There are only 3 months left in 2023.
How is the year likely to end up for the economy and the markets?
And what kind of year should we expect 2024 to be?
To find out, we welcome market analyst Gordon Long back to the program.
Gordon Long 0:00
We have a collateral contagion crisis that I think is, is, is coming. Because nobody really knows what the true collateral is. And it’s changing. We’re seeing the collateral in the bank, and the commercial real estate suddenly starting to change. So I’m not trying to scare people. I don’t mean to do that. I mean, I just mean, you need to be aware of where the risk is. That’s that’s what I’m trying to say here. It doesn’t mean the markets going to collapse, it’s actually good news. Because those that are managing this, know that if it gets out of control, it’s a goal, a monumental global problem. And nobody is interested in that China doesn’t want that Japan does nobody bank of it and they do not want that. So they will do everything in their power to to including changing the rules and regulations that help bail it out.
Adam Taggart 0:51
Welcome to Wealthion. I’m Wealthion founder, Adam Taggart. There are only three months left in 2023. How is the year likely to end up for the economy and the markets? And what kind of year should we expect 2024. To vie to find out we welcome market analyst, Gordon Long back to the program. Gordon, thanks so much for joining us today.
Gordon Long 1:13
Well, thank you for having me back. I always enjoy these discussions.
Adam Taggart 1:16
Thank you, Gordon, same here. I know you are a sailor. And I hope you’ve had a great summer out there on the ocean. Glad to have you back though, inside here. Because I have a lot of questions to ask you. You’ve sent over some charts. I can’t wait to go through those with you. There’s some great material in there. Real quick. Before we do though, can we just kick us off with a question I like to ask you at the beginning of all these discussions? What’s your current assessment of the global economy and financial markets?
Gordon Long 1:48
Well, they’re two separate questions, actually, the economy versus the financial markets. They are a different breed than ever before, you know, when I first started this business, that we’re kind of one in the same, the markets follow the economy that isn’t that is what we have now fight. So to break it up. I don’t think I’ve have a worse scenario than I’ve ever had to paint above the status state of the global economy. And the United States looks the strongest in terms of the globe, whether I go through Japan, China, eu. So it’s a very bad looking and getting worse economic position from the financial markets. Actually, they look pretty darn good right now. And I’m not talking about just the recent run we’ve had, but the liquidity that I’m seeing the momentum that I’m seeing what’s happening with the earnings, and there’s reasons for it. So you know, the market will come off. And the charts technically will scare you, if you look at them near a lot of them saying boy, we’re we’re in some pretty critical points. But I remember I don’t want to go on on his but I remembered to Nike 99. And I got out in the fall of two nights of 1999, because the church looked just as bad as the time. And the market ran on. And it went right in through through March. And I boy, I took a lot of flack from people saying, you know, chicken got out early went, you know, blah, blah, blah, but a year later, all that money had disappeared. And when I had sold in the fall turned out to be a hero and everybody, you know, it was positive then but you know, who cares? Right? But it was it, I feel like it’s the same thing, this will go on until it won’t. And then it’ll go ugly fast. And and that’ll be it. But I don’t know when that’s going to be it’ll be there will be a triggering point. And I can speculate on that. But who knows what it’ll be, but something will take it down. And and the problem with the two this time, is we have a massive amount of ETFs out there that have never been tested. And that is somebody can go hit up sell hit a button sell switch on their computer. And we can we can just liquidate trillions of dollars, quite literally. And I remember in 2008 When the chief financial officers did that, just and these were professionals, and And Bernanke had to march up to the hill and ask for money, because he was $5 trillion. It just disappeared. So it’ll be the same kind of thing. So the debt completely different beasts.
Adam Taggart 4:12
Okay, and just on that point about, you know, how ETFs are changing the game. You’re saying they haven’t really been tested yet. And we’ve had you know, at least since the GFC you know, ETFs have been on a close to a 15 year ride now of just sort of marching ever upward both from capital inflows but also prices and we’ve had a number of people on this channel talk about how the Magnificent Seven, right I mean, the the, the small number of very large firms, many of them technology that make up now, you know, a very, very meaningful chunk of the s&p 500 market cap. But But I think over are half of the NASDAQ. I can’t remember exactly how much of every dollar that goes into the market.
Gordon Long 5:08
Capitalization, seven stocks.
Adam Taggart 5:10
Yeah. Okay, so seven psi 58%, I guess of every dollar goes in goes into those. And so that’s been driving the market value of those stocks up, which have then been driving the indices up for a very long time. And we’ve all gotten very used to that. And what I hear you saying is, hey, that can work in reverse, we just haven’t really experienced that yet at any sort of real extremity. But if those if capital starts coming out of the markets, the indices are going to get hit particularly hard, because 58% of every dollar coming out is going to come out of those Magnificent Seven stocks, is that correct?
Gordon Long 5:43
Precisely, precisely, almost every ETF in some way fashion. No, you know, their specialty ones, of course, are somehow connected, but the market itself moves on the beta and alpha. So no matter if it’s if they start to go down, everything will go down. And right now, the, I’ve never, I’ve never seen the breadth so narrow, as it currently is, with the Magnificent Seven in the video and their contribution in it. I can remember the nifty 50 Back in the 70s. And we thought that was narrow breath. And then I saw the time the.com era was the same thing when we had the Cisco’s in a small group, but they even they were broader. And so when the generals fail, things are a problem. And, you know, we just saw, for example, Apple, China suddenly announced that they’re not going to allow the iPhone to be sold to government entities within within China. I mean, how many trillion dollar billion dollars did that take out a cap of Apple stock, now it’s trying to find support in here. But these are the exposures you face out of this, you know, AI right now is, is the driving force with the momentum in there. But, and I’m not, I’m a big proponent of where AI is going. But having lived through the technology before they go and spray, they go in waves. So there’s a corrective finds consolidation, and we’re solver extended is going to have to find that consolidation. And the trick today, you know, and I hate to say, this is not a buy and hold strategy, you really have to have some degree of timing and balance at a very high level. I’m not saying on a daily, weekly basis, but certainly on a quarterly half year basis, you have to be adjusting.
Adam Taggart 7:20
Okay, so more active manager to do that, by the way. Okay, great. And that, that, you know, your singing Wealthion from Wealthion song sheet there, because it’s you know, we recommend lots of people who watch these videos generally should work with a professional to help them plan but to do this active management that you’re talking about,
Gordon Long 7:37
never more than today, and I’m not one of them, okay, I’m a private investor. So I do it myself. And I know what I have to do. And I’ve been doing this a long time. And if you’re not, and have that experience, you’re exposed right now, because you’re you’re playing against some of the most sophisticated artificial programming structures and systems have been put in place, that you’re not going to beat them, you’re just not going to beat him unless you can take a longer term, more systemic structural kind of approach. And there are some great opportunities.
Adam Taggart 8:12
Okay, great. Great, okay, so we’re going to talk about the challenges. I do want to get to the opportunities with you before we’re done with this discussion. And I do want to get to your charts real quick. But just to kind of pull in a punch line here, you had said about one of the worst outlooks ever that you’ve seen in your career for the global economy, you then said that the financial markets look pretty good. And I believe you’re saying right now, but then you’ve shared the concerns that you have, you know, both about the fundamentals that need to drive these valuations in the long run and the the hyper concentration of market value right now. And you made some comparisons to you know, when you got out back in the.com. Era, you’re not ringing the bell to say get out of the markets right now, yet, are you or are you
Gordon Long 8:59
know, nothing. But I, I very much caution, that the most expensive thing in the market is chasing that last 5%. And whether we got another 5% to go or 10 or 15%. Personally, I’m leaving it on the table. I don’t I don’t want it. It’s too expensive. To
Adam Taggart 9:21
to use an analogy we use a lot in this channel, you might say that’s chasing or picking, trying to pick up nickels in front of a steamroller. It’s just not worth the risk.
Gordon Long 9:29
That’s exactly what it is right now. And if you and if you gamble, and you win, congratulations. I know that’s not not that’s not the school I come from. I’m that’s being that’s being a speculator, maybe even a gambler, worse than a speculator. I’m an investor. So I have a I have a different view. And I look at other opportunities that are in the market, much lower risk. And over the longer term will give me a better total return, I believe, and time will prove you know, that’s where we spend our time, but I’m not spending any time trying to guess this The equity markets per se, and I believe the equity markets will actually follow from the credit markets, which are following from the debt market, the bond market and the currency markets on a global basis. And they tie together pretty well you get the warnings that way. I always say the equity market is the tail on the dog, it’s kind of the last to happen. Now, it’s busy wagging. But the nose of the dog is smelling big problems.
Adam Taggart 10:27
Okay, and that’s what I was gonna say, let’s let’s start with the nose. You’ve written recently about the importance of the end of what you call a Great Moderation. And you sent some some charts overall, I’ll pull up here in just a second. But can you? Can you? Let’s start there. Can you just explain to folks what you mean, when you talk about the Great Moderation?
Gordon Long 10:47
Yeah, we, you know, we’ve come through a period of 40 years, where we’ve had low volatility, low interest rate, falling interest rates, general stability, across the markets, we’ve never, we never had that. So that 40 years that Great Moderation. We’ve conclusive, we believe has ended, we were very strongly that we believe the Senate has ended. It’s ended for many reasons, but the three easiest to understand is and it’s not that they have ended these the three of andet, but have changed. And it’s always about the rate of change. It’s the first derivative. And the three are globalization, financialization, and mercantilism, and by globalization, we all know what that means. But we have to understand that the globalization brought down costs, labor arbitrage, cheaper place to put it in the supply chains. And so we’ve been, you know, reaching the benefits of that in electronics and everything else in terms of costs for years. Well, that is changing that we’re repatriating some of the information, some of the were COVID brought out some of the exposures with the supply chains. And so that cost advantage and for other reasons, inflation have changed change. financialization was about the rate, but the interest rates continuing to come down. And so now interest rates, we’re gonna hit zero, about an hour going back up. And the question is how far they’ll go back up. So the cost associated with interest is changing. And then the whole role of mercantilism is also changing. And by mercantile I’m talking about where places like initially Japan and China now that what they do is they get get our money for all their goods, but they don’t keep our money, they send it back to America and buy our bonds. And why they do that is it drives the bond prices up at the interest rates down, and therefore it’s cheaper for us to consume, it also means a stronger dollar, which means they can buy more of their goods. So it’s a great deal for them. And it just, it actually makes us uncompetitive against them. And it drives us into being a consumption economy. And that gig is a three have lasted for 40 years, and now we’re a 70% consumption economy. We consume more than we produce. And how long does that go on? And now we’ve got what $95 trillion between the between the government but not 30 for the government, our consumers and corporate and and that’s a problem. Now the now the other countries around the world are saying, oops, is your credit still as good as it used to be? How much of those dollars do I really want to put with you and what they’ll still they’re still buying it generally. My I shouldn’t even say that China’s still are Japan still buying but they’re starting to hedge their bets on that level long window but that’s what I mean by sudden where gate moderations change what it’s going to mean, higher volatility, higher inflation than we’ve been accustomed to forget this 2% Gold not going to happen 3% They’ll probably adjust it to right and even four and a half and it’s higher if you really counter properly higher interest rates and, and and high risk premium both on duration on the bond market. And on the risk premiums and equities, we’ve got beginning to see it in the bond market, haven’t seen it in the equities. But that’s what’s going to happen and just not to be long winded here. And why we have to do that is to keep the economy going we have we need more GDP and so to get the GDP it means more money fiscal not necessarily money but fiscal money being pumped in which means higher inflation. So they have to balance that so that there’s a return and we can we can attract money and I can get into how they’re doing okay and at least okay these are just my opinion I not giving investment advice here.
Adam Taggart 14:51
Yeah. Well, let’s do get into that. I have had this chart up while you’ve been talking here right which shows kind of the the arrows that you see there We’ve been through and the Great Moderation there from the start of the millennia to COVID. Basically, you know, we enjoyed, as you said, low inflation and moderate growth and low interest rates. Now, you can see that inflation, obviously is taken off, the cost of debt has exploded. Volatility you said, will get higher from here. And we certainly saw that, as you know, the markets rolled over last year. So you can already very visually see the difference here, you then have, let’s see, another chart here on the same topic, and let me just see if I can bring it up here. Which shows that, you know, very clearly, we’ve been from this era of contained inflation to now an era where inflation is obviously much harder to to curtail. But you said, you know, we were going to see compression of things like the equity risk premium from this new era that we’re in, but we haven’t really seen that reflected much yet. Right. We saw it a bit last year, markets have recovered last year, I assume you’re you expect to see the s&p have some sort of material correction here to match the fundamental trends of this new era. Is that correct?
Gordon Long 16:23
That’s correct. But I when I said the risk premium, you said the risk premiums are going to go up? Okay, just make that clear on equities. So they’re gonna be more, they’re gonna have to absorb that risk premium, which will take which weakens the stock price smart. Okay.
Adam Taggart 16:41
Yes. Sorry. Yes. The ultimate the ultimate result is that stock prices will come down is that because
Gordon Long 16:47
markets are, are more risky, both equity markets and the bond market. So the risk premia is in the duration on the bond market. And both of those are going up because there’s more risk than we’ve been accustomed to over the during the period of the Great Moderation. And they’ve started to happen in the bond market, but they have not happened in the in the equity markets at all, at all. Valuations are historic levels. When he talked about the breath being minor. He right now you get better yield on on a bond, even the 10 year reminder of the two years paying over 5% I can’t get that on the equity market. So why would you invest in equity?
Adam Taggart 17:25
Right, and I think I’ve seen a stat that the equity risk premium is like the lowest it’s been in 20 years right now, to your point, which is what why would somebody want to go into bonds and into stocks right now? Yeah,
Gordon Long 17:37
exactly. But that doesn’t mean they’re not going to, because there’s so much momentum right now. And the fear of missing out. And if you’re a if you’re a fund manager, you can’t you can’t lose out on this lift you miss, you miss it for a quarter, you’re not a work. So that you know, but they can take the risk because it’s not their money. It’s their job. Okay, whereas if it’s your money, you can you really afford that risk.
Adam Taggart 18:03
So is this is this sort of like a like a wily coyote moment, then that you think Gordon where the credit is off the cliff, he just, you know, gravity just hasn’t yet to kick in yet. But it is going to?
Gordon Long 18:16
That’s exactly exactly the analogy here. But we can stay floating here for for quite a period of time. All right, well, one of the ways there’s nobody left to buy, the market is really good at knowing when there’s nobody left on the sideline. And then it just pulls the rug out. And there’s nobody to buy because it’s going down. They’re all fully invested. They there matter of fact, then they have to sell to get out because of the pain. So we haven’t had a capitulation. And I don’t mean to be a doom and gloom, er here. But we haven’t had a capitulation in the market since 2008. And even it was minor compared to what I’ve seen in previous ones. So and so the when that capitulation sets in and gets into this ETF discussion we have it’ll, it will be when it happens quite violent. But and here’s the here’s the big button, I need to say this right now. Don’t ever underestimate the government and what it’ll do to change the rules to stop it from happening. Too bad. And in 2008, I can remember when we came off that bottom, and it was like, boy, there’s still more here. Why is it coming off the bottom and we were all scratching our head? Thinking is a time to jump in. But it didn’t say we should. And what it turned out is they changed the rules. They went from all the $84 billion worth of derivatives that were at all the major banks, they said Well, well, you don’t have to mark them to market anymore. You can mark them to magic or market or whatever you want. Forget it don’t ignore it. Suddenly. It just changed the whole the rules and boom, the market was off. And as soon as it came out, we understood the rules. And you need to understand this. We still do not have we never went back to mark to market. And the derivative market is bigger. So, think of the exposure, you’re sitting there on that one.
Adam Taggart 20:09
I, we could spend the whole conversation just on that. Yes, we could, I don’t want to rattle in it. But just to help people understand your comment there. You’re basically saying the derivative market is it was bigger today than it was back then. But the derivative market is massive compared to the stock in the bond markets. Right. And it I’ve seen it visualized before. It is way more massive, then I think most people watching this video are imagining when I say that it’s massive. And so the the risk there is that if you get some sort of cascade of failures in the derivative market. I mean, it could be kind of apocalyptic. I’m not saying that’s going to happen, but it’s just the size of the derivative market. I’m trying to underscore here is is, I mean, vast multiples more than the stock market in the bond market combined, correct? Well,
Gordon Long 21:04
even the global economy, global economy, where are we at $82 trillion, we trade 650 trillion on the global currency and an interest rate swaps along. I think it’s six 60 trillion. Now, you have no visibility that because it’s traded over the counter, it’s totally opaque through the Bank of International Settlements. So the only ones that said, I’m not saying there’s anything nefarious going on here, I’m saying that’s the reality. The derivative market is so so large and so powerful, that it’s behind the scenes that you don’t see that the stock market and the bond market, frankly, are just kind of like little mirrors of what’s really going on. They’re not what’s going on. They’re the product of what’s going on. And us I see it because I follow inflation swaps, I don’t follow what the tips are doing. I look at the trading on inflation swaps, how many people are falling inflation. So I try and get that information. I look at what’s happening right across the Red Cross the whole derivative structure. And for example, the quickest way of saying it, the there are things now, back up in 2008, when the market collapse, we learned about derivatives, we learned about collateralized debt obligations, and credit default swaps for those that remember that and it was like, What is this new world? And we got it, and we explored it. And I like how did I miss that? How, how was this going on? I kind of knew about it, but I didn’t realize the size of it? Well, that is that was when they were learning about the roofs. Now we’re at the point where I’m going to ask the audience, do you know what collateral transformations are? Do you know what collateral swaps are? Well, because the collateral is now being rehabbed for land for debt brief being re hypothecated. In other words, lent out in so many different channels that are claiming it, you don’t even know who really has the real ownership of the underlying collateral, we have a collateral contagion crisis, that I think is, is is coming. Because nobody really knows what the true collateral is. And it’s changing, we’re seeing the collateral in the bank, and the commercial real estate suddenly starting to change. So I’m not trying to scare people, I don’t mean to do that. I mean, I just mean, you need to be aware of where the risk is. That’s, that’s what I’m trying to say here. It doesn’t mean the markets going to collapse, it’s actually good news. Because those that are managing this, know that if it gets out of control, it’s a globe, a monumental global problem. And nobody is interested in that China doesn’t want that Japan, nobody bank of internet, they do not want that. So they will do everything in their power to to including changing the rules and regulations that help bail it out. Okay,
Adam Taggart 23:49
this was not the main focus of the conversation, but it may turn into two. So yes, the entire system is geared towards not letting the derivatives market get into some sort of cascading collapse. And they’ll do everything they can including changing the rules and every unnatural act that they may be forced to do. We guess my question to you is, expect that, expect it but let me ask you this. Despite all that, do you think it is still likely that there will be trouble in the derivatives market that does get out of the control of the authorities?
Gordon Long 24:30
Well, we saw it Yes, I do. We saw it in Britain, here in the winter in the winter. And it it almost brought down the country until you know the guild was out of control. It was within like a day. Yeah, exactly. brought down the government. And she was the prime minister for less than like 3035 days in finance, but it was go it was that serious. And that’s when they discovered the derivatives that they were used called liability pledges that they were using which was another structure, unique way of using derivatives I suddenly got out of bandwidth bound. And what a cause it is. Everything’s based on boundary conditions. And so when you start to get volatility swing and swing across multiple markets, currency bonds all at once it’s in multiple countries is almost impossible to know which ones are going to get pushed out a boundary conditions, we’ve seen it with a Yan here recently starting to push that upper end of the yield, yield curve control, that that all of a sudden, everybody’s in a panic mode. And once it starts, so that that’s the exposure and is being closely monitored, has been closely followed is being played very carefully. But the there’s so many things that can fracture, that’s where the risk comes in. And it shows in why the, the the premiums are going up, why the bond yields are going up.
Adam Taggart 25:47
And that’s one of the things about the derivative market that that I think of that worries me, which is, it is so vast, you have talked on this channel about really the number a trillion is so large, that smart people like you, Gordon, we still really can’t wrap our brain around how big a trillion is. And we’re talking here about hundreds of trillions of dollars of derivatives, which are basically sort of site arrangements made between many different types of parties, right? And because of the complexity in this in this huge scale, it’s really hard to know that if one asset class gets in trouble, then the question becomes, well, is that a re hypothecated? asset? And if so then who else thinks they’re holding that? And if it if it gets written down over here, does that mean that hedge fund or pension fund over here then starts to blow up, and then they have to sell collateral, which then triggers out yet another issue here like it’s, it’s so enmeshed and entwined in ways that I don’t think a human can have full view of the entire interconnectedness of it all, is that it’s this super complex system that we just really can’t fully control. And so that, if there is a failure in here that gets away from folks, we just don’t know how it’s going to ripple through this. We’re just going to have to watch it unfold in real time and kind of be reacting to everything.
Gordon Long 27:05
Exactly right. The complexity now is beyond the peril if you would, and here’s the problem, you can’t fix it, because you don’t even understand what’s going on. Right? So you’ve got to kind of let it finally play out until it stabilizes at some level. And I can assure you that stable, that levels too low, because it’s so opaque. There’s nobody that has real visibility, you can have a problem in Argentina, in a company or a bond. And that cascade, like the first world war in the Balkans could suddenly take over, that’s the exposure that we know we’re currently in, and you don’t know what type of derivative it might be. Okay, and, and I apologize, I don’t mean to scare the audience. This is just the hard reality of when I use the word risk, what I’m specifically referring to not whether a stock is overvalued.
Adam Taggart 28:00
Okay. All right. Well, look, one of the things you’ve been writing about recently, which I believe is one of the examples by which the governments and the folks who are trying to hold the system together, right and keep it running as happily as they can, is self liquidity. And I’ve talked a little bit on this channel about how, you know, we had we had a number of people I interviewed a year ago, saying, Oh, my gosh, you know, coming into to this year, recession looks imminent, because you know, the monetary stimulus spigots have been turned off, and they’re not passing any more fiscal stimulus the way that they were back in 2021. And that, you look at the macro data, and it’s all showing, you know, flashing recessionary warnings, and yet, stock market is powered higher this year, pretty healthily. And recession hasn’t hit. And we have a lot of talk about a soft landing or increasing talk about a no landing. And you kind of scratch your head and say, Well, gosh, why hasn’t the bad news materialized? And increasingly, folks have been starting to point to the deficit, which is, hey, well, we’re doing very aggressive deficit spending this year. You know, I’ve sort of summarized it as we’ve got a wartime deficit in a peacetime economy here. Right. And you have done even more work on that beyond just the headline, number of what’s being spent the deficit to show that it’s, it’s, you know, everything from bank deposits. The bank was a term funding program that the Fed, Treasury released. There’s reverse repos involved. There’s there’s Treasury auctions. So you’ve kind of you’ve kind of visualized for this for everybody what’s going on. Can you talk a bit more specifically about how the system is kind of being propped up right now by this this large amount of stealth liquidity?
Gordon Long 29:55
Absolutely. It is on the surface complex, but if you have a good Rafic there that kind of a net set out, the confusion comes that says, Look, we’re tightening, as you said, with quantitative tightening, we’re tightening on our credit standards. So therefore, we’re taking the liquidity out of the market at a pretty soundly level. How can we have markets going up? Well, the answer is we have stealth liquidity and it’s calculate is planned. It’s an if taken advantage of basically two events, one in March with the deposit run was expected out of banks, banks with paying no no deposit rated at all, where they could suddenly capture 355 5% on a two year bond, even as we taught our note, as we talked to, today. And then when the when we finally resolved the, the the debt ceiling, in June, June, they were key, they were key instruments that fell in place to allow this to happen. But it’s been happening since January. And over in the left, what it represents that when the money goes out of the box, oh, take depositors, we’re taking it out, they were taking it out. And then we’re going to money market funds, you can see in the top center, so the money was leaving. But suddenly, that created a huge problem at the banks who got to have assets mounting liability. So we came in, as you said with the BTF P program. So we so the government pump money into the banks, at the really the same level of which the deposits are going out and the deposits are still going out. And we’re still putting more money into it. So we’re not pumping liquidity into the economy, the bank, the central bank is pumping money into the banks to keep them solvent. But the money left the money out of the deposits went to the money market manager. So what the money market managers do with it? Well, when it kind of in the stages in there, because they were putting they were putting their money into reverse repos for here for the last two and a half, three years because they were paying such good rates. So we took the reverse repos, all the way up to about $2.6 trillion. And they’re making great rates cheaper over this quick overnight one week kind of money very quick. And that’s where they were all good. So as the money started to flow into the the money markets even more pushing on the reverse repo, the government kinda like we were in the middle of a treasury auction at the time, which is over in the level called the TGA, or the Treasury auctions where we couldn’t really issue at a debt ceiling limit. But they started buying the short term ie Janet Yellen very, very clever. I’ll use the word devious individual was smart enough that she kept it floating by floating all his short term money. So the money flowed over to the treasuries and then subsequently when the when the yet debt ceiling was increased. Now she could go longer out on the curb, more Treasuries are more 10 year and 30 year, more of that money fled from the money markets out of the are reverse repo. So bird reverse repos have went from 2.6 trillion down to 1.6 trillion are when $1.1 trillion has disappeared. Well then disappear, it went into buying the treasuries. Well, okay. So they went into treasuries, while the treasuries didn’t float them through the market like they did. They didn’t go out into debt. They went to the and they spent the money. They push that money right out, avoiding the banking system right into the hands of consumers in terms of transfer payments, disability payments, are extending student loans, extending moratoriums on foreclosures. There were there was even tax rebates that they could they bypassed, associated with crises, weather related crises that were coming through. So the money went straight out into that and into corporations. So for example, I know in New England, we got everybody here selling heat pumps, stalling solar panels, if they can get the business, big end of oil prices went sky high, because you’re getting a subsidy, which all kind of disappeared. But that’s all money into all of the small contractors and etc. They’re trying to hire people they’re trying to grow. So that whole business, so we have a strong economy. This is effectively Adam, what we call what we used to call the potential for modern monetary theory MMT This is Biden omics version of MMT. And that’s how they’re doing it that’s how they’re pumping up the money now it’s going to come to an end. Okay, they can’t keep doing this for a number of reasons. And that’s that’s the really real exposure here on it, but it was, I think, wasn’t give the devil to do it was a brilliant strategy. And it fed in with this rush into artificial intelligence that was able to happen and it’s taken the market with it, but it’s it’s a it’s it’s unsustainable, unless the government continues to handle money directly. And that is print doing more of it and taking our debt even higher? And to do that, how’s it going to pay the debt? where’s the where’s the funding going to come to bring the new money in? And that’s a discussion in itself, which needs our listeners need to answer. Where’s that come from?
Adam Taggart 35:18
Well, let’s let’s have that discussion in just a minute. But right, right now, what I heard you say is, we sort of had been enjoying, maybe that’s the wrong term, but but two sugar rushes this year, one economic from the stealth, liquidity, and then one in the financial markets, from all the hype in AI. Right. So you know, the, the downside of a sugar rush is it’s super fun on the way up. But then you end up you know, with the withdrawal factor, and it’s a lot less fun. But, you know, it only matters once the high ends. So to your point about I hear, you’re saying, look what’s happening right now with the stealth liquidity, it’s working, but it’s not sustainable. My question to you, Gordon is is if you had to, if you had to take a guess, when will that have to stop? We will have to start reducing. And I guess the question in most investors minds right now is is can this continue through the election? Presumably, part of this is being done so that the administration doesn’t have a economic crisis on a tam going into an election year? Can it last that long? Or do you think that it’s too unsustainable to be able to be pushed out for that long?
Gordon Long 36:34
Who elements to the answer? The stealth system I just described is unsustainable through to the elections. The real question is, what is their plan to replace it? And when is that plan going to unfold? And that plan is is twofold? Well, it’s actually at least two that are clearly visible to us right now. One is associated with using contingent liabilities to guarantee credit, that are issued by the government to places that well, it may could be Green Deal, it could be climate change, whatever, but organizations, that they will guarantee their lending so that they can continue to sustain their their spending and their growth. So and they’re not contingent liabilities, do not go on the debt of the balance sheet of the government. They only go if somebody defaults on the guarantee. So they’re like foreign aid. They just sit there until somebody defaults, and then the government has to step up
Adam Taggart 37:41
to Jack. But this is almost kind of like an off balance sheet transaction, you’re not going to have visibility into this
Gordon Long 37:47
no visible, you won’t even know what’s happening. You will not you will, it will, there is no paperwork, other than the current government says that it has these contingent liability somewhere down in a small print. And they won’t give you any details. But they’ll do that. Because that’s the way that they can easily bridge this and it’s off its off balance sheet until somebody defaults, I’ll be part of the problem, or part of the answer, if they’re not already doing it, because it’s the only way out that’s sustainable over a longer period, and really continues this quarter MMT version of Biden omics, that the second part of it and to me this is the the most pressing is the the most of the countries are now selling off their dollars, not all of them. But China, Russia sold off all US Treasuries, US Treasuries, China’s taken theirs from about 1.3 down to eight or 900 billion. All of the brick elevens pretty well are getting out of the dollar. So if there’s a weak there’s not the buyers coming into the dollars, the only one that’s out there, that’s has been buying, but it’s flat has been China has been Japan. And the Japanese carry trade is so profoundly important to the global economy and has been since the 1970s for 40 years that people just miss it, the importance of it. And so it’s really trying to ignite the Japanese carry trade. And that requires a stronger yen for them to lending, it requires a larger differential, and these are all falling into place. And we expect we expect that to be a big shorter term. Push into the market that will come through the through the there’s a good victory you just brought up is a kind of a representation. Because when the when it was going down on the left, that was the dollar weakening, so the N was going up. And so you could if you were sitting in Japan, and you’re getting nothing and your interest 1% You’re not going to lend money I can make but you make it if the Yen is going through the roof. So you lend the money out because they’re gonna pay you back at the end. And so you’re making your money on the currency you’re not making money and unless you landed 1% You got somebody said No one American says, oh my god, I can take one percentage pan. I can buy treasuries here at four and a half pocket three and a half percent. And I put it up in leverage, I can leverage it to 20%. What am I missing here? Well, the answer is you hedge the currency. And so the, the banks throughout the world insurance companies or pension plan, this is nothing new to them, they’ve been doing it for 40 years. And so they need it, and they need the business. So there’s a big push here. And so now, so the last few years, we’ve had some problems with quantitative tightening and hasn’t been as good for the, for the, for the Japanese. So the Japanese rate of buying has been flat. And that’s been a problem we need. With the rate of which we’re creating increasing the debt, like we need, you know, we we need to drive another $6 trillion up here without putting it on the Fed’s balance sheet. So we need we need people like of Japanese carry trade, and there are other carry trades, I’m just focusing on the Japanese, because it’s so substantial. And by the way, we cannot have them selling they’re selling their, their dollars to start up their currency, but it keeps falling. So that’s another push that there are there I believe they’re highly orchestrating right now. And you can see it currency markets, see it in the credit, and the footprints are pretty large.
Adam Taggart 41:19
Okay, so let’s, let’s talk about this a little bit more detail as it relates to what’s going to happen to treasuries going forward. You know, right now, Treasuries are yielding a real yield, which they haven’t for a long time. Yeah, and, and it’s, in many ways, that’s very attractive for the average investor, especially if you’re a bit older. Right? You know, during the era of QE and ZIRP. If you were a senior who had expected to live off the, you know, the income of your portfolio in your later years, you are getting totally host right. Now, you can start raising your hand. Now, you can actually get a pretty good relative return in the safety of treasuries right now. So we’ve had a lot of people, a lot of analysts in this program, say, hey, enjoy it while you can, because the economy just can’t withstand a cost of debt. This high. Right. And there were a lot of people as Powell was hiking rates, who were saying, look, you’ll never get above 3%, the economy just can’t stand it. Well, now, here we are, you know, at five and a quarter, or wherever we are. And that has led to a lot of discussion about well, if indeed, the Fed is going to have to pivot at some point, because either it fixes inflation, right and can declare mission accomplished and start bringing rates down or, as more people think, something will break, and the Federal have to step into rescue and start bringing rates down. That that will cause the long end of the duration curve and US Treasuries to rise. And that, you know, you can sit in the safety of treasuries and get paid. And then when that, that rescue that pivot happens, you’re then going to get capital appreciation on top of all of that. I’d love to hear your thoughts on the probability of this. I know that you have made money in similar situations historically, where rates have come down, and the long end of the curve has gone up. Are we looking at another really good opportunity and long term treasuries right now? Or is it more complicated than that?
Gordon Long 43:29
Everything’s more complicated. But the simple answer is yes, it’s going to repeat itself, but obviously, a little differently. But right now, the US a 10 year, as we’re sitting here, it’s trading at 4.34. When I look over here, which is a pretty good range, we felt that the market would start to run into a roadblock, at least on the equity somewhere around 4.2 4.3. But we still believe it’ll create upwards through maybe 4.5 on this round. And at some point in there something it’s not just something’s going to break, there’ll be weaknesses in the market. And we think that the Fed will then fairly aggressively will pivot. I don’t think it’s I don’t think it’s eminent unless something breaks, I think it could drag itself well out in the first or second quarter of next year before it really does pivot. It may be sooner. But if you’re sitting in the bonds, it is pretty good probability that they will be forced into pivoting how far and deeply they go will be less than you think. But they’ll have to take those those rate those rates down and there’ll be some pretty significant capital gains if you want to go further out in the duration suta, the 30 year so that’s nice and a lot of people who just want to want to lock it in, but I think there’ll be a batch of trading reach between high three by 4%, maybe 4.6, somewhere in there that will be in bound range for a period of time. We traded quite significantly here on a trading range. Between 3.2 and 3.65, here for about the last year. Because the beauty of the bond market if you’re a technical kind of guy, it’s pretty nice follows the technicals. It really, it’s pretty nice to see. So the, so that’s what we think it’ll do, it’ll come down. Later on, it’ll trade in this bandwidth I just described, then it’ll come down, but But it’s going back up, then. And it’ll go back up violently. Because inflation, Adam is nowhere even close to being solved. That’s the bottom line. And so what that higher range will be will it’ll then go back into the four and a half to 5% range, Bill Gross, has been doing it with a bond king, he thinks it’s 4.5. Most people I know, think it’s somewhere in there. But I think it could go higher, I’m more aggressive and what I think inflation problems will be so critical. But that’s not imminent. That’s not now, there’s a corrective in here. Because the government will be forced to push more money out through the fiscal spigot, and that’ll it won’t I won’t call it hyperinflation yet. But I will call it another big surge. And there’ll be it’ll be because inflation comes back in a third wave, and very strongly. Pete, I sent it to you earlier. And I guess in a note that, you know, I entered the workforce in the 70s. So I understood inflation. I was working at IBM putting in mainframes, our computing systems. And that’s all we lived in. It was a tough, tough deck a decade, but we forgot the three things that got us out of the 70s. And we’re not fixing those. And that’s why I say I feel confident that we’re gonna see inflation come back and another big wave.
Adam Taggart 46:46
All right, I’ve got another question. But just because you mentioned it, you said three things that got us out of the seven days. Can you name those three things real quickly?
Gordon Long 46:52
Yeah, Volcker magic. And by the Volcker magic, I’m not talking about the great story. Everybody knows that they took interest rates up to 19%. And talking about the real way he solved it. And I think I give you a chart on that to Adam. But what Volcker did Volcker was before he became chairman was the president of the New York Fed over here on the left. And when he was president, New York, the New York Fed is the Federal Reserve, or at least he used to be not Washington, I was a figurehead. The power was in the chairman of the New York Federal Reserve. And, and he believed then that the only way he could he couldn’t manage interest rates that was that was dictated through the board as a committee, but he knew that the way to solve it was to get rid of liquidity tighten the liquidity spigot. And so he forced the liquidity spigot to be tightened. Before he actually in the summer of of 79, became chairman. And when he went in as chairman, he was forced to increase interest rates because the economy was so bad was falling so bad, that he increased the rates, he drove them up quite significantly, he drove them into a recession. So then he had to bring him by the summer of 80, we were in a recession. And he had to bring them down and was and he looked like a fool. It was called, you know, they had all sorts of names, but it was nobody forgets him. But it was a fulcrum debacle. But he but because but he knew that the real solution was that over was the liquidity you had. And the rates no matter what you did with the rates, it was short term, and we’d give you a recession, would be with solving problems, shorter term, but it was not going to solve the inflation. So then when the second time around, he did what everybody know, he just talked the inflation rate up. And he says, because I know I bought enough time on that liquidity open the stop, I have really slowed it. This is going to be and I gotta give it a shot. And he did it any broken. And if you follow that chart, we have managed that liquidity level all the way through the Great Moderation. Yes, I know we pump money with quantitative easing, and we put it out, but it was any managed control fashion. It wasn’t volatile. It wasn’t like the Biden administration pumping out $6 trillion, like a shock to the system over on the right hand side, that that that has taken liquidity and the stealth liquidity and is pumping it into the system that ain’t going to fix inflation, and you can’t take that away. And we haven’t solved the energy problem, etc. So the Volcker problem I just described, you said I said there was three The Volcker problem, there was the petro dollar that that the Secretary of State put into place. And that was agreement with Saudi Arabia and the petro dollar as of eight months has gone away. And remember the petro dollar was all about supporting Saudi Arabia and by supporting them with arms and etc keeping them in power the king they would go with our with energy would only be bought and sold in dollars US dollars and They had to take the money and deposit it in a US Bank. With in treasuries from there, they could do other things with it. But it had to do that with salt funding problems. It solved the beginnings of inflation problems, in terms of the energy costs. We’ve just ostracized Saudi Arabia so badly that no longer they transacting. And while it’s now have the the rec 11, and three of them now control of the three new members 48% of the world’s energy market. So we have this energy problem that God has, we saw the Goddess out of the 70s, like the Volcker goddess, Oh, 270s. But it was also the second was energy, and we’ve crumbled it. And then the third was the Japanese carry trade that we brought really into existence, then. And it’s, we’ve got, it’s the only one we may be able to reignite, I’m trying to be very simplistic here. But again, that’s what nobody wants, nobody talks about. But if you’d live through it, and you, I remember these deals and how important it was to the, and allowed us to consume more than we produce for 40 years.
Adam Taggart 51:06
All right, and what I hear you saying is, is that we’re watching at least two of those, and are not going to be able to rely on, you know, all three of those factors that led to this Great Moderation. And we’re gonna have to figure out how to navigate a new world that doesn’t involve all of those. And we don’t even yet know to what extent we’re, you know, each of them may still exist or not exist in this new era. All right, so if I heard you correctly on just getting back to the bond yields for a second treasury yields, I heard you say, what’s going on right now is unsustainable. There probably is some sort of correction coming. unclear exactly when but probably measured in quarters, not years, where the Fed will likely have to intervene, yields will come down, long bond prices will go up. But then, because of the dramatic, centralized response, both on the monetary side from the central bank’s but probably also maybe on the fiscal side as well, inflation is going to really explode. And they’re going to have to tighten rates again, to get that under control. And so there’s going to be some sort of like down and up progression that you expect. Correct me if that’s wrong. And also in your answer. When I had Felix zulauf On this channel at the beginning of the year, he basically said, We’re now entering the decades of the roller coaster, where you’re just going to see these this high volatility. And I think what you just described, there is kind of exactly the type of thing that Felix is talking about, where you’re going to see kind of very aggressive policy in one direction until the whole system starts to fall apart, and you’re gonna see it lurch to the other side on policy, and we’re going to just see a lot of this violence swinging back and forth. And that’s going to cause rollercoasters, both in terms of economic growth, but also, obviously, in terms of financial asset prices. Now, I’ll let you respond here. But Did I did I summarize should have your general outlook for the next couple years so accurately?
Gordon Long 53:15
I would say so. And I like the roller coaster analogy that he used. It’s exactly this. It’s they’ll be much more violent. That’s what I meant by volatility. In specifically in the non equity, everybody when he said volatility always think about equity markets, it’s going to be in in currencies and in bonds and in credit, and then especially in things like high yield credit. So yes, I don’t know, I think it’ll be a little bit more managed than that that may portray it to be. I sent you a chart on inflation, saying inflation comes in, in waves. And I thought, you know, I’ve said it’s going in three ways. But we’ve found that the inflation stays with us and we keep going. It appears we go from inflation to deflation, but the answer is that we have both and they’re always working, but they get more emphasis at any given time. And lately, we’ve fallen into a deflationary part. It doesn’t mean inflation has stopped. It may slow down in some cases, but they’re still going they’re still portraying are still working so that deflation is with us, but these but those are the ball that was those swings that’s underneath what drives that is what’s really driving this, this this volatility. And what’s what’s the core of it is that inflation is getting to be more and more especially in the United States where 70% consumer economy inflation is about, about the things that we absolutely need and we pay cash for because we don’t finance up to what we do have indirectly but we we pay cash for them, whereas default ation is getting to be and is in more and more in what we want. It’s longer term and we finance. And the structural changes that are happening with finance and credit, are making those particular forcing functions. That is what the needs and the wants in our country in our in our consumer base and a 70% come our economy more profound. And my hesitation earlier is around the world because I don’t think the rest of the world will have necessarily that same level of, of exaggerated response we may see in the United States, because they’re not as dependent. I mean, China, barely 32% of their economies in inflation are is rather in consumer, they’re your consumers and the big deal. It’s where the capital is going. Right, coming from revenue.
Adam Taggart 55:49
All right. Well, look, it’s we’re getting near the end of our time, Gordon, I do want to get into kind of just your get down to brass tacks and where are you talking about your market outlook so that that viewers have a sense of what you think is more likely to happen with some of the major asset classes going forward in the next six months, year? Whatever. Real quick, though, you know, economists always warned about deflation, because they see that as people, you know, pulling in their spending. And you get caught in this deflationary spiral, and you have a depression, like you had back in the Great Depression. But I wonder, with inflation, the way in which we’re experiencing it right now. You know, the cost of living is increasing so fast. And in general, more faster than than wages have been. That in itself is also impacting economic growth, right, because there’s just less leftover for consumers to spend to drive economic growth. So I presume I don’t put words in your mouth, but I presume a future of higher inflation, you suspect is going to basically be a drag on economic growth going forward? Is that true?
Gordon Long 57:11
Very much. So. I mean, were you eating our seed corn, and if you were to increase, increase wages, which have been under under utilized for years, the the share of the profits that are going to labor, they have every right to be striking right now. And the fact that we’re seeing strikes at the level that we’re seeing right now, says that we’re very much at the beginnings of this inflation driven from from labor. Look at the UA Aw, I mean, when when the UPS settle at $170,000 for a driver, the shockwaves went through every union in the country, I can imagine their phones ringing off the hook saying what are you guys doing over there sleeping, so So the ual up, or UW UAW Aw, went on strike and their demands are they want a 40% increase, they want a four day work week paid for five days, and they want all their pensions reinstated. Have all and they’re able to all three are out now, though, gonna get part of that. But we’ve got this massive move towards towards strikes and is pushing up. That’s why the service sector are having to pass it on. So that’s another and that has nothing to do with energy, it has nothing which will will spike it has nothing to do with food, which will spike on food and energy and fertilizer. So so it’s coming. And now, but but the big caveat of this is what’s going to happen with that labor, you know, we have a whole discussion we could take on on artificial intelligence, which is is going to be very, very threatened to the professional white collar workers, as more and more apps unfold, and they will come at a rate that you’re going to shock yourself. Maybe you won’t, but that that’s coming, but that’s only part of it. You know, and I will be political here but I have to make the state we got something like 6 million there abouts patrol pay our immigrants right now, coming across the southern border that’s not by coincidence has planned is perfect. And we’re told there’s no Providence structure. And it’s actually good news, bad news. Because they’re going to need jobs. They’re not going home. We’re not I don’t know what the politics are. I just know the realities are that they’re going to want to work. And they’re not going to demand 40% increases. They’re going to say don’t want new little new plants. I’ll work at this rate. Glad to do it. And I don’t need to know the language because I’m working on this kind of in this environment. And and I think that this is a way that the Biden nomics is looking Oh, because they know the inflation wave is coming. I mean, they know this is a given no No matter what they want to tell you, and this is another way of what they’re trying to plan, and they’re and they’re looking at the election, I’m always told, Well, it’s more voters now than it may be. But there’s another strategy going here. I’m
Adam Taggart 1:00:12
interesting, and we don’t have time to dive deep into this, but because we are reshoring, you know, we want to restore,
Gordon Long 1:00:19
and we will, we will, we are going to accelerate that and funded, it’s coming.
Adam Taggart 1:00:25
Okay. But we know that that’s the plan. And, you know, I think everybody understands it, you know, we have these just in time global supply chains that we found out, we’re highly efficient, but but not resilient. And we don’t want to be caught the way that we were caught during the pandemic. But of course, labor costs a lot more here than it did in places like China. And you’re basically saying that, you know, an influx of cheap workers will be one of the ways in which we absorb some of the shock of reshoring.
Gordon Long 1:00:55
Or, well, at least, I’m saying, there’s some thinking going on that way. And there’s an attempt at that, I believe, is part of it.
Adam Taggart 1:01:04
Okay, whether it works out, we’ll see. But
Gordon Long 1:01:07
these are, these are the kinds of political economic matters that I have to stress with our listeners that you got to pay attention to today, he’s just done all this politics, these, these are huge strategic moves, that are going to impact profits and direction and funding and liquidity coming out of the government. Because they have the corner, they’re trapped. If you were sitting in a White House, what are you going to do, you’re not going to just let it happen. I don’t think maybe I take that back. I don’t know what they’re going to
Adam Taggart 1:01:38
do. So Gordon, when I was in business school, there was a course we were forced to take, I can’t remember the full title, but it was basically called non markets. And it was about all these factors that will, that can influence what happens in the economy in the markets, but they’re not market driven factors. They’re the things like what you’re talking about. And I’ll tell you, none of us wanted to take the class, we just thought it was the most boring, extraneous thing that they were forcing us to take in. In retrospect, as I look back, I’m like, Oh, my gosh, that was the class we should have paid the most attention to. I took
Gordon Long 1:02:10
it, I took it. And it was called forcing functions. It’s absolutely what’s happening.
Adam Taggart 1:02:16
It’s a much better title forcing functions. All right, well, look, in the few minutes we have left. Let’s talk about your market outlook from here. So we’ve got a bunch of viewers watching who have listened to what you’ve had to say they’re thinking Gordon is really smart. I’m going to take all this stuff into consideration. I don’t want to become collateral damage to what he thinks might be happening ahead here. So what do you see going forward, given the roadmap you’ve laid out here, for stocks for bonds, are there any particular assets you particularly favor right now, or they’re ones you wouldn’t touch with a 10 foot pole.
Gordon Long 1:02:48
As I said, right, the beginning, I think this is the time to take your foot off the equity side of the house, there’s other ways to make money just than other than the stock market, there will be a time to come back in. I, this is the time where on the surface, you should be buying gold and silver hand over fist. I think that there seems to be an element of that in your portfolio. But I really caution because you can guarantee that the government will tax the living hell heck out of it, they will regulate it, or they will fix the pricing, it’s going to happen as soon as cheers God made little green apples at some point. So you know, if you’re gonna do it, you better be quick, quick, like a bunny at the right time. But that’s typically how you address that the whole move to two commodities, I think it’s still in front of us. But it’s still out away. So that we bought we’ve had the first wave of that, of investing in commodities across from grains right across the spectrum through through energy, but there’s a time and a place because the whole advent of the BRICS 11 has almost cemented that into place where money really is going to shift. It’s not about D dollarization. It’s about the real value of money being either, and I’ve said this on your show last time, you either build it, you mind it, or you produce it, you don’t print it. And so they’ll have a commodity players are so powerful now that they’re going to start dictating what you pay. And that’s where the pricing is going to be so good. At some point, commodities are going to begin their second big wave, big wave up. So that’s what you need to be giving a lot of thought and education and getting good advice on right now. On the shorter term. I believe that the investment focus is in the area of bonds, it’s in the area of credit, and in areas of high yield risk zombie corporations, and on various sides long and short on that and you need advice on how to do that, from those who are can give you that kind of advice. But that’s where I would be playing on. I think that’s something in the next 60 is short to intermediate to and it’s safer. You know, the law you know, by one year, you can buy a one year T bill right now and pay 5% You can sleep at night. And some of the going a little further go down, you make capital gains. And what that and that money is there for when something gets really obvious to you. So I would play this a time to be prudent. That’s what I’m trying to say. Trying to be prudent trying to be cautious. It’s a risk. It’s, it’s a world in change right now. And who, who can forecast I’ve given some opinions here, we can’t forecast it. But it’ll be your ability to to react to it and have the capital and money available. Because I’ve always found in the last comment, Adam, is when it does happen. And it’s, it’s so obvious, this is the best investment opportunity I’ve ever had. But it’s too late because you don’t have any money. And you’ve lost it on the move. And you got into earlier, whatever, if you just been patient, whether it’s too high or too low, when it suddenly happens, there’s no, it’s laying on a table at the bottom of 2008. It was like at 666. How much lower? Can it go? It’s a relevant time to get in. world isn’t, I need to apologize. I been particularly negative here. I didn’t mean to be. I’m actually more optimistic about what’s in front of us. This is a world shifting from a unipolar to a multipolar world. There’s some great opportunities. So don’t be frightened of it. But but just do your homework.
Adam Taggart 1:06:22
Okay, and it sounds like what you’re saying is is, you know, big period of transition here. And as a result, there’s probably going to be some pretty big repricing as we head into the transition. And you want to make sure, first and foremost that you don’t get wiped out, so that you can deploy your capital when the dust is less dust in the air and things a little bit more clear into these potentially quite good longer term opportunities for the new era are heading into, but here in the in the here and now just focus on not getting wiped out.
Gordon Long 1:06:56
Right on. It’s a time to be Be prudent, and and prepare for it.
Adam Taggart 1:07:01
All right, great, Gordon, this has been fantastic. I could go for another two hours with you. I’m sure everybody’s wishing I would do that. But I’ve got to be respectful of your time. I do want to say you have an open invitation to come back on this channel whenever you want, sir, particularly if some of the things that you’ve been warning about start to happen. And I’d very much love to have you on when that does happen. So that as emotions are getting inflamed or whatnot, you can be telling people hey, you know, this is what I’ve been expecting, this is what I think it’s going to happen next, you can be the calm voice of reason. And then of course, when we get to the point where you begin to see some of those obvious opportunities just laying there on the ground, you know, to use your your analogy from 2009. Please come back on and share those with our audience. For folks that have really enjoyed this conversation, Gordon and would like to follow you and your work, where should they go?
Gordon Long 1:07:52
Yeah, we I have a site that I distribute my work exclusively, it’s called my tasi.com. That’s ma ke a si.com. I put out a, a weekly newsletter and and videos on a regular basis that are issued through that it’s at a minimal charge for it to cover our costs. And really, it’s nothing more than a reflection of our research. Because we make our money investing and we’d kind of share it because you know why I go into this is that we look for people to give us feedback, we have found some of the brightest people in the world. And on all walks of life can write us an email and the lights go on because we didn’t know something. And so that’s why we do it because we want to solicit some bright ideas that make us money. And by the way, thank you for the invitation. And if we made some money, I’m glad to come back and gloat. I lose some money I’ll probably probably won’t be hearing from me.
Adam Taggart 1:08:48
Not at all. Not at all. Well, look, again, Gordon, you’re one of my very favorite people to interview. Thank you for coming on and giving us so much time, folks. Two last things before we go. Just a quick reminder that the Wealthion fall conference is still available for you to purchase tickets at at the early bird price discount of almost 30%. To do that, just go to wealthion.com/conference. And if you’re an alumnus of one of our previous conferences, check your email inbox because you should have a code for me. That’ll give you an additional 15% discount on top of that 30% discount that I mentioned. And if you’d like to see Gordon make good on his promises there and come back and share his his insights with us when he sees important new developments occur. Please encourage them to do that by hitting the like button, then clicking on the red subscribe button below. As well as that little bell icon right next to it. Gordon, it’s again, always a pleasure. Thank you so much, my friend for coming on. Look forward to having you back on as soon as you’re willing to come back on the channel.
Gordon Long 1:09:48
Thank you very much, Adam. Look, always enjoyed these talks. Talk to you later.
Adam Taggart 1:09:52
Thanks everyone else thanks so much for watching.