Trump Fires BLS Commissioner, Agitates for Fed Mutiny - Ep 1034

[SPEAKER_02]: Make no friends in the pits and you take no prisoners. [SPEAKER_02]: One minute, you're up, half a minute, and enjoy beans in the next bowl. [SPEAKER_02]: Your kids don't go to college and they've registered mentally with me. [SPEAKER_01]: The revolution starts now. [SPEAKER_01]: 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 on. [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 reside. [SPEAKER_01]: I don't know when they decided that they wanted to make a virtue out of selfishness. [SPEAKER_01]: Your money. [SPEAKER_01]: Your stories. [SPEAKER_01]: Your freedom. [SPEAKER_01]: The Peter ship shall.

[SPEAKER_02]: Well, Friday was the first day of August, and the first Friday of every new month, we get the jobs report. [SPEAKER_02]: The non-farm payroll report that comes out from the Department of Labor [SPEAKER_02]: It happens to be the biggest economic data point that comes out. [SPEAKER_02]: Although now, the inflation numbers, the CPI, PPI are actually given a lot more weight than they used to, given that Fed moves now seem to hang on the inflation numbers.

[SPEAKER_02]: But the job numbers have been very important for years and years. [SPEAKER_02]: I remember when it was the trade deficits [SPEAKER_02]: that were the most important monthly number. [SPEAKER_02]: People waited on pins and needles for the trade deficits. [SPEAKER_02]: And that's when people were actually worried about the big trade deficits.

[SPEAKER_02]: Now that nobody worries about them, even though they're much bigger, nobody even reports [SPEAKER_02]: the trade deficit really let alone anticipates it but it used to be a big market mover you would see big swings in the currency markets the bond market stock market when the the trade numbers came out well now you see the bigger swings in all those markets based on the jobs number now anybody who's been a regular listener to this podcast

[SPEAKER_02]: knows that I've been very critical of the accuracy of these numbers, especially the last two job reports, because the last two job reports were both beats where the number came out bigger or stronger, however you want to describe it, then what the consensus forecast had been. [SPEAKER_02]: Now, the bars were pretty low. [SPEAKER_02]: They weren't expecting a lot of job creation. [SPEAKER_02]: I think it was maybe around a hundred twenty five hundred thirty thousand.

[SPEAKER_02]: So that's not a lot of jobs to be created. [SPEAKER_02]: But that's what everybody was looking for. [SPEAKER_02]: And because the bar was set low. [SPEAKER_02]: We were able to beat it. [SPEAKER_02]: The numbers came out better than we expected. [SPEAKER_02]: And that was always the headline. [SPEAKER_02]: Better than expected job creation. [SPEAKER_02]: Donald Trump was the first to claim credit for the better jobs data.

[SPEAKER_02]: Wall Street claim credit you know two months ago when we got the better than expected jobs report gold dropped I think forty dollars that day you know the dollar was stronger to but we had a forty dollar drop in the price of gold and the whole decline was due to the beat right the stronger than expected jobs report last month

[SPEAKER_02]: when we got another beat, goal was down about twenty bucks. [SPEAKER_02]: So sixty dollars off on the price of gold because of two jobs numbers that were better than estimates. [SPEAKER_02]: Now if you remember what did I say and you can just roll the tape and go back and look at my last two podcasts that I did. [SPEAKER_02]: following the jobs report. [SPEAKER_02]: You could also go look at my ex-feed and see what I had to post about the numbers.

[SPEAKER_02]: But I said it is ridiculous that anybody is celebrating these numbers that Trump is bragging about them, that markets are moving on them because they're not real. [SPEAKER_02]: They are going to be revised down. [SPEAKER_02]: Now, how did I know they were going to be revised down, which, of course, they were, and I'm going to get to that. [SPEAKER_02]: But I knew that because all the numbers are pretty much revised down.

[SPEAKER_02]: In fact, prior to the revisions that we just got, the prior four months had all been downward revisions. [SPEAKER_02]: they announced on Friday, downer revisions to May and June. [SPEAKER_02]: So we've now had six consecutive downer revisions from the initial estimates. [SPEAKER_02]: And that means every single jobs report that we've had since Trump's been president was revised down.

[SPEAKER_02]: And it means all the reports that the markets reacted to as being beats were actually misses, meaning that they reported the correct number initially, the markets would have done the opposite of what they actually did based on this bad data. [SPEAKER_02]: Now, if this was just a random miss, if the data was just unreliable, and they have to correct it, [SPEAKER_02]: you would expect that half the revisions would be up and half would be down.

[SPEAKER_02]: It's like tossing a coin, right? [SPEAKER_02]: It's either up or down if it's random. [SPEAKER_02]: The fact that we've revised down six consecutive numbers means it's not random. [SPEAKER_02]: There is a flaw in the methodology for reporting the jobs, at least at the initial stage. [SPEAKER_02]: So whether it's by accident or by design, and the skeptic in me would say it's by design, maybe there's no coincidences when it comes to government.

[SPEAKER_02]: But even if it's just accidental, you have to accept the fact that whatever is reported initially means nothing, that the real number is much lower, and it's going to be revised later. [SPEAKER_02]: Now, normally, nobody pays attention to the revisions. [SPEAKER_02]: That's part of the game.

[SPEAKER_02]: Every month, they revise down the previous month, but then they come up with another number that beats, and everybody focuses on the beat, the headline number, and they miss the revisions, and the game is played over and over again.

[SPEAKER_02]: And so I call this out, and I've been saying that the jobs market is weak, that the labor market is weak. [SPEAKER_02]: I mean, we keep beating these low numbers, [SPEAKER_02]: But the reality is we miss the numbers. [SPEAKER_02]: And now when we got the jobs number on Friday, this time the revisions were so big. [SPEAKER_02]: In fact, they're unprecedented in size for two back to back months. [SPEAKER_02]: We haven't seen this before.

[SPEAKER_02]: that now the markets actually paid attention to the fact that they were downward revisions. [SPEAKER_02]: But also the number that they reported for July was also a miss. [SPEAKER_02]: So it was a trifecta. [SPEAKER_02]: We missed on the expectations for July. [SPEAKER_02]: And we revised down the prior two months. [SPEAKER_02]: So before even get to the revisions, let me talk about the current report, which was very weak.

[SPEAKER_02]: So the estimate was for a hundred and ten thousand jobs created for July. [SPEAKER_02]: Again, a low bar. [SPEAKER_02]: People probably thought we would beat it. [SPEAKER_02]: Instead, we missed it. [SPEAKER_02]: Seventy three thousand jobs created. [SPEAKER_02]: Now again, [SPEAKER_02]: What are the odds that we actually created seventy three thousand jobs? [SPEAKER_02]: I'd say close to zero.

[SPEAKER_02]: If we revise down the last six reports, what's the odds that this report is not going to get revised down? [SPEAKER_02]: pretty slim. [SPEAKER_02]: I think we probably lost jobs in July. [SPEAKER_02]: By the time they revised this number, we'll probably find out that it was in minus.

[SPEAKER_02]: I mean, nobody even talked about that. [SPEAKER_02]: They talked about the prior revisions. [SPEAKER_02]: Why wasn't anybody talking about the fact that we can't trust this number either? [SPEAKER_02]: That this number is probably going to be revised down. [SPEAKER_02]: And in fact, if you look [SPEAKER_02]: beneath the surface at the birth death model, which you know, I point this out a lot because it's so subjective.

[SPEAKER_02]: I mean, how do you know how many businesses were created or shut down? [SPEAKER_02]: I think they always overestimate. [SPEAKER_02]: But the birth death model, all by itself, added ninety-seven thousand jobs. [SPEAKER_02]: Well, that's more than the total number of jobs we created. [SPEAKER_02]: So the whole thing is a guess. [SPEAKER_02]: they will get more data over the next couple of months and then we'll get a more reliable number and it'll probably be a negative number.

[SPEAKER_02]: So this number is weak and it's probably going to get revised even weaker. [SPEAKER_02]: Now the headline number, which is a number that the Fed and I'm going to talk about power later on in the press conference from earlier in the week, but the official unemployment rate didn't go up. [SPEAKER_02]: It helped steady at four point two percent, but the reason that it didn't go up [SPEAKER_02]: was not because a lot of people didn't lose their jobs or people got jobs.

[SPEAKER_02]: It's because a lot of people left the labor market. [SPEAKER_02]: The labor force participation rate shrank to sixty two point two from sixty two point three, the prior month, the expectation was sixty two point four. [SPEAKER_02]: But what does it mean when people leave the labor market? [SPEAKER_02]: It means that some people that lost their jobs just decided they didn't want to look for another one. [SPEAKER_02]: And so they're not counted as being unemployed.

[SPEAKER_02]: And so that's why the unemployment rate stayed down. [SPEAKER_02]: But one unemployment measure that's more accurate and that's more realistic than that one is the use six number, which includes people who are discouraged for under a year [SPEAKER_02]: and it includes people who are working part-time, but want a full-time job. [SPEAKER_02]: So they're still looking for a full-time job, but they settle for a part-time job while they're looking, right?

[SPEAKER_02]: Those, those people are in there. [SPEAKER_02]: They used to be in the main number. [SPEAKER_02]: They took them out in the nineties to make the number lower, because nobody pays attention to the use six number, which is the actual number. [SPEAKER_02]: But even that number isn't what it used to be, because they used to count all discouraged. [SPEAKER_02]: workers.

[SPEAKER_02]: So if you were unemployed for four years, and because you were so discouraged, you have to look for a job in four years, you were still counted as unemployed.

[SPEAKER_02]: But now they cut off the discouraged workers at a year. [SPEAKER_02]: So after a year has gone by, if you're still unemployed and you're still discouraged, you don't even count in the U.S. [SPEAKER_02]: number, right? [SPEAKER_02]: All those people used to count in the main number, right? [SPEAKER_02]: So the main numbers all BS now. [SPEAKER_02]: But the U.S. [SPEAKER_02]: Increase from seven point seven to seven point nine. [SPEAKER_02]: That's a pretty big jump.

[SPEAKER_02]: And we're almost at eight percent. [SPEAKER_02]: That's a lot of unemployment. [SPEAKER_02]: The Fed wants to pretend that the unemployment rate is close to four percent. [SPEAKER_02]: It's almost eight percent. [SPEAKER_02]: That's why it's all BS. [SPEAKER_02]: Palsas, we're near full employment. [SPEAKER_02]: We're nowhere near full employment. [SPEAKER_02]: And I've been talking about how weak this labor market is.

[SPEAKER_02]: Since before Trump was president, when Biden was president, and it's weaker now. [SPEAKER_02]: Now look at manufacturing. [SPEAKER_02]: Manufacturing the initial report last month was that manufacturing lost seven thousand jobs, right? [SPEAKER_02]: Nobody seemed to care about that. [SPEAKER_02]: Well, they revised that to a bigger loss. [SPEAKER_02]: Fifteen thousand manufacturing jobs were lost. [SPEAKER_02]: Last month, we lost another eleven thousand in July.

[SPEAKER_02]: That's back to back, you know, big losses. [SPEAKER_02]: They were expecting a game. [SPEAKER_02]: We got a loss. [SPEAKER_02]: So, you know, Trump is out there trumpeting this re-industrialization of America thanks to his tariffs, right? [SPEAKER_02]: The tariffs are supposed to revitalize manufacturing, right? [SPEAKER_02]: Well, why are we seeing all these job losses in manufacturing? [SPEAKER_02]: Wait, where are we seeing the job gains?

[SPEAKER_02]: In local governments, state and local governments, in social services, in a health care. [SPEAKER_02]: So he's not creating jobs where he's promising to create them, we are still hemorrhaging those jobs. [SPEAKER_02]: Now, average hourly earnings, that met estimates up point three, but year over year, up three point nine. [SPEAKER_02]: versus three point seven. [SPEAKER_02]: Why are earnings going up because inflation is driving up wages and striving up prices?

[SPEAKER_02]: So this report, I think, is more evidence of stagulation, which, you know, and we got a lot more weak economic data that came out, even yesterday. [SPEAKER_02]: At the same day, we got the jobs numbers, or Friday, rather. [SPEAKER_02]: The same day we got the jobs numbers, we got weak economic data on manufacturing. [SPEAKER_02]: In fact, the manufacturing ISM, which anything below fifty is recession. [SPEAKER_02]: And it was forty-nine last month.

[SPEAKER_02]: It was supposed to improve to forty-nine and a half. [SPEAKER_02]: And instead, it went in the other direction and went down to forty-eight. [SPEAKER_02]: So this is a stack-flation economy. [SPEAKER_02]: But let me get [SPEAKER_02]: to the revisions, because that is where the real shocks were in the magnitude of these revisions.

[SPEAKER_02]: So remember, the markets and the Trump administration celebrated [SPEAKER_02]: the jobs numbers when they were originally released because as originally released they were beats and so everybody was able to talk about how we're creating more jobs than people thought and therefore the tariffs aren't hurting because the economy is booming and you know it's all Trump's fault right well anyway they revised the may jobs number down right

[SPEAKER_02]: from what was originally reported, or I think it was even revised a little higher last month, so even the revision was wrong initially. [SPEAKER_02]: But the main number, which we thought was a hundred and forty-four thousand, that was revised to just nineteen thousand jobs. [SPEAKER_02]: Nineteen thousand, that is a huge miss, that is a horrible number. [SPEAKER_02]: I said goal originally dumped forty dollars on that number.

[SPEAKER_02]: had the nineteen thousand dollar or nineteen thousand number been released initially gold probably would have gone up forty dollars instead of down forty dollars um... now the june number was revised by a similar amount it was reported last month at a hundred forty seven thousand that was a beat it was a small beat but it was a beat that's been revised down to fourteen thousand [SPEAKER_02]: I mean that is a terrible number.

[SPEAKER_02]: Again, gold was up down twenty bucks on that beat. [SPEAKER_02]: If they would have reported fourteen thousand gold probably would have shot up by a lot more than twenty dollars.

[SPEAKER_02]: It might have been up fifty dollars. [SPEAKER_02]: In fact, gold was up yesterday. [SPEAKER_02]: It closed up seventy three dollars on the bad news, a back above thirty three sixty. [SPEAKER_02]: But I think gold would probably already be above thirty five hundred. [SPEAKER_02]: Had we got the correct jobs numbers right off the bat. [SPEAKER_02]: because all gold really did was recover ground that never should have lost. [SPEAKER_02]: But it should have gained a lot of ground.

[SPEAKER_02]: Now, I think it's going to recover that ground pretty quickly. [SPEAKER_02]: I think now that people are going to realize what they should have realized a long time ago that we have a week labor market. [SPEAKER_02]: And of course, a lot of people are thinking that now this week labor market is going to give the Fed cover.

[SPEAKER_02]: To cut rates in September and I'm gonna get into that in a minute I just want to talk a little bit more about these jobs numbers because after the jobs numbers came out of course Donald Trump was very unhappy with these numbers and About a few hours later [SPEAKER_02]: I read on the tape that Trump fired, fired the woman who is in charge of the Labor Department, where they come up with these fits it. [SPEAKER_02]: He fired it for being incompetent, right?

[SPEAKER_02]: For doing a lousy job. [SPEAKER_02]: Now initially, I was wondering, well, okay, well, what exactly is he firing her for? [SPEAKER_02]: Is he firing her because the last six jobs numbers were all off? [SPEAKER_02]: and they all had to be revised down. [SPEAKER_02]: So is that why he's firing her because, you know, she's doing such a bad job that they're so far off every month and they have to go back and they have to revise it.

[SPEAKER_02]: You know, no, that's not why he's firing her. [SPEAKER_02]: He made it clear. [SPEAKER_02]: He came out and said later in the day, I'm firing her because today's jobs numbers were rigged. [SPEAKER_02]: I don't believe these numbers. [SPEAKER_02]: I don't believe these revisions.

[SPEAKER_02]: He's saying that he believes that the reason the job's number missed [SPEAKER_02]: And the reason that the last two jobs reports were revised down by a record a number of jobs was just to make him look bad. [SPEAKER_02]: So the labor department, right, and it's course, the person in charge doesn't compute these numbers. [SPEAKER_02]: I mean, maybe she gets them. [SPEAKER_02]: There's all number of people. [SPEAKER_02]: There's lots of people.

[SPEAKER_02]: I forget how many, forty people, maybe I read, that work on these numbers. [SPEAKER_02]: Now, I think it's a waste of time, just firearm, right? [SPEAKER_02]: And I think the numbers are so inaccurate, that what's the point of wasting all this money on all these government pencil pushers to come up with inaccurate numbers? [SPEAKER_02]: Look, ADP comes out with a number. [SPEAKER_02]: That's good enough.

[SPEAKER_02]: I mean, if the markets want job statistics, let private companies supply them. [SPEAKER_02]: I mean, I don't like the government anyway supplying economic data because I don't trust the government because the government is biased. [SPEAKER_02]: Again, it's like asking the mafia to compute crime statistics.

[SPEAKER_02]: obviously the mafia is going to say hey there's no crime we don't need any cops he look nobody nobody's getting robbed there's no extortion there's no racketeering there's no need for any police of course right the mafia you know is not going to be you know unbiased right or it's like you know letting a kid's grade their own report cards oh my kid got straight days whether you know of course right if the kids grade their own report cards we think they're gonna fail themselves so you need an objective

[SPEAKER_02]: uh... person so i think we should we should we should fire everybody he shouldn't just fire the head fire the entire department shut it down we don't even need it but you know that i'd digress on that i don't want to you know go down that rabbit hole right now i want to stay on the uh... the jobs numbers but so trump fires her because this is rig which is impossible for her to rig it uh... it would have to be a conspiracy among [SPEAKER_02]: everybody.

[SPEAKER_02]: And again, when I have been saying the numbers were bad, I didn't say it was a conspiracy to fudge the numbers. [SPEAKER_02]: My critique has always been that the methodology is wrong. [SPEAKER_02]: The way they calculate these numbers, that's the problem. [SPEAKER_02]: And maybe they've been designed to be wrong. [SPEAKER_02]: It's not a conspiracy to fake them.

[SPEAKER_02]: Nobody is getting the numbers and they're low and they're saying, oh, let's just lie and make them good because we want to make Obama or Biden look good. [SPEAKER_02]: We want to make Trump look bad. [SPEAKER_02]: So let's erase this good number. [SPEAKER_02]: We got and substitute it. [SPEAKER_02]: They couldn't get away with that. [SPEAKER_02]: But if the methodology is wrong, then it's garbage in garbage out. [SPEAKER_02]: It's the same thing with GDP.

[SPEAKER_02]: It's the same thing with inflation, except in the other direction. [SPEAKER_02]: So the unemployment numbers are lower than they really are. [SPEAKER_02]: But the number of jobs created is higher. [SPEAKER_02]: GDP is always higher. [SPEAKER_02]: In fact, we got three percent GDP that came out on Wednesday, stronger than expected. [SPEAKER_02]: Trump was talking about how great that was. [SPEAKER_02]: Oh, look, three percent growth. [SPEAKER_02]: Well, why is that number real?

[SPEAKER_02]: And in fact, all the jobs reports that came out in the past that were wrong, but initially beat the estimates, Trump believed that, oh yeah, those statistics are accurate. [SPEAKER_02]: But when it's a bad number, oh, it's been rigged. [SPEAKER_02]: And of course, if the head of the Labor Department was really trying to make Trump look bad, why did she wait until August first to do it? [SPEAKER_02]: Why did all these other reports?

[SPEAKER_02]: In fact, every single jobs report that has been released, I think since Trump was president, was a B. [SPEAKER_02]: Now, they were all revised down to a miss, but the original reports were all beats wide and she rigged those, because those are the ones that Trump was able to go out and brag about. [SPEAKER_02]: So if there was a conspiracy to make Trump look bad, [SPEAKER_02]: Why didn't they do it earlier?

[SPEAKER_02]: They just decided they wanted to make them look bad after all these months of making them look good. [SPEAKER_02]: So it's ridiculous. [SPEAKER_02]: I mean, talk about shooting the messenger. [SPEAKER_02]: That's what Trump does. [SPEAKER_02]: But again, this is all part of the Trump show. [SPEAKER_02]: I've been explaining this. [SPEAKER_02]: None of this is real, right? [SPEAKER_02]: So Trump is confronted with bad economic data.

[SPEAKER_02]: And rather than acknowledge that it's bad, well, let's just fire the person who compiled it because the numbers can't be bad. [SPEAKER_02]: And that's what he said. [SPEAKER_02]: He said, the economy is great. [SPEAKER_02]: We are booming, right? [SPEAKER_02]: And so these numbers must be bad because we have a great economy. [SPEAKER_02]: Well, how does he know we have a great economy? [SPEAKER_02]: Because he says so.

[SPEAKER_02]: I mean, maybe Trump just believes [SPEAKER_02]: that he's so good at whatever he does, that the fact that he is president means we can't but have a great economy, because he's the greatest president ever, and so we must have the greatest economy ever. [SPEAKER_02]: I mean, that's what he believes. [SPEAKER_02]: In fact, you know, and I'm going to get into tariffs later, but, you know, he's talking about how, you know, we're getting rich on tariffs.

[SPEAKER_02]: I mean, how do you get enriched by taxing yourself? [SPEAKER_02]: I mean, does he really believe that the road to riches lies in taxation, that the more taxes we have, the richer we're going to be, it's actually the opposite. [SPEAKER_02]: You know, we're not tariffing ourselves into wealth, we're tariffing ourselves into poverty because tariffs reduce free trade. [SPEAKER_02]: And the freer we are, the more prosperous we are.

[SPEAKER_02]: So we don't increase prosperity by increasing taxes. [SPEAKER_02]: We do it by decreasing the size of government so that we can reduce taxes. [SPEAKER_02]: But again, I'm going to get into that. [SPEAKER_02]: Let me stick on the jobs again before I jump ahead of myself. [SPEAKER_02]: But anyway, so he fires this person.

[SPEAKER_02]: Now, of course, who is Trump going to replace her with? [SPEAKER_02]: Nobody is going to trust, whoever Trump appoints. [SPEAKER_02]: Because if you get fired, [SPEAKER_02]: for reporting bad news? [SPEAKER_02]: Well, you're going to be reluctant to report bad news. [SPEAKER_02]: The reason that a lot of people don't want to be the messenger of bad news is because they don't want to get shot.

[SPEAKER_02]: So if you have a track record of shooting the messenger of bad news and you're the next messenger, what kind of news are you going to bring? [SPEAKER_02]: Well, you're going to have to bring good news. [SPEAKER_02]: But the markets now [SPEAKER_02]: are going to start to pay attention to this. [SPEAKER_02]: And they are going to realize that they're being spoon fed propaganda when it comes to the government rather than legitimate economic statistics.

[SPEAKER_02]: And all of this, I think, is going to undermine our financial markets, undermine the dollar. [SPEAKER_02]: In fact, the dollar got clobbered on Friday. [SPEAKER_02]: Now, it gained a lot on Wednesday based on the Fed press conference. [SPEAKER_02]: But it lost a lot of the back. [SPEAKER_02]: The euro was up one and a half percent. [SPEAKER_02]: on Friday, it closed just below one, sixteen. [SPEAKER_02]: It was down about one, fourteen on Wednesday.

[SPEAKER_02]: The biggest mover was in the Japanese yen, where the dollar sank two and a quarter percent against the yen. [SPEAKER_02]: That is a big move against the yen in one day. [SPEAKER_02]: And stock markets were down down about five hundred fifty points, bigger move in the Nasdaq, which it just made a new high on, I think, Thursday. [SPEAKER_02]: Was that record territory? [SPEAKER_02]: And it was down about two percent, Russell, two thousand, also down a little over two percent.

[SPEAKER_02]: That index course never made a new high, just the S&P and the Nasdaq led by the big cuts, stocks like Nvidia, big record highs this week in meta, in Microsoft. [SPEAKER_02]: So those are the big names that were driving the averages to new highs.

[SPEAKER_02]: But beneath the surface, the troops, [SPEAKER_02]: uh... were not following the generals and you know now that the terrace are kicking in this week the reciprocal terrace [SPEAKER_02]: Um, you know, the deadline was supposed to be August first, which would have been Friday. [SPEAKER_02]: And, uh, you know, we taco that, uh, to, uh, the, the, the seventh, I think on Thursday. [SPEAKER_02]: So Thursday's the new drop deadline for a lot of these new tariffs to come in.

[SPEAKER_02]: And again, I don't think, uh, you know, Trump is going to chicken out. [SPEAKER_02]: I think that, you know, a lot of these tariffs, they're not quite as high as what was originally reported on liberation day. [SPEAKER_02]: But a lot of them are pretty damn high. [SPEAKER_02]: And I think the markets are going to get hit. [SPEAKER_02]: I mean, I think the reaction following Liberation Day was right.

[SPEAKER_02]: I think the bounce that followed was a dead cat bounce, a sucker rally, maybe some short covering, a lot of meme stocks and crypto. [SPEAKER_02]: And by the way, Bitcoin was down about three percent on Friday. [SPEAKER_02]: Well, gold was up to two to quarter percent.

[SPEAKER_02]: Again, anybody who's under the delusion that Bitcoin is digital gold is raw. [SPEAKER_02]: If it was digital gold, it should trade like gold. [SPEAKER_02]: Even if it's not like gold in the real sense that it's a metal, it should at least mimic it in some kind of financial sense, but it is negatively correlated. [SPEAKER_02]: It goes with the Nasdaq. [SPEAKER_02]: So it's a digital Nasdaq stock with no revenue, no earnings, no dividends, no assets.

[SPEAKER_02]: I mean, no nothing, right? [SPEAKER_02]: So it's got nothing to do with gold. [SPEAKER_02]: So in other words, it doesn't have any value whatsoever, but it was down a three percent. [SPEAKER_02]: And I think all these markets are going to sell off as the reality of these tariff set in. [SPEAKER_02]: They are going to mean higher prices, and they are going to mean a weaker economy, and they are going to mean job losses.

[SPEAKER_02]: And we have all sorts of other problems that are going to be weighing on the economy. [SPEAKER_02]: But anyway, let me get to the Fed. [SPEAKER_02]: because we had a fed meeting on Wednesday. [SPEAKER_02]: And as expected, interest rates remained unchanged. [SPEAKER_02]: And nobody thought that Powell was going to give into the pressure to cut rates. [SPEAKER_02]: But there were two dissenters that were more recent, I guess, Trump appointees.

[SPEAKER_02]: I guess both of these individuals maybe have their eye on the prize of being fed chair. [SPEAKER_02]: But there were two dissenters. [SPEAKER_02]: And I actually agreed later on, we found out why they descended. [SPEAKER_02]: And they descended in part because they didn't think the labor market was as strong as everybody else thought. [SPEAKER_02]: And they're right about that, right?

[SPEAKER_02]: And in fact, if you listen to what Powell said during the press conference and it is prepared remarks, [SPEAKER_02]: He once again talked about how strong the economy is, how strong the labor market is, how we're near full employment. [SPEAKER_02]: No, we're not. [SPEAKER_02]: We're only at full employment if you're going to rely on a bullshit number, like four point two and close your eyes to the more realistic eight percent that you got with use six.

[SPEAKER_02]: So we're nowhere near full employment. [SPEAKER_02]: We have a weak labor market. [SPEAKER_02]: So why isn't the Fed hiking rates? [SPEAKER_02]: Well, pal told you it's because inflation is too high. [SPEAKER_02]: In fact, the most recent CPI that we got. [SPEAKER_02]: showed year-over-year inflation or CPI, right, not really inflation, but what they look at. [SPEAKER_02]: Two point seven percent increase. [SPEAKER_02]: Their target is two percent.

[SPEAKER_02]: We're at two point seven. [SPEAKER_02]: We're way above target. [SPEAKER_02]: So why should they be cutting rates? [SPEAKER_02]: In fact, Powell actually let the cat out of the bag. [SPEAKER_02]: In response to a question, somebody said, well, are you gonna look through the inflation, right? [SPEAKER_02]: Because it's temporary, a transitory, people are reluctant to say transitory, because the Fed got into a lot of trouble with that word before.

[SPEAKER_02]: But he was asked, will you look through the numbers and assume that it's just a one-off event? [SPEAKER_02]: And Powell said, well, we already are looking through the numbers because we're not hiking rates. [SPEAKER_02]: which was an admission that they should be hiking rates if they didn't believe that the uptick in inflation that they're seeing now was going to stick. [SPEAKER_02]: And the Fed is wrong.

[SPEAKER_02]: In other words, the Fed thinks that what we're seeing now is transitory, without wanting to say transitory. [SPEAKER_02]: Because we're at two points, seven percent. [SPEAKER_02]: We're not a two. [SPEAKER_02]: Remember, if the Fed was being honest, which is a big if, about two percent is the goal, right? [SPEAKER_02]: In two thousand and thirteen, the year over your increase in the CPI was one point five. [SPEAKER_02]: In two thousand, that was two thousand and thirteen.

[SPEAKER_02]: In fourteen, it was one point six. [SPEAKER_02]: So we were below two, but by less than we're above it now. [SPEAKER_02]: So we were not below two by a lot. [SPEAKER_02]: But because of that, the Fed was so desperate to get inflation to two percent. [SPEAKER_02]: It saw it as such a big problem that we were a half a percentage point below target. [SPEAKER_02]: That interest rates were at zero, zero. [SPEAKER_02]: And they launched QE three in twenty thirteen.

[SPEAKER_02]: The reason the justification was, hey, we're at one and a half percent and we need to be two. [SPEAKER_02]: And so we really want to make sure that inflation goes up to two.

[SPEAKER_02]: And so we're doing QE, right? [SPEAKER_02]: Now we are above two right now by more than we were below it. [SPEAKER_02]: And so if being below two by a half a percent, men, we need extreme ease. [SPEAKER_02]: Why don't we need extreme tightening now? [SPEAKER_02]: I mean, Powell even says that we're moderately restrictive. [SPEAKER_02]: And I don't agree. [SPEAKER_02]: I think we're stimulative. [SPEAKER_02]: I think that rates are still too low.

[SPEAKER_02]: They're lower than the real rate of inflation. [SPEAKER_02]: And you can look at the credit growth. [SPEAKER_02]: Credit continues to grow in this country. [SPEAKER_02]: And so that credit expansion is the inflation. [SPEAKER_02]: And money supply is growing. [SPEAKER_02]: Just look at it. [SPEAKER_02]: So the Fed is not being tight. [SPEAKER_02]: The Fed is still being easy despite the fact that we're above target by more now than we used to be below.

[SPEAKER_02]: Now, there was a question that Paul got and I think he lied. [SPEAKER_02]: And the reporter said, you know, do you worry about the interest burden that the government federal government faces on the national debt? [SPEAKER_02]: Because when you have interest rates up here at four and a half percent versus a lower number, that the government has to pay higher interest on all the treasuries that it rolls over and all the money it borrows.

[SPEAKER_02]: And Powell's answer was, no, we really don't think about that. [SPEAKER_02]: We really don't consider that at all. [SPEAKER_02]: How can they not think about that? [SPEAKER_02]: How can they not consider that? [SPEAKER_02]: That's like the elephant in a room. [SPEAKER_02]: I mean, that is a very important element of all this because it actually also determines the size of the day because the more [SPEAKER_02]: the government has to pay an interest.

[SPEAKER_02]: The higher the budget deficits because the extra interest payments are themselves borrow and are added to the deficits. [SPEAKER_02]: I mean right now interest on the national debt is like what one point three trillion a year. [SPEAKER_02]: That's more than half or about half of the entire budget deficit. [SPEAKER_02]: And as interest rates stay high and more of the low yielding [SPEAKER_02]: that matures and is rolled over, those deficits go get higher and higher.

[SPEAKER_02]: How can the Fed not consider the size of budget deficits in its monetary policy, in its economical analysis?

[SPEAKER_02]: I mean, doesn't the Fed try to figure out what's the economy going to be doing? [SPEAKER_02]: in a year or two or three, what is the labor market going to be like? [SPEAKER_02]: Does the Fed think that fiscal policy and the size of government debt has nothing to do with that? [SPEAKER_02]: Does it not think that maybe massive government borrowing might crowd out private sector borrowing?

[SPEAKER_02]: And maybe these exploding deficits means that the [SPEAKER_02]: private economy is going to be weaker that capital is going to be sucked out of the productive economy to feed the unproductive growing government that does defend not factor any of this into its analysis. [SPEAKER_02]: I mean, if it doesn't look at that, what the hell is it look at? [SPEAKER_02]: So I think he's just lying, but where he did tell the truth in a way.

[SPEAKER_02]: was about inflation being above target and the Fed being worried and the Fed, you know, he pinned it specifically on tariffs. [SPEAKER_02]: And again, tariffs are not the reason that we're going to have high inflation, right? [SPEAKER_02]: They're going to be an excuse that we're going to blame it on tariffs. [SPEAKER_02]: But tariffs are just going to add to the problem that consumers are going to be dealing with when it comes to higher prices because the inflation is still there.

[SPEAKER_02]: And the Fed is helping you create it by not hiking rates. [SPEAKER_02]: Powell should be increasing interest rates, but he's afraid to do it because he understands the impact that that's going to have on the economy, on the bubble, on government finances. [SPEAKER_02]: So the Fed is refraining from hiking rates, which they should be doing.

[SPEAKER_02]: They're just not cutting rates, because I think, and I've said this before, I think pal is afraid to let the cat out of the bag by cutting rates and having long-term rates go up, because that's going to be the end of it, right? [SPEAKER_02]: It defends cuts rates, and treasuries go down, and yields go up, which I think they're going to do, that is a huge risk that I think the Fed would rather not take.

[SPEAKER_02]: And so I think if they could just maintain the illusion that if they cut long-term rates will go down, it's better than actually cutting and shattering that myth because long-term rates would go up because that would create an even bigger problem.

[SPEAKER_02]: But Paul said that the Fed is going to make sure that whatever kind of short-term impact we get on prices from the tariffs [SPEAKER_02]: that that does not turn into a longer term inflation problem and that the Fed will do whatever it can to prevent that from happening, which to me means hikes, rates got to go up because we're going to see big increases in prices because of these tariffs. [SPEAKER_02]: I mean, there's no way around it.

[SPEAKER_02]: I mean, yes, they're looking at some of these CPI numbers and they're saying you see, they're still low. [SPEAKER_02]: Well, they're not that low and they're not that accurate. [SPEAKER_02]: But a lot of the price increases haven't been passed through yet. [SPEAKER_02]: The importers have paid these tariffs, right? [SPEAKER_02]: And now they need to start raising their prices to recover their costs just like they do with all sorts of costs.

[SPEAKER_02]: I mean, the idea that foreigners [SPEAKER_02]: are going to pay the tariffs is nonsense. [SPEAKER_02]: I mean, Trump still is operating under that delusion. [SPEAKER_02]: That's why he says we're getting rich off of tariffs because he thinks that the foreigners are paying our tariffs.

[SPEAKER_02]: Meanwhile, so the tariff rates that were supposed to kick in on Thursday [SPEAKER_02]: Canada is going up to thirty five percent from so that's a pretty big number for Canada. [SPEAKER_02]: Japan and the EU right fifteen that's where the deals are right Trump barely made every any deals I think it's got maybe about ten deals right the other ninety deals are eighty deals never paned out right so Trump is just imposing these tariffs.

[SPEAKER_02]: But India's twenty five percent that's a pretty big number. [SPEAKER_02]: Taiwan Vietnam Indonesia Philippines their nineteen or twenty percent. [SPEAKER_02]: Switzerland, thirty nine percent Switzerland. [SPEAKER_02]: Now I think this is a good example to use as to why [SPEAKER_02]: the, you know, the exporters aren't going to pay our tariffs. [SPEAKER_02]: So the makers of Swiss watches, you know, I'm wearing, I'm wearing the Rolex here today, right?

[SPEAKER_02]: And I think it's, you know, going to go up if I wanted to sell it now. [SPEAKER_02]: I think the use Rolex market is going to pick up in the United States because now there's going to be a thirty-nine percent tariff on on Rolexes and every other watch, you know, luxury watch that's made in Switzerland.

[SPEAKER_02]: Now to hear Trump talk, [SPEAKER_02]: The companies like Rolex is going to eat this tariff and just cut prices and sell its watches to Americans for about forty percent less than it sells them all over the world. [SPEAKER_02]: There's no way that that's going to happen. [SPEAKER_02]: Switzerland is not going to do that. [SPEAKER_02]: Switzerland is just going to keep its prices the same.

[SPEAKER_02]: And if you want to buy a new Rolex in America, [SPEAKER_02]: Well, you're just going to have to pay the tariff. [SPEAKER_02]: And a lot of people will pay the tariff, because Rolex is aren't cheap watches. [SPEAKER_02]: So if you're buying Rolex watches new, you are not pinched pennies. [SPEAKER_02]: You've got to have some money to buy a new Rolex. [SPEAKER_02]: And so I think a lot of people will [SPEAKER_02]: pay the higher price.

[SPEAKER_02]: Now they're going to be some people that won't buy another Rolex with a forty percent tariff. [SPEAKER_02]: They may wait, you know what? [SPEAKER_02]: I'll just buy one when the tariffs go away because you know they're not going to be there forever. [SPEAKER_02]: So I'm not going to be the idiot and pay a forty percent tariff on a Rolex, you know, and then have the tariff go away and then the price drops. [SPEAKER_02]: So I think more Americans will buy use Rolexes.

[SPEAKER_02]: But that's going to hurt the jewelry stores that predominantly sell the new ones. [SPEAKER_02]: If you buy a used one, a lot of times you're just buying it online from a private seller, you're not going into a jewelry store. [SPEAKER_02]: If they're stocking all the brand new ones, so their sales might go down. [SPEAKER_02]: But what are people going to do? [SPEAKER_02]: Well, when you happen to be in Canada, you happen to be in Mexico by yourself or always.

[SPEAKER_02]: If you're going to be upfront about it, you got to declare it when you bring it in. [SPEAKER_02]: And then you got to pay the tariff, right? [SPEAKER_02]: That's because America is paying the tariff. [SPEAKER_02]: So legally, if you are on vacation out of the United States and you buy a Rolex without a thirty-nine percent tariff, when you bring it back into the United States, you're supposed to pay the tariff. [SPEAKER_02]: Now, most people are probably not going to do it.

[SPEAKER_02]: Right? [SPEAKER_02]: You know, especially if they, if they wear the Rolex, I mean, maybe they, when they go on vacation, they could not even take a watch. [SPEAKER_02]: And so when they come back, all they've got is one watch and they're wearing it. [SPEAKER_02]: So it's not going to look very suspicious. [SPEAKER_02]: So I mean, so that's what's going to happen. [SPEAKER_02]: People are going to buy the watches when they're on vacation.

[SPEAKER_02]: They're going to buy a used watch. [SPEAKER_02]: And a few people might buy the watch and pay the terrorists. [SPEAKER_02]: But [SPEAKER_02]: Obviously, right, most people would say, well, who cares what the rich do with Rolex? [SPEAKER_02]: It's just a good point to show that the tariffs are not paid by the exporters, right? [SPEAKER_02]: If tariffs were paid by exporters, every country would just have tariffs.

[SPEAKER_02]: The fact of the matter is tariffs are pretty low around the world. [SPEAKER_02]: If they were such a big money maker, right? [SPEAKER_02]: If you just can get rich by having tariffs, why doesn't every country have high tariffs? [SPEAKER_02]: Trump is overplaying his hand to use an analogy that he gets because he's always talking about poker.

[SPEAKER_02]: He thinks the American consumer is in the driver's seat that we're so important to the world that the world will lose money to sell us stuff, that that's how important we are, that the world would rather sell products to America at a loss [SPEAKER_02]: then stop selling, which is complete nonsense. [SPEAKER_02]: Now, I know a lot of people say, well, they'll just build factories here. [SPEAKER_02]: No, they won't.

[SPEAKER_02]: Yes, there are a lot of these countries, the EU, Japan, right? [SPEAKER_02]: They made some promises about investments in the US. [SPEAKER_02]: Most of these investments are never going to take place because they're not legally enforceable. [SPEAKER_02]: They're just goals, right? [SPEAKER_02]: So the guys can say whatever they want, just so Trump can brag about stuff. [SPEAKER_02]: But it's not going to happen.

[SPEAKER_02]: because if a lot of these companies, let's say, you know, Rolex, if Rolex opened up a factory in America to make Rolex watches, those watches would be more expensive than buying the watch and paying the tariff. [SPEAKER_02]: And that would be the case with just about everything.

[SPEAKER_02]: So the tariffs are not going to cause manufacturing to come to the United States because it's still cheaper for Americans to pay the tariffs. [SPEAKER_02]: So they'll pay the tariffs. [SPEAKER_02]: But what the tariffs will do is make some current US manufacturing less competitive. [SPEAKER_02]: And so more of our companies are going to go out of business.

[SPEAKER_02]: And so if Americans want to buy goods, they're going to be forced to buy more imported goods and pay even more tariffs. [SPEAKER_02]: Because the tariffs rather than protecting American industry that doesn't exist, the tariffs are going to harm what's left of American industry that still exists. [SPEAKER_02]: So you've got the tariffs bad news, you've got the jobs news, all of this stuff is weak and is going to be weighing down the U.S. [SPEAKER_02]: economy.

[SPEAKER_02]: Now what's going to happen of course now is expectations have been raised for a rate cut now in September. [SPEAKER_02]: And in fact, Powell, I mean, not pal, Trump has already called for what amounts to immunity at the Fed, because he's got two of his guys who dissented. [SPEAKER_02]: And this is the first time that two people have dissented, and like, I don't know, like, forty years, I forget exactly, but it's very rare.

[SPEAKER_02]: I mean, it's rare to get one dissent, let alone two dissents. [SPEAKER_02]: But we got two dissents. [SPEAKER_02]: And so Trump, [SPEAKER_02]: It has been saying that the rest of the FOMC should mutiny, right? [SPEAKER_02]: Should they should all go against Powell because it's majority rules at the Fed. [SPEAKER_02]: So if enough FOMC members vote, [SPEAKER_02]: to cut rates, they can override, in fact, one of the other members just announced she was retiring early.

[SPEAKER_02]: So now there's a slot that Trump can fill with another crony, right? [SPEAKER_02]: So he can put another yes man or gal on the FOMC, who can [SPEAKER_02]: who could vote to cut rates. [SPEAKER_02]: So he's actively encouraging a mutiny. [SPEAKER_02]: So he went out and literally found right fired the head of the labor department because the labor department came out with bad numbers. [SPEAKER_02]: And he wants to stack the Fed with his cronies.

[SPEAKER_02]: And he wants mutiny and he wants in his demanding that Paul cut rates. [SPEAKER_02]: And of course, he's got to know. [SPEAKER_02]: that that pal is not going to cut raise. [SPEAKER_02]: And in fact, the more Trump, you know, calls for rate cuts and calls pal, you know, you know, more on or a fool or stupid, whatever he's saying, right, the more Trump does that, the harder he makes it, [SPEAKER_02]: from power to cut rates, because then it looks like he's caving in.

[SPEAKER_02]: Then it looks like, you know, he doesn't have the independence. [SPEAKER_02]: Now, the weak jobs numbers, now it pal comes back and says, oh, the economy wasn't as weak as we thought. [SPEAKER_02]: But that also undermines the Fed, because is the Fed really just putting everything on these government numbers. [SPEAKER_02]: I mean, why do we have all these economists that work at the Fed?

[SPEAKER_02]: if they just look at government numbers, if they just take government numbers, you know, as gospel, and they just build all their policy on these numbers. [SPEAKER_02]: I mean, I said that before I said, how could you base policy on numbers that you know are wrong, that you know are going to be revised? [SPEAKER_02]: So for Powell, [SPEAKER_02]: at last week to talk about how strong the economy is, how strong the labor market is.

[SPEAKER_02]: And then at the very next press conference say, hey, the labor market is not strong, it's weak. [SPEAKER_02]: So we got it wrong because we believe the government. [SPEAKER_02]: Well, don't you have your own people, right, that are, didn't you know the government got it wrong? [SPEAKER_02]: How could you, you know?

[SPEAKER_02]: So, but there is some excuse, but given the ground that Trump laid out or power rather, [SPEAKER_02]: a his criteria about inflation and making sure that these tariffs don't end up causing higher inflation which again they're not going to be the cause but they could certainly be the excuse that the Fed could use but I know that prices are going to be moving up [SPEAKER_02]: as more of the importers start to add on these tariffs.

[SPEAKER_02]: And again, because Trump is imposing tariffs on Americans, no matter where they're getting their goods. [SPEAKER_02]: So whatever we want to import, we're going to have to pay a tariff. [SPEAKER_02]: So no one country is really at a competitive disadvantage. [SPEAKER_02]: I mean, you could say maybe Switzerland because they're a thirty nine versus the EU is fifteen, right? [SPEAKER_02]: So that could be problematic for the Swiss.

[SPEAKER_02]: But look, it's a whole world out there that can buy Rolex watches. [SPEAKER_02]: I mean, it's not like Switzerland's not going to sell any Rolex watches in the United States. [SPEAKER_02]: They'll sell some. [SPEAKER_02]: But now they're going to have more Rolex watches to sell in other countries. [SPEAKER_02]: Now, maybe Rolex prices, new prices in order for Rolex to move that merchandise. [SPEAKER_02]: Maybe it will cut prices, you know, five percent in Asia.

[SPEAKER_02]: And so Asian consumers will get a break because Americans can no longer afford to buy new Rolexes. [SPEAKER_02]: They'll sell for less money in other countries. [SPEAKER_02]: So other people will get a break. [SPEAKER_02]: Those are the winners. [SPEAKER_02]: It's not Americans. [SPEAKER_02]: We don't win.

[SPEAKER_02]: In fact, when I hear these Republicans talking about these great trade deals that Trump has negotiated, and we've won, they say, and Europe accepted a fifteen percent tariff. [SPEAKER_02]: Japan accepted a fifteen percent tariff. [SPEAKER_02]: They accepted us taxing our people, fifteen percent. [SPEAKER_02]: They didn't accept paying fifteen percent. [SPEAKER_02]: We're the ones that are paying it. [SPEAKER_02]: We're making it seem like they agreed to pay these tariffs.

[SPEAKER_02]: They didn't agree to pay any of it. [SPEAKER_02]: They agreed to let us charge our own citizens [SPEAKER_02]: fifteen percent to buy their stuff right we are the losers in this deal right higher taxes are not a good thing now yes we have big deficits and so you can argue we need higher taxes but that's not what Trump is saying [SPEAKER_02]: He's just saying we're getting this money for free. [SPEAKER_02]: They're talking about rebates.

[SPEAKER_02]: This week, they were talking about sending out rebate checks to Americans, tariff rebates. [SPEAKER_02]: So we can share in the windfall. [SPEAKER_02]: I mean, talk about picking somebody's pocket. [SPEAKER_02]: So Trump is reaching in to the average Americans left pocket and taking three thousand dollars out of it.

[SPEAKER_02]: And now he wants to take fifteen hundred and put it in the right pocket so he could take credit for putting fifteen hundred in without being held responsible for taking three thousand out. [SPEAKER_02]: I mean, that's basically what's going on. [SPEAKER_02]: But of course Trump can't have his tariff cake and either two.

[SPEAKER_02]: He's claiming that the tariffs are going to offset [SPEAKER_02]: The deficits that are going up based on the big beautiful bill, he keeps saying, well, Congress is in counting all this tariff revenue. [SPEAKER_02]: Well, if he's going to rebate it back to the public, then how can he count it?

[SPEAKER_02]: He can't claim that he's going to use tariffs to reduce the deficits and then also say, well, he's going to rebate the tariffs back to the taxpayer because you can't do both, either you reduce the deficit or send out the rebate checks. [SPEAKER_02]: But, you know, he just wants to act like Americans are benefiting.

[SPEAKER_02]: Like he's going to share the wealth that he's created that he's tapping into because all the other presidents were too stupid to realize that all that had to do is tax foreigners. [SPEAKER_02]: And we get rich. [SPEAKER_02]: And the foreigners are laughing at us. [SPEAKER_02]: But because we have imposed these tariffs across the board, then it's not that big a deal to anyone country.

[SPEAKER_02]: because they don't have to worry about, you know, oh, you know, I'm gonna, you know, maybe Indonesia is worried. [SPEAKER_02]: Oh, you know, we can't sell our stuff because we got a tariff. [SPEAKER_02]: Well, Thailand's got the same tariff. [SPEAKER_02]: South Korea got the same tariff. [SPEAKER_02]: Taiwan's got the same tariff. [SPEAKER_02]: So all the businesses that compete with those [SPEAKER_02]: Or India, right? [SPEAKER_02]: All good business.

[SPEAKER_02]: They all have the same tariff to pass on. [SPEAKER_02]: So nobody is at a competitive disadvantage. [SPEAKER_02]: So there's no reason not to pass on the tariff. [SPEAKER_02]: And the American consumer has no choice but to pay it. [SPEAKER_02]: Because there is no US substitute. [SPEAKER_02]: The only choice is just not to buy anything and go without. [SPEAKER_02]: And that's going to be a choice that a lot of people are going to make.

[SPEAKER_02]: But businesses will have a choice, right? [SPEAKER_02]: American companies [SPEAKER_02]: knowing that their customers are broke, struggling to make their payments, record amount of credit card debt, knowing that their customers are broke, some of the tariffs may not be passed on to the customers. [SPEAKER_02]: They may be eaten by the businesses, but these are American businesses that are going to have to suffer.

[SPEAKER_02]: Their profits are going to be reduced by whatever portion of the tariffs they absorb. [SPEAKER_02]: And so what negative impact is that can have on the economy? [SPEAKER_02]: If companies have lower profits because they have to eat some of the tariffs because their customers can't afford to pay them, well, they have less money available to make capital investments to grow their companies to hire more workers.

[SPEAKER_02]: So the tariffs are going to have a negative impact [SPEAKER_02]: on the economy, especially on consumer part of it, because that's where they're focused. [SPEAKER_02]: We're making consumption more expensive. [SPEAKER_02]: These are taxes on consumption. [SPEAKER_02]: They're exercise taxes. [SPEAKER_02]: Now, I prefer these taxes to income taxes, but it's not like we're getting rid of the income taxes. [SPEAKER_02]: We're just adding the tariffs.

[SPEAKER_02]: I think the average effective tariff rate now is like, eighteen percent. [SPEAKER_02]: This has been the highest rate since the smooth holly days that preceded the Great Depression. [SPEAKER_02]: But of course back then, Americans didn't have so security taxes to pay. [SPEAKER_02]: We didn't have a payroll tax. [SPEAKER_02]: We had an income tax, but it was only for the very, very rich.

[SPEAKER_02]: Now you have middle class Americans paying the payroll tax, paying the income tax, and now they're paying these super high tariffs. [SPEAKER_02]: And that's still not enough because we still have these huge deficits. [SPEAKER_02]: which means Americans are gonna pay the payroll tax. [SPEAKER_02]: You know, could you imagine what if a governor of a state raised the sales tax way up and then talked about how rich the state was getting on sales tax revenue?

[SPEAKER_02]: Would anybody buy that? [SPEAKER_02]: Of course not because the public knows they pay the sales tax because the sales tax is written on the price. [SPEAKER_02]: You go and buy something and the sales tax is added on. [SPEAKER_02]: The tariff is not added on. [SPEAKER_02]: It's built in, but it doesn't mean you're not paying it. [SPEAKER_02]: Right? [SPEAKER_02]: Whenever they, whenever Trump talks about tariff, just talk about a sales tax, because that's basically what it is.

[SPEAKER_02]: It's the same type of tax, right? [SPEAKER_02]: If you read the Constitution, duties, imposed exercises, all their indirect taxes, right? [SPEAKER_02]: Tariffs fall in the same category as a sales tax, right? [SPEAKER_02]: So when the government puts a tax on liquor, federal government puts a tax on cigarettes, federal government puts a tax on anything, [SPEAKER_02]: Same as a tariff. [SPEAKER_02]: That's what it is.

[SPEAKER_02]: But the degree of economic ignorance in the administration all the way to the top, right? [SPEAKER_02]: Because everybody is singing the same tune when it comes to tariffs. [SPEAKER_02]: You know, and I still see some of these people defending Trump that I know are free traders, and I hear him on TV, and they try to say, well, you know, yes, I don't, I like, I believe in free trade, but I really like the way Trump is using tariffs as leverage to get these great deals.

[SPEAKER_02]: What great deals? [SPEAKER_02]: He hasn't gotten any great deals and he's not using the tariffs as leverage because the tariffs are still there. [SPEAKER_02]: We're imposing all these tariffs even with countries. [SPEAKER_02]: When countries agree to go to zero tariffs on American goods, right? [SPEAKER_02]: No tariffs at all, not that they had high tariffs before.

[SPEAKER_02]: Maybe they were three percent and they went down to zero because Trump was able to leverage them to go to zero. [SPEAKER_02]: Trump didn't say, okay, we'll have no tariffs. [SPEAKER_02]: on your goods coming into our country, Trump is at fifteen percent or twenty percent. [SPEAKER_02]: So the tariffs are not just leverage. [SPEAKER_02]: They are being imposed. [SPEAKER_02]: Trump likes the tariffs. [SPEAKER_02]: He wants the tariffs.

[SPEAKER_02]: He doesn't just want the threat of tariffs.

[SPEAKER_02]: He wants the reality of tariffs because he doesn't understand them. [SPEAKER_02]: And so we're going to get them. [SPEAKER_02]: So, you know, Thursday is going to be a big day or this week and I think the markets are going to continue to weaken. [SPEAKER_02]: the dollar should lose the ground that it gained. [SPEAKER_02]: And I think the markets are going to be disappointed if we don't get a rate cut in September.

[SPEAKER_02]: But I think we're going to keep getting bad economic data. [SPEAKER_02]: We're going to keep getting worse inflation data even though it's not as bad as it should be because the numbers [SPEAKER_02]: are wrong. [SPEAKER_02]: In fact, you know, don't just fire the gal who was responsible for the unemployment numbers. [SPEAKER_02]: How about the one that's responsible for the inflation numbers? [SPEAKER_02]: I mean, they've been getting those wrong for as long as I can remember.

[SPEAKER_02]: I mean, fire everybody who's doing that and the same thing with the GDP. [SPEAKER_02]: Anyway, this is going to be the last podcast that I'm doing from Connecticut for a while because I am going to be going back to Puerto Rico later in the week. [SPEAKER_02]: My kids are back in school. [SPEAKER_02]: I think it's August the eleventh. [SPEAKER_02]: So I'm going to be back. [SPEAKER_02]: I got a new set up in the studio. [SPEAKER_02]: We got new cameras.

[SPEAKER_02]: So I think we can have a better experience on these podcasts when I get back there. [SPEAKER_02]: So I'm looking forward to it. [SPEAKER_02]: And probably doing more frequent now that when I'm back in my work mode, you know, I do my work. [SPEAKER_02]: from Puerto Rico. [SPEAKER_02]: When I'm here in Connecticut, I'm on vacation. [SPEAKER_02]: I'm trying to spend more time with family, more time with my kids because they're not in school.

[SPEAKER_02]: And so the podcast kind of take a back burner. [SPEAKER_02]: But I'll put them back on the front of the stove when I'm back in work mode and the kids are in school when I'm in Puerto Rico. [SPEAKER_02]: And of course, I got my whole studio. [SPEAKER_02]: in Puerto Rico in Connecticut. [SPEAKER_02]: In fact, I used to have a studio here and we took it apart and added an extra bedroom in the house.

[SPEAKER_02]: So now I have another guest bedroom instead of a studio because I'm not here. [SPEAKER_02]: So I just do these podcasts in my study at the house rather than the studio that I used to use. [SPEAKER_02]: But I have that studio that I built specifically [SPEAKER_02]: Well, for the podcast, again, for, you know, from my wife and her music, you know, by the way, you should, you know, I think she's got another song coming out soon, but, you know, she's got a few songs.

[SPEAKER_02]: She could listen to her laughing cats on Spotify, but you know, she does some music work in the same studio where I do my podcast, but so I'll be back up there in work mode. [SPEAKER_02]: probably maybe a week from Sunday doing another podcast. [SPEAKER_02]: And I do think we could have a big week.

[SPEAKER_02]: You know, we get some follow-through from what happened on Friday, more downside in the stock market, anymore downside in crypto and a big up move in gold in the mining stocks, which I think are still really cheap. [SPEAKER_02]: I mean, they were up on Friday, but you know, not nearly as much as they should. [SPEAKER_02]: given the news that has come out that really cuts against the narrative of a strong U.S. [SPEAKER_02]: economy.

[SPEAKER_02]: We have a weak U.S. [SPEAKER_02]: economy. [SPEAKER_02]: We have Stagflation. [SPEAKER_02]: And that is the best possible environment for Golden Silver. [SPEAKER_02]: the worst environment for the dollar and so those two should combine for a fabulous environment for the mining stocks. [SPEAKER_02]: Anyway, don't forget if you liked the podcast, give it a thumbs up, give it a like, comment on it. [SPEAKER_02]: I still can't crack even five hundred and ninety five thousand.

[SPEAKER_02]: uh... youtube subscribers i mean i'm right i've been right below five hundred forty nine thousand five hundred ninety four thousand five hundred for months it's i don't know what it is but if you're if you're not a subscriber to my youtube channel

[SPEAKER_02]: make sure and subscribe and if you're listening to the podcast any place else if you're not listening on youtube just go to my youtube channel and subscribe and i'm getting very close i'm less than ten thousand followers are way from one point two million [SPEAKER_02]: on X. So, in fact, I did a spaces the other day on Friday for four hours. [SPEAKER_02]: I was taking questions on spaces.

[SPEAKER_02]: So, you know, if you're missing the spaces that's probably because you're not following me on X, so make sure and do that. [SPEAKER_02]: Bye for now.