[SPEAKER_00]: Make no friends in the pits and you take no prisoners.
[SPEAKER_00]: One minute, you're up half a minute and soybeans in the next bull.
[SPEAKER_00]: Your kids don't go to college and they've registered mentally with me.
[SPEAKER_01]: The revolution starts now, starts.
[SPEAKER_00]: We have to pass the bills so that you can find out what is in it.
[SPEAKER_00]: Turn those machines back off!
[SPEAKER_01]: You are about to enter the Peter ship show.
[SPEAKER_01]: If we lose freedom here, there's no place to escape to.
[SPEAKER_01]: This is the last stand on Earth.
[SPEAKER_01]: The Peter ship shall be solved.
[SPEAKER_01]: I don't know when they decided that they wanted to make a virtue out of selfishness.
[SPEAKER_01]: You're money.
[SPEAKER_01]: You're stories.
[SPEAKER_01]: You're freedom.
[SPEAKER_01]: The Peter ship shall.
[SPEAKER_00]: Welcome everybody.
[SPEAKER_00]: Well, today we had probably one of the most highly anticipated Fed rate announcements and press conferences as I can remember because everybody has been waiting for the Fed to deliver the much hoped for rate cut.
[SPEAKER_00]: And you know, there even was some hope out there that the Fed might go for a 50 basis point move.
[SPEAKER_00]: But it's rare that the Fed does that and it's rare that the Fed does something that is not expected.
[SPEAKER_00]: And it was widely expected.
[SPEAKER_00]: The odds were overwhelming 95% that we would get a quarter point cut.
[SPEAKER_00]: And the Fed delivered precisely as the markets expected.
[SPEAKER_00]: Lowered the federal funds rate to four to four and one quarter percent.
[SPEAKER_00]: Now, during the press conference, I'm gonna spend pretty much the entirety
[SPEAKER_00]: going over the press conference and I made a couple of notes here of some of the salient points that I'm going to talk about as far as what Powell said and didn't say during that conference.
[SPEAKER_00]: But one of the things he admitted because somebody asked him, you know, do you really expect a quarter point rate cut to do much, right, to
[SPEAKER_00]: and he basically gave her, I think it was a woman, and honest answer.
[SPEAKER_00]: He said, not really, no.
[SPEAKER_00]: He said that a quarter point rate hike really is going not going to amount to much.
[SPEAKER_00]: What he said was important was not the cut itself, but the trajectory that the Fed is now on,
[SPEAKER_00]: and the anticipation that more cuts are going to follow.
[SPEAKER_00]: And he said that that is going to have a bigger impact than the actual cut.
[SPEAKER_00]: It's not what we've done, but what the markets now expect us to do.
[SPEAKER_00]: And of course, the problem with that is now that the Fed is building in the expectations of rate cuts.
[SPEAKER_00]: and the consensus that the Fed basically supported today was we're going to get at least two more quarter point cuts between now and the end of the year.
[SPEAKER_00]: So that would bring the Fed funds down to three and a half, right?
[SPEAKER_00]: But since the Fed is now baking these expectations in,
[SPEAKER_00]: If it doesn't deliver on what the market expects, that counts as a hike, even though it's not a hike.
[SPEAKER_00]: So the Fed kind of paints itself into a corner where it now sets an expectation that it needs to meet.
[SPEAKER_00]: or all hell could break loose, right?
[SPEAKER_00]: The markets could collapse.
[SPEAKER_00]: If the drug addicts on Wall Street don't get the monetary heroin that they were expecting.
[SPEAKER_00]: So this is a big problem in my mind for the way to fed operates.
[SPEAKER_00]: Because what if the data doesn't warrant another cut?
[SPEAKER_00]: In fact, it doesn't even warrant this cut.
[SPEAKER_00]: In fact, it warrants a hike.
[SPEAKER_00]: But once you get the market to build in and rely on what they expect you to do, and since the Fed is very reluctant to defy expectations, it's kind of locked in.
[SPEAKER_00]: So we know that more cuts are coming because that's part of the whole plan,
[SPEAKER_00]: And it said that a quarter point cut won't do it.
[SPEAKER_00]: And so it's going to have to deliver.
[SPEAKER_00]: Now that begs the question, well, why not just cut by 50 or 75 basis points right now?
[SPEAKER_00]: Why not get it over with and say, OK, here's the cut.
[SPEAKER_00]: And now let's see what happens.
[SPEAKER_00]: I mean, I guess, whatever reason defend doesn't operate that way.
[SPEAKER_00]: They somehow think that doing rates quarter at a time is a more effective policy.
[SPEAKER_00]: And in fact, there was a question that was asked.
[SPEAKER_00]: Uh, about whether the FOMC had considered doing 50 basis points because there certainly was some speculation.
[SPEAKER_00]: Obviously the Trump administration, uh, would want at least 50 if not quite a bit more than that.
[SPEAKER_00]: And Paul's answer was no, we didn't even talk about it.
[SPEAKER_00]: It wasn't discussed.
[SPEAKER_00]: Nobody thought we should do 50.
[SPEAKER_00]: And he said that that is a rare thing that we do if we think we're behind the curve or we got something wrong and we need to make a quick adjustment.
[SPEAKER_00]: And he basically said that we're right where we want to be.
[SPEAKER_00]: And so there's no reason to do 50 because we're right on pace with where we should be.
[SPEAKER_00]: We don't think we have to make up for anything.
[SPEAKER_00]: And I thought that maybe Pal might have said, look, you know, we got the jobs numbers wrong.
[SPEAKER_00]: because Powell was talking about how strong the labor market was.
[SPEAKER_00]: Based on the data that we now know was completely wrong.
[SPEAKER_00]: Right now, I thought it was wrong all the time, but I assumed that Powell didn't because he kept pointing to that data, all the job creation.
[SPEAKER_00]: and said, well, this is a very resilient economy.
[SPEAKER_00]: So, the labor market is a lot stronger than we expected.
[SPEAKER_00]: You know, it's, you know, even though we hiked rates, everything is copacetic, right?
[SPEAKER_00]: He was surprised that the resiliency and strength of the market.
[SPEAKER_00]: Now, we've had a bad jobs report recently, much worse than expected, and these huge revisions.
[SPEAKER_00]: And so, Powell was asked, you know, specifically
[SPEAKER_00]: if you had the data that you have now back then, meaning if you knew that the labor market was really this week, you know, months ago, would you have cut sooner, right?
[SPEAKER_00]: So are you a little bit behind where you might have been, had you had this accurate information earlier?
[SPEAKER_00]: And what Paul said, it actually surprised me.
[SPEAKER_00]: He said, no.
[SPEAKER_00]: and then he said he wasn't even surprised by the revisions, he expected them.
[SPEAKER_00]: In fact, that big revision of 925,000, which was the biggest revision at one time we've ever got.
[SPEAKER_00]: He said that that pretty much was in line with exactly what they expected.
[SPEAKER_00]: Well, if the Fed expected all these downward revisions, why didn't it say so?
[SPEAKER_00]: Why didn't it keep talking about how strong the economy was based on labor numbers, jobs numbers?
[SPEAKER_00]: And it knew we're going to be revised lower, it doesn't make any sense if the Fed actually knew that.
[SPEAKER_00]: And in fact, for the first time, Powell, and I never heard him say this.
[SPEAKER_00]: admitted that he knows that the job's numbers get an artificial boost specifically from the birth death model.
[SPEAKER_00]: He said, look, you know, they have this thing called the birth death model and it's just based on how many companies they think were started new companies and he said, look, you know, it's really just a guess.
[SPEAKER_00]: Nobody really knows exactly.
[SPEAKER_00]: That's the point I've been making every Friday, every first Friday of every month.
[SPEAKER_00]: when I talk about the birth Jeff model and say look when you have two or three hundred thousand jobs that are just assumed by the birth death model and the whole job creation is 12550,000
[SPEAKER_00]: How can you put any stock in it when all of those jobs could just have been made up?
[SPEAKER_00]: And so now, Paul finally admits that the data isn't reliable and that excuse high.
[SPEAKER_00]: Okay, well, where was he for the last year or more when all these numbers were coming out?
[SPEAKER_00]: And he was saying, yeah, this is a great market.
[SPEAKER_00]: Why didn't he talk about the BS birth death model back then?
[SPEAKER_00]: Why didn't he talk about all the downward revisions that he was expecting?
[SPEAKER_00]: if the Fed really expected these downward revisions, why didn't say the labor market was so strong?
[SPEAKER_00]: I mean, so either power was lying, then,
[SPEAKER_00]: about the labor market being strong when he knew it was weak or he's lying now about expecting the revisions to be this big right it's either one of the other he couldn't have been telling the truth back then right and telling the truth back now so that he either lied at one point now maybe he lied both times right who knows probably given all the other lies at these guys tell right anyway let me move on i've got a number of things that i highlighted here
[SPEAKER_00]: Okay, so tariffs, tariffs were obviously a big topic.
[SPEAKER_00]: And what Paul said about Tariffs, first of all, he said that tariffs are causing an increase in prices in goods prices, but not as much as he expected.
[SPEAKER_00]: So he's a little bit surprised, but he still wants to see because he admitted that it takes a little while for these tariffs to work their way through the system.
[SPEAKER_00]: But what he said he was afraid of,
[SPEAKER_00]: was that a one-time price adjustment from tariffs, which is still their base case.
[SPEAKER_00]: He was still worried and wanted to make sure that a one-time increase in prices didn't somehow work its way into a psychology that pyramided into a protracted
[SPEAKER_00]: increase in prices.
[SPEAKER_00]: Like somehow prices going up, set off a spiral of expectations and rise the wages and rising prices that would kind of let it get out of hand.
[SPEAKER_00]: And he wants to make sure that doesn't happen, which in my mind is is the feds way of already blaming higher inflation on tariffs, even though the real source of higher inflation is the Fed's monetary policy.
[SPEAKER_00]: And to the extent that Trump is responsible for higher inflation, it's not so much as tariffs, but the big beautiful bill and the deficit spending and the stuff is going to do with fany of Freddie.
[SPEAKER_00]: All that stuff is what's inflationary.
[SPEAKER_00]: I mean, the tariffs, again, to the degree they're inflationary, it's only because they trap dollars in the US.
[SPEAKER_00]: that otherwise would have been exported to buy imports and so those dollars stay here chasing whatever goods and services we have domestically and so by increasing the domestic supply of dollars you increase domestic prices because we're not exporting our inflation
[SPEAKER_00]: just the debt and the Fed's interest rates being too low and these rate cuts, the rate cuts that we're getting now are going to be more responsible for future inflation.
[SPEAKER_00]: And the weakness and the dollar, not just the weakness so far this year, but the weakness we're going to get now that the markets know that the Fed is going to be cutting rates into rising inflation.
[SPEAKER_00]: In fact, the Fed
[SPEAKER_00]: about the dual mandate about the risks on both sides, right?
[SPEAKER_00]: Pal admitted that we've got risks on both sides of the mandate that unemployment is likely to rise, although from a very low level, but inflation is also likely to rise.
[SPEAKER_00]: But based on, you know, the counter-aballancing factors in these two mandates, it still decided to air on the side of cutting because the Fed still believes they're restrictive and that even with this cut.
[SPEAKER_00]: They're still restrictive, just somewhat less restrictive than they were before, even though they're not restrictive at all, they're accommodative and now they're even more accommodative.
[SPEAKER_00]: And that is why we're going to have higher inflation, not necessarily the tariffs, although the tariffs are going to have some impact, a much saying it's not going to have any.
[SPEAKER_00]: But I think the most important observation that Powell offered on the tariffs,
[SPEAKER_00]: was that they are not being eaten by exporters.
[SPEAKER_00]: He made that clear.
[SPEAKER_00]: He said the data is clear that foreign producers are not
[SPEAKER_00]: paying the tariffs.
[SPEAKER_00]: They are not reducing their prices to make up for the tariffs.
[SPEAKER_00]: Now, that's something that a lot of members of the Trump administration and Trump are claiming.
[SPEAKER_00]: They're saying the reason that you haven't seen big price increases is because foreign producers are eating our tariffs.
[SPEAKER_00]: And the Fed said it has seen no evidence that that is the case.
[SPEAKER_00]: Now, what was Powell's reasoning for why we haven't seen bigger prices?
[SPEAKER_00]: Now, I know what reason is because the CPI lies, right?
[SPEAKER_00]: So, I think consumers are actually seeing higher prices.
[SPEAKER_00]: They're just not seeing it in the CPI.
[SPEAKER_00]: Because that's the way the CPI was designed.
[SPEAKER_00]: But I think that what Powell said is that the US companies,
[SPEAKER_00]: have yet to pass on the increase to their customers.
[SPEAKER_00]: And so far, a lot of the higher cost are being eaten, not by the foreign producers, but by the American importers.
[SPEAKER_00]: And he said it's only a question of time before they really start to pass that on to the consumer.
[SPEAKER_00]: The question is, how much will the American companies eat and how much will their customers eat?
[SPEAKER_00]: But either way, Americans are dining on these tariffs, right?
[SPEAKER_00]: not the foreigners.
[SPEAKER_00]: So we're going to have to swallow it one way or another.
[SPEAKER_00]: And it's not like the economy is off the hook to the extent that prices aren't increased because if the importer
[SPEAKER_00]: has to pay more, but he can't charge the consumer as much more than his profits go down.
[SPEAKER_00]: And so what does that mean?
[SPEAKER_00]: I have lower profits.
[SPEAKER_00]: Maybe that means I can hire fewer workers.
[SPEAKER_00]: Maybe I have to pay my workers less money.
[SPEAKER_00]: I can't give them a bonus.
[SPEAKER_00]: Um, may I can't make the investments I might need to make in new capital equipment because I don't have enough profits as because I had I couldn't raise my prices enough to offset this cost.
[SPEAKER_00]: So it still harms the economy.
[SPEAKER_00]: The idea that we're getting this money for free, that it's all just, you know, like man of from heaven, right?
[SPEAKER_00]: It's coming from China, it's coming from India, Canada, Mexico, that is all nonsense.
[SPEAKER_00]: all the money and Trump keeps talking about the trillions and trillions that he's collecting.
[SPEAKER_00]: Right.
[SPEAKER_00]: What do you mean trillions?
[SPEAKER_00]: Yes, he's collecting billions.
[SPEAKER_00]: Does he not know the difference between billions and trillions?
[SPEAKER_00]: I mean, the only thing that's in the trillions are the deficits that he's running.
[SPEAKER_00]: He's not collecting trillions in tariffs.
[SPEAKER_00]: Maybe over the course of a decade, they're expecting to get a trillions.
[SPEAKER_00]: But they're not getting trillions right now.
[SPEAKER_00]: I mean, there's no way the U.S.
[SPEAKER_00]: economy can afford to send all that money extra.
[SPEAKER_00]: to the government right now, but he's still pretending that whatever they're getting is coming from abroad, and it's just some free thing, this magical, you know, cure all that he discovered, right, then these other presidents were too stupid to pick up all this free money that we were a bunch of
[SPEAKER_00]: that you know, and we have all this, we could do stuff like some of these Republicans say, oh, let's give the taxpayer a rebate, let's rebate the tariff revenue so they can share in the bananza.
[SPEAKER_00]: But they're paying the tariffs.
[SPEAKER_00]: I mean, if you want to relieve, if you want to reward the consumers with the tariff money, then don't tariff them in the first place.
[SPEAKER_00]: That's how this ingenuous is holding us.
[SPEAKER_00]: Let's steal your money so we can claim credit for giving some of it back to you.
[SPEAKER_00]: Anyway, we've got a quick commercial break,
[SPEAKER_00]: All right, so there was quite a bit of discussion and rightly so, and I think there should have been even more of it, regarding the threats to Fed independence, given Trump's efforts to stack the Fed.
[SPEAKER_00]: Now there are no questions this time on Lisa Cook, but there was a question on Steve Moran who just attended his first FOMC meeting just approved earlier this week.
[SPEAKER_00]: And in fact, there was one loan vote that wanted five more rate cuts.
[SPEAKER_00]: So 125 basis points between now and the end of the year.
[SPEAKER_00]: And so there's a lot of speculation that that's Stephen, but pretty much the base case, most most people wanted two more quarter point cuts.
[SPEAKER_00]: There were some people that only wanted one.
[SPEAKER_00]: You know, so pretty much everybody wants to reduce rates.
[SPEAKER_00]: Of course, nobody's there at the raise rates.
[SPEAKER_00]: Although, I think there was one holdout today that didn't want to do anything that wanted to leave rates the same.
[SPEAKER_00]: I bet that guy went over his mortgage applications and probably, you know, everything he's ever done before he did that.
[SPEAKER_00]: Because, you know, you vote not to cut rates.
[SPEAKER_00]: You are right in the crosshairs for some kind of investigation.
[SPEAKER_00]: But there was a question specifically on Moran about whether or not there's a problem there given his close ties to the Trump administration and Paul kind of side-step bat and you know really didn't comment on it and acted like it was not a problem and in fact all the questions that related to Fed independence he kind of brushed aside talking about how they're committed
[SPEAKER_00]: the fact that the markets may no longer view the Fed is independent given the political nature of recent appointees and the obvious next FOMC chairman who is going to replace Powell.
[SPEAKER_00]: Nor you know anyone talk about the fact that the Supreme Court you know like I've been saying may in fact strike down the very concept of Fed independence as being unconstitutional.
[SPEAKER_00]: Another interesting discussion had to do with the wide spread views, apparently.
[SPEAKER_00]: I don't think their views are that wide spread, right?
[SPEAKER_00]: If some people want 25 basis points and some people want 50 basis points to me, there's not that much of a difference there.
[SPEAKER_00]: I mean, if some people wanted 50 basis point hikes, fine, right?
[SPEAKER_00]: If you had a Peter ship on the FOMC, yes, maybe you'd have a divergence of opinion.
[SPEAKER_00]: But as far as I'm concerned, they're all on the same page.
[SPEAKER_00]: They all want more inflation, they all want to cut braids, just a question of how much in how soon.
[SPEAKER_00]: So I don't see that as a vast divergence of opinion that Palace discussing that apparently there is at the Fed.
[SPEAKER_00]: They seem pretty uniform to me, but he said that he's not surprised by this because nobody really knows what's going to happen.
[SPEAKER_00]: which is one of the few honest things that he says.
[SPEAKER_00]: Yes, they don't have a goddamn clue.
[SPEAKER_00]: What's going to happen?
[SPEAKER_00]: So what's the point of having an FOMC if they really don't know what's going to happen?
[SPEAKER_00]: Right?
[SPEAKER_00]: That's we don't need them.
[SPEAKER_00]: And we certainly don't need to have a press conference where they can make forecasts that they have absolutely no confidence in.
[SPEAKER_00]: In fact, he was asked about his forecasts.
[SPEAKER_00]: and he said that they normally don't have much confidence in their forecast and particularly now, given all the extra uncertainty that we supposedly have now, he said he doesn't even know any forecasters who have any confidence in their forecasts.
[SPEAKER_00]: Now, what is the point of having a forecaster if they have no confidence in what they're forecasting?
[SPEAKER_00]: Right?
[SPEAKER_00]: I mean, is that with, I guess, would not be like the weatherman, and he, he, gives a weather report.
[SPEAKER_00]: And he says, well, it may rain.
[SPEAKER_00]: It may not.
[SPEAKER_00]: I really have no clue.
[SPEAKER_00]: I have no confidence in this forecast.
[SPEAKER_00]: Well, then what's the point of the forecast?
[SPEAKER_00]: if you can't have some kind of degree of confidence, yeah, it's going to rain, right?
[SPEAKER_00]: Because people, you know, they plan their days around these forecasts, like should I have a picnic?
[SPEAKER_00]: Oh, no, it's going to rain.
[SPEAKER_00]: I bet if the weatherman says, well, you know what the hell, man, it might be sunny.
[SPEAKER_00]: I really don't know.
[SPEAKER_00]: I mean, well, you know, what do you need to do?
[SPEAKER_00]: And so,
[SPEAKER_00]: It's for foul with Paul was saying this.
[SPEAKER_00]: In fact, there's an old joke that God created economists to make weathermen look good because you know, the weathermen don't always get it right.
[SPEAKER_00]: Well, the economists never get it right, especially the ones at the Fed.
[SPEAKER_00]: But now, Paul actually admitted that they have no confidence, which brings me probably to the most startling admission of the entire press conference.
[SPEAKER_00]: Right?
[SPEAKER_00]: I, I, you know, put something about x. I don't know if anybody else is going to pick up on this, the way I did.
[SPEAKER_00]: But somebody pointed out that the Fed has a forecast, which is that inflation will be 2% in two years.
[SPEAKER_00]: Right.
[SPEAKER_00]: Now, right now it's in the mid-3s.
[SPEAKER_00]: Right?
[SPEAKER_00]: No.
[SPEAKER_00]: So it's not even close to two.
[SPEAKER_00]: But the forecast is that two years from now,
[SPEAKER_00]: Well, I have two percent inflation.
[SPEAKER_00]: Now, of course, we haven't had two percent inflation now in like five years, right?
[SPEAKER_00]: The last time we had something close to two was two thousand.
[SPEAKER_00]: So we've had two thousand one, two, three, four, five.
[SPEAKER_00]: So five years of above two percent inflation, and now we're gonna have two more, right?
[SPEAKER_00]: So now seven years, seven years above target.
[SPEAKER_00]: Now you would think we've been above target for so many years, why is the Fed cutting rates?
[SPEAKER_00]: Does the target not mean anything?
[SPEAKER_00]: Clearly, whatever they're doing ain't working, right?
[SPEAKER_00]: I mean, why aren't they being as aggressive to get inflation back down to 2% as they were to get an up to 2% when they were doing quantitative easing like crazy and zero percent interest rates, right?
[SPEAKER_00]: It was a real emergency to get one and a half percent inflation to two.
[SPEAKER_00]: But to get three and a half to two, not only is it not an emergency, we'll just cut some rates, right?
[SPEAKER_00]: But so the question was, you have a two year forecast that inflation is going to be 2% and the guy or gal, I forget again, the gender.
[SPEAKER_00]: But the reporter said,
[SPEAKER_00]: two years ago you had the same forecast.
[SPEAKER_00]: So two years ago you said we'd have two percent inflation in two years and we don't.
[SPEAKER_00]: And now you're saying that we'll have two percent inflation in two years.
[SPEAKER_00]: So
[SPEAKER_00]: Will we?
[SPEAKER_00]: I mean, how confident are you that you're going to hit it this time?
[SPEAKER_00]: And he basically let the cat out of the bag and said, we don't know.
[SPEAKER_00]: He basically said, look, our goal is two percent inflation.
[SPEAKER_00]: And so that's our forecast.
[SPEAKER_00]: We make a forecast that's consistent with our goal.
[SPEAKER_00]: So, in other words, it's just wishful thinking.
[SPEAKER_00]: He says, look, we asked the FOMC to come up with policies that they expect will result in 2% inflation in 2 years.
[SPEAKER_00]: So the idea, the forecast of 2% inflation in tears is not based on any actual forecast.
[SPEAKER_00]: There's no methodology.
[SPEAKER_00]: There's no statistics or any kind of regression or anything that gets them to 2%.
[SPEAKER_00]: They only forecast 2%.
[SPEAKER_00]: Because that's their target.
[SPEAKER_00]: their target is 2% inflation so they just had to come up with a time frame okay we're above our target what is the time frame that we're going to use for our forecast and from any point in time it's always two years so no matter when you talk to the FOMC they're going to have a forecast of 2% inflation in two years
[SPEAKER_00]: Now, now, why two years?
[SPEAKER_00]: Well, because if it was six months, maybe that's too short, right?
[SPEAKER_00]: And it'd be too obvious that they didn't have the target.
[SPEAKER_00]: So, it's a target that you never approach, because no matter how much time goes by, it's always two years away, because that's their policy is to forecast two percent inflation in two years.
[SPEAKER_00]: Maybe they like the symmetry, two and two, right?
[SPEAKER_00]: That's their rallying cry, right?
[SPEAKER_00]: You know, two and two, remember it was like,
[SPEAKER_00]: The 15 hour minimum wage, whatever that was, I forget it was a 15 for 15, I forget, but it's it's two for two, right?
[SPEAKER_00]: Yeah, two, two percent and two years there right that that's there that's their mantra right means absolutely nothing So this should be an emission to everybody to take their forecasts with a huge not a grain like a massive ball of salt
[SPEAKER_00]: it's meaningless.
[SPEAKER_00]: And so if the Fed has no idea where inflation is going to be in two years, but they know where it is right now, what businesses do they have in cutting interest rates, as far as they know, it's going to be 5% in two years.
[SPEAKER_00]: They're clueless, right?
[SPEAKER_00]: So this is all political, they're trying to prop up the economy.
[SPEAKER_00]: You know, they're trying to
[SPEAKER_00]: deal with the third mandate that they didn't even admit they had, right?
[SPEAKER_00]: Because somebody asked a pal today about the so-called third mandate that is being discussed in Congress or the Trump Administration.
[SPEAKER_00]: Remember, the two mandates that the Fed acknowledges are price stability,
[SPEAKER_00]: and full employment.
[SPEAKER_00]: Now, price stability has been redefined as prices that go up every year by 2% right, which is no longer stability.
[SPEAKER_00]: Stable means unchanged.
[SPEAKER_00]: So price stability would be the prices we had last year.
[SPEAKER_00]: They're the same as this year.
[SPEAKER_00]: That's stable.
[SPEAKER_00]: So why doesn't the Fed change its goal from price stability to prices that go up by 2% every year?
[SPEAKER_00]: Every increasing prices.
[SPEAKER_00]: And in fact, it's not 2% because it's much higher than 2% and they're not doing anything about it.
[SPEAKER_00]: In fact, they're cutting rates.
[SPEAKER_00]: So that's mandate number one.
[SPEAKER_00]: And then of course, there is full employment.
[SPEAKER_00]: But you know how to help you know what that is.
[SPEAKER_00]: Because if you base it on the official employment numbers,
[SPEAKER_00]: uh... you don't get a real picture because they're all a bunch of a bunch of bs but those are the two mandates the third one is moderate long-term interest rates now he was asked about that you know what about that mandate and pal basically said look that is in our mandate
[SPEAKER_00]: we don't make policy based on that.
[SPEAKER_00]: And so we don't acknowledge that.
[SPEAKER_00]: But I think that is the mandate that the Trump administration is going to seek to impose on the Fed.
[SPEAKER_00]: But the reality is, the only way to really achieve moderate, long-term interest rates.
[SPEAKER_00]: And what is moderate anyway?
[SPEAKER_00]: I mean, I think what we've got now is already moderate, right?
[SPEAKER_00]: And people think, no, 4% is too high.
[SPEAKER_00]: I think that's pretty moderate.
[SPEAKER_00]: But, you know, moderate is, you know, I guess in the eye of the beholder, right?
[SPEAKER_00]: Because Trump wants interest rates to go to zero, and I guess anything north of that is high, right?
[SPEAKER_00]: But the only way that you can really achieve moderate long-term interest rates is to have low inflation.
[SPEAKER_00]: So it's the inflation mandate that takes care of long-term interest rates because one of the main factors that determines long-term interest rates is your expectation for the rate of inflation.
[SPEAKER_00]: That's a big part of it.
[SPEAKER_00]: Um, and so the best way for the Fed to control interest rates or to keep the moderate is to keep inflation low.
[SPEAKER_00]: So it doesn't even need that mandate.
[SPEAKER_00]: If it fulfills the mandate of real price stability, then you'll probably have moderate long-term interest rates.
[SPEAKER_00]: You know, but if you make that an actual mandate where the Fed has to do something about interest rates that are too high, that will backfire because how does the Fed do that?
[SPEAKER_00]: If the Fed determines that long-term interest rates are not moderate, that they're too high, let's say they're 6%.
[SPEAKER_00]: And people think moderate is 3%, well, how do you get 6% interest rates down to 3% long term?
[SPEAKER_00]: Well, the real way would be to jack up short term rates quite a bit, raise interest rates in the short run to stamp out inflation and get longer term rates to come back down.
[SPEAKER_00]: But that's not what they would do.
[SPEAKER_00]: The what what what what.
[SPEAKER_00]: people are going to want the Fed to do is quantitative easing, go out into the market and buy up bonds to bid up prices and bring down yields.
[SPEAKER_00]: But if the Fed does that, they end up creating inflation to buy the bonds.
[SPEAKER_00]: They have to print more money and use that money to buy up the bonds.
[SPEAKER_00]: But higher inflation just raises interest rates.
[SPEAKER_00]: It causes a higher premium.
[SPEAKER_00]: Uh, so even if they bring down rates on treasuries, they're going to bring up rates on everything else, and they're going to bring up inflation.
[SPEAKER_00]: And so they're going to fail on their inflation mandate.
[SPEAKER_00]: So if they try to bring down rates by creating inflation, now inflation goes up.
[SPEAKER_00]: Now how are they, what are they going to deal with that mandate?
[SPEAKER_00]: Now they've got to do quantitative tightening, they've got to sell the bonds they just bought and drive a long-term interest rates back up.
[SPEAKER_00]: So it's really an impossible mandate.
[SPEAKER_00]: In fact, they really shouldn't even have an employment mandate.
[SPEAKER_00]: They should have one mandate, which is the original Fed had one mandate.
[SPEAKER_00]: I mean, once they introduced the mandate, being before that, it didn't have any mandate.
[SPEAKER_00]: But when they gave it a mandate, the only one that gave it was price stability.
[SPEAKER_00]: And when they gave it that mandate, they did not mean prices that went up 2% a year.
[SPEAKER_00]: Because if that's what they meant, that's what they would have said.
[SPEAKER_00]: They would have mandated that.
[SPEAKER_00]: No, they mandated stability.
[SPEAKER_00]: And they obviously knew what the word meant, right?
[SPEAKER_00]: They weren't that stupid.
[SPEAKER_00]: They understood the definition of stable, right?
[SPEAKER_00]: And so that was the mandate.
[SPEAKER_00]: But that's what they should go back to.
[SPEAKER_00]: and Powell admitted that even though he thinks that there's downside risks to the labor market and upside you know to unemployment.
[SPEAKER_00]: He said that we're very low our unemployment rate is very low right 4.2.
[SPEAKER_00]: It's only low if you ignore all the unemployed people that we don't count.
[SPEAKER_00]: It's so disingenuous to look at that number and ignore use 6 which is over 8%
[SPEAKER_00]: Now, would anybody call 8% unemployment low?
[SPEAKER_00]: No, of course not.
[SPEAKER_00]: But use six is closer to the actual rate than the official rate, you three, right?
[SPEAKER_00]: So do we have 8% unemployment?
[SPEAKER_00]: But again, I said closer, because that's still too low, because use six still doesn't count a lot of people who once upon a time used to count.
[SPEAKER_00]: So, you know, based on the way the Fed or the government used account on employment, if we still measured unemployment the way we did in the 70s, it would be over 10%.
[SPEAKER_00]: Now I don't think any FOMC chairman back in the 1970s would have described 10% on employment as low.
[SPEAKER_00]: Like, hey, we're in pretty good shape.
[SPEAKER_00]: We only have 10% on employment, right?
[SPEAKER_00]: Nobody would have said that.
[SPEAKER_00]: But we got 10% unemployment now and we're able to pretend that we don't because we're not counting all the unemployed people that we used to count.
[SPEAKER_00]: Um, another question was on quantitative height in, which was a pretty good question, actually.
[SPEAKER_00]: A reporter asked, okay, you're cutting rates.
[SPEAKER_00]: Why are you still doing quantitative tightening, right?
[SPEAKER_00]: Aren't those working at cross purposes, right?
[SPEAKER_00]: You're easing and you're tightening at the same time.
[SPEAKER_00]: It's like you're stepping on the gas and you're stepping on the brakes.
[SPEAKER_00]: Like make a decision, right?
[SPEAKER_00]: Decide and do one and not the other.
[SPEAKER_00]: And what he said was, well, you know,
[SPEAKER_00]: we're not doing a lot.
[SPEAKER_00]: That was his explanation.
[SPEAKER_00]: Yeah, we're still doing it, but it's such a small amount.
[SPEAKER_00]: We don't think it's going to matter.
[SPEAKER_00]: Well, if it's such a small amount and it's not going to matter, then what's the point of even doing it?
[SPEAKER_00]: I think he's kind of afraid of the message it will send, because I think obviously once you stop QT, you immediately
[SPEAKER_00]: And so maybe Pal does want to open that door, just yet, but he will, there's no doubt in my mind.
[SPEAKER_00]: In fact, when he talked about it, he said that their goal was to reduce their reserves from abundant to ample.
[SPEAKER_00]: And he said that
[SPEAKER_00]: They were still a bit abundant and they're not quite at ample.
[SPEAKER_00]: So that's why we've got this slow runoff because we're trying to run, go from abundant to ample.
[SPEAKER_00]: But what the hell's the difference?
[SPEAKER_00]: I mean, I guess you can look up in the dictionary,
[SPEAKER_00]: what's abundant and what's ample.
[SPEAKER_00]: I don't know.
[SPEAKER_00]: I mean, if your basement was flooded, and, you know, would it be, if someone said, yeah, there's ample amount of water flooding your basement or there's a abundant amount of water.
[SPEAKER_00]: I don't know, would you really know that, oh, crap, I'm glad it's only ample and not abundant?
[SPEAKER_00]: I mean, ample is kind of abundant.
[SPEAKER_00]: I mean, they almost mean the same thing.
[SPEAKER_00]: If you have an ample supply of something, well, you have an abundant supply.
[SPEAKER_00]: And if you have an abundant supply, well, it's ample, right?
[SPEAKER_00]: I mean, it's really almost like a distinction without a difference.
[SPEAKER_00]: So it's like, it's almost like, pal is not really telling us what he wants to do, because he's making up this words.
[SPEAKER_00]: you know, uh, and and just saying, yeah, you know, we're just trying to go from a abundant to ample.
[SPEAKER_00]: What what what what what the hell is that mean?
[SPEAKER_00]: I mean, it's almost like, you know, ludicrous speed.
[SPEAKER_00]: Like how how much faster is that than just ridiculous speed, right?
[SPEAKER_00]: I don't know.
[SPEAKER_00]: But, um, anyway, uh, housing authority.
[SPEAKER_00]: was a as a discussion.
[SPEAKER_00]: And yes, we have a problem with housing affordability and one of the main reasons that housing is unaffordable is the Fed.
[SPEAKER_00]: It's not only the Fed, but they are a big factor because they kept interest rates so low.
[SPEAKER_00]: they boosted housing prices by keeping mortgage rates low, allowing people to bid a prices.
[SPEAKER_00]: And one of the biggest factors is the limited supply now of homes because of the Fed's policy mistakes in the past.
[SPEAKER_00]: And I pointed this out.
[SPEAKER_00]: It's not like I Monday morning quarterback this.
[SPEAKER_00]: I talked about it while it was happening.
[SPEAKER_00]: I knew this would become an issue before anybody even talked about it before it even was an issue.
[SPEAKER_00]: I knew it would be an issue.
[SPEAKER_00]: I knew that we were creating a problem by letting all of these homeowners refinance their 30-year mortgages.
[SPEAKER_00]: at two and a half three percent.
[SPEAKER_00]: I knew it.
[SPEAKER_00]: A. I knew it was a disaster for the lenders who are going to get stuck with this paper.
[SPEAKER_00]: But I also knew that it was going to trap people in their homes.
[SPEAKER_00]: because there's no way they're going to move when they have to give up that mortgage.
[SPEAKER_00]: Because for a lot of people, the biggest asset isn't the house that you live in.
[SPEAKER_00]: It's the mortgage that goes along with it.
[SPEAKER_00]: It's the ability to stay in that house and pay a low mortgage that in many cases is lower than what you would rent something for, because rents go up every year.
[SPEAKER_00]: But your mortgage is fixed, if you were smart, that's what I told people, back then I said, look, if you buy a house, just make sure you get a 30-year mortgage.
[SPEAKER_00]: Don't get a short-term mortgage, get the biggest mortgage and have it over the longest period of time.
[SPEAKER_00]: Because I said you're going to make money as a debtor.
[SPEAKER_00]: Not necessarily as a homeowner.
[SPEAKER_00]: as a debtor, so get yourself a mortgage, that's the value.
[SPEAKER_00]: The mortgage is an asset to the homeowner, and it's a liability to whoever is holding on it, whether it's a bank, whether it's a pension fund, an insurance company, it's a liability.
[SPEAKER_00]: You're collecting a coupon.
[SPEAKER_00]: If you've got a 30-year mortgage that you own, and let's say there's 25 more years on it, and you're getting three and a half percent.
[SPEAKER_00]: You know, that's a liability.
[SPEAKER_00]: You can get more than that in a money market.
[SPEAKER_00]: So you're losing money because you have this mortgage.
[SPEAKER_00]: You're income from that paper is less.
[SPEAKER_00]: And if you have to turn around and sell the mortgage to get out of jail, then you take a loss in principle, which is something that the banks don't want to do.
[SPEAKER_00]: They pretend these losses don't exist because they're going to hold them to maturity.
[SPEAKER_00]: Well, okay, maybe they will.
[SPEAKER_00]: Maybe they won't.
[SPEAKER_00]: Depends on liquidity.
[SPEAKER_00]: But assuming they do, they're holding that money losing mortgage to maturity.
[SPEAKER_00]: And it's a long time for maturity.
[SPEAKER_00]: But what I also said is that people were not going to want to leave their houses, which was going to help create a shortage of homes.
[SPEAKER_00]: because the people who own homes can afford to leave and the people who need homes can't afford to buy because the current mortgage rates are much higher and
[SPEAKER_00]: the prices are still high now what is the solution to this obvious government created problem well the government solution is hey let's you know lower interest rates get mortgage rates down so people can afford to buy these over price homes by taking on a lot more debt.
[SPEAKER_00]: That is a bad solution.
[SPEAKER_00]: That is a too wrong somehow make a right solution.
[SPEAKER_00]: And part of this solution is, hey, let's privatize Fannie and Freddie, and then let's really lower the lending standards with this new government guarantee.
[SPEAKER_00]: I was watching this guy on CNBC talking out of both sides of his mouth today.
[SPEAKER_00]: I don't know if he was from the administration or who he was.
[SPEAKER_00]: But he was talking about the upcoming Fannie and Freddie IPO.
[SPEAKER_00]: And he admitted.
[SPEAKER_00]: You know, they're not going to have an explicit government guarantee because, you know, that would require Congress to Congressional approval to actually have the government guarantee banning in front.
[SPEAKER_00]: So we're not going to get an explicit guarantee.
[SPEAKER_00]: But what we're going to get is the definitive statement in writing by the government that the government stands behind all these mortgages.
[SPEAKER_00]: at all their deaths.
[SPEAKER_00]: And if anybody buys, Fannie and Freddie debt, we will let everybody know that the US government will bail them out if they get into trouble.
[SPEAKER_00]: So if Fannie and Freddie are ever in trouble, the US government will stand behind them and make sure that nobody who bought any Fannie and Freddie debt loses any money.
[SPEAKER_00]: Now, wait a minute, the guy just said there was gonna be no explicit guarantee and then he described an explicit guarantee.
[SPEAKER_00]: Of course, he then said,
[SPEAKER_00]: that we preserve the implicit guarantee.
[SPEAKER_00]: No, it ain't implicit if the government officially acknowledges it.
[SPEAKER_00]: The whole reason it was implicit before is because the government officially denied it.
[SPEAKER_00]: The government said we don't stand behind Fettie and Fettie.
[SPEAKER_00]: You know, no, no, no, no, you know, you buy it, you know, you're, you're taking a risk.
[SPEAKER_00]: We're, we're, we're not, we're not behind those, that that's what they said.
[SPEAKER_00]: It was written in all the perspectives as whenever you bought Danny and Freddie bonds.
[SPEAKER_00]: It said, these are not guaranteed by the US government buyer beware.
[SPEAKER_00]: You could lose right now.
[SPEAKER_00]: The buyers thought, wow, you know, the government don't never let Fanny and Freddie go, but they'll never let us lose money in Fanny and Freddie.
[SPEAKER_00]: houses that you want to buy expensive.
[SPEAKER_00]: We just want to make it easier for you to go into debt up to your eyeballs with government guaranteed mortgages and low rates so you can afford to massively overpay for this house.
[SPEAKER_00]: That is an ass-in-ine policy, right?
[SPEAKER_00]: That's the kind of policies that created the 2008 financial crisis.
[SPEAKER_00]: But that's what they're wanting.
[SPEAKER_00]: Right.
[SPEAKER_00]: That's what they're wanting to do.
[SPEAKER_00]: Hey, solve this problem.
[SPEAKER_00]: We have people can't afford to buy houses.
[SPEAKER_00]: We need lower mortgage rates.
[SPEAKER_00]: No, we need lower home prices.
[SPEAKER_00]: Right.
[SPEAKER_00]: That solves every affordability problem.
[SPEAKER_00]: right what I mean I've gone over these examples before but you know how many people bought the first cell phone not many people member Gordon get go in Wall Street at one of these big you know things look like a shoe box he was holding on to yeah those were like multiple several thousand dollars back when you know you could have bought a decent use car for that amount of money they were toys for the rich
[SPEAKER_00]: Right.
[SPEAKER_00]: I remember you when I had my first cell phone, I didn't even like to use it because it was so expensive.
[SPEAKER_00]: I had it just so I can have it, but I barely use it.
[SPEAKER_00]: You know, I waited for the evenings or the weekends to make my calls because that's when the race went down.
[SPEAKER_00]: Right.
[SPEAKER_00]: It's someone called me during the day as I, oh, I can't talk.
[SPEAKER_00]: I'm on my cell phone to two expensive.
[SPEAKER_00]: I mean, of course.
[SPEAKER_00]: So, but why does everybody own cell phones now?
[SPEAKER_00]: Because they're so cheap and it costs nothing to make it call.
[SPEAKER_00]: Right?
[SPEAKER_00]: So, how did you solve the cell phones or two expense or problem?
[SPEAKER_00]: Did the government come up with all kinds of loans?
[SPEAKER_00]: So, people who bought borrow money to buy an expensive cell phone?
[SPEAKER_00]: No, they allowed the market to lower the price of cell phones.
[SPEAKER_00]: Same thing with, you know, I remember the first time I saw a high-deft television.
[SPEAKER_00]: I walked into like one of these best buys or, you know, whatever it was.
[SPEAKER_00]: And I saw this high-deft television and I was just amazed that it looked like I was looking through the window.
[SPEAKER_00]: I had never seen a picture like that.
[SPEAKER_00]: And I really wanted one, but it was like $10,000 to buy it.
[SPEAKER_00]: And this is like, when $10,000, again, was a lot of money.
[SPEAKER_00]: And especially for me, because I was probably, I don't know, my early 30s or something.
[SPEAKER_00]: I was going to drop 10 grand on one TV.
[SPEAKER_00]: And what even that big a TV?
[SPEAKER_00]: But now, of course, I got flat screen TVs or plasma high-deft TVs in like every room in the house.
[SPEAKER_00]: I got them in my bathroom, right?
[SPEAKER_00]: I got, you know, I got three in my billion room.
[SPEAKER_00]: I mean, they're all over the place, right?
[SPEAKER_00]: Why do I have so much, because they're so cheap?
[SPEAKER_00]: Yeah, I mean, I have more money now.
[SPEAKER_00]: You know, it's like that I'm going to see the scene and back to the future where Marty McFly goes back to the 1950s and he's having dinner and they're all watching, you know, the honeymooners on TV and they asked Marty, do you have a TV at your house?
[SPEAKER_00]: And he says, yeah, we have two.
[SPEAKER_00]: And the response, someone says, wow, you must be rich.
[SPEAKER_00]: And then the mother says, no, no, he's just kidding.
[SPEAKER_00]: Nobody has two TVs.
[SPEAKER_00]: And the reason nobody had two TVs was because they were so expensive.
[SPEAKER_00]: Now even the people on welfare have more than two TVs.
[SPEAKER_00]: But what solved that problem?
[SPEAKER_00]: Lower prices, not government loans to buy TVs, but the market bring it down prices.
[SPEAKER_00]: So that is the solution to the home problem.
[SPEAKER_00]: is to let prices go down.
[SPEAKER_00]: Now, last point I want to make on this was Trump, and Powell was asked about, is he concerned that you're cutting interest rates?
[SPEAKER_00]: When the stock market is at an all-time record high.
[SPEAKER_00]: In fact, it made an all-time record high today, and we're just starting a new round of rate cuts.
[SPEAKER_00]: You know, aren't you worried about like asset bubbles?
[SPEAKER_00]: I mean, did you not learn anything from the mistakes of the past?
[SPEAKER_00]: And apparently not.
[SPEAKER_00]: mean, I already know the Fed never learns from its mistakes.
[SPEAKER_00]: All it does is repeat them on a bigger scale and then act surprised when the same thing happens again, only worse.
[SPEAKER_00]: Anyway, let me talk a little bit about the market reaction to the Fed.
[SPEAKER_00]: We did get a new record high in the price of gold today.
[SPEAKER_00]: Just barely.
[SPEAKER_00]: I think we touched 3700.
[SPEAKER_00]: but it was a roller coaster ride, you know, silver was down almost two bucks.
[SPEAKER_00]: Like there was a big sell off silver almost got the 43 yesterday and before the open, there was just, I think they really rushed a lot of the stops and they had a big drop and silver almost $2.
[SPEAKER_00]: and a goal was down like 30, 30 bucks, 40 bucks, but then it was up like 30 bucks after the news came out.
[SPEAKER_00]: So it went on a roller coaster ride, but it only closed down about, I don't know, $20, $30.
[SPEAKER_00]: So goals around 36, 60.
[SPEAKER_00]: I mean, not too far below the record high.
[SPEAKER_00]: uh... they were quite a few gold stocks you know that close positive on the day you know they were down quite a bit yesterday even though there was just a small moved down but you know i think that this rate cut and the fact that we're getting two more at a minimum between now and the end of the year that i think ensures uh... smooth sailing for new record highs i still think we have a good shot a hitting four thousand dollar gold by the end of the year and fifty dollar silver
[SPEAKER_00]: Uh, so right now, you still got quite a bit of upside in both, especially silver is now back below 42, so you got about a 20% gain between here and 50 bucks.
[SPEAKER_00]: Uh, that's not bad.
[SPEAKER_00]: Now, of course, I don't think silver is going to stop at $50.
[SPEAKER_00]: I think it's going much higher, but it may not get much higher this year.
[SPEAKER_00]: So I think by the end of the year, that's a realistic target for silver.
[SPEAKER_00]: So I would buy it now, shift gold.com, right?
[SPEAKER_00]: We don't just sell a gold, you know, we sell gold and silver.
[SPEAKER_00]: But the mining stock charts,
[SPEAKER_00]: look even better to me, you know, the GDXJ hit a new, I think record high.
[SPEAKER_00]: It finally took out its high from 2011, but the GDX, which has been acting stronger of late,
[SPEAKER_00]: still needs to rise about 60% from here, I think, to get back to its 2011 high.
[SPEAKER_00]: But based on the chart, it looks like it's going to go there very quickly.
[SPEAKER_00]: So I would, you know, I would be buying these stocks as quickly as I can, you know, my favorite way to participate is my own goal fund, the Europe Pacific goal fund.
[SPEAKER_00]: EPG IX is the no-load symbol.
[SPEAKER_00]: You could pick that up anywhere and I'm not just saying you should buy gold stocks or my fund because I make some money Of course, I don't make any money if you just buy Both stocks at some random discount broker, but I'm happy regardless But I think our fund has a lot to offer and I think we're going to outperform over the wrong long term But the real reason I want my audience to buy them is because I think you're gonna make a lot of money if you do It's not that there's no downside risk
[SPEAKER_00]: There is, but I think it's minimal when you compare it to the upside potential, which I think is enormous.
[SPEAKER_00]: And unlike the Fed, I have a lot of confidence in my forecast.
[SPEAKER_00]: I'm very sure that I'm right.
[SPEAKER_00]: I don't guarantee that I'm right, but I think I am.
[SPEAKER_00]: The Fed has no clue, right?
[SPEAKER_00]: But my forecast is not just a guess.
[SPEAKER_00]: It's based on my understanding of monetary and fiscal policy that apparently is lacking.
[SPEAKER_00]: at at at the fed.
[SPEAKER_00]: But we did have a bit of an up move in interest rates on the long end.
[SPEAKER_00]: The 30-year close a little higher on the day.
[SPEAKER_00]: And that's been my forecast.
[SPEAKER_00]: The 10-year is 4.09.
[SPEAKER_00]: A couple of days ago was down like 402, 403, I think we're headed higher from here.
[SPEAKER_00]: I don't think the long end of the bond market is going to react positively to the Fed cutting interest rates when inflation is not only well above 2% but headed in the
[SPEAKER_00]: opposite direction.
[SPEAKER_00]: The stock market, again, hit record highs.
[SPEAKER_00]: I think the Dow Jones hit a record high today and it closed in record territory above 46,000.
[SPEAKER_00]: Dow was up 260 points today.
[SPEAKER_00]: The Nasdaq was actually a little bit lower on the day as was the S&P, neither hit record highs.
[SPEAKER_00]: It was just the the Dow, Russell 2000, not a record high, but also up on the day.
[SPEAKER_00]: But overall, the stock market likes the news.
[SPEAKER_00]: that the Fed is is cutting interest rates, but I can assure everybody that this is a major policy mistake.
[SPEAKER_00]: This is going to go down.
[SPEAKER_00]: I think maybe as the biggest mistake and that's saying a lot because they've made so many big mistakes like the ones that led to the 2008 financial crisis and flating that housing bubble and the mistakes
[SPEAKER_00]: So they've made a lot of mistakes cutting rates, and this could be the worst one, because inflation is headed much, much higher, and they've already put themselves on a preset course to cut rates.
[SPEAKER_00]: And they're not going to change from this course, because they know what it might mean to the market.
[SPEAKER_00]: So they're going to have to rationalize all the updates and inflation.
[SPEAKER_00]: uh... and attributed to the one-off effects of tariffs uh... they probably don't want to say transitory so i guess they'll come up with another word uh... that that means transitory uh... like with abundant and ample may you know train that that transitory what transient or temporary i don't know whatever though they'll come up with a synonym that means the same thing but doesn't quite a subjective to the same degree of ridicule
[SPEAKER_00]: And you got to load up on inflation hedges, all your investments I think should be non-US dollar.
[SPEAKER_00]: The dollar's got a one-way ticket down, you don't want to go down with that ship, you want to abandon ship, and you want to buy foreign stocks that continue to eat the lunch of the US stock market year to date, despite the fact that it's hitting nominal record highs.
[SPEAKER_00]: So you want to, you know, all the European Pacific funds, I think are great.
[SPEAKER_00]: The dividend payer fund, the value fund, the emerging markets.
[SPEAKER_00]: I think are going to be the stars of 2026, you know, just my value and dividend payer funds are doing better this year, but I expect a major move up in emerging markets next year and the year after that and the year after that.
[SPEAKER_00]: Because I think that it's the transition is out of U.S.
[SPEAKER_00]: markets into international markets
[SPEAKER_00]: to emerging markets, but all of it non-dollar and commodity focused energy, I think the energy prices are still low, so energy stocks are still very cheap, not maybe not as cheap as the miners, but they're still cheap, we still have good allocations there, so just brace yourself,
[SPEAKER_00]: Uh, we know how this race is going to end.
[SPEAKER_00]: You just got a position yourself.
[SPEAKER_00]: Anyway, uh, have a great west of the week.
[SPEAKER_00]: Don't forget, I do now on my shift, a gold, uh, uh, YouTube channel, the Friday Marketwap.
[SPEAKER_00]: And I'm planning on doing another market wrap on Friday.
[SPEAKER_00]: So if you're not now a subscriber to the shift gold, a YouTube channel, go and subscribe.
[SPEAKER_00]: So you get a reminder when that podcast is up because I do think we could have new record highs in the price of gold by Friday.
[SPEAKER_00]: And so I'll have a lot more to discuss.
[SPEAKER_00]: And by the way, if you haven't subscribed to this YouTube channel, I'm still not at 600,000.
[SPEAKER_00]: I mean, I don't know if I'm even above 595,000.
[SPEAKER_00]: I've been within 500 of that for all year.
[SPEAKER_00]: It's almost an impossible hill for me to summit here
[SPEAKER_00]: But I want to see if I can, if I can do that, other people have done it.
[SPEAKER_00]: So stands to reason I should be able to do it too.
[SPEAKER_00]: So subscribe to my YouTube channel and then tell your friends to subscribe too.
[SPEAKER_00]: Let's, you know, just let's make it a challenge.
[SPEAKER_00]: Like to see if we can do it, right?
[SPEAKER_00]: See if we can, you know, set a goal and then actually achieve it.
[SPEAKER_00]: You know, make kind of like,
[SPEAKER_00]: Defense 2% inflation target.
[SPEAKER_00]: They have no chance of achieving that goal.
[SPEAKER_00]: Maybe I have some chance of getting 600,000 YouTube subscribers.
[SPEAKER_00]: Anyway, also while you're subscribing to stuff, you know, go over to shiftsovereign.com and subscribe to my free newsletter.
[SPEAKER_00]: It's worth every penny.
[SPEAKER_00]: And if you're not satisfied, I'll give you a full refund of your free subscription.
[SPEAKER_00]: Anyway, bye for now.
[UNKNOWN]: Thanks for watching!