Welcome back to the VRA Investing Podcast! In today’s episode, Kip breaks down the latest moves in the market, celebrating what’s shaping up to be a strong, momentum driven summer for investors. Kip shares his optimistic outlook for the second half of the year, arguing that despite the market nearing overbought territory, conditions remain electric for continued growth.

Don’t look back. The market is closed. Good Monday afternoon, everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a good day and a great weekend as well. It is summertime. Hope you’re all getting to enjoy your summer a bit with family and friends. And, you know, if you’re in Texas, you know, the heat is getting a little oppressive, but it does help to have a pool.

I must say, it does help a lot. Give me another hot summer, folks. Listen, another good day today. This market continues to move higher, and I don’t know that there’s anything that really can stop it right now. Yes, we’re approaching extreme overbought levels, but the market’s broadening momentum is accelerating, and this feels like a market that wants to have a fantastic second half of the year. Our view has been that the second half of the year is going to be electric, and I think that’s going to be right. We’ll cover some more of the facts on that in just a moment. I got to start with this.

[00:00:53]:
Okay. Elon Musk, right. Look, I. I don’t have to say how amazing this guy is. I don’t think so. Right. He’s the. He’s the single best mind of our times, and maybe the best mind of all times.

Right? Probably is. So, look, this is not. It’s not directed at that side of Elon, but the political side, which he’s now become infatuated with. And look, we all go through these cycles where we’ve learned something new. He’d never really been a deeply political guy, and you get heavily immersed in it. Of course, he’s done with Trump this, this past election, and then the disillusionment starts, and that’s where he is now. So it’s not that I don’t get it, but at the same time, you know, one of our top investments is Tesla, and every single time, like today, Elon Musk comes out and starts talking. Honestly, it’s gibberish.

I would tell him this is his face. It’s gibberish is what he’s talking about. It doesn’t make any sense because it’s. It’s not. It’s not even close to being true. Let me cover a couple of his posts just real quickly here, because again, this is. Every day he does. The reason I’m spending time on this day, every time he does this, Tesla stock gets it.

[00:02:05]:
So, you know, look. Yeah, I have a problem with that. Right. Run the companies. So this is a. I’m going to read you two tweets he put out today. This one, first one he’s got pinned. Okay, so he clearly believes in this one.

He’s probably going to leave it up here for a while. It’s a big, It’s a big, It’s a big statement he’s making here. Musk. It is obvious with the insane spinning of this bill, which increases the debt ceiling by record $5 trillion, that we live in a one party country. The Porky Pig Party. Time for a new political party that actually cares about the people. Let me read the next one. They go all together.

He said things within an hour of each other. This is the one that really is like. I completely agree with what he said in the first. Except I’m going to break it down for you. When you have the world’s reserve currency, debt is largely an illusion. This is a point that we’ve made for. I mean, I’ve made this point for decades, okay? And it’s been true. The fear mongers out there that keep telling us that our debt’s going to sink us, they’ve been wrong and they’ll continue to be wrong.

[00:03:05]:
That’s just not where we are. That’s not where the world is right now. At some point it could blow up. But guess what? If it’s blowing up for us, it’s really blow up for China and Japan. Yeah, the US is 122% debt to GDP. Right. China is over 300%. Japan is better than 250%.

Again, we’re 122. So they’re at least twice as bad as we are. The number two and three economies of the world are at least twice as bad as we are when it comes to debt to gdp. So this is really a smokescreen. I don’t understand people that don’t. They can’t see this again, I’ve said this before, I’ll say it again. I think it should be mandated, mandatory, that if you’re ever on television or if you’re making a point politically or economically and macroeconomically on Twitter or wherever, if you’re going to talk about the problems the US has debt to gdp, you should be mentioning Japan and China. It should be required just for perspective because perspective really matters here.

And then the EU is matter of fact, this might surprise some people. The EU is actually better than the US. Okay, not all countries. Greece is 158%. Again, they’re worse than us. Italy 136% worse than us. France 113 better than us. Right.

[00:04:22]:
But if having a low debt to GDP, if that was the key to success, why would. Look at Germany, a 62.5% death to GDP. Yes, they’re the most powerful country in Europe, but where do they rank on the world stage? And you go down the list of European EU countries that have debts to GDP in the 30, 40% range, you know, like Finland, the Netherlands. Right. And you would just never think of these companies as an economic powerhouse. So this is financial engineering. It’s what it’s always been. I think this is why Trump doesn’t fight this.

I would love to see him in an interview really break this down, because I believe he knows that government debt is largely an illusion. When you have the world’s reserve currency and the most powerful military, ain’t nobody going to mess with us. No one’s going to keep talking about, oh, our Dow debt is going to lose its petrodollar status. I hear this all the time. Show me some evidence. Where’s the evidence? The dollar reigns supreme. And by the way, you try to mess with that, that is when we blow you up. That is just what’s happened in the past.

Not saying I prove it. All right? But that is our system. That’s our global. We are the world’s badass. And we walk around and we wear that right? And that part of. Part of it is having the world’s reserve currency. There will never come a time in our lifetimes that we don’t have the world’s reserve currency. Anyone will see this.

[00:05:45]:
The US Dollar will have the. Will be the world’s reserve currency for all of our lifetimes. Or we’ll have lost a world war. Because the next world war that’s fought will be about money. It’ll be about debt and loser pays. That’s been the history of world wars anyway, right? Civil wars as well, by the way. So, again, Trump knows this. All right, I’d love to see Trump explain this, because I think they’ve got.

I don’t think I know the government, the state, deep state, whoever really runs the show up there, boy, they got. They got the. They’ve got access to the best AI programs out there and the research possible. And, you know, they spit all this in. Oh, what if we cut. What if we cut our debt by X? What happens to the economy? They’ve run all this through and they’re like, you know what? Let’s keep spending. Because other countries are. It’s not a problem.

Debt is interest rates. Now, you could say Kip, but interest rates are a problem. And you’d be right. You’d be exactly right. Rates are a problem, but that’s not, has nothing to do with our debt to gdp. That is everything to do with the Federal Reserve, another deep state establishment that uses high interest rate policy and others to control Trump or whoever’s in office. This is what they do. You know, when you hear about the, well, I won’t go too deep, deep in this, but that, that is just the way it works.

[00:07:11]:
And right now, again, the 10 year yield is now down, down big again today, down to 4.23%. So rates are coming down. Trump is fixated. He’s fixated. He had some post out today. I don’t know if you saw this on Truth Social. Let me ask what we’re doing social media day here at the vra. Let me read this post to you from, from Trump.

Jerome. Too late, pal. And his entire board should be ashamed of themselves for allowing this to happen in the United States. They have one of the easiest yet most prestigious jobs in America and they have failed all caps and continue to do so. If they’re doing their job properly, our country would be saving trillions of dollars in interest costs. The board just sits there and watches. So they are equally to blame. We should be paying 1% interest or better.

And then he listed all the, in a handwritten note, he listed all of the countries. It was a printout of 44 countries and the world and their central bank rates. Right. And we are, I guess he did this because people were questioning because he’d been saying we’re number 38, we’re 35th. That’s not quite right. Our effective funds rate is, Fed funds rate is 4.33%. But it doesn’t matter. I’m not gonna quibble.

[00:08:29]:
We’re, we’re 35th. All right, we’re 35th or 34th. Right. With the UK and UAE, okay. But yeah, Switzerland, quarter of a percent. Cambodia, 0.45. Japan, 0.50. Right.

He’s got it. Trump’s got a great point. It’s a point we’ve been making here for a long time. And so it was a big part of our, of our letter. Elon Musk. Yes. Love you, man. But I don’t like seeing Twitter, Twitter, I don’t like seeing Tesla go down 3% every day.

You get on your bandwagon. But this, this, this post here, he’s going to spend all of his time. I’m not sure I read that one. Let’s just wrap this up because I, this is really the reason I wanted to share this today. I’ve got way too many windows open here. It didn’t help. One second. This is the post that I really wanted to talk about with you here today.