Market Outlook: The S&P 500 is at record levels, and gold has reached $3,700 an ounce, indicating significant market movements and investor sentiment shifts.
AI Investment Concerns: There is skepticism about the profitability and productivity gains from the massive investments in AI by major US companies, raising questions about the sustainability of the current AI-driven market boom.
US-China Relations: Trade talks between the US and China are ongoing, with recent tensions highlighted by China's halt of germanium shipments, but there is optimism for a resolution by the APEC meeting in October.
China's Economic Strategy: China is shifting its focus from industrial expansion to domestic stimulus, aiming to transition from a deflationary bust to a deflationary boom, which could positively impact equity markets.
Deflationary Boom: The concept of a deflationary boom is discussed, where increased productivity and technological advancements drive economic growth without inflation, potentially benefiting equity investors.
Federal Reserve's Role: The Fed's actions are seen as less critical in the current global economic landscape, with more emphasis on the structural issues of US debt and the potential for debt monetization impacting the dollar's strength.
Gold Market Dynamics: With central banks as major buyers and limited supply, gold is in a bull market, suggesting long-term growth potential despite potential short-term volatility due to Fed actions.
Transcript
The S&P 500 is at record levels. Gold touched $3,700 an ounce today and the Fed is meeting right now as we speak and as we're recording this. I'm bringing back a fantastic guest that we had on in January is Louis Gav. He was he he received rave reviews for his commentary. We talked around the AI bubble back then and the deepse or the introduction of deepseek to to the world and how it caused disruption. We're going to continue that conversation, see how AI is shaping the meta and macro landscape right now. But we're also going to talk about a of course the the Fed. We have to mention it. What are the expectations? Can we expect a rugpull tomorrow, meaning Wednesday? And what is happening between the US and China? Trade talks are happening in Madrid and China stopped shipments of Germanmanium. So, they're already playing the game and they're not playing it easy. So, they're they're making it hard for everybody. So, it'll be curious what his thoughts are on those topics. Before I switch over, hit that like and subscribe button. It's a free way to support our channel and we much much appreciate it. Now Louie, it is great to have you back on the channel. It's good to see you again. >> Good to see you guy. Thanks for having me. >> Yeah, really looking forward to this. We got rave reviews of the last interview. So I'm really really excited to have you back on Louie. Um let's start right at the beginning like maybe connect this interview with the one we did in January where we talked about the Deep Seek crash and the impact of Deepseek. Maybe um let's discuss or set the scene here by just discussing the role of AI in the meta and macro landscape that we are in right now. What has changed over the last nine months here? Look, I uh I think it's a great place to start. Uh to be honest, uh you know, AI that the hype, the excitement really started back in uh in November 2022. Um if you go back then, the total US market cap was $40 trillion. Uh we're now at about 65 trillion of market cap. So that's 25 trillion in a little less than three years. It's simply unprecedented the the wealth creation. And not all of that has been AI of course, but uh essentially most of that wealth creation has occurred in the top sort of 50 US stocks. Uh you look at your Russell 2000, you look at your S&P 600 small cap index, you know, they've barely done anything. So the wealth creation has has occurred in in the US top market caps. And I think what's unfolded essentially is today the US sends more dollars abroad than it ever has. You know, right now the US current account deficit is 6% of GDP. Concretely, that means that the US sends two trillion bank nodes, like two trillion little dollars to to the rest of the world. And the rest of the world gets these dollars and like what am I going to do with these? Um, and I think for the past almost three years now, the view has been, well, uh, I'm going to reinvest them in US equities. I'm going to reinvest them in the S&P 500. Uh, because the US has companies that, uh, that do things that nobody else does. Um, so AI has perhaps been the one differentiating factor uh of the US relative to to everybody else. And and that's why I think it's a great place to start this conversation because inherently I think we're now getting to the point sort of three years into this AI boom, hundreds of billions of dollars being spent in capex where increasingly we're going to have to see whether this uh these investments actually provide returns. um you know the hundreds of billions of dollars that Facebook that Google that uh Microsoft etc invested does that deliver profits to the bottom line yes or no um if yes then happy days this uh you know this capex all made sense productivity gains are here the US is exceptional etc if it turns out no if it turns out that all this money was essentially lit on fire that the productivity gains uh and more importantly the profitability is isn't that Great. And I think there's increasing signs that that this may be the case. Then all of a sudden you've got a quandry in that well why am I going to keep redeploying capital in the US if they're just going to you know light it on fire. Um so the AI I think we're at a super important juncture. If essentially AI has been a bubble uh and if it you know bursts in in the coming year that means most likely that the dollar has got another massive leg down that US equities have a big leg down again 25 trillion in uh in sort of wealth creation in three years is unprecedented um so the eye question is is an allimp important question um I I would go one even one step further when you look at the mega trends perhaps reshaping our markets right now One of them is AI. You know, is is AI going to change the world or not? The other mega trend that you and I also discussed is uh the question of um whether um sorry, I don't know what just happened here. Um the the the question of whether um um welfare states are essentially at the end of their road. Uh whether we can keep expanding debt forever. France, Britain, US can keep running budget deficits of five six% of GDP. Um and then I think there's another huge question that's now coming to reshape our world which is which appeared sort of two three weeks ago um is the new cooperation between China, India and uh Russia. Uh because if those three countries start getting along much better, then all of a sudden you're uniting the guy with the the cheapest commodities, the cheapest cap capital goods, the cheapest cost of capital, and the cheapest labor. You put those three together, you got a boom of epic proportion. Now, interestingly, when you look at a top 30 companies in the stock market today, out of the top 30 companies, 24 are American. And a number of them, especially in the top 10, are all in on the AI boom. Uh if you look at your top 30 companies, how many of them will benefit from the growing economic integration between China, Russia and India? Uh the answer is out of the top 30, probably only three of them. Um so um you know, you make your bets, you pick your horses. Today, everybody picked the AI horse. Uh I actually think what's going to change the world in the coming decade is the growing economic integration between China, India, and Russia. Yeah, big big topic there. It was just the the Shanghai Corporation Organization meeting in Dian Jin just uh I think it was three weeks ago as you mentioned and Modi for the first time in eight years participated as well. So really a milestone or a really important milestone meeting there um as you mentioned but coming coming back to AI one thing I've written down is like you're you're still very skeptical whether AI will return any profits like you mentioned that in January um are are you seeing any more clarity on that because uh based on what you just mentioned is that you you haven't lost your your scruples about it. No. Uh, no. And you could say, oh, you know, I've missed out on an opportunity, etc. But, you know, there's been other opportunities to make money. Like you mentioned, gold. Uh, you know, China's been in an roaring equity bull market. So, you know, it's uh it's I look at AI, yeah, I I do remain skeptical on on the ability of these hundreds of billions of dollars in investments to generate any kind of uh of meaningful returns. Um, I also think that, you know, the the Googles, the Microsofts, the Facebooks have taken on a big risk because, you know, part part of what made their stock so attractive was that they were very capital-like business models. Um, you know, these guys essentially generated huge cash flows with fairly little capital outlays. But this has now been massively turned on its head with with all the money that they have to plow into AI. Essentially they become as capital intensive as steel mills or auto plants. Uh except that the investment they make probably have a lifespan of two to three years. You know within within three years a lot of these data centers are obsolete. Within three years the chips are obsolete. Um and that's before you go into the fact that you know you look at Facebook like writing hundred million dollar checks to to hire the best AI engineers. Um, you know, it's uh to me it uh yeah, it feels like I think a lot of this capital will have will have been found to be to be wasted by the time it's all said and done. >> Yeah. I think one thing we we talked about there in January as well is just the deflationary impact of China and maybe we should talk about that in general because we got the Fed meeting looming over us, the FOMC's meeting as we speak here, Louie. um talking about inflation and deflation uh the deflationary impact of China on the AI space in general like how would you rate that like how is China a bit of a counterbalance to what the US is doing in that regard. Deepseek we talked about like I'm not sure what the latest numbers are like what the development costs were. We were joking about the 6 million back then but we I don't think the numbers are too far off here. Um how do you rate that deflationary impact? So look uh my read on China is a a pretty simple one and that is that uh in 2018 when the the US did an embargo on China the Chinese a semiconductor embargo the Chinese leadership essentially panicked and they said okay the US is out to get us uh we need to build domestic domestic resiliency in every single vertical we need to uh you know build up independence everywhere. So the banks at that point were told, look guys, no more loans to real estate. All the loans have to go to industry because tomorrow the US could cut us off chemicals, the products. They could cut us off auto parts. It could cut us off anything. Um and so for seven years uh no money was going to the consumer, no money was going to the uh to the real estate and everything was going to industry which was a huge to your point it was a massive twin deflationary impact. First because real estate went bust which you know led to balance sheet recession. Chinese consumers tightening their belt etc. That was the first deflationary hit. The second deflationary hit was that China was adding massive capacity in every single industry. And so you know out of nowhere China becomes the biggest car exporter in the world and the biggest tractor and the biggest telecom switch. Uh and yes uh money is poured into semiconductors. Uh and with that um you know and and money is poured into developing uh China's own AI solutions. So, you know, unlimited capital for essentially anything technology, anything industrial. Um, but this is where I think right now you're seeing perhaps a very important shift in in Chinese policy. Uh, the new buzzword in China now is anti-involution. Uh, Cinping's given speeches on it. Every Polit Bureau member has given speech on it. Now, anti-involution means basically anti- excess competition. Um, and you know, you could ask what's excess competition? Well, essentially what the Chinese government is doing is is telling the banks, "Okay, guys, stop lending to industry. We we've now reached a point where we're strong enough and we know that the US can't take us down." Um, we we can produce everything ourselves. The ability of the US to curtail our growth is now much diminished. And so against this this backdrop, uh, China is no longer going to be adding capacity on top of excess capacity. So, you know, if you believe the Chinese government and and for my sins, I tend to believe, you know, I I've been there 30 years. I tend to think that the Chinese government has a decent track record of saying what they do and doing what they say. Um, so if you believe what they say today, that they mean what they say, that means that the the deflationary impact from China should abate should start abating from here because they're pretty much done adding excess capacity on top of excess capacity. >> Yeah. Which brings me to the China stimulus package that was just announced I think 24 hours ago pretty much. I'm curious what your thoughts are because it's something the US has been demanding as part of the trade talks as well. Just domestic stimulus. Let's get the economy going. Let's get the consumer more um incentivized to purchase and just consume domestically and drive demand for US products within China as well. What do you make of the the domestic stimulus package in general without even the US angle? >> Well, look, uh China's now in an environment where there is there is no inflation. Look, you know, the constraint to to stimulus is always inflation, right? Um and there is there is no inflation in China. Um in that respect, China is not that far off where the US was in 20 2009 2010 you know inflation collapsing low real estate prices very low confidence. So you can you can you know follow very very loose monetary policy and if you choose to very loose fiscal policy um and this is where China is today. You know China right now this year will probably be running budget deficits of around 10% of GDP give or take that like China's never run budget deficits this big. This is this is absolutely massive. Um so and they're doing this at a time when monetary policy has never been this easy. So you're you're seeing massive massive liquidity injections and for now because economic growth isn't that strong, you're in an environment not that dissimilar to what you had again in the US 2009 2010 where you're pushing excess liquidity in and the default mode is for that excess liquidity to find its way into asset prices, most notably equity prices. Um so you know I I think that the playbook that you had post 2009 2010 in the US is not that dissimilar from the playbook that you have right now in uh in China. Um and so you it's interesting because you get weak growth and just like in the US in 2009 2010 everybody was saying oh my god it's a new normal growth will never come back or like this. Uh so you get weak GDP growth. So you get a government that does more and you get equity prices that grind higher uh every every single day uh essentially climbing the wall of worry uh in in the face of really nobody believing in it. Um there's other parallels of course but um the bottom line is right now you know Chinese growth is disappointing. the government is stepping up to the plate to stimulate more and they don't really have any constraints to to to the stimulus they might want to put in. >> If you were to put like an economic what do you call it a buzz word around it like deflation stackflation recession what would you use for China right now Louie? Well, definitely not stackflation. Um, we have no inflation. Look, I think in China, we are in a structurally deflationary environment. China is a deflationary force to begin with, but we've had these twin deflationary forces of busting real estate and and excess capacity being put in. So, we are in a very deflationary environment in in China. Um, the big question is whether you're in a deflationary bust or a deflationary boom. And the government is doing everything it can to move from the the bus side to to the boom side. Um and the stock market is increasingly behaving as if saying look u I don't know when it is but at some point all the stimulus that the government is putting in will get some traction. Um because the government isn't going to quit right it's you know again they have no constraints. They're not going to turn around and said, "Oh, well, we tried. Um, let's just turn ourselves into Japan for the next 30 years." Uh, no, that's that's not going to happen. It's going to keep being pedal to the metal. Um, and so, yeah, we're I think, you know, that we're we're uh to answer your question, I think we're inching our way towards a deflationary boom in China, which incidentally is is really the best environment for for equity investors. Typically, >> deflationary boom. I'm writing that down for our YouTube title perhaps, Louie. So, um, might might use that because you're the first guest mentioning that deflationary boom. Usually, it's always in a negative context, but you make it sound like a positive thing. I >> actually on this on this on this, I think this is important. The natural state of capitalism is deflationary. Like every entrepreneur, every business leader, everybody wakes up in the morning wondering how can I produce more with less? That that's the whole point of capitalism. less, you know, less commodities, less land, less workers, less I want to produce more with less. That's what we're all trying to do all day, every day. So, the natural state of capitalism, you you go through the whole 19th century. The whole 19th century was essentially periods of deflationary boom alternating with deflationary busts. That's the that's the natural state of capitalism. And I think it took the really the era of fiat currencies and just massive money printing for us to you know to to change that equation of capitalism moving from deflationary boom deflationary bus and and and the growing welfare state as well. Now my starting point when I look at markets is that uh most asset prices are driven by the interaction of inflation and economic growth. So that so that leaves you, you know, you put them on a four quadrant axis. Uh that leaves you with four possible scenarios. Uh you can have an inflationary bust, what you call stackflation. You can have an inflationary boom, which is where I think most of the western world is today because we have, you know, massive budget deficits uh that on top of massive government debt that are being monetized by central banks. So that's your inflationary uh boom. You have your deflationary boom, which is what I think you have in China. And then you have your deflationary busts which is what you have had in Japan for 20 years but you no longer have. But um to your point when you talk about deflation most people in their mind partly because that was the exper experience of the past 30 years immediately go to Japan. Um and and imagine a Japan-like scenario. Um but you know again the 19th century which was a period of tremendous economic growth was mostly a period of deflationary boom. >> Interesting. Yeah. No, it's true. We're going through that deflationary boom right now with AI, meaning we're increasing productivity. Would you would you agree that's also part of that category, part of that game? Does that fit the definition? So technology fundamentally is a deflationary force. Uh again, trying to do more with less. Um and here this is this is at the heart of the question and and the big debate is how much productivity gain are we going to get with AI? If we get tremendous productivity gain, um AI has the potential to indeed uh unleash a deflationary boom. Um when I look at the western world today, what I see is uh you know again hundreds of billions of dollars spent into AI uh and I I don't really see either the returns on on people's bottom lines yet. Uh nor do I see really uh the the massive productivity gains in our economy. If if we had massive productivity gains, uh inflation would be trending down towards zero. Um what we have in the western world is inflation actually, you know, creeping higher. Uh you know, I I imagine few of your listeners today are going around saying, you know, there's so much deflation in my life. Assuming now that your listeners aren't in China, if your listeners are calling are listening in from Europe, from North America, um everybody, most of them will be complaining not of falling prices but of rising prices uh wherever they turn, rising insurance costs, rising uh grocery costs, rising everything. So um I you know so far maybe AI will be a big deflationary force for the world. Uh so far I I just don't see it in the data. Yeah, it might be deflationary on the workforce, but not not really in in any other way. We we'll have to see how it plays out because personally, I'm seeing and that's more of a personal anecdote. It's making my life a lot easier because I'm using AI as an HR per as an HR consultant, marketing consultant, you you name it, you I use it for, right? And even just here for YouTube, it makes life a lot easier and simplifies processes. So, tough to measure, but it feels like I'm getting a lot more done in a day than I used to in a week. >> Oh, that I that I firmly believe. Look, I use AI as well, etc. But remember that tool, those tools that you and I are using to make our day-to-day life easier are costing hundreds of billions of dollars. Um, and and so it's like, is that productive or not? Um, yes, you and I might save a few hours. Is it worth all the money if if essentially Google or Microsoft and Chad GPT and and OpenAI, etc. are spending, you know, uh, $500 for you and I to save $150 worth of work. Um, then that is not deflationary boom type activity. Uh, in fact, that is deflationary bust type activity because what you're doing is is let lighting money on fire and at some point that stops. >> It's interesting because you look at different perspectives. For me, it's $10 a month. For Microsoft, it's a billion dollars a month or something, right? So for me that 10 $10 is massively deflationary on on my time, >> right? So it's a perspective. It's an interesting discussion because it depends on the angle as well. >> But they're losing money on it. They're today they're all losing money on it. So uh the question becomes, okay, if if the right price should be $1,000 a month, are you still subscribing? Are you like, oh, well that it only saves me an hour a day. I'll do that hour a day because I want to save the thousand bucks. >> Yeah. No, good good point. We we'll cross that bridge when we get to it. and I'll make that decision once they raise prices there, Louie. Um, but maybe one last topic here in in regard to China as well. I mentioned the meeting in Madrid that is happening right now as well. Um, what do you make of that US China tariff talks? We we've seen a Tik Tok deal come out of it that seems to be satisfactory for both sides. Um, what do you make of the discussions? I mentioned in the intro Germanmanium trade is being halted. So, the Chinese are already like pulling on some levers here to exert some pressure. Um, what do you make of it? So I think the the USChina tensions are essentially over. Um I think that the big period of essentially yanking each other's chain uh is now is now done for. Um and you know going back to to what I was saying earlier the the semiconductor embargo of 2018 was was the defining moment when that happened and essentially the US came out swinging against China. China took the punch like they took the punch and they rolled uh and you know they said okay world has changed we need to get ready and in 2021 uh the US came out swinging again uh you know you had the anchorage meeting with blink Sullivan Wongi and the US came out swing in and again China took the punch and this time around ch you know Trump comes around in 25 and doesn't just punch China but really punches absolutely everybody out there and China at that point is the only one that h stands up and says you know what I'm not going to take this um and I'm not going to take this and fights back you know increases tariffs on the US and then to your point says look we're going to ban rare earths we're going to ban magnets and at that point the US realizes that while China's been spending the past seven years getting ready for this fight the US has not done that and that within three weeks uh you know the US is going to run out of missiles and without the Chinese rare earth and magnet they can't produce anymore more. Uh they're going to run out. The GM plant is going to have to shut down because again, no magnets. Um and so uh at that point, you know, they meet in Geneva, they they deescalate because deep down, you know, for China to ban the rare earths, for China to ban the magnets was a very anti a very non-Chinese thing to do because the default mode amongst Chinese policy makers is always to try to diffuse crisis. you know, they're in the Chinese policy makers are first and foremost in the game of social stability. Um they they want to keep peace domestically. Um partly because frankly because of history. You know, you look at China's own history. They went from 1850 to 1975. Uh China was probably the worst place in the world to live. You had foreign invasions, you had famines, you had economic disasters, warlords, uh anarchy. Uh it was a terrible, terrible place. and and as a result, social stability is at comes at a huge premium in China today. So for the Chinese leaders to come out and and amplify a crisis is is extremely unlike them. Um but so they did it. Uh the US backed down. Uh and and now you'll have noticed probably that since then, since that April meeting, nobody talks about Taiwan anymore. Like Taiwan used to be all over the Western media. you cannot open your paper without being told that China it's either this week or next week that they're invading. Now nobody talks about it. Now the US defense department um the Pentagon uh just released a white paper saying that look we we can't really be an Asian uh superpower actually because in an age of drone warfare and hypersonic missiles are actually our navy actually doesn't mean very much. Um so what we need to do is refocus on the western hemisphere controlling the Americas and leaving it at that. Um, so you know, the the bottom line is the the the the firing has stopped. Now you just need to to sit down and and you know, work out a face- saving deal for everybody. China will be very happy to have a face- saving deal because again, they're in the game of stability. Uh they just want a stable relationship with the US. She and Trump will be meeting at the APEC meeting in Seoul in late October. Maybe Trump on his way there will even stop in Beijing. Um either way, you know, by by late October, I think you get some kind of deal. Uh and yeah, I think like this this was a big story a year ago. I I I think it's dead and buried now. Can move on. >> That's some fantastic insights cuz uh I wasn't fully aware of the APEC meeting here for example as well. So that's that's that's some good insights there, Louie. Really appreciate that. And now I'm trying to tie that to what's happening at the Fed this week. Um you know, lot lots of topics and very little time. Let's use the last four minutes to sort of get your opinion on what should the Fed do because the tariffs of course are inflationary for many of our guests here on on the show. Um and the Fed is of course looking at the inflation data now. What should the Fed do in light of what you just mentioned in terms of coming from the geopolitical side from the tariff front? What should the Fed do? >> To be honest, I'm not sure I even care. Uh look, I I I think we've lived in a world that was all US dollar dominated, all US dominated all the time. Uh, and yes, in such a world, what the Fed did next mattered a lot. Now, you could say, "Oh, well, they're gonna are they gonna cut 25? Are they going to cut 50?" Uh, what I I don't really care because what's increasingly visible to me is that you have a US uh, you know, debt that's out of control and by hook or crook, it's going to get monetized by the Fed. Uh, I mean, that's the direction of travel. That's where we're heading. we're going to have a Fed that uh you know is increasingly being merged with with the US Treasury. So you know whether whether we get 25 or 50 you know this week uh it's like um what matters in terms of of me mega trend of of uh you know the the overall direction of travel um is you know you're going to keep getting debt monetization uh the US dollar is now you know it was structurally strong is now structurally weak and the you to be honest that the the Nvidia results are now much more important than than what the Fed does. Uh because you know the the day Nvidia disappoints is the day the shine comes off the AI bubble and it's the day that the dollar takes a big step down. Um I think the Fed is becoming a sideshow. >> Yeah. Ju just looking at it from the mining perspective and that's where we come from here as well. Like a lot of nervousness around that Fed meeting because gold is at 3,700. The mining stocks GDXJ all-time higher right now. We all fear a massive rugpole because we all got that massive bare market mentality. Uh if I look at my portfolio, it seems like a lot of people are lightning their or lighting light not lighting their positions on fire but lightning no what's what's a curl? >> No lightning shedding shedding some weight maybe in their portfolio. I don't know like whatever the right term is here. >> That that part makes sense, right? You look I think the GDX RSI right now 30-day RSI is like 85 which has never been before. Um, you know, it's and to your point, I think if you've been a GDX investor, uh, you you have you you're carrying some wounds over the past few years. You're carrying some wounds that have yet to to really uh to really cater cauterize. They're like some of them are still pretty open. So, you're not used to having such massive profits in such short periods of time. So, you can see how the the temptation to uh to take some off. And yes, you know, you know, you're pretty oversold. You could it pull back? Absolutely. But you, if you project yourself one year, three year, five year down the road, is gold higher or lower than it is today? Is the GDX higher or lower than it is today? And I think the answer is it's higher. Uh when I look at gold, I I'm still stuck with the problem that um you know, you have central banks around the world that are now a massive buyer and they're a price insensitive buyer. you have retail that used to sell, you know, the the GLD share uh share count kept shrinking, retail that's now buying. Um, and frankly, there is no supply. Like there is like you, you know, the GDX has had a great uh whatever it is, three, four months, but it's had a horrible decade. Uh, so >> 15 years of bare market. >> Yeah. Yeah. Oh, sorry. 15 years. So these like if you've been a gold miner, you've had zero access to capital like so you know there's zero capacity coming in. So >> so yeah, sure. Uh so sure the Fed could do a rugpool. Uh then again the Fed could do 50 basis points. Um and I don't know and you don't know and we'll see. But the Fed could do a rugpool and yes you may want to take some profits today but again it's the gold is in a bull market. Precious metals in general are in a bull market. GDX is in a bull market. In a bull market, you're either long or you're on the side watching it. You definitely don't short. Um, so today, you know, these things are in a bull market and so yeah, you can take profits, but I I still think in a year, three or five years will be high. >> Absolutely. No, fantastic, Lou. Awesome. Last words. I think that's what we all wanted to hear. You know, we need some confidence going into this tomorrow and uh this interview will actually come out here today on Tuesday as we're recording this, Lou. So, really appreciate your insights. Always fantastic to catch up with you. We could chat for hours. Like I I love your insights here. Um Lou, where can we send our audience to follow more of your work? >> Yeah, the easiest is is our website. Uh so gaffcal.com gavvk. I also happen to be on on Twitter at gav Vincent which is my my middle name. Um but I don't post very much. The best place is uh is to go to gaffcal. >> Fantastic. Awesome. Louie, thank you so much for joining us. It was a great pleasure to have you back on. And uh everybody else, thanks so much for tuning in to sore financially. How are you playing the Fed meeting tomorrow? And what do you make of the US China trade talks? Is it all over already? And this is just a face- saving mission for both sides. Really curious what you think. Put it in the comments down below and let us know how are you behaving in the mining space right now. Are you buying? Are you selling? Are you holding going into the Fed meeting? Really curious your thoughts. Thanks so much for tuning in. Don't forget to hit that like and subscribe button. It helps us out tremendously reaching a wider audience and we much much appreciate it. Thank you so much for tuning in. We'll be back with lots more. Stay safe out there. [Music]
GOLD & AI: Deflationary Boom Ahead | Louis Gave
Summary
Transcript
The S&P 500 is at record levels. Gold touched $3,700 an ounce today and the Fed is meeting right now as we speak and as we're recording this. I'm bringing back a fantastic guest that we had on in January is Louis Gav. He was he he received rave reviews for his commentary. We talked around the AI bubble back then and the deepse or the introduction of deepseek to to the world and how it caused disruption. We're going to continue that conversation, see how AI is shaping the meta and macro landscape right now. But we're also going to talk about a of course the the Fed. We have to mention it. What are the expectations? Can we expect a rugpull tomorrow, meaning Wednesday? And what is happening between the US and China? Trade talks are happening in Madrid and China stopped shipments of Germanmanium. So, they're already playing the game and they're not playing it easy. So, they're they're making it hard for everybody. So, it'll be curious what his thoughts are on those topics. Before I switch over, hit that like and subscribe button. It's a free way to support our channel and we much much appreciate it. Now Louie, it is great to have you back on the channel. It's good to see you again. >> Good to see you guy. Thanks for having me. >> Yeah, really looking forward to this. We got rave reviews of the last interview. So I'm really really excited to have you back on Louie. Um let's start right at the beginning like maybe connect this interview with the one we did in January where we talked about the Deep Seek crash and the impact of Deepseek. Maybe um let's discuss or set the scene here by just discussing the role of AI in the meta and macro landscape that we are in right now. What has changed over the last nine months here? Look, I uh I think it's a great place to start. Uh to be honest, uh you know, AI that the hype, the excitement really started back in uh in November 2022. Um if you go back then, the total US market cap was $40 trillion. Uh we're now at about 65 trillion of market cap. So that's 25 trillion in a little less than three years. It's simply unprecedented the the wealth creation. And not all of that has been AI of course, but uh essentially most of that wealth creation has occurred in the top sort of 50 US stocks. Uh you look at your Russell 2000, you look at your S&P 600 small cap index, you know, they've barely done anything. So the wealth creation has has occurred in in the US top market caps. And I think what's unfolded essentially is today the US sends more dollars abroad than it ever has. You know, right now the US current account deficit is 6% of GDP. Concretely, that means that the US sends two trillion bank nodes, like two trillion little dollars to to the rest of the world. And the rest of the world gets these dollars and like what am I going to do with these? Um, and I think for the past almost three years now, the view has been, well, uh, I'm going to reinvest them in US equities. I'm going to reinvest them in the S&P 500. Uh, because the US has companies that, uh, that do things that nobody else does. Um, so AI has perhaps been the one differentiating factor uh of the US relative to to everybody else. And and that's why I think it's a great place to start this conversation because inherently I think we're now getting to the point sort of three years into this AI boom, hundreds of billions of dollars being spent in capex where increasingly we're going to have to see whether this uh these investments actually provide returns. um you know the hundreds of billions of dollars that Facebook that Google that uh Microsoft etc invested does that deliver profits to the bottom line yes or no um if yes then happy days this uh you know this capex all made sense productivity gains are here the US is exceptional etc if it turns out no if it turns out that all this money was essentially lit on fire that the productivity gains uh and more importantly the profitability is isn't that Great. And I think there's increasing signs that that this may be the case. Then all of a sudden you've got a quandry in that well why am I going to keep redeploying capital in the US if they're just going to you know light it on fire. Um so the AI I think we're at a super important juncture. If essentially AI has been a bubble uh and if it you know bursts in in the coming year that means most likely that the dollar has got another massive leg down that US equities have a big leg down again 25 trillion in uh in sort of wealth creation in three years is unprecedented um so the eye question is is an allimp important question um I I would go one even one step further when you look at the mega trends perhaps reshaping our markets right now One of them is AI. You know, is is AI going to change the world or not? The other mega trend that you and I also discussed is uh the question of um whether um sorry, I don't know what just happened here. Um the the the question of whether um um welfare states are essentially at the end of their road. Uh whether we can keep expanding debt forever. France, Britain, US can keep running budget deficits of five six% of GDP. Um and then I think there's another huge question that's now coming to reshape our world which is which appeared sort of two three weeks ago um is the new cooperation between China, India and uh Russia. Uh because if those three countries start getting along much better, then all of a sudden you're uniting the guy with the the cheapest commodities, the cheapest cap capital goods, the cheapest cost of capital, and the cheapest labor. You put those three together, you got a boom of epic proportion. Now, interestingly, when you look at a top 30 companies in the stock market today, out of the top 30 companies, 24 are American. And a number of them, especially in the top 10, are all in on the AI boom. Uh if you look at your top 30 companies, how many of them will benefit from the growing economic integration between China, Russia and India? Uh the answer is out of the top 30, probably only three of them. Um so um you know, you make your bets, you pick your horses. Today, everybody picked the AI horse. Uh I actually think what's going to change the world in the coming decade is the growing economic integration between China, India, and Russia. Yeah, big big topic there. It was just the the Shanghai Corporation Organization meeting in Dian Jin just uh I think it was three weeks ago as you mentioned and Modi for the first time in eight years participated as well. So really a milestone or a really important milestone meeting there um as you mentioned but coming coming back to AI one thing I've written down is like you're you're still very skeptical whether AI will return any profits like you mentioned that in January um are are you seeing any more clarity on that because uh based on what you just mentioned is that you you haven't lost your your scruples about it. No. Uh, no. And you could say, oh, you know, I've missed out on an opportunity, etc. But, you know, there's been other opportunities to make money. Like you mentioned, gold. Uh, you know, China's been in an roaring equity bull market. So, you know, it's uh it's I look at AI, yeah, I I do remain skeptical on on the ability of these hundreds of billions of dollars in investments to generate any kind of uh of meaningful returns. Um, I also think that, you know, the the Googles, the Microsofts, the Facebooks have taken on a big risk because, you know, part part of what made their stock so attractive was that they were very capital-like business models. Um, you know, these guys essentially generated huge cash flows with fairly little capital outlays. But this has now been massively turned on its head with with all the money that they have to plow into AI. Essentially they become as capital intensive as steel mills or auto plants. Uh except that the investment they make probably have a lifespan of two to three years. You know within within three years a lot of these data centers are obsolete. Within three years the chips are obsolete. Um and that's before you go into the fact that you know you look at Facebook like writing hundred million dollar checks to to hire the best AI engineers. Um, you know, it's uh to me it uh yeah, it feels like I think a lot of this capital will have will have been found to be to be wasted by the time it's all said and done. >> Yeah. I think one thing we we talked about there in January as well is just the deflationary impact of China and maybe we should talk about that in general because we got the Fed meeting looming over us, the FOMC's meeting as we speak here, Louie. um talking about inflation and deflation uh the deflationary impact of China on the AI space in general like how would you rate that like how is China a bit of a counterbalance to what the US is doing in that regard. Deepseek we talked about like I'm not sure what the latest numbers are like what the development costs were. We were joking about the 6 million back then but we I don't think the numbers are too far off here. Um how do you rate that deflationary impact? So look uh my read on China is a a pretty simple one and that is that uh in 2018 when the the US did an embargo on China the Chinese a semiconductor embargo the Chinese leadership essentially panicked and they said okay the US is out to get us uh we need to build domestic domestic resiliency in every single vertical we need to uh you know build up independence everywhere. So the banks at that point were told, look guys, no more loans to real estate. All the loans have to go to industry because tomorrow the US could cut us off chemicals, the products. They could cut us off auto parts. It could cut us off anything. Um and so for seven years uh no money was going to the consumer, no money was going to the uh to the real estate and everything was going to industry which was a huge to your point it was a massive twin deflationary impact. First because real estate went bust which you know led to balance sheet recession. Chinese consumers tightening their belt etc. That was the first deflationary hit. The second deflationary hit was that China was adding massive capacity in every single industry. And so you know out of nowhere China becomes the biggest car exporter in the world and the biggest tractor and the biggest telecom switch. Uh and yes uh money is poured into semiconductors. Uh and with that um you know and and money is poured into developing uh China's own AI solutions. So, you know, unlimited capital for essentially anything technology, anything industrial. Um, but this is where I think right now you're seeing perhaps a very important shift in in Chinese policy. Uh, the new buzzword in China now is anti-involution. Uh, Cinping's given speeches on it. Every Polit Bureau member has given speech on it. Now, anti-involution means basically anti- excess competition. Um, and you know, you could ask what's excess competition? Well, essentially what the Chinese government is doing is is telling the banks, "Okay, guys, stop lending to industry. We we've now reached a point where we're strong enough and we know that the US can't take us down." Um, we we can produce everything ourselves. The ability of the US to curtail our growth is now much diminished. And so against this this backdrop, uh, China is no longer going to be adding capacity on top of excess capacity. So, you know, if you believe the Chinese government and and for my sins, I tend to believe, you know, I I've been there 30 years. I tend to think that the Chinese government has a decent track record of saying what they do and doing what they say. Um, so if you believe what they say today, that they mean what they say, that means that the the deflationary impact from China should abate should start abating from here because they're pretty much done adding excess capacity on top of excess capacity. >> Yeah. Which brings me to the China stimulus package that was just announced I think 24 hours ago pretty much. I'm curious what your thoughts are because it's something the US has been demanding as part of the trade talks as well. Just domestic stimulus. Let's get the economy going. Let's get the consumer more um incentivized to purchase and just consume domestically and drive demand for US products within China as well. What do you make of the the domestic stimulus package in general without even the US angle? >> Well, look, uh China's now in an environment where there is there is no inflation. Look, you know, the constraint to to stimulus is always inflation, right? Um and there is there is no inflation in China. Um in that respect, China is not that far off where the US was in 20 2009 2010 you know inflation collapsing low real estate prices very low confidence. So you can you can you know follow very very loose monetary policy and if you choose to very loose fiscal policy um and this is where China is today. You know China right now this year will probably be running budget deficits of around 10% of GDP give or take that like China's never run budget deficits this big. This is this is absolutely massive. Um so and they're doing this at a time when monetary policy has never been this easy. So you're you're seeing massive massive liquidity injections and for now because economic growth isn't that strong, you're in an environment not that dissimilar to what you had again in the US 2009 2010 where you're pushing excess liquidity in and the default mode is for that excess liquidity to find its way into asset prices, most notably equity prices. Um so you know I I think that the playbook that you had post 2009 2010 in the US is not that dissimilar from the playbook that you have right now in uh in China. Um and so you it's interesting because you get weak growth and just like in the US in 2009 2010 everybody was saying oh my god it's a new normal growth will never come back or like this. Uh so you get weak GDP growth. So you get a government that does more and you get equity prices that grind higher uh every every single day uh essentially climbing the wall of worry uh in in the face of really nobody believing in it. Um there's other parallels of course but um the bottom line is right now you know Chinese growth is disappointing. the government is stepping up to the plate to stimulate more and they don't really have any constraints to to to the stimulus they might want to put in. >> If you were to put like an economic what do you call it a buzz word around it like deflation stackflation recession what would you use for China right now Louie? Well, definitely not stackflation. Um, we have no inflation. Look, I think in China, we are in a structurally deflationary environment. China is a deflationary force to begin with, but we've had these twin deflationary forces of busting real estate and and excess capacity being put in. So, we are in a very deflationary environment in in China. Um, the big question is whether you're in a deflationary bust or a deflationary boom. And the government is doing everything it can to move from the the bus side to to the boom side. Um and the stock market is increasingly behaving as if saying look u I don't know when it is but at some point all the stimulus that the government is putting in will get some traction. Um because the government isn't going to quit right it's you know again they have no constraints. They're not going to turn around and said, "Oh, well, we tried. Um, let's just turn ourselves into Japan for the next 30 years." Uh, no, that's that's not going to happen. It's going to keep being pedal to the metal. Um, and so, yeah, we're I think, you know, that we're we're uh to answer your question, I think we're inching our way towards a deflationary boom in China, which incidentally is is really the best environment for for equity investors. Typically, >> deflationary boom. I'm writing that down for our YouTube title perhaps, Louie. So, um, might might use that because you're the first guest mentioning that deflationary boom. Usually, it's always in a negative context, but you make it sound like a positive thing. I >> actually on this on this on this, I think this is important. The natural state of capitalism is deflationary. Like every entrepreneur, every business leader, everybody wakes up in the morning wondering how can I produce more with less? That that's the whole point of capitalism. less, you know, less commodities, less land, less workers, less I want to produce more with less. That's what we're all trying to do all day, every day. So, the natural state of capitalism, you you go through the whole 19th century. The whole 19th century was essentially periods of deflationary boom alternating with deflationary busts. That's the that's the natural state of capitalism. And I think it took the really the era of fiat currencies and just massive money printing for us to you know to to change that equation of capitalism moving from deflationary boom deflationary bus and and and the growing welfare state as well. Now my starting point when I look at markets is that uh most asset prices are driven by the interaction of inflation and economic growth. So that so that leaves you, you know, you put them on a four quadrant axis. Uh that leaves you with four possible scenarios. Uh you can have an inflationary bust, what you call stackflation. You can have an inflationary boom, which is where I think most of the western world is today because we have, you know, massive budget deficits uh that on top of massive government debt that are being monetized by central banks. So that's your inflationary uh boom. You have your deflationary boom, which is what I think you have in China. And then you have your deflationary busts which is what you have had in Japan for 20 years but you no longer have. But um to your point when you talk about deflation most people in their mind partly because that was the exper experience of the past 30 years immediately go to Japan. Um and and imagine a Japan-like scenario. Um but you know again the 19th century which was a period of tremendous economic growth was mostly a period of deflationary boom. >> Interesting. Yeah. No, it's true. We're going through that deflationary boom right now with AI, meaning we're increasing productivity. Would you would you agree that's also part of that category, part of that game? Does that fit the definition? So technology fundamentally is a deflationary force. Uh again, trying to do more with less. Um and here this is this is at the heart of the question and and the big debate is how much productivity gain are we going to get with AI? If we get tremendous productivity gain, um AI has the potential to indeed uh unleash a deflationary boom. Um when I look at the western world today, what I see is uh you know again hundreds of billions of dollars spent into AI uh and I I don't really see either the returns on on people's bottom lines yet. Uh nor do I see really uh the the massive productivity gains in our economy. If if we had massive productivity gains, uh inflation would be trending down towards zero. Um what we have in the western world is inflation actually, you know, creeping higher. Uh you know, I I imagine few of your listeners today are going around saying, you know, there's so much deflation in my life. Assuming now that your listeners aren't in China, if your listeners are calling are listening in from Europe, from North America, um everybody, most of them will be complaining not of falling prices but of rising prices uh wherever they turn, rising insurance costs, rising uh grocery costs, rising everything. So um I you know so far maybe AI will be a big deflationary force for the world. Uh so far I I just don't see it in the data. Yeah, it might be deflationary on the workforce, but not not really in in any other way. We we'll have to see how it plays out because personally, I'm seeing and that's more of a personal anecdote. It's making my life a lot easier because I'm using AI as an HR per as an HR consultant, marketing consultant, you you name it, you I use it for, right? And even just here for YouTube, it makes life a lot easier and simplifies processes. So, tough to measure, but it feels like I'm getting a lot more done in a day than I used to in a week. >> Oh, that I that I firmly believe. Look, I use AI as well, etc. But remember that tool, those tools that you and I are using to make our day-to-day life easier are costing hundreds of billions of dollars. Um, and and so it's like, is that productive or not? Um, yes, you and I might save a few hours. Is it worth all the money if if essentially Google or Microsoft and Chad GPT and and OpenAI, etc. are spending, you know, uh, $500 for you and I to save $150 worth of work. Um, then that is not deflationary boom type activity. Uh, in fact, that is deflationary bust type activity because what you're doing is is let lighting money on fire and at some point that stops. >> It's interesting because you look at different perspectives. For me, it's $10 a month. For Microsoft, it's a billion dollars a month or something, right? So for me that 10 $10 is massively deflationary on on my time, >> right? So it's a perspective. It's an interesting discussion because it depends on the angle as well. >> But they're losing money on it. They're today they're all losing money on it. So uh the question becomes, okay, if if the right price should be $1,000 a month, are you still subscribing? Are you like, oh, well that it only saves me an hour a day. I'll do that hour a day because I want to save the thousand bucks. >> Yeah. No, good good point. We we'll cross that bridge when we get to it. and I'll make that decision once they raise prices there, Louie. Um, but maybe one last topic here in in regard to China as well. I mentioned the meeting in Madrid that is happening right now as well. Um, what do you make of that US China tariff talks? We we've seen a Tik Tok deal come out of it that seems to be satisfactory for both sides. Um, what do you make of the discussions? I mentioned in the intro Germanmanium trade is being halted. So, the Chinese are already like pulling on some levers here to exert some pressure. Um, what do you make of it? So I think the the USChina tensions are essentially over. Um I think that the big period of essentially yanking each other's chain uh is now is now done for. Um and you know going back to to what I was saying earlier the the semiconductor embargo of 2018 was was the defining moment when that happened and essentially the US came out swinging against China. China took the punch like they took the punch and they rolled uh and you know they said okay world has changed we need to get ready and in 2021 uh the US came out swinging again uh you know you had the anchorage meeting with blink Sullivan Wongi and the US came out swing in and again China took the punch and this time around ch you know Trump comes around in 25 and doesn't just punch China but really punches absolutely everybody out there and China at that point is the only one that h stands up and says you know what I'm not going to take this um and I'm not going to take this and fights back you know increases tariffs on the US and then to your point says look we're going to ban rare earths we're going to ban magnets and at that point the US realizes that while China's been spending the past seven years getting ready for this fight the US has not done that and that within three weeks uh you know the US is going to run out of missiles and without the Chinese rare earth and magnet they can't produce anymore more. Uh they're going to run out. The GM plant is going to have to shut down because again, no magnets. Um and so uh at that point, you know, they meet in Geneva, they they deescalate because deep down, you know, for China to ban the rare earths, for China to ban the magnets was a very anti a very non-Chinese thing to do because the default mode amongst Chinese policy makers is always to try to diffuse crisis. you know, they're in the Chinese policy makers are first and foremost in the game of social stability. Um they they want to keep peace domestically. Um partly because frankly because of history. You know, you look at China's own history. They went from 1850 to 1975. Uh China was probably the worst place in the world to live. You had foreign invasions, you had famines, you had economic disasters, warlords, uh anarchy. Uh it was a terrible, terrible place. and and as a result, social stability is at comes at a huge premium in China today. So for the Chinese leaders to come out and and amplify a crisis is is extremely unlike them. Um but so they did it. Uh the US backed down. Uh and and now you'll have noticed probably that since then, since that April meeting, nobody talks about Taiwan anymore. Like Taiwan used to be all over the Western media. you cannot open your paper without being told that China it's either this week or next week that they're invading. Now nobody talks about it. Now the US defense department um the Pentagon uh just released a white paper saying that look we we can't really be an Asian uh superpower actually because in an age of drone warfare and hypersonic missiles are actually our navy actually doesn't mean very much. Um so what we need to do is refocus on the western hemisphere controlling the Americas and leaving it at that. Um, so you know, the the bottom line is the the the the firing has stopped. Now you just need to to sit down and and you know, work out a face- saving deal for everybody. China will be very happy to have a face- saving deal because again, they're in the game of stability. Uh they just want a stable relationship with the US. She and Trump will be meeting at the APEC meeting in Seoul in late October. Maybe Trump on his way there will even stop in Beijing. Um either way, you know, by by late October, I think you get some kind of deal. Uh and yeah, I think like this this was a big story a year ago. I I I think it's dead and buried now. Can move on. >> That's some fantastic insights cuz uh I wasn't fully aware of the APEC meeting here for example as well. So that's that's that's some good insights there, Louie. Really appreciate that. And now I'm trying to tie that to what's happening at the Fed this week. Um you know, lot lots of topics and very little time. Let's use the last four minutes to sort of get your opinion on what should the Fed do because the tariffs of course are inflationary for many of our guests here on on the show. Um and the Fed is of course looking at the inflation data now. What should the Fed do in light of what you just mentioned in terms of coming from the geopolitical side from the tariff front? What should the Fed do? >> To be honest, I'm not sure I even care. Uh look, I I I think we've lived in a world that was all US dollar dominated, all US dominated all the time. Uh, and yes, in such a world, what the Fed did next mattered a lot. Now, you could say, "Oh, well, they're gonna are they gonna cut 25? Are they going to cut 50?" Uh, what I I don't really care because what's increasingly visible to me is that you have a US uh, you know, debt that's out of control and by hook or crook, it's going to get monetized by the Fed. Uh, I mean, that's the direction of travel. That's where we're heading. we're going to have a Fed that uh you know is increasingly being merged with with the US Treasury. So you know whether whether we get 25 or 50 you know this week uh it's like um what matters in terms of of me mega trend of of uh you know the the overall direction of travel um is you know you're going to keep getting debt monetization uh the US dollar is now you know it was structurally strong is now structurally weak and the you to be honest that the the Nvidia results are now much more important than than what the Fed does. Uh because you know the the day Nvidia disappoints is the day the shine comes off the AI bubble and it's the day that the dollar takes a big step down. Um I think the Fed is becoming a sideshow. >> Yeah. Ju just looking at it from the mining perspective and that's where we come from here as well. Like a lot of nervousness around that Fed meeting because gold is at 3,700. The mining stocks GDXJ all-time higher right now. We all fear a massive rugpole because we all got that massive bare market mentality. Uh if I look at my portfolio, it seems like a lot of people are lightning their or lighting light not lighting their positions on fire but lightning no what's what's a curl? >> No lightning shedding shedding some weight maybe in their portfolio. I don't know like whatever the right term is here. >> That that part makes sense, right? You look I think the GDX RSI right now 30-day RSI is like 85 which has never been before. Um, you know, it's and to your point, I think if you've been a GDX investor, uh, you you have you you're carrying some wounds over the past few years. You're carrying some wounds that have yet to to really uh to really cater cauterize. They're like some of them are still pretty open. So, you're not used to having such massive profits in such short periods of time. So, you can see how the the temptation to uh to take some off. And yes, you know, you know, you're pretty oversold. You could it pull back? Absolutely. But you, if you project yourself one year, three year, five year down the road, is gold higher or lower than it is today? Is the GDX higher or lower than it is today? And I think the answer is it's higher. Uh when I look at gold, I I'm still stuck with the problem that um you know, you have central banks around the world that are now a massive buyer and they're a price insensitive buyer. you have retail that used to sell, you know, the the GLD share uh share count kept shrinking, retail that's now buying. Um, and frankly, there is no supply. Like there is like you, you know, the GDX has had a great uh whatever it is, three, four months, but it's had a horrible decade. Uh, so >> 15 years of bare market. >> Yeah. Yeah. Oh, sorry. 15 years. So these like if you've been a gold miner, you've had zero access to capital like so you know there's zero capacity coming in. So >> so yeah, sure. Uh so sure the Fed could do a rugpool. Uh then again the Fed could do 50 basis points. Um and I don't know and you don't know and we'll see. But the Fed could do a rugpool and yes you may want to take some profits today but again it's the gold is in a bull market. Precious metals in general are in a bull market. GDX is in a bull market. In a bull market, you're either long or you're on the side watching it. You definitely don't short. Um, so today, you know, these things are in a bull market and so yeah, you can take profits, but I I still think in a year, three or five years will be high. >> Absolutely. No, fantastic, Lou. Awesome. Last words. I think that's what we all wanted to hear. You know, we need some confidence going into this tomorrow and uh this interview will actually come out here today on Tuesday as we're recording this, Lou. So, really appreciate your insights. Always fantastic to catch up with you. We could chat for hours. Like I I love your insights here. Um Lou, where can we send our audience to follow more of your work? >> Yeah, the easiest is is our website. Uh so gaffcal.com gavvk. I also happen to be on on Twitter at gav Vincent which is my my middle name. Um but I don't post very much. The best place is uh is to go to gaffcal. >> Fantastic. Awesome. Louie, thank you so much for joining us. It was a great pleasure to have you back on. And uh everybody else, thanks so much for tuning in to sore financially. How are you playing the Fed meeting tomorrow? And what do you make of the US China trade talks? Is it all over already? And this is just a face- saving mission for both sides. Really curious what you think. Put it in the comments down below and let us know how are you behaving in the mining space right now. Are you buying? Are you selling? Are you holding going into the Fed meeting? Really curious your thoughts. Thanks so much for tuning in. Don't forget to hit that like and subscribe button. It helps us out tremendously reaching a wider audience and we much much appreciate it. Thank you so much for tuning in. We'll be back with lots more. Stay safe out there. [Music]