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Speaker 1: There's almost no doubt that Pal's going to be out

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when his time is up, and he's realistically not going

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to be reappointed. President Trump has really made no secret

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about that, and I think President Trump would fire him

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if he could, but he can't. So this is why

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he's doing what he believes is the next best thing

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and looking at shadow fed chairs.

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Speaker 2: You are listening to Carrie Leutz's Financial Survival Network, where

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you get valuable information you just can't find anywhere else

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to thrive in today's trying times. You need the Financial

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Survival Network now more than ever. Go to Financial Survivalnetwork

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dot com and get your free newsletter and gift. Financial

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Survival Network now more than ever.

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Speaker 3: And welcome.

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Speaker 4: You are listening to and watching the Financial Survival Network.

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Speaker 3: I'm your host Carrie Lutz.

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Speaker 4: And well, we know there's a big stink that's been

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going on between the President and chair Jerome Powell. Has

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he outlived his usefulness? Is he on his way out?

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What's the real story here? Well, Paragh el Amin is

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with us now an attorney and well you can find

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him at lawpla dot com.

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Speaker 3: Parukh great to have you on the show.

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Speaker 4: So you're an attorney, but obviously interested in economics and

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economic policy here. What's your take on what's going on

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with the FED?

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Speaker 1: That's right, Kerrie, and I've got a background in finance.

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I mean, in terms of what's going on in the FED.

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This is something we've seen which is classic President Trump style,

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which is he's running the government more like Trump organization

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than as the president. And what I mean by that

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is President Trump is very used to having a lot

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of control over his organization and decision making ability, and

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I think we've seen time and time again where he

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gets frustrated when other people aren't doing what he wants

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them to do. And that's what we're seeing here with

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Jerome Powell and President Trump hinting at the fact that

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he may end up appointing a shadow FED chair, which

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is unprecedented, We've never seen anything like that before, but

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all because he doesn't really like the fact that Jerome

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Powell is continuing to allow higher interest rates than President

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Trump would like.

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Speaker 3: Right.

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Speaker 4: So I have a theory that this is the first

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AI driven administration in history. All the policies coming down,

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whether it's immigration, legal policies, economic, it's all.

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Speaker 3: Driven by AI.

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Speaker 4: And if in fact it is what do you think

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the AI is pointing to in terms of monetary policy.

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Speaker 1: Well, that's an interesting theory. I haven't heard that before, Carrie.

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So to clarify what you're saying and asking, are you

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saying that you believe that the Trump administration is using

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literally AI to help come up with its policies.

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Speaker 3: Oh, there's no question in my mind.

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Speaker 4: I call it Trump GPT, and having used AI pretty

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extensively for the past three years, I can just pick

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up the patterns and such like. For instance, you know

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as an attorney that to drift an executive order, it's

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not just the thing where you just write it out.

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A lot of research, memorandums have to be done. Every

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law that's on the books has to be run through

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to make sure that you're not conflicting with the law,

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constitutional aspects, all these things, and the fact that he

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had so many of them literally ready the moment he

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took his hand off the Bible and was sworn in,

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he was signing executive orders. And there's two reasons why

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I know that this is AI driven. Number one is

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the secrecy he knew about this, which means there's a

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very small core group that's responsible for this and to

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have a law firm do it could take months, years,

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dozens of.

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Speaker 3: Lawyers running around, running up hours.

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Speaker 4: Not to say that lawyers haven't reviewed it, but that

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the core of it probably is AI generated. And then

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just pattern recognition where I can see AI rearing its head,

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where just certain certain things that happen.

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Speaker 3: It's just a pattern.

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Speaker 4: So it's my theory and nobody has proven.

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Speaker 3: Me wrong yet. But if I'm wrong, I'm wrong. Yeah.

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Speaker 1: And so you think that President Trump's idea of maybe

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a shadow fed chair came from AI.

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Speaker 4: Uh, very possible, or it might have come from somebody else,

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and then run through the AI to see if it

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could in fact be accomplished, and you know it'll run

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itself out. I know for sure for legal strategy, it's happening.

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I can see it there. We've never seen cases go

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to the Supreme Court. He's only been in power five

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months and yet three or four cases have already hit

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the Supreme Court and been decided.

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Speaker 3: And that's just something. As a follower, as an.

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Speaker 4: Attorney, recovering attorney, I've never seen anything like where Supreme

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Court taking cases on an emergency basis the way they have.

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Speaker 1: That's right, And look part of this is traditional Trump fashion.

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President Trump likes to move quickly and he makes a

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lot of moves at any given time, so a lot

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of his presidency has a lot of unprecedented moves, including

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the potential appointment of a shadow FED chair before Jerome

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Powell's appointment is up May in May twenty twenty six.

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But look, the reality is that President Trumps hasn't made

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it a secret that he is frustrated at your own

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Powell being slow to lower the interest rates. And look,

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something to keep in mind is the Fed has a

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tough job to balance between economic growth as well as inflation.

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And as a core component of this employment because the

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reverse to the challenge is that low interest rates will

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spur economic growth, which is good. But what happens with

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economic growth is most of the time it will also

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lead to inflation. And that's one of the core pieces

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of the mandate of the Fed is to also control inflation.

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So many times it becomes very difficult between finding the

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balance of lower interest rates to spur economic growth, which

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is something that President Trump has made no secret about

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the fact that he's an avid supporter of and I

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think he believes that he wants it to be a

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core part of his legacy. So it's balancing that while

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still also tempering inflation. And so President Trump seems to

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make a lot of decisions from the gut, as he

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has as a businessman, and Jerome Powell is much more

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by the books, by the data, and he's very cautious

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about the moves he makes. And I think that's the

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dichotomy and the just the position that we're seeing between

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these two people.

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Speaker 4: Yeah, yeah, for sure, he doesn't have an easy job

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Jerome Powell, for sure. And the inflation, yes, definitely a factor. Well,

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what do you think of DOGE though, as far as

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bringing down the federal deficit and perhaps bringing that under control.

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Speaker 1: Well, I would look to the head of DOGE, which

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was once Elon Musk and him no longer being involved

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in DOGE and then simultaneously now criticizing President Trump's latest bill,

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and he's criticized both sides.

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Speaker 3: And so this is.

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Speaker 1: Why Elon Musk has said that he wants to form

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a third party is because the challenge I think Elon

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Musk is faced and seen firsthand from being involved INDULGE

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is it's seemingly impossible with the way government is structured

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to really get the balance or the debt in control

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and balance because of the way the government spends money

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in both sides vying for control, in favoritism amongst their lobbyists.

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And that's the big challenge here, is that everybody is

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looking to short term rather than looking at what's best

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for the long term future of America.

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Speaker 4: Yeah, and you know, interest rates, well, they might be

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higher than zero percent where they were a couple of

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years ago, are probably right around where they should be

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on a normalized basis prior to the Great Financial Crisis

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which set off all these negative interest rates. You don't

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really want negative interest rates, negative real interest rates. It's

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unhealthy for the economy. And somebody's got to buy these treasuries, right.

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Speaker 3: That's right.

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Speaker 1: And so what a lot of people don't realize is

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there's the balance between the monetary policy, the buying and

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selling of bonds to control the money supply in the economy,

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as well as fiscal policy in terms of how a

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government is spending money. And ideally those really should be

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balanced against each other, but typically many times, unfortunately they

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kind of go their separate ways and each side is

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kind of doing what they believe is best without necessarily

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looking at what's best for America as a whole, because look, ultimately,

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monetary policy and fiscal policy are each wings to a bird,

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and you need both for the economy to be able

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to soar. And it is interesting that unfortunately the US government,

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whether it's under Democratic party rule or Republican Party rule,

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is still spending far more than it should be and

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not really accounting for how it's going to reduce the debt,

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because some amount of debt is good, but an excessive

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amount of debt is really really bad.

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Speaker 4: Yeah, and all lower interest rates do is increased debt.

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As we know, you know, there's some interesting cases I

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think that we'll be coming up this term. First and

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foremost is the Impoundment Control Act of nineteen seventy four,

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which basically said that if Congress allocates the money, if

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they say it's getting spent, then it's getting spent, no

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matter how absurd the program might be. And that really

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wasn't the way that the Constitution was designed. Presidents had

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impoundment authority up until you know, fifty years ago. And

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now he wants it back, and I believe he's going

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to get it. I believe the case is coming and

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it's just it'll probably come up this term in one

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way or another.

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Speaker 1: That's right carried it. Unfortunately, this use it or lose

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it type financing with Congress and the allocation of funds

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is something we typically see throughout the government, and the

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challenge is balancing the two. For example, I worked for

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a summer in private consulting where the consulting company did

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consulting for veterans' affairs, which I'm an avid believer in

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that we should be taking care of our veterans, caring

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for war years. And unfortunately, regardless of which department you're in,

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there is a competitive eating process, and part of it,

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regardless of which agency it is, they do look at

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the prior year's budget and whether it was fully allocated,

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and many times if it wasn't, what will happen is

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the government will take back that money and reallocate it.

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So it does create this perverse incentive to spend spend

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because the challenge and the risk is, for example, let's

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say you don't necessarily need all those funds this year, Well,

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if you don't use them, what might happen is if

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you need them the following year, they might not be

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available for distribution. And that's the biggest challenge here is

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that therefore, unfortunately, it fuels this never ending spending cycle,

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which with each agency trying to max out their budgets

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year after year.

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Speaker 4: Yeah, and for an example of the absurd things they

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could do, put this in an article. If Congress decides

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that they're going to have a tomb for the faceless bureaucrat,

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all right, like we have the tumb of the unknown soldiers,

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so we have one with a tumb for the faceless bureaucrat,

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and they're going to fund it. They're going to have

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a bond are running twenty four to seven, and the

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bonfire will be fed with freshly printed one hundred dollars

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bills from the Federal Reserve. All the president can do

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under the current state of the law is like the match.

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He really has no ability to actually rein in this

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insane spending. And I mean, this is like absurd. You know,

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they're I don't think they're going to do it, but

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I wouldn't put it past them because we've seen from

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Doge the types of insane things they're spending money on.

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Speaker 3: That's right.

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Speaker 1: Well, President Trump is in sort of a unique and

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special situation, which is where he's the president of the

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Republican Party, as well as having the Republican Party control

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both the Senate and the House. So in terms of

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the best chances of being able to get some sort

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of cooperation from the two portions and segments of the

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US Congress, both the Senate and the House of Representatives,

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President Trump has a unique advantage in being able to

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do that. And we've still seen the dysfunction that goes

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on between the executive branch and the legislative branch, including

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in terms of how policies are supposed to be put

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forth and how spending is supposed to occur, including with

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this latest spending bill. With President Trump.

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Speaker 4: Yeah, so, and still getting the Congress to do things,

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it's like herding cats.

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Speaker 3: That's right.

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Speaker 1: And you know part of this is I've joked with

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friends that if members of the government were treated the

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same way as we are in the private sector, which

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is you're going to get paid and get raises for

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your results, and if you don't do your job, you're

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going to get fired, I think we'd have a lot

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less dysfunction on Capitol Hill and in Washington, DC.

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Speaker 4: And that's probably another case that's coming up in this

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term that we don't know about yet, but basically the

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ability to reschedule all these employees under Section F and

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then get rid of them as needed. You know, the

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government is seriously out of step with technology, with modern

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economics and the world for that matter, and he's trying

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to bring the government up to date here and as expected,

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getting resistance from all parties.

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Speaker 1: That's right. Unfortunately, what we're saying is the effects of complacency. Unfortunately,

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many government employees and parts of government have become very

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complacent with America's place in the world economy. But the

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reality is they've been gifted that privilege by the people

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before them who did all the work to make America

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the great country that it is. And unfortunately, we have

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a lot of government employees who don't necessarily make it

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their job to look at the advancement of the United States,

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including things like AI, which is going to be a

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major part of the future, and understanding it. I mean,

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we've seen this Carrie with some of the hearings even

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relating to for example, Facebook or social media, where the

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questions from the various senators re laughable in terms of

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the types of questions they were asking shown showed a fundamental,

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in complete misunderstanding as to how technology works, how social

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media platforms work, and what they're able to do. And

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it's not just the social media hearings. Anytime we have

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a hearing relating to technology, we see this over and

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over again, where we have congress people, government employees who

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don't understand fundamentally most parts of the technology, if any

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part of the technology.

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Speaker 4: Yeah, well they think they still think email and texting

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are major innovations, and we're way past that now.

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Speaker 3: But the AI.

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Speaker 4: Doge forget about the optics of musk leaving and all that.

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That is a permanent fixture now of the government, and

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I think we're going to see it spread to state

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and local governments as well, and internationally to the UN

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and countries around the world, because every country is basically

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the way they spend is modeled after the US to

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some extent. They're all running deficits, They've all over promised

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and at some point they're going to have to underdeliver

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and there's really no way out. The only thing that

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can kind of contain this is AI.

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Speaker 1: Well, that's right, and unfortunately, many times government is a

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repeated series of under delivery, and unfortunately, what happens is

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politicians then just point the fingers at each other and

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don't take full responsibility for what happened or try to

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fix it, so unfortunately becomes a blame game. So the

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reality is, if US households ran their budgets the way

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the US government is currently running their budgets, regardless of

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whether it's Republican or Democrat controlled, the reality is you

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cannot run a household even if you drop a bunch

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of the numbers and reduce them to ones that we

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could all make sense of. For example, if we've got

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a median household income of let's say sixty thousand dollars

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and allocating those funds between groceries, insurance taxes, food, those

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various things, you would be running an astronomical deficit to

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the point where you'd never be able to pay it off.

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And unfortunately, because the numbers with the US deficit and

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the budget are so large, it makes it very difficult

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to really understand that. But I saw this one calculation

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where if you look at those numbers and simply drop

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off a bunch of the zeros, the vast majority of

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those zeros, and make it into numbers that somebody can

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actually understand and they're used to seeing. You'll see very

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quickly how problematic this is in terms of actually being

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able to pay it off.

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Speaker 4: Yeah, I couldn't agree with you more. So, what do

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you think will be the net outcome? You think Powell

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is out?

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Speaker 1: Well, I think that there's almost no doubt that Palell's

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going to be out when his time is up, and

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he's realistically not going to be reappointed. President Trump has

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really made no secret about that, and I think President

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Trump would fire him if he could, but he can't.

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So this is why he's doing what he believes is

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the next best thing and looking at shadow fed chairs

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to be able to say, here's my next fedchair pick.

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Speaker 4: All right, well we're gonna sit back, wait and see

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what happens. Just tell us again, how we connect with

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you on the web, how we find out more about you?

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Speaker 1: He Garry Yes, on Instagram, on parrague PA r ag A,

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me A, M I n E s Q. And on

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the web. My website is www dot law p l

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A dot com. Again, that's www dot law PLA dot com.

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Speaker 4: And the links in the show notes to this interview

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on Financial Survival Network dot com. Go click it and

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we just ask if you go there, please sign up

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00:20:19,680 --> 00:20:23,240
for your free newsletter, got one coming out shortly and

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if you've got a question, comment for myself or Parague,

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or just tell us what you think of this.

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Speaker 3: Do you think it's time for Powell to go?

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Speaker 4: Just shoot me an email, klatcarrieluts dot com.

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Speaker 3: Parag been a pleasure, Thanks for stopping by.

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Speaker 2: Thank you, Kerry, thanks for listening to Carrie Lets's Financial

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00:20:42,400 --> 00:20:47,440
Survival Network your solution to today's trying times. For the latest,

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00:20:47,519 --> 00:20:52,279
go to Financial Survival Network dot com. Financial Survival Network

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00:20:52,680 --> 00:20:54,200
now more than ever