Beau gideon came out today and discussed the state of inflation and how the biden, administration and himself plan on combating the state of inflation within the united states. Inflation in case you're not aware, is the rising in prices across lots of different consumer goods. This can be gas, housing uh, your car, it can be groceries, it could be a whole plethora of different things. Inflation is bad, it means prices go up and biden wanted to address how he's going to handle this sort of problem.

Now. I think there are some key problems, one of them being that that is unrealistic expectations that he has set for himself and for the country two. I think a lot of these things are not going to happen and three if he fails to combat inflation. The way that i think is necessary, you really put uh some pressure on the u.s dollar as a primary world.

Currency uh, which we are going to discuss here today, guys welcome to trace trades. We freaking talk fast and don't skip class i'd like to promise by saying that i'm not a financial, advisor or expert so take what i say: the green assault uh, let's get into it today, we're gon na go over biden's plan right, i'm gon na start off. First and foremost, with the three things that he addressed when he talked about how he plans to combat inflation number one, he would like to not demean the federal reserve. Now, when i, when i saw this when i read this uh, i couldn't help but chuckle, because the federal reserve isn't a baby they're, not something that needs to be coddled.

I think that i think that j pound needs to get biden's nipple out of his mouth and just kind of do his thing. But that's one of the primary goals number two is to have cheaper goods for families essentially to lower prices and perhaps even have deflationary aspects of the economy to make gas more affordable at the pump uh to keep probably aprs and interest rates low on mortgages and The like now he's specifically focusing on energy, which is gas. We can talk about this too, as we dive further into it uh, but this would mostly revolve around clean energy tax credits and some of the different legislation that biden's actually passed during his presidency. To quote unquote: move forward with clean energy he's talking about supply chain.

He talked about foreign ocean fees, uh, repairing infrastructure. These things i'm going to focus less on. I want to focus more on the oil, as he didn't get much of a plan in terms of what he would like to do with infrastructure and managing those uh, those foreign ocean, feasts. Third, tax reforms.

You would like to tax billionaires, more money uh and to find a way to work through those loopholes, so they are paying their fair share, as you would expect from a teacher or from uh a mcdonald's employee. He just he wants billionaires to pay their percentage cut. The same as anybody else would now uh. I want to talk about sort of the the the cons, the pros, the the kind of holes in this idea along all three of these things, you'd like to accomplish, but first i want to talk about some obstacles.

Right number one passing policy and legislation uh, but i didn't you know: i'm gon na i'm gon na stay as bipartisan on this, as i can has, has been sort of hit and miss in uh in passing things that have helped the economy. I i am of the belief that most of the time uh, the president has much less to do with the economy than uh than your congressman and other politicians, and mostly really lobbying how lobbying will take effect. I mean if you're gon na look at something i think nancy pelosi is probably the first door you want to knock on, but passing the policy and legislation. So all of a sudden poof makes supply chain fix itself or poof, make cheaper goods for families or poof.

Make the fed do their job the proper way or poof, suddenly tax billionaires and pretend, as if lobbying doesn't exist, and as if these guys aren't in bed with different politicians, it seems very unrealistic uh, that's the first problem that i've got. The second is that i think that the fed is pretty stupid. I think jay powell is uh being too flip-floppy. I've talked about this before and i think that biden's saying that he just doesn't want to demean the fed which, in my eyes, is the same as putting faith in your federal reserve.

Uh is really just opium. I don't think this actually addresses any problems. I think i would have liked to see some tangible solutions and things that he plans on doing with the federal reserve to help take care of the problem. But we didn't get that we got uh, i'm not going to demean the federal reserve they're just going to have to do their job, which really doesn't fix a damn thing: three public fear in the market.

This is a true obstacle. This is something we have to be wary of, because every decision that the federal reserve and that biden makes and that politicians make has reflections and inflections in the overall market and if he makes a bad decision or if he makes a decision too fast or doesn't Think long enough, it is going to affect the stock market, which then, in turn, is going to affect uh small medium-sized large size investors, which is going to reflect on the overall economy. Lastly - and i've mentioned this before is unrealistic expectation, i think this is something that biden really uh has to sort of dial back. You know these are a lot of really lofty goals, with really no plans uh attached to them, which is what i'd like to talk about after we talk about the stakes uh coming up next, which is inflation and deflation, now inflation and deflation uh, as i mentioned Before uh have significant impacts on the economy, inflation typically comes when the federal reserve is very loose, they hand out a lot of money.

They lower interest rates. You typically see the price of things start to go up and deflation would be the opposite of this. It is when you tighten things down when interest rates go up. You typically see less spending within the economy, uh and that would actually cause in the short term prices on things to go down uh, but you don't want too much of an extreme on either side.

You can think of it essentially like a weight, so if you've got an apple compared to a bowling ball right, here's the apple, here's, the bowling ball, we're gon na see the bowling ball way down here in the apple way up here you don't want this. You want things to be evenly weighted as much as humanly possible, and i think that a realistic expectation here is that it might be too late for the fed and for the government to fix this without running into deflation. And this is going to affect your everyday life. It just is, i mean you're going to see gas prices and the cost of vehicles go up significantly and then, when things do get cheaper, people are already pretty dry on cash.

You're gon na be running into a problem: homes aprs and this kind of ties into mortgage-backed securities, which is something that, by the way, knock on wood. The federal reserve has started to talk about almost like. We didn't learn anything from 2000 ain't, but i don't know you're, probably just gon na have to pay more. If you don't have a fixed state pr on your 30-year mortgage or a 15-year mortgage stocks, the stock market, the bear market, is really going to thrive.

On this thesis of inflation and deflation, swaying back and forth, and back and forth, with a flip-floppy federal reserve and a president - that's not pushing down on the head of the bald man who really needs to get stuff done here. Right, that's problematic! This! This inflation deflationary aspect is really what's on the line uh and if body makes the wrong choice that is going to affect you the same as it affected you when they printed all the money that caused this inflationary problem in the first place. The next stake on the line - and this is mostly speculative i'd like to admit - is the risk you run of losing the dollar as a world currency and losing that world currency status. So if you were to look back right, a lot of people don't talk about this, this kind of got buried.

If you look back uh at the beginning of the russia and ukraine conflict, so there's a couple different things that happened and one of these bidens sort of put a lot of pressure on and signed off on. It was getting russia out of swift. Now, what is swift swift in the most simple way put is uh a a linking of banks. It's like an international banking system that ties a whole bunch of different countries together to be able to exchange different currencies uh for whatever they'd, like you could exchange the euro for the dollar, the pound for the dollar, the euro for the pound, the ruble for the This this for the that the yen for the the yang, i don't know, there's a whole bunch of different currencies, but it was a primary banking system that tied together a bunch of countries.

Well, the united states kicked out russia from this banking system. The swift program - and it was estimated that uh the economy in russia would see a five percent drop off. However, there were two things that sort of followed up on this right, and this is really important number one. The ruble changed its primary backing to gold.

They sort of pegged the ruble through gold and what you saw initially when they were kicked out of the swift program, is the ruble lost a lot of value when they re-pegged it essentially to gold? It regained a lot of value now. Why is this problematic? Well, if you look at china, which is another major powerhouse that is growing very quickly in their economy, their gdp is on pace to match the united states within the next 25 to 30 years. Uh, you have the potential for them to start up, basically their own swift program. Now, why would this be problematic? Well, if the russia situation isn't reliant on the us dollar, pegged to the ruble, it's now backed by gold and all of a sudden, china starts getting on board, which is something by the way that has been discussed in some detail as a possibility.

What you run into is a problem for the us dollar being a primary currency. You take russia, you take china uh and you put them together. These are two very large countries, uh with pretty decent sized economies that could run at risk for the u.s dollar. This is something that is a little bit scary and i think that, if inflation's not handled properly and if the state of the economy isn't handled properly, you're just going to see the u.s dollar lose more and more and more power which is going to affect the Bottom line for everybody in this country, uh and, lastly, right unemployment.

This is a real risk. All right. Unemployment is a risk to me if they do not match wage increases with the amount of inflation that has been seen. This is something i think.

Biden should actually be focusing on right now. What happens if cost of business goes up because inflation's going up? Let's just say that the cost of business goes up, eight percent. It costs you eight percent more to get all the supplies that you need to be able to run your business right, but you're only paying people an extra two percent more for wages. Well, how is this going to bleed off for the us economy? Well, you're gon na have less money for groceries, less money for rent, less money for gasoline, less money for travel expenses, less money for everything - and this is just gon na bleed off on how much money people are spending in the economy which loops back into businesses, Which moves back into the people's hands and you run into an imbalance right when you don't raise wages alongside inflation.

People just can't pay the cost of living, and this is going to increase the amount of foreclosures that you see on homes which, by the way, knock on wood, comes full circle back to the federal reserve wanting to sell mortgage-backed securities right. This is also going to lay into uh the cost of things. If people can't pay for things, then you start seeing deflation, which is something that i think is very likely with the way that rate hikes are starting to go at the federal reserve right we've stated all these stakes: we've stayed at all the obstacles, we've kind of Painted out this picture for you and the pictures so far, and what i kind of think is there's a lot of risk on the line and this risk is going to affect you first and foremost, and the biotin uh sort of plan to combat inflation seems like A big fat, nothing burger, it seems like a bunch of buzzwords that were thrown together to to really give you no sort of conclusion i mean number one is what he said: a fed pressure, uh or uh, not to demean the fed. I think he should be saying the opposite: we need fed pressure, we need to be aggressive with the federal reserve, we need to say hey, you need to be monitoring this inflation situation very closely and keep an eye on what makes the most sense to take care Of these problems number two supply chain infrastructure plan: buzzwords.

There was no plan attached, you didn't have any sort of uh inclination of what he thought. That would look like. How are you going to magically fix the supply chain problem? How are you going to magically uh fix the infrastructure problem and then he talks about clean energy and taking care of gas? Well, how come we're not talking about how biden had uh this different legislation that was going to increase the cost of gasoline because we are no longer energy independent? This is something i think we should strive for sure i drive a tesla. I love clean energy.

I think that teslas and clean energy are the future, but is it the future right now? Is this something that's realistically possible for every single american in the country to have accessibility to no it's about a clean, smooth transition to where you'd like to go in the future and in my opinion, it's not something that biden can accomplish in his four-year presidency. Sure you can make great progress, maybe it's possible, but in the meantime you can't just over all americans. We have to have oil dependency, energy, uh, oil, independency and energy independencies. These are important things that sort of just kind of get buzzed over.

It seems like he's being very ambitious with this clean energy tax, credit sort of thing, and it's not taking care of the underlying problem, which is we gave up oil independency energy and dependency last talking about uh billionaire loopholes, tax reforms. He referred to it as the common sense tax tax reforms too ambitious. I don't think you're gon na get the legislation passed. I think that lobbying will always happen and i think these are problems that we're going to continue to face uh for quite some time.

I mean him even talking about it was the goofiest thing that i've seen in quite some time, because we just know that it's not going to happen. Why even bring it up right? You know, there's no reason to throw it back on our faces. If it was me right, i'm not a politician, i'm not a businessman, i don't, i don't know everything about the world, but i'll tell you this. There are five things that i would do that i think are different than biden, and these are things that i think you should pay attention to down the line one aggressive fed.

I don't have to say anything more than that. I think that we're in a painful spot - and then it's gon na hurt a lot to take care of these issues and we're just gon na have to rip the band-aid off and that's gon na be difficult number two legislation to raise wages alongside inflation. If you're up eight percent on the year year over year on inflation, we can even drop it. Let's just say five percent, but wages only go up.

Two percent well you're only going to start feeding into that unemployment, because if people don't have a livable wage, then they can't pay for things and if they go to their bosses and say i need to, i need a. I need a an increase on my pay. I need uh or or i'm on the streets. You know what are they gon na do: they're gon na they're, gon na fire them or they're just gon na quit, and if you can't find a job well you're on the rough side of the stick, i think you got ta see that happen.

I think you need to see wage increase alongside inflation. Number three fed should not sell mortgage-backed securities. Now mortgage-backed security is a reference to back to 2008. It's a pretty complex instrument in which you can trade sort of the real estate market.

It is one of the primary causes of the 2008 housing financial crisis, and the federal reserve is now talking about selling mortgage-backed securities starting in september. Why is this bad? Well, if you look back to january of 2022, when the feds sold all their stocks, what did that look like dumping some bags on it? You peon retailers. So what do you think is going to happen when the feds start selling mortgage-backed securities in september they're going to start dumping? The bags to all you, peon retailers, and what is that going to do well, you're, going to see aprs go up. Interest rates on your house go up, seems important.

Number four and five kind of go going hand in hand uh. It is this, do not print any more money and do not bail out the one percent when you start seeing big boys going under. I do not care if there's banks that take the blunt end of the stick on this inflation thing. I don't care if there's hedge funds that have to eat some ass to get out of this hole, do not print money and do not give a bail out to the boys at the top uh, because these guys didn't get affected at all by inflation.

The people who did are at the bottom and the middle class lower middle class, and if you us up with inflation, then you us up again by having to bail out the guys at the top who benefited from inflation. You're gon na run into some problems and the biggest problem to me and the biggest risk for the united states. As you lose that world dominance as the primary world currency, we give that up. Man, there's gon na be a lot of people who have a bone to pick with the united states, and i think that's pretty important.

I think it's going to affect you. I think it's going to affect me and i'm watching pretty closely how the the government and the federal reserve handles this inflationary problem to me. I'm a little bit bearish on uh how they're handling it. I hope to be pleasantly surprised.

Those are the things that i'm watching for and hopefully pulled some value from this. So that's what i got for the video catch you all later, my friends uh. If you want to subscribe, please do if you want to like the video. Please do if you don't, then i don't care you do your thing.

Catch you all later, much lovely taps, as always: peace.