00:04:37.000And at the same time, the way it is dealing with problems could be done more smoothly, more cooperatively to produce a less volatile result.
00:04:48.000Zannie, let me ask you, you said we're still, let me ask you about something you know a lot about.
00:04:53.000Because we are, right now, the deadlock, the most important deadlock is a U.S.-China deadlock.
00:04:59.000Where in order to get the world economy to a most-
00:05:02.000Hold on a second. This one's so good, I want to play it separately.
00:05:05.000I don't think that gets to the problem.
00:05:08.000He tells a guy on his own show, that is not supposed to happen.
00:05:13.000And Freed tees it up with that whole, the whole, oh, you got the trade tariffs and trade.
00:05:18.000It's everything they can see of the moment.
00:07:10.000But all predicated upon the U.S. dollar.
00:07:13.000It's the U.S. dollar's purchasing power that continues to drop, that has the nations of the world, the BRICS, Brazil, Russia, India, China, South Africa, plus now Saudi Arabia, everybody else.
00:07:26.000All those people, every one of those central banks, you know what they got?
00:07:30.000Plenty of young people that went to Harvard Business School and can work an HP-12C computer and can do discounted cash flow and say, hey, guess what?
00:07:40.000The American elite are screwing us because they continue to run these massive budget deficits to cover themselves.
00:07:47.000You also simultaneously have the greatest in concentration of wealth in mankind's history starting in 2008 in the financial collapse under the most progressive president in American history, Barack Obama, who was convinced by Geithner and Bernanke and, of course, all of his sponsors on Wall Street, the Lords of Easy Money.
00:08:08.000Oh, you got to bail it out that way. Hell, he's a constitutional lawyer.
00:08:11.000You read David Susskind's book, Confidence Men, Obama tried to make the best decisions he could, but he was overwhelmed by neoliberal neocons who said, guess what?
00:08:21.000We need to do this. We need to bail out everybody except the American working class in the American in the American middle class.
00:08:28.000In fact, since I had Chris Leonard on on Friday writing that new book about the Defense Department, Leonard went back.
00:08:36.000This is why he's so good. He went back to all the all the inner workings of the Federal Reserve.
00:08:44.000Those notes from the governance meetings are only put out 10 years after they happened.
00:08:48.000He went back and read all of them from from 2008.
00:08:52.000It was the governor of of Dallas, the Dallas Fed, who sat there and said, when you go to zero interest rates or negative interest rates,
00:09:02.000it's the working class and middle class are going to get screwed because a little checking account and their savings account, the things that my dad had all his life.
00:09:09.000They have no interest. You have no no ability to have capital formation as a as a working class or middle class people.
00:09:17.000None. He says we're going to do this. He says we're going to bail out the entire system on the backs of the working class and middle class.
00:09:23.000You know what they said? They voted 11 to one. Hey, thanks for your input.
00:09:27.000I think he actually actually actually voted for a couple of times so they could show unanimity.
00:09:31.000But he fought it in these meetings. The entire financial system, the entire financial system rest on your shoulders.
00:09:40.000You're the full faith and credit of this. It ain't the Federal Reserve. It's not the SEC.
00:09:45.000It's not Congress. When people say, well, why is the market here liquid?
00:09:50.000Why do people invest here? Hey, in the city of London, they got the same types of restrictions.
00:09:56.000Basically, we have here in the United States. Go to Singapore, basically the same type.
00:10:00.000Frankfurt, Tokyo, a little different, but about the same. The regulatory apparatus is about the same.
00:10:05.000Slightly different, but about the same. Here, people put their money in.
00:10:09.000They know they're going to get their money back. Why? It's the little platoons.
00:10:14.000It's the little platoons of Burke. It's the associations. It's Little League. It's the churches.
00:10:21.000It's the doctors, the nurses, the first responders. It's everything that makes small town America work.
00:10:26.000That is the backbone of the nation. That is the full faith and credit of the United States government.
00:10:32.000It's you. And let me give you another news flash. You get screwed every day of your life in broad daylight.
00:10:39.000Don't think they're not going up to Scott Besson's office today to work at a deal that benefits you because they're not.
00:10:46.000OK, they're not making any real cuts to federal spending. None with everything.
00:10:51.000And here's here's the tell. You know what the tell is? The debt ceiling.
00:10:54.000Wait to what they asked for in the debt ceiling. It's going to be five trillion dollars. I'm picking a random number.
00:10:59.000It's going to be five trillion dollars. It's going to be in two years.
00:11:02.000So if it's five trillion dollars, understand we're going to go from thirty seven to forty two pretty quickly.
00:11:07.000And they're not going to cut defense spending. We just passed an end of a National Defense Authorization Act at nine hundred billion dollars.
00:11:18.000And in this reconciliation, the big, beautiful bill, they're going to throw another one hundred and fifty billion dollars.
00:11:25.000That's over a trillion dollars. And I love Pete Hexeth.
00:11:29.000But when Pete Hexeth puts out a trillion dollar defense budget, all caps, I'm not feeling good.
00:11:34.000I'm not feeling like I got control of the building. Here's why.
00:11:37.000Has President Trump just not walked us through a complete reorganization, geopolitical, geostrategic reorganization from Greenland to the Panama Canal,
00:11:48.000from the West Central Pacific all the way to the three island chain leading up to East Asia?
00:11:53.000Is that not actually the hemispheric defense of the United States of America that we're finally off the Eurasian landmass?
00:12:01.000We don't have to get into these these endless wars that we've been in that all of a sudden, hey, the Russian army is your problem, NATO.
00:12:08.000We're there to help. But that's your problem. Yes, we'll help sort out the Ukraine.
00:12:12.000I think today just announced there's going to be, I think, May 8th, which would be, I think, the 80th anniversary of what the Russians take as their victory in the great war against the fascists as they will do a ceasefire.
00:12:26.000I think that's what we're hearing right now. But that's all kind of the give and take of daily news.
00:12:31.000The important thing here is that for America to be safe and to get a defense budget that doesn't drive us into bankruptcy because you are not going to be able to touch social programs until you get cuts in defense.
00:12:46.000And people up there right now are selling you a bill of goods.
00:12:51.000Here's the way the math works and the only way the math works. Scott Besson laid it out.
00:12:56.000Six and a half percent. We're at six and a half or seven percent right now of deficit budget deficits to GDP.
00:13:02.000It's not sustainable. The BRICS nations, the bond market is going to get a vote just like Liv's trust got turfed out.
00:13:09.000The bond market is going to reject Ray Dalio and others saying that you're going to have a bond auction.
00:13:15.000Remember two weeks ago we had this big freeze up. The bond market froze up on morning for a moment.
00:13:19.000Then Scott Besson had to oversee a auction of treasuries at these kind of debt figures, folks.
00:13:25.000We got to sell 10 to 12 trillion dollars a year to refinance that debt for years and years and years.
00:13:34.000Remember Dick Cheney deficits don't matter, but they don't matter.
00:13:37.000Those folks are running them at the beginning, but they certainly going to matter a lot.
00:13:42.000If you're under 40 years old, it's going to matter a whole lot because you know what?
00:13:46.000You're no different than a Russian serf.
00:13:49.000OK, you don't own anything and you're not going to own anything.
00:13:52.000You're being buried every day by federal spending that helps the oligarchs.
00:13:57.000This is why you've had this great concentration of wealth, right?
00:14:01.000It's as obvious, obvious, obvious to anybody.
00:15:16.000The company I trust to help you diversify into physical gold is Birch Gold, the company I buy my gold from.
00:15:23.000Birch Gold specializes in helping you convert an existing IRA or 401k into a tax-sheltered IRA in physical gold for no money out of pocket.
00:16:33.000Let me ask you about something you know a lot about.
00:16:36.000Right now, the deadlock, the most important deadlock is a U.S.-China deadlock, where in order to get the world economy to a more stable place, and you wrote this in your post about a beautiful rebalancing between the U.S. and China, you need the two sides to start talking.
00:16:53.000The U.S. says they were waiting for China to call.
00:16:57.000The Chinese say, the U.S. started this, you put these tariffs on, first the U.S. has to reduce the tariffs, then we're willing to talk.
00:17:27.000They produce a lot of goods, more than the United States, Japan, and Germany combined, and manufactured goods, and they put it out, and they save too much, and they buy the dollars.
00:17:39.000We cannot continue this debt-money problem.
00:17:42.000We're at the end of a debt-money world order.
00:17:45.000So how are we going to get the negotiation?
00:17:48.000It is only through cooperation, calmness, and analytical work in which we recognize that these imbalances are unsustainable.
00:18:01.000They're not just financially unsustainable.
00:18:03.000In a world that is near war, that there could be, there cannot be mutual dependencies.
00:18:10.000And so how that is done together is the most important thing.
00:18:14.000Okay, let me ask you about another thing.
00:18:17.000Ray Dalio is the apostle of coupling, right? Coupling.
00:18:22.000We here are the apostle of decoupling.
00:18:27.000Let's go back, whereas I told this economic forum last week.
00:18:32.000Since we, the United States, brought them, and this is after Tiananmen Square, since we brought them out of being an agrarian backward country and actually built their manufacturing capability,
00:18:46.000they have gamed the World Trade Organization.
00:19:01.000Then the Hong Kong situation in early 19th.
00:19:05.000They totally walked away from that, and now they have Hong Kong totally under control as a colony, broke the 70-year deal.
00:19:10.000For two years, two years, Bob Lighthizer, Peter Navarro, sat and negotiated a deal that would have taken what we call the seven deadly sins with Li Hu, the vice premier, for two years.
00:19:24.000And in May of 2019, after they had their first Belt and Road conference, I think in Shanghai, that Putin attended, she and Wang Shishan decided if we do this deal, we're totally coupled both technologically and commercially to the foreign devils.
00:19:44.000And they will never give us the technology we need.
00:21:29.000I give them a list of 200 faculty members and 200 administrators.
00:21:32.000We're cutting off all federal money, all federal money, until they're gone.
00:21:37.000Once they're gone, we'll start bleeding it back in.
00:21:39.000And oh, by the way, all 350,000 Chinese nationals, students that are here in the country, got to leave immediately.
00:21:47.000The Chinese, the independent sources say $600 billion a year are stolen and or forced out of intellectual property through joint festers every year.
00:23:37.000They will fold quicker than the law firms.
00:23:39.000Remember how big shots the law firms were?
00:23:41.000You know, Paul Weiss and Karp, the chairman, and they're organizing all this anti-Trump stuff, and they're going to do this and they're going to do that.
00:25:20.000If in this tax bill, let me be blunt about this.
00:25:23.000The math cannot begin to work unless the upper bracket has a, not a tax increase.
00:25:32.000They just don't get extended the tax cuts they got.
00:25:35.000What this, this is going to be the most, this will be the mass, most massive tax cut for working class and middle class people in the history of the country.
00:25:43.000Extend the Trump tax cuts to 17 plus cut no tax on tips, no tax on overtimes, no tax on Social Security.
00:26:54.000And the games they're going to play is that, oh, Steve, you understand, these conservative wins because over the 10-year cycle, there's one point, I don't want to hear about 10-year cycles.
00:27:02.000I don't want to hear that's required and you have to do.
00:27:03.860That's all completely and totally phony.
00:27:06.280I care about this fiscal year and I care about next fiscal year.
00:27:09.960And, oh, by the way, I want to see where the doge numbers are.
00:27:12.860I'm begging for it to be $150 billion.
00:32:43.780Number one, tariffs mean more external revenue for people who don't shift their manufacturing here.
00:32:49.120And the others will shift their manufacturing here, and you'll get higher, better paying, more stable jobs than you actually build a family around.
00:33:02.660Anybody that has to start off by talking about the debt in the big, beautiful bill right now, I haven't heard anybody except for chip-roaring these guys talking about you've got to make cuts.
00:33:17.220This is the most, the biggest tax cut for working class and middle class people in the history of this country.
00:33:22.700The extension of the 2017 tax cuts for the middle class and working class plus no tax on tips, no tax on overtime, no tax on Social Security.
00:34:19.260We have a too much spending, too big a debt problem.
00:34:24.380If you're under 40, and by the way, you're the lucky beneficiaries of, on top of all that, the $1.7 trillion of student debt, which is these loans are exploding loans.
00:34:35.060I hate to say it, tough break for a swell guy and gal.
00:34:39.900I would love to give you some happy talk, but it's just, if you're under 40 years old, given the economic situation today, the lack of capital formation, the lack of your ability to get into a real asset, right, like real estate, the ability to have any kind of savings or have any kind of capital formation, to have any kind of job that has any kind of stability to it, and not just some glorified gig economy, right?
00:35:04.420You add on top of that, and the increased debt payments, think of when this thing hits $50 trillion, when the debt's $2.5 trillion.
00:35:12.420Excuse me, the interest expense, $2.5 trillion.
00:36:39.680Translate this to the United States of America.
00:36:41.660In 2012, electricity reserve margins here averaged 25%.
00:36:47.240We produced more than we needed to take care of the peak times of summer and winter when it's hottest and coldest.
00:36:54.360Reserve margins have collapsed to 14.5% now, only in about 18 years, because of the mass adoption of these part-time technologies that cost three times the money.
00:37:05.380And, yeah, batteries are great, but they all come from China.
00:37:10.320We're taking in power generation resources that cost 11 times more than basic gas-fired electric power, in solar about three times more costly, battery storage about 11 times more costly.
00:37:23.120And it all comes from China, and we're incentivizing that.
00:37:27.080$42 billion a year of Biden-Ira incentives that continue to this day and are not being attacked in this version of the budget.
00:37:34.180And then, B, makers inside the IRS tax code, accelerated depreciation on this stuff, five-year lives, massively accelerated depreciation schedules, another $11 billion of subsidies that way.
00:37:46.740For Chinese-sourced solar panels, 87% of those in the world are made in China.
00:37:51.92087% of batteries in the world are made in China.
00:38:18.880The ITC investment tax credit, production tax credit, and accelerated depreciation subsidies to wind, solar, and battery storage extended in the Biden IRA that were existent all the last 12 years, including this same administration last time.
00:38:37.820Those incentives were all there then, continue and cost taxpayers $42 billion a year, the tax subsidy portion in depreciation schedules, accelerating depreciation for tax on this stuff, allows another $10 billion a year.
00:38:51.500So $52 billion a year in subsidizing part-time, massively, massively expensive energy sources for electricity that come from China, battery storage and solar panels.
00:39:03.560And hang on, but also, not just the, it's not part of the baseload, but the manufacturing takes place in China.
00:39:12.000So it's $52 billion we're not getting in tax revenues because we're giving a subsidy to support manufacturing jobs in China, correct?
00:39:47.780We've got to get that whole thing sorted because that's the counter to the no rare earths, no magnets, no ball bearings, all that, correct?
00:39:56.440But the energy cost that that kind of equipment produces here, Spain, for example, $0.32 a kilowatt hour, 2.2 times more costly electricity than here, all because they've decided over time to build this second system, new system, on top of the existing one you must have run at night.
00:40:14.700And when it's cloudy, called solar and battery storage, that basically doubles the cost of electricity.
00:40:21.340At $0.35 a kilowatt hour, you won't have any reshored manufacturing here.
00:40:39.740Once the oligarch tech bros, the progressive oligarch tech bros, realize they need power to the 10th degree in the United States, you don't hear anything else about climate change or global warming.
00:40:50.920It's all about AI, and we've got to do the full muscle, right?
00:40:54.700The Western approach, not the deep seek.
00:42:01.680It would have taken a much bigger section of the world.
00:42:04.940Anyway, we need you up on the ramparts.
00:42:07.280As you can tell from this morning, they're going to start negotiating.
00:42:10.260So Scott Besson's got two things going on.
00:42:12.120Number one, he's leading the charge in the process, particularly with the East Asian companies, with Japan and Korea, Philippines, Taiwan, Vietnam, India.
00:42:21.960He's got these deals stacked up over Treasury, like flights over LaGuardia on a Friday night.
00:42:28.900They're trying to bring him in this week.
00:42:30.100I think you may have a couple of terms agreed.
00:42:32.720It'll take months to paper them, but I think you'll have a couple of terms agreed.
00:42:36.040You'll see the architecture of these deals.
00:42:38.780And we'll get down to, remember, I've been showing you this thing about Beijing warns of retaliation against nations doing U.S. deals.
00:42:46.960That's because the center of gravity of these deals will be some sort of, I don't know, basic understanding you're in the American trading bloc or words to that effect.
00:42:58.640Also, at 4 p.m. today, John Thune and the Speaker of the House or in the Treasury Department's office are going to start negotiating on the big, beautiful bill.
00:45:06.660You can see that we're going to be at the ramparts later in the week because a lot is going to be going on.
00:45:11.620Make sure that you don't have the anxiety or angst of having somebody mess with your title.
00:45:17.140The only piece of paper that shows that you have ownership of that thing you called your home, your real asset, which is, I don't know, 80% or 90% of your net worth.
00:45:25.100If you're lucky enough to own one because if you're under 40, you probably don't.
00:45:29.580You want to make sure no AI, cyber, a stray lawyer, a rogue accountant can get to it.
00:46:06.340A lot happened over the weekend besides the funeral.
00:46:10.220A lot of activity, getting ready for the conclave.
00:46:11.920I think it's been designated as May 7th.
00:46:13.800That'll be a pretty big weekend, May 7th, which is the 80th anniversary of the victory in Europe from the Western American and British side.
00:46:32.640But in the Vatican, what is this I'm hearing that a group of cardinals, not all just conservatives or traditionalists, are actually sitting there and making an argument that Francis was actually not legitimate given the retirement of Benedict and many things that happened on that transition.
00:46:50.080And so, therefore, no cardinals that were ordained by Francis should be included in this conclave.
00:47:06.560And I don't want to leak any of the names that I've heard on this show until I've been able to confirm, either with their cooperation or without it, that their presence in these meetings.
00:47:20.820It's a statement that was released – I think Liz Yor might have it up on her getter and on her Twitter – by a guy called Professor Joseph Diefa.
00:47:29.800Now, he was actually a leading member of the Pontifical Academy for Life, which is a great institution founded by Pope John Paul II, and then undermined and almost liquidated by a record of Pope Francis.
00:47:44.880This guy went off and created a rival academy, sort of very principled, coherent person, and unusual for Vatican Consigliere.
00:47:54.980He's absolutely insistent on the non-negotiability of the principles.
00:48:03.880He's released this document, and it's exactly as you say.
00:48:07.260The thesis is – and here's the argument, without going in on this show in the two minutes I've got.
00:48:12.260The thesis is this, and it's been rumbling along, not just, by the way, Steve, in the Francis pontificate, but it's basically been rumbling along since the Second Vatican Council itself.
00:48:22.520The argument is this, that heretics forfeit the ecclesiastical office that includes popes.
00:48:30.780So if Pope Francis has been guilty of heresy either before his election, during his election as pope, or afterwards, he immediately forfeits his papal office.
00:48:53.320The important thing is that Professor Zephardt, one of the most respected theologians living on the planet today, has called on the cardinal,
00:49:00.840specifically citing Archbishop Vigano's research on this, and he's called on the conclave of cardinals before it meets, as you said, on the 7th of May, to thrash out this issue of Francis' legitimacy,
00:49:15.200because 80 percent of this conclave was appointed by Francis.
00:49:18.680If he is illegitimate, his appointments are illegitimate, and then those cardinals cannot be voting in the conclave.
00:49:24.260Okay, we're going to get you on tomorrow.
00:49:27.800You were tied up doing some research for us this morning, and I appreciate that.
00:49:46.880I'm hearing from sources close to some of these cardinals that some of the biggest American donors say, hey, look, you can't give us another Francis if we do.
00:49:55.520The money from the United States is going to—I think it's already dropped 50 percent.
00:52:50.580A classic book, a magnificent film, an Academy Award-winning score.
00:52:54.920We'll see you back here at 5 o'clock tonight.
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