FOMC Backs Away from September Guidance Shift

Week on iTunes, SoundCloud, al Bloomberg dot com. You can also listen to our radio show at two pm Eastern on Bloomberg Radio every weekday, or watch us on YouTube by searching Bloomberg Global News. So we got to set this Business Week agenda, Carol, with these FED minutes, Yeah, totally, And I gotta say I just opened them up off the FED website, so we're all kind of reading in real time at the same time. Here's one headline, FED officials reviewing the policies trate to Dane July. Well, yeah,

that's what they did. So looking back at it, let's get into it with people who are far smarter than me when it comes to the Fed. Kathleen Hayes is with US Global Economics and Policy editor Bloomberg News. She's on our access line. And Dave Wilson also on the remote access. He's in New Jersey. He's our stocks editor. But Kathleen, let's start with you. Like I said, we all are opening this up at the same time in real time. Let's just tell stumping out for you. Yeah,

first of all, this is you. They're usually about fifteen or sixteen pages, you know, and and they're not necessarily there's a lot in there for anybody. So I know our FED team in Washington is uh looking over very quickly. They're saying refining the statement could help improve transparency. So let's put this in perspective. They're reviewing their policy strategy at the July meeting. Maybe if they refine the statement

itself can prove in transparency. Now, everybody who knows, and if you don't, the policy statement is about five paragraphs. It's kind of boilerplate. They use certain phrases to mean certain things. They change a word here or there, and I think it leaves a lot of people glad. Number one, the FED chair J Powell comes out and explains what they did and why and takes tons of questions from reporters.

At the same time, I think people feel, couldn't you write something longer if you gave us more information about what you're thinking and and how it may be something conditional. You know, you don't think you're going to raise interest rates for a long time unless right, we don't see

it now, And maybe that's what they're referring to. And I remember, of course they've had just almost a year long policy review, the FED listening miss meetings all over the country, and in September they are widely expected to put put their their conclusions out. And one of the other things I think we're gonna look for in the minutes is anything they said about the inflation target and moving from we're gonna keep it at two percent or try to get it to two percent recently, and then

we get there, it's a ceiling and we stop. That's what people have assumed, And there's a lot of the officials saying, no, what we're gonna say is two percent is our target. But when we've been way below the target for years, it's okay to go above for a while to to get it kind of straightened out. The question is how far above and how long above. That's the kind of thing. But there's the VET can't really change his policy right now. Right virus is still there,

economy still weak. There's no reason for them to hint at anything different. But I think these other questions that people are waiting to hear more about it very important. I just want to say, in terms of um market reaction, seems like from our our fed blog that we're doing our live blog, not much reaction yet in the markets. If I look at the equity markets, they're pretty much

where they were prior to the release of the minutes. Uh. They are pointing out that the long end of the treasury market, those yields turning a little higher, thirty year yield at a session peak of one point. But let's let's tuck a bit about the equity trade. Dave Wilson come on in on that. Well, you have the SMP five near its highs of the day, but you haven't seen a whole lot of movement. Uh three tents of percent gain at most, and and we're approaching that at

this point. But really the story of the day is Apple poking its head above two trillion dollars in market value. First US company ever to do that. You know, Saudia Ramco when they went public was just above two trillion when the shares started trading. So that's perhaps the next milestone. Four are Apple in terms of their evaluation that you know, Apple at least one big reason why you know, stocks

are moving up at this point. And then you can point the target which had earnings out that we're pretty well received and those shares up twelve percent leading to SMP fire. Yeah. I do want to say the market though, coming down a little bit. Yeah, just in the last couple of seconds, and it must be to somebody found something they didn't like or you know, we're getting close to the highs of the day, and of course you're at record levels for the SMP five hundred above where

we were yesterday when we broke the February high. So you know, it's understandable perhaps people might want to pull back a bit. And so, Kathleen, what is top of mind for the Fed right now in this moment, because you know, this is a little bit backward looking in terms of you know, sort of figuring out what they were thinking. We know that this is fast moving economically, medically, all of these things. You're talking to people all the time in and around the FED. What are they thinking

about right now? Well, they're thinking about the fact that they have done things to support the economy that have helped, you know, so support it. You know, there are a lot of businesses that have been able to stay on there on their feet because the FED provided lots of liquidity. They've done everything they can to stabilize markets, and they every time somebody talks, sometimes whether they're asked or not, they say, and we have done what we can do

with monetary policy. As J. Powell has said, the FED can lend, but it cannot spend money. Right that goes to Congress. That's where the action has to come next. I think they're probably watching these stalled stimulus talks as much as anything else. They've got to be watching virus numbers. We've got a great chart on the Bloomberg it's virus hotspots.

The top line is the US and those numbers have come way down compared to the peak in July six less than half of the what they were seventy eight thousand new cases being is a total where was then our new ones daily whatever it was um and it's down to half. It's in half and the Fed is that all along? You want to determine what the economy does? Watch the virus night. There was just a guest on with David Weston from the Attorney General from North Carolina.

Wasn't it saying, you know, they sent their kids back to school and now they got to send him home. Uh. That's the kind of thing that you get, get a little momentum going maybe and then it gets it gets hobbled again. Yeah, all right, guys, thank you so much. Kathleen Hayes Apple, Bloomberg News, Global Economics and Policy Theater, Dave Wilson, stocks Are, Bloomberg News. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio.

Let's talk a little bit about schools reopening, the medical side of that, the social side of it. And it is a complicated issue, Carol, because not everyone has the same access to healthcare, not everyone has the same sort of job. We have to worry about the most vulnerable among us. And that's exactly what Dr Ramon Tilladge does. He's the founder and chairman of some most community. Here joining us on the phone from New York City. Dr Todge, really nice to have you here with Carolin myself. I'm

thank you for you to help me with you. Please. So we are talking so much about reopening schools, especially in New York City. Is the world's the nations, excuse me, the largest school system. What needs to happen for it to be safe? Well, in order for me to be saved, it should be a discussion between all the people, especially the partents with the children's, the school teachers, the doctors, obviously the authorities. Well, at this point, I don't see

that happen. We've been trying for that to happen, especially as the doctor to talk and be part of the conversation. But we been the one and the I say, in the front of the battle from the beginnings as much we've been doing this testing education, and I don't think we're ready and to open the school because nothing has changed as much. What do you mean nothing has changed since March? Well, yeah, well let me ask you a question.

In March, why do we close the school? We've closer because the bigger skill, there's no vaccine, there's no treatment anything of those things have changed. I don't think so, and so why So why then do you think people are rushing so much to open schools? Is it an economic question? Is it that? I mean, we talked about this all the time, that people, you know, need their kids to go back to school so that they can continue to work. I know this is something you think

a lot about. So why why is the pressure there? Well, there's no one answer for when you dealing with the pandemic that nobody knew about it. Nobody has a hundred years and most of our scholars has failed to tell us the truth of these virus. But we on there forth from being since March telling us what's going on right now? We know this for two in our neighborhoods

how tested positive in our tests that we do. We ins almost two thousand doctors or those one more than two hundred hundred family practices will take care of two hundred kids, which is almost goes to a four fifth the faith for all the kids in New York City we've been testing. Then forty two our neighbors are positive. Let's the average between the four main border that we are on. Then it that's true. I mean the fifth

percent has not seen the virus yet. You opened the school and the numbers that the mayor or the government has given us one to two percent. That mean for every every thousand kids twenty to ten really positive, you're join the other one who are negative. So you're saying, you guys have testing kids in communities and you represent largely many of certainly the public school systems in New York City. Of those kids are positive, I'm guessing a

fair manner asymptomatic. And the concern is that they're going to be in the community and there will be spread. No, let me tell you forty two percent positive in blood tests, I mean they already had the disease. That means the fifty percent and haven't seen virus. Therefore, those one will be supposed in the school with the ten with the one or two percent that it is estimated that they

say is positively. Now, therefore, for each thousand kids ten to twenty went to the school we positive, then the other one will get infected. The majority will never have symptoms, but they going back to the houses. Who's gonna get infected? Their partients and their grandparents, the people who are the most need. They have to find the food day today. They don't have a steady job. They lost their job, they couldn't find medication, they had no in students. We've

been hitting very home. But you don't think with New York City. We talked about this before we started this interview for a New York audience. You don't think um Dr Tillage. We talked about the city's positive COVID nineteen tests rate, you know, to the lowest since the pandemic began in March. I mean the numbers have come way down. You don't think that's strong enough, good enough, safe enough for kids to go back. I just give you the example.

I gotta ask your kids. Will you just send it knowing that if you have one percent and the school has a thousand kids then will be positive. That's one percent. Then, I mean those things we jump around kids are kids in the school with in our neighborhoods are still negative and they will getting affected. There's no one answer. And then you asked me about what happened to stay at home? Who's gonna take care of them? The motherity to work, the father need to work, or the way they can survive.

They lose their job if they find a job to do, if they do the jog Hando Insurance there's no one clear answer, but whichever is the answer has to be done between all the past, talking together, the teachers, the parents, obviously the doctors in the community. We are willing to give five computers if they're going to open. We want the nurses in the school, yes, we need them and

want them to be attached to the primary care. There is interchange of information according to all the hip a compliance, but we could tell them not only the vaccine that could happen at some point, how who and when they were in fact, how many are infected and what kind of our scene they need for all the diseases, the one within the pandemic. So Dr Talaj, what does a good plan look like? What do we need to do at this point? Do we just need to wait for

a vaccine? There's no question, there is no one answer for that. I agree totally with the Teachers Association. We had to wait, We had to implement songs in that we all coinsolution and know it's going to be painful. But if we open right now the way it is, there's no different from March. Still, people are positive out there and then we come to the school and the kids doesn't see the virus will get effected, and then we're bringing home and elderly and parents are gonna die.

They're gonna be very sick. And we don't want to see the same way it happened before in New York City. We don't. So I do what and if and if they open, I don't see. I don't want to see one of my kids going to public hopital to get That's it. That's preposterous, petricians or in the school? Well is that how I mean? A vaccine is not around

the corner. We may not even get something before the end of the year, and some say maybe it'll be a year from now before we really have something that's very successful in terms of the immunity it creates, creates an individuals. But I do wonder Dr Talaj. In the meantime, there is pressure to get kids back to school because there are those who, as you know, can hire private tutors or you know, learn from home successfully, and so we are worried about who gets left behind as a

result of this. If we could have rapid testing in schools and administered by medical professional, would that make it safer significantly? Would your opinion change about the safetiness of our the safety of having kids back at school. Let me ask you a question. Are you talking about to do one point one million every three days? I guess I guess that's not realistic. Certainly not to that. Let's let's start that way. We are. You know, we have physicians,

We believe in science. Besides that, I'm very trusting in God and Christian and tratolly. But I'm telling you right now it Cattaby is some kind of business if they want to open the school the way we're talking about. Nothing has changed this March, and we've been in the fourth Front, and we we were the first one to get the alert at the beginning of March. I'm being sorry they. You know, March we told them seventy of the people and queens are positive. Stop we need to isolation.

They were looking for ventilators. We know what we're saying. We don't have the answer yet. There's no science answer about this vible. Certainly we know that the vaccine that I produced, they want to produce it because they want to create antibody and the kids. Now we know the forty two of our kids has antibody. That's an average. Our neighbor therefore is the most important number. Those are negative,

they haven't seen the virus. Those we get infected. Here we go again, Here we go again, and most of the time cheater does not have symptoms. So then do we just need to wait for her immunity. Then, well, I just tell you what the facts are. Now, we sit down together on the teachers, the parents, the stakeholders decide this is the way we go single go wrong, to go right, it will be casualties. That's probably what's not to happen. This is really we're dealing here with this.

We call it the SOLIDU virus because people are dying alone, they cannot even see their family. I don't want to see another round the same way we saw it a few months ago, when so many people die in our neighborhood. Those are the same one who has no computers. Their farthing had no computers. I want to take the kids they know, they don't know that have WiFi. All of the things you have to put in consideraction. But there's no one answer. One thing is an answer. This virus

still killed the saying. So bottom line, you would say, no school's open come September. In New York City just quickly just got about thirty seconds they do, we will be supposed all right, Well, we're gonna leave it there. Thank you so much. We look forward to keeping in touch with you. Dr Ramon to Lodge, founder chairman of some most Community Care. It is a network of independent physicians more than healthcare providers involved, serving predominantly Latino and

immigrant communities. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. Check out this Bloomberg Business Week story because let's not forget with Despite everything going on, hackers never let up this story at Business Week about how hackers bled one eighteen bitcoins out of COVID researchers in the United States. So, yeah, there is a virus angle here. Carter ke Marotra is cybersecurity reporter

at Bloomberg News, joins us on the phone from sam Francisco. Cardike. Interesting story, tell us what's going on. So in early June, um attackers, cyber attackers from a cybergang broke into the Department of Epidemiology and Biostatistics at the University of California San Francisco. UCSF is uh famous for its med school and its teaching hospital and was was in the midst of some COVID related research. They were looking into UM at the time, we were still wondering whether hydroxy chloroquinn

could could offer any redeeming value as as treatment. They were looking into contact tracing programs. They wanted to know who was adversely affected most by COVID and UH. In that first week of June, hackers locked up seven of their servers UM and UH and demanded three million dollars in ransom. It took about a week. UCSF hired a negotiator and some lawyers to to help them see their way through this, and over the course of a week, UM, we we got a glimpse into what it takes to

get out of this very very messy situation. Yeah. So you saw basically the communication between the operator and you. C SF tell us what was in there, because the back and forth is fascinating. It's really strange. UH. So you've got one side that that is, you know, objectively a criminal, right and in a real world situation, there's no way you you offer legitimacy too to their business model, which is holding you hostage. But in a cyber realm, there's no chance of or very little chance of at

least immediately catching these bad guys. You have to take them seriously. And that's what this negotiator did, was was provide them with the respect they needed. They demanded respect um, and so the negotiator had to provide them with that sort of certainty that we are taking you seriously. We we know that this is your business model and and you're just here to do your job. And so UM UCSF really had to sort of buy into that. And and so the back and forth over weeks was but

at times comical, almost like amateur drama. Ish um. But you know, car, I want to do a reading around the table with the lines back and forth here because you say, the guys uh at u c SF UM, we're saying to the hackers, we've poured almost all our funds into COVID nineteen research to help cure this disease. Um that on top of all the cuts due to classes being canceled as put a serious drain in the

whole school. You know, they're like, we don't have the money basically, and then the operator was like, wait a minute. You know the school, you know, you collect more than seven billion in revenue each year. You've got lawyers, you got security consultants. We think you should be good for a few mil. Yeah, they just weren't buying it right. They saw this as a massive institution that spend billions every year. Uh, and they should have a couple of

mill to toss around to get their system back online. Unfortunately. Or UCSFS contention was that, look, we're in the middle of a pandemic. We don't know if our students are coming back and if anybody's going to be paying their bills to us this fall. Um, we're trying to research a cure for this this disease. We just don't have that kind of cash laying around. So their initial offer was three dollars um and and the operator scoffed at it.

He just he or she just didn't didn't see it as a reasonable offer because they obviously have a job to do as well, and you know, like any salesperson, they have a boss as well. Uh. And they were afraid of taking three to their boss in the first place.

They said, look, you have to do better than that. Well, and you know, down lower in this story, and I encourage everybody to read this because it does take some twists and turns and you're reminded that as cinematic as this is, and I couldn't help thinking if they made the big Lebowski now it would have to involve some some bitcoin. Um. But you know, you do have some really interesting moments where the representative from UCSF basically is like, look man like as you say, like my jobs on

the line. Here people are essentially making fun of me. They think I totally messed this up. And you have the operator coming back and be like, it's really not your fault. We could do this to anyone. I mean, it's chilling in a lot of ways, and it's it's really true. Um. And so the most important aspect of that is it's it's unimportant to understand. I guess that this is a negotiation tactic as much as it is

a reflection of what's going on at UCSU. So it is entirely possible that this individual was being blamed for the hack. And you know, victims of ransomware attacks typically don't want to talk about this in public because being victimized can be Uh, there's there's a notion that it's embarrassing, right, but here, um, you know this, Sorry, the negotiator Um presented that look, I am UM being held at fault here and there's no way out of this unless you

help me get through this. So will you please, um, you know, help find us solution one that's reasonable? Uh, and that I think really UM sort of appealed to to the operator because they saw, look, this is a person who's taking us seriously, who was willing to work with us. I will I will make money off of this one way or another. And it did help. I told you it needs a table reading, right, Jason, you play You play the hacker, I'll play one of the negotiators. Cardigan, Cardigate.

You can like kind of you know, be the narrator. You'll be the clock. Yeah, totally, you could be the clock, like I could see. It's like a kind of a one act play. I mean, it's just this is our times, right, I mean, this is the kind of stuff that we are. Despite to some extent we have better controls, we still have to deal with stuff like this. Just got about forty seconds here. It's absolutely true and and what the

operator was saying was in fact the truth. This could happen to anyone and it wasn't the fault of UCSF. They were a victim, right and and the university had to do what it could to to get out of it. But it's important to understand that if you are attacked, um, talking about it and explain what happened to you will help others defend against similar attacks in the future. Yeah, well, props to them for sharing this story with you, and props to you for telling it so well. We really

appreciate you joining us. Check it out on the Bloomberg and Bloomberg dot Com. Card K Marotra is cybersecurity reporter for Bloomberg News. He joined us on the phone from San Francisco. You see SF hack shows evolving rest of ransomware in the COVID era. This is Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. Well, for this edition of Bloomberg Green, we turned to one of our faves, Noah boom Hire, finance reporter for Bloomberg,

joining us on the phone from Seattle. And he's looking south in this case toward California, where we know those wildfires are raging. If it's not one thing, it's another there in California climate obviously a huge piece of this fire risk. But there's a guy who's got a cure of sorts. Noah, this is a phenomenal story. We always love talking to you. Everybody has a guy. He's got a guy. I mean, this is really something. Tell us about what's going on here. Yeah, So this feature, UM,

I reported about a guy named Jim Moseley. He started a company several years back. Uh. The name is Sunfire Defense, and basically he's selling a variety of uh wildfire protection gear or uh that that homeowners can use to to help harden their homes and you know, when a wildfire comes through, hopefully will help save the structure. Um. The problem is that uh one of his main products, called FPF three thousand has uh drawn the attention of uh

some attorneys in Santa Barbara and the l A City attorney. UM, and they're basically alleging that he's made uh, you know, falser misleading claims about this product. Um. You know, namely that it's not nearly as effective as he says it is, and uh, uh that it's toxic, even after he said that it was a you know, not harmful to humans or animals and that kind of stuff. So tell us

you actually I believe witnessed it firsthand. Yeah, so in February, actually before the pandemic shut everything down, I spent a day with him in Los Angeles and got a demonstration on the product. And it's, you know, it's pretty compelling. He he takes a stick that he says was treated with this substance, and uh takes a blowtorch to it, and you know, the part of the stick that hasn't been treated, UM gets very brittle and breaks, and the part uh that is uh gets a nice char on it.

But then you know, he'll take a key out of his pocket or a coin and scratch that off, and you see the wood beneath. Can I just mention the cost of this? You put your story three dollars fifty cents per square foot, which means it costs tens of thousands of dollars to cover a large home using SPF three thousand. I mean, this isn't I mean, this isn't cheap. Now, mind you, if you're saving a multimillion dollar home, it's pretty inexpensive, I guess, but I mean it's not. I mean, look,

that's yeah, that's the value proposition. And you know, uh, Mosley, you know has an interesting client lift as a result. I mean he has treated parts of the Neverland ranch. He uh treated the home of Star Wars actor Mark Hamill and Malibu Um Dean Koon's the best selling novelists. Uh. He's managed to attract the attention of some well known folks.

And I mean, how much of this, you know, sort of taking a step back, Noah is about the fact that especially I mean, as we see these headlines, it's just unbelievable the to be reminded of this wildfire risk. And I was reading, uh and listening to a story recently by actually by a friend of mine out at k queed and California talking about the enormous risk of wildfires, especially to you know, those most vulnerable and living homes and nursing homes. Uh. You should check that out as

an aside. But um, I mean people will sort of do whatever they can in many ways, he's taking advantage of people, one could argue, who are desperate for any

solution here. Well, yeah, I mean that's that's essentially what the district attorney and Santa Barbara and the city attorney in l A are arguing, is that is that he's this is a predatory company that he's praying on people's and securities and fears and the you know, very well established fact that wildfire risk is high in a lot of parts of California and climate change is making it worse. I mean, that's that's ultimately why I wanted to do this story. Uh there, you know, mostly is not alone.

There are lots of people and lots of company peddling fixes to this problem. But the fact the matter is that development patterns and a changing climate have created a situation where you've got you know, hundreds of billions of dollars of real estate at risk, UM in this state, and UM, you know, people who live there are at a point that they're willing to just put their hope in their faith in unproven or you know, not very

well tested solutions to the problem. And you know, one of the things we tried to highlight this is really a story of our moment right now. We're going through um a lot right now with the coronavirus, and and there are parallels there. People are are are searching for cures to that disease, and um, you know, in the absence of of a solution and a vaccine, people are just grasping for for whatever they can. Now it's a

really good point. I'm glad you made a parallel because it did certainly recur to me as I was reading your piece. No Blue Hire, thank you so much. Finance reporter for Bloomberg. He joined us on the phone from Seattle. Check out his story in wildfire ravage California. A salesman is peddling cure. Read that story and more on climate news, science, and the environment at bloomberg dot com slash green bro a journal. Yeah, but you let me drive? Oh no, no, no, no,

who's going to drive? Honey? Please, I'll do the right velvet. I want to drive ball, just drive baby. The questions trying. This is the drive to the globe. Thanks, we'll drive us down on Bloomberg Radio. All right, it is time for the drive to the clothes. And as we head towards that, we're about eleven minutes way, less than eleven minutes way. Let's check out with Michael Congino, President and portfolio manager for the Permanent Portfolio family of funds. He

joins on the phone from San Francisco. Michael, how are you? How are things in San Francisco? Good? Afternoon, Jason, Uh, pretty good, although we've had a few fires, um, you know, north and east of the city, um Tahoe area, the wine country, which is making the air quality not quite as good. We had a lot of dry thunder and lightning earlier in the week. Um didn't a mount too much rain, but some of that lightning hit the ground and cause some fire. So it's it's creating an early

start to the fire season, which has been difficult. Yeah. Well, and on top of you know, California and I know northern California and southern California have had uh sort of a different experience of late and really throughout the pandemic. But um, I tell you, I know it's not getting any easier for you guys out there. And yet in the midst of all this, we have a market that continues, even if we're off our highs today, to grind higher.

What do you make of if we're asking everybody we can talk to about this seeming disconnect between a pretty scary underlying economy, a health crisis, and a market that is setting records. Well, it's not unusual for the stock market to not exactly correlate to the broader economy. I mean for the better part of the two thousands. I mean you had you know, roughly one to two GDP growth, and you had stock market and your returns up in the teams to or more. Um So it's nothing unusual.

The stock market is predicting future economic activity in all likelihood. Some of the things that are driving the stock market, you know, a lot of the games are centered in a few industries like technology UM, information services, communications, UM, that are doing very well in this downturn versus other broader economy industries that are more cyclical, that are more um dependent on human labor, and those sorts of things.

I have to jump in. Two thousand didn't end so well, no, I mean that was the beginning of the two thousand recession. Um uh. And you know you had a ten year run at that point that h that you know, we're talking two thousand, nineteen, we thousand, talking about two thousand

itself twenty years ago. Well, I'm just saying, you know, you said, you know, we've seen market disconnect before from kind of what's going on in the real economy, and I'm just thinking you mentioned, you know, the two thousand run up, and it didn't end so well. And I do wonder if you think we're so disconnected. We have seen it before, but do you think this isn't going

to end well? Well? At some point? I mean to me, there's a there's a broad, long term corel correlation between stock market performance and the economy because stocks are driven on the basis of the health of the economy and the ability to to own the companies that make goods and services and that sort of thing. So you do have a broad correlation over time, but in shorter periods you can have all kinds of anomalies that that make it so the stock market has a great year and

the economy does not, or vice versa. And what I'm saying is that in this particular vironment you have one of those You have investors anticipating a better economy coming out of COVID. You have certain industries that are driving of the large majority of the market gains that have been doing better than the overall economy during this this

period of COVID. So therefore the stock prices of those companies are going up and maybe giving a warped picture of the broader stock market in light of the weaker broader economy. So there's a normalies even now that make it so that again it's not unusual for the stock market to not exactly track the broader economy. Talk to me about several silver and gold, Michael, because I know that that's something you've taken a look at, and I know it's something that's been on the minds of a

lot of investors out there. How do you factor those precious metals into the investment thesis? Well, in our in our program, we we believe that you know, owning those assets are an integral part of long term wealth building, and so a failure to own them leaves a hole in your strategy. UM. So our view is to not only owned stocks and bonds, but also in commodities, natural resources, real estate, and and gold and silver as asset classes.

So we believe in them long term. And when you look at the environment right now, um, with the fedback stopping everything, um, with the likelihood of even more stimulus than we've already created, with the ability of that stimulus to get onto main street, which was not true ten to twelve years ago. It stayed mostly in the banking system to recap the banks. Um, you know you have inflationary pressures or potentially um expected inflationary potential, you know,

pressures when the economy begins to grow again. Not only that, but the uncertainty factor created by COVID. I mean, to me, there's still a lot of uncertainty with respect to really what's happening I you know, and until that gets solidified, I think you could go on a number of directions. So when you add all this up, it's not surprising that the prices of gold and silver have have gone up UM and and we'll likely continue to do so. Keep in mind that gold really didn't do much for

most of the the odds. I mean, it was pretty benign, and it's begun to move again, so there's some valuation catch up UM. But also the conditions are fertile. Negative real interest rates across the curve is another big one UM, and I don't see that changing anytime soon. So there's there's room for gold to go even further and silver as well. If you look at it on a valuation basis, UM. You know, the value of an ounce of gold is about point six of the value of a share of

the SMP five index evaluation metric. We haven't seen since the middle of the the odds around two oh seven to oh eight UM, so it's not overly valued even though it's had a big run and uh and again it didn't do much for years, so there's a catchup period that uh that is factoring in as well, and investors are rediscovering it given this overall back stoff, and I think that's that's why you've seen the moves you've had.

I would also say that it's a volatile asset. It can go up and down a hundred bucks pretty quickly, so investors need to understand that. But generally speaking, if you buy it and hold it and you look look back years after you bought it, you're generally up. There's a strong correlation between the value of gold on a long term basis and the creation of of the money supply and liquidity and credit and I don't see that

changing at all. So for long term investor, picking spot and definitely you want to hold some well, really really thoughtful UM as always, Michael, thank you so much. Michael Codino. He's president portfolio manager a Permanent Portfolio family of funds. You've got roughly two point two billion in assets under management.

The Permanent Portfolio fund. By the way, in the nineties percentile for funds and its category of the past five years is up nearly eight percent annually in each of those five years, so he's had quite a run up.

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