Bannon's War Room - Episode 2688： Hurdling Towards Market Failure

00:00:00.000 this is the primal scream of a dying regime pray for our enemies because we're going medieval on

00:00:11.040 these people here's not got a free shot all these networks lying about the people the people have

00:00:17.640 had a belly full of it i know you don't like hearing that i know you try to do everything

00:00:21.400 the world to stop that but you're not going to stop it it's going to happen and where do people

00:00:24.980 like that go to share the big line mega media i wish in my soul i wish that any of these people

00:00:32.800 had a conscience ask yourself what is my task and what is my purpose if that answer is to save my

00:00:40.720 country this country will be saved war room here's your host stephen k bann

00:00:47.900 it's tuesday 25th of april on the year of alert 2023 on the morning show because we were so jammed

00:00:56.960 wall-to-wall for all of our guys that are the four-hour uh crowd um i didn't get a chance to

00:01:03.100 talk about the cover of the wall street journal the lead story i talked about the cover the new

00:01:06.800 york times lead story about tucker the lead story of course the wall street journal being owned uh by

00:01:12.160 the murdoch kind of buried that story slightly but their lead story is pretty important 100 billion

00:01:17.940 oops 100 billion dollars in assets in uh deposits excuse me deposits uh out of republic bank first

00:01:27.420 republic bank remember first republic is known as having a really premier asset management group

00:01:33.600 steve cortez i got two things to talk about in the economy that you've kind of called number one

00:01:38.180 and we want to make sure everybody understands this the smaller banks the regional banks are

00:01:42.400 under full assault and you've got a credit contraction going on right now cortez talk to me

00:01:48.320 this problem is a massive problem in the financial crisis we face right and it portends nothing

00:01:56.580 more portends the lost decade in front of us than what's happening on credit and what's happening

00:02:04.160 these smaller banks steve cortez your thoughts and analysis sir steve sadly you're exactly spot on and

00:02:10.600 to borrow a phrase from the worst secretary of the treasury in all of history janet yellen this is not

00:02:16.100 transitory in other words these are systemic problems that are not plaguing the regional banks

00:02:21.700 and today is the latest data point in that regard from first republic by the way this is terrible news for

00:02:27.840 the corporate media which of course on the day that joe biden has the gall to say that he deserves

00:02:32.640 another term as president on that very day we get this report out from first republic more evidence

00:02:38.940 that this banking crisis continues and in fact intensifies and that a lot of it by the way

00:02:44.760 emanates out of where out of the san francisco bay area and out of silicon valley as a business sector

00:02:50.840 specifically the biggest supporters perhaps in total of the democratic party and certainly of the

00:02:56.160 biden regime you know you mentioned the wall street journal reporting if we can pull up chart one

00:02:59.680 i'd like to go to some of the report reporting from reuters on this today and just quote a bit

00:03:03.940 from reuters reporting on first republic they note that this is what's going to happen going forward

00:03:08.520 they're going to shrink the balance sheet cut expenses cut executive pay and lay off one quarter

00:03:15.640 of the workforce so that is the news out of first republic and again this is not obviously first

00:03:21.860 republic specific we had a similar tale out of out of silicon valley bank before it was rescued by the

00:03:27.500 american taxpayers out of signature bank before it was rescued by the american taxpayers we also had

00:03:32.720 over the weekend moody's cut essentially the entire sector meaning every regional bank every significant

00:03:38.760 regional bank in america had its credit downgraded now here's the ramification far beyond just what's

00:03:45.200 happening in these banks or just what's happening to the people who own stock in these banks the

00:03:49.120 unfortunate people by the way speaking of the stock how did it react for first republic well it opened up

00:03:53.100 down 20 percent by lunchtime it was down 30 percent over the last year steve it's down 92 percent okay

00:04:00.420 that that much value destruction because of what joe biden has done but let's talk about the ramifications

00:04:05.620 outside of the banking sector itself steve the the small and regional banks out there they are the

00:04:12.260 lifeblood for main street for small business in this country small operations can't go and get a loan

00:04:17.660 from jp morgan or goldman sachs they simply can't okay those giant multinational mega banks simply don't

00:04:24.020 care about medium and smaller size firms in the united states so the financial uh fuel for main street

00:04:31.120 for small business for the dynamism of the american economy has always come from regional and local banks

00:04:37.300 those banks are suffering all banks are suffering but those banks are suffering disproportionately and

00:04:43.020 because of that steve that's why i say this is a systemic crisis with ongoing terrible fallout

00:04:49.480 for the economy and it's only going to lead unfortunately steve to an ever more intensified

00:04:54.480 concentration of market share among a relatively small group of oligarchs and the firms that they control

00:05:01.420 steve i want to go something that that you mentioned uh briefly you got silicon valley bank

00:05:08.980 and you got first republic that are in the uh that are in the bay area you've got signature that was

00:05:13.220 new york city i think new york city based all three of them are bedrocks of the democratic party

00:05:19.620 and particularly the either the crypto side or the or the or the the high tech side the bank side and

00:05:25.580 the very very dialed in uh and we saw the bailouts first with you know guaranteed deposits all that

00:05:33.360 does this mean particularly as we're in the middle of this massive fight over debt and remember

00:05:38.860 it was the overspending of the irresponsible illegitimate biden regime that got us into this 0.93

00:05:44.840 mess and got these banks upside down do you think the political pressure is going to come for

00:05:49.740 additional ballots and that you mentioned moody's put i think 11 of the most the top 11 regional banks

00:05:56.280 on on on on essentially credit downgrade and a credit watch which is your point is kind of the the

00:06:03.380 basket of all the important ones in the country we've got a massive crisis right now are they going

00:06:10.400 to try to use their political stroke to have maga bail them out of course they are and and steve they

00:06:15.740 already have right i mean look at what we saw happen that first weekend government never moved so fast as

00:06:21.060 when the oligarchs cracked them cracked the whip particularly the oligarchs of silicon valley so think of

00:06:25.780 that first weekend not very long ago now just weeks ago with silicon valley bank because the venture

00:06:31.380 capital firms didn't want to pony up their funds even though they had more than enough liquidity to

00:06:36.300 do so but because they didn't want to and because they used their democratic congressmen and senators

00:06:41.560 from the state of california to start barking loudly behind the scenes not in public behind the scenes

00:06:47.120 at the fed at the treasury at the fdic they got incredibly quick action the kind of quick action

00:06:52.740 by the way that the deplorables can never get when they're in trouble for example the people of east

00:06:57.220 palestine they can never get that kind of government response but svb got it right away

00:07:01.600 signature bank in new york city got it right away i fear that now this is 3.0 uh unfolding before us

00:07:08.140 with first republic which is headquartered in san francisco uh so you know yes these places

00:07:12.560 unfortunately have disproportionate political power within the democratic party and because of that

00:07:18.040 they're going to get very preferential treatment but i will also point this out steve because i think

00:07:22.080 there's a certain paradox here uh there's a certain irony to this almost you know i think that tech

00:07:27.040 more than any other business group in the country installed joe biden as president of the united

00:07:32.740 states and i notice i don't say help elect him i think they installed him because of the various

00:07:36.920 actions the zucker bucks spent all over the country the censoring of the of the laptop from hell

00:07:41.640 um the the closing down of social media accounts and and um and shadow banning of social media

00:07:47.640 accounts that were hostile to uh to the biden candidacy all of that tech largely installed

00:07:53.760 this man as their chosen president he then turned around though and instituted policies which bit tech

00:08:00.080 first uh and and so far fiercest regarding inflation you know tech layoffs in the silicon valley area over

00:08:05.960 a hundred thousand layoffs and counting in that industry now some folks out there in the audience might

00:08:10.920 say good well i want google to suffer i want microsoft to suffer and i understand uh that mentality

00:08:15.880 but realize that unfortunately the pain is ubiquitous it's spread throughout the economy

00:08:20.160 and particularly now that we're talking about the smaller and the regional banks that again are just

00:08:25.140 the lifeblood they are really the financial lubricant for an economy to make the economy hum you

00:08:30.680 know that is the the financial fuel the credit fuel that the country needs we now have a significant

00:08:35.920 credit crunch going on already unfolding in this country by the way i can prove that again and you

00:08:40.300 know i like to show charts if we can show chart number two please let's show the deposit base

00:08:44.340 of the banks in this country this is since biden took office and this is from the wall street journal

00:08:48.380 since january of 2021 uh this in the middle line there the black is all banks the lower line the

00:08:54.780 darker blue is large banks in the top line the lighter blue is the small banks you can see

00:08:59.420 the deposits have actually been uh trending downward for some time before things got to this current

00:09:05.000 crisis stage but now that they've gotten to this crisis stage they're rolling over very very

00:09:09.700 materially and small banks not surprisingly much worse off than large banks so steve this is the

00:09:16.020 definition what you see on that chart right there this new downward trend um did that rolling over

00:09:21.200 this is the very definition of a credit crunch okay keep that if uh if the guys in palm beach can keep

00:09:28.480 the um can keep uh that chart up for a second um this i mean cortez this ought to chill you to your core

00:09:38.300 because this shows you when i talk about a lost decade i mean we're just not going to wave a magic

00:09:43.760 wand what biden these guys have done is so horrific and that's why this debate going on in washington

00:09:49.180 right now is so important about this debt ceiling okay and they're gonna say oh it's not relevant it's

00:09:54.500 all this is just all a fake uh thing you got to pay your past bills that that chart shows you that

00:10:02.840 it's going to take a long we're going to have not just the right policies you have to have the

00:10:07.280 the the the cojones to enforce it because it's going to take a long time to turn this around and 0.87

00:10:14.240 right there is going to show you at a regional level you're not going to have those robust vibrant

00:10:19.560 financial institutions available to provide credit to the small shop owners and these small

00:10:26.300 entrepreneurs that are really the lifeblood of the economy sir right well and steve listen like a lot of

00:10:32.620 worthwhile endeavors in life you know finance works this way it takes a long time to build up a good

00:10:37.440 capital base to build up significant savings uh it doesn't take long at all unfortunately to destroy

00:10:42.760 savings you know as that chart unfortunately shows and again too even before the current crisis before

00:10:47.720 things got really dire in recent weeks it was already trending downward and think about this steve

00:10:52.720 it was trending downward bank deposits were trending downward while joe biden was pumping an absolutely

00:10:58.620 exorbitant amount of money into the economy money we didn't have money we were borrowing uh through

00:11:04.080 the through the absolute profligacy of the federal budget so despite that profligacy it wasn't finding

00:11:09.980 its way into bank accounts why because people had to spend it because biden's inflation is so pernicious

00:11:15.860 it's so punishing um and particularly for middle and lower income americans that even if they were seeing

00:11:21.080 additional funds flowing into their account it wasn't enough it wasn't enough to keep pace hence

00:11:25.420 why real wages meaning your income adjusted for inflation real wages have now been falling every

00:11:31.520 single month for over two years the worst streak in american history so that is also a major input

00:11:37.380 into why we see that very unfortunate chart with the money rolling over but you're exactly right steve

00:11:41.980 this isn't something that can be fixed quickly okay it's you can destroy a house in a day but it takes

00:11:47.380 months or even years to build a beautiful home okay to rebuild uh the capital and the savings of the

00:11:52.600 united states we can do it and we have to start doing it we have no choice but make no mistake

00:11:57.140 this is an arduous task before us because it's easy to destroy very difficult to build up

00:12:02.400 we told we we told about the financial structure of the world has shifted to these negative and zero

00:12:07.960 interest rates and once biden had the inflation it all changed this thing you could wreck this and

00:12:12.680 it takes you years or decades to go back uh cortez when people think of you they think of some of the

00:12:18.340 sayings you have that cut to the chase price is truth the other one is the trucks don't lie

00:12:24.060 that's right about the trucks don't lie and i i'm borrowing from my fellow colombian shakira who says

00:12:29.700 that hips don't lie well trucks don't lie uh and what i mean by that is is when things are getting

00:12:34.200 shipped uh the economy is healthy when they're not it's not i mean it's really really that simple

00:12:38.720 and uh we talked last week on war room i presented some of the evidence from jb hunt which is

00:12:43.600 the biggest trucking firm in the country and their ceo had extremely negative comments both

00:12:49.440 about the present situation and the outlook what he was specifically citing was the fact that they

00:12:53.480 cannot raise rates on their customers because of a lack of demand particularly at the consumer level

00:12:58.260 and yet their input costs continue to soar uh particularly as it pertains to fuel for a

00:13:03.060 trucking company so they're they're in a financial vice just like so many american families are again it's

00:13:07.460 it's sort of a corporate reflection of real wages going down it's real real earnings going down

00:13:12.440 for a corporation well we got more evidence of that today that that was not jb hunt specific

00:13:17.200 uh it wasn't even just center specific to only that part of trucking but rather

00:13:21.120 shipping in general because ups uh one of the most ubiquitous companies in the american economy

00:13:27.300 a giant of commerce in this country at every level from individual e-commerce all the way up to

00:13:32.440 wholesale trade ups with extremely disappointing news stock got hammered right out of the gate you

00:13:38.820 know again overnight into the morning session today uh and this is a a troubling sign for the economy

00:13:44.180 and another data point affirming my thesis which is that trucking is a leading indicator and as a

00:13:51.360 leading indicator if we pay attention to the metrics of trucking and to the comments of the people who are

00:13:56.500 deeply involved in that business we see that the consumer is spent and that the united states economy

00:14:02.220 unfortunately is significantly decelerating that is the reality right now so uh you know all of this

00:14:09.520 though points back again it's not just the business cycle it's not just bad luck all of this points back

00:14:13.740 to the created crises plural of joe biden when it comes to the economy chiefly he created the

00:14:20.240 inflationary crisis two ways number one he attacked domestic american energy production as really his first act

00:14:26.340 in office he did the dirty work of the green new deal radicals secondly exorbitant borrowing and spending

00:14:32.640 that shot interest rates through the roof cortez i'm gonna ask you i know you're busy i'm gonna ask

00:14:38.000 you if you're hanging in uh for a little bit of the next block short commercial break steve cortez

00:14:42.000 going to join us the other side also ed dowd is going to come in he's one of the first guys to call

00:14:47.240 this also he's got some uh i don't know grim news but reality check next in the war room

00:14:52.400 inflation has consequences as the fed raises interest rates to combat out-of-control government

00:15:05.940 spending long-term bonds have diminished in value crippling banks depositors are holding their

00:15:11.900 breath and investors are bailing on bank stocks diversification has never looked more important

00:15:19.720 to you the recent surge in gold prices is directly tied to the extreme market volatility right now

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00:16:25.880 future text bannon to 989898 today take action war room here's your host stephen k bannon

00:16:35.540 okay birchgold.com slash uh uh bannon go check it out right now uh get the third uh installment of

00:16:46.740 the end of the dollar empire i think we've been putting this out now for two years the third

00:16:50.240 installment just came out the debt trap it'll get you it's like ripped from today's headline it'll

00:16:54.900 get you totally up to speed and everything you need to know about this really historic fight we're

00:16:59.560 having over the debt ceiling right now we're going to get to more of that with steve cortez make sure

00:17:03.480 you go check it out also we had philip patrick on saturday and philip is going to join me again

00:17:09.600 this saturday philip walked through the central banks buying gold historic level in uh 2022 and starting

00:17:17.440 off in 2023 we'll have a whole update on that but you can get all the information that by going to

00:17:21.740 birchgold.com slash bannon and make sure that you get uh everything related to the 401ks the iras all

00:17:29.320 of it but the information that they really walk you through on precious metals make sure you do that

00:17:33.900 today uh cortez uh biden announces this morning uh and he comes after uh maga extremist which i think

00:17:42.960 kind of means cortez and bannon and others in the war room contributorship uh in the posse and mtg

00:17:50.560 specifically but we're in this historic fight and this fight's what it's about we can't worry about

00:17:56.340 2024 right now we got to worry about what's in front of us and this is a historic fight you've got

00:18:01.520 speaker mccarthy and i give a hat tip to speaker mccarthy he's got a different mandate and job than we

00:18:07.320 have here at the war room i mean we pride ourselves on being the dead enders we pride ourselves on being

00:18:11.640 that anchor to the hard right uh of all the policies and making people come come our way to

00:18:17.220 get the policies we believe are correct uh this fight over the button we're dead enders and that

00:18:22.380 one penny increase to the debt ceiling prioritization of payments and let's have massive cuts now

00:18:27.420 but you can see the the issue and he's i think he's actually doing a good job i mean russ votes even

00:18:32.680 kind of signed on his plan the four and a half training the cuts uh go back to the 2022 it will give

00:18:38.260 a trade and a half and and uh you know but we'll fight this fight again in early part of next year

00:18:43.180 part of the reason i want to have you comment you've got these congressmen and they're well

00:18:47.580 intentioned but i think all a lot of times they don't connect what they're talking about

00:18:52.500 to really the economic and financial implication that you've got a congressman down in florida who's

00:18:58.100 a great guy he's a served his country he's a highly decorated he's a neocon but they're talking 0.88

00:19:03.960 about radical increase in the defense budget and look i'm a former uh military guy and i just say

00:19:10.380 hey look we gotta be thinking of non-kinetic that's where i got doubt here and we did the third we did

00:19:14.380 the conference on the third world war the early years to say hey look victory without bloodshed let's

00:19:19.220 do it like reagan did it use economic power and technological power to do it steve cortez your thoughts

00:19:25.180 yes so uh mike waltz i think you know the congressman you're talking about and i don't know if we had that

00:19:29.940 tape we could play it but uh he was on fox news and he said that we need a reagan style defense

00:19:35.580 build-up a reagan style defense build-up uh which i just thought you're number one i think

00:19:39.480 strategically that's wrong and you're exactly right by the way no doubting his personal honor and his

00:19:43.760 personal bravery i believe he was a green beret he's clearly a tough man who should be admired and

00:19:49.040 thanked of course for serving this country but he is a neocon and he wants to fight all over the

00:19:53.620 world he wants intervention all over the world he very much has that mentality uh that we in the

00:19:58.420 america first movement reject because we believe in america first foreign policy of realism and

00:20:03.460 restraint and non-interventionism it's one of the hallmarks of our movement and so we have a very

00:20:08.820 different view but to connect this back to the economy steve even if his prescriptions were a good

00:20:14.560 idea which i certainly think they are not even if it were we can't afford it steve okay so we have to

00:20:20.260 deal in the realm of harsh economic reality and when we look at the budget when we look at inflation

00:20:25.840 when we look at the the economic crisis that the united states is suffering right now in the cold

00:20:30.280 light of day the reality is even if you have neocon tendencies even if you do believe that the world is

00:20:37.340 sort of a chessboard that should be run by folks from the from the foreign policy establishment in

00:20:41.680 washington dc even if you think it's smart to massively enlarge nato beyond uh where its historic

00:20:47.800 boundaries you know i think none of that is the case but i'm just saying for the sake of argument even

00:20:50.880 if you believe in all of that steve you have to be a grown-up if you're in a position of power right

00:20:55.700 now and say we have 32 trillion dollars of debt and counting we are in a deep economic crisis and

00:21:02.900 therefore even on the national security side we have to significantly prioritize how and where we

00:21:09.440 spend our resources and i think you're exactly right steve the idea that we should spend all of it

00:21:13.840 preparing for a kinetic war we have to be ready for kinetic war of course we have to be ready for the

00:21:17.980 worst case scenario but the idea that's where most of the attention and most of the spending should go

00:21:22.380 um i think is just frankly a luddite vision this is a very new world of information warfare of

00:21:28.660 monetary foreign exchange currency warfare um of propaganda it's a very very different world it would

00:21:33.760 be such a failure if we have to get to kinetic war for example against the chinese because we have 1.00

00:21:39.280 so many levers at our disposal particularly right now we may not have some of those levers in a few

00:21:43.640 years but we have them now at our disposal to properly pressure and coerce uh and convince

00:21:49.320 the chinese to do the right thing versus vis-a-vis american interests without firing actual shots and

00:21:56.240 so i think it's important for us to you know to connect the dots here and by the way in terms of

00:21:59.720 connecting the dots uh you know what we could really use right now in the united states at a time

00:22:04.060 when we see banking deposits uh crash we could use the hundred billion dollars plus that we are spending

00:22:09.520 on ukraine to escalate a regional slavic struggle that has no discernible definable u.s national

00:22:15.420 security interest and by the way to connect both of these discussions the national security one

00:22:18.780 and the financial discussion to the corporate media i believe one of the reasons at least might not

00:22:24.660 have been a primary reason but i think one of the reasons that tucker carlson was taken off the air

00:22:28.560 is because when it comes to legacy media platforms steve he was the only figure of any significance

00:22:33.920 at the legacy media platforms who was willing to talk against this war against this escalation

00:22:40.460 and against the narrative of the foreign policy establishment of washington dc you have certainly

00:22:46.300 been the most significant force i think out there period in all of media making the case for an

00:22:51.400 america first foreign policy and against escalation but when it comes to the legacy platforms it really

00:22:56.340 was just tucker so with him taking off the field right now there's just a void there's no one in

00:23:01.300 those platforms now he's willing to only talk about sanity in the black sea cortez cortez speaks truth

00:23:08.280 to power the only guy in prime time that was anti-ukraine and and anti anti to the heart of it why we even

00:23:16.120 there i mean tucker would have the guest on and really walk through the details and they hated it

00:23:21.260 that's definitely one of the reasons it was and and paying this contract out is to shut him up for a

00:23:27.280 couple of years the murdochs are look the murdochs are evil but they're smart that's lucifer remember

00:23:32.800 lucifer plenty evil smart and cunning so that's what we're dealing with cortez how do people get to all

00:23:38.780 your content and follow you on social media i'm gonna have you back on tomorrow next time we're

00:23:42.380 talking about this the the uh the actual fight itself and and in mccarthy and what direction we

00:23:48.000 should be taking because they're probably going to be votes later in the week what uh how do people

00:23:52.320 get to you for your all your analysis no lack of action this week that's for sure steve please uh

00:23:57.440 find me at cortez steve cortez with an s on the twitter and stevecortez.substack.com thank you so

00:24:03.280 much for having me steve appreciate it thank you brother uh let's go ahead and play i got the ed

00:24:07.660 doubt on i got a couple of great cuts let's go and play the cuts on that down so war is the only

00:24:13.380 palpable narrative that populations will accept to inflate with proper propaganda that's the only

00:24:19.180 narrative that people will buy you can't say we're going to do this to save the rich if the oracle

00:24:24.480 warren buffett has told you war is coming i'm telling you war is coming believe it it's not it's

00:24:32.680 not conspiracy theory this is this is what's going to happen unfortunately unless we can figure out a

00:24:40.080 political solution in this country which at the moment i'm a little i'm a little cautious but we'll

00:24:46.180 see what happens okay uh ed doubt joins me ed you you came really to prominence in the media

00:24:54.040 because you put your analytical skills broader than the you've always been a big star in the

00:24:58.980 business media but in a broader context because you put your analytical skills to work about the

00:25:04.320 debacle of the vaccine but you're back to your wheelhouse and it's quite scary you were one of the

00:25:09.640 you know we had nothing but prominent speakers over the weekend at world war three the conference

00:25:15.240 the early years but i can tell you from people texting me you sure and we had what 300 war room

00:25:20.320 posse members there you shocked people walk me through your current assessment of the economy

00:25:26.060 you're the first guy to call to me the massive downturn we're going to take you've seen what's

00:25:31.060 happened to the banks you're seeing they're all on credit watch now the regional banks we just

00:25:34.980 walked through the deposits are getting crushed and that's the lifeblood of the economy where do we

00:25:38.940 stand on all this sir so when i went to the conference this weekend i wanted to kind of

00:25:44.140 bring people through the story of what's what's happened what's happened historically where we've

00:25:49.180 been in the past where we are now and where we're going and you know i want to build on what steve

00:25:53.980 cortez said about the credit crunch you can uh if cameron can throw up the m2 chart slide from

00:26:00.080 uh my presentation basically m2 money supply year over year growth uh went negative in november of

00:26:08.680 2022 it's the fifth time this has happened since we have m2 uh records the other four times resulted

00:26:17.740 in historical uh bank failures and financial panics the last time we had one was 1930 so this is a big

00:26:25.520 big deal and there i suspect the reason we haven't had one of these events uh since uh 1930 is because

00:26:33.480 uh we became the world reserve currency in 1944 that allowed us to export our credit uh overseas then we

00:26:42.040 had the petrodollar in 71 with nixon so this has been a 78-year cycle of credit expansion and people get

00:26:50.380 confused on credit they think it's the money supply stock uh it's not it's the flow you need constant

00:26:57.000 growth in credit to keep the thing going and we just went negative year-over-year growth and i said

00:27:01.620 historically this has been associated with bank failures and you know we just had three signature

00:27:06.700 bank silicon valley bank and credit suisse uh seemingly out of nowhere you know i'm i've been in

00:27:12.480 the markets for a long time bear stearns was rumored to go bankrupt for months on end in my world

00:27:17.500 silicon valley bank happened in a week uh the speed with which this is happening is quite alarming

00:27:23.980 steve cortez today talked about first republic bank down 30 down 92 from the top so what the fed did

00:27:32.220 uh that weekend and and the treasury department was basically a big uh come to jesus moment for them

00:27:39.000 they came up with the bank term funding plan which is nothing more than some loans so i suspect uh we

00:27:45.560 have more bank failures in front of us and those are you know my team carlos uh yuri and i have come

00:27:51.980 up with their economic forecast and we put out a report a couple weeks ago suggesting that the

00:27:56.140 recession that's coming will be hard in the third and fourth quarter and it's looking like at least

00:28:02.000 a 1990-91 snl crisis if it doesn't go to the senate which can you bar the door if that happens

00:28:07.700 hang on i want to get into all that i've also got uh bradley thayer i think we're gonna get a sean

00:28:14.760 foyte at six if we can't i'll get sean he's been accused i don't know even in the accusation about

00:28:21.980 being a christian nationalist but i've got uh want to keep ed down we've got a lot to go through

00:28:26.220 about what the reality the signal not the noise in the world's economy next

00:28:30.440 stephen k bannon here with a warning when's the last time you checked the legal title to your home

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00:29:43.240 do this today take action action action war room here's your host stephen k bannon

00:29:50.780 okay welcome back uh my pillow.com promo code war room i know sometimes the reports you get on the

00:30:02.220 war room makes it tough to sleep that's why you need to sleep the sleep of the josh and you do it on the

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00:30:19.060 he's taking these things up technologically next level and also he's got a massive discount on it

00:30:24.580 uh so go check it out go to our square my pillow.com promo code war room ed doubt i want to go back why

00:30:31.080 is m2 important what does it track these negative numbers has been november why they're so unique

00:30:36.420 what does that portend and then you and your team have called they said hey by that we don't hear the

00:30:42.040 happy talk this was last year he said by second quarter end of second quarter third quarter we're going to be in

00:30:46.980 it and don't believe the happy talk you're hearing from the guys on cnbc so i want to connect m2 that

00:30:53.680 with the with the what you guys are seeing in your current forecast yeah so m2 is super important

00:30:59.260 because it's the money supply but it's not the supply it's the it's the flow and every time growth

00:31:06.040 year over year has gone negative uh there's been systemic bank failures uh and it's only happened

00:31:12.300 uh five times since uh 1868 last time was 1930 and interestingly enough um uh every time uh this

00:31:21.860 has happened we're already in crisis so despite the happy talk from the mainstream media the war room

00:31:27.180 you and i know we're in a crisis and the crisis is now starting to manifest in bank failures and a

00:31:33.280 hard hard landing in the economy uh carlos yuri and i our work suggests that we're going to see a

00:31:39.580 recession as bad as the one we saw with the snl crisis uh currently with our economic early cycle

00:31:46.480 indicators and it's going to probably bottom third or fourth quarter and uh when that hits uh tax

00:31:52.340 receipts are going to go lower we have a budget deficit problem we're 500 billion approximately

00:31:57.480 above where we were this time last year uh and so we're looking at two two trillion structural budget

00:32:03.280 uh with tax receipts going down uh budget deficit i mean and so we're seeing a giant liquidity sucking

00:32:10.180 sound coming out of the market in the fall uh basically this money needs to be funded somehow

00:32:16.060 and if the fed's not currently doing qe they're doing q qt that money's going to come from risk assets

00:32:21.960 and crowd out other investments the other thing going on cortez uh talked about this uh the fed raised

00:32:28.860 interest rates from zero to five percent literally in 12 months and the fed reverse uh repo program is

00:32:35.360 nothing more than uh them giving loans uh or uh money market funds giving loans to them crowding out

00:32:43.180 private investments so basically the fed at two and a half trillion reverse repo program is the money

00:32:49.360 market 40 of all money market assets are overnight at the fed the fed has no counterparty risk so the fed is

00:32:56.880 essentially crowding out uh private credit that is desperately needed and i i suspect the fed reverse

00:33:03.020 repo program uh the economy going south has caused or contributed to this n2 situation okay so we're

00:33:11.220 looking at deflation and and they're gonna have to they're gonna have to stop that and they're gonna

00:33:15.500 try to reinflate and that's why i think war is coming okay here uh what just a couple things when

00:33:23.800 people talk about bear stearns and lehman they've been people have been they've been on watch they've

00:33:27.940 been arguing about that for a year silicon valley bank signature and first republic out of nowhere

00:33:32.000 i mean boom like like a thunderbolt on a clear blue day uh credit suisse people have discussed that but

00:33:38.840 the collapse of it in this and and how what the swiss government had to do to save it and jam ubs and

00:33:44.040 credit suisse together these are extraordinary and these banks are not tiny svb and signature and first

00:33:49.620 these are some of the biggest banks in the country and they were the two second and third biggest bank

00:33:53.920 failures so my point is there's so much law of unintended consequences here there's you got

00:33:59.900 yellen who's a clown you got powell who's over his head you got biden and his economic council who are

00:34:05.820 junior varsity we're hurtling towards this and i gotta tell you it is going to be flat out catastrophic 0.97

00:34:12.520 the central banks throughout the world this is where i got i've got the birch gold guys back on this 0.98

00:34:16.460 weekend the central banks throughout the world these are not dumb people when they're in tokyo

00:34:22.320 and in russia and they're pegging the ruble to gold when they're buying gold and holding back their

00:34:26.960 resources and saying hey they're best they're going to a quasi gold standard uh it's because they have

00:34:32.840 no faith not in you in this audience full faith and credit the united states they have no faith of the

00:34:38.960 financial and political leadership of this nation ed dowd yeah so we're looking at uh

00:34:46.380 a hard economic landing we're looking at deflation but there will be a response from central banks and

00:34:52.500 governments to fight the deflationary forces that have been unleashed and so i suspect that's why

00:34:58.360 there's all this uh talk about a central bank digital currency we've got the fed now program we've got the

00:35:03.740 biden executive order uh so they're trying to bring that in and warren buffett recently sold all his

00:35:10.200 taiwan semiconductor stock this man is not dumb and he mentioned war is one of the reasons why uh china 0.69

00:35:16.200 is in desperate shape they're one of the victims of uh the uh the spending and the debt increases over

00:35:23.180 the last 20 25 years and their economy is imploding they need a boogeyman and they're going to start to

00:35:29.340 rattle the sabers to take uh the their own populations eyeball off them this is just classic uh you know 0.97

00:35:37.520 uh empire 101 when when you're in trouble you create a boogeyman and so the saber rattling in

00:35:43.740 taiwan is real and it's coming it's coming hard and fast so we see kinetic wars uh over the next

00:35:50.300 several years unfortunately well we looked here's what i know you got a balance but you know you

00:35:56.820 head into the 1920s and 30s you had the rapid hyperinflation big inflation then followed by deflation

00:36:01.800 they had run out of tools and it kind of devolves into a regional conflict a couple of regional

00:36:07.940 conflicts that then metastasize into a global conflict that's exactly how this is playing out

00:36:13.660 this is like we haven't learned anything this is the 1930s all over again and it's like we're

00:36:18.340 inexorably going to be drawn to these regional conflicts that then metastasize with a financial

00:36:23.320 crisis into a global conflict that is the third world war the early years and we have a chance to 0.99

00:36:29.300 stop it but it's this insanity that's going to washington dc ed your closing thoughts and

00:36:34.620 observations brother yeah so since the great financial crisis if you're an observer of financial

00:36:40.600 markets one thing we all noticed is that there was uh unprecedented coordination between central banks

00:36:46.700 uh to cooperate with the shanghai accord the secret shanghai accord uh in 2016 uh to kind of prop up

00:36:54.740 the financial markets before the election what we're seeing now is a dissolution of this uh this

00:37:00.640 cooperation and we're going to every man for himself and this will manifest itself in currency wars at

00:37:06.080 some point because this whole debt bubble the release valve is currencies and i suspect that's the next

00:37:12.140 crisis is currency crises and sovereign debt crises

00:37:15.180 brother how do people get to your your content you you wrote the definitive book on this disaster on the

00:37:23.960 uh and if we put that up the disaster on the um on the on this and this vaccine which is all going to 0.68

00:37:29.960 come and be part of investigations lawsuits all of it uh that you really laid out analytically what

00:37:35.800 was going on how do people get to you all your economic reports all your economic thinking all of that

00:37:41.780 where they go ed financetechnologies.com spelled ph instead of f we put out a lot of our economic reports

00:37:49.100 for free at the moment on linkedin and twitter and getter and it's also at our website um i'm on

00:37:54.760 getter at at edward dowd and twitter at dowd edward and we're just constantly dropping stuff when we have

00:38:00.740 relevant things to report well you guys have been ahead of the curve you and your team are pretty

00:38:06.960 amazing pretty pretty amazing call shots ed uh thank you very much for taking time away to join us

00:38:12.300 appreciate it thank you steve have a great one thanks brother uh do we have a call over for

00:38:19.140 bradley thayer can just okay hey dr thayer you were one of the uh and look you've done more probably

00:38:25.040 in putting forward in your last publication with lin chow han and and the other your writing team

00:38:30.120 to really warn the american people that the ccp they can't be dismissed and they're very serious 1.00

00:38:36.440 they're serious about the way they've controlled this great nation of china they're serious about how

00:38:41.180 they control the people and they are not just a formidable enemy they are a formidable enemy that

00:38:46.560 happens to be at war with us and we have a political and and and business and cultural elite

00:38:52.500 that refuse to address that walk us through your presentation uh that that you gave out in torrance

00:38:59.160 in the la area this weekend sir hi steve it's great to be with you again uh today i'm pleased to do so

00:39:07.660 uh the thrust of my argument is in order to understand the chinese communist party you need to think like

00:39:13.760 a communist uh as they do you need to understand their ideology you need to understand why it's evil

00:39:21.120 but you need to grasp that uh they're determined uh to destroy uh western capitalist system that is to

00:39:31.340 target the united states for destruction uh and um to replace essentially the free order that we created

00:39:39.760 uh with their communist tyranny just as they oppress the chinese people and have done so since 1949 when they 0.93

00:39:48.320 came to power and that's when they declared war against us uh so too uh they want to dominate the rest of the

00:39:56.340 world so when we think as they do when we think like communists we're going to be able to understand

00:40:02.860 why we're heading towards an inexorable clash with them they're driving it they're determined to destroy

00:40:09.740 us and as you said uh we've been very slow uh to pick up on that we've been very slow to respond

00:40:18.640 uh to uh their actions in what's a classic case of threat deflation we consistently underestimate

00:40:25.500 the threat that china poses uh for a variety of reasons but one big reason is uh because we don't 1.00

00:40:34.700 understand their ideology and their determination uh to destroy us and as a consequence we've allowed

00:40:42.320 them to grow year after year decade after decade and now we're in uh a fix we're in a situation where

00:40:50.080 uh we can no longer ignore this threat we can no longer ignore the danger

00:40:55.520 hang on hang on i got a couple minutes here and then i got six minutes or so on the other side

00:41:02.540 if this happened every so often that we misplayed this or didn't think it through about their

00:41:10.380 determination and that they are godless atheist marxist and they are determined the one thing you 0.88

00:41:16.520 talk about from the law march these people the the cadres and the factions that lead it are the

00:41:21.560 hardest toughest meanest people on earth to fact they don't care how many lao bai jing they don't 1.00

00:41:27.400 care how many chinese they have to slaughter in order to keep control and we've seen that through 1.00

00:41:32.320 great leap forward in the famine and the cultural revolution they're absolutely heartless when it

00:41:36.840 comes to their own people how have we gotten it you know and your presentation so amazing when i sit

00:41:43.160 there i go it can't just be happenstance that our leadership is so clueless that they make the same

00:41:50.280 mistakes again we have consistently since the world war ii and the chinese civil war afterwards and when

00:41:58.000 they took power we essentially gave them power in 1949 but then over tiananmen square if you go back

00:42:05.360 and look at may of 1989 the chinese people their own courage of these students and workers and peasants

00:42:13.360 that came together and bonded in in in beijing and other cities around china they were this close to

00:42:19.600 freedom they were this close to what eventually those dominoes fell the berlin wall fell chiescu and

00:42:26.180 and romania fell it all fell driven by what they did in tiananmen square in the month of may

00:42:32.720 you could see you could see just like in 1775 and 1776 in this nation that freedom and people

00:42:40.120 standing up against overwhelming odds to do it and the bush administration the bush regime then

00:42:46.660 for 41 back the play of deng Xiaoping and these absolute mert li ping and deng Xiaoping the biggest

00:42:54.360 murderers and assassins and hardcore old school communists that internally would say our number one

00:43:00.780 focus is destroy the americans we have always our elites have always backed the chinese communist 0.94

00:43:08.100 party and there's something not right there it doesn't make any sense you can make that mistake

00:43:13.940 once you can make that mistake twice you can't make it consistently for 70 or 80 years and there's

00:43:21.020 something not being up bradley thayer dr thayer we're going to ask for the answer when we return on one of

00:43:27.520 the great questions of american national security and foreign policy over the last i don't know

00:43:33.800 century next in the war room

00:43:36.640 spread the word all through hong kong we will fight till they're all gone we rejoice when there's no more 1.00

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00:46:32.720 out right now dr thayer help me out here brother i i i i revere you and the work you and lin chow han

00:46:39.020 your work has just been amazing over the last couple years you've really added to this conversation

00:46:44.760 and dialogue in the united states but i gotta tell you i don't get it i just don't get it and it's even

00:46:50.640 got worse at the tiananmen i don't get her elites it has to be will for blindness at best sir

00:46:56.520 steve this is the biggest mistake that we've made we've allowed uh our our enemy to rise with our

00:47:06.540 assistance uh and we've consistently avoided any effort to attack that enemy to replace the chinese

00:47:14.120 communist party uh and its rule in china as you said 1989 was one of those points and that was a

00:47:22.260 failure of the bush administration first bush uh administration clinton administration compounded

00:47:28.320 that failure when uh they abandoned linking human rights to most favorite uh uh nation trade status

00:47:36.220 renewal and then also allowing uh the ccp allowing china into the world trade organization which was 0.88

00:47:44.420 negotiated under clinton when china came in in december of 2001 so this is the biggest mistake that we've

00:47:53.140 made and why did we make it well uh i think we made it because of the power of wall street the power of

00:48:01.620 of the financiers the power of silicon valley elite capture is a big component of of how this happened

00:48:09.760 uh we also this mistake is also the result of the genius of dung jiao ping uh and his recognition that

00:48:18.940 through his hide and bide strategy that is where china uh essentially hit its growth never talked about

00:48:27.100 uh while facilitating uh u.s investment u.s manufacturing essentially sucking u.s manufacturing 0.83

00:48:35.480 into china greatly helped uh china's rise and allowed it to do so without any balancing from the united

00:48:45.320 states which is a remarkable thing to have happened in international politics that our enemy arose and we

00:48:52.300 didn't do anything about it uh and so those are uh big parts of why this happened to that i would add

00:48:59.660 the fact and the change in the balance of power the fact that the cold war ended the soviet union died

00:49:06.320 and the united states is left standing and we're incredibly powerful and at that time in 1989 1990 1991

00:49:15.760 china just doesn't look like a threat uh and so uh as a concept that uh change in the balance of power we

00:49:24.580 have massive threat deflation and we just don't care anymore about uh a peer competitive threats

00:49:31.420 that just disappeared hang on we only hang on we only got a couple minutes well here's what i'll get

00:49:38.400 with all the think tanks and the you know the smart people at harvard these other places in the government

00:49:43.040 the cia it's obvious if you study chinese history that deng Xiaoping were true believers and they

00:49:48.400 literally hated the freedoms of the west and they knew the freedoms of the west they talk about

00:49:53.300 separation of powers it was anathema to how they would roll they understood if any of this came about

00:49:58.740 they would be destroyed the chinese people would rise up and that's why tiananmen was a massacre 1.00

00:50:03.640 it was a massacre and afterwards they said we got to put this down anytime this rises

00:50:07.420 it must be how did our elites miss the central point that these people this chinese communist party

00:50:15.540 is all about the dictatorial rule of their own people and actually going after the west hammer and tong 0.65

00:50:22.520 with no back down and no relief how did they miss that they didn't understand the enemy they didn't

00:50:28.340 think like communists if they had thought like communists they would have understand that communists

00:50:34.400 see the world as an inexorable clash they're going to win they're going to defeat the west they're 0.64

00:50:39.880 going to defeat the united states history is on their side uh and so it was uh the failure of

00:50:46.940 presidential leadership it was a failure of national security leadership uh year after year decade after

00:50:54.460 decade uh steve because they chose not to understand the enemy and take the enemy at his word

00:51:00.940 uh they didn't understand uh they didn't understand communist thought and so that contributed to it

00:51:06.600 but also steve the think tanks weren't uh you know generating the right analysis they weren't

00:51:13.340 generating an accurate assessment of the china threat because think tanks are funded by uh investors

00:51:20.620 and those investors have interests in china so we see here that again the genius of dung zhaopin 0.93

00:51:27.220 by sucking in wall street uh by sucking sucking in american manufacturing in silicon valley 0.98

00:51:33.700 right what did he do he ensured that um uh there was no incentive to recognize the china threat 0.97

00:51:42.300 your paycheck depended upon in fact not recognizing the china threat so we had this generational threat 0.98

00:51:50.500 deflation where we consistently underestimated china's growth and the threat that it posed

00:51:56.460 we didn't take communism seriously we didn't understand their ideology and the fact that as

00:52:02.940 communists they put power before everything else that is yeah xi jinping destroyed hong kong 0.98

00:52:10.440 right and why did he destroy hong kong hong kong is the goose that lays the golden egg

00:52:15.620 and yet he's killing it because he favors power he favors control over hong kong more than he

00:52:23.700 he favors wealth even the even the even the cash real quick we'll get you back on more depth give

00:52:31.120 right now when everybody get to your book everybody get to your social media and your website where

00:52:35.240 they go uh be fair at center for security policy.org and i'm on getter and truth that at bradley fair

00:52:43.720 thanks steve thanks very much gotta get the latest you gotta get the latest book it it's absolutely

00:52:49.400 incredible your presentation at the conference was just amazing okay short commercial break

00:52:54.740 hang in there the next hour is going to be actually more intense than this one guaranteed

00:53:00.660 short commercial break back in the war room in our second hour

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Bannon's War Room - April 26, 2023

Episode 2688： Hurdling Towards Market Failure

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