Justin Wolfers on Trump's Economy as Pressure Mounts

Summary

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The MeidasTouch Podcast – Episode Summary

Episode Title: Justin Wolfers on Trump's Economy as Pressure Mounts
Date: July 19, 2026
Host(s): Ben, Brett, and Jordy Meiselas
Featured Guest: Justin Wolfers (Chief Economist, MidasTouch Network; Founder, Platypus Economics)

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Overview & Main Theme

In this episode, the Meiselas brothers dive deep into the dire state of the U.S. economy under Donald Trump’s presidency, focusing on surging debt, market volatility, and the impact of Trump’s war in Iran. They welcome top economist Justin Wolfers for a candid, data-driven conversation about how Trump’s erratic behavior is ripping away economic stability, intensifying global tensions, and undermining trust in the United States at home and abroad. The brothers blend their trademark humor and banter with pointed analysis, shining light on policy failures, market manipulation, and the consequences for everyday Americans.

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Key Discussion Points & Insights

1. The Economic Reality under Trump’s Presidency

• The hosts criticize Trump’s claims of economic strength, directly countering with data:
  • National debt nearing $40 trillion; Trump added about 30%.
  • Everyday costs (housing, groceries, gas) spiraling out of reach.
  • Foreclosures up 21% from last year, and 30% from two years ago.
  • Delinquencies in credit cards, student loans, and medical debt at all-time highs.
  • Consumer sentiment at “historical lows.”
    [02:00–08:00]

Notable Quote

“Let’s just talk about the data because that’s what we do here at the MeidasTouch Network… You know the struggle to pay rent, you know that housing is not affordable, groceries are not affordable, gas prices are going back up.” – Political/Economic Commentator [02:00]

2. Market Instability: Oil, Housing, Wall Street

• Detailed look at market disruptions caused by the ongoing war with Iran:
  • Oil prices up 20% in just over two weeks, approaching $90/barrel.
  • Crack spreads (refinery profit margins) at all-time highs.
  • Mortgage rates climbing past 6.5%, worsening housing affordability.
  • Market manipulation: allegations of Trump and associates shorting markets, peddling insider access via Truth Social for $100k/month.
  • SpaceX and Trump Media stocks tanking, negatively impacting retirement portfolios.
    [05:00–11:00]

Notable Quote

“Trump Media has been pitching $100,000 monthly fees for stock traders to get instant access to Donald Trump’s posts where Trump manipulates the markets.” – Political/Economic Commentator [07:50]

3. The Fort Knox & Gold Delusion

• Trump repeatedly promises economic salvation via “the gold in Fort Knox,” fueling false hopes among supporters.
• Treasury Secretary’s media appearances echo this narrative but provide no real solutions to economic pain.

Notable Segment

Compilation of Trump clips promising windfalls from Fort Knox gold, with commentary likening these promises to Ponzi schemes and empty populism.
[11:00–13:45]

Notable Quote

“Just like your Doge dividend checks, right? $5,000. Your tariff rebate checks. It’s right around the corner. The Gold in Fort Knox. You’re gonna get rich. You’re gonna get rich.” – Political/Economic Commentator [11:17]

4. Ponzi Schemes & Economic “Reconciliation” Bills

• Analogy of Trump’s economic policies to Ponzi schemes:
  • Creating “Special Purpose Vehicles,” shuffling money but never fixing the core problems.
  • Each new ‘reconciliation bill’ is just “robbing Peter to pay Paul.”
• Trump’s $19.2 trillion revenue claim debunked as fantasy.
  [13:42–15:47]

5. Justin Wolfers Interview: Trust, Volatility, and Economic Consequences

• Wolfers discusses the catastrophic impact of Trump’s chronic dishonesty:
  • Loss of credibility renders U.S. pronouncements meaningless domestically and internationally.
  • “Volatility” is off the charts, both emotionally and in financial markets.
  • Market reactions to Trump’s announcements have dulled; initial sharp swings now give way to skepticism and apathy, leading to dangerous, unchecked policy moves.
  • The emotional volatility felt by citizens is mirrored but complicated in the markets.
  • War with Iran: markets first reacted sharply, but learned not to trust Trump’s inconsistent messages, undermining any stabilizing feedback loop.
• Wolfers uses humor and clear analogies (dating, “taco trade,” “nacho trade”) to explain why the administration’s unpredictability is so damaging.
  [16:02–32:53]

Notable Quotes

“If you don’t have a reputation for being honest, it actually makes any form of communication difficult... The President has treated truth as if it were purely optional.” – Justin Wolfers [17:54]

“The only people who make money are the insiders when essentially they create their dips and they buy their dips. But at some point, the dips become… you can’t keep doing that.” – Co-Host [21:34]

“If the markets now understand, half the time when the President speaks, he doesn’t mean anything… the market no longer tanks. And so that means the next time he does a dumb thing, the market’s not going to tank, in which case he’s going to persist with the dumb thing.” – Justin Wolfers [23:17]

6. Lingering War in Iran & Economic Fallout

• Strait of Hormuz remains closed; oil supply bottlenecks expected to continue.
• Initial market panic gave way to a deeper anxiety about the duration (“forever war”), not just the intensity of conflict.
• Parallel drawn between fake “deals” with Iran (and others) and Trump’s negotiation style—always extracting, never delivering, never building trust.

Notable Quotes

“Trump claims he had an agreement. He didn’t. He had an agreement to agree, in which they hadn’t actually agreed on any of the terms.” – Justin Wolfers [27:45]

“The fear is, at this point, we look like we don’t have a way out. And so now the concern is about the duration of the war... That’s not alarmist. That’s actually reality.” – Justin Wolfers [28:37]

7. Global Trust, Negotiations & the “Swipe Left” Problem

• Wolfers and Ben riff on the analogy of toxic relationships: If someone always reneges on deals, nobody wants to negotiate with them.
• Other world leaders (e.g., UK, Japan) learned to placate Trump publicly but ignore him in substance; Iran unlikely to play along.
• Lack of trust disables meaningful diplomacy, deepening U.S. isolation and instability.
  [30:55–32:53]

Notable Quote

“If someone told you that was their approach to life on a first date, you would just swipe… I think you swipe to get rid of them. And as it works in love, so it works in war—the Iranians are here to swipe.” – Justin Wolfers [31:15]

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Notable & Memorable Moments

• Fort Knox Fantasy: Trump’s repeated, absurd assertions about solving America’s debt by raiding Fort Knox’s gold; hosts play his past clips and mock the rhetoric ([11:00–13:32]).
• Market Manipulation Allegations: Explosive detail that Trump Media offered $100k/month insider “access” to Trump’s market-moving posts ([07:50]).
• The “Taco” and “Nacho” Trades: Wolfers and hosts discuss Wall Street lingo mocking Trump’s habit of escalation and retreat in policy—and its consequences ([26:08], [27:48]).
• “Swipe Left” Diplomacy: Wolfers’s analogy comparing international negotiations with Trump to a disastrous dating app experience ([31:15]).

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Timestamps for Key Segments

• Opening Economic Overview: [01:16–08:00]
• Oil, Housing, Stock Markets: [05:00–11:00]
• Fort Knox Promises/Clips: [11:00–13:45]
• Ponzi Scheme Analogy: [13:42–15:47]
• Justin Wolfers Interview Begins: [16:02]
• Volatility, Market Response: [22:04–24:32]
• Iran War/Energy Crisis: [25:09–29:27]
• Negotiation/“Swipe” Analogy: [30:55–32:53]

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Overall Tone & Closing

The episode blends serious, data-driven critique with the brothers’ characteristic wit, frustration, and urgency. Their unapologetic stance comes through—not only in the unfiltered economic warnings but in their lampooning of Trump’s populist promises, market manipulation, and empty deal-making. Justin Wolfers’ expertise grounds the conversation, delivering sobering insight with clarity and flashes of dry humor. The message is clear: under Trump, economic uncertainty has become normalized, trust is shattered, and there are no easy off-ramps from the crises now facing America and the world.

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Transcript

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[Host/Interviewer]

I'm

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[Justin Wolfers]

Start your free [e-mail] Donald Trump is

[Political/Economic Commentator]

crashing the United States economy as he further escalates his catastrophic war in Iran. In the real world, not in Donald Trump's fraudulent criminal world. The United States has not brought in $19.2 trillion. If we brought in 19.2 trillion DOL, then why is the debt going up over $3.5 trillion in this year alone? Why has the total debt and I know a lot of people aren't talking about this anymore because they just want to cover up for Donald Trump and MAGA. But the national debt is approaching $40 trillion. Donald Trump has added basically 30% in his presidencies to the overall national debt. Let's just take a look at charts, not Donald Trump's fraud to talk about what' happening in the economy. And you know what's happening in your economy, in your home, in your apartment. You know the struggle to pay rent. You know that housing is not affordable. Groceries are not affordable. Gas prices are going back up right now. Let's just talk about the data because that's what we do here at the Midas Touch Network. You want to take a look at the traffic in the Strait of Hormuz. You know how Donald Trump says, never before have we had Such good traffic. It's like never before. So good. Actually, if you take a look right here, you know, it looks like to the left the giant wall from Game of Thrones and then everywhere to the right of it is where the traffic is right now. Traffic in the Strait of Hormuz is at a complete standstill. There are no ships leaving the Strait of Hormuz as now it appears Iran will escalate in response to more of the war crimes being committed by the Trump regime and perhaps shut down the Bob El Mandab Strait in Red Sea. At the end of last week, oil prices are up 20%. Over the past 10 to 15 days or so, oil prices were approaching $90 a barrel. You have Treasury Secretary Besant, in my opinion, trying to manipulate the market by bringing in certain whale investors to short the crude market and try to bring down the price there. But the crack spreads, they don't lie. That's the difference between the refinery price and the of crude at an all time high there. Those crack spreads like $86 a barrel. The crack spreads are higher than the price of crude itself, which is unheard of. And that crude price is that 80 to $90 range. But with this escalation, we can expect that to go up into the 90s and perhaps even higher. We'll see where that lands later today when the futures market opens there. When it comes to mortgages right now, as you know, the mortgage rate about 6.55% up sharply recently and that continues to go up. I mean, housing, entirely unaffordable. You take a look right now, speaking of housing, you have foreclosures this year, a 21% increase from last year and a 30% increase from, from two years ago. And I think these are important metrics. Foreclosure up right now 30% from two years ago. And when you look at credit card delinquencies, record high, student loan delinquencies, record high, medical debt delinquencies, record highs, consumer sentiment, all time historical lows. And when I say record highs and all time historical lows when it comes to all of this data, always in the negative, always on the bad side of these things. I mean, we're talking about Great Recession, we're talking about the collapse of the dot com boom. I mean, we're talking about, you know, a lot of data right here being aggregated. You have health care being torn away from Donald Trump's one big beautiful bill, the disastrous fraud that that was. You've seen already millions of people lose their health insurance as soon because the midterms are over. We're gonna see millions of more people get kicked off of Medicaid and millions and more people lose the insurance that they have. That's coming soon and more and more people losing their insurance. You know, when you look at all of the like economic metrics, they look a whole hell of a lot like Donald Trump's djt, Trump Media. I mean you look at Trump Media crashing right now, the stock is sub 10 when you start a spec, you start at $10 a share. So it just below water right there. And what's the priority of Trump Media right now? You heard at the end of last week, Trump Media has been pitching $100,000 monthly fees for stock traders to get instant or to get access to Donald Trump's posts where Trump manipulates the markets. This is real before everybody else sees Donald Trump's post. So if Trump post about Nvidia or Micron or whatever the stock it is, if you pay $100,000, you can get access or this was being floated to Trump's social media posts on Trump Media first available to the oligarchs and the stock traders if you, I mean what are they like systematizing, you know, this horrific, horrific behavior. You know, also sure, you've been following this. SpaceX crashing, tanking down 22% or close to 23% since it was added to the NASDAQ 100. So Trump and Musk had the rules changed for the Nasdaq and Nasdaq 100. Normally you'd have to wait a significant period of time to see how a company does, because you want to avoid pump and dumps and all of these schemes before a stock can be put on the NASDAQ 100. Because a lot of 401ks and mutual funds and funds that people invest in, part of the investment is in the NASDAQ 100 or in the NASDAQ. So when SpaceX put itself into the Nasdaq, you may not want to even own SpaceX, but your 401k, your mutual fund, your funds that you may have been invested in, had space had to, they had to purchase SpaceX because they follow their criteria, which says they have to buy certain NASDAQ companies. So when it was added to the NASDAQ 100 and it got this status, they had to buy SpaceX. So that's been harming people's portfolios right now. And the reality is, and in my opinion, I mean it's the revenue that it was making never merited anywhere near the valuation that it was given at first and you know, and, and here's the results of all of this. Also more reporting about how Donald Trump would make social media posts about various companies in and around the time that he would purchase the stocks in these companies. And CNN did a pretty good expose where they said Trump trades stocks before favorable truth social posts. And they gave tons of examples how Trump made stock trades shortly before posting favorable comments about. With all of this taking place. And I know the struggle is real. What's Treasury Secretary Scott Besson say? How is, how is he dealing with all this? Well, he went on a podcast called the Way I Heard it and Treasury Secretary best sense of everything is, look, if you do the right thing and you work hard and you make good decision, there still may be the American dream for you. I mean, just what an asshole this guy is, huh? Here, play this clip.

[Host/Interviewer]

I really think it's up to us to let people know that the system does work for them. If you do the right thing, if you, they want to work hard, if you want to make good decisions, then there is still the American dream. So. And you got to make sure that they are good paying jobs on the other side where people can move up.

[Political/Economic Commentator]

Then he goes on State Regime Media Fox with, with, with State Regime Media Fox and he talks to them and he's just like, look, you know, the, you know, the Fort Knox has gold and where goes with Jesse Waters, everybody, I forget Jesse Waters name. You know, we have the gold in Fort Knox and you can trade these certificates for gold. No, you can't. What are you talking, what are you talking about? Fort Knox gold. They want to talk about everything other than the struggle that the American people are experiencing.

[Co-Host/Interviewer]

And here, let's play this clip.

[Justin Wolfers]

Have you visited Fort Knox?

[Host/Interviewer]

I haven't, I haven't. People on my staff has. We're going to the treasurer's office. The treasurer has been to Fort Knox. I am happy to say all gold is present and accounted for. The US has the largest pile of gold in the world, over $1 trillion at current market value.

[Justin Wolfers]

And we're getting more gold from Venezuela here.

[Host/Interviewer]

We're getting a lot from Venezuela. We're getting gold. These oil sales are going great. It's going back to the Venezuelan people.

[Political/Economic Commentator]

And just so you see, even though he says, I never took the trip to Fort Knox, this has actually been something that Donald Trump has been saying to his supporters over and over again. We gotta check out if the gold's in Fort Knox. We're gonna get rich with all that Gold in Fort Knox.

[Kalshi Advertiser]

You'll see.

[Political/Economic Commentator]

It's all right around the corner. Just like your Doge dividend checks, right? $5,000. Your tariff rebate checks. It's right around the corner. The Golden Fort Knox. You're gonna get rich. You're gonna get rich. You're gonna get rich. Remember when Donald Trump said, he goes, I would be the greatest communist, like Lenine. That's what he said, Lennon. Just like Lenine. Because I would just promise people everything, and then I wouldn't even have to deliver. I'd make the greatest communist. He said, here. But I don't need to show you that. He said that.

[Co-Host/Interviewer]

But here's. Here's the video of Fortnite.

[Donald Trump (via clips)]

This one. You know, all my life I've heard about Fort Knox. That's where the gold is kept, right? I heard Fort Knox. Oh, but, you know, we're getting a little bit shaky. We're getting the yips on this stuff. Like, I want to find out. So we're going to open up the doors. I'm going to see if we have gold there. We want to find out, did anybody steal the gold in Fort Knox? It's a pretty amazing place, but I'm going to actually go, we're going to open the doors. We're going to inspect Fort Knox. We want to make sure that we actually have, you know, 400 tons of gold or whatever the hell it is. It's a lot of gold. I don't want to open it. And the cupboards are bare. Could happen if you look at some of the things. Oh, by the way, where do we go? Into the Education Department. We haven't even done that. So we could find as much as $1.5 trillion worth of waste, fraud and abuse. If we do that, we can balance budgets. We can do a lot of other things.

[Political/Economic Commentator]

All right, I'll show you. Just so you could hear him say, lenine. Lenine. I'd make the greatest communist here.

[Co-Host/Interviewer]

Let's play this clip.

[Donald Trump (via clips)]

I want to get the word out, because what's for me is a couple Communism in the country and communism's easy to sell. I would be the greatest communist in history. I'd be right up there with Lenin. I'd be. I'd be as good as anybody. You've got free rent for the rest of your life. What they don't say is that you'll be living in squalor in 12 months. You've got a free house. Would anybody like to have a free house? We'll take it away from Somebody, we'll give it to you. You'll have murders all over the place. Communism's a disaster. It's been proven to be for thousands of years under different names, but same thing. It's very important. And you know, it's.

[Political/Economic Commentator]

And then you'll Even see in 2025, Donald Trump, when he was in the Oval Office with French President Emmanuel Macron. Trump again talking about Fort Knox and Macron looking at him like he's like

[Co-Host/Interviewer]

a, like a crazy person here playing this clip.

[Donald Trump (via clips)]

We're actually going to Fort Knox to see if the gold is there, because maybe somebody stole the gold, tons of gold.

[Political/Economic Commentator]

I think also the way to think about these reconciliation bills that Donald Trump does. You know, I used to litigate against Ponzi schemes and I was a lawyer. I would be appointed by a receiver who would work for the sec and I would litigate these cases against massive Ponzi scheme frauds. One of the tactics that they would do is they would create SPV Special Purpose Vehicle 1, Special Purpose Vehicle 2, Special Purpose Vehicle 3. So they'd raise money for Special Purpose Vehicle 1. They take it for themselves. They would tell Special Purpose Vehicle 1 investors, we got all this money for you, billions of dollars we've made. And then what do they do? They then do Special Purpose Vehicle 2 to then pay a little bit to Special Purpose Vehicle one investor so that they feel okay. And then the Ponzi schemers then take for themselves and then they do it with Special Purpose Vehicle 3 and 4 and so on until they get busted. That's like a Ponzi scheme. Reconciliation 1, the big beautiful bill. Reconciliation 2. Now 3.0 to me is just like special purpose vehicles 1, 2 and 3. It is robbing Peter to pay Paul, except here it's robbing from the American people or bringing the American people further into debt in order to pay Paul in this case, no offense, if your name is Paul, Donald Trump and the right wing oligarchs and the military industrial complex and to feed the money to them and then create another urgency. Ah, we need reconciliation 4.0. Ah, we need reconciliation. Didn't you all say the big beautiful bill was gonna cover everything? Not only did it destroy American lives, it didn't cover anything. So you had to go back for 2.0, you had to go back for three point. It's a Ponzi scheme. And all the while, Donald Trump throws out the fraudulent number $19.2 trillion I brought in. And of course, he didn't bring in $19.2 trillion. By the way, we talk about in our book, WTF America? Pre order right now, WTF America? I think we have on the QR code. It's climbing the charts. It comes out in October. Pre order helps us a lot.

[Co-Host/Interviewer]

Right?

[Political/Economic Commentator]

I want to bring in right now Justin Wolfers. An interview I just did with him. Top economist, runs Platypus Economics. He's the chief economist at Midas Touch. Now let's bring in Justin Wolfers.

[Co-Host/Interviewer]

Now I want to bring in Justin Wolfers, chief economist at the Midas Touch Network, also the founder of Platypus Economics. Justin, great to see you as always. Donald Trump's jawboning this week saying Iran wants to meet. Iran wants to meet.

[Donald Trump (via clips)]

Yep.

[Co-Host/Interviewer]

The boy who cried wolf clearly looks like that weak little pathetic boy, in my opinion, claiming deals. The boy who cried deal, I should probably call it. Nobody wants to, you know, nobody. I don't think the markets are buying it anymore. This comes at a time where there has been not just an escalation, a rapid escalation. Donald Trump destroying bridges and civilian infrastructure in Iran, Iran responding by targeting substantial infrastructure of the Arab nation neighbors. We're learning that further escalation is probably likely. The MOU is a pipe dream, like there's not even a thing anymore. We ain't getting back to there, in my opinion, anytime soon. At the same time, in the dark of night, you had Donald Trump tariffing Brazil 25% because of the Bolsonaro family. It's many believe that they're kind of putting tariffs on Brazil, but only the Bolsonaros can get away with it as Flavio is running against Lula for president and Donald Trump now threatening more tariffs against Canada, saying that because of the wildfires, we want to punish Canada, whereas Canada helped the United States and when we had wildfires and lost their lives, helping us fight our fires here, this is what Donald Trump is doing. Overall, I just want to get your take because you and I talk about reliability, predictability, what America used to be known for. And this isn't just volatility. The US Is trading, in my opinion, like a penny stock on steroids. I should say truth social. What do you make of it, mate?

[Justin Wolfers]

I'm tempted just to start with a joke that I'm surprised we haven't gotten tariffs on Belgium for beating us in the World Cup. But the fact is the president didn't use tariffs there. He just called the head of FIFA. So not really a joke there at all. Look, let's come back a level because it's not Just relentless dishonesty. It's. If you don't have a reputation for being honest, it actually makes any form of communication difficult. Right. If you knew that I was a lying liar and you went on a date with me and the date went really well, and at the end of the day, I said, I think I love you, you don't know where you stand. It gives me no ability to form a relationship with you or to walk away from a relationship with you, because nothing I say can be trusted. And the President has treated truth as if it were purely optional. And in the short term, I think it had a very big political payoff for him. It had a payoff because the news media was not wired to understand, was not wired for someone to be relentlessly untruthful. There were a set of norms. If the President said something, you would give it difference. You wouldn't fact check the President in real time. You would take his messages because you thought his messages would be informative. And you broke all that. And it had a very, very large short term gain for the President. But where that leaves us as a country is that he can go abroad and say things and no one takes him seriously. On one day, he says he's going to blow Iran to smithereens. I thought it was a deeply dismaying day. I hated every part of it. I think blowing other countries off the face of the earth is an immoral, unethical thing to do. But the thing to realize is that is a power that we have, and it's a power that we have because our tax dollars have gone to work creating this extraordinary military. And it does give us leverage. But if you speak like that and don't use the leverage, the leverage disappears. The President's speech no longer carries any weight. And I think that's a huge part of the problem in trying to get to peace with Iran. The guy promises one thing today and then he rips it up the next day.

[Donald Trump (via clips)]

Right.

[Justin Wolfers]

Once you've seen that act, why would you give something up valuable if you're not going to get anything valuable in return?

[Co-Host/Interviewer]

You mentioned Belgium and the joke that you were giving, though we should say Belgium gave Donald Trump a golden ring with all of these rubies and diamonds. True story. And that was one of the reasons that he made a tariff decision that reduced certain tariffs. After getting a gift from Belgium, you know, before, when you as an economist are making projections, that's, you know, when you teach university, you know, it's charts, it's mapping, you know, and the charts are based on series of assumptions. And so when economists, whether they're at banks, whether they're people plotting mortgages, inflation, the markets, jobs, whatever, you are able to assess trends. And you could, you know, you know, we sometimes are called soft landings. And, you know, you follow things. One of the broad issues, you know, and I want to hear your thoughts, you know, as an economist, the challenges that this also presents now that we've established what it means when trust is lost. But the level of volatility, you know, is so off the charts. And it seems that the only people who make money are the insiders when essentially they create their dips and they buy their dips. But at some point the dips become, and you know, you can only do

[Political/Economic Commentator]

that certain amount of times before the

[Co-Host/Interviewer]

dip becomes a whatever. And, you know, look, you see, I, I saw Jamie Dimon, you know, someone who I, you know, used to very much respect. I see him on stage. I understand he's got stakeholders and shareholders and he's got to say certain things that he's got to say. But, you know, he's up there on stages with Trump saying things, things that make me, to be honest, a little bit kind of sick to my stomach while Trump is doing all of this. And so I just want to get your take broader about how you deal with this as an economist. The volatility.

[Donald Trump (via clips)]

Yeah.

[Justin Wolfers]

So it's interesting because the emotional volatility that you feel, I mean, Ben, I know no one lives it more than you do. You're on top of the news cycle day in, day out. Every time I look up on the Internet, there you are, that emotion of volatility, that the news cycle is literally an order of magnitude fastest than it's ever been. That the half life of a story now is two hours. That's one thing. But actually it translates in a very different way into financial markets here. Let's think about this slowly. Let's say the President says, I'm going to invade Canada. The first time he says that, you think to yourself, crikey, that would be terrible. This is a president out of control. I definitely have to dump stocks. We have the worst possible president. This is going to lead to a painful war. This is going to have terrible economic consequences. And then by the end of the afternoon, the President said, I was just kidding about bombing Canada. Okay, so you've lived through that. Now, the next day, when he wakes up and says he's going to bomb Canada, what are you going to do? You're going to realize that much of the time he says that he's kidding or he backs down, in which case you no longer want to be the one who sells your stocks because they're going to rise again by the end of the afternoon when he says he's

[Donald Trump (via clips)]

not going to buy.

[Justin Wolfers]

Because you see they're going to rise in the afternoon, you're going to sell them in the morning. Which actually means that the President's words do less to move markets today than they used to. I can give you a couple of examples. When we first went into Iran, no one was sure how serious we were. That actually led to very sharp stock market movements. And then the President, every day, I think I counted literally 50 occasions where he said, we're on the cusp of peace with Iran. If we were literally on the cusp of peace with Iran, you would expect the market to rise all the way back up. And the first times he announced it, that led markets to respond that way. But then people eventually understood every time the President speaks, it doesn't actually mean anything. And so that meant markets today respond less to what the President said than they used to. Let me explain why that's complicated. One of the biggest checks on the President is sometimes he does a dumb thing and the markets tank, effectively telling him it's dumb. The problem is if the markets now understand, half the time when the President speaks, he doesn't mean anything. This is the point of honesty being important, then the market no longer tanks. And so that means next time he does a dumb thing, the market's not going to tank, in which case he's going to persist with the dumb thing. And so, look, maybe I went deeper into that than you really want to. Let me just come back.

[Co-Host/Interviewer]

You brought us to where we are today because you look at these strategic petroleum reserves, and people who are a lot smarter than me in this area say, you know, remember that, the Leonardo DiCaprio movie? You know, the comments coming down, don't look up, don't look up. You know, and people are saying this tank bottom thing is a real issue and it's problematic. And we look at the Strait of Hormuz and it's closed. And Trump is saying it's open, but it's not open. We look at the escalation taking place and you go, wait a minute. This right now seems to be that moment where we need to deal with this.

[Political/Economic Commentator]

This is serious stuff.

[Co-Host/Interviewer]

And, you know, even though Brent crude is going to be approaching $90 a barrel, which is very high, it took a long time for it to get there. And I've been sounding like oil geek talking about three, two, one crack spreads and trying to explain, you know, the delta between crude and refinery prices. But this is this, this is, this is the, this is your world of charts where you see these issues and I feel like a crazy person sometimes.

[Political/Economic Commentator]

And everybody, this is there, the comments there, I'm telling you.

[Co-Host/Interviewer]

And you'll be like, ben, it's not as bad as you think it is. But, but what do you make as this moment, particularly though, feels like, like this is the bad moment. But with all of those other times he did the tacos and the, this, this moment feels like.

[Political/Economic Commentator]

Well, you know, but I know our

[Co-Host/Interviewer]

audience feels, you know, the seriousness of it. What do you make of it?

[Host/Interviewer]

Before we go.

[Justin Wolfers]

Yeah, it's funny that you raised the taco because we can stick with Mexican food here. So the so called taco trade was. Trump always chickens out. And when we went from bombing around to a ceasefire, the taco trade looked really good. Now I've subsequently heard that, that our Mexican food menu has expanded. I don't know. Ben, have you heard of the nacho trade? This is the view that I think you're expressing. Nacho is not a chance. Hormuz opens. So the concern here is that the US doesn't have a pathway to getting the straight, consistently, persistently open. And that has much longer term consequences. And so this is where what I want to do is just draw your attention to different phases of the war with Iran. In the first phase of the war, markets responded very badly. And again, I want to remind people I'm not obsessed with markets. It's what they're trying to tell us about the economy. When markets tank. That's because smart people on Wall street who bet millions of dollars are betting that the future profitability of American firms will be lower. And so I'm not obsessed with Wall Street. What I'm obsessed with is understanding the future of the economy. When we first went to war in Iran, markets absolutely tanked. And what they were doing was responding to concern about the intensity of the war, which is how much damage would the US do? How much would we damage Iranian infrastructure? How much damage would there be through the rest of the region? Remember, this was meant to be a four to six week war. We're now at four to six months. And now that we went through one, phase one of the Trump campaign was bomb, boast and blockade. Then we had the ceasefire, didn't work, so we went to the ceasefire and now phase two is bomb, boast, blockade. Nothing's changed. And the fact that we seem to be out of ideas and unable to get ourselves to negotiating table in order to do more than. Trump claims he had an agreement. He didn't. He had an agreement to agree in which they hadn't actually agreed on any of the terms that the suicides disagree on. Mate, I can have an agreement to agree with you, but doesn't get us anywhere. And so the fear is, at this point, we look like we don't have a way out. And so now all the concern is not about the intensity of the war, but about the duration of the war. We know it's not four to six weeks. We know it's definitely at least four to six months. But what's happening now is it's raising a very real possibility of four to six years. That's not alarmist. That's actually reality.

[Political/Economic Commentator]

That.

[Justin Wolfers]

That very much is in focus right now. By the way, I did warn people about this at the start of the war. And so what that in turn means is we can follow what's happening to the price of what we call the spot price of oil, the price of oil today, but people are also betting on what oil prices will be in the future. We call those futures contracts. And what you see over this current phase is those futures contracts now are moving quite sharply. Again, that's just the market saying, hey, we're not really worried so much about the intensity now. We're worried about the duration, the possibility of what folks call a forever war. But something just drags out that the nacho. Not a chance. Hormuz opens, that things remain open, closed, open, closed. And the world oil markets are going to continue to either be deprived of a source of oil or continue to be buffeted about for many years to come now.

[Co-Host/Interviewer]

Yeah. And what worries me as a student of history and psychology and, and pathology and seeing Trump's never had a way out of any of this stuff his whole life. It's always been frameworks and agree to agree later. He's never actually done deals. If you read the Art of the Deal, what he says is, I don't actually view a deal as good faith bargaining between parties where each side gives. It's how you and I would generally teach negotiation in a class. He said, I view it as the starting point to extract more and grind down the other side. He's met a adversary in Iran and people over there like Foreign Minister Aragji, who wrote books on negotiations, and they have a certain way of thinking as well. That's not going to be like the way the Republican Party was to Trump, or the way certain institutions bent here in the United States because they view it as. Trump talks about it as the very survival of the civilization, because Trump has described it in such terms. And so the big fear to me, when I saw the MoU, when I see his fake deals with China, when I see all these fake deals, is they're not real. They're not real. Just like we didn't bring in $19 trillion. And you can't really bluff it when you see what's going on.

[Political/Economic Commentator]

You can't keep it going for it.

[Co-Host/Interviewer]

Let me give you the final word before we go. Yeah.

[Justin Wolfers]

So look, let me simplify it, which is when someone thinks that the start of a negotiation is to get you to the table, so then they can continually take more and more and more from you, then you just don't want to go to the table with them. If someone told you that that was their approach to life on a first date, you would just swipe. I don't know which side do you swipe to get rid of them? But you'd swipe to get rid of

[Co-Host/Interviewer]

them Close to the same age. I never use those apps.

[Justin Wolfers]

We're both old men then, Ben. I'm not much of a swiper either, but, you know, I think you swipe to get rid of them. And in some sense, as it works in love, so it works in war, which is the Iranians are here to swipe.

[Co-Host/Interviewer]

Right.

[Justin Wolfers]

They don't need a relationship with us. But there is an off ramp that we saw continuously through the trade war. The trade war provides a really interesting map for how Trump operates, which is we actually did have deals. We had very real trade agreements with Canada, for instance. And the President came in and just ripped it up. As you said, he just comes to the table whenever he wants and rips it up whenever he wants. And what he wanted was a belief that he struck a deal. And so the cleverest countries in the world, the Brits, were very, very good at this. The Japanese did this as well, is they would basically let the President walk out the front, hold a press conference and say, I extracted an incredible deal. I just screwed this country absolutely from here to kingdom come. And the Prime Minister of Britain, for instance, just sat there and nodded. He understood that, that there was no deal. He understood that there's no follow through, this is not a particularly competent administration. So he understood if he wanted to best represent his country, he had to let the President declare the win while quietly actually doing nothing. That the dealer ever required because there was not, in fact, a deal. That's the way out of this. The problem is that the Prime Minister of England was able to do that and the Prime Minister of Japan was able to do that. But this seems like the sort of thing that would be a lot more difficult for a country like Iran to stomach.

[Co-Host/Interviewer]

And everybody, make sure you subscribe to Platypus economics. That's Justin's YouTube page and organization. We're honored to have him as the chief economist here at Midas Touch as well. We made the big announcement earlier this week, so after this video ends, just search Platypus Economics and in the comments, tell Justin that Ben said hello. Thanks, everybody. Thanks, Justin.

[Political/Economic Commentator]

Breaking news right now. My brothers and I wrote a book. It's called WTF America? And, well, doesn't that just say it all? It comes out officially this October, but you can pre order your copy today. Just scan the QR code or click the link in the description below.