Steve Bannon's War Room host Steve Bannon joins Lou Dobbs on the Great America Show to discuss the current economic and political crisis facing the United States and the world. Steve also discusses the Silicon Valley Bubble and the dangers of the $19 Trillion of deposits held by Silicon Valley banks.
00:02:43.140And let's start with the banking crisis that is now crippling the economy.
00:02:48.000We've heard barely a peep from Joe Biden, who some credit as the author of this crisis,
00:02:53.340with all of his mad spending and talent-free administration.
00:02:57.240Lou, we got three minutes of Biden, what, at 9 o'clock Monday morning, to talk to us about the deplorables and MAGA essentially bailing out Silicon Valley Bank
00:03:08.760and all $19 trillion of deposits throughout the nation.
00:03:13.520And we had Yellen, I think, do some testimony this morning in front of the Senate Finance Committee.
00:07:35.820And that's what's destroyed these bonds, which all these guys – the unrealized – and we can't get a straight answer.
00:07:40.560But the unrealized losses on the balance sheet of banks were told by the FDIC of $600 billion on government securities.
00:07:48.920There's other analysis out there that's over $2 trillion.
00:07:51.680That's what took down Silicon Valley Bank.
00:07:53.420Silicon Valley Bank was not taken down by its wokeness, although, trust me, on the margin that hurt in the bank – and it wasn't really a bank.
00:08:02.080But what took it down was buying this inflation and the hot money deposits and that their portfolio was actually destroyed because they bought 10-year Treasuries at 1 percent, and now Treasuries are 4 percent.
00:08:16.860And those bonds are half of their value.
00:08:19.700So – and this is all over the country.
00:08:21.200This is 1,000 percent not about wokeness.
00:08:25.380It is about Biden's economic policies, his spending, his inflation, what he's done to interest rates.
00:08:32.880And on top of it all, Lou, for him to present a $6.8 trillion budget last week just shows you how out of tune he is and how in your face he is about the financial crisis, economic crisis in front of us.
00:08:46.420Yeah, that was a spending blueprint for a Marxist who means to destroy this country.
00:08:52.880And everyone needs to understand what it is.
00:08:56.000And nothing is a better – to me, a great avatar for all of this is Silicon Valley Bank.
00:09:03.960It had only one member on the board who had investment banking experience.
00:09:10.060We're talking about a bank that didn't even approximate, as far as I'm concerned, a commercial lending institution that had any concept of ratios.
00:09:20.320You talk about the board and the superfired.
00:09:23.000Their chief risk officer left a year before.
00:09:26.560I think they understood what was happening.
00:09:29.020The chief risk officer left a year before, sold a couple of million dollars' worth of stock, and went on their merry way.
00:09:34.280They were without a senior risk officer in charge of any kind.
00:09:38.240And, of course, all the other risk officers in London and everywhere else were totally woke about their selection, the diversity, equity, inclusion.
00:09:46.820But your point about the board, I was actually shocked.
00:09:49.940I mean the board – and by the way, Lou, it's not like the old days.
00:09:54.100It's not that they just only had one banker.
00:09:56.260It's the fact that they had – everybody else was like a flute player.
00:11:25.320Now, they hide it through saying it's going to be FDIC fees taken from member banks, which means it's just going to be passed through to the customer.
00:11:33.160So everybody's got a checking account.
00:12:45.240The venture capitalist – the venture capitalist could have extended additional credit lines, credit facilities, and taking care of their companies, which they have a fiduciary responsibility.
00:13:11.900And I keep saying it, and they keep lighting me up, but I say they did that on material, non-public information.
00:13:17.820And to me, that is just as bad as insider trading.
00:13:20.940Yeah, I'm not sure that they could differentiate about insider trading, to be honest with you, Steve.
00:13:27.460I think those people were so woven into the Silicon culture that they couldn't distinguish between a VC disbursement, a payroll, and a credit line.
00:13:40.800Because in point of fact, it was one enormous, diverse, woke organism that is now bared and is all of its ugliness there in Silicon Valley and within the regional banking system itself.
00:13:56.500Because we've seen 30 banks put on watch.
00:13:59.020We've got six of them on, let's call it, careful watch.
00:14:02.620We have seen the second and third largest bankruptcies of a bank in the country's history.
00:14:12.260It is simply a massive dam, the gates of which have been raised by this administration, and money is flying through those gates, pouring through those gates, and flooding the economy.
00:14:28.440We are looking at one of the most perilous moments, I believe, in the country's history, because of the condition in which we find ourselves, and the people upon whom we must depend to manage and guide us through it.
00:14:47.260They're in a real dilemma right now, because you saw the ECB raised rates 50% to go after inflation.
00:14:54.600The Fed, because of Biden's spending and them going along with it, monetizing this debt, is now jammed.
00:15:02.760Core inflation for how you live, core inflation is obviously killing people because it's 10%, 12% on food, on rent, those types of things.
00:15:11.220And so they're going to have a decision next week, whether they go after inflation, or if they don't go on inflation and kick rates up, they're just going to destroy the bonds more, and they're going to expose more unrealized gains.
00:15:25.760Because remember, the scam right now is they're lending against these bonds at face value.
00:15:29.460When the bonds are trading at 30 cents of the dollar, they're trading at one-third, face value at best, which is another scam.
00:15:39.220They are banking on right now, Lou, the Republicans not stepping up here, which they're not, and they're being kowtowed or they're being browbeaten by saying you can't say anything because you caused a bank run.
00:16:16.620They've got to make a decision to go after inflation.
00:16:18.300Even if they don't do that, if they raise rates that go after inflation, they're going to kill these bonds even more and expose more of these zombie banks are going to start going belly up.
00:16:30.240Remember, it went from Biden spending to Biden inflation to the Biden bonds, right, that crushed, that dropped in value, to the Biden banks, the zombie banks.
00:16:39.180And I don't know how they're going to get out from under it.
00:16:42.420And if they go down the path they've been going, the Republican Party shouldn't be collaborationists.
00:16:48.000Mitch McConnell already is guilty with these 15 or 16 Republicans that passed the omnibus bill, that did bill back – every Republican that voted for any of these spending programs from Biden, which many of them did, the Republican Senate, are just as guilty as the Democrats in this.
00:17:04.800We have a Federal Reserve, for crying out loud, that has a balance sheet still of $8.4 trillion.
00:17:11.300They've been trying to run it off ever since Biden got into office.
00:17:16.040And they can't move because of inflation, because of all of the dislocation in this economy and our markets.
00:17:24.120And I want to remind everybody – and this is not a partisan statement, this is just to map what has happened under this puppet president and his Marxist acolytes – inflation was below 2% when Joe Biden took office.
00:17:44.820And here we are, by the consumer price index, with inflation at 6% and well above, by 300%, the Fed's target for inflation.
00:17:57.420Your thoughts about what that presupposes?
00:18:00.240Let's go back even in 19, if you look because the – when Biden took office, including all the fiasco around the pandemic, if you go back to 19, the last full year of the Trump golden age economically, I think inflation was below 1%.
00:18:17.400Wages were increasing by blue-collar workers 11%.
00:18:20.240You had 10% – you had 10% wage – roughly 9% to 10% wage increases, real – not nominal – real wage increases for workers with virtually zero inflation, virtually zero interest rates, very low interest rates.
00:18:40.340For people that hate Trump and hate the sound of his voice that said, hey, he gave you – he only gave you four years of peace and prosperity.
00:18:57.340This philosophy is called modern monetary theory, which deems that deficits don't matter, that you continue to run up, and that's what you saw here.
00:19:05.840With Biden, with all this massive spending and now this budget he gave us the other day, 6.8, not that it will be passed, but it basically is worse than the CBO projected.
00:19:15.720It would have $2 trillion deficits in perpetuity.
00:19:21.620I mean, the insanity of this thing is not – these are not only not reasonable people.
00:19:27.380What they're putting forward is madness, and you can see in the meltdown of the financial system that every day they just lie, it's the best economy in 40 years.
00:19:33.580We're not – the economy is in meltdown.
00:19:56.720So we're heading towards – as I said in my CISPAC speech, we have a convergence of a financial and economic crisis converging now with the geopolitical crisis on the Eurasian landmass.
00:20:07.960And once those two – and they're kind of coming together, once they converge and conflate, we're at the early stages of World War III, and this is where things are going to spin out of control.
00:20:18.200And it will be outside of the control of the United States to control events.
00:20:21.840That's one of the things I think most people intuitively have thought since World War II and grown up, whether you're a baby boomer or even younger, that the United States can always control events.
00:20:31.360Well, we're in a situation now that I think you're seeing that we don't control events.
00:20:35.820And this is what happens when you have managed decline in a country driven by its elites.
00:20:41.880I would only quibble with the word managed.
00:20:44.700We're in decline, but I don't think managed is entirely accurate because we don't have anyone capable in any of our major institutions of managing even growth, let alone decline.
00:20:58.220We are in a leadership crisis, whether – and it's showing up most vividly right now in our banking system and our banking regulatory system.
00:21:07.180And certainly anyone paying attention to what is happening in this country with an open border to the south, wide open, the fentanyl crisis, the drug crisis, what we are watching as no longer a Cold War with China.
00:21:23.160They are an enemy killing hundreds of thousands of Americans with their export of fentanyl and other deadly drugs.
00:21:32.000And this administration is in direct alignment with the Communist Chinese Party.
00:21:38.660And they are hand in glove, managing to at least, I think, come to terms with the reality, the American people, that we have a puppet government.
00:21:55.160We have a puppet president, a shadow government, and immense challenges.
00:22:01.540And we have an education – I mean, we can't even look to it – we can't even break this down to short-term and long-term because the Marxist Dems have destroyed public education.
00:22:12.020They have indoctrinated an entire generation of our kids who are to step up and do what?
00:22:19.600They don't even understand the history, the heritage, and the values of this country any longer.
00:22:24.420This is a deep, dark place into which we've dug ourselves.
00:22:28.600I mean, there's no doubt this is an inflection point in the history of this republic and for the American people, and it's not going to get solved overnight.
00:22:38.600We've got – you know, we've got 10, 15, 20 years ahead of us that's going to take to sort this thing out.
00:22:45.480It's going to be a long, tough struggle.
00:22:47.100I'm very optimistic that we can get there and get this thing sorted, but it is going to be very tough, and we're going to go through some massive – we're going to hit some massive potholes and some massive speed bumps.
00:22:57.560So I think people – particularly people who listen to your show and watch you, Lou, and have watched you over the last 30 or 40 years, War Room, people that follow President Trump, I think most of us realize this is not going to be easy and it's not going to be quick.
00:23:12.440But every day gets a little darker, and it's because of – and it's right there.
00:23:17.260And what I think gets most people – people the most upset, there is supposed to be a political party that's supposed to stand up to this, and you don't see it.
00:23:26.240You really just see continued weakness, weakness, fecklessness, all of it.
00:23:35.040The Republicans have got to step up and take a stand on this stuff.
00:23:38.060Well, let's talk about that because you and I have a difference of view on the debt ceiling discussion and whether a fragile majority in the House is the ideal group of people to take this on.
00:23:51.660Speaker McCarthy is saying that we're not going to pass a clean debt ceiling and we have to spend less money.
00:24:04.860And I want – I like prudent fiscal policy.
00:24:09.080And I – but that seems to me like a long-ago dream that it would even be achievable under these circumstances.
00:24:15.960And what is achievable is a resounding Republican defeat if they take on the issue of the debt ceiling and take another beating by the Marxist Dems as they have every time that they have challenged the debt ceiling.
00:24:32.520I always have considered it too late to have the discussion about spending.
00:24:38.540And the result, if they don't do it, will be, I think, another brutal beatdown by the Marxist Dems of the Republican Party, just as they are emerging as a powerful force of countervailing power against these destructive and anti-American Marxist Dems.
00:25:00.880You and I are definitely in two different camps.
00:25:05.220Let me explain my – no, because you've been doing this a lot longer.
00:25:09.000You've seen many, many cycles of this.
00:25:11.100I think that the – and let's go back to the $6.8 trillion budget.
00:25:15.220I mean, and this is why I try to focus people – it's not the wokeness of SEB, although, trust me, on the margins that added to it and it was not properly managed, the control of the currency and the FDIC should have seen this bank was insolvent in last year, probably third or fourth quarter.
00:25:42.740But the central part of why we're in this jam is Biden's spending that caused the over-the-top spending when aggregate demand was back.
00:25:50.640It fueled inflation that didn't – fueled the spending, fueled inflation that then destroyed the government bonds that were all priced at low interest rates.
00:26:09.540I would love to have prudent economic policy.
00:26:11.660That train left the station, Lou, and I think the strongest argument I got against your position is they showed you what they are when they put up the $6.8 trillion budget.
00:26:31.140People – and I think it's incumbent upon us to make sure they understand the spending here is the problem.
00:26:36.380The spending is the over-the-top government spending, and the deficits, and how the deficits are financed are the being part of the problem.
00:26:44.400I am actually the hardest position, and I think the correct position.
00:26:48.200Not one penny increase to the debt ceiling.
00:28:16.280The way you do it, you use the debt ceiling as your leverage.
00:28:18.940And then you're forced to either stretch payments of things that are discretionary spending or you get into things like Medicaid that need to be – you know, you need to take a couple of trillion dollars out of these programs over 10 years.
00:28:30.460It's the only way to get to a balanced budget, and the only way we're going to survive is to get to a balanced budget is you've got to make tough calls, and you've got to make them now.
00:28:37.740And I think the American people would have you back.
00:28:41.540When this debt ceiling – when the debt ceiling negotiations really have to take place, it should probably be in June, July, August, the country's economy is going to be a dumpster fire.
00:28:52.380And your solution is, hey, I can put out the fire, but here's how we have to put it out.
00:29:04.380You're arguing with madmen because here's why, and this is why I – Lou, more of my friends and colleagues are in your camp than in my camp.
00:29:14.380The more of my friends are in your camp than my camp, and I say you guys assume that there's rational people across the other side of the table because you're rational and talking about rational economic policy.
00:29:55.900When I said I believe in a prudent fiscal policy, believe me, I'm quite aware that the last half century have been problematic in that regard.
00:30:10.300This is a time when we are going to see people losing jobs, not adding to the coffers of the federal government through taxes and revenue receipts.
00:30:21.180We have before us arguably the potential for the greatest – I truly believe this – the greatest economic setback, certainly since the Great Recession and possibly the Great Depression.
00:30:39.100We have to understand what's at stake here.
00:30:41.900We are looking at a – right now, geopolitically, a China that is on the march, and it means to move – what do you – let's do a thought experiment here.
00:30:55.680Let's assume that we go to war with China tomorrow.
00:30:59.260How comfortable is anyone in this country with an impaired puppet president as the commander-in-chief, with this assortment of bizarre personalities that make up his cabinet,
00:31:14.540with secretaries of critically important departments like defense and energy and homeland security and justice?
00:31:26.220Do we really want to go to war with those people in command of those departments, and what are we doing about it, and what is the Republican Party going to do?
00:31:36.560Because they've been the go-along, come-along party for quite some time.
00:31:40.420The only period of success for the Republicans in the last arguably 30 years was a four-year interregnum directed by President Donald J. Trump.
00:31:54.640They spend more time, the Republicans, trying to destroy him and his candidacy for 2024 than they do strategizing on how in the world to compete with a political party that poses as the Democratic Party,
00:32:12.220that has changed the rules for elections, for campaigns, and assuring the integrity of those elections, of which there is damn little.
00:32:23.880We have to look at this holistically, I think, and holistically it says to get bogged down in a quibble over $3 trillion in the next 12 to 18 months is just a bizarre and perhaps a fatal blow to the Republican Party because you know the Democrats will beat them to death.
00:35:33.240You can't do that to the American people.
00:35:34.840You right now cannot put the Republican Party in the awful political position of denying the people who are most dependent upon the federal government in the worst way.
00:35:47.900Those people taking Medicaid, the elderly who are dependent upon their Social Security, the elderly who are dependent upon Medicare for their health.
00:36:23.020And by the way, this is the way you force decisions.
00:36:24.940If you can take back the $200 billion and not put additional $200 billion in Ukraine, you're going to be able to make more Medicaid payments, and you're going to be able to keep the Department of Education.
00:36:41.220I think the American people, seeing where the economy is and how it's not getting better and you just can't throw money at it, are prepared to have people step forward and say, okay, here's a plan.
00:36:51.820It's going to be a tough plan, but here's a plan.
00:36:54.000Because, Lou, remember, the budget he just gave you has a $2 trillion annual deficit in it.
00:37:00.580The Fed, as you know, can't print that money.
00:37:02.900You can't monetize the debt because you're seeing how they're having difficulty right now.
00:37:42.820But I do believe that it's a new debate.
00:37:44.440Essentially, to me what's fundamentally interesting, it would be a debate between great friends and people who have the same values, and we both want the same thing for this country.
00:37:56.180What I also want is to be certain that the Republicans don't get so enamored with the idea of this damn debt ceiling that they destroy the party, which is very well what they could do.
00:38:06.740When the party represents our last best hope for fixing these damn problems, along with the leader of the party, Donald Trump.
00:38:15.980The people are seeing right now on this podcast, or my old and dear friend, before Donald Trump came on the scene, I spent many years trying to convince a younger Lou Dobbs that he should run for the presidency.
00:39:48.820And, Lou, you and I have talked about this often.
00:39:52.240Even – I keep telling people, I said, even if you don't like the sound of Trump's voice, when you just look at where we are today and where this country is rapidly headed, and you look at the four years under Trump, it's – there is no logical choice but Trump.
00:40:04.200I mean Trump gave you four years of peace and prosperity.
00:40:07.200And one of the reasons is that the criminals in Tehran and Beijing and Moscow, the KGB, the CCP, the Ayatollahs, you know, throw in Turkey, Pakistan.
00:40:18.760And these people both respected Trump, but even more they feared it, and that's why we had peace.
00:40:24.680And his prosperity was just unparalleled.
00:40:27.520And this country is in such a crisis right now, and it's only getting worse, that the speech to me was pretty straightforward.
00:40:35.240Lay out the crisis, the financial and economic and the geopolitical, and just go through some things that Trump accomplished.
00:40:42.080And he's talking about getting more done in the future.
00:40:44.620It's a pretty straightforward argument, but I appreciate it.
00:42:40.920Here tomorrow will be another great American, Mike Lindell, fighting for election integrity, battling for the country, spending tens of millions of his own money to expose what happened in the 2020 election and to assure it never happens again.