Trump Fed Feud Sends Gold and Silver Soaring

The Gold and Silver Boom [00:55]

• Silver was the day's superstar, closing up $5.30 at $85.854, nearing $86 and increasing by over $6 on the day.
• When Schiff first started buying silver, it was under $5 an ounce, making today's move greater than its entire past value.
• Gold also hit a new record high, up about $120 an ounce, marking the biggest dollar gain ever for gold.
• Both gold and silver closed at record highs, with charts and fundamentals looking exceptionally strong.
• Gold and silver mining stocks saw decent gains (GDX up 3.4%, GDXJ up 3.5%), but are expected to rise much higher.
• Investors remain too cautious, fearing a bubble, and are missing the significance of the rally.

  "Again, these stocks should be up so much more. It's just that investors still don't appreciate the significance of what's happening in gold and silver."

The Fed's Financial Mechanics and Incentive Structure [12:26]

• The Federal Reserve headquarters renovation cost $2.5 billion, highlighting their reckless spending.
• The Federal Reserve is a private entity, and member banks are allowed a statutory return on their capital investment, typically around 6%.
• Profits above this distribution are paid to the U.S. government, effectively placing the Fed in a 100% tax bracket.
• This structure removes the incentive for the Fed to control costs, as any unspent money goes to the government anyway.
• The Fed has no incentive to conserve money; they are essentially spending the government's money, leading to waste.

  "So, what is the incentive of the Fed? I mean, do they have an incentive to keep costs down? Well, no. Because whatever they don't spend, they're sending to the government."

The Powell Investigation and Fed Independence [11:08]

• Jerome Powell was served with a subpoena for information related to a criminal investigation by a grand jury.
• The investigation concerns alleged false testimony to Congress regarding the cost of the Federal Reserve headquarters renovation.
• Schiff argues that lying to Congress is standard practice for Fed chairmen and politicians, making the indictment laughable.
• The dispute is framed as a power struggle between Trump and Powell, with implications for the Fed's independence.
• Trump aims to replace Powell with a "lackey" to control the Fed, potentially influencing monetary policy for political gain.
• Powell might stay on the FOMC to resist Trump's influence and defend the Fed's independence.

  "And so, this is pivotal here. This is coming down to: are we going to have an independent Fed? Are we going to have a Fed where interest rates are set by the Federal Reserve independently... or is it going to be based on what the president wants to do right now?"

Trump's Economic Policies and Criticisms [32:28]

• Trump proposed capping credit card interest rates at 10%, which Schiff argues is unconstitutional and economically harmful.
• This proposal is likened to price controls, similar to criticisms leveled against Kamala Harris for her remarks on grocery store pricing.
• Schiff contends that credit card companies are not ripping people off; high rates reflect the risk of defaults and regulatory costs.
• A 10% cap would likely lead credit card companies to reduce credit limits or cancel accounts, restricting access to credit.
• Borrowers unable to get credit cards would turn to riskier lenders, such as loan sharks, resulting in higher actual interest rates.
• Trump's proposed policies demonstrate a misunderstanding of economics, the Constitution, and free market principles.

  "So, what would happen if Donald Trump's idea became a law? What if there actually was a 10% cap on the interest that credit card companies could charge? What what would happen?"

Trump's Views on Presidential Power and Global Implications [43:42]

• In a New York Times interview, Trump stated that the only limit to his power is his own mind and morality, not the Constitution or external authorities.
• Schiff views this as a dangerous embrace of absolute power, comparing it to monarchical rule and the concept that "power corrupts."
• Trump's rhetoric on Venezuela (desiring oil) and Greenland (wanting to acquire it) suggests a willingness to use military might for national advantage, disregarding international norms.
• This aggressive stance, coupled with a debased currency and a weaponized military, signals a threat to global stability and the US dollar's reserve status.
• The international community, which finances US deficits and debt in exchange for a stable dollar and military protection, is increasingly wary.

  "Power corrupts. Absolute power corrupts absolutely. Nobody should be trusted with absolute power based on the fact that they got a conscience and will trust you to do the right thing."

The Dollar's Demise and Call to Action [57:31]

• The US dollar's days as the reserve currency are numbered, with gold expected to become the primary monetary asset.
• Silver's price is also driven by favorable supply and demand dynamics beyond its correlation with gold.
• Industrial metals and other precious metals are also performing strongly.
• Wall Street remains oblivious to these fundamental shifts, viewing the precious metals market as a sideshow.
• Bitcoin is presented as a distraction, failing to act as a safe haven like gold and silver.
• Schiff urges listeners to protect themselves by buying gold and silver, divesting from US stocks and bonds, and investing in foreign markets.

  "The dollar's days as the reserve are numbered and the number may not be that large."