War Doesn’t Stop the Casinofication of the American Economy
Summary
Fed Policy: Extensive discussion of the Federal Reserve’s balance sheet maneuvers, stealth liquidity via Treasury purchases, and the de facto shift toward tolerating higher inflation.
Inflation: CPI and PPI trends are rising, with producers squeezed and eventual pass-through to consumers expected, undermining real incomes and sentiment.
Oil Prices: The Iran conflict and potential Strait of Hormuz disruptions raise global oil prices, feeding through to gasoline and broad input costs.
Materials Impact: A looming fertilizer crunch and constrained plastics/chemicals supply threaten food production timelines and critical goods from medical supplies to construction.
Employment & Sentiment: Weak hires, soft household and establishment surveys, and record-low consumer sentiment signal deteriorating fundamentals despite market highs.
Market Disconnect: Equities’ resilience contrasts with negative revisions and macro risks, highlighting “casinoification” and potential mispricing of real-economy stress.
War Risk: Geopolitical escalation drives supply shocks beyond energy into core industrial inputs, complicating the Fed’s dual mandate and policy choices.
No Stock Picks: No specific tickers were advocated; focus centered on sector-level risks and macro themes across Energy and Materials.
Transcript
Welcome back to the Power Market podcast. I'm Ryan McMaken, editor-inchief at the Mises Institute. And joining me as usual are two of our contributing editors. We've got Tho Bishop and we have Connor O'Keefe. And this is your weekly current events podcast from the Mises Institute. Be sure and check us out if you want uh some of our more academic type content. That's at mises.org. m i ses.org. And we also have some events coming up. Uh right though, we've got uh a San Diego event coming up very soon and some other stuff too. Yeah. On April 25th, we've got that San Diego event. California's decline, a warning to America featuring Ryan and Connor both as well as uh Peter Klein, Bill Anderson, the great Ed Fuller um and Chris Cton, front of the show. So, it's going to be a great event if you're in the San Diego uh area. And if you're not, it will be soon off of our ad read lineup. So you can look forward to that. Rothbart University, if you've never been able to experience the Mises U, uh the the M6U experience, and this is a great opportunity, particularly for professionals to have a little taste of the best week of the year, that will be on May 14th. And one thing a little bit down the line I'm excited about in August is a ethics of liberty seminar, which will be in Auburn, Alabama, but that will also be converted into a Mises Academy course. And if you not checked out the Mises Academy course, you can find it at the top tab at the mises.org page. Uh we've got a great lessons for the Young Economist uh uh course that Jonathan Newman uh uh we published recently. A lot of other great great uh courses there um on a revamped academy page. It looks uh quite nice. So we will be adding to it. We've got a lot of big plans for the academy this year. So if you haven't checked it out yet, give it a give it a look. And uh we're excited for Wiru's uh edition later this year. All right, though. Well, I want to start off by talking about an article that you had sent around to me and Connor and a couple of others. And I think that'll us talking in the direction of well, what is the central bank and the federal government going to do given the situation in the global economy, which is looking none too rosy at the moment. And normal people know this the most. I've noticed kind of an odd phenomenon that the higher income, the more uh economically comfortable a person is, the the more they think that the global economy is going gang busters. And I guess that's not shocking, right? If if your world seems fine, then I guess the economy is fine. Uh but as we've seen just over and over again since 2009, uh the bailouts really function to create this bifurcated economy. You've got younger people who don't own tons of assets. They're struggling. And those are the people who rely on wages. And the economy is more and more while the the policy environment is more and more uh oriented against making a start in the economy. It's against young people. It's against wage earners and it's very much in favor of older asset owners and of course huge Wall Street firms and that sort of thing. Uh so it's a great e economy for the oligarchs looking not so good for normal people but if you own lots of assets already you think oh well things are things are pretty good and I have noticed sort of that that attitude in many cases look when the subject of the economy uh comes up but if we look at the employment data and we look at uh inflation uh we look at consumer sentiment there's some big problems in what is being called the golden age economy by the current administration. But uh I think that's convincing fewer and fewer people. But this is seeping into internal politics at the central bank and in the treasury and I think is really uh showing some of the some of the problems that the central government and its institutions are facing in terms of making everything look like it's fine in terms of fiscal and monetary governance. So, this article you sent around is called, "It's been a weird 24 hours for the Fed." And we've touched on some of these issues before. There's all sorts of odd stuff going on >> with governance and conflict between the administration and the Fed. So, bring us up to date. What What makes these 24 hours so weird from this article from a couple of days ago? >> Yeah. Yes. This is from from Axios, which again, we're not endorsing the publication, per se, but I I do love a good playbyplay with the drama, the political drama of the Fed in this case. It's not even really, you know, it's not connected to any of these larger headwinds. I mean, this is not really connected to Iran even at all. You know, I I just I love this this narrative, this soap opera of this political drama around the Fed. This, of course, goes back to one of our favorite topics of 2025, which was the uh you know, the the investigations of uh of the the overspending with the the Fed building and the private elevators and the butterfly gardens and you know, all that sort of special stuff. Um again, it's it's it's in the grand scheme of things, the this is this is this is frivolous. This is this is minor stuff, but to the extent that it just further politicizes and and embarrasses uh you know the the the the you know lauded institution of the Federal Reserve and further um that throws politics into the the fire there. Um the back and forth here is continuing the the drama because again you know as we have you know talked about Kevin Walsh was nominated several weeks ago or several months ago now to replace Jerome Pal. Um but the nomination process going through the Senate has been held up by Republicans. Tom Telis being one of the most vocal opponents here. Um talking, you know, basically saying we're not moving on this until the DOJ ends its probe of Drone Powell here. Um so there's been some back and forth in in this regard. I I didn't realize I guess this continues my theme of 2026 being the dumbest year on record. I didn't realize that that the lead uh uh prosecutor uh that the tip of the spear of the pal investigation is is Judge Janine um from from Fox News back in the day which is like perfect and just feeds exactly what I love about this story. Um but I mean this was mainly just back and forth. You know it look like you know look like this coast on. It's not um this start and stop again. And it's just these these these nuts these these uh you know these bumps in the road on what is traditionally right traditionally this is a painless process the the speculation over whether uh Pal will leave the Fed after he is no longer um uh you know the head of the board after he's no longer Fed chair. Um Pal seems dedicated to saying that he is not. Trump has threatened to fire him which opens up you know further topics over the president's ability to remove uh Fed governors. you know, we're still dealing with lawsuits in terms of of that conversation with some of these other players. I I don't see a Bill PY mention in here, unfortunately. But I am still trying to track down the rumors that were uh I was enjoyed reading on Twitter earlier this week about whether or not Scott Bessant had punched Kevin Hessert, who's the, you know, the the the head of the u economic uh uh you know, expert whatever. Yeah. Economic advisor thing. So again, like this this is this is in the grand scheme of things of war turmoil and energy prices and despair particularly for for younger people and and you know bad jobs numbers. This is all more more wrestling than it is you know questions of great civilization. But still I I I I'm enjoying this aspect of Fed drama and and this uh this this true soap opera that I think Rothbart would very much enjoy if he was with us today. Yeah. Well, Connor, is does it even really matter in terms of policy, right? Like, who are they going to put in term, >> right? >> It's why would anything be drastically different if they appoint uh Fed chairman A or Fed chairman B? It's not like they're going to let some true hard money person, whether A or B, get in as chairman of the Fed. It's just not going to happen. So this just seems to be I suppose some disagreements over like details of vision or maybe there's just some personal vendetta. >> Yeah, I think it's certainly personal and I this is something I've been reflecting on in a larger sense. I've been doing a a reread slash my first like cover to cover read of Conceived in Liberty for the the anniversary for the 250th. And I was recently reading um Rothbart's chapter about uh Thomas Payne and Common Sense and kind of the role that common sense played in the revolution as it was kicking off. And essentially what Rockbard says is that there was this very um persistent public taboo against criticizing the king directly. And it was always about like the advisers around him and that he was being misled, but they would never say anything ill about the actual king. And then when common sense came around and uh he basically launched a very direct personal attack on the king, calling him the royal brute of Britain and basically shattered that taboo and then it was essentially okay to going forward. And that was like an important step. And I there's a a quote I don't remember the exact word in there that Payne says that um I think about a lot where he said something to the effect of you have to oppose the tyrant and the tyranny. You need both. Uh you need to focus on both. And I think a lot of the issues with the right right now is that they are so focused on the individuals that they lose track of the systemic issues here. And like I I think back to an an episode we've talked about on the show before. If you go back to sort of the pre-Trump days, the issue is they weren't focused on the tyrant or the tyranny. I the the anecdote being um when McCain defended Obama's uh honor in that debate when you know some lady asking a question launched kind of a personal attack and it was like oh the Republican line was that the Democrats are they have good intentions but we just disagree with them on some of the specifics of policy while the Democrats were being brutal like you know to to the right and Trump really represented a swing away with a swing away from that on the right and launching into these personal attacks and That's largely something I'm in favor of. I That's another common thing we t talk about is that so many of our issues come back to the fact that these officials and politicians and you government bureaucrats don't face any accountability for what they're doing. And that needs to change and that does involve um naming them and pointing them out specifically. And I I think um I would actually put uh a lot of this on Andrew Breitbart. I think he's the one that really started this with the the modern right. Um going out, you know, filming individual bureaucrats doing crazy things, getting these people's faces out in front of people. And that's a good thing. But the problem is that if you focus on that so much, it can lead you to think that if we can just get rid of this one crazy person, then everything will go back to working how it should. And that's just not the case. the the problem with the Fed is not Jerome Pal doing crazy things or refusing to cut rates. It's so much deeper. The the problem is the Fed itself. And so I, you know, with Trump, my take is more that, you know, they had some disagreements and he's just obsessed with removing Pal and kind of winning that personal man-to-man battle. But I think for the larger movement, um, I guess the interesting thing here is that this seems a lot like this is very driven by Trump. It's not like most average Trump supporters are like super passionate about monetary policy or Jerome Pal or whatever, which is why like I'm I'm with you though. I'm happy that he's causing this chaos because it probably wouldn't be happening um without this personal animus. But yeah, the the whole idea that even okay, Pal steps down and they fire him like he he is no longer on the board at all and worse comes in. That's not going to lead to any meaningful change in monetary policy. I mean, even the the fact I have been reading some reporting that's um indicating that the Trump administration's kind of and Trump specifically is backing away a bit from his uh demand to lower rates probably, you know, related to the the whole war situation. So, there may be literally no difference in monetary policy uh going forward once if he gets in when I don't the process is messy. But whenever pal is actually gone and a new guy's in there, I don't expect any meaningful change. Well, I do think Pal I think do think Besset has said, you know, we're not expecting any cuts right now. We're going to let the the chaos of the war environment um you know, provide some more data there. But I I think Trump has said like I when Marsh gets in there, I'm expecting cuts, baby cuts. >> Okay. Um but but uh one article I did want to highlight from Power and Market uh that I think goes into um the sort of um um you know uh the the scam, you know, just just how how absurd some of the the way that we talk about Fed policy and and and particularly during the last few years of PAL. um uh is uh is by Robert Arrow about he was talking about like you know why was the crash delayed once quantitative easing um you started become you you was was being put in place by the Fed and he he talks about how it's like yeah like they they basically stopped one you know they they stopped using one tool that the Fed has to inject liquidity into the market but then they did it through a different door uh with reverse repos and and how that was adding you know 100 you know a whole bunch of liquidity on the other side that pretty much equaled out right and so again like this this does you It's kind of technical in the weeds, but like it does it is an example of this this sort of routine that again and this this is this is the Fed itself, right? This is not Trump rhetoric. This is not uh uh external propaganda per se or some of the politics stuff, but these this is the way the Fed itself can game its own levers to, you know, make a strong signal it's doing one thing while actually doing another thing in actual financial markets. And so that's if if you want to really kind of see how this this game is played, I think that this article by Robert Era is actually a really good um kind of example of just the technical aspects that go into sort of Mont Bailey routine that that we we definitely skip from time to time from the Federal Reserve. >> Yeah, if you want to read that, go on mis.org over on the uh right side. It's the power and market um section of the site. Why the crash was delayed is the one you want to read. you know, he notes interestingly the the myth of quantitative tightening, right, which lasts for about five minutes uh at some point in 2025 because they've in fact I even had a discussion with someone from this the other day who was absolutely convinced that uh the Fed assets were in steep decline whereas since December they've started buying up treasuries again 40 billion a month and have added more than and that's really kind of a minimum because they're buying even a little bit more than that to maint maintain uh the target interest rate where it is. So that they're over 160 billion in new treasuries being bought up by the Fed. That's all being bought up with uh newly created money. And so they're again they're converting debt into dollars. It's a type of monetization of the debt. And that's also helping uh keep the economic situation from really revealing itself cuz it's it's simply stealth liquidity uh while pretending that they're engaging in some sort of quantitative tightening which they of course are not. So if you look at that curve in terms of total assets owned by the Fed and you pull out uh Treasury assets owned by the Fed, that's that's been going up for months now. And so that that giant mountain of assets owned by the Fed is not going away. And that helps to reveal really what the Fed knows is the actual economic situation right now. But that's not doing anything to help the price inflation situation that is rising prices. And the most recent CPI data that came out late last week shows a big spike there. If you look at the month-to-month data, uh that shot up to over8% month overmonth uh in terms of the the overall CPI, you have to go back to 2022 to get a bigger reading than that. Uh 2022, much to my chagrin, was uh four years ago. Um so, it's been a while since we've had uh a big jump like that. And also, if you just look at the year-over-year change, that's up at 3.3%. You've got to go back to 2024 to do that. And essentially, you're going back to uh 2022 when you had those big 40 plus year highs in overall inflation. And you see some similar stuff as well uh in PPI. In fact, PPI numbers as producer price index is even worse. Now, this is prices faced by actual producers, right? The only prices that don't matter or that matter are not just the prices faced by consumers, right? If you are one of the millions of American small business owners, you know that the costs faced by producers are significant and can even be crippling. And those numbers, when you're looking at the year-over-year changes, you have to go all the way back to 2023 to get that. It's been basically the upward trend has been non-stop since 2023. uh in terms of PPI growth year-over-year. So what happens the is producers and those numbers are larger. So that's 4% is the most recent number that came out on Monday. The PPI increase was 4% year-over-year. Uh so obviously nowhere near the 2% neighborhood uh that they want for consumer prices, but the reason that tends to be higher is because producers will buy up goods and services that they need to create their finished product products, but they for reasons of trying to maintain market share will will do everything they can to keep their the prices that they charge at the end level as low as they can. So, you would expect to see lower consumer prices than you would uh producer prices, but those are all problematic in terms of economic growth, in terms of uh production, in terms of companies being able to actually accumulate capital, invest in capital, grow their businesses because they're quietly having their wealth siphoned off by these high high producer prices. And I know consumers are complaining all the time about how how they're being gouged uh by the producers by small business owners and such, but really for the most part those those small business owners are trying to keep prices as low as they can because they don't want to lose their customers. And at some point those prices just are going to have to go up and fewer people are going to shop there. Uh as they should, right? you shouldn't just keep buying stuff that's outlandishly expensive. Um, it's not a good place to put your money. But this, of course, is forced upon many producers by the government as they continue to inflate the money supply and more dollars are chasing goods. Uh, the prices go up and that's it makes life more expensive for both the producers and the consumer. So, we're seeing a clear upward trend in all of that. And if you look at the accumulated price growth since 2020 when all bets were off and Trump just doubled down on spending massive amounts of money and demanding that the Fed of course bal uh produce $6 trillion in new dollars to uh basically pay people to stay home from work and not do anything uh in order to conform with Trump's uh beloved stay-at-home idea where he tried the best he could to implement meant the mandatory stay-at-home orders and the business closdowns and all of that. Uh, which some people now try and say, "Oh, he didn't really do that." That's true because only the states could get away with doing that constitutionally, but Trump encouraged it every step of the way for the first several months. And it was his CDC where he kept Fouchy in power forever, it seems, uh, giving him a daily uh, bully pullpit to talk about, uh, COVID and all of that. And uh in order for Trump to encourage of course government vaccines and mandatory vaccines and all of that, the the economic outcome of that was massive amounts of inflation. And so thanks to the combined Trump Biden policies of COVID, we got huge amounts of inflation and no deflation since then. So prices have gone up relentlessly. They've even accelerated in recent months. And by any measure, whether it's CPI, core CPI, PPI, core PPI, all of that is at least 25% higher than what it was in 2020. And uh overall CPI is up at about it's up 28% and PPI is up nearly 30% at 29%. And if your income was keeping up with that, that's great. And for some white collar people, their incomes have indeed, especially if you're well established in your career at that point, uh your incomes have kept up. But this is just one example of how if you're at the if you're beginning in your career, if uh you are not lucky enough to be at the higher end of the income strata, then you probably are not experiencing a 25% increase in your overall income during that period. So you are in fact in real terms significantly poorer today than you were in 2020. And that's the reality for a lot of Americans. And so we look here at price inflation and it ain't going back to 2%. It's now been 18 months since the Fed was assuring everybody. Powell gets up and you'll remember Powell decided, hey, uh, the election day is almost here. It's late 2024, I guess. that we need to get our man Biden reelected or rather I guess to get Kamla elected because there there's really no other explanation for why they would uh cut uh interest rates the target interest rate in September 2024 unless it was some sort of electoral political decision because it was so clear that uh the target inflation rate was not about to be accomplished even though that's what Powell said. Oh, it's it's heading back rapidly to the 2% goal. We're going to be there any day now. So, now we have to temper the economy and we have to cut a little bit more because we're worrying about job growth and all of that sort of thing. Completely wrong. Couldn't have been more wrong because here we are more than a year and a half later and it's never even gotten close uh back to 2%. In fact, I would suggest that the real de facto uh goal for the inflation rate is 3%. Now, that that is what the Fed is doing because you'll see that even as in later cuts and Fed policy overall, even as you started to see inflation rates actively head back up, the Fed was cutting into that anyway. When all the indicators was that the inflation drag and not been slayed, the Fed was actually cutting the target rate. Why? because it it makes sense if you look back and you and you think in your mind, well, what if the target interest rate was actually 3%, not 2%, that actually makes a lot of sense now. So, they've increased that significantly in real terms. So, they're just lying to your face essentially at this point when they say that the the target rate is 2%. And they clearly don't they don't care that that that people are losing tons of their purchase purchasing power month after month, year after year. And why? Because really the matter here is making sure that uh interest rates on treasuries remain low. And this comes back again to quantitative easing. The real goal here is to purchase treasuries as needed in order to make sure that as the federal government dumps trillions of dollars and it's estimated that they're going to be spending a couple of trillion extra on top of usual the usual defense spending for this Iran war in the coming year or two that they're how are they going to do that? Well, obviously it's going to be deficit spending. So, they're going to have to dump a trillion or two extra. That's on top of the usual deficits which were already about 1.6 1.8 8 trillion per year under Trump. They're going to have to come up with a whole bunch extra on that, dump it into the global economy. And uh there will be buyers, but will there be buyers at interest rates uh that are low enough to make it feasible for the federal government to keep up with all of its usual programs? Uh the Fed the federal government does not seem to think that. And I think that's part of why the central government or why the central bank is back to purchasing 40 billion again every month in treasuries. Uh so that seems to be where we're at. There's huge amounts of new debt coming down the pike. Inflation is going up. The Fed should in fact then be raising rates or allowing rates to go back up, but they can't because they have to purchase new treasuries in order to keep the interest rates from getting out of hand. Uh so don't expect the Fed to actually care about the cost of living for normal people. Remember what the primary goal of every central bank is to finance government spending. That's why they were created. That's why they exist. They're there to keep cheap credit available to all national governments. That's all they really care about. All that talking about employment, maximum employment, price stability, that's all just political cover. That's just stuff they say in order to try and manufacture consent. uh for the central bank. So that's just one aspect of the economy that we're facing right now. >> And it's interesting um because I mean Kevin Walsh has made his entire you know assuming assuming he actually ever gets confirmed again be you stay tuned. Um but like one of the priorities that he has made in his kind of public cell on what his chairmanship would look like is oh we're going to we're going to normalize the balance sheet. But of course, like precisely for the reasons that you just outlined, Ryan, is that like that that in particular is going to be an extremely difficult thing, you know, you no matter what your your intent might be given the fact that again like you interest u you the the cost for for financing the debt right now is well over a trillion dollars. Um like you know this these are the the very real you know this is a situation I and that's why you know typically you know we we are very much nothing ever happens bros when it comes to uh any anyone talking about uh significant Fed reforms new personalities coming in. Um but that's going to be a very interesting uh dynamic that that he's going to inherit. um you know given everything that's going on right now and and of course right now I the biggest when it came to the economy the best thing that Trump had going for him as we've repeated multiple times over the last several weeks was gas prices and now that you know I know there's been a little bit of softening in the last uh last week relative to it was at at the peaks of the crisis but it's still well over 90 well over 30% of what it was prices are you know over $90 it's you know 30% higher than it was at the start of the war um you know that is something that you know every American fe feels right now that is something that's going directly into those production prices right now. That is something that when you know not inflation in the the you know the Austrian sense but price inflation is felt by normal people and that is one of the biggest things that are driving down those that are are you know particularly those firmly in the the middle class and and lower and like that is the biggest anchor that any presidency ever has and this a direct to continuing consequence of the military and venture >> right and I uh just wrote about it this a few weeks ago because it goes so much beyond so much further beyond gas prices if you dig into it. The amount of economic destruction that has already happened because of the war is substantial and specifically it is mainly in you know with those uh producer goods. So, it's stuff that hasn't really hit consumers yet directly, but will at some point. And yeah, you're like that's an important thing to stress and you mentioned this in your recent article, Ryan, that it's not actually inflation when you have like these big supply shocks because inflation, we're talking about a general rise in prices. And that can only happen if you're affecting the monetary unit. um when you have you know some goods going up in price that's going to have uh defl or not deflationary but the the price of other goods like complimentary goods are going to decrease so it's not actually technically inflation but the way that they measure it you know mainly with like CPI PPI yeah picks all this up so it this is what I was talking about early in the war um it puts the Fed in kind of this interesting situation where it's just kind of a question of which one takes off first because yeah right now We're seeing high prices that are uh mainly coming from energy but are pretty quickly going to be coming from other areas like uh the fertilizer um crisis is a huge deal but that's probably not going to hit food markets for a couple of months here because it's affecting farmers when during the planting season but you know it takes months for that to all work its way into like an actual finished food product and that's just going to be absent down the road which is going to mean very high prices. So you have like all these various uh rises in price that you know are picked up as the CPI going up as price inflation. The Fed's supposed to you know guard against that and not let things run too hot when price inflation is going up. But the reason that's actually happening is because of economic destruction. The opposite of economic production. You have all this stuff that has been destroyed or shut down. It can't just be kicked back up again very quickly. And that's going to mean there's not enough stuff available for people that need it. And that that means the world is poor. Like that is economic trouble that will become more obvious. Now, it's going to be a question like I kind of doubt that's going to be clearly tied to the war in the minds of most people, but that that's the fact like that's what we're going to be facing. And that by all indications, it looks like it's going to be some pretty substantial economic pain, which is of course when the Fed's supposed to come in and rescue the economy. And so the fact that they have kind of these two like the two things they're supposed to be guarding against, there are reasons to expect things to get worse on both worse on both fronts at basically the same time or, you know, because of the same general cause. Uh I I think it puts them in kind of a uh difficult position which I don't I have no sympathy for them on that front. But um I just think especially uh with all of the goods that are not directly, you know, not oil and LG like people are really underestimating how damaging even plastics. Plastics are so important for so many different lines of production. Like you know medical supplies, IV bags, syringes, stuff like that. Like you could just kind of go down the rabbit hole in any one of these things or like plastic piping for construction. like the fact that there will be less of this available than people demand is going to have it's going to impact all of us, it's going to be very painful. And yeah, when traditionally the Fed comes in and uh rescues the economy, like when something like that really starts to gain steam, uh you know, that's what we're used to seeing. But then if the if the CPI is going up and up and up because of this too, I mean, yeah, I I would expect them to do it anyway. like you're saying, Ryan, they don't actually really care about protecting the value of money or anything, but when it comes to the the optics of all the dual mandate and always looking for these two concerns, um I think it's going to become more obvious in the near future that no, they actually care about one more than the other. >> Yeah. Well, one of the stupidest things I've heard Trump say in terms of economics in recent days, we have to clarify this particular topic of uh the economy because uh there were probably vastly stupider things said about foreign policy uh but saying that the the blockade of the straight, the closing of the straight, whether it's through the US's blockade or through Iran's closing of the straight through their own methods, that that would be good for America because America produces oil. So then everybody will just buy American oil and then Americans will be better off. Like that only makes sense if you are so dumb that you don't understand that oil is bought and sold in a global marketplace and that if there's less oil coming out of the straight, then that means people are bidding up the price of oil produced everywhere else and you are going to be paying a lot more for it. And so the global price of oil will go up significantly. And that's what people have to pay in this country for oil because people are free to sell it wherever the buyers are. And so the price will be bid up now thanks to monetary inflation. Not only will oil prices be bid up as you note Connor, but everything else will be bid up uh as well because there will be more money chasing a not only a stable amount of goods, not only an amount of goods that's not increasing at the same rate as the money supply, but actually probably a decreasing number of goods, which makes inflation all the worse. And uh so all that oil is going to be needed uh for everything around the globe. And the truth is America isn't even really totally self-sufficient in terms of oil. Americans do import oil because it's it's crucial to so many different sorts of goods. So they're going to have to be buying that oil in the global marketplace. The only way that even the Trump argument would work would be if you just banned uh oil exports out of the United States, which by the way, I don't say he wouldn't be willing to do, but that's just the sort of communism that I can see MAGA getting behind. Uh we're now going to outlaw uh the exporting of uh of goods uh related to oil or oil itself out of the United States. You know, private property be damned. Uh you don't get to sell that to willing buyers anymore. would be that I could see Trump doing that. Uh but that would be the only way of even making the Trump uh fantasy of the idea that uh Americans are somehow better off. Uh now obviously there's like second and third and fourth order effects. So it doesn't even really make sense uh even if you banned the export of oil. But I could see how it might at least seem plausible on the surface. But if you're not going to ban exports, then his comment about how uh a declining uh global production in oil somehow benefits Americans is just crazy talk. Uh but that seems to be where we're at right now. But all of this, as you note, feeds into an article I sent around to you guys the other the other day. Consumer sentiment plummets to record low as Iran war jacks up inflation. Uh right. The Iran war is not jacking up inflation as you just noted, Connor. It's actually monetary uh production, monetary growth that is creating a general increase in prices. What you would just see is is an increase in some goods and then a decrease in prices in other goods because people would have to transfer their money to only those goods that where there are now fewer of them, just oil related goods. But since there's so much monetary inflation, you're going to see all prices go up. But the price Yeah. the price of living is going up. There's so much uncertainty because of the war and now of course the administration's goals in the war are just to get back to what the status quo was before the war to open the straight back up straight that was open before the war and then Trump got caused it to be closed and now he wants it open again and that these are major economic destru uh disruptions that are very problematic to people and so you get consumer sentiment as at the lowest level you've ever seen and of course it's not just Iran war inflation, it's employment. If you look at the employment situation as well, that's really not good. Uh we can look at at hires. If you look at overall hires released, I believe last Thursday, then you have to go back to 2014 unless you so you would exclude COVID on this because that's just such a has nothing to do with normal economic behavior. you got to go back to 2014 to find a period where you had fewer hires. And then if you look at actual employment situation, there are two surveys of employment. There's the establishment survey and there's the household survey. Uh and these are two different measures that I guess we don't really have time to get into in any detail, but the the point I'm going to make is that neither of them looks very good right now. often they they're divergent and you might be able to find some good news on one of them. But if we look at say the household survey, which is a an actual phone survey, calls people and asks them, "Do you have a job?" Uh, and they say yes or no. That's where they they determine what the unemployment rate is because they've determined, are you looking for a job? Do you have a job? That sort of thing. Well, those numbers are all down. In fact, down uh by over the last year, 661,000 jobs, it looks like uh if and then over the last three months down by it looks like let's see 83,000 of those positions per month over the last three months. So there's significant deterioration there in the household survey. And then normally the better news comes out of the establishment survey which is just a uh a survey of big employers and they ask them just do they have jobs. Doesn't matter if it's part-time or full-time. Hey, do you have jobs there that uh you're adding? And the answer is yes or no. And we're looking there and normally a healthy number there is going to be at least uh over 150,000 something like that. But if we look at what's going on there in recent months, we're looking at 15,000 average over the last 3 months. And over the last year, a total of 260,000, which comes out to, let's see, looks like 21,000 per month in terms of job growth. These are poultry tiny numbers in terms of job growth. and and it can be seen in the fact that the unemployment rate is basically flat. They get all excited because it goes up like a tenth of a percent or something. A lot of that's just driven by people leaving the workforce. Uh but when you look at hires being in the dumper, you look at these tiny job numbers, uh you look at what the situation is with unemployment and labor force participation, there's there's every good reason to believe that ordinary Americans are aware of what the employment situation is or where it's headed. And that's part of why consumer sentiment is so bad. Uh there's really very few bright spots here in this employment data. What an interesting point here though uh that maybe we could uh maybe we need to ask more questions about this is how the markets respond so ridiculously to this sort of data. Uh so they they for example this most recent uh month they they release some new jobs data that was last week and they say oh hey we added more than 100,000 jobs the market says oh great and but then we all know how this dog and pony show works. They come back a month later and they revise down those numbers significantly. That was the most recent number here was a downward revision of it looks like about 41,000 was the downward revision to already negative numbers. And so that created basically negative job growth in recent months even with an upward revision in January. So these numbers once you get past that first initial job number release which always tends to look much much better than the reality and then it makes uh the markets say oh look I I guess the the economy is firing on all cylinders again and then the next month comes they revise down the number significantly. It's no surprise to those of us who are paying attention but the overall jobs numbers then don't even take any notice because it's not a headline number. So, it's sort of this song and dance that we're constantly seeing and you you can no longer glean any information from how the market responds to this stuff because a sane person can see how oh the the negative revisions come later so I need to take all these numbers with a grain of salt. The markets don't seem to be behaving that way. Just like no matter how uncertain the global economy becomes, no matter how uh many times Trump says he's going to close the straight or he's going to escalate the war, the S&P 500 just keeps going up. So these numbers apparently have nothing to do with reality. And I find that I find that kind of curious. Um, and it's definitely a change in the situation from what we had 20 years ago where the market seemed a lot more connected to the actual real world. Hey, for all this doom and gloom, I I think the S&P 500 hit a a new high today. So again, it does just go to the the disconnect. And of course all of this you know the combination of um you know both both the the stagnant job market and also the element of you know hey if you're if you're heavily invested in stocks you're having a good day right now. this this you further just you know you you know divides the the generational experience of of this economy which again I think is one of the most important kind of meta narratives of you know not just American politics but global politics right now because like it's it's this generational conflict which is the the natural byproduct of this you know financialist system that we have um you know is is you know that is a source of of major turmoil again not just from an American standpoint but really a global standpoint right Yeah. And just the disconnect I that's something I've been reflecting a lot with this war because it's I guess we're just so used to I mean at least for me the whole time I've been paying attention to the stock market and the the trading it's always felt so decoupled from the actual economy. And like what I wrote about in that piece is like an important point that is so often left out and people can just forget is that the entire point of the economy is to produce stuff that people want to buy. and you know value enough to pay for and yet when you don't really focus on you know the actual business that's happening but you look at the the stock market or all this stuff I mean it's of course it looks like a casino to most people it's like all these this pump and dump happening constantly that and certainly as you're adding in um all the new kind of interesting uh dynamics with uh the these basically um betting markets and how like the you have these people that are betting like huge amounts of money right before the president announces some, you know, development in the war and then the thing goes crazy and people are making insane amounts of money. Like I can understand why the average Gen Z person who's struggling sees all this and it's like that it's all fake and because a lot of it is fake but then but at the same time like everything I was talking about before we have real economic destruction that's going to actually cause like real problems that is important to talk about and to point out and to prepare people for. But when you have this sense that you know it's just um it's essentially just numbers on a screen and like it's that that disconnect is so damaging and really damages the ability to actually like pivot into a much more productive direction here which is um concerning and it's it's a reason I I don't obviously sympathize but I understand why young Americans are like turning anti- capitalist because this is their whole understanding of what capitalism is um is essentially people insider trading couch and like betting markets and like the whole thing's just it's just like this illusion that's so decoupled from reality. But the fact is reality is still here and it's still impacting all of us and uh yeah that it's it's hard to have a nuanced take on all this um this day and age and in this media environment but um yeah this is a nuanced issue and that like there are some serious serious issues with the current economic setup but like the answer is not communism. Not to throw all of this out like, oh, this is markets and so we need to pivot completely away from that, but um it's just I can understand the the drop in consumer sentiment because it's like it's not even just oh things are bad right now, but there's like there's no sense of hope for like things are going to get better at some point. It's just it's so it's almost like you couldn't design a system that better for it, you know, it to lead to some kind of like economic populist revolution. And that's just that's what we're living through. >> Yeah. I mean, it's very real. The the the cassinification of the economy is is very real. And we saw like getting and I'm not necessarily even trying to critique this particular change. Like I'm, you know, but but like, you know, there's there's talks about removing the $25,000 limit for like day trading. And again, I'm not saying that's that's good or bad, but but it plays into like this larger view that that that the best way to to get rich or the the the most sustainable way or the the the only way to to really make major gains in the modern economy is to play it like a casino. And that's what appeals a lot of people to to the stock market. I mean I remember uh you you got you the bar school bar bar school sports people becoming stock analyst analysts uh during co and with with all everything that was happening during then but like it is the democratization of this casinoification of the economy that is becoming very very normalized um you know whether that's directly through the stock market or playing similar sort of macro trends with ksh shei I mean this is it it is incredible how quickly this has p picked up and normalized >> well with you saying all that I just realized how much more stupid the world would have been in 2007 or so if we had had social media to the extent that we have it today. Because it was bad enough then because the the bag boy bagging your groceries at the grocery store was also a mortgage broker and owned 10 condos and was a investment guru at least in his own mind. And everyone was telling you everywhere how they had figured out how to make uh countless piles of cash from investing in real estate because real estate always goes up, right? And we've got the same level of dumbness coming from uh social media now, except now it's magnified because it goes out over all of these social media platforms. In 2007, you pretty much had to run into these people in real life. Uh or they they were buying like 3:00 a.m. time slots on TV. Uh this was back when people used to like just switch around the dial, watch TV and you would see this stuff and uh it was just constant bubble talk, right? Oh, you got to buy now, you'll be locked out forever. Buy this stuff. It's the same way now with our financialized economy, right? That was just an earlier stage of financialization. Now we don't even bother with real estate anymore. just buy buy stocks, buy some sort of odd new creative asset, quote unquote, that you can get. And you got people at Bar Stool Sports who are now the experts on what it is that you should be buying. And they also tell you that you're just a sucker if you just put your money in there and don't don't leverage it to uh to the to the gills uh in order to put yourself into a very um unstable situation where you might actually have a margin call rather than just putting money in stocks and holding that then you're you're just dumb bro. You're not uh leveraging it as much as you could. So I do think that's a that affects young people I think the most too because they don't know better. They don't know that these are con artists trying to get them to put themselves into a high-risisk situation. Uh where they might end up in deep deep trouble. Uh so I do feel bad for the young people have to face this because we I remember how it felt in 2007 or so when I was what would I have been back then around 30 years old or so. Uh so that was that was grim. you did feel like you weren't doing it. But then you met the person who foreclosed on 10 properties and all of that stuff and you didn't feel so bad anymore. Uh but when you're looking at the economy, you think, well, it's never going to end. They nothing ever changes, right? They'll just keep they'll find some other sneaky way to make the economy uh somehow bounce back. They'll somehow enrich the billionaires even more and they'll somehow make number go up and everything will be fine again. Uh the thing is is that things don't change until they do. And that was the situation in uh say the Soviet Union in 1986, right? Soviet Union is going to last a thousand more years, folks, right? You can't act like it's never going to go away. Or Americans in 1774. Nothing ever changes. Be part of the British Empire for a thousand years. Or uh French nobility in 1788, right? We'll be in charge forever. Everything's fine. I don't know why these people are complaining. Um things don't change until they do. And now you what you'll get when you get the con artist stock people that are like, "Well, bro, would you just take all your money out of the stock market then, man? You're not even going to No, I I don't I'm not first of all, I'm not going to retire for decades." So, it's not like if if if that all that stuff loses 50% value, whatever. It's not going to affect uh me in the near or medium term. Uh but you do have to just face the reality that history is not this serene thing where everything just slowly improves all the time and regimes can always stay in power. Right? Though you know this not even Parto who is a hardcore pessimist thought that regimes can keep it going forever. Right? They make mistakes. they become decadent within even the ruling class and they screw it up and then everything comes falling down and they get replaced by a new governing elite. Uh so it happens. Uh but I do continue to talk to people and they're like no it's going to be fine. Everything's going to be fine. The dollar will be around forever. The dollar will be the dominant currency for the next thousand years. There's there's no change coming. I mean I don't know how how soon stuff will happen. I do know that if you don't have some sort of major change in the economy that helps to uh bely the current regime's ability to control everything and make everything fine all the time. If you don't get something that makes that obvious that they're not in fact able to manage everything fine, you're just going to get a more uh and more tyrannical ruling class, right? because they'll be able to trade in and bank on this mirage of wisdom and the ability to manage everything. So, you really have kind of two choices. You can choose between tyranny or you can choose between temporary economic displacement. And economic displacement will happen eventually. Uh but I don't know when that's going to happen, but I can guarantee you in the meantime you'll get more tyranny. So, we'll see what happens. you could end up with more tyranny after the economic displacement because people will adopt the wrong type of regime afterward. They won't learn the lessons and that's certainly a possibility. Uh but we shall see on that. So I I just can't make a prediction. I don't know what's going to happen, but I can tell you that things only last until they're over. Well, and and you know, you know, I know that the uh the topic of um kind of uh Orban and Hungary can can go into weird directions, but I I do think it's interesting that, you know, what we've heard for, you know, a decade plus from, you know, from from very serious people, right, was how Orban had created a, you know, basically a dictatorship, you know, a a false democracy and all of that. And he had he had, you know, created this massive propaganda state for himself. and and with his election, you know, it it was I think, you know, a lot of it was economic factors that even a regime that had built itself, you know, with with the intent of staying in power um you know, lost an election um because of economic headwinds. And again, I I I think there's a there's a lesson there that would be lost thankfully on on on those in power. But I but even if if an Orban can fall in Hungary because of of economic headwinds and you know state capacity and everything like that um you know those the amount of institutions and castles you build for yourself um you know they they those two can fall in pretty short order >> right and I the the important step for the American people at least is to realize it's not a partisan thing. It's not the the the Democrats have Democrats have it figured out and the Republicans are messing everything up or vice versa. It is people like Jerome Pal. It's the the people at the Fed and the mostly faceless people that are the actual regime that have ruined all of this. And the politicians are kind of a distraction. So no, like uh another blue wave in the midterms would not be regime change, regime collapse. It's just that's theater to keep you distracted from the actual regime. >> All right. Well, we'll go ahead and wrap up with that observation. Um, always always ending on a Oh, wait. No, it's Radio Rothbart where we always end up on a downer note. We're more optimistic here at Power Market. Uh, well, >> as you can tell from this episode, >> right, >> usually. >> So, this this is one of our happier episodes. Uh, but at least finally we got to talk about something other than the war for a while. Boy, I think we had like three episodes in a row or something on that because it just dominated everything. But there was all this economic news in the last week. Um, >> luckily the war is over now, Ryan. >> Oh, thank >> for the 17th time. Yeah, >> thank goodness. Um, the Yeah, don't don't go listening to any John Mirshimer videos on YouTube if you want to have a happy day. I can tell you that much because that's a that's always a constant down. I think he's actually on vacation for a couple of weeks. So, uh, you might be able to get some happy news, uh, as far as the war goes for a little while. Uh, but I'm sure we'll be back to that as as time goes on. But the economic news wasn't even that happy. It's just a recession isn't nearly as awful as say, you know, a major war uh in a country with 90 million people. That sort of thing. >> It's all relative. Yeah. >> Right. Exactly. Right. I don't have bombs ramming down in my house or anything like that. Uh, so thank you gentlemen for joining me today. Thank you everyone out there for listening and we'll be back next time with more. So we'll see you then.
War Doesn’t Stop the Casinofication of the American Economy
Summary
Transcript
Welcome back to the Power Market podcast. I'm Ryan McMaken, editor-inchief at the Mises Institute. And joining me as usual are two of our contributing editors. We've got Tho Bishop and we have Connor O'Keefe. And this is your weekly current events podcast from the Mises Institute. Be sure and check us out if you want uh some of our more academic type content. That's at mises.org. m i ses.org. And we also have some events coming up. Uh right though, we've got uh a San Diego event coming up very soon and some other stuff too. Yeah. On April 25th, we've got that San Diego event. California's decline, a warning to America featuring Ryan and Connor both as well as uh Peter Klein, Bill Anderson, the great Ed Fuller um and Chris Cton, front of the show. So, it's going to be a great event if you're in the San Diego uh area. And if you're not, it will be soon off of our ad read lineup. So you can look forward to that. Rothbart University, if you've never been able to experience the Mises U, uh the the M6U experience, and this is a great opportunity, particularly for professionals to have a little taste of the best week of the year, that will be on May 14th. And one thing a little bit down the line I'm excited about in August is a ethics of liberty seminar, which will be in Auburn, Alabama, but that will also be converted into a Mises Academy course. And if you not checked out the Mises Academy course, you can find it at the top tab at the mises.org page. Uh we've got a great lessons for the Young Economist uh uh course that Jonathan Newman uh uh we published recently. A lot of other great great uh courses there um on a revamped academy page. It looks uh quite nice. So we will be adding to it. We've got a lot of big plans for the academy this year. So if you haven't checked it out yet, give it a give it a look. And uh we're excited for Wiru's uh edition later this year. All right, though. Well, I want to start off by talking about an article that you had sent around to me and Connor and a couple of others. And I think that'll us talking in the direction of well, what is the central bank and the federal government going to do given the situation in the global economy, which is looking none too rosy at the moment. And normal people know this the most. I've noticed kind of an odd phenomenon that the higher income, the more uh economically comfortable a person is, the the more they think that the global economy is going gang busters. And I guess that's not shocking, right? If if your world seems fine, then I guess the economy is fine. Uh but as we've seen just over and over again since 2009, uh the bailouts really function to create this bifurcated economy. You've got younger people who don't own tons of assets. They're struggling. And those are the people who rely on wages. And the economy is more and more while the the policy environment is more and more uh oriented against making a start in the economy. It's against young people. It's against wage earners and it's very much in favor of older asset owners and of course huge Wall Street firms and that sort of thing. Uh so it's a great e economy for the oligarchs looking not so good for normal people but if you own lots of assets already you think oh well things are things are pretty good and I have noticed sort of that that attitude in many cases look when the subject of the economy uh comes up but if we look at the employment data and we look at uh inflation uh we look at consumer sentiment there's some big problems in what is being called the golden age economy by the current administration. But uh I think that's convincing fewer and fewer people. But this is seeping into internal politics at the central bank and in the treasury and I think is really uh showing some of the some of the problems that the central government and its institutions are facing in terms of making everything look like it's fine in terms of fiscal and monetary governance. So, this article you sent around is called, "It's been a weird 24 hours for the Fed." And we've touched on some of these issues before. There's all sorts of odd stuff going on >> with governance and conflict between the administration and the Fed. So, bring us up to date. What What makes these 24 hours so weird from this article from a couple of days ago? >> Yeah. Yes. This is from from Axios, which again, we're not endorsing the publication, per se, but I I do love a good playbyplay with the drama, the political drama of the Fed in this case. It's not even really, you know, it's not connected to any of these larger headwinds. I mean, this is not really connected to Iran even at all. You know, I I just I love this this narrative, this soap opera of this political drama around the Fed. This, of course, goes back to one of our favorite topics of 2025, which was the uh you know, the the investigations of uh of the the overspending with the the Fed building and the private elevators and the butterfly gardens and you know, all that sort of special stuff. Um again, it's it's it's in the grand scheme of things, the this is this is this is frivolous. This is this is minor stuff, but to the extent that it just further politicizes and and embarrasses uh you know the the the the you know lauded institution of the Federal Reserve and further um that throws politics into the the fire there. Um the back and forth here is continuing the the drama because again you know as we have you know talked about Kevin Walsh was nominated several weeks ago or several months ago now to replace Jerome Pal. Um but the nomination process going through the Senate has been held up by Republicans. Tom Telis being one of the most vocal opponents here. Um talking, you know, basically saying we're not moving on this until the DOJ ends its probe of Drone Powell here. Um so there's been some back and forth in in this regard. I I didn't realize I guess this continues my theme of 2026 being the dumbest year on record. I didn't realize that that the lead uh uh prosecutor uh that the tip of the spear of the pal investigation is is Judge Janine um from from Fox News back in the day which is like perfect and just feeds exactly what I love about this story. Um but I mean this was mainly just back and forth. You know it look like you know look like this coast on. It's not um this start and stop again. And it's just these these these nuts these these uh you know these bumps in the road on what is traditionally right traditionally this is a painless process the the speculation over whether uh Pal will leave the Fed after he is no longer um uh you know the head of the board after he's no longer Fed chair. Um Pal seems dedicated to saying that he is not. Trump has threatened to fire him which opens up you know further topics over the president's ability to remove uh Fed governors. you know, we're still dealing with lawsuits in terms of of that conversation with some of these other players. I I don't see a Bill PY mention in here, unfortunately. But I am still trying to track down the rumors that were uh I was enjoyed reading on Twitter earlier this week about whether or not Scott Bessant had punched Kevin Hessert, who's the, you know, the the the head of the u economic uh uh you know, expert whatever. Yeah. Economic advisor thing. So again, like this this is this is in the grand scheme of things of war turmoil and energy prices and despair particularly for for younger people and and you know bad jobs numbers. This is all more more wrestling than it is you know questions of great civilization. But still I I I I'm enjoying this aspect of Fed drama and and this uh this this true soap opera that I think Rothbart would very much enjoy if he was with us today. Yeah. Well, Connor, is does it even really matter in terms of policy, right? Like, who are they going to put in term, >> right? >> It's why would anything be drastically different if they appoint uh Fed chairman A or Fed chairman B? It's not like they're going to let some true hard money person, whether A or B, get in as chairman of the Fed. It's just not going to happen. So this just seems to be I suppose some disagreements over like details of vision or maybe there's just some personal vendetta. >> Yeah, I think it's certainly personal and I this is something I've been reflecting on in a larger sense. I've been doing a a reread slash my first like cover to cover read of Conceived in Liberty for the the anniversary for the 250th. And I was recently reading um Rothbart's chapter about uh Thomas Payne and Common Sense and kind of the role that common sense played in the revolution as it was kicking off. And essentially what Rockbard says is that there was this very um persistent public taboo against criticizing the king directly. And it was always about like the advisers around him and that he was being misled, but they would never say anything ill about the actual king. And then when common sense came around and uh he basically launched a very direct personal attack on the king, calling him the royal brute of Britain and basically shattered that taboo and then it was essentially okay to going forward. And that was like an important step. And I there's a a quote I don't remember the exact word in there that Payne says that um I think about a lot where he said something to the effect of you have to oppose the tyrant and the tyranny. You need both. Uh you need to focus on both. And I think a lot of the issues with the right right now is that they are so focused on the individuals that they lose track of the systemic issues here. And like I I think back to an an episode we've talked about on the show before. If you go back to sort of the pre-Trump days, the issue is they weren't focused on the tyrant or the tyranny. I the the anecdote being um when McCain defended Obama's uh honor in that debate when you know some lady asking a question launched kind of a personal attack and it was like oh the Republican line was that the Democrats are they have good intentions but we just disagree with them on some of the specifics of policy while the Democrats were being brutal like you know to to the right and Trump really represented a swing away with a swing away from that on the right and launching into these personal attacks and That's largely something I'm in favor of. I That's another common thing we t talk about is that so many of our issues come back to the fact that these officials and politicians and you government bureaucrats don't face any accountability for what they're doing. And that needs to change and that does involve um naming them and pointing them out specifically. And I I think um I would actually put uh a lot of this on Andrew Breitbart. I think he's the one that really started this with the the modern right. Um going out, you know, filming individual bureaucrats doing crazy things, getting these people's faces out in front of people. And that's a good thing. But the problem is that if you focus on that so much, it can lead you to think that if we can just get rid of this one crazy person, then everything will go back to working how it should. And that's just not the case. the the problem with the Fed is not Jerome Pal doing crazy things or refusing to cut rates. It's so much deeper. The the problem is the Fed itself. And so I, you know, with Trump, my take is more that, you know, they had some disagreements and he's just obsessed with removing Pal and kind of winning that personal man-to-man battle. But I think for the larger movement, um, I guess the interesting thing here is that this seems a lot like this is very driven by Trump. It's not like most average Trump supporters are like super passionate about monetary policy or Jerome Pal or whatever, which is why like I'm I'm with you though. I'm happy that he's causing this chaos because it probably wouldn't be happening um without this personal animus. But yeah, the the whole idea that even okay, Pal steps down and they fire him like he he is no longer on the board at all and worse comes in. That's not going to lead to any meaningful change in monetary policy. I mean, even the the fact I have been reading some reporting that's um indicating that the Trump administration's kind of and Trump specifically is backing away a bit from his uh demand to lower rates probably, you know, related to the the whole war situation. So, there may be literally no difference in monetary policy uh going forward once if he gets in when I don't the process is messy. But whenever pal is actually gone and a new guy's in there, I don't expect any meaningful change. Well, I do think Pal I think do think Besset has said, you know, we're not expecting any cuts right now. We're going to let the the chaos of the war environment um you know, provide some more data there. But I I think Trump has said like I when Marsh gets in there, I'm expecting cuts, baby cuts. >> Okay. Um but but uh one article I did want to highlight from Power and Market uh that I think goes into um the sort of um um you know uh the the scam, you know, just just how how absurd some of the the way that we talk about Fed policy and and and particularly during the last few years of PAL. um uh is uh is by Robert Arrow about he was talking about like you know why was the crash delayed once quantitative easing um you started become you you was was being put in place by the Fed and he he talks about how it's like yeah like they they basically stopped one you know they they stopped using one tool that the Fed has to inject liquidity into the market but then they did it through a different door uh with reverse repos and and how that was adding you know 100 you know a whole bunch of liquidity on the other side that pretty much equaled out right and so again like this this does you It's kind of technical in the weeds, but like it does it is an example of this this sort of routine that again and this this is this is the Fed itself, right? This is not Trump rhetoric. This is not uh uh external propaganda per se or some of the politics stuff, but these this is the way the Fed itself can game its own levers to, you know, make a strong signal it's doing one thing while actually doing another thing in actual financial markets. And so that's if if you want to really kind of see how this this game is played, I think that this article by Robert Era is actually a really good um kind of example of just the technical aspects that go into sort of Mont Bailey routine that that we we definitely skip from time to time from the Federal Reserve. >> Yeah, if you want to read that, go on mis.org over on the uh right side. It's the power and market um section of the site. Why the crash was delayed is the one you want to read. you know, he notes interestingly the the myth of quantitative tightening, right, which lasts for about five minutes uh at some point in 2025 because they've in fact I even had a discussion with someone from this the other day who was absolutely convinced that uh the Fed assets were in steep decline whereas since December they've started buying up treasuries again 40 billion a month and have added more than and that's really kind of a minimum because they're buying even a little bit more than that to maint maintain uh the target interest rate where it is. So that they're over 160 billion in new treasuries being bought up by the Fed. That's all being bought up with uh newly created money. And so they're again they're converting debt into dollars. It's a type of monetization of the debt. And that's also helping uh keep the economic situation from really revealing itself cuz it's it's simply stealth liquidity uh while pretending that they're engaging in some sort of quantitative tightening which they of course are not. So if you look at that curve in terms of total assets owned by the Fed and you pull out uh Treasury assets owned by the Fed, that's that's been going up for months now. And so that that giant mountain of assets owned by the Fed is not going away. And that helps to reveal really what the Fed knows is the actual economic situation right now. But that's not doing anything to help the price inflation situation that is rising prices. And the most recent CPI data that came out late last week shows a big spike there. If you look at the month-to-month data, uh that shot up to over8% month overmonth uh in terms of the the overall CPI, you have to go back to 2022 to get a bigger reading than that. Uh 2022, much to my chagrin, was uh four years ago. Um so, it's been a while since we've had uh a big jump like that. And also, if you just look at the year-over-year change, that's up at 3.3%. You've got to go back to 2024 to do that. And essentially, you're going back to uh 2022 when you had those big 40 plus year highs in overall inflation. And you see some similar stuff as well uh in PPI. In fact, PPI numbers as producer price index is even worse. Now, this is prices faced by actual producers, right? The only prices that don't matter or that matter are not just the prices faced by consumers, right? If you are one of the millions of American small business owners, you know that the costs faced by producers are significant and can even be crippling. And those numbers, when you're looking at the year-over-year changes, you have to go all the way back to 2023 to get that. It's been basically the upward trend has been non-stop since 2023. uh in terms of PPI growth year-over-year. So what happens the is producers and those numbers are larger. So that's 4% is the most recent number that came out on Monday. The PPI increase was 4% year-over-year. Uh so obviously nowhere near the 2% neighborhood uh that they want for consumer prices, but the reason that tends to be higher is because producers will buy up goods and services that they need to create their finished product products, but they for reasons of trying to maintain market share will will do everything they can to keep their the prices that they charge at the end level as low as they can. So, you would expect to see lower consumer prices than you would uh producer prices, but those are all problematic in terms of economic growth, in terms of uh production, in terms of companies being able to actually accumulate capital, invest in capital, grow their businesses because they're quietly having their wealth siphoned off by these high high producer prices. And I know consumers are complaining all the time about how how they're being gouged uh by the producers by small business owners and such, but really for the most part those those small business owners are trying to keep prices as low as they can because they don't want to lose their customers. And at some point those prices just are going to have to go up and fewer people are going to shop there. Uh as they should, right? you shouldn't just keep buying stuff that's outlandishly expensive. Um, it's not a good place to put your money. But this, of course, is forced upon many producers by the government as they continue to inflate the money supply and more dollars are chasing goods. Uh, the prices go up and that's it makes life more expensive for both the producers and the consumer. So, we're seeing a clear upward trend in all of that. And if you look at the accumulated price growth since 2020 when all bets were off and Trump just doubled down on spending massive amounts of money and demanding that the Fed of course bal uh produce $6 trillion in new dollars to uh basically pay people to stay home from work and not do anything uh in order to conform with Trump's uh beloved stay-at-home idea where he tried the best he could to implement meant the mandatory stay-at-home orders and the business closdowns and all of that. Uh, which some people now try and say, "Oh, he didn't really do that." That's true because only the states could get away with doing that constitutionally, but Trump encouraged it every step of the way for the first several months. And it was his CDC where he kept Fouchy in power forever, it seems, uh, giving him a daily uh, bully pullpit to talk about, uh, COVID and all of that. And uh in order for Trump to encourage of course government vaccines and mandatory vaccines and all of that, the the economic outcome of that was massive amounts of inflation. And so thanks to the combined Trump Biden policies of COVID, we got huge amounts of inflation and no deflation since then. So prices have gone up relentlessly. They've even accelerated in recent months. And by any measure, whether it's CPI, core CPI, PPI, core PPI, all of that is at least 25% higher than what it was in 2020. And uh overall CPI is up at about it's up 28% and PPI is up nearly 30% at 29%. And if your income was keeping up with that, that's great. And for some white collar people, their incomes have indeed, especially if you're well established in your career at that point, uh your incomes have kept up. But this is just one example of how if you're at the if you're beginning in your career, if uh you are not lucky enough to be at the higher end of the income strata, then you probably are not experiencing a 25% increase in your overall income during that period. So you are in fact in real terms significantly poorer today than you were in 2020. And that's the reality for a lot of Americans. And so we look here at price inflation and it ain't going back to 2%. It's now been 18 months since the Fed was assuring everybody. Powell gets up and you'll remember Powell decided, hey, uh, the election day is almost here. It's late 2024, I guess. that we need to get our man Biden reelected or rather I guess to get Kamla elected because there there's really no other explanation for why they would uh cut uh interest rates the target interest rate in September 2024 unless it was some sort of electoral political decision because it was so clear that uh the target inflation rate was not about to be accomplished even though that's what Powell said. Oh, it's it's heading back rapidly to the 2% goal. We're going to be there any day now. So, now we have to temper the economy and we have to cut a little bit more because we're worrying about job growth and all of that sort of thing. Completely wrong. Couldn't have been more wrong because here we are more than a year and a half later and it's never even gotten close uh back to 2%. In fact, I would suggest that the real de facto uh goal for the inflation rate is 3%. Now, that that is what the Fed is doing because you'll see that even as in later cuts and Fed policy overall, even as you started to see inflation rates actively head back up, the Fed was cutting into that anyway. When all the indicators was that the inflation drag and not been slayed, the Fed was actually cutting the target rate. Why? because it it makes sense if you look back and you and you think in your mind, well, what if the target interest rate was actually 3%, not 2%, that actually makes a lot of sense now. So, they've increased that significantly in real terms. So, they're just lying to your face essentially at this point when they say that the the target rate is 2%. And they clearly don't they don't care that that that people are losing tons of their purchase purchasing power month after month, year after year. And why? Because really the matter here is making sure that uh interest rates on treasuries remain low. And this comes back again to quantitative easing. The real goal here is to purchase treasuries as needed in order to make sure that as the federal government dumps trillions of dollars and it's estimated that they're going to be spending a couple of trillion extra on top of usual the usual defense spending for this Iran war in the coming year or two that they're how are they going to do that? Well, obviously it's going to be deficit spending. So, they're going to have to dump a trillion or two extra. That's on top of the usual deficits which were already about 1.6 1.8 8 trillion per year under Trump. They're going to have to come up with a whole bunch extra on that, dump it into the global economy. And uh there will be buyers, but will there be buyers at interest rates uh that are low enough to make it feasible for the federal government to keep up with all of its usual programs? Uh the Fed the federal government does not seem to think that. And I think that's part of why the central government or why the central bank is back to purchasing 40 billion again every month in treasuries. Uh so that seems to be where we're at. There's huge amounts of new debt coming down the pike. Inflation is going up. The Fed should in fact then be raising rates or allowing rates to go back up, but they can't because they have to purchase new treasuries in order to keep the interest rates from getting out of hand. Uh so don't expect the Fed to actually care about the cost of living for normal people. Remember what the primary goal of every central bank is to finance government spending. That's why they were created. That's why they exist. They're there to keep cheap credit available to all national governments. That's all they really care about. All that talking about employment, maximum employment, price stability, that's all just political cover. That's just stuff they say in order to try and manufacture consent. uh for the central bank. So that's just one aspect of the economy that we're facing right now. >> And it's interesting um because I mean Kevin Walsh has made his entire you know assuming assuming he actually ever gets confirmed again be you stay tuned. Um but like one of the priorities that he has made in his kind of public cell on what his chairmanship would look like is oh we're going to we're going to normalize the balance sheet. But of course, like precisely for the reasons that you just outlined, Ryan, is that like that that in particular is going to be an extremely difficult thing, you know, you no matter what your your intent might be given the fact that again like you interest u you the the cost for for financing the debt right now is well over a trillion dollars. Um like you know this these are the the very real you know this is a situation I and that's why you know typically you know we we are very much nothing ever happens bros when it comes to uh any anyone talking about uh significant Fed reforms new personalities coming in. Um but that's going to be a very interesting uh dynamic that that he's going to inherit. um you know given everything that's going on right now and and of course right now I the biggest when it came to the economy the best thing that Trump had going for him as we've repeated multiple times over the last several weeks was gas prices and now that you know I know there's been a little bit of softening in the last uh last week relative to it was at at the peaks of the crisis but it's still well over 90 well over 30% of what it was prices are you know over $90 it's you know 30% higher than it was at the start of the war um you know that is something that you know every American fe feels right now that is something that's going directly into those production prices right now. That is something that when you know not inflation in the the you know the Austrian sense but price inflation is felt by normal people and that is one of the biggest things that are driving down those that are are you know particularly those firmly in the the middle class and and lower and like that is the biggest anchor that any presidency ever has and this a direct to continuing consequence of the military and venture >> right and I uh just wrote about it this a few weeks ago because it goes so much beyond so much further beyond gas prices if you dig into it. The amount of economic destruction that has already happened because of the war is substantial and specifically it is mainly in you know with those uh producer goods. So, it's stuff that hasn't really hit consumers yet directly, but will at some point. And yeah, you're like that's an important thing to stress and you mentioned this in your recent article, Ryan, that it's not actually inflation when you have like these big supply shocks because inflation, we're talking about a general rise in prices. And that can only happen if you're affecting the monetary unit. um when you have you know some goods going up in price that's going to have uh defl or not deflationary but the the price of other goods like complimentary goods are going to decrease so it's not actually technically inflation but the way that they measure it you know mainly with like CPI PPI yeah picks all this up so it this is what I was talking about early in the war um it puts the Fed in kind of this interesting situation where it's just kind of a question of which one takes off first because yeah right now We're seeing high prices that are uh mainly coming from energy but are pretty quickly going to be coming from other areas like uh the fertilizer um crisis is a huge deal but that's probably not going to hit food markets for a couple of months here because it's affecting farmers when during the planting season but you know it takes months for that to all work its way into like an actual finished food product and that's just going to be absent down the road which is going to mean very high prices. So you have like all these various uh rises in price that you know are picked up as the CPI going up as price inflation. The Fed's supposed to you know guard against that and not let things run too hot when price inflation is going up. But the reason that's actually happening is because of economic destruction. The opposite of economic production. You have all this stuff that has been destroyed or shut down. It can't just be kicked back up again very quickly. And that's going to mean there's not enough stuff available for people that need it. And that that means the world is poor. Like that is economic trouble that will become more obvious. Now, it's going to be a question like I kind of doubt that's going to be clearly tied to the war in the minds of most people, but that that's the fact like that's what we're going to be facing. And that by all indications, it looks like it's going to be some pretty substantial economic pain, which is of course when the Fed's supposed to come in and rescue the economy. And so the fact that they have kind of these two like the two things they're supposed to be guarding against, there are reasons to expect things to get worse on both worse on both fronts at basically the same time or, you know, because of the same general cause. Uh I I think it puts them in kind of a uh difficult position which I don't I have no sympathy for them on that front. But um I just think especially uh with all of the goods that are not directly, you know, not oil and LG like people are really underestimating how damaging even plastics. Plastics are so important for so many different lines of production. Like you know medical supplies, IV bags, syringes, stuff like that. Like you could just kind of go down the rabbit hole in any one of these things or like plastic piping for construction. like the fact that there will be less of this available than people demand is going to have it's going to impact all of us, it's going to be very painful. And yeah, when traditionally the Fed comes in and uh rescues the economy, like when something like that really starts to gain steam, uh you know, that's what we're used to seeing. But then if the if the CPI is going up and up and up because of this too, I mean, yeah, I I would expect them to do it anyway. like you're saying, Ryan, they don't actually really care about protecting the value of money or anything, but when it comes to the the optics of all the dual mandate and always looking for these two concerns, um I think it's going to become more obvious in the near future that no, they actually care about one more than the other. >> Yeah. Well, one of the stupidest things I've heard Trump say in terms of economics in recent days, we have to clarify this particular topic of uh the economy because uh there were probably vastly stupider things said about foreign policy uh but saying that the the blockade of the straight, the closing of the straight, whether it's through the US's blockade or through Iran's closing of the straight through their own methods, that that would be good for America because America produces oil. So then everybody will just buy American oil and then Americans will be better off. Like that only makes sense if you are so dumb that you don't understand that oil is bought and sold in a global marketplace and that if there's less oil coming out of the straight, then that means people are bidding up the price of oil produced everywhere else and you are going to be paying a lot more for it. And so the global price of oil will go up significantly. And that's what people have to pay in this country for oil because people are free to sell it wherever the buyers are. And so the price will be bid up now thanks to monetary inflation. Not only will oil prices be bid up as you note Connor, but everything else will be bid up uh as well because there will be more money chasing a not only a stable amount of goods, not only an amount of goods that's not increasing at the same rate as the money supply, but actually probably a decreasing number of goods, which makes inflation all the worse. And uh so all that oil is going to be needed uh for everything around the globe. And the truth is America isn't even really totally self-sufficient in terms of oil. Americans do import oil because it's it's crucial to so many different sorts of goods. So they're going to have to be buying that oil in the global marketplace. The only way that even the Trump argument would work would be if you just banned uh oil exports out of the United States, which by the way, I don't say he wouldn't be willing to do, but that's just the sort of communism that I can see MAGA getting behind. Uh we're now going to outlaw uh the exporting of uh of goods uh related to oil or oil itself out of the United States. You know, private property be damned. Uh you don't get to sell that to willing buyers anymore. would be that I could see Trump doing that. Uh but that would be the only way of even making the Trump uh fantasy of the idea that uh Americans are somehow better off. Uh now obviously there's like second and third and fourth order effects. So it doesn't even really make sense uh even if you banned the export of oil. But I could see how it might at least seem plausible on the surface. But if you're not going to ban exports, then his comment about how uh a declining uh global production in oil somehow benefits Americans is just crazy talk. Uh but that seems to be where we're at right now. But all of this, as you note, feeds into an article I sent around to you guys the other the other day. Consumer sentiment plummets to record low as Iran war jacks up inflation. Uh right. The Iran war is not jacking up inflation as you just noted, Connor. It's actually monetary uh production, monetary growth that is creating a general increase in prices. What you would just see is is an increase in some goods and then a decrease in prices in other goods because people would have to transfer their money to only those goods that where there are now fewer of them, just oil related goods. But since there's so much monetary inflation, you're going to see all prices go up. But the price Yeah. the price of living is going up. There's so much uncertainty because of the war and now of course the administration's goals in the war are just to get back to what the status quo was before the war to open the straight back up straight that was open before the war and then Trump got caused it to be closed and now he wants it open again and that these are major economic destru uh disruptions that are very problematic to people and so you get consumer sentiment as at the lowest level you've ever seen and of course it's not just Iran war inflation, it's employment. If you look at the employment situation as well, that's really not good. Uh we can look at at hires. If you look at overall hires released, I believe last Thursday, then you have to go back to 2014 unless you so you would exclude COVID on this because that's just such a has nothing to do with normal economic behavior. you got to go back to 2014 to find a period where you had fewer hires. And then if you look at actual employment situation, there are two surveys of employment. There's the establishment survey and there's the household survey. Uh and these are two different measures that I guess we don't really have time to get into in any detail, but the the point I'm going to make is that neither of them looks very good right now. often they they're divergent and you might be able to find some good news on one of them. But if we look at say the household survey, which is a an actual phone survey, calls people and asks them, "Do you have a job?" Uh, and they say yes or no. That's where they they determine what the unemployment rate is because they've determined, are you looking for a job? Do you have a job? That sort of thing. Well, those numbers are all down. In fact, down uh by over the last year, 661,000 jobs, it looks like uh if and then over the last three months down by it looks like let's see 83,000 of those positions per month over the last three months. So there's significant deterioration there in the household survey. And then normally the better news comes out of the establishment survey which is just a uh a survey of big employers and they ask them just do they have jobs. Doesn't matter if it's part-time or full-time. Hey, do you have jobs there that uh you're adding? And the answer is yes or no. And we're looking there and normally a healthy number there is going to be at least uh over 150,000 something like that. But if we look at what's going on there in recent months, we're looking at 15,000 average over the last 3 months. And over the last year, a total of 260,000, which comes out to, let's see, looks like 21,000 per month in terms of job growth. These are poultry tiny numbers in terms of job growth. and and it can be seen in the fact that the unemployment rate is basically flat. They get all excited because it goes up like a tenth of a percent or something. A lot of that's just driven by people leaving the workforce. Uh but when you look at hires being in the dumper, you look at these tiny job numbers, uh you look at what the situation is with unemployment and labor force participation, there's there's every good reason to believe that ordinary Americans are aware of what the employment situation is or where it's headed. And that's part of why consumer sentiment is so bad. Uh there's really very few bright spots here in this employment data. What an interesting point here though uh that maybe we could uh maybe we need to ask more questions about this is how the markets respond so ridiculously to this sort of data. Uh so they they for example this most recent uh month they they release some new jobs data that was last week and they say oh hey we added more than 100,000 jobs the market says oh great and but then we all know how this dog and pony show works. They come back a month later and they revise down those numbers significantly. That was the most recent number here was a downward revision of it looks like about 41,000 was the downward revision to already negative numbers. And so that created basically negative job growth in recent months even with an upward revision in January. So these numbers once you get past that first initial job number release which always tends to look much much better than the reality and then it makes uh the markets say oh look I I guess the the economy is firing on all cylinders again and then the next month comes they revise down the number significantly. It's no surprise to those of us who are paying attention but the overall jobs numbers then don't even take any notice because it's not a headline number. So, it's sort of this song and dance that we're constantly seeing and you you can no longer glean any information from how the market responds to this stuff because a sane person can see how oh the the negative revisions come later so I need to take all these numbers with a grain of salt. The markets don't seem to be behaving that way. Just like no matter how uncertain the global economy becomes, no matter how uh many times Trump says he's going to close the straight or he's going to escalate the war, the S&P 500 just keeps going up. So these numbers apparently have nothing to do with reality. And I find that I find that kind of curious. Um, and it's definitely a change in the situation from what we had 20 years ago where the market seemed a lot more connected to the actual real world. Hey, for all this doom and gloom, I I think the S&P 500 hit a a new high today. So again, it does just go to the the disconnect. And of course all of this you know the combination of um you know both both the the stagnant job market and also the element of you know hey if you're if you're heavily invested in stocks you're having a good day right now. this this you further just you know you you know divides the the generational experience of of this economy which again I think is one of the most important kind of meta narratives of you know not just American politics but global politics right now because like it's it's this generational conflict which is the the natural byproduct of this you know financialist system that we have um you know is is you know that is a source of of major turmoil again not just from an American standpoint but really a global standpoint right Yeah. And just the disconnect I that's something I've been reflecting a lot with this war because it's I guess we're just so used to I mean at least for me the whole time I've been paying attention to the stock market and the the trading it's always felt so decoupled from the actual economy. And like what I wrote about in that piece is like an important point that is so often left out and people can just forget is that the entire point of the economy is to produce stuff that people want to buy. and you know value enough to pay for and yet when you don't really focus on you know the actual business that's happening but you look at the the stock market or all this stuff I mean it's of course it looks like a casino to most people it's like all these this pump and dump happening constantly that and certainly as you're adding in um all the new kind of interesting uh dynamics with uh the these basically um betting markets and how like the you have these people that are betting like huge amounts of money right before the president announces some, you know, development in the war and then the thing goes crazy and people are making insane amounts of money. Like I can understand why the average Gen Z person who's struggling sees all this and it's like that it's all fake and because a lot of it is fake but then but at the same time like everything I was talking about before we have real economic destruction that's going to actually cause like real problems that is important to talk about and to point out and to prepare people for. But when you have this sense that you know it's just um it's essentially just numbers on a screen and like it's that that disconnect is so damaging and really damages the ability to actually like pivot into a much more productive direction here which is um concerning and it's it's a reason I I don't obviously sympathize but I understand why young Americans are like turning anti- capitalist because this is their whole understanding of what capitalism is um is essentially people insider trading couch and like betting markets and like the whole thing's just it's just like this illusion that's so decoupled from reality. But the fact is reality is still here and it's still impacting all of us and uh yeah that it's it's hard to have a nuanced take on all this um this day and age and in this media environment but um yeah this is a nuanced issue and that like there are some serious serious issues with the current economic setup but like the answer is not communism. Not to throw all of this out like, oh, this is markets and so we need to pivot completely away from that, but um it's just I can understand the the drop in consumer sentiment because it's like it's not even just oh things are bad right now, but there's like there's no sense of hope for like things are going to get better at some point. It's just it's so it's almost like you couldn't design a system that better for it, you know, it to lead to some kind of like economic populist revolution. And that's just that's what we're living through. >> Yeah. I mean, it's very real. The the the cassinification of the economy is is very real. And we saw like getting and I'm not necessarily even trying to critique this particular change. Like I'm, you know, but but like, you know, there's there's talks about removing the $25,000 limit for like day trading. And again, I'm not saying that's that's good or bad, but but it plays into like this larger view that that that the best way to to get rich or the the the most sustainable way or the the the only way to to really make major gains in the modern economy is to play it like a casino. And that's what appeals a lot of people to to the stock market. I mean I remember uh you you got you the bar school bar bar school sports people becoming stock analyst analysts uh during co and with with all everything that was happening during then but like it is the democratization of this casinoification of the economy that is becoming very very normalized um you know whether that's directly through the stock market or playing similar sort of macro trends with ksh shei I mean this is it it is incredible how quickly this has p picked up and normalized >> well with you saying all that I just realized how much more stupid the world would have been in 2007 or so if we had had social media to the extent that we have it today. Because it was bad enough then because the the bag boy bagging your groceries at the grocery store was also a mortgage broker and owned 10 condos and was a investment guru at least in his own mind. And everyone was telling you everywhere how they had figured out how to make uh countless piles of cash from investing in real estate because real estate always goes up, right? And we've got the same level of dumbness coming from uh social media now, except now it's magnified because it goes out over all of these social media platforms. In 2007, you pretty much had to run into these people in real life. Uh or they they were buying like 3:00 a.m. time slots on TV. Uh this was back when people used to like just switch around the dial, watch TV and you would see this stuff and uh it was just constant bubble talk, right? Oh, you got to buy now, you'll be locked out forever. Buy this stuff. It's the same way now with our financialized economy, right? That was just an earlier stage of financialization. Now we don't even bother with real estate anymore. just buy buy stocks, buy some sort of odd new creative asset, quote unquote, that you can get. And you got people at Bar Stool Sports who are now the experts on what it is that you should be buying. And they also tell you that you're just a sucker if you just put your money in there and don't don't leverage it to uh to the to the gills uh in order to put yourself into a very um unstable situation where you might actually have a margin call rather than just putting money in stocks and holding that then you're you're just dumb bro. You're not uh leveraging it as much as you could. So I do think that's a that affects young people I think the most too because they don't know better. They don't know that these are con artists trying to get them to put themselves into a high-risisk situation. Uh where they might end up in deep deep trouble. Uh so I do feel bad for the young people have to face this because we I remember how it felt in 2007 or so when I was what would I have been back then around 30 years old or so. Uh so that was that was grim. you did feel like you weren't doing it. But then you met the person who foreclosed on 10 properties and all of that stuff and you didn't feel so bad anymore. Uh but when you're looking at the economy, you think, well, it's never going to end. They nothing ever changes, right? They'll just keep they'll find some other sneaky way to make the economy uh somehow bounce back. They'll somehow enrich the billionaires even more and they'll somehow make number go up and everything will be fine again. Uh the thing is is that things don't change until they do. And that was the situation in uh say the Soviet Union in 1986, right? Soviet Union is going to last a thousand more years, folks, right? You can't act like it's never going to go away. Or Americans in 1774. Nothing ever changes. Be part of the British Empire for a thousand years. Or uh French nobility in 1788, right? We'll be in charge forever. Everything's fine. I don't know why these people are complaining. Um things don't change until they do. And now you what you'll get when you get the con artist stock people that are like, "Well, bro, would you just take all your money out of the stock market then, man? You're not even going to No, I I don't I'm not first of all, I'm not going to retire for decades." So, it's not like if if if that all that stuff loses 50% value, whatever. It's not going to affect uh me in the near or medium term. Uh but you do have to just face the reality that history is not this serene thing where everything just slowly improves all the time and regimes can always stay in power. Right? Though you know this not even Parto who is a hardcore pessimist thought that regimes can keep it going forever. Right? They make mistakes. they become decadent within even the ruling class and they screw it up and then everything comes falling down and they get replaced by a new governing elite. Uh so it happens. Uh but I do continue to talk to people and they're like no it's going to be fine. Everything's going to be fine. The dollar will be around forever. The dollar will be the dominant currency for the next thousand years. There's there's no change coming. I mean I don't know how how soon stuff will happen. I do know that if you don't have some sort of major change in the economy that helps to uh bely the current regime's ability to control everything and make everything fine all the time. If you don't get something that makes that obvious that they're not in fact able to manage everything fine, you're just going to get a more uh and more tyrannical ruling class, right? because they'll be able to trade in and bank on this mirage of wisdom and the ability to manage everything. So, you really have kind of two choices. You can choose between tyranny or you can choose between temporary economic displacement. And economic displacement will happen eventually. Uh but I don't know when that's going to happen, but I can guarantee you in the meantime you'll get more tyranny. So, we'll see what happens. you could end up with more tyranny after the economic displacement because people will adopt the wrong type of regime afterward. They won't learn the lessons and that's certainly a possibility. Uh but we shall see on that. So I I just can't make a prediction. I don't know what's going to happen, but I can tell you that things only last until they're over. Well, and and you know, you know, I know that the uh the topic of um kind of uh Orban and Hungary can can go into weird directions, but I I do think it's interesting that, you know, what we've heard for, you know, a decade plus from, you know, from from very serious people, right, was how Orban had created a, you know, basically a dictatorship, you know, a a false democracy and all of that. And he had he had, you know, created this massive propaganda state for himself. and and with his election, you know, it it was I think, you know, a lot of it was economic factors that even a regime that had built itself, you know, with with the intent of staying in power um you know, lost an election um because of economic headwinds. And again, I I I think there's a there's a lesson there that would be lost thankfully on on on those in power. But I but even if if an Orban can fall in Hungary because of of economic headwinds and you know state capacity and everything like that um you know those the amount of institutions and castles you build for yourself um you know they they those two can fall in pretty short order >> right and I the the important step for the American people at least is to realize it's not a partisan thing. It's not the the the Democrats have Democrats have it figured out and the Republicans are messing everything up or vice versa. It is people like Jerome Pal. It's the the people at the Fed and the mostly faceless people that are the actual regime that have ruined all of this. And the politicians are kind of a distraction. So no, like uh another blue wave in the midterms would not be regime change, regime collapse. It's just that's theater to keep you distracted from the actual regime. >> All right. Well, we'll go ahead and wrap up with that observation. Um, always always ending on a Oh, wait. No, it's Radio Rothbart where we always end up on a downer note. We're more optimistic here at Power Market. Uh, well, >> as you can tell from this episode, >> right, >> usually. >> So, this this is one of our happier episodes. Uh, but at least finally we got to talk about something other than the war for a while. Boy, I think we had like three episodes in a row or something on that because it just dominated everything. But there was all this economic news in the last week. Um, >> luckily the war is over now, Ryan. >> Oh, thank >> for the 17th time. Yeah, >> thank goodness. Um, the Yeah, don't don't go listening to any John Mirshimer videos on YouTube if you want to have a happy day. I can tell you that much because that's a that's always a constant down. I think he's actually on vacation for a couple of weeks. So, uh, you might be able to get some happy news, uh, as far as the war goes for a little while. Uh, but I'm sure we'll be back to that as as time goes on. But the economic news wasn't even that happy. It's just a recession isn't nearly as awful as say, you know, a major war uh in a country with 90 million people. That sort of thing. >> It's all relative. Yeah. >> Right. Exactly. Right. I don't have bombs ramming down in my house or anything like that. Uh, so thank you gentlemen for joining me today. Thank you everyone out there for listening and we'll be back next time with more. So we'll see you then.