Peak Prosperity - With A Government Lying This Much Who Needs Enemies?

Episode Date: June 14, 2024

The BLS turns in a whopper, continuing the steady stream of fraudulent economic statistics we been gaslit with of late. Oh, and Saudi Arabia is frowning at the Kissinger era petrodollar agreement…so the US has offered a binding treaty to come to their aid if they are attacked. Wait…I thought the US didn’t need anybody’s oil anmore?

Hello everybody, Chris Martinson here, and today we're going to be talking about finance and economics as part of Finance U. Remember, anything that you see in this video and all resources available at our websites or affiliated websites are not intended as or construed as financial advice. This is for educational purposes. Remember, if you have a financial decision, please consult a financial professional. We are not attorneys. We're not CPAs. We are not financial managers. As well, we do our best to be accurate, and everything we represent is as accurate as we know it to be. Now, let's turn to our program. In certain states, it's what, $200,000, $224,000 is the income that's needed now for a family of four to live the average

American lifestyle. a comfortable lifestyle. But inflation is not a problem. The economy is so great, right? Well, hello, everyone, and welcome to this Finance U. I'm Chris Martinson, your host here with Paul Kiker again of Kiker Wealth Management. Hey, Paul, how you doing? Doing good, Chris. Good day to you. Well, good day. I got this smile on because, you know, I'm cranky today because there's so much misinformation

flying around. I get annoyed, Paul, when they put out their inflation readings because I know at heart we have to parse them and does this mean that? Will the Fed be cutting sooner or more? And all of that. But the numbers themselves, once you understand, if you peel back and look at how that sausage is made, these are some disgusting numbers. They bear no resemblance to people's actual reality.

So it's kind of, you know, we're discussing something fraudulent in a legitimate way. And it just always bothers me a little bit. But let's discuss these fraudulent numbers shall we yes let's do and and along that line but chris you just don't realize the reality of how great the economy is right your expectations are wrong or at least that's what they're telling us right yeah no uh we were told this directly we were told in a number of ways that these people, I think it was that CNN guy, said he's very disappointed because Americans don't seem to appreciate what a great economy Biden has given them. It was the bald guy, Stelter or whatever his name is. But anyway, yeah, we're just not appreciating it in fact let's talk about that lack of appreciation because i notice here um these people here uh let me see i'll pull this up yeah these people are very much not i don't know it just doesn't seem right paul that two-thirds

of middle-class americans don't appreciate the great economy they're living in and say instead that they are struggling financially gasping for air comes to us from june 7th here um and it says a majority of middle class americans are experiencing financial hardship that they expect will continue for the rest of their lives so low expectations uh according to a poll uh findings published by the national true cost of living coalition i like the sound of these people already show that 65 of americans whose incomes are 200 above the national poverty line which is about 62 300 for a family of four often considered middle class said they are struggling financially well 63 500 for family four you can't even you can't even afford a a two three bedroom house anywhere that i'm of course you're struggling yeah absolutely and 200 of that what's

124 125 000 is what they're saying just uh and and i wish i could find the data real quick here i don't know where i stored it but it came came out and said in certain states, it's what, $200,000, $224,000 is the income that's needed now for a family of four to live the average American lifestyle. A comfortable lifestyle. But inflation is not a problem. The economy is so great, right? No, no. Inflation is doing really good. Really good. Come way down. Yeah, and they have to move from the CPI. not a problem the economy is so great right no no inflation is doing really good really good come

come way down so yeah yeah and they have to move from the cpi to the core cpi which which removes the quote um volatile uh food and energy prices which food prices are volatile all right they're a rocket ship higher and now now we get down to the super core, which removes food and energy and then also removes shelter and rent costs because the Fed believes that by removing that, that house prices increases and rental increases are temporary. Well, tell that to the people that have gone out and mortgaged themselves to the hilt to buy rental property. If rental prices goes down, what kind of damage that's going to do to them?

Well, I mean, these would be temporary if the Fed would stop meddling. And every time prices look like they're going to start to moderate, the Fed freaks out, finds a reason to pour more money. They call it quantitative easing, operation twist, whatever. And they just dump more money into the market because the Fed is desperately afraid of financial asset prices going down. And that would include real estate. They don't like it. They've said it. I mean, flat out, they have papers and we want the price of these things to go up, but they never think, Paul, about the impact that has on the generation that's coming along. I would personally, if I was young, I want the stock market to crater 50% because I'd rather start from a lower basis and build my way. But the Fed said, nope, this is

of, by, and for the boomers. We have to make sure that their experience in life is just nothing but a one-way Ponzi-style Bernie Madoff 45-degree ramp up and to the right you know yeah please don't let this fall apart on our watch please don't let this fall apart on our watch that's what you know it really boils down to that it seems with the desperation yeah um but um you know all of that said you know what happened as a consequence of that so this is a live chart coming out from you know this is probably about a 15 minute delay of course the vix got smashed but look at this um it's stocks and bonds all going up a little surprised to see the dow slipping into the red here but you know look at the nasdaq and the russell in particular because these poor these poor little struggling companies in the russell making the caps, they desperately need lower interest rates.

And lower interest rates, of course, are going to make existing bonds more expensive. So they go up in price. So this is what I call a Goldilocks moment where the Fed gets this. And, you know, this is what did the whole thing right here. Core CPI came in at 0.2 versus 0.3 expected that's the that's the rocket fuel for all that green you see on here right now uh it's pretty yeah big big moves because of that one mostly fraudulent statistic right there so i don't know i just i just wish we could just get on with being honest to ourselves again would that be too much to ask you know no i wish we could just get on with being honest to ourselves again. Would that be too much to ask?

No, I wish we could too. And the problem with this is now, when you look at it, let me see here what the data is. So far this year, well, let's go back to that. So the feds, starting back to November, has been in a panic, per se, to act like they wanted to cut rates. Now, they've not done it so far. But now all of a sudden, this data comes out, everybody on Wall Street across the board pretty much says this provides cover for the Fed to come out and cut rates probably starting in September, October, November. Now, I didn't get to read the whole press release,

but it seemed initially that the FOMC statement came out and they removed some of the cuts from this year. So it's like they're kind of starting to take that punch bowl away a little bit. But the reality is with the data coming behind, they don't have to tell the market this because the market knows exactly what they're going to do the first chance that they get to cut rates. So that's crowded money away. So this year and the start and the belief that that they get to cut rates. So, you know, that's crowded money away. So this year and the start and the belief that Fed's going to save the day, this has been the second highest equity inflows in the global funds only outpaced in 2021. So there's been an average of about 1.7 billion of inflows per day on the global stage. Now what's interesting, global passive funds have seen a

positive $374.5 billion of inflows, while active funds have seen a negative $184 billion in outflows. So the movement to passive high market capitalization, high momentum, large caps, specifically USA. So I've talked in the past about the USA has been the only game in town since January 1st, 2008 has been the biggest where value, small caps, cyclicals, and international have all seen outflows. So what's interesting, the indexing and the weakness of that and this passive flow, forget about the efficient market hypothesis. Currently, if you allocate $100,000 into the SPY ETF, not a recommendation, just talking about the mechanics of it, $100,000 into the S&P 500 ETF, $31,000 of it goes into the top six companies just by the way it's designed because the larger companies carry a larger percentage of the weighting. So 31% of your

funds go into Microsoft, Apple, Nvidia, Amazon, Alphabet, and Meta. So that's passive flows. I mean, there's no thought that goes into that. There's no, Hey, are these overpriced? And that's crowding out funding for these other companies that really need it. So in a long-term standpoint, I mean, I know the funds are going there, but really it's not necessarily crowding out funding, but to an extent it is crowding out funding because they're getting the larger shares, 31 cents on every dollar that goes into those companies without thinking, without paying attention to fundamentals, how expensive the individual stocks are. And, you know, and that really sets up this kind of panic chase that's taking place right now. So more and more, they're

crowding us into a space that when things change funds, because of that herd mentality and chasing return and just driving people into that category by bailing the markets out are we going to have any reasonable and wise people left that are actually managing money or is it just going to be a you know an index that once that thing cracks it wipes out everybody that's exposed to it that's my biggest concern with the path they're heading us down right now well my, my biggest concern is that, of course, there'll be this thing called the great taking, which will happen potentially, just because all the rules have been written and rewritten and jiggered and rejiggered, and the raccoons got their little lawyerly fingers in there, and Paul, they've just done everything they can to disconnect us from our assets and sort of make it vague.

And anyway, I feel like there's a crisis coming, and I just don't have a lot of faith that the people in charge even know what they're doing, right? I mean, you remember, like, great financial crisis, Hank Paulson. I mean, he was a pretty commanding figure, you know, smart guy. But even he had to just panic, come with a page and a half memo wade into congress close the doors scream about the potential for martial law and fire in brimstone walks out with three quarters of a trillion to try and start patching up his friends you know balance sheets at goldman which had giant holes below the waterline. Can you imagine, and I don't want to scare you too much, and I apologize in advance,

Janet Yellen in that same role? I'm a deer in the headlights right now. Frozen with pain. No, that's absolutely terrifying. That really is. Because it's clear as day that paulson's mind moves a whole lot faster than hers does yeah i mean i i've watched way too many press conferences and i'm just like struggling to like how is this even possible that this is our treasury secretary at

this moment you know it's um i i've not maybe behind closed. She is all that in a bag of rocks for the chess player, you know, super sharp. And she's got this act. But I don't think so. That's how I read it so far. I think what you see is what you get there. Yeah, that's unfortunate because it doesn't. And several positions in our very important leadership roles, their minds don't seem to move very fast or, uh, eloquently at all. And they don't necessarily have to be eloquent. I'm not worried about eloquent, but they're serious issues. And some conversations that are being had in the halls of power. So yeah, that is, that is concerning, but, but that's unfortunately the situation we find ourselves in.

And no one has, the pain of changing has been postponed to the point that I'm concerned that we're, we're down this path right now that there's no way to, to bring things back to normal without major pain across the board. And fewer and fewer people are having the willingness and the courage to open their eyes and look at the reality of the situation and walk the path less traveled because the longer things go on the more it causes people to be complacent because you're aware you pay attention and really if you

manage money through 2008 to an extent in a period of time when we, we want to be in the fantasy world event to where we can paper things over and it's plastic faces. You are, you're handicapped to an extent because with much wisdom comes much sorrow. And, and it's to the point now where active funds, the large majority of those active funds out there, their responsibility is to try to manage risk in the event that things come apart. Value funds, their focus, that's a Warren Buffett approach, right? He's at large values of cash. A large percentage of his portfolio was in cash, at least at his last reporting.

It's highly unlikely that he's deployed a lot of those funds because you have to pay attention to the basic fundamentals and the, and, and what has stood the test of time in investing in the companies based on numbers and outcome, not just pie in the sky sales pitch. So, well, you know,

it's, I'm so old school on this stuff. So I used to really do a lot of fundamental analysis, right, because I believe in that. It's sort of, you know, Warren Buffett style, not making myself the same as him. But I'm just saying, same idea, right? I would actually get annual reports. I would look at them. I would pour through things.

And now I don't even know how to do that because it was right around 2008 or 2009, all of a sudden, Paul, this new thing came up called non-gap earnings right gap gap being generally accepted accounting procedures right and and so so it's just like not generally accepted accounting procedures right non not those things and i didn't know what i was looking at anymore right what the heck is a non-gap earning you know um it's whatever the heck management wants it to be you know and then you find out that the companies with the highest non-gap earnings reports typically had the highest paid ceos through their compensation which was linked to stocks and so the whole thing's just it really i lost a lot of faith that our regulators were regulating you know um well if they really were we would have had people actually go to jail after the 2008 financial crisis.

In the 2000 bubble, when that burst, there were people that went to jail. But in 2008, there were not, which is still absolutely shocking to me. Now, on our local level, we actually had some some individuals and officers of banks that actually went to jail it happened on the local level with small banks from what i understand across the country at least but not not on in the major firms of the too big to fails and they were just as complicit into into what took place during that period of time sure yeah no i mean we have a two-tiered two-tiered system there um so so this gets really uh so let me ask you this then so what is the reason let's talk about why would the fed want to cut i'm old enough to now paul i remember whole years went by when nobody even asked like is the fed going to cut next or what like there was nobody like whole years went by where nothing happened with the fed funds right now it's like you know a constant daily and it's like the only thing markets and people seem

to care about is let's guess what the fed's going to do next in terms of cutting right so why would they cut so this is the s&p 500 um as you and i have mentioned the financial conditions are just ridiculously easy right now as easy as they've been since the height of the COVID, you know, crisis, if we can call it that. And this is nothing but a one-way ticket up, like we're at all-time high. So, so on what basis, what, what, what's, what are you hearing is the rationale for why we'd even need to, why are we even talking about cuts? Like what, what, what, what, what do we, what are we solving with a cut? What needs solving? That's a good question.

I cannot answer that question. I can speculate a little bit from the standpoint of if you look at debt levels on the consumer, credit card default rates are starting to rise. Credit card default rates, not credit card, but auto loan default rates are starting to rise. We're not seeing it in housing, but typically in the past, if you're going to cut rates, it's because asset prices have come down and you're going to try to hold a floor there. It doesn't make sense to me from a consumer perspective, if you're trying to make sure that the consumer is okay, because if you slam rates back to zero and you cut them again right now, we've not dealt with the inflation that's in the system already. So inflation would re-accelerate again.

I mean, the market seems to be giddy over, you know, super core inflation, any justification that the Fed is going to come out and cut. So when I move from there, from what I hear around the edges, and I don't have the statistic in front of me, you'll probably remember it because I think you talked about it at some point here recently. Let's just say 30% of the Russell 2000 companies, if interest rates levels at interest rates where they are at this level are not profitable. So I don't know if that statistic is correct or not. I knew that it was around 17% not too long ago, which is a relatively high number historically. But is it trying to sell out, save, or bail out those companies that are already struggling? Because the Fed has incentivized corporations to maximize their leverage across the board, which is exactly what took down Silicon Valley Bank when that happened. So are they trying to set the board, which is exactly what took down Silicon Valley Bank when that happened. So are they trying to set the expectation?

Hey, guys, hang in there a little bit longer. As soon as inflation starts to settle down, we'll bail you out. And maybe that's keeping the credit markets going to where there's companies that are willing to continue to lend because they're like, hey, we can't pull the plug on these companies right now because we're going to have certain losses if we push these companies into bankruptcy. But if the Fed cuts rates and gets us back down to half of where we are now, maybe these companies can survive through the other side of the cycle. That's the only thing that I can think of from what I'm hearing around the edges because really none of it makes sense to me.

What about you? What's your thought on the reason why they're so hungry to cut rates? I think because they're just completely addicted to micromanaging that financial assets always have to go up and to the right. I believe Luke Groman is correct that they need to, you either defend the dollar or you defend the bond market. Defending the dollar means if you don't defend the dollar, you let it slide, and that's inflation, right? We're all used to that. Inflation isn't the prices of things going up. It's the relative value of the dollar against things going down. So let's just make sure we got that right because they always spin it the wrong way. Wow, the price of soap is up.

Like, nope. Right. My $1 bill buys less soap this week than it did last week. My dollar's shrinking. The soap is up like nope right my my one dollar bill buys less soap this week than it did last week my dollar shrinking the soap is the same you know right so but uh but i think the pressure on them paul i honestly think that the problem for them is that the federal government now is starting to get in a real debt bind so if they don't start cutting those rates and the federal government can't start you know popping off 28-day paper you know t-bills at something less than 5.4 percent we're going to see that interest cost is is going to eat things really bad um at some point and you saw i mean

this was shocking to me and i think there's a number of ways to analyze this, but the team Biden in response to that said, oh, well, we can't cut spending. That would be terrible. I know. Let's propose taking capital gains taxes from 20% to 44.6%, highest ever in the whole series, worse than World War II, highest ever. It's such an emergency. You know what the emergency is? We're sending 100 billion to ukraine every week or whatever you know it needs or you know we're just spending money like

crazy on stuff we don't need right just left right and center right i don't know how much we're going to be spending on these illegal migrants you know not immigrants migrants right to parse those words carefully but it's it's a. It's in the many, many tens of thousands per person that is being expended, and there's millions of them. I mean, it adds up, Paul, you know? It adds up a lot. They said, yeah, let's quit capital gains tax. Let's make corporate income tax higher.

Let's eliminate the 1031 transfer for real estate. Let's remove the depletion allowance on oil and gas on and on and on so they just proposed like these massive tax increases now i don't know if they'll get them but it was a weird thing in a in a in an election year very weird thing to have any of that stuff like that's an odd thing you're right in an election year when it's supposed to be this close, as they say, and it's a contingent election, why would you risk letting something like that out? They don't do that in the past. They usually tell you what you want to hear. And then on the other side of the election, they're going to do what it is that they want to do.

And so, yeah, that's pretty interesting. It really is. But I think they're going to have to cut rates or we get into a real interest debt cycle for the U.S. government that they can't get out of. Well, and the worst part is, though, that's not going to solve the problems if we cut rates and the halls of power, because that's just going to fuel their willingness to spend and slosh money around the system across the board. So, you know, it's a moral problem in the halls of power, and it's an integrity problem. And it's a short-term thinking problem and an instant gratification problem. It's not looking out to where we're going to be and making sure that, that we're good stewards. I say, we is, is the political leaders for our citizens and the generations in the future that there's no fear. You know, I've spoken to a couple of people, spoke to an individual not too long ago.

You know, it's like, Hey, I inherited the family business and I, I just want to make sure that, that I can expand it and be as good a steward as what my father was before him. You know, there's no concern about stewardship. It's, it's, Hey, I'm here. I'm smarter than you. I'm educated wherever, you know, you should do exactly what we should do because in theory we have things figured out, but we've never gotten our hands dirty and, and actually getting out there working in the reality of whether these theories are going to work or not yeah i'm with you on that um the abstractionist versus the reality people we're gonna reality is going to make a comeback you watch you watch um it will hey so how does this factor in so we just had this big bricks

meeting right um and so the bricks said you, they're in the final stages of completing its de-dollarization program. We saw that in Dubai, they lit of the middle east and russia really getting along pretty famously uh at this thing and they're very clear about it they said what they want is they want to de-dollarize they had all the right reasons you and i have discussed right it's been weaponized it's it's not a it's just not not something they're interested in being a participant any longer if that comes to pass that they really gain some traction on that and it's true and i can't source this everybody take this with a pinch of salt but i um it was reported widely that muhammad bin salman chose not to re-sign the 50 year old kissinger agreement which we would otherwise call the Petrodollar Agreement. And that was on June 9th. Didn't happen. So if it turns out that Saudi Arabia is backing away from the U.S. and

turning towards China and is not going to use dollars, but will use something else instead, whatever that new thing turns out to be, I think that this could force the hand because now it's not in the Fed's total control to cut rates or not. Right. It may well have to raise rates if it guns into a larger funding, a balance of payments problem. So we'll see how that plays out. What do you think about that? Well, I think that's pretty interesting because we had talked about the unit and all of the effort, and I'm still in the process of doing some research. As soon as we get through this weekend, I'm going to, I'll have some more information to share about what I've learned about the unit over the next couple of weeks because I believe that's ridiculously important, especially when you get this announcement that they're continuing their plans. It's a situation where I believe they're forced to because of the behavior of the United States. Well, that does make things really interesting,

because if you have something like the unit that they offer, that has the ability to be widely purchased and allocated to, well, you don't have to trust them. They've got it set up within the system, especially if they have that 40% linking to gold, that now that you've got something trustworthy that's decentralized, well, the U.S. dollar is centralized. the gold that now that you've got something trustworthy, that's decentralized. Well, the U S dollar is centralized.

So you've got a centralized individual that's using their political power to weaponize our currency. And no longer do you have that barrier of integrity, you know, that boundary that I'm not going to abuse my position of power. So they've set up something. Apparently if the unit is what it looks like it's going to be and that's where they move to,

you've got integrity built into that system. So it's the best of your kind of blockchain technology is where's your decentralization. That's incredibly impactful for the U.S., and that may be game over as far as this slamming interest rates down to zero because of the fact that we will have to raise rates to draw capital competitively inside the United States or they're going to have to let the markets go because where is U.S. money going to go if the markets start coming apart in the interim period, it's going to go to treasuries. So that does make this easy slide and easy game, hey, bright sky and fantasy land of how things are going to work out a lot more challenging. And for U.S. investors, all of that money that's been flowing into U.S. markets because of momentum.

That's what happens in the herd mentality. This is why the bubble in late 1990s, the bubble in 1929, and what I think we're in the midst of the everything bubble, it's impossible to determine when it ends because you're in uncharted territory. But the reason it's so impossible is it's pulling people off the sideline. They just can't take it anymore. In this situation where you're fighting tooth and nail to try to get through, and I'm having a conversation with one of my children right now. He's like, Dad, I'm making good money, I mean really good money,

and I just can't save it fast enough. The cost of everything is going up so fast. So they feel that desperation, and when the last person comes off the edges, that's when things tend to start coming apart. So, and then most people just think that it's going to be more of the same from their hindsight bias. So that's going to dramatically up in the global order. If they're able to pull this off successfully. And the question is, is how hard are our U.S. politicians in the U.S. going to fight to maintain that power or equalize that power or keep that transition from taking place? But I didn't realize that about him not signing that on June the 6th or June the 9th. You said that to me is a pretty big deal.

Yeah, it was. I found the original. So here's the thing. I couldn't find the actual agreement it's kind of hidden but i do know due to a new york times article written on back that it was on june 9th 1974 that was the original signing it was a big thing kissinger signed one of the top representative for saudi arabia signed it was this whole thing it was a nice hotel but they had a nice dessert trolley off to the side. But we don't know what the deal actually was. We just know that it was described as the petrodollar deal where Saudi Arabia is free to sell its oil in dollars and we would help protect them.

So on June 9th, so I pointed this out for my subscribers a while back um on june 9th the wall street journal ran an article that same day on on june 9th but it had nothing to do with that petrodollar deal it said biden in the context of israel is would love to get saudi arabia closer to israel so he offered a really really big uh uh military package to saudi arabia is a carrot to dangle out there. Because of Israel, they are saying, I'm positive that's smokescreen. It was because this other one was expiring. And this caught me off guard because it got so little fanfare,

but this bothered me. It was a mutual defense pact. It would, in a treaty form, obligate the United States to engage militarily if Saudi Arabia was attacked. That's a huge commitment. It's a big commitment.

That's a huge commitment. As volatile as the Middle East is, that doesn't make sense that you would commit us to that unless you're desperate to maintain that relationship and try to protect the petrodollar status. Because imagine this, if they've got, and I don't know, you know, they don't state clearly, clearly what the other 60% is on the unit. It does say, I mean, it does say clearly that it's going to be a, you know, a weighting of the currencies of those countries that are there. But if you go back to what they've talked about before, going back to 2010, when President Medvedev, it was President Medvedev of Russia at the time, and they introduced that SDR, which was

the special drawing right currency, which is basically the forerunner of what appears to be the unit. The unit just has newer technology and blockchain and decentralization inside of it. It's more of a digital network capability, which is quite fascinating. But the rumor has always been that, hey, the countries that are going to be there, based on the natural resources that you have within that country, you'll be linked in. So could you imagine if Saudi Arabia comes in and says, hey, we're going to pledge our oil reserves and future unit and future production in a manner similar to what we did with the petrodollar through that agreement there, then that's a major shift and gives even more credence to the unit if you're going to be able to exchange it for oil within that

agreement. Yeah. And what does that do to the U.S. now? Well, it's got to be shifting around because, you know, what is Saudi Arabia? All it has to do is look off of its left coast into the Red Sea and find out that the United States apparently can't protect all that much. Like, we're having trouble if people haven't been tracking this in the red sea because of the houthi rebels um lobbing missiles we still can't like get that situation under control at present so uh here's the thing ships and boats as magnificent as the technology on them may be it's really old you know it's still like that's passe we have these drones now we have these anti-ship missiles we've got hypersonics the whole world has changed and boats are basically um looking for an excuse

to sink right you know and and so i just don't i don't think we can project power that's not lost on on the saudis like oh yeah you're going to come to our aid yeah how you fly in here you sail in here tell me you know what are the particulars, right? Are you going to pre-station a bunch of stuff here? So there's big geopolitical things happening right now. I think every investor has to be aware of them because these could really upend things at this stage. Well, if I'm them and I'm thinking about it, like you said, okay, if we're going to be in an agreement where I'm going to rely upon you to protect me, I need to make sure you're efficient, you're powerful, and you've got the wherewithal

to step up to the plate. So here you are, what is it, the $300 million is what, was it $100 million or $300 for the floating pier that has been an absolute disaster in the Middle East right now? I mean, seriously, we can't even display with today's technology. We're running in there. Oh, we're going to build this floating pier. We're going to commit American taxpayer dollars to it. And I think it was Dave Smith or somebody made the comment that it couldn't withstand three foot waves. And it's obviously not been able to fulfill the function that it was designed to do do who could have predicted three foot waves seriously in the middle of the ocean or sea that large yeah yeah but think about i mean it's so

emblematic though it's thanks for bringing that up because to me it's emblematic i'm sure there was a really sweet powerpoint presentation i'm sure that a 300 billion is probably a low ball on what that pier caused right you know it goes with our 45 thousand dollar shovels and 18 000 nuts you know that go with the 14 000 screws and all that right um so so but this is a really important point because i i do think people need to understand that it is a unipolar world a lot has changed my whole thinking changed completely because of the ukraine war where i watched russia had a combined their total military expenditure is 82 billion dollars in the year prior to that adventure i don't know what it is now but still we'll call it 80 the united states was 10 times larger than that and nato's was half again you know so so russia's 80 billion was up against about one and a half trillion

dollars right and we emptied our warehouses m1 abrams bradley's you know storm shadows leopards like like everybody was throwing in what they had and russia just chewed it all up like just chewed it up right so that the asymmetry of that paul just says everything changed i know most people don't get it yet. Where is it still most powerful military and all that rah rah. But the truth of the matter is, it just changed. I feel like we're at that moment like World War One. There was this French general lost six hundred thousand very brave cuirassiers that the horsemen. Right. Because he didn't figure out horses couldn't charge machine gun nests, just couldn't compute it, you know? And I feel like I'm watching those same computational errors happening right now. Well, it's, it's that arrogance and, you know, what, what comes to

mind is Jordan Peterson made the comment about the importance of truth. And I'm going to butcher this because I'm trying to pull it up to memory right now. But his point was, tell the truth or at least don't lie. And that's important. And he says the problem is, as he goes on from that, it says if you don't tell the truth and you live in a lie and you're lying, you're trying to control the world. You don't know the outcome. You think you know the answer. So he didn't say this, but I'm reading into the God complex, right? But what's important, he said, beyond that is if you choose not to tell the truth or at least not lie, once you start living that lie, it distorts your view of the entire world. So you cannot see

anything for the truth that is out there. And that's my concern. I mean, every American knows that they're lying. So they know they're lying. We know they're lying and they know that we know that they're lying, but they continue to lie. And that's my concern. We're starting to see all of these just ridiculous decisions. And, and the fact that, that they're not thinking critically about what's taking place or being efficient. So you take some farmer who has very little tools and is a long way away from the country. It's amazing how efficient and what they can do with the little resources that they have. And then those that have all of these resources at their disposal, they don't appreciate the need for efficiency because they feel like, hey, I've just got all these resources. I can go out and do with it what I want to do.

And that's that arrogance and that pride that leads to the fall. And that's why these major empires throughout history have gone down. They're weak men which don't tell the truth. They don't take the time to challenge those around them. They can't take constructive criticism because they're not strong enough to do it because they need to be fed, you know, flattery all the time to make themselves feel good, to feed their God complex. And that is the weakest position that any of us could, could ever find ourselves in. And unfortunately that lack of honesty and that need for power and

instant gratification in our leaders has put all of us in a very precarious position right now. Yeah. Obviously, there's war drums on the horizon people are worried about. I'm worried about it. And it's for reasons that nobody can explain and that bothers me right so i i think war is a very serious thing i i love the proposals and i support them entirely that says hey if we want to go to war congress has to vote on it right and then when they do that the rest of the proposal is if they're of an age they serve if they have children they serve in front lines none of that rear echelon stuff right front up because that just means you believe in it right it's that important you vote

for it and you put your life on the line then i'd go okay it might be important right um if you don't have if the consequences fall to somebody else i don't believe i don't believe what what they're saying you know just how i'm built so i nobody can explain paul i've stumped a lot of people this is my my big stumper like why are we in syria we're still there you know the closest we got to an answer was trump when he blurted out i think the thing he wasn't supposed to say is oh we're there stealing their oil. I was like, whoa, you can't, you can't, you, did you say that? You know, cause that's what we're doing. Um, but beyond that, like what is the compelling, why are we there? Right. What are we doing? What's the mission? What's success look like? He's the only one that stated something. And one thing about Trump,

he is not self-aware at all. And the one thing you can really count on him to do is if there's a thought that comes into his head, wherever he is, it's coming out. So that's probably the most honest statement that we've seen. And I've never been able to figure out why we're in Syria or where we are at this point either. Well, right. And nobody can explain what my compelling interest is in where Ukraine's ever-morphing boundary lines, which have changed just constantly throughout history, why that's critically important to me or you or anybody here that we would risk a full-on nuclear conflagration. I don't know. I don't know. So, hey, I got a mystery chart for you.

So we were looking at the S&P, and it's going up. And people are like, oh, but this is crazy. It should be going down. I don't know what should is anymore, but what do you think this is a chart of here? It's an exponential function, obviously. Well, my assumption would be in a couple of charts that I've looked at like that, I don't necessarily think it's a stock. It could bear a national debt. I don't know. I'm not sure what that would be in a couple of charts that I've looked at like that. I don't necessarily think it's a stock that bear national debt. I don't know. I'm not sure. Well, I can't see it quite clear enough. Oh, that's the Venezuela stock market. Yeah. Yeah. You know, it's just like skyrocketing. And of course, Venezuela is falling apart during that period of time. And it's just gone even to

more insane levels if I pulled up a more a more current one and if you had invested in the venezuelan stock market back the beginning you would have made many hundreds of thousands of percent returns right and you would have lost ground compared to inflation still yeah right so but you know you got to play the game that's the thing that i also decry and so thank you for doing what you do because they've set the table and said well we're going to lie about inflation we're going to create the conditions for a lot of it right and then in order to just not get killed by it you're going to have to play this game right and then the game is rigged and you know it's one of these things paul like trading is a zero-sum game it is not possible for all the traders to come out ahead just isn't you know

so that's the condition they've set the table and they've said rules for us that favor us house rules are good we pump the markets whenever we need to we give ourselves first dib on that money because you know we're important right it's like john kerry well it's important for me to fly around the world talking about climate change in my private jet right it's one of those rationale arguments like it's important you know and and but then they set the whole thing up and say you have to play like that's what i don't like is you have to play the game you have to unfortunately you do and and although you know one of the things i like to point out is there are a lot of things to be concerned about right now. And I am concerned about those. And I pay attention and I'm aware and I build in strategy planning.

And I've shared that, hey, we're two steps from the exit so we can bolt out the door really quickly when we need to. And that's that fine balance between playing the game by the rules that are forced upon you. Because really you have to. And quite frankly, we don't know. I mean, for each of us, we can calculate percentage probabilities and the economists and statisticians, they can do all that. And that's great. But the reality is for us in our situation, it's a binary outcome. Either it happens and we get a deflationary event in our lifetime or we get an inflationary. Now, my thesis is going to be at some point, things are going to crack. We're going to get that deflationary spiral in the short run, and that may drive funds back into treasuries. But especially if the unit is an alternative and

some of those dollars internationally come back, inflation over the long term, we get that breakout of inflation. They can't, they can't get under control. And it depends on what the response is on the other side of a deflationary event. But the reality is we, we may not get that deflationary event in the short run. So you have to play that game by the rules that are forced upon you. And the interesting thing is if you're a Venezuelan investor and you're in that country, you would have been better to own the U.S. stock market or some international stock market because it would have retained its value better than what theirs did, even though it was going up a lot. So those are very important details to pay attention to that we pay attention to. So from my standpoint, one scenario is what if we don't get a deflationary pullback and we break out into that inflation side and our markets are sniffing that, okay, and they start running? Well, right now the U.S. is outperforming everything else, but there are ways to compare performance return and that real return between U.S. markets and international markets. Right now, money's leaving international.

It's leaving value. It's coming back here. But there's going to come a day in the future where exiting, as the fire starts burning, may not necessarily be moving into treasuries. It may be moving into some other international index that is performing better and much more attractive than what the U.S. is. And it goes up, but may go up more and increase your purchasing power where the U S indexes may go up in that

hyperinflationary event and you're still losing that purchasing power. So there, there are ways, but you have to, you have to be nimble. You have to have tools that are going to give you the confidence to step in that direction. And you have to do it with fear and trembling because the reality is perfection is not going to be discovered. And the thing about the bubble media that frustrates me the most is they're always dangling in front of you that lucky individual that got perfect and, you know, perfection by putting all of their cards in NVIDIA as an example. I'm not saying do that. I'm just talking about an example. So, you know, and we celebrate that. So it makes all of us think that we can do that, but the real investors understand and the professionals, the Stanley Druckenmiller's,

the Warren Buffett's, the others, you're not going to find perfection, but you're going to work a strategy that's going to help you make consistent positive decisions over a long term. Because if we leave it up to our emotions, that's where we fail. And that's where my passive investing is so popular because we don't have to think about it. But we're abdicating responsibility over to an arbitrary index. And now all of a sudden, by passive investing, we desperately hope that the Fed's going to bail us out because they're the one thing that's been able to bail it out so far. So, yeah, I mean, I think, I don't know when this upends, but I do believe it's a lot closer than most people realize. And I can't help but think this, and I'm probably a fool for stating this out loud right now, but with some of the things that I'm seeing take place under the surface, I was shocked when you were warning

people about what was taking place with, with COVID breaking out, you know, what ended up becoming COVID and, and, and you're sharing information. I'm looking at the information you're sharing. I'm watching the markets and I'm like, the markets are ignoring this. Like they were near escape velocity, you know, blow off top run. And they ran all the way into the lockdowns and boom, then it reversed. So I don't understand how Wall Street and all the information we look like and the plan that was behind it didn't start positioning themselves when the data started coming out when you were warning people. So I'm concerned that we're going to get another event like this where the markets are going to be running and tempting people to be sucked into them, tempting them to be complacent. And then all of a sudden they reverse really quickly. And most people don't have a plan to exit.

So they're stuck there like, like during the headlights or they exited a long time ago and they can't take the pain of watching the market run and they make an emotional decision to get in at the absolute worst time because murphy's law that's usually the way it works you know what i like um i like all that but i i'm a big fan of watch what people do not what what they say. Oh, yes, absolutely. This is an interesting chart that just popped up on Bloomberg where they're looking at gold holdings and official reserve assets. This starts back in 1945 is where this chart starts, way back here. And you see this first run here, post-World War II,

coming up in through 1960, about 1963 or so. That's mirrored only by this run right here, World War II coming up in through 1960, about 1963 or so. That's mirrored only by this run right here, which starts about 2009. So the great financial crisis happens, Paul, and the world's central banks took one look at that. They're telling us it's all fine. It's been papered over. We had the TARP. We had the TELF.

We have all these special programs. Don't worry your pretty little head. Everything's going to be fine. But under the covers, and this isn't dollars. this is in millions of fine troy ounces right so this is just telling us what they're holding in bars right yes take the take the take the relative value out well this is a pretty this is a very clear sign to me that's that's that's what they're doing i have it on good authority that a lot of very wealthy families and individuals have started to move heavily into precious metals as well that we may be going from an era where it's hey i want to you know i want return i want to make good return so so it's going from a wealth accumulation phase like how can we make more

to a wealth preservation phase which is like how can we hold on to what we got right that's a big shift it happens from time to time but everything they're doing out there in the CNBC MSNBC Wall Street Journal sort of retail level is they're just trying to convince us stay in the game we need you

fully invested it's that scene Wolf and Wall Street right no our job is We need you fully invested. It's that scene, Wolf and Wall Street, right? No, our job is to keep them fully invested, you know? And so there's always that next thing, you know, that's what Matthew McConaughey's character is saying. He's like, no, no, no, you got to sell them.

There's this next thing. It's really important. They can't miss out, right? So I'm watching that. And I got to tell you, this AI stuff has all the same flavor to me. And again, no specific recommendations for or against, but I'm looking at it. Just the vibe on it has the same feel.

I've been here before, Paul. It's eyeballs. You don't understand. They're not making any more land. It's like it's got all the rationales, right, that accompany something. But I'm always wondering who's pushing that narrative, right? They got a good budget. Like, who's doing that? And it just has a feel, doesn't feel organic to me. It feels a little salesy. It does. And that's my concern. You know, and the reality is, is AI, like the internet back

in the late 1990s, once, once it became common knowledge, Hey, this is going to change. Most people didn't know what to do with it, right? They didn't know how to monetize it. But people were, but now they saw where we were going and they assumed it happened quicker. So they bought Amazon, they bought all of these stocks at the top of that bubble. And it was 13, 14 years, 12 years before they got back to that level. And they've been great investments since then, if you hold on to it from a long-term standpoint. But few investors, you know, most people accumulate the largest amount of their resources right before they have the ability to retire.

And then they feel behind or they, for whatever reason, they feel like they have too large of a margin for error and they get caught up in that game. And then they get hit really hard, potentially right before they go into retirement. Retirement becomes a completely different picture than what they expected it being. So when something sounds too good to be true from a long term standpoint, it typically is. And the story here, I think it's going to make a big difference from a long-term standpoint, but when you really critically think about it, well, okay, if AI, if we don't have anybody serving us when we go to McDonald's or we don't have a tax preparer anymore, we don't need

attorneys anymore. Think about the trickle that that has throughout the economy, because it is deflationary because people are going to lose jobs. If AI replaces all those jobs, there's less people to work and people are already struggling right now. So what's that picture going to lose jobs. If AI replaces all those jobs, there's less people to work. And people are already struggling right now. So what's that picture going to look like in the future? And, yeah, maybe you have six companies that control everything and that's it. Well, that's a miserable world to live in. And at some point, there's nobody left to buy the stocks on those individual companies that are out there.

So, you know, maybe they're in control. So when you think about that from a long-term standpoint, it just doesn't make sense to have this much panic and media mania in the longterm. But I mean, you know, people get excited when the lottery is over a billion dollars and a million dollars for most people is going to make a major difference in their life, but it gets them dreaming about what they could do. And unfortunately, for most people, the lottery mentality is not the way to be successful in the long term. And hope is not an investment strategy. You know, rolling up our sleeves, discipline, and working a plan, and adapting in that plan is how we're successful from a long-term standpoint.

And today, we have to think about many more things and many more risks than what we have in the past because we're at a period of time where we have weak leaders and weak leaders bring about hard times and those hard times are what we must navigate through. But here's the great thing. What's the Chinese symbol for chaos

is both opportunity and danger. So I think that's correct. Crisis. Crisis. Crisis is opportunity and danger. So I think that's correct. Crisis. Crisis. Crisis is opportunity and danger. So in the midst of that crisis, for those who are courageous enough and willing enough and have thought through and have a plan, it'll be the opportunity of a lifetime.

But for those who are putting their hope and faith and our leaders to get us through this, well, they're probably going to be greatly disappointed. Well, I'm hedging my bets. I know you are too. And so can I tell you about, so this is my joy of late. I'm sitting at my desk working. It's 930 because that's just my life. And I get a call and it's from evie and she's out in the yard she said you got to come out and see this so i go outside and it was just nothing but lightning bugs right fireflies just i don't know how many thousands but at any one time there was over you know one

or two dozen just lighting up everywhere right and it wasn't like that when we got here and so we're patting we're thinking you know because we've been doing everything we can to increase the abundance i'm terrified by the loss of insects but to see the fireflies coming back was a really hopeful thing you know but that's because paul we're living in a place where this is what we're doing we're just our plants green if they're not green what do they need how can we help look how can we use our brains to you know we're bringing water and food and we're using and creating abundance. Because that's part of my strategy here. I don't know.

I don't. I'm worried when you say hard times, you know, it's kind of a euphemism. Weak men create hard times. I'm worried they're going to break our supply chains and there isn't going to be food in the store. Maybe a crazy concern. But it was a lot crazier five, ten years ago than it is today. A lot of people are starting to think that way. And I think they should, you know, plant a garden. There's a couple of ways

to think about that as well. You know, I believe everybody should have a minimum of three months worth of the food that they eat on a regular basis in their pantry at home and then rotate those shelves. And if you think about it, it protects you against supply chain disruptions. It protects you against short-term events. But as much as food inflation has been over the past three years, that's a built-in storage of savings that you can use on a regular basis if you had to use it. And I think people are starting to realize in a little bit larger and mass scale that that is a prudent thing to do.

It can be done simply and easily. And for people who don't have the resources, they can average into that over time, you know, double for a while, make a little sacrifice here, make a little bit sacrifice there. And it just provides a lot more resiliency than what you otherwise would have because, you know, they made fun of people have for having too much toilet paper before the COVID shutdowns happen. And then all of a sudden, everybody wanted to be friends with the person that had too much toilet paper. So, you know, there will be a day in the future where you'll be glad that you had those stores there and what you're doing is the same thing that I'm doing. And not only

that, Chris, is it not the most enjoyable thing to have your hands in the soil and to be out there looking at those lightning bugs and, you know, and just enjoying the creation that God gave us and knowing that we're good stewards of it. It's so important. It's so important because I'm not interested in surviving. I mean, I sort of am, but I'd rather thrive. And so, so this, I'm really, you know, I gotta be honest. I went down this path because there was a stick at my back and now I see the carrot in front of it. Like I would run towards this, this lifestyle because it works for me, maybe not for everybody, but I really enjoy, you know, like last last night it almost sounded like a complaint evie said uh you know i said oh man i'm so sore she goes oh i'm so sorry i'm like no no this is a

good sore um so so last night uh uh norm and i we turned a a 31 inch log log into 160 feet of 2x6s. Did you really? Mm-hmm. We got 16 10-footers out of that, and so those are going up into concrete forms, and we'll use them for rafters and stuff on a side shed and whatnot. But it's just, to me, pure magic is going from a log to this pile of lumber. I just, it's magic. That is great. is going from a log to this pile of lumber.

It's magic. That is great. I'm impressed by that. My family had a lumber supply when I was growing up as a kid, but I've not seen anything like that done in years. And that's something that I'm desiring to add to my hobby list in the future. So that's exciting. You definitely should. You love it it's it's a lot of fun um so i would really encourage everybody i obviously work with paul and his team to get the plan you need to have a plan at this you really got to have a

plan for this environment but you know if you work with paul and his team you'll be talking with people who are going to be saying things like yeah you should plant a garden and maybe you should consider gold and silver. And if you're concerned about the petrodollar, so are we. So you deserve to have those conversations with people who speak the same language as you. I would highly recommend it. The feedback has been just tremendous. And yeah, so I appreciate what you're doing. I've had a blast and I do want to say one thing. I've had a couple of people say, you know, you talk about the planning, but I've done a lot of planning. Well, well, yeah, people have done a lot of planning. But the way that we look at the planning is more of a stress test.

And time and time again, the people that have tolerated just out of kindness. OK, I want to know what your recommendation is. I'm going to go through the plan. Have been absolutely shocked. And I've had comment after comment. You know, I'm really glad we did this. Or they'd ask me a question. I'd say, let's do some scenario analysis. Here's option A, here's option B. You know, this is the most shrewd path. This is the most prudent path. Let's see, at least from backtesting you against history, what that outcome looks like.

So I love it. I know it's kind of geeky, but it really gets us to the point where I'm able to show people, um, you know, uh, to quantify for them option a versus option B. And then more than anything where it gets really exciting, Chris, is there's a lot of people that are wanting to do some of these things. And when we get down to that final plan and they get, uh, put in place, I'm like, okay, you have X amount of resources over here that you can free up. If, you know, now that we've got this plan in place to where you can go out and, you know, apply it in these areas that can make you more resilient. So I have a blast doing it. And then, of course, you know, I never make people go through the planning meeting and the recommendation together because I'm way too geeky to make them go through both of those.

So that way it's not information overload. It's, hey, you've got this in place, and then we do the recommendation meeting. And it's been an honor. I've got to tell you something. The people that I'm meeting and the people that are listening to you, they're smart. They're intelligent. They care. They're in every section of society.

Every single person that I have met has been somebody that I would love to be in a community with and participate in a rebuilding if things were to come apart because they're genuine. And they have the courage to look at the world for the potential that is there. And they may not necessarily know what to do with it, but, um, but they're just great American salt of the earth care about this country people. So it's been quite the honor. Oh, I'm so glad to hear that. I'm not surprised. Um, you've got some great people in our tribe and a lot of good people out there, a lot

of good people, right? So we're going to need all of us. And to be well-resourced, because there will be a rebuilding. I know everybody's sort of focusing on the funnel right now, which might not be a lot of fun, probably won't be, but there's an after to that story. And so the point is to make sure you're positioned for that, really, you know, as best you can. And that's our job.

Our job is to help people build resiliency and then operate a strategy. That's not going to be perfect. I mean, yes, we strive for perfection, but for perfection, it's not going to be achieved. But if you, if you don't strive for perfection, you're not going to reach the maximum limits of as close as you can get there. But so the point being is, is having a plan in place to help them navigate and say, hey, I can't tell you the people that have stated that, hey, I'm sleeping a little bit better at night because they've asked me every question they could possibly think of. Some I don't have the answers to. Some we have to go do some research.

But I'm like, here's how we will deal with these events if they take place. And these are the shifts that seem to be the most appropriate this time, but here's how we'll know how to further clarify that focus. If we have to adapt a little bit more and that gives me peace knowing that I can do everything that I can do for those that we have the opportunity to serve, to get them through whatever the future unholds because we're truly in uncharted territory you know from evaluations perspective the market the global stage you know we've been here before it passed in history but for this generation right now we're in uncharted territory indeed we are but people feel it i feel it you feel it um you

know one of the more popular pieces a while back was just asking the simple question, have you been waking up at 3.30 in the morning? And all these people are like, yes, I have been, you know. And it's just something's waking us up, you know. So getting the sense that there's something out there stalking the land and all that. So let's hope it doesn't come to pass, but, you know, we're going to have to have to be as prepared as we can be i think and that's been my work in the world paul i'm just i'm just here here's some data do with it what you will you know but i'm just stunned at how rare that is yeah the more there should be more people caring about what, what, what's, can you really see what's there before us, you know?

Right. Right. And yeah, so we're going to, we're just, we're sleepwalking straight into an energy crisis in this country is going to be magnificent when we get there. A financial crisis, a monetary crisis, both will be magnificent when we get there. And probably an overall crisis of, of leadership that we're going to have to confront here sooner than later. A lot of things to navigate, that's for sure. Absolutely. All right, well, thanks so much for your time today.

Again, if you want to talk to Paul and his amazing team, go to peakfinancialinvesting.com, fill out a simple form, and somebody will get back to you post-haste. So thanks again, Paul. My honor, Chris. Good to see you again. Thanks for everything that you do for our country and those that are listening to you, and we'll find you in the future. Well, thank you, and have a great weekend. You too. Hello, Chris Martinson. I'm the CEO of Peak Prosperity and also Peak Financial Investing.

And after watching that, you're probably wondering, well, what do I do with my money? Look, you both deserve and need somebody who can talk to you about what's really going on in this world, understand the situation as it is, not be steering you towards certain things that don't make sense for you or just keep you in a game that's already ended. Look, if you want to talk to somebody about the petrodollar declining or what is happening with gold or which sectors are actually the best ones to be and given what the federal reserve is up to or the federal government you deserve to talk to somebody who can answer those and has a few gray hairs and has been there through some of the economic cycles because hey we're in another economic cycle so it's good to have that experience fortunately

at peak financial investing what we do is we go out and we scour and we look for the very best firms out there who satisfy one thing above all else. They've got great experience coupled to great customer service. So if you want to come by peakfinancialinvesting.com, there's a very simple form you can fill out. Just a few fields. You hit send. What happens is an email gets triggered out. It goes to an endorsed firm of ours. You will get an email back. You can then set up a phone call for a 30 to 45 minute free, no obligation, no pressure call to find out if this firm is a good

fit for you and to find out if you're a good fit for the firm. It has to go both ways. And if all that matches up, this will be one of the best things that could happen to you this year. So please come by peakfinancialinvesting.com. Very simple process. We would love to help you if we can. Thanks very much.