April 28, 2025

2008: What Really Happened plus Tariffs and Trade – Liberation or Damnation Day?

2008: What Really Happened plus Tariffs and Trade – Liberation or Damnation Day?
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Season 2

Todd Sheets,the author of 2008: What Really Happened graduated with honors from the University of Iowa and won the prestigious Elijah Watt Sells award on the 1981 CPA exam before embarking on a career in investment banking. His book offers a definitive look at how the financial crisis of 2008 actually happened, peeling away years worth of misdirection from the expert class. We'll also discuss President's Trump's Liberation Day vision for America.

Bill Martinez Live is broadcast live Mondays at 3PM ET on W4CY Radio (www.w4cy.com) part of Talk 4 Radio (www.talk4radio.com) on the Talk 4 Media Network (www.talk4media.com). Bill Martinez is viewed on Talk 4 TV (www.talk4tv.com).

Bill Martinez Live Podcast is also available on https://www.billmartinezshow.com, Talk 4 Media (www.talk4media.com), Talk 4 Podcasting (www.talk4podcasting.com), iHeartRadio, Amazon Music, Pandora, Spotify, Audible, and over 100 other podcast outlets.

Transcript
WEBVTT

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The topics and opinions expressed in the following show are

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solely those of the hosts and their guests and not

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those of W FOURCY Radio. It's employees are affiliates. We

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make no recommendations or endorsements for radio show programs, services,

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or products mentioned on air or on our web. No liability,

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explicit or implied shall be extended to W four CY

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Radio or it's employees are affiliates. Any questions or comments

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should be directed to those show hosts. Thank you for

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choosing W FOURCY Radio.

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Oh we got a great show planned for you, and

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a great guest, Todd Sheets is going to be joining

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us in just a moment. Great book that he wrote

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that came out last year two thousand and eight. What

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really happened?

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Huh?

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Think about that, you know, And that's a big question

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still understanding the great financial crisis. And you know, typical

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of anything that happens in the government, they always want

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to try to whitewash it right and put their spin

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on it to kind of confuse us and not really

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give the whole skinny of what happened.

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I know that kind of surprises you, right.

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We haven't had a lot of experience in the recent

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decades of you know, this fake news and what the

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government here they are? They want a department of misinformation.

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That's just basically what it amounts to is you know,

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trying to do brain surgery on themselves.

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They just, you know, they can't help themselves.

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Everybody is so fixed and ideologically predetermined that they've lost

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track of what the truth really is and what truth

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how the truth serves us. And that's what it comes

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down to. But you know, when people deceive us, they're

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not interested in serving us. They're interested in covering their

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back ends and their own interests and not we the people,

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not America. And this has been the problem with our

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politics for quite a while. And of course now the

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dynamic that you have with journalism jumping ship and abandoning

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their reason to exist and violating the journalistic ethos of

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pursuing the truth no matter where it leads and giving

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us an objective viewpoint. I mean, this is going to

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be really tough. I think, you know, generations ahead will

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look back in this error and go, boy, you know,

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I just can't make sense of this. It is such

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a mess. And even if we go and utilize the

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data that has been reported here. It just it's it's nonsense,

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it's it just doesn't seem valid. And their instincts are

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going to be correct if they have a familiarity with

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the truth. But if they don't, then you know, they're

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going to be that much further off the mark because unfortunately,

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the mainstream media has abandoned ship. As I said, they've

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forgot about objective reporting, and there's lots of pressures. I

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was speaking with another guest this morning about this issue,

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is there's lots of pressures on the media, especially on

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the Beltway, because everybody wants to be a part of

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the reindeer games, right and if you are on the

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side of where power exists. So right now, the Republicans

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are in power. So if you're pro conservative, you know,

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the door seemed to open a little bit easier for you.

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And if you're liberal, you're going to run into problems,

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which is obvious. We saw what happened with ap CNN

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and other liberal entities that have been purveyors of fake

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news when it comes to conservatism. Look at I don't

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mind people reporting, you know, but you know, let it

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be known it's an opinion, and don't present something as

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a fact, and that's all the way around.

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See, everybody's gotten really fast and loose with the facts.

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You know, you have a right, you know, to your opinion,

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but not the facts, because the facts should not change.

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They should be consistent. I think we can agree on

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that right. And you hear from politicians and you know

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the way they present things Hakim Jeffreys and others as

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if things are the fact. In fact, we had a

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president not that long ago who insisted that that science

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there were certain aspects of science like global warming. He says,

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well that's a fact. Well that's not even a scientific term.

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You know, it could be a law, but not a fact.

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But see, these are how these terms are so loosely used.

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And he even said at one point, you know words

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have meaning. Well yeah, okay, that's true. And that was

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the thing that was so dangerous about him in particular.

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It was that he could be he could be truthful

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at times, but it could also be very deceptive. You

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just had to see which side of his mouth he

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was speaking from. And that was the thing that was

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so frustrating because I have no tolerance for people. I

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want you to be consistent, and I have more respect

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for you if you just a liar all the time,

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as opposed to somebody who is trying to, you know,

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be deceptive and uh, you know, tell you one thing

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and do something else. And and I get the pressures. Uh,

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I really do, even though I haven't been on the Beltway,

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but I can. I can empathize with what some of

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these uh, you know, some of these reporters have to

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deal with. You know, they claim that they're pursuing the truth,

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and here it is. They lied to us, for example,

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about Joe Biden for four years. Now all of a

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sudden they want to be honest and say, oh, yeah,

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we knew that he was he was slipping up. Yeah,

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you were the same ones that were echoing, uh, the

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the advisement and and the description of Joe Biden being

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sharper than attack and he added all together when anybody

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with even bad eyesight and poor hearing could see that

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Joe Biden was losing it. And now they want to

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act like as if they were there. Even about COVID

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for example, Oh yeah, you know, wat you didn't even

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spend a day in YouTube jail. You know, we we

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spent days in YouTube jail, and we were castigated and

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for what and we kept saying, look at this is dangerous.

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This is dangerous for the American people. When you're talking

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about health, you're talking about anything that has to do.

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Like I said, with these major issues, we need to

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know the truth. We need to understand what's going on.

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If we're going to go to war, Why are we

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going to war? What? What are the facts? I mean,

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you're going to be spending my taxpayer money? Then I

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think I have a right to ask some questions and

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get some answers as to why this is justified.

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And here it is.

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I mean the pattern of America, which you know Dwight

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Eisenhower warned us about the military industrial complex because they

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are a beast. The industrial complex is a beast that

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needs to be fed, and it's insatiable, and.

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It loves the war.

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Hasn't seen a war that hasn't fallen in love with.

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And you know, next thing, you know, we're getting drawn

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into these endless wars with no end in sight. And

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then and then down the road you get the question,

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go why are we fighting this? No, you forget even

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why you're at war. All you know is that you're

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at war, killing people and destroying things and wasting a

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lot of money, and after everything is all said and done,

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you leave eighty billion dollars worth of military equipment behind.

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People are dying in your wake as you exit once again,

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as you cut and run. It's not a good look

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for America. But you know, hey, this is and this

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is what we're dealing with, sadly, and it's so it's

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so unfortunate and frustrating that we're ending up in that

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kind of situation. So you know, it's it really I

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put pressure on the media that the media has to

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find its heart and soul again and they cannot side

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with power because once you've crossed that line, now you're

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not really a reporting agency any longer. What you've become

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is a propaganda arm for a political party. And this

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is valid for both sides, whether you're rooting, you know,

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for Republicans or Democrats. We need the media. I mean,

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there was a reason why our founding fathers cherished our

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First Amendment, right, why it was so critical. But embedded

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in that First Amendment right was the general consensus that

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we would be honest, that we'd be truthful. And once

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truth is compromised for whatever reason, you know, somebody buys

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you off you know, they pay you money or they

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hold up a carrot and say, hey, look at you

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get to hang out with the big boys here, and

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you get to go to all the reindeer games and

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the cocktail parties and everything like that, and all you

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got to do is do our bidding. Once you start

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doing that, then you know, what good are you to

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the American people. You've given them a false narrative and

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you end up putting us at each other's throats sadly,

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and that is that is beyond frustrating that you know,

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this is but uh, you know what they've done to us,

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and whether it's the media or even these social media platforms.

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Uh, as I've mentioned to you before.

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I mean here Mark Zuckerberg and you know before it

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was Twitter, uh and these other social media platforms.

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You know what did they do?

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I mean, they they buckled, they buckled under and uh,

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it's just it's just unbelievable.

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You know, and.

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I don't you know, I don't know. I mean, it's uh, I.

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Said, it's it's frustrating that they and I say the media,

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but anybody that that pretends that they're objective and that

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they're giving us the whole truth and nothing. But but

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then along the way, for the sake of power and

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control and influence, uh, they sell themselves out and at

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what costs? You know, uh, here we are. I mean

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it's amazing to me. You know, you see this this polling,

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the comes out and you've got you know, forty percent

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of the merit of America against sixty percent of America.

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I mean, these that's that's that's pretty crazy numbers when

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you think about it, and you go, Okay, what's going

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on here? I mean, is the forty percent in the tank?

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Are they just so much supportive of these things that

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really are anti American? And I say that only from

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a standpoint that you know, who doesn't want our government

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to be efficient?

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Well, what's wrong with that?

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What I mean is it okay to spend your even

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your great grandchildren's money to people that don't even they're

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not even alive yet, they haven't been born. And I

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guess that's okay, and that's and we shouldn't we shouldn't

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be outraged about it.

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I mean, this is just incredibly you know, frustrating. But

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you got forty percent of the people that are angry

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and upset because of you know, you can say Trumped

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Arrangement Centerm if you want, uh. And of course that's

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carried over into Elon Musk. And here's Elon Musk.

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Yes, he's been very wealthy, but it wasn't because somebody

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gave it to him. He's worked his tail off and

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Donald Trump leveraged you know, what he had, which is

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nothing different than the Kennedy's if you remember. I don't

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know if you knew this about the Kennedys, but the

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Kennedys were rewarded, I mean upon their birth.

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I think.

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Joe the father would put like a million dollars into

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their account and they would use that kind of as

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seed money for their careers and education and that sort

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of thing. So what Donald Trump has done is nothing

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different than any other you know family has done. And

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you know, of wealth that they can invest in their

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children and hopefully their children spend that investment wisely, and

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Donald Trump has leveraged it wisely. I mean he's he

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been perfect. Nobody's been perfect. I mean Kennedy's aren't nobody's perfect.

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You know, we make mistakes. But anyway, look, Todd Sheets

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has joined us right now, and I want to bring

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him on to talk about his book two thousand and eight,

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What Really Happened, and also talking about free and fair

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trade tod Sheets.

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Welcome, Michelle, good to have you with us. Bill.

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Thanks, I'm delighted to be with you today.

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Well, I'm sorry for a little bit of the technical

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difficulties we had, but that's okay.

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We're going to make the most of this time that

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we have.

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First of all, before we get into tariffs, I want

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to talk about your book two thousand and eight, What

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Really Happened? Give you a chance to tell this new

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audience that we haven't here toofore had a chance to

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interact with and give them background of your book and

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why you wrote the book.

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Yeah. So I got into writing the book a long

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time ago, actually, when the crisis came along. As I

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told one of my children at the time, it felt

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to me like a lot of the assumptions I had

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operated under during all of my business career kind of

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being thrown out the window, and we were totally changing

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the relationship between government and economy in ways that I

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didn't understand. And you know, I need to do a

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deep dive into this. So I spent several years researching that,

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going back throughout history, and then another couple of years

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specifically focused on the financial crisis, and then that's what

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led to the writing of the book here.

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Yes, well, and the thing is is that we're still

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paying for it, aren't we.

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Time well, very much so. I mean, you know, one

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of the key things is we didn't learn the right

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lessons from what happened. And if you don't learn the

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right lessons, you can't change things and create the right

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policies to keep it from happening again or in a

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slightly different way maybe, And so you know, the lesson

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that was generally taken away was that this happened because

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of a gradual trend of deregulation that went too far

253
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and allowed the system to run crazy and run amook,

254
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and some of those things about the system going crazy

255
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did happen. But what we have to ask ourselves is

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why did that happen specifically at that point time? And

257
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does that theory is it consistent with the facts of

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what really happened in the housing bubble. And if you

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go back and study the bubble itself, as I've done,

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and as I lay out in the book, what we

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find is that bubble began in nineteen ninety eight, when

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housing prices suddenly went off trend. All of a sudden,

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We saw a huge escalation in housing prices that was

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unlike anything else that we had seen before. And it

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stayed that way for four consecutive years. So that's not

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like a gradual change. This is a sudden change from

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the history. And then in two thousand and one we

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see it.

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Let me ask you, when it made that radical change,

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why did it do then?

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Yeah, So that's the other thing in the book is

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I went back in. What we found was that Fanny

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May and Freddie Mack, the two government sponsored enterprises special

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privileges designed to enhance mortgage access for low to moderate

275
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income people, were basically created in their modern form in

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the late sixties and early seventies. At that time they

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were very small, but because of the political privileges that

278
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were extended to them, it gave them a competitive advantage

279
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versus everybody else, and over the course of decades their

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market share grew and grew, until by the mid nineties

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they were well above forty percent of the housing market

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finance that they effectively controlled. And so that was a

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change we had never seen. And then, beginning in nineteen

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ninety eight, the exact year that the housing prices took off,

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Fanny and Freddie doubled their growth rates. They had been

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growing by about seven percent a year, and all of

287
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a sudden, they started growing by about fifteen percent a year.

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And I go through a bunch of different analyzes that

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basically show conclusively that this was the trigger for the

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beginning part the first four years of the housing.

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Now, the demogram effics that Freddie and Fanny were addressing

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were minorities by and large, right.

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To a very large extent.

294
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Yes, okay, so that became a sensitive issue, and maybe

295
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that caused people to be a little bit blind to

296
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what was going on because you, as a finance expert,

297
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you would say, whoa, we need to hit the brakes here,

298
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and you didn't need to wait for it to get

299
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to have those kind of dramatic increases. You started to

300
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see as you're looking at the data, you're saying, WHOA,

301
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something's you know, we need to be concerned about it.

302
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But you know, typical of things that get politically mired,

303
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people can be blind to it and before you know it,

304
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then you've got a serious problem. And then worse yet,

305
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you look to the government to give us the to

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solve the problem that they created.

307
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Yeah, exactly, I mean, and you're exactly right about this.

308
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I mean, this ended up hurting the people that it

309
00:16:57.960 --> 00:17:02.360
was supposed to help. Unfortunately, happens over and over again.

310
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So and we see it. It's you can follow the

311
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housing policy which was coming out of Washington. Fannie May,

312
00:17:10.359 --> 00:17:13.640
who helped initiate this, was run by a minority. Yes,

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00:17:14.119 --> 00:17:19.000
the George Bush administration. You know, they talked about increasing

314
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home ownership among Hispanics and others and those types of things.

315
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Well, you had Bill Clinton before that and that question,

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Oh everybody needed a part of the American dream. But

317
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it was like, you know, okay, I think we should

318
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all have a shot at it. But if you're not qualified,

319
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then at what cost?

320
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Yeah? And the problem is is when you start pushing

321
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this and then you create these high rates of appreciation

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in housing, which were then made even worse in the

323
00:17:46.519 --> 00:17:50.599
early two thousands by federal reserve policies, what starts to

324
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happen is you know people think, well, they stop thinking

325
00:17:53.720 --> 00:17:55.839
about this, like, oh, this is a long term source

326
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of wealth. You know, if I buy it and I

327
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hold for ten, fifteen, twenty years, it'll grow slowly over time,

328
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and all of a sudden, it almost starts to become

329
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like a casino game where you've got to get in

330
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on the action. And that's exactly what happened as a

331
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result of Fanny and Freddie first, and then the Federal

332
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Reserve making the critical mistake when they pushed interest rates

333
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down so low in the early two thousands. You know,

334
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it added fuel to the fire that had already been started,

335
00:18:24.200 --> 00:18:27.119
and then that's what pulled so many of these unsuspecting

336
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people who were supposed to be helped by all of

337
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this in at the worst possible time. And the numbers

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on foreclosures were like something like four million homes for

339
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oh that period of time when it all.

340
00:18:38.559 --> 00:18:41.880
Fell apart and collapse exactly. And you think about these

341
00:18:41.920 --> 00:18:45.240
people that suddenly they're homeless.

342
00:18:46.119 --> 00:18:49.519
Yes, actually I've spoken to people who went through that.

343
00:18:49.599 --> 00:18:51.400
You know, they had a business going, they had things

344
00:18:51.440 --> 00:18:54.160
going on. You know, they bought a home maybe that

345
00:18:54.200 --> 00:18:58.559
they couldn't really afford, and then this collapse happens, there's

346
00:18:58.599 --> 00:19:01.680
a downturn in the economy, they become homeless. You know,

347
00:19:01.759 --> 00:19:06.200
there's there's thousands and thousands of people working in construction again,

348
00:19:06.319 --> 00:19:11.079
low to moderate income working class people in construction, in housing,

349
00:19:11.599 --> 00:19:14.079
in you know, the mortgage industry who are laid off

350
00:19:14.079 --> 00:19:16.920
as a result of all of this. There's people whose

351
00:19:17.359 --> 00:19:20.920
four to oh one k's are invested in these major

352
00:19:21.359 --> 00:19:25.359
financial institutions, a number of which go completely broke during

353
00:19:25.400 --> 00:19:28.880
this and so you know a portion of that savings

354
00:19:28.960 --> 00:19:31.680
is wiped out by the losses that are experienced by

355
00:19:31.720 --> 00:19:33.680
these Exactly, it's a huge disaster.

356
00:19:34.000 --> 00:19:38.079
Well, and and then you had the adjustable rate mortgages.

357
00:19:38.640 --> 00:19:41.079
They contributed to this as well because it gave people

358
00:19:41.079 --> 00:19:43.920
a false sense of security that they could afford a

359
00:19:43.960 --> 00:19:47.079
lot more home than they actually could because maybe you

360
00:19:47.079 --> 00:19:49.319
were okay for five to seven years, but then all

361
00:19:49.359 --> 00:19:53.160
of a sudden, the adjustable rate kicked in, right, Yeah.

362
00:19:52.960 --> 00:19:56.680
And that's exactly. It's a perfect point because that's what

363
00:19:56.759 --> 00:19:59.680
the FED did. You know, at that time, the fed's

364
00:19:59.680 --> 00:20:03.200
control of interest rates was focused on short term interest rates.

365
00:20:03.839 --> 00:20:07.640
And when when the tech stock bubble collapsed, which the

366
00:20:07.720 --> 00:20:10.799
FED had played a role in blowing and creating that also,

367
00:20:12.039 --> 00:20:15.599
the FED reacted in two thousand by pushing short term

368
00:20:15.680 --> 00:20:19.240
rates down low. And when short term rates were pushed

369
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down below the rate of home appreciation, that was a

370
00:20:23.039 --> 00:20:27.720
historically unique thing that gave people the you know what

371
00:20:27.839 --> 00:20:31.559
looked like a great opportunity to leverage up the returns

372
00:20:31.599 --> 00:20:33.640
on a home. So a home might be growing four

373
00:20:33.720 --> 00:20:36.400
or five or six percent a year, if you've got

374
00:20:36.400 --> 00:20:39.000
a lot of debt and it's on a variable rate

375
00:20:39.079 --> 00:20:42.119
mortgage with an interest rate below the rate of home appreciation,

376
00:20:42.799 --> 00:20:45.799
then that's what you know, creates these fifteen twenty twenty

377
00:20:45.839 --> 00:20:49.079
five percent a year increases in your equity investment. And

378
00:20:49.400 --> 00:20:52.359
that's where the Fed blew it. They didn't understand that

379
00:20:52.480 --> 00:20:56.240
they were creating this very unique incentive to buy homes

380
00:20:56.319 --> 00:20:59.000
leveraged up with short term financing. And again I go

381
00:20:59.079 --> 00:21:01.480
through all these statistics in the book, what you see

382
00:21:01.920 --> 00:21:05.839
is in the second phase, this what I call the

383
00:21:05.880 --> 00:21:08.839
acceleration phase of the bubble from around two thousand and

384
00:21:08.880 --> 00:21:12.000
one to two thousand and five or six, was driven

385
00:21:12.559 --> 00:21:16.480
by a massive increase in short term, variable rate lending

386
00:21:16.880 --> 00:21:19.640
that pulled all these people in and pushed the bubble

387
00:21:19.720 --> 00:21:21.440
up even to more dangerous levels.

388
00:21:21.519 --> 00:21:26.079
And the thing is, Todd, I'm reminded that this was almost,

389
00:21:26.279 --> 00:21:30.599
I mean, are you know the modern era version of

390
00:21:30.640 --> 00:21:36.720
a market crash. People committed suicide. They lost their homes, everything,

391
00:21:36.759 --> 00:21:39.880
their hope, their dreams that they thought, oh here I am,

392
00:21:39.680 --> 00:21:42.920
I get the part of the American dream, and now

393
00:21:43.000 --> 00:21:49.599
it's no more. This was devastating psychologically to everyday Americans.

394
00:21:49.880 --> 00:21:52.359
Yeah, I've talked to people who went from you know,

395
00:21:52.400 --> 00:21:56.960
having a semi successful business, a young child, who were

396
00:21:57.039 --> 00:21:59.160
living in out of their car. You know, they were

397
00:21:59.160 --> 00:22:01.759
foreclosed out of their home, they lost the money in

398
00:22:01.799 --> 00:22:04.799
their business when the downturm came. They were living out

399
00:22:04.799 --> 00:22:06.640
of a home or out of their car for a

400
00:22:06.680 --> 00:22:08.559
while with a young child, with a baby.

401
00:22:09.079 --> 00:22:09.519
Imagine.

402
00:22:09.880 --> 00:22:13.000
This was just a devastating set of circumstances.

403
00:22:13.079 --> 00:22:16.160
Yes, you see, this is so irresponsible, and it's like,

404
00:22:16.359 --> 00:22:17.519
who do you pin this on?

405
00:22:18.079 --> 00:22:19.559
I mean, in your book.

406
00:22:19.640 --> 00:22:22.839
I mean there's lots of like anything like any perfect storm,

407
00:22:23.279 --> 00:22:25.200
there's lots of contributing factors.

408
00:22:25.759 --> 00:22:29.079
But what I find so appalling is.

409
00:22:29.039 --> 00:22:33.400
That it seemed the people that were injured the most,

410
00:22:33.519 --> 00:22:36.759
you know, got the least comfort out of this. You know,

411
00:22:36.759 --> 00:22:39.720
like I said, you got suicide rates going up. People

412
00:22:39.799 --> 00:22:42.039
like you say, you know, one day they have a business,

413
00:22:42.440 --> 00:22:45.319
next next day they're living out of their car. And

414
00:22:45.680 --> 00:22:49.559
this wasn't something that they had to endure for you know,

415
00:22:49.640 --> 00:22:51.440
maybe a couple of months. I mean this went on

416
00:22:51.559 --> 00:22:52.839
for years for them to recover.

417
00:22:53.160 --> 00:22:56.480
Yeah, the unemployment rate stayed very high for years after this.

418
00:22:56.599 --> 00:23:00.680
It wasn't until you know, the late twenty ten before

419
00:23:00.759 --> 00:23:04.279
unemployment rates started really coming back down to more normal

420
00:23:04.359 --> 00:23:06.640
kinds of levels and that kind of thing. So this

421
00:23:06.759 --> 00:23:09.880
was I mean, you know, it was the Great Financial

422
00:23:09.920 --> 00:23:13.200
Crisis followed by the Great Recession, neither of which were

423
00:23:13.240 --> 00:23:16.680
so great, right, only in magnitude.

424
00:23:16.079 --> 00:23:17.880
Of the damage exactly.

425
00:23:18.720 --> 00:23:21.079
And you know, this was the worst downturn that we

426
00:23:21.200 --> 00:23:24.680
had seen since the Great Depression in this country, and

427
00:23:26.119 --> 00:23:29.119
it was devastating. And you know, as we started off

428
00:23:29.160 --> 00:23:32.519
talking about we did not learn these lessons that this

429
00:23:32.680 --> 00:23:37.519
was really caused by misguided housing policy and misguided federal

430
00:23:37.559 --> 00:23:38.480
reserve policy.

431
00:23:38.799 --> 00:23:39.079
Right.

432
00:23:39.319 --> 00:23:44.039
And you say the misguided reserve policies was that post

433
00:23:44.119 --> 00:23:47.000
to burst or that this was during the whole process,

434
00:23:47.119 --> 00:23:52.559
Because now you've got a problem and everything's crashing and burning,

435
00:23:53.000 --> 00:23:55.160
and then we're looking for the people that created the

436
00:23:55.200 --> 00:23:58.079
problem to fix the problem. What's wrong with this picture?

437
00:23:58.359 --> 00:24:00.920
That's exactly right. I mean, uh, you know, I made

438
00:24:00.960 --> 00:24:03.480
I just put out a post on this, uh, you know,

439
00:24:03.559 --> 00:24:06.880
on substack here recently about the history of the Federal

440
00:24:06.920 --> 00:24:11.680
Reserve in this never ending stream of problems. And this

441
00:24:11.920 --> 00:24:16.079
was a situation where you know, the FED once the

442
00:24:16.119 --> 00:24:19.160
crisis happened, they did do some things to help from

443
00:24:19.240 --> 00:24:22.480
keeping it to spread even more out of control, but

444
00:24:22.599 --> 00:24:26.599
that misses the fact that they had played a major role.

445
00:24:26.880 --> 00:24:29.519
They were one of the two primary sources of the

446
00:24:29.799 --> 00:24:33.240
of the crisis in the first place. And so, you know,

447
00:24:33.279 --> 00:24:36.680
I said, there's an element there of like thanking the arsonist.

448
00:24:37.160 --> 00:24:39.720
We also put out the fire that they had created,

449
00:24:39.759 --> 00:24:41.799
which is really what the situation.

450
00:24:41.599 --> 00:24:46.759
Was, right, and here you use taxpayer money, uh to

451
00:24:46.880 --> 00:24:48.640
save banks? Was that a smart move?

452
00:24:49.640 --> 00:24:52.559
You know, I was very frustrated by that at the time.

453
00:24:52.680 --> 00:24:56.000
It was part of this bailout culture that is a

454
00:24:56.200 --> 00:25:00.440
very unfortunate consequence. And that really was something that the

455
00:25:00.519 --> 00:25:03.319
FED started back in the nineties and it expanded and

456
00:25:03.359 --> 00:25:07.160
expanded and expanded to this disastrous point. I do think

457
00:25:07.279 --> 00:25:10.920
now when we finally got to that point, they did

458
00:25:11.039 --> 00:25:14.440
need to step in and provide some financing to the

459
00:25:14.519 --> 00:25:17.640
system in order to keep it from spinning even further

460
00:25:17.680 --> 00:25:21.440
out of control. So that's what they did that was correct,

461
00:25:21.839 --> 00:25:26.480
But again they were only resolving a problem that was

462
00:25:26.680 --> 00:25:30.319
largely of their own creation. And this was a big

463
00:25:30.400 --> 00:25:34.079
part of what was missed in the aftermath because instead

464
00:25:34.119 --> 00:25:37.079
of understanding what the FED had done and the mistakes

465
00:25:37.119 --> 00:25:39.680
it had made to create the problem, they got a

466
00:25:39.720 --> 00:25:42.799
lot of credit in Washington for playing this role, and

467
00:25:42.839 --> 00:25:46.079
then their role was expanded. I mean, they got larger

468
00:25:46.160 --> 00:25:50.640
regulatory oversight over the system that they had largely been

469
00:25:51.079 --> 00:25:54.720
responsible for driving into the tank. And then they came

470
00:25:54.880 --> 00:25:59.160
back with these very same policies. You know what I

471
00:25:59.160 --> 00:26:03.039
call it is it's a addiction to money and low interest rates.

472
00:26:03.319 --> 00:26:06.039
These were the same policies that had had played a

473
00:26:06.039 --> 00:26:09.279
big role in causing the tech stock bubble took to

474
00:26:09.319 --> 00:26:13.079
blow up and collapse in two thousand and then causing

475
00:26:13.079 --> 00:26:15.359
the housing bubble to blow up and collapse. And they

476
00:26:15.400 --> 00:26:17.599
went into it again in the twenty tens in an

477
00:26:17.640 --> 00:26:20.599
even bigger way. They doubled down on these failed policies.

478
00:26:21.519 --> 00:26:24.000
And I want to go back to Freddy and Fanny

479
00:26:24.039 --> 00:26:30.519
for a moment. There were early signs and some senators

480
00:26:30.519 --> 00:26:35.480
and congress people were sounding the alarm on Freddie and Fanny,

481
00:26:35.880 --> 00:26:39.279
and it became a race thing because you had I

482
00:26:39.359 --> 00:26:42.680
believe Franklin Rains, was he ahead of Yeah? Was he

483
00:26:42.680 --> 00:26:47.039
head of Freddy or Fanny was right? And so then

484
00:26:47.079 --> 00:26:49.079
it became a race deal. Oh you're only doing this

485
00:26:49.119 --> 00:26:52.480
because he's black, and and you're attacking you know, the

486
00:26:52.519 --> 00:26:57.039
black community here, and uh so they kind of negated,

487
00:26:57.240 --> 00:27:01.960
negated that. And then after everything is all said done, Rains,

488
00:27:02.000 --> 00:27:06.400
who had made some major, major mistakes, he gets rewarded

489
00:27:06.880 --> 00:27:12.039
with a golden parachute what almost what a couple hundred

490
00:27:12.039 --> 00:27:13.920
million dollars if I remember Gregtly.

491
00:27:13.799 --> 00:27:15.920
Yeah, I don't remember exactly how what the size of

492
00:27:15.920 --> 00:27:18.079
that was. And this is a very unfortunate thing. And

493
00:27:18.119 --> 00:27:20.880
that's a very important point because you know, I remember

494
00:27:20.960 --> 00:27:24.559
listening to Franklin Rain's on conference calls at that time

495
00:27:24.599 --> 00:27:26.960
as I was an investor, not in Fanny May, but

496
00:27:27.079 --> 00:27:29.720
you know, investing my own portfolio and that kind of thing.

497
00:27:30.359 --> 00:27:34.359
And this is a very very capable, very intelligent guy

498
00:27:34.759 --> 00:27:38.279
with a long track record who truly believed, I believe

499
00:27:38.559 --> 00:27:42.559
genuinely in the mission of Fannie May and Freddie Mack.

500
00:27:42.799 --> 00:27:45.920
You know that he had talked about growing up in

501
00:27:46.160 --> 00:27:49.319
a very low income family. I think it was in Seattle.

502
00:27:49.880 --> 00:27:52.920
His dad had been put out of work at one

503
00:27:52.920 --> 00:27:55.599
point in time, had to go on food stamps. He

504
00:27:55.680 --> 00:27:58.400
took a job, you know, picking I think it was

505
00:27:58.440 --> 00:28:00.960
beans and fields out of town. Franklin would go along

506
00:28:01.000 --> 00:28:04.240
with his dad. His dad was so resourceful though, that

507
00:28:04.559 --> 00:28:08.960
he went and bought a foreclosed home that was going

508
00:28:09.000 --> 00:28:11.200
to be that had been condemned so a new highway

509
00:28:11.240 --> 00:28:13.799
could be built just for the lumber, tore it down

510
00:28:14.240 --> 00:28:16.920
and then built a home in another area, and that

511
00:28:17.039 --> 00:28:19.920
became a big source of wealth for the Rains family

512
00:28:19.960 --> 00:28:22.519
that was, you know. And so I think this just

513
00:28:22.640 --> 00:28:28.440
shows even very intelligent, you know, well meaning people, when

514
00:28:28.480 --> 00:28:32.480
they get involved in trying to create these massive programs

515
00:28:32.519 --> 00:28:35.200
that are designed to help other people and their jet

516
00:28:35.279 --> 00:28:39.240
and their interests are sincere, they just end up almost

517
00:28:39.240 --> 00:28:41.519
inevitably blowing them up in such a way that they

518
00:28:41.559 --> 00:28:44.559
become so big that they cause more damage to and

519
00:28:44.599 --> 00:28:48.119
they're intended to. So good intentions and well meaning people

520
00:28:48.599 --> 00:28:51.000
don't lead to good outcomes. And that's one lesson. We

521
00:28:51.119 --> 00:28:53.720
just keep failing to learn from all of these situations.

522
00:28:53.720 --> 00:28:56.440
And Todd the thing is, okay, look at we're human.

523
00:28:56.680 --> 00:28:59.880
We can make mistakes, but there should I mean in

524
00:29:00.079 --> 00:29:03.079
the sense you did a post mortem on this whole

525
00:29:03.119 --> 00:29:07.039
situation here, and I don't see. I mean, there's a

526
00:29:07.039 --> 00:29:09.640
lot of wisdom and insight in what you've written here,

527
00:29:10.039 --> 00:29:14.000
but I don't see the manifestation of this going forward

528
00:29:14.440 --> 00:29:17.240
to where what happens when this happens again.

529
00:29:17.880 --> 00:29:21.200
Well, in some ways it has happened again. So you know,

530
00:29:21.720 --> 00:29:24.640
because we didn't rein in the Fed's ability to blow

531
00:29:24.680 --> 00:29:29.160
these asset bubbles, we went through another ten plus years

532
00:29:29.680 --> 00:29:33.759
of extraordinarily low short term interest rates that they were

533
00:29:33.759 --> 00:29:37.400
trying to juice the economy up again. And what happened

534
00:29:37.480 --> 00:29:40.720
is it's pushed asset prices up again. So now we

535
00:29:40.799 --> 00:29:45.279
have housing prices basically back at about or above the

536
00:29:45.319 --> 00:29:47.240
same levels that they were at at the peak of

537
00:29:47.240 --> 00:29:51.000
the bubble. It doesn't mean we'll have another collapse because

538
00:29:51.079 --> 00:29:54.279
lending standards have changed. There than some changes in the

539
00:29:54.279 --> 00:29:58.160
regularatory side, which are good, and the banks themselves are

540
00:29:58.240 --> 00:30:01.359
now very aware that this can happen. You know, people

541
00:30:01.559 --> 00:30:04.119
thought this couldn't happen in the nineteen nineties and two

542
00:30:04.160 --> 00:30:05.079
thousands because.

543
00:30:06.000 --> 00:30:10.319
The properties were continuing to assess at such an incredible level.

544
00:30:10.400 --> 00:30:10.640
Right.

545
00:30:11.039 --> 00:30:13.599
Yeah, Well, we had gone through one hundred years without

546
00:30:13.640 --> 00:30:16.839
a national boom and bust. We had had localized ones,

547
00:30:17.200 --> 00:30:19.519
you know, like in Texas when the oil patch collected,

548
00:30:20.079 --> 00:30:22.960
but nobody thought it could happen on a national basis.

549
00:30:23.240 --> 00:30:26.519
And again, what everybody missed was, you know, for thirty

550
00:30:26.599 --> 00:30:29.599
years leading up to the nineties, Banni May and Freddie

551
00:30:29.599 --> 00:30:33.799
Mack had been amassing so much of the national mortgage

552
00:30:33.880 --> 00:30:36.200
market that all of a sudden they were in a

553
00:30:36.240 --> 00:30:39.559
position to drive a change that had never happened before.

554
00:30:40.279 --> 00:30:43.480
So but you know, we miss all these things. The

555
00:30:43.559 --> 00:30:46.400
FED engages in this easy money, and we have very

556
00:30:46.440 --> 00:30:48.720
high housing prices, so we may not have a collapse,

557
00:30:48.960 --> 00:30:53.759
but we have a significant affordability crisis right now exactly.

558
00:30:53.839 --> 00:30:58.079
No young people trying to start a career or early

559
00:30:58.160 --> 00:31:01.440
in their career and starting a family, you know, they

560
00:31:01.440 --> 00:31:05.839
don't have incomes to match you know, today's housing prices.

561
00:31:05.920 --> 00:31:07.839
Well that's why you have so many people are homeless,

562
00:31:07.839 --> 00:31:10.839
living out of their cars todd right now, and in

563
00:31:10.839 --> 00:31:13.400
some states higher than you know, whether you're in New

564
00:31:13.519 --> 00:31:15.759
York or you know, California and others.

565
00:31:15.880 --> 00:31:17.799
It's just it's not affordable.

566
00:31:18.160 --> 00:31:21.400
Yeah, and so we fail to learn the lessons, we

567
00:31:21.480 --> 00:31:24.680
fail to hold the FED accountable. They go through these

568
00:31:24.720 --> 00:31:28.000
policies again and they create you know, there's an old

569
00:31:28.039 --> 00:31:31.200
saying that you know, history doesn't repeat, but it rhymes.

570
00:31:31.640 --> 00:31:34.640
So it's not the exact same thing, but it's a

571
00:31:34.720 --> 00:31:38.599
related thing exactly. And the core is failing to rein

572
00:31:38.680 --> 00:31:42.079
in the fed's ability to try and use easy money

573
00:31:42.079 --> 00:31:47.000
policies to stimulate the economy in ways that creates hidden

574
00:31:47.039 --> 00:31:51.519
and unforeseen issues like highly valued homes with an affordability

575
00:31:51.559 --> 00:31:55.359
problem or highly valued stocks that make them more vulnerable

576
00:31:55.839 --> 00:31:59.559
to you know, potential dislocations, or that may lower the

577
00:31:59.640 --> 00:32:03.319
return is going forward relative to what people have you know,

578
00:32:03.440 --> 00:32:06.880
expected based on where pasttock returns of that kind of thing.

579
00:32:06.880 --> 00:32:08.920
Well, we're talking with Todd Chase's the author of the

580
00:32:08.960 --> 00:32:12.680
newsletter on Wealth and Progress. By the way, it's available

581
00:32:12.720 --> 00:32:16.920
to you for free. It's on substack and his book

582
00:32:17.200 --> 00:32:19.960
two thousand and eight. What really happened we've been breaking

583
00:32:20.000 --> 00:32:25.640
that down is it's quite the study. And the thing is,

584
00:32:25.680 --> 00:32:29.480
as you know, people you know that are in charge

585
00:32:29.480 --> 00:32:31.599
of this government, I still want to hold on to

586
00:32:31.680 --> 00:32:34.279
the constitutional principles that this is the government of for

587
00:32:34.400 --> 00:32:37.559
by we the people. It is imperative that we be informed.

588
00:32:37.920 --> 00:32:40.960
It's the consent of the government, and you cannot be

589
00:32:41.119 --> 00:32:43.519
a low information voter. You need to be aware of

590
00:32:43.559 --> 00:32:46.839
these things because guess what these things cycle. It's just

591
00:32:46.839 --> 00:32:49.400
like Todd said, it may not necessarily repeat, but it rhymes,

592
00:32:49.640 --> 00:32:53.279
and we get some sort of semblance of these types

593
00:32:53.319 --> 00:32:56.839
of activities that come in and guess what happens. Traditionally

594
00:32:57.240 --> 00:33:00.519
the politicians take the easy way out and a write

595
00:33:00.640 --> 00:33:04.440
iou checks on the backs of the American people, right Tom.

596
00:33:05.119 --> 00:33:07.599
You know, Bill, you couldn't have made a more perfect point.

597
00:33:07.720 --> 00:33:10.720
And one of the reasons, like I just mentioned, I

598
00:33:10.799 --> 00:33:14.359
just put out this piece on the Federal Reserve Federal

599
00:33:14.359 --> 00:33:18.200
Reserve on substack, which is called fixing the Fed part

600
00:33:18.279 --> 00:33:21.880
to a punch bowl full of problems. And I go

601
00:33:21.960 --> 00:33:25.480
through this history of problems that have been created by

602
00:33:25.480 --> 00:33:27.599
the Federal Reserve. And I won't go through all the

603
00:33:27.640 --> 00:33:29.920
details now unless you want, but just tick them off.

604
00:33:30.279 --> 00:33:35.160
The Great Depression, the stagflation of the nineteen seventies, the

605
00:33:35.839 --> 00:33:39.400
tech stock bubble and burst, the housing bubble and burst,

606
00:33:39.759 --> 00:33:42.160
and now these new issues that we've just talked about,

607
00:33:42.440 --> 00:33:44.559
and you have to sit back and ask why does

608
00:33:44.599 --> 00:33:48.200
this keep happening? Why doesn't somebody rain the system in?

609
00:33:48.640 --> 00:33:53.279
And the problem and there's there's a very reasonable rational

610
00:33:53.319 --> 00:33:56.480
explanation for that. The problem is as the FED has

611
00:33:56.559 --> 00:33:59.920
figured out that it can use its control of interro

612
00:34:00.079 --> 00:34:04.599
straits to try and manipulate the entire economy in a

613
00:34:04.640 --> 00:34:07.359
way that nobody else in the system has the ability

614
00:34:07.400 --> 00:34:09.880
to do even bigger than Fannie Mae and Freddie Mack.

615
00:34:10.320 --> 00:34:12.400
As I say in one point in the book, by

616
00:34:12.480 --> 00:34:15.880
lowering interest rates in a credit driven economy, they can

617
00:34:15.960 --> 00:34:20.760
drive everything from you know, the price of auto loans

618
00:34:20.760 --> 00:34:24.920
in Alaska, to housing prices in Honolulu to stock prices

619
00:34:24.960 --> 00:34:27.480
on Wall Street. They're the one thing out there that

620
00:34:27.519 --> 00:34:31.280
can drive all is And the unfortunate element is that

621
00:34:31.880 --> 00:34:36.159
for a president who's elected and an administration, the temptation

622
00:34:36.840 --> 00:34:41.079
to have the FED become involved in these preemptive moves

623
00:34:41.119 --> 00:34:45.280
to try and keep any and everything from causing a

624
00:34:45.320 --> 00:34:49.719
slight economic disruption, it's just too powerful for anybody to

625
00:34:49.760 --> 00:34:52.880
want to rein it in, right, And so you know,

626
00:34:53.920 --> 00:34:56.920
I'm not choosing the existing administration of this, but almost

627
00:34:57.000 --> 00:35:00.079
any administration, you know, you've got something that happens like

628
00:35:01.519 --> 00:35:04.760
some of the rolling financial crisis of the mid nineties,

629
00:35:04.800 --> 00:35:08.280
the Mexican peso crisis, or a debt crisis or the

630
00:35:08.360 --> 00:35:13.159
Russian debt crisis. They haven't caused an economic downturn yet,

631
00:35:13.480 --> 00:35:17.239
they aren't even causing failures that are cascading throughout the system.

632
00:35:17.639 --> 00:35:19.880
But there's this big incentive for the federal reserve to

633
00:35:19.920 --> 00:35:22.880
step in before any of that happens, push interest rates

634
00:35:22.920 --> 00:35:25.960
down and try and keep it from spreading. Well, the

635
00:35:26.000 --> 00:35:28.280
problem is if you go back to that playbook too

636
00:35:28.320 --> 00:35:32.760
many times, you might keep things from happening in one administration,

637
00:35:33.199 --> 00:35:35.679
but you just kick the can down into the next.

638
00:35:35.480 --> 00:35:38.599
Administration exactly, and we get this game where this keeps

639
00:35:38.639 --> 00:35:42.280
happening and happening until it gets so big that the

640
00:35:42.360 --> 00:35:46.920
consequences are are way beyond what the original problem really was.

641
00:35:48.039 --> 00:35:51.599
Todd, You've been writing about, you know, the tariffs and

642
00:35:52.079 --> 00:35:57.039
current trade situation that's going on in our country. For me,

643
00:35:57.199 --> 00:36:01.239
I'm optimistic about it, but looking at it kind of

644
00:36:01.280 --> 00:36:03.239
like the way you have been, you know, from a

645
00:36:03.280 --> 00:36:07.039
thirty thousand foot perspective, and I think that if we

646
00:36:07.119 --> 00:36:12.239
had all hands on debt cooperating here, this challenge that

647
00:36:12.280 --> 00:36:15.239
we're doing right now in terms of in a sense,

648
00:36:15.280 --> 00:36:20.239
we're reinventing our economy with what Donald Trump is offering here,

649
00:36:20.559 --> 00:36:22.920
which I think could be a good thing and could

650
00:36:23.000 --> 00:36:25.280
help us at least address some of that thirty seven

651
00:36:25.360 --> 00:36:28.599
trillion dollars in debt that we have and get everybody

652
00:36:28.639 --> 00:36:30.639
else to kind of you know, this country has this

653
00:36:30.760 --> 00:36:33.920
sentiment that everybody should be paying their fair share, Well

654
00:36:33.960 --> 00:36:35.559
what about our allies?

655
00:36:35.599 --> 00:36:36.119
What about the.

656
00:36:36.159 --> 00:36:39.320
Rest of the world that has been taking advantage of

657
00:36:39.360 --> 00:36:44.719
America and Americans? And I can't help but think that

658
00:36:44.800 --> 00:36:47.400
if the FED was cooperative and on the same page

659
00:36:47.440 --> 00:36:50.159
of what we were trying to do, we could affect

660
00:36:50.199 --> 00:36:55.519
something that could be rather revolutionary and successful for everybody,

661
00:36:55.840 --> 00:36:59.519
whether you're a Democrat or Republican. But for some reason,

662
00:36:59.639 --> 00:37:05.079
because of tds uh and this you know, deranged Donald

663
00:37:05.119 --> 00:37:08.639
Trump syndrome that people are going through. You know, they're

664
00:37:08.679 --> 00:37:11.519
they're they're hurting. They're not hurting Donald Trump, They're they're

665
00:37:11.559 --> 00:37:15.199
hurting us. And I'm trying to, you know, rally a

666
00:37:15.280 --> 00:37:17.559
cry here to say, look at we need to get

667
00:37:17.639 --> 00:37:19.760
on the same page. And I think this is a

668
00:37:19.760 --> 00:37:25.039
golden opportunity and Trump's vision of a you know, you know,

669
00:37:25.119 --> 00:37:29.760
a golden, golden era for America could be possible, but

670
00:37:29.840 --> 00:37:31.400
it requires cooperation.

671
00:37:32.280 --> 00:37:35.159
Yeah, there's no question about it. And I think, you know,

672
00:37:35.639 --> 00:37:37.840
there's a lot of people This is another thing where

673
00:37:37.679 --> 00:37:41.559
the criticisms coming from both the left, the anti Trumpers

674
00:37:41.960 --> 00:37:45.199
is from the right and another segment of the left

675
00:37:45.519 --> 00:37:49.719
which basically keeps waving the free trade flag. But once

676
00:37:49.760 --> 00:37:52.480
you've got to I think there's two big components here

677
00:37:52.519 --> 00:37:55.760
that we've got to take into consideration. One is China

678
00:37:56.159 --> 00:38:01.320
and China we cannot continue to fun and the growth

679
00:38:01.840 --> 00:38:05.960
and the power of the Chinese Communist Party. If we

680
00:38:06.000 --> 00:38:08.960
had gone down this path with them and they had

681
00:38:09.000 --> 00:38:13.800
become a trading partner playing on an equal playing field

682
00:38:14.239 --> 00:38:17.519
by Western standards in rule of law, and they had

683
00:38:17.559 --> 00:38:22.000
become a global ally in terms of geopolitical issues, that

684
00:38:22.000 --> 00:38:23.239
would have been fantastic.

685
00:38:23.559 --> 00:38:25.920
But it hasn't happened, and it's not going to happen.

686
00:38:26.000 --> 00:38:27.760
Do you think I don't think it's going to happen.

687
00:38:27.840 --> 00:38:29.960
I mean I made a comment at one place, you know,

688
00:38:30.360 --> 00:38:34.840
once a totalitarian regime, always a totalitarian regime. And the

689
00:38:34.880 --> 00:38:37.719
big mistake that we made there, and I understand why

690
00:38:38.199 --> 00:38:40.760
But we go back to the nineties. It was just

691
00:38:40.880 --> 00:38:44.239
after Tienum and Square had fallen. For people who remember that,

692
00:38:44.360 --> 00:38:46.239
or who if they don't, you know, that was appeared

693
00:38:46.320 --> 00:38:49.880
when there were pro democracy protests that took place largely

694
00:38:49.920 --> 00:38:54.599
by students. China was in the midst of moving down

695
00:38:54.639 --> 00:38:59.000
towards a more market oriented economy to try and resurrect

696
00:38:59.320 --> 00:39:01.760
all the empower average people that had been left over

697
00:39:01.840 --> 00:39:06.840
from communism, and the Communist Party let it go on

698
00:39:06.920 --> 00:39:09.320
for a little while and then the tanks rolled in,

699
00:39:09.920 --> 00:39:13.159
a couple of thousand people were killed, they shut it down,

700
00:39:13.719 --> 00:39:16.199
and the message to the Communist people was very are

701
00:39:16.280 --> 00:39:19.199
to the Chinese people was very clear, but we missed it.

702
00:39:19.480 --> 00:39:23.280
The message was we will only let these reforms go

703
00:39:23.880 --> 00:39:28.199
economically or politically, or from any other perspective as long

704
00:39:28.239 --> 00:39:31.280
as they are in the interest of the Chinese Communist Party.

705
00:39:33.079 --> 00:39:36.599
And unfortunately we missed that. And as time has gone

706
00:39:36.599 --> 00:39:41.480
on and we basically funded China's rise from an insignificant

707
00:39:41.519 --> 00:39:44.599
player in the world. You know, back in around nineteen ninety,

708
00:39:44.639 --> 00:39:48.519
their GDP was about six percent of ours, which means

709
00:39:48.519 --> 00:39:52.119
ours was fifteen or sixteen times bigger than theirs. Exactly

710
00:39:52.559 --> 00:39:57.000
today they're almost sixty seven percent of ours, which means

711
00:39:57.039 --> 00:40:00.679
we're barely over one times the size of them. They

712
00:40:00.679 --> 00:40:04.280
have become, you know, they have not become a trading

713
00:40:04.320 --> 00:40:08.920
partner by Western standards. They basically engage in economic warfare,

714
00:40:09.480 --> 00:40:13.400
and on the geopolitical front, they are engaged all over

715
00:40:13.440 --> 00:40:18.280
the world in activities that are trying to counter you know,

716
00:40:18.880 --> 00:40:24.000
the initiative of America and democratic free countries. So that's

717
00:40:24.039 --> 00:40:26.679
the big issue in trading, and we have to deal

718
00:40:26.719 --> 00:40:28.920
with that. We cannot let the status quo go on.

719
00:40:29.440 --> 00:40:33.440
So they GDP keeps rising relative to ours, which makes

720
00:40:33.480 --> 00:40:35.199
them even a bigger adversary.

721
00:40:35.760 --> 00:40:39.079
Right, Well, it's it's amazing how they've been able to

722
00:40:39.159 --> 00:40:44.119
declare war on America, and America it just lets it happen.

723
00:40:44.440 --> 00:40:47.800
You know, there's no response, whether you know it had

724
00:40:47.840 --> 00:40:52.000
to do with trade, the import or export of fentanyl,

725
00:40:52.639 --> 00:40:55.519
we can talk about COVID, other things that the Chinese

726
00:40:55.559 --> 00:40:58.360
have done that have been antithical to America's interests, and

727
00:40:58.400 --> 00:41:02.079
they continue to do that. And meanwhile they're hovering over Taiwan.

728
00:41:02.920 --> 00:41:07.519
They're building uh, you know, bases in the South China Sea,

729
00:41:07.920 --> 00:41:12.760
claiming that as as their own land and property. I mean,

730
00:41:13.320 --> 00:41:17.400
you know, it's almost like Ukraine and Russia DejaVu one

731
00:41:17.400 --> 00:41:18.960
more time here, yeah.

732
00:41:18.840 --> 00:41:21.920
Only only from a much different perspective, which is that,

733
00:41:22.360 --> 00:41:26.119
you know, because we isolated Russia's economy and it ended

734
00:41:26.199 --> 00:41:30.960
up collapsing because of the inefficiencies of the communist command

735
00:41:31.000 --> 00:41:36.679
and control model, they today are a relatively insignificant player

736
00:41:36.920 --> 00:41:41.199
from an economic resources perspective. You know, they're they ranked

737
00:41:41.199 --> 00:41:45.480
somewhere around twentieth. I think their GDP is is below Canada,

738
00:41:45.599 --> 00:41:47.960
Brazil and a couple of other countries. So you know,

739
00:41:48.000 --> 00:41:51.039
they're rape, They're they're rattling their sword and causing a

740
00:41:51.079 --> 00:41:54.199
lot of problems in Eastern Europe. But their ability to

741
00:41:54.280 --> 00:41:58.719
play a major geopolitical role is nothing like what it

742
00:41:58.760 --> 00:42:01.639
had been in the past because they are so much

743
00:42:01.679 --> 00:42:04.880
smaller than we are and so many other countries. But

744
00:42:04.960 --> 00:42:09.440
now China is a major and real competitor, and and

745
00:42:09.480 --> 00:42:12.039
you know, added to all the issues you mentioned, you know,

746
00:42:12.159 --> 00:42:15.320
China is also helping Russia and helping Iran exactly. I

747
00:42:15.360 --> 00:42:18.599
was going to say, cause havoc over in these other

748
00:42:18.719 --> 00:42:20.719
in the Middle East and in Eastern Europe, and that

749
00:42:20.840 --> 00:42:23.599
kind of thing. So yeah, this is like, I mean,

750
00:42:23.639 --> 00:42:25.519
I think, you know, we've got to go back to

751
00:42:25.559 --> 00:42:32.119
this model of isolating these hostile totalitarian regimes and holding

752
00:42:32.199 --> 00:42:34.960
it in, not allowing them into the you know, the

753
00:42:34.960 --> 00:42:38.480
global Western economy, which gives them the opportunity, you know,

754
00:42:38.559 --> 00:42:40.599
to do all these things. And by the way, as

755
00:42:40.599 --> 00:42:43.760
they've done this, they've also continued exploiting their own working

756
00:42:43.760 --> 00:42:46.960
class people. It's not like all the benefits are flowing

757
00:42:47.000 --> 00:42:49.079
down to raising all these people up. I mean, you

758
00:42:49.119 --> 00:42:52.119
know what you hear about working standards over there are terrible.

759
00:42:52.159 --> 00:42:57.000
Right exactly. Well, you know, it's going to be a

760
00:42:57.039 --> 00:43:01.239
tough situation. It's like that pennzoil commercialing baby later. The

761
00:43:01.239 --> 00:43:04.280
inference is when you defer it, it gets more expensive.

762
00:43:04.320 --> 00:43:06.440
And we've seen this in our own you know, as

763
00:43:06.440 --> 00:43:09.280
you cited earlier, we see this in our own government.

764
00:43:09.360 --> 00:43:12.280
You know, the problem gets kicked down the road and

765
00:43:12.320 --> 00:43:18.119
it gets more complex and the costs increase with the complexity.

766
00:43:18.480 --> 00:43:20.119
And so here we are. When are we going to

767
00:43:20.159 --> 00:43:22.880
face this problem? And Donald Trump has said, look at

768
00:43:22.880 --> 00:43:25.480
no more. We're going to look for free and fair trade.

769
00:43:25.679 --> 00:43:27.519
We're going to look out for things that are in

770
00:43:27.599 --> 00:43:31.920
America's interest also looking at NATO and what's happening there

771
00:43:31.920 --> 00:43:35.800
in Europe that the United States is. I think Donald

772
00:43:35.840 --> 00:43:37.800
Trump has seen it right to say, look at the

773
00:43:37.840 --> 00:43:40.840
United States should not be carrying Ukraine to the level

774
00:43:41.000 --> 00:43:45.119
that we have been. The European countries, the neighbors there

775
00:43:45.280 --> 00:43:48.400
to Ukraine have more to lose than the United States

776
00:43:48.400 --> 00:43:50.840
has to lose. But it seems that the United States

777
00:43:50.920 --> 00:43:53.280
cares more about Ukraine than they do.

778
00:43:54.119 --> 00:43:56.519
Well, you know you've touched on I'm actually in the

779
00:43:56.559 --> 00:43:59.880
middle of writing another substack piece which will also.

780
00:43:59.679 --> 00:44:03.480
A year you're channeling me, you know, I think I'm

781
00:44:03.519 --> 00:44:05.000
stealing all your good ideas.

782
00:44:07.000 --> 00:44:10.159
Yeah, no, I'm going to address these exact issues. I mean,

783
00:44:10.639 --> 00:44:13.920
the times have changed, you know. We it was one

784
00:44:14.000 --> 00:44:17.079
thing at an earlier point in time for US to

785
00:44:17.159 --> 00:44:20.840
kind of play the global policeman role. But what people

786
00:44:20.920 --> 00:44:23.360
have lost sight of was if you go back to

787
00:44:23.400 --> 00:44:26.400
the beginning of the US European relationship, you know, and

788
00:44:26.440 --> 00:44:29.599
from a military perspective, World War One and World War Two,

789
00:44:30.079 --> 00:44:32.719
we were not the first responder in.

790
00:44:32.599 --> 00:44:34.440
Either of those wars exactly.

791
00:44:34.800 --> 00:44:37.639
They started and major things happened and went on for

792
00:44:37.800 --> 00:44:40.760
years before we then came in to provide the backup

793
00:44:40.800 --> 00:44:43.920
support necessary to bring them to an end. But as

794
00:44:44.000 --> 00:44:47.679
time went on, it got to the point where, you know,

795
00:44:48.239 --> 00:44:53.280
this almost absurd situation where you have a confrontation in

796
00:44:53.400 --> 00:44:57.320
far eastern Europe. That because Russia is now a much

797
00:44:57.360 --> 00:44:59.719
smaller player than it was during the years of the

798
00:44:59.760 --> 00:45:05.480
so Union, it doesn't have big international global implications like

799
00:45:05.960 --> 00:45:08.039
World War One and World War two did. It is

800
00:45:08.280 --> 00:45:12.199
a regional, local kind of thing. Europe needs to take

801
00:45:12.280 --> 00:45:15.960
responsibility for that and play the first responder role. I

802
00:45:16.000 --> 00:45:18.519
think we should. We can be playing a role, you know,

803
00:45:18.599 --> 00:45:21.000
with tariffs and sanctions and those kinds of things to

804
00:45:21.039 --> 00:45:23.599
really squeeze down on Russia, which is where I'm hoping

805
00:45:23.599 --> 00:45:26.559
where this will all go. But this is Europe needs

806
00:45:26.599 --> 00:45:30.039
to be first and foremost responsible for this. But you know,

807
00:45:30.119 --> 00:45:34.079
they have shirked that responsibility in the post World War

808
00:45:34.079 --> 00:45:37.920
two era. They were too happy to stay in a

809
00:45:37.960 --> 00:45:42.480
dependent state on the United States instead of assuming the

810
00:45:42.519 --> 00:45:46.920
responsibility for their own safety and defense. And that's just

811
00:45:46.960 --> 00:45:49.360
a massive failure of leadership on the part of the

812
00:45:49.880 --> 00:45:51.679
leading European country zone.

813
00:45:51.800 --> 00:45:54.559
And they need to be aware that if this negotiation

814
00:45:55.199 --> 00:45:59.639
between Putin and Zelenski doesn't work out in a balanced

815
00:45:59.639 --> 00:46:02.400
sort of manner. In other words, that the bully is

816
00:46:02.519 --> 00:46:07.400
rewarded for being a bully, then what's their protection. So

817
00:46:07.519 --> 00:46:10.880
they need to be very interested in what's going on

818
00:46:11.000 --> 00:46:16.519
with the negotiations here and support a fair solution. Right now,

819
00:46:16.559 --> 00:46:19.679
it seems like Putin has all the cards, as Donald

820
00:46:19.719 --> 00:46:23.280
Trump would say, and he's just bullying his way through this,

821
00:46:23.760 --> 00:46:29.559
holding off, you know, from not bombing Ukraine any further

822
00:46:29.639 --> 00:46:33.639
and having a committed one hundred percent peace treaty until

823
00:46:33.679 --> 00:46:34.639
this is resolved.

824
00:46:34.719 --> 00:46:36.519
Right, Yeah, And I.

825
00:46:36.400 --> 00:46:40.400
Think Putin is I think that Russian economy is in

826
00:46:40.400 --> 00:46:43.840
a much more fragile state that they are letting on.

827
00:46:44.440 --> 00:46:47.920
I think they have spent enormous sums of money the

828
00:46:48.000 --> 00:46:51.320
economy a huge portion. I've heard numbers as much as

829
00:46:51.320 --> 00:46:53.719
forty percent of their GDP is now made up of

830
00:46:53.760 --> 00:46:59.639
military spending. They are very oil dependent, they have inflation

831
00:46:59.760 --> 00:47:02.119
is up in the twenty twenty five percent range. They've

832
00:47:02.159 --> 00:47:04.719
been printing enormous amounts of money to try and keep

833
00:47:04.760 --> 00:47:08.119
funding this. And I think the numbers I've heard is

834
00:47:08.159 --> 00:47:11.039
they've lost close to or over a million people.

835
00:47:11.039 --> 00:47:13.199
And so that's what I heard, and I don't know

836
00:47:13.239 --> 00:47:16.239
how this is sustainable for Putin as the leader.

837
00:47:16.599 --> 00:47:17.880
I think he's very vulnerable.

838
00:47:18.199 --> 00:47:20.199
I agree, and I think if we really put the

839
00:47:20.239 --> 00:47:22.760
screws on him, he could pay a big price, which

840
00:47:22.760 --> 00:47:25.639
would send a message to anybody around the world that

841
00:47:25.719 --> 00:47:27.920
this is not the way to work your way out

842
00:47:27.960 --> 00:47:28.719
of your problems.

843
00:47:28.920 --> 00:47:31.840
Well, am I often thinking these EU countries, these neighboring

844
00:47:31.880 --> 00:47:34.599
countries should be more involved and have a higher interest

845
00:47:34.679 --> 00:47:34.920
in this.

846
00:47:35.639 --> 00:47:38.320
They should be They should be playing the leading role.

847
00:47:38.679 --> 00:47:40.119
Yes, we should be there.

848
00:47:42.159 --> 00:47:45.039
We can be there in this soft approach, which is

849
00:47:45.079 --> 00:47:47.800
to screw down on the tariffs and the sanctions and

850
00:47:47.840 --> 00:47:50.360
the things that hurt the Russian economy. We should have

851
00:47:50.400 --> 00:47:53.280
a backup role from a monetary perspective, if at all,

852
00:47:53.639 --> 00:47:55.639
but they need to be playing the leading role in

853
00:47:55.719 --> 00:47:58.159
providing the financial support and if boots are on the

854
00:47:58.159 --> 00:47:59.960
ground that needs to come from Europe.

855
00:48:00.039 --> 00:48:01.599
Todd, we got a minute left. I'm going to let

856
00:48:01.639 --> 00:48:05.000
you summarize this. I'm going to go back to tariffs

857
00:48:06.159 --> 00:48:09.159
and this opportunity that is before is what do you

858
00:48:09.199 --> 00:48:09.880
see happening?

859
00:48:10.639 --> 00:48:13.159
And so I think first and foremost we need to

860
00:48:13.199 --> 00:48:15.920
deal with the Chinese problem that we mentioned that's going

861
00:48:15.960 --> 00:48:18.079
to be difficult, but I think it will be dealt

862
00:48:18.079 --> 00:48:20.480
with in a way where it's phased in so it

863
00:48:20.519 --> 00:48:24.079
gives business some time to adjust. That's a tough issue. Second,

864
00:48:24.480 --> 00:48:27.159
we do need to level the playing field with our

865
00:48:27.159 --> 00:48:30.960
friends and allies that's primarily Europe, Japan and India, so

866
00:48:31.000 --> 00:48:34.159
that it's balanced and when we get into the next

867
00:48:34.280 --> 00:48:37.519
round of growth, our workers here have the opportunity to

868
00:48:37.559 --> 00:48:41.239
participate in that on a fair and equal way. So

869
00:48:41.320 --> 00:48:43.880
we want to encourage people to trade with us. But

870
00:48:43.920 --> 00:48:46.079
we've got to move away from this post World War

871
00:48:46.159 --> 00:48:48.480
thing where it was two to one sided in everybody

872
00:48:48.480 --> 00:48:50.920
else's favor and against our workers here.

873
00:48:51.199 --> 00:48:54.519
How much time does Trump have do you think, you

874
00:48:54.559 --> 00:48:56.519
know to carry this out? You know he's been saying

875
00:48:56.519 --> 00:49:00.280
this is in process. I believe that's the case. That

876
00:49:00.360 --> 00:49:03.599
the clock is ticking. And you know, it's a good

877
00:49:03.639 --> 00:49:07.280
opportunity for him because you know, he scores a couple

878
00:49:07.280 --> 00:49:09.400
of wins here. He's going to close a lot of

879
00:49:09.400 --> 00:49:11.599
mouths really quick here and a lot of naysayers, don't

880
00:49:11.599 --> 00:49:11.920
you think?

881
00:49:12.199 --> 00:49:13.920
Yeah? I do, and I think that's this. I think

882
00:49:13.920 --> 00:49:16.079
it will happen sooner rather than later. I think there's

883
00:49:16.079 --> 00:49:19.000
big incentives for these other parties to negotiate, and there

884
00:49:19.000 --> 00:49:20.880
are big incentives for us to make it work for

885
00:49:20.920 --> 00:49:21.880
our companies also.

886
00:49:22.480 --> 00:49:25.000
Well, Todd, we got to leave it there. Todd Sheets,

887
00:49:25.000 --> 00:49:26.920
thank you so much for being with us. He's the

888
00:49:26.920 --> 00:49:31.079
author of the newsletter on Wealth and Progress and right

889
00:49:31.119 --> 00:49:35.079
now it's available free of charge on substack. He's also

890
00:49:35.239 --> 00:49:37.639
author of the book two thousand and eight What Really Happened?

891
00:49:37.639 --> 00:49:39.840
Todd Sheets, thank you for being with his take Care Bill,

892
00:49:39.920 --> 00:49:42.280
Thanks so much. I joined it and ladies, gentlemen, thank

893
00:49:42.280 --> 00:49:44.360
you for sharing a part of your day with us.

894
00:49:45.159 --> 00:49:49.119
So appreciate you joining in and you know, getting this

895
00:49:49.199 --> 00:49:52.679
information and hopefully it blesses you and causes you to

896
00:49:52.719 --> 00:49:55.679
do your own studying and your own research so that

897
00:49:55.760 --> 00:49:58.199
you own your own knowledge, that you're not being told

898
00:49:58.519 --> 00:50:02.719
what you should believe. This is what the show is

899
00:50:02.719 --> 00:50:07.400
all about, to bring you these guests that have the background,

900
00:50:07.719 --> 00:50:10.480
the experience, the knowledge to share with you so that

901
00:50:11.320 --> 00:50:13.519
you know more and hopefully you know more than what

902
00:50:13.639 --> 00:50:17.679
you did when you first started watching the show. Again,

903
00:50:17.719 --> 00:50:20.000
I thank you for being with us. May God bless

904
00:50:20.039 --> 00:50:22.400
you and may keep you, May make His face shine

905
00:50:22.440 --> 00:50:25.440
upon you and be gracious unto you and give you peace.

906
00:50:25.440 --> 00:50:26.320
God blessed. Thank you,