GOLD: The Only Way to Fix a Broken System I Mark Skousen
Summary
Market Outlook: Guest sees slowing business investment (via gross output) and a softening labor market, implying rising recession risk despite resilient consumer spending.
Inflation & Policy: Persistent inflation pressures tied to tariffs on inputs and rising interest costs on U.S. debt, with concerns about data quality and government shutdown-induced data gaps.
AI: Long-term positive productivity impact and strategic leverage in defense and geopolitics, with caution about near-term "AI washing" of layoffs; U.S. still dominates key chips and compute.
Uranium: Bullish on uranium stocks as nuclear power reaccelerates; fundamentals viewed stronger than gold/silver in the current environment, supported by pro-nuclear policy momentum.
Healthcare Rotation: Biotech and big pharma have lagged the tech-led rally, creating potential opportunity while waiting for broader market stabilization.
Ticker Highlight: Main Street Capital (MAIN) is a recommended BDC, financing small private companies; despite a recent pullback, it’s viewed as best-in-class in the space amid private credit concerns.
Risk Management: Tech valuations vulnerable to sharp drawdowns; guest remains invested but uses stops, emphasizing cash-rich corporates and selective sector tilts to navigate volatility.
Transcript
Special coverage from the New Orleans Investment Conference is brought to you by First Majestic Silver Corp. There's no substitute for silver. Hello and welcome back to Soore Financially here from the floor of the New Orleans Investment Conference. My name is Kai Hoffen. I'm the JR Mining Guy over on X and of course your host of this channel. And I'm being joined today by none other than Mark Scozin. He's America's economist. He's also the founder of Freedomfest. He's a accomplished author as you can tell right here with his book, but he's also a university professor at Chapman University down in California. And I'm really excited to have him on. We never had the chance to speak. Mark, uh, it's the first time we're meeting as well. So, I'm really excited to have this conversation today. >> Guy, nice to meet you. I I've been to Germany. I've been to 81 countries. And, uh, German is hard to learn. There are so many dialects and so many different, uh, it's almost as bad as English. >> Yeah. We don't make it easy, right? We have like it feels like 10 different words. >> You have your verb at the end and all of that stuff. >> Very different. Like it actually messes me up speaking German at these conferences really cuz like I'm thinking in English and then somebody speaks to me in German. It completely throws me off despite being German. It's my mother language. Completely throws me off. >> So no, really appreciate you have being here. >> We got to talk real talk. It's time for some real talk. We need to talk about the economy uh in the US. I'm curious what your assessment is initially. What's the assessment of the economy and the financial markets from your point of view, Mark? >> So, I try to break down the economy because I don't think you can just say, oh, GDP, it's going up 3.9% or 8%. So, that's really good. The only thing that's uh going up is consumer spending. And I don't know how long that's going to last. Uh b business spending has been mortant. Uh it's been growing at a much slower rate than consumer spending. It's still going up, but barely. And in the in the last quarter that we have of B2B spending, it went down 5.9% in real terms. So that concerns me. Now that may be due to the tariffs because what you had with the tariffs is a lot of buildup of inventory in the first part of this year due to the Trump tariffs and now they're being uh reduced if you will or used up or spent. So uh that may be uh influencing the decline in uh business spending but it's business spending not consumer spending that drives the economy. This is an a concept that I have emphasized over and over again as an economist. Uh the economics economics is often focused on GDP which is final goods the value of final goods only. So it leaves out the supply chain which is all B2B spending. So the supply chain is bigger than GDP itself. So if you add it together, it's called gross output. It's a government statistic, but it's kind of buried in the data. Nobody talks about it. You may have never heard of >> No, you're actually one of the first guests bring up. Yeah. >> Yeah. Go. And go again is is not growing like GDP. So that suggests a slowdown or recession. This is why the Fed is cutting rates. I mean, look at the labor market. The labor market is really slowed down. Um, my my senior students are not getting uh uh job offers like they used to. So, this is a real problem and it suggested maybe the stock market kind of topping out and and having a correction here is an indication uh that things aren't as rosy as the GDP statistic indicates. >> Yeah. Know, you bring up a lot of interesting points that other guests haven't really mentioned. GI Joe is one of them. Um we we have to talk about that the underlying statistics here, the employment statistics, AI statistics. Um where it's the AI that's driving unemployment right now apparently. But uh I I picked up an interesting term watching CNBC this morning. Uh yeah, AI washing >> meaning AI using AI as an excuse for layoffs and efficiency increases and things, but they wanted to lay off the people anyway. >> Um do you have a theory on that? an element of that, but there's also the federal government under Trump, they are cutting uh the labor force there. Uh so they're that's a new they have to look for jobs and so forth. Um so yeah, that's an indication of uh recession or a movement toward recession and uh it's very real and AI is uh actually increasing productivity. But it may also mean, hey, let's hold let's hold off hiring people because maybe we don't need to hire people because we have machines that would do what m what people used to do. Now, in the long run, that's always been positive. Uh I'm not a lite uh and and anyone who is a lite uh is missing the boat because year every time a revolution occurs uh I mean the horse and buggy that was a very big business and it virtually disappeared because of the automobile. Did the economy d was it destroyed because of that? No not at all. So we need to be uh optimists uh need to have faith in the capitalist system that it will write itself. >> Yeah. You you a little theory that I have um or not no not a theory but idea I had to develop during one of the interviews was that President Trump was recently traveling to Asia doing a lot of trade deals, tariff deals. But one thought that struck me was that he's using AI and tech supremacy to sort of secure America's status on the on the planet. It used to be military might before. I'm feeling he's using AI and tech supremacy to a degree to rein to reinstate that to a degree and maybe cement the the position of the US dollar as well. I'm curious if you have any thoughts on that if that AI is being militarized but in a different sense. >> Well, it certainly is. I mean people the the contracts Palanteer is a perfect example where they are having all these contracts with the with the military. Uh so AI is playing a major role there. No, I don't mean like AI as a military weapon as a like let's physical or so, but using AI and access to AI like computing chips and graphic chips as sort of as a strangle hold on partners, right? Using that >> and the US still dominates that field. I don't know for how long. >> Uh and so yeah, I think it is a bargaining chip that would be very helpful. But, you know, to build these chips and stuff like that, you still have to have these rare earths and China controls the rare earths at least temporarily. We're trying to expand that in the US and and with our allies. Uh, but they both have balance bargaining chips. So, President Xi is not an easy negotiator and Trump I think Trump is a little frustrated by the whole thing that he's met his match with President Xi and uh probably not too many other people. But the Chinese feel like they they hold all the cards. >> But it seems like they're having fun together because they seemingly respect each other because the conversation seem to be going well. >> Um >> but it's enter like they found >> depends on the topic that you bring up. You want to bring in human rights violations or the suppression of religion in China, you're not going to you're not going to get along. Believe me, there's there's a lot of restrictions. I mean, I won't go to China. I won't go to Hong Kong uh at this point because I don't want to give them valid I don't want to validate what they're doing. >> No, fair fair enough. Makes a lot of sense. Um coming back like you're one of the first guests here the last two days actually using the R word recession. >> Um it has been widely ignored and it has disappeared from uh mainstream media again. Um let let's revisit that topic. What what does a recession mean for you? We we all know the textbook definition. >> Yeah. Two two quarters in a row of declining GDP. Uh again I I look at business spending is the biggest sector of the economy at 60% of gross output GO because that measures spending at all stages of production and that is slowed down. It's not actually uh a recession yet. But there's all these indicators of the labor market and and uh and so forth. Plus you have you have the in how do you measure inflation? Uh does the CPI really work? Uh or the GDP deflator? I'm not sure. It's pretty that particularly accurate. I mean, the CPI says that beef prices increased 10% in the last year. Really? I mean, have you ever been to the grocery store? Uh, ground beef, uh, steaks are double the price they were a year ago. So, I don't know where they get their some of their statistics. And that's the basis of deciding because we live a permanent inflation. Since World War II, inflation is permanent. Every year it goes up. may not go up by much but it still goes up every year and this has been a universal system so we went off the gold standard so we lack that discipline uh which I think is very serious there's another thing that uh needs to be raised and that is interest rates uh the interest payments on the national debt are growing faster than the debt itself and that's because interest rates have been going up at least recently so uh that that's a key factor that might led lead to a crisis and another uh another ex cause of recession and pulling back the lockdown itself is pulling back consumer spending and uh you know if you don't have the food stamp program and all of these welfare systems and stuff stuff like that that's that's going to cause a temporary recession as well. So I think that's a very real possibility. But I will say the American economy has been more resil resilient and I think it's due to the technology and the advancing technology and the excitement about that and the spending and the investment in data centers and things like that. It's all very bullish. So that's it's we we we don't have a severe recession type of situation. We don't have a financial crisis like we had in uh 2008 and 20 2020. So, we could go in that direction, but we we don't see it yet. >> I'm still fully invested, as a matter of fact. So, I'm not uh but I have my stop orders in place and we're in a pullback and we'll see how far that goes. >> Yeah. No, when it comes when it comes to that, we need to talk about S&P 500 at record highs. The economy and the markets are completely disconnected. It seems the underlying economy is doing very different things than what the market sort of tells us. Although earnings seem to be doing okay. Palanteer came out with with earnings today although it got punished afterwards. I haven't had a chance to dive deep into the numbers but the stock was down 8%. Uh I think the market is quite nervous right now as well. Is the market ready for a pullback? >> Yeah I mean I often have said that technology stocks can fall in half and still be overvalued. Uh so I mean the high PE ratios and so forth and and when you've had recessions uh technology stocks do u uh plunge uh the stock market takes the stairs up and the elevator down. That's a quote from the maximums of Wall Street. >> Here we go. >> Yeah. >> Um you just touched on the government shutdown as well. Um from an econom economist point of view like what's the impact? What should we be expecting? It's now a record shutdown because as far as I know we haven't reached an agreement today. So it is a new record apparently as of tomorrow from an econ economist point of view like what what are the implications? >> So funny I saw a headline in the New York Times federal government shuts down. So I sent it to all my anarchist friends who said oh my gosh this is the headline they've been looking for their entire lives. No more government. U but uh I do think it's healthy to go through this. uh it demonstrates it forces uh both the Republicans and Democrats to work together. Uh you go back in history and uh government uh opposition parties did work together. Uh the most two influential um senators of the LA since World War II were Senator Orin Hatch of the Republican and uh Ted Kennedy of the Democrats. They pass more legislation than any other and they work together on a regular basis to get things done and there's something to be said for that. But in today's world, I mean, Supreme Court justices have to be approved like 51 to 49 when they used to be approved at 90 to 10 and that sort of thing. It's really a sad commentary where people are judged by the party rather than their principles and their positions and the policies that they practice. So uh the divisiveness in uh America and around the world is is being u in encouraged by the divisive language, the labeling, the constant left right and there really is no left or right. There's just good policies or bad policies. Why can't we look at it that way? Why do we have to label people? So I don't I avoid that as much as I can. Uh at my FreedomFest conference, I encourage people to talk about best solutions, not who is right, but what is right. Goes through one ear and out the other. Then they're suddenly attacking each other. I'm good friends with the publisher of The Economist. They use left right constantly. And I said, you know, let's it's time to stop and just say, hey, what's a good pol why is this guy far left? Why is there a German? I don't know which of the party it is, but they're always called far-left. Well, are they really far-left? What does that mean? It's just a smear tactic >> to say, "Oh, you you shouldn't vote for them because they're extremists." >> Well, what how are they extreme? >> Yeah, we we do this all the time. >> Um we're we're missing data, of course, um because of the government shutdown. How important is that? The the the Fed just said last week, we're driving in fog. >> Well, I say, well, get some headlights. Um you know, get get some guidance and you can figure this out. But how important is the lack of data um moving forward here? Maybe until the end of the year. >> Well, maybe it'll be refreshing. I mean, I'm good friends with the Bureau of Economic Analysis because they do the GEO statistic as well as GDP and they use the consumer price index and all of these kinds of things. Bureau of Labor Statistics. The CPI is required to for social security payments as to what that will be and so on. But there are private um markets that continue to do measurements and corporate profits are still being reported and that is a leading indicator. Uh the conference board is a nonprofit organization that puts out the 10 leading indicators and those are all uh private statistics. So the data is there in my opinion. I don't think the Fed can use that as an excuse but I will find something interesting. So the Atlanta Fed, which is famous for predicting the next quarter's uh GDP, so for the third quarter, they're predicting like close to 4%. But the St. Louis Fed, also another regional Federal Reserve Board Bank, uh they put out their own statistic and they say GDP is going to go up 0.6%. I mean, that's a huge a huge difference. So it'll be interesting to see what actually comes out in the data. You're probably right. We're going to get that delayed because of the layoffs and stuff. But I'll tell you, the layoffs on the airlines in particular are a serious problem because more and more uh planes are are being delayed for hours. People and TSA has these three-hour to go through the TSA. >> Don't get me started. My trip here, >> was it really bad? >> Yeah, I came through Houston. That made national headlines. >> Oh my gosh. So, how long were you in line? Uh only only 2 hours. >> Oh, >> only >> Yeah. >> And it had a shorter line, but the other terminals apparently was 4 to 5 hours. >> Oh my gosh. >> It was awful. >> Yeah. And then delays coming in because of lack of uh this of all things should say a wakeup call to Democrats and Republicans together say, "Hey, it's time to move on and and you you know, you you resolve it and then you deal with these other issues." >> I want to come back to something you said earlier. government consumer is still spending. Yeah. >> Um how is the consumer financing it? Like wage growth is >> minimal in comparison to CPI meaning 5% versus maybe 8%. Um how are they financing it? >> Well, I think that's where the difficulty is because uh credit card use can extend it for a period of time but at some point you have to pull back or you declare bankruptcy. So, uh, that's why I think there are more more and more indications that the resilience of the American economy is reaching its limits and so there's there's really nowhere to go because it's only the consumer that's increasing. Business spending is is is much more conservative in their approach. Now, I will say that business has one thing going for it. All the major corporations have huge cash positions. I like Warren Buffett has $300 billion in cash. He's recognized that we're near a top at some point. Maybe we've already reached it. And if you look at Microsoft, if you look at Apple, if you look at Amazon and see how much cash they had, they learned this from the 2008 financial crisis because companies that had retained earnings and maintained the cash, they survived. And all the major corporations have have found that. So maybe that's part of the resilience and why we can bounce back and do as well as we can. I want to quickly touch on the subprime crisis like the auto lenders are starting to falter uh a $ 1.7 trillion market. How closely are you following that space? >> The private credit markets. Yeah. Yeah. It's uh it's a possible problem because one of my recommended stocks in my newsletter is Main Street Capital, which is a business development company, and they do uh uh e equity and and debt financing with small companies that are not publicly traded. And so they have over a 100 companies and so on and they're considered the the best of the business development companies. Uh but even that stock dropped uh 10% in uh in a month um fearful but it isn't because it's the best of the best in today's market. It didn't go down at all >> which is pretty good. You know I had Goldman Sachs went up today. I mean it's just pretty amazing. So some of my stocks actually did pretty good. Anen did went up. >> Interesting. >> Yeah. The biotech that's an area that's been has not participated in this tech boom >> is the biotech and the drug companies uh >> some of them have but uh many of them haven't. The big pharma companies have really struggled and so maybe that's where to put your money while you're waiting for the markets to recover. >> I was going to say like where else do you see opportunity? Like what sectors are of interest? What niches should we be looking at? >> Well, I do think um uh Robert Prector talked today about how gold seemed to have topped out and we may may have a period of time where there's really uh not much going on in gold and silver, but uranium does look like it could continue to grow. Uh I mean, they fell just like everything else, but uh I like uranium stocks. It just seems like nuclear power is back in action because of the Trump administration. $80 billion deal between the department of war I think the fundamentals yeah the fundamentals look strong there much more than gold and silver although silver is involved with the the data centers and stuff like that so that that may help hold up as well so there are some commodities out there um I I do think that financials uh other than you know the problem that private credit market does concern me and to the extent that the big banks s are involved in that that could be a problem but uh they never really rose so financial stocks could be an area that that could survive or or there's an old quote from Dick Russell uh who the Dow theory letters for many years and he says in a bare market the winner is he who loses the least >> flat is the new up. >> Yeah. Yeah. I could use that. Maybe I'll quote you. >> Just make sure Kai Hoffman or financial. >> Yes. Yes. Good idea. Mark, one last topic I quickly want to touch on. We haven't really drilled on it. It's just inflation. Um, we we touched on tariffs and things like that, but where do you see inflation going? It's been trending up for the last six, seven months here. >> Yeah. Despite the Fed had a tight money policy after a very loose monetary policy. So, you have a tighten policy, but it hasn't really kicked in. And one of the reasons is the tariffs because Trump has made the mistake in my opinion of imposing tariffs on import on uh inputs, okay, in the supply chain. So you you put on a 50% tariff on steel and aluminum. Well, that's not a consumer good. That's not a finished car. >> That's what you use to build the car. And construction and manufacturing needs steel and aluminum and so forth. So you've raised the cost of production and they're going to try to pass that along. They may not be able to do as well, but you're still going to have an upward pressure on prices. So I think this is why we have a stagflation type of environment right now. And then you know the president is simply ignoring the data when he says that that food prices have declined and declined a lot. He says, "Well, come on. Have you been to a grocery store? I mean, beef prices have doubled in the last year. >> Yeah. No, you >> I don't know about Germany and Europe and so on, but I think the cost of uh food and rent and everything is still going up. >> Absolutely. >> We've entered an era I I do something with my students. I show them a chart since 1776 of inflation in the United States that's measured by the CPI. And it goes up and down, up and down, up and down. Pretty stable overall. The only reason it goes up is war. and and after the war it goes back down. But after World War II, it kept going up. And I say I give you five reasons for it. Okay? Number one, maybe we have an industrial military-industrial complex and never ending wars. That could be a possibility. Number two, the creation of the Federal Reserve is an engine of inflation. Number three is going off the gold standard. Number four is adopting Keynesian economics, which is constantly running deficits. And that's okay according to the Keynesians. And finally, the Brettton Woods agreement that made the dollar a fiat currency the world's currency. Which of the five is the most important? And the answer is all of the above. >> All of the above. >> E. >> Yeah. All of the above. >> Fantastic. >> It's a fun exercise with my students. They love it. >> Probably. It's hourlong discussions. >> Yeah. It's a whole class. >> Yeah. No. Fantastic. No. >> So inflation is not going away. >> You host online classes as well. Can we dial in and watch? >> No. No. is uh Chapman would require you to pay a lot of money to be part of the classroom environment, but it we do have a a zoom. I mean it for students who are ill or something like that, they can watch it on Zoom and I suppose for occasionally uh somebody can Yeah. Yeah. We'll let you listen in to one class, but you can't take the entire class without being a student. >> Yeah, fair enough. A little taster here and there, but uh not much else. So really >> I mean everybody does podcasts and you you do these things and stuff like that. I'd rather be interviewed than doing than doing all the interviewing. That's a lot of work. >> Tell me about it together. >> And especially like so much going on right now. It's really difficult to even pinpoint a topic because they're all a interconnected but there's so much we haven't even talked to the US dollar yet and the role of the dollar moving forward. >> The dollar has been declining. >> Exactly. >> And that's why gold and silver one of the reasons going up. By the way, we haven't mentioned Argentina, which I think is is a hopeful environment. When Malay won that uh that midterm election, that was a major breakthrough for him. He I think he lives nine lives. He's doing a lot better than I thought. >> Yeah, absolutely. It was good cuz mining companies are involved in Argentina. We're all cheering it on and we love seeing the reform. So, >> it's fantastic. Mark, what a great pleasure having you on the program. We'll need to do this again virtually, maybe early next year. catch up, see uh what whether anything's changed, >> right? And appreciate your time. Where can we send our audience to follow more of your work. >> So markscowzin.com is my website and freedomfest.com is where we have our annual conference. So uh we call it the World's Fair of Liberty and we hope people from all over the world will come to Las Vegas July 8th through the 11th uh to the Caesar's Forum Convention Center. It's going to be very exciting. >> Nice. Amazing. Fantastic. Thanks so much for joining us. All right, >> looking forward to the next one. And everybody else, thanks so much for tuning in. I hope you joined this enjoyed this conversation here with Mark Scousen. I tremendously have. Always love chatting with people first in person then virtually. It's always much better. Much better. And if you enjoyed this as well, please hit that like and subscribe button. That way we can bring Mark back if we get the positive feedback that I'm expecting we'll get. And uh hit that subscribe button as well. Helps us out tremendously and we much much appreciate it. Thanks so much for tuning in. Take care out there.
GOLD: The Only Way to Fix a Broken System I Mark Skousen
Summary
Transcript
Special coverage from the New Orleans Investment Conference is brought to you by First Majestic Silver Corp. There's no substitute for silver. Hello and welcome back to Soore Financially here from the floor of the New Orleans Investment Conference. My name is Kai Hoffen. I'm the JR Mining Guy over on X and of course your host of this channel. And I'm being joined today by none other than Mark Scozin. He's America's economist. He's also the founder of Freedomfest. He's a accomplished author as you can tell right here with his book, but he's also a university professor at Chapman University down in California. And I'm really excited to have him on. We never had the chance to speak. Mark, uh, it's the first time we're meeting as well. So, I'm really excited to have this conversation today. >> Guy, nice to meet you. I I've been to Germany. I've been to 81 countries. And, uh, German is hard to learn. There are so many dialects and so many different, uh, it's almost as bad as English. >> Yeah. We don't make it easy, right? We have like it feels like 10 different words. >> You have your verb at the end and all of that stuff. >> Very different. Like it actually messes me up speaking German at these conferences really cuz like I'm thinking in English and then somebody speaks to me in German. It completely throws me off despite being German. It's my mother language. Completely throws me off. >> So no, really appreciate you have being here. >> We got to talk real talk. It's time for some real talk. We need to talk about the economy uh in the US. I'm curious what your assessment is initially. What's the assessment of the economy and the financial markets from your point of view, Mark? >> So, I try to break down the economy because I don't think you can just say, oh, GDP, it's going up 3.9% or 8%. So, that's really good. The only thing that's uh going up is consumer spending. And I don't know how long that's going to last. Uh b business spending has been mortant. Uh it's been growing at a much slower rate than consumer spending. It's still going up, but barely. And in the in the last quarter that we have of B2B spending, it went down 5.9% in real terms. So that concerns me. Now that may be due to the tariffs because what you had with the tariffs is a lot of buildup of inventory in the first part of this year due to the Trump tariffs and now they're being uh reduced if you will or used up or spent. So uh that may be uh influencing the decline in uh business spending but it's business spending not consumer spending that drives the economy. This is an a concept that I have emphasized over and over again as an economist. Uh the economics economics is often focused on GDP which is final goods the value of final goods only. So it leaves out the supply chain which is all B2B spending. So the supply chain is bigger than GDP itself. So if you add it together, it's called gross output. It's a government statistic, but it's kind of buried in the data. Nobody talks about it. You may have never heard of >> No, you're actually one of the first guests bring up. Yeah. >> Yeah. Go. And go again is is not growing like GDP. So that suggests a slowdown or recession. This is why the Fed is cutting rates. I mean, look at the labor market. The labor market is really slowed down. Um, my my senior students are not getting uh uh job offers like they used to. So, this is a real problem and it suggested maybe the stock market kind of topping out and and having a correction here is an indication uh that things aren't as rosy as the GDP statistic indicates. >> Yeah. Know, you bring up a lot of interesting points that other guests haven't really mentioned. GI Joe is one of them. Um we we have to talk about that the underlying statistics here, the employment statistics, AI statistics. Um where it's the AI that's driving unemployment right now apparently. But uh I I picked up an interesting term watching CNBC this morning. Uh yeah, AI washing >> meaning AI using AI as an excuse for layoffs and efficiency increases and things, but they wanted to lay off the people anyway. >> Um do you have a theory on that? an element of that, but there's also the federal government under Trump, they are cutting uh the labor force there. Uh so they're that's a new they have to look for jobs and so forth. Um so yeah, that's an indication of uh recession or a movement toward recession and uh it's very real and AI is uh actually increasing productivity. But it may also mean, hey, let's hold let's hold off hiring people because maybe we don't need to hire people because we have machines that would do what m what people used to do. Now, in the long run, that's always been positive. Uh I'm not a lite uh and and anyone who is a lite uh is missing the boat because year every time a revolution occurs uh I mean the horse and buggy that was a very big business and it virtually disappeared because of the automobile. Did the economy d was it destroyed because of that? No not at all. So we need to be uh optimists uh need to have faith in the capitalist system that it will write itself. >> Yeah. You you a little theory that I have um or not no not a theory but idea I had to develop during one of the interviews was that President Trump was recently traveling to Asia doing a lot of trade deals, tariff deals. But one thought that struck me was that he's using AI and tech supremacy to sort of secure America's status on the on the planet. It used to be military might before. I'm feeling he's using AI and tech supremacy to a degree to rein to reinstate that to a degree and maybe cement the the position of the US dollar as well. I'm curious if you have any thoughts on that if that AI is being militarized but in a different sense. >> Well, it certainly is. I mean people the the contracts Palanteer is a perfect example where they are having all these contracts with the with the military. Uh so AI is playing a major role there. No, I don't mean like AI as a military weapon as a like let's physical or so, but using AI and access to AI like computing chips and graphic chips as sort of as a strangle hold on partners, right? Using that >> and the US still dominates that field. I don't know for how long. >> Uh and so yeah, I think it is a bargaining chip that would be very helpful. But, you know, to build these chips and stuff like that, you still have to have these rare earths and China controls the rare earths at least temporarily. We're trying to expand that in the US and and with our allies. Uh, but they both have balance bargaining chips. So, President Xi is not an easy negotiator and Trump I think Trump is a little frustrated by the whole thing that he's met his match with President Xi and uh probably not too many other people. But the Chinese feel like they they hold all the cards. >> But it seems like they're having fun together because they seemingly respect each other because the conversation seem to be going well. >> Um >> but it's enter like they found >> depends on the topic that you bring up. You want to bring in human rights violations or the suppression of religion in China, you're not going to you're not going to get along. Believe me, there's there's a lot of restrictions. I mean, I won't go to China. I won't go to Hong Kong uh at this point because I don't want to give them valid I don't want to validate what they're doing. >> No, fair fair enough. Makes a lot of sense. Um coming back like you're one of the first guests here the last two days actually using the R word recession. >> Um it has been widely ignored and it has disappeared from uh mainstream media again. Um let let's revisit that topic. What what does a recession mean for you? We we all know the textbook definition. >> Yeah. Two two quarters in a row of declining GDP. Uh again I I look at business spending is the biggest sector of the economy at 60% of gross output GO because that measures spending at all stages of production and that is slowed down. It's not actually uh a recession yet. But there's all these indicators of the labor market and and uh and so forth. Plus you have you have the in how do you measure inflation? Uh does the CPI really work? Uh or the GDP deflator? I'm not sure. It's pretty that particularly accurate. I mean, the CPI says that beef prices increased 10% in the last year. Really? I mean, have you ever been to the grocery store? Uh, ground beef, uh, steaks are double the price they were a year ago. So, I don't know where they get their some of their statistics. And that's the basis of deciding because we live a permanent inflation. Since World War II, inflation is permanent. Every year it goes up. may not go up by much but it still goes up every year and this has been a universal system so we went off the gold standard so we lack that discipline uh which I think is very serious there's another thing that uh needs to be raised and that is interest rates uh the interest payments on the national debt are growing faster than the debt itself and that's because interest rates have been going up at least recently so uh that that's a key factor that might led lead to a crisis and another uh another ex cause of recession and pulling back the lockdown itself is pulling back consumer spending and uh you know if you don't have the food stamp program and all of these welfare systems and stuff stuff like that that's that's going to cause a temporary recession as well. So I think that's a very real possibility. But I will say the American economy has been more resil resilient and I think it's due to the technology and the advancing technology and the excitement about that and the spending and the investment in data centers and things like that. It's all very bullish. So that's it's we we we don't have a severe recession type of situation. We don't have a financial crisis like we had in uh 2008 and 20 2020. So, we could go in that direction, but we we don't see it yet. >> I'm still fully invested, as a matter of fact. So, I'm not uh but I have my stop orders in place and we're in a pullback and we'll see how far that goes. >> Yeah. No, when it comes when it comes to that, we need to talk about S&P 500 at record highs. The economy and the markets are completely disconnected. It seems the underlying economy is doing very different things than what the market sort of tells us. Although earnings seem to be doing okay. Palanteer came out with with earnings today although it got punished afterwards. I haven't had a chance to dive deep into the numbers but the stock was down 8%. Uh I think the market is quite nervous right now as well. Is the market ready for a pullback? >> Yeah I mean I often have said that technology stocks can fall in half and still be overvalued. Uh so I mean the high PE ratios and so forth and and when you've had recessions uh technology stocks do u uh plunge uh the stock market takes the stairs up and the elevator down. That's a quote from the maximums of Wall Street. >> Here we go. >> Yeah. >> Um you just touched on the government shutdown as well. Um from an econom economist point of view like what's the impact? What should we be expecting? It's now a record shutdown because as far as I know we haven't reached an agreement today. So it is a new record apparently as of tomorrow from an econ economist point of view like what what are the implications? >> So funny I saw a headline in the New York Times federal government shuts down. So I sent it to all my anarchist friends who said oh my gosh this is the headline they've been looking for their entire lives. No more government. U but uh I do think it's healthy to go through this. uh it demonstrates it forces uh both the Republicans and Democrats to work together. Uh you go back in history and uh government uh opposition parties did work together. Uh the most two influential um senators of the LA since World War II were Senator Orin Hatch of the Republican and uh Ted Kennedy of the Democrats. They pass more legislation than any other and they work together on a regular basis to get things done and there's something to be said for that. But in today's world, I mean, Supreme Court justices have to be approved like 51 to 49 when they used to be approved at 90 to 10 and that sort of thing. It's really a sad commentary where people are judged by the party rather than their principles and their positions and the policies that they practice. So uh the divisiveness in uh America and around the world is is being u in encouraged by the divisive language, the labeling, the constant left right and there really is no left or right. There's just good policies or bad policies. Why can't we look at it that way? Why do we have to label people? So I don't I avoid that as much as I can. Uh at my FreedomFest conference, I encourage people to talk about best solutions, not who is right, but what is right. Goes through one ear and out the other. Then they're suddenly attacking each other. I'm good friends with the publisher of The Economist. They use left right constantly. And I said, you know, let's it's time to stop and just say, hey, what's a good pol why is this guy far left? Why is there a German? I don't know which of the party it is, but they're always called far-left. Well, are they really far-left? What does that mean? It's just a smear tactic >> to say, "Oh, you you shouldn't vote for them because they're extremists." >> Well, what how are they extreme? >> Yeah, we we do this all the time. >> Um we're we're missing data, of course, um because of the government shutdown. How important is that? The the the Fed just said last week, we're driving in fog. >> Well, I say, well, get some headlights. Um you know, get get some guidance and you can figure this out. But how important is the lack of data um moving forward here? Maybe until the end of the year. >> Well, maybe it'll be refreshing. I mean, I'm good friends with the Bureau of Economic Analysis because they do the GEO statistic as well as GDP and they use the consumer price index and all of these kinds of things. Bureau of Labor Statistics. The CPI is required to for social security payments as to what that will be and so on. But there are private um markets that continue to do measurements and corporate profits are still being reported and that is a leading indicator. Uh the conference board is a nonprofit organization that puts out the 10 leading indicators and those are all uh private statistics. So the data is there in my opinion. I don't think the Fed can use that as an excuse but I will find something interesting. So the Atlanta Fed, which is famous for predicting the next quarter's uh GDP, so for the third quarter, they're predicting like close to 4%. But the St. Louis Fed, also another regional Federal Reserve Board Bank, uh they put out their own statistic and they say GDP is going to go up 0.6%. I mean, that's a huge a huge difference. So it'll be interesting to see what actually comes out in the data. You're probably right. We're going to get that delayed because of the layoffs and stuff. But I'll tell you, the layoffs on the airlines in particular are a serious problem because more and more uh planes are are being delayed for hours. People and TSA has these three-hour to go through the TSA. >> Don't get me started. My trip here, >> was it really bad? >> Yeah, I came through Houston. That made national headlines. >> Oh my gosh. So, how long were you in line? Uh only only 2 hours. >> Oh, >> only >> Yeah. >> And it had a shorter line, but the other terminals apparently was 4 to 5 hours. >> Oh my gosh. >> It was awful. >> Yeah. And then delays coming in because of lack of uh this of all things should say a wakeup call to Democrats and Republicans together say, "Hey, it's time to move on and and you you know, you you resolve it and then you deal with these other issues." >> I want to come back to something you said earlier. government consumer is still spending. Yeah. >> Um how is the consumer financing it? Like wage growth is >> minimal in comparison to CPI meaning 5% versus maybe 8%. Um how are they financing it? >> Well, I think that's where the difficulty is because uh credit card use can extend it for a period of time but at some point you have to pull back or you declare bankruptcy. So, uh, that's why I think there are more more and more indications that the resilience of the American economy is reaching its limits and so there's there's really nowhere to go because it's only the consumer that's increasing. Business spending is is is much more conservative in their approach. Now, I will say that business has one thing going for it. All the major corporations have huge cash positions. I like Warren Buffett has $300 billion in cash. He's recognized that we're near a top at some point. Maybe we've already reached it. And if you look at Microsoft, if you look at Apple, if you look at Amazon and see how much cash they had, they learned this from the 2008 financial crisis because companies that had retained earnings and maintained the cash, they survived. And all the major corporations have have found that. So maybe that's part of the resilience and why we can bounce back and do as well as we can. I want to quickly touch on the subprime crisis like the auto lenders are starting to falter uh a $ 1.7 trillion market. How closely are you following that space? >> The private credit markets. Yeah. Yeah. It's uh it's a possible problem because one of my recommended stocks in my newsletter is Main Street Capital, which is a business development company, and they do uh uh e equity and and debt financing with small companies that are not publicly traded. And so they have over a 100 companies and so on and they're considered the the best of the business development companies. Uh but even that stock dropped uh 10% in uh in a month um fearful but it isn't because it's the best of the best in today's market. It didn't go down at all >> which is pretty good. You know I had Goldman Sachs went up today. I mean it's just pretty amazing. So some of my stocks actually did pretty good. Anen did went up. >> Interesting. >> Yeah. The biotech that's an area that's been has not participated in this tech boom >> is the biotech and the drug companies uh >> some of them have but uh many of them haven't. The big pharma companies have really struggled and so maybe that's where to put your money while you're waiting for the markets to recover. >> I was going to say like where else do you see opportunity? Like what sectors are of interest? What niches should we be looking at? >> Well, I do think um uh Robert Prector talked today about how gold seemed to have topped out and we may may have a period of time where there's really uh not much going on in gold and silver, but uranium does look like it could continue to grow. Uh I mean, they fell just like everything else, but uh I like uranium stocks. It just seems like nuclear power is back in action because of the Trump administration. $80 billion deal between the department of war I think the fundamentals yeah the fundamentals look strong there much more than gold and silver although silver is involved with the the data centers and stuff like that so that that may help hold up as well so there are some commodities out there um I I do think that financials uh other than you know the problem that private credit market does concern me and to the extent that the big banks s are involved in that that could be a problem but uh they never really rose so financial stocks could be an area that that could survive or or there's an old quote from Dick Russell uh who the Dow theory letters for many years and he says in a bare market the winner is he who loses the least >> flat is the new up. >> Yeah. Yeah. I could use that. Maybe I'll quote you. >> Just make sure Kai Hoffman or financial. >> Yes. Yes. Good idea. Mark, one last topic I quickly want to touch on. We haven't really drilled on it. It's just inflation. Um, we we touched on tariffs and things like that, but where do you see inflation going? It's been trending up for the last six, seven months here. >> Yeah. Despite the Fed had a tight money policy after a very loose monetary policy. So, you have a tighten policy, but it hasn't really kicked in. And one of the reasons is the tariffs because Trump has made the mistake in my opinion of imposing tariffs on import on uh inputs, okay, in the supply chain. So you you put on a 50% tariff on steel and aluminum. Well, that's not a consumer good. That's not a finished car. >> That's what you use to build the car. And construction and manufacturing needs steel and aluminum and so forth. So you've raised the cost of production and they're going to try to pass that along. They may not be able to do as well, but you're still going to have an upward pressure on prices. So I think this is why we have a stagflation type of environment right now. And then you know the president is simply ignoring the data when he says that that food prices have declined and declined a lot. He says, "Well, come on. Have you been to a grocery store? I mean, beef prices have doubled in the last year. >> Yeah. No, you >> I don't know about Germany and Europe and so on, but I think the cost of uh food and rent and everything is still going up. >> Absolutely. >> We've entered an era I I do something with my students. I show them a chart since 1776 of inflation in the United States that's measured by the CPI. And it goes up and down, up and down, up and down. Pretty stable overall. The only reason it goes up is war. and and after the war it goes back down. But after World War II, it kept going up. And I say I give you five reasons for it. Okay? Number one, maybe we have an industrial military-industrial complex and never ending wars. That could be a possibility. Number two, the creation of the Federal Reserve is an engine of inflation. Number three is going off the gold standard. Number four is adopting Keynesian economics, which is constantly running deficits. And that's okay according to the Keynesians. And finally, the Brettton Woods agreement that made the dollar a fiat currency the world's currency. Which of the five is the most important? And the answer is all of the above. >> All of the above. >> E. >> Yeah. All of the above. >> Fantastic. >> It's a fun exercise with my students. They love it. >> Probably. It's hourlong discussions. >> Yeah. It's a whole class. >> Yeah. No. Fantastic. No. >> So inflation is not going away. >> You host online classes as well. Can we dial in and watch? >> No. No. is uh Chapman would require you to pay a lot of money to be part of the classroom environment, but it we do have a a zoom. I mean it for students who are ill or something like that, they can watch it on Zoom and I suppose for occasionally uh somebody can Yeah. Yeah. We'll let you listen in to one class, but you can't take the entire class without being a student. >> Yeah, fair enough. A little taster here and there, but uh not much else. So really >> I mean everybody does podcasts and you you do these things and stuff like that. I'd rather be interviewed than doing than doing all the interviewing. That's a lot of work. >> Tell me about it together. >> And especially like so much going on right now. It's really difficult to even pinpoint a topic because they're all a interconnected but there's so much we haven't even talked to the US dollar yet and the role of the dollar moving forward. >> The dollar has been declining. >> Exactly. >> And that's why gold and silver one of the reasons going up. By the way, we haven't mentioned Argentina, which I think is is a hopeful environment. When Malay won that uh that midterm election, that was a major breakthrough for him. He I think he lives nine lives. He's doing a lot better than I thought. >> Yeah, absolutely. It was good cuz mining companies are involved in Argentina. We're all cheering it on and we love seeing the reform. So, >> it's fantastic. Mark, what a great pleasure having you on the program. We'll need to do this again virtually, maybe early next year. catch up, see uh what whether anything's changed, >> right? And appreciate your time. Where can we send our audience to follow more of your work. >> So markscowzin.com is my website and freedomfest.com is where we have our annual conference. So uh we call it the World's Fair of Liberty and we hope people from all over the world will come to Las Vegas July 8th through the 11th uh to the Caesar's Forum Convention Center. It's going to be very exciting. >> Nice. Amazing. Fantastic. Thanks so much for joining us. All right, >> looking forward to the next one. And everybody else, thanks so much for tuning in. I hope you joined this enjoyed this conversation here with Mark Scousen. I tremendously have. Always love chatting with people first in person then virtually. It's always much better. Much better. And if you enjoyed this as well, please hit that like and subscribe button. That way we can bring Mark back if we get the positive feedback that I'm expecting we'll get. And uh hit that subscribe button as well. Helps us out tremendously and we much much appreciate it. Thanks so much for tuning in. Take care out there.