Episodes

Dan Ferris: Hello, and welcome to the Stansberry Investor Hour. I'm your host, Dan Ferris. I'm also the editor of Extreme Value, published by Stansberry Research. Today, we'll talk with Joel Litman. He's the chief investment strategist at Altimetry. He has a completely different view on things, I think you'll love it. In the mailbag today, lots of great stuff – options, investment planning, gold, and the U.S. dollar – a great question on the U.S. dollar. Remember, you can call our listener feedback line at 800-381-2357. Tell us what's on your mind to hear your voice on the show. For my opening rant this week: Well, it looks like the headlines are starting to catch up with me. That and more right now on the Stansberry Investor Hour.

The headlines are catching up with Dan. Dan's been bearish and bearish. And even though the market's been down, people have been talking about the Fed pivoting so that they will be cutting rates instead of raising it and "Where's the bottom?" and all this stuff. Now, it's a little different... now, on the front page of the Bloomberg website this morning, it says, "Bank of America Sees New Lows for U.S. Stocks as Inflation Shock 'Ain't Over.'"

Then there's another little headline, "U.S. Dollar Only Place To Hide in 2022 as Risk Assets Sink, Says Citibank." So, yeah, other folks are starting to catch on, and there's another – of course, you've probably heard about FedEx. A Barron's headline says, "FedEx Has a Message on the Economy. Wall Street hates it." I think the stock actually had its worst day on Friday. It was down 24%, and they changed their guidance. Actually, they just withdrew their full-year financial guidance... they really disappointed everyone.

Management said global volume softness was a problem... like globally, their business is global. It's kind of an economic bellwether on the global economy, and the volumes were soft, and Barron's piggybacked on that and said the economy is slowing, costs are a problem, they're closing 90 locations, they're slow to hire – I mean, it's a whole bunch of stuff. The stock just got murdered... this big-cap bellwether company down 24% in one day... reminds me of what happened to Facebook a couple years back.

Like about a year before that I had warned people, this can happen to big-cap, like blue-chip – and I'm doing air quotes here – blue-chip stocks, they can get absolutely obliterated in a single day and folks forget that. One of the things that a relentless bull market – or a really huge speculative mania like we've seen since the COVID bottom – one of the things that gets beat out of you is the idea that stocks can just get creamed in a single day like that with a big blue chip down 24%.

People figure out "Oh, well this is safe." I mean, and there's actually an article in the Wall Street Journal that says investors are pouring into U.S. stocks to avoid greater turbulence overseas. Everything else is even worse than the U.S., but it ain't great in the U.S. Like, if you think this is the safe haven, I don't know, I hope you're right, actually. Because if not, we're in for a lot more pain. I hate to agree with Bank of America, but I think they're right. I don't think the inflation shock is over, and I think that's been a consistent problem.

I've said this before, I'll say it again: Inflation is a stickier phenomenon than that. Inflation... it hits people for longer and harder and takes longer to wind its way through the economy. In this case, it started when government, especially the U.S. government, basically borrowed. When I say "borrowed," you should hear the word "printed trillions of dollars to try to get out of the post-COVID funk." That caused the price of a lot of stuff to go up because in addition to printing the money, there were also shortages – things were locked down so we had less of certain goods and services.

All that new money coming into the system pushes up the prices of the existing ones, and it gives us what we've seen: 8%... 9% CPI inflation. It's people in the pocketbook, and people change their plans, businesses change their plans. I've said this before: Inflation is bad for everyone. Any time somebody tells me, "Hey, inflation is good for this business, it's good for gold stocks, it's good for whatever," I disagree. It may cause the price of gold or something to go up, which hasn't really done much this time around. But it's not good for anybody's business. It makes everybody's costs go up.

It's not a good thing and now finally, the headlines are starting to reflect where I've been for over a year. Normally, that would cause me to go, "OK, it's over. Everybody's bearish now, so it's over." I don't think that's true. In the short term, if we get some kind of a bounce or a bear market rally or something, yeah, that would surprise no one because bear markets are notorious for sucking bears in and then rallying and sucking bulls in and falling. I mean, it tends to be bad for bulls and bears alike, because it's just such a volatile time and it's difficult to trade.

I did this... I showed this in an issue of Extreme Value some years ago. I used the example of Apple during the dot-com bust. During the run-up, the dot-com boom –say, from I think it was like '98 to the top in 2000 and then down – yeah, there were huge moves. But man, it would have been nearly impossible for the overwhelming majority of people to trade them... b as soon as you get the momentum signal, it reverses direction. Of course, that's sort of what's been happening here in this bear market. They're all like that. They're all brutal, it's really tough.

I think just the fact that everybody's bearish right now, will we see another rally? I think stocks have been down... I just saw four out of five weeks or something like that. Sure, there will be more rallies and if I'm right, there will be bigger rallies as the market goes lower... because as the market goes lower, people become more bearish, they become more hesitant so it takes a bigger rally to suck them back in. It sounds perverse, but that's the model, that's the mental model that I would use. The market is sadistic and it will act, especially in a bear market, sadistic.

It will act in such a way as to harm the greatest number of people. There's no way to avoid it, really, unless you're just completely out of the market altogether. I never advise that because as bearish as I may be, and as often as I may refer to historical examples, I don't know the future, and neither does anyone. Nobody knows how things are going to be for the next 10 years. I can't tell you whether the stock market's going to be up or down, whether it's going to be up or down 10 years from now.

Historically speaking, when things have reached this point, we have a difficult several years, and it takes several years for the market to make a new high. But hey, I've talked about this before, too. It's a high-water effect. Just because it happened in the past, the lows and highs of the past are no meaningful limit to the lows and highs of the future. It's just like a high-water mark in a town where there's been some flooding. Just because you look at the high-water mark halfway up some building, I promise you it can be higher. The lows can be lower, the highs can be higher.

Since humanity is going to keep getting out of bed every day and going to work, the highs will eventually become all-time highs, we will make new highs, the market will rise again. Whether it does it in the next six months and makes a new high or in the next six years, that's a bigger question. The reason why I'm bearish and cautious and trying to help people out right now with this is because I think it can destroy you. These times can destroy you as an investor. Most of the time the market goes up, there's little corrections you don't have to worry about it.

But then there's times like this, where we could be at the beginning of an absolutely brutal bear market. Historically speaking, I think there's enough evidence to suggest some likelihood of being at the beginning of a brutal bear episode here. People behave really badly. They just do... they sell out at the bottom, basically. That's the one thing that I don't want everyone to do. When the market draws down sharply like this, you don't hear me telling people to sell their stocks. I remind them what I've always said, which is: keep a truly diversified portfolio and prepare for a wider-than-usual range of outcomes.

Usually, the range of outcomes is "When is the market going to make a new high?" That's a narrow range of outcomes. But a wide range is: "Do we go into make new highs within the next year, or do we go in to make new lows?" Whoa, new lows from here, that can be brutal... new highs, wow. I don't think anybody's expecting that right now. Prepare yourself, have plenty of cash. Generally speaking, "plenty" means 20% to maybe 50% of your equity portfolio... an amount equal to that. You got to decide. You know you better than I do, so you decide what's right for you.

But if we get lower equity prices, you don't want to be without plenty of cash. If we get higher ones, you don't want to have sold all your stocks. I still think you should own some gold and silver, I'll answer a question about gold and silver in the mailbag today, but I still think that you should own some gold and silver. I think it's been around for 5,000 years, and I think it's going to be around for a few 1,000 more. If you're worried about it because the short-term performance is not what people would have expected with inflation numbers being what they are, I think you should be less worried about that.

I think you should be more worried about "Am I adequately diversified?" And that includes holding gold and silver. I'm going to keep it short and sweet today, OK. Things are getting serious, lots of other people are getting bearish. It's hitting the headlines now, and I still think there's more downside. Will we get a big ratcheting rally – to make me look like an idiot again – almost guaranteed? But I still believe that the historical examples of the mega-bubbles of 1929, the bear market from 1929 to 1932, and the bear market from 2000 to 2002... also, the Japan mega-bubble bear market from 1989 to 2012.

These are, roughly speaking, minus 75 to almost 90% events. If we're in something like that, man, do we have a long way to go. Just take your time, all right? I'm going to leave you right there because I really want to get to this interview I want you to hear. I'm dying for you to hear what our guest has to say today. He's brilliant... He sees things a completely different way and has a completely different sort of a method that he's going to tell you about today. His name is Joel Litman. Let's talk to him. Let's do it right now.

Please pay close attention right now. The next 30 seconds could make up for all your stock market losses this year and even maybe save your retirement. On September 22, you'll have a rare chance to hear from two Wall Street legends: Marc Chaikin and Joel Litman. Marc spent 50 years on Wall Street, where he worked alongside the likes of Paul Tudor Jones, and invented one of Wall Street's most popular indicators – a stock-picking system that appears on every Bloomberg terminal in the world today.

His biggest fans include CNBC's Jim Cramer, who said he's learned the hard way never to bet against Marc. Meanwhile, Joel Litman is a forensic accountant who spent the last 30 years denouncing Wall Street. He predicted the crash of 2008 months before it hit. His insights are in such high demand that he's been invited to speak at Harvard, the FBI, and even the Pentagon. What Marc and Joel are going to share with you on September 22 could make or break your retirement... a way to make five times your money even if the market crashes another 20% this year. And they say what's coming before the end of the year will create and destroy fortunes, depending on which side you're on.

Let's face it, the stock market has been a minefield this year with the biggest sell-off we've seen in 50 years. Thanks to inflation, even cash isn't really safe anymore. Your money is losing value even as we speak, at a rate we haven't seen since the 1980s. If you want to survive this disorienting market, then don't miss Marc and Joel's big reveal on September 22. On that day, they'll be giving you a financial lifeline that could erase this year's losses for you and trigger a wave of potential wealth that's so powerful it could save your retirement.

You don't have to wait until September 22 to get started. For a sneak peek of Marc and Joel's big reveal, just go to September22Warning.com. That's September22Warning.com. It is time, once again, for our interview and today's guest is Joel Litman. Joel Litman is the chief investment strategist at Altimetry. As Altimetry's chief investment strategist, Professor Joel Litman – "professor," mind you – advises individual investors in equities, corporate credit, and macroeconomic strategy.

He is also the president and CEO of Valens Research. Joel has taught or guest lectured at Harvard Business School, the University of Chicago Booth, the Wharton School of the University of Pennsylvania, London Business School, Shanghai Advanced Institute of Finance, and others... as if that's not enough, others. Additionally, he helped build Credit Suisse's HOLT University and Driehaus – I hope I'm saying that right – College of Commerce at DePaul University's Center for Strategy, Execution and Valuation MBA concentration. With that, Joel, welcome to the show.

Joel Litman: Thank you, Dan. How are you doing, man?

Dan Ferris: Good.

Joel Litman: It's good to be here again.

Dan Ferris: Yeah, it's been a while. Because it's been a while actually, I wonder if we could just do a classic first question that I sometimes like to do. If you and I had met in a bar and finance came up and I said, "Oh, what kind of investor are you?" what would you tell our listeners?

Joel Litman: Well, I'm definitely of the Ben Graham, Buffett, Klarman, Mitch Julis value investor ilk. But you mentioned that I helped build this program at the Driehaus College of Commerce, and Richard Driehaus was probably the greatest for the last 40, 50 years... he passed away recently, very sad. But probably the greatest growth in MO investor ever, and I did some work with him also. I'd say I'm researching... I'm whatever my clients need.

If I were to launch a fund, it'd definitely be a value-investing fund. But that said, I have clients that sometimes say they want growth stocks, they want momentum stocks, they want things that are a bit more trade oriented. When that happens, I'll adjust our research, I'll tune our research into what our clients want.

Dan Ferris: OK. Maybe tell us a little bit about your firm, Altimetry. You transferred from institutions, basically, to launching this separate firm Altimetry. How did that come about?

Joel Litman: Well, helping the really rich of the world get richer is a nice, lucrative business, and it certainly pays the bills. But I remember someone told me years ago... they said, You could still do well by helping individuals and families because if you get a lot of clients paying you a small amount of money, they can add up to be as much as a small amount of clients, relatively speaking, who pay you big sums of money." We launched Altimetry in partnership with Stansberry, and it's been fantastic.

We're reaching all kinds of people that I didn't reach before – it was a big switch. Probably when I was on your show, Dan, about three years ago, was just about the time when we made that, I'll say, switch. We're still servicing institutions. I mean, two or three of the biggest 300 money managers in the world are reading our work and I can name who... I can name what they're reading. But it's been wonderful to open up this branch for individuals and families because we get different questions, we get different requests.

Some of our best stock ideas are microcap ideas or small-cap ideas which the big institutions are too big to invest in. But for a lot of our individual and family investors, it's just the right size. It's opened up some new markets for us also – not just in customers, but new parts of the stock market that we can focus our research on. That is a very different kind of research than anything you see on Wall Street or elsewhere.

Dan Ferris: Very different from Wall Street, but for individuals. That's cool.

Joel Litman: Yes, sir. Yeah, it's individuals and families and the newsletter business, which is the easiest way – newsletter plus a database online that people can access and punch in their own companies and see how their own portfolios do. It's a nice business.

Dan Ferris: Yeah, that's –

Joel Litman: It's different than the institutional work.

Dan Ferris: Very cool. I love that whole "punch in the ticker and get me a whole bunch of information" thing. People love that. You are one of the few people who can really say that they called the 2008 stock market drop and the 2020. Of course, given recent events, everybody listening to this is dying for you to say, "Well, what does the system say now Joel? What's next?"

Joel Litman: Of course. You see, Dan – look, I'm pretty sure that we're in disagreement... maybe not violent disagreement on this, but that's because I am with a lot of other strategists. But in 2008, I was at a CFA presentation in New York City... there's a good chunk of big institutional investors in the room. No families, no individuals at the time... we were just purely an institutional research shop in terms of clients. We were showing what was happening to corporate credit. Jesse Livermore knew this. Buffett and the greatest investors know this.

Ben Graham mentions the word "debt" or "credit" more than 200, 300 times in Intelligent Investor and Security Analysis. Going back to that Ben Graham was the professor and teacher of literally the greatest group of investors that have ever lived, from Buffett to Munger to Klarman to Tweedy Browne to Shelby Davis and the Davis Funds. When you look at that lineage, you find that understanding corporate credit is absolutely the canary in the coal mine – corporate credit and national country credit is the canary in the coal mine of any major equity bear market and pretty much history.

In 2008, one of our big calls was that we're showing that the stock market had fallen on 12%, 13% – this is early 2008, first half of 2008 – stock market had fallen 12%, 13%. Not bad, and people are saying, "Oh, it's just a correction, whatever." We showed corporate credit signals that were scary. They were scarier than what you might have seen in 1929, 1930, 1931. Really scary numbers, and we said, "It's not going to get better anytime soon... this is going to be a disaster." And that's what the signals were saying.

You mentioned 2020... When we said the market looked toppy in February of 2020, we weren't predicting that the pandemic was going to create that massive crash. But we did think that the market looked expensive and what have you for all kinds of reasons. But corporate credit wasn't one of them, it wasn't. At the bottom of the crash in April of 2020, I think what I'd rather be known for, and it's very public – you can Google it. In March, we called a long on the stock market... March of 2020. We reiterated in April of 2020.

I did some talk shows, as did my partner, our Director of Research Rob Spivey, in our business. April, May, June, we reiterated over and over again, how the stock market was in a K-shaped recovery. There are certain stocks that were going to do very well but overall, the S&P was going to recover. The reason that we had such conviction then to set up to what's happening now is corporate credit was unbelievably strong. And frankly, we didn't see any issues with national debt either. That is the situation right now, Dan.

Right now, U.S. corporate credit is unbelievably healthy. I mean, you see people online saying, "But there's more corporate debt outstanding than ever before, even more than 2008." We're like, "Yeah, but the coverage ratios, the corporate earnings and cash flows able to service that debt is even higher than it's ever been, by like a lot more." Even though debt may be percentages higher than it was in 2008, – corporate debt across the board for all publicly listed companies – you find that the cash flow ready to cover that debt service and the cash on the books, by the way, is multiples bigger than it used to be... multiples.

Any basic credit research looking at these companies would say these companies are not at risk of default. We don't have massive bankruptcies on the horizon, which always accompany, all the way back to 1929 or 1907 or in the 1800s. You always see corporate credit crises at the beginning of any massive long-term bear market. The 20% correction that we've seen – yes, technically, it's a bear market – is 20%. But being 20% down after the market has risen 75% from the bottoms of March and April 2020 is not the same thing as a market that's sideways and then it's fallen 20%.

Yes, it's giving up gains. But those gains were made in the last 12 months... not like you're losing gains that you've been making for the last three years or something. No, we're not in the beginning of some massive equity bear market. The corporate credit would tell us that and by the way, country debt also is not at risk. People keep saying the U.S. has too much debt outstanding, it's just ridiculous to say that. It could get bad but it isn't right now, by any stretch of the imagination.

You put those credit things together, healthy credit environment, and no, we're not at the beginning of some giant equity bear market. It's a correction in an otherwise still strong bull market that started in March, April, May of 2020.

Dan Ferris: OK. Yeah, I mean, we've heard every different kind of view on the show, so we interview all kinds of different people with all kinds of different views. Really, nobody is in total agreement with me. I mean, maybe one or two out of 100 or something. But anyway, –

Joel Litman: Well, I like your views, and you've got a long history of the markets, so you always want to seek any educated opinion to be able to look at it. The difference for us is just we've got data that the rest of the world doesn't have. We spent 20-plus years building this database that includes 32,000 companies. We do our own credit research, we don't rely on S&P, Moody's, and Fitch because I don't trust those firms.

We don't rely on Wall Street earnings numbers because I don't trust any Wall Street analysts, particularly not their buy/sell opinion... because we're doing that in-house on such a massive scale. We put it together, and we just have a different perspective because we've got data that's different than every other firm has... because it's not just me and our director researching, or what have you, it's 150 people in this firm at Altimetry.

Dan Ferris: You have data that other people don't have, or do you have the same data that you're looking at differently?

Joel Litman: One, we get raw financial statement data from companies as they file it. Then what we found, we have raw financial statement data from companies, or 32,000-plus companies around the world. But what we found is even the database providers get the data wrong. We've picked the best database providers of these 32,000 companies globally, more than 5,000, 6,000 companies in the U.S. alone, and then we fix the raw data. We actually have algorithms that tell us "All right, there's something wrong."

Reuters or Bloomberg or FactSet or S&P has picked up bad data from the 10-K or the 10-Q, so we fix that data. I'm going to tell you right now... there's more than a couple 1,000 fixes every month. Think of that cumulatively over years... and you have a different raw financial statement data set than the planet here. Then we take that and we change the accounting to get to Uniform Accounting. We don't allow companies to make electives where one is on the LIFO method of accounting of inventory, and one is on FIFO.

How can you have two companies with two different accounting, and then compare the earnings numbers when their earnings have been calculated differently. We do that across the world. Chinese accounting standards, by the way, don't follow exactly International Accounting Standards, so we have to adjust China. U.S. GAAP allows for way too many electives between companies. One company will be using fair value accounting, another one would be using historic accounting, and they're in the same industry and their peers.

Or one company would be capitalizing leases, FedEx and UPS –  totally incomparable financial statements... even the cash flow statements of FedEx and UPS – totally incomparable. We clean up the data, and we get a far better cleaner data set than any other research firm that we're aware of. I mean, I know some buy-side firms that are doing very similar things to what we're doing, Blackrock is one of them. But Blackrock doesn't share their data with anybody, and they don't use it to teach, they say we're going to use it for ourselves.

We're doing this with the data, then we do this Uniform Accounting. We get one set of accounting rules through history, so that we're looking at companies in the 1960s or 1970s or '80s. We get a clear understanding that earnings have been calculated the same way as the earnings today, so we understand market cycles at a different level. Then we put all that together, we apply it to credit also, not just to equities. When you do all that, you end up with different signals than you hear from Wall Street, totally different credit analysis and analytics than you hear from Moody's, S&P, or Fitch.

It gives us both individual stock ideas and macro signals that we don't see anybody else have. It took us a long time to build, but it definitely is a secret weapon if you will, although not so secret. Because we tell everyone how we built it, just it takes a long time to try to do what we did.

Dan Ferris: That's really cool. I didn't realize it was for the entire world, not just the U.S. market. I'm told that you have some really interesting contacts in places like the FBI and the Pentagon and various other places in the government. Speaking of the whole rest of the world, what does the rest of the world look like? What are these contacts of yours telling you about China, Russia, Europe, there's a lot going on in the world right now.

Joel Litman: Yeah, I am Dan an adviser to the Pentagon, I taught at MC War, the U.S. Marine Corps War College. When I taught there several years ago, they literally said to me, they said, you realize that the people in this room go on to become Joint Chiefs of Staff, it's that sample of personnel for the military that are in your classes. I said, wow, I didn't know. I mean, I get invited to teach universities all the time, and then that happens. A year later one of my students said, by the way, I'm stationed my new duty is at the Pentagon.

I think people depending on me need to hear what you're saying about what's happening in economics, and the global balance of economic power. I said, I'm happy to, and the reason he brought me in so now I'm allowed to say that I'm an adviser to the Pentagon, in the Pentagon, the Department of Defense. I'm allowed to say this, that when you add up and do aggregate credit and equity work across the world with a clean data set, you start to find really interesting things that is not being reported by the mainstream media, because the media is using bad data.

In many cases, I think the media they come up with a narrative, and then they go and find the data to support it. It's the opposite of the scientific method. It's, hey, I have an opinion and I'm going to go prove it's right. Well, that's what the media does. We were in that same camp of saying, "Oh, must be that they're correct," until we started testing these things. We took our data set and we looked at U.S., we looked at China, and we looked at a government level also, I think that's important to mention.

That we looked at the government accounting also and you get a totally different view of the planet. One is that the United States – "Pax Americana," if you want to call it – there've been four passes. They're Pax Romana, the Roman Empire, where you have one super economic power on the planet that really guides and shapes things. Then you had Pax Mongolica with the Khanate – that stretched all the way into Europe. Then you had Pax Ottomanica based in Turkey, the Ottoman Empire, then Pax Britannica. Well, now we're in Pax Americana.

People are saying the Pax Americana died out 20 years ago, 30 years ago when U.S. GDP as a share of the world's GDP really started falling, and started saying we're entering Pax China, where China is going to be the dominant economic power. Dan, nothing could be further from the truth. It is silly talk. When you find the magazines and the media pulling up data, you literally find that they're finding data to support their opinion.

Because when you look at the economic earnings at a corporate country level, corporate America versus corporate China versus corporate Europe or already any country which we have, you find that U.S. economic earnings is greater than the rest of the entire planet combined. To call China No. 2 may be accurate in literal terms, but it's a gross over-exaggeration of the power of that country, given that China plus all other countries in the world, Germany, France, U.K., you name it, throw them all in there.

You still get an economic earnings, total profitability which isn't even a third of what the United States is, not even a third. When you add that up you say, wait a second. Well, when a country has money to spend, where does the country get its money? Most countries, their money comes from three places: corporate earnings (taxing corporate earnings), household income (taxing people's salaries and wages), and third, VAT (or sales tax or value-added tax).

When you look around the world, the U.S. now collects more in taxes... just to make this clear, on a lower tax rate than other countries charge, lower tax rate. What the U.S. collects is more an absolute taxes than any other country by a long shot, by more than double or even triple any other country. No. 2 is China, but China's tax receipts have been falling, flattening and then falling, and don't blame the pandemic for that. They're saying it's a pandemic now... China has had an economic issue, a corporate credit crisis that started 567 years ago – which you won't get because Moody's, S&P, and Fitch don't cover enough companies in China to be able to show that, but we can show it. In the United States, we have corporate tax receipts that have been skyrocketing on a lower tax-rate level. Why? Because earnings and personal earnings and everything else the government collects on lower tax rates are even higher. Where does the government get its power, its economic power? It comes from taxation. We're looking at a situation that five to seven years from now, the U.S. federal government will collect more in taxes than the entire rest of the planet combined.

Now, think about this if you're at the Pentagon, that means the U.S. will have more money for the defense budget than the entire rest of the world combined... the use of more money for social services than the entire rest of the world combined, the use of more money for FDI. Everyone's talking about China's Belt and Road, and they're investing outside in other countries and they're taking over airports, and it's like nothing compared to what the U.S. has the capability of doing should it choose... meaning to invest and fund and provide loans and equity loans and whatever to other countries, not even close, because U.S. budget will be bigger than the rest of the entire planet combined. It's going to stay that way for a few decades. The idea that this is going to go the other direction is just crazy talk, it comes from people who don't understand accounting. Because Dan, you know this and maybe your listeners remember, I'm an accountant, I'm a CPA, this is how I started out.

We see different numbers because we dive into the accounting, both corporate and government accounting at a different level. That gives us numbers that people say, "Well, we should just be looking at this number." Like sorry, that's the wrong number. You're looking at the wrong number. If you look at the right numbers, and you really understand government and corporate accounting, you get an understanding of Pax Americana is in full swing, and the U.S. will be the super dominant economic power for the next decades... which, by the way, Dan, makes the United States stock market the best place to invest because U.S. companies have the highest earnings at the end of day. Why do you buy – as Ben Graham and Buffett would say, and Seth Klarman – why do you buy stocks? Because they have the highest earning power. Well, if you want to find the companies with the highest earning power, they're all going to be U.S. domiciled. They already are by far, and it's growing not shrinking, the way the mainstream media would tell you.

Dan Ferris: I wouldn't argue with any of that. The only thing I would push back on is that you could say the same thing about all the Pax's right at the top. Right when they were at the top, everybody said it'll be this way forever, it's better than it's ever been and it'll be this way forever. But that being the case, is it going to be another 50 or 100 years? I mean, that would be a drop in the bucket historically.

Joel Litman: Dan, your point's right. It's that people say, "Well, maybe it's because it's at the high, that's the reason it's a top ticket." I'd say, yes, so that's why we have to look at signals... because on a company's way up, a company, a stock – it always looks like it's hitting a new high. The U.S. stock market, whenever it hits a new high, everyone says, "Oh, well, this is a new high," like yeah, but then a week later it's another new high. You need the signals to tell you if we're at that point of "OK, it's rolling over."

Talk about Roman Empire and other empires, you could see it when you started seeing massive fiat currency, currency devaluation, which is not what you're seeing in the United States. This is another big controversial thing that people get all crazy about. The U.S. dollar... there is zero chance, zero, Dan, that the U.S. dollar will not be the reserve currency of the world again for the next decades.

The idea that the currency of the U.S., like the Roman Empire people often say, when you started seeing them "printing coins" and there's less metal in the coins and all the things that was leading to the Roman downfall over a few 100 years, that is not what you're seeing right now in the United States... certainly not right now with rising interest rates and a dollar that's getting stronger, not weaker. It's just everything is saying this will continue.

Dan Ferris: Of course, the dollar it's not that it's getting stronger, it's that the other currencies are weakening more, if you look at a chart of the –

Joel Litman: That's true, Dan and why gold was down 5% last year, silver was down 11% against the dollar last year, palladium was down 22%. Because the idea that money printing Dan, I'm like "so if it didn't do it in 2021, it's doing it in 2022." Well, then why aren't all these metals skyrocketing like they would have in the 1970s, like they did in 1930s or in other periods of time, where you had true currency devaluation? All right, so yes, the dollar is getting stronger relative to the currencies, and relative to metals.

I'm not saying that gold is going to collapse, I'm not I'm not like an anti-gold bug. I'm just saying if this were the case, why aren't we seeing a gigantic? Why isn't gold at its best days? Why isn't palladium at its best days?

Dan Ferris: Now that's a great argument, and we could go back and forth a million times of this stuff but –

Joel Litman: Yes, I love it, Dan. That's why I love talking with you, not just here but when we run into each other. It's a great discussion.

Dan Ferris: All right. Beyond that though, I keep hearing about these "Perfect Stocks" that you have. If I know anything about our listeners, they would much rather hear about that than hear Dan pushed back on why everything is so wonderful. I think we should probably get to that, though I promise you they tolerate my bearish view, but they want stock ideas and they want them like pronto yesterday, and they want to know how to find them too.

Joel Litman: Yeah, the perfect stock, it's like the Holy Grail. It's the search for it, it's the journey getting it. Are we ever going to get to the perfect stock? Who knows, but are we are on our way there? Well, "on our way" means we're producing alpha. All of our newsletters hit an alpha, high alpha – we're alpha focused. that is what the greatest investors in the world are focused on... meaning you have to beat the S&P, you have to beat the market. If the market's up 29% in 2021, and you're up 29% on your stock picks, you've done nothing, literally, and you took an idiosyncratic risk on those individual names.

What would define a perfect stock is if you have a better track record at beating the market. I'm happy to say since we launched, Hidden Alpha, High Alpha, and our Microcap Confidential with Stansberry, all of our newsletters are beating the market by large margins – all the stock picks from literal buy date to the sell date, which we provide... exact dates and times of when to buy, when to sell, and we're beating the market handily. Large caps, we do well in beating the market but our small caps and our microcaps, they're where you really find some gems that Wall Street doesn't even look at because they only cover large companies that do banking transactions.

One of the problems with Wall Street is the research coverage is tiny. We're covering 32,000 companies, I think if you added all Wall Street bulge bracket firms together, you might find 6,000 companies globally covered, not even close. The idea was that we started working together with Marc Chaikin, and Chaikin has been more or less on Wall Street for the last 20-plus years.

Dan Ferris: More than that, probably 30-plus years.

Joel Litman: Well, for the last 20 years, I've been attacking Wall Street and saying what's wrong with it. What's wrong with equity research? What's wrong with credit research? If you look at the headlines, I think, in 2004, I published a Harvard Business Review article called "Give My Regrets to Wall Street" which was my first big salvo saying there's something really wrong with what's going on here. HBR was kind enough to publish it... it was a fun case study. Since then, my headlines are always "what's wrong with Goldman, Goldman got this wrong, look at the other banks doing this wrong."

Here's this unexpected combination of Chaikin who's been on Wall Street, and he has this timing indicator – short term, not a Ben Graham follower – uses GAAP accounting in some of his calculations, just straight-up GAAP accounting from published databases. He admits it, he goes, "Look, I don't have the time and effort to clean up the data or whatever." But his focus is on short-term movements, short-term timing and he does very well. He makes some really good shorter-term calls.

We took his database and his data set, and we took our database and data set, and we back tested over the last 10, 15 years since the inception, his data set and ours. We said, "What if you combined our signals? What if you combined our signals and only use his best positive signals, with our conviction long idea signals? What if we combine them, and if it didn't show up in both lists, we kill it?" Now, my big concern was we're going to find zero stocks, that what he was doing in a short-term basis was totally different from our longer-term, fundamental Ben Graham, Buffett kind of style of investing, and that they wouldn't match.

What we found was crazy. We found 133 stocks, 136 about 10 per year for the years we studied, that lined up on both of our systems. Those stocks beat either of our track records, either ours or his that somehow, think about our good fundamental and ideas, his timing would get our buy recommendations either in sooner or get us out of a stock a little bit earlier. Or have a stay of stock a little bit later, than our fundamentals would have said. We still relied on our fundamentals, we weren't going out and buying stocks that didn't make sense from economic earnings, Uniform earnings standpoint.

We didn't rely on his GAAP numbers. We said, "Let's look at everything you're doing, what we're doing, and let's see where they match," and it was about 10 a year. You found more of these "perfect stocks," "perfect" because you're matching timing and fundamentals. His timing with our fundamentals, when you match them together, we found more of these ideas in periods like today... meaning when you have a market down and volatility and people are wondering which way to go, you find a lot more of these ideas popped up than in 2014 or 2015 where the market kind of just rose.

When you put those together, we found something interesting. We're now launching a product together, Chaikin and Altimetry, his Power Gauge with all our Altimeter. And we've been building his databases for years so we have not fused the databases together. That would take us a long time. But what we're doing is putting our research teams together and saying, "What's coming out of your set? What's coming our set? Whenever we see these singles line up, let's tell our clients and let's produce a newsletter specifically for that." That's led to this idea of the perfect stock. I don't know that there ever will be a perfect stock, but it's pretty interesting. It's really interesting.

Dan Ferris: Well, the idea of you and Chaikin getting together that is to me, I know both of you so I'm like "whoa, look the hell out." It sounds like a lot of –

Joel Litman: We get along well, we actually really do. I'm not just saying for viewers... he has a different style. If your listeners remember him, he's more quiet and more stoic and more here's what's happening... then, you have me. You know I get a little bit excited when we get in these things. But somehow, we're really a good match, we fit together. It's been fun doing the research together, it's been fun getting our teams working together. The results, I think, are going to be fantastic.

That's why we're launching, we have a webinar we're doing this Thursday, September 22, this Thursday night at 8 p.m. I'm really excited for it, it'll be a really fun show. Whenever we get together, we have a really good back and forth –

Dan Ferris: Yeah, and just real quick, you can go sign up for the webinar, a website called September22warning.com. The word "warning," I don't normally associate that with you, Joel. I'm like "warning, what is he warning me about? I'm going to make too much money in the next couple of years."

Joel Litman: Yeah, I mean, we're still in the middle of the biggest mass deception in financial history which is called GAAP and IFRS accounting. As a CPA, this is me slamming my own profession. But the fact is a fact. The accounting people are looking at earnings and they're going to say, "Are we in a bear market? Are we in a bull market?" Then they use the Case model, the Shiller cyclically adjusted price-to-earnings multiple, and that multiple has been signaling a bear market for the last six, seven years. I think since 2015, 2016, it's been screaming, "Oh, it's the highest level ever, we're going to be in a bear market," and it still is.

Well, why? Because Shiller, to all his credit as a Nobel Prize winner in real estate, is not an accountant. He is not a CPA, and I looked at his team, he doesn't have any hardcore CPAs working for him who understand how bad the accounting is. He's using as-reported earnings in the "E" of his P/E, so of course it's wrong... of course, it's bad. But this is the warning... it's everyone that's still using these numbers are going to, one, they're going to make really bad calls not only on the market. Is the market going to be up or down over the next one, two, three, five years?

But they're going to make really bad individual stock calls, so that fits. The other side is Chaikin, he regularly has warnings from a timing standpoint – talking about your website domain name for Thursday night. Chaikin also has these warnings that people miss completely. I'll say that, over the years, we've missed them, we've leveraged our fundamentals. But there are times you said, yeah, he would have. There's one that we really love the stock front door, fundamentally loved it, green signals all across the board in our system, every reason to like it.

Chaikin's numbers, we're saying, "Not now, not the time, not now." Now, we've lost 12% of that name, we closed our position because we're very tight stops, we closed the position. But we might have waited and not even open the position had we been looking at Chaikin stuff. I would argue that the warning certainly fits if people aren't using these things. They're going to make big mistakes both at a macro level and where the markets are headed and which stocks to buy in these volatile periods, which tend to be really good, juicy opportunities.

As they would say, "when blood is in the streets" which is literal and figurative right now, unfortunately literal because of what's going on in Eastern Europe. But it is the case. These volatile markets are times if the fundamentals are there – which are there – if economic earnings is so strong, if corporate credit is strong. One, that's very bullish for the markets, and two, it means there's a lot of individual names that this is a wonderful time to be getting in.

Dan Ferris: Joel, do you have any names for me, or do we have to read the reports?

Joel Litman: All right, Dan, I've been told. One, Chaikin and I are both giving away two long and two "run for the hills" stock ideas, meaning if you own it, get out of it. Two, if you don't own it, we'd recommend you look at it right away. We're going to give those away on Thursday night. If anyone's listening to this podcast, post-Thursday, September 22, I'm sure the recording is up there and available that you'll be able to get it so you'll hear those ideas. But yeah, our teams keep reminding me not to give away our best stuff for free.

I'm dying to talk about our best ideas, but I'm told to keep my mouth quiet. I'm happy to give you our macro calls all day long, if we only have 10 great stock ideas they don't want me giving four of them away on every call I do.

Dan Ferris: All right, but just to be clear, if the listeners go to September22warning.com, sign up, tune in on the 22nd, they're going to get some ideas from both of you guys, just to be clear?

Joel Litman: Yeah, you'll get an understanding of the track record, you'll see what's worked. Then we actually mentioned a couple ideas that we both love that evening, and a couple ideas that are very popular stocks, that we're saying, "Stay away." These are actually some big large-cap ideas that we're looking at. But obviously, the stock ideas that in the product are going to be our best ideas, and for those that want to dip their toe into our newsletter and this joint venture that Chaikin and we have together, this would be the time to do it if you've been sitting on the sidelines for either of our product.

Dan Ferris: Yeah, I know I'm curious. I'm going to be there on the 22nd listening in, I'll be out there because I'm just as interested as anybody else. More so since I've talked with you both at length here. But you sounded like you had more to say about the macro a moment ago.

Joel Litman: Yeah, look, we're not screaming by the stock market right now in the U.S., we are saying, "Run for the hills from China and many other markets," and from a pure stock-picking standpoint. Look, Dan, if I thought Pax China was coming anytime in the next 20 years, me, my kids, my boys, I would be teaching Mandarin all day long, I would be. I'd be the first, I'd say, "Look, I'm going to go where the money is and where it makes sense." But I don't have a single data signal that says that's the case – every single one keeps saying, "Double down on English, double down on the U.S. stock market."

Just take your time. Volatile periods like this, I love individual stocks, particularly if they flagged both for our fundamentals and the "perfect stock" idea with Chaikin's timing. But from a macro standpoint, we would be buying into the U.S. stock market, but we would be dollar cost averaging over several quarters. We might get another purely headline-driven, emotional-driven correction sometime in the next two to three-plus quarters, and we want some dry powder to be able to buy in.

We're saying, if you had $12,000 that you're not going to be spending for the next 10 years, it should be in the U.S. stock market, it should be, period. It should be, and the parking spot is buying the S&P 500. But we wouldn't put that $12,000 in today, we'd put $1,000 in this month, $1,000 next month. We spread it over 12 to 18 months, because we might get a buying opportunity six months from now we're then I would love to be on your show and pound the table and say now's the time. It's just like March, April, May of 2020 when we made that big call. Yeah, that's our macro view from that standpoint for U.S. market.

Dan Ferris: You have my e-mail, if that moment arrives, you let us know, all right.

Joel Litman: I'd be happy to Dan, I'd be happy to.

Dan Ferris: Oh, Joel, it is time for my final question. By the way, it's been a great pleasure. It's the same question for everybody, for every guest no matter what the topic, even if it's like a nonfinancial topic which we do every now and then. Exact same final question. If you could leave our listener with a single thought today, what would it be?

Joel Litman: I tell this to my students – Dan, you mentioned that I teach a lot – I tell this to my students, I remind my biggest clients, and I remind people and I'm quoting Buffett, which is: "Don't bet against America." I'm talking about the next several decades. What people don't realize is what we're seeing right now, and when I say, "Don't bet against America," I'm saying from a "where should you work?" standpoint. Where should you rely on, what ecosystem should you rely on? The U.S.-centric ones are going to do very well.

What's happening in Russia right now and in Eastern Europe, there are people calling for an end of globalization. It's the end of globalization – it just isn't true. It's such an overt characterization, and frankly, it's inaccurate. What we're seeing is a re-globalization of the world. That is a non-Russia, less China, that doesn't mean no China. I mean, China is still exporting, crazy companies are still doing business with China and that's not going to stop anytime soon. But it's a real globalization around U.S.-centric banking, U.S. dollar, U.S. capital markets. U.S. I'll say the SWIFT system, but it's not just the SWIFT system.

It's the entire U.S. financial-services system, as well as just U.S. companies and multinationals in general. Right now, the market cap of United States companies – I say "right now" but you got to pick a measurement date – this year than for the last couple of years. The market cap of U.S. publicly listed companies, when you look at a big database of 30,000 companies, is bigger than the rest of the world combined. What you're looking at as the majority of the world's equity capital is U.S. When we think about innovation, United States, for the last 40 years, has been spending more in venture capital every year than the rest of the world combined.

In some years, by double the rest of the world combined, angel investing in the United States exceeds all of the rest of the world combined. Corporate America spends more on R&D. And by the way, most companies that spend on R&D are companies that were formerly VC-backed companies by like 80% or more. In corporate America, more R&D innovation comes from former entrepreneurs. When you have this innovation dynamo that the U.S. enjoys, that exceeds the whole planet combined, this idea that Buffett says "don't bet against America" is unbelievably backed up by our database, our signals and our research, and some very common things like market cap.

But things like economic earnings that you just don't see... whatever you're thinking for your business, whatever you're thinking for the future, whatever you think about if you want to teach your kids a new language or whatever else... I'm not saying it wouldn't be fun to learn some other languages, but make sure they learn English at a really strong level. Because you're looking at the super dominant position of Pax Americana for the next several decades.

Dan Ferris: Believe it or not Joel, I hope you're right. It sounds like, you could even be slightly off or half off or something and I think the point would still be valid. That's probably a message that we should hear about 10 times more often than we do, so thank you for that.

Joel Litman: Well, you can subscribe to my daily because I repeat it like three times a week, in different ways. But, Dan, anyway, thanks so much. I love being on your show. I think it's great what you do, and you really do bring on a lot of great different opinions and voices and so to that end, thanks for having mine. Given that I'm sure I'm somewhere on one end or the of a spectrum of where your listeners are, but hopefully that gets them to think.

Dan Ferris: Absolutely, yeah.

Joel Litman: Thank you, man.

Dan Ferris: Thank you for being here, it's been great. We will definitely believe me, you send me that e-mail and tell me the buy opportunities and you'll be on right quick again so we'll keep in mind.

Joel Litman: Or if we see the reverse... 2008 was a tough year to tell everybody it's going to get worse, it's not going to get better and people thought, "Oh, the market's down 12%." If our signals turn the other direction, I am not an uber bear. I go where the signals tell us, I'd rather say we don't have opinions. We just have –

Dan Ferris: Sounds good.

Joel Litman: Thank you, sir. Thank you, Dan.

Dan Ferris: Wow, that was great and I hope you really enjoyed the perspective of somebody who, frankly like we said, completely disagrees with me on the nearer-term outlook. That is really necessary, I can't stress it enough. If you're as bearish as Dan, the person you absolutely want to hear from is Joel Litman. You don't want to hear another bearish person because that just confirms the viewpoint. Neither Joel nor I know what the market is going to be like in 10 years, it's just you don't know.

You need to entertain different viewpoints and you need to acknowledge the fact that you don't know the future. I may think it's likely that we'll have a big bear market and it'll be really difficult for the next few or several years, but I don't know. I absolutely owe it to myself to listen to the Pax Americana guy, Joel Litman. Of course, he's a great guy, obviously. He's been around the block a few times. He gets into a lot of powerful places and talks to a lot of powerful people, and he just knows a lot. He's been working on this data set as you heard, for years and years. I think it's awesome.

I'm so glad that you got to hear from him today. All right, let's do the mailbag. Let's do it right now. One of the most successful entrepreneurs in America over the past 50 years, is going public with his fourth and final prediction about a scenario he calls "America's Nightmare Winter." You've probably never heard of Bill Bonner. But in addition to owning an interest in businesses all over the globe, he also owns more than 100,000 acres with massive properties in South America, Central America, and the U.S.... plus three large properties in Europe.

I've been to one of them, it's gorgeous château. I've known Bill for many years, he hired me into this business. He says we're about to enter a very strange period in America which can result in the most difficult times we've seen in many years. He's made three similar predictions in his 50-plus-year career. And each time, it proved to be exactly right, although he was mocked each and every time and I remember all of them. This is why I strongly encourage you to read about Bonner's fourth and final prediction, totally free today. It's all spelled out in a free report that we've put together called "America's Nightmare Winter." Get the facts yourself... go to www.nightmarewinterscenario.com to get your free copy of this report. Even if he's only partially right, it will dramatically affect you and your money. Again, go to www.nightmarewinterscenario.com for this free report.

In the mailbag each week, you and I have an honest conversation about investing or whatever is on your mind. Send questions, comments, and politely worded criticisms to [email protected]. I read as many e-mails as time allows, and I respond to as many as possible.

You can also call our listener feedback line at 800-381-2357. Tell us what's on your mind and hear your voice on the show. But for my first question, I'm going to not answer it. Elsa G, you have a question about options, I haven't tracked down the answer. I don't know it, and I'm going to find out and we're going to talk about it next week. It's a great question, I'm not even going to say what it is. All right, you got to tune in next week.

Really, first up this week is Don, and Don says, "Hi, Dan, love the show. On a recent episode with Austin Root, you talked about the importance of aligning your investments with your goals, I think it would be great to dig in a little bit on how to set your goals. I'm 51, and have always been a saver. But I can't really say that I have a goal in mind as it pertains to my portfolio and investments. How should someone think about this? I feel like this could be a really good topic to discuss. Thanks for considering. Best, Don."

Great question, Don. Of course, this is your plan so I can only go so far. But I think it starts with time horizon. Are you investing for 10 years from now, or for 20 or 30 or whatever it is? Because if you're investing, if you were 71 or 61 or something, that would be different than if you're 51.

Say you have 40 years to live... that's going to be a different type of a plan than if you're 87 or something, so there's time horizon. The next thing is risk tolerance, your level of risk tolerance, which again, I don't know your genetics so I don't know how long your parents lived, I don't know what kind of health you're in so you only you can really know about your longevity. Only you can know about your risk tolerance too, that's the second thing to think about. I think, actually, I'm going to leave you with those two, just start there and that will help you establish the goal.

The goal will be something like "well, with X% of my assets, it could be 100%, I want to pursue the goal of wealth preservation," then you'll do one thing with those assets. Then you'll say, "Well, I'm 51, I've got some working years left, I can afford to take some risks. Maybe I want to take a flier with 3% or 5% of my assets or something," then that's your speculative portfolio, maybe. It's going to be something like that. I would advise thinking in those terms: wealth preservation, capital appreciation, income, speculation.

Your goal, ultimately, is going to look like that. As you can see, that's not really the goal is it? That's like the means to get to the goal. The goal is something you know about yourself. In 20 years, I don't want to look back and say I risked too much or something. The goal is exactly what it sounds like... it's where you want to be in the future. But to me, the real goal is how you want to get there, and it's carving your portfolio up in those categories of wealth preservation, capital appreciation, income, and speculation. Great question.

Anthony H. is next. Good to hear from you again, Anthony. He says, "Dan, please give an update as to the status of gold. It seems the worst inflation the harder gold gets hit. Do you believe this has already been priced into the market? Because it seems that the market is underestimated the transitory inflation. Do you anticipate an inflection? I worry things will not go well if people acknowledge the fact what is going on and go into gold. As a gold investor, I kind of hope it happens, but I picture chaos. What do you think would happen if people lose faith in the U.S. dollar? Anthony H." Well, yeah, if people lose all faith in the U.S. dollar rapidly, you definitely want to own some gold.

I would say you want to own some gold anyway, and yeah, I hear you about the near-term price action. Joel mentioned it in the interview, I got nothing. Ultimately, all I'm ever going to respond to with that criticism of gold is, it's beaten stocks in the 21st century and it's done great. Since it's a 50-bagger since 1971, since Nixon cut the cord between gold and the dollar, and it's been around for 5,000 years. I mean, the odds that this is the inflection point when gold stops doing what it's done for 5,000 years, I think, are fairly poor. I think you should own it for those reasons.

In the meantime, can I explain the market action? Not really, except that if you look at past equity bear markets, gold does tend to sell off at some point because at some point, people get so scared they just want to raise cash anywhere they can. Even though gold may wind up higher at the end of a bear market than it started at the beginning of the equity bear market, in between it'll be volatile. I'm not saying I can explain it, but I tend not to worry about it. I hope that covers it for you, Anthony. I know, it's very unsatisfying, nobody knows what's happening with gold.

All right, last this week is Taylor S. Taylor, thank you so much, I love this question. "Hey, Mr. Ferris, since the U.S. dollar is the world's reserve currency, wouldn't one of the first signs of global financial collapse be the failing of international currencies before the fall of the U.S. dollar? You mentioned the DXY, the Dollar Index, being 110. Is that a sign that people globally are getting out of their currency and into the U.S. dollar as the final lifeboat? Thoughts? Thanks, Taylor S."

Yeah, Taylor, I want you to Google something... Google "dollar milkshake theory." I'm trying to get the guy who authored this theory – his name is Brent Johnson – onto the show. This is a fascinating topic, I think it's an extremely important topic, and the dollar milkshake is exactly what you describe. It's the other currencies all weaken before the dollar, or the dollar is weak but everything else is weaker. The dollar is weak in terms of everything we buy. It may not be weak in terms of the stock market or even gold and silver, which the prices are down, so the dollar is stronger against them.

But it is certainly weaker against every "necessary" of life, it's weaker against rent, food, energy, everything you can name that you need to live your life. That's a genuine weakness... but versus the reason that the dollar appear so strong is because the other ones are so weak, look at the big components of the DXY, like the euro and the yen. Get a chart of those next to the DXY... it's like they've been brutalized. It's not that the dollar looks so great. It's that it's not nearly as bad as the others, and you're absolutely right.

The reason it's called "dollar milkshake theory," it's named after that scene near the end of There Will Be Blood, which is a film with Daniel Day-Lewis based on a book called Oil!, published in 1927 by Upton Sinclair. It's this character Daniel Plainview, this ever-religiously greedy oil man, and he's telling this guy who had land next to him, the guy thought he was going to make a fortune because his land had oil, too. I forget what he thought in the movie, I think he thought he was going to sell the land to Plainview or to Daniel Day-Lewis, his character, or maybe just give him a license to produce oil or something like that.

But then Plainview gets this guy alone and he's talking about the guy's oil on his land and he says, "You have a milkshake, and I have a straw. My straw reaches all the way across the room, and I drink your milkshake," and then it makes the slurping sound. It's a fantastic scene, and he stands in front of the guy and he keeps poking him in the shoulder, and telling him that he's screwed and that he's an idiot. Then he just keeps making fun of him and insulting him, and it's brutal. But it's a fantastic scene. Of course, Daniel Day-Lewis is great, and the guy who plays the other guy, I forget his name, he's great too.

That's the milkshake, so the dollar is the sucking thing that sucks the liquidity out of other economies, and then eventually implodes. Dollar milkshake theory says the dollar and gold will all go up, as these other economies are hit in the manner you suggest Taylor. And ultimately, gold will be the last man standing in all of this. We're obviously not there yet, but we are into the stronger relative U.S. dollar phase of this for sure. I'm curious to see how it all plays out. Your question is most welcome, and I love it. It's something everyone should be asking.

All right, well, that's another mailbag and that's another episode of the Stansberry Investor Hour. I hope you enjoyed it as much as I did. We provide a transcript for every episode – just go to www.investorhour.com, click on the episode you want, scroll all the way down, click on the word "transcript," and enjoy. If you like this episode and know anybody who might like it, tell them to check it out on their podcast app or at InvestorHour.com. Do me a favor... subscribe to the show on iTunes, Google Play, or wherever you listen to podcasts.

While you're there, help us grow with a rate and a review. Follow us on Facebook and Instagram – our handle is @Investorhour. On Twitter, our handle is @Investor_hour. Have a guest you want me to interview? Drop me a note at [email protected], or call our listener feedback line at 800-381-2357. Tell us what's on your mind and hear your voice on the show. Until next week, I'm Dan Ferris. Thanks for listening.

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