AG Bull
Tommy Grisafi creates content for Ag Bull Media.
The Ag Bull Podcast showcases agriculture's top talents in a long-form video format.
AG Bull
Trading Through Turmoil: Oil Spikes and AI Deflation
Tommy Grisafi & Luke Lloyd of Lloyd Financial Group.
We examine the impact of skyrocketing oil prices and their potential effect on inflation, while exploring how AI's deflationary pressure could reshape markets and monetary policy. Financial advisor Luke Lloyd shares insights on navigating today's complex economic landscape, from gold's record highs to Bitcoin's long-term potential.
• Oil prices surged 9% overnight due to Middle East tensions, creating inflationary concerns
• Economic data showing consumer weakness may offset supply constraints, keeping the Fed on track for rate cuts
• AI technology adds significant productivity while potentially creating deflationary pressure through workforce changes
• Current market represents a necessary reset after years of artificially low interest rates
• Gold reaching all-time highs serves as a hedge against currency and system risk
• Bitcoin could eventually reach $1 million per coin as acceptance grows and supply remains finite
• Market outlook remains mixed with job market concerns balanced against potential productivity gains from AI
If you're interested in working with Lloyd Financial Group, visit lloydfg.com or email Luke at Luke@lloydFG.com to book a meeting directly.
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Thank you, Tommy G
Friday everyone. Tom Grisafi, agbo Media, agbo Trading. I'm an AP associate person of Nesvik Trading. Boy, do we have a show for you? We call it the LFG. Let's's go, let's bring him in the show. Mr Luke Lloyd. Luke's a friend of mine. I met him on Cow Guy, our good friends over at RFD. Luke recently opened up his own shop and he is what we call the young gun, the young millennials. But boy, can he sling it. Stage is yours. First subject of the day. Let's not waste any time. One welcome.
Speaker 2:Two if I same time one welcome to. If I say crude oil, you say I say a lot. Actually I say let's freaking go, because it's booming right now. Up what nine percent overnight?
Speaker 2:Um, I with the trade tensions, uh, in the middle east, tensions over there, uh with iran, uh, retaliating over in israel. I think we have to pay attention to this because there's a lot going on here and obviously the story has been for the past couple of months that tariffs are going to be inflationary. But we also saw this week PPI and CPI coming in lighter than expected. So now everyone's scared again because 9% rise in oil prices means that inflation might rear its head back around the corner if these oil prices stay. Also, you got to think about natural gas and all the other fun commodities out there that could be impacted by some of these tensions from a supply constraint standpoint. But look, I think at the end of the day, we don't have to worry that much about these oil prices remaining too high.
Speaker 2:I think we have to look at the economic data when it comes to the consumer, the job market. There is deteriorating data out there. I think that's going to offset any kind of supply constraint that could exist down the road, with these geopolitical tensions remaining whatever high, or whether or not increases or decreases. So I think that economic data is deflationary, disinflationary, which is why I think the Federal Reserve is probably going to be cutting rates very soon. So I know I hit a lot of different things there. But from an asset allocation standpoint and from an investment standpoint, I like natural gas companies over oil. Think Chenier LNG, think the commodity, directly LNG. I would rather own something like that than oil at this point because of the demand created, because of the AI infrastructure, all the cloud, all the spending habits happening on the federal level, on the company level. There's so much spending happening directly going into AI infrastructure that demand is going to increase only over time and that energy need. 50% of the US energy grid is supplied by natural gas.
Speaker 1:Wow, wow and wow. That's a hell of an introduction. For his first time on the show, mr Luke Lloyd. All right, the show will air on Saturday on 614. You and I were trying to record this on Thursday in StreamYard. The platform we love to use was down, which I wanted to tell you. Isn't it interesting how all the Google and so many cloud services went down yesterday afternoon. Techs weren't working and everything else, and then magically, a major war started right Like, like someone didn't have a couple of things blocked in the world because I couldn't get on.
Speaker 2:I thought for a couple of days this week I had some tech issues all around, whether it was email, whether it was some of my softwares. I was kind of concerned some cyber attack, whatever it be was going on. Open AI chat, gpt was down for like for a couple hours, if you remember, on Wednesday. What do you think, man? Was there something bigger to play here?
Speaker 1:It feels like it because I've used StreamYard for two years straight. I've never not been able to get on it, which just shows you. Luke, we get so used to thinking I click a link and it's there and first time having you on, you're probably like these guys don't know what the heck they're doing. You, these guys don't know what the heck they're doing. You're the first person I've ever sent a link to and we couldn't do anything. I'm like sorry, show's canceled, right, bro, and that's just what happened.
Speaker 1:If we would have recorded this yesterday, it would have been more of a somber note. We would have been talking about three rate cuts. I think you could start pulling those rate cuts right out of there. I've been talking to producers hey, corn beans, wheat. Been talking to producers hey, corn beans wheat. All closed on the high. That's a big plus.
Speaker 1:We had some news out of the epa today. Um, it may be a little out of your wheelhouse, but bottom line is the the epa is very powerful and they gave a very favorable ruling towards these fuels. Now, with that, uh, crude oil up 13 percent, up nine dollars last night, that's equivalent saying soybeans up a dollar 40. That'd be a limit limit and half move and, as you know, luke, the energy markets are 10 times bigger than the American grain markets.
Speaker 1:One thing to note because you know you come on before me or after me on the cow guide is that cattle today cattle have had a hell of a run but cattle closed on the dead, low Cattle, feeder cattle, live cattle, everything else. And when you talk about the American consumer being a little pinched, I placed an ad. You're young but I placed an ad on Indeed this week, first time I've ever used Indeed. Looking for a podcast producer Probably my brother Joe down there is like what? I'm out of a job but I'm in Nashville and I just casually placed an ad Podcast producer. I had 35 people respond to me in 24 hours. I had to take the ad down.
Speaker 2:You're looking for something. Yeah, that was not happening a couple years ago.
Speaker 1:No. And so there's a gentleman coming in today and I said can I ask you something? Why is everyone applying? And he said AI is kicking our butt.
Speaker 2:And that's only deflationary. And this is why there was an article came out today. A reporter contacted me and we talked about my kind of outlook going forward and that's why I taught utilities and long duration treasuries and everyone says, oh Luke, no, because you know this ridiculous spending, because of the big beautiful bill, or the ridiculous spending happening in the government at all facets of the levels, of the levels that's going to help or actually downgrade our debt, which we got the debt downgrade a couple of weeks ago from the AAA rating. I'm in the camp that only because of AI and also because of the slowing economy, tariffs, whatever it be, oil going up all of that's going to be offset by AI, deflationary AI, and also because of the slowing economy. And when I say deflationary AI, deflationary AI, and also because of the slowing economy. And when I say deflationary AI, the whole point of AI is to make companies more efficient. So systematically, unemployment has to go up. And if unemployment goes up, what happens to the consumer, to those jobs, when they lose their jobs? Or there's people, when they lose their jobs, they have to pull back their spending habits. So this is around the corner.
Speaker 2:I mean, I use AI every single day, and I'm not kidding. It probably adds 60 to 80 hours of productivity to me and my business every single week. Just me myself using it, not my intern, not anyone else me directly. It's basically making me three times as more productive. So it's going to save you know.
Speaker 2:Otherwise, a couple of years ago, before chat, GPT and everything, if I was to start this business, I'd probably have an extra 150, $200,000 of extra expenses per year for assistance or people helping me on social media or doing whatever it be. My newsletter that I have every single morning, my emails, my you know anything, my notes that I do for TV, whatever it be. It helps me out on a daily basis. All my content doesn't come directly from AI, but it definitely aids my mind and it actually gets me thinking a little bit differently, which helps, because a lot of people pigeonhole themselves into thinking just one way. If you have AI pumping out all these different philosophies and perspectives, it helps you think. So there's absolutely that initiative and that deflationary aspect will happen when unemployment rises because of AI and because it makes costs of doing business cheaper. That's all deflationary, which is why, again, I'm long, long duration treasuries for my clients and I'm also long utilities because of a dual deflationary aspect and the energy demand with electricity.
Speaker 1:Speaking of your clients. We fast-centered the show. Who are you? What do you do? You got this new gig.
Speaker 2:I'm sorry, I didn't introduce myself.
Speaker 1:No, no, no, but you and I have each done three, four other shows today, so we're like, just hit, play, we'll figure it out. But who are you, what are you doing and how are you helping people?
Speaker 2:Yeah, great question. Yeah, great question, I guess. To sum it up, I'm from a small town in Ohio, blue-collar area, called Martins Ferry, ohio, southeast Ohio, blue steel mills, coal mines that's how I grew up and my entire life I went to a small school, made the connection that actually led me to New York City to intern at CNBC. I was the annoying intern that shook hands with everyone at the stock exchange trying to introduce myself. That's where I met my ex boss, mark Tepper. He was a phenomenal mentor to me in a lot of ways. But really, growing up, you know, I saw a lot of people working their tails off Right, and that mentality, that blue collar mentality, was always instilled in me. And I'm like you know what you know I've got. I got married in November. I'm thinking about having kids. You know, before I have kids, this is the time to take any kind of risk and bet on yourself and, you know, risk it all to lose it all, potentially Right. So I decided in that moment that you know, this is the time for me to create my own legacy and try to create my own purpose and add value to my clients. So that's why I just connected.
Speaker 2:A few months ago, I started my own group, lloyd Financial Group, and so far it's been rocking and rolling. I think people are pretty happy and now it's just about being genuine, being real and being authentic. I think this industry is full of a bunch of finance bros that are chest out, egotistical people, and that's just not where I come from. That's just not who I am and I think my, I hope my clients appreciate the authenticity and I, I, I, I always preach you know, dream bigger, sleep better. I'm here, I don't sleep, so I'm here, I don't sleep, so my clients can sleep. I'm here to be that comforting factor in a lot of ways, and I'm only a text message away. Communication that's another thing missing in this industry. A lot of time is people collect fat paychecks and sit back and don't really communicate or talk to anyone or do a lot of work. So I'm here working day in, day out, because this is my livelihood now on the line.
Speaker 1:And that's a great point that you know with AI is great and that we can auto text, auto email. Out of that. How about just pick up the phone and call someone old school right and say here's what we have. Dow's down 800. You wanted to allocate some money. Here's what I like you got what two? Two girls, right, two kids, yeah, two daughters, yeah, 23, two daughters I mean, you see, firsthand, I mean this generation.
Speaker 2:I'm technically the oldest gen z, uh, being 28 years old. So I was like the first one cut off between millennial and Gen Z. I mean, I think the most dangerous mindset and the most dangerous skillset I mean that anyone can have, that's a Gen Z. It's just people skills. Look, look people in the eyes, shake someone, someone's hand, like that will go farther than any kind of education, because these screens, these laptops, these computers, phones, it's screwing people's minds up. So it's funny how, like you said, picking up the phone, cold call, like whatever it be the old school. It's funny how I think we're transitioning back to the old school because we're so content, fatigued and we're so drained by our phones almost every day.
Speaker 1:Yeah, I started. We're in a process of sending clients just one of those big Yeti tumblers that says Agbo and Nesvik and stuff, and I got the nicest phone calls as people are like I got your tumbler and I'm like, oh yeah, that's right, I sent those out, right it's the little things in life.
Speaker 2:They were grateful.
Speaker 1:And two, I was shocked at how much one Yeti tumbler costs.
Speaker 2:So I will send you one. That's why it's on my budget. Yet my clients aren't getting Yetis this year, maybe next year.
Speaker 1:I'll send you one. I can't send you two. You and your wife will have to share. What else would you like to talk about? This is recorded. There's no length. You and I are so used to doing when I fill in for Scott. Okay, luke, you've been great. We got to go, but we don't have to go anywhere.
Speaker 2:How do we get people? Question is for you. You know what is your take on and I hate to always talk about the Fed, but no one really talks about the Fed much anymore, so let's bring it back in the conversation. Sure, you know, talking about the three rate cuts that were projected before this inflation data came in, is the Federal Reserve, in your opinion, late to the game? They were late to the game on the rate hiking cycle. Are they late to the game on the cutting cycle right now?
Speaker 1:No, because there are still some things that are inflationary, and I think one of the most you know. I don't know if you know this, but I stood in the 10-year note in the 30-year bond at the Board of Trade, so I've traded a lot of treasuries, yield curves etc. It would be really, really, really embarrassing to cut rates and have a surge in inflation. That would be like having a fire put out and then thinking it's put out, turn your back on it and then you have a raging fire again. You don't want that, so we could stay higher for longer. We're going into more of a period of normal. A bunch of people your age are complaining and whining like little kids because you can only get a mortgage at 7% and the whole rest of the world spent their whole life getting mortgages at a heck of a lot higher than 7%. We are in a reset. It is affecting prices.
Speaker 1:I am watching the real estate market. I have Marco Island, florida set up on Zillow and I had to disconnect the notifications because I'm getting 20 notifications today per day of properties dropping. We were overinflated. Insurance has exploded. The Airbnb things popped. People are losing a few jobs here and there. Like I told you. Earlier, I placed an ad on Indeed. I was overwhelmed with people applying. Things are changing, but we are having a reset and when we give away as much money as we gave away during the COVID period and then the wealth that was created during the boom in particular agriculture during the Ukraine period we distort things. We're just gently undistorting that.
Speaker 1:So the fact that the stock market was doing as well as it's been doing with this higher interest rate environment is absolutely amazing. And there is an added benefit. People, grandmas and grandpas and conservative people can just put money in a CD or a money market account. They don't have to go full blown in to NVIDIA. So if you have a million dollars $10 million, probably not what you want people to be like go ahead and put it in a CD. Oh, by the way, I'm Luke from the financial group, right, but at least they have that choice from the financial group, right, but at least they have that choice. And so when interest rates were artificially kept low all that time, it forced people in the stocks. Now we have choices, have some stocks. Hey, speaking of stocks, let's talk about a commodity that's been absolutely freaking on fire gold. That is a choice. What do you know about gold?
Speaker 2:Yeah, I think it's gonna continue, continue to hit all-time highs. I mean, I think this you talk about reset. Let's focus on that word reset. You go back throughout history.
Speaker 2:You have three main reasons why a country, number one country like the United States, fails it's because of extreme debt issues which we kind of have. We're above 120% debt to GDP, which is where you're usually at during war times, Like we were during World War II, but we're not in the war, right? The second thing is that the rising nation like China coming over is a rising economic and social factor that's infringing on another country. So that's the second reason. The third reason is you lose your currency, and that's never a good thing. If you lose your reserve currency, that's never a good thing. If you lose your reserve currency think about the Great Depression times two or times three.
Speaker 2:So that reset button feels like it's kind of around the corner, not saying this year, next year, 10 years, 20 years I'm talking maybe in my towards the end of my lifetime, maybe my kids lifetime.
Speaker 2:We have to be somewhat concerned about that. In that case gold becomes a hedge, because nothing's better than that precious metal that you can actually have in your physical pocket Actually a lot of my clients own gold, and I'm not talking GLD, I'm not talking the ETFs out there, I'm talking physical gold because they just feel comfortable knowing they have five to 10% of their money in their house at all times, hedging against the system. Because these times I mean I know everyone's got the doomsday in their lifetime they feel whether it's world war ii that felt like doomsday cold war era. Um, everyone kind of feels that way in their lifetime but there's actually data now that suggests that and ray dalio, specifically in his book principles of changing world order a phenomenal book talks about the changing world order and how we have to be concerned and worry about that. So I know that's a long-term perspective.
Speaker 1:No, no, no, I think it's going to remain, but wait, there's more, there's more. My battery went out of my camera, so full camera on. Luke, I have an extra battery. Joe, you're going to go two more minutes solo. I'm going to change my battery. You're going to talk about Bitcoin and what is happening with the structure of Bitcoin, and I'll set you up. I'm going to change my battery. This is fun because you can handle this. You can go for a half hour. I could go take a nap and come back. You'll still be talking.
Speaker 2:Bitcoin is interesting, man. I actually I've had a lot of clients ask me about that Bitcoin spent over 30 days, above a hundred thousand, I'm going to change my battery.
Speaker 1:The stage is yours. I'll let you know when I come back. Be right back, go ahead.
Speaker 2:I have a personal connection to Bitcoin. I actually bought my house because of Bitcoin. I should say I was able to afford my house because of Bitcoin when I was 23 years old. So what is it? Six years ago, I bought my house and I had to sell my Bitcoin to put the down payment down the house. But I bought it back in 2017 because the libertarian in me says you know the intermediary banks, governments controlling money. It's never a good thing and you have to personally own your money, which is why people like gold, but also why they like bitcoin, because it cuts out the intermediary.
Speaker 2:Look at the end of the day, uh, bitcoin is going to be here, probably to stay, for any point in the foreseeable future. It's going to go up. It has to go up over a long duration of time, when you're talking 10 or 20 years, because, as the dollar, as you print more money, inflation whatever happens, as long as you have any inflationary pressure, bitcoin, as long as it's not nominated in dollars, is going to go up. And the infinite, the finite supply of Bitcoin simple supply and demand metrics means it's going to go up. And the crazy thing is it's a $2 trillion market cap. I mean, it's still smaller than NVIDIA, microsoft. I mean it's smaller than these companies. And if you look at gold's market cap at $20 trillion, I mean it's smaller than these companies. And if you look at gold's market cap at $20 trillion, I mean it's only one-tenth the size of gold. We could 10X from here, which puts it exactly at that million-dollar coin target. Putting that $20 trillion market cap, I think that's going to happen. I mean, the most ironic things that happen tend to actually happen, the most likely. So the ironic thing would be, one day you see on the news headlines that Bitcoin crosses above gold's market cap. So I do think that's on the horizon.
Speaker 2:And the fact of the matter is is that it's becoming more acceptable. I mean, when I have my 75 year old clients asking me what Bitcoin is, I mean it shows you how much more prominent it is in society. You know how much it's talked about and that simple talking about it means that there's going to be more demand. And then you have the ETFs that just came out a couple of years ago. That's going to increase demand. So simple, supply and demand. It's.
Speaker 2:In my opinion, bitcoin is the easiest asset class commodity whatever you want to call it to security, to trade because it's all supply and demand. It doesn't have any earnings, it doesn't have any potential windfalls to it, except for government regulation, but it's so big right now that the government can't ban it because if they ban it they wipe out trillions of dollars in money and that makes a ton of people upset. So, talking about political issues, no one wants to vote on policies that gets them out of office and this is one of those things. You wipe out a couple trillion dollars of wealth that's going to get you out of office. So it's here to stay. It's going to go to a million bucks a coin.
Speaker 2:I sold just personally. I will tell you straight up. I sold my families. I sold my Bitcoin at $70,000. If it gets back below 70, I'm looking more actually at 50. I'll scoop it back up around $50,000 a coin. I'm not buying it right here because it is a speculative asset and, in my opinion, we do have some weakening economic data on the horizon. I think it's going to partake with any kind of downside in the market, kind of like it did during the 20% tariff sell-off just a few months back.
Speaker 1:That was awesome and I am back with a fresh battery. I don't know if NASCAR is looking for help, but I heard and I go. What was that noise? I look, I go. Oh yeah, I've been recording so much I have no battery. Hey, bull bear debate. Here we go. Luke Lloyd Bull Bear, give us some reason to be bearish the stock market and then follow up with why you're bullish the stock market. If you can be both, are you allowed to talk about both sides?
Speaker 2:I think it's our job to do both. It's a phenomenal question. I like this kind of idea because there's a lot of bearish and bullish signals right now. The bearish signals are that the job market's kind of on the brink of collapsing or breaking in some ways. Because of AI, because of weakening consumer spending data, because of debt issues you can cite a lot of different things the job market kind of looks like it's on the horizon of breaking, maybe because of higher interest rates as well, right. So I'm paying attention to that. That's one definitely reason you want to pay attention to.
Speaker 2:And then the second reason is you know this China-US trade war. I mean, at the end of the day, we can have good earnings here in America from a corporate standpoint, but if you're the number two nation in the world, do you help the number one nation get ahead even more when your economy is worse off than the number one nation Ever since, really, the Evergrande situation a couple of years ago? No, you bring them down with you. You hurt them, right. So, even though all we hear in the news cycle is good things recently, I think that we have to really pay attention that this can be dragged out longer than expected there's probably gonna be some negative news lines here soon, and that could.
Speaker 2:We saw how quickly the market dropped on the initial tariff news. We could see another 10 or 20% decline. So that's the bearish. The bullish side is this U? S trying to trade deal somehow does happen very quickly. Tariffs kind of come off and there's really a huge economic boom in some ways. From the stock market rallying standpoint, maybe the job market doesn't crack. Maybe AI actually adds so much productivity to the system and employees actually learn how to aid it beside them and they actually don't get replaced by it, they just learn how to become more productive themselves. If that happens, I mean we could see extreme amount of returns in the stock market because the AI boom is actually just a big wealth transfer to the top. So those that own assets are actually going to do better.
Speaker 1:Oh, that's a mouthful. All right, mr Luke Lloyd, if someone's interested in working with you or just learning more or just having a conversation. By the way, last uh, my summer internship, my summer intern from last year contacted you. Young Sawyer Satram said I spoke with Luke Lloyd. He goes. Yeah, he spent all types of time with me. Boy, that means a lot when a kid can graduate college and call a kid a guy like you and ask some questions.
Speaker 2:I'm always around.
Speaker 1:He did just receive a job in doing similar to what you're doing. All right, luke. How do people get a hold of you?
Speaker 2:I was just in his shoes seven years ago, right. So I mean six years ago, right. So it wasn't that much long ago that I was doing the calling around to try to help someone out. So I'm always there to help someone out. And the way to contact me email Luke at LloydFGcom or just go to my website, lloydfgcom, and you can book a meeting with me directly on there. I think myself is accessible. Again, I'm a real person. I'm not a behind-the-screen person that's trying to portray myself and put my chest out being a little too arrogant.
Speaker 1:I'm just trying to have good conversations, real conversations with real people. Well, when you're not on the Apple media or RFD, I occasionally see you on Fox and some of those others. That's fun. Let me ask you something, and this on a serious note, because we have time. It's funny because there's no one telling us in our ear we got to rap. When you go on a major network like that, on that set, is it any different than anything else? Is it more intense, less intense? I mean, is it just pretty much the same thing, just a bigger?
Speaker 2:I would say it's the same exact mindset, same exact thing. I mean, I will be honest, when I first started doing national tv whether it was fox, cnbc, rft tv, I mean anytime you do any kind of national tv, that first couple times, or even that first year, you feel like you're gonna have a heart attack. I would. I would be lying if I didn say that. So I had to learn how to control my emotions. But I'm going to go to New York City here in about a week and a half and I'll be on set with. I'll be co-hosting Marie Bartiromo's show in the morning. I'll be co-hosting Big Money's show between 12 and 2 on, I think, the Tuesday, the 24th or 25th.
Speaker 2:You'd actually be surprised how small the studio sets are. You would think that they'd be huge, but they're actually a lot smaller than you expect. But again, it's actually more fun being in person. I will say that, being behind the camera, that's all I knew for three years, because from 2020 to 2023, no one was going on set, it was all virtual. I actually just did my first in-person appearance back, like in 2023. So it's been two years now and I will say it's a world of difference. Being on set is a lot more personable and it's a lot more fun, to be honest I love it.
Speaker 1:I love when I get the host for scotty and you come on. I look at the sheet and I go luke this will be fun, like I don't, whatever how fast my heart's beating it. It goes down 10 beats when you're on, all right.
Speaker 2:I feel the same way, my man. I mean, we're going to see each other soon.
Speaker 1:I'll be down in Nashville you have that trip coming up in July.
Speaker 2:I'll be coming down. You're going to help my brother and I. We're going to be brainstorming some things together.
Speaker 1:Absolutely. There's about 10 things you said you could help AI. You're like you a couple old dogs, a couple new tricks. All right, luke Lloyd, we call this the LFG Agble LFG with Luke Lloyd. What does LFG mean? Someone's going to think it means something else. What is LFG?
Speaker 2:Well, it means a lot of things. You can interpret it away whichever way you choose.
Speaker 1:I'm going to go with Lloyd Financial.
Speaker 2:Group. I will say that that's one of the reasons why I did pick Lloyd Financial Group, because that acronym is very prominent and, frankly, I'm a pretty bold and outspoken person, so I think it fits me pretty well.
Speaker 1:Well, let's go. Let's go, Lloyd. We'll see you next week and thanks for coming on the show. I love going long form. I look forward to seeing you in Nashville, joe and I will come visit you in Kentucky and, yes, I have a place for you here when you come to Nashville, you and the summer intern, and I can't wait to learn from you. You're going to have a wonderful career. Thank you, and I will see you next week, my friend. Roll the tape, Joe.
