April 26, 2023 - Bannon's War Room
48:52
Participants
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| Speaker | Time | Text |
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| This is the primal scream of a dying regime. | ||
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unidentified
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Pray for our enemies, because we're going medieval on these people. | |
| I got a free shot at all these networks lying about the people. | ||
| The people have had a belly full of it. | ||
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unidentified
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I know you don't like hearing that. | |
| I know you try to do everything in the world to stop that, but you're not going to stop it. | ||
| It's going to happen. | ||
| And where do people like that go to share the big line? | ||
| MAGA media. I wish in my soul, I wish that any of these people had a conscience. | ||
|
unidentified
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Ask yourself, what is my task and what is my purpose? | |
| If that answer is to save my country, this country will be saved. | ||
|
unidentified
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War Room. Here's your host, Stephen K. Vance. | |
| It's Tuesday, 25th of April in the year of alert, 2023. | ||
| On the morning show, because we were so jammed wall to wall for all of our guys that are the four hour crowd. | ||
| I didn't get a chance to talk about the cover of the Wall Street Journal, the lead story. | ||
| I talked about the cover of the New York Times, the lead story about Tucker. | ||
| The lead story, Chris, the Wall Street Journal being owned by the Murdoch kind of buried that story slightly. | ||
| But their lead story is pretty important. | ||
| $100 billion, oops, $100 billion in assets in deposits. | ||
| Excuse me, deposits out of Republic Bank, First Republic Bank. | ||
| Remember, First Republic is known as having a really premier asset management group. | ||
| Steve Cortez, I got two things to talk about in the economy that you've kind of called. | ||
| Number one, and we want to make sure everybody understands this. | ||
| The smaller banks and regional banks are under full assault, and you've got a credit contraction going on right now. | ||
| Cortez, talk to me. | ||
| This problem is a massive problem in the financial crisis we face, and it portends nothing more portends the lost decade in front of us than what's happening on credit and what's happening in these smaller banks. | ||
| Steve Cortez, your thoughts and analysis, sir? | ||
| Steve, sadly, you're exactly spot on. | ||
| And to borrow a phrase from the worst Secretary of the Treasury in all of history, Janet Yellen, this is not transitory. | ||
| In other words, these are systemic problems that are now plaguing the regional banks. | ||
| And today is the latest data point in that regard from First Republic. | ||
| By the way, this is terrible news for the corporate media, which, of course, on the day that Joe Biden has the gall to say that he deserves another term as president, on that very day, we get this report out from First Republic, more evidence that this banking crisis continues and, in fact, intensifies, and that a lot of it, by the way, emanates out of where? | ||
| out of the San Francisco Bay Area and out of Silicon Valley as a business sector, specifically the biggest supporters perhaps in total of the Democratic Party and certainly of the Biden regime. | ||
| You know, you mentioned the Wall Street Journal reporting. | ||
| If we can pull up chart one, I'd like to go to some of the reporting from Reuters on this today and just quote a bit from Reuters reporting on First Republic. | ||
| They note that this is what's going to happen going forward. | ||
| They're going to shrink the balance sheet, cut expenses, cut executive pay, and lay off one quarter of the workforce. | ||
| So that is the news out of First Republic. | ||
| And again, this is not obviously First Republic specific. | ||
| We had a similar tale out of Silicon Valley Bank before it was rescued by the American taxpayers, out of Signature Bank before it was rescued by the American taxpayers. | ||
| We also had over the weekend Moody's cut essentially the entire sector, meaning every regional bank, every significant regional bank in America had its credit downgraded. | ||
| Here's the ramification far beyond just what's happening in these banks or just what's happening to the people who own stock in these banks, the unfortunate people. | ||
| By the way, speaking of the stock, how did it react for First Republic? | ||
| Well, it opened up down 20%. | ||
| By lunchtime, it was down 30%. | ||
| Over the last year, Steve, it's down 92%. | ||
| Okay, that much value destruction because of what Joe Biden has done. | ||
| But let's talk about the ramifications outside of the banking sector itself. | ||
| Steve, the small and regional banks out there, they are the lifeblood for Main Street, for small business in this country. | ||
| Small operations can't go and get a loan from J.P. Morgan or Goldman Sachs. | ||
| They simply can't, okay? Those giant multinational megabanks simply don't care about medium and smaller sized firms in the United States. | ||
| So the financial fuel for Main Street, for small business, for the dynamism of the American economy has always come from regional and local banks. | ||
| Those banks are suffering. | ||
| All banks are suffering. But those banks are suffering disproportionately. | ||
| And because of that, Steve, that's why I say this is a systemic crisis with ongoing terrible fallout for the economy. | ||
| And it's only going to lead, unfortunately, Steve, to an ever more intensified concentration of market share among a relatively small group of oligarchs and the firms that they control. | ||
| Steve, I want to go something that you mentioned briefly. | ||
| You got Silicon Valley Bank and you got First Republic that are in the Bay Area. | ||
| You've got Signature that was New York City, I think New York City based. | ||
| All three of them are bedrocks of the Democratic Party and particularly either the crypto side or the – The high tech side, the bank side and the very, very dialed in. | ||
| And we saw the bailouts first with, you know, guaranteed deposits, all that. | ||
| Does this mean particularly as we're in the middle of this massive fight over debt? | ||
| And remember, it was the overspending. | ||
| Of the irresponsible, illegitimate Biden regime that got us into this mess and got these banks upside down. | ||
| Do you think the political pressure is going to come for additional ballots? | ||
| You mentioned it. Moody's put, I think, 11 of the top 11 regional banks On essentially downgrade and a credit watch, which is your point is kind of the basket of all the important ones in the country. | ||
| We've got a massive crisis right now. | ||
| Are they going to try to use their political stroke to have MAGA bail them out? | ||
| Of course they are. And Steve, they already have, right? | ||
| I mean, look at what we saw happen that first weekend. | ||
| Government never moved so fast as when the oligarchs cracked the whip, particularly the oligarchs of Silicon Valley. | ||
| So think of that first weekend, not very long ago now, just weeks ago with Silicon Valley Bank, because the venture capital firms didn't want to pony up their funds, even though They had more than enough liquidity to do so, but because they didn't want to, and because they used their Democratic congressmen and senators from the state of California to start barking loudly behind the scenes, not in public, behind the scenes at the Fed, at the Treasury, at the FDIC, they got incredibly quick action. | ||
| The kind of quick action, by the way, that the deplorables can never get when they're in trouble, for example, the people of East Palestine, They can never get that kind of government response. | ||
| But SVB got it right away. | ||
| Signature Bank in New York City got it right away. | ||
| I fear that now this is 3.0 unfolding before us with First Republic, which is headquartered in San Francisco. | ||
| So, you know, yes, these places unfortunately have disproportionate political power within the Democratic Party. | ||
| And because of that, they're going to get very preferential treatment. | ||
| But I will also point this out, Steve, because I think there's a certain paradox here. | ||
| There's a certain irony to this almost. | ||
| I think that tech, more than any other business group in the country, installed Joe Biden as president of the United States. | ||
| Notice I don't say help elect him. | ||
| I think they installed him because of the various actions the Zucker bucks spent all over the country, the censoring of the laptop from hell, the closing down of social media accounts and shadow banning of social media accounts that were hostile to the Biden candidacy, all of that. Tech largely installed this man as their chosen president. | ||
| He then turned around, though, and instituted policies which bit tech first and so far fiercest regarding inflation. | ||
| Tech layoffs in the Silicon Valley area, over 100,000 layoffs and counting in that industry. | ||
| Now, some folks out there in the audience might say, good, well, I want Google to suffer. | ||
| I want Microsoft to suffer. | ||
| And I understand that mentality, but realize that, unfortunately, the pain is ubiquitous. | ||
| It's spread throughout the economy. | ||
| And particularly now that we're talking about the smaller and the regional banks that, again, are just the lifeblood. | ||
| They are really the financial lubricant for an economy to make the economy hum. | ||
| That is the financial fuel, the credit fuel that the country needs. | ||
| We now have a significant credit crunch going on already unfolding in this country. | ||
| By the way, I can prove that again. | ||
| I like to show charts. If we can show chart number two, please. | ||
| Let's show the deposit base of the banks in this country. | ||
| This is since Biden took office, and this is from the Wall Street Journal since January of 2021. | ||
| In the middle line there, the black is all banks. | ||
| The lower line, the darker blue, is large banks, and the top line, the lighter blue, is the small banks. | ||
| The deposits have actually been trending downward for some time before things got to this current crisis stage. | ||
| But now that they've gotten to this crisis stage, they're rolling over very, very materially. | ||
| And small banks, not surprisingly, much worse off than large banks. | ||
| So, Steve, this is the definition. | ||
| What you see on that chart right there, this new downward trend, that rolling over, this is the very definition of a credit crunch. | ||
| Okay, keep that if if the guys in Palm Beach can keep the can keep that chart up for a second. | ||
| This I mean, Cortez, this ought to show you to your core because this shows you when I talk about a lost decade, I mean, we're just not going to wave a magic wand. | ||
| What Biden and these guys have done is so horrific. | ||
| And that's why this debate going on in Washington right now is so important about this debt ceiling. | ||
| Okay. And they're going to say, oh, it's not relevant. | ||
| It's all, this is just all a fake thing. | ||
| You've got to pay your past bills. | ||
| That chart Shows you that it's going to take a long time. | ||
| We're going to have not just the right policies. | ||
| You have to have the cojones to enforce it because it's going to take a long time to turn this around. | ||
| And right there is going to show you at a regional level, you're not going to have those robust, vibrant financial institutions available to provide credit to the small shop owners and the small entrepreneurs that are really the lifeblood of the economy, sir. Right. | ||
| Well, and Steve, listen, like a lot of worthwhile endeavors in life, finance works this way. | ||
| It takes a long time to build up a good capital base, to build up significant savings. | ||
| It doesn't take long at all, unfortunately, to destroy savings, as that chart, unfortunately, shows. | ||
| And again, too, even before the current crisis, before things got really dire in recent weeks, It was already trending downward. | ||
| And think about this, Steve. It was trending downward. | ||
| Bank deposits were trending downward while Joe Biden was pumping an absolutely exorbitant amount of money into the economy, money we didn't have, money we were borrowing through the absolute profligacy of the federal budget. | ||
| So despite that profligacy, it wasn't finding its way into bank accounts. | ||
| Why? Because people had to spend it. | ||
| Because Biden's inflation is so pernicious, it's so punishing, and particularly for middle and lower income Americans, that even if they were seeing additional funds flowing into their account, it wasn't enough. | ||
| It wasn't enough to keep pace. | ||
| Hence why real wages, meaning your income adjusted for inflation, real wages, have now been falling every single month for over two years. | ||
| The worst streak in American history. | ||
| So that is also a major input. | ||
| Into why we see that very unfortunate chart with the money rolling over. | ||
| But you're exactly right, Steve. This isn't something that can be fixed quickly. | ||
| You can destroy a house in a day, but it takes months or even years to build a beautiful home, to rebuild the capital and the savings of the United States. | ||
| We can do it, and we have to start doing it. | ||
| We have no choice. But make no mistake, this is an arduous task before us because it's easy to destroy, very difficult to build up. | ||
| We told about it. | ||
| The financial structure of the world has shifted to these negative and zero interest rates, and once Biden had the inflation, it all changed. | ||
| You could wreck this, and it takes you years and decades to go back. | ||
| Cortez, when people think of you, they think of some of the sayings you have that cut to the chase. | ||
| Price is truth. The other one is the trucks don't lie. | ||
| That's right. Talk about the trucks don't lie. | ||
| And I'm borrowing from my fellow Colombian, Shakira, who says that hips don't lie. | ||
| Well, trucks don't lie. | ||
| And what I mean by that is when things are getting shipped, the economy is healthy. | ||
| When they're not, it's not. I mean, it's really, really that simple. | ||
| And we talked last week on War Room. | ||
| I presented some of the evidence from JB Hunt, which is the biggest trucking firm in the country. | ||
| And their CEO had extremely negative comments, both about the present situation and the outlook. | ||
| What he was specifically citing was the fact that they cannot raise rates on their customers because of a lack of demand, particularly at the consumer level, and yet their input costs continue to soar. | ||
| Particularly as it pertains to fuel for a trucking company. | ||
| So they're in a financial vice, just like so many American families are. | ||
| Again, it's sort of a corporate reflection of real wages going down. | ||
| It's real earnings going down for a corporation. | ||
| Well, we got more evidence of that today, that that was not J.B. Hunt specific. | ||
| It wasn't even just sector-specific to only that part of trucking, but rather shipping in general, because UPS, one of the most ubiquitous companies in the American economy, a giant of commerce in this country at every level, from individual e-commerce all the way up to wholesale trade. | ||
| UPS, with extremely disappointing news, stock got hammered right out of the gate you know again overnight into the morning session today and this is a troubling sign for the economy and another data point affirming my thesis which is that trucking is a leading indicator and as a leading indicator if we pay attention to the metrics of trucking and to the comments of the people who are deeply involved in that business We see that the consumer is spent and that the United States economy, | ||
| unfortunately, is significantly decelerating. | ||
| That is the reality right now. | ||
| So, you know, all of this, though, points back again. | ||
| It's not just the business cycle. | ||
| It's not just bad luck. All of this points back To the created crises, plural, of Joe Biden, when it comes to the economy, chiefly he created the inflationary crisis two ways. | ||
| Number one, he attacked domestic American energy production as really his first act in office. | ||
| He did the dirty work of the Green New Deal radicals. | ||
| Secondly, exorbitant borrowing and spending that shot interest rates through the roof. | ||
| Cortez, I'm going to ask you. I know you're busy. | ||
| I'm going to ask you to hang in for a little bit of the next block. | ||
| Short commercial break. Steve Cortez is going to join us the other side. | ||
| Also, Ed Dowd is going to come in. | ||
| He's one of the first guys to call this. | ||
| Also, he's got some, I don't know, grim news, but reality check. | ||
|
unidentified
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Next in the War Room. War Room. | |
| Here's your host, Stephen K. Band. | ||
| Okay. Birchgold.com slash Bannon. | ||
| Go check it out right now. | ||
| Get the third installment of The End of the Dollar Empire. | ||
| I think we've been putting this out now for two years. | ||
| The third installment just came out. | ||
| The Debt Trap. It'll get you. | ||
| It's like ripped from today's headline. | ||
| It'll get you totally up to speed and everything you need to know about this really historic fight we're having over the debt ceiling right now. | ||
| We're going to get to more of that with Steve Cortez. | ||
| Make sure you go check it out. | ||
| Also, we had Philip Patrick on saturday and philip is going to join me again this saturday philip walked through the central banks buying gold historic level in uh 2022 and starting off in 2023 we'll have a whole update on that but you can get all the information that by going to burstgold.com slash bannon and make sure that you get uh everything related to the 401ks the iras all of it but the information that they really walk you through on precious metals make sure you do that today Cortez, | ||
| Biden announced this this morning, and he comes after MAGA extremists, which I think kind of means Cortez and Bannon and others in the world room, contributorship in the posse and MTG specifically. | ||
| But we're in this historic fight, and this fight's what it's about. | ||
| We can't worry about 2024 right now. | ||
| We've got to worry about what's in front of us, and this is a historic fight. | ||
| You've got Speaker McCarthy, and I give a hat tip to Speaker McCarthy. | ||
| He's got a different mandate and job than we have here at the War Room. | ||
| I mean, we pride ourselves on being the dead-enders. | ||
| We pride ourselves on being that anchor to the hard right of all the policies and making people come our way to get the policies we believe are correct. | ||
| We're dead-enders in that one-penny increase to the debt ceiling, prioritization of payments, and let's have massive cuts now. | ||
| But you can see the issue, and I think he's actually doing a good job. | ||
| I mean, Russ Vogt's even kind of signed on to his plan, the four-and-a-half trading, the cuts. | ||
| Go back to the 2022, we'll give him a trading and a half, but we'll fight this fight again in the early part of next year. | ||
| Part of the reason I want to have you comment, you've got these congressmen, and they're well-intentioned, but I think a lot of times they don't connect what they're talking about to really the economic and financial implications of that. | ||
| You've got a congressman down in Florida who's a great guy. | ||
| He's served his country. He's highly decorated. | ||
| He's a neocon. | ||
| But they're talking about radical increase in the defense budget. | ||
| And look, I'm a former congressman. | ||
| I'm a military guy, and I say, hey, look, we've got to be thinking of non-kinetic. | ||
| That's where I got doubt here, and we did the conference on the Third World War in the early years to say, hey, look, victory without bloodshed. | ||
| Let's do it like Reagan did it. | ||
| Use economic power and technological power to do it. | ||
| Steve Cortez, your thoughts? | ||
| Yeah, so Mike Waltz, I think the other congressman you're talking about, and I don't know if we had that tape, we could play it, but he was on Fox News, and he said that we need a Reagan-style defense buildup, a Reagan-style defense buildup, which I just thought, you know, number one, I think strategically that's wrong. | ||
| And you're exactly right, by the way, no doubting his personal honor and his personal bravery. | ||
| I believe he was a Green Beret. | ||
| He's clearly a tough man who should be admired and thanked. | ||
| Of course, for serving this country. | ||
| But he is a neocon and he wants to fight all over the world. | ||
| He wants intervention all over the world. | ||
| He very much has that mentality that we in the America First movement reject because we believe in an America First foreign policy of realism and restraint and non-interventionism. | ||
| It's one of the hallmarks of our movement. | ||
| And so we have a very different view. | ||
| But to connect this back to the economy, Steve, Even if his prescriptions were a good idea, which I certainly think they are not, even if it were, we can't afford it, Steve. | ||
| Okay, so we have to deal in the realm of harsh economic reality. | ||
| And when we look at the budget, when we look at inflation, when we look at the economic crisis that the United States is suffering right now in the cold light of day, the reality is, even if you have neocon tendencies, Even if you do believe that the world is sort of a chessboard that should be run by folks from the foreign policy establishment in Washington, D.C. Even if you think it's smart to massively enlarge NATO beyond its historic boundaries. | ||
| I think none of that is the case, but I'm just saying for the sake of argument, even if you believe in all of that, Steve, you have to be a grown-up if you're in a position of power right now and say we have $32 trillion of debt and counting. | ||
| We are in a deep economic crisis, and therefore, even on the national security side, we have to significantly prioritize how and where we spend our resources. | ||
| And I think you're exactly right, Steve. | ||
| The idea that we should spend all of it preparing for a kinetic war, we have to be ready for a kinetic war. | ||
| Of course we have to be ready for the worst case scenario. | ||
| But the idea that's where most of the attention and most of the spending should go, I think is just frankly a luddite vision. | ||
| This is a very new world of information warfare, of monetary foreign exchange currency warfare, of propaganda. | ||
| It's a very, very different world. | ||
| It would be such a failure if we have to get to kinetic war, for example, against the Chinese, because we have so many levers at our disposal, particularly right now. | ||
| We may not have some of those levers in a few years. | ||
| But we have them now at our disposal to properly pressure and coerce and convince the Chinese to do the right thing vis-a-vis American interests without firing actual shots. | ||
| And so I think it's important for us to connect the dots here. | ||
| And by the way, in terms of connecting the dots, you know what we could really use right now in the United States at a time when we see banking deposits crash? | ||
| We could use the $100 billion plus that we are spending on Ukraine to escalate a regional Slavic struggle that has no discernible And by the way, to connect both of these discussions, the national security one and the financial discussion, to the corporate media, I believe one of the reasons at least, might not have been a primary reason, but I think one of the reasons that Tucker Carlson was taken off the air is because when it comes to legacy media platforms, Steve, he was the only figure of any significance at the legacy media platforms. | ||
| Who was willing to talk against this war, against this escalation, and against the narrative of the foreign policy establishment of Washington, D.C. You have certainly been the most significant force, I think, out there, period, in all of media, making the case for an America First foreign policy and against escalation. | ||
| But when it comes to the legacy platforms, it really was just Tucker. | ||
| So with him taking off the field right now, there's just a void. | ||
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unidentified
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There's no one in those platforms now who's willing to even talk about sanity in the Black Sea. | |
| Cortez speaks truth to power. | ||
| The only guy in prime time that was anti-Ukraine and anti to the heart of it. | ||
| Why are we even there? | ||
| I mean, Tucker would have the guest on and really walk through the details and they hated it. | ||
| That's definitely one of the reasons. | ||
| And paying this contract out is to shut him up for a couple of years. | ||
| The Murdochs are, look, the Murdochs are evil, but they're smart. | ||
| That's Lucifer, remember, Lucifer, plenty evil, smart and cunning. | ||
| So that's what we're dealing with. | ||
| Cortez, how do people get to all your content and follow you on social media? | ||
| I'm going to have you back on tomorrow and next time we're going to talk about this, the actual fight itself and McCarthy and what direction we should be taking because there are probably going to be votes later in the week. | ||
|
unidentified
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How do people get to you for all your analysis? | |
| No lack of action this week, that's for sure, Steve. | ||
| Please find me at CortezSteve, Cortez with an S, on the Twitter, and stevecortez.substack.com. | ||
| Thank you so much for having me, Steve. Appreciate it. | ||
| Thank you, brother. Let's go ahead and play. | ||
| I got the Ed Dowd on. | ||
| I got a couple of great cuts, so let's go ahead and play the cuts on Ed Dowd. | ||
| So war is the only palpable narrative that populations will accept to inflate with proper propaganda. | ||
| That's the only narrative that people will buy. | ||
| You can't say, we're going to do this to save the rich. | ||
| If the oracle, Warren Buffet, has told you war is coming, I'm telling you war is coming. | ||
| Believe it. It's not conspiracy theory. | ||
| This is what's going to happen, unfortunately, unless We can figure out a political solution in this country, which at the moment I'm a little cautious, but we'll see what happens. | ||
| Okay, Ed Doubt joins me. | ||
| Ed, you came really to prominence in the media because you put your analytical skills broader than that. | ||
| You've always been a big star in the business media, but in a broader context because you put your analytical skills to work. | ||
| about the debacle of the vaccine. | ||
| But you're back to your wheelhouse, and it's quite scary. | ||
| We had nothing but prominent speakers over the weekend at World War III, the conference in the early years. | ||
| But I can tell you from people texting me, and we had, what, 300 war room posse members there. | ||
| You shock people. Walk me through your current assessment of the economy. | ||
| You're the first guy to call to me the massive downturn we're going to take. | ||
| You've seen what's happened to the banks. | ||
| You're seeing they're all on credit watch now. | ||
| The regional banks, we just walked through the deposits. | ||
| They're getting crushed, and that's the lifeblood of the economy. | ||
| Where do we stand on all this, sir? | ||
| So when I went to the conference this weekend, I wanted to kind of Bring people through the story of what's happened historically, where we've been in the past, where we are now, and where we're going. | ||
| I want to build on what Steve Cortez said about the credit crunch. | ||
| If Cameron can throw up the M2 chart slide from my presentation. | ||
| Basically, M2 money supply, year-over-year growth went negative in November of 2022. | ||
| It's the fifth time this has happened since we have M2 The other four times resulted in historical bank failures and financial panics. | ||
| The last time we had one was 1930. | ||
| So this is a big, big deal. | ||
| And I suspect the reason we haven't had one of these events since 1930 is because we became the world reserve currency in 1944. | ||
| That allowed us to export our credit Then we had the petrodollar in 1971 with Nixon. | ||
| So this has been a 78-year cycle of credit expansion. | ||
| And people get confused on credit. | ||
| They think it's the money supply stock. | ||
| It's not. It's the flow. | ||
| You need constant growth in credit to keep the thing going. | ||
| And we just went negative year-over-year growth. | ||
| And I said, historically, this has been associated with bank failures. | ||
| And, you know, we just had three. | ||
| Signature Bank, Silicon Valley Bank, and Credit Suisse. | ||
| Seemingly out of nowhere, you know, I've been in the markets for a long time. | ||
| Bear Stearns was rumored to go bankrupt for months on end in my world. | ||
| Silicon Valley Bank happened in a week. | ||
| The speed with which this is happening is quite alarming. | ||
| Steve Cortez today talked about First Republic Bank down 30%, down 92 % from the top. | ||
| So what the Fed did that weekend and the Treasury Department was basically a big come-to-Jesus moment for them. | ||
| They came up with the bank term funding plan, which is nothing more than some loans. | ||
| So I suspect we have more bank failures in front of us. | ||
| And my team, Carlos, Yuri and I, have come up with our economic forecast. | ||
| And we put out a report a couple of weeks ago suggesting that the recession that's coming will be hard in the third and fourth quarter. | ||
| And it's looking like at least a 1990-91 SNL crisis if it doesn't go to the Senate, which can you borrow the door if that happens? | ||
| Hang on. I want to get into all that. | ||
| We've also got Bradley Thayer. | ||
| I think we're going to get Sean Foyt at 6. | ||
| If we can't, I'll get Sean. | ||
| He's been accused, I don't know, even in the accusation about being a Christian nationalist, but I want to keep Ed down. | ||
| We've got a lot to go through. about what the reality, the signal, not the noise, in the world's economy. | ||
| next War room. Here's your host Stephen K. Vance Okay, welcome back my pillow comm promo code war room I know sometimes the report you get on the war makes it tough to sleep That's why you need to sleep to the sleep of the Josh, and you do it on the products of MyPillow. | ||
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| Go to our square, mypillow.com, promo code WARROOM. Ed Dowd, I want to go back. | ||
| Why is M2 important? | ||
| What does it track? These negative numbers had since November. | ||
| Why are they so unique? What does that portend mean? | ||
| And then you and your team have called and said, hey, we don't hear the happy talk. | ||
| This was last year. You said by second quarter, end of second quarter, third quarter, we're going to be in it. | ||
| And don't believe the happy talk you're hearing from the guys on CNBC. So I want to connect M2 that with what you guys are seeing in your current forecast. | ||
| Yeah, so M2 is super important because it's the money supply, but it's not the supply. | ||
| It's the flow. | ||
| And every time growth year over year has gone negative, There's been systemic bank failures. | ||
| And it's only happened five times since 1868. | ||
| Last time was 1930. | ||
| And interestingly enough, every time this has happened, we're already in crisis. | ||
| So despite the happy talk from the mainstream media, the war room, you and I know, we're in a crisis. | ||
| And the crisis is now starting to manifest in bank failures and a hard, hard landing in the economy. | ||
| Carlos, Yuri and I, our work suggests that we're going to see a recession as bad as the one we saw with the S&L crisis, currently with our economic early cycle indicators, and it's going to probably bottom third or fourth quarter. | ||
| And when that hits, tax receipts are going to go lower. | ||
| We have a budget deficit problem. | ||
| We're $500 billion approximately above where we were this time last year. | ||
| And so we're looking at a $2 trillion structural budget. | ||
| With tax receipts going down, budget deficit, I mean. | ||
| And so we're seeing a giant liquidity sucking sound coming out of the market in the fall. | ||
| Basically, this money needs to be funded somehow. | ||
| And if the Fed's not currently doing QE, they're doing QT, that money's going to come from risk assets and crowd out other investments. | ||
| The other thing going on, Cortez talked about this, the Fed raised interest rates from 0 % to 5 % literally in 12 months. | ||
| And the Fed reverse repo program is nothing more than them giving loans or money market funds giving loans to them, crowding out private investments. | ||
| So basically the Fed, 2.5 trillion reverse repo program, is the money market. | ||
| 40 % of all money market assets are overnight at the Fed. | ||
| The Fed has no counterparty risk, so the Fed is essentially crowding out I suspect the Fed reverse repo program, the economy going south has caused or contributed to this M2 situation. | ||
| So we're looking at deflation and they're going to have to stop that and they're going to try to reinflate. | ||
| And that's why I think war is coming. | ||
| Just a couple of things. When people talk about Bear Stearns and Lehman, they've been people. | ||
| They've been on watch. They've been arguing about that for a year. | ||
| Silicon Valley Bank signature and First Republic out of nowhere. | ||
| I mean, boom, like like a thunderbolt on a clear blue day. | ||
| Credit Suisse, people have discussed that, but the collapse of it. | ||
| And what the Swiss government had to do to save it and jam UBS and Credit Suisse together, these are extraordinary. | ||
| And these banks are not tiny. | ||
| SVB and Signature, these are some of the biggest banks in the country, and they were the second and third biggest bank failures. | ||
| So my point is, there's so much law of unintended consequences here. | ||
| You got Yellen, who's a clown. | ||
| You got Powell, who's over his head. | ||
| You got Biden and his economic council who are junior varsity. | ||
| We're hurtling towards this. | ||
| And I got to tell you, it is going to be flat out catastrophic. | ||
| The central banks throughout the world, this is where I've got the Birch Gold guys back on this weekend. | ||
| The central banks throughout the world These are not dumb people. | ||
| When they're in Tokyo and in Russia and they're pegging the ruble to gold, when they're buying gold and holding back their resources and saying, hey, they're going to a quasi-gold standard, it's because they have no faith, not in you and this audience, full faith and credit of the United States. | ||
| They have no faith of the financial and political leadership of this nation, Ed Dowd. | ||
| Yeah, so we're looking at a hard economic landing. | ||
| We're looking at deflation, but there will be a response from central banks and governments to fight the deflationary forces that have been unleashed. | ||
| And so I suspect that's why there's all this talk about a central bank digital currency. | ||
| We've got the FedNow program. | ||
| We've got the Biden executive order. | ||
| So they're trying to bring that in. | ||
| And Warren Buffett recently sold all his Taiwan semiconductor stock. | ||
| This man is not dumb, and he mentioned war as one of the reasons why. | ||
| China is in desperate shape. | ||
| They're one of the victims of the spending and the debt increases over the last 20, 25 years, and their economy is imploding. | ||
| They need a boogeyman. And they're going to start to rattle the sabers to take their own population's eyeball off them. | ||
| This is just classic, you know, Empire 101. | ||
| When you're in trouble, you create a boogeyman. | ||
| And so the sabre rattling in Taiwan is real and it's coming. | ||
| It's coming hard and fast. | ||
| So we see kinetic wars over the next several years, unfortunately. | ||
| Well, we looked—here's what—I know you've got to balance, but you know, heading into the 1920s and 30s, you had the rapid hyperinflation and big inflation, then followed by deflation. | ||
| They had run out of tools, and it kind of devolves into a regional conflict, a couple of regional conflicts that then metastasize into a global conflict. | ||
| That's exactly how this is playing out. | ||
| This is like we haven't learned anything. | ||
| This is the 1930s all over again. | ||
| And it's like we're inexorably going to be drawn to these regional conflicts that then metastasize with the financial crisis into a global conflict. | ||
| That is the Third World War of the early years, and we have a chance to stop it. | ||
| But it's this insanity that's going on in Washington, D.C. Ed, your closing thoughts and observations, brother. | ||
| Yeah, so since the great financial crisis, if you're an observer of financial markets, one thing we all noticed is that there's unprecedented coordination between central banks. | ||
| to cooperate with the Shanghai Accord, the secret Shanghai Accord in 2016 to kind of prop up the financial markets before the election. | ||
| What we're seeing now is a dissolution of this cooperation and we're going to every man for himself and this will manifest itself in currency wars at some point because this whole debt bubble, the release valve is currencies and I suspect that's the next crisis is currency crises and sovereign debt crises. | ||
| Brother, how do people get to your content? | ||
| You wrote the definitive book on this disaster, and if we can put that up, the disaster on this vaccine, which is all going to come and be part of investigations, lawsuits, all of it, that you really laid out analytically what was going on. | ||
| How do people get to all your economic reports, all your economic thinking, all of that? | ||
| Where do they go, Ed? Financetechnologies.com, spelled P-H instead of F. We've put out a lot of our economic reports for free at the moment on LinkedIn and Twitter and Getter, and it's also at our website. | ||
| I'm on Getter at Edward Dowd and Twitter at DowdEdward, and we're just constantly dropping stuff when we have relevant things to report. | ||
| Well, you guys have been ahead of the curve. | ||
| You and your team are pretty amazing. | ||
| Pretty amazing called shots. | ||
| Ed, thank you very much for taking time away to join us. | ||
| Appreciate it. Thank you, Steve. | ||
|
unidentified
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Have a great one. Thanks, brother. | |
| Do we have a call open for Bradley Thayer? | ||
| Okay. Hey, Dr. Thayer, you were one of the, and look, you've done more probably in putting forward in your last publication with Lin Chao Han and the other, your writing team, to really warn the American people. | ||
| That the CCP, they can't be dismissed. | ||
| And they're very serious. They're serious about the way they've controlled this great nation of China. | ||
| They're serious about how they control the people. | ||
| And they are not just a formidable enemy. | ||
| They are a formidable enemy that happens to be at war with us. | ||
| And we have a political and business and cultural elite that refuse to address that. | ||
| Walk us through your presentation that you gave out in Torrance in the LA area this weekend, sir. | ||
| Hi, Steve. It's great to be with you again today. | ||
| I'm pleased to do so. | ||
| The thrust of my argument is in order to understand the Chinese Communist Party, you need to think like a communist as they do. | ||
| You need to understand their ideology, you need to understand why it's evil, but you need to grasp that they're determined to destroy Western capitalist system that is to target the United States for destruction and to replace essentially the free order that we created with their communist tyranny. | ||
| Just as they oppress the Chinese people and have done so since 1949 when they came to power, and that's when they declared war against us, so too they want to dominate the rest of the world. | ||
| So when we think as they do, when we think like communists, we're going to be able to understand why we're heading towards an inexorable clash with them. | ||
| They're driving it. | ||
| They're determined to destroy us. | ||
| And as you said, we've been very slow to pick up on that. | ||
| We've been very slow to respond to their actions in what's a classic case of threat deflation. | ||
| We consistently underestimate The threat that China poses for a variety of reasons. | ||
| But one big reason is because we don't understand their ideology and their determination to destroy us. | ||
| And as a consequence, we've allowed them to grow year after year, decade after decade. | ||
| And now we're in a fix. | ||
| We're in a situation where We can no longer ignore this threat. | ||
| We can no longer ignore the danger. | ||
| Hang on. | ||
| I got a couple of minutes here and then I got six minutes or so on the other side. | ||
| If this happened every so often, That we misplayed this or didn't think it through about their determination and that they are godless, atheist, Marxist, and they are determined. | ||
| The one thing you talk about from the Long March, these people, the cadres and the factions that lead it are the hardest, toughest, meanest people on earth. | ||
| To fact, they don't care how many Lao Bai Jing, they don't care how many Chinese, they have to slaughter In order to keep control, we've seen that through Great Leap Forward and the famine and the Cultural Revolution. | ||
| They're absolutely heartless when it comes to their own people. | ||
| How have we gotten it? | ||
| You know, and your presentation is so amazing. | ||
| When I sit there, I go... It can't just be happenstance that our leadership is so clueless that they make the same mistakes again. | ||
| We have consistently, since the World War II and the Chinese Civil War afterwards, and when they took power, we essentially gave them power in 1949, but then over Tiananmen Square. | ||
| If you go back and look at May of 1989, The Chinese people, their own courage of these students and workers and peasants that came together and bonded in Beijing and other cities around China, they were this close to freedom. | ||
| They were this close to what eventually those dominoes fell, the Berlin Wall fell, Chiescu and Romania fell, it all fell. | ||
| Driven by what they did in Tiananmen Square. | ||
| In the month of May, you could see, just like in 1775 and 1776 in this nation, that freedom and people standing up against overwhelming odds to do it. | ||
| The Bush administration, the Bush regime, then 41, back the play of Deng Xiaoping and these absolute Mert Li-Ping and Deng Xiaoping, the biggest murderers and assassins and hardcore old school communists that internally would say our number one focus is to destroy the Americans. | ||
| We have always, our elites have always backed the Chinese Communist Party. | ||
| And there's something not right there. | ||
| It doesn't make any sense. | ||
| You can make that mistake once, you can make that mistake twice. | ||
| You can't make it consistently for 70 or 80 years and there's something not being up. | ||
| Bradley Thayer, Dr. | ||
| Thayer, we're going to ask for the answer when we return on one of the great questions. | ||
| Of American national security and foreign policy over the last, I don't know, century? | ||
|
unidentified
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| Thayer, help me out here. Brother, I revere you and the work. | ||
| You and Lin Chao Han, your work has just been amazing over the last couple of years. | ||
| You've really added to this conversation and dialogue in the United States. | ||
| But I got to tell you, I don't get it. | ||
| I just don't get it. | ||
| And it even got worse after Tiananmen. | ||
| I don't get our elites. | ||
| It has to be willful blindness at best, sir. | ||
| Steve, this is the biggest mistake that we have made. | ||
| We have allowed our enemy to rise with our assistance. | ||
| And we have consistently avoided any effort to attack that enemy, to replace the Chinese Communist Party and its rule in China. | ||
| As you said, 1989 was one of those points. | ||
| And that was a failure of the Bush administration, first Bush administration. | ||
| Clinton administration compounded that failure when they abandoned linking human rights to most favored nation trade status renewal. | ||
| And then also allowing the CCP, allowing China into the World Trade Organization, which was negotiated under Clinton when China came in in December of 2001. | ||
| So this is the biggest mistake that we've made. | ||
| And why did we make it? | ||
| Well, I think we made it because of the power of Wall Street, the power of the financiers, the power of Silicon Valley. | ||
| Elite capture is a big component of how this happened. | ||
| We also, this mistake is also the result of the genius of Deng Xiaoping, And his recognition that through his hide and bide strategy, that is where China essentially hid its growth, never talked about it, | ||
| while facilitating U.S. investment, U.S. manufacturing, essentially sucking U.S. manufacturing into China, greatly helped China's rise and allowed it to do so without any balancing from the United States, which is a remarkable thing to have happened in international politics, that our enemy arose and we didn't do anything about it. | ||
| And so those are big parts of why this happened. | ||
| To that, I would add the change in the balance of power, the fact that the Cold War ended, the Soviet Union died, And the United States is left standing. | ||
| And we're incredibly powerful. | ||
| And at that time, in 1989, 1990, 1991, China just doesn't look like a threat. | ||
| And so, as a concept of change in the balance of power, we have massive threat deflation. | ||
| And we just don't care anymore about peer-competitive threats against enemies. | ||
| That just disappeared. | ||
| Hang on. We only got a couple of minutes. | ||
| Here's what I'll get. With all the think tanks and the smart people at Harvard and these other places and the government, the CIA, it's obvious if you study Chinese history that Deng Xiaoping were true believers and they literally hated The freedoms of the West. | ||
| And they knew the freedoms of the West. | ||
| They talk about separation of powers. | ||
| It was anathema to how they would roll. | ||
| They understood if any of this came about, they would be destroyed. | ||
| The Chinese people would rise up. | ||
| And that's why Tiananmen was a massacre. | ||
| It was a massacre. And afterwards they said, we got to put this down. | ||
| Anytime this rises, it must be. | ||
| How did our elites miss the central point that these people, this Chinese Communist Party, is all about the dictatorial rule of their own people and actually going after the West, hammer and tong, with no back down and no relief. | ||
| How did they miss that? They didn't understand the enemy. | ||
| They didn't think like communists. | ||
| If they had fought like communists, they would have understand that communists see the world as an inexorable clash. | ||
| They're going to win. They're going to defeat the West. | ||
| They're going to defeat the United States. | ||
| History is on their side. | ||
| And so it was the failure of presidential leadership. | ||
| It was failure of national security leadership year after year, decade after decade, Steve, because they chose not to understand the enemy and take the enemy at his word. | ||
| They didn't understand communist thought. | ||
| And so that contributed to it. | ||
| But also, Steve, the think tanks weren't generating the right analysis. | ||
| They weren't generating an accurate assessment of the China threat because think tanks are funded by investors. | ||
| And those investors have interests in China. | ||
| So we see here, again, the genius of Deng Xiaoping. | ||
| By sucking in Wall Street, by sucking in American manufacturing in Silicon Valley, right, what did he do? | ||
| He ensured that there was no incentive to recognize the China threat. | ||
| Your paycheck depended upon, in fact, not recognizing the China threat. | ||
| So we had this generational threat deflation where we consistently underestimated China's growth and the threat that it posed. | ||
| We didn't take communism seriously. | ||
| We didn't understand their ideology and the fact that as communists they put power Before everything else. | ||
| That is, Xi Jinping destroyed Hong Kong, right? | ||
| Why did he destroy Hong Kong? | ||
| Hong Kong is the goose that lays the golden egg. | ||
| And yet he's killing it because he favors power. | ||
| He favors control over Hong Kong more than he favors wealth. | ||
| Even the cash. | ||
| Real quick. We'll get you back on more depth. | ||
| Right now, I want everybody to get to your book, everybody to get to your social media and your website. | ||
| Where do they go? Be fair at centerforsecuritypolicy.org. | ||
| And I'm on Getter and Truth at Bradley Fair. | ||
| Thanks, Steve. Thanks very much. | ||
| You've got to get the latest book. | ||
| It's absolutely incredible. | ||
| Your presentation at the conference was just amazing. | ||
| Okay, short commercial break. | ||
| Hang in there. The next hour is going to be actually more intense than this one. | ||
| Guaranteed. Short commercial break. |
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