Watch and listen to U.S. Money Reserve's Coy Wells talk about when things become under stress, more stringent and more radical measures and maneuvers will be taken such as a trade war being a strategic yet desperate maneuver for the United States to drum up more income or try to salvage the United States economy.
Trade Wars: Could They Be the Spark of the Next Recession?- Video Transcript
Coy Wells: 00:00
Good morning and thank you for watching daily market insights. As most of you know, last week the stock market plummeted nearly 1300 points and the reason it went down is because of the word trade war. That's one of the things that's been going on with the Trump administration and primarily with China. A lot of people don't realize that China is one of the largest importers and exporters in the entire world, and now the Trump administration is looking at placing tariffs against China. Well, China can also play the same game back to the United States, but Donald Trump is looking at placing a tariff on nearly $60 billion of assets, primarily in aluminum steel coming in from China. China can also do the same thing with the services of goods that they placed against the United States. Some of the things that we talked about in the past, it's very important to understand is that when the market starts falling 1300 points and at the beginning of the year the stock market was sitting at roughly 26,000 points and we've seen those types of drops off of interest rates and now a trade war that is now taking place.
Coy Wells: 00:54
These are some of the items we talked about being what we call post recessionary measures. These are measures that we would be taking if we were already in a recession. The U.S. Dollar over the course of the past few months has already lost about 20 cents. That's one of the quickest declines in the U.S. dollar since we've seen since 2003. what you're seeing right now is the Trump administration currently stressing and stretching to be able to come up with enough income to be able to support the U.S. Economy going forward. The United States is doing what we call post recessionary measures. Think about what I'm saying here. Post recessionary measures. We've seen tax cuts, which helps the middle class. We've repealed the Dodd Frank Act, which unshackles the middle level banks to help support the middle class and the lower class get loans. So we've unshackled the things that the Dodd Frank was restraining that got to the United States in trouble in 2008. The trade wars is a massive measure against foreign countries, foreign countries outside the United States from Mexico to Brazil to Tokyo, Beijing, Hong Kong, uh, merging cities.
Coy Wells: 01:53
They look at United States and have always looked at the United States as the greatest nation in the entire world. They know from a financial standpoint that the United States, when we start taking interest rates, unshackling the bank's, placing trade wars, currency wars in the past, these are things that countries are looking at us and they're now questioning the viability of the United States. This is the same thing as a consumer, you should be doing is checking your finances. A good friend of mine this weekend. I spoke to him. He's a big executive for a large company, a corporation in the United States, and said his stock account in the last two days, Thursday and Friday, lost over $50,000. Just with that kind of adjustment. Right now, look at your finances. If you have money in the market, I think most of you know that it is starting to happen. These are the things we've talked about, Mr Brunson has talked about, over the course of the past few months.
Coy Wells: 02:43
We also have to look at what's taking place from a cyber attack. These are other issues that will be coming up. As the economy gets worse, as consumers get more stressed financially. Cyber attacks will become more frequent and will start happening against banks. We saw this in the past with major corporations such as target. Some major grocery were hit last year. Bank accounts are being hit on a regular basis. Myself, my credit card or debit card was hit, uh, several months ago. It's been hit probably three or four times in the last six months and the bank has to reissue another credit card and of course there's insurance to help recover that, but these are things that happen when a country or economy becomes under stress. More desperate measures come in place and that's the thing that we really want you to think about. When things become under stress, more stringent and more radical things in measures and maneuvers will be taken and a trade war is a strategic and a desperate maneuver for the United States to drum up more income or try to salvage more income inside the United States.
Coy Wells: 03:39
Okay. Robert Shiller on CNBC news, also a a Yale economics professor, who came up with the Shiller index, which is still sitting well above what it was during the Great Depression, is also screaming at the rooftop saying that trade wars- it could be the catalyst that pushes the U.S. economy over the edge. The question now becomes is when we start going into a recessionary period, what band-aids will be available to us or what tools will be available to us to help get us out of that recession? We've already removed the shackles on the banks. We've already done tax cuts, now we're in a trade war. Those are things you would have done in a recession. So if we're not classified as being in recession, what are we going to do when we get into a recession to help get us out? Okay. When you think about that folks, it's just like when you as an individual loses your job- that means everything in the household has to be cut back.
Coy Wells: 04:27
Everyone in the household suffers. The same thing happens with the U.S. Economy. The only way to get us out of that is that we have to have a restart at some point in time and we're well overdue of that, and I think most people know that. So think about that. As always, thank you for watching daily market insights. Another great tool that we've suggested that you look at is the fiscal states of America. This talks about the pension plans inside the United States that are also in trouble. Most Americans don't realize that each state inside the United States has been borrowing against the pension plans with inside the states to keep them afloat. So this is another measure or a radical measure that states are taking to keep themselves afloat. So call, click on the link below, put in a comment, request your free copy of this.
Coy Wells: 05:07
This will help you out and understand where your state's at. As we talked about, Rhode Island is one of the first states who has now gotten a judgment against pension plans. Meaning they've gotten approval from the highest court level to be able to go back to the year of 1990 for state employees to get those pension plans to pull back and fund the state because they're in trouble. They're a double A state. A double A state getting a state or legislative approval to go after pension plans. The states are in trouble. Our country is in trouble. Continue to watch. Click on the link, give us a phone call. And as always, thanks for watching daily market insights.