Peak Prosperity - Trump Presidency: Good Or Bad for Your Portfolio?

Episode Date: January 23, 2025

Chris and Paul get together in person to discuss the impact of Trump’s inauguration on policies and markets, focusing on executive orders, economic implications, housing market changes, energy independence, and potential investment opportunities in commodities.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. Very rarely can you say there's a new sheriff in town. Truly a new sheriff. He doesn't seem to be, you know, the problem in the past is that Democrats would talk out of this side of their mouth and Republicans talk out of this side of their mouth and they do the exact same thing. Yeah.

In this case, he's headed in a completely different direction if he continues to follow through with it. Yeah. 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. Hey, hello everyone, and welcome to this very, very, very special Finance U because Paul and I are actually, well, we're in fellowship here. I'm at Paul's office down here in Jasper, Georgia. We had some great time fishing. We'll tell you more about that in a second. But Trump's inauguration was yesterday.

We made it through without anything really bad happening from a gosh, you know, surprise standpoint. But there's a lot to digest. This is the day after the inauguration. We're recording this is January 21st. And there is going to be a lot that we're going to have to figure out over time. So I'm not saying we have it all settled. Right. There's a lot that happened, wasn't there? There's a lot. A lot just in the past five minutes when I was cruising news before we started that I didn't get a chance to dig into. Yeah. Oh, so, you know, I analyzed the assassination attempt in Butler, and that was really that stood out for me. Paul was when he stood up and he said in his inauguration address that God turned his head and he came up a changed man.

And so this idea that he's here to rescue America and that this is part of a—that he was saved for this job, it puts a little extra, it's not about, that puts a whole different dimension on it for me. It does me too. And I pray, you know, events like that can change the direction of an individual's life. And I pray that if there's a fear of God and he understands this is about the American people, it's not about his pride, then he can dig in and do what needs to be done to change the direction of our ship. Yeah. Now, we're going to try and analyze this from markets portfolio. It's really early to figure this out, but I already think there's seismic changes. And so here's how I see things so far.

There's a certain strategy you can pursue called shock and awe, which we did during Gulf Storm, the original under Bush, who looked really uncomfortable at the inauguration, if you saw him. Video was great. He looked uncomfortable, but I think somebody else wanted a pardon that didn't get one. So at any rate, we had that shock and awe. And shock and awe just means that you move so fast that your enemy is processing event one and you're already on five, right? So I think we saw some shock and awe yesterday.

Executive orders, only two genders, Gulf of America, not Mexico. What am I missing? There were so many things. Panama Canal. Panama Canal. January 6th, people being pardoned out. And then, I think most importantly, he threw the administration under the bus. Yes.

Fractured America, broke it, harmed it, the border, you know, all of that. So this is very rarely can you say there's a new sheriff in town? Truly a new sheriff. He doesn't seem to be. You know, the problem in the past is that Democrats would talk out of this side of their mouth and Republicans talk out of this side of their mouth and they do the exact same thing. Yeah. In this case, he's headed in a completely different direction if he continues to follow through with it. Yeah. So in the less than 24 hours, I guess it's about 24 hours now, rescission of 78 Biden-era executive orders. I have looked at three of them,

so I got 75 more to go. 78. Yeah. Freezing federal regulations. That's a big deal, in my opinion. Yeah. That's a big deal. That'll take the burden off the small business and free up the American ingenuity. Oh, do you think so? I dodged, undodged, redodged the bullet of the beneficial ownership, the FinCEN rule. Yes. Yes. That was terrible. And I sort of drug my feet and then I started doing it in a flurry because they had that last minute on stays, restay of the injunction, whatever that was. And then they undid it again you think

that's off the table i think that's how i read that i would be highly surprised yes it has to be okay uh we have a freeze on federal hiring well that's good news that is good news i think yeah we have uh federal workers must return to full-time in-person work immediately. Okay. That, I don't want to be too dismissive, but that one's called the let the trash take itself out order. Because there's going to be a whole bunch of people who were working from home in their cushy jobs who weren't really doing any work. And now, Paul, they're going to have to come back to work and be productive. And I think some percentage, 10, 15, are going to go, I'm out.

I've met maybe 10 to 15 in the North Georgia area that have moved in here after COVID and working from home. So I'm curious to see if there'll be a few houses for sale. Oh, interesting. But that one actually probably ties in with Doge. That one right there is probably your free hall pass for getting just attrition, just getting rid of workers. Like they take themselves out of the game. Right? Yeah. A directive to address the cost of living crisis.

Now, we've been talking about inflation a lot, but what can you imagine just off the top of your head? What kind of directives could you make just off the top of your head? What kind of directives could you make to address the cost of living crisis? That one perplexes me. Now, I did hear a report. I haven't had a chance to dig into it, that if somebody's paying child support, you get the person paying, the parent paying child support gets to claim that child on their taxes, which has been something in the past where the parent that had the child, I don't know if that's true, haven't had a chance to get into it. Is it little things like that? Or is this, I don't know how they could do that without causing more stress.

Well, there's only two things that actually cause a cost of living crisis, yeah. Federal surplus deficit spending. Yeah. And money printing. Yes. Everything else is sort of a wash, as it turns out. So in that directive, if they allow some deflation to happen by pulling this excess fiscal spending out and getting our budget under control, that would deal with the cost of living crisis for sure for a lot

of individuals. Well, that's interesting. So, I mean, when I think about it, just judging from the TikTok videos that I've seen, but also the just raw budgetary understanding, It's rent and mortgage, it's groceries, and then it's your insurance costs. Yes. Healthcare, and auto, and casually auto. Which have all gone through the roof if they're unavailable. Some locations for that last part. So how do you, what kind of a directive could address rental costs or mortgage costs? That's a good question. I can't think of anything unless he comes up with some type of tax deduction for a basic cost of living. Okay. That may help some. But then you get your that, but that just means that the government is taking in lower revenue, which means it has to spend more on the back end. So it feels good, but it's not, it doesn't actually

address the cost of living. It just shifts it. Yeah. And that's not going to, and that's not going to accomplish what Doge is looking to accomplish. Right. All right. I'm going to have to dig into that one. I don't know what it means yet. That's interesting. How about withdrawal from the Paris climate treaty? That's going to stick in a few throats. Oh, yeah. Well, that was, you know, that, that whole inflation act that, that Biden put in, which was inappropriately named because it was another way to spend a half a trillion dollars on things. And a lot of it was alternative energy, we'll call it. So maybe withdrawing from the climate treaty reduces the cost of input across the board and pulls down the cost of living some.

Maybe. Maybe. Well, actually, remember there was this whole thing. You'd know more about it than me. But the SEC had this whole companies have to report their climate, carbon. It was a whole new reporting requirement came out last year. I don't know. Very expensive.

I saw companies complaining bitterly about it. Like, how am I going to assess my carbon? So all this new reporting. And so maybe that comes off the table now? I mean, if you get the regulatory cost off of the corporate books, they can sell their products for less, still maintain a profit margin. That's good for the average individual. Yeah.

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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. I love that one. I don't know what that means yet, but I like it. It's an idea. Directive to end government weaponization against political opponents,

which would be such a departure from the past. Honestly, you know what? That stretches back to Herbert. I mean, sorry, Hoover. Hoover. That bar? Yeah. Because you had the original version of the FBI,

you know, and then that came under what was that guy's name? Um, the, the big FBI director who was famous for this. Anyway, they've been suppressing political opponents for a long time. Yeah. Did not know that. Yeah. It's, it's a thing anyway. It's, it's part of it. But so that's within the first 24 hours. Actually, all those came out last night, by last night. That's incredible. And well, that tells you he's prepared. He's not wasting any time. Yeah. And the sense of urgency I like, because the quicker he can get this in and take the burden off the average individual, you know, and thinking about that, ending the weaponization. Yeah.

That may go a long way to help bring our country back together again instead of polarizing right and left to bring everybody back together. Well, you know, there's going to be some people who are going to scream when the DOJ goes after people from the prior administration for legitimate crimes that they committed. They're going to say, oh, that's unfair. You know, whereas I know that here in Georgia, I know of somebody, a lawyer who was charged with election interference because he showed a video to one of the state reps of somebody shoving ballots into a machine multiple times. And it was a public video. So, and you're charged just for showing a public video of somebody. To a public official.

Yep. And the public official is supposed to have the responsibility to protect the election integrity. That was weaponization right there. That was weaponization. It sure was. Yeah. Well, and then I think the big news, and this is going to actually have, I think, significant impacts on things, how much money is spent, how the country operates, all of that. This could get a little chaotic for a while, but

ending Biden's mass parole programs, right? So that's through that CBP One app, all that stuff, reinstating the remain in Mexico policy, ending catch and release of illegal migrants, and ending birthright citizenship, meaning the people who come here just to have a baby to get the auto citizenship for their offspring. Those are big changes right there. That is. So the birthright citizenship is not going to affect an existing citizen in the United States. Right. It'll just be someone who's not a citizen that has a child on our soil.

It looks, the way I read it, on a go-forward basis. So it closes the border. We're following the rule of law, like we're supposed to now, right? Well, yeah, yeah. It's going to be a little expensive. You know, I had an idea. They're like, it's going to round you up, you're getting like rough treatment on the way home and you can't come back in this country like Holman has said for 20 years, no visas, no nothing. That's a good point.

Or $500 plane flight and a $500 voucher if you leave on your own from these airports on these days. And you just, they, they, they take themselves home. Self-report, go home, be out of here. So a million people, if that's a thousand dollar program per person, that's a billion dollars to get rid of a million people, which isn't that bad, not 80 billion. Not bad. But, but if you think how much have we been spending through the food stamps, the welfare program, the housing of all these? This administration has just spent ridiculous amounts of money. Yeah. Not taking care of the American citizens who are struggling.

I mean, I hear that all over the place. American citizens that can't get the same assistance from the government that the illegal immigrants that have been coming across our borders are. Mm-hmm. that the illegal immigrants that have been coming across our borders are $1,000, $2,000 a person, I would assume is minimal compared to the cost that we're adding to our national debt based on how this prior administration has been spending to get them out of the country. And the thing I like is he made it clear he's going after the criminals, the convicted, what would be felons for us, convicted felons, murderers, rapists that came in from other countries. Well, that was astonishing. Just recently, before the inauguration, there was a bill that came out.

I think it was Representative Macy who put it up, which said if you're here illegally and you rape somebody, you're going home. It's an instant deportation. There were 148 Congress people who voted against that. I don't understand that at all. How do you vote against that? I don't know. I don't understand that at all. Unless you desire evil upon the American people, unless you desire division and suppression of the American people.

I mean, in no way can you vote. I don't understand how you could vote for that, against that, excuse me. Yeah, I don't understand either. Well, anyway, so a lot of stuff going on. And I have another, he also had a national emergency declared around energy, which we can get to in a bit. I don't know what that means yet. It's very complicated. This isn't so Trump the first. He would have just sort of said that and then hope things worked out. This national energy emergency declared, Paul, is very nuanced. It's about how it interacts with the Endangered Species Act and department heads who are going to have to interpret the Clean Air Act and clean water, federal leasing, laws, courts. It was nuanced.

So this time they came in with that thing. Somebody worked on that for a long time and thought it through very carefully. Now, I can't analyze what that means because I'm not a policy wonk, right? But it was nuanced. Yes. And prepared. It wasn't like he just came up with that last night on the fly. Well, he's been hunkered down since the election at Mar-a-Lago, having people come in and meet and plan and prepare.

So big preparation. So that's how I'm detecting this. And this feels like a shock and awe thing. And I don't even know what came out this morning while we were doing other things together. And I'm sure even more. All right, so. Oh, the one thing I did hear came out just a few minutes, read the headline before we came in. He did something with offshore wind leases.

Gone? Terminated them. And apparently one of the solar companies that I have no exposure to and don't actually know the name just cratered right on the other side of the news. I'm okay with that, and I'll tell you why. Every place they've been trying to put these offshore wind farms in, they've just been killing whales. Like these things are not good for the environment, right?

If we're putting them in to save the environment, but we're killing all the whales, we're doing it wrong, right? And they just never stop to sort of analyze that. Anyway, there's that. But second, here's my thing, Paul. If offshore wind farms were actually good. Private companies would be making a lot of money at it. They're all sucking wind with subsidies. It tells me it's not a viable thing. Correct. So why would we continue to kill whales and subsidize something that's actually not viable? Because if it was viable, people would be doing it.

Uh-huh. Right? It's just a rule I have. Yeah. Yeah. Well, and it would be, and I would be seeing that presented to clients. I've never had anything, somebody come and present, hey, invest into this solar wind field because mathematics just don't make sense. If the mathematics did, I would already have been pitched dozens of syndications. People would say, hey, here's the return. They were probably all tranched out. You could get in on the mezzanine wind tower farm level,

you know, and I'd know all about it. I've never been pitched one. So it's either so good that they're keeping it all for themselves. Well, it doesn't work or it doesn't work. And it's just a money funneling, let's keep money going here in the technology industry. I'm going with B until otherwise.

Now, I will say the solar farms, I've seen a couple of those and the math does work. Oh, yes. Yep. But not the wind farms, especially offshore wind farms. Yeah, exactly. All right. Moving on. This is the South.

We're in the South, technically. Yeah, here we are. Does this comport with what you know? So we're looking at a chart here for anybody just listening. New homes for sale from 1973 to 2004. And today there are more homes for sale than at the peak of the so-called housing bubble bursting there in 2000. What's that? Six, I guess, was the peak here. It was. Actually, it turned in 2006 slowly. And it didn't really gain steam until 2008.

Yes, he had chips down and bumps back up again. Yeah. OK. Yeah. So Holly and I actually, because our tools were throwing off red flags back then, we were in a house that we had built to sell. We sold our home, put it on the market in November of 2007. Real estate agents were all giddies like, oh, you're going to get X amount of dollars for this house, which was ridiculous for what we built it for at the time. And I told Holly, I said, don't get your hopes up. We didn't get one offer until February and they were within 15% of our asking price and I snatched

it out of their hands. then by that summer prices were down a good 25 percent more yeah what does this make today does this feel like right I know your son yeah is in is in the biz um he's shielding does this make sense what you're hearing it does so I was telling Chris earlier for the audience out there my son's really detailed and trying to figure out where he wants to be. So he's been looking at builders and competitors in the certain areas. And the North Georgia market is just absolutely saturated right now. Prices haven't softened dramatically.

But we're starting to see asking prices drop for the first time since 2019. Yeah. Well, really before because you just had this slow momentum that was coming up. So he's found a couple of pockets of areas that are growing more from the industrial base because commercial construction is what he does. So that's where he's looking to move to.

But yes, my wife's seeing it and prices that she's seeing soften. Homes are on the market a lot longer. Yeah. Land is frozen. I mean, small lots are selling for the right person, but larger tracks that were just flying off the shelves and, you know, right after COVID with all the money printed, they're frozen right now. And everybody's still hoping the prices are going

to come back and everybody's hoping that Trump's going to goose the market again and real estate's going to be great. But that is in line with what I'm hearing. Well, that's the cadence of real estate, right? So the first thing that happens is supply builds. That's what we're seeing in this chart. Supply is building and then prices follow later. And then when you see that big fall off in supply of homes there through 2008, 2009 into early 2010, that big giant down, that isn't because those homes were selling like crazy. That's because people are pulling them off the market. Yeah. Right. So supply doesn't, supply is how many are on the market and there's reasons they come off the market. That's right. They're bought

or you pull them. So people were pulling them because they were just depressed and like, I got to get more for my house. And yeah, by the time 2010 came around, nobody wanted to sell their home. They wanted to hold on to it because the banks were forcing the foreclosures. And then you had, you know, the auctions and sales that were taking place through 2012, 13. Yeah. we've seen this pendulum swing really hard in the other direction. And so a lot of second homes, a lot of VRBOs. Now, we've had a lot of people move in in the North Georgia area, but even Atlanta, all the data is saying it's overbuilt. Throughout Georgia, I'm hearing people are slowing down. Not dramatically so, but the question is, is if we're overbuilt,

then this slowing is going to continue, especially if interest rates stay higher. Well, I'm bringing all this up because I think Trump has been handed, I'll politely call a hot potato. And so we know that the prior administration McPhibbed about the McJobs report, right? They lied about how many jobs there were, and they're quietly trying to undo that bureaucratically at the BLS and all that. We know that they fib everybody, every administration ever about inflation. Yes. Understating it all the time for obvious reasons, right? They're incentivized to make some look better and they have to pay less in COLA so they can spend more on their pet projects. Great. Got it. But within that, this was already building. This is independent of Trump or Biden. There was like a big, huge housing bubble that then the Fed burst because they started rising interest rates. Everybody got used to 0%.

A house at a 3% 30-year is a very different proposition from 7%. Dramatically so. Right? Dramatically so. Yeah. And people stretched and it made sense and houses always go up, but when they find out that houses can also go down in price, all right, that's a big leg of the overall economy.

I mean, it's big. It really is. AI doesn't solve it. No. AI doesn't solve that. I've seen the robots that can put the bricking on the side of a home, but still, like in the North Georgia mountains, it's great if you're on flatland. In the North Georgia mountains, when you're building on the side of a home. But still, like in the North Georgia mountains, it's great if you're on flatland.

In the North Georgia mountains, when you're building on the side of a cliff, essentially, it doesn't work so well. Yeah. But there's still this pervasive belief that, and it's the hindsight bias, and I think I talked about it before, Roth DeBelly had an article that I read, swiped paper back in 2011 called No More News, like mainstream news media. And then it's a book called The Art of Thinking Clearly. So that hindsight bias, you know, and several, I like to try to listen to some podcasts and individuals that know real estate.

And the argument is, is should I rent for the next year? And the debate is, is, well, you know, prices were X back in 2017-18, and you've missed out on all this growth. But I think this is a completely different environment from where we are right now. I mean, prices exploded when you had all the printing that took place with COVID and the fiscal recklessness of the last administration. In the North Georgia mountains, our economy is reliant upon housing. I mean, that's pretty much it. Building second homes and retirement homes, and we don't have manufacturing. And if housing slows, then our local economy in North Georgia,

and North Georgia and really in Georgia, outside of Atlanta and Savannah is a little protected, really struggles when housing turns. Well, it's more than North Georgia. I think we're going to see here that this is a nationwide survey, buying conditions for housing. This comes from Bravos Research. I find them on Twitter. I think you'll see their handle in the next one, but very easy to find, Bravos Research on Twitter. But look at that, buying conditions. This goes back to 1980. Those gray bars, of course, are recessions. And you can see there's a little correlation between, you know, people's willingness to buy in recessions. Of

course, that makes some sense. We're at a level of buying, like the bullishness for, I feel like buying a home is at 30%. It's never been this low since 1980. Was that 45 years ago now? Yeah. Well, I mean, houses are priced to perfection based on the income of the average individual. The asset price inflation that we've had since COVID has helped the top 10%. But you've got 70% of the population now that, you know, they're paying seven, what, 7.6, I heard someone say today, times their salary for a home. In the past, on the high side, it had gotten to six, six and a quarter. I mean, that's, three or four is healthy. Yeah, three and four is healthy. Yeah. Three and four times salary, income. And it's asset price inflation, but that

inflation and assets has not relayed over into salaries. Salaries have gone up some, but not from an inflation adjusted standpoint like housing has. So, you know, your margin for error and they're strapped. So you go buy one of these homes if you're young or if you're struggling, if you haven't accumulated assets, your margin for error is minimal. And people are scared, right? Can the Fed continue to print? What's going to happen with the inflation control? So now they're getting hit with high rents. They're getting hit with inflation. They feel like they're left behind and houses are taken off. And the banks are tightening up a little bit, so they don't qualify for them. I've heard several real estate

agents tell me here recently that they've had a few closings fall through because the individuals didn't qualify for the loan and the real estate agents weren't concerned. They know who's going to qualify and who's not most of the time. So that means the market's turning a little bit. Tightening conditions. Okay. Well, and then the last part of that story, of course, would be this, which is, so this is bond prices. So as the price goes up, the yield is falling. This goes back starting in 1980 again, 40 years of falling interest rates. And then we just broke that trend line here.

This is real data up through here. I don't know if everybody can see my mouse. So I'm describing that this chart has both real data and then what Braavos, I think, has taken a red pen to and drawn what the future might look like, right? And so, because you see it goes out to 2028 out there. But anyway, if that's true, and it was a falling interest rate regime, Paul, and now it's a rising interest rate regime, it's a whole different world that everybody who thinks they know how housing works because of that uptrend, they don't know how it works when it goes the other way.

No. I was sitting down. Evie and I had a, we gave a nice talk in our town of Chester, Massachusetts, and there was an older gentleman there, a little bit older than me. And he's like, I don't understand why kids these days don't just. And this guy owned a big old real estate portfolio locally. And I said, sir, with all due respect, you were buying while interest rates were falling. Yeah.

And now this is a completely different environment. Completely different. So when interest rates are falling from 1982 forward, if you get yourself in a bind, and a little bit of a bind, you just get tight, right? Then you can refinance that down. And along the way,

supply and demand, interest rates come down. The lower the payment is for people, incomes were going up pretty good in the 80s. So their margin for error was minimal. So, hey, if you stumble, you can refinance down. You can put your head on the chopper block to buy a lot of properties. But if you're a younger investor right now, I mean, you're really playing Russian roulette. Your margin for error is so minimal that you're done in your first property. If the economy tanks, we have some deflation. If you've, you know, let's say you're on and frozen. Yeah. Bravo's is right. Interest rates go down in the short run because of certain factors, but then the printing comes back or the inflation continues or the bricks replace the dollar with the unit, that would be inflationary for us or

currency crisis. And then interest rates go up again dramatically. Oh, you put your head on the chopping block. You've got a five-year adjustable and you think that it's going to go down. And now all of a sudden you're refinancing at 12% into a stagplationary economy. You're toast. First mortgage, 12.5% 1988. Yeah, that was me. So rule of thumb, rough rule of thumb here is that for every 1% that mortgage rates go up, the equivalent monthly mortgage payment that you can afford goes, makes the value of the house go down by 10%. So if we had a $500,000 house at 5% mortgage rate, if that goes up to 6%, that is now worth 10% less. So $450,000 would be the equivalent, rough rule of thumb, that somebody could afford where the monthly mortgage payment's about the same. So somebody who was investing, Paul, when mortgage rates were

reliably ticking down means that the house they bought was reliably ticking up in price or value, right? Well, this is just the opposite of that now. That is the opposite of that. And they were fortunate enough because I remember my uncle had a rule of thumb in the 1990s. If you can buy a property and the equivalent market rent will pay for that property in six to seven years, always buy it. You know, so interest rates being high, not as many investors were there. Coming down, it started becoming more affordable. People were having good experiences in their homes. They start buying multiple rental properties that were fortunate enough to be able to think about it from that standpoint.

It's a completely different environment. Six to seven years. So you're saying I'm just going to make numbers up so I can understand this. If I could get $10,000 of income off a property, I better be buying it for $60,000 or $70,000. That was the rule of thumb. Yeah. And you could actually buy properties like that easily in the 1990s. Well, this is the actual rule of real estate investing, which I think some people may have forgotten, but Robert Kiyosaki drilled it into me.

I learned from some other people that a house is not an asset. Yes. Your primary residence. That's a liability. Yes. So when you get over into a house being an asset, assets are, here's his definition of an asset. I love this. An asset puts cash in your pocket. Yes. A liability takes cash out of your pocket. Yes. So the only value that a rental property you own actually has is its ability to generate cash in your pocket. That's called free cashflow. Yes. It's got to have positive free cash flow. That's it. But a lot of people got caught up with like, well, the value of my property is that, plus

it's going to go up in price, which is that 40-year trend line we're looking at there. And now we're just here saying, well, what if that 40-year trend line is broke and it's over and we're in the opposite of that, which is 30 years of rising interest rates or whatever the equivalent would be. Totally different. Completely different environment. Your investment properties have to generate free cash flow. They do. And you have to be ready for the idea that if you're doing it on a typical,

say, commercial deal where you have a five-year and then it adjusts, you better be thinking about does it still cash flow when it adjusts to twice the interest payment. You just have to factor in that. Actually, let me be softer. There's a number at which this thing no longer cash flows. That's right. That'll be an interest rate you can calculate, and you should say, oh, how likely do I think that number is? Yes.

Yeah? And wherever that is, if the bank will give you the opportunity, pay the intangible tax and lock it in for 20 years instead of doing five, right? So especially now, because the risk is the interest rates go up dramatically. And I'd rather lock in for 20 years and that risk is on the bank. And if rates go low, great, I'll refinance lower. Then to have a one-year ARM or a three-year ARM adjustable rate mortgage. That's what the acronym for ARM is. Yeah. Or five-year, and then you wake up and you're renewing at 15%, 16%, 17%.

Yep. All right. So I think, again, we've been hammering on this for a while in a few episodes, but I think it's really important to just mentally think through, what if this is a break in that 40-year trend? Yeah. And it could be for reasons we're going to get into in just a second this is actually a pretty big deal the the poison easter egg that janet yellen left in trump's lap starting today the 21st we'll get to that in just a second uh um this was one that surprised me because this was under that same thread by Braavos Research. I didn't know this.

And, Paul, I am an astute gold investor. I tried the gold market as well like crazy, and I had no clue when this came out. So get this. He writes here, since March of 2020, gold has outperformed bonds by 100% amidst surging government spending. So there's two things on this chart. One is just government spending, a black line, the red line. Um, yeah, the red line is gold divided by TLT, which is the 20 year treasury thing. So it's just showing if, if the red line is going up, that means the gold is performing better. Yes. Then TLT. Yes. Okay. So, but look, what caught me was this, the correlation.

I hadn't run this one before. Gold divided by interest or, you know, the cost of those bonds compared to government spending. That's a pretty tight. It says that the more government spending you get, the more gold's going to go up in price relative to bonds. Well, in seeing this, that's a correlation I'm going to start tracking, actually. Yeah. Because what have we talked about? You know, gold is breaking out for the past several years. You hear news of China apparently bought a lot more here recently. You know, foreign central banks, China, Russia, the BRICS are buying. Interest rates are going up. Gold prices are going up. You know, dollars going up, gold prices are going up. We've all debated how in the

world that could happen because that's something that's not happened in the past. And this is a correlation I want to pay attention to because it's tracking that really, really closely, close enough to where there is enough to pay attention to there if government spending is to reverse dramatically. Yeah. I'd like to see it updated because just by eye, it kind of looks like it ends in 23 or maybe late 22. And by the way, I know it's outdated because it says government spending has risen from 3.4 to almost 4. It's now 7.

It's almost 7. So it's just in a year and a half, if that ends in mid-23. Yeah. I want to see that updated and see if that still holds. But point I would take from this is that I know government spending is now really locked in. There's very little. I know Doge and all of that, but you and I went through that flow chart of government expenditures. And you're kind of like, well, no, we can't do anything about the interest payments.

Eh, can't really do anything about Social Security. Like, once you start crossing through what they can do, there's like this little tiny thing they're going to have to just like monkey hammer. Well, what about the areas where there's, there's built in fraud? Maybe some of these areas that they've, or not necessarily fraud per se is, but lining their own pockets. I mean, I have clients from consistently, cause I work with so many retirees that'll have events or knee surgeries, and they're just talking about all of the excess expenses that's in the medical process.

And I don't think that's enough to dramatically reverse that chart. No, I'm sure there's efficiencies that can be gained, and I'm all for them. As a taxpayer, I just hate inefficient stuff, right? So that would be fine. Now, in that same series from that tweet thread or X thread, whatever we call them these days, Braavos was pointing out to you that treasury bond issues, right? They're going to have to, like, they're called private treasury. They have two part of, they have a public and a private component. So anyway, just massive, like huge amounts of bond issuance. We know that's

coming out the door. And the reason that's so important is, you know, we have this Kabuki theater every year where they raise the debt ceiling. Like, okay, that's it. That's the ceiling. And to me, ceiling is something tangible and firm. Yes. Something that never has a ceiling because you always raise it is not a ceiling. Well, most Americans experience a ceiling on their credit card debt when they start spending too much money. There is a cap. It's a ceiling. Go above that. Yeah. So anyway, we have a dead ceiling and it turns out that Janet Yellen, how do you say it in the South? Bless her heart. Bless her heart. She's as dumb as a box of rocks is what we would say here in the South. She's got that little grandmotherly act.

Don't fall for it. Oh, no. Steve Bannon writing, you can't make this up. Yellen tells Trump we hit the debt ceiling on the 21st day of his second term. That's today. Yeah. So we had talked about it back in the summer. They're going to run this economy hot as much as they can,

and they're going to try to hand him all kinds of trouble. You can't tell me that she didn't know that this was coming. Yeah, as much as they can, and they're going to try to hand him all kinds of trouble. Yeah. You can't tell me that she didn't know that this was coming. You can't tell me that she didn't prep for this because, you know, some of the reports that are out there claim that her issuance and spending money like she has in the Treasury is even more impactful to the markets than what QE were. And now she's run hot, running empty. Here you go. Huge amounts. Wait a minute, wait a minute. I think you had a chart in here.

I'm going to find it because that just. Yes. It was this one, right? It was that one right there. Yeah. $15 trillion. The only U.S. So that's Janet Yellen.

She's the Fed vice chair chair during that first big box, right? Yeah. $0.8 trillion debt increase. That is a monotonically stair steps up. But then look at her as treasury secretary. $8.4 trillion. So the statistics are, and I don't have a lot of paper here somewhere, but somewhere in the neighborhood of, so she is the only government official who has presided over an expansion of our federal debt by $15 trillion between her time as Fed vice chair and chair and Treasury secretary. Wow.

Unbelievable. Fed and then going to the Treasury Secretary, because what that allows the Treasury Secretary to do is run whatever games with the Fed that they wanted to run behind the scenes before, and it gives cohesion between the two. I would rather have somebody that's not coming out of the Fed under the Treasury. All right. Well, we should take some of that nice Georgia marble, etch this into it, and in 800 years, this will be in the British Museum with a placard under it that says fiscal vandalism. Yes, yes, that is. This is vandalism. It's vandalism at the expense of the American people, at the expense of critical, at the expense of the least fortunate of the American people. Yep. I agree. So, okay. So first up, though, this doesn't mean we run out of money today, later this afternoon. The Treasury has a cash balance right now. I went to the daily Treasury statement, the DTS, pull it down, they chart. Look, we have $650 billion in cash in the kitty right this moment. But when you hit the debt ceiling, you can't issue more debt. So how long is $6 650 billion going to last? Sounds like a big number. Well, that used to be two years of deficit. I mean, no longer than a week ago, it was 680.

Right. Yeah. 680. So I pulled this other thing, the deficit tracker, Paul, through 2025. So the fiscal year starts October 1st because it runs October through September 30th. So those first three months, which would be October, November, December through December, that was $710 billion of deficit spending so far. So how long would $650 last? Now, April's coming, but that's not for four months from now. So it'll probably last a couple, three months. And then we're out.

Then we're out. Out of cash. Then we, a couple, three months. And then we're out. Then we're out, out of cash. Then we have a massive crisis around June. You can't even let that get to zero, though. You can't spend that to zero because they have to. So here's what would happen if the Treasury runs out. Let's say they say, oh, we'll keep $150 billion in buffering, but they don't actually know what their expenses are going to be and what bills come to. They don't really actually know. Auditing, their accounting standards are terrible. So they know that you can't renege on the interest payments. So when an auction comes due, let's say a whole

blob of 28-day bills come due, the government has to give that money back on that auction day with interest, right? So that's just cash out the door. And if they can't roll them and increase them like they need to, this money runs down quick. The last thing they can afford to do is allow the treasury auction to fail or to not make an interest payment. And by fail, I mean, they have to roll these things over. And if people start to think that they're not going to get paid, treasury auctions begin to fail. They begin to fail, which means rates go up to the point that people are comfortable carrying the risk associated with it. And then that throws a massive wrench in the rest of the economy. Well, I use Treasury Direct, which is a direct program where you can have money come out of

your bank account or a brokerage account, go into the treasury and come back again on a routine basis. It's got good interest, way better than what my bank can offer. So I use it. But, Paul, as soon as I suspect that there's some brewing problem, I'm backing out of that program. Yes. Yeah, because you're not going to be bidding on that price. They're going to fill your order first, and then somebody else is going to get a higher price, right? If enough people back away, they have to go to the next level.

So the interest rates go up, and then it begins to spiral. Okay. But most people don't know this. And that's an intentional spelling error, everybody who's reading this. I like that. Trasheries. Yes, U.S. Trasheries. That may be something that sticks for some time, Chris, by the time this is over is Trasheries.

Well, you know, back in the day, they used to call U.S. government bonds Certificates of Confiscation. That's right. They did, didn't they? Mm-hmm. And that was because you were getting paid 6%, but inflation was 9%. So that money was just getting confiscated through the process of inflation and tax. All right. So what the Fed did here is they said, oh, we printed all this money, but now we're going to go into quantitative tightening, QT. They've been winding down their balance sheet. They look like good boys and girls.

And that's the story they've been telling. But the truth is, during COVID, they shoved so much money into the banking system that there was $ and a quarter trillion dollars of excess reserves just cranking around out there. And so that's the Fed's overnight reverse repo program balance, blah, blah, blah, big mouthful. But the point is that that's been getting worked off and walked down. That's the pool that they've been using to operate like quantitative easing. Paul, that's what they've been buying the trasheries with. Well, that's almost gone too. So Yellen knows this. She was involved in these programs. So she's watching this run down, doesn't do anything, engineers it so that there's going to be a debt crisis in the first minutes of the Trump presidency. And she did it on purpose, but this people need to know about. Yes. Well, and just because she looks like she's dumb as a box of rocks, again, to reiterate, she knew exactly what she was doing.

And she knows the impact on the economy because of her time as vice chair and chair at the Federal Reserve. Yeah, yeah. And moving over the Treasury. So this is just another area where they've handed him a ticking time bomb. And what makes me so angry about it is they don't care about the American people. They care about their own pride. They care about protecting their secrets that are back there. And let's just give them the benefit of the doubt and just say that it was like two parents that are warring, right?

And the kids just get caught up in the crossfire. And the parents don't realize until a decade later how much damage was done. But even at the inauguration, you know, we were sitting here pointing out, Trump had something to say and, you know, talking about Martin Luther King. They couldn't even stand up for that. They couldn't stand up and clap for anything that he had to do for the American people. Some things I understand because he pretty much slapped them in the face. But where's their dividing line?

Do they hate him so much that they can't even stand up to celebrate what he had good to say about Martin Luther King Day? Well, it's kind of like, you know, I presented this during a Signal Hour yesterday about Mark Milley, the general chairman of the Joint Chiefs of Staff, right? His position was Trump was such a bad thing that he had to do everything he could to help save our democracy. And I think they had that same point of view. And Yellen probably thinks, well, this is just me making sure that, you know, Trump is tangled up because he's bad for our democracy. Okay, can we just back up? Democracy means the will of the people. Yes. The will of the people was very clear in this last election. And this is her operating as if that's irrelevant. She knows better. She knows what the true democracy really

means. And it's something that benefits her and her friends, you know, and that's how I read this. That's why I get a little cranky about it because it has nothing to do with what's right for the country or its people. And this is my way of saying I'm expecting much higher interest rates because this, it'd get chaotic. It could get chaotic in a hurry, in a hurry. So, and the worst part is she's doing the damage to the people that she has no clue what it's like to live their lives. She has no clue what it's like to live paycheck to paycheck, to worry about where food's going to come as a single mother for her kids or a father that's had his wife pass away that's having to raise their kids. I mean, she's so disconnected from reality. And that's a problem with a lot of the elitists.

I think the only thing that keeps Trump from being so disconnected is when you're in construction, you're working with people who are the salt of the earth and they're working and they're working hard and they don't mind getting right in your face and hollering. So maybe he has a little bit more connection to the average person than anybody else in the halls of power. Well, it's an interesting thing watching, you know, who shows up at the rallies and all this and that. And I saw a lot of Trump rallies and I scanned the crowds carefully and they're just good heart, look like regular, ordinary, hardworking people. That's what it looked like. I didn't see too many deplorables. I didn't know what else. Hey, last time, switching gears here, we talked about

inflation. Remember, inflation came in one tick better than expected, and we saw 2% like explosion in the markets have been going up ever since. I don't know if you saw this. I'm going to surprise you with this one because I love this one. So Jim Bianco, Wasteland Capital said, hey, the dude at the Bureau of Labor Statistics who late last night rounded down from core CPI to 3.2 instead of up to 3.3 is the hero the market needed. And Jim said, well, core CPI was 3.248, which they rounded to 3.2. They rounded 3.248 to 3.2. Because if core TPI was 0.002 higher, it would have rounded then 3.25, which goes to 3.3. So get that 0.002% was all the difference

that they needed to just explode the markets higher and go crazy. Jolly. And we all know that that's still a twisted number. It's still, yeah, it's not correct. And the market is just like, woo. Yeah. Now, what was interesting, so we're on our fishing trip.

I was talking with Joel and his dad. They got cattle. And he said something that shocked me. So I've participated in a few, but I have old reference numbers in my head. He said live weight for a cow. I have numbers in my head. I said live weight for a cow. I have numbers in my head. I used to buy them at around $1. $6 a pound.

$6 a live weight. Wow. Like, you can't even grind it up without selling that cow for $12. I mean, for a hamburger. But, you know, those are ones that are meant to grow. $6. $6. That's incredible. All right. Well, anyway, here's live cattle price on futures. They're just screaming higher. A lot

of reasons. The herd is at the lowest it's been since the 60s. And obviously, populations doubled since then. So, twice as many people, half as many cows compared to then. And then first time I've run into this, we went to two local stores and there's no eggs here. And I've heard there's no eggs up in New Hampshire either. Yes. Oh, you heard in New Hampshire. Yeah. Locally here. Yeah.

Apparently south of here, there's no eggs too. One of my staff just told me a minute ago. How are there no eggs? I don't understand that. I don't ever that. I don't ever remember ever having, now there's been issues with snowstorm comes in and those shelves are cleared out in one day. A bread alert, a bread alert, bread alerts, bread alert. Two, three days later, the shelves are full because people buy, they're still gonna, they're not gonna just consume

it all in a day or two, but I don't understand how we got egg shortages right now. Well, beef, beef is going to be expensive going forward based on this. A lot more expensive. Well, I'll tell you one thing that's interesting. So some of the farmers I've talked to around here, you've had a lot of individuals move in from areas that were a lot more expensive. So they're coming in and buying some of these farms, buying out some of these older farmers that were done and want to be finished. And they're breaking all the leases for hay harvesting. So hay prices have been pretty expensive around here,

still continuing to go up. So all of the input costs are going up for everything from livestock raising as well, live cattle. Yeah. Processing costs. Yeah. Yeah. We just had a comment at Peak Prosperity on the site where somebody mentioned that they got a,

and they printed the whole letter that they got from their, they buy lamb. And the people who are processing the lambs, well, they raised them, but they bring them to a slaughterhouse. And they said the slaughterhouse jacked their prices in two ways. One, the slaughter cost alone went from $125 to $175 per animal, which when you're a small producer, that $50, you either pass that on or you eat it. They don't have that much. They can't eat that. So they had to pass that on. And the second thing was that now they won't pick up

the offal, the innards for sheep, and you have to pay to haul it away. It used to be they would take it and, I don't know, make it something new, something. And the regulations also said the farmer couldn't just pick it up themselves. So they have to pay a $30 disposal fee per animal. And so they were just like, we don't know how much longer we can continue doing this, but you're going to hear that story over and over again. And then you think back, Paul, to how the Dutch are crushing on their farmers, and the U.K. decided to make farmers responsible for some special inheritance tax, and farmers in the U.S. for some reason can't produce eggs or meat anymore,

and the small people. So I feel like this is intentional. It feels once as an accident, twice as coincidence, but if three times as enemy action, every time I turn around, and as you and I have talked, Evie and I got no eggs for three and a half months out of our chickens till we switched the feed. Yes. I think they put something in the feed or forgot to put something in the feed. Something about that feed stopped a small producer from producing their own eggs. Yes. Was that intentional? Look, we've known how to put

the right stuff in feed for hundreds of years. Did we just lose that ability all of a sudden? I don't know. I was so concerned about it because I've been growing chickens in the backyard since 2014. I've never experienced anything like that. I remember telling you I was building the list to make my own chicken feed. You can do that. I know there's some people out there that are doing it. And I changed my feed to Tucker Mill, Alabama,

and my production came back just like that, except for last night when we had eight eggs. It may be the cold weather, though, because we had a big cold snap. Pretty big cold snap. That can slow them up a bit if it's a big change. So I do feel like, yeah, food's going to get more expensive. Anyway, but there's a general theme here, Paul, that I'm starting to get going, you know me.

I think commodities are going to come back in. I do. And you were just saying some of your tools are starting to indicate they're getting excited. Yes. And I'm cautiously hopeful and excited. We've seen commodities raise their head quickly in the past and it fades out real fast. So it's kind of like, you know, infatuation that goes away, never turns into love. But this has been different than what we've seen since really 2013, 14, when the U.S. markets became the only place to be. This has been a slow gradual and something that actually surprised me. So I look at my tools and this main tool we look at weekly. Okay. So weekly is our signal on this because it's a long-term big picture. And when it crossed over, I was actually quite surprised, even though I've been watching it because it's been so gradual.

So this gives us the opportunity to start looking for and building entries into commodities. And I mean, we've had exposure to gold and somewhat silver silver's been kind of not added to new portfolios for a while because it's just been sideways since the big move so legacy portfolios have it gold has been continuing and a slow breakout again i really like what i'm seeing in gold right now as we thought usually optimistic yeah and and and if uh you know but we are we're looking for entries into commodities cautiously. And if this is similar to the shift that occurred after the 1990s, commodities were dead in the 1990s. U.S. equities were only thing the technology bubble. Yeah. Which is where we are again is technology bubble.

And for those of you out there that were shocked by your I'm not just talking about me, just talking about across the industry. I've heard from other people shocked at how their portfolios pulled back in December. Now, we had an overall market pullback, but what's interesting is coming into December, you had the Russell 2000 that was pretty strong. It was starting to break out again and take off, and then all of a sudden the Russell 2000 puked in December. So we're back to that magnificent seven run lead rally. And I think all it's going to take is for the technology bubble to burst. And it will at

some point, just don't know when. Momentum's a hard thing to do. I wish we could apply calculus to the momentum, but the human brain doesn't work. And math doesn't work that easy. But I believe there's going to be a flood of money come back into value and commodities. And I think we're on the verge of a generational commodity bull market. All right. Well, speaking of commodities, can I talk about my favorite thing, energy, for a second? Yes. So I don't know what this means yet.

I mentioned earlier that, you know, the executive order came out on January 20th, so Trump is ready. We know he's got the drill, drill, baby, drill thing going, but the point is that you can say drill, baby, drill all you want, but that doesn't make anybody drill. No. The oil business really you understand. Why would you carry the risk right now with the prices where they are? Exactly.

And the prices just keep getting like hammered, monkey hammered every so often, like they just did last night again. So the reason that saw's salmon oil and gas investor at the well level, and so I understand this business reasonably well, it's money. That's it. Like, if the price of oil went up, you'd find more people out there taking some of their marginal prospects, right? So like in a shale space, hundreds of thousands of acres, they know where the core tier one acreage is. And then they know it gets a little, it gets a little less like you, they've been drilling like in a straight line and it's

been good, good, good, slightly less, good, slightly less. And then it's sort of marginal. Well, that marginal territory is fine. If the oil is a hundred barrel. If it's high enough, it's worth the risk. If this, it's not, it's just, it's almost a matter of plumbing in some of these. They know what the pressure gradients are. They know how much you're going to get on a well. So how's he going to, I mean, that's great, drill, baby, drill. But how's it going to happen unless prices go higher? I don't see how it does.

So now we've got to come up with a program. Well, here's how we could make more come out of the ground. Starts refilling the SPR. Well, he did say he's going to fill it to the rim. You fill the SPR, strategic petroleum reserve, back up, and that actually causes more demand, makes the price go up, and then you get more. But oil is really simple to understand. It's price dependent, full stop. It's a very risky business.

Dry holes happen. It's one of the deadliest businesses you can be in from a worker's standpoint if you haven't watched Landman. Yeah, Landman's great. What a great show. That is on Paramount, take a peek. Yeah, Landman's great. What a great show. That is on Paramount, I think it is. Yes. It's great. And it's very capital intensive.

It just takes tens of millions to operate a single well over its lifetime usually. So, but look at this. He said, quote, the policies of the previous administration have driven our nation into a national emergency, which I wasn't totally, I tracked this closely. I wasn't aware we were an emergency, personally. Well, that's okay. On the verge of, though, they drew our strategic petroleum reserves, SPR, down to zero. So, that's like us having no savings with all the concerns we see in the economy. So that's one area that I could— But he gets to—yes.

And he gets to this one spot that I agree with. He said we're a precariously inadequate and intermittent energy supply. So he's just dunking on wind and solar again. And an increasingly unreliable grid requires swept into decisive action. So this unreliable grid, okay, yes. I mean, we just haven't invested in our grid in a long time. It's just shabby. Yes. It really is.

But more importantly, I think that's a wink to the fact that we're slamming in AI data centers. And I mean, these things are beasts, Paul. One, two, three, you saw Sam Alton come out and say, we need six, five gigawatt centers. So to put that in perspective, a city of a million people needs about a three gigawatt power plant. So he's saying we need to build six new American cities of about, I don't know, 1.5, 1.6 million people each. Wow. Just to run data centers. That puts it into understandable terms.

Yeah. That's just for the data center. Just to run data centers. That puts it into understandable terms. Yeah. That's just for the data center. Just for the data center. That's not counting the transformers, the lines, the metal, the construction. That's just for the data center. Yep. Five gigawatts, right? So anyway, so we know we're slamming them in. We do not have the grid there. We don't have the power generation. So I've been talking about nuclear for a while. I think that's pretty cool. But he says, this situation will dramatically deteriorate in the near future due to a high demand for energy and natural resources to power the next generation of technology. So this is where I get my little resource thing kicking around. So natural resources,

code speak for commodities, right? Yes. They classify, when they say energy, they're talking coal, oil, natural gas, nuclear, natural resources are all the things you need to get those things. Yes. In the first places. Right. So that's interesting. That's a very big shift. Paul, like the beginning of an actual energy strategy where somebody says, wow, energy is important. We know what we got. We know where we're going. We know what we need. We better find a way to get there. Yes. Yes.

I think that has huge implications for resources. I really do. It really does. And I would say if you're going to bring honesty back, you're not going to have market manipulators within the government. They're going to be short in certain commodities just to keep them down for the inflationary benefits. Yes. And let's deal with it. Let's deal with reality. Let's get it there. Let's get the new technology. Something will come along if we face the truth. Reality. I'm such a realist. I can't wait for reality to come back

and have a seat at the table. It's going to be amazing. Well, hey, he did say there's only two genders now. So reality is coming back a little, men and women. As a biologist, by training, I'm not at all unhappy with that. So, but look at this. He also, he's not afraid to poke fingers.

Quote, these numerous problems are most pronounced at our nation's northeast and west coast, where dangerous state and local policies jeopardize our nation's core national defense and security needs. So he's elevating it to a national defense frame and devastate the prosperity of not only local residents, but the entire United States population. 100% absolutely true. In light of these findings, I hereby declare a national emergency. End quote. So let me tell you, so...

I actually missed that. Yeah? I didn't realize you declared a national emergency. Yeah. It was invoked an emergency. Okay. Now, I live in Massachusetts, and one of my state senators has Indian heritage. Pocahontas.

Oh, that's right. Elizabeth Warren. But in the interest of saving the climate. I'm sorry, she's yours. I'm so sorry, too. In the interest of saving the climate, you know, what's happened is they won't allow any gas pipelines into the state. And I happen to live only one other state border away from the, if the Marcellus shale was a country, it's the third most powerful natural gas producer in the world. I mean, it is a prime field.

It's, it can give decades of really cheap, abundant, affordable, prosperity inducing energy. And because we want to save the environment, we haven't like no pipelines, right? You wouldn't believe like our state's like absolutely no, but we still use natural gas. You know what they have to do? They ship it down to Freeport. It gets converted into LNG to evade something called the Jones Act. It then is shipped to Barbados. The ship is either reflagged. I don't know what the mechanism is. And then they sail it up to Boston and then they offload it. And so our natural gas prices are the same as Europe's. We have shot ourselves in both our feet saying, no, no, we don't want any of that cheap gas. We don't want any of that Russian pipeline gas from Tennessee.

We don't want any of that crap, you know? It's shipped to Barbados before it comes back home? Mm-hmm. How much energy is wasted doing that? About 8% to 12% to turn it into a liquid into a first place. And then you lose about 1-2% transit because

they have to boil it off to keep it cool. But still, it's... So 15% is just a lot of match to it. That's gone. We didn't do anything with that 15%. We didn't plow a field, warm a house. We did nothing. We just used it to make it. But that's how stupid it is. So I think that's what he's talking about here is like, yeah,

particularly in the Northeast and the West, which is California, right? We've done, we have these stupid rules that are just brained in. Yeah. That's, that's, they harm the people who live there. That raises your cost of living. Because our gas and pipeline would probably be about $3, and right now it's $14 because of that shipping rigmarole. And all of the pockets that are being lined in that process back. Well, somebody has to pay for that liquefaction plant if you've seen them, Paul. These are multibillion-dollar and these are expensive pieces. Ridiculously complicated.

Ridiculously expensive pieces of equipment. So that's capitalized. That's part of the cost of LNG is that huge thing, right? Anyway, that's what he's talking about here. So, or you could put it in safely, have some revenue to the people that it goes across their property or pay them for coming in, bless the people, cover it up, keep it protected, monitor it, and cut the cost to the average American.

Gas pipelines run everywhere. They're not magic. We had that dialed in a long time ago. Yeah. Yes. Pretty standard. If somebody said we're putting a gas pipeline through your property, I'd be like, okay.

Yeah. Ring it through. Just give me a little taste. Yeah. I was going to say, can I have a free tap? I just want a tap. I just need a quarter inch line. I would negotiate. You'll never even notice it. I don't want royalties. I don't want free. Just let me have a tap. I would take that deal. But I think this is going to have huge impacts on the markets. I'm not expecting this to result in a bonanza of oil because I just don't see it working that way. Oil is going to have to go up in price.

But this could have really big impacts on how this stuff is distributed and used around. So this means pipeline companies, transit companies, you know, da-da-da. But this will probably result in, I'm a little concerned that we haven't quite thought through, even at this level yet, how much natural gas we have coming out of the ground versus how much we need versus how much we're exporting. So that's a whole other story, and I'll get into that in more detail later on at some point. But at least now we have, I haven't read anything like this in 10 years. No. Where somebody said, wow, energy is important. We better get this right.

Yes. Yes. And accepting reality as part of making the turn and making the difference, turning from our ways. And hopefully that's the direction we're headed in is we're turning from our ways. Yeah. And it's going to be good for the average American. Here's a question I'll ask you about the drill, baby drill. So is is it possible in this case he's clearing the way, getting rid of the regulations, this is what we want to do, mentally prep the drillers to drill,

make it easier for them to start tapping, all the red paper's gone, follow your environmental rules, basic cover, and then start refilling the SPR, Strategic Petroleum Reserve, and know you're going to drive that price up a little bit, but because you've taken the shackles off of the industry, you're going to have a little bit of a cap in that supply-demand. Do you think that's a part of his strategy, potentially? It could be. I mean, if he's really thinking long-term, you know, so the shale basins themselves are pretty well drilled up. I mean, there's more acreage to go, but we kind of know what's there.

Right. There's not a lot of surprises left. We'll call the contiguous 48. Most people don't know this, Paul, but at last count, and this was years ago, so we probably have to add a whole number to this. There were five million holes have been punched in the surface of our soil. Wow. So it's sort of the find it by Braille method. So people are like, oh, there could be more. I'm like, please point to this map where there are no holes already. Yeah. You know, unless we just missed a pocket or as deeper, but you know,

the 3d mapping on this now is extraordinary. I was going to say that they do it from satellites now. Right. And they do it on the ground too. But there's a lot of things they can do. So one of the coolest maps I ever saw, so I'm at this geology oil thing. And this guy said, oh, let me show you, because I showed some interest. He said, let me show you this map my dad made. It's from 1948. He unrolls a map the size of this table here. It's a big table. It is a big table.

Okay, whole thing. And there's all these little numbers, and it's just two counties in Texas. And you know what those numbers were? In the 40s, they had this really sensitive gravitometer that they would tow around behind a pickup truck, stop, wait for everything to stop settling, shaking, tune it carefully, take a gravity reading, move 100 yards, take another gravity reading. So they had this map of gravity readings because the salt domes, which would often catch oil, were less density than the surrounding rock. And if you mapped it right, he said, you see that?

We found this light gravity reading here. We started putting wells in. This is how my family got wealthy. That is amazing. Yeah. They made gravity maps in the 40s. That is incredible. To help find oil because it's less dense than the rock if it's really filled it up volumetrically. So they do all that kind of stuff, but the 3D mapping now,

they know this stuff cold. Okay. So Biden, in one of his last petulant acts, he said 650 million coastal acres are now off limits. Due to the coastal act, he invoked rule 12b to take it off the table, and now they're going to have to catfight to see if they can undo that. I think if Trump's thinking long-term, he wants to, he's on a mission, he's here to make America great again, you open that up. But let's imagine tonight they start out there with their seismic ships mapping. They'll find stuff, guaranteed. How much?

But even if they found some tonight, it's going to be five years before any starts flowing out of the ground because first is you find it then you got to get this big exploratory drill rig you punch some two inch holes just to see what's down there you go oh cool you map it as best you can then you bring out your your main drilling platform to make your production holes and then you got to either figure out how you're going to tie a pipeline all the way back or an offshore loading terminal to ship it in there's all this infrastructure it just takes time and it's the ocean and it's trying to kill you and sink your stuff yeah you know it's it's a business yes risky business saltwater eats that still like crazy it sure does it's brilliant what they do

problem uh you could do this anytime not Not a recommendation for or against, but if you pull up Transocean, which goes by R-I-G, rig, is a ticker symbol, destroyed as a company. So, we have almost no offshore capability left in the world. It's been skinny. It's just been hollowed the heck out. Because of all the policies that have happened in the past between the Obama administration, even prior to that, right? That I'm convinced if, Paul, if we could peel the covers back, we would find out. We know overtly that the Biden administration day traded the price of oil by dumping this reagent petroleum. They drove price down on purpose. They told us they were going to do it and it happened. So maybe it went that way. I think that there's strong evidence that there have been some other forces driving the paper price of oil down. So they wanted to keep it down politically.

Whether that's true or not, the price of oil has been way below the level that would incentivize offshore. That needs, in today's environment, Paul, 100, 110 to even begin to justify going out there after it. Okay. Right? There's only been two that I know about. There's one off of guiana really rich field not that deep you know not that technical you can get to it that one but honestly the world should have been drilling like crazy i think there's a lot off the east coast no less convinced about the west

coast but it'll be years before we get that yeah years so i don't know what you can do about drill, baby drill. If he wants more oil out of the ground, make it 110. More is coming out of the ground. Okay. And don't move quickly to get there for profits. And especially if you're not demonized for the profits that they're going to make. Yep. That makes a difference too. Yep. But, but that, that'll happen. It's coming. And then the other part of this is I, for the life of me, Paul, can't figure out how you solve this without nuclear. Well, and I don't understand why based on the limited amount that I understand about nuclear, it's a lot safer than the days

of Three Mile Island and Chernobyl. And then I remember reading that apparently China has created some type of technology that can shut down a meltdown. And they've tested it, correct? Well, they have what's called a thorium reactor. Okay. And that's a lifter, LFTR. It's a liquid fluoride thorium reactor. And it operates at 800 degrees Celsius as a liquid thermal molten salt.

Okay. And if it does melt down, it melts through a little plug they have in the bottom, and it gets into a swimming pool-sized containment vessel, and it freezes, and the reaction stops. So we have the technology to make it very safe. If it melts down, it actually stops itself. It stops itself. Yeah. Maybe that's what I heard.

And they operate at one atmosphere pressure. The Three Mile Island, it's a GE boiling water reactor. Okay. It has a containment dome it operates at many many atmospheres of pressure so that's something that's always looking to blow up anyway and um and it's just highly complicated very difficult to run ancient technology ancient ancient you know do you ever see that it's a picture the furthest one ever taken of earth it's not even a pixel and and it's from the Voyager.

That thing's a nuclear reactor. It's been operating since the 70s. And it's the type of nuclear reactor that's not based on boiling water. It's a different process. So there are many other types out there. We're seeing how small modular nuclear reactors based on what are called the stage four designs that are coming out. Right. Where you can build these things, pebble bed,

but the thorium is the most exciting. Okay. Most exciting. So we have the technology. All we have to do is embrace it and put it out there. We don't have it. China has it. China has it.

Okay. China. We don't have it. I missed that. Well, you said China had it, but I... We were able to buy it from them, but no, if we started over, material scientists have to be born and bred design specialists, nuclear. Like it's a whole different thing. Like we don't just have people you just say, MIT, you know, we need a you know, so we need a production crew.

So we're paying the price for what it was at 15 years ago. I think China was I can't remember the numbers. This made me think of it graduating 50,000 engineers out of the United States a year. And we were graduating, I don't know the number. I'm just going to pick. It was ridiculously low. I'm sure it's more than 5,000 engineers were graduating. I hope that's the case. But it was some ridiculous number.

And, you know, we had all these political science majors that were equivalent to what their engineers were. And now they're reaping the benefits and we're not. Yeah. Yeah. So, so this is an important thing. So I learned a couple of things this past, I wanted to talk to you about this one. I was talking with a guy who shocked me because he said, so what we were talking about was this whole thing that's going on with China and the U.S. and how we're not really as dynamic as we used to be.

And he said, did you know that China now has stronger intellectual property protections than the U.S. by far? Really? Mm-hmm. Wait a minute. I thought they stole everything. That for reasons reasons companies can choose where to file more companies are choosing to file in china right now they are the world's leading patent filers in the past few years because they actually have strong patent protection he

said here's how it works ever since citizen united again we shot ourselves in the foot which is a supreme court decision that says the corporations can act as persons and they have rights and this and that. And so it turns out that because of that, if you're a small inventor and you file a patent, it's yours. Paul, you've just invented the ketchup flip bottle top and nobody else can use that. Heinz just goes, and they just start producing it. And then you have to sue them. And you sue them and you sue them and you sue them. But some bean counter, and you sue them, and you sue them. But some bean counter at Heinz has said, it's going to cost us $500,000 a year to keep this guy tangled up. We're going to be making millions.

So it works out. Now, in China, if you violate that, they will actually find the living daylights out of that company or put the metaphorical bullet in the company and say, you no longer are a good corporate citizen. You're done. So the corporation, I'm a person, you're treated like a person. Yep. So you face real existential risk if you violate their property, intellectual property laws. Here it's some tangle-y thing and it's gourd systems and you know how it is. You get a bad judge and it doesn't matter anyway. So they have stronger protection. So now let's look at what's just happened. China has hypersonic weapons. We don't.

Yes. They have an orbiting quantum satellite, which has entangled photons, and they're communicating with it 189 miles away. And we have nothing even remotely close to that. They have the world's fastest supercomputer by far. They're making huge advances in large language models. And I think they're going to beat us because they don't make their large language models say there's more than two genders. They let their large language models work with reality. They force ours to certain preconceived things, right?

I mean, I'm sure you've seen the thing where people argue, would it be wrong? Would it be worth having a nuclear bomb go off and kill a million people or misgender someone? And they'll argue that misgendering someone's a worse crime, right? I know that's great. But that's, I mean, they don't, they don't hamstring themselves with that nonsense. It's engineers, scientists, I mean, reality. Honestly, they're dealing more with reality than we are these days. That's amazing to me. Now you mentioned about the patents getting sued. So my son submitted for a patent a year and a half ago. Great idea. Been sued five times.

What? And he was the first to file for the patent. One of the persons that sued him tried to buy him, offered to buy him out of the patent to begin with. He's young and he's aggressive. He's like, no, I'm going forward. I want to try to make money on this. And it's just crushed his goal of trying to do it because he's young and doesn't have the capital to go find all this.

So I know a real world experience of that. And this isn't a technological advancement. This is just something that makes it a little easier for people to clean something. Brilliant idea that nobody's thought of before. Well, guess what? He could go file in China. And that's exactly what he needs to do. And that's the dynamism that's been lost.

And that's exactly what I think is wrong with the United States right now is this corporatism, whatever, right? So if they want to feed red dye number three to your kids and harm them, well, that makes them a few extra pennies. That's fine. That's what they do. Like, we've lost our way here. We have morality, integrity, right, wrong. And what was it Trump, if I remember correctly, he said something about the rule of law is going to apply to the average person just as much as the wealthy. And that's the problem with our country right now is these, the powerful are able to tie you up in the courts and the courts aren't just for the average person. They're not serving the average

citizen. They're serving the interest or the corporate interests that are out there, the political interest. Well, I actually think our sense of justice was hanging by a thread. And then Biden came along and pardoned his family, Fauci and Milley and, oh, and the whole J6 committee who committed felonies, ruining lives. There are certain things that are unpardonable in my world. Oh, absolutely. And a pardon, Paul, to me has to be predicated on you were charged, you were convicted, and you showed appropriate repentance. None of that happened. So, I don't think one American out there, unless you were a Satanist, would be okay. Okay, let's say President Biden comes up and says, I want to pardon this individual that had ritualistic sacrifices for 150 babies.

OK, I'm not saying somebody did that. I'm just using the example because we don't know what they've done. Just an open ended pardon. I think half this I think the large majority of this country would turn this country upside down if our president pardons somebody for something like that? And you're having blanket pardons across the board for any action? And then Fauci comes out today and says, I did nothing wrong, you know. Well, why did you get a, why is he giving you a pardon if that's across the case? And look, Trump stood the test of the courts. He stood the political weaponization and came out the other side of this. If they didn't have anything to hide, they could have come out the other side of it themselves. Well, there is an earlier Supreme Court decision from the 1900s, which said that an admission of a pardon is an admission of guilt when you accept one.

Okay. Right? It's an admission of guilt. Admission of guilt. It can stand in court as an admission of guilt. So, I think that Fauci has now admitted guilt on some level. That's fine. He's free from federal laws. That's not free from state laws.

So now I think Missouri is free to say, hey, you just admitted you're guilty. I hope. I hope so, too. Well, no, because the appearance, if not the actual reality of fairness under the law is really important, right? You have to have that because if you and I suddenly, and everybody in the community suddenly believes that laws no longer have any value and they don't matter and they don't apply, things get lawless quickly. Well, Chris, I even now don't believe that if I got crossways between a billionaire, I don't believe that I would win fairly in a court because they're going to lawfare me to death.

And I don't have the funds. You know, I could spend everything that I had. And it's a blip on a billionaire's screen. Much less a politician because they've got the courts and the connections and the funders that are there. Yeah. And I don't know many people out there that believe that they could stand up and get justice in that case. Well, it kind of moved on from the public consciousness, maybe not everybody's, but that's the Luigi case, right? So here's this kid who feels like he has no other recourse.

He feels he's been wronged heavily, and so he kills the CEO of UnitedHealth, right? Oh. Brian Thompson, right? So he's Luigi, whatever his name is. But anyway, everybody knows him by the first name. So as JFK said, those who would make peaceful revolution impossible make violent revolution inevitable. And there's a lot of wisdom in that. So people are like, oh, he shouldn't have shot the CEO.

And I'm like, listen, I agree. But tell me what his options were. He had none. What other options were there? Sue him in a court of law, which is rigged against him? We would never see it. The media, do you think they're going to support that case? In no way whatsoever would the media go after it. They're going to try to cover it up because the advertising dollars they may lose. Well, now all this does tie back into

portfolios and markets. You know how it does? Because trust in the system is really important for it to keep operating. What we're describing, like that was one of the most singular damaging blows to the trust of the nation that what Biden just, or it wasn't Biden, we all know he's demented. I mean, whoever his handlers were thinking, you know, it'd be a great thing. Let's pardon all these miscreants for stuff they hadn't even admitted to, let alone been charged with, going back to January 1st, 2014. Kind of a sus moment there. And your entire family.

Except for your wife, I guess. She was the only one that wasn't put in there. Hey, I heard Janet Ellen was changing her name to Janet Biden. Sorry. I saw that on Twitter yesterday. I can't remember who to give it credit for, but I thought it was funny. We're all Bidens. Yeah, I was going to say,. I can't remember who to give it credit for, but I thought it was funny. We're all Bidens. Yeah, I was going to say, all you can do is laugh.

I mean, what's to keep? So now I find if the courts allow this to stand, if the American people allow this to stand, then if I'm a crime family, if you're a drug lord, you better head. I'm not saying that I want this to happen, but I'd go straight for the office of the presidency and then just pardon everybody, you know. Right. That's not I don't that's not what the spirit of the law and the opportunity for pardon is meant for. No, no. It was a clear giant leap over, you know, established everything. They're squinting at it like it's almost like Nixon. You're like, no, it's totally not. Right.

And but it's not. So that was a retrospective blanket pardon. We're hopping, skipping a jump now from a prospective blanket pardon. Paul, for the next 10 years, you're absolved. Be a good boy, whatever you want to do, but you're absolved. But just golly, no, it can't. Be a good boy. Whatever you want to do, but you're absolved, but just a colleague. No, it can't be allowed to stand. And I don't—let's send the courts to deal with that. And who's—how do you take it there?

Well, this is a constitutional thing because it's kind of written in the—I mean, you understand the spirit in the letter of the law. The spirit of the pardon was the president at their discretion can show mercy upon somebody who I think has gone through this. They assumed those prior steps. You've been convicted, showed repentance and all that, right? Okay, fine. Now it's been stretched and mangled in this particular instance pretty badly. But it clearly says the president, not the office of the president or whoever is around him when he's incapacitated. So remember this? I'm so old, I remember this. Last year, the Justice Department said, oh, we were going to charge Biden, but he lacked mental capacity to be charged with a crime.

Well, if you lack mental capacity to be charged with a crime, do you have mental capacity to absolve other people of crimes? Well, I would suggest no. I don't understand the law, but that seems like a precedent has been set there that he's unable to make the correct decisions. Hey, and that does remind me, I've got to tell those listeners out there, one, it was a historic moment during the inauguration. Everybody's sitting in here,

and we're getting to hear Chris's live thoughts as the inauguration is going on. and then you did your signal hour yesterday right after the whole team sat up here evie was in here with us the whole team sat up here and watched chris and we were just like military it was incredible just to see you pull that together with all those thoughts go straight into the signal hours fun to watch it. It really was. Well, thanks for that. And thanks, everybody, for watching this. We went a little off the reservation at the end there. But these are historic, momentous times.

And so they are. They really are. And we'll be back analyzing this and trying to make sense of it all. But let's keep our eyes there. Two things I want to say before we go. One, Chris Martinson can cast a fly rod like a pro. I got a chance to see him cast, and I was very impressed. And you caught some pretty massive fish.

That was so special. It was a good time. We were freezing. The sun came out, but I think when we left at the end of the day, it was 28 degrees, right? And we were standing on the river and it was snowing. Thank the Lord that it didn't rain. But when we got in the river that morning, it was 40, 42, somewhere around there. So that's when cold front was coming in.

Yeah. And the second thing that I want to lay at the end of this is all of these issues, and this is something we can pick up next week because what concerns me, especially watching the inauguration and just the level of disgust and refusal to come together as a country, what Janet Yellen has done, the Strategic Petroleum Reserve being drawn down, all of these potential grenades that they have laid in the lap of Trump coming in, from my perspective, means that more than ever, we need to be diligent about the risk of the great taking. Absolutely. And I know we don't need to jump into that now because we've had, but we can follow up with that next week. If there's any time that I am concerned about it more than any, and just to be diligent, right, is now. Because this is a period of time that I believe that those, the prior administration and those enemies of Trump and that refuse to accept the will of the American people would love to see it blow up on his watch. And they would do

that. They're petulant enough. If they're willing to run the treasury down to zero and leave a giant mess, what are they unwilling to do? Nothing, as far as I'm concerned. So, well, thank you for listening, everybody. Great conversation, Paul. So if you want to talk with Paul and his team, possibly taking a call in this very room or visiting here, please come to peakfinancialinvesting.com. Fill out a simple form. Somebody from Paul or his team will be back with you within 48 business hours

and get the process started. So with that, Paul, good to see you. Good to see you. I've enjoyed the fellowship. Me too. Bye, everyone.