Edition of the Chicks on the Right podcast. Today we have with us the
spokesperson from Birch Gold, our friend Philip Patrick, and man, this is
a really good week that we've chosen to talk with you because of all of
this horrible news that we've heard about with the port in Baltimore, the crash
that happened with the container ship earlier this week and obviously a hugely important port.
We're just now starting to hear whispers about how much this is going to
disrupt the economy. And Congress just already recently passed this horrific budget which is
beyond horrible in every way, and now there's talk of more spending to deal
with this crisis. So what is your take on that? Yeah, I
mean it's a disaster, right. So we reached an agreement this was Friday
for a one point two trillion dollar spending package. This was minutes before the
deadline. As of course we've come to expect looking through the two packages combining
them, discretionary spending for the budget years are like one point sixty six trillion
dollars. That's just discretionary spending that doesn't include Medicare, Social Security, det
This payment it's twenty seven percent of total government spending. And then of course
we have an emergency like replacing Baltimore's Francis Scott key Bridge. This is at
least a half a billion dollar project, likely going to go up maybe closer
to a billion dollars. And the President, of course has already stepped in
and said the federal government is going to pay for it, which likely means
we're going to get another emergency supplemental bill for more borrowing and more spending.
Quite frankly, it's getting ludicrous, right. The government are already spending one
point seven trillion dollars a year over the revenue that they bring in, and
they still need to borrow more when the unexpected happens. Right, Remember Build
Back Better in twenty twenty one, this was a two point two trillion dollar
project exactly for things like this. But of course the money's gone already.
Now we need more money. The federal government are digging the nation into a
hole deeper and faster every single day, and I'm getting worried. You know,
we're at a point where it's going to be too late to climb out
of it. Maybe the only solution is to keep digging and see what happens.
Okay, so do you do you think we could still get to a
balanced version? If yes, Like, what do we need to do and
what needs to be taken into it to real and government spending to ensure like
any sort of stability in these I mean, because it's crazy. Everything is
crazy right now. It's crazy. And we've got to remember when we talk
about balancing the budget, what that means is just not going further into there.
Right, that's not even addressing this monstrous thirty four trillion dollars of debt
that we have. That would it be possible, yeah, I mean,
look, federal government could cut discretionary spending to zero, right, no funding
for any government agencies, no FBI, defense, agriculture. That's going to
balance the budget. Right, wouldn't it be wonderful? Yeah, it would
be wonderful. It's not going to happen, though. The other alternative is
taxation. Right, Let's raise corporate taxes incomes axes by fifty percent, probably
balance the budget as well. But the problem is neither of these are really
possible. Right. You don't get elected by promising your constituents you're going to
raise taxes or take away handouts. So instead what we're getting is this dog
and pony show, lots of posturing, lots of handwaving, and ultimately another
one point seven trillion dollars in deficit. So the answer is in theory it's
possible, but not in reality today, And especially when we keep seeing these
curve balls right like the Baltimore Bridge collapsing, it just becomes impossible. And
this deficit spending then becomes highly inflationary and just adds to the problem. And
that's why the FED is struggling so much to keep inflation under control. Yeah,
well, and I wonder too if that has something. I mean,
this is, you know, obviously inflation is already terrible, and this bridge
collapse is gonna if there's gonna be more spending for it, it's gonna continue
to raise inflation. So do you feel like there's because I feel like we've
heard this line of thinking for so long, for decades now, with every
president. We hear we're just kicking the can down the road, and our
children's children are going to be paying for this, And we've heard it for
so long that I wonder if people have tuned out of that message because they
live their lives and nothing happens, like nothing really changes except for right now,
we all do feel the inflation, I think for the first time in
a long time. So do you think that that will change anything? Or
do you think that we're just going to keep on kicking the can and it's
just gonna get worse and worse. Look the way things are heading now,
we don't seem to have policy makers that want to make hard decisions. And
I think we've been kicking the can down the road for a long time.
And I think that's a problem with the system that we have. Right if
you're a politician, you step into office, do you want to make the
hard decisions, go through the tough times? It usually doesn't lead to reelection.
So what we've been seeing for a while they say, oh, let's
just lower rates, pump money through the economy. That'll spark things. But
we're creating a bigger problem. The thing is, the numbers today are getting
to a point where it's unsolvable. Thirty four trillion dollars of debt is more
debt than has ever been held by any nation in history. And we've heard
people saying it, but you know, Powell came out not long ago in
a sixty minute interview, and he said, listen, you are mortgaging the
futures of our grandchildren. This is the head of the Federal Reserve, the
guy that's in charge of maintaining the dollars purchasing power. And even he's telling
our legislators to grow up and start dealing with their own problems and pay their
own bills. And I think it's very telling. So I think people are
starting to wake up because people are starting to feel that the thing with money
printing is for so long it had a positive effect, right you know,
stocks were going up, housing everything was just going up and up and up,
so of course everyone was happy. We're now starting to see the realities
of that, and those realities are inflation, and that becomes painful. So
I'm hoping people are waiting, Oh my gosh, such anxiety and total anxiety
over that. Okay, so gold price just hit another record. It's over
what twenty two hundred dollars an ounce, And so tell us how you think
that plays into our current like awful? Mean and why and why you think
it's a good time right now to buy gold for people? Of course,
Well, I mean gold is moving because of the economy that we have.
But a couple of things to mention. So first of all, yes,
gold has hit highs in nominal terms in terms of the dollar amount twenty two
hundred, but in real terms, the high for gold was in the nineteen
eighties. In January nineteen eighty gold here, I think it was eight hundred
and fifty an ounce. If we adjusted that to inflation, that would be
the equivalent of around thirty three hundred dollars today. So essentially we're there in
nominal terms, but in real terms, gold would have to rise another fifty
percent in order to set a record in terms of actual value. Look,
to answer the question, adjusted for inflation, gold's price is about the same
as it was back in January twenty twenty one, the dollars down seventeen percent
since then, gold is up the exact same amounts, up seventeen percent in
the exact same time period. And it's not a coincidence. Right, That's
why people buy gold when currencies up in the air, because gold and the
dollar have a directly inverse relationship. But it's not the only driver, right,
We're seeing, you know, drivers all across the economy. Look at
demand right, central bank gold buying twenty twenty two was the single biggest year
for say, central bank gold buying ever in history. Twenty twenty three the
single biggest year for gold buying full stop, because individuals plug the gap.
So the reality is we're seeing drivers all across the economy, and we've got
to understand central bankers are seeing the same challenges that we are, right,
economic uncertainty, inflation, a loss of purchasing power, you know, the
sheer number of issues, black swan events, warrants in Ukraine. All of
these things are positive drivers for gold, and I think resolving one or two
of them still leaves a very conducive climate. So I think we've got more
records in front of us for gold price and about the best climate for gold
that I've seen, which doesn't vote so wealth for the rest of the economy,
but it does for gold well. And it's because it seems like the
more crises we have, the better it is for gold, which you know,
that's good and bad, right, it's good for it's good for sponsors
like gold, but it's but but I but I worry like that means,
you know, I don't want to look forward to any more crises. You
know what I mean. I'm happy to sell a little bit less gold for
a while. It's the world, I promise, totally exactly, Philip Patrick.
Always great to have you to help us break down these kinds of issues,
especially when there's so much confusion around. You know how to protect people's
finances, and this is just one way to make sure you're diversified. We
appreciate your input as always. Thank you.