Discover why gold is a must-have asset, its surprising outperformance, and the threats your portfolio could face in an upcoming financial Armageddon. In this episode of Wealthion, Anthony Scaramucci talks with Steven Feldman, CEO of Gold Bullion International (GBI). They discuss gold, the markets, the looming threats facing the economy, and the best strategies to safeguard your portfolio during such volatile economic times. Steven also shares his thoughts on upcoming rate cuts by the Fed, the importance of not being complacent while investing, and the role of gold as a hedge against government chaos. Be sure to hit the like button and let us know in the comments what topics you’d like us to discuss in upcoming episodes.
Steven Feldman 0:00 There's something about the American investor. And it goes back to that word, complacency. And if there's anything that anyone any viewer can take away from today, which is, it's not really a time to be complacent. Americans have a tendency to believe that technology will solve every problem, and government will solve every financial problem. And for the for, for eons they've been correct. But the moment you're incorrect, or when technology starts to work against you. And when all of this financial intervention works against you, the snapback is disgusting. And so the idea that you're going to find some, some technique to eliminate $35 trillion of debt is complete nonsense, and it's actually dangerous. And to tie it back to gold, the more people talk about that the more people should buy gold because that's nonsense, and it will lead to financial Armageddon. Anthony Scaramucci 1:01 Hi, and welcome to speak up. I'm your host, Anthony Scaramucci. Today, we are joined once again by the wealthion founder, and my old friend Steven Feldman. And for those of you that don't know, Steven, he is the founder of GBI, gold bullion International. He also worked work together with me actually at Goldman Sachs, for many years, for me at least seven for Steve much longer than that multiple decades. And when I say that we work together, Steven. It's just like today, you do all the work. I tried to take all the credit. And we're still doing that it's three decades later on. So I do owe you a debt of gratitude. So let's start there. Thank you for joining us, you've got over $4 billion under management at GBI, congratulations, you've built an incredible business. But how's it going? Tell me a little bit about where you are business wise, let's talk a little bit about the economy, that I want to get into these 2024 predictions that we made at the beginning of the year. Or and I'm just gonna let everybody know, that's listening. I'm grading the two of us on a curve, which means we did phenomenally well, Stephen. Okay. It's like the it's like that physics high school exam. But I got a 25. But the rest of the class cut up 17. You follow them saying? Steven Feldman 2:23 Yes. Well, I appreciate you setting the bar low. Anthony Scaramucci 2:26 Yeah, exactly. Well you have to do that in life. low expectations are the key to happiness, Steven, but tell us about your business. First off, and then a little bit of what you see in the economy. Steven Feldman 2:39 They are inextricably connected. So we've had a heck of a year. And it's not surprising if you are watching the tape, and you see what's happening to gold prices. And you can see what's happening to silver prices, which is the primary businesses that we're in. So you know, 2024 If you take the exuberance of AI out of the equation, it's just another year where people are concerned about risks that have a way of making gold more attractive on a relative basis asset. So, gold's always sitting there as a hedge against government chaos. And you know, you can't go with half minute or half day, without seeing more of it. You know, we were living in it right now, in the Biden echo debate. We have Modi hugging Putin in Russia, we have wars going on in two continents, we have a federal deficit, it's going to reach $2 trillion. This year, we got $34 trillion of debt. We have inflation, we've got mismanagement of the US government in many ways. I not trying to be political. But you know, when you're an economist or an economics background, you can't be comfortable with this. All that is mitigated to helping our business in just a couple of in between the time we spoke last, and now even Costco is sold a billion dollars of precious metals. And that's, you know, buying it in a box and taking it home. And it's illiquid, and you can't sell it. And so our business, which services, the investors has done a multiple of that better. Anthony Scaramucci 4:24 Im going to ask this rhetorically, but I want you to answer it. Is it fair to say that the gold over the last 12 to 18 months has has done better than the 500 best companies in the United States? So if you took the s&p 500 and the gold, gold is outperforming the s&p. Steven Feldman 4:46 I'm going to make two comments. Take go to the s&p 493. And it's blowing away the 493. Anthony Scaramucci 4:57 Okay, so let me let me let me stop. Let me stop you there. So what Stephen is referring to there's The Magnificent Seven. He's very large cap tech stocks, which include Nvidia, Netflix and Amazon, and Facebook and Google, etc. Apple, those stocks are rushing the 493 that Steven was referring to not doing so well. So go ahead compare it to the 493. Steven Feldman 5:23 So it's outperforming the s&p on a apples to apples basis. I don't have the statistics exact, but I want it year to date, 12 months, five years, January 1, 2000, gold, that horrible asset, that pessimistic asset, an asset that you know, Warren Buffett's diminishes, but yet has no credit risk. No counterparty risk, no worry, as outperform stocks. Now, but it does so in a boring quote, pessimistic way, so people are still loath to buy it. The average investor is still, I think the American investor is still south of 1% of assets in precious metals and gold. So certainly, if the Western investor would change its mind, it would explode. Right now it's exploding in large part on the back of demand from outside of the United States with the United States demand is actually healthier than people. People would think. So, you know, I, again, I'm not, you know, often I get accused of being down on stocks. I'm not, I'm actually I get it, I understand that you have to stay invested, and you have to take your lumps when the market corrects. But that doesn't mean you have to be complacent. And that's where we are in the market today. Anthony Scaramucci 6:42 And I think that's fair. And that's a good segue into these predictions. And so I want to go over some of them with you get you to react to some of the things that we were saying at the beginning of the year. It's the midpoint of the year now. And I want to, obviously follow up with more predictions. But and by the way, this segment of Speak Up is dedicated to the late and very great Byron Wien, who you and I both know, every year came out with his 10 predictions, and they, they were more outlandish and crazy than the last year, and a lot of them came true. This is sort of the weird thing about all this. So the economic growth, we thought would decelerate in 2024. But a significant recession would be averted. Steven Feldman 7:33 So far, so good. Anthony Scaramucci 7:34 So far, so good, right? Don't worry cuts now. But they sort of feel like that they're on the horizon. Right? Yes. So the predictive markets would say, to cuts between now and and the end of the year. And as long as we're predicting, I think the Fed is completely and utterly boxton. Yep. Oh, trying to manage inflation on the one hand, and trying to manage a federal deficit that's bloated because of interest, higher interest on higher debt on the other side. This has happened once before it was post World War Two and the Fed cut, because they're not going to bankrupt the government over a little inflation. Steven Feldman 8:16 Well, what I really say I wouldn't say in public. You know, it's a bit of a joke. You know, there's something about the American investor, and it goes back to that word, complacency. And if there's anything that anyone any viewer can take away from today, which is, it's not really a time to be complacent. Americans have a tendency to believe that technology will solve every problem, and government will solve every funny central problem. And for the for, for eons they've been correct. But the moment you're incorrect or when technology starts to work against you, and when all of this financial intervention works against you to snap back is disgusting. And so the idea that you're going to find some, some technique to eliminate $35 trillion of debt is complete nonsense, and it's actually dangerous. And to tie it back to gold, the more people talk about that the more people should buy gold, because that's nonsense, and it will lead to financial Armageddon. Anthony Scaramucci 10:36 Okay. All right. So I agree with you. So we're gonna go right to number two. Okay, we talking about the economy. Now we're going to the merger of the year. Apple buys Disney, that that has not happened yet. And I say yet, because I still think that could happen. Do you disagree with me? Steven Feldman 10:53 I think we need a bigger audience in order to get that seed out there in the market. And you know, some way shape or form. If we can just get Tim Cook to watch our idea. This is I was a banker at Goldman, I'd be pitching it. Right. I think that you know, I have an iPhone, I haven't renewed it this time. You know, I don't need a better camera. I don't need more memory. I don't need any more apps, it works just fine. And so what is going to encourage me to continue to upgrade my phone. It's going to be content, trade traded. And so there's something to the idea that Apple needs to be more in the ecos sphere of entertainment. And so I think it makes quite a bit of sense. It would be a big gulp, but not for Apple. Apple could do it in cash. Anthony Scaramucci 11:47 Yeah, no, I love that idea. Okay, so I fired this one in and look like I was right for about 10 seconds when IBM reported better than expected AI revenues. And then it went right back to trend line. So I said at Apple, I said IBM is going to come back into the news as a range of corporate AI products catch fire. It happened for a second, it's not happening any longer. Let's just compare IBM to Nvidia for a second invidious up 150%, this year, first six months of the year, IBM is up 10. s&p of course, is up about 16 or 17. So are we are we selling IBM? Steven? I'm just you know, because you know, I've been I've been feeding off of your notes. What are we doing? Steven Feldman 12:34 you know, 30 years. SoWe missed the fact that just because you can create a machine that can beat a human in chess, doesn't mean that you've conquered AI. And so I think they missed the moment. And now it's all about hardware. And you see all the semiconductor stocks exploding, and it's now leaked well past and Vidya and I don't think IBM is providing the CPU that the AI community needs and AI as a service. Maybe Watson should own that market. But I feel like companies like Palantir are doing a better job of that for the moment. Okay, more buzz. So am I a seller? And so as I age, I like that dividend. I like that passive income. But if you're looking to maximize gains, it's a bit of a turtle in a in the turtle and Hare race. Anthony Scaramucci 13:30 All right, let's go to a, an asset that is simultaneously a turtle and a hare, depending on the day, that would be Bitcoin. And so it's turtling right now as opposed hareing, but we thought or at least I thought Brazil was going to enter the area of the space where they would allow for a digital rial and accept Bitcoin as a form of currency in the country. That did not happen. It's still only El Salvador. But now we have new leadership in Argentina, Malay is there? What do you think any chance of it happening in other parts of South America? Steven Feldman 14:11 You know, I'm gonna have to bounce this back to you. You know, the one thing that sits in my mind as an investor is the use case for Bitcoin. And from what I understand is the use case for Bitcoin beyond store of value hasn't emerged in the same way that people would have predicted five or seven years ago, but I'm not on top of it the same way you are. And so as a store of value, it's already proven itself. And you know, it's it's got value. It's got a trillion dollars plus value or some number. I'm not positive Exactly. But it's north of a trillion dollars. It's been relatively stable for the last year. It's been relatively held, widely held and But again, is it just merely we found something else to own and put away in a wallet forever? Or is it going to become some something useful? You can say the same thing about gold, but at least gold is in jewelry. And gold is a as a globally accepted reserve asset. So Central Bank's find that use case is very, very attractive. There's no Bitcoin in a reserve that I'm aware of. Anthony Scaramucci 15:30 Yeah, no, yeah. And listen, I'm up. I don't want to go too deep into the Bitcoin rabbit hole right at this moment in this prediction podcast, but I, I will say the following to you, which I think, you know, I think you do agree with you said it once back to me. So I'll repeat it. You felt that Bitcoin really benefited from COVID-19 that the acceleration of all that deployment of surplus money that went into bitcoin stabilized it, and it helped it get to the crossover point of it having an ETF? And so I don't see Bitcoin necessarily, for you and I, we are the end of the baby boomers in terms of the demography in terms of what our years of birth were. But I do see that we're, I do see a younger generation, my children, our children's generation, accepting this similar to the way our generation has accepted gold. And so that that's me. Well, we'll see what happens. Did you get that one? Right. The Ukraine, we thought that there would be some cutbacks in the military support from the United States and its allies of the Ukraine. But that that didn't happen, but it almost happened. And I think what was interesting about that is, you know, Mike Johnson went to see former President Donald Trump who's obviously pro Putin, pro Russia. And he went down there and told them, Hey, man, if you allow this thing to unravel, during the election year, this could have tremendous blowback on you, as you're being criticized by our allies and being criticized internally. So anyway, make a long story short, they got to build on but ceasefire on the horizon. Steven, are you think we've got several more years of warfare? Steven Feldman 17:24 Well, tell me who's going to own the 2024 election? And I'll tell you what happens in December. Anthony Scaramucci 17:31 So let's workshop. So Biden wins, what happens? Steven Feldman 17:35 Biden has gone out there and said even in, in in last week's NATO meeting, or was it a week ago, where they wouldn't let they're not going to let Ukraine into NATO. But they reinforced the support, financial support and military support of the Ukrainian army and the Ukrainian people. So Biden wins, you'd have to expect him unless he forgets, which is possible, that, that they'll stay committed to that. If Trump wins, I think by the end of the year, he'll be threatening, threatening stopping military aid and financial aid to Ukraine as a way to force a Anthony Scaramucci 18:17 Ukraine will lose half its territory, and Putin will declare victory in the Ukraine will be down a few cities on the eastern side of the Ukraine. And that, you know, and then the question will be, what does that mean? And I'll just leave our viewers and listeners with this one thought. Two countries have very smart people in the countries, Finland and Sweden. NATO is celebrating its 75th anniversary this week. Actually, there's a NATO Summit here in Washington, Finland and Sweden for 74 years, Stephen, elected not to join NATO. But they entered NATO this past year. And so they see a threat. There's no reason for Sweden and Finland to join NATO, if they don't see a threat. Why haven't they joined NATO? It was the Soviet Union, the Soviet empire, they elected not to join NATO, but now they feel a need to join it. I just think it's a cautionary signal light out there in terms of the geopolitical dashboard. Steven Feldman 19:18 Well listen, this 32 countries in NATO, Ukraine would be 33. But that's not going to happen anytime soon. And there's another 130 countries or 125 countries that are not in NATO. And, you know, a lot of those countries are flexing their muscles and flexing them together and the decline of American dominance, not necessarily the decline of American influence, but American dominance is creating a lot of satellites and a lot of power grabs, and a lot of chaos. And so the reordering whether that's reordering of supply chains of military alliances, trade alliances, currencies, multilateral multinational organizations, the UN, all of those things are in a multi year process of reordering. And I can I keep taking this back to the cast that is government. And we're going to it's going to go through this long period of reordering. It's going to be very hard to predict, and it's going to be unsettling for the foreseeable future. Anthony Scaramucci 20:17 Okay. Well said I'm going to, I'm going to be the Jeopardy judge here. And I'm going to give us lots of credit on the presidential election. And so we said at the beginning part of the year that Joe Biden would experience a health scare. We said that there would be a threat or pressure for him to step down, as the parties are looking for a candidate to beat Donald Trump. We, we proffered JB Pritzker, the governor of Illinois, or potentially Governor Gretchen Whitmer. Whitner is obviously dropped out. Obviously, she spoke publicly about that. But this very close, and I'm gonna give us some credit on this because a lot of people were saying this wasn't going to happen. And that's been in the news recently. Section B of this prediction was about a conviction of felony conviction for Donald Trump. Now, we did think it was going to be unclassified documents, but he did get 34 Conviction counts on the stormy Daniels situation. We also said Trump would experience a major bump in fundraising, and a minor bump in the polls as a result of this. So I'm giving us credit on that. I'm the Jeopardy judge, and I'm giving us credit. We are we are saying that it's an honor, it's still, despite the fact that we have two movies playing. There are two movies playing in your local cinema on election day. One is Weekend at Bernie's, at least haven't pulled the movie yet. And the other is One Flew Over the Cuckoo's Nest. So you had the choice between elderly and forgetful and brain freezing, or a full on lunatic that potentially needs a lobotomy. Those are the two movies playing. And so we're saying that the election is still unpredictable, unless you want to switch gears here. But I think the thing is still very close. Despite all of the fiascos that are happening in the levels of dysfunctionality. Steven Feldman 22:11 I just want to say that I'm gonna get some comments on this video for the following. This is American exceptionalism. 330 million Americans, the finest universities on the planet, you know, in many ways, a great value system as a foundation. You got these two guys. Anthony Scaramucci 22:37 Incredible economy, and we've got a combined age of 159. And 83% of the people would prefer to different candidates. All right, I could throw a dart and find the better. Right, exactly where you know, we may I may support the water bottle. That's next to me here. Okay, let's go to China. Property struggles continue. Okay, we are worried we're worried about the relationships there with Taiwan. But I think you got this one right, you said that there would be regional banking weakness. It'd be uncertainty about the economy. And I think that that's happening. And so we'll stay tuned on that. This was a really good one, actually, the use of artificial intelligence to help cure different gene related diseases, whether it's if it's cystic fibrosis, or muscular dystrophy, Huntington's disease. And we think that there are AI models, sophisticated, a AI models out there that can help us find the right potential solutions unlock this. This is inconclusive, it's happening. But I think we would both say that it's not no high profile cure yet. Steven Feldman 23:56 I did go into chat GPT and perplexity this morning to find progress, any evidence of this, and I put in those particular diseases, and every one of them said that progress has accelerated with the use of AI, everyone. So, you know, simple statement is that, even if you can't synthesize things differently with AI, you can certainly do your clinical trials in a different way. And you can actually create digital twins that will create synthetic trials. And maybe they're not as good as human trials, but they'll happen in a minute versus 12 years. And if you're suffering from something that's debilitating, then who cares? I'd rather take something 90 than wait 10 years and be dead in the in the interim. So I think this is probably the most exciting AI for the people who are suffering and if we can get this done, and the whole experiment was worth something. Anthony Scaramucci 24:59 So just This month, three Dean's at Columbia University or edit that listed departure. So I give us credit on that one. However, our last one Steven, I don't give us credit on and even though we were hair's breadth there we got the 40 Niners right. But they went on to lose the chiefs. Of course we thought the Ravens were going to get into the Super Bowl. And we were even suggesting potentially the dolphins they slept, of course with the fishes early in the playoffs. So that didn't happen. And so now we're turning to our tongue in cheek moments here. Before we close out, speak up. And this is what I love about you. These are yours. So I could read them, but I don't think it's fair to you. So let's go you start. Tell us your tongue in cheek prediction about Taylor Swift. Steven Feldman 25:50 Well, listen, I'm gonna short circuit you on this one. These are all tongue in cheek, and none of them occurred. You know, we were trying to one we were trying to find one thing. That would be funny and true. And I think we fail we failed pretty miserably. Anthony Scaramucci 26:10 I'm still holding our mind. Mine was the one that I'm holding out for. I'm manifesting this one. And this is 50 years after Woody Allen's movie sleeper. Elon Musk develops the orgasmatron. So if you don't know what the orgasmic Tron is, if you're too young to know what it is, Google the orgasmatron. And trust me, you'll want to invent that as much as I do. Steven Feldman 26:36 I have a feeling if its invented we won't be seeing Anthony on speak up anymore. Anthony Scaramucci 26:42 It's like what Eddie Murphy once said about something, which I can't repeat, because speak up is a family show. But before we leave, before we leave, I want to ask you, as one of our esteemed guests on this show. The best advice on how to balance a portfolio this month what moves would you make and I'll, I'll start out by saying if people are under invested in gold. Let's move that one too. We should increase some allocations to gold and move beyond gold. And we'll we'll say that's one of them increase allocations of gold. What would be the other one? Steven Feldman 27:20 I'm gonna keep pounding on the word complacency. Recently, I, I help a family member invest that family member sold a home and came into some money. And I did a very deep dive with the help of some of my my own personal advisers, but actually some of the wealthy on curated advisors. And you start to look at that if you take themes that you like in the stock market name one, AI, robotics, anything and information technology, technology, hardware, it all trades at like 80 P ease. And you know, trees don't grow to the sky. And I think people should take a look at their portfolio. Take a minute take a weekend, hire an advisor, read some of the newsletters go to Seeking Alpha called David Janney, at AmeriTrade or Brett was one of our guys and get help because there is risk. And you said we're at the end of the baby boomers, you and me, you know. So we still have, we're still earning that we have some time to recover. But five, seven years from now you don't. So rotating a little bit taking some chips off the table declaring victory because we've all had a really great stock market. And somehow thinking about growth stocks to value stocks somehow thinking about moving from technology to energy, and metals, and to minors and things that are undervalued. Thinking about staying in cash, which cash which earns you not just earns you 5%, but has the added option value of being able to take advantage of situations and none have really revised yet. We haven't seen a correction in the market since October of last year. And now we're at stupid, heady valuations on a lot of things. And I'm not diminishing the value of these fantastic companies. I wish I owned them. I wish I was the founder. But if I was sitting in a company and I was at a seven D P E that predicted 30% compounded growth the next 10 years, I'd be selling shares very quietly, but I'd be selling shares in my own company taking some chips off the table. And so that's the move. It's not a move to say go and buy this. I don't do that. Okay, tell people to take a more molecular and thoughtful approach and just don't sit there and assume everything works out. Anthony Scaramucci 30:00 Nobody got hurt with that that approach. You know, in fact, if anything, I think there's one thing where I do have some complacency is in my mindset. And I'll rephrase it, I have a healthy mindset, as a result of taking your approach. Over the three and a half decades of my investment life, I have moved chips off the table over the course of my investment career. So despite volatility, price action, me getting things wrong from an investment point of view, there's complacency is the wrong word, but there's calm, there's a calmness to the fact that there's been some diversity created in the investment portfolio. Steven Feldman 30:43 And I don't think people should fear missing out so much. It's not about them. It's about you. It's about knowing your risk about knowing what's not. And once you have enough, you should take a it's going to feel much worse, once you have enough to lose it and then not have enough that's going to be devastating to you, versus leaving something on the table that you never really had. And so, if people had that mindset, they'd all be better investors. And again, if you don't have the temperament to do it. One of the things it's and I'm, I have to say this, it's a commercial for wealthy and we have advisors, we didn't pick them because they were cowboys. We picked them because they're sensible, conservative, and we would welcome people to use them. So a bit of the commercial for why we did wealthy on which was to help people become better investors to preserve their wealth, and try to grow it responsibly. Anthony Scaramucci 31:49 All right, well, it's a brilliant note to end on. So I want to thank the legendary Steven Feldman, the CEO, Chief Executive Officer of gvi for joining us today on wealthion and joining us and speak up and we're gonna have you back Steven, we have to, we have to repeat this. If you liked this video, you'll like this video as well. Check it out.
