Episodes

Dan Ferris: Hello, and welcome to the Stansberry Investor Hour. I'm Dan Ferris. I'm the editor of Extreme Value and The Ferris Report, both published by Stansberry Research.

Corey McLaughlin: And I'm Corey McLaughlin, editor of the Stansberry Digest. Today, we always ask you for your questions. Now, we're going to finally answer them in a special mailbag episode.

Dan Ferris: That and more, right now on the Stansberry Investor Hour. Let's do this thing. I'm excited. We never do the mailbag anymore. And frankly, it has kind of fallen down to a little trickle. But when we gather them all together, it's pretty interesting, isn't it?

Corey McLaughlin: Yeah. You know, I went through the mailbag. And we got a bunch from the last couple months or so. Good questions. And I'm excited for this episode, too. You know, it reminds me of year-end stuff which is always nice. Take some time from our normal fare in life and this podcast. So I'm happy to roll through these questions.

Dan Ferris: Well said. OK, I'll take the first question. It's from Anthony H. And it's about oil. And he says, "Dan, big fan of the show, longtime listener. Been interested on your oil trade from months back about how the green energy movement and threatening of eliminating fossil fuels would boost the price of oil. Oil has seen an upswing since then, but it seems to track the economy. And the only time it really slumps is when the thought of recession becomes possible. The only reason I ask is when I saw an interview with Newsom."

I think he means Gavin Newsom, governor of California, on oil production. "He mentioned oil production by the U.S. is an all-time high. And when I looked at seems to be true. It seems to be only the media threatens this idea of cutting oil, but production has not been hindered at all. Interested in your thoughts. Anthony H."

So Anthony, I see what you're saying here, if you know, how can oil be at all-time-high production, if fossil fuels are somehow eliminating? Well, the point is not that fossil fuels are threatening and eliminating the use of oil. That would kind of be bad for oil prices. The thesis is – and this is happening, I've tracked it... I've done the work. I've added up all the numbers. And the capital investment is falling and has been falling for years now, partly because of this issue.

If these investments are like – they're not five-year investments. They're like 25-year investments. And when you dig these massive holes in the ground, and you know, you do all the things that they do for fracking, we'll not go through that technical process, but it's a big, expensive thing. And you don't make a 25-year investment, when somebody says they're going to put you out of business in 10 years, less than 10 years, they're targeting, like 2030, 2035... numbers like that.

And now this group that calls themselves the COP-28, this annual meeting that, you know, all the big thinkers have on climate, they said they've all agreed to reduce fossil fuel use. So, you know, the world runs on this stuff. You know, there's been trillions of dollars of investment in it, and it hasn't moved the needle on the energy mix globally. It's still 82% fossil fuels. And it's been that way for years. So the world runs on fossil fuels. The climate thing is a bunch of garbage.

I have no qualms, whatsoever, saying that. I avoided the topic for some time, but it's pure garbage. And doing this is just going to make oil more expensive. Refusing to invest in oil production is going to make it more expensive. So yeah, they're producing like crazy now, but what will be producing in five or 10 or 20 years, is my question.

Corey McLaughlin: Yeah, I'm with you on the pressures on the oil and gas industry from outside, you know, influences. But the demand is still going to be there. I mean, unless like, Anthony mentioned, in times of economic slowdown, obviously, in the recession, that the price takes a hit. And right now, actually the price is down, you know, for about 20%, 25% for crude, WTI and Brent. So that may be a signal of something.

But separate from that, one of our colleagues Alan Gula from the Investment Advisory team sent around a chart the other day of the crude oil production globally and the percentage the countries who lead the share. And the United States has actually increased its share of global oil production in the last couple of years. It's up to 16%. Saudi Arabia is down. Russia is down. So you don't hear these things about, you know, out there in the media like you're talking about.

But demand is there. I think we've said before the demand for oil is not going away, no matter what happens in the next five or 10 or 15 or 20 years. So yeah, I think it'll be there. And if you could find the right companies, that can benefit from that, it shouldn't be a problem.

Dan Ferris: Yeah, exactly. And they're gushing cash. So in the meantime, if they're not putting the money into capital investments, they're gushing cash, you know, at $65, $70, $75, $80 oil... all those numbers. So they'll pay dividends and buy back shares because they're not going to put it in the ground. And the folks from SentimenTrader recently put out a report that said a 25% drawdown in oil has been no reason to sell. And they look at historical pricing, right?

So they're looking at the price movements, and they're saying, well, 25% drawdown is nothing. That's no reason to sell. You know, you can – it could still be a very bullish scenario with the price down 25%. So yeah, I think we covered this one. You want to do the next one?

Corey McLaughlin: All right. Yeah. Let's move on. And this one is on housing. It says, "Hi, Dan. I know we've had this discussion before. But Dave Collum puts succinctly my concerns about the housing market starting at the so-and-so mark of a different interview. His assertions are, 'One, the housing market isn't just tight. It's broken, sellers can't afford to sell and lose their 3% mortgage, and buyers can't afford to buy at current prices and take on a 7.5% mortgage.

Two, when the big investors with residential real estate portfolios with the leverage and near zero rates are forced to pay 5% or more on an asset that's falling in price, that spells liquidation and then crisis.' Here's the question: are you still long homebuilders, Dan? I just couldn't do it. Good luck. S.C. in Santa Clara."

Dan Ferris: OK, so let me just throw in a little editorial note here, folks. S.C. is referring to the interview with Dave Collum, episode 207, which aired on May 20, 2021. And it's at the 11-minute-and-30-second mark, what he's talking about during that interview. And yes, still long homebuilders, and they're making new highs, I think because mortgage rates have probably come down in the next several months. Somewhat, you know, enough. And the supply is still tight. So you know that phenomenon Dave mentioned with the 3% mortgage? Well, sellers can't afford to sell, so they're not.

So the supply of existing homes is just crashing, right? And a crashing supply supports the price. So it's kind of an ideal market for homebuilders, right, to fill in that gap. And as far as the big investors with the residential real estate portfolios, and leverage and all that, individual big investors, I think they will not have as much problem rolling over their debt as we think they will. They will certainly make less money when they do it. I don't think they'll crack up and fail.

I could be wrong about that, because their balance sheets are invisible to me. But I suspect that they'll be able to roll them over because the assets are pretty good. And the price will still – the valuation will still be supported, I think. And I don't think they own enough to crash the whole U.S. housing market. So I'm still long homebuilders. And I think the market is still – I think it's a good place to be. I still like it.

Corey McLaughlin: Yeah, I don't have too much to add there. You've done more work on homebuilders than I have. Other than I've seen recently that some of these homebuilding companies are actually meeting the demand for moderately-priced new homes that are in need that that were chronically undersupplied of, which I think is a good thing overall, just for everybody. I mean, it might not be as profitable for them as the higher-priced homes. But I think there's clearly enough demand for some sort of middle class, new starter home, or second home, or those kinds of things. So I'm glad to see that might be actually happening just for the health of the country

Dan Ferris: Yeah, that's right, just for the – just because we don't want anything to crash, right? We just want everything to be good.

Corey McLaughlin: Right.

Dan Ferris: But the big homebuilders are buying down, you know, mortgages down to like, 5%... 5.5% already. So if they keep doing that, and you know, we lose another 50 or 100 basis points on mortgage rates, I mean, you know, there's probably some pent up demand that's waiting to jump in and buy. So yeah, let's move on and talk about another one. The next question is on nuclear energy.

And it is from George O. And George says, "Hi, Dan. I don't recall hearing anything about the current move to design and build small modular nuclear power plants to hopefully become a big source of power in the country. Porter Stansberry recently broached the subject. I would think that this could be a great topic for your show. George O." You're right, George, I'll have to do some work on that, [laughter] and we'll have to talk about it someday. I mean, it's great idea.

Corey McLaughlin: It's a great topic. I mean, I mentioned, some stuff I saw out of this COP-28 conference that you mentioned, which is the UN Climate Change conference. And just wrapped up, actually, in Dubai. And the biggest story that I think that came out of it is, like, these leading countries, U.S. included... U.K... all kinds of countries – Japan, Korea, France, Finland. Leaders from all of these countries pledging to triple nuclear energy capacity by 2050. Now, the reason is they're attributing it to is the climate change.

But, you know, whatever you think about that, if this pledge is happening, if this this push for nuclear is happening, from governments, I mean, we've talked about the problems with solar, and batteries, and you know, storage, and all of that stuff, the science on nuclear is, like, amazing when you look at it, and the amount of the amount of energy that can be produced from these sorts of things. So yeah, I mean, it is a great topic and a great opportunity, I think, in the future.

There's going to be political, you know, concerns that come up and safety, and all of that. But I think that when enough people realize the amount of energy that can be produced by nuclear, I think that'll – I think it'll win. I really do. Because there's no other real alternative at this point.

Dan Ferris: Right. Pound for pound, it is, like, it generates way more power than anything else. So George, just Googling this, I can't resist Googling things. Somebody brooches a topic, I'm right on Google. Let's see, January 20 of this year, 2023, the U.S. Nuclear Regulatory Commission certified a small modular reactor by a company called NuScale. OK? And it's funny, because then it goes on to say that I think they started this process in 2018. [Laughter]

 

So you know, that's one reason why I don't talk about this as a development in the U.S. very much. Because I know what it takes. Another, you know, just Googling headlines here. A Reuters headline from May 4, Westinghouse unveils small modular nuclear reactor. I don't know if it's certified by the NRC, or what. Maybe it's this similar design to the NuScale one that's certified. But yeah, I agree, George. And sounds like Corey does, too. This is a great topic. And we will, I promise you, we will talk about it a lot more. OK.

Corey McLaughlin: Yeah. And I think the U.S. military agrees, too, based on investments that they've been, or you know, money that they've been putting towards nuclear power for the submarines and whatnot. So, yeah, not insignificant.

Dan Ferris: OK. And we do have another question in this general category.

Corey McLaughlin: Sure. Yeah. It's our friend Lodewijk. "What's your take about the uranium situation?" According to Frank Curzio's podcast, the price is dubbed. To be clear, I'm positioned via the Sprott Uranium Trust.

Dan Ferris: OK. So Ludovic, this is our longtime correspondent Ludovic H. And he just changed his name on his e-mail. So it's Lodewijk S. Lodewijk, I think he's saying the price doubled on uranium. I don't know how far you have to go back for that. But yeah, it's up substantially. And my take is that the supply demand picture hasn't changed any at all. You know, just because the price has been up around, you know, what you might call the incentive price, where the big uranium producers are making money. You know, what it really takes to get a lot of capital into producing uranium is a price well in excess of the incentivization price. And I've talked about this in relation to copper as well.

So all the fundamentals are there. The power is needed. Other countries outside the U.S., like France is, is like almost all nuclear power. And other countries use more nuclear power as a percentage of their total output than the U.S. You know, we have a fair amount, too. So yeah, I think the fundamentals are still there. It's a great alternative, if you're, you know, have a problem with fossil fuels for some reason. And I say it's as good a bet as it's ever been.

Corey McLaughlin: Yeah, I would just say it's – it fits in line with the trend of just general underinvestment in resources. Have in it for a long time. So yeah, to me, uranium is another one. Put it in there. Commodities. And these are things to think about in this world where we got overvalued stocks, bonds that, you know, who wants to own a bond right now? I don't know. So yeah, look at other things like commodities. uranium, one of them.

Dan Ferris: Yeah. The Fed wants you to believe they've got inflation under control, but I believe we've only seen the beginning of a devastating new crisis, and if you don't prepare now, you could see your savings evaporate as inflation and interest rates soar even higher over the next two years. It all traces back to a golden thread that ties together the biggest financial calamities in America's history, but it seems the entire financial world is falling into the very same denial trap that led to massive devastation the last time this crisis played out. If you know your history, you know there will be winners and losers and now is when you decide which one you'll be. I've spelled it all out in an urgent new report. Go to www.bankrun2023.com to get your free copy. I'll also show you how to get my complete playbook for navigating this crisis, including the three critical steps to take immediately. Again, that's www.bankrun2023.com for your free copy of my new report.

1. Next topic is farmland. And we have a question from Greg M. And Greg M. says: "Hi, Dan, great interview regarding farmland. I almost hate that the cat is out of the bag. Being born and raised on a farm I've been buying and selling farms for several decades now with excellent results. I'm just one hour northeast of Toronto, and farmland has continued to surprise and reward. I typically buy rundown and out of production farms then come in with specialized equipment, and give the land a major facelift. I often hear the neighbors whispering, 'Oh, he'll never grow X on that land.' But usually within a season or two, I proved them wrong.

I'm now looking at land in northern Ontario and also in Southeast Ohio. The long game with Ohio farmland is also to buy the mineral rights with new pipelines to Pennsylvania," and then he has plastic pellets plant in parentheses there, "to Cleveland's new microchip manufacturing plants, all big users of natural gas. It's only a matter of time before the oil and gas rights are leased. This will produce generational wealth to those with the foresight. Enjoy your show. Regards, Greg M., Alliance Lifetime."

Well, thank you for your Alliance Lifetime membership, Greg, and for your question. I don't know if I have a whole lot to say about this, other than it's like one of those things where I feel like every now and then I hear an idea that makes me say I've been in the wrong business. And you know, it makes me want to own some farmland.

Corey McLaughlin: Yeah, I love this, this note. This was stemming from an interview that you did several, I don't know, it had to be a month or two ago, with the farmland-investing company. And yeah, I have so much respect for farmers in general, just the way, you know, that life and doing that work that goes severely overlooked by people in cities buying food, produce at grocery stores, and shops, and whatever it may be. So that's the first thing.

The second thing is I'm fascinated by the long game that he mentions here with the mineral rights of farmland, and in different areas. I mean, yes, that's a thing that I totally agree, if that turns out there will be generational wealth for those with the foresight. And it sounds like Greg has it. So yeah, it wasn't I also wasn't really aware of Cleveland's microchip plans. But that's also interesting. I might look into that. So yeah, I have no doubt that farmland will be super valuable, as it always has been, in the future. And good on you for proving those neighbors wrong, too.

Dan Ferris: Yeah, I haven't I have nothing to add. I think farmland just sounds really interesting. And you're right, too, though. It makes me curious about like microchip plants, and pellet plants, and stuff that he mentioned a lot of good ideas in there. Let's see, you want to take the next one?

Corey McLaughlin: Sure. This one is on our topic of political correctness, which from a few weeks ago was the title of our episode with Whitney Tilson. So I'll just go into. "Companies have no business being politically-correct," quote, "unless they want to lose half of their business. Companies have no business being involved in politics of any kind. This is a capitalist country, and companies are proof of that.

Their businesses to make money for their owners or stockholders. If they want to take a political position, then they should do that under their own names, and apart from their companies. The term politically correct is offensive to me as a lifetime member of Stansberry Research. But if this is the type of info, I will receive, I will remove my association from this company. Business is business, politics is politics, they should forever be separate until we become a fascist nation, which I fear is where we are headed." And that's Don B.

So yeah, I think actually think we're in agreement here, Don, about everything that you say. And it wasn't us saying that companies should get involved in politics. It was us and Whitney discussing why it's bad for companies to get involved in politics, as we've seen with, you know, Bud Light, Disney. There's a lot of other ones that I'm not mentioning, or can't remember, or don't know about, but I'm sure they're out there. Target. So no, we're all on the same page here. I thought this was a – I just – you don't need to remove your association with us, I would hope not, after hearing that.

Dan Ferris: Yeah, Don, we're on the same page here, buddy. You don't have to worry about Stansberry Research. We, in fact, here on the podcast, I think it's probably the only place where we discuss political correctness in the whole of Stansberry Research. And it's to condemn the practice in corporations, the companies that you're talking about. So I hear you. You're right. We agree. [Laughter] All right. Let's move on to the next question. It's the topic is Charlie Munger, which is not a bad topic. The former vice chairman, and longtime partner of Warren Buffett at Berkshire Hathaway, passed away recently age 99.

And the question is from our longtime listener and correspondent Ludovic H. once again, or Ludovic E.S. I'm not sure what to call him now. Ludovic says, "I don't think you should feel sorry for people when they have reduced eyesight." We were talking about Munger losing his eyesight. Ludovic continues, "I have it for most of my life since I've been born. I like the idea of equity stakes and companies you represent. In Netherlands, this is not allowed. But when it comes to bad eyesight, I'm now completing my third real estate purchase in Portugal combined with Cabo Verde and Vanuatu."

And then he goes on, he talks about some other investments that he's made. And then he says, "To be clear, I think it's a blessing. I missed most of the world, after all, the world is really a visual one. So I get insight and ideas from podcasts and books, which is great. Another benefit is that I can hear if someone is lying, which is handy. The police like to hire me, but I only work for nice and reputable organizations. The police in Eindhoven are not [inaudible]." I think he lives in Eindhoven in Netherlands. So he doesn't cooperate the police there, but he can hear a liar a mile away, apparently. Ludovic, thank you for this. I'm glad we heard from you. I don't know if I have a lot to say about this. But it's interesting.

Corey McLaughlin: Yeah, I just love this note from him. And I wasn't – I think I was the one who mentioned Charlie Munger going blind in one eye from a botched cataract surgery, you know, when he was in the, when he was relatively young. It's just a challenge that a lot of people never have to face in their life. And it sounds like love because obviously has the perfect attitude to deal with that challenge.

And, you know, listening the podcasts, books, I've seen, you know, I've and how he even wrote this e-mail to us, right? Like, I've seen, you know, blind or visually impaired people with the technology to do this in person. So it's yes, I totally respect his approach. I think a lot of people can, whatever challenge you're facing can take something from that, so...

Dan Ferris: Yes. Inspirational. I agree.

Corey McLaughlin: Yeah. All right. Now, we'll move on to a slightly less enthusiastic topic: the Fed. "You finally had a guest, Porter, on your show that talked about stocks. Instead of constantly talking about the stupid Fed, maybe try talking more about stocks. Just my two cents," says Peter V. What do you think about that, Dan?

Dan Ferris: [Laughter] Peter, I agree with you. We talk about it, because unfortunately, I think it's on a lot of people's minds. And I don't think it should be but since it is, you know, it's a weird topic. But in general, in general, I agree with you. When it comes to investing, it's about the individual investments. It's not about what the Fed is doing. The Fed can certainly have its effect on security prices in the short term. But over the longer term, and, you know, Warren Buffett has said this, you know what the Fed was like whispering everything it was about to do in its ear. And it wouldn't change anything, because he's a long-term investor. He buys great businesses, and he never sells them. So if you're that kind of an investor than none of this really matters very much. And you're quite right. I have to agree with you.

Corey McLaughlin: Yeah. My only answer to that was noted. We will [laughter], we will note the sentiment there for sure.

Dan Ferris: Yep. All right. You know, Thanks, Peter V. We're going to move on here to a note from Ken C. And Ken C. wants to talk about the topic of money as the root of all evil. And Ken C. says, "Hey, guys, I appreciate the thought-provoking broadcasts and info you put together for Stansberry Research. I thought I'd make you aware of something incorrect you and Porter were saying wrong in this week's broadcast. You guys were saying money is the root of all evil. The source of that adjusted statement is the Bible. Timothy I 6:10 says the love of money, you can equate money with anything material having money or possessions is not evil, but in necessity up to a certain point. But loving it is making it an idol in your life is evil. Ken C."

Corey McLaughlin: Yeah, Ken. I actually had that thought the love of money, but I didn't want to get into it because I feel like we all sort of know what we're talking about. But I still think the point we were talking about, we were talking about the money speech in Ayn Rand's novel Atlas Shrugged. And in the money speech, he starts out, the character starts out by saying, you know, he turns around, he hears someone blindly asserting that money is the root of all evil, and he turns around, and he says, "Oh, so you think money is the root of all evil? Have you ever considered what is the root of money?"

And I think you are correct that, you know, if we're, if we're citing the correct source, and we're quoting, right, we should say, "the love of money," and not simply money itself. But I still think the point is valid. I still think that, indeed, you know, lots of people think money is the root of all evil. You know, you don't have to spend a lot of time on Twitter to know that one. And I think that the money speech, it's like Porter was saying, it's one of those things that you really ought to read before you're out of high school.

Corey McLaughlin: Yeah, it's – yeah, appreciate the note, Ken. I would say this is more of a question for Ayn Rand than us. [Laughter] Yeah, the quote, actually is, "For the love of money is a root of all kinds of evil." So keep that in mind. Yes, I think everybody can keep that in mind when next time we're hear: "Money is the root of all evil." It's the obsession over it, the love of it, that will lead people astray. Which we see every day. So it's true. But yeah, that's a great passage from that that book for sure.

Dan Ferris: Yes. So the quote here from Atlas Shrugged, just looked it up real quick. "Money is the root of all evil," said James Taggart. "Money can't buy happiness. Love will conquer any barrier in any social distance. That may be a bromide, boys, but that's how I feel." And then it goes on for a little while. And what's his name, Francisco d'Anconia eventually chimes in and really gives it to him for, like, several pages. It's one of those things where she just goes off and generates, actually some really inspiring ideas and prose. And it's one of the reasons why you read her books. Anyway, I don't want to go too much into Ayn Rand, but you get the picture. And thanks for the note, Ken. Let's move on.

Corey McLaughlin: All right, we have another one here from Ludovic. Ludovic, do we want to – should we oblige another one? This one's on war.

Dan Ferris: Yeah. I mean, hey, he writes in more than anybody, so let's do it.

Corey McLaughlin: I agree. All right. He says, "Now we are marching toward a massive war between Israel, U.K., Netherlands, and Israel with Lebanon and Iran on the other side. I have a question: how to make money out of it? I'm extremely against every war. But with all government spending, I see massive profits." How to profit here, basically, what do we think? Profiting from war financially.

Dan Ferris: Yeah. You know, it's one of those kinds of unpleasant topics. It's like, hey, somebody's going to war. Let's see if we can make some money off of it. You know, it's a little rough. But the truth is, this has been a theme of mine for the whole first year of The Ferris Report, which is about a year old right now. And, you know, in that year, you could say, well, the S&P 500 has outperformed 15% versus about 12% for the defense contractor ETF's that are recommended, ticker symbol ITA. However, you know, since October the fifth, the thing has just absolutely screamed, you know, it's up about 18% or 20%.

So I think there's something to this, and I think Ludovic H. is right. There is an opportunity to own defense contractors. And there's probably a pretty decent opportunity to look outside the United States. You know, we're not the only country with defense contractors, so...

Corey McLaughlin: I'll throw another idea out there. Cybersecurity on a related note. I mean, that's the, the frontier of warfare digitally. So there's some interesting, smaller cyber companies that might be worth taking a look at that I know some of our editors have, you know, look at, to see if you know, that have different proprietary software, or you know, patents, those kinds of things that are, that are valuable. So that can be a good idea.

I was driving around the other day. And I was like, what if – I don't know why I was started thinking about this, but it was like, what is the power went out here for – or some cyber-attack happened here for, like, a week or two? How much chaos would that cause? I mean, I remember there was a blackout, I think, in the 2000s, right, on the East Coast, the Midwest, a little bit that knocked the power out for, like, the Northeast, I think, and that those regions. And that was short-lived. But the panic back then, and that was 15, 20 years ago.

Now, our reliance on, on all things digital is like, through the roof. You know, we saw this during the pandemic, everybody's just started ordering stuff on Amazon, and you know, working at home and everything else. Anyway, I don't mean to give any nefarious people any ideas, because I'm sure they have enough ideas already. But cybersecurity is my point. I think those companies will be important for a very long time.

Dan Ferris: Totally agreed. There are companies that focus on that in the defense contractor ETF's. So let's see, what do we got next here? We've got Jim W. on the death of the dollar, and government spending, and related topics. And Jim W. says, "Dan, at this moment, it seems that putting money into money market funds is a very good alternative to investing in T-bills. Why would someone not opt for putting their cash to work in a fidelity money market fund it will earn 5% interest like Treasurys, and it will be more readily available to redeploy. Can you explain why an investor would not want to put money into a money market and choose Treasurys instead? Jim W."

So this is kind of tangential to the death of the dollar and government spending. We'll get to that in a second. But I put it here because it reminded me of when the fidelity money market fund, I think it was called "Fidelity Reserve," I forget the exact name of it, broke the buck, basically kind of failed to maintain its value in 2008. And, you know, if you can find, there are money market funds that are solely in government securities. So if you can find one of those, I think, you know, that's fine.

But that is the reason why I focus on Treasurys instead of money market funds. Because there are so many money market funds, people might say, "Oh, fine, I'll just, you know, use my money market fund." They might wind up finding it has, you know, not as safe securities as Treasurys in it. So that's my thesis. I'm just saying, look, we know Treasurys aren't going to default. Like when these ratings agencies downgrade U.S. Treasury debt, they're making some kind of a statement. They're not, because there's zero chance it will default. Sure, printing the money to, you know, make sure they don't default is problematic.

But right now, getting 5% in Treasurys and by rolling T-bills, or buying two years or wherever you getting it in those government securities, I think is a is a good thing. And it's a good solid place to get a – finally get some kind of a decent return while you wait for other opportunities to crop up. So that's what I'm thinking, Jim. That's why I say Treasurys, not money markets.

Corey McLaughlin: Yeah, depending on your, how you have things set up there, there's also some tax considerations, I would say, to think about, too. Because there's ways to get exposure to T-bills indirectly through like a, like a Roth IRA, or something like that, where you're not paying the taxes on the, on the income, which can be useful as you know, in the long run if you've got a lot of them, I would say. So that could be another something to consider. I'm not a tax expert, but that would you'd want to consult somebody who does all your tax planning and whatnot, but that could be another reason.

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Corey McLaughlin: All right. We've got William S. here. Really getting at things here. Macro themes. We're going to it. "Key data points on basically death of the dollar government spending issues, our federal debt, U.S. federal debt reaching 33 trillion, interest on the federal debt reaching $1.3 trillion. China and Japan liquidating their holdings of U.S. debt, massive purchases of gold by central banks, movement by the BRICS nations to replace the dollar as the world reserve currency.

Regardless of your political leanings, if you agree with the emerging consensus, that we have reached a point where continued federal budget deficits cannot be financed by the sale of Treasurys. It is incumbent on you as a member of the financial community that you enlist the support of this community, and beat the drum for bipartisan federal fiscal restraint and immediate movement toward a balanced budget. The future of this republic is at stake." And that is Rod B. He's a frequent commenter to us, I believe, so.

Dan Ferris: All right. Well, let's storm the Capitol. Let's do it. Of course, I don't want to say let's storm the Capitol. That got Donald Trump in a lot of trouble. So, you know, "Go to the Capitol," I think is all he said. But yeah, let's do it, man. Pitchforks. Torches. I'm with you. [Laughter]

 

Corey McLaughlin: Balanced budget would be – it would be ideal. Yeah. But the numbers are, that you've throwing out there are all true. It's, like I say that I think recently, we're just seeing the early stages of the issues of this debt, the debt levels and the higher interest rates combined. It's just a different issue within the last 15 years, or 20 or 40, however way you want to say it. We don't, we don't know. I mean, we've seen bond market moves that are influenced by the amount of Treasurys that the, the Treasury Department needs. So it's, yeah, I'm all, we're all for it, I think, right, all for tightening the belt, where it can be tightened.

Dan Ferris: Absolutely. So Rod B., there's some other statistics that I'll throw at you. The latest from Bank of International Settlements, as of, what, last month here, across the three major currencies, they say the bulk of global liquidity is denominated in U.S. dollars. And that is $13 trillion of what they call their global liquidity indicators in U.S. dollars. Basically, this is outstanding international bonds and bank loans that total $13 trillion. And just denominated in U.S. dollars, but really, in euros and yen, you can add another $4.8 trillion to that.

So that's like we talked about the milkshake theory with Brent Johnson on a previous episode, and I've written – I wrote about the milkshake theory of this massive amount of, mostly, by far, U.S. dollar liquidity in the form of all this debt around the world that needs servicing. So I don't worry about the BRICS. They're not going to replace anything. They need dollars. They can't function without them. So that actually creates demand, and this scenario that you describe with these numbers, it's bad, but it's worse for everybody else.

Like the dollar is like, you know, it's "prettiest mare at the glue factory" worse, the worst thing in the world except for everything else. They all go before the dollar goes. You know, all those other currencies will have a lot more problems before the dollar goes. And you know, to the extent that the euro and the yen also have this kind of, you know, outstanding trillions of dollars of, you know, what Brent Johnson calls "the milkshake around the world," they're supported by that as well. So you have to go down the line and pick one other – pick one other currencies. If you're going to make some good bets against this stuff, pick on other currencies first, and the U.S. dollar will be the last one to fall.

So we have another question in this general vein from William S. And William S. says, "Thanks. Very informative interview with Peter Zion." And he is referring to episode 332, which aired October 23, 2023 called "It's the End of Globalization as We Know It". And William S continues: "One thing Peter did not touch on was the development of BRICS Plus as a geopolitical and economic power. Brazil, India, Africa, and South American countries have growth, demographics and plenty of natural resources. Clearly, there's the potential for a serious new competitive force on the global landscape. Please sign me up for your next podcast."

Yeah, you can go to www.investorhour.com, William, and sign yourself up, and we'll send you an e-mail every time a new episode comes out. And I'm not denying that these countries are an economic and geopolitical power. And I'm considering recommending investments in some of them soon. And you know, you mentioned Brazil, India, South American countries, other South American countries, as well. And I agree, as geopolitical and economic powers, they're interesting for investors. You know, as far as getting rid of the U.S. dollar goes, eh, not so much.

Corey McLaughlin: Yeah, I'm in agreement with you there. Of all those countries you mentioned, you know, India is the one, if we're talking economic growth and growth areas, that piques my interest. Again, I don't think it's a knock-off the United States in the next 10 or 20 years. But their middle-class is – has been growing, and is projected to continue to grow for a long time. And the economy in general is supposed to become the third largest economy in the world by 2027, so – India's is.

And so to that point, there is reasons to think of these of India in particular, kind of getting a bigger perch on the on the global stage. And I think there's places to, that's probably – I would look at that as an opportunity for investment, rather than a threat to the United States. Although, I do think the share of, I think there's like this gradual chipping away of the U.S. power. But, you know, there's still, I don't know, until further notice, the U.S. is still kind of dictating monetary business policy around the world.

And, you know, that's what comes with that, quote, "reserve currency status." But yeah, there's, there's obviously a lot of stuff going on and the rest of the world, too. We look at it from this U.S.-dominant perspective, or I do. But yeah, India has my attention, big time as well. More so than China. And you know, China's going in the opposite direction. India's going in the positive growth direction. So yeah...

Dan Ferris: Mm-hmm. Totally agree. In fact, nothing to add. What you said, yes. All right. Oh, looks like we might only have one question left. Do you want to take that?

Corey McLaughlin: Sure. "Hi, Dan and Corey. Love the podcast and always have questions. So I finally decided to write in." This is kind of what we were just talking about. "With all the talk about losing purchasing power and the demise of the dollar, it made me think what happens if the dollar is no longer the world reserve currency. So you've stated in the past, the reserve currency tends to change every 100 250 years. What happens to those countries?

For instance, everyone thinks losing reserve currency status is all doom and gloom. But England was the last country to hold that title, and they still seem like a productive, powerful country. Just thinking outside the box, but in the long run, is it possible the U.S. would benefit from not holding that title? It just seems like whoever holds the reserve currency is constantly being asked to fix problems that we know governments don't know how to do." That's Josh B. I totally agree with that last part.

Dan Ferris: Yes. [Laughter] Absolutely.

Corey McLaughlin: Heavy is the head that wears the crown, right? Yeah, we've obviously, at this point, probably creating more problems around the world than benefits. It seems like. So yeah, I'm totally on board with that idea. Yeah, well, we had England, he mentioned. Who was before that, was considered the reserve currency? France.

Dan Ferris: Yeah, Netherlands.

Corey McLaughlin: Yeah, Netherlands, Spain, and then Portugal going back to 1400, 1500s. So yeah, as you can imagine, all those countries are still around. They're just in different pecking order on the world stage. So the U.S. can accept being second fiddle to somebody. It shouldn't be a problem. But I don't think that's in the cards, just laying down global financial dominance, voluntarily, as much as it looks like we might be doing it voluntarily, anyway.

Dan Ferris: Right. I think that, you know, Josh B., you asked about what's the, in the long run, the possible benefit? You know, I think we get so much benefit from being the number one reserve currency, losing that, it takes away your ability to sort of engage in all manner of shenanigans. And it takes away that, you know, there becomes less demand for it, globally, right. So, right now, we enjoy this privileged position, or the U.S. dollar, I wouldn't say "we." I didn't do it. The U.S. dollar enjoys this privileged position. And that keeps demand for it rather high.

And if demand for it weakens substantially, you know, I think that'll create at least some near-term problems. Or it will actually not create them. It will prevent us from papering over, or make it a lot harder to paper over problems in the United States. And, you know, that could be, that could be troublesome for a lot of people. But it's a good question. And it's a great way think. I love the way you're thinking. What, you know, we talked about why it's bad, what could be the benefit of it? And, and you have a good handle on it, you know. We won't be necessarily, people won't be looking at the United States, maybe to paper over their problems, right?

We've got we recently had Volodymyr Zelenskyy making another trip to the United States to say, "Hey, I need you to print some more money and send it my way." Because we're not – we're certainly not taking it in in taxes. So maybe we'd get a lot less of that. And wouldn't we all love that? Great question. Excellent question. And actually, they were all very good questions. I'm glad we did this.

But I think if I have a takeaway, it's, you know, concern with big, with big macro themes, right? War, government spending, death of the dollar. And you know, housing... how's the whole housing market going to look? And energy. Yeah. So it's funny, because I think like one of the big mistakes people make is that they get too caught up in macro themes. And they're not focusing enough on bottom-up investment opportunities.

As long as you don't use the macro themes as a reason to become overly bearish and present – prevent you from finding really good bottom up investments, and buying shares of really great cash-gushing capital efficient businesses, and holding them for the long term. Sure, go ahead. Worry from the top down, but remember to keep investing from the bottom-up is what I would say. Any thoughts about all this?

Corey McLaughlin: No, that was very well said...

Dan Ferris: All right.

Corey McLaughlin: ... I think. Yeah, we've covered a lot. Yeah. Thank you for the questions as always. We'll try to do these more often, and as we can. And yeah, I love hearing from everybody.

Dan Ferris: As do I. And that's another episode of The Stansberry Investor Hour. I hope you enjoyed it as much as we did. We do 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 liked this episode and know anybody else who might like it, tell them to check it out on their podcast app or at investorhour.com, please. And also do me a favor. Subscribe to the show on iTunes, Google Play, or wherever you listen to podcasts, and 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 us to interview? Drop us a note at [email protected] or call our listener feedback line, 800-381-2357. Tell us what's on your mind and hear your voice on the show. For my co-host, Corey McLaughlin, until next week I'm Dan Ferris. Thanks for listening.

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