fight China on trade<\/a>, I think Trump\u2019s doing the right thing by trying to get them to the table and get something settled. <\/span><\/p>\nDavid: Y<\/b>eah. He\u2019s not a person shy of negotiation, we all know that. Coming up in just a bit, we\u2019ll talk more with Dan Eberhart all about oil and energy in the markets. Stay tuned and we\u2019ll be right back on The Income Generation. <\/span><\/p>\nDavid: <\/b>So, in light of all the worries on Wall Street and the uncertainty in the Middle East, the question becomes \u2018Will oil prices continue to rise or is this fear overblown?\u2019 Well, as we have fears about inflation overall and rising interest rates, I believe that\u2019s somewhat overblown but I also believer they\u2019ll continue to have a real impact on the financial markets, regardless. And we\u2019ll talk more about that in just bit. But right now, let\u2019s talk about some of the factors that I believe will help stabilize oil prices. One for example has to do with the economic progress that has helped increase oil demand so far and the fact that it\u2019s expected to slow down and ultimately level off over the next couple of years. Again, most Economists are skeptical that President Trump\u2019s promise on the sustained 3-4% of the GDP growth is even possible even when considering the effects of his tax cuts in place. As former Treasury Secretary, Larry Summers, said in an interview just last week, <\/span><\/p>\n\u201cYes, we are growing at a reasonably rapid rate but it\u2019s taking unsustainable fiscal deficits (in credit and asset prices) to drive us to that point. You can always generate a sugar high. The real problem for us is not achieving growth, but achieving healthy growth with a financial environment that\u2019s sustainable.\u201d <\/b><\/p>\n
And as we discussed last week, even as the Federal Reserve has forecast GDP growth no higher than two and a half percent over the next two years, and predicted a cool down to under 2% after 2020, they are also looking for inflation overall to stabilize at around 2%. The problem with forecast of inflation and growth beyond those levels, of course, is that they don\u2019t factor in some important details. The idea of President Trump\u2019s tax cut as an inflation driver is a perfect example. Those are based upon the assumption that because Americans have more money in their paychecks, they\u2019re automatically going to spend it on goods and services, increasing demand and driving up prices but that assumption overlooks a very important factor. The nation\u2019s largest demographic is the income generation. And ever since getting burnt by two major stock market crashes in the last 18 years, they have been more focused on saving and paying off debts than spending. I believe that factor alone with the deficit quantitative easing abroad and a lot of other factors is going to go a long way towards limiting growth along with inflation and long term interest rates and if economic progress has been a factor in the oil rally, then when that progress levels off, It instills the reason that oil prices will too. In fact, many oil market experts believe the turning point will come by the end of 2018. As Tom Kloza, the oil price information service told NBC News recently, <\/span>\u201cIt changes when you get to the end of 2018. We think prices in 2019 – for crude, for gasoline, will be lower.\u201d <\/b>Jerry Ovbawa of the Peterson Institute for International Economics agreed predicting that OPEC Nations might try pushing prices as high as $80 a barrel but will hit strong resistance there by the end of the year. So, if all of that proves to be accurate, does it mean Wall Street will breathe a sigh of relief? Does it mean the extreme volatility at risk of the major correction we\u2019ve experienced since early February will decrease and the stock martlet might even regain its upward momentum? Well, anything\u2019s possible, of course, but in this case, I think it\u2019s unlikely and we\u2019ll explain why that\u2019s true in just a bit. Ok, we\u2019re back with Dan Eberhart of Canary Oil. <\/span><\/p>\nDavid<\/b>: Dan, what are your thoughts the market, the stock market and what\u2019s happening today, you know, how much of this volatility we\u2019ve seen over the last 3 months has to do with oil prices whether directly or indirectly? <\/span><\/p>\nDan<\/b>: Sure. So, I think that the oil price in the market would have been more correlated than historically but I think it has more to do with the kind of macroeconomic growth numbers and then, the trade, you know, the trade, I will say scupper at this point, I think we\u2019re a little short of a trade war but that kind of belly costs talk and coming out of the Trump administration about trade has got more to do with it than oil prices for the past couple of months. <\/span><\/p>\nDavid<\/b>: Now, the concern is always inflation and I know you\u2019re kind of eluded to this and right now, the market seems to be afraid of inflation. So, is that kind of where you peg that $75 a barrel number thinking that if we get much over that, it could be an inflation trigger and that might be negative for the markets in general? <\/span><\/p>\nDan<\/b>: Yeah. No, I think that\u2019s exactly right. I think we\u2019re going to see labor inflation and I think we\u2019re likely to see other types of inflation too and I think that\u2019s going to push oil higher as oil price in dollars and I think that that, eventually, will have a cooling effect on the economic growth of the overall economy and also cool some of the eeriness in the SNB 500 down too as well which, obviously, affects the market.<\/span><\/p>\nDavid<\/b>: About alternative energy sources, you know, there\u2019s always a lot of talk about them, are they increasing at a rapid rate or are they taking a bigger percentage of our country\u2019s energy need it is that kind of leveled off because prices have been low for a while and we\u2019ve gotten complacent? <\/span><\/p>\nDan<\/b>: Sure. Well, to some degree, I think that it\u2019s, the returns aren\u2019t there from the way that we analyze stuff but I think that a lot, you know, I think solar is difficult to make work economically without subsidies, I think wind has got a better economic case, I think we\u2019re going to see increased adoption of electric vehicles as we move forward, you know, three years, five years, ten years out but I don\u2019t see that dampening the demand and growth for oil until we got something like year ten in the future.<\/span><\/p>\nDavid<\/b>: So, tell us about your book. The Switch: America\u2019s Global Renaissance. <\/span><\/p>\nDan<\/b>: Sure. So, it basically talks about how US shale has changed, the way we look for oil, the way we find oil and what\u2019s going to happen and it kind of was right there on the press biz before the downturn happened and it, you know, I don\u2019t think the timing is not completely correct but basically, it predicts kind of what actually happened with there being too much supply that causes prices to collapse. In the book, you know, I think it\u2019s a good kind of airplane read and it explains energy. What I found that people find most interesting about The Switch is where we talk about how oil relates to natural gas, relates to coal, relates to electricity and how that mixes together and I think that\u2019s got some good reviews and people enjoy kind of more learning about all how those are puzzle pieces that fit together in our National Energy great. <\/span><\/p>\nDavid<\/b>: I think you\u2019re right. A lot of people really don\u2019t fully understand that and I probably don\u2019t either, frankly, how they all integrate with each other. So, you said it\u2019s an airplane read which, of course, is my favorite, I love being able to read a book in 2-3 hours. So, if you were talking to our viewers, The Income Generation members, baby boomers, either retired or within ten years of retirement, in thirty seconds here, so what is it they\u2019re going to get out of this that\u2019s going to help them better prepare for their retirement by reading the book? <\/span><\/p>\nDan<\/b>: Sure. Well, I think they\u2019re going to get better understanding of the energy market place and a better understanding of where to invest within the energy space in terms of LLPs, exploration and production companies and service companies and then, a little bit understanding ok, what\u2019s behind electricity? Well, it\u2019s some coal, it\u2019s some nuclear and it\u2019s some natural gas and how all that mix works together. <\/span><\/p>\nDavid<\/b>: So, basically, how to manage the energy sector of their portfolio in a better way by looking forward. <\/span><\/p>\nDan<\/b>: Yes. <\/span><\/p>\nDavid<\/b>: Great. Great. Dan, that\u2019s very good. I really appreciate it and tell our viewers where they can find your book. <\/span><\/p>\nDan<\/b>: Sure. So, it\u2019s on Amazon and also, I\u2019d say you can follow me on Twitter @Dankeberhart. <\/span><\/p>\nDavid<\/b>: Alright. On twitter and Amazon. Dan, thanks so much for coming to the show today, thank you. I appreciate it, it\u2019s good spending time with you. <\/span><\/p>\nDan<\/b>: Thanks. Thanks for having me. <\/span><\/p>\nDavid<\/b>: And you stay with us too, we\u2019ll be right back with a lot more here on the income generation. Stay with us. <\/span><\/p>\nDavid<\/b>: As I pointed out a number of times right here on the income generation, the financial markets are driven primarily by emotion. Specifically emotions of fear and greed. And Ben though emotion is a reaction to something, as opposed to the real thing itself, emotions have real impacts and real consequences in the financial markets and as a result, they can have real impacts on your portfolio. What\u2019s happening now with oil price is a real thing, obviously, driven by real factors that we\u2019ve discussed. Demand has increased and supply is doing the least reserves have been sold off at increasingly higher prices and OPEC has cut production. All of that has helped US production for oil actually increase and one can argue that so far, al if those redevelopments have been positive. But they\u2019ve also triggers some negative emotional impacts namely: Fear. Many investors and Wall Street analysts have long oil prices with their overall concerns about inflation and therefore, high interest rates and their potential to stall or even reverse economic progress. Now doubt they have memories of 2008 when higher oil and gas prices were one of the factors blamed for tipping the economic into a recession. The important point for everyday investors is that even if all these fears all overblown, their impact on the markets remain very real. In other words, I believe Wall Street will continue to respond dramatically to the new prospects of high inflation, rising interest rates and rising oil prices. Based on the negative economic impacts that they could have, the fear itself is what could continue to drive market volatility regardless of any real economic impact and that\u2019s exactly how emotion \u00a0creates real consequences in the financial market. If enough people even only say that something is a big deal, whether its interest rates or rising oil prices, then it becomes a big deal. Right now, it\u2019s my pleasure to welcome back my favorite financial adviser from Medling, Texas, who just so happens to have s new book coming out here in the next couple of months, that\u2019s Dee Carter of the Carter Financial Group. Dee, welcome to the show. <\/span><\/p>\nDee<\/b>: Good to be back with you, Dave. Look forward to it. <\/span><\/p>\nDavid<\/b>: So, I want to talk to you first about oil because you\u2019re right in the thick of things there in Middlein, Texas and then, we\u2019ll talk a little bit about your book. So, what do you see is causing this upswing in activity r , upswing in prices and oil and what do you think are the impacts of that? Economically. <\/span><\/p>\nDee<\/b>: Well, in the first place, according to everything that we\u2019ve seen here is the consumption is the major factor right now because the consumption of oil is at a peak right now. We generally don\u2019t see it till about the end of the Summer or the middle part of summer when vacation crew is really but right now, we are literally above what we are this time, 20% ahead of schedule as far as the consumption is concerned, and that\u2019s nationwide, that\u2019s not just here in Texas, it\u2019s all over the country. So, it appears that what we\u2019re seeing is that we\u2019re using more oil, therefore supply and demand, that\u2019s the way that works and that\u2019s why the price of oil has gone up like it has. Also, we\u2019re seeing some cut back in some of the foreign countries as far as their production has been. In fact, I just read yesterday that the apartment base where I live which is a mostly West Texas and part of Eastern Mexico, it will soon become the largest oil producing area in the world. It\u2019s gonna suppress all of the radio with its production very soon. <\/span><\/p>\nDavid<\/b>: And by when are they predicting that? Jut with the next few years or \u2026? <\/span><\/p>\nDee<\/b>: Just a year, a year and a half, we look like that because the shale production out here , we now see there\u2019s rare, you don\u2019t ever see a drying hole anymore. These geologists are amazing and with directional drilling, they go down to a certain depth and and go off all in directions and pick up and they\u2019ll find oil somewhere. So, you\u2019re seeing a tremendous amount of that coming up in action out here right now. In fact, there\u2019s over 450 wells being drilled right now in West Texas. <\/span><\/p>\nDavid<\/b>: So, do you think prices are going to keep going up if you had your best guess just to what a grange it might be for oil prices per barrel? What do you think we\u2019re going to have the range? <\/span><\/p>\nDee<\/b>: I think we\u2019re going to see the price of oil go up until $85 per barrel area with the next perhaps two years. The clients that I have, and I have a number of clients that are in the petroleum business either in the acquisition or the maintain of the service divisions and they\u2019re all telling me that they have contracts right now, Dave. They\u2019re going out two and three years. So, in that kind of activity, you can bet your bottom dollar and that\u2019s the thing we\u2019re talking about, bottom dollars, you can bet we\u2019re going to see more and more of this stuff going on and the price of oil going probably to $85 s barrel . It\u2019s not going to go like it did several years ago when it jumped to 140 almost overnight. <\/span><\/p>\nDavid<\/b>: Yeah, let\u2019s hope not. <\/span><\/p>\nDee<\/b>: No. No. we don\u2019t want to see that happen even here. We\u2019d like to see a steady increase but hit going to that kind of crazy number. <\/span><\/p>\nDavid<\/b>: That\u2019s interesting. It sounds like the United States is doing what they can to increase the supply to make up for reduced supply in other areas which hopefully, will keep your prediction in place will keep oil prices from getting too too crazy. Dee, we need to take a commercial break but stay with us please. And you, stay with us too, we have a lot more from Dee Carter right in the oil center of our county, Middking, Texas, coming back on The Income Generation. Stay with us. <\/span><\/p>\nDavid: <\/b>We\u2019re here talking again with Dee Carter, straight from Middleing, Texas. So, Dee, I want to talk about your book but I have one more oil question. You know for the people that you speak \u00a0with, boots on the ground right there in Middlein, how concerned are they about this trade war and potential for retaliation in tariffs that could hurt us? <\/span><\/p>\nDee: I<\/b> don\u2019t think there\u2019s any concern about that at all, quite frankly. The people that I\u2019ve talked to, the people in the know are really not that concerned about it because we feel like that in the first place, the President has done a great job positioning himself and the country in a position power in that regard. So, we really don\u2019t worry too much about the trade wars. I think probably, most of that has kind of gone by the buy. I think the market\u2019s even absorbed it almost immediately. So- but we don\u2019t have a lot of concern about trade wars in West Texas right now. We really don\u2019t care what they do because we know we\u2019ve got the product that everybody needs. So, the trade wars is not a big factor out here. <\/span><\/p>\nDavid: <\/b>I love it. As a man from Texas says, \u201cWe rally don\u2019t care what they do because we\u2019re from Texas.\u201d I love it, that\u2019s awesome. So now, you hit your book coming out early summer and I\u2019m going to read this because I want to get it right, \u201c<\/span>It\u2019s Now or Never: How to enjoy your life and not let your investments own you.\u201d<\/b> Now, I could put you on the spot and ask you to sing \u201cIt\u2019s now or never\u201d but I\u2019ve done that in previous shows so, I\u2019m not going to do that. Give us the summary of what our viewers, Income Generation members, can expect to learn from reading your book. <\/span><\/p>\nDee: <\/b>Well, what I\u2019m trying to do with the book, and it\u2019s something \u00a0that I\u2019ve had on my heart for a long time to try to do and I was finally really directed to it and led to it by the interpersonal I get from the guys around us with the advisors academy but I wanted to do is just something a little bit different than what I\u2019ve seen in the past and that is not only help people to find the kind of advisor that they\u2019re looking for, I mean, we all of different note in the way we operate in a lot of ways but know what to ask and how to do it, where to go with it and what to expect from that advisor. But not only that, I want them to get the bottom line about what planning for your future retirement really is in a very simple way, if at all possible, and that was a real good key and the idea behind it but we\u2019re really looking at people that have never really done anything with advisors before or perhaps, they used to know. On the other side of the coin, and I really wrote the book for two different groups. People that don\u2019t have an advisor and really have been trying to figure out how to go about doing it \u00a0but also for the advisor that\u2019s out there in perhaps, giving them some ideas about how they can better serve the public. I\u2019ve been in the business now for 47 years and there\u2019s still trying advisors basically with the exception of the Advisors academy, they\u2019re trained the same way they they were 47 years ago when I first got my security\u2019s license m. So, I\u2019m sending them a better way. <\/span><\/p>\nDavid: <\/b>Well, I\u2019m glad to hear you to say that and unfortunately, we\u2019re out of time today but we\u2019ll have you back on and talk more about your book because we are closer to your pub date but us good to write the books to those two audiences because a lot of people today who don\u2019t give an advisor that are doing it themselves, they need to know what to do too. So, Dee, thank you very much. <\/span><\/p>\nDee: <\/b>Yeah, I appreciate it. <\/span><\/p>\nDavid: <\/b>Good having you back and you stay with us and we\u2019ll be right back here on The Income Generation. <\/span><\/p>\nDavid: <\/b>I\u2019d like to thank both our guests for joining us on another episode of The Income Generation, ill also like to thank you our new and returning viewers. You know, last week, we talked about the federal reserves job right now being similar to trying to land an experimental airplane, the plane launched 9 years ago in response to the financial crisis when unprecedented levels of artificial stimulus began to be pumped into the US economy. All that experimentation has brougt us to where we are today, to a brand new age of economic uncertainty. Think about it. In order to land this airplane safely, the fed needs inflation but doesn\u2019t want too much of it too quickly. It wants to continue raising short term interest rates but again, just the right pace so it\u2019s not risk another recession. Meanwhile, Wall Street sanctions for GDP growth to catch up with the overvalued stock market but is also extremely nervous about that growth being slowed or even reversed by factors like high inflation or higher interest rates. And as we saw today, you can have the potential negative impacts of rising oil prices to the least of things weighing on the minds of those on Wall Street. That\u2019s a big change from two years ago when investors appeared fearful of falling oil prices. But that just goes to show you how unpredictable the markets have become in this new age of economic uncertainty. Investors at an retirement age should be aware that the stock market will probably continue to be driven by fear regardless of how all these uncertainties play out. Now let\u2019s face shift, emotions do trigger real consequences in the markets. Sometimes, major consequences like a 30% rally based upon optimism after an election or perhaps to even 60% pull back based on fear. Thanks for watching. If you\u2019re close to retirement and really want to know how to protect and maximize your money, it\u2019s absolutely Essential that you stay informed and up to date and right here is where you can do it on The Income Generation. I\u2019m David Scranton and thanks again, we look forward to seeing you next week. <\/span><\/p>\nIf you\u2019re not using someone who is well trained in fixed income, and you\u2019re born before 1966, it may just be time to break up with that advisor and move on. I would suggest someone who\u2019ll care for you through these important years if your life. If you need help finding someone, call or write us. I\u2019d also like to remind you of the special titled The Income Generation. It\u2019s available fee to you, our loyal viewers online. If you haven\u2019t downloaded your report, pick it up after the show. <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"