transcript

Speaker 1:
[00:01] You make no friends in the pits, and you take no prisoners. One minute, you're up half a million in soybeans, and the next, boom, your kids don't go to college, and they've repossessed your bent here. You with me?

Speaker 2:
[00:09] The revolution starts now.

Speaker 3:
[00:13] We have to pass the bill, so that you can find out what is in it.

Speaker 2:
[00:17] Turn those machines back on. You are about to enter The Peter Schiff Show.

Speaker 1:
[00:24] If we lose freedom here, there's no place to escape to.

Speaker 2:
[00:27] This is the last stand on Earth. The Peter Schiff Show is on.

Speaker 3:
[00:30] I don't know when they decided that they wanted to make a virtue out of selfishness.

Speaker 1:
[00:34] Your money, your stories, your freedom.

Speaker 2:
[00:37] The Peter Schiff Show. This is Peter Schiff here at The Peter Schiff Show Podcast. It is another live episode about 9.30 in the evening here in Puerto Rico. Today's podcast, I'm gonna talk almost exclusively, but probably not exclusively, about the Federal Reserve. And the reason for that is I watched for a couple hours earlier today the Senate testimony of Kevin Warsh, who is Donald Trump's nominee to become the next Fed chair. And obviously, there's a lot of attention being placed on this nomination because a lot of people believe that Trump is putting a yes man, a puppet into the Fed who is going to operate basically with Trump pulling the strings because we saw how critical Trump was of the current chair, Powell, and still is, and how he trying to fire Lisa Cook. He's trying to stack the Fed because he believes he's smarter than the other members of the FOMC and the chairman, that he knows better where interest rates should be. He wants interest rates much lower, and so he wants a Federal Reserve that shares his outlook and wants to lower rates. So I think there's probably more attention being focused on this particular nomination and confirmation than probably of any Fed share in recent memory. But before I get into that, I wanted to take an opportunity to introduce you again to one of the newest sponsors that I have here on The Peter Schiff Show Podcast. And that is investing.com. And they just recently became a sponsor. I think this is the second time I'm mentioning them on the program. And I've been using Investing.pro, the free version on my own. I really didn't even know they had a premium version. I was using the free version. And in fact, it's up on my screen right now. You can check it out. These are live futures quotes. And whenever I do this podcast, I would have investing.com on my screen so I can see what's going on. And here you can see S&P futures are up about a half a percent. You got the Dow futures up top, up almost as much. The NASDAQ 100 futures, they're up almost 70 basis points. And the S&P small cap Russell 2000, that's up 80 basis points. So you can see all that. You can also get information on a lot of major foreign markets. So that's mainly what I was using it for. But now they have something called InvestingPRO. And so I've opened up an account there. This is their premium service, but they have a lot of very valuable information that's available here. Like I set up a watch list. You can set up multiple watch lists. Like I got one for inflation. I got even one for crypto. But this one is a portfolio. It's kind of my portfolio. So it has a lot of stocks that I own myself. And a lot of these stocks, of course, are owned by our clients in our managed accounts, in our mutual funds. Here, for example, here, Tencent Holdings, number 700 in Hong Kong. It gives you the price here, how much it's up. Hong Kong is trading right now. It's live, right? The market's open. So you're getting live quotes. But if you click on the stock, you get a lot of information about Tencent. I mean, tremendous amount. And you can get news on the company, get information on the dividends, the history, what it pays. You can get earnings information and not just recent earnings, but you get all the forecasts here. You can get forecasts going all the way out to 2035. This information that you get, look at all the financials. A lot of people, industry professionals, pay a lot of money for this stuff. I mean, my portfolio managers, we subscribe to Bloomberg too. It cost a fortune to get this data. But you can really get this data, a lot of it, very inexpensively from this service. So if you're a managed account customer of mine and you're curious about the stocks in your portfolio because you don't know much about them and we picked them, you can enter them into this program here and you can get all kinds of information about the stocks that you own. Because normally, we don't tell you anything. We just buy them for you and you trust us. But if you want to double check what we're doing, you can get all this information. But probably more important, if you're a do-it-yourselfer, if you're not a managed account of mine, you're just doing it on your own. This is very valuable information to help you pick stocks, to try find stocks that are good values, low PEs, high dividends, a lot of earnings growth, good balance sheet, all the information that you need on these. I don't know why, this is the problem with doing this stuff live. I don't know why I'm not getting these charts. But see how I'm zooming in? I mean, you can get these charts, you can get them for all different time frames, you can mark them up, you can do all kinds of technical analysis on there. This is probably not the fault of InvestingPRO. This is, oh, here we go. So here's a chart. But look, see how I blow it up, right? You can make the chart big and you can change the time frames. There's a lot of stuff you could do with these charts. I don't have a lot of time. I want to get back to the podcast, but you should give it a shot. Sign up for this. Use the link, the link in the description of this video. There's also a QR code for investing.com pro. You want to, you want to get the premium version because there's a hell of a lot of value for not a lot of money. Anyway, let me get right into the, into the podcast. So before I start talking about my reaction to, to Warsh and his testimony, I want to give everybody a little background on the Fed. Now I know I've spoken about this in the past, but you know, I get it. You know, the audience grows. Not everybody was listed in a couple of years ago when I might have, you know, explained it. And so I'm going to do it again. So it may be repetitive just in case you heard the explanation before, but a lot of people don't know anything about the origin of the Fed. I mean, maybe they think we always had a Federal Reserve, which we did not. The Federal Reserve Act was passed in 1913. So prior to 1913, there was no Federal Reserve. Now it wasn't that there were no central banks. There actually were. The Federal Reserve is not even the first central bank we had. It's the third. And it should have been three strikes you're out, because this is the worst of the three. And it's also been around the longest, which is the biggest problem. This central bank has been around for more than 100 years. The first two only lasted about 20 years each. Unfortunately, the Fed has been around for more than five times as long. That's the problem. But the first central bank we had, I think, started around 1791-ish, something like that. I don't know, I think. And it lasted about 20 years. That's it. Then they charted another one, the second bank. A lot more people are familiar with that one. That one lasted about 20 years. But that one was ended by Andrew Jackson. And that was the best thing that he did as president, was kill the second central bank of the United States. Then, it was about 80 years between the second central bank and the Fed, the third central bank. And those were probably the best 80 years we had as a country. I mean, not counting the Civil War, right? So the Civil War was probably the worst four or five years we've had, right? We were having a war with each other, right? But after the Civil War ended, 1865, we didn't have a Fed. And we didn't have a Fed until 1913, just before the First World War. But for all those years, the country had no central bank at all. And that's when we had the greatest economy. Even Donald Trump talks about how great our economy was in the 1880s, 1890s, 1900. One of the reasons it was great was because we didn't have a central bank. We had sound money, we were on the gold standard, and we had the Industrial Revolution, we had this huge economic boom, the Gilded Age, all this great stuff. All the immigrants that were pouring into the country, they came in when there was no central bank. We would be better off without a central bank. Now, why after 80 years of economic success, did they resurrect the central bank for the third time? Because the reasons that they gave have nothing to do with the Federal Reserve we got now. In fact, had somebody proposed back in 1913, the current Federal Reserve, it never would have been enacted. Nobody would have been dumb enough to buy it. So what was the goal of the Federal Reserve? Well, there was, I think there were two or three main objectives. But one was to provide a superior bank currency. Because number one, the Federal Reserve was independent. It wasn't part of the government. It wasn't just independent. Like today, I'm just jumping ahead of myself. But Warsh said that, yes, the Fed is independent from government, but it's not independent of government or something like that, that it was part of the government. It's not supposed to be part of the government. That was the design. And what are the ways you know this? If you get a letter from the Federal Reserve, it's got a stamp on it. If you get a letter from any government agency, there are no stamps because they get it franked through the post office. See if the government sends mail, they don't have to buy a stamp because they own the post office. So they just send it. But the Federal Reserve has to actually buy stamps from the government. Why? Because it's not part of the government. It's a private banking syndicate. And the reason it's private is because there's no constitutional authorization for it to be part of the government. Because if you read the Constitution, you have to understand it. If you read it, the US government is not authorized to print money, right? Issue bills of credit. That's paper money. The states are denied the power to do it. And the federal government is not authorized to do it. All the federal government is authorized to do is coin money. That's not the same as admit bills of credit. The states, the Constitution, Article 1, Section 10 says no states shall coin money or admit bills of credit. And the only thing Article 1, Section 8 lets the federal government do is coin money. They're not given the authority to admit bills of credit. And again, if you understand the Constitution, you read the 10th Amendment, the powers are denied to the states and given to the federal government. So the states can do anything that they're not prohibited from doing. And the federal government can only do those things that it is specifically authorized to do. And so the federal government is not authorized to coin money, so it's not authorized to print money, so it can't do it. It can take money and put it into a coin. Well, what's money? Well, the only thing that can be money is gold and silver, because the Constitution says that no state shall make anything but gold and silver legal tender for payment of debt. And the federal government is not given the authority to make anything legal tender, so it doesn't have it. So it's set up an independent bank to do things that the US government cannot do on its own. So number one, that's why the Federal Reserve is independent. But one of the main goals was to create a superior bank note to the private bank notes that were already in circulation at the time. You see, even though we were on a gold standard, banks, private banks all over the country issued note currency backed by gold. But the problem was, what if I had a note from a bank in Boston and I went out to California and I tried to spend it? How does somebody in California know it's real? He might not know what banks are in Boston. Maybe it's counterfeit. There was a lot of questions. It was hard, you know, if you took the note far away from where it was issued because we didn't have these big banks that had branches all over the country and you didn't even have a telephone. You couldn't validate. We guess they had the telegraph at that time, but it wasn't as easy to validate if a check was any good. Or a note, not even a check, a bank note, an IOU from a bank. Some of them had dubious quality. You didn't know how much gold actually backed it up. Who the hell knew? So, the idea was to create a Federal Reserve note, a private bank, and the Federal Reserve note would re-discount the notes of other banks. So what would happen is if you had a note from a bank in Boston, instead of taking that note out to California, you would take that note to the Federal Reserve. You would give it to them, and they would substitute their own note. They'd give you a Federal Reserve note. They would take that note and give you a Federal Reserve note. Now, what the Federal Reserve was required to have backing its note was that note plus 40% gold. So the Federal Reserve had to back each one of its notes with the note of another bank plus have 40% gold backing it up. Now, you take that note, that Federal Reserve note to California, and now the California bank, I'm not the bank, whoever you give it to, oh yeah, that's the Federal Reserve note. That's the bank of the United States. That's our central bank. I recognize that. I'll take that note. And it was supposed to be of higher quality than other notes that didn't have 40% gold backing. Maybe they had 30% or 20%. But of course, the IOU was 100% redeemable in gold. You could always get gold. So if you had a note for $100, you could get five ounces of gold because gold was $20 an ounce. So we were always on the gold standard. All the Federal Reserve notes were redeemable in lawful money, gold. But in order to issue the Federal Reserve note, they had to be 100% back by another form of commercial paper, a note from another bank, and 40% gold. High quality notes. What is the Federal Reserve note back by now? Nothing. It's got lower quality than any of the notes that were in circulation prior to 1913. So instead of a superior note, it's a lousy note. Now, NVIDIA's Jensen Huang believes AI might already be closing in on artificial general intelligence and his reasoning is simple. AI systems have just become that versatile. He also sees a future where powerful AI does the heavy lifting behind the scenes, letting developers build tiny cheap apps that billions of people can use, making advanced technology accessible to literally everyone. Let me introduce you to Outskill. It's an AI-focused education platform designed to help you actually apply AI in your work, and it's already impacted over 10 million people across 100 plus countries. 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I don't think university professors know this. The only reason I know it is because my father told me. Otherwise, I probably wouldn't know it either. So now you guys know it because I'm telling you, right? Because this history is completely lost because they probably don't want to know it. I don't want anybody to know why we have a Fed, right? They just want people to know this is how it's supposed to be. Superior to the note currencies that were in the Federal Reserve. And again, this was a private bank, but it was a nationally chartered bank that would be more recognizable. And what if there was some fake bank that came up and just shut up shop and you had a note? How would you know, right, back then? So, you know, it wasn't a bad idea, in theory, right? It wasn't a bad idea. The problem is, in practice, it's the camel's nose under the tent. That is the problem. The government will abuse every power it gets. Even though it wasn't the government, the government had chartered the central bank. The minute you had one, it was ripe for abuse. And that's exactly what happened. Anyway, so the other reason that they wanted to have a central bank was to provide for an elastic money supply, elastic money supply. Now, what does that mean? Well, elastic, you know, it's like a rubber band, right? You could stretch it and then, you know, contract it, right? Expands and contracts, elastic money supply. The idea behind the concept of an elastic money supply was a money supply that expanded and contracted with the business cycle. So, when the economy was growing and there was more need for credit, the Fed could, you know, inject more credit into the economy as it was expanding. And then, if the economy turned down and was contracting, the Fed would withdraw that credit and shrink the money supply, so that over time, the money supply would stay stable. But, during those periods of time where there was a lot of growth and there was a need for more credit, the Fed could provide it and then withdraw it as things slowed down. So, over time, the supply of the Federal Reserve notes would be relatively constant. What do we do today? Do we have an elastic money supply that expands and contracts? No. It only expands. That's all it does. It never contracts. You've had some brief periods of contraction, but you can barely see them if you look at a chart. It's almost always expanding. But when does the Fed expand the money supply the most? When the economy is weak, when the economy is contracting in recession, they expand the money supply to stimulate the economy. That is the opposite of what the Fed was created to do. It was created to shrink the money supply during a recession. Now of course, everybody on the Fed, including what they discussed today, will say that what the Fed is supposed to do when there's a weak economy, a recession, is stimulate by cutting rates, doing quantitative easing, expanding the money supply. So the Federal Reserve today is doing the exact opposite of what it was created to do. Which is why I'm saying that had they proposed this hair brain scheme in 1913, they never would have enacted it. So based on the original purpose of the Federal Reserve, I might have even been for it. You know, if it had stayed within those constraints, the problem is it didn't. In fact, one of the big constraints on the Fed was that the Federal Reserve was not allowed to own any obligations of the United States government. They weren't allowed to. The Fed could not own treasuries. That was in the original act. So you might say, well, then why do they own this huge balance sheet now of US. Treasuries if the original Federal Reserve Act prohibited the Fed from owning treasuries? But that also proves that the Federal Reserve was not created to help finance government debt. In fact, the creators of the Fed specifically did not want the Fed to be used to fund government debt, which is why the prohibition was in there in the first place. Now, as I said, camel's nose under the tent, right? This is why never give the government an inch because it will take a mile, right? By 1917, just a few years later, the US gets into World War I, which was the worst mistake we've ever made as far as wars, as far as I'm concerned. And I don't want to make this podcast about World War I. But had Woodrow Wilson not decided to make the world safe for democracy, which, by the way, was the first time any president referred to us as a democracy, because before that, all they talked about was Republic and Republican government. But Woodrow Wilson all of a sudden said, the world need to be safe for democracy. We got in to World War I, a war that we never should have gotten involved in. And had we not gotten involved, the British would not have won that war. Now the Germans wouldn't have won it either. It would have ended. It would have been like a stalemate. And the war would have ended. The Kaiser would have stayed in power. There would have been no Treaty of Versailles. There would have been no war reparations. There wouldn't have been a hyperinflation in Germany. There wouldn't have been all this resentment. There wouldn't have been the rise of the Nazi Party. There wouldn't have been Adolf Hitler. There wouldn't have been a Holocaust. There wouldn't have been World War II. None of this would have happened had we stayed out of World War I. Now obviously the people that decided to get us involved in World War I had no way of knowing that the consequence would be the Holocaust and World War II and Nazi Germany. Of course, they didn't know that. But that's another reason why you mind your own business and stay out of these foreign wars. That's another reason why we should not be involved in Iran because you have no idea what's going to happen as a result. You don't know where all these chips are going to land, right? How the dots are going to get connected. They didn't know that World War I would cause World War II, right? But anyway, that's a podcast in and of itself. And that's probably another thing they don't teach you in history, right? That we're kind of responsible for that. But getting back to the Fed, so we're in World War I. How do governments pay for wars? They borrow money. Now they just print money. Now, the war starts and the government is like, hey, we got this central bank. Let's borrow some money from the central bank. Oh, we can't. It's illegal. So they went back. They went back and they amended the Federal Reserve Act to allow the Federal Reserve to own, not to buy direct from the government. They didn't go that far. But they said the Federal Reserve can buy and hold on its balance sheet government debt, as long as it gets it from the third party. Can't buy it directly from the government. They didn't want to make it that obvious. But they can do open market operations. They can go into the market and they can buy treasuries. That was it. That opened the door. And then there was the floodgate. And that also, that's why Wall Street makes a fortune now. You might think, why doesn't the Federal Reserve just buy the bonds directly from the government? Why do they have to buy them from Goldman Sachs or Morgan Stanley and cut them in for a commission? Because that's the only way legally that they can buy them. They can't go directly to the government. But had the Federal Reserve Act never been amended, they could buy them at all. And that's how it should have stayed. But unfortunately, they changed it. And now you see the result. Quantitative eating, easing this massive balance sheet. Now coincidentally, at about the same time, they allowed the Federal Reserve to buy US government debt, that's when they passed the debt ceiling. Because they were thinking, hey, wait a minute. Now that we've allowed the Fed to buy US government bonds, maybe we should put some limit on how much bonds the US government could sell. That's where the concept of the debt ceiling came in. The mistake of the debt ceiling was that it was movable, because every time we got to the debt ceiling, they raised it. So it wasn't a real ceiling at all. It was just a farce. But it shows you at least they were worried. But if they were worried, why did they allow them to do it anyway? Well, they allowed it because we were at war. Some of the stupidest things that we do happen during war, which is another reason to avoid the war. The withholding tax. The reason people have taxes taken out of their pay is because of World War II. That's when it was enacted, a victory tax. The only reason we even have an income tax is because of the Civil War, because that's where they enacted it. They killed it, but then they resurrected it. And that's where the concept of global taxation. Nobody knows this. The only place you're going to know this is for The Peter Schiff Show. And I don't have a lot of time. But the reason America taxes your worldwide income, no matter where you live, the reason if you're an American and you go to a place like Panama and you earn money in a nation that has no tax, the reason you have to pay the tax anyway is because when they passed the first income tax during the Civil War, they also passed the draft and people were dodging the draft by going to Canada. And so when we passed the income tax, they wanted to catch the draft dodgers. They didn't want the draft dodgers also dodging the income tax. So they made that first income tax during the Civil War, apply to Americans no matter where they were. So if you dodge the draft, okay, but you're not dodging the income tax. When they resurrected the income tax in 1913, they used that same thing. That's where they got it. And the first paper money happened during the Civil War. Of course, it was temporary just to finance the war, but then it came back. But anyway, I can't, that's too much of a digression, and I'm already half hour into this podcast, and I haven't even gotten to Walsh. But anyway, now you have some background on the Fed, because none of this stuff came up today in the Warsh hearings. And the first thing that they said, look, first you have the chairman, the Republican chairman, the Democratic chairwoman, they make their speech. And of course, the Republicans use the Warsh confirmation to blame all the inflation on Biden, which is very disingenuous. Biden inherited a lot of that inflation from Trump. And Trump is creating plenty of inflation right now. In fact, at one point during the two, two and a half hours, probably the best thing that Warsh said is he acknowledged that inflation is not caused by economic growth. He said inflation is caused by government spending too much money and central banks printing too much money. That's right, 100% right. At least he knows that. But once you understand that, how can you claim that Trump is not responsible for any inflation? We had a massive increase in government spending under Trump. And a massive increase in money supply under Trump. Trump's responsible for a lot of inflation. And Trump right now is already growing government spending more than Biden did. And so if the Republicans are going to blame inflation on the deficit spending of Biden, how could they ignore the fact that Trump is spending even more and is going to run even bigger deficits than Biden did? It's not like Democratic spending causes inflation, but Republican spending doesn't. It's the same thing. And money supply is already growing. So that, I mean, that pisses me off, right, when I hear that. Then, of course, Elizabeth Warren immediately just lays in to Warsh. Now, some of what she says, you know, she has a point, but a lot of it is sheer hypocrisy. Because one of the things that she was upset at Warsh for doing was not cutting rates or not advocating for rate cuts around the time of the 2008 financial crisis by being too hawkish. But now, she's worried he's going to be too much of a dove. In fact, all of these Democrats who are worried that Warsh is going to just cut interest rates, that's what they always want. They want rate cuts no matter what. Now, they're saying, oh, you're not going to be tough enough on inflation. Well, since when do the Democrats give a shit about being tough on inflation? They have always said, this is all BS. This is inflation fighting is all about protecting Wall Street. We need rate cuts, consumers need lower interest rates. We need lower mortgage rates. The Democrats have always been in favor of cutting interest rates. All of a sudden now they're worried that Wall Street is going to cut rates. That's what they want. But now they're only saying this because they know that Trump wants rates to be cut, which of course is true. And they're trying to accuse him of just being a puppet. She was calling him a sock puppet of Trump. But of course, he denied Viennese Millie whenever the Republicans asked him, no, I'm not going to do what Trump asks. We don't have any quid pro quo. There's no deal. Trump has never even asked me to cut rates. And even if he asked me, I'm not going to follow him. I'm going to do what I believe is right, regardless of what the president says. Now, of course, I mean, would Trump really be nominating a guy who has a history of being a hawk when a lot of other Fed chairs were doves, when Trump's primary criticism of Powell is that he's not being dovish enough? So why appoint somebody who has a history of being a hawk when your problem with Powell is he's too dovish? So it doesn't really pass the smell test that Trump has no idea what this guy is going to do. And he's just taking a chance. And maybe he's going to be a bigger hawk than Powell. And he says Powell's a low IQ, idiot, moron, whatever, doesn't know what he's doing. He should be slashing interest rates. Now, of course, when Warsh, when he started to talk, he immediately talks about how he loves the Fed. You know, it's this great institution and, you know, he really, you know, he's really excited and he's a public servant. And of course, you know, the guy is super rich. And not only is he rich, his wife is even richer. He married. He married into into a lot of money. So he's very wealthy. Again, not that I'm against wealthy guys or wealthy women, for that matter. But he could afford public service, right? Because he obviously doesn't doesn't need any money. The Estee Lauder family, right? That's his wife's from that fashion icon, dynasty, whatever. But anyway, so, but he's talking about how much he loves this great institution. And so that's where he lost me right away. Because it's a lousy institution. It's got a horrible track record. You know, I want a guy that hates the institution and wants to try to rein it in, got a guy that thinks it's the greatest thing going. And he's like so excited, you know, at least Alan Greenspan, he was, you know, he was very critical of the Fed before he got appointed. And that was a good thing. Hey, a guy that doesn't like the Fed, maybe, maybe, you know, maybe that's good to have a Fed basher running the Fed, right? But if the guy's talking about how much it's, you know, how great this institution is and how he loves everybody associated with it, you know, I mean, he loses my support right there because I mean, as far as I'm concerned, it's one of the worst things we got. He talks about the dual mandate, which of course is bullshit. But he talked about price stability. And he said that he has his own definition of price stability. Because the way the Fed defines it, or most people on the Fed, they define price stability as prices that go up by about 2% a year. And of course, for the last five years, they've been going up a lot more than that. But their definition of stable prices is prices that go up every year by about 2%, if not more. So Warsh's definition of price stability is prices that go up, but they don't go up by enough to get anybody to talk about it. So it's not a problem. It's like we can live with it. So his definition of price stability is prices that don't rise by so much that it becomes a big problem. But what's lost in all this redefining of the word price stability is the root. Stable, right? Price stability has to do with stable prices. Stable is the word. What does stable mean? Like steady, unchanged, remains the same. That's stable. If something goes up every year, you don't have stability. Prices are not stable if they always go up. You just have rising prices. So if the goal of the Fed was stable prices, it meant that prices stayed the same over time. They reinvented stability to mean prices go up every single year. But that's not the mandate. The mandate is not for rising prices, just rising slowly. The mandate is for prices to be stable. They redefined it. Now, of course, stable prices are not the holy grail of economics. What if prices are supposed to go down? Let them go down. Falling prices are better than stable prices. Everybody wants lower prices. I can buy more stuff if prices are lower. Businesses, they strive to lower their prices so they can sell more stuff. That's why they have sales. When you have a sale, they don't raise the price. Hey, hurry up and buy. I just jacked up the price. No, the way you get people to hurry up and buy, hey, I cut the price. Oh, great. Let me buy some. Everybody benefits from falling prices. Again, I've talked about this a lot, so I'm not going to keep talking about it now, but it's all bullshit. But again, he still buys into the idea that price stability means that prices aren't stable at all. It means that they just keep going up. There's that. Look, most people treat their health the same way bad investors treat the market. They react, they guess, they follow generic advice from someone who doesn't know their situation, and then they wonder why nothing's working. Here's the thing about supplements, diet, all of it. 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Go to quince.com/gold for free shipping and 365 day returns. Now available in Canada too. Go to quince.com/gold for free shipping and 365 day returns. That's quince.com/gold. Now, they kept the Democrats kept trying to get Warsh to prove that he was independent of Trump by getting him to criticize something and he refused. They said to him, did Trump lose the 2020 election? He wouldn't answer the question. He was like, well, you certified it. He wouldn't answer the question because obviously he doesn't want to say yes and piss off Donald Trump. So again, that's evidence that he's not going to be independent. He can't even admit that Trump lost the 2020 election. And if he believes he lost it, then why not say it? You know, because he doesn't want to say that. They talked about how we have a great booming economy, the greatest economy ever. And he was asked, is that true? Do you believe that? Again, he just sidestepped it. Wouldn't answer that question because he doesn't want to say, well, obviously, no, that's not true. Because first of all, Trump is saying we have the greatest economy ever. It's booming. We have inflation that's way above 2%. If we have a great economy and high inflation, we should be hiking rates, not cutting them. Like nobody asked him to explain that dichotomy. What do you think about Trump claiming we have the greatest and strongest economy in the history of the world, yet wanting 1% interest rates at the same time? So he wouldn't get that. Somebody asked him a question. Name one Trump policy that you disagree with or that you think. And again, he refused to say so he doesn't want to, you know, obviously he must have thought about Trump's economic policies. Maybe there's a policy he does like he's afraid to say it. Now again, maybe that's smart, right? He doesn't want to fall into the trap. But again, it makes it look like he's afraid to criticize Trump because he can't support everything that Trump is doing, right? There must be something that he disagreed. Oh, then he thought of something. He said, oh, he said that I look like I came out of Central Casting. And he says, I don't think I, I mean, like, you know, come on, right? Like that you, that's nothing, right? He picked something that can't be controversial. What else did they ask him? I just remembered what it was. And now it was price stability. No, no, no. Anyway, I'll think of it. Oh, yeah. So somebody asked him, Donald Trump wants interest rates to go to 1%. If we did that, if we follow Trump's advice, what impact do you think that would have on consumer prices? He refused to answer the question. It's obvious the impact. He already stated it. How would the Federal Reserve go about bringing interest rates down to 1%? There's only one way to do it, right? They would have to buy up a lot of short-term debt and move the yield curve. They would have to do quantitative easing. They would have to expand the balance sheet. They would have to print an audit of money. That'd be the only way they could do it. Well, by his own definition, that's inflation. That's going to cause prices to go up. Yet, he refused to answer the question. He can't even, he's like, well, I don't know. I mean, you can't ask me a hypothetical, of course, of course. So again, he doesn't want to criticize anything that Donald Trump says. Even if he says something is dumb, as we should have interest rates at 1% right now, and you're asking the guy who's going to chair the Federal Reserve, if that's a good idea, and he won't say no, he just like, he won't even talk about it. They asked them again about oil prices going up, or about insurance costs going up, or a number of things that were going up. And he's, you know, are these things inflationary? And he didn't acknowledge it. But I mean, they're not really inflationary. He didn't do a good job of explaining that some prices can go up and other prices can go down. And we're talking about the general level of prices, not the specific level of any individual price. Because in there, he's right. When they're saying, you know, when they're talking about food inflation, or they're talking about, you know, one senator talked about how homeowners insurance is up a lot and that's inflationary. It's not. I mean, it is a consequence of inflation, perhaps. But all else being equal, if I'm spending more on my insurance, I have to spend less on something else. But he was not able to articulate that. I mean, maybe he knows that and maybe he didn't even want to try. They did talk about inflation as a tax, and he agreed that inflation was a tax. And they talked about it to the extent that it related to Biden and the Biden inflation tax. Well, what about the Trump inflation tax? The reason inflation is a tax is because it's how deficit spending is financed. Well, how is Trump financing his deficit spending? With the same tax. In fact, when Trump's Secretary of the Treasury was asked, how are you going to pay for this war? Are you going to raise taxes? The guy laughed and said it was a stupid question. Why? Because we're going to finance it by creating inflation. We're going to use the inflation tax. That's how we're going to pay for this war. So I hate it. They acknowledge inflation is a tax and somehow only Biden is the one that levied it when Trump has been levying the same tax. Now they did talk about the dollar. He got a question about the dollar and he did say, look, once I'm Fed Chair, if you ask me about the dollar, I'm not going to talk about it. I'm going to defer to the Secretary of the Treasury. I'm just going to talk about interest rates, which again is bullshit because he's in charge of monetary policy and the last I check, the dollar is our money. I mean think about how ridiculous it is that the guy who's in charge of our monetary policy can't talk about our money. And the idea, if he believes in price stability, what is price stability? It has to do with the purchasing power of our money that he says he can't talk about. So again, the idea that a Fed chairman can't talk about our money. By the way, our money is not really the dollar, it is the Federal Reserve note. If you take our money, take a one dollar bill, a hundred dollar bill, and look at it, what does it say? Federal Reserve note. That's what's written on the dollar. In fact, it's not actually a dollar, it's a Federal Reserve note. We write the word dollar on the note. But the bill itself doesn't say this dollar, it says this Federal Reserve note. That's what it is. So imagine you're the chairman of the Federal Reserve and somebody asks you a question about Federal Reserve notes, and you say, I'm not allowed to talk about Federal Reserve notes. Well, they're your notes, they're your liabilities, how could you not talk about your own notes? Nobody, other than me, bothers, bothers to question the idiocy of that statement. The Federal Reserve, the chairman of the Federal Reserve can't talk about Federal Reserve notes. He can't talk about the value of Federal Reserve notes, he can't talk about the purchasing power of Federal Reserve notes. Somehow he's handcuffed, you know, and the only one that can talk about it is the Secretary of Treasury. Where the hell is that written? You think it says in the Federal Reserve Act that if you ask the chairman of the Federal Reserve about Federal Reserve notes, he can't talk about them? He has to keep his mouth shut and say, no, no, no, we can't discuss our notes. Nope, nope, go talk to the Secretary of Treasury, ask him about our notes. Don't ask me. It is complete ridiculous. But this is what happened because they don't want to talk about it, because they want the Secretary of Treasury who can't do anything, right, to just say, we believe in a strong dollar. We have a strong dollar policy. Well, without the Fed, you have no strong dollar. Only that. It's so ridiculous. But he did say that a strong dollar was good for the Fed. It's good for the country because it helps us achieve our mandate. Yeah, you know, if the dollar is being destroyed, if the dollar is being debased, it makes it impossible for them to achieve their mandate. But there was one guy that asked them, you know, if he's concerned about that. Senator Loomis, of course, who's shilling for the crypto industry, the one group that he was willing to pander to was crypto because where he did give a straight answer was when he said that under no circumstances, under my watch, will we ever have a central bank digital currency, which is exactly what the crypto industry wants because they don't want to compete with a national crypto. They want to have their own crypto and they want to keep the government out of it. And so Warsh was willing to commit on that, right? It's like the only policies he would commit to. So I guess they still have some influence to crypto people, even though the air is coming out of their bubble. I was thinking about talking on today's podcast about what's going on with stretch and MicroStrategy. Michael Saylor just bought two and a half billion more in Bitcoin last week. He's single handedly propping up the entire market by running this Ponzi scheme called stretch, which is, you know, it's a Ponzi within a Ponzi or within a pyramid. I mean, it's amazing that the SEC is letting this guy get away with this Ponzi. But I'm looking at this podcast and it's, you know, I'm 50 minutes into it. So I don't really have enough time to get into this Ponzi. I'll save it for another episode. But this is absolutely ridiculous. The fact that you don't have more people, it's a complete Ponzi financial structure because strategy doesn't make any money. Yet it's paying 11.5% coupon on this preferred. Where does it get the money to pay the coupon? By selling more. It doesn't earn the money to pay the yield. It has to sucker in new investors to pay the yield to old investors. The only source of money that Saylor has to pay the old investors is it becomes new investors to give it to them by buying more shares. Now of course, there is another source. They can start liquidating the Bitcoin, but that would blow the whole thing up. But this thing is one giant Ponzi. It is a complete fraud. The administration sticks back and allows this security fraud. But I tell you what, when they eventually do pull the plug, because legally, Saylor can stop paying the preferred whenever he wants. I mean, that's in the fine print, right? They focus on, oh, this is just like a bank account, only better. This is 11.5% risk-free yield, but okay, but the risk is you can lose it all. But at some point, when they run out of suckers and the Ponzi scheme collapses, most Ponzi schemes, that's when you're in a lot of trouble, right? When you run out of suckers, like, you know, like Bernie Madoff did, right? It gets exposed or, you know, Mischinsky. But this Ponzi scheme, when MicroStrategy runs out of new suckers, all it does is tell the old investors, that's it, we're not paying you anymore, because they don't have strategy doesn't have to pay you anything. It just going to keep up the payments to keep up the Ponzi scheme. But once the new money stops coming in, all he has to do is tell the old money, well, you're SOL, you're the bag holders, and the whole thing goes to zero. The problem is, we got a lot of lawyers in America. And I guarantee you, everybody who's left holding the bag on strategy is going to sue and they're going to win. So of all the liabilities that strategy has when this thing blows up and they have all this paper coming due, the convertibles and the cash, they're also going to have to deal with all the lawsuits from the people who bought in at the end of the Ponzi and lost all their money when the dividends got canceled. But anyway, maybe I did talk a little bit about it. I love the debate. Anybody wants to debate me that stretches a Ponzi? I'm ready to go. If anybody from the crypto industry, I know Saylor himself will never do it. So anyway, a couple more things I want to mention from the hearing. So Warsh was also asked if he agreed with Trump, or disagreed, about what's happening with Powell and the lawsuit over the cost of the Fed building. No comment, doesn't want to comment. Says he's not a lawyer. Hey, I didn't take a course in law. I mean, come on. I mean, he said the same thing, you know, he said, you know, about Fed independence, about Lisa Cook. He was asked to comment about Lisa Cook. And you know, do you think it's, does the president have the authority to fire her? And if he can, what will that do about Fed independence? Because he mentioned the fact that he thinks Fed independence is really, really important. And it's, you know, one of the things he really believes it. So he's asked, well, if the president could just fire, you know, an FOMC member, do you think that is a problem for Fed independence? And he goes, well, you know, I really can't say, you know, and it's like, well, what's your opinion? It goes, well, you know, whatever the Supreme Court decides, you know, I guess I don't, you know, I didn't, I'm not taking one class on the Constitution, but you know, I didn't take enough classes to, to really understand it, right? Because, you know, it's written in Chinese. So who the hell knows what the Constitution means? So like, I can't even answer that question because I'm not a constitutional scholar. You know, I'll just defer to whatever the Supreme Court says. I mean, what bullshit, you know, but of course, yeah, I know he's probably instructed, like, the guy's going to get rubber stamped. He's going to get approved because the Republicans control the Senate. And the Republicans are scared shitless to do anything anti-Trump because, you know, though Trump has lost a lot of his supporters, he hasn't lost them all. He still has a core group. In fact, I think he's retained more supporters than he's lost. You know, he's lost a lot of independence. But the Republicans, though, give his, you know, crap about them. I mean, they need them in the general election. But what most Republicans don't want is a primary. They don't want some other Republican to say, you weren't MAGA enough. They don't want to, you know, they don't want to be the next Thomas Massey. And we'll see. Maybe Massey is going to survive, and that will embolden some. I hope Massey survives. He's the best congressman. In fact, he's the only congressman, I think. No, I donate. I think I donate. No, that was a guy that was running for Congress. He's the only incumbent that I've donated personally. Personally, I've donated to Massey's campaign. I'm maxed out. I can probably, I might be able if there's another cycle, but I gave the individual max to him. But I would encourage my audience to donate to a Massey. In fact, any Republican that Trump wants to get rid of is a Republican that you want to keep. Because the irony of the reason he wants to get rid of Massey is because Massey is against deficit spending. He's against all the stuff that Trump pretended he was also against, but now he's for. He wants to get rid of Massey because he's one of the only Republicans that has the guts to say, we don't have this money, we can't spend it. We need to cut government spending. Nobody else will say that. But you know, so, because they're afraid. And so Warsh, you know, to me, you know, I mean, is he the worst chair pick that he could have made? No, I think, I think there are, there are worse people than Kevin Warsh who Trump could have nominated. I mean, that's the most I can say about it, right? I mean, at least the guy understands that economic growth doesn't cause inflation. And apparently, you know, when Elizabeth Warren was grilling the guy about not predicting the 2008 financial crisis, which she didn't predict either, I of course did, he at least claimed that he was warning about Fannie and Freddie. Maybe he did warn about them, which would have been good. I was warning. I said they were going to go bankrupt. And so he maybe he knew they were a problem. And so he probably is not even close to being the worst person that could have the job. He's probably not as bad as Yellen. He's probably not as bad as Bernanke. And maybe he's not as bad as Powell. But not as bad as really bad Fed Chairman doesn't mean he's going to be a good Fed Chairman. I wouldn't expect that at all. What I would expect from Kevin Warsh is more of the same. More of the same shit that we've been getting. More reckless money printing, quantitative easing, artificially low interest rates. That's it. That's what we're going to get. And that's bearish for the dollar. That's bullish for gold. That's bullish for the Euro-Pacific asset management strategy. So what you should be doing now in response to these hearings is buy yourself some gold and silver. Gold is back below $4,800, about $4,750. It's up $35 tonight, but it was down $125 during the day. So you got a nice dip. Go to Schiff Gold right now. In fact, we just launched, I should have said this earlier in the program. Maybe I'll do it next time. The Schiff Gold app is live at the app store. Go and download my app, and then you can buy gold and silver right from the app. Have it delivered right to your door. The T-Gold app is not ready yet, and it's not live on the Schiff Gold app. You can still buy T-Gold on your desktop on my website. You can buy T-Gold. Not on the app yet. I will let you know it's coming. We're still working it out. But I have a lot that's going to go on later with T-Gold. But obviously having the app is a key to using gold and silver as a medium of exchange where you can send and receive payments right from the app in gold and silver and ultimately withdraw your gold in a token. All that stuff, that's all my big plans. But right now go get the app, buy yourself some gold and silver. And if you want to fund your T-Gold account, you got to do it on the website for now. Silver is up $1.20, but it was down $3 today. But it's back below $80, $77.76. Buy some silver. Go to EuropePacificAssetManagement, europac.com. Get into my managed accounts. Buy my mutual funds. All of these funds are designed to benefit, to benefit from a weak dollar, from stagflation. All the things that are happening now and that are going to happen worse in the future, that's already factored into these funds. And if I'm right, then these funds should deliver incredible returns. So load up on them. And again, don't forget to subscribe to my free newsletter at Schiff Sovereign. And if you're a do-it-yourselfer, if you need some investment ideas, make sure and get a premium, get a subscription to Global Strategic Assets. And we're really going to be working on our new product for your Plan B, for your Plan B. My Plan B, you know, might be, that might be Panama. I kind of let that a little bit out of the bag. But we're going to be, you know, talking a lot about things that you could do just in case. You know, things are going to get bad. They could get really bad. And so it's important to have a Plan B. And so we're going to be covering a lot of that at, at Schiff Sovereign. Anyway, that's it for today's podcast. Don't forget, like the YouTube video, subscribe, give me a thumbs up, tell your friends and I'll be back with another podcast. Most likely it'll be the Friday Schiff Gold Wrap. I haven't done a Schiff Gold Friday Wrap in a couple of weeks. So most likely the next thing I'm going to be doing is the Friday Market Wrap. So if you're not currently a subscriber to the Schiff Gold YouTube channel, go there right now and subscribe and be on the lookout for the Friday Market Wrap. Bye for now.