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Make no friends in the pits and you take no prisoners. One minute you're up half a million in soybeans and the next, boom. Your kids don't go to college and they've repossessed your Bentley. Are you with me? The revolution starts now. Starts now. We have to pass the bill so that you can find out what is in it. Turn those machines back on. You are about to enter the Peter Schiff show me the Money. If we lose freedom here, there's no place to escape to. This is the last stand on earth. The Peter Schiff show is on. I don't know when they decided that they wanted to make a virtue out of selfishness. Your money, your stories, your freedom. The Peter Ship Show. Well, we had a very interesting day, to say the least in the financial markets. I don't know if it's the good, the bad and the ugly. Not sure what good there was, but there were a lot of things to be concerned about. I'm going to start off with the market that rallied. So I guess that's the good if you happen to be long. And that is us Treasuries. We saw a pretty big rally in the long end of the treasury market today. Now, I don't think this is going to last. I am still bearish the long end of the curve despite the rally that we've seen today. Part of that was the result of some increased optimism on another rate cut. So the markets are now expecting more rate cuts from the Fed. But what is prompting this optimism about the rate cuts and rally in bonds and drop in bond yield is pessimism on the US Economy. And I have been talking about this and forecasting this for quite some time on the program on my podcast I did on Sunday night, I went over all of the stagflationary data that came out last week. Well, we've already got more of that confirmation stagflation data that came out this week. Yesterday we got the Dallas Fed Manufacturing survey which in January was actually a positive 14.1 and it collapsed to a negative 8.3. That is a big drop. The production index went from 12.2 down to negative 9.1. But the news that came out today I think was even more worrisome for the markets and that was February consumer confidence which collapsed. They were expecting 103 from an upwardly revised 105.3 in January, making the decline to 98.3 that much bigger. It's the biggest decline in this survey in over three years. So a big drop and the main reason for the loss of confidence is inflation and concerns over rising inflation. In fact, the expectation for 12 month inflation so over the next year rose from the prior month, 5.2% which was already a high number, all the way up to 6%. So the public is expecting 6% inflation. Meanwhile, Powell is still claiming that expectations are well anchored at 2%. Whose expectations is he referring to when the surveys are showing that consumer expectations is three times as high, 6%. Also, the number of people who are expecting a recession to begin this year rose to now a nine month high. So people are more concerned about the economy, they're more worried about inflation. Also, Trump is continuing to beat the tariff drum, talking about how, you know, the tariffs with Mexico and Canada, they're, you know, they're still on, right? They're coming in April, maybe we're going to have tax tariffs on Europe. So all of this weighing on confidence, weighing on the economy, raising the prospect of recession, which again, I think we've been in recession the entire time. Oil prices also moving lower. Again, I don't expect this to stay. I think oil is going to reverse. But oil down below $70 a barrel, $69 a barrel. The reason we're seeing this downward pressure on oil and it's coming even as the US Dollar is drifting lower, it's not collapsing. But the dollar index fell again today. We're down near the lows of the year. We're barely holding onto a 106 handle on the, on the dollar index 106.23. But the drop in oil prices is due to the fears of a economic slowdown. And that is what is prompting the rally in bonds. But what bond investors are overlooking as they're buying bonds is the strength in inflation. Because inflation erodes away the value of the bonds they're buying. And so they're just focusing on the weakness in the economy. And that's kind of a reflexive move, probably a pre programmed algorithm to oh, buy bonds. Because look at all this weak economic data. But the weak economic data is actually inflationary in that it's going to mean bigger budget deficits and a weaker dollar which is going to push consumer prices higher. Again, this is stagflation, right? This is not the type of economic weakness that any of the people who are trading today or who are programming algorithms to trade have experienced. You have to go back to the 1970s to see economic conditions that are comparable, although they're worse now because the financial position of the United States has deteriorated dramatically since that Decade. But you have to go back then. And recession doesn't guarantee lower yields. In fact, I think it assures higher yields. And that's why I'm confident that the rally in bonds is going to reverse. And that's gonna be even more problematic for the stock market. But the stock market is already having a problem with this dynamic because the air is coming out of the bubble of a lot of the momentum names, right? These speculative stocks that have been bid way up based on the cheap money bubble and the good times rolling. A lot of these stocks are getting hit. But the risk asset that got hit the hardest today and the one I want to start the podcast really talking about, is bitcoin. And not just bitcoin. It's the entire crypto ecosystem, industry, whatever you want to call it. And I talked about this, you know, in the euphoria of the Trump victory, as bitcoin surged to 109,000 and all things crypto went up, I was saying at the time that maybe this is the euphoric top that everybody is so optimistic. There's absolutely no reason for bitcoin to go down. We've got a crypto president, we got a crypto cabinet. We're going to have a strategic reserve. Everybody was bullish. Nobody wanted to sell. And I said, you know, that's the exact environment where you probably should sell. If you can't think of a reason to sell, you probably should, because everybody else was buying. And we had a blow off top. Bitcoin today officially entered what Wall street would call a bear market. Earlier today, bitcoin traded below 86,000. That was a 21% decline from the 109,000 peak from November. So that meets the definition of a bear market. But bitcoin is actually doing the best. Look at Ethereum. The ether's down 40% since December. That's doing worse now. One of the reasons that it was running into some problems was competition from Solano. Well, Solano is down 55% from its peak last month. And what really drove Solano up was all the mania about meme coins when people bought Trump Coin and Melania Coin. By the way, Trump coin is down 80% already. Of course it's going to go down 100%. I mean, all this crap is worthless, but it is falling apart. But it's not just the tokens. Look at the individual crypto stocks. I mean, talk about bear markets. The mining companies are just getting killed. I mean, you could pretty much pick any one of these miners. They're at 52 week lows or multi year lows or they're at the lowest they've ever been like in their history of being a public company. I mean if this is the age of crypto, we have a crypto president and everything's going to be great for crypto. Why are these miners getting completely destroyed? Right? I mean look at like Hive Blockchain or digital technologies that closed at $2.18. That's a multi year low. The 52 week high was almost $6 on, on that stock. This other one here, I just had a few of them. Oh, Mara, Mara holdings, you know, they recently started as Bitcoin Strategic Reserve, which is way underwater now. Or they were down at you know, 8% today, but they're, they're at $12.40 down from $34. Was the, was the 52 week high. Some of these stocks I haven't heard of, Clean Cleans park, it's a minor, it closed down like 8 1/2 percent. 8:15. The 52 week high was $24 and 72 cents here, Argo Blockchain, this thing is down at 44 cents. The 52 week high was $2 and 78 cents. I mean there's a whole bunch of these stocks, you can just look them up and, and see how much they've, they've just crashed. But of course the poster boy for the Bitcoin space is MicroStrategy. Although it's not micro anymore, although it's going to be micro pretty soon as far as its stock price. But it's now just called strategy. But the real strategy is how to bankrupt your company because that's the strategy that Michael Saylor is pursuing. So Strategy was down 10% about on the day, although at the lows it was down closer to 13%. But there was a little bit of a rally. But strategy closed 54% below its November high. 54%. This is a brutal bear market. But even worse because of all the massive dilution, because of all the stock they've issued since then to buy bitcoin, the premium has collapsed. At one point at its peak, a microstrategy was almost triple the value of its bitcoin. I mean maybe 270% premium, but for most of its history it was at like a double. Like you were paying twice as much to buy MicroStrategy as the value of their Bitcoin. Now the value of the underlying business, whatever software company is buried beneath this, you know, pile of losses. Who cares? No one even cares that they're a Soft. They ought to spin the software business off. But it was all trading off of bitcoin. It was like a closed end bitcoin fund that it was trading for double the nav. Well now the premium is already down to about 18%. That's it. So it's like a 93% decline in premium. In fact, to add insult to injury, yesterday Michael Saylor announced on X that they had just bought Microstrategy, had just spent another $2 billion buying more Bitcoin. Right? They borrowed the money they bought, they spent 2 billion on Bitcoin. They didn't buy 2 billion worth of Bitcoin because it's not worth anything, but they blew $2 billion. Their average price to on the ones they just bought was 97,500. As I'm recording this podcast now, it's barely 88,000. So they're already down like 10% on the buy that they just announced yesterday. Now the average price of the bitcoin that they bought is now 66,357. I mean their average price and the market price are converging pretty quickly. And because we know he's going to keep on buying, at some point his average price is going to be below the above the market price and he's going to be at a loss. But you know, you got to think about this. Where would bitcoin be today had Michael Saylor not just bought another $2 billion worth of it? I mean he is the biggest buyer. I mean They've now spent $33 billion buying Bitcoin, most of it in the last couple of months. Yet bitcoin is at a three month low despite all this buying. So all these bitcoin holders have got to ask themselves who's selling, right? Because somebody is selling their bitcoin and it's not the Hodlers who are, who have been conned to never sell their bitcoin and just go down with the ship. Somebody is selling bitcoin and you know, gold, gold was down today, right? Gold was down at one point it was down like 60 bucks. But so what? I mean, I don't even know. It barely got below 29, 2900 and in fact it's, you know, it's back above that right now. Big gold is trading at 29, 27. It's up about $12. In the evening it was down about by the close, maybe 35, 40 bucks. Gold's now got support at 2900. That's basically it, the support level, in case you haven't Noticed keeps on going up for gold and now it's like 2900. So if you get a break below 2900, you're getting a bargain. And soon 3000 is going to be the support. But gold is no more than 2%, less than 2% from its all time record high. And bitcoin is in a bear market, 20% below its record high. I mean, what does that tell you? And also, bitcoin is lower today priced in gold, than it was at its peak in 2021. I talked about that a lot on this podcast, that even though bitcoin was making nominal new highs, new highs in dollars, that it hadn't made a new high in gold. And I said on this podcast I thought there was a good chance that the high was in, that bitcoin would never see a new high in terms of gold. I think the only reason that that was wrong was because Trump won. Had Trump not won the election, there's no way bitcoin ever would have seen 100,000. Right? So I think that the high would have been in. But even though Trump was elected and even though we went to 100,000, 109,000 today, Bitcoin is lower by about 10% than it was back in, in, in 2021. Because Bitcoin is only worth about 30 ounces of gold. When I say only, that's, that's still a big number, right? That's ridiculous that you can even buy one ounce. That you could buy anything with a bitcoin, but you can get 30 ounces of gold. But in November of 2021, you can get 34 ounces. So it's down by 10%. And so Bitcoin is broken back down. It was a false breakout in terms of gold. And again, the only thing I think that really got the hype up there was all the talk about a strategic bitcoin reserve, which I've said is never gonna happen because Trump's not gonna enact it on his own. I don't think it's legal. Congress is never gonna pass it. It was all just a bunch of hype to get people to buy so the whales could sell. Because there's some big selling going on that was able to overcome all of the buying from Microstrategy. And not just MicroStrategy, there's a handful of other companies that followed that ridiculous playbook of Michael Saylor that also have been buying a hundreds of millions or billions of dollars worth of bitcoin and putting it on their corporate balance sheets. But despite all that bitcoin is in a bear market, which means even if they were thinking about a strategic bitcoin reserve, that's dead, I mean, why would they do it? Now this thing's in a bear market. It's free falling. You know, how are you going to buy that? If they actually did it, it would look like a bitcoin bailout fund more than a strategic reserve. Anyway, we got a quick commercial break. Don't go anywhere. Coming right back. I used to think a mattress was just furniture until I got my ghost bed. It's a whole different experience. 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And look, without Donald Trump coming out and somehow, you know, credibly announcing we're going to have the reserve, don't worry, we're going to have a strategic bitcoin reserve, and it's not just going to be funded with the seized bitcoin. We're going to go into the market. We're going to buy bitcoin, right? Kind of like quantitative easing, except we're going to buy bitcoin instead of bonds. Unless they come out and say that, which I don't think they're going to do. Trump's got a lot on his plate. The last thing he needs to do is, is, is expend political capital on this nonsense. But unless there's some solid, I mean, believable, credible statement, that's different from just saying, you know, what he's been saying. Because he had a speech last week where he said, we're going to be the crypto capital. Right? So. But unless he actually says something, I don't see what's going to stop the decline right now in bitcoin. And, you know, despite the fact that we've had this drop, nobody's negative. I watched the coverage, you know, on cnbc. Everybody is bullish, everybody's shrugging it off. Buy the dip. Nothing to worry about. Like overlooking the bloodbath in these crypto stocks. What's happening with all the other tokens that are not bitcoin, but bitcoin is also going down. There's no fear, there's no panic, there's no capitulation that's coming. But again, I think the first place we're going to get it is, is from the ETFs. And I've been talking about this since these ETFs started, that there's gonna eventually be a lot of liquidation and that's gonna overwhelm the markets because there's not gonna be enough real buyers who, you know, can pay with real money and not tether to let these guys out. Because the ETFs own a very large percentage of the float of what actually trades in bitcoin. And, you know, they haven't been spooked yet. But, you know, a lot of these guys, most of them, I would say they're not die hard bitcoin maxis. They just jumped on a moving train. They wanted to make an easy buck. And when it turns out that they're losing money, I think they're going to take their chips and go to another casino and they're going to find that it's a lot easier to get into these ETFs than to get out. Because, you know, people tend to want to get out in a rush, right? So people might have been buying over a year, but all of a sudden, all those people, let's say half of them, want to get out in a few days, right? There's just not the volume to absorb that. And also what's going to happen to Microstrategy? And this is the same thing that happened to the Grayscale Bitcoin Trust when it was closed in. And remember, I predicted this too. I mean, people think I don't get anything right with Bitcoin because it's gone up so much. But I was predicting when the Grayscale Biscoin Trust was trading at a massive, you know, 40, 50% premium, that it was going to go to a discount. And it went to a huge discount. I was 100% right about that. And that was, you know, part of, you know, what caused the big bear market in Bitcoin. But what's going to happen with MicroStrategy? The only reason that this guy, a sailor, could keep on selling stock is because he was selling the stock at a premium and then taking the cash to buy bitcoin. That's where he gets this ridiculous bitcoin yield that he's been fabricating as if it's an actual yield. Well, when the premium turns to a discount, that game is over. Because if he sold stock at a discount to buy bitcoin, he'd have a negative bitcoin yield. So he can't do that. So selling stock is, is a done deal. Now he can still borrow money to buy bitcoin but who's going to be dumb enough to lend it to him at that point? I think the pool of dumb creditors who want, you know, bitcoin without the downside because they think they're getting a free ride on this, that's going to dry up. So MicroStrategy, the biggest Bitcoin buyer ain't going to be buying any more bitcoin completely out of the market. So if bitcoin has been this week with MicroStrategy buying this much bitcoin, imagine what's going to happen to the market when, when they're out, when, when he can't buy anymore. And so the downside is so phenomenal. In, in, in, in, in this, in bitcoin right now. And nobody, nobody's cares. Everybody is, is, is complacent. And of course ultimately, and I've been saying MicroStrategy is going to go bankrupt because at some point these convertible notes are going to come due and MicroStrategy is going to have to repay the lenders in cash and he doesn't have the money and he just has bitcoin and he'd have to sell it. In fact, normally if you, let's say MicroStrategy stock starts to trade at a discount to its bitcoin or let's say it's trading at 10, 20% discount, which is coming. And that discount is going to be because people are factoring in bankruptcy as a probability, right? But because people say, hey, why wouldn't you just buy. It's a no brainer. Someone wrote on my X, you know, hey, if it's trading at a discount, it's a no brainer. I said yeah, maybe you have to have no brain in order to buy it because there's going to be a real chance that you don't get your bitcoin because of the debt. Right. Because of all that leverage. But under normal circumstances, if MicroStrategy stock is trading at a discount to the bitcoin, what it could do to close that, that discount is it could sell it bitcoin into the market and then buy back its stock. Right. And then it would, the discount could go away if it did that. But MicroStrategy won't be able to do that because if MicroStrategy ever sold any bitcoin, Bitcoin would crash. I mean, the very first time people realized that he would sell at bitcoin, that it'd be all over. And so then bitcoin would crash and then his stock would crash even more. So he can't do that. So there's no way they can ever close that discount once it's open because they can't sell their bitcoin. It's a monetary road from hotel. Right? That bitcoin checked in, it ain't checking out until there's a forced sale, until he has to give the creditors their money. Because again, they don't want bitcoin. The people who loaned MicroStrategy money don't want bitcoin. If they wanted bitcoin they would have just bought it. They didn't want to take the risk of buying bitcoin but they wanted a piece of the upside. So they thought they were being cute and they bought these convertible bonds and they thought, hey, worst case scenario, I get my money back. No, Worst case scenario, MicroStrategy goes bankrupt and you don't get your money back. See that, that, that's the worst case scenario that is coming. But anyway, you know, gold was down. A lot of people were saying, well, gold was down too. See, it's just like bitcoin. Yeah. Gold is within 2% of its all time record high. Nothing like bitcoin. Gold is a buy. You want to buy the dip. That's the dip to buy. Although the real dip to buy were the gold mining stocks which again, they got hammered this morning. They were down three and a half percent, 4%, you know, because gold was down. Why? I mean even though it was down, it's still 2900. The stocks are steel now. They, they, they rallied back. They still closed down, but maybe about one and a half percent, you know, so you know, they recovered more than half their losses. But that's the dip to buy. I mean these stocks again, I am looking for a ballistic move in, in the gold stocks. I don't know, you know, it could start any day, any day. This rally can start People are going to wake up, they've been asleep for a long time. So, you know, maybe it takes a little while to get all that sleep out of their eyes and recognize what's staring them in the face. But before that happens, you know, you could buy the Euro Pacific International Gold Fund, your Pacific Gix. Did I get it right? Yeah, I got it right this time. Epgix is the no load symbol of our goal fund. Or go to europack.com and, and talk to, talk to the brokers there about our separately managed accounts and how to really take advantage. And you know, if you're in crypto, get out while the getting is good. If you sell Bitcoin at 88,000, that's a great price. You know, people were saying, oh, you could get in below 100,000, like it's a steal because it's a sure thing that it's going to a million, right? When everyone thinks it's a sure thing, the odds are it ain't gonna happen. Right? But 88,000 is a hell of a good price. You know, you're still getting, you know, what, 40 ounces of gold or 30 ounces of gold for a bitcoin. That's a lot of real money for fake money. And then, you know, you can use that to buy into, into these, into these gold stocks. I wanted to make a couple announcements before the break and then I'm going to come back and I'm going to talk about trade, about tariffs, about some stuff I heard Peter Navarro talking about, which you know, really is, you know, it's ridiculous how little this guy actually knows unless he's lying and he's, you know, he's a top Trump advisor when it comes to trade. So it's a very worrisome thing. But I want to mention, so I talked about my dad on the last podcast, would have been his 97th birthday. I had posted this two hour tax talk that he did. Surprised by how many people watched it. Stuck through the whole two hours. I read a lot of the comments. I really appreciate the positive things that a lot of people had to say about my father. Yes, he was a very good, big influence on me, probably the most influential person in my life. A lot of people pointed out, you know, that he has a good sense of humor and he had a great sense of humor. That was one of the wonderful things about my father. I think I got part of his sense of humor. But he used to get a lot of laughs when he's, when he get gave his tax seminars and when he stopped, and you can see his humor in his books. I had great timing as well. But, you know, I mentioned on the podcast that I was upset that someone had hacked into his pay no income tax website and wiped out all of the archives of his shortwave radio program. Well, somebody emailed me that, you know, they were still there on the Wayback Machine. And I had gone there myself and I saw the links, but when I clicked on them, they didn't work. But this. Somebody found a way to get it to work. And then another guy emailed me about it, and he had already downloaded most of them. So I. I listened to one of them the other day. Yesterday I listened to one of them. But we're going to have all of them, and you don't have to look for them on the Wayback Machine. When I get them, I'm going to upload them and then I'm going to start posting them on the YouTube channel. And I have a special, you know, section for my dad's shortwave shows. These are all from the early 2000s. And by the way, if you remember, or if you are a listener to my early podcast, my. I mean, not my podcast. My first radio show was Wall Street Unspun that I did every Wednesday, and it started on shortwave, and I did it on the same station as my dad. That's. He gave me the idea. And so he was doing his shortwave show at the same time that I was doing mine. So he was doing his on taxes and, you know, the economy. I was doing mine on investments and. And, you know, but there was some overlap, but. But that's what got me started. It was my father's shortwave radio show that got me to start my. My shortwave show on the same, the same shortwave network that he used to use. And it kind of all evolved from there. And, you know, it's not just my father that I'm encouraging people to listen to. I've been encouraging people to listen to my wife, who has. Is a very talented actress, singer, songwriter, you know, has been mainly a wife and mother, but recently she's, you know, got the creative bug and she's been performing songs and, and singing and writing songs. And she, you know, she hooked up with this guy, you know, not literally a fan of mine, who used to be the guitar player for Third Eye Brine, Tony Fratenelli. And he, he wrote all this music, and my wife wrote the lyres and sings the songs. And so far, three of the songs from their album have been released on Spotify. We've got a couple of videos that we posted on her YouTube channel. But her fourth song called Lucy is gonna premiere this Friday on the 28th. So I would encourage everybody on Spotify to go to her Laughing Cats is the name of the group Laughing Cats podcast and go on Spotify on Friday and listen to her new song. I. All of her songs are great. I mean, if I don't. I mean, I think I'm. Obviously I'm biased, but, you know, I. I mean, people listen to them. They're good songs. I get a lot of positive feedback about her songs. I'm surprised, actually, more people haven't listened to them. I would really encourage everybody who listens to this podcast to take some time and listen to her song. In fact, don't even wait for Lucy to come out on on Friday. Go to her Laughing Cats on Spotify and listen to her other three songs. You know, GYB is one of them. What are the names of these songs? They're slipping my mind. Um, the ones that she's, uh, already released. Jerk. Right. How could I forget? Jerk. Jerk is one of them. And Love on Fire. I think those are the. I think. I think that's the. That one is already out. I gotta, you know, I forget because she's got a bunch of them and she hasn't released them all yet. No, Electric, Not Love. That one hasn't come out yet. Electric was the last one that she released. So listen to all three of those songs, Electric, Gyb and Jerk, and then you'll be ready for Lucy. That is coming out now. Also, you know, Laughing cats has a YouTube channel and I've linked to it and I put in my favorites. She's got a couple of videos for two of her songs for Jerk and gyb. We produce these videos. So if you don't have a Spotify account, these are free, right? They're up on. On her YouTube channel. So you can, you know, listen to the songs there on. On YouTube and. And she may even have other songs on her YouTube channel. I forget, maybe she put them all up there on YouTube. But Spotify is where they come out, so try to do that and then let me know what you think of those songs because I think they're great. I think she did a really good job. Anyway, we got one more commercial break, so stick around. We're coming right back. Most of us are trying to get healthier, better diet, better habits, maybe a few supplements. But let's be honest, half the time we're just Guessing what if you could measure how your body is actually aging and get a clear plan based on real data? That's what True Diagnostics Plastic does. They test your biological age plus key health markers like vitamins, inflammation and nutrient levels. Then give you a personalized 90 day plan showing what your body needs. No guesswork, just science. Order online and the kit ships right to your door. I recently took the test myself. It was easy. A simple at home finger prick. Drop it in the prepaid envelope and that's it. Now I'm waiting on the results and I'm genuinely curious to see where I stand. Especially when it comes to things like inflammation and nutrient absorption. It'll be good to know what's actually worth changing and what's just noise. 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So you want to buy a dip? This is a dip to buy. Buy silver. In fact, go to Shift Gold tonight and buy some silver. Load up your cart and check out before the price goes back up because anything below $32, I think at this point you're buying the bottom. I, I don't think there's much downside in silver. I don't think it's going back down to 30 again, but I think it's, it's going to have an explosive move again. You know you're, it's like any day it's like, you know, you're playing with fire if you don't get in because you're going to be burned if you, if you miss out. I think you just buy it and just, you know, you're lucky, you know, to do it. People are going to wake up and they're going to wake up soon to the reality of what's, of what's about to happen. But anyway, so I want to talk about the trade and the tariffs and this, you know, there's just such a misunderstanding. And it's just, you know, it, it worries me that, you know, Trump gets bad advice. I know he gets bad advice on crypto, right? He's got all these crypto guys in his ear, right, which are giving him horrible advice. But Peter Navarro, right, who is his advisor, right, his top guy on, on international trade, right, who's telling him about, you know, how great these tariffs are. So I saw him interviewed the other day because, you know, they're talking about these 25%, you know, auto tariffs, right? 25% tariffs on imported cars, right? I mean, you want to screw up the automobile market, right? Put 25% tariffs on cars. You know, I think we actually import more cars than we produce now, which is a shame. But the tariffs aren't going to solve that problem. They're just going to make cars a lot more expensive. And they're already more expensive and they're more expensive to finance. But he was interviewed by this woman and she said, well, aren't the tariffs, you know, aren't they going to raise prices? And he said, no, they're not going to raise prices at all. He said, our trading partners are just going to eat it. You know, he said, America is such an important market that they're not going to want to lose any share. So, you know, whatever the tariffs are, they're just going to cut their prices so that, you know, we don't have to have a higher price, which is complete nonsense. I mean, first of all, there are a lot of companies that are selling to us that don't even have a 25% margin. So if they ate the tariff, they'd be losing money. Well, how are we a great important market if they lose money selling to us, Right? I mean, we're only a good market if they can make a profit selling to us. If they have to lose money, well, then obviously they're not going to do it. They're better off not selling at a loss than selling at a loss. And, you know, the reason that businesses sell to us is because we're the highest bidder. And if somebody else will pay more, then that's where the stuff's going to go. And so let's say the art tariffs are 25%. Well, maybe other people you know, they can cut prices by 5% and they can still make the sale. Well, that's where it's going to go. They were selling to us because we paid the extra 5%. But you know, if we can't pay it because we got a tariff that also has to be added, you know, they're not going to sell us. But there is a chance that in the short run it may, it may take them some time to reorient it, you know, reorganize their, their shipments to other countries. But the danger is once they get everything organized, it doesn't come back. You know, I talked on the podcast, I don't know how far away they are, but China is building this deep water port off of Brazil so that they could ship back and forth between China and Brazil, bypassing the United States, because right now they don't have a deep water port. So these big container ships that are bringing stuff in and out of South America go to Long beach, they go to Los Angeles. And so they also bring stuff for us. But when this new port is finished, they don't have to go to California at all. It's going to be a lot cheaper and a lot easier for China to trade with South America and a lot easier for South America to trade with China. So we are really playing with fire with a lot of these tariffs and what it could mean because we are so unfortunately, so dependent on these imports for our economy. Yes, we have to wean ourselves off them. We have to go back, I said this to a save and produce economy. We can't just continue to be a borrow and consume economy. But the transition is going to be painful, especially if we have to do it quickly, you know, because of, because of terrorists that might, that might come in. But also, you know, I'm listening to him today to show this, like complete lack, lack of understanding. So he's talking about Germany and cars in Germany and he's talking about how it's unfair to. Because they have a VAT system that he says operates like a tariff. He says they have a 20% VAT. And he said it's. He first. He also said it was a subsidy for exports and a tariff on imports. And he's wrong on both occasions. So first of all, a lot of my listeners might not know what a VAT is. You know, I mean, the ones that live in Europe do because they're very common there. But a VAT is really a sales tax tax. It's just a less transparent sales tax. So here in America, we don't have any vats. We just pay a sales tax at the end. So you go into a store and you buy something for a dollar. And if the sales tax is 8%, it's a dollar. And then there's an extra 8%. You see it added to the bill. So you pay A$8. If it was a VAT of 8% and not a sales tax, you'd still end up paying $1.08. But it wouldn't be broken out, it would be embedded in the price. You wouldn't see the 8 cents. That's one of the reasons that they love VAT taxes, because they're less transparent. Right. It's not like sticker shock. But the way the VAT works is each step in the production chain where you add some value, you pay the VAT on the value that you add. And so by the time it gets to the end consumer, there's been several levels of vat, but at the end of the day it's exactly the same money as if he had paid it all at the end. Right. Let's say there's a VAT of 8%. And so instead of you pay $8 on a $100 item, let's say there's two levels. Somebody adds $50 of value and, and pays a four dollar VAT, then another guy adds $50 of value, pays another $4 VAT, and now there's, you end up paying $108 for the product that's been, you know, taxed twice through the VAT system. So it's basically the same thing. So here's what Navarro is upset about. He's upset that when a German car company manufactures a car and they export it to America, the exporter gets a credit back for the VAT so that the VAT comes out so that the, the car is not exported with the vat, it's exported without the vat. Now he Navarro said, see, this is an unfair subsidy. No, it's not, because the VAT is the sales tax. Why is that VAT there? It's the Germans government's way of taxing Germans for their national health care system or for whatever services that the German government is providing to the German people, they pay for that when they buy a car. Now if the car is exported to America, the American who is buying it isn't getting any value from the German government. He doesn't get German health care, he doesn't get any other German roads, German police, or whatever the taxes are paid for. So why should the export include that vat, it's got nothing to do with the American who's buying that car. Now the same thing happens when we export a car. Let's say a car is made in, in New York state. We probably don't make any cars there, but whatever. We may, maybe I should say Detroit, Michigan. Right. We still make some cars there, I guess, but a lot more are made down south. But you know, Michigan's got a sales tax. I'm not really sure what it is. Let's just say it's 8%. So if there's a car that's manufactured in Michigan and then we ship it to Germany, we don't, Michigan doesn't stick on the 8, 8% sales tax. No, it, it goes out without the sales tax because the guy in Germany doesn't live in Michigan. He doesn't have to pay for this public schools. He doesn't have to pay for the roads and, or the, you know, the fire department. No, he's, he's in Germany. And so it's ridiculous to say that not making the German exporter add the tax that's there to fund government to add that back into the car. Now it's not like, you know, the German company doesn't have an income tax. They do. They, you know, they pay income taxes in Germany just like we pay income taxes here. Right. So they don't, they don't get a credit back for their income taxes. The only thing they get a credit for is the vat. And the VAT should not be in a US Car because of course, when an American buys a German car, he still pays the sales tax. If you're in New York and you buy a Mercedes, you're paying New York sales tax on that Mercedes. It's the same sales tax you would pay if you bought a Ford car or General Motors car. Right? Everybody is subject to it because you're in America and you're paying taxes here to fund the government here. There is nothing unfair about it. It doesn't give any kind of competitive price edge to the German manufacturer. Now the other thing that Navarro said wasn't fair. He said, you know, the terrible thing is if we send a car into Germany, Germany puts the VAT on the car. So that when a consumer wants to buy the American car, they have to pay that 20% VAT. And he says that's like a tariff. No, it's not. Because if they buy an American, if they buy a German made car, they pay the same 20% VAT. You know, if you're in Germany. And if you buy a new car, you're paying a vat, whether it's an American car or a German car, it's the same thing. Now, I think if you buy a used car, right, I don't think you pay it August, it was already charged. It was. The VAT is already paid. But if you import a used car into Germany, then you pay it because it's never been paid in Germany, right? So on the importation, you would pay it. And there may be some other duties and some other local charges, but they have that stuff here. I mean, you import a car into Puerto rico, you pay 20, 30% tax to do that. It's expensive to bring a car into Puerto Rico, right? You know, I'm not sure what it going to cost to bring it into the mainland because I've never done that. I brought a car here. But nothing that's happening is the equivalent of this big tariff, right? And the reason that we're not selling as many cars in Germany is because, you know, they got great cars in Germany. They make, they have so many car companies in Germany that they don't need to buy as many American cars. I mean, we sell some, but the reality is if we had these big tariffs on imports, we can't make the cars ourselves. The US Automakers basically, you know, GM and Ford and Tesla, right, they don't have the capacity to make all these cars. The car prices would go way up and you know, the other problem that would happen. So let's say they actually put this 25% tariff on all imported cars from everywhere. So car prices are going to go up a lot, especially for the imports. Now, a lot of Americans are just going to not buy these cars because, number one, you don't know if these tariffs are permanent, right? Trump puts in tariffs, he could take them out a month later, six months later, right? So why, why buy the car with the tariff and pay the extra 25%? I'll just wait. I'll wait them out, right? Because that's a big, that's a big nut, right? I can make do with my used car for another six months. Let me see if Trump gets rid of the tariffs. I don't want to buy now, right? Because I don't want to pay the tariff. So you're going to have that. But you're also going to have the problem with financing or leasing in particular, because an important part of a lease is the residual value of the car when the lease is over. And the bigger the drop in the value of the car, the more expensive the lease. Well, if I want to lease a car that's been tariffed by 25% and I got it, basically, you know, you're borrowing that money, but the leasing company doesn't know if in three years, when the lease is up, are there still going to be 25% tariffs? Because the tariffs will help keep the used car prices high. But if the tariffs go away, then the value of that car is going to plunge. Because you could buy a new car without a tariff. Right. If you're, if you're paying 25% over sticker and then you expect someone to finance that, loan you money on that, knowing how much less the car is going to be worth in the future, because, you know, the tariffs may not be there anymore, the lease rates are going to go way up. And the same thing with loans. I mean, if somebody loans you money to buy a car, I mean, think about that, you know, because if you want to buy a car that would cost you 40,000, and you're going to borrow 40,000, but now there's a tariff on the car and it costs you 50,000, now you got to borrow 50,000, but now the company that's got to lend you the 50,000, but now there's a greater chance that there's a bigger depreciation in the value of that car, and you walk away, right. When they go to repossess it, they can't get their money back. So there are so many things that could screw up the domestic economy. If all of a sudden we put the type of tariffs that Trump is talking about now, again, they may never happen. I mean, if Trump really believed in these tariffs, why wait till April? Just put them on right now. If they're so great, why wait to get the benefit right? Why just constantly tease us about them and just. And not do it right? I mean, so maybe the whole thing is just a bunch of talk, but, you know, it's. All of it is dangerous stuff. And it's just a lot of guys, look, there are some good things about Trump and there are some bad things about Trump. Trump, in many cases, gets half the story right, but he doesn't get the whole thing right. He knows that the trade deficits are bad. He knows that, you know, this is not good for the country, that we should be producing more, that we should be manufacturing more. He just doesn't understand what is necessary to do it. And he still has it backwards. When he thinks the world is taking advantage of us, we're taking advantage of them. But in the long run, it is a bad deal. Just like anytime you do this right, you can, you can borrow a lot of money to live beyond your means. And in the short run, yeah, everything is great, right, because you're, you're, you're, you're living a better life than what you could actually afford. But there is a consequence to that when you eventually run out of borrowed money and reality sets in. And, and so, yes, we have been enjoying a, a artificially enhanced standard of living because of our ability to go deeper and deeper into debt and live beyond our means to buy what we don't produce and to borrow what we don't save. But in the process, we have really destroyed the underlying industrial base of our country. We have sold off a lot of our assets and gone into hock. We've gone from the world's biggest creditor to the world's biggest debtor. And there is a price to be paid. I mean, we're paying it now. That's why so many people are struggling so much. That's why Donald Trump got elected. And people hope that things are going to change. They're not. And you know, I see all these Democrats now and it really bothers me. They're on every day, they're complaining about how terrible this is, and they're going to be right about one thing. The economy is going to sink. We're going to be in a protracted recession, inflation is going to go up, and they're going to say it's because of Trump. See, we told you so. Everything was great. And Trump wrecked the economy with his crazy tax cuts for the rich and his giveaways for the billionaires. So they're wrong about how he wrecked the economy, and not even that he wrecked it, because when he got it, it was already wrecked. It was pre wrecked when he took it over. But Trump is not going to be able to admit that the economy is bad unless he could blame it on Biden, which he's already trying to do. But I think that it's going to be an easier PR campaign for the Democrats with the support of the media, because Trump promised a golden age. He promised an immediate boom the minute he walked into the Oval Office. And when that doesn't happen, right, you know, then, you know it's going to look bad and it's not going to play well in the midterm elections. In a world full of noise, long term thinking stands out. On the Capital Ideas podcast, Capital Group leaders explore the decisions that matter most in investing, leadership and life. It's a rare look inside a firm that's been helping people pursue their financial goals for more than 90 years. Listen to the Capital Ideas podcast from Capital Group, published by Capital Client Group, Inc. Whether you write code or shape strategy, if you build, you belong. Twilio's Customer Engagement Platform is the ultimate toolbox for developers, designers, business leaders, and everyone in between looking to create truly memorable customer experiences. With Twilio, you can combine data, AI and real time communications in one open, flexible space. So you can build without limits, without workarounds and without compromise. So what will you build today? Learn more@Twilio.com meanwhile look, they're making a lot of talk about all the big cuts that are going to come out of out of Doge. But look at what's going on right now with the Republican budget that they're trying to pass. Look, if they pass this thing, it's still going to increase the deficit, right? There's. And they're increasing the debt ceiling by another $4 trillion. Like, what's the first thing that this Republican Congress wants to do is increase the debt ceiling by 4 trillion? What does that tell you? Are they serious about cutting the debt? No, they're not. If they were serious, they wouldn't increase the debt ceiling. There's your opportunity. No more debt. Let's balance the budget. Let's figure it out, right? What agencies can we get rid of because we can't afford all the ones that we got. You know, I said before, if you want to get rid of waste, fraud and abuse, you got to get rid of entire agencies and departments. Because even if you cut some waste, fraud and abuse, you're not going to get rid of all of it. Because as I said before, you can't have a government program that doesn't have waste, fraud and abuse. That is the nature of the beast. That is why you want to keep government to its absolute minimum size. You want the government to do as little as possible. That's what the framers of the Constitution had in mind when they drafted the Constitution and only empowered the federal government with these short list of enumerated powers where they could barely do anything. I mean, that's why and I was listening to what on my father, you know, the government has the power to tax, to pay the debts of the United States, to provide for the national defense of the United States and to promote the general welfare of the United States. That's it. That's the only legitimate reason for taxation. You know, and it doesn't say they can pay the debts of foreign countries. It doesn't say they can pay the debts of students, you know, or people who buy houses. It's the debts of the United States, not the citizens of the United States. And the same thing is with the general welfare. It's the general welfare of the United States, not the specific welfare of every Tom, Dick and Harry who lives in the United States. Any federal government program that is designed to give money to one person to help that person out is unconstitutional. Now, if a state wants to do that, well, that's fine. The Constitution doesn't limit the powers of the states in that way. The states could do whatever the Constitution doesn't prohibit. And there's just a very short section of the constitution, right, Article 1, Section 10, that says what the states can't do, and they could do whatever they want. They just can't do what the Constitution forbids them from doing. Now, of course, every state has their own Constitution which would limit what they could do. But the US Constitution is not about limiting state power. It's about preserving state power. It's only there to limit federal power. The federal government was supposed to be very small. That's why when Peter Navarro was on television today talking about a time 100 years ago when the US ran on tariffs, that's when the US government still abided by the Constitution. The US government was tiny. It hardly did anything. And because it hardly did anything, it didn't cost very much. And because it didn't cost very much, we could pay for it with tariffs. And so if you want to go back to the good old days of low tariffs and no income tax and no Social Security tax and no Medicare tax, right? Want to get rid of all those taxes, you got to get rid of all the government that those taxes pay for. And the fact of the matter is they don't even pay for it because even with all the money the government collects in taxes, the four and a half, $5 trillion they collect, it's still 2 or 3 trillion short of covering the costs. That's why we have these massive deficits and that's why we're paying for government with massive inflation. Anyway, that's it for today's podcast. Again, if you like the podcast, remember, give me the thumbs up, write some comments. Again, as you can tell, I read the comments, I pay attention. I don't read them all. I mean, I obviously can't do that, but I do, I do read them and, and, and, and reply to some of them. So let me know if you like it with the thumbs up. Subscribe to the YouTube channel. I'm still trying to hit that goal of 600,000 subscribers to YouTube. So subscribe follow me on X and again, follow, follow my wife Go to Laughing Cats on on her YouTube channel. And we have the, the links. I have it on some of her videos or favorites on mine. Go to her Spotify. Lucy's coming out premiering on on Friday, and her other three songs are already up on her channel. They're all good. I have a listen to them. I think if you listen, you'll go back and you'll, you'll, you'll, you know, you'll put them on your, your own playlists and get them on rotation and enjoy listening to, to those songs. Anyway, I'll be back with another podcast later in the week. Make sure and watch it live. Bye for now.