AeroVironment (AVAV) reported incredible earnings yesterday, sending the stock up more than 20%. I start today’s show with a breakdown of the results… and why the massive demand for AVAV’s products won’t slow down anytime soon (hint: it’s an unfortunate side effect of global politics).
I’m dedicating this podcast to an important—and polarizing—topic: de-dollarization. Some folks believe the U.S. dollar is about to lose its status as the world reserve currency… while others insist it could never happen.
I go over the factors behind the dollar’s recent weakness—including how the U.S.’s actions are driving our enemies closer… whether the dollar is actually at risk of losing its status as the world’s reserve currency… and the one asset primed to soar as de-dollarization continues.
Be sure to tune into tomorrow’s WSU Premium, where Daniel and I will dig deeper into de-dollarization… and highlight more ways to profit from the trend.
- The unfortunate truth behind AVAV’s blowout quarter [1:15]
- De-dollarization is real [5:50]
- Will the U.S. dollar lose its reserve currency status? [10:50]
- What’s driving countries away from the U.S. dollar? [13:05]
- How I expect de-dollarization to play out [19:25]
- This asset will benefit as the dollar weakens [33:25]
- Tune into tomorrow’s WSU Premium [38:27]
Wall Street Unplugged | 1071
Will the U.S. dollar lose its world reserve currency status?
This transcript was automatically generated.
Announcer: Wall Street Unplugged looks beyond the regular headlines heard on mainstream financial media to bring you unscripted interviews and breaking commentary direct from Wall Street right to you on Main Street.
Frank Curzio: How’s it going out there? Its September 6th.
I’m Frank Curzio. This is the Wall Street Unplugged podcast where I break down the headlines and tell you what’s really moving these markets.
It’s kind of nice when nothing’s really going on.
Earning season’s basically over, you get to digest everything.
You go back listening to conference calls.
You still have the economic data here and there.
You look at all the news channels, trying to fill up time and try to make stories outta nothing or whatever.
It’s kind of funny, but I, I really like this time.
It’s the time where I find lots of ideas.
You’re not covering everything when Nvidia coming out and Microsoft coming out.
You’re looking at the details.
How’s the impact of the sectors, the regions, what’s going on? You know, AI, all these trends and everything.
Now it dials down a little bit.
Now you could, you know, you rest and, and it’s a lot of fun for me, this is the fun part, researching, trying to find ideas.
The only company I really cared about this week wa, was our environment.
So, A V A V.
Uh, they don’t report during like traditional earning seasons, kind of like off earning season.
Uh, there’s a long time holding our longest holding in, in Curzio Venture Opportunities, which we’re up a lot on, right? I mean, we started recommended this in the twenties and we added here and there.
It’s, you know, over a hundred dollars.
Uh, but the drone manufacturer, one of the, the, the pure play drone manufacturers that, that have the most amazing drones.
And that’s everything that’s going on in Ukraine, and Russia, right? A lot has to do with drones.
It’s, it’s an area where if you learn about events, budgets getting cut, they’re never ever gonna cut this.
This is the most important part of their budgets.
And these guys make the best of the best.
So I always thought that they would get taken over.
’cause even though the stock’s a hundred, it’s, it was a $2 billion valuation, two and a half billion.
Now, you know, it’s been a little bit higher, but they just reported yesterday, and they blew out the numbers.
The stock’s up 25%.
No surprise to us.
Uh, again, this is Curzio Venture Opportunities.
Uh, but we also recommend Dollar Stock Club at, at we down a little bit going into the quarter, but now it blew out the quarter.
And, and, you know, it’s doing exactly what we figured it would do.
It’s kind of like this under the radar name.
Uh, but now it has a 3 billion markup.
It’s still relatively small because I think they’re gonna do 700 to $800 million in sales.
Uh, I mean, this quarter sales came in 40% higher than last year.
How many companies can really say that outside of Nvidia? Not many.
Most companies are seeing a small decline in sales this earning season.
Year over year.
This company’s growing 40%, right? You have this catalyst, this never ending war.
No one’s ever gonna end.
They have no interest in ending, right? Uh, one of the most corrupt nations in the world that’s listed as Ukraine, where I’m sure billions of dollars being funneled, whatever.
But it’s almost like a do or die, where every one of Ukraine’s gonna die or we’re gonna win this war, which they, they can’t win.
That’s the solution right now, which is just mindboggling to me.
Mindboggling to me, as someone who gives a s**t about people’s lives, there really is no effort to, to, to negotiate.
But again, our job is to find ideas for you.
And this is one of ’em, right? If there’s gonna be stupid policies and idiots, which we have all across the political spectrum, let’s make money off these idiots.
And that’s what we wanna do.
We also recommend, like I said, Dollar Stock Club.
So I’m happy for those guys.
But these guys, I mean, going into the quarter, and this is their fiscal first quarter, they’re supposed to generate $2 and 60 cents in earnings.
That was the forecast.
They, they generated a dollar in the first quarter.
Just shows you the, the massive growth, right? So it’s great to see it pop.
And, and Dollar Stock Club, if you’re not familiar with, that’s free to all Wall Street Unplugged Premium members, which is just $10 a month.
And Dan, I debate like the biggest stories in the market.
We s**t tons of ideas, tons of stocks, ideas, and, and, and, you know, we take one of those ideas each week and put her in Dollar Stock Club in that portfolio.
Again, you have access to all list $10 a month.
But, um, Dale and I will really get into numbers tomorrow on, on Wall Street Unplugged Premium and break down, a V V, because there’s a lot more to talk about.
We’re gonna talk about a few other things on that podcast.
But today’s show, I wanna dedicate to a topic that’s incredibly important, something that’s gonna impact everyone’s portfolio.
However, when this topic is mentioned, it’s usually mentioned by crazy extremists that believe the US is going to end.
Or by the other extreme saying that you’re an idiot.
If you think this is gonna happen, you’re a moron.
It’s never ever gonna happen.
In other words, it’s like every subject or topic these days in terms of transgender climate change, right? You, you gotta spend 5 trillion, well, could we spend 4 trillion? You’re, you, you hate climate change, you’re an a*****e, right? That’s the way our, our politics are, right? It’s yes or no, illegal immigrants abortion.
You can go on all these topics, right? You have to pick a side.
You, you can’t be in the middle.
You can’t be in the middle.
Even though 80% of Americans are really in the middle of all these topics.
But you wouldn’t think about it if you’re watching the extreme shows.
And if it’s Fox Business, you could have friends at Fox.
I have friends at N B C, I’ve been on N BBC as well.
And, but you know, the M S N B C cry, I mean, you know, just extremes when you watch these shows, you wanna go out and beat the s**t outta someone.
I mean, there, there’s no happiness.
There’s no, that’s why I like TikTok as a platform.
I mean, Twitter, I used to love, I used to post a lot.
Twitter’s become like the ultimate pump and dump.
It’s not just crypto.
I mean, it’s every, you know, just people that I know.
It’s like the, the ultimate, you know, let me pump this up and what I’m doing great and pound my chest.
And, and you know, you see the anger there in the back and forth.
And sometimes I’ll call out people where I just like watching TikTok ’cause it’s fun and I’m laughing the whole time watching videos, and it’s cool.
And you know, it’s just crazy the way society is right now.
But the topic I’m talking about, I won’t drag this on any longer, is D Dollarization.
And I remember listening to Doug Casey in the eighties, right? Saw videos saying the dollar’s gonna lose his reserve currency status.
He’s, I’m friends with Doug.
I, I like Doug.
Uh, you know, telling people like to get your assets out of America, it’s coming.
You know, buy gold.
It’s the best safe haven.
Even though gold is not the safe haven asset people turn to when the s**t hits the fan, it’s always a dollar.
It’s always been, I remember Porter, his friend, had, the End of America video, which, you know, blew up that company.
I mean, holy cow, you wanna talk about increasing your total addressable market of newsletters.
I mean, they thought that they had most people that were gonna subscribe to newsletter on their list.
And then they added, I that number might have been 50,000, don’t go crazy.
And then they added, I think, over 200,000 new subscribers, you know, just showing how crazy the debt situation is and everything.
But that the thesis for the end of the, of America was for the dollar to, to crash, right? And just continue to crash starting 2013.
And what happened? The exact opposite.
The the dollar surged, right? We’ve heard this call so many times and, and extremists and alarmists, I’ve spoken at major mining conferences, listened to, to 30 year vets tell me how the dollar was due.
And to be honest, I was laughing at them.
Uh, you know, I poke fun at this thesis since the dollar was never gonna lose its reserve currency status.
I mean, we, we have the large military, right? We protect tons of nations.
We always pay our debts.
Deficits never matter.
They don’t matter unless you stop paying, right? And we never stop paying.
We always pay our deficits.
Different story today, it’s getting outta control.
And we’ve seen defaults from China, a trillion dollars here.
And, and you know, it’s getting crazy, right? It’s getting nuts now.
Uh, but, you know, looking at that in the past, I was like, come on guys.
You really believe that? And like, buy gold by, I mean, you’re not gonna see, you know, people piling to the W or rupe and not even the euro.
When, when, when, you know, especially Euro, right? Most of those nations are in terrible, terrible shape and economic growth debt.
And, and the fact they have this universal currency, and then every one of ’em have their individual currencies.
I mean, you know, you’ll, at the Euro zone, Germany’s a lot different than Italy, right? So, and you’re like, what the hell? But we have to come to the same umbrella and bail you out and, and things like that.
It, it’s, it, it’s tough.
It doesn’t really work.
Uh, but when we look at the landscape today, it’s clearly changed.
And we’re seeing de dollarization, right? Fewer countries using the dollars as the reserve currency.
And if you look at that, these are facts.
You look at 1970s, US dollar share of total global reserve currencies was 80%.
In 2000 it fell to 70%.
But now look at recently, so 2016 it was like 67%.
Today it’s 58%.
And a lot of that decline is coming 2022 alone.
So the US dollar saw an 8% decline in its share.
Global reserves, total global reserves.
This is a real trend.
Now, on the other side, when people debate this, you hear people say the dollar’s never gonna lose reserves.
I see people say, I travel around the world and every cab driver wants my US dollars over their own currency.
You look at the 2022 global meltdown and the stocks, everyone again, rushed to the dollar.
This is all b******t.
And, you know, extremes is insane.
And I’ll be honest with you, right? We’re independent.
So I don’t care who I offend, I’m telling the truth.
And I do.
That’s why so many people listen to this podcast.
If, if you wanna make a fortune of the markets, stay away from these a*****e extremists.
And these are cults.
They re refuse.
They refuse to change regardless of the facts.
They just have a thesis.
It doesn’t matter.
The market’s gonna crash.
It’s gonna crash 30%, 80%, 70%, And every time it did, it did.
There was a buying opportunity because we’re inflating the market.
We’re buying bonds, we’re injecting more cash into it.
We’re inflating assets, we’re inflating multiples.
It wasn’t gonna happen.
You need to change your opinion.
And Teper said it best, I think it was 2010 or 11, you know what’s gonna go higher? Everything is gonna go higher because of what the government is doing.
And that happened.
Every asset class surged anything that you were in outside of gold surged.
And what p****s me off, you know, I don’t care if someone has an opinion and they have a strong opinion about it, I don’t care.
What I care about is these people who have this strong opinion about something.
These are the people that make a fortune regardless if they’re right or wrong, yet everyone listening to them gets annihilated.
That’s my problem.
I don’t care if you go down with the ship like the Lehman, CEO, if you go down with the ship, it’s fine.
But when you’re telling me something’s gonna happen and it doesn’t, and your net worth increases by three x over 10 years, when everyone listening to you and buying gold and buying everything else is getting annihilated.
That’s what I have a problem with.
That’s when it’s my job to call you out.
This is my industry.
I’ve been known this for 30 years.
That’s my responsibility, okay? I give a s**t.
So you got these extremists on both sides.
Say, ah, you don’t have to worry about you’re crazy.
Here’s the real story on de-dollarization and why all of you, every investor needs to pay close attention because it’s going to impact your portfolio.
So first, the dollar’s not gonna lose its reserve currency status anytime soon.
It’s like streaming.
Streaming is taking over the world.
No more cable.
Well, that’s what you would think.
And streaming is definitely has momentum.
It’s gonna lose momentum.
’cause most companies are realizing outside of Netflix, they can’t make money on streaming.
Good luck with the whole e s, ESPN, and Disney thing, right? ESPN’s been making a fortune off for people who don’t even watch e s, ESPN because of their cable bundle subscriptions.
Wait, they wanna come off and just provide streaming, and they wanna raise that streaming price to, to, you know, what is it? $5, like 10, 15.
That’s why I mean, s p n rents, they’re a renter of stuff.
They’re not a owner of stuff.
That’s why they’re having trouble getting a partnership.
But even today with streaming and how big it is, and most of us have streaming it, it’s still under 50%.
I mean, you look at cable and broadcasting is over 50%.
You would think it’s gone.
Again, when you look at the facts anyway, even though the dollar won’t lose its reserve currency status anytime soon.
It’s extremely important and very important as more and more countries are doing what they’re weaning themselves off the dollar.
Like China and Saudi Arabia just signed a new partnership agreement with future energy purchases.
And they’re gonna be paid in what in won for the first time in decades.
Saudi Arabia said, it’s open to trading it’s oil supplies and currencies other than the US dollar.
Iran and Russia agreed to connect their interbank messaging systems and bypass the US dominated swift banking communication transfer system.
I’ll get 10 in a minute.
Argentina, Brazil proposed a common currency for trade China and Latin America is Latin America’s biggest economy, which is Brazil announced they will conduct bilateral trade in local currencies, right? So circumventing the dollar, India, Malaysia agreed to settle a trade in Indian Rupe.
And he already pays Iran rupees for crude and compensates Russia and rubles for that crude and, and, and different things and products.
They have South Korea and Indonesia signed a dealer, promote bilateral trade in national currencies moving away from the US dollar.
All of these stories have happened for the first time in the past nine months.
Countries never did this before.
This is real.
And why is this happening? Well, it happened when the US decided to pull Russia from the SWIFT system, which was not on the table.
It was supposed to be sanctions on the table, whatever.
So the SWIFT system, that’s the electronic system used global trade, right? It’s used by the la I think it’s 11,000 of the large banks in the world to send money quickly around again, but their trading partners.
And by removing Russia, you essentially turned off their economy.
And every country was put on notice because they were like, whoa, s**t.
I mean, they’re looking at the US go, wow, the US could do this to us if, if something happens.
And, and it would shut down our whole economy.
So we need to do something about this right away, because I don’t know if, you know, we kind of know and we don’t think it’s a big deal, but look at the rest of the world.
We’re the greatest nation on earth.
We’re powerful, right? It’s again, by far the leading nation in the world.
So many different things, earnings, power, especially in companies and, you know, doing okay in the innovation part as well.
But everyone else sees how crazy things are where we can’t even identify the difference between a man and a woman right now.
I mean, they’re laughing at us.
I mean, there’s are real debates that you’re seeing throughout, you know, so many different places in colleges and our students and what the hell’s going on.
And more importantly, we’re, we’re pretty crazy when it comes to climate change.
I mean, we’re way, way, I mean, way past craziness.
I mean, California’s gonna force people in the state to drive electric vehicles.
They’re gonna force you to do that even though they don’t have the grid to support it.
I mean, there’s ambulances and everything.
So what happens if, if the grid goes down and, and you know, your grandma, your mother has a heart attack.
Oh, we can’t get her there.
You better have a good bicycle with something on, on the back to, to get into the hospital.
How do you get to the hospital? You a carrier.
It doesn’t matter.
But you gotta force people.
I mean, the climate change I I is, is insane.
I’m not saying that you don’t believe it, but the amount of money that’s going into it, and listen, it’s politics, right? If you get the government to pay for something, they don’t look at checks and balances.
They just write checks and say, okay, here you go.
I don’t give a s**t.
It doesn’t matter.
It doesn’t matter if we lose money, we just print some more.
That’s, they don’t run like a business.
That’s the quickest way to to, to become filthy rich.
I worked for Al Gore, he is brilliant.
I mean, he owns houses on the coastlines of California that he said 10 years ago that they were gonna be underwater, right? You hire a few crazy American actors that are famous to, to promote the idea and holy s**t, we’re gonna die.
And, you know, again, do we most people believe in, in climate change? Yeah.
Could we help? Yeah.
Do people wanna recycle? Yeah, but do we need 5 trillion where, you know, Texas, their whole grid goes down the winter and, and, and holy pipes freeze and everything.
And, and to, to the point where, I mean, look at Europe.
Look what happened.
Look at Germany.
I mean, during the war and relying on that, really, you’re gonna go after Russia, you’re crazy.
That’s that support.
40% of your energy needs, you’re gonna go after that country.
You’re outta your mind.
But that’s what scares all these countries.
I mean, what happens if China, Brazil, they don’t wanna participate in certain climate change initiatives? The US could press a button and shut ’em down off of Swift, right? Which is run by basically the US and also Europe.
They could press a button and say goodbye.
And everyone’s like, holy s**t, this is insane.
What is it? We don’t agree with the us, right? So, so now you’re seeing this, right? It’s real, it’s led from countries moving away from the dollar.
Now the dollar accounts to 58% of the global reserves in second place is a Euro the dollar went from 70 to 58% since 2016.
It’s not the Euro that’s gaining market share.
It’s every other currency.
So it’s fragmented.
Thus, the reason why the US isn’t gonna lose, they’re not gonna lose their reserve currency status.
However, for the first time in our nation’s history, this is a possibility, or I should say over the past 80 years, it’s a possibility not this is gonna be another individual currency capable of replacing the US dollar.
But this is why crypto factors in.
Maybe it’s why the s e c, even though they have no basis at all and no facts, why all these cases are getting reversed against crypto, why they want to get rid of crypto and not allow it.
Because every single country’s launching their own digital currency.
The US did it, which is a joke.
And think about all the disruptive changes that you’ve seen, all disruptive technologies.
How do you have disruptive technologies? You make it cheaper and you make it easier.
And you make it good for all parties.
And I always bring up Uber as the example.
It’s better for people.
I know that I, my daughter took a Uber the other day, and I’m not worried because they screen the drivers.
You know, you can get out, you don’t have to pay.
The cars are pretty nice.
Uh, you could, you know, the people are nice, it’s cool, it’s cheaper.
And then it’s great for Uber, obviously, right? They make a a a lot of money and huge margins if it’s much better than taking a cab.
But it’s better for everybody all around.
That’s how you disrupt markets and all technologies.
AI is gonna disrupt, makes things easier, more productive.
It gonna be better for a lot of people and a lot of companies, right? So the US is launching their own digital currency.
How does that benefit you? And me? It doesn’t, not one bit they’re launching because they want full control over you.
And this isn’t some conspiracy theory, but imagine if all the money was controlled and say, if I spent money on, you know, whatever, on, you know, a gas vehicle and then I just bought a building that emits high carbon emissions and, and I wanna buy another building, they’ll be like, Nope, you can’t do it.
You we’re not gonna let you spend your money on that, right? You spend too much good.
I mean, think about having that.
Well, you’re not gonna be able to spend on the things you wanna spend, say if it’s like, you know, weight loss or weight.
We have these weight loss drugs, but oh, you know what? You have McDonald’s five times and you know it’s gonna lead to your heart failure and you know it’s gonna cost insurance companies even more.
So we’re not gonna let you buy fast food this week.
Why would the US create a digital currency? It doesn’t help us at all.
I mean, I could transfer payments a million different ways, Zelle, and, and, and, you know, wired transfers, and maybe I pay 20 bucks.
There’s no reason why they, they need to do that, but they’re doing that.
Why? That’s the control.
That’s not why every other country’s doing it though.
Because I believe as these countries launch their own digital currency, they’re going to launch a universal digital currency.
Because again, no country can compete with the US on its own, but when you have oil coming from Russia and the Middle East, right? Where the US p****d off both nations, right? We blew up the Russian pipeline.
If you don’t believe that, I mean, come on, gimme here.
But Russia blew up its own pipeline, right? That’s what we’re telling right through the media, right? Just like the media and all the s**t that they told and how, you know, COVID, I I is killing more than three point a half percent of the people.
And remember that they, they ripped, you know, Donald Trump for that.
And turns out it was less than 1%, right? I mean, again, the whole agenda with the media, right? So, so you’re p*****g off Russia, you took ’em off Swift, and then, and then you’re promising OPEC that you were gonna buy back the oil that you depleted from the S P R, right? Strategic oil reserve from the Saudis.
And, and, and, you know, now you p**s those off.
Now they’re PAs.
Now you have a lot of oil.
Holy cow throw in China and India, who also pretty much hate the US and they control what 40% of the world’s population also can produce goods very, very cheaply.
Now, you throw in Brazil, along with the 30 other members who wanna be part of the bricks cult.
And, and now you have an alternative to the us.
So it’s not one country by itself, but man, all these countries together, it makes sense for them.
And that might sound crazy to you, but the US is the reserve currency because it’s backed by the full faith of the US government who will always pay their bills.
So what does this mean? It means if that happens, an alternative currency, I mean, do I sound crazy saying this? I’m not a crazy person.
I, you know, you listen to my podcast, I don’t have like conspiracy theories and all this s**t, and you know, it seems pretty real that something like this could happen.
But if they have an alternative currency, the problem here is not gonna be backed by the full faith of the US credit.
It needs to be backed by something and that’s something’s gonna be gold.
And that explains why every central bank has been aggressively buying gold over the past two, three years, demands at a half century high.
I mean, gold used to be 6% of total reserves.
This is in 2021, it’s closing out on 10%.
And the buying is being led by who? Russia, China, India, Turkey, the Saudis, the same countries that are now doing all these deals in non-US dollar currencies for the first time ever, by the way.
And why is this door open? It’s open for the first time because of politics.
And what do we do? We call the Saudis and told them, listen, we’re gonna release oil from the strategic petroleum reserve, which every president does for the election.
You wanna get oil prices down, I get it.
Right? So that conversation goes like this.
The US calls us out and says, Hey, you know what? We’re gonna reduce oil from the S P R, it’s gonna bring prices down temporarily so we can win the election, okay? So please, whatever you do Saudi, don’t cut production ahead of the election.
And if you do that, we, the US will promise to buy a shitload of this oil back from you next year when we win, right? That’s to how the conversation went.
The US supposed to buy back that oil from the Saudis.
And you know what? It didn’t.
And we didn’t for several reasons.
And when it came down to the sixties, and that’s when we’re supposed to buy it, and we said we’re definitely gonna buy it by October.
We’re supposed to do it, I think in April, may, June, July when, oh wait, October was like the cutoff date, and then we had the debt ceiling.
So we didn’t have the money to do it.
Now we’re heading into an election year.
There’s no way that we’re gonna do it now, right? It’s a reason why oil is surging $90 a barrel.
It’s going higher and higher, right? We also screw Russia by taking ’em off the swift system and doing this.
We helped unite China, Russia, Brazil, India, even European nations, our allies, right? You look at the UK and France and for the first publicly, they’re going out publicly during summits saying, Hey, you know what? We need to reduce our reliance on the US dollar.
They’ve never said that.
I mean, they, they talk a big game or whatever, but not at summits when you got your flag show in different countries saying, Hey, you know, we gotta, we gotta get off the US dollar.
Now the funny thing is, this could easily be stopped and we’re the United States of America, the most powerful nation in the world.
We’re the one that buys so much stuff from these countries.
We could place tariffs on every nation if we wanted to.
Similar to what Donald Trump did when fe what was it? Macron French president says he is gonna live a, a, a thir 3% tax on large tech companies and it’s a done deal.
And then Trump called and said, no, you’re not doing that at all.
And he said, sorry, it it’s done.
He goes, well, if you do that, we’re gonna put a hundred percent tax on all your wines and every product you import into the US Mccm said, all right, we’re not gonna do that.
It’s that simple.
That’s what happens when you are, when you’re in power, which we are.
I mean, we have total control over China.
They have rare earth Metals and stuff.
We’re the ones that buy everything from China.
And right now we’re in perfect position to do a deal with them since they, they, they, they have no leverage.
Their economy’s absolutely, you know, they’re doing everything they can and trying.
They tried a lot of measures so far on the recent ones trying to get a bid in the market.
I don’t think it’s gonna really work too much.
And things are really, really, really bad in China.
Really bad in China.
We covered that for, for months and months and months through great sources.
And I appreciate all those emails that I get from, from those great sources in China.
But you’re looking at this saying, what this could easily be avoided and we’ll buy all this stuff from China.
Uh, we’re p****d at China, we’ll buy it someplace else.
It’ll be a little bit more, we’ll pay a little bit more and that’s fine.
But we have lots of control since we are the biggest trading partner for, for, for many of these countries.
That’s the power we have.
If we have the right administration in there, and I don’t care if you hate Trump and I don’t care who it is, but you know, the fact that we’re not doing anything is leading to this.
And this is significant, but we don’t have the right administration.
And that’s why we’re in this crazy position where we’re seeing all this stuff.
This is really, these are real numbers.
Now why is this important to your portfolio? And that’s the big question.
Why is it gonna impact you? Why am I talking about this for? Well, when you have great trading partners, which we’ve always had, especially China, Asia, India, what we usually do as a nation is we’re importing deflation.
A lot of products are produced much, much cheaper.
And this has helped us out of every major crisis dating back to World War ii, right? We recycle the trade surpluses into US assets, which is debt.
And we had domestic energy over the past 12 years where I became energy independent until recently, since we don’t wanna be energy independent anymore, right? Which is insane.
Uh, we’re talk about natural gas, right? Natural gas is now a terrible fuel, right? That you know, less natural, we gotta produce less, right? It, we’re still gonna use the same amount of energy, right? So it’s the world, right? The global climate change, if you’re in climate change, if we’re not producing it, the US it’s gonna be produced someone else which is gonna destroy the climate, right? So it’s gonna produce someplace else that we’re gonna import it from.
So why not just produce it here? Nobody wants to talk about that, right? No one gives a s**t, right? Who cares? Climate change, right? Just no facts, no nothing.
Just, we need to spend more money, right? Anyway, that’s what we used to do.
Recycle trade surplus and US assets and debt and domestic energy and shale.
So importing deflation and having this debt demand made it easy to control inflation using monetary policy, which we’ve done for so many years.
But today, notice how inflation is not crashing.
It’s come down, it’s still extremely high, extremely high.
I mean, we’re over 4% inflation to put in that perspective.
We haven’t had annual inflation over 4% since 1991.
It seems like it’s nothing because we were at 9%, almost 10%, but it’s still extremely high.
That’s why the Fed ‘s telling you, we gotta continue to raise rates.
We’re not ready to pause.
They’re not saying, Hey, we’re definitely pausing, which we’re waiting for.
People have been saying that they’re gonna stop forever.
I believe they really need to stop now.
First time I said that a couple weeks ago, but how many people on TV that you know that said we were gonna stop, and this is December, November, December, January, February, we’re done, we’re done every investment for Goldman Sachs.
All these people, everybody we’re gonna stop.
We’re gonna stop.
Well, Powell has stuck to his guns and said, we gotta get down to 2%, otherwise we’re gonna keep raising.
And they have.
But think how crazy, notice how inflation’s not falling like a rock, which every economist predicted over a year ago when we started raising rates.
In fact, Powell said, he said, this is a person that’s brilliant.
I don’t care what you say.
I know it’s nice to kill the guy and just be like, he’s an a*****e.
It, it, it’s, that’s what, it’s almost like booing, the N F L Commissioner.
You gotta boo the N F L Commissioner, right? You gotta boom no matter what.
Even though you know, again, you have your opinions on him, but you know, the N F L is what it is and how big it is today.
And he’s has a lot to do with that.
But you gotta, right, you gotta boo Powell, right? That’s, that’s common.
You have to do that.
But this is a guy that that, that his whole life has been economics, studying, learning surrounding himself by the amazing people.
And he said that inflation, this is just 18 months ago, it’s gonna be transitory.
We’re not gonna really need to aggressively raise rates.
That’s what he said.
Notice how inflation rating subtly high, even though we raise rates by over 6000%, was it point 25 to 5.
3%, the fastest increase in rates in the history of the Fed and this’s.
The reason why we saw Fitch downgrade the US debt rating from AA to aaa, right? Nobody wants to talk about, oh it’s, you know, that does have to do with politicians and what they’re doing.
But this is leading to all this other s**t that I just mentioned.
And again, the us, they’re not gonna lose their reserve currency status, at least, probably not in my lifetime.
But it still has massive implications for your portfolio.
And a quick example of how I learned about currencies and the importance, again, I’ve been doing this for 30 years, which means I got my ass kicked a lot.
And that’s why I like coming here and teaching you lessons.
That’s why I embrace when I get things wrong, because that’s an opportunity to learn.
And you wanna be perfect in an industry that you can’t be perfect in.
It’s kind of like you don’t win at golf ever.
You never win at golf, right? You can’t win a golf, you go in a tournament.
But if you shoot a 59, you’re gonna go out there and say, I gotta shoot a 58.
You’re not gonna quit golf.
I said, okay, I shoot a 50 59, I’m good.
No, same with the markets.
You’re always gonna get stuff wrong.
You always learn.
And one thing that I learned about currencies, it was around 2015, so a few years earlier than that, 2012, 2013, I invested in a few mining companies and the market started to crash.
Of course, commodities, at least gold and silver.
Uh, but I got five-year warrants on many of those private placement deals.
And I thought a lot of these stocks, I’m like, ugh.
You know, they’re probably, I just kept them and, and you know, just forgot about them basically.
Now, this was back when the US dollar was trading on par with the Canadian dollar.
So no big deal.
But in 2016, the markets, the commodity markets started to turn positive.
Gold and silver caught a bid.
A lot of JU stocks I bought through private placements started to surge.
And guess what? My warrants on a lot of these, again, these five-year warrants were now in the money.
Meaning if I bought into a private placement at a dollar, maybe the warrants were exercisable at a dollar 60, maybe, you know, just as an example, yeah, a lot of these stocks are trading at $2 and above.
So my warrants were in the money.
So when I exercise them, I received say, $2 exercise, I had to buy em 60.
I could sell it to, okay, that’s nice.
It’s around a 25% gain.
I’m like, okay, cool.
You know, and expecting a check, a nice check, right? It just, you know, ’cause I had to convert them back to US dollars.
And this is 2016.
And, and that was the rude awakening because, ’cause I expected a check saved for, you know, whatever, if it was 25 grand or something.
And I actually lost money since I bought the private placement in Canadian dollars, which most of us have to do when we’re investing in junior minors, right? Most of ’em are headquartered in Canada, Vancouver, Toronto, you guys know it in, in some of my newsletters.
You know, you have these, you gotta take the legends off.
You have to have an account in Canada a lot of times and they charge you a lot to do that.
It’s a little bit of a pain in the ass.
But this is where, you know, I get a lot of great deals ’cause I spent a lot of time and, and worked my way up in that industry to, to, you know, get deals, with the best of the best in that industry, right? But from 2012 to 2016, the Canadian dollar depreciate around 30%.
Like holy s**t.
So that’s when you realize currencies matter.
Uh, you know, another good example is, is the athletes wanna get paid in euros.
Remember that they traded 30% premium to the US dollars around from 2008, 2014.
You know, a lot of ’em like, oh, I wanna get paid in euros and euros, you know, but you don’t hear that anymore since 2020.
It’s basically averaged less than a 10% premium.
And I think it actually traded the year, traded a discount to a dollar briefly.
Uh, I think it was the last quarter of 2022.
Nobody wants yours, right? Nah, nah, I don’t want yours.
Okay? Dollars are good.
Now those are examples, but currencies matter and they matter for your portfolio.
And that’s why you need to pay attention to de dollarization.
’cause it’s a big deal.
Don’t listen to extremists like, oh my God, it’s, you know, the dollar’s gonna lose reserve currencies.
If that happens, you have more problems in your portfolio.
Chances are someone’s gonna be like, you know, looting your house, there’s gonna be no co it’s gonna be an ultimate disaster if that happens, right? Uh, on the other side they’re like, oh, you don’t have to care about it the dollar, you do have to care about it.
I mean, the dollarization is gonna directly to much higher oil and gas prices.
Notice how the Saudis, what did the Saudis do when when the US I won’t curse, I’ll curse.
They f****d them, right? So the US right, in fact decided what happened.
They cut production by over a million barrels in April.
It surprised the hell outta the us.
They’re like, whoa, what are you doing? They would’ve never did that.
They did it by surprise.
He did it ’cause Biden promised to buyback oil from the Saudis in October and never did it.
So you have higher oil prices, then you’re gonna have what? Higher natural gas prices.
It’s gonna lead to what? Higher uranium prices.
’cause that’s an alternative.
And now you’re seeing a huge shift in politics where the naysayers are finally coming around to uranium.
It’s not because it’s the cleanest fuel of the world and has 24 baseload, solar and wind where you need the wind to blow and the something to be out for that, to generate power.
Not for nuclear.
It’s the best source of energy ever.
They already know that.
It’s not that.
It’s because you know, you have more lobbying which resulted in politicians changing their minds, right? It’s all about money.
You might be like, Frank, you know what? That’s a crazy theory.
You might think I’m crazy, but outside of a brief, brief three week period between April and May of last year, uranium right now is trading at 11 year high.
Look at gold.
And by the way, learning and, and spending time in Vancouver and on panels for 20 years and all this stuff and listening to all extra, you know, I did not like gold for a while because you know, I said it deserves a, a place in your portfolio, some place in your portfolio.
Recommended some stocks here and there that I thought wwo would, you know, be okay.
And, and that didn’t really work out until 2016, 17.
But for most part, when you have, you know, low interest rates and, and the market going much, much higher, nobody really wants gold.
Why the hell you want gold for? But today there is a great, great, great case to own gold.
And I believe gold’s gonna skyrocket from here.
’cause these central banks, this buying from this is not gonna away anytime soon.
And I’m not talking about buying gold ’cause I was told past 20 years, buy gold.
’cause it’s a safe haven b******t.
It’s not a safe haven.
The dollar’s a safe haven.
I was told to buy gold because of negative interest rates.
As long as we have negative interest rates.
Meaning that if if inflation’s higher than the risk-free rate, that’s negative, right? So you see negative rates and that would force people into gold because if you don’t have negative rates, gold doesn’t pay interest.
So you might as well go into interest-bearing stuff that you know and risk-free, which we have now 5%, right? So that was BSS negative interest rate.
’cause we had negative interest rates pretty much for the 12 years.
Gold is done.
I was told to buy gold as an inflation hedge.
Again, over the last two years.
’cause we’ve never seen higher inflation outside of the eighties than we saw.
And what happened to gold? No, it wasn’t the inflation hedge.
That’s not why I’m telling you to buy gold.
Let everybody else buy gold because of those reasons.
And they’ve held ’em for 20 years and underperformed the market by man.
Hundreds of percent.
That’s their problem, not your problem.
Today, the case of gold for gold is fundamentally driven.
There’ve been hardly any elephant discoveries over the past decade.
Little capital going into the sector, little CapEx has been spent to find these new gold discoveries.
You haven’t really seen, you’ve seen a few consolidation, right? Newmont and what was it? New gold, whatever, whatever you’ve seen, you seen some consolidation, but you’re not seeing it.
Even the junior miners that have decent projects, you’re, you’re not seeing these things get developed yet.
Demand is going for through the roof right now.
This is supply demand.
That’s the best way to drive up something.
That’s why you drive up copper, you know, oil, gas, this is what drive these commodities.
It’s like, hey, we need a safe haven.
Well, you know what? That kind or inflation hedged and that kind of died down with Bitcoin.
’cause Bitcoin is probably, is a much better inflation.
Hedge limited supply.
You got the Halfing coming up and what is it, how many, I don’t even know how many, I think 75% of, of the Bitcoins have been produced.
But over the first 15 years there’s been existence around 15 years.
But now to 2040, whatcha gonna have only 6 million produced ’cause of the Hings and the Hings coming out recently.
And by the way, if you follow Bitcoin, ings usually running up to the Haling, which is April, 2024.
I covered this in my, in my Curzio crypto newsletter.
So Crypto Intelligence, why this is important in April, not only are all these ETFs are gonna be launched, which is massive demand.
First time people gonna have access to, to, to Bitcoin without having wallets and all this stuff the first time ever, right? We talk about trillions and, and tens of millions, maybe a hundred million people for the first time as these ETFs are gonna get improved later this year.
But the Bitcoin halfing and when you see the Bitcoin handful, it’s a reason why you always run up into it.
And then after it, the year after it goes up tremendously, tremendously.
The year after every single having it happens every four years.
So you got a lot of positives, you know, little weeks on crypto right now.
But just, you know, hold onto some of that stuff much better than gold in terms of inflation hedge.
But when you’re looking what’s gonna drive gold, you wanna see the supply demand imbalance and that’s what you’re seeing.
So when you’re looking at D Dollarization, it’s huge.
I mean it’s gonna impact your portfolio and being out of these sectors, especially in economic climate that we’re going into, right? We’re go, we’re going into recession, we’re not going into recession next month, we’re going into recession.
Now Goldman Sachs just came out and said there’s a 15%, only 15% chance of us going into recession, back and forth, back and forth back.
You know, this is uncertainty.
This is not good.
I know higher interest rates are crushing some companies and other companies are, are managing well.
But you’re gonna continue to see this right now where, where you know, companies just, holy cow, good with Dick’s Sporting is good and bang, 30% decline.
You can only cut costs so much.
You can only cut inventory so much.
Eventually you have to see your sales increase and they’re not increasing for most companies.
So you look at the dollarization, it’s real.
Doesn’t mean the US dollar’s gonna lose its reserve currency status, but it’s gonna have massive implications and we’re definitely seeing it right now.
Oil uranium, you’re gonna see it in gold pretty soon.
I expect silver to do well and follow on its heels.
Big impacts here.
Now tomorrow, Dan and I are gonna tell you the best way to position yourself for this, which will include individual stocks to buy along with one name or favorite name, which would make its way into Dollar Stock Club portfolio.
And tomorrow we is our, our premium podcast.
We show our premium and we charge $10 a month for that.
And if you bought a V aav, which is down a little heading to court up nicely now that that pays for, for the year, for that for the Walland Club Premium, right? This is a podcast where we share actual stocks, we share these ideas.
That’s why we charge for it.
I don’t wanna give away that stuff for free, but it’s probably the best deal you’ll get on any investment product.
And thus far the reviews have been outstanding.
Almost every one part of those products have been buying other products because, you know, they see us talking about these trends in depth and saying, these are the stocks you have to benefit, right? And we want to put that behind the paywall and not give all that away for free.
And now, you know, that’s what you get for the $10 a month, which, you know, we’re doing very well selling that and a lot of people are happy and, and I’m happy to, to provide that product.
’cause it does give you at least one trading idea every week, which goes into Dollar Stock Club, which you have full access to under the Wall Street Unplugged Premium membership.
So you guys are interested in that.
You go to website, Curzioresearch.com.
Again, that was created.
If you’re looking for ideas, there’s a newsletter, trading newsletters that go for a thousand dollars, $5,000, $3,000.
I know I’m in the industry.
This is $10 a month for that.
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It’s not on iTunes, but if you’re interested go to Curzioresearch.com and you could subscribe that way.
So guys, that’s it for me.
Looking forward to breaking this, all this stuff down for you.
Individual names in Wall Street Club Premium podcast tomorrow with Daniel.
Be really cool and I’ll see you guys then.
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