This is the biggest bubble of all time, and it’s going to ‘haunt us’ – Peter Grandich (Pt. 1/2)

the bitcoin price has fallen over the weekend on news that turkey has banned cryptocurrencies as a form of payment speaking with us today is peter grandich of peter grandage and company he's going to be talking about bitcoin the financial markets and what he believes is still the biggest bull market opportunity right now peter welcome back to the show always a pleasure actually the pleasure is all mine david thank you very much peter we're going to be talking about what you believe is the biggest bubble right now we're going to get into that but first let's talk about bitcoin because you and i spoke offline and you you said in your words you came out of the closet so to speak on being bearish on bitcoin well first of all i've i've worked with you for quite a while this was not entirely a surprise to me given that you were a little bit on the fence about bitcoin before when i asked you about it but now you're a little more overt and open about how you think bitcoin prices will correct so tell us about that and why you think that uh why is it that uh you've been getting hate mail from the crypto community well that's only been the last few days after uh so-called coming out of the closets uh aggressively uh tying it to the uh ipo of coinbase so as you as you're correct i've always been a believer in the cryptocurrencies and when bitcoin was much less expensive i didn't have issues when clients and friend ask me should they own some but as you know in recent weeks uh up to that uh ipo because of the tremendous gains and simply just before those reasons uh i began to certainly to anyone that want to listen to suggest maybe it's time to take something off the table but because the uh the commentary and the the not only enthusiasm but the the arrogance and certainty that people were expressing it and numbers every day being tossed out five to ten times to 20 times higher than even current prices it suggested to me that uh tying into the coinbase ipo it was time at least to say to people i really just don't think you should own it anymore i mean i just think it's 65 000 or wherever it was exactly around that area when i said it even if it doubles from here there were a lot of other things that i felt could still double uh especially like in a market i know we're going to talk about but not have the big risk of a loss of principle so i spoke about that and of course the you know the hate mail grew exponentially uh as soon as that hit you know out there and people circulate that but again uh the biggest fear that i ever had you talked about turkey was that regulatory people had not come out and made their comments on what side of the so-called coin are they going to end on and my feeling was that governments are never going to support bitcoin once it gets past just the speculative trade which it was starting to and i think in the coming days and weeks we're going to see that more and more that governments are really going to be outspoken on a negative basis on the bitcoins of the world peter you're not the only person i've spoken to who is somewhat negative or bearish from bitcoin for a variety of different reasons i've heard bearish cases on bitcoin the counter arguments usually from the crypto community where people who believe in bitcoin are usually well you don't understand bitcoin you know bitcoin has a volatility profile that's unique in its own it's not like any other asset what goes up must come down maybe it's come down a little bit from its highs this weekend but it's still on an upward trajectory you know we've seen it correct 80 only to skyrocket 10 000 the next year how would you respond to any of these counter counter arguments well i'm probably going to give you the answer that none of those other people who've been crushed i know some of the names they've been bearish for years on it i wasn't that case but here's here's my response to everybody i've been at this going in my 38th year i've watched wall street promote and and recommend if that's the original word but more promote and hype and i've never seen them do a better job in achieving something than they've done in bitcoin here's what i've never seen i've never seen the last sentence of that story end with and the general public lived happily ever after it it just never has happened this may be the first and i'll be the first to come out and say wow you were right it really did get to 200 or 500 000 or what have you but right now i considered it the most crowded overcrowded uh boat i've ever saw in fact i used that in my work to show people an extremely crowded boat and then i actually took when gold got under 1700 an empty boat and i said i just feel much more comfortable on the empty boat than the overcrowded boat so there are a lot of other reasons and time will tell i don't i think that you're right i think the jury is still out i would say that this this is not a certainty that its reached its peak but for me and the way i look at things and the way i value things and maybe people say i've been only here for 37 years and the people that only been here 12 months seem to know more i'll ever on what i've learned over 37 years and 37 years told me it was time to move on from something like bitcoin okay peter does this go back to your investing principle that you usually don't go into something that you believe is a crowded trade that uh even though the masses like it very much in our in your words promoting it like never like never before seen on any other asset why would that not be a bullish case why would you not ride the wave jump on the bandwagon right into the moon well early on the masses together can make money and that's what we saw and that's why you had the gains that you spoke about you've had the retracements and the rise the problem now is is that since it became more widely known and exposure it's opened the eyes and ears to the government and the regulators and governments have already started to speak negatively the ecb president has come out negatively india has spoken quite openly about wanting to ban it china is sending out vibes that it would look to see something that it would like to have other than bitcoin so to tell you the truth is it's nice to have investment bankers but you know what david 20 or 30 years ago when penny stocks used to be promoted like bitcoin's been promoted they were throwing people out of the business for saying that something would go up 20 or 30 times without any risk and the one thing that was missing in all of this was any caution i've never heard anyone that predicted those things going up even give the slightest caution that it might not work or it might not be everything for everybody and whenever that's happened in any product i've seen in 37 years it ends up a bad story in the end all right um i'm gonna move on to the financial markets after this question but let me just try to play devil's advocate let me try to convince you to buy bitcoin let's just play this little fun game here right now now i i may not be successful but let me just try for the sake of argument now you have mentioned penny stocks before as an example of things that have been hyped up and crashed and not ended well for the general public i agree with that but so take this into consideration bitcoin has a much higher market capitalization than penny stocks by definition it can't be it has a one trillion dollar market cap now institutions are adopting it governments are using it around the world as alternative forms of payment in some cases we're seeing visa paypal adopting bitcoin as a form of payment on their platform so people can actually now go and buy it we've got companies like tesla offering to sell their cars using bitcoin you can buy a tesla vehicle now using bitcoin so we've seen adoption on this on this thing this asset like we've never seen before it's being adopted on all levels not just the private investor being suckered into the penny stock mantra how would you respond to that what you've seen in each area that you spoke of was a handful of companies within that industry sector taking forgetting about that wall street because well listen as far as i'm concerned since you want to have a real debate as far as i'm concerned most of those people that you speak about you could toss them off the empire state building all the way down they all say the same thing hey so far so good so i'm not gonna depend on those people to give me proper balanced advice yes it's true a handful of groups and people within certain industries have tried to legitimize it but to be considered a widely used acceptable factor most importantly by true government regulators and the key people in government now are central bankers has not been the case so until that happens i will stand here and disagree with you respectfully i believe the point you make is valid and that's the reason why people are buying it i see the cup half empty you see the cup half full we'll soon see who ends up with the better part of the cup all right well uh the cup is half filled says the diplomat the neutral diplomat let's move on to the financial markets now peter you were talking to me offline about what you see is the biggest bubble of all time what are you referring to exactly well the last two financial crisis that were triggered 2008 and 2000 which over half of financial advisors and 80 percent of the young public has never even experienced uh were centered primarily in one or two industries the last one was mortgage and real estate which was the cause that led to the overall crisis and before that it was the internet bubble now unfortunately there's a much more widespread over-evaluation uh uh enthusiasm beyond belief in in a wide variety of sectors at a time when socially politically and even economically both here and abroad but i focus mostly here for the us we're in some very very deep troubled times perhaps the most troubled times for america ever so uh it's very hard and most importantly in the past we've been either economically sound to come out of those well now we have almost 30 trillion uh when i started in the business we were the world's largest creditor nation but even more importantly is there's no more political will that you could count on that if suddenly tomorrow there was a world or u.s financial crisis that both parties can cross the aisle and work together to solve it i don't think they could be in the same room so i think there's a lot of differences now where financial markets have become overvalued or what have you than the last two crises and i think there's a far less chance to come to an easier way to solve it i think it would be far more difficult this time around all right so financial markets are overvalued what should investors do then should they be shorting should they be getting out stocking up in cash what's your advice well i i never like people to be shorting because it's a it it to many people it's unamerican it's like betting the don't pass on the crap table even though at a crap table the pass line and the don't pass line basically offer the same opportunity very few people go to don't pass because it's like un-american it's the same thing about shorting what i do think people should recognize is is that the sooner they're going to need their principal the more conservative they should be so their age is probably going to pay a a lot of reason to how much conservative they should be and not have total exposure to general equities now i've talked about cash and everybody goes hey why do you want to own the dollar i don't want all the dollar i'm just backed up the truck to buy gold but i want to have cash because i think assets in general and perhaps as early as a year but certainly in the next few years are going to be a lot cheaper because i see a major downturn coming so i do want to own cash and i have not want to have cash up until now if i wasn't in the stock market i was fully in gold if i wasn't in gold i was fully in uranium and gold then i was in copper but now cash is an important part of my segment even though it doesn't earn anything but i think its purchasing power of general assets is going to become worthy in the not too distant future yeah we're going to we're going to talk about gold in just a bit i want to ask you about taxes corporate taxes if that's a risk for you as well as valuations or if you are writing that off as a non-event as you know the biden administration has proposed a two trillion dollar stimulus plan the other side of the coin in that plan now peter is an increase in corporate taxes and janet yellen treasury secretary uh has actually proposed that the g20 countries all raise their corporate taxes together what does this mean for investors well corporate taxes uh are going to go up just as as i've said all taxes are going to go up you can't listen in 2019 we had one of our best years you can say it was trump you can say it wasn't trump whatever it was but we had a very very good year economically as far as the government was concerned because we took in almost over three and a half trillion dollars in tax revenue our interest bill on our current debt at the time was 440 billion so it was like 12 to 14 we're approaching 30 trillion dollars in hard debt now okay now we hear that someday interest rates are going to revert back to normal and things are going to get better and we'll all be living happily ever after so let's buy that argument for a second okay and rates just go back to four or five percent which weren't a very high rate by most people we're going to be looking at an interest rate bill in the united states between a billion and a billion and a half or almost half of the total revenue that the country took in so that you can escape so not only are we going to see corporate taxes going up but we're going to see taxes going up in states and cities who don't have printing presses so taxes are a key thing but if i may david and this is an area which is still where i focus on and it's you know state planning the government yelling is talking about two things that and one it petrifies me uh we know they're gonna lower the level of the estate tax or the inheritance tax they're gonna we're gonna probably see it shrink from you know 11 to 12 million down to as much as little as one or two million and you're going to have to pay estate tax now i hate estate taxes i think it's very unfair you work your whole life you pay taxes they got your money now you finally save something to finally pass on to your loved ones and they're going to tax that again but that's going to go on the second thing that biden is speaking about that's very concerning is he wants to eliminate or greatly reduce the stepped up basis so now when you die and you leave stock to your family you use the current price when the person passed as their course he wants it to revert back to whatever the original was yeah well that causes a lot of problems but the biggest issue and yellen is the biggest advocate of this and they want to tax unrealized capital gains and i don't think the general public understands what they're talking about that means we buy a stock now and we're up a thousand dollars on the december 30th come the tax said he make it 20 we own 20 on a thousand but on january 3rd there's bad news on that stock and it goes down below what we pay for it we still owe that tax and then how do you do unrealist capital gains on people that invested in jewelry art uh antique cars it opens up a box that is so bad and on top of this when i want to do something giving someone some certain people who didn't live up to their obligation student debt we want to get away with that which we're only going to have to raise more tax money to make up for so there are a whole host of things that the biden administration excuse me it should really be called the biden harris administration they want to bring in things that are just not good for long-term investments because it's going to take money away from markets all right the debt forgiveness plan they're they're offering different plans now um first of all is this going to make a significant impact on people currently holding student debts is this going to actually help people and second part of the question how would they finance it well by the forgiveness it's not really financing they're just taking it off and saying okay you don't own it but what about a person like me that worked real hard my wife worked real hard we sent our kid to college we either paid it off or we borrowed and we paid the loan uh those people that they're forgiving they were in charge usually rates they paid the same rates i did they got their education the same way my child got it but now because they supposedly are suffering from it and we relieve them of the burden well that burden is still going to be a need for the tax to be replaced the government's going to need that money that it was depending on to come in and make it up somewhere else so people like me who did the right thing are gonna be taxed now for that so for the right thing i'm gonna pay twice and it's here's the pandora's box it won't stop at student debt the next thing will be is hey what about all the people that have government mortgages and they're struggling why don't we forgive that too and where do we get to the point where we don't stop and at the end the person that pays is still the hard-working person that's paying taxes and and that's the real if you want to ask me what could upset and cause the democrats to lose control in our governments here as much as people think it's because of what's happening socially it's taxation that's what this whole country was formed on it the people that were here just got tired of great britain taxing them to death and that's going to be the the albatross for the democratic party if they go through with this yeah just off topic for a second here if i if i were a college and i'm you know i'm i'm planning tuitions and whatnot i'm thinking okay biden wants to grant ten thousand dollars of debt forgiveness for everybody i'm just gonna raise my tuition by ten thousand dollars because i know that extra ten thousand dollars the government is essentially gonna pay for isn't that just a subsidy wouldn't that make tuition go up even more and what you're hitting on david which no one seems to be talking about in the media is the original culprit of all this the two biggest things that increased in the united states and dreams of course is medical and education and no one is going and looking at the colleges and universities who have charged sky-high prices each and every year going up and up and one of the reasons children and families had to borrow so much and that should be where the focus should be there should be a freeze they should not be able to able to raise their costs in the amount that they have so there are a whole lot of things coming that again that haven't been priced into the market or talked about because everybody's caught up in the excitement which normally happens in bubbles but eventually when the bubble breaks all these issues and more that you and i spoke about just a little bit about today are going to come back to haunt us [Music] you

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Keywords: gold, silver, finance, news, investing, investing news, finance news, financial news, economy, precious metals, gold price, silver price, gold price today, silver price forecast, gold price forecast, kitco news, peter grandich, david lin, stock markets, biden, biden stimulus, janet yellen, student debt forgiveness, corporate taxes, crypto, bitcoin, dogecoin

Id: wCgbOADbjoY

Length: 20min 9sec (1209 seconds)

Published: Mon Apr 19 2021