Welcome to this episode. Today we discuss investment strategies and market projections for the year 2024. Joining us is a distinguished panel of esteemed professionals in the realm of real estate renowned for their expertise, innovative strategies, and outstanding contributions to the industry.
Brien Lundin
President and CEO of Jefferson Financial, Inc., and the driving force behind the renowned New Orleans Investment Conference and Gold Newsletter. With over four decades of experience in investment markets, Brien’s insights span resource stocks, macroeconomics, and geopolitical dynamics.
Bridger Pennington
Co-Founder of Fund Launch and GP at Ugly Unicorn. Founder of Black Bridge Holdings, Bridger embarked on his entrepreneurial journey at the age of 22. With over 225 deals to his name, Bridger is dedicated to empowering aspiring fund managers through Fund Launch.
Neal Bawa
the Mad Scientist of Multifamily and CEO/Founder of Grocapitus. Known for his data-driven approach and expertise in commercial real estate, Neal is a sought-after speaker and thought leader in the industry.
In this episode, our esteemed panel will dissect pressing topics including the economic outlook for 2024, the impact of interest rate fluctuations, and the role of digital currency in reshaping the financial landscape. Additionally, we’ll explore real estate market dynamics, cryptocurrency trends, and the potential of alternative investments in the current climate. Tune in now for exclusive insights from our expert panelists and stay ahead of the curve in your investment journey!
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See Full Transcript:
Bronson Hill: Give a quick intro here. So we have today with us, super excited. This is the 2024 Economic Outlook event.
If we haven’t met yet, my name is Bronson Hill. Our company is called Bronson Equity. We’ve raised about $40 million in private equity for real estate deals, multifamily development deals, other types of things, as well as ATM machines, carwashes, all kinds of different stuff.
So if we haven’t connected yet, it’s great to meet you. And we put together panels like this once a month. We also have a podcast called the Mailbox Money Show where we interview experts like these and bring them in and talk about how to get involved with passive investing where you can make more money without taking up more of your time.
It’s a little bit what we do. And as we jump in here, I’m just going to give a quick intro to each of our speakers. So we have Brien Lundin, who is the leader of the New Orleans Investment Conference.
One time I was the largest investment conference in the country or maybe the world. He also works with the Jefferson Companies. Welcome, Brien.
We’ve got Neal Bawa with Grow Capital, and we’ve got Bridger Pennington with Fund Launch and Ugly Unicorn, which is a hedge fund.
So, I’m really excited to be here. Again, we got several different experts in different areas and we’re going to jump in.
So, we’re going to jump in here in just a sec. If you do have questions, you can put them in the chat. I may see them, I may not.
We would ask maybe you hold them until about 30, 40 minutes in the hour, then we will start taking questions. We should wrap up for sure within the hour here. So we try to make this as power packed as we can.
And I’m sure you’re going to have some burning questions and we’re going to get to those as many of us as we can. So, let’s just start. We’re going to go just one at a time, just economic outlook for 2024.
We’re seeing higher rates. It’s impacted the asset prices, the real estate, and economics
They say we’re not in a recession and they’ve changed the definition of what a recession is. So let’s maybe start with Brien.
What are you looking at for 2024? I know your background is Precious Metals and you do a lot in economics as well. Where do you think we are and where we’re headed?
Brien Lundin: Yeah, thank you, Bronson. What we’re going to get in 2024 is the long-awaited, long anticipated, eagerly anticipated Fed pivot. We’re going to hit the downside of this cycle.
This has been the first or actually the harshest fed hiking cycle, arguably, ever. And it’s put the markets in turmoil here and there, but the markets keep trying. I have kept trying to price in a pivot.
Now they know there’s going to be a pivot. There are going to be rate cuts. And the markets are kind of arguing with the Fed over whether that’s going to be three or five or six rate cuts, really a kind of a minor issue to be sure.
But still, that’s what’s happening right now in the markets is this kind of emotional roller coaster is the Fed acts like the lion tamer in the middle of the ring and tries to keep the markets at bay and try and keep them from getting too excited. But eventually, whether that’s going to be in March or later, we’re going to see the first of the fate Fed rate cuts. I’m kind of anticipating that they’d like to keep it at around three, but the conditions may force them to have more for five or so, because we’re still going to have all of these debt resets at much higher rates than where they were originally.
And most importantly, we’re going to have a lot of Treasury debt reset at much higher rates, and that’s going to be fiscally very dangerous. We’re already at about a trillion dollars a year run rate in interest on the federal debt, and it’s going up from there. So I think the Fed’s hand is going to be forced at some point in the year to really accelerate those rate cuts.
Bronson Hill: Yeah, I think you’re right. That’s a really cool approach. I think one thing I’ve learned in the last four months, the federal debt has gone up by something like three trillion dollars.
And so it’s just amazing how the spending doesn’t come down either. And I know you’re a metals guy. We’re going to get into that in a little bit, kind of what the approach is from there as well.
Neal, talk to us about what you’re seeing. What are you seeing for 2024? What are some of the things you’d like to add there?
Neal Bawa: Well, I think what I’m seeing is just how fragmented the market is when making predictions about rate cuts. So Barclays, HSBC, Oxford Economics, they’re still saying, hey, two to three rate cuts, so 50 to 75 basis points. And then at the other end, I see Wells Fargo and Jeffrey saying the Fed will need to cut 200 basis points.
That’s eight quarter-point rate cuts. And then you’ve got everyone else in the middle of, you know, Deutsche Bank, Bank of America. They’re either at a hundred basis points or 125 basis points where the vast majority of the analyst community is.
So there’s just a lot of variation. And I think that the way this year goes, a lot of it is going to be dependent on two things, how much the Fed cuts and how much they’re forced to cut. Because last year, we did not see the increase in unemployment that everyone was predicting, right?
So my prediction at the beginning of the year is we’ll finish the year with 4.5 percent unemployment. We finished with 3.7. So we started with 3.5, and finished with 3.7. That’s nothing, right? Unemployment remained the same.
And so because unemployment didn’t go up, we didn’t see the sort of knock-on effects on the economy that we expected. I am still expecting that to happen. So once again, I’m going to say unemployment is going to go up, though it probably isn’t going to go up as much because my base case is not a recession.
It’s recession-like conditions. So manufacturing has already turned negative. A number of other market number of other sectors are going to turn negative in the first quarter or second quarter.
So we’re going to start feeling like a recession. We’re going to start feeling like slower growth. When we do, that might force the Fed to cut because what happens is when unemployment goes up, that’s when you tend to get more higher rate of defaults because you start seeing people not pay rent or people not pay for their homes.
That has a knock-on on effect debt bills. And when debt builds, it puts a lot of stress on banks and banking conditions. So you might see the Fed do an extra cut or extra two cuts to support the banking system and make sure that they don’t have, you know, ridiculous amounts of, you know, of debt that basically can’t be paid back.
Bronson Hill: Yeah, yeah, that’s true. It seems like there’s a variety of opinions. But, you know, it’s going to have to see what will the Fed have to do in response to the economy.
That’s really that’s good. Bridger, what about you? Anything to add to that?
Bridger Pennington: No, spot on from Brien and Neal, I’ll add two things. If you can actually let me share my screen, I’ll just share one thing. But while you’re letting me do that, something interesting this year is the election cycle.
About half of the free world is having a general election this year. I think it’s the first time in history. We have the U.S., obviously the general election, but you have the U.K., you have India having a general election. Taiwan just finished their election as well. Typically, incumbents, people in power like to stay in power. And a lot of times they will juice markets, they will do quantitative easing, whatever it is, loan forgiveness programs, whatever, give money to the people and they’ll vote me back in office.
So I see a lot of quantitative easing happening this year, especially towards the later end of this year. Something I’ll just share real quick. This is from CME Group.
They track traders and probabilities of Fed rate and hikes. If you look down here, this will kind of summarize a lot of cool data on the site, by the way. But they look at all the open contracts on the market and just see what people bet actually based on rate hikes and where rates will move.
This is kind of the current bets right now. So the Fed meeting on 131, there is a 3% chance of an ease, a no change, 96% chance right now. On 320, 55% chance of ease, so kind of 50-50 of change or no change on that.
And then by May and then into June, it’s 100% chance of some type of ease. And then they’ll kind of say the probability charts of where things may move here. So back on to Neal and Brien’s points just spot on.
But I wanted to bring up the election as well. I think that’s just very interesting this year specifically. You already have Biden looking at forgiving student loans.
I mean, it’s already starting right now. So we’ll see how 2024 plays out with elections.
Bronson Hill: So that CME FedWatch, who is who puts that together? It’s a really interesting data there.
Bridger Pennington: Yeah, so I’ll share again. They I believe they’re out of Chicago. They put this whole FedWatch tool together.
A lot of fund managers in my group will use this and look at at least all they do is just look at open contracts on the market and see where all these traders are. So you can come in here, you can compare. They pull a bunch of data in here.
It’s fun to kind of see probabilities historical, what they’ve done in the past, where they’ve pivoted. There’s just there’s a ton of fun data on here. But I think that that one I was just on is kind of the best summary right here of where the what the market at least is pricing in currently for rate hikes.
Brien Lundin: That’s kind of simplified a little bit. I read Peter book for this morning. And as of this morning, there was 100 percent the Fed fund futures were predicting 100 percent chance of five rate cuts down from six.
And there was about a 60 percent chance of six rate cuts in 2024. So it’s still very high and notably much in contrast with what the Fed is trying to say of more like three. So that’s the real tension that we’re seeing in the markets and play out in the markets right now.
Bronson Hill: So we’re going to we’re going to get into that. I want to it’s really cool on this panel because we have people coming from different perspectives and really in different assets. So based on that, the fact that rate cuts are coming or that we think there’s a high probability that’s happening.
How does that affect the asset that you’ll work with? Let’s kind of go around and start with Brien Precious Metals. I know they’re always great.
But how does that affect how does Precious Metals going forward today?
Brien Lundin: Well, I think they’re always great as insurance. As investments, I think they’re going to be particularly great, and really every asset class is going to benefit. The signature effect of this ever-easier monetary policy over the last 40-some years since Paul Volcker’s time. The markets are addicted to not just easy money, but ever-easier money. And so, particularly since the great financial crisis in 2008, we’ve seen that all of these supposedly uncorrelated asset classes have started to move in unison. They’re all like dogs begging at the Fed for treats and easier monetary policy.
So, instead of that typical 60/40 portfolio that we all grew up with— stocks and bonds— all these correlations have trended toward one. Passive investing is just about having heavy money in the markets because when the Fed provides liquidity, everything rises on a sea of liquidity, and everything falls when it retracts.
That said, all these asset classes are going to benefit from the Fed’s pivot this year. There will obviously be some volatility along the way— similar to what we’re seeing now. The markets are begging for more, and the Fed is being a bit more reluctant. But they should all move higher this year, particularly gold, because gold is not just a bet on easier money and its repercussions; it’s a bet on the fragility of the entire system, which is what we’re seeing right now. We’re witnessing that whole system, after 40-some years, come to a head, where the Fed really has to keep rates at historically low levels— negative on a real basis— to keep all these markets afloat.
Bridger Pennington: Yeah, I have a follow-up question for Brien. Sorry, I’m just jumping in, but I love this market. Brien, so GLD and SLV were manipulated by JPMorgan Chase. They were fined 980 million dollars, I think in 2020 or 2019 for manipulating the precious metals markets for about a decade. And gold was kind of flat for that decade— it just didn’t move much, even though the fundamentals were there. Like, yes, gold should be seven thousand an ounce, but it’s not.
Do you feel like the precious metals markets are still being manipulated? Because when I look at it, I’m like, ‘Oh, silver should be way higher than it is. Gold should be way higher.’ And I’ve been saying that for a decade. Then we come to find out that it was being manipulated for nine or ten years by, you know, one of the largest institutions on Earth. Any take on market manipulation in precious metals?
Brien Lundin: Yeah the Justice Department actually deemed JPMorgan a criminal enterprise which is really interesting that GLB and SLB.
Neal Bawa: Finally.
Bronson Hill: That’s the largest bank in the world right?
Brien Lundin: That’s in court filings that it’s deemed that a criminal enterprise and went to jail
Bridger Pennington: And that went to jail they just find…
Brien Lundin: Nobody actually…
Bronson Hill: Slap on the rest.
Brien Lundin: Traders did go to jail and pretty harsh sentences but they were low.
Neal Bawa: And no big shot Bridger.
Brien Lundin: Actually, some of those traders did go to jail and received pretty harsh sentences, but they were low-level traders— no big shot Bridger, you know. They went to jail for spoofing the markets and putting in bids that weren’t real, really just trying to manipulate the daily fix— the AM and PM London fix on the gold price. It’s not really the kind of manipulation you’re talking about.
I’m a bit middle of the road here. I don’t think, and I don’t blame, every daily price move on some cabal out there pressing buttons to keep the gold price suppressed. I do think they intervene at key points and have intervened. That’s a matter of fact; they’ve done it covertly and overtly in the past. So the burden of proof, in my mind, is on the part of people who want to prove that there’s no manipulation. I think they do intervene, but the futures markets are also structured for manipulation— in every asset class, in every contract.
There’s a lot there, and if you have a good algorithm, a good internet connection, and a lot of capital to play with in a thin market, you can make a lot of money, and they do that. I don’t think it’s been dramatically manipulated over the past few years, because if you look at what’s happened, particularly over the last couple of years, we’ve had the harshest rate-hiking regime we’ve ever seen. Yet, if you look at the big picture, gold prices have actually advanced considerably during that timeframe and remain elevated in a new trading range.
So, gold’s done pretty well considering those headwinds. Now, what we’re talking about is that gold, equities, and passive income investments—real estate—are all going to get a tremendous tailwind from the Fed’s switch to a rate-cutting cycle, which they have to do. The markets, the economy, the debt burdens we have now—they just can’t function under the current interest rate environment. So, we’re going to have tailwinds ahead for just about everything. But all of that’s part and parcel of a system that’s really fragile right now, and again, I think we’re in the endgame of a long-term trend that will demand some sort of reset at some point.
Bronson Hill: I want to hear your side in a minute, Neal, but I just want to say this real quick about metals for those who might not be familiar. I had been investing for years, and I just didn’t have metals as part of my portfolio. Then, I found this video called The Hidden Secrets of Money by Mike Maloney. It’s an amazing 10-part series that talks about the 5,000-year history of gold and silver being actual money, while fiat is just currency— and there’s a big difference.
I’ve stored up a ton of it, and when you look at what central banks are doing, they’re storing a ton of it too. The more we print and print, the more having something real and tangible becomes incredibly attractive.
So, Neal, what are your thoughts?
Neal Bawa: I hold a significant amount of gold, and I prefer to hold physical gold over ETFs or other paper assets. For me, gold and silver are really a patient person’s game.
One thing is certain: we have passed the point of no return, where the global economy can be corrected without a reset. In fact, I think we were already beyond that point before COVID, but the pandemic wiped out any slim chance we had left of correcting the economy.
At this stage, the only question in my mind is when the next reset will occur. It could be three years out, or it could be ten. But it’s going to happen. And it won’t be triggered by anything happening in the U.S.—that’s a misconception. Historically, over the last 5,000 years, major financial upheavals have always started at the periphery, not the center. The U.S. is the center. The periphery today could be a developing country like Pakistan, which I believe might fragment into multiple nations in the next few years due to its current challenges.
Or it could be a major economy like Japan, which has a debt-to-GDP ratio approaching 300%. Japan has surprised many because so much of its debt is held domestically, but there’s still a limit to how far they can push it. China is in a similar situation with shadow debt pushing its total debt to over 300% of GDP. Meanwhile, the U.S., at 110% of GDP, is in a better position, especially as the world’s reserve currency. However, one of these economies will act as the first domino, and when that falls, the process will accelerate.
You’ll know we’ve hit that point when gold suddenly surges by $500 or even $1,000 in a month. That’s the first sign that the financial system is undergoing a reset. This will also impact real estate—there will be significant challenges initially, but once the reset happens, the value of fixed assets like real estate and gold will skyrocket. There’s only so much real estate, so much gold, and so many fixed assets in the world. COVID likely accelerated the timeline for this reset by five to ten years.
Bronson Hill: If you weren’t paying attention back in 2008 and were just investing in real estate or certain assets, you could have really gotten wiped out. Many people did. I know several good friends who were heavily impacted, and probably many listening or watching this replay can relate.
That’s why I think paying attention to global economics is crucial. Neal, I really appreciate what you shared, and I think we can all agree—most of us here are gold, metals, and real assets enthusiasts. If you’re looking for a traditional 60/40 portfolio, you might be in the wrong place or watching the wrong video. It’s so important to be aware of the bigger picture.
Now, let’s pivot a bit. Neal, I want to dive into real estate.
Bridger Pennington: Can I ask a follow up question over Neal real quick?
Bronson Hill: Please, yes.
Bridger Pennington: Sorry, how do you think that reset happens? Is it through a central bank digital currencies like do you think digital currencies big into that?
Neal Bawa: I think the next reset will likely happen when central banks come together in Switzerland and make decisions to rebalance or force a write-down of global debt. We’ve seen a similar scenario before in Greece, where they essentially ‘bailed in’ by making depositors shoulder the debt burden. Surprisingly, there wasn’t much public outcry—there were only minor riots with around 15 people, and the country largely accepted that depositors’ money was used.
In 2008, the U.S. government bailed out the banks with the $700 billion TARP loan, and there weren’t any major protests about it. There should have been an outcry—why should taxpayers use $700 billion of our own money to bail out the big banks with no guarantee?
Now, if I had been the Treasury Secretary at that time, I probably would have made the same decision. The point is, when things are on the brink of collapse, almost anything becomes acceptable.
Bronson Hill: Yeah, if you read there’s a book there’s a bunch of books about this one’s called Dying of Money there’s some other ones that The Death of Money and it just talks about what happened in 1920 to 1930s. And it was all this a lot of stuff we’re starting to see now like we’re starting to look at wealth taxes we’re starting to look at you know price fixing and all this stuff that you know it’s just everything’s on the table. Once stuff starts happening there’s things on the table. Bridger you had something else you wanted to add or say there?
Bridger Pennington: Well and maybe push back on me a little bit Neal but first off tarps got paid back with I think a 20 percent return.
Neal Bawa: But we didn’t know when were doing it. Here’s the thing Bridget if the next invest the next tarp is five trillion dollars when we’re putting it in we don’t know if any of it is ever going to get paid back. In hindsight tarp was a great investment at the time that people are making it they were shaking in their boots. That the Treasury Secretary one down on his knee to Nancy Pelosi to beg her to give her seven hundred billion dollars is an actual event a Treasury Secretary on one knee.
Bridger Pennington: And maybe I’ll just give a different perspective but Michael Spencer a great book called Permacrisis. We’ve been hearing about this reset right now he’s talked about this you know great resets going on everyone it’s like all the world’s going to end.
And just a take or a thought is people are the national debt so big all these problems with the world is our currency but compared to what, what are we going to go to? Like you go to Yen, you go to Rubles, you’re going to go to Bitcoins, you’re going to go to Gold? Like what are you going to go to?
And you know there’s been a few people throughout history that have tried to get off the US dollar. Umar Qaddafi killed kind of by the United States. Saddam Hussein started trading large amounts of oil without using the dollar he was kind of killed. Vladimir Putin started trading large amounts of oil without using the US dollar. He had his pipeline blown up nor to from a submarine in two different places.
There’s not very many countries that can blow up a pipeline in two different places and so India was talking about trading oil not the US dollar and they’re…
Neal Bawa: They’re not doing it anymore.
Bridger Pennington: Flash crash last year if anybody saw that. Gold I me and my dad wrote a book called dollars golden Bitcoin my dad’s portfolio manager of forty five billion dollar real estate fund. And in the book he talks through all this these it doesn’t make sense and I agree with Neal like the fundamentals we are in a Ponzi scheme and I was born into it like I’m part of the Ponzi scheme. But like the I believe the US dollar is a real estate currency that is our greatest export greatest asset ever is the United States and they will do at all costs to protect that asset.
And I know people hate the dollar dollars dying whatever the dollar is up 13 percent over the last three years. When you look at the DXY because it’s getting it’s compared to what? Most people don’t want to admit this truth the dollar has done extremely well. Everyone loves to criticize the Fed I know and I know they sound like idiots. But they’re actually playing an incredible game with Saudi Arabia how they bind flew over last year met with with Saudi Arabia got them on the oil deal.
I mean it’s just you this game and we have you know eleven aircraft carriers that circle the globe to protect the US dollar the greatest export on earth people talk about the thirty trillion in debt. My opinion is if you are the world we’re not a business we are the world reserve currency if you are if you if you start a new world reserve currency. You actually want thirty trillion in debt because guess what the debt isn’t owed back in bitcoins it’s not old back in gold it’s not owed back in yen it’s owed back in US dollars.
And so to pay the debts back you have to have US dollars and we keep bringing into dollars now I know it’s going to come to an end I know it will. Like I know the fundamentals the economics say we’re in a Ponzi scheme I get it but I’m saying compared to what everybody else is way worse than us. What are you going to go to and maybe the answer is they reinvent themselves into a digital currency right they restructure it maybe it’s a reset like Neal’s talking about but you can push back me on this argument but I you know anyways I’ll stop there. I’ll leave that.
Brien Lundin: I if I could jump in I totally agree with everything you’re saying Bridger from the start to the finish. I’ve heard about the thirty eight years I’ve heard people get on our stage at the New Orleans investment conference and talk about the death of the dollar and it has not happened and the debt blowing up and it has not happened.
So I have to examine myself when I look at it today and say if I’ve just become an old curmudgeon now and I’m becoming like these people thinking the world’s going to hell in a hand basket or is are things really much more serious right now and I think it’s gotten to the point of simple math and a lot of things have gotten really just insane if you look at that process I was talking about where the Fed always lowered interest rates and route as a result of every recession and we’re never able to raise them back to the range that they were before.
Then came 2008 and they came up with some crazy crap that you would have gotten they would put a tinfoil hat on your head if you would have predicted anything that they did in 2008 beforehand between all of the acronym programs between quantitative easing and the fiscal bailouts of Wall Street that was crazy and zero interest rates the lowest rates in 5000 years of human history. And then came Covid now that process means that the markets have become addicted again to ever easier money. So when they react to a crisis they have to inject more of that monetary adrenaline more of the drug because the patients develop the tolerance so they did all this crazy stuff in 2008 with Covid they did all of that.
They did a multiple of that instead of going over over four to five years they did it over four to five days so this next crisis whatever it is and as Neal was saying there’s a lot of dominoes out there this next crisis will force them to do things that will make your head absolutely spin to get the same kind of reaction from the market so we’re in this kind of repeated cycle.
My thesis is that with each of these cycles it becomes more and more evident that currencies are trash or becoming trash and becoming ever less valuable ever more plentiful and losing credibility with every successive cycle. So whether it’s this cycle or the next one or the next one the endgame in my view is that currencies and I agree with you it’s not just the dollar it’s global currencies in general because all of these developed nations and developing nations have done and are doing the same thing they’re going to lose credibility.
The answer is attaching that to something and the age old answer to that question has always been gold and it’s easy to do it’s not that hard you just back your currency to some percentage with gold. And you see Asian banks you see central banks around the world buying gold hand over fist they’ve been the buyers over the last six months to a year as Western investors have been largely absent what are they preparing for? You know they’re building up gold reserves.
So I think that’s likely going to be the great reset is that you attach you put an anchor on currencies you restore credibility very quickly by just attaching them to gold in some form of fashion at some level.
Bronson Hill: Yeah let’s let’s go around here I want to hear from Neal and Bridger once more and we’re going to take some questions. But I want to talk a little bit about I mean you if you want to individually you can speak on you know what kind of add to that what do you see kind of the endgame being.
What I would love to see is for investors from a take away a lot of times you go to things like this and it’s like OK everything’s going to eventually someday feel like what do we do OK buy gold whatever what what is an investment strategy I think buying gold is a very conservative thing to do and I think it’s good it’s and it definitely is insurance.
But what are some things that your that you find really interesting for 2024 to invest in? Let’s start with Neal and then we’ll go to Bridger and then to Brien.
Neal Bawa: Well as a multifamily guy I hate saying this because I always want to offer other options. But this is actually a good time to be buying the kind of real estate that thrives on originals whether that’s multifamily or any other kind of commercial real estate.
Everything’s on sale now commercial real estate especially office is not quite at the level of sale yet but let’s we’re talking about a year. So, I’ll say in Q3 or Q4 you might want to look at buying office real estate because if that’s something that’s you know powerful for you because I think it will be 40 to 50% off. Today all multifamily in the United States is at least 30% off I’m making offers at 37% off of the peak which is only 19 months ago.
By compare that to single family which has gone up 3% since the hike started. Which has been one of the most bizarre things I’ve ever seen I projected single family price declines in the in the teens in the mid teens 10 to 15 20% because you know the you know you’ve gone from 3% mortgages to almost 7%.
So the people’s ability to pay has changed what I didn’t anticipate is the locking effect where we have 50 million homes locked in at 4% or below and nobody wants to move from a home that’s at 3% to a home that’s at 7% so nobody’s selling. So inventory is ridiculously low and so you end up with this absolutely stunning you know bizarre circumstance where single family home prices are up 3% since the crisis began multifamily prices are down 30 to 37% since they began.
I would have never imagined that such a divergence could be possible given both classes are so dependent on interest rates but it has happened which means that the classes that are being hit the hardest by the interest rates that’s what you should be buying. So it doesn’t need to be multifamily but anything that was extremely sensitive to interest rates is going to be on sale I think until Q3 or Q4 of this year and then slowly that way will add and that’s really what you should be looking at assets that are highly dependent on interest rates.
Bronson Hill: Right it’s amazing when you buy you know your buying price is fixed but you also can refinance and adjust your interest rate later so that’s why it is that’s incredible deals out there now we’re starting to see them for sure.
Bridger what do you think what are some of the best kind of overall investment opportunities to consider in 2024?
Bridger Pennington: Well great comments by Brien and Neal that was spot on it’s so interesting the realist like I didn’t predict that either who would have thought I think that’s spot on from Neal and asset for all we’re all in different kind of alternative assets of the dollar as well so I run a crypto hedge fund so I’ll talk about crypto for a second I think crypto is in a very interesting and compelling spot right now as people know crypto goes in four year cycles and the last cycle was 2021 it peaked at $69,000 the previous cycle was 2017 peaked about 19,000 right around there.
Bronson Hill: You’re talking about Bitcoin, specifically, right Bitcoin?
Bridger Pennington: Bitcoin yes and then it’ll fall about 70 to 80% we’ve already had that happen in 2022 right now it’s recovered Bitcoin’s around 42,000 right now and we are approaching the next Bitcoin halving which is in April so halving event and Bitcoin is where it becomes twice as hard to mine a Bitcoin than before so there’s 21 million Bitcoins ever to be produced already 19 million have already been mined.
I think 6 million have been lost because people just forgot their keys or whatever lost whatever so you have a shrinking supply when there’s less less supply mined its strains can supply and typically price goes up the last three cycles has done this and we’re looking at the fourth right now so our analysis last cycle Bitcoin did a 20x throughout the whole cycle Ethereum did a 28x we think this cycle Bitcoin will do about a 5x or Ethereum will do about an 8x and then altcoins which are also it’s going to do anywhere from a 20 to 100x whatever depending on the coin
But the very interesting cycle right now so our price chart we think there’s gonna be a lot of chop for the next few months in Bitcoin by the end of 24 into 25 we think we’re gonna be exiting a lot of our if you follow the cycles that you’ll exit your positions probably in July of 2025 August 25 would be the next peak.
Now all that being said and the reason I asked Brien about market manipulation is because we just had 11 ETFs open for Bitcoin last week or a week and a half ago which is significant. And that opens up a whole new slew of potential market manipulation all sorts of stuff that can happen to an asset like Bitcoin. Right now Bitcoin is sold off significantly since the ETF is open where I’m generally bullish on Bitcoin and crypto for the next 18 months about.
We have a couple couple of rationale around that we had about four and a half billion enter the market day one crypto Bitcoin trading volume is was about 30 percent of trading volume between the S&P 100 QQQ I mean it was about a third of all trading volume did very well it’s sold off a little bit.
We don’t know exactly why it’s selling off currently because there’s a lot of inflows one thing that we think is there’s a lot of people talking bad about crypto but at the same time you watch what they do not what they say so Jamie Dimon for example from JP Morgan Jamie Dimon has just been crapping on crypto, crypto is the worst it’s a fake blah blah blah but JP Morgan was actually the broker for BlackRock CTF so you kind of watch what they’re doing now what they’re saying for a long time.
Larry Fink now Larry Fink’s very pro Bitcoin but a long time he was crapping on Bitcoin hated Bitcoin and now they’re he’s the biggest probably the biggest salesman for crypto on earth right now is Larry Fink talking to every on every CNBC show I see him he’s talking about Bitcoin and all the ETFs there so we think there’s there might be sellers trying to push the market down to accumulate more but overall if you look at a long term scope we’re generally very bullish for crypto this could be another the next 18 months we think is very bullish for cryptocurrency markets. Especially we like to invest in the coins that have utility behind them.
Not just you know not just coins that just have a dog on them but coins that actually have utility to actually do something there’s certain blockchains one of them manage the supply chain for Walmart they save Walmart 250 million dollars one of their quarters just by managing supply chain more efficiently it’s a full block and there’s a coin behind that we think of it like technology almost there was a there’s one blockchain that measures all the electricity used when you do anything online so for example when Cristiano Ronaldo posts on Instagram it cost the world about a hundred and fifty thousand dollars in electricity just because so many people that makes any sense so there are blockchains
Neal Bawa: in fact playing soccer damn it so
Bridger Pennington: There’s blockchains that have like some utility to them we like projects like that we think of it like software this is like the dot com bubble where there’s actually yes there’s some crap ones but there’s also underlying software that’s actually very usable and sustainable and very great so we try to get into those positions we’re generally very I’m generally very bullish on that especially with all the all the stuff that Brien and Neal talked about as well for this year
Bronson Hill: Thanks for that
Neal Bawa: Can I jump in there I am not a Bitcoin expert but I love reading about it I read I think I’d spent too much time reading about crypto and I think Bridger is spot on.
I think there’s very strong tail winds for for crypto specifically I think especially for Bitcoin because of continued acceptance and in the ETFs are not just happening in the US they’re happening in other countries as well so that it’s kind of moving forward on its you know except acceptance curve so I don’t know about the other altcoins because I don’t look at them I think Bitcoin’s got strong tailwinds the catch again is what he’s saying 18 months a lot of people buy into Bitcoin and then they don’t realize that it’s a cycle right so they don’t get out in time right with with crypto you really got to be obsessed about when you get out.
Bronson Hill: Yeah, I was actually kind of anti crypto I did a video about being anti crypto or that was a scam whenever. And then for me, what changed it for me with crypto was when they the Canadian truckers right when they they froze assets of the Canadian truckers and even like if I was giving money to a source or something I believed in and they said no no you giving the money you’re a terrorist. And we’re going to freeze all your assets it was crazy about it’s having some liquidity outside the financial system could be helpful.
So, obviously gold is it’s a little harder to transport but crypto could be transported there’s obviously many other reasons and I’ve come around okay crypto has some definite benefit as well.
Brien I want to hear your thoughts what do you think we’re going to get some questions in a minute but tell us 20 24 I know you’re doing all kinds of not just gold and silver but other sorts of resources and just talk to us about what you’re seeing as a potential investment opportunity for this year.
Brien Lundin: year yeah well I guess you won’t be surprised to hear me say gold surprise but you know I always tell people especially those who knew to the sector that there you can buy gold as insurance and that’s insurance against all the things we’ve been talking about this long cycle this potential reset etc.
And the other is investment so if you look at the macro picture and say that it is bullish for gold like it is I believe now even with gold at near all time highs it the macro picture argues so much higher gold prices for gold prices reaching a new much higher trading level. And when that happens when you look at it and you see that then you can leverage gold and that’s where the investing part comes in lots of ways to leverage it futures options if you are a sophisticated trader you can buy some ETFs that are 2x performances on gold or mining stocks.
You can do mining stocks then within mining stocks there’s a wide spectrum from the junior explorers to the more established producers. That’s the area that I focus on mining stocks and gold newsletter and I tend to focus on the more speculative hair on fire end of the market in the juniors.
Which can do very well in a rising a sustained rising price environment for gold silver typically offers natural leverage to gold it’s the poor man’s gold and in every sustained bull market and gold it’s outperformed the metal. So, I like that and you know we’re going to what we need to see in the near term and I think we will as we need to gold to get over twenty one hundred dollars to really prove and demonstrate an actual breakout a new breakout to a much higher level.
We’ve hit these general highs around twenty seventy or so three times four times now and for this not to be just another false move we really need to get over twenty one hundred dollars or so and I think that will bring in a lot of generalist money into the sector a lot of trend following western investors and and that’ll take us much higher I believe.
Bronson Hill: Yeah that’s great thank you for for sharing real quick any thoughts on uranium I know Rick ruled talks a lot about uranium or any.
Brien Lundin: Love uranium have been loving uranium for many years and you know at my conference it has been a long running joke that it was everybody’s top pick for ten years and nothing ever happened and all of a sudden which we knew it would happen.
It’s kind of happened so we’re getting a long term supply demand story that’s irreversible or immutable irresistible finally coming to a head and concept problems supply issues right now are probably deeper definitely deeper than they’re admitting and probably deeper than much of the mainstream financial media is predicting.
So we’re having a rising demand but we’re having a very significant supply crunch right now. Where utilities are going to have to go into the spot market which is really thin and and by new supplies and that’s going to drive the price much higher.
Neal Bawa: Another area that is very interesting is lithium even though you know we’re now getting LFP batteries which use less lithium. So lithium went up and then it actually came down in price which makes sense you know any time the market will drive the price up too far and then it has to adjust.
But when I’m looking at the amount of money that governments are investing including you know what the US is investing but China is obviously far ahead of us the US nine percent of vehicles sold in 2023 were EV’s. In China the number was thirty three percent one third of all cars sold in China the US is somewhere in the 16 percent range though one of the Nordic countries I don’t remember what it is is that eighty seven percent of cars sold or EV’s.
So I’m not going to get into whether EV’s are good for the environment or bad for the environment or if they make sense the point is we’re moving along this path. And even as we move along this path we’re going to need 5x 6x 7x lithium I believe that we have all the lithium that we need.
But the money to invest to get that lithium out of the ground that’s very bumpy and so there’s going to be plenty of times in the next five years but the price of lithium is going to shoot up.
Bronson Hill: We saw that just last month actually you’re probably familiar the Salton Sea in Southern California they discovered 3400 kilo tons of lithium so enough to power over 375 million electric vehicle batteries.
Neal Bawa: But it’s going to take 10 years to get that first gram of lithium out of that California.
Brien Lundin: I would be skeptical of any of those kinds of reports because one thing they did not report were the grades and if they were economic and I would add to lithium.
I would add copper because lithium, cobalt, nickel a lot of the different metals and elements that go into battery metals in that whole story can be engineered around to some degree. Lithium is tough to do but the other metals we’ve seen them develop technologies that minimize their use.
You can’t get around copper though it’s very for the motors and just as important perhaps more importantly it’s necessary for the grid which has to be completely revamped to deliver that kind of energy that we’re seeing. Copper is a longer term story.
Neal Bawa: But more stable than lithium
Brien Lundin: yeah another one that is solid and you can’t get away from it
Bronson Hill: Yeah we’re getting some questions come in we’re going to take a few questions now if you have a question specifically that there’s a Q&A section if you stick it in there we’ll be sure to see it or be more likely to see it I should say. Somebody’s asking about the election cycle whether it’s Republican Democrat do you think how do you think they’ll affect the price of metals?
Brien Lundin: I think it’s irrelevant right now because we have not too positive on anybody winning the election right now and you know. It’s it really is a monetary issue that’s going to drive the metals and you know if Trump wins which seems a good possibility now he is a big low interest guy so I think that could have an effect. But no matter what happens we’re going to have declining interest rates and I think that’s going to be bullish for everything.
Neal Bawa: I think Trump is has no hesitation in directly and very visibly attacking the federal reserve to lower interest rates where other presidents. I’m actually not aware of any president in history before Trump that attacked a sitting Fed chair.
And I think he will have no hesitation to attack again the first time they they sort of didn’t do what he wanted but there’s no guarantee that that’ll happen the next time if they’re especially if there’s a crisis on the way Trump will be the one that will be calling and saying cut interest rates below zero. So, especially if a crisis occurs I think Trump’s the one that is likely to drive up the prices of alternatives the most because he as far as he’s concerned he’s going to tamper with with monetary policy regardless you know the president has all the power
Bronson Hill: right another question I guess this for Bridger is the blockchain what’s the name of the blockchain that saved Walmart 250 million
Bridger Pennington: Yeah this was back I think in 16 or 70s early on and I believe Walmart acquired the company and now does it internally in 2020 Walmart was launching there or 2022 excuse me they were launching their own coin.
I think they do it internally now it’s a blockchain they internally run yeah and then Maddox we’ll ask about Maddox I think 10x in the last month so I think it’s a little overbought right now that’s my personal opinion we like both polygon and have Maddox though we do a lot of research on both those so.
Bronson Hill: Yeah it’s interesting how there’s a lot of that Walmart example that there’s a lot of blockchain you know there’s a difference a lot of people don’t understand there’s a difference in blockchain and crypto.
Crypto being more cryptocurrency being more finance related and blockchain we did actually I MCed a event about a year and a half ago called the Blockchain Real Estate Summit with Michael Flight and about 300 people in Austin Texas. And it was just really interesting to see the technology behind it the blockchain how that’s starting to impact more areas of life and to give more security and do more things in that way as well.
Bridger Pennington: Another way to think about it, it’s almost like Apple or Microsoft. They have their operating systems and technology, but they also have a stock that you can buy. That’s one way to think about crypto. A lot of these companies have blockchain technology, but you can buy their coin, which represents— you know— the company, kind of like buying Microsoft stock that represents the whole company.
That’s a different way to think about it. We do a lot of research to look for more value investing in crypto, so… that’s one way to think about it. I’ll go ahead, yeah, I think Brien brought something up quickly. He just said, if we get out of this election, or if anybody gets elected I think there’s a decent chance, not a decent chance, I guess, I don’t know what the odds are but this is going to be a very interesting political cycle for all markets. I mean, if Biden wins again, there will be, I think, mass protests.
If Trump wins, there will be mass protests. How do we verify that the election wasn’t rigged by both parties? The last two cycles have seen claims Russia collusion, Trump claimed the ballots were wrong, so whoever loses this cycle, you’re gonna have 70 million Americans thinking the election was rigged. And I think people are saying, you know what, it’s not going to happen this time. I think there’s a probability— some level of risk— that we are going to be in a very… interesting spot a year from now, trying to decide who the president is. But maybe I’m just too conspiracy-theory on that, but I don’t know.
Neal Bawa: It’s just become normal for people to dispute these kinds of things. But, you know, generally— and I think Brien would agree with this— this kind of uncertainty is not necessarily bad for the markets. I mean, the markets sort of march ahead, because the markets actually don’t want anybody to come down with a hammer and change the income tax rate, or get rid of depreciation, or do something crazy. And so, when the political environment is hung up and they get nothing business sort of just moves along.
Bronson Hill: Yeah, absolutely. So, we’re getting more questions about crypto and digital currency stuff. If you do have any questions about real estate, about precious metals, or if you want to talk more about crypto, we certainly can. We’ve got a few more minutes, so a couple more questions here. So, what do you think about the US central bank digital currency in relation to real estate, Bitcoin, and gold? Do you expect this to happen? When do you expect it to happen? Is it just posturing? I mean, is that actually going to happen?
Bridger Pennington: I’ll talk about this
Bronson Hill: for a second
Bridger Pennington: Maybe you guys have more about this. So, November 2022, the Fed did a 12-week test of a digital dollar. They did it with the New York Fed, Citigroup, Wells Fargo for 12 weeks. They completed that test, and then the banking crisis happened—this was last March. Then announced the FedNow protocol that was going to come out. I don’t believe it’s launched yet, it was supposed to come out in July. This was supposed to be from Federal Reserve home website essentially like large Venmo transactions. We had a lot of people working on that, at least informed us on the inside, they were going to do $500,000 instant wires, which I believe they might have and might not have.
And then, at the same time, they announced these ETFs that were coming out as well. My business partner, Dan, is on the board of Intel for the last 16 years. Intel was awarded a lot of money from the CHIPS Act that came out in 2022. They had $54 billion towards the CHIPS Act. There’s another $280 billion earmarked for the next round of the CHIPS Act, and they’re building these huge mega sites. So, Ohio has a thousand-acre site, and I’m sure Neal, with real estate—those are hot markets for real estate right now. I’m sure Neal’s cleaning up on those markets.
Neal Bawa: Phoenix has one Columbus has one yeah big ones
Bridger Pennington: So, Dan, my partner, he’s on the board of Intel, and he’s like, “This is my opinion, this is not Intel,” but he goes, “They are overbuilding. They’re building the fab facilities, which, by the way, are almost online, but they are building massive data centers—huge, I mean enormous data centers—alongside them.” And he goes, “And his opinion was, the only reason you would do that—I mean, we already have data centers, but that many data centers—is if you wanted to house some type of central bank digital currency.”
If you go to the AtlanticCouncil.org, you can see that there are 34 countries currently in research and development of central bank digital currencies. I can share my screen if you want, but this is pretty interesting to look at. I just think it’s too juicy not to do. As a central bank, you have China—it’s already done one. I’ll pull this up, sorry, I’m talking too long here. You guys can comment as well, but I think this is just interesting to look at for this question—central bank digital currency.
So, they track countries and how much they’ve done. Hopefully, you can see my screen okay. So, right here, there’s 11 countries that have launched central bank digital currencies. There are 21 in pilot programs, China, India being one of them, Russia in pilot programs right now. Development, 33—I said it wrong, excuse me—33 countries in development, the United States being one of them. They’ve announced it, they’ve been on the home website of the Federal Reserve for the last three years, something about a central bank digital currency. And then, research, 46 countries.
I just— you see this many countries looking at this and developing? I just think it’s—I don’t think it’s a question of if, it’s just a matter of when. It might take 20 or 30 years, who knows? It might take 100 years, but I think it is inevitable that we’re moving in this direction. That’s my opinion, though. Curious other thoughts.
Brien Lundin: Yeah, I think it’s inevitable that they’ll try. I think it’s inevitable that it’ll be implemented across the world. Governments always seek greater power, and this is the ultimate power. It’s also the end of the world as we know it, in my opinion. And something that really needs to keep you up at night. In the US, I think there’s a faint hope that we can prevent it because of our somewhat, you know, more maverick nature and independent legacy.
I’ve heard that Jerome Powell is against central bank digital currencies. It’s kind of being pulled along by the tide as it is right now. But he won’t be there forever, and so I think it’s something they are going to try. Everyone needs to, as much as we hate government, try to get involved. And raise a ruckus against this whole idea and make it a really important political point going forward. Because it is extremely dangerous, and it will affect every aspect of your life.
Bronson Hill: It does seem like it’s a Big Brother’s, you know, it’s kind of a nightmare. The government can have control over every transaction, and, you know, if you buy too much beef or if you drive a gas car, they can start turning off or, you know, if you want to buy guns, they’ll turn off the things to buy certain things. It’s kind of scary and crazy.
And guys, this is Canada…
Brien Lundin: look at your example
Bronson Hill: Yeah, the Canadian truckers, exactly. Guys, this has been amazing. I feel like we could just talk all day and probably will at some point, just, you know, and we’ll have each of you guys at the conference we’re doing this fall, the Advanced Investing Summit in Los Angeles. But I wanted to just see for each of you, how people can get in touch and follow what you’re doing, and anything you want to share here. Just maybe take 30 to 60 seconds and just kind of close it out here.
Neal Bawa: Sure, I’ll go first. Multifamilyu.com is a website—always free, no subscription, no upsell, no educational products. We host about 20,000 people. They come, and we do webinars, all kinds of things. We’re actually doing one on the impact of electric vehicles. We did one on the impact of climate change on real estate last year. We do all kinds of interesting webinars, and of course, we do webinars on various kinds of real estate. So, check out multifamilyu.com. I promise you won’t be sold anything.
Bronson Hill: Yeah awesome, thanks! I appreciate you Brien how can people follow what you’re doing and you learn about your conference and your newsletter
Brien Lundin: YYeah, our newsletter is simply goldnewsletter.com. It’s the oldest publication around on precious metals investing, and our conference is the New Orleans Investment Conference. That’s neworleansconference.com. It is the oldest investment conference in the world today, and we’re celebrating our 50th anniversary this year. We have a lot of special events. It’s in the fall, November 20th to the 23rd, the week before Thanksgiving, so it won’t conflict in any way. But that’s neworleansconference.com—check out our speaker roster, and I’m sure you’ll like what you see.
Bronson Hill: I’ve been a couple of times to a great event, highly recommend checking it out. Bridger, how can people follow what you’re doing? I want you to talk a little bit about launching a fund. I know you’ve helped thousands of people launch their own investment fund. Talk a little bit about that as well.
Bridger Pennington: Yeah, I’ll drop a few things in here. A lot of people were asking about dollars, gold, and bitcoins. Me and my dad just wrote a book called Dollars Go to Bitcoin—talks about BRICS nations, kind of economic stuff—that’s that. And then, on the fun side of things, my brother’s an investment funds attorney. I’ve run three, four funds now. My dad ran his multi-deca-billion-dollar funds.
So, we started building things to help other people launch funds. We launched a small course, which grew into a bigger course, which is now a big conference and other stuff. We’ve had about 73,000 people go through one of our courses on funds—fund management, how to build one, how to start, and how to scale one. We’ve launched 240 funds in the last two years, so about two funds a week launch out of our group, which is pretty cool.
We have a free course, completely free, on funds if you guys want to hop in. It’s like 20-plus videos all about funds—how to build them. Head over to funlaunch.com. I just dropped it in. And then also, we throw some fun events. I actually want to come to Brien’s event.
That sounds awesome. We’re throwing an event in about three months. Neal is speaking at our event, all around capital raising, finding people. It’s called Fund Launch Live all dedicated to emerging fund management and people that want to get in the space of money management. Last year, we had 2,000 people live in Miami. This year, we’re in Orlando, expecting about 2,500—this year should be pretty fun. So, ton of just free gifts on there at funlaunch.com. Just go, there’s tons of free assets, resources, and stuff if you want to get in the space of launching a fund.
So, and also, Brien, just thanks for having me on. This is phenomenal. You do such a great job moderating, asking good questions. And anyways, Neal and Brien, awesome being on with you guys. Thank you!
Bronson Hill: Thanks, man. It’s a great, a lot of fun, really, really great conversation. I always enjoy these panels. Our next opportunity— we do these every month—so next month we’re having the next Bronze and Equity Monthly Event. It’s the 2024 Real Estate Risks and Opportunities. We’ve got some really big-name people. I can’t announce any of them yet, but if you thought this month was good, wait until next month.
The speakers we’ve got, they’re… No, I’m totally joking! I’m giving our speakers a bad time. No, I’m so grateful to connect with each of you, and I dropped my book link in the panel. I just released a book called Fire Yourself: Replace Your Working Income with Passive Income in Three Years or Less. Also, each of these guys— I know Bridger has his investments, we have our investment club, Neal has an investment club, Brien has his newsletter and his event, which is awesome.
So, support them. Just so appreciate you guys. The best investment you can make is in your own education. So, whether you’re watching this live or catching a replay, well done for doing this, and thank you to our panelists for being here for the attendees. We’ll look forward to seeing you guys again real soon. Wishing you all the best in 2024. I mean, make lots of money and protect the investments that you have.
Neal Bawa: Thank you, Bronson.
Bronson Hill: Thanks everyone thanks so much, everybody.
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