The Collapse Isn't Coming, It's Already Here - Adam Taggart

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0:44With Upwork, you can fill critical skill gaps, launch projects faster, and scale support up or down without committing to full-time headcount. Visit Upwork.com right now to post your job for free. That's UPWORK.com, Upwork.com. This is the Rich Dad Radio Show. The good news and bad news about money. Here's Robert Kiyosaki. Hello, Robert Kiyosaki, the Rich Dad Radio Show. We're broadcasting from Phoenix, Arizona, where it's either heaven or hell. And right now it's hot as hell. And I was talking to a friend who's a real estate agent. It's so hot. She has to wear hot pads to pick up her real estate signs.

1:30That's hot. So anyway, and my guest today is a longtime friend, Adam Taggart, and I'm honored to be with him on the show. And Adam has his MBA from Stanford. That's where my poor dad went to school. And my dad knew I was never going to get into Stanford anyway. But the reason I bring up Adam's background is because his show is called Thoughtful Money. Because I've done him for years and I watch his show religiously. And the reason for that is Adam has a classically trained mind in the world of economics and finance and macro and minor. But he is a classical trained one. And most of these guys on YouTube are like me.

2:14we're kind of dogs who are sniffing around the trash bins and sniff stuff out. So I thought, Adam, your title of your show, Thoughtful Money, is an excellent title because you come from greater depth on this whole macroeconomic disaster we're cruising into right now. So Adam, long time. Welcome to the show. Such a pleasure to be back, Robert. Thank Thank you. I will try to live up to that intro. I kind of see myself maybe as sort of bridging the world of the academically trained and the regular guy sniffing around the trash can like you. So my role, at least as I try to have it be, is to crawl in the brains of those really smart money experts and then try to distill what they think into regular person speak.

3:06So hopefully I can do that today while we're talking. Just a quick editorial note, I am not wearing hot pants in case anybody was wondering what was happening below the camera here. Okay. Anyway, your show is well-thoughtful. It is thoughtful money. It is. It is thoughtful money. Yeah. And I watch it religiously. So I'm honored to have you on my program this morning. Well, thank you. And that's a huge honor to hear that you watch the show, Robert. So anyways, very happy to be here. It's always fun talking to you. And it's not only fun, but it's always just real. So since we've known each other so long, Robert, let's dispense with all the pleasantries and let's just be real today.

3:40Yeah. So let's get into what's real right now. I mean, you come from higher education and you have Trump going after Harvard and all that stuff. And as a lay person, somebody sitting on the sideline watching Trump go after the Department of Education and all this, what goes through your mind? Honestly, as somebody who went to Ivy Leagues, I went to Brown undergrad. My brother actually went to Harvard and then I got my MBA at Stanford, as you mentioned. Honestly, I kind of feel like it's about damn time. Yes. Yeah. You'll be hard pressed to find somebody who went through the formal education system, higher education system in this country, who is kind of more down in it than I.

4:29And maybe that's a little bit hyperbolic. You can still get a great education at a lot of places. But I think more and more, and this really started when I started college back in the early 90s. Back then it was called PC or politically correct. That was the movement that then sort of metastasized into what became wokeness. wokeness. And wokeness really just, it was a contagion that kind of completely infected our higher education schools, especially the elite levels of education, to the point where you probably heard people say this, they almost became madrasas for this kind of woke ideology.

5:07And at the end of the day, look, I'm all for the tolerance and the understanding and the mutual respect that was sort of part of the initial seeds of this movement, but it just devolved into the least tolerant movement out there where if you don't line up behind whatever today's woke ideology is, you're going to get canceled, fired, whatever. And the university has to be a safe space for anybody who doesn't want to be challenged in their thinking. Really the opposite of what higher education should be. At the same time, costs just ballooned out of control. So, you know, most people who were going to college were, have been paying a ridiculous amount and too many of them taking on loans that they're probably never going to be able to, to fully repay given the reduced salaries they're going to be able to command, given the fact that their degrees mean nothing because they were studying, you know, whatever gender fluid, you know.

6:09of social songwriting of the 1920s, right? So honestly, I feel like kind of a cleaning of house and a restoration both of both merit, but also just sort of the traditional canon of what education is supposed to do, which is to prepare people for practical work out in the real world. I think that that time is long overdue. And I think that the university has really made a big mistake in the way that they fought back on this. I think they still are. And as a result, I think the comeuppance that they're getting right now is heartily deserved. Right. And the thing, I value that because both you and I value education.

6:52I mean, that's the business we're in. Yeah. Or probably better, we value learning, right? Yeah. Yeah. And I don't think the education system has done a great job recently of delivering valuable learning. You know, my education began when I was looking at, you know, this thing, this little thing. Why is it copper today? You know what I mean? Yeah. Why is it copper? And I didn't know it, Adam, but this is 1965. That's how long ago it was. And I said, they're messing with our money. And that's when I got, like I said, I'm a junkyard dog sniffing out the garbage cans. I said, what are they not telling us?

7:33Why is this in copper? And then in 71, you know, Nixon took the dollar off the gold standard. And at that time, I was flying this baby in Vietnam, you know, around the place. And I said, they took the dollar off the gold standard. What does that mean? So, again, that's why I acknowledge you for being classically trained. And I had to go sniff it out. You know, what the heck would this mean? What does this mean? And I had to fly behind enemy lines to go buy some gold. and I found out that the story I tell is I talked to the little Vietnamese woman we're behind enemy lines because the NV had gone south already we're going to get our asses killed and I tried to buy gold at a discount and she educated me hard on the line Adam she said spot I said what the hell is that word spot and she has red teeth because you eat beetle nuts.

8:31Did she go to Harvard or something?

8:36And as you know, that's where we're in the trouble today. Well, and what's emblematic about that story is sometimes you find the greatest capitalists in communist or socialist societies because they know really where the end game is on those regimes and they become hardy embracers of capitalism. Again, you go to our higher education institutions of higher learning here. Robert, they don't even teach you about money. I mean, all this stuff about how money is created, what you sussed out, haggling with that Vietnamese woman behind enemy alliance in Vietnam, you learn more about money than what a Harvard graduate gets taught.

9:22Except they get the rationale for why printing is always a good thing. Yeah. Yeah. And that's why Jim Ricketts always says, you don't need to be an economist to know inflation is here. You don't. Now, one of the nefarious things about inflation is that when it's moderate, it is hard for the average person to suss out. They can kind of feel the accumulation of it over time, but it's sort of like that frog in the pot, right? And one of maybe the silver linings of the injury that we took from COVID in terms of the spike in cost of living is it sort of pulled back the curtain and the average person now got to see, wait a minute, something's going on here.

10:04Like our money is losing purchasing power at a rate that just doesn't feel like it really should. And we have a moment in time here, I think, where we can try to bring more people into the tent of education to explain what's going on here because they've been able to see it now. And I think one of the things that I hope doesn't happen here is if the Fed is successful in getting at least the official inflation rate down to 2 % or whatnot, and we go back to kind of the slow burn, you know, I really don't want the populace to go back to sleep on this. I want them to remember this and then demand of their future elected officials, hey, we want you to embrace policies that are going to prevent that from happening to us again.

10:44Right. So let's speak to the average person. The thing that's on my mind, I think, 71, when Nixon took the dollar off the gold standard, then the U.S. treasuries and U.S. bonds became gold, basically. And then today, I'm watching the bond market. People are dumping bonds to buy gold now. And so I look at that, and I go, my God, what's the end result of all this? So from your position as a classically trained finance guy, what's going to happen with this bond market if they keep dumping it? So eventually, with the bond market, rates will go higher, right? So for two reasons. One, if people start buying other assets like gold instead of treasuries, there's less demand for treasuries.

11:35So bond prices will go down, bond yields will go up. That's just simple math. But if and as the world starts saying, you know what, I think dollars are going to continue to lose their purchasing power now at a faster rate going forward, you've got to compensate me for that. And you're just going to see the treasury yield just start shooting the moon. Now, a lot of people, I just want to correct one narrative here. A lot of people are saying, well, nobody wants to buy the U.S. treasuries anymore. and the US dollar is going to lose its World Reserve currency status and whatnot. It could, and history shows it probably will at some point in time, but that's going to be a slow process, a lot slower than a lot of people who are really ginned up about this, I think, are taking into account.

12:24And a big question you have to ask yourself is, okay, well, if you don't want to hold US treasuries, whose debt do you want to hold? And the honest answer is, nobody else's is any better. And for a lot of reasons, very few other countries' debts could replace the treasury just from a scale standpoint. So it is highly unlikely that the world is just going to abandon the US treasury system tomorrow or abandon the dollar tomorrow. Now, that being said, this slow burn, maybe even over time, accelerating burn of purchasing power in the US dollar, I believe is one of the things I've got the highest confidence is going to happen here.

13:02It's just going to happen with all fiat currencies. And so you want to ask yourself, how do I protect my wealth against that? And obviously, Robert, that brings us to things like gold. Right. Thank you. So what advice would you have for, I asked Trump this question one time, what advice would you say to the average investor? And Trump says, don't be average. Yeah, I think that's great advice. All right. Well, it's going to be hard for me to top that one. Um, but I, I do have, I, I, I do have several bits of advice on that. Um, and, uh, well, I, okay. So first off, kind of to my point there, like don't, uh, don't just trade by the headlines.

13:48Oh, world's dumping the dollar. I got to get out of it tomorrow. Right. Type of deal. Um, a lot of regular investors do that. And you got to understand that the headlines are partial at best in terms of what reality is. And oftentimes they're wrong. And sometimes they're the opposite of what's really going on. And a lot of times those headlines are written to kind of trigger you emotionally. And so an emotional decision around money is very often forcing you to make the wrong decision at the wrong time. So I would definitely not just see what's on CNBC or look at what's in the headline of the journal or whatever and then rush to trade based on that.

14:30I would get smart. Another thing that investors tend to do too is they tend to take on a lot more risk than they need to. You know, either swinging for the home runs or, Robert, they just haven't done the work to really identify what are my goals? What are my financial goals? What am I shooting for in life? Why am I doing all this, right? And if you're specific about that, if you can really craft and say, look, I want to hit this goal by this time. And you sit down, you actually create a plan on how to get there. Um, you will oftentimes find that you can hit your goal on time by taking less risk than you think.

15:09So why, why, why try to swing for the home run where you're going to strike out a lot more and why not focus on hitting doubles and singles that'll safely get to your goal in time with a lot less risk. Um, and so, yeah, I find I've, I've been a lot of people just, just, just are too reckless. Yeah. Let's call it in my world. Kiss. Keep it super simple. Keep it super simple. Exactly. Exactly. I mean, I could tell you how to be a millionaire. If you're graduating high school, which I just did this with my niece, I was like, look, I can tell you how to become a millionaire with a high degree of probability by the time you're my age.

15:43And it's pretty easy. It actually doesn't, it's not that heavy of a lift. You just have to be really committed and really disciplined, but it's a keep it simple strategy. That's the problem. Discipline. Yeah. Yeah. And oftentimes we're our own. We need to go to break, but I want you to think about this, okay? Because you and I are technically teachers. And if you listen to a crackpot on YouTube, a lot of whack jobs out there. You know what I mean? Absolutely. So I'm going to ask you, who do you respect and listen to? In other words, I look to you as one of my teachers. That's a super honor. Yeah, well, it's an honor to be a teacher.

16:28so I'm going to ask you we'll come back from the break who do you respect and if you're getting an education let's say you're not at Harvard or Stanford but you're a junkyard dog sniffing around the garbage pits who can you tune in on YouTube that you would respect that's the question I'm going to ask you alright look forward to answering it when we come back okay and we'll be right back with Adam Taggart we'll be a long time friend and fellow teacher we'll be right back

16:58Hey, Chicagoland. The Wayfair store is in your neighborhood at Edens Plaza and Wilmette. Finally, you can feel the fabric, sit on the sectionals, and even open the refrigerators. Plus, our in-store designers will help you bring it all together with free one-on-one design support for any project on any budget. Yep, we said free. Oh, and did we mention the cafe? So what are you waiting for? Come see all that's in store. Visit the Wayfair store today at Edens Plaza and Wilmette. Way fair, every style, every home. Still waiting in line? Again? That's time you'll never get back. Save time and money with Stamps.com.

17:37Over 4 million businesses have skipped the line with Stamps.com. Join them to save up to 90 % off carrier rates from your computer or phone right now. Print postage for certified mail, registered mail, and packages in seconds. Then schedule a pickup right from your home or office. For a limited time, go to stamps.com and use code podcast for a free welcome gift. Taxes and fees apply. Welcome back. Robert K. Suckerman said radio show. We're so old, we still call it a radio show instead of the clickbait show or whatever we should call it. Anyway, we've been around for a long time. Adam's been a great friend of ours.

18:14And we're talking today about education. And Adam is classically trained. and I consider myself a junkyard dog who sniffs around the garbage cans or YouTube, should I say. And there's a lot of clickbait, a lot of false prophets up there. A lot of people promising, you know, you'll be a millionaire if you do this. And I listen to their stuff. I just cringe. And yet, Adam, you know, when you see their following, they're followed. So my question to Adam Taggart is, who do you listen to? That's the most, who are your teachers? Because a teacher is a very, very important position in anyone's life. Well, I couldn't agree more about that.

18:52And to your point about, you know, some of these people out there, Robert, who have very large followings, but you're concerned about the quality of advice they're giving. A lot of times they have a very large following because they are playing to what I was talking about earlier with the headlines, right? I think you used the term clickbait, right? They are, you know, trying to sort of foment emotional responses and people to get views, to get clicks. And they're not really focused on the substance of what they're, or the value of what they're delivering. They're just trying to do what's going to get them the most revenues per viewers.

19:30Right. And I'm not going to mention any names in this world. But there are definitely people that are out there doing that. Now, what I like to do with my channel, which, you know, is a more modest channel, but I like to develop, you know, what I call more financially nutritious content. And I think that's why channels like mine and like yours, Robert, attract the viewers that they do. These are people who feel like, you know, I'm not getting well served by the regular mainstream financial media. It's just not actionable for me. It's not practical enough for me. So they're coming online to self-educate and they're trying to find trusted sources like you.

20:03So again, kudos to you for what you've been doing here. One of the things that most of the more successful self-made people that I know, Robert, do is they cultivate a board of mentors, a board of advisors. In fact, you do this, right? With the Rich Dad advisors, right? And so, you know, that's essentially what I've done with my channel, which is, as you know, Robert, it's I get on the best minds and money in the markets. And then I do a really deep dive hour long interview with you, where I just try with them, where I just try to pull out, you know, what's in their head and make it as visible and understandable to the viewer.

20:42So the viewer can say, okay, this really smart person thinks these key things, and I might want to take action on that, you know, based on this, right? So to your question about who do I listen to, or who do I respect? Who are my teachers? I'm very fortunate to be able to talk to a ton of smart people every week like this. So I do four to five interviews a week, I would say some of the ones that are at the top of the list are, I'll give you a few names and they sort of span the age and experience spectrum. At the high end are guys like Lacey Hunt and Thomas Honig. And those are probably not like everyday names.

21:19I'm not sure if it's going to resonate with. Second name was Thomas, what? Thomas Honig. How do you spell that? H-O-E-N-I-G. Okay. I'll follow him now. Okay, good. Yeah. Yeah. So, so both of them have worked for the Federal Reserve, which, you know, you might be like, oh my God, why are you listening to folks in the Federal Reserve? These are guys that worked in the Federal Reserve. And then after their time there, you know, what came out of it saying that is one of the most dysfunctional institutions around. And it is, it is, you know, doing policy that is, you know, anti what we should be doing.

21:52And Tom Hunnig was quite famous because he was the CEO of the St. Louis Fed, I think, for a number of years. But then he actually sat on the Federal Open Markets Committee. This is that small table of people that vote on what the interest rate is going to be. And he is on record as having the longest stretch of dissents of anybody on the FOMC because this was during the era where Bernanke was starting to usher in quantitative easing. and he wanted a unanimous vote. And at every vote, Hanning was like, no, this is going to end up overinflating asset prices, creating wealth inequality, and eventually leading to inflation.

22:32And he eventually left and history has proven him right. So it's incredibly valued to hear these guys who have been there in the center of the seats of power. They know how the institution works. They know how the people work at them. And they come out of it, you know, basically being willing to be honest and saying, look, you know, these are all the elements that are going on in these areas that do not serve the interests of the American public. And they've been very big advocates for what they consider to be much better monetary policy. Sadly, you know, the system isn't listening to them. It treats them more as outsiders and heretics at this point in time.

23:10But I think over time, eventually, they're kind of the early guard of the folks that are delivering the hard truth. And eventually, that standard will get picked up as the current system really starts to fail. On the younger end of the socioeconomic spectrum, I'm going to mention this guy named Darius Dale. Don't know if you're familiar with him. Wait, do you guys spell his name? D-A-L-E? Last name is D-A-L-E. Yeah, Darius Dale. Yeah. Darius was a former football player and a highly well-educated young man. I think he's in his early 30s. But he puts out basically institutional grade analysis. So he's got a lot of big Wall Street firms that buy his analysis.

23:54But his passion is creating a version of that for the regular retail investor. And if you watch a video with Darius, let's say it's an hour-long video, you get about three or four hours worth of content packed into that hour. One, because he's a very animated, very fast speaker, but he just brings a torrent of charts. So everything he says is backed up by just reams and reams of data. But I think one of Darius's real skills is he's able to take all that and break it down in a way that the average investor can take in. And at the end of the day, he runs a portfolio for the regular investor, which he calls the KISS portfolio.

24:33the keep it simple, stupid model. And actually, his stands for keep it simple and systematic. But he ends up basically just using three to four different funds. And depending on what's going on in the world, it's either, okay, we brought this fund down a little bit, we increased our exposure to this fund. But it's a way to basically surf what's happening in the markets using about the simplest number of inputs that I've ever seen. But I will say of all the people that I've interviewed over the years. Darius's track record over the past two to three years has been spookily good. And oftentimes, sometimes the simplest approach can be the best approach.

25:09So he's a great mind. And Lacey Hunt, I love Lacey because he just keeps it simple. He does. And Lacey, he personally knew the greats, Milton Friedman, Paul Volcker. Lacey actually worked with these people, met with these people, talked with these people. They were friends of his. So, you know, of the actual greats of, you know, like the real, uh, you know, uh, tried and true economic thinkers, not the, not the bastardized version that we have now before it all got corrupted. He's of that generation. He really is kind of like the last, uh, of the greatest generation in economics. Um, and, uh, man, the fact that he's still willing to share what he knows at our age and be as transparent about, you know, what he thinks is wrong with the current system.

26:01It's a gift to be able to talk to him. Yeah. Anybody else you can bring? That was a good time because, you know, like, sorry, a rich dad, poor dad, both were teachers, you know, great teachers, but they didn't teach me the same subject. Same subjects. Yeah. So, I mean, literally, Robert, I could give you a long, long list. I'll throw out a couple of names. Stephanie Pomboy is another great macro thinker. Oh, she's amazing. Yeah. She's wonderful and a delight too. And again, a lot of these people have the ability to think big, but talk in just real terms. And Stephanie is wonderful at that. There's a housing analyst named Melody Wright.

26:40I don't know if you follow her, Robert, but she is fantastic. What's her name? Melody Wright. And she had a front row seat. W-R-I-G-H-T. Exactly. W-R-I-G-H-T. Yeah. Yeah. And she publishes a free sub stack for anybody that's interested in following her. She had a front row seat to the global financial crisis. She worked for, was it GE Capital? When they got involved in lending and everything hyper exploded there, she was there basically trying to do the workouts on all these horrible mortgage loans that they She really had a front row seat to that crisis. And she has been following the housing market ever since.