Speculation Run Amok: Complacency, Then Crisis
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Well, hello everyone, to walk up to this edition of finance university, i'm your host, Chris Martin, and today i'm back with paul ker of kiker wealth management. Hey paul, a happy things giving week. Well, lets I can't wait to get into this with you today.

Me, either. You, thanks to even wait to you and all the listeners out there. I just pray god's blessing over the fellowship with family this week that I love, get together for thanksgiving.

Me too, me too. A kind of darker circumstances, you know, across the world right now. A couple of things I want to talk about today.

One is A A big, big move that looks like europe's gas is gonna lot more expensive. That has some big locations for industry over there. Obviously, germany already suffering a lot under uh, it's um well, we'll talk about all of that. Just get into the details. But then second as well, we see that Janet yelland is stepping down. I'd like to talk about the mess I think she's left behind and then wow, I have never seen this level of retail bullishness and stocks and I want to talk with you about what that maybe means because sometimes that means a rug pull is about the calm self. That all sounds okay for today.

That sounds great to me.

That's a lot himself to cover IT. IT is. So let's start with the europe situation i've been tracking. There's all these escalations and I think americans and maybe westerns in general, very much a undernourished by the media in terms of really explaining what's going on, what the potential risks are.

You know, i'm trying to imagine back in the sixties, walter concrete, certainly we would be hearing about a major world leader like putin changing the nuclear posture in doing stuff that would at least be talked about. And it's not really being talked about all that much, but it's LED to this now gas promise, the giant gas industry in russia that takes the stuff that's west of the euro and put IT in pipelines and delivers IT to europe. Europe's been a huge, huge a market. In fact, I was really the only market for this gas that's coming out of here. And now IT looks like they're talking about in twenty twenty five no more transit of gas to ukraine that's gna take out another audino ten eleven percent of european and gas.

This is a big deal that's a is is is inelastic is the supply um and demand equation is for oil and gas that's incredible.

Yeah look at this. I mean, this is from a as a hoi. The great stuff here are on the energy side.

I go to him on twitter all the time, figure this stuff out, so he posting here. Well, let's really look at where e use natural gas comes from. This is important because germany is the economic heart of europe and IT is an industrial beating heart.

And of course, this is a global economy. So if IT costs you ten, fifteen, twenty percent more to produce your stuff than your competitors because they have cheaper access to energy, well, those industries are just not competitive. Um they and their out.

And so we've been seeing this already is is a big problem. And here we see russia. This is the part that would be at risk are about ten point nine percent on this. This is as of october twenty twenty four.

And then there's this russian L N G, which also maybe this gets at risk, but there's some russian gas that's kind of hidden in here too um I think up in this purple section because they they put smell in g and tankers. Paul IT goes to another country and then toa gets reflected and goes to europe. Um so that's how they get around some of these sanctions, I think but this is I know doesn't sound like a lot of the world will do.

Just find something to do with there ten point nine percent. It's not coming through gas from now. It's actually ough that easy. These are huge volumes, big giant contracts.

It's hard to figure out how to replace all that and fascinating ly the ease your sula than they're lying with how I call he said, oh, this itll be good. This is actually going to make our gas cheaper. Puzzled Marks coming out of everybody's had.

Who listens to that? Who knows? The energy markets. I don't understand how that statement can even be said, but doesn't matter. That's how politicians go. I think this could be trouble for the teetering, tottering ing remnants of industry over there.

So basic economics supplied the man rules everything. So if you have a consistent demand with a reduction in supply, Prices go up. So Chris, where are they are gone to replace that from? Because because they've been destroyed nuclear power in europe corry um they're completely against the development of any fossil fuels whatsoever. And an election electrical um replacement is not there from a technological standpoint yet. So where they they gona replace the supply.

They don't really have a lot of options at this point. So so just this past week, germany had uh well the europe had a big giant problem because the IT was kind of cloudy in calm so their wind and solar just wasn't uh, fit for purpose at that point. And so IT turned out november europe gna have the fastest natural gas draws since it's been measured.

And so this is the biggest down withdrawal from the natural gas storage. And just because I was just that, I was just a little IT was just a little calm in cloudy. So so they're already at a place poll right now where um let me see here you can see here this is the actual gas storage levels in White and this is the five year average.

So it's there's below the five year average um and it's not a crisis, but they're definitely withdrawing IT at a super fast pace. Um and now they're gone to have to replace IT from some other area. And by the way, before somebody says, great, the us.

Will sell a lot of L N G. Let me see here. So this is starting in one thousand nine hundred seventies.

You can see this is the united states here started as fracking started, a lot of drive I gas production coming up here through this whole period. This huge explosion with that permit drill out that happened here. But what's important note is that um this is already all spoken for.

There's not like we don't have extra natural gas sort of kicking around like hundred percent of that in a lot of that going to L N G O, which is fine. But the question is could we get ten percent more? And I would just point out that IT really hasn't gone up at all in the past year or so.

And the Price is not constructive right now to get a lot more out of the ground because, well, it's kind of too cheap here in the U. S. So I don't know that the U.

S. Is going to be a good source going forward. Maybe um there's a chance here that we're gonna actually a stagnant U S. Dry gas production for a while just because of Prices.

So I don't know who europe's planning on getting all that gas from, but for Ursula to say all this will be good. This will make gas cheaper. Supply and demand.

So you had a chart. Did you flip through their german industrial production? So what's the hope? Let's just destroy the economy to the point the demand is reduced for the supply that's coming in. Is that what 这个 this this .

is a terrifying chart。 This is this, I mean, from an economics standpoint, I mean, this this is just a steady erosion. This is the big down and only go up a little bit.

This is covered. But you can see the trend was already in play, and this just kept the trend going and it's actually been accelerating a little bit of late. And this is industrial production also services, paul. Uh, germany is in contraction right now. It's in services and industrial production both.

So all signs of a recession. And you can see there around one hundred what that was at the peak. And o seven and I stayed around one hundred thousand, is ninety five to one hundred from fourteen all the way out.

yes. So so industrial production is the lowest that it's span sense what the recession that we were coming out of. And no three because that starts and no four in the shut down. And twenty and twenty.

yes. So it's basically excluding the generations. It's basically back to where I was in two thousand and six, yes, and falling. And it's onta fall faster with any diminishment of energy because energy is the economy.

You know, I talk about this a lot, right? It's not just l kay, the Price, how much expensive, that's the economic side of IT. But basically, if you want to track how much industrial production and economy has, you can just look at the chart of how much energy is consuming.

And so Price tends to make you consume less of IT, so that just we focus on the Price a lot. And maybe the german industries and competitive, but is very simple. How many australian bt s of energy are you produced, are consuming, and that stuff goes into things, right? Gets turned into aluminum engine blocks and borrow silicate class tube and whatever.

So yeah, this is a the the energy policies, in particular, the Green energy policies have been a complete disaster for this. And they have tons of data for IT. And they can't seem to get their minds around that politically yet in germany, they still have leaders who are all about, well, you know, we have to have, you know, more Green energy hacks.

Oh, wait, let me let me pull this up to because this has happened. Now in on top of that, these are job losses this year. And to this, this is an older list.

We have to now include eleven thousand jobs lost a vice crop, which is a steel manufacturer. So and they said they're not going to be bringing those jobs back to at least twenty thirty. And I watched a german finance minister, paul, get on T.

V, and say these words. He said, well, but that's because we're producing Green steel, which is more expensive. So eventually the world will come around and they will want our Green steel. You know that the that's the idea that doesn't make .

sense to me at all. So intellectual, but completely voided of any wisdom and common sense at all.

Yeah no, what's gonna en if you're gona lose your steel industries and then by the time the world may want Green steel at some point, which I think we could debate ah, is not a actually a viable concept. But assuming even you ve got to that point, paul, then um you're not going to have a steel industry there. Won't the people there who know how to do that because you will have lost IT all in the meantime.

and further production and further economic powers is going to shift from the was to the bricks and in east because there there's gono na be avoided in and the demand is out there and somebody's going to step in to fill that. So it's just getting the industrial base of those countries and forever weakening the country.

Well, this speaks to the paul, to the idea of the power of a bad idea. Ah they are committing economic suicide right now, gleevec right there. People actively know not what they do, but the damages real.

When these industries leave paul, they don't come back. You know, he was very instructive of me when I was Young man and I I did a lot to drive around. I like my road trips.

We would go to climbing areas. And one of the things that we did was we would drive through parts of pensylvania to get down to the new river gorge in west Virginia. Beautiful, beautiful club.

But when you drive through a place like scratched pennsylvania or or an old coal town in west Virginia, when that economic engine left, like hundred and fifty years later, that is still a destroyed town by or an old mild town in masaccio's, right? Some of them are revitalizing a little bit now. But basically the point is that when when that main beating heart leaves, it's it's a many, many decade recovery process .

and as easy as is to transport around the world at this point, as small as the world's becoming. You know, those job may not ever come back. IT reminds me when we were in ireland back in August, you've got all of these old castles that are standing everywhere.

They're not functional living in and I know this is a completely different um the economics and society change. But all I can think of is when you drive all over the country and the places that have been in that used to be major manufacturing bases, you got these these old monem kers, like the infrastructure that used to be the monem kers for the U. S.

That have been shift somewhere else. And we've ve transition so far into a retail economy. But from a long term standpoint, you have to produce more than you consume. So they are put themselves in a position where somebody else is going to be doing the production, they're gonna have to be doing the consumption and they are gonna at the mercy of someone else. And and then they're draining their economic power instead of building .

the economic power. Well, IT is IT isn't. It's just economics is very simple. It's very simple.

Whether you are household, a person, an individual, a company, a town, either you have more inputs and outputs or you have more outputs than inputs, right? You're either earning more than you're spending or you're spending more than you're earning. One of those things is Charles dickon said, is happiness.

The other is misery. And it's really not that hard. So this idea that you can just become a consumptive economy and perpetually consume more than you produce, it's just a fiction.

IT breaks eventually. That's what the united states has been doing for a long time. Our trade deficit poll, if IT was a country, would be the nineteenth largest economy in the world. Like eight, nine hundred billion dollars a year of just it's unbelievable, you know and we just like, oh, well, we'll just do that forever. Well.

I think the cycles are longer at the government level, but most people that have been in the finance business really understands. And we can all see IT in family histories. If we talk wealth rarely last more than three generations.

IT just typically does. Its highly unusual, goes beyond that third generation. And what I have seen typically is you've got the original founder of the wealth.

They were humble. They started out working hard. They out work their peers. There was a little bit luck involved, but they saved more than they spent. Because IT was the the chAllenge of the money, was a bad product of the excEllence of what they do. okay.

So then typically you've got the kid of that generation that learns the work, but like, you know, that could afford dad, mom could have afforded to do more for me, and they did. And so I want to do Better for my kids. And then ultimately, by that third or fourth generation, you get kids that are so spoiled and they have such nice things without having to work.

Now it's their expectation of having that. So we've learned how to spin. They've learned how to consume, but they learn to learn how to produce. And and it's really rare like, I mean, I have seen third generations just of, well, absolutely blow through everything because of the complacency and the lack of the ability and work ethic and the character to save.

And and you they get the perception of who they are by the things they have, not the things they produce are the impact they make in society. So you look at governments and I think is is I don't know what that cycle would be. No thousand hell talks about the fourth earning. I think that's really where IT comes about is um I think those cycles are longer, but it's the same cycle that, that goes through on a smaller level that we can all relate to with family stories. Just everybody out there knows some somebody who inherited a massive of a mano oil and then just foolishly excuse my language, pissed at all away .

yeah so paul, I want to turn to something very quick, which is, you know, we see these losses here in jobs. And obviously, we've seen the data, the german economy contracting its beating heart is being ripped out right now in terms of its its energy intensive industries. Job losses are a very rare thing.

I mean, here in the united states, like oh yeah, thousands of people lose their jobs. But but it's a different thing in germany that got a very expensive sort of a regulatory cultural cost to IT. And despite all of that, this is the german stock market from the lows and late october, early november of two thousand twenty three, and it's just done nothing but gone up the whole way across.

I do want to talk about um how I think were at risk right now, for this just does not make any sense to me. I don't I for the life of me, this is one of these moments. Paw, i've been i've to head several.

I'm old enough with the grey hair. I saw two thousand. I saw two thousand and seven. I feel like i'm in one of these widely e coyote moments from like what is this market thinking, right? Given that backdrop of the things we have just talked about.

And and so um for everybody listening, if you are all concerned about this, you rally probably to talk with paulin, his team. So go to peak financial investing dot com, fill out a simple form and start the conversation because paul, you run something called a risk managed portfolio approach. Can you just take people through that very quickly and why it's important .

in a time like this? yes. So so what what our industry is consumed by naas modern portfolio theory, and it's you basically have been forced into more profile of theory, and it's really easy.

You can have tons of clients play golf all the time with them, and and you just trust the markets, trust everybody else. The pass of investing and advisers end up being in relationship builders more than they do actually advisors, and then implementing the money management. So I started my career in the light seventeen nantes.

And and there were these wiser, you cynical advisers. They were like, this is not gonna well, but they were so frustrated because they're been warned in people for three or four years. Some of them, you know, didn't have tools to help them play the game by the rules that are forced upon them.

And then others had these tools. So simply what we do is we recognize both the fundamental, because history is a great educator and and it'll help this simple to foreseen danger and had themselves like proverb humid, help the wise first see danger while the simple passed on, or judge for IT. So you have first look at fundamental.

And what I can tell you, buffet indicator, all the indicators that are out there. This is the most of the major on a lot of the indicators and right at the most expensive markets that we've had throughout history. Only on power with one thousand, twenty nine, the year two thousand, two thousand and seven wasn't that expensive.

That was a little bit different issue, but I was still expensive market. And then twenty, twenty two before we had that twenty percent correction, and then this psychology took over. So what our job to do is, first, make sure you're on the rat rat path, okay? Do the things that you can do and control the things that you control.

That's why we do the planning with clients when we start. Then once we get the the appropriate portfolio to help those finds be the most successful. Now it's playing the game by the rules that are forced on us because you got one of two options you can be passive, which, which is what's taken over the industry, and that works really good when the market is undervalued or fairly value.

Because typically you don't have this major calamities when the markets under value because it's under value after these major clinias, right? But then you get in the situations where this market is ridiculously detached from reality. But there's moments behind IT and it's impossible to pick the top. You don't know how long that moment i'm gonna Carry.

Even IT wasn't Jessie live in more? Maybe IT was Jessie live more? I believe IT was the first came out, said the market can stay irrational longer than you can stay so that so he learned that by shorting the market, the market kept running in nineteen twenty nine.

But he was legendary trade or great book reminisces of the stock Operator, if you everyone to read IT um but that's our jobs. So there are times where we have the manager is because what are the consequences of failure? And here, here's the point.

I tell clients all the time, you've got to have a strategy to invest and you have to understand the strength and witnesses that strategy because you have to understand the consequences of failure. So so Chris, I don't think i've shared this analogy here. But let's say somebody offered me a million dollars played russian relet, and I spend that.

It's all statistics, right? So you spend that harbor analogy. But this this is really good teaching tool. You stick that to your head, you pull the trigger. Well, it's statistically possible that I could pull that trigger fifty times and make fifty million.

Now what do you think the the financial bubble media would do if I pulled that trigger fifty times and I was were fifty million? Now all of us, they'd won me to write a book. I figured out how a nap you play.

Russian ruler, you can make all this money too. But what good is playing in russian rule lead? If you accumulated million and you pull that trigger, somebody else gets to spend IT.

So what we have to do is help plants understand what are the consequences of failure and then implement strategies to keep that failure from wapping them out. Because here's the thing that i've saying, I saw people going into retirement the year two thousand. And the stock market, this one p five hundred is a represent of of the U.

S. market. Since ninety eight had average, I think IT was around, let's say, somewhere to sixteen and seventeen percent a year.

I know in the ninety nine, IT was nine percent a year. And I met a guy. It's like, yeah, my adviser told me I could live off ten percent of my income.

Well, the market went through ten percent of my asis. So the market went subways for the next fourteen years. The guy was out of money.

He was retired, had the up in his entire life. I saw the same thing happened in two thousand and seven and two thousand and eight. So so what what we implemented like, look, there was all kinds of individuals throughout history who had risk managed strategy in place. Now risk manager means is not a last witch, but let's I were in one hundred percent equity portfolio. If the markets really overvalued, then your stops in your eggs has to be real close.

And so what if you missed a little bit opportunity in the short run? Because missed opportunity is a lot easier to make up forward the most capital because if you lose fifty percent and this is a market where from a historic al evaluation, unless all of history doesn't matter, unless all of what what he has been taught in the finance education programs throughout history, that all has to be be completely untrue in a completely new era, right? What they say back in one thousand twenty nine, a new um it's a new planet.

Hi what you permanently .

hoi top yeah in nineteen ninety nine IT was the new economy stupid, right? You they were Michael N A war in buffer because he was participating in all the tech talks. Well, buffet happens to be on the largest politics he ever had right now.

He didn't stand the test time, but being in a idea, he's got a strategy. So we have a strategy in place is not perfect. It's not to pick the top. It's not going to pick the bottom, but it's designed to lower that risk.

So if you have a portfolio, if this isn't different this time, kay, may be two more years, may be two more, maybe at six more months, we don't know, but there are always warnings. There's always tremors under the surface of the market. There's always indication that risk is high.

And if you can take that risk, if it's appropriate from one hundred percent portfolio, maybe down to fifty equities and you get fifty and something that's that's safe and guarantee and protected or maybe your zero and percent exposure to equities, first and foremost, you're protecting that capital. And the first thing we want to do is we want to be investors. We don't want to be speculators.

And the only way that you're in a position to take advantage is if you have capital to reinvest once there's blood in the stress. So that's our hope. That's a long winded answer.

This philosophy behind what we do to help people stay the course. And more than anything, the worst thing you can do is sell if you're gonna a passive investor in the markets, down fifty percent. So every strategy urn has a strength and weakness, and you have to be prepared for IT.

Well, I going to talk about these risk is, is it's never different this time, right? Economics is simple. More in then is going going out, right? There has to be a stocks.

They get decoupled in people's t processes because they just put them out there as Prices, but they have to have a fundamental pinning at some point. So that's what we've tried to convince me, I think which is a sin, which is, oh, fundamentals don't matter anymore. What matters is the feds gona bail this out, or somehow stock Prices always go up and and they get you condition for that.

But let's talk about the actual risk again from span herrick northmen trader love following a stuff on twitter. Is that fed? Look how restrict of our policy is right? And you mention two dates, two thousand. There is a huge drawed down here. But this is looking at the value, total value.

How much? If you had to buy all the stocks, where are they worth in trillions? And then that the will share five thousand, right? That's that's the whole universe of all the stocks, pretty much and divided by GDP, right? So here we see that in two thousand they hit this on godless level of hundred and forty percent.

They were worth one hundred and forty percent of the total underlying GDP. But you can see the mean is actually crank in out down here, about eighty percent over time, over very, very long party time. Well then the fed guide and got real interventionism.

Ve us, our one percent blowout rate under berni brought us to our two thousand seven peak. We have this big drawed down. Now this is what you're talking about, is people sold out down here.

Some of them had to come out of retirement. They saw they are dreams really dented. We saw people suddenly realized they had to work for another decade that they hadn't planned on. These are real serious impacts. And then we got the great financial crisis in the fed freaked out.

And this is when they entered this whole policy, which I think we're going to look back on to say was one of the domus policies ever under branche, and then yelling, and now jpl, where they've cracked this up, where we've this unbelievable amount here, we have this little pulled back in in for twenty twenty, they really freak out. And now, or at two hundred percent, two hundred percent ratio of stocks to the economy that sits under them, there were twice as much as the economy itself. This is simple economics to me, paul.

This this just doesn't pencil out. This just doesn't make any sense unless something change that I don't get some fundamental something about economics has just been reinvented. They forgot to tell us what that is.

I don't believe so, Chris. I believe this is a super cycle is what IT is, not believe it's it's a super cycle of foolishness. So there's a scription in the bubble.

I can't I know description, but I can't remember the exact location. But is there is a way that seems bright to a man, and in the end, that leads today? Okay, so we have the two thousand crisis.

We have the two thousand eight crisis. Berankis absolutely terrified. Know he's supposed to be fed chairman Blanche, at the time, supposed be a expert on the great depression.

All they needed to do was print money and keep that from happening. So what did we do on another side? QE one QE to well Operation twist.

QE one QE to Q E three flood the money, the economy with money. And hopefully we papered this over. Well, what this is done is this is fuelled speculation.

So we've had all of these bubbles throughout history, the south sea bubble, the tool t bubble. They're all different. But the one thing is, human psychology goes with IT for all of the intellectual power we have, for all of the information we have at our fingertips.

Wisdom is still the most important thing, and we're still voided of that. So I remember the first time I read the bible in. In front, the back, you know, you had these cycles to wear.

The israel ites were, would seek god. They seek truth, that they would, they would love what was important. They would love truth and foundation and wisdom.

And then the wealth that came along after that and they would collapse. So this is cycles that we've seen through economies, through our history. And I believe this is a super cycle of the aliens.

And we have so much information that we're flooded with today. And and I believe the demolition ation of all this money printing, I believe that the asset inflation that has come to the holders of assets right now has locked out the economy. The Younger investors, the Younger parts of our our generations, those under the age of thirty five, you know, can afford houses.

The image of what they expect the economy to be is not relating down to them. So they either turn a speculation and they're been rewarded because of all this money printing, because it's rewarded speculation or they're turning into to demoralization, which is leading the drugs and suicide. So yeah, this is a distorted economy because of all of the solution is of what what our government leaders have done and what you know, I think I think amErica has awaken to that at this point, at least large majority.

But but I don't think that we've suffered the pain yet. But if we choose the rat path, that pain will be mitigated compared to what IT otherwise would be. So we're looking for the truth and we're looking for the wise path.

And we're taking each step with fear and trembling. We might stumble, but we won't absolutely collapse. But and that's what you're warn in people to do, and that's what we try to do to people, right? If if the market goes down sixty or seventy person and god forbid we had another great depression, everybody, he's going to be started by that. But those who are always and have a rist managed approach might stumble a little bit, you might lose a little bit, but you're not going to be White out because you're prepared for what's coming.

So so the speculation that i'm seeing ninety percent of the investors out there, ninety five percent of opinion are speculators and they don't even know IT, Chris, their speculators because they don't understand history of investing. They don't even know what fundamental mean because I had a conversation with with somebody who's been in the business long time and we had some Younger investors and money managers that were in there that started around two thousand twelve. And I was trying to warn, like, look at fundamental these matter.

They're like, look, i've been doing this for fourteen years and IT hasn't mattered so far. So why do you think it's gonna matter in the next ten or fifteen years? I mean, that's the attitude is out there and those are the ones that are run in the mutual funds now because if you if you have if you were managing money, two thousand and two thousand eight, quite Frankly, your handy cat. So so it's those speculators that are in there because they fully believe that because it's not experienced in their fourteen years of their career, that is not gonna happen in their life.

Well, that I mean, that's been true though, right? I mean, this is the whole fourteen years has just been nothing but a wall of central bank printing. And and to really put this in perspective, um this is U U.

S. Stocks compared to the rest of the world. Let me move the service so we can see all of that.

This is astonishing to me, right? This comes to be of a global research, U. S.

Versus global equities, right? Relative performance. I mean, this is, this is the the boundary level.

Here is something really happened here. again. This is back to the great funny cal crisis aid. The great unnertake crisis shouldn't happen in the first place, right?

Because that was IT happened because then bernanke e he did something monumentally foolish, which was he thought he could jammed the rate of interest way below what the market needed for. Remember this, I mean, i'm old and after to remember this yield seeking behavior, right? People didn't know what to do with their money because you're getting zero percent on your savings.

And you know, you needed, you had, I don't know, your a pension fund, you at a seventy five, your horizon. And for ducal responsiblities E S. Your retirement, you needed yield.

But there was zero because ben said, in his infinite wisdom, has zero sound. That's terrible, right? Remember, in two thousand nineteen right here, at this moment right here, we had nineteen trillion dollars of negative yielding sovereign debt in the world.

What even though, is that right? What was that? Well, that was a massive experiment IT LED to this huge explosion right here. And now this is where we're at and everybody's just sort of hugged and said, well, that, I guess.

is how the world works.

Now I don't think that's how the world works now. It's just if you don't look at this chart and realized, you know maybe I want to like me control in my risk a little um well.

I pay attention. What I see in that chart is well, crease is that us stocks versus the rest of the world. So that's what's bizarre about the environment that we're in.

When you take us stocks and the most restaurant stocks, they're ridiculously over press that shows that there. So the heard around the world has said there's no alternative. We get to chase the us.

They're chasing the popular things, right, everybody to those those fans. So yet there's tons of danger for in the places that are detached from historical reality. But that also means there's incredible opportunities in other areas.

And there's going to come a time when you're ridiculously rewarded for, for participating. There's so I don't think the system is going to end. I think this is a cycle that we've been going through and there's going to be extreme pain on the other side.

And there's going to be generations of individuals that are gone to change their behavior. Um a generation will change their behavior following the one that suffers the pain of this speculation that our whole job is to get people through this to discover the wise paths. Quite Frankly, we all know looking back at our lives and other people's lives, the pathless traveled is the one that leads to the greatest reward.

And it's lonely past. Sometimes there is a time to be with the heart, and there's a time to be at the edge of the herd, ready to dark in another path. And this is what those periods where you ve got to stay close to the exit, because when this thing does come apart is going to be painful, but at the same time, to have some rules that can have you play the game, have a strange, allows you to play the game by the rules that are forced.

Pony on that was manner also keep you from making a big mistake because we ve said, you know just think of the pain this is what i'm seeing and take place right now. Cis, there are people who who are wise enough to understand we were detached from reality in two thousand fifteen sixteen. It's like, well, we can cross any other boundaries.

So there's sit in defensive and here we are nine years later and and that pain of of missing opportunity is where and really hard on people. And I think with this, especially a lot of those that have thought deeply about things and they try to love the truth or so you for a that trump is one in a clear and populous vote, even the people that voted against him. We're excited about what he's potentially trying to pull off.

But now that hope in the interim period is pulling people off the sidelines in their light, hey, you know, he's going to kick this can down the road a lot longer. I believe, I believe that if he can implement these things, there's gonna tons of hope. But I don't know that the markets are going to be as strong as what most people expect because right now, everybody's pretty much all in, I mean, IT, it's so many people off the sidelines. The boat is killed.

It's more than that. I mean, you have the appropriate number of grey hair. I mean, we've seen this before. So I have you mentioned rules. I have a rule. IT comes from watching wolf of wall street and there's this famous lunch scene between Matthew economy and lean arted carrio right and Matthews um trying to explain how wall street actually works, right? These drink and Martinis doing coke, you know and all of that stuff and he said, hey, the whole job here is we keep them fully invested.

We go home with cash in our pockets at the end of every day, right? So there's a game right in the game s of wall street is to separate the retail people from their cash if the retail portfolios go up or go down, this kind of incidental to their game, they don't care. What they care about is that they win.

Retailers is funding that winning, right? And again, it's incidental if both happened to win at the same time, we call that bullish rising market. So I have a rule, paul, which is that the rug poles can't happen until they've pulled in every last room dollar.

They can. I don't want to speak ill of our listeners. I'm not meaning to, but retail is always there. The Marks in the story.

What do they say if you're at the table thirty minutes into IT a card game and you don't know who the soccer is, you know, right? So we have to be aware of this is a dynamic. So i've watched this happen over over again, right? Rog, polls happen at the time of maximum engagement by retail.

right?

So here we see this is from Michael guide twitter. And if he's the lead lag report in percent of americans who think stock Prices will move higher is now at an all time record, not even close. Right here was the old four all time record in two thousand eighteen.

But you can see here that lots and lots of bullishness. And this is astonishing to me, small speculators index positioning. This is in this, uh, S M P. Five hundred, the S P X. Where is the ninety nine point seven five percent tile? Like it's people have never been this bullish, but it's is their complacency but it's also the habituation which is, hey, ninety nine point seven five percent of people, including me on some level are like, well, the friends probably just going to bail this arkansas what they've been doing but this is the quintin tile set up for a rug pull.

That sure is.

isn't that? I mean, I misread that. How do you how do you read that?

No, I see that is perfect set up, but I think we're in a situation right now where wall street finally has the opportunity with we retail euphoria to offload their shares because if you're managing billions of dollars, you can't move. If you're managing five, six hundred billion list, you get one hundred billion in a position. You can't get out of that easier supply.

The man, if you flood. markets. So that's one of the things will see from time to time is stocks.

I'll hit a certain prize. And you can see that typically institutional investors all floating will sometimes it'll break through. And that's kind of one of the best things for an institutional best.

Or if IT break through and you're look and where the economy is going to be two, three years now, where retails look and where it's gonna three, six months for now. So this is a perfect environment to offload shares. I don't have the chart in front of me um but corporate insiders are are selling stock at one of the hash rates that we've seen.

They're not buying as much as they have in the past. Buffets got one of the the largest cash power that he's had and sometimes the professionals are concerned and retail is absolutely eufor ic. And you can buy me on Chris because the thing that makes the investing so hard, okay, is it's always a money morning quarterback.

It's always looking in the area where and going had i'd done this, okay, because it's always staring you in the face of the decision you could have made. But the problem is you can make the right decisions and not get the right outcome in the short term. So people tend to think that the outcome determines whether you made a wise decision or not.

That's not true by making the the wise decisions over the long term, you will end up in the right path. But we're in an environment where the faded has set up a position in the background to where they've rewarded speculation. And I believe, Chris, quite Frankly, I mean, I can't prove this.

There's enough circumstances, evidence, but I believe that as they implemented their money printing programs, that information went out to the to those that are closed, those big banks and the so that so that there was a big impact. So they've been telling the ones that are closely connected to him, here's what's gonna happen still kind of a step back and watch and watch like none. This makes sense, professional.

But those not have not sold their sold to be close to the the money printing Prices, his step bags said. This doesn't make sense and it's just continued to suck people in and set people in and set people in. And now you've just got this retail euphoria, who knows? Like IT may last for another six to twelve miles. But when this does in, it's going to be ridiculously painful for those who have been speculators and had no clue they were speculating.

Yeah, that's why i'm starting my t lac. Fund that's trade like a criminal. just. You not what should happen, but what will happen because you know they're going to bail.

But but they do these rug polls and people on our and out here and my you know out here on the retail side, I experienced the very painful they disrupt lives. They uh steal people sent to the future. Often their savings go poof.

So they're bad, but not from the insiders perspective. They end up with larger shares of companies. They pick things up for pennies on the dollar.

They preposition and got themselves ready. They actually get rich during downturns. Um so that's been the game for a long time. And I know that, that this is part of the condition we have to break through on the retail side on the C N B C M S N B C IT is just a world the world lunch scene with Matthew mcnealy to keep you fully invested, right? That's you know and and but what what you do is from the risk manage points.

There are times when you step aside, there's times when you you know dance fully and you don't try and catch the absolute tops and bottoms, but you you have a discipline, right? Like over your head says, invested your plan, right? Yes, not your emotions, right? So you're going to have a plan. I think I think those charts we just looked at, so you need to plan and people really should.

You should. And i'll take you quite. Frank was having a conversation with client of the day, had had one stop come in last year under the rules of our strategy. And I don't want to say names, anything like that. Then I got to do all these disclosure, but we had one come in, and I literally, I was like, guys, this is gonna an absolute dog, but know and we had the discussion on the investment and and a joke.

And I get up, open the doors on my comfort train and I said, i'm going on the backwater of pukes go by anyway, in my point being, is there things that come through the strategy, both to buy and both to sell, that make me sick to my stomach from time to time? Because i'm like, this isn't onna pan out, but you have the rules of the strategy to an increase your probability of success. You filter down to things that clear your hurdles and then you purchase them and and the larger majority work out, but not everyone is going to.

And then there's times where you lower that risk, but you ve got the have a plan and you've got to have a strategy. And if you don't, you're left to your emotions. And and one thing we learned about the media, or one thing that I believe is clear as day, is the pharmaceutical companies have spent so much time in the media that they they have an unusual level of control over them.

The same thing has happened in in from C M, B C, in the financial media, M S N B C, all of those. There's so much money that's directed in that direction by wry. And I also believe that there are so detective, reality is like the hunger games. You have the capital where everything's great, and then ninety percent of the rest of the population really understands reality. And and the problem is, as most of your investors haven't been taught fundamental and strategies, theyve been sold bag of goods, to trust me, passive investors.

Gray, set IT on the shelf and forget that there is a time to set IT on the shelf and forget IT if you have money and you buy nineteen thirty one, thousand thousand thirty two, after the markets down eighty, eighty percent, eighty percent seven, no shelf. And forget about IT. If is that seven, four after the market is recorded. Ted, you know that big decline that happened in seventy four because of the inferable burst that haven't seat on the shelf, and forget about IT, this is not a time to be complacent.

It's the time to play the game by the rules that are forced upon you, but have a strategy that will help you lower that rios can understand you're not perfections not gonna happen is not we can strap for IT, but it's just not gone to occur if we're not striving for perfection, if we're not reaching for the stars in our lives, we're never gone to reach our full potential. So you strive for IT, but you understand i'm more reach for that star, but I may not necessarily get IT. I'm more strive for perfection in the portfolio, but i'm not going to get IT. But i'm going to do my best to be prudent and i'm going to stand the test a time instead of you know whistling dixi through a dark cram and get hit the mouth with a baseball back. And I believe that's what's coming for a lot of investors, especially with all the europe that's out there run.

Now I agree that you mention something near dear to my heart, which is that one thousand nine hundred seventy four inflationary. Can we talk about this for second? Um so this is tracking two things.

This is the C P. I of currently and this is one thousand hundred and seventy four and thousand nine hundred eighty two. So so here we have this is one nine hundred and seventy four coming along and inflation and then IT burst up here into seventy four, right? yeah. And then and then IT falls down and then IT burst back up again, right? And here we seem to be tracking this almost perfectly and it's just turned up a tiny bit again.

Who knows what's actually going na happen? Um you know Michael, a leave of this here is saying, well, know that sort of depends how you how you how you scale these things but there is a chance we could get another inflationary first here right because you know um the way i'm looking at this right now, paw, is that um I think we've been set up. I'm a huge non fan of Janet yelling .

or me too.

He has done some things that that I just I see her as as having reasoned well beyond her capabilities. I've never been impressed with a single press conference she's given. I've listened to her reasoning.

I've read her papers. I'm just left very underwhelmed um and he just seems like a political hack to me and he does what's expedient and convenient in that moment. So she's stepping down IT turns out now ash cyp to is suggested that maybe something big will get exposed, who knows? But here's what he did in treasury.

I don't like what he did this fed. But in treasury SHE short term, us SHE put us on this short cycle, right? Pushing out stuff under the short into the curve, meaning that were, you know, the U.

S. Government is funding itself with short paper, four week bills, eight week bills, seventeen week bills. And so I just went just, you know, she's stepping down.

This is what the incoming administrations going to have to deal with. This is the auction schedule just for this week. All this is for the twenty six right announcement date. It's going to auction out on the twenty seventh, which is today, as you can see from my little thing today, seventeen, four week, eight week, bills, sixty four billion, ninety five billion, ninety billion. I remember when those were numbers called that you would see for the whole month, right?

Five, two.

And now we're now we're just roll in these out week after week after week. There's going to be another auction next week, and we'll be another auction the week after that and the week after. So so this this is this is just so enormous funding that has to happen now. And that's courtesy of Janet yelland pushing IT out to us here on the short end of the curve like whoever is gonna manage this has got their hands full. Um and I guess that person has been announced and know if they've been confirmed, but he's a head run guy and I hopefully understands his market really well because going to have their hands ful.

I sure hope so because the most the most criminal thing that I believe the the treasury did, would you mention negative interest ate several years back, okay. Is a fiduciary of our national fans. Why would you have not issued all of the thirty day?

Yeah pencil all .

push IT through, put IT out for a hundred years and fix that, right? Like everybody out there right now, I ve got to two and a half percent more is the thing they want to do is sell that to go to a five and a hor. Well, six, I have seven and a half percent mortgage.

They how good a position that they're in. Why wasn't that done on on a national level with our national debt? Now i've got a White paper on my test is on to do this to be have been put them off.

But there's something to do with shorter issuance of that in the liquidity that IT brings into the economy. So did we really play these short term games just to duce the markets, which we've been talking about for the past nine? My concern was they going run the economy hot into the election.

And there maybe all this, you fall into the into the year, maybe spring of next year and then reality sets in with that that hang over um that occurs on the other data. So i'm glad she's gone. I've never been very impressed with her in my 消费 的。

Well, there there's an unsustainably to all this to paul. This is this is total federal public debt. This is an old chart now because it's actually at thirty six trillion that says thirty four.

So just mentally, you know, take this red line to the top up here, you can see the shape of that is just going off like that. But of course, given the environment or in you on muss just reposted this. This is from on paul, and he's writing to my friends at the department of government, efficiency dogs.

Don't forget about the big one. Look at this. This is, this is interest payments right now. This could open up a very big kind worms. obviously.

The first question you might ask is, you know, these interest payments back here? Pop, I would call that the cost of having a system manage your money for you, right? The treasury said in its know U.

S. Governments, infinite wisdom, who can do where to create this thing called the fell reserve. It's a private cartel.

But you know what? Somebody who's got to manager the money will put that off in their hands. And it's a very complicated thing to do.

And so we're they are doing that. This was the cost. Well, the cost of having our money managed by a third party is now exploding.

These are direct interest payments to go out. That is the cost because, you know, what could happen is the treasury could just issue money directly. IT doesn't have to borrow IT into existence. So this is gna actually open this this conversation up now. And it's been interesting because you've seen, like trump is said, some things I didn't know you can say like maybe we should eliminate the income tax and people are like.

OK, let's talk about that, right? Like this is actually an open conversation that could be having, which is why is our country borrowing money into existence from itself in order to be able to have to pay interest on that to third parties, many of them foreign entities, many of them well connected insider banks, many of them receiving money, they're got printed out of thin air to buy the same stuff they just had to auction off. This could break at some point.

They could. And you know, what concerns me is what the long sharks do, what the what to a title pom places do, what the pay day loan places do, what the credit cards do when they get people on a lot of trouble, this, hey, here's a easy credit, then your interests are going to get really high. And then someone strap for the rest of their life with this, with this burdens of debt, is so eliminate opportunity.

And when I taught the kids in high school this, what I talk him about, when I volunteered my time to go and taught the finance cost, is like, you need to understand just how how debt can be used to produce business. It's one thing. You're using that to generate income is another thing.

If you've got dead for a toy, right, you know, reserve your capacity to borrow money to buy business, they can pay that dead off quick. We're not doing that with our country. This isn't productive. That this isn't something that's going to be generate a dramatic revenue is like Operating like a credit card that's going to settle our the rest of our life.

And people just don't realize that until the burden is so high that now they're strapped and you want to teach to Youngers, if you you'll make sacrifices when you're in your twenties and you're in your thirties and you will keep your debt low and you will you'll invest into business is only by the time and you're in your mid thirties, you're gonna surpass all of those people that are living a higher last style. And you there and in the us, seems like our governments more interested in making people look attractive than standing the test of time. And I think you reached that point to where, where, when, when those gets in there and elon musk be, but from the swami get in there and they do what needs to be done.

There's going to be some impact somewhere in the econo. You can't pull this much money out and get back to what's important without having some type of pain. But there's good pain and there's bad pain.

Well, in this is, I think people need to understand this too, which is, let me just connect that circle of what you just said. So a trillion dollars of interest payments go out. Federal government has to pay us right in a year.

So that's a trillion dollars, paul. So that where does that go? Let's imagine IT goes to one of the big money centre banks, right? Because they have a big bond portfolio, all their clients.

So here's a trillion dollars. Here you go. What do they do with IT? I'll tell you exactly what they do with that.

They round trip IT back into the next auction over here. This next option over here creates another big pile of death that has to pay higher interest. Okay, okay, well, then that higher interest payment goes out.

So this becomes where that this has that run away free train field to IT, which is the higher the interest cost go up, the more that money gets round trip back into the government, which has to borrow more because IT has higher interest costs, the higher those go up, the more they have to around trip IT. This is the one two shuffle. This is what's been keeping the market super well liquified.

This is why everything goes up into the right. This is a money machine. It's not quantity easing.

It's the patton's been passed over to the treasury. When they can do this anymore, the feed will go back to quantitative easing. But this has been the one two shuffle.

And none of IT makes us Better as a country. None of this is going into necessarily productive stuff. If it's being productively invested, it's kind of an accident.

It's a by product. It's coincidental. But that I just want people to be aware that is the one to shuffle more gets auctions makes a higher interest payment. Higher interest payment means there's more cash out there, a lot of which gets round, tripped back into the next auction, which makes the interest cost go up. And that's the one to shuffle we've been we've been experiencing for a while.

Well, what i'm concerned about is the baton thought. This is the thoughts that came in to a man passing the baton has changed that just a little bit. Chris, it's a hopital that keeps getting hotter.

So the fair had that hop potato to the treasury, the done what they can do with IT. And who knows how much longer that can let us. Well, guess is who's gona catch that that up to this turning into a little love ball at this point, who's after the treasury of katchit, except for the U.

S. Taxpayer and in the citizens of our country. And then that's going to be a branding pain that we're gona receive if this administration is not able to, to pull that off correctly. Hey, let's put this a trillion dollars. I still have a hard time understanding what .

a true email right .

to the number you can express IT in years. Well, this, please say this. And I want to show, show the math here.

One trillion divided by four hundred and fifty thousand and you, to be quite honest, I struggle doing a trillion dollars on the calculator to a google starts work good. That's two million, two hundred and twenty two thousand, two hundred and twenty two, four hundred and fifty thousand a dollar houses. That's right, right. Two million, one trillion.

about about four hundred, two point two million houses. If we want to build four hundred fifty thousand houses, two point two million.

two twenty million a year, well, on a trillion dollars entries. So think about the opportunity. If we didn't have that dead, then we could be.

And i'm not saying the government needs we built in people houses. okay. That's not my point. I'm just trying to put in perspectives so that people can understand exactly how much a trillion dollars is, how much would more affordable what housing be if we had that capital to revenue back into affordable housing, right? I mean, i'm not saying the government should be built in houses and given a boy, we need a free market economy, but that's just money that could be used in other places, more infrastructure, Better roads, so that our commutes to work or not as long as what they used to be more you there are so many things that that could be used instead of just paying interest because of of short term, short side of thinking.

Well, I kind of hope, and we're going to get to this prioritization. Last time we did talk about how if this department of government efficiency, like, let's imagine they cut two trillion and out of the federal budget, I mean, oh my god, and I think of paw fire and brimstone, this would be terrible. It's going to be awful.

But that just would get us back to where we were spending right before cover IT. So we had dish emergency spending that became permanent. Welcome to the swarm, right? This is just the world we live in.

And so the the unthinkable proposition is, can we just like that, all that fat we just throw there? Can we just how about we can do that, right? And then we're going to have to prioritize at some point.

We haven't had to have these priority discussions yet in this country in my entire ult life, which is like, do you want to bomb all these various foreign tries? Or would you like to have nice bridges and roads, right? We haven't traded off anything, and we're going to that point where I think we're going to have to do this straight, ffs.

right? Pick is just like Normal prioritization. Dc is lost. I don't think that has the muscle memory. I don't think that knows how to do those have those conversations.

I don't know that they know how to negotiate and and come to the best conclusion because in my my lifetime, pall spending bills went from this to two thousand eight hundred pageant straight with earmark ks and just junk. You know, every congressman has a little like someone something in there. It's just turned out to like all pork, you know, not real investment.

I think some of that, again, accidental, coincidentally, sometimes leads to good things. But for the most part, it's just stuff. You know, it's not thoughtful. It's not rated gic. It's not relevant.

Well, and I hate to say, Chris, but I believe as a country is the people we worship, money guy, because because the answers will throw money at IT and see if that will solve the problem. And and that has because that makes people look a little bit wealthier, Peter, but we reached the point to where it's Price out the average in individual.

And one of two things has to give, okay, either we have to have some deflation and right now, I don't think deflation is a horrible thing or we're gonna have salaries go up dramatically. And I can tell you in studying history, in those of you out there right now, inflation is a much worse evil than deflation because inflation is an equal opportunity punish er of individuals. And if we get, god forbid, hoper inflation that absolutely up in the lives of everyone, there is no way, without being predictive, sly, aggressive, that you can avoid the pain of pepper inflation.

But the proof and the wise can survive deflation. They can, they can turn that in the opportunity. So so either we're gonna have to have asset Prices come down some or salaries are going to have to go up dramatically or IT is going to be an environment twenty thirty to wear. About five percent of the people own everything and twenty five percent of the people have nothing.

Well, in that wealth gap is something that started under branch. I was accelerated under yellow, has been continued under jpl. So I think people need to understand that the felder's reserve is not here serving the interests of american people.

No, it's here doing what it's supposed to do. It's a private car. Tel IT serves the interest of its main clients, that clients tel has been getting wealthier and wealthier. But it's really this can tail in effect, which is which is they just happened to have been closest to the money speak IT when I got opened, and they are just leveraging the asset Prices and all of that, right?

So so to that, back to your point at the beginning of the show now the sort of like be comfortable you need five point seven million dollars of network, right? That's a big number and obviously that that doesn't apply to the vast percentage of the people. So so this is the other part of the story is that of by and for the people been several, obviously, and the federal reserve does not work in the interest of the american people in the press has never held their feet to the fire about that.

I mean, every single federals or press conference, all to start with the chart of the wealth gap. insane. Hey, j pal. Now, blue tark, even thousands of years ago, said the oldest and most fatal element of all republics is a gap between the rich and the poor. You all are architects of this gap where you headed with this.

And how do you see this turning out, right? And you're trying to vade and pretend it's not there problem and and point IT back over the fiscal policy. But IT IT belongs to the fed.

They print the money, they make sure the markets go up into the right. They reward speculators. The speculators get wealthier and wealthier and the gap gets ever wider.

That's on them. And I think they should have to answer for that. I really do because it's social engineering and its dangerous social engineering.

And I would like to know what the planets like like, uh, we think blue tark was wrong. Here is why we have a White paper. Can I see IT? I'm not know what the plan is and i'm suspecting they don't have one. But you know you would need a functioning press asking reasonable questions to get that kind .

of answer out of them. I don't have that. We just don't.

We have the use, the joe rogan, the individuals that are doing the the conversations like this long form conversation that are bringing the truth out. The media is not. They don't even, they don't love the truth enough. Now, gris, I think we talk about that before on the five point three million.

So for the listeners who was rap, before I picked up, before Christina, I started talking to your head, put on an article, americans need a five point three million dollar in net worth in the most recent survey. Haven't to play. The article found the survey to be considered financially successful. Okay, they go on look bit further to say in interviewing people that that an annual salary in excess of two hundred and seventy thousand is needed for a person to be considered successful in the united states on the november twenty second survey, in terms of network is five point three million.

Now to put this in perspective, that such a small percent of the population, because, according to the epoch times, atha pully reports, being anthropology, according to so security administration, in the national average wage last year with sixty six thousand and six hundred and twenty one dollars, while the average network for a family and twenty twenty two, and this is a family average wage for an individual with sixty six thousand, and the average network for a family and twenty twenty two was one million, sixty thousand I and because what used to be a four hundred and fifty thousand, our house is now selling for a million dollars. The large majority of that is, is there the the primary residents, and Chris is the problem and most people get IT. But I still have a hard time communicating this from time to time.

When we do the retirement plan analysis, I don't use your primary residence. Your primary residence is an asset that you have and you can go borrow against IT, but IT doesn't do anything but take money away from you. So if you're going in retirement and you might have a ten million dollar networks, but you've got none point five million in that house, well, you can afford that house because if you've only got five hundred thousand and it's not even cover the taxes that are there.

So that's an extreme example. But your house is an asset taker in retirement. IT doesn't generate income for you. So the bad part about that is, is that house be in the largest part of that net worth IT is not something that produces income for people in retirement. So those people who don't understand that are really typically up in.

And I can't tell you how many people i've made over the past six to seven years, ten years, years, really ten years, they'll come in and they're, hey, i've got a two million dollar networks, one to have million dollars down up in the house, and I won a retire. And then I have to show them you're going to have to working in other ten years. You're gonna have to sell that house and downsize because because it's consuming so much of your budget that you can afford to retire. So so I don't think that, that worth is income producing money.

Yeah, all those people who are confused about this, they need to read a book by my friend Robert key, a socket called rich dad, poor dad. And in there he articulates that assets put cash in your pocket. Liabilities take cash out of your pocket.

Everybody's primary residence is a liability. IT may have an asset value if you have equity. And that that's positive and you can catch that out and go do something with IT. But let's be clear about this. My house takes cash out of my pocket every month before .

and then when you IT is its liability.

let's be clear yeah then .

you have got the roof that were place is got to be repainted and that's another problem. And when i'm seeing a lot of people who aren't doing the math when they're buying rental properties, right, if if you're purchases in a property that your rent is not going to pay for in twenty to twenty five years, where you're thirty five to forty years, just off top of my head of pinning phone, the numbers before that things really gonna a free nuclear asset because you've got a service to det down and then you've got to repair the roof if you've got vacances that to to occur from time to time, increased taxes and insurance unless it's triple net lease. So we're distorted across the boards.

A lot of people are speculating on these properties that they are buying, thinking, hey, i've got a rental property. This is great. But what they don't understand is this can be thirty five or forty years before IT really becomes an income producing asset because things are so distorted.

So we're a period of time where a lack of teaching in our education system, and I believe that's another criminal thing that has occurred from k three, five. And even in our colleges, people aren't taught this unless you're in the world of finance. And sometimes people, even in the world of finance, aren't really taught that because what they're taught to do is sell products. And then all of the son, you've got this wave of easy money that has lifted all boats and the time come in and people think that they're fully closed and when that tide goes back out, there are going to be staying in there with those women trucks and and suffering the consequences that come along with that.

IT feels like we're in one of those cycle periods you talked about, right? People love truth. People wander away from that over time and is the same thing every time, right? Same dynamic which is um possibly the same thing.

Where is that saying from that book, which is that hard times create good men in good men, create easy times in easy times, create weak men in weak men. Great hard times. That's just sort of the cycle. So it's been easy for a long time, right? And I think we're all cognitions into the idea that the fed can't just print forever, right?

It's just you know we all know that on some cellular level like IT can be forever, but I guess I understand getting habituated into the idea that well, true, but I can't know when that's going to end. And right now it's good, right? And so that's that's we're red, but the season were in, if I had to guess, we're not in spring in this story.

We're in late fall, you know and you know that's just just like how many more times can we sort of pull the same rabbit out of our hat and and just pretend that that things don't matter? Well, I think you know time to be prudent, time to take a of uh manage the risk as as best as we can and to really understand what rapid but this is why what we do is so important. It's it's education is you have to you have to have the appropriate education on this in most people were not educated.

I'm not calling them um on intelligent and that's not not what i'm saying. They don't teach the stuff in schools. They don't teach you how money is created. They don't teach you what A P, R and the credit card is.

They don't really teach you that you know your total thirty year cost of a mortgage is actually gone to be twice the value of the house when you first bought IT. A lot of things like that. right.

But that fundamentally, I think the fundamentals are that you can't live beyond your means forever. Try at any level, you can get away with that for longer as a ation. But when the turn comes for whatever reason, uh, IT can be fast and IT can be pretty deep and will be those who are prepared for, I think they'll do relatively well, if not even succeeding. Ly well and a lot of people be caught by insider by and they will do relatively poorly, if not very badly.

Um and that's this .

as history that's history and and I .

want to listeners to know and you know this crisis we talk enough. I'm not a perma bear and you're not a perma bear. We're not you know this isn't about being embarrassed and trying to talk people be an expose.

This is about warning. The bottle tells us somewhere that my people die for a lack of knowledge. okay?

You can take that to an extreme, is just most people don't know, and most people are warning about the risks that are out there. This is about talking about the risk. This isn't about bearing the backyard.

I had a conversation with older sun last night. He's in construction. He's got a commercial builders licence.

These twenty five is doing really, really well. And i'm like, okay, right now is the time for you to build your watches. Don't do what everybody else is do and build your warchest. So we talk for about an hour and a half life now, now went back and shared within an individual this become a built, a small empire construction in the north orge area.

And I was sharing his story about in two thousand and seven, and he was a great, really starting back in about two thousand and five, two thousand and six, he started build in his warchest. So when things came apart in two thousand eight, he state focus coming out. And twelve, all the, and he started by basically buying and bringing in everybody in the contracting process from ground break, new ground breaking to complete finish.

And he's doing so ridiculously well. And i'm saying, looked to those individuals there don't admire where they are today. I mean, admire IT, but go back and find out what they did to get there and what you'll fine.

There are people who are here. They are lucky, right place, right time. There's always going to be those. But the large majority of those that we're admiring ing today made some sacrifices back then, and they also made some mistakes.

And the differences, they learn from those mistakes and they press under the greater achievements of the future of optimistic. I love the optimistic optimism. B, by the way, and i'm just trying to explain to him, and he's like, dad is hard, right? Yes, it's hard.

That's why they call IT discipline. That's why they call IT the best travel. Build your warchest and be patient.

Think where you want to be ten years from now. Don't think where you want to be six years, six months. Think where you want to be ten years now. And then build back into the action plane that you can build today to get there and then surround yourself with with wise vice and people who love you enough to call you out for your stupid behavior. The people who love the most are the ones that are going to tell you you're headed on a path destruction and they're going to try to warn you before you get there. And then is your choice to heed that warning or run off the Cliff with the with the, excuse me, other folks.

indeed. All right. Well, paul, that's all the time I have today. I got, I got family come in shortly has been great talking with you.

For everybody who would like to speak with paulin, this team, please go to peak financial investing dot com. Fill out the simple form, somebody will be in touch with you within forty eight business hours. Uh paul, have a great thanksgiving.

Thank you, Chris, into you and all the listener's my god, just bless your fellow sha with love and great fellowship and and conversation around the thanksgiving table and and everybody just enjoy family and all the different personalities, even the ones that irritate you from time to time. Just enjoy each other's company because you you're there for reason and and thanksgiving and the fellowship becomes around Christmas to me is just just one of the things I look forward to indeed.

Well said, i'm Chris Martin is in a peak financial investing. This has been financial. You so full.

have a good one. You too, Chris.