Peak Prosperity - Weak Employment and Housing, Yet a Massive Stock Market Advance + Volatility Crush. What Gives?

Episode Date: June 13, 2025

Employment growth is very weak and there are plenty of worrying signs in both these numbers and housing. Yet the past nine-weeks have seen an absolutely monster of a stock market rally accompanied by a record-setting volatility crush (-63%!). Are central banks directly intervening to set market prices?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. If the dollar does crack like Trump has stated that he wants it to have because of his desire plus of structural issues with what's going on fiscally in our country, there is a lot of upside potential in the metal space, a lot. And in our country, there is a lot of upside potential in the metal space, a lot. The following is the audio version of a video released at peakprosperity.com. Visit peakprosperity.com to watch the video and to find other insightful content such as articles, discussion forums, and exclusive subscriber-only content. Hello everyone and welcome to this episode, edition of Finance U. I'm your host Chris

Martenson today back with Paul Kiker of Kiker Wealth Management. Hey Paul, good to see you again. Hi Chris, good to see you as well. I just love our conversations and it's that time of the week so we'll have another one here. I want to talk about these crazy markets that time of the week, so we'll have another one here. I want to talk about these crazy markets and I've got some data around just how crazy this has been from January to now. Also the jobs are weakening.

We got to talk about that. Jobs being a leading indicator. You and I have sort of been poking around these recessionary things, which, hey, recessions happen, but our markets are still wildly expensive by every measure. So that can be a volatile combo. Housing is weakening as well. Of course, it's kind of a local thing, but I think nationally it's doing that. And then gold and silver. Does that sound good?

That sounds great to me. That gives us plenty to talk about there. Yeah. All right. So crazy markets. Let's, let's dive in on, on crazy. This I found unbelievable. So for anybody listening, volatility,

as Paul and I have talked about in the past, is measured in the markets. And volatility, if you took math or anything, you understand it goes both ways. It could be, it's volatile when things gyrate up and down. Something that's calm is just flat. Like you might think of a volatile ocean if you're a sailor or a boater.

A volatile ocean is one with big waves and waves have peaks and troughs however in the markets Volatility has been twisted to only mean a volatile market is one that's going down and a Unvolatile market is one that's going up So it's kind of a weird thing get your mind around it But I found this shocking when bar chart posted this couple days ago, Paul, that the Chicago Board of

Exchange, the CBOE Volatility Index plummeted 63% over the last nine weeks. This is the largest volatility crush in history. In history. Paul, stocks rose the most in history because, you know, in essence, because the volatility declined the most in history because you know in essence because the volatility declined the most news I don't think stocks rose the most in history, but it was a pretty powerful climb It's actually one of the I think the third largest anyway. It's pretty big pretty big rise What could have caused so many people in the market if we're using a fair market analysis to? Suddenly decide that these are the safest markets ever in history, no volatility. How do you look at that? Well, I look at that as, well, I don't know if reflexivity is the right term, but it's

basically going back to what was working before. So one of the trades that's worked really well with the feds stepping in time after time in the past has been to short volatility. So there's hedge funds out there and there are retail traders that are shorting volatility betting against. So that drives the price down. And it's just a belief that maybe this time is different. I think it's end of the cycle behavior is what's taking place,

because it doesn't make sense for volatility to be that low with what's taking place in housing, defaults increasing, everything under the surface has changed. I think this is just, we've got a market where you've got speculation, you've got institutions that have been, hey, it's a trade that worked,

so let's short volatility again. And then you've got the same thing that's taking place on buying the mag-7 and chasing this market right now. I think it's just classic late cycle behavior. Okay. But from where I sit, I'm thinking maybe there should be room for a little extra volatility because you got a whole new administration with a very, very different sort of an outlook on things, which let's be fair, could work, might not work. We don't know. So that normally uncertainty like that would lead to a little more uncertainty in the situation. This says we're more certain than we've ever been.

And I just found that a little, a little odd because, you know, if they said, well, this was a pretty historic crush, it was, it was a pretty big crush of volatility that'd be one thing but this is the largest volatility crush in history. And history. Yeah. At a time where where we still don't have a resolution to the China trade deal you've still you've got the war in Ukraine and Russia that's continuing to escalate. I mean everything has changed under the surface,

but investors for whatever are speculating that, that Trump's going to continue to keep his name taco. You know, Trump always chickens out. That's where that came from. And there's just this belief that, that between Trump and the fed, that they're not going to let anything happen. And I think that's what's causing it. Okay. All right. Well, it's kind of a weird thing. Now, now, now anecdotally, but I live by the anecdotes at these, I consider this sort of a turning point, right? Either it's better than we expect or worse than we expect, but we're kind of hovering. Paul, I've had a lot of conversations with people and have heard about other conversations other people are having, which is long some version of that, that people aren't buying into this rise of the markets.

They feel nervous. They feel it's fake. They feel it's artificial. It's engineered, but they're not believing in it. You know, and I'm hearing that from people who've I think done quite well being in it, but I'm getting more and more concern. And I don't think it helps that you have people like Ray Dalio and Jamie Deeman, as we talked about last time, you know, big financial types coming in going, hey folks, this is starting to look a little dicey over here. So I don't know. I'm just, I think that largest volatility crush in history is some people aren't buying it.

No. And there's a belief, I'm seeing belief, but a lack of action in the belief. Because people are frozen when the markets run like this. And we've had a lot of things that have happened. Market got lopsided. There was a tremendous look at that volatility index on the top. A lot of people were trying to buy protection against their portfolio at the worst time. Right. So where we are now when people should be buying volatility to protect the portfolio, not a recommendation for those of you that are out there, we're just having a conversation here. Where they should be buying volatility, they're not. But there's also a lot of individuals that

are very concerned about the market. They don't believe that this is sustainable. But they're also scared to do anything because there, you know, so many times in the past, the market looked like it was going to roll over, the Fed steps in fiscal responsibility, and the market's off to the races again, that they're scared to be on the wrong side of the trade. So I think there's a lot of discussion and fear, hey, is this going to continue? But there's not action yet. My concern is, is that by the time we get into September, we should see some weakness. Now, how much is that weakness going to be? I don't know.

But the market, I believe, and market participants, based on the data and what's taking place under the surface, what CEOs are telling us, housing market frozen, consumer sentiment negative, that the market is mispricing risk and it's going to adjust itself violently at some point in the next 6 to 12 months. All right. Well, let's look now at metals because I want to touch on gold and silver right now. Well, platinum too, I guess, at this rate. So and palladium. Yeah, so, so check this out. Platinum doing up from 1000 just earlier in mid May to 1200. So that that's

a pretty commanding 23%, 24% climb knew that math in my head, but silver had a big breakout. That was the former moment there. Um, it, it like, it just, it just gets sold in the U S markets almost daily at this point. Uh, in gold there at 33, 64 it's been parked there for, I dunno, since mid April or so it's just sort of parked, but you can see it making a flag here. And so two things I wanted to point out about that Paul real quick. Um, first would be gold. So this just comes out in the Financial Times. Get this gold is now overtakes the euro as a global reserve asset. It's now a larger number in the reserves as a monetary

asset than the euro. For the central banks of the world. Wow. I did not know that. That's pretty impressive information. Yeah. Overtaken the euro as this world's second most important reserve asset for central banks. So wow.

That's a pretty big deal. That's a big deal. That's a really big deal. It is. It is. Important message there. And then silver SRS Rocco report on Twitter reporting says quote step aside Western silver ETFs powerful Indian silver ETF demand Surpasses iShares SLV and Sprott PSL V ETF meaning that not surpasses

You know, there's there's only 56 million ounces in the India You know, there's there's only 56 million ounces in the India ETF they have 14 separate 14 ETFs here I guess you can see there's like what 494 million ounces in COMEX and 56 here So it's not the biggest cat on the block But when you look at the daily change 8 million ounces piled into India 1 million into iShares 1 million into What's this one? into India, one million into iShares, one million into, what's this one, SSLN, and this was SLV. So by far, India was the biggest vacuumer upper

of silver in that last, yesterday. And then on a four week basis, it's not near the top because it turns out SLV is vacuuming it up as well. You see comics is hemorrhaging out SLV is vacuuming it up as well. You see comics is hemorrhaging ETFs are vacuuming it up and Overall 32 million ounces in the last month is going into these things, but but that India's now Vacuuming up 8 million ounces at a pop there in a single day. I thought that was a good find That is a good thing. That's Indian investors, right? Because there was, there was discussion that India was going to follow Russia's lead in,

and utilizing silver as part of their strategic reserves. Yeah. I can't remember exactly. I don't, I have not seen the announcement that they have stated that, but there was discussion around the India as a government was going to do that. And by the way, all the way in the bottom, Japan at 53,000 ounces, shame on you. I know people who have more than that, okay? I know individuals who have more than Japan, okay?

So get busy. But the other thing I want to point out, Paul, is that the combined total, shaky pinky finger, $60 billion of total value of all the known available investment silver. Sixty billion. How much is that in Federal Reserve printing terms when they get going? Is that two days or one day? Is it a day? Two days? So wasn't that, so wasn't it a six-terrier percentile? Sixty billion. Eighty billion dollars worth of a treasury's last week it was? Ten billion. Ten billionasuries last week it was 10 billion 10 billion last week, but it was 10 billion just in one auction, right? But yeah, okay, but 60 billion. I mean that's just a little bit more than than Elon paid for Twitter

I mean like a single one of the top wealthiest people could vacuum up a hundred percent of the silver if they wanted to Right easily. So there's just not that much out there I mean, that's my point is that is a thin market when the total known worldwide stocks add up to 60 billion. That is Trump change. That is a thin market. And especially with global liquidity flows, you know, potentially coming back at some point in the future and fiscal responsibility with other governments, there's a lot of upside potential in silver. A lot. Yeah. And that was a clear breakout that we had on silver as well. I mean, I was very impressed with what happened

with silver's breakout. It was solid. Yeah, me too. It was confirmed. You know, and what are we, I don't know what the ratio is right now, but we were recently 100, you know, 100 times gold, or gold was 100 times silver. If we were to move anywhere back to that 15 times historical number that there's been throughout history, it's just not popular yet. It's just not popular yet. You know, but we start to see the dollar crack, and we're not going to see reversion to mean, I think we're going to see a change in structural capital flows. And if the the dollar does crack like Trump has stated that he wants it to have because of his desire plus of structural issues with with what's going on fiscally in our country there is a lot of upside potential in the metal space a lot

there's two reasons I think that Paul the first is fundamentally silver from a supply-demand standpoint unbelievable same thing going on in platinum right The first is fundamentally silver from a supply demand standpoint. Unbelievable. Same thing going on in platinum right now. Same thing going on in a variety of other metals, right? There's a big problem in the aluminum market with supply right now. So there's just been a very low level of fundamental investment in the space. And that's also happening in oil right now. They're stacking and bagging the rigs out there because they can't do oil at these prices, right?

Now, oil's up sharply today, a little over four and a half percent, but oil companies to unstack the rigs and put them back in, they need some consistency. They're going to have to see a higher price. I submit a 70, 80 bucks for a sustained period, six to 12 months before they go, okay, right? They're going to have to trust that. So a couple of days doesn't do it point being fundamentally we're gonna be facing some shortfalls across some key things silver among them and then on the other side there's the other part of that story which is that silver and gold in fact any commodity is

kind of the anti-dollar so when the dollar falls they go up in price not because they went up in price but because they're traded against the dollar on the open market and so so there'll be both of those components weighing in so if the dollar relief tanks at the same time that silver gets into a fundamental shortfall you could see some real fireworks particularly since last I heard 700 million ounces short by whomever paper players on, on the comex. And if they have to close those out, Paul, on paper, it's going to be some terrific losses

there for them. There will be some terrific losses. There will be. And they'll be forced buyers if they're starting to get margin calls on those shorts, which means whatever the price is, they're going to have to get to cover. And that's one of the reasons why silver tends historically follow behind gold moves, but it plays catch up violently and very quickly. So, you know, hey, it broke out. We've got a confirmed breakout. Murphy's Law is going to be, you know, for those that are looking at the long term picture, who added it to the portfolio may necessarily not be rewarded the next 30 to 60 days.

But when we're looking 6, 12, 24 months from now, very similar. What was it a year and a half ago when we were talking about the major breakout that we had in gold prices and it being a big deal and it's been persistent in its move, there's not been any panic buying. But gold was telling us over a year ago that something structurally had changed. And now we're starting to get silver to follow along with that as well.

So we'll find out in the future, you know, what's taking place underneath the surface, but demand is certainly starting to pick up in that area. And could you imagine what the prices would be if there wasn't something like Bitcoin that claims to do the same thing that, you know, Bitcoin's a hedge. It was designed to mimic what gold and gold does specifically. If that wasn't a relief valve for some of those capital that would be chasing gold and silver at this point, the prices would be

substantially higher. Absolutely agreed. Paul, we're going to take a quick break when we come back. I want to talk about the leading indicator in this story for recession, which is jobs. So we'll be right back. The markets are unraveling and the stakes could not be higher. If you're relying on passive strategies or so-called diversification, or perhaps using an advisor who was, I don't know, maybe in elementary school during the great financial crisis, you could be on a collision course with staggering portfolio losses.

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and schedule your free consultation. This is your chance to protect your wealth. Again, that's peakfinancialinvesting.com and I'm Dr. Chris Martenson urging you, please don't wait another day. All right, welcome back everybody. Paul, I wanna turn now to this. Global markets investor on Twitter, June 9th, reporting that jobs have been revised down

22 out of 28 months. I would remind everybody that if we had a fair way of counting jobs, you'd miss some months to the upside, some to the downside. But 22 out of 28 being revised down says Maybe not the fairest of processes it tends to over bias towards jobs As it's doing the counting and then later quietly revises them down and by the way in 2019. I mean 25 219,000 jobs so far have been revised away. They were overstatedated so January was overstated by 32,000 jobs. I want to revise that backwards. February overstated by 49,000. Revise them down. March by

108,000 and then April by 30,000 jobs so we wonder what may might be revised down because it was reported I believe Paul that 139,000 jobs had been created in May. What do you make of this? Does this meet the new boss, same as the old boss? Like, you know, before I thought maybe this was the Biden administration leaning on the BLS to cough up rosy job numbers, because, you know, elections, all that.

But here we are just seeing the same behavior. What's going on, do you think? I don't know, but I was just thinking, as you were going over that data that nobody needs to pay attention to the headline number. They need to look at the revisions to get a real picture of what's taking place. And that's a completely different picture than what we've seen on the headline number when it comes out. And that's extremely concerning. Now, my thought would be if it got started and was embedded into the system to distort the headline numbers.

It's just continuing in the same. They're not changing anything yet. And unfortunately, based on what we've seen Trump doing is changing. He, I would assume he would want to make the headline numbers look a lot better instead of going back and making them honest because he doesn't seem to be too concerned about making everything as honest as he said that he was going to make it. Every politician likes to headline number to be larger, right? Yeah.

Particularly when they attach their ego to it and say, I did that, right? You know, big, beautiful plan is going to bring more people back in working. Well, how about this then, the Co-BAC letter here saying the difference, so there's two surveys out there, Paul. One is called the Establishment Survey, and allegedly they call up 60,000 businesses once a month and ask, hey, hiring or firing? And they ask a lot of questions. They add it up.

And so that forms our headline number, which is 139,000 new jobs, is the Establishment Survey. But they also call 60,000 households, right? And say, hey, how are things going? They ask the same questions. And so you can get two different numbers. survey. But they also call 60,000 households, right, and say, hey, how are things going? They ask the same questions. And so you can get two different numbers. The households reported 696,000 jobs lost in May, while the establishment survey was saying plus 139,000. So that is a huge gap. 700,000 gone, 140,000 added. Where's the reality?

And so a distinguishing point here is that the household survey is closely followed, data point, because it only counts workers once, even if they have multiple jobs. And so a real, another indicator is people who take part-time work for economic reasons, like the economy's weakening, and I gotta take another job, I gotta slap a second part-time job on. In, like the economy's weakening, and I gotta take another job, I gotta slap a second part-time job on.

In the household survey, they just say, do you have a job, yes or no? So if you are a worker, and you took two more part-time jobs, in the household survey, you still have one job. Whereas in the establishment survey, all those part-time jobs would show up as new jobs. So they count differently, right?

But that's a huge deterioration right there and big, big departure. So something isn't adding up here at present. I don't know, like all these people who maybe suddenly, ICE is saying, you know, I've seen all the videos of them going out to construction sites and people scattering and then rounding people up. I don't know if any of those are counted. I don't know how that might factor in people pulling out of jobs because they held them as an illegal migrant and have decided to check out of that job and leave. I don't know if those are counted or not. I don't know how they conduct the survey. So I could be a factor here, but I don't I don't know if those are counted or not. I don't know how they conduct the survey So I could be a factor here, but I don't know I don't know how they conduct the survey specifically when it comes to illegals in that circumstance either. Yeah, that's

That's just another warning sign where the markets are looking like it's just all a rosy picture. Everything's great We're off to the races again when in reality it's technicality of money flows and triggering through systems and options and gamma and all this stuff that we didn't have to talk about 10 years ago, because it's technicality of some of these systematic programs. And you know, and I saw something that was really good today. So it talked a statement about artificial intelligence.

It's obviously making an impact on how fast we can find data, the research that it can do, but the question was is it creative? And it was clear in the statement that artificial intelligence can't solve any problem that humans haven't solved already, at least at this point. So my concern is is you've got a lot of these automatic trading programs and systematics and the artificial intelligence overlay. You know there's big firms that are doing it. This based off of if A happens in the past, this happens in the future. So if, if the market's running and you, you know, in the past you were wiser to be passive and ignore some of this headline data. So it's

reacting to market flows and redeploying capital in spite of all the weakness that's taking place under the surface because we just haven't, you know, the Fed's been able to step in and save things especially since 2008 and if you played by the same playbook from 2013 forward that you did from really 1990 to 2010, then you were punished. So everything has basically been herded into, hey, pay attention to what the market's doing more than anything. And it's a feedback loop right now. And my concern is, what you're pointing out, just these distortions that are taking place in some of these surveys between the household and between the establishment, between terrorists, you know, even if they come to an agreement that they talked about with China today, there's still higher tariffs

in there. Housing's frozen. Everything under the surface has changed, but market and market participants are acting like it's the same playbook that we've seen for the past, you know, since from 2013 forward. I mean, we're trying to get a little intelligence here, a little market edge like everybody, right? So a lagging indicator would be something that

you see it in the future and it tells you what happened in the past and it lags a little bit. So corporate earnings, by the time corporate earnings show up bad, the recession has already really started. So it's a lagging indicator. But I wanna talk now about a leading indicator because those sometimes give you a little edge.

And it's in job market conditions. So temporary health services employment has dropped 666,000 or 21% since the peak to two and a half million. And so this is big long chart down here. You see these are five year increments starting in 2000. This is 2005, 10, 15, 20. Now we're in the 25 period.

You can see here right around 2024, three, it was peaking out at a little over three million and has shed 500,000 since then or 600,000 since then. So temporary. So often, you know, when things get a little shaky, people add more temporary, they don't really know. I'm not really willing to commit to a full-time worker. So I commit to temporary workers. Once temporary workers start weakening,

that's your leading indicator. So those have been falling. Well, and looking at that chart where we are right now is at the same level of the recession because I can't see the date on the far left side from what I'm looking at that chart where we are right now is at the same level of the recession because I can't see the date on the far left side from what I'm looking at, but that's you said 2000. So that's the 2000 decline right there. So that that's, you know, when we had our 2000 tech bubble bust.

And then here you can see it crashing into 2009 10. Yep. And then this is COVID. This here we are in levels. 10. Um, yup. And then this is COVID. We're at the same levels, we're at the same levels right now of what we were during the official recession of 2000 and 2003. Not, not that it lasted 2000, 2003, but the market decline over that period of time. Well, like they say here, such a drawdown never, never has not yet occurred outside of a recession. Maybe this time is different. Maybe, I don't think so.

And with the valuation of the markets and how expensive the price earnings ratios are, that's a big bet if you've got your retirement dollars in there and you really want to bet that this time is different. I think that's a foolish bet right now because we have to pay attention to data and reality and it may be wrong in the short run, but the reality is there's all kinds of warning signs

under the surface of the market, but the markets are partying like everything's gonna be just fine. So we got temp workers, we got households reporting, those are both down, but this one too, this is job openings. And by the way, you see this is, I'm quoting peak financial investing.

Hey, that's me. You can find peak financial investing over at Twitter or on X, as we call it now, at peakfin, F-I-N, INV, that's it. Anyway, so I put up this thread all about these jobs stuff we're talking through now, Paul, so if anybody wants to follow it over there go for it but check this out job openings are dropping so job openings we kind of have to have a job opening for somebody

to apply for job and note the scale here please so I don't want to commit a chart crime it's just how it got presented this is 2.6 2.8 3 million so this is not this is not going to zero. Please don't interpret it that way. But if Healthy was up around 3 million, we're 400,000 less than that now. That's all. So 400,000 fewer job openings for whatever reason. Well, and it's another data point that shows that things are slowing and that they're pointing down to the net. How can the consumer continue to be as resilient as they are right now if they're losing their jobs?

That's the big question. Well, and we're going to get to that consumer resilience in just a second. This was part of that same thread. And again, this isn't crisis levels yet, but not quite. So this is important. Steve Ratner on X pointing out that as of April, there was roughly one unemployed job seeker for every job opening in the US economy.

That's an important measure, you know, because as soon as you have fewer openings than seekers, then you have trouble. So you can see coming out of COVID here, it was real bad, right? There weren't that many openings, a lot of job seekers, but it's been a while since we've hit that magic number where there's basically one job opening for one job seeker. So the jobs are getting tight relative to, to workers.

Now, again, this is a big fat statistic, Paul. It might be that there's a lot of openings in construction right now for reasons we just described and you've got somebody seeking a job in tech, not a good fit. But on balance, this, as soon as that gets anywhere close to one in that relationship, it starts to get what we'd call a tight job market for job seekers. And you know what fits with that? This is again from Nick Garely at Reventure pointing out that this is the pace of employment growth.

And so here you can see it's at 1.1%. So yes, we added 139,000 jobs in May. That'll be revised down by whatever next month. But even taking that headline number, the pace, so we're adding, you know, it's much, much slower now adding jobs. You see we're adding at a really high pace up here, 4.9%. It's

all the way down to 1.1. And you can see the cadence, right? This is the 1990, 1990, 1991 recession right here. Here's that stock bubble burst of the internet craze 2000. This is 2009. That's the great financial crisis. That was terrible. This is COVID, which is just its own weird square wave with some sort of weird response, but here we are. And we're declining again. So just from a, where are we? Is this like, are we about that inflection point, Paul? Are we ready to shoot the moon? Or are we ready to take a break here

from a recession standpoint? Trend isn't your friend here. No, the trend isn't your friend here. Growth standpoint. And that's a good question. We're not going to know until time reveals, but the risks are high right now. And it would be one thing if the valuation levels of the market were half of what they are right now and this was taking place, I wouldn't be so concerned. But when you've got one of the most expensive markets in history that is euphoric, completely

ignoring all the concerns that are under the surface. I mean, if there was any concern by market participants, the volatility index should be creeping up instead of having this massive drop that you highlighted earlier because of what's taking place under the surface. So the question is, is it some technical trading program that's just piling on and feeding momentum to short the VIX and to squeeze these markets higher? Are they even paying attention to this data or is the market smart enough right now to really to really see far enough into the future to anticipate that that we're gonna get

the perfect scenario going forward but hope is not an investment strategy well what if and let me throw this out here because this is I like to consider all the possibilities in my differentials what if this isn't ordinary market behavior at all? And what if the Fed is busy crushing the VIX because they have we know the New York Fed has a trading desk Colocated in Aurora, Illinois with the CBOE. We know that they trade options. They won't tell us on what right? So what if the Fed's selling VIX knowing that when they sell the VIX crushes VIX, and then all these algos come in and buy the market, and that's the behavior the Fed wants, and they'll have a rationale, Paul, it's like,

we have to do this because we've learned that the stock market kind of is the economy, not the other way around. Like, we can, if we just hold this up, it kind of makes this happen too. Maybe that's where they're at, and then, you know, somebody might say, okay, well, if that's the program, that's okay. I know it's not disclosed and I know they're not allowed to do that. But if they are and it works, maybe they'll get it right again.

Well, that's a dangerous game to play. Isn't it? And that's criminal from my standpoint, because you're distorting all of the, if they are doing that, you're distorting all the signals that the average person and even institutions and pension funds rely upon to prudently allocate capital. So that would be, but that's a dangerous game to play if that's what they're, if they're actually doing that. And I wish we could know if they are.

But obviously there's enough money that's shorting VIX and probably a little bit as well of individuals that are scared to buy the VIX at this point because what you don't wanna have happen, let's say you're a professional money manager and you are concerned about this. So you buy the volatility index with a part of your portfolio.

And the market rips for the next six months on technical factors and volatility drops another 20%. Well, if you've underperformed the S&P 500, you're gonna have somebody in the C-suite that's gonna fire you and replace your job. So with a lot of these professional money managers, there is a lot of fear out there of losing their own jobs if they underperform

the index. So we've incentivized everybody to, you know, play the game by the rules that are forced upon you and speculate with the life savings of a lot of individuals out there in spite of what's taking place under the surface. So that would be criminal, extremely criminal if they were shorting the VIX without letting the market know it because they're completely distorting the signals and they're not gonna pay the price. I mean the Fed's not gonna pay the price that the average individual will if it blows up and they're not

prepared for it. All right, you ready for this? Hope so. Are you ready? So I just googled it up. I don't say that much. I usually grok things now See I'm going to the CME group here Paul. I'm just gonna click a link. We're doing this live, right? Central Bank incentive program Chicago mercantile exchange is where of course, you know all the high leverage options and futures are traded, right? And so we go down here and you see there's modifications here. But the purpose of this program is to incentivize central banks located outside the United States to trade in products listed on the CME. And they're such good product purchasers, they give them preferred pricing discounts

on e-mini equity index futures, bitcoin futures, e-mini DAOs, treasury bond futures, interest rate options, metals futures, gold, silver, etc. And these are good prices. I can't get prices like this so Paul the central banks outside the United States are such heavy purchasers or sellers of US products like stock futures Treasury options and gold futures and silver futures that they get preferred incentive programs now You don't give preferred programs to people who are not heavy users. These are volume players give preferred programs to people who are not heavy users. These are volume players. Not a single, and I've done this, not a single foreign central bank will admit to having

any of these products on their books. I've checked. They're not anywhere to be noticed on their balance sheets. And the one thing that the GAO is not allowed to look into is any transactions the Federal Reserve has with any offshore entities. So how hard would it be for the Federal Reserve? Yep, just can't. It's written in. It's a law. It got passed by Congress in 1983.

Can't look into anything like that. So how hard would it be for the Federal Reserve? Just maybe wire a few funds over there to the Bank of England and say, sure would be a shame if somebody sold the VIX right now. Well, you know, and you, all I can think of is you're explaining that's the coordinated on the headlines. You remember coordinated central bank intervention, coordinated through COVID, through all of these other downturns.

So what are you going to do if you're, if you're the U S federal reserve and let's say you can't do it on your books and you know it can't be all on the other side. Let's say you're the Swiss central banker and I pick up the phone. Hey, Chris, I got some issues in the market here. Can you short the VIX for me? And there's no way to disclose it. Or full-size agricultural contracts. Can you explain to me real quickly what interest a foreign central bank would have in, say, hedging ultra-US treasury bond futures?

Okay, maybe, maybe they hold some. How about Bitcoin? What, what, what possible reason would we have for a foreign central bank to be monkeying around with Bitcoin futures? I don't know That's a good question Did you say how about all the cultural futures were in there as well? Yep full-size AG contracts. Oh I mean so theoretically if you're an importer of agricultural products from the US, you could short the futures, drive the price down and get a better price for you, right?

Or drive our farmers out of business if you wanted to do our industry. If you're a legit importer, exporter, I understand. If you're a Singaporean corn importer, fine. Play around with our full-size ag contracts all you want, but why would the Singapore Central Bank want a monkey with our full-size ag contracts? I mean, this is just ridiculous to me, Paul, and it's just right there in plain sight. Like you just go to the CME website, and there it is. There it is.

That's amazing to me. Isn't it? Modifications to the Central Bank incentive program. So anyway, it's a thing. I'm a suspicious guy. You know me. I'm just like, but they wouldn't act like I can't. I don't come up with it's I have to struggle to come up with legitimate reasons for why you'd want to give that particular array of things. And again, for people who don't know, futures and options are highly leveraged products. So for a few thousand dollars a cost, I might control a hundred thousand dollars

of downstream product, right? I forget what the margin is right now in gold, like 15% or something. So $15 controls $100, or 15,000 controls $100,000 of gold. So $15 controls $100 or 15,000 controls, you know 100,000 of gold so highly leveraged and They can wang products around but this includes options on everything as it turns out. So anyway, it's just a thing It's just a thing to note. But what I see historic volatility crushes I Have questions And for political benefit

Yeah, political benefit Right. All right. Well, um, okay I got I got I think I got one more on on on jobs and this actually bothers me quite a lot because I Think that we're not doing our youths any favors in this country Saddling them with student debt making it non-dischargeable You know just printing money handing it out to cronies and on Wall Street, but this just showed up in Bloomberg the other day I think it's a terrible statistic the question. I'm asking is AI Starting to bite here. We see two things recent graduates in the light blue all workers in black

This is the unemployment rate so So five is 5% unemployment. And here you can see that Paul, almost always from 1990 through 2000 through 2010, except for one little point here, right in 2019, where things were getting a little wonky for other reasons, right before COVID, it's always true that new graduates have a lower unemployment rate than all workers. I think that makes sense, right? But look at this now. Look at this.

This is the biggest departure ever in this series. That is a big departure. That's not good. So what could it be outside of AI? So AI makes the most sense right now. And I know there's a lot of companies that are deploying AI, which is making them more efficient in an incredible fashion.

But could it also be that there are baby boomers staying in the workforce longer into a slowing economy? But that doesn't make sense because coming out of college you've got- Could be job retention. Could be job retention and a slowing economy and slowing hiring. But AI makes the most sense. Or, Paul, it could be that colleges have been doing

nobody any favors in turning out people who are not the same quality as graduates of times past, who are more trouble, who are not quite as ready or willing to work or something. But for whatever reason, corporations are choosing to hire people other than recent graduates of late. That's what this chart is saying. Well, and Chris, you may be right, It may be education because we recently, you know, added some more, added another individual to our team and we were searching for quite some time. So out of 500 candidates, we had some that, yeah, 500 candidates came in.

I got to tell you, for those of you that get into the job force, and I told my kids, make your, it's amazing how similar the resumes were. So when you're going through 500, you just get down any typo in, you know, a typo nowadays doesn't make sense to have it. But we interviewed some that came out of a call for initial interview that were young right out of college, and they weren't able to communicate very well. They didn't answer the phone professionally. They just did not have the skill set that we were looking for to be able to bring on the team. And I was

really disappointed about that. And we ended up finding somebody great, but that is an issue with individuals coming out of college. They just don't know how to communicate in general like their older peers do. So if you add artificial intelligence on top of that, and it was amazing to me how, you know, the few that we did talk to, or we talked to a lot, you know, the first question was vacation time, you know, more quality of life. You know, I get it, but Ryan, but we got to work. When you're leading with those questions, that's a big red flag to me because, you know, there's times where, you know, you're going to have to dig in and there's times where you can enjoy a little bit more flexibility

But but when that's the most important thing to you when you start the interview process Hey, what questions do you have for me? I'd always like to start with that and when it's all about more how often do I have to work? I think they've just got a distorted view of what work life balance actually is. That's interesting. So did you have anybody come in who, like to the downside, really surprised you how bad it was?

To the downside from- I'm just saying, you know, they'd made it through your resume calling, you thought let's take a shot you bring him in for the interview And you're like Whoa, oh Yes, yes, I was like dress way somebody came in dressed I'm here though

It's not a good idea to leave the gym and come straight to an interview in a professional office, right? I mean I'm all about being casual But if you're coming in and gym clothes interviews over pretty much to begin with that's just a complete lack of respect and Then so yeah There were several and another that came in that was a really good-looking candidate on paper But had no had done no research whatsoever as to what we do what separates us what's important to us so just no effort like there was a sense of entitlement that I'm going to get this job just because you

called me and I'm not going to put any effort into trying to answer questions. And how about the other direction? Was it a tough choice at the end of the day or did somebody really stand out? Oh, it was a hard choice. We narrowed it down to two candidates that were really, really good. And we were really struggling on the team. And I was like, hey, if I could hire both of these individuals right now, I would.

And then we did one last phone interview and answering the phone with a smile on your face makes all the difference in the world. If you answer the phone, you gotta take that into consideration, but when you schedule an appointment and you know that somebody is going to give you a phone call and they answer the phone like they're very angry at the world, that's not what I want to present the individuals when they come in.

Because a lot of times when somebody calls the office, their first contact is the person that answers the phone. So it doesn't matter how bad your day is, you got to be able to put a smile on your face and answer it and say, Hi, how can I help you? So that was the determining factor, but it was actually really hard. It was really hard. And the thing is, the thing I'll say, there are a lot of good candidates out there that would have qualified, but just didn't meet our requirements for certain reasons.

But I was, I was very, very disappointed with the, with the candidates that we had that were fresh out of college just because of lack of communication skills and we're in a communication business so that's very important so maybe that's it maybe that's some of it I don't think it's all of it but I think it's some of it yeah well certainly we know a lot of people are getting less and less human interface time right and and just it takes time to learn how to communicate and to talk to the other person and you know to both be listening and formulating something at

the same time as a is a skill that maybe you don't get swipe and tic-tacs you know or whatever's happening on that end but as well you know I remember when I asked Brett Weinstein I said when did it kind of go off the rails for you because you know they had this whole insurrection at Evergreen State College where he was he and his wife Heather were both teachers, professors now gone. Because it was this insurrection against them. And I said, but that happened.

When did you know, though, this was going downhill? He said, oh, it was like three years earlier than that. The provost called me into his office and said, Brett, we're getting some reports back that you're making students uncomfortable. And he said, yeah, since Aristotle, that's been kind of known, that's what education is. By definition, you don't put on muscle at the gym without no pain, no gain, right?

He said, it's no different. If you want your brain to be in a new territory, you go through some discomfort. Are you telling me we don't wanna do that anymore? He's like, yeah, no, really really that's not the game anymore you know we go by ratings you know it kind of depend like we don't want our college to get a reputation for being hard because now you know well we won't be able to you know get the students he's just like it's like that he said that should have

been my warning shot across the bow that I listened more closely to but three years later he was out gone you know and's like, the expectation is now I'm going to learn and it's not going to be uncomfortable. It's like, I'm Paul, I'm going to put on 20 pounds of muscle mass, but I don't ever want to feel sore or have to push hard. That just doesn't happen. And if you really want to get lean, you got to do the work in the gym and you got to do the work in the diet and you got to do the work in the diet.

Like you can't do, I mean, you can, you can get in great shape just on a diet. But if you're really wanting to get in great shape, the gym and diet. Yeah. And that's so sad to me, Chris, because, because it doesn't matter what job you have, you're going to run into an individual, you know, and I told my kids when they got started, I said, look, you're going to be in a position where you're going to have a superior that's a jerk. And you have to respect the position and do your job. You do your job because you want to do the best before the Lord. Number one, you do the job. Number two, because you want to be the best that you can be yourself. And don't let somebody that you think is a

jerk above you control you to the point to derail your career you dig in you do what's right. And you press on and you understand that there's going to be challenges and if you do it right, you'll surpass that person at some point in the future. But we're not, the school systems aren't teaching our kids that way. And I know this is down a rabbit trail, but I got to share this. I was blown away by it. So my oldest is 26 now. He's doing great.

Had a hard time figuring out what he wanted to do, but construction is his thing. He's one of the hardest working young kids that I've ever met. So he's up at five o'clock in the morning with me, goes to the gym, he goes to work, and I go to work in here. That's been great. This has only been happening for three weeks, but it's been enjoyable. So when he was in high school, he was the type of individual that's going to wait till the last minute to do everything. He didn't necessarily, he'd do the schoolwork smart enough to do it at the last minute. And I'm like, Hey, you had that project due on Friday, right?

Where are you on it? He's like, well, um, I don't have to turn it into the end of the semester. That's what, what? He said, yeah, I don't have turned in to the end of the semester. So I go to the school system and I start asking a question. Well, somewhere in the Department of Education, they pushed it down that it's not fair that if you give a kid a deadline on Friday,

that they turn it in because all kids learn different. That was their justification. So as long as they turn it in by the last day of the class, then they can still get credit for it So I said what I? Said so what happens when you've trained them this way and they go into the business world and they're working for somebody and I said Hey, I've got a deadline due on Friday and they think they can turn it in six months later They're gonna get fired. They're not gonna keep their job going to get fired. They're not going to keep their child, at least for me they're not, right? Unless there's some reason that they can't, legitimate reason they can't get it done. So I went to the teachers and I said, look, I don't care what takes place.

I would rather my child fail because he didn't turn his project in by the due date. Well, my oldest, he hated me at the time because two of his teachers forced him, did what I asked him to do and failed him for not turning his project in on that Friday, and he got the message and delivered those projects. And then the other teachers just completely ignored it and said, well, we're not going to make an exception. This is the way we do it. So that was, he graduated 2017, 16. So that's what they were doing back then. And if that's followed all the way through college, then no wonder kids are struggling to try to stay

in the workforce and do well. And not all of them are that way. I've seen some ridiculously impressive individuals. I just hired another advisor on the team that's ridiculously impressive, works hard, but they had somebody that influenced them from the outside in their life about what reality is really going to be instead of, let's just make you feel emotionally comfortable. Indeed, yeah. These things are important. I realize now that As a parent the most important thing I resolved early on was you can pick you're either gonna be your child's friend

Or their parent you can't really be both so no I chose to be a dad you know I was the scary one. You know the the one who set the limits, you know The enforcer had it's a ride a client. I had a client tell me years and years ago when my kids were getting ready to be teenagers and And he said he said if you do your job, right and your kids Despise you enough in the right way. okay? Kids can despise you for a reason, but if you're the bad guy enough, you'll earn the right to be respected

and friends with them later at some point in the future. Now that doesn't always pan out, but as your general thumb, and it was probably one of the best blessings I've had for my daughter quite some time, and because her being pregnant now and got a grandbaby on the way, she made the comment, she said, hey dad, find out what it's going to be on Sunday. She said, hey, dad, she said, I knew you meant well for us.

She said, but I just thought you were ridiculously strict. And she said, thank you for it now because now that I've got a child that I'm coming through and looking at what I see in the world, I want to make sure that they're prepared for it. Cause, and I had another client tell me, says your job is to raise your kids to a manner that at some point you could blindfold them, drop them on the street in an unknown city, and they have enough emotional resilience and strength

to be able to go get a job, find some footing and thrive in that community. So, and that was a challenge that I took very seriously. And I had no clue right then, just how tumultuous the society and the economy would be for the kids that are facing it now. And my biggest concern is a lot of them just aren't emotionally strong enough to face

and make the adaptations that are coming ahead. And that's true for investors too, Chris, it is. Yep, but again, emotional intelligence is a form of intelligence and it requires the same wrestling process as any development does in life, right? You know, getting wisdom and equanimity is a lifelong sort of a pursuit. A lot of people don't get there, it's fine, but it limits their lives extraordinarily, you know? So with that, I'm looking at our time.

Can I shift real quick to housing? Because this is a big, big part of this whole thing, our economy. So Amy Nixon reporting five times more inventory for sale in Dallas today than there was in 2021 at the low there, I guess, you know, back, back here. And she says, believe me, you know, back, back here. And she says, believe me, there is not five X more demand. So so that's Dallas. Dallas is one of the big hubs. I think there's another thing going on. I told you about the the oil rig is getting stacked.

Dallas is, of course, like Houston, like Midland. That whole region of Texas is not entirely, but fairly linked to oil's futures and fortunes. Right now that's a tough story so I see some weakness there. Nick Garley reporting in San Francisco which is odd because that's normally the tech area. 7,000 listings on the market doesn't sound like a lot but that's 50% above the long-term average. High highest supply in a decade. And says, watch out for potentially sizable price drops in the second half of 2025 in Northern California.

And noting in a comment below that, he said, it should be noted that home values in the San Francisco metro housing market are already down minus 8.1% from their peak in the middle of 2022, and now they're starting to drop again. So that's a couple of markets.

You and I have talked about it. Florida is also weak. So there's some general weakness going on. I don't think New England is that weak because we just don't have any inventory because we don't allow ourselves to build homes here. But generally speaking, I'm seeing weakness in housing right now. Not unexpected with mortgages being where they are and house prices being where they are.

New construction starting to roll over as well. That's starting to slow and starting to soften. You know, it's not at a crisis pace right now, but the housing market's frozen. And did you see the headline that came out today? What was from Zero Hedge? What's brewing in the mid-Atlantic housing market? Cancelled listings erupt to a five-year high. Did you see that?

No, I didn't. Cancelled listings, huh? So people like getting no traction and canceling their listing and relisting it later? Yes. With that, active listings across the mid-Atlantic region sitting at multi-year highs, the spotlight now turns to a sharp spike in canceled home listings, potentially signaling early signs of stress beneath the surface. So here's the chart right here just to look at it. So that's a substantial spike for 2025. So this goes back through history. Cancelled listings make sense, but this is a big spike that's occurred

here in weekly canceled listings. June is a, that's's occurred here and weekly canceled listings. June is a, that's no, that's the sale season. That's not the cancel season. So that's interesting. Yeah. So this is the hot season for housing. I mean, this is, this is if you know, the, the peak, if you're going to get something done, you're going to get it done.

So why would they pull it off the market? So that was in MLS coverage coverage coverage area MLS coverage area. And then here's Philadelphia. So it highlighted Philadelphia as well. That's way out of that's way out of band. So the article doesn't necessarily say exactly what's causing it. Right. You know, but but it does say despite the steady pace of new contracts and showings across the region, the sudden surge in cancellations suggests sellers may be re-evaluating market timing, while buyers appear increasingly cautious and met ongoing concerns over pricing and economic

uncertainty. So, you know, what would concern me is we're looking at these cancellations in the strongest time of the year for housing and housing sales. So why would you pull it off the market unless you just can't get any offers close to what you can afford to sell for or what you think is reasonable? And this is an anecdote. It's from another country. It's from UK but you know how do you go broke Paul slowly then all at once says here a tipping point has been reached people can't believe how much central London prices have fallen which have been very sticky very high and this guy was reporting that he had just bought a Notting Hill flat for 250,000 pounds and it was listed at 450 I don't know how common that is but I'm starting to see signs of stress in other

market areas like that. I think Canada, Canada is in for a world to hurt because they were kind of almost Chinese like in their over dependence on housing and house price increases supporting one of the highest levels of household debt out there in the Western world. Canadians are up to their eyeballs in it. and it all kind of depends on housing not rolling over, but it always does eventually. It just does. And then I should also point out consumer debt and credit stress. Again, global markets saying consumer credit surged another $ 17.9 billion in April. It's now at 5.01 trillion,

not far from its 5.10 trillion record, so lots of debt. It's just been going up and up and up, up into the right 45 degree angle, all of that, but what we're seeing, Paul, unusual whales reporting here that serious delinquencies are on the rise. So percentage of loan balance is 90 or more days delinquent, now getting worse, mortgage delinquencies are on the rise. So percentage of loan balance is 90 or more days delinquent, now getting worse.

Mortgage delinquencies at fourth quarter of 2024 were 0.7%, now 0.86%. So it's change, HELOCs, same sort of a move. Auto loans, also more people in serious delinquent territory. Credit cards, serious delinquenciesencies 12.3% I thought didn't we talk others like a trillion dollars on credit cards 12.3% of them are in serious delinquency that's a big deal that's a hundred and twenty three

billion that's a lot yeah that's a big number that's a big number that's a big number and then of course student loans came off of that respite that Biden put them under. Look at that jump from.53 to 7.74 in a single quarter of delinquencies. No bueno. And then all others from 9.17 to 9.4. So these are actually fairly highly stressed levels here, Paul. So consumers, not as many jobs, working more part-time jobs. Housing is stagnant if not falling, depending on the market, and as many jobs, working more part-time jobs, housing is stagnant if not falling depending on the market, and consumer credit is showing stress signs.

Those are all consistent with a turning point. There's going to have to be some sort of a, this is almost like a miracle on ice moment. Trump's team is going to have to hope for something like so many jobs are gonna have to come flying home so fast to sort of cover this up, but I Just I can't see it. These things are this is like turning the wheel on a supertanker, you know, yes Yes takes time for that But once the nose starts swinging over you could turn it back the other way and it just takes time for it to go that way again. Yeah. Well and and look I think they've reduced some regulations for small modular reactors but have we really seen any

impact or anything change about regulations within the country and how easy it would be to build a business? So or bring manufacturing and construction back? We haven't. That's one of the things that they promised. So the question is, if the Fed's holding rates high and they're not going to respond until the labor market cracks, and all I can think of, Chris, is if those default rates are that high on credit cards now, when unemployment has only ticked up a little bit, how much worse are they going to get if we have just a normal, a normal historical recession because it's been so long since we've had one and there's such a large percentage

of the populace that's living paycheck to paycheck. I just thought of it. I wish I had the statistics in front. I mean, I do not. I don't have it on this computer for the buy now, pay later where people are buying groceries on buy now, pay later. Did you talk about that at one point or do you know any of those? No, but I've read about it a little bit. I'm just shocked by the whole idea that you buy now pay later for consumables like groceries.

Well is that just is that people spending frivolously to keep up with an Instagram image or is it stress under the surface? And I think it's that these inflationary pressures have hurt a large percentage of the population that's been masked over by higher home prices. They, you know, they can't refinance at higher rates now, but you can still get line of credits on that equity that's in a home and protect your mortgage for those that have to and credit card rate surging. So my concern is we haven't seen a recession.

You know, we did. Yes, we did in 2020 with the, with the shutdowns, but you remember the Trump administration paid people what? $600 extra to stay at home than what they were when they were working during that period of time. So they flooded the system with liquidity. So that papered over everything. What happens if we have a normal recession and the feds late to the game and

unemployment spikes at some point in the future? I mean, there are some people that I respect that are claiming that six months from now, we're going to look back and see that we're technically in a recession. Now, I don't know. It's hard to say what the market's doing, what they're doing, but when I see what's underneath the surface and all of these stresses starting to crack up and the market's oblivious to it and the volatility index

oblivious to it, people, the market has mispriced risk. And what you have clearly laid out today and shown, the market is mispricing this risk, and that's my concern. You know, I think we're shifting from a regime, and I have to write this down so I didn't forget it. We're shifting from a regime where you have been, investors have been rewarded for passivity. The Fed was able to bail it out.

We didn't have, we had inflation, but we didn't have inflation like we have experienced here recently. So have they reached the point where inflation gets exacerbated if they step in like they did in the past? I think that'll be the case. But I think the next phase of the markets is not going to reward passivity. It's going to reward preparation, agility, and above all, the ability to love the truth and search for the truth. Instead of narrative, I think you're going to be rewarded for agility.

Because if the dollar cracks, emerging markets, industrial metals, commodities, they're undervalued. I mean, they're still below the commodity index in general, still below what it was January 1st, 2008. So if we get, if we get a not a reversion to the mean, but a restructuring and a reflow of capital to those areas, especially if the dollar starts to weaken because of the issues we're having right here, those that are agile, adaptive, and can move to reshift their portfolios to take advantage of it are going to protect themselves far better than passive investing. I believe I could pay a huge price for this, you know, and I'm fine if I'm wrong, but passive is not going to be the number one

performing investor strategy over the next 10 years. It may be for the next six months, but it's not going to be over the next 10 years. I just don't see how that can continue at this point. Maybe I'm wrong. But if I'm not, then at least you'll be protected from the damage that being passive will inevitably bring. Well, you talk about the dollar cracking cracking and I think this is an important conversation

to have because, you know, this is from the CBO and it just talks about how many trillions of dollars of deficit we're going to expect over the next decade and it's just a sea of red ink, obviously, right? And so when there's just that much deficit spending, somebody's got to print that and so that's going to be the Federal Reserve and when they do print it Did you hear this then Paul that that this is from Thomas Massey is one of the few truth-tellers I like how you phrase the truth-telling here He is telling a little bit of truth

But don't just listen to what he says listen to the response and they don't have an other don't have a mic on the audience this is in front of a Reasonable a reasonably full chamber, but there's an audience actually listening in. A gentleman from Kentucky is recognized for 90 seconds. 90 seconds. Well, I'd love to stand here and tell the American people, we can cut your taxes and we can increase spending and everything's going to be just fine. But I can't do that

because I'm here to deliver a dose of reality. This bill dramatically increases deficits in the near term, but promises our government will be fiscally responsible five years from now. Where have we heard that before? How do you bind a future Congress to these promises? This bill is a debt bomb ticking. Congress can do funny math, fantasy math, if it wants, but bond investors don't. And this week they sent us a message. Moody's downgraded our credit rating and the bond investors who buy our debt and finance

our debt demanded higher interest rates on the 10-year note, the 20-year note, and the 30-year note. What does this mean? Very soon the government will be paying $16,000 of interest, interest alone per U.S. family. And what are we telling them? Instead of taking care of that problem, we're going to give you a $1,600 tax break. Under the taxing and spending levels in this bill, we're going to rack up, the authors say, $20 trillion of new debt over the next 10 years. I'm telling you it's closer to 30 trillion dollars of new debt in the next 10 years Mr.. Speaker we're not rearranging deck chairs on the Titanic tonight

We're putting coal in the boiler and setting a course for the iceberg if something is If something is beautiful if something is, you don't do it after midnight. I oppose this bill. They only gave him 90 seconds. That's all you get. But what did you think? That was an unbelievable line. And how clear can you speak the truth for what he did?

I had not heard that. That was, I even like him more now because he's one of the few individuals that has the courage to speak the truth. And I also like the fact that he stated, look, we got to deal with reality. I mean, that's how you survive in life. The first step, I mean, there's a whole lot of steps to discovering wisdom, but you've got to deal with reality instead of narrative that was incredible Mr.. Speaker we're putting coal in the boiler and setting a course for the iceberg That's the clear statement of exactly what they're doing yeah There it is. That's that's coal in the boiler all that red. I mean it's just it's astonishing but I think you know that's what you know please you know I hope God gives you all the support he can because you have

to manage in that in that context but I mean it's very clear at this point that they're just going to put more coal in the boiler until I see evidence to the contrary Paul I have to plan as if that's how this is going to be right Yeah, and we have to and unfortunately Yeah, I was telling Nick earlier today enough and you as well. I was I was ridiculously hopeful That Trump was going to do what he stated that he was gonna do Okay, going back to you know, he was all against the Federal Reserve and his first administration and they just continued to do the same thing I thought, okay, we've got a chance that maybe he understands what's really going on and cares more about a legacy from a long

term standpoint and will change the ship for future generations. But he's not. And I'm so ridiculously frustrated and heartbroken, disenfranchised over the fact that that we're full steam ahead. We're full steam ahead. And what I'm more concerned about is the fact that I don't think the baby boomer generation is going to escape this without a lot of pain because they're not... Modern Wall Street is just not set up to be adaptive and agile to make these changes. Are we going to navigate it perfectly?

Absolutely not. Nobody's gonna navigate this perfectly because we're in uncharted territories. Even if it's the same, you just can't navigate markets perfect because there's too many moving pieces. You might can if you're Nancy Pelosi and you have all kinds of inside information,

but the rest of us just don't have that. So the reality is you've got to be adaptive. You've got to have some type of tools that can guide you to make those adaptations because being overweight US equity market since 2012 has been the right place to be. But what happens if the US equity market goes sideways for the next 10 years, inflation's running high, we've got stagnation here, but yet emerging markets, you know, I'm just picking a number up 300% because of a structural change of money flow and commodities are up substantially, you've got to have a strategy that can make those adaptations.

And what if it's not different this time and we've reached the point to where this house of cards starts to come down and we have severe deflation in the interim period and markets do go back to normal valuations, which are 50% below here. And, you know, investors decide to ride through it thinking the US markets are gonna recover, but you get that, then you get inflation because all of the big money realizes, hey, I need to own commodities, and I need to own emerging markets, and I need to own assets outside the US because we've got a

weaker dollar. My concern is, like I said, I don't think passive is going to reward those. And the ones that are the most fortunate are the ones that have been passive during this period of time, and they're starting to wake up, and they're starting to have a love of the truth and a love of reality to look out that's taking place, and they get to make that adaptation. Because there's going to be somebody that always makes the decision at the exact right time, at the last minute. So, but if you didn't have those like you that have been warning people for quite some time and us that have been developing

and fine tuning our strategies, then they wouldn't have anybody to turn to to help them through the inevitable change that's coming. The hard part's when's it gonna occur? And the markets can stay irrational a lot longer than you can stay solvent if you're betting against them. That was Jesse Livermore's quote.

He learned that the hard way back before the Great Depression. So, but being agile, being open-minded and in love of the truth is going to, and wisdom is going to be the difference to coming through this with a few bumps and bruises instead of some decapitated limbs. It was Plutarch who said, the oldest and most fatal ailment of all republics is a gap between the rich and the poor. And today we can see in the LA riots and all the stuff that like there's societal unhappiness. And I'm going to project a little but when I look at the people who show up at these protests I see a lot of boomers.

And I see a lot of fairly what I'll call dispossessed millennials or Z's out there, right? And there's a reason for that, Paul. And this wasn't by accident. I wish people knew this. I get almost no traction. I get shut down on Twitter when I try to talk about this. They're a little sensitive. But the Federal Reserve has decided that the solution to every single crisis is to just

print more money. And every time they print, Paul, it's not a fair game because they don't print and hand it out to everybody They print and hand it out to Wall Street the financial system and the financial system So this is a thing here. Look at this this little black smear on the bottom Which is going to be hard for people to see if they're on their phones That's the bottom 50% of all households now own 2.4% of US wealth. Wow. And this pink gets us up to the 90%,

so that's from 50 to 90, so that's 40% of households own this next big blob though. They own from about five trillion up to about 45 trillion, so they got about 40 trillion to their name. This blue is the next 10%, or 9%, from 90 to 99. Well, they own from 45 to 105, so they own 60 trillion. But then, this is just from 99 to 99.9%. So this is.9.

.9%, well now they own a fat, fat, call that from 110 to 130, so they own 20 trillion. And then the top.1%,.1%, they own 20 trillion and then the top point one percent point one percent They own about does call that 12 trillion all to themselves, right? So you can see here like the Federal Reserve they've just been Paul. They've been bailing out bailing out. Oh my it's terrible We have a great financial crisis. You don't understand. It's this dot-com blow up. It's terrible every time They wait in Paul all they do is they they get us closer to Plutarch's resolution Which is this is a this is a fatal ailment you already I submit you're seeing The shocking signs of this out on the streets people are angry. They don't know why but it's in this chart Paul. It's right here

That's that's the system we're in and so for everybody who's thinking I'm gonna pass of let it ride You know what it was the right thing to do for all this period let it ride This is called the let it ride moment right here from, it was the right thing to do for all this period, let it ride. This is called the let it ride moment right here from about 2000, from the great financial crisis on. And why not? Do it. But the idea is that can you let that ride forever?

Well, no, you can't. You just can't, because it's fictitious printed out of nothing wealth that's also making an unstable society that eventually breaks. So the question then is not do I let it ride forever but how much longer right? Right. Now we're down to Clint Eastwood and Dirty Harry if you haven't seen it right anybody younger than me right? Give us a line Chris give us a line. Did I did I shoot five shots or six? You know in all the confusion I kind of lost count myself. So do you feel lucky punk?

That's right. That's good. Well, this is, this is, this is your, do you feel lucky punk chart right there as far as I'm concerned. That's right. I would agree. Well, and here's another warning sign that I see. And I've heard a few other people that I respect that have mentioned this since I've, I don't know when it was a couple of weeks ago or month ago, that I was expressing my concern about private equity. Now look for, for listeners out there, private equity is sexy. It sounds good. You know, that they show you these unbelievable returns in the past, but remember, you know, past performance is not no guarantee, nor is it indicative of what happens in the future.

It just tells you how a strategy has done during a certain environment. So the only thing that past performance can show is strength or weakness of a strategy. So one of my biggest concerns right now is private equity is illiquid. And I've seen what they do is using massive amounts of leverage. I've also never seen as much marketing go into or had as many calls of people asking me about these unbelievably sexy presentations of why you should buy private equity. Well, one thing that we're seeing, especially, I cannot remember who it is. I wish I had this data in front of me. Was it Peter Till or was it, um, Ackman

that came out and talked about the illiquidity of the private equity on Harvard's endowment books? Can you remember? Probably Ackman, I think. I think it was Ackman that came out. It wasn't Peter Till, it was Ackman. But expressed, you know, that, that, that they're not marked correctly to market. So my question is, is all of this marketing effort to bring private equity down to retail, these highly levered products, when they recognize,

they moved in big time in 2010, 11, and 12, and there were huge minimums to get into private equity back then. I mean, I know some of the ones that I looked at were two to five million minimums. And the average person had to put everything that they had inside of there. You know, and now there's all these, you know, the big firms are coming out and saying, oh, if you had this amount of a sleeve in your private equity, which is illiquid product,

you got to hold it for a long term. I saw all kinds of real real estate investment trusts that were marketing heavy in 2007, 2008. Those didn't pan out for investors. My concern right now is private equity is doing everything that they can to shed and provide some liquidity to average retail in this environment right now. So for those of you that are out there, I mean, I'm not a fan of private equity where we are right now, and I would be very, very careful. Be very careful. So make sure you consult somebody that's looking at reality before you allocate in there. Don't buy it just on the sales pitch.

Well, that rang a bell because I had read an article or two about this. And by the way, by the time Wall Street comes to you with a hot deal, it's got an odor about it usually. But what caught my attention was that Yale is exploring a deal to sell 2.5 billion of private equity stakes, which is a pretty big amount because they have a $41 billion endowment, I believe. And so they're in advance talks on its portfolio sale with an overall discount expected to be less than 10%. So they're already talking about taking a hit on this. And let me see, there was one other part in here. No, but wasn't in this article,

it was in the Bloomberg article that I read about it. So they're one of, Paul, they're one of many, I think MIT, Harvard, Yale, Princeton, I think they're all selling private equity at a discount. That's true. They're trying to dump it to somebody else. Yep. And, hey, look, I've had the benefit.

I left corporate Wall Street back in December 31st of 2003. So January 1st, second, whenever it opened, technically me, I was working January 1st. Independent, so being independent on the outside, I'm able to see clearly kind of what the Wall Street thing is. There's still firms out there right now that won't even allow their clients to buy gold if they want to. They make them go somewhere else, much less recommend some of that to them.

And we look back, what's been the number one performing asset since the year 2000, it's still gold today as far as your major asset classes. But they don't get the fees on it that they do on all the other products. So is it an incentive? But have they done a disservice to some of their clients by not recommending that? I believe that they have. So that's my concern about watching all of this effort. Yale's getting out, Harvard's apparently getting out, all of those, but yet there's a major

marketing effort and they've lowered the minimums down to $50,000 on a lot of these private equity now with supply and demand. Let's open it up, let's get a good enough returns, let's make it five million or two million to get in, you know, and then when we really get there and we need liquidity, we'll just increase the potential demand with our past looking returns because most people are going to ask questions, well, what are the returns? Because they don't know what else to ask, right? And that's what they're sold.

They're sold returns in so many cases. That's what private equity is doing. They're selling these returns. Look at what we would have done. Look at what have happened, and this is what's going to happen to you. Oh, but you can buy it at 50,000 today, but you couldn't get it at 50,000, you know, 15 years ago, 15, yeah, 15 years ago. So my concern is,

is they're finding a market to drop this on individuals books and Wall Street will say, well, don't put more than 20% of your investment in there. Well, what if that 20% loses 10 or 50 or 60, 70% and it doesn't recover for the next 10 years, then you became the backholder. So just be careful. They're not all bad. I'm not saying that they're all bad.

I'm just saying that it's a very dangerous place to be right now. Indeed. So if you're listening to this right now and you're one of those people and I know you're out there thinking you know maybe I should give Paul and his team a call someday. Just know that that's very ordinary. We've had a lot of people go through that same decision process and I would encourage you go ahead and make the call and you do that by going to

peakfinancialinvesting.com. Fill out a very simple form. Somebody from Paul or his team will get back to you within 48 business hours and you can start the process it's a great process and I know plenty of people who've gone through a Paul and they all tell me it's actually surprisingly Different in a really positive way that it feels like your your people care Because I think they do and also that they are very thorough. And that's just the onboarding process to get to even have the conversation to make sure that you're having a full conversation that understands the totality of somebody's

actual needs and wants and experiences and assets and all of that. So if you're one of those people listening, you know, maybe I should, um, I think, yeah, I would encourage you make, make the move. You won't regret it. And I will say it still amazes me in it and it, and it energizes me because I do, I require everybody to go through the planning process. Right. And I mean, every now and then there's a circumstance where it doesn't necessarily

make sense, but we get to it. Okay. But especially upfront, so I can get to know the situation. It was so funny because about two weeks ago, I had somebody went through the introductory call, go to the painting meeting, and they were frustrated. It's like, do you realize I had to gather all this information? I'm like, well, did it take you that long? No, but do you really need this? And I said, just stay with me. And I kept getting more information.

So by the time we got through the painting process and I showed them the reality of where they were, they were kind of speechless for a minute. And they said, well, now I understand why you're asking for all that. And, but they not had anybody asked them for all that. Cause everybody's like, Hey, let me give you my sales pitch. We don't even know what we're going to recommend until we get through analyzing your full situation because everybody's situation is different. And so I love it. It's an honor to meet anybody.

So, you know, no obligation, we'll take it through. And my commitment and so far, I'm not having anybody say that it was a waste of their time. You know, whether we do business together or not, you're gonna be wiser and have a greater picture of reality just by going through the process. And I will close by saying that both Paul and I will be attending the very intimate and wonderful Peak Prosperity Summit in Lake Winnipesaukee, New Hampshire this September 12th, 13th, 14th.

That's a Friday, Saturday, Sunday. If you want to meet us in an intimate setting and have some deep conversations, Paul, you'll be doing a couple of presentations up there, I believe. One maybe more general and one as wonky and as specific as people want to get about the markets and things like that. Yeah. So we'll be talking a lot of finance up there. I know we will. And I'm looking forward to it.

I got to tell you, that is some of the best conversation. Yes, it is. Genial and truth. Like I'm really looking forward to the annual summit and getting to see clients, friends and future friends and just wonderful people. Absolutely. Well, come on up and look for that at peakprosperity.com. You can find information about how to buy tickets and join that. But we'd love to see you. And Paul, until next week, hey, have a great weekend and good luck with everything. You as well. Thanks so much, Chris.