0:00

All right, Brent Johnson, Santiago

0:02

Capital, otherwise known as the

0:04

dollar milkshake guy, and if you're

0:06

on Twitter, one who likes to poke

0:09

fund and everybody who thinks the death of the dollar is

0:11

coming anyway, Brent, always

0:13

a pleasure to.

0:13

Catch up with you. Thanks for joining me.

0:16

Yeah, yeah, happy to be here. I'm looking forward

0:18

to talking to you.

0:19

Yeah.

0:19

So we're framing up sort of twenty

0:21

twenty four. And you know, it

0:24

was a year ago. About a year ago, you

0:26

and I were in Vancouver at a conference together, and

0:28

I remember you talking about part

0:30

of the reason why I like to continue to kind of

0:33

pound on the dollar and sort of go in

0:35

the face of all these death of the dollar guys,

0:37

isn't because I believe the dollar goes on forever. It's

0:39

just that it's not coming as imminent as

0:42

a lot of people make it sound.

0:43

And that was sort of your approach last year.

0:46

And here we are another year later,

0:48

and there's still plenty of people calling for the death

0:51

of the dollar, and I'm just curious. I want to

0:53

sort of recap a little bit of twenty twenty three, kind

0:55

of get your sort of outlook on twenty

0:58

twenty four, Right, now, and then I want

1:00

to look at it in light of three big events

1:02

that I think could potentially shape this year, and

1:04

so we'll get your opinion on these, and that one is the

1:07

massive amounts of debt and deficit spending

1:09

that we're looking at. Number two

1:12

being an election year that always

1:14

sends maybe drives trends,

1:16

if you will. And then third is wars

1:19

that seemingly are just continuing to escalate

1:22

and what that could potentially do in all of

1:24

this. So that's sort of the framework

1:26

of this conversation. So

1:29

let's first just start with the dollar.

1:32

Everybody's calling the death of the dollar. It's

1:34

been greatly exaggerated. Bricks

1:36

came and went seemingly that kind of didn't

1:38

go anywhere, and surprise,

1:41

surprise, the world didn't end. The Marcus didn't

1:43

crash, the economy didn't crash, and it held

1:45

up pretty strong. Now i'd like

1:47

your opinion on this. We'll start with this question.

1:50

Mark Twain said that it's not what you don't know

1:52

that gets you in trouble, it's what you absolutely know for certain, and

1:55

people were certain as soon

1:57

as the risk free rate went up, stocks

2:00

had to they had to have to reprice

2:02

lower and they were also sure

2:04

that when mortgage rates went up, they had to had

2:06

to home prices had to have to have crash.

2:09

Neither of those things happened. So the

2:11

dollar made it another year. The markets

2:14

the economy made in the year. Like what kind of happened

2:16

last year? What were you surprised by? And kind

2:18

of frame that up?

2:20

Well, I was not surprised

2:23

until the last two months. I did not think

2:25

that. I wasn't shocked

2:27

by the last two months. I always try to figure

2:30

out all the different scenarios

2:32

that could happen, and I knew

2:35

that a melt up could happen, but I didn't think

2:37

that it would. And so, you

2:40

know, up until about September October,

2:43

you know, I kind of felt like I kind

2:46

of knew what was going on, and I

2:49

wasn't in the melt up camp. I understood the arguments

2:51

they were making. I didn't think they would come to be but

2:53

they did. And so, you know, I'd say the last

2:56

two to three months were somewhat

2:58

frustrating, not so much much

3:00

because it ruined our year or anything,

3:02

but you know, you always like to be right,

3:04

and it's never fun to be wrong, and that,

3:07

you know, I was wrong for the last two months. But

3:10

what I think is kind of interesting

3:13

to me is that

3:16

what I would call the cognitive dissonance

3:18

of the market. And I feel like oftentimes

3:21

the market argues with itself and what I

3:23

mean by that or or or they're kind of

3:27

they're kind of at odds with what they're saying.

3:29

And I'll give you an example. So the melt

3:31

up in many ways took place

3:34

as a result of the expected

3:37

FED rate cuts, right, And

3:40

actually much of last year's whole performance

3:42

was based on the idea that

3:45

the FED was done tightening. It

3:47

was only a matter of time until they started loosening,

3:50

and or the only amount of time before

3:52

they stopped tightening. And then kind of later

3:54

in the year it became when are they

3:56

going to cut and

3:59

now or as of the end of the year, And even now

4:01

it's kind of priced in that we're going to get seven

4:04

rate cuts in twenty twenty four. But

4:07

the thing is, and so as a result, everybody's

4:09

buying stocks, right, and equities

4:11

are back at their all time highs. But

4:13

if equities are still at their all time highs

4:17

and markets are still holding up, then

4:19

they're not going to cut seven times in

4:21

my opinion, In other words, front

4:24

running the cuts has somewhat

4:27

negated the need for the cuts. And

4:29

secondly is even if we do get seven

4:32

cuts, it's kind of already priced in. So what

4:34

happens if we only get four, right, or what happens

4:36

if we only get three? And

4:39

in my opinion, if we

4:41

do get seven cuts, it's because the market

4:43

is falling and the economy is not good,

4:46

not because it's great. And so

4:49

you know, I think to

4:51

get seven rate cuts we need the equity

4:53

markets and economics to be much lower

4:56

and not at all time high. So so I think there's

4:59

this kind of disc between what drives

5:02

FED policy and what doesn't. So

5:05

to me, it was kind of an interesting year to watch

5:08

this take place, and

5:10

like I said at the end of the year, is kind of frustrating to see

5:12

this melt up take place, which to be honest,

5:14

we didn't really participate in. So that was a little frustrating

5:16

as well.

5:17

Couldn't you say with that line of thinking, couldn't

5:19

you say that we're

5:22

I mean, maybe what we're seeing right now contradicts

5:24

that. So like, why is the FED

5:26

cutting when the economy in the market so well,

5:29

unemployments holding up, we're

5:31

still having positive GDP growth, pretty

5:33

strong positive GDP growth of that matter.

5:35

And you know a lot of pundits

5:38

online are saying basically that why

5:40

are they cutting?

5:41

Why are they pivoting when we are so strong?

5:45

So I've got a couple of different reasons

5:47

why I think that could be. And you

5:50

know, this is probably a good time for me to say, is

5:52

you know, when I was kind of younger

5:55

in the business and kind of starting out, I

5:57

always tried to be right, and I

5:59

always tried to figure out exactly what was going to happen.

6:01

And the older I get, the more I realize

6:04

I just don't know and nobody does. And

6:06

so rather than always trying to be right about

6:08

everything, I now just try to be prepared for

6:10

anything. So I'll tell you

6:13

kind of why I think

6:15

they could be doing this. But

6:18

I'm the first one to say that I don't really know

6:20

when neither does anybody else. So one

6:23

theory, or one thing that could be is that

6:25

they have some insight

6:28

into the trends that are emerging,

6:31

and the trend

6:33

of whether it's you know, economic

6:35

numbers or reserves available in the

6:37

banking system, or inflationary

6:39

pressures, and they see us

6:42

of a bigger slow down coming

6:45

than is currently being reflected kind

6:47

of in the data. But they see the data

6:49

slowing fast, and they think it could slow much

6:51

faster, and they are trying to

6:53

get out in front of it. That's one possibility.

6:57

Somewhat related to that is that I

6:59

think and Powell started the hiking

7:02

cycle two years ago. That's the other interesting

7:04

thing is literally if you look at a number of different

7:06

asset classes, they are right now where

7:08

they were two years ago when the whole hiking cycle

7:11

started. So it's kind of interesting that everything's

7:13

back to where it was, except for interest rates are now

7:16

five percent instead of zero percent. But

7:18

I think when he started his hiking cycle,

7:21

Powell, I mean, I don't think that he

7:24

believed that he would be able to raise

7:27

interest rates and slow inflation without

7:30

causing a hard landing or a recession.

7:33

And he kind of, you know, he was

7:36

pretty clear about that. He

7:38

often said, you know, there needs

7:40

to be pain. This isn't going to be easy.

7:43

You know, you know, unemployment will probably lie,

7:45

you know, profits will probably fall. Like he

7:49

was pretty tough about that initially, and I don't

7:51

think he would have said that if he didn't

7:53

believe it, you know, and he even said the pain from

7:55

a recession, we believe that the pain from

7:57

a recession would be less

7:59

than the pain from continued inflation. So

8:02

I think he believed that he was going to have to

8:04

cause at least a small recession in order

8:06

to get rates back up and to get

8:08

inflation under control. But

8:10

I think as he went along and

8:13

got closer and closer, you

8:15

know, as as equity markets kind

8:17

of you know, they fell initially, and then they

8:19

ramped up over the last year, and as they kind of

8:21

moved back towards their all time highs,

8:24

and the overall economy held up,

8:26

and we didn't have you know, a real estate

8:29

collapse, and you know, inflation, while

8:32

maybe it didn't crash, it stopped going

8:34

up as fast and it has started to come down.

8:37

I think that maybe he thought, maybe

8:40

I can pull this off right, maybe I can

8:43

stick this landing. And as a result,

8:45

then I think he probably started

8:47

trying to be taught at least talk

8:50

a little bit nicer than

8:52

he had been previously. And

8:54

then I think, you know, I think there

8:56

is truth to the idea that at the at

8:59

the November he said,

9:01

before we will start to slow

9:05

before we get to two percent, right,

9:07

so I think what the readings are now

9:09

around four percent, the goal is two percent.

9:12

It does make sense, you don't if you know, if you're flying

9:14

a plane, you don't want to land going five hundred

9:16

miles an hour. It does kind of make

9:19

sense to kind of slow down into the

9:21

landing. And so I think kind of related

9:23

to that, thinking that he can stop or

9:25

stick this landing, maybe he thinks that, you

9:27

know, it makes sense to kind of start this glide

9:29

path to slow down a little bit. And

9:32

then, which I'm sure is not news

9:34

to anybody. I think it's political.

9:36

You know, I don't think they want a massive recession

9:39

heading into a presidential election. I

9:41

think they would prefer that things kind of continue

9:43

going as they are. I think he likes

9:45

being the FED chair. I think he would like Biden to

9:48

reappoint him if Biden gets re elected. And I think,

9:50

you know, if if Trump gets re elected,

9:53

maybe he would stay in that job, but maybe

9:55

he wouldn't. And so I

9:58

think there's some of that as well. I think the FED it is political.

10:00

The people who tell me that the FED

10:03

is independent, I

10:05

you know, I understand that that's what's written, you

10:07

know, in the textbooks, but I just don't think

10:09

that's the real world. I think they're very political.

10:11

Yeah, of course they're political.

10:13

I would have a hard time understanding how anybody

10:15

could think that they're independent. So I would agree

10:17

with you on that. I think if you look at

10:19

the PC data, it looks like they're way under

10:21

shooting their target. Potentially you

10:23

could reach the end of twenty twenty four goals

10:25

by like March, and so maybe they're starting to go, oh,

10:27

shoot, we're breaking too hard.

10:29

Like let's let off the brakes a little bit. Yep.

10:31

So we'll see. But I guess that

10:33

sort of takes us into one

10:36

of the topics I wan't talk about, which was the election cycle.

10:39

So I think maybe only

10:41

one president income and president in a reelection

10:43

year is one during a recession. So if

10:46

the Democrats want to win again, they're going to do anything

10:48

they can to make sure we don't have a recession.

10:53

And you know, I guess they'll use whatever tools they have at

10:55

their disposal.

10:56

So do you think that's going to be enough

10:58

to be able to sort of dry markets

11:01

this year? I mean, do you think that will be the big sort

11:03

of theme that might prevent any

11:06

of these. Last year, we still

11:08

had lot. I think the general consensus

11:10

was a big recession last year didn't happen. Now

11:12

the general consensus seems to be no recession

11:14

in twenty twenty four.

11:16

Right, Yeah, And I

11:20

don't know that we're going to get a recession. My

11:23

kind of base case is that at some point

11:25

this year, whether it's in the first half or the second

11:27

half, we will get a

11:30

downturn in the economy and in

11:32

the stock market. So I'm not in

11:35

the melt up all year

11:37

camp now. Having been wrong

11:39

about that last year, I'm the first admit that I

11:41

can paint a scenario where we do get a melt

11:44

up all year, but I think that that is unlikely

11:47

now. Whether we slow down

11:49

in the first half and

11:51

that causes the FED to really pivot and

11:53

we do get those seven rate cuts

11:55

as a result of them trying to quote unquote

11:57

save the market and goose it higher,

12:00

or if we get into the you

12:03

know, things kind of stay strong into the

12:05

summer and then into the fall, we

12:08

get some volatility. I don't know, but I

12:10

do not think that we are going to get

12:12

through twenty twenty four with

12:15

the vix averaging you know below

12:17

fifteen, Like like the

12:20

vixes at the all time low, equities are at

12:22

their all time highs. You know, I feel like

12:24

the market is priced to perfection. But

12:27

I just feel like we live in a very unperfect

12:29

world. And as it relates

12:31

to, you know, politics,

12:35

I am of the belief and again

12:37

I don't think this is necessarily a unique view,

12:39

but I feel very strongly about it

12:42

that whoever wins, the

12:44

other side will not accept it. So

12:48

while I think the powers that be, whether

12:50

it's the FED or the Treasury, or the White

12:52

House or the all working in combination,

12:55

try to keep things moving smoothly,

12:59

I don't. I don't think just

13:01

because my point is just because they want things

13:03

to go smoothly in a presidential election year,

13:05

I don't think that they necessarily will,

13:08

and typically they do go well in

13:10

a presidential election year. But you know, remember

13:12

we had COVID in twenty twenty. That was a presidential

13:14

election year. The global financial crisis

13:17

was literally happening right in

13:19

the middle of the two thousand

13:21

and eight presidential the run

13:24

up to the presidential election that there was even

13:26

a point where John McCain and Barack

13:28

Obama, you know, suggested suspending

13:31

their campaigns to go back to Washington

13:33

and focus on the global

13:35

financial crisis. So just because

13:37

you know, monetary authorities and governments

13:40

don't want bad things to happen, doesn't

13:42

mean that they won't happen anyway. So

13:45

that's kind of where I come down. I think

13:48

we are going to have high volatility this

13:50

year. Are much higher volatility this year

13:53

than last year.

13:53

Yeah, that's a really good point that you bring up,

13:55

and you're absolutely right. I remember in twenty

13:57

sixteen election there

14:00

was a lot of all not so much in the markets

14:02

per se, but certainly throughout the

14:04

country in the economy. I think

14:06

there was like six different cities that were on fire

14:09

that was sort of like BLM was kind of taking

14:11

over. Riots happening everywhere, and

14:13

so already the

14:15

talk of this being the most important election

14:17

ever.

14:18

And so whatever we've seen,

14:20

everyone is right.

14:21

Yeah, well it seems like everyone becomes more and

14:23

more important. But it

14:25

seems that maybe some of that disruption we might see

14:28

might be amplified.

14:30

Now if we jumped to a little bit of.

14:32

A higher level, maybe sort of

14:34

maybe Warrior a little bit more better known for at least

14:36

from what I see on Twitter, sort of looking

14:39

at the fiscal side of things

14:41

and the Treasury. It

14:43

seems like, you know, the Fed sort of

14:45

got neutered a little bit by trying to bring

14:47

the pain pain, pain to the point that you said earlier,

14:50

because they can only make you and I feel pain.

14:52

But Janet yelling over at the Treasury wants

14:54

to continue this deficit spending like

14:57

we're in World War seven or

15:00

something.

15:00

I don't even know who we're at.

15:01

Like they spend so much definite spending, and it's

15:03

like almost no matter how broke Jerome

15:06

Powell makes you and I, you have the

15:08

Treasury spending that much and

15:10

they're continuing to spend that much. The deficit

15:13

is continuing to grow, and

15:15

at the same time, we've already started

15:17

to see it seems like some dysfunction happening

15:20

in the treasury markets. You might disagree

15:22

with that, so I'd like to hear your point, but we've seen some tales

15:24

happening in some of these auctions, and it

15:26

seems like, I know a lot of people would

15:29

say that the foreign governments

15:32

aren't buying as much treasury debt, and I know you

15:34

have an answer for that, but when I look at some of the

15:36

auctions, it looks like they're buying almost as

15:38

much. It's just there's more supply than there was

15:41

before. So anyway, what's your outlook

15:43

on sort of that debt and that fiscal side.

15:47

Yeah, so the first

15:49

thing I'll say is that whatever your

15:52

projections for the budget deficit

15:54

and the national debt are, I think they're

15:56

too low.

15:58

And the CBO has are.

16:01

Out right, yeah and so and

16:04

so this this often gets me painted as

16:06

kind of well, this is why my

16:08

whole thesis of the dollar getting stronger

16:10

is often kind of confusing to people,

16:13

because a lot of people will say,

16:15

because they're going to spend so much money, because

16:18

they're borrowing so much that they

16:20

will never be able to pay back, then

16:23

therefore that means they're going to have to print a bunch

16:25

of dollars and the dollar is going to

16:27

lose value. And in the

16:29

overall long scope of history,

16:31

that is probably true. But

16:33

if we get back to the whole you know, eminent

16:36

versus inevitable. You know that you

16:39

mentioned at the very top of the hour, and

16:42

the thing that people need to remember, and we

16:44

don't need to go too far down this path, is that is

16:46

that currencies trade relative to each

16:48

other. They didn't always, but they do now. And

16:51

you know, we're no longer on a gold standard. The

16:54

whole world is on a US dollar standard now.

16:56

Whether you think they should be or whether you think they shouldn't

16:58

be, that's an entirely different debate. The

17:00

fact is, as they are. The whole world uses

17:03

dollars. And while our

17:05

budget deficit is enormous and

17:08

our budget and our national debt is enormous,

17:11

every other country is running a budget deficit as

17:13

well, and they're spending a lot of money as well,

17:16

and they don't have nearly the amount

17:18

of advantages that the United States does, and so on

17:20

a relative basis, there is demand

17:23

for US treasury bonds and US dollars

17:26

and that sort of gives

17:29

the the the US government the

17:31

ability to

17:33

get away with these ridiculous

17:36

policies more than say some other You

17:38

know, if if Turkey was running these policies,

17:40

or South Africa or you know, Argentina

17:42

or whatever it is, then you're going to see their currency

17:45

falling a lot. But we have, you know, we

17:47

have, and we have right. But that

17:49

is there is a difference again, whether

17:52

you think there should be or not, in

17:54

the real world, there is a difference between

17:57

the country issuing the global reserve currency

17:59

and a periphery country that nobody needs

18:01

their currency. And so, but

18:05

what I think probably happens

18:07

barring a crisis. So barring

18:09

a crisis, well, the same thing is is this

18:12

could even cause the crisis. Is

18:14

that if we get into

18:17

some kind of a mass liquidating

18:19

market like we had in two thousand and eight,

18:21

like we had in twenty twenty,

18:25

then I think treasury bonds may very

18:27

well rally dramatically and interest rates

18:29

could fall. But

18:31

if we don't have that, what

18:34

I think could also happen is I've

18:36

been saying for many years that we are headed

18:38

towards a sovereign debt crisis

18:41

where countries get

18:44

into trouble, not just corporations or

18:46

companies or families, right, And

18:48

in that scenario, global

18:50

interest rates rise because

18:54

nobody wants to buy those bonds or those or

18:56

those countries have to pay more in order

18:58

to get people to buy their bonds. Now,

19:01

I think that that if the US continues

19:03

to spend at the rate that they are, and

19:06

we avoid some kind of a liquidating marker

19:08

where everybody does a scramble for treasuries,

19:11

then it would not surprise me at all. To see the ten

19:13

year back at five percent wouldn't surprise

19:15

me. To see it go to six or seven percent over the

19:17

next couple of years. Now,

19:19

then again people will say, well, this is horrible

19:21

for the US because then the interest expense

19:24

is going to be two trillion a year rather than one

19:26

whatever. Whatever the number is right, and

19:28

again in the very long arc of history, I agree.

19:31

But in the short term, in

19:34

the short term, I

19:36

think other currencies and other sovereign

19:38

bonds will get rejected as well. So, in other words,

19:40

even though governments

19:43

around the world are institutions around there, what

19:45

maybe don't want to buy treasuries

19:47

at the same rate as they used to. I

19:50

don't think that they're going to buy Italian treasuries

19:52

instead of US treasuries. I don't think they're

19:54

going to start buying Canadian treasuries instead

19:57

of US treasuries. In other words, I think

19:59

we could get into a scenario where all interest

20:01

rates rise on government bonds and

20:03

that and if the US

20:06

Treasury is paying let's

20:08

call it five or six, six, six or seven percent

20:10

on their ten year treasury.

20:12

To me, this is a nightmare for

20:15

emerging markets because one

20:17

of the way that emerging markets gets

20:19

access to funding, is they

20:21

pay more than the US Treasury, right

20:25

if you need if you need dollars to operate

20:27

on the global stage, but you don't

20:29

need Turkish lira to operate on those global

20:32

stage, or you don't need uh, you

20:34

know, tie bonds ti bot

20:36

in order to operate on the global stage, and

20:39

they're both yielding the same, You're going to buy

20:41

a US treasury it just

20:43

makes more sense. And so if

20:46

we get higher yields in the on the in

20:48

the US Treasury, this could

20:50

cause a funding problem for

20:53

the rest of the world, which could

20:55

then kind of kick

20:57

off this global sovereign

20:59

debt cry basis or currency

21:02

crisis that I think at some point

21:04

will happen. So

21:06

so I'm going to get to your

21:08

your your your question about the treasury

21:10

auctions, and this is where the treasury auctions come into

21:12

hand. I don't think we are going to have

21:15

a failed US Treasury auction. And

21:18

this is probably too long of it that we

21:20

can get into it if you want to. But there's several operational

21:23

reasons why I don't think we have one, but the

21:27

the treasury tails that you mentioned.

21:29

Oftentimes, these these auctions

21:31

are usually well they're always

21:33

over subscribed, right, so if

21:36

they auction I'm just going to make up a number. But if

21:38

they're auctioning off one hundred billion dollars

21:40

worth of Treasury bonds, there's

21:42

two to three hundred billion dollars worth of

21:44

interest on these or or you

21:46

know, people bidding for these

21:48

bonds. So we've never been

21:50

close to a failed auction. But you

21:53

know, in order to place all those bonds, you

21:56

know they are asking for a higher yield, or

21:58

there have been cases where they've asked

22:00

for a higher yield to finish off

22:02

the auction, and

22:05

therefore you get these tales that you were mentioning.

22:09

So I think, but I think it's important to remember that it's

22:11

not a case where nobody's

22:13

showing up to the auction. All of the auctions

22:15

are always over subscribed. Could

22:18

we get into a situation where nobody shows

22:20

up? Theoretically

22:22

yes, but again, and it's really hard

22:24

to see that happen. I do not believe

22:27

it's possible that we would have a failed

22:29

US Treasury auction. But again, France

22:32

continues to be funded, Italy be's

22:34

funded, South Africa's funded, Egypt's

22:36

funded, Australia's funded again,

22:38

you know, the US dollar kind of says at

22:41

the base of the pyramid, it's

22:43

really hard to have the foundation of a

22:45

house fall and not have the rest

22:47

of the house go with it. It's possible,

22:49

but it's very unlikely.

22:52

Yeah.

22:53

The one thing I learned very or very early on in

22:55

my investing career was money goes where it's treated

22:57

best. And I think that's sort of what you're saying. So

22:59

it's not to go to Turkey or Argentina.

23:02

So it's gonna go worad's treated best. And so what

23:05

we'll probably see and to your to your thesis,

23:07

the milkshake thesis, is that

23:09

the dollar will continue to be, as most people say, the

23:11

cleanest shirt in the dirty laundry or whatever it is. But

23:14

where it's treated best. I mean, it's probably the safest

23:16

and best return you when

23:18

you when you look at both of those, there

23:20

might be a time when it's not.

23:22

I saw this chart the other day, and I am going

23:25

to tell everybody that you haven't had a chance to look

23:27

at this. So I'm going to kind of spring this on you.

23:29

If I can pull this up real quick,

23:31

and it's just a chart, it's not there's not

23:34

a hole there's not a whole lot to this. It was just

23:36

on Twitter, and I don't

23:38

know, I haven't really even dug into this as much.

23:40

But it says at the current rate of borrowing

23:42

of deficit spending, I think the last

23:45

three quarters we've seen about a trillion dollars added

23:47

per quarter, and

23:49

so it's at this rate, we'll be adding a

23:52

trillion every seventy days, then every fifty days, every

23:54

twenty days, and

23:56

this says by twenty twenty five it can

23:58

be up to a trillion dollars per week if

24:00

we stay on the trend.

24:02

If we stay on the.

24:02

Trend, yep, And it's

24:05

it's it's a what what is it? Is

24:07

it debt or is it a monetary base?

24:09

What?

24:09

What is it?

24:10

This is debt the amount of debt being added.

24:12

So we added a trillion dollars in

24:15

ninety days, and then it says we'll go to a trillion

24:17

every seventy every fifty days, every twice. So it's the

24:19

amount of debt that we're adding. So

24:21

that that would be if we stay on trend, which

24:23

you know we may or may not.

24:25

But you had.

24:26

Mentioned when you were saying, you

24:28

said if the government and the word if

24:30

if the government continues to spend like they're

24:32

spending, what are the

24:34

odds that they decide to not spend like

24:36

they're spending and go back to austerity. I mean,

24:38

that's a pretty low base case, wouldn't it be.

24:40

I think it's a pretty low base

24:43

case. Again, not impossible, not

24:45

impossible, and it and what they

24:47

could also do is you got to remember they could they

24:49

could do something like not

24:52

spend for six months or three months, right,

24:54

and then spend again. And so but

24:58

in general, it's very unlikely

25:00

the government is going to stop spending money. I mean,

25:03

those odds are very low. But

25:05

there's something to there's something that people

25:08

need to remember. And this

25:11

sort of gets into the whole MMT

25:13

thing. And I don't want to lose people on MMT and I don't

25:15

want to go too far down the rabbit hole on MMT.

25:18

But I think a lot of times when people hear

25:22

the this gets I know, I'm jumping

25:24

around. But yet at the beginning you said one

25:26

of the Twain

25:28

quote that it's not what you don't know that gets you

25:30

in trouble, it's what you're certain about that just

25:32

ain't so right. And

25:34

there's a lot of people who are certain that

25:37

MMT policies will lead to ruin.

25:40

And it's not that that's incorrect.

25:42

If taken to the extreme, I would tend to agree

25:45

with those, but it doesn't mean it

25:47

will lead to ruin right away. It's

25:49

like a little bit of

25:51

sh exactly. And so you

25:53

know, if you if you inject yourself

25:56

with heroin in the heart, you're probably too many times

25:58

you're probably gonna die. But if you do it once, your probably

26:00

going to be pretty excited, and you know, you

26:03

have a lot of energy. And so you

26:05

know, I think that

26:07

you know, the government spending money

26:11

doesn't necessarily mean that the US

26:13

fails or loses

26:16

global reserve currency status overnight.

26:18

And I know people have been predicting this for fifty

26:21

years now, and they're

26:23

saying, well, we're not predicting it's overnight. We've been predicting

26:25

it for fifty years, and so now's the time. Well,

26:28

people have been saying now's the time for

26:31

as long as I've been in this business. And

26:33

I'm not saying not to be prepared for

26:35

now's the time, but just I would highly

26:38

recommend people don't bet their entire portfolio

26:41

on now being the time, and

26:43

The other thing is that, again, because

26:46

there's so much demand for US

26:48

dollars and because there's so much demand

26:50

for US dollar debt, the US

26:52

government can kind of get away with this for

26:54

a lot longer than others.

26:57

The other things that the US could very

26:59

easily do, they could do

27:01

things like mandating banks

27:03

by treasuries. They could mandate endowments

27:06

hold ten percent of their portfolio and treasuries.

27:08

They could mandate that all public pension funds

27:11

hold ten percent of their you know,

27:13

of their balance and US treasuries. And

27:16

they would say it's for your own good, it's

27:18

to make sure that you don't lose your client's money,

27:20

right, And it could be bullshit, but

27:22

it's not going to stop them from doing it, right.

27:25

And so there's my point is there's still a

27:27

number of things that could be done to

27:30

fund the US treasury if the market

27:33

didn't want to do it on its own.

27:34

Yeah, they could say all stable coin treasuries

27:37

have to be put into treasuries.

27:38

Oh they did that too.

27:40

No, But I love I love that point that you made,

27:43

And this is sort of the point that I always try to hit

27:45

on. You know, the guy's like Harry Dent, who's

27:47

been calling the crash for twelve years and eventually we'll

27:49

get that or Robini or whatever.

27:52

I feel.

27:52

I've read five of Harry Dent's books. I think his research

27:55

is great. The assumptions

27:57

that he draws from the research has been wrong, partly

27:59

because I think they failed to con they failed

28:01

to think about how many more magic tricks the FED may have up

28:03

their sleeve. And to your point, like they

28:05

could just mandate that whoever buy strategies,

28:08

right, they could mandate everything whatever, and so

28:10

like, there's so many more things that can be

28:12

done, and it seems like they'll continue to do

28:14

those things rather than let themselves collapse,

28:17

and so like then you kind of have to start thinking

28:19

out of the box, like, oh my gosh, the commercial real estate

28:21

mortgage market could collapse and sink sink the

28:23

market.

28:24

Yeah, or the FED could just put it on its books.

28:26

Sure right, No, exactly and so and

28:29

this is kind of the key The

28:31

key thing is, I think any

28:34

and the reason I say this is

28:36

because I am guilty of this

28:38

myself, or I was guilty of this

28:40

myself several years ago. I was very

28:42

guilty of this, and it took me along

28:45

to figure out long time to figure out what I

28:47

was doing wrong, and once I figured it out,

28:49

I have it has it has

28:51

allowed me to see the world much clearer.

28:54

And that is, if

28:57

you analyze the United States

28:59

in a vacuum, the only possible

29:02

conclusion that you can come to is

29:05

that it is a disaster waiting to happen,

29:07

and it's going to end really, really badly, because

29:11

the fundamentals are just really, really bad.

29:14

The problem is is that it's

29:16

not a very useful

29:19

exercise to analyze

29:21

the United States in a vacuum because the

29:23

world is not a vacuum. It's a very big world,

29:25

and it's very interconnected, and

29:28

when everything trades relative to everything else,

29:30

and to your point earlier, money

29:32

goes where it's treated best. In

29:34

order to get a good understanding of

29:36

what's going to happen in the US

29:38

market, you still need to understand what's going

29:41

to happen in the European market, what's going to happen in

29:43

the Chinese market, what's going to happen in Japan and

29:45

South Africa and India and Brazil.

29:47

It's important to understand the

29:49

relative nature of all this stuff. And

29:52

once you kind of do the same level

29:54

of analysis on France

29:57

or India, or Japan or China.

30:00

You have already done on the United States.

30:02

You realize that those countries aren't in very

30:04

good shape either, and it's very hard

30:06

to come up with a situation where those countries

30:09

thrive. And so that,

30:12

in my opinion, is one thing

30:14

that it's it's not it's it's not

30:16

that it's a useless exercise to analyze

30:19

the United States. It's just not very

30:21

useful to analyze it all by itself

30:23

and think that you're coming to the to

30:25

the correct conclusion of what's going to

30:27

happen. And like I said, I

30:30

coming out of the global financial crisis, that's

30:32

what I did. I did that for about four or five years

30:35

and just kept banging my head against

30:37

the table trying to fagil what what am I getting

30:39

wrong? And once I kind of stepped back and

30:42

looked at the whole picture, it

30:45

becomes much more clear.

30:46

All right, Let's let's try to dig

30:49

into a couple of things that might challenge some people's

30:51

preconceived notions here. So to

30:53

your point, the clean of shirt and laundry,

30:55

it's still still treated best here. Lots

30:58

of tricks up their sleeve to get people to continue the

31:00

treasuries.

31:01

I would agree with that.

31:02

You mentioned time frames a couple of times, and

31:05

let's let's try to frame that up. Let's just

31:07

say within the next couple of years, let's

31:10

even even this decade, and it's really more of a

31:12

trend. So a couple things that I would throw

31:14

out there, and let's see what you think about this. So, first

31:17

of all, I don't think there's

31:19

a lot of people that would argue with you that

31:22

any government or currency or

31:24

bond market is better than the dollar. I don't

31:26

think anyone would ever make that, not anyone somewhat

31:28

educated anyway. But

31:31

like with the rise of the bricks, like they're not creating a new currency

31:34

or just forget bricks, just any nation.

31:36

They're not come with their own currency. They're not going to challenge the US

31:38

dollar, they're not going to challenge the treasury.

31:40

But they could just.

31:42

Keep their money in the ground in oil or

31:44

gold or lithium or whatever

31:47

X y Z. There's no deep liquid bond

31:49

market like US treasuries, but they could just buy gold or

31:52

whatever. So something

31:54

like that seems like it could sort of be a

31:56

pretty big disruptor. I

31:59

think I saw twenty percent of oil is now

32:01

being traded outside of the dollar. That's trading,

32:03

and I know you probably have that's currency. But

32:06

couldn't nations just hold their wealth

32:08

in commodities as opposed to bonds.

32:12

Sure, they could absolutely do that, And this

32:16

kind of goes to what I was talking about earlier.

32:19

If they do that, if they decide to hold

32:22

their reserves or you

32:24

know, their profits in commodities

32:27

or natural resources or even stocks

32:29

or whatever it is, rather than

32:32

bonds, then that would

32:34

see I would believe that would see yields

32:37

on sovereign bonds rise. But

32:39

I don't think it would be a case where

32:42

only US yields would rise. So again, I

32:45

think yields would rise in Europe. I think they would

32:47

rise in Japan, they would rise

32:49

in China. So in other words,

32:52

if governments

32:54

around the world stop

32:56

and institutions around the world stop buying

32:59

you treasuries because they

33:01

don't want it to get confiscated or they know

33:04

they're worried about the value

33:06

of the dollar or whatever it is, and

33:09

they decide to hold commodities, they

33:11

are also, in my opinion,

33:13

going to be shunning all

33:16

European sovereign bonds and Russian

33:18

sovereign bonds and Chinese sovereign bonds,

33:20

and that is kind of the milkshake

33:22

theory, where we get into this situation

33:26

where governments around the world are no

33:28

longer being funded as easily as they

33:30

used to be. They're borrowing costco

33:33

up. It causes them to

33:35

have enormous fiscal problems internally,

33:38

they have to print more of their own currency

33:40

in order to solve these problems, and

33:42

it kind of starts this vicious loop. So

33:45

that's a very long way of saying, yes,

33:47

I think that that is a very

33:49

what you suggested. I think is a

33:51

very real scenario. And

33:53

not only do I think it's possible, but I think

33:55

it's probable that that will play out. Now, whether

33:58

that plays out in the next six months or next six years, I'm

34:00

not smart enough to know that, but I think that is how

34:02

it plays out.

34:03

Yeah, And so to the point to kind of recap what

34:05

you were saying, that will probably

34:07

happen. But people love already stopped

34:10

buying everybody else's bonds. The

34:12

US Treasury will be the last one that they stopped

34:14

buying before they decide to put the rest of their

34:16

money in commodities. And you know, I think all these

34:18

things are not and a go ahead.

34:20

Yeah, let me just make a point, because I think this is the

34:23

short answer is yes. But what I think sometimes

34:26

people, especially retail, because

34:29

I don't think that they realize because

34:31

as a retail investor, or, as an individual

34:33

investor, or as a family, you

34:36

have the choice of just sitting on the sidelines,

34:38

putting your cash into the mattress, buying a bunch of

34:40

gold, and just waiting this out right.

34:44

Big global institutions

34:46

that operate on the global stage, whether

34:48

it's a corporation, whether it's a hedge fund,

34:50

whether it's an endowment, whether it's a government

34:52

agency, they don't

34:54

have that option. Right. If

34:56

you are operating on the global stage, if

34:59

you are trading with one country versus

35:01

another, and you're importing

35:03

energy and food and you're

35:05

exporting you know, goods,

35:08

all of this takes place in

35:11

dollars. And now

35:13

to your point earlier, there are some little

35:16

things on the edges that are trying to disrupt

35:18

this, and you know, and

35:20

I think those will be continued to be tried

35:22

and perhaps even grow a little bit. But by

35:25

and large, if you want

35:27

to operate on the global stage, you

35:29

still need dollars. And so

35:32

while you know, these

35:38

countries may to your point

35:40

buy gold or store their excess in gold or

35:43

oil or whatever, it is, the

35:45

last currency that they're going to give up

35:49

and totally reject is the US

35:51

dollar. In other words, no country

35:53

is going to continue using you

35:56

know, I don't know, South

35:58

African rand and no longer use

36:01

the dollar, right, right, Like Turkey

36:03

or sorry, Brazil and Japan are

36:06

not going to start using South African rand

36:08

and not use the dollar, right. I mean, that's

36:10

just that's just not going to happen, or

36:13

at least not without enormous chaos

36:15

between now and then.

36:16

Yeah, so I would

36:18

agree with that, I mean, why would they. I

36:21

do think about it in a sense of like we've

36:23

used the Chuck E. Cheese analogy before, but we

36:25

were talking before that. I'm building the house in Mexico,

36:27

so I'm going back and forth beween Mexico quite a bit now, and

36:30

I've been keeping some pesos. I mean, I got to use

36:32

them when I go down there.

36:33

I'm done great, I'm certainly, yeah, it has done

36:35

great.

36:35

Unfortunately, I'm I like it when the dollars

36:38

are but uh, you know, I'm not really storing my wealth

36:41

in pesos. I keep some, you know, because

36:43

this is easy convenient for me, but I'm not really storing

36:45

my wealth there. But when you when you look

36:47

at this on the world stage, let's get into

36:50

kind of kind of transition this into sort of

36:52

where we're going for the rest of this year and maybe in the next

36:54

year. We do have a global

36:56

stage, and we do have all these nations with their own

36:58

debt and currency issues, and

37:01

the dollar can only get so strong

37:03

or so weak. It sort of has to stay in this range otherwise

37:05

it causes lots of big problems we've

37:09

seen that we've seen, I

37:11

don't know, potentially talks of like a Plaza

37:13

cord two point zero or something like that, where they devalue

37:16

the dollar to kind of help some of these nations out. And

37:19

if the dollar gets too strong to kind

37:21

of the dollar milkshake theory, they'd have to do something

37:23

to try to maybe devalue to at least slow

37:26

that down. Do

37:28

you think we see something like that happening this

37:30

year. Does that start to affect, you

37:33

know, what the Fed and the Treasury is able to

37:35

do and really having to try to keep that dollar

37:37

too low or do you think this is out like a

37:39

decade from now.

37:42

So I think the whole plaza

37:45

accord, like a serious devalue

37:47

of the dollar, or the whole kind of a global

37:49

agreement where the dollar gets devalued. I

37:51

think that is five to ten years

37:53

out still, you know, into the decade type

37:55

stuff. But

37:58

what I think people two

38:01

things. You know, part

38:03

of the reason that

38:05

the FED would go back to QE

38:08

or go to easy money would

38:10

be because dollars

38:13

are scarce, right. In other words,

38:15

I think people get this confused a lot of time. They

38:17

get the cause and effect messed up. They will say,

38:19

the Fed is going to do QE, so the dollar is

38:21

going to fall. Well, actually, the reason

38:24

that the Fed would have to

38:26

do qe's because the dollar started to get strong

38:28

and they need to weaken it in order to provide

38:30

global liquidity. So the dollar

38:32

is kind of the driver. It's the cause. The

38:35

effect is QE. Now, if

38:37

we get into a scenario this year where you

38:40

know, we get this hard landing that so many people

38:42

have predicted in a hard landing,

38:44

the dollar starts to rise. That is the definition

38:47

of a hard land You're not going to have a hard landing where

38:49

the dollar goes from one O two to

38:51

ninety. That would be a that would

38:53

be an immense easing and prove

38:56

and an enormous liquidity boost to

38:58

the world if if the dollar feil that much.

39:01

But what could happen. What could happen

39:03

is the dollar could start to strengthen fairly

39:06

quickly and as a result force

39:08

the Fed to pivot fully start

39:10

cutting rates, maybe even go back to QE,

39:13

in which case we could have the

39:15

dollar fall let's call it

39:17

from one O two to ninety, kind of very similar

39:19

to what happened after COVID. What's

39:22

kind of interesting now is that the dollar is still

39:24

higher than it was at the high of COVID. Right,

39:26

despite everything that they did after COVID,

39:29

the dollar is still higher now than it was at

39:31

the peak of COVID. But what

39:33

could happen? What could happen? I

39:36

think many people will say, no, this can't happen. What

39:38

could happen is we could just kick this can down

39:40

the road for another five or ten years, where

39:43

maybe we get into another global easing cycle.

39:45

Maybe, you know, the last couple of years, central banks around

39:47

the world were raising rates and you know, restricting

39:50

liquidity. Maybe now the FED

39:52

leads the way. If we get into another loosening

39:54

cycle, and you know, countries

39:57

around the world cut interest rates, they go back to QE

39:59

as well, and maybe markets trend

40:02

higher for in the next two or three years and we don't

40:04

get the crisis that everybody is expecting.

40:08

You know, the dollar goes back to ninety or eighty

40:10

eight or whatever it is, and you know gold

40:12

goes to twenty five hundred, and bitcoin goes

40:14

to sixty thousand, and you know, stock

40:17

market goes to the Dow goes to fifty

40:19

thousand or whatever it is. I can't rule

40:22

that out. That is kind of the way

40:24

things typically go. But

40:27

what I think people need to understand,

40:29

though, is that in that scenario,

40:34

that is not the

40:36

system failing. That's not the dollar failing

40:38

in the system failing. That's actually the

40:40

system perpetuating. And

40:42

I'll give you a good example. A lot of

40:44

people will show these like I saw a headline

40:47

the other day that said, you know, these

40:49

two kind I don't remember the name of the countries, but you

40:52

know countries are now doing

40:55

three to five billion dollars, you

40:58

know, or three to five billion in local

41:01

currency transactions to avoid the dollar

41:03

another evidence of de dollarsation. But

41:06

year to date, already emerging

41:09

market countries have issued

41:11

like fifty billion dollars of new to US

41:14

dollar debt, and so

41:16

as the dollar gets weaker, that's

41:18

what happens more the system

41:23

countries, institutions they issue more

41:25

debt because now the dollar's weaker, right,

41:28

And so the dollar getting weaker provides

41:31

that liquidity. But the form of

41:33

the liquidity comes in it because

41:35

people are borrowing. Institutions are borrowing.

41:38

Now, if everybody stopped borrowing

41:40

US dollars and started borrowing

41:43

just in their local currency, or they borrowed

41:45

in gold, or they borrowed in bitcoin or whatever it

41:47

was, and they no longer borrowed

41:49

in dollars, then there wouldn't be

41:51

any dollar liquidity, right,

41:54

and there wouldn't be new dollars created,

41:57

and then all the dollar debt that already

41:59

exists would have would

42:01

struggle to

42:04

have the interest or would it

42:06

would it would the global would struggle

42:08

to service their

42:10

US dollar debt and and pay

42:13

off their US dollar debt if there was no US

42:15

dollar liquidity. So you really get into

42:17

this. It's kind of a

42:20

very meta thing, right, It's it's self referential.

42:23

And so that's why I often will

42:25

tell in my opinion, the dollar going higher,

42:28

that signals that the system is in trouble.

42:30

Yeah, that's what breaks the system.

42:33

But my fear, not my fear, but

42:35

my expectation would be that if the dollar

42:37

falls, it really just kicks

42:39

this can down the road another five or ten years.

42:42

Yeah.

42:43

Side note, somebody in one of my high

42:46

ticket coaching programs is a

42:49

pretty high end consultant and one

42:51

of his clients is the US Treasury,

42:54

And it was about a year ago. Now he couldn't come

42:56

to one of the meetings because he had to go meet with

42:58

the Treasury and they were in

43:00

the process of building I want to say,

43:02

this could be a little bit wrong, but I want to say

43:05

three or four new printing

43:08

facilities money printing facilities in

43:10

the US, and they're building them right next to airports

43:12

so that they could just print the dollar bills, put

43:14

them onto planes, and ship them right out of the country.

43:17

And he asked them, He's like, whoa, you know, he's into

43:19

bitcoin and you know the whole CBD thing and all that,

43:21

and he said, I thought cash was on its way out, And the Treasury

43:23

guy told him, oh no, oh no, the dollars

43:25

have never been in more demand. We cannot

43:28

create these things fast enough. So that was a year

43:30

ago they were just producing these things.

43:32

So definitely there

43:34

is something to that about this international demand or just

43:36

global demand for dollars overall.

43:40

All right, so where are

43:42

we? Where do we go this year?

43:44

It seems like as the dollar rises and

43:46

falls, it really is starting to sort of offset

43:49

some of these asset prices and drive that. And

43:52

then we have obviously these wars

43:54

escalating. I know you're not a

43:56

geopolitical analyst, but I know you stay pretty

43:59

you know, in tune with at least what's going on over

44:01

there. I mean, closures on the Red Sea

44:03

and the Suez Canal. It's a pretty big deal potential,

44:07

you know, pirate attacks going as they get around the Cape

44:09

of Hope they're in Africa.

44:12

If this escalates one, I mean,

44:14

it could most definitely

44:16

bring back inflation through supply chains, limiting

44:18

oil supplies, et cetera, push and at a

44:20

minimum, pushing the cost of transportation up at

44:22

a minimum, it could also

44:25

even escalate potentially a lot of these

44:27

nations wanting to move away from dollars

44:29

even more. I don't know whatever that means.

44:32

Do you think that over this year?

44:34

I mean, is that something that you're really paying attention to, you think

44:36

that has big potential to sort of

44:38

move the markets.

44:39

Well, geopolitical concerns, in my opinion,

44:42

have never been higher in the time

44:45

that I have been in business, since I

44:47

started in ninety nine, So this is kind of my twenty

44:49

fifth anniversary of being in this

44:51

line of work. I couldnot

44:53

remember a more uncertain time.

44:56

Now.

44:57

Again, I say uncertain. Maybe

44:59

things are fine, right I'm

45:01

not certain that we're going to have volatility.

45:04

I have never been more

45:06

uncertain than I am right now. So if anybody's

45:08

listening to this, thinking Brent's going to give us the silver bullet

45:10

answer, I unfortunately don't have it for

45:13

you. But what I do say

45:15

is that because everything, in my opinion

45:17

is kind of price to perfection right

45:19

now. But we live in a very imperfect

45:22

world, and a big piece

45:24

of that imperfection is where geopolitical

45:27

relations stand and potential military

45:30

hostilities. I

45:32

think that could I think those two

45:34

things could easily impact markets

45:37

this year. Again, Remember,

45:39

typically for the last

45:41

let's just call it thirty years, every

45:45

time we've had some kind of a global

45:48

systemic event over the last

45:50

thirty years, whether it was the global financial crisis,

45:52

or whether it was a euro crisis in twenty ten

45:55

or COVID in twenty twenty, the whole

45:57

world sort of implemented

45:59

similar policies and cooperated

46:02

in order to pull the global economy

46:04

out of it. But during that last

46:06

thirty years, we were in a globalization

46:11

trend where things were becoming more globalized

46:13

and people were cooperating more. Now

46:16

we're kind of in an environment where people

46:18

are not trusting each other is more. They're

46:21

not cooperating as much as they used to. They're

46:23

not globalizing, they're deglobalizing.

46:25

They're not centralizing, they're decentralizing.

46:29

And so as a

46:31

result, if something

46:34

shows up in the global economy

46:36

or in global financial markets, whether it's geopolitical,

46:39

whether it's financial, whether it's health

46:41

related, whether it's environment related, you

46:43

know, I

46:46

think that the ability to respond

46:49

in a coordinated fashion is much

46:51

lower now than it has been in the past,

46:53

and as a result, I think the

46:56

potential for contagion that kind

46:58

of gets away from the powers that be is

47:00

higher. So I think this is

47:03

a year where I think this is a very

47:05

good time to have a very boring portfolio,

47:07

because I think at some point

47:10

this year, it's going to get exciting, and

47:12

I think if you have some dry powder

47:14

to take advantage of that excitement, I think

47:17

you will not only be in a better position

47:19

mentally, but I think you'll be in a better

47:21

position financially to take advantage of it.

47:24

So what does a boring

47:26

portfolio look like in twenty twenty three?

47:29

Asset categories? Things like that?

47:31

And then what are you looking

47:33

at specifically to

47:35

make sure you're sort of staying in front

47:37

of whatever is developing?

47:40

Well, I think one of the things you have to be looking at

47:43

also. So first of all, a boring portfolio.

47:46

I think everybody should own US equities, but

47:48

at their all time highs, I think we're going to get a

47:50

pullback. So if you do own US equities,

47:52

I think you should have some kind of hedge against

47:55

them, or only have

47:57

enough of them in the port you know, you don't have your whole

47:59

portfolio in them. Right In

48:01

another part of your portfolio, I think

48:04

having short term fixed income, which pays

48:06

you four to five percent to just sit there and

48:08

wait, is not a horrible thing. You know.

48:10

It wasn't that long ago where you had to buy a junk

48:12

bond to get five percent. Now you can

48:14

get it in the most liquid thing in the world, which is

48:17

treasuries. I think everybody

48:19

should own gold. I think gold is the foundational,

48:22

uh, part of every portfolio.

48:24

Now, having said that it's at

48:26

its high, I don't necessarily think

48:28

that gold's going to twenty five hundred over the next

48:30

couple of weeks or the next couple of months. I

48:33

think gold to go to five thousand dollars over the next

48:35

three or four years, five years, but I don't

48:37

think it's happening tomorrow. So again, I

48:39

think that's something that you buy and you put in your portfolio

48:41

and you kind of just forget about it until you absolutely

48:44

need it, and it doesn't matter whether it goes up

48:46

or down, you know, over the next year or two.

48:49

The other thing that I think people could do

48:52

is, you know, I mentioned short term

48:54

treasuries. If you don't have

48:56

the ability to you know, to to

48:58

trade and fixed income, you know, just have I mean just

49:01

having cash in a bank account I don't think is a horrible

49:03

idea, or you know, have

49:06

it in your safe in your house, have some kind

49:08

of a safety net that if

49:10

things go south, you're prepared

49:12

for it. And here's the thing is if you if you and

49:15

you know bitcoin. A lot of people own bitcoin.

49:17

I'm I have clients that own bitcoin. I

49:20

just talked to a friendly client yesterday

49:22

and again this morning, and they're they're

49:25

they you know, they bought it. When

49:28

did we buy it or you know, we bought it to you

49:30

know, maybe it was twenty to twenty six thousand

49:32

between twenty and twenty six and so that's up, but thirty

49:34

percent since they bought it, or forty percent since

49:36

they bought it. You know, it's

49:39

not a big part of their portfolio, but they do own it. I

49:41

think having things like that in

49:43

the portfolio, I you

49:46

know, again, try to prepared for everything. If

49:48

you have cash, you're prepared for deflation. If you

49:50

own bitcoin and gold, you're prepared for inflation.

49:52

If you own stocks, you know, over the long term,

49:54

they're probably going to go higher. So I think, I

49:57

think here's what's interesting

49:59

to me. I've talked to so many people

50:01

over the last let's call it two to three months

50:03

really since q Q three,

50:06

and I talked to so many people. Their sure bitcoin

50:08

is the answer. Other people are sure gold is the answer.

50:11

Other people are sure that the stock is just going

50:13

to keep going higher in stocks are the answer. Other

50:15

people think we're headed for a deflationary collapse

50:18

and treasuries are the answer. Yeah,

50:20

I'm just like you know I, and they're

50:23

so certain of it, And I don't think

50:25

you should be certain about anything. Have a little bit of

50:27

everything, be prepared for everything. Don't

50:29

try to be right, just try to be prepared because I think,

50:31

you know, again this year, I

50:34

think something is going to get dislocated

50:36

this year, and which asset class

50:38

reacts I don't know, but you know, if something goes

50:41

down twenty or thirty percent, then you go buy

50:43

it, right, But I don't like buying things

50:45

that they're all time high, with asset valuations

50:47

stretched and all this uncertainty in the world. So

50:50

you know. So a boring portfolio to me is

50:53

one that you'll make a little bit. If markets do really

50:55

good this year, you'll make a little bit. But if

50:57

markets do poorly this year, you're prepared to

50:59

take advantage of it.

51:00

So more of a safety. Lots of volatility,

51:03

a lot of unknown uncertainty. So rather

51:05

play this one a little bit safe till you get a bit more, little

51:07

bit more clarity on what to go or.

51:09

What exactly exactly. And this is the thing is in

51:11

Mark there is always going to be another opportunity

51:14

of markets, don't you know. It's kind

51:16

of like if you're playing poker, wait until

51:18

you get the cards. You don't have to play every hand,

51:21

and just you know, even if you don't play hand, the

51:23

other people playing they might make a lot of money. And sometimes

51:25

it's hard to sit there while everybody else at the table's

51:28

making a lot of money. But the worst

51:30

thing to do is to play a hand just so that you're

51:32

in the game. To me, that

51:34

that to me, that's the worst strategy. And I

51:36

think going all in on you know,

51:38

one or two asset classes right now is kind

51:41

of jumping into the game just because you can't take it sitting

51:43

on the sideline any longer.

51:45

Yeah.

51:46

Well, I have a lot more i'd like to ask you about, but I

51:48

know we got a hard stop and we got to run, so I'm

51:50

gonna let you go with that. Brent

51:53

Johnson, Santago Capital will link to your stuff

51:55

down on the show notes down below. Uh, thanks,

51:57

thanks for jumping on today. Anything else you want to say?

52:00

Did we cover it all? No?

52:01

I just then, you know, thanks for having me on I'm

52:04

always happy to talk to you, and you know, I wish

52:06

I had a civil bill at answer for everybody, but I really

52:08

you know, I think being careful

52:10

is the best advice I can give to people right now.

52:12

All right, thanks Brett. All

52:15

right, let me hit