Peter Schiff (Uncut) 12-13-2024

Exploding Debt to Reignite Inflation – Ep 999

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Again, that’s Lucy Co Gold and use promo code gold to get 20% off the Peter Schiff show. Well, the US stock market just closed for the day and the week less than an hour ago. I’m doing this podcast live on this Friday the 13th. The big story over the last couple of days since I did my podcast is inflation, or last three days rather.

We got some inflation news that came out on Wednesday, Thursday and earlier today, all of it bad, meaning inflation was worse or higher than had been expected and the markets reacted. And I’m going to get into that reaction a bit later in the podcast. But before I get into the inflation numbers, I want to start off by mentioning another story that I read yesterday that obviously goes hand in glove with inflation, and that is the fiscal position of the United States. I just learned, or it was just reported, that during the first two fiscal months of 2025, because we’re already in that fiscal year.

It’s not, we’re not on a calendar year. We’re in fiscal 2025 for the US government. And for the first two months, the budget deficit in those two months alone was $624 billion. That’s a 65% increase over the same two months a year ago.

In fact, the first time that the United States government ran a $624 billion deficit for an entire year, not just for two months, but for an entire year, was 2009. That was immediately after the 2008 financial crisis. And so we had a huge great recession. We had stimulus and we had a deficit that was higher than that.

But now, of course, annual deficits are much higher. But if you extrapolate the first two months of 2025, if you assume that the rest of the months are also 65% greater than the prior months, we’re going to be looking at $3.65 trillion deficit for fiscal 2025. Now, of course, that assumes we don’t get any tax cuts under Trump, which is a pretty bad assumption. So we’re actually going to have a bigger deficit.

My guess would be that the fiscal deficit for that year will be over 4 trillion. But if we just stay on the current path and Trump doesn’t make it any worse, which is an outside chance, but assuming Trump doesn’t make it any worse, it’s going to be the biggest deficit in one year we’ve ever had. In fact, the record right now is fiscal 2020. That’s the COVID year, Right?

Or that. Or the deficit was 3.1 trillion during that year. And that was a good portion of the economy was shut down due to Covid. And we had all the stimulus flooding in, and the debt is bigger now.

And so what does that mean? That means that the US Economy is currently getting a bigger fiscal stimulus than it did when the economy was shut down due to Covid. Now, first of all, if the economy was really as strong as everybody claims, why does it need a record amount of fiscal stimulus? In fact, when you have a strong economy, that’s when the government is supposed to run a surplus because the economy is so strong and it’s supposed to pay down the deficits that it ran up when the economy was weak.

But here everybody is talking about how great the economy is. In fact, again, I was watching on CBC today, and this woman was on there from one of the brokerage firms talking about how strong the economy is, saying, it’s great, the consumer’s in great shape, and everything is fantastic. They’re really strong. We’ve never seen the consumers in such good shape.

And I mean, does this woman not realize that the consumers just voted out the, the. The Kamala or Biden, and they voted for Trump because they wanted change because their financial circumstances are so dire? I mean, if consumers were in the greatest shape ever, according to this Wall street analyst, they would have voted for Kamala. They wouldn’t have, you know, tried to get rid of her because things are so awful and they were hoping that Trump would change things.

Why would you want to upset a great situation? Right? So again, these guys are still clueless about what’s going on on Main street, right? If you’re on Wall Street.

You have no idea what it’s like to live on Main Street. But anyway, so we’ve got this record amount of fiscal stimulus. Again, it’s like, you know, you’re lying in a hospital dead, and you’re plugged in to all kind of artificial life supports. You got tubes coming out your mouth, tubes coming out your nose.

You got blood coming intravenously into your body. Right. You’re in this bed and you ask the doctor, well, you know, what’s going on? Oh, you’re great shape.

You’re absolutely. You’re perfectly healthy. You know, except if we unplug any of these things, you’re going to drop dead. Right?

So, obviously, I mean, the country is in horrible shape. Where would it be without all this stimulus? Now, yes, we haven’t been getting as much monetary stimulus yet that’s coming, but we have a record amount of fiscal stimulus. That’s why all these jobs, like pretty much all the jobs created under Biden, are government jobs created with deficit spending.

So this is a disaster. And what does that tell you about future inflation if we have record deficits to finance? Well, inflation is going up. And it also shows you there’s no way that the Doge Commission is going to be able to do anything about this.

This is a runaway freight train. In fact, I came up with an idea. I put it out on ax. The only way, if Elon Musk really wants to do something, forget about trying to convince Congress to cut spending, because that’s pointless.

That’s never going to happen. Use your resources to challenge a lot of these programs, a lot of these regulations in court, and take it up to the Supreme Court, because almost all the government spending and all their regulation is unconstitutional. So make the argument. I mean, I know how to make the arguments.

Just hire the lawyers who can argue it and take it up and pay for it. And that’s going to be a much more effective use of your time and money, because we got a few decent justices on the Supreme Court. So maybe we could get the Supreme Court to nullify some of this spending and some of the regulations, because there’s no way that Congress is ever going to vote to repeal it. So in any way, we got massive deficit news that the mainstream media is glossing over this.

And if you’re going to be looking at these inflation numbers, how could you look at the numbers and ignore this elephant in the room, which is a harbinger of much higher inflation? But let me just get to the actual numbers. So the first one that we got On Wednesday was the cpi. And the CPI was actually the better of the numbers as far as expectations.

Right. It wasn’t really worse than expected. It was as expected, which was bad. Right.

So the consensus was for an increase of 0.3 in November and we rose by 0.3 and that was higher than the 0.2 from October year over year CPI was up 2.7, higher than the 2.6 year over year the prior month. So we’re going in the wrong direction. Core ex food and energy up 0.3 on the month, again another point three. We’ve been there for like the last four or five months in a row, I think.

And the year over year core was also up 3.3. We’ve been stuck at around 3.2, 3.3 for month after month after month. Nowhere near 2%. Hal Powell can look at these numbers and conclude that we’re on a glide path of 2%.

It’s beyond me. You can’t. All these numbers confirm is that inflation is bottoming out and is headed much higher and it never got anywhere near 2%. Especially if you look at the PI producer price index, which is a leading indicator for the CPI because generally the businesses have their prices go up first and then they pass it on to the consumer second.

So the pie is more forward looking than the cpi. And there the numbers were really bad. So the expectation for the increase in November producer prices was point three and we got an increase of 0.4 and that was double, double the increase from the prior month of 0.2. So we’re really heading in the wrong direction fast.

On the year over year, producer prices was supposed to be 2.6, it’s 3%. We got a three handle now, not a two handle. Last month the year over year PPI was 2.2%. Now it’s three now.

I’ve been saying this on my podcast that the year over year numbers are going to start to get a lot worse due to the comparisons. And that’s what’s happening. So now we have a three handle. How long before we have a four handle?

Not long. Look at the EX Food and Energy there. It was only. It was a little bit better actually because it was only up 0.2, which was the consensus.

Right. So, and that was a little bit less than the 0.3. But the year over year, year over year, core was supposed to be up 3.2. It was up 3.4.

That was much higher than the 3.1 year over year from the month before. So The Fed wants 2% core. We’re at 3.4 and headed in the wrong direction. Yet the Fed is going to cut rates by another 25 basis points.

By the way, the ECB cut rates 25 basis points this week and the Swiss national bank went for the super size 50 basis point cut. They cut in half. I think they went from 1% to a half a percent. Right.

Inflation is going to rear its head in a big way all over the world. The Eurozone, Japan, all these countries that are cutting rates should not be cutting rates. Inflation is going to roar back stronger than ever. Right.

Worse than what we had in 2001, 2002, that’s what’s coming. Ex food and energy year over year was 3.5. So these are strong numbers. Now on top of that, adding insult to injury were the import export prices that came out this morning.

They were looking for a drop of 0.3 in import prices. Instead we got a rise of 0.1. And year over year they were looking for an increase of 1. We got an increase of 1.3 on the export prices.

They were looking for a drop of 0.1 and we were unchanged. And the year over year, export prices are up 0.8. The month before they were down 0.1. So again, we are moving sharply in the wrong direction.

Inflation is getting worse as the Fed is pouring gasoline on the fire. Now, there are a lot of people that think, well, because of this inflation, maybe they’re not going to cut as much in 2025. That’s one of the reasons that you’re getting this strength of the dollar. You got a big drop in gold the last few days.

Gold’s about $50 an ounce lower than it was when I did the podcast on Wednesday. It was at 2,700, basically just below. In fact, it went to 2717 or so. After that.

It had a little rally. It almost got, almost got close to new highs and then these bad inflation numbers clobbered it. And now gold is back to 2650. But inflation is good for gold.

I’ve been talking about this paradox for years now because the markets don’t get it. When the markets see hotter than expected inflation, what the traders believe is, oh, the Fed’s going to have to fight harder to win the inflation war. And that means higher for longer, not as many cuts. A tighter Fed that’s good for the dollar, that’s bad for gold, they’re wrong.

What higher than expected inflation means is that the Fed already lost the war on inflation. It’s not going to Fight harder. In fact, it’s going to surrender. Inflation won.

It just hasn’t admitted that yet. It’s still pretending. The Fed is still pretending that it won. It didn’t even come close to winning.

It’s already surrendered. The markets just haven’t figured that out yet. But at some point they’re going to realize that that white flag has been waving and that is bullish for gold. Higher inflation is always bullish for gold, especially when the Fed can’t do anything about it.

Their hands are tied behind their backs. In fact, before too long, probably during the Trump administration, the Fed is going to have to fess up and say that it’s willing to accept higher inflation, that that’s just the price we have to pay to stimulate the economy, to deal with the debt, to, you know, to whatever. It’s going to come up with an excuse. I don’t know if it’s going to raise its official target to three or whatever it’s going to do, but it is going to be cutting rates.

It is going to be doing quantitative easing even as the inflation numbers move further and further north of 2%. And in fact, we got numbers on Thursday for jobless claims that unexpectedly shot up from 225,000 last month to 242,000, I mean last week to 242,000 and in the last week and the four week movie average jumped up from 21850 to 224 and a quarter. This is the highest number of claims we’ve had in a while and again could be the beginning of a big trend on increasing unemployment. And so the economy is weak again.

The weak economy is the reason that Trump was elected. And that weak economy that got Trump into office is going to continue while he is in office. The tax cuts may stimulate consumption, but they’re not really going to stimulate the underlying economy. Meanwhile, Wall street is celebrating.

Donald Trump went down and rang the opening bell with his beautiful wife Melania, who, you know, she’s 54, she looks fantastic. So, you know, that’s, that’s, that, that’s, that sends a good signal I guess to everybody that there’s a lot of beauty after 50 in modern women. But he was there with her. I think R.F.

kennedy Jr. Was there with him. I forget the rest of the entourage that came down the New York Stock Exchange, but they’re all excited because, you know, he’s so pro business. Well, he was pro business when he was president the last time.

That was the whole reason that everybody elected him. He was a businessman. He wasn’t a politician. So is he more pro business now than he was when he was elected the first time?

No. I mean, maybe some of his cabinet people are a little less the establishment. They’re very successful business people on their own. Right.

But this is not a 180 degree change. Yes, we’re going to have fewer regulations. Maybe we’ll repeal a lot of the regulations that were put in place by Biden. But even if we go back to the regulations we had under Trump, we still had a lot of regulations under Donald Trump.

But the bigger issue, the ticking time bomb, is not going to get diffused. This deficit is exploding out of control and the economy is on the verge of a severe recession, in part caused by the backup in interest rates. And interest rates are rising. I mean, even though the NASDAQ hit another new record high today, the Dow was down for the second consecutive week.

The markets maybe are starting to take notice of rising bond yields again, rising mortgage rates again, and the economy. The data is not good. I don’t know what people are looking at to keep talking about the fact that we have strong data. In fact, the Fed must even know this.

That’s why they’re cutting. Right? They know that the economy is weak. They just want to continue to pretend that it’s strong.

Anyway, we got a quick commercial break. Stick around. I got a lot of talk about. We’ll be right back.

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Nicotine is an addictive chemical. All right, so here’s a great little story here. So I read about a meeting that took place, I guess, the other day. Scott Besant, who is Donald Trump’s nominee for Secretary of the treasury, met with the current Secretary of the Treasury, Janet Yellen.

And apparently Janet Yellen told Scott Bessett that she was sorry that her administration was not able to make more progress on reducing the deficits, especially given the fact that interest rates have moved up. Right. Oh, so she’s sorry, right? I mean, that’s going to make it better.

I’m sorry. You know, I think the nation deserves a more profound apology than just like sorry. And of course, you know, if you think about how long she’s been involved in this, from during the years she was the Chairman of the Federal Reserve and then the years that she was the Secretary of the treasury, during those years, we added like 15 trillion to the national debt. I don’t even know if there’s any other person that can claim to have been responsible or have overseen 15 trillion.

I mean, other than the members of Congress, of course. Some of these guys have been there their entire lives, so they’ve overseen the whole thing. But if you figure her position as Fed Chair as a massive enabler by keeping interest rates at practically zero for the entire time she was Fed Chairman, I mean, one of the reasons that we have so much debt and we’re now so vulnerable to rising rates is because she kept rates at zero for so long, allowing the government to finance all this debt short term at low rates and thinking it was no problem. In fact, when she became Treasury Secretary, she continued the process.

And even though she had the opportunity to try to lock in longer duration bonds at low rates, she decided as Secretary of the treasury to keep issuing short term paper, knowing that interest rates are going to rise. In fact, I pointed this out on my podcast. Nobody else in the mainstream media did. Which is why you don’t have to watch the mainstream media.

I just watch it to see the stuff they get wrong and then I tell you the stuff that’s right. But what Janet Yellen said in response to a question about the debt. She was asked, are you worried about the national debt and the size of the debt? And she said, no, I’m not worried at all because the key is the financing costs and interest rates are really low and so it doesn’t cost us a lot to finance the debt.

And I said at the time, yes, but interest rates aren’t going to stay low. In fact, the Federal Reserve just told you they’re going to start hiking to fight all this inflation that you helped create. So she specifically said the debt isn’t a problem because rates are low. And now she’s apologizing for, for not doing more about the deficit, especially since rates have gone up.

Well, duh, we knew they were going to go up. She knew they were going to go up. I don’t even think sorry doesn’t cut it. I mean, when you do this intentionally, she owes a lot more than that half assed apology for the part that she played in this disaster.

But I also want to talk about Trump again. I mentioned this on the Tuesday podcast and I mixed up the name. I said face the Nation. Trump was on Meet the Press.

Some of you pointed that out in the comments. And so I thank people for that. But he was on Meet the Press. I already went over the big lie that is getting no coverage in the media where Trump said that not only did was there no inflation, no inflation when he was president, but inflation was so low, he did such a good job of having no inflation that Biden enjoyed a ride on his coattails and that there was no inflation under Biden either for the first year and a half, almost two years he was president, which was an outlight.

Well, it may not be a lie because maybe Trump has no idea what, what, what inflation was like under Biden. I mean, maybe he’s that clueless about what’s actually happening in the economy and doesn’t really know anything about inflation or economics. And so it’s not a lie if you think it’s true because nobody’s ever pointed out the facts. I mean, I have no idea which one it is, but I pointed out that the highest year of inflation under the Biden administration was 2021, his very first year, it was like seven and a half percent.

The second worst year was the second year. So during the two years when Trump said we had hardly any inflation or no inflation, we had the worst inflation. But I want to dissect it a little bit more to show you how the trends built up, because inflation works with the lag. So if we had a lot of inflation in 2021, the seeds were sown in 2020 or earlier when Trump was the president.

Now, we had massive deficit spending under Trump. We had massive money printing under Trump, and the effects of that manifested under Biden. Now Biden made it worse. And in fact, a lot of the Biden inflation is going to show up on Trump’s term.

Right. That’s going to, you know, when. When inflation really skyrockets next year. That’s not Trump’s fault.

It’ll be his fault later on. But, you know, he’s inheriting an inflation problem from Biden just like Biden inherited an inflation problem from him. Right. But he’s trying to sell the country on the lie that we had no inflation when he was president, and now that we’ve reelected him, it’ll disappear again and we’ll have no inflation.

That is completely wrong. So if you look at the last two years of Trump’s term, which was December of 2020 and January of 2021, I mean, he left office on the 20th of January. So I’m going to give Trump the January and December numbers. The CPI rose by 0.4 in December and 0.3 in January.

Annualize that. That’s 5% inflation during his last two months in office. That 5% annualized rate of inflation is higher than the whole year inflation for 2023 and 2024. Right.

The years that Trump says we had high inflation, those are the two years that it was lower than it was when he left. But if you want to take a few more months, because Biden didn’t do anything until the big stimulus package was passed on, like March 20th or something. Or March, March 15th. I forget the exact date they passed the stimulus, but most of the money didn’t go out until April.

I mean, there were some direct deposits that were made in mid to late March, but a lot of people got mailed checks, and some of the checks didn’t even get mailed till April. You know how slow the mail is. So certainly whatever happened in February and March had nothing to do with Biden. I mean, maybe we could say April, because some of the money was out by April, but a lot of it Wasn’t even spent.

Remember when a lot of people got their stimulus money, initially, it just went into their bank accounts, and the savings rate went way up. So a lot of people didn’t even spend it in April. But I won’t put April on Trump, because PPI went up by 0.8 in April. That was a really, really big jump.

But in February, producer prices, I mean, consumer prices, were up 0.4. And in March, right before any of the real stimulus took hold, they were up 0.6. So if you take the last two months of the Trump administration and the first two months of Biden before Biden actually had an opportunity to affect any, any change, and you annualize those four months, you get 5.22% inflation again. That’s worse than the rate last year, that’s worse than the rate this year.

So for Trump to claim that he handed a pristine economy with no inflation over to Biden and Biden screwed it up all by himself is a complete lie. It’s a complete fraud. That’s not what happened. He handed Biden a huge inflation problem.

It was already exploding when he left. Had Donald Trump been reelected, we would have had maybe as much inflation as we did under Biden. Now, maybe the stimulus wouldn’t have been as big, but I don’t know. Remember, the Republicans invented the idea.

I mean, they came up with a ppp, they came up with these extended and oversized unemployment payments. They did the stimulus checks. And remember that the Republicans did object to the Biden stimulus, but believe me, if Trump had been reelected and Trump had stimulus, they would have been all in favor of it. Republicans are only against deficit spending when there’s a Democrat president who’s signing the bills.

They support all the deficits that Republican presidents want to side off on. So I don’t believe for a second that we wouldn’t have had more stimulus under a Trump second term. So this is all revisionist. This is all opportunistic.

And I know people don’t like it when I criticize Trump. You know, I mean, when he does things wrong, if I bite my tongue and I don’t criticize him, then I’m a hypocrite. I can’t criticize Biden and keep my mouth shut about Trump. Plus, when everything blows up, when all this pie in the sky optimism doesn’t pan out, I want to be able to say, I told you so.

But I want to be able to say why I told you so, because I understand economics and because I understand this and I know what’s going to happen. I know what the real solutions are. I know what we actually have to do. Because what’s going to happen in four years, there’s going to be a Democratic landslide.

The Democrats are going to win the midterms because the economy is going to be worse and inflation is going to be higher. And then we’re going to get a Democratic president in 2028. Right. Because the Republicans are going to lose all credibility.

Except for me. Right. I’m going to have credibility because I would have predicted it and I have an alternative vision and view of what needs to be done. Now, I wanted to point out two more things before I get into some important announcements about my lawsuit against the irs.

But one thing, I was listening to the same analyst on cnbc. I think it was the same one that was talking about how strong the economy was and how great the consumer is in such great shape. But they were talking about inflation. And she was saying, well, we might not have to worry about inflation because of rising productivity.

We can get enough productivity and then we won’t have inflation. And that’s not true. Yes, if we have a lot of productivity, that could keep prices down. But that doesn’t eliminate the inflation.

That just hides the inflation. This is what people don’t understand. Let’s assume that, all else being equal, the government doesn’t create any inflation and productivity is so good that prices would have fallen by 5%. Well, that’s great.

That’s a huge economic benefit for the economy. Everything is 5% cheaper. Everybody has a better life. Everybody can buy more stuff when it costs less money.

So everybody’s life gets better because productivity reduces prices by 5%. Now the government creates inflation and instead of prices going down by 5%, they go up by 2%. Now you’re going to say, oh, well, there’s no inflation now because now we’re at the Fed’s 2% target. No, prices are 7% higher than they otherwise would have been.

We didn’t get all that inflation for free. The government robbed us of that increase in our standard of living. They took away the benefit of those price cuts. So the inflation is still there.

The damage is still being done. Everybody is poorer as a result of paying that inflation tax. It’s just, you don’t know because you don’t realize that prices would have gone down if the government didn’t print all that money. And so when you have these Wall street guys saying, oh, don’t worry about inflation because of productivity.

No, we have to worry about it regardless. Yes, productivity Takes some of the sting out of inflation, but if we didn’t have the inflation, we’d have so much more benefits from rising productivity. Another thing I wanted to point out was from the comments, I just know somebody sent me this in a. In a social media, like DM or something.

And so I wanted to address it because I know other people have the same thing. It had to do with the tariffs. And the point he was making was like, if we put these tariffs on these other countries and then they sell fewer goods to America, that hurts their economies because now the factories produce less, they lay off the workers. And so the real damage is going to happen in the countries that are.

That can’t sell as much stuff to America because we impose these tariffs. And again, that is the wrong way to look at it, but it’s not uncommon. And I’ve mentioned this before, but it’s been a long time, so I’m going to mention it again. I know we’ve got new listeners, but that’s exactly the logic that a lot of Keynesian economists had during the Second World War.

Believe it or not, there are a lot of economists who were forecasting a big recession if the war ended or when the war ended. I mean, everybody knew the war would end eventually, but they were saying, this is going to be bad for the economy. If World War II ends. Now, why would that be bad for the economy?

Well, their logic was, you know, we’ve got 20 million or 10 million men under arms, so these soldiers are going to be unemployed. They said we have all these factories that are producing military equipment. We’re making bombs, bullets, tanks, jeeps, fighter. Fighter planes, bombers, you know, helmets, uniforms.

Right. Everybody is producing stuff for the war. And when the war is over, well, all these factories are just going to shut down. All the workers are going to be laid off.

So they were thinking that it was going to be an economic bust if we no longer had to supply the war. Now, obviously, that’s not what happened. We had an economic boom when the war was over. Why?

Because instead of wasting our resources, our land, labor and capital making stuff to fight a war, we were able to make stuff that consumers actually wanted to buy. Instead of making tanks and jeeps, we made regular cars. Instead of making fighter planes, we made passenger planes. Right.

Instead of making, you know, military equipment, we made washing machines, refrigerators, sewing machines, you know, radios. We made stuff for people. Right? So the economy boomed, you know, during World War II, when all of our resources were tied up in making stuff for the war, things were rationed in America.

I mean, you couldn’t get stuff, everything was in short supply. Women couldn’t even get nylon stockings because the petroleum, I guess, was to make that you need to make them, was being used for the war. You waited online, there was rations, people had coupons during the war. Now, the same thing is happening right now overseas with emerging markets.

Except they’re not sacrificing to fight a war. They’re sacrificing to subsidize the American economy and American consumers. So factories and workers in other countries are busy working to produce stuff for us instead of producing stuff for themselves. Now, the idea that if we can’t buy their stuff anymore because of tariffs, that their economies are going to collapse is the same as thinking that our economy would collapse if we no longer had a world war to fight.

Because what’s going to happen, these countries are going to take those exact same resources that they’re now using to make stuff for us and instead use it to make stuff for themselves. And they will be better off, their economies will be stronger when they produce for their own consumers than they are now producing for American consumers. Now, some people might think, well, how are they going to afford it? You can afford to consume what you produce.

It’s Americans who can’t afford it. You have to produce it. If you produce something, by definition you can afford it because you’ve afforded to produce it, right? Once it’s there, you just consume it, right?

What you need wealth to produce it. You need the equipment, you need the factories, the supply chains, the raw materials, the skilled workers. So it’s the foreign consumers that can actually afford stuff. It’s the Americans who can’t.

And that’s going to change when there’s a realignment of the currencies, which exactly is going to happen. The dollar is going to go down, their currency is going to go up, and they’re going to buy the stuff that we can no longer afford. The real economic damage is going to happen in the United States, but people don’t know that yet. That’s why the dollar keeps going up.

That’s why the US Stock market goes up. Because people are clueless as to how this whole thing is going to shake out. I am as confident as ever that I know how it’s going to shake out. Because all the big picture stuff that I’ve been saying for 15, 20 years, it’s all playing out according to the way I scripted it.

Anyway, I want to move forward and just talk about this smoking gun information that I just got an hour, an hour before I did this live podcast. Now, you know, I’ve been trying for two and a half years to get the IRS to turn over documents that I requested under the FOIA law, where I have a right, freedom of information. I requested documents regarding conversations and correspondences between the IRS and other J5 members and OSEF about me and my bank and the press conference to announce the closure of my bank. Now remember my thesis and the basis of my civil rights lawsuit that I recently filed was that they all lied that my bank was not shut down because it was insolvent or because of any compliance issues.

It was shut down as a PR stunt for the J5. And that contrary to what IRS chief Jim Lee said at the live press conference that is up on my YouTube channel, that they did on June 30, 2022, contrary to his claim that OSEF decided to shut down my bank all by itself, that the IRS and the J5 had nothing to do with it, but they just happened to show up at this press conference to announce their support. I’ve said that was all bs. I said there’s no way that happened because the OSEF commissioner enthusiastically supported the sale of the bank.

She had no problem with the compliance, she had no problem with the capital. She was all smiles when I introduced her to the CEO or the company who was buying the bank and their in house counsel. She loved the idea. She welcomed them to Puerto Rico.

She thanked me for organizing it. She said, Mr. Schiff, I hope you don’t move out of Puerto Rico after the sale of your bank is completed. And I said, no, I love it here.

I’m going to stay. I’ve got other businesses. But I always knew that what happened to that press conference was a packet of lies. But I didn’t have the proof until now.

Although actually I got some proof before, but I got the smoking guns today. And because so I mentioned on this podcast that they gave me finally after like two years or a year and a half of asking, I forget, they finally gave me 335 pages that they did that they claimed a year and a half ago they didn’t even have, they finally gave me these pages and they were almost all redacted. But I found in a couple of unredacted comments on some heavily redacted pages, I found out that the IRS knew about the press conference to shut down my bank three months before it happened. So that was the first piece of hard evidence that showed me there was a conspiracy to shut down my bank.

And that was the basis of my lawsuit because I finally had some. Something to file a claim in good faith. It wasn’t just a hunch. I had some hard evidence that they were working together.

But I knew there was more evidence because everything was redacted. So I filed a lawsuit against the IRS separate from my civil rights lawsuit. I filed a lawsuit to force the IRS to unredact the information that they inappropriately redacted. And they initially said, no, no, no, all the redactions were appropriate.

Well, we haven’t even had the hearing yet, and they’ve already said, okay, you know what, on second thought, there’s a few things here that we shouldn’t have redacted and we’re going to unredact them. So they resupplied me with all 335 pages. It’s still mostly redacted, but the stuff that was unredacted is a bombshell. And I can only imagine the stuff that they, that they.

That is still redacted because if they let me see this, I can only imagine the stuff that they didn’t let me see. So the first one I’m going to talk about, I got an exhibit right on the screen. If you’re watching. This is an email and it’s a screenshot because I.

The file was sent in the way. I haven’t been able to print it out yet. So I took a screenshot as I’m reading, you know, these documents. So this is an email from a guy named Justin Cole who works for Criminal Investigation in the irs.

And he’s part of Jim Lee’s team, who is the former chief of the irs, the top cop at the IRS who is himself a criminal. He now works in the private sector at Chainalysis. Anyway, so this is an email from James Lee’s underling, dated Tuesday 24th May. Now, this is a month and a week before the press conference to shut down my bank.

Here’s what the email reads. Looks like flights will work with no problem to the planned OSEF event. This is the first time they let me know it was an OSIF event. I just assumed it was OSIP because it was redacted before they unredacted that.

I will coordinate with Matt Line and Mike Bar Tori. Some deconification issues, whatever that is, but all good on our side. Thanks, Justin. And then he writes from the call with OSEF Commissioner Natalia Diaz today.

General schedule would be as follows. June 30th. June 30th. That’s the date of the press conference.

So they’ve scheduled the date of the press conference five weeks before, and now they have an outline and they’ve redacted that of, like, what’s going to be said and who’s going to speak. Right. So they’ve scheduled the whole thing. They planned the whole thing.

Now, remember, as of that date, the same person, Natalia Diaz, who had agreed with the IRS to have a press conference to announce the closing of my bank, she was telling the bank, me and the buyer of the bank that they we that she was still considering the sale. She was asking us to supply additional information to review so that she could approve the sale when she had already made a secret deal with the IRS to shut down the bank. So she’s lying to us the whole time, pretending that everything is good. Meanwhile, I’m putting more money into the bank to keep the capital at a good level.

And she knows that I’m flushing my money down the toilet. Right, so this is proof, right, that if this was not something that just happened, the IRS was involved in the process to shut down my bank. And I’m about to show you proof of exactly why that was done. So the next email I’m going to look at.

Why is this not coming? Coming up. Hold on. Okay, so this next one.

Oh, no, that’s. I want the one from the Australian. Oh, hold on. I keep clicking on the wrong one.

Okay, so this email is from William Day. William Day is the head of the Australia ATO. He was also interviewed on the defamatory 60 Minutes broadcast that was already removed from the Internet. So this is an email from the head of the Australian ATO, one of the J5 nations, to Jim Lee, the head of the IRS, J5 division, whatever.

And this is on July 1. So the very next day, following the press conference to announce the shutdown of my bank. Hi, Jim. On behalf of Australia, I just wanted to formally thank you and your team and your team’s efforts in negotiating today’s outcome with osef.

So there’s an admission that what happened with OSEF and my bank was negotiated between OSEF and the irs, which refutes the lie that Jim Lee told that OSEF came to its decision to shut down my bank and lie about the reasons for shutting it down independently, that the J5 had nothing to do with it, the IRS had nothing to do with it, but they just want to take the opportunity to say that they support the decision. This shows that that’s a lie. I mean, I knew it had to be a lie, but this proves it because Jim Lee is saying your team negotiated today’s outcome, and who knows what was in the negotiation? What did the OSIP commissioner get in exchange for doing this?

Because I’ve always thought there was a quid pro quo. I don’t think she knifed Puerto Rico in the back for no reason. Obviously, the IRS promised her something, and I’m hoping to find that out. It’s probably in a lot of these redacted emails.

But let me continue. This is what this guy Will Day writes. As you said, it may not have been an outcome we initially set out to achieve. Yes, because they initially thought the bank was doing something wrong.

They thought the bank was helping criminals launder money and evade taxes. But then when they investigated it, they found that it wasn’t doing anything wrong, that we had excellent compliance. Right. Anyway, he says, but it’s extremely powerful for the J5 to demonstrate that it has the reach to disrupt the enablers of tax crime, not just in our own jurisdiction, but anywhere in the world.

So there’s an admission that the J5 disrupted my bank. They got my bank shut down, not because it was enabling tax crimes, but because they could pretend that it was enabling tax crimes and they could use that to publicize the J5. Right. Then he writes, I thought the press event was extremely successful.

And we have already had some television and national financial newspaper reporting on top of what we have seen in the U.S. as always, gentlemen, a great pleasure sharing the stage with you both. So he’s happy about all of the publicity. And as a matter of fact, I don’t have these documents to show you guys.

But in the unredacted documents, there was probably, you know, six to 10 pages of correspondences that were not fully redacted, mostly unredacted, that were shared with the J5 nations about how to publicize the shutdown of my bank and how to spin it and how to use it to show the success of the J5. And they’re even bragging. Like, one email is like, this is going great. Look at this article.

It’s already got a million hits. This is fantastic. We’re getting so much good publicity, which proves my thesis. I said this was done for publicity.

You’ll notice OSEF didn’t do anything to publicize the shutdown of this bank. After the press conference, they just had the press conference and then that was it. Right. The J5 nations took the event, scripted it, developed a game plan, disseminated it among all their members, and then went out to the media to talk about the bank Being shut down.

Now at the press conference, osef when she was asked, well, did the bank help criminals a launder money or evade taxes? And she said no, no they didn’t do that. We’re shutting it down because it’s insolvent. Which was a lie because it wasn’t insolvent and because of these other internal control issues.

Well, if my bank was really shut down for technical violations of Puerto Rican regulations and no findings of money laundering or tax evasion at all, why is the J5 promoting it all over the world? You know, why do they have a whole media campaign to publicize something that had nothing to do with tax evasion, mind laundering? Because they wanted to pretend it had to do with it because they had nothing else. They have had no success.

They’ve been around now for five years, six years, they’ve done nothing. It is just a bureaucracy that has wasted taxpayers money and they needed to show something. So they turned a failure into a fake success and they did it by corrupting the OSU commissioner into doing this. And again, who knows what did they twist her arm?

What do they do? But here’s. There’s one final email I want to share with you and this one was written by Jam Lee himself and this was on July 2nd. So now the next day after he gets these emails from Australia and these other J5 congratulating you, great job, you really negotiated a great outcome.

You know, you got this bank shut down and now we can all take credit for it and, and pat ourselves on the back and you know, and prove to government that, you know, we’re not wasting our money on the J5 and all our travel around the world and all the stuff that we’re doing. But anyway, so this is the email from James Lee. Gentlemen, a huge moment for the J5 explanation point. How was it a huge moment?

So a bank that they investigated because they thought it was facilitating tax evasion and money laundering and it turns out it wasn’t facilitating anything, it was going strictly by the book. It had a very strict compliance program and it was turning down all these bad actors and doing everything right. So they were completely wrong and it got shut down supposedly for technicality, having nothing to do with our investigation. Yet this is a huge moment.

This monumental failure is a huge moment for the J5 exclamation point. He says excellent job to each of you during the event. So these are the other J5 guys, like the guy from Australia, the guy from the UK that spoke Simon York, he also spoke at the thing and they Talk about Simon here. But Simon York of the ato, I’m suing him too, as well as William Day.

All these conspirators are part of my lawsuit. They’re all guilty. Excellent job to each of you. During the event, each of your comments were very powerful.

Yes, because they were lies. They were powerful because they falsely implicated the bank in criminal activity that they knew the bank did not participate in. They knew the bank was innocent, yet they implied or outright stated that it was guilty. Then he wrote, this has been a lot of great work by the team.

Now, I felt that the event went extremely well, and the OSEF commissioner is incredibly passionate about cleaning things up in Puerto Rico. Now, what’s really interesting is cleaning is in quotes because he knows they’re not cleaning up anything. I mean, could there anything be more crystal clear? Why did he put quotes around cleaning?

Because when you put quotes around something, what you’re saying is, hey, it doesn’t really mean what I’m saying. It means they didn’t clean up Puerto Rico by shutting down my bank. My bank was squeaky clean. So it’s a farce.

And they know it’s a farce, and so they put cleaning in quotes. I mean, this is incredible stuff. I can’t make this stuff up. And then he wrote.

She told me that it was her first press conference and was very nervous, but I thought she did a great job. Now, her first press conference. Yes, because she’s never had another press conference because they close banks all the time. Why have a press conference, you know, to close a bank?

Because of it doesn’t have enough capital. You know, why would you have a press conference? I mean, she shut down plenty of banks that didn’t have enough capital, didn’t have any press conferences. The press conference was for the J5.

And the fact that they spent so much time mobilizing the troops all around the world to promote this event that they supposedly had nothing to do with proves it. Now, I guess in thinking about it, maybe it could be cleaning, could be in quotes, because she said it. But he doesn’t imply that she said it. He just said she’s incredibly passionate about doing it.

So I think the quotes are there because it’s like a wink, wink. Like, we all know she didn’t clean it up. Right. She was doing us a favor.

And I’m sure that’s in all the redacted stuff that I haven’t been able to see. But by the way, in my lawsuit, they have to unredact everything. So then I get to see all the evidence that they’ve been hiding from me for two and a half years. But then she wrote, he wrote, the event is receiving a lot of attention in Puerto Rico proper and in many major news outlets.

The momentum we have right now is infectious. What do you mean, their momentum? I mean, according to them, it had nothing to do with them. Some bank just didn’t have enough capital.

And in fact, the most likely reason it didn’t have enough capital is because they leaked the investigation to the media. And then Channel nine and New York Times accused the bank of being guilty, and that caused the bank to lose so much money that it was under capitalized. So it was the leak of an investigation that came up empty and found nothing that ultimately caused the bank to be shut down. Why are they going to celebrate that?

They should be apologizing. Gee, God, we really got this wrong. We investigated Peter Schiff’s bank because, you know, we thought he was doing bad stuff, and it turned out he was a boy Scout. But, you know, we ruined his bank.

God, we really feel bad about that, right? I mean, it’s worse than, you know. Janet Yellow is apologizing for the deficit. But no, they want to take this failure and turn it into a fake success.

And now they’re so excited about their momentum from this fake success that they think is infectious. And then he writes, I am honored to work alongside each of the J5 Chiefs. I didn’t think there was any honor among thieves, because that’s basically what they are. They’re a bunch of crooks.

This is a criminal conspiracy to deprive me of my constitutional rights. And what about the customers? It’s almost two and a half years now since they shut down a bank that was completely solvent, had nothing but cash on the balance sheet, no debt, had made no loans, and no one’s got their money. Meanwhile, the receiver paid himself almost $40,000, or no, 27, almost $30,000 last month.

To do what? I mean, not to send anybody their money back, because nobody’s gotten their money back. Then he says, simon, sounds like a plan for Cambridge, right? Cause Simon York is in the uk I guess they have an event coming up in Cambridge where they’re really gonna milk this publicity stunt even more.

So I’ve got all the proof just in these emails of all these lies, and it’s clear that the bank was not shut down because that was the right decision to make. The right decision to make was to allow Kenta to buy the bank, to allow Kenta to deposit the $8 million that they had committed to deposit as long as the sale was approved. But approving the sale didn’t work for the irs because then they couldn’t have their fake success to promote. And so they flew down and they talked to OSEF for three months and they negotiated some kind of deal, secret deal, where OSEF would reject the sale of the bank based on a pretense and then shut the bank down based on another pretense and announce it at a press conference to give a Forum to the J5, the IRS, Australia, the United Kingdom, where they can all take credit for the shutdown of this bank and pretend that the bank that they suspected was committing all these crimes actually did commit them.

Now, they admitted, look, we’re not charging anybody with any crimes. We haven’t filed any charges. Okay, but then that gets lost in the sauce of everything else. Why didn’t they file any charges?

If this bank was really facilitating organized crime, why didn’t the facilitators get charged? You know, there are stiff penalties for people that facilitate money laundering. I mean, harsh penalties. Why was nobody charged?

Apparently all this money laundering is going on at my bank and nobody helped anybody do it. Nobody was charged with anything. Not a single person at the bank of Court, because nobody did anything wrong. Believe me, they would have loved to have charged somebody.

They would have loved to charge me, but they couldn’t charge me because they found nothing. So they destroyed it anyway with this publicity stunt. And the media, right, the media loved it because Channel nine in Australia and those reporters and Matt Goldstein at New York Times, right, they reported this leaked information, unethically reported information that shouldn’t have been leaked. They know they got it illegally.

They unethically published it anyway. And then nine went even further to accuse me of being guilty and fabricating evidence, lying, knowingly lying to make me look guilty. And now this whole thing happens and then they publicize it as if this justifies their article. Hey, you see, we were right.

Look, the bank got shut down. And you know, their publicity stunt works so well. That’s why the Portuguese government froze the bank’s account. Because of all the pr.

Because of the press conference and the press releases and the media reports. The Portuguese government froze the bank’s account for eight months, preventing the bank from sending out the money to the customers. The money would have all been returned, you know, in a week had that not happened. Right?

All the wires were ready to go, right? All Nova bank had to do is press send, right? And all the money was going to go 500 wires were going to go out to the customers. The rest of the money was going to go out to Quinta.

This whole thing would have been done, but the Portuguese government saw all this, and they said, oh, my God, we got to freeze this account. We can’t allow the proceeds of money laundering and tax evasion to be reintroduced into the legitimate economy. We’ve got a freeze. We’ve got to stop.

They thought I was wiring all this money out to criminals. So they shut it down. They investigated the bank for eight months, found no evidence that the bank did anything wrong, and so they lifted the freeze. But by the time they did it, the incompetent receiver had done such a bad job that the bank no longer had the ability to send any money out to anybody.

And so then it was much more complicated. But all the bank’s customers, like, I can’t sue on the part of the bank’s customers. But if the bank’s customers want to file a suit, you guys are going to win. My lawsuit is going to give you all the evidence you need.

The regulator did not fulfill her fiduciary responsibility, and neither did the receiver. There was no reason to put this bank into receivership. They had all sorts of alternatives. There was another group of buyers who wanted to buy the bank.

I offered to liquidate the bank myself and to put more money into it to protect the customers. No, they didn’t want any of that. They were following the deal that was negotiated with the IRS on the complete liquidation of my bank in receivership to make the bank look as bad as possible. And had they not done that, I mean, even if OSEF had just not had that press conference, if they had not allowed the J5 to claim credit for shutting by my bank and falsely pretend that it was guilty of facilitating tax crimes and money laundering, if they had.

If she really thought the bank was insolvent and needed to be shut down, had she just done it quietly without a press conference, even if she put it into receivership, everybody would have got their money back. You know, two. Two years and four months ago, whatever. Everybody would have been paid in full.

The only reason that the customers are still waiting, the only reason that one of my customers committed suicide a few months ago over the financial hardship caused by his life savings being tied up in my bank. The only reason for this delay was because of that conspiracy, was because they decided not to do what was in the customer’s best interest, but to do what was in the J5’s best interest. The J5 nations desperately needed a success, and so they manufactured a success out of a failure. And this is totally illegal, I think.

I mean, I really wish the Trump administration. Bondi is going to be the new AG or somebody. I mean, I’ve got all the evidence on a silver platter. The former chief of the IRS should be in jail.

He should be charged and then hopefully convicted and put in jail. I just don’t want to sue civilly. What they did is a crime. And if they get away with it, if the government can do this kind of stuff to me, they can do it to anybody right now.

I mean, I don’t have it as bad as some people because they didn’t lock me up. I’m not in jail. Right. They didn’t fabricate evidence and actually, you know, trump up some false charges.

All they did is steal my bank and inconvenience thousands of my customers. Right. So I suppose I could, you know, I’m lucky that it wasn’t worse, but it’s still bad and I want to put a stop to it. And I’m going to keep on talking about it and shining the light on this corruption in the US Government until something happens.

Anyway, that’s it for today’s podcast. Have a great weekend, everybody. This was my 999 podcast, so it’s the last one in triple digits. The next time I do a podcast, it’s going to be number 1,000.

That’s a lot of podcasts. So in the meantime, if you like this one, give it the thumbs up. Give me a comment, share it with your friends. And again, yes, sign up for our free newsletter at Shift Sovereign.

Buy yourself some gold and silver on this dip. This week, Shift Gold guys will be working a long weekend trying to, you know, fill the orders because this is a buying opportunity on this pullback in gold and silver. And the same thing with the mining stocks and the foreign stocks on this fake rally in the dollar. Now, it might go on a little bit longer because there’s going to be a false optimism for a while, but that’s going to fade when reality sets in.

Bye for.