Kerry Lutz and Ted Thatcher discussed the economic impact of the East Coast port strike, highlighting its potential to disrupt the supply chain and exacerbate inflation, particularly through rising oil prices. They emphasized the importance of developing strategies to protect wealth in light of economic uncertainties and the Federal Reserve's influence on financial markets. The conversation also covered various asset classes, such as precious metals, cryptocurrencies, and long-term bonds, as potential hedges against volatility. Furthermore, they addressed the implications of the upcoming election and global geopolitical instability on the economy, stressing the need for defensive financial planning and rational decision-making during these turbulent times, while also providing information on how to connect with Ted Thatcher's company for financial advice.
Find Ted here: brightlakewealth.com
Find Kerry here: FSN and here: Inflation.Cafe
What that starts to tell me is that the average consumer isn't just living paycheck to paycheck, but they're living credit card payment to credit card payment. And after thinking about the inflationary consequences, I just don't think that more supply chain issues are going to be at all helpful. And it could be, again, a sort of straw that breaks the camel's back. You're listening to Carrie Lutz's financial survival network, where you get valuable information you just can't find anywhere else. To thrive in today's trying times, you need the financial survival network now more than ever. Go to financialsurvivalnetwork.com and get your free newsletter and gift, Financial Survival Network now more than ever. And welcome. You are listening to and watching the Financial Survival Network. I'm your host, Carrie Lutz. And with us today is Ted Thatcher, noted to financial expert. And Ted, it's great to have you back on. Well, I guess the topic du jour, what's on everybody's mind right now, is the port strike in the east. And evidently, evidently, it's the entire east coast, whether it's a right to work state or not, doesn't seem to matter. They're all on strike here. Absolutely. Carrie, it's great to be with you. And honestly, I think it's unfortunate to see you, right? We just have gotten through and we all remember everything that happened with the supply chain from COVID's consequences. And then, of course, the ship, when it was stuck in that straight in the Middle East. And the first and second and third order consequences that happened with that, given the incredible amount of inflation we've seen in the last couple of years, I don't think we need an even bigger supply chain pressure. But on our country, as the average American is really who's going to fiddle the brunt of this and certainly the middle class. Yeah, for sure. And well, there isn't much redundancy in the system. I guess they can get stuff into California and ship it. But that's not really going to make up the slack, will it? No, I think that basically, I mean, we'll see how quickly this all comes to a head. And if they're able to resolve it quickly or not, I think it's really interesting. I sort of the almost lack of political pressure there is to really bring this to a head, even though it's such a young strike, we were hearing about it last week at the potential of it. And I just feel like that there's more that can be done. But the problem is, is I think when you look at this at the broader level, what does it do to the, well, broader economy? The question I've been getting constantly is, well, how's the economy doing? And of course, there's just so many ways to measure it. Yeah, and I think maybe, yeah, well, there's so many people will just look at the stock market, and they'll say, hey, the market's up. The economy must be great. But of course, and least in my opinion, there's no way to measure how the economy is doing here in the US without looking at the average American consumer. And if we look at that consumer, they have it, they have a trillion dollars in credit card debt. They can't come up with a thousand dollar expense or bill for a cover, a thousand dollar expense without dipping into their credit cards. And ultimately, what that starts to tell me is that the average consumer isn't not just living paycheck to paycheck, but they're living credit card payment to credit card payment. And after thinking about the inflationary consequences, I just don't think that more supply chain issues are going to be at all helpful. And it could be, again, a sort of straw that breaks the camel's back as if we needed another plus with what's going on in the Middle East. Let's not overlook that and pretend that the increase in the price of oil, although we haven't seen a huge spike up yet, but seems kind of inevitable if things escalate out of control here, doesn't it? Well, the price of energy absolutely contributes to the inflationary issues again and again. And I completely agree that it's... Well, after what's happened in the last couple of years, the Biden administration lowering and lowering artificially the price of oil through the release of the United States Energy Reserves, that becomes an even bigger issue to consider. And so then you think about what the Fed has done, started this lowering interest rate cycle that, if they're not careful, is going to have more inflationary pressure. And all these other things ultimately tell me that it's interesting to think that we're going to be able to have this "soft landing" the way we all would, I guess, like. Sounds more like a crash landing, huh? I would say so. I mean, I think the other way I think about this too is when we think about the stock market hitting these near all-time highs or all-time highs, and then we see everything that's actually happening on the ground on Main Street, there's just unbelievable discrepancy between what's happening on Wall Street and what is happening on Main Street. And unfortunately, given the unbelievably powerful hand that the Fed wields if they're committed to lowering and lowering rates, I just don't see a world where that doesn't get further and further and further stretched out. And then we'd have to think about, you know, the sort of, well, if you want to say crash landing that gets created because of that, it's almost like if they are committed to this direction, that there's almost going to be a melt-up, potentially, before there's a crash down. Oh, for sure. And the melt-up is just the flip side of that. So how do you protect yourself? How do you stop them from destroying all your wealth? Well, you have to own assets. At the end of the day, that can be faster than the precious metals that can be at home, that can be a financial asset. The truth is, is if the Fed really is going to lower rates, then they're at the highest point they've been at, you know, up until, you know, two weeks ago, for 35 years, they haven't been this high. And so, almost to me, at least, regardless of who's president, right or wrong, if the Fed's going to commit to lower all the way down to back, maybe even below 3%, that is going to have a unbelievably heavy-handed upward consequence on the financial markets. And again, right or wrong, that's going to be the way, I think, that you're going to try to preserve some wealth here. Now, we could talk about strategic plays. You know, I've been, I've got a lot of people that have said, "Hey, big tech is way overextended. Do we want to keep doubling and tripling down on NVIDIA?" Nah, you know, maybe not. But at the end of the day, you know, the Fed is the central bank of the United States of America. It is the most powerful financial entity in the world, and arguably, in all of the history. And so, if they're going to commit, we've all heard that phrase, "Don't fight the Fed," that teeter-totter is now headed in the opposite direction. Yeah, so, so we think it about gold at this point. We think it about the cryptocurrencies, or as I'd like to endearingly call them, "cleptocurrencies." Well, gold has been on an absolute tear. I think, you know, precious metals have been a huge hedge against inflation and gold. It has been at the top of that list. I do think it's interesting right now if you look at where silver is at. There is, I think, an interesting play to be made there. It seems, from a lot of different analytics, I've looked at poised to also go up in a similar fashion as gold had. I do also think, I mean, this is much more of like a strategic bet kind of play. Because we did hear so much about that teeter-totter in the last couple of years, between the federal funds rate and bond values, that inverse relationship that they have. If you believe the Fed's going to keep lowering interest rates, it could be time to get on the other side of that teeter-totter and maybe try to look at some long-term bonds. I've had some conversations about even leveraged long-term treasury bond funds. There's this one fund called TMF that we've looked at. I've looked at it a couple times. Basically, it's 20-year treasuries, but just triple leveraged. Obviously, given everything that's happened this week with the strike, treasuries are actually going up, which is certainly a negative consequence in the short term for a fund like that. But if the overall macroeconomic trend is for the Fed to lower rates, that's definitely the kind of holding that would generally perform well. Okay. We'll buy it. I guess we'll have to have you on next month to go over whatever happens with the election. We're in silly season here. Although the debates have been definitely the ratings hog of this month's sweeps or this quarter's sweeps, as we used to call them. I'm not even going to bother to ask you what you think the outcome of the election will be. We don't really talk politics. We talk economics. But certainly, when you throw that into the mix, more geopolitical instability in the Middle East, in Ukraine, Russia, China, India, there now China and India, pretty soon North Korea will kick up because they don't like being ignored. You're throwing that all into the mix. It really creates a lot of uncertainty and a lot of people looking for defensive, you know, both holes, financial, both holes, right? They're trying to, well, stop the leaks, right? I mean, I agree. I tend to be much more of a financial person than ever a political one, but I think you're absolutely more than correct to point out the nuanced and interesting nature of this election. We have a former president who's running again and there's been two assassination attempts now on Trump. While, of course, everything that's happened with Biden stepping down and Kamala Harris replacing him and his position, I don't think there's been an election like this maybe to be out of ever. Got to wonder. You got to wonder. I mean, it's just the insanity of it all. And yet, you're supposed to try to stay rational and keep things going here. I don't know how you do it here. I really don't. Well, I think that way the average person is put into a very precarious situation. Most average Americans don't have enough time to go to their job and spend time with their family, much less figure out a sophisticated strategy for their money across one of the most volatile times, certainly in the last several decades. And so, ultimately, we got to watch out for the precarious nature of the world we're living in today. I was having a conversation earlier this week and just a simple takeaway being, it's just a much more of a volatile time than it was 10 years ago when the markets were just steady, Eddie, things are pretty, just kind of bland. And now we have a debt-zealing crisis. And then we have all this political strife and we have the war in Ukraine and terror attacks in Israel and conflict in the Middle East and inflation and interest rates. And there's going to be another thing, the strike, right? That's the next one. What's going to happen after that? Well, it's probably going to be more questions coming into November. All right. I think we'll leave it at that. Ted, just tell us, where do we find you again? How do we connect with you on the web? Sure, absolutely. Our website's brightlakewealth.com. Thanks, Kerry. All right. And the links in the show that's in this interview on financialsurvivalnetwork.com. While you're there, make sure you sign up for your free newsletter. And you've got a question for Ted or myself. Shoot me an email kl@careyluts.com. Ted, again, thank you for stopping by. We'll talk to you again soon. Hey, thanks so much, Kerry. Thanks for listening to Kerry Lutz's Financial Survival Network, your solution to today's trying times. For the latest, go to financialsurvivalnetwork.com. Financial Survival Network, now more than ever.
