Beware The Energy Shock: What It Means For Inflation And Markets

Summary

• Geopolitical Energy Shock: Escalation in the Middle East and Strait of Hormuz disruptions are driving oil and gas price spikes, creating a major inflationary shock with potential long repair timelines for damaged infrastructure.
• Supply Chain & Inflation: Higher diesel, shipping, petrochemical, and fertilizer costs are set to push global manufacturing and food prices higher, raising recession risks.
• Policy Constraints: Hotter PPI and rising energy costs limit the Fed’s ability to cut rates; discussion highlights petrodollar erosion as some crude trades in yuan, signaling increased de-dollarization risk.
• Market Outlook: Warnings of complacency amid signs of liquidity stress with simultaneous declines in stocks, bonds, gold, and silver, pointing to potential deflationary shocks.
• AI Disruption: Rapid adoption of AI is driving significant white-collar layoffs and workforce “right-sizing,” especially in software, customer service, data, and finance roles.
• Portfolio Strategy: Emphasis on active risk management over passive indexing, with clear exit rules, 24 months of emergency funds, and precious metals as long-term insurance.
• Regional & Sector Impacts: Asia faces much higher crude costs than the Atlantic basin; refiners, LNG, petrochemical, and fertilizer supply chains are under severe pressure.
• Overall Perspective: Expect elevated volatility with paths to stagflation or prolonged deflation, underscoring the need for resilience and adaptive planning.

Transcript

Nothing in this program should be considered investment advice. It is for educational purposes only. Please hit pause and read this disclaimer in full. You know, if you have exit points and a riskmanage strategy inside your portfolio, maybe you're wrong, okay? You missed some opportunity in the short run. But where we are right now, you're better off to have a fence at the top of a cliff than you are an ambulance waiting for you at the bottom. Hello everyone and welcome to this episode of FinanceU. I'm your host Chris Martinson back with Paul Ker of Kiker Wealth Management. How you doing Paul? >> I'm doing good Chris. We've we've had a nice little cold snap that come through after we teased about warm weather. So I'm looking forward to spring. >> Well today we're going to talk about two big things. Um we have to talk about the AI in impact on jobs. Nobody knows how this is going to pencil out. We got to talk about that. But first, we're going to have to talk about this inflationary impact that's coming because of the Iran war, which editorially was a war of choice. Um, and now we're going to have to live with that. So, I think that could have just enormous implications for all things related to investing. So, I really wanted to talk about this is because we we talked about this last time, Paul. It's really investing in an age of and I'm being kind here, uncertainty. >> Oh, you're being very kind. Yes, >> we could use some stronger terms in there, right? >> Like maximum uncertainty, unprecedented uncertainty, >> something like that. >> Yeah. So, I mean, of course, it begins with a with an attack on February 28th. That night, starts March 1st. So, we can date this uh we're recording here on the 18th. We're now 18 days into this war. It was supposed to be over in a matter of hours, according to what Trump was thinking. It hasn't been over in a matter of hours. In fact, we'll go through some data. Looks like it's escalating. And I think everybody has to be prepared for that both personally but also obviously financially and from a portfolio standpoint. >> This is what it looks like. This is oil from starting last year, Paul. And as you can see, it was just trending down, trending down, trending down. Had a little spike back here last June, July. Um, trending down, trending down. Weirdly, it started to climb as if somebody knew something here back and we talked about how Exxon also was mysteriously climbing during that period of time. And then here's obviously the war starts here. Oil jumped and spiked all the way up to 120 a barrel. And this is Brent. So this is uh this is Atlantic basin oil. And so it jumped all the way up to 120 and then came all the way ripping back down to 80. But you can see it's been climbing. And at the time I took the snapshot, it was it well closing in on $109 a barrel. Um, obviously everything keys off of oil cuz if you have to pay more for oil, you're paying more for diesel. If you're paying more for diesel, you're paying more for shipping. If you're paying more for uh precursor refinery outputs that go into polyethylene, which makes all things plastic. This is now uh an inflationary shock that's in the system. And you and I, Paul, had talked months ago about how does this come true? This idea here, we're looking at a chart now for anybody who's just listening, comparing the period from 1966 to 1983 to 2014 going out maybe to 2031. And there's this eerie similarity where we see this huge hump of inflation here in the early '7s. Now, that was related to the oil embargo. The Arab that was a geopolitical thing. They they they were unhappy with us and so they they cut off oil but not all at once, Paul. So what they did was in October of 1973 they got together and said that's it. We're not selling to the United States or Norway. Don't know why Norway. I have to review my history. But they were selling to everybody else. But here was the key. They they agreed as a set of nations to cut their oil output by 5% per month. So that by the end of this thing in March of 74, 9% of total global oil output had been taken off the market for five months. Now, Paul, that spiked it from $3.70 a barrel to $33 a barrel, almost a t-fold explosion. That would be like oil going from 60 to 600 a barrel. >> That's huge. That's huge. >> Yeah. So, so that led to this first hump. But then, oh, you remember Paul Vulkar had to jam interest rates up to 21%. Can you imagine? My first mortgage was 14.5% in 1988 because I was at the back end of this thing right here. So, anyway, but then this was all due to uh this second hump was due to fiscal responses. Uh I believe we had um it was just all the war spending that had happened around Vietnam. It was a variety of reasons, but it was mostly oil shock, then over response with a monetary stimulus. This time we had our money printing first. That's through CO and now we're getting our oil shock. So, it's not a perfect repeat of history, but boy, Paul, this thing sure seems like it's rhyming. >> It sure has. And, you know, producer prices index came out hotter than expected, which means it was more inflationary than expected. But if you look at the input cost, you've you've got a serious cost push inflation taking place right now and oil's just oil price is just going to exacerbate that. >> Well, on that on that front, um this just, you know, a headline uh here on Wednesday on Yahoo Finance, like you say, US producer prices rose more than twice as fast as expected in February before the effects of the Iran war. Before >> that was Yeah, that was before. So, so what does the Fed everybody's been counting on? Will it be one rate cut, two rate cuts, 50 basis points, surprise rate cuts? Are they going to start deficits, you know, stimulus spending so that because let me be clear, the US government is going to I don't I I'm going to guess we're already $300 billion deep into this war. I know they said it's a billion a day, Paul, but it's way more expensive than they're saying if if we're going to rebuild those bases, >> right? Right. Oh, yeah. And they're not going to tell us the truth about how much they're spending. Unfortunately, I hate to be that cynical, but it's the reality of what's taking place. >> The Fed though, they want to they want to print. How do you how do you cut rates and print in this environment where you already, you know, you've got inflation running hotter than you meant it to and this is before we see the impact of all of this oil explosion costs coming in coming in hot and heavy, >> right? It's just going to further exacerbate the the coals of the inflationary environment were there and that's going to be I mean this is going to be putting some gasoline mixed with diesel on there but if they were to cut into this that's going to be pure gasoline thrown on that fire you know and and at least as of so today's Wednesday and the Fed's supposed to talk this afternoon as of yesterday afternoon there was only a 2 and a half% expectation in the market that the Fed would cut today so I would be highly surprised if they do cut into this environment I do believe that That would be a foolish environment. But yet Trump >> is calling for them to cut and cut rates down. >> Well, as if that would really help um anybody but Trump in his poll numbers or so. That's how he sees it. This is a really complicated environment. This level of shock that we're about to enter here, it's already happening. So the first order effect, Paul, is oil doesn't flow and petroleum products, refined products don't flow out of the straight of Hermuz. And then gas prices go up. Oil prices go up. Second order effect is because those prices are so high, you start to see marginal trucking routes get eliminated, marginal flights that were sort of scraping by, can't make it on a new higher jet fuel price. You get those second order effects and then we have these other impacts where we're already seeing companies that use those petroleum inputs to make polyethylene to make all kinds of things. They've declared force majour trimmed refinery outputs all across the Asian rim. There's a huge shock to manufacturing coming that we haven't seen anything like this because remember I mentioned 9% of world output got cut over about 5 months. We lost 20% of world output in two days. >> That's the shock. Yeah. >> Well, and in addition to that, Chris, you know, the fertilizer input, you know, one thing is, you know, the argument is, hey, if this thing's over in the next, say, six weeks, then oil can get back to flowing quickly. So let's assume that that that that's the case. Right now we're going into planting season. So if you can't get that fertilizer and the fertilizer cost goes up, you're also getting food price inflation that's going to come on the other side of it. And especially if we don't get the yields because our commercial farms are so reliant upon the fertilizer cost that comes in. So if they can't get it because it's not coming out of the Middle East, then you're not going to get the yields. more than likely not going to get the yields, which later this year means food prices are going to go much higher than where they are right now as well. >> Indeed, they will. And and the the relationship between fertilizer prices and food prices lagged by a little bit is an almost perfect set of two lines on a chart, Paul. It's just it makes sense intuitively, but what you're talking about sometimes I think there's this misconception because we live in a market-based environment. Well, it just costs more. No, no, no, no. Remember you have your supply demand price chart, right? So supply and demand are balanced by price. So when we say the cost of Yuri or fertilizer has doubled, that's because it's pinching off demand. Like that's that's means that's fertilizer not going on the fields, which means lower yields. It it's not just that it costs more, but we have all we want. That's not how it works, right? And if the government responds with with fiscal more fiscal foolishness and just print print, then you've got more money chasing a lower harvest which is just going to further exacerbate food prices and the inflationary pressures that are that are already worrying on people substantially. I mean, we're seeing default rates go up across the board. You got credit, you know, you got private credit's a whole discussion on its own right now, but or private equity, especially in the credit environment. It's not a good setup. >> No. No. And a lot of those producer prices that we talked about here, um, well, some of those are domestically sourced, those are going to be higher because our oil prices are up 38% in the past month. But, um, but for all the things that we import as part of the manufacturing process, most of that comes, of course, from the Asian rim, China being the strongest component of that story. If we look at worldwide oil prices right now, this is a snapshot from just today, which is the 18th of March. You can see way down here is WTI, which is West Texas Intermediate. It's just barely under $100 a barrel. Here you can see that uh Brent, which is uh another Atlantic basin. I I'll I'll spell that out what that means in a minute. Um just sitting under just under 110. But if you want to land a tanker of oil, Paul anywhere, Thailand, China, Japan, anywhere in that side of things, you're going to be paying anywhere from an OPEC basket of $133 a barrel and the Dubai Select is going to cost you closer to $150 a barrel. These are real prices. These are going to feed into those manufacturers overseas and all those raw intermediate and even finished components to make them to ship them. All of that's now going to go up and and just to explain what was happening here the WTI and Brent it trades here in the Atlantic Ocean side of things. So Brent is actually a UK uh grade and WTI comes out of West Texas Intermediate. It's a US grade. But all of this stuff that came out of the straight of Hermuz right here, this went out to India, Malaysia, China, Japan, it went this way. So these are the people who are paying 130, 150, even 170 for some barrels. Now, Australia's wrapped up in this, unfortunately for them. But Paul, it only takes about 30 days for people to figure out how to buy stuff here and take it all the way around the horn if you have to and get it over here. So, so these these prices will be closing over time. As long as the straight of moose stays closed, this is easy. Our prices close with those prices, not vice versa. >> And with it escalating as it has, what just today, just in the past 24 hours now, what was it? Israel hit upstream production, which is your your upstream pipelines, and then Iran states, okay, you know, we're going to respond and hit all of the upstream production across the board. So all of that destruction, I don't know how long it would take if this if this escalates and they actually do it, but that's going to take quite some time to bring that back on and build those facilities back even if it stops. So this is something that is built into the pipeline at this point. >> Yeah. Even even if nothing happened to the infrastructure, just the basis of shutting down an oil field suddenly, usually it you don't ever quite get it back to what it was because it creates damage in the reservoir down there. They're very carefully managed by teams of petroleum engineers, very carefully monitoring pressures and water flows and this and that. And if you just suddenly turn that off, things don't it sort of gets a shock and rule of thumb is it never quite comes back. Um, and sometimes it's pretty dramatic decline. But we won't know until they went through that process. But otherwise, you know, if it hostilities ended right now and nothing had been damaged, it would still take 1 to 3 months to get back to full flow. And that's just for oil, natural gas, one to two months probably to get that back up and running again because it takes time for the LG to turn on. The aluminum plants that just got shut down, they did a what's called a cold shutdown. Paul, 12 months, I've heard 6 to 12 months to get those lines back up and running. >> 12 months. Wow. In a world of just in time inventory, that's far worse than the shutdown that we saw during CO. >> Far worse. Far worse. But this is what you were talking about. Wake up this morning and find out that Israel strikes at fire to phase 14 processing facilities, what's called south pars. This is a big oil and gas field that sits in the Gulf of Persian Gulf in between um Dubai and uh and Iran. So they kind of share the field. The north field is owned by these folks and the south field's owned by these folks. At any rate, um they have a big processing facility that manages this stuff and that's what got hit. It's the Asulia oil facility and that thing handles 700 to say 780,000 barrels per day of what's called gas condensate. It's not oil, but the gas field's a little wet and means that you got propane, butane, ethane, stuff like that. So, so I don't know how damaged it is. I don't know what's up, but this Paul feeds largely into all the cooking um fuels that they use all across Asia. Then the gas goes off in a pipeline and goes through Turkey. And if that's now gone, Turkeyy's now going to be in the mix hunting for LNG. There's not enough in the world right now. >> My goodness. And the market is just completely complacent to all of the knock-on effects of what's taking place right now. >> So far, it has been. And then to complete the story, so guess what? Um Abu Dhabi's Sha gas plant has been halted after a drone strike presumably from Iran. Uh disrupting one of the world's largest ultra sour that means got a lot of sulfur gas facilities um and raising concerns over energy and fertilizer supply chains. Wow. Um operations have been suspended. So now we're at you're right it's escalating. We're at that stage where tit for tat both sides are starting to hit things that are now I don't know how long it's going to take to repair this stuff. You know, you'd have to have an actual damage assessment. You'd have to know if a component got damaged that's easily replaced or a little bit trickier. Has to be hand manufactured. Some of these components are highly specialized. Don't know, but doesn't feel under control. >> Well, and that's assuming that everybody agrees to go back in there and and peacefully rebuild these factories. So, if it's a situation where Iran still has the capability to hit, let's say it acts like it's over, but you've got, you know, these small groups that are able to interrupt the the construction of that, I mean, it's it's highly unlikely we're going to get the best possible outcome. >> Um, that that that everybody seems to be hoping for and expecting at this point. >> Yeah, Paul, we're going to discuss that when we come back. It's really important topic. Markets are facing heightened uncertainty and thoughtful portfolio management has never been more important. If your current strategy relies solely on passive investing or diversification without active oversight, it may be time to consider a different approach. At Peak Financial Investing, we connect you with experienced wealth managers who actively manage portfolios using disciplined, research-driven strategies designed to adapt to evolving market conditions. Our focus is on helping clients navigate volatility with clarity and confidence. While no investment strategy can guarantee results or eliminate risk, we believe that preparation and active management can make a meaningful difference over time. Visit peakfinaniallinvesting.com to schedule a complimentary consultation and explore whether our approach aligns with your goals. I'm Dr. Chris Martinson and I am proud to support Peak Financial Investing. This is not a guarantee of future performance, but a call to take your financial planning seriously. Again, that's peak financial.com. Investing, of course, involves risk, including the potential loss of principle. Past performance is not indicative of future results. Please consult with a qualified adviser before making investment decisions. All right, welcome back everybody. We were just discussing how long it might take to begin rebuilding and and Paul, I've been reading obsessively about this for well since it started. Uh it's my job and and what so can we rewind? This all started when there were negotiations around Iran's nuclear stuff, other things, bunch of issues. So, negotiations were ongoing. And during those negotiations, which apparently were going reasonably well, Israel and the United States conducted a joint strike and killed the Ayatollah Kmeni, who is the religious leader, not just of Iran, but basically of the entire Shia sect for 500 million people worldwide, plus a whole bunch of Iranian leadership. So I've heard ever since then almost every day Trump say oh Iran wants to come to the negotiating table and almost every day Iran comes out and says no why would we negotiate with you've already proven that's a losing strategy so just to even get the conversation started is going to take a long time because they don't trust us and I was reading something from Iran they said if we agree to a ceasefire you'll just use it to rearm your ships back in order and attack us harder so we're not agreeing to anything at this point in time Right. We're at that level of the story right now. But yet I see in our press um good friend of mine was just talking with some some um I won't name it, but a bank was trying to get him interested in some investments and and their their absolute conviction was oh this war is short. It'll be over soon. >> Really? >> I would love to know what they were asking him to buy. But that's conversation off camera. So but it doesn't surprise me. I mean that that's Wall Street seems to be fully convinced with their sales force, >> you know, the modern portfolio theory, buy and hold and and and look, Chris, the argument is and and the market in general is this is smarter than us all. And what the market seems to be doing right now is inflicting max pain. You got a lot of people that are positioned short. They bought these options on them. They're losing their premiums because the market's been going sideways. You've got the other side that's just like, "Hey, market's got this priced in completely. There's not going to be any issues. You know, bye bye bye by bye bye so we can get fees off of your funds right now." I mean that that's I hate to be that cynical, but that's they don't know any other playbook. There's so many different dimensions to this. We might talk about how Japan is on that on that rim, right? Where the all the expensive stuff is. Now they're going to have to compete. And by the way, Japan imports 100% of its fossil fuels, hydrocarbons, right? 100%. They have none. So if they need any natural gas, if they need any oil, which they do for all sorts of manufacturing processes, as well as, you know, electricity generation, heating, cooling, stuff like that for gas. Well, now they're in competition with everybody else in the world. So they're going to pay more. And you and I have talked about how the yen was already weak because they were printing too many of them. And they already had some interest rate shocks going on. And they had just about gotten all that tamped down. And now they're going to be seeing their budget blow out for uh having to buy the energy they need. So what they do? They started to release their strategic petroleum reserve. So So it's kind of like, you know, you have your rainy day fund. Well, they're hitting their rainy day fund and they're just hoping that the rain doesn't last more than a couple weeks because then they'll be out of rainy day fund. And look, Iran strategically was was smart because if if all they have to do is outlast the the strategic petroleum reserve draw down, we're at the weakest point within the US that we've been in what 20 years with our strategic petroleum reserves. >> I mean, this is a question of of if they can last that long. And if they can, as they've stated, we want to deliver enough pain that nobody wants to attack us again on the other side of this. If they can pull that off, they're going to deliver enough pain where the world population is not going to allow their governments to attack them again. >> Yeah. Well, you and I talked about um this has political repercussions back home right here in the US. And um I don't know if you heard this, but um Hassid is is uh work, you know, Trump administration. Listen listen to this. I can't believe he actually said this. US economy is fundamentally sound and that that if it were to be extended this it wouldn't really disrupt the US economy very much at all. It would hurt consumers and we'd have to think about you know if if that continued what we would have to do about that. But that's like really the last of our concerns right now because >> this could hurt consumers but really that's the last of our concerns right now >> and we'll have to think about how we'll deal with that. But again, it's the last of our concerns. That's Look, I'm sorry, but there is no prudence in that statement whatsoever. If you want to prepare your populace for for you're better off to prepare your populace for worst case scenarios so people can utilize this environment right now to build their reserves, you know, get their emergency funds in place. That that's that's just a foolish statement from my perspective. That's false. That's confidence in a narrative that they they think they can control. Maybe they can, but it doesn't appear that they can control it at this point because it continues to escalate. >> Well, it does. And and you mentioned an important word here, which is, you know, Iran clearly had a strategy. And I think even Trump grudgingly said, "Hey, these seem to be really smart people, you know, like they know what they're doing." Obviously, they Iranians are not Taliban, right? Totally different people, right? Persians uh invented algebra. um longunning kind of a culture and and so obviously and they have a lot of uh very highly technically trained people but their strategy to blind the United States hit hard overwhelm systems and then now what they're doing is they can't win a a land war with us so they're just going to ruin our economy if they can right which is you know I don't know if you saw but Trump the other day said well that's unfair you know Iran really has no right to be doing what it's doing and so the level of delusion I'm seeing in our political class to to not understand that they just stepped in a bear trap, not on a mouse trap. That this is I'm not sure they've quite circled around to the idea that we may have to negotiate, >> right? >> We won't get everything we want, >> right? And the problem is is if you're operating off of complete pride and arrogance, the last thing you want to do is negotiate. And if you're more concerned about controlling the narrative, the last thing you want to do is negotiate. >> Yeah. I want to talk about just how strategic they've been. So obviously the United States has been in the Middle East for a long time. Um we've ever since Carter even remember Jimmy Carter with his cardigan and he builds home Habitat for Humanity and very kind gentle guy peanut farmer from Georgia. Um even he was like whoa Carter doctrine is we're going to put military bases all over this because this is oil and this is really important and part of that importance was that Henry Kissinger kind of evil genius linked the dollar to oil and it became known as the petrod dollar really important and what that meant was for everybody listening here who doesn't know what a petro dollar is it meant that if any country in the world was will free to buy as much or sell as much oil as they wanted as long as they used dollars for that transaction. Along the way, Paul, a couple of people said, "I'm not doing that." Saddam Hussein famously said that before. oops, he got charged with having WMDs that didn't exist. Uh, Gaddafi said that. Oops. Um, he ended at a very grizzly end. So, it turns out that over time, Paul, the United States has been particularly cheerless about anybody who's tried to put a dent in the so-called petro dollar. You know, I'm being kind there. Well, if you remember Gaddafi, he he established an oil bars uh uh so that uh you know to trade euros and the first thing that the third ID did when they went into Baghdad was they took down the oil bars you know I mean we have militarily kept that from happening can >> that was Saddam right? Yeah. He said it was even a basket of currencies on >> Yeah. It was a basket of currencies, right? >> Mhm. >> Which the dollar might have been part of that, but he was just trying to get a little bit away >> from that. And oops. No bueno. So, imagine my surprise. As I wake up this morning and I read this that China pulse reporting that another Indian oil laden vessel has crossed the straight of Hermuz after paying for the oil in Chinese yuan to the producing country and the IRGC that's the Iranian revolutionary guard allowed it safe passage. Whoa. This is this is an absolute sharp stick at the petrod dollar concept. Hey, as long as you pay in Chinese yuan, safe passage. Uh, we're not going to be able to I I don't understand how we would allow this to stand because it would be too big of a shock to our sense of importance, worth, and prosperity to allow the petro dollar to suddenly be unwound by some pesky little nation. Um, but it's a big deal. >> That's a big deal. I mean, I've actually started a a bookmark series just currency and threats to our currency because that is a that's a major threat from a long-term standpoint. And the knock-on effects are these countries, if they're starting to do business in one, you don't have to recycle all those extra back into treasuries anymore. You're going to be building one so that you can get, you know, oil delivered to you that's coming through untouched. >> That's a huge deal. >> So, that's two two tankers. They said that uh five days ago the Iranians said, "Oh yeah, you can if if you just buy it in in Chinese wine, we'll let it go." I thought they were just trolling us. I thought that was just like that'll never happen. But now it's happened. So they were actually serious about it, >> right? So >> and the worse the price gets, what are you going to do if you're other countries? You're going to buy for it in one and then you're going to let it go through untouched as long as the US allows that to happen. So speaking of the escalation, just to sort of round out this story, just to show how crazy this is, but Dubai airport was bombed again in Dubai. You know, the real estate Paul's fallen by 33% in just like, you know, less than 3 weeks. Um Iran has fired over 2,000 missiles and drones at the United Arab Emirates. Um 2,000 projectiles at what was supposed to be the world's safest city. And then we had a March 16th, an Iranian drone attack hits fuel tanks at Dubai International Airport. Fire breaks out of course. All flights suspended immediately. Dubai then closes its entire airspace on March 17th. That's another drone incident happens. Two Emirati soldiers dead in helicopter crash. D. This is the largest airport in the world by passenger traffic. This is it. And is now completely shut down. And this kind of news, Paul, is not really making it onto like I I I was talking with somebody the other day who principally gets their news from Fox and they were completely unaware of any of this. We're winning. >> Mhm. >> We've struck thousands of things. They're about to fold. That's their story. And I'm over here going, >> "Not so much." It's amazing the comp level of complacency of the individuals that are getting their news from Fox News or CNN and they're they're too lazy to actually go search in other areas or they just don't know. They're completely oblivious to what's taking place. >> Yeah. >> And Just Dio put something out. I got I was wondering when a good time to share this is maybe maybe we share this twice but >> um this is a good summary as to what the average person is doing. And so just Ario reposted or commented on Josh Young says, "Spot on. This is exactly what's unfolding. Powerful earthquake in the middle of the ocean struck two weeks ago and the tsunami is now racing towards the shores while people are still sunbathing on the beach because the alarms haven't been sounded to keep everyone calm. This is this is great. I mean, it's not great. The outcome is not great, but this is a good picture of what the average citizen's doing in the United States because they're trusting the news completely. they're not critically thinking and the oil shortage from the straight of Hormuse's closure is just because it hasn't hit them immediately doesn't mean that it's not on its way and that's just a good picture of the complacency of the average individual right now and our leaders. Yeah, the pig is in the python. It's it's like even if everything magically resolved next minute, all that inflationary impact is is already there. But again, Paul, it's not it's not always the destination. Although taking 20% of the world's oil away, that's a bad destination. But it's the pace at which that happened. It's a shock. This is an oil shock. So we don't we're going to have to just sit back and observe what's going to happen next because nobody can predict. Within boundaries though, you can say that the economy is going to have to shrink. I don't know exactly where, when, and how, what the details are, but it's going to shrink because energy is the lifeblood of that economy. So if you have less energy, you have less economy. And I don't have the chart with me, but it's one of the best tightest charts I have in economics, which is oil consumption, GDP, e, you know, y-axis, x-axis, and it's a line. It's like pretty much a straight line says, oh, you you're going to have more economy. You're going to burn more oil. But it makes sense, right? Because what do we what do we mean when we say an economy? Oh, that's me buying um a piece of electronics. How did it get there to the store? Well, somebody put it on a truck. And how did it get to the truck? Well, somebody had put it on a ship. How did it get on the ship? Well, somebody, you know, you chase it back and there's energy, energy, energy, energy at every step of every physical economic transaction. So, it's coming with a market that's priced for perfection. The most expensive market by the combination of of of valuation measures in history, worse than we were in the year 2000, and this complacencies on top of it, and and it's just going to continue to ripple through the economy. I mean, it's it's and and look, here's the thing. You can be passive, which is fine, but you got to understand the weaknesses of a passive approach. So, if you're going to be passive, the weakness of that is you're going to do nothing or your advisor is going to do nothing. Even if you know what's going to unfold from summer of 2008 with that 57% decline top to bottom that occurred during that period, markets weren't even as expensive then as they are now. So that was a credit issue. That was oil prices spiked into that summer. You know, you had that economic recession. My argument is you need to have some parameters and decision points in your portfolio so that you can make consistent decisions. And I can't remember who to attribute this to, but it's a great quote. You know, if you have exit points and a riskmanage strategy inside your portfolio, maybe you're wrong. Okay? You miss some opportunity in the short run. But where we are right now, you're better off to have a fence at the top of a mountain or top of a cliff than you are an ambulance waiting for you at the bottom. >> Uh but just so everybody just we're all clear, passive is like when you just uh automatically roll into your 401k on a monthly basis like 3% of your salary every month goes over goes in usually just goes into a series of long only like you're in you're in one of the indexes usually in an ETF, right? It's automatic and it's passive meaning no matter what happens in the world that just keeps happening and you're not taking anything off the table. You're not managing anything. You're not you're passive is and I get it. A lot of people throwing their hands up and say market timing very hard to do. Just better if you sort of like >> play along. As you keep mentioning though, that makes sense if you're in your 20s or 30s. But when you get out into your 50s, 60s,7s, that long-term buy and hold thing really begins to break down, doesn't it? >> It really does. So there's two different phases. And and look, the argument is they can go back and say, look, there's no 25-y year period of time in the history of the markets where you've not had positive returns. You know, it was 24 years, 25th year during the Great Depression, you got positive returns. Now, it depends on phase of life. If I'm 30 and I don't lose my job and I'm saving 10 to 15% into my 401k, look, passive is fine. It's going to hurt your feelings if the market goes down 50%, but as long as you're still contributing, if the market goes down 50% and sideways for 15 years, that's the single best thing that could ever happen to you. Because by the time the the damage is worked out of the economy and you grow again, you've accumulated a huge base of dollars. So that's what they call dollar cost averaging over time. The lower the market goes, the more shares you buy. Now, I do believe that there's value, especially in times like this where you can protect that capital. And then you don't have to be too picky if you have a big market decline, redeploy it, but keep contributing. So, anybody who's working, I recommend, hey, be aggressive with your future contributions. A lower market's going to benefit you from a long-term standpoint. The other side of that coin is, and a lot of people just don't understand this transition, when you're working, the environment that helps you, those lower environments, accumulate those dollars is the environment that destroys your retirement. So, if you're in that distribution phase in a market like this, let's say you got a million dollars, you're taking $50,000 a year of income off of it. Is being passive the right thing? Because if the market goes back to normal valuations, just normal, it's a 50% decline from here. Well, if you're passive in that situation, you're drawing 5% off of a million-doll account and it goes down to 500,000. That's not counting the the distributions you were taking off of it in the interim period. Now, your distribution's 10% of that portfolio. So, you better hope that the market makes 10% a year going forward. Otherwise, you're going to run out of money very, very quickly. And look, if you're drawing 10% off of the portfolio, typically you're going to use that up even in a normal environment over a 7 to 8year period of time. So that's the risk. So you've got these baby boomers that that are the largest amount of wealth. They're in retirement right now. They come to believe when they had the largest amount of wealth because this is the propaganda from Vanguard, the propaganda from Fidelity, your index, passive index um purveyors. They're looking in the rearview mirror and going, "Hey, anytime that I tried to manage risk because they didn't have a strategy, they let their emotions get ahead. Was a mistake. So, I'm just going to be passive. I'm going to ignore this and I'm just going to let it go." Well, the problem is they're they're either in the distribution phase or starting that distribution phase. So, you have a major market decline in this environment and they're passive there. It's going to absolutely upend their retirement. Absolutely upend their retirement. And what's the ripple effect? You know, the baby boomers are a huge driver of the capital that's being spent right now because they've accumulated a lot of the wealth. I mean, that this is a very dangerous environment for those that don't have a fence at the top of the cliff because they're going to meet an ambulance at the bottom uh if valuations go back to normal. And this is the type of environment where all of the arrogance, the excesses, the Fed's in a in a pickle right now, right? I mean, if the government just doubles the fiscal uh irresponsibility, that's going to exacerbate inflation. You've got all of these input costs with oil. If this drags on, if if Iran's successfully able to carry this out into the midterm elections like they've stated they have, this is going to be a major impact to the markets. Now, exactly how, I don't know. You know, we've got tools to help us navigate through that, but but that's something that you can see coming. the longer this lasts, the greater the damage is going to be. And and if it's so impactful, because if we go back to the 1970s, when you had that oil shock in the 1970s, the market went from overvalued to undervalued. If we were to go to undervalued at this point, and I've shown the chart many times, and I can show it, but I can talk you through it. If we were to go to undervalued, that's a 70% decline in the S&P 500 at this point, right? just because and it's just math and it's just math. It's just how how investors make decisions uh uh as the excuse me as the environment changes. So, can the Fed print without exacerbating inflation? They can't right now. >> Well, and it's not just that. So, it's that it's not just that. Oh, let me let me pull this chart back up again. So, um two different scales on this uh chart of the double hump inflation. So this is left-hand scale which is the current environment. You see here the this one went up to the first hump in the 1970s went up to almost 12% and then in its second hump 14% inflation. Um our first hump went up to about 8%. And so I guess the implication would be we'd go up to 9% or so. Uh, and it lasts years, by the way. And that's if and only if you have a Paul Vulker who has the stones, if I can put it that way, to lay 21% inflation, you know, I'm sorry, 21% interest rates on the nation. Obviously, Trump doesn't even like 4% interest rates. He's already talking about removing Fed chairs for having 4% rates of of interest. So, politically, this gets harder. The excesses are larger. We have more debt in the system now than we did back then on all sorts of dimensions, right? Aggregate amount as a percent of GDP, etc. So, I think that the maneuvering room's less, but I'm going to add one more thing. If you're China, if you're Thailand, if you're Vietnam, if you're even Japan, and you hear the United States shrug and go, "Well, yeah, it could get a little painful for some people, but we got plenty of oil and gas." I I don't why I could imagine there being pressure on those countries to no long to cut off ties with the US to stop trading with us, but at a minimum to stop accepting our treasuries, right? Why would you want to own why would you want to enable and support the country that just threw you under the wheels of a bus? I'm reading lots about that. Not in the US. I have to go to to foreign newspapers, but they're starting to ask the question like, "Hey, the United States created this huge mess and now they're just what? walk away from it and leave us to pick it up. Like, it's it's not it's not really going over all that well. >> And it's not the integrity that that that was the foundation of what put us in the position that we're in. Okay, look, I know I know if you look back through history, there's not as much integrity as we thought. But a handshake was a handshake and your word mattered, right? I mean, no matter what conflicts we had prior to the weaponization of our swift banking system, which is the interchange between countries around the world, you know, there you at least knew we're not going to mess with the plumbing of the of the banking system within the economy, no matter how much we disagree with each other. But now there's no boundary that our government seems to be unwilling to cross for political power, for short-term political gain to keep our markets up at the expense of the rest of the world. And the rest of the world is not going to continue to tolerate that forever. I mean, look, those of us that had the ability to stand up to bullies and fight without ruining your life when you were younger, you know, I mean, I had a senior come after me when I was a freshman in high school. And I remember looking at the guy and going, "Hey, you're probably going to beat my rear end. Hey guys, you know, pull him off of me if he starts beating my rear end." And the first thing I did was t him in his weakest point. You know, that that's what you have to do to somebody that's much larger than you. And it seems that Iran is going after our weakest point right now, which is our economy. And they know oil is going to matter because that inflation comes back and it completely upends the justification for higher valuations of where we are right now. And into that inflation, it also limits the ability for the government to be able to print without further exacerbating that inflation and then potentially causing a currency crisis. on top of the fact that now there's an alternative to trade oil in. You know, that's a big deal uh uh to pay for one and you go right through untouched, right? >> I mean, look, >> if I'm a business or if I'm a country, I'm scrambling for wine right now to try to to get oil for my citizenry because you you do what you need to do. Um to close out this section before we move on to uh as if we needed one more big thing to talk about we we will talk about the impact of AI on jobs and and it's an important message for a lot of folks. But before we go there I just want to point out there's this tweet came out this morning from Ross Hendricks who I like to follow over on Twitter and he wrote quote the Israeli Air Force with the approval from the US just bombed Iran's South Pars field the country's largest gas resource responsible for 75% of its natural gas production. In response, Iranian media outlets published a list of retaliatory targets that includes some of the largest prochemical refinery plants in Qatar, Saudi Arabia, and the UAE. This marks a major escalation in the hostilities as both sides in the conflict had previously limited direct strikes on energy infrastructure. Why this matters? Previously, the global energy shortage was always, at least in theory, one ceasefire agreement away from a solution, as you were mentioning earlier. But now with physical infrastructure in the crosshairs, we run the risk of a prolonged shortage that could take months to resolve even after reaching a political solution to the crisis. Um, and that will all but guarantee a global recession. Paul, if this goes on long enough, it gets worse than a recession. >> And that's one of the reasons why, look, I'll take this opportunity now, and I know you're getting ready to get into it and give more evidence uh for the reason to to be cautious. Look, do not be complacent with your emergency funds, okay? Harvest some profits on the portfolio. Yes, you may have some capital gains taxes. That's just a part of something that we have to deal with. I see so many people that make bad decisions from a long-term standpoint because they don't want to pay a little bit of tax in the interim period. Put yourself in a resilient situation. What is it like 70% I haven't looked at the numbers, but I did talk about it at your summit back in September. Somewhere between 70 to 80% of the population does not have enough emergency funds or reserves to be able to last three months. Okay, three months, much less make it 12 months or 24 months. So, put yourself in a situation to where you're resilient and you have options because otherwise, if you don't, what are you going to do? Go get a line of credit against your home and go further into debt to try to keep from losing that if you can get it? Because typically when we have these recessions, credit disappears. They'll give it to you if you don't need it. But they're not going to give it to you if you need it unless you put up all your assets and this lasts long enough. So, put yourself in a resilient position. Harvest some profits. If you're not running a riskmanage strategy, have 24 months worth of uh of your cost of living. You're naturally going to cut back to your base, but 24 months worth of your monthly expenses sitting in the safest thing that you can. Don't assume that that that the banks will be bailed out. Make sure you're under FDIC limits. Just be prudent right now. And and and and that's a wise thing. The prudent will stand when the fools will get wiped out. And we have enough information right now that if you're not preparing yourself for a potential worst case scenario outcome, I'm not saying you have to go liquidate everything at this moment and you know, you got to have a strategy. Don't let your emotions take over. But what you can do is build some resilience. 24 months worth of savings. I know I'm beating that to death. Stock up on some extra food. Food is savings, especially if you have three months in there. If the cost of food doubles, guess what? That's money you don't have to spend in the future. That's built-in savings. Rotate those shelves and make that a part of your lifestyle because we're in an environment where the risks just continue to get larger and the known outcome is even harder to see. Indeed. And um Paul, we're going to take one more break. When we come back, everybody, we got to talk about uh this AI job destruction, which we've been talking about in the future tense. It's arrived. It's a second tsunami that that's hitting the shores. We'll talk about that just as soon as we come back. Today's markets are more volatile than ever with ongoing economic and geopolitical uncertainty. Navigating such environments requires thoughtful, adaptive strategies, not a one-sizefits-all approach. At Peak Financial Investing, our registered investment advisory firm connects clients with experienced wealth managers who focus on active portfolio management. These professionals use evidence-based strategies designed to respond to changing conditions, not outdated formulas, but customized approaches grounded in research, discipline, and risk awareness. We believe in open, informed conversations, including discussing tools like precious metals and diversification as part of a broader financial strategy. Every investor's situation is unique, and our adviserss tailor their guidance accordingly. Visit peakfinaniallinvesting.com today to schedule your free consultation and explore how proactive management can support your financial goals. I'm Dr. Chris Martinson, proud to work with Peak Financial Investing and my support reflects my professional views. I encourage you to take control of your financial future by making informed decisions. All right, welcome back everybody. Paul, I want to turn our attention now to this. Um, you know, I've been I've been on AI for a bit. In fact, uh, back at Peak Prosperity, this was the second Renaissance report that I do, and it was all about rethinking jobs and money in the AI future. Kind of a soft title, but if I was going to like clickbait that up a little bit, this is actually a gigantic risk that is here and nobody quite knows how to talk about it yet, but it's already happening. And part of what's happening is AI is an amazing thing. I use the tools. It's gotten frighteningly good in a relatively short period of time. Who even knows what the next 6 months, 12 months offers. Um, but I think we're seeing it. So they say job report shocks, remember? So it just came out in February. They're like, ah, we lost 92,000 jobs. Um, gosh, they weren't expecting that at all. They thought it was going to be a gain of 55,000. That's a big miss. How did we miss? I think part of it we have to understand. I follow tech layoff tracker over on Twitter or X. Uh turns out Meta is now confirmed 15,000 layoffs and he says it's just the cover story. He's hearing that the real number is probably closer to 23,000 when you count contractors and voluntary departures. Amazon just confirmed 16,000 layoffs, but sources inside are telling this guy the real storyries much worse. Um let's see. Uh Oracle confirmed cutting 20 to 30,000 jobs and sources are saying the real numbers closer to 45,000 and it's about to pick up steam here because layoff tracker says spent 3 hours on backto-back calls with chief technology officer CTO's from 30 companies across crowd cloud infrastructure fintech and enterprise software the consensus was chilling 70% headcount reduction by the end of Q3 2026%. not layoffs. This is right sizing for the AI native era. Average engineering org that has 180 people today is planning for 54 by September. Same output targets, same delivery timelines. Uh, one CTO at a major enterprise software company showed me their model. Eight senior engineers with Claude, the AI tool, managing 47 offshore contractors with cursor access. Da da da da da. So, this is coming really fast, Paul. lots and lots of layoffs. So for the people, there's a lot of troubling stories out there. People saying, "Hey, I got laid off, was earning like really good money, a project manager or a software engineer or a developer within one of these companies, and they get laid off suddenly, like just like no notice." Like one guy was trying to get back into the building from lunch and his car didn't card didn't work. That was that was the exit interview, right? >> Everything was shut off while he was at lunch. I mean, pretty rough, right? So you go from income to no income and these people are reporting sending out 500, 700, a thousand resumes, applications, getting no nibbles at this point in time. So for anybody who gets laid off, you you have to just immediately treat that as a triage situation and just cut to the bone right away. All unnecessary expenses, just reel them in. That's really good advice, Chris, because I can tell you back in 2008, there were so many people that I kept the courage and I said, "Look, you got to prepare now. I mean, you you have to cut. No, it's going to be fine. I've been through these cycles before. It's going to be okay." and then they liquidated some of their other assets that could have been protected to try to hold on to some of these properties and then they ended up losing them anyway and they lost their seed capital for the potential to recover on the other side of that cycle. So please white collar workers do not be complacent and I I don't think I've shared this on the podcast before but here's an example of somebody that I know. So, somebody I've known for a long time, they're independent contractor, they're uh electrical engineer by design, but they do programming. That's kind of their specialty. So, they do contract work. No matter what recessions we've had in the past, 2020, 2003, 2008, they never missed a beat. Didn't have any problems. So, he did make the comment about four, let's see here, this is March, about November of 2025. He says, "You know, I'm I'm I've got a couple of contracts coming up, but instead of having 20 to choose from, I've got three." So, I asked him, I said, "Look, are you familiar with AI at all?" He said, "No." So, we had quite the interesting debate for about an hour at lunch, and I said, "Look, go prove me wrong. Go prove the people that are wrong. See if it can do the programming." So, about two months later, he comes back and he says, "I'm changing careers. I'm going back and getting an education. I'm going to go into HVAC." He said, ' Because literally, it's mind-boggling how good it is. And this was several months ago, okay? And now we're light years ahead from where we were. And he says, 'Now I understand why these contracts aren't coming through. He said, because basically I had estimated 6 months to do this contract and I'm able to do it in a matter of hours now. So, so that's that's somebody that's actually paying attention. So again, white collar, just because you've survived every recession in the past and not had any issues, do not take that for granted. Don't use hindsight bias. Put yourself in a situation to where you can weather this storm and have some options on the other side of it. >> Yeah. You know, opening eye put out this handy graphic that's it's really they say this is going to be a great recession for white collar workers. So, you know, when we had this is, you know, this is all fresh in my mind because I just did that big report on it and I was framing all of this up, but you know, when we went from muscle power, that was animals, ox and horses, humans, right? Digging ditches and all that to steam power, it was almost 200 years before the last horsedrawn carts are really like, you know, kicked out of cities, right? It took a while to get through that whole process. This is going to be about two years and it's taking away cognitive jobs not muscle jobs and this is a whole different beast right it's both again the pace and the chain and and the destination so right now they're reporting here that 94% of all computer/math tasks can be covered by AI currently and currently it covers 33% so there's a big gap here but but you can see it's already starting to eat in really hard and the customer service reps data entry clerks, medical documentation, marketing an analysts, sales reps, financial analysts, all right on the chopping block uh very very quickly. And so that's already happened, right? Um and they say here they put out this interesting pie chart uh and open I'm sorry, Anthropic is kind of the only company that seems to be wrestling with it at this level. So the blue is the theoretical coverage like like it can do almost all of management. AI can do almost all of management, business, finance, computer and math, architecture, engineering, office admin. And the red in here, this little tiny bit, shows its current penetration into these various fields. But everything everything's on the block at this point in time. Everything. >> Wow. >> So, who's ready for that? Right. So, um again, it's coming. I I wish we had a culture that could sit down and talk about these things and come up with a plan, but I don't know. So, Paul, here's here's the here's the basic problem at this stage. These layoffs already happening. I don't know how many people you can lay off before you get to a trigger point which causes the great recession because all these companies individually are going to go, "Hey, I can save 500 million on staff costs, right? And so, I'm going to do that. that individually makes sense, but when you sum it up across all the companies, who's buying the products, right? And and so you get this shock model where we're not quite every company's making an individual decision that makes sense, but it makes no sense across the board. Who's watching the across the board part for us? Is that Congress? >> No. >> Is that the Senate? >> Is that the Trump administration? Who is it? >> Yeah. All they're doing is using insider trading to line their own pockets, unfortunately, and not even listening to the American people. >> Yeah. So, so this is coming and and you know, it's it's remember when we had the great financial crisis, it wasn't 100% of mortgages went belly up. I think it was 8% something like that. >> It was some number like that. >> It was less than 15%. I can't remember the number, but I know it was less than 15%. >> Yeah. That's all it takes really to to upset sort of Anyway, this is a shock. shock to the model um is coming >> and again it's just happening and I don't think like we have a lot of a lot of uh leadership wisdom at this stage. So we're just going to have to watch it unfold. Um we'll see. >> Yes. And and adapt. And that's the importance of having a plan. sit down, write it out, have a plan, you know, and and and that plan's all it's going to do is set your mind in a particular direction and look at best case scenario and look at worst case scenario and make the decision of what you're willing to tolerate because I'm a big believer that if you can accept worst case scenario and any potential outcome, you know, you may sometimes you don't want to accept it, right? Sometimes you can't deal with worst case scenario, but at least if you know what it is, you're better mentally prepared so that you're not just shell shocked. You can make adaptations and be one or two or maybe three steps ahead of the average person. And I know this is a horrible analogy, but when we go fly fishing into grizzly country, we always laugh, right? Like, I can outrun you if you know, and nobody wants to do that. Hopefully, we're all good enough friends we're going to stand and defend each other. But the reality is you've got to be able to protect yourself first before you can protect other individuals. That's why it's so important when others are being complacent. Be prudent and prepare and say if this happens then I can do this. If I lose my job, that's a great advice that you gave. I'm going to cut down to the bone immediately so that I can last as long as possible. If you've got 24-month emergency fund, you cut down to the bone immediately. You could probably stretch that out to 36 or uh uh three or four years, 36 or 48 months. And guess what? You may be the last person standing for for whatever position comes out the other side because I do believe the economy will readjust itself in some way. I'm not a big believer that, you know, hey, there's only going to be a few people that have jobs because it's supply and demand. If there's a large group of very educated people that lose their jobs and they can't go back into that field, guess what? There's going to be a lot more plumbers. There's going to be a lot more framers. The question is if it's bad enough, who's going to be able to pay to build all this new construction? Because this the average, you know, household debt is its all-time high. We as individuals within the citizenry as a whole are in the weakest financial position for a recession than we've been in a long, long time. >> I hope not, but um you never know till you get challenged, right, where you really stand on these things. But um I'm starting to rethink things a little bit because uh for a long time I've been very very heavily on the side that this is all purely inflationary. You know I know deflation is a possibility and I understand that I actually think there'll be a little deflation the implosion but just for a month or two to give them the right to make it really inflationary. But with AI, we have to uh support, we have to look at the idea, Paul, that we could possibly enter an actual prolonged deflation. That's going to require an actual shift in my mindset. And I'm gonna have to balance more to cash. Um, which is something I've steered away from for quite a while because inflation was the name of the game. >> I'm not sure we can print our way out of this. I'm not sure. >> I'm not so sure. You know, I I I've been pretty vocal that I believe that we were going to have deflation first before we got that inflationary impulse, but the more information comes along and I look at this, everything that has taken place is deflationary. And and what was it? Was it Thomas Jefferson that said that if you give your uh control of your money supply over the central banks first by inflation, then by deflation, they will rob you of all your wealth. >> Mhm. Maybe that's just something that's built into the uh into the laws of the nature economically because look if we've got robots producing things and AI is doing all the work that is deflationary. The more you can produce the more uh supply you have of something the lower the cost of it and especially with this debt overhang I mean if that implodes that is dramatically deflationary. If we go back to the great depression what happened they didn't think debt mattered anymore. They thought that they had reached a new normal and then all of a sudden that debt collapsed upon itself and it wiped out all of that money supply and maybe they can print on the other side of that. But if you have enough destruction within the debt supply and it sucks all that money out of the system, then you're going to have prolonged deflation. And that's that's my greatest concern, right? I want to protect against that deflation initially. But if you're protected against that deflation initially and it lasts for 10 or 15 years, you made a great decision. But if you assume that it's going to be inflationary and I'll ride through that month or two and and the inflation is going to take off the other side and you don't react with that, that's when you can get wiped out. >> Well, there's another form of deflation here that that we need to talk about. Um not just because AI does so many jobs so well that it crushes prices. Um, but we we first noted this on this program January 26th. It was what we called a tremor, right? Where and the tremor is it looks like there's a liquidity issue and you detect that the same as I'm seeing the same pattern today, which is why I'm raising it here on March 18th. This is the third tremor I've seen so far. So, what do I see today? Stocks down, bonds down, gold down, silver down. Right? It's very unusual to see that. that that just says somebody somewhere is selling whatever they can right now because they're trying to free up cash. And so it's a very unusual pattern to see because normally stocks and bonds go the other way. People don't want stocks, a little risk off, so they go into bonds. Oh, things look good. Sell the bonds, get back into stocks, it just nope, now both are down. And I just want to observe that. So we could get something Paul where where if you get a a debt deflation, those things have a life of their own and they're totally independent of how much money is in the system or you know what what fiscal stimulus is or any of thing the Fed might do. So just wanted to observe the last time I saw three tremors in a few months was in um the leadup to the GFC. >> Yes, >> it's a very rare pattern for me. >> Right. We saw it in 2022. Remember, we've got stocks down, bonds down hard, right? Gold and silver, however, you know, kind of maintained and went the other way. So, it wasn't a full But now everything's getting hit, >> right? It is. And I think 2022 was a a a major warning for investors that we're in a different environment than what you've seen in the past. If we're looking for those, I call them birth paints, right? That's a birth pain and it gives us an indication of what the outcome is going to be. So I don't believe that you can just complacently rely on these 10, 15, 20 year bonds because you're right, private equity is blowing up around the edges right now. So if that ripples into other areas and you have deflation in consumers, you know, companies are overlevered. The reason they're overlevered is because of the financialization on top of it. Everybody's concerned about squeezing every little bit of profit out of everything that they can because that's what has worked in the past. But when you reach maximum efficiency and things come apart. So that's right. You know the the one benefit to gold like and this is what I tell clients that what you set aside from a long-term standpoint is your your insurance. It's a tier one asset within the banking system. You call it a zero tier asset and I should commit that to memory completely. You don't have counterparty risk. Right? If you own the utility company in the south it's southern company. Not a recommendation just an example. The argument is is hey people are always going to pay their power bill. Well, if they have money to pay that power bill, that is true. But those those utilities have lots of debt. So if you have deflation and that and and what the customers are able to pay is 50 or 60% less than what they were paying today, for example, they can't service those debts. That company goes bankrupt. If you're an equity owner, you lost all of that equity. I mean, that's that's the risk. if this turns into a major deflationary event and that's something that people need to be aware of and prepare for. >> Indeed. Well, Paul, we're going to leave it there for today. Well said. So, for everybody who wants to maybe explore having a riskmanaged approach, uh you would have the opportunity to work with Paul and his team. Go to peakfinancialinvesting.com, fill out a simple form, and somebody from Paul's team will be in touch with you within 48 business hours and set up a meeting. the first of three. You have a nice introductory call, a little planning session, and if it goes further into a recommendation strategy for how you can get through this. And Paul, you're one of the few people I know who will talk to people about the great taking, about gold, and about what happens if inflation isn't 3 and a half% like most people's top of model estimates, but it's double that. What do I have to do? What does that mean? What does that imply? So, um, if you, anybody listening, if you want a real truly comprehensive service, that's what's on offer here. >> It's our honor. We love it. It never gets boring. And it's been a while since somebody's pushed back on me against a planning meeting. So, I had somebody yesterday and I'm like, "Look, just just entertain me, okay? You know, just entertain me." So I take them through and I'm able to show them the scenario of, you know, severe inflation versus deflation and and help them develop a plan on so that they understand exactly how and why they need to be invested and and how to deploy their dollars. And they were just kind of speechless for a few minutes because I'm like, look, look, if we get that this outcome, if you continue down the path you're on, this is what what's going to happen. This has happened in history. If we get this outcome and where you are, then you're going to lose purchasing power and be miserable slowly. So, developing a plan for people gives them peace. It's worth the time that we go through and and there's many people that I've met that it's not appropriate for us to work together, but I feel good that we've been a blessing to them because they're better armed with wisdom and information to make better decisions in the future. So, we love it. I'm the one that's always here uh talking, but you've got John on the team. You've got Alex now. You've got Dylan. They all care deeply about, you know, making a positive impact on those people we have the opportunity to meet. >> Well, thank you for what you do, Paul. Thank you everybody for listening today. We'll be back next week and I'm sure it'll be action-packed then, too, because wow, so much is happening. Please be aware, be educated, and then take action. That's that's how we become resilient. Until next time, I'm Chris Martinson signing off.