Speaker 1: Welcome to another episode of the Chicks on the Right podcast,
where we have our friend and sponsored the show, Zach
Abraham Cio Bulwart Capital Management, with us to talk about
stuff that's going on in the economic world. And we're
just you know, we're just a couple of days out
from the big inauguration. I wanted to get your take.
First of all. I know this isn't like economic financial related,
but I am scared to death for his safety. Like,
do you worry about Trump's safety doing the big pomp
and circumstance stuff with inauguration.
Speaker 2: Well, I mean it sounds kind of crazy to say this,
but I think you sort of have to be right.
Speaker 1: Like I want to burgle wrap him and hide him away.
Speaker 2: Well yeah, I mean, especially considering the fact that you know,
we just saw the guy get shot. Yeah, I will
say this, and I really hope they I really hope
that they look into it. But you know, from my
I don't have any family members that were secret service
members or anything like that. But as a guy that's
grown up around firearms and military family and all that
kind of stuff, that first they I don't I don't
think that this. So I don't think that the Secret
Service is at an empty and so I think with
the increased eyes on it, I would suspect he's probably
going to be safer at the inauguration than he's been
at any point over the course of the election. But
I mean, you know, you live in one of these
times where I just I think that you're probably pretty
foolish to to say that, you know, anything can't happen.
And the other thing that's concerning is, you know, you
have a lot of people in this country and kind
of unlike any other time, right, I was really bummed
out four years ago when Biden got elected. I didn't
want him to get killed, right, Right. You got a
lot of people in this country that would like to
see Trump dead, right, So yeah, it's it's it's freaky
to me. I Like I said, I my assumption is
he's going to be okay because I think the Service
Secret Service is really good at what they do when
they're actually doing what they do, which look, I would
love to see a big, a big expose into that, right,
what happened with the Secret Service in that? Yeah, I
mean the fact that you leave a platform like that
one hundred and forty yards from the podium and nobody's on.
I mean, it just it defies it really does. It
defies all logic. You know, talking to some of these guys,
one of the first things they do is they stand
at the podium wherever the speaker is going to be,
and they start identifying places within a six hundred yard radius,
you know, and and you know, they either put people
on those spots or they have people overviewing those spots,
which very very simple. So yeah, I don't think you
can I know, you can say no to anything.
Speaker 1: I know, I know it. Well, he's he's going to
be very assuming all goes well, and of course we
obviously hope that they do. He's going to be very
very busy because he's listed. I don't even know how
many things are his day one priority. There's going to
be a lot of stuff that has to that relates
to taxes, and that relates to getting prices down for
American people. Obviously those are huge priorities. And there's been
a lot of talk about him bringing back excuse me, tariffs.
What is your take on the tariffs? Do you think
that these are going to make a comeback? Do you
think that there's going to be certain industries that are
impacted more than others. How do you think regular Joe
Schmo's in America are going to be impacted by his
tariff plans?
Speaker 2: You know, this is one of those really interesting conversations
that we've been talking about literally since the first time
Trump passed tariffs. And I don't know if I've ever
heard a conversation that has as much nonsense and like
handwringing around it and a total just a decision by
so many people to completely ignore contexts, completely ignore what
has taking place. So so the first time he was
president and he was talking about imposing tariffs on China,
I was all for it. People like you're going to
crash the economy. And I just sat there and I went, WHOA, hold,
hold on saying it? Hold on? Say it? So right?
So China has been suppressing its own cost of labor
and for a long time was suppressed, suppressing the valuation
of its currency, and it is tariffing our goods right,
answering tariffs with like tariffs. It that's that's balance trade, right.
So it just cracks me up that everybody's like hand
ringing it's Trump gonna pass And I'm like, what China
already did, right, you know, what are we talking about here?
And I was like sitting there, going, look, I don't
think that it's going to have anywhere near the economic
negative economic impact that people are saying, because what that
will inevitably do is force labor back here. Will that
make prices slightly higher? Yeah, but it'll be offset with
people having different jobs wages being slightly higher, which will
be somewhat of a juice to inflation. But then they're
also talking about cutting tax rates. They're also talking about
and I think this is going to be the bigger
deal is cutting a lot of regulations. And the reason
I say that is if we look at what's going
on right now in Argentina, it's really giving us a
path forward. Meaning I was totally in favor of what
Malay is doing in Argentina. I don't think he had
any other choice. Having said that, I honestly thought and
we thought that they would experience significantly more economic pain
than they have already. Now, when you cut government spending
by that much, it doesn't feel good right for anybody.
But the question was will the benefits out weigh the costs?
At this point, Much to my surprise, it definitely looks
like that's occurring in Argentina, and I think that that
sort of gives you will it work exactly the same
way in the US, No, but I think it gives
you a way forward where I think one of the
best ways to offset the inflation that will come from
some of these things is the regulatory cut. So I
think inflation is going to be stubborn for a lot
longer than people want it to be. But I think
the way that they're addressing it is the only way
that really makes sense. And if they follow through with that,
I think that they probably able to keep inflation under wraps.
Like I said, I mean, Argentina has proven that it's possible,
and you know, because it's not everybody's just oh, the
tariffs make things go up and press. Well, yeah, but
they also make you doing business here in the United
States cheaper too, So there's offsets. And we've talked about
this before, right, Like it's this period of time we
live in where everybody wants to analyze like one part
of a problem. They're like oh, and you're like, okay, well,
what's the other part, right, what's the off set? Right?
That's the cost or that's the benefit. Now, what is
the other corresponding cost or benefit to the to the
to the issue hand. So, but now I don't think
that they're going to be big problems, and I think
it's yeah, I think it's a needed step to get
us back to the place where we've got a manufacturing
base here in the United States.
Speaker 1: What do you think is going to happen to interest
rates this year?
Speaker 2: So that's a really So that's the thing that we're
watching right now. And if anybody wants to understand why
the market's currently down to two and a half percent
on the year, hasn't didn't finish very strong, hasn't started
very strong. That's one hundred percent interest rates. You've got
the thirty year US Treasury right now pressing five percent.
You've got the ten year US Treasury back up to
four point six. What we were concerned about when the
Fed started cutting rates was we our personal belief was
that they didn't have anywhere near the economic data that
would justify cutting rates as much as they have. Okay,
well that was our idea going into these first. Now, selfishly,
do I want lower well yes, we all want lower rates, right,
but the question is is what right what are the
what are the impacts, what are the you know, what
are the implications long term? And so going into these
rate cuts, we were just looking around at the economy
and saying, Okay, the FED thinks they need to cut rates.
We see zero evidence in that, right.
Speaker 1: I think, wasn't it just sort of pressure from just
the culture saying enough is enough already, I mean, we
can't take this anymore. And so there was Yeah, I
felt like that was the reason for the cuts.
Speaker 2: Yeah, I mean, I deductive reasoning takes you there, because
none of the other things that they I mean, they
didn't hit their target rate and inflation, employment was still
historically low and started it still is, none of those things.
You're still at record margins in the market, play in
the stock market. You may think that these rates are
going to lead to problems, but to say that you
needed to cut at that point, there was just no
evidence of it. And what we were saying at the
time that our biggest concern was is they're going to
cut too early and then have to reverse course. Right.
The reason that's a concern is because that will give
new life to inflation. It will push the inflation battle
out further and longer, it will probably make it more pernicious,
which means though probably in that event, they probably have
to the raise rates even higher than they did previously,
which would mean they probably would need to do more
bank bailouts, which means they probably need to do more
you know, bailouts of all other things, because the higher
rates go, the more value in bonds drops, right, which
upsets me.
Speaker 1: But Trump is Trump is already complaining about how high
interest rates still are, so there's going to be continued
pressure to get them down. So yeah, like, realistically, what
do you think what's going to happen?
Speaker 2: They're stuck it between a rock and heart place right now.
There really isn't much they can do on the interest
straight front because and now you see you know, new
sanctions going against Russia today, and oil is responding very bullishly.
Oil's back up pushing eighty bucks again. So you get
an upsurge in oil in that gas here, and it's
going to undo any progress they've made in inflation over
the last twelve months, and it's going to do it
really quick. And so I like Trump has got less
control over rates than he would like. I actually think
that's a good thing. I don't think presidents should be
able to make monetary policy other because if they did,
every monetary policy decision would be a political decision, right, right, right,
But the rate side of it's going to be sticky.
I don't really think that they have a lot of
good choices. I think that they started cutting too early.
I think that they should have let rates. I think
they should have let the economy cool more and then
responded to economic weakness with cutting as opposed to what
they've done. And the other thing I think the FED
has done is they have not taken market psychology into
focus nearly enough. Meaning you're at the end or well
what should be. But you've got the longest bull market
US history, and it's the biggest. You're seeing valuations we've
never seen before. You're seeing you know, literally fake created
currencies thrown out their cryptocurrencies with thirty billion dollar valuations.
You're seeing all this crazy stuff. And what I'm saying
is this is not an environment where people are going
to take subtle clues, right, This is not an environment
where people are going to quit taking crazy risks. Because
the FED raises seventy five basis points right, and in
my opinion, the modern FED has forgotten about this is
that there is a psychology to the economy, There is
a human behavioral aspect to the economy, and to get
things to settle down, you need to introduce the fear
of loss, right. And what the FED has done is
even when they get hard, everybody knows the minute something breaks,
they're going to go against everything they've said. It's like
the parent, right, It's like counting to three, but you
never actually get to three, you know, so, and it
just it's that way. And I think that they've got
a market and I don't think I know that, but
you go, You've got a marketplace that believes the FED
is going to come to the rescue no matter what.
And I think that that has really muted the impact
of their interest rates. So in a lot of ways,
I think the FED is actually bargained against themselves well.
Speaker 1: And this is one reason that we're constantly telling our
audience to prepare themselves for whatever eventuality there is. And
one of the best ways they can do that is,
even if they already work with a financial planner, at
least try to maybe get a second opinion. And of
course we always recommend you for that. So how can
people talk to you about where they're because they, as
you always say, they only get one retirement, So how
can they talk to you about where they are, how
they're currently invested, and maybe learn about possible things that
they could do differently.
Speaker 2: Yeah, yeah, and boy, there's so many. It's that's one
of the exciting things. Scary time in the world. But
a lot of overvalued garbage, but there's so much great
stuff that's been left for debt, that's paying massive dividends
and anyway, that's way to get a hold of us.
I get excited. That's where you get a hold of
us is Know your Risk Radio dot com, Bullworkapitalmanagement dot com.
We do a daily show called the Daily Dots. You
can get that through Know your Risk Radio or Bulwork
Capital Management, pretty Google, Know your Risk Radio, Bullwork Capital Management.
We're not hard to find.
Speaker 1: Perfect. Thank you so much, Zach, appreciate it until next time.
Speaker 2: Reservices offered through Trek Financial loc and SEC Registered Investment Advisor.
The opinions expressed in this programer for general informational purposes
only and are not intended to provide specific advice or
recommendations for any individual or on any specific security. Any
references to performance of security so it thought to be
materially accurate and actual performance may different. Investments involved risk
and are not guaranteed.
Speaker 1: Past performance doesn't guarantee future results.
Speaker 2: Trek twenty fourth through zero