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Speaker 1: I was asked this question yesterday by a client.

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Speaker 2: You know our raid is going to start going down

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in January because you hear all the punt saying, oh, yeah,

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they're going down right away, and I don't think they are.

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Eventually they will, but in the near term I don't

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think that they will because the market is saying inflation

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is still here. How we saw with the CPI report.

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I think it's actually higher than that. But eventually it

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will go down. But we do actually have to affect

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change in order for rates to go down and make

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it more advantageous for businesses to do things.

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Speaker 3: You are listening to Carrie let'sa'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.

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Speaker 4: Than ever, and welcome you are listening to and watching

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the Financial Survival Network. I'm your host, Kerrie lutt Well.

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We got the TPI number out today, two point seven percent.

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We can all celebrate between that and DOGE and tariff

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and all these good things happening. Happy days are here

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again or maybe they're not. And lower interest rate not

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the boot it ideal is with us now. Ed, great

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to have you back on the show. So we should

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be celebrating in the streets now. Trump won and he's

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actually going to address little minor problems like the deficit,

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like government spending, like all these good things. So why worry?

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Speaker 1: Yeah, exactly, Well, thanks for having me back.

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Speaker 2: You know, to two point seven percent CPI a little bit.

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I hate the term. Oh, it's you know, it's hotter.

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The inflation is a little bit hotter than what we're expecting.

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Inflation is not two point seven percent. We all know

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it's it's it's higher than that. Jannet Yellen's interview. I

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mean she she regrets, uh, as she said it last night.

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You know, she regrets the fact that she said inflation

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is transitory and and uh, you know, it's it's.

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Speaker 1: Higher than expected.

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Speaker 2: We all know that it's here, and I think it's

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it's gonna actually get a little bit higher going into

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into next year. I don't think it's going away anytime soon.

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But you know, these policies going forward, I do believe

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long term, you know, we will be able to get

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it under control if we actually follow through on the

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on the policies of the new administration. But it's uh,

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we'll have to wait and see and it's not going

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to be out without some pain.

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Speaker 4: Yeah, well, no pain, no gain. But you know, when

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you look at it, if we got rid of the

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corporate welfare, that's like the lap time I heard about it,

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we're both quing one. It was three hundred and fifty

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billion a year, all right, So we get rid of that,

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we get rid of the improper payment. Elon Musk, the

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head of DOGE in the vech Ramaswami, said that they

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want to reduce the number of government agencies from something

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like ploth the five hundred and ninety nine agencies. And

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you know there are agencies you don't even know about,

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Like I just did a search on chat gipp a

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while ago and I said, give me one hundred agencies

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I can get rid of. Then nobody will ever know

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the difference. And some of them are minor, relatively minor.

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But it's a culture of waste, corruption and inefficiency. One

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thing that's been advertising is the president Impoundent Authority, which

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was dramatically scaled back during the Nickton era congrect path

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the law saying if we call you have to spend money,

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you have to spend it. You can unimpounded unless we

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agree if you can impound it, and this had kept

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back on a presidential power that went back to George

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Washingship or at least Jeffers maybe Washington. I think that

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Trump is going to make liberal use of it and

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tell Congress sue me, and Congress the controlled by the Republicans,

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I don't think they're going to sue. So that means

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the minority party is going to sue the president. It's

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not going to happen. I think there's limits impoundment where

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effectively will gut a program. But it's going to be

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really interesting because I've read a number of articles. I

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talked to Bill Walton, who is on Trump's transition team,

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and he says, they're going to use it. This is

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going to be Bloody Hill in Washington. Can you picture

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if it starts happening?

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Speaker 1: Yeah, and you know.

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Speaker 2: It's it's so so let's look at it from the

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market side, the economic side, and then the.

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Speaker 1: Public perception side.

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Speaker 2: So the market hates uncertainty, So I I think is

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the we have this infighting, We're going to see a

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lot of volatility, you know, as they try to you know,

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implement some of these new policy changes and eliminate some

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of these agencies and jobs.

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Speaker 1: Uh And as a result.

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Speaker 2: Of that, you know, the the government, what's been propping

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up the economy is government spending.

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Speaker 1: Uh and and so you know that that's going to

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stifle the economy for a short period.

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Speaker 2: I really believe, you know, if you just look at

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the math, you know, we're the market's gonna go down.

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We could see correction territory. We may even see bear

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territory for a little while. But like you said earlier,

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you know, no pain, no gain, right, We're in order

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for this to take hold, we have to realize some

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short term pain in order to justify and and enjoy

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the long term gain down the road.

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Speaker 1: So right, so not only are are.

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Speaker 2: We going to see uh an impact on the markets,

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but you know also the the economy. Now, the public

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perception is they really want this, but are they willing

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to accept that short term pain? You know, let's face it,

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we are a nation of consumption. We consume, We don't

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really produce a whole lot of anything. We just consume.

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So really we're trying to change these habits, you know,

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and probably one of the biggest habits is government waste.

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You know, I heard on the report. I can't remember

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what channel was, but it was saying one percent, one

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percent of government workers of all employees work nine to

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five Monday through Friday.

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Speaker 1: One percent, you know, So that's yeah, that actually what?

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Speaker 4: Right?

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Speaker 1: So what is that going to look like? What is

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the lowest hanging fruit?

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Speaker 2: How are they going to resolve some of these spending issues?

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And like you were talking about this this use it

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or lose it mentality? You know, well, it's it's November,

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it's October, we're in the third quarter. You know, we

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have all we have hundreds of millions, millions of dollars

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left in our budget.

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Speaker 1: Let's just spend it.

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Speaker 2: We've got to spend it otherwise we're not going to

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get that same amount next year. So, you know, how

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can we change that culture going forward? And I think

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that's going to be the hardest hurdle to overcome, and

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I don't know how they're going to do it, and

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I'm excited to see that they're even going to try it.

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Speaker 4: You know, they could you know, that number one percent.

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The buildings are empty all over DC. You know, the

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one of the biggest benefit of the Obama administration was

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the expansion of the federal government, which led to this

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huge expansion in norder Virginia. And you know, if you

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drive through DC and then Virginia to the top of

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it used to be you know, the traffic left at

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like thirty minutes, you know, fifteen twenty miles. Now it's

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seventy miles down there. It's all suburb at BP of

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all the government workers, and now they don't even go

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to the office anymore. I only said that the way

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to cut back on government was to tell tell the

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worker next time of the note storm, only essential government

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workers go to work, and everybody who doesn't show up,

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you fire them because you only want essential people. You

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don't want any non essential workers. Right, but maybe they'll

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borrow a borrow a chapter from my book on how

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to cut government weight carey.

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Speaker 2: Based on that, I think you should be part of

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DOSE because I think that's brilliant.

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Speaker 1: Well no, I mean, you.

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Speaker 2: Already tapped yourself as being non essential, so you know,

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why why should we continue that salary and benefits and

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everything so goes along with it, and you think about

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the number of jobs just just you know, during this administration,

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just in the last year, half of the jobs created

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were government jobs.

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Speaker 1: And to do what I mean, that's you know, it's.

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Speaker 2: A form of nepotism, is really all it is. Right,

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It's like, oh wait, I can get you in here,

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come on in, come on in. And that's really all

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it is. So, you know, are they going to be

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able to eliminate agencies and their totality? You know, how

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are they going to start? What's that going to look like?

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And you know, like it is going to have a

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negative impact short term, but I think long term, you know,

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it's going to be good. But it has to be permanent.

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It can't all be executive order because then the next

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administration is going to come in and wash it all away.

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We already saw that, you know, from the this this

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current administration, from the previous administration, Trump's first administration. So

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it's executive orders are great for that time period, but

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then they.

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Speaker 1: All go away.

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Speaker 4: Yeah, and so therefore got to be done by consensus.

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Maybe that will happen that ADLOP three branches are in control.

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And beauty is that they ever read by Milton Friedman.

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He said, the first hundred days of an administration are

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the most important. That's the only time you can get

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something done because all the forces that are marginaling against

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you are in dis array. And that's when you get

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a career. And Reagan did that at some expense. Trump

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did it, but not enough. Now you see that the

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day he walked into the Oval office, there's going to

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be a stack of executive orders that he signed without

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second thought, and all of his nominees they're going to

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go through quickly. Are he going to do a not

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a reset appointment, but a vacancy appointment? It is different

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than a resets appointment. It's the resetch point that I

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think it's good for a year with salary and then

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another year without salary. A vacancy one is good for

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two hundred and ten days. So you could be the

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acting director. And you know they're going to use every

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trick in the book here that's been used against the

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American public. But let's go back to uh. You know,

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you get rid of half the government workers, a million

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of them, you just dump them, and then another half

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a million uh or a million contractors, way more contractors

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than there are employeed. Uh, they can't just fire these

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people at Kurtie Days, not that that's not out of

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the government work. They're going to give them a severance package,

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so the actual benefit probably isn't going to kick in

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for two years, you know.

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Speaker 1: H Yeah, And I do like that idea.

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Speaker 2: And I can't remember if it was Musk or maybe

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it was our laugher. I can't remember who had the

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idea of saying, you know, we we've got to incentivize

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you know, their their their ability and desire.

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Speaker 1: To get a new job. So you know, if if in.

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Speaker 2: That two year period, if you get a new job,

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you still continue to get that severance on top of

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the new job, instead of waiting until the end and

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then all of a sudden, well, you know what, I

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don't have a job now, I'm going to still be

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on the government doll. It's just going to be unemployment,

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you know. So we there has to be a way

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to get incentivize people to say, you know what, let's

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find another career, because we still have people from COVID

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that that are you know, underemployed because they choose to be,

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or unemployed because they choose to be. They just don't

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want to go back to work. So you know that

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again that that goes back to the culture issue. You know,

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how can we get people to say, you know what

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I actually do want to do the American dream. I

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want to work and you know better my life, in

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my family's life.

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Speaker 4: So if they actually make all these cuts, that should

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have a beneficial effect on interesties.

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Speaker 2: Right, yes, absolutely, And you know I so I asked.

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I was asked this question yesterday by a client. You know,

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are our raid is going to start going down in January?

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Speaker 1: Because you hear all.

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Speaker 2: The punt in saying, oh, yeah, they they're going down

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right away, and I don't think they are. Eventually they will,

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but in the near term I don't think that they

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will because the market is saying inflation is still here

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we saw with the CPI report. I think it's actually

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higher than that. But eventually it will go down. But

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we do actually have to affect change in order for

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rates to go down and make it more advantageous for

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businesses to do things. We have to be able to

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loosen up the lending so that banks will lend and businesses,

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small businesses especially can grow. But we're seeing a still

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a uphour excent of positivity even passed the first ten

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to fifteen days since the election. We're seeing it in

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the Russell two thousand. We're still seeing in the markets.

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You know, we saw the CPI the hotter quote unquote

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hotter than expected. But the markets really don't care. I mean,

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they're looking at it longer term, and I hope it

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just continues going forward.

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Speaker 4: That's really a good question, is how long can the

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trumporia continue to run?

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Speaker 2: Yeah, And you know, like you said, it's it's that

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first hundred days that is so important.

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Speaker 1: And I agree completely.

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Speaker 2: You know, Larry Cudlow said this, and I think I

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heard our laugh for talk about it too, and and

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I agree, uh completely. Is that My fear is that

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the talk the scuttle but if you will, is that

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they're going to push that the the continuation of the

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current tax code to the second half of the year.

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And I think that that's a mistake, you know, to

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your point exactly, we've got to get it done, you know,

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in that first hundred days while we can and and

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make it permanent. You know, especially if we're talking about

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lower corporate tax rates and lower in the you know,

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long term capital gains, you know, those are the things

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that are So that's going to create the certainty that

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we need for the markets to to continue being happy.

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Speaker 1: And and uh uh you know.

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Speaker 2: Continue the upward swing and and it's going to temper

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you know, any any correction in the market, you know,

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if if not completely for a shorter period of time.

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Speaker 4: What about the con that the Trump threw out there,

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actually eliminating the I R S doesn't sound like it

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could probably happen, but it beings like the situation of the

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country in everything is on the table.

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Speaker 2: You know, for the first time ever, everything is on

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the table. You know, if we go back to Reagan's comments,

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you know, this is this is what the administrative state,

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you know, the fourth branch to Vive's comment, the fourth

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branch of the government, right, the administrative branch is the

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I R S.

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Speaker 1: What they would like is you know, a.

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Speaker 2: Two line tax return. You know, how much do you

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make and send it in? Is the second line. And

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if we go back to everyone's so afraid of tariffs,

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I big tariffs. That that was the only tax for Americans,

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uh for the longest time. And so we needed to

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raise more money, you know, after World War one and two,

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and so we imposed the you know, the peral income tax.

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Speaker 1: So you know, the now is.

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Speaker 2: The time to make the changes. That's where we can

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really affect change and make it permanent to benefit Americans

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and have America become you know, a manufacturing powerhouse.

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Speaker 1: We need to bring that.

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Speaker 2: Manufacturing back and we have to make it more tax advantaged.

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Speaker 4: Yeah. No, I couldn't agree with you more. And uh hey,

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getting rid of the I R that paint. I could

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believe that too.

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Speaker 2: I don't think it's going to happen, but boy, I'll

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tell you what I sure would like it. You know,

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if if I didn't have to stroke a tech check

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on a quarterly basis.

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Speaker 1: That that would be that would be great.

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Speaker 2: And imagine the positive impact that that would have on

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the economy, I mean more disposable income. And people forget,

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they get it's counterintuitive, right, Folks are so focused on well,

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you know what if we eliminate taxes where we're not

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going to have revenue, Well, if we're creating more of

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a tax base through production and manufacturing and we're growing

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the economy, you know, that's where that the tax is

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going to come from. That's going to be more than

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what we can spend. Once we get rid of the

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government waste and hopefully actually start spending down the deficit.

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Getting rid of the deficit.

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Speaker 4: I can't wait, so I hope I only live to

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see it. Eventually. It have to happen, because if just

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makes subtle sense, it always prepeats coming on. When we

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talk next December eleventh, twenty twenty five, where's the market

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going to be at? Then?

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Speaker 1: You know, you know, I think we're going to see

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I'm going to be conservative here. I know people are

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being way way way.

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Speaker 2: Over U four work in the growth, but I think

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we're going to see, you know, an eight to twelve

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percent growth by the end of next year. I think

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it's going to be unbelievably volatile in the second going

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into the third quarter, but I think going to come

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out on top by the end.

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Speaker 1: Of the year.

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Speaker 4: Well, we'll see if the January effect is alive and well.

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In the meantime, make sure you go over to edsite

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00:18:08,920 --> 00:18:12,680
e g SI Financial dot com. The link is in

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the show notes this interview on Financial Survival Network dot com.

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And I would just ask you, when you did the bite,

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please sign up where your pre newsletter. Like sixty thousand

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plus other FSN members, have And if you've got a

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00:18:26,920 --> 00:18:29,480
question or comment for Ed or myself, shoot me an

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email k l at Kerry Lutz dot com. Ed always

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a pleasure. Thanks for stopping by.

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Speaker 1: Carrie, I appreciate it.

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Speaker 3: Thanks for listening to Carrie Letz's Financial Survival Network, your

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solution to today's trying times. For the latest, go to

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Financial Survival Network dot com. Financial Survival Network

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Speaker 1: Now more than ever,