March 30, 2016; Bill King : The Fed is Beyond Trapped

Weekly Commentary • Apr 01 2016
March 30, 2016; Bill King : The Fed is Beyond Trapped
David McAlvany Posted on April 1, 2016

The McAlvany Weekly Commentary
with David McAlvany and Kevin Orrick

“You just have to be flexible. But you have to have insurance. If you don’t own any gold or silver or these things, you’d better own some. Now, how much you need? That depends on your personal situation and your personal preferences, just like any good insurance salesman would tell you. You look at it, you figure out what you need, and what kind of mix – what kind of mix of coins or bullion, or whatever you want to do. But I do think you had better have that as a safety net.”

– Bill King

Kevin: David, one of my favorite guests, and we have him on a couple of times a year – Bill King. He is a street fighter of trading. When you talk to theory guys – academics, people who are studying these things but never really having to apply them – they can bring interesting things to the table. But then you have a guy who has actually lost money with theory, and doesn’t want to do it again. And then starts making money with actual experience. That’s Bill King.

David: The King Report is something that we read internally on a daily basis, and it is an invaluable resource for us, and something I would highly recommend to people who have the same strange fascination with the markets and politics and finance that we do. So it’s been a complement to us in terms of what we do and how we think, and we do enjoy the conversations we have with Bill when he joins us on the Commentary each time.

Kevin: Dave, like you said, this is something we read every day. We get an awful lot of research on our desks, but frankly, if I have hardly any time in a day, if it is a busy day, I just don’t miss the King Report. He has done this for four decades, going onto five?

David: There is an inherent value when someone has done something over and over and over again. Not for a week, not for a month, not for a year, but for a decade. And by the way, at the end of this month we are celebrating our eighth year here at the Weekly Commentary. But we’re still trailing Bill King by at least three decades. He has been doing what he has done for four decades.

Bill, looking at first quarter dynamics, it has been fascinating to watch the investment markets. In a word, it has been volatile. How would you describe the first quarter in narrative form? We’ve had the commodity swings, we’ve had the stock market declines, a recovery. At a certain point, investors just step away because of that byword – volatility.

Bill: I think the first quarter has been a microcosm of the past several years. You have this systemic deflation, retrenchment in the economies – whatever you want to call it. And you have the central banks fighting that by trying to inflate. And then every time stock prices start rolling over or you start getting the key technical levels, central banks come in and intervene, and they intervene both in real terms, real action, and verbally. How many times are we going to see that, where the economy looks bad, the stock market is rolling over, some kind of banking crisis, and all of a sudden the central banks all come together and start running their mouths, cutting rates, doing whatever they have to do to prop up asset prices. And that is exactly what has just happened again – Ground Hog day, over and over and over.

David: When you look at the Fed, how trapped would you say the Fed is?

Bill: Well, they’re maybe not trapped, but they’ve lost all credibility, and they’re losing it again today. The last couple of days there has been a parade of Fed officials out there saying, “We should hike. We should hike in April. Inflation is picking up.” And today Bullard is saying it looks like we might overshoot any inflation. These guys have lost all credibility. They say they’re data-driven. They ignore the data. Even the Fed’s measures of inflation, beyond core, the sticky wage of the Atlanta Fed and the Cleveland trend mean PCE are all showing inflation above thresholds that they have highlighted for years. Yet they didn’t hike.

And now they’re turning around and the guys are all running out and saying, “Well, we should have hiked, and we still can hike.” And people are thinking, “What is wrong with you guys?” And of course, I think the cat was let out of the bag last night by Philadelphia Fed President Harper, when he gave a hawkish address last night about we should be hiking rates, and he said one of the reasons they didn’t was because of market volatility. Now, that’s a euphemism for stock prices were down. And people are looking at these guys, thinking, “What is wrong with you? You hike in December when the economy looked bad. You had good numbers in January. Inflation takes off. China stabilizes.”

Capital was pulling out of China in the fourth quarter and into January. Come February, you don’t hear that about China anymore, that whole capital outflow and the conversion of dollars just dried up. There has really not been a problem. Oil bottomed in mid-February and took off. There was no reason for them not to hike rates. All the excuses they used in the past – China, oil, the inflation, the economy – none of those were there. In fact, it was to the contrary, and they didn’t hike rates. And of course you saw an ex-economist from the Fed a couple of days ago put an article out that the reason they didn’t hike rates was because of politics. They didn’t want the market down in an election year to hurt their people. So there is just no credibility with the Fed right now.

David: They have committed to raising rates and there is more talk about raising rates. Do we see the same thing happen again? They raise rates in December and the markets start to sell off significantly January and February. Are we back to that, if they feel like they have to save face, and regain some degree of credibility by raising rates? So we just sort of wash, rinse, repeat, January and February all over again.

Bill: That’s it, they’ve lost their credibility, and I think the Fed is divided. I think there are some serious people there who want to do what’s right, and then I think you have the political scoundrels. You have the Fed screaming, “You can’t audit us, you can’t look at what we’re doing or you’re going to hurt our independence.” And yet you have them contributing money and a preponderance going to Democrats. Lael Brainard just gave money two months ago to Hillary Clinton. Talk about tone deaf – is it tone deaf, or is it like the other politicians where it is just arrogance, that they believe they’re in control of the economy? You have a handful of academics that are running a command economy here and they don’t care. And then you have the feckless leaders in Congress that let these guys get away with this because they are papering over the tough decisions that the Congress should be making. So it’s a terrible mix, and what you get is people getting squeezed by the Fed. You see this in so many different areas and it is reflective in the politics that is going on, and dissatisfaction in the public.

So there are two sides to this story. One is Wall Street. The other is what is happening to average Americans. Wall Street did well for a number of years, now Wall Street is not doing so well. The Fed ignored the average person for a couple of decades, but they kept Wall Street in their corner. But now with the volatility, now with all the lay-offs on Wall Street, the Street is kind of turning on the Fed. The Fed has few friends. If you looked at the last testimony of Yellen in front of Congress, both sides of the aisle pounded her. In the past Democrats were supporting, whether it was Greenspan or Bernanke, because they were pumping easy money, and you had Charlie Schumer telling Bernanke, “Get to work, Mr. Chairman.” And that meant only one thing – pump more credit in here, pump more easy money.

This time you had the Republicans beating up on Yellen for the easy money, and you had the Democrats pounding on her for not regulating the big banks, and for skewing income and concentrating income and wealth. They are both talking the same coin but they’re different sides, and that was the real surprise. Yellen had very few defenders. Part of it is the election year, but it is also that the Fed has put itself in the corner.

David: Going back to that issue of Brainard’s contributions, Bloomberg noted that about 79% of federal level campaign contributions from Federal Reserve staffers since 2014 to the present have gone to Democrats. And you just wonder, are monetary policy prerogatives vulnerable to party politics and personal bias? Is there more accommodation and verbal dovishness from the Fed leading into the election? We kind of saw that a little bit with Bern Bernanke in the era of Quantitative Easing-3 which he announced just two months before the 2012 elections. At what point does the general public say, “Look, you’re making decisions which don’t represent the interests of America, or of Americans. This is dirty.”

Bill: I think the public has been saying that, and I think that’s why the Congress is now going after the Fed is that they know that people are upset. And of course, politicians don’t want to blame themselves. They look for other people first. Only reluctantly will they look at themselves. And the Fed is in an endgame for itself. The Fed keeps jumping beyond what their mandate has been. Again, you have academics that have little or no real world experience in industry or banking, and they’re running their theories. The academics are used to coming from universities where they bullied teenagers and young adults and browbeat them and they’re not used to being challenged.

And more importantly, you take these theories into practice and they’re blowing up. This is decades of theory and thought and research blowing up on them, and they don’t know what to do. And they’ve bet the U.S. economy and banking system on it. So that’s why they keep doubling down, and that’s why every time it looks like the stock prices want to go down or the commodities are rolling over these guys panic, because they don’t know what to do. You heard Bernanke, years ago, say that when you’re near the zero bound, 98% of monetary policy is verbal.

Let’s stop the pretense. Verbal means B.S. “We’re going to B.S. the markets, we’re going to talk them up.” That’s all that verbal means. “We’re going to threaten that we’re going to pump even more credit.” Why would you do that? There is only one reason to do it, and that is to push stock prices up. That’s the only reason you say we would have to have the verbal intervention. Draghi has been doing it, they’ve all be doing it, and that’s back to your initial question about the volatility. But you also lose your credibility when you’re doing something like that.

So it’s a terrible mix, it’s a dangerous mix. You see the dissatisfaction in Wall Street for the first time, probably, since 2009. And the general public has been dissatisfied so the Fed has very few friends. Probably the only friend they had was a handful of politicians, but the politicians are starting to understand how dissatisfied the American public is, and something unpleasant is going to happen to the Fed, especially if you get an antiestablishment candidate. Whether it’s Sanders, Cruz, or Trump in there, the Fed is going to have a price to pay, and it’s not going to be pleasant.

David: So let’s go back to that issue of politicians now being critical of the Fed, and for the longest time they have allowed for monetary policy to do the heavy lifting where fiscal policy has taken a back seat, and we could be sort of transitioning from monetary policy stimulus to fiscal policy stimulus. What do you think the implications are for growth, for inflation, for asset price volatility, if in fact, politicians are sort of taking the reins back? Does that make the course more predictable as people just say, “Hey look, no, no, somebody’s got it under control. If it’s not the Fed, then it’s Congress, and it’s these massive trillion-dollar spending programs.” Do we ignore risk, or do people begin to realize this is desperate and they’re just grasping at straws?

Bill: People realize, increasingly, how desperate the situation is, and how the Fed is. But you brought up a key subject. Anytime you go for a restructuring there is pain. That is what Reagan did when he came in. He took the restructuring in 1981 and 1982, and it was very painful. And finally we came out of it and we had a boom for a couple of decades based on Reagan and Volcker biting the bullet and doing what they had to do there in 1981 and 1982. Now, depending on who comes in here, you are going to take this restructuring. You can take the Fed out of the game, whatever you want to do, but whoever comes in you’re going to have some type of restructuring and there is going to be pain.

The question is, will you take it early? That’s what we didn’t do in 2008 and 2009. You didn’t take any of the restructuring, you just started printing money right away. Same thing with Bush in 2001. The economy was rolling in recession, you had 9/11. Instead of taking the hit from the excesses of the bubble, Clinton, to stay out of jail when they ran the bubble there, 1998-1999, they immediately started stimulating instead of taking the hit. That led to later problems of the housing bubble and then 2008 and 2009. And what have we done here? We’ve gone straight through.

Trump has alluded to this a couple of times, and I’m anxious if he is going to do this in the general campaign, as he is laying this on the Fed for trying to protect Obama by running a bubble. And he says it, and the media just keeps glossing it over, but he just said it again this week on the Washington Post editorial board. He said, “We’re 19 trillion in debt, we have to cut back our commitments to NATO. We can’t afford this, we’re in a bubble, and it’s going to burst, and it’s going to be ugly.” It is interesting to see how this is going to play, because everybody understands what we have is unsustainable, and if it is unsustainable it means it is going to end, and then you have to do some kind of restructuring transition and it’s going to be painful.

David: Monetary policy – you talked about 2008 and 2009 just a moment ago – we have monetary policy which, today, is resulting in corralling investors into riskier assets. It seems to mirror the policy choices and the market responses that we saw in 2008 and 2009. Is there a culpability issue with today’s central bankers? Is that what Trump is ultimately going to do? Say, “Look, we’re here, and people are being destroyed financially. Savers and the middle class are being destroyed because of these policies.”

Bill: He’s saying that. Cruz is intimating it, too. And even Bernie Sanders. Those are the three anti-establishment candidates right now. Wall Street ran around for a year saying this is good. It was decades ago, and I can’t remember the guy’s name at General Motors who made the statement, “What’s good for General Motors is good for America.” The media banished him, but the general public understood what he was saying. When business does well, the average American does well.

And then we got to the late 1990s with the bubble, and average Americans weren’t doing well, it proceeded to get worse for the next decade or two, and then people were joking that what the establishment was trying to say was, “What’s good for Goldman-Sachs is good for America.” And Americans got more and more disenfranchised from that. They no longer believe that when the stock market is booming it’s good for America because it hasn’t translated. Three of the four candidates are anti-establishment and they’re going to run against Wall Street. Now, Hillary is going to try to run against Wall Street, but she has a problem because they’ve taken all the money from Goldman and the other people.

But that’s what the politicians are reluctantly figuring out – how dissatisfied, how disenfranchised Main Street is. This is going to be Main Street against Wall Street. For years the establishment tried to tell Americans, “As long as Wall Street is doing good, you’re going to be doing good.” That has broken down over the last two decades. That existed in the post World War II era for many decades, but average Americans understand that. The political class doesn’t understand that, but what is going on now is, they’re starting to figure it out based on what Bernie Sanders and Trump and Cruz are doing here, and all of a sudden, “You know what? Something’s wrong here.”

And I love it when these people say, “We can’t understand this.” Oh really? You haven’t paid attention to the polls and surveys for the last ten years? The average American is fed up with these trade deals. They’re fed up with talking about how these things are going to be good for average Americans, and they’re not. They’re only good for the ruling class. And there is a revolt on. There is no question there is a revolt going on. It has been going on for years and it keeps poking its head up. First it was the Tea Party, and that was suppressed, mainly by the GOP establishment, and then all of a sudden the revolt just gets stronger and stronger, and something is coming.

It is going to be interesting to see how the campaign and the election play out, but whoever comes in is going to have a daunting problem because we are at the edge. Even the central bankers are saying we’re at the limit. Bernanke, very quietly last week the media reported he said we’re approaching the limit of monetary policy. For years when we said, “Well, gee, you’re at the zero bound, you’ve done all this QE, you’re out of bullets,” the central bank would say, “Oh, no, no, we can do more.” Like what? You can only do two things. All you can do is create credit, and you can lower rates. That’s all you can do. So don’t say there is more you can do.

When you create credit by monetizing bonds, what do you think you’re going to do, monetize ETFs like Japan, or monetize commodities? Well, you’re doing that already, indirectly. But for Bernanke to make the admission – that’s about it here – and even Draghi is now saying that. These guys understand that. They understand that once they went to the negative rates they’re hurting people more than helping, but they can’t back out of it. You see it in the bank of Japan – it’s a global phenomenon right now.

So, it’s very difficult to navigate right now because anybody that is dealing in the markets understands that they are artificial, and this gets back to your point. You have artificial markets, artificial prices, the volume is collapsing here because nobody wants to play because you don’t want to buy stocks or even some commodities at artificial levels, but you don’t want to really short them because you’re afraid that these guys keep intervening.

And that’s what happened in the first half of 2008, everybody on the inside knew the financial system was collapsing but the Fed kept giving you all these alphabet soups of facilities. Remember TAF, the TSL? It was TSLC, then primary dealers? They just kept trotting these things out every other week and it kept people in the markets. It kept the hedge funds in, it kept the institutions in. Then all of a sudden the collapse showed up, and they all got caught. And they’re doing the same thing again, but this time it will be worse.

David: On a similar note, we have perceptions which are being controlled, you have people who are staying in, in large part because there is this meme that we are in recovery. And if you look at official statistics and economic numbers, the ones that are highly advertised, no one really cares about the seasonal adjustments and the impact that has, but you are controlling and manipulating a perception, which is, keeping people engaged, perhaps longer than they should be. Maybe you can tell us a little bit about the significance of a seasonal adjustment, and how, for the insider, maybe it makes sense and you know what is happening, but for the common man it’s actually why you are at jeopardy?

Bill: Again, it gets back to desperate times. These are desperate times. When you are 19 trillion in debt, the Fed has been running the most promiscuous and outrageous monetary policy in history, and for this spell. When you go back and look at World War II, what you had to do in the mobilization and the aftermath, it was nothing compared to what we’re doing now. And there is this desperation. People understand that we are at the end of something. They rode the tiger and they can’t jump off because they’re going to get eaten by it. So everybody is looking for the magic genie to show up and save them, and it’s not going to happen. But there is no other recourse so they just keeping playing the game, whether it’s the Fed, whether it is elected officials, so you just keep moving down the street. And you’re right, they want to keep people in.

When you come back to everything, it’s the debt. Again, listen to the candidates. Is anybody talking about the debt? The debt is the reason we’re having all these problems. And when the debt blew up in 2008-2009, when you had the dreaded debt default – that’s when the sovereigns and the central banks saved the banks, saved whoever they could, what people didn’t understand is that the sovereign countries put more risk on themselves. So all this crisis in the European world, which besides the 2009 we had 2011, 2012, then the Greek thing in 2014-2015. It just keeps showing up, because you can’t pay the debt. So everybody’s playing the shell game – “How are we going to – well, the ECB, they’ll buy all the debt, or the Bank of Japan.” Everybody is going to find somebody to buy all this debt, or to paper it out. But that’s the problem.

And we keep increasing the debt, and the central banks are all concerned once that debt deflation starts, it is game over. And then it drags down everybody. In Japan, China, it is a debt problem. It is absolutely a debt problem and it goes back to what Margaret Thatcher said, “The problem with socialism is, eventually you run out of other people’s money.” And that’s what has happened here. We’ve run out of money. You can go back, when the U.S. was running up all these debts in the late 1960s and 1970s, Nixon shut the gold window and then gold and silver boomed until 1980. And then Reagan and Volcker kind of bought us time, but by the late 1980s – in the last 1970s everybody thought that Saudi Arabia was going to fund – the key term was “recycle petrodollars.”

Anybody that was around remembers that. Walter Wriston and David Rockefeller, the Chase and City Bank CEOs, the most important bankers in the U.S., “We have to recycle these petrodollars. That’s how we keep the U.S. economy going.” All this wealth was going into OPEC. Then we got into the 1908s and it was Japan. “Oh, Japan has all the money in the world, so we’re going to recycle all that money. They’re going to come here and buy Rockefeller Center and Pebble Beach and that’s how we’re going to keep the economy – that’s how we’re going to sustain all this debt.”

And then in the 1990s we did have the situation with the bankruptcy of communism where everybody wanted to buy the dollar. You had China, you had Eastern Europe, you had the Soviet Union – all this was imploding. The Japanese bubble was burst, so people had an insatiable demand for dollars, so Greenspan could pump money, could fund all the debt, and then that all blew up in 2000. And in the last decade, we started talking about how it was going to be China. “China has all this money. And in the 2000 decade we have to recycle that money, and okay, all that money we’re sending to China, but it’s going to come back here in investment.”

But you can see how this thing has played out that we keep taking on debt, the same with Europe, the Western world, and everybody is looking for the magic genie that is going to keep the game going. And right now, you’re out of magic genies. The last one was China, and they overplayed their hand, just like the Saudis overplayed theirs, just like Japan overplayed theirs, just like the U.S. overplayed theirs in the 1960s. And now you’re left with enormous amounts of debt that anybody with a modicum of understanding in mathematics knows is unpayable. You cannot grow out of 19 trillion in debt.

David: Back to lower rates. Is this the final genie, where we know that there has been a high cost to savers, billions of dollars in lost income to savers, and the presumption of central bankers, as you say, primarily academics, is that if you lower rates it is going to stimulate growth. And yet, we’ve found this transition point at the zero bound where all of a sudden the rate structure is no longer stimulative, but it is actually creating an economic breaking instead. Are they recognizing that, or are they clinging to what they must in hopes that they can manage high levels of debt as long as the interest paid on that debt is paper thin?

Bill: It’s actually both in its bizarre way, and I think you are articulating an important point, that unless you are really stupid you have to understand that it’s not working. And you see there is reluctant admission by a number of people, even Draghi. The new mantra is for the central banks. For decades it was that we can always save the world, and we’re going to show you. Now it is like, “You know, all these measures are just temporary. You guys have to restructure. This is on the governments now. We can’t keep doing this.” So there is that admission.

But on the other hand, they’re the captain of the Titanic. What was his name, John Smith? The boat is going down, and he knows it, and what’s he going to do? He can’t run around and create panic and say, “You’re all going to die, or most of you are going to die.” He just has to keep the stiff upper lip and try to keep people calm and hopefully somebody comes, the Carpathian, or whoever comes and picks up the survivors. And I think that’s what is starting to happen. They’ve played this game for seven years now, and it’s making matters worse. It’s just what you said. They’re taking money from the masses, putting it in a few hands, and then the people that have the access and have the ability to leverage that money, are winners, and that’s why you’ve had this concentration of wealth.

The people that control large amounts of assets have won. You’ve taken all this income interest away from, literally, billions of people around the globe, and put it in a few hands. And you’re right. Part of the low interest game is to help the people that are in debt, which are mostly sovereigns. Can you imagine if you had the normal 5-6% interest rates now in the U.S.? You’d be talking in excess of 1.2 trillion in interest payments per year. That’s astounding. And that’s part of the game. There is no question that’s part of the central banks trying to facilitate the government debt. That’s was Trump was talking about, how the Fed has been bailing out Obama and creating this bubble, and bailing out Congress so nobody has to make any decisions. You can just let this game go.

That’s the thing now. What the game has become, for the Fed, and for the sovereigns – who is going to take the hit when it blows up? Who is going to take the blame? That’s why you can see Draghi and the other central bankers trying to move away. They are starting to say, “We’re rock stars, look at us, aren’t we great guys? We saved the world.” Now they’re like, “Um, you know, we can only do this temporarily. It’s on the governments to do what they need to do.”

David: It raises the question, who is going to take the hit? Who is going to take the blame? Who is at greatest risk? You have the establishment that is in the crosshairs.

Bill: Well, that’s it, right there. They’re going to take it, and the establishment is an encompassing term. And it means, all the levers of power, the ruling class, and the Fed has become joined at the hip with big government and the big banks. That’s the game. And it’s been historic. If you look back throughout history, it has always been the ruling class, and when they go on these spending sprees, all the way back to the 17th century, and especially the 18th century, with all the wars, when they wanted to do the government spending, whether it was for the guns or the butter or both, you had to have somebody to finance it. So it was always the financiers and the bankers and the sovereigns all tied together. And when you had the blowup, whether it was the French Revolution, or some of the other problems throughout the centuries, that’s the establishment, and it’s not just government, but it also is the bankers and financiers.

So in the past, it really fell on the ruling class, but I think now in the age of internet, I think you see – and the Fed has brought it on themselves. I remember 30-40 years ago, very few people even knew who the Chairman of the Fed was, let alone the Presidents or the Vice-Chairmen. Now these idiots are out almost daily speaking and running their mouths. They should just shut up and go away. It tells you how much they’re trying to influence the markets because they’re out there daily. But you can’t do that. That’s like listening to sports radio every day. It’s just nonsense. You get an element of wisdom here and there, but the amount of noise and jabberwocky is just overwhelming. And this didn’t happen before. But again, it just shows you how desperate these people are.

And also, on the ego side, this is all Greenspan. My gosh, I can’t remember how many times Volcker talked during the 1980s. But then all of a sudden people were slobbering all over Greenspan because he was creating all this credit and we had these bubbles, and he got full of himself and now all these other guys are all full of themselves out there running around talking. And it’s not good. It’s not good for anybody.

David: So is it a positive consequence if in the political life cycle of America we are breaking into an era where the political gridlock between two parties is broken and you end up having a viable third, fourth, fifth party – something more representative of the European political system where it’s not just a two-party dominated system, but where you have to create coalitions because everybody has an opinion, and now everyone is being heard as opposed to being marginalized by the ruling classes defined as RNC on the one hand, DNC on the other.

Bill: The empirical evidence would suggest that that is even a bigger disaster. Look what is going on in Europe. As bad as the U.S. is, Europe is far worse. And Trump is alluding to this and saying, “You know, why don’t you guys spend your own money to defend yourselves? We can’t keep spending money to defend you guys, especially if you don’t have the will to defend yourselves? Why are we spending all this money around the world and all you guys are doing is exporting goods to us, and we’re protecting you. We’ve got to stop this.”

So that gets back to your coalitions, and you do have a coalition government here in the U.S. That’s what people would argue is that is the problem, you don’t have anybody come in and address the issues. When you have coalitions, just like Europe, my gosh, what is going on there? Since World War I it is the same nonsense over and over again, waiting for America to come in and protect us and save us, but at the same time they tell us, in the aggregate, they don’t really care for America, they don’t want to be influenced, but they want the protection. They’re like teenagers. “Don’t tell us what to do, but give us the money, give us car keys, give us shelter.” That type of thing.

And Trump is saying, “Okay, it’s time for you guys to be independent. You want to be the European Union? Go ahead. We’ll take our troops out, and you guys defend yourselves, whether it is against Russia, or radical Islam, or whatever. It’s time for you guys to act like adults. Figure it out yourselves.” Again, when you have all those coalitions, you’re always coming to consensus. And that usually is not a way to solve a problem. You can even see that with big businesses. Most of the big corporations have a very strong leader, and that’s why you’re seeing in the U.S. right now, the movement is that they want somebody strong. They want someone that is going to talk tough and be tough.

And whether it’s terrorists or whether it’s Wall Street – whomever – the Americans are fed up with this coalition type. You don’t get anything done because you can’t satisfy all these people – special interests – and that’s what we have. When you look at these bills that come down, all these little add-ons, all these little things that the lobbyists throw in, it’s ridiculous. And you don’t know about it for years, and you say, “How did that happen? How does GE get 35 tax breaks and they don’t pay any taxes?” And you see all these things thrown in. That’s the coalition government and I think that’s what people are clamoring for now is a strong man or woman to come in and straighten this out. That’s what we had in the 1980s with Margaret Thatcher and with Ronald Reagan. People said, “We’ve got to clean this thing up.” And we’re going through it again now.

It is going to be interesting, too, with England in June with their Brexit. I don’t think the people have figured out yet how important that could be, or how disruptive that could be. And even the Fed is talking about that, how this could be disruptive to the markets and maybe that’s the reason why they don’t want to hike rates because if England pulls out of the EU it could start a domino where other people start pulling out also. But it’s all breaking up. You can see this pressure constantly coming up. And now you have Merkel. The thing that has held Europe together, besides Draghi, is Merkel.

Germany has been the strong engine of Europe, an unchallenged leader, and that is Merkel. She had this incredible popularity and she could do what she wanted, but now because she has totally mishandled the immigration – migration – crisis there, and the people are fed up, she is in real trouble, politically, in Europe. You had the terrorist attack in France and in Brussels. If you had a serious terrorist attack on German soil now she’s is going to be finished. And then when she goes, and the far right is really gaining strength there in Germany, it’s going to be real interesting to see if they can hold the EU together. Again, if Britain moves out, Merkel starts falling apart, you’re talking another real bad situation in Europe again.

David: So we roll the clock back to the 1990s and maybe even an earlier period where there were greater capital controls, more trade tariffs, people focused on national domestic political issues rather than the grand global themes of trade and cooperation. What does the next ten years look like in terms of global growth if everyone is becoming more insular in their focus?

Bill: It becomes a restructuring. It’s unsustainable. You just can’t have a handful of countries – it’s just like after World War II, the U.S. at one point was almost 50% of global GDP. When you think about it, most of Europe was destroyed, Japan was destroyed, China was not a factor, Russia wasn’t even a third world country back then. They were really primitive. And so the U.S. had this incredible economic hegemony, but it was just unsustainable. And of course that led to the problems we had here in the 1970s. And that’s what is transpiring here. You can’t just have Germany being the major power in Europe because what happens is everybody else sits back and at some point then you get this concentration of wealth and income, and then you get where the southern regions of Europe are just falling apart.

And for a while the north doesn’t care because they’re making a ton of money, but then when it stops – and that’s what has happened here in Europe. All of a sudden when the oil went down, Norway and Finland and those that were running these tremendous budget surpluses because of oil. As a household you can support other people, or give to charitable contributions, but once your income starts falling you can’t do that any more.

The same thing with Germany. Once they couldn’t export to the emerging markets all their machine tools, once that started falling apart, all of a sudden, their economy, they can’t be the sugar daddies to everybody. And that’s what is happening here. People forget that a decade ago, or a little bit more than that, Germany was a basket case. It’s just that with China and the emerging markets buying off their machine tools to industrialize that Germany got going, and now that’s ending for them. There was a great political cartoon where Merkel is saying, “Yes, all you migrants come here, you’re good for us, you’ll work and pay taxes, and you’ll help us culturally.”

Well, now the story is, they can’t. The German industries now are saying, “We have no jobs. You invited all these people in here – there are no jobs.” So all they can do is take benefits from the government and they’re disaffected because they don’t have work, and you have that whole bad situation. So we’re at the end of something here, something big, and I think the rumblings you are seeing in the gold market in the first two months of this year were a sign that the insiders know something is going to happen here in the next year or two that is going to be forcing the restructuring. It’s not going to be globally, but it will be a country or two that are going to start restructuring.

David: So what the gold market was indicating is that the status quo is getting ready to change. The Fed, although we have been talking about the loss of prestige and credibility, there is going to come a point where, whether it is the Fed, or the ECB, or the Bank of Japan, or maybe it’s a whole lot of central bankers, the folks have been holding together the sun, moon and stars in space and when they lose credibility, there is an adjustment that takes place to asset prices, which to some degree favors gold as a sideline asset, as just an opt out. “We don’t know what the world looks like tomorrow so maybe just having something out of the financial system makes sense.” Is that more or less what you are saying?

Bill: I think you’re dead on. People run around talking about gold being a hedge against inflation. It’s a mediocre hedge against inflation, but it’s a terrific hedge against rampant inflation and political upheaval. When people lose faith in politics they lose faith in the sovereign. And the sovereign is the currency and the debt of that country. Again, the debt and the currency are the same coin, just a different side. And that’s what gold is telling you. They believe the sovereigns and the central banks are losing control of the game. That’s what is going on.

It caught people by surprise. I thought there was a real good chance gold would make a bottom at some point in 2016 just based on your normal cycles, tops and bottoms. It was due. Every time gold is down for five years in a row that’s a major bottom – a major bottom. I think there was a 1980 peak, and then I think it was 1986 or 1987 was a low, but you can go back and trace how that works out. And it was time. It was time for gold to make some kind of bottom, but I think it caught everybody by surprise that it really started near the end of December and by January it was off to the races.

Those kind of moves – you can get trader moves where you pop something up, just like oil moved the last couple of weeks. It was traders playing the seasonal trade for gasoline. Crude oil and gasoline tend to rally between February and May, especially if the 4th quarter is weak. That’s a seasonal play for gasoline, and that’s largely what’s been going on. But the gold move, the way it took off, smacks of informed buying. When you look at a chart, you have to try to ascertain what caused the move, and that’s one thing I learned being a trader.

If something popped up, whether it was a stock or a commodity, and it was trader driven, and I’ve been on the end of that where we knew other traders were involved with other traders pushing up a stock or a commodity. It was a trader’s action as opposed to if somebody important, smart money, like the industry or some important players were buying a stock or buying a commodity. That’s where technical analysis, if people rely solely on that, they get tripped up – who is creating the move?

The move here in oil is largely trader driven. The gold move appears to be different. There is a different buyer who has been buying into gold in the first two months of the year, and I think that is a more significant move. It took off in a way that is kind of holding in here even now. Gold looks like some serious people are accumulating gold. We know some central banks have been buying, but there seems to be a really strong component to the gold market.

David: What we’re really talking about is a long, drawn out political and financial restructuring, and that is not something that takes place overnight. So arguably, if you’re reflecting a degree of insecurity in the marketplace in the gold price today, it’s not a flash in the pan event in the sense that the restructuring doesn’t happen overnight. It has yet to even really commence in earnest. All we’re having is a period of discontent, an expression of sociological and political frustration, but we haven’t gotten to the hard work of taking the pain (laughs).

So from that standpoint, we could very well be at that early stage, like 2001-2002, where you see a little perk-up and something changes in terms of a trend dynamic, but no one really cares at this point. After five years of gold doing nothing but going down, frankly, the vast majority of people don’t care about it. They just don’t care. It’s not where you would be looking for opportunities. There are lots of people who would be saying, “Look, oil, the bottom’s in. Let’s buy. Now.” And they’re looking for an excuse to buy. I don’t see many people looking for an excuse to buy gold. Sentiment is pretty well battered, at least by the man in the street.

Bill: Gold has a strange dynamic. When the average guys are all pouring into gold, it’s usually not a good sign. When you have TV commercials selling the gold coins, they tend to be at the top. And the reason is, the average person doesn’t have the means to play the gold market. At best it would be like buying an insurance policy. You have to have insurance for all the reasons you know, and you should also have some gold for insurance. As far as the investment, Wall Street has always hated gold because it usurps their ability to push paper, and that is a given.

So the gold market has really been an insider’s game, and it has been for centuries, in that the real action is going on between the really powerful players, whether it is the central banks or the big private wealth. There is a difference when people want to buy Apple, Icahn is on Twitter telling everybody he has bought Apple. You see all the hedge funds and how these guys work now, they all want to get on MSNBC or CNBC, or get on Twitter, and talk about what stock they bought because they want to push it up. Not that they’re not serious investors but they’re looking for more of an immediate gratification. They want to buy stock, they want to get out there and pump and dump it, push it up.

But gold is different. On a large scale, it’s not the same as diamonds, but very close, where it is the big private wealth. They want to move quietly, they don’t want to push the prices up away from them, unlike oil where you get traders in, they buy it, and then they want to jam it higher immediately. These are series. When the gold market moves it is usually big players that are serious, they want some form of anonymity, and they don’t want the market to run away from them. If you just look back, I’m saying that the late December and early January move, you could see a real nice bowl pattern. Gold looked like it was falling apart, which it should have at the end of the year. Gold was down, gold stocks were down. You get that end of the year dumping to clean out your portfolios.

But instead of dumping, it started down, but then it was getting that nice rounded bottom, that nice saucer bottom, and then it started breaking out. And then the traders came in by late January and February, but that month or two there was serious accumulation. Again, those are the people that are trying to buy quietly, they want to buy as cheap as possible, and they want a form of anonymity. So the gold market – the average guy is not a big factor in it. When they are, like the 1980s when people were just scared out of their minds, then it goes off to the races.

But when the average guy and the average hedge funds are in there playing around, that’s when you blow up, just like you saw in 2011 with silver and gold. By the time the average guy had figured out what was going on he just poured into it and it made a peak. And that’s why I think right now has caught most of the Street, this rally, it came out of nowhere because everybody thought, “Gee, the Fed hiked in December, and they’re going to hike some more.” And the gold market just said, “No, we have a different agenda, we have a different belief system.” And it’s doing what it’s doing.

The thing that will be interesting is, the gold market can be very dependent on just what you were talking about, this restructuring, how it plays out, and who gets elected. So I think the initial stage is here that gold can rally, but again, we have to see how this thing politically plays out. Not just here, but also in Japan and China and Europe. There are just a lot of factors, a lot of moving parts in these markets right now.

David: What are the odds that we’re putting in an important peak this year in equities?

Bill: It smells like, it feel like, it did in 2008. The economy was receding, the insiders knew what was going on, but the bankers just kept pushing the asset prices up, kept bringing out these different facilities, trying to hold the system together. And it kept people in the game longer than it should have. And that is exactly what is going on now. You see the cracks in the economy, and beyond the jump in January economic data which was so ridiculous. I can’t believe people would actually believe some of the data that came out. A lot of it was seasonal adjustment, but a lot of it was just garbage. How the heck can you get retailers adding 66,000 jobs in January, after Christmas, after that hiring? You just unload people like crazy in January, but no, they found 66,000 jobs, and they found this big jump in manufacturing jobs and mining and all this, and it’s ridiculous.

And as we keep saying, the February data – either the U.S. economy fell off a cliff in February, or January was bogus. And it was bogus data, you could see it. It made no sense. But it kept people in the game, it helped create a stock rally. And now you are back to what is really going on. You’re seeing it in housing, you’re seeing it in autos. How many times have we heard, “Great auto sales, great auto sales.” Yet I looked at February and a huge amount was going to rental cars, fleets, and you’re looking and wondering what’s going on. Now we know. The last couple of months there have been problems in the subprime market, but what is happening now is used car prices are tumbling because they’re choking on inventory.

I think a couple of weeks ago we saw the inventory of sales at the highest level since the depth of the crisis in 2008-2009 in auto sales, inventory to sales ratio. It’s not just recessionary level, it’s crisis level. And we’re talking crisis level where you had to bail out GM, and we’ve done it again. We’re at this level. And used car dealers are in trouble. They’re trying to keep the inventories. I’m trying to research a story that people are telling me that some of the 2016 models are being withheld from the market because the auto makers can’t get rid of the inventory of 2015. So we’re having a quiet – I don’t know if I would call it a crisis yet, but we’re having serious problems in the auto market, and the student loan market.

The cracks have shown up. First they showed up in energy in the 4th quarter last year in the credit markets. We were screaming at everybody, “Look at the credit market telling you there is a disaster coming!” And then finally equities caught on. Now we had this enormous central bank intervention over the last month from Japan, ECB, even the Fed last week. But now that’s ending and you are going to have to deal with the credit issues that are showing up in the market. And you are seeing it even in the consumer credit where people for the first time in years are taking on a lot of credit, beyond the non-revolving credit. You are seeing revolving credit starting to surge, and part of that is because when I’m talking to bankers where they’re pulling down their lines of credit also, that’s telling you that there is something bad going on in the economy.

Now, people are trying to keep their standards of living going by putting more on credit now in the hope that something good is going to come later. So it’s all there. It’s all right there. The only thing holding you in is the central bank intervention keeping people in the game. Now, it’s keeping Wall Street in the game, but Main Street is largely out of the game. You are seeing that in the data, the average person is still selling more stocks than they are buying. The buyers right now tend to be the corporations, and it is just that same ugly mix that we had in early 2008. So you’re right, how long can they keep this going? We don’t know for sure, but we know it’s not sustainable.

David: So, prettying up the pig with so much lipstick and blush – it is what it is, and perhaps it buys us a little bit of time.

Bill: Oh sure, it’s just nonsense. What is interesting is, just like in 2007 and 2008, the average person knows it’s garbage based on their own experience, their own checkbooks and their own situations. But you get that handful of Wall Street paper chasers and handlers that keep trying to paint this rosy picture. You wonder who you think you’re fooling. You’re fooling each other, because the average person on Main Street is not buying it. If they did you wouldn’t have Bernie Sanders and Donald Trump. They wouldn’t exist if the average person thought everything was a good as the government numbers are, or what they’re trying to tell you. This wouldn’t happen.

There is no question there is a revolt going on in the country. No question. You see it now in Europe, it is developing politically. So that’s why you can play these games with the central banks and the sovereigns until the people revolt. And it’s going on. And the next interesting one is going to be Japan because Abe is really under the gun, they keep doubling down and I do think that people, with the negative rates, are a tax. I can’t understand that these academics running these central banks don’t understand that negative rates are a wealth tax, and you just crush people. We’re even seeing now, one interesting thing going on in the U.S. right now, they’re seeing it in the surveys, not the polling data, per se, but some of these other surveys.

What is happening now in the U.S. is the 1%, so to speak, are scaling down their consumption. Art prices are tumbling, really coming down, wealthier vacations, where you had these indexes of consumer staples against consumer discretionary. Then you also had the luxury – the high end retailers, the high end vacations – that whole thing is all starting to come down.

And that’s what is interesting, this is what the Fed and the government has catered to with the wealth effect. “We’ll push stock prices up and then this will all filter down.” Well, if the one percenters are starting to scale down their consumption, for whatever reason, whether they are getting hit in the pocketbook or they think something is bad, then that really undermines this whole idea of all this QE and all this wealth effect. And that is one of the things that is going on here. And it’s going to be really interesting to see how this plays out this year in the GDP.

David: On a practical note, are there one or two things that you think are pretty critical, 2016, 2017, if there are echoes of 2008 and 2009 painted into this timeframe, what are some practical things that you think make sense to do?

Bill: I think we’ve said this the last couple of years when we’ve talked – you just have to be defensive, because we don’t know exactly what policies are going to come out but we’re at the end of this game. So I think we want to pare down as much of that as possible. You want to be liquid, but you want to hedge that liquidity. And you can hedge that with gold or silver or some other means. You used to be able to hedge it in FOREX, but I think that is increasingly difficult because there are very few places to run now, and I think that’s what gold is telling you. If you can run a safe currency, if you have big money it’s easier and cheaper to run to the currency. When you can’t, then you go into gold, and that’s more difficult and more expensive.

And I think that’s what you can see going on here is that you have to be liquid, but you also have to hedge that liquidity. You have to have the flexibility to move. And it comes down to, are we going to get the dreaded debt deflation, or are we going to get the inflation that takes off? I think that’s, again, part of the gold rally is that people are saying, “I need the insurance. I need the insurance against, not just the inflation, because that is picking up by so many different measures, the core, sticky wages, different Fed measures, but it is also the political uncertainty of what is going on.” And you just don’t know.

Again, Merkel is the lynchpin of Europe, and the second most important player would be England. And England is looking to move out. There is a very strong movement and the terrorism is probably going to flip the cards over for a Brexit vote in June, and it’s going to undermine Merkel. And then you have the U.S. election, which is starting to look like a 1968 or 1980, a real transformatory election, where people want change and they’re going to vote for who they think is the instrument that is going to create that change and restructuring. So very difficult year, don’t get ahead of your skis. Get defensive, but be flexible.

And I would be very careful with certain stocks. I did think two months ago that some of the energy stocks were so undervalued that they were reasonable. They’ve jumped up so much here I think you have to be very careful with your stock investments. We know that the biggest bubble in history is the sovereign bond market. Who would have ever thought, going back a couple of decades ago, that you would see these record amounts of debt, unserviceable debt, in Japan and in Europe, and they have negative rates on. That makes no sense. It would tell you they should have sky-high rates.

So the area where you really have to be careful is in the sovereign bonds. I know people keep pushing into sovereign bonds and I think that is another reason why you see the gold market picking up is that is your hedge if those things blow up. But actually, if you wanted to go away for five years and not have to worry about anything, you would buy some mix of sovereign bonds and gold, maybe even on a 50/50 ratio, and then just go away, because one of the two is going to win really big for you. But that’s what we’re facing. It’s a very difficult year. We’re in a transition period.

And you see that. You see that every six or seven-year period you get a transition, and you just have to be flexible. But you have to have insurance, because if you don’t own any gold or silver or these things, you’d better own some. It’s like you’re walking around without an insurance policy. Now, how much you need? That depends on your personal situation and your personal preferences, just like any good insurance salesman would tell you. You look at it, you figure out what you need, and what kind of mix – what kind of mix of coins or bullion or whatever you want to do. But I do think you had better have that as a safety net.

David: I know we’re out of time and I’m curious about the G20, if there is any significance to the Shanghai meeting and sort of a marked change in equity market behavior, currency market behavior, following that Shanghai meeting. A possibility that an accord was struck there, or is that too speculative?

Bill: There is always the possibility and just the way all this intervention came out, it is a possibility. Now, if they didn’t come to some kind of agreement, if you look to see what happened, it was three meeting right in a row. The ECB, the BOJ, and the Fed meeting all came very close to each other. I’m sure they talked about it. That would be the courtesy, the honor among thieves, so to speak. That way, they were all together, they could have given each other the heads up. They normally do so there are no big surprises.

It wasn’t that big of a surprise, really, in the Bank of Japan or the ECB. The big surprise was, not only not hiking rates, but giving some people – I don’t want to say Goldman-Sachs for sure – but some of the brokers say this was one of the most dovish communiqués of the new millennium. And that’s why people today are saying, “What is with this?” The last two to three days you have had a series of hawkish pronouncements coming out of Fed officials and you are thinking, “Wait a minute. You give this incredibly dovish communiqué a week ago, and now you’re out here talking hawkish. You guys have lost credibility.”

If you go back to Bernanke, “When are you going to normalize policy?”

“Well, when unemployment hits 6.5.”

“Okay, it hit 6.5.”

“Well, okay, now it’s 6.”

“Okay, it hit 6.”

“Okay, now it’s 5.5.”

“Okay, well now it’s 5.”

“Well, now you’re at 4.9.”

“Well, forget about it. Now we’re looking at inflation, and we look at core.”

“Well, core is 2.3 and it’s going higher.”

“Well, forget about that.”

And then you say, “Well, when are you going to hike rates?”

“Well, we’re data-driven.”

“Oh, B.S.” (I almost said the bad word there.)

Of course it’s B.S. because they keep violating, and not only do they not listen and not adhere to their thresholds, they keep moving their goalposts. And so you have no credibility. Then you come out with this ridiculously dovish communiqué, and now you’re out there talking hawkish because the Street is saying, “You idiots are not data-driven, you’re ignoring the inflation, and you’re going to have to tighten rates at some point in the future, much higher and much faster, because you’re behind the inflation curve.”

The other interesting thing, and that’s why I can’t believe they didn’t hike in March, we see that the core inflation is moving up very strongly. It’s above their 2% threshold. But when the CPI was soft in February, that was the bottom of oil and gasoline prices, and other commodities. You had a 45-50% rally in oil, and a 30-40% hike in gasoline prices that are going to show up in March. So come the Fed meeting the end of April – I think it’s around the 26th or the 28th – you’re going to have, right before that, the March CPI, and unless the BLS comes in here and puts a fraudulent number on, that CPI should be huge, because you have already the core buildup in there, and you add the oil and gasoline in there, it should be a shocking number in the CPI. Then they’re going to look like real idiots that they didn’t hike in March.

And for the life of me, I don’t know why they didn’t hike, knowing – anybody with half a brain knows that with this big oil bounce, and gasoline price bounce, you’re going to have a problem in the March CPI when it is released in April. So now they’re going to look behind the curve. They’re going to look like idiots. And I think that’s why some of these Fed guys are talking hawkish now. But why didn’t they vote it? There is only one dissenter, Esther George. Are the other ones that gutless and chicken that they couldn’t voice that they were against it?

So April could be a very tough time for stocks. The market is going to sense that with a bad inflation number the Fed is going to be forced to hike. The other thing is that the corporate earnings are probably not going to be good. They’re talking S&P earnings looking down 8.3% the forecast. We know they’ll beat that because they talk it down and then they play their little games to beat it, but the key is going to be the guidance going forward. April could be a very tough time for the stocks. I think you’re going to see that after you get some performance gaming for the 1st quarter next week, and then I think you’re going to get some kind of short-term top, at least, put in for the performance gaming for Q1, and then look out in April. It could be a tough one.

David: In your history as an analyst, have you seen this many variables in play all at once? We have U.S. issues, we have European issues, we have Japanese issues, we have Chinese issues. Whether it is the PMIs overseas, industrial production here in the United States, you have micro-economic issues, you have macro-structural issues, and then massive amounts of intervention and manipulation, all in play at one time. Have you ever been in an environment like this?

Bill: No. And to back up one step, yes, I’ve seen this chaos, which was 1979-1980. Remember OPEC, over to Jimmy Carter, to Afghanistan. You were also getting Iran and Iraq. There were just so many things going on. But the key point is what you said at the end – unprecedented intervention – zero rates, negative rates, QE, and when this thing topples again, what are you going to do? If you monetize stocks and bail out the insiders, if you think the Trump revolution is bad now, the only reason Trump exists is because the GOP squashed the Tea Party. People keep forgetting, if you go back a few years there were three women, I think, from the Tea Party that had the chance to win Senate seats. One was against Harry Reid, who was vulnerable. The GOP not only didn’t support them, they undermined them, and no one won. They could have knocked out Harry Reid.

But just think about this. This is a guy that kicks them in the groin every chance he gets, but the GOP establishment would rather undermine the Tea Party candidate and let Harry Reid just totally emasculate them, as opposed to allowing a Tea Party candidate to beat an establishment candidate in the primary. Especially with women. You had three women. Of course, the one they were saying, “Oh, she acts like a witch, she believes she’s a witch.” I forget which state she was in. But people forget that. They totally undermined the Tea Party. And that’s why Trump popped up, because they did not allow that revolt. And it’s over.

And people said this for a decade, that the first party that comes out for the average guy wins, because this has been a flat-tail government, where you give the billionaires and the big corporations, you give the trade deals, you give all the tax breaks, and then you give the indigents that are dependent on government, increase their rate, and you just crush the middle class and the merchant class. And the first pike that comes on and says, “Yeah, trade deals suck, immigration is” – you know, the whole litany.

And that’s what Trump is doing. Trump is running Pat Buchanan’s platform from 20 years ago, and they cannot get it. He said, “You can’t do this.” He was against the Neocons with all this adventurism, and it hit me 10-15 years ago, he wrote a column. I’ll never forget the end of it. It was a republic, not an empire. He said, “You can’t keep going around the world like all the Bushes and the establishment. You want to do all this nation-building, all this intervention, all this B.S., you want to do all these trade deals and you want to kill the average American. Trump is just taking that and running with it now.

And Sanders is [unclear]. If Hilary would win, with all the bad stuff she has done that is likely to come down the pike here, this is – wow. I just want to see what the Fed is going to look like three or four years from now. It’s going to be totally different. I think you’re going to get rid of all these mandates, get them out of fiscal policy. But you are dead right, there are some important issues, important restructuring that is going to be done, and are we going to do it voluntarily, or is the market going to force it?

David: We live in very interesting times, and I appreciate your adding to the conversation and the insight. Love visiting with you. Would be very interested in putting our heads together sometime toward the end of the year, because I think there are going to be a lot of things happening between now, and I think it might be interesting to have a conversation after November when we can look and say, “Okay, well, this is who we’re dealing with, and this is, perhaps, what the restructuring might look like.

Bill: You’re right, and if you get the anti-establishment candidate in in November, it is deflation, but it’s also going to produce some chaos in there, and that is what nobody has a good grip on. How does that shake up?

David: Let’s take a look at it then. I look forward to our conversation. Thanks for joining us today.

Bill: Any time.

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