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Welcome everybody to another deep dive edition
of the Chicks on the Right podcast,

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where we're going to talk about the
debt ceiling with someone who actually knows all

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about it and can speak much more
intelligently on the world of finance than we

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ever could. And that's Zach Abraham, the chief financial I'm sorry, chief

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investment officer at Bulwark Capital Management,
friend and sponsor of our show. We're

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always so glad to get insight about
some of the things that are happening that

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affect all of us so deeply,
and the debt ceiling absolutely qualifies. The

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McCarthy and Biden are supposed to and
maybe the other clowns and the Democrat Party

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are supposed to be meeting today to
maybe come to a deal. But like

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yesterday, it was sounding like McCarthy
thought they were still worlds apart. So

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what does this really mean, Zach, Like, is the world going to

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end in sixteen days from this recording
if in fact we max out? What

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does it mean for people like that, like just regular old schmucks you know,

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are world I'm right there? Should
people care? You know? Like

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do we care? Right? So
it's funny all the all the you know,

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the pop and circumstance and all the
drama around it. I don't think

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people realize we've been doing this once
a year for like the lab Well.

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I mean, we've skipped a couple
because of budgeting procedures in the Congress and

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things like that. But this has
been an ongoing issue for a long time.

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Um. I think it's much more
of a political issue truly than it

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is a financial issue in the sense
that, look, if if they don't

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extend, so let's just look at
it kind of like mechanically, if they

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didn't extend the debt ceiling, it
would be financial armagon. Okay, so

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they really would like so when they
say that, it's super absolutely because it

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would be when you look at what
the t so if you I don't want

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to get too far into the weeds, but if you start looking at the

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TGA, which is the the the
the treasury Uh, it's the treasury account

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that holds all the money that they
pay all the government bills with. Right

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when you look at the levels that
that's at, it needs to be replenished.

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And the way they replenished that is
by selling bonds. But if they

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can't pass a debt limit, that
means that they can't pay the existing short

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term debt and they can't make the
interest payments that are needed, and that

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would be what we refer to as
like a soft default, right and things

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would just break loose because the US
government treasuries would probably get hit very hard

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at least initially on that news.
And remember treasuries going down twenty five percent

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in a year is what blew up
Silicon Valley Bank, Right, So that

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debt, that collateral is underlying every
major asset in the world pretty much.

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And so if that collateral that's underlying
all these assets free falls in price,

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it would be financial armageddon without question, Like I mean, the whole world

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would enplode right one of this.
Yeah, And so this is the thing.

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My suspicion is going into this meeting
that McCarthy is going to come out

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with nothing. And the reason that
he's going to come out with nothing is

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if you're Biden, you have zero
incentive to negotiate with them, right,

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because if they do this right,
if they don't sign off on whatever extensions

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there, you know what the media
is going to say, the world's going

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to go into chaos. They're going
to refer to it as the Republican debt

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ceiling collapse, right, and they're
gonna wear it, and he's gonna he'd

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ride a way to reelection. Meaning
we know how the media is gonna spin

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it right, right, They're not
going to tell the real story. The

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Look, we were going into recession
anyway, this sped it up. All

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of this economic hardship would then get
saddled, right, the inflation issue.

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You'd watch it all get passed to
the Republicans, and Biden'd be like,

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I told them not to do it. I told them not to do it,

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but they have. But Republicans are
the only ones that came with a

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plan. They're the ones that already
passed a plan. Yeah, and he

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and he's but he doesn't have an
incentive to give an inch because if he

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if he wants to. Now,
look, I could be wrong. This

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is just my take on it.
I'm just looking at the game that's set

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up here and saying that Biden,
this is a tail. As he wins

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heads, they lose game for him, right if they don't extend the debt

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limit. Regardless, no one's going
to tell the real story on the media,

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right, Things are going to go
insane more banks are going to blow

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up markets plummet. It'll be all
on the Republicans. They passed debt ceilings

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for Trump, but they refused to
dubiden. This is all partisan politics,

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blah blah blah. We know how
it's gonna get some fun in the media,

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right and so I'm just saying the
Republicans would wear this. The other

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thing is is the Republicans need to, in my opinion, be a little

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more realistic here, meaning that we
knew that we'd have to extend the debt

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ceiling this year, five years ago, right, Like the whole people are

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like, but we can't afford this
spending. And I'm like, guys,

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that ship called can't afford something that
sailed fifty years ago, right when we

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get off the gold standard in seventy
one. So as much as I hate

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it, as much as I would
love to see a budget surplus, as

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much as I would like to see
our government operate like a somewhat responsible business,

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right, you can't at this point. You're so far off the rails

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that the only choice you've got is
keep printing money and keep issuing debt.

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Yeah, because we're thirty trillion dollars
in debt at this point, Like it's

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yeah, because like any business,
any business that was thirty trillion dollars in

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debt would probably just go out of
business at this pole, like a real,

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a good, actual business would be
screwed. Yeah. And here's what's

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crazy. If this was a real
business, it wouldn't have thirty trillion in

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debt. It'd have two hundred and
fifty trillion in debt, right because bank

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our businesses have to record off balance
sheet liabilities, right, the government doesn't.

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Oh my god, hey, but
I'm sorry, but I'm like totally

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fascinated by your take on this because
I did not expect it. I thought

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I thought that Biden. I really
thought that the Republicans sort of had the

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upper hand here in that Biden is
the one that's president, so if things

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were to collapse, that's who people
see is in charge. And so even

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if the media spins it and tries
to say, well it's Republicans fault,

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Republicans say we brought a plan,
and he said no, he did nothing.

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He wouldn't negotiate, and so I
kind of I'm just surprised at this

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take because I thought the whole problem
is that Kevin McCarthy can't get Republicans to

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vote on just an increase in the
dead ceiling. So if they can't get

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that to a vote, how is
this going to get resolved? Well,

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that's what I So you've got and
that's and so we've got I don't want

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to talk out of school here,
but we've got a full time analyst that

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works on staff, right, and
he's got a lot of connections. We've

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got connections with people on Capitol Hill
that manage money around there. And a

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friend of mine runs a financial research
company that only focuses on the political side

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of things, right, so's they're
not looking at financials, they're looking at

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political implications for businesses and things of
that nature. And what we've been told

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is that this is a lot closer
to being a complete disaster than most people

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think. There are Republicans like genuinely
dug in on this, and it's it's

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just scaring me because if they really
are dug in, and I understand I

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agree with the principle behind why they're
digging in, I'm just warning them don't

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do that with this. You are
gonna light and it is Biden's fault the

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end of the day, he's the
president, right, but you just know

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that's not the way it's gonna go
down. I was reading a tweet last

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night from Robert Reisch talking about how
Republicans always signed the debt limits and don't

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have problems with spending in debt when
a Republicans in office. Now. I

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don't agree with Robert Reisch on much, he does have kind of a point,

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right, Like, one of the
things that fust me, frustrates me

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about the Republican parties is we only
hear about fiscal restraint and austerity when a

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Democrats in the White House. Yeah, so true, the wise, they're

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spending just like everybody else. Gosh, yes, Zach and Trump was one

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of the worst culprits of that,
right, And so like, I'm just

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sitting there encouraging people. And this
is one of the things I talk on

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our show about, is like,
I think it's pretty obvious where I am

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on the political spectrum, right,
but we cannot let that cloud right the

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way that we're interpreting real life events, especially in the investing in finance world,

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because investing in finance doesn't care about
what you think politically, right,

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you got to look at things through
a naked lens. My take on this

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whole situation could be wrong. I'm
just looking at the chess here and going,

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this is a can't win scenario.
Guys, it's here's one of the

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lines they're gonna say. It's the
Republicans that wouldn't sign an increase of the

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debt limit. If they break it, they own it. That's what everybody's

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gonna say. That's what Wall Street's
gonna say, That's what CNBC is gonna

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say, right, and there will
be that contingent of all of us that

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look, can go, wait a
second, Biden's in charge. I'm just

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saying that's not going to be the
narrative. And I feel like this would

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be sort of the economic version of
the Supreme Court ruling on Roe v.

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Wade. You know, while personally
I was a big supporter of that ruling

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for a variety of different reasons,
I knew that once that ruling came down,

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what looked like a landslide election up
in Fall turned into absolutely not that.

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And I'm saying this situation it reminds
me exactly of that on steroids.

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That's so interesting, that takes so
interesting. Yeah, I'm really now I'm

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super nervous because so okay, then
so okay, let's just assume then that

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Republicans can't make this happen. And
I feel like, to some extent,

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I wonder if Joe Biden, in
this meeting that he has with Kevin McCarthy,

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if Kevin says, Joe, I
have people in my caucus who will

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not play ball on this. What
do you want me to do? We're

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gonna default. Do you care about
politics or do you care about the country,

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Because if you care about the country, you're gonna give a little You're

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gonna you're gonna pull back spending a
little bit to save the country, because

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otherwise my hands are tied. Because
I think Kevin would probably want to do

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the thing he probably do. He
would raise the jet ceiling and do a

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clean bill. He's got the Matt
Gates is and the Marjorie Taylor Greens of

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the world saying Nope, you're not
We're not doing this until there's a spending

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cut. So would Joe Biden give
a little just for the sake of the

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country or are we really doomed?
Like, are we really going to default?

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Look, I think it'll I think
something will get done before this happens

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because just literally nobody wins from this. It's just not good for anybody politically,

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whether it's right or wrong. Again, I am all about cutting spending

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at whatever costs we need to.
I'm just saying this ain't the route to

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take just because you can't default.
Right, So I would would Biden give

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an inch? I don't. I
mean, this is a guy that just

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said the greatest danger to our country
is white supremacist, right. Yeah,

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he doesn't seem like a cat that's
too interested about what's best for our country,

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right Like, I'm not trying to
denigrate him. I'm not saying he

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hasn't done good things in his career. I'm just saying, wait, totally,

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it's we'll say that for you.
Yeah, We'll totally say all those

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things for you. Yeah. All
you see are politically motivated statements and actions,

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right Like, there's nothing principled going
on here. So I don't think

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I mean, look, I think
that they If I was his advisor economically

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and I was on his side,
I would tell him, don't give an

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inch. Your reelection would be signed
the minute that they didn't pass that debt

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ceiling. It'd be the best thing
to happen for you. Joe, don't

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give an inch. He doesn't have
any incentive like the Republicans wear it.

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If this goes sideways, wow,
okay, well guy sucks and every cost

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totally, I'd expect you for this
uplifting unexpected and not uplifting. And it's

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gonna it's just one more thing,
you know, It's just one more awful

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thing in this administration, right,
I mean, like I feel like it's

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just been like one hit after another
hit after another hit, and after all

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the border stuff and after all the
just everything that we've had to deal with

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over the past two years, it's
like just another gut punch, isn't Yeah.

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Well, and and then there's also, right, there's no recognition of

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it. There's no there's no humility
of hey, we got this wrong,

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but let's pull together, you know, like I mean like there's no there's

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no acknowledgement. Everything is political hand
to hand to hand combat and right,

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what's amazing is they only they act
as if there's one side of the aisle

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only engaging in that, you know
what I mean, it's craziness. It's

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just listen, we're we're the chicks
on the right. But we're obviously partisan,

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you know, but I mean we've
even said on our show, they

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all suck when it comes to spending, all of them, like the right

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and the left, all of them. They all literally spend our money like

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they're drunken sorority girls on spring break. I mean, they all do it.

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So we are the first to admit
that. So it's not like it's

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one party that has done this and
led us to this horrible place that we

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are today. I mean, in
thirty trillion over thirty trillion dollars in debt,

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I can't even look at the debt
clock without having an anxiety attack.

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Yeah, and I don't think people
we did a number. I don't quote

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me, but I want to say
something like, if you stacked a trillion

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dollars on top of each other,
spends like somewhere like sixty eight hundred miles

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or something that's a trillion, right, since sixty's like sixty eight thousand miles.

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I'm sorry, it's so crazy,
it's insanity. It's insane. Yeah,

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it's such big numbers you can't even
really wrap your head around it.

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Yeah. Well, Zach Abraham,
we always love talking to you about these

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kinds of issues, Zach. For
those of you who may just be joining

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us a chief investment officer at Bulwark
Capital Management, you can check them out

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at know your Risk Radio dot com. I'm sure you're going to be talking

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about this and many other issues of
importance to the American people. Everyone should

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tune in Know your Risk Radio dot
com. Is there any other place that

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people should look to get information?
They can follow me on Twitter at kwower

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radio or just go to Bullwark Capital
Management dot com and h yeah, it's

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just google us. Know your Risk
Radio, Bullwark Capital Management easy to find,

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thanks zat Thank you. Investment advisory
services offered through Truck Financial LLC,

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n SEC registered investment advisor. Information
presentatives for educational purposes only. It should

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be considered specific investment advice, does
not taken to consideration your specific situation,

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and does not intend to make an
offer or solicitation for the sale or purchase

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of any securities or investment strategies.
Investments involve risk and are not guaranteed,

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and past performance is no guarantee of
future results. For specific tax advice on

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strategy consulted with the qualified tax professional
before implementing any strategy discussed herein