← The Peter Schiff Show Podcast
The Peter Schiff Show Podcast
Every Bond Market on Earth Is Breaking at Once. This Is 2008 x10
00:57:48
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Mike Maloney
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The first one I want to talk about is what's happening with bond yields around the world. Because this is something that I have been warning about for years on this podcast, and anybody who's been listening to the podcast knows exactly what I've been saying. And, you know, Thomas Massie is one of the few people in Congress who actually tried to prevent this fiscal train wreck from happening. The conductor of the train is now Donald Trump, and he threw Massie off the train for trying to stop it. Trump wants to make sure that we have this wreck, and unfortunately, it's going to happen while he is president. But this has substantial, substantial implications. This is so much bigger than the 2008 financial crisis, which had to do with private credit, had to do with the ability of subprime borrowers to repay their mortgages. This goes way beyond that. This is about sovereign credit. This is the fiscal chickens finally coming home to roost, not just in America, but all over the world and in particular in Japan, because I have repeatedly warned on this podcast about the accident waiting to happen with Japanese government bonds and the implications there. But, you know, the only reason that the world has gotten away with, with all of this debt, all of this sovereign debt in The US in the Eurozone in Japan was because interest rates were very low. That's what enabled it. But I've been warning all the time that that is a temporary situation, that eventually interest rates would soar. That was the same thing with the subprime. I knew that. I knew that subprime borrowers were relying on teaser rates and artificially low interest rates to be able to afford to make payments on mortgage balances that they really couldn't afford. But because they had this temporary window of low payments, they could swing it. And so they were committing to mortgages they couldn't really afford to simply because they could pay the teaser rate. The bet that they were making was that by the time the teaser rate expired, they would have so much home
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Mike Maloney (continuation or co-host)
equity that they could refinance.
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Mike Maloney
They could pull out extra money and
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Mike Maloney (continuation or co-host)
use that to make the payments.
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Mike Maloney
They can sell the property. But it was a bet that ultimately
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Mike Maloney (continuation or co-host)
went bad and the Nation suffered the 2008 financial crisis.
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Mike Maloney
Well, the same thing, only bigger, is
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Mike Maloney (continuation or co-host)
happening with sovereign credit.
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Mike Maloney
And it was only credit. And it was only a matter of time until this whole thing blew up. Because as governments took on more and
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Mike Maloney (continuation or co-host)
more debt, by definition they become less credit worthy. And as you become less credit worthy, lenders want to charge you higher interest rates. You know, a lot of people think that, oh, we have so much debt that therefore we're going to get low interest rates so that we can service. It doesn't work that way. The more debt you have, the higher the interest rates you have to pay because you are a worse credit risk because you've got so much debt. If you're going to loan money to somebody, if they already are loaded up with debt, you're not going to want to loan them money because there's a higher chance that you're not going to get paid. If you've got a borrower that doesn't have any debt at all and lots of assets and you're the first person making a loan, well, you're pretty secure. You don't have to charge a high interest rate for a loan that has a high likelihood of being repaid. But if the borrower comes to you and he's already got all kinds of debt and now he wants to borrow money from you, that's a riskier loan. You need to charge a higher rate of interest to cover that. Now a lot of people will think, well, you don't have to worry about default when it comes to sovereign credit, but you have to worry about something else. And that's Inflation. Now, I still think default is a risk, but let's just set that aside and assume that a sovereign nation borrowing in its own currency will not take the honest road and default, but will instead print and create inflation. But that is the same risk. The real risk that you face when you loan money to a government that has a lot of debt is that instead of raising taxes on the public to honestly pay the debt, they just crank up the printing presses and print a bunch of money and say, here you go. But the problem with that is the money might not buy you very much. It may not buy you anything. And so the real risk is that if you loan money to a government that has a lot of debt, that increases the chance that they are going to print money to pay that debt. Now, that's been a risk for a long time, yet the credit markets have kind of been oblivious to it. They haven't been worried about it, but now they're getting worried. And that kind of overlaps with the Thomas Massie story, which I'm gonna get to later. So I don't wanna spend too much time on it right now. But basically, by getting rid of Massey, the message that the Republicans are sending to the credit markets is we are never going to cut spending. And if any Republican even tries to stop our reckless deficit spending, we will get rid of that guy. We don't want anyone to stand in the way of our goal of massive debt and massive inflation. So if there's any signs that any Republican wants to stop this train, we're gonna get rid of them. So this is a message. It doesn't just get rid of Massie. It says there is no fiscal responsibility at all in the Republican Party. So if you thought that we'd eventually get our economic house in order, we'd eventually cut spending and tackle the deficit, you're wrong. Because the guy that wanted to do that, he's gone. And now nobody else will dare. Nobody in Congress is gonna raise their hand to object to any massive deficit spending, because that means they're gonna lose. Trump's gonna kick them out of the Democratic Party, which is basically what we got. We got two Democratic Parties now, and they both basically each have their own brand of socialism that they're selling to the public.
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Mike Maloney
But the debts are gonna spiral. And the markets are now reacting. The bond vigilantes that have been asleep for a decade or more, maybe two, are awake. And this is a big, big deal. This story is not getting anywhere near the attention it should in the mainstream media. I mean, let alone the financial media. But you know, sometimes a picture is worth a thousand words. And so I'm going to talk right now with some charts that I got here and I want to share my screen and. And so the first chart is the 10 year bond market. And by the way, all these charts are brought to you by Investing.com, right? That's one of my sponsors now. It's a website I've been using for years. And so now they're a sponsor. They've got hundreds and hundreds of charts. I mean there's, you know, on all sorts of things, but I just picked out a few that I want to focus on. But this chart is the 10 year U.S. treasury. And so here we are at the end of the chart you can see where we are. We're not quite at the high from Liberation Day. We're almost there. The yield on the treasury the 10 year is about 4, 4.7 or so, almost 4.7 now. But the important thing is look at this trend. Look at the peak in 1981 where the yield on a 10 year treasury was over 15%. And look at this major, major bull market in bonds, which means bond prices were rising and yields were falling. And look at that. And the bottom of that was in 2000. That was during COVID 19. That's when the yield on a 10 year treasury was less than 1%. And I remember on my podcast at that time I said that was a blow off top in the bond market, that it was going to be a generational top and that yields were going to be heading higher from there. And that is exactly what has happened. But if you look at where we are right now on this chart, this downtrend has been decisively broken. So we have gone from a huge bull market in bonds that went from 1980 to the year 2020, a 40 year bull market. That is what was responsible for rising stock prices, making rising debt possible. We were riding that wave of low interest rates and that was also made possible because, you know, we were able to pretend that inflation was falling. But all of that has changed. We are going to reverse the entirety of that decline. We are now in a major bear market in bonds and we're gonna have a huge rise in interest rates. This little period right here, I'm moving my cursor around. This is a little consolidation. Once we break out and get into this level, we're just going straight up. And these yields represent falling bond prices. Bond prices are going to fall a lot quicker than they rose. In fact, if you go back to the chart, look at 1978, 1977 over here up to 1980. Look at how sharp that rise was from 7% to almost 16%. Look at that huge rise right at the tail end of the 1970s. Right, we are going into something like that now. But this is way worse than the 1970s. The US was still solvent. The debt to GDP in 1980 was just 35%. Now it's 125%. Here's a chart of the 30 year bond. This actually looks worse. The 30 year bond yield has already taken out the liberation day high. Over here we are at a 19 year high. You got to go back to 2000, what, 5, 6 to see a 10 year yield. We're at now 5.18 on the 10 year. But again look at this huge downtrend in the 30 year. And you know the 30 year never got as high as the 10 year in 1980 because you know, people assume that rates would come down in those next 20 years. But look at this downtrend. This has been broken decisively. But the fact that the 30 year bond is breaking down more than the 10 year bond is a bad sign because it shows a greater loss of confidence in the Fed and a lack of desire on the part of lenders to take that extra 20 years of risk that they're, they're asking for a greater risk premium because of what's happening. In fact, if you look now at the yield curve in the U.S. finally we have a normal yield curve where it's, it's positively sloped for every duration in the spectrum. Meaning that the 90 day yield is higher than the 30 day yield and the 6 month is higher than the 90 day and the 1 year is higher than the 6 month and the 2 year is higher than the 1 year and the 5 year is higher than the 2 year, the 10 year is higher than the 5 and the 30 year is higher than the 10. That's the way it should be. But what that back to normal means is bond investors are acting more normal, they are worried and they don't want to hold bonds for longer periods of time. And to get them to do that they need higher rates of interest. So this is a major change from having these negative sloping curves where people believe the Fed was going to be able to bring rates down. In fact, if you look at the bond curve right now, the, the market is anticipating a Fed hike. The markets are no longer pricing in any cuts. The bond market is now pricing in that. The very next move that Kevin Walsh is gonna make as Fed chairman is going to be to raise interest rates. That's what the bond market is saying now. If he doesn't raise interest rates, there's gonna be a collapse of the dollar and gold's gonna go through the roof. But the markets expect him to raise interest rates. The problem is the rate hikes they're expecting are not nearly enough to put this inflation genie back in the bottle. And I'm gonna show you those charts too. But let me just show you some of these other charts. Look at the 10 year JGB. I was screaming about this on this podcast. I remember when the Yield on the 10 year Japanese bond got up to a half a percent. And this is not long ago, one half a percent. And the bank of Japan drew a line in the sand. We're not gonna let the yields go above a half a percentage. And I said they were going to go down with that fight, that the market was going to win, that we were going to go through 5%, a half a percent, we'd get to 1% and then after we got to 1%, we'd get to 2% quickly. Nobody else was believing that or forecasting that. That thought wasn't even possible here. Now we are at about 2.8% now on, on. No, that's the 30 year. Yeah, 2.8. The, the 30 year Japanese government bond. I don't even have that chart up. The 30 year Japanese government bond today is over 4%. That's the highest it's ever been. And that's because they didn't start issuing it until, I don't know, 20 years ago or 15 years ago. But it's never had a 4 handle until now. But if you look at the rate of Japan, the 10 year bond yield, it's 2.8%. But the last time it's a 29 year high. Oh, here it is. Right. I didn't have the whole chart. I was wondering where, look at where we are. This is two point, like 2.8%. You got to go all the way back 29 years to get a yield this high. But 29 years ago Japan didn't have this much debt. And look at where we were, look at where yields were. They were over 8% back in 1990. They are going back up there. But I did the math. If the Japanese government had to pay 3% on average to finance all of its debt, and that's not a big number and we're heading there soon. I mean we're already almost at 3% on a 10 year. But if the Japanese government had to pay 3%, it would need 50% of all of its tax revenue just to pay the interest on its national debt, assuming the national debt stopped growing, which is not going to happen. So this is a disaster. The only way Japan, I think, can push off this disaster is by dumping its U.S. treasuries, which is going to compound the problems that we have. And look at the German tenure. Here's the German. The German government bund. Look where this is. This is the highest it's been since 2011. But look at that chart. Look at the. We broke this downtrend. Yields are going higher. They're going higher for everybody. And that means all governments that have debt are in trouble because all governments with debt are going to have to pay more in interest to service that debt. Now, since the US Government really is the biggest debtor of them all, we're in more trouble than everybody else. And we're also the world's biggest debtor nation. We're not a creditor nation like Germany, like Japan. And we have coasted on artificially low interest rates, which are rapidly becoming a thing of the past. And here's a couple of commodity charts. Here's the oil chart. Look where we are right now in oil. We're about $108 a barrel. We are going to break. There's a little bit of a downtrend. Here's like 140. This was the high in 2008. And here's the high over here in 2022. That high coincided with Russia invading Ukraine. But once we take out that high, which we're going to take out, we're off to the races in oil prices. This is going to be a major, major oil shock. Prices are going to surge. Look at this CRB index. This is the last of the chart I'm going to show you. Look at this CRB index. Look at this move right here. You can see I have the cursor down here. This is the low from COVID 2020. A hundred, like 112, 118. We're at 405. Look at this surge in commodity prices. This is all commodities. This is not just oil. Agriculture, industrial, metals. Look at what is going on. We're gonna take out this high, which was the 2008 high before the financial crisis lowered commodity prices back down. But this is massive. And it's not a coincidence that commodity prices and bond yields are rising at the same time because they're both being driven by inflation. So we're going from low interest rates, lower, low inflation. And of course, it wasn't even low, but, you know, what we had was low relative to what we're going to. So we're going from officially low inflation and ridiculously low interest rates to high interest rates and high inflation. That is a terrible environment for financial markets, for the stock market. Right. For the bond market. It's gonna be horrible for the US Economy. This is a major, major sovereign debt crisis. It's going to impact the dollar. See, right now, investors still don't get it. They're still focused on rising nominal yields. And the algorithms are trading. They're buying dollars, even though they're not rallying much. They're buying dollars, they're selling gold. Gold's back below 4,500. Silver's down around $74. Because they're reacting to these nominal stories about rates missing the bigger picture, that real rates are imploding because inflation is skyrocketing. And one of the reasons that you have all of this complacency now is the war. See, a lot of traders think that we don't have to worry about rising bond yields. We don't have to worry about rising energy prices or rising, you know, food prices, because it's all the war. And all we have to do is end this war. And prices are going to crash, bond yields are going to crash. And therefore, people are not worried. They are completely wrong. It's not the war. The war may have been the catalyst for a breakout that was going to happen anyway. And if it wasn't the war, it would have been something else. But bond yields were going to rise. Inflation was going to rise with or without the war. And if the war ends, bond prices aren't going to stop rising. Commodity prices, oil prices are not going to stop rising. They're going to keep rising. Which is another reason why Trump may not end the war. Because if he does end the war and then we don't get a crash in oil prices and bond yields, then what is he going to do? Then he's, you know, he's out of tricks. One reason to keep the war going indefinitely is because you always have something to blame the problems on. And you can claim the problems are transitory. So we don't really have to worry. We don't have to worry about $120 oil or $150 oil, because as soon as we win this war, it's going down to 50, right? That's what we can say. We don't have to worry about about 6 or 7% bond yields. We don't have to worry about an 8 or 9 or a 10% mortgage because that's all gonna change as soon as we win the war.
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Mike Maloney (continuation or co-host)
Right?
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Mike Maloney
They can keep on saying that all we have to do is win this war and end this war, which we could, supposedly could do whatever we want.
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Mike Maloney (continuation or co-host)
And that is creating, I think for
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Mike Maloney
now, this sense of complacency. But at some point, as yields keep rising, as CPI and PPI keep rising, higher oil prices, higher food prices, something is going to break. The stock market has to break. The bond market is already breaking and foreign currency traders are gonna have to figure out what this means to the dollar. This is not good news that foreigners are losing confidence in our creditworthiness. It's not good news. This is bad news for the dollar and it's not bad news for gold. People should be running into gold as
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Mike Maloney (continuation or co-host)
fast as they can. The fact that gold is pulling back
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Mike Maloney
in the face of this just shows
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Mike Maloney (continuation or co-host)
again that traders don't understand the significance
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Mike Maloney
of what's going on. You know, you go back and look at the 1980s.
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Mike Maloney (continuation or co-host)
Bond prices were collapsing and yields were
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Mike Maloney
soaring as gold went from $35 an ounce to 850. So gold went up with bond yields.
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Mike Maloney (continuation or co-host)
The same thing is going to happen this time. Yes, we're having a bit of a
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Mike Maloney
correction before the next surge.
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Mike Maloney (continuation or co-host)
But this is getting some people to think, hey, maybe gold isn't working as a hedge anymore, right? Just because it's pulling back. That's what these pullbacks are designed to do. They shake the conviction of the weak hands.
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Mike Maloney
People who really don't understand what is going on.
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Mike Maloney (continuation or co-host)
Because if you're getting out of bonds,
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Mike Maloney
what are you going to get into?
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Mike Maloney (continuation or co-host)
You can't get into dollars because the real problem with bonds is that they're IOU dollars.
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Mike Maloney
The reason that investors don't want to
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Mike Maloney (continuation or co-host)
hold long term bonds is because they don't have confidence in the long term value of the dollar. So if you don't have confidence in
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Mike Maloney
the dollar and you're selling your bonds, you, you're not going to keep your
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Mike Maloney (continuation or co-host)
dollars because that's the reason you're selling your bonds. You're going to buy gold, right? Gold is what you buy when you don't want to own dollars. That is the major competitor for the dollar. It's not the euro, it's not the yen. Because again, the Europeans have their problems, the Japanese have their problems. People are going to be selling JGBs, they're selling buns. What are they going to do with that money. They're going to do exactly what people did in the 1970s. They're going to buy gold, they're going to buy silver. So the prices that we have now are cheap. To me, you know, gold in the 1970s went up to 200. Then it, you know, went from $35 to 200, and then it went from 200 to 100. Scared a lot of people out, and then it went from 100 to 800. So I think where we are now is in that kind of a pullback. But also the other big difference between the 1970s and now, apart from the fact that we're in a much worse financial shape than we were back then
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Mike Maloney
when we were able to raise interest rates to 20%. Paul Volcker had the luxury of being able to do that because we didn't have a lot of debt at that time. Today, we can't do it. In fact, if Kevin Walsh actually tries to raise interest rates anywhere near the degree that's necessary, he can't even do it. I mean, Trump would go ballistic if the guy that he sent in to the Fed to cut rates starts jacking him up. And again, 25 basis points, 50 basis points, that's not gonna do anything. We need very high interest rates. I mean, 5% won't do it. Maybe 10% won't do it. We may need interest rates as high or higher than what we had in 1980. The problem is we can't survive that. There would be massive defaults. There would be a financial crisis that would make the 2008 crisis look like a Sunday school Pitt, which is why it's not going to happen, which is why this time inflation is going to run out of control. They were able to contain inflation in 1980. There is no chance that they will restrain it now. So we are going to destroy the value of the dollar. And any hope that we might do the right thing just left Congress with Thomas Massie. And as I said, and I pointed this out before, even former Secretary of the Treasury Hank Paulson, who helped design this whole catastrophe, he was the early architect of the bailouts and the qe. He says we need a break the glass plan to deal with the fiscal crisis that's coming when foreigners don't want to buy our bonds. Well, that's happening right now. But the interesting thing about what Hank Paulson says, said, or more so what he didn't say, he didn't say. We need to do something to stop the crisis. We should defuse the bomb before it explodes. No nothing like that because I think he's resigned himself to the fact that we will do nothing to stop the crisis. And Trump kicking out Thomas Massie is more proof. Cuz he's the guy that wanted to do something about it. He's the guy that didn't want to wait for the crisis. He he wanted to be preemptive. He wanted to try to slow down the spending to restore some sanity to Washington. And for that they got rid of him. And so Hank Paulson knows there is no chance that we are going to avert this crisis. As far as he's concerned, we're going to have a crisis no matter what. And I agree. And so that's why he thinks we need an emergency plan to deal with the crisis. My point is there is no plan that can deal with this crisis. It is impossible. The only thing you can do is try to prevent it. And if you're just gonna resign yourself to the fact that it's inevitable, then you have to deal with the horrific consequences. There is no get out of jail free
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Mike Maloney (continuation or co-host)
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Mike Maloney (continuation or co-host)
Visit your nearby Lowe's.
- [32:50]
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Mike Maloney
There is no way to do it. We're going to have to live through the worst economic period in US history and that would include the decade that we call the Great Depression. This is going to be really bad. And really what the emergency plan is, is how do we deal with this collapse? How do we deal with the carnage? How do we deal with the riots and the looting and the protests? I mean, when things get really, really bad to the degree that we've never seen in this country, and riots like we've never seen, because the public is gonna be up in arms when they have to endure what's coming. I mean, they think it's bad now, wait till they see what's around the corner. Anyway, just one quick word. If, you know, you wanna use investing.com, you know, you want to look at these charts or more charts. I mean, any bonds you want to look at in any country. There's so many charts and a lot of other economic information. So you should sign up. You could also get the premium service. There's a link in the description of this video for Investing Pro. They have a flash sale right now that ends on May 21st. And if you use the code, Schiff, my last name, you'll get 15% off on top of the flash sale price. So the link is there. You can click on it and give it a try again. I've been using this product myself for years. Anyway, we got a quick commercial break. We've got another sponsor that we're gonna hear from, and then we're gonna come back, and I'm gonna be talking about Thomas Massie and Donald Trump. So stick around. All right, so as I said before the break, we are rapidly headed for a sovereign debt crisis, a dollar crisis. This is a huge, huge problem. All of these deficit chickens are coming home to roost, not just in the United States, but in Europe, in Japan. Politicians are going to be forced to deal with problems they have been sweeping under the rug for not just years, but for. For decades. The day of reckoning is close upon us. You know, the several Fed chairmen, they've always said, you know, it's not unsustainable. We're on an unsustainable path. Right, the debt, you know, the path is unsustainable, but we can sustain it. Well, we can only sustain it because interest rates were very low. The minute interest rates are high, then everything collapses. And that is what is happening right now. And as they say, there is no stopping this train, especially now that Thomas Massie is no longer in Congress. And I want to talk about the Herculean effort made by Donald Trump to get rid of the best congressman that we have. And in fact, Donald Trump Today or yesterday said that Massie is the worst congressman in, in the history of this country. The worst one ever. Now again, Trump always exaggerates, but he lies. It's not just exaggeration. He tells bold face lies. Donald Trump is a liar. You have to understand that about Trump. He lies. He lies constantly. You know how you can tell when Donald Trump is lying? His lips are moving. Right now. He said Donald Trump is the worst congressman in the history of the country. I don't want to go over 250 years of Congressman. But what about the existing Congress? What about the squad? What about, let's say, aoc? According to Trump, AOC is better than Massie. How is that possible? Trump would rather have a Congress full of AOCs than Thomas Massie's. What is it about Thomas Massie that Donald Trump hates? That he thinks he's worse than one of the most radical left wing socialists in the Congress. Somehow Massie, a conservative, fiscal reservative constitutionalist, that guy with integrity who votes his conscience, who upholds his oath of office, somehow he's the worst one we've ever had. And we'd be better off with more AOCs and fewer Thomas Massey's. The problem is we didn't have enough Thomas Massie's. That's the problem. He was one man against everybody. We needed more of him. Now we don't even have him, thanks to Trump. You know, I used to think that, you know, Trump was the lesser of the two evils between Trump and Kamala Harris. Well, had we elected Kamala Harris, Massie would still have his seat. And you know what, if that's the trade off, I think we might have been better with Kamala in the White House if we still had Massie in Congress. I think if Trump is the reason that we no longer have Massie, then maybe he wasn't the. Maybe he was the worst of the two evils. Right. So I have a lot of reservations about my prior support of Trump, given just how bad. I mean, I knew there was a risk that he would be bad, but he is way worse than I could have imagined for the Republican Party, number one, but more important for the country. But Donald Trump said, well, what makes him so bad? He said he doesn't think Massie's a libertarian, he thinks he's a Democrat. He thinks he's really a Democrat because he says he votes with the Democrats all the time. No, he doesn't. In fact, he votes with the Republicans. So far, since Trump's been president, about 90% of the time. But here's a fact. This is a fact. During the Biden presidency for four years, Thomas Massie voted with the Democrats fewer than every other Republican. He was the lowest of all the Republicans. He voted with the Democrats less than anybody else. So he is the most different from Democrats than all the other Republicans. In fact, Donald Trump has a lot more in common with most Democrats than Thomas Massie. By far. Massie is way to the right of Trump. Trump is left of center. Trump. Trump was a Democrat most of his life, you know, until he decided to
- [39:54]
Mike Maloney (continuation or co-host)
run for president and then he became a Republican.
- [39:56]
Mike Maloney
But he's a Republican in name only. He's the rhino. He accuses Massie of being a rhino. No, he's the rhino. Unless the Republican Party is no longer what you think the Republican Party is. The ridiculous part about it is a lot of people think Donald Trump believes in small government, freedom, the Constitution. He doesn't believe in any of that
- [40:20]
Mike Maloney (continuation or co-host)
because he kicked out the one guy who does.
- [40:23]
Mike Maloney
Now, yes, Massie did vote against the
- [40:28]
Mike Maloney (continuation or co-host)
Republicans on some key legislation. All of it was bad. All of it was bad. Massie voted against the big beautiful bill. It was a horrible bill. It's too bad more Republicans didn't vote against that bill. That bill is one of the reasons that inflation is going to be so high. It's one of the reasons that interest rates are going so high because more people didn't stand up to big government Donald Trump and not vote for that bill. Now, Donald Trump says, well, Massie voted against tax cuts. No, he didn't. He voted against the tax hike. The big beautiful bill is a tax hike now? Yes. Did it lower income taxes? Yes, it lowered income taxes. But that's not the only tax you pay. You got a lower income tax, but the trade off was a higher inflation tax. Inflation is going to take away more than the income tax cut gave. Thomas Massie knows that Thomas Massie is honest. He doesn't sell his soul. He doesn't lie. He's not a political hack. He's an honest Congressman. Again, that's another reason Trump doesn't like him, because he's honest. Trump doesn't like honest people. He likes liars because he likes people like himself. So if you're a liar, you like other people to lie. You don't like people to call out your lies. So the fact that the big beautiful bill was a tax cut is a lie. It was a fraud. But Trump doesn't care because he can keep talking about this big tax cut because the public doesn't know any better. Now, what Massie was trying to do was educate the public. Trump wants to dumb them down, just hope they don't. You know, I'm just gonna talk about how great everything is, right, and let them believe it. So he had to run out of town.
- [42:25]
Mike Maloney
Thomas Massie. You know, it tells you a lot about Donald Trump. Who is the one guy that Trump wanted to get rid of, the guy that wants to cut government spending, the guy that actually wants to make America great again. Now, he was also against the tariffs. The tariffs actually are a tax hike. Trump is in favor of the tariffs because he doesn't think they're a tax hike. Because he's so dumb or he's lying cuz he thinks that we don't have to pay the tariffs, that the Chinese pay the tariffs, that the Mexicans pay the tariffs, that the Canadians. Thomas Massie isn't dumb enough to believe that. He tells the truth. He knows a tax increase when he sees one. That's why he's against the tariffs. He also knew that the big, beautiful bill was a tax hike because again, the cost of government is not what it taxes, but what it spends. Any bill that increases government spending is a tax hike. And so if the big beautiful bill resulted in the government spending more money than before, the big beautiful bill, it is a tax hike. I don't care how you want to frame it, because within that tax hike, some taxes are reduced, but the overall tax burden goes up. The people have to pay for government. The bigger the government gets, the more expensive it is. Donald Trump wanted to make the government a lot bigger. Thomas Massie didn't. He wanted to make the government smaller. What's that? That's a conservative, that's a Republican. Donald Trump wanted big government and he got big government despite the fact that Thomas Massie tried to stop it because there weren't enough Republicans willing to stand with Massie to stop it. And now it's gonna be even worse. Now the fear of God is in all the Republicans. If any Republican tries to stand up for real Republican principles, he you're out of here. Because there's no room for actual Republicans in the Trump Republican Party. We just want Democrats in the Republican Party or socialists. That's all we want, right? We don't want anybody that cares about the Constitution, that wants limited government, that wants sound money. Let's get rid of all those people. And by the way, Massie was one of the only Republicans to be against this war, the Iran war, which is a complete unmitigated disaster. Yet Trump is. Oh, he was against the war. Yeah, of course he was against the war for one reason. We're too broke and we can't afford the war. But of course, the other reason he was against the war is because Congress never declared it. You know, let Congress declare the war, not the president. But, you know, people want to make a big deal. Oh, Thomas Massie voted with the Democrats against the war. Yes. But you know what? Had the war been started by Biden, the same exact war, or had Harris been elected and had she started this war, every single Democrat would have been in favor of the war, and all the Republicans would have been against it. And then Thomas Massie would have voted with the Republicans. But because a Republican started the war, all the Republicans are supporting it and all the Democrats are against it. Because everybody but Massie. You know, maybe Iran Paul, but Rand's in the Senate, Massie's in the House. All the other people in the House are political hacks. They don't give a shit. They just vote their party line. In fact, a lot of Democrats were pulling for Massie to win this race. They wanted Massey. Why did they want Massie? Because Massie is the furthest thing from a Democrat that you can get. Like Massie would be in favor of eliminating the minimum wage law. How many Democrats want to eliminate the minimum wage law? None of them. Zero. Donald Trump likes the minimum wage. He would never eliminate it, but Thomas Massie would. Thomas Massie is a free market guy. He's against all of these socialist unconstitutional programs. The last thing the Democrats would want is to get rid of is to keep Massey. Massie should be the number one Republican that Democrats want to get rid of because he's the one that is the least like them. At least when it comes to economics, he's the least like them.
- [46:57]
Mike Maloney (continuation or co-host)
The only reason that Democrats wanted Massey
- [47:03]
Mike Maloney
to win is because they don't like Trump. It was a slap in the face of Trump. So they were pulling for Massie because it would make Trump look bad. Not because they like Thomas Massie, but of course they tried to use this against him. Oh, look at all these Democrats that
- [47:17]
Mike Maloney (continuation or co-host)
are supporting Massie as if that means
- [47:19]
Mike Maloney
they support what he stands for. They support his philosophy. No, they actually tried to label this guy the. The most fiscally conservative Republican in the House. They said he was really a Democrat. He's just like aoc.
- [47:34]
Mike Maloney (continuation or co-host)
He's just like Bernie Sanders.
- [47:36]
Mike Maloney
That's why they like him so much. Donald Trump wants to get rid of this guy because he's a traitor to Republicans, meaning he's a Bernie Sanders.
- [47:47]
Mike Maloney (continuation or co-host)
When it's the opposite, it's Trump that's
- [47:49]
Mike Maloney
the traitor and all the other Republicans
- [47:51]
Mike Maloney (continuation or co-host)
that have thrown out the.
- [47:52]
Mike Maloney
Whatever principles Republicans were supposed to stand for.
- [47:57]
Mike Maloney (continuation or co-host)
If anyone is an America first, make America great again guy, it's Thomas Massie.
- [48:03]
Mike Maloney
And the fact that he's not there means if you thought there was a
- [48:06]
Mike Maloney (continuation or co-host)
chance of making America great, forget about it. That ship has sailed.
- [48:11]
Mike Maloney
The Republican Party is lost. And the problem is, when you have two socialist parties, when the voters have a choice to vote for socialist A or socialist B, who are they going to choose? In most cases, they're going to choose the bigger socialist. Because if I'm going to go for socialism, I may as well go big or go home. So the Democrats are going to present to the voters a more straightforward, honest, socialist program than the Republicans. And the Democrats are going to win. Right? You can't beat the Democrats by being a Democrat. But the only reason that Trump was able to win before, people didn't know. And because, you know, he was out both times that Trump won, he was an outsider. Trump never won as an incumbent because when he was an incumbent, he was presiding over a weak economy. He couldn't lie and pretend it was great, but because the voters wouldn't believe it. But when he wasn't president and he was able to run against the current administration, then he could bullshit, yeah, I'm gonna make everything great. Because he could acknowledge how bad things were. Now, yes, Trump is not gonna be up for reelection, but some Republican will be. And that Republican is gonna have all of Trump's baggage, gonna carry all that baggage. That's why Kamala Harris couldn't win, because she was carrying Biden's baggage of a weak economy. The economy that we're gonna have under Trump is gonna be so much worse than what we had under Biden. Inflation is going to be a much, much bigger problem. I mean, just this year, 2026, the CPI is probably gonna go up more than in any calendar year Biden was president. But wait till you see 2027 and 2028. It is going to be much worse. And we're gonna have much higher interest rates. We're gonna have this economic crisis. So I think, you know, we're gonna. The Democrats are going to. Our Republicans are gonna lose the House, they're going to lose the Senate, and then they're going to lose the White House. And this is going to be a complete disaster. And I don't know how the Republican Party repairs itself from this damage. In fact, if any Republican has a chance in 2028, it's Thomas Massie. He may be the only Republican that will be far enough away from this disaster that he could say, hey, I told you so. I was the one that tried to stop this crash and that's why they kicked me out. So who knows, maybe he'll be able to. But within the Republican Party, it will be hard for a guy like Massie. Cuz as long as Trump controls the Republican Party, we'll never have a good nominee. Which means there won't be another Republican president. Because the Republicans that are going to be Trump backed candidates are not going to do well in the general election. They're not gonna do well with independents. Now, eventually even Trump's diehard fans may abandon him when things get so bad that they can't take it anymore. You know, a lot of them are the older people who Trump wants to protect. You know, one of the things that Trump said, and again, I'm not making this up, he does not want lower home prices because he wants the older people who already own homes to be able to feel rich. He said he doesn't want people who own homes and have a lot of home equity to lose that equity. He wants home prices to keep going up so that the people who bought homes a long time ago at a low price can feel good about being rich. He doesn't give a shit about the young people, young families who are struggling to buy overpriced homes. He doesn't care about them. I mean, maybe if he could find a way for them to borrow more money to afford to overpay. Okay, but his number one priority are old rich people, not young working people who are struggling with inflated home prices. You know, he doesn't want prices to come down, right? So, but, so he still has the support of some of the older voters who he thinks Trump has their back. He's protecting their home equity. And he's already, you know, I'm not going to cut Social Security, I'm not going to cut Medicare. And so they love all that, you know, that he's going to preserve these big socialist programs. But when they all get wiped out to inflation, when inflation wipes out the value of their home equity, when it wipes out the purchasing power of their Social Security, of their retirement checks, of their Medicare benefits, they may not look at Trump in such high regard. In the meantime, you gotta pay attention to these markets, the bond market. I've always said that people said, when is the crisis gonna happen. What should I look at? One was the price of gold, the other was the bond market. Gold already broke out. It's correcting, but it broke out. The bond market is breaking down. The next thing is gonna be the foreign exchange market. The dollar hasn't broke down yet, but it's topping. It's very close to a breakdown. Is just a key question of when the traders can separate what's happening with nominal interest rates and, and what's happening with real interest rates. And the fact that the Fed is forever prohibited from really waging a successful war against inflation. Because one of the reasons I think that bonds haven't collapsed faster and that the stock market is investors still think the Fed's got it right. They still have got this under control, that inflation's not gonna be too bad. You. And if it is, they can fix it with some rate hikes. What they don't get is the size of the rate hikes that would be required to put this genie back in the bottle are so high that it would create another crisis in the short run that would be perceived as even worse than the long term threat of ever rising inflation. So we won't be able to do it. Trump won't let them do it. And so you've just got to recognize this. This is a major collapse, a major realignment of the global pecking order. The dollar and the US standard of living are gonna collapse. It's gonna be the emerging markets that are gonna come out the winners. Countries like China, right, Like the BRIC nations, Southeast Asia, South America, a lot of these countries are going to be the winners. The U.S. europe, Japan could lose, but nobody will lose as much as the U.S. because nobody has as much to lose as the U.S. we have the reserve currency, not Europe, not Japan. We have been living off the reserve status of the dollar. When we lose that status, our entire economy collapses. It is not viable. It completely depends on that dollar status. Without it, we can't run these trillion dollar trade deficits. We can't run these multi trillion dollar budget deficits. We can't have a service sector economy. You pull out that linchpin and everything built on top of it comes crashing down. And the only thing that the Fed knows, the only thing the Trump administration is going to know is crank up the printing presses, spend money, more government, more inflation and they're gonna wipe it out.
- [55:50]
Mike Maloney (continuation or co-host)
We don't have Ronald Reagan.
- [55:51]
Mike Maloney
We have nothing like Ronald Reagan. Trump made that clear by getting rid of Thomas Massie. He made it clear that there's no room for any Reagan Republicans in his Republican Party. He's even further to the left than Rockefeller. This is the worst Republican Party we've actually ever had. And the problem is, you know, he's a populist, he's hitting on some of the themes. There are a lot of good Republicans who have been fooled by this charlatan. That is the problem. They think they're supporting their champion. They think he's trying to drain the swamp. He is the swamp. The one guy in Congress that tried to drain it is the guy they got rid of, Thomas Massie. And by the way, of course he was pissed off at Massie for making them come clean with the Epstein files. It was never a big issue to me, but it was an issue of transparency. A lot of people wanted to see the Epstein files. Trump campaigned promising to expose the Epstein files, but of course, once he became in charge of those files, he wanted to cover it up. So Massie did exactly what Trump campaigned on doing. And that's why Trump didn't like him. Cuz Trump didn't want those files to be seen. But you know, Massie wanted transparency. He knew what the public was promised and he wanted to deliver. And Trump didn't like that because obviously a lot of Trump's friends, you know,
- [57:14]
Mike Maloney (continuation or co-host)
don't come off so good because of
- [57:16]
Mike Maloney
their references in the Epstein files. But the bottom line is he was the guy that wanted to drain the swamp. Trump is now the guardian of the swamp. He is protecting the swamp. He is the swamp. And it's actually deeper and murkier now than than it ever was. So not only did he not drain the swamp, he filled it up higher. There is more swamp water. This is a deeper, murkier swamp. Now that Donald Trump is in control of it than it was before he was elected, he has achieved the opposite of what everybody expected. So you gotta act quickly, take advantage of what the markets don't yet understand. I don't think you have a lot of time, but you can buy some gold. At Shift Gold, you could buy some silver. Let me check some prices. I saw they were moving up a little bit. Gold's only up about 12 bucks right now. It's just below 4,500. It was just above, I checked it a little bit ago, was above it. So it's kind of trading above and below. Silver's back above $74. Look, this was a major breakout. You know, we did hit $89 like a week ago. So we had a big pullback again. The catalysts for all the sell offs are rising bond yields and rising oil prices, two bullish things for gold and silver. In fact, I'm looking at the 30 year yield now this is a new high. I'm looking at 5.19%. The highest I sir saw during US hours today was 5.18. So now we're 5.19. We should be at five and a quarter very soon. Before the end of the week, the 10 year is gonna keep on marching up to 5% and by the time the 10 year gets to 5%, we'll be above five and a half. We'll be closing in on 6% on the 30 year. This whole thing is imploding. And you know, there's that old saying, how did you go broke? Well, slowly at first, then all at once. Well, we're just leaving the slowly part and we're entering the all at once part. So you gotta buckle up and get ready for this crash. But again, make sure your portfolio is ready. Not just with gold and silver. You gotta get outta your US stocks. You need to go to the Europact.com website and talk to my advisors or look at my mutual funds to get out of Dodge, to get into the foreign stocks, the emerging markets, the gold and silver stocks. This is where money is gonna be made. I think just like it was in the 1970s. People got killed in US stocks, they got killed in US bonds, but they made a fortune in commodities, in gold and silver, in oil, in foreign stocks. If you saw that disaster coming and you prepared for it, you profited. This is a much bigger disaster that's gonna have an even worse ending than 1980. The there is no Paul Volcker coming. There is no Ronald Reagan. They've been sent packing. This is not your father's or grandfather's stagflation. It is way, way worse and it is gonna end with runaway inflation. And so you need a completely different portfolio. Anyway, make sure, if you like the video, give it a thumbs up. Share a comment and make sure and subscribe to this channel. I may do one more podcast between now and the end of the week or I may just do the Shift Gold Friday Marker app. Not really sure yet, but make sure you stay tuned. And if you're not currently subscribed to my other YouTube channel at Shift Gold, make sure and subscribe there. Also, don't forget about subscribing to our newsletter at Shift Sovereign. We've been putting out some excellent, excellent commentary there in recent weeks. I really encourage you to read the newsletters that we send you. If you're not currently getting our newsletters, go to shiftsovereign.com and sign up. And why not try the premium newsletter Strategic Assets. We've been hitting some home runs with our stock picks there, and these types of picks are precisely the kind of assets that you need to own in the runaway inflation, economic collapse environment into which we are rapidly headed. Bye for now.
- [61:53]
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- [62:16]
Mike Maloney (continuation or co-host)
Visit your nearby Lowes
- [62:22]
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