Transcript

Hello, this is our market alert video for the week ended May 27, 2022. And I am traveling on a business trip. And so, if I move around or do something weird, you’ll notice that this is in fact, a virtual background. Behind me is a hotel room, if not pretty, I thought this would be better.

So, let’s talk about what we see going on right now. And one of the things that we’re very concerned about is that there’s a complacency going on, in our view, with investors right now. And this feels very much like the summer of 2008. And as you guys may know, if you’ve followed us for a while, that in November of 2007, our invest and protect strategy told us to sell all of our equities, and to stay out, actually, until June of 2009. So, almost a year and a half, we were counseling our clients and viewers of our videos and radio show and listeners to our radio show to be out of equities for almost a year and a half there. And this feels very much the same.

And I want to explain that by reminding you of the movie Titanic. So hopefully you saw that movie, so you’ll get this reference. But in the movie, what happened was that they hit the iceberg, right? The Titanic did. And it was a sudden shudder and that woke everybody up. They went on deck, they looked around and there was like, Yeah, I couldn’t see anything, nothing to worry about. Everybody go back to bed. And so, everybody went back to bed, and it was all fine. Well, the guy that designed the Titanic was this, this Irish or Scottish guy? He said, he said to the captain and others, we need to have an emergency meeting. And they were like, why? And he goes because we have a problem. And so, he pulls out the schematic of the ship, and he says see all these air tanks. That’s what keeps the Titanic afloat. They’re all connected. And see the hole in the ship that we have right now. It’s filling up with water, it’s going to spill over and it’s going to fill all the air tanks and the Titanic will sink. And they looked at him like Oh, my. What? The Titanic, the unsinkable Titanic is going to sink? And he said, yes, she is going to sink. And so, what does this have to do with and so then what happened was that, you know, the people who are in the know, they all got off the ship, right? But the other people who weren’t in the know, they were still on the ship. And then eventually they realized the thing was going to sink. And that’s why everybody was jumping off the ship. And it was mass panic and all of that.

So, what does that have to do with 2008? Well, in November 2007, we felt that shudder. Our strategy is designed to help us to feel that shudder that first moment, when it’s really, you know, we hit the iceberg, if you will. And so, by the summer of 2008, though, what happened was that it kind of felt like this whole subprime thing was like, not really anything to worry about, the Fed was telling us, you know, subprime is a small percentage of the total real estate market, you know, it’s only 2%. So don’t worry about it, everything’s going to be fine. We got it under control. Well, eventually, what happened was, we started seeing the big banks like Lehman start to experience financial difficulties. And that’s when everybody realized, oh, my gosh, this is way worse than we at first thought. And then the mass panic came, and we saw the big collapse of the market in late 2008, early 2009. So, this feels a lot like that right now, where we had the shudder, we had the big down, big scare. And now it’s like, well, you know, the war in Ukraine, we’re kind of used to that the feds going to raise interest rates, we know that inflation. Yeah, we know about inflation. So, it’s like, it’s okay, so we’re starting to see people go back in and buying in, we think this is a very dangerous period right now. So let me go over with you what the dangers we see are, number one is consumer debt is increasing rapidly. And why do we think that’s happening? Well, because the consumer got used to having all that stimulus money and very low inflation that financed the nice lifestyle. Well, now what’s happened is that the money that they had from the stimulus is starting to run out, prices have gone way up for stuff that they want to keep their lifestyle. So, what are they doing? They putting it on credit cards, and they’re borrowing? So, consumer debt is increasing. The other thing that we see is $6 gas at the pump. And why do we see that? One of the largest consumers of energy in the world has been dormant. Do you know who that is? It’s China. China has shut down their economy because of COVID. So now, they’re talking about opening their economy back up. Now if they start opening that up, all those factories, all that consumption, there’s not more oil in the world, and we could see prices skyrocket up to $125 or $150 a barrel. Now, you may say, well, they’ll buy it from Russia, but do they really want to with all the sanctions that are on Russia, if they do that they’re risking being sanctioned themselves. So that’s going to be an interesting decision for them to have to make.

Now, the other thing also that is concerning is that there’s a big meeting that they have every year in Davos, Switzerland, where the top leaders of the world go. And, all the major economist, the big banks, all of those people go, and they all talk about, you know, what’s going to come in the world of economics going forward. Do you know what the number one topic this year has been? Global famine. Global famine. Why? Well, because Russia and Ukraine are two of the largest producers of wheat in the world. And of course, right now with the war, they’re offline. But there’s a third. One of the largest producers of wheat in the world that is now also offline. And that’s India, India is experiencing a massive heatwave. And because of that, they’re not able to grow their wheat like they normally can. And so, what they’ve said is, they’re not going to export very much, because they want to keep it for their own people so they can feed their own people. So, you have 40-50% of the world’s wheat supply offline. And that could cause starvation in many of the smaller and emerging countries. And when you have that you have unrest, you have riots, you have political turnover, all kinds of stuff like that. So, this is a very, very risky time.

If you’re still in the market right now. I can encourage you strongly to visit strongly enough to come visit with one of our retirement planners, we want to sit down with you go over how you’re invested, what your goals are, what your plans are, help you to build a retirement cash flow plan, we call it an RCFP. We want to look at the inflation effect on your cost of living the potential for the Dow going to 25,000, which we think is a very real possibility. And what does that mean to you? And how can we help protect your retirement? But we can’t do it unless you reach out to us. So, our website is rpoa.com We’ll visit with you no charge or obligation, if we can help you fantastic. And if not, that’s fine too. Either way we will part friends. So, take advantage of that, go to our website rpoa.com. And I will look forward to visiting with you and seeing if we can help you if that’s a good thing for us to do with you. So, we’ll hopefully see you then.

Thank you for watching this video. You’re welcome to share it with as many people as you wish. In fact, I encourage you to we want to help as many people have a secure retirement, a second childhood without parental supervision, have peace of mind as we possibly can. So again, thanks for watching this video and we’ll talk soon