Peak Prosperity - When Everything Seems Nuts, It’s Time to Play Defense

Episode Date: June 27, 2025

Do you trust these markets? There are so many signs that the headline market gains are not aligned with underlying fundamentals that it’s causing more people to answer “no” to that question.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 you're a company that's got to get out there and drill and put all this cost into Accessing these supplies, but but you can't allow prices to rise in a normal market environment without the president United States threatening you Then one incentive is there to go drill, drill, drill, drill? Am I missing something there? 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 of Finance U. I'm your host Chris Martenson and with me today again of course is Paul Kiker of Kiker Wealth Management. Paul, so good to see you again today. Good to see you today as well, Chris.

Well, we have so much to talk about because this last week was such a bizarre week. We almost went into World War III. Did we, didn't we? Who won, somebody won, we don't know. Had a lot of big market impacts, but I have a feeling that while a lot of people, Paul, were paying attention, rightly so,

to what was going on in the Middle East, there was a lot of other stuff sort of sliding by economically I want to make sure we cover that today because there's some cross currents to be generous back there housing the budget deficits what's going on with gold and silver hoping to get to all of that, but I just want to make sure that we're still focused on what's really important in the markets while there's so much It's really important in the markets while there's so much distractive things out there, which are like shiny keys in front of a three-year-old while you're stuffing a rabbit in the hat, you know? Well said.

They sure are. All kinds of distraction to take, you know. The market's been a great distraction for people in the midst of everything that's taken place and under the surface. Like I'm sure you're going to talk about with some of the data. Everything's changing. It is, it is. And we've been talking about the Fabi markets, like it just feels fake. Like obviously we've had markets that for a long time aren't real markets, which means,

you know, willing buyers, willing sellers come into the other setting prices. There are intervening forces who need to set the prices themselves. And some of them do it just to make money. I'm sure, you know, we know that banks, big banks, some of them have thumbs that are too large on the scales in small markets like silver for instance but we also know the Federal Reserve has a point of view about things and that shouldn't be controversial because they've decided Paul they know what the right price of money is at any moment in time. The free markets cannot handle that Chris. That should not me in the free markets in any way whatsoever

No, think of all the bad things that would happen if the markets decided something can't have that so so that's the backdrop It's feeling fake to a lot of people Paul. I have this conversation more and more now I bet you do too or people are like I don't trust this it doesn't feel right And some of these people have just been complacently riding along for years, if not decades, and now they've suddenly decided it just doesn't feel right. Right. Well, it feels to me, the best analogy I can come up with

is, you know, the story's too good to be true and people believe it to begin with, and then all of a sudden the story expounds to the point that it's obvious that something's wrong. And I've been surprised because I'm seeing average investors now, those that are seeking truth and wisdom or listening to your podcast, they're searching out that information, you're sharing it, they're being discerning, they're being prudent, they want to protect the wealth that they've generated, so they're searching the truth out. Most people don't enjoy looking that out,

or the average person looking for that information. So they're going about their lives. But when I run into them in town, Walmart, Ingalls, wherever now, I have to plan about a 15, 20 minute extra period of time, because I'm getting more people that are pulling me over and going like, hey, I know you've been doing this a long time, do these markets make sense?

Like, I feel like I've been lucky, but I don't know what to do. So I'm actually having people approach me about those conversations now, which is very unique, because I haven't seen that in a market environment like we're in right now. It's normally pure euphoria, but even in the midst of the euphoria,

people are starting to believe it's too good to be true. Well, here we are bumping up near all-time highs again Maybe it's the mother of all double tops who knows but all right Paul I Titled the slides I put together Wow, everything's nuts This is just nuts. So so the first thing I want to note is remember Trump and besant in January they were talking about the budget deficit and we have to get all this under control There was this thing called Doge, which is already in people's, you know, memory bank, rear view mirror. We don't talk about that anymore. Then they put

out the big, beautiful bill. But this is a chart from zero head showing that the cumulative budget deficit up to now is the third worst on record. Right. But I mean, 2020 was bad. Yeah 2021 was bad, but we're now this 2025 is on track to be the third worst budget deficit ever and Here in May but but but we were told that we were gonna get that under control We were told that that was gonna be something that was gonna cause us problems and we're gonna fix it But it's continuing down the same path and obviously it's providing liquidity to the markets right now It is providing a lot of liquidity and so let's just talk about that. What do we mean liquidity?

It's a weird term and I'm not sure even I can define it all that well Because it's sort of like an elephant lots of people have different views of it But but liquidity is several things Paul one. It's the ability to make a sale quickly, right? So you have what's called a liquid market if I wanted to sell a gold coin but there was only one buyer somewhere in the world it's kind of an illiquid market but if there's a thousand people right out my door who would want to buy it it's a liquid market even though the price might be the same I might get the same price in both those transactions so liquid means the ability there's lots of

people interested so so things can be bought and sold relatively easily, but it means that there's plenty of the substance necessary to conduct that transaction. So if I had a thousand willing buyers for that gold coin right outside my door, Paul, but none of them had any cash, none of them had any money in the bank and nobody was willing to make them alone, it doesn't matter that I have that willingness to conduct the transaction if there's no liquidity for the transaction. Somebody's got to have the Benjamins to pull that off, right? So what we know is that there are this, this, this is the government deficit spending.

The Federal Reserve enables that. That is extra cash in the marketplace. Hundreds of billions of dollars every month is coming out and going out into the world and that cash can go and do things. It's liquidity at that point, right? Yes. It helps the cash flow of the large corporations because that really supports the bigger corporations

more than it does the small business when the government's fiscal recklessness is continued like that. And so the reason you go for deficit spending is a government instead of tightening or doging or coming up with spending cuts, the reason you do that is because doge and spending cuts hurt the economy, make it go backwards.

Deficit spending makes it go forwards. There's not a politician alive, Paul, that doesn't want to come into an election cycle with a fat GDP print and everything looking good. But as you and I know, this is both stealing from the future, because kids are going to have to pay that back, grandkids, but that creates more inflation. We're looking at a chart of future inflation right there.

Correct. So there's going to be more inflation on the way. And you know, what have they, the road to hell is paved with good intentions, right? So what's the justification that we're going to do this because of the AI race? It doesn't matter what the excuse is. You know, we were told that there was going to be some short-term pain for long-term gain and yeah, we had the market sell off in the short run, scared everybody a little bit, but that wasn't a whole lot of, that wasn't even really short-term

pain, that was a blip on the radar. And it wasn't even enough to rein in the speculation with retail. Options are continuing. So this market's in a situation right now where technically it's feeding itself. Right. And it's just setting up a situation for something even worse. So what's, what's he going to do? Or are we going to be even more fiscally foolish from this point

forward, if we get into economic hard times that I don't know. I don't like what's taking place because we're not even in terrible economic times at this point. I guess things are slowing, but there's been no change from what we saw in the prior administration. No, zero daylight on that, on a lot of that stuff. But that's the great machinery of DC, right? So I kind of get that.

Now, you and I have talked about the fact that housing and jobs and car sales, these are some of the big sort of pillars of the US economy. And we've talked in the past, Paul, about how we're seeing weakness in the labor market, right? More part-time jobs, big gaps between the employment and the household survey, with the household survey reporting a lot of losses

Job openings going down etc. So little weakness on the housing. I'm sorry on the job side But I do want to also talk about this which is that down here We have all these different years 2000 2001 going all the way up to 2025 each of these is a month And if it's you see a greenish number going all the way up to 2025. Each of these is a month. And if it's, you see a greenish number, it means that was above a trend line number of sales. And if it's red to pinkish, that's below, right? So what we're seeing here is that in 2025,

January was very weak, way below average. February, way below average. Average would have been 313. It was actually 257,000 home sales, existing home sales, not new home sales. Lightish pink, this was 315 instead of 412. Here this is 349 instead of 448. This is 389 instead of 494. These are supposed to be the big months, right? May, June, July, August are the big sales months for homes because people are moving, it's spring spring get into a new school district usual reasons

This is actually worse may home sales than we saw in 2008 Wow Wow, that's pretty interesting. I knew it was bad, but I didn't realize it was that bad It's pretty bad, and I got this chart off of this tweet here from Darth Powell Who said we're just a few CNN stories away from spooking the entire boomer population into fire selling. This is a Tinder box, right? So, but this is gonna be people's lived experience, Paul.

Homes are not selling, and we're already seeing that starting to really pile up now in some of the actual price numbers that are out there too. Let me see if I pulled those. I did. Lizzy and Saunders reporting just today home sale home price softening at a sharp pace lately through April S&P CoreLogic CS national home price index has fallen by 1.8% annualized. That's not a lot 1.8% annualized over the past three months, but it's very rare for this number to go below zero. This is the zero line right here

It did during the great housing crisis, but it's it's not so it's just a little blip. It's a little blip But home prices are now softening nationally They are as expected they are well and you add on top of that the increased Insurance costs the inflationary pressures that are going there, costs to maintain and repair these homes. Yeah. From what I understand, I wish I had the data in front of me. I'm not, for the listeners, I'm not as good at finding it

in the midst of our conversation as Chris is. You're with us at finding information. But those are extra pressures that are adding on top of that are gonna continue to put pressure on these boomers. The only thing that's probably really keeping a panic from taking place right now is the market's holding up. But if you have this market actually crack, then there's gonna be some forced sellers out there

and some panic sellers, I would assume, because the math just doesn't add up. The risk is really high to the downside, even in housing right now. Well, the math isn't math-ing. Paul I want to talk about oil and the oil markets, and we'll do that just as soon as we come back from this message. The markets are a ticking time bomb. Volatility is spiking, trade wars have broken out, and most investors are sleepwalking into disaster. Many portfolio strategies perform poorly during times like these.

At Peak Financial Investing, however, we don't gamble with your future. Our Registered Investment Advisory connects you with battle-tested wealth managers who reject outdated models and embrace active management, strategies proven to navigate chaos, and who aren't afraid to discuss things like the great taking or maybe the importance of protecting your wealth with gold. Without the right approach and with the wrong advisor, you're risking, well, everything. Don't wait for the crash to act.

Visit peakfinancialinvesting.com right now to schedule a free consultation and discuss your particular situation. Take control of your wealth before the markets take it from you. Again that's peakfinancialinvesting.com and I'm Dr. Chris Martenson urging you to act now. All right welcome back everybody. Oil oil markets. This was the big story to me, Paul,

last week. This was big. And I take it a little personally because I'm a direct investor in oil. But Donald Trump, when, when Iran fired some missiles at a US military base, totally telegraphed move, by the way, they told us it's coming. We pulled all our planes out of the way. I haven't seen any pictures, but I assume there's a hole in a Runway somewhere and that'll be the end of that when that happened immediately Donald Trump tweeted out in all caps That's how you know how serious he is Everyone keep oil prices down. I'm watching You're playing right into the hands of the enemy. Don't do it That is a really I don't ever recall a president

Instructing market participants what to do and not to do, but that felt a little threatening to me. I don't, if you were going to try and, you know, make, buy oil, he's saying, don't do it. Keep the oil prices down. I'm watching. Yeah. You ever heard anything?

Do you remember anything like this? No, I have never, I was shocked when I saw that I just shook my head and I'm like, oh, you got to be kidding me. So, you know, forget the free markets, forget running your business. What are the consequences? That's implied consequences. If you react to what market forces are going to normally do in a, in a supply constrained environment. And, and you've talked about this Chris, from a long-term standpoint on the next

tweet, and I don't want to get ahead of you here, but to the department of energy drill, baby drill, and I mean now. Well, if you're a company that's got to get out there and drill and put all this cost into accessing these supplies, but you can't allow prices to rise in a normal market environment without the president of the United States threatening you, then what incentive is there to go drill, drill, drill, drill? Am I missing something there? Well, to the Department of Energy, they do not drill. The Department of Energy operates exactly zero drills. That's how many they run. It's not them. That's right. So, so what does this even mean?

I'm not sure that last, I hate to say this, but that last, if we take that second tweet to the Department of Energy drill, baby drill, and I mean now, if we take that tweet at face value, that means Trump is ignorant about how oil industry actually operates. When prices go up, they drill more. When prices go down, they drill less. That's the whole business. It's really that simple, right? So he can't both want oil prices down and more oil coming out of the ground. Those are two things work. Those are two forces working against each other. You got to

kind of pick one. I would pick having more oil coming out of the ground. I would pick a slightly higher price because when you have the energy, whatever price it is, then you have more economic activity because people do things with that energy. When you have less coming out of the ground, you have less economic activity. It's fairly simple. But to put this in context, where he said, I put this, I put that tweet right on the time this is oil price coming from May 29 through June 25th, so it's about a month. And you can see oil was on a sustained sort of an upslope here for quite a while.

Then here's, right here on June 12th we had Israel bomb Iran. Oil spiked immediately capped, went basically sideways during the whole conflict, spiked a little bit when it turned out that, you know, over the weekend that when it looked like there was going to be some sort of a response because this is when the US bombed Iran but again that you see that big spike right there that was interesting to me was so we bombed it was announced that we bombed Iran and oil spiked if I if I expanded into that that one little red dot candle right there Paul oil spiked for one minute and started selling off instantly.

Right? And then Trump tweets this thing out here and that's right here at the zero and we saw oil go from 74 down to 64. That is a big giant decline for something. This is a global commodity. 103 million barrels per day is bought and consumed and all of a sudden it was worth 10 bucks less in a matter of minutes. Yes. Now, what are the chances that somebody didn't know that that was coming in front ran it? Who knows? But but at any rate, regardless of all that, when he says drill baby drill, we want more energy coming out of the ground, I will tell you that oil, the oil people I were talking to started to get this, this starts to put oil back in the range where they can afford to drill more way up

here. Mm hmm. And this is way below the range that they can afford. This doesn't get any more oil out of the ground. They started to get a little excited. I think this is spirit crushing right here. So I don't know. I'm sticking to my thesis. I think we're going to have less oil coming out of the ground this year than last year in the

U.S. Yeah. I think that's a good thesis based on the information you've shared and just market forces, you know, and use of capital. But that was such a weird moment for me. of capital. But that was such a weird moment for me. Can you imagine, you know, tweeting, hey, everybody, you know, keep the price of Amazon up, I'm watching, you know? Well, it puts it in good context. And I can understand if Iran had actually shut down the straight of Hormuz and prices had moved to 120 or 130 or 140 or 150 a barrel. Maybe then you can step in. But I mean, that's not outside of a reasonable range for a for a strong economy at those prices there totally reasonable that means that we have a president who's day trading

oil in a sense like like just it that it went from 70 75 he found that uncomfortable and enough to all tweet cap all cap tweet out a thing there saying don't do it. Anyway, strangeness there. The story though, the narrative around oil is what I wanna talk about today, Paul. So this just came out this morning on NAP, but I found it on Yahoo Finance. You can see the link right down there. And the story they go with here is Iran launched missiles

at a US military base in Qatar on Monday threatening to stoke a wider conflict. Yeah, that same day benchmark US crude tumbled more than 7%. One of the biggest single-day sell-offs this year actually puts it up at the top of biggest single one-day sell-offs ever. The following day the same thing happened driving crude prices down by double digits this week. This seemingly a logical tumble in energy prices highlighted the new global reality, the world is a wash in oil.

So this is the story they're going with. The world is a wash in oil. So what would it mean to be a wash in oil, Paul? It would mean there's so much coming out of the ground and we have so much in storage, we don't really have anywhere to put anymore. That's a wash, right? It also subtly implies

that our economy isn't doing all that good because when your economy is humming along on the global basis, that oil gets burned. So this would not be consistent with the global economy is doing fine. So one of these things has to be true. There's, we're a wash, but then, you know, Paul, you know, me, I go to data. This is US oil inventory stocks as of three hours ago today. You can see here 2025, we are at the bottom of our five-year range. So the United States has the least amount of oil in stocks right now that we've had in the past five years. So we're not a wash in it because our tanks aren't full.

And across the entire global observable oil inventory This comes from Eric not all at nine point. You can see you know, it's not terrible We're 2024, you know coming into here 2025 is right about Where's 2025 right about now 2025 is gonna be in here somewhere. It's it's sort of mid-range. This is 2020 Well, you know, that's what that's a world of washing oil. It's sort of mid-range. This is 2020. You know, that's a world of wash and oil. That's what that looks like. We're kind of middle-end, so it's not because we have, our tanks are full.

So what is this narrative all about? You know, I'm not clear about that. I'm not clear about that either. Maybe it's just propaganda trying to keep investors from allocating capital to that resource I'm not clear about that either. Maybe it's just propaganda trying to keep investors from allocating capital to that resource and driving up prices from a long-term standpoint. I don't know, that doesn't make sense. That's a good point. If we're washing oil, why have we not refilled the strategic petroleum reserve at this point? Right? Yeah. I mean, just put it there. Fill it up. We need it from a long-term standpoint standpoint That would be a great thing to do

I would support that that would be an important thing rather than giving another Few hundred billion to somebody else to blow stuff up somewhere else much much more productive use so To that end though energy right now Paul is hated H a T E D hated According to bar chart energy stocks are now trading A T E D hated According to bar chart energy stocks are now trading 24% below their 10-year historical PE ratio and look at all these other things. We got technology 27% above

industrials 27 24 percent above financials 22 percent above everything's basically above except for utilities healthcare real estate But energy oh my gosh hated absolutely hated. Well, and look, from a long-term standpoint, when are the greatest opportunities when you have mathematics on your side and valuations are low? Now that's not a recommendation for people to go add to it, but we see the commodity space in general

as one of the most attractive areas out there from a long-term standpoint. So, I mean, that does present an opportunity for patient investors who have the wherewithal to be patient until the market moves to where the data is telling us it should be. Well, energy, that just feels like a no-brainer to me. By the way, it's not all energy because obviously nuclear has been doing really well Because it has man will be moving into nuclear obviously at some point, but nuclear and oil are totally separate concepts We don't burn oil to make electricity and we don't use nuclear to make oily products like there's they're totally separate things

So so they're not fungible And and we're gonna run light on oil at some point here and that's without something really breaking in the Middle East or somewhere else, which by the way could still happen I think. You know? I mean, maybe it's over that quick. Maybe both sides have decided that hey, there was too much damage delivered to both parties and hey we're done, we don't want to do this anymore. Maybe both sides have decided that, hey, there was too much damage delivered to both parties and hey, we're done, we don't wanna do this anymore.

But it's highly unlikely that, look, I don't know how all these geopolitics work and I can't predict the future, but from a human nature standpoint, it's highly unlikely that there's not gonna be resentment and bitterness under the surface and that this is just over that quick, highly unlikely. this under the surface and that this is just over that quick, highly unlikely. Yep. Yep. Well, I got this male cat, Rolo, and he goes out every night and he fights with this

stray cat that's out there and he gets beat up. But they both look like, they both look completely horrible after they're done with each other, you know? And I just think that Israel thought that they were just going to like punch at Iran and Iran and Iran's gonna take it They weren't ready for the missile assault Iran Totally just got its air defenses taken out and they got punched hard both sides just came away like oh Black eyes both wanted to claim victory claim. They punched the other guy harder We've been to the same bars Paul and probably We know we know we just witnessed there, right? That's right Hey, I will, and I don't know about you, but seeing that hypersonic missile that Iran

launched upon Israel, that was one of the most terrifying things that I have ever seen. Right, me too. The speed, it was mind boggling. It's one thing to see the numbers on paper, you know, and I think, what was it, Russia utilized one of theirs in Ukraine without a payload on top of it just to show, but the, but there was no context, right? I mean, it was crazy fast how, how, how quickly it hit the ground. When you're looking at the normal ballistics and then you see that hypersonic come in, that was mindboggling to me

So yeah, it was terrifying it was and I think it says that the whole dynamic is clearly changed The balance of power has shifted. It's I didn't see any reasonable way to defend against those things, right? Because all the ones I saw that were of the I mean Iran had a couple of classes. They had some old clunky stuff And it's amazing that you can defend against that stuff at all that were of the, I mean Iran had a couple of classes, they had some old clunky stuff, and it's amazing that you can defend against that stuff at all, but this new stuff, they all seem to get through okay. So, I think that changes the whole balance of power, all of that, hopefully that makes it more peaceful, right? Like people will think harder before they try

and stir that trouble up again, I hope, I hope that's where we are. Let's hope. Because the shutdown of the Strait of Hormuz, let's be absolutely clear, even for a number of days, let alone if it stretched out a few weeks or months, would be completely devastating to the global economy. Right? Just it would crack.

All right. Paul, I want to talk about this now, too. Egon von Greyer is over it in gold in Switzerland, said, the Eurozone, drowning in debt, rising yields, can't cover its 100 to 1 gold derivative exposure. Uh-oh. Over a trillion dollars that they're carrying on the London and New York exchanges. Yes, one trillion. Now, what's interesting is that you and I had been talking about some of the gold deliveries

that happened back here, you know, but this is this is 2025 gold deliveries are now once again through the roof. So it's it's comics is being drained big big players stepping in taking a bunch of ounces off Steve Hanke reporting gold leaving the vault comics inventories are falling demand for physical gold is exploding so again just it's leaving the joint it's up and leaving gold is heading out the door well it's telling us something again and even though market participants seem to be speculating like the all clear is here and it's all sunshine and rainbows going forward. Gold's telling us that something's going on under the surface and what's amazing to me, Chris, is I'm still having to, when it is appropriate,

not a recommendation, because this is individual, but when it's appropriate for someone, I'm still having to put a good bit of effort into convincing them that, hey, this is a good insurance to own from a long-term standpoint. This is not, doesn't seem to be an environment where your average retail individual is piling in the gold. This, this seems to be institutions, sovereign nations, and I would love to know where that's

going. How much of that is going to the BRICS, to China, to Russia, to India, to South Africa, to Brazil? I would, I wish we could see that data, because that's massive. Yeah, and it's big money. It's big money. You know, I'm talking with the guys at GoldCore. They're seeing more and more big money step in. So those kinds of numbers we're talking about, that's big money

stepping in. But it's all just sitting there quiet. Remember it was a big thing in January, February. We were talking about a lot because it was making the news. It's still happening. So... I trust what they do, not what they say. Yeah, watch what they're doing. Listen to what they're saying, but watch what they're doing. And what they're doing is, you know,

and Chris, could it be that gold's just an undervalued asset from a long-term standpoint? Because if you're real big money and you've got the research that you're paying for, right? A lot of these private, a lot of these big families have their own private offices where they're doing the research. Well, they know the data, right? Like the average investor looks at performance over the past 10 years and goes, gosh, if

I had done that, I would have been in better position. So I'm going to do that today and hope that 10 years from now it's gonna end up in the same position. What they don't know is in the mid-1990s, you could buy at least in the North Georgia area a rental property. The rent that you could get on that rental property at fair market value would pay for that property

in seven to nine years, seven to nine years. So the rule of thumb for most of your investors that have accumulated lots of rental property in the North Georgia area or Southeast area that I know, purchase those properties based on strict math. Okay. If it's a really good neighborhood, if the rent will pay for it in 10 years, I'll buy it. I'm going to have 20% vacancies. I'm going to have to to repair some things roof, you know, all these things are gonna take place So 15 years out I'm gonna make good money Well, the math just doesn't work like that anymore and these big institutions are looking. Okay, where do I go?

Our big wealthy individuals. Where do I go? Do I go into real estate maybe with a sleeve if you know that real well like some individuals that we respect that That are that are in that game and others are, hey, maybe gold's one of those assets when I take everything into consideration that we need to own. And in spite of how good the performance has been for gold since the year 2000,

the average individual's not doing it because your big Wall Street firms aren't pushing it. They don't get the extra fees off of it like they do the other fancy products that they'll sell. Well indeed and remember this is the driver of the whole thing and the government's deficit spending like crazy and they have no intention of slowing it down. The plan is for another 20 to 30 trillion dollars of new debt over the next 10 years and that's gonna be a very gold friendly sort of environment. That's that's if nothing goes

wrong Paul. Right that's if nothing goes wrong, Paul. That's if there isn't some big crater in the dollar or some geopolitical event that breaks out that's like what just happened in the Middle East, only this time it goes all the way, etc. But this right here just says the US government has told everybody, told the world, we're going to be profligate, we're're gonna spend money we don't have in whatever quantity we feel like two to three trillion dollars a year so so that that's that's I could understand like if you it would be irresponsible to me if you had a you were so let's say you're advising a family office and they had zero percent exposure to gold if you didn't bring it

up even if they hated you for like oh you're crazy Paul we want our money to work if you didn't persist and get them, I would consider you fiduciary irresponsible. Oh, absolutely. Well, and that's what an advisor's job is, is to argue with clients and lay it. It's ultimately the client choice, right? But it's our job to do the research to say,

hey, you should be paying attention to this area. That's why I'm talking about commodities so much. Right. You know, gold, silver. You've got to pay attention to these areas. You've got to consider from a long-term standpoint. Be patient. I don't, I sort of looked it up, but I heard a great quote yesterday, or I read a great

quote somewhere, heard it. The road to hell feels like heaven. And the road to heaven feels like hell. Right? And I thought that was pretty powerful from an investing standpoint, because as gold investor And the road to heaven feels like hell, right? And I thought that was pretty powerful from an investing standpoint, because as gold investor from a long time,

did it feel like sunshine and rainbows to get where we are in the gold price? No, it didn't for me, it didn't for anybody else that stayed in that place. So, but it always feels easy for investors to buy. That's why the euphoria and the speculation so easy at the end of these cycles, right? Hey, it looks good in the past. It looks good right now. All my neighbors are doing it. I feel good in the herd. The Wall Street's telling me

it's the greatest thing ever. So you've got all this confirmation to feed your biases and it feels easy until it doesn't. Right? Because mathematics ultimately weigh in. We don't know when. like this market's hard right now because all of the signals are distorted. All of the signals are distorted. But when you go look at areas like commodities and you look at oil and energy from a long-term standpoint, how undervalued it is, the ratio in relation to the S&P 500,

how underweighted it is, it is a percentage of a sector within the S&P 500, how underweight it is, it is a percentage of a sector within the S&P 500. It doesn't feel comfortable right now for the patient investor who's looking to where they want to be in the future. And from a risk adjusted standpoint, it makes sense to make some allocations to that area before everybody else does and have the discipline to be patient and stay there until the information changes, right? The reason you never walked away from your gold holdings from a long-term standpoint,

I would assume I can't speak for you, but I know the reason I didn't was because the mathematics didn't change, the information that made us make the decision. So you just had to be patient and wait for those seeds to produce some fruit. And that's the bad thing right now. Everything in Wall Street, everything in the media

is driving instant gratification, instant gratification. And I'm so concerned, Chris, because the air of 0% interest rates fueled the term Tina. There is no alternative, right? We've got to speculate in the market because the government's printing QE1, QE2, low interest rates, there is no alternative, right? We've got to speculate in the market because the government's printing QE1, QE2, low interest rates, there is no alternative. Interest rates are higher now,

so it makes that alternative a little bit easier. But every dip and hindsight needed to be bought. So there's so many people that didn't. So now we are in a situation to where there are some alternatives. There's some very attractive alternatives that have started to raise their head. Emerging markets and international compared to U.S. has shown us that, hey, pay attention to

me. Maybe my decade of underperformance or 17 years since January 1st, 2001 is over. But investors are acting like there is no alternative except to speculate. So when you look at meme stocks right now, they're in the 99th percentile. And meme stocks, basically those are, think game stock for those of you out there, right? It gets online, it becomes viral. There are companies that are struggling financially in trouble, Wall Street may be shorting

for mathematical reasons and the retail gathers together on Reddit or wherever it is and they move on those. I mean, those are showing ridiculous speculation. The market's moving in spite of everything, but then you've got asset classes like commodities and energy that are just getting decimated right now. Retail is not buying gold, but big institutions are. We're probably sitting in, for those that can look long term, and one of the single greatest opportunities that we will see in our lifetime for those that are patient to

move. Now, the markets sell off, maybe those go down too, and the prices just get a little bit better. But if you're looking five, six years from now, and the government continues these fiscal deficits, and they continue to print money, and they just flood the system, ultimately inflation is going to—we're going to reach inefficiencies in these meme stocks and commodities and the things that we have to have on a daily basis are going to be the place to be. Not a prediction, just an estimation.

I don't know when it unfolds, but the information tells us it's coming. We just got to be patient for those that take the time to do the research and see the math. Well, so I'm going to argue again, Paul, that we're not dealing with actual markets, right? And that they, and that there's whatever it is, it's all algos at this point in time, right? 90 what percent of the market is just blinking lights trading with other blinking lights on server racks, right? And they trade according to algorithms and they're remorseless. They're like the Terminator in the movie, right? You know, you can't reason with it. You can't bargain with it, right?

They just do what they do and and then there are people on the other side who for political reasons or for policy reasons Really want the market to go up and to the right. So they just dump cash in whenever they have to, right? The Fed's just going to bail things out over and over again. That's just how it is, right? So we all know that's going to happen. But against that, we have to look at this sort of data, which is that, well, record high share of consumers are now pessimistic about the economy. And when I say a record high, this goes back to 1980.

Right, so 40 years, 45 years, over the past 45 years, US consumers have never been this pessimistic about the economic outlook. For whatever set of reasons, a record high share of Americans expect business conditions to get worse over the next year. This is worse than the financial crisis. At no point in the 80s or 90s or even during 2000 did U.S. consumers ever say, dude, I don't know about this, right, in these numbers. That's pretty impressive, actually.

So these are the people who are buying hand over fist. I mean, the whole story doesn't make sense. When I said wow none of this makes sense when I started it up Paul, I'm like how are markets powering to the new highs? We've already established in prior episodes that it's mostly retail doing the buying. Insiders are selling, institutions are selling. So this is retail, but retail's never been this pessimistic. So how do we square that circle? I don't quite know what to do about that, right? Something's a little off in this story so I think you know it is that old saying Paul if you've been at the card table for 30 minutes you

don't know who the sucker is so something isn't adding up in this story right now and I think we all know that, and I've been getting more and more flavors of that from people who have said, Chris, I just, I don't believe these markets. I don't believe them. I don't believe them. Like, what is this? I don't believe it.

Right? And so that's why it's such a tricky environment to be in, because markets can stay irrational longer than you can stay solvent and all that other stuff this We don't I'm not saying that it has to be different than it is because obviously somebody's throwing money in and they have an objective And they're achieving it. That's fine, but you and I I think would agree that Well, you can't do that forever and the longer you do that the more distorted and weird things get. And the more capital gets hopelessly betrayed in John Stewart Mills' language into unproductive works, right?

Data centers. Someday we're going to wake up and go, oh, how many trillions did we put into data centers? What was the business model? Right? You know, it'll be one of those moments. But for now, party on, Garth. You know? Well, and here's what's interesting that made me think of another chart and I'm so proud of myself because I was able To find it real quick. So I'm gonna share it with you. It was a tweet here

So this is EJ Antony PhD if you can see my screen here Chris The entire 18.2% increase in retail sales over the last four years was just inflation increasing sales price while the actual volume of sales fell 1% over that time. See, that's contracting economy. Yeah. So no wonder, right? Like the market's giddy because of the fact that sales are continuing to go up.

But of course the individuals are more concerned about the economy because if real sales, and I did not know this, right? So if real sales are down over that period of time, inflation adjusted sales, we're not growing. It's just this inflation makes everything look better than what it is. That's a great chart, very powerful there.

That was, very eye opening. So to answer your question, the consumer is not just spinning like there's no tomorrow, they're spinning to survive in most cases is what it looks like, especially when you look at the data of what, buy now, pay later for groceries. I mean, that's heartbreaking.

Yeah, yeah. I can't pull it up right now because I can't remember where I had it so my laptop at home, but I've been doing some studying into that because apparently there's you know I don't participate in the buy now pay later But I know that's something that's new and popular that's out there you had the option on the credit card but but there are people that are reporting that that there are our

Citizens individuals consumers that are by, pay later for their groceries. Yep. I talked about gold. I just got to finish up silver so that we have a closure on this. So Make Gold Great, who I follow on Twitter, said three days from now could be a huge fundamental event where 250 million ounces of silver could stand for delivery This is according to Bill Holter

who also reports there are no 250 million ounce stashes anywhere in the world to deliver and And also then saying all I bill Holter saying all eyes right now should be on silver 30% of global silver Productions is standing for delivery three days from now and quote again from Bill Holter, Paul, they're going to have to close all those contracts out for cash. They did a real hard run at silver just yesterday, smashing it down pretty hard. It's bouncing back today. We can feel it.

I can tell you I've been watching this market long enough that they are going to run out of paper firepower. Somebody's going to stand for delivery at some point and then we'll have to see what happens next. But the right thing would be for the price of silver to explode to whatever price is necessary to clear the trades. The wrong thing would be to declare it a national emergency, close the markets, break the contracts and tell people who were on the right side of that trade, sorry you actually lost. I think it's about a 40-60 probability set on those two outcomes, but we'll see. Was that out yesterday?

So three days we'll put it this Friday's delivery, the 27th? Yeah. Okay. That's pretty interesting. Now, I was thinking who would buy 250 million ounces of silver? You know, Russia did make the comment that they were going to, uh, street silver was going to become a strategic reserve asset for them. Right. Well, we talked about that about a year ago, maybe six months ago.

So that's a big player. I'm, I'm curious to see what happens Friday. Yeah. Well, let me do the math in my head. So if they were buying a billion ounces of silver it would be 35 billion dollars so it's a quarter of that so it's about eight let's call it eight. Seven, somewhere in that zone. That's a big player. So that's yes seven or eight billion but is that really a big player? I mean you know a single Elon Musk could could stand. That's a big player. So that's yes seven or eight billion, but is that really a big player? I mean, you know a single Elon Musk could could

Stand that's a very good point You know, but again if that if you had if you had a collection of big families that said, okay We want a 3% allocation of silver. It's You get there quick So I think that's what I mean is so important to reiterate So I think that's what I mean is so important to reiterate We have these huge imbalances and by the way, these are tiny markets because they've kept them suppressed for so long Right right now. I didn't I didn't pull the date into this but right now they are scrambling They are having a major copper shortage on the LME. It's way upside down

Contracts are blowing up all kinds of stuff's happening because again, whoops, you know, they have a huge contracts are blowing up, all kinds of stuff's happening, because again, whoops, you know, they have a huge imbalance between deliveries and contracts at this point in time, so we'll see how that settles out. But these sorts of noises, Paul, the popping creaking sounds are happening more and more, but this, this, let's keep track of this. Let's keep an eye on this, because if that happens,

I don't know what price silver has to get to, to clear that out, but it's a lot higher than currently. Well, it's going to be a lot higher, and the momentum trades are going to jump on top of it if it actually breaks out. Silver looks like it's up about 1.2% today and technically looking very strong. So I like it from a long-term standpoint, obviously not a recommendation you're going to have for your personal situation, but I do like it from a long-term standpoint, especially in consideration of the historical ratio. So silver tends to follow behind gold. So there is huge upside potential in silver right now, and that could cause it to unfold

really, really quickly. It could, it could. And it tends to be fairly volatile. It's not quite the widow maker that natural gas is but it's a it's a pretty bouncy It's pretty bouncy metal. Um, speaking of which just sort of close this out on gold and silver I would be remiss if I didn't point out that Uh germany and italy they would like 245 billion dollars of their gold back from the u.s. Now remember paul in january A couple hundred billion dollars of gold flew right away on planes came

right over from the London faults ended up in the United States I'm gonna bet this takes three years it's gonna be hard it's like this is how the US operates Germany Italy you're gonna have to learn this when we want the gold we get it like that day or that week when When you want it back, oh, there's, you don't understand. It's heavy, there's logistics, we're gonna have to get planes, there's security, ah. I bet this is gonna be harder than it should be. Just a guess.

I would think passing from government to government would be something that was relatively easy to do because you've got the full way to both Governments militaries protecting that on the way. Yeah Yeah, what's the excuse gonna be this time? And what does that say right about the US and the trust in the rule of law? The trust that we're truthful in what we're gonna say when they're requesting that back to bring that back home One of those big things that really, really damaged. I know there's get they have this spin that, you know, you know, Trump managed to do this

amazing thing and avert World War Three. I can be okay with that on the back end. But on the front end, we were mid negotiation. And when Israel bombed Iran, they killed the chief negotiator on purpose, very personal thing. So, so all of a sudden, I can't imagine a more damaging thing to your world standing than to say, oh, I can't trust, like why would I, like what do we tell in Germany,

don't worry, we'll negotiate a good outcome for you. Like they might be saying, I can't trust your negotiations. Like that's completely normal and ordinary. I don't know why people struggle with that as a concept, but if you display that you are not trustworthy or not agreement capable People notice and they behave accordingly. That's just life Right. It's prudent and wise and it's our survival instinct You know you can

I may not like somebody that I trust You know, there's always a personality that you may not like somebody that I trust. You know, there's always a personality that you may not like their personality, but I can certainly respect them. And I love the people that I can trust and respect, right? But if I can't trust someone and their word is not true, and even legal contracts are not true, right? There's those people we've dealt with that

you have to read every legal contract because you know they're not trustworthy. So you put them in a legal contract, but then they've got attorneys that'll work every way they can to take advantage of you in that legal contract. So that trust matters. And I think that's the one thing that the US had for the longest time. And it's clear that we're deceptive in our ways now, and that concerns me and that breaks my heart because as a world we need somebody that's going to stand up and be truthful. And even in our lives we all have to have those friends. What was it I saw today you needed three types of friends. One's that's always going to tell you the truth. They love you enough to risk the relationship

to tell you the truth. And they care. So those are the people that are gonna hurt your feelings the most, but they're the ones that you need to be surrounded with because they're gonna keep you from doing something stupid. And then, you know, they said somebody that's trustworthy enough that you can share and they can keep it.

And then the one that, you know, grab a shovel and show up if you need some help, right? Everybody needs one of those three friends. But the world needs somebody that's truthful, that is not deceptive, and will do what they say they do. And that's one thing we're not seeing on the global stage right now. Well, I like to conduct myself with high integrity, and I really, I just think it's an easier way to go through life.

You say what you mean, you mean what you say. You know, and, you know, there's, to me, I truly believe, I forget who said it, might have been Benjamin Disraeli, but war is a failure of diplomacy. It means you couldn't find a way to work your, talk your way into a mutually agreeable outcome, right? So it's a failure, right? I think it's become a first resort not a last resort

And so in our country and how we operate and so it's like, you know How do they put it like well Trump gave him 60 days, you know, it's like well that that's not a negotiation Paul when I say you have to do this thing for me and in X amount of time or I'm gonna hurt you It's not really we're not negotiating are? No, no, that's a mandate. That's a mandate. I'm gonna give you 60 days to think about how much pain I'm gonna deliver if you don't do what I want you to do.

Right. And then, of course, people take notice and all of that. Now, what was fascinating is, you didn't hear much from China about this, except they said very clearly we think bombing nuclear facilities is a bad idea. It's a red line, it shouldn't have been crossed. I kind of agree with that. We might be a little aggrieved if somebody came and dropped bombs on our nuclear facilities and spread radiation

everywhere. We might say bad idea. So I can understand that. Japan and South Korea, Paul, both left the G7, the NATO G7 meeting that's happening. They both pulled out for that because of that reason. They're like, we disagree with that policy so strongly. The Yank, the prime ministers of both countries, did not go to the NATO meeting because of course they have a different nuclear sensibility about things. But added up, you and I have been talking about this BRICS thing happening, which is Brazil, Russia, India, China, South Africa, but not sure South Africa belongs on

there anymore but this now I'm hearing it's this feels sort of like East versus West we just lost Korea and Japan as partners who said a bridge a step too far China's obviously not on board with this Russia's not on board with this so I think we're still shaping up here it's gonna be kind of East versus West in this larger story And I'm increasingly seeing Europe is a complete basket case And again that comes back to the old human nature of just pride comes before the fall when we think we're bulletproof That's when we're at most risk Whether we can back it up or not

Because because there's always a way for your enemy to find a chink in your armor. There always is, especially the more boviating and prideful we are. So, but what's interesting is the BRICS is continuing to build relationships and economic relationship. They're manufacturing,

they've got access to natural resources, all the things that we need for the economy to go around. They're continuing to work towards and take movements towards independence and lack of reliance upon the United States. And we're continuing to do things that is in the West, Western worlds, to force them in that direction. And I don't understand. Maybe it's just hubris. direction and I don't understand maybe it's just hubris maybe I

Don't know I Don't know but but the global The global scene is changing and it started really quickly with the weaponization of the swift banking system the US dollar The sanctions and the lack of respect for for rule of law in the West. Yep. Well, a lot is changing very, very quickly right now. It's why you and I do what we do, hopefully help people stay apprised of all this, keep your head on a swivel, understand, but you're going to have to make some plans.

I don't know if you saw it, Paul, but I had an interview, just went up this week with Michael Gayet. And, you know, I wanted to talk to him because he talks about the credit. He thinks there's a credit event coming and he's really got his eyes focused on Japan. And I wanted to talk about that with you because I do think the signs are before us for those with eyes to see

that something big is happening right now. And it's no small measure, this chart that just came out on Bloomberg yesterday, day before, but what is going on? So the Bank of Japan has been just they just buy Trillions and trillions and trillions of yen worth of their own government bonds You saw one last huge push up through here, but this is brand. This is the most bonds they've ever sold

So they are quantitative tightening now for the first time in 15 years. I think that's a big moment right there. That's like they wouldn't they're not doing they're being forced to do that. They're not doing that out of fiscal prudence. That's my best guess. I haven't kept up with all the data but from what I understand their inflation started to pick up correct. They've had to raise yields a little bit. That's quantitative tightening tightening maybe they've reached the point to where they understand it's starting to get out of control and they're having to act now before the pain gets a lot worse well i mean it's very on one level it's pretty simple when they are buying bonds obviously they're printing money and throwing that into that's yen just sort of admitted into

the world but if all of a sudden those yen had to come back home again you have to absorb those in some critical way so that's what selling a bond is to a central bank like the Bank of Japan when they sell a bond they are taking putting that bond out there and they are absorbing the yen so that they're saying we need to get yen off the market right and they're doing that presumably to defend the yen they need so that leads to higher interest rates because when you sell a bond the yield goes up and vice versa when you buy bonds the yield goes down so they're there obviously you and

I've been talking about how the yields have been spiking in Japan so it's clear that they're not only okay with that, but they are part of that story and have been selling into that rising yield structure. So they want higher yields right now. So if I had to put all that together, Paul, they are saying that their local domestic political pressure for the inflation they are receiving has now exceeded whatever pain they might think is going to happen from reversing 15 years of being the emitter of last choice of Yens and whatever quantities. But it's a get its regime change and I think it's I think inflation is driving it. Best guess.

That's something else that's changing in the undercurrent of the global economy right now. If that ultimately means a stronger yen or a stable yen with the US dollar declining doesn't that unwind the yen carry trade? It does. Carry trade gets it right in the shorts. And that's a massive amount of liquidity for investing in US markets and treasuries and everything else. That's another signpost of the undercurrents are changing, but yet the market's partying light, there's never gonna be any issues. Yeah, I wanna look at currencies real quick here

and see what's going on. So here's where we're at right now. Obviously this goes back, these are daily charts, so every one of these candles is a day. The US dollar's sort of been trundling lower. Here it is at 97.28, which it's been here a couple times a couple times sort of hanging out there, but the euro has gotten a lot stronger That's what that means going up into the right the British pound has gotten a lot stronger the Australian dollar New Zealand dollar

Bitcoin Swiss franc of course they have a hard time keeping that bad boy down But the Japanese yen is certainly up in the last three months, but it's sort of been bopping around This is this is the Bank of Japan attempting to keep the last three months, but it's sort of been bopping around. This is the Bank of Japan attempting to keep the yen from moving too much too far too fast. So it's the only currency out of all of these that hasn't really advanced relative to the dollar a lot since April. But technically going sideways is a little bit of a strengthening

Unlike the euro which is moved in the opposite and the GBP and the Canadian Yeah, that's interesting. So but I do think Japan's got a fight on its hands here Obviously they they did it was History books will be written Paul. They're gonna say what are we thinking? So our population is aging and it's shrinking. And our response to that was to keep pumping money into the banking system so that we could always have more debt outstanding, because we needed to keep the debt markets happy.

At the back end of that, you know, all that debt has to be paid back by the productive output of the people who live and work there. Whether it's Sony's debt or the government's debt or the municipalities debt or a household's individual debt, municipalities, governments, businesses are still made of people. So they were just really saying, we want, we're going to put more and more and more debt per person. And by the way, those people are getting old and there's few of them.

And we're just gonna keep putting more and more on because that's what our banking system seems to be liking. I just, I think it's one of the dumber things. Ill considered. I consider the Japanese more long-term thinkers than that. But maybe I miscalculated. It seems to be focused on short-term gain without choosing to ignore the long-term pain.

So it's a human thing. It's a human thing. Hey, I do want to talk about the dollar. I want to share some charts on that for a minute if you don't mind, just because I do find this interesting. This is US dollar cash settle, a 4X. So this is a daily chart, okay? Shorter term move of the dollar.

You can see we were bouncing a range, started to break out. Then we broke below this, this kind of general level here. This is on a daily. What's interesting to me is when you look at it on a weekly, so this is going back seven years. So over here is seven years ago, there's 2021. We had this area of support, and we broke below the 200-week moving average, which is just a technical level that the institutions pay attention to. This break down here is

pretty big. And I know we're oversold in the short run. But that's a good intermediate term breakdown. And we may get a balance. Now from a long-term standpoint, this is monthly. This is going all the way back to 1986. So you can see the top of the dollar here, which would be resistance back in 2000, 2001. And we've been in this nice uptrend,

but that breakdown sits us right on this level. So I'm really curious to see, I'm watching from a long-term standpoint from where we really are. You know, like we talked about gold breaking out technically several years ago and it's had this huge follow through. If the dollar can't hold after what should be a normal bounce up here, that trend line and the 200-month moving average,

then it's a high probability we're going to see a much weaker dollar. And then this is a price momentum oscillator here. The only thing it's telling us is just lower momentum, right? Slower momentum. So it leads me to believe that at some point in the next year or two, if the path we're on doesn't change, we're going to see a substantially weaker dollar, which means as an investor, you're going to have to change strategies and have something adaptive because what's worked in the prior environment may not work as well going forward. And that's another

indication that commodities, international investments, some of those overlooked, ignored, despised investments from a long-term standpoint may be getting ready to have the wind at their cells, you know, behind their cells instead of a headwind for them to try to operate into. Well to close this out, this just came in. So I haven't had a chance to analyze this. I can't even swear it's true. But this speaks to the geopolitical risk. Make Old Great again saying that Mexico says no new mining concessions are going to be

granted. So with Silver Academy going on to state sell, and he's Silver Equities in Mexico off the back of this because this is nationalizing stuff. Silver mining equity, president of Mexico firms, no new mining concessions granted. So if you're operating down there and you're a silver miner and you have a next prospect you want to go to, it's not going to happen now for whatever reason. Maybe it's a shakedown, maybe they got the environmental bug, I don't know. I don't know what this means yet but that's the kind of stuff where if you

were you know Mexico is not just a silver producer but it's the world's largest silver producer I think. Might be the second, I can't remember. But it's way up there right and and now they they're saying that they're not going to have no more, no more new mining concessions, at least for now. Whatever that means. So that just goes to show you, Paul, you can have all the right ideas, but the governments can come along and do wackadoodle stuff and do that geopolitical risk. And then you brought silver up again, not to change subjects. Stay on that as long as you'd like. political risk.

Now that you brought silver up again, not to change subjects, stay on that as long as you'd like. But I would like you to explain to the, to the listeners out there, the four nines in silver versus the three nines. We haven't talked about that a while. Sure. Because, because I do recommend the four nines now after your explanation, when you're going to allocate the silver by four nines. I know, I know gold core and others have the four nines and 100 ounce bars. You've got the Canadian maples. There's others that are there. But if you don't mind

take time to explain that to them because I think that is important. Sure. Yeah, I've been investing in silver a long time. You know, it comes in all these different products, right? You could have silver jewelry. You could have junk silver as it's called. That's 64 and earlier US coinage various other dates from other countries In their own local coinage so you could have coinage you get a bars Right you could you could have even old Viking torques that go around the arm and the neck or whatever So however you want but When people are talking silver, I'm talking about investing in actual physical silver bars and coins. And if it comes in two flavors, one is called three nines,

which is 0.999 pure, right? Right down to the, it's only one in 1,000th impurities, right, 0.999 pure, 99.9% pure. But it also comes in four nines of purity with that extra nine on the back end, so that's 0.9999 pure, right? So only one in ten thousandths is is impure the reason what do you get for that extra nine well

usually doesn't cost you anymore like Canadian maple leaves or four nines right and they cost about the same as the US Silver Eagle which is three nines so what do you get for your extra nine well it turns out that the electronic industry can take that four-9 straight into its supply cycle and use it. So if they wanted to say make, if they're running short for making solar panels or something, they can just grab the 4-9 stuff, melt it down, use it straight out. The 3-9s would have to go back into a refinery, they would have to convert it into 4-9 pure

silver so it's ready for industrial uses. So it just means that should we ever get to a moment Paul where there's a silver shortage we know that the marginal bidders are going to be industry, right? Because whether you use, you know, three dollars or thirty dollars of silver in a ten thousand dollar car is irrelevant, right? Roughly speaking. So you know, that would be the silver soldering and things like that.

So, to the extent they want that pure silver, they're gonna be a ready-made demand customer for you should we get to that moment where there's a scramble, all the silver soldering and the solar panel manufacturers suddenly say, hey, we want this stuff and there's a shortage of it. I would expect to see a premium at that point on four nine silvers, meaning silvers, whatever. I'll just make a number up $78 an ounce, but there'll be a premium on the four nines because

you have a buyer who's like, I just need that stuff today. I don't have time for that stuff to go to through a three week, six week refinery cycle over here through that other, other side of the supply chain. So that's like, listen, all things being equal, if you get the four nines for almost the same price, and usually it's exactly the same price as the three nines, I take the four nines. Correct. And what's interesting is right now, the Canadian maple, which is four nines, is a dollar less than the Silver Eagle, which is three nines. That's even easier.

So it makes it easy. So, you know, it's interesting. So from 2004 up until 2012, young in the industry just paying attention, knowing that precious metals was something that we needed to have exposure to. Every time that I had money to average into silver, I would look at eagles versus maples

and I'd buy whichever was cheaper. And then it's been a long time now since Maples have been more expensive than what the Eagles have been. And then with the information of the four nines, it's a no brainer if you're going to add one by the four nines, especially at a discount right now. Guilty little secret. You know, I just go onto the Costco website and when they have the maples, I buy them.

I'm always too late in the morning. By the time I get on there, they're already sold out. They're already gone. Yeah, I understand. But yeah, with Goldcore, it's all maples that I have there Stored with them. So I like the maples now. I did ask Matt they do have hundred ounce four nine bars So so I like the maples personally, but they do have them for individuals who like to get the hundred ounce Yeah, nine bars. So very nice. I think that's just the reason I want to bring that up

It's just a little bit of I want to bring that up is just a little bit of extra information to stack everything we can in our favor for odds of success. And that's just one extra benefit that I believe is important. So thank you for taking the time to explain that again. I'm also stacking skid steers, implements, uh, all kinds of things now because, you know, Paul, I believe in resilience and all of that and I'm a personal responsibility kind of guy. So I want to make sure that my own food, water, basic bottom of Maslow's hierarchy of needs I can tend to food, shelter, warmth, water, right? So, so I like to take care of those

things right now. I've also been investing in those of late, right? Using sort of these recent events to sort of square up, you know where I think things are going But but you know, we're gonna have to look God bless you for being in your job. It's gonna be so hard because you know While we're all paying attention to the kerfuffle in the Middle East, like we're coming in on the third highest deficit spend year. Like this is just not getting better. So I can look at that and understand that, listen, you know, that could mean that stocks are five times higher next year because they're inflating. But everything's going to be sort of inflating and how you stay ahead of that is going to

take a lot of maneuvering and a lot of balancing of risk. It's gonna be really tricky I think. Well and it is, it's tough, it's challenging, it's stressful. So the biggest challenge for us is, is right, no matter what path you choose, if you're gonna be a passive investor and you're gonna blindly hold into the market, it's gonna work in certain environments until it doesn't. And the consequence, you have to understand the consequences of failure, right? So it's one thing if you're 35, you're 40, you're 45, you're 50, and you want to

work those 65 or 70, your dollar cost averaging into the market. If you have a major decline, look, I have walked people through this for the end of their life at 90. I know what you're going to face in the future. I know the emotions. The thing that surprised me the most was the emotion of investors. I learned this in really 2008. So if you're working, it is a completely different thing emotionally to go through a 50% decline because you're not drawing off that investment.

It's more of a, you know, you're not, it is a completely different thing emotionally to go through a 50% decline because you're not drawing off that investment. As a matter of fact, if you've listened to financial education, your dollar cost averaging, you've stayed the course, it was probably the single best thing that ever happened to you as an investor. Especially if you were dollar cost averaging from the year 2000 through 2014 because you had two 50% market declines market went sideways for 14 years. Your dollar cost averaging dollar cost averaging and then you had more shares when this market takes off. It's a completely different thing for somebody that is five years from retirement. Okay.

And you've got these market valuations that that are in record territory from a historical standpoint. I've got a chart that I'll show in a minute, which will be really good for that just to highlight this point. But especially once you're in retirement, you think you're a resilient investor until you've really enjoyed the first 12 months. And you're like, you know, I really don't know how I had time to work. I can't tell you how many clients that will tell me once they're retired, I don't know how to had time to work. I can't tell you how many clients that will tell me once they're retired. I don't know how I had time to work and do everything I did. The last thing they want to do is go back. They want to enjoy their freedom.

They want to be able to go see the kids travel, do whatever it is. And they think they're a resilient investor until they have that 50% market decline, like 2000, 2003 or 2008. So the reason we run a risk managed portfolio is it's easier to stay the course from a long-term standpoint. It's still not easy. There's nothing worth doing that doesn't require discipline and some sacrifice in the short run. So you know if you're in retirement and you underperform a little bit when risk is really high, missed

opportunity is a lot easier to make up for than lost capital. Because the greatest risk that you're going to run in a risk management strategy is when everybody's in euphoria, you're going to be tempted to throw in the towel and jump. In a passive strategy, at the very bottom when the days are the darkest and everybody is decimated like in 2008, the news media is negative, you're going to be tempted to throw the baby out with the bath water and sell at the absolute worst time. So you're going to face some pain no matter what your strategy is. So think it out well and pay attention to where you are in the cycle of life and say, hey, what's the most damaging thing to me in the distribution phase or five years from retirement?

For most people, that's a major market decline. I can tell you, it's very, very rare that I run into somebody that wouldn't have outlived their money in the Great Depression area that we backtest through because of those major declines. And that's staying the course without making a mistake and selling at the very worst time, which is nearly impossible for people to do. Because they think, hey, I did it in 2008, it recovered. It's great, but you were working, you were 35,

you were 40, you were 45 years old. You kept your job, you were grateful for that. You kept dollar cost averaging in and it turned to your benefit. It's a different thing if you're five years into retirement and you see that take place and you realize, hey, if this continues, right, we take the most recent past, we tend to project it in the future. It's called hindsight bias. We can't get away from it. We all suffer from it. All you can see is, hey, my retirement is going to be miserable. I'm going to be

a Walmart greeter from this point forward. I thought that I had things okay." That's the reason why we run a risk-managed strategy specifically for those that are at near and retirement, because the consequences of failure are absolutely devastating to what your picture of retirement would be. And what concerns me right now is there's so much data that tells us that this is not a time to be ridiculously aggressive. But yet, baby boomers in general, and those closest to retirement, have the highest allocation to equities that they've had in any time throughout history.

So they're more aggressive than what they've ever been without the understanding of the mathematics and how risky it is right now. And maybe they've convinced themselves that it is different this time. Well, maybe it is, right? But there's no indication throughout history that trouble doesn't come at some point in the future. And it's foolish.

It's just foolish to think that there's not ever going to be any troubles or major catastrophes that are going to come in the future. And look, it could be a major earthquake. It may not be an economic event. It could be a major earthquake that interrupts the distribution phase and the distribution channel in a just-in-time inventory economy. So we know what just-in-time inventory, at least I did not realize just how just-in-time our economy was until COVID and the shutdowns and the aftermath of that. So that brings me to the point, Chris, I wouldn't mind

sharing this. I'm going to jump to the top page. So this was of John Husman's most recent letter. And it's good. And I respect John Husman a lot, but the highlight just how risky this environment is right now. The bubble contains the collapse, contains the resurgence, June 12th, 2025. So I'm gonna go down here to page four

to get to what I'm wanting to talk about. So he talks about valuations. Now guys, this is a great letter. It's worth reading if you have time. So his market cap divided by the gross value added presently remains beyond the 1929, 2000, and even 2022 extremes. Indeed, the current level is less than 1% from the most extreme level in US history, which was set in February of this year. Okay. So here's the graphic.

So it's non-financial market capitalization divided by non-financial corporate gross value added. Now I had to pull up the definition for everybody just so we'll know what that is. Let me get back down here and I'll read that out. So what is non-financial market capitalization? It refers to the total market value of a company's outstanding shares, excluding the value of non-financial assets such as real estate equipment or intellectual property.

It focuses on the market value of the company's equity relative to its operating performance and potential future earnings. And what is gross value added? Now, gross value added or the GVA is an economic metric that measures the contribution of a company or industry to an economy. The value of goods and services produced minus the cost of intermediate inputs like raw materials, etc. Essentially, it shows how much value a company adds to the economy through its operations. Now look at this. Here's 1929. Okay. Here's 2000. And here's where we are now. And think about how much fiscal recklessness and stimulus and euphoria and narrative has

gone into keeping this thing going. Okay? We're in line with only periods of time in history where things have panned out. Now you may say, okay, that's 2022, we're three years later, and things haven't absolutely come apart yet. Well, yeah, maybe. This can carry on. We don't know when this ends. And this isn't saying that this is going to end right now. It's just helping you recognize the road signs of where we are, right? You could have argued

back in 1996, 1997 that, hey, we had way further to go. And it did last because there was a lot of people warning and then finally the market cracked. Now to go beyond that, and this is the next chart that I wanted to show. The next chart that he shows is a scatter plot. So it shows the market cap divided by gross value added versus actual subsequent 12 year S&P 500 nominal total return.

So it's nominal. Now one thing I want you to notice here, and I'll read this before we get there, is notice that on average, investors have been able to expect the historically run-of-the-mill returns in the order of 10% annually. Chris, I'm going to ask you this question. What do most people expect that they're going to get out of the S&P 500 over the next five years? 10% annually.

10%, because that's what Wall Street tells you you should expect. Everything teaches you, you're gonna get 10%. But that 10% number that everybody expects annually when the market cap divided by GBA has been close to 0.97. The current extreme stands at 3.5. One would need the S&P 500 to lose about 72% of its value to reach that run of the mill valuation norm.

Emphatically, this is not a forecast. I'm not forecasting either is he, but it's clearly a risk to consider. So let's go down and look at this graph. Okay. So what'd he say? 0.5, what was it? 0.67 this graph. Okay, so what do you say point five? What was it point six seven Chris? Okay point nine seven close to point nine seven. Okay. All right

So let's talk through those two axes real quick just because people may not be able to read them or if they're just listening Well, so up the y-axis. What is that? That is the actual subsequent 12 year nominal annual Total return. Okay, so let me take that off of there. So at.97, where he's talking about here, that's the 10% return number over the following 12 years. Annual nominal 10% returns when you're at that

that little red dot you circled in the center of everything. About.97, yep, okay. So the bottom axis is the non-financial market capitalization divided by gross values just as valuation metrics. Now look, the cheaper the market, right, if that was.51, the actual 12-year return. So this is marking the time in history based on where this valuation metric is and then the actual 12-year returns after that. Yeah. Look at where we are.

That's.35, and I know I'm messing up the chart here, but I gotta highlight that. Well, sure, go back a little bit, and just do me a favor, draw an orange line across that zero percent, the zero percent return mark, so we can see plus and minus. Yes, so here is the 0% return mark so we can see you know plus or minus yes yeah here is the 0% return okay notice that for most of the stock market history by

the way every single one of those dots is a year I presume and so for you know for hundred plus years of data most of those blue dots are north of that blue line right because our our non-financial market capitalization, where's it zero out? It crosses over at 2.2-ish, I'm going to guess, right? That's 2.15. It zeroes out. 2.15, yeah. 2.15, okay.

So if it's below, if it's 2.15, so first thing we notice, Paul, is that there are no blue dots off of that line, way somewhere like in the upper right of the chart or way down in the lower left. Right? We don't have any outliers like that. We don't have any moments in time where, you know, non-market financial capitalization divided by GVA was really low and we had a really crappy return anyway. Right? Didn't happen. There is nothing down in that lower left quadrant. Zero. Right? And there's not a lot in the upper upper right quadrant either. So that's a really straight, that's a really solid piece of data right there. That's a lot of history. Yeah. And by the way, we've

never been here before at 3.5. And that's what the feds trying to sustain like oh we want that to continue. That's what we want. This thing that's never happened in history before we just think that should continue. I mean is that not an eye opening chart now? So right here that's the last scatter plot that we had. Hang on let me back this up so right there and I I can't turn this in the arrow yet right here yep yeah that's the last actual 12-year historical data we had that was over a negative 4% return over that 12-year period of time so yeah we're in we're in a category annualized annualized negative 4% over 12 years that is a fifty percent loss minimum annualized right and to go

back to this he says again one would need the s&p 500 to lose about 72 percent of its value to reach that run-of-the-mill valuation norm mm-hmm is that not eye-op? Well it is and of course the variable that we're holding constant here is that across all of those blue dots the dollar meant something. So it's always possible the market is sniffing out the idea that the dollar is about to go through a ridiculous debasement right so in that case it throws that whole thing off so So it could be that the market is, if you look at what the market thinks about gold right now

and you look at what the market thinks about stock prices, they just have to go up no matter what. Those are consistent with an inflation, if not hyperinflationary train headed our way. Right. And that certainly wreck most people. Well and that can certainly be an outcome that we could unfold, right? It's dangerous to say it's different this time. It's dangerous to say it's not

different this time. Guys, there's nothing easy about the investment process, right? There's just not. But here's the one thing I want to point out. If you were a German citizen, and guys, go back and study it. I've studied it. I'm studying it again right now. If you were a German citizen, and guys go back and study it, I've studied it, I'm studying it again right now, if you were a German citizen, their stock market was, you know, you couldn't sell on a down tick, you know, after it was over, their market dropped what, 90 something percent when an honest market came back. So yes, it did do a better job if you're in German stock market during their currency collapse to protect your purchasing power than it did if you just own marks and a money market account, right? However, if you were outside and you own assets and other currencies like the US dollar, then

you really protected your purchasing power. If you own gold, you really protected your purchasing power. So what's interesting is even if we get that outcome, when you look at emerging markets and you look at commodities in general mathematically, they're not overvalued like the S&P 500 is, as an example, when you look at those metrics. So there are places that you can go that you can protect your purchasing power better

than just blindly holding a market, the US market in a hyperinflationary event. So this is a tough time to navigate. You have to be adaptive. And by God's grace, I'm so grateful for the fact that I met Tom Dorsey years ago and learned the DALI, which is the asset class metrics where it changes our focus on where we can adapt to because we don't have to predict the future. We can look at it. We can be concerned about it. We can recognize the risks, we can be concerned about it, we can recognize the risks, but you just follow the indicators when it tells you to overweight. What's interesting to

me is commodities is one of the strongest asset classes right now that should be garnering assets, your dollars, and a larger position of your portfolio based on all of the tools that we're looking at right now. And this is really the first time that they've shown this kind of strength since it told us to stay away from them, with the exception of gold, going back to 2012, 2013. So I do believe that there's unbelievable opportunities for the adaptive investor out there to better protect themselves than to just put your faith in a passive index and expecting the next 10 years to do what the past 10 years have done or 15 years because John Hustman clearly displayed to us that it's going to be a very low probability outcome.

So here's an analogy I use for people. I'll tell clients this. So, and looking at that data, let's assume that where we are in the chart right now says that if we walk out of the building to get in our car within the next hour, we have a 99% chance of being struck by lightning. Fatal strike.

I don't know about you, but I'm gonna sit in the building for an hour until that risk settle down a little bit. So that, you know, yeah, there's the 1% chance, but how lucky are you feeling? Right? That's, that's where we are. And so next time, Paul, I really want to dive into this because what you're really saying,

you know, it's, it's a different, obvious, it, obviously, both you and I and somebody who's 28 can all look at this chart and come to different conclusions because we're at different stages of our life. You mentioned that for somebody who's in retirement, facing retirement, imminently, that this is a different sort of a dynamic. And so what I wanted to talk to you about is that, you know, they just had this survey came out last week,

which is that they concluded that most Americans can't answer even the most basic retirement questions questions like about Medicare, how long they even expect to live after retirement, inflation, all of those things that I know you deal with and there are some very classic mistakes that they point to that a lot of people make and we don't have time for mistakes and that chart you just showed says you can't afford mistakes right now. No. Because that chart speaks to the idea that the next mistakes will be colossal because

even if it resolves air quotes for anybody just listening and my fingers are wagging in the air, if it resolves through hyperinflation you still lose badly. That chart just says the chance of losing, like you said, the chance of getting struck by lightning, a lot higher than not getting struck by lightning. So we've got to take that seriously. So next time I want to completely devote it just to retirement and retirement planning, how you go about it, what people need to think about and all of that. And I'll do my best to like ignore anything that's happening unless silver doubles in

price. We'll have to talk about that. Silver doubles in price. We'll spend the first 30 minutes rejoicing that, right? We'll talk about that. But outside of that, right? We'll talk about that. But outside of that, let's make that time about retirement. How's that sound? That sounds good to me.

Sounds good. All right. Excellent. We'll do that. So for everybody listening to talk to the amazing Paul and his amazing team, please go to peakfinancialinvesting.com. Very simple form for you to fill out. That triggers an email that goes out and within 48 business hours you will be contacted by somebody at Paul's team set up a

Planning appointment of some kind and see if the fit is good. So with that Paul, thank you so much for your time today It's my honor. Have a great weekend Chris and listeners years.