 a very special guest, John Fennick from John Fennick Consulting. How are you doing today, John? Hey, very good, Rich. How are you? I'm doing fantastic. And I want to talk to you about some key things today. Since inflation and CPI is some of the key topics on people's minds today, I thought we'd go through some effects on the two, on the economy and investments. How do you think that affects the economy and investments these days? Well, the Fed is obviously laser focused on lowering CPI to their 2% target. And a number of people in my sector and the mining sector have disregarded this all of last year and into this year. And we have said on Kiko March and June of last year, as early as that, that the Fed means business. And until they stop hawkish kind of verbiage, then you have to be cautious of that. And not day trade, but you have to be trading rallies, right? A rally would have been if you look at March of 2023 when we had the financial crisis. Gold and silver responded very nicely to that. And that was like a four, five, six week rally. And then it faded, right? So, I mean, you can't just buy and hold at this point in the Fed cycle, in our opinion, because the Fed isn't done yet. And they just kind of said this on September 20, during Powell's, you know, presser, he said, you know, we're going to be vigilant and get this done. And to us, that means a November 1st or the December meeting, the 25 basis point hike is on the table. And back that up, you had 12 of the 19 members say that they wanted a hike by year end. So, you know, this all is not really wonderful news for the market. As you saw the broad market reversed on Wednesday, the 20th had a really bad day on the 21st. And then tried to rally yesterday, but failed and finished down actually again. So, you know, there's really nowhere to hide in this environment because we're at such high levels in the broad market. And we've said on your show before, and we've said since May of this year on multiple shows that we're not in the camp that the broad market makes new highs. And I know you feel the same. We've seen the S&P, ASDAG, a lot of these major, major industries try and fail. And that to us is actually a good thing for gold and silver investors because it will be made all-time highs again. That would have been a really difficult setup. So, the consumer price index, the CPI, is a key measure of inflation. How is the CPI calculated and what does it represent? So, I don't have that information in front of me, so I'm just walking in here. But bottom line is that CPI is the measure, and there's another measure called CPI Exclude in Energy that is used by investors and analysts to kind of gauge where inflation is. And in our opinion, when you go behind the scenes and look at the CPI number and really break it down, that 3.7 percent number that is the most current read really doesn't feel like 3.7 at all, right? I mean, if you look at airline fares, year-over-year, they're up over 45 percent. If you look at gasoline at the tank, it's up significantly depending on the market you're in. So, where it's hitting people is in their pocketbook and it's not just where it really hurts is people that are retired or people that are fixed income kind of workers where they mainly get a one or two percent raise per year, right? And that's a lot of people. So, it's something that the Fed is, you know, not throwing a party about a few meetings ago, but they were like, oh great, we're at 3 percent and now we're back to 3.7 percent. So, we're going in the wrong direction. Yeah, it's very concerning that we're going in the wrong direction because the only tool that they have to bring down the rates is they have to raise rates. And that's very, very scary when you think about that, because like you said, people are struggling, price of food is going up, cost of gas is going up, housing is going up, inflation is going up, and the only tool that they've pretty much admitted that they have to bring down inflation is raising rates. So, how does inflation affect investment decisions and long-term financial planning for individuals and businesses? Well, it's different for both. I think on the individual side, we're seeing, you know, as we speak right now, all-time credit card debt highs, you know, so to the average person out there, they're shrugging this off, which is amazing to me. But I think as a society, we become addicted to credit. And I say that very carefully because I really do believe that I'm in the minority. You know, I pay for my car and cash. I pay for my house and cash. I'm really debt-sensitive because I've seen what it's done to my own family. I've seen what it's done to some dear clients of mine. And people get destroyed when you're in debt because it compounds, right? If you have a $10,000 credit card balance even, and if you're in a situation where you're in the lower-income bracket, you might be at a 29.9% APR. And how are you going to work yourself out of that as your debt level continues to grow, right? It's a very difficult situation. And I'm not just talking credit card debt. I'm talking, you know, mortgages that are adjustable rate ratcheting up in the last 18 months, right? You're getting squeezed there. You had an arm going into this, you know, situation. Gosh, I mean, every part of the economy is feeling this. But it's different on the client level versus the corporate level. The corporate level is probably going to start doing what I called for about six months ago, probably now in December, January. It was a little bit early. But they're going to have meetings at these annual meetings, Google, Apple, you know, all these big boys and say, look, we're cutting spending. I mean, they have to cut. And when you cut at the corporate level, that's so important to the economy because a lot of these people that have, you know, six-figure budgets that go out there and spend like I used to, then can't do it, right? Your company's cut you off of the knees and you basically can't do those dinners. You can't get on those planes. You can't stay in those hotels. It really has an impact on the economy. And I don't know if that's enough to kick us into a recession next year, but I'm still in the camp that we are going to be in a recession next year. Kind of feels like we're already in a recession. Oh, it definitely feels like it to me. But, you know, we haven't seen that admitted by the Fed yet. In fact, I mean, a couple of days ago, Powell was just talking soft landing multiple times. So, I mean, they're still drinking their own Kool-Aid. Yeah. So central banks often use interest rates to control inflation, which I talked about. Can you give us your opinion on how this works and the potential consequences of these actions? So we've reached a point now where I think you just alluded to the Fed is running out of tools. And, you know, when you get to that point in the cycle, it's very tenuous because the market, in my opinion, has already factored in the broad market that is a pause and cuts coming. And if you look at what Powell has actually said in the summer meetings, not past meetings, September 20th, but in past meetings, meaning June and July, he was saying, look, we're not done yet. So, you know, we're going to have another two by the end of the year, he said this summer. We already saw one in the summer, but we have another one coming, I think. And the market just isn't believing the Fed. And so the market continues to run, right? And then when they actually get a dose of reality on the 20th, you've seen the sell-off, right? It wasn't like a huge sell-off, but it surely was something to take note of if you're in the bull camp. Because I really don't think we're going to see a Fed that's going to really care. And what I mean by that is, if you're at, I'm just throwing out a number right now, it's my computer's down, but like 4,300 on the S&P. You know, once you break 4,200, it's going to get some attention on Wall Street. Once you break the big round number of 4,000, then it's really going to get some attention on Wall Street. And I'm in the belief that the Fed is not going to intervene there, meaning the Fed put is gone right now, right? They're not going to have your back as an investor at 4,200 or 4,000. They might at 3,500 to 3,750 somewhere in there, right? Meaning that they would cut, you know, cut rates potentially at that level. But that's still a long, long way from here. So I think, you know, again, just going back to this fact as an equity guy that we haven't made new highs is really meaningful when you look at the fact that the broad market rally started March of 09, which is 14 and a half years ago. Yeah, it's been an epic run and had to end at some point. And it feels like we're in a bubble and the bubble's about to burst. That's just the way it feels. I know the housing here in Canada is just completely a major problem. The average home here in the GVA, the greater Vancouver area is $2.4 million. How is an average person going to be able to afford a home? How are kids and teenagers and young adults going to be able to buy a home when the average one was $2.4 million? That to me is a major problem. And when I talk to real estate agents that obviously make their livelihood by selling real estate, in their opinion, because they need to keep selling, they think it's going to double from here. And I'm like, well, if it does and the average home is $5 million, how does that make any sense? Like you're going to have a huge discrepancy between the haves and the have nots. And it's just going to keep getting bigger and bigger and bigger. So it's a major problem across North America. I know it is here in Canada. And I blame our leadership. I think our leadership is doing a poor job of managing these issues. And when you say to the people in the public, hey, the only thing we can do is keep raising rates, that's not a good solution for me. I don't like that solution because you're just putting people like you said, deeper and deeper into debt. And eventually they're going to get to the point where they're going to be able to default on their mortgages, default on their credit cards, default on their loans, student loans, car loans, lines of credit, personal lines of credit, business lines of credit. And then that's when you have a recession. So it's a very scary time right now in my opinion. And I think that in my opinion, in Canada, the United States, I blame the leadership, not a fan of Biden or Trudeau. I think they've done a very poor job. And somehow today Zelensky went and sat down with Biden and he's asking for another $24 billion. So somehow Biden's like, yeah, sure. I mean, we're in debt and we have rising rates consistently, but Zelensky wants $24 billion. Let's give him $24 billion. That doesn't add up for me. Like something isn't adding up, right? So what advice would you give to individuals and businesses looking to protect their finances and investments in this inflationary environment? Well, for businesses, it's different than for consumers. The consumers, it's like turning a cruise ship for some of these businesses because they are so large, it's going to be really difficult to do that quickly. But there are some things they could do, but probably we won't do right away. And that means if I were in charge of a company, I would have already cut budgets last December, because I really would have seen that I've lived 0809, right? I was out there looking at steak houses, a third or half full Starbucks lines, three or four people like long instead of 15 long. People will go to needs rather than wants in a recession and we're skating towards that right now. I mean, by next year, I think we're going to see that a lot. My suggestion on the personal level is simply, there's a work with a financial advisor about budgeting. Just getting a 90-day budget together and actually counting, maybe pay for cash for things for 30 days and write down everything you're doing. You'd be really surprised at how much you spend that doesn't need to be spent. I've done this with my own family where I've said, look, just for 30 days, just track everything that you do. And it's amazing the result because you find that you're spending money on a lot of things. You really don't need to spend money. And if everyone were to do that and really care as opposed to just charging things, I think they'd be in a better position because we are going to a very difficult place, I think within the next four, 48, sorry, 24 months, I think it's just going to be a much more challenging environment. Yeah, I agree with you. It's kind of scary right now where we are and I feel like we have a housing bubble very similar to 2008, 2009 and I feel like it has to burst. I mean, I think it's going to be worse. Yeah, I mean, how can people continue to afford these prices? I mean, it doesn't make any sense. So there are markets where housing is affordable, but in the major markets like the California's, the New York's, the Miami's, the Florida's, the Toronto's, the Vancouver's, it's completely outrageous. And even if you're driving an hour or two hours away from Vancouver now, yesterday I was like, I was, my son took my son to soccer and we're like two hours away from Vancouver and I'm thinking, oh, okay, these are some nice homes that probably cheaper. No, average home is still 1.2 million. And I'm like, this is crazy. You're driving two hours away from the major city and you're still paying 1.2 million dollars for an average home. So it's something has to give in my opinion. And I feel like the housing is, is where it's outrageous and something has to give in my opinion. So looking ahead, what trends or factors do you believe will influence the future of inflation and use of the CPI as an economic indicator? So what factors do I think will change the direction of inflation? Yes, what can we do? What could possibly be done other than if there's anything other than rate hikes? I mean, the Fed is running out of tools, as I said. And so I think something, well, Powell says very like clockwork at every press conference, if you look at the first five minutes or so, he says, you know, how this is affecting the low to middle income families. It's like he's just checking the box. I mean, I apologize, but that's really what he's saying. I don't think he has any clue as to what low middle income families actually do go through. You know, I grew up poor. I basically can see, as you said, rich already in the states, the have and have nots gap getting way bigger, you know, and we're not at like super rich and poor yet, but the middle class is shrinking. And the Fed doesn't understand that how much damage they're doing already, like to continue to raise rates at this point is pretty ridiculous. But again, we are just trying to report things to our clients and followers as we see them, right? I'm not trying to, like if I were talking my own book last year, I would have told you about rate cuts because I know two prominent competitors of mine were talking about rate cuts is really a September of 2022. We didn't get a pause situation, really hardcore pause yet. So where is this rate cut coming from? You can listen to what the Fed members that vote have said, go look at the Fed minutes from June, July, we haven't seen the one for September 20th yet, right? But they're all saying that there's no rate cuts on the horizon. Not a single member is talking a rate cut right now. So is that bullish for the market or for gold or silver? Not necessarily. But I think what's going to happen, Rich, is the broad market is going to not make new highs. A sector rotation will take place into names like a new month, right? That's trading at 40 bucks US with a 5% dividend or so. Like that's very attractive to value managers. Now again, we're in this growth phase and have been for so many years, it went off the rails this year as you and I talked about on previous shows with Tekken AI. I think that's starting to slowly fade and that's really positive because we need a sector rotation to happen. If you look at biotech, it's starting to fade. If you look at real estate stocks, they're starting to fade. This is all really, really good because a lot of the momentum is in these parts of the market. Now you're recently at the Beaver Creek Conference in Colorado. Can you tell us a little bit about that conference and what some of the commodities experts were saying about the economy and its effects on the sector? Well, I did attend both that and Denver Gold to follow it up. For those people that don't know, you should really think about attending that junior conference especially because it's usually held at the same time every year. Beautiful Park Hyatt and Beaver Creek right outside of Vale. A lot of topics are covered. Really, one of the overarching themes was the negativity I thought of the CEO, much like I saw in January of 2016, where CEOs are pretty beaten up right now. I can't say anything other than they're right. They're getting shorted. They're getting down ticked by these banks. It's unbelievable, Rich. I've actually started a campaign that isn't public public yet, but I'm doing research on how many stocks that I follow, which is over 150, that are getting down ticked on 500 or 1,000 shares on a daily basis. And I'm sending images of this to the CEOs or CFOs of the companies, and we're planning to do something about it. I can't really disclose more than that. But all I can say is that if I'm out on the bid at 10 cents on a stock and I see a print of 500 shares a day and a half, it pisses me off because they're saying, I want to buy your stock at 10 and somehow my broker-dealer is telling me it's black, it's dark pools, it's the market maker's fault, and no one's taking accountability. And it's really ruining some of these companies' charts, and it's really unfair. Let the market just be fair. That's all I'm asking for. That may be a topic for future B-recreate conferences. I really feel that I was fortunate enough to speak on energy transition there. I think there's a lot of interest at the high net worth level of diversifying their portfolios away from traditional investments like the S&P or real estate, and into something more tangible like gold and silver. So I want to touch on that. So where do you think gold goes from here? Yeah. So we have been extremely measured. If you look at our work from 2016 to now, we have basically just said, we don't go more than six months out really in predictions, because I find that the market that we all live in and have to deal with is still unpredictable. It's very difficult to look out much further than that. But I could just say that some point next year, we're going to make it all-time high on gold. And for me to say that is really going on on OEM, because I've always been very measured, especially with silver coming from a silver background. I've been in the camp all of last year and all of this year, and I've said on your show that we will not break 30, and I still feel that, because $30 an ounce is major, major resistance if you look at a chart going back five or 10 years. And so would I benefit from saying that? Yeah, silver is a top three holding for me, but I'm not saying it yet, because it's not true. The gold to silver ratio as we record this is around 82 to 1. So gold is continuing to lead silver. When you see silver start to outperform a little bit, that's going to be a really bullish sign for the entire precious metals complex. To answer your question, I think gold will hit an all-time high next year, and it will really start an M&A activity. I know a lot of majors are meeting with some of the companies that attended a Beaver Creek. I've never heard probably more potential M&A activity than I heard at that conference, which is really bullish. Large cap companies are now coming to the realization that their production profiles are declining, and they have to start doing some things. So a lot of the companies I invest in have two, three, four million ounces of gold, and they're just hanging out. They're not going crazy with drilling this year, Rich, because are you being rewarded? The answer is no in most cases. So why drill all these holes at a very expensive cost when the market's just shrugging it off? So I think that's a prudent approach for smaller companies right now is try to hunker down a bit and conserve cash, and next year when things get rocking and rolling, that's when you go back to the drill bit. Yeah, I heard a stat that gold is only 7% away from all-time highs. So in my opinion, gold is the inflationary hedge. So when we're in an inflationary environment, that's typically where people start investing in gold. So it's been weird. There's been a lot of divergence in this market because gold has been stuck at 1900 and hasn't really made a big move in this inflationary environment, which is very, very odd. So there's a lot of odd things happening. So I don't know why. Do you have an opinion on that? Why in this inflationary environment is gold not doing better when it's probably one of the best hedges against inflation historically? Institutions, investors typically pour into gold in high inflationary environments, we're in a high inflationary environment, and gold just stuck at 1900. Why do you think that is? Yeah, well, two things. I think it's important to note that 1900-dollar gold is a pretty high price, right? When you look at history, and there was a period of time this year where we were above 1900 an ounce in consecutive days over like, I don't know, like 130 to 150 days, which is crazy. I mean, so that's a positive takeaway that since the financial crisis of March, more and more money is putting a, you know, a floor on gold. That's huge if you're a gold bug. Number two, the U.S. dollar has just been super strong. I mean, I've been actually told on some podcast that we can't talk about that. I'm like, why? Because it's true. I mean, it's like the U.S. dollar has been raging higher. Take a look at a chart of UUP, which is the biggest tracker of the U.S. dollar. It's a beautiful looking chart. Hopefully it's going to back off a bit here. That would definitely help gold and silver. And, you know, that's just, you know, some headwinds, Rich. I mean, it's where I think part of it also is that look at what we talked about on previous shows. We talked about tech doing really well this summer and in spring. We talked about AI, you know, stocks like Nvidia and stuff doing really well. I mean, these are problematic because people that are still growth momentum type buyers are saying to people like me, see, I told you so, right? Like this is, this market's just on steroids still on your stupid, right? Well, we don't think so. Yeah, no, I don't think so either. So really the last thing I want to get your opinion on is oil. I've talked to you before about an ETFC OMT, which pays a 30% dividend. And I've done really well on it because not only do I get a 30% dividend one time annually, but oil has been on a tear. I think oil's low this year is about 65 and it's highs probably around 93 and we're sitting right around $90 a barrel. JP Morgan came out this week and said that they feel like oil is going to go to $150 a barrel. And I'd be really happy if that happened because of my investment, but I wouldn't be happy about it at the pumps because that means we'd be paying way more for our gas prices. What do you think happens from here with oil? Because I believe we're going to see at least $100 oil here pretty soon. What's your opinion? We've said on multiple shows this summer that, you know, we think the environment for oil looks good for the next one to two years. And I don't really go out there and start talking three to five to 10 years out. It's just too hard to look. But now at $90, you know, yeah, I mean, I don't know about the $150 number. I remember Goldman Sachs had an analyst there had the same thing during Katrina many years ago, $150 and never came close to that. So we'll see. But, you know, I think it's problematic for investors, you know, like you said at the pump, but also if you're trying to get around like on an airline like cruise ship, like these companies are just going to ratchet up prices. They're going to use this as a huge excuse, right? Because the prices came down. They didn't lower prices. When prices go up that, you know, a lot of their bottom line is fuel, right? So look at what happened also in the news yesterday. I don't know if you noticed on CNBC, but, you know, there's an article out there that Russia is now messing with exports and that's never good. And so I think that the situation for all commodities looks really, really good right now. And I can't say we're at a commodity supercycle type setup yet, but I will say that, you know, there's areas of the market like oil, like uranium that are doing quite well. I agree with you 100%. Thank you for joining us today. John from John Fennett Consulting. John, you want to talk a little bit about what you do at John Fennett Consulting before we say goodbye? Yeah, sure. So I will just, you know, throw this out to anyone who happens to be on the East Coast in the US, the people at Precious Metal Summit that run Beaver Creek. And I had lunch about six months ago and I was talking to them about the demand I get from my company's CEOs that just have a relationship with me in the copper space, uranium space, lithium space. And they always say I'd love to go to Beaver Creek, but and the but is it's mostly a gold and silver conference, right? So Misha and Jessica Leventhal have basically started officially now a new conference, April 29 and 30 of next year that I'll be an advisor to. And that is going to focus on battery metals and critical mineral companies only. So really excited about that because there's so many good juniors out there that, you know, don't get enough exposure, I think, at least in the US, I know in Toronto and some other markets, they have these kind of conferences, but we really don't have a major conference like that in the States. Number two is just again, we have a newsletter, which is very affordable, but we also have real time macro updates. So to give you an example, you know, when the Fed came out September 20, I'm actually writing notes real time. And then I'm sending that email off in a couple of parcels to my followers and paying clients and saying, like, this is what Powell's saying, and here's how it's going to affect, you know, commodities. So I think that real time aspect of what we're doing, Rich, while it costs a little more than the newsletter is really helpful to clients. We get great feedback because there's only really one or two other competitors in the US that are doing this. So, you know, I would just say to your followers, listen, contact me. I think this is the time you want to align yourself with someone like myself to try to get an idea of how to, you know, play this market. And we'll try to work with you within your budget. I really appreciate your time today, John. Always a pleasure. John Fennick from John Fennick Consulting. If you're not winning, you're probably not watching. We bring you the winners, CEO interviews, trending topics, engaging shows with engaging guests, and we'd love to bring it to you first. Hope you enjoyed the show. If you liked the video, please smash the like button, comment down below, share the video everywhere and subscribe. I'm your host, Richard D'Souza from the Rich TV Live podcast saying, have a nice day. We'll see you soon. John, until next time. Thanks, Rich. Have a nice day. Cheers.