Watch and listen to U.S. Money Reserve's Coy Wells and Patrick Brunson talk about the Great Depression and how the U.S. President is taking extreme measures in attempting to salvage the U.S. economy and what it is actually doing to the U.S. economy.
Post Recessionary Measures- Video Transcript
Coy Wells: 00:00
Good morning and thank you for watching daily market insights. Today we're gonna talk about something a little different right now it appears the u s government is doing what what I call post recessionary measures. And when I mean that it means is what we're doing right now is we're taking measures here inside of the United States that we would normally take when we were in a recession. A couple of those things is, is right now we know that they're repealing the Dodd frank act. That means we're going to unshackle the banks to be able to open up more loans to individuals may not have the ability or have not had the ability to get them in the past. It's one of the things that got to United States in trouble and the recession of 2008. Number two is, is right now you're seeing tariffs placed on foreign countries, especially on the import and export of aluminum and steel. The other one is you're seeing tax cuts being placed. Uh, today we're here with Mr. Patrick Brunson and we're going to talk about some of these items. And what these items really mean for the US economy. Uh, Patrick, what we're watching now, what we're seeing on the news is something that we've really not seen before unless we see or have seen in recession. What's your opinion on that?
Patrick Brunson: 00:57
Typically when we have a recession, we have tools or bandaids is what they typically call it that can help us get us out of the recession. What we're seeing right now is that Trump seems to be implementing certain types of like these tariffs, for example. uh, you got the tariffs that you have, uh, the tax, uh, the tax cuts, you got the spending budget. All these things that he's doing in an economy that technically has recovered from the recession. He's, he's using all the tools that we would need once we do go into a recession. You typically don't do massive tax cuts on the people unless we're trying to get the country out of that type of situation. So the big question here is if we're using all of our tools now that we would usually use to get us out of a recession, what are we going to have at our disposal once we finally do go into a recession? That's a good point and I think with the customers that you and I talk to on a regular basis, I think the standard response for the consumer is well, the country will just print more money. I think I have the answer to why we wouldn't be able to print more money. What's your opinion on that?
Patrick Brunson: 02:04
Well, the reason being is interest rates. If you look at the depression, for example, they were using all the same tools that we're seeing now to try and get us out of the depression, but it forced the Federal Reserve at the time to raise interest rates a lot faster than they wanted to. And ultimately it put us into the Great Depression. That's what's scary about the whole thing. More money we print. It just means that the government's borrowing that money from the Federal Reserve and they have to pay interest on those, on those IOUs that they're giving the Fed. So I mean, if we print more money and start adding more money to the, to the deficit, all these new spending programs. The higher interest rates get well- the more risk.
Coy Wells: 02:47
The other thing too is, is that we know for a fact that before Jerome took office several weeks ago, uh, on that Thursday evening, he announced that in his first term he was considering raising interest rates. Now he had said that he wants to raise interest four to six times this year folks. Four to six times is uh, quite a, that's a pretty big move. Janet Yellen wasn't able to get away with this. She was able to get away with about three times. He's wanting to do it four to six times this year. One of the things we've talked about in the past is credit card interest rates are already going up. We're already seeing fuel at the gas pumps go up. We're seeing credit card prices increase. We know consumers are saying that loans for automobiles are getting higher and if they're unshackling the banks right now, we're probably going to see interest rates go up higher.
Coy Wells: 03:26
They have to go in conjunction with each other. The other thing that we're also seeing right now, Mister Brunson is correct. Jerome Powell this week is going to be at the Fed meeting. And one thing unequivocally he stated his, we're going to be raising interest rates. That means when that meeting's done, we're probably going to see the stock market this week, be a pretty rocky week, probably mid-week in the stock market when he actually makes the decision to raise the interest rates. It could be built in, but I doubt it. I think you're going to see the stock market respond to that. And uh, Mr. Bronson also I think would probably agree that raising interest rates is the detriment to the treasury bond issues. Right now. We know that we've got a ton of treasury bonds sitting on the Federal Reserve's balance sheet right now. Uh, what's your opinion on that?
Patrick Brunson: 04:08
It's, we're in uncharted waters. We've never seen this before. I mean it's getting to the point where printing money and borrowing more money from the Fed- when you get to a point where that's the norm, that's a bad place to be. Usually we rely on consumers and other countries to purchase our debt and purchase our treasury bonds, but they're losing interest fast. And once we get to a point where the only people purchasing treasury bonds is the Federal Reserve, that means we're only printing money out of thin air from there. That's it.
Coy Wells: 04:40
And what that also means folks, is that the treasury bonds are sitting on the Federal Reserve's balance sheet as a negative. The reason interest rates ties into this is the only way to get rid of these treasury bonds is to raise interest rates. They have to make those treasury bonds appealing for countries to pump the brakes on sending them back. Or number two, they've got to find a buyer here right now. If low interest rates are there, nobody wants to buy a treasury bond when they know that the US economy is in trouble. Uh, tariffs is something else that they're trying to do to strengthen the US economy, but it's also putting tension between the United States, China and some of these larger emerging countries. All these issues are huge issues and as I stated, and Mr. Brunson stated, these are post recessionary measures. These are items that we would normally do in the middle of a recession to try to get us out.
Patrick Brunson: 05:24
Now, here's the thing though, with the tariffs. I don't think people are looking at this the right way. When they put tariffs on steel and aluminum, that's fine. But the fact of the matter is that means that these countries are just going to start producing. They're not, they can't put, you know, a tariff on a washing machine, right? They can only do it for the steel and the aluminum here in this country that's coming to us. Well if, take Whirlpool for example, if Whirlpool is producing washing machines and refrigerators here in the United, they're going to stop. They're not going to pay these tariffs. Instead of paying for the tariffs and buying was steel off shores. There's just going to start producing more of these washing machines and refrigerators in China or other countries and at the end of the day that's going to reduce employment in the manufacturing here. It's not going to increase. It's just, it's a catch 22 and so I think, I don't think people realize that that's actually going to hurt manufacturing here in the United States as opposed to making it better.
Coy Wells: 06:26
Well, and I agree with that 110% and I think also a lot of people don't understand by raising interest rate, it doesn't spur on spending. It actually slows it down. It makes it more expensive for you as a small business owner to be able to operate and manufacture here in the United States. Whether you're buying a truck for your company or you're buying equipment for your company that you've got to buy on a lease program or you've got to take out a loan for it, it makes it more expensive for the small businesses to operate. So this is a lot of information. Hope this helped you today. Uh, we've got two reports. So one is the fiscal states of America. We have a continued to promote this. This talks about uh, your state and how the it stands inside the United States.
Coy Wells: 07:03
And Remember Rhode Island is one of the first states that's now attacking pension plans for the state employees going back to the year about 1990. Uh, they're going back and start borrowing money or taking that money from those who worked for the state and put in their time. So this report will help you kind of identify once one state has already got that appealed through legislation or through a judgment. They've already won that case. That means they're physically going to start taking the pension plans of the state employees in that state. Once one is done, another state's going to happen. Possibly Virginia or Pennsylvania is talking about it right now. Make sure you get a copy of this, this will help you out. Mr. Brunson also has another really good report. Uh, this is the 2018 annual gold forecast. This is not out yet, but if you submit your information by clicking on the link, you can actually be one of the first people to get this forecast. This is big, big right here. I'm not going to go into details about what's in it, but if you want to get your copy of this, click on the link below. If you have any questions about what we talked about today, you could obviously leave a comment down below and we'll address that and get you an answer to your question. As for now, that's pretty much it for today. Um, Coy, you have anything else? no, just click on the link. There's also phone number down there. Again, thank you for watching daily market insights and we'll see you further in the week.