Transcription
All right, turning now to the economy. Some major developments whenever it comes to the status of the US dollar. We did see a very noteworthy clip here from Peter Schiff, who has been very prescient on major collapses. He was on Fox Business dropping some truth bombs. Here's what he had to say.
>> And the world is now pulling the rug out from under the US. The dollar is going to collapse. The dollar is going to be replaced by gold. Central banks are buying gold to back up their currencies. They're getting rid of dollars. They're getting rid of treasuries. We are headed for an economic crisis again that will make the 2008 financial crisis look like a Sunday school picnic. The biggest difference between the crisis that we're about to have and the one we had back then is this one is all in America.
All right. So, all of this is part and parcel, uh, as we've said here in the past, of a major movement against the dollar. Now, I want to be very clear, even when we say dollar crash, we're talking about like a 61% or whatever drop. Uh, what this generally can mean in a longer-term trend, especially as we started here with global affairs, with wars, with what's going on with Venezuela, the Greenland situation, some reporting that actually behind the scenes, the Danes and the EU had threatened the United States with massively selling off big portions of our debt, is instability of reserve currency and the simultaneous spike in gold could lead to some sort of event like this. Peter Schiff is effectively echoing a Ray Dalio thought, and I don't even really agree, uh, necessarily, but I do think it is important to air this type of perspective in the midst of all this gold insanity that I certainly don't fully understand. Let's go and cue, let's go ahead and cue up Ray Dalio, who has been talking about this now for quite some time. Uh, a video that he put out just yesterday. Uh, Matt, can we take a listen?
>> It's the beginning of the end of, um, the monetary system as we know it. It's not just the US dollar, it's the fiat monetary currencies. So the UK, the euro, Japan, China all have similar debt problems and so on and are dealing with the same interrelationships, which is the reason you're seeing gold being chosen by the central banks. They want a, a currency. Gold has always been the main currency and it's the only non-fiat currency. In other words, not the currency that can't be printed that they want. And so that's why you're seeing central banks move and sovereign wealth funds move to gold, and that's the nature of the shift of the monetary system.
So, I mean, effectively what he's saying is about a flight from US reserve status in the midst of global instability. So again, I don't fully buy a lot of gold bug arguments and gold standard stuff, uh, that could, I think, go to kookery very, very quickly. But it is undeniable, uh, that this massive price spike in gold is not connected deeply to the actions of the Trump administration and of the United States, especially in the last, you know, year or so under the, under Donald Trump tariff regime, global instability, and it could be, you know, about flight to. It's, it usually, what it really signals, and this is why I think he's talking about collapse, is not just about currency, but about flight to safety away from US assets. And what that broadly means means is about lack of strength and faith in the overall US economy, which of course is what all of our 401k, you know, rely on, all of our retirement accounts, uh, everybody's just general ability to buy and trade, uh, with foreign goods is going to make exports, you know, very different in terms of our relationship, manufacturing inputs, all those types of things. So that's why I do think it is still interesting. We do have to, you know, I, I like to pay attention to the, the dios and the shifts of the world, even though I don't necessarily 100% agree per se. But like, you can't look at the current movement in the gold market and say it doesn't show something. It's definitely showing us something, and we're all just trying to figure out what that is.
Dalio, um, has a, a theory of the, the cycles that societies go through that is worth engaging with as well. And in his view, we've now moved from, uh, phase five to phase six, which is basically like imminent, um, civil war and some sort of, you know, mass turmoil. And, uh, you know, I think there are signs that we could be heading towards that. We'll talk more in the block about, uh, Minneapolis and what's going on there. The sort of face-saving moves that that Trump is engaging in now to sort of step back from the brink. I think that's all very good. I'm glad to see it, um, because the, the temperature has been so incredibly high that, you know, I've been quite worried about it spiraling out of control. Doesn't mean it's not going to spiral out of control, but at least maybe there's a step back from the brink right at this moment.
You know, my understanding of what this Trump administration is doing right now, and Trump himself and Scott Besset and others have sort of indicated this. They've laid out their their strategy, etc. Trump was asked about the decline of the dollar. And when the dollar declines, you know, most of the things that we all buy at this point are imported from abroad. So, if the dollar isn't buying as many goods abroad, that means everything's getting more expensive for you. That means whatever you've got in your savings account or whatever wages you're earning, they're not going as far, right? So, for your average person who doesn't own a lot of assets, the dollar's decline is, it's really bad, right? It takes away your purchasing power. It makes you poorer. If you are a very wealthy person who is an asset owner, it actually can be beneficial. It also is beneficial, and this is part of their, um, part of why they're moving in this direction, I think, intentionally. It also is beneficial in terms of making your exports more competitive. So if you do want to rebuild, you know, the manufacturing base, and this is something you're prioritizing, this would be something that you would do. And so for people who own those capital-producing assets, it also is beneficial. The other reason to do this is because we have a massive amount of debt. So if you make the dollar value, like those dollars worth less, then it is easier to pay off that debt. And that has also been, you know, something that has been, um, you know, this is a tactic that's been deployed over any number of.
>> Chinese currency manipulation. It's very common.
>> Yeah. Exactly. So, I think that is what is going on. So, you know, when Trump comes out and he gets asked about the dollar's decline and he's like, I'm, I'm happy with it. Like, I'm happy with where the dollar is. I think you should take his word for it that that is actually their plan, and you need to understand what that means for you, for what's in your savings account, for what's in your, you know, ability to purchase, and that is a plan directly to make you poorer in terms. So, that's one piece. The other piece is this question of selling American, right? Not purchasing American, not buying American bonds, offloading, uh, Treasury bonds, uh, not holding as much in terms of dollar reserves. Central banks have reduced their amount of dollar reserves. That is a, a separate piece, which really reflects the sort of, uh, you know, the shrinking power of, of the US. The fact that a lot of countries are very unhappy with us and the way we run the global financial system, the increasing realization that we are not in the unipolar moment anymore. For countries wanting to protect themselves from, you know, our ability to completely manipulate their financial system. And I, you know, my, the part of Peter Schiff's analysis there that I'm skeptical of is I don't know that it happens in this big collapse all at once, but you can see this sort of slow and steady erosion moving in a direction away from the US being the central player in, and, you know, the one and only central player in the global financial system.
>> Yeah. Right. And by the way, as we speak, gold is currently at $5,500 per ounce. It's insane. I mean, I literally, I mean, not only not sitting like this, but everyone's calling it safe haven. And yeah, you're right. I mean, this is again why I also generally look, the gold bugs, you know, many of them are also invested, and that's why I'm always a little bit, uh, skeptical sometimes of their analysis, but they have good critiques of the global financial system. And I think one of the things that, you know, you're pointing to, uh, is if we look at the way that empires kind of fade away, is that this is kind of, uh, sometimes can be a canary in the coal mine. Usually what happens is a great war. Unfortunately, what we just talked about was a war with Iran, you know, so, you know, who knows? It could be certainly something. So you see instability, then you have an outbreak of a great war, and immediately afterwards, usually what happens is you don't immediately acknowledge. You're like, "Oh, well, we're no longer an empire." But you slowly within the next decade, you know, find yourself no longer, let's say, the pound sterling, no longer as powerful as it once was. And you, you know, watch your empire kind of fade from 1919 all the way up until the 1960s. That's usually what the story can look like. Let's say the Roman Empire, any of these others, if you study this. But internally also, a key part of, uh, strength is not just how you trade abroad, but what happens to you at home. So yesterday we talked, or sorry, two days ago we talked about the long-term unemployment rate. We also have this AI data spending that's all been happening. You know, we haven't covered it in quite some time, but it is still like a massive monolith of all of our GDP per capita spend. And we're also beginning to see the effects of this in the white-collar marketplace. So, can we put B4 please up on the screen? This is a, you know, massively, uh, influential story. Amazon is set to ax another 16,000 corporate jobs. The cuts will bring the total number of layoffs to 30,000 over the last three months, and a higher spending on AI. And they said organization changes, reducing layers, removing bureaucracy. Most US-based employees would be given 90 days to look for a new role internally or offered severance pay. And the cuts, basically from 30,000, all appears to be part of the AI and how it would reduce the Amazon headcount, which they previewed last year in their investor letter. And this is, you know, the second round that we've seen, uh, already. If you total it up back to 2023, it's like tens of thousands actually that have, uh, been laid off from Amazon. So I think it's really, really important for people to pay attention, you know, in these white-collar tech more focused workplaces, because that can be a precursor to what's happening to you. And so if we have high unemployment, then we're have to going to be thinking also about our own domestic federal interest rate policy and how that interacts with the globe. Safe, like this is where chaos. I'm not saying it's the Great Depression, but you can see why the Great Depression was so massively influential, where we had to balance not only what was happening here, but with the global system itself, and how that unleashed, you know, an insane war in the Second World War.
>> Yeah. And from the sound of it, P is very unhappy about all of these developments, which I understand. If you can hear that, sorry. Uh, that's baby life. That that is baby life. They don't, they don't care about the microphone. In fact, she likes the microphone. She likes to come and to play with it whenever dad.
>> That's adorable.
>> There we go. Let's go ahead and put B3 up because I actually think this relates to the, uh, Trump account block that we're about to do here. So the, I really had to sit with this one for a while to figure out whether this was any meaningful in any way. But basically, um, people have been sharing this chart, and this isn't like, you know, a new invention that people use, but people track the stock market not only valued in US dollars, but also, okay, compared to the value of gold. And so this person says, if you measure the stock market in gold instead of in dollars, the US stock market has basically collapsed. No, I mean, this makes logical sense when you consider how much gold has gone up in price. It has vastly exceeded the, you know, returns, the increase in returns on the stock market. So that's the relationship that is being tracked here. And what this points to is that in a sense, some of the stock market gains are a bit of an illusion, because if the dollars are worth less, and you're valuing it in dollars, then it stands to reason that, you know, your store of value is not staying at the same level. So that's what this chart is is trying to establish. And, um, like I said, this will kind of shift us into this Trump account thing because what this administration has said is, first of all, they're very interested in stock market performance. It's the one thing that really causes Trump to, you know, I think it's a reason he backed down from his Greenland threat threats because he saw the market reacting. He didn't like that, and whatever. And they really talk about, as we move into this AI era, rather than having more progressive taxation, rather than having public ownership of the AI technology, rather than having some sort of universal basic income, their view is, well, why don't we just get everybody more invested in the stock market? And so then when Nvidia goes up, you guys, you commoners out there will sort of, you know, get the second order gains from whatever your holdings are in the stock market. That seems to be their view of how to handle the shift to the AI economy, where the idea is that you are going to be out of a job, and you know, you're going to have an even greater consolidation of wealth and power in the hands of a few. We're already starting to see in some isolated instances, like what we just covered with Amazon, that job loss. We're seeing an impact, you know, on college grads right now. And so that is the direction that they think they should push things in. And I think that is the, you know, the sort of genesis of the idea of these of these Trump accounts and these investments for babies, which are being, uh, piloted now.
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