Trump Administration Planning to Hijack the Fed - The Peter Schiff Show Ep 1037

[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 pool. [SPEAKER_01]: Your kids don't go to college and they've registered ventia with me. [SPEAKER_01]: The revolutions start now. [SPEAKER_01]: Start. [SPEAKER_00]: We have to pass the bills so that you can find out what is in it. [SPEAKER_00]: Cardinals machine 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_03]: Welcome, everybody. [SPEAKER_03]: This is a special edition of the Peter Schiff show podcast. [SPEAKER_03]: The reason it's special is I've got a special guest. [SPEAKER_03]: You see somebody sitting next to me. [SPEAKER_03]: This young man's name is James Hakeman. [SPEAKER_03]: Some of you may have known him by his pen name, Simon Black.

[SPEAKER_03]: That's how I originally met James. [SPEAKER_03]: I was calling him Simon for years, even after I knew that his real name was James. [SPEAKER_03]: It took me a long time before I could call him James because he was Simon. [SPEAKER_03]: But he had a newsletter that I used to read and a lot of some of my followers used to read. [SPEAKER_03]: And his company was sovereign man. [SPEAKER_03]: And we got to know each other pretty well over the years.

[SPEAKER_03]: I spoke it several of his conferences. [SPEAKER_03]: I had some big conferences around the world. [SPEAKER_03]: And we have a lot in common. [SPEAKER_03]: And he's kind of, you know, [SPEAKER_03]: like a younger, better looking. [SPEAKER_03]: Better looking. [SPEAKER_03]: Yeah, maybe even smarter me. [SPEAKER_03]: I mean, some of his presentations are really remarkable. [SPEAKER_03]: He knows so much about so many things. [SPEAKER_03]: But we have a lot in common.

[SPEAKER_03]: And so he's, you know, he's kind of like the son that I'd never had when I was in my twenties, you know, because I waited a while and I could get married in that case. [SPEAKER_03]: But yeah, you know, well, you know, you're young enough. [SPEAKER_03]: I could be your father, you know. [SPEAKER_03]: But but we have a lot of. [SPEAKER_03]: I'm forty I'm forty six. [SPEAKER_02]: All right. [SPEAKER_03]: Well, I'm sixty two. [SPEAKER_03]: Do the math.

[SPEAKER_03]: Kind of kind of kind of hat. [SPEAKER_02]: Okay. [SPEAKER_03]: Biologically. [SPEAKER_02]: Yes. [SPEAKER_02]: Yeah. [SPEAKER_02]: All right. [SPEAKER_02]: Highly unlikely, but all right. [SPEAKER_03]: But still, I mean, there's, you know, there's enough of a gap. [SPEAKER_03]: All right. [SPEAKER_03]: Right.

[SPEAKER_03]: So anyway, but you know, he can obviously he's young and he could kind of follow in my footsteps because none of my actual kids have any interest right now so far in what I'm doing.

[SPEAKER_03]: I don't know, like a year ago, or a little bit warm. [SPEAKER_03]: We decided to kind of merge the publishing end because I always kind of wanted to do a newsletter and I wasn't doing it. [SPEAKER_03]: And James had this great letter and a business with sovereign man. [SPEAKER_03]: And of course, he has several other businesses. [SPEAKER_03]: He's an entrepreneur and he has a lot of different companies. [SPEAKER_03]: But the one that I was interested in was with sovereign man.

[SPEAKER_03]: And so we decided to join forces [SPEAKER_03]: and we change the name to sovereign shift. [SPEAKER_03]: And yes, and a lot of you have ship sovereign. [SPEAKER_03]: Oh, ship sovereign. [SPEAKER_03]: Yeah. [SPEAKER_03]: All right. [SPEAKER_03]: Yeah. [SPEAKER_03]: I got, you know, I got, it's like I get my mutual fund wrong. [SPEAKER_03]: Yes, ship sovereign. [SPEAKER_03]: Excuse me. [SPEAKER_03]: It's not sovereign ship.

[SPEAKER_03]: Although I am kind of sovereign, but it's, it's ship sovereign. [SPEAKER_03]: It's ship sovereign. [SPEAKER_03]: There we go. [SPEAKER_03]: It's kind of like shift goal. [SPEAKER_03]: We're keeping the shift out there and just follow it up. [SPEAKER_03]: So if you do before we form shift sovereign and I've been talking about shift sovereign, you know, on the regular podcast, I, you know, encourage people to sign up for the free newsletter.

[SPEAKER_03]: It's worth every penny, you know, but we also have a premium premium service so you can pay a little bit more and get a lot more.

[SPEAKER_03]: but I wanted to bring James on to introduce him directly to my audience and have a little conversation so you get to know a little bit more about him and maybe know more about the newsletter and also James does his own podcast at least once a week like I do and it's something I like to watch and I want to make sure that my audience does it miss it because his podcast

[SPEAKER_03]: are not really on my YouTube channel. [SPEAKER_03]: They're on this shift, sovereign YouTube channel. [SPEAKER_03]: And so everybody should go and, you know, sign up for that, right, become as subscriber and and and look forward to those podcasts every week. [SPEAKER_03]: But anyway, James, say a load of that was a buddy. [SPEAKER_02]: Wow. [SPEAKER_02]: That was a hell of an introduction. [SPEAKER_02]: We've known each other.

[SPEAKER_02]: Peter and I have been very close friends for a very long time. [SPEAKER_02]: Everything you get with us is extremely good, natured ballbusting, which is pretty much the early way right now is just too dude sitting way too close to each other. [SPEAKER_02]: That's because we don't have the second supposed to be, there's supposed to be another desk, but whatever, but here we are anyways.

[SPEAKER_02]: Look, yeah, so if Peter ever talks about shift sovereign, I'm basically the sovereign and shift sovereign, but Peter and I know each other for ages. [SPEAKER_02]: And we did talk like spend, it'd be like two years ago. [SPEAKER_02]: We said, look, we talked about some of the, we talked about a lot of the same things. [SPEAKER_02]: Peter and I see IDI on a lot of things. [SPEAKER_02]: Except crypto, we do not see IDI on crypto.

[SPEAKER_03]: Yeah, and when my first met James, he tried to get me to buy Bitcoin and I would be a lot richer.

[SPEAKER_02]: And that wasn't like, that wasn't like, two thousand, twelve. [SPEAKER_02]: That was like Peter, you should really get in this. [SPEAKER_02]: No, it sounds like a scam. [SPEAKER_02]: Okay, man. [SPEAKER_02]: Okay, so, yeah, but look, on a lot of things, especially the really matter, Peter and I absolutely see I and, and so yeah, we basically kind of merge this and and shift sovereign.

[SPEAKER_02]: So, but I know we talked about doing this for a long time and I've been hearing about this dual desk thing for like, at least. [SPEAKER_03]: And we have it, you can't see it. [SPEAKER_03]: We have all these new cameras in this studio and a lot of stuff, but we still haven't been able to get it all set up. [SPEAKER_02]: Yeah, just so you know, there's a drum set over there. [SPEAKER_02]: There's a bunch of guitars. [SPEAKER_02]: You haven't seen the keyboard.

[SPEAKER_02]: We have a great keyboard. [SPEAKER_02]: Yeah. [SPEAKER_02]: There's a lot of music stuff in there. [SPEAKER_02]: I mean, this is life. [SPEAKER_02]: This is right. [SPEAKER_02]: I mean, this is life. [SPEAKER_02]: I mean, she can sing. [SPEAKER_02]: And this is legit. [SPEAKER_02]: But anyways, I got tired of waiting around for it. [SPEAKER_02]: So I called them and said, I'm coming to your house.

[SPEAKER_03]: And then we go, we're going to get, when you, other cameras, maybe we'll have a live audience for this theater shift show podcast because we got the couch over there and seating. [SPEAKER_03]: If some people end up in Puerto Rico, you know, we start doing the podcast with a live audience. [SPEAKER_03]: We could have some live audience and leadership cells. [SPEAKER_01]: Yes. [SPEAKER_03]: Well, there you go. [SPEAKER_03]: At the, at the podcast.

[SPEAKER_03]: But anyway, let's get to it. [SPEAKER_03]: Let's talk about what's going on. [SPEAKER_03]: I mean, one of the most interesting things and James started talking to me about this. [SPEAKER_03]: So I said, wait a minute. [SPEAKER_02]: I was surprised you didn't know about this. [SPEAKER_03]: No, I was too busy doing this bank shit all day. [SPEAKER_03]: Yeah. [SPEAKER_03]: I had to like, I worked nonstop now on stuff that doesn't make me any money.

[SPEAKER_03]: And it's just completely frustrating and aggravating. [SPEAKER_02]: Sometimes it's what you have to do. [SPEAKER_02]: I know it sucks, but that's the right thing to do. [SPEAKER_03]: That's actually one of the other things we had in common. [SPEAKER_03]: He's got a bank too. [SPEAKER_03]: It Puerto Rico. [SPEAKER_03]: Now he's got to get rid of because it's a nightmare. [SPEAKER_03]: Don't do it.

[SPEAKER_03]: But you don't set up a bank in Puerto Rico and do not even have a bank account in Puerto Rico. [SPEAKER_03]: I've learned that for sure. [SPEAKER_03]: But anyway, but I want to talk about what's going on with the Fed and the Trump administration's plan for the Fed. [SPEAKER_03]: because this is a very interesting angle that really has some profound implications, not only for the country, but for our portfolios and the returns, I think that we're likely to generate as a result.

[SPEAKER_03]: of this strategy, which I think is very bad for the country, but of course it's very good for the assets that I own. [SPEAKER_03]: So why don't you take it from there? [SPEAKER_02]: Is that noise supposed to be going off? [SPEAKER_03]: No. [SPEAKER_03]: I don't know what that noise is, but I don't know if they can hear it in the mic. [SPEAKER_03]: I think it's [SPEAKER_03]: I think it's one of those, you know, power backup things. [SPEAKER_02]: Yeah. [SPEAKER_02]: It's going off.

[SPEAKER_02]: Okay. [SPEAKER_03]: Well, I hope you guys don't hear that at home, but anyhow, look, [SPEAKER_02]: I've been writing about this for a while, I've been talking about this for a while. [SPEAKER_02]: The United States just recently hit thirty seven trillion dollars in debt. [SPEAKER_02]: That's just the nominal public debt. [SPEAKER_02]: That doesn't include the unfunded liabilities and all the other things.

[SPEAKER_02]: So security shortfall, the Medicare shortfall, all the other things. [SPEAKER_02]: Just the gross nominal public debt, thirty seven trillion dollars. [SPEAKER_02]: More importantly, the gross interest cost, this fiscal year loan. [SPEAKER_02]: Which is going to end the end of next month, September thirty of twenty twenty five is is going to come in at about one point two trillion dollars.

[SPEAKER_02]: This isn't me saying this or Peter saying this. [SPEAKER_02]: This is the the treasury department of the United States that puts these numbers up. [SPEAKER_02]: That's the interest on the debt. [SPEAKER_02]: The interest on the debt. [SPEAKER_02]: They're spending this year is one point two trillion dollars. [SPEAKER_02]: Yeah, just significantly more than what is spent on the military and virtually everything else that we think of as well. [SPEAKER_03]: The entire national debt.

[SPEAKER_03]: didn't even hit a trillion until my teenage. [SPEAKER_03]: That's right. [SPEAKER_03]: And now we're spending more than that just in interest on the national debt. [SPEAKER_03]: And interest rates are still low. [SPEAKER_03]: I mean, despite the fact that everybody is complaining about the sky high interest rates, we have interest rates with a forehandle on a ten year treasury. [SPEAKER_02]: Well, we'll get to that because that's that's sort of the whole point.

[SPEAKER_02]: Now, [SPEAKER_02]: Don't let people fool you. [SPEAKER_02]: There's a Jedi mind trick that people play sometimes with a national debt. [SPEAKER_02]: They go, oh, well, we owe it to ourselves, which is the biggest bullshit line ever that somebody could say about the US national debt. [SPEAKER_02]: What they mean by that when they say we owe it to ourselves out of that thirty seven trillion dollars, there's a lot of that that's owed to foreign investors.

[SPEAKER_02]: you know, the Chinese and Japanese and so forth. [SPEAKER_02]: There's a lot of that is owed to US banks, money market funds, you know, some mutual funds, hedge funds, et cetera. [SPEAKER_02]: And yeah, there is some of that. [SPEAKER_02]: that is owed to military retirement to the Federal Reserve. [SPEAKER_02]: Social Security, the Social Security trust funds own a lot of US government debt.

[SPEAKER_02]: And so when people say, it doesn't matter because we owe it to ourselves, I would say, what do you say? [SPEAKER_02]: It's okay to not pay it. [SPEAKER_02]: It's okay to default on Social Security. [SPEAKER_02]: It's okay to default on military veterans who are expecting their [SPEAKER_02]: their retirement checks every month. [SPEAKER_02]: I mean, of course, it's not okay.

[SPEAKER_02]: The fact that we owe it to ourselves in my opinion, that's the most important debt that we owe is the money that we owe to ourselves. [SPEAKER_02]: That's not the least important. [SPEAKER_02]: That's the most important. [SPEAKER_03]: Right.

[SPEAKER_03]: But also, there's another factor of owing it to ourselves is that not everybody is on the receiving end of what's owed because there's a lot of younger people [SPEAKER_03]: who may not own any entities at own treasuries, but they have to pay the payroll tax or income taxes. [SPEAKER_03]: And so it is a net transfer. [SPEAKER_03]: So if I told you, hey, John Smith, you owe a quarter of a million dollars, but don't worry, you owe it to your neighbor.

[SPEAKER_03]: You know, it's not going to make it better. [SPEAKER_02]: It doesn't solve your blood. [SPEAKER_03]: You're still in debt and you still have to be taxed in order to pay money to some other guy, right? [SPEAKER_03]: The fact that the other guy is John Smith instead of, you know, some guy in China, you know, [SPEAKER_03]: Then matter to you. [SPEAKER_03]: It's still money that you are obligated to pay fair point fair point.

[SPEAKER_02]: So so the bottom line is this spending one point two trillion dollars this fiscal year that constitutes about twenty two percent of all federal tax revenue every dollar they spend twenty two cents of that's going at the door just to pay interest on the national debt then they pay so security then they pay Medicare and the other mandatory entitlement spending

[SPEAKER_02]: That those things basically the mandatory entitlements like Social Security Medicare and interest on the debt last year consumed all of tax revenue. [SPEAKER_02]: So everything else that's known as discretionary spending which includes the military, homeland security, national parks, the light bill at the White House, all those things had to be funded with more debt. [SPEAKER_02]: So it's an unbelievable trajectory.

[SPEAKER_02]: And this number, twenty-two percent of tax revenue, just to pay interest, is significantly higher than it was just a couple of years ago. [SPEAKER_02]: Pre-COVID, they're spending a couple of hundred billion dollars a year, three hundred four hundred billion dollars a year, which is a lot, but it was manageable. [SPEAKER_02]: One point two trillion dollars, twenty-two percent of tax revenue, is an unbelievably high number.

[SPEAKER_02]: Now I will say, [SPEAKER_02]: because, you know, we have to be intellectually honest, the U.S. [SPEAKER_02]: has been in this position before. [SPEAKER_02]: In fact, the most recent time the U.S. [SPEAKER_02]: was in this position was in the nineteen nineties. [SPEAKER_02]: And anybody that's old enough to remember, you remember the nineteen ninety two presidential election. [SPEAKER_02]: And that was that was at the one with Ross Perro.

[SPEAKER_02]: Ross Perro with his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his blackboard and his black

[SPEAKER_02]: We're so high. [SPEAKER_02]: I mean, you remember this. [SPEAKER_02]: I mean, I'm in my parents to tell me this, like when I was a kid, we had like a sixteen percent mortgage on this house or whatever. [SPEAKER_02]: And it was unbelievable. [SPEAKER_02]: Interest rates in the US were really, really high in the eighties. [SPEAKER_02]: But not in that ninety two, they were lower by then. [SPEAKER_02]: Well, but they had locked in high interest rates.

[SPEAKER_02]: I mean, in in eighty six, you know, when they were selling tenure treasury notes. [SPEAKER_02]: you know, with fifteen percent. [SPEAKER_02]: So in the nineties, they were still paying this gigantic interest bill. [SPEAKER_02]: So in the nineties, in the early nineties, the interest bill on the national debt was pushing, you know, twenty eight, twenty nine percent of all federal tax revenue. [SPEAKER_02]: So today it's twenty two percent.

[SPEAKER_02]: So technically today we're actually a little bit better off than we were in the nineties. [SPEAKER_02]: But the point is they fixed it in the nineties. [SPEAKER_02]: They did fix it in the nineties that the the interest bill as a percentage of tax revenue did go down because they actually looked at the problem. [SPEAKER_02]: They took it seriously. [SPEAKER_02]: It took a guy like Ross Perot.

[SPEAKER_02]: A guy who was really, really rich and spent his own money to go on TV and educate people and say, Hey, this is a huge problem. [SPEAKER_02]: This is a huge, huge problem. [SPEAKER_02]: And actually became a national issue and people took it seriously.

[SPEAKER_02]: Today, it's the opposite. [SPEAKER_02]: Nobody's taking it seriously. [SPEAKER_02]: This is the sort of thing that should be on the front page of the Wall Street Journal every single day. [SPEAKER_02]: And it's not. [SPEAKER_02]: This should be on the house floor every single day. [SPEAKER_02]: And it's not. [SPEAKER_02]: And nobody's treating it seriously.

[SPEAKER_03]: And the only reason that the interest bill is lower now than it was then is because the interest rates are still lower. [SPEAKER_03]: But a lot of that really, really low debt that we took out during the COVID years and even before, [SPEAKER_03]: has, you know, a really, really low coupon, right? [SPEAKER_03]: But all that is maturing. [SPEAKER_03]: That's right. [SPEAKER_03]: And so even though it's one point two trillion, my guess is that a year from now, it'll be two trillion.

[SPEAKER_02]: It won't be not in a year, but probably in two to three years. [SPEAKER_02]: I think it'll push two trillion. [SPEAKER_03]: It'll be sooner. [SPEAKER_03]: It depends on what happens to rates. [SPEAKER_03]: Correct. [SPEAKER_03]: Because if the Fed isn't able to reduce rates and if rates actually go up, [SPEAKER_03]: then it's going to accelerate. [SPEAKER_03]: And if we go through a bigger recession, which I think we easily could do next year, that increases the deficits.

[SPEAKER_03]: So right now they're in the two and a half trillion, but if they jump up to four trillion a year, and now we have to pay all the interest on that and borrow that. [SPEAKER_03]: So it really starts to grow exponentially. [SPEAKER_03]: Um, you know, so the problem just is just going to continue to accelerate, especially when, you know, we just had the opportunity to pass a budget and they ended up with the big ugly bill, which took all of the Biden spending.

[SPEAKER_03]: and added to it. [SPEAKER_03]: Right, not only did they not get rid of that Biden spending, that all the Republicans agreed was the problem. [SPEAKER_03]: And why we had all this inflation, it was all the Biden spending. [SPEAKER_03]: And then the first chance they had to have a budget, they not only didn't get rid of any of the Biden spending, they said, let's keep it all and add more. [SPEAKER_03]: Oh, and then let's throw a tax cut into the mix.

[SPEAKER_03]: So we take this huge problem that we acknowledge and let's just make it a whole lot worse. [SPEAKER_03]: That's what's happened. [SPEAKER_02]: Yeah, and the way you pointed this out, I mean, rates are, I mean, we were talking about sixteen percent interest rates in the nineteen eighties.

[SPEAKER_02]: Today, they're paying for something percent, which is [SPEAKER_02]: I mean, if you could get in like in a time machine and bring back people from the Treasury Department in the nineteen eighties and they would look at this today and go, oh my god, that's so cheap, four percent, that's crazy, that's so cheap. [SPEAKER_02]: And you know, they're looking at this going like four percent, we can't afford to pay four percent. [SPEAKER_02]: Four percent is historically very, very cheap.

[SPEAKER_02]: And this is the point, as you point out, that in starting in the, really in the nineties, we start seeing this significant decline in interest rates that lasted for a really long time. [SPEAKER_02]: And you got into, by the time you had, you know, the turn of the century, two thousand, after nine eleven, they cut rates again, rates were low for a really long time.

[SPEAKER_02]: You got the housing crisis as a result of that, rates start to come up just a little tiny bit for most of this century. [SPEAKER_02]: Interest rates have been very, very low. [SPEAKER_02]: And they just got accustomed to that. [SPEAKER_02]: So if you think about five years ago in August of, [SPEAKER_02]: kind of peak pandemic, everybody was coward and fear in their basement and all these things.

[SPEAKER_02]: In August of twenty twenty, they were able to sell, let's say, a five year treasury note in the yield on that five year treasury note would have been a couple of basis points, you know, ten, fifteen, twenty basis points, zero point two percent. [SPEAKER_02]: Now all of a sudden, it's five years later, guess what? [SPEAKER_02]: That five year note is maturing. [SPEAKER_02]: So the Treasury Department has to pay that money back.

[SPEAKER_02]: Well, the Treasury Department doesn't have any money. [SPEAKER_02]: They can't afford to pay it back. [SPEAKER_02]: So what are they going to do? [SPEAKER_02]: They're going to go borrow more money from the bond market. [SPEAKER_02]: They got to issue new debt to pay back the old debt. [SPEAKER_02]: Unfortunately for them, the new debt comes at a maybe four point two percentage rate. [SPEAKER_02]: So you go from zero point two percent to four point two percent.

[SPEAKER_02]: That's a four percent difference on, you know, potentially we're talking trillions of dollars that were borrowed back then. [SPEAKER_02]: So the increase in the interest bill as a result of that, you can see how quickly the government's annual interest bill can increase. [SPEAKER_02]: It can increase very, very quickly.

[SPEAKER_02]: I don't think it's going to hit two trillion next year, but yeah, probably within two years and certainly three, you're going to see two trillion dollars. [SPEAKER_03]: It'll be quite a bit more. [SPEAKER_02]: And the number that's more important is the percentage of tax revenue, right? [SPEAKER_02]: It's the percentage of tax revenue because it's like the same thing.

[SPEAKER_02]: It's like how much of your monthly household income do you have to spend paying interest on your credit card bill, or your monthly mortgage payments? [SPEAKER_03]: Our interest payment will be so high that if we were applying for a mortgage as a country, we wouldn't even qualify. [SPEAKER_02]: Yeah, you'd have a, yeah, you'd have a, yeah, you'd have a five hundred cycles. [SPEAKER_03]: Yeah, we have too much debt. [SPEAKER_03]: Yeah, we, we could get laughed out of the net.

[SPEAKER_03]: Meanwhile, meanwhile, the government is guaranteeing all the mortgages. [SPEAKER_03]: And we couldn't even qualify for one on our own. [SPEAKER_03]: But that is the point that, you know, given the fact that we have so much debt now. [SPEAKER_03]: We should have higher interest rates than we had in the nineteen eighties. [SPEAKER_03]: Then we do now.

[SPEAKER_03]: I mean, the fact that we have such low interest rates is an artificial construct that is the result of all, you know, the QE programs and all the efforts to suppress interest rates. [SPEAKER_03]: But the market is going to change this. [SPEAKER_03]: I mean, when interest rates went up, you know, short term rates went to twenty percent in nineteen eighty and, you know, longer term yields were sixteen percent. [SPEAKER_03]: That is not something that we wanted.

[SPEAKER_03]: It wasn't like, you know, Volko was like, hey, what would be a great interest rate? [SPEAKER_03]: How about twenty percent? [SPEAKER_03]: Yeah, let's go for twenty percent. [SPEAKER_03]: I mean, we didn't have twenty percent interest rates because we wanted them. [SPEAKER_03]: It was because we had to have them. [SPEAKER_03]: We didn't have a choice. [SPEAKER_03]: The market raised them and we had to do that. [SPEAKER_03]: And to say that, well, that can't happen again.

[SPEAKER_03]: Well, why can't it happen again? [SPEAKER_03]: If it happened once, it can happen again. [SPEAKER_03]: And I would argue that you were in a much worse credit situation now than we were back then. [SPEAKER_03]: And so, but it doesn't even have to go to twenty. [SPEAKER_03]: Imagine if race get went to ten.

[SPEAKER_03]: I mean, the whole economy would completely implode [SPEAKER_03]: If rates went to, if they went to, if short term rates went to seven, which we used to be considered pretty low. [SPEAKER_03]: I remember, you know, if you, you know, you watch the movie Wall Street when Bud Fox is looking around for apartments and the realtor said, hey, I got a connection. [SPEAKER_03]: I can get you ten percent mortgage. [SPEAKER_03]: Like, that's a great deal. [SPEAKER_03]: Wow, ten percent.

[SPEAKER_02]: You know, I bought my first house in two thousand. [SPEAKER_02]: And the rate I paid, I was in the army, I got a VA loan. [SPEAKER_02]: So I got, you know, money down, I paid seven and a quarter percent. [SPEAKER_02]: And at closing, the guy who sold in the house, he pulled me a side, he said, I just want you to know what an unbelievably good rate that is.

[SPEAKER_02]: And he was telling me the story about how they are paying, you know, fourteen, fifteen percent. [SPEAKER_02]: And he said, we refinanced to a fifteen year mortgage just so we get like something below ten percent. [SPEAKER_02]: And he was like, you, you have no idea how low you are paying seven and a quarter percent. [SPEAKER_02]: And I ended up refinancing in a couple years later, like five. [SPEAKER_02]: Yeah. [SPEAKER_02]: And now today, like, I mean, race or a little bit higher.

[SPEAKER_02]: I got the back up around seven, but there would been a time not too long ago that five would have been crazy high. [SPEAKER_03]: Oh, I was a pay five. [SPEAKER_03]: That's crazy. [SPEAKER_03]: I've spoken to people who have thirty year mortgages with a two hand. [SPEAKER_03]: Right. [SPEAKER_03]: And, you know, I say, you know, never leave that house. [SPEAKER_02]: I mean, you're, you're, well, that's it.

[SPEAKER_02]: Like, that's one of the reasons why people kind of stuck like you're in a house, whatever house you bought, you know, three years ago, that's, [SPEAKER_02]: pretty much where you've got to live. [SPEAKER_02]: No, that's no no. [SPEAKER_03]: That's what I was telling my podcast audience. [SPEAKER_03]: I said, look, if you're going to buy a house, make sure you take the longest biggest mortgage you can get because your main asset isn't going to be your house.

[SPEAKER_03]: It's going to be your mortgage. [SPEAKER_03]: And that asset's going to be the bank's liability because they're going to be sitting on that paper wishing that it didn't exist because they're, you know, right now, if the Fed funds rate is foreign a quarter, [SPEAKER_03]: And they're paying for in a quarter to borrow money, but they're only getting three percent from your mortgage, except the banks don't sit on the mortgages anymore.

[SPEAKER_02]: They just take everybody's mortgage, they roll them up into a housing bond and they flip it to the government now. [SPEAKER_03]: But somebody owns that bond and they're getting that low coupon. [SPEAKER_03]: But the point is that the low interest rates that we've enjoyed and obviously it's all perspective because somebody didn't enjoy it because somebody got paid a low interest rate.

[SPEAKER_03]: But borrowers have enjoyed [SPEAKER_03]: really, really low interest rates for a pretty long period of time now so that people think that this is the way it is. [SPEAKER_03]: And this is the way it always is. [SPEAKER_03]: This is the aberration. [SPEAKER_03]: This is not a normal period. [SPEAKER_03]: And I think it's coming to an end with a big decline in the dollar and a loss of appetite among foreigners to buy US treasures and loan us all this money.

[SPEAKER_03]: You know, they don't want to do it anymore. [SPEAKER_03]: And so as much as Trump [SPEAKER_03]: And a lot of people want lower interest rates because we need them because we have so much debt. [SPEAKER_03]: And Trump even says that we need to reduce our debt burden. [SPEAKER_03]: That's why we need lower interest rates so we can lower the cost of the government of servicing. [SPEAKER_03]: It's not going to happen.

[SPEAKER_03]: And I think that's one of the reasons the Fed is not cutting is because they're afraid that when they do long rates are going to go up. [SPEAKER_03]: And that is going to be a huge problem and they'd rather not have to deal with it. [SPEAKER_03]: But everyone's going to be dealing with much higher interest rates and it's going to be a shock to the economy and it's going to exacerbate the next downturn.

[SPEAKER_03]: And I think some people in the Trump administration know that and that's why they've got this plan that James was telling me about the money that's a Fed. [SPEAKER_03]: Yeah, so why don't you, you know, [SPEAKER_02]: Well, I was telling Peter about this today. [SPEAKER_02]: I said, hey, you know that Netflix show money highs. [SPEAKER_02]: And he said, what are you talking about? [SPEAKER_02]: I said, I've heard of the show.

[SPEAKER_02]: This is like super popular, but the, it's, you know, it's several years old now. [SPEAKER_02]: It's a Spanish show in Spanish. [SPEAKER_02]: It's a Casa de Pepele in English. [SPEAKER_02]: It's called Money Heist. [SPEAKER_02]: And it's about, and this is not a spoiler because it's like the first couple minutes of the show.

[SPEAKER_02]: Basically, it's like people go in and they, it's like they're going to rob a bank and it turns out they're not actually robbing [SPEAKER_02]: anybody's bank accounts or holding anybody up directly. [SPEAKER_02]: They're going in basically hijacking the national mint and printing takes place in Spain. [SPEAKER_02]: The printing euros using the actual, you know, printing the government printing presses and the saying we're not stealing from anybody.

[SPEAKER_02]: And which is kind of funny, of course, and like, why are all the police outside the end?

[SPEAKER_02]: Because it's illegal, of course, it's illegal when anybody else does it when Central Bankers do it, it's just, you know, it's called quantitative easing and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and,

[SPEAKER_02]: has been very critical of the Federal Reserve. [SPEAKER_02]: What does he call them to late Powell? [SPEAKER_02]: To late Powell. [SPEAKER_02]: To late Powell. [SPEAKER_02]: To late Powell. [SPEAKER_03]: To late Powell. [SPEAKER_03]: But he also calls him a moron, an idiot. [SPEAKER_02]: It's an idiot. [SPEAKER_02]: He's at all that. [SPEAKER_02]: Yeah. [SPEAKER_02]: I always have to say this because I can't believe these words coming up. [SPEAKER_02]: I'm not defending the Fed.

[SPEAKER_02]: I mean, no way defending the Fed. [SPEAKER_02]: I'm about as critical the Federal Reserve is his Peter.

[SPEAKER_02]: My one of my favorite examples was came from what have been May, twenty twenty three.

[SPEAKER_02]: Two-late Powell was testifying in front of Congress. [SPEAKER_02]: And you remember this, and they were asking them, they had started that rate hike cycle. [SPEAKER_02]: And they said, are you, is there any concern or are there any issues in the financial system? [SPEAKER_02]: And he said, something along is basically nothing we've seen in the data suggests to me that we've, that we've tightened too much. [SPEAKER_02]: We've raised rates too much.

[SPEAKER_02]: Two days later, Silicon Valley bank went bust and signature bank went bust. [SPEAKER_02]: We had this sort of cascading. [SPEAKER_02]: And they're bank vouchers. [SPEAKER_02]: And they're bank vouchers. [SPEAKER_03]: It was like a QE. [SPEAKER_02]: Yeah, they have to do emergency QE and it's like, how did you not see that coming?

[SPEAKER_02]: Because what people don't realize, unless you're in the banking businesses, that the federal reserve is a bank regular, it's I think called a supervisor, banking supervisor. [SPEAKER_02]: So the Fed already had all the data about Silicon Valley Bank. [SPEAKER_02]: They had all the data, they had the balance sheets, they had the call reports, they had all the things they should have known that this bank was teetering on insolvency.

[SPEAKER_02]: And yet the guy who's in charge that whole says and said, no, nothing to see here. [SPEAKER_02]: You know, not to mention, they completely missed inflation. [SPEAKER_02]: They totally missed diagnosis. [SPEAKER_02]: They totally failed to understand that there might be consequences to the rate hikes. [SPEAKER_02]: They just, they just, they split up it all in back. [SPEAKER_03]: They didn't even know there was a housing bubble.

[SPEAKER_03]: Everyone on the Fed denied there was a housing bubble. [SPEAKER_02]: Example, example, the so many of these. [SPEAKER_02]: So in no way, possibly defending the Fed. [SPEAKER_02]: However, comma, I also think that giving control of interest rate policy [SPEAKER_02]: to anybody seems a little bit silly, but just handing it over to politicians, handing over to the White House, handing it over to the charge department, seems like a bad idea.

[SPEAKER_02]: Yeah, this is clearly what this administration's trying to do is essentially hijack control the Federal Reserve. [SPEAKER_02]: They keep saying, we want to get an interest rates down. [SPEAKER_02]: They're trying to bully this guy publicly to cut interest rates. [SPEAKER_02]: And Powell's digging his heels in now saying, no, we're not going to do it.

[SPEAKER_02]: And I think part of the reason why they're not cutting rates [SPEAKER_02]: Is because they're getting so much pressure that they know if they cut rates now would look like they caved. [SPEAKER_02]: And so I feel like they're putting up a fight just to show that I'm not going to cave to this pressure. [SPEAKER_03]: I'd almost think that Trump would have to know that and you would think that you think it just back off as well.

[SPEAKER_03]: He would keep [SPEAKER_03]: He would do this down on the down low, but it also, to me, and I've been saying that he wants to set Powell up as a scapegoat or a fall guy because to the extent that we do hit recession, which I think we will. [SPEAKER_03]: In fact, the labor, the labor numbers are very bad. [SPEAKER_03]: And we could [SPEAKER_03]: easily have a negative non-farm payroll report for August, except they're not going to release it.

[SPEAKER_02]: So we're not going to see it. [SPEAKER_03]: They'll downward revise it four months later. [SPEAKER_03]: Well, no, there's been nothing to downwardly revise because they're not even releasing it. [SPEAKER_03]: And I bet that the report that we got for July, which was way below estimates, [SPEAKER_03]: I think that if we actually got the report in September for August, that one would be revised to a negative number.

[SPEAKER_03]: And so Trump is going to keep a lid on all that bad economic data so he can keep talking about how we have a booming economy and how it's so hot. [SPEAKER_03]: And if it is hot, it's because it's burning down. [SPEAKER_03]: But I think that when [SPEAKER_03]: You know, we are, you know, weak, he wants to say it's defense fault. [SPEAKER_03]: Like we had this great economy and too late, Paul roamed it by keeping rates too high.

[SPEAKER_03]: And so that's why he wants to be out on record as having calls for lower rates. [SPEAKER_03]: So he can blame all the problems on the Fed for not doing it. [SPEAKER_02]: Well, I think there's, I think there's something more deliberate here, and what seems very clear to me, and I've been right out of this for a while. [SPEAKER_02]: I've been writing this saying, I think they're really trying to take control of this. [SPEAKER_02]: It's a, it's a, it's a money-highest.

[SPEAKER_02]: They're trying to take control of the, of the central bank, just like the TV show, but without the, without the guns and the masks and the jumpsuits, instead they're, they're, they're doing it, you know, through mean tweets and, and these sorts of things, and then something interesting happened. [SPEAKER_02]: a couple of weeks ago, there was a key fet official that just inexplicably quit.

[SPEAKER_02]: And when I say inexplicably, I mean, it literally, there was no explanation given and her, her resignation had immediate effect.

[SPEAKER_02]: That's extremely unusual. [SPEAKER_02]: That's not supposed to happen. [SPEAKER_02]: You were supposed to have something like that happened. [SPEAKER_02]: Right. [SPEAKER_02]: Exactly. [SPEAKER_02]: You just don't, you just don't see that.

[SPEAKER_02]: I don't remember that happening unless there was a clear reason where you knew that [SPEAKER_02]: You remember the scandal they had during COVID during the pandemic where they found a couple of the top officials are actually trading stocks on their own watch. [SPEAKER_02]: I mean, they were making money off of their own monetary policy decisions. [SPEAKER_02]: So some of these sorts of things, but it's not easy to just resign.

[SPEAKER_02]: For no reason, no reason, no explanation given with immediate effect, not even like, okay, let's give it thirty days. [SPEAKER_02]: They're going to at least be a debate over who my success is going to be. [SPEAKER_02]: No, I'm gone tomorrow. [SPEAKER_03]: That's, yeah, and that is weird because these are pretty good jobs, right? [SPEAKER_03]: They're hard to get these jobs with the Fed. [SPEAKER_03]: Well, I don't even know what they do.

[SPEAKER_03]: You give me it probably easy work, right? [SPEAKER_02]: Just sit around and, you know, well, especially like the ten year on a lot of these positions last in many respects for more than a decade.

[SPEAKER_02]: So it's a long-term payday for sure. [SPEAKER_02]: It's a long-term payday. [SPEAKER_02]: So I was doing the podcast, I was doing my podcast, and I was telling the guy I do the podcast with Joe, and I said, man, this just stinks to me. [SPEAKER_02]: Because, of course, almost immediately, they came out and said, oh, we got a replacement.

[SPEAKER_02]: We're going to replace it with Stephen Moran. [SPEAKER_02]: Well, what a surprise. [SPEAKER_02]: Stephen Renn, the guy who's the brains, but if you could use such a term, these are the architect of the entire administration's economic policy. [SPEAKER_02]: And you know, to be fair, I think there are certain things that they say that are [SPEAKER_02]: I would say, I get your point. [SPEAKER_02]: I think they make some valid points.

[SPEAKER_02]: I belong up the whole trade system and all these things. [SPEAKER_02]: I don't know that that's necessarily going to prove to be the right decision. [SPEAKER_02]: But this is the guy who is clearly, he's going to tow the line, he's going to do whatever the president tells him to do. [SPEAKER_02]: And now he's going to go and join the vet. [SPEAKER_02]: Somebody is going to be going and become a voting member of the Federal Reserve.

[SPEAKER_02]: And I told Joe, I said, politics is a dirty business. [SPEAKER_02]: I wouldn't be surprised if we saw more of this. [SPEAKER_02]: People suddenly resigning, or you're going to find out, you're going to wake up one day, you're going to see something in the newspaper that there's some scandal, there's some ethics violation. [SPEAKER_02]: I actually kind of half joked to say they're going to do what they did with spits or all those years ago.

[SPEAKER_02]: They're going to set them up on a hooker sting, or they're going to say he's on the, he's on the Epstein list, or something like that to, to be smirk somebody's character, or set them up in a scandal.

[SPEAKER_02]: So the person has to resign. [SPEAKER_02]: Sure enough, [SPEAKER_02]: What are we find out? [SPEAKER_02]: A key beneficial, we just found today, a key beneficial, you know, the head of the, the, the, the, the, the, the, the FFA. [SPEAKER_02]: Yeah, it came out and said, yeah, it said, oh, oh, this person's guilty of mortgage fraud.

[SPEAKER_02]: Look here, she signed two mortgage applications like ten or fifteen days apart, and both of them were claimed to be her primary residence, which is mortgage fraud. [SPEAKER_03]: And this is a voting member of the FOMC. [SPEAKER_02]: So now this gives them an excuse to say, and of course, immediately, Donald Trump said, you need to resign. [SPEAKER_02]: And of course, they've got a replacement already.

[SPEAKER_02]: So I started to look at this, and this is what I was talking about in my podcast, and watch what happens. [SPEAKER_02]: This is going to happen. [SPEAKER_02]: And now I didn't expect you to happen so soon, but now it's happened. [SPEAKER_02]: And I said a little by little. [SPEAKER_02]: They're going to either build the Fed with their own guys that are going to click their heels and they're going to salute. [SPEAKER_02]: And they're going to say, Sir, we're going to cut rates.

[SPEAKER_02]: Or everybody else on the FOMC is going to be so shit scared that somebody's going to come after me. [SPEAKER_02]: So I'm like, All right, they were just going to capitulate. [SPEAKER_02]: And we're going to start cutting rates. [SPEAKER_03]: Yeah, because obviously, if they found that this voting Fed member of the FOMC committed mortgage fraud, [SPEAKER_03]: It was because they were investigating the people on the FMOMC trying to find dirt on them.

[SPEAKER_03]: Clearly, and I'm sure the ones they didn't investigate were not the only one. [SPEAKER_03]: Yeah, the two that voted to cut rates last time are probably fine. [SPEAKER_03]: They're not looking at those guys. [SPEAKER_03]: So all the Fed officials that didn't vote to cut rates, I bet the IRS is on their back. [SPEAKER_03]: The IRS is looking over all their tax returns. [SPEAKER_03]: You know, you've got FHA, you know, looking over all their mortgage applications, right?

[SPEAKER_03]: Who knows? [SPEAKER_03]: And they're looking for it. [SPEAKER_02]: You said it was a cushy job. [SPEAKER_02]: That's now voting to hike interest rates, or at least not cut interest rates. [SPEAKER_02]: That's a dangerous job in America. [SPEAKER_03]: And if you're on the Fed, [SPEAKER_03]: And you're just not clean as a whistle. [SPEAKER_03]: You've got some kind, a little skeleton in your closet. [SPEAKER_03]: You're going to be like, I got to get out of the crosshairs.

[SPEAKER_03]: How do I get off of the naughty list? [SPEAKER_03]: On to the nice list. [SPEAKER_03]: I'm voting September for a rate cut. [SPEAKER_03]: Right. [SPEAKER_03]: And yeah, I mean, they're trying to do it and get everybody to car race, but, you know, cutting race isn't going to do it. [SPEAKER_03]: Because they said, a quarter point rate cut, fifty basis points, even if they did that. [SPEAKER_03]: I bet that is going to be the same as last time where the long end is going up.

[SPEAKER_02]: That's the thing where they're going to find. [SPEAKER_02]: I mean, and the thing is this isn't some wild conspiracy theory either. [SPEAKER_02]: Earlier this summer, the Treasury Secretary himself gave a speech and he said, [SPEAKER_02]: Here's what we're going to do. [SPEAKER_02]: We're going to get in there once this guy's out talking about we're going to get into the Fed once your own power is out and we're going to we're going to cut rates.

[SPEAKER_02]: We're going to lower those rates. [SPEAKER_02]: So he is basically saying he laid out his whole strategy said we're going to buy our time for now while the rates are a little bit higher. [SPEAKER_02]: We're going to keep. [SPEAKER_02]: We're going to keep basically issuing this ultra short term debt. [SPEAKER_02]: Ninety day T bills. [SPEAKER_02]: You know, six month T bills are going to keep issuing this short term debt.

[SPEAKER_02]: until we can get Jerome Powell out and then we're going to cut rates and then we're going to refinance all the debt to these longer term rates. [SPEAKER_02]: So the idea is that they want to push the ten year yield down. [SPEAKER_02]: We were saying earlier that four percent is two expense for them. [SPEAKER_02]: They want to get the ten year down to like two percent. [SPEAKER_02]: But it's not going to refinance a bunch of people down there. [SPEAKER_02]: That's right.

[SPEAKER_02]: That's the point. [SPEAKER_03]: It's good to ten year. [SPEAKER_03]: So what they're going to have to do when they cut rates. [SPEAKER_03]: and long-term rates go up, they're going to have the continuity refinance on the short end.

[SPEAKER_03]: And they're going to be shortening the maturity of the debt, creating a potential time bomb because at some point when inflation really runs out of control in a way that they can't deny it, and the dollar goes into freefall, the way it was in the nineteen seventies.

[SPEAKER_03]: The only way to stop it, to stop a hyperinflation would be to jack short-term interest rates off to ten percent or fifteen percent. [SPEAKER_03]: But then what do you do if your entire national debt is finance in T-bills and now you've got to roll it over at those ten percent. [SPEAKER_03]: Now you're in default time. [SPEAKER_03]: What then happens is, and if Trump controls the Fed, yeah, we obviously can't defend the currency.

[SPEAKER_03]: We can't do a poll vulgar because we're broke now and we weren't back then. [SPEAKER_03]: And so there's no way to stop running away inflation. [SPEAKER_03]: There's no way to stop it collapse. [SPEAKER_03]: And so then we go into this situation where we probably have price controls and the government is trying to do everything it can to plug all the holes as the ship is sinking. [SPEAKER_03]: But we have a real dollar crisis and a sovereign debt crisis.

[SPEAKER_03]: Because I don't think these guys realize what they're dealing with. [SPEAKER_03]: I think they think, hey, we can just cut rates and it'll be like it was during COVID. [SPEAKER_03]: We can get these super low yields. [SPEAKER_03]: And the Fed was able to do that because the markets let them do it. [SPEAKER_03]: The markets aren't going to let them do it anymore.

[SPEAKER_03]: And that was made clear on the last Fed rate cut when the long bottom went up by a hundred basis points instead of down. [SPEAKER_02]: And that's the support I think they're going to find. [SPEAKER_02]: People have a, I think a little bit of a misconception about the powers of the Federal Reserve. [SPEAKER_02]: People think the Fed can just sort of clap its hands and push the entire yield curve down. [SPEAKER_02]: And that's not necessarily true.

[SPEAKER_02]: It's certainly not always true. [SPEAKER_02]: And it certainly wasn't true. [SPEAKER_02]: When they started this rate cut cycle in twenty twenty four, over a basically three month period from September, eighteenth to December, eighteenth, twenty twenty four, they cut rates three times by a total of one hundred basis points. [SPEAKER_02]: And yet the ten year went up by about a hundred basis points. [SPEAKER_02]: So it was just, it was the wrong direction.

[SPEAKER_02]: So if the Fed really wants to put, you sure they have a lot more control over short-term rates rather than long-term rates. [SPEAKER_02]: And I got it sexed earlier from an old friend, I told you, it's actually working for the Treasury Secretary right now. [SPEAKER_02]: And he said, well, don't forget about the Genius Act. [SPEAKER_02]: And the Genius Act is this stable coin bill. [SPEAKER_02]: And I actually wrote about this on our site shifts over.

[SPEAKER_02]: And it's basically saying, like, yeah, I actually think the Genius Act [SPEAKER_02]: is pretty smart in that it's going to bring a lot of money out of crypto bizarrely into treasuries which is not something that somebody would ordinarily think would happen, but it's going to be very short-term treasuries. [SPEAKER_02]: And I think you could probably see potentially trillions of dollars coming into very short-term treasuries because of the genius act and the stable coin legislation.

[SPEAKER_02]: The problem is they're trying to get the trying to get long-term rates down. [SPEAKER_02]: And that's a different animal. [SPEAKER_03]: Right, but yeah, because the stable coins can't buy long-term because that's taking credit risk.

[SPEAKER_03]: Right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right, right [SPEAKER_03]: To the extent that money goes into the stable coins, it's got to come out of someplace else.

[SPEAKER_03]: So it could come out of a money market and that money market was buying treasury. [SPEAKER_02]: So you're just maybe shuffling to deck, but you'll have some money come out of banks and the banking system and so forth. [SPEAKER_02]: But I think the hope is that there will be money that comes out of [SPEAKER_02]: Bitcoin and a lot of other cryptocurrencies that go into stablecoins.

[SPEAKER_03]: Maybe that, but the thing about the stablecoins that I don't think most people will find appealing as a place to park their money is that if you put your money in a money market, you get four percent interest. [SPEAKER_03]: And you can have a checking account on your money market, you can have a debit card, so you get interested. [SPEAKER_03]: But if you want a stablecoin, you get nothing. [SPEAKER_03]: It's the issuer that keeps all the interest, not the stable quant holder.

[SPEAKER_03]: So to me, the main use case for stable coins is the trade crypto. [SPEAKER_03]: If you want to trade in and out of various cryptos and you want to have a neutral position, then you have to go to cash and so going to a stable coin before you flip it into some other coin. [SPEAKER_03]: You know, I don't see a huge pent-up demand building for stable coins. [SPEAKER_03]: I think that's all part of the height. [SPEAKER_02]: Well, we'll see.

[SPEAKER_02]: I mean, we'll see that you may be right. [SPEAKER_02]: You may be right, but we'll see. [SPEAKER_02]: I mean, like the jury's still out, but I think we'll see some data on that here before long. [SPEAKER_02]: But the point is that [SPEAKER_02]: whether it's zero dollars goes into stable coins or five trillion dollars goes into it. [SPEAKER_02]: I mean, you see all kinds of estimates.

[SPEAKER_02]: If that goes into the stable coin market under the current legislation with a genius act, that's going to be at the short end of the curve. [SPEAKER_02]: So there's still going to be stuck with, how do I get the ten year fine? [SPEAKER_02]: Maybe the ten year yield falls by a fifty basis point. [SPEAKER_02]: They got to get it to two percent. [SPEAKER_02]: They want to get it to one percent. [SPEAKER_02]: We did the math on this.

[SPEAKER_02]: And so the only way, [SPEAKER_02]: that the Fed is actually able to do that is through essentially direct manipulation of the bond market, which they call quantitative easing. [SPEAKER_02]: So this is where they're actually creating money and then using that new money through a very complicated system going through primary dealers and so forth.

[SPEAKER_02]: But they're essentially buying bonds directly and by that artificially engineering artificial demand for bonds with new money that they create, that suppresses yields, it pushes yields down. [SPEAKER_03]: But people forget too when a lot of the politicians say or people not necessarily politicians, hey, why did we take advantage of those really low long-term rates when they were there?

[SPEAKER_03]: Why did the government sell a lot of thirty-year government bonds when they had a one-handle or two-handle? [SPEAKER_03]: And the reason is because if they tried, they wouldn't have had those low rates. [SPEAKER_03]: It was only because the government wasn't selling a lot of new long-term treasuries that the rates were down. [SPEAKER_03]: But if they actually try to take advantage of those low rates by issuing a lot of long-term debt, the rate wouldn't stay low.

[SPEAKER_03]: So in order to keep the rates lower, maybe for the mortgages, they kept it short. [SPEAKER_03]: And so even if Trump goal is, well, let's get the rate down to two percent, so we can sell a bunch of, you know, thirty-year bonds and two percent, who's going to buy a bunch of thirty-year bonds at two percent? [SPEAKER_03]: There's not that big a supply idiots out there that are going to do. [SPEAKER_03]: Right. [SPEAKER_02]: So the only idiot in this case would be the Federal Reserve.

[SPEAKER_02]: And the Federal Reserve would only be that idiot if you controlled the Federal Reserve. [SPEAKER_02]: Well, that is, you had your, if you had your boys on the Federal Reserve, and you knew you said, hey, I want you to buy X dollars worth of this of, you know, two percent yielding thirty-year bonds. [SPEAKER_02]: Realistically, I could see the Michigan zero percent yielding thirty-year bonds. [SPEAKER_02]: So we did the math on this with a lot of help from Grock.

[SPEAKER_02]: The answer is, ten trillion dollars. [SPEAKER_02]: If they today, if the Fed, basically with the money they already have, which is roughly four trillion dollars, the treasuries that they own, if they created an additional ten trillion dollars, and all that to buy government bonds, treasuries, and all the treasuries of the Fed owns yielded to zero percent, that at that point, the average interest rate that the government would have would be basically right around two percent.

[SPEAKER_02]: So you'd have to print ten trillion dollars essentially. [SPEAKER_03]: Right. [SPEAKER_03]: Well, what is that going to do to prices? [SPEAKER_02]: If you just bear in mind when the Fed printed five trillion dollars during the pandemic, you got nine percent inflation. [SPEAKER_02]: So I don't know that it's a one to one linear relationship, but I mean, I can't imagine they're going to have we got a lot more than nine percent. [SPEAKER_03]: It was nine percent one year.

[SPEAKER_03]: We got five percent. [SPEAKER_03]: We got you was like twenty twenty five percent over three or four years. [SPEAKER_03]: But it was it. [SPEAKER_03]: It was more like fifty. [SPEAKER_03]: And I mentioned on my podcast, you know, I was a, you know, Connecticut part of the summer and I had to redo my pool. [SPEAKER_03]: I had to fix a bunch of cracks.

[SPEAKER_03]: And when I'm talking to the pool guy, how expensive it is, it's like costing me more to fix this pool than it costs to install it initially. [SPEAKER_03]: And he said, well, everything has doubled in the last five years. [UNKNOWN]: Yeah. [SPEAKER_03]: So, I mean, what's that inflation rate? [SPEAKER_03]: And he's just saying, well, it's the materials, you know, the labor, whatever, it's doubled over five years. [SPEAKER_03]: That's a fortune.

[SPEAKER_03]: Yeah, so there's the actual increase in the cost of living, dwarfs the official inflation. [SPEAKER_03]: So what you're talking about, they would have to do. [SPEAKER_03]: to try to manipulate rates down by printing all that money. [SPEAKER_03]: But yeah, what you're talking about is basically getting rid of the, even the appearance of independence of the Fed, so that the Fed is now the treasury and the president.

[SPEAKER_03]: And you really turn the country into a banana republic because now it's all right, whatever money we need, we just print it. [SPEAKER_03]: There's no [SPEAKER_03]: break. [SPEAKER_03]: There's no counterbalance to whatever they want to spend because if you have an independent Fed, the counterbalance to aggressive deficit spending is well, interest rates could go up and undermine what I'm trying to do.

[SPEAKER_03]: But if you know that, no, I don't have to worry about these big deficits pushing up interest rates because we control the central bank and we're just going to print money and buy up all the bonds that we're selling.

[SPEAKER_03]: Now, you know, you've basically, you know, turned over the press to the government and now they're going to, you know, just use it, just like, you know, in Zimbabwe or whatever, that's what you're doing or Argentina before, you know, they had them away, you know, [SPEAKER_03]: The only reason they got a guy like Malay is because they had, you know, so many guys that were ruining the currency for so many years.

[SPEAKER_02]: Well, remember when the Central Bankered into what Christina Kirchner wanted to do, she was just put the guy in jail. [SPEAKER_02]: So, you know, it is, I mean, this is why, you know, the market every time he talks about, I'm going to fire Powell, the market kind of throws a temper tantrum.

[SPEAKER_02]: they back off of it, you know, but it just it seems, you know, now to, again, I even I was surprised that it happened so quickly, but to to see all of some, you've got people inside the administration go, aha, there is a dirty artificial, then the calls immediately for [SPEAKER_02]: get this person out, you need to resign. [SPEAKER_02]: Yeah, and they're also doing the Jerome Cal, your pro mortgage fraud.

[SPEAKER_03]: I mean, they're doing the same thing, you know, with the cost of remodeling the Fed building. [SPEAKER_03]: Right. [SPEAKER_03]: But I'm sure, look, every government entity is inefficient, right? [SPEAKER_03]: I mean, obviously, if the Fed is going to [SPEAKER_03]: build something. [SPEAKER_03]: It's going to overpay. [SPEAKER_03]: What do they give a damn? [SPEAKER_03]: It's not their money.

[SPEAKER_03]: In fact, you know, whatever they don't spend, they have to turn over to the treasury. [SPEAKER_03]: So why the hell not? [SPEAKER_03]: You know, it's like, you know, even before then, the Fed historically had the most expensive office in Washington, because they have to turn over one hundred percent of their profits above a certain return on their level of a tiny capital level of the supposed to maintain and everything above and beyond that gets.

[SPEAKER_02]: So as they're in the hundred percent to the treasury every year, thanks, Barack. [SPEAKER_03]: So they're in the one hundred percent tax bracket. [SPEAKER_03]: So why not? [SPEAKER_03]: Why not just spend whatever the hell? [SPEAKER_03]: Because they'll spend it. [SPEAKER_03]: But I'm sure if you go through the defense department or any of these departments and look at, hey, what did you just pay to buy that whatever they bought?

[SPEAKER_03]: It's not going to be what a normal human being would pay who was spending their own harder and money, who was actually shopping around and trying to get a good deal. [SPEAKER_03]: They're trying to act like these are the only politicians that are reckless spenders. [SPEAKER_03]: And meanwhile, look at Trump, look at the Congress, how reckless they are.

[SPEAKER_03]: I mean, if we overspend by a half a billion dollars on this building, I mean, that's a drop of the bucket compared to the overspending of the Trump administration and Congress. [SPEAKER_03]: So I mean, talk about the pot calling the kettle black when they're making a big deal about the Fed overspending, right? [SPEAKER_03]: When, when, you know, look at the mirror. [SPEAKER_03]: Is that about it? [SPEAKER_03]: I don't know. [SPEAKER_03]: We're gonna wrap it up.

[SPEAKER_03]: Well, we're, you know, I don't know if we're gonna, how long, I don't remember when we started this podcast list. [SPEAKER_03]: We forgot to put the timer. [SPEAKER_03]: That's all right. [SPEAKER_03]: The timer up. [SPEAKER_03]: But no, we are, we are headed for a, a, a sovereign debt crisis. [SPEAKER_03]: I mean, that's, you know, no doubt about it. [SPEAKER_03]: And a currency crisis.

[SPEAKER_03]: You know, and I think the administration doesn't get this and just thinks that, you know, yeah, you know, we cut rates after the two thousand and eight financial crisis and everything was fine and we cut rates after COVID and we printed all this money. [SPEAKER_03]: and the stock market went up and everything seems well. [SPEAKER_03]: So let's just do more of it, right? [SPEAKER_03]: Let's just go back to that and let's create another huge bubble, another artificial boom.

[SPEAKER_03]: Look, they want to bring back Fannie and Freddie, right? [SPEAKER_03]: They're talking about they want to privatize them except they want to make it even worse than before. [SPEAKER_03]: You know, creating Fannie and Freddie, right? [SPEAKER_03]: Fannie Mae was created by FDR, right? [SPEAKER_03]: You know, what are the worst presidents, right?

[SPEAKER_03]: Because he dramatically expanded the role of the federal government and tore up the constitution with all those new deal programs. [SPEAKER_03]: Well, out of the new deal was born, Fannie Mae. [SPEAKER_03]: So if you're like a Republican, a conservative, a free market guy, you never liked the idea that the government got into it. [SPEAKER_03]: But at least Fannie Mae, when FDR created it, was a complete government department. [SPEAKER_03]: It was not private.

[SPEAKER_03]: And it could only secure ties FHA insured mortgages.

[SPEAKER_03]: So it basically packaged up [SPEAKER_03]: government guaranteed mortgages and and it did that up until nineteen sixty eight nineteen sixty eight another horrible president linden bane's johnson well the worst presence we ever had he came up with the idea of hey let's let's um... let uh... let's privatize and let's make this government sponsored enterprise right let's make a private and but at least he said the government doesn't guarantee these debts

[SPEAKER_03]: But they made a private then in nineteen seventy nineteen seventy but still they can only do FHA mortgages and then nineteen seventy richer Nixon right another you know bad president took us off the gold standard and a lot of crappy things right he came up with the idea of hey

[SPEAKER_03]: Let's let Fannie Mae buy non government guaranteed mortgages. [SPEAKER_03]: Why restrict them to just FJ loans? [SPEAKER_03]: Let me just buy conventional mortgages. [SPEAKER_03]: We'll just put restrictions on them like, you know, with the loan to value ratio could be how big the mortgages. [SPEAKER_03]: But let's let this private company, right, that we sponsored. [SPEAKER_03]: a buy-up, you know, debt that we don't guarantee.

[SPEAKER_03]: But even then, even Richard Nixon, and they all said, but, you know, there's no government guarantee here, right? [SPEAKER_03]: This is not, this is not like buying a treasury or a Gini May. [SPEAKER_03]: This is, you know, private company issuing its own debt, you know, caveat emptor.

[SPEAKER_03]: And they created Freddie Mac the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in the same year, in

[SPEAKER_03]: But of course they created a very big moral hazard because there was a perception among investors that even though there was no government guarantee investors assumed that if they got in trouble and if they failed given the fact that the government had sponsored them [SPEAKER_03]: that they would bail out the creditors.

[SPEAKER_03]: So if you bought mortgages from Fannie and Freddie, and then they went bankrupt because the mortgages, you know, sucked, and you know, they were low credit quality, that the government would bail you out. [SPEAKER_03]: But the government never said that. [SPEAKER_03]: The government always said, you know, no, we don't, if you want a government guarantee by a treasury, you buy Fannie and Freddie, you get more yield because we're not, we're not backing it, right?

[SPEAKER_03]: Then, [SPEAKER_03]: They go bankrupt as I predicted years in advance that they would. [SPEAKER_03]: I knew these entities would go bankrupt and they were at the heart of the housing bubble. [SPEAKER_03]: They couldn't, they didn't ensure the subprime, but they were the biggest buyers of subprime mortgages out there. [SPEAKER_03]: They were helping to keep the subprime market going by buying up all the securities.

[SPEAKER_03]: So they went bankrupt and sure enough, the government bailed everybody up. [SPEAKER_03]: So the implicit guarantee turned out to actually be there, right? [SPEAKER_03]: Everybody was right, right? [SPEAKER_03]: So they get put into conservatorship and they've been in conservatorship ever since. [SPEAKER_03]: But now that they're in conservatorship, pretty much everybody knows, yeah, that's government guaranteed.

[SPEAKER_03]: In fact, now it's the government that operate in all enterprise. [SPEAKER_03]: So it's not an implicit guarantee anymore. [SPEAKER_03]: It's pretty much explicit. [SPEAKER_03]: We all know the government backs it. [SPEAKER_03]: But at least there's no private profit. [SPEAKER_03]: The problem with private profit but a government guarantee is it's the worst of both worlds.

[SPEAKER_03]: Because now people will take excessive risks because they can have a big payday in the short run and they're able to sell the bonds because the lenders don't give a shit because they know that the government has guaranteed it and so they don't bother to check on the credit quality. [SPEAKER_03]: Credit quality is irrelevant. [SPEAKER_03]: And that allows the entities to make excess profits, basically, with the government go coast signing all their debt.

[SPEAKER_03]: So now what Trump says he wants to do is he wants to bring them back with the implicit guarantee wrapped around it, courtesy of the US government. [SPEAKER_03]: Trump wants to say they're going to keep their implicit guarantee. [SPEAKER_03]: Well, then it's not implicit anymore. [SPEAKER_03]: He's made an explicit guarantee because the government is now said something that Lyndon Johnson never said or Richard Nixon never said.

[SPEAKER_03]: He's coming out and saying, yes, this private company [SPEAKER_03]: They're issuing debt that is U.S. [SPEAKER_03]: government guaranteed and they have a monopoly on it, or a duopoly. [SPEAKER_03]: In fact, they're actually talking about maybe combining them into one monopoly on converting mortgages into treasures. [SPEAKER_03]: One of the most ass-in-ine decisions you can make.

[SPEAKER_03]: Of course, it's going to enrich a lot of his donors and supporters who bought up a lot of Fannie Mae stock and who are going to cash out with billions of dollars in profits. [SPEAKER_03]: But again, what is one of the other reasons that Trump wants to do this is to flood the economy with cheap mortgage money, which can only be done if now they lower their lending standards again, which they'll be able to do under Trump's watch.

[SPEAKER_03]: Because he can basically say, hey, guys, do whatever the hell you want. [SPEAKER_03]: And the buyers will buy up the debt because it's just US Treasury. [SPEAKER_03]: So they're trying to lay the foundation for cheap mortgage money. [SPEAKER_03]: a credit boom, just if we can't have really economic growth, let's create fake economic growth that Trump can take credit for.

[SPEAKER_03]: Let's let the Fed, let's print all this money and spend it, goose to stock market, goose to real estate market, party like it's, you know, nineteen, ninety-nine, and a bubble, and who gives a shit when it pops? [SPEAKER_03]: Because I'll be out of office by then, right? [SPEAKER_03]: That's probably Trump's, you know, thinking. [SPEAKER_02]: I have a, it may we'll leave it at this point. [SPEAKER_02]: I think we've been going a while, but I, I just like the more nuanced view.

[SPEAKER_02]: And we can perhaps discuss this more at another time, but one of the things you said back there was that this is going to end in a currency crisis. [SPEAKER_02]: This is going to, you know, it said, I said, that's that's that's guaranteed. [SPEAKER_02]: And I was slightly more nuanced view. [SPEAKER_02]: I think the current trajectory. [SPEAKER_02]: is really bad. [SPEAKER_02]: There's just no other way to put it.

[SPEAKER_02]: You cannot, you cannot, you can't spend twenty-two percent of your tax revenue, just to pay interest on your national debt, have your national debt growing so much faster than your economy, and be staring down the barrel of significantly higher interest rates, which is going to exponentially grow your outgoing interest payments, the percentage of tax revenue, the percentage of GDP that you have to pay just to service the debt, [SPEAKER_02]: You can't be a powerful nation.

[SPEAKER_02]: You're not a country, you're not a government that is in a sound fiscal position. [SPEAKER_02]: That's just something that does, it just doesn't end well. [SPEAKER_02]: Historically speaking, every single time this has happened throughout history, virtually every single time, it's just ended very, very poorly. [SPEAKER_02]: There are very few instances in which it hasn't ended in some kind of major issue, major crisis.

[SPEAKER_02]: There are, however, [SPEAKER_02]: a few exceptions. [SPEAKER_02]: And we can talk about some of those exceptions, you know, what they were in the past, maybe another time. [SPEAKER_02]: But there are exceptions. [SPEAKER_02]: And I just, I would perhaps leave the audience in saying that it is technically possible.

[SPEAKER_02]: There are ways in which [SPEAKER_03]: major crisis is avoided and and all these sort of things it is technically possible not on the current trajectory and there's going to have to be a hard hard hard turn and that's probably very quickly you know probably much smaller countries that you know may have an easier time building the consensus necessary to do that but I think one of the things it's interesting I think you probably have explained this better than than anybody is

[SPEAKER_03]: a lot of these countries you go back throughout history and you look at dominant economic powers or even countries that maybe weren't dominant but they were very prosperous and then they had a crisis but on the dawn of that crisis when they were very close to going over the edge nobody knew I mean it seemed like everything was fine

[SPEAKER_03]: until it wasn't until there was a collapse and you know nobody knew I mean yeah maybe people like me were warning about things oh yeah eventually sure you know long run yeah but but you get right up to the point where you like you're going up to the edge and you're just you don't even realize that you're about to fall off and you're so close to it yet it seems like it's so far away and [SPEAKER_03]: Everything changes almost overnight, and you find yourself in this crisis.

[SPEAKER_03]: And I think that that could happen very quickly in the United States, where our fortunes turn overnight in the currency markets, in the bond market, a precious metals market, where you go to sleep, and in the next morning, you're living in a whole new world. [SPEAKER_02]: Well, anybody think that can't happen, obviously, wasn't awake during the pandemic. [SPEAKER_02]: I mean, we went to bed one day and woke up the next morning to a different world.

[SPEAKER_02]: And you're absolutely right. [SPEAKER_02]: Things can happen very, very, very quickly. [SPEAKER_02]: Either way, I mean, things can get better, very quickly, things can get worse, very quickly. [SPEAKER_02]: You know, even though I'll say like, yeah, like things can get better. [SPEAKER_02]: You look at Britain in the seventeen nineties early, eighteen hundreds.

[SPEAKER_02]: I mean, these people, they had a they had a major financial crisis gold species had had left the island all together, you know, banking crises. [SPEAKER_02]: They had a basically a recession massive national debt. [SPEAKER_02]: And most importantly, their moral enemy was breathing down their necks and everybody thought they were going to be speaking French before long and Napoleon was going to come across the channel and enslave everybody and yet they got over it.

[SPEAKER_02]: They managed to grow their way out of debt. [SPEAKER_02]: They managed to fix all their problems. [SPEAKER_02]: I mentioned the nineteen nineties earlier. [SPEAKER_02]: They went into the nineties paying twenty eight percent of tax revenue just to cover the interest bill on the national debt. [SPEAKER_02]: And they manage to resolve it. [SPEAKER_02]: And there are a lot of reasons, I think a lot of help from the Fed and a number of other things.

[SPEAKER_02]: But it's not a foregone conclusion, but man, if this current trajectory, it's just, it's not looking good. [SPEAKER_03]: And what, what is there to change it? [SPEAKER_03]: There's no political pressure [SPEAKER_03]: to do anything about it, when the people that were supposedly elected to make a difference, I mean, look at all that douche stuff, right? [SPEAKER_03]: All that, oh, yeah, we're gonna slash trillions and trillions of dollars out of the budget.

[SPEAKER_03]: That's what Elon Musk was saying. [SPEAKER_03]: It's all gone, right? [SPEAKER_03]: It was all smoke and mirrors. [SPEAKER_03]: It was just rhetoric to get votes. [SPEAKER_03]: It was part of, it was just part of, I think, a troupe show. [SPEAKER_02]: I think Elon absolutely intended to do everything that he set out to do. [SPEAKER_03]: Oh, yeah, he was just, you know, then he ran into reality.

[SPEAKER_02]: You and I actually argued about this and you said, he said, no, he's not going to be able to do that. [SPEAKER_02]: I said, come on, you're crazy. [SPEAKER_02]: The guy who catches rocket ships. [SPEAKER_02]: Chopsticks isn't going to be able to cut some money from the debt. [SPEAKER_02]: I was wrong. [SPEAKER_02]: You were right. [SPEAKER_02]: And it was just got chewed up by the system.

[SPEAKER_02]: And that's crazy to think that the richest kind of world couldn't manage to, you know, on his own dime go in there and actually pass the budget. [SPEAKER_03]: Yeah, it's not going to happen. [SPEAKER_03]: You know, they're just going to do whatever they can to a vertechrysis. [SPEAKER_03]: And unfortunately, the only way to a vertechrysis is to make it worse. [SPEAKER_03]: That's the only way you can postpone it is by exacerbating the size of the problem.

[SPEAKER_03]: So at some point, you know, you get to the, you can't kick that can down the road. [SPEAKER_03]: And we're going to get that crisis. [SPEAKER_03]: So meanwhile, we'll wrap this up. [SPEAKER_03]: You know, my next podcast is going to be Sunday night. [SPEAKER_03]: I'm going to do one because I'm going to talk about on Friday. [SPEAKER_03]: We have pals, final Jackson whole speech.

[SPEAKER_03]: And so that could be a market mover and I [SPEAKER_03]: I will be discussing what he says and doesn't say about interest rates and inflation and the economy and stuff like that. [SPEAKER_03]: And remember to check out James's podcast on the official shift sovereign YouTube channel and follow him. [SPEAKER_03]: He's also on X. I don't know if he's posting his office as I do, but he puts out postline X. So follow him on social media. [SPEAKER_03]: And I start reading the newsletter.

[SPEAKER_03]: I mean, I look forward. [SPEAKER_03]: One of the things that I really look forward to reading is the shift-solver newsletters, because most of them, you know, I'm a ease right now. [SPEAKER_03]: I'm reading them, and they're really well written, and a lot of times I learned stuff that I didn't even know, and then I can talk about them on the podcast.

[SPEAKER_03]: But you should make a habit and you know the free ones are pretty good and then there's a lot of extra stuff That you could learn about in fact.

[SPEAKER_03]: Didn't you recently just open up the window for total access people could be a total access members Yeah, we have we have different different different products and services inside of ship sovereign So we have you you want to learn about total access because I met a lot of the total access members at some of the events that I went to it's really a great group of people [SPEAKER_02]: You went to one. [SPEAKER_02]: We had some time ago.

[SPEAKER_02]: We had the former president of Mexico. [SPEAKER_02]: We did it in Mexico. [SPEAKER_02]: Yeah. [SPEAKER_02]: Yeah. [SPEAKER_02]: Yeah. [SPEAKER_02]: And it's just a great group.

[SPEAKER_02]: We do very exclusive, closed door conferences. [SPEAKER_02]: We bring a lot of very kind of high level. [SPEAKER_02]: I don't like to use thought leader because I just sound so nineteen and four. [SPEAKER_02]: But I mean, people that are quite, you know, advanced and a lot of things that are doing unique investment ideas, all sorts of things. [SPEAKER_02]: And really like our group is so close. [SPEAKER_02]: These things are like family gatherings.

[SPEAKER_02]: Many people really feel [SPEAKER_02]: Yeah, no, it's really they've like found their tribe and and you know, it's just isn't a I watch my kids play and they start hanging out with a little kids just because they're the same size and you know as an adult it gets a lot more difficult to meet people that are very like minded and and you know you share a lot of values and interest with and that's really what our group is it's it's really great.

[SPEAKER_02]: We only open up enrollment, frankly very rarely, and we are now. [SPEAKER_02]: So it's worth checking. [SPEAKER_03]: Yeah, so you go, how do they enroll? [SPEAKER_02]: They just go to Schiff Sovereign. [SPEAKER_02]: And yeah, they can see it on the website on Schiff Sovereign. [SPEAKER_02]: Yeah. [SPEAKER_03]: All right, well great. [SPEAKER_03]: And you know, hopefully we'll do some more of these podcasts, what James is around.

[SPEAKER_03]: He hasn't been in Puerto Rico too often recently. [SPEAKER_03]: So, you know, he hasn't been in the studio. [SPEAKER_03]: But he was living here. [SPEAKER_03]: He was living here for a few years and now he's abroad. [SPEAKER_03]: uh... maybe he'll come back uh... but uh... yet will be great to have more podcasts with you thanks for all right thanks for coming by all right thank everybody