On the latest episode of “The Cents of Things”, Ron and Jeff discuss real estate, the debt ceiling crisis, and the state of the economy.

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Transcript:

Jeff Kikel: Good morning, sense of things. It’s Jeff and Ron and we have another weekly update. And this week is somewhat unique because it’s what we’ve been talking about for several
0:13
months, the debt ceiling and what the negotiations and all that. And from the time that we left
0:19
off last week to where we are now, guess what? We’re still going. So Ron. Morning my friend.
0:27
Morning Jeff. It can’t be more topical cause half, hopefully after this podcast we won’t talk about the debt ceiling anymore for a couple of years. God. Yeah. And as we’re doing
0:34
the podcast the Senate will be voting soon. It already got through the house, so we’ll
0:40
see. Not that it’s the best thing for our economy, but it saves us from default and whatever.
0:45
Obviously it’s not the optimal plan, [00:01:00] but we’ll have to see what happens. It’s a big pile of nothing for both sides. And we’re. Just, it’s a big steaming pile of nothing,
0:56
oh, I agree. We’ll go with that. I agree. I think you had a kickoff for us in our series. Come on. We’ve always gotta
1:03
start with a little bit of fun and why not just go to our go-to topic? Hey. Top Florida
1:09
man headlines. Now I love this. Now look, a, any a, as everybody knows that for fun, you could go into your phone, Google, whatever, and just type in, most people do their birthdate
1:19
and they type in Florida, man, and the interesting thing I found about this was is that there are websites just dedicated to this, and you would think like these headlines are just
1:28
from. Florida publications. They’re not, oh no. All over the United States. Can you imagine
1:33
these journalists like scouring the police blotters all over Florida for these headlines,
1:40
let’s just go with the top five headlines. Number one, Florida Man through Live Gator and Wendy’s drive-through window.
1:46
There we go. Was he not happy with the new fries or [00:02:00] the burger? Was he hoping
1:53
for a whopper at Wendy’s? I don’t know. I did. Maybe it was a Pet Gator. Maybe he Gator
2:00
was the run of the litter and he didn’t want it anymore. It could be. Maybe it, maybe in Florida. I know when I go to New Mexico, you know the Wendy’s has like a green chili burger.
2:10
So maybe in Florida they have a Gator burger. I don’t know. I don’t know. Let’s keep going
2:16
though. Inmate insists syringes pulled from Rectum Mar and his. Okay, so I’m not sure,
2:21
I’m not sure if the cops planted that or not, but hey, God bless. I couldn’t imagine how
2:26
this got in the police blotter either. I really don’t know and I can’t even imagine how it
2:31
would get there to begin with. Here’s a fun one. Drunken Florida man on a segway charged with d U I makes. Hey, look,
2:38
I have flawed him for at least leaving the car at home, but my goodness, Yeah. And I
2:44
look at it, if you’ve ever ridden on a segue, I cannot imagine riding on one of those things drunk cuz I couldn’t write on it regular.
2:50
So I gotta tell you, I did it for the first time two years ago. [00:03:00] I always wanted to do it. Yeah. Just for the hell of it. It was actually really cool. And after 10 minutes
3:00
you get used to it. Yeah. I gotta tell you. Very impressive technology. It’s unbelievable.
3:06
But yes, I agree with you. I don’t think I’d wanna be intoxicated.
3:11
Florida man calls 9 1 1 says he needs a ride to Hooters. I see. Jeff, that wasn’t you during
3:17
that last trip down. It was not. It was not. It was not. I did not ask to go to Hooters. I asked to go to Wendy’s actually. Ah, you had your gator with you, but you had a Hanker
3:27
gator. The wings, maybe Wendy’s didn’t have the wings, so that’s why you called nine one. I threw the gator in the window. Yes. And then asked for 9 1 1 to come pick me up. Absolutely.
3:35
All right. Next one. Florida man attempting to time travel crashes in the strip mall.
3:42
I don’t know if he was trying to go 88 miles an hour if he was in a DeLorean or not, but I was gonna say he was at a DeLorean or a, 1975 Nova.
3:51
I’m not sure which, but Right. And then of course I got a bonus one Florida man [00:04:00]
3:56
bitten in the face by alligator while playing disc golf. Okay. I sure that’s perfectly understandable,
4:04
but I’ve seen it on the golf courses before, so why not this golf? And apparently he probably
4:09
grabbed it and took it to Wendy’s and threw it in the window at the time. All right. You’re read, you’re reading the storylines along with me. Then I got one little
4:18
nostalgia thing I came across as, and I’m like, all hey, I watched Sesame Street when I was a kid. I know it just came out or whatever, but this was interesting. So Cookie Monster,
4:28
he was actually originally created for a potato chip ad called Moos Munos, and he was so popular
4:36
that Sesame Street. Use that character and instead of potato chips gave him a love of cookies. Cookies. He was
4:42
no, no longer the potato chip monster. He became the cookie monster. The cookie monster. Hey. And Munchos are good, dude. You can eat a whole bag of those in no time. Cuz they’re
4:50
like, I’ve never had munchos. Oh don’t start. It’s like it’s worse than crack. All right. So talking about the Muno monster, talking
4:58
about Kraken food that has street [00:05:00] value. What’s your favorite cookie? Oh, gotta be chocolate chip. But my very specific chocolate chip Philadelphia downtown at the at the Redding
5:14
Terminal Market Ready Redding Market Terminal Redding, Marketo. In there’s a little coffee shop and they make a chocolate chip cherry sea salt cookie. Wow.
5:26
It’s greatest cookie ever. My wife figured out how to make ’em. When we came back from that vacation after having that, you were done for the day, you probably kicked back
5:34
and had a cigarette. Dude, no, I don’t smoke, but I just had another cookie. It was awesome, man. Just riding on a double decker bus and 40 degrees outside. Drinking
5:44
coffee and eating, eating cookies, man, it was a great trip. I will say I have two cookies.
5:50
One, if you’re gonna, if you’re gonna dunk it and milk. Chips. A Hoya is the way to go. Yeah, but my real kryptonite is, or is double stuffed Oreos.
6:00
If you wanna get to my heart, it’s double stuffed Oreos. It’s double stuffed way. [00:06:00] It’s gotta be the way to go. Now, are you a now and then are you a break? It’s also
6:08
for Dunking Nutter butter. Peanut butters cookies. All right. Now are you a break the
6:14
cookie or break the the Oreo apart and scrape it off and then eat the cookie?
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Or are you just straight on, full on cookie? I will say this. I have, but I didn’t ascend
6:25
to this side by spending that much time breaking apart and eating the cookies. Yeah, you kinda,
6:31
you, and the thing is you, it’s like potato chips, those Oreos. Yeah. You can’t have one.
6:38
No, absolutely not. That’s why don’t eat one by the time you know it, you’ve already eaten a half a sleeve of them. Yeah. That’s why I don’t eat ’em anymore. And that’s why I don’t buy, I don’t buy the.
6:48
The girl Scout cookies, cuz the little mint ones. I could literally eat an entire box
6:53
of them and I don’t need that. Oh, the thin mins? Yeah. This the, oh yeah. Not the smore. I think it was the smore cookies or was the one with coconut and the fudge stripes.
7:02
Oh yeah. Those are good too. Yeah, I hear you. All right. We’re I guess we gotta do a little work today. [00:07:00] Where would you like to go from here? I think we gotta
7:12
talk about the elephant in the room, and that is our debt ceiling negotiations. We the speaker
7:20
of the house and the other. Weirdos got together and came up with a plan and then took it to the house of Representatives.
7:32
They muled over it and passed it. And so now we’re onto the Senate and hopefully this’ll
7:37
be the last time we have to talk about this until January 1st, 2025, which means they’ll
7:42
run it right up to that time period. We got not a great deal for either side, but it was a good compromise, or the best compromise
7:52
you could get. What do you think, getting this out of the way and the potential default
7:59
out of the way, what do you think the next steps are for our economy? I know I’ve been
8:06
talking about it for, what, six to eight weeks? We both have. Based on what I saw, and if you take a look at the volume in the market
8:13
yesterday, specifically on the s and p I think we might have gotten a flush out in the [00:08:00] last two days. Yeah. Meaning, We’ve exhausted the top end of the top 10 s and p stocks.
8:26
As a matter of fact, somebody came up with the s it’s not an s and p 500 anymore. It’s an s and p 10, and it’s an s and p four 90. Yeah. I’m like, you know what? That’s
8:34
pretty good. Yeah. And I think we’ve n we near topped out a kind of a blow off top.
8:41
I think we’ve seen that. I love this interesting to get your slant on it. Ai. They’re like
8:49
looking oh my God, we just dug up the ground and we found ai. What a great, a AI has been around for decades. Yeah. All of a sudden, like money’s been rushing
9:00
into it. In my opinion, all the dumb money has been rushing into AI in the last two weeks.
9:05
The smart money was in early on. Yeah. They’ve doubled it at this point. Will AI be the future?
9:11
Of course. Absolutely. We’ve absolutely been talking about it for 30 years, since Terminator two, for crying out loud, came out in the early nineties. But, realistically, AI will be the
9:22
future. But I think all [00:09:00] those stocks, the majority of them, including Nvidia, which is Chip and the the main software stocks, I think we got the blow off top.
9:31
I think the top is in on those meaning that I think. Now we start to get the pullback.
9:36
How much? Don’t know, but don’t forget, tomorrow we have the the may employment number. We
9:43
have all of the main. Economic numbers coming out before the June fed meeting, which I know
9:51
last week I said there was at least a 50% chance of a 25 per basis point hike.
9:57
I think we’re 70 to 80 now. I understand, and I just heard yesterday that all these
10:03
rate decreases that they were talking about in the end of the year are now off the table. Come on. We knew that wasn’t gonna happen to begin with, but it’s, I just love the markets
10:15
where they sit here and Oh, yeah the economy’s gonna slow and then they’re gonna start reducing
10:21
it. No, they’re not. And I thought, like I said, two weeks ago I said, Neil Cash Carry, I think
10:29
from the Minnesota Fed Yep. Really laid the cards out on the [00:10:00] table. And he is we’re going to continue to push. The interest rate’s up because we’ve got, basically we’ve
10:42
got cover because the, the other mandate, which is full employment, we’re at full employment.
10:49
People, anybody that wants a job can have a job at this point, literally. I agree. As
10:57
a matter of fact, the other interesting thing that they had talked about was we, a lot of
11:02
people don’t realize, the average person doesn’t realize that just because the Fed increases rates, It doesn’t have an immediate effect.
11:09
It takes a minimum six to nine months. Really? Nine to 12. Yeah. And we started to see that
11:14
cuz they started what, may, June last year. We started to see the effect of that in the last three months. Yeah. And the credit tightening and mortgage rates hovering at seven, 7% right
11:24
now is slowing parts of it down. And with the credit tightening at the banks, it’s gonna hit the summer. I truly believe
11:32
we, we have a divergence here because we mentioned this last time that. The summer travel[00:11:00]
11:41
the it’s book that’s already been paid. Air airline travel has already at pre covid levels. Hotels are booked, vacation spots are booked. So you’re gonna get people just going away
11:51
for the summer and just spending money, which is great for the restaurants, hotels, and tr and hospitality community. But the other 490 stocks in the n the s and p 500 are flats
12:02
and negative for the year. Yeah. And they have all come out and guided lower. Over the next six to 12 months, and now maybe
12:10
they’re setting the bar lower so they can jump over it and look good at their quarterly earnings announcements. But, I’m sorry. We’ve gone through too many economic factors in
12:20
the last six to eight episodes here that you can’t ignore the facts despite the consumer.
12:26
But after the summer, with all that spending, it’s gotta peter out at some point. That’s
12:31
why we’ve been talking about September and October for a significant pullback or even for negative G D P growth. And I think, when you see home Depot numbers, I [00:12:00] think
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Home Depot is the Lowe’s. Yeah. Home Depot and Lowe’s are that, that touchstone of the real estate economy. And
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they just got, polex this last few weeks here with earnings. I think that’s the beginning
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of that kind of tightening of the purse. From people. They’re still gonna spend money on
13:03
travel and getting out and, I think unfortunately most of the travel from what I’ve seen is
13:09
international. So they’re spending money other places instead of here. And, they’re looking at, okay, I’d
13:17
rather travel than fix up my house at this point. And I think you’re seeing it there. The consumer’s purse is limited and they’re gonna put it where they. Feel is the best
13:27
place right now. And they’ve worked on their houses the last few years, so it’s interesting to me. And,
13:34
if we see the real estate slowing down and I think in certain markets it is, from what
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I’m seeing, in, in the Austin market where I live, it’s fantastic right now. It’s still
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doing extremely well. I don’t know about Phoenix.[00:13:00] Very hot. Yeah, it’s still hot. Not crazy hot,
13:52
but it’s still hot in many areas. Yeah. And you’ve got a lot of people that are relocating from California over to Phoenix and things like that. The Nevada markets, Las Vegas is
14:03
starting to slow pretty significantly. The California markets are slowing really significantly because of the outflow of people.
14:12
I think we’re at the very beginnings of that real estate cycle too, where there’s gonna be some challenges. And the other thing to look at it with the real estate too, and this
14:21
is why Lowe’s and Home Depot are a fantastic canary in the cold mine. Yeah. And in the coal mine. Excuse me. And that is the following. People that wanna move
14:32
but are in low mortgage, have low mortgage rates aren’t moving because their mortgage rates would more than double. Yeah. So many of them have been taking the last year or
14:41
so and putting money into their own houses. Where do you mainly go for those supplies and materials? Home Depot and Lowe’s. Yeah.
14:49
And if they’re showing a slowdown, [00:14:00] meaning people have either expended their budgets into their own houses or they don’t have the money to spend, remember we were
15:00
talking about credit card balances, reaching and breaching the 1 trillion level.
15:05
That’s a bit ominous, at least short term, shorter medium term. Not a media term, because
15:12
necessarily because we already see what’s gonna happen in the next three months with hospitality and travel spending. But if people put aren’t spending money in the house and
15:20
they aren’t moving, there’s gotta be a slowdown somewhere. Now. Yes, there, there’s pockets already of the United States that are in a recession,
15:28
and I don’t know if you saw this I don’t have the date. It was either the it might have been over the weekend or the end of last week. Germany officially just went into a recession.
15:38
Based on economic factors of being in a recession. Yeah. But there are states in the US that have been in a recession for over a year.
15:46
Yeah. But warm weather states like you and I and other key areas of the country that are, producing still and have high paying jobs. [00:15:00] They’re still going strong.
15:59
Manu, big manufacturing states, big farm states they’re all hurting.
16:04
Yeah. They’re all hurting. And we’ve seen that on the data. We’ve looked at the last few weeks. Philly, the Philly Manufacturing Index, the New York, the Richmond Fed, all
16:13
of those are showing slowing. And pretty significant reductions there. While, we just saw Compu
16:21
consumer confidence and consumer sentiment this week still off. Still above what the estimates are. So I think, you’re starting to see it in the manufacturing
16:31
of, okay, that’s slowing down, China’s back online full on at this point with, I think
16:39
there’s another covid strain that’s popping up there, but still full on manufacturing
16:45
we’ve got cheap goods coming in again to the country. That’s, and they’re not even back at full capacity. Yeah. Yeah I think, looking forward,
16:56
a lot of people wanted to strangle me when I was talking about it a couple of weeks ago, but I think we’re at least gonna have one, if not two more rate hikes. [00:16:00] Yeah.
17:04
Now, During the summer, I don’t think as many people will be paying attention, cuz between the middle of July and the end of August.
17:10
Wall Street for the most part is checked out on vacation, so we will get much more volatility during that timeframe. But I think the more interesting part to all this is that until
17:21
the job market slows, and until inflation truly dips under five and a half or 6% with
17:30
some type of a precipitous pullback. They’re not gonna stop. They’re not. Yeah. Now we may not see a 50% 50 basis point rate
17:39
hike, but we could see one or two more, 25 basis point rate hikes this summer, whether
17:45
people like it or not. And at that point, that may be the straw that breaks it. But
17:50
again, the Fed has their mandate and all the extemporaneous factors they’re not paying
17:58
attention to I shouldn’t say that. They’re looking at it, but they have a myopic focus to say, Hey, we need to bring down inflation
18:05
[00:17:00] and we’re not done yet with the fed rate hikes. Yeah. So whether people like it or not, get ready, buckle up. And their dual mandate is we need to reduce inflation
18:14
and we need full employment. We have full employment at this point. And really no. Change so far that we’re seeing? Yes. Okay. We’ve gotta fight inflation and
18:26
that their tools are, raise interest rates and open market activities. And they’ve already
18:32
reduced their balance sheet pretty significantly over the last year. I know you follow this economic factor.
18:38
I don’t follow as closely, but the Jolts report just came out I think earlier this week. And
18:43
it was up, meaning the job openings w went up. Yeah. Now. But that’s after a really,
18:50
I know the Goldman sax and some of big institutions announced some major layoffs, but the jolts
18:55
went up. I didn’t really dig into it as far as where those job openings are, whether they’re
19:02
low, medium paying jobs or they’re high paying jobs. I didn’t really pay attention to that, but I think that did shock a lot of people to
19:09
say, Hey, [00:18:00] folks, we’re still hot. And as soon as that jolt report came out, All the expectations of a possible rate decrease at the end of the year dissipated? Absolutely.
19:18
Yeah. Absolutely not. And that’s the first time it’s jumped up in almost a year. Wow. We went from at the absolute peak, which was around 12 million jobs. Yeah. We dropped
19:30
down into the 9 million range and we’ve been in that steady decline into nine, and then
19:35
it popped up. Up to 10 or up to 10, and you know that it, it’s an interesting thing and
19:40
I honestly, I didn’t really take a look at that. Before next week I’ll actually get in and dig into it a little bit and see where those
19:48
jobs came from. But, once again, All right. Now there’s more job opportunities out there.
19:56
The unemployment is running around what, three and a half, 4%? Yeah, three most at 4, 3,
20:01
5. Yeah. So effectively, anybody that wants a job could potentially get one at this point.
20:09
Maybe they don’t want those jobs, but the reality is, okay, this is, it’s an [00:19:00] interesting time because once again, I think the Fed’s going to continue to do what they
20:18
believe is the best thing for the country, which is, okay, let’s slow things down.
20:26
Even with the debt ceiling negotiations with everything that happened out of this bill.
20:31
I don’t think there’s, we’re still at 40% higher than we were pre pandemic as far as government spending. So with that fiscal side of things, it’s just not gonna slow the economy
20:43
down, and I know you’ve still got a lot of push. Yeah. And I know this is gonna sound political and I’m not trying to be at all. Yeah. But
20:49
with as many job openings as why. Why haven’t they cut down the, unemployment insurance
20:58
payouts in half As far as the amount of weeks? Yeah. Why are they still doing other social
21:04
programs for handouts for people that aren’t working when there are more job openings and
21:09
people to fill those jobs? Yeah. How many. Tens of millions, hundreds of millions, or even billions of dollars,
21:16
could we put [00:20:00] potentially into paying down our debt over the next six to 10 months
21:22
by just cutting back on those programs to say, go get a job. Yeah. By you saying there’s
21:28
nothing out there. Obviously we have a communication problem here.
21:34
We have a failure to communicate quote, quoting one of our favorite movies back in the late sixties with Paul Newman. But we have 10 million of those sitting out here that you know are
21:44
open and available. To you. Yeah. Yeah. So whatever the amount of weeks that you’re gonna
21:49
collect unemployment, we’re cutting it in half because you gotta go get a job. If we were in a recession, and if that unemployment rate was seven or 8%, it’s a different story.
21:59
Yeah. But I’m sorry. And I just don’t think there’s political will on both sides to do
22:06
something that’s, Specific and drastic. It’s a shame. And I, and even with what got negotiated
22:13
with work requirements for people on government programs and things like that, I still don’t
22:19
believe that’s gonna happen. They’ll be ways that [00:21:00] the agencies weasel around all that stuff or just they
22:26
don’t monitor whether people are working or not. They, I don’t think they have the people
22:32
to even try and monitor that. And, it, it reminds me of Of history of the world, part
22:39
one. Did you what? What do you do for a living? I’m a standup philosopher. Oh, a bullshit artist. That’s
22:46
right. Did you bullshit this week? Cavus? Yeah. Cavus. 1981. That movie was great. Flick.
22:52
And you wanna know something? Mel Brooks? God bless him, still alive in his early nineties,
22:57
offended so many people you would think, being a Jew that, he was doing a lot of anti-Semitic.
23:04
He was making fun of everybody in that movie. Let’s just be honest. But he offended Hollywood so much that they did not let him make a part two. I know. Instead they let him make Space
23:14
Balls. Yes. Which was his last really great movie. That is exactly true. And you gotta fit Blazing Saddles in there too, because Oh yeah.
23:22
Yes. Actually, I will tell you this about Blazing Saddles. It’s too long for a conversation today, but if [00:22:00] you get the D V D, it’s got the director Audible. Mel Brooks
23:33
is talking over in the first hour and a half movie, and it is fantastic listening to him
23:41
explain how, first of all, the writing of the script, because originally before Cleon
23:47
little. Richard Pryor wrote script play that role. Yeah. But him explaining how difficult it
23:53
was for him to convince Hollywood to make him to let him make that movie because of
24:00
one scene. Do you know which scene that was? Probably the sheriff riding into town scene
24:05
would be my, Best guess. Nope, that was probably top five. Yeah. But the number one scene was when they were all
24:12
out on the prairie sitting around the fire making beans. Yes. And them all having a gas attack. Yes. Hollywood s Hollywood censorship said you can’t have that scene. So it ended
24:21
up that they tested the movie. Now we’re getting into it. They tested the movie and that was the audience’s favorite scene. Scene. Cause you know they
24:29
were all [00:23:00] adolescents, right? Yes, probably. And they had to let, they had to leave the scene in. That’s how insane Hollywood is. I don’t, you don’t have to, you don’t
24:36
have to be an adolescent. A fart scene is just absolutely funny. If you’re 90 or if you’re. If you’re 10 years old, it’s, we’re all 10 year olds. Yes. In
24:46
there. Yes. More men than women. Or at least that women that would admit it. But that’s, no I agree with you. But yeah, if you ever get a chance, I dunno if it’s on YouTube,
24:54
but it’s on the dvd v d, you just gotta listen to Melbrook first. He’s just great to listen to. Yeah. But to him, talk about the movie. The script and
25:05
how it was made is just, it’s just magic. That’s all I can say. I’ll tell you what,
25:10
we Go ahead. We own the we own the whole collection the Mel Brooks collection and the other funniest
25:17
one is listening to him talk about the behind the scenes of Frank of Young Frankenstein.
25:24
I never listened to that. Okay. God awfully funny. It is just hilarious. And listening
25:30
to that and then going back and watching the movie, I [00:24:00] caught a whole bunch of things that I had never caught. I’ve seen the movie literally a hundred times and there
25:38
were things I didn’t catch until I listened to that. And then just all the crazy little stuff that happened with the Oval Teen and all that type
25:47
of stuff. And he just talking about Claris Leach Man’s mastery of just, that funny pauses
25:55
and. Almost hurtful expression and all this stuff. It’s just, it was great. And what, and as she wasn’t young Frankenstein.
26:02
She was even better in high anxiety. Yes, she was as nurse as like the nurse Rat ratchet,
26:08
one now. And her and Harvey, Carmen, are just classic scenes. They stole the movie in every
26:14
scene that tho those two were in together. Probably the most underrated movie of hers too, cuz I absolutely love high anxiety.
26:19
I just think it is absolutely one of the fun. 1977. Great flick. Great flick. I’ll tell you what, let’s wrap up. I just wanna. Share something on the debt ceiling history. And
26:30
I think it’s something that’s very interesting because we’ve talked about it. Whether you’re
26:36
blue or red in the middle, doesn’t matter. This is the [00:25:00] problem because the number one job for politicians is to get reelected.
26:43
They’re not fiscally responsible. Most don’t have a business background. Certainly they’re not, academic economist. But this is the problem. If you remember in the late eighties, early
26:55
nineties when Japan’s economy was just thriving. But a lot of why they were thriving was they were printing money and buying everything
27:04
in site, and they had good productivity in the manufacturing and technology, but their
27:09
they, we always laughed, or they, we always talked about how high their debt to G D P
27:15
ratio was. Yeah. Because if you’re owing that much money, Eventually your economy will collapse.
27:22
As a matter of fact, the Nek, which is the Japanese stock market index, similar to our
27:27
s and p 500, just hit a 30 year high. Meaning where they were 30 years ago, they just surpassed
27:36
it in the last month. Yeah. If you take a look at this chart here, going back to [00:26:00]
27:42
1970, How the hell can we continue to spend more money than we’re taking in?
27:48
And there’s only two ways to fix it. And I don’t think the political is where the political will Is there short term or long term that you gotta raise taxes and you gotta cut spending
27:59
and if any politician votes for that, they’ll be out of office. That’s exactly right. But
28:05
instead, this is gonna continue to go up. How are we gonna be able to compete? I and maybe not our generation, we’re in our fifties,
28:14
but the next generation, holy crap. The generation after we’re gonna lose recurrent reserve currency
28:20
status. What do you think? Oh, yeah. I, and I think, if we look at history and we were
28:25
having this discussion before we got on camera today, you know about Britain.
28:31
And, the British were the reserve currency, were basically the economic leaders of the
28:38
world. Yep. Up until World War ii. And, I think they’re somewhat arrogance not just
28:45
somewhat arrogance. [00:27:00] They’re arrogance and in some cases it’s a model of what we’re experiencing right now.
28:51
We need to be realistic about this because it could hurt us pretty significantly if we
28:56
lost reserve currency status because, Our currency is, the basis of energy prices of
29:04
gold, of, they, virtually anything in the world that’s publicly traded is traded based
29:10
on the dollar. They said within five years of England using losing the reserve currency
29:17
status, their market got cut in half and their value of their dollar, their value of their currency, yeah.
29:23
Got cut more in half. So I, is that a. Historical, prerequisite of what we could be in for as
29:33
far as what we could expect. Anything is possible. China has wanted to be the world’s reserve
29:39
currency for decades. Yeah. And they’re pushing towards it. Again, Britain got to the point
29:46
where they were very stogey and very stubborn about how they should.[00:28:00] Build and whatever, and they got ravaged by World War ii and they had to borrow, which
29:55
is another reason which contributed to them losing the reserve currency. Folks we’re headed
30:01
in that direction. Yeah. And I think the difference with us is we tend to be, the way our economy
30:09
was set up we tend to be very pr, we tend to have higher productivity.
30:14
We tend to be very innovative. But I’m I worry that we lose that, we lose a little step to
30:20
it because we’ve got a lot of people in that, in this world that, that don’t believe that,
30:27
that’s a good thing necessarily. And I totally disagree. I think that our natural freedoms,
30:33
our constitution makes us very unique in the world. And it ensures that. The reason a lot of people want to come here is because of the world
30:46
that we’ve created inside the United States. And if we lose that, I think we, we lose a
30:52
big step. But, I don’t think that’s tomorrow. I. But it’s a conversation that needs to continue
30:58
to be [00:29:00] had and certainly it’s definitely a possibility. Yeah. And certainly when we elect, elected officials, we need to be considering, okay,
31:06
why are you getting elected and what are you there to do? And if you don’t do this, if
31:12
you don’t focus on, fixing these problems, all you’re doing is kicking the can down the
31:18
road to, People’s kids and grandkids and making this problem worse and unfortunately creating
31:26
a world where they see the world as Hey, the government’s just a big handout waiting to
31:34
happen. I think, a big the big red wave that was supposed to have happened in the fall, I think two
31:40
factors affected that. The abortion argument and certainly the extremist student the student
31:50
debt side of it. That really activated the young people because they saw, Hey, this is
31:56
the greatest thing ever. I’m gonna, I went to college and now I’m gonna get part of that. Taken or covered and taken
32:03
away from me or paid off for me? The [00:30:00] reality was that was never gonna happen. It’s
32:11
illegal in a lot of places. Actually, I believe that’s what they’re passing. They did leave some of that in. But what peop some people don’t realize is that, Student
32:20
debt isn’t three or 4,000 with many of these people. Yeah. It’s 50, 75, a hundred, $150,000
32:25
or more. Yeah. And what they were proposing to pay off in student, it’s 10 grand. That was, I think 10,000 or less.
32:32
What is that gonna do? It does nothing. Yeah. Get a job and pay it down or. Get an education
32:41
that is really good, but you don’t need to spend 200,000. But you can’t tell people that because they’re gonna do what they want to do. And it’s, why did you go to, why did you
32:50
go to the $200,000 a year school to get a $50,000 a year job? That’s the reality of it. And that’s a whole nother discussion down there. Forget about
32:58
getting married, buying her house, or having kids. Yeah, just pay off your student debt is your kid. Yeah. For the next, yeah, for the next 60 years. It’s gonna hang around
33:06
like a pet. But yeah, like I said, I think at least we’re, [00:31:00] at least we get
33:13
the whole default off of the, off the. World now We need to, now we need to really focus on the markets and what’s gonna have
33:22
some effect. And I agree with you. I think, what we need to be focused on, or we will
33:27
probably end up talking about most of the summer is going to be what’s going on from
33:33
the company side of the world to the consumer. And I think the consumer is the key there. If if the consumer starts feeling. It more
33:43
and more tightened up on, and the effects of the economy rolling into the consumer.
33:49
That’s really where we’ve gotta be the most concerned right now. And I don’t think that we’re gonna see the Fed stop anytime soon.
33:56
I agree with you. I think we have, I. 50 more basis points, at least that is gonna hit us
34:01
before year end. Yeah. I think the next two to three weeks, and certainly we’ll have plenty of fodder for conversation and it’ll get more interesting. Hopefully hopefully people just
34:13
don’t stick their head in the sand and they pay a little bit more attention, but to absolutely to be [00:32:00] seen.
34:19
Absolutely. And we’re going into a presidential election year, so it just gets all kinds of
34:24
fun. At that point, Seth, it’s gonna be a bloodbath. Yes, it will. All right my friend. Thank you. And folks, thank you for being on here. We we do these for you, so certainly
34:35
make sure that you subscribe to the channel, hit that little notification button so that you know when these things come out.
34:40
And most definitely, make sure that you give us a comment, share give us your favorite
34:48
Mel Brooks movie. I’d love to hear that after our little weird discussion on that today.
34:53
Thanks a lot. We’ll see you back here next week, and we do these every Thursday. Thanks a lot, and we’ll see you on the next time.