Peak Prosperity - The Tariffs Are Juicing Recession Concerns

Episode Date: April 4, 2025

Gold’s big moves of late were confirmed as the real thing in the post Trump Tariff tantrum when gold barely budged in price by day’s end while stocks got hammered. That is, in a word, unusual.Click Here for Peak Financial InvestingAlso Mentioned:Interview with Adam RozencwajgBreaking the Frame

Nothing in this program should be considered investment advice. It is for educational purposes only Please hit pause and read this disclaimer in full If there's a bank run you better be the first to take your money out of the bank because if you're the last there's nothing left for you The following is the audio version of a video released at peak prosperity calm Visit peak prosperity calm to watch the video and financial information and make it as digestible as possible. Lots going on in the world so welcome to this week. It looks like it's April 2nd at the time of this recording so I hope you had a great April Fool's

Day yesterday. We're safely past that today so no jokes today. Paul, good to see you. Good to see you as well Chris. Yeah, so Paul of Kiker wealth management here to discuss the events with us. Where do we start Paul? I you know me I'm a gold bug as they say write that derisive term, but I've liked gold for a long time and my first major purchase of gold was in 2001 and My first major purchase of gold was in 2001. And you know, we had to go through some volatility and some ups and downs and this is in that. But just yesterday, I calculated what my compounded annual return was. And from then to as of yesterday, and my compounded annual return on that first block I bought was 10.25%, handily beating the S&P, including dividend

reinvestment. And that's a little surprising, right? 24 years and gold turns out to have been a better investment. But I have a, I have a theory. I think that was actually probably the true rate of inflation over that period of time, more or less. I would believe, I would say that's the case. I mean, I haven't gone back and looked at the numbers on that.

But that makes sense. And it feels right, certainly from the cost of living compared from today compared to that. Doesn't it? I mean, houses, cars, everything you can't even like you wouldn't recognize a 2001 price if you saw it. Yeah. No, let me tell you another perspective of that.

So I was with corporate. And from 2000, I didn't go independent until 2004 And when I first entered the investment industry, I ran into some people that had some some gold You know and and they're advising and you're having to rely on what Wall Street's telling you with the corporate firm I was with and they're saying look if you want to hold on to a dead asset You know, I had meetings where I brought people in, they're like, hold on to gold. That's just a relic, get rid of it. You need to sell gold, buy the NASDAQ, buy all this,

right before everything came apart. So that was my experience during that time when you started buying. It wasn't until 2004 when I was independent when I realized the power of gold. But that's what Wall Street was just berating people and shaming them and to getting, oh, look at the past 20 years, if you'd have been here or there. So it's amazing that it's that the return is that great, especially as patient as you had to

have been to hold it for certain periods of time. But patience, especially of investing, rewards those who embrace it. Yeah, and I'm going to show a chart of that in just a second. Today, Paul, on my list, gold, oil, commodities, got a little bit of stuff to talk about in the markets, whatever's on your side, obviously, too. But this is that period we're talking about here, gold starting up, up and away. So this is 2001. It looks like I bought it at pretty much the low got lucky I'd rather be lucky than good. So that volatility you talked about it went way up. I thought that's it We're good. We're off the rate and then it just got smushed. That was a painful period

That was one two, three, four five years then it bounced for a little while came up here And then this is the handle of this giant cup and handle formation. There was a little push down here in 2022, but then it came up and once it broke out of that cup handle on the cup, that's off to the races. That's a 50% plus increase. Is that a typical thing? I mean, is that just a cup and handle breakout that took decades? Or or something else happening? Well, historically, and I can't remember the formula on the cup and

handle calculation for price target, I'd have to go back and look at it. But I do say I can say this, the longer the consolidation, the longer with a multi-year cup and handle like that, the more the higher the price and the greater magnitude of the move that you get on that breakout, which is exactly what we're seeing here, which is clear confirmation that the path of least resistance is higher for gold. Well, and I think something's, always dangerous words,

but I think something is different, right? Gold was the anti-dollar that entire experience until 2022. Paul, from my entire experience, if you wanted to know what was going on with gold, you could look at one of two charts and get pretty close. The dollar, and it was the anti-dollar, right? Dollars going up, gold's going down, vice versa. Or you could look at negative real interest rates inverted. So as negative real interest rates are going this way goals going the other way and it was a perfect chart Until 2022 as we've talked about and then something broke and it has it hasn't been behaving like this whole period back here

Formed the cup and handle but starting right here in 2022 something changed big time and then we see this so They tell us it's tariffs its tariffs. I think tariffs worked for about a week. That's not a good explanation anymore. It's something else going on. What's what do you see in here? No, I really don't understand what's going on under the surface to cause this. It's big money. Now, tariffs. Yeah, kind of you think about it for a couple of days and maybe that's the case but not necessarily, that doesn't make sense and that's kind of gone away. Then you think about Basel III and the news that, I can't remember what is the date, it's

first of April, is it? Or May, somewhere around there that if the banks hold the physical gold themselves, they have a set price on it. So I thought that was it for a period of time. And then you had all this massive purchasing of taking physical delivery at the end of March that's out there, that's the talk on the market. So that's, you know, I don't know. My concern is the only thing that I can go back to is in 2007 you had this massive move in gold prices before 2008. So my question is, okay, it might be this, it might be that, but those don't fully answer the question, is this just big institutions preparing for some type of credit financial crisis right around the

corner? That's the only thing that makes sense to me right now at this point, especially with, hey, I don't trust somebody else holding it. I want physical possession of it myself. So speak, speaking of which, this was such shocking news day before yesterday it broke it and there was some error in the how it was reported. And then the next morning got our hands on some better stuff I made lots of phone calls I talked with people who know a lot more about this than I do which is how I like to roll But this is a Chicago Mercantile Exchange CME report and it came out and

This is after it had settled and there's two things you want to look at open interest in delivery. So they'd accidentally There's two things you want to look at open interest in delivery, so they'd accidentally fat-fingered, they'd said put a hundred and six thousand contracts in April, which wasn't right. So they backed off about eighty seven thousand of those and then slid this thirty four thousand eight hundred and sixty five lots of delivery. Those each are a hundred ounces in each one of those lots. So just put two zeros on the end of that number. And by the way, Paul, when you close one of these out when you take

delivery of a gold contract that's physical gold and When you take delivery if you're the short coughing up the gold and I'm the long taking delivery That's two contracts that get wiped So because they both go away so this eighty seven thousand well That's about seventy thousand of those contracts we can explain just because somebody stood up, so I ran the math. It turns out that somebody all of a sudden decided that what they wanted most, more than $11 billion in cash, because when you take delivery, it's 100%.

There's no margin. 100% cash on the barrel. That's how it works. Whether you're buying oil, cotton, copper, gold. Somebody ponied up Paul and said, I don't want this 11 billion. I'd rather have gold in one day. One day. I'm pretty sure that's not me and my neighbor up the street.

You know, that's this is like this. This was big deal. That's why I put out so much for my the subscribers at peak prosperity about this because like this is like you see my headline like oh hey I think it's happening Paul this is what it looks like when big money says I want gold that's huge you would consider a purchase that large at that time is a panic purchase I would I. I mean, either that or it's somebody legging in who's got a lot of cash.

A lot of cash being laid down, that's for sure. Yeah. Well, I've never seen a signal like that. Like I said, I've been watching this market like a hawk for decades. That you have. It's a big deal. And you don't miss much.

I don't know that you miss anything with enough time to look at it. So that's huge. That's it is. That's only a few individuals that could make or institutions that can make that that large of a move or yeah, or sovereign entities governments. Is it the Treasury needing to top off Fort Knox because dude, where's my audit? Yo, right. People are asking, right? It could be. It could be the Treasury saying we need monetary gold. We need non-monetary gold for other reasons because monetary gold normally wouldn't go through

that. You wouldn't see it. It just comes in and by a different method, usually an aircraft carrier, I mean, aircraft of some kind, the carrier system different method, usually an aircraft carrier, I mean, aircraft of some kind, the carrier system comes in, not an aircraft carrier, but it comes in and you don't report it, it just goes to the Fed, right? In Liberty Street in New York. So it could be that it could be somebody in Europe saying I'd rather have gold in the US than in Europe. That's a good point. For some reason.

I would rather hold it in the US than Europe right now if I had, if I wasn't already here. Right. So it could be that. We don't know. And as I'm fond of saying, this is one of the most opaque markets. It's very hard to get good data about who owns what and where it's going. So. opaque markets is very hard to get good data about who owns what and where it's going. So at what point do the shorts start getting just absolutely train wrecked at this point with all this physical delivery taking place at some point would happen. Yeah, because well, look, this is just this is astonishing. So we had this huge surge of gold into the US for COVID.

And then it started to sort of wobble down how much was held at comics These are the three big comics volts But look at this this spike right here something more extreme than kovat has just happened and we can't call that tariffs the tariffs are silly anyway in this context Because we're not gonna not have trading in gold because there's a tariff like dude your your JP Morgan. What do you care? You're like, yeah, we got your gold is in London You know who cares but but so over 35 million ounces

But notice like three and a half million ounces just left. So like 10% of that's gone It's pretty amazing That's gone. It's pretty amazing. That is amazing. I was gonna say, did that surge that happened during COVID, was it right before COVID or was it in the midst of COVID? Was it right before the lockdowns? Because I'm just asking the question

because I couldn't see the exact start date on that. No, it's right around March. It's right around the time of the lockdowns starting here. So there was no front running the lockdowns in that chart. Apparently. You'd have to zoom in even more to see. What were the lockdowns? March 20th? I think it was around March 20th. Correct. Yeah. The other part of the story though is that the Germans are They're like we want our gold back from the USA immediately They're all unhappy with us now. They're very mad. So they want their gold back

They have about 1200 tons here in held at the Fed because it's monetary gold. It's not it's not this This is this is non monetary gold there. They want their monetary gold back, but that's a big deal right there So you can just feel there's all this movement and we want it. Where is it? It's just like Normally, you don't see those gyrations unless something's up and it's not tariffs yeah, and unless there's just a complete lack of trust within the system and And people are saying, hey, maybe Doge is revealed with what it has brought to light for the American people that everybody distrusts everybody. It's like, what is it you say?

10 tenths of the law is physical possession that you had it. But they're like, hey, I have questions about this. So let's bring it in here now, because if there's a bank run, you better be the first to take your money out of the bank because if you're the last there's nothing left for you. Not even last. If you're depending upon how much is there 25% of the way into it you may not get your money. Yeah so I think this is related to a great reset of some kind

it's either a monetary reset or there's some sort of a bell that goes off internationally and then you either have what you have inside the borders of your country or you don't. And or this is this is kind of the stuff we're talking about, Paul. This is what this is how this look, the raccoons of Wall Street, they can't help themselves, right? They always front run everything. They care about making money. That's it, right?

So this is the kind of behavior you see where you're like, look, I don't know what's happening, but I don't need to know. I just need to know that the people who do know are doing this, right? Just trade along with them and have at it. Right. And that's why money flows are so important. What we're seeing in money flows is there's movement toward commodities as well. And in a manner that tells us that this may be a

sustained trend from this point forward, which has shifted the targets of several of our portfolios to overweight commodities at this point. Now we haven't fully allocated to them. It takes time. It's a dimmer switch. You know, it's not going to be instantaneous in most cases. Gold has been telling us for a while, which is the reason why we've had exposure to gold in the portfolios. So full disclosure, I like gold. We own it in our portfolios. I own it personally. But it's a big shift to commodities. So if this moves further than just metals into commodities, that tells us something else may be coming. In fact, to your thesis last week that they're going to have to print at some point, or there's

some type of reset, collapse of the fiat system. I'm not necessarily saying that's going to happen now, but lower dollar, what I'm curious to see is if the Trump administration actually wants a lower dollar, if we get that lower dollar, is that going to supercharge the price of gold? Because gold's been going up with a strong dollar. Gold's been going up with higher interest rates. So if you get lower interest rates and lower dollar, will that supercharge on the other side?

I would anticipate that it does, but we'll have to wait and see what happens. You know what? Gold and silver are my top choices to protect my wealth against inflation and economic instability. Now, with all the monetary debasement and all these geopolitical risks going on, hedging your wealth has never been more important. I recommend that everybody own some gold and silver, physical, in your hot little hands. But what if you want to hold it elsewhere? Goldcore is an excellent choice and will rapidly and securely deliver physical gold and silver to your doorstep. But Goldcore also lets you buy and store your gold and silver in high security vaults in

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Again, all with fully segregated and secure storage. Take control of your financial future today with Goldcore, where investing in precious metals has never been easier, more secure, or more transparent. Remember, Peak Prosperity followers get six months of free storage. So sign up now at peak.fan slash goldcore to secure your six months of free storage. Again, that's peak.fan slash goldcore. So one of the things I've been waiting for, Paul, is this whole idea of what happens when big money starts to move into something,

like commodities? And you and I both know that's what we would call a very small doorway, right? For instance, I ran the numbers back at peak for everybody yesterday, which is to say, oh, what if here's the question, Paul, what if today the top 10% of families in terms of wealth, right, and mostly they hold financial assets, what if they wanted to have a 5% allocation to gold, assuming it's zero? How much money is that? And today that number is somewhere between $5.5 and $6 trillion. Oh, that's a tremendous amount.

Yeah. Well, there's only about 120 million ounces of non-monetary gold in the US, right? So we're probably not going to get our hands on the stuff at Fort Knox to trade with each other because we're a family that wants some. And so the question is, well, what happens if they started chasing that? Like, if you have 5% allocation, by the way, I would consider to be very sedate, given all things that we're looking at. Very reasonable. Merrill Lynch, not mine,

but they made an analysis a while ago that said 20% was actually the correct weighting across all of history. So whatever, but let's say it's 5%. The total value of the non-monetary gold in the United States right now is about 1.2 trillion. So how do you squeeze five to six trillion through a $1.2 trillion doorway? You're the finance guy. How's that work? That's a lot of pressure.

That's a pressure washer versus a water hose. That's a lot higher prices. And if they start moving in that direction, typically pensions will rebalance their portfolios after a three-year look back. So then you get pensions to start moving in that direction, typically pensions will rebalance their portfolios after a three-year look back. So then if you get pensions to start adding to that and foundations and the average retail investor, that would generate one unbelievable bull market in the price of anything surrounding gold.

Yeah. I was talking about what happens if whales if whales start moving in this David Bateman He made his money in Bitcoin. So he's down at San Juan, Puerto Rico and he's like, oh hey and listen So he's not maybe your average wealthy person because he's already like alert You know alert to the idea that that there's better money out there besides dollars, obviously But he said here are the reasons I invested close to a billion dollars in precious metals over the past six months, including the purchase of 1.5%

of the annual global silver supply. So 12.69 million ounces. And for the curious, that's what it looks like when it shows up, when they have to ship it. Those are thousand ounce silver bars, these things. Yeah, you can see better. I'm jealous, okay, no lie. No lie. David's crushing it. Right. But he says, Hey, maybe it's the global monetary systems about to collapse.

He mentions the great reset, maybe the Basel end game, which you mentioned. He talks about the greatest credit bubble in history, maybe 300 trillion of which 100 trillion of that's in the US. Right? Maybe that pops. Maybe there's no way the U.S. can refinance 28 trillion in maturing public treasuries over the next four years without obscene printing. Trump tariffs, you know, who knows? Maybe that hastens things along. Gold and silver only meaningful life raft. And by the way, really weird for a for a Bitcoin guy, but look what he says here. Crypto is a Psyop, very odd. Anyway, he's lost faith. He's decided gold and silver are the way to go.

He looks like he went kind of all in or largely in. And so I guess what we're left with is what happens, and this is coming, what happens when the top 10% of families decide they need some sort of percentage allocation? Prices are substantially higher, substantially. 10% of families decide they need some sort of percentage allocation. Prices are substantially higher, substantially. It's just supply and demand.

And that's what moves things. I mean, think about all the money that was printed that went into housing and anything around housing during the COVID area. And it's priced out the average individual from homes unless you already own those assets. I think that's fascinating that he said that crypto is a Psyop, because you and I have had a lot of conversations. We had unbelievable conversations at the annual summit, most recently talking about crypto and what to do with it.

And if it is a Psyop, what's that Psyop for? Is that a distraction so that investors are chasing the cryptocurrencies with the expectation to protect themselves from the inflation? Well, it allows the real money to accumulate metals over that period of time, because if all this money was chasing—that's going into crypto—was chasing metals, prices would be substantially higher than where they are now. Now, I don't know the answer to that. That's just a thought that came to mind if the crypto's a Psyop.

If it's a Psyop, it is something to misdirect the attention of the money that people have. And if its purpose is to redirect it away from metals, then that would do its job to allow prices to stay low and rising slow enough to where some of your big institutions could average in because they're used to selling their positions and stocks over months.

It takes time for them to get out. Most, you know, if you're dealing in 100 million or less, you can move very quickly in most positions if there's enough of a market cap out there. But if you're dealing in billions, then it takes time to get out of those positions. It takes time to get into those positions. So that's quite fascinating. You said that it was a stop and he and he was an original Bitcoin guy, right?

Or crypto guy, as I understand it. Yeah, I don't know his total history, but it's just some guy on Twitter X. So who knows? Right. But but I'm not vouching for that, his, any of it. I'm just saying, I've been waiting for something like that. And so it was probably four or five months ago,

Mike Maloney said that they'd had not one but two family offices show up with nine figure transactions as well. So big money's been moving. And when we see 11 billion go out the door on one notice day for the April contract out of CME. So quick story. I was talking with a family office kind of guy, British accent, very refined,

way outside of my pay grade. And we're talking gold, because that's my favorite thing years ago. And so I sort of Naively mentioned. Oh, yeah, you know, you you know, you could just stand for delivery at comics and get a lot of gold and he scoffed like No, mate you go to London for the OTC market. It's quiet. I need tonnage. I can get it right. It was all this very proper Like oh, yeah, yeah yeah of course you'd go there. So what if the London what if London's out of gold. That's been part of this story

is it's been hemorrhaging leaving London like it's on fire. What if those refined people who need big amounts. That's kind of a normal sort of a thing they might do by 11 billion dollars worth but it used to happen in London. It just had to happen here now where we see it because now we see It and it raises eyebrows, but in London you could get that got nobody had to know like nobody knew Saudi Arabia could buy however much they wanted didn't make the papers nobody talked about it That's how it was supposed to go down. What if what if London's out? For now that's an interesting theory to consider because if

that would tell us a lot now, now you can't hide it if that's the case. You can't hide those purchases. Maybe that's what we're starting to see. It is quite the mystery, isn't it? The mystery to me is the why. Like I'm used to in the market six months later finding out the why of price movements that occur because we know big money knows something ahead of the average individual because they're really thinking. Big money's not paying attention to what their brother-in-law's telling them they're doing right now.

They're not paying attention to what the taxi cab driver's telling them. Matter of fact, typically, and I'm not saying, you know, I'm just talking general individuals talking about it. I have met a couple of taxi cab drivers that were unbelievable traders. So anyway, you know, what if, what if that's what's taking place is, is we're seeing it now. That's fascinating. Well, and, and, and, and speaking of like the, the dichotomy that sort of like, what,

what is the market telling us through pricing, I've been talking about this for a while. For a long time, the rest of the world buys gold, the US sells gold, same for silver. They buy it, we sell it. This is interesting. So this just came up on Zero Hedge. Here we're looking through the end of March.

Let me get my laser pointer back up. This is March 26 here, 27, 28, and that's the weekend. So then it goes to the 31st, the 1st, the 2nd. And you can see here that every single time the early Asian hours open up, gold has a nice burst. It's a nice burst, a burst, a burst, a burst. They just keep buying it, but as much as they can, we've been selling it here in London and New York.

And I think that game is over. That was a shenanigan we pulled for a long time. We did it because we needed to make the dollar, by extension U.S. debt, look more attractive. I get it. It was a very interesting program they had to run, but it had a pantry problem, Paul. Eventually you run out of food in the pantry, you know?

And then what do you do? This would be consistent with that, watching the rest of the world buy it and not being able to really slam it like we used to. I've seen a lot of these slams come along and they don't last. There was a big one yesterday and it lasted like an hour. Just went completely away.

I saw that slam yesterday, cause I remember thinking, okay, I've got a little bit here to average into some positions that we're working into and it was gone. Like that opportunity was gone fast. So that's different than what we've seen for quite some time,

because they were very successful after the 2012 price pullback. Every time it would raise its head, you could break the back of that momentum and prices would go sideways to down for a period of time. Not anymore. So that's different, a little different? Yeah, it's getting over, really start to follow through yet.

I mean, it's holding up well, but I'm curious, it's not gonna be, I mean, just an anticipation that it won't be long, and I say won't be long, six, 12, 24 months, six days, six weeks, I don't know. Before we probably start to see similar price action in silver, especially with, you know, big purchases, hypothetic, assuming that that was an honest purchase

with individuals moving in that direction, especially because of its manufacturing and build industrial value as well. So it can be used economically as well as long-term hold and protection of purchasing power. Yeah, silver is going to have to play some catch up, a big serious catch up. A lot.

I think as of yesterday, the ratio is 92 to 1. So 1 ounce of gold will get you 92 ounces of silver. That's an obscene ratio. So yeah, that could change out. Now so anyway, hey, everybody, keep your eye on gold and silver. It's telling us it's sending a signal. And I think we all should pay attention to it. Paul, the recent volatility in the stock market, I've circled it in blue.

This is on a long term chart, obviously monthly goes back a long time. But that's that's what we're talking about is is just a very tiny little bump there. After that big long run up from whatever it was that happened and at the end of October 2023, which is back here. This is, this is this whole burst. I have my suspicions about it, but here we are. It's really not much to write home about yet, is it? No, it's really not. And technically we've not done a tremendous amount of damage, at least as of yet. It's 358 market will close. I guess we'll hear the liberation day tariff announcements after the close.

But that's just a correction after a good run at this point. And technically, we've held some trend lines, we've held some support lines so far. Now, there's been enough damage under the surface to shift us to a very cautious stance. But I think the pain surprise here would be a rally before the worst of it that we see later. But yeah, I mean, that's minimal. But the sentiment out there, absolutely end of the world. You would think that we're at the bottom of 2008 with most of the sentiment indicators that you look at. I mean, some of the readings are just as severe as they were at the bottom in March of 2009, is how strong the bearish outlook is from some individuals.

Now, a lot of that's politically more—one side politically is a lot more bearish. They think Trump's going to be the end of the world. But very minimal. And if people are this bearish over just what is historically a normal pullback correction in the market, where are they going to be? Do jump off of buildings if we actually get a bear market that brings us back to normal valuations? I hope not.

Hopefully they're prepared for it. Well, I'm still struggling to treat the bullish case. So the bullish case such as I have right now, Paul, is really resting on one thing, which is the Fed's gonna print more money. That's it. I mean, I, otherwise, I mean, I have to look at things like, well, corporate profits, are they gonna, they're already super stretched on a percentage basis of overall GDP. So do they go higher?

If so, what's the driving force for that? I look at AI, I see that as hugely deflationary, not expansionary. Lot of companies are gonna be able to do things more efficiently, maybe that drives profits, but lot fewer people have jobs. So, as you and I know, the credit markets drive everything, and so if those people are earning less or out of work

or getting universal basic income or whatever the story is, however they get taken care of, that's deflationary because they're not going to be out there buying F-150s off the lot and brand new bass boats and big houses, right, and all that. So the debt that normally would accompany those purchases, that's the fuel for the system. So I see AI as not being an engine of growth. I actually see it as an engine of not growth of debt markets.

Employment destruction, actually. Yeah. Unless we figure out something else to do with people. Civilian Conservation Corps, you know, sweeping park paths. I don't know. Something like that. But, but then, you know, we've got our trade balance with now that's going to get crazy for a while because all of our trade relationships are about to get upset, reset, you know? So where's, where's the, where's the bowl? Where's the bowl in this story? So I can't build a bowl case where we are right now. I just, I'm having a hard time doing it and I don't like that because I like to

be able to lay out, okay, here's the bear case, here's the bull case, and which way are we tilted like the scales of justice, because it takes our emotions out of it. I can build I can build the argument. Let's, let's just hypothetically talk this through. This is just a theoretical thought. And Charlie McElligot, I always call, I want to call him Charlie McElligot, but it's McElligot with I want to call him Charlie McElliet, but it's McElligot, with Nomura. He's a really good thinker.

He follows flows, I love reading everything that he puts out. So he asks a question, what's the greatest pain trade from here? Because especially recently, the market seems to be delivering a lot of pain when consensus is on one side. So, you know, what if, whatever Trump announces this afternoon, because we're doing this Wednesday, it's about

four o'clock right now, is not as severe as expected, or there's some walkbacks or capitulation on the other side, and the market takes off? Because there's a lot of people—I mean, Wall Street's kind of waiting. Even I'm kind of waiting. You don't want to get in front of these announcements, whatever they are, and if they're worse than expected and the market vacuums down, even if you've got an asset that looks pretty attractive. So then the market takes off, starts a short squeeze, the systematic investment models, which are essentially based off of algorithms and price, get forced back into the market and you get this huge burst of activity where people are forced to buy higher.

And let's say we go to all time highs or maybe technically pierce through. But what credit spreads are telling us, what default risks are telling us, credit spreads widening tells us there's some stress in the credit system. That tells us liquidity is starting to get a little bit tighter. And then investors are forced in just in time for the delay of the tariffs and the slower economy and the pullback in corporate profits to hit. And then you see the worst part of the bear market later in the year. So I can build the argument for a rally in the short run for the market going higher,

which in my opinion needs to be sold into with the information that we have right now. But I'm having a hard time building the bull case as to what's going to cause things to be absolutely wonderful going forward. Now, maybe inflation settles now, maybe a weaker dollar, maybe manufacturing the tariffs of the equalization brings manufacturing back into the U.S. and it softens the transition. Tariffs are not as bad for the S&P 493 as they are for the Magnifson, well 492, 491, 492 versus the Magnif's 8, because the larger portion of their revenues derived from internationally. So maybe the tariffs are good for the 493, so the S&P equal weight does

good. I don't know, but even best case scenario, I'll look back to 2000, 2003, you had a weaker dollar over that period of time. The job layoffs were mostly in the technology space. NASDAQ was down 80%, S&P was down 47. And you had the housing boom that started with lower rates and everybody wants to own a home. That held up the large majority of the economy. So there wasn't massive layoffs to the extent that there was in 2008.

But that's still not a bull case for stocks. It's a bull case for commodities. It's a bull case for international markets. It's a bull case for emerging markets, but not so much what has been the bull since 2014, which has been the S&P 500 and that is really the only game in town. Well, I'll tell you who agrees maybe having a hard time seeing the bull case is executives, CEOs in particular. I have some kind of a confidence index.

That's pretty interesting. They know their business is better than anyone. You know, it's taking a bit of a header here. That's actually a fairly steep dive to go from seven to five. That's a lot to lose all at once. You can see it was fairly steep right in the moths of 2008 coming into fall there. That was that was pretty that was maybe comparable, but we haven't had a plunge quite like that. So again, this might be this might be like you said, sort of channeling the zeitgeist of the moment where it's just

like everybody so upset and inflamed right now that that creates uncertainty that CEOs don't like maybe but confidence taking a big hit there. You got to go back to 2010 to find confidence is slow. If you draw this out, it skips right under that lower peak there comes all the way back to here. And that's a that's a dramatic decline. And it may simply just be the uncertainty. Now one thing that Trump is a master at is causing emotional pain to individuals that

are on the other side specifically. It may be just the doze cutting back the reckless spending and all the, but they haven't cut back on the fiscal spending yet. So I don't know. That is interesting. Yeah. To be clear, know. That is interesting. Yeah. To be clear, nothing has happened on spending. They found some wasteful things that they stopped, but the appropriations for that larger

department stayed. So now they spend it on something else. Um, right. Cause cash is still there. So I'm glad they stopped some things. It looks frankly silly. That's good. Um, but we, let's be clear.

We haven't cut spending yet. I'm not sure we can. So a big part of the, um, of this case going forward to which is maybe I put this on the bear side, although long term, it's, it's a good thing. So if they do find a trillion dollars to cut out, which was the original target of Doge, right? We'll find a trillion out of the two trillion of deficit. To me, that's just bringing back the deficit

to what we would call something less insane, something more within the historical realm of like, that's not that dumb. That brings us back to 2019-ish, roughly. So we've been in this crazy two trillion plus deficit world since COVID, right? So the emergency's over, Great. Dial that back. But you and I both know, Paul, that one man's doge cut is another man's paycheck that just got lost.

And they're going to fight tooth and nail. I don't think we've even seen that fight yet. And by the way, there's going to be some Republicans saying, no, no, we don't want to cut that F 35 program because I have a lot of people in my district working on that right now. Thank you very much. So not that. And they'll do that for everything. Be like, no, don't cut that.

No, no, not that. They'll finally they'll find like there'll be some school lunch program in a small town in Alabama is going to just get hosed. Right? Because am I too cynical? Or do think can we get there I just don't see how we get there I don't know I don't know that look Trump keeps talking about and and Basant if I pronounce that correctly I just about hesitated and got it wrong but they keep talking about short-term pain for long-term gain.

That's great. But the question is, will Trump's pride allow him to let us endure the pain that's needed to correct this now? I don't know. And I have a hard time believing that that's going to be the case. My concern is he starts in that direction that at some point capitulates and then goes back to, you know, worried about what the markets are doing in the interim period. And we don't follow through with protecting labor,

protecting the large majority of our populace, our 90% or 80%, 85% of our population. So I don't know. I'm cynical. I'm hopeful, but I'm cynical because I want to see, I don't want them to just tell us what they're going to do. I want to see it implemented. I don't want to, you know, I want to see action. Okay. Let's go back to spending. Let's head towards a balanced budget.

Present a plan. Okay. Say, look, it's going to be too painful to do it over the next six months, but over the next four years, we're gonna do it in this direction so that we'll mitigate that pain a little bit. I can get on board with that. But I can't get on board with, you know, here's all this talk and yes, we're cutting this out,

but we're refusing to deal with the major source of our reckless fiscal spending. Agreed. All right, talking about signals of where we are, this is a chart of Microsoft only goes back to mid 2024-ish, I guess. Well, that would be 2023 all the way on the far end of that December. But that looks like, that kind of looks like a big old rounded top, doesn't it? It really does. And all of our tools are telling us that Microsoft is in the end stages of a topping process.

So to be fair, we have been reducing positions for individuals that have Microsoft in the portfolio that are not wanting to hold it from a long-term standpoint because we've been seeing this process potentially unfold. And now we're starting to break support, which has given us some confirmation that this is a topping process and the highest likelihood is more consolidation

for several years or much more likely lower prices in the months and years ahead. Well, it's gone nowhere for a year now, which is different from the prior years where it was just up into the right. Yes. And supercharged from the AI drive and the narrative that's behind that, the question is are they going to continue to have to spend this amount of money?

I'm concerned about NVIDIA. I'm concerned about all of the Magnificent Seven at this point. A lot of them, not all, but a lot of them look like they're in topping processes and the end stages of those talks. Well, I can speak to one directly anecdote and of one, but I'm a power user and I'm a big researcher. Starting about January, Grok 3 came out as beta version. I was like, whoa, this was such an upgrade.

Paul, I probably haven't used Google in a few weeks. Like that was a that was a 15 year pattern. I'm very good at using Google. I know how to search and how to find stuff. I use these exclusion terms. I do advanced search. I understand. Don't use it anymore. Because it's it's a dinosaur compared to how amazing grok is is from a research standpoint, right? Because it synthesizes it all, finds it, tells me about stuff I even didn't know about, provides all the links, and I just click on them and I'm good to go.

So from a business standpoint, I think Google is, what's it gonna be down to? Maps, you know? It's not a search engine for me anymore. That was a big part of its function for me. No. And it was for me. And you probably noticed this too.

15 years ago, you could get really good information on Google, right? You can go out. I could find all kinds of opinions. Now it's like, you have to go to page 25 before you get through the paid for ads and the game, the algorithms to put it at the top the top Like they you find what they want you to find and I'm the same way It's funny that you mentioned that because I was a little bit behind you on getting started on grok And and it was this morning. I was sitting in the conference room client asked me a question and I didn't have my ex

Logged in on that that computer and I goo You know I googled the question that they had because we both of us needed to find it. And I was like, this is so boring hell. And I pulled my phone out because I didn't want to log in. I got the answer from Grok without all of that manipulation that goes into the Google search.

So instead of having to sit there with a client and look through, I had six different questions that I would have had to ask Google all answered in literally what two seconds with Grok. This one took it about five seconds because I asked several questions again went bam, bam, bam, bam right there in order. And it saved us 10 minutes of doing a Google search. I agree. It's an it is all of a sudden become a dinosaur.

And that's the scary thing about technology. If you're a long term investor, if you you own a utility company and somebody wants to come in as a competitor, well, if they can't buy access to those utility lines, they have to go run duplicates, put them in the ground, which is going to take years to build that infrastructure. But what Grok is showing us and what you've highlighted right there is technology, if a better offering comes along, instantaneously it can be replaced.

And for me, it's like I don't go to Google anymore either. And I hadn't for several weeks, but not realized it. And then yesterday it was like, oh, this is just a waste of my time. It's really amazing. So, and Anna's going gonna change and change faster. My perception of Google is, you know, their motto, Paul, was don't be evil. And then somewhere around COVID, they dropped the don't and they turned into be evil, right?

And they misfed bad information about COVID, about, you know, all the things related to the magic holy jabs, all that stuff, right? And that's the path they went. And that's where their advertisers leaned and that's what their government you know hand in glove business model said they had to do I get that but I don't think they have the capability in-house to undo their algorithms and make them good again they're shot through with wokeness like

they hide results that's all so deeply buried I don't know how if they can undo that I don't know if they can fix their product at this point in time Well, I think it was you that I was talking to because how long ago was it that that Elon Musk bought Twitter? Is that two two years ago years ago? Yeah years ago. I guess it was about this time last year I'm like, so what's that because I was wondering about Musk. I'm like, what's the deal? Like I've seen a little bit of the news on Twitter, but why is this not taking place? And I think you mentioned to me, I'm 90% sure it was you. You said, Paul, look, it takes time to redo these algorithms.

And then I guess it was around December, Elon Musk put out the woke virus is dead. Well, it didn't have any context, right? Yeah, so my assumption was that it had to do within X that he had finally found those last Algorithms and then I've noticed that I have a lot more Unbiased feed on X now with what I'm looking for on the for you I mostly follow the following but the for You is far better than what it has been because it's not just feed me a feedback loop. And then after that, got three rolls out

and it's, that's like years of a jump ahead compared to what it was before. So my question is, did it take him that long to kill that algorithm and he was looking for it? Google has no desire to do so from anything that I'm seeing at this point. No, no they're gonna go down to the woke machine but you know listen it's actually an astonishing list of things Elon has done right. High-speed internet to the whole world through a satellite system which I would have told you wasn't gonna work before he did it

you know cuz I thought latency like how could you do it? He's like, Oh, we'll just make the satellites go lower. You can do that. Anyway, you know, they worked it out, you know, from the cars to the rocket ships to helping you know, people walk again who have spinal injuries on and on right. Now I understand that he bought Twitter, not because necessarily it was Twitter, but because it's the only source of unbiased information out there because all the other large language AI models have to surf on whatever's out there on the web.

So they have to like glean information from the New York Times, which is mostly propaganda, often wrong, usually some sort of a CIA spin factory, you know, you know? You know? Because if you're using like a chat GPT and it's feasting on New York Times articles, Russia was losing the war starting in 2022 middle of summer. And it's just almost out of missiles. Major losses.

Like it would have told you, yeah, Russia's almost, yeah, they've lost, right? When the reality was actually the opposite, which you could have found out on Twitter by going and looking at the videos people were posting. So what Elon bought was actually the most valuable thing in the world, which is the largest source of unbiased or, let's say, dispersed information, with the truth being somewhere in the center. Fantastic. That was its real value. So just last week, he folded in XAI, the parent

company now owns Twitter. The grok bought Twitter. So it all makes sense now. I'm like, that's what he was buying. It makes sense. It's very smart, actually. He is brilliant. And I go back to Starlink. So I guess it was three and a half years ago that when we purchased the farm, it was something like, I can't remember, $45,000 to run fiber the distance to get to the building. So I was like, you know what, my office is eight miles away. I'll try Starlink and let's see how it works. Now it told us over North Georgia we don't have enough satellites so your service isn't gonna be great. For the first six months it was hard to downstream

we couldn't run two devices at once. Now that they got it up and running it's actually more reliable than my landline internet here at the office so we're gonna be putting the backup for Starlink here to utilize because it's just as fast. It's a phenomenal product. My price hasn't gone up. I don't think, no, it went up $10 over that period of time a month,

but my service is 150 times better. So the thing that amazes me is he doesn't just stop. He tries to perfect everything that he works, that he puts his hand to, and he's absolutely brilliant. Yeah, he must be a devil to work for because I get stuff done fast you can only imagine but it must be exciting actually to work for somebody who says I care about results and let's do this and by the way I'll remove any obstacles what do you need right and we'll get it done so so I can respect that. At any rate, I think Google's dead is a concept.

That's a very good conclusion. And it'll take time because there's individual. So I'm telling everybody that I, that I can, hey, use grok, consider I've had two or three friends call and say, I've been using chat GPT for a while and this grok is amazing. Business decisions, analytics, their own business analytics they're using it for now. Yeah. But still a large part of the populace that doesn't even know what X is or doesn't participate and is behind the curve at this point. So if you're listening and you haven't used GROC, get thee over there and try it. So this would be the challenge. Take something you know a lot about

art history, architecture, raising horses, sharpening chainsaw blades, like tuning Massey Ferguson tractors from the 40s, whatever it is you got a skill set in, ask Rock about that and watch what happens. It's astonishing. You're going to be talking with a peer or maybe even somebody above you. It's pretty, it's any question I have, Paul, literally anything. I'll give an, I'll give another challenge before we move on to the next Chris, if you don't mind. Each of us typically know ourselves better than anybody else does. So I would challenge individuals to undertake this experiment because I did and I had a client convince me look your data is out there They know everything about you, but I still built it hypothetically. This is me This is experiences that have happened to me in the past when I was born

major life event successes and challenges build a personality profile for me and I stood there and looked at it for And I guess this was probably two months ago, right after Grot 3 first came out. I was blown away and I handed it to my wife and I said, who would, who's does this describe to you? We've been married 28 years and together 31. So she knows me pretty good. And she's like, who, who wrote this about you? That's literally what she said.

It's fascinating. It was mind boggling to me. So even from the psychological standpoint, and I gave it the task with all known information about events that can build personality profiles, build one to me of this individual. So I challenged people to do that. It's quite amazing.

And then I asked it, okay, what are my blind spots? What are my weaknesses? How do I work on those? And things I've already been working on before, but it's fascinating. Well, I gave it a similar challenge because you told me about that. I thought it was genius, but I narrowed it a bit.

I said, I give you permission to look at my feed on Twitter, which is at Chris Martinson. And based on my tweet history, if you were gonna manage me, tell me what, you know, what the, what were my strengths, weaknesses, how you would approach managing me, right? Nailed me.

Just like I had a management plan, you know, from a good boss. It was subtle too. It was psychological. It understood the motivations. It understood reward structures and, you know, how it had suggestions about ways that given these ways I seem to be built, you might try this instead of that. You know, it was very complete. It didn't read like a horoscope, you know?

It was accurate. So something's happening there. I just wanted people to know about it. And by the way, it's going to get better and it's going to get better. I don't even know what Grok in a year looks like. But I can tell you something happened in January. Grok 2 to 3 was a square wave and it was big and I just want people to know about that because Pros and cons I think I can look at this. It's gonna do We're 70% what we call a service economy Paul half those jobs. I think are an immediate danger

From a tool like grok. Yeah think are an immediate danger from a tool like GROK. Yeah, no doubt. Not even, and like all, most of government is just people administrating the rules, its forms, its processes, its things. AI will do it better, faster, and with less attitude. With a lot less attitude. I mean, at least for me, I was considering

hiring a research assistant just to go research things that I wanted to so I could spend more time with clients. And Gra has removed the need for that because I can do in a matter of, if you know how to ask the right questions and in your industry, you know how to ask the right questions, it can do in a matter of 10 minutes what used to take me two to three hours of searching information to find. Same. Astonishing. All right.

To keep the, I got to move on a bit. So Kurt S. Altricher is asking a question. He says, every time, have you noticed every time the yield curve reverts after an inversion, so the yield curve inverting means the 10-year constant maturity minus the 2-year, so if the 10-year is at like say 3% but the 2 is at 4%, you have a negative number. So this is the zero line, so it says every time the 10-year minus the 2- year dipped into negative territory but then reverted, you had a recession. So here it came down, it reverted, recession. Came down below the zero mark, reverted, recession.

Came down below the zero mark, reverted, recession. Came down below the zero mark, reverted, recession. Came down, just touched under the zero mark, reverted, recession came down, just touched under the zero mark, reverted, recession came down, 2020, we know that one was prematurely truncated because of all the printing. So the question is, okay, Paul, why is this time different? Well, like 1990, 1991, 1980, 2000, like every single time this has happened It's been a recession indicator a predictor. Why is it? Why is it different now? I?

Can't build an argument that is different That's one thing that I've been paying attention to is that that steepening and that unimversion So I I can't and that bothers me because I can't come up with an argument on the other side. It can't be that simple that but it can be don't get me wrong, but I Don't see why it would be different this time Well anything you can think of the only thing I can think of is that the central banks have so Manipulated the interest rates that maybe they're not sending correct signals anymore. Okay, that's true.

That's a good point. That's a very valid point. Like that maybe those were freer markets in the 80s, 90s, 2000s, and now it's just a complete nonstop intervention. And so. Right. Well, and that's one of the reasons why you have to have multiple tools that can give you confirmation.

So that would be one. If that was the only tool you were relying upon and it was wrong this time, then you're on the wrong side. But that's one bit of the information that stacks with more information. That's why I'm seeing the weight of the information right now tells us that there's a high probability of a recession, a hard landing. Market action is not doing that yet. Maybe, but this is just a

correction, right? The market hasn't really signaled anything major except for a lot of uncertainty. But the weight of the evidence continues to point to possibility of a recession, hard landing, or at best, down inflation, lower growth, sticky inflation. And that's kind of the nightmare scenario if we end up in that situation where we don't necessarily fall off hard enough where the Fed can intervene, and we just trudge along, inflation's sticky, growth is slow, unemployment goes up,

and then that's just the nightmare. It's just like a meat grinder for average investors. And what I would anticipate is just slowly trickle down instead of an event. And those slowly trickling down is hard for people to get out of because it, you know, you break support, you rally a little bit, then you barely break support, you rally a little bit, then you barely break. And it's like, what do they say, Chinese water torture. You know, there's no major event that happens. It's not where you get hit in the mouth with a baseball bat. It's just a slow grind lower. And you're continuing to hope hope looking for a signal that the market's going to rally and

it doesn't. That's the nightmare scenario actually. Well the nightmare is also that stagflation thing you're talking about. I mean it kind of sounds fun, kind of sounds like a stag party. Those are, I hear they're fun. But stagflation is terrible, right? It's high inflation, low employment, Um, but, but stagflation is terrible, right? It's high inflation, low employment. Um, and it's, it's awful. It's a bad mix. Uh, on that front, Paul, I want to talk about where I think inflation might come from in the sense that inflation is rising prices.

That's how we experience it. Um, so this caught me, this really caught me because, you know, we've had this thing that we're Saudi America, the United States is just ingenuity. We're always going to get more oil out of the ground. If the United States can't get more oil out of the ground, if we're no longer the Saudi swing producer, if you need another million barrels, we got you covered. And worse, if US output in oil starts to fall, this is the thesis I've been working on. I've done the interviews with Adam Rogenschwag of Gering and Rogenschwag.

I've done all my, the analysis of the shale basins. It's a very deep story. Not going to bore everybody with all those details, but check this out. It says here that January U.S. crude production was down 305,000 barrels a day, hitting just 13.15 million barrels, a level it hasn't dipped down to in over a year, actually 15 months. So that's according to the US EIA. Also revising its December estimate downward by about 40,000 barrels to 3.45, right? So actually, you know, December was all-time record. This was supposed to be an all-time record or oops, wrong way, and we down revised not

by a lot, but 40,000 barrels a day. And top producer Texas saw 105,000 of that decline and New Mexico saw another 53,000. Why Texas and New Mexico? Why does it matter? Because Paul, those were the last two places that were still growing their oil output. So all the other places are more or less falling. Texas and North, and sorry, New Mexico were growing those so that's surprising little surprising

And it's not like this is a month, you know follows down a month This is to the lowest level in 15 months. So we have this rounded top showing up here as well I don't think this is on enough people's radar screens at all at this point. I think most people have not been looking at this, wouldn't know what they're talking about. So, let me ask you this question, Chris. Is that less oil in the ground to pull out, or could that be a recessionary signal that there's less demand on the other side, and that's the reason why the production is down? No, oil people are very clear about this.

It's a number of things. I'm glad you're asking. It is multifactor factorial, but number one, oil prices aren't high enough to make more come out of the ground. Okay. So if Trump wants his drill baby drill, it's actually not rooted in oil realities.

Drill baby drill implies we're just gonna punch a bunch of holes in the ground and more oil is gonna come out, which going to drive the price down. It's not going to happen because everybody who does that is going to go bankrupt. Right now there's a balance between how much they can drill at this price and what they're going to get back out of that. And I would submit to you some of them are still losing their shirts anyway. The level of indebtedness in this industry is terrible. But anyway, leaving that aside, this is how much oil sort of park here at about 70 a barrel. We're going to see less and less and less coming out of the ground.

If they want to see more coming out of the ground, my target range, you have to get to 90. And then more will come out of the ground for a little while. But how much longer? Right. So I think we're at this long bumpy plateau. The next year or two, we're going to see independent of price is just going to do that anyway. And natural gas, Paul, here is that a year ago, natural gas production was only 0.6 billion

cubic feet per day higher. So natural gas has been this long uninterrupted almost all shale gas, but it's been bumping along here. That's okay. It's bumped before, but that was 2020. We can't really count on that. Um, this was the great destruction. Remember when oil went negative 40 a barrel for a couple of days, right?

Natural gas came along for that ride. That was 2015. This was a terrible moment. So, so prices when they really hemorrhage can drag production down for a bit. This isn't that. This isn't 2020. This isn't, this is pretty average pricing for natural gas. And for some reason, whatever set of reasons, we only have 0.6 billion cubic feet per day

more today than a year ago, which is kind of weird because we have all these new LNG terminals, the orange line, we're just we're exporting more and more and more and more. And that's going to continue going that way. Because just recently, the Trump administration fully reversed its policy on LNG exports that the Biden administration put in. No more bans on that stuff. Go for it. You know, put in as many as you can.

The secretary, Doug Burgum down there, America's back, LNG export approval. So they're probably going to, there's probably going to, this orange line is going to keep going this way. But notice this is from zero to about 14 billion cubic feet per day. But if we're only getting 0.6 billion cubic feet per day more than a year ago, but in a year we're going to be exporting another 2 billion, but we're only getting 0.6 billion cubic feet per day more than a year ago, but in a year we're going to be exporting another 2 billion, but we're only getting 0.6, you can just, uh-oh, prediction. People are going to be experiencing higher gas prices.

If it's $4 per therm right now, you could imagine 6, 8, something like that. And of course, that means your electricity cost goes up, fertilizer costs more, things that are produced in widgets, your your butane or propane bills all go up. Everything just sort of goes up and we experience that we call it inflation but it's actually going to be rooted in a supply demand mismatch that I don't know that anybody's really looking at at the top level. I'm a little weirded out by it. Well that's one thing that I love about your analysis is you're on top of that, you're keeping track of it. And that certainly shows there that's not a lack of demand, because

that international shipping chart was going up. And I've been getting a few signals on natural gas. Natural gas is one of the things that's been going down for quite some time. But there was a period of time earlier in my career that that was one of the, you know, a great position to own inside the portfolio. So we're starting to get some check marks to, hey, pay attention here. This might be something that needs to be allocated to because prices are starting to tell us that there's a change in that supply and demand structure as well.

Oh, good. Yeah. I mean, we're hanging at about $4 a therm now. A year ago, this would have been about $2. So that's a pretty big increase there in, well, 100%. But some of that's because we had a lot of polar vortexes, but some of that is because we're exporting a lot more than we used to. And some of that's because, not for whatever reason more than we used to and some of that's because not for whatever reason

Not as much as coming out of the ground now it ate Paul people will start drilling like crazy again but I'm just saying the it takes time and So I don't know we could see now if we add all that up into a single story. We call it commodities What do you think about this chart here? I like this chart myself, but what do you think here? I like that chart as well. That chart teaches you a couple of things too, because we look back to that bottom that occurred. Oh, when was that Chris? 98, 99? Is that the first green circle on the left? And then you assume

that because we're down below that level, it's going to immediately turn. So you have to be patient in the circumstances like this, you want to buy low. But but I really believe that we're at the point where I don't know how quickly it's going to be. We're going to look back at time in the future when everybody's chasing these commodity prices and say, I really wished I'd have been rebalancing my portfolio back then. So just to be clear, the GSCI, this is what, that's the Goldman Sachs Commodity Index, is that right? Next correct. Yeah, so this is just comparing for everybody listening

or watching the ratio between that Goldman Sachs Commodity Index and in the S&P 500. So when the number's really small, the numerator isn't that big and the denominator is large. Right? So you're dividing a lot of S&P into a very small or weak or poorly priced commodity index so the number goes low. This is the lowest it's ever been practically right here currently. We're below one. That's crazy. That's really low. Let's show prices. So that's showing what I'm getting ready to show on the screen here. So this is 2008 till today. And I know we've showed this before, but this is the S&P right here in black.

Okay, on the right hand side after our little pullback. That blue line is that Goldman Sachs Commodity Index. So look at the- Way down there. Yeah, look how different that is. Now, remember before we go back to Chris's chart, 2008, where you had commodities way up here, and S&P was down here. I've got a better chart that can show that in a minute. So let's go back to, wait a minute, I got to go down here. So bear with me. This one, this was the Goldman Sachs commodity Index in December 31st of 2007 versus the S&P 500. So now we can go back and show the viewers your chart again so that they've got some context between.

There it is. That's that circle right there. Yeah. At the peak of the great financial crisis, we saw that instead of being below one, the index was about eight, I'm going to guess. So that just says, Paul, that there's going to be potentially an eight-fold difference between where we currently are and where it might go if we called a typical peak around eight. That's a big change. And quite frankly, think about all your S&P 500 profits. S&P 500 profits were at a real maximum in the late 1990s, at the same time that that commodity ratio hit low. S&P 500

profits are at, you know, nobody anticipates that they're going to slow. What is it the projection was 25% increase in profits? Yeah. So because those commodity inputs are low on that production side, so what's that going to do to profits when those input costs start to go up and commodity prices go up? That for the wise investor that has tools to allow them to adapt their portfolio, this is a massive opportunity for the patient to adapt their portfolio, this is a massive opportunity for the patient and commodities in relation to the S&P. Now that could be commodity prices stay the same

and the S&P drops 50 or 60%. That's one way that could change. The other side is commodity prices go up 100% and S&P goes down 30 to 50. This is all things. I'm a contrarian investor. I love this chart. I do too. I do this. I love this chart

Yep, it's just like What what is it gonna go to zero? Probably not commodities probably won't go to zero in this story And so I say that sarcastically, of course, they don't go to zero so What did we talk about today? Gold. Could have talked about silver, same story. I like uranium for the same reason. Oil, of course, natural gas, but then commodities more generally, vis-a-vis the stock market, which is we've pointed out many times in the past here, Paul, has seen more than its fair share of concentrated global activity and attention. 75% of the

total world stock equity indexes is now represented just by the value of the S&P 500. And further, it's been hyper concentrated into the top 10 companies. Further, when we look at the overall value of the whole thing, kind of dicey, price to book, price to sales, price to earnings, at or close or beyond all time record highs and in all of those categories. So very expensive, over concentrated, maybe a little over focused compared to the rest of the world with commodities just sucking tailpipe on that whole story.

So that put that together, we'd say, well, it might be time to start shifting the chips a little here. Correct. And our tools are starting to indicate that for sure. Whether it's going to stick or not, I don't know. They can change. If the information changes, we'll change our mind. But it's telling us that it is time to rebalance the focus in your portfolio and be diligent.

And I want to encourage listeners out there. One of the reasons why I take everybody through the planning process is because it brings you back to your situation and what's important for you. Always know why you own what you own from conviction and research. Chris, you're great at that. You do a good job explaining on the reasons why you're doing the things that you're doing.

We do that for clients, know why you own, what place it has in your portfolio. But more than anything, if you understand your situation through that planning process, for those who go through it, now all of a sudden, you're not as influenced by what your brother-in-law says or your best friend or what the media says, because you've got a plan in place for you and your circumstances and you know why you're making the decisions you're making. And that plan helps, right? So what's the old saying? If you don't have a map or a plan, any road will take you there.

Every road looks good, it's easy. So especially now investors, take stock of where you are, look at your situation, look at what can wipe you out so that you can be prudent allocators of your funds and pay attention to where you wanna be prudent allocators of your funds and pay attention of where you wanna be three, five years from now, not so influenced by the media of the day. And, you know, we go back to, what is it?

The Mad King and his most recent report here goes back and talks about, you know, his concern is is that the AI bubble is going to do the same thing that what was it broadband did back in the 1990s. You know, broadband was all of a sudden, internet's going to be the solution to everything, and all the internet stocks went straight up and loosened technologies and all those, you know, this is it. It's not any different with the semiconductors at this point, but it's impossible to tell, you know, when this game is over. And the question is, do they need this much computing power at this point as these models are getting better? I don't

know the answer to that. Hindsight will know. But if you're an investor, know why you're allocating your capital where you are based upon your plan and what risks to your success and what you need to do, then all of a sudden you can walk the path before you instead of being pulled by somebody else's path and influenced by those emotions of the euphoria around these dangerous times at market tops, what I believe to be a market top. these dangerous times at Market Talks, what I believe to be a Market Talk. This is dangerous because we haven't had a single minute to look at it. But this is a live futures.

See that red candle? Apparently the Trump Liberation Day speech is not being well received in the US stock futures market. Ouch, we'll have to digest that and take a look at that. Wow. Don't know what that is. Often these are head fakes and early movements are not necessarily what's up. These are just algos battling it out over words that they're parsing that Trump is saying. But still, we'll have to keep an eye on that, obviously. We will. I'll know more this afternoon and tomorrow. Curious to see how

the market opens and and I'm curious to see what was announced at this point. Yeah. Yeah, I don't know what like the world owes us something and we're gonna put 100% tariffs. I don't know that that was not a awesome reaction there. Well, we'll see. All right. So for everybody listening, if you want to talk to Paul and his amazing team, please come to peakfinancialinvesting.com, fill out a simple form. Somebody from Paul and or his team will be back there with you in 48 business hours, and you can start the process. And it's a great process. Volatility is coming.

You need a plan. And nobody's going to help you get through that plan better than Paul and his team. So please take advantage of that. I know you've been thinking about it but maybe it's time to take action on that. So with that, Paul, can't wait to see you in a couple days. I'll see you in Atlanta. Oh I'm looking forward to it. I can't wait to be at the conference, get a chance to fellowship, be around people who care about the truth and want to make a difference for the betterment of lives of our world. Yeah, so anybody who's going to be at that IMA conference, if you're watching this, you're

probably already there. Come up, say hi, shake my hand, say hi to Paul, shake his hand. We'd love to meet you. So with that, Paul, thanks a lot. See you soon. Good to see you, Chris. Peace.