The US Already Lost the Trade War (Uncut) 04-12-2025

The US Already Lost the Trade War – Ep 1021

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Download the CFO’s Guide to AI and Machine Learning at netsuite.com. The guide is free to you at netsuite.com. Okay, welcome everybody. This has got to be one of the wildest weeks in the financial markets that I can remember. Also for me personally, for my clients, anybody following my investment advice, it was one of the most profitable weeks in the market that I can remember.

Maybe I should call this podcast I Told You So, but I’ll probably come up with a different title. But what a week ahead of a holiday. We’ve got Passover starting tomorrow.

Then we have Easter on Sunday. So let me wish everybody a happy holiday weekend. But I believe we’re going to see a lot of fireworks next week.

I don’t know if it’ll start Sunday night. I think some of the Asian markets will be open. I don’t think they celebrate Easter in Japan and China.

So while Americans are celebrating, they could be selling the hell out of U.S. Treasuries, which is a big story of the week. I’m watching in the financial media, and people are talking about all the moves in the market that nobody expected. Everybody is talking about how nobody thought that the dollar would go down or that bonds would go down and rates would go up with tariffs.

And so everybody was surprised by the markets because everybody’s been saying it’s counterintuitive. Well, it’s only counterintuitive if your intuition is wrong. Everything that has happened since Liberation Day is exactly what I said would happen before Liberation Day as a response to the liberation.

So had all these people on CNBC or whatever, had they just been listening to my podcast or just following my feed, they wouldn’t have been surprised by the big drop of the dollar. They wouldn’t have been surprised by the big rise in interest rates because that’s exactly what I said would be the result of these tariffs. But anyway, let me back up and go earlier in the week because when the markets started trading on Monday, the sell-off that started the previous week after we got April Fool’s Day come late, Liberation Day, we got a big sell-off in the markets on Thursday and Friday.

Markets were down again on Monday. And then there was a turnaround Tuesday kind of relief rally. Everybody was happy because, you know, the Dow was up like 1,500 points.

And, oh, Easter’s next Sunday. All right, I thought it was just coming up. OK, so it’s a week later.

Somebody just pointed that out. So maybe everybody will be trading on Sunday. But anyway, so on Tuesday, the markets are open higher.

But there’s no news, right? Trump is still digging in his heels, you know, with these reciprocal tariffs. I’m not backing down. You know, even I think it was Vietnam was the country that came to Trump and said, OK, we’ll go to zero tariffs.

We’re ready to go to zero tariffs. And Trump was like, eh, not good enough, right? Because, you know, it’s not about the tariffs. It’s about the trade deficits.

He wants to get rid of the trade deficits. And I’ll get into that in a bit. But, you know, there’s no good news to explain this market rally.

And then the market reversed. The Dow closed negative about 300 points. So about an 1800 point decline intraday, huge turnaround, one of the biggest intraday reversals.

Then on Wednesday night, it looked like it could have been a crash because the bond market started to tank. And I was watching it in real time, watching bond prices plunging. It really started out to be a crash.

And the yield on the 30 year government bond got above 5 percent, just barely. And on the 10 year, we got above four and a half. We had been below four the previous week.

Right. So a huge move in bond yields. And I bet that there was a real panic.

In fact, there were rumors that Scott Bessett was going to resign. Now, I don’t know if that was ever true. I mean, sometimes when these rumors come out, because I’m sure he didn’t like like these reciprocal tariffs.

You know, that’s, you know, some of the wacky people, part of Trump’s advisers, the real protectionist guys that, you know, probably push for these things. The Peter Navarro and the Ludnick’s and, you know, his economic adviser of chairman of the Council of Economic Advisers. All these guys are like hard line protectionist tariff guys.

And I think maybe Bessett talked to Trump and said, look, you know, this is going to be a financial crisis. I mean, the bonds are tanking. You know, you got to do something.

Right. Because the markets are not liking these these tariffs. Right.

And when Trump announced these reciprocal tariffs, I mean, he was so proud. All this fanfare. This is Liberation Day.

Hey, I got great news for you. I’m going to make everything you buy way more expensive. Right.

I’m going to hit you with the biggest tax increase ever. But, you know, he doesn’t put it in those terms. He’s like, this is great.

I’m hitting them. Right. America is fighting back.

We’ve been screwed over. We’ve been taken advantage of. And now, you know, we’re fighting back.

This is our Independence Day. This is our liberation. Right.

It was all BS. And what I said at the time on my podcast is he’s liberating us from our standard of living, from all of our low-cost goods. He’s liberating us from low interest rates.

He’s liberating us from our stock portfolios and our whole our equity in those portfolios. All these things I was warning about. So I think that he was persuaded to basically surrender in this part of the trade war, de-escalate the trade war because it wasn’t a complete surrender.

But Trump announced that he was getting rid of these tariffs. Now, earlier in the day, right, the market was already down. Right.

And he put out a post on Truth Social. Hey, it’s a good time to buy. Don’t worry.

Don’t sweat it out. You should be buying. And little did we know, he was actually passing out insider information.

Nobody really knew because it was a few hours later that he basically said that, you know, there’s a 90 day pause. Right. He didn’t really call him off.

It’s a 90 day pause. But I think that they’re never coming back, you know, because he’s already seen what happened. Right.

He was, you know, looking into the abyss and, you know, didn’t really like what he saw. And so they had to call it off. They call it a pause.

But I think they canceled them. And so the markets rallied. And then, you know, Trump was like almost taking credit.

Hey, this is one of the biggest one day rallies in stock market history. It was like the Dow was up almost 3000 points. It was like a crazy rally.

But I mean, the only way that Trump is responsible for that rally is because he undid a really dumb thing that he shouldn’t have done. So it’s like you do something really bad and the market collapses and then you then you take it away and then you like can’t claim credit for this big rally. But the problem is.

That he didn’t remove all the tariffs, the 10 percent tariffs across the board, that baseline is still there. So everybody’s got a 10 percent. All the goods got 10 percent tariff coming in.

We still got 25 percent Mexico and Canada, 25 percent on all autos and auto parts. And now we got one hundred and forty five percent tariff on Chinese goods. And the reason that China got so high is because China retaliated.

Oh, and also on that Wednesday, the European Union announced their own retaliatory tariffs that were going to take effect in a couple of days. So Trump was looking at that. He was looking at China retaliating, Europe retaliating, the markets crashing, the bond market crashing.

You know, there were some people who were saying that Trump was deliberately crashing the stock market to get the bond market to go up so interest rates would come down. Well, first, the stock market crashed, but then the bond market crashed, too. So if his plan was to crash the stock market to get the bond market to go up, it backfired because the bond market crashed, too.

And so he had to save face. He had to do something. But, of course, Trump couldn’t just admit that it was a mistake.

So he had to pretend that this was all part of his plan. And he got Scott Besant and everybody to read off the same script. And so what what he basically said is, aha, yep, this is exactly what I wanted.

Now we’ve got the whole world united against China. Right. China was the only one that retaliated.

Everybody else played ball. Nobody else retaliated, even though the European Union did. Right.

But he said, well, it didn’t count because it didn’t come into effect. So he said, look, this is what I wanted. I wanted to force China to retaliate so I could show the whole world that China is the bad guy.

Right. And we can all kind of gang up on China. And so, yeah, this is what I wanted.

Right. We’re going to isolate China with these hundred forty five percent tariff. And he said, now I can negotiate because now I’m in a great position to negotiate.

I’m going to negotiate these deals. If he actually wanted to use tariffs as a negotiation leverage, he’s lost it. He can’t negotiate anymore with the threat of tariffs because now the world knows that it’s an empty threat.

He’s a paper tiger, because if Trump puts back on those high tariffs, the markets are going to crash. The markets rallied massively because he removed those reciprocal tariffs that aren’t even reciprocal. So how is he going to put it back? Who is he fooling? Right.

He’s exposed himself. So people are saying, oh, Trump is a brilliant negotiator. If he is, that had to be the most the worst negotiation move that I’ve ever seen, because you completely destroy your leverage, because the world knows, hey, he Trump can’t do that.

And if he does it, the markets are going to tank and he’s going to undo it. So whatever leverage he thought he had, he lost. Meanwhile, you know, Trump is claiming before this happened, he’s saying like all these countries are the phones are ringing off the hook.

The countries are calling me and they’re saying, please, please, sir, I want to make a deal, sir. We’ll do anything, sir. Anything you want, sir.

You name it. We’ll do it, sir. Right.

Trump, I am sure, did not get one phone call with a world leader basically saying, I’m going to kiss your ass, because that’s what he said. He said all these leaders are kissing my ass. Yeah.

Maybe in a dream he had, they’re kissing his ass, but nobody’s kissing his ass. Right. In fact, people were fighting back.

They were doing the opposite of of what Trump expected. So they had to make lemonade, lemonade out of lemons. And, you know, they put all this political spin on this surrender to make it look like Trump won some kind of gigantic victory.

But now, though, we’re in this worse predicament. Then we were before, I mean, the U.S. has seen a substantial decline in its global position. And what Trump believed.

The tariffs we’re going to do was it was going to cause capital to come to America. That’s what these guys believed, because they thought that, well, we’re going to put these tariffs. And so now everybody is going to have to invest in America to avoid the tariffs.

Everyone’s going to have to build these factories in America. So all this money is going to come into America to avoid the tariffs. Well, again, whenever the government wants to do something, the opposite happens.

And so what happened as a result of these tariffs? Capital didn’t come into America. Capital fled America. This has been a global run on U.S. assets.

I mean, the only reason the stock market went back up was because it wasn’t as bad as everybody thought when they took away the reciprocal tariffs. But the market is still going a lot lower because it’s actually much, much worse than they realize. But what got clobbered this week was the U.S. dollar and the U.S. bond market.

And gold went through the roof to record highs and gold stocks. So I’m going to get in to all of that and the significance of this week, probably one of the most significant weeks that we’ve ever had in the market. And it really marks the beginning of what I have been warning would come.

For years, I knew this was going to happen. I just didn’t realize that we would do it to ourselves. I always thought that it would be foreigners who would get tired or come to their senses and not want to finance this economy anymore, that they would realize that we can’t pay our bills.

We’ve borrowed too much money and it would be our creditors that would prick our bubble. Instead, Trump pricked it. We pricked our own bubble.

But you know what? It’s hard to unpick something like a bubble that’s been pricked. I don’t know there’s any way that the damage could be repaired and that Trump could put all these worms back in the can. And, hey, it was all an April Fool’s joke gone bad.

Don’t worry. We love you. You know, we want to continue this relationship.

I don’t know if it’s possible. I think the ball is in motion and it’s going to keep on rolling down this hill. So I’m going to talk about that.

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All right. So before I get into some of the market action, I want to backtrack a little bit again and get into the whole rationale for these tariffs. You know, I did this debate, the zero hedge debate with this guy, Spencer, I forget his last name.

And the debate is up on our YouTube channel. So you should check it out. But you can see how irrational this guy is and his points.

And this is, you know, the type of thinking that is basically dominating the Trump administration, this kind of irrational thought process. But Donald Trump looks at our trade deficits. And says they’re a big problem and they are a big problem, but they’re not really the problem.

They are the symptom of the problem. It’s the problem that’s causing these trade deficits. Now, Donald Trump talked about the trade deficits when he ran the first time and he promised to shrink them.

But they actually, you know, got worse. Trade deficits hit record highs during Trump’s first term, which was supposedly the greatest economy in the history of the world. Right.

He keeps saying how great his economy was when he was president. Yet the trade deficits got worse. So obviously, in his mind, the trade deficits didn’t stop us from having the greatest economy in the history of the world, which, of course, was is a fantasy.

You know, just like all these foreign leaders kissing his ass. It’s a fantasy. We didn’t have the greatest economy.

Maybe maybe in his in his mind we did, but not in reality. But he’s right that the deficits are symptomatic of a problem. Now, he sees the symptom, but he’s got the wrong diagnosis of the problem.

See, according to Dr. Trump, the reason we suffer these massive trade deficits is because the rest of the world is screwing us over. They’re taking advantage of us. They’re cheating.

And so he can negotiate us out of these problems that the way to solve our trade deficits is the art of the deal. He is this great negotiator, although I don’t really know, like, you know, how great a negotiator he actually is. I mean, he kind of markets himself as a great negotiator, but I don’t know.

Right. But he says, hey, I’m going to negotiate with all these countries. And and that’s going to solve the problem because, you know, they’ve been screwing us over.

And every other idiot president has allowed the world to walk all over us and take all of advantage of us. And I’m the first guy I’m going to fight for America. I’m the champion.

I’m going to go out there and kick ass. Right. And we’re going to win because I’m going to kick the ass of all these countries that have been taking advantage of us and screwing us over.

Right. And yeah, I mean, that’s a populist message. That’s part of, you know, what he runs on.

Right. But he’s wrong. He’s right that we need to solve the problems that have led to the trade deficit.

But he’s wrong on what the problems are and what he is doing with these tariffs. It’s going to make it worse. That’s all.

It’s going to make what’s left of our industry even less competitive than it is right now. You see, the reason we have trade deficits, it’s not because the foreigners cheat. And if they do cheat, they’re only cheating themselves.

Right. If they’re dumping, we win. They lose.

Right. And if anything that you do to try to help your exporters sell products like less than they cost, it’s whoever gets the products at a lower cost is the winner. The country that subsidizes the export is the loser.

But in any event, trade is generally free throughout the world. Right. That that’s why all those reciprocal tariffs are a bunch of bullshit.

Right. But. The reason that we have trade deficits in this country is because we live beyond our means.

We are the problem, not China, not anybody else. It’s America. We simply spend too much and save too little.

We borrow too much. We produce too little. And how do we make up the difference? You know, and a lot of the borrowing is done by our federal government.

Borrows all this money. Well, how do we do it? Well, we take advantage of the rest of the world. We import what they produce.

Well, how do we pay for it? Well, with our dollars, the reserve currency, they’re willing to take it. Now, what do they buy with those dollars? Well, they buy our stocks and they buy our bonds. So Trump is like, hey, you know, we’re selling out America.

Yeah. You know, they’re buying up America. Yes, because we sold them America.

We made the decision. They didn’t make the decision. We wanted to buy their stuff because we didn’t make it.

And since we didn’t have any stuff, we gave them our dollars. Now, what do they what do we expect them to do with those dollars? You know, put them in a little box under the under their under their nightstand. Of course, they got to invest them.

So they buy stocks, they buy bonds. And so in the short run, it’s a huge win for America because we get all this stuff that we didn’t produce. So we get lower prices and we get foreigners buying our stocks and bonds.

So we get a higher stock market. We’re all richer. Right.

And we get lower interest rates so we can, you know, our houses go up because we have lower mortgage rates. The whole low interest rate, low inflation environment was a gift from the rest of the world. Now, the tradeoff was, yes, we’re selling off our assets.

So we were indulging ourselves in the here and now. And the rest of the world, you know, was, you know, enabling it, but they were accumulating assets. So Trump looks at this and says, the world is stealing all of our stuff.

They got all our factories. They got all these assets. They didn’t steal anything.

They earned all that stuff, selling us products that we didn’t make. Now, Trump says, I want to get rid of the trade deficits. Yes, let’s get rid of them.

But the way he wants to get rid of them means a financial crisis and a complete economic collapse. The right way to get rid of the trade deficits is not to have tariffs. It’s to get to the underlying root cause of our problem.

Why is it that we consume so much more than we produce? Right. And a lot of it has to do with artificially low interest rates that encourage this. So we have to, you know, let interest rates go way up where they should be.

So Americans will save instead of spend so we can make the investments in building out the factories and all that. But, you know, it’s a long way to go. You know, there is going to be a lot of pain to get out of this hole that we’ve dug ourselves in for 20 years or more.

Right. So there is a lot that we need to do. And yeah, you know, a lot of companies are going to go broke that were built up on this phony bubble economy.

Right. So there’s a big transition to get from the country that’s bleeding red ink and living off of imports and selling off its assets to put a stop to that, which is what Trump wants to do. You know, it’s going to require a lot of work on our part.

But Trump thinks, oh, it’s all easy. We just put up these tariffs and we’re going to swim in and tariff revenue. And according to Trump, the world’s just going to pay these tariffs for the privilege of selling us stuff.

Which isn’t a privilege. You know, I keep hearing everybody say, oh, we got all the leverage because we’re the world’s biggest customer. We don’t have any leverage.

We’re buying on credit. Nobody needs America. Right.

If you can produce it, you can consume it or you can trade it with somebody else. You don’t have to trade it to America. And that’s what’s coming in.

And you can see that now in in the markets. Right. Look what happened to the dollar.

So the dollar had one of its worst weeks. Dollar index down three point three percent. It’s now down eight percent on the year.

But look at the euro. The euro rose above one hundred and fourteen intraday. It didn’t close above one hundred and fourteen, but it was pretty close.

One hundred and thirteen and a half. One thirteen and a half. You know, it was down at one or two couple of months ago and before Liberation Day.

I think it was one oh six. Something like that. One oh eight maybe on the euro.

But huge move. The dollar yen is down to one forty three. It was above one fifty.

The Swiss franc. I’ve never seen the dollar lose so much value against the Swiss franc. There was one day where the dollar dropped four percent against the Swiss franc.

So the dollar is crashing against the Swiss franc. And so those countries saw their purchasing power go up because their currencies went up. So now everything they need to import is going to be cheaper for them because they’ve got a higher currency.

Remember that Trump’s economic advisers were claiming that the terrorists would make the dollar go up. And that would be one of the ways that foreigners would eat the terrorists, because they would have to have a lower currency. Well, the opposite happened.

The dollar went down. So now not only do American consumers have to pay the terrorists, but they have to pay more dollars to buy the foreign products because the dollar went down. So you have that.

I mean, the euro is up like five percent since we announced 10 percent terrorists. Forget about the reciprocal that are gone. Well, it’s not 10 percent now.

It’s 15 percent, 10 percent for the tariffs and five percent for the effects loss. Right. But.

Here is what I think is happening. Oh, and by the way, backtracking. Not only do we do we rely on the world for all the goods that we don’t produce, but we rely on the world to finance our debt.

And we’ve never needed the world more than we need them right now because we’ve never had more debt to finance. You know, the Democrats or the Republicans in Congress just passed the big ugly bill that Donald Trump is begging for. The Senate went through the Senate that has a five trillion dollar increase in the national debt.

And that includes more spending and larger deficits than Biden. Despite Doge. The deficit that the Republicans just crammed through without a single Democratic vote is more deficit spending than Biden.

Now, not that Harris wouldn’t have had something as bad or worse, but the point is that we’ve done nothing to change the fiscal direction of the country, which is another thing that I said. I know all this talk. Oh, we’re going to have all this cutting.

The Republicans are going to cut. No, I knew they weren’t going to cut because I’ve seen that movie a dozen times and I know how it ends. So we have these record budget deficits.

And so we got to finance them. And as I mentioned on an earlier podcast, we’ve got about 26 trillion of the 36 trillion national debt that matures over the next four years. So we need lenders.

We can’t find them in America because Americans are broke. They’re loaded up with debt. So we got to get the world to loan us money.

But we just told the world, you know, we don’t need you anymore. We’re liberated. Screw you.

You’ve been screwing us over, you know, buying our bonds, lending us money, supplying us with stuff. We’re going to tariff the hell out of you. Right.

So. OK, so you just bit the hand that fed you, fed you everything, supplied you with goods and then loaned you the money to buy it. And so foreigners are like, OK, well, if we’re not going to trade with the United States, because remember, if we’re not going to be able to sell all these goods to America, well, then we don’t need all your treasuries.

You know, and why are we even doing this? Why are we buying treasuries? Why are we propping up the dollar if you’re not even going to buy our merchandise anymore? And of course, Trump was threatening to stop protecting them. Hey, you know, they leak that information on that chat from WhatsApp about how they hate to defend Europe. And oh, here we have to bail out Europe again.

Yeah. Europe’s listening and Germany is like, OK, we’re going to have to have our own defense. Well, now we got to pay for it.

Well, we can’t pay for our defense and lend you money for your defense. You know, and a lot of people are worried that now, oh, maybe China is going to sell treasuries. Duh.

Why wouldn’t they? And it’s not like they just own treasuries. They own all sorts of U.S. dollar denominated debt. I think personally that China is probably going to work with the European Union because there’s 400 and like 50 million or 450 million Europeans in the eurozone EU.

There’s only three hundred forty million Americans. So there’s a bigger consumer market in Europe than there is in the United States. And European consumers just got a lot richer because the euro went up.

And, you know, we have such high tariffs on China that China can’t sell any stuff to us. All right. Well, now they can sell more stuff to Europe.

Right. Because now the Europeans have a stronger currency to buy the Chinese goods that are now on sale. But also China is not going to export to America anymore either.

Right. I mean, because they’re not importing from America, rather, because they put they have one hundred twenty five percent tariff on us and we have one hundred forty five percent tariff on them. But China said, look, we’re not going to keep going tit for tat.

If you go up to 170, you know, we’re not going to you know, it’s pointless. It’s a joke. It’s already high enough.

Right. So Trump doesn’t have to see and raise. But I talked about that, that it was going to happen when they first put it on, that they were going to get into a poker game of who could be more macho and raise and raise the tariff the highest.

But now that China isn’t going to be importing from the United States, it’s going to import from someplace else. So let’s say instead of buying soybeans from America, China buys its soybeans from Brazil. Well, what does that mean? That means that Brazil now has more yuan or they’ve earned more money exporting soybeans.

Now the Brazilians have more money to buy Chinese products. Right. So now they can sell more Chinese products to Brazil because now Brazil is selling more soybeans to them.

Right. So all the people who start trading with China to replace the business that we did with China now become better customers for Chinese products. So, again, Trump has got the relationship backwards.

The customer is not in the driver’s seat. It’s the producer because you can’t consume what hasn’t been produced. Anybody can consume what’s already been produced.

And, of course, the biggest consumers yet to be unleashed are the Chinese themselves. The Chinese yuan is still near its lows. It didn’t have a big rally like the euro or the yen or the Swiss franc.

And I know, too, there are a lot of people that want, you know, Japan and Europe to join with America and impose 145 percent tariffs on China. Why the hell would they do that? I mean, just because we’re dumb, they’re not going to be dumber. I mean, China supplies the Japanese and the Europeans with a lot of stuff that they want and that make their lives better.

Why the hell do they want to make it 145 percent more expensive, especially when it just got cheaper? They’re winning our trade war, right? They’re going to get to buy the Chinese goods that we can no longer afford. Win for Europe. Win for Japan.

They’re going to get China to buy their bonds. So the Chinese government, instead of buying treasuries, is going to buy German bonds. They win.

We lose. Right now, it makes it easier for Germany to finance its defense buildup because it’s got China to loan on the money. So now instead of China propping up the U.S. market by helping us with low cost goods and lower interest rates, well, they’ll start screwing over the Europeans.

Oh, poor Europeans. Now they’re going to have to suffer low prices and low interest rates. Right.

But America, see, we’re liberated from all that. We don’t have to suffer these low prices and low interest rates anymore. We get high prices and high interest rates because we are liberated.

Look, you know, think about the absurdity, you know, of of the arrogance of thinking that there’s something so special about Americans that the whole world has to kiss our asses. So we’ll buy their stuff. Right.

So, you know, so we’ll get to enjoy. You know, they’re talking about the iPhones now, because, I mean, if you like your iPhones, there’s not gonna be any more iPhones that you could afford unless Trump, you know, makes an exemption for for Apple. But the funny thing is.

Apple’s main competitor is Samsung, right? Apple’s an American company. Samsung is Korean, but they don’t make their phones in China. So, you know, it’s going to happen.

All the people that were buying iPhones are going to switch to the Samsung phones. So our tariffs destroyed our company. One of our greatest companies is destroyed by our own tariffs.

Right. And of course, also what ends up happening is a lot of Chinese goods get arbitrage. Right.

Because obviously we can’t go cold turkey on China or we’d have nothing to buy. Right. The shelves would be empty at Wal-Mart.

So what’s going to happen is some of the countries where there’s only a 10 percent tariff. Well, they’ll buy the goods from China and repackage them and sell them to us. But of course, now you got, you know, more marketing, I mean, more more markups involved, more transportation.

So the costs are still going to go up. Right. But, you know, China is not going to get hurt.

You know, this is all nonsense. You don’t injure your adversary with tariffs. You injure yourself.

And that is obvious in the markets. We impose these tariffs and the dollar collapse bonds collapse. Now, the bond crash is going to continue.

I mean, this rally in the market was ridiculous. Right. Because, yes, it wasn’t as bad as it could have been.

But it’s still a lot worse than the markets realize, because we could have a financial crisis next week or the start of it. And this is going to be worse than the global financial crisis for America. It’s not going to be a global crisis.

It’s going to be an American crisis. I actually think the world is going to be liberated. That’s why I think, you know, oil prices came down because people were kind of thinking about a global recession.

It’s not going to be global. The world is going to be relieved of the burden of supporting the U.S. economy. They’re not going to have to send us all their goods.

They’re not going to have to send us all their capital. They’re going to keep their goods and they’re going to keep their capital. So they’re going to consume more themselves and they’re going to invest more locally rather than lending it to us.

They’ll invest it in themselves. So I think this is a huge win for the rest of the world. We finally got them to do what they should have done on their own.

Right. Trump did that. He set all of this in motion.

But because of that partial surrender. Right. And I think the whole world knows.

I mean, I think that this spin isn’t fooling anybody. I mean, yes, all of the hardcore MAGA guys, to them, Trump could do no wrong. And they’re like, yeah, he did it.

What a brilliant negotiator. This is exactly what he planned. He’s got it right where they want.

Right. It doesn’t matter. I mean, see, this is the thing about Trump.

You either love him or you hate him. Right. So Trump derangement syndrome works both ways.

So the people who hate Trump, he could do no wrong. He can do no right. He’s he’s, you know, the devil personified.

He’s the reincarnation of Adolf Hitler. Right. And then the MAGA.

Oh, he he’s Moses. Right. He’s a prophet.

He can do no wrong. He’s God on Earth. Right.

So obviously both sides are completely wrong. And that’s why, like, you don’t even get the truth. You watch Fox News.

You get regurgitated MAGA propaganda. You watch all the other stations and it’s Democratic propaganda. Right.

The only place you get the truth is from me. And maybe, you know, I’m obviously not the only one. But, you know, in the mainstream, you’re never going to get it because they’re too biased in their perspective.

But I know around the world they know that this is not a win for Trump. He capitulated. He realized he made a mistake.

He just didn’t want to admit that it was a mistake. And so he tried to concoct a phony victory and he may do it again. You know, he may try to come up with another win.

Maybe he can get some foreign countries to agree to remove some inconsequential tariff that never amounted to anything. And then he can drop the 10 percent tariffs and say, I win again. Fantastic.

Right. You know, look what I’ve accomplished. But the markets rallied, a relief rally on this concocted win by Trump.

And so we got the Dow was up about five percent on the week, but it’s still down five and a half percent year to date. More from the high, but five and a half percent on the year. The S&P 500 was up five point seven percent, just approximately on the week.

But it’s still down almost nine percent on the year. NASDAQ popped over seven percent on the week, but it’s down almost 13 percent year to date still. And it’s in a bear market because it was down way more than 20 percent from its high.

Russell 2000 was the weakest index. It only rallied one point eight percent, couldn’t even come up with a two percent rally. And it’s still down almost 17 percent year to date.

Right. At its lows, it was down better than 30 percent. And that is the index that is most sensitive to the U.S. economy.

And that’s why it’s the weakest, because the tariffs hurt the U.S. economy the most. And that’s why the Russell 2000 is down the most. You know, Russell 2000 had about the same gain on the week as Bitcoin, like Bitcoin managed to eke out a two percent gain on the week.

Oh, big deal. Right. This was supposed to be Bitcoin’s time to shine.

Right. Yet it got outshined by the barbaric relic that is supposedly replaced. Right.

Gold did great. Digital fools gold. Not so great.

Right. Barely went up. Bitcoin still at eighty three thousand, something like that.

Nowhere near its high. Gold had one of its best weeks ever. I haven’t checked the almanacs, you know, to figure out how long.

But gold was up about six and a half percent on the week. We closed the week above three thousand two hundred and thirty. In fact, the final three days of the week, gold was up two hundred and fifty dollars, more than two hundred and fifty, about one hundred dollars on Wednesday, one hundred dollars on Thursday and sixty dollars today.

It was one hundred ninety sixty, something like that. What a week. Gold is up twenty three percent so far in twenty twenty five.

This has got to be the best start to a year that gold has ever had. Now, when gold is doing that, this is not a good sign. Right.

Gold doesn’t go up like this when times are great. And again, I pointed out on this podcast when Alan Greenspan was Fed chair. He said gold was his most important indicator for monetary policy.

He said, we’re not on a gold standard officially, but unofficially we are. This is what he said to Congress. And he said that I watched the price of gold and if it gets up near four hundred, I know I’m too loose.

If it goes down to three hundred, I know I’m too tight. So gold was the market signal that Alan Greenspan used to adjust monetary policy. Well, Powell doesn’t look at that at all.

Gold is at thirty two hundred. What is that doing? That is screaming. You are too loose.

You are way too loose. Yet they’re talking about cutting. Even though gold is going through the roof, which is screaming monetary policy is too easy.

You need to tighten up. You need to hike rates. All the conversation is, is how soon are they going to cut and how many cuts are we going to get? Right.

The exact wrong thing. So gold is going way, way up. This is not the top.

You know, I think a couple of days ago, Kramer said at CNBC, gold’s too high. You got to sell it, which was when I heard that. I’m like, perfect.

Right. Because, you know, but of course, once it jumps back up, he forgets that he said that. Now he likes it again.

So he’s kind of worthless. But I keep getting these calls. Well, I don’t know why my phone’s ringing all the time here.

But what was I? Yeah. So gold’s going way up and the Fed is like talking about cutting. So gold’s going to keep going up.

But as I’ve been saying, don’t buy it. If you’ve got money to buy gold, just buy gold mining stocks. And, you know, if you know me and I’ve been, you know, promoting gold, recommending gold for 20 years, I started recommending gold when it was under three hundred dollars an ounce.

So it’s now 11x where I started. And there’s never been a point, even though I’ve always said buy gold stocks, too. Right.

I’ve always known that they’re riskier. Right. So you take a risk when you buy gold stocks.

And so, you know, I was telling people buy gold, you know, but buy gold stocks, too, with your risk money. But make sure you buy physical gold, you know, too. But now I am now so convinced that the risk is so minimal in these mining stocks relative to enormous upside.

See, if you’ve been sitting on the sidelines for the last 20 years and not buying any gold. There’s no point now buying it at thirty two hundred. Buy the gold stocks because it’s like you’re buying gold at fifteen hundred.

Because that’s about what they’re priced for. Gold stocks have not accepted gold. The earnings that these companies are going to report in Q2, Q1 is going to be great.

But Q2 that just started in April is going to be phenomenal because not only did gold go straight up, oil went straight down. I think the earnings are going to blow out. I mean, these stocks are trading at single digit multiples.

You know, finally today, a couple of gold, one or two companies upgraded Newmont or Barrick Gold to buys. So this is just the beginning of this move. Now, the GDX, which is a gold stock index, was up 19 percent this week.

So triple the rise in gold. That’s what’s supposed to happen. But gold stocks have a lot of catching up to do.

Now, year to date, the GDX is up 47 percent. That’s only about double the rise of gold. But the problem is gold went way up last year by 50 percent and gold stocks didn’t even keep pace.

So gold stocks are nowhere near record highs. Yes, they all hit 52 week highs today. The indexes and it’s a great week.

It’s great year, but we’re just getting started. I think these stocks could still double again or more between now and the end of the year. Maybe triple.

Now, what do I think the realistic upside potential for gold is this year? Well, I think 4000 is a very reasonable target. I mean, especially if we can move $250 in three days and we haven’t even had the real crisis yet. We haven’t even had the bond market crack, which I think is coming.

And, you know, the bond market cracks. Remember, we’re going to have a financial crisis. I said it’s going to be isolated here.

But if our interest rates spike and our import costs go up, it’s going to be a wave of bankruptcies. All these retailers are going to go bankrupt because nobody can afford to buy their products. They can’t borrow the money and the prices are too high anyway.

And so they default on their on their loans. Now the banks are stuck. The banks are going to be all underwater because they own all these long term loans and bonds that have collapsed in value.

Remember, the Fed never stress test a single bank for stagflation. They never stress tested an environment where there’s a recession when interest rates go up because they thought that was impossible. And they also probably knew that no bank could fail, could survive.

So why bother to scare the world by testing for it? So we are on the precipice of the worst financial crisis that we’ve seen. And there’s not going to be any bailouts because when the financial crisis was about the the mortgage market. The government could bail out the mortgage market because the government was able to buy up all the toxic assets and replace it with its own credit.

So people wanted treasuries. But if the treasuries are the epicenter of the crisis, it’s a sovereign debt crisis. Who’s going to bail out the United States? Right.

The only ones that could have were like China and Japan. But, you know, we’ve alienated them. So they’re not going to come to our rescue.

All you got is the Fed. But when the Fed bails us out, it’s massive inflation. Right.

You know, they have to crank up the printing presses. And so right now, I think there’s just so much upside in these gold mining stocks that could happen so quickly because nobody is in them. The public doesn’t own any gold yet.

You know, it’s they haven’t even started. I mean, maybe maybe they bought a little. I don’t remember all of Q1, all of Q1, except for one day.

There were net outflows, net outflows out of GDX. So the public’s been selling GDX all year, yet it’s up almost 50 percent on a year. I mean, what a contrarian indicator.

So there’s nobody to take profits because everybody’s gone. I mean, yes, somebody owns these stocks, but the people that own them, they ain’t selling. I mean, I own these gold stocks.

I actually bought more. I added to my positions a couple of days ago because gold stocks initially went down just like COVID. Right.

Remember when COVID hit and gold stocks got clobbered? I was like, this is stupid. We’re going to print all this money. That’s good for gold stocks.

And they immediately turned around. That was the same feeling I had. I said it on this podcast last week.

They sold they threw out the baby with the bathwater. Everything that was happening is bullish for gold, not bearish. But I mean, we have so much to go as everybody starts moving in to this trade.

But what I’ve been talking about for years and years and years is the end of America’s ride on the global gravy train. Right. We’re going to stop the trade deficits, but that stops the phony prosperity that those trade deficits enable.

No more low prices, no more low interest rates. And so the whole bubble economy that was built on that foundation is going to come crashing down. And the world is going to be withdrawing their capital.

And so all the returns are going to be abroad. So it’s going to be the foreign stock markets and then the emerging stock markets. For the last 10, 20 years, the U.S. was the only game in town.

That game is over. Now, most people don’t realize the game is over and they’re still trying to play it. They’re going to lose.

Right. What you got to do is recognize everything that I’ve been saying. It’s all right, even though some of it is took longer than I thought.

It’s all been unleashed. It’s all happening. And it’s still early.

Even though the U.S. stock market is off its highs, it’s still so high compared to where it should be and where it’s going. And it’s still so high compared to where foreign markets are right now. And even though the dollar just tanked, the dollar index is just barely below 100.

I think it’ll be below 90 before the end of this year and maybe below 70 before the end of next year, which is a record low. And maybe it goes all the way down to 50 or lower. But this is the beginning of the unraveling of Pax Americana.

This is the end of the exorbitant privilege of the U.S. dollar as the reserve. What’s going to replace the dollar? Gold. Gold is going to be the reserve for all currencies because currencies need to be backed by real money.

They can’t be backed by another currency. Now, the only reason that we were able to con the world into accepting the dollar was because it was backed by gold. We told the world in Bretton Woods, why hold gold? You get no interest.

Hold dollars. You can buy our treasuries. You can get interest, but you can get your gold whenever you want.

Right. So it was a great deal. We made an offer they couldn’t refuse.

Right. You have your cake and eat it, too. Well, once we got them eating our cake, we screwed them over.

Right. Because we defaulted. Right.

So they never got their gold. Right. We defaulted on our commitment.

But we went on this fiat system. But that’s where we’re going. And I’ve been saying the reason central banks have been buying gold is to replace the dollar.

Now, I do think that China is also going to buy euros and maybe yen because those countries are having some problems. And they could use China’s help, you know, because they’re not going to be helping us anymore. Even though, you know, we you know, we abuse that.

We took advantage of that to hurt ourselves. But, you know, China does have a lot of capacity to produce. They do have a lot of savings.

And so they can make that available to Europe. They can make that available to China. I mean, to Japan and do more trade there.

So they’re probably going to buy some JGBs and some bonds and some other European sovereign credit as they’re liquidating their dollars. But the primary reserve asset all around the world. Right.

Is going to be gold. Right. I don’t think the rest of the central banks would be buying European debt.

Certainly the European central banks aren’t going to be buying it. So they’re going to be they’re going to be in gold. Right.

And so these gold mining companies have huge customers. Central banks are going to be great customers because they’re going to be price takers. Whatever the price is, they’ll buy it because they need it.

They have so many dollars they have to divest themselves of. But so far they haven’t had competition because investors haven’t been buying gold and they haven’t been buying gold stocks. They’re going to start.

Not sure when, but they will higher prices. So for now, these gold stocks are just so ridiculously cheap that instead of buying more gold by these gold stocks, you’re buying gold. It’s just still in the ground.

But you’re going to make a fortune mining it. And even if you’ve never bought any gold, don’t start now by gold mining stocks, because that’s the best way to buy that gold. In fact, I’ve got a special report out now.

Go to my Web site at Europeat.com. I you know, it’s the best way to buy gold, which is buying gold in the ground and buy these stocks. Now, it’s not going to be that way forever because I think we’re going to get a huge move up in these stocks. And at that point, it’ll be time to buy physical gold again.

And especially with your profits, because at some point we’ll book some profits in these gold stocks and we’ll put those profits into physical gold. Right. That takes some risk off the table.

We don’t want to put the profits back into fiat. But for now, you really got to be buying my gold fund. E.P.G.I.X. is the Europe Pacific Gold Fund, which I highly recommend.

You could buy that no load at at any discount brokerage firm. We have separately managed gold SMEs. Any money you’d put in physical gold right now, that’s what you’re doing because you still own the gold because you’re a shareholder in a gold mine and they got nothing but gold.

Right. So these gold mines are literally gold mines. And, you know, yeah, there’s risk, but it’s worth it.

Right. If you can’t afford to take any risk at all, well, I guess you can’t buy it. But if you’re willing to take some risk, right, the risk, I think, is minimal given how cheap these things are and how high their earnings are going to be.

And I think you’ve got some tremendous upside. And, you know, a point that I wanted to make and I got sidetracked again is getting back on the concept of America having some kind of comparative advantage in shopping, like that Americans are so important to the global economy because we buy everything. Right.

And that’s our that’s our our role. And I use an example going way back. This shows you how long ago I talked about this in my first book in Crash Proof.

I had an analogy. It was five Asians and an American are stranded on an island. Right.

And my analogy was so they get shipwrecked on this island. And even I maybe even Jeff Gundlach used this analogy, too, after I came up with I forget, you know, but it was it was five Asians and an American get get stranded on an island. And so they decide they’re going to divvy up the workload.

And so one of the Asians, you know, he’s in charge of scouring the island for vegetation that they could eat. Another one is going to hunt, see if there’s any, you know, any game that we could eat. Another guy is going to fish, right.

Try to get, you know, some seafood. Another guy is gathering all the firewood and building the fire. And then one of the other Asians is going to be the chef, actually take all the food and everything and cook it up.

And then they get to the American. It’s like, well, what’s what’s the American going to do? And he gets assigned the job of eating. And so all day long, these Asians, these five Asians are real busy, they’re working hard and they’re they’re cooking and they’re hunting and they’re fishing and they’re gathering.

And the American, you know, he’s just lying on the beach, you know, working on his tan, relaxing. And then at the end of the day. They all prepare this gigantic meal.

For the American to eat. And so the American, you know, he sits down and he starts eating. But, you know, he doesn’t want these five Asians to starve to death because, you know, he wants to eat again tomorrow.

So he gives each Asian a little bit of his food. Just enough. You know, he’s, you know, full belly and he’s really chowing down.

But he gives the Asians just enough so they don’t die of starvation so they can go back to work the following day. Right. So and I said, this is the global economy like this is America and China.

And I said, so what would the best thing to do? You know, what should the Asians do to improve their life? Kick the fat American off the island. Right now, because an economist like I would say, hey, you know, the American is the key to the whole economy. Right.

Because without the American, all these Asians would be unemployed. They’d have nothing to do. Well, don’t they have bellies? Can’t they eat now? You know, if they don’t want to eat as much, well, they can relax.

They don’t have to work as hard if they don’t have to feed this American. So they improve their lives by getting rid of the American. The American is not what’s making them work.

It’s their work that’s sustaining the American. They have it backwards, you know, and I would always think, you know, about somebody in China. Right.

Working in a factory. And this is how these economists, although they probably never like they have these asinine, you know, theories, but they never break it down. Like I always break stuff down to its simplest form so you can really understand it.

But picture a guy in China on a production line. And let’s say he’s making dishwashers, but he doesn’t have a dishwasher himself. He can’t afford one.

But he works in a factory making dishwashers and they ship them to America. Right. And we get the dishwasher.

And you think the guy is sitting there thinking, what the hell do Americans need these contraptions for? I mean, they need a machine to wash their dishes. Don’t they have a sink? I mean, can’t they just wash their dishes? They don’t have a towel. You know, they don’t have you know, they can’t just wash their dishes.

Why do they have to put them into a contraption like this just to wash their dishes? I’m you know, I’m glad I don’t have one of those things cluttering up my kitchen. Right. Is that what they think that Chinese are thinking, that they’re glad they don’t have these things? No.

They’re like, God, I wish I could afford one of these, you know, but no, I can’t afford one because my wages are too low. So I’m just going to have to make do with with the sink. Now, what would happen if the dollar crashed and the Chinese currency went up? Wait, now the Chinese who make the dishwashers could buy the dishwasher.

Right. We’re outbidding them with a currency that they’ve propped up by buying up all our bonds and and warehousing our dollars. They can unleash all the demand they need.

You know, they keep saying, hey, China has a hard time stimulating demand. It’s easy. Dump the dollar.

That’ll stimulate all the demand they want. See, demand doesn’t really have to be stimulated. Everybody wants everything.

What stimulates demand is supply. And the Chinese have the supply. And by definition, if you have the supply, you got the demand.

It’s America that doesn’t really have the demand because we don’t have the supply and they have all the cards. Not us. Trump’s got the whole thing backwards.

But, you know, just like the 2008 financial crisis. All the people who didn’t see that coming didn’t see this coming. All the people who were surprised by what happened this week, even though what happened is exactly what I said would happen.

They’re surprised because they don’t understand it. I expected it because I do understand it and because I understand it. And I wasn’t surprised.

I know what comes next. I know how this movie is going to end and how this is going to play out. And if you want to win the trade war, you got to follow this investment script that I got.

Right. Which is get in front of this massive reallocation of global capital as it flees the United States and goes back to where it came from. Into foreign stocks, into foreign assets, commodities, because when the dollar tanks, demand for raw materials is going through the roof, especially in China.

So you want to own those things and demand for gold. So my portfolios, which are crushing it. Like if you look at even my dividend payers portfolio, I think it’s up about 15 percent year to date and the S&P is down, what, nine, 10 percent.

So when have you seen that? Right. That’s not gold stocks. I’ve got a few gold stocks in there, but it’s mostly non gold stocks.

And they’re up. Right. We’re up and we’re crushing our competitors.

But all the foreign markets are up this year, even with their tariffs being launched. It’s the U.S. market. So this is the beginning of a huge wave that it’s going to be years and years, I think, before it crests.

So if you’re not now a client of Europacific Asset Management, give us a call. You know, the website is Europac.com. There’s a phone number there. Call us.

There’s also a little form that you could fill out and write on that page. Is the special report the best way to buy gold? I mean, if you don’t want to take my word for it, just read the research report. It’s not that complicated.

This is a no brainer as far as I’m concerned. So start buying these gold stocks. Either you buy them on your own.

You buy my fund either way. You know, obviously, I prefer that, you know, you let us build you a diversified portfolio. I think we’ve got some incredible little junior companies, undiscovered hidden gems that could just go ballistic in our gold fund.

So, you know, rather than try to figure them out yourself, just trust that we’ve already figured it out for you and that we’ve got a great portfolio and just buy into it while while the prices are are still so cheap. And again, we’ve got great newsletters that are coming out at Shift Sovereign dot com, two or three a week. They’re free and they’re worth every penny.

In fact, they’re worth a lot more than that. We do have a premium service, too, but at a minimum, you want to sign up for the free letters. But again, I’ve been waiting for this for years.

I mean, not waiting so much as anticipating. Yet they kept kicking the can down the road. You know, we got close after 2008, but we found a way to kick that can down the road.

But now the problem is so big and we didn’t even wait for our creditors to cut us off. We cut ourselves off and we started a process that probably can’t be stopped. You know, once you roll this thing down the hill, it’s just going to keep on gathering more momentum and the snowball gets bigger and bigger and bigger.

And and so. I’ve been preparing for it, I’ve been warning about it, and now it’s here. And all you have to do is recognize that this is exactly what I’ve been predicting and make sure that you are properly positioned to profit from it and help.

Again, remember, one of the reasons that I want a lot of Americans to follow my investment advice is so they don’t go broke like everybody else. And so we’re in a position to help out in the aftermath. Right.

If a boat’s going to if a ship is sinking and you sink with it, what good are you? But if you get off the ship and get in a lifeboat and then the ship sinks, you can come around and help people out of water. Right. So that’s what I want.

I want to get as many people as I can into this lifeboat so we can help the people who go down with the ship. Anyway, bye for now. I’ll be back next week and happy Pesach everybody who celebrates Passover and Easter.

Well, we got another week for that one. But bye for now.