Latest / Financial Survival Network / Are Tariffs About to Flip the US Economy? - Dale Smothers #6311

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Are Tariffs About to Flip the US Economy? - Dale Smothers #6311 · Financial Survival Network

• 0:00
  Speaker 1: Man. You know the thing about these numbers is you
• 0:03
  Speaker 1: could have any narrative you desire, maybe on one end
• 0:06
  Speaker 1: of the spectrum or the other. Let's go there that
• 0:08
  Speaker 1: the economy is slowing down and we're headed for recession.
• 0:12
  Speaker 1: Or you could believe, well, this is not nearly as
• 0:14
  Speaker 1: bad as what it could be and we're actually continuing
• 0:17
  Speaker 1: to grow. Either of those two ends of the spectrum
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  Speaker 1: can be supported with these numbers.
• 0:22
  Speaker 2: You're listening to Carrie Lutz's Financial Survival Network, where you
• 0:26
  Speaker 2: get valuable information you just can't find anywhere else to
• 0:30
  Speaker 2: thrive in today's trying times. You need the Financial Survival
• 0:34
  Speaker 2: Network now more than ever. Go to Financial Survivalnetwork dot
• 0:39
  Speaker 2: com and get your free newsletter and gift. Financial Survival
• 0:43
  Speaker 2: Network now more than ever.
• 0:49
  Speaker 3: And welcome you are listening to and watching the Financial
• 0:53
  Speaker 3: Survival Network. I'm your host, Carrie Lutz. Well Dall Smothers
• 0:57
  Speaker 3: is with us now, and I'll just tell you he's
• 1:00
  Speaker 3: the founder of CEO and the big honcho at R
• 1:05
  Speaker 3: d s Mother's Wealth Management in Kentucky, but he services
• 1:09
  Speaker 3: the whole country. And I will tell you what chat
• 1:12
  Speaker 3: GPT said about him. He said he's a seasoned retirement
• 1:16
  Speaker 3: and income planning expert, Trusted Advisor, radio podcast host, published author,
• 1:22
  Speaker 3: educator dedicated to helping individuals retire with confidence and stability,
• 1:30
  Speaker 3: and man, your work's cut out for you now, Dell.
• 1:33
  Speaker 1: But oh right, what an intro.
• 1:36
  Speaker 3: In the meantime, we've got we've got the job numbers
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  Speaker 3: came out, and you know, the Trump solution is, if
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  Speaker 3: you don't like the numbers, fire the guy, fire the accountant.
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  Speaker 1: Right, Oh, Garry, that's funny. I love being with you, man,
• 1:52
  Speaker 1: This is is an incredible show, and I love your
• 1:56
  Speaker 1: listening audience. We have very similar, I'm sure, a very
• 2:00
  Speaker 1: similar background in our political beliefs and our philosophical beliefs
• 2:07
  Speaker 1: around money. But the ultimate correction that came out last
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  Speaker 1: Friday was one of the worst corrections we've seen, one
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  Speaker 1: of the most negative corrections that we've seen in what
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  Speaker 1: half a century or more, uh, since the sixties. I
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  Speaker 1: believe we haven't been that far off with our labor reports,
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  Speaker 1: and so you know, I think Trump definitely could have
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  Speaker 1: tweeted something differently when he fired the chairman. But she
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  Speaker 1: made a major mistake. She oversaw a major mistake. It
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  Speaker 1: was a mistake of significant importance. And I think, Carrie,
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  Speaker 1: it's pretty apparent that if the Fed had seen this
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  Speaker 1: type of number, they would have likely at least put
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  Speaker 1: on the table a twenty five basis point cut, and
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  Speaker 1: it wasn't even discussed.
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  Speaker 3: Mm hmmm, So what's your take on the numbers there?
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  Speaker 1: Man? You know, the thing about these numbers is you
• 2:59
  Speaker 1: could have any narrative you desire, maybe on one end
• 3:02
  Speaker 1: of the spectrum or the other. Let's go there, that
• 3:05
  Speaker 1: the economy is slowing down and we're headed for recession,
• 3:08
  Speaker 1: or you could believe, well, this is not nearly as
• 3:10
  Speaker 1: bad as what it could be and we're actually continuing
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  Speaker 1: to grow. Either of those two ends of the spectrum
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  Speaker 1: can be supported with these numbers, because if you look
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  Speaker 1: at the revision last week, it does show we are
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  Speaker 1: much worse than we expected to be at this time
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  Speaker 1: a week ago. A week ago we thought we were
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  Speaker 1: in good, strong standings. On Thursday and Friday the report
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  Speaker 1: comes out and it's a pretty significant change. You look
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  Speaker 1: at numbers this week and it hasn't changed much from
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  Speaker 1: last week. And it's not like we are losing jobs.
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  Speaker 1: We just aren't growing as quickly. So both ends of
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  Speaker 1: the spectrum you could say, Hey, we're still growing and
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  Speaker 1: things are well, or you could say, hey, we are
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  Speaker 1: really slowing down here, and the labor market's showing a
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  Speaker 1: sign of weakness in the economy that we don't like
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  Speaker 1: to see. At the end of the day, carry out,
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  Speaker 1: I believe that the market is still in an optimistic
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  Speaker 1: state of mind. I believe that investors still want to
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  Speaker 1: be a part of this American story. I believe that
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  Speaker 1: AI will continue to be the leading edge that pushes
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  Speaker 1: us higher in the S and P five hundred throughout
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  Speaker 1: the rest of the year. But this pause, as healthy
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  Speaker 1: as it may have been, is a direct result of
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  Speaker 1: the uncertainty around the labor market and the economy and
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  Speaker 1: how the FED will react to those numbers. One thing
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  Speaker 1: that sticks out to me, Carrie, not to talk over
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  Speaker 1: you here or not allow you to talk at all,
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  Speaker 1: but one thing that sticks out to me is the
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  Speaker 1: productivity numbers. If you look at those in the labor report,
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  Speaker 1: the productivity numbers show us that the workers who are
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  Speaker 1: still working are far more productive than they've been, far
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  Speaker 1: more productive than we expected them to be. And I
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  Speaker 1: just can't help but think that that's because of AI
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  Speaker 1: and all of the productivity multipliers that you received from AI.
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  Speaker 1: You mentioned Chad GPT right as we came on. It
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  Speaker 1: would have taken you a few minutes to look that up.
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  Speaker 1: And you and I just simply put that into chat
• 5:08
  Speaker 1: GBT right before we came on, and it was it
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  Speaker 1: of that up in seconds.
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  Speaker 3: It's great And if it didn't speak so highly of you,
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  Speaker 3: I wouldn't have read it.
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  Speaker 1: Well, I appreciate it, and I you know you do.
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  Speaker 1: All you got to do is type in who is
• 5:23
  Speaker 1: carry LUTs and you see a much longer resume.
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  Speaker 3: But so productivity. And one thing the job numbers didn't
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  Speaker 3: really elucidate or expand on enough is that the number
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  Speaker 3: of American born people holding jobs went up and the
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  Speaker 3: number of foreign born and I don't know whether they're
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  Speaker 3: illegal or legal went down. So maybe it's not all
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  Speaker 3: that negative exactly.
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  Speaker 1: At the end of the day, the labor the labor
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  Speaker 1: numbers are important, but they're not so important that we
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  Speaker 1: make rash decisions in our portfolio. If you're an investor or,
• 6:03
  Speaker 1: let's just say, if you're a client of RDS Wealth,
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  Speaker 1: we are not going out based off of one labor
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  Speaker 1: report or another and buying or selling any individual stock
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  Speaker 1: or position. We're not changing your philosophy around your plan,
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  Speaker 1: or what type of return we're seeking, or what type
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  Speaker 1: of risk tolerance we may be taken. These numbers are
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  Speaker 1: really out there for important people to make important decisions,
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  Speaker 1: which is why it's important that these numbers are right.
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  Speaker 1: And in the defense of our current administration, it definitely
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  Speaker 1: could have been handled differently, but the result was supported
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  Speaker 1: by data that we made a mistake. It was a
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  Speaker 1: significant mistake, and whatever it is that we need to
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  Speaker 1: fix it, it needs to be fixed. These labor reports
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  Speaker 1: need to be accurate, especially in times like this, where
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  Speaker 1: even the FED chair himself says we are certainly high
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  Speaker 1: in relation to neutral. The FED rate is higher than
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  Speaker 1: it probably needs to be if we wanted to be
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  Speaker 1: neutral in our policies what he's saying. So it's likely
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  Speaker 1: that had we've seen these numbers again, I think a
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  Speaker 1: twenty five basis point cut would would have certainly been
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  Speaker 1: in discussion and probably came to fruition at the last meeting.
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  Speaker 1: Now we have to wait till September, and Carrie, you know,
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  Speaker 1: I don't necessarily think that it's going to hurt us
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  Speaker 1: or help us. Per se if we get a twenty
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  Speaker 1: five basis point cut. But if that's all we get
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  Speaker 1: this year, I think the market will be a little
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  Speaker 1: bit disappointed. It has priced in much more than that,
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  Speaker 1: in my opinion.
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  Speaker 3: Yeah, well, you know, the dollar has been weak, so maybe,
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  Speaker 3: rightfully Powell is concerned about that.
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  Speaker 1: Right, Yeah, that's the other side of the coin, you know.
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  Speaker 1: On the other hand, Powell has every right to say,
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  Speaker 1: we're data driven, and the data just hasn't really supported
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  Speaker 1: a rate cut. Data driven FED no rate cuts up
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  Speaker 1: to this point. Well, if you go back and look
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  Speaker 1: at the data, Donald Trump can complain, and he can
• 8:02
  Speaker 1: certainly want a rate cut, and he has an argument
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  Speaker 1: to make that it would make the paying down of
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  Speaker 1: the debt easier, but that's not the fed's prerogative. That's
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  Speaker 1: not in the FED scope. And when they're looking at
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  Speaker 1: their two sides that they need to make sure they're
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  Speaker 1: maintaining inflation and labor, well neither of those really call
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  Speaker 1: for any immediate action. There's sometimes no action is a
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  Speaker 1: good action, and that's the stance that the FED has taken,
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  Speaker 1: especially with a weaker dollar.
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  Speaker 3: Yeah, rightfully, so, and you know we're not like historically,
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  Speaker 3: the rates are not high. Now, right, you could argue
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  Speaker 3: that mortgage rates maybe are one hundred basis points higher
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  Speaker 3: than they should be, But a five percent mortgage when
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  Speaker 3: I grew up well, in the sixties it was two
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  Speaker 3: three percent, but in the seventies and eighties it was five.
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  Speaker 3: You know, god who went up to twenty something percent.
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  Speaker 3: Five percent over time is a normalized rate. So I
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  Speaker 3: don't think you can complain that Powell has effectively normalized
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  Speaker 3: interest rates.
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  Speaker 1: You're right. And you know the thing is, anybody can
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  Speaker 1: complain about anything they want, and clearly Donald Trump our
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  Speaker 1: plaints until he gets his way, right, Yeah, exactly, you're
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  Speaker 1: supposed for that. You're supposed to complain. But when you
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  Speaker 1: look at it from the scope of history, you're right.
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  Speaker 1: And if you look at the labor market from the
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  Speaker 1: scope of history, we're we're not in dire need of
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  Speaker 1: a rate cut. The labor market's not weak at all.
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  Speaker 1: Even with the most recent revision, it's not weak. It's
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  Speaker 1: can get a lot worse. And you know, it's that
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  Speaker 1: old adage of if if you lose your job, it's
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  Speaker 1: a recession. Oh excuse me, if your neighbor loses his job,
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  Speaker 1: it's a recession. If you lose your job. It's a depression.
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  Speaker 1: That old adage holds true in many walks of life.
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  Speaker 1: And when it's hard for us to purchase a house,
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  Speaker 1: that the appreciation has went through roof. See because in
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  Speaker 1: the sixties and seventies, and especially in the eighties, when
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  Speaker 1: interest rates were at twelve and fifteen percent for purchasing house,
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  Speaker 1: home values were what three times less than what they
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  Speaker 1: are now, four times less than what they are now.
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  Speaker 1: So it's all relative to an extent. And if you
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  Speaker 1: ask me, I think that the market as a whole
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  Speaker 1: has gotten spoiled. We have talked about this in past shows,
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  Speaker 1: the Sugar High, right, their Sugar High, and the FED
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  Speaker 1: at one point was handing out pixie sticks, continuing the
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  Speaker 1: cut rates, continuing the cut rates, and at the end
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  Speaker 1: of the day, twenty twenty five just hasn't given us
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  Speaker 1: the pixie sticks that the Fed had promised at the
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  Speaker 1: beginning of the year and that the market had desired.
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  Speaker 1: But AI and solid earnings and a new trade agreement
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  Speaker 1: across the globe has led the market higher in spite
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  Speaker 1: of the Fed's decision.
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  Speaker 3: Totally. Yeah. So at some point though, they will be
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  Speaker 3: cutting rates, won't they.
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  Speaker 1: They will be cutting rates. It's very likely. You know,
• 11:01
  Speaker 1: our stance here at lads Wealthcarey has been we expected
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  Speaker 1: honestly to have one by the end of summer, and again,
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  Speaker 1: had the labor statistics come out, I think that would
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  Speaker 1: have came to fruition. Now we have three meetings left,
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  Speaker 1: and I wouldn't be surprised if we see a cut
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  Speaker 1: at all three of them.
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  Speaker 3: So twenty five fifty basis points they'll have to make
• 11:19
  Speaker 3: up for what they didn't do this month.
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  Speaker 1: Right, possibly, possibly, I wouldn't be shocked at that at all.
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  Speaker 1: Seventy five point cut by the end of the year
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  Speaker 1: is certainly on our Bengo card. Fifty is almost a
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  Speaker 1: shoe in in our opinion. And what is it three?
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  Speaker 1: If I'm not mistaken, we have three three additional meetings
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  Speaker 1: for the rest of the year to make it happen.
• 11:40
  Speaker 1: So we're looking at.
• 11:43
  Speaker 3: Maybe we'll get a total of one hundred basis points
• 11:46
  Speaker 3: off the rates by the end of the year.
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  Speaker 1: And then guess what, and then guess what? Donald Trump
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  Speaker 1: was right again, isn't that crazy? It's wild? It's work? Yeah, no,
• 11:59
  Speaker 1: please go ahead.
• 12:00
  Speaker 3: So what are you making of the deficit and the tariffs,
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  Speaker 3: which is bringing the deficits down dramatically. Right, Oh sure, sure.
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  Speaker 1: I mean, you know, in a perfect world, I think
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  Speaker 1: Donald Trump has an incredible mission and a vision for
• 12:18
  Speaker 1: what tariffs could be, and American people could get behind
• 12:22
  Speaker 1: this to eliminate the need for income tax and to
• 12:25
  Speaker 1: bring in enough tariff income. The only issue with that
• 12:30
  Speaker 1: is that if we really want to onshore companies, then
• 12:33
  Speaker 1: tariffs eventually could very easily go to zero if everybody's
• 12:36
  Speaker 1: making everything in America. Again, if we're in a theoretical world,
• 12:40
  Speaker 1: if everybody is making everything in America, then there are
• 12:44
  Speaker 1: no tariffs, or at least no tariff income. So you know,
• 12:50
  Speaker 1: at the root of this, I think that the tax code.
• 12:52
  Speaker 1: I know we're shifting here completely, but the tax code
• 12:54
  Speaker 1: should certainly be reviewed. Some sort of overhaul about the
• 12:58
  Speaker 1: tax code and how we pay taxes is something that
• 13:00
  Speaker 1: has has been front and center for the last six
• 13:03
  Speaker 1: to eight months. And understanding that tariffs could theoretically, for
• 13:07
  Speaker 1: the short term, eliminate the need for income tax. In theory,
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  Speaker 1: I don't think that the math would work out, but
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  Speaker 1: in theory, uh, I would love to see someone step
• 13:17
  Speaker 1: up and say, now it's finally time for us to
• 13:19
  Speaker 1: consider a consumption tax across America. Now we have illegal
• 13:23
  Speaker 1: immigrants spending money to buy things and paying for a
• 13:27
  Speaker 1: national tax. Now we have billionaires spending money to buy
• 13:31
  Speaker 1: their yachts and paying a national income tax. It's not
• 13:34
  Speaker 1: income tax any longer. It's just a higher sales tax
• 13:37
  Speaker 1: that goes to the nation's budget. You know.
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  Speaker 3: In effect, the tariffs are a surrogate for that. When
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  Speaker 3: I think, because they're strictly consumption based stuff, you know,
• 13:52
  Speaker 3: I could get hit with it and the way he's
• 13:55
  Speaker 3: structuring it. Certain things we got to buy energy whatever
• 13:59
  Speaker 3: less tariff there or no tariff, and other things we
• 14:03
  Speaker 3: got to hire tariffund Well, it's interesting phenomena and appreciate
• 14:09
  Speaker 3: you coming on.
• 14:10
  Speaker 1: Dale.
• 14:10
  Speaker 3: Just tell us where do we find you? How do
• 14:12
  Speaker 3: we connect with you?
• 14:14
  Speaker 1: Yeah, Kerrie, anybody who is interested can tune into our podcast.
• 14:17
  Speaker 1: It's The Retirement Matter Show with Dale smothers. Find us
• 14:22
  Speaker 1: there our Dswealth dot Com. Ourdswealth dot Com will get
• 14:25
  Speaker 1: you to our website. Our entire team is here standing
• 14:28
  Speaker 1: by to answer any questions or help you in your retirement.
• 14:31
  Speaker 1: As chat GBT said, we'll start and end with this
• 14:35
  Speaker 1: retirees face a very unique set of challenges and our objective,
• 14:40
  Speaker 1: our goals every single day, is to help navigate those
• 14:43
  Speaker 1: complexities around the income phase of retirement planning. We have
• 14:48
  Speaker 1: our podcast that hones in on that specifically, everything from
• 14:52
  Speaker 1: living happy and with the positive state of mind to
• 14:55
  Speaker 1: how we keep the bank account from running dry in
• 14:57
  Speaker 1: retirement ears. We help you with that in every aspect.
• 15:00
  Speaker 1: So again the Retirement Matter Show with Dale Smothers. It's
• 15:04
  Speaker 1: the Retirement Matters Podcast or Rdswealth dot com.
• 15:08
  Speaker 3: All right, thanks so pleasure, Thank you, Kay, talk to
• 15:10
  Speaker 3: again soon. Questions comments, klatcarrielts dot com. Link to Dell
• 15:15
  Speaker 3: sites in the show notes of this interview on Financial
• 15:18
  Speaker 3: Survival Network dot com. If you go there, we just
• 15:20
  Speaker 3: asked you sign up for you free newsletter like over
• 15:23
  Speaker 3: seventy thousand people are receiving it now. Dale, appreciate you
• 15:26
  Speaker 3: coming on. We'll talk to you again soon.
• 15:28
  Speaker 1: Appreciate you, Kay, talk soent.
• 15:30
  Speaker 2: Thanks for listening to Carrie Letz's Financial Survival Network your
• 15:34
  Speaker 2: solution to today's trying times. For the latest, go to
• 15:38
  Speaker 2: Financial Survivalnetwork dot com. Financial Survival Network now more than ever,