[SPEAKER_01]: Make no friends in the pits and you take no prisoners.
[SPEAKER_01]: One minute, you're up half a minute and soybeans in the next bull.
[SPEAKER_01]: Your kids don't go to college and they've registered mentally with me.
[SPEAKER_02]: The revolution starts now, starts.
[SPEAKER_00]: We have to pass the bill so that you can find out what is in it.
[SPEAKER_00]: Card does machine back off.
[SPEAKER_02]: You are about to enter a Peter ship show.
[SPEAKER_02]: If we lose freedom here, there's no place to escape to.
[SPEAKER_02]: This is the last stand on Earth.
[SPEAKER_02]: The Peter ship shall reside.
[SPEAKER_00]: I don't know when they decided that they wanted to make a virtue out of selfishness.
[SPEAKER_02]: Your money, your stories.
[SPEAKER_02]: Your freedom.
[SPEAKER_02]: The Peter ship shall.
[SPEAKER_01]: Welcome to another Sunday night live episode of the Peter Shift Show podcast.
[SPEAKER_01]: Well, the big news of last week was the Jackson Hole
[SPEAKER_01]: speech by Fed Chair Jerome Powell.
[SPEAKER_01]: And I mentioned that on the last podcast I did a couple of days before that speech with my partner at shift sovereign James Hickman.
[SPEAKER_01]: And we talked about how the Fed was preparing or how the Trump administration was preparing to hijack the Fed.
[SPEAKER_01]: And I thought based on what was happening
[SPEAKER_01]: that Powell would likely make a concession in that speech that he would indicate that the Fed was indeed ready to cut rates.
[SPEAKER_01]: And that is exactly what happened on Friday.
[SPEAKER_01]: Powell gave probably one of his bleakest assessments of the state of the U.S.
[SPEAKER_01]: economy that I can remember him giving in quite some time.
[SPEAKER_01]: And I think that his pivot reminded me of the movie, Cool Hand Luke.
[SPEAKER_01]: I don't know how many of you are old enough to remember that movie.
[SPEAKER_01]: If you haven't seen Cool Hand Luke, if you don't get anything out of this podcast other than that, you're going to go watch the movie, Cool Hand Luke.
[SPEAKER_01]: then at least it wasn't a waste because it was a great movie starring Paul Newman and George Kennedy and Paul Newman is the lead the title role he plays Luke and there's a scene in that movie because Paul Newman's character keeps trying to escape.
[SPEAKER_01]: He went into prison.
[SPEAKER_01]: He was on a chain gang down south and he's trying to escape this prison.
[SPEAKER_01]: And the boss of the prison needs to get Luke's mind right.
[SPEAKER_01]: And he basically tortures throws him in the hole, beat some until he finally breaks Paul Newman's character.
[SPEAKER_01]: Although he doesn't really break him.
[SPEAKER_01]: I mean, although I don't want to give away the whole movie, you got, you know, you got to see this movie.
[SPEAKER_01]: But anyway, but when I saw Powell,
[SPEAKER_01]: Give that speech.
[SPEAKER_01]: It reminded me of that scene in the movie.
[SPEAKER_01]: And it appeared to me that just like the boss of the prison, Donald Trump succeeded in getting Jerome Powell's mind right in that his mind is now thinking the way Trump wants it to think.
[SPEAKER_01]: Not that it's right in his sense, you know, right or wrong.
[SPEAKER_01]: Trump did not like the way Powell's mind was thinking, because he didn't want to cut rates.
[SPEAKER_01]: And so he put a lot of pressure on him.
[SPEAKER_01]: He basically beat him up and beat up other FOMC members until they finally act we asked, right, capitulated and they got the mind right.
[SPEAKER_01]: And so now that Powell has his mind right, we're going to get rate cuts.
[SPEAKER_01]: I think I would be pretty surprised
[SPEAKER_01]: if we didn't get a rate cut in September now.
[SPEAKER_01]: And I think the markets will be surprised in a negative way if we don't get a rate cut in September.
[SPEAKER_01]: But in order to lay the foundation for the September rate cut, Powell basically had to talk about how weak the economy was.
[SPEAKER_01]: And as I just mentioned, I've never really seen him deliver such a sober assessment
[SPEAKER_01]: of the economy.
[SPEAKER_01]: Now, I mean, that couldn't please Trump because Trump is out there talking about how great the economy is, how it's a booming economy, how it's the hottest economy in the world, right?
[SPEAKER_01]: But the reason that Trump, I mean, the reason that Powell says that they need to adjust their policy is because we have a weak economy.
[SPEAKER_01]: In fact, Powell went out of his way to compare the economy today
[SPEAKER_01]: to the economy one year ago right now he didn't specifically say the Trump economy and the Biden economy but when he's talking about conditions today versus a year ago well a year ago Biden was president so when you compare the economy in July or August, twenty twenty five to the economy as it stood in July or August of twenty twenty four
[SPEAKER_01]: you're making a, you know, direct comparison between the Trump economy and the Biden economy.
[SPEAKER_01]: And Pal said that there can be no doubt that the economy today is weaker than it was a year ago.
[SPEAKER_01]: Genie Peagre, the fact he mentioned it was about half.
[SPEAKER_01]: According, I think to his assessment, he talked about how it was running at a little over two percent a year ago, and now it's slowed down to one percent or just over one percent.
[SPEAKER_01]: So in other words, the economy is growing at half the pace that it was growing at under, under Biden.
[SPEAKER_01]: But not only did he talk about the weakness in the economy, he talked about the strength of inflation.
[SPEAKER_01]: And he said inflation is above target and moving in the wrong direction up, not down.
[SPEAKER_01]: And he mentioned how inflation today, the rate today is higher than the rate a year ago.
[SPEAKER_01]: So the Fed is not making progress.
[SPEAKER_01]: In fact, it's losing ground in the battle against inflation.
[SPEAKER_01]: So according to Powell, the economy is weaker and inflation is stronger under Trump than it was under Biden.
[SPEAKER_01]: Now, again, Trump is telling everybody that we got the greatest economy in the world now, but that a year ago, under Biden, we had the worst economy in the history of the country.
[SPEAKER_01]: And of course, he claims that the whole thing turned around miraculously because he was elected.
[SPEAKER_01]: And now we have the strongest economy, the hottest economy in the world.
[SPEAKER_01]: But the economy that we have today, at least as assessed by the Federal Reserve, is weaker, weaker than it was.
[SPEAKER_01]: under Biden except for inflation which is stronger.
[SPEAKER_01]: So in other words, we got stagnation.
[SPEAKER_01]: I mean, if we didn't have stagnation under Biden and I thought we did, but if people weren't sure what we definitely have it now, because the economy has gotten weaker and inflation has gotten stronger.
[SPEAKER_01]: But what does that say about the Trump economy?
[SPEAKER_01]: Because if you're going to judge the Trump economy by Donald Trump's own standards,
[SPEAKER_01]: if according to Donald Trump, we have the worst economy ever under Biden.
[SPEAKER_01]: And now it's worse under Trump.
[SPEAKER_01]: Well, then today's economy has to be the worst economy ever because if it's worse than it was under Biden, well, if Biden was the worst ever and he's now beaten at for badness, right?
[SPEAKER_01]: This is the worst because not only is growth weaker, but inflation is stronger.
[SPEAKER_01]: Now, the reason that Paul gave, or the indication of a rate cut, was he said that now,
[SPEAKER_01]: We have two, you know, we have these two mandates.
[SPEAKER_01]: We've got employment and inflation.
[SPEAKER_01]: He said the risk to employment is now down, right?
[SPEAKER_01]: That unemployment is going to go up.
[SPEAKER_01]: So employment, the employment risk is to the downside.
[SPEAKER_01]: And he said the inflation risk is to the upside.
[SPEAKER_01]: And he admitted that that was not a good place to be, but that's where we are.
[SPEAKER_01]: But then he said that our policy rate is still restrictive.
[SPEAKER_01]: and he indicated that given it could go either way, right?
[SPEAKER_01]: He's basically saying that it's a coin toss.
[SPEAKER_01]: He doesn't really know.
[SPEAKER_01]: And so we have risks to both sides of the mandate, yet we have an interest rate, a policy that is still restrictive.
[SPEAKER_01]: And then he said, which means it may be time for a change and may be meaning it is time, right?
[SPEAKER_01]: That's why I say this.
[SPEAKER_01]: And so what he's saying is, if we really don't know what's gonna happen, right?
[SPEAKER_01]: We should be neutral.
[SPEAKER_01]: So we shouldn't have a policy that skews in either direction, because we really don't know what the problem is.
[SPEAKER_01]: Is it going to be a rise in unemployment or a rise in inflation?
[SPEAKER_01]: So I think what Powell was telling the markets is it's time to shift years to neutral.
[SPEAKER_01]: Wherever the hell that is, right?
[SPEAKER_01]: But wherever it is, according to Powell, it's lower than where we are right now.
[SPEAKER_01]: So in order to get from restrictive to neutral, we got to cut race.
[SPEAKER_01]: And so that's what's coming.
[SPEAKER_01]: But he didn't indicate how far above neutral we are.
[SPEAKER_01]: Are we twenty five basis points, fifty basis points, other basis points, and how quickly does the Fed want to get down to neutral?
[SPEAKER_01]: Now he didn't mention anything about the balance sheet, about quantitative tightening.
[SPEAKER_01]: But if the Fed is still doing quantitative tightening, and they feel that the risks are to both sides of their mandate equally, then I think that we're probably getting pretty close.
[SPEAKER_01]: to the official end of quantitative tightening.
[SPEAKER_01]: Remember, they've already tapered it off.
[SPEAKER_01]: So they're not, you know, selling as much of their balance sheet as they were.
[SPEAKER_01]: But I think the next step is going to be to at least pause it.
[SPEAKER_01]: And of course, that's going to be the precursor to a return to quantitative easing, which is coming.
[SPEAKER_01]: You know, I thought we probably would have got quantitative easing already, but you know, the Fed hasn't had to do that.
[SPEAKER_01]: I believe they're going to do that when interest rates really really move up.
[SPEAKER_01]: Now, also the interesting thing about
[SPEAKER_01]: house inflation assessment, and why he believes, or at least why he stated, who the hell knows what he actually believes, but what he said to everybody, was that the reason that inflation is higher than it was a year ago, and the risks to inflation continuing
[SPEAKER_01]: to rise, right?
[SPEAKER_01]: He blamed it on tariffs.
[SPEAKER_01]: Pretty much all of it.
[SPEAKER_01]: All of the extra inflation was blamed on tariffs.
[SPEAKER_01]: Now, he also criticized the immigration policy and talked about how that might impact employment and inflation.
[SPEAKER_01]: So he was critical of the current administration's immigration policy and of the tariffs.
[SPEAKER_01]: So even though
[SPEAKER_01]: how acquiesced to the pressure by the Trump administration to indicate that rates are coming down.
[SPEAKER_01]: He did it in a way to try to discredit the president and his economic policies by saying the very reason that we're cutting rates is because the economy is so bad.
[SPEAKER_01]: and that even though inflation is above trend, and we would normally not be cutting because the economy is so lousy, we're gonna cut anyway, even though inflation is above where we thought and the risk is that it's gonna go higher.
[SPEAKER_01]: And I think that if we get a downturn in employment, simultaneous to an uptick in
[SPEAKER_01]: inflation.
[SPEAKER_01]: The Fed is now going to have to choose which mandate it feels is further away from the goal and pick their poison.
[SPEAKER_01]: Because if they want to go after one problem, they have to worsen the other according to how they believe their policy tools work.
[SPEAKER_01]: So if they decide to fight inflation,
[SPEAKER_01]: They believe that unemployment is going to get worse.
[SPEAKER_01]: So if they're already concerned about employment, and that's already not where they want it, but they're even more concerned about inflation, they're going to have to make the employment situation worse in order to find inflation.
[SPEAKER_01]: Conversely,
[SPEAKER_01]: if the labor market really starts to crack and inflation is accelerating and defend the sides that the labor market is more important and they need to try to stimulate to create jobs by their own belief system that is going to exacerbate and already you know worsening inflation problem.
[SPEAKER_01]: Now I think one of the other significant
[SPEAKER_01]: Um, admissions that was kind of tucked into this whole speech that nobody really talked about because it was really like, you know, just one line that he slept in there.
[SPEAKER_01]: So pal mentioned that we have been above target.
[SPEAKER_01]: For four years in a row, target being two percent.
[SPEAKER_01]: And they're way above target.
[SPEAKER_01]: They're not even close to the target, especially a couple of years.
[SPEAKER_01]: They were multiples above the target.
[SPEAKER_01]: Because when the Fed was below two percent, they were barely below two percent.
[SPEAKER_01]: Some years they got one point nine.
[SPEAKER_01]: You know, we did get one point four percent CPI in twenty twenty.
[SPEAKER_01]: That was like the furthest below two percent we got, right?
[SPEAKER_01]: But Powell said that we've been above target for four years, right?
[SPEAKER_01]: And this is going to be the fifth year.
[SPEAKER_01]: But he mentioned that the Fed was going to now remove its policy goal of average inflation of two percent.
[SPEAKER_01]: Now,
[SPEAKER_01]: You know, I guess it's about time they gave up on a policy.
[SPEAKER_01]: They had no intent on following.
[SPEAKER_01]: But I've been critical of this, you know, for years.
[SPEAKER_01]: In fact, I criticized it when they first unveiled this thing.
[SPEAKER_01]: Because Trump said that, or not Trump, I keep confusing Powell.
[SPEAKER_01]: See, I'm, you know, I'm mixing them up now that Trump's the puppet of Powell, right?
[SPEAKER_01]: So it's really the same guy.
[SPEAKER_01]: But when Powell first announced,
[SPEAKER_01]: inflation averaging.
[SPEAKER_01]: He said that we needed to target inflation of a little bit above two percent because we had to make up for, you know, the years that we were below two percent, which I thought was a bunch of nonsense.
[SPEAKER_01]: I mean, what Powell was saying is, hey, prices only went up by, you know, one point five percent or something like that.
[SPEAKER_01]: uh... in a past year and so we didn't get enough inflation we needed more prices didn't go up as much as we we wanted and so therefore we have to make sure that prices go up more than two percent the following year so we can average it up to two percent right like like that was really a problem did think americans were sitting back saying god you know i didn't just get enough inflation last year
[SPEAKER_01]: You know, the prices of the things that I need didn't go up as much as the Fed wanted them to go up.
[SPEAKER_01]: So I really need the Fed.
[SPEAKER_01]: I really want the Fed to help make up for that.
[SPEAKER_01]: Because I feel like I got cheated out of some inflation.
[SPEAKER_01]: You know, I was really hoping that I had enough inflation to hit the Fed's goal.
[SPEAKER_01]: And I feel like I got short change because my prices were just not high enough.
[SPEAKER_01]: I really want to make sure that next year, they go up by more than the Fed's target.
[SPEAKER_01]: That way, I get some extra inflation to make up for the inflation I got cheated out of.
[SPEAKER_01]: Anybody was thinking that the biggest problem people had in America was making up for the fact that their cost of living didn't go up enough in the previous years.
[SPEAKER_01]: And we needed to fed the Sabas from the horror of this by letting us have some extra inflation this year.
[SPEAKER_01]: So I said at the time that it was all a bunch of BS, that the Fed was just looking for excuse not to hike.
[SPEAKER_01]: And so they made up this nonsense about inflation averaging.
[SPEAKER_01]: Well, for the past several years, I've been pointing this out.
[SPEAKER_01]: And I've been saying, well, where are they going to target inflation below two percent?
[SPEAKER_01]: Because aren't we going to average down all this high inflation?
[SPEAKER_01]: Right?
[SPEAKER_01]: If we had to average up to low inflation by targeting an inflation rate above two percent,
[SPEAKER_01]: Don't we also have to average down high inflation?
[SPEAKER_01]: Don't we need to target less than two percent to make up for all the years that it was above?
[SPEAKER_01]: In fact, if you go back to the five years prior to twenty twenty one, right, when the Fed, you know, rolled out this nonsense policy, right?
[SPEAKER_01]: The only year, or there are two years, two years in the previous five, where inflation was below two percent, there was twenty twenty when it was one point four.
[SPEAKER_01]: And then there was twenty eighteen when it was one point nine man we really got cheated in twenty twenty eighteen we only had one point nine instead of two we really need to make up for that but it it I mean I was twenty eighteen twenty nineteen it was two point three
[SPEAKER_01]: Twenty seventeen it was two point one twenty sixteen it was two point one I mean almost bang on two percent in fact if you average the five years from twenty twenty twenty twenty sixteen those the last five years
[SPEAKER_01]: The average rate of inflation was two percent.
[SPEAKER_01]: I mean, the Fed nailed it.
[SPEAKER_01]: Imagine that.
[SPEAKER_01]: So there was no lack of inflation that we needed to make up for.
[SPEAKER_01]: Yet the Fed said we needed to make up for it anyway.
[SPEAKER_01]: Now the reason that Paul gave for giving it up is he basically said, look, we tried it.
[SPEAKER_01]: We tried to overshoot a little bit and it didn't really work out for us.
[SPEAKER_01]: meaning, yeah, we tried to overshoot by a little bit and we did it by a mile, right?
[SPEAKER_01]: They went for two point one, two point two and they got nine point one, right?
[SPEAKER_01]: So, yeah, they tried to overshoot a little bit and they overshot by a mile.
[SPEAKER_01]: So they said, that's why we're giving it up.
[SPEAKER_01]: But the real reason are giving it up.
[SPEAKER_01]: is because there is no way to average down four years of inflation that is double or triple to percent right because they would have to average way below probably half a percent for many many years.
[SPEAKER_01]: in order to create an average of two.
[SPEAKER_01]: But the Fed never wants inflation to be at below two percent.
[SPEAKER_01]: It was only willing to have it be above two percent to average inflation up.
[SPEAKER_01]: But there's no way.
[SPEAKER_01]: And I said this, they're ever going to try to average inflation down.
[SPEAKER_01]: And I was waiting for somebody in a press conference to call Powell out and say, hey, what about your goal of to have an average inflation rate of two percent?
[SPEAKER_01]: How are you going to achieve that goal now when inflation has been so much above two percent for so long?
[SPEAKER_01]: Well, now they don't have to achieve that goal because they finally abandoned it.
[SPEAKER_01]: They finally admitted that there is no more goal of having an average rate of inflation of two percent.
[SPEAKER_01]: They're just trying to bring the rate down to two percent.
[SPEAKER_01]: But that's not going to happen.
[SPEAKER_01]: It's not going to be two percent this year.
[SPEAKER_01]: It's not going to be two percent next year because they admitted that inflation is too high and they're about to cut rates.
[SPEAKER_01]: So if inflation was too high before they cut rates, it's going to be even higher after.
[SPEAKER_01]: Anyway, we got a commercial break or come right back.
[SPEAKER_01]: So don't call anywhere.
[SPEAKER_01]: All right, so we're talking about Powell's pivot as President Trump was able to get the Fed Chairman's mind right.
[SPEAKER_01]: And when he talks about how there are risks to both sides of the mandate and therefore we really shouldn't be restrictive, we should be neutral.
[SPEAKER_01]: We're not restrictive.
[SPEAKER_01]: I've been saying that, you know, for a couple of years now, the Fed stopped short of being restrictive.
[SPEAKER_01]: And well, although maybe maybe the minute they saw that policy was restrictive, they backed away because signature valley bank and a couple of other banks failed, right?
[SPEAKER_01]: Three banks failed.
[SPEAKER_01]: And then the Fed stopped like you raise.
[SPEAKER_01]: So they never got a restrictive territory because credit never stopped expanding, right?
[SPEAKER_01]: Inflation is an expansion of the supply of money and credit, right?
[SPEAKER_01]: I've talked about that credit is very important because you don't need money to buy stuff.
[SPEAKER_01]: You can buy stuff with credit.
[SPEAKER_01]: Right?
[SPEAKER_01]: And so if you can bid up prices with credit without having any money, you know, and we've raised that to an art form in America.
[SPEAKER_01]: Well, expanding credit is inflation.
[SPEAKER_01]: You've got more credit available to buy goods.
[SPEAKER_01]: And even though the Fed was hiking, the hikes were never substantial enough to restrict the credit growth.
[SPEAKER_01]: Americans didn't stop spending money.
[SPEAKER_01]: They didn't stop borrowing money because rates got too high.
[SPEAKER_01]: Nobody said, you know, interest on the credit card is just too high.
[SPEAKER_01]: I better not use my credit card.
[SPEAKER_01]: I better stop buying things on credit.
[SPEAKER_01]: No, they kept on doing it.
[SPEAKER_01]: They didn't pull back.
[SPEAKER_01]: The government certainly didn't pull back.
[SPEAKER_01]: The government didn't say, oh, interest rates have gone up.
[SPEAKER_01]: We better borrow less money.
[SPEAKER_01]: We better.
[SPEAKER_01]: We better cut our spending and balance the budget because we don't want to have to pay these higher rates.
[SPEAKER_01]: No.
[SPEAKER_01]: I mean, they just kept on borrowing and spending paying no attention at all.
[SPEAKER_01]: to the rate hikes because they were too little too late to make a difference the fed never got to restrictive territory not even close to restrictive territory no people talk a lot about vulgar days and the fact that interest rates got to twenty percent under vulgar well inflation never got anywhere near twenty percent
[SPEAKER_01]: I mean, it did get to maybe ten eleven percent, you know, at its peak.
[SPEAKER_01]: But other years maybe seven or eight percent.
[SPEAKER_01]: I mean, so you had a Fed funds rate that was more than double the inflation rate.
[SPEAKER_01]: Not quite triple, but that was restrictive.
[SPEAKER_01]: Now, we never got anywhere near there.
[SPEAKER_01]: I mean, our inflation peaked out at nine point one, but the Fed basically peaked an interest rates in about five and a quarter.
[SPEAKER_01]: So our interest rates peaked at half the inflation rate, not twice the inflation rate.
[SPEAKER_01]: And of course,
[SPEAKER_01]: We didn't even measure inflation.
[SPEAKER_01]: If we measured inflation now, the way it was measured in the nineteen seventies, we didn't peak at nine percent.
[SPEAKER_01]: We probably peaked at eighteen percent.
[SPEAKER_01]: We probably had a higher peak.
[SPEAKER_01]: during this cycle, which hasn't even finished yet, we're still playing it out.
[SPEAKER_01]: But we probably had higher inflation than the peak of the nineteen seventies.
[SPEAKER_01]: But interest rates, this cycle didn't even come close to what we got back then.
[SPEAKER_01]: So we never made an interrestricted territory.
[SPEAKER_01]: And what's the reason?
[SPEAKER_01]: Because we're too broke for restrictive territory.
[SPEAKER_01]: We've got so much debt.
[SPEAKER_01]: This is such a massive credit bubble in all aspects of the economy that if monetary policy ever got restrictive, everything would implode.
[SPEAKER_01]: Right?
[SPEAKER_01]: So we didn't get to restrict it.
[SPEAKER_01]: We just got less stimulus.
[SPEAKER_01]: Right?
[SPEAKER_01]: So instead of the drug addict, the heroin addict, going cold turkey, and no more heroin, we just dialed back to dosage.
[SPEAKER_01]: That's all we did.
[SPEAKER_01]: We've been taking monetary heroin the whole time.
[SPEAKER_01]: We just took a smaller amount of it.
[SPEAKER_01]: Right?
[SPEAKER_01]: That's all we did because we can't get off the monetary heroin.
[SPEAKER_01]: All the Fed tried to do is get us used to a smaller dose.
[SPEAKER_01]: But that ain't going to work.
[SPEAKER_01]: They're getting ready to inject the economy with record amounts of this monetary heroin.
[SPEAKER_01]: And what is going to be the catalyst for that is going to be the bond market.
[SPEAKER_01]: And this is what's coming, you know, because
[SPEAKER_01]: The bond market rallied a bit on Friday.
[SPEAKER_01]: Everything rallied on Friday, right?
[SPEAKER_01]: The Fed gave everyone on Wall Street exactly what everyone wants, right?
[SPEAKER_01]: More free money, cheap money, and one of the differences though, in the past, at least in the recent past, right?
[SPEAKER_01]: When the Fed stepped up,
[SPEAKER_01]: You know, and stepped up, meaning not in a good way, but in a bad way, right?
[SPEAKER_01]: But when the Fed came to rescue the markets.
[SPEAKER_01]: with rate cuts or QE.
[SPEAKER_01]: The markets at least were going down.
[SPEAKER_01]: The Fed at least waited for a big drop in the markets before riding to the rescue with rate cuts.
[SPEAKER_01]: Now you have the Fed starting a new cutting cycle, although it's a continuation of the one that started in twenty twenty four, because they never heightrate.
[SPEAKER_01]: So they cut a few times and then they took a hiatus and now they're going to cut again.
[SPEAKER_01]: But it was, you know, for a while, you know, people, you know, they didn't know when.
[SPEAKER_01]: But in the past, the markets were down when the Fed, you know, came to the rescue.
[SPEAKER_01]: The markets are at all time record highs.
[SPEAKER_01]: Now, on Friday, the NASDAQ and S&P didn't hit new highs.
[SPEAKER_01]: But the down did, the Dow Jones closed the week on a new all time record highs.
[SPEAKER_01]: Yet the Fed is saying, we got to cut rates.
[SPEAKER_01]: Why?
[SPEAKER_01]: The stock market is at a record high.
[SPEAKER_01]: So financial conditions are pretty easy.
[SPEAKER_01]: Why are you starting to cut rates now?
[SPEAKER_01]: Again, even if you admit that there's some risk to the employment, pal said that it's still four percent.
[SPEAKER_01]: Yeah, it may be it's going to go up
[SPEAKER_01]: But it's still really low according to Powell.
[SPEAKER_01]: Now, it's really not, again, because the real inflation, the real unemployment rate is a lot higher than four percent, even the use, the use six rate is about eight percent.
[SPEAKER_01]: That's a lot of unemployment, but the real rate is higher than that.
[SPEAKER_01]: But Powell is still pointed to these phony numbers.
[SPEAKER_01]: So even if you got four percent on employment, and it goes to five percent, so what, when you got an inflation problem?
[SPEAKER_01]: And in fact, the whole concept of a dual mandate, you know, I forget I should have checked the era, but the Fed didn't always have the dual mandate.
[SPEAKER_01]: First it had one mandate, which was inflation.
[SPEAKER_01]: And in fact, the initial mandate was stable prices.
[SPEAKER_01]: That was the only mandate the Fed had.
[SPEAKER_01]: And stable prices means prices that don't go up or don't go down, right?
[SPEAKER_01]: They stay stable.
[SPEAKER_01]: So that doesn't mean they go up two percent every year.
[SPEAKER_01]: That's not stability.
[SPEAKER_01]: That's increasing prices.
[SPEAKER_01]: So the real target rate of inflation was supposed to be zero, right?
[SPEAKER_01]: If we had no inflation, then prices would be stable.
[SPEAKER_01]: If they rise every year by two percent, they're not stable.
[SPEAKER_01]: They're just going up in perpetuity, right?
[SPEAKER_01]: So first the feds goal was no inflation.
[SPEAKER_01]: But then,
[SPEAKER_01]: they decided to add the second mandate full employment as if monetary policy has any real direct impact on employment.
[SPEAKER_01]: The only impact it has is negative.
[SPEAKER_01]: I think that Fed policy doesn't create employment, but it can certainly increase unemployment by having bad monetary policy and having too much inflation.
[SPEAKER_01]: I mean, the only way in the past that the Fed was ever able to reduce unemployment by creating inflation
[SPEAKER_01]: was by reducing the minimum wage.
[SPEAKER_01]: You see, if you create inflation, you effectively lower the minimum wage.
[SPEAKER_01]: Now, the minimum wage is a barrier to employment.
[SPEAKER_01]: The higher the minimum wage, the more unemployment that is created.
[SPEAKER_01]: If you lower the minimum wage, you create jobs.
[SPEAKER_01]: Now, politicians don't want to lower the minimum wage.
[SPEAKER_01]: In fact, it's never been lowered.
[SPEAKER_01]: They only want to raise it.
[SPEAKER_01]: And so if a high minimum wage is causing too much unemployment, one way to do that is to create inflation so that the prices of everything goes up, but you hold the minimum wage the same.
[SPEAKER_01]: And so now you're reducing
[SPEAKER_01]: the real minimum wage, right?
[SPEAKER_01]: Because it's not being indexed to inflation.
[SPEAKER_01]: And so that could create some jobs, right?
[SPEAKER_01]: But what's creating the jobs is not inflation.
[SPEAKER_01]: It's the lowering of the minimum wage that was destroying job, right?
[SPEAKER_01]: But that's the only thing that the Fed has ever been able to do to help
[SPEAKER_01]: alleviated unemployment problem is to, you know, secretly reduce the minimum wage without forcing politicians to have to actually cut the minimum wage.
[SPEAKER_01]: But so this, this dual mandate was created, but most fed chairman, including I think Palo said this himself.
[SPEAKER_01]: The more important side of the mandate is inflation.
[SPEAKER_01]: Now, somewhere along the way, the Fed redefined their mandate of stable prices to two percent inflation every year because they redefined stability as two percent increase every year.
[SPEAKER_01]: But even if that's their new definition and we don't have that,
[SPEAKER_01]: Right, we have higher inflation.
[SPEAKER_01]: And Powell has admitted that the risk is that the above target inflation moves even further above target.
[SPEAKER_01]: And if your unemployment rate is barely above four percent, which means you know, you kind of nailed it on the employment side, even if the outlook is is negative for jobs, even if the unemployment rate might go up to four and a half or five.
[SPEAKER_01]: I would think that the Fed would be willing to accept that as a trade-off to fight inflation.
[SPEAKER_01]: Because again, Pal and every other Fed chairman has said that the more important part of the mandate is inflation.
[SPEAKER_01]: And in fact, the Fed has said, many Fed chairman have said, including Pal himself, the best way to deliver on the employment side of the mandate is to get the two percent inflation.
[SPEAKER_01]: That that's the best way to do it.
[SPEAKER_01]: That the way the Fed creates maximum full employment is by keeping inflation down.
[SPEAKER_01]: And so now what Paola saying is, I don't care that inflation is above two percent.
[SPEAKER_01]: We're going to throw gasoline on the fire.
[SPEAKER_01]: We're going to cut interest rates right now in the face of rising inflation because we're worried about jobs.
[SPEAKER_01]: That's all a bunch of BS.
[SPEAKER_01]: The reason that the Fed is cutting
[SPEAKER_01]: Race is because of the political pressure coming from the Trump administration, right?
[SPEAKER_01]: And if Trump is applying the amount of pressure that he is, you know, in public, right?
[SPEAKER_01]: I can only imagine what's going on behind the scenes that we don't see.
[SPEAKER_01]: What kind of arm twisting?
[SPEAKER_01]: What Trump is doing to get their minds right?
[SPEAKER_01]: I mean, the most recent example means is going after
[SPEAKER_01]: This FOMC governor, I forget the lady's name for mortgage fraud.
[SPEAKER_01]: And I mentioned this on the last broadcast.
[SPEAKER_01]: I mean, mortgage fraud.
[SPEAKER_01]: I mean, sure.
[SPEAKER_01]: Yes, you know, technically it's fraud.
[SPEAKER_01]: She listed her vacation home as a primary residence.
[SPEAKER_01]: That is probably the most common form of mortgage fraud in the country, right?
[SPEAKER_01]: Now, and I'm probably millions of people do it, including members of Congress.
[SPEAKER_01]: I've been a lot of members of Congress that have two homes that a lot of them do, right?
[SPEAKER_01]: They have a home in their hometown where they live and they've got a DC home.
[SPEAKER_01]: I'm sure quite a few of those guys have got two primary residences.
[SPEAKER_01]: Oh, I thought they were both my primary residence, right?
[SPEAKER_01]: Oh, I didn't know you could only have one primary residence.
[SPEAKER_01]: I don't really vacation at either one.
[SPEAKER_01]: I mean, I live two prices.
[SPEAKER_01]: Those are my primary residences.
[SPEAKER_01]: I got, you know, whatever.
[SPEAKER_01]: I just wonder how many people in all the country are actually prosecuted for that.
[SPEAKER_01]: I mean, there's serious mortgage fraud, right, that goes on.
[SPEAKER_01]: But I'd be wondering, I mean, who's the last person?
[SPEAKER_01]: Has anybody ever gone to jail for this for like writing out a mortgage application that their vacation home is their primary residence?
[SPEAKER_01]: Is there any precedent for this?
[SPEAKER_01]: But obviously, they are digging up any dirt they can find on these FOMC board members.
[SPEAKER_01]: I mean, I'm sure they got the IRS up their asses looking for something that they can get them on tax fraud or tax evasion.
[SPEAKER_01]: I mean, what kind of deductions did they make?
[SPEAKER_01]: I mean, they're probably now scared.
[SPEAKER_01]: They're just going to do what Trump wants.
[SPEAKER_01]: And so they make up this BS story about why it's time for a policy change.
[SPEAKER_01]: If anything, if anything, it's time to hike rates.
[SPEAKER_01]: Paul should be saying, look, inflation is getting worse.
[SPEAKER_01]: We stopped hiking because we just assumed that inflation would keep trending down to two percent.
[SPEAKER_01]: We were wrong.
[SPEAKER_01]: right it's headed back up and to say look you know maybe it's the terrorist maybe it's not who cares it's going up tighten rates right you don't know why right if he's saying I don't know how much of it has got to do with it with the terrorist okay if you don't know then air on the side of caution rates are too low
[SPEAKER_01]: Right?
[SPEAKER_01]: Everybody is looking at these artificial constructs of zero percent interest rates that we never should have been in.
[SPEAKER_01]: Right?
[SPEAKER_01]: Rates never should have been at zero.
[SPEAKER_01]: That was a huge mistake.
[SPEAKER_01]: But now people think that because there are above zero, they're high.
[SPEAKER_01]: I've heard people talk about sky high interest rates.
[SPEAKER_01]: They're in the force.
[SPEAKER_01]: How is that sky high?
[SPEAKER_01]: You know, mortgages were still in the sixes like high sixes.
[SPEAKER_01]: That's cheap mortgage money.
[SPEAKER_01]: The problem is real estate prices are too high.
[SPEAKER_01]: That's the problem.
[SPEAKER_01]: The solution to that problem is to let real estate prices fall, not to try to lower mortgage rates so that people can borrow more money to overpay for homes.
[SPEAKER_01]: How about let home prices go down so people can borrow less money.
[SPEAKER_01]: If you borrow less money, then you can pay a higher rate because you have a smaller loan balance.
[SPEAKER_01]: But ironically, again, what are the reasons that they want to Fed to cut rates?
[SPEAKER_01]: is they want mortgage rates to come down.
[SPEAKER_01]: But there is no guarantee that it will work.
[SPEAKER_01]: In fact, it's more likely that it will backfire just like the last time the Fed cut rates mortgage rates went up because long-term rates went up.
[SPEAKER_01]: Well, I think the same thing's going to happen the next time they cut rates.
[SPEAKER_01]: Long term rates are going up.
[SPEAKER_01]: Why?
[SPEAKER_01]: Because defense policy is inflationary.
[SPEAKER_01]: The markets will no longer have confidence in the feds ability to maintain two percent inflation over the long run.
[SPEAKER_01]: And so the value of long term bonds is going to be eroded.
[SPEAKER_01]: The value of the dollar is going to be eroded.
[SPEAKER_01]: The dollar got clobbered back down to a ninety seven handle.
[SPEAKER_01]: Not a new low for the move.
[SPEAKER_01]: That could be coming next week.
[SPEAKER_01]: But we had a very weak dollar.
[SPEAKER_01]: And that's why I think that yesterday's Treasury rally will be short lived.
[SPEAKER_01]: And bonds are headed down.
[SPEAKER_01]: Gold had a great day out of Friday.
[SPEAKER_01]: So did Silver.
[SPEAKER_01]: They didn't hit new highs.
[SPEAKER_01]: Silver closed just below thirty nine dollars an ounce.
[SPEAKER_01]: Gold was about maybe thirty three seven to your so so not quite above thirty four hundred.
[SPEAKER_01]: But the rotation that we've had with foreign central banks out of dollars and out of treasuries into gold is going to accelerate as a result of this shift in fed policy.
[SPEAKER_01]: Central banks are going to be more interested
[SPEAKER_01]: and more aggressive in their movement out of US dollars because the Fed is basically said we are going to sacrifice the inflation side of the mandate because of the political pressure put on us by the Trump administration which is still early days we still got you know three and a half years left of Trump and wait till Trump you know gets complete control
[SPEAKER_01]: of the Fed, wait till Powell is gone and some flunky has taken his place and they get some more FOMC members, right?
[SPEAKER_01]: This he's going to completely have control of the Fed and that means get rid of your dollars.
[SPEAKER_01]: That means by gold.
[SPEAKER_01]: And again, it's not just central banks that should be doing that.
[SPEAKER_01]: Everybody should be doing that, right?
[SPEAKER_01]: Individuals should be doing that.
[SPEAKER_01]: They're not doing it yet.
[SPEAKER_01]: Again, I talk about the fact that it's shift gold.
[SPEAKER_01]: It's not like our phones are ringing off the hook.
[SPEAKER_01]: They should be, right?
[SPEAKER_01]: People should be calling in and droves.
[SPEAKER_01]: We probably, you know, we still get more people.
[SPEAKER_01]: I think selling their golden silver.
[SPEAKER_01]: They think they're getting a good price.
[SPEAKER_01]: They're getting a lousy price.
[SPEAKER_01]: Prices, gold silver prices are just going to keep going up.
[SPEAKER_01]: Why?
[SPEAKER_01]: Because the dollar is just going to keep going down.
[SPEAKER_01]: Paul just told you that, right?
[SPEAKER_01]: We're going to sacrifice the dollar.
[SPEAKER_01]: We don't care, right?
[SPEAKER_01]: We're cutting rates even though inflation is above target.
[SPEAKER_01]: But more importantly, they're going to go to QE because what is going to happen?
[SPEAKER_01]: They're going to cut rates and long rates are going to go up.
[SPEAKER_01]: Then what?
[SPEAKER_01]: Because they want long rates to go down.
[SPEAKER_01]: That's the main goal.
[SPEAKER_01]: They want to get long-term interest rates down.
[SPEAKER_01]: So the government, they think, can refinance the national debt at lower rates.
[SPEAKER_01]: They want to boost the housing market instead of doing the right thing by letting home prices go down.
[SPEAKER_01]: They want mortgage rates to go down.
[SPEAKER_01]: So people can overpay for these homes.
[SPEAKER_01]: But when mortgage rates don't go down,
[SPEAKER_01]: then they're going to still want the Fed to bring them down and how they're going to do that quantitative easing where the Fed goes into the market and buys treasuries or maybe starts buying the mortgage back securities again.
[SPEAKER_01]: They haven't been buying them at all.
[SPEAKER_01]: They've just been buying treasuries.
[SPEAKER_01]: In fact, they've been selling mortgage back securities as part of quantitative fighting.
[SPEAKER_01]: So obviously, that's going to come to an end.
[SPEAKER_01]: I mean, that may come to an end in September.
[SPEAKER_01]: But there's going to be a lot of pressure on the Fed to resume quantitative easing in order to bring interest rates down.
[SPEAKER_01]: And that is going to bring the dollar way down.
[SPEAKER_01]: And you got to prepare for that.
[SPEAKER_01]: Look, look what happened to gold prices.
[SPEAKER_01]: Again, gold up.
[SPEAKER_01]: Gold is up, twenty eight percent this year.
[SPEAKER_01]: It's a nice move, right?
[SPEAKER_01]: The year's not over yet.
[SPEAKER_01]: We're up, twenty eight percent in a price of gold.
[SPEAKER_01]: Now, you know, Bitcoin got all the headlines in twenty twenty five.
[SPEAKER_01]: That's all the financial community can talk about Bitcoin is barely up.
[SPEAKER_01]: In fact, it's not even up a twenty two percent.
[SPEAKER_01]: year to date.
[SPEAKER_01]: In fact, it was up twenty two percent.
[SPEAKER_01]: When I first started the podcast, but now it's dropped about a thousand bucks.
[SPEAKER_01]: When I started doing this podcast about forty minutes ago and I looked at Bitcoin.
[SPEAKER_01]: It was a hundred and thirteen thousand five hundred and it was an up twenty two percent on the year.
[SPEAKER_01]: Now we're down a thousand.
[SPEAKER_01]: So Bitcoin is an even up twenty one percent now.
[SPEAKER_01]: It's a hundred and twelve thousand five hundred.
[SPEAKER_01]: So Bitcoin up twenty one percent on the year.
[SPEAKER_01]: Gold up twenty eight.
[SPEAKER_01]: Right, what I thought Bitcoin was supposed to be the fastest horse in the race, right?
[SPEAKER_01]: That's what, you know, who said that?
[SPEAKER_01]: That was Paul Tudor Jones, right?
[SPEAKER_01]: I'm buying Bitcoin.
[SPEAKER_01]: It's going to be the fastest horse in the race.
[SPEAKER_01]: Well, it's, you know, gold's got a nice lead this year on Bitcoin.
[SPEAKER_01]: In fact, I think they're sending Bitcoin back to the stable.
[SPEAKER_01]: In fact, eventually they're sending Bitcoin into the glue factory.
[SPEAKER_01]: But look at the gold and silver mining stocks.
[SPEAKER_01]: They were the GDX and the GDXJ were up three and a third percent on the week.
[SPEAKER_01]: And the GDX and the GDXJ closed the week on new multi year highs.
[SPEAKER_01]: I mean, maybe twelve, thirteen year highs.
[SPEAKER_01]: Year to date, the GDX is up seventy seven and a half percent.
[SPEAKER_01]: And the GDXJ is up seventy eight and a half percent.
[SPEAKER_01]: Those are huge returns.
[SPEAKER_01]: And, you know, we're not even at the halfway mark for the third quarter.
[SPEAKER_01]: And we got those kind of returns.
[SPEAKER_01]: These gold stocks are on pace to more than double as a group in twenty twenty five.
[SPEAKER_01]: You know, I said this when Donald Trump proclaimed
[SPEAKER_01]: that America was on the cost for beginning, whatever, a new golden age.
[SPEAKER_01]: I said, he means that literally it's going to be a golden age for gold.
[SPEAKER_01]: And so far, gold is shining bright in the Trump presidency, but what's shining even brighter are the gold and silver mining stocks.
[SPEAKER_01]: So well, everybody wanted to buy fools gold and Bitcoin related stocks.
[SPEAKER_01]: had they just bought gold stocks instead, they'd have made a lot more money.
[SPEAKER_01]: And in fact, even though gold and silver mining stocks are the best performing a sector of the market, right?
[SPEAKER_01]: By far, there's not another sector that comes anywhere close, right?
[SPEAKER_01]: Precious metals mining stocks hands down the best performing group.
[SPEAKER_01]: in the U.S.
[SPEAKER_01]: Why did they get no coverage?
[SPEAKER_01]: Turn on CNBC, turn on Fox Business.
[SPEAKER_01]: They don't talk about these stocks.
[SPEAKER_01]: I mean, maybe you get to fast money on CNBC and somebody will say, yeah, I like like a barricade, I like the GDX.
[SPEAKER_01]: Okay.
[SPEAKER_01]: Yeah, someone will mention that, like as a pick.
[SPEAKER_01]: But they really don't focus on it.
[SPEAKER_01]: Instead, they spend so much coverage on Bitcoin, right?
[SPEAKER_01]: And micro strategy.
[SPEAKER_01]: You're much better off on the goal stocks this year than micro strategy.
[SPEAKER_01]: You know, I mean, it might not even close.
[SPEAKER_01]: So this is the stealth bull market.
[SPEAKER_01]: No one is talking about it.
[SPEAKER_01]: The financial community isn't covering the story.
[SPEAKER_01]: You have the best performing sector in the market.
[SPEAKER_01]: And it's not even worthy of coverage as far as the media is concerned.
[SPEAKER_01]: They're missing the boat.
[SPEAKER_01]: people who rely on financial news are missing the boat, right?
[SPEAKER_01]: You know, if you're watching my podcast, if you're lying on the Peter ship, so then hopefully you're not, hopefully you're following my advice and your buying goals over and more particularly, you're buying the mining stocks.
[SPEAKER_01]: because even though they're up, seventy-eight percent on the year, they're still cheap.
[SPEAKER_01]: That's how cheap they were before they went up.
[SPEAKER_01]: So there's plenty of time to buy these things.
[SPEAKER_01]: And the fact that the media hasn't even noticed it yet, that shows you how early we are.
[SPEAKER_01]: I mean, went to the media start talking about Bitcoin.
[SPEAKER_01]: Think about how much Bitcoin went up before CNBC finally jumped on the bad wagon, right?
[SPEAKER_01]: I mean,
[SPEAKER_01]: And so imagine, we're goal is going to have to be before we get a bunch of believers there, right?
[SPEAKER_01]: So we got a long time, so you got a buyer goal.
[SPEAKER_01]: You remember, the symbol on my goal fund is EPGIX.
[SPEAKER_01]: And the reason I think my goal fund is the one to buy.
[SPEAKER_01]: And of course, you know, obviously I'm biased because I make money if you buy my goal fund, right?
[SPEAKER_01]: I don't make any money if you buy somebody else's.
[SPEAKER_01]: So obviously, you know, I'm biased.
[SPEAKER_01]: But what I like about it, other than the fact that Adrian Day manages it, and I think Adrian forgot more about the mining industry that all these other managers know, probably combine.
[SPEAKER_01]: You don't have the brightest people managing these gold portfolios, because they're all managing tech and something like that that's exciting and makes money for the investment bankers.
[SPEAKER_01]: You got the dunces that are assigned metals in mining.
[SPEAKER_01]: It's like, you know, nobody wants to draw that straw.
[SPEAKER_01]: But Adrian, you know, lives in breezes stuff.
[SPEAKER_01]: I mean, he is in mining because he wants to be there, not because, you know, you know, he was the worst, he had the lowest scores in his class and, you know, and he got, you know, delegated to the job nobody wanted.
[SPEAKER_01]: But we've got all these small stocks.
[SPEAKER_01]: positions in these small stocks.
[SPEAKER_01]: It's the bigger stocks and even the junior stocks like in the GDXJ are larger than a lot of the small stocks that we own.
[SPEAKER_01]: And so because we have this allocation of these small stocks, it's a drag on performance now.
[SPEAKER_01]: But once those things start to move, I think it's going to be like lightning speed.
[SPEAKER_01]: I think they're going to have such a big move that it will dwarf the moves in the big stocks.
[SPEAKER_01]: And that's when it's going to kick in.
[SPEAKER_01]: So we've got that jet fuel for our portfolio.
[SPEAKER_01]: and we're just ready to go.
[SPEAKER_01]: And so I think now you want to take advantage of that because it's very hard to buy these positions now.
[SPEAKER_01]: There's no liquidity there.
[SPEAKER_01]: And so I think ultimately we're going to have an even bigger move and we're going to weigh out perform the indexes that just have the bigger companies, even though we've under performed.
[SPEAKER_01]: But I think we're still up maybe sixty five percent.
[SPEAKER_01]: I forget the exact amount year to date.
[SPEAKER_01]: That's still not too shabby.
[SPEAKER_01]: You know, because we do have a lot of the big stocks as well.
[SPEAKER_01]: But you know, it's not just the gold stocks that are killing it.
[SPEAKER_01]: Look at my dividend payer fund.
[SPEAKER_01]: You're Pacific dividend payers fund.
[SPEAKER_01]: EPDPX, no EPDIX, you're up to the given pairs.
[SPEAKER_01]: Almost thirty nine percent thirty nine percent on the year.
[SPEAKER_01]: Those are just dividend paying foreign stocks.
[SPEAKER_01]: Yeah, we got a few gold stocks thrown in there, which also pay dividends.
[SPEAKER_01]: But we have a lot of utilities in there, telecom, tobacco, consumer, you know, discretionary food and beverages.
[SPEAKER_01]: We have a lot of recession resistant.
[SPEAKER_01]: defensive value stocks in the portfolio yet you've got almost forty percent gain that's literally like ten times I mean at ten times four times the gain in the S&P five hundred who's talking about this people are not really talking about foreign stocks
[SPEAKER_01]: But this is part of the rotation.
[SPEAKER_01]: It's not just that foreign central banks are rotating out of the dollar and into gold, foreign investors are rotating out of U.S.
[SPEAKER_01]: stocks back into their own stocks.
[SPEAKER_01]: And you can see that in my dividend payers fund.
[SPEAKER_01]: But this is early in this secular rotation.
[SPEAKER_01]: US stocks outperform for over decade.
[SPEAKER_01]: Now I think they're going to underperform for over a decade yet nobody is covering this story really.
[SPEAKER_01]: I mean, every once in a while, somebody mentions it, but you wouldn't know.
[SPEAKER_01]: for watching financial news how foreign stocks are just absolutely killing the US stock market.
[SPEAKER_01]: And I said this, you know, Trump was like, oh, we're going to make American great again yet, but not for in stocks in America, not for investments.
[SPEAKER_01]: He's making foreign investment great again.
[SPEAKER_01]: I mean, my business is booming, not that the phones are ringing off the hook.
[SPEAKER_01]: What's happening is everything that all our money under management is going way up.
[SPEAKER_01]: And again, I mentioned, you know, we had record withdrawals last year, especially in the fourth quarter.
[SPEAKER_01]: I feel bad for the customers who threw in the towel last year, especially in Q one, right?
[SPEAKER_01]: Because they dismissed this huge gate.
[SPEAKER_01]: But you know what, they should come back.
[SPEAKER_01]: If you're watching this podcast video and you pulled your money out last year, all right, you made a mistake.
[SPEAKER_01]: It's an even bigger mistake not to send it back because I think the gains that you will miss out on will dwarf the gains you've already missed out on.
[SPEAKER_01]: You got to get out of US dollars.
[SPEAKER_01]: You got to get out of over price US stocks.
[SPEAKER_01]: You got to get into these foreign stocks.
[SPEAKER_01]: The first movement is going to come from abroad.
[SPEAKER_01]: The first thing is Europeans and Asians sell their US stocks because they see the losses because they see the effects.
[SPEAKER_01]: They measure their US stocks in their own currencies.
[SPEAKER_01]: So measured in your rows, you got a flat to down US stock market this year.
[SPEAKER_01]: So the Europeans are losing money in US stocks.
[SPEAKER_01]: Well, they're their markets are doing great.
[SPEAKER_01]: So there are people going to be pulling their money out, especially with the tariffs.
[SPEAKER_01]: The tariffs are alienating us from the rest of the world.
[SPEAKER_01]: The tariffs are bringing our enemies closer together.
[SPEAKER_01]: These are enemies.
[SPEAKER_01]: But the tariffs are bringing China and India and Russia closer together, strengthening their trading relationships.
[SPEAKER_01]: China, meanwhile, is building up its relationships in Africa, building up its relationships in South America, even in Canada.
[SPEAKER_01]: So we're actually improving
[SPEAKER_01]: China's trade relations with the rest of the world by trying to isolate them from the US or jack up these tariffs.
[SPEAKER_01]: And we're doing the same thing with India.
[SPEAKER_01]: So all this stuff is going to backfire.
[SPEAKER_01]: And so all this is bad for the U.S.
[SPEAKER_01]: stock market.
[SPEAKER_01]: Meanwhile, looking at Trump bragging about the U.S.
[SPEAKER_01]: government, strong-waring intel into giving up a ten percent state to the U.S.
[SPEAKER_01]: government, right?
[SPEAKER_01]: So the U.S.
[SPEAKER_01]: government and Donald Trump is bragging about this, that the U.S.
[SPEAKER_01]: government didn't pay any money.
[SPEAKER_01]: and Intel just gave the US government, gave it for free, ten percent state in the company.
[SPEAKER_01]: Now, why do you think Intel did that?
[SPEAKER_01]: I mean, did they just give the government ten percent of their company?
[SPEAKER_01]: Of course not.
[SPEAKER_01]: We don't know what went on behind the scenes.
[SPEAKER_01]: We don't know what kind of pressure or extortion.
[SPEAKER_01]: Like, what did Trump say to Intel?
[SPEAKER_01]: Like, hey, this is what you need to do, or this is what we're going to do.
[SPEAKER_01]: Or we'll do this, but only if you do this.
[SPEAKER_01]: Obviously, there was some kind of quid pro quo here.
[SPEAKER_01]: Intel didn't just give the US government ten percent of its business, right?
[SPEAKER_01]: For nothing, right?
[SPEAKER_01]: This then the government is going to do this to you.
[SPEAKER_01]: So if you want to prevent us from doing this, you got to give us ten percent.
[SPEAKER_01]: That's like a shake down.
[SPEAKER_01]: That's like the mafia, right?
[SPEAKER_01]: My dad called the US government to federal mafia.
[SPEAKER_01]: He was just talking about the IRS, but now I guess the whole government is like, it's protection money.
[SPEAKER_01]: We are going to do this to you.
[SPEAKER_01]: Unless you give us a ten percent stake, because now that the US government owns ten percent of intel, well, we're not going to screw our own company because we're a big shareholder.
[SPEAKER_01]: In fact, the US government is now the biggest shareholder in intel.
[SPEAKER_01]: Who thinks that's a good idea?
[SPEAKER_01]: Certainly not me.
[SPEAKER_01]: I don't think the US government should be buying into any
[SPEAKER_01]: private companies.
[SPEAKER_01]: Because obviously isn't the government going to favor companies that it has a stake in?
[SPEAKER_01]: Of course.
[SPEAKER_01]: So how is that capitalism if the government picks winners?
[SPEAKER_01]: But they usually pick losers when they try to pick winners.
[SPEAKER_01]: But now the government wants to tilt the playing field in favor of Intel and against its competitors that it doesn't have a stake in.
[SPEAKER_01]: So this is bad.
[SPEAKER_01]: This is unconstitutional.
[SPEAKER_01]: There's nothing in the Constitution that authorizes the US government to take stakes in private companies.
[SPEAKER_01]: Right?
[SPEAKER_01]: And of course, this is the slippery slope to communism because if you allow the government to buy into companies and in this case, they didn't even buy their way and they extorted their way in.
[SPEAKER_01]: But you know, the government, if they control the printing process, they could just print up money and buy everything.
[SPEAKER_01]: They could basically nationalize the means of production by buying everything with the money they print, right?
[SPEAKER_01]: They can effectively nationalize the whole economy and become a communist country.
[SPEAKER_01]: And this is not capitalism when the government buys into companies or shakes them down and demands a piece of their action.
[SPEAKER_01]: And it's not like legitimate taxation.
[SPEAKER_01]: Congress didn't authorize this.
[SPEAKER_01]: This is like a wealth tax.
[SPEAKER_01]: This is like the government taxed Intel and said, we want ten percent of your company as like a tax turned it over to the king.
[SPEAKER_01]: And they did.
[SPEAKER_01]: And the Republicans love it.
[SPEAKER_01]: I guarantee you.
[SPEAKER_01]: If Joe Biden did this, the exact same thing, there would not be a Republican in Congress who would be on board with it.
[SPEAKER_01]: In fact, to a man, I bet every Republican would be rallying against Biden for such a socialist move, right, for taking a piece of a private company.
[SPEAKER_01]: And Trump is asking us to say, hey, this is a great deal, right?
[SPEAKER_01]: Because it's a great deal for America, right?
[SPEAKER_01]: We got this great business acquisition.
[SPEAKER_01]: The Trump is not running a hedge fund here.
[SPEAKER_01]: He's the president of the executive branch of the government.
[SPEAKER_01]: And one of the things he's not supposed to do is exactly what he has done.
[SPEAKER_01]: But instead of being happy about the fact that Trump bought or got a chunk of intel as a great deal,
[SPEAKER_01]: Everybody should be thinking of, who's next?
[SPEAKER_01]: What other company is going to have to cough up equity to the US government because Trump threatens you?
[SPEAKER_01]: And if Trump can demand a piece of a corporation's action, what about every American citizen?
[SPEAKER_01]: What about just taking a chunk of everybody's personal assets?
[SPEAKER_01]: No, this is not good.
[SPEAKER_01]: Don't applaud because the government stole ten percent of intel and they didn't steal ten percent of what you got.
[SPEAKER_01]: Now, of course, Intel actually went up.
[SPEAKER_01]: It's not like Intel stock went down.
[SPEAKER_01]: This stock went up because the markets are now thinking, okay, the government now owns ten percent of Intel.
[SPEAKER_01]: It's going to pursue policies that will benefit Intel.
[SPEAKER_01]: And maybe that's what Intel thought, hey, let's just give the US government a ten percent stake.
[SPEAKER_01]: And now.
[SPEAKER_01]: Trump is going to want to maximize the value of that ten percent.
[SPEAKER_01]: So we're going to get all kinds of sweetheart deals.
[SPEAKER_01]: We're going to get all kinds of special breaks, special treatment.
[SPEAKER_01]: That's exactly why this should not happen because anything the government does to now benefit the company that it owns shares in will by definition hurt some other company that it doesn't.
[SPEAKER_01]: own stock in.
[SPEAKER_01]: This is not free market capitalism, right?
[SPEAKER_01]: This is colonialism, corporatism, fascism, right?
[SPEAKER_01]: All kinds of isms that aren't good, right?
[SPEAKER_01]: And there are no more critics on the right because everybody is on board with it because Trump is doing it.
[SPEAKER_01]: which is the problem with American politics.
[SPEAKER_01]: If you're a Republican, then everything your guy does is great.
[SPEAKER_01]: And you can't call out your own president when he makes a mistake.
[SPEAKER_01]: And to say, you know, I don't know if it's the same on the Democrats.
[SPEAKER_01]: I mean, maybe some Democrats criticize Democrats.
[SPEAKER_01]: I'm not sure, because I don't pay as much attention there.
[SPEAKER_01]: But the Republicans, it really pisses me off because I identify more with a Republican party, although I identify most as a libertarian, although even that party's got problems, but the biggest problem is they're irrelevant, they're never going to win.
[SPEAKER_01]: So I'm stuck between the lesser of two evils, which is why I supported Trump because philosophically, I figured Harris was worse, although I don't know.
[SPEAKER_01]: I mean, at the rate Trump is going, he's doing a lot of really bad things.
[SPEAKER_01]: Right, and you know, and so if you put them on a scale, yeah, there's a few good things, but the bad things are really starting to build up and weigh that down.
[SPEAKER_01]: So I know, you know, he may end up being worse who knows, right?
[SPEAKER_01]: Because it's still early who knows how many more really bad things he's going to do.
[SPEAKER_01]: But taking this stake in Intel is really bad.
[SPEAKER_01]: And he's asking us to celebrate this.
[SPEAKER_01]: I think we should mourn this.
[SPEAKER_01]: This is a sad day for American capitalism for the Constitution for liberty when stuff like this happens.
[SPEAKER_01]: And it's even worse that it happens on the watch of her Republican.
[SPEAKER_01]: and no Republicans criticize.
[SPEAKER_01]: And because now, in case we set the precedent for Democrats to do the same thing, imagine what they're going to demand.
[SPEAKER_01]: Imagine the term, you know, what's going to happen there.
[SPEAKER_01]: So this is all bad stuff.
[SPEAKER_01]: But in any way, it's bad for the country, but it's good for my investment strategy.
[SPEAKER_01]: It's good for gold.
[SPEAKER_01]: It's good for silver.
[SPEAKER_01]: It's good for mining stocks.
[SPEAKER_01]: It's good for foreign stocks.
[SPEAKER_01]: It's bad for the dollar.
[SPEAKER_01]: So again, don't wait.
[SPEAKER_01]: You know, we got our new website at shift goal.
[SPEAKER_01]: You can fill up your shopping cart, load it up with gold and silver, check out great.
[SPEAKER_01]: You need to talk to our reps.
[SPEAKER_01]: They're there standing by to help you if you need them.
[SPEAKER_01]: Talk to the guys at Europe Pacific.
[SPEAKER_01]: asset management, yourpack.com, get a portfolio with us, get a managed account, separately manage account.
[SPEAKER_01]: Buy my funds if you're doing yourself for all my funds are available, no load.
[SPEAKER_01]: Check them out on yourapak.com, but you can get them at all the discount brokers and tell your friends.
[SPEAKER_01]: Again, I think we're still early in this.
[SPEAKER_01]: We still got quite a ways to go to make up for the last ten years, but believe me, I think not only are we going to make up for it, we're going to far surpass it, especially if we get a few more years like this year, which I think we're going to do.
[SPEAKER_01]: I mean, we've gained so much ground already just based on the mass of our performance.
[SPEAKER_01]: in twenty twenty five.
[SPEAKER_01]: And I think it's going to be bigger in twenty twenty six, especially with the emerging markets.
[SPEAKER_01]: I think you're going to see another rotation right now.
[SPEAKER_01]: The rotation is out of US stocks in the foreign stocks, but it's mostly developed markets.
[SPEAKER_01]: I think the next rotation is going to be more to the developing the emerging markets.
[SPEAKER_01]: And so you really want to get ahead of that wave because I think that's going to be a huge one.
[SPEAKER_01]: Meanwhile, don't forget if you're not a subscriber to shift sovereigns newsletter, go over to the shift sovereign website and sign up.
[SPEAKER_01]: And make sure to watch the shift sovereign podcast on the shift sovereign YouTube channel.
[SPEAKER_01]: James Hickwin does that at least one of those week, just like me.
[SPEAKER_01]: So you get extra extra content coming from ship sovereign.
[SPEAKER_01]: And if you like today's podcast, make sure and follow me and comment and give it a like.
[SPEAKER_01]: Bye for now.