Program:  Cavuto Coast to Coast
Date:  6/23/2021
Station:  Fox Business News
Time:  12:00PM

NEIL CAVUTO:  You know, we focus on energy prices, what’s happening, because the last two big inflationary spirals we had dating back to the early 1970s and again in the late 1970s, they started with oil. Now, those of a certain age might recall those long gas lines in 1973, with the first big OPEC oil embargo that was under Richard Nixon, started with oil, extended to a whole lot of other stuff after that. Then a few years later, when OPEC was at it again. But we were hit much harder that second time because that quickly went from the pump to pumping up prices of almost everything else and then slowing things down as interest rates were spiked. And all of a sudden we were dealing with a slowing economy with higher prices, what they famously called stagflation. Could that be happening right now? Most experts say no. But again, the experts were saying that in both of those crises. Let’s go to Connell McShane. He’s following all of this, as is Scott Martin, at Kingsview Asset Management. You know, it’s interesting, Scott, when you look at the history of inflation and some of the more serious spikes we had, it did start with oil. It extended to other areas. Now, there were other foreign developments to keep an eye on. To be fair and to be sure. But again, oil at the center of it. What do you think?

SCOTT MARTIN: Yeah, and a lot of foreign reliance back in those days, Neal, which I do remember because I read about them very extensively, didn’t have to live through them, thank goodness, at least for the most part. But, yeah, I know just how to throw that out there, just to remind you. But a lot of the foreign reliance back in those ages, let’s say, Neil, we’re relying on other foreign countries to provide that oil and that supply to us nowadays, at least depending on where the administration stands or let’s say what administration is in power there is less reliant on, say that that foreign relationship. The other issue, though, if you just look at production in general of things that are out there that we use every day, oil is such a big part of so many things that go into what we use and what we have on our daily lives. So when you have a spike in oil prices, like we’ve really seen frankly, over the last several months, it does still bring up that fright of some of those days in the 70s when oil prices went up markedly and that affected final prices of goods at the consumer level.

CAVUTO: You know, you think about it too Connell, we have much faster markets, you know, heavier markets that can change on a dime. A lot of times that. So the reaction can be swift and it can it can also be, you know, headaches. And I’m just wondering now, localized as this is on the energy front, some of the other pressures, for example, on food related items have eased a tad, not a lot, but at least a tad when you’re out on the hustings and you’re going around the country. How big a factor those higher gas and energy prices?

CONNELL MCSHANE: I think for now they are a big factor and one of the many areas that we see rising prices, I think that same book that Scott read about the 1970s, though, would say that when you look back on that time, you also realized that there were mistakes made on the policy front and we’d have to rely on the Federal Reserve under Jay Powell to make the same sort of mistakes that the I guess, the Arthur Burns Federal Reserve made back then. And Powell, as he’s been speaking in recent days, has been adamant that they’re they’re going to avoid having history repeat itself. I think the one thing right now and some of those numbers that we just flashed up a moment ago speak to this argument that I think is the reason why the so-called experts don’t see this as a huge problem yet. You you can really make a logical argument that this is a temporary spike we’re seeing in prices. I mean, think about you know, we’ve been traveling a lot for reporting on a number of stories. It’s tough to get a car right now, car rental. So there’s a shortage there. There’s a shortage, certainly, of workers that maybe it gets resolved later in the year. The shortage of computer chips that we reported on over and over. So some of the shortages that we’re seeing will likely resolve themselves over time. So the idea of the higher prices in the energy market spreading all over and leading to a long term, higher prices across the board does seem to be less likely. And I think that’s what Jay Powell is talking about. No, please write.

CAVUTO: You know, we’ve been also following Bitcoin, that’s a proxy if things get a little tenuous or a little dicey that people have fled to Bitcoin as they fled the gold. Mark Cuban comes along and says, Scott, that as things stand now, Bitcoin is better than gold. Now, he’s a pretty successful investor in his own right, so he’s not giving up on it, even with the whipsawing. What do you make of that?

MARTIN: If you’ve got Mylanta handy, yeah, bitcoin is OK. I mean, Bitcoin is crazy. I mean, look at some of the movements overnight, Neil and Bitcoin in the last few days, it’s been wild. We like gold better just because it’s less volatile. I believe it’s still a little bit more reliable from a price standpoint. But look, if you’re up for some of the volatility that that stands to to reckon in Bitcoin, great, you just got to buy on some of these dips. I mean, you really have to buy when it’s darkest before dawn in Bitcoin. But it is, to your point, a declaration as kind of gold is against government policy. In this case, all the printing that’s going on, all the spending that’s going on in D.C. tax policy coming down the road here, asset classes like Bitcoin. like Ethereum like gold, in our opinion, which we own. Those are asset classes to hold in your portfolio as a subsequent hedge to further erroneous government policy. That’s sure to come down the road here.

CAVUTO: You know, this battle, you know, back and forth with the Bitcoin bulls versus the bears, obviously a great deal is predicated on on having it available, having it readily available. And I guess, you know Connell, when China crack down on mining and even crack down on countries that that do mine it and explore for it, I was just thinking here, well, you might not be able to get your hands on anyway, but I would always think that that would help the underlying Bitcoin arena, all the crypto currencies, and that it would be a limited amount of supply that for which is a considerable amount of demand. I haven’t seen that part work out, though.

MCSHANE: It might, though, over the longer term, right? I mean, because the laws of supply and demand shouldn’t change, but it has been interesting to see what’s been going on in China. And that’s certainly, I think, part of the battle we’ll see back and forth, maybe not as reported as it should be kind of geopolitically between the United States and China over these these crypto miners. And that will probably continue. I mean, broadly speaking and Scott’s the the investment guru among us, I don’t even attempt to play one on TV. But having the idea of having at least part of your portfolio in some alternative investments doesn’t seem so crazy, depending on what your risk appetite is. And, you know, you can make a decent return and in Bitcoin is not going away. So the idea of having some portion of your portfolio there as opposed to all of it or taking huge chances still doesn’t seem to be too crazy to me, especially if I end up being right on that supply demand front over the long term.

CAVUTO: I like to put all my kids education money on the line with Bitcoin just for the hell of it. All right, this works out, kids. It’s going to be great if it doesn’t. Well, your mom and I are going to have a party. But guys, don’t go away too far. I want to touch on you with what’s happening right now globally.