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Bill King: Everything Is Overvalued but Gold
September 22, 2021

“I mean, if you go look at historically what happens to politicians when the market goes down big, the incumbents lose, so they know they’ve got a problem, because the 2022’s coming up here. That’s why he’s better start talking taper and start doing it now. The Democrats will go out of their minds if he starts trying to reduce this summer and by then, if inflation’s out of control, they’re going to be mad at him anyway, and he’s going to take the hit anyway. So I think the best thing right now would be if Powell figured out that Biden’s not likely to renominate him, he does what’s right, not what’s politically correct.” — Bill King

Kevin: Welcome to The McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany. 

Well, about once a year, sometimes more than that, we try to talk to our friend Bill King. And you and I were talking, we have access to an awful lot of information. Dave, you’re reading all the time. You’re reading a lot of stuff that I don’t read, and that’s why this program has been so helpful. But King is different. If I could only read one thing a day, to be honest with you, Bill King wraps things up just about the way I need them to be wrapped up. And so I’m looking forward to today’s conversation with him.

David: Our experience defines us. And I think if you look at Bill King’s professional career, you can appreciate not only the sort of encyclopedic grasp of what the last 30, 40 years of financial market activity has been, because he is been there, day in and day out, but also the games that get played. And as a trader, he’s pragmatic enough to see that it’s not just the numbers that matter. It’s social trends, it’s policy choices, it’s the interaction of geopolitics and market pricing. Nothing is off limits when it comes to what can drive a price higher or lower.

Kevin: Well— and you love practitioners. You love practitioners because these are guys who get slapped when they do something wrong, and they get rewarded when they do something right. One of his favorite phrases is, “How’s that working out for you?” But I think he’s always asking himself that question all the time, and he’s got an amazing memory so he can bring that to his decision making and his recommendations.

David: Yeah, it’s an interesting world because you know I love theory, and you know I love philosophy, but there’s elegance when a theory is tested in real time. There’s a certain reality check when your P&L tells you if you’re right or wrong, regardless of how well you sketch things out. And if you don’t make a mid-course correction and manage risk, you may be doomed.

Kevin: Sometimes you have to swallow your pride to do that, too, don’t you?

David: It’s a healthy practice. And anybody who doesn’t practice it finds themselves no longer in the business. 

*     *     *

David: What’s on your mind? What are the key things that you think we got to cover, not just this week in snapshot, but the trends in play?

Bill: Well, this is going to be in my letter on my— This is what I was writing about, today’s action. Because this is one of those strange days where everything went down. And when I say that, it also means Forex so the dollar goes up. And then you got to ask, “Well, normally, what does that do?” And usually, if it’s an economic concern, bonds usually go up. But today, industrial commodities, you saw gold was down a little bit. All this stuff was going down in here. 

So part of this is probably China with this Evergrande that people are concerned it could be their Lehman moment. It could be the economic problems here. It could be United States leadership. It could be the debt ceiling theatrics that are going on. And then of course you got the Fed, FOMC meeting this week, which is— today, if you say what was going on, it could be the Fed taper thing here. And at first the people will sell bonds, but then they’ll buy them. We’ve seen that, if you look over time, “Oh, the Fed’s out of market, they’re not going to be monetizing bonds.” So then you’re going to sell them off. God knows how long get sell off goes. And then once the economy starts having trouble, then you’ll see the move back to bonds. Same thing with gold. Gold’s going to go down if the Fed starts tapering. You’ve already seen that, after it’s going up in here, but then at some point, you get economic concerns, you see, you know it— so there’s so many different cross currents coming in right now. 

Then the other thing now is this unbelievable manipulation that’s going on in the markets. This absolutely— it’s worse than ever. And part of it’s because you got all this retail order flow in there, and the wise guys know it and they run in front of it. Before they used to run in front of the institutions. It was much harder because institutions, they trade by VWAP [volume-weighted average price]. They trade by computers. They’re measured. They’re careful. I mean, you see the same stuff every day. Bad news in Asia, you get whacked, and then they all buy them sometime in the first hour and then they jam them up and they go down. Then you get the European close stuff and then they fall round and you get the noon balloon and then whatever. And then at the end of the day, they’re trying to mark them up. 

These aren’t capital markets anymore. As I put in the letter, this is a casino now, and this is blatant manipulation. This is trader games. I’m an old options trader back from ’79, ’80, ’81 when it was on the CBOE [Chicago Board Options Exchange]. But what’s going on in the option market now is unfathomable. You have so many retail people in here buying these options. Today there was trillions of dollars of notional value going. I had this in a letter, but I think it was last Friday, a week ago. I mean, I always talk about the Friday before expiration, you tend to have that rally in the afternoon, because guys start loading up for the expiration week screens. I try to say that, I might forget saying it, but that goes on— for years, that’s been going on. 

So last Friday, ahead of this week’s expiration, listed options traded two trillion notional volume. That’s enormous. Absolutely enormous. And 71% of the bottom I think was like expired this week or is expiring next week at the end of the month option type things. That’s incredible. The reason they got rid of options trading is because the way it contributed to the ’29 crash. And that was nothing. There was just these little put/call shops. They were bucket shops. They were scamming people, whatever, but there’s not much difference now. If you buy options, they manipulate them up and manipulate them down, the big guys squeeze them. You saw that on Wednesday. The huge rally, squeeze up, and then Thursday, we get whacked on bad news in the afternoon, yesterday afternoon. They were running stuff almost vertical. It was all manipulation. I think it was five strike prices, you had almost a million options traded in the SPY [SPDR S&P 500] calls. September calls. 

David: That’s ridiculous. 

Bill: But then these same types of puts— That’s why you had a top in the market and it went down because all those people were mostly long. And if someone’s going to short them, they’re typically buying something against them. Not too many retail people are short sellers. Even your traders are usually not. They usually sell the premium and buy something against it. They could buy a S&P future against it. It could be a basket of stocks they could do. They could actually probably buy— the easiest thing is buy the SPY cash. You just go in there and you buy it on the New York Stock Exchange and you sell the options against it. And that’s what options— options guys, by and large, are reinsurance companies. They’re selling insurance, and then they hedge their risk. And that’s how reinsurance companies make money over time. The only time is when you have something catastrophic comes in, then you got to be careful. If you’re not hedged, whatever, then you get hit as [unclear]. 

The real pros sell option premium, especially now because it’s just so enormous. And then they hedge against it with the underlying vehicle for the most part. And that’s creating unbelievable dynamics in the market. Even the financial media picked it up a week or two ago how they— you’re getting these early in the week rallies in option week, the Friday before, whatever, and then all of a sudden near the end of the week, everybody’s trying to get out, which was today. You couldn’t get any rallies going. They tried a couple times. You just couldn’t get it going because there’s too many guys, too many retail people long these options. 

Now, if you have a few big whales and they’re acting in concert, they’ll squeeze people, whatever, but when you have hundreds of thousands of traders all in their own self-interest, you can’t control them. So they start moving for the exits. You can’t call your buddy up, “Well, hey, don’t go selling this. Let’s try to squeeze it higher,” which is what Wall Street does. You call your buddies. Whatever you try to— whatever. You can’t do that when you got all these retail traders and there’s no way to control them. They think this is nice and fun, but history is very, very clear. When you have the panic to get out, it always goes down faster and more violent and more steep than when you go up, and that’s irrefutable history.

David: Yeah. It seems like the duration of this move in equities has been one for the record books. And the kind of volumes that we’re seeing, the kind of activity that we’re seeing, is pretty typical of what you might call late-cycle stuff. It’s as if people have forgotten what a risk looks like, what the downside looks like, how to find the exit if they need to. On the other hand, valuations, maybe you can speak to valuations. They’re high. Who says they can’t go a lot higher? I mean, insanity is not a dot on a line, it’s a whole range. Insanity began some time ago and could continue forward. What about duration and valuations?

Bill King: Well, there isn’t any. Everything’s overvalued because the money’s been so cheap for so long. This isn’t just the last few years cheap, we’re talking how many decades of cheap money. I mean that’s the problem here. Everything’s over— real estate. The only thing you can make an argument for is gold isn’t overvalued, because you can value it versus your traditional versus Dow Jones Industrial Average versus the S&P. The other thing is, if you buy the argument gold is money, then you have to— you value it versus money. Money supply. Value it against cash in circulation. You can value it against credit. You can value it against debt, because people don’t understand, debt is money in the United States system. 

That’s what the Fed is. The debt becomes money. That’s what makes the Street go ’round is collateralizing debt, and the Fed puts money in the system. I mean, what did they do today? How absurd it is. I think the Fed— today’s reverse repo is 1.28 trillion. That means there’s 1.28 trillion out there, I think with 79 counterparties in money markets and on the Street and hedge funds, that they can’t do anything with. They don’t know what to do with it. So they’re throwing it back at the Fed to get few basis points. That’s the minimum amount of excess reserves in the system. That’s the minimum. That’s absurd. That’s absurd. And nobody wants to call the Fed on it, because they’re— 

For decades, they’ve been doing the heavy lifting to bail out the politicians, so the politicians, the administrations and the Congress doesn’t have to make tough decisions. Just let the Fed paper over it. But I think these guys all got too clever here with the COVID shutdowns, and I think that’s what’s looming out there that they don’t quite understand, what they did here. 

The thing I’ve been trying to tell people is, if you go back and you look, and you can even go back to 1982 here when everything was really going to hell in a hand basket, because Volcker was raising rates. He wasn’t cutting reserves. I mean he was slowing reserves, but you go back and everybody goes, oh, he cut the reserves, but no he didn’t. He just slowed the reserves. He said, “You know what? I’m just slowing this down, and we’ll let interest rates— we’re not carrying interest rates. We’ll let interest rates go where they’re going to go because that’s how we’re going to kill the inflation.” 

So when everything got really ugly in ’82, and Brazil and Mexico called up and said “We’re going to default,” they pumped the money. And if you can back up from that, when the Hunts almost took down the system in March of 1980, with the silver, they pumped the money. Volker pumped the money, and there for— probably until about June, if I’m not mistaken. And that’s what unleashed— you know, that’s the year oil went to a new high by, I think it peaked in November. And the stocks went berserk up there. They weren’t paying attention because he started taking the money out in the fall again and that’s why, in ’81, it was really ugly. But they always, “We’ll pump money.” And then ’84, when Continental Bank went down, we bailed them out. Maryland and Ohio Savings and Loans collapse. Almost took Chase down. And everything, “Well, we’ll will pump money.” 

So then you can fast forward and you go to the ’87 crash. What do you do? You pump money like crazy. You go to ’89 when the Japanese quit lending, and the United and all those were buying all the air stocks, they had the mini crash there. What’d we do? Pump money. ’91. ’92. When the Texas banks had gone down and the New York money centers, names you don’t hear anymore, Bankers Trust, Manny Hanny, Chemical Bank, it was Chase, et cetera, they were absorbing all the banks. Well, they were still all of a sudden, all that bad assets they had were starting to take them down. So ’91 there, when we had a recession, and what did they do to save Citi Bank and Chase and Bank— actually, it was Bank of New England, right? And pump money. You go to Mexico. What do we do? Pump money. This could go all the way— keep going all the way up. The Long-Term Capital Management, LTCM, went down. Pump money. Russia’s going to bail out. Pump money. 

And people forget. That’s why you had the bubble in ’90. This stuff, while it was hitting the fan in ’97 and ’98. ’97 was of course the Asian Tigers, or the Asian Contagion. Pump money. Now we get up in— we go here, 9/11. Pump money in the system. Just load it up. Then you had the— they still were worried about depression. Bring in Ben Bernanke. We’ll run the housing bubble. We’ll pump money. 2008. Pump money. 

Now the problem they had is they were thinking, well, whether it was to get Donald Trump or not, we’re going to run to COVID. This was not an accident. There was a purpose for shutting down. You did not have to shut down the way they shut down. Sweden didn’t do it. They did fine. That’s a different argument, I guess, but you didn’t have to do this. But the problem is, after all these years, after almost 40 years of every time we had a crisis, we were just going to pump enormous amount of money, stock markets, assets will inflate and we’re going to go to the moon. The problem these idiots didn’t think through, every of those— and the reason why I understood this was in 1987, when everyone was worried about depression, I was talking to Al [Sindlinger(?)], who had been around in the depression, was one of the foremost— the foremost pollster. He’s the guy that pulled me onto the birth-death model and all these games that the government was doing with CPI or whatever. Very insightful guy. 

He had data going back to the mid-thirties when he started business. He was put in business by Herbert Hoover and Henry Luce. That household liquidity was strong. Household income was strong. Now people look at income, but they don’t look at household liquidity. If you lose your job and you have money in the bank, you’re not as bad off. And he said, this is a Wall Street accident. That’s always— and we’re not going to have a depression. It was a great call. And that’s what dawned on me. All these other crisis we’ve had up to the COVID shutdown, was Wall Street problems. Over speculation of some kind, over leveraging, debt, or just guys got on overload, and you threw money at it. 

What these idiots did was, “We’re going to scuttle the economy,” whether it was so we could do mail-in votes or give it a trim, whatever, or we can take control, we can make you wear— whatever it was, whatever the reason, there was no reason to scuttle this stuff. But the bet was, “We’ll just turn around and throw money at it.” 

But the problem was, it wasn’t a financial problem. They killed the economy. Everything else up to this was not an economic problem. It was a financial problem. And what they didn’t think is, we put people out of business, they’re not coming back. Some may re-open. I’m sure you see here. Restaurants were here forever. Nope. We’re not— we’re gone. Businesses. We’re gone. Some of this is due to the age, baby boomers. Others were like, “I’m not putting up with the aggravation. I can’t make a go. I can’t hire people.” 

And the other side is, you start throwing money at people not to work. So now we got over 10 million job openings, and people are just not working. But now, we’re watching restaurants, they’re closing up. You call, you go in, you complain. This is supposed to be ready. We’re an hour late on delivery. And then you’re getting, I mean, “Hey, I came in as an emergency. I’m not even supposed to be here.” You see this. You see the supply— People. This is what they did. 

That’s why the inflation and all this stuff’s going berserk. That’s where these guys screwed up and they screwed themselves. They killed the economy, and they changed behavior of people, and they put people out of business. You know how hard it is to build a business. Again, this isn’t some hedge fund. “Oh, we’re insolvent. They’ll throw money at us. Okay. We’re fine. Yeah, we had a down quarter or two.” Goldman Sachs were, “Oh yeah, we lost 20, 30%, but you know what? We’re— all of sudden, we’ll go to new— they’ll throw so much money at us, we’ll just lever up and we’ll make so much more money than we ever did in the past.” You don’t do that in the real economy. You put them out of business. You put hair dressers out, you put shoe people— Tool and die, put them out of business. They’re not coming back. A lot of them aren’t coming back. You just don’t throw money at them. 

That’s what’s lurking out here, and we’ll see how it plays out here. That’s why they want to throw three and a half trillion dollars in the market here in this, whatever, the goody bag. And besides the debt issue, which is another total issue in here, that’s the problem they’ve had here. They killed the economy, and you want to throw stuff in here, you’re going to keep getting inflation. You’ve destroyed your supply chains, you’ve destroyed businesses, you’ve destroyed production, and you’ve also created the disincentives to work. 

That’s what Bill Clinton— everybody loved him because he said, “No, we’re not doing anything to welfare. We’re cracking down on crime, and blah, blah, blah, blah, blah.” Now you want the, oh, this was great. That was great. Bill Clinton was great. He did all this. Now you’re going the other way. And the reckoning— this isn’t financial where you could pop right up, pop right down. It grinds. And the economy is grinding and you can read it and you read it in all these different surveys. You read it in sentiment. You read it in the PMIs. The responses from the business people, they can’t get people to work. 

My gosh, somebody sent me an article from a paper up in Minnesota. The guy was up in upper Wisconsin, was in near Lake Superior, and it’s a— I can’t remember the firm, but they were advertising— I had this in the letter a few weeks ago. $50,000 bonus to plumbers to come and work with them. I mean, I see now when I try to get people— I’m trying to get my chimney patched. It’s going on three months. Got some holes in the chimney the birds pecked in it. Trying to change windows, we booked in June, they’re hoping to get here in October/November. The guy looking at our grass yesterday, they can’t get fences. People want to put pools up, you have to put the fence, just can’t get the crews out. It’s incredible. Everybody you talk, can’t get them. 

We talked to people in May about just doing some landscape or doing some businesses or whatever. Just showed up yesterday. It’s a friend. Friend of my wife’s. Just got booked. Can’t get to anything into the fall. I have trees, a big willow, looks like it was getting ready to fall over, “I can’t get to you until some time in the fall.” That’s how booked they there. So what do you do? You raise your prices and people just start paying up to get the service. That’s the real economy. This isn’t hedge funds. This isn’t Goldman Sachs and JP Morgan’s prop desk. It’s the real economy out there, and they’ve got problems in it. 

And it’s going to play in the 2022 election. That’s the other thing going on here. And elections are always important, but this one, they’re scared to death because typically when a new administration comes in, changes power, the party changes, the White House changes party, they get killed in the midterms, and they do. And I think the— the Democrats have a seven-seat majority. Typically, you’re going to lose somewhere between 20 and 40, and now they’re bracing for 30 to 50 because Biden’s approval ratings are in the toilet. 

And you have to ask yourself— president ratings can go up or down. What’s Biden. Everybody knows he’s been around 40 years. This isn’t why we don’t like the first impressions. What’s he going to do? What’s he going to do foreign policy? Is going to start a war? Is he going to go invade Iraq again? What’s he going to do to boost his approval rating? He had a high approval rating because it was, “Thank God Trump’s not in here.” Now they’re going, “Oh my God, look what we did here.” And that’s a problem. And what that problem feeds is, Republicans take over, what do you think they’re going to do? All these investigations. The January 6th investigation. You’re going to have a real one. And it’s going to be, “What role did Pelosi play in January 6th? What role did the FBI play by putting informants in there to stir up people? What does Hunter Biden do? What did Joe Biden do? Why is Joe Biden giving all this stuff to China? Why is Milley giving stuff to China?” General Milley. Why are they— China’s not a problem. And then all the money that China gave to Hunter Biden. 

You don’t think the Republicans— that’s why this things are going to get nasty next year. These insiders are fighting for their lives because you— the Republicans— and it’s before you think, “Well, when you had that— the rhinos in there like Paul Ryan, and even McCarthy in there now.” The problem is, and people say, “Oh, you know McCarthy.” Well, McCarthy used to be the go-along-to-get-along Republican, but you can see he’s— reluctantly he’s changing his tune because it could be the same thing to happen to Pelosi. 

In last election cycle, actually the one before that, in 2018 when Trump won, they ran, the moderate Democrats were running, “We don’t like Pelosi.” I mean, she had horrible approval ratings nationally. We’re not going to vote for Pelosi. We’re not going to vote for Pelosi. She’s out. They actually were running on that because nobody wanted to have her near Speaker of the House. So what happens? They come in, Pelosi cuts a deal with all those leftists, got a block, she stayed in there. And the reason she stayed there, because she controls all the money coming out of Silicon Valley. She controls that West Coast money. But that was the bargain. 

Now McCarthy’s going to have the other problem. You see the people here, the 10 people or so that voted to impeach Trump. How many have retired? You’re seeing others, Lynne Cheney, these guys. They’re getting primaried. You’re seeing a number retirements already in here. The new people coming in, especially the women. The women coming in, the Republican women coming in, have much more fortitude to say something polite than the men have. You see Greene, you see Boebert, you see some of these others, even Stefanik. And there’s something like 150 women going to run this time, in the GOP, this cycle. And they’re coming in and they know you have to clean out this swamp. 

That’s Trump’s biggest mistake. He never cleaned out the swamp. He embraced it. He hired the swamp and they got him. And anybody with half a brain of politics knows we got to do something about generals that rip up the constitution, work against the president, undermine the president. Or Department of Justice or FBI that doesn’t protect teenage girls that are being abused, but they’re busy trying to frame Americans for some crime or some kidnapping plot. I mean, this is going to be gruesome and they know it. And especially if the Republicans take that and they should probably take the Senate, because they’re at 50/50, what do you think they’re going to do to Biden for the next two years? What kind of agenda do you think’s going to get passed? 

Because Biden already went far left because that’s where the people that handle him are, they’re far left. Biden has always bragged, “I’m a centrist.” Used the Bill Clinton, “We’re the centrist. We’re for law and order. We’re for the economy. We’re for the UN, you know, whatever.” And then he went wacko left. There’s no reason for that, unless, you know, everybody’s [unclear] are correct about who’s really running this thing. So what’s he going to do as President? So there’s some real tough sledding going to come up here very shortly. Fed might— they’re going to do their taper talk. We’ll see what it is. How bold it is. 

The other thing that might be going on here is— I don’t know if you saw the report here today, that a week or so, you saw that the two Fed presidents were trading stocks. Anyway— they were even trading S&Ps. Kaplan from Dallas and Rosengren there from Boston were— which is ridiculous. Of course we know Nancy Pelosi’s husband’s made tens of millions of dollars trading options. But they exempt themselves. 

So now the Fed’s got this problem. Well it comes out today that Powell owned municipal bonds that the Fed was buying. Similar types of bonds that, when the COVID panic, they were buying stuff. So now you have to say to yourself, Powell’s done everything he can for a year. He’s done everything but go over there and wash Joe Biden’s back and give him a rub down to get re-nominated. And with all the social justice war, all the virtual signaling, the climate, you name it, he’s done it so we could get re-nominated. This might throw Powell out. 

Now I don’t think that was a factor in the market today. As you see, they went straight down all day. You had one— noon, you had a little bit of a rally in there and that was it. And today was expiration on futures and options. A huge expiration. And I don’t know if this was part of the calculus here that, how can you reappoint this guy now when everybody knows, and it’s been leaked out, that the Obama people want Lael Brainard. She’s a big Obama buddy. She’s donated money to him. She’s far left, and Powell did everything he can sucking up to the left to get re-nominated. But if he blows himself up now, and the Obama, people tell Joe, “No, Joe, it’s going to be— Lael Brainard here is going to be your new Fed chair, and plus she’s a woman.” You got the midterms coming up here. It’d be interesting how that plays with the markets, but also it’s how that plays internationally. 

So there’s a lot of rubber starting to hit the road here. You’re here trying to do the debt ceiling, you’re doing this stuff and they’re going to do all this. They’re going to jerk around for the next couple weeks with that, and whatever you’re going to do with the spending bills and how that ends up. And then all of a sudden you’re into the holidays and you have recess. And you know what happens then when you come back? You’re in the election cycle. These guys are out raising money and campaigning. And this is going to be one of the most bitter, hard fought midterms, because a lot of people are going to be in real big trouble. If the Republicans take the house and you go after January 6th, you start releasing the 14,000 hours of video, you start making the FBI come in and talk about who they were partnering with to foment trouble, to get people to storm the capital. What were they doing with Whitmer? Then the guy that was the lead FBI guy already got tossed. And what was Hunter Biden doing? What you guys do with that? With his PC, on and on and on. 

And the difference now is in the past, you say, “Well, the Republican’s going to go long to get along.” The people coming in are firebrands. And you got Jimmy Jordan, and you got these other guys in here and they understand you better go hard at this. And the people— the Republicans want that. That’s the reason they voted for Trump is they wanted somebody to go after these guys. They don’t want George Bush, or any of those Bush-like kind of people in there. The Lindsey Grahams, the Romneys, the Murkowskis, the Collins. That’s the Republican Party in the past, but it’s changing, and that’s what’s going to be interesting here. So boy, it’s going— I think that just the way you look ahead there, it’s going to be real, real— 

That’s why they’re fighting so hard to jam through this three and a half trillion. The other bill, the infrastructure, the voting by mail bills, because they know this is going to be really tough. The odds are they’re going to lose and lose big in the House and lose small in the Senate. And all you have to do is lose one seat to lose it. And then what do you do? You pounded on Trump for four years and you got Biden in here who’s got a lot more baggage and dirt than Trump, including his family. What are you going to do here for the two years into the big election of 2024? I will bet if that happens, you could see Manchin switch to Republican. You might even see, what’s her name, Kyrsten Sinema down in Arizona, another one who’s been a moderate and holding up against the 3.5 trillion dollar booty bill here. 

So this is going to be a real volatile year, politically, in here. And God help us if you start seeing terrorist attacks against US interests, let alone if it’s on the US soil, after what— with the Afghanistan. So this is going to be a real challenging year coming up, politically. And if it is politically, it tends to be for the economy too.

David: Well. So we’ve also got our debt issue, plus you mentioned Evergrande earlier, which is sort of tip of the iceberg in terms of— you don’t want to know what’s underneath the Chinese credit markets and there’s real issues there too.

Bill: You see, that’s it. Every time you have these problems on Wall Street, they throw numbers out, but they don’t know until they get in and start unpeeling this stuff. Until they got in there, they had no idea how levered Lehman was. And it’s the same thing, they’re saying, “Well, this is 300 billion dollars worth of debt here for Evergrande,” but we don’t know. We don’t know all the tentacles and where it goes and on and on and on. And that’s the problem. Everything is so levered. There’s so many derivatives. There’s so much off-book nonsense going on, off-balance-sheet positions, carrying, repo’ing stuff. So you don’t show it at the end. I mean, that’s what Lehman was doing. They kept offloading stuff at the end, so they didn’t have to report it. 

I mean that’s what happens, and every time we get worse and worse crisis because the elites and the establishment get bailed out and they don’t learn any lessons. In fact, they go hard the other way going, “My God, look at how much money we’re making, and they bail us out.” And as I said, it’s the financial terrorism card. If you don’t bail us out, we take down the system. If you don’t let us trade the commodities and options and speculate and lever us to the teeth, we’ll take down the system. Somebody, sometime is going to be an Andrew Jackson, a real Andrew Jackson, not a fake one like Trump, and come in and go, “You know what? We’re going to do what’s best for the real people. We’re going to take a hit, but we’re going to clean you guys out and we’re not going to ever be beholden to you guys again.” And that’s going to be out there someday. We don’t know. But who was out there doing it. I think that’s why they’re afraid of DeSantis, because he acts like a leader and he acts like he does his own thinking, and he’s not beholden to people, and that’s why they’re already taking shots at him. There’s scared to death of him.

David: Will the real Andrew Jackson please stand up.

Bill: Of course, we’re starting to see the first indictment here showed up from Durham, and right on Hillary’s lap. It’s her lawyer, Sussmann. They tried to downplay the indictment, but if you read what’s in there, they got tech companies talking about how we can make this thing look like Trump was communicating with the Russians, but we got to be careful. We get caught, because we’re giving away our secrets. They start naming reporters that we can go to and they’ll spread these BS stories so we can get this going. It’s all conspiracy. And of course the media’s staying away from it, because they’re involved. 

If the rumors are right, that Durham’s going to indict people that aren’t politicians or in that political apparatus, that means these reporters. That means it could be— can mean the guys who at GPS or these other guys who were running around with the media conspiring. Then what happens? What does that do in Washington? What does that do in Congress? Anybody knows that slows down, because everybody’s trying to figure out how to stay out of jail, and they’re calling in all the favors, so for all your bills and whatever. So that’s, to me, is— it’s going to be interesting as we proceed for the next year. And you’re in an election cycle here with all these, I don’t even want to call them potholes or anything, these things are cataclysmic events sitting out here. And any one could be horrible, but I’ve never seen so many on the horizon or in the landscape as you do right now. So the best thing here is to be careful.

David: Be careful. I mean, it’s interesting that the news media won’t pick up on a lot of things. So much of what you’ve described, potholes, you could drive a VW Bug into them, and yet, with a very minute attention span by the general public and a news cycle which says, “What are you talking about? I don’t see what you’re talking about. Nothing happened here. Move along.” How does that define 2020 politics unless there’s sort of an underlying frustration that gets expressed and this comes back to what you’re saying in terms of the economics are what people are feeling? And if there’s a point of frustration, it doesn’t matter what’s in the news cycle, it matters what people are experiencing.

Bill: Yeah. The country’s mad. You see it in the polling. And they’re upset. And I call this— the stock records part of the bread and circuses that they’re giving you for entertainment. There’s never been more people speculating and you see it in these enormous option volumes. There’s never been this much speculation, and it’s beyond a— some of it’s pastime, some of it’s realizing the video game generation. The last 20, 30 years, the guys playing video games say, “Hey, you know what? This is a video game. I get it on my phone, I’m playing a video game, but I can make money doing this. This is even better than the video poker craze that went around 15, 20 years ago.” These guys were so conditioned, their behavior, to do this, to sit there while you’re at work or in a meeting and pick up your cell phone, see a headline and then just start trading some options, or trying one of these meme stocks. I mean, it’s unbelievable. They have no idea what the fundamentals are or what’s really going on.

David: Let’s shift to currencies because it seems like, with underlying debt issues and a tremendous amount of speculation, as you say, indications of speculation showing up, whether it’s the non-fungible tokens or your options trades or what have you, it seems like real problems are going to show themselves, maybe in subtle ways, maybe in not so subtle ways, if watching the RMB, if we’re watching the euro, if we’re watching the dollar. What are you watching for in the currency markets?

Bill: Well, unfortunately, right now it’s hard to see anything because everything’s so rigged. The ECB, what they’re doing to euro, and Japan with the yen, all these central banks pumping money. I hate to say there’s relative stability. I would think maybe the one to watch is China because of the debt. That situation is just so bad and if that starts tumbling, what do they do? Well, if it really starts falling apart, the yuan’s going to go down, and it’s going to go down a lot, because they’re going to have to start printing money even more than they have. And if that happens, then what happens to Japan and Germany and Europe and it just— United States? 

Put it this way. If you had the Asian Contagion because the Asian currencies were starting to collapse, and they’re blaming Soros and others there for collapsing those, and that was almost taking down— but it won’t. Those guys didn’t have much debt, in all honesty. Those Asian Tigers were flush with cash in current accounts. But China, what happens if you have that going there? My gosh, you can’t— there’s just no way to know where that goes and how far, because you don’t know how— the thing we don’t know is it foreign fixed investment? All these big companies here that have been kissing China’s keister since the mid-nineties to get in there, we don’t know what their exposure is. They don’t know, I’m sure. 

And you just don’t know what China’s going to do. Is China going to say, “Oh, we’ve got these rules of yours and how we take care of people,” or are they just going to say, “No. We’re going to write the rules as we go along.” And that’s what they’re going to do. There’s no, “Take me to court. Sue me. Go ahead. Take me to Manhattan superior court and try to sue me for your assets. Go ahead.” So there’s no telling. So I would— yeah, if you want to watch the currencies right now, it’s China because China’s the one that could really, really— they’re the elephant there that could really upset the apple cart really big here.

David: We’re watching Evergrande. We’re watching a couple of other companies. Looks like the wealth management— the asset management companies escaped by the skin of their teeth with government stepping in and helping them out. What’s to keep the Chinese from continuing as we’ve just thrown money at things? We went through your litany of 1982, 1984, 1987, 1989, 1991, ’92. Why don’t we do the same thing in China? We’ve got a bubble. It’s pretty phenomenal what they’ve done with real estate development. Probably in the first inning of real trouble there, but throw money at it. Throw money at it. It seems to work every time.

Bill: They’ve been trying to do that. But if you notice, they really were actually going the other way. They’ve started for the last few months, arresting and pounding on their billionaires. Right? You’ve watched that whole thing. It’s cracking down. Remember we saw all these, we’re cracking down on game stocks. We’re cracking down on these guys. We’ll crack down on Jack Ma. We’re cracking down on Tencent. They’re doing a slow rolling crackdown. And the reason they’re doing that, and they started pulling the money out of these guys before, and remember they tried to get their money out of some of the real estate because they saw it coming. And it’s just like with COVID. They do all their stuff before— and everybody else knows what’s going on. 

And there’s a reason that— there was an article out, and I think had in a letter there, but having worked two of the biggest Japanese firms, actually first biggest and third biggest, in the eighties, they will go along and they can do all this nonsense until food inflation shows up because food inflation causes riots and political turmoil. And then the reason Japan and China, Korea and Indonesia, and these other Asian countries have to be mercantilist and export driven is their populations are so huge, they can’t pay for it. And they don’t have enough raw materials. They have to import food products and raw materials. And when the food inflation goes, then you get riots and political turmoil. That’s the problem. 

So you can print the money. That’s fine. When you have low inflation and the soybean prices are low and pork prices are low and everything’s okay. And you have nice supply chains so you can import. The US meat packers can send you a lot of chicken and pork if you guys don’t have it. But when that’s the problem, those populations are— India. I’m sorry, that’s the other one in there. Asian populations are so great, their number one problem is food and feeding their populace. If you don’t, then you have riots and turmoil and whatever. Japan would always weaken the yen until the food inflation showed up, then they would strengthen it, because by strengthening the yen, they lowered the cost of the food imports. 

To get to your point, they’ve gone through that calculation. They’re dealing with the inflation. They know it. So that’s the thing that kind of checkmates them is food inflation.

David: Yeah. They can’t throw a ton of money at it.

Bill: And for Japan it’s oil, because they have to import, what, 98% of their oil or something like that. So that’s when Japan will let the yen appreciate is when inflation, food and energy inflation, gets to the point where it can cause political turmoil.

David: Well, it seems to me sort of in their hip pocket is the ability to distract. And even when people are feeling the pain and perhaps want to hit the streets with some expression of anger, angst, Taiwan’s just across that little stretch of water and represents a great way to distract the masses.

Bill: Right. And you got North Korea all of a sudden shooting missiles and enriching uranium, whatever. And they used to do that to Bill Clinton, where every time they couldn’t feed their population, they’d shoot some missiles, rattle saber, and then we’d send them some grains and food products and water. Absolutely.

David: I mean, what if this is in the next two years that we’ve got issues with China scapegoating and it’s real easy just to figure out that the Taiwanese nationals are the ones who’ve caused this problem or that problem or however it gets played. Who knows how it gets advertised or PRed to death, but what do we do? The great leaders in Washington, D.C., how do we respond? Seems like the next two years, a little dicey.

Bill: The people running Biden write a speech for him and he goes and reads it off of a teleprompter and then he takes no questions and walk away. That’s what he does. What do they do about Afghanistan? What are they doing about the COVID? What about— I mean, whatever. What’s he doing about his bills? The interest— different plans. They come up, they give you the happy talk or whatever. They talk their talking points and they walk away. Who’s in charge? You know, Trump and others say nobody knows who’s in charge in the White House. It’s probably Susan Rice. I mean, Tony Blinken was her assistant. Jake Sullivan, who’s involved with this Alpha Bank hoax, he’s in there. I mean, none of these are Biden’s people. These are either Clinton or Obama’s people that he surrounded himself with. 

And you have ask yourself, “Why?” The guy’s been in— it’s not like he’s a new guy. It wasn’t like he’s Trump, came in, he had nobody or whatever, he brings in Goldman Sachs people and people that despise him and hate him, he surrounded himself with, and all they did was leak to the media and undermine him. Biden’s been Washington DC over 40, almost 50 years. Right? 40 something years. He doesn’t have people around him? Of course, he said the smartest guy he knows is his son, Hunter, so maybe he doesn’t. But that’s telling. The guy’s been a swamp monster, not a creature, for going on five decades and he’s got all these people around him are not his people. They’re Obama’s people and they’re Clinton’s people. See, so what do you going to do? Who knows? Who knows? 

And that’s the other thing— how long are they going to keep Joe in there? You hear the rumors. The only reason they haven’t pulled the plug on him so far is probably because Kamala Harris is there. She’s more unlikable than Joe. That’s what I’m saying here was you’re going forward— whenever you want to think about the economy or the financial system, that’s fine. But when you look out there politically, and they did this for themselves, in their zest to get Trump, they destroyed the Constitution. They said no matter what we do, whether it’s Milley, undermine the public— whatever we do to get Trump, whether it’s unlawful, immoral, unethical, or unconstitutional, you could do it if it’s to get Trump. 

That’s what’s out there and it’s in the media, it’s everywhere. And they put that out there for four years. So how do you rein that back in now? What’s the rule of law? How does this all play— I mean, there’s some really big, big questions here, but that’s why you got to keep running the stock market so people don’t pay attention. Again, once the bread and circuses end, then you got a problem. 

So I think it’s going to be a real tricky year. Everybody know it’s going to be tough year. It’s going to be tricky, because as you said, in the past, all you do is throw money at it. But you’re at the point now where, when the inflation shows up, that’s the end game, because all you do is, right now, if people— the sentiment is gone, and then when you read it’s because inflation. The average guy’s getting killed by inflation. Everybody knows CPI is bogus. Nobody pays attention to CPI anymore except Wall Street because they want to trade it. And they want to fool you, or the politicians. When you’ve got people in the business telling you that rents are up 10 to 14% year-over-year, and the BL says, “No, no, no, you guys don’t know what you’re talking about. It’s 2.9. We called 50 thousand people.” And the guy goes, “Well, our database is 13 million properties.” “No, no, no. Yeah, but these 50,000 people we called up, they know what the rent’s— inflation is.” That’s what you’re dealing with. How absurd is that?

David: So if it’s dependent on bread and circuses continuing, not only is 2022 consequential from a political perspective, but keeping the stock market moving in “the right direction” is also pretty critical. So is there anything that you see in terms of divergences or breadth or just things that you would say, “It’s not working.”

Bill: But what happens is, if you’ve noticed over the last few years, you get really bad divergences in breadth. And in the past you see was the FANG stocks. Right? The big Uber types, the stocks the public wants to trade and the sexy stocks. And then all of a sudden those would correct and they would go down and then something happens and money gets thrown in. And then all of a sudden we go up again and the breadth improves. Breadth was horrible for most of the summer and then it’s improved recently in here. 

But as you said, what’s tricky about is that happens a lot of times in late cycle. When the institutions go, “I can’t buy this crap. That’s overvalued. I’m going to buy the laggards. I’m going to buy some of this other stuff here.” And all of a sudden that improves the breadth. So that’s a little bit tricky in here, but yeah, everything’s overvalued, just because of all the easy money. 

There’s nowhere to hide. What you got to do is you got try to figure out where’s the safest place to hide out. That’s all you’re doing here is you got to be safe. And to me it’s some combination of liquidity, some kind of cash and cash equivalents, and a hedge against that, whether it’s gold or silver or whatever. Or whatever, some kind of hard asset against your cash equivalents, and you got to hang out and wait and watch.

David: Yeah. We’re back to the asset management side of our business. We’re back to raising cash again. Done that multiple weeks in a row. Risks are elevated. Reward, I mean, it’s— if you’re willing to play the game, it sure feels like picking up pennies in front of a steam roller though.

Bill: You said the key word: game. It is. Whether this is fantasy football or whatever, is it fantasy out here. This is a difficult environment here, because it’s— you go back and you talk to professional traders and they go, “This is absolutely absurd. It’s ridiculous.” Everything, by all my experience, all my charts, my models, all tell me I got to be long, because it— I think Kane said this 80, 90 years ago. If you want to be in stocks, don’t think about what you like. It’s a beauty contest. Don’t pick who you think is the most beautiful look at the other judges and think, who do they think’s most beautiful. And that’s what you’re doing here. 

And that’s what the smart guys do. They hate it. They hate what’s going on here, but they got to play it. They get marked by performance. So they’re out there going, “Oh this is really not good news. It’s bad for the economy. But you know what? I think all these retail guys are going to be buying stuff so I buy too.” That’s what’s going on. That’s what this is. Because you learn, no matter how stupid it is, if you’re a trader or you’re a professional investor, you got to go with the trend. By definition, you have to be with the trend or you get killed and you lose your job and you lose your money. 

The trend is your friend. That is the most absolute truism in investing and trading. And it doesn’t matter how— like you said, it doesn’t matter how irrational it is and you don’t know how long it lasts. But when it is— gets in these irrational parts, you got to have some Warren Buffet in you where you say, “I don’t care. I’m not playing it. I don’t need to play. I don’t care how far it goes or how it’s going. I sleep at night and I’m not going to get caught when the inevitable bus comes.” Because it will come.

David: Cash equivalents and a hedge on it.

Bill: Yeah. Hang out and wait. Wait to see where this goes, because this is going to be tricky.

David: Why are you hanging out in Chicago?

Bill: Because my grandkids and kids are here. That’s why. Otherwise I’d be gone. I was babysitting with the one grandkid. The other two were just over a little while ago, coming home from school.  They’re just in the next town over. That’s why. 

David: That makes sense. But I mean you might be careful, Biden might— his next military deployment might be to the larger Chicagoland area. It’s getting worse than Iraq.

Bill: Yeah. Well I’m outside. I’m in the suburbs away from that, but there’s no reason to be in the cities. My daughter-in-law worked in the city then she finally got a job out in the suburban area. People don’t want— when they’re young, they want to be down there. Of course, they’re leaving out, too, but as soon as they get in the thirties, they get married, they get kids and they’re out. Yeah. 

So the big thing here is don’t get caught up in hoopla, be safe, be smart, just pay attention, and just realize there is an enormous number of moving parts out there. And I can see with my letter, usually it will take me two pages, three pages to get all this stuff going on in a day or two. Now, I mean, I struggle to get it all in six pages. And on the weekends, I struggle to get into eight pages. And when I started, it was a one-page letter. It was 27 years ago. 30 years ago, I’m sorry. 30 years ago. But that’s how many— there’s just so many things going on here and you got to keep track of them because any one of them just goes bam. But you just got to stay alert, don’t buy the garbage, the headlines. Do some research. The one thing is much easier now, because of the internet and the search engines, you can go in there and look and search and do some research here and see what’s really going on.

David: Well, I appreciate you sharing what’s on your mind. The analysis is complex. There is a lot going on. I do really appreciate the three points that you put in every letter. I mean, beginning to end it’s valuable, but usually as it relates to the market, you’ve got a positive note, a negative note, an ambiguous note—something in the market which it’s difficult to say where this one’s going. If you said, not as it applies to the market as it traded today, but if you said 2021, 2022, what’s your positive note, what’s your negative note, what’s your ambiguous note?

Bill: Well, for 2021 and ’22, it hasn’t collapsed. This has been the most positive thing. This thing hasn’t collapsed yet. And there’s enough stuff here that can make it all come down real hard. So that’s what’s positive is you lived another day. That’s what this is. The negatives, there’s just too many to list. We talked about all of them. It’s just over the transom. And in a way that’s the positive, is with all these negatives, it hasn’t gone down. 

But we all know why it’s hasn’t is because they’re just throwing so much money at it. I mean, look at the trillions. It’s not just with the Fed’s pumping. Look at what was spent in the last 18 months from the Federal Government. It’s ridiculous. Bail out airlines, bail out all these people and they still fire people. Giving money to Kennedy Center for performing arts or whatever these people were giving money to. All the different pet organizations or projects. It was ridiculous. No wonder teachers didn’t want to go into work, you’re getting paid to stay home. And we saw this where people were making more money, because they had the enhanced benefits, than their jobs. It was unbelievable. I know journalists for many years, got let go, and yet he couldn’t believe how much he was making. It was ridiculous. Absolutely ridiculous sitting at home making that kind of money.

David: So the positive and negative, what do you throw in the ambiguous category?

Bill: Well, the ambiguous is really the political leadership here. That’s what’s ambiguous is who’s going to take control? Is it going to be good or bad? I mean that’s what you don’t know here. There used to be, “Oh, the market liked divided government.” That’s garbage. That’s just nonsense talk. You’re throwing all this money in— the Democrats threw in here and worked for a while, but the problem is, what happens next? So if you think of what’s ambiguous in here, it is the role of the Fed and the government. All this fiscal and monetary policy. Is it ending? That’s what we don’t know. Are they really going to end it? Are they really going to slow it down? Powell tried to do this in the fourth quarter of 2018, right in front of the election. That really ended up blowing up. The Republicans lost control of Congress. So much for the Fed. There used to be a rule. You don’t do any changes in monetary policy six months in front of an election. He did it right in though. He did it in the election. The market fell 20— I mean, you go look at historically what happens to politicians when the market goes down big, the incumbents lose, and he did it. But now they want to do anything. So they know they’ve got a problem, because if the 2022’s coming up here, that’s why he better start talking taper and start doing it now. The Democrats will go out of their minds if he starts trying to reduce this summer and, by then, if inflation out of control, they’re going to be mad at him anyway, and he’s going to take the hit anyway. So I think the best thing right now would be is if Powell figured out that Biden’s not likely to re-nominate him, he does what’s right, not what’s politically correct.

David: And that has a market consequence. To tighten the credit markets at all. You got a lot of people buying call options. Maybe they should consider the other side of the trade.

Bill: Well, that will get interesting. If you ever send these people going the other way, what’s that’s going to pressure that’s going to put on that downside.

David: Can you imagine those kinds of volumes?

Kevin: That’s what I’m saying. It’s one thing the elephants graze in the grass of that. Well, you know what’s worse? Locusts. I mean, that’s why Lenin— was it Lenin was going to unleash the locusts of revolution. He didn’t say the T-Rex’s or the elephants. It’s the locusts, because that’s the hardest thing to control. And that’s what they’re finding out now in the market. They unleashed all these locusts on the option market and the meme stocks, whatever. 

And you know what? It always looks great when it’s going up. But you know it goes the other way. And when it goes the other way, oh my God, good luck trying to sell something. If you’ve got all these people with cell phones, trying to unload at the same time. They don’t even have to call their broker. Just, I’m shooting orders to the market. See that used to— that was their circuit breaker before is orders got congregated. There was only a few avenues to get them in the New York Stock Exchange in the over the counter market. Now you don’t have to call your broker. 

Before you— how many phone calls could a broker handle? If he’s got 200 customers, they’re all— they’re calling to sell, how many can he talk to at a time, even if he has an assistant? And that was part of the market breakers. Now they don’t need that. You just zip the order right down there. That’s why these moves get so explosive at times. And again, wait until this stuff goes on the downside, it’s going to be unbelievable.

David: That’s what Leon Cooperman was talking about to some degree the other day. Don’t be surprised when it goes, when it breaks, it’s going to break hard.

Bill: You can’t even fathom. Can’t even fathom how this— ’87, I always tell people, “Yeah, it was down 508.” “Oh, it was down 508.” I said, “No. The real number was down 750 to 800 because that’s where the futures and the options were trading.” But they couldn’t put the stocks in line where the futures were trading. But that was the real number. Now, if you would’ve been showing down 750 instead of 800, it would’ve been unfathomable. I mean, that’s why they were so scared the next day because where the futures and options were trading, it was much worse. 

In addition, and I was running trading desk in New York at the time, major brokerage, you couldn’t get brokers to pick up your phone. You couldn’t get the $2 guys on the floor. You couldn’t get the over to counter guys to pick up. You heard customers were complaining, “Oh, we called.” They couldn’t pick up because the old communication system was the circuit breaker. 

And that’s my point now. Now just hit the button to sell. You don’t need to pick up your broker. You don’t need to get a broker. And then your broker calls the trading desk. And then the trading desk calls the trader on the floor. Those three or four lines of communications, they all shut down in ’87. Otherwise, I can’t even fathom how much the market would’ve been down. You just couldn’t do transactions. Now zip it right to the floor. No telling what’s going to happen. I mean, it’s not actually the floor, you just zip it right to the computers. That’s what’s lurking out there.

David: About every three or four months, there’s a tension in the mark where it goes unresolved and you can tell that something’s building, and usually somewhere in your letter, your caution antenna is way high. And you’ll say something like, “Just be careful. If you don’t have to play, don’t.” And it sounds like the antenna is somewhat up.

Bill: Oh, it’s up huge here. What gets you through crisis is when you look and you have leadership. If you have a Paul Volker at the Fed, or you could see a Reagan in the White House or whatever. Somebody that’s going to get you through this. And even if you don’t have those guys, if you look into the first Gulf War, for 15, 20 years America— the media just slandered the US military. But in that Gulf War, and of course they had new tools, they put those— General Schwarzkopf and some of these other guys out and they were— whatever. And people were stunned and they saw these guys had degrees from Princeton. Advanced degrees. West Point they got advanced degrees, masters or doctorate in war college, and they were explaining stuff and they were going, “Oh my gosh.” And then you found out these guys were lieutenants and captains in Vietnam and they vowed they’re never going to allow that to happen again. There was incredible leadership. That’s gone. Obama threw out all the hard-nosed guys. Brought in 200— that’s why you got what you’re going on here. Anybody wasn’t loyal, you don’t get promoted. You’re gone. Threw them out. And Trump never moved to fix that. He hired Milley. He brought in Mattis. He brought in McMasters. He brought in, oh my gosh, I can I picture the guy. He was from Boston. It was his Chief of Staff. Kelly. That undermined him. They were Democrats. There was a reason he was unsuccessful is he didn’t know what he was doing as far as bringing in the people. One guy can’t do it. It’s all the people around him. That’s with the leadership. You see going on here. You saw what’s going on in Afghanistan. And that’s not just on Biden. Look at the people. That they didn’t know what they were doing. Well, there was the Department of Defense, the top generals, the State Department, HHA, what’s going on here? You just don’t have this. You don’t have the people, serious people, that came through whether it was World War II or the Korean war or the Vietnam war or whatever. You got the people in here now that, oh my gosh, that’s what I’m talking about, the leadership. When it starts falling apart, where are you going to fall? Who’s going to stand up, who’s going to be the leaders, who’s going to pull this thing together? And I don’t see them at the Fed right now. I don’t see Yellen being anyone that’s going to inspire confidence at Treasury. You know. And right through the whole list. So, that’s going to be the challenge. What’s your leadership? Are you going to run Joe Biden out to read the teleprompter? Kamala Harris? Good luck.

David: Good luck. Good luck. Well, again, appreciate you sharing what’s on your mind. Thanks, Bill.

Bill: Take care. Thank you.

Kevin: You’ve been listening to The McAlvany Weekly Commentary. I’m Kevin Orrick, along with David McAlvany and our guest today, Bill King. You can find us at M-C-A-L-V-A-N-Y dot com, and you can call us at (800) 525-9556.

This has been The McAlvany Weekly Commentary. The views expressed should not be considered to be a solicitation or a recommendation for your investment portfolio. You should consult a professional financial advisor to assess your suitability for risk and investment. Join us again next week for a new edition of The McAlvany Weekly Commentary.

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