Episodes

Announcer: Broadcasting from the Investor Hour studios and all around the world, you're listening to the Stansberry Investor Hour. Tune in each Thursday on iTunes, Google Play, and everywhere you find podcasts for the latest episodes of the Stansberry Investor Hour. Sign up for the free show archive at InvestorHour.com. Here's your host, Dan Ferris.

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 my Stansberry colleague, Tom Carroll. Tom is one of the best health care analysts in the world, period. We'll talk about cannabis, and I'll ask Tom to tell us about one of his favorite cannabis stocks today.

This week in the mailbag, lots of great feedback about our previous guest, Kevin Muir. Listeners Richard and Brian both want me to talk about physical gold. I'll do that. Plus questions and comments about bitcoin and Jay Powell and a couple other things.

In my opening rant this week, we'll talk about the highly speculative global market, SPACs, Bloomberg, and maybe a few other items of interest. That and more right now on the Stansberry Investor Hour.

OK, let's do a little housekeeping and just catch up with a couple of previous items that we have discussed, one of which is the incredible amount of speculation, which is I suppose best represented by all of the 13 million-plus – actually, that's an old number. It's more than 13 million now, I'm sure – all of the 13 million people who signed up on Robinhood and the millions of people who have signed up just for regular brokerage accounts this year, that all of those numbers are soaring with people locked down by the COVID-19 pandemic. Of course, they've turned the market into a casino. They're day trading like crazy.

And I came across a really neat piece on Substack by a guy named Akram's Razor, and he pointed out something that I was kind of marginally aware of... but it bears repeating, and it bears pointing out, I should say. The part that bears repeating is just that all bubbles, all equity bubbles and all credit bubbles and bubbles in general, they're generally accompanied by this phenomenon of, call them retail investors if you want to be real polite, or newbies, or idiots who don't know what they're doing.

But however you want to identify them, they always seem to be there. They were there in the Internet bubble. They were there during the Japanese carry trade. You may remember people used to talk about Mrs. Watanabe, and Mrs. Watanabe wasn't a real person. It was just the typical Japanese housewife who, between cooking meals and taking care of the family, was a force to be reckoned with in the foreign exchange trading market. It was crazy.

And of course during the financial crisis, the run-up to the financial crisis, the housing bubble, the China stock bubble in 2015 – an army of day traders there – and, of course, today there's the Millennial Robinhood crowd and folks like Dave Portnoy egging them on. They're always there, right? They're always there in a bubble... the newbie, uninitiated naive traders.

And they're there now. They're there opening Robinhood accounts. They're opening TD Ameritrade accounts, E-Trade, Charles Schwab. All those numbers have soared either big double digits or triple digits, more than 100% over last year at the same time.

However, what I was only marginally aware of, which this fellow Akram's Razor points out on Substack, is that this is not a pure U.S. phenomenon. This is a global phenomenon. He talks about European and Japanese traders. He says they're just as likely to be trading Tesla as they are stocks in their own markets.

He says there are people from India trading with Robinhood-like apps, which have allowed millions of new traders to access the U.S. market in ways that we kind of maybe didn't even anticipate. Then there's Russia. There's some of this nonsense going on in Russia where new accounts are soaring and day traders are just frothing up the market. In China, a couple few million new brokerage accounts opened up just in the past couple months.

So you see where we're going with this. The equity bubble is a global phenomenon, and I would say the asset bubble in general is a global phenomenon. Some people say this is the biggest bubble in history, and we are definitely in a bubble because people are trading, there's a lot of speculation, valuations are greatly elevated, and there are just newbies everywhere. There are people who don't know what they're doing everywhere.

And you can see it in securities prices. Stocks will go up. You'll see things like Hertz or some crazy company that probably shouldn't even be trading at all, and it'll double in one day or something. Just crazy stuff, and it's all over the world. I just wanted to point that out.

Another person called the New – well, it's a publication. I think it's just one guy, though. I'm not really sure. It's called the New Low Observer, and the New Low Observer published some interesting charts about what happens after you get a big speculative run-up and then a crash, and it basically published these charts that show the Dow Jones Industrial Average from 1906 to 1924.

That is a serious stretch of time, right? It's 18 years, almost 20 years. It's the better part of two decades where the market just was basically sideways. It was up and down. It was really volatile. It faked you out, and you thought there was a new bull market at one point, but it was just sideways ratcheting. It was brutal.

And so then overlapping with that from the early 1920s and 1929 – of course, a huge bubble, right? What else do we have? He's got 1966 to 1982. Of course, there was a big tech bubble, and there was a huge bottom in the early 1970s. But really, from 1966 to 1982, again it was that same ratcheting, volatile, sideways action. It faked people out, and they thought there was a new bull market. And then, wham, a brutal bear.

And then we get from – he's got 1978 to 2000, the market up 1,500%. And then 2000 to 2016, depending on if you look at the Dow or the Nasdaq or whatever, I think the Nasdaq is a better picture of just sideways action, not as brutal, kind of brutal about halfway through there into the 2009 time frame, but sideways.

The point there is obvious. We could be looking at a huge run-up, right? My colleague at Stansberry, Steve Sjuggerud, says we're still looking at the prospects of an ongoing Melt Up. But now, for the first time I've heard him talking about it, he's talking about what happens after it. He says this could be the last year before the ultimate Melt Down.

What I'm saying is, after that Melt Down, you'd really better learn to be a value investor because if the market ratchets sideways and you get these sharp up-and-down moves over, what, a decade or two decades or something like that, you'd better only be buying when stocks are really cheap.

Of course, yes, I'm still a value investor, right? I'm always going to be – I'm always going to take the opportunity to let you know when I think value is a good idea.

And in the speculation department, let's just keep talking about speculation a little bit... There was a neat article on Bloomberg.com recently where they talked with Jim Chanos, the famous short seller. I met Chanos once at a conference that I used to go to before the lockdown. We didn't get to do it this year. We do it every year in Vail, Colorado.

He was there one year, a real nice guy. He took any question you wanted to throw at him and gave a real thoughtful answer. Rich guys who know everything ought to be nice guys, right?

Of course, he said this is the golden age of fraud. And he thinks the blank-check company deals – the SPAC deals that we talked about with our guest Enrique Abeyta a couple episodes ago and which I have talked about as kind of a sign of – I do agree with him. It's a sign of speculation, and he thinks these deals are driven by speculation, he says.

Now, of course, as we agreed when I talked with Enrique... yes, I believe the blank-check company and the SPAC deals are a sign of speculation. But somebody like Enrique or even me and my colleague Mike Barrett in the Extreme Value newsletter... we have the ability, I believe, to dig in up to our elbows and find good deals.

And there might be one in Bill Ackman's SPAC offering called Pershing Square Tontine Holdings – PSTH is the ticker symbol – because there is this article. It's actually in the New York Post. That's the only place where I found it discussed was the New York Post. So maybe by the time you hear this, there might be more talk about it.

But basically, the idea is that maybe – Bloomberg and Ackman, they know each other. Ackman supported Bloomberg in his run for, what, mayor of New York City or maybe in his presidential campaign or something. He supported him politically, and so they got to know each other and they became friends.

The New York Post I think is saying here, "Hey, these guys are talking, and maybe Ackman's $5 billion SPAC company is going to buy maybe as much as 20% of Bloomberg." Michael Bloomberg's amazing business with over 300,000 subscribers to the Bloomberg Terminal, paying like $20,000 a year...

Some firms are one Bloomberg Terminal firms, so they pay like $24,000 a year. But most people pay $20,000 a year for one Bloomberg Terminal. So it's a phenomenal business. This guy has built a phenomenal business.

And I think they're saying it might be worth something like $60 billion, and Ackman might be able to get as much as 20% of it into his $5 billion SPAC company. Not sure how they would finance the remainder of that, but it's interesting.

I'll tell you, if he actually does it, and if the valuation is anywhere near right, that could be a pretty – the day that deal gets announced, that stock is going to pop because that is a business that has been private for a long time. Everybody knows it's a phenomenal business, just a cash-gusher.

The revenue stream – of course, people depend on this thing. If you take some people's Bloomberg Terminals away from them, they're worthless. You're like, "What are you doing? You just can't do it."

And there is competition. There are other services. There's FactSet, Capital IQ is another one, and others. There are starting to be others.

But, man, there's only one Bloomberg as far as I'm concerned, and if that thing goes public, if a portion of it goes public via the Pershing Square SPAC company, that could be really, really cool. I'm not saying it's definitely a buy, but I'm saying I'd be really, really interested in finding out more.

That's the way it is, right? Amazon went public in the era of the Internet bubble, or really just before it became a huge bubble, right? They were one of the most touted stocks, and the thing just soared and then crashed.

But the truth is, it was a phenomenal business. If you read that first Amazon letter and took it seriously, you realized that something great was born back then in 1996 or 1997. The letter came out in '97. Of course, you don't need me to tell you what's happened since then, right?

So when you get these bubble events, good things do happen during them. People get too crazy about them, and it becomes too speculative. The valuations go too high, and there's a big crash afterwards. But good things are born during bubbles. Bloomberg was born way before this.

But if out of this SPAC frenzy – and most of these deals are trading below their IPO price, their usually $10 IPO SPAC price. We covered this. We talked about this. Most of them are going to suck, but some of them are going to be phenomenal, and this could be one of them. You get the picture. I don't need to beat that horse anymore.

I do want to talk a little bit about bitcoin because I'm just noticing that bitcoin is up lately. It's doing really well. As I speak to you right now, it's up about 15%. It's pushing toward $13,000, and it was below $10,000 not too long ago. I know it was $10,000 within the past month.

But it was below $10,000 as recently as – I'm just eyeballing a chart here – it looks like July, and here we are pushing toward $13,000. Who knows? It's volatile. It could be back to $10,000 by the time you hear my voice.

But I think it's really cool, and it could be related to the election. Maybe people are afraid in – I think people are afraid in a number of ways about the election, but one of them could include a Democratic presidency being much more interested in issuing a lot more debt and doing a lot more stimulus than you might get with a Republican administration, just in general terms. And, of course, that means issuing more currency.

So maybe people are saying, "Oh boy. I think before this election I want to stock up on bitcoin." And as I eyeball the charts, the thing is making a new more-than-one-year high. Let's see, just eyeballing, this is back to 2018 it looks like. It's making maybe a two-year high, almost a two-year high.

So that's pretty cool because I've been recommending bitcoin I said since last December, but it's really been since February, as a hard currency. That's my understanding and my view of bitcoin.

There's roughly speaking I think about 18 million of them out there right now. There's never going to be more than 21 million, and that's not going to be until about 120 years from now. That's the rate – the slow, slow rate – at which these things will come into existence.

You can't say that about the U.S. dollar. There could be twice as many of those in existence in a heartbeat, and realistically, in a year or two or three or whatever – in a very short period of time, a lot less than 120 years, right?

Bitcoin so far has been designed as a much harder currency than any of the fiat currencies in existence. And so far, it's lived up to that. There was a big speculative run-up. It went to, what, basically $20,000 in December 2017, and then it crashed, and now it's back.

So you can argue, well, this thing isn't behaving like a currency. We talked about that in a recent episode. But I think people are figuring it out, and they'll figure out how hard it is and how well managed it is just inherently because of the way the thing is designed.

God, if it were making new all-time highs by the end of this year, nothing would surprise me with bitcoin, nothing at all. And I'm not saying, "Rush into it. It's moving up." That's not what this is about. I'm just saying it looks to me like people are figuring bitcoin out, and the price is moving up.

I still believe that there is 50-, 80-, 100-bagger potential in bitcoin. Yes, 50- to 100-bagger potential from where I originally started talking about it not too much lower than here, around $10,000, just say, because the market cap is only $230 billion now. Now the market cap, as I speak to you, is exactly $235 billion and change.

And if you replace any amount of the tens and tens of trillions of just U.S. dollars, let alone the tens of trillions' worth of other currencies in the world, with bitcoin, they're not going to print it up like dollars. So the demand will hit a limited supply, and the thing could soar. It could be six figures like that [snaps fingers], a seven-figure price like that [snaps fingers].

That's why I think you should hold even just a little bit. Even if you just hold $1,000 worth or $500 worth or whatever you can afford, you can get an enormous benefit. If you're holding that small amount, that's your maximum loss, and I don't think it's going to zero.

In a speculative world where people are bringing all these SPAC companies, it's like a Forrest Gump market. The SPAC is like a box of chocolates. You don't know what you're going to get.

In a world where there's heavy, heavy speculation all over the world and enormous incentives to print and print and print money, as we discussed last week with our guest Kevin Muir, owning bitcoin and gold and silver, but just focusing on bitcoin for the moment, it makes all of the sense in the world.

In fact, I would say, if you don't own at least a little bit of bitcoin, you're not as truly diversified as you ought to be. I want that to be the last word on it, so I'm going to leave it there.

OK, that is all I want to talk about. Now let's talk with Tom Carroll. Let's do it right now.

I want to tell you about something my friend and colleague, Dr. Steve Sjuggerud is talking about. He just told 500,000 of his followers to move their money before 2021. It's coming up in a couple of months.

He says it's the biggest financial event in 20 years, and I know that he's not talking about the COVID-19 crisis. It doesn't have anything to do with that. It's a huge market trend that Steve says it was already in place and already turning people into millionaires before the pandemic was anywhere on the radar screen.

Obviously, there is a window of opportunity here that's closing in a couple of months because Steve said you've got to move your money before next year, before January 1, 2021. He's going to talk about this thing and tell everybody about it at www.MassiveMarketEvent.com.

That's where you can learn all the details of why Steve Sjuggerud says it's the biggest financial event in 20 years and you need to move your wealth before 2021: www.MassiveMarketEvent.com. Check it out.

All right, it's time for our interview. Today's guest is Tom Carroll. Thomas Carroll is one of the most respected and longest serving health care analysts on Wall Street. Prior to joining Stansberry Research, Tom worked at Legg Mason and then Stifel Financial in Baltimore for nearly two decades as managing director and senior analyst of health care.

His research was used by institutional investors, newswires, and health care-specific publications as well as CNBC, Bloomberg, CNN, and Fox Business. He has also consistently ranked in industry stock picking awards, including top five finishes for stock picking from StarMine, the Wall Street Journal, and Forbes. And he was ranked by Fortune magazine as the No. 1 U.S. health care analyst.

Now at Stansberry Research, Tom is the editor of Cannabis Capitalist, a newsletter dedicated to helping you navigate and profit in the cannabis sector. Tom Carroll, welcome back to the program, sir.

Tom Carroll: Oh, thank you for having me. I appreciate that.

Dan Ferris: Before we talk about cannabis and making money off of it and all that good stuff, and other topics as well, of course, I want to talk about auto racing because you're not just a fan of that, you are a practitioner, are you not?

Tom Carroll: I am, I am. It's one of my expensive habits that I can't give up. I love everything motorsports: working on cars, driving them quickly around a track, changing out brakes, all kinds of stuff.

Dan Ferris: Wow, that's very cool.

Tom Carroll: It's better than my golf game.

Dan Ferris: When you race, what kind of car is it? Where do you do this?

Tom Carroll: So my home track is in the mid-Atlantic. It's technically in West Virginia. It's called Summit Point Motorsports. It's just on the other side, just west of Harpers Ferry from a geographical perspective. It's an old historic track. There are actually three circuits there of different difficulties.

Today, I mostly spend time instructing other people that are trying to get into the sport and hobby. There's not a lot of actual racing, but we do some time trial stuff. So we're racing the clock and then teaching others.

Dan Ferris: Well, that sounds like a hell of a lot of fun, man. I'm a huge motorsport fan myself. I'm openly jealous here, I'll just admit it. I'm jealous, OK? I think it's really cool.

Tom Carroll: Well, come on out, man. I'll put you through your paces.

Dan Ferris: I'm one of these people who's so inept, if you throw a manual transmission in front of me, it half shuts me down, but sure.

Tom Carroll: You actually might be too tall for my car.

Dan Ferris: Anyway, that's really cool. I just wanted to cover that because I'm a huge fan of the sport, and I think it's cool that you do it.

So let's talk about pot, man. I live in Washington, the state of Washington. I'm telling you, the difference between Washington and our next-door Oregon is huge. We have so much good stuff up here, if you're into it, I guess.

You can get so many more different strains and products and all kinds of things, whereas in Oregon, not so much. It's a topic like forests and salmon. It's in the air out here is what I'm trying to say.

What I want to know from you is, there is a real problem in this market, as I see it. And that, of course, is the issue of federal legalization. Any time they want to, the federales can just – they could if they wanted to just stomp through the door legally in any state where pot is legal, correct?

Tom Carroll: They technically could do that, yes.

Dan Ferris: They don't, but they could if they wanted to, and that's kind of a problem, I think. It's certainly a problem at this point on the banking end, right? They bank in cash. It's sort of weird. You have to pay for everything in cash when you go to these places.

And so banking is a bit awkward for these folks, and federal legalization would change that. But you think maybe federal legalization is not out of the question. Maybe it's even inevitable. Would you say that?

Tom Carroll: I would say that, and I would say we are within months, not years, of some type of meaningful federal legislation. I think of legalization as a spectrum at the federal level. I don't think it's going to be all or nothing.

And so steps to get to complete legalization are things like the SAFE Banking Act, as you mentioned, that banking and working with federally regulated financial institutions – they can't do it today. That would be a step in the right direction.

The STATES Act is another bill that would allow – basically, it wouldn't technically federally legalize it, but it would allow states to do whatever they want with a guarantee of no federal focus coming in there.

Dan Ferris: And this is regardless of who wins the election next month?

Tom Carroll: Totally agree.

Dan Ferris: Wow, OK. So in other words, both Trump and Biden feel like this is something that would be easy for them to get behind. That's kind of good to hear.

Tom Carroll: I think it would be stronger with a Biden win. With a Biden win and the Senate that goes Democrat, it would be almost a certainty. You would see cannabis stocks move overnight. In one day, you would see a huge upside to all these stocks.

With a Trump victory, I think you might actually see some of the cannabis names pull back a little bit because the upside from Biden is now gone.

However, that doesn't take away from the fact that we will have upwards of or actually in excess of probably 40 states right now across the country that will have some type of legal cannabis program. So the horse is out of the barn, as they say.

Dan Ferris: Cool. Actually, I'm just curious. Have you heard of any instance of the federal government doing what we said before and going into a place where cannabis was legal to some degree in one of the states and causing a problem? Have you heard of any instances of that? Because I am not up on this.

Tom Carroll: Not in years and years has that occurred. Under the Obama administration, there was an understanding – an official understanding, if you will – between the federal government and legal state markets that said, look, we're not going to come in and meddle.

That changed a bit with Jeff Sessions. When he came in and was appointed by President Trump, he took a bit more of an old-line view on it. But that was quickly rebutted by a lot of the states that came in and pushed back against the administration and essentially got a promise from President Trump that his administration would not go after state legal programs at this point in time.

I guess the only state that I think that has – again, this is less federal and more state-focused – that really is not on board with any kind of cannabis yet is Idaho. Primarily, I think what you're seeing there is hemp. Hemp became federally legal with the 2018 Farm Bill.

So hemp farmers that are transporting their plants – their harvested plants, which we call biomass – across state lines, across Idaho, to be processed and made into oils and lotions and various things, there's been instances of the state stopping and confiscating all of that biomass.

Again, that's a state action. It's not a federal action. But the leadership in that state is more aligned with the federal government's technical rule against cannabis than not. That's really the only near-term thing, and I think that was two years ago, if I recall.

Dan Ferris: Idaho, I wouldn't have guessed. In a recent issue of your Cannabis Capitalist newsletter, you had this list of five reasons why you thought the table was totally set for federal legalization, and we've covered the political angle, right? You said the votes are there in the House and the Senate, and Trump and Biden both would get behind this.

But you also talked about a bigger hunting ground for medicines, and this is something I have always wondered about because if I want to be a real conspiracy theorist, I'd say, well, the Big Pharma companies don't want this to happen. They don't want cannabis to be legalized. And then I would ask you, or do they? And is it a problem if they don't?

Tom Carroll: I think they do. It opens up, from a legal standpoint, this brand-new, robust, broad botanical with which to search for compounds that can be put into medicines. Of all the medicines that are out there, I think like 70% of them are originally derived from botanicals, plants. Because of federal illegality for the last 50 years, that's essentially been off-limits.

Now, some folks that are really in the details of this stuff might say, "Well, Tom, that's not quite true." The University of Mississippi is a location where they actually grow cannabis plants. It's all regulated, and they supply cannabis to anyone that wants to study it.

And while that's technically true, that hasn't proven to be a meaningful avenue of study. The plants aren't that good. The quality is not good. That effort, if it was one at all, has really not worked out.

I believe that pharma would very much like to see that. In fact, once we do get some kind of clarity on federal legalization, I think the pharma companies are going to be buyers potentially of existing cannabis companies.

Dan Ferris: So government behind it. Big Pharma behind it. Done deal – that's what it sounds like to me.

Tom Carroll: Well, yeah. There's a whole host of just common-sense reasons why this would happen, and it's again amazing to me that it hasn't happened yet. Again, I'm not a consumer. I'm not a pothead. I'm an analyst, right?

And I first got interested in this when I did a private investment in what's now the largest cannabis company in the state of Maryland. Looking at it back then with my analyst hat on, I'm seeing all these reasons, and I just can't believe that the ball has not been moved further down the field.

The things I highlight as these five key things primarily why legalization is ready to go, they're not new things, right? But I think in the last year with the global pandemic, they have all been really, really highlighted. They've been amplified.

For example, tax money. I just saw a thing yesterday, as a matter of fact, that said year to date the state of Illinois has collected $100 million, or rather over $100 million, in tax revenue, brand-new tax revenue to the state because they became a full recreational-use state January 1 of this year. Those are tax dollars that have to be mouthwatering to a whole lot of state leadership right now.

Dan Ferris: Right. Not all states are in great financial shape. So I would think that they would be, as you say, just – their mouths are watering at the prospect of legalization. They would have to be behind it, too. So there's a lot of support for this it seems like.

And just a little technical question – I don't know if you can answer or not – but marijuana, or cannabis, whatever you want to call it, is it not a Schedule I drug, meaning it's in the same category as heroin, LSD, ecstasy, quaaludes, peyote, all this stuff. And Schedule I, according to the government has no currently accepted medical use and high potential for abuse, which who knows? I've heard of people doing LSD therapy. I don't know.

I assume that a federal initiative would get marijuana, which never should have been there in the first place, off of the Schedule I list, if it's not already.

Tom Carroll: Correct. I think that's absolutely the case. And you're right about it being a Schedule I narcotic, supposedly having no medical value, highly addictive, etc. Of course, both of those things are incorrect, as time has shown us.

I think that as we look at the different federal legislation, the most comprehensive one right now is called the MORE Act, which stands for the Marijuana Opportunity, Reinvestment, and Expungement Act. That would go a long way. It would completely deschedule cannabis from Schedule I.

It would also go back, and it's got a big social justice component, and expunge the criminal records of folks that were incarcerated because they had two or three ounces of a dried leaf on their person. To me, that's the vehicle that really gets it done.

Dan Ferris: Yeah, that is an absurd situation, isn't it, and that should be reversed. I'm curious, Tom. Do you have kids?

Tom Carroll: I do. I have two children.

Dan Ferris: How old are they?

Tom Carroll: I have an 18-year-old, and I have a 13-year-old, both girls.

Dan Ferris: Hmm. What do you tell them about what you do for a living?

Tom Carroll: My 18-year-old is a new freshman in college, and she's following in my health care footsteps. She wrote her first public health paper on legal cannabis. So she's obviously been reading my stuff and listening to what we talk about.

They hear it all. They hear it from me. They hear it from their mother. They hear it from school. I think they're in pretty good shape. There are no secrets here.

Dan Ferris: Right, but the thing I'm curious – and if I'm prying too much, just let me know. The thing I'm curious about, has there been a conversation where you said, "I'm behind the legalization of this, but I don't use it, and I don't think you should, either"?

Tom Carroll: Yes and no. As a parent, there's been conversations about drug abuse and alcohol abuse and you shouldn't be doing things like that that are harmful and can impair you mentally and blah, blah, blah.

But there's also an understanding that life's a balance, right? Parenthood is a balance, raising kids and arming them with information. I remember years ago someone saying to me, "If it's a pill, stay away from it. If it's a plant, don't necessarily run towards it, but put that in the proper perspective."

Yeah, they know that I'm not a user, and they have all the information that I have about it. As parents, one of the goals is arming your kids with as much knowledge and information and wisdom as possible to set them free and have them hopefully make good decisions.

Dan Ferris: Amen, yes. I do know people who think all of this marijuana legalization is a giant mistake, and they hate it. They're worried about their children. I don't think it's a – it doesn't seem like a valid argument to me because one of the things that makes this issue so difficult for me is that I don't understand how anybody thinks that they make the market for marijuana go away by making it illegal.

Your kid's still going to get it. His friends are still doing it at school. And if he wants it, he will find it. It's sort of like putting your head in the sand to believe otherwise.

And I feel that way about the other drugs, even the Schedule I drugs: heroin, LSD, whatever, ecstasy. If your kid wants to get them, they are out there. There is a market for them. I don't know if making them illegal and throwing people in jail for a long time and kicking doors in and shooting people for dealing in this stuff is really a good way to run a society.

Tom Carroll: I tend to agree with you. Just sticking with cannabis for a sec, the market right now, it's a $50 billion market. The vast majority of that is not taxed or regulated, which makes it certainly more dangerous in that if you're buying something off the corner, you don't necessarily know what you're getting.

In terms of other illegal drugs – heroin, cocaine, and the like – I think it comes back to let's look at the data. Let's look at information. And it seems quite clear that those other very illicit and toxic drugs probably shouldn't be out there.

But that being said, again, I guess I'm getting into some personal opinions, but you look at places like Portugal that have completely legalized everything and have said, "Have at it if you want. You can make your own personal decisions, but there are consequences."

I think it's Portugal. I'm saying that now and feeling like that was not it, but I think I'm right on that one. Have you heard that, Portugal?

Dan Ferris: Yeah, I was going to ask you about Portugal because my interpretation of what's happening there is they said, "Well, this shouldn't be a crime."

It's like being a drunk, right? Drunk driving is illegal, but being a drunk is not. Using alcohol and abusing alcohol itself is not illegal. So what's the difference, really? And what is the difference? I don't know if there really is one.

Tom Carroll: Well, alcohol is far worse physiologically on your body than cannabis. Cannabis is also not addictive, and you can't overdose on it, versus alcohol poisoning and addiction there.

So there's a lot of conflict out there in the policy, and I think it all goes back to – to me, it all goes back to the War on Drugs policy really starting in the 1960s and then the 1970s and getting hammered down even further in the 1980s, and just the political machine that put all this information out there, propaganda really.

Those beliefs about cannabis are still really, really strongly held by a lot of people, as you point out, the people that you have mentioned that say, "This is really, really a bad idea."

Dan Ferris: Well, yeah. It's even older than that. Reefer Madness came out in 1936. I don't know if you've ever seen it, but it's insane. It's just insane.

Tom Carroll: Yeah, I have. But from a more modern policy perspective is where I was dating it to.

Dan Ferris: Sure.

Tom Carroll: So call it the last 50 years of modern television and radio that has pushed all of this out to the world.

Dan Ferris: All right, so let's talk about this as an investment now. In your Cannabis Capitalist portfolio, 2019 was a tough year for cannabis. You still managed to outperform the pot index. In other words, you were down less than the pot index, which really got hammered last year. But 2020 has been very, very good to you, has it not?

Tom Carroll: It has. The year has worked out well. Back at the beginning of the year, I like to write an annual report, an outlook on things that are happening today, what we expect over the year, and other major issues that may influence equity valuations.

I really felt strongly that things were going to be better in 2020 from a stock perspective than we saw in 2019. 2019 had a lot of I guess what I'd call externalities that impacted stock valuations, but really didn't impact things like revenue and earnings going in the right direction.

Eventually that stuff catches up, right? If you've got good revenue growth and you've got good earnings and good management, eventually the ship is going to right itself. And that's certainly what we've seen this year.

Dan Ferris: Yeah, but the pot index, it's down. But your Cannabis Capitalist index is up almost 60%. What's the difference? The stocks you avoided really got hammered. What made you avoid them, and what made you pick the ones you picked?

Tom Carroll: Well, I think a couple things. No. 1, it's good old-fashioned equity research, right? We want to dig into organizations, and we want to invest in organizations that have great management teams, a good strategy for sales – because that's the No. 1 metric when you're a relatively new company – and access to capital, and good beliefs about just being a good steward of investors' money, right?

If that characteristic is there, that goes a long way. So I think a big part of it was just trying to identify the companies that had a lot of staying power.

The ones we avoided were primarily Canadian stocks. Now there's a lot of confusion around that because I like to say only invest in the U.S. companies. Those are the ones we really like right now. But people interpret that by meaning "traded" in the U.S., which is not the case.

We want to invest in cannabis companies that are actually doing business in the United States, the biggest market in the world, but they can't be traded here. They've got to go to Canada, and they've got to be traded on the Canadian stock exchanges.

So investors in the United States can gain access to those stocks through the over-the-counter program. Any investor can buy most of these stocks through a TD Ameritrade account or Fidelity or however you go online, except for Robinhood. That's interesting. Robinhood does not trade over-the-counter stocks. So I think that's been a big issue.

The United States companies have been doing really well. They're growing revenues. More states are legalizing, whereas Canada is a federal program, all legalized at the end of 2018. But then the federal Canadian government didn't necessarily – the provinces didn't do what they ultimately said they were going to do.

So it was a battle between all this new capital coming in, building cultivation facilities, growing the plant, and then not really having anywhere to put it or anything to do with it. And that still kind of exists today, although it's getting better.

So we've actually seen sequential revenue declines at a number of the Canadian companies, whereas if you look at their United States counterparts, like Green Thumb Industries or Curaleaf, you're really seeing revenue grow sequentially and year over year in a big way, as we would expect to see in a big growth market like this.

Dan Ferris: OK, so as soon as you say Canadian stocks were ones you avoided, my mind went to shady stuff that was taking public in Vancouver. Vancouver is one of the biggest places for fraud in the world. But you made it clear you did not mean that you were avoiding –

Tom Carroll: The Canadian companies going public?

Dan Ferris: Right, because they were shady Vancouver-traded companies. You explained something different than that.

Tom Carroll: Right. I'm saying I want to invest in the U.S. I want to invest in companies that are traded in Canada, but they do no business in Canada, right? They only do business in the United States versus the companies that we as American investors typically hear about on CNBC and other financial news outlets.

You hear about Canopy. You hear about Tilray. You hear about Aurora. Maybe they're not household names, but they're the more popular publicly traded cannabis companies. And those companies have had a really, really tough go of it from just a revenue perspective because of the market that they are in.

So all the bad news that has come out of Canopy and come out of Aurora over the last 12 months, all that negativity has been placed right on top of the U.S. companies, which have been operating exactly in the opposite way. They have been growing earnings. They have been expanding their markets. They have been doing quite well financially. A number of them are cash-flow-positive today, even after tax.

Dan Ferris: Oh, I love that. So the Cannabis Capitalist is your newsletter here at Stansberry. It's not cheap, so I understand if you don't want to share any specific ideas. But if you do, lay it on me.

Tom Carroll: OK, I'll give you one, a new company I just came across. Actually, it's not a new company, but I've been watching it for about a year. It's a small stock, about $300 million market cap. It's called Jushi. It's kind of like "sushi," but with a J, Jushi Holdings.

It has a really neat management team, laser-focused strategy in three state markets that are all looking to grow significantly, and really, really good asset allocation characteristics. I like it a lot.

In fact, we did an interview with their president and taped it and put it online for everybody to see, if they'd like, on the Stansberry website. So a really neat little story.

Dan Ferris: OK, so this company is headquartered in Boca Raton, Florida. I'm just reading a little blurb here about the company. But they operate in it looks like Pennsylvania and Illinois?

Tom Carroll: Correct, Pennsylvania, Illinois, and Virginia are their core markets. They do operate in a couple other markets. They just opened a dispensary in California. But those aren't going to drive – those are hunting grounds. They're not going to drive core revenue.

Pennsylvania's a great medical market. It's looking to go adult use. Illinois just went adult use. They're playing in Illinois on the dispensary side of things, mostly in the western part of the state where there's not a lot of activity already. Again, it's a smart strategy.

Virginia's just getting ready to go. They've actually got themselves into the Northern Virginia suburbs, that whole area, which has got 35% or 40% of the population of the state. They are the only contractor allowed to grow, process, and sell legal cannabis. So they will have essentially a monopoly in the state in its most populated area.

Dan Ferris: I see. So this company, they look kind of vertical. They say they're in cultivation, processing, retail, and distribution. So how do you feel about that as a long-term business model?

Tom Carroll: It's a long-term business model. I think we're very early stages in legal cannabis so far. I think at this point in time, it makes sense, and I think longer term it will likely continue to make sense. But there are potentially are some nuances that come into play, right?

If we get federal legalization that allows across-state-border movement of cannabis, you could see some bifurcation of that strategy, companies saying, "You know what, we're going to focus on the wholesale side. We're going to be the biggest, best cultivator in the country."

And so you could also have other folks saying, "You know what, we want to own the best brands. So we're going to own the brands, and we're going to own the best retail locations." So that's more of a consumer product focus.

I could see that breaking up a little bit, but again, that all depends on federal legalization as well as states allowing for product to be pushed across state lines.

As of right now, in the next few years I think it's going to be very state-specific. For example, in Florida, if you win a license in Florida, it's a complete vertical license. You as the license holder must grow the product, you must process it, and you must sell it only in your stores. There's no wholesale business.

I can't grow flower and sell it to one of my competitors to process, whereas, for example, in the state of Maryland, those three licenses exist, but they're separate. You could win all three of them and be a fully integrated company, or you could say, "You know what? I just want to own a dispensary," and try to get a dispensary license, get one, and open your store somewhere. Then you can buy from the cultivators and the processers.

So I think states are really controlling that vertical versus non-vertical integration component right now. And I think maybe that eventually gets moved to the federal government with full legalization.

Dan Ferris: Let's talk about something else. This is something I'm curious about. The fact that you can put a brand on caramel-colored sugar water, and it can be one of the most insanely popular brands in all of history, Coca-Cola, tells me that you could put a brand on almost anything, right, and succeed hugely, especially if you get in early and create the market yourself.

But I wonder about cannabis. It's an agricultural product, right? How brandable could it be?

Tom Carroll: I think it will be quite brandable, using your words. I think an analogy is looking at beer, right? I like beer. I think you like beer. A lot of people like beer, right? That's barley, hops, and water. How many different brands do we have there?

And then even going down to the next level of microbrews. Every state now it seems has their own favorite brand of the local brewery that's putting together some really, really good stuff and getting a following. And then maybe those local folks getting acquired by the big breweries, Anheuser-Busch and the like.

So I think that cannabis is going to follow those footsteps almost exactly and in fact even start to cannibalize it a little bit. I'm sure you've heard about cannabis-infused beer and beverages.

A number of companies are already making an odorless, tasteless powder that you can mix into anything you like that will add some THC content to whatever you're baking or cooking. So I think there's going to be a – as a dietary supplement, as an ingredient for baking, that's a whole brand category as well, right?

As we think about it in terms of recreation and using a vape pen or smoking or eating a gummy, that's going to have a whole brand ecosystem unto itself. But let's not sell it short. I think there's going to be a lot more brand opportunity based on how it gets used.

Dan Ferris: I've actually been in – I'm not a user myself. I think I just have too sensitive a constitution for anything. I drink two glasses of wine, and I'm done. But I have been into a couple of dispensaries because you have to. It's a required experience as far as I'm concerned if you're in our business especially.

And I will admit the variety of products shocked me, all of the edible stuff and the drinks and like you say, the gummies, and even the different stuff you can smoke. There's something I believe that's called shatter. Is that right? Shatter.

Tom Carroll: Shatter, yeah. Highly concentrated.

Dan Ferris: Yeah, really concentrated. It's almost like a kind of peanut brittle but thinner. You smoke it with this really, to my mind, sinister-looking apparatus. The people who do it, they look like real addicts to me. I don't know, it's just a prejudice, I guess.

But there are a million types of products. I kind of figured you might say that. But this idea of being in the business of farming... farming is not the greatest business in the world unless you are running a gigantic operation, right? And even then, it can be tough.

I've always got that stuck in my head to be careful about business models and just how I think about the industry going forward. But apparently you can just do so many darn different things with this.

And I have to admit the branding... you walk into these places, and you could very well – it's a similar experience to walking down the candy aisle in the grocery store or the soft drink aisle. It really feels like that, at least here in Washington. Not necessarily in Oregon, but in Washington, it definitely does.

That begs the question, though. Is there a Coca-Cola out there yet or no?

Tom Carroll: No, not yet. I think that's one of the greatest investment characteristics of cannabis right now, that there's no one – the Coca-Cola has yet to be created. And so with some due diligence and hard work and sniffing around, we may come across what eventually will become the Coca-Cola or the Amazon or the Google of cannabis.

So the market is still really wide open. And it's like I said, we're in the early days. I think it's a great time to be looking at this space right now just because you've got companies that are generating hundreds of millions of dollars in revenue. In fact, this year, well, maybe early next year, we're going to have the first cannabis company that generates $1 billion in sales right here in the United States.

Dan Ferris: Wow. What company?

Tom Carroll: It's a big one. It's called Curaleaf.

Dan Ferris: Speaking of your newsletter, if listeners are interested, they can go to www.InvestorHourCannabis.com and learn more about it and sign up. And we'll repeat that later on.

But I do have my final question that I ask all my guests. If there is just one thing that you could leave our listeners, one thought that you could leave our listeners with today, what might that be?

Tom Carroll: I guess one thought from an investment perspective – I'll go down that road – I wholeheartedly, 100% believe that in the component of your portfolio, of your investments that you're looking for real, aggressive growth, within that small component of investment seeking aggressive growth, you must own some cannabis, right?

And I'm not talking about a $0.75 per share stock. I'm talking about some due diligence, real companies out there. Own a small basket of them, not just one. I would own two or three and stick them in there. Don't look at the volatility. I think you're going to be quite happy with the returns over the next 12 to 24 months.

Dan Ferris: Twelve to 24, nice. OK, great.

Tom Carroll: Perhaps even sooner.

Dan Ferris: Yeah, perhaps even sooner. Sooner would be even better. Once again, that's InvestorHourCannabis.com, Cannabis Capitalist. We have the editor, Tom Carroll, with us today. Thank you, Tom, for being here. I know that we will be talking to you again, hopefully sooner rather than later. We'll see how those 12-to-24-month returns played out.

Tom Carroll: Yeah, we'll have to do that. My pleasure. This has been great.

Dan Ferris: All right. Thanks a lot, Tom. We'll talk to you soon. Bye-bye for now.

Tom Carroll: Bye-bye.

Dan Ferris: All right, I love talking with Tom. We've got all these people at Stansberry. I was one of the first people at Stansberry, but they've just gone on this incredible hiring jag in the last several years and found unbelievably good analysts, all of whom are better than me, frankly, and Tom is one of those people. Once again, his newsletter, which is really good – he's really good – is InvestorHourCannabis.com. Go check it out.

In the mailbag each week, you and I have an honest conversation about investing or whatever is on your mind. Just send your questions, comments, and politely worded criticisms please to [email protected]. I read every word of every e-mail you send me, even the ones that are a little too long, and you folks know who you are this week, and I respond to as many of them as possible.

OK, Mark S., who is a somewhat frequent correspondent and definitely interact with a lot of on Twitter, he says, "I enjoyed your chat with Kevin Muir this week on the Investor Hour podcast. When I first heard of the idea of MMT – " modern monetary theory, which we talked about with Kevin Muir, he says, "When I first heard about the idea of MMT, it immediately seemed preposterous. But I learned a lot more about it from your discussion. I often thought that if MMT were so good, you'd think that Zimbabwe, Venezuela, and Germany's Weimar Republic would have been the richest countries in the world. But Kevin mentioned that the key is that you can print as much as you want as long as there isn't too much price inflation.

It's an interesting idea, but as inflation takes hold, I wonder if politicians will have the political desire to pull back on their massive spending or raise taxes to try and rein in inflation and keep some sort of sound money in place."

All I can say is we shall see, and I'm not holding my breath. It's definitely a good idea to hold some gold, silver, gold stocks, and bitcoin as a hedge against insane politicians. And I agree that bonds are not a great idea right now, especially long-duration bonds.

I wish I could read your whole e-mail. Mark S. also asks about energy stocks. They're very cheap nowadays, and he wants to hear my thoughts about it. I agree they're very cheap.

We have a couple of names in Extreme Value that we liked, just that we kept an eye on and wanted to buy if they got cheap enough, and we're looking at them. We do have one energy company in there, though, that we're thinking about cutting because the demand is off so much more than we anticipated.

You ask also, Mark, about holding them as kind of an inflation hedge. That's part of your question. I will say this. If you're holding oil and gas stocks, if you want to buy them right now as an inflation hedge, you'd better get ready to hold through some big downside. You'd better be careful with that idea.

If you're buying them because you understand the business and you think the valuation is dirt-cheap and you have a big margin of safety, that's one thing. But to say, "I'm going to buy them and hold them as an inflation hedge," that's another proposition entirely. And I think you'd better prepare for serious volatility if you're going to do that. I'll leave it at that, Mark. Thank you.

OK, now Brian writes in, and he says, "Hi, Dan. I listen to several investment podcasts each week, and there's only one podcast I look forward to. That's right, Stansberry Investor Hour. I'm going to increase my gold position again, and this got me thinking about physical gold.

I already own various mining shares, GLD, and bitcoin, but not physical gold. I confess that I have had an inferiority complex for some time now. I don't feel like a real investor without having the option of holding a gold bar with my coffee in the morning."

I share that feeling, by the way. I like holding it in my – I like holding gold coins in my hand.

Brian continues, "My problem is that I don't get the concept of physical gold. Why give up liquidity in exchange for an asset that can't be traded on the street corner, could make my family a target by some bad guy, isn't really in my possession while in a safe-deposit box, isn't insured while in a safe-deposit box, can be lost in transport, could melt down in a fire, and is less than accessible in some storage facility thousands of miles away?

Gold equities aren't perfect, but it seems to me that life is too short to own physical gold. I need your help, Dan, so I can feel better about myself. Please talk me into physical gold. Thanks for a great show, Brian."

Brian, I'm not going to talk you into anything. You've identified some risks here: theft, fire, and you're not holding it in your hands if it's in a storage facility thousands of miles away. Now if "thousands of miles away" means over the border in another country, that could be a good thing for you and your family one day, I will say that.

But you said something in particular. You said, "Gold equities aren't perfect, but it seems to me that life is too short to own physical gold." And also in a previous question, Mark S. said he continues to hold gold, silver, gold stocks, and bitcoin. People often say this. They'll say, "I have gold and gold stocks."

Physical gold and gold equities are different animals entirely, in my opinion. Gold, in my view, is a monetary asset and has been for five, six millennia, thousands of years.

Gold equities... an equity is equity in a business, and the business of gold mining is highly capital intensive. They have no pricing power, union labor, and are often in bad political jurisdictions. There's a whole list of reasons why you should view these as very, very risky.

To me, owning physical gold is like an insurance policy because I live in dollars. I live in U.S. dollars. I pay all my bills – I get paid in U.S. dollars. I pay all my bills in U.S. dollars. I hold a mortgage in U.S. dollars. I'm just Mr. U.S. Dollar. We all are, right?

But I don't like the U.S. dollar. It's a fiat currency. I want to get out of it, and I want to get out of the financial system, the whole currency regime and the whole financial system. So I hold some physical gold and physical silver.

That is a very different proposition. That's a monetary hedge or a monetary insurance policy whereas gold equities are an equity stake in a risky, volatile game. I just wanted to underscore that point because two of you this week equated gold with gold stocks, and I don't think that's correct.

But thank you, Brian. I hope I helped you out. I don't want to talk you into anything. You've identified some good issues. If you want to buy some physical gold and you're not sure about it, just buy a little bit. You can buy a few coins or something.

Or go to OneGold, and you can buy like $100 or something. You can buy one share of the Sprott Physical Gold Trust. I think it is about $15. So you can buy small amounts of physical gold in some form or another.

But you sound like you want to hold it in your hands, so I think a small amount would be coins, and maybe you should do that. Just buy one little gold coin and see how you feel about it. That's what I would do if I were in your shoes.

Sometimes I'll just get interested in a company, and I'll just buy 10 or 50 or 100 shares or whatever just to kind of try it on, you know what I'm saying? It gives you some skin in the game, and then you start thinking about it very differently once you've got real money in it. I hope that helps.

Next is John. John says, "Hello, Dan. Your show offers varied and very useful information on investing, and I absolutely love it." Thank you, John.

He continues, "Here is my question. I've heard an argument that bitcoin is a harder asset than gold. The argument is if gold goes up by a factor of 10, then the miners will have an incentive to discover more efficient ways to mine more gold like fracking did for oil. People will sell their jewelry to add to the supply of gold.

On the other hand, if bitcoin goes up by a factor of 10, the total supply of bitcoins remains the same. But isn't that ignoring the possibility of other cryptos could be substituted or created to marginalize the value of bitcoin? Thank you. John."

Really, you're talking about competition with your bitcoin question. Sure. But right now bitcoin is, what did we say, a $235 billion market cap. The nearest one to that is Ethereum, which is a different animal. But it's Ethereum, and it's like $40 billion. I think it's around $44 billion as I speak to you.

So just call it 5X. That's a big difference already. Already, bitcoin is the Coca-Cola of cryptocurrencies. So I think it's going to be hard to unseat it as the No. 1 option.

But you're right. You should think about competition, and maybe you do want to own some Ethereum or some other cryptos just to hedge against that possibility or just because you think they might have a chance, right? Maybe the regime isn't mostly bitcoin and a little bit of Ethereum and everything else. Maybe one day there are 10 Coca-Cola bitcoins, you know what I'm saying?

If you're worried about this – which I personally am not – I own bitcoin, a little bit of Ethereum, and I'm done and that's it. But I get your thinking, and I believe that your thinking is sound.

Now your argument about gold is a little different. You say, "If the gold price goes up by a factor of 10, then the miners have an incentive to discover more efficient ways to mine more gold."

Well, we know something about the gold miners, don't we? We know that when the price starts heading up, they just want to get stuff out of the ground as fast as they can and sell it. That's the reality.

They high-grade their mines. They get all the easy stuff first rather than having a more rational, longer-term mine plan that would mine in a better way for the long-term effectiveness of the mine. They don't do that.

If the price starts heading higher, if it goes by a factor of 10 real quick, they're probably not going to manage their mines as well. I don't know if you should look for these people to discover more efficient ways to mine gold.

What I know about them suggests something like the exact opposite. They will be less efficient because they're so hard up for money and they're so not used to generating free cash flow that the opportunity to generate it will just cause all kinds of bad behavior.

Good questions, John. Thank you very much. M. Cox writes in and says, "I've been a listener for about the last year, and I love your analysis and rants, especially the rants. The structure of your podcast is well organized.

I know that you consider yourself a value investor and that value investing is said to lead to better gains than growth stocks. My main question is, what defines an equity as value as opposed to growth?"

And I'm going to stop it right there. You ask a bunch of other questions, but that's the one I just want to get to. When we talk about value versus growth as a historical, observable phenomenon that you can observe by the price charts of growth and value funds, among other datasets, what we mean is this...

The value stocks are generally those that are the cheapest maybe 10%, 20%, or 30% of the market by traditional metrics – price to book, price to cash flow, price to earnings, maybe enterprise to EBITDA more recently – versus the growth stocks, which are generally those companies which are growing revenues the fastest and may possibly also be the most expensive by those other metrics. But really, they're the ones that are growing revenue the fastest. They tend to be the most expensive. So that is how we measure that.

And then your ask your last question. You asked a lot of questions, but I just want to get to this one. "Are many value stocks ones whose growth days are behind them, and in the short term their prices dip, but the strength of the company tells of a significantly strong possibility that price will bounce back? Thanks for taking my question. M. Cox."

Among that group that I just talked about, that cheapest 10%, 20%, or 30%, yeah, there are going to be a lot of companies in there that are cheap for a reason. The phenomenon is as a group, and the idea for a stock picker might be that you are screening from this group because you believe you're fishing in a more well-stocked pond, not because there are no sharks or bad fish or whatever the analogy might be. You get it?

Yeah, not all of those stocks in that category are good. Not all stocks in any category are good, though, right? Same thing. Good question.

Last question, Tirn. I've said your name before. I hope I'm not butchering it. Tirn S. writes in again and says, "That was a great conversation with Kevin Muir. I have to admit, while listening to this conversation, I felt a tiny bit of schadenfreude," the joy that someone feels in someone else's dismay or misfortune. And it was my dismay and misfortune, it sounds like.

He says, "I particularly enjoyed the part where you admitted to having gotten some criticism for looking at the world as you would like it to be versus how it is. Your discomfort with the conversation was palpable. Reality is a bitch."

I'm going to stop you right there. I was not uncomfortable at all. I'm very comfortable talking to Kevin and having a different opinion and telling him I was wrong about things. I'm not sure what you're talking about. I want to know from anybody else if they listened to my interview with Kevin Muir and thought I was palpably uncomfortable.

You continue, "MMT was the perfect subject to bring realism versus idealism into focus." And then you said, "As much as you and I would like to see a return to a worldwide gold standard, that won't happen before a cataclysmic economic and political breakdown."

And then you say, "What does this have to do with Jay Powell?" Because Tirn's e-mail subject line had "Jay Powell" in it. He says, "A few episodes back, I criticized you for accusing Jay Powell of being motivated to keep himself and his friends like Jamie Dimon rich.

You responded by saying I was naive and basically a hypocrite. I'm sure J. is not an Austrian, but it doesn't matter what his philosophy might be. He's just a man trying to do a difficult job. He's a man embracing reality. You have a great podcast. Keep up the good work. Tirn S."

I'm one way on this Jamie Dimon/Jay Powell thing. You and I are going to have to agree to disagree. Jay Powell is part of the problem. Jamie Dimon is a criminal. Jamie Dimon is someone who has been made into a billionaire by being a manager, not a real owner, a manager, not an entrepreneur, a manager of a giant company that is backstopped by Jay Powell and his friends.

So you tell me that that's an accident. It's ridiculous not to admit exactly the reality. You're telling me, "Reality is a bitch." Well, yeah, reality is a bitch, isn't it? Reality is criminals are running these banks, and they're criminals by definition.

Jamie Dimon – I mean the list of the fraud and the violations at JPMorgan Chase is long and getting longer all the time. They just paid some huge fine for manipulating the metals market, the futures markets, for spoofing. These people are criminals, period. Jay Powell is among them, period.

If Jay Powell were a good person, he would come to work tomorrow and he would say, "You know something, you all need to understand that the central bank is a lousy tool for stimulating the economy. Quantitative easing is a lousy tool for stimulating economic growth."

We got an e-mail this week that, I'm sorry, I just couldn't include it. But it did have one sentence in there about if the government was really serious about stimulating economy, they'd start a business. That's what you do if you're really serious. They'd get the government out of the way of real entrepreneurs.

People with skin in the game – and Kevin Muir agreed with me – people with real skin in the game are the ones who ought to be allocating capital, not Jay Powell. I'm sorry, Tirn. I think you're just wrong about this. You're being too naive about Jay Powell.

These people are working for each other. Look at where Ben Bernanke wound up. He didn't wind up in the belly of the beast at this giant hedge fund run by Ken Griffin by accident. It's not an accident, Tirn. It's not, I promise. Jay Powell is not a man embracing reality. He is a man stumping for a better job after he gets out of the Federal Reserve.

All right, I'm going to leave it at that. That's another mailbag, and that's another episode of the Stansberry Investor Hour. I hope you enjoyed it as much as I did.

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. You can also follow us on Facebook and Instagram. Our handle is @investorhour. Follow us on Twitter, where our handle is @Investor_Hour.

If you have a guest you want me to interview, just drop us a note at [email protected]. Until next week, I'm Dan Ferris. Thank you for listening.

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