00:03:39.020It shows desperateness and it shows that he's just buying time probably for the midterms, right?
00:03:45.140because the markets and i'm not talking about people like you and me i'm talking about institutional
00:03:51.120traders hedge funds central banks big international money center banks they're saying hey look
00:03:56.100we don't yeah what is jp morgan putting out a bad outlook thing so it means a lot because jp
00:04:03.720morgan basically is the fed i mean let's for all intents and purposes they're the fed so so and
00:04:10.140Goldman Sachs is right up there with him.
00:04:12.500So in all of this, you know, normally when interest rates rise, which is exactly what happened after Scott Bessent made his proclamation that was supposed to lower interest rates, people started and by people, these institutions said, hey, look, we don't care what interest rates are.
00:04:30.020We care why interest rates are the way that they are, which is geopolitical conflict, inflationary pressures, QE on.
00:04:36.740Bingo. So people see desperate moves that signals desperateness.
00:04:40.140signals desperateness now add to this mix friday so friday um kevin warsh the chairman of the
00:04:49.340federal reserve spoke in jackson hole everybody was on nerds like me pins and needles saying
00:04:55.740what is he going to say right what is he going to say about interest rates he said two things that
00:05:01.360that were very important number one the federal reserve has a dual mandate number one is to
00:05:08.100control inflation. Number two is to create full employment. So as an economist, how do you do
00:05:14.120both? How do you control inflation? You raise interest rates. How do you make full employment?
00:05:21.480You lower interest rates. Because think about it. If you lower interest rates, people have more
00:05:26.760money. When people have more money, they spend more money. No, no, folks understand that you
00:05:29.700predicted it all. But the fact is Trump moved heaven and earth to get Warsh in and now he's
00:05:35.040going against Trump. I'm not even defending the Federal Reserve, but because Trump sabotaged his
00:05:40.240own move. Yeah. I mean, if I were Trump right now, I'd be scratching my chin thinking, what in the
00:05:46.660world just happened? I vetted hard to get Kevin Warsh in. I actually appointed Scott Bessent,
00:05:54.560and they're both on opposite sides of the spectrum. Yeah, I don't like the Federal Reserve,
00:05:57.920but I have to agree with them over Bessent. Yeah, which is the ultimate analysis, Alex. So do I.
00:06:05.040So it's like in this battle, how does it play out?
00:06:09.600Scott Bessent wanting to hold up the value of the U.S. bond market
00:07:32.520You know, the energy prices, the straits still close.
00:07:34.860Iran belligerent blowing up our bases last night, Pentagon trying to cover it up, Pentagon sending out emergency messages, even Trump's allies leaking.
00:07:43.120It's got to stop. Trump wants to end it. Israel won't let us end it.
00:07:46.360They're only thinking one dimensionally. This is insane. Dr. Kirk Elliott.
00:07:50.320It's insane. And we have to ask the question, why does Basant want to intervene in the bond market?
00:07:56.920Because if he doesn't, there's no buyers for U.S. bonds.
00:08:00.220The world is de-dollarizing. The bond market collapses. Stock market collapses.
00:08:04.060So we criticize him, but he has to. So he's done that. He has to. But as you predicted before he
00:08:09.720did it, that sent a panic signal. So damn if you damn if you don't. The point is we're out of1.00
00:08:14.700options. We're out of options. So by him doing that and creating stimulus to bail out the bond
00:08:20.560market, which is what he has to do, that creates inflation. What's the role of the Fed? As Kevin
00:08:27.120Warsh said on Friday, to control inflation or to create full employment? Okay, so we have to
00:08:33.520dissect that real briefly. He said unemployment's 4.1% according to government figures, which is
00:08:41.200what they look at, not the reality, full employment at 4.1%. They've already have full employment
00:08:47.840according to him. So therefore you don't lower interest rates to create full employment if you
00:08:52.900already have it. So what's the other option? Raise interest rates to take care of their second
00:08:58.940mandate, which is control inflation. Here's the rub. Besant is creating inflation by basically
00:09:06.660bailing out the bond market. So what is Kevin Warsh going to do? He's got to raise interest
00:09:11.780rates to fight inflation that Scott Besant is creating. This is the battle. And this is why
00:09:18.040Trump is probably saying, I'm not saying I put both of these people in and they're 180 degrees
00:09:22.360opposite. But who's going to win, Alex? Who is going to win? My prediction is Besant is going
00:09:29.220to keep doing what he's doing because he's on Trump's cabinet. He has to bail out the dollar.
00:09:35.840Kevin Warsh, on the other hand, claims that the Fed is independent, right? They don't have to
00:09:41.360listen to what the White House says, even though we know that the Fed is always like doing what
00:09:45.960the white house says they claim independence so therefore he has the final action because he
00:09:52.980compressed the button that raises interest rates or lowers interest rates because percent is
00:09:58.480creating inflation i think by the end of this year you could probably see a rate increases which is
00:10:05.680not necessarily my opinion kevin war said that in the jackson hole speech he said you know what
00:10:14.500probably going to have to raise rates by the end of this year and going into next year what you and
00:10:18.700i have talked about is a lot of rate increases because the inflationary pressures aren't going
00:10:23.400to so trump went to war with jerome powell to get him out of there to not raise interest rates and
00:10:29.720lower them and now the opposite's happening i mean this just didn't didn't trump know when you
00:10:34.740and i and all of a sudden the straight horse moose will do this didn't he understand that
00:10:38.680i mean he he had to have understood that because trump is a smart man he is very smart president
00:10:45.180right but but but here's you've got two people he appointed and they're battling each other
00:10:50.060because they both want to be right right this is the problem they both can't be right in this
00:10:55.680so ultimately aren't we screwed either way aren't we screwed either way0.73
00:10:59.320yeah we're screwed if we continue to create inflation we're screwed if we raise interest
00:11:05.080rates because we have debt up to our eyeballs right the more if we had zero debt as a nation
00:11:10.980well then who cares what interest rates are the cost of debt service doesn't go up this is why
00:11:16.640we are toast either way this is why how do you how do you protect from that well the metals markets
00:11:24.240are telling us that here's here's let me stop because you got to go and i twisted your arm you
00:11:28.740got to the airport you're late to the airport and you are a sponsor you got the highest rating for
00:11:32.940gold and silver sales. So yeah, I'd have you on as an economist regardless whether you're a sponsor
00:11:37.860or not. But look at this. Gold is forecast to climb as central banks buy precious metals. I
00:11:42.660checked this morning. Guys pulled it up. It was $44 this morning. I don't know what it is right
00:11:45.760now. But I mean, I said this morning, I said, I bet it's up. Of course it was. Long-term gold
00:11:50.620price remains supported by commodity-led inflation. Sacco Bank. Traders are hiding
00:11:56.720in basement as gold and Bitcoin roar back to Live Business Insider. So what does this mean