Trump's Replacing Powell

Donald Trump officially has a short list

of candidates for whom he might pick for

the job of Federal Reserve chairperson.

Uh in this video, I'd like to give you a

quick breakdown as to my opinion on each

of the three finalists. Note that these

finalists do not include this guy. Uh

which I actually think is a blessing. I

feel like the vast majority of us have

only ever heard of David Zervos on this

potential discussion that in some off

chance he's on some random 11 candidate

list for Fed chair. uh given that every

time he speaks he solely speaks

as a Trump knee bend and even goes as

far as discrediting the importance of

Federal Reserve independence which

that's kind of a separate issue. I

suppose we could tangentially talk about

that. I'm kind of grateful this guy's

not on the short list. Now it's pretty

late so I'm a little tired. Coupon

expiration is coming up. I got to sit we

got to sit here and change coupon codes.

Honestly, we're probably going to do it

first thing in the morning because I'm

dead tired here. I think I'm on like two

and a half hours on average over the

last two nights. We're just cranking

because we got so much going on. I mean,

house acts buying again. We got

renovations going on. It's it's a lot.

Uh but anyway, uh let's talk about the

short list. And again, this guy is not

on the short list. Uh and just

tangentially quickly know that countries

you should you should already know this.

Countries that don't support independent

central banks generally grow slower than

countries that support independent

central banks. Uh they also tend to have

more extreme business cycles because

when the central banks act, they're

deemed to be less credible. And this all

averages out in the form of lower

growth. You could look at what happened

in Argentina prior to Malay uh and the

uncontrollable inflation. You can look

at central banks that are very centrally

controlled like in Russia or in China.

You could look at Brazil. These are just

other examples where you know these

economies just grow either more slowly

or dysfunctionally like the inflation we

saw in Argentina before Malay or frankly

the inflation that you see in Turkey

just as an example where the central

bank is also essentially commanded by

politicians.

It's not good. This is a very, you know,

quick sort of just tangential side note.

We've gone into depth into why central

bank independence is so important.

Generally, it just bottom line comes

down to markets impression of do we

believe you're going to actually do and

accomplish what you say you're going to

do. Uh this uh this is different from

you central bank that's basically just

going to cater towards what a politician

wants, which in this case is lower rates

uh in the face of potentially higher

inflation.

which would be bad because if you end up

in a stagflationary situation, the Fed

needs to break the back of inflation to

avoid repeating what we had in the 1970s

after, you know, we had presidents and

price controls that actually tried

manipulating the Arthur Burnses of the

70s uh and and uh essentially tried to

turn America into the turkey of its

time. We went through that experiment.

We ourselves learned the failures of

central bank non-independence.

Anyway, okay. So, that tangent now out

of the way. Let's get into the short

list. Again, that's meant to be more of

a bottom line synopsis. There's a lot

more we could talk about in that, but I

want to save your time. It's again, it's

like 12 minutes to midnight here. All

right. So, Trump says that Kevin Hasset,

Worsh, and Waller are finalists for the

Fed chair. Okay, this is good. We have a

finalized list. So, what we've got is uh

White House economic adviser Kevin

Hasset, Federal Reserve Governor Chris

Waller, and former Fed Governor, not Fed

Chairperson Kevin Gorch. I'm going to

give you a quick synopsis on this on

each of these people. And this is my

opinion, so I purposefully have the

don't sue me brochure because, you know,

I don't want to come across as offending

these people, but um I'm going to The

best case scenario is we get Chris

Waller. This guy actually has the balls

to stand on his own two feet and not go

wishwashy

every single month, depending on which

way the wind blows. Ghoulspeed is a

windb blower guy at the Fed. When the

wind's blowing one way, he complains

about inflation. Like now he's wind's

blowing not in the favor of the job

market. It's like fading flames in the

job market and things are getting worse.

And he's well, you know, I'm not

convinced yet. You know, one month

doesn't make a trend. All right, we

talked about that earlier, right? But

he's the same guy that a year ago, last

summer was like, oh, I don't know. I

don't know, man. the job market could

deteriorate. It's like which which one

is it, man? Like put your feet on the

ground and have some balls to actually

stick with something. You know, there

aren't a lot of people who stick with

something. Uh I stick with real estate,

stick with Lauren, and I stick with my

thesis that we are going into serious

deflation,

which is a good thing, right? Prices

come down. Good thing for people who

maintain their jobs. economically

inflation is a bad thing or sorry

deflation is a bad thing and a lot of

inflation is a bad thing. I did see a

comment uh two days ago on a YouTube

video they're like I I still I struggle

to understand why deflation is a bad

thing. I'll give you a quick tangential

economic you know 20 second lesson on

this. Okay, if you're going to buy this

hairbrush and let's say it cost you $100

to buy this hairbrush. If you know you

need a hairbrush and it's $100 today and

we're in a deflationary regime, I'm

going to go extreme. Okay, we know this

hair brush is going to be worth $90 next

year. What's the rush? There's no rush,

man. There's no rush to buy the brush.

That's not what we want. This is

America, damn it. We want you to spend

your damn money. I want you to look at

this hundred $100 brush and be told

convincingly that it will cost you $102

next year. So, you better damn well buy

it right now.

I mean, frankly,

it like it's kind of like this brush

could be the courses on building your

wealth over at me.com coupon code. We

still got to change it. We raise the

price over time. In my case, I believe

we raise the price because we keep

adding value, right? Like course members

who were in there since 2017, you know,

they were promised two live streams a

week and uh you know, talk about real

estate. All right, that turned into

basically an average of five live

streams a week with fundamental analysis

on stocks, on real estate. It turned

into the alpha report. Like people just

keep getting more and more value. Like

people who are in the courses from 2017,

feel free to leave a comment. like

they've been watching lectures since

2017. And then when I release new

Trumpomics lectures, they're going to

get those as well. They're going be

like, "Wow, here I am, you know, what is

that 8 years later and Kevin's still

providing us value for something I paid

for eight years ago." But that's what I

want. I want people to go like, "Wow,

okay, I keep getting value." And that's

why the price goes up. So that's that's

an argument for why our price goes up.

But because the price goes up, people

are motivated to lock in their price

early. So inflation, some inflation does

motivate buying.

That's obviously good for GDP. There's

another factor though, debt. You have to

understand the debt economics. The more

people borrow money, the more GDP be a

turning. In other words, the more G

gross domestic product we can generate.

Notice there's nothing in GDP that

subtracts debt. There's nothing that

says like, "Hey, uh, look, you spent a

hundred billion dollar on chips. How

much of that did you finance? We're

going to we're going to subtract, you

know, the $70 billion of the hundred

that you financed because, you know,

that's debt. Now, we don't care, bro.

You spent a 100 billy. We love you. You

are contributing guess what? A full 100

billies to GDP. We love you. Nobody

cares." So, what does inflation have to

do with debt? Well, inflation over time

makes it cheaper for you to pay off your

debt. This is why we can actually

inflate away our federal government

debt. We've never paid off all of our

World War II debt. It just became barely

relevant. You know, whatever $50

billion, you know, relative to the $ 35

trillion of debt we're in right now.

This is a fart. You know, we fart World

War II debt on a regular basis. Nobody

cares. we've inflated it away. It's the

same thing with like a 30-year mortgage.

You know, you ever get somebody who you

heard they bought their place in the 70s

or even the '9s and it's like, "Oh,

yeah. You know, back in the '9s, I

bought my house for $188,000.

Today, I'm selling it for $700,000."

Like the people who got loans back then

even, they're like, I don't I don't care

if I I put 20% down on 188k property.

Let's say they didn't refi it. Over

time, that $150ish thousand of debt just

became worth so small relative to the

value of the asset. Doesn't really

matter. Inflation, which real estate

helps hedge against, is fantastic to

motivate people to buy and to go into

debt. That is why the Federal Reserve

has a 2% inflation target. It's not too

much to where we're worried about, you

know, stagflation and then the dollar

loses credibility, uh, and then we have,

you know, bricks currency concerns and

we lose that ability to run our money

printer to finance the wars and really

whatever the hell we want. Think about

how wonderful that is to have a money

printer. You print however much money

you want and people still like believe

your currency. Like the imag like the

creation of fiat is just insane and

people still believe it. They believe it

because we got the guns, baby. We got

the biggest guns. That's part of the

reason. This is like an economic lesson

here. But uh so understand that that is

why we have an inflation target.

Deflation does the opposite. It hurts

debt spending. It hurts GDP. And it

hurts people's motivation to actually

spend at all.

Yes, deflation means prices come down.

And typically when you have recessions

you end up having deflation or at the

very least very strong disinflation

which is you know a very very slowed

significant slowdown in in the inflation

rate. I am of the mindset that and I've

said this very very consistently like

typically if you go through what I say

in my videos they're extremely

consistent. Yeah I know people are like

oh but but captain the tles that seem

like they change on a daily basis. Well,

you take it like have you ever looked at

a newspaper? Does that not change every

single day? But there's consistent

messaging. Uh this has been what it is

consistent. Uh and my belief is that by

2032, and you could write this down.

It's a prediction we made in 2022. Uh we

will have interest rates that are lower

than they were before COVID and we'll

probably be in the face of negative

interest rates. That's the trajectory

we're going into. That's why we're

plowing so much money into house hack

and real estate. you know, I I've got

many millions of dollars in house hack

and uh it's because I think when we get

to like negative rates by 2032, the

people who own the assets, you're going

to be sitting on Golden Thrones, you

know. Anyway, uh not that that matters.

I personally don't really care about

Golden Thrones.

Care about providing talent. That's why

here we are in the middle of the night

recording. So, uh okay. So, Wall has got

balls. I like this guy. I actually think

this guy's a serious economist. He's got

an education

and he's willing to use his economic

perspective and data to actually provide

leading support for what the Federal

Reserve should be doing. And for him,

that's looking at things like, just as

an example, he called it out himself,

weekly ADP payrolls data to preview the

weakness that is coming. He's been

shouting it from a cliff, you know, to

whomever will listen for weeks now. And

sure enough, the jobs data was weak. He

was right. He saw it coming and he's

been calling for this. So, good on him

for essentially transparently providing

his insights and saying, "Look, this

means we need to loosen monetary policy.

We probably need to get down 150 basis

points at least." So, he's a guy absent

recession that's going to get us to 3%

interest rates

in recession. He's also a guy that's

going to get us to zero, the effective

lower bound, the ELB. We will get there

very, very quickly under him, which is

good. He's also a guy who's going to be

willing to use the money printer, which

is also going to be critical for getting

us out of the recession. I understand

this frustrates people. Yes, the Fed

using the money printer, but you will be

very grateful that the Fed is running

the money printer when there's blood in

the streets.

Okay, then next we've got uh Mr. Walsh.

Okay, this guy, I don't like him as much

as Waller. My favorite out of this list

of candidates is Waller by far. So,

we're going to put a green on Chris

Waller. Uh, and then we'll have yellow

on WS. WH is not the biggest fan of the

money printer. He's a Fed guy, but in

'08, he was very fussy about using the

money printer. He doesn't like it. He

doesn't like enabling deficit spending

and he'd kind of rather let the

capitalistic economic cycle flow, which

I'm telling you is very painful. Now, to

deficit hawks, you know, people are

like, "No, good man. Let let the let it

flush out, baby. Let it be better. Let

it rip rip the bandage of debt off." All

right, this will be your guy. But now

what I want you to think of is between

the two things I just described, who do

you think is more likely from a Trump

point of view? Somebody who's going to,

you know, tell you, "No, Mr. Trump, I'm

not I'm not going to let you borrow that

much money." Or somebody who's going to

go like Waller and go, "We need to we're

going to have to stimulate.

We're going to need to print." You know,

Waller was a stimulate transitory guy.

Okay? So, understand for the next crisis

and Donald Trump, like him or not. Okay,

I poop on him, but I give him credit

where credit is due.