저자: Kevin · 외국인
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연준 의장 후보(해셋·월러·워시) 중 월러를 가장 선호하며 금리 인하와 머니 프린터 사용을 지지한다고 평가. 디플레이션은 부채 부담 완화와 소비 유인 측면에서 나쁘다는 주장을 펼치고, 디플레이션 흐름을 유지하며 2032년 전후 마이너스 금리 가능성을 전망. 중앙은행 독립성 약화는 성장 둔화와 변동성 확대를 낳는다는 입장.
다듬은 글
Donald Trump officially has a short list of candidates for whom he might pick for the job of Federal Reserve chairperson. Uh in this video, I'd like to give you a quick breakdown as to my opinion on each of the three finalists. Note that these finalists do not include this guy. Uh which I actually think is a blessing.
I feel like the vast majority of us have only ever heard of David Zervos on this potential discussion that in some off chance he's on some random 11 candidate list for Fed chair. uh given that every time he speaks he solely speaks as a Trump knee bend and even goes as far as discrediting the importance of Federal Reserve independence which that's kind of a separate issue.
I suppose we could tangentially talk about that. I'm kind of grateful this guy's not on the short list. Now it's pretty late so I'm a little tired. Coupon expiration is coming up. I got to sit we got to sit here and change coupon codes. Honestly, we're probably going to do it first thing in the morning because I'm dead tired here.
I think I'm on like two and a half hours on average over the last two nights. We're just cranking because we got so much going on. I mean, house acts buying again. We got renovations going on. It's it's a lot. Uh but anyway, uh let's talk about the short list. And again, this guy is not on the short list.
Uh and just tangentially quickly know that countries you should you should already know this. Countries that don't support independent central banks generally grow slower than countries that support independent central banks. Uh they also tend to have more extreme business cycles because when the central banks act, they're deemed to be less credible.
And this all averages out in the form of lower growth. You could look at what happened in Argentina prior to Malay uh and the uncontrollable inflation. You can look at central banks that are very centrally controlled like in Russia or in China. You could look at Brazil. These are just other examples where you know these economies just grow either more slowly or dysfunctionally like the inflation we saw in Argentina before Malay or frankly the inflation that you see in Turkey just as an example where the central bank is also essentially commanded by politicians.
It's not good. This is a very, you know, quick sort of just tangential side note. We've gone into depth into why central bank independence is so important. Generally, it just bottom line comes down to markets impression of do we believe you're going to actually do and accomplish what you say you're going to do.
Uh this uh this is different from you central bank that's basically just going to cater towards what a politician wants, which in this case is lower rates uh in the face of potentially higher inflation. which would be bad because if you end up in a stagflationary situation, the Fed needs to break the back of inflation to avoid repeating what we had in the 1970s after, you know, we had presidents and price controls that actually tried manipulating the Arthur Burnses of the 70s uh and and uh essentially tried to turn America into the turkey of its time.
We went through that experiment. We ourselves learned the failures of central bank non-independence. Anyway, okay. So, that tangent now out of the way. Let's get into the short list. Again, that's meant to be more of a bottom line synopsis. There's a lot more we could talk about in that, but I want to save your time.
It's again, it's like 12 minutes to midnight here. All right. So, Trump says that Kevin Hasset, Worsh, and Waller are finalists for the Fed chair. Okay, this is good. We have a finalized list. So, what we've got is uh White House economic adviser Kevin Hasset, Federal Reserve Governor Chris Waller, and former Fed Governor, not Fed Chairperson Kevin Gorch.
I'm going to give you a quick synopsis on this on each of these people. And this is my opinion, so I purposefully have the don't sue me brochure because, you know, I don't want to come across as offending these people, but um I'm going to The best case scenario is we get Chris Waller. This guy actually has the balls to stand on his own two feet and not go wishwashy every single month, depending on which way the wind blows.
Ghoulspeed is a windb blower guy at the Fed. When the wind's blowing one way, he complains about inflation. Like now he's wind's blowing not in the favor of the job market. It's like fading flames in the job market and things are getting worse. And he's well, you know, I'm not convinced yet. You know, one month doesn't make a trend.
All right, we talked about that earlier, right? But he's the same guy that a year ago, last summer was like, oh, I don't know. I don't know, man. the job market could deteriorate. It's like which which one is it, man? Like put your feet on the ground and have some balls to actually stick with something.
You know, there aren't a lot of people who stick with something. Uh I stick with real estate, stick with Lauren, and I stick with my thesis that we are going into serious deflation, which is a good thing, right? Prices come down. Good thing for people who maintain their jobs. economically inflation is a bad thing or sorry deflation is a bad thing and a lot of inflation is a bad thing.
I did see a comment uh two days ago on a YouTube video they're like I I still I struggle to understand why deflation is a bad thing. I'll give you a quick tangential economic you know 20 second lesson on this. Okay, if you're going to buy this hairbrush and let's say it cost you $100 to buy this hairbrush.
If you know you need a hairbrush and it's $100 today and we're in a deflationary regime, I'm going to go extreme. Okay, we know this hair brush is going to be worth $90 next year. What's the rush? There's no rush, man. There's no rush to buy the brush. That's not what we want. This is America, damn it.
We want you to spend your damn money. I want you to look at this hundred $100 brush and be told convincingly that it will cost you $102 next year. So, you better damn well buy it right now. I mean, frankly, it like it's kind of like this brush could be the courses on building your wealth over at me.com coupon code.
We still got to change it. We raise the price over time. In my case, I believe we raise the price because we keep adding value, right? Like course members who were in there since 2017, you know, they were promised two live streams a week and uh you know, talk about real estate. All right, that turned into basically an average of five live streams a week with fundamental analysis on stocks, on real estate.
It turned into the alpha report. Like people just keep getting more and more value. Like people who are in the courses from 2017, feel free to leave a comment. like they've been watching lectures since 2017. And then when I release new Trumpomics lectures, they're going to get those as well. They're going be like, "Wow, here I am, you know, what is that 8 years later and Kevin's still providing us value for something I paid for eight years ago." But that's what I want.
I want people to go like, "Wow, okay, I keep getting value." And that's why the price goes up. So that's that's an argument for why our price goes up. But because the price goes up, people are motivated to lock in their price early. So inflation, some inflation does motivate buying. That's obviously good for GDP.
There's another factor though, debt. You have to understand the debt economics. The more people borrow money, the more GDP be a turning. In other words, the more G gross domestic product we can generate. Notice there's nothing in GDP that subtracts debt. There's nothing that says like, "Hey, uh, look, you spent a hundred billion dollar on chips.
How much of that did you finance? We're going to we're going to subtract, you know, the $70 billion of the hundred that you financed because, you know, that's debt. Now, we don't care, bro. You spent a 100 billy. We love you. You are contributing guess what? A full 100 billies to GDP. We love you. Nobody cares." So, what does inflation have to do with debt?
Well, inflation over time makes it cheaper for you to pay off your debt. This is why we can actually inflate away our federal government debt. We've never paid off all of our World War II debt. It just became barely relevant. You know, whatever $50 billion, you know, relative to the $ 35 trillion of debt we're in right now.
This is a fart. You know, we fart World War II debt on a regular basis. Nobody cares. we've inflated it away. It's the same thing with like a 30-year mortgage. You know, you ever get somebody who you heard they bought their place in the 70s or even the '9s and it's like, "Oh, yeah. You know, back in the '9s, I bought my house for $188,000.
Today, I'm selling it for $700,000." Like the people who got loans back then even, they're like, I don't I don't care if I I put 20% down on 188k property. Let's say they didn't refi it. Over time, that $150ish thousand of debt just became worth so small relative to the value of the asset. Doesn't really matter.
Inflation, which real estate helps hedge against, is fantastic to motivate people to buy and to go into debt. That is why the Federal Reserve has a 2% inflation target. It's not too much to where we're worried about, you know, stagflation and then the dollar loses credibility, uh, and then we have, you know, bricks currency concerns and we lose that ability to run our money printer to finance the wars and really whatever the hell we want.
Think about how wonderful that is to have a money printer. You print however much money you want and people still like believe your currency. Like the imag like the creation of fiat is just insane and people still believe it. They believe it because we got the guns, baby. We got the biggest guns. That's part of the reason.
This is like an economic lesson here. But uh so understand that that is why we have an inflation target. Deflation does the opposite. It hurts debt spending. It hurts GDP. And it hurts people's motivation to actually spend at all. Yes, deflation means prices come down. And typically when you have recessions you end up having deflation or at the very least very strong disinflation which is you know a very very slowed significant slowdown in in the inflation rate.
I am of the mindset that and I've said this very very consistently like typically if you go through what I say in my videos they're extremely consistent. Yeah I know people are like oh but but captain the tles that seem like they change on a daily basis. Well, you take it like have you ever looked at a newspaper?
Does that not change every single day? But there's consistent messaging. Uh this has been what it is consistent. Uh and my belief is that by 2032, and you could write this down. It's a prediction we made in 2022. Uh we will have interest rates that are lower than they were before COVID and we'll probably be in the face of negative interest rates.
That's the trajectory we're going into. That's why we're plowing so much money into house hack and real estate. you know, I I've got many millions of dollars in house hack and uh it's because I think when we get to like negative rates by 2032, the people who own the assets, you're going to be sitting on Golden Thrones, you know.
Anyway, uh not that that matters. I personally don't really care about Golden Thrones. Care about providing talent. That's why here we are in the middle of the night recording. So, uh okay. So, Wall has got balls. I like this guy. I actually think this guy's a serious economist. He's got an education and he's willing to use his economic perspective and data to actually provide leading support for what the Federal Reserve should be doing.
And for him, that's looking at things like, just as an example, he called it out himself, weekly ADP payrolls data to preview the weakness that is coming. He's been shouting it from a cliff, you know, to whomever will listen for weeks now. And sure enough, the jobs data was weak. He was right. He saw it coming and he's been calling for this.
So, good on him for essentially transparently providing his insights and saying, "Look, this means we need to loosen monetary policy. We probably need to get down 150 basis points at least." So, he's a guy absent recession that's going to get us to 3% interest rates in recession. He's also a guy that's going to get us to zero, the effective lower bound, the ELB.
We will get there very, very quickly under him, which is good. He's also a guy who's going to be willing to use the money printer, which is also going to be critical for getting us out of the recession. I understand this frustrates people. Yes, the Fed using the money printer, but you will be very grateful that the Fed is running the money printer when there's blood in the streets.
Okay, then next we've got uh Mr. Walsh. Okay, this guy, I don't like him as much as Waller. My favorite out of this list of candidates is Waller by far. So, we're going to put a green on Chris Waller. Uh, and then we'll have yellow on WS. WH is not the biggest fan of the money printer. He's a Fed guy, but in '08, he was very fussy about using the money printer.
He doesn't like it. He doesn't like enabling deficit spending and he'd kind of rather let the capitalistic economic cycle flow, which I'm telling you is very painful. Now, to deficit hawks, you know, people are like, "No, good man. Let let the let it flush out, baby. Let it be better. Let it rip rip the bandage of debt off." All right, this will be your guy.
But now what I want you to think of is between the two things I just described, who do you think is more likely from a Trump point of view? Somebody who's going to, you know, tell you, "No, Mr. Trump, I'm not I'm not going to let you borrow that much money." Or somebody who's going to go like Waller and go, "We need to we're going to have to stimulate.
We're going to need to print." You know, Waller was a stimulate transitory guy. Okay? So, understand for the next crisis and Donald Trump, like him or not. Okay, I poop on him, but I give him credit where credit is due.
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