The problem in the economy right now is that credit growth is constrained, so
when they raise the interest rate, it raises the risk of financial instability.
The Senate already passed to one point five nine trillion dollar virgin A version of
the budget, so the pressure is really on. Another DAG edition and the
Chicks on the Right podcast today, we are joined by Philip Patrick from Birch
Gold, who's going to help walk us through some of the more recent economic
news that we all need to be thinking about. And one of the things
that is on people's minds big time right now is the possible looming government shutdown
that is potentially going to happen in the next couple of weeks. So what
is at stake with this potential shutdown this time? There is a lot at
stake actually, particularly with the economy is as precarious as it is right now.
But the problem that we have so the government's fiscal year begins October first,
and Congress needs to ask the twenty twenty twenty four sorry spending bill before
then. The problem is that the Republicans already agreed to pay a one point
four seven trillion dollar budget last year, but Speaker McCarthy and Biden negotiated a
one point five nine trillion dollar budgets. So what we've got is essentially a
one hundred and twenty billion dollar hole, which is a big, big hole
right now. They've reached. Late on Sunday they reached an agreement the House
Republicans on another short term stop gap spending bill. Basically it's called a continuing
resolution. And if it sounds familiar, it's because it's familiar, right.
It's the same tactic the Congress have you been using over and over again,
essentially to stall time and to try and kick the can further down the road.
But as I mentioned, the Senate already passed a one point five nine
trillion dollar virgin A version of the budget, So the pressure is really on
right now. I wouldn't be surprised if we did see a shut down over
the issue, which would create uncertainty volatility in the economy, but it may
force a discussion on spending finally, which I think is really that would be
something, wouldn't it. Yeah, like about spending for words? Yeah,
okay, So speaking so when you say precarious economy, speaking of it,
what I would call a sucky economy. So the Federal Reserves Open Market Committee
met this week, which I don't even know what that is, but what
is your take on that and the take on their announcement that they made.
So look the open the FOMC, Federal Reserve Open Market Committee, they decide
whether to raise interest rates to not in raise interest rates, so they're in
charge of the inflation fight. They decided to not raise the interest rates yesterday.
It's good for us, right if particularly if you've got a credit card,
but but look for the inflation fight. It doesn't bode well inflation.
The last inflation numbers that came out, inflation was on the rise again,
which is causing a problem, right And we'd seen recently headline inflation coming down,
but it was being driven predominantly by oil prices. By energy prices,
they'd gone up so much they started to come down. They're now on the
rise again, which is driving headline inflation up. So the Fed had a
decision. If they really wanted to try and combat inflation, they would have
had to raise the interest rates. But the problem in the economy right now
is that credit growth is constrained, so when they raise the interest rate,
it raises the risk of financial instability. We saw six months ago they raise
the rates to try and combat inflation, and look what happened to the banks,
right, So I think right now they're picking stability with the banks over
the inflation fight, which it's good. Short interest rates are a little bit
lower, but it means that prices will be higher for longer, and I
think it extends out the inflation fight. So they're stuck between a rock and
a hard play. So, and inflation, of course, is what is
causing some of the flight from the American dollar. And we've been talking about
that quite a bit over the last couple of weeks, about bricks, about
how all of that is impacting everything. What can you tell us about that
right now? Yeah, it's it's I'm glad you've been talking about a lot.
It's a big deal. The world right now is distancing from the US
dollar, and it's driven partly from domestic policy, the inflation, which is
making the dollar less attractive for other nations to hold. The other side of
things is weaponization. Right We've been using the dollar as a stick. We've
been acting as the world's policemen, and countries like Russia and China are starting
to realize, Look, if we want to do what we want to do,
we've got to end the dominance of the dollar. So the bricks currency,
the Bricks Alliance is picking up the two new Bricks members, Saudi Arabia
and the UAE, are already now starting to settle oil trades in the our
own currency, so away from the dollar. That's breaking a sacrosanct agreement between
Nixon and the Saudis that Saudi oil would only ever be traded in dollars.
So that's broken now, and it's a big concern. Right, these nations
are no longer a joke. They have a GDP larger than the G seven,
Right, they're bigger than the West. Now, if they start trading
outside of the dollar, global demand for the dollar starts to wane. Purchasing
power comes down, value comes down. So I think it's a case of
watch this space as it picks up traction. It could be problematic for all
Okay, So like it's everything is really depressing. Okay, So we're looking
at We're I'm gonna need to start drinking in like two seconds, all right.
So we're looking at a government deadlock, all right, a fad that
just can't seem to like get its act together when it comes in inflation,
and then a world that's turning away from the dollar kind of like what you're
saying, So that if the rest of the world is dedollarizing, does that
mean that we need to do that? Are we should we be doing that
too? Look, I first of all, I'm sorry to be the bearer
of bad news. Shoot the messenger. We will not do that, thank
you. Look, the answer is yes, rider on a level, yes,
So the world is moving away from the dollar right twenty two, Central
government holdings of dollars was at twenty five year lows for the reasons that we
mentioned, and what they've been doing in response is buying gold. Last year
the single biggest year for gold buying by central governments in history. Now,
the reason that they do that, when you're worried about currency decline, you're
buy gold. And the reason for that is that gold and the dollar have
an inverse relationships, and when the dollar goes down, gold goes up.
So it's the best way to hedge. Now, people countries hold dollars,
but we as individuals hold dollars as well. So what applies to central government
applies to us of course on a smaller scale. So I think everybody just
needs to think about how they can hedge some of their exposure to dollars or
dollar denominated assets. Precious medals work really really well for that. And okay,
yeah, so can you can you just talk for our audience? Can
you talk? Because we talk about Birch Gold all the time and what a
great education Birch Golds gives. People who text the word chicks to nine eight
eight nine eight, they get this free information kit. They get all this
education with no obligation. But if somebody gets that information kit and they are
like, yes, I want to do this, can you walk through for
our audience what happens if they pick up the phone, if they send an
email or whatever, what does the process look like for them? Of course,
so as you mentioned, it starts with information we have for your viewers,
for your listeners, we have a free information kit which will guide them
through all of the basics. Now they read that and they think, hey,
this makes sense, they can give us a call. There are people,
many people like myself at Birch that are there to guide people through whole
your hand and we can help people ultimately either roll over any portion of an
existing IRA or eligible four oh one K, and we can help to put
any portion of that into physical metals. As well as those that are sitting
out there with cash in the bank that's losing to inflation, we can put
physical metals in their hands as well, so we help to facilitate physical medals
as part of a portfolio. Education is key to us, so, like
I said, starts with a guide, but you've got people like myself that
are there to tailor make and walk people through the fantastic because so many people
just do not understand how to do that, and so you guys are a
great resource for that. Philip Patrick of Birch Gold, we appreciate your time
today giving us the update. It's not necessarily great news, but at least
it gives people the information they need to You're delightful, so we've totally delightful,
So thank you for joining us. Yes, you guys are very kind.
You've cheered me up.