US Stocks and Dollar Tank. What’s Next? (Uncut) 03-08-2025

 US Stocks and Dollar Tank. What’s Next? – Ep 1015

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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. We had a very significant week this week in all the financial markets, and I’m going to talk about that. I think a lot of people in the financial media really are missing the significance of what happened, and they don’t really understand it. Sure, they’re reporting on some of the movements, but they don’t really get what it portends.

I may have even done this podcast without my beard, so it could have been an even more volatile week. My wife was telling me that she was kind of getting tired of the beard because I’ve had it for a while now and wanted me to shave it. I said, you know what? Let’s see what the people on X have to say.

I did a poll, and 15,500 people voted. It was a close shave there, but 53% voted for me to keep the beard, and only 47% voted to shave it. It was pretty close.

I haven’t shaved it yet, although she’s putting some pressure on me, so maybe I’ll end up doing it anyway. Maybe the next time I do the podcast, who knows? Maybe the old Peter will be back, and it may be just in time because the last time when we had a financial crisis, which was way back in 2008, I didn’t have a beard back then. What is coming is going to be even worse than that.

Maybe it would be a harbinger of that if I were to go back to the old Peter. Anyway, let me get into what happened on the week. Well, first of all, the stock market in the U.S. had its worst week in six months.

The Dow Jones was down 2.7% on the week, and it’s now barely up on the year. It’s up about 1% in calendar 2025. S&P 500 dropped 3.5%. That’s down 1.7% on the year.

The NASDAQ was down 4% on the week, 5.6% on the year. And the Russell 2000, the weakest of the major indexes, is down 4.5% on the week, 7% on the year. I think we’re close to 17% off the November-December peak, almost in a full-blown bear market in the Russell 2000.

I think the NASDAQ from its peak is off about 10%, so that meets the official definition of a correction. But look at some of the high flyers. NVIDIA was down 8% on the week.

It’s now down 18% year-to-date. Tesla dropped 12.5% on the week, and it’s now down 31% this year. Now, if you remember, about a month ago, I did a podcast, maybe five weeks ago, and the title was, The Consensus Trades Are About to Unravel.

This is what I was talking about, all the stocks that everybody was piling into, the Trump trade, the AI trade. I said all this is going to reverse. It had reached peak euphoria, and I thought the market had no place to go but down, and that’s, in fact, where it went.

Bitcoin on the week, the GBTC, or all these trusts, was down 6.4% on the week, and that’s despite this Bitcoin reserve, which I’m going to get to a little bit later in the podcast, but down 6.4% on the week, down 11% year-to-date. That’s the Bitcoin. MicroStrategy, for some reason, held up.

It was only down 2% on the week and 4.2% on the year, but it is down 47% from its November peak, November just last year, so it’s in a major bear market. So stocks got hammered on the week. Now, people are trying to say, well, what’s the reason? We’re getting some weak economic data.

We got some weak jobs data this week. I’ll get to that again a bit later in the podcast, but we’re getting weak data, and so I spoke on the last podcast, Atlanta Fed GDP is down to a negative, like 2.5% for the quarter, so people are starting to get worried. They’re also worried about tariffs and how they might impact the economy, so they think that that’s what’s weighing on stocks, but that’s not the most significant problem that’s underlying the market that I think is going to continue because bonds did not rally on the week.

The yield on the 10-year U.S. Treasury, despite this plunge in the stock market, which would ordinarily cause investors to buy treasuries, they sold treasuries. They just didn’t sell them that hard. The yield on the 10-year treasury rose about 0.15% to 4.32%, but you would have expected the yield to go down as people sold their stocks because it’s a weak economy, right, that’s getting people to question the earnings, and so they’re worried about the market, and they’re selling stocks.

Why aren’t they buying bonds? Because the problem is actually in the bond market, and that’s what’s worrying the stock market because the big news is the huge spike in yields in Germany and the rise in the euro and other currencies. The dollar had its weakest week since sometime in 2022. The dollar index was down 3.5% on the week.

It dropped from 107.6 to close at 103.8. Now, I have been calling for a weak dollar on my last several podcasts saying I thought the dollar had topped, that it was going down, and this was a decisive decline. The euro led the way with a 4.4% rise in one week. That is a huge move in the euro.

Japanese yen was also strong on the week. The yield on the 10-year bund is now up to 2.83%. That may not sound high, but in Germany, it’s high, and it’s going higher. And by the way, the yield on the 10-year Japanese government bond closed at a new 16-year or whatever high, 1.52%. You know, when yields get to 1.76%, which I think is coming in the next several months, if not sooner, yields in Japan will be the highest since 1997.

You’re talking about a 28-year high in interest rates in Japan. But rates on sovereign debt are going up in Europe, and they’re going up in Japan, and this is going to pull the rug out from under the U.S. Treasury market and risk assets in the United States. Now, what’s going on? Well, basically, Donald Trump told Europe and Germany, you guys are on your own for defense.

You’re not spending enough on defense. We don’t know that we want to defend you. Maybe we’re going to pull out of NATO, which I think NATO shouldn’t even exist.

But in response to this, Germany said, okay, well, we’re going to spend a lot of euros. I forget exactly how many, hundreds of billions, building up our defenses. And where are they going to get the money? They’re going to borrow it.

They’re not saying, well, we’re going to raise taxes to pay for this defense buildup. They’re just going to borrow a bunch of money. Now, I don’t think the ECB can just monetize all that with an asset purchase program when you still have above trend or above target inflation.

So Germany is going to have to tap into the global credit markets. And so treasuries are now going to have a lot of competition from bonds. Because now, if Germany has to convince the savers of the world to loan Germany money, well, it has to offer a higher rate.

And I think what’s going to happen is investors who were loaning money to the United States because they were getting a better yield in dollars than they were getting in bunds, now they’re going to say, well, the yield on these German government bonds is coming up. Maybe I’ll buy them and I’ll sell my treasuries. And I think the German government, which owns like 100 billion of treasuries, maybe the German government will say, you know what? Why are we borrowing money and then lending money to the U.S. government? Maybe one of the things we should do is sell some of our treasuries so we don’t have to borrow as much money to pay for our defense buildup.

This is going to put a lot of pressure on the global credit markets. You know, Germany was one of the few prudent countries out there. And now they’re basically borrowing.

Everybody can’t borrow, right? Somebody’s got to save. Somebody’s got to do the lending. So this is going to put a lot of pressure on treasuries.

And yields are just starting to go up. They’re still low. And not just in Germany, all over Europe and in Japan.

And so more and more money is going to be going to foreign sovereign debt. And it’s going to have to come out of U.S. sovereign debt because we’re the big borrowers. And so if people are going to lend more money to Germany, well, they got to lend less money to the United States, right? You know, it’s not rocket science, but also look at what’s going on with the dollar.

If the dollar really starts to fall against the euro, that’s another reason not to own U.S. government bonds. In fact, it’s a reason not to own U.S. stocks. A lot of Europeans have been buying U.S. stocks because U.S. stocks have been the only game in town.

U.S. stocks have been going up. Well, now they’re going down, but they’re not just going down in dollars. They’re going down in euros, right? So if the euro rose 4.4% this week, but the Russell 2000 dropped 7% on the week, that’s almost a 12% decline in the Russell 2000 in euros.

So you’re sitting there in Europe and you thought, well, I’m going to buy small cap U.S. stocks because Trump’s going to make American great again. So I want to make a big bet on the U.S. domestic economy. And in one week, you’re down 12% on what you thought was a diversified portfolio.

What are you going to do, right? I think a lot of foreign money that has been in the U.S. market when the dollar was strong and U.S. markets were going up, they’re pulling out. We’re finally getting decoupling because the U.S. markets were down, but all the other markets were up. I’m going to use as an example, my own funds.

So my Euro Pacific dividend payers fund, which is foreign dividend paying stocks, rose 3.6% on the week, on a week where the markets got clobbered. I haven’t seen this since I can remember where S&P is down 3.5% and my dividend fund is up 3.5%. That’s seven percentage points divergence in a single week. You know, that fund is now up 14% this year in a year where the S&P 500 is down almost 2%.

My dividend paying foreign stock fund is up 14% and we’re not even finished with the first quarter. This is a major decoupling of foreign stocks from U.S. stocks. And I’ve always said that if the U.S. stock market falls, but the dollar is also falling, that’s not bearish for foreign markets.

What hurts foreign markets is when our markets fall and the dollar rises. That puts a lot of pressure on foreign markets. But when the dollar is going down, that actually is a tailwind for foreign markets.

People are selling dollars and they’re wanting to invest outside the U.S. My value fund was up 2.4% on the week, now up 11.5% year to date. The biggest winner, the gold fund, which was up 2.5% on the week. It should have been up a lot more.

It’s ridiculous. Gold’s still closed. In fact, gold was up another 1% on the week, still closed above 2,900.

I mean, gold is looking like it’s getting ready for another big leg up. It’s just not factored in to these gold stocks yet. That’s why you should be buying on Monday morning.

I mean, all my funds I think are good buys, but the gold fund, I think in particular, is the one that I think is gonna deliver phenomenal returns for the rest of the year. And the fact that it’s only up 16% year to date, believe me, I think that’s a steal. So again, you can get information on all these funds on my website at europack.com. But I’m so bullish now.

I mean, for the first time really, as long as I’ve been a broker, I don’t even think people should be buying physical gold right now at 2,900 when gold stocks are this cheap. You know, it just makes no sense. So for now, we should be concentrating our firepower on buying below ground gold, not above ground gold, buying these mining stocks.

Once they make a huge move and catch up, then maybe we go back to buying physical. But right now, you know, it’s dirt cheap to buy the gold that’s still in the ground because everybody is asleep and they’re not paying attention to what’s happening and these miners are basically being given away. My emerging market fund, which is the laggard of my equity funds, was up 2.8% on the week.

So it had a strong showing. Emerging markets up, U.S. getting killed. Year-to-date, that fund is up 4.4. That of my equity funds, my non-gold fund, I think that fund has massive potential.

And I think we’re going to see ultimately that fund beating the other funds, the value and dividend, I think, in the back half of the year when people really start to appreciate the gravity of this dollar bear market that we’re just beginning. Of course, nobody realized it’s a bear market yet because we’re not down 20%, but I think we easily could be before the end of the year. And I think that’s going to really fuel the movement into emerging market stocks.

And finally, even my bond fund was up 2% on the week. And year-to-date, it’s up just under 4%, but it’s still beating U.S. equities. So we’re making more money just holding short-term foreign government bonds than people are making buying U.S. stocks.

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All right, so I forgot to mention silver also had a decent week, up 2.5%. So silver outshining gold, you know, back above $32, still below 33 though. But the metals going up, you know, who would have thunk it other than me? But so far in 2025, and certainly since the inauguration of Donald Trump, the Trump trade consists of selling U.S. stocks, selling tech stocks, selling Bitcoin, selling treasuries, and buying foreign stocks, dividend paying foreign stocks, buying the emerging markets, buying foreign currencies, buying gold, buying silver, buying gold stocks. It’s the opposite of what everybody expected.

And it’s exactly what I told my podcast audience to expect. I said, before the election happened, that if Trump won, it was going to be frustrating for a bit because I knew the markets were going to jump to the wrong conclusion about how he was going to make America great again, how it was going to be a boom. And so everybody would rush in to what they thought was going to be the Trump trade, U.S. small cap stocks, the tech stocks, you know, stocks that were closely aligned with Trump.

They were selling the dollar, sold their gold stocks. And I said, that was all wrong. And what we were going to have to do is wait for that to reverse.

Well, it actually happened even quicker than I thought. I only had to go through a few months of angry clients. You know, I got to sell these foreign stocks.

Trump’s going to, you know, Trump’s going to solve all the problems. We got to buy U.S. stocks. And I kept saying, no, don’t.

I’ve seen this movie before. I know how it ends. It’s all talk.

None of this is going to happen. Just stay the course. You know, you’re going to see a much weaker dollar during the Trump term, a much larger deficits, higher gold prices.

It is not going to play out anything like people are scripting it. And I think I’ve already been vindicated on that, but I’m not going to take a victory lap or say, I told you so just yet. I say, let’s watch and see how this plays out.

But so far, it’s doing exactly what I thought. And the mainstream is clueless. You know, they’re not talking about the implications of rising yields in Germany or Japan or how that’s going to impact the U.S. credit markets or U.S. markets for risk assets.

They don’t get it. They’re not looking at the enormity of these trade deficits. You know, we got a record trade deficit.

I mentioned on the last podcast, the merchandise trade deficit, the unified trade deficit in goods and services came out for January, minus 131.4 billion. The worst in history. There are some factors, maybe some tariff front running.

We did import a bunch of gold, but still it’s an enormous number. And it’s indicative of an economy that is completely screwed up. And the Trump administration and his top advisors still don’t understand the nature of this economy.

I’m going to get to that also in a bit. I want to first go over the jobs data that came out during the week. You know, it started off on Wednesday with the ADP jobs report.

That’s the private sector payroll number. And that was a huge miss. They were expecting 162,000 jobs and we got 77,000 jobs.

So a big decline from the previous month’s 186 and way below even the lowest estimate, which was 140,000. The highest estimate was 300,000. We were nowhere near that.

There were people thinking maybe we’re going to create 300,000 jobs and we only got 77,000. So this was a negative report on a Wednesday and the markets instead of rallying on that news went down because they’re worried about the implications on earnings from a slowing economy or a recession and also with the tariffs. And when, by the way, the tariffs that Trump slapped supposedly on Canada and Mexico, but again, the tariffs aren’t on Canada and Mexico.

They’re on Americans when they buy Canadian and Mexican goods. But then on Monday, he had a reprieve for the auto industry or a lot of exemptions where they don’t fully go into effect. The next big tariff enactment is going to be April 2nd.

The president said he didn’t want to do it on April Fool’s Day. Well, he’s an April fool anyway for imposing these things and thinking that the foreigners are going to pay them and not Americans. But all that tariff talk also, I think weighing on the markets.

But after we got the ADP, we got the challenger job cut numbers and the announcement for layoffs. And this is not government jobs because this is the corporate jobs, but maybe some jobs are related to the government. So I’m sure there’s something in there.

But it was 172,000 announced layoffs. That’s by far the most we’ve had since April of 2020. Now, what was going on in April of 2020? The COVID lockdowns.

So the last time there was this many layoffs announced in the challenger report, we were locking down the economy for COVID. In fact, Trump was president the last time we had this many job announced losses in a single month. It never came anywhere close to this, under the Biden presidency.

So we got two weak numbers. And so the bar was low coming into the non-farm report for this morning. The estimate was 160,000 jobs.

Now, I wouldn’t have been surprised if we got a negative print. Eventually we’re gonna get one. And I think there were some other people that thought maybe we’d get a negative number for the February jobs report.

Instead, we got 151,000. A miss, but not much. And in fact, it wasn’t nearly as big a miss as they expected.

So the official estimate was 160,000, but the whisper number was quite a bit lower. So we beat the whisper number. Now there was a downward revision to the prior month, which went from 143,000 to 125,000.

So February was actually better than January. Now, I don’t really believe this number. I think the 151,000 is gonna get revised below the January number when we get the March numbers, because all these numbers are notoriously inaccurate.

But the unemployment rate did inch up to 4.1% from four. And the labor force participation rate fell, fell to 62.4 from 62.6. That’s a pretty low number. The average work week actually ticked down from 34.2. No, actually it stayed the same.

They were expecting it to go up to 34.2, but it stayed at 34.1. And again, the jobs that we created were part-time jobs. There was a net loss of full-time jobs. So that trend of replacing good full-time jobs with crappy part-time jobs, that is continuing early in the Trump administration.

But overall, the report could have been a lot weaker. And I think if it was a lot weaker, we might have had a much bigger sell-off today. You know, intraday, the market was down, and the week could have been a lot lower.

Because I think at one point, the Dow was down 450, 500 points. There’s been volatility every day this week. But today, the Dow closed up 222.

But it could have easily been a very bad day had we got a weaker report on the jobs market. But also, the bond market, instead of rising, because the bond market initially, when the stock market was down, the bond market was up. But by the end of the day, bonds were down.

Yields rose again on the day to finish out the week higher than they began. So all of this, I think this adds up to more evidence of stagflation. We got the consumer credit report today after a huge number.

I mean, I don’t even get this number. So in February, it was initially reported at 40, or the December credit was $40.8 billion. And that was revised to $100 billion.

I mean, I got to check this out on the break. I mean, that’s got to be, it looks like it says minus $100 billion. I’m not even sure.

I got to look into that. I’m just looking at these numbers now, you know, live on the podcast. And I didn’t even notice that.

I was looking at the January number, which was supposed to be an increase of $5.5 billion. And instead it was an increase of $18.1 billion, which was a big jump over what was expected, but not nearly as much as the $40.8 billion from December. But now I got to look into this $100 billion number.

It doesn’t even make sense to me. So I’m going to go on this next commercial break. I’m going to check the news to see if I can figure out what actually was going on.

But, you know, what was really bothering me, I think the most this week, was the tariff talk and the Bitcoin talk. You know, that’s where the Trump administration is making its biggest mistakes. And I think Trump has surrounded himself with people that are giving him very bad advice with respect to both tariffs and crypto.

And, you know, I think that he may know on the crypto. I’m not really sure if he gets the tariffs. You know, he might actually believe what he’s saying about tariffs.

I don’t believe that he believes in Bitcoin at all. I think he is just doing what he thinks he needs to do to placate the donors that helped put him in office, some of his other conflicted cabinet members who have ties to the crypto industry and what they’re trying to do for their friends, and the fact that Trump’s family is now deeply involved in the crypto industry and making a ton of money manipulating and pumping and dumping these coins, that he kind of feels obligated to throw this meat to the market. But it’s very frustrating, you know, listening to it, knowing the truth, the fact that not many other Republicans are out there criticizing what the president is saying.

I mean, even though I know some of these guys personally, and I know they’re free traders, I know they understand tariffs. I know they believe that Trump is wrong, but they don’t want to call him out on it. They just feel they have to support Trump no matter what he does.

And you can’t do that. You can’t just be a yes man. It’s not, well, whatever my president says, I’m just going to go along with it.

No, I mean, you got to speak up. If you think he’s doing something wrong, then tell him, tell the country. Don’t just say, we can’t criticize Trump.

We have to show solidarity so that anything that he wants to do, we have to get behind it, even if we disagree with it. That’s not the type of country we’re supposed to be. And if I were president, that’s not the kind of president, I mean, I wouldn’t want a bunch of yes men to surround me and tell me exactly what I want to hear and be afraid to tell me, you know, Mr. President, I think you’re wrong.

And here’s why, here’s why you’re wrong. Let me explain something to you. I would much rather have people who think I’m wrong tell me why they think I’m wrong than to just keep their mouth shut and just pretend that they think I’m right, because otherwise I’ll think that, hey, all of my advisors, you know, they’re all agreeing with me, so I guess I’m right, right? How can you trust your advisors if they’re going to agree with you right or wrong? I mean, what’s the point of even having advisors if they’re just going to agree with everything you want to do? I mean, why waste money on them? Just do what you want and don’t listen to anybody else.

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But anyway, I wanted to talk now about the misunderstanding of tariffs and crypto. In particular, there’s a couple of people that are out there making the circuit, spreading all this nonsense. You’ve got Howard Ludnick, who is the Commerce Secretary, and Scott Bessett, who is the Treasury Secretary.

And so they’re out there selling the public on all this BS. And so I want to start with Howard Ludnick and what he’s been talking about tariffs. He’s like the tariff man and the guy that’s out there talking about tariffs.

And, you know, on the one hand, you know, he says that, oh, you know, it’s external revenue, right? Foreigners are going to pay the tariffs. This is great. He’s saying that America has been living.

I mean, he said the world has been living off of the American economy for too long. Now it’s time they start to pay. It’s time that we give our own people a break.

So let’s not tax tips. Let’s not tax overtime or Social Security. Let’s tax foreigners who have been getting a free ride on our coattails.

Let’s make them pay these tariffs. And he talks about the trillions of dollars that the US government is going to collect in tariffs from foreigners. Not one dime of that money is going to be paid by foreigners.

It’s the Americans who are going to pay the tariffs. Yes, Canada doesn’t like that there’s going to be tariffs because some Canadian companies will sell fewer products to America. Why? Because they’re going to cost more and Americans aren’t going to buy them.

And so those companies will lose some money. And so they have political connections to try to get those tariffs removed. But it’s not that harmful to the Canadian economy, not nearly as harmful to the US economy because we pick up the tab.

Those Canadian companies will still sell goods to America. They’re going to sell a little fewer goods because we won’t be able to afford them, but they’ll do something else. They’ll sell the goods someplace else or they’ll produce something different with their resources.

But the foreigners don’t pay tariffs. And when he goes out there and he talks about the good old days of the 19th century, he says, you know, he keeps saying this all over TV. America used to run on tariffs so we had a strong economy.

So if we want to have a strong economy, we need tariffs. His logic is so wrong. We ran on tariffs in the 19th century because we didn’t need an income tax because the government was tiny.

And it was because we had a tiny government. That’s why the economy boomed. The government was so small that we could pay with it, pay for it with some tariffs.

But now we have an enormous government. So we have to get rid of the big government, not reinstate the tariffs. The tariffs are not the way to make America great again.

It’s shrinking government. And just getting rid of waste, fraud and abuse is not nearly enough. We got to get rid of all the sacred cows that Trump refuses to court, right? He’s not touching any of the big things that really need to be cut.

That big, beautiful bill that he wants that’s through the house is big, but it’s not beautiful, it’s ugly because it increases the deficits. The deficits get bigger, not smaller with that big bill. And so that we need less government, not more taxes to make America great.

But just to prove the point so easily, why these tariffs are not going to be paid by our trading partners. So the whole purpose of a protective tariff, and that’s what they call it, is protectionism. Why do businesses lobby for tariffs, right? The consumers never want tariffs, right? But there’s always a business that wants protection from foreign competition.

And the way you do that is with tariffs, right? Now, the company that benefits from the tariff, they’re in America, right? The companies that are hurt by the tariffs are not in America because their sales go down and the U.S. company’s sales go up. But why does it work? Why do tariffs protect a domestic industry? Because tariffs increase the price of the goods that are being imported. And because foreign goods become more expensive, Americans now buy domestic goods instead.

But without the tariffs, they were buying foreign goods because they were cheaper. Now, that proves that the tariffs increase the cost of the imports because if tariffs didn’t have an effect on prices, they wouldn’t protect the American industry. If the problem is these foreign products are coming in and they’re too cheap and we put a 25% tariff and the prices don’t go up at all and the foreign producers just decide to lose the money so they don’t have to raise prices, then nothing has been accomplished, right? Americans keep buying the foreign products and nobody buys the domestic products.

Yes, the government gets to raise the revenue, right? Because we still pay the tariff, but the exporter cut prices and lost his profit margin. But that’s not what happens. Prices go up.

That’s why tariffs work. I mean, they work to protect an industry that wants protection because they raise prices. Now, the reality is the 25% tariffs are probably not even high enough to move the needle, meaning that even if foreign goods become 25% more expensive, they’re still cheaper than what we can produce ourselves.

So Americans are going to pay those higher prices and it’s not going to help the domestic industry. Now, some Americans won’t pay the higher prices because they won’t pay any price because they’ll decide not to buy. And that’s what the foreign companies are worried about, that Americans won’t be able to afford the higher prices that they’re going to be charging because of the tariffs.

But the other problem that nobody is talking about, let’s assume that Donald Trump puts a tariff on imports that is high enough to actually result in US production being cheaper, right? The tariff is now so high, I’m not going to buy the Canadian product. I’m going to buy the European or the Chinese product. I’m going to buy an American product, right? But without the tariffs, I would buy the import, right? Let’s assume that happens.

Well, where are we going to get the productive capacity? We don’t have it. So in order for a US company to take advantage of these tariffs, we have to build a factory. And even if we build a factory, can we supply it? Do we have the supply chains? Maybe that has to be built up and all the infrastructure.

And what about the workers? We got to hire people. We got to train them, right? So it’s going to be a major capital investment in order to be prepared to take advantage of these tariffs. And so between now and then, Americans are just stuck paying the higher prices until we could bring this capacity on stream to produce at a lower price than the imports plus the tariffs.

But where’s that money going to come from, right? What are we going to stop funding to fund that? There’s only a limited pool of capital. So if we are going to put capital into building these factories, what are we going to take it away from? So what industries, what companies are going to lose capital so that we can re-divert it to building these factories that we didn’t need before because we were importing that stuff, but now we want to produce it ourselves because the imports are so expensive. So there’s a major investment where we’re going to suck capital out of other parts of the economy, which are going to cause big problems in those parts of the economy, layoffs or company shutdowns, whatever.

But here’s the other problem. Who is going to make a significant capital investment that could take years and years to complete based solely on the fact that we can now sell the products because there’s a tariff that keeps out foreign competition because the tariffs are not permanent. I mean, hell, Trump tariffs and un-tariffs over the weekend.

So if we can’t even trust that a tariff is going to be there over a weekend, how is a business going to trust that the hundreds of millions of dollars that I am investing, by the time I’m finished and ready to sell products three or four years from now, that those tariffs are still going to be there. If they’re not there, I’ve wasted all my money. So we’re not going to take the risk.

So it’s not going to work. We’re not going to bring industry back to America with tariffs. The only thing that’s going to bring industry back to America is higher savings, higher interest rates, lower taxes, lower regulation.

We have to excise the cancer from the American economy. We can’t just put a Band-Aid on a blemish, a skin cancer, and just assume that we’ve cured the disease. We haven’t.

The tariffs are attacking the symptom. The trade deficits are a symptom of the fact that the U.S. is uncompetitive. We’re not going to restore our competitiveness by imposing tariffs.

All we’re going to do is raise the price of imported goods. And Howard Ludnick has got it all wrong. And Trump talking about external revenue.

There is no external revenue. It’s all coming from Americans. And that’s one of the reasons, of course, we’re going to see this recession, because Americans are going to be paying much higher taxes through tariffs.

Everything that Americans want to buy, which is already expensive from inflation, a lot of that stuff is going to get more expensive, especially food, because some of our biggest imports are food. And at the same time, Trump is trying to get foreign countries to buy more of our food, to put more upward pressure on food prices. Remember, at his State of the Union address, he talked about how the farmers are going to love it.

The farmers are going to be making a bunch of money. Well, why will the farmers make a bunch of money? Because their crops are going to be selling for much higher prices. Well, you know, what about the 99% of us who aren’t farmers, who just eat what they farm, right? Are we going to be happy because they’re rolling in dough, because they’re getting so much money for the food that they’re producing, right? So one of the reasons that Trump is president is because food prices were high.

Well, they’re going to be a lot higher. And now with the dollar going down, remember, a lot of people were saying that one of the reasons that we won’t have to pay the tariffs is they said the tariffs were going to make the dollar go up and the stronger dollar was going to defray some of the tariffs. And I said, no, tariffs wouldn’t make the dollar go up.

And they’re not. In fact, we got some tariffs and the dollar is getting killed. So now not only do we have tariffs that are going to make goods more expensive, but a weak dollar is going to make goods more expensive.

So the inflation that voters elected Trump to get rid of is going to be even worse. And the economy that was weak is going to get weaker. That’s why I think in 2026, in the midterms, the Democrats are going to have the House back, maybe the Senate too, because Trump is not going to deliver on his promise of a golden age in America.

The only thing golden about this age is going to be gold itself. It’s a golden age in gold. The gold price is going to go a lot higher.

The gold stocks are going to go a lot higher. Which brings me to fool’s gold because I really got to talk about the most frustrating thing, even more so than tariffs, which frustrates the hell out of me, because I don’t like it when people don’t understand economics, especially on the Republican side. I mean, I get it that the Democrats don’t understand it because they’re socialists.

So why should they understand it? But the people who purport to be free market capitalists, you know, Adam Smith and stuff like that, they ought to understand Econ 101 about tariffs. Again, the reason that we have an income tax is because the politicians said we can get rid of the tariffs. That’s what the politicians told the middle class.

You guys pay tariffs. Let’s have an income tax on the rich, and then we can get rid of the tariffs on you. And they said, yeah, great deal.

Back in the 19th century, when people paid tariffs, they knew who paid them. Nobody was under the delusion that the British or the French were paying our tariffs. Everybody knew that the middle class and the poor in America paid the tariffs.

That’s why they said, let’s have an income tax. They knew the rich didn’t pay the tariffs. I mean, they paid them, but it was tiny because they were rich.

What do they care if goods are more expensive? They got plenty of money. It’s the middle class that is impacted by the higher cost of goods. And it’s the middle class today that is going to be most impacted by the tariffs.

So the waiters and waitresses whose tips are going to be tax-free, they’re going to be hurt by these tariffs. The people on Social Security whose Social Security benefits are tax-free, they’re the ones that are going to get hit by these tariffs. And the workers who are working overtime, they’re the ones that are going to feel the sting of these tariffs.

But for some reason, Trump and Ludwig, they don’t understand that. Now, either they don’t understand that or they’re just lying about it. I don’t know.

But now, getting to crypto, and when I did my last podcast on Sunday night, it was the day of the Truth Social post where somebody, not Donald Trump, I don’t believe Donald Trump authored that post. Again, I said, I don’t think he knows that the three-letter symbol for Cardano is ADA, right? Trump did not write that post. It was written by somebody who already loaded up on ADA and XRP and SOL and knew that this post was coming out.

And after it came out, in a thin Sunday afternoon when everybody’s asleep in Asia and the markets are closed, I believe that insiders made hundreds of millions of dollars pumping up crypto because as I suspected, by the following day, Monday, all those gains, remember, Solano, Ripple were up 30% or more. They lost those entire gains on Monday and they were actually lower than where they started. So how is it possible that these things went way up and then came crashing down the very next day? It was a rug pull.

It was the insiders who had advanced notice of the Truth Social post who loaded up on those very three tokens that were specifically mentioned in the post. And then as soon as the post pushed up the price, they sold what they had already bought into that hype and it crashed the market. Now again, if this was done with securities, it’d be illegal, right? You can’t manipulate stocks.

You can’t trade on insider information, but apparently it’s the Wild West when it comes to tokens. But what bothers me is that the White House is being used for this, that people are taking advantage of their ties to Trump to make a fortune in shit coins or whatever you wanna call these things, but also in Bitcoin. Now, what happened with Bitcoin is they initially, the initial post, didn’t even mention Bitcoin, which got a lot of hot water on Trump.

So he followed it up with another post that I don’t think he wrote, in which he said, I love Bitcoin. You know, I love Ethereum. Of course, we’re gonna buy those.

Of course, they’re gonna be in the strategic reserve, right? Because people are saying, hey, wait a minute. How are you gonna have a strategic reserve without Bitcoin? So yeah, of course, you know. But everything collapsed and then people realized exactly what I said, that that post did not say we were gonna have a reserve.

It just said that my guys are studying it. Well, what happened this afternoon or yesterday, yeah, they leaked it. They announced it yesterday, last night.

And then we had this crypto summit. In fact, it’s probably still going on. I don’t know, maybe it ended.

I was watching part of it. And I thought it was a national embarrassment, really a low point in the presidency where Donald Trump is basically doing this. And I know Donald Trump doesn’t believe in Bitcoin.

And he just feels like obligated that he’s gotta repay the favor. He’s not an experienced enough politician to know that you take people’s money and then screw them over. I forget who said that.

That was a famous quote. If you can’t take people’s money and then screw them over, you don’t belong in politics. So Trump, once he finished using the crypto industry to get elected, he should have said, okay, that’s it.

I’ve got nothing to do with this crap. But maybe he feels like it’s a businessman and he gave his word and his word is his bond. And so he’s just kind of doing what he feels like he owes everybody.

And so he had this BS crypto summit. But they came out and they announced the establishment of the Bitcoin reserve. And of course, this is what everybody’s been waiting for.

But the price of Bitcoin sold off on the news before they announced the reserve. It was, I think, about 91,000. And they announced it and it immediately tanked below 85,000.

And as I’m speaking, it’s 86,800-ish, around there. But there is a Bitcoin reserve. But the key is the government is not gonna buy any Bitcoin.

Now, I’m gonna read what it said in the official executive order on this Bitcoin reserve. And basically it establishes two things, a Bitcoin reserve and a crypto stockpile. So they did separate Bitcoin from the other coins.

Bitcoin is gonna be held as a reserve asset. The other ones are just gonna be a stockpile. I don’t know if it’s a distinction without a difference.

But again, they’re trying to put some extra status on Bitcoin by calling it a reserve because we have a reserve of gold. So now they can say we have a reserve of Bitcoin. But this is what the executive order reads.

The strategic Bitcoin reserve will be capitalized with Bitcoin owned by the Department of Treasury that was forfeited as part of the criminal or civil assets forfeiture proceeding. Of course, that’s what Donald Trump promised to do when he gave his speech in Nashville. Unlike RFK Jr., who promised to buy Bitcoin with government money, Trump never made that promise.

So he doesn’t have to keep it because he never made it. And I pointed that out in real time. And this is why I was hoping that Biden would have sold that Bitcoin before he left office when he could have sold it.

It was over 100,000 of Bitcoin he could have cashed in. And he didn’t even get that right. But anyway, it says other agencies will evaluate their legal authority to transfer any Bitcoin owned by those agencies to the strategic reserve.

The United States will not sell Bitcoin deposited into the strategic Bitcoin reserve, which will be maintained as a store of a reserve asset. Then here is the part where he tried to throw a bone to the crypto and Bitcoin people. The Secretaries of Treasury and Commerce, and that’s Ludnick and Besson, the two guys I’ve been talking about, are authorized to develop budget neutral strategies for acquiring additional Bitcoin, provided that those strategies impose no incremental cost on American taxpayers.

So in other words, they have to explore figuring out how to get more Bitcoin without actually buying them, without actually burdening the taxpayers with any cost. And they have to be budget neutral. Now, how do you buy Bitcoin without paying for it? Well, that’s going to be a difficult problem that Trump has asked them to solve.

Now, some people are saying, well, they can just sell the gold and buy Bitcoin. They can’t, because if they sell the gold, then there’s a cost on the American taxpayer. We paid gold, right? We paid gold.

We bought Bitcoin with gold. That is a cost, right? What did the Bitcoin cost us? It cost us our gold. Now, you know, we have less gold now because we bought Bitcoin, right? So that is not neutral.

And of course, if the government were to sell its gold, it could take the dollars and pay down the debt. But if it takes those dollars and buys Bitcoin instead, then we haven’t reduced the debt, right? So it isn’t budget neutral. The budget deficit is bigger because we had dollars that we got from selling our gold and we used them to buy Bitcoin.

So I’m really not sure how the government is going to go about acquiring Bitcoin for free. But I suppose if they can get Bitcoin for free, what the hell, they might as well take it. That’s basically what they said.

They said, look, we’re not going to buy any Bitcoin. But if we can find a way to get some free Bitcoin, I guess we’ll throw it in the reserve, right? So I don’t know how they’re going to get it. Are they going to ask for donations? You know, I don’t know.

But the Bitcoin community, you know, is trying to make lemonade out of these lemons by saying, look, look, see, they’re going to buy. They’re going to buy. They’re going to buy.

They’re not going to buy. Hopefully this is it. And Donald Trump never has to talk about it again.

He’s like, OK, we got the stupid reserve set up. I already made my money on Trump coin and Melania coin. Now I’m done.

We’re even. You know, I don’t owe you guys anything anymore, right? And hopefully, hopefully, this is the last time I have to hear Donald Trump talk about crypto or Bitcoin. You know, he’s got real problems.

He doesn’t have to make them worse by subsidizing or encouraging the US economy to waste more resources on Bitcoin. You know, he says we’re going to be the leader in Bitcoin. You know who the leader is? The winner in Bitcoin is the country that wastes the least amount of money on it.

You know, if we’re really going to rebuild the country, the last thing we should do is squander our resources on crypto. We need those resources to build factories. You know, finally, Scott Besson, and a couple of things that he said where he contradicted himself.

I was listening to him on CNBC. One thing he said was that he said that the tariffs aren’t going to, you know, raise prices, but that they will, you know, make US goods more competitive. Well, the way they make them more competitive is by raising the price of imports.

So, you know, they’re saying the opposite. I mean, both of them can’t be true. And he even said, and the guy, whoever interviewed him on CNBC quoted him, that you said, well, Americans don’t necessarily want to buy cheap things.

You know, they’re more concerned that the workers have good jobs, which I don’t think is the case. I think all Americans want to buy cheap stuff. But if Besson is going to admit that the tariffs mean that stuff’s not going to be cheap anymore, well, that means it’s going to be more expensive, right? How can you pretend that tariffs aren’t going to raise prices when you say, well, I don’t think Americans really want low prices anyway? Yeah, they do, right? That’s why prices are low, because Americans want them low.

If Americans didn’t give a damn, don’t you think companies would charge more? Of course, companies would charge as much as they can get away with. The reason they can’t charge more is because the consumer shops around looking for a good deal because they want low prices, right? It’s everyday low prices, right? No company has the slogan, come to our store. We have high prices every day.

Oh yeah, I got to go to that store. I can’t wait to pay those high prices. Remember, I did this video one time with my mother-in-law.

We went to Walmart. This is back when they were trying to get a $15 minimum wage. And I was going around with a collection box, trying to see if the people who were shopping would put a little extra money in my box so I can give it to the workers so they could earn more money.

And nobody wanted to do it, right? I mean, it’s a funny video. If you go on YouTube, Peter Schiff, Walmart, but people don’t want to pay higher prices so workers can have higher wages. Sure, if workers can have higher wages, and it doesn’t cost them anything, yeah, they’re all for it.

But if you say, hey, we want to give the Walmart workers a raise so you got to pay higher prices, hell no. No, no, it’s okay. I need low prices.

But the other thing that Bess had said, and I was really watching this with great interest, but he was asked, I think it was Joe Kernan, I forget who he was interviewing. Yeah, Joe Kernan. But he said, hey, what about the strong dollar policy, right? Do you still want a strong dollar? Now, he couldn’t say no, because the dollar would crash, right? I mean, if he said, we have a weak dollar policy.

So he said, no, we still have a strong dollar policy. Well, first of all, the strong dollar policy wasn’t a policy, it was a mantra. The strong dollar policy was every time somebody asked you about the dollar, your response was, the United States believes in a strong dollar.

A strong dollar is good for the United States. That was our policy, just repeating that over and over again, right? Because we didn’t actually do anything to strengthen the dollar. We just played lip service to the fact that we wanted a strong dollar.

And I would joke, it’s like telling a kid or a kid in school says, I’ve got a straight A policy. It’s like, well, what’s your straight A policy? Well, I just talk about how I want to get all As. Well, what are you getting? Well, I’m getting all Fs, because I don’t study, I skip school, and I smoke pot all day.

But I got a straight A policy, right? Yeah, who cares what your policy is, what you say, it’s what you do. And our policy was never about a strong dollar. It was about running huge deficits, spending a lot of money.

These are weak dollar policies, but we had a strong dollar anyway, despite the fact that we were cutting class and smoking dope. The teachers gave us a passing grade anyway. Well, in this interview, he was talking about how he doesn’t like it that other countries are cheating in trade by undervaluing their currency.

So he’s talking like he wants a lower dollar. And that’s when he said, well, are you changing the strong dollar policy? Oh, no, no, we want a strong dollar. We just don’t want other countries to do stuff to strengthen the dollar, right? Which is, you know, you can’t have both.

You can’t want a strong and a weak dollar at the same time. The fact of the matter is, I know Besson wants the dollar to go down because he thinks a weaker dollar will make us more competitive. He thinks a weaker dollar will shrink our trade deficits.

It won’t unless it gets really weak. So if the dollar just goes down 10 or 20 percent, that’s just going to increase the cost of imports. It’s not going to move the needle enough.

Now, if the dollar crashes 50, 60, 70 percent, yeah, right, that’s going to have a big impact. Everything will be so expensive, we won’t be able to afford to import, right? So, yes, if the dollar weakens enough, and it should, because the dollar is so dramatically overvalued now because of its reserve status, but that’s changing, right? And we’re actually accelerating the process by, you know, chastising the world. We’re going to put tariffs here.

America first. You guys are screwing us. You guys are taking advantage of us.

We’re not defending you anymore. You know, one of the reasons that potentially the world was willing to carry us for so long and subsidize our profligacy and provide us with all these consumer goods was at least we were providing them with defense, right? Okay, we have these big deficits, but, you know, we’re not having to spend the money on the military because the U.S. is defending us. Well, if we don’t do that, it’s like what the hell do we need these guys for? Why are we selling them all of our stuff and getting nothing in return? We’re just getting their dollars that they print.

They’re going to lose value, and now they’re not even going to supply our defense. We’re now on our own. So this is going to result in a weak dollar, and I think people are going to realize, they’re going to see through what Bessett is saying and realize that not only do we have policies that will weaken the dollar, but now we don’t even have the lip service to strengthen it, right? We don’t even have the pretense of a strong dollar policy when you know that the Treasury Secretary would prefer to see the dollar go down, and he thinks other countries are cheating because he thinks their currencies are too low.

Well, if their currencies are too low, that means the dollar is too high, and what that means is get out of your dollars, right? What we saw this week where U.S. stocks and bonds go down and foreign stocks and bonds, well, the bonds went down, but they went up in dollar terms, but foreign stocks went way up, right? This decoupling is a sea change, and I think it’s going to continue not just for the rest of the year, but for the rest of the decade. So that means all the years of the U.S. outperforming the world are over. Now the world is going to way outperform the U.S., especially in dollar terms, because as the dollar goes down, that really accelerates the international returns on non-dollar denominated assets.

So that’s why you really should be looking into the Euro-Pacific funds. Go to our website at europaq.com. I think that we’re going to have a phenomenal run in these markets, and I think our funds are perfectly positioned to ride this wave for years to come. Again, I could be wrong, but I don’t think I am, and if you think I’m right, then you really don’t want to wait much longer.

Get out of overpriced U.S. stocks, get out of an overvalued U.S. dollar, and get into relatively undervalued foreign stocks that I think are about to see huge inflows and then the emerging markets, and get into foreign currencies and commodity-related stocks, in particular, these precious metals mining stocks. Anyway, have a great weekend, everybody. That’s it for today’s podcast.

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