The StoneZONE with Roger Stone - Barry Habib ｜ 03-14-25

00:00:00.000 The

00:00:29.980 This is the Stone Zone with Roger Stone.

00:00:54.980 I'm not just stepping stones.

00:00:57.400 This is the Stone Zone.

00:00:59.800 Now, get in the zone. 0.94

00:01:01.720 It's the Stone Zone.

00:01:03.760 Here's Roger Stone.

00:01:05.380 And we're back in the Stone Zone.

00:01:12.120 Joining me now, Barry Habib.

00:01:14.600 He is the Chief Executive Officer of MBS Highway.

00:01:18.860 He's an entrepreneur, but more specifically, he's widely recognized as one of the country's foremost experts on the housing market and mortgages.

00:01:28.880 He founded and created the Certified Mortgage Advisory Certification, which is widely accepted as a standard within the mortgage industry.

00:01:38.940 He's also a number one Amazon bestselling author for his book, Money in the Streets.

00:01:44.300 And he is an outspoken critic of the Federal Reserve.

00:01:50.020 When I want to know what's really going on in the economy, I turn to Barry Habib.

00:01:55.860 Barry, welcome to the Stone Zone.

00:01:58.460 Hey, Roger.

00:02:00.900 It's great to be here with you.

00:02:02.360 So, Barry, the president's critics have been flipping out about the stock market as if the stock market is the best indicator of how the economy is doing and how the president's use of tariffs to try to get fairer, more equitable trade agreements with our trading partners is working.

00:02:26.860 I'm not sure the stock market is the best indicator.

00:02:29.800 In fact, I saw Americans got much relief from inflation.

00:02:34.260 The Consumer Price Index declined to 2.8 last month after reaching a high of three points in January.

00:02:43.520 That follows five consecutive monthly spikes.

00:02:46.840 Egg prices are down, going from $8 per dozen to $5.50 a dozen.

00:02:51.740 Energy prices down.

00:02:54.140 Gasoline down 5%.

00:02:55.300 Oil, heating oil down 3%.

00:03:00.540 Tell us how the economy is doing from your point of view.

00:03:04.580 And then I wanted to get into the inflation rate and how it's being calculated.

00:03:09.760 So, Roger, great points on everything.

00:03:12.780 And when I hear people talk about the stock market and this and that, let's remember, the stock market was at extraordinarily expensive levels, very, very high multiples.

00:03:23.480 In fact, it was overpriced and it's healthy to have a correction.

00:03:26.940 You know, a bunch of crybabies looking at the stock market never goes in a straight line.

00:03:31.220 A 10% correction happens almost every year.

00:03:34.080 You know, where were all these critics where under Joe Biden we had a 10% correction at the end of 2023?

00:03:39.800 Was anybody saying, oh, my gosh, this is the president's fault?

00:03:42.320 This happens with stock market corrections.

00:03:44.620 They occur when the market gets ahead of itself.

00:03:46.980 It's part of a healthy process.

00:03:48.680 You know, project analogy is if you start working out, if you're completely out of shape, you're going to have some soreness.

00:03:55.420 You know, it's going to be very difficult initially.

00:03:57.420 But the idea is to get healthier.

00:03:59.380 And that's what President Trump is trying to do.

00:04:01.360 Every single move that President Trump is trying to do is to make the economy healthier, to make these trade deals more equitable.

00:04:08.160 And as you said, in the long term, these all work out really well.

00:04:11.900 The president inherited a very faulty economy.

00:04:15.900 Treasury Secretary Besson said, listen, it'll be our economy in six to 12 months.

00:04:19.900 But right now, we're just they're trying to clean up the mess.

00:04:22.300 And the term that he used was we're trying to detox.

00:04:25.240 Those are his words.

00:04:26.200 And I think they're appropriate because it was quite toxic.

00:04:29.180 And we're just trying to detox it.

00:04:30.980 Which means some short term pain when things are better eight months from now, six months.

00:04:36.720 Are they going to say thank you?

00:04:38.280 You were right.

00:04:38.920 I'm sure they won't.

00:04:40.120 Point well taken.

00:04:41.300 We've talked a lot on this show about the jobs numbers and how they have been habitually manipulated to appear when Biden was president.

00:04:52.000 Far better than they really were.

00:04:53.880 You've been very articulate on this point.

00:04:55.760 I want to come back to inflation, though, and how the rate of inflation is calculated by the Fed.

00:05:01.540 You wrote a very thoughtful letter to the president, which you shared with me and I shared with him, in which you raised this point regarding the Fed.

00:05:11.680 They believe inflation is too high because their favorite measure of inflation, the core PCE, the personal consumption expenditure, sits at 2.6 percent, much higher than their 2 percent target.

00:05:23.980 Explain to us what you mean here.

00:05:25.720 So that is precisely right, Roger.

00:05:27.720 The Fed has a favorite way of gauging inflation.

00:05:30.500 It is akin to the CPI, the Consumer Price Index, but this is called personal consumption expenditures, as you've outlined.

00:05:38.080 And you are 100 percent precise.

00:05:40.420 The most recent data shows it's at 2.6 percent, but the most recent data is for January.

00:05:44.900 Here we are, Roger, mid-March.

00:05:46.440 So we're a couple of months behind, but that's the nature of the reporting.

00:05:49.100 There's a lag.

00:05:49.740 Now, the Fed does want it to get to 2 percent, which, by the way, that's a whole different discussion we could have.

00:05:54.640 It's kind of a made-up number anyway.

00:05:56.220 But the problem that we're looking at here is that we may very well be at 2 percent if we were using more real-time data.

00:06:03.520 The problem is that the Fed is using numbers from the BLS or the BEA, and the way they aggregate the data is arcane.

00:06:11.500 It's based on 40, 50 years ago, and they haven't changed the methodology.

00:06:15.460 So what they do is, number one, think about the largest portion of the personal consumption expenditures, as well as the CPI, is something called shelter.

00:06:25.340 That's the roof over your head.

00:06:26.860 Now, most people think maybe that's a mortgage, maybe that's the home value.

00:06:29.480 None of that.

00:06:30.160 It is considered a service.

00:06:31.760 So they take the housing, and they convert it into a service.

00:06:34.740 So rents is easy.

00:06:35.820 What are you paying rent?

00:06:36.700 But if you own a home, what they do is they ask you, if you would rent it, how much we'd rent it for.

00:06:41.740 So obviously that has some potential biases because everybody thinks their home might be worth more than it is or might be rented for more than it's worth.

00:06:48.680 But that aside, the problem that we have is when they're surveyed, it could be reflective of a lease that was signed 6, 8, 12 months earlier.

00:06:57.220 So what if the market's changed in the last 6, 8, 12 months?

00:07:00.140 That's not captured.

00:07:01.720 And the final portion of this delay is that you have a Herculean effort of measuring the whole country.

00:07:09.540 The BLS and the BEA is incapable currently of doing that.

00:07:13.740 So they take the country, and they divide it into 6 bite-sized pieces. 0.62

00:07:17.860 But that means they only look at one portion of the country every 6 months.

00:07:21.880 So think about it.

00:07:22.640 If you're looking at a portion in January, that means you're not going to look at it again until July.

00:07:26.540 A lot could have changed in those 6 months.

00:07:28.660 Now, we used AI for this, and we said, okay, let's take a lot of historical data.

00:07:33.040 Between what the government is reporting on shelter and real-time, how long is the delay?

00:07:37.360 17.3 months.

00:07:38.580 What this tells us, Roger, is if we were to use real-time data, which we have at our fingertips,

00:07:43.260 Realtor.com, Zillow, 4Logic, ApartmentList, RentIt, we have it.

00:07:48.060 It's showing that there's an enormous difference, and that currently, that 2.6%, if you were using real-time data, it should be 2.1%.

00:07:56.580 Listen, Roger, the analogy is like football got a lot better when we started using instant replay, and all sports did as well.

00:08:03.260 Now, once we started using more accurate, real-time information, which became available, things got better.

00:08:09.620 But the government is still not doing that.

00:08:11.980 If we make this change, Roger, think about what happens.

00:08:14.140 Number one, we wind up getting the right information.

00:08:17.400 The Fed's friendlier.

00:08:18.260 Interest rates come down.

00:08:19.260 Homeownership's better.

00:08:20.540 Everything's better.

00:08:21.920 And also, think about how much money the government saves because they spend so much in Social Security based upon cost-of-living adjustments that are tied to these flawed indices.

00:08:31.380 Excellent point.

00:08:33.880 During the most recent presidential campaign, I give Robert F. Kennedy Jr. credit for identifying a huge issue in the country, which is the lack of affordable housing.

00:08:45.060 Whether it is buying a home or whether it is renting a roof over your head, it's just out of reach for many Americans.

00:08:53.660 So what, in your opinion, is the solution to the affordable housing problem?

00:08:59.980 Well, here's what it is in a nutshell.

00:09:02.480 When you take a look at our demographics, and there's a saying, Roger, that you're probably familiar with called demographics is destiny.

00:09:08.160 And it truly is.

00:09:09.440 We are forming 1.9 million households per year in the United States.

00:09:14.680 But at the same time, we're only constructing, that's the supply side of the equation, 1.4 million households per year.

00:09:22.800 So if you need 1.9 and you're constructing 1.4, you have a shortfall.

00:09:27.680 So what happens is the natural law of supply and demand, it drives prices up.

00:09:32.300 And because we have that problem, some people have said, hey, let's attack this. 0.96

00:09:37.160 Like the Biden administration wanted to do something extraordinarily foolish.

00:09:40.260 And so did Kamala Harris when they said, let's give people $25,000 free money to buy a home to help them. 0.99

00:09:46.600 That exacerbates the problem because that even creates greater demand.

00:09:50.680 That was tried by the Obama administration with unbelievable failure as it fell on its face in 2010.

00:09:57.540 Now, that's not the problem.

00:09:59.460 It's not the demand.

00:10:00.340 It is supply.

00:10:01.680 The solution to the housing problem would be let's get rates lower, which Scott Besson is keenly aware of and trying to do.

00:10:09.480 And secondarily, it is builders build more homes for that to ease the supply crunch.

00:10:16.340 And that's what we need to do.

00:10:18.100 Unfortunately, that has not yet been the focus.

00:10:20.800 But Scott Besson at least is trying to bring rates down.

00:10:23.180 And you know what, Roger?

00:10:23.960 He could do it.

00:10:24.560 There's ways he could do it that are very interesting and that I believe he could be successful at.

00:10:29.300 So we've got a little bit of time.

00:10:32.160 Give me a couple of examples.

00:10:34.080 So one is the Treasury General account.

00:10:36.320 That's like the government's checking account.

00:10:38.180 Before the pandemic, they kept it at $300 billion.

00:10:40.340 Now it's $600 billion.

00:10:41.680 They could use some of that money to pay some of the bills instead of borrowing it by issuing Treasuries.

00:10:46.580 Less Treasuries, they go at a premium, higher price, lower yield.

00:10:50.540 Secondarily, Scott Besson also, when he issues Treasuries, can issue less 10 years, making them more scarce.

00:10:58.180 They go for a premium, it brings rates down.

00:11:00.820 Scott Besson can also take advantage of the efficacy of Doge.

00:11:04.200 If Doge eliminates some of the spend and some of the waste, that's less Treasuries, lower rates.

00:11:10.080 And finally, the most important, I think, which we may hear from, perhaps as early as next Wednesday,

00:11:15.340 is if the Fed says, we're not going to cut rates yet, but if we stop the runoff of the balance sheet.

00:11:21.320 Roger, this is the one linchpin here.

00:11:23.140 If the Fed says, hey, we're allowing runoff of our balance sheet right now, $45 billion a month,

00:11:28.560 they told us and promised us by mid-year they would stop that.

00:11:32.160 If they tell us they stop it sooner, what happens is that now the Fed would have to repurchase

00:11:38.000 $45 billion of Treasuries in conjunction with Scott Besson.

00:11:41.620 Scott Besson can use that money to buy more 10-year Treasuries.

00:11:44.720 10-year yields come down.

00:11:46.180 Mortgage rates come down.

00:11:47.380 Housing becomes more affordable.

00:11:48.960 And you've got this whole thing working beautifully.

00:11:50.960 What we've learned, Roger, is one thing.

00:11:52.940 We don't need 4% mortgage rates.

00:11:54.880 Back in August and September, we got to 6% and the housing market was vibrant.

00:11:59.000 If we get just to 6% and we're at about 6 and 3 quarters, we just get about 3 quarters of a percent,

00:12:04.120 you have a very functional, fluid, vibrant housing market.

00:12:07.740 Yeah, I'm thinking back to the Reagan days.

00:12:10.020 I remember the panic in the early days of his presidency within the first year when he cut taxes.

00:12:17.560 I saw Robert Reich, who I actually went to high school with the other day, claiming falsely on X that deficits are massive deficit and inflation were caused by tax cuts.

00:12:29.920 But, in fact, every president who has cut taxes, whether it is JFK, whether it is Ronald Reagan, whether it is Donald Trump, the country has experienced a sharp increase in revenues, when, in fact, it was spending and borrowing, but spending that caused our inflation problems.

00:12:51.460 Once again, I think Robert Reich is wrong.

00:12:54.760 We've got about a minute and a half.

00:12:55.980 Barry, what say you?

00:12:56.860 Well, I completely agree.

00:12:59.080 Robert Reich has made a fool of himself so many times they stopped putting him on CNBC.

00:13:03.500 I remember during the Bush administration, he would scream, literally scream, where's the jobs? 0.83

00:13:09.040 Where's the jobs?

00:13:09.960 Well, guess what?

00:13:10.740 Two months later after he screamed, the jobs came in.

00:13:13.240 He failed to understand that there are lags in these policies.

00:13:16.500 You're precisely correct that typically tax cuts lead to more investment.

00:13:20.420 It leads to the private sector using money more efficiently than the public sector.

00:13:26.020 Doge is proving that.

00:13:27.200 So, yes, it is much better in the long term.

00:13:30.100 And, yes, during the Reagan administration, we had higher inflation.

00:13:33.100 We had some pain initially.

00:13:34.520 But just like we said, you go on that diet, you feel some sort, you go exercise, you feel some soreness, you feel some discomfort.

00:13:40.160 But longer term, it works.

00:13:42.240 This is like a bunch of spoiled brats that have been giving candy, candy, candy to shut them up, which makes them sick and worse, instead of an adult saying, hey, you're going to have to eat your vegetables, do the right thing, and then you will be long-living, healthy human beings.

00:13:56.040 That's what the government is trying to do right now under an adult president in Donald Trump.

00:14:00.920 All right.

00:14:01.600 We're talking to Barry Habib right here in the Stone Zone.

00:14:04.780 He is an economic guru.

00:14:06.780 That's what I like to call him, one of the country's foremost experts on both the housing and the mortgage market.

00:14:11.920 And we'll be right back with more of Barry Habib in just a minute.

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00:15:56.220 This is the Stone Zone with Roger Stone.

00:16:10.520 I'm not just stepping stones.

00:16:22.400 This is the Stone Zone with Roger Stone.

00:16:25.920 They went after a guy named Roger Stone, who's sitting in the office.

00:16:29.860 And I'll say this in front of Roger.

00:16:31.320 He's no baby.

00:16:32.260 And right now, he's cleaner than anybody in this place.

00:16:35.840 Now, they treated him very unfairly.

00:16:38.440 Now, get in the zone. 0.94

00:16:40.280 It's the Stone Zone.

00:16:42.320 Here's Roger Stone.

00:16:45.700 Welcome back.

00:16:46.900 You're in the Stone Zone.

00:16:48.200 We're talking to Barry Habib, the chief executive officer of MBS Highway.

00:16:53.420 Probably the country's foremost expert on the housing market and mortgages, but also a keen economic analyst in his own right.

00:17:03.300 And we're talking about those lemmings who are running off the edge of the cliff watching the stock market as if that is the correct indicator of how the economy is doing. 1.00

00:17:14.300 It was tickled me to see AOC in an interview this morning.

00:17:18.420 I think it was on MSNBC talking about how strongly she opposes the coming cuts in Social Security and Medicare, which, of course, President Trump has said repeatedly he has no intention or plan to do.

00:17:32.780 These people put up straw dogs and then try to knock them down.

00:17:38.080 We try to knock them down.

00:17:39.660 But watching her was almost comical.

00:17:42.360 She memorizes these talking points exceedingly well.

00:17:46.140 Barry, I'm kind of interested in the fact that gold is at an all-time high.

00:17:51.660 And I was also interested to see that Elon Musk and his DOGE, the government efficiency panel that he heads, is demanding to inspect our gold reserve, not only at Fort Knox in Kentucky, but also at the New York Federal Reserve.

00:18:11.540 Incredibly, no one has inspected our gold reserve since 1974.

00:18:17.340 Now, this has led some to speculate that, well, maybe the gold is not there or maybe it's been dissipated in some way.

00:18:26.480 Perhaps this is going to turn out to be like Geraldo Rivera and Al Capone's safe.

00:18:32.040 Lots of hype, but then they popped it open and there was nothing there.

00:18:35.000 On the other hand, since our dollar is no longer backed by gold, since we essentially have a fiat currency in which your paper dollar, the money in your wallet, is backed by the full faith and credit of the U.S. government, I'm not sure how it would impact the economy.

00:18:53.240 So I guess two-part questions.

00:18:54.900 Barry, do you have any theory as to whether our gold is intact?

00:18:58.060 And if it wasn't, how would it affect the economy?

00:19:02.320 So, first of all, there's a lot to unpack there.

00:19:04.760 You said so many good and important points, Roger, as always.

00:19:08.020 So, first of all, with regards to AOC, completely agree.

00:19:11.280 You got these people, these lemmings. 1.00

00:19:12.860 Another one this morning that I saw was Jeffrey Sonnenfeld.

00:19:15.780 Very childish, very unfair in his approach.

00:19:18.600 Joe Kernan tried to put him in his place.

00:19:20.360 But this is what you have, and people hear this stuff.

00:19:24.240 With regards to gold, you know, Roger, you and I have talked about this.

00:19:28.100 As you know, I was very, very bullish on gold back at about $2,500 and telling you that in previous shows that I thought that would do well.

00:19:35.740 I think it's got a long way to go because, especially now, as we head into the season in India,

00:19:43.000 where they are huge consumers during the month of May of gold, it probably will reach even further heights, maybe $3,100, $3,200 on gold.

00:19:52.660 So, I think it has room to go, even in the short term.

00:19:56.640 You bring up an interesting question.

00:19:58.280 I don't know if there's a shortfall there, but I think Elon Musk brings up a very good point.

00:20:03.840 Do we have that gold reserve?

00:20:05.660 You remember, Roger, you and I talked about the value of gold.

00:20:09.000 The storage of gold that the U.S. has is valued at, get ready for this, $29 an ounce, okay, which is what it was, you know, way, way, way, way back.

00:20:21.060 However, we know it's now over $3,000 an ounce.

00:20:24.620 If it were to be properly marketed, since we have over 800 metric tons, supposedly, of gold, that's the amount that's supposed to be there in our reserve,

00:20:32.820 this would amount to about $900 billion that we would have of gold.

00:20:38.780 If we don't have it, what happens to the economy?

00:20:42.720 I don't know that anything really happens to the economy.

00:20:46.200 What does it do for the U.S.?

00:20:47.980 Well, I think that they, at that point in time, would have to properly evaluate it. 0.96

00:20:51.840 If they would have evaluated at $3,000 an ounce, it could be a world of crap that we'd be in.

00:20:58.060 But since it's valued currently at $29 an ounce, if you only had half of what was there, let's say half the gold in Fort Knox is gone, okay, and at the New York, it's gone.

00:21:10.000 You still could say we have $450 billion more than we thought we did because it's valued only at $29 an ounce.

00:21:17.660 That's the one thing that very few people know and understand about the gold market, which even if this were to happen, I think that Elon Musk is right in wanting to investigate it.

00:21:27.320 All right.

00:21:27.880 We have about two minutes left.

00:21:29.680 Here is my favorite question.

00:21:32.860 President Trump has talked about the possibility of doing away with the federal income tax.

00:21:36.780 As you know, until 1913, the country was completely financed by revenue from tariffs.

00:21:44.100 Is this a realistic possibility, particularly if we had deep spending cuts caused by the Doge investigations?

00:21:51.320 Best thing we could do would be go to a VAT tax.

00:21:54.100 I am a huge fan of a VAT tax.

00:21:57.480 This would solve so many problems with taxation, with tax cheats, because you can't cheat a VAT tax.

00:22:04.720 This is an area that we need to move towards because this would be something that would generate so much revenue.

00:22:10.780 You could give people on the lower end, like a middle class would say, you know, we are fine with this because they can have virtually, I don't know, tens of thousands of dollars more to spend with.

00:22:26.700 It would make buying a home so much easier, so much better.

00:22:30.580 Think about the percentage of your income that is confiscated through income tax.

00:22:35.440 Think about what could happen with that additional money as far as investment goes.

00:22:39.640 This would be a fair consumption tax.

00:22:42.080 It is exactly what we need.

00:22:43.960 Let's get rid of the income tax.

00:22:45.600 Let's go to a VAT tax system. 1.00

00:22:47.340 That's something that should be on President Trump's radar.

00:22:49.800 All right.

00:22:50.260 There you have it.

00:22:51.020 Barry Habib right here in the Stone Zone.

00:22:53.680 Until tomorrow, God bless you and Godspeed.

00:22:56.960 As him raising his.

00:22:57.360 All right.

00:22:58.140 I'll see you then.

00:22:58.580 We'll be right back.

00:22:59.400 Bye.

00:22:59.640 Bye.

00:22:59.900 Bye.

00:23:08.120 Bye.

00:23:08.300 Bye.

00:23:09.420 Bye.

00:23:10.160 Bye.

00:23:10.200 Bye.

00:23:10.660 Bye.

00:23:11.460 Bye.

00:23:12.080 Bye.

00:23:12.740 Bye.

00:23:13.200 Bye.

00:23:13.300 Bye.

The StoneZONE with Roger Stone - March 15, 2025

Barry Habib ｜ 03-14-25

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