In today's episode, Kip discusses the latest GDP estimate surprise from the Atlanta Fed, coming in now at a 3.4% projection, and he breaks down why we’re headed for even stronger growth, potentially hitting his 5% GDP call sooner than most expect. Kip also unpacks the groupthink dominating Wall Street and economic circles, making a compelling case for why independent thinking and contrarian strategies continue to win out. Tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Tuesday afternoon, everyone. Kip Herriage here with the daily VRA Investing podcast. Hope you had a good day today. Let’s get to it quickly here. I’m going to cover a few things. Keep this a little short today, but we’ve got some big things to tell you. First of all, tonight at 7:30 Eastern, I’ll be on the Wayne Root show, the war, war zone.

I always want to call war room, but that’s the Bannon’s war zone. Tonight is 7:30 Eastern with our good friend Wayne Allen Root. Hope you join us there. Talking about, well, the stock market, talking about the economy, Talking about our 5% GDP growth rate estimate which we believe will, will, will hit by the end of, frankly, I think it’s going to be much sooner than this, but at least by the beginning of the third quarter next year, I think we’ll get, be there this year. We still got almost four months to go. Three and a half months to go. And listen to this. Just Tyler just reminded me just three hours ago, the Atlanta Fed just released their latest GDP now growth estimate for the third quarter.

They’re now up to 3.4%.

So this is the same time that you gotta remember all these economists are telling us the economy’s slowing, job market’s slowing.

Like we can believe anything the BLS says, right? But look, we see what’s happening here. The stock markets is a leading indicator, is a barometer of economic health and growth and we see what the market’s been telling us. We know what’s coming. We know the Trump economic miracle, the innovation revolution and this ocean of liquidity, those are the three themes that, that are driving everything and will continue to drive everything. And you know, it’s not that. Like by the way, when we hit my estimate of 5% GDP growth, okay. Which again I think could happen this year would not surprise me at all when we hit that. It doesn’t mean like that’s going to be a top.

[00:01:51]:
I probably need to clarify that. I’ve had people say what happens then? Do we start slowing down? What happens? No, we keep going. We keep going. This is that, this is that economy. This is a runaway economic growth economy. And the stock market is the indicator now that this is happening. This is Trump’s farewell song. This is it.

Kip Herriage [00:02:10]:
This is it. And he’s, he’s done everything in his power to power the economy. The market’s higher and that is exactly what’s taking place here. Also. Listen to this. What’s Our other big call been rates will plummet.

We again, all the economists say the economy is slowing. All the comments saying we’re going to have inflation from Trump’s tariffs. Well, not us. Our call has been that inflation will continue to be very subdued and that interest rates will plug plummet. We’ve been very vocal, very loud about this call. What happened today, 30 year mortgages fell to a three year low of 6.13%. Why does that really matter? Because we have $34 trillion in home equity. We get rates down back in the fives and people start saying, okay, I’m feeling pretty good about the economy.

[00:03:01]:
What were all these people fear mongering about? Well, what’s going on here? Well, the economy is in good shape. Maybe I should go ahead and get some animal spirits going here and get some money out of my home and maybe buy some stocks, get some money in my home, do some remodeling program in my home, buy another home. Okay? This is the power of animal spirits. And folks, just because you don’t hear it in the mainstream media, it doesn’t mean it’s not happening. Listen to your good friend Kip Herridge. Listen to Tyler Hert. We’re telling you it is happening right now and it’s only going to pick up speed. So again, our call on 30 year mortgages is that at some point next year they’ll be sub 5%.

It wouldn’t surprise me if they’re at 4 and a half percent next year because we’re going to see now the velocity of the move will pick up speed. And it’s again, don’t, don’t, don’t buy into the mainstream narrative that oh we, we gotta have inflation down below 2% before that can happen. No, that’s complete nonsense. Oh, the economy’s hot though, Kip. Then how can rates fall? That’s nonsense too. A strong economy does not mean you have to have inflation. Matter of fact, it’s just the opposite, right? You got more and more competition for money rates. Rates continue to fall in a healthier economy.

[00:04:09]:
That’s what’s happening here. It feeds on itself. So again, I hate to hate to belabor this point, but these mainstream economists are just not good at what they do. And the primary reason, it’s not that they’re not bright people, they’re all very, very book smart people. It’s groupthinking, right? We talked about this for years. Now it’s groupthink they get in this profession. This, in this case economics. They’re all following the Federal Reserve.

They’re puppeting and parroting what they’re saying. Why would they do that? Because they got to stay in line. They got to use the same group think, they got to speak the same language because as an economist they all want to keep moving up the pay scale, don’t they? They all want to keep coming. They want to be an economist, they want to be a senior economist, they want to be a top economist at the firm. Next thing you know they want to be working for these big think tanks. Next thing you know, they want to be on the Federal Reserve staff of economists. By the way, the Federal Reserve only employs 800 economists. You believe this? And they all say the same thing.

It’s this group think. And again it’s not doesn’t just apply to economics Group think has destroyed so many of our professions and because it all. It’s always about money, it’s about power. But moving up the chain, right? And to do that don’t rock the boat. You don’t can’t speak your own mind and voice even as I would imagine that in every profession where it’s legal medicine or again economics, I’m sure there, there are a lot of people, there have to be. How about climate change, right? There are a lot of people in these various professions. They’re like God, I really don’t believe that. But you know what honey, I shouldn’t say anything if I, if I speak up, I mean I get my race, may not get my next, but don’t say anything.

[00:05:54]:
Don’t rock the boat. That’s what’s wrong with America to a large degree. And that’s what’s so great about where this country is headed, the red pilling of America. Because all that nonsense is going bye bye, right? All that nonsense is going away. And now you know what? If you’re really good at what you do, speak your mind. Tell people what you think is going to happen. And again, this is one of the reasons you have to know that Tyler and I so much love what we do because we enter to nobody, nobody tells us what to say, nobody tells us what to write. We don’t use AI or any of that garbage.

We write every word ourselves, obviously. We speak every word ourselves in these podcasts and TV interviews. And I think that, you know, that’s why the newsletter profession, you know, fin pub financial publishing, that’s why it’s grown so fast because people are just fed up, investors are fed up with Wall street nonsensical research because it’s all groupthink. And there are some firms that’ll go out on a limb and say there are some good firms. There are some smart market strategists. We talk about a lot of those here, don’t we? But again, the groupthink of most professions has destroyed them and certainly it’s destroyed the trust of those professions.

And so that’s what’s happening here. But again, our call is rates are falling. Our call is that economic growth is picking up speed. Very these are high confidence calls, folks. And they have been since we first said it started, really sort of putting it in print with the big bribe three years ago.

[00:07:21]:
But again, Atlanta fed 3.4% for the third quarter. You know, I think they could be at 5%. They’re the first by the way, land of Fed, they had this GDP now model and there was always, they’re always the first, they’re always the first to move a big in a direction. Now they’re not always right. If you remember closely, remember back in when Trump’s tariffs were going in place, they had a, they went to a negative gdp. Do you remember that? Like what are you smoking? You know, anyway, so they make some crazy calls. They’re run by Bostic. Is there a Fed governor of the Atlanta Fed? He is not a friend of Trump.

So when you see the Atlanta Fed come out with this kind of a big estimate of third quarter growth, 3.4% knowing that Bostic is the Fed governor for the Atlanta Fed. Yeah, that’s a tell. That’s a tell. I must, I imagine that Bostic must absolutely hate having to be hands off with these GDP now models. Like not really a fan of the president, don’t really want to talk about the economy doing well. But you know, he must, he must, it must be hands off over there. And I do applaud that. That’s very good.

[00:08:27]:
So tomorrow of course is big Fed day, right. We’re going to get the Fed rate cut. Latest dead watch tool CB fed watch tool now 100, 100 you don’t see this a lot. 100 that we’re going to have a quarter point cut, 25 basis point cut and there’ll be some descenders. You know, the new guy, the new Trump guy that just got, I can see him, but I can’t think of his name. Anyway, he just got added to the Fed, got approved by the Senate. Now he’s going to be voting tomorrow and so he’ll be at the center because if they’re only going to drop rates by A quarter of a point, the new guy, Murin is going to dissent. There’ll be at least two others that descent again, all these guys are in the running to be, you know, next to the next fetch here.

So, you know, they’ll be, there’ll be at least three people, I believe, that will dissent. Meaning they want a half a point cut. And it should be bigger than that. There’s just no reason for the fed funds rate to be an effective 4.33%. There’s absolutely no reason. Way too restrictive. Just in case you didn’t know this, to get back to a neutral fed funds rate, the fed funds rate would have to be more than 1% lower than it is now. That’s neutral.

[00:09:38]:
So that’s where we’re headed. That’s the gravity. That’s the, that’s the magnet that’s drawing us wherever going. Pay attention to the effective. Excuse me, pay attention to the neutral fed funds rate. And it tells you where they should be. They’re, at least they’re honest about that. Okay, so tomorrow at 2pm Eastern, we’ll get the, the rate cut.

It will be a quarter of a point. I mean, that could surprise us and do a half. I, I, I, I could come up with a conspiracy theory as to why they might. But, but who, who has time for that? And there’s too many other conspiracies out there we should be talking about. But it’ll be a quarter of a point, almost certainly. And the question then becomes, you know, that’s at 2pm Eastern. Thirty minutes later, we get, of course, Jay Powell’s presser. And the question comes after that, what does the market do? And this is what we’ve been addressing this week with our Bureau letter subscribers here is, it’s a good question.

[00:10:31]:
I don’t know. You know, we’re so overbought. We’ve had such a big run. We’re entering, by the way, starting tomorrow is the most negative 10 days of the year. Start tomorrow. Now, we’re not talking about 5, 6, 7% declines from an average decline like 1%, right? But it is, you know, consistently a negative 10 days. And so again, the seasonality sometimes matters at this overbought level, when we have again, as Tyler started talking about yesterday, this, this could be a buy the rumor, sell the news event. Entirely possible.

Entirely possible. It would be healthy, by the way. It would be very healthy. I frankly love to see it. We paused our buying here in the VRA portfolio, except everything except for our 10 baggers. We paused our broad Market position buying. Just our discipline.

[00:11:21]:
You know, keep any cash on the sideline, wait for an opportunity. So we get, if we get a shakeout over, I don’t know, I frankly doubt, I doubt it’s gonna be much more than a couple, three days if that. But if we got a really nice one day shakeout, got the put call ratio really flying up there again. The, the AAI investor sentiment survey is already at 50 bears. It’s crazy, right? Absolutely insane. What are people thinking? The fear and greed index is like 58. So it’s just out of neutral. We’re hitting all time high after all time high.

And investors are still concerned. Why would that be? Because they’ve been conditioned to be. So there has been a powerful psyop of negativity. If you’ve been with us, you know, I’ve been talking about this now for probably a decade. That is just keeps people afraid, keeps people on the edge, keeps them out of the stock market. All it’s done is hurt them. Because that’s what the media does. Because they know negative sell fear cells and the government knows that the more the population they can keep afraid, the more malleable they are, the more they’re easily they are to be controlled.

So there are a lot of reasons for this shy up of negativity. To just know that it is real, it is there. And it’s not your friend. You know, it’s not. If you’re, if you’re, if you’re an investor or a business builder, it ain’t your friend.

All right?

It’s your enemy. So watch, watch as little mainstream media as you can. Listen to our podcast every day. Again, sounds self aggrandizing. It’s not. We know what we’re doing. We’re pretty good at what we do. We get these big calls, right? And, but listen to people you respect, you know, and that you trust.

[00:12:56]:
You’ve learned to respect and trust and only use the mainstream media as a contrarian investing tool. Which is why we use it like I, I, I, I. How many times have we written this up? Instead over the years, anytime you get 75% or so in that, in that range of economists, Wall street economists, right, Federal Reserve economists that are saying anything, whenever they’re saying anything and they’re a big majority of them saying it, all you got to do is go in the other direction. If you get lucky and you, you get 90% saying it. Well, you know, you know, which is by the way, 90% of economists are saying we were going to have Inflation because of Trump’s tariffs. Right. Group think.

Got to speak with one voice too. Afraid not to. Then that’s a powerful signal to go in the other direction. Contrarians make a lot of money in the markets and it’s something that’s, it’s an acquired taste. You know, I didn’t, I didn’t understand it at all. I was, I had no clue what that was about when I was a younger investor. But I think if you get a little more seasoned, it becomes easier because you spot it. You spot the narrative.

[00:13:57]:
You know, you spot the narrative and you’re like, okay, that’s a money making opportunity right there. Let’s go the other direction. So yeah, we could have a buy the resell the news event. I don’t think it’d be long lasting. It was just too much money on the sidelines. $34 trillion in home equity as rates come down. Hallelujah. Seven and a half trillion in money markets.

22 trillion M2 money supply. Are you kidding me? These are all, all time highs, by the way.

And people are still bearish and negative. It is the dangerous thing. I, it’s the kind of, again, you’ve heard me say this a lot. If you listen here, the things that don’t make sense to me drive me absolutely crazy and I harp on them, I dig into them, I want to find out am I wrong, why, why, why, why am I such a big minority here?

Right?

But why do I feel so confident about this call and then I finally reach a point where I go, okay, they’re just wrong. Got it, got it. You know, it’s a contrarian call. And that’s where we are with this market again. 10, 10 days, 10 bad days coming up here. I think it’s probably going to be a. So what? And because right after that what happens? Yeah, we get the three best months of the year. October, November and December.

[00:15:01]:
And this melted move higher is going to continue. It’ll actually pick up speed. All right, let’s look under the hood today. Really kind of a quiet day here. Frankly, I’ve been very quick about this advanced decline. Today was a slightly, slightly negative, slightly positive for NYC and Nasdaq like 100 issues either way. One was positive, one was negative. Nasdaq slightly positive.

NYC slightly negative. Volume today. NYSE slightly negative. Nasdaq pretty solidly 59 positive. Not bad for a down day.

Right?

And then also today, I think this is another tell if you. We like, we like looking at this as bull markets begin to expand and broaden this textbook as this is happening Today, we had 466 stocks hit a new 52 week high to 102, hit a new 52 glow. Not, not bad again. Dow Jones down 125. Not a big deal. NASDAQ down 14 again. We had no real downside action today. 10 year by the way back down to 4.02%.

Remember a couple days ago it cracked 4% for the first time since, I don’t know, eight, nine months ago. And of course that’s where we’re headed. And much, much, much, much lower after that. Trump’s going to get his wish about lower rates, folks. Take that one to the bank. Take it to the bank. In our commodity watch, a sector watch today again very quiet. We had five sectors finished higher, six minutes lower.

[00:16:18]:
The downside, utilities, strange group. I don’t even know how you make sense of this. Down 1.8%. I don’t know why rates are down. Why does that make any sense? It doesn’t. Energy day up 1.7%. I like energy stocks here. We like them a lot here.

Energy stocks. Okay, when, like, like, like gold in the miners, right? When the miners lead gold as they’ve been doing all year, going parabolic now, they’re overbought now to the extreme. But when the miners lead gold, that is, there is no bigger buy signal for the entire group, right? That’s the tell because the equities lead the underlying commodity. Same thing in energy. Energy stocks today up 1.7. Leading sector today. I like this group. We’re well positioned in this group and energy stocks have been leading almost all year.

Something I really hadn’t even noticed until like a week ago somehow missed it on our screens. But that’s, that’s a buy signal and that means oil is going to go higher too at some point. Once we get inflation licked, Trump will take the pressure off oil companies and OPEC and boom, oil price start to rise. Towers reminded me look at China’s market all time high. Look at these global markets all time highs. What do you think they’re telling us? They’re telegraphing the strong global economic growth that’s directly in front of us. That means oil prices rise. And so it’s a very, I’m a simple Texas boy and that’s a simple concept that I can understand.

[00:17:38]:
And it is, I believe going to play out with again another, another, another high confidence call that really nothing else happening anywhere else. There’s a commodity watch today also very quiet. Gold up 8 bucks an ounce at 3,727 hit an intraday all time high. Get used to a lot more of that. That’s 24 I believe on the year. Silver today down slightly at 4,287 an ounce. Copper today down 18 cents announced at 469. Crude oil up a buck and a quarter today up 6,455 again in business trading range for some time now.

And finally the day bitcoin. Where is, where’s my. Too many screens open, folks. Yeah, bitcoin was having a good day earlier today. Last I saw. Of course we own IBIT here in the V portfolio. Yeah, nice tier up 1.3% the last 24 hours. Last trade now 116,650.

And of course there’s really nothing not to love about bitcoin here. I think this next been consolidating here in a very tight trading range. The next move is going to be going to be a breakout. It’ll be a big one. You have to own bitcoin, you got to own gold and you got to, you got to own inflationary assets and this is not complicated. The dollar is going to continue to fall. That’s what Trump wants. He’s getting it.

[00:18:54]:
We’re going to monetize, not monetize the debt. We’re going to inflate away the debt. That’s the game plan. You a lot more about that next year but you can see it happening in all these cross currency actions and cross asset actions that are taking place. It’s tax telling you they’re going to try to. It’s a tricky game but I think if anybody can do it, it’s Trump and Bessant inflate away the debt, which means you need some inflation. But your economy’s got to grow and, and you’ve got a fixed debt level, right? You know, the 30 year, 10 year, whatever. The debt levels are fixed when the government issues them.

So if you get a little bit of inflation, a little bit more and get strong economic growth, you can, you can, you can, you can, you can, you can make both happen. And then all of a sudden your debt to GDP really starts to fall. That’s what they have in mind. But for that to happen, by the way, the dollar must continue to go lower, rates must continue to go lower. And what does that mean? Gold, bitcoin, boop stock, I mean they all are going to move together. And then the key here I think is to be in the absolute best ones, you know, not, not just ones that could go up 810 a year. You want the ones you can go up 30, 40, 50% of you.

Right?

[00:20:02]:
And that’s the, that’s really the game plan. Anybody can make money in a bull market, but if you really want to crush the market, you know, you got to be in the right sectors and the right stocks and you got to have some kind of marketing market timing mechanism that is trustworthy.

All right.

All right, folks, that’s it for the day. Hope you had a great day and even better night, and I if you can join me tonight on War Zone with our great friend Wayne allen root at 7:30 Eastern, you can watch it anywhere online and of course through his Twitter X account as well or his website or Gateway Pundit, their partner in this. So we’ll look forward to hopefully seeing you there. Have a great night, folks. We’ll see you back here again tomorrow after the close.