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Join Andrew Brill on Wealthion as he dives into the his favorite moments from our guests over the past week. From uncovering tax-saving strategies with Tom Wheelwright to decrypting market predictions with Chris Vermuelen, and exploring the seismic shifts in cryptocurrency investments with Raoul Pal, this episode is packed with insights designed to safeguard and grow your wealth in turbulent times. Whether you’re bracing for a market crash, searching for solid gold investments, or curious about the future of Bitcoin and AI in investing, we’ve got you covered.


Andrew Brill 0:00
Welcome to Wealthion. I’m your host Andrew Brill. And this is our weekly market recap through our guests on wealthy and we bring you the latest on the economy and markets on a weekly basis. Today I’ll be recapping some of the standout moments from wealthy on this past week, giving you advice on insights that stood out on our channel throughout the week. Let’s dive right into it.

This past week, I spoke with tax expert Tom Wheelwright. During our conversation, Tom showed us that navigating taxes isn’t just about survival. It’s about thriving, with a map to minimize tax burdens and maximize wealth, let’s revisit how Tom makes taxes not just bearable, but beneficial.

Taxes can be fun, easy and understandable. And Tom, after reading your book, I’m almost converted to being a tax Okay, guy, but explain to us how taxes can be fun, easy and understandable?

Tom Wheelwright 1:00
Well, first of all, Andrew, they’re, they’re just not that complex in, in concept. So the concepts are pretty simple. Remember, it’s your money. That’s rule number one. It’s not the government’s money, it’s your money. And and really, the second one is that all you have to do is change some of your facts in order to reduce your taxes and, and we can get into that a little bit more, but I think they’re fun. If you look at the word refund, just write it down, right in the middle is the word fun. Everybody likes getting a good refund. So to me, taxes are a game, we’re all in this game, we don’t get to choose whether in this game. That’s a fallacy that you can choose to get out of the game. And so I’m just thinking, if I’m in a game, I I’d rather win the game.

Andrew Brill 1:46
I mean, yeah, taxes, I guess can be fun, and you make them fun. And obviously, you know how to deal with those. How do we get out of the mindset, and I find myself saying it. Look, I don’t mind paying my fair share. Everybody’s in that mindset of okay, you know, I’m gonna have to pay the government something. That’s a mindset. And we need to get out of that, according to your book, which I’ve read and was fascinated by.


Tom Wheelwright 2:09
Yeah, it’s it’s really, that this idea that we have to pay taxes, I mean, yes, we’re obligated to follow the tax law. But the idea that the tax law is all there just to raise revenue is, is a fallacy. Most of the tax law is really there to encourage certain behaviors. For example, why do people invest in a 401k? Typically, because they get a tax deduction? Why did they buy a house instead of rent? Typically, because they get a tax deduction? Right. So there are a lot of incentives. And in fact, if you look at the tax law, like I have, for 45 years, you’ll see that the first 30 pages really raise revenue they give you, here’s how much tax pay, they said, everything’s taxable unless we say it isn’t. And they say nothing’s deductible unless we say it is. And then they give you these charts and tables, but the rest of the tax law is fundamentally a roadmap for reducing your taxes, it’s an instruction guide, to what are those things that the government wants you to do that if you do those things, you’ll reduce your taxes?

Andrew Brill 3:14
You said, we have to change the facts. And explain this to me a little bit more, because I’d love to change my facts and pay a little bit less. But what are the facts that we’re looking to change?

Tom Wheelwright 3:25
Well, let me give me an example. So any expense can either be deductible or not? Okay, so so if you asked me, for example, is that microphone that you’re looking at, you’re speaking into, is that deductible, I’m going well, if that were used in your personal studio, for fun, and entertainment, it would be no, that’s not deductible. But if you use that in your business, to create a podcast to create revenue, it becomes deductible. So you’ve just changed the facts, you haven’t changed that you have a microphone in a studio, what you changed is is how you use that microphone and what you use it for. So the key is you have to decide, first of all, you have to have a choice, you have to know what facts can you change. And then you have to decide, do I want to change those facts? Let me give you a simple example. So I love my wife and I love going to Hawaii. All right. And a lot of people like to travel, okay, we can go to Hawaii. And if we did certain activities while we were there, that travel would be deductible. Now I choose for the travel sometimes to not be deductible, because I don’t want to spend four and a half hours a day doing business with people in Hawaii. Right? I actually want to take a vacation. And so but that’s a fact. And I’ve had clients that actually have changed what their behavior was on their travel, just so the travel could be deductible.

Andrew Brill 4:54
Here I am Andrew Brill, and I need to go find a tax accountant or an accountant that knows taxes. Tom, what am I looking for? Because I’m gonna go out and find an accountant. I’m gonna say, okay, you know, what can you do my taxes? But that’s not the right way to do it. You need somebody who actually like you who has been studying the tax law for so long. You want to make sure they know the tax law. How do you how do you figure that out?

Tom Wheelwright 5:17
Well, you know, first of all, I think the most important thing is what questions they ask you? Are they asking you real questions? For example, you know, by reading my book that if you’re going to change your tax, you have to change your facts. So they should be asking you a lot about what your facts are, and what your perspective facts are. So one of the things I always like, I like to see a tax advisor who will ask how do you make your money now? And what are you planning to do with your money, when you make more, because how you invest your money has a bigger impact on your taxes than how even how you make your money. And and so it’s really the quality of the questions. To me, one of the thing I would add here, Andrew, is that if you find if you run into a tax advisor who sounds, you know, like, they want you to think they know it all, I would run away because no tax advisor knows everything I learned early on in my when I was getting my master’s degree at the University of Texas. I had a professor said, the thing about tax law is the more you know, the more you realize you don’t know. So you want you want a tax advisor who’s always learning that isn’t relying on old information. I mean, to hear people say that, for example, a home office is a red flag. This is somebody who has not learned something new in 30 years. Because it used to be it used to be a red flag, it’s not anymore if you do it, right. So things change. So you want a tax advisor who really is staying up on the law, and really is asking the questions.

Andrew Brill 6:54
So let’s get into life planning a little bit. You know, you have people that are getting married, or there’s another life event, they’re having a baby, how do you plan on that? I know you you have to plan and it’s about your facts. How do you plan for all?

Tom Wheelwright 7:08
Well, so. So true story. So my wife and I have been married nine years now. And she was hesitant to get married because she knew her taxes would go up. And she was right, her taxes. Minden, mine were already high enough in the first place, but her taxes went up. And because there is a marriage penalty, it’s a true penalty, you can pay as much as 30 to $35,000 more being married than being single. So if taxes are a motivator for you, and you don’t care whether you have a ring or not, or have a marriage certificate, then you may want to think twice about that. It’s a bizarre, it’s absolutely a bizarre disincentive to getting married. So that is a consequence. Having children that has less of a consequence than it used to we used to have, we used to have personal exemptions for our kids, we don’t have those right now, because we have this this large standard deduction instead. So it’s, it’s a little odd that having children we think of them now, some states still do. I know that Georgia, for example, held that a fetus gets a tax exemption. Because they’re under their law, a fetus is a person, so they get a tax exemption, while the mother is pregnant with the with the baby even before the baby’s born. So states also have tax laws. Remember that state, your state tax lot can be big, if you’re in California, or New York, very big, even in other states, it’s you know, the average tax rates are for a state is about 5%. And that’s, you know, that’s 5% of your total income, that can actually be a pretty serious number. So don’t forget the state taxes.

Andrew Brill 8:58
So that little kid now grew up and is on its way to college. What is there something that look I’m gonna pay all this money to college? Please Tom’s tell me something there was we can deduct, because we have a little one going to college,

Tom Wheelwright 9:13
you know, there’s, there’s actually a lot of things you can do and, and a lot of good options, you know, if you’re going to if you want to, and if you’ve got a business, and they can work in your business, you can actually pay them to work in your business, they’re going to pay at their own tax rates, which could be they get their own standard deduction if you pay them, which is you know, for like $14,000 now, and they don’t pay income tax on that. Now, you could still take that money and put it into a Roth IRA for them. Right or a Roth 401 K for them. Well, if you do that, that grows tax free, and remember that you can take after five years, you can take the amount of money you put in to the Roth 401 K, you can take it out With no penalties, so you could actually use the principal portion of what you put in what the child put in for their education over the last 10 years, for example. And that’s not taxable when they take it out. So they could actually use their Roth for their education. Another thing they could do is they, you know, instead you could pay them and they could invest in real estate, they could, they could have their own business. I mean, there are a lot of kids, I mean, pull up, tick tock for about 50 seconds. And you’ll find 50 different kids that have businesses, and they’re doing very well. And, and so, you know, helping your kids understand finance and actually working with them on investing themselves rather than you investing I think, is a huge tax benefit. I mean, there’s always, you know, I mean, if you, if you, if you don’t want to think about it, you know, you’re not really interested in investing, and you just want to put the money away, then you can consider a 529 plan with 529 plan. I’m not a huge fan, because you don’t have a lot of control over it. Fortunately, you can, you can roll it over to an IRA, which is nice, up to a certain amount. But it’s pretty limited. Remember, remember, it’s a state, it’s the state requires certain types of investment parameters around it. So pay close attention before you do a 529 plan. But there’s a lot of ways to help your kids invest that you don’t pay taxes now, they don’t pay taxes in the future.

Andrew Brill 11:31
Our own James Connor was joined by Chris Vermuelen, the chief Market Strategist at the technical traders. During their interview, Chris shared his outlook on the rally of gold to the potential tumble of tech giants and offered a compass to steer our investments through stormy markets. Let’s delve back into his analysis and see why when it comes to protecting your portfolio. Timing is everything.


James Connor 11:53
Chris Vermuelen is the chief Market Strategist at the technical traders, and we’re going to get his thoughts and where he thinks the markets are going in q2 and beyond. Hi, Chris, thank you very much for joining us today.

Chris Vermeulen 12:05
Hey, thanks, James. Pleasure to be on the show.

James Connor 12:07
The last time we spoke in q1, you were bullish in the short term, but bearish in the longer term. And now that we’re in the early parts of q2, is that still the case?

Chris Vermeulen 12:17
Yeah, I’m actually still still bullish on the market. I think there’s potentially another few weeks or maybe even a month or so of higher pricing. As you and I are recording this, the markets are down fairly sharply today on the mark on the SP 500, and the Nasdaq with Tesla and some some difficult earnings numbers and Nvidia down. But overall, we’re seeing panic selling in the market. This is this is a good thing. From a short term basis, when we see panic and a pullback to like the 20 day moving average, which is what the indexes are doing. We have been finding very strong support and a bounce once this little wave of panic among short term investors finish kind of spooking out of the market.

James Connor 12:57
And so just to summarize, you’re still bullish in the short term, you think the market might lift higher for another month or so then you think we’re gonna get some weakness, and that’s going to fall? Or that’s going to continue into a bigger sell off?

Chris Vermeulen 13:09
Yeah, exactly. I think later this year could be very difficult for the markets down pretty sharply.

James Connor 13:14
So why don’t we look at both the s&p and the Nasdaq on your charts.

Chris Vermeulen 13:17
If you take a look at the charts, more or less, if you kind of step back for one view here and actually look at the stages that the markets go through, because this is where all my analysis really comes down to is understanding where the markets are, in terms of which stage it’s in. And this is based on Stan Weinstein’s book, How to profit from bull and bear markets, he breaks the market down in four stages. And where where I believe we are right now, you know, from a high level is a stage three topping phase. And this is this is very difficult phase for, especially for those trading sectors or individual stocks because they’re all over the place. And the overall stock market when we look at the s&p 500 and the NASDAQ, for example, they are hitting new all time highs and they don’t reflect this blow off top that we saw in growth stocks in 2021. And they don’t reflect this kind of bear flag this pause before the markets go even lower. So the markets are pretty masked right now. And so if we do take a look over at the s&p 500, for example, we can see we are hitting new all time highs, we’re pushing higher. And as we just mentioned here, this pink line is the 20 day moving average. And so the SP 500 just keeps bouncing up to this 20 day moving average and today we’ve got a pretty big gap down or as you and I are recording this and we’ve seen these big moves to the downside over and over again and I have an indicator that shows us when there’s panic selling when the average investor is dumping shares. I use the New York Stock Exchange up and down volume ratio and we’re seeing that today we have panic selling in the market. It’s not huge volume to the downside is just people are thinking the market is topping and they’re getting out Uh, and typically every time we see this, and we tend to see the put call ratio spike up and pop, which we are seeing right now as well, the markets want to go higher and more or less people are dumping their shares. They’re scared and they’re buying downside leverage, like put options to profit from falling pricing, and they seem to always get caught off guard. Because the market we’re in an uptrend they are betting against the market. So, you know, when we look at this chart, we’re at support, I would not be surprised if we see the stock market hitting new all time highs, you know, two or three, four days from now potentially, very easily.

James Connor 15:35
And what about the NASDAQ?

Chris Vermeulen 15:38
Yeah if we take if we take a look at the NASDAQ, it has been struggling a little bit more in terms of price action, it’s really been trading sideways quite a bit longer. And you know, if we kind of look at it from a couple different views, I have some different indicators and analysis that if we look at the bottom of this table down here, the QQ Q, it says risk off. And what this is taking a lot of things into account, a lot of technicals is taking price action is taking momentum, it’s taking cycles, sentiment, volume flows for orders, it’s taking a lot of different stuff. And it’s telling us people are actually getting out of this sector. And this is a little bit of a warning sign. And when we compare it to the SP 500, for example, we had a new trend start back in November for the SP 500. The SP 500 is up roughly 17%. So the SP 500 has been doing very well. If we compare that to the NASDAQ from when the uptrend started. The NASDAQ isn’t performing quite as well. It’s it well it’s it’s down very sharply today it’s picked up speed, but overall the SP 500 Over the past week has been outperforming the NASDAQ by several percent. And typically the NASDAQ should be blasting past and outperforming so and it was earlier throughout this this this trend. So the NASDAQ and the tech stocks are starting to lag they’re starting to pull back. And that is a sign that it’s running out of steam. Typically when we get very close to a stock market top and economic cycle, like the economy slowing down, we tend to see precious metals commodities do well, energy is on fire energy stocks are ripping higher, they’re leading the way. And we also see industrial capital goods like industry, the industrial sector, equipment, people upgrading their the factories and things because they don’t realize there’s a cycle at play here, they think they’re going to keep growing this COVID bubble is going to continue. But that’s not really the case. And and all those things are taking off. And if we look at xL AI, for example, which is industrial, it has been you know, ripping to the upside hitting new all time highs, and that is because companies CEOs, they don’t understand the cycles of really the economy of the stock market and they’re they’re expanding their factories, they’re buying new equipment, all of these capital capital goods, and they don’t realize the music’s probably going to come to an end we’re gonna hit a recession. And so this is a we’re seeing this in the homebuilder sector as well, a lot of people piling into homebuilder stocks, because they believe we’re going to start another real estate bubble. And another big rally, they think the softness in real estate is just an opportunity. But the reality is they’re they’re loading up and buying all these things and expanding their companies probably at the worst possible time. So when you put all these together, all the fact that these commodities and the mindset of everybody’s super bullish on things, is usually sign that we’re coming to an end.

James Connor 18:43
So one of the names that’s kind of leading to the downside today, or it’s also bringing down the broader market is Tesla, and they came up with their q1 numbers, they were lower than expected. Maybe we can take a look at that. And give us your thoughts on Tesla.

Chris Vermeulen 18:57
Yeah, Tesla is clearly in a downtrend as well, it’s got we’ll zoom way out here. It’s got a much uglier chart. It has kind of, if we were to kind of put it where Apple was Apple kind of you know, had has a support level. And then right now Apple would be trading equivalent to somewhere around here. And this is the type of precipitous fall we could see in apple. Now, if we take a look at Tesla, it is clearly in a downtrend. That’s making a series of lower highs, lower lows and longer term picture. It’s even got bigger, bigger downtrend at play. So we could see Tesla very quickly dropped down to the 121 15 mark. The chart pattern is is pretty darn bearish. It is a series of bear flags meaning price sells off and then it flags in the opposite direction. And this is known as a pause and then it continues down whichever the direction was into that flag and now it’s forming another bear flag, which is pointing to another move down so the These two heavyweights are both on the verge of breaking down. And we can see that there’s a support level from back in last April, that if it’s broken, it’s going to be just like Apple, both of these could break critical supports and have a very, very sharp drop. And that could turn the tides on the market and stole stole them from from wanting to rally going into May.

James Connor 20:24
Okay, one more tech name before we move on. Let’s look at Nvidia. It’s up. I think it’s up 80% on the year and which means it’s added another trillion dollars in market cap. So let me let me hear your views on Nvidia.

Chris Vermeulen 20:38
Yeah, so Nvidia,, I mean, it’s still in a very strong uptrend. It’s pulling back to this pink line, which is the 20 day moving average, which if we’re in a really strong uptrend, it should it should hold. I do believe we’re in kind of nosebleed territory, we had a lot of people getting nervous around earnings. And then we had this good earnings and huge blow off move. But now we’re getting into volatility. And we had a big gap up price ran up and then got hammered down. And now it’s trying to it’s digesting this is still a very bullish chart pattern for an NVIDIA The question is, is this going to be a little double top and we kind of break down below this level, if it starts to break down, we could see a very, very quick, it’ll be a very precipitous fall as well. There’s a lot of momentum traders and Nvidia. People who just keep piling in and they got their eye on it that when it starts to roll over, they’re all going to want to get out. And there’s a lot of general public people who don’t really know much about trading or investing, who have been chasing and video higher. And once they start to lose a bunch of money, they have really no real strategy at play, they all start to panic out and it just creates a wipe out effect and massive volume. So that’s the problem with these kind of these huge brand names and these huge kind of bubble ish moves, it sucks in everybody that they all panic at the same time. So what goes straight up could very quickly come straight back down. And a lot of people will take a beating but it’s holding up we need to see if we’re going to have one more big push and blast through 1000 and maybe have one push into May or has the market topped and are we going to see a pullback and as you and I are speaking to me today is a very good very important pivot point because everything is now at critical support, including Tesla and apple and Nvidia the stock indexes. We’ve got panic selling on the on the on the market, which is telling us usually that’s oversold, we’re ready for a bounce. People are buying put options. They’re betting on lower pricing. So we’re you know, we’re at this turning point, is the market gonna break down and claps or are we about to shoot up and have another rally and that’s where money position management comes in. Whatever happens we need to make sure we you know manage those positions protect our capital going forward.

Andrew Brill 22:56
Great conversation Chris and Jimmy Brett Cadwell from eToro join me earlier this week. It was a week where the markets trembled at the mere whisper of interest rate decisions. Bret stirred firm dissecting the Feds move and their potential impact. As we navigate through the speculation and inflation fears. Brett offered his advice on how to safeguard our investments through uncertain times. Let’s take a look back at his forecast understanding the seismic shifts that may lie ahead in our financial landscape.

I’d like to welcome back Bret Kenwell to Wealthion. Bret is a former financial journalist and is now an Options Analyst for eToro. Bret, welcome back to Wealthion.

Bret Kenwell 23:35
Yeah, thanks so much for having me back.

Andrew Brill 23:37
It seems like everything hinges on whether it’s Jerome Powell says something or some economic indicators come in. But the market seems to go way up or way down with the newest economic data whenever it comes out.

Bret Kenwell 23:52
Yeah, you know, if we go back a couple months and look at what the bond market was pricing in and where investors expectations were, you know, go back to December, really was not that long ago, investors were expecting upwards of six rate cuts for this year to start in March. And the Fed acknowledged that that was probably a little people were a little too far over their skis on that expectation. And it didn’t take long for that to pan out. And to prove right we got the hot inflation report in January and not as if the market hasn’t been hinging on every CPI report we get. But I think that really set in motion. Investors focus that on all of the really relevant economic reports, right, the labor market. The jobs reports, the retail sales, PC and inflation, especially those reports and they’re hanging on every word from the Fed, looking for clues on rate hike skews, not rate hikes rate cuts, wondering how many we’re going to get when they’re going to start and it’s it’s really just been hinging on every single report for the last three months.

Andrew Brill 24:56
And now you have the vice chairman who spoke on Monday who said well maybe won’t, we won’t get any rate cuts this year. And you now you see where the market is going? You know, we were up 10% In the first quarter and first couple of days of the second quarter. Not so much.

Bret Kenwell 25:12
Sure. Yeah. You know, our approach at this point is we’re optimistic but also realistic, right. So the s&p rally, like you said, 10%, in the first quarter, and also really more than 10% in the fourth quarter. So we’re working off back to back quarters of 10% or more gains. Index is up five months in a row. So is the NASDAQ and the Dow. So after that kind of performance, it is hard to be bearish. And to be clear, we’re not we are optimistic, but at the same time, we’re realistic, you know, we can’t expect these types of returns quarter after quarter. I mean, I wish we could, but we can’t. So, you know, at some point, you know, it’d be it would make sense to have some weakness in the market and a pullback. Kind of the tough questions around that are when will that happen? And when it does, what’s the magnitude? But in either scenario, you know, we’re staying constructive on the markets, because we’re constructive on the economy. And until those two things change, it’s hard to be you know, it’s hard to be too pessimistic.

Andrew Brill 26:12
Is there and I know there’s the bulls and the bears, I don’t know what’s in the middle. I don’t expect or I mean, you’re the expert, and you’re telling me maybe it’s not gonna be a 10% return. But maybe it’ll continue to creep higher, but not by anywheres near as much of a percentage.

Bret Kenwell 26:29
Yeah, you know, it’s it’s hard to, it’s hard to put a number on it, you know, you see, estimates change all the time as as the market moves, has a funny way of changing sentiment, right. But the way I look at it is, I look at it as a path of least resistance. Right? And right now, that’s to the upside, I don’t know how far that that path leads to or how long it takes, it could take, you know, we could be in the earlier innings of a multi year bull run, you know, we just don’t know. And until things really change and deteriorate, I don’t really plan on getting off the train. You know, that’s my, you know, my personal belief in the market. And, you know, when we stop when we pull back a little bit, you know, that’s probably a good opportunity for investors who have been under allocated or have been looking for their moment to get in, that’s probably their chance.

Andrew Brill 27:20
You know, I know that we don’t want to say there’s cracks in it. But there’s there’s is some weakness showing that wages are definitely up the data shows that wages are up. But 25% of the the working class people, I guess their wages haven’t gone up at the same percentage, as they’re showing now with prices going up and that 25% not meeting the inflationary rate. There could be a slowdown in spending relatively soon, I would assume.

Bret Kenwell 27:50
Yeah, so far, we haven’t had any abrupt like any abrupt breakdowns in consumer spending, we have had some retail sales numbers that have kind of brought into question how strong the consumer is. And it’s really is certain parts of the of the consumer class that are being squeezed harder than others. And I think that’s not necessarily a surprise. But it is reality. And for now, the unemployment rate and the labor market, it remains in an okay situation, like you said, you know, early, like you said, I said, hesitant to call it say there’s cracks forming, right. But there’s certainly little areas that I’m paying attention to like this Friday, early April, you know, we’ll get the latest update at the jobs market. So be very curious to see the revisions from the prior month very curious to see average hourly earnings and see if that unemployment rate moves at all, I think it’s worth pointing out that in the Feds last press conference in their last meeting, they also released their economic projections. And in that projection, they did have a little more leniency on the unemployment rate, I think they had an expectation of 4% for the year, or maybe it was 4.1. But either way, it was fairly close to where it now quickly found itself. And they still expect three rate cuts this year. So obviously, all those things can are subject to change. And you know, the Fed is goes data by data and month by month. So we’ll kind of see how their opinion forms over the next few months in that regard. But I think it is worth pointing out that maybe the Fed won’t be so patient, if they see them employment rate, get up to four and maybe a little above it before they start really thinking there might be a risk to letting it kind of get a little more out of control than they want it to be and force their hand to cut rates

Andrew Brill 29:40
In your meetings at eToro, And the you know, I’m sure you guys talk all the time. And I know that Chairman Powell said and I want to get this right he said the timing of the cut is just as important as the cut itself. Do you see the timing yet? Now? I guess we have to wait for the numbers but kind of you know I almost feel like we, you know, we have to go to FanDuel to figure out the percentage of what when the cuts is, but you all take bets and say now it’s gonna be June, it’s gonna be July. And we can all do it that way. But it’s now seems like the June cut is less than 50%. That July cut is a little above 50%. When you guys talk, how many cuts Do you think there will be? And the timing of those cuts? And I know it has to do with the numbers, but you guys crunched numbers? And that’s what you do?

Bret Kenwell 30:28
Yeah, it’s, you know, it’s tricky. Just to be honest with you, it is tricky to kind of figure out when that’s going to be in I hate to kind of err on the side of like, fed speak, but it is data dependent, you know, if we get a hot number, a couple more hot inflation reports and the the, you know, the labor market stays strong, it’s, it’s hard to be, it’s hard to be in a rush to see the Fed cut rates. And it’s, it’s funny, because you’re thinking, okay, one rake, they already raised, they raised rates, you know, how many, two dozen times we’re up to five and a quarter? What differences 25 basis points gonna make, it doesn’t really make up a much of a difference when it comes to the restrictive nature of monetary policy. But I think it sends a different kind of message, right. And so it’s like, there’s a lot of focus on one cut, even though it won’t make a big difference. Like if rates were four, four and three quarters versus five, doesn’t really make a huge difference, right? It’s a few basis points. But look at what happened when we went from there’s basically three main phases of of interest rates, especially in our current cycles, there’s a rate hiking cycle, which we went through, and we saw the repercussions of that we saw it in mortgage rates, auto loans, the stock market got hammered, when interest rates went flying higher. And then we went on this stretch where we had a pause. So we had a pause and hikes. And we just kind of the Fed just maintained interest rates. And you saw what happened to the market, the market really shifted it. It’s how it was behaving when it realized when investors realized there’s no more rate hikes when they realize that the market exploded. And that was, you know, in the early parts of q4. And now, you know, we find ourselves in q1, are we in q1, we found ourselves looking for that first rate cut. And now in beginning q2, we’re still looking for it. But once the market gets the idea that we’re out of the we’re done with the hikes, we’re done with the pause, now run to the cuts, that could just be our next catalyst for for the market. But for everything that interest rates impact, you know, from mortgage rates to auto loans to borrowing in general. So I think that’s kind of the main focus from investors and why one hike might not or one cut might not make a big difference on, you know, a corporate balance sheet, but it makes a big difference in how investors and how C suites are approaching capital markets and how they’re approaching the stock market.

Andrew Brill 32:55
It’s really affected the bond market, I you know, just, you know, the 10 year, Bond just hit a new or a new high for 2024. And, you know, looks like it could go a little bit higher. And that’s the, the mark that everybody looks at for mortgage rates and credit card interest rates. So if when that continues to go up, mortgage rates will do the same credit card interest rates will do the same. So it’ll really affect the consumer. And that’ll affect debt as well.

Bret Kenwell 33:26
Truly, it’s a very important mark to keep an eye on and it just today, I think it touched a six month high or very close to a six month high. And same with the US dollar that’s also at a six month high. So those are two smaller headwinds for the equity markets. Obviously, you know, if you had told me, you know, in December, when the markets had gone on this blistering rally, I think, you know, they came into mid December on a like a nine week win streak. s&p ended up the core end of the quarter up 10%. And investors are pricing in six cuts starting in March, didn’t take very long for those expectations to get cut in half down to three, you know, three cuts for the year. And obviously, March got pushed back really quickly. And if you had told me that I would assume that the market was going to would would pull back and correct it. After all it already done so well in q4, and it was at all time highs, it would have made sense, but it’s just continued to go higher. So I think the 10 year yields are a headwind. I think the rising US dollar are also a headwind. How much it impacts the market. That’s the part I wish I knew. And I don’t know, is it? Do we just kind of pause and chop around? Do we have some kind of meaningful correction in the you know, two or three to 5% range? Something really minor? I don’t know. I think it’d be healthy though. If we did have some type of correction. There’s a lot of people waiting to get in on the on the sidelines that are waiting to put money to work. There’s funds that are ready to put money to work and there’s this sort of sense that like when the when the train leaves the station if you think you can Get at the next stop. It’s one thing it’s when you don’t feel like it’s going to stop moving. That’s where it becomes difficult to get back in and a pullback would just be healthy I think just sort of reset a little bit and give give the market set the market up for a nice second half. And

Andrew Brill 35:14
Finally, Raoul Pal joined speak up with Anthony Scaramucci to explore the cryptocurrency phenomenon amid the volatile waves of Bitcoin Etherium and Solana row will explain why he thinks Bitcoin may be the greatest investment in human history. As we ponder the future of finance shaped by digital assets and AI. Let’s hear rolls vision for bridging traditional investment wisdom with the digital frontier.

Anthony Scaramucci 35:41
Back on with a special encore performance his Raoul Pal and I just told him backstage, I don’t like bringing on the people that are better looking than me, but you are back by popular demand. Quite a demographic, I think the demographic is not the my demographic Raoul is like 75 to 95 your demographics like 22 to 50. So God bless you, God bless you. He is the founder and CEO of global macro investor, GMI.

Raoul Pal 36:13
Because this asset is the best performing asset in all recorded human history. Bitcoin itself has done 20,000,000% Since 2012, it has produced 150% annualized returns since 2012. Ethereum has done which is another cryptocurrency about 170% and Solana 190%, or 200%. So this asset is by far and away the greatest performing asset in all of humanity. And that gets people’s attention. Obviously, when people’s returns have been low, and people can’t get out of the wealth trap. They can’t afford their houses.

Anthony Scaramucci 36:58
But Raoul, Raoul, I’m old. I’m old. I’m an old person, this seems like a new thing. I’m old, I’m old how to handle. You know, you know why, you know, Jamie Dimon tells me that this is a decentralized pet rock or a Ponzi scheme. So So go ahead, you know, like, honestly, like, if you saw a viewer feedback for your presentation, it was off the chart. But when I look granularly, at what we’re doing at Speak up, I have a lot of people that are listening demographically, dude that do not get it. And I’ve written a book about it. I tried to go out on the speaking circuit and evangelize about it. And I still feel like there’s a lip and a cup spread. Yeah, I can get people over the hump, and I want you to help me I want you to, I want you to explain it in a way where a rock hits somebody in the head and they have to go out tomorrow and get off of zero, they have to not be zero exposure to Bitcoin.

Raoul Pal 38:05
Okay, the real reason forget all of the complexity on of what this is, and the technology forget all of that. Think of why most people have bought gold. It’s to protect themselves from the action of central banks, it has proven itself over several 1000 years to be aware of having a store of value. Bitcoin is that for digital age, okay. Most people know that story. They don’t understand the other side of the story is Why does nobody feel as wealthy as they thought they should be? You know, particularly you’re a bit older, you’re like, why are my savings not as much as I thought they would be? Or I can’t afford as much? Right. That’s the big conundrum. And the fact is, is that particularly since 2008, when we broke the world because of debt, we have been using the printing of money to try to paper over the cracks. Because economic growth from an aging population is slower. We don’t have much productivity because people are retiring. And we’ve got too much debt. So people have to service the debt. So the central banks have been doing a bit of magic, which is printing of money. At one point it was called quantitative easing. Now they don’t do that as much anymore because everyone knows that game. Because that’s the money printer, go Burr. So what they do is they inject liquidity into the system, whether through all these weird things you hear about like reverse repo market, stuff like that, basically, it’s to hide the printing of money, put it into the system. When you look at that on a globalized level because everybody’s doing it. You’re debasing level of fiat currency. And what that means is your dollar today buys you less assets tomorrow. Now why do we buy assets? We buy assets to save money for future consumption. So if I were to buy gold today, it’s because I want to release it in future and I want its purchasing power protector for it to go up. Now when you look at what’s happening with with the debasement of currency, they’re debasing currency by about 8%. On year on average, amongst all the global central banks add in about three to 4% global inflation, you have 12% hurdle rate on your assets before you actually make any money. So your savings, you need to be making eight 12%. Now, over the last since 2012, the s&p 500 has made 12% annualized. The NASDAQ has made about 24%, annualized, so tech stocks have helped. But crypto was the one that really offsets this, and allows you to generate a lot of wealth. So if you’re in your 50s, like me, or your 60s, and you’re thinking, I just don’t know, if my retirement savings are enough, then a small allocation to an asset that does 150% A year will compound massively, and will help you in having purchasing power in your retirement. Because nobody wants to be broke. When they’re 85 years old. That’s everybody’s biggest fear.

Okay, so that that is brilliant, and I want to say something to you. That is exactly what people need to hear. And Pompliano said something this week, which I’ll repeat on the show, and I did his analysis. Since 2000, January, the US dollar has lost 22% of its purchasing power. That’s been the impact of inflation. So again, just for viewers and listeners, I may have $1 in 2020. It’s worth 78 cents today. Now, however, if I own assets, maybe they went up with inflation. So the irony is I feel richer. On a nominal basis. This is the sinister plot that’s pursued by the politicians, because if I had $100,000 in 1989, that’s like having $670,000. Today row. Okay, in terms of its purchasing power, but if I have $670,000 It sounds like it’s more money. And I’m richer, right?

Yep, but you’re not.

Anthony Scaramucci 42:26
Well, not so $6.7 million. I’m rich, but it’s the same amount of money as being a millionaire. 3435

Raoul Pal 42:33
But that inflation is not the only that only captures a small part. It’s the actual debasement of currency that makes assets look like they’re going up. So the Venezuelan stock market, if you ever see a chart looks like it goes vertical. It’s like the best performing stock market in the world. Right. Of course, you put it in Venezuelan bolivars, it’s down 90%,

Anthony Scaramucci 42:54

Raoul Pal 42:54
It’s because they’ve been devaluing the Bulevar.

Anthony Scaramucci 42:57
So let’s, look, let’s put the US stock market. You don’t have to give me the exact number but I know you’re a macro guy. So the US stock market in Bitcoin has done what?

Raoul Pal 43:09
Down? 99.97%? Since 2012, point 99 point. Yeah, since 2012, not even since Bitcoin started. Right? So every single asset on Earth versus Bitcoin since 2012 is down. 99.9%.

Anthony Scaramucci 43:36
Okay, so when someone says it’s an inflation as just for viewers and listeners, more context, your dollar is worth 22% Less. Bitcoin has gone up 800 It’s gone up 8x since January of 2020. And so this is the reason why people like Raoul myself are ringing the bell on Bitcoin. Let’s switch to the ETF for a second. When the ETF came out, there were pundants saying all the ETF is priced in remember that someone said Ah, it’s priced in? Was it priced in?

Raoul Pal 44:14
None of us expected $10 billion of demand in six weeks or whatever? Stupid number it was right. Okay. It was it. We kind of thought it might do it in a year, because that’s what gold did the GLD in its first year. But it did it in a record short amount of time and it doesn’t seem to be slowing down. So no, it wasn’t priced in. We didn’t realize how many ordinary people, RAS and investors are starting to realize this issue that you’re talking about is I need something to protect me protect my wealth into the future, and maybe make me money, not just protect my savings, but I want to make some money too. And this does that. As it says you know, if you hold Bitcoin over a few years, you can buy something like five times as much s&p 500 just in a few years. So your purchasing power is going up dramatically every year you own it. And that even takes into account the fact that it goes down every four years a significant amount over the long runs that really matter.

Andrew Brill 45:22
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