A lot has happened in the last few days, and a lot has changed in just a few days. President Trump has been busy and hard at work, and the economy is not doing so hot either. Meanwhile, the Dow Jones and S&P 500 hit new records and the Dow hit new all-time lows.
01:26:27.680She became clean and sober many years back and got out of that business and started really paying attention to what that business was doing to your business and to Main Street.
01:26:41.540First, let me tell you about real estate agents.
01:26:43.200This is something that I started 10 years ago and I started looking while I was working with the 500 best real estate agents in the country, according to the Wall Street Journal.
01:26:56.560And I was working with them and got to know them and started asking questions because I didn't know anything about the real estate business other than I hated it because I always got screwed.
01:27:06.320And I didn't know what it took to be a good real estate agent.
01:27:09.440You know, it's one of these things they're like, yeah, I do that part time.
01:28:44.900Glad I'm not sure if that'll happen this time around.
01:28:47.020But that would be best case scenario for me.
01:28:48.960Do you think he knows who the World Economic Forum really is?
01:28:55.320I've got to imagine with the people who are in his circle, the same people who are advising him, you know, on WHO, on DEI, on ESG, that I can't imagine how the World Economic Forum doesn't enter into that conversation with that group of people.
01:29:15.280But then again, many things have surprised me over time, and I'm not a betting woman.
01:29:19.200So tell me what you see the president doing this week that you think signals really good things or bad things.
01:29:27.580Well, I think just the general tenor of having problem solvers in the White House and on his team instead of people who are intentionally trying to create problems is a huge, you know,
01:29:40.960what I believe to us, right, is that we're seeing every time he's coming out with one of these executive orders or putting something out there, it's in an attempt to solve an actual real problem that is going to make America better instead of trying to create problems that is making America worse.
01:29:58.800And so that is a very refreshing change.
01:30:01.360Certainly, there are many things to attack, and we all have our wish lists of, you know, how that comes down.
01:30:07.220And certainly some of these things come in partnership with Congress.
01:30:11.120So, you know, the number one thing, you know, on my agenda is to try to get this Corporate Transparency Act repealed.
01:30:17.160So it would be really great to hear him say that that's jettisoned, but I'm not sure if that's coming quite yet.
01:30:22.100Well, that is being introduced by Rand Paul and somebody else in Congress.
01:30:27.640They're trying to get that to go through Congress, which is good, right?
01:30:31.540Okay, so let me give you the update on that.
01:30:33.260So actually, so just to give people context, this is what Glenn and I have been talking about for almost a year.
01:30:39.560It's a rule that is basically coming from the Financial Crimes Enforcement Network Division of Treasury, authorized by Congress, unfortunately, that says that small business entities, so if you have an LLC or an S-Corp or a C-corporation, have to register with the Financial Crimes Division of Treasury.
01:30:58.160And, oh, by the way, we're going to exempt big businesses and we're going to exempt financial services companies, but we really want to prevent money laundering and cartels, so we're going after you small businesses.
01:31:08.640And the biggest challenge, not only is that government overreach, but the fines are egregious.
01:31:13.320You could face jail time or daily fines up to almost $600 a day.
01:31:19.480When was this supposed to go into effect?
01:31:21.140Because I haven't filed anything, nor am I going to.
01:31:23.420Okay, so there is an injunction in place.
01:31:25.420So originally, the original deadline was the 31st of December.
01:31:29.140Then we got this, there are many lawsuits in place, but the one we're focused on is the one from the NFIB and CIR and some other folks.
01:31:36.860And that one got a nationwide injunction put in place saying that the Treasury could not enforce this and they couldn't enforce penalties.
01:31:45.160Well, then that was overturned and then that was overturned again or stayed, as they call it.
01:31:50.340So right now, where we stand is that the government has appealed the injunction, this nationwide injunction that says that you do not have to file right now.
01:31:59.700They've appealed just that piece to the Supreme Court.
01:32:03.140So if the Supreme Court does not overturn that injunction or stay the injunction, as they call it, then this goes to the courts at the end of March.
01:32:12.500So we have a few different paths here.
01:32:53.500We're getting more members of Congress to understand how devastating this is for small business.
01:32:57.440So it's the Repealing Big Brother Overreach Act, perfectly named this time around.
01:33:02.800And what we need is we need everybody to call their representatives, call your senators, and tell them that they're not already one of the co-sponsors.
01:33:10.160They need to jump on because that is just the surest way.
01:33:13.040If Congress is to repeal that, then this is done.
01:33:15.780We don't have to worry about the Trump administration.
01:33:18.120We don't have to worry about anything else.
01:33:19.780And I will have to say, I personally sent an email to Scott Besson at Treasury, so I don't know.
01:33:39.960He did a great presentation at the Manhattan Institute over the summer where he talked about this big tent that the Republicans are creating and how crucial it is for small businesses to participate.
01:34:17.020So we're just we're trying to work all these different angles.
01:34:19.280Right. And I have to tell you, I I like that we are using the system and not necessarily running this through an executive order, which could just be next president could come in.
01:34:29.040And the best thing that could happen is it goes through Congress and they repeal it because then they have to relaunch it again the next time, not just, you know, undo an executive order.
01:34:39.920True. But at the same time, Treasury does fall under the executive branch and Treasury is the one that's putting this out.
01:34:45.680So if Treasury says we're going to jettison it, yes, we could get it back again.
01:34:49.440But it would be a good step that I think would give Congress a lot of comfort in terms of going through with the repeal.
01:34:56.360OK, so let's talk a little bit about China.
01:35:00.060China is I mean, it appeared last week and I said I don't know if I said this on the air, but I said, what happened to China?
01:35:10.460I think it was last week when they really hit some real trouble in the overnight markets and it looks like their banks were collapsing, et cetera, et cetera.
01:35:32.360So it's interesting. I think there are two camps here and the camp that you're talking about is certainly the one that we're hearing more about.
01:35:41.220A lot of people saying, oh, China is going to break and, you know, they're going to they're they're going down.
01:35:46.320They're in this deflationary spiral. Right.
01:36:33.560And historically, you know, last 10 years when there is some kind of issue with the yuan, you would see that kind of showing up in the Treasury market in a very correlated way.
01:37:03.260So if China were in so much trouble, wouldn't everybody be flocking to the U.S. market and wouldn't our yields be going in the opposite direction?
01:37:16.840Yeah, that's a signpost that says, well, maybe it's actually worse for us that this is happening and there's a bigger issue at play than for China.
01:37:25.400Another one of these signposts, same kind of thing, that with China potentially in this really bad situation and maybe you've got tariffs coming down the line, all these things, you would typically think that they would be raising a lot of dollars.
01:37:39.640And to do that, they might be selling their golds.
01:37:49.220So we're getting these decoupling of macroeconomic rules that have been in place.
01:37:55.260And one of the theses out there, and I'll tell you, I'm not a China expert, but from an econ standpoint, I'm listening to all the different takes to see what makes sense.
01:38:05.540You know, we do not have a lot of runway, and I'm sure we'll get into that in a little bit.
01:38:13.100So if things go a little sideways there, they have more options to fix it, or maybe by them going sideways, that has a reverberation that actually sends us and the entire, you know, Western part of the world into a debt spiral.
01:38:28.980So the question is really, who's in a worse situation here?
01:38:34.000And so I think that, you know, the obvious answer is, oh, no, what's going to happen directly with China?
01:38:40.220And I think that the more important thing is what's going to happen with us as a result of what's going on with China.
01:38:46.000OK, so is China now in the situation where we used to be?
01:38:51.660They used to say, if America catches a cold, the rest of the world has pneumonia.
01:38:56.420Are we are we kind of in that situation with China yet?
01:39:00.660So I think it's in a different scenario.
01:39:03.280So I think that from us, it was from a hegemony standpoint that we were, you know, kind of the anchor of the global financial system.
01:39:13.060And so if we caught a cold, everybody else got, you know, a little bit of the sneeze that was sprinkled on them.
01:39:20.560Here, I think it's about what is China doing and perhaps Russia and some of these other countries doing, knowing that it potentially could put pressure on the Western world to create these debt spirals, to create these massive issues, you know, and to create, obviously, a lack of confidence in our currency.
01:39:41.100Which, again, going back to what I was pointing about, about the safe haven of the bond market, that that's no longer the safe haven.
01:39:49.020It does sort of raise, you know, somebody's eyebrow to say, why is that happening?
01:39:54.320And it seems like China, who plays the long game, may be doing it intentionally.
01:39:58.440So I think, you know, we may be catching a cold more in the Wuhan way than in the traditional U.S. way.
01:40:04.880Okay, I want to talk to you about tariffs and what all of that means, because Donald Trump is, well, in comparison to him in 2017 and 2016, he's carrying a big stick and walking softly.
01:40:19.940But that's in Donald Trump world, walking softly.
01:40:23.220He is making some very large statements and has some real plans, and I'd love to get your view on how that's going to affect the real world and how much is negotiating as well.
01:40:40.920We'll get to that here in just a second.
01:40:42.360First, let me tell you about Patriot Mobile.
01:40:44.620Thankfully, we have a lot of people in place to put our country back on the right track.
01:40:49.860People in place, thanks to the new administration stepping in, the battle that has always seemed uphill and almost impossible, looks like it's possible to get over this hill.
01:41:04.920When it comes to the left constantly trying to destroy our country from within, it's hard to stay hopeful, and we look for people that are fighting with us.
01:41:18.260Now, all these businesses are starting to come around and say, oh, you know what?
01:43:01.680Certainly, I think that there are warning signs.
01:43:05.680I will just say, like, from an economic historian perspective, right, that any time we have a shift in the global financial order that is preceded by war.
01:43:15.560So the fact that, you know, the entire global financial system is moving, is on edge, we're seeing these different places, does not sort of pretend well for, you know, geopolitics.
01:43:27.000And you guys have talked about that a lot.
01:43:28.600But in terms of the specifics, I'm not the right guest to define.
01:44:22.660For us to discuss tariffs, you know, I like to inform the audience and give a little bit of context.
01:44:28.240And I don't think we can have the tariff discussion if I don't talk to you about the four horsemen of the financial apocalypse.
01:44:34.040And this is basically my own little, you know, heuristic here about the challenges that the Trump administration faces.
01:44:42.520Thank you very much, Biden and Yellen and that whole administration.
01:44:46.020But the fact is that whether it's tariffs or Doge or anything else we're going to talk about, he is constrained on what it is that he's going to want to do.
01:44:55.380Whether tariffs are not made sense before, there are constraints.
01:44:58.620The constraints are our debt to GDP, which we know is at 120 percent, our deficits to GDP, which are around 7 percent as of the last quarter, the strength of the U.S. dollar, and the fact that, you know, people all around the world, foreigners, own a ton of our assets, which include treasuries, which include stocks and real estates.
01:45:17.680And that, again, with the constraint, as we talked about, of the yields in the bond market, are things that are creating constraints for the tariff discussion.
01:45:27.300We cannot go in like Reagan did because Reagan had a different financial context.
01:47:11.620All you have to do is pick two or more players across any sport, pick more or less on their stat projection, and you can win up to 100 times your money, maybe 1,000 times your money.
01:48:19.960We're with Carol Roth and the President of the United States, who just is, well, he's continuing taking questions now at Davos and the World Economic Forum.
01:49:21.600What the world has witnessed in the past 72 hours is nothing less than a revolution of common sense.
01:49:28.660Our country will soon be stronger, wealthier and more united than ever before.
01:49:33.160And the entire planet will be more peaceful and prosperous as a result of this incredible momentum and what we're doing and going to do.
01:49:42.480So here he goes on to say what he's doing now to confront this economic crisis.
01:49:48.000My administration is acting with unprecedented speed to fix the disasters we've inherited from a totally inept group of people and to solve every single crisis facing our country.
01:50:00.520This begins with confronting the economic chaos caused by the failed policies of the last administration.
01:50:07.720Over the past four years, our government racked up $8 trillion in wasteful deficit spending and inflicted nation-wrecking energy restrictions, crippling regulations and hidden taxes like never before.
01:50:22.560The result is the worst inflation crisis in modern history and sky-high interest rates for our citizens and even throughout the world.
01:50:31.240Food prices and the price of almost every other thing known to mankind went through the roof.
01:50:38.380President Biden totally lost control of what was going on in our country, but in particular with our high inflation economy and at our border.
01:50:47.920Because of these ruinous policies, total government spending this year is $1.5 trillion higher than was projected to occur when I left office just four years ago.
01:50:58.940Likewise, the cost of servicing the debt is more than 230% higher than was projected in 2020.
01:51:07.580The inflation rate we are inheriting remains 50% higher than the historic target.
01:51:13.480It was the highest inflation probably in the history of our country.
01:51:17.320That's why from the moment I took office, I've taken rapid action to reverse each and every one of these radical left policies that created this calamity, in particular with immigration, crime, and inflation.
01:51:49.400He said, uh, uh, we are going to be in America merit based here, that word merit and get used to it.
01:51:59.140Uh, I mean, he's very clear with the world economic forum, exactly in many ways that what I've seen and, and, and now heard from my producers, exactly what I was hoping that he would do.
01:52:09.720So you were talking about Carol, this box that he just really kind of talked about here.
01:52:30.260So this has to be very carefully executed.
01:52:34.600And the biggest concern is that there are people potentially in the organization that want to move quickly.
01:52:41.840And I understand, I want to move quickly too on some of these things, but if we don't sequence them with the right choreography, things could go sideways.
01:52:50.660And I don't know if it completely takes getting better off the table or it creates some pain before things get better.
01:52:57.940And that's really the question is, do you get the Scott Bessett saying, we need to do this in a certain way?
01:53:03.120Or do you get the, no, we need to slash and burn everything because we do have these constraints that he was talking about.
01:53:09.480If everyone could have seen my face when he started talking about the interest rates, you know, I physically winced because that is the huge issue here.
01:53:20.020The fact of the matter is that if you look at the, I guess you would call it, you know, non-discretionary spending of Social Security, Medicare, Medicaid, VA benefits, plus interest, that exceeds by, it's 111% of what it is that we're taking in.
01:53:40.500And so we have a situation where growth is slowing, our receipts are going down, and we keep having these, this big interest, you know, not only because of the debt and the deficits that are being run, but because of changes in the, in the fiscal order.
01:53:55.820We also have Janet Yellen, who decided instead of financing the debt, we talked about this before, you know, for the long term, she financed it at what we call the short end of the curve that for, you know, one month, three month types of terms, which means that now we have almost $7 trillion of debt that needs to be refinanced this year.
01:54:18.680Most of that in the first half of this year, on top of whatever kind of a deficit that we run.
01:54:25.820And that, again, is something that pushes up interest rates.
01:54:29.220And this is where we get, you know, concerned, because we are getting to that level, and not that there isn't a hard and fast rule, but, you know, people in an economic circle say somewhere between 4.8% and 5% on the 10-year yield, where, again, we trigger a debt spiral, we trigger this, you know, chaos in the market, and there needs to be some intervention.
01:54:49.800So my question is, are they going to do the right things first?
01:54:54.820What are the right things that they should be doing first?
01:54:58.240Well, unfortunately, you're not going to like the answer, but, you know, things like weakening the dollar, or, you know, on the good side, if I can come up with something positive, making sure that we're cutting regulations and cutting spending that doesn't impact the GDP to increase GDP first, before we end up cutting off the spending that is adding to the GDP.
01:55:20.740So there are things that are going to happen, but there's a reason why you keep seeing the Fed and others saying, well, maybe 2% shouldn't be target inflation.
01:55:29.900Maybe it should be 3%, because they know that we are going to have higher sticky inflation for longer because of this box, these four horsemen of the financial apocalypse that the Biden administration, you know, cemented and completely took all of these options off the table that were present, you know, many years ago.
01:55:49.280Okay, so I read this morning, I don't remember if it was in a journal where it was, but that Wall Street is actually looking for the economy to kind of spring forward.
01:56:06.760They seem to have some real optimism on what is being happening, what's happening with regulations.
01:56:15.140I mean, he is, he's a, he's tackling those first, which is a good sign, I assume for you.
01:56:22.000He is freeing people up to start businesses and to be able to invest again in businesses.
01:56:30.500Yeah, so right now, the challenge is that we're still seeing that in a very concentrated manner.
01:56:35.500There isn't the full breadth, so this sort of, you know, Trump rebound in the stock market, you know, of recent has been really concentrated in those AI names.
01:56:44.640You're seeing, you know, all these hopes for investment in AI and all of these promises.
01:56:49.300And so tech is doing very well, and we're not seeing it as broad based.
01:56:53.920What we want to see, going back to the discussion about Main Street and Scott Bessent calling out the fact that Main Street really needs to lead growth recovery here,
01:57:04.720And certainly deregulation is going to help that, as well as getting some of this other red tape out of the way.
01:57:11.200It doesn't mean that their job is any less difficult, but the good news is from our side, the things that, you know, the entrepreneurs and business owners and workers can do,
01:57:22.940optimism is very self-fulfilling, Glenn, right?
01:57:25.360Sentiment is important because if you feel like things are going to be better and you're not going to be penalized, you're going to make the investments.
01:57:37.340We shouldn't discount that, and hopefully that will rev up the growth engine.
01:57:41.300The question is, does it rev up the growth engine faster than it revs up the interest rates?
01:57:47.660Because interest rates cannot be higher than our growth rate because otherwise we are, you know, financing, you know, something that is on the decline.
01:57:55.940And that, again, will send us into a debt spiral.
01:57:58.240So we are on this precipice that needs this incredible choreography.
01:58:01.800How is this, how is the country's economy going to be affected by the fires?
01:58:08.840You know, I just read a story today that only three houses have been rebuilt in Hawaii from the fire that happened, what, a year and a half ago?
01:58:20.440And it's because of the burden of regulation that has not been cut.
01:58:26.880Gavin Newsom has put so much onerous regulation on these, on house building now.
01:58:33.580And with his new policies to make sure nobody's gouging, people are afraid to rent their house because they don't know exactly what that means.
01:58:44.240How is this going with so much red tape in California?
01:58:49.940How is this going to affect our country economically?
01:58:55.060It's a really good question, because if you think about California on a standalone basis, they're what, like the fifth or fourth largest economy in the world?
01:59:04.640So, you know, we all want to say, oh, California, it doesn't matter to us.
01:59:07.640But it does matter to us in the sort of this fiscal foundation that we're talking about.
01:59:11.600And the amount of wealth that has been absolutely evaporated, you know that he removed the ability for many of those insurers to insure at the levels that they needed to insure, given the risk of the fact that they were not doing their jobs in the government
01:59:27.500and creating the issues that portended the fires.
01:59:32.800So the fact that you have a new fire that just broke out yesterday that's creating all this destruction, all the destruction that's already happened in Maui, North Carolina, places in Florida, that certainly weighs on the economy.
01:59:46.740And there are people who say, oh, well, that's good because you get to rebuild.
01:59:50.960But that is the broken window fallacy from Thomas Sowell, right, is that you're not creating something new.
01:59:57.300You're replacing wealth that was lost and you're diverting resources that could be built or could be going to build new things instead of replacing what was already there.
02:00:07.360So I do think that potentially could create issues in the insurance and banking industry, you know, from all the claims that do exist.
02:00:15.160And for those that don't exist, I do think that this could be a drag on the economy.
02:00:19.940Hopefully, again, we'll have the optimism to move forward.
02:00:24.420But boy, you know, if you're in California and you're impacted by this, you're thinking twice now.
02:00:29.540Do I want to stay in California and be subject to these rules and regulations that I thought would never impact me?
02:00:37.380And now they have completely destroyed my wealth, my family, my spirit.
02:00:41.420You know, I would imagine that it's probably better for other states and not as good for California.
02:00:46.800But I do think it's something that's going to weigh on all of us.
02:00:49.160I think to get the permitting to rebuild your house is like a 400-day wait now.
02:00:54.440They say that houses won't be rebuilt for probably seven years to rebuild.
02:01:02.280And then think about the number of inspectors that they're going to need, right?
02:01:05.340Because then you're going to be on a list for somebody to come show up.
02:01:08.200Because now, instead of going to a handful of houses, they have, you know, hundreds or thousands of houses that they have to build.
02:01:14.160So this is going to be, I think, one of those things that we're going to continue to hear about.
02:01:19.160And hopefully, you know, is sort of a linchpin for change if there's any small silver lining in a terrible situation, a linchpin for change in California.
02:01:28.960But, you know, obviously that remains to be seen.
02:01:33.840You feel optimistic on what you've seen in the last week?
02:01:37.460You feel like we're moving in the right direction?
02:01:39.180So I feel like we had a choose-your-own-adventure book, right, where we're at this path.
02:01:44.340And we went down one path, and it's just extremely dark, and, you know, that's the end.
02:01:49.080And then we have this other path where it is that possibility for us to grow our way out of it.
02:01:54.580And so we are marching down that path.
02:01:56.680And so I am optimistic there are smart people, there are resolve, there's a knowledge of the issues.
02:02:02.020And I think it's not going to be easy, and it's not going to be linear.
02:02:06.040And you may experience some pain because it's not going to be a pretty process.
02:02:10.040But I am optimistic that we do have that opportunity to find a way forward in a way that is going to be good for Americans.
02:02:17.200But I just, I encourage everyone to have patience because they're going to say things that you don't understand.
02:02:22.260And you say, why aren't they moving faster?
02:02:24.440They cannot, and they cannot because of the Biden administration and Janet Yellen and all of the insidious things that they did financially on purpose.