← The Peter Schiff Show Podcast
The Peter Schiff Show Podcast
You Can't Have Government Programs Without Waste, Fraud, and Abuse - Ep 1011
00:58:13
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You 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. Peterborough. 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. Know when they decided that they wanted to make a virtue out of selfishness. Your money, your stories, your freedom. The Peter Schiff Show. Quint has the everyday essentials I love with quality that lasts. Lightweight cashmere sweaters, short sleeve Mongolian cashmere polos, linen bott bottoms and shorts. Tees in 100% Pima cotton and European jersey linen. These are the versatile pieces that make a wardrobe actually work season to season. 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And you know, when Trump first proposed Doge, I really kind of dismissed it because when it was originally proposed, it was going to be completely separate from the US Government. It was going to be more like a private think tank. And it reminded me a lot of the Grace Commission, which was something that Ronald Reagan put together in his first term. And you know, a lot of the, the Trump campaign was, I think based on a lot of the Reagan campaign because Ronald Reagan, when he ran, he was going to eliminate government agencies and departments like the Department of Energy and the Department of Education. But he was also going to Washington to drain the swamp and to get rid of waste, fraud and abuse. And so Donald Trump ran on a similar platform on those issues. And so I thought that Doge would be more like the Graves Commission, which did identify a lot of cuts to government spending and it made the recommendations to Congress and they fell on deaf ears and nothing got cut. And so there was no real cuts to government spending under, under Reagan. Now, of course, the problem wasn't nearly as acute as it is now. When Reagan came to office in 1980, you know, we still only had what, 30% to 40% debt to GDP. So it, the, the problem was there, it was growing, but it was in its infancy compared to where it is right now. In fact, the national debt didn't even hit a trillion until sometimes, you know, during Reagan's first term, it got to a trillion. I mean, now it's almost 37 trillion. So it's a far bigger problem that needs a much, you know, more draconian solution yet. We never even got a solution when Reagan was president. And because politically it was a non starter, nobody really wanted to cut anything. And so I was not very optimistic about, about Doge. But my opinion has evolved somewhat on, on Doge and what they will be able to accomplish based on the fact that Trump has actually made it an official part of the government. I mean, it's operating right out of the White House and it, the, the representatives of Doge actually have authority granted to them by the President to go through various agencies and departments and try to eliminate what they can without congressional approval, spending that is determined to be wasteful, fraudulent, abusive. And they're actually making quite a bit of progress. Now, while I think that they are going to be able to make some cuts far more than anything that we saw with the Grace Commission, I don't think it's going to be nearly enough to get us out of jail as far as paying for the tax cuts. I think that even if they can come up with $1 billion or not a bill, a trillion, a trillion dollars worth of cuts, which I, you know, I don't even see how they can get anywhere close to that. Right now I'm looking at the, a national debt clock and they now they have a Doge window up there, a Doge clock. So according to US debt clock.org the Doge Boys have found ways to eliminate $114 billion worth of spending, which in a $7.2 trillion budget, which is what we got, you know, is about 1 1/2 percent, assuming they. These cuts are actually all eliminated. I mean, maybe these are just expenditures that have been identified that they're hoping to get rid of. I'm not really sure. But, you know, they're going to find if you actually have smart people who are dedicated and committed and not beholden right to some bureaucratic establishment, you get people like Elon Musk and his team in there, they are going to find waste, fraud and abuse. I mean, anybody who believes that that's not there is completely naive and doesn't understand government. You can't have a government program that isn't wasteful, that isn't abused, and that isn't the subject of fraud. I mean, that is par for the course. It is impossible to have programs that do not have that. That's why you want to minimize the amount of government you have, because anything the government decides to do is going to be subject to waste, fraud and abuse. That's why it's very inefficient process. That's why you want to completely limit what the government does. Because so much is going to be wasted, so much is going to be stolen, right? There's going to be so much graft and kickbacks. I mean, that is the nature of government. There's nothing you could do about it, right? So all you could do is is minimize it. And yeah, they're going to be able to find some of the waste, fraud and abuse. They're not going to be able to get all of it unless you're going to, you know, cut it out from the root, unless you're going to eliminate the entire agency or the program. You're going to get some of the waste, fraud and abuse, but you're not going to get all of it. You know, some of the stuff that looks so ridiculous. And if they're pulling off scams this easy, you can only imagine the stuff that's harder to ferret out. But, you know, now they're talking about looking at the Social Security Administration and they're seeing that checks are being mailed out to people who have been dead for decades, in many cases multiple decades. I mean, and some of the, the ages are obviously, you know, completely farcical because you're talking to 300 years. They didn't even have Social Security until 1933. And so nobody that was born before the Civil War, you know, probably even lived old enough to collect it. I mean, maybe, yeah. I mean, maybe if some was born in 1850, you know, they got it, you know, in, in the mid-30s, you know, but. But. But certainly they got people in there that were born during the Revolutionary War. So obviously, that's just complete fraud. I mean, I don't even know where they're getting these birth dates. But I'm sure what is going on in Social Security, and it has been going on, obviously, for quite some time, is that people die of natural causes or whatever. They die. They were collecting Social Security. You know, a lot of people now just have direct deposit. It's pretty easy. The Social Security money goes directly into your bank account. So you don't even have a check that you got to take down to a bank. It just goes right in your bank account. Let's say, you know, my father's getting Social Security and he passes away, and, you know, his bank account is still open. Maybe I don't tell the bank that my dad's dead. How does the bank know? And if the Social Security Administration. I'm not really sure what the procedure is, who's supposed to tell the Social Security Administration that somebody who's collecting Social Security died? Or even if they haven't collected it, right, Once they get to the age of eligibility, maybe the checks just start coming automatically. I don't know. But assuming my father is getting Social Security direct deposit and he dies, I got his ATM card, I know his pin, and I see that the Social Security checks keep coming, and I just spend the money, right? I don't tell anybody. And I'm sure that this is going on rampant throughout the country, that people are just collecting Social Security for their dead parents or maybe even their grandparents. Who knows? Maybe somebody dies and his son collects Social Security, and then that guy dies and the grandson dies, collects the Social Security for both of them, right? And nobody tells anybody, and nobody probably feels bad about it. I mean, people don't necessarily see the victim in this crime. It's not like, you know, if you rob somebody, you, you know, you know that you've taken money from another person, right? You know, you may feel bad about that. You may feel a little guilty. I mean, a lot of people won't steal from somebody else because they. They can recognize that that's wrong. But money from the government, a lot of people don't even look at that as wrong because they look at the government as this unlimited, you know, just pot of money. They just has money out of thin air. So who's the loser? It's a victimless crime as far as most people are concerned. I mean, the government is spending $7 trillion a year. What's an extra 10 grand or whatever it is for one guy, Social Security, he probably doesn't even care. I mean, the deficit is 2 trillion a year, 3 trillion a year. What's an extra 10 or 20 grand? I mean, who cares, right? In fact, a lot of people may rationalize it like, well, you know, I'm helping the economy. I take that Social Security money and I go out and spend it. It's my own stimulus, it's my own qe, right? I'm taking the money and I'm spending it and everybody is winning. And so why should I upset this apple cart by telling the Social Security Administration that the person who's entitled to this money is dead? And, you know, we've created a, a country of people who think they're entitled to free stuff. I mean, nobody who's on welfare has any qualms about cashing those checks. And so, you know, once people are of the mindset that the government owes them something, that they are entitled to something, well then they're entitled to that too. What, what is the difference, right? I mean, so what? You know, they made a mistake. You know, and especially if a lot of other people are benefiting from the same mistake, you know, you might feel like a fool if you're the one that, that says you don't want the money. Because if one person calls up the Social Security Administration and says, hey, you know, my dad died, stop sending the checks. But if he knows that a lot of other people whose dads have also died, they're getting their checks, I mean, what they're doing is not going to make a big difference in the scheme of things. So they might as well cash their check. Especially when people are struggling to get by. You know, imagine how much more difficult it would be if all these people who are collecting Social Security checks for dead people, if they didn't have that money, right. How would they survive? You know, I just read again that the Social Security delinquencies now are at a 13 or 14 year high. But the last time the national Security credit card delinquencies, but the last time they were this high, we were in a great recession. And so normally, in order to get to a point where people can't make their credit card payments, you're in a recession now. I think we are in a recession and that's why people can't make their payments. But if we're not in a recession now, just imagine how much worse it's going to be. I already talked about on the podcast that people you have A record number of people, record number of people who are making their minimum payment on their credit card. I mean, who the hell would do that unless you had to? Especially when credit card interest rates are 24%, you know, you've got record high interest rates, you would want to pay that balance down as quickly as possible. The fact that a record number of people are making the minimum payment shows you how, how, you know, bad they are. You know, I was listening to Walmart, I guess they report earnings tomorrow and they were talking about it and I think Walmart had recently mentioned that the biggest growth in their customer base is coming from households that make over a hundred thousand dollars a year. Now, if higher income households are now shopping at Walmart, what does that tell you, right? I mean, they're trading down to Walmart. They don't really want to go to Walmart, it's just that they can't afford more expensive stores. And so they're, they now got no choice, they got to go shopping at Walmart. That is a sign of distress, the fact that Walmart is earning more money because wealthier people are now shopping there. Now can you imagine their normal customers who were not wealthy who were shopping at Walmart? Now what are they doing right now when they shop at Walmart? It's mostly food that they buy because by the time they finish filling up the grocery cart, they got no money left over for anything else. And then they're using credit. So a lot of people are probably only getting by because they got a dead person's Social Security check. But hopefully they can find a way, you know, to solve a very simple problem and, you know, get some verification. You know, I guess anybody, I would say anybody who's even over the age of 90, I mean, I mean, not that many people even make it to 90, let alone 100, 110, 120. But certainly I said, look at 90, we're going to send something out and we need some proof that the guy's still alive. You know, you got, you gotta go into, you know, we don't mind sending your Social Security, but you gotta prove that you're still living, right? I mean, how hard could that be to prove that you're alive? So, you know, they may be able to make some cuts in Social Security after all, but the problem is there's a lot of people who are legitimately gonna be going on Social Security every year. And you know, so the net may still be that Social Security spending increases, especially if we get the budget that Trump is supporting, you know, in the House, I think the Senate is having more trouble, but I think it's making progress in the House, where you have no tax on Social Security benefits. That is a massive increase in, in Social Security benefits. You know, part of this new bill that Trump is, you know, promoting and hoping to help push across the finish line includes an increase of 4 trillion or 5 trillion in the debt ceiling, which will only get the government through another year or two. So it's not like that's even that big an increase. But Donald Trump wants an increase in the debt ceiling and that is very unfortunate because If Trump is 100% committed to making big cuts in government spending and he doesn't have to worry about court challenges, because right now you got all these lawsuits that Congress or very, you know, people are filing to try to say Trump doesn't have the authority to cut this, right? You can't. Congress has appropriated this money and you got to spend it, right? You can't decide you're not going to spend it. The power of the purse rests with the Congress and you got to spend what we appropriate. And you can't unilaterally get rid of programs that we've passed. We need to do that, right? And, you know, they may have a point and a lot of these cuts may end up not even holding because some court throws them out. But what Trump could do, and no court could stop him, is just refuse to sign that increase in the debt ceiling. Just say, right now, look, the buck stocks with me, right? We're not, we're not raising the debt ceiling. I think I mentioned this on the last podcast. And then there's no court. Congress has got to cut spending dramatically right now. But that would accelerate a lot of painful reductions in government spending. Necessary pain, constructive pain, pain that would be worth enduring for the big benefits that would accrue. And not in the very distant future, but in the relatively near future. But that's not going to happen. Anyway, I got a quick commercial break, so stick around. Coming right back. Some of the best lessons don't come from a classroom. They come from experience. On the Power of Advice, a new podcast series from Capital Group. You'll hear from CEOs, investors and founders about how they built careers, took risks and reinvented themselves. If you're starting your own journey, this is the kind of advice you won't want to miss. Available wherever you get your podcasts published by Capital Client Group Inc. Alright, so I want to talk, though, about the whole idea that government programs are always going to be abused there's always going to be fraud and of course there's always going to be waste. I mean, first of all, waste is going to go hand in hand with government at all times because there is no incentive for any government to be efficient. See, in the private center, private sector, if you own a business, you have every incentive to be efficient because whatever money you save means you have a bigger profit. So you earn more money if you're efficient. So yeah, I'm going to save money wherever I can. Plus if I'm in competition and I'm not being efficient and my competition is they can undercut me, they can offer a lower price and I'm going to lose customers. So you have all sorts of market forces and self interest that drive efficiencies even in charities, right? If I'm running a charity, I'm going to be efficient because charities will, you know, come out with reports and they'll show how much they spend on their overhead and how much actually goes to the intended recipients of the charity. And if you don't show that you're doing a good job and that you're running a type ship and that most of the donations go to the people that you're trying to help, people aren't going to donate to your charity, they're going to donate to another charity, right? They're going to donate to a charity that is efficient with their charitable donations, right? They don't want their donations just to go to a bloated bureaucracy. They want them to help, you know, whatever cause the charity has, you know, decided it's going to help. And so charities compete, right, for donation dollars. And so they have to do a good job or they're, they're not going to get any money. Right? So in the private sector you have and natural way to cut down on, on, on waste. But in government, no one gives a damn. If you waste money, there's penalty. If you're a government bureaucrat, your salary is the same whether you waste money or not. In fact, there's actually a perverse incentive to excessively spend money. Because a lot of times the way Washington works is an agency or a department, whatever gets a budget. And then the following year they base the next budget on what you spent the prior year. So if you were efficient and saved money, let's say I was allocated $10 million, but I only spent eight, the following year they're going to say, oh, this program only spent 8 million. Okay, well let's not give them 10 million. Well, you know, we'll give Them, we'll give them eight. Now you got less money, so now you got a smaller budget. You're going to have a smaller staff. You're not as, as important, right? Because yet you're in control of a smaller pot of money. Nobody wants that, right? Everybody that has a job in Washington wants to have more responsibility. They want a bigger agency department, they want a bigger budget. If for any other reason, you know, the more, the bigger your budget, the more you can steal for yourself, right? I mean there's, there's a lot of incentive there too. And we know that there's uncovering a lot of that is going to be great to have some investigations of some of these people who got rich running all these programs, right? But you don't want to do that. So what you want to do is max out whatever you got, right? Whatever you've been allocated, just spend it. Because that way next year you'll get at least that amount, if not more. In fact, people say that towards the end of every fiscal year, that's when it's great to sell stuff to the government because they're just spending whatever they haven't spent, right? If there's any money they haven't spent and they're getting close to the end of the like the year, they just rush to buy whatever they can, right? Because they just want to spend the money so that they can show that they spent it so they can get a bigger budget in the following year. So it's a perverse incentive to be wasteful. That's government, right? So that's, that's why we got to keep government to an absolute minimum. But abuse, of course, everybody is going to abuse a government program, without a doubt. And that's what the government doesn't understand. They don't understand the concept of moral hazard or the principle that you get less of what you tax and you get more of what you subsidize. So first let me think about moral hazard, right? I mean, how people will change their circumstances to qualify for a program. So let's say the government decides that it's going to come up with a certain needs based program where if you earn less than $2,000 a month, you qualify for this benefit, whatever the benefit is. And let's say that benefit has a value of 500 bucks, you know, whatever it is. So if you earn less than $2,000 a month, you can sign up for this government program, you'll get $500 worth of benefits, right? Well, let's say I earn 20 $200 a month. Wow. I don't qualify right? Now, what if I go to my employer and I say, look, cut back my hours. I don't want to earn $2200 a month. I want to earn 1900 dollars a month. So cut back my hours. I won't work as much. Now, you haven't broken the law, right? There's no fraud there. You know, you're just. You decided to work less, but now you qualify for the 500 benefit. So now you're getting 1900 from your employer and you're getting 500 from the government. That's 2,400. You're 200 better off and you don't have to work as hard, right? So I didn't commit fraud. That's not illegal to work less and then qualify for a program. But I'm certainly abusing the program because the program was intended to help people who earned less than 2,000amonth. And I earned more. So in theory, I didn't need the help, but I changed my circumstances so I could get the help, right? People want government benefits and they will do things. That's why when the government, let's say they figure out, okay, how many people earn less than $2,000 a month, and they want to know how many people are going to qualify for this program so they can budget it, and then it ends up that they end up spending way more than they thought because it turns out a lot more people earned less than $2,000 a month. Yes, because the minute you establish that as the cutoff, people change their circumstances. Now, some people would commit fraud, right? They would cut back their hours and then they'd get a job under the table for cash, right? So they didn't report it. Now, that would be fraud. But that happens too, right? Because the government opens up this Pandora's box of, you know, fraud, and it's much easier. And one of the reasons it's so easy to steal from the government is they don't complain. Like, if you steal from somebody in the private sector, you know, they're going to complain because it's their money. They're going to notice it right away. They're going to do something about it. The government doesn't care less. They a, they're so huge they don't even notice it. But it's not your money. If you're a government bureaucrat and somebody is stealing money by getting a, a benefit that they're not entitled to, it doesn't cost you anything. I mean, you're going to knock your Brains out, trying to figure it out why you're not going to get a reward or a bonus because you. You found some fraud going on. So it just happens. It's so easy. It's an easy target, right, to steal from the government. It's so much easier to get away with it. And it takes a lot less effort than stealing, you know, in the private sector. You know, here's another example, too, of that where, you know, not just moral hazard, but getting more of what you subsidize. So if the government taxes something, right. They get less of it, right? Whatever the government taxes, there's going to be less of it, right? If. If the government, you know, put a tax, you know, on. On dancing, right? If they said, you want to go out dancing and it's. It's $100 tax, right? Not as many people are going to go dancing because they don't want to pay the $100 tax. I mean, I guess some people, if they really love dancing so much that they're going to pay $100 to go dance, they'll do it, right? But if the government. The government, you know, taxed you $100 for dancing, fewer people will go dancing. But on the other hand, if they decide to pay everybody $100 to go out and go dancing, a lot of people who didn't even like dancing would start going to dance clubs to get their hundred dollars, right? So if the government pays you to do something, you'll do more of it. If they tax you for doing something, you'll do less of it. Now, of course, that. That applies to the income tax. They're taxing you for working. So, you know, at a point, you don't work as much because the government is discouraging you from working, because they're taxing work. Well, when they pay you not to work, right. When they subsidize you and they give you money not to work, well, you know, they get more people not working because they want to collect the money. And one of the best examples of that is what happened with the welfare program, Aid to Families with Dependent Children, which was a creature of the Lyndon Johnson Great Society, where the government said, oh, you know, we have all these women who are trying to raise children without a father. The father's gone, you know, he just left them. Or maybe they don't even know who the father is, whatever. But you got a woman and she's got a kid, and there's no man to go out and work while she's trying to take care of the Kid, oh, this is terrible. So let's have a program for women who are trying to raise children without fathers. Let's give them money. But you know, the women who are married and they have a father, well, you know, they don't need the money because they got a man in the house who can go out and work and so they're not in trouble. We want to help these poor women who, you know, don't have a man yet they have a child. Right? So we're going to give money to women who don't have husbands but have children. Well, lo and behold, what happened, there was an explosion in the number of women who had children and no husbands. In fact, if a woman got pregnant and the guy like, hey, let me marry you, she would like, no, no, don't marry me, I can't afford it, I'm going to lose my welfare. Just, you know, just, you know, stay away, right? And now women started to have more children. Not just if you had one child, you know, they gave you more money. So the more children you had, the more money you got. And so now women started having more children. And so the whole budget blew apart, right? Because when they passed this bill, there was a certain number of women who were raising children without fathers. But after the program was created, there was an explosion in the number of single women with children because they were incentivizing it. They were paying for. You have all these generations of young women growing up and having babies themselves. When they're 13, 14, 15, they have their own babies and now the government sets them up in a house, gives them money. Right. I mean, it was like a way of life in, in these, you know, intergenerational families of fatherless households, all subsidized, all paid for by the US government. You know, before this started in African American community, it was very rare for African American families to break up and for children to be raised without a father. You know, and part of the problem of all these children raised without a father, especially boys, it's difficult for a woman without a father husband to discipline teenage boys. You know, to raise these boys into men without a father, they're far more likely to get involved in crime, you know, and stuff like that. When there's no father figure in the home to rein them in, it's very difficult. You know, when these kids get to be 13, 14, 15, they're a lot stronger than their mother. It's very hard for a mother to control 14, 15, 16 year old son. You need a, you need a man in the house to do that. But the government chased out all the men. You know, here is a crazy statistic that shows you how much damage the government can do to a family. So I looked it up, and I should have looked up the statistics on what percentage of African American children grew up without fathers back in the 1920s, 1930s. I know it was very small, and it was about the same as for, you know, white families. But as of today, 48% of African American children grow up in homes without a father. 48%. Almost half now during slavery. Slavery, right. Only about a third of African American slave children born into slavery, only about a third of them grew up without their fathers. Right, because, you know, maybe they got sold off or their, you know, fathers, you know, maybe the, the master sold the father or something or sold the kid, I don't know. But it was rare. Right? Two thirds of the slave children grew up in a home, on a plantation with their parents, with their father. Now, I'm not condoning slavery by any stretch of the imagination. My point is the US Government, through the welfare state, did more damage to the family than slavery. Families were more intact when they were slaves than when they were entrapped in the welfare state. I mean, think about that. And again, I'm not saying that returning to slavery is the way to solve the problem. I'm just pointing out how much damage the government has done that even the slaves didn't. Slave owners didn't do this much damage when it came to breaking up the family that the welfare state did. And the incentives created by the government to pay women not to have husbands, not to have fathers, and to have, you know, multiple children all by themselves because the government paid them. So all of this is abused, all these government programs and by their very nature. So nobody should be surprised that they're finding this. And, and what's great about it is a lot of people don't know this. A lot of people don't realize how bad the government is. They're finding out they're finally getting their eyes open, right, to, to the corruption, the criminality that is involved in government. I've always said the worst people, the most corrupt people go to government. They're attracted to government. And even if they're not corrupt, when they go, they get corrupted while they're there. And that's the only reason they can stay there. Because if you're not corrupt, if you're not, you know, you're not, you're going to, you're, you're not going to stay in Washington you're, you're going to leave. It's either going to disgust you and you're going to get out or you won't be able to stay there because the more corrupt people are going to, are going to get your jobs and they're going to beat you in the elections. Anyway, I got one more commercial, so stick around. Coming right back. Safeway and Albertsons have made saving easier than ever with great savings on family favorites this week. 16 ounce sweet strawberries are two for $5 member price. And don't miss the incredible deal on Signature select boneless skinless chicken breast value packs for 2.97 per pound limit. One plus medium avocados or mangoes are five for $5 member price. Fresh and delicious savings for every meal. Hurry in. These deals won't last. Visit Safeway or albertsons.com for more deals and ways to save. Okay. Anyway, so I was just trying to look on Chat GPT for some of these statistics for children growing up in fatherless households before the Great Society programs. And I'm not, you know, according to Chat GPC for white families it was 10 to 15% and black families was 20 to 25%. I don't know if those are accurate numbers, but clearly the numbers have moved up dramatically over time, particularly for African American. And that even the 10 to 20% or 20% number would be an improvement over what was experienced during slavery. But now it is way worse just with that statistic. I mean, obviously there are other, many other aspects of lives where they're better off, but with that one particular it's worse. And of course that has created a lot of other socioeconomic problems that have been the result of, of children growing up without, without fathers, the extra crime and all sorts of things that have, have followed from, from that. Of course, they haven't even ended that program. I think they've tweaked it a bit. It's not as bad as it used to be, but it's still ongoing today and it still continues to do a lot of, of a lot of damage. Anyway, earlier today we got the Fed minutes, the FOMC minutes that came out. And you know, one of the, the interesting things about the, the minutes is that they repeatedly spoke about the need to kind of be patient and, you know, hold off on any additional rate cuts. They said that they wanted to maintain their restrictive stance longer and not cut until they have more signs, more evidence that inflation is going back down to 2%. Now, first of all, right now there's no sign that it's going down to 2% because it's going in the other direction. So they shouldn't even be saying we're looking for more signs. They should be saying we're looking for our first sign. Or they should be saying we're looking for signs that the current trend towards higher inflation is transitory. Right. They're not really saying how bad it is, but they're saying that they're looking for a sign that inflation is coming down. Well, they're not going to find one. But the interesting part is that they continue to emphasize that their current policy stance is restrictive. It's not restrictive. That is the problem. See, they think that they have restrictive monetary policy. And so they just assume that this restriction is going to lead to lower inflation in the future. So they're just sitting back and waiting for it to happen. But the reality is the policy that is in place right now is stimulative. It's not restrictive. It is fueling the inflation fire. It is not putting it out. And so while they're waiting for inflation to go down, it's going to go up. What they're not talking about in the minutes is raising interest rates is the possibility that they made a mistake or the possibility that their current policy rate is not restrictive because they can't even consider that that's a possibility. But debt continues to increase at all levels in the economy. That is a sign that credit is too loose. Remember, inflation is an expansion of the supply of money and of the supply of credit. So if credit is expanding, you are putting upward pressure on prices. And if your interest rates are still so low that credit is expanding, you are pursuing an inflationary policy. You need to raise rates high enough to contract credit so that people don't borrow money because it's too expensive to borrow money, but people keep borrowing it because it's cheap. And if you look at a real rate of inflation, in fact, not even the real rate, look at the current nominal rate of inflation, right? The last month had inflation up a half a percent in one month or prices, that's 6% inflation. If you annualize that, if you annualize the last three months of inflation, it's 5%. The fed funds rate is four and a quarter. So if your fed funds rate is lower than your inflation rate, well, by definition that's stimulative. Right, because interest rates are negative. Right. You're getting paid to borrow money. Remember I said earlier the government gets more of what they subsidize. If they're going to pay me to Borrow money. If they're going to say, hey, borrow money at 4% and pay it back when inflation is 5%, I'm getting free money. There's no real cost to borrowing, so more people are going to borrow. If the government's going to pay you to borrow, what they need to do is ratchet up interest rates to make borrowing expensive. So fewer people will do it. But they don't have the guts to actually choke off all that debt fuel consumption, because they know that it will produce a recession and they don't want that. So they don't really want to fight inflation. So they just pretend that their accommodative policy is restrictive. And meanwhile inflation, as obvious, is going to keep getting worse. The question is, when are they going to do something about it? Or when is the market going to realize that they can't do something about it? Because so far, you know, the market seems to accept, at least superficially, you know, that, that they got it under control. Now another thing they mentioned in there was that they're getting close to tapering their quantitative tightening, which is something that, you know, I've been saying for a while, they're going to stop the quantitative tightening, but I think stopping the, the, the, the tightening is just the first step to launching the next round of qe. And again, they've said that they can't do that unless they're at the zero bound. I think that's just their own policy that they can change whatever they want. Just like they adopted the 2% inflation target, you know, by the way, you know, New Zealand, the Reserve bank in New Zealand just cut rates 50 basis points last night. I think they're at like three and a half or something. I fret. Exactly. But they've cut now, I think by 150 basis points. They've had 350 basis points cut, so they were up above 5. But it was New Zealand that initially came up with the 2% ceiling, but they couldn't, they couldn't quite meet it, right, because they, they wanted to have bigger deficits because they, they're running budget deficits now in New Zealand, right. Know they had gotten rid of them for a while, but they actually raised their ceiling to a 2, 2 to 3% range. So now the Reserve bank of New Zealand that started out with a 2% ceiling now has a 2% floor, right? They now have a target range of inflation from 2 to 3. So 2 used to be the ceiling, now it's the floor of this new range, right? This just got changed over Time, but the government actually changed it. They actually had to change the Reserve act because the act actually stated that there was a 2% ceiling. But there was some political pressure to change that to enable bigger deficits, to enable higher inflation. As if higher inflation is a good thing. It's not. They would have been better off had they left the ceiling intact. But, you know, that gets in the way of free stuff from the government. And so the public doesn't really understand what free stuff from the government costs. And so if it means they have to have higher inflation to get that free stuff, well, that's, that's something that they're willing to accept. But it's interesting that they're now at 2 to 3% and we're saying we're at 2%, but, you know, we're really got that from New Zealand. And so when is the U.S. government going to admit that, well, 2%'s not the target, it's 3 that's coming, that that is going to happen. But of course, they're not gonna be able to meet three either, because the inflation rate is gonna be much higher than that. And, you know, Donald Trump, and I was watching this speech just before I started doing his podcast. Donald Trump was doing a speech down in Miami. And of course, since he's in Florida, he had to, you know, throw some fresh meat to the bitcoin crowd. By talking about bitcoin, I noticed he got the price to go up a little bit. Talking about how, how much bitcoin went up after he was elected. You know, takes credit for that. This is great. We're gonna make the US the crypto capital. You know, I really hope we're not the crypto capital, because whoever's the crypto capital loses, right? Because whoever has the most crypto when the music stops is the big loser. And of course, whatever country squanders more of its resources on the bitcoin bubble and crypto and blah and all that, you know, is the biggest loser because that money could have been invested productively. Instead, it's, it's squander. But. And, you know, he said, you know, while I was president, he repeated that stuff, you know, about how we had the greatest economy in the history of America. When I was president. He said people were amazed. They couldn't believe how great it was. It's like, you know, I don't know if he actually believes, Believes, believes that stuff, but he said again in that, that if he had been reelected, we would have had no inflation problem, that inflation was low, it was 1% when he left. And if he had stayed here, it would have stayed down there, forgetting about the fact that inflation really started to rise in the final months of his presidency. And the worst year of inflation under Biden was the very first year that he was in office. And of course, a lot of that inflation was Trump. Now, Trump is already basically saying, because, you know, the Democrats are trying to, you know, hold him responsible for the bad inflation numbers we get shot, we just got for January. And Trump is like, hey, I've only been here for three weeks. This is Biden's inflation, right. And he's going to be blaming these bad inflation numbers, right. He's going to be calling it Biden inflation for most of the year. I guarantee you that come June, July, we're still getting bad inflation numbers. He's going to say, hey, look, I've only been here six months, right? We're still dealing with Biden inflation. Well, for the first six months when Biden was president, he was still dealing with Trump inflation, right? The, the worst year of that Biden had was his very first year, right? And so for Trump to say, had I been reelected, we would have had no inflation. It's a complete, you know, lie. Right. Of course, we, we, we would have had inflation, and we're going to have a lot more inflation. Even though we're getting these cuts from Doge, it's not going to be enough given the enormity of the problem that we have and the, the, the size of the cuts relative to the rest of the budget. Right. Even if they're substantial, they're not going to be enough to undo the, even the tax cuts that they're proposing. Right? Because they're, they're, you know, the only cuts that they're probably going to make are, are these Doge cuts, right? Congress isn't going to vote for cuts. So whatever, you know, whatever the Doge Department could, can ram through will get. But I don't think Congress is going to really vote to cut anything else. They never do, you know, and they're, you know, the Democrats are certainly not going to support it, and the Republicans may need some Democratic votes to get this stuff through, because there's going to be some conservative Republicans that aren't going to want to vote for these huge deficits. So the only way to get these bills over the finish line is going to be to attract some Democrats and they're going to want something for that support because they don't give a damn about the size of the deficits. They'll just make them bigger. So the only cuts we're probably going to get are whatever cuts we can get out of the executive branch, Tom, and it's not going to be enough. You know, by the way, one of the interesting things that they are talking about right now is doing an audit of the gold in Fort Knox. And, I mean, that could open up a hell of a can of worms. First of all, the last time that the gold was audited was 1953. 1953. Not many Americans alive today were alive the last time there was an audit of the US Gold holdings. So how do we know that the US Government still has all the gold that they claim to have? Well, we don't know. I mean, maybe they don't have it. Maybe it's been leased out. Maybe it's been sold. Who the hell knows, right? Maybe some of it's been stolen. Nobody knows. Now, of course, it doesn't really matter in a sense that it used to matter, because back in the 1950s, when they were auditing the holdings, people who held Federal Reserve notes wanted to know that the goal was there because that's what those notes were. I went over that this on the podcast. Federal Reserve notes were promises to pay gold. They were promises to pay dollars, which were defined by a weight of gold. So if you had $35 and you were, you know, let's say the French government, and you had $35 in reserves, you are entitled to an ounce of gold. Well, you weren't going to take the US Government's word for it. You wanted to see some independent audits. And so there were audits of the government's gold holdings. So, you know, okay, yeah, they've got enough gold to back up their notes. You know, it'd be like if somebody writes you a check and you want to know what their balance is. Hey, you just wrote me a $10,000 check. Can I see your bank balance? Do you actually have enough money, or is this check and a balance right? That's what our creditors wanted to know. I got your Federal Reserve note. You know, do you have the gold right, that, that. That you're obligated to pay? Well, you know, during the 1960s, when we really started to run up these big deficits for the Great Society programs, War on poverty, the Vietnam War, the space race, all that crap that we were spending money on that we didn't have taxes and we started run these deficits, we weren't really doing any audits because we knew, right, that we didn't have enough Gold. We didn't have enough gold to make good on our notes because we had to have enough gold to give everybody with $35 an ounce. And clearly we didn't have enough. And, you know, as the 1960s progressed, right, a lot of our foreign creditors, you know, figured it out for themselves, right? They see all these deficits. They see all the money we're spending, and they're like, there's no way they got the gold. This is bullshit. And, you know, and so I'm just going to cash in now while I can, right? I don't. I don't want to be the last man stuck. I want to cash in my. My Federal Reserve notes now and get dollars, right? I don't want to wait and be sol Right when, you know, I want. I want to hurry up and get my goal while I can. And so that's when you started to see, like, Charles de Gaulle and others where it was like a run on the bank. Everybody was taking their Federal Reserve notes and saying, give me my gold. And that's when Nixon, you know, he tried to slow it down. He devalued the dollar twice. Okay, we don't have enough. We can't do it at 35. How about 37? And. And our creditor said, bullshit, I want my gold. Even at 37, I don't think he got it. And then we, you know, we devalued a couple of times. We got to 42. And then we said, screw it. Well, you know, let's shut the gold window, right? That was the only way to stop it. Well, once we left the gold standard in 1971, it really didn't matter how much gold we had because nobody was entitled to any of it. I mean, nobody who owns Federal Reserve notes now believes that they're entitled to any gold, right? It doesn't matter how much gold we have. It's irrelevant because you can't get any gold for your Federal Reserve notes. Now, the relevance might be that's our reserve to support the dollar, right? Because other countries have their reserves in dollars, or they have it in euros or yen or pounds or other currencies. The United States hardly has any foreign exchange reserves, Hardly any. But what we do have, in theory, is a big hoard of gold. And so what that gold would enable us to do if the dollar really started to fall, right? And we wanted to defend it, we could take gold and sell it and buy back dollars, right? We can, you know, use our gold to buy back our. Our notes, right? But if we don't actually have that gold, right? If it turns out that that gold isn't there, all hell's going to break loose, right? There are some people who think, well, that'll be bad for gold if we don't have it. No, no, it'll be phenomenal for gold if we don't have it. If the United States doesn't have that gold that we claim to have, gold prices are going to go ballistic and the dollar is going to tank because that means we are defenseless, we have no reserves of anything in order to defend the dollar. And it means the US Government needs to buy gold. Well, where's the price going to go if the government doesn't have the gold that everybody thought it had? So that is a big deal. And because if we don't have our gold, that doesn't just mean there's more gold in the world. It just means that the gold that, that China has the gold that India has the gold that Russia has, the gold that Saudi Arabia has is the gold that we used to have, right? That's probably where a lot of these countries got their gold if we sold ours, right? It's not like this just, just, just big supplies somewhere floating around, right? It's accounted for. We've just been over counting it, which means there's not as much gold in the world as we thought, right? Because the US Government's gold's not there. Now, maybe China has more than they're letting us know. That's, that's the other speculation. We have less and China has more. So we'll find that out in theory if, if we have an audit. Although, you know, you might be afraid if they actually send some auditors down to the Fort Knox and they get into the vaults and, you know, there's just cobwebs down there. Are they actually going to come out and tell us that? I mean, because again, it's going to be a financial disaster. Now, you know, of course, immediately when the, you know, Elon Musk posts something about that and Michael Saylor comes out and bitcoin fixes this, right? The idea is, well, you know, if they had a bitcoin reserve, we wouldn't have this problem because everybody would know exactly how much bitcoin they have. You know, if the US Dollar was still backed by gold the way it should be redeemable, we would have an audit, right? Because people would care. The reason that we're not auditing it is because it's not backed by gold right now, right? So there's been no Reason to have the audit. But bitcoin doesn't fix that. Yeah, sure, everybody knows how much bitcoin you have, but who cares? The bitcoin is worthless. What difference does it make? Yeah, I can audit it. So what? You're auditing nothing. You know, at least when you audit gold, you're auditing something. And yeah, you have to have trusted third parties that can come in there and verify that the gold is there. But, you know, you have private companies, you know, you could have multiple unrelated third parties that could do audits, independent audits, and, you know, it would work. It did work. The reason that we stopped auditing is because we defaulted, you know, and then at that point, there was no point. But if there's no gold, gold's going a lot higher. It's another reason to buy it right now, Right? Don't wait. Matter of fact, gold is at a record high. It hit a record high today. I don't know if it's at a new record high right now. No, it's 29:36, but it got over 29.40 this evening. And last night, enter and intraday, it traded over. I think it almost got to 2945. I think maybe 2943 ish was the new record high. But gold puts in a new record high almost every day now. I mean, you know, it has a pullback once in a while. Silver almost got back above $33 again today. Got to about 32.90 something. And then it's pulled back right now it's around, I don't know, 3260, 3270 Again, silver is the steel, right? Gold's a buy. Silver is a steel, right? At this price. I mean, I remember when gold, when gold got to 2000, silver peaked out. Got it, didn't even get to 2000. And silver got up to $50 in, in 2011. Gold got to 1900. Gold is 50% higher than it was then and silver is 40% lower. So silver is a steal. But again, gold stocks, Ashante, Gold, Anglo, Ashante, came out very good earnings, really good earnings today. But they did warn that next year production would be less than they thought. And the stock opened down like 8 and a half percent. It didn't close down 8 and a half percent. It closed down like 3 and a half percent. But they were great earnings. You know, earnings grew. I mean, I think free crack cash flow is up 900%. Earnings were up like 80, 90% from last year. They increased their dividend like 250%. I mean, great numbers. The stock's at 11 times earnings. But the stock went down because they said, oh, we're going to have lower production. I'm not sure why the production is going to be down. But you know, Wall street always overreacts to lower production because usually there's a reason that production is being delayed, but it's not being ended. Right. Whatever gold they don't produce is still in the ground. That gold is still there. So if Angelo Ashanti doesn't pull that gold out of the ground in 2025, maybe they pull it out in 2026. And you know what? They'll probably make even more money on that gold selling it in 2026 than they do selling it in 2025. So that, that the annual production is not that important. Unless they tell you, oh, we're restating our reserves. Right? We thought we had this much gold and it turns out we don't. We have a lot less gold than we thought. That is a big deal. But if they don't reduce their reserves, if they just say, look, this mine is having a difficulty, we have to spend some money on some repairs, there's going to be a delay. And so we're not going to get the gold out of the ground as fast as we thought. Who cares? I mean, maybe it's the present value of money, but that's going to be offset, I think by the future increase in the price of gold. But again, most of these analysts just think the price of gold is going to go down in the future. They're like, oh crap, they're not going to get it out of the ground right now in time to sell it at 2900. You know, they're going to, they're not going to get it out for a couple of years and the price is going to be way down by then. Right? That's the outlook that everybody has. So you still have these companies reporting good earnings and the stock going down when the stocks were already cheap before they got the good earnings and they should have gone up. Now look, I don't know exactly when this is going to change again. I'm just telling people, take advantage of this opportunity while you can. Load up on the Euro Pacific Capital Gold Fund. Epigx. No, Europe Pacific. Wait. Europe Pacific. Igx Europe Pacific. G I X G I O. Europe Pacific. Goldfund. Epgix. That's the symbol I don't wanna keep. Forget E P G I X is the no load symbol for the gold fund. Or talk to the reps@europack.com about loading up on these gold stocks. I mean one of these days I'm gonna be doing this show and I'm gonna be talking about this explosive move up into gold stocks and I hope as many people in my audience have already bought them by the time I deliver that news that it's not oh crap, I should have bought. You know, I would have, could have, should have just buy now and so that when I report how much these stocks have gone up that you'll, you'll own them before then again. So go to your pack.com and, and buy you can buy them right on the fund on the website if you don't, if you don't have a brokerage account. Anyway, that's it for tonight. Don't forget like the podcast. Subscribe to my YouTube channel. Still trying to get up to that. 600,000 subscribers to my YouTube channel. Make sure and get our our newsletters@shift sovereign.com I think I'm going to do another podcast again on Sunday night so make sure and be there live for a Sunday night Peter Ship show podcast. Bye for now.