature after you, they think you've decided you want the car and there's another 10% added. So I'm the type, I just get up and walk out. But you're right, this is the base. There's always going to be more that's added to it because there's plenty of things that could go wrong. That's going to give them an excuse

to come in and reinstitute quantitative easing or yield curve control that I don't think is going to be the answer. All these excuses to further exacerbate the situation. I mean to carry on with this with this story, the House bill, so we're way above the 3% target is that green dotted line. And so you heard Scott Bissett say, well, I inherited a 6.7% deficit to GDP, which by the way, is an emergency level of funding that's normally not seen out of the context of actually being at a war like a world war. So it's this huge, huge amount of deficit spending they've just thrown in the towel,

nothing we can do about that. And none of the proposals are less than 5.2%. That's under current law. But the house at reconciliations either red or orange depending on which one you believe six to seven percent Deficit to gdp money printing. This is inflation people anybody you look at this chart Next thing you need to think is how much our houses and cars and eggs going to cost because this is inflation you get inflation When the government spends money it doesn't have

is inflation. You get inflation when the government spends money it doesn't have. And where does that money come from? Follow that story up the river and you get to the headwaters of the Nile and you find the Federal Reserve there. Another story for another day. But you mentioned it already Paul, QE, quantitative easing is fancy name for the Federal Reserve just printing up however much money is necessary so we can spend that much. It's yeah, no, but no change, no change across administrations. No, no. And what that means is, you know, and, and investors, you know, or sit at the citizenry has finally started to understand with insurance costs going up,

uh, uh, you know, home insurance, car insurance, price of cars, eggs that we've seen in the interim period, it's at the expense of the purchasing power, which means the treadmill for the average citizenry is gonna continue to get faster and faster and faster and faster, and the consequences of making a mistake are gonna become ever more severe.

That's the sad part about this because we were all hoping that they were going to follow through with what they said they were going to do. Let's go ahead and get some pain now. I mean, they told us short-term pain for long-term gain. And then all of a sudden, there's a little bit of pain, and they do a complete 180 and said, oh, this is too much pain for us. And we really didn't experience any pain in the short run for the average individual there. So old school says, well, you know, the government deficit spends and inflation goes up and then

you get this sort of wage price spiral and we all kind of hope our wages keep up with the price part of the spiral. That's the old story. However, we have this new thing, Paul, we have to talk about AI is now in the room. Yes. And it's already having its impact. So I don't think I can trust the wage side of this anymore. So this is Shopify.

Shopify CEO, according to Fernando Cao here says, he just betrayed his entire company after building $143 billion empire by putting people first his new policy Just made it impossible for employees to even keep their jobs Here's the brutal memo turning humans into backup plans and it says now um, it says Okay, there's this philosophy, uh leadership thrive, but then the thing changed and here it is He says before asking for more headcount teams must now prove why AI can't do the job. So this is a company that was totally about its people.

Even this company's like, whoa, time out. You know, if the job can be done by AI, why wouldn't we, right? And nope, I lost it. So I already heard about another company in the Netherlands laid off all 700 people, all 700. The whole company's run by AI now. And so this is happening all over the place. So AI is hugely deflationary for wages. It is.

Across many sectors, maybe not all of them, but enough of them for me to say there's nothing more toxic, I can imagine, Paul, than depressed wages and the government deficit spending 6 to 7%. This is tough. This is tough. And add on top of that, I wish I don't have it here because I didn't save it, but have you seen the videos about the capability of these robotics now? Oh, yes.

So what are these corporations going to do? You've got the investment into AI, which is moving at an unbelievably rapid pace. Robotics have reached the point that these things are pretty amazing in what they're doing. And what are corporations going to do? If you're a big investor for a family office that's sitting in a room detached from the average citizenry, you're focused on profitability. These boards are focused on profitability for those individuals that keep them in those positions,

and the CEOs are. And they're detached from the average person in that top 1% of our society specifically. Well, what are you going to do if you've got the alternative like he does for artificial intelligence and now that artificial intelligence can run these robots and you're looking at having to pay dramatically higher prices for individuals that are going to be sick, life events that are going to happen, may not necessarily work out or you've got this robot that you can reinvest into to replace those jobs. That's my concern about where the next parts go. And so I'm not so sure that we're going to get this, you know,

wage price appreciation like, like should begin to occur in, in these inflationary environments and these deficits like this. Well, you know, and it's not a, I don't want to come off sounding like an old Luddite or something, but technology is always deflationary. Yes. Always. Right? Remember when we moved from humans with hose to tractors, right?

Put a lot of people out of work. I would never suggest that we should go back to people bending over with hose in a field if we had a tractor sitting around. AI is one of the most disruptive things I've seen because there's a huge number of jobs that it can do better than humans, faster. What I was trying to find was this little video and maybe I'll post it later. I'll probably put it in the comments down below back at the site. But it was a radiologist saying, hey, look, here's a radiograph.

I can tell you that there's a left lower lobe pneumonia over here and there's some consolidating pneumonia over here on the right. And I can tell you that because I have 20 years of experience and he presses a button and those two areas lit up and he said, hey, I just did it in a second. Is McDonald's hiring? That's my only question, right? So he made fun of it, but like a job he trained decades for is now done, you know, pattern recognition is something AI does brilliantly.

And that's what a lot of radiologists do. But, but it can also structure arguments, anything administrative, right? If you work in municipal government and your job is to make sure forms get filled in from the citizenry, I don't know, you work at the DMV? I mean, this is, so how do we put those two pieces together? I feel like what we have is some old school thinking, which is like, oh, we'll just grow the economy, but we're going to inflate things steeply. And somehow this is going to pencil out, because in the past what's happened is wages have magically somehow managed to keep up, but it's not going to happen unless you actually

give people a universal basic income that keeps up with the rate of inflation. No, that's what they've been saying they've wanted to do for quite some time, which is absolutely terrifying because they make the decision and it takes away essentially the American dream that I can be innovative, I can make, have some discipline sacrifices in the short term today for a better future. But they're, they're eroding that entire foundation, which allows us to adapt to that. My advice, I was talking with a, I gave a talk the other day in a nearby town and in my, I got asked and there were some kids

and younger people in the audience and I was asked like well what about this AI stuff and I said two things lean into it lean into it hard be part of the the people who know how to operate it or lean all the way out of it and do things AI can't do and probably won't be able to do like when you're when your roof is leaking you're not probably gonna call AI right you know When when your plumbing goes out you're probably not call an AI at least for now right? That's right, so Well to carry on the story the CBO estimates. This is

Significant these are additions to the deficit remember. We were already running two trillion dollar deficits now. It's just gonna be higher So I look at this Paul, I see lots of inflation coming. What's interesting when you break it down is they're like, oh, you know, it's kind of tax neutral. Well, no, the bottom quintile gets a little bit of a tax cut, but the middle, fourth, and top quintile, so that's three units of 20. So the top 60% of the wage earners in this country see a tax increase out of the current plans

as they're understood. So that hurts a little bit. I think Bitcoin already is sniffing out what just happened, right? So here it is up to 111,000 and this is consistent with Bitcoin saying, oh yeah, there's some like, well, it's consistent with a couple of things. Bitcoin and gold, I think are saying the same thing to me, which is, which is big money is starting to move out of systemic money, if they can, right? That's money held at one

of the big banks or in a, you know, like they're starting to like hedge their bets a little bit but they're out of the long bonds, they're bailing on those as fast as they can. So where does that money go? Well, some of it's going here, no question about that and some of its been going to gold. No question about that How do you see this how do you see this playing out for for equities they tend to be pretty good inflation hedges over time They tend to be pretty good inflation hedges, but I also go back to the 1970s and and let me let me pull up that Because I want to kind of talk through that well for everybody who's you know involved in AI picks and shovels right if you're Involved in making data centers data center cooling energy. We haven't even talked the energy side

AI is an energy pig. It's gonna need a lot of that stuff going forward I think that bleeds into basic commodities like natural gas and in particular things like that. So that's a whole story. But I guess the question is where do all the people shop and what do the people do and where do they vacation and what homes do they live in who are going to be in the dispossessed class as it were, the UBI class. If the government ever goes to UBI Paul, quick prediction, they're going to pay less than

the rate of inflation and it's going to be a sub living wage. And it's just going to throttle people slowly until they become fully dependent and don't know how to get off of that miserable train. That's right. Which is a completely different environment for what America has experienced during the baby boomer growth phase and popular during their lifestyle. So what I wanted to show here is just a period of time. So the immediate assumption is,

is that inflation is going to be good for equities. So what I'm showing on the graph here, this is the S and P 500 going back to 1926 on a monthly basis. So the black line is the S and P 500. The red line is a price earnings ratio of 20, which would be is considered an overvalued market historically. Blue is a price earnings ratio of 15, and the green is a price earnings ratio of 10. Well, in the inflation that we had in the 70s, you can see a specifically here, the earnings portion of the S&P 500 went up, okay?

Market was overpriced in 73. Of course, we had the recession in 74. Those earnings dropped a little bit there on the backside, but that inflation, cost of goods going up, the cost of the production process and input into those businesses squeezed profits, investors decided they weren't willing to pay enough for it. So initially there was that pretty major decline that occurred in 74. And then the market started playing catch up and benefiting from the inflation.

And then we had the 14 years where the market went sideways, then all of the ridiculous intervention that's occurred here. So I don't know how this unfolds, right? I mean, corporate 14 years where the market went sideways, then all of the ridiculous intervention that's occurred here. So I don't know how this unfolds, right? I mean, corporate profits may stay up in the event that they replace with AI, deflationary for wages, but, you know, protects corporate profits.

But I just don't see an environment where the market, the stock market, especially in the US, because we've had so much money from the world flow into the US during this period of time, I don't have that chart with me, that we get the best scenario where equities just continue to stay ridiculously overvalued because everything has changed at this point.

You know, what led to this? No inflation, low interest rates rates and all of that changing. So my concern is, is you may see a situation where that inflation causes earnings to go up, but the price component of that earnings goes down. And we don't know, I don't know how this unfolds because this is the same leading edge if this inflation takes off,

but we're also in a completely different environment from technology and whatnot. But the behavior of investors, the psychological component has not changed from what led to the Great Depression to the same type of circumstances in the 1970s. We're just doing more of the same today than what we were doing there,

thinking that it's gonna doing more of the same today than what we were doing there, thinking that it's going to work because of the other factors that have helped fuel this period of time. I mean, in the 1990s, you could buy a rental property in the North Georgia mountains where the rent would pay for the property in seven years. Well, at this point now, you know, and then demand and easy money and low money and all of this intervention and the re-leveraging has caused rental properties or real estate values to go up dramatically. A lot of that's asset price inflation.

But is it going to be the same for the next 20 years? When today what's different versus what was occurring in the 1990s, a lot of rental properties that you're looking at, like I had a client that called and said, hey, I've got some money that I want to invest and where to go. And we started talking to strangers. I said, so where'd this come from? Because he owns a lot of real estate, rental properties. He said, hey, I had somebody call me and they wanted to buy one of my rental properties. He said, hey, I had somebody call me and they wanted to buy one of my rental properties.

And I did the math and it was 35 years worth of rent is what they were offering to purchase that property. He said, and I decided there's no way I would buy that under those math. So I'm gonna take that and reinvest it somewhere else, which what we're looking for is, commodity strategies, international market strategies, undervalued assets, and there's a lot of them out there outside the U.S. right

now. So we're in a completely different environment. And I just don't see how equity markets don't have this realization at some point sooner rather than later that the average investor is expecting more of the same, but everything that got us here under the surface has changed. So I noticed in that chart too that we're way above the red line right now, right, which was the 20 PE. And the second thing was that that, I think that is that a monthly RSI on the bottom, but it was starting to cross, meaning technically I think there's

a, you know, if you were just trading off of this technicals on the monthlies, you might notice that on that, on the bottom wiggly set of lines, the red, the black line starting to cross over the red. Now it could recover and all this and that, but I was trying to look and see if was there any other instance on here where the black line on top was that far above the red line. It's really only that far above in 2000. Everybody agrees that was a mistake. We way overdid it.

Right? That's right. Now I actually had this here. So this is 2014 until today. Yeah. I didn't do 2000. So okay. So just to put this in perspective, I wanted to look at the difference, how far the market was above the P of 20, okay?

So in COVID, in 2020, you had the shutdown, the market sell off, earnings stopped, and then the flood of money that was printed. So at that point, you were 87% above, which we understand why, because that took place, but it squeezed up to about 18% above where the S&P 500 was Now back in 2007 we were about eight 28 percent guys the one thing that wasn't a stock bubble though. No, it wasn't so for those of you that are listening

I apologize. I can't make these numbers larger. I haven't figured that out yet, and I've tried a thousand times So 29 percent is where we were, but that was kind of that momentum headed in the 2019. But where we are now, we're 39% above in the S&P 500, a price-to-earning ratio here, which is, you know, outside of this short period for the response to all of the printing, you know, the highest that we've seen outside of the year 2000, and technically that's slightly higher than what we saw during the year 2000.

So this is just 2014 until today. So, and you're right, you know, this is the price-momentum oscillator, which it just gives you an indication of trend. Like it's not perfect. There's all kinds of false signals in there, but the signals are really good when you have an overvalued market.

So you can see it did give you some warning before 2000 to 2003, it gave you warning before 2008, and then it gave you some warning before the 2022 pullback. But what I'm noticing more than anything is you're getting weaker momentum in a higher market and this is a lower, assuming that this continues because it doesn't predict the future, it tells you what's taking place right now so that you can have some decision making abilities is

to be risk on or risk off. We're rolling over at a lower level than we were here. So you've got a higher market value with lower momentum, which gives us an indication that if this continues, then we're probably going to see equities pull back relatively substantially. And this valuation here is larger than the valuation difference that we saw at the top of the market. So that's one of the things that I'm concerned about. And it's frustrating because if the government wasn't intervening and ruining our long-term sustainability as a country for short-term gain,

then you could warn investors and the prudent can protect themselves, but they put us into a situation where you have to be prudent, to foresee danger, and hide themselves while the simple pass on and are judged for it. Well, the simple don't know that they're passing on because they're not pursuing prudence anyway whatsoever. So I feel sorry for them because they're putting their faith into all of these sexy theories that Wall Street's putting upon them to line their own pockets. And then you've got leaders in Congress and you've got Trump, you know, the pain of changing and doing the same thing has not become…

I just butchered that, so y'all bear with me while I get my thoughts in. This just came out of nowhere. So, in the ministries that I've worked with and supported that serve people that have addiction, sometimes they'll say people will change when the pain of changing becomes easier than the pain of staying the same So that is parents of kids have bad behavior. We want to exhort pressure in a controlled environment, right To where the pain of changing their behavior is easier than the pain of staying the same We're not there yet, obviously because we didn't't even have any pain on the market sell-off.

I mean, yeah, there were some investors caught off guard, but that wasn't a dramatic amount of pain, but it was apparently enough to go back to doing the same thing. And that's just going to bring a tremendous amount of pain later. And I think it's going to occur before the baby boomer generation reaches the end of their life. And that's horrifically, it's going to have horrific consequences if they don't pull this off to perfection, because the large majority of people are going to have their assets. And the baby boomers are way overweight equities because they're buying based on past performance without the realization

of what has changed under the surface. We just don't know if that's three months from now, six months from now, two years from now, five years from now, or two weeks from now. But there's pain coming at some point in the future because we're doing the same things that led to the inflationary pain that we just had a little bit of a warning. It was a horrific inflation. It's just enough to kind of make everybody grumble a little bit. But on the path that we're headed down I don't see how we don't get out of this without

horrific inflation at some point um that that's going to bring all kinds of misery to the masses Well, this is a basic failure to plan, right? So we were I guess we're planning to fail at some point failure to plan, right? So I guess we're planning to fail at some point. And we know that the fiscal, so when Trump and Besant came in, the first month or so I was like, yeah, this is refreshing because they were talking about stuff that was just common sense, right? Listen, we have a debt problem.

We have a deficit problem. Those are twin joint problems. It's a problem. We got to fix it. They just pivoted and said, we're not fixing that. We're just going to get this magic growth is going to come from somewhere. But there's been no death. Like where's that come from?

Oh, well, all these people are going to invest in our country now. Well, if they're just putting in robotics plants or whatever they're doing, it may or may not. I don't know. The jury's out, but that's a long, slow process. It may or may not work. Right? You know, in the meantime, like, let's say, let's say China discovers and India discover

how to make really high value small modular nuclear reactors. Great, they'll install them. We won't because our Nuclear Regulatory Commission in its entire life since 1973 to today is only authorized two plants, right? It just can't get a million page process, decades, billions of dollars before you even put a shovel in the ground. That's who we are.

If you don't fix that first, we're not getting those, right? And the second thing that you and I've talked about briefly, but I just wanna mention it again, because I gotta keep dropping this ice cube into the punch bowl. We're at peak oil right now in the United States, and we're also licensing LNG export

terminals at a faster pace than we know how we can grow our natural gas production. This is going to create higher energy prices going forward. Not lower. I know Trump really wants $50 oil, but the shale companies are dying on the vine at $60. We can see that. They're stacking rigs, our production's already rolled over, they're all squawking and making the same noises and he doesn't care. He just wants cheap oil for political reasons, makes them look good and

that's what he wants. Fine. But that short term focus, like you're saying, is going to lead to this longer term pain. We're going to have vastly higher oil prices in the future and or insufficient supplies. Yeah. And it's so addressable, but we're not addressing it. So you know, here we are. We're not. Here we are. And the best analogy that I can think of is, is let's think of investors in the markets

right now, like a, like a three year old child. Now they're obviously a lot more sophisticated than that, but just for the purposes of this analogy. And we consider the administration, Congress, everybody is the parents, right? They're supposed to lead us in the right direction. We elect them to be fiduciaries and hide us in the right direction.

But what they're doing is giving that three-year-old child for breakfast, lunch, and dinner, you know, here's some candy, here's some cokes, you know, here are these things that are going to cause all kinds of problems from a long-term standpoint for, you know, for short-term benefit to keep the child, you know, pacified and happy here in the short run and giddy, right? And any parent that's let a kid have too much sugar knows that that only lasts for a short period of time. And then you've got a, you know, crying miserable child later in the day.

But that's akin to what's taking place in the markets right now. And, you know, I thought, and that's the great disappointment that I had in the first Trump administration, is hey, they're going, he's saying he's going to do something that did the same.

And here we go. We heard all these wonderful things, learned from the mistakes of the past, it appeared that he did by bringing in other individuals that weren't so clearly deep state, but now all of a sudden things have changed kind of across the board. I mean, a lot of people in different places that came in

that I was expecting to follow through with these promises that they gave us have either gone silent or completely turned 180 degrees on what they were telling us in the 12 to 24 months prior to the election cycle. So I am clearly an equal opportunity basher as I know you are and and so this is my opportunity to just express ridiculous frustration and Disappointment and what I'm seeing take place. I just need stuff to make sense. This doesn't make any sense to me We already had too much

Deficit right and they just come up with this bill and it's gonna give us more of it not less of it more of it that dotted line We're headed to that dotted line, right? 25 trillion more in debt over the next 10 years. So here's a prediction This is easy to make some time Paul between here and 10 years from now this system breaks People in the world say we don't want us dollars anymore. We don't care send us something else We don't want us dollars and the way we'll experience that is kind of like what we're seeing today. What would you buy with US dollars today? Well, if you have enough of them, there's not that many things. You'd buy treasuries, right? So if you buy treasuries, then that means the

yield goes down because we're buying them. So the price is going up. So the yield is going down. And also the dollar would be maintaining its value. What are we seeing today? We're seeing yields go up so people are selling the treasuries and we're seeing the dollar go down at the same time. This is starting to feel like a walk towards the exit shuffle away from this story. This only makes me want to shuffle away from that story faster. And we've had a near instant upon the realization of the big, beautiful bill going through. Look what's happened to rates. I mean, there's a section of the market out there that says things have changed.

They, you know, bond vigilantes have come out of their cryogenic slumber, and they've entered the market again. And how do they stop that? Does Bascent do the same thing that what Secretary Yellen did by shortening debt? Well, if they shorten instead of issuing financing from a longer term standpoint, they shorten that up. Well, now you've got a vent risk

that's shorter and shorter and shorter, and it's a weaker and weaker foundation. And then, you know, he says, I inherited this, but instead of taking us through the short term pain to correct it, is he going to have to come out and do the same thing that he inherited? And you know, he can justify that in any way that he chooses to. But the reality is, if they're not going to deal with it after promising us, what we do know is if they lose the reins of power, then we're going to go back to just a

greater magnification of what was occurring before. So how do we have this change if they're not, if nobody's willing to take us and lead us through the pain that this we're going to have to endure because the longer this is put off, the greater the pain is going to become. Well, it's very simple to me, Paul. This is an easy prediction. It's not even a prediction. A prediction is, is making a guess about the future that had some uncertainty to it.

This is like saying you've let go of a hammer, Paul. I predict it's going to fall to the ground, right? Here's what's going to happen. Either we change this on our own terms now, which is what I thought we were signing up for with Trump and Basant, or later on, nature does it to us, right? The markets or whatever we want to call that, but it's out of our control. Events all of a sudden say, wow, nobody wants your debt anymore and they're all selling it. Now interest rates are 30, 40% and you have 60% unemployment.

That's where this goes. Either you deal with it or it happens to you. It's like, it's either voluntary pain or involuntary pain. I'd much rather, I'm going to rip the bandaid off kind of guy. Listen, we live beyond our means. We made some dumb decisions. We can blame all the people we want who didn't make the right decisions five ten twenty years ago But here we are and I would prefer for my own children and grandchildren as yet unconceived

I just want to leave behind a better world. This is this is this is basically saying Somebody else is gonna have to take care of this in the future and it's going to really hurt. It's going to be really bad, right? That's irresponsible as far as I'm concerned. It is a moral. It is immoral. It is. And, and unfortunately we find ourselves in that, you know, we've talked about this before. Good times create weak men and women, weak men and women, just to expound on that a little bit more,

cannot overcome their emotion or their desire for short-term gratification, and they lose focus on the sacrifices that need to be made today for the betterment of the future. That's one of the reasons why wealth rarely makes it beyond three generations is because, because of the focus on short-term, you know, the founder builds that wealth. His mission wasn't to get rich.

That was a by-product of offering a good product, surrounding themselves with good people. And then the next generation gets their value out of the nice things they have, you know, and then the next generation is surrounded by people who really like them for the money that they're throwing around, and that weakness leads to the loss of that. I mean, there's all kinds of studies that wealth rarely goes beyond three generations. So good men create good times, good times create weak men and women, weak men and women create hard times.

And as much as we wanna see strength in our leaders right now, what I see is a bunch of weak individuals that are given into their base desires, which is immoral. It's immoral because of the consequences that it will deliver upon future generations. And those future generations will not think kindly of this generation at this time when the consequences of this unfold.

And I'm not so sure that this generation, the baby boomer generation is not going to experience a substantial amount of pain before their life is over, quite frankly. Well said, and you know, humans, organisms, we like the low-hanging fruit, we just want the free lunch, we want all of that. And so instead of running a clean house and a tight ship, our monetary and fiscal authorities have just been spending whatever, printing whatever, but then slamming gold and silver and other commodities because they can, because that makes it look less bad what they're doing or they feel like they can hide sort of the effects of what they're up to.

So I do have a quick gold and silver update. I want to talk about this real quick, because Paul, we didn't have a chance to talk about this yet. This was astonishing to me. You wanna talk about weak men, weak women, doing weak stuff. The European Central Bank is now warning

that gold markets could pose a threat to the Eurozone's financial stability in the event of geopolitical stress due to demand for physical settlement From gold telegraph. All right this I'm gonna laugh about this because what they're saying you're Paul in no uncertain terms is Wouldn't it be terrible if too many people actually bought physical gold that represents a threat to our financial stability It's like well not if you weren't being You know, I have swear words in my head not if you weren't being, you know, I have swear words in my head, not

if you weren't being complete losers about this because gold's a commodity, it's a monetary commodity. If people want more of it, then the price would go up. That's how it's supposed to work. There's no such thing. How can physical demand threaten your money system? That's the stupidest thing I've ever heard, unless, Paul, unless you are dumb enough to allow banks, this is just US commercial banks and savings

associations, have over 500 billion dollars of exposure to gold derivatives. That's not, this is the EU, this is the US, so you figure what whatever they're up to in the EU, probably similar. They've been playing paper games with gold and silver in a price suppression scheme for a really long time in order that their monetary decisions wouldn't look quite so bad. Right? So that's the game they've been playing. And now that the game is up, they're saying, well, we're a little, we, the gold physical, you know where this is going.

They're going to say the gold physical market is a threat to our financial stability we're gonna have to shut it down right instead of doing the right thing was to say gold is merely signaling the extent to which we've been losers and doing making bad decisions and so therefore maybe we should figure out how not to be losers in this story goals just goals an inanimate object. It's just pointing out that they've made bad decisions in the past and I can tell you where this is going. If I'm in Europe, I'm going to find a way to dodge this as soon as I can. Well, you remember Paul Harvey and he would say there was here's the rest of the story.

So I know this isn't the rest of the story, but that's what came to mind. So what I would say, what they really meant to say is the European central bank is warning that gold markets could pose a threat to our monopolistic control over the financial system. That's what it is. That's what they're saying. The canary is going to sing on and, and, and ruin and put a buzzkill on our party over here. Yeah. That's right. All right, well anyway, so that's kind of fun, but as I've mentioned, the US has been playing shenanigans forever and ever.

You wanna see how bad it is? Here's how bad it is, here's how bad it is. So as of today, in the Shanghai gold market, SSGE, China's Shanghai gold market, you can see the top row AG that's silver Silver's $35.68 an ounce in Shanghai Here in the US it just gets slammed every day You know as soon as London opens up at 4 in the morning as of 1020 on the 22nd same day

This is the 22nd. This is 22nd. It's only $33 in the U.S. Wait a minute, $35.68, $33, $2.62 is a big gap. Eagle Forge at EF Bullion on Twitter says, if anyone's wondering why the Friday chart painting slam at a hard rebound looked no further, traders can make $11,250 gross profit per comics contract to ship 350 pounds of silver to Shanghai so you buy one comics contract Put it on a plane ship it to China you make 11 grand Wow Wow you want I think we should go into the export business. What do you think forget the import side? Let's just export stuff silver

No kidding. So you have an a more honest market over there, which is quite frankly brilliant So if you're trying and you understand this endgame and you're thinking from a long-term standpoint That's one way to wrestle funds out of the US for those that want short-term profit, right and And then you have at some point it'll become unobtainium and that's not going to return back to the U.S. It's not going to be affordable to return back to the U.S. That's amazing. I knew it's at some point we'll freak out as a country and go, oh, it's illegal to export so we're all about free trade.

We're all about free trade. We're all about free trade. We're all about free trade. We're all about free trade. We're all about free trade. We're all about free trade. We're all about free trade. We're all about free trade. We're all about free trade. We're all about free trade. We're all about free trade. We're all about free trade. It's not going to be affordable to return back to the U.S. That's amazing. No, but it's at some point we'll freak out as a country and go, oh, it's illegal to exports

that we're all about free trade. No we're not. This is stupid. And what this said, Paul, we allow people, entities, whatever they are, but mostly billion banks, we allow them to come in as long as they're smashing the price of silver down. Nobody looks at them. The CFTC says nothing. TheTC says nothing the SEC says nothing Nobody says nothing as long as they're smashing the price down

And that's what they do because it makes the monetary people look better like the Federal Reserve's like oh if inflation was that bad Gold and silver would be signaling it right and they're not so I guess we're doing okay They're okay with this and then at some point though we run out We run out becomes unobtain him as you said it runs out and the next thing you know they go Who can we blame for this? Hey and for you listeners out there I have to be fair Chris is the first hurt person I ever heard say Unobtain him so I did steal that from you Chris. No. no, I got that from Mike Maloney. Let me be totally clear. Oh, you did? Okay, okay.

That's a Mike Maloney thing. And gold becomes un-a-fortium and silver becomes un-obtainium. Okay, that's good. That's good. But it's just sad. These are deceptive scales, is the Bible talk. Morality hates deceptive scales. Because again, the closer you are to the money printers, the central banks, the greater benefit you have at the expense of the average individual. That's why the middle class is getting wiped out inside the United States.

The wealthy continue to become wealthier because they've got the assets and all of these policies. You know, the justification of trickle down economics has been, there is some truth to that. But when, but at the levels that they've utilized it now, it, it, it's the top one, the top 10% really are sucking up all the assets. And at some point that's unsustainable. We just don't know when it is, but that's why I believe you have the addiction rates in the US, you've got the suicide rates in the US,

you've got the misery in the US. And on top of that, you know, all of these major intellectual institutions that have learned how to gain our addiction process within social media, you know, and you've got kids that are growing up looking at social media and all they see is the perfect representation of somebody's life

while they're living life that's dirty across the board. You know, those brief moments of perfection are the minor parts of life. And they're miserable because they think that everybody else has got it made, and they don't. I mean, that's just the society that we're in right now. And investors are the same way, right? It eats someone's lunch if they don't understand the strategy that—and I'll come back to that in a minute—but the strategy that they're in or why they're doing what they're

doing, and they've thought through it enough to be convicted in their decision-making, that experience of feeling like they're missing out and somebody that they know might not be as bright as they are is having more success than they are in the short run pulls them into making mistakes at the worst time. Because most people don't actually understand the investment strategy they're they're operating under. They just looked in the review mirror at what did the best well I think I'll do that because I'd assume it's going to continue going forward and and the

investment world is right with you know strategies that are the number one and then they underperform for quite some time because each strategy has different sets of strengths and weaknesses, and you have to understand how it applies to you individually. You do. Well, I'm a little concerned

that what seemed like a decent plan from the incoming Trump administration has met with some reality. It's kind of like when Elon Musk came in and started doing the Doge stuff, I found nothing objectionable to that at all. I don't know why anybody did, but some people got really inflamed over the idea that we were going to expose areas where the United States government was wasting taxpayer money. I think that's like unobjectionable. Go for it and do it. And he did that. And there was enough pushback that I think he's now thrown in the towel and walked off and I don't think anything really happened to be honest.

Maybe a few billion here or there. It was an impossible task. Well, if that's the case, then that means, and we just saw them throwing in the towel, we're going to try and grow the economy, that old bon mot, right? Which by the way, hasn't worked in over 20 years. We haven't had high growth for lots of reasons. It's because we have too much debt in the system, I believe, is a key way of framing and understanding that.

Too much debt, the more debt you have, adding more debt, just somehow your growth just sort of flops over. Right? So that's where we are. Well, they've just said, not on our watch. We're just going to keep the debt gravy train going. Okay. So, looking at that, Paul, I just don't, the conclusion to me is pretty inescapable. There's a crisis.

I don't know if it's tonight or five years from now, but it comes. And the Fed has to double or triple its balance sheet again. We find that where now people are struggling at $100,000 of income in most cities, right, they're going to find after the Fed prints again, now you're struggling at $200,000 of income, which means that, you know, the bottom 70% are struggling, eventually it will be the bottom 90% are struggling, right? That's just the path we're on without any change. And as a consequence of that, I think people have to start

thinking very creatively about what that future looks like and how they're going to live into it. Because I'd rather, no, don't check out and take fentanyl. And a lot of people are making that decision. But there are other ways around this. But it begins with financial freedom. That's why I do what I do, because I care a lot. People who had financial freedom had the freedom to either say their choice i'm going to take that covid

shot or i'm not going to but people who were forced who didn't have the financial freedom they were going to be mandated out of a job they were coerced by my measure into doing something that some of them didn't want to do and some of them now regret that. Financial freedom is the foundation of a happy life. Yes, it is. And I know that's what you help people do too is plot the, you got to have a plan. I think you need it. You really need to have a plan now. You've got to have a plan and, and every now and then I hear something that just explains things so clearly. So I got to credit to what I'm gonna talk about here for investors, because I wanna bring this down to what can you do, okay?

Right. Because unfortunately, you know, you and I spend a lot of time talking about these things and we all, we each have strategies and how we're implementing it. Cause we're taking each step with fear and trembling, okay? But the average person listening to it, this can become overwhelming. So, so for those of you out there, I've been concerned about these things going back to

really 2006, 2007, when I started opening up to this, Chris, you were ahead of that curve because I found some articles that you wrote, trying to find information to explain the clients what I could see, but didn't quite understand it enough at the time to be able to teach it. Because they say when you understand something very well, you're in a position where you can teach it. So I was borrowing from your work, which was great, thank you. That helped to sidestep the 2008 crisis. So there's a guy by the name of Victor Higani, and I wasn't really familiar with him, but he shared him. So Grant Williams was having an interview with him

and was sharing his historical. That guy and his family went through all kinds of horrible things. So he made a comment, he's like, and I've said this before, but it's been a long time that I've stated it not this clearly. So I got to steal this from him.

The best investment approach is one that you can stick with. Okay. So most investors are doing passive investing because that's what everybody else is doing, right? They're doing it because they look back in the, through a period of time where there was maximum benefit to asset prices during minimal inflation periods of time. So these investors are looking back through history and they're going, hey, this is what I should have done, or this is it had I done this, this is where I would be. The worst thing about being investor is you don't know the future. You can only make prudent decisions and you have to have a

strategy that helps you know how to make decisions when something changes. don't know the future. You can only make prudent decisions and you have to have a strategy that helps you know how to make decisions when something changes. I call them decision points. You know, you can look at something, you know that we're on that path, but you don't necessarily act in some cases until you cross a decision point where the weight of information tells you we're at the point of no return here. So, you know, the problem being if you're a passive investor and you choose that and you understand, okay, I have built resiliency around my plan. If the stock market goes down 50 or 60%, then I have some extra diversification in place to protect myself.

But here's the thing, if you're diversified, it means that you're gonna have one asset class that is gonna perform different in a certain environment versus another. So you're always gonna underperform the index, right? So if you got 30% of your portfolio laid out to cover 10 years worth of your income, well, your whole portfolio is gonna underperform

some arbitrary index. If you, you know, so what I encourage investors, one thing that we do is we have a strategy. I know the strengths of it, I know the weaknesses of it. I talk clients through the strengths and weaknesses of it. What it can do, what it can't do. 999 out of a thousand people that I run into don't understand the strengths and weaknesses of their strategy. They're just doing it because that's what somebody

told them to do. And they haven't thought about it. They're concerned about these things because they're waking up to it, but they don't know how. Well, do I just go out and buy commodities right now? Well, if you did that in 2014, you've gone nowhere till 2025 at this point. There's been periods where it started to take off. Gold's really about the only commodity in general that's had really good returns over that period of time. So what I encourage investors out there, now, before it's too late, ask questions of who you're working with.

What's my strategy going to do if we have a currency collapse? Can they have that conversation with you? If they can't, why not? Do they not, have they not thought about it? Do they not have some adaptation or plan B, C, or D in place if things start to unfold? Because if you've spent some time thinking about those, if you're two steps ahead of the average person, if a bear's coming at you, then you survive a little bit better. If you're closer to the exit and ready,

and you're two steps ahead of the mass when fire breaks out in the building, you know, that's one of the things in free speech. You know, you can have some free speech, but you can't yell fire, fire in a building, you know, that's one of the things in free speech, you know, you can have free speech, but you can't yell fire, fire in a building without having consequences because people run out, get trampled and somebody dies. So you know, you've got to understand the strategy that you're in. So the best investment approach, examine the ones that are out there. Think about it so that you understand

the investment approach and the strengths and weaknesses so that you can stick with it. Because I'll tell you what I've seen time and time again. Somebody's an investor, they own the markets, they look back, they started working in the year 2000. Stock market goes down, they've got their job, they're fine, they don't worry about it, the dollar cost average in, market gets up in 2007, 2008 comes apart,

they kept their job. So now they look back and they're telling themselves, hey, I'm a long-term investor, I can handle a 50% decline. Well, I can tell you this in working 28 years in this industry, specifically with pre-retirees and retirees, it is a completely different emotional state. If you're 72, you've been retired for seven years or however long or two years even at that point. And you're wondering how you had time to work. Okay, you're like you're

doing so many things in retirement, you're like, I hear this consistently, Paul, I don't know how I had time to work. Okay. And then your investment portfolio goes down 40%. And all you can look at is the exact opposite. The media is market meltdown. It's all negative. All you see everywhere you turn is how hard it is. You're watching people lose their homes.

You're, you're hearing stories of people that lost their entire investments that are there. homes, you're hearing stories of people that lost their entire investments that are there. And you start thinking, well, what, what if I have to go back to work? I don't want to go back to work. I'm enjoying my retirement. And in 2008, I had too many people that came in, I had some people that came in, I'm like, look, I'll work with you, but you're not selling out here at the bottom. They're like, but, but but you've been

defensive. Well, yeah, we've been defensive, but now is the time to start buying. It's not the time to sell out. You've got to go through the pain of the weakness of this buy and hold approach. And later we can add a risk management overlay. So I want to encourage you investors out there, if you've been thinking you're on the fence, start asking questions. You know, what would happen to my portfolio on a currency collapse? What's going to happen to my bond portfolio if interest rates on the 10-year go to 10%? Okay, I'm not saying that's going to happen, but you need to consider that outcome so that you can at least mentally prepare in stressed-extra situations. So I can tell you you what we do is not perfect.

Okay, there's times where we're gonna be, we're gonna be cautious because the tools are saying that it's cautious. There's nothing in the investment world that's perfect in its outcome, but there are strategies that you can implement that can increase your probability of success far greater than a coin toss and at least puts you in a position to where you don't get wiped out Look for most people missed opportunity hurts their feelings dramatically But that's not what causes you to be unsuccessful if it's just missed opportunity for a short period of time It's a different story if you've been sitting in Treasury since 2013

You know 13 because 2008 scared you If this continues for another 10 years, you're losing purchasing power because of inflation. But there are periods of time where sitting in treasuries is not a bad thing. Now, maybe with rates that are taking place, but we haven't crossed that decision point yet, which has got a lot of warning. So I encourage each of you out there, if you're not sure you can't find somebody that can answer those questions, give us a call. You know, there's no obligation. We're not high pressure. But I can at least have those conversations with you and examine your situation and show you in the context of history. What would the Great Depression do? Would it cause you to be unsuccessful?

Are you okay with that? You know, or would you rather stretch for as much money as you can possibly make, at least make that decision consciously and understand what failure means? So I tell people on a pretty consistent basis, this is an extreme example. It doesn't matter how successful a strategy is, if failure is too costly to bear. So let's paint this situation Chris. So could you imagine you offer me a million, Chris wouldn't do this so I'm going to use him as an analogy, you offer me a million dollars to play Russian roulette. Okay so there's six bullet you know six holes in that chamber so I've got a one-six chance. This is a horrible analogy guys but but

it's a good one because it will imprint. I pull that trigger. It doesn't go off. I make a million dollars. Okay. Well, let's say I do that 35 times in a row. Well, guess what? In the investment world, I'm going to be on CNBC and I'm going to have fully convinced myself that I have figured out how to play Russian rule out without any of the consequences. But we all know in that very graphic analogy, the moment that that strategy fails, what good does it do? You've accumulated all this money that you're never gonna get a chance to use. So that's an extreme example,

but you have to understand what failure in your strategy means. If failure means that all of this doesn't pan out and the markets go down 90%, you know, it looked good for German investors until they got an honest market, but as soon as the war was over and they brought the honest market back, 90% decline in one moment. Those investors who had considered that path and were in a position where German investors had moved some of their assets into international investments or outside Japanese investors after 1989.

Their market went down for however many years, 35 years before it got back to even or 42, whatever the number is. Had they pushed some of their assets outside because they had tools to tell them when to do that, they were far more successful than an average individual. So make sure you know what failure to your strategy means. Is that a 90% decline or does it mean you make 4% and your neighbor makes 15? There's emotional pain in one, but there's a whole lot more, lot more severe and life-changing emotional pain if failure means you're down 80 or 90 percent. And don't convince

yourself that that will never happen because if you're sitting there saying that'll never happen, there's no way that they're gonna let the markets go down that much. Okay? Markets may not go down that much, but your purchasing power might if you're not positioned correctly, if it's a hyperinflationary event, because other assets would protect you a little bit better. So, I encourage people to do that. That's what I'm concerned about where we are right now, because we're looking at a situation to where for the first time since the great crisis back in 2008, everything under the

surface has changed. Now, does that mean that the markets react differently in the next 12 months? I don't have a clue because we're in completely uncharted territories. But at least we have a set of tools that will tell us to make an adaptation and we can do that confidently. If you don't have that, I encourage you,

whether it's me or somebody else, go find somebody that can help you implement an investment strategy that as Victor Higani says, one that you can stick with. Because otherwise, if you haven't considered worst-case scenario and failure, then your emotion is going to take over to the point that you're going to do what you swore you would never do. And if you don't do it, you're gonna have a lot of sleepless nights fighting with that emotion in the short run to stay the course. And at some point, every strategy is going to require you to have some faith in what the potential outcome will be.

Because all this money printing in the short term without inflation has made it sound like it's an easy process. It's easy to make money. It's hard to keep it. And if you don't believe me, those of you that are out there that have been in business, you know it's easy to make money. It's hard to keep it in the long term. Right here recently, it's been easy to make money if you were simple and not prudent, but it's going to be really hard to keep it if you continue you were simple and not prudent but it's gonna be really hard to keep it if you continue to be simple and you see everybody that's the passion and the focus Paul brings to the subject and thank you for those closing

words Paul I'm gonna have to leave it there because of well I'm gonna go I'm bowling day with my son and I'm, I gotta get off. Yeah. So for everybody who is listening, if you want to talk with Paul and or his team, just give a quick visit to peak financial investing.com fill out a very simple form as many people have been doing lately. And somebody will get back to you from Paul's office within 48 business hours. Again, peak financial investing.com Paul. Thanks so much for your time today. It's my honor. Chris, always enjoy the conversation as I look forward to the next.