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Peter Grandich: Trillion-Dollar Debt Problem

Tom welcomes back Peter Grandich to discuss the lose monetary policy day of reckoning that must come. He says, “We just past another couple trillion in money printing. This debt isn’t something that will go away; someone will pay the price and pay dearly. Servicing this debt is an issue, and the average American has no understanding of what is occurring.”

We’re approaching 30 trillion in burdensome debt, but some estimates are over 100 trillion with unfunded liabilities like medicare. We’re getting to the point where servicing the debt will become a significant issue. The US has the advantage of being the world’s reserve currency. Sooner or later, we will default or likely choose to inflate our problems away.

The can is getting much harder to kick down the road. The Fed is now running the economy, and they are preventing normal declines in the market. Now that we are near-zero interest rates, there becomes a point where things become less effective.

Peter says, “I am truly petrified to see the complacency in the market and the ability to service debt. The bottom line is only about 10% of Americans could move forward during this past year since the others lost jobs or businesses. We’re entering a dangerous time where most people aren’t prepared.”

It’s not how much you make but how much you don’t lose that separates you from winning and losing.

He feels comfortable getting long gold at this point and will look for opportunities to short the broader equity market. He discusses how few people today invest by looking at fundamentals and ownership in businesses. Half of all equity holdings are held by passive funds, and much of the remaining half is all run by algo strategies. Very few look at the market fundamentals, and instead, we are in a high-tech casino-type environment. One of these days, this will bite us in a very bad way.

He discusses the risks in gold mining equities and why failure is the norm in the industry. His focus lately has been on majors, and he may speculate in juniors when interest increases.

Peter has been buying uranium since 2019 and has taken some profits but believes the yellow metal will head higher. He’s waiting for the spot price to move first and believes that we will see the price go higher as contracts expire. There are very few producers that can be relied upon in the uranium industry. The only thing that can hurt uranium would be a collapse in the equity markets or a nuclear accident.

He discusses the difficulty in building new copper mines and the vast capital expenditures required. Copper appears to be putting in a new floor and will likely move higher from here.

He cautions investors to not fall for the “It’s different this time” and warns that when things are parabolic, take some profits.

Talking Points From This Episode

  • National debt and unfunded liabilities.
  • The great wealth divide, political and socialist risks.
  • Sentiment and gold markets.
  • Uranium and utility contracts.

Time Stamp References:
0:00 – Introduction
0:35 – Debt Day of Reckoning
1:54 – US Debt and Servicing
5:42 – Petrified of Markets
9:27 – Shorting Markets
10:45 – Market fundamentals have changed.
13:36 – Sentiment and opportunity
17:00 – Gold Portfolio
18:22 – Mergers & Acquisitions
19:28 – Uranium Sector
24:45 – Taking Profits
25:40 – Institutional Money
26:45 – Electrification & Copper
31:16 – Complacency & Advice

Guest Links:

Peter Grandich entered Wall Street in the mid-1980s with neither formal education nor training. Within three years, he was appointed Head of Investment Strategy for a leading New York Stock Exchange-member firm. He would hold positions as Chief Market Strategist, Portfolio Manager for four hedge funds and a mutual fund that bore his name. His abilities have resulted in hundreds of media interviews, including Good Morning America, Fox News, CNBC, Wall Street Journal, Barron’s, Financial Post, Globe and Mail, US News & World Report, New York Times, Business Week, MarketWatch, Business News Network and dozens more. He has spoken at investment conferences worldwide, edited numerous investment newsletters, and was one of the more sought-after financial commentators.

Grandich has been a member of the National Association of Christian Financial Consultants, The New York Society of Security Analysts, The Society of Quantitative Analysts, and The Markets Technician Association. He is an active supporter of Athletes in Action, the Fellowship of Christian Athletes, Good News International Ministries, and Catholic Athletes For Christ. Through Athletes in Action, Grandich assisted with Bible study and chapel services for the New York Giants and New York Yankees from 2002 to 2016.

His autobiography, Confessions of a Wall Street Whiz Kid, was first published in 2011 and is now on its fourth printing.

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