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Steve Bannon
This is the primal scream of a dying regime. Pray for our enemies because we're going medieval on these people. I got a free shot. All these networks lying about the people, the people have had a belly full of it. I know you don't like hearing that. I know you try to do everything in the world to stop that, but you're not going to stop it.
Jim Rickards
It's going to happen.
Ryan Reynolds
And where do people like that go to share the big lie? MAGA Media I wish in my soul, I wish that any of these people had a conscience.
Steve Bannon
Ask yourself, what is my task and what is my purpose?
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Jim Rickards
War Room here's your host, Stephen K. Banner.
Steve Bannon
In the year of our Lord 2026, we had a fiery first hour. I'm sure we're going to have a fiery second. This is a very big event from the East Room of the White House. We're momentarily going to go where President Trump's his selection of Kevin Warsh as chairman of the Federal Reserve. Now if you go back in time, Warsh was a guy I fought for. They had three nominees back. They say three. I think it was two. It was between Kevin Warsh and Powell and Mnuchin just pushed Powell nonstop. And I said this guy's a third tier lawyer, investment banker, not even a major firm. Actually, it was over at Rubenstein's place with, with the soon to be governor of Virginia. I just thought this guy was a non event. So. But Kevin Warsh and Kevin Warsh was not selected. I think it had been perfect for President Trump in the first term. Kevin Wash is selected now. John Taylor was the other. That's one Dave Brat was talked about all the time. John Taylor at Stanford. Jim Rickards, you join us. You've got that tweet that Lisa Abramowicz is one of the smartest commentators. She's an anchor over at Bloomberg tv. Very, very bright. And I think she put up something today that should remind people. And well, here's one thing that struck me. Once you get interest rates up and you get into stagflation because you go back through Miller and Arthur Burns and getting off the gold standard of Nixon and you've got Volcker. That took. That was like 15 years, folks. Once that gets into the system, what you have to do and you have a Volcker and a Reagan, just doesn't happen. So as we sit here momentarily to have a new era under President Trump and Kevin Warsh Rickards, it's the perfect day for you. Where are we and what does this all mean, sir?
Jim Rickards
Thanks, Steve. You know that chart from Lisa Abramowicz, you know, nice job. I did look at it. It was very, very helpful. But it tells you almost nothing. And let me explain why. What she put up there, the data is absolutely correct. Those are nominal rates, meaning if you buy the 10 year note, that's the coupon you get for Paul Volcker. August 79, you got 8.9%. But those are not real rates, meaning you have to take those numbers and subtract inflation at the time to get to what's called the real rate that you're actually paying. I borrowed money in 1981 at 13%. That was my first mortgage. I told my mother, she cried because her first mortgage was like 2%. But I said, mom, yeah, it's 13%. But inflation at the time was 15%. So my real rate was negative 2 and it was tax deductible. I was in a 50% bracket. So my real rate was like negative 8, which is better than free money. The bank's paying me to be a borrower. And as you take those rates and adjust them for inflation, what you'll find is that the 8 or 9% in the Volcker days was actually negative 4 or 5, depending on the amount of inflation. War has a completely different problem, which is that nominal rate of 4.6 today. That's right. But inflation is about three and a half. So here's a positive real rate. So interest real rates are actually higher under WARS than they were under Volcker. When you adjust for inflation, that's the key thing because people are. You don't need a PhD to figure out nominal rate minus inflation is your real rate when you should be a borrower and when not. And American people get that, whether without economics degrees. So I think that's an important point to make. By the way, under Volcker. Yeah, 8.9% coming in, or approximately that number. It got up to 15, I remember. Well, throughout the early 80s, you could buy a 30 treasury note that yielded 13 to 15% for 30 years. It didn't mature until 2016 for 1986 treasury bond. So that's an important point to make. Now Warsh wants to Cut rates. He's kind of advertised as a hawk by nature. Maybe that's right. But he knows you got to cut rates. He can't cut them. Jay Powell laid a total booby trap that Wash. And Warsh knows it, but he's kind of walking right into it, which is the following. Go back to the last Fed meeting. Remember, it's not the Board of Governors, it's the Federal Open Market Committee, which includes all seven governors but also includes five regional Reserve bank presidents on a rotating basis except New York's permanent seat. That vote was 8, 4. You had four dissents. Now Steve Moran was, he wants to cut rates, so put him in a separate category. Three of the negative votes were from the regional Reserve bank presidents who, they're important. They get a vote, but they don't lead the way. Why do you have three Reserve bank presidents voting against the chair without the chair's permission? Well, Powell wanted that to happen. He basically fired a shot across the bow at Warsh. So don't even think about raising rates or, sorry, don't even think about cutting rates because we've got a, basically a large group. You're going to, you're going to have a split board from day one. And Wash gets that. So they're not going to raise rates. There isn't. But how certain slowdown.
Steve Bannon
I want to give the context. I want to give context for the audience and maybe not capital markets. That's experts. The reason that's so extraordinary is normally these are unanimous. They do that to also show the capital markets that the central bank is united in their thinking. Correct. To have an 8, 4 vote on the Federal Open Market Committee is pretty extraordinary. Correct?
Jim Rickards
Correct. That's correct. That rarely happens. And it caused Volcker to resign in the 1980s. It was, I think it was an 8 4, but he didn't lose the vote. But he said, well, if you, if you can't as chair, if you can't do better than that, then it's time to go. But here's the thing about Jay Powell and people forget this. Powell is poking a stick, two sticks in both of Trump's sides. Number one, he's still on the board. He's not the chair. Okay. Kevin Warren is being sworn as chair, but Powell is keeping his seat on the board as a governor and his term as governor does not expire until 2028. The chair is a four year term, but a governor is a 14 year term. So Powell still has over two years to go until 2028.
Steve Bannon
He's sitting on Hang on for a second. Hang on. Slow down. That's also extraordina. I don't believe that's. Is that ever happened? It might have happened back in the old days, but does that happen since Nixon? Has that happened since the 1970s where an actual former chairman would actually stick around?
Jim Rickards
It hasn't happened since the 1940s. 1949. Mariner Eccles. The chair stayed on past his term until 1951. So he stayed on two or three years, but that was the last time it happened. We're talking about 78 years ago. Okay, so the short answer is no, it hasn't happened since the 1940s. And Powell gets it. So think about what he's doing. He's depriving Trump of a vacancy. Because if Powell left, as all the other chairs have done since the 1940s, there'd be a vacancy and Trump would get another appointment. So Trump does not get that because Powell's sitting there. And number two, okay, Kevin Warsh is the chairman. He's going to walk into the boardroom. I've been in the boardroom with the Fed. He's going to look around. There's the, the guy who was chairman like two weeks ago sitting right next to you. Yeah, okay, we're just in charge. I get it. But how are you going to, like, you know, blow off Powell? It's kind of hard to do. And Powell has a lot of loyalty,
Steve Bannon
but he's not, but he's not going to be totally in charge because they're going to be leaking. How many of those economists, you know, the staff of a thousand, they're building, they've taken one of the most beautiful, iconic buildings in Washington, D.C. and they're building a behemoth. This is why President Trump wanted an investigation of what's actually happening down the Fed to build this huge office. All of that staff is been hired by Powell. I mean, this is like going. This is like Saigon in 1968. Kevin Warsh is the new head of the American military command going into a place that's totally controlled by the enemy, because it is totally controlled by the enemy. That's why Powell's sticking around for a reason. He hates Trump. He's trying to bring down President Trump. He, he had a, he had a rate cut in, not unparalleled in history at a rate cut before the 2024 election to try to boost, to try to boost Biden or Kamala Harris, the Biden, the illegitimate Biden regime. At the end, this is a guy that hates President Trump's economic program, hates the tariffs, every time he testified, go out of his way. Now you have a guy walking in, Warsh, who's an institutionalist, by the way. It's one of the reasons that so many people in the Senate appointed him. And the other thing you should know now you have a Senate in open revolt against President Trump, particularly the institutionalists, particularly the people on the Banking Committee and the Finance Committee. These guys are adamantly opposed to Trump. They're PAL supporters. So Kevin Warsh is working in a increasingly complex and dangerous economic situation. I keep saying we have a $300 trillion global debt, if you count everything up right, $300 trillion and we're about to have the world's largest margin call. We're going into very, very, very treacherous waters here, Rickards. I mean, you know it ten times better than I do. And now you've got a Federal Reserve that's not split. It's controlled by an enemy element that is adamantly opposed to President Trump, sir.
Jim Rickards
That's right. I worked with Jay Powell 30, 30 plus years ago when he was Assistant Secretary of the treasury for Federal Finance. And by the way, he was appointed by Geor Bush. He's a Bushy. And you know, I have a lot of respect for Kevin Warsh. I think it'd be a great, I think he's a great selection. But you know, don't discount his connections to the Bush family as well. Just look at the, the, the board of trustees of the Bloomberg foundation if you want to know who the power lead is. And you'll see there are worse connections all over there. So, so what the Fed should do, they're not going to, to be clear, but they should cut rates and cut them as quickly as possible. Moran's right about that. That's not what they're going to do. Powell is tied worse's hands.
Steve Bannon
Hang on, hang on. With interest rates exploding on the 30 and the 10. Just walk me through the mathematical logic of how you say you cut rates.
Jim Rickards
We have inflation right now, it's clear, but it's being caused by higher energy prices which feeds into everything, by the way. There's nothing you buy that gets delivered to your house or you buy in the store that doesn't arrive by truck one way or the other. So it's not just gas at the pump. That's a very big deal. And by the way, when people pay more for gas at the pump, it's not a free lunch. There's something else. They're not spending money on the demand for gasoline. Is what's called inelastic. And what that means is you have to buy it no matter what because you got to take the kids to school or go to work or whatever. But that means you take it out of something else. You don't go out for dinner, you don't buy new clothes, you don't go to a baseball game, whatever it might be. And that's what drags the economy into a recession. And then that's applied to everything because of transportation costs, because everything, everything moves by diesel. So what, what you're setting up is a global recession, a bad one, that's going to affect the United States. So and that, and we need to get ahead of that with interest rate cuts. This, this inflation comes from the supply side. Now, inflation, in the simplest terms, prices are going up. Okay, that's inflation. That's the definition I use. Pretty simple one. But there are two causes for that. One is from the supply side, where either there's disruption or higher energy prices being the main culprit or whatever. But that tends to extinguish itself because when you have those high prices for a long period of time, you cause a recession. Unemployment goes up and the prices start to come back down. The other kind of inflation is called demand pull, which comes from basically labor. So prices are going up, people demand a wage increase, their demand raises. People say, you know, I was thinking about buying an appliance. Maybe the price is going to be higher in six months. Maybe I better go out and buy it now. That's what happened in the late 70s. We don't have that right now, now is there. There's a danger that you tip from one to the other. It's a psychological phenomena that actually has nothing to do with the Fed. It's behavioral psychology. We could tip into that, but we're not there yet. It's more likely, in my view, that the recession, which is already hitting Japan and Europe and elsewhere in the world, even Russia had a down quarter. Japan's getting there, Europe's going into recession. US is not far behind to the extent that US GDP looks pretty healthy. And it does. I mean, we're not in tech, we're not in a technical recession. It's all the AI infrastructure spending. So, okay, plant equipment, Nvidia is selling real chips and they're building real data centers. Query whether any of that's going to be productive. Query whether it's not just a bubble that's going to collapse. But that's how we say it's a leverage.
Steve Bannon
You have a High. You have a higher. You have a high. Highly leveraged bet. Highly leveraged on AI. On AI kicking as being real. Productivity gains and productivity can be defined. A lot of it's going to be members of the audience, particularly your children under 30 coming out with those $100,000 of student loans and working their ass off since they were in the third grade to be a stem, you know, to be electro engineer, whatever. They're the ones ain't getting the jobs. So that's my point. So I still don't get. Let me take a break. We're gonna go think. Here's the reason. Rickards, if you get this pitch down to like three minutes, if you got an oval office, trust me, President Trump is looking. He's been waiting for you, okay? He's been waiting for you. He's waiting for somebody to come in and make the mathematical arguments a warship. I know you're independent, but, you know, listen to Rickards. I'll send you the clip from the war room with Jim Rickards actually arguing for a rate cut. This is why you come to war. This is why you get strategic intelligence. Rickards, war room dot com. That's the landing page. You want to get this kind of outside the box thinking from one of the smartest guys I know. Go check it out. Now they throw in a free book, chat GPT or money. GPT talks about fiat currency and artificial intelligence. Read chapter four. You want to stay up at night? Read about the chain of command of letting off a nuclear weapon with artificial intelligence in charge. It's a little different coming from Rickard than Joe Allen. This one will keep you up at night. Records is with us. We're going to the East Room. There's a lot going on as we kick off Memorial Day weekend here in the world.
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Joe Allen
Here's your host, Stephen K. Band okay
Steve Bannon
Birch Gold My favorite ended the dollar empire. Find all about it. Fiat currency. Remember, the dollar is doing quite well against other currencies because that's because it's the fiat world's tallest midget ain't doing so well when you talk about against hard assets. But find out. Understand all that. Go to birchgold birchgold.com Bannon it's not a promo code.
Jim Rickards
Slash Bannon.
Steve Bannon
Enter the Dollar Empire. Go check that day. Talk to Philip Patrick and team. Also we have the renowned Jim Rickards from strategic intelligence people throughout the world. The C suite reads them all the time because of predictive analytics. Jim, here's what I want to do. I want to go back, I want to hit rewind because I'm going to get, I'm going to get this in like a three minute clip and we're going to send it to the President because he's been, he's been waiting for you because he's cutting on CNBC and Bloomberg and the war. You can't cut rates now because of the message that has happened because of this war. And where inflation is, you take the exact opposite. So I'm going to give the floor to you two or three minutes and make the case to the President of why he's correct. And that was the first thing that war should do, is to cut rates.
Jim Rickards
Sir, when you talk about interest rates, you have to talk about real rates, not nominal rates. A 4% real rate, sorry, a 4% nominal rate with 3% inflation is a 1% real rate. A 9% nominal rate with 13% inflation is a negative 4% real rate. In other words, real rates were lower during hyperinflation under Volcker than they are today because inflation is much lower now. Inflation is a problem, but it's a self correcting problem. The cure for high oil prices is high oil prices leave them at these levels long enough, which I do expect, by the way, they're not going to be open straight up and moves. This is just going to get worse. So inflation is going to start to fall. Not for good reasons. It's going to fall because people are unemployed. If you're unemployed, you don't have to buy any gas.
Steve Bannon
You're saying demand just to make sure people. You're saying demand destruction is going to cause it default because you're going to have less people purchasing. Correct?
Jim Rickards
Correct. So when inflation comes down, which it will, real rates are going to go up unless you cut nominal rates. The rate the Fed actually controls is a nominal rate. You got to cut it. Well, why not get ahead of that? What are we waiting for? And that's, I think that's what's in. I can't read Warshaw's heart, but I think that's what he knows he should do. But how has, but you and I have talked.
Steve Bannon
Hang on. You and I have talked behind, you know, we talk a lot behind the scenes. I want you to make the case. You say this to me all the time. You say, hey, look, Trump understands capital markets and particularly the bond market because he was a Major developer. And these guys live or die by borrowed money. They say he understands capital markets. He particularly understands interest rates, and he understands the bond market far better than many people on Wall street, including most economists you see on tv. Is that correct?
Jim Rickards
Yes. When you put up a building. So Trump's a builder and the building management and all that. When you put up a building and it's fully leased, you have a steady stream of income because all your tenants are paying rent. You also have debt because you borrowed money to build the building. You have to pay interest on that. So it's just like a bond. And by the way, that's how real estate people think about it. They talk about internal rate of return, the different metrics, but a building, a fully leased commercial building, is basically a bond. So, yeah, Trump's a real estate guy, but his intuitive understanding of interest rates, what we're talking about, the difference between nominal and real, the spread between what you're making and what you're paying, he gets all of that. And so, like I say, you don't need a PhD in economics. PhD is probably handicapped these days. But, but Trump gets it and he, that's why he picked Warsh. And it was a good pick. I think Warsh is a very good pick. And I think Warsh wants to cut rates, but he can't because Powell has tied his hands in two ways. They lined up the regional Reserve bank presidents as no votes. And no one, no one, no one wants to walk into the first board meeting and get voted. You win 8 to 4. That's not a win. That's. That's embarrassing. And Warsh doesn't want that. And Powell still on the board, so it's, it's a problem.
Steve Bannon
Walk me through how do you believe that? Give me your perspective on how you think Warsh is going to present himself today. They'll say the President and Bush will say a few words. I think it's very unlikely. They take questions from the media, but you never know. President Trump breaks precedent all the time. I think they would want Warsh to get into the saddle a little bit, but we'll see already. I will just tell you, they're 20 minutes, they're 20 minutes late. That means the President's having, they're having a chat in the Oval Office, I'm sure, about all this. What do you think? Talk to me about today. What do you believe he may say to the media or say to the country, then his first day at the Fed, given the record she's going into, including massive government Investigations about. You've seen the building, I mean they've taken the most beautiful, really, I think kind of art deco, I would say Art deco structure from the, from the, from the New Deal, from, you know, early 20th century United States and built this monstrosity next to it. What do you think Kevin Warsh is going to say and what do you think he's going to do on his first day as Federal Reserve Chair?
Jim Rickards
Well, he has to talk about inflation is too big to ignore. It's real. And again, every American sees this, so there's no question about that. He has to say we're going to do something about inflation. But the problem is going back to what I said earlier. If inflation is coming from the supply side, it tends to be self correcting. But he cannot say that because you're back. Remember Powell and was it 2022 using the word transient? He said transient. Transient. And then it wasn't transient. June 2022, inflation was 9.1%, the highest in 40 years going back to the 1980s at the time. So he can't get in the weeds that way. He knows it, but he can't talk. So his hands are tied. So he'll say, we understand inflation. It's part of the dual mandate. The dual mandate, by the way, is nonsense. Well, it's the law. I mean, they have to, they have to respect the dual mandate because it's the law. But it's actually two things
Steve Bannon
very important because you've been admirable. The dual mandate that we have, the actual dual mandate is about employment and the cost of money. Correct. And you're saying they're mutually exclusive. We should get rid of the employment part of the mandate.
Jim Rickards
Absolutely. The idea, the theory of the dual mandate was that they're reciprocal. In other words, if unemployment is high, interest rates are going to be low. So we just focus on unemployment. And if unemployment is low, interest rates might be going up. So we need to focus on interest rates. So it's kind of like a seesaw. That's the theory. It's actually expressed in something called the Phillips curve. It's nonsense. There is zero empirical proof that the Phillips curve even exists and that those two things are reciprocal. You can have high, high inflation and interest rates as we did in the 70s, you can have low, sorry, high unemployment.
Steve Bannon
When this dual mandate put up in the panic of high unemployment and also high inflation, high interest rates, they figured they had to do something. So let's just give the Federal Reserve another mandate.
Jim Rickards
Yes. And it was sponsored by Hubert Humphrey In Minnesota. I don't know what's up in the water in Minnesota, but it was the Humphrey Hawkins legislation that created the dual mandate is statutory. Sounds good, except it doesn't work in the real world. And again, Bush knows all this, but you can't quite come out and say it. So right now the Fed has to focus on the inflation part of the dual mandate and not worry about unemployment for the time being. What I'm saying is that inflation is going to take care of itself. Unemployment will not take care of itself. That's going to go higher and that's going to be a problem. And again, I respect Warshaw. I think he knows what we're talking about. But his hands are tied both by the political reality and by Jay Powell.
Steve Bannon
Hang on one second. We're holding. Do we have the cnn? Can we play the. I want to. I'm going to shift artificial intelligence. I got time in this thing. Can we go and play it? And we're going to go to break that. And then Joe Allen's going to jump back in as we wait. Jim Rickards. We're going to get Rickards to hold on. Let's go and play.
CNN Correspondent
It is real. I mean, me looking at that, I'm getting anxious and I'm not in school like this. This is a real concern for students who are graduating young. People really don't seem to like commencement speakers when it comes to AI. I. This tells you why. Correct?
Ryan Reynolds
This tells you a big reason why. And in fact, you can see it in the numbers, right? I mean, just take a look at those under the age of 30, among age 18 to 29, impact of AI in the number of jobs. Just 27% believe that I will increase the number of jobs. Look at this number. 73%, 73% say, in fact they believe that I will decrease. Will decrease the number of. Of jobs. This 73% looks an awful bit like this. 70% on this side, on this screen. Right. So what you're seeing here is a lot of students are worried about the job market. And you can connect the dots, which is what I like to do. A big reason why they are worried is because they believe that I will in fact decrease the number of jobs. And that is why you see those undergraduates really not liking those commencement speakers speaking about AI because they're worried for their liabilities, livelihoods.
Steve Bannon
Yeah.
CNN Correspondent
And it's not just decreasing the number of jobs, that's one thing.
Ryan Reynolds
But well paying quality jobs. The quality jobs.
CNN Correspondent
So let me ask you about the overarching how do Americans in general, not just the young, not just the graduates feel about.
Ryan Reynolds
Yeah, this is one of those things where you get the real rare time in which Americans are really connecting on this issue from the left to the right. I mean say I will make it harder to get a good job. You see among all adult results at 63% on the left side you get 68% in the middle, 68%. And even on the right you get the rare trifecta, the left, right and middle. The majority all agree that getting a good job will in fact become harder because of AI. And of course the students are the ones who don't currently have the jobs and that is why there's all that apprehension right now.
CNN Correspondent
So this is, is how they feel. But are they right? When you look at the numbers of the numbers of layoffs, for example, that companies have blamed on AI.
Ryan Reynolds
Yeah. Okay, so you know, you can take a look at the cashier prediction market and what is the chance that 2026 tech layoffs will exceed 2025? That is more than 447,000. You can see that it is a very clear we are approaching percentages probabilities that we very rarely ever get. And so to me this is part of, of the picture where you got a lot of the fear. And the fear in this case is backed up by the numbers, at least initially. Of course we're going to have to wait and see as we go down the road with AI. A lot of the proponents of it believe that in fact create more quality jobs, up the number of jobs, just different types of jobs. But at least in the immediacy when it comes to tech layoffs, it looks like those are going to be higher than they were a year ago, at least for the people who are putting their money where their mouths are.
CNN Correspondent
Yeah, we're seeing, you know, companies dump large amounts of money into AI that does not necessarily equate to more jobs or the jobs that they need.
Steve Bannon
Correct. Okay, we're going to go to break. I'll bring Rickards and Joe Allen both on this, attacking it from different, different angles. Rickard just talked about unemployment. You see the booing off the stage of these oligarchs or the running dog for the oligarchs because the people are not buying it. The reason they not buying it, they shouldn't buy and spoon fed lies. And now they're seeing reality. Check out hometitle lock.com. talk about artificial intelligence and cyber coming together. Your worst nightmare, every dream you ever had is in that home. Make sure it's not turned into a nightmare with artificial intelligence and cyber hometitlec.com promo code. Steve Talk to Natalie Dominguez and the team of the $1 million triple lock protection that you get free for two weeks as a trial. No downside. Short
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Martha Stewart
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Jim Rickards
War Room here's your host, Stephen K. Band.
Steve Bannon
Wow. Amazing poem to sing about Mike Lindell, hopefully we get through that. They're letting the press in now to the East Room, so we're going to momentarily be going there. I want to get both. Joe. So Joe, what you just heard on cnn, the polling you had Cochrane on here the other day, you've seen where the polling is now, people worried about AI and their jobs. Your thoughts?
Joe Allen
You know, Steve, I call this the great demoralization. You have all of these students, you have people who are in the workforce right now. They're being told that most or all of these jobs are going to disappear within, certainly within their lifetimes. But then you have really aggressive predictions like Dariel Madei from Anthropic recently predicted that something like half of all white collar jobs gone in five years. Right. Then you have guys like Mustafa Suleiman at Microsoft saying that within 18 months any job that requires someone to sit at a computer will be evaporated. Right. Really aggressive.
Steve Bannon
Hit me that because it's important. Microsoft makes their money off selling software to people that sit at computers. Tell me that.
Joe Allen
I mean, this is Mustafa Suleiman. So this is not exactly a, a sober observer of all of this. Right. He's talked a lot about AI as a species, all these sorts of things, but he predicts that within 18 months we will see all white collar jobs at least being replaceable by AI.
Steve Bannon
Now I'm sure that said at computers,
Joe Allen
yes, I'm sure James Rickards probably has a much more measured view on this. But these guys, by the way, these
Steve Bannon
guys are trying to also signal to Wall street where Microsoft there's going to be big issues. Sure. These are credentialized people one way or the other.
Joe Allen
To me, it's just a massive demoralization campaign. When you've told everyone that their jobs can be replaced, then you not only threaten that they have no leverage, no negotiating power in the workplace, but you give them the sense that they don't have any power, that they're going to have to kowtow to their bosses. Because if they believe that in five years or in 18 months their jobs are going to be replaced, then they're not going to have as much backbone. They're not going to feel as secure negotiating their wages. And you also see that in the students that are incoming. They hear all of this and they're like, oh, AI is nothing but a competitor to me. I think again, I'm not going to hazard any kind of definitive prediction on what the labor market is going to look like due to AI, certainly not in the presence of Rickards. But I do think that any approximation of it is going to be detrimental to human workers in the workforce. And all of this messaging, all the messaging that you can and should be replaced is so anti human. It's amazing to me that these people aren't dragged away and put into padded rooms.
Steve Bannon
Wow. Jim Rickards, your thought on all this?
Jim Rickards
Sir, Joe's exactly right about what people are saying, the forecast and the fear factor. So he's correct about that. But here's a little bit of good news. How does AI work? AI trains on what's called a training set, which is basically the whole Internet. But AI produces. It gets pretty good results, but then it produces what they call slop. Might have come up with a better word, but that's the word. Okay. But the slop output is now populating the Internet. So progressive iterations of AI are training on more and more slop and producing more and more slop. It's actually getting worse, not better, number one. Number two, by the way, I've written nine books. I wrote every word of every book. But I talked to publishers. They're saying authors are now submitting books which are plainly written by AI And AI could write a book that's not that difficult. But they're still, you can tell. What I'm seeing is people are saying, you know what? AI is getting worse, not better. Give me a subject matter expert. I purposely do not use AI. I don't click on Brock or Gemini, all these. I purposely don't use them because I don't want to degrade my own critical thinking and analytical abilities, which is, you know, which what I rely on. And that is what you say that.
Steve Bannon
But hang on a second. If you use Google, I agree, I don't use any of these AI. I think it's demonic. I think you're summoning the demons. So I don't do it. I will tell you, I think one of the competitive advantages I've had for many, many decades is how basically well read I am. I can see that AI is not going to give the critical thinking, but guys can go in and do what's taken me decades to know. Bang, you can hit it. And is going to give you maybe not a bad summary. But Jim, you can't go. Even if you don't want to use AI and you want to be a Luddite, you can't go to Google. Google's whole thing right now it's at the top and it's five more things below it that are sponsored links about AI to Get down to anything that had the human element at all. All you got to almost go down the whole front page or you got to keep scrolling. So how do you avoid artificial intelligence if you want to use a search engine?
Jim Rickards
Well, you can't avoid. Well just don't click on those particular applications. I mean you're right, it's there, it's in your face. Look, AI is here to stay. It's powerful. It is not creative. There's something called the law of conservation of information in search. Geeky name. But it's very well demonstrated mathematically. AI cannot create anything. It can find things that humans would have difficulty finding. It could do it faster. I don't doubt that AI will find cures for certain diseases. In fact it already has. But those are out there and they're waiting to be discovered. That's not creativity. Only humans can actually be creative as an artist, a writer, et cetera. So AI cannot do that. Number one, the slop factor is getting bigger. Number two, I can point you to experiments where five year old children in a playgroup outperformed AI when it came to simple tasks like drawing a circle, et cetera.
Steve Bannon
Hang on, hang on. To go back on employment, you do you do believe that the AI jobs apocalypse, particularly in STEM workers, because they're not going to need coders. One of the reasons I know this is some of my nephews and some of the younger people in my, in my family and extended family who are pretty good in this whole software thing, they'll tell you now that starting a year ago their staffs were cut in half because, and they spend half their time managing AI now that to the point that they keep a couple of superstars around, but the 80% of people they used to have employed in high value, added pay and big paying jobs are gone. Those billets are literally gone. You do agree that this highly leveraged bet as a country we're doing on artificial intelligence and the trillions of dollars that essentially ain't coming from equity capital, a lot of it's borrowed that the way they're going to get their productivity increases is to get rid of the human factor.
Jim Rickards
Sir, I agree with that completely. That's absolutely what's happening. And you're right. But what they're going to discover is that they're not going to get the productivity increases they expect. They're going to do exactly what you said, Steve. The description was perfect. And soon, sooner than later, they're going to find out this doesn't work and they're going to Say, hey, get me a nurse or a doctor or a writer or someone who actually knows what they're doing.
Steve Bannon
Joe Allen that's bombshell because you're saying, like when Joe says 50% of the white collar jobs a guy from anthropic, he's talking about lower level lawyers, the medical technicians, maybe not the brain surgeon, but half of those go. And you're saying, joe, people are going to find out pretty quickly that the machine ain't as good as a human. Right? Joe Allen.
Joe Allen
Well, I have to agree. I agree with Jim Rickards on a number of points here. I need to set those agreements out first. Number one, I agree that using these tools does not help you as a writer. It. The real force comes from within. It's the human creativity is central. I also agree that.
Steve Bannon
I gotta stop you right there. We'll get into this in a deeper. But here's why. Right now there are people. Because you are a writer. You're a writer of heart. That's one of the reasons I saw you at the Federalist. I said, hey, this guy may be a guy. That is a guy, a roadie, as we call him, but he's a brilliant writer. Because you love to write. You're a writer. Hey, 90, 80% of the people that are making their living off writing don't love writing. It's a job. They got to get it done. Those guys using AI all the time. I get stuff every day that I can tell with my trained eye that is either coming from machine or more importantly, a human tucking it in and it's doing the heavy lifting.
Joe Allen
So I've got to agree again, I'm just setting out the agreement as an olive branch to.
Steve Bannon
Before you come in with the wax.
Joe Allen
Yes, because I do believe that human creativity is far superior to anything artificial intelligence is capable of doing at present and will be capable of doing. And even if AI was better, I still think you have to give humans preference because we're humans. You might say I'm racist against robots. But as far as the AI basically degrading at this point, I have to disagree on that. I mean, if you look at the evaluations that are very rigorous, the evaluations.
Steve Bannon
What do you disagree?
Jim Rickards
Meaning?
Joe Allen
Meaning that as the AI slot fills up the Internet, it then has been used to train the AIs and therefore the AIs are degrading. This isn't really true. The ability to. The companies are curating the data sets in ways to account for that. And simultaneously improvements in architecture, improvements in reinforcement learning, expansion of the Neural network, what you're seeing is an increase in capability. If you look at the benchmarks that are put out by people like the center for AI Safety and the Humanities last exam or Artificial analytics and the Omniscience Index or Apollo Research or any of these guys, what you see, you have to account for the hallucinations. You have to account for the fact that these systems.
iHeartRadio Announcer
What does that mean?
Steve Bannon
Tell the audience what that means. I don't want to get over.
Joe Allen
You have to account for the fact that these systems will oftentimes simply make things up in order to please kind of the human user. But that is a minority of cases. And if you look at the way in which they're tested on mathematics, which is just demonstrable, it can either do advanced mathematics or it can't. And they are steadily increasing in the ability to do PhD level mathematics. If you look at Omniscience Index or humanity's last exam from the center for AI Safety, what you see is on everything from medicine to business to biology to economics. Be careful, Jim, that these systems, not every time and not in a genius creative way, but they're able to answer Questions at a PhD level and assemble essays at a PhD level which are accurate, meaning that they are better than 99% of human beings except for when they make things up. So it's a mixed bag is what I'm saying. But definitely I don't think we can just simply count on the likelihood that these systems are going to get dumber and dumber and dumber. I think what we need to worry about is that human beings relying on these systems will get dumber and dumber and dumber and they will be out competed because they have degraded themselves.
Steve Bannon
Rickards. That's one of my concerns. If you start relying on a, particularly if you put it into the schools, in the education system, you're gonna have people that have no. You can tell right now, even when you go to Google, the way it lays out. You can get through a lot by just, you know, memorizing, etc. But it doesn't do anything for your ability to think through things, to connect dots, to do your own pattern recognition. It's doing the pattern recognition for you. That's why I think you're correct about half the white collar jobs, at least initially. I think a lot of people are going back and saying, hey look, I just don't want AI with some senior partner in a law firm that I'm really dealing with the machine. Or you know, instead of some, some medical technician or somebody working for a doctor. I got a machine that's not working. Jim Rickards, your thoughts on that before we go to break? Yeah.
Jim Rickards
By the way, Joe is exactly right about curating the training set and I should have said that myself, but he's correct. The more curated the training set is, the less slop is in it and the better the output. So that's exactly right. Except who's doing the curation? You need a subject matter expert. You need a human to actually do that. And so. Yeah, but that is one of the solutions by the term that's doing a better job with that is anthropic. A couple of weeks ago, I solved a math problem that Erdos had proposed. If you have two points in a plane, how many can there be? Basically, what's the math to solve that problem? AI solved the problem. It was a combination of geometry plus an advanced form of algebra. Humans hadn't been able to solve it for 80 years. That's true. That's a real solution. Nice. Gone. But my point is that solution was out there and AI found it, but they didn't create it. That's that, that's the difference. And that's where there are many things, where you need the creative factor and humans are not going to go away. And I'm hearing from, you know, people say, you know, like I said, get me, get me a real, give me a subject matter expert. I can't over rely on.
Steve Bannon
Hey, the President, United States is coming into the East Room. We're going to cut live. It's going to go through the Charlie Kircher.
iHeartRadio Announcer
Here we go, Sam. Now, I thought that was for me. I was very unhappy. I looked around and I saw they're all looking at you. I was not happy about that. That's amazing. That's an amazing, amazing audition. And I'll tell you what, it's. You have the most important business people and people, political people that you can possibly have in one room that soon will be a much larger room than this. We'll have a room substantially larger, larger than this, which is, which we really do need because we would have had five times this crowd. Everybody wanted to be here to be with you. And it's an honor and today I'm thrilled to welcome you to the White House. The most beautiful building. I love this building. We fix it up all the time. That's the real estate business in me and it's in tippy top shape. Finally, but for the swearing in of our new chairman of the Federal Reserve Board of Governors Kevin Warsh. And I expect he will go down as one of the. The truly great chairman of the Federal Reserves that we've ever had. I really believe that. I think he's. He's got abilities that very few people have. That covers a lot of territory, and he's respected by everybody, and that's so important in that position. Congratulations to Kevin and to his wonderful wife, Jane. Jane, thank you very much. Fantastic. And your very beautiful family. You have a beautiful family. Congratulations. It's a big deal. We're honored to be joined by some incredible people. Our speaker of the House, Mike Johnson, who is doing an unbelievable job. Mike, thank you very much. He's working very hard on the Save America act, but I will not say that he'll get it done, too. He gets everything done. Thanks, Mike. Supreme Court Justices, and they are great. Clarence Thomas and Brett Kavanaugh, Secretary of the Treasury. He's like central casting. Scott Besant. If we do a movie on someday, we're going to need a Secretary of the Treasury. We're starring him. I think we'll put him in there. Right. He's done a. He's done a good job. Secretary of Agriculture, Brooke Rollins. Brooke, thank you. Secretary of Commerce, Howard Lutnick. Thank you, Howard. Secretary of Transportation, Sean Duffy. Thank you, son. Acting Secretary of Labor, Keith Sonderling. CIA director john radcliffe. Thank you, john. Omb director, russell vogt.
Jim Rickards
Thank you, russell.
iHeartRadio Announcer
White house chief of staff, susie wiles, Director of the National Economic Council. The other Kevin. I was, you know, they kept talking about Kevin, Kevin, Kevin. And he's a good man. You're going to be working with Kevin Hassett, Director, Director of the Federal Housing Finance Agency, Bill Pulte. And thanks as well. We have so many political leaders, and I just see a few. And you have Tommy Tuberville, soon to be a governor, right now, a very successful senator, Dave McCormick, who's a phenomenal guy. Wherever you may be, Dave. Wherever you may be. And Andy Barr just had a big win. He won by 40 points. Where's Andy? Congratulations. That was a big win. Andy, I'm proud of you. Did the endorsement help? Dan Muser, my friend, who's a fantastic congressman. Dan, thank you very much. Elise Stefanek. Elise, hi. And a highly respected guy, another friend of mine, French Hill. Thank you. Thank you, French. Also with us, former Vice President Dan Quayle. Haven't seen Dan Quayle in a long time. Where's Dan Quayle?
Body by Jake Radio Motivational Voice
Wow.
iHeartRadio Announcer
You look good. You look good. That's nice to see you, Dan. Very nice. Former speaker of the house. Kevin. Kevin McCarthy. Kevin. Good guy. Former Secretary of State Condoleezza Rice. Highly respected. Highly respected by everybody. Me, too. Former Governor Glenn Youngkin done a great job. Great governor of Virginia. And they. They try and take it apart as fast as they can, but you did a really fantastic job. Thank you very much. Len. And many others. Tremendously distinguished. The biggest leaders of business and the biggest leaders of politics other than the ones we mentioned. This is quite an assemblage of talent. I see the Southern District over here. Will you stand up, please? Southern District. Jay, stand up. And I don't know if our acting Attorney General is here. He's pretty busy. He's kept very busy. So if he is. If he isn't, I'll just tell you he's doing a very good job working together. Right? He's doing a great job, actually. So no one in America is better prepared to lead the Federal Reserve than Kevin Warsh. Kevin received a degree in public policy from Stanford University and then earned a J.D. from Harvard Law School. He studied under the renowned economist Milton Friedman and was mentored by the legendary Secretary of the treasury and Secretary of State George Shultz. All legendary names, really. Kevin has worked at the highest levels of the financial world. As an executive in the private sector, he did very well. And he served at the highest reaches of government as a senior economic adviser in the White House. He knows the White House very well. He's walking through the White House. He's pointing things to me that I didn't even know. At the age of 35, he became the youngest ever Federal Reserve governor. For the past 15 years, Kevin has been a fellow at Stanford's Hoover Institution. And his credentials really are second to none when you hear them. And there's plenty more. I know that Kevin has the deepest respect and reverence for the institution he will lead starting today. We're so lucky to have him. The Federal Reserve is a pillar of the world financial system and the most important central bank anywhere in the world. With a history stretching back more than 100 years, it is truly the institution that's most looked to and most respected. And it's now taken on a new and even higher respect, in my opinion. And honestly, I really mean this. This is not said in any other way. I want Kevin to be totally independent. I want him to be independent and just do a great job. Don't look at me. Don't look at anybody. Just do your own thing and do a great job.
Jim Rickards
Okay?
iHeartRadio Announcer
Unfortunately, in the eyes of many, the Fed lost its way in recent years, it became distracted by concerns far removed from its core mission and mandate, drifting into matters such as climate policy and DEI initiatives. With the Fed straying from its mandate, while the last administration blew out the deficit, Americans suffered the worst inflation that we had in history. It was the worst inflation. As, you know, some people say you're wrong about that. It was only in 48 years. But I think 48 years almost sounds worse, the worst inflation we've ever had. So it made it very difficult. Kevin has spoken often about the need to restore the Fed's integrity by returning to a proper focus on its two functional and really fundamental responsibilities, maintaining price stability and low inflation and achieving full employment. And we talk about it. We've talked about it often. And right now we have the most people working in the United States than we've ever had. We have never had as many people working right now in the United States. And it's something that I like to say, and it's been pretty much that way ever since I've been president. When I go back to the first term, I had those numbers, too, and I kept them. And we've done things that are really amazing. But we can bring it to a new and higher level with Kevin, I think we can bring it to a level that nobody ever thought possible. By following through on this vision, Kevin will restore confidence in the Fed, which is so important and among Americans all across the political spectrum and people from
Body by Jake Radio Motivational Voice
all over the world.
iHeartRadio Announcer
And they're going to be looking to Kevin, probably, and possibly more than any other person that's had your esteemed position before. I think that's true. Kevin, you got a lot of people watching. I fully expect that. With the greatest Fed chairs before him, Kevin will safeguard the Fed's integrity. They'll make their own decisions and hopefully make them well. But they'll be listening to Kevin all the way. I really believe that even if they're from a somewhat different persuasion, they're going to be listening to him out of respect, because everybody respects him. Thankfully, unlike some of his predecessors, Kevin understands that when the economy is booming, it is. That's a good thing. We don't have to go crazy. Just let it boom. We want it to boom. We want it to be like nobody has ever had before, because we do have some debt we'd like to take care of. And the way you do that is through growth, we're going to grow our way out of it so fast. And Kevin somebody, and I feel strongly also, we don't want to see it stifled. We want to stop inflation, but we don't want to stop greatness. And so that's really a very good thing, a very positive thing. And that's what he's looking to do. He's looking to do positive economic growth. It's so important. And as we discussed, economic growth doesn't mean inflation. It can be just the opposite, actually. But economic growth does not mean inflation. You don't have to stop the world because you're doing well. Kevin has also said that he'll bring much needed reform and modernization, transforming obsolete data collection methods, rolling back reliance on inaccurate models, and curtailing the Fed's practice of issuing so called forward guidance. They want to do things on that. I guess it's a little complex subject, but it's something that Kevin knows about better than probably anybody here. He has the temperament and leadership abilities to foster collaboration among the entire board. And I know he will welcome robust debate in his mission to keep prices stable and employment high. Kevin will have the full support of my administration. Every one of these people felt, including Kevin, by the way, felt so strongly about this choice. And we have no doubt, we have absolutely no doubt. So important too. So big. So important. I just turned on the television. I want to see how the stock market's doing today. Stock market's up 600 points. That means they like you.
Martha Stewart
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Turn Someday into Right now with Buddy by Jake Radio Non stop workout Music and expert tips 247 hey.
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Awesome health and wellness tips 24 hours a day, seven days a week.
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Remember, stick to the fight. When your hardest hit, it's when things seem worse that you must not quit. Don't quit.
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I heart Radio.
Episode: CORNYN "JUDGEMENT DAY IS COMING", TEXAS ELECTION NEWS, SAVE AMERICA ACT
Date: May 22, 2026
Host: Steve Bannon
Guests: Jim Rickards, Joe Allen
Main Theme: The appointment of Kevin Warsh as Federal Reserve Chair; economic and political implications; interest rate debate; AI, jobs, and the future of the workforce.
This episode of War Room AM centers on Donald Trump’s high-profile swearing-in of Kevin Warsh as Chairman of the Federal Reserve, dissecting the economic challenges ahead and the political intrigue behind the selection process. Steve Bannon and financial expert Jim Rickards delve deep into Federal Reserve mechanics, stagflation risk, interest rate policy, and the U.S. debt market. In the latter half, the episode pivots to anxiety about AI’s impact on jobs and creativity, as Bannon, Rickards, and tech columnist Joe Allen weigh public fears about a looming white-collar employment apocalypse.
Background & Political Chess
Dissecting Data & Fed Decision-Making
Bannon outlines how Powell remains as a shadow power and the Senate is openly hostile, making any major financial shift perilous.
Quote:
Polling and Public Anxiety
Debate on Human Versus Machine Creativity
On AI’s “Slop” Problem
Bannon on Fed politics:
"Kevin Warsh is the new head... going into a place that's totally controlled by the enemy." (10:49)
Rickards on rates:
"PhD is probably a handicap these days. But Trump gets it and that's why he picked Warsh." (23:39)
Joe Allen on AI demoralization:
"To me, it's just a massive demoralization campaign... all the messaging that you can and should be replaced is so anti human." (37:37)
Rickards on AI slop:
"AI produces... slop. Might have come up with a better word, but that’s the word. Okay. But the slop output is now populating the Internet." (37:45)
Bannon on AI and productivity:
"The way they're going to get their productivity increases is to get rid of the human factor." (41:38)
Rickards, contrarian summary:
"Sooner than later, they're going to find out this doesn't work and they're going to say, hey, get me a nurse or a doctor or a writer who actually knows what they're doing." (41:38)
War Room Opening Rant — Bannon sets the tone
[02:53]
Rickards explains real vs nominal rates, Volcker vs. Warsh
[05:29–08:37]
Bannon highlights Powell's lingering power & historical precedent
[09:39–10:49]
Interplay: Powell’s political maneuvering, Senate hostility, $300T global debt
[10:49–13:26]
Rickards: Inflation now is supply side; Cut rates pre-recession
[13:40–16:17]
AI infrastructure, speculative growth, and rates
[16:17]
Bannon and Rickards debate rationale for a rate cut (summary pitch for Trump)
[21:07–23:39]
Warsh’s likely approach and limitations as new Fed Chair
[25:58–28:41]
CNN polling segment on AI jobs anxiety
[28:54–31:40]
Joe Allen and Jim Rickards debate on AI’s real impacts: job loss, human creativity, slop
[35:16–47:59]
The discussion is fiery, adversarial, and overtly populist in its framing. Bannon leans into combative metaphors (“going medieval”) and adversarial language (“enemy element”), while Rickards provides a more academic contrarian analysis, breaking down complex economic concepts with concrete personal anecdotes and practical explanations. Joe Allen contributes a philosophical bent, linking AI and job fears to broader societal control.
For listeners seeking a clear-eyed, critical appraisal of U.S. economic and technological crossroads—with a populist, combative edge—this episode delivers sharp insights, insider analysis, and ample rhetorical fire.