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But I also don't think the sell-off was a natural event. I think it was orchestrated. Um I think the Trump administration was behind it. Uh I think a lot of his friends made a lot of money off of it, but I think it was a coordinated attempt to basically uh you know, put out the the fire from gold and silver because I think gold and silver were basically warning that a dollar crisis was coming and a sovereign debt crisis.
It was a real vote of no confidence in the administration and the Fed. And I think they had to do something about that. So, I think they coordinated the raid with the early release of Trump's uh Fed pick with false talking points to disseminate to the media that somehow this was some huge surprise and that Trump had decided to appoint a inflation hawk who will be much more hawkish than than Powell.
And far less likely to cut rates. In fact, likely to start raising rates almost immediately. And less likely to use quantitative easing, more likely to resume quantitative tightening. That is the story that is being sold. And I don't buy it. I mean, I I I just think that's complete BS. Uh but I think Trump was confronted with a situation that he needed to diffuse.
Uh you know, the world was questioning Fed independence. Uh They expected the next Fed chair to be a puppet of the administration. And it was based on that preparation. That one of the reasons that you saw such weakness. Dollar hit 4-year lows. All-time record low against the Swiss franc. Record highs in gold and silver.
So, they had to do something to push back against that narrative. And this is what they coordinated. And um but, you know, I don't think that's true. I don't expect a you know, an inflation fighter. I expect, you know, a puppet. I don't think that Trump would have given Walsh the job if he really expected him in his mind to be worse than Powell.
Right? Because the reason he doesn't like Powell is because he hasn't cut rates enough. This guy, you know, may even raise rates the way he's being portrayed. And and so I don't buy that. And and maybe what they try to do is nominate somebody who looks like a independent choice, who's, you know, not going to just do what Trump wants, but who is a real inflation hawk.
Then when he goes and cuts rates anyway and does exactly what Trump wants, they'll be able to pretend that this is independent. They'll say, "Look, you know, I I appointed this hawk. You know, if he's cutting rates, it must be economically justified. I mean, there's no political pressure here, right?
I I didn't I didn't appoint one of my guys. I pointed somebody who is, you know, a hard money guy." Um And and so I think that's part of the plan, right? To try to make it look like he's exercising his own judgment instead of just doing what Trump wants. Mhm. So, you know, but at the end of the day, I think the the momentum out of the dollar into gold and the silver is going to continue.
It may be slowed down. In fact, it was slowed down by by this. Uh but it's not going to be stopped. The only question is how long will, you know, people be afraid to buy gold and silver um because they're worried about this happening again. But it also is possible that now that we've got this big decline out of the way, people may feel more comfortable buying, thinking that, "Okay, it's already happened.
Now I can I can step in." Obviously, buying silver uh at 76 is a lot more appealing than buying it at 126 or 121 where it got to. Mhm. And, you know, buying gold at 4,600 is better than 5,600, you know? Do you think that the the role of gold through the Fed's eyes has changed over the last 20 years and especially, let's say, in the last three to five years?
With all the stuff going on. definitely changed from what the chair is willing to admit publicly. Cuz you never know, you know, what's going on behind the scenes. And you know, Jack Nicholson in A Few Good Men, you know, I I I you know, I I he's not telling the truth because he knows that the public can't handle the truth.
And and so, the same might be true with Powell. But when when uh um Greenspan was Fed chair, he specifically said that he followed gold as his main indicator. You know, and it was a market mechanism to let him know if the decisions they were making were correct. So, if the gold price was moving higher above 400, that told Greenspan that we're too loose and we need we need to tighten up.
If gold went below 300, that would be the market saying, "You're you're you're you're too tight. You need to ease." Right? And he said that this, in a way, was a de facto gold standard because gold was the barometer that he was using to guide him in his decisions. Now, Powell just said the other way, the Fed doesn't care about gold.
Couldn't care less what happens to it. It's meaningless. Mhm. And so, the point I made on Axe is, well, who's right? Cuz they both had the job of Fed chair. So, was Greenspan completely wrong? You know, or is Powell completely wrong? And you know, I think Greenspan was correct. And the fact that gold was under 400 when Greenspan made that statement and it's well over 4,000 now, over a 10x increase, that would suggest that interest rates have been too low, that the Fed has been too easy the entire time according to Greenspan.
And I agree. You know, the gold price is telling you that. The Fed should be reacting to it. They should be tightening, but they won't do it. Uh because they know that, you know, our over-leveraged economy can't handle it. You know, when when uh Volker, you know, raised short-term rates to 20%, uh it wasn't that he did it because he thought that would be good, that everybody would like that.
He knew that it was bitter medicine that needed to be swallowed. And we had the worst recession since the Great Depression as a result of those high interest rates. But I think the problem now is the Fed realizes that if we swallow that medicine now, it'll kill us. You know, you know, we'll die from the medicine.
So, we may as well die from the disease because that's going to be later. Right. And so, I think that's what's that's what's going on. [clears throat] What are some of the other indicators, economic indicators do you think that are pointing out the, let's say, acuteness of this disease at this point?
Well, I think the most important one is the run-up in gold and silver, right? I mean, that's why it's happening. But also, the weakness in the dollar, I mean, it's not pernicious yet, but the dollar dropped to a 4-year low before, you know, Trump announced war holes and everybody pretended he was a hawk.
Uh the dollar hit an all-time record low against the Swiss franc. So, it's never been that low. Swiss franc is another, you know, canary in the coal mine. Long-term interest rates, the Fed has already lost control. Long-term interest rates are higher now than they were before the Fed started cutting rates.
Even if you go back to the first rate cut, they've cut rates six times, and long-term rates have gone up. Um that's not what they wanted. So, the bond market is not cooperating. So, that's already a sign uh that that there's a problem because the market is is recognizing um that you know, we're not good for the money.
Uh that we're not going to be able to repay our debt with without massive inflation, which doesn't count as repayment. It's basically a surreptitious way of defaulting. And if you're a creditor of ours, you don't want an inflationary default. You want to just get out, right? You want to do something else.
Uh so you're going to buy you know, you're going to buy gold instead of treasuries. And that's what they've been doing. Well, you and I have spoken before about basically the bond market signal being wrong for to investors. Do Do you Do you think that this is actually turning around now? Well, not totally.
I mean and and and Powell bases his confidence on the bond market. So the reason he's so dismissive of the warning that's being sent by gold and silver is because he says, "Look, we're not seeing it in the bond market, right? We're not seeing it in inflation expectations that would manifest themselves in higher yields." And he's missing the point that yields are higher than they otherwise would have been absent these fears building.
But I think Powell is wrong to assume that because we're not seeing a wholesale run on the bond market, that that's not around the corner. That the gold market and now the silver market are just more sensitive to that loss of confidence. But the next domino that's going to fall is going to be the bond market and and and the US dollar relative to fiat currencies, not just relative to to gold.
But the problem is you can't wait for that. I mean, if you wait for it to get that bad, again, what are you going to do about it, right? If you if you don't heed the warning that gold is sending and you just continue, you know, going over, you know, towards the edge of a cliff, you're going to go over the cliff.
And by then it's too late to say, "Yeah, well, I guess I guess there was a warning there." You know, all right, well, now what are you going to do? Because it's a full-blown dollar crisis. It's a full-blown sovereign debt crisis. But that's where we're heading. And I think some people in the government might know that.
I think their primary goal is just to delay that the crisis. They don't want to stop it. They don't even want to lessen it. They just want to delay it. That's their primary goal. Don't let it happen on our watch. First the goal is to get through the midterms, you know, and then just get through the election, right?
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