Episode 4301： Stopping The Destruction Of The US Economy
Episode Stats
Summary
In this episode, we discuss the impact of President Trump's new trade tariffs on Mexico and Canada, and whether or not they will trigger a recession. We also discuss why the tariffs are so effective and why they will have a negative impact on the economy.
Transcript
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Donald Trump is seeking nothing less than a total restructuring of a global trade environment
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which penalizes American companies, American workers, and American taxpayers through all
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manner of unfair trade, tariffs, non-tariff barriers, in this case taxation, as you mentioned,
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regulation. And it worked back in the 50s when we were trying to help the global economy recover
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after a war. But we have this practice of just surrendering our treasure to the rest of the
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world for no good end anymore. And ultimately, these are national security issues because if we
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don't have a manufacturing and a defense industrial base and tech companies which have every dollar
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they need for cutting edge AI and research and development, we're not going to be the country
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we need to be. I mean, the manufacturing sector went into recession back in late 2018, 2019 because
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of the tariffs. So, I mean, we're in a different world, a globally connected world where, you know,
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some of these CEOs that we talk to are very concerned about tariffs. They're worried about
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demand destruction. They're worried about price shocks. They're worried about trading relationships.
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We heard the same concerns back during the first term when President Trump levied historic
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tariffs on China, levied historic tariffs on steel and aluminum, levied historic tariffs on things
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like solar and washing machines. And what we got out of that was not the sky's fall and recession
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or inflation. What we got was price stability and prosperity. And one of the eight, I think the
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eighth wonder of the world is you go to the pride of Clyde in Ohio and you go to the whirlpool factory.
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There's a washer machine that comes off every four seconds out of there.
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Come back to another like four or five minutes. I beg to differ with her right there. She said it was a
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recession in 18 and 19. 19, the fourth quarter of 19 was world on fire in a good way. Jim Rickards
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is going to join us here in a moment. EJ, so President Trump on Tuesday, he just sent out a true social,
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4% on Mexico, 25% on Mexico, 25% on Canada, two of our largest trading partners. And I don't know if
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China is a partner or we're in complete submission to them since the trade deficit is so massive,
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but 10% on them. Your thoughts? Is Peter Navarro right? Is this a total geoeconomic
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reset for the United States and looking at this as a premium market? Because he's not putting a 25%
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tariff on an avocado coming from Mexico. He's not putting a 25% tariff on a component part under the
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hood that gets shipped down from Canada into Detroit to go into a car engine. This is across the board.
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So is this bigger and is this really national security or are his critics right? Is this going
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to trigger a massive recession? Well, Steve, there's certainly no way it triggers a massive
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recession, although that is very much the fear in Canada and in Mexico. We forget that the trade
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between our countries is not in any way equal. What I mean is that if you look at all of America's
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exports, only a few percentage points go to a country like Canada or a country like Mexico.
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Whereas almost all of Canada's exports, almost all of Mexico's exports come here to the United
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States. And so if they really want to go toe to toe with Trump on this one, if the president of
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Mexico or the governor of Canada says, all right, let's do this trade war thing, then what will
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happen here in the United States will basically be like an economic speed bump, but it will be a
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probably a full blown recession for a country again, like Canada or like Mexico. This is where
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Trump's approach to tariffs is so much more like McKinley's than Hoover's. McKinley had an almost
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scientific approach. It was a very strategic approach to conducting tariff policy. Whereas
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with Hoover, it was a shotgun style, almost random approach in the infamous Smoot-Hawley tariff act that
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infamously made the Great Depression even worse than it already was at the start of the 1930s.
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So, you know, what would the actual effect be? Let's remember that there are a lot of elasticities
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to deal with. There are fluctuations in the relative value of currencies. In other words,
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exchange rates. What I'm getting at here, Steve, is the fact that if you put a tariff on a certain item,
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the actual cost of that tariff is never passed entirely on to the consumer. The producer always
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ends up eating some of the cost of that tariff. We famously saw this during the first Trump
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administration that Peter Navarro was just talking about, wherein about 80 percent of the cost of the
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tariffs we were imposing on the Chinese were simply eaten by the Chinese manufacturers.
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They couldn't afford to pass the full freight on to the American consumer in the form of higher
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prices because the American consumer would choose alternatives. You know, we didn't have to buy
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steel from China, for example. We could buy it from a domestic producer. We could buy it from
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another foreign producer like the ones in Sweden. And so in order to remain competitive, it forced
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these Chinese exporters, again, to eat most of the cost of that tariff. And we have every expectation
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that that would happen today. And then one further thing, Steve, if I may, you know, things like a 25
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percent tariff rate on Canada, that's perfectly reasonable when you think about reciprocity because
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they, the Canadians, already impose about a 25 percent tariff or the equivalent thereof once you
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consider not just tariffs but also non-tariff barriers, think things like quotas, that they have
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on, you know, American dairy, American automotive parts. And so that is essentially an implicit penalty
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on Americans, whether it's an American farmer, dairy farmer, or an American factory worker.
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And so what the president is trying to do here is level the playing field for the American worker,
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for American exporters, so that we can actually compete on the world stage and make it a level
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playing field. Jim Rickards, I want to bring you in your thoughts on President Trump's this. It's
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really a geo-economic and geo-strategic reset on this, and particularly when you look at tariffs. He's got a
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different economic model. He sees the United States as a premium market, and if you don't,
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if you can get around tariffs by shipping your, putting your manufacturing here and hiring American
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citizens at good wages, or you can pay a premium like you would buy a, you'd get a skybox for a
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sporting event or a front row seat for a concert, sir.
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Jim, I agree with that, Steve. And I disagree with E.J. a little bit on the difference between
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McKinley and Hoover. Whether tariffs are a good idea or not depends on whether your economy is in
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surplus or deficit. If you're running a trade surplus, don't put tariffs on. But if you're
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running a trade deficit, absolutely do it and help create, exactly as you described, high-paying jobs
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at home. Say to the foreign trading partners, if you want to sell to the United States, that's fine,
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but you've got to build it here, put your investment here. Right now, of course, the U.S. is
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running a huge trade deficit. So tariffs make a lot of sense. And as far as the reset is concerned,
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yeah, it's a reset. But it's a reset to something that we had from 1790 to 1962, which was the
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American system. Alexander Hamilton, Henry Clay, Abraham Lincoln, McKinley, Eisenhower, they were
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all on board. So we're going back to really what we had to most of American history. But the problem
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with Hoover is not that tariffs are automatically bad. It's that the U.S. was a huge surplus country at
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the time. So it depends on the initial conditions. But the initial conditions right now are right for
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tariffs. Describe, this is so important, the American system. There's a document that is,
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I think, almost as important as a constitution, the Declaration of Independence by the first,
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by the Secretary of Treasury, Alexander Hamilton, who came out and put forward, our first Secretary
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Treasurer put forward a report on manufacturers, right, that has resonated down the ages to people
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like Henry Clay, people like Abraham Lincoln, the American system. Can you just take a second to
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describe it? Because that's essentially how the country basically ran until globalization,
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until the high priest of globalization on Wall Street. And it places, I went to the West Point of
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Capitalism, the West Point of Globalism, Harvard Business School, which all they preach was
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globalization. But describe to people what the American system is.
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Sure. Well, first of all, it did start with Alexander Hamilton. Alexander Hamilton and George
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Washington took, I'll call it, a field trip out to Passaic, New Jersey. And they looked at all these
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waterfalls, which are there. It's a natural resource. And they said, perfect. This is, you know,
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at the time you use water to run mills, to run water wheels and so forth. That's how you powered
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industry. And they said, this would be perfect for, you know, textiles and so forth. But you had
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to put up tariffs to protect the U.S. industry. We were kind of, you know, in our infancy at the
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time. And that was, now there was, it was an opposition party that was Jefferson, Madison, and
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Monroe. And Monroe, you know, Jefferson and Monroe in particular, they were the, they were the agrarians.
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They represent the Southern interests, actually. This is one of the, not the main one, but this is one of
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the things that led up to the Civil War, which was the South opposed tariffs. They needed imports and
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the North favored tariffs because they wanted to, you know, encourage industry. And they, and they
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did. But that's, that system, you know, basically the, the, the, the early Republican party, which
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was Thomas Jefferson was pushed aside. And again, Henry Clay was the champion. John Quincy Adams was
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another one. This thread ran through all the way through American history with very few exceptions.
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And the, the real turning point was 1962. That was the, uh, the trade act of, uh, trade reform act of
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1962 when we lowered our tariffs unilaterally. And then we went through multiple rounds of, uh, you know, the
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Kennedy round, the Tokyo round and so forth. And, but the U S today acts as the consumer of last resort.
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We sit there to the world and say, Hey, sell us all your stuff, cheap labor. And by the way, uh, you know,
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Ricardo himself admitted, he was wrong about the theory of free trade comparative advantage,
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comparative advantage works in a classroom, but in the real world, the factors of production,
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the inputs are portable. So you may start out with some comparative advantage, but if capital can go
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where it wants and it does, and if cheap labor is waiting for you overseas and it is, then the,
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the comparative advantage comes out of thin air. Look at a Taiwan semiconductor. What was Taiwan's
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comparative advantage in semiconductors in 1978? Zero. They had comparative advantage in tuna fishing
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and a couple other things. They created it out of whole cloth. They basically got the capital, got the
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educational system that if you wanted to leave Taiwan semiconductor and go start your own company, they
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were like, that's fine. Let's kind of create that act, that, uh, ecosystem. So, so the point being
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comparative advantage, the theory of free trade falls down because the inputs are portable. Once you realize
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that, you have to say, okay, what can we do to prevent having all of our industry over intellectual
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property, uh, and jobs stripped away? And the answer is tariffs. Uh, and you mentioned, I think
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in the month of December, it was the, it was a, uh, it was a record trade deficit with China. Let me play
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the Caitlin Collins. I'm going to get EJ in here before he has to bounce and come back to you, Jim. Uh,
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let's play the Kate, let's play the Caitlin Collins quickly and get EJ's response on this.
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You just talked about how important the work that Elon Musk is doing is if you pass a continuing
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resolution, won't that just refund all the programs that he says he's cutting that are full of
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waste, fraud, and abuse? No, look, you can, that's why I say you add anomalies to a CR. You can increase
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some spending, you can decrease some spending. You can add language that, that says, for example,
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the dramatic changes that have been made to USAID would be reflected in the ongoing spending. Uh,
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it would be a clean CR mostly, I think, uh, but with some of those changes to, uh, to adapt to the
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new realities here. And the new reality is less government, more efficiency, a better return
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for the taxpayers. And I think that's something everybody should welcome.
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What he said earlier also was about the, uh, was about the Democrats trying to put restrictions on
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President Trump on all of this. Uh, maybe we can play the whole thing for Jim if we can put it
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together. Uh, EJ right there and not clean CR, but anomalies. What, what do you, what do you
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anticipate? What do you anticipate, uh, happening here? Because as you know, this audience doesn't
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like kind of omnibus CRs, but they're, they're talking about anomalies where you're actually going
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to allow the doge cuts to go through, sir. And Steve, I think that makes a lot of sense,
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right? You should be counting all of these savings when you're trying to compute, okay, what is the
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actual, uh, cost of this legislation. They should be counting things like, uh, future revenue from
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tariffs, for example. And all of these things can be used as quote unquote pay-fors to help cancel
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some of this supposed costs, according to the CBO from extending the, the Trump era tax cuts,
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the Trump tax reform. So I, I think it's a very good thing that they're going to help incorporate
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some of these wins in terms, in terms of cutting government, that they're going to incorporate some
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of that into the CR and say, okay, this is the new baseline, right? We are cutting out all of
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these instances of abuse, of fraud, of waste, something, which by the way, both parties used
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to preach. Let's not forget. It was Bill Clinton of all people who got up to the microphone and said,
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the era of big government is over and was constantly railing again against abuse, fraud,
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and waste within the federal budget. Now, whether or not he was true to that, that's a whole nother story.
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I know, I know Bill Clinton lying. It's a shocker, but whatever the case, at least the Democrats used
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to pay lip service to this. Today, it is shocking how many of the people in Congress get up to the
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microphone and rail against all of these cost savings, all of these ways in which we are clawing
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back Americans tax, Americans tax dollars. EJ, what's your social media? You're coming a little hot on
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Twitter. I think it's fantastic. You got great information, great charts, great analysis. Where'd they go?
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Best place to find me is right there on Twitter or X, you know, whatever we call it these days. The
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handle is at real EJ and Tony. EJ, love you, brother. I hope we got either EJ is going to go in and
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we'll lose him as an analyst and a contributor, or he'll be the smartest guy out here talking about
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the details of the budget and inflation. Jim Rickert's next. Have you seen the news from
00:15:01.600
economists forecasting a depression? I'm not talking recession. I mean depression by the year 2030.
00:15:09.360
We're in a perfect storm as Social Security and Medicare hit a breaking point with the largest
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generation hitting retirement. A smaller workforce means a smaller tax base. Pair that with our growing
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national debt and rising cost of living, and you got a problem, and I mean a big problem.
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Okay, with everything else out there, and I think we're getting some clarity now on the CR,
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which I'll be able to go into in a little while, and also the taxes part and other parts of this
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reconciliation bill. And this is quite important because this is going to lay the foundational
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element for the Trump presidency. And remember, President Trump's always about energy and getting
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a foundation, a strong foundation for economic growth and opportunity. Jim Rickards, one thing
00:17:15.180
that stands in the way, and you know, we've had the Birch Gold guys in here. You know Philip Patrick
00:17:19.900
very well. He thinks the world of you. Read your newsletter, Strategic Intelligence, which you can
00:17:23.660
get by going to rickardswarroom.com. You can get Strategic Intelligence, but you can also see all the
00:17:30.860
specialty newsletters Jim puts out, and you get this amazing book about artificial intelligence
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and capital markets, which I will tell people will come as a shock to you, but it should be read.
00:17:43.100
Jim throws it in for free. Jim, there's all this situation where the Bank of England, like,
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is delaying delivery of physical gold for certain transactions. There's also all this discussion,
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I think, of 20 metric tons or something that has been shipped from Bank of England and other money
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center banks in London to New York. Those guys are arbitraging, I guess, the difference in price
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in physical gold. And then President Trump, and now he's been pretty adamant about it, that he wants to go
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to Fort Knox and actually wants to see and do a physical inspection and hear from auditors about gold.
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And now he says he's going to take Elon Musk. Now, Scott Besant, who the show knows very well,
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former major contributor, he says, hey, look, they do an audit every year. President Trump,
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we want President Trump to go and they're arranging the visit. How seriously should this audience take?
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Because we know central banks are still buying at record rates. What is wrong? What is up with,
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like, physical gold between the Bank of England, New York, Fort Knox, all of it, sir?
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That's a great question. But we've seen all of this before from the panic of Black Friday,
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1869, and what they used to call goal points in the early 20th century. But yeah, first of all,
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I applaud the President and Elon Musk if they're going to Fort Knox. I think that's great. I think
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it'll be, I call it the mother of all photo ops. But if you've ever lifted a 400-ounce bar, they weighed
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27 pounds. I've done it. I've been involved. But it's like a freeway. It's kind of, it's a lot heavier
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than you think. But they'll go in. They'll look around. By the way, the gold is certainly there.
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I've said that for over 10 years, probably 20 years. But I said it in my book, The New Case
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for Gold. The gold is there. Just think about it. Would the Treasury let the President go to Fort
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Knox if the gold wasn't there? Of course they wouldn't. So they're going to go there. The gold
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is there. I think it'd be great for the American people.
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But hang on. But hang on. But hang on. But hang on. Hang on. I know when I was a small kid,
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my dad would tell me when he was a child back in the 20s and 30s that they would look at a map and
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the map would have pink or where the British Empire was. He said that little country, that little island
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looked like it could control the world because it looked like half the map was pink. He also said
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the standard back in those days was the Bank of England. So I hear you that the gold is there.
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But how do we have a situation where something is supposed to be so solid as the Bank of England,
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you've now had, and it's been verified by the Bank of England, some problems with actually
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completing trades. They need delay because they can't get the physical delivery of gold, sir.
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Well, here's the thing. Blythe Masters, who ran global commodities for JP Morgan for a very long
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period of time, she knows more about this than anyone. She's left the bank and on to other things.
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She had a quote, just a couple of words, and I found it on the internet. I verified it,
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but then it kind of disappeared. It got scrubbed. But she said, gold never settles.
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And what that means is that the amount of paper gold transactions, gold futures, gold forwards,
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unallocated gold, leasing gold, etc. The amount of paper transactions is easily 100 times,
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probably more, no one knows the exact number, but easily 100 times the amount of physical gold.
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Now, what she meant was, as long as all the longs and the shorts and the lessees and the lessors and
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the paper gold holders and everything kind of roll over their contracts, some get in, some get out,
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it's all good. But if you actually had a situation where the holders of the,
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those who are long, the paper gold say, you know what, I think I'll take physical delivery.
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Call the, you know, the CME or call, you know, the COMEX or call the treasury for that matter.
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Call anybody and say, you know, deliver the gold, please. You couldn't do it. It would be physically
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impossible. So what would happen then, you'd have the greatest short squeeze in history. You'd have a
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mass scramble for physical gold. The price would double probably overnight and then just kind of keep
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going from there. You'd have bankruptcies as various dealers and counterparties failed. Now,
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that hasn't happened yet on that scale. And again, 1869 was the last time something like it
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happened, but, um, but the market couldn't stand up to it. Now we're starting to see signs of that.
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We're starting to see cracks in, in the structure. And the question I have for, for the president,
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Elon Musk, go to Fort Knox. Okay, the gold's there. That's fine. Ask the treasury, and they probably
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don't want to ask this. Is that gold leased? Is that gold leased to JP Morgan, Goldman Sachs,
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city? Hold it, hold it, hold it. Full stop, full stop, full stop. If it's in Fort Knox,
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it's supposed to be the gold of the United States of America and the United States treasury. Is it?
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And that's why U.S. troops, it's in actually an army base. And of course the base is a little
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separate from the gold depository. Right. But I would assume, and I think people watching this show would
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assume that is a gold of the United States of America. Is it not, sir? What do you mean leased?
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Well, it is. But if I lease my house to you, you can move in and it's perfectly legal,
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but I still own the house. Now, people don't understand gold leasing. They hear the gold is
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leased. They assume that like JP Morgan backs up a truck and takes the gold. No, that's not what
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happened. That's not what happened. The gold is there. The treasury owns it. I want to be clear
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about that. The gold is there and the treasury owns it, but they can lease it out. That's a paper
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transaction. And here's the key. When you're the lessee, you're again, JP Morgan, Goldman Sachs,
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any of the big banks, you have a right of rehypothecation. That means you can lease it
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to somebody else or you can sell it to somebody else on what's called an unallocated basis,
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which is say, yes, Steve, you own the gold, but not really. There are no bars with serial numbers
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with your name on it, but it's a paper gold transaction. But that's my point. It's a long
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chain of paper transactions. Everybody thinks, every lessee, every buyer of unallocated gold thinks they own
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gold. And they do have price exposure, but they don't have the gold. The gold's in the vault where
00:23:39.060
it belongs. But you can actually make money leasing. How could you blame the treasury for
00:23:43.620
picking up a percentage point or two on the gold by leasing that? But the bigger point, the one you
00:23:48.980
refer to, is that the chain of paper gold is 100 times the physical gold. You couldn't possibly
00:23:55.140
settle all those transactions. Now, I don't, by the way, I understand gold leasing. I just described it.
00:23:59.780
I don't know for a fact that the treasury gold is leased. I suspect it is. I don't know that. To
00:24:05.380
me, it's a question, but it's a question that the treasury may not want to answer because the
00:24:10.260
minute you realize it, that's how much that's supporting.
00:24:13.780
Isn't what you just described with hypothecation, where essentially you're breaking off from the
00:24:20.180
physical reality of it and the ownership of it, ways to monetize certain paper transactions,
00:24:26.900
right? You hypothecate it. Isn't what you just described in that chain of custody,
00:24:31.780
chain of events, who everyone's leasing, all of that, much like fractional banking,
00:24:37.380
which people say, how can this happen? It is wrought with potential risk that if the music ever stops,
00:24:44.420
right, the people in the hypothecation chain, just like the fractional banking
00:24:49.460
uh, situation like at, uh, at, uh, at, uh, Silicon Valley bank that they end up, uh,
00:24:56.260
they end up holding it, particularly like, uh, depositors or people, there's some person that gets
00:25:00.980
stuck if the music stops, sir. Sure. I mean, Silicon Valley bank had three, about 3% of their deposits
00:25:08.820
were FDIC insured. The rest of them were completely uninsured. So you're basically,
00:25:13.300
as a depositor, you're, you're an, uh, uninsured, uh, creditor of a, uh, uh, insolvent institution.
00:25:20.020
So, um, that's exactly right. Except fractional banking, they at least require maybe five
00:25:24.740
up to 10% capital in different flavors. And the rest is leverage. We're talking about a market with
00:25:30.500
maybe 1%, probably less. In other words, leverage 99 to one. Uh, and that, that is the issue. Now,
00:25:36.660
even in the, uh, just take the futures exchanges, the conex gold futures contracts,
00:25:40.980
they have a vault and there's physical gold in it. And if I'm long a futures contract,
00:25:44.820
I'm allowed to put in notices. I'd like to take physical delivery, but I'm enough of a geek. I've
00:25:50.740
read the rule books of all these exchanges. They all have a rule in the rule book that says we can
00:25:54.580
change the rules and they tell you, we are not a source of supply. So they just let you take physical
00:25:59.540
delivery just a little bit to keep everything honest. But if there were ever a massive wave of
00:26:04.420
notices, Hey, I'd like to take physical delivery, they would, they would say trade for liquidation,
00:26:08.340
although you're not getting that gold, you're not getting that physical gold. There is not enough.
00:26:12.020
That's just the futures market. Then again, there, there's unallocated gold, bank gold,
00:26:16.660
gold leasing. This is huge market. Uh, and this is what life masters meant when she said gold never
00:26:23.300
settles. What, why do we have, we got a couple of minutes left. Why do we have a bar, a barbaric
00:26:30.740
relic of our savage past in a day of artificial intelligence? You just wrote a book about
00:26:36.740
artificial intelligence and markets that everybody should read. In fact, you go to
00:26:40.740
Rickards war room.com. You get it. He throws it in as a free, um, a free item if you take strategic
00:26:46.740
intelligence, but you've got artificial intelligence. That's changing really the nature of capital
00:26:52.580
markets because the efficiency and effectiveness of artificial intelligence, and you lay out a very
00:26:57.540
couple of scary scenarios. But why is gold this, this relic of 5,000 years? Why is gold still
00:27:04.980
important and still relevant? Well, I think my experience as a kid may be similar to yours
00:27:10.020
because at the kitchen table, my father used to pull two, uh, $20 bills out as well. And he slammed
00:27:14.980
them on the table and said, look at this. And one of them said federal reserve note, which is liability.
00:27:20.180
That's what, what we call money is actually a liability of the federal reserve. It's not an asset.
00:27:24.340
Um, but the other one said silver certificate. He used to carry it around and he would say,
00:27:28.980
this isn't backed by anything. My father was in the, uh, first place. He was actually in
00:27:32.420
the occupation of China. He fought in World War II, but he was in the occupation of China
00:27:36.180
and they had a hyperinflation there that was worse than Weimar. Again, he's say his marine buddies,
00:27:41.940
they would take a wheelbarrow full of, uh, uh, national Chinese money to get a case of beer.
00:27:46.660
Uh, so I, I had this from like a very early age, the difference between solid money and paper money and
00:27:52.100
leverage. And again, the leverage system works as long as no one challenges it, as long as no one
00:27:56.500
questions it. But the minute you do, it collapses very quickly. And that's where gold stands up. And
00:28:01.780
I mean, gold would, would skyrocket in these scenarios. The problem, Steven, and you referred
00:28:06.180
to it with the bank of England. And, um, I mean, it used to be when they ran the gold corner,
00:28:09.860
when they cornered the gold market, this is, uh, Jay Gould and big Jim Fisk in 1869. When they
00:28:14.820
cornered the gold market, I want, I want to, I want to, I want, I want you to, I want you to tell that story.
00:28:20.420
Okay. Short commercial break. Jim Rickards, president Trump and Elon is going to go up to Fort
00:28:25.780
Knox and, uh, check things out. Let's say that check things out, make sure everything's on the
00:28:31.540
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You know, one of the powers of records book, it talks about artificial intelligence and, um,
00:30:20.820
and, uh, capital markets. Swiker, David, I think it's David Swiker, Arizona, just put in a new
00:30:26.900
bill talking about artificial intelligence and prescriptions. I'm gonna get into this,
00:30:31.540
but AI is we've, this is why we have Joe Allen, artificial intelligence. And, and with Elon,
00:30:38.500
I mean, their theory of the case over Doge, I think is to replace part of it is to replace
00:30:45.060
50% of the federal workers with artificial intelligence, right? This is going to cut through,
00:30:50.820
but this is going to be every, um, this is going to be every industry, particularly folks under 30
00:30:58.020
years old. Those first jobs you get in your twenties, a lot of those lower level entry level
00:31:03.220
jobs in management, administration, and technology. I'm not talking about blue collar jobs in factories
00:31:08.900
or driving, you know, Teamsters jobs, driving trucks or, or driving Ubers or taxis, or factories
00:31:16.340
automation or the automation around our ports. A, the, the first, the sith through grass of
00:31:24.660
artificial intelligence will initially come and it's big in the efficiency moves
00:31:30.900
through administrative managerial and STEM or technology jobs at entry levels and there and
00:31:38.820
above. And then it'll start eating all the way up. Uh, but Jim, people, the gold,
00:31:44.580
one of the things about gold people have tried to corner the gold market before, right? I mean,
00:31:49.220
the Hunt brothers tried to cut it and I think they did for a minute control the silver market back
00:31:55.940
in the eighties. In fact, one of the Hunts is the, uh, is the grandfather of the, of the son that owns
00:32:01.300
the, um, owns the Kansas City Chiefs who used to work for me at Goldman Sachs in LA for a while.
00:32:06.820
Uh, in his training, he's like Boyle, Boyle in journalism, um, Hunt in finance. Um, but people
00:32:15.220
have tried to, to corner the gold market. How, how hard is that, sir? And, and give me the best
00:32:20.820
example you've got of somebody that tried to do it. Um, it's very, it's very hard, but the,
00:32:25.460
the best example was, uh, September, 1869. This is, uh, two of the so-called robber barons,
00:32:30.900
Jay Gold and big Jim Fisk, and they decided to corner the market. Now there was a lot of gold.
00:32:35.780
They were in New York. They, they did basically corner the physical gold supply in New York,
00:32:41.140
but there were two sources of gold that they had to worry about. One was London, but they weren't
00:32:45.140
really worried about that because you had to ship it to the, physically ship it to the United States.
00:32:49.140
That would take weeks or longer. And they knew that that would not come in time to, to break the
00:32:53.540
corner. The other source of gold was the United States treasury. The U S treasury had gold and they had a
00:32:57.460
station in New York. So what they did, they had a middleman who was president grant's son-in-law and
00:33:02.980
he loves his daughter. So they got an audience for president grant. They convinced the president that
00:33:07.620
high commodity prices were good for farmers. So grant kind of naively said, yeah, you're right.
00:33:12.180
He ordered the treasury to stop selling gold. That was the green light because once they knew the
00:33:16.820
treasury goal was off limits, the, the London goal couldn't get here in time. They had cornered the
00:33:22.420
gold market in New York. So they launched the squeeze, which basically means you've sold gold on paper.
00:33:27.140
You don't have it. So you're short. You go to buy it, but there isn't any because they've
00:33:31.060
cornered the market. So this went on for a couple of days and the price of gold skyrocketed. Finally,
00:33:36.820
Sam Brown, uh, Brown brothers Harriman, the original Brown brothers Harriman called the
00:33:41.060
treasurer said, you got to do something. This is out of control. People are going broken.
00:33:44.420
Uh, they called the president and then he said, told the treasury secretary, sell the gold
00:33:48.740
that broke the corner. But the point is you, you really do have to control it all physically.
00:33:52.740
The problem with the hunt brothers, they pretty much cornered the silver market,
00:33:56.260
but they were relying on the futures exchange and the futures exchange at the time, as I said,
00:34:01.460
changed the rules and said, uh, no, no physical delivery in the market. You can only trade for
00:34:05.940
liquidation only. So, so it's hard to do, but, but here's the point. You don't need a good old
00:34:10.740
fashioned corner. You can, you can just have a situation where the who's buying gold, Russia,
00:34:15.300
China, Iran, Turkey, even our friends like Japan, Philippines, Mexico, they're buying all the gold.
00:34:20.100
There's not that much around. It wouldn't take much to cause a buying panic.
00:34:25.940
Well, this is one of the reasons the converging factors why gold is, uh,
00:34:29.220
uh, hitting all time highs every five days. I might want to also mention Jay Gould.
00:34:34.900
How did Jay Gould come up with the idea? He and big Jim Fisk to corner the gold market.
00:34:39.300
You know how it was is financing is actually working as a financier, uh, for the massive
00:34:45.460
budget deficits that were run by president Lincoln and, uh, salmon chase and others,
00:34:51.700
his secretary of the treasury to, to finance the civil war. That's where Google got into the
00:34:57.220
Senate. A bunch of scandals with Jay Gould and others of these newer New York city financiers came
00:35:02.260
down there and saw that, you know, we were thrown all in to win militarily, had a massive defense budget,
00:35:08.020
which we had never had before. And the corruption that came in there and particularly guys that he,
00:35:12.980
he conceived of these ideas by seeing how rickety the system was down in Washington,
00:35:19.300
D.C. as president Lincoln and, and chase and, uh, and, uh, and others on that war cabinet ramped up
00:35:25.620
to defeat the Confederacy in, uh, in the, in the epic civil war, the financing of the, there's an argument
00:35:31.780
that one of the reasons the South lost is that they just, uh, they didn't finance it correctly.
00:35:35.700
They couldn't actually raise the money. So Jay Gould, one of the worst characters or best
00:35:40.740
characters, depending on where you come down, if you're libertarian, you love him.
00:35:44.020
If you're a patriot, he's a guy that's a little sketchy, uh, Rickards, how do people get to your
00:35:48.740
newsletter? Strategic intelligence. You're, you're, you're brilliant. You've got tons of experience.
00:35:53.060
Audience loves when you come on, where do people go to get the newsletter?
00:35:57.380
Thanks, Steve. We have a landing page called Rickardswarroom.com.
00:36:00.900
It's Rickardswarroom.com. You go there, you can subscribe to our new newsletter,
00:36:05.460
Strategic Intelligence. But we have a free copy of my new book, Money GPT, uh, basically
00:36:10.180
looks at artificial intelligence, which is not intelligent at all. It's all math. It's just
00:36:13.940
math and nodes. But I explained all that, you know, in, in, in plain English. Uh, but it's the,
00:36:18.580
it's the interaction of artificial intelligence, which is math and human nature, which hasn't changed
00:36:23.540
in 5,000 years. That's extremely dangerous. Now I'm not bashing AI. It is powerful. It is efficient,
00:36:28.820
but there are hidden dangers. And I talk about those dangers as they relate to the stock market,
00:36:38.020
Yeah. Like I said, this was one, don't read before bedtime, because bedtime will be delayed.
00:36:43.140
It'll keep you up. Rickards, we love you, brother. Everybody go to Rickardswarroom.com,
00:36:48.020
the landing page, get the free book, plus you get access to strategic intelligence. Thank you, sir.
00:36:54.100
Thanks. Okay, folks. Uh, we're not manning the ramparts today, but you're thinking through,
00:37:01.700
we're going to think through together and with the president of the United States, what this is,
00:37:05.860
I want to go back. I want to play the, I want to play the Caitlin Collins in its entirety,
00:37:11.060
because you're going to see what one of the hangups are. The Democrats are their number one
00:37:16.020
objective, which always before was to keep the government funded and keep the government going.
00:37:20.420
Because remember, they're the party of big government. Uh, they've had kind of a shift,
00:37:25.700
because there's a guy in the White House called Donald J. Trump, and he's supported by a, uh,
00:37:30.980
a folks in this country that wear the MAGA t-shirt. So they're not so hot on this. Let's play it.
00:37:36.420
We're going to set the strategic context of the firestorm that's going to be before us in the days
00:37:42.420
and weeks ahead. Let's go into it balances out. And we will. None of that's guaranteed. We'll see
00:37:47.060
what those numbers look like. Did Elon Musk approve of the blueprint that you passed last
00:37:51.380
night? Did he think there were enough spending cuts in there? Well, we haven't gotten to that
00:37:56.100
yet. These are, these are numbers, a floor, at least 1.5 trillion in savings that we're going to
00:38:01.300
find, uh, and trying to get higher, maybe 2 trillion or higher. Um, it's a start. Look,
00:38:07.140
you don't turn an aircraft carrier on a dime. It takes miles of open ocean to turn an aircraft
00:38:11.380
carrier. That's what the U S economy is. It took decades to get into this situation,
00:38:15.140
but we are going to begin to bend that curve. It's a great thing for the country.
00:38:18.260
I was just curious since you met with him after, uh, after this happened, uh, speaking of, you know,
00:38:22.500
deadlines that are a lot sooner than what you're talking about, there's a shutdown deadline that
00:38:25.540
is looming on March 14th, which you well know. Do you think Congress is going to end up passing
00:38:29.700
another continuing resolution then? Well, look, I wish we didn't have to, but it looks like the
00:38:34.420
Democrats are trying to push us into that. They've added these really crazy conditions onto the
00:38:39.300
negotiation over the last week or so. They've added a condition that says we have to tie the
00:38:43.700
hands of president Trump, that the legislative branch would, they want us to dictate to the
00:38:48.580
executive branch. For example, a base number of employees for each agency in the executive branch.
00:38:53.860
I don't even think it's constitutional what they're requiring, but it's certainly, uh, an absurd
00:38:58.340
notion, but they're standing by that. So CR go. Do you believe if, well, we haven't negotiated that
00:39:04.180
yet, but if it's a CR, it may be an entire year long CR with some anomalies on it. You know how
00:39:08.420
all this works, but it's not what we prefer. We would like to do individual appropriations bills,
00:39:12.980
but it takes post both parties to negotiate that. And right now the Democrats are trying to,
00:39:18.020
it looks like trying to set up a government shutdown. We can't allow that to happen.
00:39:21.380
And we won't. Well, you just talked about how important the work that Elon Musk is doing is
00:39:25.220
if you pass a continuing resolution, won't that just refund all the programs that he says he's
00:39:29.620
cutting that are full of waste, fraud, and abuse? No, look, you can, that's why I say you
00:39:34.660
add anomalies to a CR. You can increase the spending. You can decrease the spending. You
00:39:38.900
can add language that, that says, for example, the dramatic changes that have been made to USAID
00:39:44.420
would be reflected in the ongoing spending. Uh, it would be a clean CR mostly, I think. Uh,
00:39:49.780
but with some of those changes to, uh, to adapt to the new realities here and the new reality is
00:39:55.140
less government, more efficiency, uh, better return for the taxpayers. And I think that's something
00:40:00.100
everybody should welcome. Okay. Let's interpret because this first time has been said, I think,
00:40:05.620
publicly and Caitlin Collins, uh, I think did a good job there in trying to draw it out of them
00:40:09.460
only months after the war room, but that's fine. Um, the Democrats, we go back to the, uh, the, um,
00:40:18.660
unitary executive theory, uh, where the executive is chief executive commander, chief and chief
00:40:26.500
magistrate has these powers enumerated by the constitution or laid out by the constitution.
00:40:34.180
Right there, Johnson told you that in the negotiations on a CR, whether it's a 30 day
00:40:39.620
CR or to the end of the year, or I would actually think in appropriations, if we did it with the
00:40:47.060
single subject, which is what we want, which they haven't done. And Johnson can't put all of that on
00:40:51.380
the Democrats. He's only done seven of the 12, but that's kind of, we've kind of blown past that
00:40:56.580
folks. What he's saying is the Democrats are going to sit there and say, no, we're not buying off on
00:41:03.860
Trump having these powers and I can buy off on his, on his new buddy, Elon Musk having these powers.
00:41:08.500
We're not going to do it. We're going to, we're going to basically set a base case of employees.
00:41:12.820
And I think programmatically bottom line, there's not, there's not going to be a CR unless you get
00:41:18.980
100% of Republican votes. And as we know, and this audience knows, there's at least 40 to 70 votes
00:41:26.580
in the house and the Republican side are saying, we can't do this again. This is a tantamount to
00:41:31.300
another omnibus. We're not going to do this. What he's saying about anomalies is it won't be a clean
00:41:38.420
CR. It won't be a one-liner. The anomalies will be, because remember I said, hey, you're going to have
00:41:44.340
to eat. It's Biden's budget. It's $2 trillion deficit and none of the doge cuts and what she
00:41:49.380
just said, not that not only the doge cuts, not in there, you're financing the negative. You're
00:41:54.500
financing USAID. So he says, there's going to be anomalies. That's going to be in the actual CR itself.
00:42:03.380
In addition, and this is why we had Tietzel kind of last man standing. There's only a couple of guys
00:42:09.700
over CRA, they're staffing up again because so many of their people are in the administration.
00:42:14.340
Jeff Clark yesterday going to go in as the anti-regulation chief. God bless that. That's
00:42:19.540
amazing. Pay a letter over at OMB as the chief counsel. Dan Bishop's about to get, I think, about
00:42:25.940
to get confirmed, the great Dan Bishop, the congressman, and Russ Vogt with Scott Besson and
00:42:31.460
you know, Jason Treniter, Treasury, Alexander Preet. You got Treasury, you got OMB.
00:42:35.620
And what they have said is that, hey, war room posse, MAGA movement, even on the CR,
00:42:44.020
the impoundments will start shortly thereafter. The impoundments will start. So we're heading,
00:42:52.420
and this is why I had Josh Hammer kind of start the show, folks. Get ready. Not today, not tomorrow.
00:43:00.020
tomorrow. We got to get more details. You need more information. You need to be fully loaded on
00:43:05.380
this one because this sets, as I said, this sets a series of events. This critical path will set a
00:43:13.700
series of events that will go all through the reconciliation, all through the taxes, all through
00:43:19.220
everything President Trump's trying to do. Remember that middle corridor, that middle vertical is the
00:43:23.940
financial and economic crisis that's so important, that's existential to the country and to his
00:43:30.100
presidency, his second term. You have the two things on the side, stopping the kinetic part of the
00:43:35.700
Third World War. Oh, did I mention that the British Prime Minister is about to show up about stopping
00:43:41.780
the war in Ukraine? And President Trump way down the road and stopping the war in the Middle East.
00:43:48.180
And in addition, the deportation securing the border. The border has been kind of secured.
00:43:55.780
Deportations in the top couple of batters in the first inning. But that middle vertical,
00:44:02.340
game on in the nation's capital with President Trump in the MAGA team. Short break.
00:44:07.620
What if he had the brightest mind in the war room delivering critical financial research every month?
00:44:14.260
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00:45:20.100
Okay. What I just laid out is kind of everything, and we're going to frame it more and make sure
00:45:31.540
you're fully up to speed and fully understanding this, because this, between now and the 14th,
00:45:35.720
is going to be big league. And it's going to set the, it's going to lay the predicate. And you just
00:45:42.440
heard, and Grace, I'll get it cut. Grace will get it cut. I'm going to play it again on the six o'clock
00:45:47.780
show. What E.J. and Tony said at the end of the first hour, that three or four minutes is reality.
00:45:53.720
I don't believe the White House is doing enough, and we'll do it, but to get out what the actual
00:45:59.100
position of the American economy is. You saw from these numbers today, the inflation number for the
00:46:06.200
fourth quarter was 4.2%, not 2.2%. As the Biden regime said, the Biden regime, every number they gave
00:46:12.000
you had to be reset, particularly in labor. We've gone through that. But this thing is not good right now.
00:46:17.180
And President Trump was handed a disaster. And it's going to take some real leadership,
00:46:23.120
some real discernment, and just flat old toughness. This is going to be painful. It just is. It just
00:46:32.360
is. You don't spend this much money. You don't get this messed up. It's $175 billion they want for
00:46:39.280
the deportation program. Like, what happened to the infrastructure? Where'd it go? $175 billion?
00:46:45.340
Do you understand the scale of that? The breathtaking scale of that? It's across the board. It's
00:46:49.240
everything. This is also China. On Tuesday, President Trump just said a China 10% tariff.
00:46:57.120
Hey, Jace Medical, this is the reason they're a sponsor of ours, because they know we understand
00:47:02.420
this. Rosemary Gibson and the whole thing about the supply chain. You've been warned. So go to the
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site and just check it out. The Chinese Communist Party are just not going to sit there and take that.
00:47:12.840
It has to be done. What President Trump's doing is smart. It's timely. We've got this, we've got
00:47:19.600
this trade deficit was 100, I think the trade deficit was $100 billion in December. And they're
00:47:24.540
blaming, oh, getting ahead of the tariffs. That's not the case. Totally different. JaceMedical.com
00:47:29.900
slash Bannon. Go check it out today. Go to the site and get Dr. Sean. Those guys are all open
00:47:35.080
to talk to you. Also, MyPatriotSupply.com. I think now's the time to think through,
00:47:41.480
hey, you know, it used to be the preppers were considered kind of kooky or wingnuts. Not anymore.
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You got to get ahead of the game here. MyPatriotSupply.com, the best company in the
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preparation business. They got consultants on the phone that walk you through all of it. That's one
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of the reasons we love partnering with these companies that give you access to information.
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We understand the Warren Posse wants to see the receipts and your power comes from using
00:48:05.520
your agency when you get those receipts. That's what's going to have to happen over these next
00:48:11.160
days and weeks ahead. We're about to pivot into some tough stuff, folks. It's going to get,
00:48:15.520
it's going to get gnarly. Just is. They're not the votes there now. I mean, as it sits today,
00:48:22.840
just given where we are, you know, President Trump's government will basically shut down at right
00:48:28.200
after midnight on the 14th, unless we get through a very tough political process in the CR.
00:48:35.160
And President Trump, I think it's going to make the case. I think you'll hear some of this today.
00:48:38.660
At the same time, he's trying to bring peace to the Eurasian landmass. Charlie Kirk's going to
00:48:44.940
follow us. You're going to have Sir Keir Starmer show up, the prime minister of the United Kingdom.
00:48:51.940
He's a labor guy, leftist. There'll be a lot of activity this afternoon. There'll be the press
00:48:56.700
conference. Natalie will be here at five. I may dip in and out of that, but I'll definitely be here at
00:49:02.220
six to make sure we go through, you know, what is important from today. And a couple of things I
00:49:09.180
think have been missed in all this. Number one, that chat, I'm getting Colonel Fennell, Captain Fennell
00:49:14.700
to join me from overseas to go through what's happening. These intelligence agencies, these people in
00:49:19.240
these chat rooms, and his point, because he's spent his career in naval intelligence, how he gets
00:49:27.180
beyond just intelligence. How legal is this? Anyway, tons are going on. Roger Kimball, one of the
00:49:31.540
smartest guys, is going to also join me where I go through this day. Another historic day. Tamara
00:49:35.960
Zelensky, President Trump, doing it all. And we're, and I got to tell you, I'm so impressed with EJ
00:49:42.240
and Tony. You know, he's one of the guys that are trying to get in, and I'm saying, hey, we got to have
00:49:45.140
some guys on the outside, can help explain this stuff. That four minutes, and I'll cut it and make
00:49:50.500
Grace from Schwerber gets it, and I'm going to play it again on the six, was the single best summary in
00:49:55.360
three or four minutes of exactly where the economy stands in the mess that President Trump was handed.
00:50:01.580
Mike Lindell, and folks, you should know something about Lindell. I've gotten to be a personal friend
00:50:05.680
and a colleague and a comrade over the last couple of years, but there's so much, this guy gets
00:50:11.620
attacked more than anybody but Trump. And I say that as a guy that went to federal prison.
00:50:18.460
They're after Lindell much more, and they're after me nonstop. They're after Lindell
00:50:22.460
constantly, constantly, constantly. They feel that his connection, he's kind of a Trump that can connect
00:50:28.700
to a working class audience. And particularly Mike then brings in, because he was saved late in his
00:50:33.780
life, you know, he found God and he found Jesus Christ late in his life. Because you read his book,
00:50:37.980
he was a degenerate, right? I mean, degenerate gambler, you know, drugs, the whole thing. But
00:50:43.820
books, I mean, I meet this guy and I say, you're one of the nicest men ever from me. And man, I read
00:50:47.980
that book, you're a flat out gangster. But that's one of the reasons they're after you, Mike Lindell.
00:50:53.860
They understand your conversion story is powerful. You understand how you live your faith is powerful.
00:50:59.160
They understand the message you are just being successful you are and having a happy,
00:51:04.000
successful company is what they want to destroy. And they're trying to destroy you, sir, Mike Lindell.
00:51:10.200
Yeah, it's horrible right now, everybody. And I've decided this morning after talking to my lawyers and
00:51:16.760
CPAs and the Treasury Department, by the way, the IRS has attacked my pillow. And it's something that's
00:51:24.100
going to affect everyone, most people in this country. And we're at the tip of the spear.
00:51:29.040
I'm going all at them. I'm going after the IRS for what they're doing to us right now.
00:51:34.420
And I'll have full disclosure on that, maybe a full report on that for you all as soon as I'm
00:51:40.640
going to find out everything I can and can't say this afternoon. But as far as I'm going,
00:51:44.260
I'm telling it all. I mean, what they're doing is horrific. And this was when Biden left,
00:51:50.460
he put this little thing in here. Let's start with my pillow. Keith Ellison in Minnesota to go after
00:51:57.480
this has been going on all week, piling on since the president did his great shout out for myself
00:52:04.260
and others that have helped this secure our elections and helped him out. And then Keith Ellison,
00:52:12.740
the day after he went in, all attacking my Lindell Recovery Network and also my Lindell Foundation,
00:52:20.820
Lindell Outreach, all the stuff that I put all the funding in.
00:52:24.460
And it's like, it is very intentional and it's very, and they're going, why are they attacking
00:52:32.040
you, Mike? Donald Trump's already in and thinks, boy, you should get relief now. No, it's even worse
00:52:37.700
now because I think they realize I'm not going to stop until we get to secure elections. And like
00:52:44.480
Steve said, they don't like the fact that it's the American dream and be able to get to find Jesus
00:52:50.560
Christ, my Lord and Savior. They're against all, everything that good stands for.
00:52:57.440
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