Here's The Latest Outlook From Lacy Hunt, Lyn Alden, James Grant + A Dozen Other Experts
Summary
Economic Outlook: Lacy Hunt highlighted a "perfect storm" of trends hampering economic growth, predicting a recession next year due to factors like deflationary pressures from AI and Federal Reserve monetary restraint.
Market Environment: Stephanie Pomboy and Grant Williams expressed concerns about the current market environment being particularly challenging for long-term investors, emphasizing the risks of high budget deficits and liquidity drying up.
Liquidity and Asset Allocation: Michael How discussed the drying up of liquidity that previously supported GDP growth and market returns, while Darius Stale offered a more optimistic view, expecting economic growth to accelerate next year due to fiscal and monetary easing.
Technical Analysis: Sven Henrik noted that despite some downside risks, technical indicators currently favor a bullish market trend towards the end of the year.
Precious Metals: Andy Shechman argued that mainstream financial institutions are now recommending increased gold allocations, suggesting a shift in traditional bond investment strategies.
Credit Cycle and Defaults: James Grant and Danielle D. Martino Booth warned of an increase in defaults and potential recession, highlighting issues in the credit market and the rise of "cockroach companies" defaulting on debt.
Sound Money Advocacy: Judy Shelton made a compelling case for sound money, criticizing the Federal Reserve's inflation targets and advocating for a stable monetary foundation to support free trade.
Investment Opportunities: Craig Wishner emphasized the advantages of investing in farmland, citing government support and consistent returns, while David Haye suggested interest-yielding assets as alternatives to traditional bonds.
Transcript
[Music] Welcome to Thoughtful Money. I'm its founder and your host, Adam Tagert. Well, Thoughtful Money's fall online conference was held this past weekend, and I'm delighted to say the event was a real success that was due primarily to the amazing lineup of speakers who presented and then took live audience Q&A throughout the insightpacked 11hour day. For those of you who didn't attend, I thought you'd enjoy hearing some of the conference highlights. Now, the day started with Lacy Hunt, former senior economist to the Federal Reserve, explaining how a perfect storm of converging trends is hampering economic growth, making a recession next year hard to avoid. Paris. Uh the combined effects of falling capacity utilization domestically and globally. The inherently deflationary n nature of artificial intelligence. uh the determined program of monetary restraint by the Federal Reserve and the liquidity draining effects of higher tariffs suggest to me that uh the economic outlook will be very challenging and that these headwinds will impede economic growth through this year into 2026 and and longer unless the policy uh the policy variables change in a very critical way. >> Stephanie Pomboy and Grant Williams then gave their macro outlooks, remarking that over their careers, they find today's environment a very scary one for long-term investors. >> Oh, I I I I mean, I honestly don't know. Maybe they're right. Maybe they're right. And and you know, as Chuck Prince said, you got to keep dancing while the music's playing and all that kind of stuff. But um if you're in any way forwardlooking and you're trying to prepare yourself for what's coming rather than, you know, invest for the here and now, um you have to be taking this stuff seriously. You have to be because you you you you the liabilities that you're looking at here um just don't work out. They just they just don't. And and to your point, if you end up with a, you know, let's say we split the difference between the six and the 9%. >> Right. >> You end up with a 13 and a half percent budget deficit. And the CBO is already forecasting out to 2030, I think, that six is as good as it's going to get. It's more likely going to be 7 8%. >> I mean, I I I don't know what to to say. I mean, yes, you can hold your nose and yes, you can you can dabble around in markets and there are plenty of things that you can play with to make a bit of money, but if you're actually investing capital for the long term, and that's really what we're talking here, because you if you want to speculate, you can speculate in anything, any day, at any hour. If you're trying to invest capital for the long term, this is a really, really scary environment to try and do that. Grant and Stephanie were followed up by Michael How, who showed how the liquidity that bolstered the impressive GDP growth and doubledigit market returns of the past three years is now swiftly drying up >> here. What it says is that that cycle bottomed in October of 2022. Uh it is slated to peak as you rightly say on the sine wave uh sometime around late uh 2025 early 26. You can see the beginnings of inflection in the latest data and the large or the major reason why you saw an inflection in the September data uh comes back to what the Federal Reserve was doing or uh what we should say is what the Federal Reserve is not doing uh in other words injecting more liquidity. The Fed seems to have stepped back uh from the process. Now what does this mean in terms of uh in terms of asset allocation? Uh let me see if I can uh show that. Darius Stale offered a countering view, the most optimistic market outlook of the day, expecting tailwinds to start helping the economy grow faster next year. That said, he did note that his model is starting to issue some warning signs in the very near term. >> So, in terms of answering the question, uh, still incredibly bullish. uh you know we authored our paradigm C theme back in April which is in shorthand that's just the government's choice to outgrow the debt and deficit trajectory with the choice of growth family policies um you know on the on the the large scale fiscal easing coming down the pike there in our opinion there's likely to be large scale monetary easing coming down the pike in our opinion there's likely to be substantial deregulation both within and external from the financial sector coming down the pike and so we've had the ability based on this fundamental framework to help our clients and our global investor community, you know, essentially put on ear muffs throughout, you know, since the early spring and all the way up until now when they hear the word tariff, which in my opinion has, you know, caused a lot of investors to substantially underperform the market this year. Next, technical analyst Sven Henrik walked us through his latest charts, noting that the bears have a lot of work to do if they want a change in trend. So in the near term, expect the odds to favor the bulls for an endofear rally. And >> this is why I want to talk about the control pivots and some of the risk factors going into year end. First of all, the weekly 5A. Why is that so important? Because it's been the steady support pivot in this market since the April lows. You know, we recaptured it here and ever since it's been on a steady train of defending it. There was a down day here at the end of Jul uh July. Uh that presented a close for one day below the weekly 5 EMA and then it took it higher the next the following week for an inside week. And guess what? We kind of had this here now too. The Friday dump last week below the weekly 5 EMA and then guess what? Back up right via tweet and save today again. So on that basis, I would argue bears got nothing, folks. Uh because you need to see some sort of weekly close below the weekly 5 EMA that actually sticks, right? And so far it hasn't stuck. Doesn't mean there's still not downside risk, but I'm just noting from a technical perspective on that level, bulls remain in control. After that, Andy Shechman argued why this time is different for the precious metals because mainstream Wall Street brands are now recommending their clients move a material percentage of their bond allocation into gold. >> Look, you know, beware of the guy who says this time is different. But it is different. And I'm going to give you just a couple of examples. And I may have mentioned this to you the other day when we chatted and I'm not sure, but I'll give you three or four examples that this time is different. Number one, you got the the chief investment officer of Morgan Stanley who said no more 6040 allocation. 60 stock, 40 bonds. He's saying sell 20% of your bonds and replace it with gold. 60 2020 20art. >> Huh. That's amazing. >> 20. Oh, it gets even better. Michael Hartnett, the the analyst for Bank of America, who charges many thousands of dollars for his annual letter. Remember the people that I'm going to mention here, whether it be the chief investment officer of Morgan Stanley, Michael Hartnett, the chief investment officer of Jeff or or Jeffrey Dunlock in a moment. These people don't speak to the plebs. These people are speaking to their institutional clients, the big big big money traders. So, we got Morgan Stanley who says 20% stock, excuse me, 20% bond, 20% gold, 60 stock from 6040. You got Michael Hartnett says no, no, no, no. He's on Bank of America. He says it's 25 25 25% stock 25% bond 25% short-term treasury paper 25% gold. You have Jeff the head of Jeff. Now Jeff means a lot to me because credential beige um was one of the primary US mint distributors for many years and distributors for all the major mints of the world. They nominated Miles Franklin about 20 years ago to be one of the 27 authorized resellers for the United States Mint. An honor I'm supremely proud of. Beige uh Predential Beige stole the Jeffre. Jeff was one of the US Mint and all of the six major mint primary distributors for years. They understand gold. They subsequently closed down their gold division. They're not a primary distributor anymore, but yet they understand gold. They're saying that their next target for gold is $6600. You have Jeffrey Gunlock, probably the biggest of them all, the bond king. Jeffrey Gunlock is a man that made his his mark in in selling bonds obviously. And he just came out and said that the perfect portfolio he called would be given a 25% allocation to gold. This is the bond king who was saying sell 25% of your bonds and replace it with gold. Um and then you have Goldman Sachs and Goldman Sachs came out and said listen if the market even for a moment believes that the Federal Reserve has lost independence he'll see $5,000 gold in the blink of an eye. >> Following next was interest rate guru James Grant who sees us entering the painful end stage of the current credit cycle. I I I think that uh we're we have entered into the uh that portion of the credit cycle in which defaults become more frequent and um and uh hidden defaults become likewise more by hidden defaults I mean uh defaults in all but name and there's plenty of that going around. You can extend as they say and pretend. You can extend and amend amend such documents as uh were attached to the loan transaction and um on past form necessarily dispositive for the future. uh but on past form uh this is the beginning of the end of the cycle which will result in the crimination uh congressional hearings and um and most fervent promises to the almighty that if we ever get here again I will never do what I have just done. >> And then Danielle D. Martino Booth spoke of the fast multiplying number of cockroach companies defaulting on their debt and why this likely precages serious problems in the credit market and possibly a recession next year. >> Well, you know, you're starting to hear from other companies that you've never heard of that they're also securitizing their accounts receivable. Um, you get an announcement on any given day. Oh, gee, Western Alliance. Oh, you know what? Oh, there there's a hund00 million uh loan. Oh, that looks like it's tied to fraud. Oh, wait. Zion's Bank is tied to the same fraud, but just 50 million. And again, that's um that's the idea of cockroaches. And to answer your question, idiosyncrasy systemic, I I go back to my rhetorical question as to why now? Why are we seeing these frauds pop up? Did the fraud occur overnight? Or was it more a reflection of the fact that there was so much money out there that until the macroeconomy forces the microeconomy to reveal itself because you wouldn't see it if delinquencies weren't as high as they are. >> They are. >> They are. And this second fraud is related to commercial real estate. Oh, wait. That's a different tentacle. That's not That's not an air filter. Um that's not a subprime car loan. So this is when things start to spread. And again, long and variable lags higher for longer. And you know, to to all of the naysayers who are saying, "But the biggest banks have just decreased their loan loss provisions, Danielle, this is telling you something. They see a brighter future over the horizon." Um well, yeah, loan loss revisions, decreasing them certainly helps pump up your earnings and um it it helps your tier one capital, but then why of all individuals, of all banks, did JP Morgan increase their loan loss provisions by 810 million specifically tied to future anticipated losses in their credit card loan book as the bank is talking about rising joblessness. >> Judy Shelton then brought down the House with the best constitutional and moral argument for sound money that I've ever heard. >> Well, I would just say um after the 2008 global financial meltdown um you really spawned a lot of um oh people feeling cynical that the that the game was rigged against them. You had a you had a meeting of the minds that brought in the Occupy Wall Street movement with the Tea Party movement and just this idea that government is supposed to carry out basic functions that I think include if you constitutionally look at it include the right to to sound money. Um it's it it it's in it's in the constitution article 1 section 8 in the same sentence as congress is empowered to uh define official standards of weights and measures because money was always meant to be a standard to to be an official measure of value and that implies an unvarying measure and certainly Thomas Jefferson thought that he wanted the dollar to be a universal money unit of account. And that's why he he decided in his notes on the establishment money unit for the United States, it's about a 17page essay. You can see it at the Library of Congress. Um he he said that the money really has to work for the average person. It should not work for the financeers. It should be familiar. It should facilitate daily transactions. it should establish a common currency across the 13 former individual colonies and and he really thought that it was wrapped up in our national culture. So I think that almost implies a a moral obligation of of the US government since it does impose legal tender laws to provide a a money that's dependable. I I think it's a form of chiseling even for the Fed to deliberately target 2% inflation. I mean after 10 years that's a percent uh devaluation which I would call an expropriation. if what if you had just saved your money all that time and I remember once um Ben Bernani when he was Fed share someone posed that to him and they said well what if you just want to put your money under the mattress you're you're you don't feel sophisticated enough to invest it and he just he treated that as well if you're that provincial almost you you deserve to lose money every year and I just I think that's a wrong attitude I believe that people's savings really underscore as a cultural value And certainly one that's a virtue in capitalism, which is saying, "I'm willing to save. I'm willing to save now and use my savings as seed money to to finance a greater harvest in the future." And that's how you improve standards of living for all of society. And that's that's real. And uh because I if it's used productively to actually as I say I keep going back to I love people who make things or people who provide services. I like the emphasis on manufacturing and keeping it real. There's just been too much um getting the brightest minds to be the quants who outsmart with algorithms um and the option pricing model what's going on in in credit derivatives and currencies and and just the foreign foreign exchange market is just a speculators paradise and I blame governments for not having coherent international monetary arrangements so that you would have a level monetary playing field which is the only reasonable foundation for free trade. If you can cheat by depreciating your currency, it just it's so unfair to people who are trying to create something the the the best quality at the lowest price. That's the essence of how free markets work. But if you then change the terms of trade by underpricing them because you've manipulated your currency, it it completely violates all of the logic of free trade. So, so I really think we have to think through these things and really seek a stable foundation for international trade and I think it can start at home in in helping people to believe that they can trust their own money and when the Fed's mandate is stable prices. The original legislation defined that as zero% inflation. Global strategist Michael Evy followed Judy, giving an update on the new age of neo mercantalism now driving the dynamics between the US and the rest of the world. China is still playing its cards extremely well. It hasn't really played a bad hand for quite some time. Um, the US is playing relatively better, but as I said, after having played so appallingly badly for so long that it's just no longer in the commanding position it was in. Um and in some cases you could say it really looks like a draw on some fronts at the moment where there's a you know a mutual balance of power and mutual balance of terror in different areas between the two but that as I said a draw effectively is a loss for the US in the long term because China continues to do better um in the areas that matter most in some respects and so therefore that increases the the urge for the US to think okay let's do something a little bit outside the traditional box As I said, visav the likes of Venezuela, etc. Those are the risks, not a forecast, but the risks. >> Income investor David Haye came next explaining the challenges facing traditional bond investors and suggesting several interest yielding assets that appear attractive to him right now. >> And I think, you know, if we were to use a bit of a template for where we went through what I think is a similar period uh was the 1970s. And that was obviously a very tough time to be a bond market investor. But you know there were ways to to cope with that situation which we'll look at here in a moment with a specific corporate issue. But I do think there are a number of parallels and one of the most obvious is what's happening in terms of the Trump administration's pressure on the Fed. And as you know but a lot of people may not be aware. This is not new. This happened you know back in the early 1970s. actually happened in the 60s under LBJ, but Nixon is kind of the famous one where he pressured Arthur Burns to cut interest rates as we were getting an inflationary surge in the early 1970s. So, the Fed eased prematurely back then and frankly, I think they're doing so again. But there were powerful bond rallies during the 1970s and I think there will be again there will be rallies. But I would say much like the 1970s, these rallies are probably to be rented. excuse me, not to be owned. >> Then Lynn Alden, one of the top experts in the world on Bitcoin, gave a deep dive into understanding Bitcoin targeted to the investor who does not yet own any of it. >> Um, so I I you know, I first heard about Bitcoin back in 2010 2011 around there. Uh, I've been uh professionally covering it uh with with articles since 2017. Uh and uh you know for those that don't know I um I I I'm a general partner at a venture fund that invests in in Bitcoin related startups. Um pretty tied into the ecosystem. Uh even some of the key developers that have um helped develop it or even kind of invented proof of work that it runs on. Uh so I've been pretty tied into the space o over the past several years. Uh for me a handful of things drew me in. Uh one was um that basically in a world of inflationary currencies. Uh this is an interesting mechanism uh where you can run a ledger that is uh fairly decentralized uh meaning that you can send payments you can store value in such a way that there's no central um entity that can just block uh things or can debase things. Uh now a lot of people because it is a both a technical and an economic project a lot of people have misunderstandings uh either from things that they've heard or things that they've looked into a little bit. It is a uh something that takes a long time to kind of look into but I would say the main selling points of it are one uh yeah portable store value uh uh portable liquid store value I should say and then two a permissionless uh decentralized settlement and payment system. So, uh, the ability to send value to others across borders over the internet, uh, in such a way that is, uh, difficult to block. Following Lynn, housing analyst Melody Wright provided an update on the unfolding national correction in home prices, which she warns will really start to get ugly in 2026. I recall you saying really catching my attention and saying, "Hey, look, yes, I'm concerned about where has housing's headed, but I fear that this may be heading to a place that might actually be worse than what happened during the g global financial crisis. Um, everybody remembers the bursting of the concurrent bursting of the housing bubble 1.0 during that period of time. Um, so that was a big wakeup call for me. How do you feel about the housing market now? Now that we're six months later, as concerned, less concerned, or more concerned? >> I would say as concerned, if not more concerned. Um, having recently returned from Dallas, uh, where, you know, um, just the building has gone even more insane than what I saw on my trip last year. And so, um, I think that those that feel that we we can get rescued out of that situation, I would urge them to come with me on one of these trips and stand in the middle of one of these colossal developments where likely no one's ever going to live. Um, so I would say as concerned or even a little more concerned, Adam, >> last in the lineup was Craig Wishner, who explained the many advantages of investing in farmland as an asset class. uh so about 4 trillion in assets. So uh gross revenues uh to the market sector continue to grow. It's a little over $600 billion uh today per year. Uh and uh and income uh is uh is pretty strong just under $200 billion a year. Uh there is good support. One of the nice things about farmland uh is that you do have essentially government support uh on this. you have crop insurance. Uh you have uh in case there's disasters. Uh they they can declare states of emergency and they give more money to farmers. Uh if there's too much crops grown, then they have the commodity credit corporation which comes in and buys a whole bunch of stuff for government cheese. That's the government buying excess milk basically and turning it into cheese. So um and as land owners uh rent is a reimburseable expense from our tenant farmers. So we basically have governmentinssured rent uh on uh for our farmland and um I don't have that in my apartment buildings. So that's a nice uh addition for us [Music] rents. So, so about 11 uh farmland over the past 85 years has delivered around 11% annualized returns unlevered uh about half from cash flow uh and half from appreciation. Uh and you see from these numbers here uh that the values are consistently appreciating over time uh and the uh the rents uh are also increasing over time. The day then ended with an hour-ong ask Anything with thoughtful Money's crew of endorsed financial adviserss. All in all, the conference was over 11 hours long and delivered a wealth of actionable insights. But don't take my word for it. Here's feedback submitted at the end of the day by the conference attendees themselves. Excellent job. Well worth the small fee. Keep up the good work. Absolutely terrific conference, Adam. Best yet. Judy won the day for me, but an all-star faculty, too. Thank you. Great conference, Adam. I'm 58 and was recently laid off. So, this conference was great to develop a financial strategy. Now, if you're wishing you attended the conference, but for some reason didn't, don't worry. You can purchase the replay of the entire event, all the presentations, and all the live Q&A sessions simply by going to thoughtfulmoney.com/conference. And despite inflation having raged over the past two years, we haven't changed the pricing in our conference for a long while. While I'm not certain yet if the price will rise for our spring conference, I'm giving you the option to buy your ticket for it now at 0% inflation. That is at the same price as the one we just did. If you'd like to lock in your ticket now, you can buy it at the early bird price, our lowest, and with no inflation from this year, by going to thoughtfulmoney.com/2026. All right. And now that the conference is over, I'm hard at work on a number of upcoming interviews I think you're really going to like. Given that it's an FOMC release month, I'll be doing my usual reaction video with Axel MK to next week's announcement by the Federal Reserve. And in addition to that, I've got interviews over the coming weeks releasing with Peter Turchin, John Thorndike of GMO, Jeffrey Saxs, Michael Pinto, David Rosenberg, Katie Stockton, Mike Green, and Peter Chur. You're going to find these interviews highly interesting and I hope highly valuable as well. See you all then and thanks so much for watching.
Here's The Latest Outlook From Lacy Hunt, Lyn Alden, James Grant + A Dozen Other Experts
Summary
Transcript
[Music] Welcome to Thoughtful Money. I'm its founder and your host, Adam Tagert. Well, Thoughtful Money's fall online conference was held this past weekend, and I'm delighted to say the event was a real success that was due primarily to the amazing lineup of speakers who presented and then took live audience Q&A throughout the insightpacked 11hour day. For those of you who didn't attend, I thought you'd enjoy hearing some of the conference highlights. Now, the day started with Lacy Hunt, former senior economist to the Federal Reserve, explaining how a perfect storm of converging trends is hampering economic growth, making a recession next year hard to avoid. Paris. Uh the combined effects of falling capacity utilization domestically and globally. The inherently deflationary n nature of artificial intelligence. uh the determined program of monetary restraint by the Federal Reserve and the liquidity draining effects of higher tariffs suggest to me that uh the economic outlook will be very challenging and that these headwinds will impede economic growth through this year into 2026 and and longer unless the policy uh the policy variables change in a very critical way. >> Stephanie Pomboy and Grant Williams then gave their macro outlooks, remarking that over their careers, they find today's environment a very scary one for long-term investors. >> Oh, I I I I mean, I honestly don't know. Maybe they're right. Maybe they're right. And and you know, as Chuck Prince said, you got to keep dancing while the music's playing and all that kind of stuff. But um if you're in any way forwardlooking and you're trying to prepare yourself for what's coming rather than, you know, invest for the here and now, um you have to be taking this stuff seriously. You have to be because you you you you the liabilities that you're looking at here um just don't work out. They just they just don't. And and to your point, if you end up with a, you know, let's say we split the difference between the six and the 9%. >> Right. >> You end up with a 13 and a half percent budget deficit. And the CBO is already forecasting out to 2030, I think, that six is as good as it's going to get. It's more likely going to be 7 8%. >> I mean, I I I don't know what to to say. I mean, yes, you can hold your nose and yes, you can you can dabble around in markets and there are plenty of things that you can play with to make a bit of money, but if you're actually investing capital for the long term, and that's really what we're talking here, because you if you want to speculate, you can speculate in anything, any day, at any hour. If you're trying to invest capital for the long term, this is a really, really scary environment to try and do that. Grant and Stephanie were followed up by Michael How, who showed how the liquidity that bolstered the impressive GDP growth and doubledigit market returns of the past three years is now swiftly drying up >> here. What it says is that that cycle bottomed in October of 2022. Uh it is slated to peak as you rightly say on the sine wave uh sometime around late uh 2025 early 26. You can see the beginnings of inflection in the latest data and the large or the major reason why you saw an inflection in the September data uh comes back to what the Federal Reserve was doing or uh what we should say is what the Federal Reserve is not doing uh in other words injecting more liquidity. The Fed seems to have stepped back uh from the process. Now what does this mean in terms of uh in terms of asset allocation? Uh let me see if I can uh show that. Darius Stale offered a countering view, the most optimistic market outlook of the day, expecting tailwinds to start helping the economy grow faster next year. That said, he did note that his model is starting to issue some warning signs in the very near term. >> So, in terms of answering the question, uh, still incredibly bullish. uh you know we authored our paradigm C theme back in April which is in shorthand that's just the government's choice to outgrow the debt and deficit trajectory with the choice of growth family policies um you know on the on the the large scale fiscal easing coming down the pike there in our opinion there's likely to be large scale monetary easing coming down the pike in our opinion there's likely to be substantial deregulation both within and external from the financial sector coming down the pike and so we've had the ability based on this fundamental framework to help our clients and our global investor community, you know, essentially put on ear muffs throughout, you know, since the early spring and all the way up until now when they hear the word tariff, which in my opinion has, you know, caused a lot of investors to substantially underperform the market this year. Next, technical analyst Sven Henrik walked us through his latest charts, noting that the bears have a lot of work to do if they want a change in trend. So in the near term, expect the odds to favor the bulls for an endofear rally. And >> this is why I want to talk about the control pivots and some of the risk factors going into year end. First of all, the weekly 5A. Why is that so important? Because it's been the steady support pivot in this market since the April lows. You know, we recaptured it here and ever since it's been on a steady train of defending it. There was a down day here at the end of Jul uh July. Uh that presented a close for one day below the weekly 5 EMA and then it took it higher the next the following week for an inside week. And guess what? We kind of had this here now too. The Friday dump last week below the weekly 5 EMA and then guess what? Back up right via tweet and save today again. So on that basis, I would argue bears got nothing, folks. Uh because you need to see some sort of weekly close below the weekly 5 EMA that actually sticks, right? And so far it hasn't stuck. Doesn't mean there's still not downside risk, but I'm just noting from a technical perspective on that level, bulls remain in control. After that, Andy Shechman argued why this time is different for the precious metals because mainstream Wall Street brands are now recommending their clients move a material percentage of their bond allocation into gold. >> Look, you know, beware of the guy who says this time is different. But it is different. And I'm going to give you just a couple of examples. And I may have mentioned this to you the other day when we chatted and I'm not sure, but I'll give you three or four examples that this time is different. Number one, you got the the chief investment officer of Morgan Stanley who said no more 6040 allocation. 60 stock, 40 bonds. He's saying sell 20% of your bonds and replace it with gold. 60 2020 20art. >> Huh. That's amazing. >> 20. Oh, it gets even better. Michael Hartnett, the the analyst for Bank of America, who charges many thousands of dollars for his annual letter. Remember the people that I'm going to mention here, whether it be the chief investment officer of Morgan Stanley, Michael Hartnett, the chief investment officer of Jeff or or Jeffrey Dunlock in a moment. These people don't speak to the plebs. These people are speaking to their institutional clients, the big big big money traders. So, we got Morgan Stanley who says 20% stock, excuse me, 20% bond, 20% gold, 60 stock from 6040. You got Michael Hartnett says no, no, no, no. He's on Bank of America. He says it's 25 25 25% stock 25% bond 25% short-term treasury paper 25% gold. You have Jeff the head of Jeff. Now Jeff means a lot to me because credential beige um was one of the primary US mint distributors for many years and distributors for all the major mints of the world. They nominated Miles Franklin about 20 years ago to be one of the 27 authorized resellers for the United States Mint. An honor I'm supremely proud of. Beige uh Predential Beige stole the Jeffre. Jeff was one of the US Mint and all of the six major mint primary distributors for years. They understand gold. They subsequently closed down their gold division. They're not a primary distributor anymore, but yet they understand gold. They're saying that their next target for gold is $6600. You have Jeffrey Gunlock, probably the biggest of them all, the bond king. Jeffrey Gunlock is a man that made his his mark in in selling bonds obviously. And he just came out and said that the perfect portfolio he called would be given a 25% allocation to gold. This is the bond king who was saying sell 25% of your bonds and replace it with gold. Um and then you have Goldman Sachs and Goldman Sachs came out and said listen if the market even for a moment believes that the Federal Reserve has lost independence he'll see $5,000 gold in the blink of an eye. >> Following next was interest rate guru James Grant who sees us entering the painful end stage of the current credit cycle. I I I think that uh we're we have entered into the uh that portion of the credit cycle in which defaults become more frequent and um and uh hidden defaults become likewise more by hidden defaults I mean uh defaults in all but name and there's plenty of that going around. You can extend as they say and pretend. You can extend and amend amend such documents as uh were attached to the loan transaction and um on past form necessarily dispositive for the future. uh but on past form uh this is the beginning of the end of the cycle which will result in the crimination uh congressional hearings and um and most fervent promises to the almighty that if we ever get here again I will never do what I have just done. >> And then Danielle D. Martino Booth spoke of the fast multiplying number of cockroach companies defaulting on their debt and why this likely precages serious problems in the credit market and possibly a recession next year. >> Well, you know, you're starting to hear from other companies that you've never heard of that they're also securitizing their accounts receivable. Um, you get an announcement on any given day. Oh, gee, Western Alliance. Oh, you know what? Oh, there there's a hund00 million uh loan. Oh, that looks like it's tied to fraud. Oh, wait. Zion's Bank is tied to the same fraud, but just 50 million. And again, that's um that's the idea of cockroaches. And to answer your question, idiosyncrasy systemic, I I go back to my rhetorical question as to why now? Why are we seeing these frauds pop up? Did the fraud occur overnight? Or was it more a reflection of the fact that there was so much money out there that until the macroeconomy forces the microeconomy to reveal itself because you wouldn't see it if delinquencies weren't as high as they are. >> They are. >> They are. And this second fraud is related to commercial real estate. Oh, wait. That's a different tentacle. That's not That's not an air filter. Um that's not a subprime car loan. So this is when things start to spread. And again, long and variable lags higher for longer. And you know, to to all of the naysayers who are saying, "But the biggest banks have just decreased their loan loss provisions, Danielle, this is telling you something. They see a brighter future over the horizon." Um well, yeah, loan loss revisions, decreasing them certainly helps pump up your earnings and um it it helps your tier one capital, but then why of all individuals, of all banks, did JP Morgan increase their loan loss provisions by 810 million specifically tied to future anticipated losses in their credit card loan book as the bank is talking about rising joblessness. >> Judy Shelton then brought down the House with the best constitutional and moral argument for sound money that I've ever heard. >> Well, I would just say um after the 2008 global financial meltdown um you really spawned a lot of um oh people feeling cynical that the that the game was rigged against them. You had a you had a meeting of the minds that brought in the Occupy Wall Street movement with the Tea Party movement and just this idea that government is supposed to carry out basic functions that I think include if you constitutionally look at it include the right to to sound money. Um it's it it it's in it's in the constitution article 1 section 8 in the same sentence as congress is empowered to uh define official standards of weights and measures because money was always meant to be a standard to to be an official measure of value and that implies an unvarying measure and certainly Thomas Jefferson thought that he wanted the dollar to be a universal money unit of account. And that's why he he decided in his notes on the establishment money unit for the United States, it's about a 17page essay. You can see it at the Library of Congress. Um he he said that the money really has to work for the average person. It should not work for the financeers. It should be familiar. It should facilitate daily transactions. it should establish a common currency across the 13 former individual colonies and and he really thought that it was wrapped up in our national culture. So I think that almost implies a a moral obligation of of the US government since it does impose legal tender laws to provide a a money that's dependable. I I think it's a form of chiseling even for the Fed to deliberately target 2% inflation. I mean after 10 years that's a percent uh devaluation which I would call an expropriation. if what if you had just saved your money all that time and I remember once um Ben Bernani when he was Fed share someone posed that to him and they said well what if you just want to put your money under the mattress you're you're you don't feel sophisticated enough to invest it and he just he treated that as well if you're that provincial almost you you deserve to lose money every year and I just I think that's a wrong attitude I believe that people's savings really underscore as a cultural value And certainly one that's a virtue in capitalism, which is saying, "I'm willing to save. I'm willing to save now and use my savings as seed money to to finance a greater harvest in the future." And that's how you improve standards of living for all of society. And that's that's real. And uh because I if it's used productively to actually as I say I keep going back to I love people who make things or people who provide services. I like the emphasis on manufacturing and keeping it real. There's just been too much um getting the brightest minds to be the quants who outsmart with algorithms um and the option pricing model what's going on in in credit derivatives and currencies and and just the foreign foreign exchange market is just a speculators paradise and I blame governments for not having coherent international monetary arrangements so that you would have a level monetary playing field which is the only reasonable foundation for free trade. If you can cheat by depreciating your currency, it just it's so unfair to people who are trying to create something the the the best quality at the lowest price. That's the essence of how free markets work. But if you then change the terms of trade by underpricing them because you've manipulated your currency, it it completely violates all of the logic of free trade. So, so I really think we have to think through these things and really seek a stable foundation for international trade and I think it can start at home in in helping people to believe that they can trust their own money and when the Fed's mandate is stable prices. The original legislation defined that as zero% inflation. Global strategist Michael Evy followed Judy, giving an update on the new age of neo mercantalism now driving the dynamics between the US and the rest of the world. China is still playing its cards extremely well. It hasn't really played a bad hand for quite some time. Um, the US is playing relatively better, but as I said, after having played so appallingly badly for so long that it's just no longer in the commanding position it was in. Um and in some cases you could say it really looks like a draw on some fronts at the moment where there's a you know a mutual balance of power and mutual balance of terror in different areas between the two but that as I said a draw effectively is a loss for the US in the long term because China continues to do better um in the areas that matter most in some respects and so therefore that increases the the urge for the US to think okay let's do something a little bit outside the traditional box As I said, visav the likes of Venezuela, etc. Those are the risks, not a forecast, but the risks. >> Income investor David Haye came next explaining the challenges facing traditional bond investors and suggesting several interest yielding assets that appear attractive to him right now. >> And I think, you know, if we were to use a bit of a template for where we went through what I think is a similar period uh was the 1970s. And that was obviously a very tough time to be a bond market investor. But you know there were ways to to cope with that situation which we'll look at here in a moment with a specific corporate issue. But I do think there are a number of parallels and one of the most obvious is what's happening in terms of the Trump administration's pressure on the Fed. And as you know but a lot of people may not be aware. This is not new. This happened you know back in the early 1970s. actually happened in the 60s under LBJ, but Nixon is kind of the famous one where he pressured Arthur Burns to cut interest rates as we were getting an inflationary surge in the early 1970s. So, the Fed eased prematurely back then and frankly, I think they're doing so again. But there were powerful bond rallies during the 1970s and I think there will be again there will be rallies. But I would say much like the 1970s, these rallies are probably to be rented. excuse me, not to be owned. >> Then Lynn Alden, one of the top experts in the world on Bitcoin, gave a deep dive into understanding Bitcoin targeted to the investor who does not yet own any of it. >> Um, so I I you know, I first heard about Bitcoin back in 2010 2011 around there. Uh, I've been uh professionally covering it uh with with articles since 2017. Uh and uh you know for those that don't know I um I I I'm a general partner at a venture fund that invests in in Bitcoin related startups. Um pretty tied into the ecosystem. Uh even some of the key developers that have um helped develop it or even kind of invented proof of work that it runs on. Uh so I've been pretty tied into the space o over the past several years. Uh for me a handful of things drew me in. Uh one was um that basically in a world of inflationary currencies. Uh this is an interesting mechanism uh where you can run a ledger that is uh fairly decentralized uh meaning that you can send payments you can store value in such a way that there's no central um entity that can just block uh things or can debase things. Uh now a lot of people because it is a both a technical and an economic project a lot of people have misunderstandings uh either from things that they've heard or things that they've looked into a little bit. It is a uh something that takes a long time to kind of look into but I would say the main selling points of it are one uh yeah portable store value uh uh portable liquid store value I should say and then two a permissionless uh decentralized settlement and payment system. So, uh, the ability to send value to others across borders over the internet, uh, in such a way that is, uh, difficult to block. Following Lynn, housing analyst Melody Wright provided an update on the unfolding national correction in home prices, which she warns will really start to get ugly in 2026. I recall you saying really catching my attention and saying, "Hey, look, yes, I'm concerned about where has housing's headed, but I fear that this may be heading to a place that might actually be worse than what happened during the g global financial crisis. Um, everybody remembers the bursting of the concurrent bursting of the housing bubble 1.0 during that period of time. Um, so that was a big wakeup call for me. How do you feel about the housing market now? Now that we're six months later, as concerned, less concerned, or more concerned? >> I would say as concerned, if not more concerned. Um, having recently returned from Dallas, uh, where, you know, um, just the building has gone even more insane than what I saw on my trip last year. And so, um, I think that those that feel that we we can get rescued out of that situation, I would urge them to come with me on one of these trips and stand in the middle of one of these colossal developments where likely no one's ever going to live. Um, so I would say as concerned or even a little more concerned, Adam, >> last in the lineup was Craig Wishner, who explained the many advantages of investing in farmland as an asset class. uh so about 4 trillion in assets. So uh gross revenues uh to the market sector continue to grow. It's a little over $600 billion uh today per year. Uh and uh and income uh is uh is pretty strong just under $200 billion a year. Uh there is good support. One of the nice things about farmland uh is that you do have essentially government support uh on this. you have crop insurance. Uh you have uh in case there's disasters. Uh they they can declare states of emergency and they give more money to farmers. Uh if there's too much crops grown, then they have the commodity credit corporation which comes in and buys a whole bunch of stuff for government cheese. That's the government buying excess milk basically and turning it into cheese. So um and as land owners uh rent is a reimburseable expense from our tenant farmers. So we basically have governmentinssured rent uh on uh for our farmland and um I don't have that in my apartment buildings. So that's a nice uh addition for us [Music] rents. So, so about 11 uh farmland over the past 85 years has delivered around 11% annualized returns unlevered uh about half from cash flow uh and half from appreciation. Uh and you see from these numbers here uh that the values are consistently appreciating over time uh and the uh the rents uh are also increasing over time. The day then ended with an hour-ong ask Anything with thoughtful Money's crew of endorsed financial adviserss. All in all, the conference was over 11 hours long and delivered a wealth of actionable insights. But don't take my word for it. Here's feedback submitted at the end of the day by the conference attendees themselves. Excellent job. Well worth the small fee. Keep up the good work. Absolutely terrific conference, Adam. Best yet. Judy won the day for me, but an all-star faculty, too. Thank you. Great conference, Adam. I'm 58 and was recently laid off. So, this conference was great to develop a financial strategy. Now, if you're wishing you attended the conference, but for some reason didn't, don't worry. You can purchase the replay of the entire event, all the presentations, and all the live Q&A sessions simply by going to thoughtfulmoney.com/conference. And despite inflation having raged over the past two years, we haven't changed the pricing in our conference for a long while. While I'm not certain yet if the price will rise for our spring conference, I'm giving you the option to buy your ticket for it now at 0% inflation. That is at the same price as the one we just did. If you'd like to lock in your ticket now, you can buy it at the early bird price, our lowest, and with no inflation from this year, by going to thoughtfulmoney.com/2026. All right. And now that the conference is over, I'm hard at work on a number of upcoming interviews I think you're really going to like. Given that it's an FOMC release month, I'll be doing my usual reaction video with Axel MK to next week's announcement by the Federal Reserve. And in addition to that, I've got interviews over the coming weeks releasing with Peter Turchin, John Thorndike of GMO, Jeffrey Saxs, Michael Pinto, David Rosenberg, Katie Stockton, Mike Green, and Peter Chur. You're going to find these interviews highly interesting and I hope highly valuable as well. See you all then and thanks so much for watching.