Can Trump s Fed Chair Choice Save the Dollar- With Phillip Patrick
Can Trump’s Fed Chair Choice Save the Dollar?
In this episode, we’re joined by economist Phillip Patrick to break down what a potential Trump pick for Federal Reserve Chair could mean for the U.S. dollar, inflation, interest rates, and global confidence in the American economy.
We examine how much influence a Fed Chair really has, what markets typically react to during leadership changes at the Federal Reserve, and whether monetary policy alone can address deeper structural economic challenges. This conversation cuts through political noise to focus on economic fundamentals, historical context, and realistic outcomes.
Is a new Fed Chair a path to stability—or are expectations misplaced? Watch to find out.
With us today we have Philip Patrick, the economist from Birch GOLD, and he's been with us before and we're going to be talking about something very important and that is money.
What is money?
And uh, I tried to get that straight at one time from Bernanke and I said what is gold money?
And he said no.
So i'm confused now, but we have a really brilliant economist with us today.
Uh Philip, and thank you for being here.
We have an interesting subject today on what's going on with the economy and what's going on in the marketplace.
Welcome to the program.
Thank you for having me, dr Paul.
As always, it's an honor.
Wonderful, you know.
And early today uh, I came across this announcement which everybody else it sounded like.
It was an announcement that he has been picked and that Trump has picked somebody to be the Federal Reserve Board chairman, and that's Kevin Marsh Wash.
And uh I, I don't I, I know the name and all, but I don't know a whole lot about him.
But uh, it's uh, it's interesting.
And I, the first thing, though I, I think Philip, we have to mention that this is not a final deal.
Who knows what's going to happen between now and when he's approved, but it is interesting to talk a little bit about him.
Have you been uh uh aware of anything that he did differently or have any comments to make about uh?
About Marsh, Uh Wash?
I'll make, i'll get it straight yeah, and what his opinion might be on monetary policy.
Yeah look, it's an interesting pick.
The guy isn't, as far as I can gather, a bomb thrower.
He's a former FED governor.
He's deeply fluent in in the institution and he's well regarded on on Wall Street, respected in in policy circles.
Interestingly, he's also been a consistent critic of post-2008 FED overreach, especially sort of quantitative easing and balance sheet expansion, and I think that combination really matters.
So it's an interesting pick because we know president Trump wants uh, lower interest rates and, looking at it, Kevin Wash may not be the guy necessarily to do it.
Certainly he's opposed to qe.
So it's an interesting pick, but I think it's looking like a good one.
So we'll see how it shapes out.
I have to say i'm not envious of the job he has.
The FED are in a very tough situation at the moment, trying to balance sort of rising prices and employment.
It's a difficult job, so I don't envy him, but he's an interesting pick.
Well, it is a surprise, because it doesn't sound like the person that would be most obedient to the desires that Trump expresses, you know so often.
But who knows about the strategy?
Maybe pick somebody like that that Trump can always say hey, you know, he's my friend and he he's.
He supports sound economic policy.
Then at the same time uh, we find out it'll be somebody different, but time will tell.
There'll be a lot of gabbing about it, uh.
But but you know, this week I noticed Something a little bit different because, you know, Powell and Trump were always going at it.
But because the Federal Reserve FOMC 33 was meeting, they were sort of not arguing so much because both of them said something about, you know, it's a good thing to have a good dollar.
You don't want to weaken a dollar.
And then also when they talked about the metals, both of them seemed to agree, oh, they don't have much to say about it, you know, and they're not that important.
And they dismissed this.
So that was interesting to me, not so much their position, but they weren't at each other.
So what their strategy is, we don't know.
But one part of the strategy of picking somebody to manage money to supply is do they know enough to do it?
And of course, our argument from the free market is they can't know what the interest rate should be.
And, you know, the one thing I've been using to make the point that the Federal Reserve is not even a good outfit to protect the value of the dollar.
In 1913, for a dollar, you can get a bag of groceries.
And I don't know how big the grocery bag was, but by taking that same bag that cost a dollar in 1913.
Today, we cost $33.
And they say, oh, those prices are going up.
They're gouging us.
They will never say, you know, the monetary managers at the Federal Reserve have been on a course of destroying the purchasing power of a dollar, and we have to deal with it.
We don't hear either one of them saying that.
No, you're absolutely correct.
I don't think, I think the bag today is a dollar, let alone the groceries.
So the Federal Reserve have been very bad stewards of currency, and we've seen it since the removal of the gold standard, since they check on government spending.
We've seen sort of inflation creeping up year on year on year, the value of the dollar decreasing year on year on year.
And obviously, it's, you know, that's exploding now with huge easing and everything else.
But yeah, it's a very tough, tough position for the Fed, right?
Right now, they're in a sort of bind, right?
They risk if they lower rates, inflation sort of rears its ugly head again.
If they keep rates high, they could really put a squeeze on the economy.
So the Fed are in a very, very tough position.
Like I said, I don't envy them.
It's interesting to see there was a couple of dissenters.
I think two dissenters on the Fed keeping rates static.
But I think ultimately it was the right decision.
But we'll see how Kevin Walsh does.
Look, what's important is getting some credibility back into the institution because the concern that we've been seeing is even as the Fed have been lowering rates over the last couple of years, borrowing rates have been increasing.
That is a sign that global demand for our debt around the world is waning and we're starting to being viewed as less trusted by the world.
And with $38 trillion of debt, we simply cannot afford that right now.
That's for sure.
You know, I mentioned that Trump and Trump and Powell sort of agreed, you know, a strong dollar is a good idea.
But they also, then you also have the Trump people arguing the case that you have to lower interest rates.
But they never connect the fact that, well, how do you lower interest rate?
Well, you do that by printing more money and buying more government debt and encouraging the whole system to not worry about these huge deficits.
And that's why we're in this mess.
But the contradiction never seems to be necessary of an explanation.
But also the journalists don't particular look at it the way we might look at it from a more fundamentalist, hard money, protected currency like the founders wanted and put into the constitution that we should have.
So it's something that inconsistency, I guess is my point, is not a concern of the people that are generally in politics, let alone at the Federal Reserve.
Yeah, I agree with that.
I also think it's a reflection of the amount of problems that we do have.
Like, you know, we need a strong U.S. dollar to incentivize the world to continue to hold dollars, because if they don't, they're going to start dumping them and borrowing rates will go astronomical.
People have to understand debt service today is 23, roughly 23% of our total revenue is going to pay the interest on the debt.
Like we are at breakpoint.
If, you know, we're amassing $2 trillion of more of debt every year.
And if interest rates go up on the back of waning demand, it's an unsolvable problem, right?
But at the same time, they realize we have a revenue issue.
They want to bring back manufacturing to the United States.
Well, you know, to make your exports more attractive, we need a weaker dollar.
So, you know, there's so many problems that are hitting us at once.
I think the administration and policymakers are getting pulled in different directions.
And it's hard to work out what the number one, you know, it's hard to sort of prioritize a list of issues in the current climate.
There are so many.
You know, they talk about a strong currency and interest rates and the various natures of a currency.
But they will mention the fact that the dollar has been the reserve currency of the entire world, especially since World War II.
And this is a big deal.
And they recognize it to a degree, but they're not saying how that comes about.
They don't realize that is related to the whole process of the Federal Reserve being built into finance deficit financing.
And deficit financing is there to allow the politicians to do whatever they want.
Kowtow to the people who want welfare, whether it's poor people welfare or whether it's corporate welfare and also get their way on foreign policy.
So they do this, but they don't want to connect it.
It's a maybe excessive government and they don't want restraints.
That's one thing for sure.
It's not so much that they want to give up on the restraints that they are put on them to a degree.
What they want to be able to do is be independent.
That's the term that they use.
And I frequently will say, yeah, the Fed demands this.
They want independence.
And if you have a Fed, it probably isn't the worst idea in the world.
But that's not what they're talking about.
They're not talking about being honest brokers and doing their very best to get a computer and tell us what the interest rate should be.
That's not what it's all about.
Independence means they want secrecy.
They don't want anybody telling anything because if the Congress had much to say about it, they'd have too many hearings.
Now all the hearing seems to be superficial and they don't get into this because we don't have enough people really being really trying to review the history of money, especially in the United States, why there is a big difference between the metals being used for money and just pieces of paper and fraud.
Many people remember the time I asked Bernecki trying to get him to talk about this issue.
I said, is gold money?
And he, you know, after that long pause, he says, no.
So we didn't get very far on the conversion of him thinking about looking at the Constitution.
Yeah, it's a very interesting.
You raise a number of interesting points.
But generally speaking, look, the Federal Reserve is a murky institution.
They have huge control over fiscal policy in the United States.
And as you rightly point out, there's very little accountability.
That in and itself is massively problematic, obviously.
Now, we do need to some degree, the institutions that control the purse strings have to be separate from the executive, right?
Because as you know, better than most, if politicians control the purse strings, they're going to push to spend time and time and time again.
So that's why, obviously, it's been playing out in this climate when it looks like there's too much pressure coming from the president on the Fed and the markets start to think, hey, you know, this Federal Reserve is not independent, the markets start to respond.
And we've been seeing that.
Trump's putting more pressure on Powell.
The more pressure he puts on, the higher borrowing rates go up.
So an independent central bank, I think, is important.
But I also think accountability is important as well.
So, you know, today, even with the correction, which was anticipated and understood, gold is still, you know, $5,000 and silver, $100.
And what people ask you, and if you, and I know you will get questions about this, how do you simplify it to get them to understand it, to understand the issue here?
Because, you know, some people say, well, it's just the bubble.
It's the rigging of the prices of, you know, the currency and that sort of thing.
But there is a real reason.
And I think one thing that they tend to do is they talk about what the prices are, but they don't talk about the value of the currency.
You know, that incident I referred to about, you know, what was a dollar like in 1913 and now it takes $33 to buy the same amount of goods.
But that is something that people can't understand because they really have to for us to solve this problem and accept it because the politicians don't want to admit it's us.
It's the Federal Reserve.
It's the Congress.
It's us bowing to all the special interests.
And even the poor people think they're a favored special interest or they want to be.
But the whole thing is, if they have run-up spending for the welfare system, it's the worst thing that they can do because they pay most of the taxes.
Oh, no, they don't pay income tax.
Maybe not, but they get the inflation tax.
So if inflation is going up at a much higher rate than they'll ever admit, that's all a tax falling on the middle class.
Inflation's Hidden Tax00:06:27
The wealthy, they don't sit around worrying about the cost of a loaf of bread.
But the poor people and the middle class people who used to be doing a lot better than they are right now, when you see these things happening, that's why to me, I think it's so valuable for people to try to understand the nature of money and what was intended by our constitution to maintain a sound currency.
It's so important.
Any student of currency understands that the history of currency is a history of devaluation and ultimately destruction.
There is no currency in history that has thrived over hundreds of years.
It just doesn't happen.
And actually, what happens most of the time is the currency gets printed into oblivion and it disappears.
And gold has sustained for centuries because it is a store of value.
And people have to understand that.
I always tell people, you can go back to the Bible, right?
And an ounce of gold would buy 400 loaves of bread.
Today it buys basically the same thing.
It's a little bit more than 400 loaves of bread.
But it's a very simple concept.
Gold's buying power really doesn't change over time.
The value of currency fluctuates against it.
And there are some very extreme examples in history.
I remember sort of World War I, Germany, an ounce of gold was 170 odd German Reichmarks.
10 years later, after a bout of hyperinflation, it took 87 trillion German Reichmarks for the ounce of gold.
So, you know, it shows you, I think, a concept.
Gold's price has no top to it because it is simply a reflection of the value of currency and currency has no bottom to it.
So, you know, it's that simple.
And if we're talking about a store of wealth, it's why central banks around the world prior to the 80s, gold was essentially, overwhelmingly the standard for international sort of savings accounts, if you will, because it cannot be printed, cannot be debased.
It doesn't lose value longer term.
Currency always does.
You know, in 1971, I believe that was an admission of bankruptcy because we had promised if you use our dollars, at least for the foreigners, they maintain that freedom.
We couldn't do it as American citizens.
But a foreigner could come in and put down $35 and they could get an ounce of gold.
And it worked relatively well.
Things continued.
And we've been doing this.
But there's been a steady erosion since 1971.
And people now talk, you know, about gold and silver or silver is this.
And it's not as much of a monetary metal.
And there seems to be some differences.
I tend to think I don't worry about the definition so much between the two because I see them as both as precious metals.
But other people see sometime a great deal of difference.
Now, the founders had to deal with this because they established a silver standard.
The Spanish mill dollar was a silver dollar, and that was what we modeled our dollar after.
But that is something that is ongoing.
But the founders decided, well, we would sort of legalize bimetallism and fix the price between gold and silver.
And it didn't handle that problem at all.
Matter of fact, it was sort of a nuisance.
It's not that you couldn't have gold and silver, but you'd have to have like two currencies there, you know, which certainly in the computer age, you could work with, you know, with transactions.
But I think that the whole thing about a major difference.
What's your opinion on that?
What kind of differences would you point out that I should be aware of?
Look, I viewed them in a very similar way to you.
I think they're both ultimately monetary metals.
They're both inflation hedges.
They both provide currency hedges.
I would say as modern technology starts to expand, silver's taking on another role.
Silver today is very necessary in everything from household electronics to ballistic missiles and everything in between.
It is a very important component for defense and everything else.
A big driver, by the way, we've been consuming for the last six years more silver than we can pull out of the ground.
So just based on traditional demand, consumption has been outstripping demand for the last six years.
What I think is sending it parabolic today is the global rush for AI.
A traditional server requires about 60 grams of silver.
An AI server node requires 180 grams.
Obviously, we're seeing huge investment globally in data centers, a trillion dollars in the U.S. at the beginning of last year alone.
So there is a global scramble now for silver.
And I think from a central government standpoint, pricing doesn't really matter.
This is about securing it.
The United States classed silver a critical mineral.
Last thing they classed as a critical mineral was lithium.
It went up 600% following that.
China have done the same thing and put export controls now out on physical silver.
They're the number two miner of silver in the world.
So I think we are seeing now a rush towards it being driven by defense and AI.
And I think that's changing the game a little bit with silver today.
Well, a lot of people now, when they see the hectic changes going on in the markets, you know, gold soaring, silver soaring, and you have the demand for silver for commercial reasons, all these things.
For the average person, you know, I pointed out that they suffer the most middle class if they're not involved in investment.
Rush Toward Silver00:03:06
But what can we tell the middle class people and the poor people on how to get involved?
What if they're convinced and they believe what we're saying that the monetary system is a mess and a new chairman is not going to solve the problem?
We're not going to get rid of inflation overnight.
We're not going to balance our budget overnight.
What can they do?
There has to be some way.
And of course, Birch Gold is involved with this as long as with the campaign for liberty, we get involved in trying to help people philosophically, you know, to understand and then do something.
So do you have a little bit of advice for that person that finds this a very difficult situation for themselves?
Absolutely.
Look, first and foremost, I think just watching shows like this keep people informed.
And the more informed you are, the better decisions you can make.
It is tough out there.
For a long time, wages have been trailing inflation.
So it's getting tougher and tougher for people to survive.
Obviously, if we're living paycheck to paycheck, there's not much we can do, right?
We've got to stand firm.
We try and curb our spending and we just forge ahead.
But I think for those who are in a fortunate position where they have an opportunity to put things aside for the future, I think it's a case of understanding the best way to do that.
And, you know, as we know, and you know better than most, Dr. Paul, sitting in cash in a U.S. dollar with inflation rising, with the dollar falling in value, longer term, we're going to see that purchasing power decline.
The idea with physical gold and silver, as we've said time and time again, as the cost of living increases, as the dollar falls in value, precious metals go up.
So they ensure that our purchasing power is preserved a year, five, 10, or 20 years from now.
And I think it's that simple.
And Burch Gold is involved in this.
Can some of our viewers contact and get some information from Burch Gold on what they might be able to do or at least think about it or get some more information?
Absolutely.
Thank you.
So all they have to do to get in is free information, nothing else.
They have to text Ron to 989898.
Again, text Ron to 989898.
That's going to get them access to free information kits on how and why to buy precious metals.
We talk about the current climate, the challenges in front of us, and how people can protect themselves.
So again, text Ron to 989898.
It's that simple.
Okay.
Philip, we're going to have to call it a day today.
And I want to thank you, Philip, very much for joining us again.
And I want to thank our viewers for tuning in for this special information about the markets, especially the monetary markets.
But I do want to thank all our viewers for tuning in.