The Next FED Pivot Is Here (Uncut) 03-26-2025

Stop The Fraud, The Next FED Pivot Is Here | Danielle DiMartino Booth

We’re looking right now at a North American continent that is in recession, and I think that that is what we will see in the rearview mirror. When you look at credit card debt, student loan debt, personal loans that we’ve seen piled on since the end of the pandemic, and now student loans have to be repaid again, this, I think, can be very problematic when you look at it holistically. Now we’re understanding why home prices have been as elevated as they’ve been.

It’s been a massive government subsidies program that we’re just now finding out was propping up the market and actually working against first-time homebuyers by keeping home prices artificially propped up. I’m actually running a big campaign very forcefully right now on Twitter that is hashtag stop the fraud. Again, if something seems to be too good to be true, it is.

Hello, and welcome back to Soar Financially, a channel where we discuss the macro to understand the micro. My name is Kai Hoffman. I’m the Edge AR Mining Guy over on X, and of course, your host of this channel, and I’m really looking forward to welcoming back Danielle DiMartino Booth.

She’s the founder president over at QIA Research, and I’m extremely happy to have her back on the channel. Really, really timely because we haven’t had her on in over a year. We kept missing each other at conferences, so I had to ask her to come back on.

We have to do this virtually now. Can’t wait for another conference to meet up. It’s too long until we see each other again.

It’s probably November in New Orleans that we’ll catch up again in person, so we have to do this now. It’s been way too long. Lots to talk about, of course.

We’ll start with a general overview of the economy, but we also have to talk about what the Fed said last Wednesday. I have to dissect it a little bit, talk about market reactions to it, but also what does it mean for the consumer? How is it trickling down into the real economy? So lots to talk about, and before I switch over to my guest, you know the spiel. Please hit that like and subscribe button.

75% to 80% of you are not subscribed to this channel. We do appreciate it. It’s free.

It doesn’t cost you a thing, so please. Thank you so much. And now, Danielle, it’s great to have you on the program.

It’s good to see you again. Thanks so much for making the time. Great to be back with you.

I cannot believe it’s been more than a year. It’s crazy. Yeah, we’ve done a roundtable at the Vancouver Resource Investment Conference in January 2024.

Time just flies. It’s ridiculous. I’m not sure what’s going on, what we’re doing all day, but insane.

It’s insane how time flies. Danielle, since it’s been so long, we have to start with a white piece of paper just to start writing on. So I’ll ask you a very general question.

It’s just about the state of the economy in the financial markets. What’s your current assessment here? So I think that we’ve seen such a dramatic decline in confidence, whether you’re talking about CEO confidence or U.S. consumer confidence. Heck, if you’re talking about Canadian confidence.

We’re looking right now at a North American continent that is in recession. And I think that that is what we will see in the rearview mirror. We never see real-time economic data reflect what’s actually happening on the ground in the economy until after the fact, until revisions come through.

But what we’re seeing through the prism of revisions is that the U.S. economy was stumbling, stumbling into the election. There was a burst of energy, a burst of optimism. And now we’re seeing a full retracement of that.

And whether you’re talking about layoff announcements or bankruptcies or corporate earnings or margin squeezes, everything that we’re seeing outside of the hardest data tell us that the U.S. economy right now is in a big slowdown. Yeah, really interesting commentary there. And you’ve been in the recession camp since October 2023, if I remember correctly.

So you obviously still stand by that. What do you hang your head on here? What’s the data you’re using? You mentioned a couple of confidence indicators here. Anything else we should be looking at? Well, so just to set the record straight, I was in the October 2023.

And then we actually saw the rule that I follow the most closely to gauge whether we’re in recession or not come out of recession. It was a blip, which came, by the way, on the heels after what we think was a recession in 2022 that wasn’t called that recession. But we saw employment begin to heal.

And then in April of 2024, everything collapsed again. And through the revisions of negative payroll revisions, one after another after another that we’re getting, it is beginning to look like the U.S. economy as we speak has been in recession for about a year now. Yeah, absolutely.

But the question, the data, like the data we have to work with and the Fed throws at us, and maybe I’ll throw that up here, is the economic projections that the Fed uses and recently shared with us. Is the economic projections here changing real GDP? So growth is slowing. I think we can all agree on that.

But the unemployment rate is coming down and PCE inflation is checking up higher. How does that fit into the narrative here? Like, how do you make sense of all of this? Apparently, if you just take this data, it’s healthy. Yes, on the surface it is.

But if that data reflects reality, then why are 66% of Americans telling us that they expect the unemployment rate to be higher in 12 months’ time? We’ve never seen, and this is University of Michigan data. This is not a fly-by-night data source. It goes back to 1968.

It’s the most relied upon, consistent gauge of consumer sentiment. And when you’ve got two-thirds of Americans anticipating through the prism of that survey that the unemployment rate is going to be rising in a year’s time, we’ve never seen anything north of 60 without the U.S. economy being in recession. Now, granted, the unemployment rate is low.

It’s only gone from 4.0 to 4.1%. It almost rounded up to 4.2% with the February data. And the Federal Reserve sees it ending 2025 at 4.4%. Well, given what we’re seeing with layoffs, right? Challenger Grain Christmas announced 172,000 layoffs in the month of February. That was the highest going back to the Great Recession.

Only 62,000 of those layoffs were attributable to the public sector, meaning the private sector is where we continue to see the greatest amount of job loss. We fully anticipate at QI Research for there to be a much higher unemployment rate than what the Fed anticipates, 4.4%, by the end of 2025. In fact, I think the risk is there that you actually see that 4.4% unemployment rate by the time the Fed meets again on May the 7th.

Again, in February, it almost rounded up to 4.2%. Given what we’ve seen in the layoffs that have been announced and in government job cuts, it’s very easy to see that nearly 4.2% going up to 4.3% for March payrolls and 4.4% for April payrolls, which are announced on May the 2nd, five days before Jay Powell is next at the podium. Two full jobs reports that we’ve got before then, which is why I’m anticipating for there to be yet another Fed pivot. Oh, OK.

I was going to ask you about the unemployment of the public sector, but you just brought up the Fed pivot and now I’m pivoting a little bit. What do you mean by that? You have to elaborate on the Fed pivot. What do you mean? Are they raising rates? No, I think the Fed is going to be pivoting and saying it’s not going to be one or two rate cuts in 2025.

It’s actually going to be three or four or more rate cuts in 2025 because they are not allowed to ignore their employment mandate just because they have, again, fears of inflation rising. Not rising inflation, but fears of inflation rising that they anticipate so few rate cuts this year. There is that second employment mandate, and I think they’re going to have to pay much more attention to that beginning here with the next coming payrolls report.

Yeah, and you just threw me off there when you said pivot, because the trend was already clear going for two rate cuts, but now they would just go harder. I don’t know, for lack of a better term. Not sure if there’s a technical term for that.

Jay Powell has been maintaining that the labor market is solid, that the consumer is strong, that he’s not concerned about the U.S. economy. Well, if the Fed is going to be cutting rates more, then he’s going to have to change his tune. And that’s what I refer to when I say pivot.

Yeah, gotcha. Okay. No, because I thought it was a pivot, like everybody was expecting rate cuts, that if you were to pivot, like, are we raising rates? That’s been a bit of the discussion.

And I think everybody’s still trying to figure out whether the Fed is dovish or hawkish after this press conference. I think that’s a big question mark. Where do you stand? Do you see him as dovish or hawkish right now? I see the Fed right now as being rather schizophrenic.

So very undecided. You’re seeing growth projections come down. You’re seeing unemployment rate projections come up, but you’re seeing the inflation.

Expectations also rise. And this is a reflection of fears of tariffs, not tariffs that have been imposed. And there’s a big difference between the two when you hear the CEO of Walmart, when you hear the CEO of Dollar Tree, when you hear the CEO of Lenar Homes or KB Homes saying, we’re having to discount.

We’re having to discount more than we would like. We’re seeing our margins squeezed. We’re seeing higher income U.S. consumers trade down to Walmart.

We’re seeing middle income U.S. consumers trade down to Dollar Tree. That is Federal Reserve officials, not inflation. Those are squeezed margins.

Yeah, no, they will. And there was a really smart question at the press conference there on Wednesday afternoon. It was like, Jerome Powell, when you see the inflation rate ticking up, like, why aren’t you raising rates? And he’s been tiptoeing.

He’s been a fantastic tap dancer at that press conference. I have to admit, it was fun to watch him dance there. Would it even make sense? Is there a case for higher interest rates right now? Well, not with inflation on a disinflationary track.

And that’s indeed what we’ve seen, whether you’re talking about the Cleveland Fed’s rent indexes that are showing that shelter prices are coming down. Chair Powell’s been referring to that. Whether you’re talking about trueflation, trueflation fell as low as about 1.1%. Now it’s up to 1.7% or so.

That’s telling you that real-time pricing is below the Fed’s 2% target. We’re seeing core CPI come down. We’re seeing services spending in the United States flatline.

Now, services has been the source of inflation in the post-pandemic era. We saw a lot of goods inflation initially. There was the supply chain disruption.

Consumers were buying all kinds of goods with stimulus money. We’ve almost spent $15 trillion is how much the debt has increased to just about once we hit that $37 trillion mark. We’ll have seen $15 trillion in government spending since the pandemic hit.

A lot of that manifested in U.S. consumers buying forward goods. And then that became revenge spending, vacation planning, spending on services, higher hotel rates, higher airfares. We’re seeing a huge reversal in all of these trends and services spending come down.

And that means that one of the constructs that Chair Powell dreamed up, super services, core inflation, that we’re seeing that actually begin to decline as well. That’s what Powell should have mentioned at the podium. But had he, then the reporter’s next question might have been, well, forget about me asking why you’re not raising rates.

For heaven’s sake, why are you only planning on cutting rates one or two times in 2025? Why aren’t you more aggressive on that stance? Absolutely. I think QT is a good question. We have to throw that in here now.

I think indirectly the Fed is easing here by reducing their QT from $25 billion to $5 billion. One of the questions is like, why not zero? Why even bother with $5 billion? Is it more symbolic? What’s your stance on the QT and how is it affecting the economy? How is that going to be reflected in general? So I think not going to zero with the treasury roll-off, A, was premature. I don’t think that they needed to cut the treasury roll-off as early as they did.

I think that was more of a nod to Treasury Secretary Scott Besant and his desire to see the 10-year benchmark treasury yield come down. But at the same time, as you point out, they did leave some quantitative tightening on the table in treasuries. And they also said, we’re going to continue to play catch-up and roll off more mortgage-backed securities as we see mortgage prepayments increase with falling mortgage rates.

So that is the aspect that I prefer to focus on. And that is that we’re going to continue to see on net a decrease in the Fed’s footprint in the mortgage-backed securities market, which speaks more to the future of Fed policy and failed past Fed policy going forward. In other words, I don’t think the Fed’s ever going to embark upon again quantitative easing in the U.S. housing market.

That’s why they’re going to let that roll-off be bigger going forward, even as they decrease the shrinkage in their treasury holdings. Is that even an area of concern, the housing market right now? How fickle is it? And what’s your assessment here? Well, if you listen to major homebuilders in the United States, they’re saying that we’re not seeing any kind of a takeoff in the spring selling season that we would normally see. Homebuilders are saying we have to discount home prices more than we would like to otherwise.

Many, many, 25 percent of the U.S. population now is seeing existing home inventories north of where they were in 2019. So it’s looking like U.S. housing, which always leads the U.S. economy, whether into contraction or into expansion, it’s looking like the U.S. housing market right now is very much on a weakening trend. And that’s something that we will have to pay attention to going forward, especially if the Fed’s support for that market is going to be decreasing as a factor of time, that that aspect of quantitative tightening is going to continue going forward.

And in fact, the New York Fed has blueprinted out a plan to reduce the Fed’s mortgage-backed securities holdings through the end of the year 2035. How healthy is that correction, though? When do we reach that? OK, yes, we all know housing market’s been overpriced. It’s been overheating.

Supply demand is still a big question mark, depending on what market you look at. So the question is, how healthy is that correction? Should we get nervous about that correction? Is it just taking off the cream off the top here and we’re getting back to more normal levels? Or is that something we should actually consider because we’re now getting to levels that are actually threatening? Well, I think it depends on the beholder, if you will. If you’re a home seller and you’re holding out for a higher price right now, good luck.

So you need to be pricing that house absolutely to sell. It is a healthy correction. It’s going to be one that we need to see continue.

We’re only seeing right now, I think, 47% of apartments coming out of the construction pipeline being rented within the first three months of coming onto market. That’s fresh census data for the fourth quarter. That means that 53% of apartments are not being rented.

And that’s why we’re seeing apartment rents and apartment concessions as big as they are right now. That’s going to weigh on the housing market until we start to see the price of renting and owning in the United States come more into line with each other. We’re far ways from that.

And so I think for working American men and women, they are very welcome of a big correction in the housing market, which we do see to be in train because of a separate aspect of the US economy and that is financing. And financing really is drying up for home investors, which is going to push more supply yet out onto the market. I am a huge advocate and proponent for seeing a bigger correction, whether it’s north of the border in Canada, where you are, or south of the border in the United States.

It’s long overdue. Yeah, absolutely. From time to time I see on X, I see like maps pop up, like recent one was Galveston, where all the Airbnb units are being, it might even been you or somebody retweeting it.

Actually, that’s why it popped up in my feed. I try to stay away from the 4U. I’m more of the following kind of guy on X these days because the 4U is kind of weird these days.

But it might have been you or so even retweeting it that Galveston is seeing a lot of dumping of Airbnb units. Is that something you’re seeing? And I think that’d be a healthy correction, quite honestly. It would be.

But again, that’s a reflection of a huge increase in you can get rich overnight. It’s a sure thing. Any get rich quick scheme eventually fails.

And that’s what we’re seeing with this. We just published about the fact that in Las Vegas right now, year over year, visitors to Las Vegas are down 1.1% year over year. If that’s what you’re seeing at the epicenter of U.S. tourism, Sin City, Las Vegas, imagine what you’re seeing when vacation intentions are at the lowest in 13 years.

U.S. households, families are not splurging on great big Airbnbs and the financing for these investors is drying up at the same time. And that’s why what we’re seeing in Galveston is being replicated in markets throughout the United States right now. I do think it’s healthy.

There’s a huge FHA scandal that’s breaking at the same time that gives us a lot of color on why we’ve seen an artificial propping up of home prices in the United States that I’m happy to say is going away. What does FHA stand for? Federal Housing Administration. It’s a program that was originally intended for first-time home buyers.

And what we’re finding out is that the prior administration allowed for modifications really without any kind of qualifications. So we’re seeing Americans who’ve never made a mortgage payment at all and have had their mortgage paid for multiple years by this program. The Wall Street Journal was the first big media outlet to report on this.

And I’m actually running a big campaign very forcibly right now on Twitter that is hashtag stop the fraud. Again, if something seems to be too good to be true, it is. And now we’re understanding why home prices have been as elevated as they’ve been.

It’s been a massive government subsidies program that we’re just now finding out was propping up the market and actually working against first-time home buyers by keeping home prices artificially propped up. Yeah, it feels like it’s still some fallout from the COVID pandemic here. Absolutely.

It’s just a massive fallout of that. The Biden administration, and I don’t say this in a political way, but on January the 16th of 2025, this particular program was extended through the end of February, 2026. This is a COVID public health emergency era program that has been extended through February of 2026.

Hence the hashtag stop the fraud. They didn’t even have any political gape from that. They’ve lost already.

Why give out handouts? I don’t get it. That’s a different story. That’s a very different story.

There are midterm elections coming up. So the timing is absolutely Machiavellian. If you were of that mindset, that was not my idea.

That was actually published by somebody else. But again, the timing could be very, very good if you start to see a big foreclosure wave coming into the midterm elections. Yeah, it’s just a higher mortgage rates.

It’s completely killing the Airbnb model here. Passive income. It’s so easy.

Just use this software and everything will be done automatically for you. It’s interesting. I’m talking about housing.

A couple of interesting headlines in the Financial Times, like Home Depot shifts focus to contractors as elevated mortgage rates lead households to defer renovations. And then there was, I can’t find the headline right now, a billion dollar takeover of a home exterior and a home, what was it? Like outdoor furniture company. Either it was Azek or something.

$8.7 billion merger. And I’m kind of curious, either we’re at the top of the market when this happens, or somebody’s really smart and buys at the bottom. So I’m trying to figure that one out.

I don’t think anybody’s buying at the bottom right now. I think right now that when you see so many bankruptcies in the consumer discretionary space and you see a big merger announced like that, that’s one big player trying to buy the top line of another. So they’re saying, gee, my revenues are falling.

I need some kind of a boost here. How can I cut costs further? Oh, I know. I can buy my biggest competitor and slash employment to the bone, but manage to prop up my revenue line.

That’s what we typically see at this juncture, but it is not a sign of buying at the bottom. No, it didn’t strike me like that. So it sounded more like hitting strike or striking at the top.

So briefly we’ve written the record button. We talked about the auto market, which is also really, really interesting. I’ve had a phenomenal conversation with Zach Shefska the other day here on this channel.

He’s from Car Edge and he gave us some fantastic numbers about what the auto market looks like these days. And you brought up some stats as well. Like run us a bit through it.

Cause I’ve asked him point blank, Zach, is the U.S. auto market potentially our subprime mortgage crisis that we’ve seen in 2008, 2009? Does that have the potential to derail our economy and the financial markets again? And so spoiler alert, most of your viewers have already seen it. His answer was no, and he’s right. Because a one and a half trillion dollar or so market does not have the heft to take down the U.S. economy in the same way that the subprime mortgage crisis did, which was twice that.

I think it was $3.7 trillion market at its peak, the subprime mortgage market. But we’re not just talking about autos. And I think that that is the other salient point that you have to bring into this discussion.

We’re also talking about $1.6 trillion in student loans. We’re talking about $1.1 trillion in credit card debt. We’re talking about several hundred billion dollars more in unsecured household personal loans.

And when you look in the aggregate at that pool of debt and the very high delinquency numbers that we’re seeing before an appreciable rise in the unemployment rate, when you aggregate all of the unsecured debt, I don’t look at an auto loan as necessarily being secured, given how little you can get for the car at auction. But when you look at credit card debt, student loan debt, personal loans that we’ve seen piled on since the end of the pandemic, and now student loans have to be repaid again, this, I think, can be very problematic when you look at it holistically. Again, with a starting point of an unemployment rate that’s just shy of 4.2%. That, I think, is where you need to put your focus, is what the sum of distress in the auto and credit card and student loan and personal loan universes look like together.

You mentioned to me before hitting the record button that student loans will have to start to get repaid again very, very soon here. It is one of those potential triggers that I see that could set off something bigger like that you just mentioned. Yes, auto loans by itself, probably not a problem.

Student loans by themselves probably can be managed. Credit card debt, yeah, the number is high, can be managed if taken individually. Is that the trigger, the student loans, or should we be looking for other triggers? I’m just trying to get some sense of like, okay, this is when it starts.

This is the trigger. So if you’re talking about auto loans, I think that’s about 1.5, 1.6. If you’re talking about student loans, that’s, again, 1.6. Add on credit card debt, that’s another 1.1. Buy now, pay later is another 250 billion or so. Personal loans, at some point, you get well north of $4 trillion and a lot of distress.

And when it comes to student loans, I think that there’s a lot of confusion about the timeline. Student loan repayments by law restarted in October, October the 1st of 2023. Now, you weren’t penalized because the Biden administration gave you a 12-month grace period over which time your default, your non-payment of student loans beginning in October of 2023 would not be reported to the credit reporting agencies, the trans-unions, the experience of the world.

But beginning October the 1st, 2024, those delinquent payments began to be reported to the agencies that control FICO scores. And that is why on March the 26th of this year, the New York Federal Reserve is going to be issuing a special report on the credit implications for U.S. household balance sheets of the repayment of student loans. We’re starting to see FICO scores come down appreciably.

When your FICO score comes down, your ability to get a mortgage, your ability to buy a car, your ability to access credit card debt, they all take a hit. And because of the magnitude of the student loans, because of the reality of President Trump trying to shut down the Department of Education and a lot of the student loan forgiveness being reversed, it’s going to be a very tangible drag on households’ access to credit. So you do have to add them up.

And they are counting against consumers. And this is a 71% consumption U.S. GDP. That’s the percentage of U.S. GDP that is consumption.

And the average U.S. consumer relies heavily on debt to support their spending. So yes, between auto loans and student loans and credit card debt and buy now, pay later, and personal loans, you get a number that’s much bigger than what you saw with the subprime mortgage crisis. And yes, it does matter.

Yeah, I’m just looking for that first domino that sets it all off. That just sets the whole- Well, Marty, I mean, since you’re, I mean, and this is very Google-able. There’s been front page Wall Street Journal stories.

Financial Times has reported on it as well. There’s this shock factor right now with U.S. households because so many of the consumers who did not qualify for any form of student loan forgiveness have the highest student loan balances. We’re talking about dentists here.

They also have their first mortgage and property taxes. They moved out to the exurbs when the pandemic hit. They bought a car for the first time.

They moved out of urban areas. And so these are the households who are middle to upper income earners who are seeing the biggest hits to their FICO scores. And it is a domino.

And the media has begun to report on it. And that’s why we’re seeing the ripple effects, the car repossessions. Why are really nice cars being repossessed? Why isn’t it just jalopies and lemons? Because a lot of U.S. households who make a lot of money are still so overextended.

It’s unbelievable. Yeah, it’s just a different, like I’m German, of course. Our spending behaviors are very different.

I’m half Italian, but half German myself. I don’t believe in debt. I’m just reporting on what I’m seeing.

But a lot of American households, they’ve seen so much debt forgiveness here in the last five years that they spend money as if it’s never gonna have to be paid back. So, but that’s why I’m calling it a shock factor to consumer spending right now. And we’re seeing that play out in a lot of the confidence surveys.

Yeah, you say buy now, pay later. It’s actually being offered now with food delivery services. I was like, okay, that’s maybe the end of that story.

Although I understand the delinquency rate on those are only a percent or still manageable. My brother used to work in that industry. Well, the asterisk there is that a good 20, 25% of buy now, pay later is paid off with credit cards.

So no, I mean, the whole idea of a $14.50 drink, this was tweeted out a few days ago. I split my drink into four payments over the next few months. I’m like, well, enjoy the drink.

But you’re right. I mean, we have gone to crazy farm. You can go to a Walmart kiosk right now and check out and get between 400 and I think $2,400 of instant buy now, pay later credit on your phone.

I don’t know, that just sounds like peak conversation to me here. So really, really interesting. That’s coming in you.

Yeah. Not trying to poke holes into the recession story a little bit, but you touched on tourism spending and hotel spending. And maybe as a counter argument, I saw that Carnival Cruise Lines put out their Q1 stronger than expected with a very strong growth forecast.

How does that fit into the narrative? I think that might be demographics. I think that could have more to do with the fact that one of my favorite data points is that Americans who are 70 years and older own 40% of the stock market. Americans who are 70 years and older own 25% of residential real estate.

So even with stocks 10% off their highs, they’re still feeling very wealthy. And it is older, retired Americans who tend to be the biggest cruise goers. So that doesn’t surprise me.

But from friends of mine who are actually avid cruise takers, and I’m not talking about senior citizens here at all, they have reported back to me that the prices for cruises are coming down remarkably. So while Carnival may be reporting that it’s hitting on its revenues, it could very well be doing that at the expense of margins because cruise prices are coming down. It would be kind of crazy to say we’re seeing hotel rates crash in the United States and at the same time not seeing declining cruise prices, but there are always gonna be winners and losers.

And again, you have to consider demographics when you’re looking at something like cruises. Yeah, absolutely. It makes sense actually from that perspective.

And on the hotel price front, why don’t hotel prices in New York come down a bit more? It’s ridiculous what’s going on there. Well, there’s a lot of, yes, there’s too much rent subsidy. There’s 400,000 unoccupied units in New York and a lot of, we don’t have to go there.

We don’t have to go there. No, I’m going to New York in May and just the hotel prices, it’s ridiculous. Like it’s almost making the trip uneconomic.

It’s just crazy, crazy stuff. Wait until the very last second because when I go to New York, if I’m gonna get a hotel room, I go on hotelstonight.com, whatever it is. You wait till the last minute, then thank me later.

Good point. Yeah, I’m a calm, relaxed traveler. I’m not sure I’m that calm and relaxed when I know I have a trip, especially as a foreigner entering the United States right now.

So showing up with a very late hotel reservation, potentially no reservation, problem. Different conversation yet again. Danielle, we’ve talked a lot of doom and gloom and recession and all that, but where do you see opportunity in the market? Let’s turn this around a little bit.

No, I do think that there is, I do think that there’s going to be opportunity for the promise of AI for serious consolidation in education and what that means for the U.S. workforce going forward. There’s some talk about right now in the U.S. Congress about completely revamping the student loan system and making student loans going forward contingent upon the type of education that you’re getting. So I think that times like these that prove to be very stressful in the short term for the U.S. economy end up producing some very healthy long-term dividends.

And separately, I completely applaud the efforts of Treasury Secretary Scott Besant in being so forceful in saying we’re going to reduce deficit spending. We’re going to get the United States on a more stable fiscal trajectory. All of these things, even though they produce the quote unquote short-term pain, it’s the long-term gain part that the United States has been avoiding for generations now that is long overdue.

We need to be looking to the future of the country and the future of the country’s finances. And I think there are a lot of technologies that are out there right now can help us get on more stable fiscal footing. And I look forward to them.

So you think they have a chance, Doge will succeed, and just cutting spending will actually be successful? I’m not trying to be negative here. I’m just trying to test the theory a little bit. I’m not applauding a lot of the ways that Doge is coming in like a bull in a china shop and cutting particular types of layoffs willy-nilly.

What I am speaking to, however, is the fact that the United States technology, call it Uncle Sam’s IT button. That is something. Medicare, Medicaid, the way we set healthcare pricing, the way that AI can reduce healthcare costs.

These are the biggest expenditures in the United States. So if we were to approach them the same way that companies are approaching cost-cutting by using technology, by exploiting the promise of AI, if we were to apply those to the cost of running the nation, to the big, huge bureaucracy, that has massive potential. So I’m not speaking to whether Doge is going to lay off half a trillion or two trillion.

I’m actually speaking to the longer-term promise of applying technology to how the US government is run. You brought up a thought in my head, Danielle. A friend of mine is a dentist here in Germany and she can charge 28 euros for a checkup on my teeth, like just a basic checkup to see if I have any cavities.

28 euros. Fully studied, smart dentist, and that’s what she can charge through the insurance company. It sounds ridiculous, actually.

That’s without any extra cleaning or anything. That’s separate. Bringing down the medical costs in the US, how drastic.

I think that would be a big step forward, just reducing costs for Medicaid and the overhang for Medicaid, for example, and some of the costs for medicine. Can’t Trump just sign an executive order to just do that? It’s like, hey, 30 bucks for a dentist checkup, that’s the max, that’s it. That’s how much you can charge and that’s how much you can charge the consumer or the patient in that case.

I’ve been hearing horror story. I’ve just a wild thought, just to get everything to grip on it. So what you describe actually is price controls.

I’m not advocating for that. What I am saying is that there should be a mandate for technology to be used in the medical complex, which would affect social security, it would affect longevity, it would affect Medicare, Medicaid. I’m saying that that’s reasonable.

I recently had both of my knees MRI’d. So too much information, personal, trust tree, whatever you want to call it. And I ended up spending 50% of what I would have spent had I used my insurance, just by going cash pay.

So there is something that is structurally broken in the United States healthcare system when you can go in and spend 50% by saying, I’m gonna pay out-of-pocket cash compared to going through insurance because the government is involved with a lot of the insurance reimbursement rates. In addition to what we see with Medicare and Medicaid, all of this is ripe for writing. And there’s a reason that the United States spends 100% more than any other developed country on healthcare.

That to me is low-hanging fruit. That to me is the easiest thing that we can do to get fiscal spending United States under control. And by the way, this is not a secret that we’re discussing here.

This is not a hush, whisper, whisper. This is known. So if you really want to cut government spending, then open your eyes to where it can be done and done easily.

I don’t know, I keep coming back to price control. It sounds terrible concept in general, but in the case of medical services, it might be the smart thing to do. At least give a range or something.

I’m not an expert. I’m way out of my field of expertise here. The way you describe it, your dentist in Germany has learned how to have a profession and a successful one, I would assume, within those confines.

So again, if we know what the cost of something should be, and we know what the cost we’re paying is, and there’s a gigantic divide between the two, there’s something wrong there that can be fixed. Yeah, that’s what I mean. That’s exactly it.

Thanks for putting that together in a way I couldn’t do it. So thanks so much for that. Danielle, wonderful conversation.

Always enjoy chatting with you. I could have gone on for another half hour easily here. Where can we find more of your work, Danielle? So please, if you don’t already follow me, I’ll always call it Twitter.

If you don’t already follow me on Twitter, please do, at Demartino Booth. And then come and become a Daily Feather subscriber. We put out every trading day of the year, we put out a great quick read piece that a lot of our retail and registered investment advisors, smaller investors, consider to be an institutional caliber product.

So we’d love to have you, qiresearch.com, demartinobooth.substack.com. Love to have you become part of the community and know as much as we know, because we’d love to share our knowledge. qiresearch.com slash SOAR for a 20% discount, correct? Yes, for an annual, yes. Absolutely.

Perfect. Yeah, no, fantastic. Danielle, thank you so much for your time.

Tremendous pleasure catching up with you. Have to do that again. Hopefully we can do it before November.

So I’ll be looking forward to that. Thank you so much. And everybody else, thank you so much for tuning in.

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We’ll be back with lots more on SOAR financially. Thank you so much for tuning in. Take care.