Welcome to another episode of the Chicks on the Right podcast, where we have
our friend and sponsor of the show, Zach Abraham from Bulwark Capital Management,
join us to talk about all the events of the day. And we just
we know, of course, now that the Senate passed that god awful ninety
three billion dollar foreign aid bill, we don't know where that's going to end
up in the in the house. We'll see what happens. And if Mike
Johnson can hang on to his balls, we'll see all just hold on to
them, hold onto the ball. Yeah. But the question is with the
spending bill, with a foreign eight bill that size, the question for you,
Zach is how quickly are we going to turn into Venezuela? And what
zoo animals should we plan on eating first? Right? We want to know
what zoo animal would you eat first? Would probably you know what? It
probably would be the ostrich really, And the reason is because I find a
lot more redeeming qualities than a lot of the other animals. So I just
be kind of like, like I told you not And now I think there
were only like six or eight of them there. But I actually spent time
working on an ostrich farm as a kid. It was probably like twelve or
thirteen. Yeah, they're I'm not a huge fan. They're mean. So
they're so out of the six that were there, there was only a nice
one. No, And if they in bite you when you weren't looking,
you know, they don't have teeth, but it's more like a pinch.
And then, like I was telling you, guys, you have to be
careful because they got really sharp hoofs and they can cut you open because they're
you know, yeah, so they're going to I'm changing my answer. I'm
changing my answer from rhino to Austria. You couldn't a rhino. I mean,
if I could shoot a round, I feel like there'd be a lot
of meat on it. That's what I'm thinking about their quantity. The gators,
Yeah, you see the rhino. I just rhinos just seem like such
a it's like a noble animal, you know, yeah, I think so
really elephants are, but rhinos, I feel like they're trying to act like
they're noble, but then they're not. Like they look like they taste good.
You know, it's like an impostor animal kind of like you know,
there's yeah pastor, I mean you could be right. I haven't spent a
lot of time around them. Listen, you've you've changed my mind, Zach.
I'm going with Ostrich. Another one. Another one would be a hippo.
A lot of meat on a hippo. And hippos are mean, really
so mean. Oh, there's so many, I can't believe. So in
the continent of Africa more people are killed by hippos than any other animal.
Yeah, wow, I don't know that they will flat out attack a boat,
flip it over and kill the people inside of it. Yeah, then
we should we should plan. I guess we should plan to close second to
the Oscris. So that's going to happen. We're going to become Venezuela pretty
soon. I think that that's it's going to happen, right, you know,
you know what's so, I'm old enough to just continue to be amazed
that the liberals have become warmongers. I just it's just fascinating, you know
what I mean. I still remember make love not war. You look at
these peop blood man, and now they've just oh yeah, and now they
just hate Russia, right, And I mean, look, wood's a bug.
I don't have any speak, but it's so funny to watch them spin
Putin and Russia up to the Russia has like one hundred and twenty million people.
By twenty fifty, it's going to be less than fifty million. Their
demographics are collapsing. They are a threat to us, the same way venezuelans.
It's a joke. It's a total joke. And watching the Liberals become
the neo cons it's just it's it's amazing to me. W there's no war
that they don't want to be a part of. It's just fascinating. Yeah,
And in meantime, our country is collapsing and like no money's being spent
here, and we are just we're like a total salm. So what's crazy
is I don't know if you guys a been paying attention, but remember how
remember how last year I was telling you that, Okay, things are going
to get really weird now because bad news is scar is going to start to
be good news. And then we're like, because of all that, we
actually expect economic readings and inflation to take off again in the first quarter.
You said that, and we'll hear what you say that, And I don't
say that to go, oh, we got it right. We get plenty
wrong. The reason I say that is because I was talking on our radio
show yesterday and I go, guys, I'm not saying that we got it
right to brag. What I'm saying is we got it right. And I
went to Pacific Lutheran University, my head of research, went to the University
of Houston, and we got it right. And all the Ivy League idiots
on the FOMC were dead wrong. That that should terrify people. We've got
idiots running the show, right. So now you're looking at a situation where
inflation is reaccelerating, but if they don't cut rates more, banks are about
to blow up. Okay, so they're going to be forced to cut rates
into accelerating inflation. Inflation is coming back, guys, get ready, here
we go coming back accelerate. Oil is getting off the map again. I
think oil is going to make a push higher. So gas is going to
go up again. Yeah, they were cutting rates last year banks started blowing
up. They launched that BTFP, the Bank Term Funding Program, and they
flooded three hundred and fifty billion liquidity into the market and inflation took off again.
And what about what about then what about how what does that look like
for mortgages and stuff like that? Do you think that that because I mean
inflation? I think, okay, inflation, but what about mortgage rates?
What about car? Right? About? If they so I don't think they're
going to raise I think they're going to have to cut. But what I'm
saying is they're going to have to cut rates into rising inflation, which is
like pouring gasoline on fire. And the reason they're and this is what we've
been saying for two years now, going, guys, you're boxing yourself into
a corner. You need to get tough. You need to drain liquidity out
of the system, and you got to stop the fire if you don't put
it out now. And it's just like life, right, people, there's
this illusion that we can sit back and not make a decision. But all
you're really doing is you're just the decision is being made for you, right,
And that's what the FED has done. That's what the Fed's done.
So we are going to be looking at a situation where and this it was
really easy to see coming. You go, look, you either deal with
this now or you're going to deal with it later. And it's going to
be worse, and of course, like they do all the time, deal
with it later. So now we're in a situation where they need to cut
rates because things are going to start blowing up, but they can't. So
what would you like if you if you were running the show right now,
what would you do like? What would you what would you advise them to
do? What is the best thing to do? In my opinion, I
would keep I would. I would. I would at the same time announce
a fifty basis point rate cut, and I would announce that I would.
I would work it in concert with the Treasury, and I would have the
Treasury list long dated bonds. So rather than keep issuing short dated bonds to
finance our deficit, list long dated bonds, make the back into the curve,
rise, get the yield curve uninverted, take the pressure off of banks,
go through a mild recession, and come out the other side. Okay,
but we are at a place now where policymakers literally have turned into third
graders where we don't want to eat our vegetables. Right, that's literally what
this all is. Recession, And you go, for God's sakes, guys,
it's not a recession. It's carving off some foam off the top.
And what's so amazing is you sit back and listen to them talk and you
hear them cite all the problems, and you go, hey, guys,
you know what fixes everything you're talking about right now? A recession. Just
let it happen. For God's sake, let it happen, and then they
could bring rates down and then you could probably come out of this in not
too bad of a place. Now, the debt situation is still going to
be out of control, but like people sit there and go, we have
to deal with there's no dealing with it. It is what it is.
We're on a terminal path. Now. You can't relate this, right,
yeah, so we are going to eat zoo animals then, right, they're
like, because it's like a kid, that's what they're doing. They're kindly
a kid, and you're creating a monster. How do we not become Venezuela?
Though, that's what I want to know, like, how do we
we will to become Venezuela anytime soon? And the reason why, Look,
I don't say this to be Pollyannis. There's a part of me that's frustrated
by this because it allows us basically to keep making bad decisions. But truth
be told, the United States is still the only major economy in the world
that is the net ex border of food and energy. And in an inflationary
period of time, what are the two things that everybody has to buy regardless
of price, food and energy? Right? So, will we see higher
rates of inflation here in the United States? Yes? Are they going to
be transitory as and they're going to be gone in a few years. No,
they may appear gone, but it's just because they're rejiggering the CPI calculations,
which they've been doing for forty years. So rates of inflation are going
to continue to climb overall, but it's probably going to be fairly subdued compared
to other countries. But you know, we won't be eating farm animals.
Animals eating farm animals already, at least I am as much as I can
all of why I get my hands on right, all of them. But
yeah, no, I don't think the zoo animals are going to be the
issue here. But but I will say this, Venezuela is where they're at
because of completely incompetent governance. Right though, when you look at Venezuela.
That doesn't make me feel any better, I know, And that is the
one fear right, because if you look at Venezuela like there's a everybody should
do this if you want to understand where feckless and idiotic leadership can get you.
People do not understand the amount people talk about Saudi Arabia in the Middle
East. Venezuela has multiples more oil than they do. I mean multiples.
Venezuela isn't incredibly rich country, and that's what communist type of ideals, and
that's what that type of idiocy leadership can do. It can mess anything up.
So you know, I look at America and I still see us in
the same light that Winston Churchill did, which is, you know, the
Americans, they will eventually come to the right decision after they've tried everything else.
So I would anticipate more pain, but because of our ability, you
know, I don't know, you know, I say this now, and
I'm like, you know, I'm counting on common sense to prevail in a
country that believes men can have babies, so you know, yeah, exactly
right. And then also in a country where you know, like you got
Bernie Sanders who's praising Venezuela. At least he did years ago. Remember when
he would praise Venezuela and then he was like and then he was like,
he's like Homer Simpson. He's like, I'm gonna go ahead. And because
I'm still trying to get it, I'm still trying to get my head around
the fact that we've got a sworn in member of Congress sitting there saying Somalia
and Islam first, right listen, I feel like all of our leaders are
saying everybody else except for us. They're all I feel like they're all doing
They're all saying screw America and everybody else first, and we're all like hello.
It's like that. It's like the spouse that is like I'm here,
Like they're literally cheating on us in front of our faces, and we're all
like it. They're cheating on us, and they're asking us for a ride
to the rendezvous. We've go to the door, you know what I mean.
And it's just watching these people continue to vote this way. But you
know, I hear what you guys talk about, and I feel like we're
pretty sympatical in terms of you guys approach this with a pre pretty even hand,
meaning you don't just go after one side of the aisle, you go
after both of them. And I think that's one of the most terrifying things
because I look at the other side of it and I go, I don't
see a lot there, right, Yeah, like I know we're not can
go to Pollyannazac because that makes it. Yeah. The other thing that I
think that you're at a point of is and I think this is going to
be really tricky and really hard for investors. And I'm not saying this in
a way to tell people that their only hope is us, because I don't
believe that. I think there are other people out there that do as good
a job and potentially even better than we do. What I will say,
though, is that you're at a point where they've got a gun against their
head, meaning they will not allow a forty to fifty percent market drop.
They won't, And the reason they won't is there's two ways you can deal
with debt. Right, you can pay it down or you can grow the
equity. Right, if we build enough equity, the debt as a percentage
of the whole pie shrinks, Right, That's what they'll do, and That
is what we refer to as inflating your way out of debt, meaning it's
it. When the balances get this large, you don't have a choice.
And I don't think people realize that if the government quit intervening and doing these
things, if we weren't spending. I mean, and I've told you guys
this before, but I think it. I think it's important for people to
realize this. Think back to oh wait o nine, that whole collapse deal.
The economy shanked strength three point eight percent, okay, from top to
bottom. At the time, you were looking at sixteen trillion dollar economy.
So three point eight percent is right around six hundred and six hundred and fifty
billion. Okay, that was the contraction six hundred and fifty billion that created
that melee. Right, we're deficit spending almost four times that amount per year
right now, four times that amount my gosh. Wow. Yeah. So
everybody's like the economy's fine, and you're like, oh, yeah, how
could it not be right? I mean, you're just dumping money into one
side of it, and so they can't so they can't stop that, right.
Look, even with all that money flowing in, you got banks blowing
up, you got commercial office space. It's about ready. Think about what
if they just said, hey, hands off, we're going back to the
way America works. You guys need to you know, you got to.
You got to take your medicine. You'd be looking at a depression. So
and that sounds hyperbolic, it's not the the the the you know, put
it in more perspective. Remember, we're all old enough to remember when we
had a balance budget ninety nine, two thousand, right, I don't remember
that, that's how well, okay, so it was ninety nine. You
got to balance budget, right, that's a good thing. If you balance
the budget today, it would equate to an economic drawback that was three to
four times more violent than the financial crisis I was seeing. The budget would
do that. Oh my gosh. Okay, So you're just and that's what
people don't get. But at the same so what does that mean. It
means that asset prices are going to keep going up, and you're going to
have these really violent short term bouts of drops, right, and then they
will inject more money, they will cut rates. That's what I'm saying.
We're so there is no going back. There is no going back. Right,
So what do you do? Right to do? We just got to
write it out. We got to write it out. And people need to
be listening to you on your daily little daily dot dah, daily dot daily
dot And so where can people hear that and find more information about Bulwark Capital
Management And yeah, so just you can just Google Know your Risk Radio podcast
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said, hey, we're going to do fifteen to twenty five minute segments every
single day summing up all the important stuff that actually happened in geopolitics and finance
that day. And so if you listen to nothing else, you'll have a
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And yeah, just google Know Your Risk Radio podcasts you'll find us, no
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